SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K/A
(Amendment No. 1)
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 26, 1996
Specialized Health Products International, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-26694 93-0945003
(Commission file number) (IRS employer identification
no.)
655 East Medical Drive, 84010
Bountiful, Utah
(Address of principal executive (Zip code)
offices)
(801) 298-3360
(Registrant's telephone number, including area code)
This document contains a total of 19 pages.
<PAGE>
Item 5. Other Events.
On or about August 26, 1996, Specialized Health Products
International, Inc. (the "Company") entered into an exclusive
distribution agreement (the "Agreement") with Becton, Dickinson
and Company ("BD") relating to the Company's Safety Cradle sharps
container products (the "Products"). The Agreement grants BD an
exclusive world-wide right to market and distribute the Products
for an initial term of three years, which term may be extended by
BD annually thereafter. The first sales pursuant to the
Agreement are expected to occur in the fourth quarter of 1996,
after the Company has made several modifications to the Products,
which modifications are required by the Agreement. The Company
does not expect substantial sales of the Products prior to such
time.
The Products may be sold, at BD's option, either under the
Company's name or under BD's label. The Products will, however,
be imprinted with the Company's name. The sales price of the
Products to BD under the Agreement can be adjusted under certain
circumstances for changes in the initial term of the Agreement.
The Company is not required to distribute its future, unrelated
products through BD.
The Agreement presents certain additional risks to the
Company. These include, among other things (i) reliance for sale
of the Products on BD, and therefore reliance on BD's marketing
ability, marketing plans and credit-worthiness; (ii) if the
Products are marketed under BD's label, goodwill associated with
the Products may inure to the benefit of BD rather than the
Company; (iii) the Company has only limited protection from
changes in manufacturing costs (other than raw materials costs)
during the initial term of the Agreement; (iv) if the Company is
reliant on BD for all or substantially all of its sales, the
Company may be restricted in its ability to effectively negotiate
with BD for renewal of the Agreement.
The Company believes that sales of the Products will
increase substantially during the next year. If sales do not
increase substantially, the Company will need to raise additional
funds through public or private financings. No assurance can be
given that additional financing will be available or that, if
available, it will be available on terms favorable to the Company
or its stockholders. If adequate funds are not available to
satisfy short-term or long-term capital requirements, the Company
may be required to reduce substantially, or eliminate certain
areas of its product development activities, limit its operations
significantly, or otherwise modify its business strategy.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
a. Financial Statements of Businesses Acquired.
Not applicable.
b. Pro Forma Financial Information.
Not applicable.
c. Exhibits.
Number Description
10.1 Distribution Agreement, dated August 26, 1996, by and
among Specialized Health Products International, Inc.
and Becton Dickinson and Company (certain portions of
the agreement were omitted from the exhibit pursuant to
a request for confidential treatment).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
SPECIALIZED HEALTH PRODUCTS
INTERNATIONAL, INC.
Date: October 1, 1996 By /s/ David A. Robinson
David A. Robinson
President, Chief Executive
Officer and Director
<PAGE>
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT is made as of the 26th day
of August, 1996, by and between Specialized Health Products,
Inc., a Utah corporation with its principal office at 655
East Medical Drive, Bountiful, Utah 84010 (hereinafter the
"Supplier"), and Becton, Dickinson and Company, a New Jersey
corporation with its principal office at 1 Becton Drive,
Franklin Lakes, New Jersey 07417 (hereinafter the
"Distributor"), through its Becton Dickinson Division (the
"Division").
W I T N E S S E T H:
WHEREAS, the Distributor is in the business of selling
a variety of disposable medical devices, including the sale
of sharps collectors; and
WHEREAS, the Supplier develops and sells sharps
collectors, specifically its Safety Cradler sharps collector
line of products, which are presently manufactured on behalf
of the Supplier by a subcontractor; and
WHEREAS, Distributor desires to become the distributor
of the Supplier's aforementioned products;
NOW, THEREFORE, in consideration of the mutual
covenants and agreements hereinafter set forth, and for
other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT:
1.1 Subject to the limitations set forth herein, the
Supplier hereby grants to the Distributor the exclusive,
world-wide right to market and distribute the products
listed in Schedule A attached hereto, any improvements to
such products, and any new sharps collector products
developed by the Supplier incorporating the cradle mechanism
or any new sharps collector products jointly developed by
the Supplier and the Distributor (the foregoing being
referred to herein collectively as the "Products"). The
Distributor shall be entitled to market and sell the
Products under its own name and trademarks and may, at its
option, also market and sell the Products under Supplier's
Safety Cradler trademark. The Distributor shall be entitled
to market and sell the Products for any use, including as a
transporter or for recycling, through the Division, or
through any other division, subsidiary or affiliate of
Distributor, in and through all markets and channels,
including without limitation, home health care, retail,
physicians' offices, pharmacies and hospitals.
