For Purchases Direct
From Supplier Not Subject
to Competitive Bid Process
NOVATION, LLC
SUPPLIER AGREEMENT
Replaces:
UHC Agreements (CE-219, CE-269 and MS-94443)
And
VHA Agreement (CE146)
TABLE OF CONTENTS
PAGE
1.
INTRODUCTION........................1
a. Purchasing Opportunities for
Members 1
b. Supplier 1
c. Contract Prices; Non-Price
Specifications; Special
Conditions 1
2. BASIC TERMS 1
a. Purchase of Products 1
b. Optional Purchasing Arrangement 1
c. Market Competitive Terms 2
d. Changes in Contract Prices 2
e. Notification of Changes in Pricing
Terms 2
3. TERM AND
TERMINATION...................2
a. Term 2
b. Termination by
Novation 3
c. Termination by
Supplier 3
4. PRODUCT SUPPLY........................3
a. Delivery and
Invoicing.....................3
b.
Purchase Orders
3
c.Product Fill Rates; Confirmation and
Delivery Times 3
d.
Bundled Terms
3
e.Discontinuation of Products; Changes in
Packaging
4
f. Replacement or New
Products
4
g. Member
Services
4
h. Product
Deletion
4
i. Return of
Products
5
j. Failure
to Supply
5
5. PRODUCT QUALITY......................5
a. Free From
Defects......................5
b. Product
Compliance......................5
c. Patent
Infringement 6
d.
Product Condition 6
e. Recall
of Products 6
f.
Shelf Life 6
6. CENTURY COMPLIANCE.....................6
a. Definitions..........................6
b.
Representations 7
c. Remedies
7 d.
Noncompliance Notice
8
e.
Survival 8
7. REPORTS AND ELECTRONIC DATA
INTERCHANGE.........8
a. Report Content
8 b. Report Format and Delivery
8 c. Electronic Data Interchange
9
8. OBLIGATIONS OF
NOVATION...................9
a. Information to
Members.....................9 b.
Marketing Services......................9
9. MARKETING FEES9
a.
Calculation..........................9
b. Payment...........................9
10. ADMINISTRATIVE PENALTIES
10
11. NONPAYMENT OR INSOLVENCY OF A MEMBER
11
12. INSURANCE 11
a. Policy Requirements 11
b. Self-Insurance 11
c. Amendments, Notices and
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. COMPLIANCE WITH LAW ..11
14 HOLD HARMLESS 12
15. BOOKS AND RECORDS; FACILITIES INSPECTIONS 12
16. USE OF NAMES, ETC 12
17. CONFIDENTIAL INFORMATION 13
a. Nondisclosure 13
b. Definition 13
18. MISCELLANEOUS......................... 13
a. Choice of Law
........................13
b. Not
Responsible.........................13
c. Third Party
Beneficiaries.................... 13
d. Notices.............................
14
e. No
Assignment......................... 14
f.
Severability............................ 14
g. Entire
Agreement......................... 14
NOVATION, LLC
SUPPLIER AGREEMENT
1. INTRODUCTION.
a. Purchasing 0pportunities for Members.
Novation, LLC
("Novation") is engaged in providing purchasing
opportunities with respect to high quality
products and services to
participating health care providers ("Members").
Members are
entitled to participate in Novation's programs
through their membership or other participatory
status in any of the following client organizations:
VHA Inc., University
HealthSystem
Consortium, and HealthCare Purchasing Partners
International,
LLC (collectively, "Clients"). A current listing of
Members is maintained by Novation in the electronic
database included as part of the electronic data
interchange described in Subsection 7.c below
("Novation Database"). A provider will become a
"Member" for purposes of this Agreement at the
time Novation adds the provider to the Novation
Database and will cease to be a "Member" for such
purposes at the time Novation deletes the provider
from the Novation Database.
b. Supplier. Supplier is the manufacturer
of products
listed on Exhibit A (the provider of installation,
training and maintenance services for such products,
and the provider of any other services listed on
Exhibit A (such products and/or services are
collectively referred to herein as "Products").
c. Contract Prices; Non-Price Specifications;
Special Conditions. A description of the Products and
pricing therefor ("Contract Prices") is attached hereto as
Exhibit A, the other specifications are attached hereto as
Exhibit B ("Non-Price
Specifications"), and any Special Conditions are
attached hereto as Exhibit C ("Special Conditions").
2. BASIC TERMS.
a. Purchase of Products. Novation and Supplier
hereby
agree that Supplier will make the Products available
for purchase by the Members at the Contract Prices
in accordance with the terms of this Agreement;
provided, however, that this Agreement will not
constitute a commitment by any person to purchase
any of the Products.
b. Optional Purchasing Arrangement.
