FIRST AMENDMENT TO MANUFACTURING & DEVELOPMENT AGREEMENT
EXHIBIT 10.16
FIRST
AMENDMENT TO MANUFACTURING & DEVELOPMENT AGREEMENT
This
First Amendment to Manufacturing and Development Agreement (“Amendment”) is made
and entered into as of this __ day of July 2007, by and between Arthrex, Inc., a
Delaware corporation having its principle place of business at 0000 Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxx 00000 (“Arthrex”) and Bovie Medical
Corporation, a Delaware corporation having its principle place of business at
0000 00xx Xxxxxx
X, Xx. Xxxxxxxxxx, Xxxxxxx 00000 (“Bovie”). Arthrex and Bovie are
each a “Party” and, together, are “Parties.”
RECITALS:
WHEREAS,
capitalized terms used herein have the meaning set forth in this Amendment or
the meaning set forth in the respective agreement referenced herein where such
capitalized terms are defined;
WHEREAS,
the Parties entered into that certain Manufacturing and Development Agreement
with a Start Date of December 6, 2002 (the “M&D Agreement”);
WHEREAS,
the Parties entered into that certain Original Equipment Manufacturing Agreement
with a Start Date of March 13, 2003 (the “OEM Agreement”);
WHEREAS,
pursuant to Section 6.0 of the M&D Agreement, on or about May 22, 2007,
Arthrex provided Bovie with its written notice of non-renewal of the M&D
Agreement, which is set to expire on December 6, 2007 (the “Amendment Effective
Date”) and of the OEM Agreement, which is set to expire on March 14,
2008;
WHEREAS,
pursuant to Section 12.7 of the M&D Agreement, the Parties may modify the
M&D Agreement only by a signed writing; and
WHEREAS,
in lieu of non-renewal or termination pursuant to Section 6.0, the Parties have
negotiated new terms respecting (i) exclusivity, (ii) non-competition, (iii)
minimum purchase quantities, and (iv) related and affected provisions, under
which the Parties desire to modify, renew and extend the M&D Agreement (and,
by a separate instrument, the OEM Agreement), as further set forth
below.
NOW,
THEREFORE, in consideration of the foregoing recitals (which are incorporated
herein and made a part hereof) and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Parties agree as
follows.
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1.
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Amendment. As
of the Amendment Effective Date, the following modifications to the
M&D Agreement shall apply:
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a.
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In
text of Section 2.1(d) is hereby replaced with the
following:
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Notwithstanding
anything to the contrary in Sections 2.1(b) and (c), in the event that any
change or modification to the Products or the Product Specifications requires
additional professional services, or results in a change in the costs incurred
by Bovie in the engineering, development, production, manufacture, sterilization
or packaging of the Products, Bovie shall so notify Arthrex and, upon Bovie’s
receipt of Arthrex’s written consent thereto, Bovie shall invoice Arthrex for
such professional services (if any), change the applicable purchase price of,
and implement the change or modification to, the Products and their Product
Specifications.
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b.
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The
text of Section 2.2(a) is hereby stricken and replaced with “Intentionally
Left Blank.”
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c.
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In
Section 2.2(b), the preamble “[s]ubject to Section 2.2(a) above,” is
hereby stricken.
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Page 1 of
3
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d.
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In
Section 2.3(b), the clause “; provided, however, Bovie
shall not be in breach of this Agreement for any failure to supply
quantities of Products which exceed the Quarterly Commitments provided by
Arthrex under Section 2.3(a) by more than 200%” is hereby
stricken.
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e.
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In
Section 2.7, the clause “except to a Back-up Supplier as set forth in
Section 2.11” is hereby stricken.
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f.
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The
text of Sections 2.10(a) and 2.10(b) are hereby stricken and each replaced
with “Intentionally Left Blank.”
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g.
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The
text of Section 2.11 (Alternate Source of Supply) is hereby stricken and
replaced with “Intentionally Left
Blank.”
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h.
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The
text of Section 3.1 is hereby replaced with the
following:
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The
prices for Products purchased hereunder (the “Prices”) are set forth on Appendix
F, as amended, which is attached hereto and made a part
hereof. Thereafter, every six (6) months during the Term, Bovie may
adjust the Prices according to the Producer Price Index for Finished Goods
(“PPIFG”) or its replacement if so identified by the publisher, published by the
United States Department of Labor, Bureau of Labor Statistics (“BLS”); provided, that each
adjustment will be limited to ** ** of the previous
Prices. Such PPIFG shall not be seasonally adjusted. The
adjustments shall be calculated using the “simple percentage method” as set
forth by the BLS. Bovie shall notify Arthrex at least thirty
(30) days prior to the effective date of any such adjustments. The
Prices shall include all charges related to Bovie’s preparation, labeling,
packaging, crating and loading of the Products, in accordance with the terms of
this Agreement.
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i.
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Pursuant
to Section 6.0 (Term), the Parties hereby consent to the renewal of the
Term for consecutive three (3) year periods, as provided
therein. The first renewal shall commence on December 6, 2007
and expire on December 6, 2010.
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j.
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The
text of Section 10.0 (Non-Competition) is hereby stricken and replaced
with “Intentionally Left Blank.”
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2.
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Effect on
Agreement. Except as expressly stated herein, or by
necessary implication amended by the terms of this Amendment, the terms
and conditions of the M&D Agreement are ratified and confirmed, and
shall remain in full force and
effect.
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IN WITNESS WHEREOF, the
Parties have hereby executed this Amendment as of the date first written
above.
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ARTHREX,
INC.
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BOVIE
MEDICAL CORPORATION
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/S/ Xxxxx Xxxxx
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/S/ Xxxxx Citronowicz
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Signature
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Signature
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Xxxxx
Xxxxx
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Xxxxx Citronowicz
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Printed
Name
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Printed
Name
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Vice President
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Vice President / COO
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Title
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Title
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8/24/07
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8/31/07
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Date
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Date
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Appendix
F
Manufacturing
and Development Agreement
The
following prices shall apply beginning on the Amendment Effective Date and may
be adjusted from time to time in accordance with the provisions of Section 3.1,
as amended.
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Catalog
No.
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Pricing (1)(2)
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AR-9601SJ-45
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** **
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AR-9601SJ-90
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** **
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AR-9602M-45
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** **
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AR-9602M-90
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** **
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AR-9603-30
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** **
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AR-9603-60
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** **
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AR-9603-90
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** **
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AR-9603A-60
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** **
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AR-9603A-90
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** **
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AR-9604-90
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** **
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AR-9604A-90
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** **
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AR-9608-45
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** **
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AR-9608SJ-45
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** **
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AR-9608
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** **
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AR-9608SJ
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** **
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AR-9703-60
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** **
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AR-9703-90
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** **
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AR-9704-60
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** **
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AR-9704-90
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** **
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AR-9705-60
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** **
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AR-9705-90
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** **
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AR-9703A-60
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** **
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AR-9703A-90
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** **
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AR-9704A-60
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** **
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AR-9704A-90
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** **
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AR-9705A-60*
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** **
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AR-9705A-90*
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** **
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* Arthrex
supplies the tip for these probes at ** ** charge or ** **
to Bovie.
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(1)
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Prices
do not include FedEx requests for which an additional ** ** ea
shall apply.
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(2)
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Prices
reflect minimum order quantities of ** ** or more; an
additional ** ** ea shall apply for order quantities of less
than ** **.
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