Purchasing Agreement by and between HCA Management Services, L.P. and Outset Medical, Inc. dated as of May 1, 2020
*Portions of this exhibit have been excluded because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.
|Vendor:||Outset Medical, Inc.|
|Effective Date:||May 1, 2020|
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*Portions of this exhibit have been excluded because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.
This Purchasing Agreement is entered into by HCA Management Services, L.P., a Delaware limited partnership, having its principal place of business at 1100 Dr. Martin L. King Jr. Blvd., Suite 1100, Nashville, TN 37203 (HMS), and Outset Medical, Inc., a Delaware Corporation, with a place of business at 1830 Bering Drive, San Jose, CA 95112, (Vendor), for the primary purpose of establishing the terms and conditions pursuant to which Facilities (as hereinafter defined) may purchase certain products and services from Vendor.
WHEREAS, Vendor desires to offer certain of its products and/or services to Facilities.
NOW, THEREFORE, HMS and Vendor hereby agree that Vendor shall provide products and/or services to Facilities in accordance with this Agreement.
Incorporation; Definitions. The above premises are incorporated into this Agreement as if set forth verbatim herein below. Capitalized terms not defined elsewhere in this Agreement shall have the following meanings:
Affiliates as applied to any particular entity, means those entities, businesses, facilities, and enterprises that are controlled by, controlling, or under common control with a stated entity, whether by ownership or contract; provided, however, that no shareholder of HCA Healthcare, Inc., shall be deemed to be an Affiliate.
Agreement means this purchasing agreement, including all exhibits and other attachments appended hereto, as amended from time to time.
Cause means [***].
COID means the unique identification number assigned to each Facility.
Confidential Information means information related to the business of a Party, a Facility and their Affiliates, clients and patients that may be obtained as the result of performance under this Agreement. Confidential Information shall include, but is not limited to, [***]. Subject to the HIPAA Requirements (as defined in Section 11.3) and any applicable law or regulation, Confidential Information shall not include: [***].
Disclosing Party means the Party, Facility or its Affiliate that provides or discloses Confidential Information to the other Party, Facility or its Affiliate under this Agreement.
Distributor(s) means any product distributor designated in accordance with Exhibit B.
Dual Source Award means an agreement by HMS not to contract on behalf of all of the Facilities with more than one alternative supplier from which Facilities can purchase products and services comparable to those listed in Exhibit A during the Term.
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*Portions of this exhibit have been excluded because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.
EDI means Electronic Data Interchange.
Effective Date means the date this Agreement commences, which is designated in Exhibit B.
EFT means Electronic Funds Transfer.
Equipment means a Product: (i) with a life span in excess of one (1) year; (ii) contains or is made of non-expendable material; and (iii) is not a consumable or software. Equipment includes any and all component parts thereof.
Expiration Date means the date this Agreement expires, which is designated in Exhibit B.
Facility (ies) means those Affiliates of HMS that own or operate healthcare facilities and/or providers including, but not limited to, acute care facilities, hospitals, ambulatory surgery centers, imaging centers, alternate site entities, physician practices, rehabilitation facilities, psychiatric centers, clinics or any other kind of healthcare providers, listed on Exhibit C hereof, as amended by HMS with notice to Vendor from time to time. Facility shall also include any Affiliates of HMS which provide distribution and/or warehousing services for other Facilities.
FDA means the United States Food and Drug Administration
Fill Rate means the average of the individual fill rates for all orders of a Product by stock keeping unit (or SKU) by all Purchasers during any calendar month, calculated by dividing the total units delivered undamaged within the delivery requirements of Section 7.0 of this Agreement and/or Exhibit B by the total units ordered for such Product during such calendar month.
GLN means the Global Location Number assigned to each Purchaser by GS1.
Multi-Source Award means Vendor is designated as an approved source of Products and/or Services with no limitation on HMS contracting with alternative suppliers from which Facilities can purchase products and services comparable to those listed in Exhibit A during the Term.
MWBE or Minority and Woman Owned Business Enterprise means a business that is: (i) a minority owned business, as certified by the National Minority Supplier Development Council (NMSDC) or any local affiliate thereof; (ii) a woman owned business, as certified by the Womens Business Enterprise National Council (WBENC); or (iii) a service disabled veteran owned business, as certified by the Association for Service Disabled Veterans (ASDV).
New Technology Product means a product that, as compared to existing products, offers significant technological advancements and: (i) will significantly improve clinical outcomes or patient care; or (ii) will significantly streamline clinical and/or operational work processes.
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Optional Source Award means Vendor is designated as an approved source of the Products and/or Services, with no limitation on HMS or Facilities contracting with alternative suppliers for purchases of products and services comparable to those listed in Exhibit A during the Term, or on Facilities purchasing such comparable products and services from alternative suppliers on a non-contract basis.
OSHA means the Occupational Safety and Health Administration.
Party and Parties means Vendor and/or HMS, as the context requires.
Products means those goods listed in Exhibit A to this Agreement and under any Purchaser-Specific Agreements permitted hereunder, and any instruments or other items provided by Vendor Personnel in connection with the use of the goods listed in Exhibit A.
Purchaser means any Facility obtaining Products and/or Services from Vendor.
Rebate means any amount paid by Vendor to HMS for allocation to Purchasers, based on purchases of Products and/or Services by Purchasers under this Agreement during a specified time period. The Rebate shall be determined as stated in Section 3.1 and any applicable Exhibit.
Recall shall have the definition set forth in Section 9.7.
Receiving Party means the Party, Facility or its Affiliate that receives Confidential Information from the other Party, Facility or its Affiliate under this Agreement.
Services means those services listed in Exhibit A to this Agreement and under any Purchaser-Specific Agreements permitted hereunder, as well as any services provided by Vendor Personnel in connection with any Purchasers purchase and/or use of Products, including conversion to and support for the Products, as well as training and education related to the Products.
Sole Source Award means an agreement by HMS not to contract on behalf of all Facilities with any alternative supplier from which Facilities can purchase products and services comparable to those listed in Exhibit A during the Term.
Subcontractor means representatives, agents or other third party entities engaged or used by Vendor in the performance of Vendors obligations under this Agreement.
Term means the period during which this Agreement is in effect, commencing on the Effective Date and ending on the Expiration Date, unless terminated early or extended as permitted by this Agreement.
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Vendor Personnel means any Vendor employees or Subcontractors responsible for performing Services under this Agreement.
General Purchasing Provisions
Award Basis. The award basis for this Agreement is designated in Exhibit B.
Eligible and Ineligible Purchasers. Commencing on the Effective Date, all Facilities listed on Exhibit C shall be eligible to obtain Products and/or Services from Vendor under this Agreement. Upon the receipt of any updated list of eligible Purchasers (Exhibit C), Vendor agrees to update its list of Facilities within [***] days after checking the eligible Purchasers list to accurately reflect the name, address, COID, GLN, and any other assigned identification code for each Facility. Vendor agrees to permit any new Facilities added to Exhibit C with access to Products and/or Services and pricing under this Agreement by the end of such [***] day period. HMS shall have the right at any time to request from Vendor a copy of Vendors list of Facilities for HMSs review, and Vendor shall correct any inaccuracies in such list of Facilities discovered by such review. If a Purchaser ceases to be a Facility of HMS during the Term, Vendor agrees not to thereafter allow such Facility to purchase Products and/or Services under this Agreement. Any Purchaser-Specific Agreement entered into by Vendor and a Facility in connection with this Agreement, regardless of the terms therein, shall automatically terminate upon such Facility no longer being an eligible Purchaser under this Agreement. Purchasers obtaining Products and/or Services from Vendor under this Agreement shall be considered third party beneficiaries under this Agreement.
Purchaser Obligations. Vendor agrees that HMS shall have no responsibility or obligation for payments owed by Purchasers or for any other obligations of Purchasers under this Agreement.
Orders. This Agreement shall apply to each order of Products and Services by a Purchaser, regardless of how communicated or whether reference is made to this Agreement.
Termination of Existing Arrangements. Any Facility or Purchaser may, at any time and without penalty or liability, terminate any existing contract or other arrangement with Vendor in order to purchase under this Agreement notwithstanding any provision to the contrary in any such existing contract or arrangement.
Local Deals. Except as expressly permitted by HMS in the form of an exhibit to this Agreement, Vendor covenants that it will not enter into or negotiate a separate agreement with any Purchaser for the same Products and/or Services offered under this Agreement without HMSs prior written consent and authorization (Purchaser-Specific Agreement). In any case, a Purchaser-Specific Agreement must have pricing terms no less favorable than those of this Agreement, and all Purchaser-Specific Agreements will be subject to and governed by the terms of this
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|Agreement, including Section 15.3 (Conflicts). Upon request, Vendor shall provide HMS with information regarding Purchaser-Specific Agreements, including lists of Purchasers that have executed Purchaser-Specific Agreements and summaries and copies of same.|
Intentionally Left Blank.
Capital Investments. Vendor assumes the full and complete risk of any capital investment it makes to enable or to enhance its capabilities to perform under this Agreement.
Direct and/or Distributor Purchases. As set forth in Exhibit B, Products and/or Services may be obtained: (i) only directly from Vendor; or (ii) only through a Distributor; or (iii) by either of the foregoing means. Exhibit A sets forth the prices (including any discounts or Rebates) for purchases made directly from Vendor and/or through a Distributor, as applicable.
