POLARITYTE MD, INC. AND SUBSIDIARIES (COLLECTIVELY, “POLARITYTE”) PURCHASE AGREEMENT (“AGREEMENT”) TERMS AND CONDITIONS
Customer agrees to purchase and accept PolarityTE Products in accordance with these terms and conditions. PolarityTE objects to and rejects any and all terms proposed by Customer, whether contained in Customer’s purchase order or elsewhere. If PolarityTE and Customer have signed a separate, written agreement governing Customer’s purchase of PolarityTE products, then any conflicting terms of that agreement shall govern.
1. DEFINITIONS
As used in this Agreement the following definitions shall apply in each case where the defined term appears in capitalized form:
1.1 Affiliate means any entity controlled by, controlling, or under common control with a Party to this Agreement, through ownership or control of more than fifty percent (50%) of the voting power of the shares or other means of ownership or control, provided such control continues to exist.
1.2 Affiliate Facility means each of those facilities that are Affiliates and which PolarityTE has approved to purchase Product under this Agreement.
1.3 PolarityTE and Customer are each hereinafter sometimes referred to as a “Party” and together are referred to as the “Parties” under this Agreement.
1.4 “Shipment Location(s)” – location specified by Customer for each Product purchase means each Affiliate Facility to which Customer desires for PolarityTE to deliver Products and to which PolarityTE agrees to deliver Products.
1.5 Terms not defined here have the meaning given to them in a separate written agreement on the same subject matter, such as a Purchase Agreement Cover Page.
2. PURCHASING TERMS AND CONDITIONS
2.1 Purchase and Shipment of Product. Subject to Section 2.3, PolarityTE agrees to supply to Customer and Customer agrees to purchase from PolarityTE the Product in accordance with, and subject to, the terms and conditions of this Agreement. The Parties may supplement this Agreement with a list of Shipment Locations. PolarityTE may, at Customer’s request and in PolarityTE’s sole discretion, ship Product to an Affiliate not designated as an Affiliate Facility.
2.2 Payment Terms. Customer will pay all invoiced amounts due to PolarityTE within sixty (60) days from the date of PolarityTE’s invoice. If a payment date falls on a Saturday, Sunday or a federal holiday, Customer may make payment on the next business day and still be in compliance with the applicable payment terms. Electronic payments do not alter standard business practices. If payment is not timely received, PolarityTE reserves the right to assess interest from the date due until the date paid, at a rate equal to the lesser of one (1%) percent per month or the maximum allowable by law in the state in which the sale is made. Unauthorized deductions from payments will not be accepted. All claims for Price, promotion or shipping errors must be submitted by the Customer in writing to PolarityTE within thirty (30) days of the date of the disputed invoice.
2.3 Orders and Inventory. Customer shall submit purchase orders to PolarityTE in a format mutually agreed upon by the Parties. All orders shall be subject to acceptance/ rejection and credit approval by PolarityTE. The terms of this Agreement prevail over any terms or conditions contained in any other documentation and expressly exclude any of Customer’s general terms and conditions contained in any purchase order or other document issued by Customer, including but not limited to, bid requests, solicitations, or invitations to bid. In the event of any conflict between the terms of this Agreement and the terms of any purchase order or any other document issued by Customer, the terms of this Agreement prevail.
2.4 Product Recalls. Customer agrees to follow the recall guidelines in accordance with any future instructional recall notification sent to Customer by PolarityTE. Notwithstanding anything herein to the contrary, PolarityTE shall have no obligation to reimburse Customer as set forth therein in the event that the recall is caused by Customer’s negligent or willful act or omission.
2.5 Product Discontinuance. PolarityTE reserves the right to discontinue the manufacture, sale, and/or distribution of any Product covered by this Agreement, as amended from time to time. If this should occur, PolarityTE will make reasonable efforts to notify Customer before such discontinuance of any Product. PolarityTE will not, in the event of Product discontinuance, accept responsibility for any cost or expenses which a Customer may have to pay to acquire product(s) from other vendors.
2.6 Professional Judgment. Customer acknowledges and agrees that nothing herein shall be construed to require Customer to modify, replace or supersede, in whole or in part, the Customer’s professional judgment responsibilities under applicable medical practice laws.
