You are here: Agreements > Supply Agreement > SUPPLY AGREEMENT

SITE SEARCH
AGREEMENTS / CONTRACTS
(optional)
(optional)
Try our advanced search >>
CLAUSES Search Contract Clauses >>
Browse Contract Clause Library>>

Supply Agreement

Supply Agreement

Legal Documents
You are currently viewing:

 This Supply Agreement involves

SYNERGETICS USA INC | Alcon Research, Ltd

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
 

Title: SUPPLY AGREEMENT
Governing Law: Delaware     Date: 6/14/2010
Industry: Medical Equipment and Supplies     Sector: Healthcare

join now
50 of the Top 250 law firms use our Products every day

Exhibit 10.2

**Information marked as “redacted**” has been omitted pursuant to a request for confidential treatment and has been filed with the Securities and Exchange Commission.

SUPPLY AGREEMENT

     This AGREEMENT (“Agreement”) is made effective as of                      , 2010 (“Effective Date”) by and between Synergetics USA, Inc. (“ Synergetics ”), a Delaware corporation with a business address of 3845 Corporate Centre Drive, O’Fallon, Missouri 63368, and Alcon Research, Ltd., (“ Alcon ”), a Delaware corporation with a business address of 6201 South Freeway, Fort Worth, Texas 76134. Synergetics and Alcon are referred to herein separately as a “Party” and collectively as the “Parties”.

BACKGROUND

      A.  Both Synergetics and Alcon are in the business of, among other things, manufacturing and supplying ophthalmic medical devices and related accessories, including illumination and laser probes for retinal surgery.

      B.  Synergetics and Alcon are signing a Confidential Settlement and License Agreement contemporaneous with this Agreement in which they cross-license certain patent rights (the “Confidential Settlement and License Agreement”).

      C.  Synergetics and Alcon desire that Synergetics produce for Alcon certain products for Alcon’s marketing and distribution.

      D.  THEREFORE, in consideration of the mutual promises contained below, the Parties agree as follows.

ARTICLE 1

DEFINITIONS

      1.1 “Affiliate” of a party shall mean any entity or person that directly or indirectly controls, is controlled by or is under common control with such party. For purposes of this definition, “control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract or otherwise.

      1.2 “Product” shall mean any and each of the products described in Schedule A attached hereto, which may be revised from time to time by agreement of the Parties.

      1.3 “Governmental Registration” shall mean the filing of product documentation including, but not limited to, labeling and Product Certifications with national governmental bodies, health

1


 

authorities, or the like in order to obtain an approval or license to distribute a Product within a specific country. It is assumed that filing a Governmental Registration requires that all relevant Product Certifications have been obtained.

      1.4 “Know-How” shall mean the know-how relating to the development or manufacture of any Product, including, without limitation, processes, techniques, methods, products, apparatuses, and other materials and compositions which are reasonably related thereto.

      1.5 “Manufacturing Costs” shall mean the direct labor, direct overhead and Raw Materials costs incurred in the manufacture of Products.

      1.6 “Synergetics Patent” shall mean any and each of the patents set forth on Schedule B , along with any foreign counterparts thereof.

      1.7 “Product Certification” shall mean the demonstration of performance characteristics and design and quality processes showing conformance with internationally recognized product safety and conformance standards and the associated documentation (test reports, product specifications, etc.) in order to achieve certification of standards compliance. Auditing and testing activities generally are required to be conducted by a third party certifying organization authorized or otherwise recognized as able to certify compliance.

      1.8 “Raw Materials” shall mean the materials, components, and packaging required to manufacture and to package any Product in accordance with the Specifications.

      1.9 [Redacted ** ]

      1.10 “Specifications” shall mean the specifications for the design, composition, product safety assurance, packaging, and/or quality control, including product acceptance testing protocols, of any Products as the same may hereafter be modified by mutual agreement of the Parties in writing. Schedule C attached hereto and incorporated herein includes preliminary Specifications for the Products. Schedule C shall be modified from time to time by agreement of the Parties as required to account for changes in the Specifications and Products, and complete Specifications will be set in accordance with Section 2.2(c) herein.

      1.11 “Term” shall have the meaning set forth in Section 11.1 herein.

 

**

 

This information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

2


 

      1.12 “Expansion Payment” shall mean a payment from Alcon to Synergetics to be used by Synergetics for capacity expansion to meet the supply obligations under this Agreement.

      1.13 “Process Engineering Payment” shall mean a payment from Alcon to Synergetics to be used to improve product design, product performance and reduce manufacturing costs.

