Exhibit 10.35

 

***** Confidential Treatment Requested. Confidential portions of this document

have been redacted and have been separately filed with the Commission.

 

SOURCING SERVICES AGREEMENT

 

FOR CHINA

 

BY AND BETWEEN

 

WORLD MED SHARED SERVICES, INC.

 

AND

 

TIGER SPECIALTY SOURCING LIMITED

 

AND

 

TIGER SHANGHAI SPECIALTY SOURCING CO., LTD.

 

AND

 

MARK ENGEL, ELAINE FONG AND DR. GAO ZHAN

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TABLE OF CONTENTS

 

RECITALS

   6

Article 1. Definitions

   7

1.1

   “Agreement”    7

1.2

   “COG”    7

1.3

   “COG Savings”    7

1.4

   “Effective Date”    7

1.5

   “Final Buyout”    7

1.6

   “Final Buyout Price”    7

1.7

   “Initial Buyout”    7

1.8

   “Interim Buyout”    7

1.9

   “Interim Buyout Price”    7

1.10

   “Parties”.    7

1.11

   “POs”.    7

1.12

   “Principals”    7

1.13

   “Products”    7

1.14

   “Profit”.    7

1.15

   “Proprietary Information”    7

1.16

   “PSS Group”    7

1.17

   “PSS Ownership”    7

1.18

   “PSSWM”    8

1.19

   “Purchase Price”    8

1.20

   “Reduced Interim Buyout Price”    8

1.21

   “Suppliers”.    8

1.22

   “Supply Contracts”    8

1.23

   “Targeted Sales (Landed Costs)”    8

1.24

   “Term”    8

1.25

   “Tiger Group”    8

1.26

   “Tiger Medical”    8

1.27

   “Tiger SS”    8

1.28

   “Total Purchase Price”    8

1.29

   “Trademarks”    8

1.30

   “TIGER WFOE”.    8

Article 2. Recitals, Acceptance of Terms and Term

   8

2.1

   Recitals.    8

2.2

   Acceptance of Terms.    8

2.3

   Term    8

Article 3. Exclusivity, Non-Competition and Transparency

   8

3.1

   Exclusivity to Tiger SS    8

3.2

   Exclusivity to PSSWM.    9

3.3

   Non-Competition    10

3.4

   Transparency    10

Article 4. Board Seat, Buyouts

   10

4.1

   Board Seat    10

4.2

   Initial Buyout    10

--------------------------------------------------------------------------------

4.3

   Interim Buyouts    11

4.4

   Final Buyout    11

4.5

   Early Trigger of Final Buyout    12

4.6

   Adjustments to the Final Buyout Price    12

4.7

   Closing Documents for the Final Buyout    12

4.8

   Landed Cost of Goods    12

4.9

   Payments of Interim and Final Buyout Price    13

4.10

   Minimum COG Savings and Actual Sales    13

Article 5. Sourcing Services; Contracts with Supplier

   13

5.1

   Sourcing Services    13

5.2

   Contracts with Suppliers    13

5.3

   Supply Contracts and Pos    13

Article 6. Additional Rights and Obligations of Parties

   14

6.1

   Tiger SS Shareholders    14

6.2

   No Transfer of Beneficial Interest    14

6.3

   Role of Mark Engel    14

6.4

   Employee Retention Plan    14

6.5

   Costs of Formation and Operation    14

6.6

   Working Capital    14

6.7

   Distributions    15

6.8

   Operational Expenses    15

6.9

   Holdback    15

6.10

   Indemnity.    16

Article 7. Products, Product Design, Product Development

   16

7.1

   Products    16

7.2

   Product Quality    16

7.3

   New Product Design Ownership.    16

7.4

   New Product Development Assistance    17

7.5

   Product Innovations    17

7.6

   Exclusive Right to Market and Sell    17

Article 8. Commissions, Payments and Taxes

   17

8.1

   Commissions    17

8.2

   Product Cost    17

8.3

   Product Cost Transparency    18

8.4

   Commission Payments    18

8.5

   Product Payments    18

8.6

   Taxes    18

Article 9. Authority, Representations and Warranties

   18

9.1

   No Authority to Contract    18

9.2

   Signatories to the Supply Contract    18

9.3

   Mutual Representations and Warranties    19

9.4

   Representations and Warranties of the Principals    19 Article 10. Audit
Books and Records    20

10.1

   Audit Books and Records    20

 

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Article 11. Confidentiality, Non-compete

   20

11.1

   Proprietary Information    20

11.2

   Confidentiality of Proprietary Information    21

11.3

   Non-compete from Suppliers    21

11.4

   Confidentiality Agreement from Target Suppliers    21

11.5

   Confidentiality of this Agreement    21

Article 12. Trademarks

   21

12.1

   Trademarks    21

12.2

   Trademark Cooperation    21

Article 13. Default, Termination, Remedies

   22

13.1

   Default    22

13.2

   Default Remedy for PSSWM    22

13.3

   Default Remedy for Tiger SS    22

13.4

   TIGER SS Default Options    22

13.5

   PSSWM’s Default Option    23

13.6

   No Sale by Principals    23

Article 14. Dispute Resolution

   23

14.1

   Consultation or Mediation    23

14.2

   Arbitration    23

14.3

   Litigation    23

14.4

   No Public Disclosure    24

Article 15. Notices

   24

Article 16. General

   24

16.1

   510(k) Filings    24

16.2

   Contingency Plans    24

16.3

   Assignment    25

16.4

   Independent Contractor    25

16.5

   Patent Markings    25

16.6

   Survival    25

16.7

   Waiver    25

16.8

   Interpretation    25

16.9

   Governing Law    25

16.10

   Severability    25

16.11

   Counterparts    25

16.12

   U.N. Convention on Contracts    26

16.13

   Governing Language    26

16.14

   Translations    26

16.15

   Entire Agreement    26

16.16

   Exhibits    26

 

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EXHIBITS

 

Exhibit A:    Customer List for Tiger Medical and the Principals    1 of 2
Exhibit B(1):    Calculation of Purchase Price    1 of 1 Exhibit B(2):    Volume
of Purchases    1 of 1 Exhibit C:    Services Level Agreement    1 of 6 Exhibit
D:    Purchase Order    1 of 1 Exhibit E:    Master Supply Agreement    1 of 9
Exhibit F:    Confidentiality Agreement    1 of 2

 

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***** Confidential Treatment Requested. Confidential portions of this document
have

been redacted and have been separately filed with the Commission.

 

SOURCING SERVICES AGREEMENT FOR

CHINA

 

Effective Date: January 19, 2005

 

THIS SOURCING SERVICES AGREEMENT (the “Agreement”) is made and entered into as
of the Effective Date by and between:

 

WORLD MED SHARED SERVICES, INC. (“PSSWM”), a Florida corporation located at 4345
Southpoint Blvd., Suite 300, Jacksonville, Florida 32216, USA, and a subsidiary
of PSS WORLD MEDICAL, INC., (“PSS”) and an affiliate of GULF SOUTH MEDICAL
SUPPLY, INC., (“GSMS”) and PHYSICIAN SALES AND SERVICE, INC., (hereinafter
collectively referred to as the “PSS Group”);

 

TIGER SPECIALTY SOURCING LIMITED (“Tiger SS”), a Hong Kong company to be
organized and existing under the laws of Hong Kong, SAR, People’s Republic of
China with a legal address located at 4Fl., Hong Kong Macau Building, 156-157
Connaught Road, Central, Hong Kong; and

 

TIGER SHANGHAI SPECIALTY SOURCING CO. LTD. (“TIGER WFOE”), a wholly owned
subsidiary to be organized and existing under the laws of People’s Republic of
China located at Liu Lin Tower, Suite 1910, 1 Huai Hai Zhong Road, Shanghai,
China 200021; and

 

MARK ENGEL, ELAINE FONG and Dr. GAO ZHAN, the principals of Tiger SS (the
“Principals”), and shareholders of Tiger Medical Products Ltd., a Hong Kong
company with a legal address located at 4Fl., Hong Kong Macau Building, 156-157
Connaught Road, Central, Hong Kong with a representative office in Shanghai
located at Liu Lin Tower, Suite 1909, 1 Huai Hai Zhong Road, Shanghai, China
200021 (“TIGER MEDICAL”); and

 

TIGER MEDICAL will be a party to this Agreement in all respects until Tiger SS
and TIGER WFOE are fully established and operational.

 

RECITALS

 

WHEREAS, PSSWM procures medical products and equipment for PSS Group which is in
the business of marketing and distributing medical products and equipment to
physicians, long-term care providers, home care providers, and other alternate
site healthcare providers for customers in all 50 states in the United States;
and

 

WHEREAS, PSSWM and the Principals of the Tiger SS wish to enter into a business
relationship wherein Tiger SS and TIGER WFOE exclusively furnish China sourcing
services to PSSWM; and

 

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WHEREAS, PSSWM wishes to purchase medical products and other goods related to
PSS Group’s business that are mutually selected by the parties (“Products”) from
Chinese suppliers and manufacturers (“Suppliers”) using the exclusive sourcing
services of Tiger SS and TIGER WFOE for China and to establish supply contracts
with Chinese Suppliers for the Products; and

 

WHEREAS, Tiger SS, TIGER WFOE and the Principals represent that they are
qualified and have the capacity to locate, select, and negotiate with Suppliers
based upon the needs and specifications of PSSWM and to recommend the Suppliers
offering the best price, quality and delivery of the Products to the PSSWM.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set
forth herein, Parties agree as follows:

 

Article 1. Definitions

 

1.1 “Agreement” has the meaning ascribed in the Preamble.

 

1.2 “COG” means the landed cost of goods, as defined in Section 4.8.

 

1.3 “COG Savings” means the net sum equivalent to the difference between the net
Product cost or Landed Cost of Goods for a Product as of the date when a Product
is agreed to be sourced from China compared to the new Landed Cost of Goods for
the Product from China, as defined in Section 4.8

 

1.4 “Effective Date” is the date set forth above.

 

1.5 “Final Buyout” has the meaning ascribed in Section 4.4.

 

1.6 “Final Buyout Price” has the meaning ascribed in Section 4.4.

 

1.7 “Initial Buyout” has the meaning ascribed in Section 4.2.

 

1.8 “Interim Buyout” has the meaning ascribed in Section 4.3.

 

1.9 “Interim Buyout Price” has the meaning ascribed in Section 4.3.

 

1.10 “Parties” shall mean PSSWM, Tiger SS, TIGER WFOE and the Principals
collectively.

 

1.11 “POs” have the meaning ascribed in Section 5.2.

 

1.12 “Principals” are the individuals identified in the Preamble.

 

1.13 “Products” have the meaning ascribed in the Recitals and Section 7.1.

 

1.14 “Profit” is set forth in Exhibit B(2).

 

1.15 “Proprietary Information” has the meaning given in Section 11.1.

 

1.16 “PSS Group” consists of the companies identified in the Preamble.

 

1.17 “PSS Ownership” is set forth in Exhibit B(1).

 

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1.18 “PSSWM” is the company identified in the Preamble.

 

1.19 “Purchase Price” is set forth in Exhibit B(1).

 

1.20 “Reduced Interim Buyout Price” is set forth in Exhibit B(1) and in Section
4.3.

 

1.21 “Suppliers” have the meaning ascribed in the Recitals.

 

1.22 “Supply Contracts” have the meaning ascribed in Sections 5.2 and 5.3.

 

1.23 “Targeted Sales (Landed Costs)” are set forth in Exhibit B(1).

 

1.24 “Term” is set forth in Section 2.3.

 

1.25 “Tiger Group” shall mean the Principals, Tiger Medical, and any company
owned in whole or in part or under the control of any one or more of the
Principals and any other owners, directors, officers, employees or agents of any
of the foregoing companies. When appropriate Tiger SS and TIGER WFOE will be
deemed a member of the Tiger Group prior to the Final Buyout

 

1.26 “Tiger Medical” is the company identified in the Preamble.

 

1.27 “Tiger SS” is the company identified in the Preamble.

 

1.28 “Total Purchase Price” has the meaning ascribed in Section 4.4.

 

1.29 “Trademarks” has the meaning ascribed in Section 12.1.

 

1.30 “TIGER WFOE” is the company identified in the Preamble, which will be
formed shortly prior to or shortly after the Initial Buyout. For purposes of the
documents and Exhibits hereto, a translation of the legal Chinese name is used
herein.

 

Article 2. Recitals, Acceptance of Terms and Term

 

2.1 Recitals. The recitals constitute a part of this Agreement.

 

2.2 Acceptance of Terms. The acceptance of these terms by PSSWM is subject to
board approval which may be withheld or conditioned at the Board’s sole
discretion (which PSSWM will seek to be obtained by January 15, 2005). .

 

After the execution of this Agreement, these terms may be added to, modified or
superseded only by written agreement or modification signed by all Parties.

 

2.3 Term. The term of this Agreement shall commence on the Effective Date when
executed by all Parties and continue until the closing date of the Final Buyout
pursuant to Section 4.4 or Section 4.5 (the “Term”).

 

Article 3. Exclusivity, Non-Competition and Transparency

 

3.1 Exclusivity to Tiger SS. PSSWM grants to Tiger SS and TIGER WFOE the
exclusive first right to source all Products from China (except as limited
below), including but not limited to, negotiating the terms of purchase and
arranging for the manufacture,

 

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***** Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

inspection, packaging, shipment, and delivery of all Products from China for
PSSWM, subject only to a transition period and any exceptions set forth in this
Agreement. PSSWM agrees to exclusively use Tiger SS and TIGER WFOE for its
sourcing activities from China and to use the sourcing services of other
companies in China only if Tiger SS and TIGER WFOE cannot meet all of the
conditions for exclusivity outlined below.

 

Tiger SS and TIGER WFOE’s exclusive right shall be limited to China and subject
to following conditions: (i) the quality of sourced Products must match or
exceed previous product quality; (ii) Tiger SS and TIGER WFOE must beat existing
US net product cost, as compared with the landed cost of goods as defined in
Section 4.8 for China sourced Products, by at least ***** or in the case of
vinyl gloves by at least *****, or in the case of U.S.-branded or
U.S.-manufactured Products by at least ***** and offer the best possible
pricing; (iii) Tiger SS and TIGER WFOE must assure sufficient Product quantities
and timely deliveries to meet PSSWM’s demands; and (iv) Tiger SS and TIGER
WFOE’s sourcing exclusivity for China does not result in a breach of any
existing supplier agreements of PSSWM.

