This Exhibit contains information of a confidential nature that has been omitted
and filed separately with the Commission. The omitted information is designated
within this Exhibit by use of capital X's, such as $(XXX), X%, or XXXXX.
EXHIBIT 10.16
ODM DISTRIBUTOR AGREEMENT
This AGREEMENT made this 27th day of July 2000, by and between:
Apex Biotechnology Corp.
(hereinafter called Apex) and
2F No 1 Innovation Rd 11
Hsinchu Science - Based Industrial Park
Hsinchu Taiwan ROC
MEDGENESIS INC
5182 West 76th Street
Minneapolis MN 55439 USA
(hereinafter called "MEDGENESIS")
WITNESSETH
WHEREAS Apex is the manufacturer of the product (hereinafter called "THE
PRODUCT"), and desires competent assistance in distribution of THE PRODUCT in
"THE TERRITORY" as described below.
WHEREAS MEDGENESIS represents its capabilities of rendering such assistance;
NOW THEREFORE, in consideration of the cooperation, both parties agree as
follows:
ARTICLE 1: DEFINITIONS
1-1. "THE PRODUCT" shall mean the products, specified in EXHIBIT A attached
hereto and made a part hereof this Agreement, manufactured by Apex
under "Assure" label or under the MEDGENESIS designated private label
and exclusively distributed by MEDGENESIS in THE TERRITORY.
"THE TERRITORY" shall mean and be limited to the United States of
America, Canada, Mexico, and South/Latin America.
"THE TERRITORY" for new products is defined in EXHIBIT B.
ARTICLE 2: APPOINTMENT AND OBLIGATIONS
2-1. Unless otherwise as specified in EXHIBIT B, Apex hereby appoints
MEDGENESIS as a sole and exclusive distributor for sales of THE PRODUCT
in THE TERRITORY under the terms and conditions of this Agreement.
1
<PAGE>
2-2. Apex shall hereinafter during the term of this Agreement refers all
inquiries and business proposals relating to THE PRODUCT from THE
TERRITORY to MEDGENESIS. As soon as advised, MEDGENESIS shall pay
immediate attention to the inquiries as to look for business
establishment.
2-3. MEDGENESIS shall not during the term of this Agreement sell THE PRODUCT
to areas other than THE TERRITORY unless with the written consents of
Apex.
2-4. MEDGENESIS shall do its best to promote, maintain, and increase the
sales of THE PRODUCT in THE TERRITORY, and shall provide Apex with
quarterly reports of update information regarding the sales of THE
PRODUCT, user's reaction, competitor's activities, as well as other
relevant information.
2-5. MEDGENESIS shall apply for all necessary 510K registrations for sales
of THE PRODUCT in THE TERRITORY. In case 510K's for the new products
are applied by Apex, MEDGENESIS should perform the necessary
follow-ups and technical services for its private-labelled products.
ARTICLE 3: PRICE AND PAYMENT
3-1. Apex shall quote MEDGENESIS its most favorable prices in effect at the
time of ordering. Apex most favorable prices in effect as of April
1st, 2000 are set forth on EXHIBIT C.
3-2. In the event of a price change, Apex shall provide MEDGENESIS with
written notice of the revised prices to be effective in sixty (60) days
from the date of which the notice is formally made to MEDGENESIS.
Furthermore, Apex agrees that price increases will not exceed a
percentage rate of five (5) percent during any twelve month period of
time, and justification for this annual increase must be tied to local
Apex inflation rate and/or changes in production componentry.
3-3. Alternatively, Apex agrees that MEDGENESIS will receive a price
decrease in the event that purchased quantities by MEDGENESIS afford
Apex with production efficiencies, which provides a decrease in
production costs.
3-4. Unless otherwise agreed, MEDGENESIS shall open an account with Apex
and wire the payments in 30 days of the invoice date.
3-5. In the event that MEDGENESIS shall fail to fulfill the terms of
payment, Apex may treat such a default as a breach of this entire
Agreement and terminate this Agreement unless MEDGENESIS shall in good
faith
2
<PAGE>
proceed to cure such default. The MEDGENESIS shall not be deemed to
have breached this Agreement if non-payment is related to a failure by
Apex to fulfill any part of "Section 4.3"
ARTICLE 4: PURCHASE AND DELIVERY
4-1. Medgenesis shall submit its firm purchase order in writing sixty (60)
days prior to desired delivery time for Apex confirmation and
preparation of the shipment accordingly.
