Exhibit 10.6
 
**Confidential treatment requested on certain portions of this agreement. An
unredacted version
of this agreement has been filed separately with the Securities and Exchange
Commission.
 
 
FOURTH AMENDMENT
TO
TOLL MANUFACTURING AGREEMENT

This Fourth Amendment (this “Amendment”) to the Toll Manufacturing Agreement,
effective as of August 1, 2010 (the “Amendment Effective Date”), is made by and
between KCI Manufacturing (“KCI”) and Avail Medical Products, Inc.
(“Avail”).  Avail and KCI are referred to herein as the “Parties.”

RECITALS

WHEREAS, KCI and Avail are party to that certain Toll Manufacturing Agreement by
and between KCI and Avail entered into as of December 14, 2007 and as amended by
that certain Amendment to Toll Manufacturing Agreement dated as of July 31,
2008, that certain Second Amendment to Toll Manufacturing Agreement effective as
of April 1, 2009 and that certain Third Amendment to Toll Manufacturing
Agreement effective as of January 1, 2010 (the “Toll Agreement”); and

WHEREAS, Avail provides certain order fulfillment services from its warehouse in
Otay, Baja California, Mexico to KCI pursuant to the Toll Agreement, including
general pick and pack and shipping functions, as well as global distribution of
the Products; and

WHEREAS, the Parties wish to amend the Toll Agreement to further address the
Order Fulfillment Services as set forth herein.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereby agree as follows:
 
1.  
Add the following paragraph to the Toll Agreement as section 5(n):

 
General Business Reviews. Avail shall participate in quarterly general business
reviews with KCI and shall also report on all items relevant to the Order
Fulfillment Services as may be reasonably requested by KCI, including, but not
limited to, receipt of Products into the Otay Warehouse, shipping of Products
from the Otay Warehouse to KCI’s distribution network and inventory accuracy (as
measured by cycle count performance) during such quarterly reviews. Avail shall
also provide the same or similar reports to KCI on or prior to the fifth
business day of each month. The parties may agree from time to time to delete,
add or modify the content and delivery of such reports without the need to
further amend the Toll Agreement.
 
2.  
Add the following paragraphs to the Toll Agreement as section 5(o):
 

Order Fulfillment Services. Avail shall provide certain order fulfillment
services at its warehouse in Otay, Baja California, Mexico (the “Otay
Warehouse”), including storage of Products, general pick and pack and shipping
functions, as well as global distribution of the Products (the “Order
Fulfillment Services”).
 
(i) The parties agree that the Processing Services Fees include [***]. However,
both parties further agree that the Processing Services Fees are based upon good
faith quantity estimates provided to Avail by KCI and relied upon by Avail in
setting up its order fulfillment operation at the Otay facility. [***] Such
compensation shall be per the following table.
 
Annual Order Volume (stated in cases of Products per Calendar Year
Compensation due Avail
[***]
[***]

 
[***]
 
(ii) In the event that the parties do not agree on the order volume, the finance
departments of both parties shall jointly reconcile their records and determine
the volumes. Avail shall be entitled to invoice KCI for the applicable
compensation based on the reconciled annual volumes. KCI shall pay such invoice
within [***] days of receipt.
 
(iii)  KCI shall have the right to inspect and audit Avail’s business processes
and procedures relating to the Order Fulfillment Services as KCI deems necessary
and upon reasonable advance notification to Avail. KCI agrees that its personnel
shall at all times while on the Avail premises abide by the Avail policies and
procedures related to safety, security and confidentiality. KCI agrees that it
shall pay Avail reasonable fees for any additional services that KCI may request
of Avail, and as agreed to by the parties, [***].
 
3.  
Add the following paragraph to the Toll Agreement as Section 5(p):
 

In the event that there are any interruptions excluding product availability in
the Order Fulfillment Services or deviations from agreed-upon processes and
procedures related thereto (a “Reportable Event”), Avail shall provide
telephonic notice of such Reportable Event to the individuals listed below
within the timeframes set forth. If telephonic notification is not possible,
Avail shall exercise reasonable efforts to notify the KCI team through other
means.
 
KCI Contact
Timeframe
Method of Contact
Senior Manager, Distribution
By noon of the date of the event if the event occurs prior to 11 a.m., and by 5
p.m. PDT if the event occurs after 11 a.m., sooner if possible.
Telephone
Vice President,
Global Distribution and
Logistics
Within 1 hour of attempted contact of Senior Manager, Distribution if Senior
Manager, Distribution is unreachable
Telephone
Vice President,
Global Supply Chain
Within 1 hour of attempted contact of Vice President, Global Distribution and
Logistics if Vice President, Global Distribution and Logistics is unreachable
Telephone

 
The Parties may update the foregoing contact information from time to time
without the need to further amend the Toll Agreement.
 
4.  
The Service Level Agreement (“SLA”) Contained in this Amendment as Schedule A is
incorporated in compliance with the requirements of Section 10 (a) of the Toll
Agreement.
 

5.  
KCI shall have the right to direct execution of the Order Fulfillment Services
including, but not limited to, Product allocation, during extraordinary
circumstances.
 

6.  
In the absence of other specific direction from KCI, Avail shall use its
commercially reasonable efforts to fulfill all orders routed through the Otay
Warehouse

 
Except as expressly amended by this Amendment, the Toll Agreement shall remain
in full force and effect.  Capitalized terms not otherwise defined in this
Amendment shall have the meanings set forth in the Toll Agreement.  This
Amendment may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
 
IN WITNESS WHEREOF, the Parties have duly executed this Amendment effective as
of the Amendment Effective Date set forth herein.

 KCI MANUFACTURING    AVAIL MEDICAL PRODUCTS, INC.                By:   /s/ John
Elwood      By:    /s/ Manny Mariweather  Name:   John Elwood      Name:  
 Manny Mariweather  Title:   VP Global Mfg.    Title:    Director            
 22/12/10

 
(Signed Copy on File)

 
 

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

 

Schedule A
 
Service Level Agreement (SLA)

1.- All orders dropped after 7 am PST are considered the following day’s orders
for reporting purposes
 
2.- [***]
 
3.- Business days (M-F) are considered in the metric. Holidays are not counted
if the border is not open for the full day.

4.- [***]

SLA Requirements (assuming product is in inventory)

Service Centers             Ship within [***] defined as by [***] the day
following the drop day.

Distribution Centers     Ship within [***] defined as by [***] the day following
the drop day.

International                  To meet the booking provided by the customer,
with minimum [***] days’ notice

Air Shipment                  Ship within [***] ([***] pallets) defined as by
[***] the day of the drop

Air Shipment                  Ship within [***] ([***] pallets) defined as by
[***] the day following the drop day.

Parcel                               [***] defined as by [***] the day following
the drop day.