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Exhibit 10.26
VENDOR AGREEMENT MEMORANDUM
This Vendor Agreement Memorandum (the "Agreement") is executed and delivered
as of the 2nd day of February, 1998 by and between IMPLANT SCIENCES CORPORATION,
("IMPLANT"), with offices in Wakefield, Massachusetts and OSTEONICS
("OSTEONICS"), a subsidiary of Stryker Corporation, with offices in Allendale,
New Jersey and forms a part of those certain Purchase Order No.'s 121784 (Knees)
dated February 2nd, 1998 and 126825 (Caps) dated February 2nd, 1998 issued by
Osteonics to Implant.
1. TERM: February 1st, 1998 to December 31st, 1998 (the "Term").
2. KNEES Monthly Minimum Osteonics agrees to send and Implant agrees
to process no less than [Redacted Text]
Standard Knee Batches per month.
Prices Based upon the total volume of Standard Knee
Batches received by Implant during each
month the following Price Levels will be
applied to all batches received during that
month:
MONTHLY VOLUME BATCH PRICE
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LEVEL 1-Less than [Redacted Text] batches per mo. [Redacted Text]
LEVEL [Redacted Text] to [Redacted Text] batches per mo. [Redacted Text]
LEVEL [Redacted Text] batches and higher [Redacted Text]
3. CAPS: Monthly Minimum: Osteonics agrees to send and Implant
agrees to process no less than [Redacted Text]
Standard Cap Batches per month.
Prices Based upon the total volume of Standard Cap
Batches received by Implant during each month
the following Price Levels will be applied
to all batches received during that month;
MONTHLY VOLUME BATCH PRICE
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LEVEL 1-Less than [Redacted Text] batches per mo. [Redacted Text] per batch
LEVEL [Redacted Text] to [Redacted Text] batches per mo. [Redacted Text] per batch
LEVEL [Redacted Text] batches and higher [Redacted Text] per batch
4. DEFINITION: All references to batches herein are to a Standard Batch which
is 100% full.
Knee batches only exist as [Redacted text]%, [Redacted text]%,
and [Redacted text]%. For purposes of monthly volume
determination, batches will be 1.0, 0.8 or 0.6 for [Redacted
text]%, [Redacted text]%, and [Redacted text]% respectively.
All Prices quoted in 2. above are based on 100% Batches.
[Redacted text]% Batches will be priced at [Redacted text]% of
the Standard Batch price; [Redacted text]% batches at
[Redacted text]% of the Standard Price.
All shipping and handling charges are to be paid by Osteonics.
5. XXXX REGULAR BILLING: Osteonics will continue to be billed upon
shipment from Implant with invoices based on Level 2 pricing
for both Knees and Caps.
MONTHLY ADJUSTMENT: Should the volume of batches received and
shipped by Implant during each month exceed or fall below the
above cited Level 2 volume requirements then the final
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invoice for each month will include an adjusting item that (i)
credits Osteonics if shipments from Osteonics received by
Implant during said month exceed Level 2 volume requirements
for Knees and/or Caps or (ii) a charge to Osteonics if
shipments from Osteonics fall below Level 2 volume
requirements for Knees and/or Caps.
The amount of credit or charge will equal the difference
between the amount invoiced to date to Osteonics for that
month and the amount that would have been invoiced by applying
the appropriate Price Level for that month. Attached as
Exhibit A is the form of the monthly reconciliation
calculation.
6. MINIMUMS No later than January 15th, 1999 Osteonics and implant will
each Calculate the average monthly batches processed by
Implant over the Term for each of Knees and Caps (where the
average in each case equals the number of Knees or Cap batches
processed by Implant over the Term divided by 11 months) and
(i) In THE CASE OF KNEES; IF the average monthly batches
sent to Implant is:
(a) LESS than [Redacted text] batches per month
then Osteonics will pay Implant an amount equal
to the difference between the actual number
of batches sent over the Term and
[Redacted text] times $[Redacted text],
(ii) In THE CASE OF CAPS; If the average monthly batches sent
to Implant is:
(b) LESS than [Redacted text] batches per month
then Osteonics will pay Implant an amount equal
to the difference between the actual number
of batches sent over the Term and [Redacted
text] times $[Redacted text].
All payments will be settled by check or other acceptable
funds within 30 days of the end of the Term unless Implant
agrees to apply the credit to future batches by increasing the
price per batch processed upon extension or renewal of this
agreement.
7. RENEWALS: No less than sixty (60) days prior to the end of the Term,
both parties agree to negotiate in good faith on an extension
or renewal of this Agreement on terms to be negotiated.
8. CONFIDENTIALITY:
Osteonics agrees to hold in full confidence both the existence
and terms of this Agreement.
9. OTHER: Both parties understand and expect but do not guarantee that
the volume of business expressed in batches or total revenues
will increase each year as compared to the prior year.