3. Representations, Covenants and Obligations of Customer.
3.1 General. Customer represents and warrants that: (a) it has the full right, power and authority to enter into this Agreement and to perform its obligations under this Agreement; (b) the execution of this Agreement by Customer’s representative whose signature is set forth at the end of the Cover Page has been duly authorized by all necessary corporate action of the Customer; (c) when executed and delivered by each of PolarityTE and Customer, this Agreement will constitute the legal, valid and binding obligation of Customer, enforceable against Customer in accordance with its terms; (d) it is in compliance with all applicable laws relating to this Agreement, the Products, and the operation of its business; and (e) it is not insolvent and is paying all of its debts as they come due.
3.2 Storage and Handling. Customer shall keep Product stock in good and safe condition and shall permit inspection of Product stock and existing inventory records by PolarityTE during normal business hours upon reasonable advance notice by PolarityTE.
3.3 Own Use. Customer shall not sell or transfer Product to any third-party, joint venturer, parent company, or any other entity, regardless of any common ownership or control, unless expressly permitted to do so to an Affiliate Facility.
3.4 Trademarks. Customer agrees that PolarityTE is the owner and is entitled to the exclusive use of each and every trade name, trademark and service marks which it now possesses, is now using, or may hereafter use in connection with any of the Products or otherwise, and/or which PolarityTE or an agent or an affiliate has heretofore registered, or may hereafter register, in the United States or any foreign country, and that Customer will not derive any ownership or other right to any of such trade names, trademarks or and service marks, and will not now or at any time hereafter use, register, or attempt to use or register any of such trade names, trademarks or service marks, except as expressly authorized in writing by PolarityTE. Without limiting the foregoing, no right is granted to Customer to use any such trade names, trademarks or service marks except in connection with the application of Products in Customer’s ordinary course of business. In the event that Customer wishes to create any material using any such trade name, trademark or service mark, Customer shall obtain the written approval of PolarityTE before using such material.
3.5 Recordkeeping and Audits.
3.5.1 Customer agrees that during the term of this Agreement and for a period of one (1) year after its expiration or termination (or longer if required by law), Customer shall keep and maintain accurate books, records and files relating to its purchase and administration of Products. During the term of this Agreement and for a period of one (1) year after its expiration or termination, at PolarityTE’s written request, Customer shall make such information available for inspection by PolarityTE representatives or its designated auditors during regular business hours and upon reasonable prior notice. Any such inspection must be conducted no later than two (2) year’s following the date on which the utilization at issue occurred, and PolarityTE shall be limited to one (1) such inspection per twelve (12) month period, unless an inspection conducted indicates material noncompliance with this Agreement, in which case PolarityTE shall be entitled to one (1) further inspection during the given twelve (12) month period.
3.5.2 Pursuant to the requirements of Section 952 of P.L. 96- 499 [42 U.S.C. Section 1395x(v)(l)(I)] (the Omnibus Reconciliation Act of 1980), Customer agrees, until the expiration of four (4) years after the furnishing of any services pursuant to this Agreement, to make available to the Secretary of the Federal Department of Health and Human Services or the Comptroller General of the United States, or any of their duly authorized representatives, this Agreement, and all contracts, books, documents and records of Customer that are necessary to certify the nature and extent of the cost of services pursuant to this Agreement. In no event does this relate in any way to any records or documents encompassed within the attorney-client privilege.
3.6 Adverse Reaction and Product Complaint Reporting. If Customer receives notice of an Adverse Reaction or a Product Complaint relating to the Product, Customer shall record and report to PolarityTE within one (1) business day after clinical confirmation. To report adverse events, contact PolarityTE at 1-800-476-6057 or via email at medicalaffairs@polarityte.com. For purposes of this section, and for all Products registered as human cells, tissues, and cellular and tissue-based products (“HCT/Ps”) regulated solely under Section 361 of the Public Health Service Act, an Adverse Reaction is defined as “a noxious and unintended response to any HCT/P for which there is a reasonable possibility that the HCT/P caused the response.” 21 CFR 1271.3(y).
3.7 No Data Reporting. Customer shall not disclose any data related to Product sales and Product utilization to any third-party data reporting services provider, such as IMS or Wolters-Kluwer.
3.8 Compliance with Laws
3.8.1 Each Party agrees to fully comply with all applicable federal, state and local laws, rules and regulations (including, but not limited to, Section 361 of the Public Health Service Act and its implementing regulations at 21 CFR 1271), as amended from time to time, relating to its obligations under this Agreement or otherwise applicable to the manufacture, handling, sale, distribution, and disposal of the Product(s).