<PAGE>
1.2 During the term of this Agreement, Supplier shall
not (i) make any sale of any Products to any customers, (ii)
appoint any other distributor, dealer or agent to sell any
Products or (iii) sell any other sharps collector product
which is competitive with the Products in any market or
channel. Nothing contained herein shall be construed as
limiting the right of the Distributor to sell any products
which are competitive with the Products.
2.0 DISTRIBUTOR'S ACTIVITIES AND RESPONSIBILITIES:
The Distributor agrees:
2.1 To use reasonable commercial efforts to promote
the sale of the Products, provided, that Distributor shall
not be obligated to promote the sale of any Products in any
market or channel if Distributor reasonably determines there
is not a substantial and sustainable demand for Products in
such market or channel. Distributor shall maintain at all
times a sales and office force and inventory stock adequate
to meet market needs.
2.2 Except as provided herein, to assume all costs and
expenses which it incurs in fulfilling its obligations under
this Agreement.
2.3 That payment for Products shall be made by
Distributor to the Supplier at the prices determined in
accordance with the provisions of this Agreement, in United
States dollars at any banking institution in the United
States designated by the Supplier. Said payments shall be
made within thirty (30) days following the date indicated on
the Supplier's invoice, which shall coincide with the date
of shipment.
2.4 Not to alter, remove, obscure or otherwise
interfere with or add to any markings or other indications,
whether of the source of origin of Products or otherwise,
which may have been affixed to Products at the time they
were sent to Distributor to the extent any such interference
is prohibited by applicable law.
2.5 That, except as otherwise provided herein, no
rights of any nature are granted to Distributor pursuant to
this Agreement to manufacture any Products.
2.6 To comply with all laws, rules and regulations for
the importation, handling, storage and sale of Products.
Distributor shall assign lot numbers to Products for easy
traceability to supply Products to the Supplier when the
latter so requires.
2.7 To promptly notify the Supplier of any complaint
made by any customer with respect to Products after the
Distributor receives or becomes aware of such complaint.
Distributor shall include in its complaint report to the
Supplier such data as may be reasonably requested by the
Supplier. The Distributor shall also promptly notify the
Supplier of any inspection initiated by any regulatory
agency after the Distributor is notified or becomes aware of
same.
<PAGE>
3.0 SUPPLIER'S ACTIVITIES AND RESPONSIBILITIES:
The Supplier hereby agrees:
3.1 To sell to Distributor the Products ordered by the
Distributor at the prices determined in accordance with this
Agreement, to use reasonable efforts to promptly fill all
such orders for Products and to produce, label and package
all Products ordered by Distributor in accordance with the
specifications attached hereto as Schedule B or as may be
otherwise agreed to by the parties; provided, that the
Supplier shall have no responsibility to Distributor by
reason of any delay or failure to deliver caused by transit
accidents, strikes, acts of God, severe weather, or other
events beyond the control of Supplier.
3.2 To provide such marketing and sales training and
support for sales personnel of Distributor in connection
with the promotion and sale of Products as Distributor may
reasonably request.
3.3 That each site used for the manufacturing of
Products by the Supplier or any subcontractor engaged by
Supplier is ISO-9002 certified, and that the ISO-9002
certification for such sites will be maintained at all times
during the term of this Agreement. Supplier shall cause its
subcontractors to provide Distributor access to any such
site for the purpose of auditing the site for compliance
with the requirements for continued ISO-9002 certification
and applicable law.
3.4 That Supplier shall cause any subcontractor
engaged by Supplier to register with the FDA each site used
for the manufacturing of Product and to maintain such
registration throughout the term of this Agreement.
