Document:

DiaSys Corporation - Exhibit 10.15

Exhibit 10.15
CONTRACT NO. ______________

 

  

  

  AGREEMENT FOR URINALYSIS 

  EQUIPMENT, RELATED SUPPLIES,

  AND SERVICE 

  

  Between 

  

  BROADLANE, INC. 

  

  and

  

  DIASYS CORPORATION 

  

  

  

  

  DATED: APRIL 12002

 

  

                        This
  Agreement for Urinalysis Equipment, Related Supplies, and Service (the "Agreement"),
  effective as of April 1, 2002 (the "Effective Date"), is between Broadlane,
  Inc., a Delaware corporation with offices at 13727 Noel Road, Suite 1400, Dallas,
  Texas 75240 ("Broadlane"), and DiaSys Corporation, a Delaware corporation with
  offices at 81 West Main Street, Waterbury, CT 06702-2115 ("Supplier"). 

  

                        Broadlane
  operates a group-purchasing program through which Broadlane negotiates contracts
  for certain Products on behalf of health care providers (including hospitals,
  physician offices, nursing homes, ambulatory surgery centers, home care agencies,
  diagnostic imaging centers, long-term care facilities, etc.) that designate
  Broadlane as their group-purchasing agent (the "Members"). Member also includes
  a parent corporation of a health care provider or third party agent that enters
  into an agreement with Broadlane designating Broadlane as the purchasing agent
  of the health care provider. 

  

                        Supplier
  is a vendor of the products and services listed on Exhibit A (the "Products")
  and desires to enter into this Agreement to allow the Members to purchase the
  Products.

  

                        
Supplier also desires to access the private electronic marketplace
created and maintained by Broadlane (the "Broadlane Exchange") so that Supplier
can sell products, equipment and services to Member (including, but not limited
to, the Products) through an Internet site, an integrated ERP, or other electronic
means. 

                      In
consideration of the mutual conditions and agreements set forth in this Agreement,
and for good and valuable consideration, the adequacy and receipt of which are
acknowledged, Broadlane and Supplier agree that Supplier shall provide Products
to Members under the following terms and conditions: 

 SECTION 1 

  

  TERM OF AGREEMENT

                      This
Agreement remains in effect for a period of five years, commencing on the Effective
Date and expiring on March 31, 2007 (the "Term"), unless terminated earlier as
provided in this Agreement. 

 SECTION 2 

  

  PARTICIPATION

2.1                 Qualification
for Participation. Members (including entities that become Members after the
Effective Date) may purchase Products pursuant to the terms of this Agreement.
Any Member that withdraws or is terminated from Broadlane membership may not purchase
Products pursuant to the terms of this Agreement. 

2.2                 List
of Broadlane Members. Broadlane shall provide Supplier with a list of Members
(in electronic format) as of the Effective Date, and shall provide regular updates.

2.3                Termination
of Existing Contracts. Any Member that wishes to purchase Products under this
Agreement may, at its option and without any penalty or cost, terminate any existing
contract or other arrangement with Supplier for the same Products. Supplier shall
not directly or indirectly contract with any Member for Products. 

2.4                 Responsibility
and Liability. Each Member is liable directly to Supplier for all payments
and any other obligations with respect to Products. Supplier is solely responsible
for invoicing Members for Products. Except as set forth in this Agreement, Broadlane
has no liability, responsibility, or performance obligations to Supplier relating
to any Products. 

SECTION 3 

  

  ELECTRONIC COMMERCE

3.1                 Execution
of Broadlane Exchange Supplier Agreement. Unless Supplier has an existing
Broadlane Exchange Supplier Agreement ("BESA"), Supplier shall execute a BESA
in a form mutually agreeable to Supplier and Broadlane within 60 days of the date
that Broadlane notifies Supplier of its intention to integrate Supplier to the
Broadlane Exchange. The BESA will require Supplier to pay to Broadlane a service
fee equal to 1% of the price of all of Supplier's equipment, products, and services
purchased through Broadlane's Internet site, through ERP systems of entities that
use the Broadlane Exchange, or through any other electronic means. The BESA applies
to all purchases from Supplier by entities that sue the Broadlane Exchange, whether
or not they are purchases of Products. 

3.2                 Use
of Broadlane Exchange. Upon the execution of the BESA, Supplier shall use
the Broadlane Exchange as one of its e-commerce solutions. Supplier shall permit
Broadlane to integrate Supplier's order fulfillment system into the Broadlane
Exchange so that transaction sets may be electronically transmitted to and from
Supplier through the Broadlane Exchange. 

3.3                 Allocation
of Costs. Broadlane is solely responsible for the costs of integration, including
the labor costs associated with any third party consultants retained by Broadlane.
Supplier is solely responsible for the costs of any and all services, hardware,
and software required for Supplier's order fulfillment system applications to
interface properly with the Broadlane Exchange. Supplier is solely responsible
for the cost of maintenance, monitoring, and support of all components within
Supplier's domain including, but not limited to, Supplier's third party services
(VAN or other), hardware, software, order fulfillment system, and customer services.

3.4                 Remedy
if Supplier Does Not Execute BESA. If Supplier has not executed the BESA within
the timeframe required by Section 3.1 above, Broadlane has the right to cancel
this Agreement upon 30 days prior written notice. 

SECTION 4 PRICING, ORDERING, AND DELIVERY

4.1                 Pricing
and Payment. 

                       
4.1.1     Firm Pricing. The prices for each of the
Products that Supplier will offer for sale to Members under this Agreement are
set forth on Exhibit A. Supplier shall not increase these prices during the Term.

