Supply Services. 2.1 SI shall manufacture and sell the Instrument exclusively to BMC and Affiliates for worldwide marketing and selling at prices established by the parties pursuant to paragraph 3. 1. Nothing in this Agreement shall prevent BMC from manufacturing or having manufactured, marketing, selling, or otherwise supplying other non- invasive devices on a world-wide basis. 2.2 During the term of this Agreement SI [or a mutually approved contract manufacturer] shall be BMC's sole and exclusive source for the Instrument, provided that (a) SI provides an adequate and timely supply of the Instrument to BMC in accordance with Purchase Orders issued by BMC and accepted by SI, (b) SI maintains the quality assurance level as stated in BMC's Quality Partners Manual and or as may be otherwise agreed to by the parties, in writing, (c) SI follows the most current and pertinent Federal Food and Drug Administration guidelines, meets the requirements of ISO9001:1994, section 4.4 during development, and be in compliance with Good Manufacturing Practices as found in 21 CFR 820 prior to production, and (d) SI's employs reasonably sound cost management practices. SI warrants that it will apply all reasonable resources to its operation in order to attain a certification rating [as defined in BMC's Quality Partners Manual within twenty-four [24] months from the start of Instrument production for sale by BMC. SI further agrees to make available to BMC for purchase, spare parts and or replacement/repair parts for a period of not less than seven [7] years from end of market sales by BMC. 2.3 SI represents that it has or will have, prior to the date of Market Introduction at its Norcross, Georgia facility or other manufacturing facility as may be jointly approved by the parties manufacturing capacity to produce the Instrument in the following minimum annual quantities: Date Units per Annum ---- --------------- Market Introduction Date BMC's Annual Forecast Volumes, +35% One year after Market Introduction Date BMC's Annual Forecast Volumes, +50% NOTE: The quantities stated herein are estimated and are the result of a review of the current business conditions and other information available to BMC at the time the estimate is prepared. BMC shall not be obligated to purchase any Instruments except pursuant to purchase orders as described in Section 2.5. 2.4 In order to facilitate SI's planning of production, and to assist SI in making certain decisions relative to inventory of long lead items, BMC shall submit to SI a non-binding estimate of its requirements of Instruments monthly covering a forward period of not less than twelve (12) months. Upon receipt of BMC's estimate, if SI determines that it has insufficient capacity to meet the quantities stated in the estimate, it shall notify BMC within fifteen (15) days of the date of receipt of BMC's estimate that such condition exists, and will present recommendations regarding capacity changes to meet BMCs estimate. BMC shall promptly review SI's notice and schedule a meeting with SI to review the recommendations and reach agreement on a course of action. In an effort to reduce lead time, and in accordance with production forecasts provided by BMC under this Agreement, SI agrees to establish an inventory level at its facility [financed by BMC for only the first twelve months of production by SI] of Instrument component parts which have long lead times. The inventory mix and levels will be reviewed quarterly by the parties, and the parties, by mutual agreement, may make changes to the level and the mix. The details of this activity will be negotiated by the parties and will be contained in the blanket order for the first year's supply of Instruments. Also included will be the details of SI's refunding plan employing price discounts on subsequent purchases of Instruments for said financing by BMC. 2.5 During the term of this Agreement, BMC agrees to purchase the Instrument exclusively from SI (see Section 2.2). BMC shall issue purchase orders, containing specific instructions concerning quantity, delivery schedule, invoicing, etc., from time to time for the supply of Instruments. The purchase orders described in this Section 2.5 shall constitute the only authorization for SI to ship Instruments to BMC. BMC shall have the right to cancel or make changes to said purchase orders from time to time. SI agrees to use its best efforts to comply with changes. In the event a change in a purchase order causes a significant increase or decrease in SI's costs or time for performance, the parties agree to negotiate in good faith to reach an agreement on an equitable adjustment in the price and time for performance and this Agreement [ subsequent purchase order (s)] shall be supplemented in writing accordingly. BMC agrees to be responsible for all components purchased by SI in response to said purchase orders. Notwithstanding the foregoing, BMC may request and SI shall have the ability to respond to changes in existing forecast as follows: Current month +30% 30-60 days +60%
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Sources: Supply Agreement (Spectrx Inc)
Supply Services. 2.1 SI shall manufacture and sell the Instrument exclusively to BMC and Affiliates for worldwide marketing and selling and at prices established by the parties pursuant to paragraph 3.