3.5 To provide the Distributor with all current
customer lists, sales records and any other relevant
information to enable the transfer of Supplier's current
sales base for the Products to the Distributor.
3.6 That the Supplier shall, and shall cause its
subcontractors to, establish as soon as reasonably
practicable but not later than November 30, 1996, and once
established, to maintain throughout the term of this
Agreement, quality systems with respect to the Products
which comply with the Distributor's Supplier Quality
Management Program and with FDA Good Manufacturing Practices
(GMPs). Supplier shall, and shall cause its subcontractors
to, provide Distributor access to each of its sites which is
used for the design or manufacturing of Products for the
purpose of monitoring compliance with this Section 3.6.
Supplier shall also promptly notify Distributor of any
inspection initiated by the FDA or other regulatory agency
of any such site once Supplier is notified or becomes aware
of same.
3.7 To cooperate with Distributor in monitoring
quality control with respect to the Products, and to
implement, at Supplier's expense, any quality control
measures which Distributor may reasonably request with
respect to the Products. Supplier acknowledges and agrees
<PAGE>
that the implementation of any such measures requested by
Distributor shall not relieve the Supplier of any of its
obligations hereunder or in any way prejudice any of the
Distributor's rights hereunder.
4.0 INTERIM MANUFACTURING PERIOD; SUBSTITUTE MANUFACTURER:
4.1 Supplier acknowledges and agrees that Supplier
does not presently engage a subcontractor for the
manufacturing of the Product which maintains quality systems
consistent with Distributor's Supplier Quality Management
Program or FDA GMPs as required to be established and
maintained pursuant to Section 3.6. During the period prior
to the establishment of such systems by Supplier's
subcontractor (the "Interim Period"), any such subcontractor
shall be treated for purposes of this Agreement as a
component manufacturer with respect to the Products, and in
accordance therewith, all products ordered by Distributor
during the Interim Period shall be shipped to Distributor in
bulk in accordance with the specifications set forth in
Schedule B.
4.2 The parties hereto agree that in the event (i)
Supplier shall fail to consistently deliver Products to
Distributor in a timely manner in accordance with the terms
of this Agreement or (ii) any subcontractor engaged by
Supplier shall fail to establish and maintain the quality
systems required under Section 3.6 of this Agreement, the
Distributor, in addition to any rights to terminate or
otherwise that the Distributor may have under this Agreement
or applicable law, shall have the right to designate a
substitute manufacturer for the Products (which substitute
manufacturer may be the Distributor), and that upon notice
of such designation, Supplier shall direct all subsequent
orders for the manufacturing of Products to the substitute
manufacturer. Upon the designation of a substitute
manufacturer, the parties shall make such adjustments to the
prices for the Products as the parties may mutually agree
are warranted as a result of the change in manufacturer.
5.0 PRICE; QUANTITY; DELIVERY:
5.1 (a) Subject to subsections 5.1(b) and 5.1(c)
below, during the Initial Term, the Distributor agrees to
purchase the Products, and the Supplier agrees to sell to
Distributor the Products, at the prices specified in the
price list set forth in Schedule A hereto. The prices for
any Products not initially set forth on Schedule A but which
subsequently become subject to this Agreement shall be
mutually agreed upon by the parties hereto and set forth on
an amendment to such Schedule A.
(b) The Supplier may increase the prices for the
Products, upon not less than sixty (60) days prior written
notice to Distributor, by the amount Supplier's cost for
Products as of the date of this Agreement shall increase as
a result of increases beyond the Supplier's or its
subcontractors' control in the cost of resin used in the
manufacturing of the Products; provided, that the Supplier
may increase the prices for the Products only once during
any twelve (12) consecutive month period. Supplier shall
provide the Distributor with such evidence of any increase
in Supplier's unit cost as the Distributor may reasonably
request.
