Exhibit 1
AMENDMENT 5
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TO THE
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SUPPLY AND DISTRIBUTION AGREEMENT
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BETWEEN
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ICU MEDICAL, INC.
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AND
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ABBOTT LABORATORIES
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This Amendment 5, effective this 1st day of January, 1999 ("Effective Date") is
made to the Supply and Distribution Agreement dated April 3, 1995, as amended on
September 9, 1998, November 13, 1998, January 9, 1998 and May 13, 1998 between
ICU Medical, Inc. ("ICU") and Abbott Laboratories ("Abbott") for the purchase
and sales of certain Products (the "Agreement").
The parties agree to amend the Agreement as follows:
1. Term. This Agreement shall be effective on the Effective Date set forth
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herein above and, unless terminated in accordance with Section 15 of the
Agreement, shall expire on December 31, 2009.
2. Volume.
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(a) The total annual volume of Products shall include Y-CLAVE, bulk
straight CLAVE and packaged and sterilized CLAVE Male Adapter Plugs.
(b) Abbott shall commit to purchase from ICU the total Units of Product
for the period indicated in Exhibit 1.
(c) Abbott shall use its reasonable best commercial efforts to achieve the
continued growth of the CLAVE family of Products in the total Units of
Product for the periods indicated in Exhibit 1.
3. Penalty for Not Ordering Volume Commitments of Product for delivery.
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(a) Abbott shall pay a penalty for Product shortfall at the percentage of
the unit prices applied to the units of Products not ordered for
delivery against the annual volume commitment as set forth in
Provision 2 (b) herein above at the percentage rates indicated in
Exhibit 2.
(b) Such penalty shall assume the same mix of CLAVE styles of Product for
the period of the annual volume commitment in Exhibit 2 as applied to
1998.
4. Costs.
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(a) CLAVE MAP. The cost of packaged and sterilized CLAVE MAP Product (ICU
Medical product number L#11956) shall be as specified in Exhibit 3 for
the Term of the Agreement:
The parties agree to negotiate in good faith the appropriate pricing for
units ordered in excess of the cumulative sum of units for which pricing is
not specified in Exhibit 3.
(b) Y-CLAVE and Straight CLAVE. The costs of the Y-CLAVE and the Straight
CLAVE Products shall be as specified in Exhibit 3.
5. Other Terms.
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(a) Both parties agree to negotiate in good faith appropriate pricing, and
volume, as applicable, for other packaged sterile products and a
special version of the CLAVE integral to a pump set.
(b) During the first five (5) years of the Term of this Agreement, as
defined in paragraph 1 herein, ICU will be the Preferred Supplier of
needlefree technology to Abbott's Hospital Products Division in the
United States. As Preferred Supplier, if Abbott's Hospital Products
Division in the United States elects to seek a third party to develop
or manufacture needlefree connectors or connector technology, ICU will
be the supplier of first choice by Abbott for all such connectors and
connector technology. In all cases, ICU's status as Preferred Supplier
shall be subject to general market conditions including, but not
limited to, new technology, timelines, quantities, product features
and pricing. For as long as ICU continues as Preferred Supplier, ICU
agrees to timely notify Abbott of improvements to the CLAVE and any
new needle safe I.V. administration set connector, and give Abbott the
ability to purchase such products upon initial introduction by ICU
into the market if the parties agree on contractual terms. After the
initial five (5) years of the Term of this Agreement, ICU's status as
Preferred Supplier will be extended automatically for one (1) year
periods unless such status is terminated by either party by written
notice at least six months before the renewal date.
(c) ICU and Abbott agree to revisit the terms and conditions of the
Agreement should there be a shift in the market conditions such as
pricing pressures which would warrant a further reduction in price of
Product sold to Abbott. If ICU refuses, or is not in a position, to
offer to Abbott such a further reduction in price of Product sold to
Abbott, ICU's Preferred Supplier status as set forth in this Amendment
shall terminate.
(d) Both parties agree to restate the Agreement as amended and to
incorporate standard Abbott supply terms in the Agreement, unless the
parties agree to other terms, including the maintenance of a term
similar to Paragraph 9 of the Agreement dealing with tooling
amortization. The parties agree to begin such discussion by January
31, 1999.
6. Remaining Terms and Conditions. All other remaining terms and conditions
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of the Agreement, as amended, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties, intending to be bound by the terms and
conditions hereof, have caused this Amendment 5 to be signed by their duly
authorized representatives on the dates set forth below.
ABBOTT LABORATORIES ICU MEDICAL, INC.
By: /s/ Richard A. Gonzalez By: /s/ Francis J. O'Brien
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Richard A. Gonzalez Francis J. O'Brien
President Chief Financial Officer
Hospital Products Division
Date: January 14, 1999 Date: January 7, 1999
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ABBOTT LABORATORIES
By: /s/ Sarah Catterson
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Sarah Catterson
Division Vice President
Corporate Purchasing
Date: January 14, 1999
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