EXHIBIT 10.10
O.E.M. SUPPLY CONTRACT
THIS AGREEMENT, effective as of July 24,1998 by and between SULZER
CARBOMEDICS INC., a corporation organized and existing under the laws of the
State of Delaware, with its principal office located at 0000 Xxxx Xxxxxxxx Xxxx,
Xxxxxx, Xxxxx 00000 ("Sulzer Carbomedics") and CV DYNAMICS DBA MEDICAL
INCORPORATED, a corporation organized and existing under the laws of the State
of Minnesota, with its principal office located at 0000 Xxxx Xxxxxxxxx Xxxxx,
Xxxxx Xxxxx Xxxxxxx, Xxxxxxxxx 00000 (hereafter "Manufacturer").
1. RECITALS AND DEFINITIONS.
(a) MANUFACTURER'S BUSINESS. Manufacturer is engaged in the
business of designing, manufacturing and selling medical devices,
including Manufacturer's proprietary cardiac valve prostheses.
(b) SULZER CARBOMEDICS' BUSINESS. Sulzer Carbomedics is
engaged in the business of manufacturing mechanical components for
cardiac valve prostheses, particularly such components coated with its
proprietary Pyrolite(R)and Biolite(R)pyrocarbon.
(c) MECHANICAL HEART VALVE COMPONENTS. The term "Mechanical
Heart Valve Components" (hereafter "Components") means and includes
mechanical Components for use in cardiac valve prostheses manufactured
by Sulzer Carbomedics according to the written specifications and
drawings of the Manufacturer furnished to Sulzer Carbomedics (the
"Specifications") which Components are coated with Pyrolite(R) and
Biolite(R). A Component may be either a disc or an orifice. The
Specifications have been agreed to between Sulzer Carbomedics and
Manufacturer and are identified in Exhibit A, attached to and made part
of this Agreement.
(d) VALVE SET EQUIVALENT. The term "Valve Set Equivalent" as
used herein means any combination of Components whose individual base
prices, when summed, result in a total price equal to a multiple of the
base price of one disc and one orifice.
2. PURCHASE OF GOODS. Manufacturer is required to purchase its
carbon-coated Components exclusively from Sulzer Carbomedics during the term of
this Agreement. However, Manufacturer may purchase from another company
carbon-coated items used in cardiac valve prostheses if those items have
specifications other than those identified in Exhibit A. In that event,
Manufacturer is required to offer Sulzer Carbomedics an opportunity to bid on
those items. This opportunity will include providing Sulzer Carbomedics with a
copy of the product specifications and will last for a period of at least 45
days.
3. PRICE.
(a) Effective as of the date first written above, Sulzer
Carbomedics agrees to supply such Components at the prices set forth in
Exhibit B. As defined in Exhibit B, these prices are a combination of a
base price for each component and a factor based on the lead time
provided for a purchase order.
(b) Such prices will be adjusted for inflation, effective
January 1 of each calendar year beginning January 1, 1999. The adjusted
prices for each calendar year will be the prices for the prior calendar
year plus such prices times an inflation factor equal to the 12-month
average
percentage change in employment costs for private industry workers
(excluding farmers) for the 12 months ending September 30 as
indicated on Table 3 of the Employment Cost Index published by the
Bureau of Labor Statistics of the United States Department of Labor or,
if the Employment Cost Index should cease to be published, any
comparable category in a comparable index to be agreed to in good faith
by the parties. Prices will not be adjusted in the event that the
inflation factor calculated under this section is negative. If the
Employment Cost Index is not available when the first purchase order(s)
in any calendar year is issued, the prices for Components purchased
under such purchase order(s) will be the prices for the prior calendar
year times the 12-month average percentage change in employment costs
as of the end of the second calendar quarter. Such prices will be
retroactively adjusted to reflect the 12-month average set out in
Paragraph 3(b) of this Agreement.
(c) Components purchased pursuant to any purchase order placed
by the Manufacturer and accepted by Sulzer Carbomedics within one week
of the date first written above will be purchased at the base prices
set forth in Exhibit B.