 

The exclusivity to Tiger SS and TIGER WFOE in China covers third party sourcing
relationships in China and does not extend to US or other non-Chinese suppliers
that own 50% or more of Chinese manufacturing joint ventures and WFOEs or have
exclusive contract manufacturing relationships with Chinese factories.

 

After Tiger SS and TIGER WFOE have started to source a Product in China from a
single or multiple suppliers, PSSWM may only switch to a new vendor in China if:
(i) the quality of sourced Product deteriorates as determined by PSSWM in its
sole discretion and Tiger SS and TIGER WFOE do not correct such problems within
a reasonable period after written notice; (ii) existing or another supplier for
that Product beats existing net product cost by *****, or in the case of vinyl
gloves by *****, or in the case of U.S.-branded or U.S.-manufactured products by
*****, or offers greater cost savings; or (iii) Tiger SS and TIGER WFOE cannot
assure sufficient Product quantities and timely deliveries to meet PSSWM’s
demands.

 

3.2 Exclusivity to PSSWM. PSSWM shall be Tiger SS and TIGER WFOE’s exclusive
client. In the event that any company within the Tiger Group wishes to conduct
sourcing activities for any new or existing clients that potentially conflict
with either business, clients or Products of PSS Group, the Principals shall
first obtain the written consent of PSSWM.

 

PSSWM’s approval shall not be unreasonably withheld if: (i) there is no
reasonable competition with PSS Group’s business, clients or Products; and (ii)
the additional business does not significantly reduce the time and resources
devoted to the sourcing activities for PSSWM by Tiger SS, TIGER WFOE or its
Principals. In no event shall the employees of Tiger SS or TIGER WFOE devote
time and effort to sourcing activities that are not for PSSWM without the
explicit prior written approval of PSSWM in each instance.

 

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***** Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

A list of all existing companies for whom the Tiger Group and the Principals
conduct sourcing activities with brief descriptions of the products which are
sourced is attached hereto as Exhibit A.

 

3.3 Non-Competition. The Principals and all companies in or related to the Tiger
Group shall not, directly or indirectly, compete with the business, clients or
Products of the PSS Group and PSSWM. A company will be deemed to be related to
the Tiger Group (i) if the company is, directly or indirectly, in whole or in
part, owned by all or any one of the Principals, or has a business or
contractual relationship with a member of the Tiger Group; or (ii) if the
company is directly or indirectly, in whole or in part, owned by an owner,
director, officer, employee or agent of any member of the Tiger Group or a
family member of an owner, director, officer, employee or agent of any member of
the Tiger Group.

 

This non-compete obligation is effective for the Term of the Agreement and for
five (5) years after any expiration or termination of the Agreement. A separate
Non-competition Agreement with a five (5) year term will be signed by all the
members of the Tiger Group at the time of the Final Buyout and delivered to
PSSWM as a condition precedent to the Final Buyout.

 

3.4 Transparency. Tiger SS, TIGER WFOE and the Principals will allow total
transparency of its procurement process, costs and revenues, including identity
of Suppliers, any direct or indirect financial relationships with Suppliers,
purchasing or other local incentives provided by raw material suppliers,
factories, local governments, or any person or entity involved directly or
indirectly in PSSWM’s supply chain in China. Tiger SS and TIGER WFOE shall
facilitate direct contact between PSSWM and Suppliers in China.

 

Article 4. Board Seat, Buyouts

 

4.1 Board Seat. Tiger SS shall allow PSSWM to appoint two (2) directors (out of
a total of 5) to the Board of Directors of Tiger SS and TIGER WFOE concurrently
with the Initial Buyout. At all times until the Final Buyout, the maximum number
of directors on the Board of Directors of Tiger SS and TIGER WFOE shall be five
(5) directors. PSSWM shall have the right to review, approve and amend the
Articles of Association of Tiger SS and TIGER WFOE and all formation and
corporate governance documents, including any shareholders agreement, to ensure
that these documents are consistent with and permit the Parties to carry out the
terms and conditions of this Agreement. If no shareholders agreement exists
among the shareholders of Tiger SS, PSSWM may require one at any time that it
determines the need to have one.

 

4.2 Initial Buyout. PSSWM shall purchase shares equivalent to ***** ownership of
Tiger SS (the “Initial Buyout”). PSSWM will close on the Initial Buyout on the
closing date which is the later of January 17, 2005, or the date when all of the
following conditions precedents have occurred: (i) the approval by PSSWM of the
Articles of Association and other formation and corporate governance documents
of Tiger SS and TIGER WFOE; (ii) the initiation of the process for the issuance
of a business license by the appropriate Chinese government entity to operate
TIGER WFOE as a consulting and sourcing *****

 

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***** Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

company (with formal documentation issued either shortly before or shortly after
the Initial Buyout); and (iii) the issuance of China and Hong Kong tax opinions
from a big four accounting firm on the contemplated structure and transactions
flow between the Parties, in form and substance satisfactory to PSSWM in its
sole business judgment, which PSSWM will seek to obtain at its expense by
January 17, 2005.

 

The Initial Buyout purchase price shall be US$1 million which shall be paid to
the Principals in proportion to the number of shares being conveyed by each
Principal. The total number of shares being conveyed shall be equivalent to
***** ownership of Tiger SS.

 

4.3 Interim Buyouts. PSSWM has the right to buy additional shares of Tiger SS
from the Principals under terms and conditions set forth and attached hereto as
Exhibits B(1) and B(2) (the “Interim Buyouts”). The Parties contemplate Interim
Buyouts based on the financial performance of Tiger SS for the fiscal years
ending 2006, 2007 and 2008. PSSWM will pay to the Principals the purchase price
for the additional shares of Tiger SS as specified below (the “Interim Buyout
Price”):

 

(a) If the actual sales amount achieved by PSSWM for the relevant fiscal year is
met by greater than ***** of the projected targeted sales amount specified as
“Targeted Sales (Landed Costs)” in Exhibit B(1) for that year, the Interim
Buyout Price for that year set forth as “Purchase Price” in Exhibit B(1); or

 

(b) If the actual sales amount achieved by PSSWM for the relevant fiscal year is
between ***** and ***** of the projected targeted sales amount specified as
“Targeted Sales (Landed Costs)” in Exhibit B(1) for that fiscal year, ***** of
the Interim Buyout Price (the “Reduced Interim Buyout Price”) for that fiscal
year in Exhibit B(1).

 

Concurrently with a payment under (a) or (b) for any given year, PSSWM shall
receive the ownership percentage of Tiger SS specified as “PSS Ownership” in
Exhibit B(1).

 

4.4 Final Buyout. PSSWM shall have the right to buy all remaining shares of
Tiger SS based on the financial performance of Tiger SS for the fiscal year
ending 2009 (the “Final Buyout”), unless the Final Buyout has already taken
place as provided for in Section 4.5 below. The total purchase price for 100%
ownership of all the shares of the Tiger SS will range between ***** to *****
based on a calculation of COG Savings to PSSWM of between ***** to ***** for the
fiscal year ending 2009 (the “Total Purchase Price”). The COG Savings is
estimated and set forth as “Profit” in Exhibit B(2).

 

PSSWM shall calculate the COG Savings to determine the Total Purchase Price as
contemplated in Exhibit B(2).

 

The Total Purchase Price shall be determined in accordance with (a), (b), (c)
and (d) below.

 

(a) If at fiscal year-end 2009, PSSWM achieves COG Savings, specified as
“Profit” in Exhibit B(2), of *****, the Total Purchase Price shall be ***** as
specified in Exhibit B(2); or

 

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***** Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

(b) If at fiscal year-end 2009, PSSWM achieves COG Savings, specified as
“Profit” in Exhibit B(2), of ***** or more, the Total Purchase Price shall be
***** as specified in Exhibit B(2); or

 

(c) If at fiscal year-end 2009, PSSWM does achieve COG Savings of at least *****
and achieves more than ***** in actual sales but less than ***** in actual sales
for 2009, the Total Purchase Price shall be the amount specified in Exhibit B(2)
that corresponds most closely with the actual COG Savings achieved and the
actual sales achieved in 2009, namely, an amount between ***** and *****.

 

(d) If at fiscal year-end 2009, PSSWM does not achieve COG Savings of at least
***** but does achieve more than ***** in actual sales and less than ***** in
actual sales volume for that fiscal year, the Total Purchase Price shall be the
amount specified in Exhibit B(2) for the actual sales achieved in fiscal year
2009, namely, an amount between ***** and *****.

 

The “Final Buyout Price” shall be the Total Purchase Price specified in Exhibit
B(2) under (a), (b), (c) or (d) above minus all payments made to the Principals
for the Initial Buyout and all Interim Buyouts and adjustments in accordance
with Sections 4.6, 6.4 and 6.9.

 

4.5 Early Trigger of Final Buyout. If at any time during the Term of this
Agreement, PSSWM achieves COG Savings in any twelve (12) month period of *****
prior to reaching ***** in actual sales, then either Party has the option of
triggering an early Final Buyout. The Total Purchase Price for purposes of
calculating the Final Buyout Price shall be determined as set forth in Section
4.4.

 

4.6 Adjustments to the Final Buyout Price. To the extent that any loan remains
unpaid at the time of the Final Buyout, such loan amount and all interest paid
or payable, all liabilities, accounts payable, employee retention amount under
Section 6.4, holdback amount under Section 6.9 and the like, shall be deducted
from the Total Purchase Price. Similarly, upon Final Buyout, all receivables and
available cash shall be added to the Total Purchase Price. All appropriate
adjustments and actions will be made and taken to transfer the shares of Tiger
SS and all the assets of Tiger SS and TIGER WFOE totally debt-free and
unencumbered.

 

4.7 Closing Documents for the Final Buyout. The Principals, Tiger SS and TIGER
WFOE all covenant to prepare and execute all documents requested by PSSWM at the
time of the Final Buyout to ensure that PSSWM receives good and marketable title
to all shares of Tiger SS and to all the assets of Tiger SS and TIGER WFOE free
and clear of liens, encumbrances, liabilities and claims of any kind.

 

4.8 Landed Cost of Goods. The projected targeted sales amount and the actual
sales amount for each year shall be based on landed cost of goods. U.S. landed
costs shall include all costs associated with the Product, including the cost of
the good, insurance, freight, China customs duties and fees, China taxes on the
good, U.S. customs duties and fees, and U.S. taxes on the good, and any other
direct costs such as sterilization, plus a redistribution fee equal to ***** of
the product cost.

 

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***** Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

4.9 Payments of Interim and Final Buyout Price. The payments for the Interim
Buyout Price and the Final Buyout Price, subject to adjustments pursuant to
Sections 4.6, 6.4 and 6.9, will be made within 30 calendar days after: (i) the
Parties have calculated, verified and confirmed the actual sales and compared it
with the targeted sales amount for the relevant fiscal year; and (ii) Tiger SS
has submitted and PSSWM has approved the audited financial statements for Tiger
SS and TIGER WFOE for the relevant fiscal year which shall have been prepared
and delivered in a form satisfactory to PSSWM. Parties shall endeavor to
complete these tasks on or before sixty (60) days after the end of the fiscal
year, if possible, and in any event within ninety (90) days after the end of the
subsequent fiscal year (or in the case of an early trigger of Final Buyout under
Section 4.5, then within 60 days from the trigger date).

 

4.10 Minimum COG Savings and Actual Sales. If at fiscal year-end 2009, PSSWM
does not achieve COG Savings of at least ***** and actual sales of at least
*****, PSSWM shall have no obligation to purchase the remaining shares of Tiger
SS, and Tiger SS’s failure to achieve these financial benchmarks shall
constitute a default.

 

Article 5. Sourcing Services; Contracts with Supplier

 

5.1 Sourcing Services. Tiger SS and TIGER WFOE shall perform all the sourcing
services described in this Agreement, as further elaborated in the Services
Level Agreement attached hereto and incorporated herein as Exhibit C.

 

5.2 Contracts with Suppliers. The contracts with Suppliers for the purchase of
Products shall be entered into directly by and between PSSWM and each of the
Suppliers. Tiger SS and TIGER WFOE shall recommend Suppliers based on pricing,
quality and performance and submit to PSSWM: (i) draft Purchase Orders (the
“POs”) between PSSWM and each Supplier on PSSWM’s PO template, attached hereto
as Exhibit D; (ii) draft supply contracts between PSSWM and each Supplier on
PSSWM’s supply contract form (also known as Master Supply Agreement), attached
hereto as Exhibit E; (iii) draft quality assurance agreements between PSSWM and
each Supplier; (iv) draft product packaging specifications for each Product; (v)
draft product specifications for each Product; and (vi) draft such other
materials as PSSWM may from time to time may require to make product or sourcing
decisions.

 

5.3 Supply Contracts and POs. Once PSSWM has received and approved the above,
PSSWM shall execute a supply contract (also known as Master Supply Agreement)
with each Supplier (the “Supply Contract”), issue POs to that Supplier in
accordance with the Supply Contract with that Supplier. Tiger SS and TIGER WFOE
will enforce all the terms and conditions of the Supply Contract with each
Suppler and all POs issued pursuant to the Supply Contracts, including quality
inspections and timely deliveries to PSSWM by Suppliers.

 

The Supply Contracts shall contain an acknowledgement that PSSWM has contracted
with Tiger SS for Tiger SS and TIGER WFOE to identify, interview, select and
recommend Chinese suppliers, negotiate the terms and conditions of each and
every purchase and manage and coordinate all its purchasing activity in China
and that the Buyer will only purchase and pay for Product based on the terms and
conditions of purchase which have been negotiated by Tiger SS and TIGER WFOE for
and on behalf of PSSWM.

 

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***** Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

Article 6. Additional Rights and Obligations of Parties

 

6.1 Tiger SS Shareholders. The only shareholders in the Tiger SS shall be the
Principals and PSSWM.

 

6.2 No Transfer of Beneficial Interest. The Principals represent and warrant
that they are the sole shareholders of Tiger Medical. The Principals covenant
not to sell, convey, transfer or encumber their legal or beneficial interest in
Tiger SS to any entity or person except to PSSWM in accordance with this
Agreement.

 

6.3 Role of Mark Engel. Mark Engel covenants to serve as the senior executive of
Tiger SS and TIGER WFOE with responsibility for the general oversight and
management of PSSWM’s sourcing needs. The Principals covenant, in consultation
with PSSWM, to train successors who can manage and operate the business of the
Tiger SS and TIGER WFOE for PSSWM by the time of the Final Buyout.