Novation and
Supplier agree that each Member will have the option of
purchasing the Products under the terms of this
Agreement or
under the terms of any other purchasing or pricing
arrangement that may exist between such Member
and Supplier at any time
during the Term; provided, however, that all of
Supplier's sales of the Products to Members, whether
under the pricing and other terms of this
Agreement or otherwise, will be reported by
Supplier to Novation in accordance with Section 7
below and will
be included in the aggregate dollar volume of
purchases used in
calculating the Marketing Fees payable to Novation in
accordance with Section 9 below. If any Member uses
any other purchasing or pricing arrangement
with Supplier when ordering products
covered by any contract between Supplier and
Novation, Supplier
will notify such Member of the pricing and other
significant
terms of the applicable Novation contract.
c. Market Competitive Terms. Supplier
agrees that the
prices, quality, value and technology of all
Products purchased
under this Agreement will remain market competitive at
all times during the Term Supplier
agrees to provide prompt written
notice to Novation of all offers for the sale of
the Products
made by Supplier during the Term on terms that are more
favorable to the offeree than the terms of this Agreement.
Supplier will lower the Contract Prices or increase
any discount
applicable to the purchase of the Products as
necessary to
assure market competitiveness. If at any time
during the Term
Novation receives information from any source
suggesting that
Supplier's prices, quality, value or technology are
not market competitive, Novation may provide written notice
of such
information to Supplier, and Supplier will, within five (5)
business days for Novation's private label Products
and within ten (10) business days for all other
Products, advise Novation
in writing of and fully implement all adjustments
necessary to assure market competitiveness.
d. Changes in Contract Prices. Unless otherwise
expressly agreed in any exhibit to this Agreement,
the Contract
Prices will not be increased and any discount
will not be
eliminated or reduced during the Term. In
addition to any
changes made to assure market competitiveness,
Supplier may lower the Contract Prices or increase
any discount applicable to the purchase of the Products
at any time.
e. Notification of Changes in Pricing Terms. Supplier
will provide all Members with not less than
forty-five (45)
days' prior written notice and Novation with not less than
sixty (60) days' prior written notice of any change
in pricing terms permitted or required by this
Agreement. For purposes of the foregoing
notification requirements, a change in pricing
terms will mean any change that affects the
delivered price to
the Member, including, without limitation, changes in list
prices, discounts or pricing tiers or schedules.
Such prior
written notice will be provided in such format
and in such detail as may be required by Novation
from time to time, and will include, at a minimum,
sufficient information to determine line item pricing
of the Products for all affected Members.
3. TERM AND TERMINATION.
a. Term. This Agreement will be effective
as of the
effective date set forth in Exhibit D
attached hereto
("Effective Date"), and, unless sooner terminated,
will continue
in full force and effect for the initial term set
forth in the Non-Price Specifications and for any
renewal terms set forth in the Non-Price
Specifications by Novation's delivery of written
notice of renewal to Supplier not less than ten (10)
days prior to the end of the initial term or any
renewal term, as
applicable. The initial term, together with the
renewal terms, if any, are collectively referred to
herein as the "Term."
b. Termination by Novation. Novation may
terminate this
Agreement at any time for any reason whatsoever by
delivering not less than ninety (90) days' prior
written notice thereof to Supplier. In
addition, Novation may terminate this Agreement
immediately by delivering written notice thereof
to Supplier
upon the occurrence of either of the following events:
(1) Supplier breaches this Agreement; or
(2) Supplier becomes bankrupt or insolvent or
makes an
unauthorized assignment or goes into
liquidation or
proceedings are initiated for the purpose of
having a receiving order or winding up order
made against Supplier, or Supplier applies to
the courts for protection from its creditors.
c. Termination by Supplier. Supplier may terminate
this Agreement at any time for any reason
whatsoever by
delivering not less than one hundred eighty (180)
days' prior written notice thereof to Novation.
4. PRODUCT SUPPLY.
a. Delivery and Invoicing. On and after
the Effective
Date, Supplier agrees to deliver Products ordered by
the Members to the Members, FOB destination, and
will direct it's invoices
to the Members in accordance with this Agreement. Supplier
agrees to prepay and absorb charges, if any, for
transporting Products to the Members. Payment terms
are 2%-10, Net 30 days. Supplier will
make whatever arrangements are reasonably
necessary with the Members to implement the terms of this
Agreement; provided, however, Supplier will not
impose any
purchasing commitment on any Member as a
condition to the
Member's purchase of any Products pursuant to this
Agreement.
b. Purchase Orders. This Agreement will
govern all
orders for and sales of the Products by and to
the Members,
notwithstanding any pre-printed terms on
Supplier's forms;
provided, however, the terms of the usual purchase
orders of the Members will supersede this Agreement
in the event of conflict
or inconsistency.
c. Product Fill Rates; Confirmation and
Delivery Times.
