EXHIBIT 10.24
TERMINATION, RELEASE AND DISTRIBUTION AGREEMENT
This Termination, Release and Distribution Agreement (the "Agreement") is
entered into as of February 20, 1998, by and between General Surgical
Innovations, Inc., a corporation organized under the laws of California, having
a business address at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ of America, ("GSI") and Ethicon Endo-Surgery, Inc., a corporation
organized under the laws of the state of Ohio, having a business address at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Ethicon").
A. On or about December 20, 1996, GSI and Ethicon entered into an OEM
Supply Agreement (Expanded Field) (the "Expanded Agreement"). The Expanded
Agreement superseded and replaced an earlier OEM Supply Agreement between the
parties dated June 28, 1996 (the "Original Agreement") (the Original Agreement
and the Expanded Agreement together, the "Prior Agreements").
B. The parties now desire to supersede and replace the Expanded
Agreement with a non-exclusive distribution agreement.
C. GSI desires to appoint Ethicon to promote, sell and distribute
certain GSI products, worldwide (the "Territory") in accordance with the terms
and conditions stated herein.
AGREEMENT
A. IN CONSIDERATION OF THE FOREGOING, and the mutual agreements
contained herein, the sufficiency of which is acknowledged by both parties, it
is mutually agreed by and between the parties as follows:
1. REPLACE AND SUPERSEDE.
(a) Upon execution, this Distribution Agreement will replace
and supersede the Expanded Agreement which Agreement itself replaced and
superseded the Original Agreement.
(b) GSI and Ethicon, each being represented by Counsel, in
consideration of the mutual premises and covenants contained herein, the
sufficiency of which are hereby acknowledged, do hereby mutually and
unconditionally release and forever discharge each other, and their respective
agents, employees, officers, directors, shareholders, partners, affiliates,
successors and assigns, from any and all actions, causes of action, claims,
costs, damages, demands, expenses (including, without limitation, attorneys
fees and litigation costs), liabilities and obligations (collectively, the
"Claims") which either party had, now has or may hereafter have against the
other party arising out of or in any way connected with the Prior Agreements or
the termination of the Prior Agreements: provided, however, that Article 7 of
the
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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Expanded Agreement shall continue to apply in respect to any claims made by
third parties against the parties in respect of any products delivered under
the Prior Agreements. The foregoing mutual and general release shall apply,
without limitation, to all Claims of any kind or nature, past, present and
future, whether or not known, unknown, suspected, accrued, liquidated, fixed or
contingent and it constitutes a mutual and general release of the parties with
respect to the Prior Agreements. Each of the parties acknowledge that they
have been advised by legal counsel and are familiar with the provisions of
California Civil Code Section 1542, which provides as follows:
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor."
GSI and Ethicon, being aware of the said code section, agree to expressly waive
any rights they may have thereunder, as well as under any other statute or
common law principles of similar effect. The parties further acknowledge and
agree that these waivers of rights under Section 1542 of the Civil Code have
been separately bargained for and are essential and material terms of this
Agreement and, without such waivers, the parties would not have entered into
this Agreement.
2. GRANT OF DISTRIBUTORSHIP.
(a) APPOINTMENT. GSI appoints Ethicon as a nonexclusive
distributor in the Territory for the term of the Agreement to promote, sell,
market and distribute the Products set forth in Exhibit A (the "Products"), in
the fields of hernia repair and urinary stress incontinence (USI). Ethicon
agrees to refrain from promoting, selling, marketing and distributing hernia or
urinary stress incontinence balloons similar to the Products from any source
other than GSI as long as this agreement is in effect. It is expressly
acknowledged and agreed that the provisions of this Section 2(a) shall not
survive termination of this Agreement.