 

6.4 Employee Retention Plan. The Principals covenant to implement and pay for an
employee retention plan to bind and motivate the employees of Tiger SS and TIGER
WFOE to remain employed with Tiger SS or TIGER WFOE for a minimum of two years
after the Final Buyout. For this purpose, the Principals shall reserve at a
minimum two years salary for the top five executives and additional employees
identified by PSSWM, inclusive of new employees that may be hired at the time of
the Final Buyout to replace the Principals, from the Total Purchase Price as
stay bonuses for the employees and hire bonuses for new recruits of the Tiger SS
and TIGER WFOE. At the closing of the Final Buyout, this cash reserve will be
placed into a separate bank account held by Tiger SS to be disbursed as agreed
with PSSWM and the employees over a three year period following the Final
Buyout.

 

6.5 Costs of Formation and Operation. The Principals shall be responsible for
adequately capitalizing and funding all costs and expenses of forming and
operating Tiger SS and TIGER WFOE and conducting the sourcing services, whether
performed by Tiger SS or TIGER WFOE, until Tiger SS and TIGER WFOE become cash
flow self sufficient and profitable.

 

6.6 Working Capital. The Principals acknowledge that (i) sourcing operation
conducted by Tiger SS and TIGER WFOE will require adequate capitalization and
additional working capital; and (ii) the fees earned by Tiger SS and the TIGER
WFOE may not be sufficient to provide the needed working capital. The Principals
of Tiger SS shall lend Tiger SS and TIGER WFOE up to a maximum ***** from
proceeds received from PSSWM to build capacity and capability to serve PSSWM’s
sourcing needs, generally in keeping with a mutually agreed business schedule.
The Principals have scheduled the first loan of ***** to Tiger SS and TIGER
WFOE, as the case may be, to occur within 5 working days of the Initial Buyout.
(replaces Jan. 20, 2005).

 

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***** Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

The adequate capitalization and working capital requirements shall be measured
against a five-year business plan for the operation of Tiger SS and TIGER WFOE
which will include pro forma P&L and cash flow projections prepared by the
Principals, as adjusted each year by mutual agreement of the Parties. To the
extent that Tiger SS’s and TIGER WFOE’s cash flows are not sufficient to carry
on the sourcing activities adequately, the Principals shall ensure that both
Tiger SS and TIGER WFOE are adequately funded at all times.

 

6.7 Distributions. After the fiscal year-end audited financial statements have
been approved by the Board of Directors of Tiger SS, TIGER WFOE and PSSWM, (i)
the profits of the TIGER WFOE, after Chinese taxes and sufficient reserves for
working capital shall be declared and distributed to Tiger SS on an annual
basis; and (ii) the profits of Tiger SS, after taxes if any shall be declared
and distributed in accordance with shareholder equity on an annual basis.

 

The Principals will receive their pro rata share of any after tax profits of
Tiger SS, if any, for the period of their ownership in the fiscal year in which
the Final Buyout occurs. This final distribution of after tax profits to the
Principals will occur after the fiscal year-end or any partial fiscal year
financial statements of Tiger SS and TIGER WFOE have been prepared, audited and
approved by the Board of Directors of Tiger SS, TIGER WFOE and PSSWM.

 

6.8 Operational Expenses. The Principals covenant to maintain the expenses of
operating Tiger SS and TIGER WFOE at reasonable levels as specified and approved
in the business plan. PSSWM shall have the right to object to any expenses that
it deems to be unreasonable and excessive in its reasonable discretion and may
deduct any portion of any expense that it deems unreasonable and excessive from
the proceeds of the Interim Buyout and Final Buyout Price.

 

6.9 Holdback. PSSWM shall hold back ***** of the proceeds of the Total Purchase
Price for 24 months from the date of the closing of the Final Buyout in an
interest bearing escrow account to be held jointly by PSSWM and the Principals.
At the end of the 24 months, the Principals will receive payment of the holdback
amount if (i) the actual sales during the first 12-month portion of the holdback
period is comparable (within *****) of the actual sales of the preceding
12-month period prior to the closing of the Final Buyout; (ii) at least ***** of
the key employees of the TIGER WFOE are still employed with the company at the
end of the 24-month holdback period (any employees that did not leave
voluntarily, or leave for medical reasons including pregnancy or death, will be
included in the headcount of retained employees); and (iii) there has been and
are no claims, losses, liabilities or receivable write-offs of any kind which
relate back to the time period prior to the closing date of the Final Buyout, or
to an indemnification adjustment as set forth in Section 6.10.

 

If (i) above is not achieved, the holdback amount shall be retained by PSSWM.

 

If (i) above is met but (ii) above is not met, PSSWM shall make a good faith
effort to determine a reasonable offset against the holdback amount and only the
remaining balance will be paid to the Principals.

 

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If (i) and (ii) above are achieved but there is a claim, loss, liability,
receivable write-off or adjustment under (iii) above, the amount of the claim,
loss, liability, receivable write-off or adjustment will be offset against the
holdback amount and only the remaining balance will be paid to the Principals.
If the amount of the claim, loss, liability, receivable write-off or adjustment
is not known or unresolved at the end of the holdback period, the entire
holdback amount will continue to be retained by PSSWM until the issue is finally
resolved and the amount can be quantified.

 

6.10 Indemnity. The Principals shall indemnify, defend and hold harmless PSSWM,
its shareholders, affiliates, subsidiaries, directors, officers, employees and
Tiger SS and TIGER WFOE from and against all claims, losses, or liabilities of
whatever kind arising directly or indirectly from (i) the inaccuracy or breach
of any representation or warranty of the Principals, Tiger SS or TIGER WFOE,
(ii) the breach of any covenant of the Principals or Tiger SS or TIGER WFOE, or
(iii) the management and operation of Tiger SS or TIGER WFOE which relate back
to the time period prior to the closing date of the Final Buyout. In the event
that an indemnity obligation arises during the holdback period, an
indemnification adjustment in an amount equal to the amount of the claim, loss
or liability shall be deducted from the holdback amount before the holdback
amount is released to the Principals. If the holdback amount is insufficient to
cover the full amount of the indemnity obligation, the Principals shall be
personally liable for any amounts in excess of the holdback amount.

 

Article 7. Products, Product Design, Product Development

 

7.1 Products. The Products to be sourced from China shall be agreed to by
Parties. Parties acknowledge that Tiger SS has received an initial target list
from PSSWM and that PSSWM has discussed certain profit expectations from the
anticipated cost savings derived from sourcing those Products on that list from
China. The prices applicable to the Products to be sourced from China shall be
mutually agreed to by Parties.

 

7.2 Product Quality. PSSWM has the right to validate and verify the quality of
Products or to request a third-party to evaluate the quality of Products. The
Parties acknowledge that price, product quality and timely deliveries are of
paramount importance to PSSWM and that PSSWM’s grant of exclusivity is
conditioned on significant cost savings, product quality equivalent to or better
than PSSWM’s current supply sources and timely deliveries. To the extent that
price, quality or timely delivery fails to meet PSSWM’s requirements, and Tiger
SS or TIGER WFOE fails to cure such failure within a reasonable period, such
failure shall constitute a default under this Agreement. The parties shall
mutually develop procedures and SOPs that clarify the responsibilities of each
party in reaching delivery timeliness.

 

7.3 New Product Design Ownership. New Products sourced from China could be based
on a Party’s product design and specifications, a Supplier’s product design and
specifications, or joint product design and specifications of a Party and a
Supplier. The product design and specifications and all intellectual property
related to these new Products shall be owned by PSSWM unless the new Product
results from Supplier’s sole effort or intellectual property. Tiger SS and Tiger
WFOE shall identify issues related to any IP ownership with the Suppliers
depending on the circumstances. Tiger SS and TIGER WFOE shall instruct Suppliers
(a) to supply and deliver to PSSWM design prototypes and samples of new Products
for PSSWM’s consideration, and (b) to cooperate in the new Product development
process if requested to do so by PSSWM.

 

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***** Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

7.4 New Product Development Assistance. Consistent with its rights under Section
7.3, PSSWM may at its sole discretion:

 

(a) Undertake or fund new product development by whatever means it chooses,
including paying or reimbursing Suppliers for designs, drawings, specifications,
samples and the like;

 

(b) Purchase of molds, tooling and equipment for new Products and providing the
same to Suppliers on terms and conditions to be agreed to with Suppliers; and

 

(c) Secure the exclusive rights to market and sell in the US market new Products
that have been developed and are owned, or may be developed and are owned, by
Chinese Suppliers.

 

All decisions on new product development and Supplier assistance with molds,
tooling or equipment shall be made by PSSWM on a case by case basis, with the
advice and consultation of Tiger SS and TIGER WFOE. Any and all information on
new product development by Suppliers shall be provided by Tiger SS and TIGER
WFOE to PSSWM.

 

7.5 Product Innovations. Innovations to existing Products, including those made
by Tiger SS or TIGER WFOE, and those made by Suppliers if financed by PSSWM,
shall be owned by PSSWM. Tiger SS and TIGER WFOE will make its best efforts to
develop Product innovations, at PSSWM’s request and on its own initiative,
particularly when a need arises to make modifications to the Product design or
specifications to prevent any possible infringement of a US patent, trademark or
copyright. Tiger SS and TIGER WFOE shall at all times, in conjunction with
PSSWM, conduct due diligence on each Product supplied to PSSWM to ensure that
the imported Product does not infringe any US patent, trademark or copyright.
Tiger SS, TIGER WFOE and the Principals shall not knowingly source Products that
infringe on any US patents, trademarks or copyrights.

 

7.6 Exclusive Right to Market and Sell. PSSWM shall have the sole and exclusive
right market, sell, brand and re-brand any new Products and Product innovations
to which it owns the intellectual property rights.

 

Article 8. Commissions, Payments and Taxes

 

8.1 Commissions. Tiger SS shall be paid by PSSWM a commission equivalent to
***** of the product cost. Tiger SS shall enter into a consultancy agreement
with TIGER WFOE to provide all the sourcing services described in this Agreement
under a cost plus arrangement. Tiger SS shall pay TIGER WFOE for all sourcing
services it is required to provide under the consultancy agreement and this
Agreement.

 

8.2 Product Cost. The product cost figure used for calculating the commission is
the product cost (FOB port of departure in China), exclusive of insurance,
freight, U.S. customs duties and fees, U.S. taxes on the goods, and other
similar costs and charges. The commissions shall be calculated on the product
cost of the Products that have been delivered to and accepted by PSSWM. The
product cost of any Products that do not

 

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***** Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

meet PSSWM’s quality specifications (except to the extent that such Products
were accepted with a discount in which case the commission is due on the
discounted value), or were damaged in transit (except to the extent that such
Products were covered by insurance to the extent of ***** or more of value) will
not be included in the product cost used to calculate the commission.

 

8.3 Product Cost Transparency. PSSWM will allow total transparency of its
procurement process, costs and revenues that effect the calculation of
commission.

 

8.4 Commission Payments. PSSWM shall wire transfer the commission payments to
Tiger SS to a bank account specified by Tiger SS on a monthly basis. The
commissions will be due and payable on each shipment when the invoice from the
Supplier for that shipment becomes due and payable and the terms of payment of
the commission shall be the same as those of the relevant Supplier.

 

8.5 Product Payments. All payments for the Products will be paid directly to the
Supplier by PSSWM.

 

8.6 Taxes. Tiger SS shall be responsible for and covenants to pay all Hong Kong
and China taxes on all commissions and other earnings. TIGER WFOE shall be
responsible for and covenants to pay all China taxes on its earnings, profits
and operations. Tiger SS shall be responsible for and covenants to pay all Hong
Kong taxes on its earnings, profits and operations and if applicable, China
taxes as well. The Principals are responsible for and covenants to pay all taxes
wherever owed on any payments it receives from PSSWM for the Buyouts and Tiger
SS and TIGER WFOE.

 

To the extent that any taxes are assessed on Tiger SS, TIGER WFOE or Principals
relative to the period before, or as a result of, the Final Buyout, the
Principals shall pay those taxes and if they remain unpaid, PSSWM may pay them
and seek reimbursement from the Principals. This obligation of the Principals to
be responsible for and to pay all taxes relative to the period of their
ownership and operation of Tiger SS and TIGER WFOE is an obligation that will
become extinguished only upon the expiration of the statute of limitation
applicable to the tax liability in question in the jurisdiction in which the tax
liability is assessed. Similarly, the right of PSSWM to seek reimbursement from
the Principals for any taxes it may have paid that relate to the period on or
before the Final Buyout shall expire only when the obligation of the Principals
expire as described above. Reimbursements for taxes may be deducted from the
Holdback amount set forth in Section 6.9.

 

Article 9. Authority, Representations and Warranties

 

9.1 No Authority to Contract. Tiger SS and TIGER WFOE shall have no authority to
contract with Suppliers for PSSWM. Tiger SS’s and TIGER WFOE’s business and
legal relationship with PSSWM is that of an independent contractor. Only PSSWM
shall have the right to contract to buy from Suppliers.

 

9.2 Signatories to the Supply Contract. Notwithstanding Section 9.1, the role of
Tiger SS shall be set forth as described in Section 5.3 and a signature block
for Tiger SS at the

 

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end of the Supply Contract will be included so that the Buyer and Seller in the
Supply Contract recognize the role to be performed by Tiger SS and so that Tiger
SS will have acknowledged and accepted its management and coordination role for
each Supply Contract.

 

9.3 Mutual Representations and Warranties. Each Party represents, warrants and
covenants to the other for the Term of the Agreement as follows:

 

(a) It has the full and unrestricted right, power and authority to enter into,
and to perform the terms, covenants and conditions of this Agreement, and to be
bound thereby during the entire Term of this Agreement and any extension
thereof; this Agreement constitutes its legal, valid and binding obligation,
enforceable against it in accordance with the provisions of the Agreement;

 

(b) There is no action, suit or proceeding by or before any court, arbitrator or
other government body pending or threatened against it which questions the
validity or legality of this Agreement or any act to be performed or taken by it
in connection with this Agreement;

 

(c) None of the representations or warranties made by it in this Agreement and
no other information provided by it to the other contains an untrue statement of
material fact, or omits to state a material fact necessary to make the
statements herein or therein not misleading; and

 

(d) No consent, approval or authorization of, or filing or registration with,
any third party or governmental body is required in connection with the
execution, delivery and performance by it of this Agreement.

 

9.4 Representations and Warranties of the Principals. The Principals represent,
warrant and covenant as follows:

 

(a) The Tiger Group has no ownership or financial interest in, nor any control
of, (i) any Suppliers or the factories manufacturing any Product, (ii) any
supplier or vendor of any components or raw materials utilized in any Product,
or (iii) any agent representing any of the parties reference in clauses (i) and
(ii) of this sentence. No member of the Tiger Group, for its own account or the
account of any of its agents or affiliates, sell raw materials or components to
the factories manufacturing any Products and none of these factories, or any
agents, have any ownership interest in, or any control over, any member of the
Tiger Group. Notwithstanding the foregoing, the Parties acknowledge that the
Principals and Tiger Medical have business relationships with certain raw
materials companies in China which are permitted exceptions to this Subsection
(a).