4. MINIMUM QUANTITY AND SCHEDULE. Manufacturer will purchase the
minimum number of Valve Set Equivalents during the term of this Agreement as set
forth in Exhibit B in approximate equal increments. In the event that
Manufacturer purchases less than the minimum required quantity in any calendar
year, Manufacturer will, within 90 days of the end of that calendar year, pay
Sulzer Carbomedics [*] per Valve Set Equivalent not ordered up to the minimum
commitment.
5. ORDERING PROCEDURE.
(a) PURCHASE ORDERS. Sales of Components will be made pursuant
to purchase orders issued by Manufacturer to Sulzer Carbomedics,
specifying weekly or monthly delivery schedules by size and quantity,
price extension (based on Exhibit B pricing) and method of shipment.
Manufacturer will use its best efforts to maintain a uniform weekly or
monthly delivery schedule in terms of size and quantity of Components
ordered. Contemporaneously with the execution of this Agreement,
Manufacturer will issue purchase orders for the first 4 months of the
term of this Agreement. Thereafter, beginning one month after the
commencement of the term of this Agreement, subsequent purchase orders
will be issued by Manufacturer to Sulzer Carbomedics for periods of one
month or more, and at least three months in advance of the first
requested delivery. Each purchase order will be accompanied by a
nonbinding forecast of purchases, by size and quantity, planned for
each of the two months following the period of the purchase order, up
to six months from the date the purchase order is issued.
(b) LIMITATIONS ON QUANTITIES ORDERED. In order to enable
Sulzer Carbomedics to plan production and in order to assure
Manufacturer a steady and predictable supply of Components,
Manufacturer agrees that each new thirteen-week order for Components
will not increase or decrease by more than 15 percent from the
immediately preceding thirteen week order. The 15 percent variation
will be calculated by comparing each new order(s) for Components to the
immediately preceding order(s) for Components. Notwithstanding the
foregoing, Sulzer Carbomedics will use its reasonable best efforts to
manufacture Components sufficient to fill Manufacturer's orders which
exceed the 15 percent maximum variation limitation.
*Confidential portion omitted and filed separately with the SEC.
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(c) RAW MATERIALS. Manufacturer acknowledges that certain raw
materials ("Raw Materials") which are identified on Exhibit C, attached
to and made part of this Agreement, are unique to the Component and are
sold in minimum quantities which may exceed a 13-week supply.
Manufacturer hereby authorizes Sulzer Carbomedics to maintain a
sufficient supply of Raw Materials to ensure a steady production
schedule.
6. CHANGES.
(a) SPECIFICATION CHANGES REQUESTED BY MANUFACTURER.
Manufacturer will have the right, from time to time, to make such
changes in the Specifications as it deems necessary or desirable. All
such changes, however, will be made by written notice. If any change
increases Sulzer Carbomedics' costs, Sulzer Carbomedics' price to
Manufacturer will be increased proportionately. The effective date for
all such changes will be negotiated in good faith between Manufacturer
and Sulzer Carbomedics. If any inventory of Raw Materials,
work-in-process or finished goods should become obsolete as a result of
such a change, Manufacturer will reimburse Sulzer Carbomedics for the
cost of such obsolete inventory on a percentage-of-completion basis. In
addition, if any such change requires Sulzer Carbomedics to incur
additional engineering expenses, Sulzer Carbomedics and Manufacturer
will negotiate and agree to the expenses prior to the change being
implemented.
(b) SPECIFICATION CHANGES REQUESTED BY SULZER CARBOMEDICS.
Sulzer Carbomedics will have the right, from time to time, to request
but not require that the Manufacturer make changes in the
Specifications as it deems necessary or desirable. All such requests,
however, will be made by written notice. Prior to the change in the
Specifications being implemented, Sulzer Carbomedics and Manufacturer
will negotiate and agree to the effective date of the change, to any
change in the purchase price or quantity, and to any reimbursement for
obsolete inventory or for additional expenses incurred by Sulzer
Carbomedics.
(c) MANUFACTURING PROCESS CHANGES. Sulzer Carbomedics will
have the right to change any of the processes by which it manufactures
Components furnished to the Specifications, as it deems necessary or
desirable. Sulzer Carbomedics will notify Manufacturer in writing, and
obtain the written approval of Manufacturer before implementing any
change which affects the biocompatibility or mechanical properties of
the Pyrolite(R) coating on the Components. However, Sulzer Carbomedics
may implement a change to any of its manufacturing and inspection
processes without notifying or obtaining the consent of Manufacturer if
that change does not affect the biocompatibility or mechanical
properties of the Pyrolite(R) coating on the Components.