4-2. Apex shall ship the goods in accordance with the terms as specified
and agreed in the purchase order as acknowledged by MEDGENESIS, and
shall advise in writing details of shipment as soon as shipment
effected.
4-3. After receipt of the shipment, MEDGENESIS may reject or return any of
the aforementioned PRODUCT which fails to be in salable condition or
which customers return due to the PRODUCT not meeting MEDGENESIS's
and/or Apex performance standards. It is expected that THE PRODUCT
shall meet or exceed those performance standards which have been
specified in the 510K registration with the FDA. MEDGENESIS will notify
Apex of problems within 30 days of receipt that the product does not
meet standards.
MEDGENESIS will send Apex notice of the lot, or serial numbers of the
rejected or returned PRODUCT, together with an indication of the
specified basis for rejection. Promptly after receiving any such notice
of rejection, Apex shall have the rejected PRODUCT to be inspected,
and once the cause of the rejection is recognised, Apex shall respond
and issue in ten (10) days a written statement that details their
contested position regarding the rejection, with authorization that
MEDGENESIS shall return to Apex, at Apex expense, any properly
rejected PRODUCT. MEDGENESIS shall not be required to pay Apex for
such rejected PRODUCT, however, agrees to accept either a replacement
shipment or refund of the same dollar amount of the rejected PRODUCT
with or from subsequent shipments or payments to Apex.
ARTICLE 5: QUALITY AND WARRANTY
5-1. Apex shall manufacture THE PRODUCT in compliance with specification as
set forth in EXHIBIT A or with that as may be required by MEDGENESIS
and agreed upon by Apex itself, and shall warrant THE PRODUCT free
from defects in workmanship and materials at the time of shipment.
Apex warrants that operation manuals, log books and printings on kit
cases shall be in proper English and accurately describe the correct
operation of THE PRODUCT, subject to review by MEDGENESIS.
3
<PAGE>
5-2. Apex shall subsequently provide four (4) year warranty unless
otherwise specified for quality in normal operation of THE PRODUCT from
that the date shipment is made, for which Apex shall be responsible
for providing replacement, or repair for the defective parts and
materials as informed by MEDGENESIS in writing.
5-3. Apex agrees to indemnify, defend and hold harmless MEDGENESIS, its
successors, subcontractors, agents, employees, officers and directors,
from and against any and all claims, costs, demands liabilities,
losses, damages (including consequential damages) and expenses of
whatever nature, including reasonable attorney's fees (collectively
"Losses") arising out of or due to a failure of THE PRODUCT
manufactured by Apex to conform to the Specifications; provided,
however, that such indemnification shall not apply to the extent the
Losses are due to MEDGENESIS negligence or intentional misconduct.
5-4. Apex warrants that it has all rights, title and interest in all
Patents relating to THE PRODUCT, and agrees to indemnify, defends, and
hold harmless the MEDGENESIS, its successors, agents, employees,
officers, and directors from and against any and all claims, costs,
demands, liabilities, losses, damages, (including consequential
damages) and expenses of whatever nature, including reasonable
attorney's fees, arising out of or in any way related to a claim that
the technical design of THE PRODUCT infringes upon or violates the
patent, trade secret or other rights of any third party.
ARTICLE 6: TRADEMARKS AND CONFIDENTIALITY
6-1. Trademarks and trade names of THE PRODUCT designated and used by
MEDGENESIS shall remain the property of MEDGENESIS.
6-2. This Agreement does not transfer or license any technical know-how
and/or intellectual property rights (e.g., patents, trade secrets of
trademarks) from one party to the other.
6-3. MEDGENESIS and Apex shall treat all technical and business information
as confidential, and shall not disclose such information to any third
parties, or utilize as for any purpose, unless with the consents of
Apex or MEDGENESIS either before or after the termination of this
Agreement. "Confidential Information" shall mean any confidential
information or trade secrets disclosed to the other party and
designated confidential in writing. Items of information that are not
written or physical, such as, but not limited to disclosed orally, by
demonstration, or by observation, shall be designated as confidential
at the time of disclosure. All topics considered confidential shall be
so stamped.
4
<PAGE>
6-4. The obligations imposed by Section 6-3 shall not apply with respect to
Any CONFIDENTIAL INFORMATION or part thereof which is in the public
domain at the time of disclosure, which is known to the recipient at
the time of disclosure, which becomes known to the recipient from a
source other than the party disclosing the CONFIDENTIAL INFORMATION
without breach of this Agreement by the recipient and provided that
such source is not known by the recipient to be bound by a
confidentiality agreement with the party disclosing the Confidential
Information, or which is developed by the recipient independently of
the disclosing party's CONFIDENTIAL INFORMATION.