                      
4.1.2     Pricing and Other Data. Supplier shall provide
Broadlane with pricing information in an EDI 832 equivalent format, or in Excel
format set forth under Section I of Exhibit B. Broadlane and Supplier shall mutually
agree upon the method of transmission of this pricing data. In addition, Supplier
shall provide the cross-reference file layout, product attributes file layout,
and product categorization file layout information set forth in Sections II, III,
and IV of Exhibit B. 

                      
4.1.3     Pricing on New Products. If Supplier begins
to sell a similar product not listed on Exhibit A, Supplier shall notify Broadlane
within 30 days of governmental approval or Supplier's release of the product.
Broadlane and Supplier shall promptly amend Exhibit A to add the new Product(s)
at a mutually agreed upon price. 

                      
4.1.3     Favorable Pricing. The Prices, terms, and
conditions under this Agreement must be equal to or better than those offered
to most favored, or similarly situated customer of Supplier, except the federal,
state, or local government. If Supplier is not in compliance, Broadlane and Supplier
shall amend this Agreement to provide the more favorable terms. 4.2 Distribution.
If any Products are purchased through an authorized distributor, all taxes, ordering,
and delivery terms are governed by the applicable terms of the Member's agreement
with the distributor. 

4.3                 Taxes
on Direct Purchases. Supplier shall calculate and pay any applicable local
and state sales tax or other taxes with respect to the direct purchase of Products.
Unless the applicable Member is tax-exempt, these taxes may be billed to the Member
if correctly and accurately reflected on the invoice. 

4.4                 Ordering
and Delivery for Direct Purchases. 

                      
4.4.1     Purchase Orders. Member may place purchase
orders for Products through the Broadlane Exchange, an authorized distributor,
by telephone, telecopier, or through electronic order entry directly through Supplier
at: 

	 	DiaSys Customer Service 

      81 West Main Street 

      Waterbury, CT 06702-2115 

      Telephone: 800.360.2003

      Fax: 203.755.5083 

      e-mail: sales@diasys.com 

                      
There are no minimum order requirements for Products, however order may only be
placed in Supplier's standard sale unit of measure. 

                      
4.4.2     Payment. Payments for Products are due from
Members within 30 days of receipt of the invoice, with a 2% additional discount
if payment is received within 10 days after receipt of the invoice 92% 10; net
30). 

                      
4.4.3     Delivery. Products must be delivered to the
Member's place of business or any other location specified by Member not more
than 30 days after Supplier's receipt of the Member's order for Product, unless
a later date is requested by Member. Except as otherwise set forth on Exhibit
A, all prices set forth on Exhibit A exclude shipping. Upon Member's written request,
Supplier will ship Products "freight collect" to Member using the carrier and
billing information provided by Member. The risk of loss of the Products does
not pass to the Member until delivery of the Products to Member. 

                      
Supplier shall use its best efforts to assist any Member in finding alternative
acceptable sources for any Product that Supplier cannot deliver according to this
guaranteed delivery time. 

                      
4.4.4     Returns. Members may return Products sold
by Supplier in accordance with Supplier's return policy, set forth on Exhibit
C. Supplier shall not charge any restocking fee and Supplier shall pay all return
shipping costs unless the Member ordered or returned the Product in error. 

SECTION 5 

  

  ADMINISTRATIVE FEES

5.1                 
Calculation of Administrative Fees. On a monthly basis, Supplier shall pay
Broadlane a fee (the "Administrative Fee") equal to 3% of the aggregate amount
paid by all Members for all Products purchased during the prior calendar month,
less any credits and returns. Supplier shall pay the Administrative Fee no later
than 30 days after the end of each applicable calendar month. 

5.2                 Monthly
Reporting. Accompanying the Administrative Fee payment, Supplier shall provide
Broadlane with monthly reports of all Products purchased by each Member. Each
report must include: (i) the start and end dates of the reporting period; (ii)
each Member's name, address and HIN or DEA number or both (as provided on a Broadlane
Member list); (iii) sales volume per contract (subtotaled by Member) for the reporting
period; and (iv) the Administrative Fees earned by Broadlane during the month
(subtotaled by Member). All monthly reporting documentation must be provided in
the electronic format as detailed in Exhibit D. 

 

SECTION 6 

  

  TERMINATION 

6.1                 
Termination for Breach or Ineligibility. In the event of a material breach
of this Agreement (including any failure to pay Administrative Fees), the non-breaching
party shall notify the breaching party in writing of the specific breach and shall
request that it be cured. If the breaching party does not cure the breach within
30 days of the notice, the non-breaching party may terminate this Agreement by
sending written notice to the breaching party. Broadlane may immediately terminate
this Agreement if Supplier or any of Supplier's key personnel is convicted of
an offense related to health care or listed by a federal agency as being debarred,
excluded, or otherwise ineligible for federal program participation. 

6.2                 Effect
of Termination. The termination of the Agreement by either party does not
excuse either party from performing any duty or obligation assumed under the Agreement
before termination, nor does termination have the effect of waiving any right
either party may have to obtain performance or preclude the non-breaching party
from pursuing any and all remedies available to it at law or equity. 

 

SECTION 7 

  

  MISCELLANEOUS 

7.1                 
Broadlane's Standard Terms and Conditions. Broadlane's Standard Terms and
Conditions are attached as Exhibit E. 

7.2                 Product
Specific Terms and Conditions. Additional Terms and Conditions related to
the specific Products covered by this Agreement are attached as Exhibit F

 

7.3                 
Conditions of Proposal. Any conditions contained in
Broadlane's request for proposal for this Agreement not expressly excluded from
Supplier's final proposal that was accepted by Broadlane are incorporated into
this Agreement by reference. 