(b) PLACEMENT OF ORDERS. On or before the first day of the
month prior to the next calendar quarter, EES will place a non-cancelable
purchase order with GSI covering that next calendar quarter. During the term
of this Agreement, GSI shall supply Ethicon with those quantities of products
as ordered by Ethicon and Ethicon will purchase from GSI all Products so
ordered by it pursuant to this Agreement, it being understood that, except for
the non-cancelable purchase orders previously placed by Ethicon, nothing
contained herein shall require Ethicon to purchase any Products under this
Agreement. GSI will use reasonable commercial efforts to fulfill the purchase
orders of Ethicon in chronological order as placed and based on urgency needs
as advised by Ethicon; provided, however, that GSI shall not be held liable for
any amount of purchase order greater than one hundred and fifty percent (150%)
of the purchase orders made in the immediately preceding calendar quarter where
an order was placed and, in meeting any such order, GSI shall not be obligated
to fill more than twenty-five percent of such purchase order in the first month
of the applicable quarter and not more than thirty three percent of such
purchase order in the second month of the applicable quarter. In the event
that
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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GSI shall fail to meet its delivery obligations under this Agreement within a
period of 30 days after a mutually agreed upon delivery date, then, in
addition to any other remedies which Ethicon may have under this Agreement,
Ethicon shall be permitted (with no obligation or liability to GSI) to obtain
the Products in such purchase order from another source to satisfy the terms
of this order.
(c) DIRECT SALES. GSI shall have the right to promote, market
and sell the Products in the Territory directly itself, or indirectly through
affiliates, agents, distributors or otherwise.
(d) SUBSTITUTE PRODUCTS. If GSI offers for sale a product that
is in an alternative, improvement, replacement, substitute or addition to a
Product, an "Improvement," during the term of this Agreement, Ethicon will have
the option of evaluating the Improvement and, subject to reaching agreement
with GSI as to a new price and other terms, may amend this Agreement to
substitute or add the Improvements as a Product; provided, however, that if a
third party funds a change to a product, or if GSI relabels or repackages a
Product with a new trademark or new packaging or labeling then such product
shall not be considered an Improvement for purpose of this Section 2(d).
3. PRICES; PURCHASE ORDERS.
(a) PRICES. Prices to Ethicon shall be in United States
dollars and initially as set forth in Exhibit A. Changes in price may be
made by GSI after 1998, subject to ninety (90) day's notice in advance to
Ethicon. However, GSI agrees that [* * *]. All prices are calculated
F.O.B. GSI's distribution site, currently located in Cupertino, California.
Customs, duties and charges, if any, shall be borne by Ethicon. All import
or export licenses, approvals or both shall be obtained by Ethicon at its
cost. Prices to Ethicon do not include any federal, state or local taxes
that may be applicable to the Products. When GSI has the legal obligation to
collect such taxes, the appropriate amount shall be added to Ethicon's
invoice and paid by Ethicon unless Ethicon provides GSI with a valid tax
exemption certificate authorized by the appropriate taxing authority. In no
event will [* * *]. If GSI [* * *] the [* * *] effective as
of the date [* * *].
(b) PURCHASE ORDERS. Pursuant to this Agreement Ethicon will
submit purchase orders for the Products ("Purchase Orders") which include terms
and conditions as set forth in Exhibit B: "Purchase Order Terms and
Conditions." The Purchase Order Terms and Conditions are hereby incorporated
into and are part of this Agreement, except that (i) Section 7 regarding
branding and adulterated orders and compliance with all applicable laws, rules
and regulations shall be deemed by the parties to extend to the equivalent
rules of any foreign jurisdiction in which the products are sold (ii) the last
sentence of Section 3 does not apply and (iii) Section 26 does not apply. The
terms contained within this Agreement will control over the terms contained
within "Purchase Order Terms and Conditions" in the event of inconsistencies
between the two documents.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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(c) REJECT/RETURN (i) Purchase shall inspect all products
promptly upon receipt thereof and may reject any product that fails in any
material way to meet the applicable mutually agreed upon specifications or any
requirements specified in the purchase order description. Any product not
properly rejected within thirty (30) days of receipt of that product by
Purchaser (the "Rejection Period") shall be deemed accepted. To reject a
Product, Purchase shall, within the Rejection Period, notify GSI of its
rejection and request a Material Return Authorization ("MRA") number. GSI
shall provide the MRA number to Purchaser within seven (7) days of receipt of
the request. Within seven (7) days of receipt of the MRA number, Purchaser
shall return to GSI the rejected product, freight prepaid, in its original
shipping carton with the MRA number displayed on the outside of the carton.