3.8.2 Customer acknowledges that any discounts or rebates on items reimbursable by Medicare or a state health care program, such as Medicaid, or other applicable federal, state and local laws, may be reportable by Customer to federal or state health authorities, respectively, pursuant to applicable law, including 42 C.F.R. 1001.952 (h) (“Discount Safe Harbor”). If and to the extent that any discounts, credits, rebates or such other reduction in Price are paid or applied by PolarityTE with respect to the Product(s) purchased under this Agreement, then applicable provisions of the Medicare/Medicaid and state health care fraud and abuse/anti-kickback laws (collectively, “fraud and abuse laws”) may require disclosure of the applicable Price reduction on Customer’s claim or cost reports for reimbursement from governmental or other third parties. Customer agrees to comply with all applicable provisions of the fraud and abuse laws and all other applicable federal, state and local laws, and to indemnify and hold PolarityTE harmless for any failure of Customer’s agent to do so. Each Party shall comply with all applicable laws, including, without limitation, the applicable reporting requirements set forth in the Federal Anti-Kickback Statute as set forth in 42 U.S.C. Section 1320a-7(b) and the Discount Safe Harbor, as amended from time to time. Each Party shall obtain and maintain all federal, state and local approvals, licenses, permits and certifications required of their respective operations. Customer shall notify PolarityTE, within ten (10) business days, of any suspension, revocation, condition, limitation, qualification or other restriction on any such approval, license, permit, or certification which would impede Customer in the performance of its obligations under this Agreement. Neither Party shall undertake any activities which contravene this subsection in the performance of this Agreement.
3.8.3 Neither Party, nor its principals, is a Sanctioned Person or Entity. For purposes of this Agreement, the term “Sanctioned Person or Entity” means a person or entity that: (i) has been, or currently is, excluded pursuant to 42 U.S.C. §1320a-7 or similar state exclusion authority, suspended, debarred, or otherwise ineligible to participate in any federal health care program as that term is defined in 42 U.S.C. §1320a-7b(l) or comparable state programs; (ii) has been convicted of a criminal offense related to the provision of health care items or services or any other offense that may lead to exclusion under 42 U.S.C. §1320a-7 or investigation or otherwise aware of any circumstances (including the receipt of any notice, warning or reprimand) which may result in being excluded from participation in any federal or state health care program. If any change in circumstance occurs to make the foregoing statement inaccurate, one Party must notify the other Party in writing immediately and the other Party shall have the right to immediately terminate this Agreement.
3.9 No Conversion. Customer shall not take any action to disadvantage the Product; provided, that this Section 3.9 shall not be deemed to preclude Customer from: (i) recommending use of a competitive product for an individual patient where use of the Product is clinically inappropriate for such patient, or otherwise answering individual patients’ questions and counseling individual patients with respect to the Products and competitive products, in accordance with Customer’s professional responsibilities and judgment; (ii) utilizing competitive products; or (iii) communicating to patients or prescribers information on coverage of Products and competitive products by the third party payor for an individual patient, including third party payor formulary information and information on competitive product covered alternatives.
4. INDEMNIFICATION, LIMITED WARRANTY & LIMITED LIABILITY
4.1 Each Party shall indemnify, defend, and hold harmless the other Party, its respective officers, directors, employees, affiliates, or subcontractors for any and all damages, costs, expenses and other liabilities (including reasonable attorneys’ and expert witness fees and court costs) incurred in connection with this Agreement and its performance hereunder; provided, however, that the indemnifying Party hereunder shall have no obligation with regard to any claim, action or proceeding to the extent that it arises from the negligence, omissions or willful misconduct of the other Party. The Parties agree that there are no third-party beneficiaries of this Agreement.
4.2 PolarityTE warrants that each Product shall, on the date of shipment by PolarityTE, be compliant with applicable requirements in 21 CFR Part 1271. This warranty is in lieu of all other warranties, express or implied, and PolarityTE expressly disclaims any and all other warranties with respect to the Products including, without limitation, any warranty of merchantability, fitness for any particular purpose or noninfringement. PolarityTE makes no warranty whatsoever, express or implied, and assumes no liability to Customer, distributor(s), or anyone else with respect to the Products including, without limitation, any warranty in respect of: (i) the purity, standards or other characteristics of a Product if the immediate container has been opened by a distributor or anyone else after shipment by PolarityTE (other than immediately prior to its use by the Customer); (ii) the continued availability of any Products; (iii) the use of Products other than as specified on the labels and instructions for use for Product; or (iv) Customer’s alteration of the Products.