7.4                 
Controlling Terms. In the event of a conflict between this Agreement and any
other writing or correspondence between Supplier, Broadlane, and/or any Member,
the terms of this Agreement control. In the event of any internal conflict of
terms within this Agreement, the term found in the part of this Agreement first
listed below controls: The main body of the Agreement; Exhibit E (Broadlane's
Standard Terms and Conditions); Exhibit F (Standard Terms and Conditions - Lab
& Lab Equipment); Exhibit A (Products and Pricing); Exhibit B (Broadlane Pricing
Requirements); Exhibit D (Sales Data Report Format; Exhibit C (Supplier's Return
Policy); Exhibit G (Supplier's Product Warranties); any other exhibits provided
to Broadlane by Supplier. 

7.5                 
Entire Agreement. This Agreement may be executed in any number of counterparts,
each of which is deemed an original but all of which constitute the same instrument.
This Agreement, including all exhibits and attachments (all of which are incorporated
in this 

                      
Agreement by reference), constitutes the entire agreement on this subject and
supersedes all previous and contemporaneous communications, representations, or
agreement regarding the referenced subject matter. This Agreement may not be modified
orally, and no modification, amendment, or supplement is binding unless it is
in writing and signed by authorized representatives of Broadlane and supplier.

                      
The undersigned duly authorized representatives of the parties have executed this
Agreement as of the date written below. 

	Broadlane, Inc. 	DiaSys Corporation 
		
	By:________________________	By:________________________
		
	Printed Name: Michael Berryhill 	Printed Name: Todd M. DeMatteo 
		Its: President and CEO 
	Date_______________________ 	Date_______________________DiaSys Corporation - Exhibit 10.16

Exhibit 10.16 
SUPPLIER SET-UP FORM

	 	
      December 8, 1999 

        Date

    

 

	DiaSys Corporation 
      

    	
      Waterbury 
        

      

    	
      CT 
        

      

    	
      06702-2115
        

      

    
	Supplier Name 	
      City 

    	
      State 

    	
      Zip

    
	 	
      

    	
      

    	
      

    
	49 Leavenworth Street
      

    	
      Waterbury 
        

      

    	
      CT 
        

      

    	
      06702-2115
        

      

    
	Supplier Address 	
      City 

    	
      State 

    	
      Zip

    
	 	
      

    	
      

    	
      

    
	Same as above
      

    	
      
        

      

    	
      
        

      

    	
      
        

      

    
	Address Purchase Orders To	
      City 

    	
      State 

    	
      Zip

    
	 	
      

    	
      

    	
      

    
	Same as above
      

    	
      
        

      

    	
      
        

      

    	
      
        

      

    
	Address Payment To 	
      City 

    	
      State 

    	
      Zip

    
	 	
      

    	
      

    	
      

    
	Same as above
      

    	
      
        

      

    	
      
        

      

    	
      
        

      

    
	Product Returns To 	
      City 

    	
      State 

    	
      Zip

    

 

	Telephone#: 203/755-5083 	 	Corporate HIN # 06-1339248	 
	800 #: 800/360-2003     
      	 	 	 
	Fax#:  203/755-5105     
      	 	 	 
	
      14 Days ARO
        

      

    	 	
      Monday
        

      

    	 
	
      General Lead Time 

    	 	
      Preferred Day to Receive

        Stock Purchase Orders

    	 

 

Please give a brief description of your product line(s). 

	
      

    	Laboratory instruments which automate and standardize
      routine urine sediment analysis 
      

    

Please indicate the size of your company. 

	o  Over
      500 employees (Large Firm)	ý  Under
      500 employees (Small Firm) 

 

 If you are a small firm, please indicate if your firm can
be classified by one or more of the following SBA categories: 

	o  Not
      Applicable	ý  Small	o  Small-Disadvantaged	o  Woman-Owned

 
	o  Sheltered
      Workshop	ý  HUB
      Enterprise Zone	o  Disabled
      Am. Veteran-Owned

Please indicate your firms SBA Standard Industrial Classification (SIC) Code 3841
-0000 & 3826-0300 

Page 1 of 14 

SUPPLIER SET-UP FORM 

REGULATORY AFFAIRS AND QUALITY ASSURANCE INFORMATION

Which categories describe your product line? 

	Medical Device  ý	Drug  o	Food  o	Cosmetic  o	Biologic  o

 Other (Explain):_______________________________________________________________________

If the category is Drug, is your company's manufacturing site registered with
FDA as a Drug Establishment? 

	 	YES, Registration #      N/A      	Yes o       No
      o
	 	If yes, please provide a copy
      of the Drug Listing Form FDA-2657 	
	 	Are any products labeled as prescription
      drugs? 	Yes o       No
      o

If the category is Biologic, please provide the license numbers for each of the
products. N/A 

If the category is Medical Device, is your company's manufacturing site registered
with the FDA as a Device Establishment 

	 	YES, Registration #  1223854        	Yes ý       No
      o
	 	Are any product(s) pre-enactment
      medical devices	Yes o       No
      ý
	 	If yes, please provide a copy
      of the Device Listing Form FDA-2892 Are any of the product(s) post-enactment
      medical devices? 	Yes ý       No
      o
	 	If yes, please provide a copy
      of the FDA Premarket Notification (510k) clearance letter or the premarket
      approval response. Also, please provide a copy of the Device Listing Form
      FDA-2892. Are any products labeled as prescription devices? 	Yes o       No
      ý

