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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NO. 0-20432
ONGARD SYSTEMS, INC.
(Name of Small Business Issuer in its Charter)
DELAWARE 84-1149380
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
40 Commerce Drive, Hauppauge, NY 11788
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(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number, including area code: (516) 231-8989
SECURITIES REGISTERED UNDER SECTION 12(b) OF THE ACT: NONE
Title of Each Class Name of Exchange on Which Registered
N/A N/A
--- ---
SECURITIES REGISTERED UNDER SECTION 12(g) OF THE ACT:
UNITS CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE WARRANT
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(Title of Class)
COMMON STOCK, $.001 PAR VALUE
-----------------------------
(Title of Class)
COMMON STOCK PURCHASE WARRANTS
------------------------------
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
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Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
Issuer's revenues for its most recent fiscal year were $4,975,069.
The aggregate market value of the voting stock of the issuer held by non-
affiliates, computed by reference to the price at which stock was sold, or the
average bid and asked prices of such stock, as of March 28, 1996, was
$37,487,000.
5,355,283 shares of Common Stock were outstanding as of December 31, 1995.
Transitional Small Business Disclosure Format
Yes No X
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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following exhibits are filed as part of this Report.
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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3.1 Certificate of Incorporation, as amended(i)
3.2 Bylaws of OnGard, as amended(i)
4.1 Certificate of Incorporation, as amended(i)
4.2 ByLaws of OnGard, as amended(i)
4.3 Form of Warrant Agreement(i)
4.4 Specimen Warrant Agreement(i)
4.5 Form of Underwriter's Warrant Agreement(i)
4.6 Specimen Common Stock Certificate(i)
10.1 1992 Stock Option Plan(i)
10.2 Employment Agreement of Mark E. Weiss(i)
10.3 Employment Agreement of Thomas J. Bauer(i)
10.4 Agreement between OnGard and National Medical Waste(i)
10.5 Employment Agreement of Donald M. Marotta(ii)
10.5.1 Consulting Agreement of Donald M. Marotta(vi)
10.6. Letter of Intent to Acquire all of the Issued and
Outstanding Common Stock and Preferred Stock of
Pharmetics, Incorporated(iii)
10.7 Agreement Between OnGard and American Can (iv);
omitted in connection with a request for confidential
treatment pursuant to Rule 406 of Regulation C
10.8 Merger Agreement Among OnGard, OGPI, Pharmetics and
Shlisky(v)
10.8.1 Amendment to Merger Agreement(v)
10.8.2 Amendment No. 2 to Merger Agreement(vii)
10.8.3 Amendment No. 3 to Merger Agreement (vii)
10.9 Employment Agreement of Theodore M. Shlisky(v)
10.10 Agreement Between OnGard and LEP Holdings, Inc.(vii)
10.11 Guaranty of Guarantor and OnGard Note to Bank(vii)
10.12 Joint Marketing and Distribution Agreement between
OnGard and Devon Industries, Inc.(viii)
10.13 Mailback Agreement between OnGard and Option Care,
Inc.(viii)
10.14 Agreement between OGPI and ECC Corp.(viii)
10.14.1 Agreement between OnGard, OGPI and ECC Corp. (viii)
10.14.2 Agreement between OnGard, OGPI and ECC Corp. (viii)
10.15 Agreement between OnGard and Baxter HealthCare (certain
portions omitted in connection with a request for
confidential treatment pursuant to Rule 406 of
Regulation C)
22 List of Subsidiaries of OnGard(iii)
25 Powers of Attorney(i)
99 Deferred Payment Arrangements for Payment of Unemployment
Insurance by Pharmetics Incorporated(viii)
________________________
(i) Previously filed with Registration Statement No. 33-48372, and
incorporated herein by reference.
(ii) Previously filed with OnGard's Form 10-KSB for fiscal year ended
December 31, 1992, and incorporated herein by reference.
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(iii) Previously filed with Post-Effective Amendment No. 1 to Registration
Statement No. 33-48372, and incorporated herein by reference.
(iv) Filed with Post-Effective Amendment No. 2 to Registration Statement
No. 33-48372, and incorporated herein by reference.
(v) Previously filed with Registration Statement No. 33-75282, and
incorporated herein by reference.
(vi) Previously filed with OnGard's Form 10-KSB for the fiscal year ended
December 31, 1993, and incorporated herein by reference.