Supplier agrees to provide product fill rates to
Members of
greater than ninety-five percent (95%), calculated as
line item orders. Supplier will provide confirmation
of orders from
Members via the electronic data interchange
described in
Subsection 7.c below within two (2) business
days after
placement of the order and will deliver the
Products to the
Members within ten (10) business days after
placement of the
order.
d. Bundled Terms. Supplier agrees to
give Novation
prior written notice of any offer Supplier makes to
any Member
to sell products that are not covered by this
Agreement in
conjunction with Products covered by this
Agreement under
circumstances where the Member has no real economic
choice other
than to accept such bundled terms.
e. Discontinuation of Products; Changes in
Packaging.
Supplier will have no
unilateral right to discontinue any of the Products
or to make
any changes in packaging which render any of
the Products
substantially different in use, function or
distribution.
Supplier may request Novation in writing to agree to
a proposed
discontinuation of any Products or a proposed
change in
packaging for any Products at least ninety (90)
days prior to
the proposed implementation of the discontinuation
or change.
Under no circumstances will any Product
discontinuation or
packaging changes be permitted under this
Agreement without
Novation's agreement to the discontinuation or
change. In the
event Supplier implements such proposed
discontinuation or
change without Novation's agreement thereto in
writing, in
addition to any other rights and remedies
Novation or the
Members may have by reason of such discontinuation
or change,
(i) Novation will have the right to terminate any or
all of the
Product(s) subject to such discontinuation or
change or to
terminate this Agreement in its entirety
immediately upon
becoming aware of the discontinuation or change or
any time
thereafter by delivering written notice thereof
to Supplier;
(ii) the Members may purchase products
equivalent to the
discontinued or changed Products from other sources
and Supplier
will be liable to the Members for all reasonable costs
in excess of the Contract Prices plus any other
damages which they may incur; and (iii) Supplier
will be liable to Novation and the
Clients for any loss of Marketing Fees resulting
from such
unacceptable discontinuation or change plus any
other damages
which they may incur.
f. Replacement or New Products.
Supplier will
have no unilateral right to replace any of the
Products listed
in Exhibit A with other products or to add new
products to this
Agreement. Supplier may request Novation in writing
to agree
to a replacement of any of the Products or the
addition of a
new product that is closely related by function or
use to an
existing Product at least sixty (60) days prior to
the proposed
implementation of the replacement or to the
new product
introduction. Under no circumstances will
any Product
replacement or new product addition to
this Agreement be
permitted without Novation's agreement to the
replacement or
new product.
g. Member Services. Supplier will consult with each
Member to identify the
Member's policies relating to access to
facilities and
personnel. Supplier will comply with such policies
and will
establish a specific timetable for sales
calls by sales
representatives to satisfy the needs of the Member.
Supplier
will promptly respond to Members' reasonable
requests for
verification of purchase history. If requested by
Novation or
any Members, Supplier will provide, at Supplier's
cost, on-site
inservice training to Members' personnel for pertinent
Products.
h. Product Deletion. Notwithstanding
anything to the
contrary contained in this Agreement, Novation may
delete any
one or more of the Products from this Agreement at
any time, at
will and without cause, upon not less than sixty
(60) days' prior written notice to Supplier.
i. Return of Products. Any Member, in
addition to and
not in limitation of any other rights and remedies,
will have the right to return Products to Supplier
under any of the
following circumstances: (1) the Product is ordered
or shipped
in error; (2) the Product is no longer needed by the
Member due
to deletion from its standard supply list or
changes in usage patterns, provided the Product is
returned at least six (6)
months prior to its expiration date and is in
a re-saleable
condition; (3) the Product is received outdated or
is otherwise
unusable; (4) the Product is received damaged, or
is defective
or nonconforming; (5) the Product is one which
a product
manufacturer or supplier specifically authorizes for
return; or (6) the Product is recalled. Supplier
agrees to accept the
return of Products under these circumstances without
charge and
for full credit.
j. Failure to Supply. In the event of
Supplier's failure
to perform in accordance with the terms of this
Agreement, the
Member may purchase products equivalent to the
Products from
other sources and Supplier will be liable to the
Member for all reasonable costs in excess of the
Contract Prices plus any other damages which they
may incur. In such event, Supplier will also
be liable to Novation and the Clients for any loss
of Marketing
Fees resulting from such failure plus any other
damages which
they may incur. The remedies set forth in this
Subsection are
in addition to any other rights and remedies
Novation, the
Clients or the Members may have resulting from such
failure.
