EXHIBIT 10.28

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *****. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

 

MANUFACTURING AND SUPPLY

AGREEMENT

 

[AMO LOGO APPEARS HERE]

 

&

 

Nicholas Piramal India Limited

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

1.       DEFINITIONS    1 2.       MANUFACTURE AND SALE OF PRODUCTS    4    
2.1.   Manufacture of Products .    4     2.2.   Manufacturing Standards.    4  
  2.3.   AMO Engineering Change Orders    4     2.4.   Supplier Engineering
Change Proposals    5     2.5.   Tooling and Equipment    5     2.6.   Location
of Supplier Facilities    6     2.7.   Vendors.    6     2.8.   Discontinued
Material    6     2.9   Trade Mark    5 3.       ORDERS, MATERIAL PROCUREMENT
AND FORECASTS    6     3.1.   Purchase Orders    6     3.2.   Acceptance of
Purchase Orders    6     3.3.   Delivery Address and Shipment Date Changes    6
    3.4.   Order Quantity Increases/Decrease    7     3.5.   Configuration Mix
Changes    7     3.6.   Cancellation of Purchase Orders    8     3.7.  
Cancellation Liability    8     3.8.   Material Procurement    9     3.9.  
Forecasts    10 4.       TESTING, RECORDS AND INSPECTION    10     4.1.  
Quality Control Tests    10     4.2.   Root Cause Analysis    10     4.3.  
Records    10     4.4.   Inspection of Facilities and Records    10     4.5.  
Right of Rejection and Revocation    11 5.       SHIPMENT OF PRODUCTS    11    
5.1.   Shipment    11     5.2.   On Time Shipment    11     5.3.   Early
Shipment    11     5.4.   Delayed Shipment    11 6.       PRICE AND TERMS OF
PAYMENT    12     6.1.   Price    12     6.2.   Cost Reductions    12     6.3.  
Meeting Competition    12     6.4   Most Favored Customer    11     6.5.  
Invoices    13     6.6.   Payment    13

 

i

--------------------------------------------------------------------------------

    6.7    Exchange Rate Fluctuations    11 7.        WARRANTY AND TECHNICAL
SUPPORT    13     7.1.    Product Warranty    13     7.2.    Inspection
Period/Defective Product    14     7.3.    Replacement of Defective Products   
14     7.4    RMA Procedure    12     7.5.    Root Cause Analysis    14     7.6.
   Technical Support    15 8.        TERM AND TERMINATION    15     8.1.    Term
   13     8.2.    Termination for Breach    15     8.3.    Termination for
Insolvency    15     8.4.    Effect of Expiration or Termination    15     8.5.
   Right to Purchase    15     8.6.    Duty to Manufacture    16     8.7.   
Return of Confidential Information    16     8.8.    Survival    16 9.       
SUPPLIER REPRESENTATIONS AND WARRANTIES    16     9.1.    General
Representations    16     9.2.    Quality Management System Certifications.   
16     9.3.    Legal and Regulatory Compliance.    16     9.4    AMO    16 10.  
     REGULATORY    17     10.1.    Government Approvals    17     10.2.   
Regulatory Inquires    17     10.3.    Regulatory Inspections    17     10.4.   
Product Complaints / Reports    17     10.5.    Recalls.    15 11.       
PROPRIETARY RIGHTS    18     11.1.    AMO Technology    18     11.2.   
Assistance    18     11.3.    Supplier Technology    18 12.       
CONFIDENTIALITY    19     12.1.    Confidential Information.    19     12.2.   
Restrictions on Use and Disclosure of Confidential Information    19     12.3.
   Exclusions    19 13.        INDEMNIFICATION    20     13.1.    General
Indemnity by the Supplier    20     13.2.    General Indemnity by AMO    20    
13.3    Inetellectual Property Indemnity by AMO    18

 

ii

--------------------------------------------------------------------------------

    13.4    Intellectual Property Indemnity by Supplier    18 14.        GENERAL
PROVISIONS    21     14.1.    Integration / Modification    21     14.2.    Use
of Form Purchase Orders, Invoices and Other Documents    21     14.3.   
Relationship Between the Parties    21     14.4.    Insurance    22     14.5.   
Non-Waiver    22     14.6.    Remedies    22     14.7.    Assignment    19    
14.8.    No Third Party Beneficiaries.    22     14.9.    Severability    23    
14.10.    Notices    23     14.11.    Force Majeure.    23     14.12.   
Confidential Relationship.    24     14.13.    Choice of Law, Forum and
Jurisdiction    24     14.14.    Attorney Fees    21     14.15.    Captions and
Headings.    24     14.16.    Days    24     14.17.    Ambiguities.    24    
14.18.    Counterparts    25     14.19.    Further Assurances    25

        APPENDIX A – Products              APPENDIX B – Technical Transfer and
Validation Timelines              APPENDIX C – Product Specifications           
  APPENDIX D – Supplier Facilities              APPENDIX E – Form Certification
of Conformance              APPENDIX F – Supplier Technology     

 

iii

--------------------------------------------------------------------------------

MANUFACTURING AND SUPPLY

AGREEMENT

 

Reference No.: 0005

 

This Manufacturing and Supply Agreement is effective as of the 10th day of
November 2003 (the “Effective Date”), by and between Advanced Medical Optics,
Inc., having its principal place of business at 1700 E. St. Andrew Place, P.O.
Box 25162, Santa Ana, California 92799-5162 U.S.A. (“AMO”), and Nicholas Piramal
India Limited, a Company incorporated under the laws of India, having its
principal place of business at 100, Centrepoint, Dr. B. Ambedkar Road, Parel,
Mumbai 400 012 (the “Supplier”). As used herein, “AMO” means Advanced Medical
Optics Inc together with its Affiliates (as defined herein) and the “Supplier”
means Nicholas Piramal India Ltd. with its Affiliates.

 

Singly as “Party” and collectively as “Parties”.

 

RECITALS

 

WHEREAS, the Supplier is engaged in the manufacture, sale and distribution of
medical and pharmaceutical devices;

 

WHEREAS, AMO desires that the Supplier manufacture for, and supply to, AMO and
its Affiliates the Products more particularly described in Appendix A attached
hereto (the “Products”) upon the terms and conditions contained herein;

 

WHEREAS, the Supplier desires to manufacture for, and supply to, AMO and its
Affiliates the Products more particularly described in Appendix A attached
hereto upon the terms and conditions contained herein.

 

WHEREAS, AMO shall source the products described in Appendix A attached hereto
(the “Products”) exclusively from the Supplier.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereto agree as follows:

 

   1. DEFINITIONS

 

1.1. An “Affiliate” of a person or entity means any individual, sole
proprietorship, firm, partnership, corporation, trust, joint venture or other
entity, whether de jure or de facto, which directly or indirectly controls, is
controlled by or is under common control of such person or entity. As used in
this definition, “control” means the possession, directly or indirectly, of the
power to direct or cause the direction of the policies and management of a
person or entity, whether by the ownership of stock, by contract or otherwise.

 

1.2. “Agreement” means this Manufacturing and Supply Agreement.

 

1

--------------------------------------------------------------------------------

1.3. “AMO” has the meaning given to it in the introductory paragraph to this
Agreement.

 

1.4. “AMO Technology” means the Product Specifications and all other ideas,
concepts, creations, technology, inventions, discoveries, developments,
techniques, processes, know-how, drawings, designs, specifications, data,
formulas and algorithms related to the Products, and all underlying intellectual
property rights therein, including without limitation, all copyrights,
trademarks, trade secrets, patents, industrial rights and all other intellectual
property rights. The foregoing notwithstanding, “AMO Technology” shall not
include Supplier Technology.