 
	Are any products expiration dated? 	Yes o       No
      ý
	Do any products contain natural rubber latex?
      	Yes o       No
      ý
	Do any products require a warning as a Carcinogen
      or Reproductive Toxicant as defined by California Proposition 65? 	Yes o       No
      ý
	Are any products labeled "Sterile" 	Yes o       No
      ý
	Are any of your products manufactured with
      or contain CFCs?	Yes o       No
      ý
	Are any of your products considered
      hazardous (including Consumer Commodity, ORM-D) by the Department of Transportation
      while in transit? 	Yes o       No
      ý
	Do any products have Material Safety Data Sheets?	Yes o       No
      ý
	Do any product labels state storage temperature
      ranges or requirements?	Yes ý       No
      o
	Do any products require special shipping conditions
      for temperature control?	Yes o       No
      ý
	Are any of the products a chemical,
      chemical reagent, or impregnated with a chemical (for example: detergent,
      disinfectant, germicide, hand lotion, soap, alcohol swabs, cream, gel, paste,
      powder, acid, base, solvent, adhesive, etc.)?	Yes o       No
      ý

 

 Page 2 of 14 

SUPPLIER SET-UP FORM 

RA/QA Information 

	Do any products contain a microprocessor,
      electronic controller, hardware or software that has a calendar or real
      time clock? 	Yes ý       No
      o

 
	 	If yes, do you certify that
      all such products will function properly without regard to Year 2000 issues?
      	Yes ý       No
      o
	 	If no, please attach a detailed
      explanation of product related issues which may arise as a result of Year
      2000. 	 

 
	Do you anticipate manufacturing private label
      products for Allegiance?	Yes o       No
      ý
	Do any of your products require tracking to
      the patient level per 21 CFR 821? 	Yes o       No
      ý
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

Page 3 of 14 

SUPPLIER PROFILE 

	 I. 	PRIMARY CONTACT(S)	 	 	 
	 	Name 	Title 	Phone	E Mail
	 	Todd M. DeMatteo 
      

    	President/CEO 
      

    	203/755-5083 
      

    	diasyscorp.com 
      

    
	 	Marketing 	 	 	 
	 	 	 	 	 
	 	Todd M. DeMatteo 
      

    	" 
      

    	" 
      

    	"
      

    
	 	Sales 	 	 	 
	 	 	 	 	 
	 	Carol Bopp
      

    	Customer Service
      

    	" 
      

    	"
      

    
	 	Customer Service 	 	 	 
	 	 	 	 	 
	 	N/A 
      

    	
      

    	
      

    	
      

    
	 	National Accounts/Multi-Healthcare
      Systems 	 	 
	 	 	 	 	 
	 	Richard Manville
      

    	Manager-Finance
      

    	" 
      

    	"
      

    
	 	Accounting 	 	 	 
	 	 	 	 	 
	 	Carol Bopp
      

    	Customer Service
      

    	" 
      

    	"
      

    
	 	RA/QA 	 	 	 
	 	 	 	 	 
	 	Richard Manville 
      

    	Manager-Finance
      

    	" 
      

    	"
      

    
	 	Shipping 	 	 	 
	 	 	 	 	 
	 	Laura Marshall 
      

    	Field Services
      

    	" 
      

    	"
      

    
	 	EDI 	 	 	 
	 	 	 	 	 
	 	Todd m. DeMatteo 
      

    	President/CEO
      

    	" 
      

    	"
      

    
	 	Pricing 	 	 	 
	 	 	 	 	 
	II. 	BACKGROUND INFORMATION
      	 	 
	A. 	Marketing Overview 	 	 	 

 
	 	1. 	 Description of Product Category(ies)	Laboratory testing of bodily
      fluids.  	 
	 	2. 	Total Industry Sales per Category
      	N/A                                                      
       	 
	 	3. 	Supplier's Annual Sales Per Category
      	N/A                                                      	 
	 	4. 	Current Sales Trend Per Category
      	N/A                                                      
      
Yellow
      	 

 
	 	5. 	Top 3 Competitive Products 

      (include Supplier name) 	1) Iris   

      2) UF100

      3) Kova 	- Iris

      - Sysmex Corp of Am. 

      - Hycor Biomedical 

 

Page 4 of 14 

 

SUPPLIER SET-UP FORM 

Supplier Profile 

  
	B. 	Specific Supplier Information 

		1. 	Is your Business	o  Domestic	o  International	ý  Both?
	 	 	 	 	 	 
	 	2. 	Is your Company	o  International	ý  Publicly
      Held?	 
	 	 	 	 	 

 
	 	3.	Is your company a subsidiary or division of
      a larger entity?	
      o  Yes
            ý   No

    	 

		 	 If yes, please indicate the name
      and address of the parent company. 

      

      N/A
      

       

 

	 	4. 	Do you Participate in Rebate Programs?
      	
      ý  Yes
            o   No

    	 
	 	 	 	 	 
	 	5. 	Do you Currently Employ a Sales Force? 	
      ý  Yes--How
        Many  8  o   No

    	 
	 	 	Manufacturing Reps? 	
      o  Yes--How
        Many      ý   No

    	 
	 	 	 	 	 
	 	6. 	What is your Current Method of Distribution?
      	
      o  Direct
          ý  Distributors

    	 

		 	
      Please List: 

    	Direct in U.S. 
      