(vii) Previously filed with Amendment No. 1 to Registration Statement
No. 33-75282, and incorporated herein by reference.
(viii) Filed with Post-Effective Amendment No. 4 to Registration Statement
No. 33-48372, and incorporated herein by reference.
SIGNATURE
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: May 18, 1996 ONGARD SYSTEMS, INC.
By /s/ Philip B. Kart
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Philip B. Kart, Vice President
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[Certain portions omited and filed separately
subject to a request for confidential treatment.]
EXCLUSIVE DISTRIBUTION AGREEMENT
This Agreement, effective March 4, 1996, is between OnGard Systems,
Inc., a Delaware corporation with offices at 40 Commerce Drive, Hauppauge,
New York 11788 ("OnGard"), and Baxter Healthcare Corporation, a Delaware
corporation, through its V. Mueller Division, with offices at 1435 Lake Cook
Road, Deerfield, Illinois 60015 ("Baxter").
OnGard and Baxter agree as follows:
1. PRODUCTS
(a) The products covered by this Agreement are those products and
accessories set forth in Exhibit A, together with the parts and components
necessary for the repair and replacement thereof, and all modifications,
improvements, and developments pertaining to such products, accessories and
components, all of which are hereinafter referred to as "Products." The
Products have been manufactured in accordance with technical specifications
developed by OnGard.
(b) OnGard shall submit to Baxter specifications relating to AutoPak,
Plasma Pak, and StatPak type Products listed in Exhibit A and, where feasible,
samples of each new disposable product which OnGard intends to manufacture.
Within sixty (60) days after such submission, Baxter may acquire distribution
rights for such new products by advising OnGard in writing that Baxter is
electing to have such new products included within those Products described in
Paragraph (a) hereof. A revised Exhibit A setting forth the original Products
and the new Products covered by this Agreement shall immediately be prepared,
initialed by the parties and attached to this Agreement. In the event Baxter
does not elect to distribute such new products, OnGard shall have the right to
market those products as it deems fit in its sole discretion. In addition to
the above, on an ongoing basis, the parties will discuss the potential of
working together on other products that are developed as part of OnGard's rapid
instrument reprocessing system, the intent being that both parties market
together OnGard's total system (including capital equipment as well as
disposables).
2. GRANT OF DISTRIBUTORSHIP
OnGard hereby grants to Baxter the sole and exclusive right to sell
and distribute the Products throughout the Territory, and Baxter accepts such
grant for the
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term and on the conditions stated in this Agreement. OnGard shall not
appoint another distributor to solicit or sell the products in the Territory,
nor will OnGard solicit or sell the Products directly in the Territory. The
term "Territory" shall mean the U.S., including its territories, and Canada,
and any other countries as the parties may agree.
3. TERM AND RENEWAL
(a) [Information omitted and filed separately subject to a request
for confidential treatment] This Agreement shall be renewed for additional and
successive terms of two (2) years each. If the parties cannot agree on pricing
for the renewal two (2) year term by [Information omitted and filed separately
subject to a request for confidential treatment] or the second anniversary
thereof for each renewal term, the Agreement will terminate after one party has
given the other party written notice of its intent to terminate by December 31
of that year. If such notice is given, the Agreement will terminate on March 31
of the following year.
(b) This Agreement is contingent on OnGard passing Baxter's
standard vendor audit by March 31, 1996. If OnGard does not initially pass
Baxter's standard vendor audit, Baxter shall provide OnGard with written
notice of those areas in which OnGard is not in compliance, and OnGard shall
have thirty (30) days in which to correct any non-compliance. If OnGard is
not able to pass the audit by the latter of March 31, 1996 or thirty (30)
days after Baxter provides any notice of non-conformity, Baxter shall have
the option to rescind the Agreement.