GSI reserves the right to refuse to accept any rejected products that do not
bear an MRA number on the outside of the carton. As promptly as possible, but
not later than thirty (30) working days after receipt of properly rejected
products, GSI shall, at its expense, replace the products. GSI shall pay the
shipping charges back to Purchaser for property rejected products; otherwise,
Purchaser shall be responsible for the shipping charges. (ii) After the
Rejection Period, Purchaser may not return a product to GSI for any reason
without GSI's prior written consent. Purchaser shall be responsible for all
shipping charges for returns after the rejection period.
(d) STANDARD LIMITED WARRANTY. Ethicon shall pass on to its
customers GSI's standard limited warranty for Products including the
limitations set forth in Sections 3(e) below. This warranty is contingent upon
proper use of a Product in the application for which such Product was intended
and does not cover Products that were modified without GSI's approval, that
have expired or that were subjected by the customer to unusual physical,
chemical or electrical stress.
(e) NO OTHER WARRANTY. EXCEPT FOR THE EXPRESS LIMITED WARRANTY
SET FORTH ABOVE AND THE WARRANTIES AND GUARANTEES SET FORTH IN THE PURCHASE
ORDER, GSI GRANTS NO WARRANTIES FOR THE PRODUCTS, EXPRESS OR IMPLIED, EITHER IN
FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND GSI SPECIFICALLY
DISCLAIMS ANY IMPLIED WARRANTY OF QUALITY, WARRANTY OF MERCHANTABILITY OR
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY
BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL DAMAGES, HOWEVER CAUSED, ON ANY
THEORY OF LIABILITY, WHETHER CONTRACT, TORT (INCLUDING NEGLIGENCE) OR
OTHERWISE, WHETHER OR NOT A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGE.
(f) THIRD PARTY CLAIMS. Article 7 of the Expanded Agreement is
hereby incorporated into and becomes part of this Agreement in respect to any
claims made by third parties against the parties in connection with any
Products delivered under this Agreement.
4. PAYMENT. Full payment of Ethicon's purchase price (including
any freight, taxes or other applicable costs initially paid by GSI but to be
borne by Ethicon) shall be in United States of America dollars. All exchange,
interest, banking, collection, and other charges shall be at Ethicon's expense.
Payment terms shall be net forty-five (45) days upon receipt of the
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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Product, and payment shall be made by wire transfer, check or other
instrument approved by GSI. Any invoiced amount not paid when due shall be
subject to a service charge at the lower of the rate of one and one-half
percent (1.5%) per month or the maximum rate permitted by law. If Ethicon
fails to make any payment to GSI when due, GSI may, without affecting its
rights under this Agreement, cancel or delay any future shipments to.
5. TERM AND TERMINATION.
(a) TERMINATION FOR CONVENIENCE. This Agreement may be
terminated at any time after the date set forth on the first page of this
agreement by either party by giving the other party written notice thirty (30)
days in advance.
(b) EFFECT OF TERMINATION; LIMITATION OF LIABILITY. In the
event of termination by either party in accordance with any of the provisions
of this Agreement, neither party shall be liable to the other, because of such
termination, for compensation, reimbursement or damages on account of the loss
of prospective profits or anticipated sales or on account of expenditures,
inventory, investments, leases or commitments in connection with the business
or goodwill of GSI or Ethicon. Termination shall not, however, relieve either
party of obligations incurred prior to the termination. Ethicon shall be
entitled to receive from GSI Products necessary to fulfill valid and binding
purchase orders accepted by GSI prior to notification of termination of this
Agreement. GSI shall be entitled to receive from ETHICON payments necessary to
fulfill valid and binding purchase orders submitted by Ethicon prior to
notification of termination of this Agreement.