Direct Purchases. For purchases directly from Vendor, no minimum quantity or dollar amount shall apply to any order unless expressly stated in Exhibit B. Vendor shall issue a refund or credit, at Purchasers option, for any overcharge/overpayment to Purchaser no later than [***] days following discovery or notice thereof. In the event of an undercharge, Purchaser shall have no obligation to pay Vendor the amount of such undercharge, nor shall Vendor have the right to set-off the undercharge against any refund due for an overcharge/overpayment, unless the undercharge was an error discovered and re-invoiced within [***] days after the date of the original invoice. Vendor shall provide to each Purchaser at least quarterly statements listing unapplied credits, and upon request by a Purchaser, shall promptly refund the amount of the unapplied credits.
Purchases through Distributors. For purchases through Distributors, prices shall be either net to Distributor or net to Purchaser as specified in Exhibit A. Vendor shall provide Product pricing and related information to Distributors that is consistent with Exhibit A (and any amendments) and corresponding pricing files for EDI and Internet e-commerce transactions. HMS shall also be permitted to provide such Product pricing and related information to Distributors. Vendor bears total responsibility for obtaining Purchaser-specific purchase information from Distributors so that Vendor accurately pays and reports Rebates (if any). Vendor will not change its financial arrangements with any Distributor in any manner that could result in an increase in the prices charged by that Distributor to Purchasers for Products under this Agreement.
Effective Date and Firm Pricing. The obligation of Vendor to make Products and/or Services available under this Agreement shall commence as of the Effective Date. The prices set forth in Exhibit A shall be fixed and firm effective from the Effective Date through the Expiration Date.
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Current Products. Vendor represents and warrants that, as of the Effective Date, Exhibit A contains all products offered by Vendor in the United States within a Product category covered by this Agreement. Upon receipt of notice from HMS that Vendor it is not in compliance with this Section 2.11.1, Vendor will have [***] days to execute an amendment to add the product to Exhibit A at a price point or discount comparable to other Products under this Agreement. If Vendor fails or declines to add the product within such [***] day period, then HMS, in its sole discretion, may immediately terminate this Agreement.
Product Discontinuation. Vendor shall provide HMS at least [***] notice prior to discontinuation of any Product. Subject to Section 2.12, replacement products, if any, which have characteristics and specifications at least equal to that of the replaced Product and shall be offered at a price not greater than that of the replaced Product.
New Products. Vendor must provide [***] notice to HMS prior to offering for sale to Facilities any new product (that is not a New Technology Product subject to Section 2.11.4) in the Product category covered by this Agreement. During this period, Vendor must complete any product documentation requested by HMS and amend Exhibit A to add such product at a mutually-agreed price. If Vendor offers any new product to Facilities prior to such amendment, Vendor agrees that Facilities will pay the price on Exhibit A for the most comparable Product.
New Technology Products. If a New Technology Product within a Product category covered by this Agreement becomes available from any supplier including Vendor, HMS may evaluate and contract with such supplier to make the New Technology Product available to Facilities without constituting a breach of this Agreement. If requested by HMS, Vendor shall negotiate in good faith to amend Exhibit A to add such product at a price point or discount comparable to those applicable to Products under this Agreement. Vendor shall also negotiate in good faith to amend Exhibit A to equitably reduce the pricing for any current Products affected by the release of the New Technology Product.
Performance Requirements. Vendor represents and warrants that it will not change a Product in a manner that would materially affect its specifications or functionality without the prior written consent of HMS. If Vendor fails to obtain such consent for any such change, then:
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Contracted pricing for the identified Product(s) will not be increased under any circumstances;
Each Purchaser shall have the right to procure products comparable to the identified Product(s) from another source without any penalty and will continue to be in compliance with this Agreement and any Purchaser-Specific Agreements under this Agreement; and
HMS has the right to either: (a) remove the identified Product(s) from this Agreement; or (b) reduce the award basis and contract with an alternative supplier for the applicable product category.
Technology Refresh; Replacement Parts.
Useful Life. Vendor represents and warrants that it will continue to support and provide Services to repair, upgrade and maintain those Products that are Equipment for a minimum of [***] from installation of such Product (Useful Life).
Product Replacement Parts. Vendor represents and warrants that all Products and replacement parts needed to upgrade, repair or maintain full functionality of such Products, including any Equipment, shall be available for not fewer than [***] following the expiration of the warranty period set forth in Exhibit B Vendor must warrant replacement parts for at least [***].
Operating System Current. Vendor represents and warrants that any Product that contains a Windows operating system is a Windows 7 or newer operating system.
Operating System Changes; No Cost. Vendor represents and warrants that if the operating system that supports the Software is acquired from a third party, that operating system is a current operating system of that third party, fully supported by that third party, capable of being Updated and Upgraded for the Useful Life of the Product. Further Vendor represents and warrants that any and all operating system Upgrades and Updates to every Product that contains Software will be made available to Purchaser and provided at no cost to Purchaser for the Useful Life of the Product.
Survival of Technology Refresh Commitment. The provisions of this Section 2.13 (Technology Refresh; Replacement Parts) survive: (a) the Purchaser discontinuing purchases of the Equipment or associated Products; (b) Vendor discontinuing the sale of the Equipment or associated Products; and (c) the expiration or termination of this Agreement for any reason.
Additional definitions for this Section. Software shall be defined as Vendors object code that is embedded in Equipment. Update(s) is any enhancement, modification, alteration, improvement, correction, revision, and other changes to the Software, including but not limited to Updates
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|made after the Effective Date which Vendor generally makes available for the Software at no additional fee. Upgrade(s) is any addition to the Equipment or Software by Vendor that adds new material functional capabilities and feature enhancements is not an error correction or an Update or part thereof and is sold or licensed separately, and not included in the annual service annual or purchase price of the Equipment sold herein.|
Rebates, Reporting, Prices, Payments
Rebates. Vendor shall pay Rebates based on purchases of Products and/or Services by Purchasers in the amounts stated in Exhibit A, if any. If a percentage is listed, then the Rebate shall be determined by multiplying the stated percentage by the dollar amount actually paid by the Purchaser for Products and Services purchased under this Agreement, excluding any added freight charges, taxes, any Distributor markup (if applicable), and net of any refunds or credits on Product returns. Rebates shall be paid to HMS for payment by HMS to Purchasers. The payment of Rebates is intended to be in compliance with the exception to the Medicaid and Medicare Anti-Kickback Statute set forth at 42 U.S.C. § 1320a-7b(b)(3)(A) and the safe harbor regulations set forth in 42 C.F.R. § 1001.952(h). With each Rebate payment, Vendor shall provide an electronic report that contains sufficient detail to permit HMS to accurately allocate the appropriate amounts to each Purchaser.
If applicable under Exhibit A-Vendor acknowledges that failure to timely pay Rebates, or to submit accurate reports, will delay HMSs payment and/or reporting of Rebates to Facilities and Purchasers, thereby potentially causing them to be unable to accurately complete cost reports required under government-reimbursed healthcare programs.
Late Fees. If applicable under Exhibit A HMS shall have the right to charge, and Vendor agrees to pay, a late fee equal to [***] percent ([***]%) per month (or the maximum allowed by law, whichever is less) of the amount of any Rebates, or other fees not paid or refunded by Vendor in accordance with the payment terms stated in this Agreement. Any Purchaser shall have the right to charge, and Vendor agrees to pay, a late fee equal to [***] percent ([***]%) per month (or the maximum allowed by law, whichever is less) of the amount of any Purchaser overpayments not refunded by Vendor in accordance with the payment terms stated in Section 2.9.1. Such late fees shall also apply to other fees not paid or refunded by Vendor within [***] days of Vendors receipt of the applicable invoice. The accrual of the late fee shall commence on the date the original payment was due.
Other Reports. If applicable-On or prior to the Effective Date, and thereafter upon request, Vendor shall provide HMS with electronic copies of: (i) the price list in Exhibit A; and (ii) Vendors list prices for Products. On a quarterly basis, Vendor shall also provide to HMS the related product offerings reports per Exhibit B, which shall include all applicable GTIN, GLN and GSDN data as defined in Section 4.2 (GS1 GTIN Standards). Vendor shall also furnish, in an agreed-upon format, any additional reports reasonably requested by HMS related to Products provided to Purchasers under this Agreement.
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EDI and E-Commerce
Electronic Ordering. For Products and Services available directly from Vendor (if any), Vendor shall provide, at no additional cost to Purchasers, a mechanism for purchase order placement, confirmation, change orders and invoices to be sent by EDI or by internet-based e-commerce system. Vendor will absorb any costs incurred by Vendor to provide or maintain such mechanism, including third party costs for data transfers. Vendor and the applicable Purchaser shall own all transaction data, and HMS shall have the right to access and retain such transaction data for performance of its group purchasing functions.
GS1 GTIN Standards. HMS and Vendor support implementation of Global Trade Item Numbers (GTIN) and GLNs in the health care industry as the standardized system for marking products with unique identifiers at all units of use, in an effort to improve the efficiency and visibility of clinical supply and demand chains. Vendor will assign a GTIN to identify each Product at all applicable levels of packaging and will provide the GTIN and GLN information and applicable Product attributes to HMS via the Global Data Synchronization Network (GDSN) using the services of a data pool provider. Upon HMS request, Vendor will participate in compliance testing to demonstrate that its data submissions conform to the GTIN and GLN requirements.