<PAGE>
(c) The price to be paid by the Distributor for
any Product pursuant to subsections 5.1(a) or 5.1(b) shall
be reduced by (i) the amount the Supplier's unit cost for
such Product as of the date of this Agreement is reduced as
a result of actions taken or efforts made by or on behalf of
the Distributor, including without limitation, any
manufacturing efficiencies identified by the Distributor or
any reduction in the cost of raw materials used in the
manufacturing of the Products which is secured through
Distributor's efforts, and (ii) during the Interim Period,
by all additional reasonable costs incurred by or on behalf
of the Distributor in shipping, storing, inspecting and
packaging the Products during such Interim Period as a
result of Supplier's subcontractor being treated as a
component manufacturer with respect to the Products.
5.2 (a) In order to maintain its exclusive
distribution right under this Agreement, the Distributor
shall purchase not less than ** units of Products (the
"First Year Minimum") during the first year
that this Agreement shall be in effect. The Distributor
shall submit to Supplier, prior to the beginning of the
second year of this Agreement and every six months
thereafter during the term of this Agreement, a forecast of
its estimated requirements for Products for the following
(i) six month period (the "Six Month Forecast") and (ii)
twelve month period. In order to maintain its exclusive
distribution right under this Agreement, the Distributor
shall purchase, during the six month period to which the Six
Month Forecast relates, a minimum of fifty percent (50%) of
the amount set forth in the Six Month Forecast.
(b) In the event the Distributor shall fail to
meet the First Year Minimum or any six month minimum
purchase requirement under subsection 5.2(a) and such
failure is not cured by the Distributor as provided below,
the Supplier may terminate this Agreement, in which event,
the Distributor shall have no further liability or
obligations to Supplier. The Supplier may only terminate
this Agreement pursuant to this subsection 5.2(b) by giving
written notice to the Distributor not later than the tenth
day following the end of the first year of this Agreement or
such six month period, as applicable; provided, that the
Distributor shall have the right during the sixty (60) day
period immediately following the receipt of such notice to
cure its failure to meet the applicable minimum purchase
requirement. During such sixty (60) day period, the parties
shall continue to be bound by the terms of this Agreement.
5.3 All Products ordered by the Distributor shall be
delivered by the Supplier to the place of delivery, and by
the mode of transportation, specified in the Distributor's
purchase order. All deliveries shall be F.O.B. plant of
manufacture, with all costs, including, but not limited to,
insurance and freight, to be the sole and absolute
responsibility of Distributor. Except during the Interim
Period, the Distributor assumes all responsibility for, and
risk of loss of or damage to, the Products from the time of
shipment.
** The "**" marks the location of information that has been
omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.
<PAGE>
6.0 WARRANTIES; INDEMNIFICATION:
6.1 The Supplier represents and warrants to
Distributor that all Products delivered to the Distributor
hereunder shall conform in all material respects to the
specifications for such Products attached hereto as Schedule
B or subsequently agreed to by the parties hereto, shall be
free from material defects in materials and workmanship and
shall comply with applicable regulatory agency requirements.
Such warranty shall extend to Distributor's customers. Any
Product determined by the Distributor to be defective shall
be replaced where located at the Supplier's expense, and
Supplier shall also reimburse the Distributor for all costs
incurred by the Distributor in connection with the
replacement of such Product. THIS WARRANTY IS EXCLUSIVE
REGARDING SUCH PRODUCTS AND IN LIEU OF OTHER WARRANTIES
EXPRESSED, IMPLIED OR STATUTORY, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. The Supplier shall defend and indemnify the
Distributor from and against all third party claims arising
out of or related to any breach of this warranty. Supplier
shall, at its expense, take any measures which may be
reasonably required to prevent the recurrence of any defects
in the Products.
6.2 The Supplier shall be liable for and defend and
indemnify the Distributor against any loss or damage
incurred or suffered by Distributor as a result of or in
connection with any claim or action relating to (i) the
infringement or alleged infringement on the rights of any
third party with respect to the Products or any part thereof
and (ii) any personal injury caused or alleged to have been
caused by any design or manufacturing defect relating to the
Products. The Supplier represents and warrants to the
Distributor that, to the Supplier's knowledge, there are no
rights owned or possessed by any third party that could be
asserted to prevent the Distributor from selling Products
pursuant to this Agreement.
6.3 Notwithstanding anything contained herein to the
contrary, the Supplier shall in no event be liable for any
indirect, special or consequential damages whatsoever,
including but not limited to loss of profits.