6. NOTICES.
(a) ADDRESSES. All notices given under this Agreement shall be
sufficient if in writing and delivered by messenger or sent by postage prepaid
mail or by facsimile to the address of the recipients set forth below:
In the case of GSI:
To: General Surgical Innovations, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Venture Law Group
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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In the Case of Ethicon:
To: Ethicon Endo-Surgery, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Office of General Counsel
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) DELIVERY. Notice shall be effective when received by or
otherwise known to the receipt or its legal representative. This provision is
not intended to be exclusive and any notice actually received shall be
sufficient.
7. MISCELLANEOUS.
(a) COUNTERPARTS. This agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
(b) PARTIAL INVALIDITY. If any provision of this Agreement,
including any provision set forth in the "Purchase Order Terms and Conditions"
attached as Exhibit B hereto, is held to be invalid, then the remaining
provisions shall nevertheless remain in full force and effect. The parties
agree to renegotiate in good faith any term held invalid and to be bound by the
mutually agreed substitute provision.
(c) ASSIGNABILITY. Neither party shall transfer or assign this
Agreement, in whole or in part, without the prior written consent of the other
party (which shall not be unreasonably withheld); except that either party may,
without such consent, assign this Agreement to an affiliate that directly
controls, is controlled by, or is under common control with a party; provided
such affiliate has the equivalent resources and capacity to carry out the
assignee's obligations under this Agreement, and the assigning party remains
responsible for all its obligations under this Agreement.
(d) PUBLICITY. If a party decides to make a written press release
relating to this Agreement, or to any amendment or performances under this
Agreement, it will give the other party, and the other party's general counsel,
forty-eight (48) hours advance written notice, or any shorter notice period
otherwise required by law, of the text of the announcement so that the other
party will have an opportunity to comment upon the announcement.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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(e) ENTIRE AGREEMENT. This Agreement and the exhibits hereto which
form a part hereof constitute the entire understanding of the parties with
respect to its subject matter and supersedes all prior negotiations, agreements
and understandings among the parties, including without limitation the Prior
Agreements, with respect to its subject matter. There are no representations,
promises, warranties, covenants or understandings other than those expressly
set forth herein or therein. This Agreement may be modified or amended only by
a writing signed by the party against whom such modification or amendment is
asserted; provoked, that the terms of any purchase order, invoice or similar
document used to implement this Agreement shall not modify or amend but shall
be subject to this Agreement.
(f) RELATIONSHIP OF PARTIES. The parties hereto are entering into
this Agreement as independent contractors, and nothing herein is intended or
shall be construed to create between the parties a relationship of principal
and agent, partners, joint venturers or employer and employee. Neither party
shall hold itself out to others to bind or commit the other party in any manner
inconsistent with the foregoing provisions of this Article.
(g) NOTIFICATION OF REGULATORY AGENCY CONTACT. Parties agree that
if either of them is contacted by a regulatory agency, whether in the US or
outside the US, in connection with the Products, such contacted party shall
immediately notify the other party of the form and content of such contact,
including delivery of a copy of any written material received from the
regulatory agency. This provision shall survive termination of this agreement.
(h) NOTIFICATION OF ANTICIPATED CHANGE. GSI provide Ethicon with
written notice at least 60 days prior to any change of the form, fit, function,
components or material of the Products, the site at which the Products are
manufactured, packaged, or sterilized or the process by which the Products are
manufactured, packaged, sterilized, or labeled when any such change could
potentially affect the safety, efficacy, qualify, or stability of the Products.
(i) NOTIFICATION OF CLAIMS. Ethicon will notify GSI of any adverse
reaction, malfunction, injury or other similar claims with respect to the GSI
Products of which they become aware. Ethicon shall make reasonable efforts to
provide copies of its customer inquiries related to GSI Products as well as the
results of any related investigation including returned product.
