1
EXHIBIT 10.16
FOR PURCHASES DIRECT FROM SUPPLIER
SUBJECT TO COMPETITIVE BID PROCESS
NOVATION, LLC
SUPPLIER AGREEMENT
2
TABLE OF CONTENTS
i
3
ii
4
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"). A current
listing of Members is maintained by Novation in the electronic database included
as part of the electronic data interchange described in Subsection 7.c below
("Novation Database"). A provider will become a "Member" for purposes of this
Agreement at the time Novation adds the provider to the Novation Database and
will cease to be a "Member" for such purposes at the time Novation deletes the
provider from the Novation Database.
b. SUPPLIER. Supplier is the manufacturer of products listed on Exhibit
A (the provider of installation, training and maintenance services for such
products, and the provider of any other services listed on Exhibit A (such
products and/or services are collectively referred to herein as "Products").
c. 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") 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 C ("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 Members at the Award Prices 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.
1
5
b. OPTIONAL PURCHASING ARRANGEMENT. Novation and Supplier agree that
each Member will have the option of purchasing the Products under the terms of
this Agreement or under the terms of any other purchasing or pricing arrangement
that may exist between such Member and Supplier at any time during the Term;
provided, however, that all of Supplier's sales of the Products to Members,
whether under the pricing and other terms of this Agreement or otherwise, will
be reported by Supplier to Novation in accordance with Section 7 below and will
be included in the aggregate dollar volume of purchases used in calculating the
Marketing Fees payable to Novation in accordance with Section 9 below. If any
Member uses any other purchasing or pricing arrangement with Supplier when
ordering products covered by any contract between Supplier and Novation,
Supplier will notify such Member of the pricing and other significant terms of
the applicable Novation contract.
c. MARKET COMPETITIVE TERMS. Supplier agrees that the prices, quality,
value and technology of all Products purchased under this Agreement will remain
market competitive at all times during the Term. Supplier agrees to provide
prompt written notice to Novation of all offers for the sale of the Products
made by Supplier during the Term on terms that are more favorable to the offeree
than the terms of this Agreement. Supplier will lower the Award Prices or
increase any discount applicable to the purchase of the Products as necessary to
assure market competitiveness. If at any time during the Term Novation receives
information from any source suggesting that Supplier's prices, quality, value or
technology are not market competitive, Novation may provide written notice of
such information to Supplier, and Supplier will, within five (5) business days
for Novation's private label Products and within ten (10) business days for all
other Products, advise Novation in writing of and fully implement all
adjustments necessary to assure market competitiveness.
d. CHANGES IN 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 all
Members with not less than forty-five (45) days' prior written notice and
Novation with not less than sixty (60) days' prior written notice of any change
in pricing terms permitted or required by this Agreement. For purposes of the
foregoing notification requirements, a change in pricing terms will mean any
change that affects the delivered price to the Member, including, without
limitation, changes in list prices, discounts or pricing tiers or schedules.
Such prior written notice will be provided in such format and in such detail as
may be required by Novation from time to time, and will include, at a minimum,
sufficient information to determine line item pricing of the Products for all
affected Members.
2
6
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 set forth in the
Non-Price Specifications and for any renewal terms set forth in the Non-Price
Specifications by Novation's delivery of written notice of renewal to Supplier
not less than ten (10) days prior to the end of the initial term or any renewal
term, as applicable. The initial term, together with the renewal terms, if any,
are collectively referred to herein as the "Term."
b. TERMINATION BY NOVATION. Novation may terminate this Agreement at
any time for any reason whatsoever by delivering not less than ninety (90) days'
prior written notice thereof to Supplier. In addition, Novation may terminate
this Agreement immediately by delivering written notice thereof to Supplier upon
the occurrence of either of the following events:
(1) Supplier breaches this Agreement; or
(2) Supplier becomes bankrupt or insolvent or makes an
unauthorized assignment or goes into liquidation or proceedings are
initiated for the purpose of having a receiving order or winding up
order made against Supplier, or Supplier applies to the courts for
protection from its creditors.
c. TERMINATION BY SUPPLIER. Supplier may terminate this Agreement at
any time for any reason whatsoever by delivering not less than one hundred
eighty (180) days prior written notice thereof to Novation.