4.3 OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES EXPLICITLY MADE HEREIN, POLARITYTE MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND TO CUSTOMER, EITHER EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT, WHETHER EXPRESS OR IMPLIED BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE.
4.4 With respect to any Products not in conformance with the warranty set forth in Section 4.2 PolarityTE shall, in its sole discretion, either: (i) replace such Products or (ii) credit or refund the Price of such Products at the pro rata contract rate provided that, if PolarityTE so requests, Customer shall, at PolarityTE’s expense, return nonconforming Products to PolarityTE. THIS SECTION SETS FORTH CUSTOMER’S SOLE REMEDY AND POLARITYTE’S ENTIRE LIABILITY FOR ANY BREACH OF THE LIMITED PRODUCT WARRANTY SET FORTH IN SECTION 4.2.
4.5 IN NO EVENT SHALL POLARITYTE BE LIABLE TO CUSTOMER FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR INCIDENTAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING IN ANY WAY OUT OF THE AGREEMENT. THIS LIMITATION OF LIABILITY SHALL APPLY REGARDLESS OF (A) WHETHER SUCH DAMAGES WERE FORESEEABLE, (B) WHETHER OR NOT POLARITYTE WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, (C) THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT OR OTHERWISE) UPON WHICH THE CLAIM IS BASED, AND (D) THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE.
4.6 IN NO EVENT SHALL POLARITYTE’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED THE TOTAL AMOUNTS PAID TO POLARITYTE FOR THE PRODUCTS SOLD HEREUNDER.
5. CONFIDENTIALITY
5.1 Confidential Information. The Parties agree to protect the confidentiality of all “Confidential Information.” For purposes of this Agreement, Confidential Information means all nonpublic and/or proprietary information owned or possessed by the disclosing Party, whether existing before the date of this Agreement or created thereafter, in whatever form, including but not limited to the terms of this Agreement, disclosed by one Party to the other. Confidential Information does not include information that, as documented by competent evidence: (i) is or becomes generally publicly available through no fault of the receiving Party; (ii) is independently developed by the receiving Party without use of or reference to the Confidential Information; (iii) was already known to the receiving Party at the time of disclosure as evidenced by written records in the possession of the receiving Party prior to such time; or (iv) is subsequently acquired by the receiving Party in good faith from a third party without breaching any known confidential obligation between the third party and the disclosing Party. Notwithstanding the above the receiving Party may disclose Confidential Information, without violating this Agreement, to the extent such disclosure is legally required to be disclosed for minimal compliance with court orders, statutes or regulations, provided that the receiving Party (a) shall notify the disclosing Party and assert or allow the disclosing Party to assert whatever exclusions or exemptions may be available to it and/or seek a protective order with respect thereto, and (b) reasonably cooperate with the disclosing Party in its efforts to seek such protective order.
6. TERMINATION
6.1 Termination for Convenience. Notwithstanding any other provision to the contrary, either Party may terminate this Agreement at any time, for any reason, upon not less than ninety (90) days prior written notice of termination to the other Party.
6.2 Termination for Breach. If either Party breaches this Agreement and fails to remedy that breach within thirty (30) days after receipt of notice thereof from the non-breaching Party, the nonbreaching Party may terminate this Agreement upon notice to the breaching Party. Notwithstanding the foregoing, either Party may effect an immediate termination of this Agreement upon notice to the other Party if the other Party (i) shall be dissolved or apply for or consent to the appointment of a receiver, trustee or liquidator of all or a substantial part of its assets, which appointment shall not be vacated within sixty (60) days after the filing, (ii) file a voluntary petition in bankruptcy, (iii) admit in writing its inability to pay its debts as they become due, (iv) make a general assignment for the benefit of creditors, (v) file a petition or an answer seeking reorganization or arrangement with creditors or taking advantage of any insolvency law, or (vi) if an order judgment or decree shall be entered by a court of competent jurisdiction, on the application of a creditor, adjudicating such Party as bankrupt or insolvent or approving a petition seeking reorganization of such Party or appointing a receiver, trustee or liquidator of such Party of all or a substantial part of its assets. Termination shall have no effect upon the rights or obligations of the Parties arising out of any transactions occurring prior to the effective date of such termination.