 

1.5. “AMO Tooling and Equipment” has the meaning given it in Section 2.5.

 

1.6. “AMO IP Indemnified Claims” has the meaning given to it in Section 13.3.

 

1.7. “AMO General Indemnified Claims” has the meaning given to it in Section
13.2.

 

1.8. “Cancellation Claim” has the meaning given it in Section 3.7.

 

1.9. “Cancellation Notice” has the meaning given it in Section 3.6.

 

1.10. “Cancellation Threshold” has the meaning given in Section 3.7.

 

1.11. “Certificate of Conformance” means the form set forth in Appendix E, as
the same may be amended from time to time by written agreement of the Parties.

 

1.12. “CFR” means the United States Code of Federal Regulations.

 

1.13. “cGMPs” means the most recently enacted provisions of 21 CFR 211, 21 CFR
801, 21 CFR 803, 21 CFR 806, 21 CFR 807, 21 CFR 810 and 21 CFR 820 (or their
successor provisions), and all sections and subparts thereof.

 

1.14. “Commercialization Date” has the meaning of the first delivery of the
product by the Supplier and acceptance by AMO.

 

1.15. “Confidential Information” has the meaning given to it in Section 12.1.

 

1.16. “Configuration Mix Change” has the meaning given to it in Section 3.5.

 

1.17. “Date of Delivery” has the meaning given to it in Section 5.1.

 

1.18. “Defective Product” means Product that fails to conform to all warranties
in this Agreement.

 

1.19. “Device History Record” means a compilation of records in accordance with
cGMPs containing the production history of finished Products.

 

1.20. “Device Master Record” means a compilation of records in accordance with
cGMPs containing the procedures and specifications for finished Products.

 

1.21. “Discontinued Materials” has the meaning given to it in Section 2.8.

 

2

--------------------------------------------------------------------------------

1.22. “Effective Date” has the meaning given to it in the introductory paragraph
to this Agreement.

 

1.23. “Engineering Change” means any change to the Product Specifications of a
Product.

 

1.24. “Engineering Change Order” has the meaning given to it in Section 2.3.

 

1.25. “Engineering Change Proposal” has the meaning given to it in Section 2.4.

 

1.26. “FDA” means the United States Food and Drug Administration.

 

1.27. “F.C.A.” has the meaning given to it in the Incoterms, 2000.

 

1.28. “Force Majeure Event” has the meaning given to it in Section 14.11.

 

1.29. “General Indemnified Claims” has the meaning given to it in Section 13.1.

 

1.30. “Inspection Period” has the meaning given to it in Section 7.2.

 

1.31. “IP Indemnified Claims” has the meaning given to it in Section 13.2.

 

1.32. “Lot” means Products manufactured as part of a single manufacturing run.

 

1.33. “Order Lead Time” means the time from the acceptance of the purchase order
by the Supplier in terms of this Agreement until the Shipment Date.

 

1.34. “Product” means, the products described in Appendix A, as the same may be
amended from time to time by written agreement of the Parties.

 

1.35. “Product Family” means a set of related Product models identified in
Appendix A.

 

1.36. “Product Specifications” means a detailed description of the functional
and technical specifications for each Product, including dimensions, drawings,
performance characteristics and requirements, Quality Control Tests and
instructions relating to the packaging, packing and labeling of each Product.
The Product Specifications for each Product as set forth in Appendix C, as the
same may be amended from time to time by written agreement of the Parties.

 

1.37. “Quality Control Tests” means the quality test protocols for each Product
set forth in the Product Specifications.

 

1.38. “Quantity Increase/Decrease” has the meaning given it in Section 3.4.

 

1.39. “Supplier IP Indemnified Claims” has the meaning given to it in Section
13.4.

 

1.40. “Supplier General Indemnified Claims” has the meaning given to it in
Section 13.1.

 

3

--------------------------------------------------------------------------------

1.41. “Regulatory Approvals” means any approvals, licenses, registrations or
authorizations of any federal, state, local or foreign, regulatory agency,
department, bureau or other government entity, necessary for the manufacture,
handling, storage, testing, export, import, transport and sale of the Products.

 

1.42. “RMA Number” has the meaning given it in Section 7.4.

 

1.43. “Root Cause Analysis” means a process to identify the underlying source or
cause of nonconforming materials, components or Products.

 

1.44. “Shipment Date” means the date or dates specified by AMO or its Affiliates
in a purchase order upon which the Products are to be shipped from the F.C.A.
point to AMO and its Affiliates.

 

1.45. “Supplier” has the meaning given to it in the introductory paragraph to
this Agreement.

 

1.46. “Supplier Technology” means the items identified in Appendix F.

 

1.47. “Warranty Claim Dispute” has the meaning given to it in Section 7.5.

 

1.48. “Warranty Period” has the meaning given it in Section 7.1.

 

   2. MANUFACTURE AND SALE OF PRODUCTS

 

2.1. Manufacture and Sale of Products. The Supplier agrees to manufacture for,
and sell and deliver to, AMO and its Affiliates such Products as AMO and its
Affiliates may from time to time order pursuant to the terms and conditions of
this Agreement. During the term of this Agreement, Supplier shall not
manufacture the Products, or products which are substantially similar to the
Products, for any third party.

 

2.2. Manufacturing Standards. Supplier shall manufacture, store, handle,
inspect, test, package, label and ship all Products in strict conformity with
(i) all applicable Product Specifications; (ii) all applicable cGMPs and all
other applicable federal, state and local laws and regulations (and their
foreign counterparts); and (iii) all applicable current standards (including all
applicable subparts) of ISO 9001 or 9002, EN 46001 or 46002, ISO 13485 or 13488,
IEC 60601, EN 60601, UL 2601, CAN/CSA- C22.2 No. 601.1 – M90 and ANSI IPC-A-610
(or any successor provisions of any of the foregoing standards). The Supplier
shall not make any change in or deviate in any way from the Product
Specifications except pursuant to an approved Engineering Change Order or
Engineering Change Proposal as provided in this Agreement.

 

2.3. AMO Engineering Change Orders. AMO may from time to time request that the
Supplier incorporate an Engineering Change into a Product by delivering an
Engineering Change Order to the Supplier. Each Engineering Change Order shall be
in writing and shall include a description of the proposed Engineering Change
and the

 

4

--------------------------------------------------------------------------------

     proposed effective date of such Engineering Change. Within ***** of receipt
of an Engineering Change Order, the Supplier shall provide AMO with a written
statement that sets forth: (i) the earliest possible implementation date for the
Engineering Change; (ii) any increase or decrease in the cost of the Product
subject to the Engineering Change; and (iii) any changes to the Shipment Date
for such Product. If a proposed Engineering Change results in a change in the
cost of, or Shipment Date for, the Product subject to the Engineering Change, an
equitable adjustment shall be made to the price and/or Shipment Date for such
Product. The Supplier shall not be obligated to implement an Engineering Change
Order until the Parties have agreed, in a writing signed by an authorized
representative of each Party, to the changes to the Product Specifications
required by the Engineering Change and any changes to the price and/or Shipment
Date for the Product subject to the Engineering Change.