4. PRODUCT SUPPLY.
a. DELIVERY AND INVOICING. On and after the Effective Date, Supplier
agrees to deliver Products ordered by the Members to the Members, FOB
destination, and will direct its invoices to the Members in accordance with
this Agreement. Supplier agrees to prepay and absorb charges, if any, for
transporting Products to the Members. Payment terms are 2%-10, Net 30 days.
Supplier will make whatever arrangements are reasonably necessary with the
Members to implement the terms of this Agreement; provided, however, Supplier
will not impose any purchasing commitment on any Member as a condition to the
Member's purchase of any Products pursuant to this Agreement.
b. PURCHASE ORDERS. This Agreement will govern all orders for and sales
of the Products by and to the Members, notwithstanding any pre-printed terms on
Supplier's forms; provided, however, the terms of the usual purchase orders of
the Members will supersede this Agreement in the event of conflict or
inconsistency.
3
7
c. PRODUCT FILL RATES; CONFIRMATION AND DELIVERY TIMES. Supplier agrees
to provide product fill rates to Members of greater than ninety-five percent
(95%), calculated as line item orders. Supplier will provide confirmation of
orders from Members via the electronic data interchange described in Subsection
7.c below within two (2) business days after placement of the order and will
deliver the Products to the Members within ten (10) business days after
placement of the order.
d. BUNDLED TERMS. Supplier agrees to give Novation prior written notice
of any offer Supplier makes to any Member to sell products that are not covered
by this Agreement in conjunction with Products covered by this Agreement under
circumstances where the Member has no real economic choice other than to accept
such bundled terms.
e. DISCONTINUATION OF PRODUCTS; CHANGES IN PACKAGING. Supplier will
have no unilateral right to discontinue any of the Products or to make any
changes in packaging which render any of the Products substantially different in
use, function, or distribution. Supplier may request Novation in writing to
agree to a proposed discontinuation of any Products or a proposed change in
packaging for any Products at least ninety (90) days prior to the proposed
implementation of the discontinuation or change. Under no circumstances will any
Product discontinuation or packaging changes be permitted under this Agreement
without Novation's agreement to the discontinuation or change. In the event
Supplier implements such proposed discontinuation or change without Novation's
agreement thereto in writing, in addition to any other rights and remedies
Novation or the Members may have by reason of such discontinuation or change,
(i) Novation will have the right to terminate any or all of the Product(s)
subject to such discontinuation or change or to terminate this Agreement in its
entirety immediately upon becoming aware of the discontinuation or change or any
time thereafter by delivering written notice thereof to Supplier, (ii) the
Members may purchase products equivalent to the discontinued or changed Products
from other sources and Supplier will be liable to the Members for all reasonable
costs in excess of the 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.
f. REPLACEMENT OR NEW PRODUCTS. Supplier will have no unilateral right
to replace any of the Products listed in Exhibit A with other products or to add
new products to this Agreement. Supplier may request Novation in writing to
agree to a replacement of any of the Products or the addition of a new product
that is closely related by function or use to an existing Product at least sixty
(60) days prior to the proposed implementation of the replacement or to the new
product introduction. Under no circumstances will any Product replacement or new
product addition to this Agreement be permitted without Novation's agreement to
the replacement or new product.
g. MEMBER SERVICES. Supplier will consult with each Member to identify
the Member's policies relating to access to facilities and personnel. Supplier
will comply with such policies and will establish a specific timetable for sales
calls by sales representatives to satisfy the needs of the Member. Supplier will
promptly respond to Members' reasonable requests for
4
8
verification of purchase history. If requested by Novation or any Members,
Supplier will provide, at Supplier's cost, on-site inservice training to
Members' personnel for pertinent Products.
h. PRODUCT DELETION. Notwithstanding anything to the contrary contained
in this Agreement, Novation may delete any one or more of the Products from this
Agreement at any time, at will and without cause, upon not less than sixty (60)
days' prior written notice to Supplier.