5. PRODUCT QUALITY.
a. Free From Defects. Supplier warrants
the Products
against defects in material, workmanship and design
for the
warranty period set forth in the Non-Price
Specifications
("Warranty Period"). Supplier will make all
necessary
arrangements to assign such warranty to the
Members. Supplier
further represents and warrants that the Products
will conform
to the specifications, drawings, and samples
furnished by
Supplier or contained in the Non-Price
Specifications and will be safe for their
intended use. If any Products are defective
and a claim is made by a Member on account of such
defect during
the Warranty Period, Supplier will, at the option of
the Member,
either replace the defective Products or credit
the Member.
Supplier will bear all costs of returning and
replacing the
defective Products, as well as all risk of loss or
damage to the
defective Products from and after the time they
leave the
physical possession of the Member. The warranties
contained in
this Subsection will survive any inspection,
delivery,
acceptance or payment by a Member. In addition, if
there is at
any time wide-spread failure of the Products even
after the
Warranty Period has ended, the Member may return
all said
Products for credit or replacement, at its
option. This
Subsection and the obligations contained herein will
survive the
expiration or earlier termination of this
Agreement. The
remedies set forth in this Subsection are in addition
to and not
a limitation on any other rights or remedies
that may be
available against Supplier.
b. Product Compliance. Supplier represents and
warrants to
Novation, the Clients and the Members that the
Products are, if
required, registered, and will not be distributed,
sold or
priced by Supplier in violation of any federal,
state or local
law. Supplier represents and warrants that as of
the date of
delivery to the Members all Products will not be
adulterated or
misbranded within the meaning of the Federal Food,
Drug and
Cosmetic Act and will not violate or cause a
violation of any
applicable law, ordinance, rule, regulation or
order. Supplier
agrees it will comply with all applicable Good
Manufacturing
Practices and Standards contained in 21 C.F.R. Parts
21O, 211,
225, 226, 600, 606, 610, 640, 660, 680, and 820.
Supplier's
representations, warranties and agreements in
this Subsection
will survive the expiration or earlier termination
of this
Agreement.
c. Patent Infringement. Supplier
represents and
warrants that sale or use of the Products will not
infringe any United States patent. Supplier will, at
its own expense, defend
every suit which will be brought against Novation
or a Member for any alleged infringement of any
patent by reason of the sale or use of the Products
and will pay all costs, damages and
profits recoverable in any such suit. This
Subsection and the
obligations contained herein will survive the
expiration or
earlier termination of this Agreement. The remedies
set forth
in this Subsection are in addition to and not a
limitation on
any other rights or remedies that may be
available against
Supplier.
d. Product Condition. Unless otherwise
stated in the
Non-Price Specifications or unless agreed upon by a
Member in
connection with Products it may order, all Products
will be new.
Products which are demonstrators, used, obsolete,
seconds, or
which have been discontinued are unacceptable
unless otherwise specified in the Non-Price
Specifications or the Member accepts
delivery after receiving notice of the
condition of the
Products.
e. Recall of Products. Supplier will
reimburse the
Members for any cost associated with any Product
corrective
action, withdrawal or recall requested by Supplier
or required
by any governmental entity. In the event a product
recall or a court action impacting supply occurs,
Supplier will notify
Novation in writing within twenty-four (24) hours
of any such
recall or action. Supplier's obligations in this
Subsection
will survive the expiration or earlier termination
of this
Agreement.
f. Shelf Life. Sterile Products and other
Products with
a limited shelf life sold under this Agreement
will have the
longest possible shelf life and the latest possible
expiration
dates. Unless required by stability considerations,
there will
not be less than a eighteen (18) month interval
between a
Product's date of delivery by Supplier to the
Member and its
expiration date.
6. CENTURY COMPLIANCE.
a. Definitions. For purposes of this
Section, the
following terms have the respective meanings given below:
(1) "Systems" means any of the Products,
systems of
distribution for Products and Product
manufacturing systems
that consist of or include any computer
software, computer
firmware, computer hardware (whether general
or special
purpose), documentation, data, and other similar
or related
items of the automated, computerized,
and/or software
systems that are provided by or through
Supplier or
utilized to manufacture or distribute the
Products provided by or through Supplier
pursuant to this Agreement, or any component
part thereof, and any services provided by
or
through Supplier in connection therewith.
(2) "Calendar-Related" refers to date
values based
on the "Gregorian calendar" (as defined in the
Encyclopedia Britannica, 15th edition, 1982, page
602) and to all uses in any manner of those
date values, including without
limitation manipulations, calculations,
conversions,
comparisons, and presentations.