4. BAXTER'S DUTIES
Baxter shall:
(a) spend Three Hundred Thousand Dollars ($300,000) on sales and
marketing support ("Support Funds") for special programs in addition to
normal programs currently in place for Baxter and OnGard to sell the
Products; within sixty (60) days after execution of this Agreement, Baxter
will work with and agree with OnGard on developing a budget indicating how
the money shall be spent;
[Information omitted and filed separately subject to a request for
confidential treatment];
(b) submit its orders for the Products on its standard purchase
order form, a copy of which is attached hereto as Exhibit B, the terms and
conditions of which are made a part hereof to the extent consistent with the
terms set out in the body of the Agreement;
(c) pay for such orders in U.S. currency and on Baxter's standard
terms of payment: net thirty (30) days;
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(d) provide instruction to its customers in the use of the Products
and field service for minor replacement and repair of such Products in
accordance with Product information provided by OnGard;
(e) advertise and promote the Products and accessories by such
methods which in Baxter's judgment are best suited for the sale of such Products
consistent with Baxter's instrument asset management focus and total system
solution for sterile packaging; such advertising and promotion shall include
account qualification, lead generation, Product detailing, end service, closing,
order entry, billing and receivables;
(f) at OnGard's request, assist OnGard in obtaining raw materials
used to produce the Products;
(g) provide trace sales reports to OnGard on a monthly basis.
5. ONGARD'S DUTIES
OnGard shall:
(a) ship promptly Baxter's orders for Products, f.o.b. for a single
Baxter destination, at the prices set forth on Exhibit C and in amounts not less
than mutually agreed upon shipment quantities; other pricing may be negotiated
for other destinations and volumes; which prices shall not be increased for the
first year of this Agreement;
(b) adequately package and label the Products, in accordance with
OnGard's instructions and specifications with regard to technical descriptions
of the Products;
(c) provide adequate facilities for the major overhaul and repair of
the Products and provide to Baxter's designated personnel, at no cost,
instruction and training in the use and repair of the Products;
(d) furnish Baxter, at a reasonable charge if not readily available,
reasonable quantities of OnGard's sales literature, customer instruction manuals
and service manuals relating to the Products and furnish Baxter, upon written
request, at no charge to Baxter if readily available and at a reasonable charge
if not readily available suitable copy and camera-ready artwork for use by
Baxter in advertising and cataloging;
(e) provide Baxter, at no cost, reasonable quantities of sample
Products for education and training, Supplier and Baxter shall share equally the
costs of Product used in trials and agree upon such trial on an account-by-
account basis;
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(f) provide technical support to the sales effort of Baxter's sales
force by providing marketing and meeting support as reasonably required by
Baxter, and maintaining field specialists who shall work with Baxter's sales
representatives on a regular basis, including but not limited to supporting the
sales efforts of Baxter's sales representatives on a regular basis, providing
additional education where necessary, and providing the technical knowledge of
the Products to assist Baxter's sales representatives in the service of the
Products; and
(g) inform Baxter of all inquiries for the Products in the Territory.
6. PRICING
OnGard will sell the Products to Baxter at the transfer prices listed
in Exhibit C. The transfer pricing shall remain fixed for the initial term of
the agreement and may be adjusted on the anniversary of each renewal term of the
Agreement. The parties may negotiate special pricing for large bids or other
extraordinary circumstances. Baxter shall have responsibility for establishing
list price with suggestions from OnGard, and Baxter shall solely determine
actual sales price to the customers for the Products. At OnGard's request,
Baxter shall provide OnGard with Baxter's average selling price on the Products
for the preceding quarter. By September 30, 1996, Baxter and OnGard shall
establish a method to effectively split any profits from Baxter's sale of the
Product after Baxter has received reimbursement for One Hundred and Fifty
Thousand Dollars ($150,000) of Baxter's Three Hundred Thousand Dollars
($300,000) marketing and sales investment and after Baxter has received a thirty
percent (30%) profit margin. Baxter would make quarterly payments of any profit
splits to OnGard.
7. PRODUCT WARRANTIES
OnGard warrants that all Products shipped are free from defects in
workmanship and materials, are as described in Exhibit A, are fit for their
intended purposes, and meet OnGard's specifications (or conform to any samples
provided to Baxter). OnGard shall bear responsibility for all costs associated
with warranty services, including any freight charges on Products which do not
conform to the warranties set forth herein. OnGard shall issue credit for or
refurbish, at no charge to Baxter, all Products returned to Baxter or returned
by customers to Baxter which do not conform to the warranties set forth herein
and provide Baxter with written reports of evaluation of such products.
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8. PRODUCT LIABILITY
(a) ONGARD INDEMNIFICATION. OnGard shall indemnify, defend and
hold harmless Baxter against all claims, liabilities, losses and expenses
(including attorneys' fees) arising out of the use of any Product or
allegedly caused by any Product, except to the extent a claim for personal
injury, death or property damage arose from any negligence of Baxter in the
handling of the Product or any misrepresentation by Baxter concerning the
Product's characteristics, performance or proper manner of usage.