i. RETURN OF PRODUCTS. Any Member, in addition to and not in limitation
of any other rights and remedies, will have the right to return Products to
Supplier under any of the following circumstances: (1) the Product is ordered or
shipped in error; (2) the Product is no longer needed by the Member due to
deletion from its standard supply list or changes in usage patterns, provided
the Product is returned at least six (6) months prior to its expiration date and
is in a re-saleable condition; (3) the Product is received outdated or is
otherwise unusable; (4) the Product is received damaged, or is defective or
nonconforming; (5) the Product is one which a product manufacturer or supplier
specifically authorizes for return; or (6) the Product is recalled. Supplier
agrees to accept the return of Products under these circumstances without charge
and for full credit.
j. FAILURE TO SUPPLY. In the event of Supplier's failure to perform in
accordance with the terms of this Agreement, the Member may purchase products
equivalent to the Products from other sources and Supplier will be liable to the
Member for all reasonable costs in excess of the 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 or the Members may have resulting from such failure.
5. PRODUCT QUALITY.
a. FREE FROM DEFECTS. Supplier warrants the Products against defects in
material, workmanship and design for the warranty period set forth in the
Non-Price Specifications ("Warranty Period"). Supplier will make all necessary
arrangements to assign such warranty to the Members. Supplier further represents
and warrants that the Products will conform to the specifications, drawings, and
samples furnished by Supplier or contained in the Non-Price Specifications and
will be safe for their intended use. If any Products are defective and a claim
is made by a Member on account of such defect during the Warranty Period,
Supplier will, at the option of the Member, either replace the defective
Products or credit the Member. Supplier will bear all costs of returning and
replacing the defective Products, as well as all risk of loss or damage to the
defective Products from and after the time they leave the physical possession of
the Member. The warranties contained in this Subsection will survive any
inspection, delivery, acceptance or payment by a Member. In addition, if there
is at any time wide-spread failure of the Products even after the Warranty
Period has ended, the Member may return all said Products for credit or
replacement, at its option. This Subsection and the obligations contained herein
will
5
9
survive the expiration or earlier termination of this Agreement. The remedies
set forth in this Subsection are in addition to and not a limitation on any
other rights or remedies that may be available against Supplier.
b. PRODUCT COMPLIANCE. Supplier represents and warrants to Novation,
the Clients and the Members that the Products are, if required, registered, and
will not be distributed, sold or priced by Supplier in violation of any federal,
state or local law. Supplier represents and warrants that as of the date of
delivery to the Members all Products will not be adulterated or misbranded
within the meaning of the Federal Food, Drug and Cosmetic Act and will not
violate or cause a violation of any applicable law, ordinance, rule, regulation
or order. Supplier agrees it will comply with all applicable Good Manufacturing
Practices and Standards contained in 21 C.F.R. Parts 210, 211, 225, 226, 600,
606, 610, 640, 660, 680 and 820. Supplier's representations, warranties and
agreements in this Subsection will survive the expiration or earlier termination
of this Agreement.
c. PATENT INFRINGEMENT. Supplier represents and warrants that sale or
use of the Products will not infringe any United States patent. Supplier will,
at its own expense, defend every suit which will be brought against Novation or
a Member for any alleged infringement of any patent by reason of the sale or use
of the Products and will pay all costs, damages and profits recoverable in any
such suit. This Subsection and the obligations contained herein will survive the
expiration or earlier termination of this Agreement. The remedies set forth in
this Subsection are in addition to and not a limitation an any other rights or
remedies that may be available against Supplier.
d. PRODUCT CONDITION. Unless otherwise stated in the Non-Price
Specifications or unless agreed upon by a Member in connection with Products it
may order, all Products will be new. Products which are demonstrators, used,
obsolete, seconds, or which have been discontinued are unacceptable unless
otherwise specified in the Non-Price Specifications or the Member accepts
delivery after receiving notice of the condition of the Products.
e. RECALL OF PRODUCTS. Supplier will reimburse the Members for any cost
associated with any Product corrective action, withdrawal or recall requested by
Supplier or required by any governmental entity. In the event a product recall
or a court action impacting supply occurs, Supplier will notify Novation in
writing within twenty-four (24) hours of any such recall or action. Supplier's
obligations in this Subsection will survive the expiration or earlier
termination of this Agreement.
f. SHELF LIFE. Sterile Products and other Products with a limited shelf
life sold under this Agreement will have the longest possible shelf life and the
latest possible expiration dates. Unless required by stability considerations,
there will not be less than an eighteen (18) month interval between a Product's
date of delivery by Supplier to the Member and its expiration date.