Competitive Pricing. The prices, terms, and conditions under this Agreement must be as favorable or better than those offered by Vendor to any other similarly situated customer, excluding government entities. To the extent that Vendor is not in compliance with this Section 5.1 and Section 8.1, Vendor shall refund to each Purchaser the difference between the price Purchaser paid and the lower price for each applicable purchase. Within [***] days of determining that Vendor is not in compliance, HMS and Vendor shall amend this Agreement to provide at least as favorable prices, terms, and conditions to Purchasers.
Price Decreases. Vendor shall notify HMS if it offers any general, across the board price decreases for Products or Services to a substantial number of its customers and shall make such decreases available to Purchasers promptly and in like amounts or percentages, as applicable.
Invoice Errors. If an invoice does not match purchase order information: the purchase order number, Products, prices set forth in Exhibit A and other required information, then Purchaser shall have the right to reject the invoice and request resubmission by Vendor or Distributor, and the payment terms set forth in Exhibit B shall be tolled until an invoice with the correct purchase order information has been received by Purchaser.
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Tax Collection. Vendor shall be registered in all taxing jurisdictions where, as a seller of Products and/or Services under this Agreement, it is legally required to register. Vendor shall pay to the applicable taxing authority any federal, state, or local excise or other similar tax imposed on Vendor or for which Vendor is legally, contractually or otherwise responsible in connection with its sale or provision of Products and/or Services under this Agreement (including, without limitation, the medical device excise tax, as set forth in the Section 4191 of the Internal Revenue Code), without seeking any reimbursement from Purchasers. Vendor shall collect from each Purchaser and pay to the applicable taxing authority any federal, state or local sales or use tax imposed on a Purchaser or for which a Purchaser is legally responsible in connection with such Purchasers purchase or acquisition of Products and/or Services under this Agreement. Invoices to Purchasers shall clearly and separately state the amount of such tax. If multiple items are listed on Vendors invoice, taxability per item per applicable taxing jurisdiction must be indicated. Vendor shall promptly refund to Purchasers any overcharges of taxes collected by Vendor from Purchasers. Vendor shall pay all amounts assessed by any taxing authority as a result of Vendors failure to comply with this Section 6.1.
Product Information for Tax Reconciliation. Upon request, Vendor shall provide reasonable assistance to HMS and each Purchaser to provide data and information in Vendors possession to assist Purchasers reconciliation of its item files to Vendors files with regard to tax rates and taxability of Products and/or Services, including the provision of the following information, as applicable to Products:
Is the Product or package labeled in a manner that indicates that it is available only with a physicians prescription (i.e., is it a federal legend item)?
Is the item a kit, pack, or tray? If yes, list all items contained in the kit, pack, or tray and each items approximate percentage of the cost.
Is the Product intended for single patient use?
Does the Product carry a National Drug Code (NDC) label or serve as a generic equivalent for a product carrying an NDC label?
Is the Product medicated? If yes, what is the primary active ingredient?
Tax Information. Upon request, Vendor shall furnish to HMS and each Purchaser a copy of Vendors registration certificate and number within each taxing jurisdiction prior to collecting such sales or use taxes. If a Purchaser is a tax-exempt entity, such Purchaser shall furnish Vendor with any documents necessary to demonstrate its tax-exempt status, and Vendor shall honor Purchasers tax-exempt status as appropriate under applicable state law. Vendor shall also provide to each Purchaser Vendors Federal Tax Identification number upon request.
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Vendor Performance; Cancellation
Performance Warranty for Direct Purchases and Services. For purchases made directly from Vendor (if any), Vendor represents and warrants that it shall maintain sufficient inventory and transportation arrangements to comply with the delivery time and the Required Fill Rate stated in this Agreement. Further, for Services provided by Vendor, Vendor represents and warrants that it shall comply with the performance time, if any, stated in this Agreement or permitted Purchaser-Specific Agreement. In any instance where Vendor anticipates that it will not be able to comply with the delivery time and/or the Required Fill Rate for Products, or the performance time for Services, Vendor shall promptly attempt to resolve the issue to each affected Purchasers reasonable satisfaction, which may include Purchasers acceptance of alternative delivery or performance dates or, with respect to Products, the provision of an acceptable substitute from Vendor at the same or lower price as the unavailable Product.
No Breach of Award or Commitment. Neither HMS nor Purchaser shall be deemed to be in breach of this Agreement (including award status and any individual Purchaser-specific Agreement or other commitment terms) by entering into a contract for or purchasing replacements for Products that, due to Vendors supply problems or Product Recall, Vendor or a Distributor is unable to provide Products as required by this Agreement.
Cancellation of Orders. Purchaser may cancel any order arising out of this Agreement in whole or in part, without liability, if: (i) Products have not been shipped or Services have not been provided as of the date of Vendors receipt of notice of cancellation (unless Products are custom orders); (ii) Product deliveries are not made or Services not provided at the time and in the quantities specified;(iii) Products (or the possession and use thereof) or Services fail to comply with the terms of this Agreement or with any applicable law or regulation; or (iv) Products are subject to Recall. Also, Purchaser may immediately cancel any order where Vendor is in breach of the Warranty of Non-exclusion, as set forth in Section 14.9. To cancel, Purchaser shall give notice to Vendor in writing, and to the extent specified in such notice, Vendor shall immediately terminate deliveries or performance under the order.
Fill Rate Requirements. Vendor represents and warrants that it shall meet or exceed a [***] percent ([***]%) Fill Rate (unless a different Fill Rate is specified in Exhibit B) for each Product during the Term (the Required Fill Rate). Any failure by Vendor to maintain the Required Fill Rate for any Product (whether such Product is supplied directly to Purchasers or to a Distributor) that is not cured within [***] days following written notice from HMS shall be deemed a breach of this Agreement. In the event of such failure to cure, in addition to any other rights or remedies of HMS, HMS may convert the award status for such Product to an Optional Source Award with no change in pricing.
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Shipping Terms for Direct Purchases
For purchases made directly from Vendor, shipping terms and freight payment responsibility shall be in accordance with this Section 8.0 and Exhibit B.
Freight Charges. If and to the extent freight charges are included in the Products purchase price, Vendor represents and warrants that such charges will remain reasonable and market competitive. If freight charges are not included in the Products purchase price, Vendor shall invoice Purchaser only the actual amount the carrier charges Vendor to ship such Product. Under no circumstances (including Section 8.3, Third Party Freight Management Service) may Vendor charge any fees related to delivery by Vendor Personnel, any processing or minimum order fees, or any other shipping or handling charges whatsoever.
Packing and Risk of Loss. Vendor assumes all responsibility for proper packing of Products for safe shipment to Purchaser and in accordance with carrier requirements and applicable laws and regulations. Products shall be shipped [***] unless expressly provided otherwise in Exhibit B.
Third Party Freight Management Service. If freight is not included in the Products purchase price, Vendor shall ship the Products using a Purchaser-designated freight management service upon request by such Purchaser. Delivery terms shall be [***], bill Purchaser or Purchasers designee, for payment by Purchaser to the carrier directly. If Vendor fails to ship Products through the designated carrier, Vendor shall reimburse Purchaser for the total freight charges incurred by Purchaser.
Inspection. Upon delivery Purchaser may reject Products that are damaged in shipment. Purchaser may hold any Product rejected for reasons described in this Agreement pending Vendors instructions, or Purchaser, at Purchasers option, may return such Products to Vendor at Vendors expense, [***].