       Bayer Inc. in Canada 
      

       Multiple distribution outside North America 
      

    

	 	7. 	Where are your Manufacturing Locations?
      

 
		 	
      

    	49 Leavenworth Street 
      

    
		 	
      

    	Waterbury, CT 06702
      

    

	 	8. 	Primary Shipping Mode (circle
      One): UPS/RPS LTL (Less than Truckload) 

 

		9.	Shipment Origin(s):	Primary:	Waterbury
      

    	CT
      

    	06702 
      

    	
		 	 	 	City 	State 	IL 	
		 	 	 	 	 	 	
		 	 	Secondary: 	N/A
      

    	
      

    	
      

    	
	 	 	 	 	City 	State 	IL 	 
	 	 	 	 	 	 	 	 
	 	 	 	Other:	N/A
      

    	
      

    	
      

    	 
	 	 	 	 	City 	State 	IL 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 

 Page 5 of 14

SUPPLIER SET-UP FORM 

Supplier Profile 

  

	 	10. 	Will you ship directly to the end user? If
      Yes, is there a:

 
	 	 	- 	 Minimum order 	No
      

    	 
	 	 	- 	Dropship fee	No 
      

    	We prefer to drop ship for for
      safety reasons
	 	 	- 	Loss of discount	 No
      

    	 
	 	 	- 	Other penalties	 No
      

    	 

 

	 	11.	 Please Check Where You Are EDI Ready: 

 
	 	 	o  850-Stock
      PO	
      o  856-Ship
        Notice

    	
      ý  810-Invoice

    	 

	 	 	o  832
      Price/Sales Catalog	
      o  845
        Contract Notification

    	 

  
	 	12. 	Are all your EDI systems ANSI (X12)?
      	
      o  Yes
            ý   No

    	 
	 	 	 	 	 
	 	 	If no, are all your EDI systems
      otherwise Year 2000 compliant? 	
      o  Yes
            ý   No

    	 

 
	 	 	If no, please provide detailed
      written explanation: 

 
	 	 	 	 
		 	
      

    	We do not currently use EDI. 
      

    
		 	
      

    	
      

    

	 	13.	Will your company be able to provide products
      without interruption caused by Year 2000 System issues? 	
      ý  Yes
            o   No

    	 

 

  
	 	 	If no, please provide detailed
      written explanation: 

 
	 	 	 	 
		 	
      

    	
      

    
		 	
      

    	
      

    

 
	 	 	 	 	 
	 	14. 	 Do you Participate in Hospital Group Purchasing
      Contracts?

      

      Please list or attach listing: 	
      ý  Yes
            o   No

    	 

 

	 	 	Amerinet, Magnet, InSource, Smithkline 
      

      Kaiser Permanente, numerous local networks. 
      

    
	 	 	 

 Page 6 of 14 

SUPPLIER SET-UP FORM 

ALLEGIANCE HEALHCARE CORPORATION

  CONDITIONS FOR DOING BUSINESS

ORDER QUANTITY 

Unless otherwise specifically agreed upon by Allegiance in writing, there will
be no minimum order quantity. 

DISTRIBUTION 

Supplier will be able to accommodate customer order unit of measure to allow for
flexible distribution (i.e., traditional, tailored pipeline, stockless/JIT). 

COST / PRICE 

Invoice prices will be based on date of purchase order. All cost/price changes
must be in accordance with Allegiance's then-current Supplier Price Change and
Notification Policy, a current copy of which is included in this package. All
cost increases will be reviewed with regard to the sensitivity of the marketplace
in accepting price changes and the impact on our mutual total economics. Therefore,
any changes must be approved by the Vice President of Marketing. 

REBATES 

The following process will apply with regard to rebates: Allegiance uses an auto-debit
system where rebate dollars are automatically deducted from a supplier's check
upon the sale to the end-user customer. Rebate dollars are accumulated until a
specified time period (usually one month) and then the deduction is made. A remittance
advice will follow the check showing which deductions have been made. 

NEW PRODUCTS 

Products to be added to the Allegiance Master Merchandise File will be submitted
via the Supplier Product Update Disk (SPUD) which is a software program available
from the Marketing or Supply Chain contact at Allegiance. Comply with the Universal
Product Number (UPN) within 120 days of distributor's request. The UPN is a number
that uniquely identifies a healthcare product at each salable unit of measure.

TRANSPORTATION 

Supplier will ship products to all Allegiance Distribution Centers, F.O.B. Destination.
It is understood that pricing for the products purchased by Allegiance includes
transportation expenses. All Direct (Drop) shipments to Allegiance's customers
must be F.O.B. VIA UPS Destination, Prepaid and Add. Allegiance reserves the right
to determine the carriers to be selected for shipment to its customers. Any deviation
from these terms must be agreed upon prior to shipment by Allegiance's Transportation
Department, McGaw Park, IL. 

Page 7 of 14 

  

SUPPLIER SET-UP FORM 

Conditions For Doing Business 

RETURNS 

On a quarterly basis, Supplier will accept any salable excess/no move inventory
of products, with no restocking fee. Excess/no move inventory is any inventory
of products in a given distribution center that exceeds four (4) months of customer
demand for that distribution center. "Salable" Product is defined as undamaged
product in its original sealed shipping carton. 

TERMS 

Terms are 2% 30 Days, or Net 90 Days. 

ADMINISTRATIVE FEES 

Allegiance shall deduct an administrative fee of 3% at time of invoice payment
to cover costs of trace sales reporting, (May not be provided for private label
products) the rebate process, master merchandise file costs and other costs to
administer the procurement of inventory and other associated processes. 

EDI 

Supplier will maintain the systems necessary and will utilize the following: Purchase
Order (EDI #850), Invoice (EDI #810), Shipment Notice (EDI #856) and Contract
Notification (ED I #845). In the event Supplier does not utilize the above referenced
EDI transactions within 90 days after Allegiance's request that it do so, Allegiance
will have the right to deduct 1 % from its payment of any Supplier invoices per
each EDI transaction not implemented until Supplier begins utilizing each such
EDI transaction. 

OTHER TERMS 

Unless inconsistent with the terms above or those in any other written agreement
signed by Allegiance, the terms and conditions of the Purchase Order attached
will govern all purchases. The terms and conditions of the Allegiance Continuing
Guarantee shall also govern all purchases. 