 

(b) To the best of the knowledge of the Principals, all members of the Tiger
Group are in compliance with all applicable laws, regulations and orders of
China, Hong Kong and United States.

 

(c) The Principals are and shall be at all times during their ownership and
operation of Tiger SS and TIGER WFOE be in compliance with the Foreign Corrupt
Practices Act of the United States (“FCPA”) and all other applicable US
anti-bribery laws. Additionally, the Principals shall institute a FCPA
compliance program for TIGER WFOE and cause all employees of TIGER WFOE to
adhere to the FCPA compliance program.

 

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***** Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

(d) *****, a former representative of Tiger Medical in the United States has no
title, right or interest of any kind, directly or indirectly, in Tiger SS and
TIGER WFOE.

 

Article 10. Audit Books and Records

 

10.1 Audit Books and Records. Tiger SS and TIGER WFOE shall maintain its books
and records in accordance with United States Generally Accepted Accounting
Principles. Tiger SS and TIGER WFOE shall audit its books and records once each
year and provide year-end audited financial statements to PSSWM by January 20th
of the subsequent year. The audits will be conducted by an accounting firm
mutually agreed by the Parties.

 

PSSWM shall have the right to audit the books and records of Tiger SS and TIGER
WFOE on a quarterly basis in accordance with United States Generally Accepted
Accounting Principles. Tiger SS and TIGER WFOE agree to cooperate fully with
PSSWM for each such audit and shall provide PSSWM with any and all documents or
records required by PSSWM, upon PSSWM’s request. To the extent PSSWM conducts
quarterly audits, PSSWM will pay for the first, second and third quarter audits
and Tiger SS and TIGER WFOE will pay for year-end audits.

 

Similarly, TIGER SS shall have the right, at its sole cost and expense, on a
quarterly basis to audit such books and records of PSSWM as are necessary to
verify actual COGs savings.

 

For purposes of US tax reporting, Tiger SS and TIGER WFOE shall cooperate with
PSSWM in all respects and provide all information and documentation requested by
PSSWM.

 

Article 11. Confidentiality, Non-compete

 

11.1 Proprietary Information. All tools, tooling, equipment, molds, materials,
samples, writings, design drawings, artwork, specifications, technical
knowledge, manufacturing knowledge and other tangibles, intellectual property
(inclusive of patents, trademarks, copyrights and trade secrets), all
information of any nature and in any form which is owned by the Parties and
their affiliates and which is not publicly available or generally known to
persons engaged in businesses similar to that of PSSWM and Tiger Medical during
the Term of this Agreement, including, but not limited to, research techniques;
patents and patent applications; inventions and improvements, whether patentable
or not; development projects; computer software and related documentation and
materials; designs, practices, equipment, processes, methods, know-how and other
facts relating to the business of the Parties; practices, processes, methods,
know-how and other facts related to supply, suppliers, vendors, supplier lists
or suppliers’ purchases of raw materials and components, sales, advertising,
promotions, financial matters, customers, target lists, customer lists or
customers’ purchases of goods or services; and all other secrets and information
of a confidential and proprietary nature, information about the business,
clients and Products of the Parties or other methods, processes, scheduling,
sources of supply, customers, marketing, financial information and the like
which the Parties disclose to each other and to Suppliers (the “Proprietary
Information”) shall

 

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remain the sole and exclusive property of PSSWM and possession of all such
Proprietary Information shall be turned over to PSSWM when the Final Buyout
occurs. No part of the Proprietary Information, inclusive of tooling, designs,
drawings, iterations, scrap production and samples, can be sold or distributed
to any entity or person.

 

11.2 Confidentiality of Proprietary Information. The Proprietary Information
shall be deemed to have been disclosed and exchanged as part of the
consideration under this Agreement and shall be held in strict confidence by the
Parties and their related entities and their owners, directors, officers,
employees and agents and shall not be used to benefit any Party except in
connection with this Agreement or any other person, entity or third-party. Each
Party shall be under a duty to prevent any disclosure or use inconsistent with
PSSWM’s rights in the Proprietary Information.

 

11.3 Non-compete from Suppliers. The Principals, Tiger SS and TIGER WFOE
covenant to monitor and ensure that Suppliers and their owners, directors,
officers and employees do not disclose or use the Proprietary Information except
in connection with the applicable Supply Contract with PSSWM.

 

11.4 Confidentiality Agreement from Target Suppliers. Tiger SS and TIGER WFOE
shall bind each target Supplier to the confidentiality of the Proprietary
Information by having each target Supplier sign a Confidentiality Agreement,
using the form attached as Exhibit F. This Confidentiality Agreement shall be
required of all target Suppliers, even when PSSWM and the target Supplier do not
come to an agreement and no Supply Contract is entered into with the target
Supplier.

 

11.5 Confidentiality of this Agreement. All financial terms and conditions of
this Agreement, except those that relate to Tiger SS and TIGER WFOE’s sourcing
activities for PSSWM, shall be held in strict confidence by the Principals and
all members of the Tiger Group at all times during the term of the Agreement and
for five (5) years thereafter. In no event shall the Principals or any member of
the Tiger Group publicize or disclose its contractual relationship with PSSWM
except to Suppliers and target Suppliers to perform its sourcing activities as
provided in the Master Supply Agreement.

 

Article 12. Trademarks

 

12.1 Trademarks. PSSWM, for itself and its customers, shall determine the
trademarks and style names (the “Trademarks”) to be used exclusively on or in
connection with the Products. Tiger SS, TIGER WFOE, the Principals and the
Suppliers are not granted any right to use any corporate names, trade names,
trademarks, trade dress, markings or other intellectual property of PSSWM or its
customers. The Principals covenant to ensure that all members of the Tiger Group
shall not, anywhere in the world, register, attempt to register or attempt to
obtain any interest in, any trademarks or intellectual property owned or
licensed by PSS Group, PSSWM and its customers, nor make any claims inconsistent
with the rights of PSS Group, PSSWM and its customers.

 

12.2 Trademark Cooperation. At the request of PSSWM, Tiger SS, TIGER WFOE and
the Principals shall perform whatever acts PSSWM reasonably deems necessary or
desirable to preserve and protect, and to vest in PSSWM or its designee the
right, title and interest to any Proprietary Information, trademarks or other
intellectual property. PSSWM will reimburse Tiger SS, TIGER WFOE and the
Principals for all pre-approved expenses related to such performance.

 

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***** Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

Article 13. Default, Termination, Remedies

 

13.1 Default. Any one of the following shall constitute an event of default:

 

(a) A Party defaults in the performance of any covenant, warranty,
representation or other obligation under this Agreement and the default is not
cured after 30 days’ written notice to the defaulting Party by the
non-defaulting Party; or

 

(b) A Party is subject to any administrative or governmental action which
suspends or terminates its business; or

 

(c) A Party makes a general assignment for the benefit of creditors, suspends
business or commits any act amounting to business failure, or makes a voluntary
assignment or transfer of all or substantially all of its property; or

 

(d) A voluntary petition in bankruptcy is filed by the Party, or any involuntary
petition to obtain an order for relief against the Party is filed under the
bankruptcy laws applicable to the Party; or

 

(e) Failure by Tiger SS and TIGER WFOE to achieve the financial performance
benchmarks set forth in Section 4.10 for the Final Buyout and less than ***** of
the targeted sales amount specified in Exhibit B(1) for the Interim Buyouts; or

 

(f) Failure by PSSWM or any successor in interest to continue this Agreement
when Tiger SS and TIGER WFOE are not in default and the actual sales amount for
the previous fiscal year and the current fiscal year are met by at least *****
of the projected targeted sales amount specified in Exhibit B(1).

 

13.2 Default Remedy for PSSWM. In the event of a material default by the
Principals, Tiger SS or TIGER WFOE (“TIGER Default”), PSSWM shall have the right
and remedy:

 

(a) to terminate the Agreement and compel the Principals to elect one of TIGER
Default options set forth in Section 13.4 below; or

 

c) to pursue any and all of its legal and equitable remedies.

 

13.3 Default Remedy for Tiger SS. In the event of a material default by PSSWM,
Tiger SS shall have the right and remedy:

 

(a) to terminate the Agreement and to compel PSSWM to sell the shares of Tiger
SS owned by PSSWM in accordance with Section 13.5 below; or

 

(b) to pursue any and all of its legal and equitable remedies.

 

13.4 TIGER SS Default Options. If the PSSWM opts to terminate this Agreement
upon TIGER Default, the Principals shall have the option to repurchase all of
PSSWM’s shares of Tiger SS for the sum of the payments made by PSSWM to
Principals for the Initial Buyout and the Interim Buyouts, net of the taxes paid
by the Principals on such

 

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Buyouts. If the Principals do not within thirty (30) days after written notice
of Tiger SS’ default elect to exercise its default repurchase option, PSSWM will
have the option to purchase all of the remaining shares of TIGER SS for a
nominal purchase price to be determined solely by PSSWM in its absolute
discretion.

 

13.5 PSSWM’s Default Option. If the Tiger SS opts to terminate this Agreement
upon material default by PSSWM, the Principals shall have the right to compel
the PSSWM to sell all of PSSWM’s shares of Tiger SS at the lesser of: (a) the
sum of the amounts paid by PSSWM to Principals for the Initial Buyout and the
Interim Buyouts, net of taxes paid by the Principals on such Buyouts; or (b) the
fair market value of the shares based on a valuation of Tiger SS as an ongoing
operating company with earnings and profits extrapolated to a full year of
financial performance based on the last six full months of operation of Tiger SS
and Tiger WFOE prior to the issuance of a notice of a default or an occurrence
of an event of default.

 

13.6 No Sale by Principals. In any situation where the Principals end up with
all the shares of Tiger SS, whether due to a TIGER Default or a PSSWM default,
the Principals covenant for 24 months from the date of their acquisition of all
the shares of Tiger SS not to sell all or a controlling interest in Tiger SS, or
all or controlling equity interest in TIGER WFOE, without duly disclosing such
sale to PSSWM and paying to PSSWM a prorata portion of the proceeds from the
sale based on the maximum ownership percentage owned by PSSWM prior to the
acquisition of all the shares of Tiger SS by the Principals.

 

Article 14. Dispute Resolution

 

14.1 Consultation or Mediation. In the event any dispute arises out of or in
relation to this Agreement, Parties shall attempt in the first instance to
resolve such dispute through friendly consultations or mediation. If the dispute
is not resolved in this manner within sixty (60) days after the date on which
one Party has served written notice on the other Party for the commencement of
consultations or mediation, then either Party may refer the dispute to
arbitration in accordance with the provisions of Section 14.2. The fees and
costs of a mediator shall be split between Parties.

 

14.2 Arbitration. Either Party may submit the dispute for arbitration which
shall be conducted in Jacksonville, Florida, and administered by the American
Arbitration Association in accordance with its International Arbitration Rules
with instructions that: (i) all proceedings in any arbitration shall be
conducted in the English language and (ii) there shall be one (1) arbitrator
jointly selected by Parties or absent agreement, selected by the American
Arbitration Association from a list of six candidates with each Party proposing
three of those candidates. The arbitration award shall be final and binding on
Parties, and Parties agree to be bound by the arbitral award and to act
accordingly. The fees and costs of the arbitrator shall be split between Parties
and the arbitrator may award reasonable attorneys fees and costs to the
prevailing Party.

 

14.3 Litigation. Parties have selected binding arbitration as the sole means to
resolve a dispute between them over monetary claims that cannot be resolved
through consultation or mediation. Concurrently with or without an arbitration,
either Party may pursue through litigation at any time: (a) claims for
injunctive or other non-monetary relief; (b) claims that also involve
third-parties who have not consented to arbitration; and (c) claims in
litigation commenced by third-parties. The prevailing Party shall be entitled to
reasonable attorneys fees and costs.

 

- 23 -

--------------------------------------------------------------------------------

14.4 No Public Disclosure. The existence and resolution of the arbitration
proceedings shall be kept confidential by Parties and by the arbitrator, except
as required by law, regulation or a court of competent jurisdiction. All
disputes between Parties concerning the representations, warranties, covenants
and agreements contained in this Agreement shall be exclusively and finally
resolved in accordance with the provisions of this Article 14.

 

Article 15. Notices

 

Any notice under this Agreement shall be in writing, shall be effective upon
receipt and shall be transmitted by personal delivery, U.S. mail, or national or
international air courier services (Federal Express, UPS, DHL and the like),
facsimile transmission if receipt is confirmed, or by email upon confirmation of
both delivery and opening and with a hard copy sent by U.S. Mail, and addressed
as follows:

 

If to PSSWM:   If to Tiger SS and TIGER WFOE:

Attn: Mr. Kevin English

PSS Worldwide Medical

4345 Southpoint Blvd.

Jacksonville, FL 32216

USA

Phone: 904.332.3364

Facsimile: 904.332.3214

Email: kenglish@pssd.com

 

With a copy to:

 

Attn: Ms. Grace Parke Fremlin

Foley & Lardner, LLP

3000 K Street, NW, Suite 500.

Washington, DC 20007-5101

USA

Phone: 202.672.5598

Facsimile: 202.672.5399

Email: gfremlin@foley.com

 

Attn: Mark Engel

Company: Tiger WFOE

Street: Liu Lin Tower, Suite 1910, 1 Huai

Hai Zhong Road

City State Zip: Shanghai, 200021

Country: China

Phone: 86.21.6386.6300

Facsimile: 86.21.5383.5200

Email: markcengel@yahoo.com

 

With a copy to:

 

Attn: Mr. Edward E. Lehman

Lehman Lee & Xu

Dongwai Diplomatic Office Building 6th Fl.

23 Dongzhimenwai Dajie Beijing 100600

China

Phone: 86.10.8532.1919

Facsimile: 86.10.8532.1999

Email: elehman@lehmanlaw.com

 

Article 16. General

 

16.1 510(k) Filings. Parties acknowledge that (i) certain products will require
510 (k) filings with the US FDA before importation of these products into the
United States; (ii) the completion of these filings could take six months or
more; and consequently, the parties will work diligently to make these filings.
PSSWM will take primary responsibility for making the filings with the full
cooperation and assistance of Tiger SS and WFOE.