 

2.4. Supplier Engineering Change Proposals. In support of Supplier’s ongoing
efforts to improve efficiency and reduce the costs of manufacturing the
Products, the Supplier may from time to time suggest that an Engineering Change
be made to a Product by delivering an Engineering Change Proposal to AMO. Each
Engineering Change Proposal shall be in writing and shall include a description
of the proposed Engineering Change, a description of any improvements in the
Product or cost reductions that will result from the Engineering Change and the
effect of the Engineering Change, if any, on the price and/or Shipment Date for
the Product. Each Engineering Change Proposal shall provide detail sufficient to
permit AMO to evaluate the desirability of such Engineering Change. AMO agrees
to consider each Engineering Change Proposal it receives from the Supplier, but
reserves the right to accept or reject each such Engineering Change Proposal in
AMO’s sole discretion. The Supplier shall not implement any Engineering Change
Proposal that has not been accepted by AMO in writing. In the event AMO rejects
an Engineering Change Proposal, the Supplier agrees to continue to manufacture
and deliver the Products as originally specified.

 

2.5. Tooling and Equipment. The Supplier shall provide all non-Product specific
tooling and equipment at its expense. AMO may purchase for, and provide to, the
Supplier certain Product specific tooling and equipment necessary for the
manufacture and testing of the Products (“AMO Tooling and Equipment”). All AMO
Tooling and Equipment shall be and remain at all times the property of AMO, and
shall be kept free of any liens or encumbrances. The Supplier shall use AMO
Tooling and Equipment only for the purpose of manufacturing and testing the
Products. The Supplier shall be responsible for all maintenance and use of, risk
of loss of, and any damage to, all AMO Tooling and Equipment at the Supplier’s
sole risk and expense. While any AMO Tooling and Equipment is in the Supplier’s
custody or control, the Supplier shall procure and maintain insurance against
loss of and damage to such AMO Tooling and Equipment in an amount no less than
the then current replacement cost for such AMO Tooling and Equipment, with loss
payable to AMO. In the event that any AMO Tooling and Equipment is lost or
destroyed for any reason, Supplier shall promptly notify AMO and, upon demand by
AMO, shall promptly reimburse AMO for AMO’s cost of acquiring or replacing such
AMO Tooling and Equipment. Upon demand by AMO at any time, the Supplier shall
promptly return to AMO, at AMO’s expense, any AMO

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

5

--------------------------------------------------------------------------------

  Tooling and Equipment in good working condition, ordinary wear and tear
excepted. For purposes hereof, “ordinary wear and tear” shall not include any
damage or deterioration that would have been prevented by good maintenance
practices.

 

2.6. Location of Supplier Facilities. The Supplier shall manufacture, test and
store all Products only in Supplier facilities located at the address or
addresses specified in Appendix D hereto, as the same may be amended from time
to time by written agreement of the parties.

 

2.7. Vendors. The Supplier shall be responsible for identifying and qualifying
all vendors of materials and components necessary to manufacture the Products
except for those vendors that AMO specifies in their validated formulations.

 

2.8. Discontinued Materials. The Supplier shall be responsible for ensuring the
continuity of supply of all materials and components necessary to manufacture
the Products. In the event a Vendor intends to discontinue any materials or
components necessary to manufacture the Products (“Discontinued Materials”), the
Supplier shall give AMO ***** prior written notice before such discontinuance.
During the ***** notice period, AMO may require the Supplier to purchase the
Discontinued Materials for AMO in such quantities as AMO may require in
accordance with the terms of this Agreement. At the end of the ***** notice
period, AMO may require placement of a final purchase order for the Discontinued
Materials and may stagger the Shipment Dates for such final order over an *****
period following placement of the order. The price for Discontinued Materials
shall be Supplier’s cost for such Discontinued Materials immediately prior to
Supplier’s notice of discontinuance plus a reasonable markup, which markup shall
not to exceed ***** of Supplier’s cost for such Discontinued Materials.

 

2.9. Trade Mark. The Supplier shall have the right to affix the AMO name, AMO
logo, and AMO trade mark on the Products.

 

3. ORDERS, MATERIAL PROCUREMENT AND FORECASTS

 

3.1. Purchase Orders. AMO and its Affiliates shall order Products by written
purchase orders issued by an authorized employee of AMO or its Affiliates to the
Supplier from time to time in accordance with this Agreement. Each purchase
order shall specify (i) the Products to be delivered by the Supplier; (ii) the
quantity of Products to be delivered by the Supplier; (iii) the address or
addresses to which the Products are to be delivered; and (iv) the Shipment Date
for the Products. The Order Lead Time for the Products shall be not less than
***** from the date of acceptance the purchase order by the Supplier.

 

3.2. Acceptance of Purchase Orders. The Supplier shall accept all purchase
orders that comply with the terms and conditions of this Agreement. The Supplier
shall have ***** from the date of receipt of each purchase order to reject the
purchase order if it does not comply with the terms and conditions of this
Agreement. Any rejection by the Supplier

 

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

6

--------------------------------------------------------------------------------

  must be in writing and must specifically identify the rejected term or terms
and proposed changes that would be acceptable to the Supplier. If AMO (or its
Affiliate issuing the purchase order) does not receive a written rejection of a
purchase order within ***** of its receipt by the Supplier, the purchase order
shall be deemed accepted. If the Supplier delivers a written rejection of a
purchase order in accordance with this Section 3.2, AMO (or its Affiliate
issuing the purchase order) shall, within ***** of its receipt of the written
rejection, either confirm the purchase order with the Supplier’s proposed
changes or withdraw the purchase order.

 

3.3. Delivery Address and Shipment Date Changes. For any purchase order issued
in accordance with this Agreement, AMO and its Affiliates may change the
delivery address or postpone the Shipment Date for any or all Products ordered,
or any quantities thereof, at any time prior to shipment of such Products at no
additional charge. Each such delivery address change and Shipment Date change
shall be in writing, with reference the purchase order to which it pertains, and
shall be effective upon receipt by the Supplier.

 

3.4. Order Quantity Increase/Decrease. For any purchase order issued in
accordance with this Agreement, AMO and its Affiliates may increase/decrease the
quantity of any or all Products ordered (a “Quantity Increase/Decrease”) as
follows:

 

Number of days before

Shipment Date

--------------------------------------------------------------------------------

  

Allowable order quantity

Increase / Decrease

--------------------------------------------------------------------------------

  *****    0 % *****    up to 50 % *****    no limit  

 

Each Quantity Increase/Decrease shall be in writing, with reference to the
purchase order to which it pertains, and shall be effective to the extent of the
increase or decrease in quantity upon confirmation in writing by the Supplier.
For each Quantity Increase/Decrease issued in accordance with this Section 3.4
and confirmed in writing by the Supplier, the purchase order shall be adjusted
by multiplying the unit price of the Products (as set forth in the purchase
order) by the increased or decreased number of units of such Products. Neither
AMO nor its Affiliates shall be liable for any additional costs or charges
resulting from a Quantity Increase/Decrease issued in accordance with this
Section 3.4, other than as described in the preceding sentence.

 

3.5. Configuration Mix Changes. For any purchase order issued in accordance with
this Agreement, AMO and its Affiliates may substitute any Product ordered with
one or more other Products within the same Product Family of such Product
ordered (a “Configuration Mix Change”) as follows:

 

Number of days before

Shipment Date

--------------------------------------------------------------------------------

  

Allowable Configuration

Mix-Change (per individual

Product ordered)

--------------------------------------------------------------------------------

*****

   0%

*****

   up to 50%

*****

   100%

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

7

--------------------------------------------------------------------------------

Each Configuration Mix Change shall be in writing, with reference to the
purchase order to which it pertains, and shall be effective upon receipt by the
Supplier. For each Configuration Mix Change issued in accordance with this
Section 3.5 the purchase order shall be adjusted to reflect the new unit price
for each Product substituted in place of the originally ordered Product, if such
unit price differs from the unit price of the originally ordered Product.
Neither AMO nor its Affiliates shall be liable for any additional costs or
charges resulting from a Configuration Mix Change issued in accordance with this
Section 3.5, other than as described in the preceding sentence.