	Accepted by: 	 
	 

      

    	 
	Signature 	 
	 	 
	Todd M. DeMatteo 
      

      Name (please print) 	 
	 	 
	President/CEO 
      

      Title 	 
	 	 
	12/8/99
      

       Date 	 

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PURCHASE ORDER TERMS AND CONDITIONS

  

	1. 	AREEMENT: This order is Buyer's
      offer to Seller and becomes a binding contract, subject to the terms hereof,
      when accepted by acknowledgment or commencement of performance by Seller.
      Buyer objects to all additions, exceptions, or changes to these terms, whether
      contained in any printed form of Seller or elsewhere, unless such terms
      are approved by Buyer in writing. To the extent there are any inconsistencies
      between such terms and those written on the face of this order, the former
      will control. This order constitutes the entire agreement between the parties
      with respect to the goods and/or services reflected in this order and all
      prior understandings between the parties related to such goods and/or services
      are superseded except to the extent that the terms of this order are in
      conflict with a written agreement fully executed by both parties in which
      case the terms of the fully executed agreement control. 
	2. 	PRICE AND PACKING: Unless otherwise
      specified, the prices stated on the front of this order include all charges
      for packing, hauling, storage, and transportation to point of delivery.
      Sales and use taxes not subject to exemption shall be stated separately
      in Seller's invoice. Seller warrants that the prices quoted in this order
      are no greater than those currently charged any other buyer for similar
      quantities of goods or services. Any price reduction extended to others
      by Seller prior to delivery shall also be extended to Buyer. In the event
      Seller breaches this warranty, the prices of the products shall be reduced
      accordingly retroactively to the date of such breach. 
	3. 	The products shall be packed and
      shipped by Seller in accordance with Seller's policies and practices and
      good commercial practice and so as to insure that no damage shall result
      from weather or transportation. 
	4. 	CHANGES: Buyer may give written
      notice at any time to make changes in the delivery date, scope, or quantity
      of the goods or services covered by this order or in other terms hereof,
      in which event an equitable adjustment will be made to any price, time of
      performance, and other provisions of this order if appropriate. Claims for
      such an adjustment must be made within fifteen (15) days from the date of
      receipt by Seller of notice of the change. Substitutions or changes in package
      count or size or quantities or specifications or changes in labels, labeling
      or packaging of goods private labeled for Buyer by Seller shall not be made
      without Buyer's prior written approval. 
	5. 	OVERSHIPMENTS: Overshipments of
      goods not approved by Buyer in writing will be returned at Seller's expense
      if such overshipment exceeds 5% of the total quantity. 
	6. 	WARRANTY: 

	 	 	(a) 	Seller warrants that the Product
      will perform to its published specifications and be free from defects in
      material and workmanship under normal use and service for a period of twelve
      (12) months from date of Delivery. Seller's sole responsibility under this
      warranty is limited to the repair or replacement of any defective part of
      such Product which may, in Seller's discretion, be performed at Seller's
      or Buyer's premises. The cost of such repair or replacement, including labor
      and parts and shipping by UPS ground, is the responsibility of Seller. This
      warranty is void if Buyer fails to maintain electrical power and environmental
      conditions described in Seller's published specifications or instructions,
      or if the Product or any part thereof, has been subject to any unauthorized
      modification, accident, neglect, misuse, use of unauthorized software or
      media, tampering, or any event other than ordinary and/or authorized use.
      

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PURCHASE ORDER TERMS AND CONDITIONS

 

	 	 	(b) 	Seller warrants that the goods:
      (1) are not adulterated or misbranded within the meaning of the Federal
      Food, Drug and Cosmetic Act as amended (the "Act"), or within the meaning
      of any applicable state or municipal law in which the definitions of "adulteration"
      and "misbranding" are substantially identical with those contained in the
      Act; (2) are not goods which may not under the provisions of Sections 404,505,512,515,
      or 516 of the Act be introduced into interstate commerce, or which may not
      under substantially similar provisions of any state or municipal law be
      introduced into commerce; and (3) are in full compliance with the Biological
      Products section of the Public Health Service Act. 
	 	 	(c) 	Seller warrants that all products
      sold to Allegiance shall be Year 2000 compliant and Seller's supply of product
      to Allegiance under this order shall not be interrupted due to problems
      relating to the Year 2000. 
	 	 	(d) 	AII these warranties and other
      warranties as may be prescribed by law shall extend to Buyer, its successors,
      assigns, and customers and to users of the goods or services and shall run
      through any expiration date stated on the goods, or, if no expiration date
      is stated, then for a period of one (1) year after delivery. Claims under
      these warranties must be made within the applicable period proscribed by
      statute. 

 

	7. 	INSPECTIONS; TESTING: Goods or services purchased
      under this order are subject to. Buyer's reasonable inspection, testing,
      and approval at Buyer's destination at time of delivery. Buyer reserves
      the right to reject and refuse acceptance of goods or services which are
      not in accordance with this order or Seller's representations or warranties,
      express or implied. Rejected goods or services may be returned to Seller,
      or held by Buyer, at Seller's risk and expense. Payment for any goods or
      services under this order shall not be deemed acceptance of the goods or
      services. 
	8. 	RECALL: In the event that a recall of the goods
      or product corrective action is necessitated by a defect, a failure to conform
      to the specifications, applicable laws, or any other reason within Seller's
      control not due to Buyer's negligent act or omission, Seller shall bear
      all costs and expenses of such recall or corrective action including without
      limitation, costs of notifying customers, customer refunds, costs of returning
      goods, lost profits, and other expenses incurred to meet obligations to
      third parties. 
	9. 	SPECIAL LAWS: In filling this order, Seller
      will comply with all applicable federal, state, and local laws, ordinances,
      regulations, rules, declarations, interpretations and orders issued thereunder,
      including the following: 