6
10
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).
7
11
(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: December 31, 1998; January 1,
1999; September 9, 1999; September 10, 1999; December 31, 1999; January
1, 2000; February 28, 2000; February 29, 2000; March 1, 2000; December
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 ELECTRONIC DATA INTERCHANGE.
a. REPORT CONTENT. Within twenty (20) days after the end of each full
and partial month during the Term ("Reporting Month"), Supplier will submit to
Novation a report in the form of a diskette containing the following information
in form and content reasonably satisfactory to Novation:
(1) the name of Supplier, the Reporting Month and year and the
Agreement number (as provided to Supplier by Novation);
(2) with respect to each Member (described by LIC number (as
provided to Supplier by Novation), health industry number (if
applicable), full name, xxxxxx xxxxxxx, xxxx, xxxxx, 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
8
12
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
000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
c. ELECTRONIC DATA INTERCHANGE. In addition to the reporting
requirements set forth in Subsections 7.a and 7.b above, the parties agree to
facilitate the administration of this Agreement by transmitting and receiving
data electronically. The parties agree to all terms and conditions set forth in
Exhibit D attached hereto.
8. OBLIGATIONS OF NOVATION.
a. INFORMATION TO MEMBERS. 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 will, from time to
time, at the request of Supplier, deliver to each Member reasonable and
appropriate amounts and types of materials supplied by Supplier to Novation
which relate to the purchase of the Products.
b. MARKETING SERVICES. Novation, in conjunction with the Clients, will
market the purchasing arrangements covered by this Agreement to the Members.
Such promotional services may include, as appropriate, the use of direct mail,
contact by Novation's field service delivery team, member support services, and
regional and national meetings and conferences. As appropriate, Novation, in
conjunction with the Clients, will involve Supplier in these promotional
activities by inviting Supplier to participate in meetings and other reasonable
networking activities with Members.
9
13
9. MARKETING FEES.
a. CALCULATION. Supplier will pay to Novation, as the authorized
collection agent for the Clients, marketing fees ("Marketing Fees") belonging to
the Clients equal to the Agreed Percentage of the aggregate gross charges of all
net sales of the Products to the Members directly or indirectly from Supplier,
whether under the pricing and other terms of this Agreement or under the terms
of any other purchasing or pricing arrangements that may exist between the
Members and Supplier. Such gross charges will be determined without any
deduction for uncollected accounts or for costs incurred in the manufacture,
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 immediately preceding month
with the estimated Marketing Fees actually paid during such preceding month.
Supplier will pay all estimated and adjusted Marketing Fees by check made
payable to "Novation, LLC." All checks should reference the Agreement number.
Supplier will include with its check the reconciliation calculation used by
Supplier to determine the payment adjustment, with separate amounts shown for
each Client's component thereof. Checks sent by first class mail will be mailed
to the following address:
Novation
00 Xxxxxxxxxx Xx., Xxxxx 0000
Xxxxxxx, XX 00000-0000
Checks sent by courier (Federal Express, United Parcel Service or messenger)
will be addressed as follows:
The Northern Trust Company
000 X. Xxxxx Xx.
0xx Xxxxx Receipt & Dispatch
Xxxxxxx, XX 00000
Attn: Novation, Suite 1420
10. ADMINISTRATIVE PENALTIES. In the event Supplier fails to pay the Marketing
Fees in accordance with the requirements of Section 9 above, Novation may
invoice Supplier for the Marketing Fees estimated by Novation to be due, payable
within ten (10) days of the date of such invoice. Invoice by Novation or payment
by Supplier will not relieve Supplier of its payment obligations under Section
9. In addition, upon the occasion of the first failure to receive
10
14
Marketing Fees, to receive reports described in Section 7 above, or to receive
notice of change in pricing terms described in Subsection 2.e above, in each
case within the time and manner required by this Agreement, Supplier will
receive a written warning. Upon the second and any subsequent failure to provide
such Marketing Fees, reports or notices, Supplier will pay an administrative
penalty in accordance with the following schedule:
2nd failure: $ 500.00
3rd failure: $ 1,000.00
4th failure: $ 2,500.00
5th failure: $ 5,000.00
6th & each subsequent failure: $10,000.00
Novation's assessment of administrative penalties in accordance with this
Section will be in addition to any other rights and remedies Novation or the
Clients may have by reason of Supplier's failure to pay the Marketing Fees or
provide the reports or notices within the time and manner required by this
Agreement.
11. NONPAYMENT OR INSOLVENCY OF A MEMBER. If a Member fails to pay Supplier for
Products, or if a Member becomes bankrupt or insolvent or makes an assignment
for the benefit of creditors or goes into liquidation, or if proceedings are
initiated for the purpose of having a receiving order or winding up order made
against a Member, or if a Member applies to the courts for protection from its
creditors, then, in any such case, this Agreement will not terminate, but
Supplier will have the right, upon prior written notice to Novation and the
Member, to discontinue selling Products to that Member.
12. INSURANCE.
a. POLICY REQUIREMENTS. Supplier will maintain and keep in force during
the Term product liability, general public liability and property damage
insurance against any insurable claim or claims which might or could arise
regarding Products purchased by the Members from Supplier. Such insurance will
contain a minimum combined single limit of liability for bodily injury and
property damage in the amounts of not less than $2,000,000 per occurrence and
$10,000,000 in the aggregate; will name Novation, the Clients and the Members,
as their interests may appear, as additional insureds, and will contain an
endorsement providing that the carrier will provide directly to all named
insured copies of all notices and endorsements. Supplier will provide to
Novation 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.
11
15
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 or the
Members, or terminate said liability insurance or self-insurance program except
after thirty (30) days' prior written notice to Novation and will provide to
Novation copies of all notices and endorsements as soon as practicable after it
receives or gives them.
13. COMPLIANCE WITH LAW. Supplier represents and warrants that to the best of
its knowledge, after due inquiry, it is in compliance with all federal and state
statutes, laws, ordinances and regulations applicable to it ("Legal
Requirements") which are material to the operation of its business and the
conduct of its affairs, including Legal Requirements pertaining to the safety of
the Products, occupational health and safety, environmental protection,
nondiscrimination, antitrust, and equal employment opportunity. During the Term,
Supplier will: (1) promptly notify Novation of any lawsuits, claims,
administrative actions or other proceedings asserted or commenced against it
which assert in whole or in part that Supplier is in noncompliance with any
Legal Requirement which is material to the operation of its business and the
conduct of its affairs and (2) promptly provide Novation with true and correct
copies of all written notices of adverse findings from the U.S. Food and Drug
Administration ("FDA") and all written results of FDA inspections which pertain
to the Products.
14. HOLD HARMLESS. Supplier will indemnify, hold harmless, and, if requested,
defend Novation, the Clients and the Members, and their respective officers,
directors, regents, agents, affiliates and employees, from and against any
claims, liabilities, damages, actions, costs and expenses (including reasonable
attorneys' fees and court costs) of any kind or nature, whether at law or in
equity, arising from or caused by (1) the breach of any representation,
warranty, covenant or agreement of Supplier contained in this Agreement or in
the Bid, or (2) the condition of any Product at the time of its delivery to a
Member pursuant to this Agreement, including a defect in material, workmanship
or design, whether such breach or condition is caused by the negligence of any
person seeking indemnification hereunder or otherwise; provided that such
indemnification, hold harmless and right to defense will not be applicable where
the claim, liability, damage, action, cost or expense arises solely as a result
of an act or failure to act of the person seeking to be indemnified, held
harmless or defended hereunder. This Section and the obligations contained
herein will survive the expiration or earlier termination of this Agreement. The
remedies set forth in this Section are in addition to and not a limitation on
any other rights or remedies that may be available against Supplier.