ARTICLE 2

ARRANGEMENT AND SCOPE

      2.1 Arrangement. Synergetics shall manufacture, sell and deliver Product to Alcon. Alcon may at times supply parts or components to Synergetics, [redacted ** ] , for incorporation into the Product. Synergetics shall not manufacture or sell Product containing any part or component supplied to Synergetics by Alcon, [redacted ** ] , to any party other than Alcon.

      2.2 Purchase/Supply of Requirements .

      (a)  Alcon and its Affiliates shall purchase all of their requirements of the Products solely from Synergetics during the term of the Agreement. Alcon is not obligated to make any minimum purchases under this Agreement.

      (b)  Synergetics shall supply Product to Alcon as required by Alcon (and its Affiliates), subject to the qualifications set forth herein. Each such Product shall be manufactured by Synergetics or its suppliers in accordance with the Specifications.

      (c)  The Parties acknowledge that, as of the Effective Date, a complete Specification for any Product has not been defined. After the Effective Date, the Parties will work diligently and in good faith to define Specifications acceptable to Synergetics and approved by Alcon for [redacted ** ] , the designs for which will be based substantially on Synergetics’ products [redacted ** ] . The Parties’ expectation is that these Specifications will be set within [redacted ** ] of the Effective Date, and manufacturing validations will be complete, and such Product will be ready to be delivered [redacted ** ] of the Effective Date.

      (d)  With regard to [redacted ** ] that are capable of [redacted ** ] and would compete directly with the Products, but which are not within at least one valid claim of the Synergetics Patents [redacted ** ] , Alcon shall, if it so desires and in its sole discretion, manufacture itself or purchase from Synergetics, all of its requirements for such [redacted ** ] for a period of five (5) years from the Effective Date. After the expiration of that five (5) year period, and until the expiration of this Agreement, before accepting an offer

 

**

 

This information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

3


 

from a third party to supply a non-Product [redacted ** ] , Alcon shall, to the extent permitted by law and to the extent permitted by any applicable agreement to which Alcon is a party, (i) provide to Synergetics all information about the third party [redacted ** ] that would reasonably be required to determine the cost to Synergetics to develop and manufacture, and to develop and manufacture, [redacted ** ] (“Development & Manufacturing Information”), and (ii) for a period of up to one hundred eighty (180) days from the date such Development & Manufacturing Information is transmitted to Synergetics, afford Synergetics a right of first refusal and permit Synergetics to submit its own proposal to manufacture [redacted ** ] for Alcon, with such proposal including all such reasonable details as necessary to estimate development feasibility and costs, development and manufacturing implementation time, and proforma manufacturing costs. If Alcon is unable to provide all information reasonably required to determine the cost to Synergetics to develop and manufacture, and to develop and manufacture such non-Product [redacted ** ] (as may be due to a limitation on Alcon under the law or under an applicable agreement, and such limitation cannot be overcome by Synergetics’ willingness to enter a reasonable confidentiality agreement with respect to such information), then it shall be deemed that Alcon has not fulfilled its obligation to provide Synergetics the right of first refusal described above, and until such time as that deficiency has been cured, Alcon shall not be permitted to enter a supply arrangement with such third party. Nothing in this Agreement shall restrict the right of Alcon to internally develop and/or manufacture, and then sell, any products, including without limitation any non-Product [redacted ** ] that are outside the scope of the Synergetics Patents, regardless of whether those products include components acquired from third parties.

      (e)  Alcon, in its sole discretion, may at any time during the Term make a proposal that Synergetics supply to Alcon hereunder any [redacted ** ] , and Synergetics shall respond to such proposal with a “no bid” or an offer to supply [redacted ** ] to Alcon upon terms acceptable to Synergetics. Thereafter the parties may, but shall not be required to, negotiate to include [redacted ** ] within this Agreement.