Representations and Warranties for Products and Services; Disclaimer of Liability
Product Warranties. Vendor represents and warrants to HMS and Purchasers that the Products when received by Purchaser:
are new, unadulterated and not used, remanufactured or reconditioned (unless specified in the Purchasers order);
for a period of [***] from the date delivery are free from defects, whether patent or latent materials or workmanship;
have packaging, labeling and inserts that conform to and comply with the requirements of all applicable industry, accreditation, commission and regulatory standards, and applicable federal, state and local laws, regulations and ordinances (including those of the Joint Commission and Medicare/Medicaid conditions of participation);
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conform with statements in Vendors Product inserts, advertising literature, user documentation, specifications, and written warranties for the Products;
are marked with an industry standard barcode for each unit of measure associated with each Product;
carry a safety mark, if required by OSHA, from a National Recognized Testing Laboratory (NRTL) for use of electrical equipment in a public facility (as specified in the OSHA 29 C.F.R. Standards, Part 1910, Subpart S-Electrical, Sec 1910.399, including any amendments thereto);
are listed with Underwriters Laboratory (UL) or a nationally recognized testing laboratory as suitable for use in a healthcare facility, if such listing is available for Products; if Products include medical electrical equipment, Products shall meet or exceed the requirements of either UL-544 or UL 60601-1 Medical Electrical Equipment, Part 1: General Requirements for Safety, as amended or superseded, or the then most current UL, National Fire Protection Association (NFPA) 99, NFPA 70, FDA, or other applicable standard/code that addresses the safety and marking requirements of electrical medical devices (references to UL or NFPA code sections in this Section 9.1 shall also be deemed to apply to any amendments or superseding sections thereto);
if the Products are electrically powered, each Product is provided with a heavy-duty grade power cord that meets the requirements of UL-544, UL 60601-1, or NFPA 99 § 8-4.1 (and subsets) or the then most current UL, NFPA 99, NFPA 70, FDA, or other applicable standard/code that addresses the safety and marking requirements of electrical medical devices; the adapters and extension cords, if needed, for the use of this Product, meet the requirements of NFPA 99 § 8-220.127.116.11 or the then most current UL, NFPA 99, NFPA 70, FDA, or other applicable standard/code that addresses the safety and marking requirements of electrical medical devices; and to the extent other requirements of NFPA apply to any Product, whether or not specifically referenced in this Agreement, Products will comply with such applicable NFPA standards;
to the extent applicable, meet the requirements of NFPA 99 for Health Care Facilities, Chapter 8 or UL 544 or UL 2601-1 or the then most current UL, NFPA 99, NFPA 70, FDA, or other applicable standard/code that addresses the safety and marking requirements of electrical medical devices, with maximum leakage current not to exceed the values set forth in NFPA 99 § 7-5.1.3 or 7-5.2 or the then most current UL, NFPA 99, NFPA 70, FDA, or other applicable standard/code that addresses the safety and marking requirements of electrical medical devices, as applicable. (Actual leakage current test values for Products shall be furnished by Vendor at the request of HMS or any Purchaser);
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if the Products are equipment intended for use in an operating room environment or other location with anesthetizing equipment, each Product is labeled in accordance with NFPA 99 § 9-18.104.22.168 or the then most current UL, NFPA 99, NFPA 70, FDA, or other applicable standard/code that addresses the safety and marking requirements of electrical medical devices; each Product label shall indicate whether it is suitable for use in anesthetizing locations under the requirements of NFPA 70 § 13-4.1 and 99 § 7-5.1 or the then most current UL, NFPA 99, NFPA 70, FDA, or other applicable standard/code that addresses the safety and marking requirements of electrical medical devices; if Product is intended to be used in locations where flammable anesthetics are used, the Product shall be marked in accordance with NFPA 70 § Article 505-9 or the then most current UL, NFPA 99, NFPA 70, FDA, or other applicable standard/code that addresses the safety and marking requirements of electrical medical devices;
if the Products are equipment, each Product is shipped with an operator or user manual (may be in compact disc form or downloaded from Vendors website) that includes:
Illustrations that show locations of controls;
Explanation of the function of each control;
Illustrations of proper connection to the patient and other equipment;
Step-by-step procedures for proper use of the appliance;
Safety precautions (or considerations) in application and in servicing;
Effects of probable malfunctions on patient and employee safety;
Difficulties that might be encountered, and care to be taken if the Product is used on a patient at the same time as other electric devices;
Circuit diagrams for the particular Product shipped;
Functional description of the circuits in Product;
Power requirements, heat dissipation, weight, dimensions, output current, output voltage and other pertinent data for the Product;
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All other warnings and instructions necessary to operate the equipment safely, effectively, and efficiently; and
if the Products are equipment, each Product contains:
Condensed operating instructions clearly and permanently displayed on the Product itself;
Nameplates, warning signs, condensed operating instructions, labels, etc. that are legible and will remain so for the expected life of the Product under the usual stringent hospital service cleaning conditions;
Labeling in compliance with the medical device labeling requirements under the applicable FDA rules, regulations, and guidelines; and
Labeling that provides all other warnings and instructions necessary to operate the equipment safely, effectively, and efficiently; and
are: (i) not tracked devices (as defined in 21 C.F.R. § 821.1, as such may be amended from time to time), unless Vendor provides the tracking requirements applicable to such Product in Exhibit B; and (ii) if any Product is a tracked device, the disclosures in Exhibit B regarding the applicable tracking requirements for such Product are true and accurate, provided however, the Participant is current in payment for service.
Product Failures. If any Product purchased under this Agreement fails to function in accordance with the warranties stated in this Agreement within the warranty period stated in Exhibit B, then Vendor shall promptly repair or replace the Product, at Purchasers option, at no additional cost to Purchaser. If the Product is an implanted medical device that is removed from a patient due to such failure to function, Purchaser shall have the additional option to require that Vendor refund the original purchase price, including any shipping fees and taxes paid by Purchaser. This warranty for the applicable Products will be null and void if (i) Purchaser or any person who is not directed by Vendor to perform such service attempts to modify, repair or service the Product itself (other than performing the maintenance described in the operator and technician manuals), or (ii) the Product is used in a manner not provided for in the documentation and Technical Specifications provided by Vendor for the Products unless otherwise directed by Vendor. If any Product is found to be defective due to defective materials and/or workmanship for the period of time set forth in Section 9.1.2, Vendor will, at its option, repair or replace the defective parts without charge.
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NO IMPLIED WARRANTIES. VENDOR DISCLAIMS AND EXCLUDES ANY IMPLIED WARRANTY, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.
Good Title. Vendor represents and warrants to HMS and Purchasers that Vendor has good title to the Products supplied and that the Products are free and clear from all liens, claims and encumbrances.
Intellectual Property Rights.
Warranty of Non-Infringement. N/A
Infringement. Vendor agrees to indemnify HMS and Purchasers against any claim of infringement, misappropriation or alleged infringement or misappropriation of any patent, trademark, copyright, trade secret or other intellectual property right, resulting from the possession or use of the Products. If a Product is alleged to infringe or misappropriate or is believed by Vendor to infringe upon any copyright, patent or trademark, or misappropriate any trade secret of a third party, Vendor, at Vendors sole expense, may elect to: (i) modify the Product so that such Product is non-infringing and functionally equivalent; (ii) replace the Product with a non-infringing product that is functionally equivalent; (iii) obtain the right for Purchasers to continue using the Product or (iv) if options (i) (iii) are unavailable, Vendor will refund the purchase price, less reasonable depreciation, based on a straight line six year depreciation schedule.
No Additional Fees. If the Products and the use thereof are covered by any intellectual property rights of Vendor or its Affiliates, provided Purchaser has paid the purchase price for the Products, Purchaser shall have the right to use the Products in the manner intended by Vendor without paying any additional fees to Vendor or Vendors Affiliates.
Services Warranties. Vendor represents and warrants to HMS and Purchasers that:
the Services conform with statements in Vendors advertising literature, user documentation, specifications, and written warranties for the Services, including any projectspecific Service warranties and any Services warranties stated herein;
the Services provided conform to the requirements of all applicable industry, accreditation, committee and regulatory standards and applicable federal, state and local laws, regulations and ordinances (including those of the Joint Commission and Medicare/Medicaid conditions of participation);
the Services shall be performed timely, in a workman-like manner, consistent with industry standards, and only by Vendor Personnel that have been sufficiently trained to perform assigned Services; and otherwise in conformance with any standards provided in any Exhibit to this Agreement;
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Vendor shall obtain at its own cost any and all necessary consents, licenses, approvals, and permits required for the provision of Services;
Vendor will not employ or use any individual to perform Services who is not legally authorized to work in the United States; and
Vendor shall (and shall require that any Subcontractors shall) (i) retain exclusive responsibility for the payment of wages, salaries, benefits, taxes and/or other payments to, or in respect of, Vendor Personnel; (ii) remain the common law employer of Vendor Personnel; (iii) retain the authority to manage, direct and control the day-to-day work of Vendor Personnel; and (iv) inform Vendor Personnel in writing that they are not eligible to receive benefits offered to employees of customers of Vendor and/or Subcontractor (in a manner inclusive of HMS, any Purchaser and/or their respective Affiliates) and retain written confirmation of same.
Training. Vendor represents and warrants that if Vendor Personnel provide Product training to Purchaser employees or physicians: (i) the predominant purpose of the training is provide instruction on the use of the Products consistent with the Products specifications and intended use; (ii) the training is not for instruction on how to market the Products or procedures using the Products; (iii) the training is not intended to encourage investment in Vendor; (iv) the training is not for instruction on how to bill any Healthcare Program; and (v) the training has no substantial independent value to Purchaser employees or physicians.
Recalls. Vendor will promptly notify HMS upon becoming aware of any patient safety issue involving the Products or Services. If any Product or any of its components is subject to recall as that term is defined under 21 C.F.R. Part 7, or a voluntary recall by Vendor, or is subject to an FDA-initiated court action for removing or correcting violative, distributed products or components (any of the foregoing being referred to as a Recall), Vendor shall notify Purchasers and HMS within [***] after becoming aware of any Recall or after Vendor provides notice of the Recall to the FDA. Notices to HMS shall be sent by e-mail to:
Vendor will comply with any process mandated by the FDA, if applicable, to address such Recall with each Purchaser. If a Recall notice suggests or requires that a Product or any component of a Product be returned or otherwise removed from use, Purchasers shall have the right to return to Vendor or Distributor (if purchased from a Distributor) any such Products at Vendors expense, including return shipping, and Vendor shall reimburse Purchaser for its original costs, including freight, in acquiring such Product, less reasonable depreciation: based on 6 year useful life of product. For any other Recall which provides Purchaser the
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option of Vendor repair or replacement of the Product, if Vendor is unable to do so to Purchasers satisfaction, Purchaser shall have the right to return the Product for reimbursement and refund at Vendors expense as provided in the preceding sentence. To the extent such Recall precludes Vendor from supplying any Products or Services under this Agreement, any Purchaser compliance requirements or purchase requirements under this Agreement or any Purchaser-Specific Agreement shall not be effective for as long as Vendor is unable to supply such Products, and a Purchasers pricing will not change for failure to meet the compliance or purchase requirements during the Vendors inability to supply.