(3) "Century Noncompliance" means any
aspects of
the Systems that fail to satisfy the requirements
set forth in Subsection 6.b below.
b. Representations. Supplier warrants,
represents
and agrees that the Systems
satisfy the following requirements:
(1) In connection with the use and processing
of Calendar-Related data, the Systems will not
malfunction,
will not cease to function, will not generate
incorrect
data, and will not produce incorrect results.
(2) In connection with providing
Calendar-Related
data to and accepting Calendar-Related data
from other automated, computerized, and/or
software systems and users via user interfaces,
electronic interfaces, and data
storage, the Systems represent dates without
ambiguity as to century.
(3) The year component of Calendar-Related
data that
is provided by the Systems to or that is
accepted by the Systems from other automated,
computerized, and/or software systems and
user interfaces, electronic interfaces,
and
data storage is represented in a four-digit
CCYY format, where CC represents the two digits
expressing the century and YY represents the two
digits expressing the year within that century
(e.g., 1996 or 2003).
(4) Supplier has verified through testing
that the
Systems satisfy the requirements of this Subsection
including, without limitation, testing of
each of the
following specific dates and the transition to and from
each such date: December3l, 1998; January 1, 1999;
September 9, 1999; September 10, 1999; December
31, 1999; January 1, 2000; February 28, 2000;
February 29, 2000;
March 1, 2000; December 3 1, 2000; January 1, 2001;
December 31, 2004; and January 1, 2005.
c. Remedies. In the event of any Century
Noncompliance
in the Systems in any respect, in addition to any
other remedies that may be available to Novation or
the Members, Supplier will, at no cost
to the Members, promptly under the circumstances
(but, in all cases, within thirty (30) days after
receipt of a written request from any Member, unless
otherwise agreed by the Member in writing) eliminate
the Century Noncompliance from the Systems.
d. Noncompliance Notice. In the event
Supplier becomes
aware of (i.) any possible or actual Century
Noncompliance in the Systems or (ii) any
international, governmental, industrial,
or other standard (proposed or adopted) regarding
Calendar-
Related data and/or processing, or Supplier
begins any
significant effort to conform the Systems to any
such standard, Supplier will promptly provide the
Members with all relevant information in writing
and will timely provide the Members with updates to
such information. Supplier will respond promptly and
fully to inquiries by the Members, and timely provide
updates to any responses provided to the Members, with
respect to (i.) any possible or actual Century
Noncompliance in the Systems or (ii) any
international, governmental, industrial, or other
standards. In the foregoing, the use of "timely"
means promptly after the relevant information becomes
known to or is developed by or for Supplier.
e. Survival. Supplier's representations,
warranties
and agreements in this Section will continue in effect
throughout the Term and will survive the expiration or
earlier termination of this Agreement.
7. REPORTS AND ELECTRONIC DATA INTERCHANGE.
a. Report Content. Within twenty (20) days
after the end
of each full and partial month during the Term
("Reporting
Month"), Supplier will submit to Novation a report
in the form of a diskette containing the following
information in form and content reasonably satisfactory
to Novation:
(1) the name of Supplier, the Reporting
Month and
year and the Agreement number (as provided to Supplier by
Novation);
(2) with respect to each Member (described by LIC
number (as provided to
Supplier by Novation), health industry
number (if
applicable), full name, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇, zip
code and, if applicable, tier and committed
status), the
number of units sold and the amount of net
sales for each Product on a line item basis, and
the sum of net sales and the associated
Marketing Fees for all Products purchased by such
Member directly or indirectly from Supplier
during the Reporting Month, whether under the
pricing and other terms of
this Agreement or under the terms of any
other
purchasing or pricing arrangements that may
exist between the Member and Supplier.
(3) the sum of the net sales and the
associated
Marketing Fees for all
Products sold to all Members during the Reporting Month;
and
(4) such additional information as Novation
may
reasonably request from
time to time.
b. Report Format and Delivery. The reports
required by
this Section will be
submitted electronically in Excel Version 7 or Access
Version 7 and in accordance with other specifications
established by Novation from time to time and will be
delivered to:
Novation
Attn: SRIS Operations
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
c. Electronic Data Interchange. In addition
to the
reporting requirements set forth in Subsections 7.a
and 7.b
above, the parties agree to facilitate the
administration of
this Agreement by transmitting and
receiving data
electronically. The parties agree to all
terms and conditions
set forth in Exhibit E attached hereto.