 

3.6. Cancellation of Purchase Orders. AMO and its Affiliates may cancel all or
any portion of any purchase order at any time upon written notice to the
Supplier (a “Cancellation Notice”) provided that AMO shall not cancel Purchase
Orders of Products which are to be shipped within ***** from the date of receipt
of the Cancellation Notice by the Supplier. Upon receipt of each Cancellation
Notice, unless otherwise directed by AMO or its Affiliates, the Supplier shall
(i) stop all work under the cancelled purchase order, or any cancelled portion
thereof, (ii) use its best efforts to cancel all orders for materials and
components, and all subcontracts, to the extent they relate to the cancelled
purchase order, or any cancelled portion thereof, (iii) use its best efforts to
reduce any inventory of materials and components related to the cancelled
purchase order, or any cancelled portion thereof, by returning such materials
and components for credit or using such materials and components to fulfill any
outstanding purchase orders or orders placed by other customers of Supplier,
(iv) use its best efforts to sell any remaining inventory of materials and
components related to the cancelled purchase order, or any cancelled portion
thereof, to the extent such materials and components cannot otherwise be
returned for credit or used to fulfill outstanding purchase orders or orders of
other customers of Supplier, and (v) place no further orders for materials and
components related to the cancelled purchase order, or any cancelled portion
thereof.

 

3.7. Cancellation Liability. AMO and its Affiliates may cancel all or any
portion of any purchase order without liability of any kind, including without
limitation payment for lost profits or for reimbursement of material or labor
costs or other expenses, as follows:

 

Number of days before

Shipment Date

--------------------------------------------------------------------------------

  

Quantity of Product

(per purchase order)

that may be cancelled

without liability

--------------------------------------------------------------------------------

*****

   0%

*****

   up to 50%

*****

   up to 100%

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

 

8

--------------------------------------------------------------------------------

(all of the foregoing percentages, the “Cancellation Threshold”). For any
quantity of Products cancelled in excess of the Cancellation Threshold, AMO’s
and its Affiliates’ entire liability and the Supplier’s exclusive remedy for
such cancellation shall be payment by AMO or its Affiliates to Supplier of a
Cancellation Claim as provided herein below. Within ***** from the date of
Supplier’s receipt of a Cancellation Notice, the Supplier shall submit a claim
to AMO (or its Affiliate, if the Cancellation Notice was issued by such
Affiliate), in accordance with generally accepted accounting principals, setting
forth the price of any finished Products subject to the cancellation in excess
of the Cancellation Threshold, and the following costs, if any, actually
incurred by the Supplier as a result of cancellation in excess of the
Cancellation Threshold: (i) the cost of work in progress (including labor
performed); (ii) the cost of materials and components that could not be
returned, reused or sold, (iii) the net loss on the sale of materials and
components, and (iv) applicable restocking or cancellation fees charged to the
Supplier by material and component vendors in an amount not to exceed ***** of
the Supplier’s cost for such returned materials and components (all of the
foregoing, a “Cancellation Claim”). All such costs included in a Cancellation
Claim shall be at the Supplier’s actual cost without markup or profit. The
amount of each Cancellation Claim shall be reduced by (a) any payments made to
the Supplier on account of the cancelled purchase order, or any cancelled
portion thereof, (b) any claims that AMO or its Affiliates may have against the
Supplier, and (c) any net gain on the sale of materials and components as a
result of cancellation. In no event shall the amount of any Cancellation Claim
exceed the purchase price (as set forth in the applicable purchase order) for
the quantities of each Product cancelled, and only to the extent such quantities
are in excess of the Cancellation Threshold. The Supplier shall make its
premises available to AMO and its Affiliates, and any independent third party
designated by AMO or its Affiliates (whose expenses shall be borne by AMO or the
Affiliate concerned) and approved by the Supplier (which approval shall not be
unreasonably withheld), at any time after the Supplier’s receipt of a
Cancellation Notice for the purpose of inspection of the Supplier’s inventory,
work in progress, books, records, documents and other evidence bearing on the
Cancellation Claim. If the Supplier fails to submit a Cancellation Claim within
***** from the date of the Supplier’s receipt of a Cancellation Notice, AMO (or
its Affiliate, if the Cancellation Notice was issued by such Affiliate) may
independently determine the Cancellation Claim due the Supplier, if any, and
such determination shall be final.

 

3.8. Material Procurement. Purchase orders issued by AMO, or its Affiliates, and
accepted by the Supplier in accordance with this Agreement shall constitute
authorization for the Supplier to procure, using standard purchasing practices,
only the materials and components necessary for the manufacture of the Products
covered by such purchase order with a Shipment Date of ***** or less. Neither
AMO nor its Affiliates shall be liable for any payment of any kind, including
without limitation payment for lost profits or for reimbursement of material or
labor costs or other expenses, for any materials or components not covered by a
purchase order with a Shipment Date of ***** or less (as each such purchase
order may be changed or cancelled in accordance with Sections 3.4, 3.5, 3.6 and
3.7 hereof).

 

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

9

--------------------------------------------------------------------------------

3.9. Forecasts. AMO shall provide the Supplier, on a monthly basis, ***** order
forecast for each Product. Each such forecast shall be a non-binding estimate
and shall not obligate AMO or its Affiliates to purchase the volume of Products
set forth in it.

 

   4. TESTING, RECORDS AND INSPECTION

 

4.1. Quality Control Tests. The Supplier shall perform all applicable Quality
Control Tests on each Product prior to shipment to AMO or its Affiliates. Each
Lot of Products delivered to AMO or its Affiliates shall be accompanied by a
Certificate of Conformance, fully completed by the Supplier, certifying that the
Products have passed all applicable Quality Control Tests and fully comply with
all Product Specifications.

 

4.2. Root Cause Analysis. When nonconforming materials, components or Products
are identified during the Supplier’s Quality Control Tests, the Supplier shall,
at its sole expense, (i) immediately replace the nonconforming materials,
components or Products, and (ii) perform and complete a Root Cause Analysis
within ***** after such nonconformity is identified. Upon completion of each
Root Cause Analysis, the Supplier shall promptly implement a corrective action
plan to prevent further nonconformities, and communicate to AMO, in writing, the
results of the Root Cause Analysis and corrective action plan.

 

4.3. Records. The Supplier shall keep proper documentation at its facilities of
all Device Master Records, Quality Control Tests, Device History Records, Root
Cause Analyses and all other required records for each Product. The Supplier
shall provide copies of such documentation to AMO or its Affiliates, at the
Supplier’s expense, within ***** of request by AMO or its Affiliates.

 

4.4. Inspection of Facilities and Records. AMO and its Affiliates, and any
independent third party designated by AMO or its Affiliates and approved by the
Supplier (which approval shall not be unreasonably withheld), shall have the
right, at any time upon at least ***** prior notice, to inspect all facilities
at which the Products (or any components therefor) are manufactured, handled,
stored, tested, packaged or shipped, and all records related to the Products.
The Supplier shall reasonably assist AMO and its Affiliates, and any designated
third party, with such inspections. In the event that nonconforming materials,
components or Products are identified during such inspections, the Supplier
shall, at its sole expense, (i) immediately replace the nonconforming materials,
components or Products, and (ii) perform and complete a Root Cause Analysis
within ***** after such nonconformity is identified. Upon completion of each
Root Cause Analysis, the Supplier shall promptly implement a corrective action
plan to prevent further nonconformities, and communicate to AMO, in writing, the
results of the Root Cause Analysis and corrective action plan.