Business Continuity Plan. Vendor represents and warrants to HMS and Purchasers that it has and shall maintain a business continuity and disaster recovery plan to enable delivery of Products or Services upon the occurrence of any event or circumstance beyond Vendors reasonable control, including without limitation acts of God, war or terrorist attack, pandemic, riot, fire, explosion, catastrophic weather event or natural disaster at its primary manufacturing and distribution locations, and agrees to review such plan with HMS upon request.
Liability Limitations; Mitigation.
Except for damages arising out of (i) either Partys [***] (ii) a Partys indemnification obligations under this Agreement, or (iii) a Partys or any Purchasers breach of Section 11.0 (Confidentiality); the aggregate liability of either party to the other with respect to this Agreement shall not exceed [***] dollars ($[***]). Neither Party nor any Purchaser shall be liable to the other for the others [***].
Any reasonable costs and expenses incurred by HMS and any Purchasers to mitigate or lessen any damages or harm caused by any failure of Products or Services to comply with the warranties referenced in this Agreement shall be considered direct damages.
Vendor Indemnification. Vendor agrees to and does defend, indemnify and hold harmless HMS and each Purchaser, their respective Affiliates, successors, assigns, directors, officers, agents and employees (HMS Indemnitees) from and against any and all liabilities, demands, losses, damages, costs, expenses, fines, amounts paid in settlements or judgments, and all other reasonable expenses and costs incident thereto, including reasonable attorneys fees (collectively referred to as Damages) arising out of or resulting from: (i) any claim, lawsuit, investigation, proceeding, regulatory action, or other cause of action, arising out of or in connection with Products or Services or the possession and/or use of the Products and/or Services, (Injury); (ii) the breach or alleged breach by Vendor of the representations, warranties or covenants contained in this Agreement or in materials furnished by Vendor or any Vendor Personnel; or (iii) any infringement, misappropriation or alleged infringement or misappropriation of any patent,
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|trademark, copyright, trade secret or other intellectual property right resulting from the purchase of Products and/or Purchasers possession and use thereof, as well as from receipt of any Services provided under this Agreement.|
Comparative Fault. If an Injury is caused by the negligence or fault of both Vendor (and/or any Vendor Personnel), on the one hand, and any of the HMS Indemnitees, on the other hand, the apportionment of said Damages shall be shared between Vendor and such HMS Indemnitees based upon the comparative degree of each others negligence or fault, and each shall be responsible for its own defense and costs, including but not limited to the costs of defense, attorneys fees, witnesses fees and expenses incident thereto.
Indemnification Process. If any demand or claim is made or suit is commenced against an HMS Indemnitee for which Vendor has an indemnity obligation under this Section 10.0, written notice of such shall be provided to Vendor, Vendor shall undertake the defense of any such suit, and such HMS Indemnitee shall cooperate with Vendor in the defense of the demand, claim or suit to whatever reasonable extent Vendor requires and at Vendors sole expense. Vendor shall have the right to compromise such claim at Vendors expense for the benefit of such HMS Indemnitee, except that prior written consent of the HMS Indemnitee is required if such compromise would seek to obligate a HMS Indemnitee in any respect. Notwithstanding the foregoing, if Vendor fails to assume its obligation to defend, a HMS Indemnitee may do so to protect its interest and seek reimbursement from Vendor.
Reimbursement of Costs for Third Party Litigation. With respect to any litigation involving only one of the Parties or any of its Affiliates (the Litigating Party), if any subpoena or other legally binding request related to such litigation is served on the other Party (or on any Purchaser if Vendor or any of its Affiliates is the Litigating Party) (the Subpoenaed Party) requesting copies of documents maintained by the Subpoenaed Party, the Litigating Party shall reimburse the Subpoenaed Party for its out-of-pocket costs associated with compliance with such request, including reasonable attorneys fees.
Confidentiality Obligations. During the Term and surviving its expiration or termination, both Parties will regard and preserve as confidential and not disclose publicly or to any third party (other than their respective Affiliates) the Confidential Information of the other Party, its Affiliates or any Purchaser. Subject to Section 11.2, each Party agrees to use the Confidential Information of the other Party, its Affiliates or any Purchaser solely for purposes of performing its obligations under this Agreement. All Confidential Information shall remain the property of the Disclosing Party.
Permitted Uses of Confidential Information. Notwithstanding the definition of Confidential Information or any provision to the contrary contained in this
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|Agreement: [***]. Any confidentiality agreement required by this Section 11.2 shall have terms that are at least as strict as those contained in Section 11.1 and this Section 11.2.|
HIPAA Requirements. Vendor acknowledges that many Purchasers are covered entities and/or business associates as those terms are defined at 45 C.F.R. § 160.103. To the extent applicable to this Agreement, Vendor agrees to comply with the Health Information Technology for Economic and Clinical Health Act of 2009 (the HITECH Act), the Administrative Simplification Provisions of the Health Insurance Portability and Accountability Act of 1996, as codified at 42 U.S.C. § 1320d et seq. (HIPAA) and any current and future regulations promulgated under either the HITECH Act or HIPAA, including without limitation the federal privacy regulations contained in 45 C.F.R. Parts 160 and 164 (the Federal Privacy Regulations), the federal security standards contained in 45 C.F.R. Parts 160 and 164 (the Federal Security Regulations), and the federal standards for electronic transactions contained in 45 C.F.R. Parts 160 and 162 (the Federal Electronic Transactions Regulations), all as may be amended and/or supplemented from time to time, all collectively referred to herein as the HIPAA Requirements. Vendor shall not use or further disclose any Protected Health Information, including Electronic Protected Health Information (as such terms are defined in the HIPAA Requirements) other than as permitted by the HIPAA Requirements and the terms of this Agreement. Vendor will make its internal practices, books, and records relating to the use and disclosure of Protected Health Information available to the Secretary of Health and Human Services (HHS) to the extent required for determining compliance with the HIPAA Requirements. Vendor agrees to enter into any further agreements as necessary to facilitate compliance with the HIPAA Requirements.
Data Use. Vendor shall not distribute, sell, market or commercialize data (whether or not deemed Confidential Information) made available by HMS or Purchasers or related to purchases by Purchasers, create derivative products or applications based on such data, or otherwise use such data in any manner not expressly permitted in this Agreement or permitted in writing by the Purchaser.
Vendor shall maintain, at its own expense and in the minimum amounts specified in Exhibit B, commercial general liability insurance (including coverages for product liability, completed operations, contractual liability and personal injury liability) on an occurrence or claims-made basis covering Vendor for claims, lawsuits or damages arising out of its performance under this Agreement, and any negligent or otherwise wrongful acts or omissions by Vendor or any Vendor Personnel, with HMS listed as an additional insured. If such coverage is provided on a claims-made basis, such insurance shall continue throughout the Term, and upon the termination or expiration of this Agreement, or the expiration or cancellation of the insurance, Vendor shall: (i) renew the existing coverage, maintaining the expiring policys retroactive date; or (ii) purchase or arrange for the purchase of either an extended reporting endorsement (Tail coverage) from the prior
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insurer, or Prior Acts coverage from the subsequent insurer, with a retroactive date on or prior to the Effective Date and, in either event, for a period of [***] following the termination or expiration of this Agreement. Vendor shall also maintain Automobile Liability insurance with limits of [***] dollars ($[***]) per accident, Workers Compensation with statutory limits as applicable, and Employers Liability insurance with limits of [***] dollars ($[***]). Vendor shall provide HMS with a copy of all certificates of insurance evidencing the existence of all coverage required under this Agreement upon request. Vendor shall provide HMS with no fewer than thirty (30) days prior written notice of a material reduction in the liability policies of Vendor. For avoidance of doubt, any insufficiency of Vendors insurance limits or denial of coverage by Vendors insurance carriers shall in no way limit Vendors liability for damages under this Agreement.
Termination of Agreement
Termination with Cause. In addition to any other termination rights set forth in this Agreement, Vendor and HMS each shall have the right to terminate this Agreement in its entirety or with respect to certain Products or Services for Cause, which is not cured within [***] days following receipt of written notice thereof specifying the Cause. Vendor and any Purchaser each shall have the right to terminate any of their respective obligations under this Agreement (or Purchaser-Specific Agreement, if any) as to the other for Cause, which is not cured within [***] days following receipt of written notice thereof specifying the Cause.
Termination without Cause. HMS shall have the right to terminate this Agreement in its entirety or with respect to certain Products or Services, without Cause and without any liability to Vendor for such termination, by providing at least [***] prior written notice to Vendor.