(j) MAINTENANCE OF RECORDS. The parties shall maintain adequate
records concerning traceability of GSI Products, and shall cooperate with each
other in the event that any recall, field corrective action, or the like in
circumstances occurring related to any GSI Products.
(k) COMPLIANCE WITH LAWS AND REGULATIONS. Both parties agree to
comply with applicable state, federal and international regulatory requirements
in connection with their status as, respectively, a medical device manufacturer
or medical device distributor.
(l) SHELF LIFE EXTENSION. GSI shall cooperate with Ethicon in an
effort to extend the shelf-life of GSI "Products" in Ethicon's inventory up to
a total of three (3) years GSI's obligation to cooperate with Ethicon shall
survive termination of this agreement for any reason, including, but not
limited, to termination under Section 5 above.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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IN WITNESS WHEREOF, this Distribution Agreement has been executed as
of the day and year first above written.
GENERAL SURGICAL INNOVATIONS, INC. ETHICON ENDO-SURGERY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------- -----------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Print Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------- ---------------------
Title: President & C.O.O. Title: VP Business Development
---------------------------- --------------------------
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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EXHIBIT A: TRANSFER PRICES
PRODUCT MODEL P/N PRICE
Spacemaker, Distal 900 DBD-900 ▇▇-▇▇▇▇-▇▇ [***]
Spacemaker, Distal 1500 DBD-1500 ▇▇-▇▇▇▇-▇▇ [***]
Spacemaker II, w/Cannula VSM-2900 ▇▇-▇▇▇▇-▇▇ [***]
Spacemaker II, w/o Cannula VSM-2900 ▇▇-▇▇▇▇-▇▇ [***]
Air ▇▇▇▇, ▇▇▇. ▇▇-▇▇▇ ▇▇-▇▇▇▇-▇▇ [***]
Spacemaker II, 650 cc. w/Cannula VSM-2950 ▇▇-▇▇▇▇-▇▇ [***]
Spacemaker II, 650 cc. w/o Cannula VSM-2950-01 ▇▇-▇▇▇▇-▇▇ [***]
5mm Reducer, 10pk CR-050 ▇▇-▇▇▇▇-▇▇ [***]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
EXHIBIT B: PURCHASE ORDER TERMS AND CONDITIONS
This agreement to conditions of Purchase is by and between GSI
(hereinafter referred to as "Seller") and ETHICON ENDO-SURGERY, INC. having a
business address at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (hereinafter
referred to as "Purchaser").
1. INSPECTION. All goods are subject to final inspection and acceptance
by Purchaser at destination notwithstanding any payment or prior inspection at
source. Final inspection will be made within a reasonable time after receipt
of goods.
2. REJECT/RETURN. Purchaser reserves the right to refuse any goods and
to cancel all or any part of an order for goods not conforming to applicable
specifications, drawings, samples or descriptions. Acceptance of any part of
the order shall not bind Purchaser to accept future shipments of nonconforming
goods, not deprive it of the right to return nonconforming goods already
accepted.
3. CANCELLATION ON LATENESS. Shipments or deliveries (as specified in
the order) shall be strictly in accordance with the quantities and schedule
specified in the order. If at any time it appears Seller will not meet such
schedule, Seller shall promptly notify Purchaser in writing of reasons for the
estimated duration of the delay and, if requested by Purchaser, ship via air or
other fast transportation to avoid or minimize delay to the maximum extent
possible, the added cost to be borne by Seller. This is in addition to
Purchaser's other remedies, such as cancellation after a reasonable time (not
to exceed 30 days) for non-compliance, cover and incidental and consequential
damages.
4. INVOICE. A separate invoice shall be issued in triplicate for each
shipment. Unless otherwise specified in the order, no invoice shall be issued
prior to shipment of goods and no payment will be made prior to receipt of
goods and current invoice. Payment due dates, including discount periods, will
be computed from date of receipt of goods or date of receipt of current invoice
(whichever is later) to date Purchaser's check is mailed. Unless freight and
other charges are itemized, any discount taken will be taken on full amount of
invoice.