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

10

--------------------------------------------------------------------------------

4.5. Right of Rejection and Revocation. Nothing in this Section 4 shall be
deemed to limit the right of AMO and its Affiliates to reject, or revoke
acceptance of, deliveries of nonconforming Products.

 

   5. SHIPMENT OF PRODUCTS

 

5.1. Shipment. All Products delivered by the Supplier shall be suitably packed
for shipment, labeled for shipment to the address specified in the applicable
purchase order and the Supplier shall notify AMO the date on which the Products
are ready for delivery F.C.A. point (“Date of Delivery”). All shipments shall be
F.C.A. place of manufacturer, at which point all title to, and risk of loss of,
the Products shall pass to AMO (or its Affiliate issuing the purchase order).
All freight, insurance and other shipping expenses from the F.C.A. point shall
be paid by AMO (or its Affiliate issuing the purchase order). The Supplier shall
provide auditable proof of shipment to AMO and its Affiliates upon request. The
Supplier shall provide reasonable assistance to AMO and its Affiliates, at no
charge, in any claim AMO and its Affiliates may make against a carrier or
insurer for misdelivery, loss or damage to Products.

 

5.2. On Time Shipment. The Supplier shall ship all Products from the F.C.A.
point on the Shipment Dates specified in the purchase orders, using such
carriers as AMO and its Affiliates may designate in the purchase orders or
otherwise in writing to the Supplier. The Supplier acknowledges and agrees that
time is of the essence as to Shipment Dates.

 

5.3. Early Shipment. Any Products shipped from the F.C.A. point to AMO or its
Affiliates more than ***** prior to the applicable Shipment Date may be returned
to the Supplier for re-shipment on the Shipment Date or stored by AMO or its
Affiliates, and the Supplier shall promptly reimburse AMO or its Affiliates in
the full amount of any and all loss, damage or expense resulting from the
storage and/or return of such Products.

 

5.4. Delayed Shipment. The Supplier agrees to promptly notify AMO (or its
Affiliate issuing the purchase order) in writing of any delay, or possibility of
delay, in the shipment of Products and the cause and extent of such delay.
Without limiting any other rights or remedies available to AMO and its
Affiliates hereunder or under applicable law, in the event the Supplier fails to
ship any Products within ***** after the applicable Shipment Date, AMO and its
Affiliates may, in their sole discretion do either of the following:

 

      (i) AMO and its Affiliates may cancel the purchase order as to such
Products without charge or penalty, and in shall be entitled to “cover” by
purchasing a like quantity of substantially similar products or parts in
substitution for those due from the Supplier. The Supplier shall credit AMO and
its Affiliates the difference between the cost of cover and the purchase order
price, together with any incidental and consequential damages incurred by AMO
and its Affiliates in connection with such cancellation, including without
limitation additional shipping costs.

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

11

--------------------------------------------------------------------------------

  (ii) AMO and its Affiliates may accept delivery of such Products and reduce
the price to be paid for such Products for purposes of that purchase order as
follows:

 

Shipment Delay Beyond Applicable

Shipment Date

--------------------------------------------------------------------------------

   Discount to Price

--------------------------------------------------------------------------------

*****

   5%

*****

   10%

*****

   15%

 

    The amount of foregoing price discounts shall be deducted by AMO and its
Affiliates from the invoice for such Products.

 

   6. PRICE AND TERMS OF PAYMENT

 

6.1. Price. The unit price for each Product is set forth in Appendix A. *****.
All prices for the Products are ***** inclusive of all packaging and labeling
costs. The price payable by AMO and its Affiliates for any Products ordered
shall be the price in effect under this Agreement as of the date of the
applicable purchase order. For any new Product to be added to Appendix A after
the Effective Date, the Parties shall negotiate in good faith a reasonable unit
price for such new Product. No additional charges or costs of any kind will be
payable by AMO or its Affiliates, unless specifically agreed to by AMO or its
Affiliates in writing in advance of the charge or cost being incurred by the
Supplier.

 

6.2. Cost Reductions. The Supplier will make best efforts to achieve year over
year cost savings through productivity improvements, Engineering Changes,
alternate sources for materials and components and other cost saving measures,
and to pass on such cost savings to AMO and its Affiliates through a reduction
in the price of the Products as and when such cost savings are realized.
Provided however that with a view to give incentives to the Supplier, where the
cost reductions are achieved because of Supplier Engineering Change Proposals or
because of the efforts of the Supplier in identifying alternate sources for
materials and components, productivity improvements etc., the Supplier shall be
required to pass on only ***** of such cost savings to AMO and its Affiliates.

 

6.3. Meeting Competition. If the price charged by a third party supplier (not
affiliated with AMO) for a product or part, which is substantially similar to a
Product and sold on substantially similar terms and conditions as this
Agreement, is more than ***** less than the price hereunder, and if AMO
furnishes Supplier with written proof of such a bona fide offer by such third
party supplier at such lower price, then Supplier shall make best efforts to
assist AMO to meet competitive pricing.

 

6.4. Most Favored Customer. Supplier represents that the prices for the Products
are the lowest prices charged to any customer of Supplier purchasing
substantially similar

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

12

--------------------------------------------------------------------------------

     products on substantially similar terms and conditions as this Agreement.
If the Supplier sells, supplies or offers any product substantially similar to a
Product, on substantially similar terms and conditions as this Agreement, to any
other purchaser at a lesser price than the price hereunder, Supplier shall
immediately inform AMO, and AMO and its Affiliates shall be entitled to such
lesser price effective as of the date of such sale, supply or offer.

 

6.5. Invoices. For each shipment of Products ordered by AMO and its Affiliates,
the Supplier shall issue an individual invoice in U.S. Dollars to AMO (or its
Affiliate issuing the purchase order) no sooner than the Date of Delivery for
such Products. Each invoice shall reference the purchase order to which it
pertains and shall be accompanied by auditable proof of delivery. The Supplier
may use its standard invoice forms, provided that any terms and conditions
contained in such invoice forms that conflict with, vary from, or supplement the
terms of this Agreement shall be null and void, and the terms of this Agreement
shall govern.

 

6.6. Payment. AMO and its Affiliates shall pay all invoices delivered under this
Agreement within ***** of the date of receipt of the invoice or applicable
Products, whichever is later.

 

6.7. Exchange Rate Fluctuation. If the average of the exchange rates of ***** on
the last business day of each month of a calendar quarter varies from the base
exchange rate of ***** per ***** (used in pricing) by more than ***** during a
period of ***** years from the Commercialization Date and by more than ***** for
the remaining period of this Agreement, then the Supplier shall debit or credit
the difference in excess of ***** as the case may be, on Product shipped during
the same calendar quarter within ***** following the end of the quarter.