6.4 In selling Products, Distributor shall not make
any promises, representations, warranties or guarantees with
respect thereto, except those consistent with the provisions
of this Agreement. The Distributor shall defend and
indemnify the Supplier from and against all third party
claims arising out of or related to any breach of this
covenant by the Distributor.
6.5 The representations, warranties and covenants of
the Supplier and the Distributor set forth in this Section 6
shall survive the expiration or termination of this
Agreement.
<PAGE>
7.0 TERM AND TERMINATION:
7.1 (a) This Agreement shall be effective from the
date hereof and for a period of three (3) years thereafter
(the "Initial Term"), unless otherwise terminated by either
party pursuant to the provisions hereof. The Distributor
shall have the right to extend the Initial Term of this
Agreement for successive one-year periods by giving written
notice of such election not later than thirty (30) days
prior to the expiration of the Initial Term or renewal term,
as the case may be. Upon receipt of such notice, the
parties shall commence good faith negotiations regarding the
prices to be paid for the Products during the renewal term.
In the event the parties fail to reach an agreement as to
such prices by the end of the Initial Term or any renewal
term, as the case may be, the prices to be paid for Products
during the renewal term by the Distributor shall be the
prices paid in the immediately preceding year (the "Prior
Year") of the Agreement, adjusted by an amount equal to the
aggregate percentage change during the Prior Year in the
appropriate Producer Price Index (the "Index") published by
the United States Department of Labor. In computing any
such adjustment, the prices paid during the Prior Year shall
be multiplied by a fraction, the numerator of which shall be
the Index most recently available as of the date of such
computation and the denominator of which shall be the Index
most recently available at the beginning of the Prior Year.
(b) Either party may, without prejudice to any
other rights such party may have at law or equity, terminate
this Agreement at any time upon written notice to the other
party upon the happening of any of the following events:
(i) the other party breaches any covenant or
agreement set forth herein and fails to cure such breach
within thirty (30) days after written notice of such breach;
or
(ii) the suspension, liquidation, dissolution or
bulk sale, or notice thereof, of the other party's business,
an assignment by the other party for the benefit of
creditors, the insolvency of any kind of the other party; or
any filing of a voluntary or involuntary petition under the
provisions of federal or state bankruptcy or insolvency laws
with respect to the other party, or any application for or
application for or appointment of a receiver for the
property of other party.
In addition to the foregoing, the Distributor shall have the
right to terminate this Agreement in the event any of the
conditions set forth in Section 10 hereof are not satisfied
or waived by the Distributor on or before October 1, 1996.
7.2 Upon expiration or termination of this Agreement
for any reason, the parties shall have no further
obligations to each other under this Agreement except (i)
obligations to deliver or make payment for Products ordered
by the Distributor prior to such termination, (ii)
obligations arising from any breach of this Agreement prior
to expiration or termination, and (iii) as otherwise
provided herein. Upon the expiration or termination of this
Agreement for any reason, Supplier or its nominee shall have
the option of purchasing all or any portion of the Products
which are held by Distributor on the date of expiration or
termination and which are in good condition, not obsolete
<PAGE>
and marketable to usual customers. This option shall be
exercisable by Supplier giving Distributor, within ten (10)
days after the termination date, written notice of its
intent to purchase. The purchase price for such Products
shall be the original price paid for such Products by the
Distributor (excluding for this purpose any reductions in
price pursuant to subsection 5.1(c)(ii) during the Interim
Period). All costs and expenses and risk of loss related to
the delivery of such Products to Supplier shall be borne by
the Supplier. Saleable goods in inventory not sold to
Supplier may be sold by Distributor after the date of
termination or expiration.
8.0 NO AGENCY:
The parties hereto agree that Distributor, including
for all purposes herein, its employees, officers, agents and
representatives, is neither an agent nor an employee of the
Supplier and that all activities of the Distributor pursuant
to this Agreement shall be as an independent contractor.
Neither party shall represent itself to be, or otherwise
conduct itself as, an agent of the other party.
9.0 TRADEMARKS AND TRADE NAMES:
Except as otherwise provided herein, neither party
hereto shall have any right, title or interest in or to the
use of any name, trademark, service mark or symbol owned or
controlled by, or now or hereafter owned or controlled by,
the other party or any affiliate thereof. Each party agrees
that it will not anywhere or any time or for any reason
apply for or seek to effect registration as owner of any
such names, trademarks, service marks or symbols of the
other party.