6-5. In case of action against such confidentiality breach, MEDGENESIS or
Apex shall indemnify the afflicted party from potential damage or loss
(including reasonable attorney's fees which may arise).
ARTICLE 7: DURATION
7-1. This Agreement shall be valid for three (3) years effective from the
execution dated herein stated before.
7-2. After the first twelve month period of distribution, the targeted
quantities for the second twelve month period of time will be proposed
by the MEDGENESIS for mutual agreement ninety (90) days before the end
of the calendar year and acknowledged in writing by Apex.
AERTICLE 8: TERMINATION
8-1. Both parties shall hereto have the right to terminate this Agreement by
written notice to the other if the other party commits or suffers any
act of bankruptcy or insolvency; or fails in performance of the
Agreement and does not to cure any breach within ninety (90) days after
receipt of written notice of such by the other party.
8-2. Upon termination of this Agreement, MEDGENESIS shall be liable to
settle any outstanding payment due on the date of termination, and as
may be requested shall immediately return at its own cost all
information received from Apex. However, Apex will at the request of
MEDGENESIS agrees to still supply MEDGENESIS with the quantities of
SENSOR ELECTRODES requested by MEDGENESIS for one year providing that
the MEDGENESIS makes a formal announcement of its discontinuation of
this product line when termination is effected. Apex agrees to provide
the MEDGENESIS with the same prices which it will supply to the new
distributor, and the MEDGENESIS agrees not to lower the selling prices
as executed during the prior year.
5
<PAGE>
ARTICLE 9: ASSIGNMENT
9-1. Any rights or obligation under this Agreement shall be not assignable
or transferable by any party unless with prior written consents of the
other party.
ARTICLE 10: FORCE MAJEURE
10-1. Neither party shall be responsible for the failure or delay in
performance of any of its obligations hereunder due to force majeure
such as war, insurrection, strikes, acts of God, governmental action,
or any other contingency beyond control.
ARTICLE 11: APPLICABLE LAWS
11-1. This Agreement shall be governed by and pursuant to the laws of the
[XXX].
ARTICLE 12: OTHER CONDITIONS
12-1. This Agreement shall be effected and interpreted with the plain meaning
of English language.
12-2. All expressions of intention and notices of both parties shall be made
in English in written form.
12-3. The addresses first above referred to shall be the registered addresses
of respective offices of both parties; any change of such address shall
be notified to the other in writing.
12-4. Any matters not sufficiently provided herein shall be subject to a
revision by both parties in writing to be attached hereto and made a
part hereof this Agreement.
ARTICLE 13: ENTIRE AGREEMENT
This Agreement represents the entire understanding, as of the effective date
hereof, between the parties with respect to the subject matter hereof and shall
supersede all previous agreements, negotiations, understandings,
representations, statements, and writings between the parties relating thereto,
and shall be controlling over terms and conditions contained in any purchase
order, acknowledgment form or any attachment thereto or any other document
issued by the parties which are in conflict with this Agreement.
6
<PAGE>
No modification, alteration, waiver, or change in any of the terms of this
Agreement shall be valid or binding upon the parties hereto unless made in
writing and duly agreed and signed by both parties hereto.
IN WITNESS WHEREOF, the parties have made this Agreement in duplicate,
of which each party shall hold one copy to be deemed as an original as of the
day and year first above written.
Apex Biotechnology Corp. MEDGENESIS INC
/s/ Thomas Shen /s/ John A. Murray
----------------------------------- -----------------------------------
By: Thomas Shen By: John A. Murray
Title: President & CEO Title: Senior Vice President & COO
Date: August 21, 2000 Date: September 7, 2000
7
<PAGE>
EXHIBIT A
Attached to the ODM DISTRIBUTOR AGREEMENT
between
Apex
and
MEDGENESIS INC
---------------------------------
THE SPECIFICATIONS OF THE PRODUCT
---------------------------------
METER: Assure Blood Glucose Monitor
TEST STRIPS: Assure Test Strips
TEST RANGE: [XXX] mg/dL ([XXX] mmol/L)
BLOOD SOURCE: Capillary whole blood
DISPLAY TYPE: Liquid Crystal Display (LCD) Touch Screen
MEMORY: [XXX] with date & time
DIMENSION: [XXX] (mm)
WEIGHT: [XXX] gms (with battery)
POWER SUPPLY: One J-size battery
OPERATING TEMPERATURE: [XXX] C ([XXX] F).