5. ACKNOWLEDGMENT. Seller will acknowledge receipt and acceptance of
the order confirming price and arrival date by returning a counterpart of the
order initialed on behalf of Seller.
6. ASSIGNMENT. This Purchaser Order shall not be assignable by Seller
without the prior written consent of the Purchaser, which consent may be
withheld in the sole discretion of the Purchaser.
7. NOT MISBRANDED/ADULTERATED. The Seller guarantees that no article
shipped pursuant to the order is adulterated or misbranded within the meaning
of the Federal Food, Drug and Cosmetic Act, or is an article which may not
under the provisions of Sec. 404 or 505 of that Act be introduced into
interstate commerce; that no article shipped pursuant to the order is produced
in violation of any provisions of the Fair Labor Standards Act; and further
guarantees full compliance with all provisions from time to time applicable of
any other Federal
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
and all state and municipal laws, and agrees to defend Purchaser and hold
harmless from all liability resulting from failure of such compliance.
8. QUALITY, USE FOR INTENDED PURPOSE. In accepting this purchase order,
the Seller unconditionally represents and warrants, any other representation or
agreement to the contrary notwithstanding, that the material supplied pursuant
to the purchase order is of merchantable quality, conforms to the detailed
specifications as stated on the form and is suitable for the Purchaser's
intended uses and purposes in the ordinary course of his business to the extent
that such intended uses and purposes are known or reasonably should be known to
the Seller; and the Seller agrees to hold the Purchaser harmless against any
liability, judgment, damages, loss or expense, including reasonable counsel
fees, resulting from Seller's failure to meet the requirements of this
condition. All warranties herein stated shall run to the Purchaser, its
customers and the users of the products, or products into which they may be
incorporated.
9. PATENT HOLD HARMLESS. In accepting the purchase order, the Seller
agrees to hold the Purchaser harmless against any liability, judgment, damages,
loss or expense, including without limitation reasonable counsel fees,
resulting from any claim or any suit against the Purchaser charging
misappropriation of trade secrets, breach of a confidential relationship, by
the making of the purchase under the purchase order, or charging infringement
of a United States or foreign patent by any product sold under the purchase
order, or any element of such product, or by the use of such product, or by
material resulting from such use where the use is known to the Seller. If the
product listed in the purchase order is a material whose composition and
ingredients are not disclosed by the Seller to the Purchaser, then the Seller's
agreement to hold the Purchaser harmless, as stated in the foregoing sentence
shall extend to all uses of such product for which the product is sold by the
Seller, to all uses for which the product is recommended by the Seller to the
Purchaser, and to all intended uses by the Purchaser which are known to the
Seller.
10. COPYRIGHT MARKING. Seller agrees that any copyrightable material
prepared for Purchaser shall carry on the face thereof in legible form the
following copyright notice: -C- Ethicon Endo-Surgery followed by the last two
digits of the year of production.
11. GOVERNMENT CEILING PRICE/NO GREATER THAN OFFERED FOR SIMILAR. The
Seller in accepting the purchase order represents that the price charged is not
in excess of the ceiling price, if any, established by any Government Agency
nor those quoted for others for the same products and similar quantities.
12. TRANSPORTATION LIABILITY. With respect to any goods permitted to be
sold F.O.B. Seller's plant, Seller agrees that in any case where freight
regulations covering goods transported by common carrier establish a maximum
limit on the carrier's liability for loss or damage suffered in transit, Seller
will be liable to Purchaser for any loss or damage in excess of such maximum
limit up to the full price of the goods.