7. TRANSPORTATION COSTS. Sulzer Carbomedics will ship Components to
Manufacturer f.o.b. Sulzer Carbomedics' facility (point of origin). Sulzer
Carbomedics will invoice Manufacturer for each shipment the total purchase price
and the cost of shipping or will charge the cost of shipment to Manufacturer's
account with the carrier, at Manufacturer's option.
8. PAYMENT. Sulzer Carbomedics will invoice Manufacturer on shipment or
completion of services, as applicable, for all amounts due under this Agreement,
including without limitation amounts due under Sections 10(b) and 14. Each
invoice is due and payable in full at Sulzer Carbomedics' offices, within 90
days after the date of invoice. If Manufacturer is delinquent in payment of any
invoice, Sulzer Carbomedics may refuse to ship, require cash in advance, letters
of credit or other terms, without limiting Sulzer Carbomedics' remedies.
Manufacturer will pay a service charge of 1.5 percent per month or the maximum
rate allowed by law, whichever is lower, on all invoiced amounts due but not
paid from and after the date due.
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9. EXCUSABLE DELAY OR FAILURE TO PERFORM. Neither party will be liable
for a delay in performance of or failure to perform an obligation under this
Agreement (except an obligation to make payment promptly when due), if and to
the extent such delay or failure is attributable to any cause beyond the
reasonable control of such party (the "affected party"). Such causes may include
but are not limited to act of God, act of government, war or related actions,
civil insurrection, riot, sabotage, strike or other labor difficulties,
epidemic, fire, flood, windstorm, failure of suppliers, subcontractors or
carriers, inability to obtain required materials or qualified labor. The
affected party will give prompt notice of the cause to the other party, and will
resume performance with reasonable diligence upon cessation of the cause of the
delay or failure. If the affected party's performance is suspended or delayed
because of the operation of this paragraph, the term of this agreement will be
correspondingly extended. Six months after suspension or delay begins, whether
excused or not, Manufacturer will pay Sulzer Carbomedics for all unused Raw
Materials, work in process and finished goods on a percentage-of-completion
basis. Upon receipt of payment, Sulzer Carbomedics will ship the finished goods
and Raw Materials to Manufacturer. Sulzer Carbomedics may, however, hold all
work in process in trust for Manufacturer for a period of time not to exceed 12
months after the beginning of suspension or delay. Sulzer Carbomedics and
Manufacturer will each have the right to count the work in process. At the end
of the 12-month period and provided Manufacturer has paid for it, Sulzer
Carbomedics will destroy the work in process under the observation of
representatives of Manufacturer.
10. INSPECTION OF SHIPMENT AND APPROVAL BY MANUFACTURER.
(a) MANUFACTURER'S INSPECTION PROCEDURES. Upon receipt by
Manufacturer of any particular shipment of Components, Manufacturer
will have the right to inspect each Component shipped and to submit
such Components to Manufacturer's reasonable quality control procedures
to determine that the Components conform to the agreed Specifications.
Manufacturer has the responsibility prior to commencement of
manufacture of Components by Sulzer Carbomedics to describe to Sulzer
Carbomedics the reasonable quality control procedures which will be
adopted by Manufacturer in order that Sulzer Carbomedics, at its
option, may integrate these quality control procedures of Manufacturer
with those adopted by Sulzer Carbomedics to ensure that the Components
supplied by Sulzer Carbomedics conform to the Specifications of the
Manufacturer. Manufacturer reserves the right to make any reasonable
change or modification in Manufacturer's quality control procedure,
provided that the precision must remain within the limits of the Sulzer
Carbomedics capability to produce the Components at the agreed upon
contract price and terms. If any such change or modification increases
Sulzer Carbomedics cost, Sulzer Carbomedics' price to Manufacturer will
be increased. Manufacturer will notify Sulzer Carbomedics, in writing,
of any such change or modification in the quality control procedure,
and Sulzer Carbomedics will be allowed a reasonable time subsequent to
receipt by manufacturer of such notice within which to modify Sulzer
Carbomedics' quality control procedures.