8. OBLIGATIONS OF NOVATION.
a. Information to Members. After the
execution of this
Agreement, Novation, in conjunction with
the Clients, will
deliver a summary of the purchasing arrangements
covered by this
Agreement to each Member and will, from time to
time, at the request of Supplier, deliver to each
Member reasonable and
appropriate amounts and types of materials
supplied by Supplier
to Novation which relate to the purchase of the Products.
b. Marketing Services. Novation, in
conjunction with
the Clients, will market the purchasing arrangements
covered by
this Agreement to the Members. Such promotional
services may
include, as appropriate, the use of direct mail,
contact by
Novation's field service delivery team, member
support services,
and regional and national meetings and
conferences. As
appropriate, Novation, in conjunction with the
Clients, will
involve Supplier in these promotional activities
by inviting
Supplier to participate in meetings and
other reasonable
networking activities with Members.
9. MARKETING FEES.
a. Calculation. Supplier will
pay to
Novation, as the authorized collection agent for
the Clients,
marketing fees ("Marketing Fees") belonging to the
Clients equal
to the Agreed Percentage of the aggregate gross
charges of all
net sales of the Products to the Members directly or
indirectly
from Supplier, whether under the pricing and
other terms of this
Agreement or under the terms of any other
purchasing or pricing
arrangements that may exist between the Members and
Supplier.
Such gross charges will be determined without any
deduction for
uncollected accounts or for costs incurred in the
manufacture,
provision, sale or distribution of the
Products, and will
include, but not be limited to, charges for the
sales of
products, the provision of installation,
training and
maintenance services, and the provision of any
other services
listed on Exhibit A. The "Agreed Percentage" will be
defined in
the Non-Price Specifications.
b. Payment. On or about the Effective
Date, Novation
will advise Supplier in writing of the amount
determined by
Novation to be Supplier's monthly estimated
Marketing Fees.
Thereafter, Supplier's monthly estimated Marketing
Fees may be
adjusted from time to time upon written
notice from Novation
based on actual purchase data. No later than the
tenth (10th) day of each month, Supplier will
remit the monthly estimated
Marketing Fees for such month to Novation. Such
payment will be
adjusted to reflect the reconciliation
between the actual
Marketing Fees payable for the immediately
preceding month with
the estimated Marketing Fees actually paid during
such preceding
month. Supplier will pay all estimated and
adjusted Marketing Fees by check made payable to
"Novation, LLC." All checks should
reference the Agreement number. Supplier will
include with its
check the reconciliation calculation used by
Supplier to
determine the payment adjustment, with separate
amounts shown
for each Client's component thereof Checks sent by
first class mail will be mailed to the following address:
Novation
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Checks sent by courier (Federal Express, United Parcel
Service
or messenger) will be addressed as follows:
The Northern Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇▇ Receipt & Dispatch
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Novation, Suite 1420
10. ADMINISTRATIVE PENALTIES. In the event
Supplier fails to pay the Marketing Fees in
accordance with the requirements of Section 9 above,
Novation may invoice Supplier for the Marketing Fees
estimated by Novation to be due, payable within ten
(10) days of the date of such invoice. Invoice by
Novation or
payment by Supplier will not relieve Supplier of
its payment
obligations under Section 9. In addition, upon the
occasion of the first failure to receive Marketing
Fees, to receive reports described in Section 7
above, or to receive notice of change in pricing
terms described in Subsection 2.e above, in
each case
within the time and manner required by this
Agreement, Supplier will receive a written warning.
Upon the second and any
subsequent failure to provide such Marketing Fees,
reports or
notices, Supplier will pay an administrative
penalty in
accordance with the following schedule:
2nd failure: $ 500.00
3rd failure: $ 1,000.00
4th failure: $ 2,500.00
5th failure: $ 5,000.00
6th & each subsequent failure:
$10,000.00
Novation's assessment of administrative penalties in
accordance
with this Section will be in addition to any other
rights and remedies Novation or the
Clients may have by reason of
Supplier's failure to pay the Marketing Fees or
provide the
reports or notices within the time and manner
required by this Agreement.
11. NONPAYMENT OR INSOLVENCY OF A MEMBER. If a
Member fails to pay Supplier for Products, or if a
Member becomes bankrupt or insolvent or makes an
assignment for the benefit of creditors or goes into
liquidation, or if proceedings are initiated for the
purpose of having a receiving order or winding up
order made against a Member, or if a Member
applies to the courts for protection from its
creditors, then, in any such case, this
Agreement will not terminate, but Supplier will have
the right, upon prior written notice to Novation
and the Member, to
discontinue selling Products to that Member.
12. INSURANCE.
a. Policy Requirements. Supplier will
maintain and keep
in force during the Term product liability,
general public
liability and property damage insurance against any insurable
claim or claims which might or could arise
regarding Products purchased by the Members from
Supplier. Such insurance will
contain a minimum combined single limit of liability
for bodily injury and property damage in the
amounts of not less than
$2,000,000 per occurrence and $10,000,000 in the
aggregate; will name Novation, the Clients and the
Members, as their interests may appear,
as additional insureds, and will
contain an
endorsement providing that the carrier will provide
directly to all named insured copies of all
notices and endorsements.