 

   7. WARRANTY AND TECHNICAL SUPPORT

 

7.1. Product Warranty. All Products supplied under this Agreement by the
Supplier shall be manufactured, stored, handled, inspected, tested, packaged,
labeled and shipped in strict conformity with (i) all applicable Product
Specifications; (ii) all applicable cGMPs and all other applicable federal,
state and local laws and regulations (and their foreign counterparts); and (iii)
all applicable current standards (including all applicable subparts) of ISO 9001
or 9002, EN 46001 or 46002, ISO 13485 or 13488, IEC 60601, EN 60601, UL 2601,
CAN/CSA-C22.2 No. 601.1-M90 and ANSI IPC-A-610 (or any successor provisions of
any of the foregoing standards). The Supplier warrants that, for a period of
***** from the date of manufacture, ***** whichever is later, (the “Warranty
Period”), all Products, and all materials and components therefor, supplied
under this Agreement shall (a) conform with all applicable Product
Specifications and all applicable laws and regulations, (b) be of good and
merchantable quality, free from defects in materials and workmanship, (c) be fit
for their intended purposes, and (d) not be adulterated or misbranded within the
meaning of the U.S. Federal Food, Drug, and Cosmetic Act, as amended. The
foregoing notwithstanding, the Warranty Period for Discontinued

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

13

--------------------------------------------------------------------------------

     Materials shall be ***** from the date of receipt by AMO or its Affiliates
or the Product expiration date, whichever is later.

 

7.2. Inspection Period/Defective Product. Within ***** days from the date of
receipt by AMO and its Affiliates (the “Inspection Period”), AMO and its
Affiliates may reject and return to the Supplier any Defective Products, or all
of a given Lot of Products if the Lot contains a statistically significant
sample of Defective Units. If the results of the tests conducted by AMO are
disputed by the Supplier, the parties shall refer the dispute to an independent
laboratory for testing. The decision of the said laboratory shall be final and
binding. The cost of testing will be borne by the Party whose contention is not
upheld by the said laboratory.

 

7.3. Replacement of Defective Products. In the case of rejection during the
Inspection Period in terms of clause 7.2, the Supplier shall endeavor to replace
the Defective Products with new Products and ship the replacement Products to
AMO and its Affiliates as early as possible but not later than ***** after the
Supplier’s receipt of the Defective Products. All replacement Products furnished
by the Supplier pursuant to this Section 7.3 shall be ***** . During the
Warranty Period, AMO and its Affiliates may replace Defective Product from their
inventory. For each Defective Product replaced by AMO and its Affiliates during
the Warranty Period, AMO and its Affiliates shall, within ***** of such
replacement, send a warranty claim report to Supplier describing in reasonable
detail the nonconformance in the Defective Products and all shipping costs
incurred in connection with such Defective Products. Upon receipt of the
warranty claim report, Supplier shall promptly supply replacement Products free
of charge (to include shipping costs) or credit or reimburse AMO and its
Affiliates for the total amount excluding the shipping costs set forth in the
warranty claim report.

 

7.4. RMA Procedure. All Defective Products returned to the Supplier by AMO and
its Affiliates in accordance with Section 7.2 and 7.3 hereof shall (i) specify
whether the Defective Product is being returned for replacement or for analysis,
and (ii) include a Return Merchandise Authorization Number (a “RMA Number”) on
the outside packaging of such returned Defective Product. AMO and its Affiliates
may request RMA Numbers from the Supplier over the telephone and, for each such
telephonic request, the Supplier shall immediately issue the RMA Numbers to AMO
and its Affiliates. Additionally, from time to time upon request by AMO and its
Affiliates, the Supplier shall issue blocks of RMA Numbers to be used by AMO and
its Affiliates for future returns of Defective Units.

 

7.5. Root Cause Analysis. When Defective Products are returned to the Supplier
during the Warranty Period in accordance with Sections 7.3 hereof, the Supplier
shall, at its sole expense, perform and complete a Root Cause Analysis within
***** after receipt of the Defective Products. Upon completion of each Root
Cause Analysis, the Supplier shall promptly implement a corrective action plan
to prevent further nonconformities, and communicate to AMO, in writing, the
results of the Root Cause Analysis and corrective action plan.

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

14

--------------------------------------------------------------------------------

7.6. Technical Support. The Supplier shall provide AMO and its Affiliates, at no
additional cost, with such technical support and assistance related to the
Products as AMO and its Affiliates may request from time to time.

 

   8. TERM AND TERMINATION

 

8.1. Term. The initial term of this Agreement shall commence on the Effective
Date and continue for five (5) years from the Commercialization Date. After the
initial term, this Agreement shall renew for two (2) consecutive one year
periods, unless either party notifies the other in writing of its intent to
terminate no later than ***** prior to the end of the initial term or renewal
period.

 

8.2. Termination for Breach. Either Party may, at its option, terminate this
Agreement, effective immediately upon delivery of notice to the other Party, if
the other Party has materially breached any provision of this Agreement and has
failed to cure such breach to the reasonable satisfaction of the non-breaching
Party within ***** of delivery of written notice from the non-breaching Party
describing the breach. Any deviation by Supplier from the timelines set forth in
Appendix B shall be considered a material breach hereunder, unless such
deviation is solely due to a delay by AMO or a Force Majeure Event.
Notwithstanding the foregoing, either Party may terminate this Agreement
effective immediately upon delivery of notice to the other Party, without
opportunity to cure, if the other Party is in breach of its confidentiality
obligations set forth in Section 12 hereof.

 

8.3. Termination for Insolvency. Either Party may terminate this Agreement
immediately upon delivery of written notice to the other Party, without
opportunity to cure, if the other Party (i) is liquidated, dissolved, ceases to
do business or otherwise terminates its business operations; (ii) becomes
insolvent; (iii) makes a general assignment for the benefit of creditors; or
(iv) institutes or has instituted against it any proceeding under any law
relating to bankruptcy or insolvency or a receiver or trustee is appointed for
all or a substantial part of its assets, and such proceeding or appointment is
not dismissed or discharged within *****.

 

8.4. Effect of Expiration or Termination. Expiration or termination of this
Agreement, for whatever reason, shall not affect the obligations of either Party
that exist as of the date of expiration or termination, and shall not act as a
waiver or release of any breach of this Agreement. Neither Party shall incur any
liability whatsoever for any damage, loss or expense of any kind suffered or
incurred by the other (or for any compensation to the other) arising from or
incident to any expiration or termination of this Agreement in accordance with
the terms of this Agreement whether or not such Party is aware of any such
damage, loss or expense, and notwithstanding any laws to the contrary.

 

8.5. Right to Purchase. Upon expiration or termination of this Agreement, AMO
shall have the right, but not the obligation, to purchase some or all of the
Supplier’s remaining inventory of finished Products at the prices set forth in
Appendix A. In addition, upon expiration or termination of this Agreement, AMO
shall have the right, but not the

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

15

--------------------------------------------------------------------------------

     obligation, to purchase some or all of the Supplier’s remaining inventory
of materials and components for the Products at the Supplier’s cost.

 

8.6. Duty to Manufacture. Notwithstanding any expiration or termination of this
Agreement (other than termination by the Supplier pursuant to Section 8.2 or 8.3
hereof), the Supplier shall manufacture, fulfill and ship all Products ordered
by AMO and its Affiliates prior to the date of expiration or termination of this
Agreement.

 

8.7. Return of Confidential Information. Within ***** after all Products ordered
by AMO and its Affiliates prior to the date of expiration or termination of this
Agreement have been manufactured and shipped to AMO and its Affiliates, the
Supplier shall return to AMO all Confidential Information of AMO and an officer
of the Supplier shall certify in writing to AMO that the Supplier has complied
with the requirements of this sentence.

 

8.8. Survival. Sections 3.8, 4.3, 7.1, 7.2, 7.3, 7.4, 7.5, 8.4, 8.5, 8.6, 8.7,
8.8, 9.1, 10.4, 10.5, 11, 12 13 and 14 shall survive expiration or termination
of this Agreement.