13. COMPLETE AGREEMENT. Acceptance of the order is expressly limited to
the terms hereof. If the Seller objects to any of the terms hereof, it shall
notify Purchaser in writing within ten days of the date of the order, and
withhold shipments of the purchase order
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
and shipment of the goods listed therein until such objection is settled by
written agreement of the parties. Any oral or written acknowledgment or
confirmation of this purchase order, any shipment of the goods ordered
thereby, or the furnishing of any services pursuant to this purchase order,
shall, notwithstanding the terms of such acknowledgment or confirmation,
constitute acceptance by the Seller of each and all of the terms and
conditions stated herein. The Purchaser will not be bound to any additional
or different terms hereafter transmitted by Seller except by a signed
consent, and will in no event be bound by silence, course of dealing, usage
of the trade or any acceptance of the goods listed herein to any terms and
conditions other than those stated herein. This purchase order and this
document contain all the terms and conditions of the purchase agreement
between Purchaser and Seller and shall constitute the complete and exclusive
agreement between Seller and Purchaser, and expressly supersedes any prior or
contemporaneous oral or written representation or agreement. Headings used
herein are for the convenient reference of the parties and are not intended
to amend, modify or limit to any extent the express terms of this agreement.
No modification, amendment or waiver of any term or condition of this
agreement shall be effective unless set forth in writing signed by the party
against whom enforcement is sought. This agreement shall be governed by and
construed in accordance with the laws of the State in which Purchaser's
headquarters is located.
14. COMPLIANCE FEDERAL, STATE, MUNICIPAL NON-DISCRIMINATION LAWS. The
Seller agrees to comply with the applicable provisions of any Federal or State
Law and all executive orders, rules and regulations issued thereunder, whether
now or hereafter in force; and, any provisions, representations or agreements
required thereby to be included in the contract resulting from acceptance of
the order are hereby incorporated by reference, including but not limited to,
Executive Order 11246, as amended, Chapter 60 of Title 41 of the Code of
Federal Regulations, as amended prohibiting discrimination against any employee
or applicant for employment because of race, color, religion, sex, or national
origin; Section 60-741.1 as amended, Chapter 60 of Title 41 Code of Federal
Regulations prohibiting discrimination against any employee or applicant for
employment because of physical or mental handicap; and Section 60.250.4 of
Chapter 60 of Title 41 Code of Federal Regulations, as amended, providing for
the employment of disabled veterans and veterans of the Vietnam era.
15. OSHA REQUIREMENTS. Seller warrants that the product sold or service
rendered to Purchaser shall conform to the standards and/or regulations
promulgated by the U.S. Department of Labor under the Occupational Safety and
Health Act of 1970 (29 U.S. Code Section 651 et seq.) ("OSHA"). In the event
the product sold does not conform to the OSHA standards and/or regulations,
Purchaser may return the product for correction or replacement at Seller's
option and at Seller's expense. Services performed by the Seller which do not
conform to the OSHA standards and/or regulations must be corrected by Seller at
Seller's expense or may be corrected by Purchaser at Seller's expense in the
event Seller fails to make the appropriate correction within a reasonable time.
16. INDEMNIFY PURCHASER FOR SERVICES RENDERED. In the event that the
purchase order contract is accepted for services to be rendered, Seller agrees
to defend, indemnify and hold harmless the Purchaser, its parents, subsidiaries
and affiliates, and their
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
respective directors, officers, employees and agents from any liability,
claims, causes of action or other legal action and any costs or expense
arising therefrom (including without limitation reasonable attorney's fees)
arising from any wrongful act or omission of the service company, its
employees, contract labor, or subcontractors.
17. SMALL BUSINESS CLAUSE. The clause, "Utilization of Small Business
Concerns and Small Business Concerns Owned and Controlled by Socially and
Economically Disadvantaged Individuals" (as amended in a portion of Public Law
95-507), is hereby made a part of this agreement. This clause is aimed at
fully utilizing minority-owned businesses where appropriate and is intended for
subcontractors who offer further subcontracting opportunities. When these
conditions exist, the Seller agrees to use his best efforts to carry out this
policy in the award of his subcontracts to the fullest extent consistent with
the efficient performance of the contract.
18. IF UNDER GOVERNMENT CONTRACTS. If the products or services covered
by this Purchase Order are ordered by Purchaser under United States government
contracts, Seller agrees that applicable Federal statutes and regulations
applying to the Purchaser as a contractor are accepted and binding on Seller
insofar as Seller may be a subcontractor.