AGREED AND ACCEPTED:
FOR: OSTEONICS: FEMORAL CELL FOR: IMPLANT SCIENCES CORPORATION
By: /s/ Xxxxxxx Xxxxxx Date: 2/5/98 By: /s/ Xxxxxxx X. Xxxxxx Date: 2/2/98
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Name: Xxxxxxx Xxxxxx Name: Xxxxxxx Xxxxxx
Femoral Cell Leader President
FOR: OSTEONICS CAP CELL
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By: /s/ Xxxx Xxxxxxxxx Date: 2/5/98
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Name: Xxxx Xxxxxxxxx
Cap Cell Leader
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EXHIBIT A
OSTEONICS CORPORATION
MONTHLY PRODUCTION
RECONCILIATION
[Redacted Text]
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IMPLANT SCIENCES CORPORATION
TERMS AND CONDITIONS
As used herein, the term "Buyer" refers to "Osteonics, Inc.," a division of
Stryker Corporation. The term "Seller" refers to the named seller
(Vendor/Supplier) providing goods or services pursuant to the Purchase Order
(hereinafter "Order").
SELLER'S ACCEPTANCE
The Seller's acknowledgment of this Order or commencement of work pursuant to
this Order, whichever occurs first, shall be deemed an acceptance of this Order.
Such acceptance is subject to the express terms and conditions herein. Any terms
and conditions proposed by Seller in its acceptance that are different or
additional to those herein are hereby objected to and rejected by Buyer. Any
terms or conditions proposed by Seller different or additional to those set
forth in this Order relating to the description, quantity, price or delivery
schedule for the goods or services shall void this Order. Any terms or
conditions proposed by Seller different or additional to those set forth in the
Order, other than those enumerated above, shall constitute material alteration,
and this Order will be deemed accepted by Seller without such different or
additional terms of conditions.
CHANGES
No changes shall be binding upon Buyer unless in writing and signed by Buyer's
authorized agent. Buyer reserves the right at any time to make changes in
drawings, specifications, place and time of delivery. If such changes result in
a decrease or increase in the Seller's cost or in the time for performance, any
adjustment will be agreed to by both parties in writing.
PROPRIETARY INFORMATION -- CONFIDENTIALITY
Seller shall keep in confidence, and not disclose to any other person or entity,
any drawings, specifications, data, and other information supplied by Buyer in
connection with this Order. Seller will not advertise or publish the fact that
Buyer has contracted to purchase goods or services from Seller without express
written consent from Buyer.
DELIVERY
TIME IS OF THE ESSENCE. Delays in delivery shall be reported immediately to
Buyer. Buyer is not obligated to accept early, late, partial or excess
deliveries. Buyer reserves the right, without liability, in addition to its
other rights and remedies, to terminate this Order in part or whole with respect
to goods not yet shipped or services not yet rendered by the delivery date and
to purchase substitute goods or services elsewhere and charge Seller for any
loss incurred.
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PRICE WARRANTY
This Order may not be filled at a higher price than that shown on this Order --
DO NOT SHIP. Seller must contact Buyer to obtain written authorization for any
increase in price.
If no price is stated in this Order, the goods or services will be billed at the
last price paid by the Buyer or the prevailing market price, whichever is lower.
Seller warrants that the prices for the goods or services under this Order are
the lowest available prices extended to any other customer for substantially
similar items in equal or less quantities.
SELLER'S WARRANTY
Seller expressly warrants that all goods and services furnished under this Order
shall:
a. Conform to all drawings, specifications, samples, or other
descriptions upon which this Order is based;
b. Be mercandiazable and appropriate for the purpose(s) that they
are normally used;
c. Be fit for the purpose(s) intended if Seller should reasonably
know what such purpose(s) are;
d. Be free of defects and of good material and workmanship; and
e. Be free of any third party claims.
This warranty shall survive delivery and shall not be deemed waived either by
inspection, test, acceptance, use nor payment and shall run in Buyer and its
customers. Seller agrees to replace or correct any non-conforming goods or
services promptly without cost to Buyer, when so notified by Buyer or its
customer. If Seller fails to correct or replace the non-conforming goods or
services promptly, Buyer after reasonable notice to Seller, may correct or
replace the non-conforming goods or services and charge Seller for all cost
incurred. Seller may not negate, exclude, limit or otherwise modify this
warranty.
BUYER'S PROPERTY
All raw material, tools, dies, jigs, fixtures, etc. drawings, patterns, and
specifications furnished or paid for by Buyer in connection with this Order,
shall be and remain the property of Buyer and shall be held by the Seller unless
directed otherwise. The Seller agrees to maintain and insure Buyer's property
adequately and to indemnify Buyer for any damage or loss sustained to such
property while in Seller's possession or control.
All raw material supplied to Seller by Buyer will be segregated by Seller from
all other materials. Seller is accountable to Buyer for such raw materials used
and all scrap must be returned to Buyer.
INSPECTION/TESTING
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Buyer's payment for goods or services tendered by Seller against this Order
shall not constitute acceptance thereof. Buyer shall have the right to inspect
and test all goods during and after the period of manufacture, at any place the
goods may be located. If the goods are judged to be defective or non-conforming
by Buyer, they may be returned to Seller for refund or replacement at Seller's
expense. In addition to all other rights, Buyer may have hereunder, Buyer may
charge Seller all expenses incurred in unpacking, inspection, repacking and
reshipping of such goods. In the event the defect(s) or non-conformity is not
apparent on initial inspection but results in later product deterioration, Buyer
reserves the right to require Seller to replace the goods, as well as to pay
Buyer all damages, including consequential damages, it has incurred.