 

   9. REPRESENTATIONS AND WARRANTIES

 

9.1. General Representations. The Supplier represents and warrants that: (i) the
Supplier has the full power to enter into this Agreement and to perform its
obligations hereunder; (ii) the Supplier’s employees performing any work
hereunder shall have the proper skill, training and background so as to be able
to perform such work in a competent and professional manner; and (iii) AMO and
its Affiliates shall receive free, good and clear title to all Products supplied
hereunder.

 

9.2. Quality Management System Certifications. The Supplier represents and
warrants that it has, and at all times during the term of this Agreement will
have, a quality management system certified to the following standards (or any
successor provisions thereof): (i) ISO 9001 or 9002, (ii) EN 46001 or 46002, and
(iii) ISO 13485 or 13488 (certified by a Standards Council of Canada accredited
Canadian Medical Devices Conformity Assessment System registrar).

 

9.3. Legal and Regulatory Compliance. The Supplier represents and warrants that
it is, and at all times during the term of this Agreement will be, in full
compliance with all federal, state, local laws, regulations and standards (and
their foreign counterparts) as each may be amended or superceded, applicable to
this Agreement and the work performed hereunder, including without limitation:
(i) the U.S. Federal Food, Drug, and Cosmetics Act; (ii) cGMPs; and (iii) ISO
9001 or 9002, EN 46001 or 46002, and ISO 13485 or 13488. The Supplier further
represents and warrants that its facilities hold, and will hold, all necessary
federal,            ,state, local and other foreign governmental permits and
licenses required for the Supplier to manufacture, handle, store, test, export,
import, transport and sell the Products.

 

9.4. AMO. AMO has the full power to enter into this Agreement and to perform its
obligations under this Agreement.

 

16

--------------------------------------------------------------------------------

   10. REGULATORY

 

10.1. Government Approvals. Unless otherwise agreed to by the Parties in
writing,***** shall be solely responsible for obtaining and maintaining all
Regulatory Approvals, and any related filings therefor, required in order for
the Supplier to sell the Products to AMO. ***** shall be responsible for
obtaining and maintaining all Regulatory Approvals, and any related filings
therefor required for the sale and distribution of the Products world wide. Each
Party shall provide all reasonable assistance to the other in these efforts.
***** shall be responsible for maintaining complaint files and for submitting
appropriate reports to the Supplier, the FDA and all other regulatory agencies
as appropriate.

 

10.2. Regulatory Inquiries. Each Party shall promptly inform the other of the
existence and substance of any inquiry or investigation related to the Products
initiated by any government authority or certification agency. The existence of
any such inquiry or investigation shall not alone constitute a breach of this
Agreement or excuse any performance due under this Agreement.

 

10.3. Regulatory Inspections. The Supplier shall permit all governmental
authorities and certification agencies the reasonable right to inspect all
facilities at which the Products (or any components therefor) are manufactured,
handled, stored, tested, packaged or shipped, and all records related to the
Products. The Supplier shall reasonably assist such governmental authorities and
certification agencies with such inspections. The Supplier shall promptly notify
AMO of all such inspections related to or affecting the Products, and shall use
reasonable efforts to provide AMO the opportunity to be present at such
inspections. The Supplier shall provide to AMO, within ***** of its submission
or receipt by the Supplier, a copy of all letters, documents and similar
instruments related to the Products, which the Supplier submits to or receives
from any governmental authority or certification agency, including all ISO Audit
Observations and FDA Warning Letters and Form 483s. The Supplier shall
immediately correct any deficiencies identified by any governmental authority or
certification agency.

 

10.4. Product Complaints / Reports. *****shall be responsible for handling all
complaints and inquiries related to the Products, and any reporting requirements
related thereto. Either Party shall promptly provide to the other any
information received by it regarding real or potential deficiencies or defects
in the Products and any information that might otherwise constitute a complaint
about the Products or would reasonably be considered material to the safety of
the Products for their intended use. Each Party shall reasonably cooperate with
the other in sharing any information that may constitute a complaint related to
the Products and shall designate a representative responsible for the exchange
of such information and all other regulatory information required to be shared
under this Agreement.

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

17

--------------------------------------------------------------------------------

10.5. Recalls. AMO shall have the sole authority to declare a recall of, or take
a field corrective action to, any Products if AMO believes that there is a
potential significant health hazard or non-compliance with applicable government
regulations. The Supplier agrees ***** related to any recall or field corrective
action, provided that such recall or field corrective action is attributable to
a breach of any of the Supplier’s warranties under this Agreement. In the case
of any recall attributable to a breach of the Supplier’s warranties under this
Agreement, AMO shall return to Supplier, ***** all defective Products recovered,
and the Supplier shall immediately rework, repair or replace such defective
Products and ship a replacement to AMO on an expedited basis, *****.

 

   11. PROPRIETARY RIGHTS

 

11.1. AMO Technology. AMO individually, or through its Affiliates, is the sole
and exclusive owner of all AMO Technology. The Supplier agrees to promptly
disclose to AMO all AMO Technology conceived, created or reduced to practice by
or on behalf of the Supplier hereunder and to furnish to AMO all documentation
and other tangible materials comprising or containing such AMO Technology as and
when such materials come into existence. All worldwide right, title and interest
in and to all AMO Technology conceived, created or reduced to practice by or on
behalf of the Supplier hereunder are hereby continuously assigned to AMO as and
when such AMO Technology comes into existence, regardless of whether or not such
AMO Technology has been delivered to AMO. No AMO Technology is being assigned,
licensed or otherwise transferred to Supplier hereunder and the Supplier agrees
that it has no rights in or to AMO Technology. The Supplier shall not take or
cooperate in any action or threatened action which might in any way impair or
attack the rights or interests of AMO, its Affiliates, licensees or assignees in
the AMO Technology.

 

11.2. Assistance. The Supplier agrees to cooperate with AMO or its designee(s),
both during and after the term of this Agreement, in applying for, obtaining,
perfecting, evidencing, sustaining and enforcing AMO’s rights in and to AMO
Technology in all jurisdictions world-wide, including, without limitation,
executing such written instruments as may be prepared by AMO and doing such
other acts as may be necessary in the reasonable opinion of AMO to obtain a
patent, register a copyright, or otherwise enforce AMO’s rights in the AMO
Technology world-wide; provided, however, that ***** by the Supplier in
complying with the terms of this Section 11.2. For the limited purpose of
fulfilling the objectives of this Section 12.2, the Supplier hereby irrevocably
appoints AMO and any of its officers and agents as their attorney in fact to act
for and on Supplier’s behalf and instead of the Supplier, with the same legal
force and effect as if executed by the Supplier.

 

11.3. Supplier Technology. The Supplier is the sole and exclusive owner of all
Supplier Technology, and all rights in and to the Supplier Technology shall
continue to vest in the Supplier.

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

18

--------------------------------------------------------------------------------

   12. CONFIDENTIALITY

 

12.1. Confidential Information. For purposes of this Agreement, “Confidential
Information” means any information disclosed by either Party to the other Party,
either directly or indirectly, in writing, orally or by inspection of tangible
objects, which is confidential, trade secret or proprietary to the disclosing
Party or any third party that has furnished it to the disclosing Party. Without
limiting the generality of the foregoing, Confidential Information of AMO shall
specifically include all (i) AMO Technology; (ii) information, in whatever form,
of a technical nature, including without limitation ideas, concepts, creations,
technology, inventions, discoveries, developments, techniques, processes,
know-how, drawings, designs, specifications, data, formulas and algorithms; and
(iii) information, in whatever form, of a business nature, including without
limitation, business plans and forecasts, marketing and sales plans and
forecasts, methods of operation, products, customers, vendors, budgets and
financial statements and forecasts.