19. FORCE MAJEURE. A party shall be excused for delays in performance or
failure of performance hereunder to the extent arising from causes beyond such
party's control, including without limitation strikes, wars, fire, flood,
earthquake, or other Act of God. In the event of any such event or condition,
the party whose performance is excused hereunder shall notify the other
promptly thereof and shall make diligent efforts to perform at its earliest
opportunity. During any such period of non-performance by one party, the other
party shall be permitted to suspend its performance hereunder.
20. CORRESPONDENCE ADDRESS/PERSON. Any notice or other correspondence
required or permitted to be provided hereunder shall be sent by first class
mail, postage prepaid, directed to the attention of the Purchasing Department,
at the address shown in the correspondence address designation block on the
reverse of the purchase order.
21. SHIPPING TERMS. Unless otherwise specified, delivery is to be F.O.B.
Purchaser's plant. If goods are to be shipped F.O.B. shipping point, and
Purchaser has not designated routing, ship via cheapest way that will meet
delivery date.
22. CONFIDENTIALITY. Any information supplied by Purchaser in the
purchase order or in connection with this purchase order is confidential.
Seller shall not use or disclose any such information or any data, designs, or
other information belonging to or supplied by or on behalf of Purchaser or
developed by Seller in the performance of this purchase order, except to the
extent necessary to perform the terms of the purchase order and this agreement.
Upon Purchaser's request such information, data, designs, or other information
and any copies thereof shall be returned to Purchaser. Where Purchaser's data,
designs, or other information are furnished to Seller's suppliers for
procurement of supplies by Seller for use in the performance of Purchaser's
orders, Seller shall insert the substance of this provision in its orders.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
23. PURCHASER'S PROPERTY. Unless otherwise agreed in writing, all tools,
equipment or material of every description furnished to Seller by Purchaser or
specifically paid for by Purchaser, and any replacement thereof, or any
materials affixed or attached thereto, shall be and remain the personal
property of Purchaser, and shall be safely stored separate and apart from
Seller's property. Seller shall not substitute any property for Purchaser's
property and shall not use such property except in filling Purchaser's orders.
Such property while in Seller's custody or control shall be held at Seller's
risk, shall be kept insured by Seller at Seller's expense in an amount equal to
the replacement cost with loss payable to Purchaser and shall be subject to
removal at Purchaser's written request, in which event Seller shall prepare
such property for shipment and shall redeliver to Purchaser in the same
condition as originally received by Seller, reasonable wear and tear excepted.
24. MATERIAL SAFETY DATA SHEETS. Material Safety Data Sheets are
required for all items in the order. Please ship with the order or mail before
shipment to the address for notice as provided above.
25. NO DRAFTS. Purchaser does not honor drafts for bills contracted.
All accounts are paid by remittance through mail.
26. Any inventions, improvements, or ideas made or conceived by Seller in
connection with or during the performance of services to be rendered for
Purchaser shall be the property of the Purchaser. Seller, without charge to
Purchaser other than reasonable payment for time involved in the event this
Agreement shall have terminated, by at Purchaser's expense, shall execute,
acknowledge, and deliver to Purchaser all further papers, including
applications for patents, as may be necessary to enable Purchaser to publish or
protect such inventions, improvements, and ideas by patent or otherwise in all
countries and to vest title to said patents, inventions, improvements, and
ideas in Purchaser or its nominees, their successors or assigns. Seller shall
tender assistance as Purchaser may require in any patent Office proceeding or
litigation involving said inventions, improvements, or ideas. Seller as part
of the services to be performed below, shall keep written notebook records of
its work, property witnessed for use as invention records, and shall submit
such records to Purchaser when requested or at the termination of the work.
ETHICON ENDO-SURGERY, INC. SELLER
By: _______________________________ By: _______________________________
Title: ____________________________ Title:_____________________________
Date: _____________________________ Date:______________________________
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.