Notwithstanding anything in these Terms and Conditions to the contrary. Seller
shall be obligated to test and inspect the goos to insure that quality standards
are met and that Seller's warranty to Buyer is fulfilled.
TERMINATION BY BUYER
Buyer may give written notice to Seller to terminate this Order, in
whole or in part, at any time, either for Buyer's convenience or because of the
failure of Seller to fulfill its contractual obligations. The date of mailing of
any such notice in a United States Post Office box, with the postage thereon
prepaid, shall be considered as the date of termination. At this time, Seller
will immediately cease all further work and make every reasonable effort to
secure cancellation of all existing orders or contracts for material connected
with the performance of this Order. If the termination is for Buyer's
inconvenience, an equitable (pro rata) adjustment in compensation will be made
where actual costs have been incurred, but no amount shall be allowed for
anticipated profits or unperformed services. If the termination is due to the
failure of Seller to fulfill its contractual obligations, Buyer will not be
liable to Seller for any amount, but Seller will be liable to Buyer for any and
all damages incurred due to the breach which gave rise to the termination.
INDEPENDENT CONTRACTOR
The parties expressly understand and agree that Seller is acting as an
independent contractor unrelated to Buyer. Nothing in this Order is intended to
create a relationship express or implied of employer-employee or principal-agent
between Buyer and Seller. Seller shall not incur any expenses or obligations nor
make any representations or warranties to third parties binding upon or in the
name of Buyer. Seller shall indemnify, hold harmless, and defend Buyer from any
and all claims, damages, liabilities, Liens, and expenses which may be incurred
relating to the performance of the work covered herein. Seller shall maintain
all necessary insurance coverage, including such liability and xxxxxxx'x
compensation insurance. Seller agrees to submit to Buyer the appropriate
certificates of insurance upon Buyer's request.
INDEMNIFICATION
Seller assumes the risk of all injuries, including death resulting therefrom, to
all persons, including Seller, its subcontractors, agents, employees, servants
or any member of the public, and damage in and destruction of property by
whomsoever owned, including loss of use thereof and any direct, indirect or
consequential damages, resulting directly or indirectly, in whole or in part
from the prosecution or omission of any work or obligations undertaken or
required by this Order unless
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caused solely by the negligent act or omission of Buyer, its employees,
servants, agents representatives, and to indemnify and save harmless Buyer and
its agents, servants, and employees, from and against any and all liability
arising therefrom, including all expenses legal or otherwise incurred by them in
the investigation, defense, and settlement of any claim or suit.
PATENTS/PATENT INDEMNIFICATIONS
Unless this Order is for goods manufactured to specifications furnished by
Buyer, Seller agrees that upon receiving notice from Buyer or its customers, to
defend promptly Buyer and its customers from any claim or infringement of any
patent by reason of the manufacture, use, or sale of goods or services furnished
under this Order. Seller further agrees to pay any and all expenses, losses,
royalties, profits, and damages, including court costs and reasonable attorney's
fees associated with such procedures, as well as to satisfy in their entirety
any settlements or judgments entered therein. Buyer may, if it so desires, be
represented by and actively participate through its own counsel in any suit, the
costs of such representation to be paid by Seller.
LIMITATION OF BUYER'S LIABILITY
Buyer's liability to Seller shall not exceed the price agreed to by the parties
for the goods or services that are the subject of this Order. Any action
relating to or arising from any alleged breach by Buyers as to the subject goods
or services must be commenced within one year after the cause of action has
accrued or be forever barred.
WAIVER/ESTOPPEL
Buyer's failure or delay to insist on Seller's performance of any term or
condition herein and/or Buyer's failure or delay to exercise any right or
privilege granted to it hereunder shall not estop nor constitute a waiver by
Buyer of its rights and privileges to exercise the same or to require Seller's
performance offered excuse Seller's performance of any and all other terms and
conditions herein.
ASSIGNMENTS/SUBCONTRACTORS
This Order in whole or in part may not be assigned or subcontracted by Seller
without prior written approval of the Buyer.
EQUAL EMPLOYMENT OPPORTUNITY
All Equal Employment Opportunity requirements established by law and regulations
are incorporated herein by specified reference and Seller agrees to abide by
these requirements, where applicable.
APPLICABLE LAW AND FORUM
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Buyer and Seller agree that this Order shall be governed by, interpreted and
enforced in accordance with the laws of the State of New Jersey. Buyer and
Seller agree that the Superior Court of the State of New Jersey shall have
exclusive jurisdiction to hear and determine any disputes pertaining directly or
indirectly to this Order or to any matter arising hereunder or related hereto
and expressly waive any and all right to institute or maintain any claim or
action in any other Court or jurisdiction.
ENTIRE AGREEMENT
This Order and any documents referred to herein constitute the entire agreement
between Buyer and Seller.