	 	 	(a) 	Executive Order 11246 as amended,
      which provides in part that Seller will take affirmative action with regard
      to recruiting and retaining minorities in all levels of its workplace, including
      all requirements set forth in Section 202 of the Executive Order which are
      incorporated by reference; 
	 	 	(b) 	laws prohibiting discrimination
      on the basis of an applicant's or employee's protected status; and, 

 

 

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PURCHASE ORDER TERMS AND CONDITIONS

	 	 	(c) 	the affirmative action and nondiscrimination
      requirements provided by 41 CFR 60- 250.4(m) and 41 CFR 65.741.4(1) protecting
      the interests of handicapped workers and disabled and Vietnam-era veterans.
      Seller also represents that: 
	 	 	(d) 	the goods are consistent with,
      and can be used in compliance with, the Occupational Safety and Health Act
      of 1970 (OSHA), that services to be performed on Buyer's premises will be
      consistent with OSHA provisions, and that Seller will provide Buyer a current
      material safety data sheet (MSDS) for hazardous chemical substances as required
      by law;
	 	 	(e)	 for any order over $10,000, Seller
      shall have an approved plan for small business concerns and small disadvantaged
      business concerns as specified under Public Law 95-507 unless Seller itself
      is one of these concerns; 
	 	 	(f) 	the goods and services are provided
      in compliance with federal, state and local environmental laws and regulations
      according to the terms of Seller's insurance coverage, 

	10. 	INDEMNIFICATION: Seller shall
      defend, indemnify, and hold Buyer, its successors, assigns, officers, directors,
      employees, customers, and users of the goods or services harmless with respect
      to all claims, liability, damage, loss and expenses, including attorney's
      fees, incurred relating to or caused by, or arising from: 

	 	 	(a) 	actual or alleged patent, copyright,
      or trademark, infringement or violation of other proprietary rights, arising
      out of the purchase, sale, or use of the goods or services covered by this
      order, 
	 	 	(b)	actual or alleged
      defects in the services or in the design, manufacture or material of t he
      goods; 
	 	 	(c) 	actual or alleged breach of warranty;
      
	 	 	(d)	failure of Seller to deliver the
      goods or services on a timely basis: including liquidated damages and costs
      to recover; or, 
	 	 	(e)	failure of the goods or services
      to meet the requirements of the applicable federal, state, and. local law,
      ordinances, regulations, rules, declarations, interpretations and orders.
      law including without limitation the following statutes: Federal Food, Drug,
      and Cosmetic Act; Biological Products section of the Public Health Service
      Act; Federal Insecticide, Fungicide, and Rodenticide Act; Resource Conservation
      and Recovery Act; Federal Caustic Poison Act; Toxic Substances Control Act;
      Flammable Fabrics Act; Fair Packaging and Labeling Act; Wool Products Labeling
      Act; Magnuson-Moss Warranty Federal Trade Commission Improvement Act; Fair
      Labor Standards Act; "Special Laws" stated in Paragraph 9 above; and Occupational
      Safety and Health Act of 1970. 

      

      In the event of a claim under this paragraph, Buyer may at its option terminate
      this order or defer acceptance of the balance of the goods or services ordered
      until the claim is resolved. If Buyer is enjoined from use of the goods,
      Seller shall, at Seller's option, either procure for Buyer the right to
      continue using the goods, replace the goods with substantially equivalent
      goods, modify the goods so as to be usable by Buyer, or repurchase the goods
      at the price set forth in this order. This Paragraph 10 shall not be construed
      to indemnify Buyer for any loss to the extent it is attributable to Buyer's
      design, specification, or negligence. 

 

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PURCHASE ORDER TERMS AND CONDITIONS

	11. 	INSURANCE: Seller shall, at its
      sole expense, obtain and keep in force, for three years after the last delivery
      under this order, the following insurance covering the Seller and the Seller's
      agents, employees, representatives and subcontractors: 

	 	 	(a) 	Comprehensive or Commercial
      General Liability in an amount not less than $3 Million each occurrence
      combined single limit for bodily injury and property damage for: (1) Premises-Operations,
      (2) Products/Completed Operations Liability (3) Vendors Liability (4) Blanket
      Contractual Liability (5) Personal injury (6) Independent Contractor's Protective
      Liability (if subcontractors employed to perform portions of the Services).
      

 
		If services are to be performed
      under this order while on Buyer's premises, the above insurance obligations
      of Seller shall also include: 

	 	 	(b) 	Comprehensive Automobile Liability
      for owned, hired and nonowned motor vehicles with the same coverage amounts
      as specified above; 
	 	 	(c) 	Workers' Compensation in accordance
      with applicable statutory requirements and Employer's Liability in an amount
      of not less than $1 Million; 
	 	 	(d)	 if equipment installation or
      refurbishing/remodeling/minor construction of existing facilities is part
      of this order, All Risk Installation Floater Property Insurance covering
      loss or damage to the Seller's property damage arising out of the installation,
      assembly, or testing of equipment or construction at Buyer's facility; 
	 	 	(e) 	Prior to any delivery of product,
      service or equipment under this order, Seller shall furnish Buyer with certificates
      of insurance evidencing the required insurance, which shall name Buyer as
      an additional insured as regards to paragraphs (a) and (b), and require
      at least thirty (30) days' written notice to Buyer prior to any cancellation,
      nonrenewal or material change in coverage. 

	12. 	RISK OF LOSS: Risk of loss or
      damage to the products shall be on Seller until the products have been delivered
      to and accepted by Buyer notwithstanding any other terms contained herein.
      All products will be received by Buyer subject to its right of inspection
      and rejection which shall occur within 15 days following Delivery. 
	 	 