RELATIVE HUMIDITY: Less than [XXX]%
HEMATOCRIT RANGE: [XXX]%
[XXX] new products as listed below are being evaluated by MEDGENESIS. An
addendum will be attached and made a part of this Agreement once the business
proposal is reviewed and finalised.
- SENSOREX II BLOOD GLUCOSE MONITOR (private label to be discussed)
- SENSOREX III BL OOD GLUCOSE MONITOR (private label to be discussed)
- CAPILLARY GAP TEST STRIPS (private label to be discussed)
8
<PAGE>
EXHIBIT B
Attached to the ODM DISTRIBUTOR AGREEMENT
between
Apex
and
MEDGENESIS INC
---------------------------------------------
UNDERSTANDINGS OF APPOINTMENT AND OBLIGATIONS
---------------------------------------------
1. MEDGENESIS holds exculsive rights of distribution of the existing
Assure System (meter and test strip) in THE TERRITORY.
2. MEDGENESIS understands Apex on-going business negotiations with new
accounts for distribution of Apex new products as listed in EXHIBIT
A, and agrees with Apex doing so in terms of non-compatibility of the
system between MEDGENESIS and the new accounts. In the Long Term Care
area of US market, Apex agrees not to appoint any other distributors
than MEDGENESIS and Medline.
3. MEDGENESIS intends to sell THE PRODUCT in the following countires other
than the United States. Apex agrees in terms of availability of the
non-compatible system designed for the new products. An addendum will
be attached to this Agreement, if other countries may be discussed and
agreed to be added. This arrangement is made on non-exclusive basis.
CANADA UK EGYPT
MEXICO FRANCE TURKEY
VENEZUELA ITALY SINGAPORE
COLOMBIA MALAYSIA
ARGENTINA AUSTRALIA
BRASIL
CHILE
9
<PAGE>
EXHIBIT C
Attached to the ODM DISTRIBUTOR AGREEMENT
between
Apex
and
MEDGENESIS INC
------------------------------------------------------------
THE PRICES OF THE ASSURE BIOSENSOR GLUCOSE MONITORING SYSTEM
------------------------------------------------------------
ITEM DESCRIPTION UNIT PRICE (FOB)
---------------------------------------------------------------------
1. Assure Basic US$[XXX]
2. Assure Meter Kit US$[XXX]
3. Assure 50's Test Strips US$[XXX]
4. Assure 25's Test Strips US$[XXX]
5. Assure 100's Test Strips US$[XXX]
6. Assure Control Solution (L 1 & L2) US$[XXX]
7. Assure Control Solution (L1) US$[XXX]
8. Assure Check Strip US$[XXX]
9. Assure Diabetes Management Software US$[XXX]
REMARKS:
1. This quotation is part of the EXCLUSIVE DISTRIBUTOR AGREEMENT. The
price will not be valid if not attached to the conditions and terms of
the Agreement.
2. Free test strips will be offered in following quantity schedules
(monthly purchase).
[XXX]% upon current purchase quantity
[XXX]% upon [XXX]M strips and above
[XXX]% upon [XXX]M strips and above (combined with capillary gap
strips).
3. Normal delivery lead time is about 8 weeks from the receipt of
confirmed order. A yearly delivery schedule should be proposed by
MEDGENESIS.
4. All payments are in 30 DAYS OF THE INVOICE DATE.
5. Reference prices for new products as listed in EXHIBIT A.
a) Sensorex II Blood Glucose System
- Basic: US$[XXX]
- Meter Kit: US$[XXX]
b) Sensorex III Blood Glucose System: Within [XXX]% increase of
existing Assure.
c) Capillary Gap Test Strips: US$[XXX].
6. This quotation is valid for the first agreement year, and can be
reviewed upon the second and third years of this Agreement.
10
<PAGE>
ODM DISTRIBUTOR AGREEMENT
ADDENDUM
This ADDENDUM is made this 21st day of August 2000 to the ODM Distributor
Agreement, by and between:
Apex Biotechnology Corp.