 

16.2 Contingency Plans. The parties shall on their own initiatives furnish to
the other (a) any information concerning matters the presence or absence of
which could result in delays or non-performance, and (b) assurance or
contingency plans, in such form as may be satisfactory to the other party, with
respect to those matters and covenants to diligently implement such plans.

 

- 24 -

--------------------------------------------------------------------------------

16.3 Assignment. Assignments, subcontracts and transfers, in whole or in part,
of this Agreement by the Principals, Tiger SS or TIGER WFOE are prohibited.
Assignments of this Agreement by PSSWM to a company owned, controlled by or
affiliated with PSS Group, or PSSWM are permitted in PSSWM’s sole discretion.

 

16.4 Independent Contractor. The Principals, Tiger SS and TIGER WFOE are
independent contractors, not agents, licensees, distributors or employees of
PSSWM, and are not authorized to assume or create any obligation on behalf of or
in the name of the PSS Group or PSSWM.

 

16.5 Patent Markings. Each Product manufactured pursuant to this Agreement in
accordance with any patent rights and licensed rights shall bear appropriate
patent markings, either by fixing thereon the word “patent” or the abbreviation
“pat.”, together with the number of patent, in accordance with Title 35 United
States Code Section 287.

 

16.6 Survival. Unless otherwise agreed in writing, the obligations, liabilities,
warranties, representations, covenants, rights and remedies of each of the
Parties accrued, made or incurred prior to or at the time of any termination or
expiration of this Agreement, including Articles 6 and 11, shall survive such
termination or expiration for three (3) years.

 

16.7 Waiver. The failure of either Party at any time or times to demand strict
performance by the other of any of the terms, covenants or conditions, or any
right or remedy shall not be construed as a continuing waiver or relinquishment
of that provision, and each may at any time demand strict and complete
performance by the other of all terms, covenants, conditions, and any right or
remedy.

 

16.8 Interpretation. Headings are solely for the purpose of aiding in speedy
location of subject matter and have no meaning under this Agreement. When used
in this Agreement, “including” means “including without limitation” and terms
defined in the singular include the plural and vice versa. The Agreement
consists of negotiated documents and each Party has cooperated in the drafting
of the Agreement and its exhibits. If any construction is to be made of any
provision, it shall not be construed against either Party on grounds that such
Party was the drafter of the document or any particular provision.

 

16.9 Governing Law. This Agreement shall be governed by the laws of the State of
Florida and the United States without reference to principles of conflicts of
law.

 

16.10 Severability. If any provision becomes invalid or unenforceable under any
law, Parties intend that such provision will be deemed severed and omitted from
this Agreement and the remaining portions shall remain in full force and effect
as written.

 

16.11 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be a duplicate original, but all of which,
taken together, constitute a single document.

 

- 25 -

--------------------------------------------------------------------------------

16.12 U.N. Convention on Contracts. The United Nations Convention on Contracts
for the International Sale of Goods will not apply to this Agreement.

 

16.13 Governing Language. Parties agree that all notices, consents, approvals,
records and other communications required or permitted to be held or delivered
under this Agreement and all disputes to be resolved in connection with this
Agreement shall be held, delivered and resolved in the English language.

 

16.14 Translations. This Agreement is executed in English. Any translation of
this Agreement into Mandarin Chinese or any other language shall be for
reference and informational purposes only and shall not be legally binding.

 

16.15 Entire Agreement. This Agreement constitute the entire agreement between
Parties, with respect to its subject matter and supersedes all prior oral and
written agreements, understandings, negotiations, promises, representations of
any kind and there are no conditions to this Agreement which are not expressed
therein. All modifications of this Agreement must be made in accordance with
Section 2.2.

 

16.16 Exhibits. Exhibit A shall be updated by the Principals as necessary during
the term of this Agreement. Exhibit C may be modified and updated by mutual
agreement of PSSWM and Tiger SS. Exhibits D, E, and F may be modified and
updated as necessary at the sole discretion of PSSWM at any time during the term
of this Agreement.

 

- 26 -

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the Effective Date by their undersigned, duly authorized representatives.

 

 

PSS WORLD MED SHARED SERVICES, INC.    TIGER SPECIALTY SOURCING LTD. By:  

/s/ Kevin P. English

--------------------------------------------------------------------------------

   By:  

/s/ Mark Engel

--------------------------------------------------------------------------------

Name:   Kevin P. English    Name:   Mark Engel Title:   Senior Vice President of
Finance    Title:   President and CEO PRINCIPALS:    TIGER SHANGHAI SPECIALTY
SOURCING CO. LTD.:

/s/ Mark Engel

--------------------------------------------------------------------------------

   By:  

/s/ Mark Engel

--------------------------------------------------------------------------------

Mark Engel    Name:   Mark Engel

 

/s/ Elaine Fong

--------------------------------------------------------------------------------

   Title:   Chief Representative Elaine Fong         

/s/ Gao Zhan

--------------------------------------------------------------------------------

   TIGER MEDICAL PRODUCTS LTD.: Dr. Gao Zhan               By:  

/s/ Mark Engel

--------------------------------------------------------------------------------

         Name:   Mark Engel          Title:   Chairman

 

- 27 -

--------------------------------------------------------------------------------

Exhibit A of 10.35

 

*****Confidential portions of this document have been redacted and have been

separately filed with the Commission.

 

Companies for whom the Tiger Group and the Principals conduct sourcing
activities

 

The following is a list of companies that the Principals own, along with a list
of their customers and products and services being provided. In the event that
any company listed below, or any new company the Tiger Group or the Principals
own or are affiliated with, conducts sourcing activities, the principals shall
first obtain the written consent of PSSWM.:

 

I. Tiger Medical Products: Tiger supplies disposable and medical products to
Asian and US markets. Ownership: Gao Zhan *****; Mark Engel *****; Elaine Fong
*****. The following is a complete list of existing clients and the status
thereof.

 

*****: Provide ***** with a variety of enema products. We have also committed to
work with them on several consumer products including: feminine wipes, spray
products, and similar products expanding or outsourcing existing lines. Going
forward, we will not accept additional products without PSSWM’s consent. PSSWM
recognizes that Tiger Medical and its Principals have an existing obligation to
service this client.

 

*****: Sourcing a specialty vaginal collector and related products. We will seek
approval for all other products. PSSWM recognizes that Tiger Medical and its
Principals have an existing obligation to service this client

 

*****: Sourcing a specialty vaginal collector and related products (same product
as ***** but for different international markets). Ownership: *****, but
diminishing as additional investors are brought into company. We will seek
approval for all other products. PSSWM recognizes that Tiger Medical and its
Principals have an existing obligation to service this client

 

*****: Various customized lab products. We will seek PSSWM’s approval for all
other products.

 

*****: We have an obligation to complete orders in one product if required
*****. We will seek PSSWM’s approval for all other products.

 

*****: We have from time to time sold to these companies a variety of Chinese
made disposable products. We will not sell any further products without PSSWM’s
approval.

 

*****: Tiger is awaiting final approval of a 510(k) for ***** (we are still
waiting for a few final test results on which FDA has conditioned approval). We
have spent considerably on obtaining this 510(k) and would like to recover costs
on this product. However, no commitments have been made to any potential
customers except to ***** (which provided us with certain support in obtaining
the 510(k) and for which on a hand shake we promised sale at a certain price).
Once approved, no additional customers will be obtained without the approval of
PSSWM.

--------------------------------------------------------------------------------

*****Confidential portions of this document have been redacted and have been

separately filed with the Commission.

 

II. *****: This company is in the business of developing with US inventors novel
new products in the device and pharmaceutical field. Ownership: *****. Products
will be licensed to third party major distributors once prototypes and proof of
concept is developed. Products currently under development now include: *****.
Any expansion of business activities related to sourcing medical supplies that
require the time and attention of the Principals will require the approval of
PSSWM.

 

III. *****: This company trades in publishing and various consumer products. Key
US buyers include ***** (books and associated consumer products) and *****
(plastic hangers). Ownership: *****. Total 2004 revenue is under *****. Any
expansion of business activities related to sourcing medical supplies that
require the time and attention of the Principals will require the approval of
PSSWM.

 

IV. *****: This company provides some regulatory and clinical trial services to
possible multinational suppliers of raw materials to factories of some products
for PSSWM. Ownership: *****. Any expansion of business activities related to
sourcing medical supplies that require the time and attention of the Principals
will require the approval of PSSWM.

 

V. *****: This company provides some marketing services to possible vendors of
raw materials to factories that might produce some products for PSSWM.
Ownership: *****. Any expansion of business activities that potentially might
have any conflict with the PSSWM will require the approval of PSSWM.

 

- 2 -

--------------------------------------------------------------------------------

Exhibit B of 10.35

 

*****Confidential portions of this document have been redacted and have been

separately filed with the Commission.

 

CALCULATION OF INTERIM BUYOUT PRICE

OF TIGER SS STOCK

 

Fiscal

Year

--------------------------------------------------------------------------------

  

Targeted

Sales

(Landed

Costs)

--------------------------------------------------------------------------------

 

Interim

Buyout

Price

--------------------------------------------------------------------------------

 

Reduced Interim

Buyout

Price

--------------------------------------------------------------------------------

 

Percentage

PSSWM

Ownership

--------------------------------------------------------------------------------

 

Cumulative

PSSWM

Ownership

Percentage

--------------------------------------------------------------------------------

2005

   *****   USD 1 million   *****   *****   *****

2006

   *****   *****   *****   *****   *****

2007

   *****   *****   *****   *****   *****

2008

   *****   *****   *****   *****   *****

2009

   *****   See Exhibit B(2)   See Exhibit B(2)   *****   *****

 

Payment Matrix (Fiscal Year 2009) See Exhibit B(2)

 

Notes:

 

1. Sales for New Programs:. From time to time, there may be a new initiative or
non-routine, non-repetitive and unusually large purchase by PSSWM that should be
excluded from the Targeted Sales amount. These types of new initiatives or
non-routine and non-repetitive purchases are not intended to be included in the
Targeted Sales amount for purposes of calculating the Interim Buyout Price or
the Final Buyout Price. The parties agree to subsequently negotiate how to split
the benefits from such purchases.

 

- 3 -

--------------------------------------------------------------------------------

*****Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

Exhibit B(2)

 

Volume of Purchases

 

Profit

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

*****

 

Note: The Total Purchase Price reflected in the table above will be netted
against any amounts previously paid to Tiger Principals in consideration for
shares and all adjustments described in the Sourcing Services Agreement.

 

- 4 -

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Exhibit C of 10.35

 

 

SERVICES LEVEL AGREEMENT

 

Date:                     

 

THIS SERVICES LEVEL AGREEMENT (the “SLA”), is an exhibit to the SOURCING
SERVICES AGREEMENT of the same date.

 

Article 1. Sourcing Services; Contracts with Suppliers

 

1.1 Outline of Sourcing Services. For purposes of this SLA, all references to
TIGER SS shall collectively refer to TIGER SS and TIGER WFOE. For and on behalf
of PSSWM, TIGER SS shall:

 

(a) Identify, interview, select and recommend factories suitable for the
manufacture of Product after conducting reasonable financial and business due
diligence on each Supplier, factory, owners, directors and officers (all due
diligence results shall be provided to PSSWM in writing);

 

(b) After careful review of PSSWM’s Order Request, draft Product specifications
and Product packaging specifications for each Product; draft other materials as
PSSWM may require to make Product or sourcing decisions. PSSWM’s approval of all
drafts of Product specifications and other materials drafted for PSSWM shall be
obtained;

 

(c) Solicit bids and negotiate the most favorable terms and best prices for the
Product; and whenever possible, deal directly with the factories and avoid going
through agents;

 

(d) Solicitation for bids and negotiations shall take place after: (i) Supplier
due diligence has been completed, resulting in a favorable assessment on
Supplier; and (ii) a confidentiality agreement, using the form confidentiality
agreement set forth in Exhibit F, has been signed by the target Supplier;

 

(e) For each Supplier with whom PSSWM has agreed to source, prepare a Supply
Contract (or alternatively called a Master Supply Agreement), using the form set
forth in Exhibit E, for PSSWM to review, approve and execute;

 

(f) Draft Purchase Order, using the form set forth in Exhibit D, for PSSWM to
review, approve and issue; Draft Purchase Order to include all details of the
order such as design and product specifications, sizes, quantities, prices,
packaging instructions, labeling requirements, branding, shipping dates,
delivery dates and country of destination, payment terms and other terms of
purchase specified by PSSWM

 

(g) .Arrange for the manufacture, inspection, packing and shipment of Product;

 

(h) Monitor, ensure and enforce compliance and performance of each Supplier and
timely deliveries with each PO and all the terms and conditions of the Supply
Contract;

 

(i) Monitor, ensure and enforce quality assurance with each Supplier and draft a
Quality Assurance instructions and agreements for PSSWM to review, approve and
execute if it is deemed to be necessary;

 

- 5 -

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(k) Obtain documentation necessary for the exportation of the Product in China
and importation of Product to the United States or other country, clearly
specifying the country of origin and destination;

 

(l) Provide PSSWM with the relevant Supplier’s original invoices for Products,
it being understood that TIGER SS will never act as a seller of any Product to
PSSWM;

 

(m) Maintain complete and accurate records of all Products ordered, in progress,
finished and in transit for the account of PSSWM and, at the request of PSSWM,
provide PSSWM with access to and copies of the records;

 

(n) Reserve and maintain PSSWM’s right to collect and retrieve for PSSWM all
tooling, designs, specifications, drawings, renderings, artwork, models,
iterations, scrap production, samples and other items of Proprietary Information
at the end of a production cycle or the Supply Contract.

 

1.2 Contracts with Suppliers. TIGER SS must ensure that each Supplier and PSSWM
have agreed and signed a Supply Contract, using the Master Supply Agreement set
forth in Exhibit E, before preparing any draft POs to be issued by PSSWM with
that Supplier. The contract terms with the Suppliers shall consist of the Master
Supply Agreement, POs, Supplier acknowledgements and a Quality Assurance
Agreement if any. TIGER SS may provide Chinese translations of documents to the
Suppliers with a clear understanding and agreement by the Supplier that the
Chinese translation is for convenience only and is not legally binding on PSSWM.

 

Article 2. Supply Chain Requirements

 

2.1 PO and Acknowledgement. PSSWM will issue and submit fax or electronic
purchase orders to Supplier and TIGER SS. Supplier will provide electronic order
acknowledgement via EDI or TIGER SS’s vendor web portal within five (5) business
days from the receipt of the PO. PO will include (i) verification at the item
level of shipment date, ship-from location, and shipment mode, (ii) order
number, (iii) price, (iv) backorders and expected backorder release dates and
acknowledgement will confirm the same. In the event that such order
acknowledgment is not possible as above then the parties will determine another
acceptable method.