10.0 CONDITIONS TO DISTRIBUTOR'S OBLIGATIONS:
It shall be a condition to the Distributor's
obligations hereunder that:
(a) a pre-market application under Section 510(k) of
the Federal Food, Drug and Cosmetic Act ("FDCA"), in form
and substance satisfactory to the Distributor, shall have
been filed by Supplier with respect to the Products and
clearance of such application shall have been granted by the
FDA;
(b) Supplier and its subcontractor(s) shall have been
approved as vendors by the Distributor in accordance with
its current criteria for such approval. In the event any
other subcontractor shall be engaged by Supplier with
respect to the Products, it shall be a condition to
Distributor's continued obligations under this Agreement
that such subcontractor shall be approved as a vendor by
Distributor, and
(c) the Supplier shall have implemented, to the
Distributor's satisfaction, improvements or modifications to
the Products to:
(i) ensure the consistency and reliability of the
dropping mechanism employed in the Products, including the
stiffening of the cover door,
<PAGE>
(ii) reduce the amount of holes or other openings
from which needles could possibly protrude from the
Products; and
(iii) fully develop the leak proof capability
of the Products by means of an absorbent pad.
11.0 INTELLECTUAL PROPERTIES:
11.1 Each of the parties hereto shall provide to the
other, subject to such confidentiality restrictions as such
party may require, information regarding potential
improvements to the Products of which such party may have
knowledge. In the event improvements to the Products shall
be necessary to meet market acceptance of the Products or to
meet market competition, the parties shall cooperate with
each other to develop and implement such improvements. Each
party shall jointly own only the intellectual property
rights relating to Product improvements which are jointly
developed during the term of this Agreement by the parties.
In addition, each party shall jointly own the intellectual
property rights relating to any new sharps collector
products jointly developed during the term of this Agreement
by the parties. Upon the expiration or termination of this
Agreement, any intellectual property rights jointly owned by
the parties hereto may be exploited by either party without
accounting to or further approval of the other party;
provided, that notwithstanding the foregoing, nothing
contained herein shall be construed as granting to any party
hereto any express or implied license to use any
intellectual property rights of the other party. The
parties shall cooperate in, and share equally the costs of,
applying for, obtaining, perfecting, and maintaining
intellectual property rights relevant to any jointly
developed improvements or products.
11.2 Each part hereto shall be the sole owner of the
intellectual property rights relating to any new sharps
collector products conceived during the term of this
Agreement of which only its employees and its third party
contractors are the inventors.
12.0 RIGHT OF FIRST REFUSAL:
Distributor shall have the right to exclusively market
and distribute worldwide any sharps collector products
developed by or on behalf of Supplier which are not included
in the Products. The terms of any distribution arrangement
with respect to such products shall be mutually agreed upon
by the Distributor and the Supplier. In the event the
parties shall fail, in good faith, to agree to the terms of
such arrangement, the Supplier may offer such products to
third parties; provided, that before the Supplier may enter
into any definitive agreement with any third party to sell,
distribute or supply such products in any market, the
Distributor shall have the right, for a period of thirty
(30) days after written notice from the Supplier, to review
and enter into said agreement with the Supplier.
<PAGE>
13.0 NON-ASSIGNABLE AGREEMENT:
Except as set forth in Section 1.1 hereof, this
Agreement is non-assignable and non-transferable by any
party. Any attempt by any party hereto to assign or
transfer rights or obligations under this Agreement shall be
a breach by such party. For purposes of this Agreement, the
transfer by a party of all or substantially all of its
assets or the transfer of a majority of its outstanding
voting stock shall be deemed to be an assignment of this
Agreement.
14.0 OTHER TRANSACTIONS:
Supplier acknowledges that the Distributor is assessing
the potential acquisition or licensing of all of Supplier's
commercial and technical rights in and to the Products.
