Exhibit 10.81
For Purchases Through an Authorized Distributor
Subject to Competitive Bid Process
SUPPLIER AGREEMENT
Between
NOVATION, LLC
and
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MS91032
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NOVATION, LLC
SUPPLIER AGREEMENT
1. Introduction
a. Purchasing opportunities 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"). Novation is acting as the
exclusive agent for each of the Clients and certain of each Client's
subsidiaries and affiliates, respectively (and not collectively), with
respect to this Agreement A current listing of Members is maintained by
Novation in the electronic database described in the Guidebook referred
to 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. Authorized Distributors. Novation and/or the Clients have
entered into arrangements with certain distributors ("Authorized
Distributors") that have agreed to distribute the Products to Members.
A current listing of Authorized Distributors is maintained by Novation
in the Novation Database. A distributor will become an "Authorized
Distributor" for purposes of this Agreement at the time Novation adds
the distributor to the Novation Database and will cease to be an
"Authorized Distributor" for such purposes at the time Novation deletes
the distributor from the Novation Database. Any limitations on the
scope of an Authorized Distributor's authority will also be set forth
in the Novation Database. By reason of requirements of law, regulation
or internal policy of certain Members, from time to time Novation may
identify underutilized businesses as Authorized Distributors,
c. 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"),
d. Bid. Supplier has responded to Novation's Invitation to Bid
by submitting its written offer ("Bid") to Novation consisting of this
Agreement, the listing of Products and pricing therefor ("Award
Prices") attached hereto as Exhibit A, the other specifications
attached hereto as Exhibit B ("Non-Price Specifications"), the Terms of
Supplier's Participation in Committed Programs attached hereto as
Exhibit C, and any other materials required to be submitted in
accordance with the Bid Instructions.
2. CONTRACT AWARD.
a. Letter of Award, By executing and delivering the Letter of
Award attached hereto as Exhibit D ("Award Letter") to Supplier,
Novation will have accepted the Bid, and Novation and Supplier
therefore agree that Supplier will make the Products available for
purchase by the Authorized Distributors at the Award Prices for resale
to the Members in accordance with the terms of this Agreement;
provided, however, that Novation's award of this Agreement to Supplier
will not constitute a Commitment by any person to purchase any of the
Products, No obligations of Novation set forth in this Agreement will
be valid or enforceable against Novation unless and until the Award
Letter has been duly executed by Novation and attached as an exhibit
hereto. Supplier acknowledges that, in making its award to Supplier,
Novation has materially relied on all representations, Warranties and
agreements made by Supplier as part of the Bid and that all such
representations, warranties and agreements will survive acceptance of
the Bid.
b. Optional Purchasing Arrangement, Novation and Supplier
agree that each Member will have the option of purchasing the Products
tinder 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,
regardless of the arrangement, Supplier will comply with Sections 7 and
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 Award Prices or increase arty
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 live (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 Award Prices. Unless otherwise expressly agreed in
any exhibit to this Agreement, the Award 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 Award 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 not less than sixty (60) days' prior written notice to Novation
and not less than forty-five (45) days' prior written notice to all
Authorized Distributors 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 they 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.
f. Underutilized Businesses. Certain Members may be
required by law, regulation and/or internal policy to do business with
underutilized businesses such as Minority Business Enterprises (MBE),
Disadvantaged Business Enterprises (ORE), Small Business Enterprises
(SEE), Historically Underutilized Businesses (HUB) and/or Women-owned
Business Enterprises (WBE). To assist Novation in helping Members meet
these requirements, Supplier will comply with all Novation policies
and programs with respect to such businesses and will provide, on
request, Novation or any Member with statistical or other information
with respect to Supplier's utilization of such businesses as a vendor,
distributor, contractor or subcontractor.
3. TERM AND TERMINATION.
a. Term. This Agreement will be effective as of the effective
date set forth in the Award Letter ("Effective Date"), and, unless
sooner terminated, will continue in full force and effect for the
initial term as 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 tern, 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.