Change of Control. Except in the event of a significant organizational transaction (as defined in Section 19.3), HMS also shall have the right to terminate this Agreement in its entirety or with respect to certain Products or Services, by providing [***] days prior written notice to Vendor, upon the transfer, directly or indirectly, by sale, merger or otherwise, of: (i) substantially all of the assets of Vendor or its ultimate parent or any permitted assignee (upon assignment to such assignee); or (ii) fifty percent (50%) or more of the ownership interest of Vendor, its ultimate parent or any such permitted assignee.
Remedies. Subject to the provisions of Section 19.8, any termination by either Party, whether for breach or otherwise, shall be without prejudice to any claims for damages or other rights against the other Party, or between Vendor and any Purchaser, that preceded termination. No specific remedy set forth in this Agreement shall be in lieu of any other remedy to which a Party or any Purchaser may be entitled pursuant to this Agreement or otherwise at law or equity.
Effect of Expiration or Termination. Notwithstanding anything in this Agreement to the contrary, in the event that this Agreement expires or is terminated without a replacement agreement for Products and Services between the Parties, and any
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|separate agreement entered into directly by a Facility with Vendor remains in effect, the provisions of this Agreement shall survive and be deemed incorporated into such separate agreement, and shall remain in full force and effect until: (i) such Facility ceases being an Affiliate of HMS, or (ii) such separate agreement is terminated or expires.|
Transition. The Parties agree that, upon request of HMS, the Expiration Date shall be extended for a period of [***] days if HMS, in its reasonable discretion, deems such extension necessary to assist Purchasers with a smooth transition from purchasing under this Agreement to purchasing under any other agreement. Notwithstanding the foregoing, no purchasing requirements or compliance level commitments shall be applicable during this transition period.
Effect of Expiration or Termination. Notwithstanding anything in this Agreement to the contrary, in the event that this Agreement expires or is terminated without a replacement agreement for Services between the Parties, and any separate agreement entered into directly by a Purchaser with Vendor remains in effect, the provisions of this Agreement shall survive and be deemed incorporated into such separate agreement, and shall remain in full force and effect until: (i) such Purchaser ceases being an Affiliate of HMS, or (ii) such separate agreement is terminated or expires.
Compliance Requirements; Books and Records; Credentialing;
Compliance with Applicable Law; Vendor Licensure. Each Party represents and warrants to the other Party (and in the case of Vendor, to the Purchasers as well) that each of its and its Affiliates performance under this Agreement will at all times comply with all applicable federal, state and local laws, ordinances and regulations. Vendor represents and warrants to HMS and Purchasers that each of Vendor and its Affiliates has obtained and will obtain and maintain during the Term all licenses, permits and approvals required by applicable laws and regulations for each of its and its Affiliates performance under this Agreement.
Child Labor and Human Trafficking. Vendor represents and warrants to HMS and Purchasers that Vendor, any Subcontractors, and its manufacturers of Products prohibit any form of human trafficking, child labor or other exploitation of children, in compliance with applicable labor and employment laws and standards, including the International Labour Organizations Minimum Age Convention (No. 138). Vendor further represents and warrants that it undertakes periodic inspections or reviews of any Subcontractors and manufacturers of Products to ensure compliance with the foregoing and disqualifies such Subcontractors and manufacturers determined to be non-compliant.
Conflict Minerals. Vendor agrees that it will comply with U.S. Securities and Exchange Commission disclosure rules and other regulations regarding conflict minerals, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and that it will undertake periodic inspections of any Subcontractors and manufacturers of Products to ensure compliance with the foregoing.
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Access to Vendor Records.
To the extent the requirements of 42 C.F.R. § 420.300 et seq. are applicable to the transactions contemplated by this Agreement, Vendor shall make available to the Secretary of HHS, the Comptroller General of the Government Accountability Office (GAO) and their authorized representatives, all contracts, books, documents and records relating to the nature and extent of charges under this Agreement until the expiration of [***] after Products and Services are furnished under this Agreement if Products or Services are of the type reimbursable under Medicare or any other government healthcare program.
If Vendor subcontracts with an organization related to Vendor to fulfill Vendors obligations under this Agreement, and if said subcontract is worth [***] dollars ($[***]) or more over a [***] period, Vendor shall ensure that such subcontract contains a clause substantially identical to Section 14.4.1, which permits access by the HHS, GAO and their representatives to the related organizations books and records.
Discount Laws and Regulations.
Vendor agrees to comply with 42 U.S.C. § 1320a-7b(b)(3)(A) and the safe harbor regulations regarding discounts or other reductions in price set forth at 42 C.F.R. § 1001.952(h).
Vendor shall include language in each invoice sufficient to advise Purchasers of whether or not such invoice reflects a Rebate or other reduction in price, or is net of any discounts, applicable to the Products and/or Services purchased.
When Vendor sends Purchasers invoices listing charges that include a capital cost component (e.g., equipment that must be either capitalized or reported as lease expense) and/or an operating cost component (e.g., services and/or supplies), Vendor shall separately list the prices, shipping fees and taxes applicable to equipment, supplies and services. The price for all capital component items must be reported on the invoice at the net price, with no discount or Rebate to be received separately or at a later point in time.
Government Contractor Requirements. HMS is not a federal government contractor; however, some of the Purchasers that will purchase from Vendor under this Agreement may be federal government contractors or subcontractors. If applicable, Vendor shall abide by the requirements of 41 C.F.R. §§ 60-1.4(a), 60300.5(a) and 60-741.5(a). These regulations prohibit discrimination against qualified individuals based on their status as protected veterans or individuals with
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|disabilities, and prohibit discrimination against all individuals based on their race, color, religion, sex, sexual orientation, gender identity or national origin. Moreover, these regulations require that covered prime contractors and subcontractors take affirmative action to employ and advance in employment individuals without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, protected veteran status or disability. Vendor may also be subject to the Executive Order 13496 and implementing regulations at 29 C.F.R. Part 471, Appendix A to Subpart A.|
Right to Audit Vendor. HMS shall have the right to review Vendors, documents and records (whether in hard copy, electronic or other form) that pertain directly to the accounts of HMS, Purchasers, and their Affiliates, Vendors compliance with the terms of this Agreement, the amounts payable to Vendor under this Agreement, and Rebates payable by Vendor, if applicable for the Products and Services provided by Vendor hereunder. HMS shall exercise such right only during normal business hours and with reasonable advance notice to Vendor. The audit may be conducted by employees of HMS or its Affiliates (including contract employees) or by an external auditing firm selected by HMS.
Methodology. If applicable, the methodology for such audit may include sampling and extrapolation in accordance with standard statistical estimations. In connection with any such audit, Vendor shall provide an aging report, as well as a report containing the following data fields: COID, GLN, Customer Number, Facility/Customer Name, Street Address, City, State, Invoice Date, Invoice Number, PO Number, HMS Contract Number, Contract Name and Description, /Product/Item Number, Product/Item Description, Unit of Measure, Quantity Shipped, Unit Price, Extended Price, UOM Conversion Factor and UOM Type. HMS reserves the right to reasonably request, and Vendor agrees to provide, any additional data pertinent to the audit. At the request of HMS, the requested records shall be provided to HMS in electronic form.
Costs. The cost of the audit, including the cost of the auditors, shall be paid by HMS. HMS shall have no obligation to pay any costs incurred by Vendor or Vendor Personnel in cooperating with HMS in such audit.
Executive Summary and Payments. Upon completion of the audit, Vendor will be notified in writing of the results (an Executive Summary). If no response to the Executive Summary is received from Vendor within [***] days following its issuance, the Executive Summary shall be deemed accepted by Vendor, and HMS will issue an invoice to Vendor for any amounts due. Vendor shall pay HMS for proper application and allocation, the amount of any overcharges and unapplied credits (as to Purchasers) and underpayments (as to HMS) determined by the audit within [***] days from
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|receipt of an invoice from HMS; Vendor shall not use the overcharges or underpayments as a set-off in any fashion. Payment by Purchasers of negotiated prices for Products and/or Services that are less than those listed in Exhibit A shall not be considered to be undercharges and shall not be applied to reduce the amount of any overcharges by Vendor. The unpaid amount of any overcharges or underpayments shall be subject to a late payment fee as stated in Section 3.4.|
Disputes; Settlement Exclusions. The Parties agree to use good faith efforts to resolve any dispute that may arise from any Executive Summary issued pursuant to Section 14.7.4. If HMS and Vendor enter into any settlement with respect to an audit conducted hereunder, each Purchaser shall have the right to be excluded from such settlement, provided that the pro rata portion of such settlement paid by Vendor that is allocable to such Purchaser is refunded by HMS.
Validation Reviews. Section 14.7 shall not be construed in any way to preclude or otherwise limit HMS or any Purchasers from conducting limited-in-scope reviews of charges by Vendor for purchases by such Purchasers under this Agreement and of Rebates, if applicable per Exhibit A, paid in connection with those purchases, to validate the accuracy thereof. HMS shall also have the right, at any time, to request from Vendor a copy of its list of Facilities to validate the accuracy thereof. Vendor shall correct any inaccuracies discovered by the foregoing reviews. For clarification purposes, such reviews will not be conducted at Vendors premises or offices.