(b) MANUFACTURER'S RIGHT TO REJECT. Manufacturer will have the
right to reject Components which fail to conform to the agreed
Specifications and return same to Sulzer Carbomedics at Manufacturer's
expense. However, in conjunction with the rejection of such Components,
Manufacturer has the affirmative responsibility of providing Sulzer
Carbomedics with a written, comprehensive description of the basis of
the rejection by Manufacturer of the Components being returned and/or a
description of the mode in which the Components being returned fail to
meet Manufacturer's Specification. If Sulzer Carbomedics, in its
reasonable opinion and confirmed by actual test, finds that the parts
rejected by the Manufacturer do not meet Specifications, Sulzer
Carbomedics will at its option repair or replace the rejected Component
or issue a credit memo to Manufacturer for the cost of the Components
returned as well as all shipment costs to and from Manufacturer. For
purposes of this Agreement, Manufacturer is deemed to have accepted all
Components shipped which are not affirmatively
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rejected by Manufacturer within 60 days of receipt. If, during any
3-month period, the total number of Components returned by Manufacturer
as non-conforming and subsequently determined to be in fact conforming
to Specifications exceeds 5 percent of the total number of Components
delivered to Manufacturer during the same period, Manufacturer will pay
Sulzer Carbomedics an additional handling charge of $50.00 per
Component for each in-specification Component in excess of that 5
percent.
11. WARRANTIES. Although Sulzer Carbomedics agrees to carry out this
Agreement in accordance with its standard operating practices, Sulzer
Carbomedics makes no warranties of any kind, express or implied, concerning the
performance of the Components or of the accuracy or completeness of any
information Sulzer Carbomedics furnishes pursuant to this Agreement.
Specifically, Sulzer Carbomedics MAKES NO WARRANTY OF FITNESS FOR THE PURPOSE
INTENDED AND NO WARRANTY OF MERCHANTABILITY. Sulzer Carbomedics' sole
responsibility will be, at Sulzer Carbomedics' option, to repair, replace or
issue credit respecting any Components having defects in material workmanship at
the time of shipment by Sulzer Carbomedics, provided any such Component is
returned by Manufacturer to Sulzer Carbomedics f.o.b. destination within 60 days
after receipt of such Component(s). This paragraph concerning warranties states
Sulzer Carbomedics' entire obligation and the sole and exclusive remedy of
Manufacturer and any third party claiming under Manufacturer respecting the
components or any defects therein.
12. LIMITATION OF LIABILITY AND INDEMNITY.
(a) LIMITATION ON SULZER CARBOMEDICS' RESPONSIBILITY. Under no
circumstances will Sulzer Carbomedics be liable or responsible for
direct, incidental, consequential and/or special damages arising out of
use or implantation of prostheses employing Components supplied
hereunder including, but not limited to, damage to property of
Manufacturer or of other persons, or for injury to or death of any
person.
(b) MANUFACTURER'S RESPONSIBILITY. Sulzer Carbomedics will
have no control over the uses to which the Components will be devoted,
or over the circumstances of their use, storage, handling, distribution
or application. Manufacturer will assume full responsibility with
respect to the use of any Component or information furnished by Sulzer
Carbomedics hereunder, and it is mutually agreed that Sulzer
Carbomedics assumes no liabilities of any kind with respect to the use
by Manufacturer or any third party of such Components or information.
(c) HOLD HARMLESS. If Manufacturer undertakes to supply the
Components to others, it does so in its own discretion and upon its own
judgment as to risk. Manufacturer agrees, at its own expense, to
defend, indemnify, and hold harmless Sulzer Carbomedics, its officers,
agents, and employees from and against any and all claims, losses,
damages, causes of action, suits and liability of every kind, including
all expenses of litigation, court costs, and attorney's fees, for
injury to or death of any person, or for damage to any property,
arising from or out of or in connection with the design, manufacture,
marketing, sale, implantation, or use of any Component supplied under
this Agreement or the failure by Sulzer Carbomedics to warn
Manufacturer or any person of any defect in or risk associated with a
Component supplied under this Agreement, regardless of whether such
injury, death, or damages are caused in whole or in part by the
negligence of Sulzer Carbomedics, its officers, agents, or employees or
whether Sulzer Carbomedics is determined to be strictly liable for such
injury, death, or damage. It is the express intention of the parties,
both Sulzer Carbomedics and Manufacturer, that the indemnity
obligations and liabilities assumed by Manufacturer in this paragraph
be without monetary limit and without regard to causes thereof
including but not limited to any failure to warn, strict
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liability, or the negligence of Sulzer Carbomedics, its officers,
agents or employees, whether the negligence be sole, joint, or
concurrent, active or passive.