(b) BAXTER INDEMNIFICATION. Baxter shall indemnify, defend and
hold harmless OnGard against all claims, liabilities, losses and expenses
(including attorneys' fees) arising out of any negligence of Baxter in the
handling of the Product or any misrepresentation by Baxter concerning the
Product's characteristics, performance or proper manner of usage.
(c) INSURANCE. OnGard shall take out and maintain general
comprehensive liability insurance covering each occurrence of bodily injury
and property damage in an amount of not less than Three Million Dollars
($3,000,000) combined single limit with endorsements for (i) products and
completed operations; (ii) blanket contractual liability (deleting any
exclusion for Products and completed operations liability), and (iii) broad
form vendor's liability. OnGard will immediately furnish to Baxter a
certificate of insurance issued by the carrier evidencing the foregoing
endorsements, coverages and limits, and stating that such insurance shall not
be cancelable without at least thirty (30) days' prior written notice to
Baxter.
9. REGULATORY MATTERS
(a) CONTINUING GUARANTY. OnGard warrants and guarantees that all
Products shall be in compliance with all federal, state and local laws,
ordinances, regulations, rules, declarations, interpretations and orders
issued thereunder. OnGard agrees to execute and comply with the provisions
of the Baxter Continuing Guaranty, a copy of which is attached hereto as
Exhibit D, the terms and conditions of which are made a part hereof to the
extent consistent with the terms set out in the body of this Agreement.
(b) PRODUCT RECALL. In the event Baxter or OnGard recalls any of
the Products sold or distributed by Baxter because the Products are believed
by OnGard or Baxter to clearly violate any provision of applicable law,
OnGard shall bear all direct costs and expenses of such recall, including,
without limitation, expenses or obligations to third parties, the cost of
notifying customers and costs associated with the shipment of recalled
Product from customers to Baxter or OnGard. Baxter shall maintain complete
and accurate records, for such periods as may be required by applicable law,
of all the
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Products sold by it. The parties will cooperate fully with each other in
developing a plan for effecting any recall of the Products, including
communications with any purchasers or users.
(c) CUSTOMER COMPLAINT REPORTING. OnGard shall be responsible for
notifying the appropriate federal, state and local authorities of any
customer complaints or other occurrences regarding the Products which are
required to be so reported. Baxter shall provide OnGard with any information
it receives regarding such occurrences.
(d) ACCESS. OnGard agrees to permit a duly authorized
representative of Baxter, upon reasonable advance notice, to enter and
inspect, during normal business hours, the establishments in which any of the
Products are manufactured, packaged, labeled or held in order to determine
whether said Products are being manufactured, packaged, labeled or held in
conformity with the terms of this Agreement, and further agrees to provide
Baxter with such documents as it may reasonably require to determine whether
the Products are being manufactured, packaged, labeled or held in accordance
with the provisions of this Agreement.
10. PATENTS AND TRADEMARKS
(a) PATENTS. OnGard shall prosecute diligently each application
for United States patent which is now or hereafter pending covering some one
or more of the Products and on issuance diligently prosecute each infringer
thereof as OnGard deems appropriate using reasonable commercial business
standards. OnGard shall defend, indemnify and hold harmless Baxter from and
against any liability arising out of a claim of patent infringement made with
respect to any of the Products.
(b) TRADEMARKS AND TRADE NAMES. OnGard recognizes that Baxter is
the owner of the trademarks and trade names connoting Baxter or its
affiliates which Baxter may elect to use in the promotion and sale of the
Products and that OnGard has no right or interest in such trademarks and
trade names. The Products will be distributed by Baxter on a
"distributed-by" basis, and Baxter's name would appear on the Products,
together with any trademark designated by Baxter in accordance with Baxter's
specifications relating to the Baxter name and trademark and a trademark
designated by OnGard. Initially the V. Mueller mark will be used on outer
containers for the products and will eventually be on the Products. Use of
Baxter's trademarks on the Products shall be reviewed and approved by Baxter.
(c) TRADEMARK LICENSE. OnGard hereby grants to Baxter the
royalty-free nonexclusive right to use OnGard's trademarks on the Products
during the term of this Agreement, it being expressly understood that Baxter
shall discontinue the use of such trademark upon the termination of this
Agreement and disclaims any rights in the
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trademark other than the said license. Use of OnGard's trademarks on the
Products shall be reviewed and approved by OnGard.