Supplier will provide to Novation, within fifteen
(15) days
after Novation's request, an insurance certificate
indicating
the foregoing coverage, issued by an insurance
company licensed to do business in the relevant
states and signed by an
authorized agent.
b. Self-Insurance. Notwithstanding
anything to the
contrary in Subsection 12.a above, Supplier may
maintain a selfinsurance program for all or any part
of the foregoing liability risks, provided
such self-insurance policy in all material
respects complies with the requirements
applicable to the
product liability, general public liability and
property damage insurance set forth in Subsection
12.a. Supplier will provide Novation, within fifteen
(15) days after Novation's request: (1) the self-
insurance policy; (2) the name of the company
managing the self-insurance program and
providing reinsurance, if any;
(3) the most recent annual reports
on claims and reserves for the program; and (4) the
most recent annual actuarial report on such program.
c. Amendments, Notices and Endorsements.
Supplier will
not amend, in any material respect that affects the
interests of Novation, the Clients or the
Members, or terminate said
liability insurance or self-insurance program
except after
thirty (30) days' prior written notice to Novation
and will
provide to Novation copies of all notices and
endorsements as soon as practicable after it receives or
gives them.
13. COMPLIANCE WITH LAW. Supplier represents and
warrants that
to the best of its knowledge, after due inquiry,
it is in
compliance with all federal and state statutes, laws,
ordinances and regulations applicable to it
("Legal Requirements") which
are material to the operation of its business and the
conduct of its affairs, including Legal
Requirements pertaining to the
safety of the Products, occupational health
and safety,
environmental protection, nondiscrimination,
antitrust, and
equal employment opportunity. During the Term, Supplier will: (1)
promptly notify Novation of any lawsuits, claims, administrative actions
or other proceedings asserted or commenced against it which assert in
whole or in part that Supplier is in noncompliance with any Legal
Requirement which is material to the operation of its business and the
conduct of its affairs and (2) promptly provide Novation with true and
correct copies of all written notices of adverse findings from the U.S.
Food and Drug Administration ("FDA") and all written results of FDA
inspections which pertain to the Products.
14. HOLD HARMLESS. Supplier will indemnify, hold harmless,
and, if requested, defend Novation, the Clients and
the Members, and their respective
officers, directors, regents, agents,
affiliates and employees, from and against
any claims,
liabilities, damages, actions, costs and expenses
(including
reasonable attorneys' fees and court costs) of any kind or
nature, whether at law or in equity, arising from or
caused by
(1) the breach of any representation, warranty,
covenant or
agreement of Supplier contained in this Agreement,
or (2) the condition of any Product at the time of
its delivery to a Member
pursuant to this Agreement, including a defect in
material,
workmanship or design, whether such breach or
condition is
caused by the negligence of any person seeking
indemnification
hereunder or otherwise; provided that such
indemnification, hold harmless and right to defense
will not be applicable where the claim, liability,
damage, action, cost or expense arises solely
as a result of an act or failure to act of the person
seeking to be indemnified, held harmless or defended
hereunder. This
Section and the obligations contained herein will
survive the
expiration or earlier termination of this
Agreement. The
remedies set forth in this Section are in addition to
and not a limitation on any other rights or
remedies that may be available
against Supplier.
15. BOOKS AND RECORDS; FACILITIES INSPECTIONS.
Supplier agrees
to keep, maintain and preserve complete, current
and accurate
books, records and accounts of the transactions
contemplated by this Agreement and such additional
books, records and accounts
as are necessary to establish and verify Supplier's
compliance with this Agreement. All such books,
records and accounts will
be available for inspection and audit
by Novation
representatives at any time during the Term and
for two (2)
years thereafter, but only during reasonable business
hours and upon reasonable notice. Novation agrees
that its routine audits
will not be conducted more frequently than
twice in any
consecutive twelve (12) month period, subject to
Novation's
right to conduct special audits whenever it deems
it to be
necessary. In addition, Supplier will make its
manufacturing
and packaging facilities available for inspection
from time to time during the Term by Novation
representatives, but only during reasonable
business hours and upon reasonable notice.
The exercise by Novation of the right to inspect
and audit is
without prejudice to any other or additional rights
or remedies
of either party.
16. USE OF NAMES, ETC. Supplier agrees that it will
not use in
any way in its promotional, informational
or marketing
activities or materials (i.) the names,
trademarks, logos,
symbols or a description of the business or
activities of
Novation or any Client or Member without in each
instance first obtaining the prior written consent
of the person owning the
rights thereto; or (ii) the existence or content
of this
Agreement without in each instance first obtaining
the prior
written consent of Novation.