ARTICLE 3

TERMS OF COMMERCIAL SALE

      3.1 Prices.

      (a)  The price (the “Price”) for each Product is as set forth on Schedule A attached hereto. The Prices set forth in Schedule A shall include all costs of manufacturing (but not including the cost of any components supplied by Alcon for incorporation in Product during the manufacturing process) labeling,

 

**

 

This information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

4


 

and packaging in accordance with the Specifications, [redacted ** ] . Alcon will specify all labeling and packaging materials and the package configuration, provided that the packaging configuration is compatible with Synergetics’ packaging equipment and know-how. The Prices set forth on Schedule A shall remain effective for two years after Alcon receives the first shipment of the Product. At that point, and for every two (2) year period thereafter, if Synergetics seeks to increase the Prices, it must provide reasonably detailed written information using generally accepted accounting principles as used in accounting for costs of manufacturing the Products and the related gross profit margin, justifying the proposed price increase to Alcon no less than ninety (90) days before expiration of the applicable two year period Following discussion between the parties of the price increase details, and following good faith negotiations, if the Parties are unable to agree on the proposed price increase, then the matter will be pursued under the provisions of Section 12.1. Any mutually agreed price increase applicable to Products for such two (2) year period shall not exceed the lesser of (A) an amount mutually agreed upon by the Parties, (B) [redacted ** ] or (C) [redacted ** ] .

      (b)  Alcon will make a Process Engineering Payment to Synergetics within two (2) weeks of the Effective Date of this Agreement in the amount of one million U.S. dollars ($1,000,000.00). This is the only required Process Engineering Payment during the term of the Agreement. The Process Engineering Payment is anticipated to allow Synergetics to make changes to Synergetics’ production processes to facilitate the supply of Products to Alcon. Such production process changes may be implemented by Synergetics throughout the Term. Future process engineering changes and funding sources (if any) are subject to the mutual agreement of the Parties.

      (c)  Alcon will make an Expansion Payment to Synergetics within two (2) weeks of the Effective Date of this Agreement in the amount of one million U.S. dollars ($1,000,000.00). This is the only required Expansion Payment during the Term of the Agreement. The Expansion Payment is anticipated to allow Synergetics to expand its production capability to facilitate the supply of Products to Alcon. Such expansion may be implemented by Synergetics throughout the Term. Future expansion requirements and funding sources (if any) are subject to the mutual agreement of the Parties.

      3.2 Orders .

      (a)  On a monthly rolling basis Alcon shall provide to Synergetics firm purchase orders covering a three month period and specifying the delivery dates, and Synergetics shall use its good faith efforts to meet those delivery dates. Lead time for delivery after placement of a firm purchase order should

 

**

 

This information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

5


 

be at least ninety (90) days, unless otherwise agreed to by Synergetics. Alcon may reschedule open Purchase Order quantities, delivery dates and destinations with thirty (30) days written notice. Rescheduled quantities of Alcon’s firm purchase order for each month may not be more than +/- 25% unless mutually agreed upon by both parties. To the extent there is any conflict or inconsistency between this Agreement and any purchase order, purchase order release, confirmation, acceptance or any similar document, the terms of this Agreement shall govern. Notwithstanding Section 2.2 hereof, Synergetics shall be contractually obligated to supply the unit volume ordered by Alcon only up to 100% of the quantity forecasted pursuant to Section 5.1 for the period from the beginning of such forecast to the last delivery date for any open order (the “Committed Amount”). Synergetics shall use commercially reasonable efforts to meet any orders in excess of the Committed Amount or with requested delivery times less than the applicable Minimum Lead Time.

      (b)  Alcon shall provide Synergetics, at no cost, [redacted ** ] for the Products. At a minimum, Alcon will provide quantities equal to the corresponding Purchase Order quantity. Alcon shall ship [redacted ** ] to Synergetics, at Alcon cost, for delivery within one (1) week after placement of the Purchase Order. The risk of loss shall remain with Alcon until [redacted ** ] are delivered to Synergetics. [Redacted ** ] will remain Alcon property, and shall be subject to inventory cycle counting and/or an annual physical inventory audit. Alcon reserves the right to request the return of [redacted ** ] to Alcon at any time, provided that [redacted ** ] that have begun assembly into Product shall only be returned upon purchase of the Product by Alcon.

      3.3 Delivery . All shipments must be accompanied by a packing slip that describes the articles, states the purchase order number and shows the shipment’s destination. Synergetics agrees to promptly forward the original bill of lading or other shipping receipt for each shipment in accordance with Alcon’s instructions.

      3.4 Payment . Synergetics further agrees to promptly render correct and complete invoices to Alcon and to accept payment by check or electronic transfer of funds. All invoices submitted by Synergetics shall be payable upon receipt and due net within thirty (30) days after receipt of such invoices. The date of invoice with respect to any Product shall not be earlier than the date of shipment of such Product.