11. RETURNS
Should a Product become "excess" or "no move" despite Baxter's good
faith efforts to sell inventory, then OnGard agrees to allow Baxter to return
Product, at Baxter's freight expense, with no restocking charge. For
purposes of this Agreement, "excess" inventory shall be defined as stock on
hand above a one (1) year supply as determined by comparing system-wide
on-hand quantity to a rolling calculation of annualized demand quantify, and
"no-move" inventory is defined as all stock on hand for an item which has not
experienced any demand in the past four (4) months. OnGard shall not be
required to repurchase Product having a Baxter trademark stamped on the
Product.
12. TERMINATION
Either party shall have the right to terminate this Agreement on
written notice to the other if the other (i) commits or suffers any act of
bankruptcy or insolvency or (ii) fails to cure any material breach in the
provisions of this Agreement within thirty (30) days after written notice of
such breach.
13. PROCEDURES ON TERMINATION
(a) WINDUP. On the termination of this Agreement, for whatever
reason, OnGard shall continue to honor Baxter's orders consistent with
Baxter's prior ordering practices for Products up to the effective date of
termination and for a period of sixty (60) days thereafter, and Baxter shall
pay for such Products all on the terms and conditions of this Agreement.
(b) REPURCHASE OF INVENTORY. Within thirty (30) days after
termination, and on written request from Baxter, OnGard shall repurchase
Baxter's inventory of the Products (excluding Product ordered by Baxter after
notice of termination has been given or Product having a Baxter trademark
stamped on the Product) at Baxter's acquisition cost thereof.
(c) COVENANT NOT TO COMPETE. The V. Mueller division of Baxter
shall not market an identical product to the Products for one (1) year after
this Agreement terminates if OnGard terminates the Agreement for cause.
Baxter may act as a distributor for products similar to the Products.
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14. FORCE MAJEURS
The obligations of either party to perform under this Agreement shall
be excused during each period of delay caused by matters such as strikes,
shortages of raw material, government orders or acts of God, which are
reasonably beyond the control of the party obligated to perform.
15. MISCELLANEOUS
(a) NOTICES. All notices required or permitted shall be in writing
and shall be deemed given when delivered personally, by telefax, telex, or
telegram, or if sent, three (3) business days after being mailed by registered
or certified mail, postage prepaid, or by such other method (including air
courier) which provides for a signed receipt upon delivery, addressed as
follows, or to such other person or address as may be designated by notice to
the other party:
IF TO BAXTER IF TO ONGARD
------------ ------------
President President
Baxter Healthcare Corporation OnGard Systems, Inc.
V. Mueller Division 40 Commerce Drive
1435 Lake Cook Road Hauppauge, NY 11788
Deerfield, IL 60015
(b) ENTIRE AGREEMENT. This Agreement is the entire agreement
between the parties hereto regarding this subject matter, there being no
prior written or oral promises or representations not incorporated herein.
(c) APPLICABLE LAW. This Agreement shall be governed by the laws
of the State of Illinois applicable to contracts made and to be performed in
that state and shall not be assigned by OnGard without the prior written
consent of Baxter.
(d) AMENDMENTS. No amendment or modification of the terms of this
Agreement shall be binding on either party unless reduced to writing and
signed by an authorized officer of the party to be bound.
(e) EXISTING OBLIGATIONS. OnGard represents and warrants that the
terms of this Agreement do not violate any existing obligations or contracts
of OnGard. OnGard shall defend, indemnify an hold harmless Baxter from and
against any and all claims, demands, actions or causes of action which are
hereafter made or brought against Baxter and which allege any such violation.
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16. ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assign. Neither party
shall transfer or assign its interest in this Agreement without the prior
written consent of the other except that Baxter may assign this Agreement
without OnGard's prior written consent as part of the sale or transfer of the
part of the business to which this Agreement pertains.
17. COUNTERPARTS
For convenience of the parties hereto, this Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original for all purposes.
IN WITNESS WHEREOF, this Agreement has been executed by authorized
representatives of the parties.
ONGARD SYSTEMS, INC.