1. Nothing in this Agreement shall prevent BMC from manufacturing or having have manufactured, marketingmarket, selling, sell or otherwise supplying supply other non- non-invasive devices on a world-wide basis.
2.2 During the term of this Agreement SI [(or a mutually approved contract manufacturer] shall be BMC's sole and exclusive source for the Instrument, provided that (a) SI provides an adequate and timely supply of the Instrument to BMC in accordance with Purchase Orders issued by BMC and accepted by SI, (b) SI maintains agrees to maintain the quality assurance level as stated in BMC's Quality Partners Manual and or as may be otherwise agreed to by the parties, in writing, and (c) SI follows the most current and pertinent Federal Food and Drug Administration guidelines, meets the requirements of ISO9001:1994, section 4.4 during development, and be in compliance with Good Manufacturing Practices as found in 21 CFR 820 prior to production, and (d) SI's employs reasonably sound cost management practices. SI warrants that it will apply all reasonable resources to its operation in order to become ISO 9000 registered and attain a certification rating [as defined in BMC's Quality Partners Manual Manual] within twenty-twenty four [24] months from of the start of producing the Instrument production for sale by BMC. SI further agrees to make available to BMC for purchase, spare parts and or replacement/replacement / repair parts for a period of not less than seven [7] years from end of market sales by BMC.
2.3 SI represents that it has or will have, prior to the date of Market Introduction at its Norcross, Georgia facility facility-- or other manufacturing facility as may be jointly approved by the parties parties-- manufacturing capacity to produce the Instrument instrument in the following minimum annual quantities: Date Units per Annum ---- --------------- DATE UNITS PER ANNUM --------------------------------------- -------------------------------------- Market Introduction Date BMC's Annual Forecast Volumes, +35+ 35% One year after Market Introduction Date BMC's Annual Forecast Volumes, +50% NOTE: The quantities stated herein are estimated and are the result of a review of the current business conditions and other information available to BMC at the time the estimate is prepared. BMC shall not be obligated to purchase any Instruments except pursuant to purchase orders as described in Section 2.5.
2.4 In order to facilitate SI's planning of production, and to assist SI in making certain decisions relative to inventory of long lead items, BMC shall submit to SI a non-binding estimate of its requirements of Instruments monthly covering a forward period of not less than twelve (12) months. Upon receipt of BMC's estimate, if SI determines that it has insufficient capacity to meet the quantities stated in the estimate, it shall notify BMC within fifteen (15) days of the date of receipt of BMC's estimate that such condition exists, and will present recommendations regarding capacity changes to meet BMCs estimate. BMC shall promptly review SI's notice and schedule a meeting with SI to review the recommendations and reach agreement on a course of action. In an effort to reduce lead time, and in accordance with production forecasts provided by BMC under this Agreement, SI agrees to establish an inventory level at its facility [financed by BMC for only the first twelve months of production by SI] of Instrument component parts which have long lead times. The inventory mix and levels will be reviewed quarterly by the parties, and the parties, by mutual agreement, may make changes to the level and the mix. The details of this activity will be negotiated by the parties and will be contained in the blanket order for the first year's supply of Instruments. Also included will be the details of SI's refunding plan employing price discounts on subsequent purchases of Instruments for said financing by BMC.
2.5 During the term of this Agreement, BMC agrees to purchase the Instrument exclusively from SI (see Section 2.2). BMC shall issue purchase orders, containing specific instructions concerning quantity, delivery schedule, invoicing, etc., from time to time for the supply of Instruments. The purchase orders described in this Section 2.5 shall constitute the only authorization for SI to ship Instruments to BMC. BMC shall have the right to cancel or make changes to said purchase orders from time to time. SI agrees to use its best efforts to comply with changes. In the event a change in a purchase order causes a significant increase or decrease in SI's costs or time for performance, the parties agree to negotiate in good faith to reach an agreement on an equitable adjustment in the price and time for performance and this Agreement [ subsequent purchase order (s)] shall be supplemented in writing accordingly. BMC agrees to be responsible for all components purchased by SI in response to said purchase orders. Notwithstanding the foregoing, BMC may request and SI shall have the ability to respond to changes in existing forecast as follows: Current month +30% 30-60 days +60+ 50%
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