6.3 Survival. Unless otherwise expressly provided herein, only Sections 2.6 (Professional Judgement), 3 (Representations, Covenants and Obligations of Customer), 4 (Indemnification, Limited Warranty & Limited Liability), 5 (Confidentiality), and 8 (General Provisions) survive the termination or expiration of this Agreement.
7. DISPUTES
7.1 In the event any dispute, claim or controversy (“Dispute”) arises out of or relates to the interpretation or performance of this Agreement (excluding payment disputes), then the Parties will initially attempt, in good faith, to resolve such Disputes internally with their senior management or executives, as applicable. Notwithstanding the foregoing, in the event that the Parties are unable to resolve such Dispute within thirty (30) days of one Party receiving written notice of a Dispute from the other Party or such other reasonable period of time agreed to by the Parties in writing, then either Party may pursue legal remedies. The provisions of this Section shall not restrict in any way the Parties’ rights to seek preliminary injunctive or other equitable relief from any court having jurisdiction. Nothing in this Section shall prejudice a Party’s right to terminate this Agreement in accordance with its terms.
8. GENERAL PROVISIONS
8.1. Entire Agreement/Waiver/Precedence. This Agreement constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior and contemporaneous understandings and agreements, whether written, oral or otherwise; provided, however, that if the Parties have executed a separate written agreement with terms on the same subject matter that conflict with these Terms and Conditions, then the terms of that separate agreement shall govern. The terms and conditions of this Agreement shall be waived, modified or amended only by a written document signed by both Parties. None of the terms of this Agreement may be waived except by an express agreement in writing signed by the Party against whom enforcement of such waiver is sought. The failure or delay by either Party to enforce any of its rights under this Agreement, is not, and shall not be deemed a waiver of such right. In the event of any conflict between the terms and conditions set forth in this Agreement and the terms and conditions set forth in any purchase order related to any Product, the terms and conditions of this Agreement shall govern.
8.2 Notices. All notices, requests, consents, claims, demands, waivers, and other communications under this Agreement shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile (with confirmation of transmission) or email; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the addresses so indicated in the Cover Page or as updated from time to time.
8.3 Force Majeure. If any default or delay occurs which prevents or materially impairs a Party’s performance and is due to a cause beyond the Party’s reasonable control, and provided that the default or delay is not caused by or the fault of such Party, including but not limited to an act of God, flood, fire, explosion, earthquake, casualty, accident, pandemic, war, revolution, civil commotion, blockade, terrorism, embargo, injunction, law, proclamation, order, regulation or governmental demand and available supply of material (“Force Majeure Conditions”), the affected Party shall promptly notify the other Party in writing of such cause and shall exercise diligent efforts to resume performance under this Agreement as soon as possible. Neither Party will be liable to the other Party for any loss or damage due to such Force Majeure Conditions, and the term of the Agreement will not be extended thereby. Neither Party may terminate this Agreement because of such default or delay except upon thirty (30) days’ prior written notice to the other Party if the default or delay has existed for sixty (60) days and is continuing at the end of the thirty (30) day notice period. Notwithstanding anything herein to the contrary, PolarityTE shall use its commercially reasonable efforts to fulfill Customer’s orders but shall not be liable for failure to deliver because of Force Majeure Conditions. Customer agrees that during Force Majeure Conditions, PolarityTE, without any liability to Customer, may allocate Products among all of its customers in PolarityTE’s sole discretion.
8.4 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Parties, their successors and permitted assigns. Neither Party may assign its rights or delegate its obligations, in whole or in part, without the prior written consent of the other Party, except that PolarityTE may, without the Customer’s consent, assign this Agreement to an Affiliate or to a person acquiring all or substantially all the assets of PolarityTE.
8.5 Governing Law and Jurisdiction. The validity, interpretation and performance of this Agreement shall be governed by and construed in accordance with the laws of the State of Utah without regard to the principles of conflicts of law and the Parties agree the United Nations Convention for the International Sale of Goods shall not apply. Venue for any disputes arising under this Agreement shall be exclusively maintained in state or federal courts with jurisdiction over Salt Lake County in the State of Utah.
8.6 Severability. If any term of this Agreement is declared invalid or unenforceable by a court or other body of competent jurisdiction, the remaining terms of this Agreement will continue in full force and effect.
8.7 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and together shall constitute one instrument. Signatures exchanged by fax, email or other electronic means shall be treated as original signatures with full force and effect.
Last Updated: March 19, 2020