Manufacturer further agrees, at its own expense, to defend, indemnify,
and hold harmless Sulzer Carbomedics from and against any and all
claims, losses, damages, causes of action, suits, and liability of
every kind, including all expenses of litigation, court costs, and
attorney's fees, based on a claim alleging that the Components or any
of the Components infringe a patent of any third party.
Sulzer Carbomedics agrees, at its own expense, to defend, indemnify,
and hold harmless Manufacturer from and against any and all claims,
losses, damages, causes of action, suits, and liability of every kind,
including all expenses of litigation, court costs, and attorney's fees,
based on a claim that Sulzer Carbomedics' manufacturing processes or
the materials used in the fabrication or coating of the Components
infringe the patent of any third party.
(d) GENERAL LIABILITY/PRODUCT LIABILITY INSURANCE.
Manufacturer will maintain liability insurance, including coverage for
products liability and completed operations, during the term of this
Agreement with minimum annual limits of $5 million per claim/aggregate.
Manufacturer's annual product liability insurance self-insured
retention shall not exceed $50,000 per claim, $150,000 aggregate unless
written consent is first provided in writing by Sulzer Carbomedics.
Claims falling within Manufacturer's self-insured retention shall be
the responsibility of Manufacturer. If coverage is written on a
claims-made basis, Manufacturer will maintain a seven year tail
(extended reporting period) from the date of cancellation or nonrenewal
and the policy shall contain an endorsement which specifically provides
that in the event Manufacturer fails to purchase the tail coverage,
Sulzer Carbomedics has the right, but not the obligation, to purchase
the tail coverage. The policy will also contain a provision stating
that it is primary regardless of any other insurance which may be in
force. The liability insurance so maintained will be written by an
insurance carrier acceptable to Sulzer Carbomedics, include Sulzer
Carbomedics as an additional insured, and contain an endorsement to
provide Sulzer Carbomedics with at least 30 days prior written notice
of any cancellation, nonrenewal, or coverage reduction. Manufacturer
will purchase and maintain insurance after the termination of this
Agreement which will provide the coverage and limits described above
with Sulzer Carbomedics as an additional insured during the period any
Components supplied by Sulzer Carbomedics during the term of this
Agreement remain implanted in any living patient. Sulzer Carbomedics
may demand evidence of coverage, including a certified copy of the
policy, at any time during the term of this Agreement and during the
period Manufacturer is required to maintain coverage thereafter. In the
event Manufacturer fails to provide Sulzer Carbomedics with evidence of
the liability insurance required to be maintained pursuant to the
provisions of this paragraph and the failure continues for 10 days
following Manufacturer's receipt of a notice advising Manufacturer of
its failure to provide such evidence, then at any time thereafter
during the pendency of such failure, Sulzer Carbomedics will have the
option in its sole discretion to terminate this Agreement or to
purchase the insurance at Manufacturer's expense.
13. CONFIDENTIALITY. Any information to be disclosed by either party to
the other pursuant to this Agreement, and which is deemed by the disclosing
party to constitute confidential or proprietary information must be disclosed in
writing and conspicuously labeled as confidential information of the disclosing
party, or with words of similar impact. Subject to Paragraph 14(d) below, any
such confidential information which is initially disclosed orally must be noted
at the outset by the disclosing party as confidential information, and must be
reduced to writing and submitted by the disclosing party to the receiving party
within 15 business days after the original oral disclosure.
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All information, inventions and improvements relating to pyrocarbon or
coatings developed by the Sulzer Carbomedics will be the property of
Sulzer Carbomedics.