	13. 	BUYER-FURNISHED MATERIAL: Seller
      shall not use, reproduce, or appropriate for or disclose to anyone other
      than Buyer, any material, tooling, dies, drawings, designs, or other proprietary
      information of Buyer ("Material") nor shall Seller use the same to manufacture
      more products than are required hereunder without Buyer's prior written
      approval. Title to all Material shall remain in Buyer at all times, and.
      where practicable the Material shall be clearly marked or tagged to indicate
      this ownership. Seller shall bear the risk of loss or damage to the Material
      until it is returned to Buyer. All Material, whether or not soiled or used,
      shall be returned to Buyer at termination or completion of this ordered
      unless Buyer shall otherwise direct. This provision shall survive termination
      of this order, the products and to notify Seller of any non-conformance
      with the terms and conditions of the order. Buyer may reject any products
      which do not conform to the terms and conditions of this order. Product
      so rejected may be returned to Seller or held by Buyer at Seller's risk
      and expense. 

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PURCHASE ORDER TERMS AND CONDITIONS

 

  
	14. 	NOTICE OF LABOR DISPUTES: Whenever
      an actual or potential labor dispute is delaying or threatens to delay the
      timely performance of this order, Seller shall immediately give notice thereof,
      including all relevant information with respect thereto, to Buyer, Seller
      shall insert the substances of this paragraph in any subcontract hereunder
      so that each such subcontract shall provide that in the event its timely
      performance is delayed or threatened by delay by any actual or potential
      labor dispute, the subcontractor shall immediately notify Seller of all
      relevant information with respect to such dispute. 
	15. 	TRADEMARKS: Buyer warrants that
      all of the trademarks Buyer requests Seller to affix to the products purchased
      are those owned by Buyer and it is understood Seller shall not acquire or
      claim any rights, title, or interest therein, or sue any such trademarks
      on any products produced for itself or anyone other than Buyer. 
	16. 	REFERENCES TO BUYER: Except to
      the extent required by law, Seller shall make no reference, advertisement,
      or promotion regarding Buyer or Buyer's purchase or use of the goods or
      services covered by this order without prior written consent of Buyer. 
	17. 	USE OF SELLER'S INFORMATION: All
      information disclosed to Buyer in connection with this order is furnished
      as part of the consideration for Buyer's placement of this order. This information
      is not to be treated as confidential or proprietary, and no claim will be
      asserted against Buyer, its assigns, or customers for its disclosure or
      use. 
	18. 	TERMINATION: 

	 	 	(a) 	Buyer may terminate this order,
      in whole or in part, without liability to Buyer, if Buyer anticipates Seller's
      breach of this order and Seller does not provide adequate assurance of its
      performance within ten (10) days of Buyer's request; if deliveries are not
      made at the time or in the quantities specified; or in the event of a breach
      or failure by Seller to meet other terms of this order which remains uncured
      within ten (10) days following Buyer's request. This right shall be in addition
      to any other remedies provided Buyer by law. 
	 	 	(b) 	Buyer may terminate this order,
      in whole or in part, at any time for its convenience by notice to Seller
      in writing. Upon receipt of such notice, Seller shall, to the extent specified
      in such notice, stop work under this order (by itself and permitted subcontractors).
      Seller's sole compensation for such termination shall be payment by Buyer
      of all product property Delivered at time of termination, plus the percentage
      of the total order price corresponding to the proportion of work completed
      in filling the order termination, plus prior to such notice, plus any reasonable
      expenses incurred by Seller in terminating orders and work in progress.
      Such termination claim must be submitted to Buyer within sixty (60) days
      of the date of termination and shall be subject to audit by Buyer. 
	 	 	(c) 	Upon any termination under this
      paragraph, title to all equipment, materials, work-in-progress, finished
      products, plans, drawings, specifications, information, special tooling,
      and any other items for which Seller may submit a claim shall vest in Buyer
      and Seller shall promptly deliver these items to Buyer and take all necessary
      action to protect such property prior to such delivery. The provisions of
      paragraph 5 through 18 and 20 shall survive any expiration or termination
      of this order. 

Page 13 of 14

 

PURCHASE ORDER TERMS AND CONDITIONS

	 	 	(d) 	Buyer shall have the right to
      audit all elements of any termination claim and Seller shall make available
      to Buyer on request all books, records, and papers relating thereto. Buyer
      shall pay all expenses of and associated with such au 

 
	19. 	SETOFF: Any counterclaims against
      Seller or any of its related entities by Buyer or any of its related entities
      which arise out of this or any other transaction may be set off against
      any money due Seller under this order. 
	20. 	ASSIGNMENT; SUBCONTRACTING: Seller
      shall not assign this order or subcontract any material portion of the performance
      of it without Buyer' prior written consent. If any goods are made to Buyer's
      design, all subcontracting by Seller shall be subject to Buyer's prior written
      consent. Seller's right to receive payment under this order may not be assigned
      to any person or entity without Buyer's prior written consent. 
	21. 	CONTROLLING LAW: This order and
      the performance under it shall be controlled and governed by the law of
      the state shown in Buyer's address on the face of this order, and Seller
      hereby submits to the jurisdiction of the courts of that state for purposes
      of resolving any dispute. 
	22. 	GENERAL: All warranties shall
      be construed as conditions as well as warranties. No waiver or a breach
      or of any provision of this order shall constitute a waiver of any other
      breach or provision. No modification or change in, or departure from, or
      waiver of the provisions of this order shall be valid or binding unless
      approved by Buyer and Seller in writing. 

Page 14 of 14

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