 

2.2 Fill Rates. TIGER SS will monitor and ensure that each Supplier provides an
average first-pass line fill rate of at least ninety five percent (95%),
measured monthly. Fill rates are calculated at the purchase order line level as
quantity received on the first pass (initial receipt) divided by quantity
ordered. Each purchase order line first pass fill rate is weighted equally in
the calculation of an average first pass fill rate for all purchase order lines
received during the month.

 

2.3 Production Closures. TIGER SS shall provide PSSWM with annual calendars
indicating Chinese holidays and other closures of shipping and customer service
operations, and will provide at least thirty (30) days advance notice, in
writing, of any changes to this calendar.

 

2.4

Packaging List. TIGER SS shall monitor and ensure that each Supplier provides a
packaging list with PSSWM’s purchase order number, PSSWM’s item number, quantity
shipped, and date shipped with each shipment. If applicable, the packaging list
should

 

- 6 -

--------------------------------------------------------------------------------

 

also provide serial number, lot or batch number, NDC or UPC number, and
expiration date. Except for combined contain loads, there should be no more than
one PSSWM purchase order number per Supplier packaging list, and all packaging
lists should be printed in PSSWM part number sequence indicating split shipments
and backorders, as applicable.

 

2.5 Packing and Labeling. TIGER SS shall monitor and ensure that each Supplier
(i) preserves, packages, handles, and packs Products so as to protect the
Products from loss or damage, in conformance with good commercial practice,
government regulations, and other applicable requirements; (ii) marks the
exterior of the boxes with the associated PSSWM item number and serial number,
lot or batch number, NDC or UPC number as applicable, of the contents; (iii)
provides this information on the exterior of the boxes in bar-code format; (iv)
ships Products as specified by PSSWM; and (v) is responsible for any loss or
damage due to its failure to properly preserve, package, handle or pack
Products.

 

2.6 No Excess Charges. TIGER SS shall monitor and ensure that each Supplier does
not apply any miscellaneous, transportation, handling, HAZMAT, accessorial,
minimum order or pallet charges, surcharges or fees to any PSSWM purchase orders
or deliveries unless specifically approved by PSSWM in the PO acknowledgement.

 

Article 3. Forecasts, Production Schedules, and Quantity Variations

 

3.1 Forecasts. PSSWM shall provide to TIGER SS a forecast of the requests for
proposal to source Products that PSSWM expects to order from Suppliers during
each six-month periods. The forecasts and updates furnished to TIGER SS shall be
entirely non-binding and for planning purposes only.

 

3.2 Production Schedule. At PSSWM’s request, TIGER SS shall use best efforts to
arrange for the Suppliers to agree to schedule share and allow PSSWM to
determine Suppliers’ production schedule and to share materials, capacity or
other information necessary to meet PSSWM’s production needs.

 

3.3 Quantity Variations. If the quantity delivered varies from the quantity
specified in a PO, then TIGER SS shall arrange for Supplier to ship additional
Products at the earliest possible moment and by the fastest practicable and
available means, but without any increase in costs to PSSWM if the quantity
delivered varies from the quantity supplied. In the case of excess Products
above approved PO variations, PSSWM may treat the excess amount as a separate
purchase order and agree on a payment date to be communicated to Supplier or
reject the excess amount and return it to Supplier at Supplier’s cost.

 

3.4 Shipping Container Capacity Constraints. If quantity variations are a
function of shipping container capacity constraints, TIGER SS shall so inform
PSSWM promptly prior to shipment. In each PO, PSSWM shall indicate which SKU(s)
shall absorb any quantity variance(s).

 

Article 4. Shipping

 

4.1

Drop Shipment. At PSSWM’s request, TIGER SS shall arrange to have either the
Supplier or UPS (or such other shipping company as designated by PSSWM) drop
ship

 

- 7 -

--------------------------------------------------------------------------------

 

any order for Products directly to a location designated by PSSWM. Upon
delivery, the bill of lading shall be presented to PSSWM or its
designee/consignee for signature. The bill of lading shall be in such form, and
shall contain such information, as shall be approved by PSSWM. Promptly
following delivery of each drop shipment, TIGER SS shall or arrange Supplier or
UPS (or such other shipping company as designated by PSSWM) to send a copy of
the signed bill of lading bearing the designee/consignee’s signature to PSSWM.

 

4.2 Costs of Non-conformity. TIGER SS shall ensure that additional expenses,
charges or claims incurred as a result of Supplier’s failure to make delivery in
conformity with the agreed time, quality, quantity or deviation from the
specified route, other shipping instructions or improper description of the
shipment in shipping documents shall be Supplier’s responsibility and if any of
these additional costs are incurred by PSSWM, TIGER SS shall ensure that PSSWM
has the right to offset these costs against any amounts owed to Supplier.

 

Article 5. Quality, Non-Conforming Products

 

5.1 Quality. TIGER SS shall inspect for quality, condition and specifications of
the Products at Supplier’s factory and reject non-conforming Products. PSSWM and
its designee shall have the same inspection rights upon receipt of the Products
at the final destination. Adherence to quality, condition and specifications
will be determined on many factors. Specifications adherence includes all
accepted design drawings, renderings, artwork, specifications, models, samples,
written procedures, or other guidelines for the Products, all as furnished,
replaced, substituted, updated or amended by PSSWM or TIGER SS, as applicable.

 

5.2 Non-Conforming Products. For non-conforming Products, consult with PSSWM and
instruct Supplier as to the means and methods of cure and cover. PSSWM shall
have no obligation to pay for non-conforming Products or for transportation
costs of and may cancel all unshipped POs for the same Products unless TIGER SS
reassures PSSWM that Supplier has taken immediate corrective measures to cure
the quality or specifications variations.

 

5.3 Destruction of Non-Conforming Products. All non-conforming Products shall be
destroyed by PSSWM if discovered after receipt of the shipment, with independent
third party verification, or by TIGER SS or Supplier if the non-conformance is
discovered before shipment. If the destruction is being conducted by Supplier,
TIGER SS shall arrange with Supplier to witness and verify the destruction of
the non-conforming Products and ensure that all labels, trademarks and markings
identifying or belonging to PSSWM or its customers are destroyed.

 

5.4 Random Quality Testing. TIGER SS shall (i) reserve the right with each
Supplier to select Product randomly during production or after arrival at
destination for quality inspections by PSSWM, TIGER SS or third-party testing
and to conduct random inspections during the production process to assure that
the quality and workmanship of the Product in process strictly complies with the
relevant approved samples and design and manufacturing specifications; (ii)
promptly advise PSSWM in writing of any problems affecting the completion of POs
for Product in accordance with the specified quality and delivery terms; and
(iii) certify to PSSWM in writing (in the form of a signed certificate of
inspection) that each order meets all quality specifications for that particular
Product in accordance with the all quality specifications and sales samples.

 

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Article 6. Quality Assurance

 

6.1 US FDA Compliance. If required, TIGER SS shall cause Supplier to maintain
appropriate certification status and compliance with the US Food and Drug
Administration’s (FDA) Quality System Regulation, the Medical Device Directive
and all other applicable regulations.

 

6.2 Chinese SFDA or Other Legal Compliance. If applicable, TIGER SS shall cause
Supplier to comply with all applicable Chinese laws, regulations, orders and
standards that pertain to the Products or to the manufacturers of the Products.

 

6.3 US Compliance by PSSWM. Upon request, TIGER SS shall cause Supplier to
furnish to PSSWM information required to enable PSSWM to comply with all
applicable US law, regulations, orders and standards that pertain to the
Products in the United States and to distributors for the Products.

 

Article 7. Modification of Products

 

7.1 Right to Alter Packaging. TIGER SS shall reserve to PSSWM the right to add
notations or markings to the Product packaging after receipt of the Products.

 

7.2 Changes to Products and Packaging. TIGER SS shall cause Supplier to consult
with PSSWM on new Products and design changes or modifications to Products and
the packaging.

 

7.3 Notice of Discontinuance of Products. TIGER SS shall provide or cause
Supplier to provide PSSWM with written notice of all Product discontinuance no
less than sixty (60) days prior to the last order date.

 

Article 8. Customs

 

8.1 Product Registration. Upon mutual agreement, PSSWM may provide and the TIGER
SS may be requested to assist with Product registration and localization
assistance. In the case of documentation localization, all master documentation
will be maintained and controlled, for the purpose of quality system compliance,
by Supplier.

 

8.2 Country of Origin Certification. Upon PSS’s request, TIGER SS shall cause
Supplier to provide an appropriate certification stating the country of origin
for Products, sufficient to satisfy the requirements of (i) the customs
authorities of the country of ultimate destination; (ii) any applicable export
licensing regulations, if any, including those of the United States; and (iii)
requirements for duty drawback, if any.

 

8.3 Country of Origin Markings. TIGER SS shall cause Supplier to mark every
Product (or the Product’s container if there is not room on the Product itself)
with the country of origin. Supplier shall, mark the Products as directed by
PSSWM so as to comply with the requirements of the customs authorities of the
country of ultimate destination.

 

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8.4 Export/Import Agent. If the Products are being delivered FOB, FCA, FAS, CRF,
CIF, CPT, CIP, DAF, DES, DEQ, DDU, as defined in Incoterms 2000, and the
Supplier in question has no foreign trade right and has not named and
import/export company to perform its obligations, TIGER SS shall act as the
export agent, if TIGER SS is a properly licensed export/import company in China.

 

8.5 Export/Import Responsibility. If the Products are being delivered FOB, FCA,
FAS, CRF, CIF, CPT, CIP, DAF, DES, DEQ, DDU, as defined in Incoterms 2000, TIGER
SS or Supplier, as the case may be, shall be the exporter of record and shall
comply with all customs matters at origin. PSSWM or its designee shall be the
importer of record and shall comply with all customs matters at destination.

 

8.6 Documents for Customs Purposes. TIGER SS or Supplier, as the case may be,
shall provide PSSWM or its designee with documentation deemed necessary by PSSWM
or its designee to satisfy the requirements for customs benefits, US federal or
state laws on domestic/foreign content, including country of origin information.

 

Article 9. COMPLAINTS, QUALITY RECORDS AND RECALLS

 

9.1 Complaints. TIGER SS will notify, in writing, Supplier’s quality assurance
department of all Product complaints or any conformance issues that may affect
the marketability of Products. TIGER SS shall conduct or cause Supplier to
conduct safety investigations or other necessary follow-up activities. TIGER SS
will provide information essential to such activities. TIGER SS or Supplier will
promptly notify PSSWM when the corrective action has been completed.

 

9.2 Product Recall. If a recall of a Product occurs due to Supplier’s failure to
supply Products that (i) conform in all material respects to the applicable
published specifications; or (ii) are free from defects in material and
workmanship (when given normal, proper and intended usage), TIGER SS shall cause
Supplier to repair or replace at its own costs and expense all Products subject
to the recall and previously delivered to PSSWM or its customers.

 

9.3 Recall Process. TIGER SS will arrange with Supplier to consult with PSSWM to
establish a reasonable process for managing the recall and Supplier shall be
responsible for all reasonable out-of-pocket expenditures incurred by PSSWM
(inclusive of shipping costs, labor and travel costs) that are consistent with
the recall process agreed to by the Parties. In the event the recall is not
required by a governmental agency for safety or efficacy reasons, but is instead
requested by Supplier at its sole discretion, Supplier will be responsible for
determining the scope of the recall, including the number of units, timeframe
for the recall, and criteria for completion, at no cost or expense to PSS.

 

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Exhibit D of 10.35

 

Buyer:

World Med Shared Services, Inc.

4345 Southpoint Boulevard

Jacksonville, Florida 32216 USA

 

Phone:                         Fax:

 

PURCHASE

ORDER

 

 

 

Page 1 of 1

 

The following number must appear on all related

correspondence, shipping papers, and invoices:

  P.O. NUMBER:                      To Seller:   Ship To: Phone:
                        Fax:    

 

P.O. DATE

--------------------------------------------------------------------------------

 

SHIPPED VIA/SHIP BY (DATE)

--------------------------------------------------------------------------------

 

F.O.B. POINT

--------------------------------------------------------------------------------

   BUYER’S FREIGHT FORWARDER

--------------------------------------------------------------------------------

 

Item Number

--------------------------------------------------------------------------------

  

Description

--------------------------------------------------------------------------------

   Quantity

--------------------------------------------------------------------------------

   UNIT PRICE

--------------------------------------------------------------------------------

   TOTAL

--------------------------------------------------------------------------------

                                                                                
                             PAYMENT TERMS: Net 45 days after shipment and
receipt of invoice and shipping
documents; Payment by wire transfer into Seller’s bank account in China.
COMMENTS:                                    
                                                                               
OTHER         TOTAL     

 

Documents to be presented by Seller:

 

Packing List   Mill Certificate   Quality Certificate issued by Local Testing
Authorities Insurance Policy   VAT Invoice   Carrier’s Cargo Bill   Other
                                    

 

All commercial invoices and packing slips must contain but are not limited to
the following information:

 

Invoice: Seller, Buyer, Consignee (if different from Buyer), purchase order
number, item number, item description, quantity shipped, cost per piece,
extended cost, Country of Origin.

 

Packing Slip must include everything that is on the invoice plus: total number
of cartons, number of cartons per item, gross weight, net weight, shipment
dimensions, shipping company, mode of transportation, shipment date.

 

Seller shall notify Buyer and its Designee of the shipment date on such date and
advise Buyer of complete shipping and routing information. Seller must provide
original shipment documents to Buyer and its Designee no later than seven (7)
days after vessel sail date. On air shipments, documents must be sent no later
than two (2) days after ship date.

 

1.      Please send two copies of your invoice.

2.      Enter this order in accordance with the prices, terms, delivery method
listed above.

3.      Please notify us immediately if you are unable to ship as specified as
to delivery date, price, quantity, quality or terms.

4.      Please send all correspondence to the authorized representative of Buyer
at the above address and its Designee.

   This purchase order is entered into pursuant to, and shall be governed by the
terms and conditions set forth in the Master Supply Agreement by and between
Buyer and Seller (“Agreement”). The terms & conditions of the Agreement are part
of this purchase order.     

--------------------------------------------------------------------------------

                 Authorized Representative of Buyer                        Date

 

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Exhibit E

 

*****Confidential portions of this document have been redacted and have been

separately filed with the Commission.