      3.5 Shipment . All deliveries of the Products by Synergetics to Alcon hereunder shall be shipped FOB Origin. Title to and risk of loss for any such product shall pass from Synergetics to Alcon or

 

**

 

This information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

6


 

its designee when it is delivered to the carrier at Synergetics’ manufacturing or warehousing facility. Unless otherwise directed by Alcon in writing, Synergetics shall select the carrier, and insure the shipment, the costs of which shall be charged to Alcon. Synergetics will package all Products in accordance with the packaging requirements included in the Specifications, including as specified, sterile, single-use packaging.

      3.6 Acceptance . Alcon shall have no obligation to pay for any Product that is subject to a claim of non-compliance with the Specifications; provided that any such claim of non-compliance is based upon product acceptance testing performed by Alcon in accordance with the test protocols set forth in the Specifications; and provided further that Alcon shall pay for Product within thirty (30) days of receipt of the invoice therefor, unless such Product has been rejected within thirty (30) days of delivery. No inspection or testing of Product by Alcon or any third-party agent of Alcon shall constitute acceptance by Alcon thereof, nor shall any such inspection or testing be in lieu or substitution of any obligation of Synergetics for testing, inspection and quality control as provided in the Specifications or under applicable local, state, or federal laws, rules, regulations, standards, codes or statutes. Synergetics shall replace at its own cost and expense, including reimbursement of freight costs incurred by Alcon, Product that fails to comply with the Specifications or other warranties made in Article 6 hereof, which replacement shall constitute Alcon’s sole and exclusive remedy therefore (but in no way limiting Synergetics’ indemnity obligations under Article 7 and confidentiality obligations under Article 9). The acceptance (or non-rejection) of any Product shall in no way limit Alcon’s rights under Synergetics’ product warranty or for indemnification hereunder.

      3.7 Return of Non-compliant Product . Alcon shall notify Synergetics of the existence and nature of any non-compliance with the Specifications that comes to its attention and shall return such non-compliant Product to Synergetics within fifteen (15) days after it is rejected by Alcon. Before returning such non-compliant Product, Alcon shall comply with all reasonable requirements of Synergetics’ returned goods policy, attached as Schedule E, including by obtaining a Returned Goods Authorization (“RGA”) number and marking the returned goods therewith, as appropriate under such policy. Synergetics shall have a reasonable opportunity, not to exceed fifteen (15) days from receipt of such returned Product, to inspect such non-compliant product and provide Alcon an explanation of the non-compliance and proposed course of action (i.e., repair (including the nature of the repair) or replacement of the Product).

      3.8 Independent Testing. If, after Synergetics’ inspections of any Product, the Parties disagree as to whether such Product conforms to the Specifications, either party may deliver the item to an independent third-party laboratory, mutually and reasonably acceptable to both Parties, for analytical testing to confirm such item’s conformance to the Specifications. All costs associated with such third-

7


 

party testing shall be at Alcon’s expense unless the tested item is deemed by such third-party to be not in compliance with the Specifications, in which case all such costs, including reimbursement of freight and disposition costs, shall be promptly paid by Synergetics.

ARTICLE 4

ADDITIONAL PRODUCT RESPONSIBILITIES

      4.1 Labeling and Marking .

      (a)  Alcon shall be responsible for the text and regulatory compliance of all package labels, labeling and Product inserts used in connection with the Products. For purposes of this Agreement the terms “label” and “labeling” shall have the meanings set forth in Sections 201(k) and 201(m) respectively of the U.S. Federal Food, Drug and Cosmetics Act.

      (b)  Alcon shall be responsible for the development and approval of the content of the label and the instructions for use. Synergetics shall provide Alcon with the English version of the label for Synergetics’ [redacted ** ] which will be the design basis for the Product. Alcon shall be responsible for copy format, artwork preparation, and translations

      (c)  Alcon will specify all labeling and packaging materials and the package configuration, provided that the packaging configuration is compatible with Synergetics’ packaging equipment and know-how.

      (d)  Synergetics shall have the right to apply reasonable patent marking on the Products indicating the Synergetics Patents covering the Products, as well as reasonable marking indicating manufacture by Synergetics (i.e., manufactured by Synergetics for Alcon Laboratories, Inc.).

      4.2 Provision of Information by Synergetics . Synergetics shall, at the reasonable request of Alcon, provide Alcon with the following information relating to the Products, and, to the extent reasonably available to Synergetics, at no cost to Alcon:

      (a)  all relevant information on product safety, efficacy, reliability and performance characteristics; and

      (b)  copies of all U.S. and foreign regulatory submissions and approvals, including any 510(k) submissions, held by a Party for the Products.