Novation's right to terminate this Agreement due to Supplier's breach
in accordance with this Subsection is in addition to any other rights
and remedies Novation, the Clients, the Members or the Authorized
Distributors may have resulting from such breach, including, but not
limited to, Novation's and the Clients' right to recover all loss of
Marketing Fees resulting from such breach through the date of
termination and for one hundred eighty (180) days thereafter.
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 Authorized
Distributors on behalf of Members to the Authorized Distributors, FOB
destination, and will direct its invoices to the Authorized
Distributors in accordance with this Agreement. Supplier agrees to
prepay and absorb charges, if any, for transporting Products to the
Authorized Distributors. Payment terms are 2%-30, Net 31 days. Supplier
will make whatever arrangements are reasonably necessary with the
Authorized Distributors to implement the terms of this Agreement;
provided, however, Supplier will not impose any purchasing commitment
on any Member or Authorized Distributor as a condition to the Member's
or Authorized Distributor's purchase of any Products pursuant to this
Agreement.
b. Product Fill Rates: Confirmation and Delivery Times. Supplier
agrees to provide product till rates to the Authorized Distributors of
greater than ninety-five percent (95%), calculated as line item orders.
Supplier will provide confirmation of orders from the Authorized
Distributors via the electronic data interchange described in the
Guidebook referred to in Subsection 7.c below within two (2) business
days after placement of the order and will deliver the Products to the
Authorized Distributors within ten (10) business days after placement
of the order.
c. Bundled Terms. Supplier agrees to give Novation prior
written notice of any offer Supplier makes to any Member or Authorized
Distributor to sell products that are not covered by this Agreement in
conjunction with Products covered by this Agreement under circumstances
where the Member or Authorized Distributor has no real economic choice
other than to accept such bundled terms,
d. 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 Award 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.
e. 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.
f. 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.
g. 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.
h. Return of Products. Any Member or Authorized Distributor, 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-salable 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
through a distributor; and (6) the Product is recalled. ▇▇▇▇▇▇▇▇ agrees
to accept the return of Products under these circumstances without
charge and for full credit.
i. Failure to Supply, In the event of Supplier's failure to
perform its supply obligations in accordance with the terms of this
Section 4, the Member or the Authorized Distributor may purchase
products equivalent to the Products from other sources and Supplier
will be liable to the Member or the Authorized Distributor for all
reasonable costs in excess of the Award 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, the Members or the Authorized
Distributors may have resulting from such failure.
5. PRODUCT QUALITY.
a. Free From Defects. Supplier warrants the Products against
defects in material, workmanship, design and manufacturing. 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 or an Authorized Distributor on account of such
defect, Supplier will, at the option of the Member or the Authorized
Distributor, either replace the defective Products or credit the Member
or the Authorized Distributor. 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 or the Authorized
Distributor. The warranties contained in this Subsection will survive
any inspection, delivery, acceptance or payment by a Member or an
Authorized Distributor. In addition, if there is at any time wide-
spread failure of the Products, the Member or the Authorized
Distributor 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, the Authorized Distributors 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 Authorized Distributors 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 210, 211, 225, 226, 600, 606, 610, 640,
660, 680 and 820. Supplier represents and warrants that it will provide
adequate warnings and instructions to inform users of the Products of
the risks, if any, associated with the use of the Products. 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, a Member or an Authorized Distributor 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
arty 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 Authorized
Distributors and 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 arid 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 an
eighteen (18) month interval between a Product's date of delivery by
Supplier to the Authorized Distributor 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:
September 9,1999; September 10, 1999; December 31, 1999; January
1, 2000; February 28, 2000;February 29, 2000; March 1, 2000;
December 31, 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 OTHER INFORMATION REQUIREMENTS.