12
16
15. BOOKS AND RECORDS; FACILITIES INSPECTIONS. Supplier agrees to keep, maintain
and preserve complete, current and accurate books, records and accounts of the
transactions contemplated by this Agreement and such additional books, records
and accounts as are necessary to establish and verify Supplier's compliance with
this Agreement. All such books, records and accounts will be available for
inspection and audit by Novation representatives at any time during the Term and
for two (2) years thereafter, but only during reasonable business hours and upon
reasonable notice. Novation agrees that its routine audits will not be conducted
more frequently than twice in any consecutive twelve (12) month period, subject
to Novation's right to conduct special audits whenever it deems it to be
necessary. In addition, Supplier will make its manufacturing and packaging
facilities available for inspection from time to time during the Term by
Novation representatives, but only during reasonable business hours and upon
reasonable notice. The exercise by Novation of the right to inspect and audit is
without prejudice to any other or additional rights or remedies of either party.
16. USE OF NAMES, ETC. Supplier agrees that it will not use in any way in its
promotional, informational or marketing activities or materials (i) the names,
trademarks, logos, symbols or a description of the business or activities of
Novation or any Client or Member without in each instance first obtaining the
prior written consent of the person owning the rights thereto; or (ii) the award
or the content of this Agreement without in each instance first obtaining the
prior written consent of Novation.
17. CONFIDENTIAL INFORMATION.
a. NONDISCLOSURE. Supplier agrees that it will:
(1) keep strictly confidential and hold in trust all
confidential information of Novation, the Clients and the Members;
(2) not use the confidential information for any purpose other
than the performance of its obligations under this Agreement, without
the prior written consent of Novation;
(3) not disclose the confidential information to any third
party (unless required by law) without the prior written consent of
Novation; and
(4) not later then thirty (30) days after the expiration or
earlier termination of this Agreement, return to Novation, the Client
or the Member, as the case may be, the confidential information.
b. DEFINITION. "Confidential information", as used in Subsection 17.a
above, will consist of all information relating to the prices and usage of the
Products (including all information contained in the reports produced by
Supplier pursuant to Section 7 above) and all documents and other materials of
Novation, the Clients and the Members containing information relating to the
programs of Novation, the Clients or the Members of a proprietary or sensitive
nature not readily available through sources in the public domain. In no event
will Supplier
13
17
provide to any person any information relating to the prices it charges the
Members for Products ordered pursuant to this Agreement without the prior
written consent of Novation.
18. MISCELLANEOUS.
a. CHOICE OF LAW. This Agreement will be governed by and construed in
accordance with the internal substantive laws of the State of
Texas and the
Texas courts will have jurisdiction over all matters relating to this Agreement;
provided, however, the terms of a Member's purchase order will be governed by
and construed in accordance with the choice of law and venue provisions set
forth in the purchase order.
b. NOT RESPONSIBLE. Novation and the Clients will not be responsible or
liable for any Member's breach of any purchasing commitment or for any other
actions of any Member. In addition, none of the Clients will be responsible or
liable for the obligations of any party to this Agreement.
c. THIRD PARTY BENEFICIARIES. All Clients and Members are intended
third party beneficiaries of this Agreement. All terms and conditions of this
Agreement which are applicable to the Clients will inure to the benefit of and
be enforceable by the Clients and their respective successors and assigns. All
terms and conditions of this Agreement which are applicable to the Members will
inure to the benefit of and be enforceable by the Members and their respective
successors and assigns.
d. NOTICES. Except as otherwise expressly provided herein, all notices
or other communications required or permitted under this Agreement will be in
writing and will be deemed sufficient when mailed by United States mail, or
delivered in person against receipt to the party to which it is to be given, at
the address of such party set forth below:
If to Supplier:
To the address set forth by Supplier in the Bid
If to Novation:
Novation
Attn: Vice President, Contract Services
000 Xxxx Xxx Xxxxxxx Xxxx.
Xxxxxx, XX 00000
or to such other address as the party will have furnished in writing in
accordance with the provisions of this Subsection.