(hereinafter called Apex) and
MEDGENESIS INC
5182 West 76th Street
Minneapolis MN 55439 USA
(hereinafter called "MEDGENESIS")
Apex Biotechnology Corp. MEDGENESIS INC
/s/ Thomas Shen /s/ John A. Murray
----------------------------------- -----------------------------------
By: Thomas Shen By: John A. Murray
Title: President & CEO Title: Senior Vice President & COO
Date: August 21, 2000 Date: September 7, 2000
1
<PAGE>
EXHIBIT A
Attached to the ODM DISTRIBUTOR AGREEMENT
between
[XXX]
and
MEDGENESIS INC
---------------------------------
THE SPECIFICATIONS OF THE PRODUCT
---------------------------------
(A) ASSURE I GLUCOSE SYSTEM
METER: Assure Blood Glucose Monitor
TEST STRIPS: Assure Test Strips
TEST RANGE: [XXX] mg/dL ([XXX] mmol/L)
BLOOD SOURCE: Capillary whole blood
DISPLAY TYPE: Liquid Crystal Display (LCD) Touch Screen
MEMORY: [XXX] with date & time
DIMENSION: [XXX] (mm)
WEIGHT: [XXX] gms (with battery)
POWER SUPPLY: One J-size battery
OPERATING TEMPERATURE: [XXX]C ([XXX] F).
RELATIVE HUMIDITY: Less than [XXX]%
HEMATOCRIT RANGE: [XXX]%
(B) ASSURE II GLUCOSE SYSTEM
METER: Assure II Blood Glucose Monitor
TEST STRIPS: Assure II TOUCH-IN Test Strips
TEST RANGE: [XXX] mg/dL ([XXX] mmol/L)
BLOOD SOURCE: Capillary whole blood
DISPLAY TYPE: Large LCD screen
MEMORY: [XXX] blood glucose test result
DIMENSION: [XXX] (mm) **
WEIGHT: [XXX]g **
POWER SUPPLY: 1 x 3V Lithium coin cell battery
OPERATING TEMPERATURE: [XXX]C ([XXX] F).
RELATIVE HUMIDITY: Less than [XXX]%
HEMATOCRIT RANGE: [XXX]%
(C) ASSURE III GLUCOSE SYSTEM
METER: Assure III Blood Glucose Monitor
TEST STRIPS: Assure II TOUCH-IN Test Strips
TEST RANGE: [XXX] mg/dL ([XXX] mmol/L)
BLOOD SOURCE: Capillary whole blood
DISPLAY TYPE: Large LCD display
MEMORY: [XXX] with date & time
DIMENSION: [XXX] (mm) **
WEIGHT: [XXX] gms **
POWER SUPPLY: 2 x 3V Lithium batteries (coin cell)
OPERATING TEMPERATURE: [XXX] C ([XXX] F).
RELATIVE HUMIDITY: Less than [XXX]%
HEMATOCRIT RANGE: [XXX]%
** DIMENSION AND WEIGHT OF ASSURE II & III METERS MAY CHANGE DUE TO
DESIGN CHANGE.
2
<PAGE>
EXHIBIT C
Attached to the ODM DISTRIBUTOR AGREEMENT
between
Apex
and
MEDGENESIS INC
------------------------------------------------------------
THE PRICES OF THE ASSURE BIOSENSOR GLUCOSE MONITORING SYSTEM
------------------------------------------------------------
ITEM DESCRIPTION UNIT PRICE (FOB)
---------------------------------------------------------------------
1. Assure Basic US$[XXX]
2. Assure Meter Kit US$[XXX]
3. Assure 50's Test Strips US$[XXX]
4. Assure 25's Test Strips US$[XXX]
5. Assure 100's Test Strips US$[XXX]
6. Assure II Basic US$[XXX]
7. Assure II Meter Kit US$[XXX]
8. Assure III Basic US$[XXX]
9. Assure III Meter Kit US$[XXX]
10. Assure II 50's Touch-In Test Strips US$[XXX]
11. Assure II 25's Touch-In Test Strips US$[XXX]
12. Assure II 100's Touch-In Test Strips US$[XXX]
13. Assure Control Solution (L 1 & L2) US$[XXX]
14. Assure Control Solution (L1) US$[XXX]
15. Assure Check Strip US$[XXX]
16. Assure Diabetes Management Software US$[XXX]
REMARKS:
1. This quotation is part of the EXCLUSIVE DISTRIBUTOR AGREEMENT. The
price will not be valid if not attached to the conditions and terms of
the Agreement.
2. Free test strips will be offered in following quantity schedules
(monthly purchase).
[XXX]% upon current purchase quantity
[XXX]% upon [XXX]M strips and above
[XXX]% upon [XXX]M strips and above (combined with capillary gap
strips).
3. Normal delivery lead time is about 8 weeks from the receipt of
confirmed order. A yearly delivery schedule should be proposed by
MEDGENESIS.
4. All payments are in 30 DAYS OF THE INVOICE DATE.
5. This quotation is valid for the first agreement year, and can be
reviewed upon the second and third years of this Agreement.
3