Warranty of Non-exclusion. Vendor represents and warrants to HMS, Purchasers and their Affiliates that Vendor and its directors, officers, and key employees: (i) are not currently excluded, debarred, or otherwise ineligible to participate in the federal health care programs as defined in 42 U.S.C. § 1320a-7b(f) or any state healthcare program (collectively, the Healthcare Programs); (ii) have not been convicted of a criminal offense related to the provision of healthcare items or services but have not yet been excluded, debarred, or otherwise declared ineligible to participate in the Healthcare Programs; and (iii) are not under investigation or otherwise aware of any circumstances which may result in Vendor being excluded from participation in the Healthcare Programs (collectively, the Warranty of Non-exclusion). Vendors representations and warranties underlying the Warranty of Non-exclusion shall be ongoing during the Term, and Vendor shall immediately notify HMS of any change in the status of the representations and warranties set forth in this Section 14.9. Any breach of this Section 14.9 shall give HMS the right to terminate this Agreement immediately.
Background Checks. Vendor agrees to perform background checks on any Vendor Personnel who have access to, or may have access to, any Purchaser facility for the purpose of delivering, maintaining, servicing, or removing equipment and/or Products or participating in surgical procedures in which the Products are used, or for the purpose of providing Services, to ensure such Vendor Personnel: (i) are not
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|then-currently excluded, debarred or otherwise ineligible to participate in any Healthcare Program (as defined in Section 14.9); (ii) have not been convicted of a criminal offense related to the provision of healthcare items, products or services; (iii) have not been convicted of any felony or are not then-currently charged with any felony; (iv) as discovered through any background check or based upon Vendors knowledge, have not been terminated from employment by any employer or contractor for theft, misappropriation of property, or any other potentially illegal or unethical acts; and (v) have the appropriate I-9 documentation. Vendor shall not use any Vendor Personnel that does not have the appropriate I-9 documentation to provide Products and/or Services to any Purchaser under this Agreement. Vendor shall obtain a Purchasers prior written consent before using any Vendor Personnel failing to meet any of the criteria in (i) (iv) above to provide Products and/or Services to any Purchaser under this Agreement or permitting any such Vendor Personnel to have access to any Purchaser facility. Any breach of this Section 14.10 shall give HMS the right to terminate this Agreement immediately.|
Credentialing. Vendor represents and warrants the following to HMS and Purchasers:
Purchaser Credentialing Requirements. Vendor Personnel shall be in compliance with such Purchasers credentialing, approval and other policies required to visit the premises of a Purchaser, as applicable, including paying all related fees and submitting all information required by Purchaser and/or Purchasers credentialing verification organization in the required format and maintaining the accuracy of such information during the Term, which may include: (i) completed applications including scope of services requested; (ii) information required to conduct background investigations, including social security number(s); (iii) letters of compliance; (iv) current licensure and applicable certifications; (v) health requirements verification; (vi) certificate(s) of insurance; (vii) proof of Purchaser educational requirements completion; (viii) Vendors job description; (ix) proof of HIPAA training; and (x) proof of operating room protocols training;
Purchaser Network Access Requirements. As a condition precedent to any Vendor Personnel gaining or utilizing access to any Purchasers information technology systems or networks if required to perform Services, Vendor shall (i) execute, and ensure that all Vendor Personnel providing Services utilizing such access execute, the applicable network access agreement(s), in the form(s) provided by such Purchaser; and (ii) submit all information required by such Purchaser, including the information set forth in Section 14.11.1 hereof; and
List of Vendor Personnel. Vendor shall provide to each Purchaser, upon request in the requested format, a list of Vendor Personnel providing Services on the premises of such Purchaser, and shall maintain the accuracy of such list of Vendor Personnel during the Term.
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Potential Conflicts. Vendor shall notify HMS and any applicable Facilities of any potential conflict of interest between Vendor Personnel selling Products and any such Facilities or their employees, representatives or independent contractors (including physicians) possibly involved in the purchasing decision process.
No Remuneration. Vendor represents and warrants to HMS and Purchasers that Vendor has not made, is not obligated to make, and will not make any payment or provide any remuneration or items of intrinsic value to any third party or to HMS, Purchasers or their directors, officers or employees in return for HMS entering into this Agreement or for any business transacted under this Agreement (excluding Rebates).
Industry Code of Conduct. Vendor represents and warrants that, in performing Vendors obligations under this Agreement, it and Vendor Personnel shall comply with a code of conduct applicable to Vendors industry.
Vendor Relations Policy. Vendor acknowledges that HMS has a Vendor Relations Policy relating to ethics and compliance issues between suppliers and HMS, and that it can access such policy through the internet at:
If Vendor becomes aware of any action by any HMS employee or representative that is not consistent with the provisions of Section 14.3 or of the Vendor Relations Policy referenced above, Vendor shall advise HMSs Compliance Officer (either by phone to [***], or in writing to HMSs principal place of business) or by calling Ethics Line at [***].
Physician Ownership Interests and Compensation Arrangements.
Physician Ownership Interests. Vendor represents and warrants that it is either (a) a publicly traded company with at least $[***] in stockholders equity at the end of its most recent fiscal year or on average during the previous three (3) fiscal years, or (b) no Physician or Immediate Family Member of a Physician has an Ownership Interest in Vendor or a business that is affiliated with Vendor unless the identity of such Physician has been previously disclosed in Vendors Certification (defined in Section 14.16.3 below). For purposes of this Section 14.16 only, a business that is considered affiliated with Vendor includes, but is not limited to, a parent entity, subsidiary, or other entity controlling, controlled by, or under common control with Vendor, with control meaning the direct or indirect power to govern the management and policies of the entity or the power to approve the entitys transactions through a management agreement or otherwise.
Physician Compensation Arrangements. Vendor represents and warrants that, with respect to any and all current and future compensation arrangements between Vendor and a Physician, an Immediate Family
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|Member of a Physician, and any entity in which a Physician or an Immediate Family Member of a Physician has an ownership interest, such compensation arrangements:|
constitute compensation consistent with fair market value for commercially reasonable and legitimate services under a signed written agreement;
do not vary with, or otherwise take into account, the volume or value of referrals or other business generated by the Physician for or with any hospital, ASC or health care facility, regardless of whether said compensation otherwise satisfies the special rules set forth in 42 C.F.R § 411.354(d)(2) or (d)(3); and
if in the form of consulting, product development, royalty agreement or similar arrangements, expressly exclude from the compensation or royalty payment any revenues Vendor receives by virtue of the use of any product, item or service in question by the following: (i) the Physician or any Immediate Family Member of a Physician; (ii) any practice group with which the Physician or any Immediate Family Member of a Physician is affiliated; (iii) any member, employee or consultant of a practice group of which the Physician or any Immediate Family Member of a Physician is affiliated; (iv) any hospital, ASC or health care facility with which the Physician is affiliated or has medical staff privileges; and (v) any individual or entity for which the Physician has any actual or potential ability to influence procurement decisions for goods, items or services.
Certification, Notice of Changes and Termination. Vendor has submitted a Physician Ownership & Compensation Certification (Certification) to HMS and represents and warrants to the continued accuracy of the information provided therein. Vendor will submit a renewed and updated Certification upon request of HMS. Vendor will also provide HMS with [***] days advance written notice prior to entering into any transaction inconsistent with the representations and warranties of Sections 14.16.1 and 14.16.2. Upon receipt of any such notice, HMS may immediately terminate this Agreement, without penalty or prejudice, by written notice to Vendor.
Definitions for Section 14.16. For purposes of this Section 14.16, the following terms have the following meanings. Physician means any person who is a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, or chiropractor. Immediate Family Member of a person means that persons husband or wife; birth or adoptive parent, child, or sibling;
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|stepparent, stepchild, stepbrother, or stepsister; father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law; grandparent or grandchild; grandparents or grandchilds spouse. Ownership Interest means any direct or indirect ownership or investment interest whether through equity, debt or other means, including but not limited to stock, stock options, warrants, partnership shares, limited liability company memberships, as well as loans and bonds.|
Warranty of Non-Sanction. Vendor represents and warrants that neither Vendor, nor its directors, officers, employees, agents or subcontractors, is (i) a specially designated national or blocked person under U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury; (ii) located, organized, or resident in Iran, Sudan, Syria, Cuba, North Korea or the Crimean region of Ukraine; or (iii) directly or indirectly owned or controlled by or acting on behalf of a person described in (i) or (ii) above.
Merger of Terms
Entire Agreement; Prior Agreement. This Agreement constitutes the entire agreement between the Parties and, as of the Effective Date, this Agreement replaces any existing agreement between HMS and Vendor for purchases of products and services comparable to the Products and/or Services (each such existing agreement, a Prior Agreement). This Agreement shall exclusively govern the purchases of Products and/or Services by Purchasers that occur during the Term. The provisions of any Prior Agreement shall continue to apply to the products purchased under the Prior Agreement prior to the Effective Date of this Agreement, except that HMS shall have the right, in its sole discretion, to apply the Audit Rights provisions set forth in the Prior Agreement or this Agreement to such purchases as applicable per Exhibit A.