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, street address, city, state, 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
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c. Other Information Requirements 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 information electronically and by complying
with the information requirements set forth in Exhibit E attached
hereto Supplier further agrees that, except to the extent of any
inconsistency with the provisions of this Agreement, it will comply
with all information requirements set forth in the Novation Information
Requirements Guidebook ("Guidebook"). On or about the Effective Date,
Novation will provide Supplier with a current copy of the Guidebook and
will thereafter provide Supplier with updates and/or revisions to the
Guidebook from time to time.
8. OBLIGATIONS OF NOVATION.
a. Information to Members and Authorized Distributors. After
issuing the Award Letter, Novation, in conjunction with the Clients,
will deliver a summary of the purchasing arrangements covered by this
Agreement to each Member and each Authorized Distributor and will, from
time to time, at the request of Supplier, deliver to each Member and
each Authorized Distributor 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 each of the Clients and certain of each
Client's subsidiaries and affiliates, respectively (and not
collectively), marketing lees ("Marketing Fees") belonging to any of
the Clients om certain of their subsidiaries or affiliates 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 sale
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 Award Letter.
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 second month prior to such month
with the estimated Marketing Fees actually paid during such prior
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
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-1420
Checks sent by courier (Federal Express, United Parcel Service
or messenger) will be addressed as follows:
The Northern Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇.
4th Floor Receipt & Dispatch
Chicago, IL 60607
Attn: Novation, Suite 1420
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, #9
10. ADMINISTRATIVE DAMAGES. Novation and Supplier agree that
Novation would incur additional administrative costs if Supplier fails
to provide notice of change in pricing terms as required in Subsection
2.e above, fails to provide reports as required in Section 7 above, or
fails to pay Marketing Fees as required in Section 9 above, in each
case within the time and manner required by this Agreement. Novation
and Supplier further agree that the additional administrative costs
incurred by Novation by reason of any such failure to Supplier is
uncertain, and they therefore agree that the following schedule of
administrative damages constitutes a reasonable estimation of such
costs and were determined according to the principles of just
compensation:
1st failure written warning
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 right to recover administrative damages in accordance
with this Section is 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 AN AUTHORIZED DISTRIBUTOR If an
Authorized Distributor fails to pay Supplier for Products, or if an
Authorized Distributor 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 an Authorized Distributor, or if an
Authorized Distributor applies to the court 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 Members, to discontinue providing Products through that
Authorized Distributor, and Supplier will thereafter provide Products
to the Members directly Or through another Authorized Distributor, as
directed by Novation.
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 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, the Members and the Authorized Distributors, 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 in its Bid and thereafter 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 self-insurance 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 in its Bid, and thereafter 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, the Members or the Authorized Distributors, 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 all notices and endorsements as soon as practicable
after it receives or gives them.
13. COMPLIANCE WITH LAW AND GOVERNMENT PROGRAM PARTICIPATION.
Compliance With Law. Supplier represents and warrants that
to the best of its knowledge, after due inquiry, it is in compliance
with all federal, state and local 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,
b. Government Program Participation. Supplier represents and
warrants that it is not excluded from participation, and is not
otherwise ineligible to participate, in a "Federal health care program"
as defined in 42 U.S.C S l320a-7b(l) or in any other government payment
program, In the event Supplier is excluded from participation, or
becomes otherwise ineligible to participate in any such program during
the Term, Supplier will notify Novation in writing within three (3)
days after such event, and upon the occurrence of such event, whether
or not such notice is given to t4ovation, Novation may immediately
terminate this Agreement upon written notice to Supplier.