 

MASTER SUPPLY AGREEMENT

 

EFFECTIVE DATE:                     

 

This Master Supply Agreement (the “Agreement”) is made as of the Effective Date
by and between World Med Shared Services, Inc., doing business as PSS World
Medical Shared Services, Inc., and Gulf South Medical Shared Services, Inc., a
Florida corporation located at 4345 Southpoint Boulevard, Jacksonville, Florida
32216 USA (hereinafter referred to as “BUYER”), and
                                        
                                        
                                        
                                                 , a Chinese company located at
                                        
                                        
                                        
                                                         , China (hereinafter
referred to as “SELLER”).

 

BUYER has contracted with Tiger Specialty Sourcing, Limited, a Hong Kong company
which has formed and organized a wholly foreign owned enterprise, Shanghai Hu
Wei Medical Products Company Ltd., in Shanghai located at Suite 1910, 1 Huai Hai
Zhong Road, Shanghai 200021 CHINA (hereinafter collectively referred to as
“TIGER” or “Designee”), to identify, interview, select and recommend Chinese
suppliers, negotiate the terms and conditions of each and every purchase and
manage and coordinate its purchasing activity under this Agreement. BUYER will
purchase and pay for the goods based on the terms and conditions of sale
resulting from TIGER’s discussions with SELLER. Once an order is placed, TIGER
shall manage and coordinate the purchase for and on behalf of BUYER.

 

WITNESSETH

 

WHEREAS, BUYER is in the business of buying medical products and equipment for
distribution and sale in the United States;

 

WHEREAS, SELLER is in the business of selling
                                                              and similar items
(the “Products”); and

 

WHEREAS, BUYER wishes to purchase the Products from SELLER, as further
delineated in attached Exhibit A, Product Specifications;

 

Now, therefore, in consideration of the mutual covenants of the parties and for
good and valuable consideration, the legal sufficiency of which is hereby
acknowledged, the parties agree as follows:

 

ARTICLE 1. Products; Purchase Orders

 

1.1 Products. SELLER agrees to produce and sell Products in accordance to
specifications and samples provided by BUYER. SELLER must disclose any changes
to the approved specifications, prior to making those changes, and obtain the
written approval of BUYER.

 

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1.2 Purchase Order. Each contract for the supply of Products shall be entered
into under this Agreement by BUYER’s issuance to SELLER of a signed purchase
order (a “PO”) and SELLER’s acceptance of that PO. The PO shall be substantially
in the form attached hereto as Exhibit B. All POs must be signed by an
authorized representative of BUYER and any unsigned orders cannot be accepted by
the SELLER to establish a contract. Each PO may be transmitted to SELLER by
hand, mail, air courier, facsimile or electronic transmission in PDF format.
This Agreement will not accompany each PO but will apply to all POs between the
parties.

 

1.3 Revised POs. When a PO is revised by BUYER, only the latest revised PO shall
be the applicable order that is valid and enforceable. If a revised PO is not
objected to in writing by the SELLER, it shall be deemed to have been accepted.

 

1.4 Acceptance of PO. A PO issued by BUYER will be deemed to have been accepted
by the SELLER upon the first to occur of the following: (i) written acceptance
by the SELLER, (ii) SELLER’s first shipment or other tender of performance under
the PO, or (iii) SELLER’s failure to deliver written objection to BUYER’s PO or
revisions to a PO within five (5) business days of the SELLER’s receipt of the
initial PO or revised PO (or such other period as may be specified in the PO).

 

1.5 Terms of Acceptance. Acceptance of a PO issued by BUYER is expressly limited
to its terms and the terms of this Agreement. Any modification or change in the
terms of either any PO or this Agreement shall only be binding if accepted by
the BUYER in writing by BUYER’S authorized representative. BUYER’S AUTHORIZED
REPRESENTATIVE IS THE PERSON WHO IS A SIGNATORY TO THIS AGREEMENT FOR PURPOSES
OF THIS AGREEMENT AND FOR PO ISSUANCES AND REVISIONS.

 

1.6 Sourcing Service Representative. For purposes of coordinating and managing
the orders and ensuring SELLER’s performance of this Agreement and the POs,
BUYER has appointed and designated TIGER to serve as its sourcing service
representative. Please direct all questions and concerns related to the Products
and the POs to TIGER.

 

To leave no doubt and to avoid confusion, the SELLER may deem a varying term not
contained in this Agreement or the PO to be accepted by BUYER only if the
BUYER’s authorized representative agrees in writing to the varying term. BUYER’s
authorized representative is not a representative of Tiger or Designee.

 

1.7 Separate Contracts. Each PO accepted by SELLER shall incorporate all the
terms of this Agreement and will be a separate contract.

 

ARTICLE 2. Price, Price Terms

 

2.1 Price. The unit price of each Product is set forth in the Product
Description and Pricing, Exhibit C to this Agreement. The unit prices are be
effective and fixed for one year from the date of the first PO for all orders
unless otherwise mutually agreed by the parties.

 

2.2 Price Terms. All prices shall be: (i) in USD as stated in Exhibit C; (ii)
inclusive of all costs and expenses of whatever kind or nature, unless modified
in the PO; and (iii) in accordance with the terms specified in the PO.

 

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*****Confidential portions of this document have been redacted and have been

separately filed with the Commission.

 

2.3 Price Changes. SELLER agrees for ***** from the date of the first PO *****
(see Exhibit A). Thereafter, SELLER agrees *****. If either (a) the price of raw
materials for the Products increases or decreases by more than *****, or (b) the
exchange rate between the US dollar and the RMB changes by more than *****, then
the parties agree to *****.

 

2.4 Changes in Costs for Raw Materials. The changes in the costs of raw
materials could be measured by comparing documentary evidence of the decrease or
increase in the raw material costs of the first and last POs from the preceding
twelve-month period for an adjustment in the price for the next twelve-month
period. Documentation could include either (a) in the case of the Supplier, a
comparison of the costs using invoices and evidence of payments for the raw
materials used to fill the first and last POs during the first year of the
Agreement, and (b) in the case of the Buyer, a comparison of the cost data for
the raw materials published by a neutral third party organization applicable on
the dates of the first and last POs during the first year. This process could be
repeated for any subsequent twelve-month period by either party if the need to
do so for a price increase or decrease arises.

 

2.5 Index for Foreign Exchange Rate Changes. The changes in the foreign exchange
rate between the US dollar and the RMB shall be measured by comparing the
exchange rate published by the Wall Street Journal on the dates of the first and
last POs during the first year of the Agreement and by repeating the process of
comparing the exchange rates on the dates of the first and last POs of the
second year and each subsequent years thereafter if the term of the Agreement is
extended if the need to do so for a price increase or decrease arises.

 

2.6 Lowest Price Offer. SELLER agrees to not sell the Products to other buyers
that will be reselling the Products in the United States for less than it sells
to BUYER. If SELLER does offer a lower price to another buyer, that lower price
shall be offered to BUYER;.

 

ARTICLE 3. Payment; Taxes

 

3.1 Payment. Payment will be made 45 days after shipment and after receipt of
SELLER’s invoice and shipping documents. Payment will be by wire transfer into
SELLER’s designated bank account in China. Payments for Products will not be
construed as acceptance by BUYER of any non-conforming Products.

 

3.2 Taxes. Each party will be responsible for its own taxes on the purchase and
sale of Products. Upon request, the parties will cooperate in obtaining and
furnishing to each other certificates or other evidences of payment,
inapplicability of or exemption from any sales, excise or other taxes or duties
to which either party may request.

 

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ARTICLE 4. Quality; Non-Conforming Products

 

4.1 Defective Products. SELLER shall bear all costs, direct and indirect, for
defective Products or disposal fee of defective batch. If defects are found in
the factory, all costs will be borne by SELLER, but if the Products have been
shipped to the US, all defective Products found on the US side will have a
third-party independent testing company’s report covering the defective items,
defective quantity, nature of the defect and the like and the price of the
defective batch will be deducted from any payment owed to SELLER by BUYER.

 

4.2 Quality. BUYER or its Designee may inspect for quality, condition and
specifications of the Products at the SELLER’s factory and at the final
destination and reject any non-conforming Products. Adherence to quality,
condition and specifications will be determined based on many factors.
Specifications adherence includes all accepted design drawings, renderings,
artwork, specifications, models, samples, written procedures, or other
guidelines for the Products, all as furnished, replaced, substituted, updated,
or amended by BUYER.

 

4.3 Non-Conforming Products. Upon BUYER’s or its Designee’s determination that
any of the Products are non-conforming, BUYER or its Designee may instruct
SELLER as to the means and methods of cure and cover. BUYER shall have no
obligation to pay for non-conforming Products and may cancel all unshipped
orders for the same Products unless the SELLER takes immediate corrective
measures to cure the quality or specifications variations. All non-conforming
Products may be destroyed by BUYER if discovered after receipt of the shipment
or by SELLER or BUYER’s Designee if the non-conformance is discovered before
shipment. If the destruction is being conducted by the SELLER, BUYER or its
Designee shall have the right to witness and verify the destruction of the
non-conforming Products.

 

4.4 Random Quality Testing. BUYER reserves the right to select Products randomly
from production for evaluation by a third-party or BUYER’s or Designee’s own
laboratory testing. A copy of the lab-test report will be provided to SELLER if
the Products are deemed to be non-conforming as a result of such test and shall
be deemed to be conclusive.

 

4.5 Production Changes. Without the prior written approval from BUYER which may
be withheld or conditioned in the BUYER’s sole discretion, SELLER shall not
subcontract nor change processes, cycle times, raw materials used or
specifications.

 

4.6 SA8000. SELLER shall substantially comply with SA8000 regulations and
requirements on worker safety, worker environment and ethical treatment of
workers. A copy SA8000 will be furnished to SELLER upon request.

 

ARTICLE 5. SELLER’s Representations and Warranties

 

5.1 SELLER’s Representations. SELLER represents, warrants and covenants that:

 

  (a) It has all required permits, licenses and insurance to produce and sell
all the Products to be bought by the BUYER;

 

  (b) All materials used in the production of the Products shall be of the
highest international industry standards and quality;

 

- 15 -

--------------------------------------------------------------------------------

  (c) It has the capacity to produce and will produce BUYER’S annualized
projections in a timely manner; and

 

  (d) It has the authority to enter into this Agreement and perform its terms.

 

  (e) It has the applicable ISO certification on the Effective Date. Or, if
Supplier does not have the ISO certification, it shall covenant to apply
diligently for the ISO certification. The Supplier acknowledges that
continuation of this Agreement may depend on the attainment of the ISO
certification.

 

5.2 Product Warranties. SELLER represents, warrants and covenants that the
Products:

 

  (a) To the best of SELLER’s knowledge, do not violate the intellectual
property or other proprietary rights of any third parties and SELLER shall be
liable if they do so;

 

  (b) Conform to all quality standards and accepted design drawings,
specifications, models, samples, written procedures, or other guidelines for the
Products, all as furnished, replaced, substituted, updated or amended;

 

  (c) Are free of all defects in materials, workmanship, manufacture, packaging,
labeling, shipping, handling or processing;

 

  (d) are merchantable, fit and sufficient in all respects for their intended
purposes which purposes the SELLER understands and accepts;

 

  (e) Are free and clear of all liens, encumbrances and claims of whatever
nature that relate to the SELLER, or SELLER’s business or activities and the
SELLER has good and merchantable title;

 

  (f) Are manufactured without use of child or forced labor and in a safe and
healthy work environment for the employees;

 

  (g) Comply with all applicable Chinese laws, regulations, orders or standards,
including any applicable agency or association standards (“Regulations”) and has
received or will receive all required Chinese governmental approvals for the
manufacture, packaging, labeling, shipping, handling, processing, sale, use,
licensing, or certification of the Products. SELLER will furnish buyer with
copies or other satisfactory evidence of all such governmental approvals; and

 

  (h) Comply with all applicable US laws and regulations that the SELLER should
have known or were made known to SELLER by the BUYER or its Designee.

 

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*****Confidential portions of this document have been redacted and have been

separately filed with the Commission.

 

ARTICLE 6. Delivery

 

6.1 Delivery. SELLER shall generally ship Products within 45 days after receipt
and acceptance of the PO from BUYER unless otherwise specified in the PO. Delays
in shipment will incur a reduction of ***** of total shipment value for each day
the ordered Products are not shipped as specified in the PO.

 

6.2 Returns. SELLER acknowledges that BUYER may return, within 30 days of
receipt, any Products for full credit if:

 

  (a) Shipped in error by SELLER; or

 

  (b) Received in damaged condition before or after title passes to BUYER if the
damage is due to negligent packing of the Product by the SELLER.

 

6.3 Shipping Documents. SELLER shall furnish one set of original documents,
inclusive of Invoice, Packing List, Forwarder’s Cargo Receipt, Certificate of
Origin to a shipping agent designated by BUYER or its Designee and another set
of original documents to TIGER.

 

ARTICLE 7. Insurance; Indemnity

 

7.1 Liability Insurance. SELLER agrees to provide the BUYER and BUYER’S Designee
a copy of all insurance policies it carries for or relating to product
liability. BUYER may request that SELLER add BUYER as an additional insured on
its insurance policies or to obtain adequate insurance coverage as a condition
of purchase if BUYER or BUYER’s Designee deems the insurance coverage to be
inadequate in its sole opinion.

 

7.2 Indemnity. SELLER shall defend, indemnify and hold BUYER and Designee and
each of their respective directors, officers, employees free and harmless from
and against any loss, cost, liability, claims, demands or lawsuits, including
reasonable attorneys’ fees, arising from or relating to (i) the manufacture or
use of any Products, (ii) the breach by SELLER of any warranty, representation
or covenant contained in this Agreement or any PO, or (iii) any products
liability.

 

7.3 Notice of Claim. In the event of any claim or threatened claim which may be
the subject of indemnification, BUYER will give SELLER prompt written
notification of the claim.

 

7.4 Offset Right. If the SELLER does not timely discharge its indemnity
responsibilities, any amounts, whether due or to become due, to SELLER shall be
subject to offset by BUYER to the full extent of all costs, damages, liabilities
and expenses against any outstanding payments to SELLER.

 

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ARTICLE 8. Proprietary Information; Confidentiality; Non-Compete

 

8.1 Proprietary Information. All tools, tooling, equipment, molds, materials,
samples, writings, design drawings, artwork, specifications, technical
knowledge, manufacturing knowledge and other tangibles, intellectual property
(inclusive of patents, trademarks, copyrights and trade secrets), information
about BUYER’s products, production or other methods, processes, scheduling,
sources of supply, customers, marketing, financial information and the like
BUYER or its Designee presents or introduces to SELLER (“Proprietary
Information”) shall remain the sole and exclusive property of BUYER.