Supplier hereby agrees that from the date hereof until
February 26, 1997 (the "Assessment Period"), Supplier shall
cooperate with the Distributor in connection with such
assessment by providing reasonable access to Supplier's
employees, records and manufacturing facilities. During the
Assessment Period, the parties hereto will discuss the
possible terms of a transaction whereby the Supplier would
license or sell its rights to the Products to the
Distributor. In furtherance thereof, Supplier agrees that
during the Assessment Period, the Supplier will refrain from
discussion with, or entering into, continuing or
consummating a transaction with any person relating to the
Products that would preclude Supplier from entering into an
agreement with the Distributor for the purchase or licensing
of such rights. Nothing contained herein shall prevent the
Distributor from continuing or initiating discussions or
consummating any transaction with any third party for the
acquisition, distribution or licensing of competing
technology or products or similar rights.
15.0 MISCELLANEOUS:
15.1 All notices under this Agreement shall be in
writing, and if to Supplier shall be sufficient for all
purposes if delivered in person or sent by registered mail
to Supplier at:
Specialized Health Products, Inc.
655 East Medical Drive
Bountiful, Utah 84010
Attn: David Robinson, President & CEO
and if to Distributor shall be sufficient if delivered in
person or sent by registered mail to Distributor at:
Becton, Dickinson and Company
1 Becton Drive
Franklin Lakes, New Jersey 07417
Attn: Joseph Taylor
or at any such address as any party may hereinafter specify
in a written notice to the other. All notices hereunder
shall be deemed given when received by the recipient (if
delivered in person) or three days after being mailed by the
sender (if sent by registered mail).
<PAGE>
15.2 This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey,
without giving effect to conflicts of laws principles
thereof.
15.3 This Agreement shall cancel and supersede all
previous agreements and understandings between the parties
relating to any matter covered by this Agreement; provided,
that the terms of that certain Confidentiality Agreement,
dated March 11, 1996, and that certain letter agreement,
dated March 11, 1996, each by and between the parties
hereto, shall remain in effect, notwithstanding the
execution and delivery of this Agreement.
15.4 The headings used herein are for ease of reference
only and are not to be used in the interpretation or
construction of this Agreement.
15.5 The provisions of this Agreement shall not be
extended, varied, changed, modified or supplemented other
than by agreement in writing signed by the parties hereto.
There are no other terms or conditions, representations or
understandings except as herein set forth.
15.6 If and to the extent any court of competent
jurisdiction shall hold any provision (or any part thereof)
of this Agreement to be invalid or unenforceable, such
holding shall in no way affect the validity of the remainder
of this Agreement.
15.7 Except as otherwise provided herein, the failure
of a party hereto to enforce any of the provisions of this
Agreement or any rights with respect thereto or to exercise
any election provided for herein, shall in no way be
considered a waiver of such provisions, rights or elections
or in any way affect the validity of this Agreement. No
term or provision hereof shall be deemed waived and no
breach excused, unless such waiver or consent shall be in
writing and signed by the party claimed to have so waived or
consented.
IN WITNESS WHEREOF, each of the parties hereto has
cause this Agreement to be executed on its behalf by its
duly authorized representative as the date first above
written.
BECTON, DICKINSON AND SPECIALIZED HEALTH PRODUCTS,
COMPANY, through its BECTON INC.
DICKINSON DIVISION
By /s/ By /s/
Its Vice president/Samual Monaga Its President
<PAGE>
SCHEDULE A
Pricing Without Absorbent Pad*
Size
Small 3" Safety Cradle(Registered) sharp $** each
collector
Medium 5" Safety Cradle(Registered) sharp $** each
collector
Large 9" Safety Cradle(Registered) sharp $** each
collector
Pricing With Absorbent Pad*
Size
Small 3" Safety Cradle(Registered) sharp $** each
collector
Medium 5" Safety Cradle(Registered) sharp $** each
collector
Large 9" Safety Cradle(Registered) sharp $** each
collector
* Pricing based on shipments in full truck loads.
** Information omitted and filed separately with the
Securities and Exchange Commission pursuant to a
request for confidential treatment.
<PAGE>
Product Specification
for
Safety Cradle(Registered)
(SCHEDULE B)
<PAGE>
Product Specification
for
Safety Cradle
August 12, 1996
Prepared by: /s/ Tim Farnes
<PAGE>
SAFETY CRADLE(Registered) PRODUCT SPECIFICATION
PRODUCT FEATURES
General Description
Safety Cradle is a family of sharps collectors designed
for use by home care nurses, patients, nursing home,
hospital and other healthcare institutions/providers.