The receiving party will hold all such information in strict confidence
and will use it solely for the purposes for which it is supplied under
this Agreement. The receiving party will not disclose such information
to any third party or use same for the benefit of any third party. The
foregoing restrictions will not apply to any information which
(i) is not disclosed and labeled as provided in the
first paragraph of this Section (except orally disclosed
information for the first 15 business days thereafter, pending
the submission of same in writing) or
(ii) known to the receiving party prior to receipt
thereof from the disclosing party or
(iii) of public knowledge without breach by the
receiving party of its obligations hereunder or
(iv) rightfully received by the receiving party from
a third party without restriction on disclosure or use or
(v) disclosed by the disclosing party to a third
party without restriction on disclosure or use or
(vi) independently developed by personnel of the
receiving party who have not had access to or knowledge of the
contents of the disclosing party's disclosure or
(vii) disclosed after receiving the written consent
therefor of an authorized officer of the disclosing party;
provided that in the events (ii) (iii) , (iv), (v) , (vi) and (vii), the
receiving party can demonstrate same to the reasonable satisfaction of the
disclosing party.
The restrictions on use and disclosure of information under this
Section will survive the expiration or termination of this Agreement.
14. TERMINATION. This Agreement will become effective on the date first
above written and, unless earlier terminated as provided in this Agreement, will
continue in effect until December 31, 2000.
(a) Sulzer Carbomedics may terminate this Agreement if
Manufacturer fails to make any payment promptly when due, or if
Manufacturer infringes any patent of Sulzer Carbomedics by making or
having made any product or using any method covered by such patent in
or in preparation for commercial sale of cardiac valve prostheses, or
if Manufacturer is in default of any of its material obligations under
this Agreement. Sulzer Carbomedics must notify the Manufacturer in
writing of any such default and allow the Manufacturer 30 days in which
to cure such default, and if such default is not cured within that
period, or such default is so cured but is subsequently repeated,
Sulzer Carbomedics may, by giving notice of default, terminate this
agreement in writing at anytime thereafter. Sulzer Carbomedics'
remedies will not be deemed exclusive, but are in addition to any and
all other remedies available at law or under this Agreement.
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(b) Manufacturer may terminate this Agreement upon 90 days
written notice to Sulzer Carbomedics if Sulzer Carbomedics defaults on
any of its material obligations hereunder and such default is not cured
within 30 days after Sulzer Carbomedics receives notice.
(c) If Manufacturer terminates this Agreement for any reason
other than the default of Sulzer Carbomedics (whether or not such
termination is permitted under this Agreement) or decides not to renew
or extend this Agreement, Manufacturer will pay for all completed
Components conforming to Manufacturer's Specifications and pay the cost
of all work in process on a percentage-of-completion basis, the cost of
all expendable tooling, and the cost of any unused Raw Materials.
Inventories will be disposed of as provided in Section 9. The
obligations of this paragraph 14(c) will be in addition to and not in
lieu of Sulzer Carbomedics' other legal, contractual and equitable
remedies, if any.
(d) Sections 8. 10, 11, 12, and 13 will survive termination or
expiration of this Agreement and remain in effect for the respective
periods specified therein, or, if no period is specified, for a period
which is reasonable in the circumstances.
15. QUALITY ASSURANCE. Sulzer Carbomedics' Quality Assurance Manual
establishes the quality control system to be employed throughout the performance
of this Agreement. A copy of this manual--with Sulzer Carbomedics' proprietary
information, if any, deleted--will be made available to Manufacturer.
16. ASSIGNMENT. Neither party will have the right to assign this
Agreement, in whole or in part, to any third party without the prior written
consent of a duly authorized officer of the other party, which consent will not
be unreasonably withheld. An attempted assignment without consent will be
grounds for termination of this Agreement by such other party, without thereby
affecting any rights or remedies it may have under this Agreement or at law.
Notwithstanding the foregoing, Sulzer Carbomedics may freely assign this
Agreement to any company controlling, controlled by or under common control with
Sulzer Carbomedics or succeeding to the entire business of Sulzer Carbomedics.
This Agreement will be binding upon and inure to the benefit of the parties and
their successors and assigns to which such consent, if necessary, is given.
17. GENERAL.
(a) WAIVERS. No waiver of any right or remedy hereunder will
be effective unless based upon a writing signed by the party against
whom it is sought to be enforced.