By /s/ Mark E. Weiss
-----------------------------
Date 3/25/96
-----------------------------
BAXTER HEALTHCARE CORPORATION
By /s/ James Stauner
-----------------------------
Date 3/21/96
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EXHIBIT A
PRODUCTS
AutoPak
Plasma Pak
StatPak
Accessories for AutoPak, Plasma Pak and StatPak
<PAGE>
EXHIBIT B
BAXTER PURCHASE ORDER TERMS AND CONDITIONS
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| Sample - Adept purchase order - page 1 |
--------------------------------------------
BAXTER
BAXTER HEALTHCARE CORPORATION
<PAGE>
EXHIBIT C
PRODUCT PRICES
AUTOPAK PRICING
Product Size Price
------------ -----
[Information omitted and filed separately
subject to a request for confidential treatment]
Additional pricing for additional Products will be agreed upon
by the parties as the Products become available.
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EXHIBIT D
CONTINUING GUARANTY
Vendor: (Name) OnGard Systems, Inc.
(Address) 40 Commerce Drive
Hauppauge, NY 11788
1. COMPLIANCE WITH LAWS. Vendor guarantees that each product shipped to,
or on the order of, Baxter Healthcare Corporation or any affiliated
corporation ("Baxter") is as of the date of shipment in compliance with all
federal, state and local laws, regulations, rules and orders.
Vendor specifically guarantees that:
a. [STANDARD FDA GUARANTY] The products are not adulterated or misbranded
within the meaning of the Federal Food, Drug and Cosmetic Act, as amended and
the regulations issued thereunder, or within the meaning of any applicable
state or municipal law in which the definitions of adulteration and
misbranding are substantially identical to those contained in the Federal
Food, Drug and Cosmetic Act, or products that may not under the provisions of
Sections 404, 505, 514, or 515 of said Act be introduced into interstate
commerce, and are not banned devices under Section 516 of said Act, and the
products are not products that may not under any state or municipal law,
ordinance, regulation or order be introduced into commerce.
b. [EQUAL OPPORTUNITY STATEMENT - REQUIRED BECAUSE BAXTER IS A GOVERNMENT
CONTRACTOR] The products are not manufactured or sold in violation of any
applicable Equal Employment Opportunity requirements, including those set
forth in Section 202 of Executive Order 11246, as amended.
2. INSURANCE: Vendor agrees to procure and maintain general comprehensive
liability insurance covering each occurrence of bodily injury and property
damage in the amount of not less than Three Million Dollars ($3,000,000)
combined single limit (or such higher limits as Baxter shall reasonably
request) with endorsements for product and completed operations, blanket
contractual liability, and vendor's liability. Vendor shall on or before
delivery of any product, furnish a certificate of insurance evidencing the
foregoing coverages and limits, stating that the insurer shall give Baxter
written notice at least thirty (30) days prior to any cancellation,
non-renewal or material change in coverage.
3. INDEMNIFICATION. Vendor agrees to indemnify and hold harmless Baxter
from any liability, loss, expense, cost, claim or judgment, arising out of:
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a. [PRODUCTS LIABILITY] Any claim for property damage, or personal
injury or death where the product is alleged to have caused or contributed
to the damage, injury or death. This indemnification does not extend to
injuries, damages or death to the extent caused by negligence on the part
of Baxter or any of its employees.
b. [PROPRIETARY RIGHTS INFRINGEMENT] Any claim that the products
infringe the patent, trademark or other proprietary rights of any other
party.
4. RECALLS: Vendor agrees that it will reimburse Baxter for costs associated
with product corrective actions (including recalls), except those recalls that
result from Baxter negligence.
5. PRIVATE LABEL PRODUCTS. [REQUIRED FOR FDA COMPLIANCE PURPOSES]: If Vendor
private labels any product for Baxter, Vendor agrees to make no changes in the
product or the label, labeling or packaging of the product without first
obtaining Baxter's written approval.
6. SURVIVAL OF GUARANTY: This guaranty shall be continuing and shall be
binding upon the Vendor and his or its heirs, executors, administrators,
successors and/or assigns and shall inure to the benefit of Baxter, its
successors and assigns and to the benefit of its officers, directors, agents and
employees.
Date: 3/25/96
------------------------
(Corporate Seal) OnGard Systems, Inc.
-----------------------------------------
Corporate Name
Attest: /s/ Mark E. Weiss
-----------------------------------------
Signature and Title of Authorized Officer
/s/ Philip B. Kart Mark E. Weiss, C.E.O.
------------------------------ ------------------------------------------
(Secretary) Printed Name & Title of Authorized Officer