Part Numbers
The product is available in the following six configurations:
Part Number Description
0005-004.XX Small 3 inch container with absorbent pad
0005-005.XX Medium 5 inch container with absorbent pad
0005-006.XX Large 9 inch container with absorbent pad
Size_Overall Dimensions
Small 3 inch 5.5 x 8.5 x 3.5 inches (depth x width x height)
Medium 5 inch 5.5 x 8.5 x 5.5 inches (depth x width x height)
Large 9 inch 5.5 x 8.5 x 9.5 inches (depth x width x height)
Color
Well - Natural
Lid - Red(Pantone 187C)
Weight (empty)
Small 3 inch - 8.4 oz.
Medium 5 inch - 9.5 oz.
Large 9 inch - 12.1 oz.
Capacity
Full Capacity Capacity to fill line:
Small 3 inch - 2.3 qt 1.0 qt
Medium 5 inch - 3.6 qt 2.3 qt
Large 9 inch - 5.8 qt 3.9 qt
Material and part thickness
Nominal Thickness Minimum Thickness
Well - Polypropylene (homopolymer) .060 inch .040 inch
Lid - Polypropylene (copolymer) .070 inch .060 inch
Sharps Access and Closure Characteristics
Finger Access - It is difficult and requires specific
intent to reach container contents. To dispose of
sharps, finger insertion into the sharps containment
volume is not necessary and inadvertent contact with
contained sharps is not possible.
Ease of inserting sharps - Opening the cover into the
use position can be easily performed with a single
hand. Placing of a sharp on the Safety Cradle with a
single hand followed by pressing of the cover to
deposit the sharp is simple and convenient to perform
with a single hand.
Ease and safety of using the temporary and permanent
closures - Closing of the container and activating both
the temporary and the permanent latches is simple and
can be performed without difficulty. Hands and fingers
are protected from even inadvertent contact with
container contents.
Protection against reopening -After the permanent
closure tabs have been inserted in their slots, the
container cannot be reopened without the use of tools
or causing permanent damage to the container.
<PAGE>
Puncture Resistance
The product is puncture resistant as defined by an SHP
document which parallels an early ASTM draft. The
criteria at room temperature requires a force in excess
of 3.37 pounds applied to a 21 gauge needle moving at
10 inches per minute to penetrate the thinnest section
of each component.
Impact Resistance
With absorbent pad - A container can withstand a drop
from 36 inches without degradation and contain both
solid and liquid contents.
Stability
Small 3 inch - The topple angle is greater than 40
degrees and both solid and liquid contents are retained
by the container.
Medium 5 inch - The topple angle is greater than 20
degrees and both solid and liquid contents are retained
by the container.
Large 9 inch - The topple angle is greater than 15
degrees and solid and liquid contents are retained by
the container.
Leak Resistance
Leak proof in upright position.
Absorbent Pad
The absorbent pad is a standard part of each device and
encapsulates up to 10 oz. of fluid.
Overfill Detection
The fill line is easy to identify and the container
contents or their distinct shadows can be easily seen
both above and below the fill line.
Handle
The container handle supports weight equal to 20 lbs.
for a period of 1 1/2 hrs., with no apparent signs of
impending failure. The handle is easy to access with a
single hand without applying force to any container
wall.
Needle Unwinders
Needles can be conveniently removed with a single hand
without the need to hold the container with the free
hand.
Dropping Mechanism
Sharps placed on the Safety Cradle readily drop into
the well when the cover is depressed.
Labeling
Meets requirements of 21 CFR 801
Meets guidelines of ECRI Vol. 22, Nos. 8-9, pp 385-386.
Transporter Features
New product may be shipped in new unused containers.
Easy removal of lid and contents is possible. Proper
replacement of lid secures lid and prepares container
for sharps containment.
Package/Shipping Impact Resistance
Product in a shipping container can withstand a drop
from a height of 24 inches with no degradation to the
product within the container.
Regulatory
FDA Class II device. Found substantially equivalent to
a previously approved device.