 

**

 

This information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

8


 

      4.3 Changes .

      (a)  In no event shall any significant change in form, fit or function, safety, efficacy or reliability, or the appearance of an Product be made without the prior written approval of Alcon. If the Parties agree on any such change, they shall modify the Specifications to reflect the same, and shall record such change in the Parties’ respective engineering change order systems, as appropriate. As used in this Section 4.3, the term “significant change” shall mean any change that (i) results in a material change to the Specifications, labeling or packaging; (ii) affects a Product’s performance, physical appearance or configuration, or sterilization processes, (iii) affects product safety, reliability or integrity; (iv) requires a submission to or approval from a governmental body; or (v) is a change in the indications for use or a material change in the instructions for use. In the event of any significant change, Alcon shall have the responsibility to establish an appropriate and reasonable qualification protocol, if required by Alcon, and Alcon and Synergetics shall determine an appropriate inventory level for the pre-change Product in order to cover on-going requirements during the qualification process.

      (b)  At any time and from time to time during the Term, Alcon may request that Synergetics change the Specifications and/or the Products, if and to the extent that any such change is reasonably required to make the affected Product(s) meet applicable safety standards, governmental statutes, rules, orders or regulations or necessary electronic certification requirements. Synergetics shall use commercially reasonable efforts to effect any such changes in a reasonably prompt manner.

      (c)  The Parties will negotiate in good faith to determine the change in the purchase price, if any, or delivery schedule that may be required by any change to any Specifications of any Product under this Section 4.3.

      4.4 Regulatory Compliance .

      (a)  Product Certifications . Synergetics will obtain the necessary Product Certifications that will benefit and will be made available to Alcon in order to permit Alcon to file Governmental Registrations for the Products. Synergetics shall apply for such Product Certifications at Synergetics’ expense including any required updates due to any applicable change in worldwide product safety and compliance standards.

      (b)  Governmental Registrations . Alcon shall apply, in its name and at its cost, for all Governmental Registrations required for Alcon to market Products, except that Synergetics will obtain necessary Governmental Registrations for the United States. Synergetics shall reasonably cooperate with Alcon in its efforts to obtain such Governmental Registrations. Synergetics agrees that Alcon shall have

9


 

access to all of Synergetics’ non-confidential regulatory submissions and Product Registrations for the Products [redacted ** ] to the extent necessary to exercise its rights or fulfill its obligations hereunder. Likewise, Alcon agrees that Synergetics shall have access to all of Alcon’s non-confidential regulatory submissions for the Products to the extent necessary to effect registration in the United States.

      4.5 Corrective Action.

      (a)  In the event any governmental agency having jurisdiction shall request or order, or if Alcon shall reasonably determine to undertake, any corrective action with respect to any Product, including any recall, corrective action or market action, and the cause or basis of such recall or action is reasonably attributable to a breach by Synergetics of any of its warranties, guarantees, representations, obligations or covenants relating to that Product, then Synergetics shall actively cooperate with Alcon in executing such corrective action relating to Product quality and performance, and, Synergetics shall reimburse Alcon for the reasonable out of pocket costs of such action, including the cost of replacing any Product which is so recalled, whether or not any such specific unit of Product shall be established to be in breach of any warranty by Synergetics hereunder; provided, however, that any such amount to be reimbursed to Alcon shall be proportionately reduced by an appropriate amount based on the degree to which such corrective action may also be reasonably attributable to a breach by Alcon of any of its obligations or covenants hereunder or its negligence or willful misconduct.

      (b)  Before undertaking a voluntary corrective action with regard to the Products, Alcon shall provide, to the extent reasonably practicable under the circumstances, reasonable advance notice to Synergetics of the proposed corrective action and shall discuss in good faith with Synergetics its rationale for such proposed corrective action. The Party responsible for the issue causing the voluntary correction action shall be responsible for all costs and expenses associated with the voluntary corrective action. If the responsible business people cannot resolve the issues related to the voluntary corrective action, including the allocation of responsibility and which party will bear the costs and expenses, then the unresolved issues will be determined pursuant to the dispute resolution procedure outlined in Section 12.1. In the event a mediator is selected pursuant to Section 12.1, the Parties agree that the mediator shall make a binding decision on which party will be responsible for the costs and expenses associated with the voluntary corrective action.