17. CONFIDENTIAL INFORMATION.
a. Nondisclosure. Supplier agrees that it will:
(1) keep strictly confidential and
hold in trust
all confidential information of Novation, the
Clients and
the Members;
(2) not use the confidential
information for any
purpose other than the performance of its
obligations under this Agreement,
without the prior written consent of
Novation;
(3) not disclose the confidential
information to
any third party (unless required by law) without
the prior written consent of Novation; and
(4) not later than thirty (30) days
after the
expiration or earlier termination of this
Agreement, return to Novation, the Client or the
Member, as the case may be, the confidential
information.
b. Definition. "Confidential information", as
used in
Subsection 17.a above, will consist of all
information relating
to the prices and usage of the Products
(including at,
information contained in the reports produced
by Supplier
pursuant to Section 7 above) and all documents
and other
materials of Novation, the Clients and the Members
containing
information relating to the programs of Novation, the
Clients or the Members of a proprietary or
sensitive nature not readily available through
sources in the public domain. In no
event
will Supplier provide to any person any information
relating to the prices it charges the Members for
Products ordered pursuant to this Agreement without the
prior written consent of Novation.
18. MISCELLANEOUS.
a. Choice of Law. This Agreement will be
governed by and
construed in accordance with the internal
substantive laws of
the State of Texas and the Texas courts will have
jurisdiction
over all matters relating to this Agreement;
provided, however, the terms of a
Member's purchase order will be governed by and
construed in accordance with the choice of law
and venue
provisions set forth in the purchase order.
b. Not Responsible. Novation and the
Clients will not
be responsible or liable for any Member's
breach of any
purchasing commitment or for any other actions of
any Member.
In addition, none of the Clients will be responsible
or liable for the obligations of any party to this
Agreement.
c. Third Party Beneficiaries. All Clients
and Members
are intended third party beneficiaries of this
Agreement. All
terms and conditions of this Agreement which are
applicable to
the Clients will inure to the benefit of and be
enforceable by the Clients and their respective
successors and assigns. All
terms and conditions of this Agreement which are
applicable to
the Members will inure to the benefit of and be
enforceable by the Members and their respective
successors and assigns.
d. Notices. Except as otherwise
expressly provided
herein, all notices or other communications
required or
permitted under this Agreement will be in writing
and will be deemed sufficient when mailed by
United States mail, or
delivered in person against receipt to the party to
which it is to be given, at the address of such party
set forth below:
If to Supplier:
To the address set forth on the signature page
of this Agreement
If to Novation:
Novation
Attn: Vice President, Contract Services
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as the party will have furnished
in
writing in accordance with the provisions of this
Subsection.
e. No Assignment. No assignment of all or
any part of
this Agreement may be made without the prior written
consent of the other party; except that Novation may
assign its rights and obligations to any affiliate
of Novation. Any assignment of all or any part of
this Agreement by either party will not relieve that
party of the responsibility of performing its
obligations hereunder to the extent that such
obligations are not satisfied in full by the
assignee. This Agreement will be binding upon and
inure to the benefit of the parties' respective
successors and assigns.
f. Severability. Whenever possible, each
provision of
this Agreement will be interpreted in such a manner
as to be effective and valid under applicable law,
but if any provision of this Agreement
will be prohibited by or invalid under
applicable law, such provision will be ineffective to
the extent of such prohibition or
invalidity without invalidating the
remainder of such provision or the remaining
provisions of this Agreement. Each party will, at
its own expense, take such
action as is reasonably necessary to defend the
validity and
enforceability of this Agreement and will cooperate
with the
other party as is reasonably necessary in such defense.
g. Entire Agreement. This Agreement,
together with the
exhibits listed below and each Member's purchase
order will
constitute the entire agreement between each Member
and Supplier and no other terms and conditions in
any document, acceptance, or acknowledgment will
be effective or binding upon a Member
unless expressly agreed to in writing. The
following exhibits are incorporated by reference in this
Agreement:
Exhibit A Product and Service Description and Pricing
Exhibit B Non-Price Specifications
Exhibit C Special Conditions
Exhibit D Effective Date
Exhibit E Electronic Data Interchange Agreement
[Other Exhibits listed, if any]
SUPPLIER: Kinetic Concepts, Inc.
ADDRESS: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
SIGNATURE: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
TITLE: Vice President, National Accounts DATE: November 11, 1998
NOVATION, LLC
SIGNATURE: /S/ ▇▇▇▇ MKENNA
----------------
TITLE: Senior Vice President, Operations DATE: November 11, 1998