14 . RELEASE AND INDEMNITY, SUPPLIER WILL RELEASE, INDEMNITY HOLD HARM-
LESS, AND, IF REQUESTED, DEFEND NOYATION, THE CLIENTS, THE MEMBERS AND
THE AUTHORIZED DISTRIBUTORS, AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
REGENTS, AGENTS, SUBSIDIARIES, AFFILIATES AND EMPLOYEES (COLLECTIVELY,
THE "INDEMNITEES"), FROM AND AGAINST ANY CLAIMS, LIABILITIES, DAMAGES,
ACTIONS, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
▇▇ ▇▇▇▇▇▇▇' FEES, EXPERT FEES AND COURT COSTS) OF ANY KIND OR NATURE,
WHETHER AT LAW OR IN EQUITY, INCLUDING CLAIMS ASSERTING STRICT
LIABILITY, ARISING FROM OR CAUSED IN ANY PART BY (1) THE BREACH OF ANY
REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT OF SUPPLIER CONTAINED
IN THIS AGREEMENT OR IN THE BID; (2) TUE CONDITION OF ANY PRODUCT,
INCLUDING A DEFECT IN MATERIAL, WORICMANSHIP, DESIGN OR MANUFACTURING;
OR (3) THE WARNINGS AND INSTRUCTIONS ASSOCIATED WITH ANY PRODUCT. SUCH
OBLIGATION TO RELEASE, INDEMNIFY, HOLD HARMLESS AND DEFEND WILL APPLY
EVEN IN THE CLAIMS, LIABILITIES, DAMAGES, ACTIONS, COSTS AND EXPENSES
ARE CAUSED BY THE NEGLIGENCE, GROSS NEGLIGENCE OR OTHER CULPABLE
CONDUCT OF INDEMNITEES; PROVIDED, HOWEVER, THAT SUCH INDEMNIFICATION,
HOLD HARMLESS AND RIGHT TO DEFENSE WILL NOT SE APPLICABLE WHERE THE
CLAIM, LIABILITY, DAMAGE, ACTION, COST OR EXPENSE ARISES SOLELY AS A
RESULT OF AN ACT OR FAILURE To ACT OF INDEMNITEES. 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, Authorized
Distributor or Member without in each instance obtaining the prior
written consent of the person owning the rights thereto; or (ii) the
award or the content of this Agreement without in each instance
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, as defined in Subsection l7.b below, of
Novation, the Clients, the Authorized Distributors 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, the Authorized Distributor 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 all information contained
in the reports produced by Supplier pursuant to Section 7 above) and
all documents and other materials of Novation, the Clients, the
Authorized Distributors arid the Members containing information
relating to the programs of Novation, the Clients, the Authorized
Distributors 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 Authorized Distributors 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
any agreement between Supplier and an Authorized distributor or
between Supplier and a Member will be governed by and construed in
accordance with the choice of law and venue provisions set forth in
such agreement.
b. Not Responsible. Novation and the Clients and their
subsidiaries and affiliates will not be responsible or liable for any
Authorized Distributor's breach of any purchasing commitment or for
any other actions of any Authorized Distributor or Member. In
addition, none of the Clients will be responsible or liable for the
obligations of another Client or its subsidiaries or affiliates or
the obligations of Novation or Supplier under this Agreement.
c. Third Party Beneficiaries. All Clients, Authorized
Distributors and Members are intended third party beneficiaries of this
Agreement. All terms and conditions of tills 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
Authorized Distributors will inure to the benefit of and be enforceable
by the Authorized Distributors 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 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 by Supplier in the Bid
If to Novation:
Novation
Attn: General Counsel
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
Irving, TX 75039
or 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 flail 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 mariner as to be effective and
valid tinder 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, will constitute the entire agreement between
Novation arid Supplier. This Agreement, together with the exhibits
listed below and each Authorized Distributor's purchase order will
constitute the entire agreement between each Authorized Distributor and
Supplier. In the event of any inconsistency between this Agreement and
an Authorized Distributor's purchase order, the terms of this Agreement
will control, except that the Authorized Distributor's purchase order
will supersede Sections 4 and 5 of this Agreement in the event of any
inconsistency with such Sections. No other terms and conditions in any
document, acceptance, or acknowledgment will be effective or binding
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 Terms of Supplier's Participation in Committed Programs
Exhibit D Award Letter
Exhibit E Other Information Requirements
[Other Exhibits Listed, if any
SUPPLIER: ▇▇▇▇▇▇▇▇▇▇ Laboratories, Inc.
ADDRESS: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SIGNATURE: /s/
----------------------------
TITLE: President and CEO DATE: August 6, 1999