e. NO ASSIGNMENT. No assignment of all or any part of this Agreement
may be made without and consent of the other party; except that Novation
may assign its rights the prior written obligations to any affiliate of
Novation. Any assignment of all or any part of this
14
18
Agreement by either party will not relieve that party of the responsibility of
performing its obligations hereunder to the extent that such obligations are
not satisfied in full by the assignee. This Agreement will be binding upon and
inure to the benefit of the parties' respective successors and assigns.
f. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement will be prohibited by or
invalid under applicable law, such provision will be ineffective to the extent
of such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement. Each party will, at its
own expense, take such action as is reasonably necessary to defend the validity
and enforceability of this Agreement and will cooperate with the other party as
is reasonably necessary in such defense.
g. ENTIRE AGREEMENT. This Agreement, together with the exhibits listed
below and each Member's purchase order will constitute the entire agreement
between each Member and Supplier and no other terms and conditions in any
document, acceptance, or acknowledgment will be effective or binding upon a
Member unless expressly agreed to in writing. The following exhibits are
incorporated by reference in this Agreement:
Exhibit A Product and Service Description and Pricing
Exhibit B Non-Price Specifications
Exhibit C Award Letter
Exhibit D Electronic Data Interchange Agreement
Exhibit E Exceptions to the
Supplier Agreement CE8006B
SUPPLIER: Universal Hospital Services, Inc.
----------------------------------
ADDRESS: 0000 Xxxxxxxxx Xxxxx
----------------------------------
0000 Xxxx 00xx Xx.
----------------------------------
Xxxxxxxxxxx, XX 00000-0000
----------------------------------
SIGNATURE: /s/ [ILLEGIBLE]
----------------------------------
TITLE: Chief Financial Officer DATE: 11/20/98
---------------------------------- --------------
15
19
[NOVATION LETTERHEAD]
November 13, 2000
Xx. Xxx Xxxxx
National Accounts Manager
Universal Hospital Services, Inc.
0000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
RE: Novation
Supplier Agreement #CE80061
Dear Xxx:
Pursuant to the recent conversation between our two companies, Novation, LLC and
Universal Hospital Services, Inc. (UHS) hereby agree to extend the above
referenced
Supplier Agreement between them, dated as of the Award Letter date of
December 8, 1998, through December 31, 2001.
Effective January 1, 2001, and with regard to Exhibit A of the Agreement:
(1) The current Exhibit A attached to the December 8, 1998 Agreement, is
replaced with the New Exhibit A attached hereto.
(2) Volume discounts shall be available only to Members whose accounts
receivable with UHS are within the net 30-day terms of the Agreement.
(3) Volume discounts shall not be applied to monitoring systems or Long
Term Rental Agreements.
(4) The Conversion Incentive Agreement shall cease.
(5) Members shall be responsible for all loss of or damage to equipment
while in their possession.
(6) UHS will negotiate appropriate pricing methods with each Member
facility.
Also effective January 1, 2001, and with regard to Exhibit B of the
Agreement:
(1) The marketing fee identified in the current Exhibit B attached to the
December 8, 1998 Agreement, is amended from three percent (3%) to
two percent (2%).
(2) Marketing fees shall be paid on all Member sales, excepting those
Members who have provided UHS written notification that they will be
purchasing through another hospital alliance or group purchasing
organization.
(3) Upon request, UHS will provide Novation written notification of those
Members providing notice of election to purchase through another
hospital alliance or group purchasing organization.
20
Xxx Xxxxx
Universal Hospital Services, Inc.
November 13, 2000
Page Two
All other terms and conditions of the Agreement remain unchanged and in full
force and effect. If this evidences your understanding of our agreement, please
so indicate by signing in the space provided below and returning this letter to
the attention of Xxxx Xxxxxx. A copy of this letter is provided for your
records.
Very truly yours,
/s/ XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx
Vice President
Contract and Program Services
AGREED TO AND ACCEPTED TO THIS 16 DAY OF NOVEMBER, 2000.
Universal Hospital Services, Inc.
By: /s/ XXXX XXXXXXX
---------------------------------------------
Printed Name: Xxxx Xxxxxxx
-----------------------------------
Title: V.P. - National Accounts/Asset Management
------------------------------------------
Date: 11-16-00
-------------------------------------------