Other Documents. The terms of any purchase order issued by a Purchaser shall not apply to purchases of Products and/or Services hereunder, except as necessary to designate specific Products and/or Services, quantities, /delivery dates, and other similar terms that may vary from order to order; the terms of this Agreement, to the extent applicable, shall be deemed incorporated into such purchase orders. The terms and conditions contained in any acceptance, invoice, bill of lading, or other documents supplied by Vendor are expressly rejected and superseded by this Agreement and shall not be included in any contract with a Purchaser. No commitment form, standardization incentive program acknowledgement, or any other document shall be required by Vendor to be signed by a Purchaser to purchase Products and/or Services under this Agreement, unless expressly stated in this Agreement or later approved in writing by HMS. Any change to such documents that are attached to this Agreement shall first be approved in writing by both Parties. If this Agreement requires Facilities to submit an electronic letter of commitment (eLOC), Vendor shall accept or reject each eLOC within ten (10) calendar days of each Facilitys submission to HMSs web-based eLOC portal, and eLOCs that have not been rejected by Vendor within [***] days will be deemed accepted.
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Conflicts. The terms of the body of this Agreement shall control in the event of any conflict between these terms and any Exhibit, Purchaser-Specific Agreement, and Vendor Product warranty (however provided), unless such document expressly states otherwise and has been approved in writing by HMS
Modifications of Terms
Amendments. This Agreement, as executed and approved, may only be modified by written amendment signed by the Parties expressly stating their intent to modify the terms of this Agreement, except with respect to transition period extension as set forth in Section 13.6 (Transition) and catalog number revisions as set forth in Section 16.2 (Informal Exhibit A Revisions).
Informal Exhibit A Revisions. The Parties may informally amend Exhibit A solely to revise catalog numbers for Products (Exhibit A Revisions) by delivery of desired Exhibit A Revisions from one Party to the other Party and a return delivery of such other Partys consent to such Exhibit A Revisions, to become effective as agreed upon by the Parties.
Minority and Women Owned Business Enterprises
Contracting with MWBEs. In conjunction with HMSs efforts to involve MWBEs in its contracting process, HMS may enter into purchasing agreements with MWBEs that will enable Facilities to purchase supplies and/or equipment comparable to the Products under this Agreement. In such event, notwithstanding any other terms of this Agreement to the contrary, such agreement will not be deemed to be a breach of this Agreement by HMS, nor will any purchases by Facilities or their Affiliates from MWBEs (i) be deemed to be a breach of this Agreement or any Purchaser-Specific Agreement or (ii) count against any purchasing requirements of a particular tier or any other compliance level commitments.
Reporting of MWBE Activity. Vendor shall identify and report in writing to HMS at least semi-annually all MWBE activities in which it participates, specifically identifying such activities and purchases relating to Products and Services obtained under this Agreement (MWBE Report). The MWBE Report shall include the following information for each applicable reporting period: (i) a list of the each of Vendors MWBE Subcontractors (if any); (ii) their specific MWBE designation (as defined in Section 1.19); (iii) any applicable HMS agreement number(s); (iv) the associated products or services provided; and (v) Vendors direct and indirect spend with MWBEs individually and in the aggregate.
Environmental Disclosures; Reprocessing
Environmental Disclosures. Vendor acknowledges HMSs commitment to sourcing environmentally preferable products and Vendor shall, upon request of and in the format requested by HMS, submit written responses to HMS representing and warranting to the environmental attributes of Products and/or the Product
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|manufacturing process. In the event HMS determines that Vendors responses are materially inaccurate with respect to one or more Products, HMS and Facilities shall have the right to contract with alternative sources for the affected Product(s).|
Reprocessing. A Purchaser or any of its Affiliates may, if applicable, contract with Vendor or a third party to reprocess Products or products comparable to the Products.
Publicity. No advertisement or public announcement of the existence of this Agreement or the relationship created by this Agreement may be made by either Party, unless such Party is required by law to do so, or the Parties agree to do so. In such event, the text of any proposed announcement should be first submitted in writing to the other Party in accordance with Exhibit B (Vendor contact information).
Vendor Name and Logos. Vendor authorizes HMS to use Vendors names and logos, as provided by Vendor to HMS, on HMSs proprietary public and non-public websites and other HMS publications for Facilities.
Assignment. Neither Party shall assign this Agreement, in whole or in part, without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Consent by either Party to such assignment in one instance shall not constitute consent by the Party to any other assignment. Any assignment without such prior written consent shall be void and have no effect. Notwithstanding the foregoing, the following shall not constitute an assignment for purposes of this Section 19.3: (i) the transfer, in whole or in part, of a Partys rights and obligations under this Agreement to an Affiliate of the transferring Party; provided such Affiliate shall possess the financial and legal wherewithal sufficient to fulfill the obligations of the transferring Party under this Agreement; or (ii) the transfer, in whole or in part, of a Partys rights and obligations under this Agreement in the event of a significant organizational transaction. For purposes of this Section 19.3, a significant organizational transaction means (a) a transaction such as, without limitation, a spin-off or sale of assets of a business, provided that the entity to which this Agreement is transferred was, in whole or in part, an Affiliate of the transferring Party immediately prior to such significant organizational transaction; or (b) an internal reorganization that results in the transferring Party being organized in one or more different legal entities or any other corporate form(s), whether through conversion, merger, or otherwise. Subject to the foregoing, all terms, conditions, covenants and agreements contained in this Agreement shall inure to the benefit of and be binding upon any successor and any permitted assignees of the respective Parties.
Subcontractors. Vendor may use Subcontractors in the performance of Vendors obligations under this Agreement if the following additional conditions are met: (i) any Subcontractor shall satisfy the background check requirements set forth in
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|Section 14.10; and (ii) any Subcontractor must have signed Vendors confidentiality agreement and/or business associate agreement (if applicable), in each case with terms at least as restrictive as those contained in this Agreement, prior to any involvement in the performance of Vendors obligations under this Agreement. Vendor guarantees the proper classification of each Subcontractor and shall remain responsible for the full compliance by each Subcontractor of all duties and obligations that would otherwise apply to Vendor absent the use of such Subcontractor. Neither HMS nor any Purchaser shall have to assert or exhaust any remedies against any Subcontractor before asserting against Vendor or recovering from Vendor any Damages arising under any Injury or other claim, or exercising any indemnification or other rights under this Agreement.|
Independent Contractor Relationship. The Parties agree that Vendor is an independent contractor and that this Agreement does not create any partnership, agency, employment, or joint venture relationship, or any right of either Party or its agents or employees to bind or obligate the other Party to any legal or financial obligation.
Governing Law and Venue.
Between the Parties. As between the Parties, this Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee, without regard to its principles of conflict of laws.
Between Vendor and a Purchaser. As between Vendor and any one Purchaser, this Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the state in which such Purchaser is located (or, if as to multiple Affiliate Purchasers, the state of Tennessee, without regard to its principles of conflict of laws.
Severability. If any provision of this Agreement should for any reason be held invalid, unenforceable or contrary to public policy, the remainder of the Agreement shall remain in full force and effect notwithstanding.
Survival of Terms; Beneficiaries. Any terms in this Agreement which by their nature must survive after the Term to give their intended effect shall be deemed to survive termination or expiration of this Agreement. Further, the representations and warranties provided in this Agreement shall run to HMS, Purchaser and their successors and permitted assigns, and their applicability during the Term shall survive the termination or expiration of this Agreement.
Waivers. The waiver of any provision of this Agreement or any right, power or remedy under this Agreement shall not be effective unless made in writing and signed by both Parties. No failure or delay by either Party in exercising any right, power or remedy with respect to any of its rights under this Agreement shall operate as a waiver thereof.
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Headings; Interpretations. The descriptive headings of the sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any provision hereof. In this Agreement, unless the context otherwise requires: (i) the term days means calendar days; and (ii) the term including shall mean, including, without limitation.
Notices. Notices under this Agreement shall all be in writing, shall be effective upon receipt and shall be sent to the designated recipients listed in Exhibit B by any of the following methods: (i) e-mail with return e-mail acknowledging receipt; (ii) United States Postal Service certified or registered mail with return receipt showing receipt; (iii) courier delivery service with proof of delivery; or (iv) personal delivery. Either Party may change the name and address of any of its designated recipients of notices by giving notice as provided for in this Agreement.
Counterparts; Execution. This Agreement and any amendments hereto may be executed by the Parties hereto by paper or electronic means, and individually or in any combination, in one or more counterparts, each of which shall be an original and all of which shall together constitute one and the same agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties indicate their acceptance of the terms of this Agreement by the signatures of their duly authorized representatives.
HCA Management Services, L.P.,
by HPG Enterprises, LLC, its general partner
|Vendor: Outset Medical, Inc|
|HMS Signee: /s/ Fred Keller||Vendor Signee: /s/ Jamie Lewis|
|HMS Signee Name: Fred Keller||Vendor Signee Name: Jamie Lewis|
|HMS Signee Title: VP||Vendor Signee Title: SVP, Sales|
|HMS Signature Date: 4/30/2020||Vendor Signature Date: 5/1/2020|
HCA Management Services, L.P.,
by HPG Enterprises, LLC, its general partner
HMS Signee: /s/ Ryan Compton
HMS Signee Name: Ryan Compton
HMS Signee Title: AVP
HMS Signature Date: 4/30/2020
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The following Exhibits are part of the Agreement and are incorporated by reference.
Products and Services with Prices
Specific Purchasing Terms
Software as a Service Terms and Conditions Exhibit
Component Interoperability Exhibit
Technology Enabled Equipment Exhibit
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