(b) NOTICES. All notices required or permitted under this
Agreement must be made in writing and delivered in person or by
certified or registered mail, postage prepaid, addressed to the
attention of the President of the other party at the respective address
first written above, or such other address as may be given by notice.
(c) SEVERABILITY. if any provision of this Agreement is
declared invalid or unenforceable by a court of competent jurisdiction,
such provision will be severed from this Agreement and the remaining
provisions will be unaffected thereby. The parties will promptly meet
and negotiate a substitute provision meeting as closely as possible the
intent of the invalid or unenforceable provision and, with reasonable
precision, avoiding the defects of the original provision.
(d) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the parties in respect of the
subject matter of this Agreement and
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supersedes all prior agreements, understanding, discussions and
communications between the parties respecting such subject matter. No
modification of this Agreement will be effective unless made in
writing signed by a duly authorized officer of each party, except as
otherwise expressly permitted herein. Nothing in this Agreement will
limit the scope of subsequent, written agreements, signed by both
parties, related to nondisclosure of confidential information. In the
event of a conflict between this Agreement and the terms and
conditions contained in the Specifications or in Manufacturers
purchase orders, the terms of this Agreement will control.
(e) GOVERNING LAW. This Agreement has been entered into under
the laws of the State of Texas and will be governed by and construed in
accordance with those laws.
Executed by the parties as of the day and year first written above.
CV DYNAMICS DBA MEDICAL INCORPORATED
By: /s/ Xxxx Xxxxxx
-----------------------------------------
Typed Name: Xxxx Xxxxxx
-------------------------------
Title: Vice President
------------------------------------
SULZER CARBOMEDICS. INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Typed Name: Xxxxxxx X. Xxxxxxx
-------------------------------
Title: V.P., General Manager - Operations
------------------------------------
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EXHIBIT A
SPECIFICATIONS
Medical Incorporated Specification 100043-TAB, Rev. D., Pyrolitic Carbon-Coated
Graphite, Silicon Alloyed
Medical Incorporated Drawing C-200049-TAB, Rev. V., Disc-Omni Series
Medical Incorporated Drawing D-200183-TAB, Rev. P., Omnicarbon Prosthetic Heart
Valve, Critical Dimensions
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EXHIBIT B
PRICE AND QUANTITY SCHEDULES
PRICES
The price charged for each component will be determined by both a base
price for each component and a factor based on the lead time provided
for each shipment. During 1998, the base prices will be [*] for each
disc and [*] for each orifice. The price charged for each component
will be the base price multiplied by a factor based on the lead time
for each shipment. If the lead time provided is 13 weeks or more, the
factor will be 100%. If the lead time provided is between 8 and 12
weeks, then the factor will be 115%. If the lead time provided is less
than 8 weeks, then the factor will be 125%. Given these base prices and
lead-time factors, the prices to be charged for each component shipped
during 1998 are listed in the table below.
PRICES CHARGED DURING 1998
Lead Time Price Price Per Valve Set
Lead Time Provided Factor Per Disc Orifice Equivalent
------------------ ------ -------- ------- ----------
13 weeks or more 100% [*] [*] [*]
8 to 12 weeks 115% [*] [*] [*]
Less Than 8 weeks 125% [*] [*] [*]
The "lead time provided" is the time between receipt by Sulzer
Carbomedics, either by fax or by another method of delivery, of a
valid, signed purchase order and the later of the dates when the first
shipment on that purchase order is requested or when it is shipped. If
multiple shipments are requested on a single purchase order, the same
component prices will be charged for all components on that purchase
order, and the lead-time factor will be determined on the basis of the
first shipment on the purchase order.
The prices charged will be adjusted for inflation each calendar year in
accordance with Section 3(b) of this Agreement.
MINIMUM PURCHASE QUANTITIES
The minimum purchase quantities described in Section 4 of this
Agreement are listed in the table below.
Calendar Valve Set
Year Equivalents
---- -----------
1998 [*]
1999 [*]
2000 [*]
* Confidential portion omitted and filed separately with the SEC.
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EXHIBIT C
RAW MATERIALS
Graphite Substrate, AXF-5Q with tungsten loading per the TAB, or equivalent
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