      4.6 Medical Device Reports . The Parties agree to cooperate in good faith with respect to responding to or making any Medical Device Reports (“MDR’s”) pertaining to the Products. Synergetics

 

**

 

This information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

10


 

and Alcon shall actively cooperate in investigating the circumstances underlying the MDR and in responding to FDA or other governmental agency inquiries. Synergetics shall file any necessary manufacturer MDR’s for all complaints that are found to meet the definition of MDR reportable events (as defined in 21 CFR, Part 803).

      4.7 Notice of Audit or Inquire. Each party agrees to promptly notify the other of any FDA audit, or any audit by any other regulatory body, of its facilities used for the manufacture, storage or distribution of Products, or any request for information from the FDA, or other regulatory body, related to the manufacture of Products, as soon as practicable after it received notice of such audit or request.

ARTICLE 5

ADDITIONAL OBLIGATIONS

      5.1 Forecasts. Attached hereto as Schedule D is Alcon’s initial estimated purchases of the Products from Synergetics in the form of a written, non-binding, rolling twelve (12) month forecast (the “Forecast”). After the date hereof, the Forecast shall be updated and revised by Alcon not less frequently than on a quarterly basis, which update shall extend the Forecast forward twelve (12) months therefrom. Although the Forecast is non-binding, Alcon understands that Synergetics shall use the Forecast for planning purposes (including Raw Material acquisitions and investment in equipment and other resources) in order to make available the production capacity required to manufacture and supply the forecasted amounts of the Products within the time frames specified therein and herein.

      5.2 Meetings . In the spirit of cooperation with which this Agreement is entered, the Parties shall use good faith efforts to meet not less frequently than quarterly during the initial twelve (12) months after the Effective Date, then bi-annually thereafter to discuss issues that may arise from time to time in connection with each Party’s performance of this Agreement. Such meeting should occur at a mutually acceptable location and time and should include the Alcon and Synergetics individuals responsible for managing supply under this Agreement and may include senior management from both Alcon and Synergetics.

      5.3 Insurance. Synergetics agrees to procure and maintain in full force and effect during the Term valid and collectible insurance policies in connection with its activities as contemplated hereby, which policies shall provide Commercial General Liability coverage including Products and Contractual Liability coverage in an amount not less than $5 million per occurrence. Such policy shall name Alcon as an additional insured. Upon Alcon’s request, Synergetics shall provide to Alcon a certificate of coverage or other written evidence reasonably satisfactory to Alcon of such insurance coverage. Such insurance policy shall provide that in the event such insurance coverage should be materially adversely changed or

11


 

terminated for any reason, the insurer thereunder will give Synergetics and Alcon ten (10) days’ prior notice. The existence of such coverage shall in no way limit Synergetics’ liability or obligations hereunder. Alcon represents and warrants that it has access to insurance and other financial resources adequate to meet any financial obligation reasonably foreseeable under this Agreement.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES

      6.1 Product Warranty .

      (a)  Synergetics warrants to Alcon that the Products will meet the Specifications in all material respects and will be free from material defects in its materials, workmanship and design, PROVIDED THAT:

(i) Synergetics or an authorized Synergetics representative is notified within ten (10) business days of the warranty claim, and as soon as notice of an alleged defect is received by Alcon or the alleged defect appears, the Product shall be taken out of service or otherwise separated from inventory without known defect;

(ii) The Product has not been subject to (1) neglect, misuse or operation contrary to the instructions for use provided with the Product or (2) improper storage or handling contrary to the storage and handling instructions provided with the Product where either or both of those activities would materially adversely affect the initial quality of the Product; and

(iii) No repairs have been attempted or parts replaced by anyone not authorized by Synergetics to perform such repair, and the Product serial number, date stamp or other identification marks have not been removed or defaced.

      (b)  Synergetics’ liability under the warranty under Section 6.1(a) above is limited to the (i) supply of replacement parts or replacement Product (including shipping costs) or (ii) labor and parts repair at an authorized Synergetics facility (including shipping costs from Alcon to Synergetics’ facility and back) up to a value not exceeding the original Synergetics’ invoice price of the Product.

      (c)  The duration of the warranty under Section 6.1(a) above shall be [redacted ** ] from the date the Product is shipped to the end-user, but in no event more than [redacted ** ] after shipment of the Product by Synergetics to Alcon.

 

**

 

This information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

12


 

      (d)  The warranty under Section 6.1(a) above does not include:

(i) Packaging, freight or insurance for return shipments from the end-user customer to Alcon; or

(ii) Any Product not originally supplied by Synergetics; or

(iii) Any Product component supplied by Alcon, including, for example, [redacted ** ]

      (e)  Synergetics represents


continue to document