 

8.2 Confidentiality. The Proprietary Information shall be deemed to have been
disclosed as part of the consideration under this Agreement and shall held in
strict confidence by the SELLER and its owners, directors, officers and
employees and shall not be used to benefit SELLER (except in connection with
this Agreement) or any other person or third party. SELLER shall prevent any
disclosure or use inconsistent with BUYER’s rights in the Proprietary
Information.

 

8.3 Non-compete. Except in connection with this Agreement, SELLER agrees not use
in any manner, directly or indirectly any Proprietary Information of the BUYER
and to ensure that its owners, directors, officers and employees, as well as
affiliates, subsidiaries, agents, contractors, suppliers and customers and their
owners, directors, officers and employees (“Seller-Related Parties”) do not use
such Proprietary Information. In particular, SELLER and Seller-Related Parties
shall not use Proprietary Information to solicit BUYER’s customers for the
purchase and sale of Products.

 

8.4 Survival. SELLER explicitly agrees that the terms and conditions of this
Article 8 shall survive expiration or termination of this Agreement for three
(3) years.

 

ARTICLE 9. Customs

 

9.1 Delivery Terms. The Products shall be delivered in accordance with the
shipment terms specified in the PO, such as FOB (Free on Board at named port of
shipment), CIF (Cost, Insurance and Freight at named port of destination), CIP
(Carriage and Insurance Paid to named place of destination), DDU (Delivered Duty
Unpaid to named place of destination). The shipment terms shall be defined as
provided in the International Chamber of Commerce Official Rules for the
Interpretation of Trade Terms, commonly known as Incoterms 2000.

 

9.2 Export/Import Agent. If SELLER has no foreign trade right, SELLER shall
enter into a domestic purchase and sale contract with a licensed export/import
company designated by SELLER for the Products to be exported which designated
export/import company must be approved by the BUYER.

 

9.3 Export/Import Responsibility. Generally under most delivery terms, SELLER,
or the export/import company, if any, shall be the exporter of record and shall
comply with all customs matters at origin. BUYER shall be the importer of record
and shall comply with all customs matters at destination.

 

9.4 Documents for Customs Purposes. SELLER, together with the export/import
company, if any, shall provide BUYER or its Designee with any documentation
deemed necessary by BUYER or its Designee to satisfy the requirements of any
customs benefits, federal or state laws on domestic/foreign content, including
country of origin information.

 

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ARTICLE 10. Term, Cancellation, Default and Remedies

 

10.1 Term. The term of this Agreement shall commence on the Effective Date upon
execution of this Agreement by both parties and continue for two years. The
parties may extend the term of the Agreement for additional one-year terms by
agreeing to do so in writing.

 

10.2 Cancellation of POs for Breach. BUYER may cancel any PO, in whole or in
part, if SELLER defaults under this Agreement or any PO. Upon such cancellation,
BUYER shall have no further liability or responsibility with respect to such PO
(or the cancelled portion of the PO), as the case may be.

 

10.3 Termination Agreement for Breach. The non-defaulting party may terminate
this Agreement if:

 

The other party defaults in the performance of any covenant, warranty,
representation or other obligation under this Agreement and the default is not
cured after 30 days’ written notice to the defaulting party by the
non-defaulting party;

 

The other party is subject to any administrative or governmental action which
suspends or terminates its business or that portion of its business that relates
to any outstanding POs;

 

The other party makes a general assignment for the benefit of creditors,
suspends business or commits any act amounting to business failure, or makes a
voluntary assignment or transfer of all or substantially all of its property; or

 

A voluntary petition in bankruptcy is filed by the other party, or any
involuntary petition to obtain an order for relief against the other party is
filed under the bankruptcy laws applicable to the other party.

 

10.4 Voluntary Termination. For any reason or no reason BUYER may cancel this
Agreement or any PO not yet shipped (in whole or in part) by giving thirty (30)
days written notice of cancellation of the Agreement or PO to the SELLER. If
BUYER elects to cancel this Agreement or a PO, BUYER agrees to pay: (1) for any
Products that have at such time been shipped by SELLER pursuant to a PO; (2) any
packaging that has been customized for BUYER and purchased by SELLER
specifically for BUYER pursuant to a written request by BUYER or BUYER’s
Designee; or (3) any Products that BUYER or BUYER’s Designee has asked SELLER in
writing to keep on hand as “emergency stock”.

 

10.5 Remedies. In the event of any default or breach by either party of its
obligations under this Agreement or any PO, the other party may pursue any and
all legal and equitable remedies to which it may be entitled under this
Agreement and under applicable law.

 

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ARTICLE 11. Dispute Resolution

 

11.1 Consultations or Mediation. In the event any dispute arises out of or in
relation to this Agreement, the parties shall attempt in the first instance to
resolve such dispute through friendly consultations or mediation. If the dispute
is not resolved in this manner within sixty (60) days after the date on which
one party has served written notice on the other party for the commencement of
consultations or mediation, then either party may refer the dispute to
arbitration in accordance with the provisions of Sections 11.2. The fees and
costs of a mediator shall be split between the parties.

 

11.2 Arbitration. Either party may submit the dispute for arbitration by the
American Arbitration Association in accordance with its International
Arbitration Rules with instructions that: (i) all proceedings in any arbitration
shall be conducted in the English language and (ii) there shall be one (1)
arbitrator jointly selected by the parties or absent agreement, selected by the
American Arbitration Association from a list of six candidates with each party
proposing three of those candidates. The arbitration award shall be final and
binding on the parties, and the parties agree to be bound by the arbitral award
and to act accordingly. The fees and costs of the arbitrator shall be split
between the parties and the arbitrator may award reasonable attorneys fees and
costs to the prevailing party. The arbitration shall be held in Jacksonville,
Florida.

 

11.3 Litigation. The parties have selected binding arbitration as the sole means
to resolve a dispute between them over monetary claims that cannot be resolved
through consultation or mediation. Concurrently with or without arbitration,
either party may pursue through litigation at any time: (a) claims for
injunctive or other non-monetary relief; (b) claims that also involve third
parties who have not consented to arbitration; and (c) claims in litigation
commenced by third parties. The prevailing party shall be entitled to reasonable
attorneys fees and costs.

 

11.4 No Public Disclosure. The existence and resolution of the arbitration
proceedings shall be kept confidential by the parties and by the arbitrator,
except as required by law, regulation or a court of competent jurisdiction. All
disputes between the parties concerning the representations, warranties,
covenants and agreements contained in this Agreement and any PO shall be
exclusively and finally resolved in accordance with the provisions of this
Article 11.

 

ARTICLE 12. Miscellaneous

 

12.1 Successors and Assigns. All covenants and agreements contained in this
Agreement shall bind and inure to the benefit of the respective successors and
assigns of the parties, except that SELLER shall have no right to assign or
subcontract any interest in this Agreement or any PO without the prior written
consent of BUYER. A merger or change in the corporate structure of SELLER
(inclusive of a change in controlling ownership interest) shall constitute an
assignment which shall require the prior written consent of BUYER.

 

12.2 Independent Contractor. SELLER is an independent contractor, not an agent,
licensee, distributor or employee of BUYER or its Designee.

 

12.3 Survival. Unless otherwise agreed in writing, the obligations, liabilities,
warranties, representations, rights and remedies of each of the parties accrued,
made or incurred prior to or at the time of any termination or expiration of
this Agreement shall survive such termination or expiration for three years.

 

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12.4 Waiver. The failure of either party to enforce any right or remedy provided
in the Agreement, any PO or by law on a particular occasion will not be deemed a
waiver of that right or remedy on a subsequent occasion or a waiver of any other
right or remedy.

 

12.5 Governing Law. This Agreement and any POs under this Agreement shall be
governed by the laws of the State of Florida, United States, without reference
to principles of conflicts of law.

 

12.6 Severability. If any provision hereof is or becomes invalid or
unenforceable under any law, the parties intend that such provision will be
deemed severed and omitted from this Agreement or any PO and the remaining
portions shall remain in full force and effect as written.

 

12.7 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be a duplicate original, but all of which,
taken together, constitute a single document.

 

12.8 UN Convention on Contracts. The United Nations Convention on Contracts for
the International Sale of Products shall have no application to this Agreement,
any POs or actions under or contemplated by this Agreement.

 

12.9 Governing Language. The parties agree that governing language is English.
Any translations of this Agreement or any POs into Chinese or any other language
shall be for reference purposes only and shall not be legally binding.

 

12.10 Entire Agreement. This Agreement and any POs constitute the entire
agreement between the parties, superseding all prior oral and written
agreements, understandings, negotiations, promises, and representations of any
kind and there are no conditions to this Agreement or any PO which are not
expressed therein.

 

The parties hereafter execute this Agreement as of the Effective Date set forth
above.

 

BUYER:        SELLER:     WORLD MED SHARED SERVICES INC.   

 

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Signature:  

 

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   Signature:  

 

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Name:  

 

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   Name:  

 

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Title:  

 

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   Title:  

 

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BUYER’s Designee: TIGER SPECIALTY SOURCING LIMITED and

 

Signature:  

 

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Name:   Mark Engel, Chairman

 

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Exhibit F

 

CONFIDENTIALITY AGREEMENT

 

Effective Date:                     

 

This Confidentiality Agreement (“Agreement”) is made as of the Effective Date by
and between WORLD MED SHARED SERVICES, INC. (“PSSWM”), a Florida corporation
which is a subsidiary of PSS WORLD MEDICAL, INC. (“PSS”), with an office located
at 4345 Southpoint Blvd., Suite 300, Jacksonville, Florida 32216, USA, and
                                        
                                                             , a company
organized and existing under the laws of China, with a factory located at
                                        
                                        
                                         (“Recipient”).

 

1. TIGER SPECIALTY SOURCING LIMITED and SHANGHAI HU WEI MEDICAL PRODUCTS COMPANY
LTD. (“Tiger” or “Designee”). PSSWM has contracted with Tiger to identify,
interview, select and recommend Chinese suppliers, negotiate the terms and
conditions of each and every purchase and manage and coordinate its purchasing
activity in China. As PSSWM’s Designee in China, Tiger will discuss and
negotiate the terms and conditions of purchase and sale of goods from Recipient
and in the course of these discussions, confidential, proprietary and
commercially sensitive information may be disclosed to the Recipient by PSSWM or
its Designee.

 

2. CONFIDENTIALITY COVENANT. Recipient agrees not to disclose nor use
proprietary, confidential or commercially sensitive information disclosed by
PSSWM or its Designee and their directors, officers and employees to Recipient,
or learned by Recipient from PSSWM or its Designee and their directors, officers
and employees. This confidentiality covenant by Recipient shall cover all
proprietary, confidential or commercially sensitive information and documents
related to PSS’s and PSSWM’s products, brands, designs, plans, strategies,
processes, opportunities, technology, research, development, know-how, personnel
or suppliers and third-party confidential information (collectively
“Confidential Information”).

 

3. EXCEPTIONS TO CONFIDENTIALITY COVENANT. Confidential Information does not
include information that: (a) is now or subsequently becomes generally available
to the public through no fault or breach on the part of Recipient; (b) Recipient
can demonstrate to have had rightfully in its possession prior to the disclosure
to or acquisition by Recipient, (c) is independently developed by Recipient
without use of any Confidential Information; or (d) Recipient rightfully obtains
from a third party who has the right to transfer or disclose it.

 

4. SCOPE OF THE CONFIDENTIALITY COVENANT. Recipient agrees to use Confidential
Information only for the purpose of entering into a supply agreement with PSSWM
and for no other purpose, whether during and after the term of this Agreement.
Recipient will not to copy, disclose, disseminate, distribute, publish, modify,
disassemble, decompile or reverse engineer any Confidential Information and will
take all reasonable precaution to prevent any such unauthorized acts. Recipient
agrees, at its sole expense, to take all reasonable measures, including but not
limited to court proceedings, to restrain its directors, officers, employees,
agents or contractors from unauthorized disclosure or use of Confidential
Information.

 

5. OWNERSHIP OF CONFIDENTIAL INFORMATION. All Confidential Information, and any
Derivative of it (as defined below), whether created by PSSWM, its Designee or
Recipient,

 

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remains the property of PSSWM and no license or other rights to Confidential
Information is granted to Recipient. For purpose of this Agreement, “Derivative”
means: (i) for copyrightable or copyrighted material, any translation,
abridgment, revision or other form in which an existing work may be recast,
transformed or adapted, (ii) for patentable or patented material, any
improvement or enhancement of it; and (iii) for information or material which is
protected as trade secret, any new information or material derived from existing
trade secret information or material, including new information or material
which may be protected by copyright or patent or as trade secret.

 

6. TERM. The term of this Agreement is for three (3) years from the Effective
Date unless the parties enter into a supply agreement, in which case this
Agreement will terminate and the confidentiality provisions of the supply
agreement shall take effect.

 

7. RETURN OF DOCUMENTS. Upon PSSWM’s or its Designee’s written request,
Recipient will promptly deliver to PSSWM or its Designee all documents, records
and copies containing or reflecting Confidential Information and delete the same
completely from all computer systems, back-up devices and electronic files and
certify such deletion to PSSWM and its Designee in writing. For purposes of this
Agreement, the term “documents” includes all information fixed in any tangible
medium of expression, in whatever form or format.

 

8. EQUITABLE RELIEF. Recipient hereby acknowledges that unauthorized disclosure
or use of Confidential Information will cause irreparable harm and significant
injury to PSSWM that may be difficult to ascertain. Accordingly, Recipient
agrees that in addition to any other rights and remedies PSSWM may have, PSSWM
will have the right to seek and obtain immediate injunctive relief in any court
of competent jurisdiction any where in the world including China to enforce
obligations under this Agreement without having to offer specific proof that
PSSWM has suffered irreparable harm.

 

9. NO WAIVER. Recipient agrees that no failure or delay by PSSWM in exercising
any right, power or privilege under this Agreement will operate as a waiver nor
will any single or partial exercise preclude any other or further exercise of
any right, power or privilege.

 

10. ENTIRE AGREEMENT AND GOVERNING LAW. This Agreement constitutes the entire
agreement between the parties with respect to Confidential Information and
supersedes all prior or contemporaneous oral or written agreements. This
Agreement will be governed by and construed in accordance with the laws of the
State of Florida, USA, excluding that body of law concerning conflicts of law.

 

Understood and agreed to by the duly authorized representatives of the parties:

 

World Med Shared Services, Inc.    Recipient: By:  

 

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   By:   

 

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(Signature)    (Signature)

 

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(Printed Name and Title)    (Printed Name and Title)

 

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