 

12.2. Restrictions on Use and Disclosure of Confidential Information. The
Parties agree during the term of this Agreement and all times thereafter (i) to
hold the Confidential Information of the disclosing Party in trust and strictest
confidence; (ii) to use the Confidential Information of the disclosing Party
only for the benefit of the disclosing Party; (iii) not to use the Confidential
Information of the disclosing Party in any manner or for any purpose not
expressly set forth in this Agreement; (iv) to reproduce the Confidential
Information of the disclosing Party only to the extent reasonably required to
fulfill the receiving Party’s obligations hereunder; (v) to keep the
Confidential Information of the disclosing Party locked in a secure facility
when not in use; and (vi) not to disclose, deliver, provide, disseminate or
otherwise make available, directly or indirectly, any Confidential Information
of the disclosing Party to any third party without first obtaining the
disclosing Party’s express written consent on a case-by-case basis. The Parties
shall disclose the Confidential Information of the disclosing Party only to such
employees who have a need to know such Confidential Information. Each Party
shall take at least the same degree of care that it uses to protect its own most
highly confidential and proprietary information of similar nature and importance
(but in no event less than reasonable care) to protect the confidentiality and
avoid the unauthorized use, disclosure, publication or dissemination of the
Confidential Information of the disclosing Party.

 

12.3. Exclusions. The foregoing obligations in Section 12.2 shall not apply to
any Confidential Information to the extent the Party receiving such Confidential
Information can prove such Confidential Information (i) was publicly known and
generally available in the public domain prior to the time of disclosure by the
disclosing Party; (ii) becomes publicly known and generally available in the
public domain through no act or omission of the receiving Party; (iii) was
rightfully known by the receiving Party, without restriction, prior to the time
of first disclosure by the disclosing Party; (iv) was independently developed by
the receiving Party without the use of the Confidential Information; or (v) was
rightfully obtained by receiving Party, without restriction, from a third party
who has the right to make such disclosure and without breach of any duty of
confidentiality to the disclosing Party. In addition, a Party receiving
Confidential Information may disclose such Confidential Information to the
extent such Party is required by law to disclose such Confidential Information,
provided that such Party shall first give reasonable advance notice of such
compelled disclosure

 

19

--------------------------------------------------------------------------------

to disclosing Party, and shall cooperate with the disclosing Party in connection
with any efforts to prevent or limit the scope of such disclosure and/or use of
the Confidential Information.

 

13. INDEMNIFICATION

13.1. General Indemnity by the Supplier. The Supplier shall indemnify, hold
harmless and defend AMO and its Affiliates, successors and assigns, and their
respective officers, directors, employees and agents, from any and all claims,
losses, liabilities, damages, judgments, penalties, settlements, expenses and
costs, including without limitation reasonable attorneys fees, professional fees
and court costs, brought by third parties, for personal injury, death or damage
to real or personal property arising out of or related to the Supplier’s
negligence, willful misconduct or omission or breach of any the Supplier
warranties under this Agreement (all of the foregoing, “Supplier General
Indemnified Claims”). AMO shall promptly notify the Supplier of any Supplier
General Indemnified Claims; provided, however, that the failure to give such
notice shall not relieve the Supplier of the Supplier’s obligations hereunder,
except to the extent that the Supplier is actually and materially prejudiced by
such failure. The Supplier shall not settle any Supplier General Indemnified
Claims without the prior written approval of AMO, which approval shall not be
unreasonably withheld or delayed. AMO shall have the right, but not the
obligation, to participate in the defense of any Supplier General Indemnified
Claim at its sole expense through counsel of its choosing without forfeiting,
reducing or otherwise affecting AMO’s right to indemnification hereunder.

 

13.2. General Indemnity by AMO: AMO shall indemnify, hold harmless and defend
the Supplier and its Affiliates, successors and assigns, and their respective
officers, directors, employees and agents, from any and all claims, losses,
liabilities, damages, judgments, penalties, settlements, expenses and costs,
including without limitation reasonable attorneys fees, professional fees and
court costs, brought by third parties for ***** (all of the foregoing, “AMO
General Indemnified Claims”). The Supplier shall promptly notify AMO of any AMO
General Indemnified Claims; provided, however, that the failure to give such
notice shall not relieve AMO of AMO’s obligations hereunder, except to the
extent that AMO is actually and materially prejudiced by such failure. AMO shall
not settle any AMO General Indemnified Claims without the prior written approval
of the Supplier, which approval shall not be unreasonably withheld or delayed.
The Supplier shall have the right, but not the obligation, to participate in the
defense of any AMO General Indemnified Claim at its sole expense through counsel
of its choosing without forfeiting, reducing or otherwise affecting the
Supplier’s right to indemnification hereunder.

 

13.3. Intellectual Property Indemnity by AMO. AMO shall indemnify, hold harmless
and defend the Supplier and its Affiliates, successors and assigns, and their
respective officers, directors, employees and agents, from any and all claims,
losses, liabilities, damages, judgments, penalties, settlements, expenses and
costs, including without limitation reasonable attorneys fees, professional fees
and court costs, brought by third parties arising out of or related to a claim
that ***** IP Indemnified Claims”). The

 

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

20

--------------------------------------------------------------------------------

Supplier shall promptly notify the Supplier of any AMO IP Indemnified Claims;
provided, however, that the failure to give such notice shall not relieve AMO of
AMO’s obligations hereunder, except to the extent that AMO is actually and
materially prejudiced by such failure. AMO shall not settle any AMO IP
Indemnified Claims without the prior written approval of the Supplier, which
approval shall not be unreasonably withheld or delayed. The Supplier’s shall
have the right, but not the obligation, to participate in the defense of any AMO
IP Indemnified Claim at its sole expense through counsel of its choosing without
forfeiting, reducing or otherwise affecting the Supplier’s right to
indemnification hereunder.

 

13.4. Intellectual Property Indemnity by Supplier. The Supplier shall indemnify,
hold harmless and defend AMO and its Affiliates, successors and assigns, and
their respective officers, directors, employees and agents, from any and all
claims, losses, liabilities, damages, judgments, penalties, settlements,
expenses and costs, including without limitation reasonable attorneys fees,
professional fees and court costs, brought by third parties, arising out of or
related a claim that any Product (to the extent such Product was designed by the
Supplier) or Product Specifications (to the extent such Product Specifications
were provided by Supplier) infringe any copyright, patent, trademark, trade
secret or other personal or proprietary right held by any third party (all of
the foregoing, “Supplier IP Indemnified Claims”). AMO shall promptly notify the
Supplier of any Supplier IP Indemnified Claims; provided, however, that the
failure to give such notice shall not relieve the Supplier of the Supplier’s
obligations hereunder, except to the extent that Supplier is actually and
materially prejudiced by such failure. The Supplier shall not settle any
Supplier IP Indemnified Claims without the prior written approval of AMO, which
approval shall not be unreasonably withheld or delayed. AMO shall have the
right, but not the obligation, to participate in the defense of any Supplier IP
Indemnified Claim at its sole expense through counsel of its choosing without
forfeiting, reducing or otherwise affecting AMO’s right to indemnification
hereunder.

 

14. GENERAL PROVISIONS

 

14.1. Integration / Modification. This Agreement is both a final expression of
the Parties’ Agreement and a complete and exclusive statement with respect to
all of its terms. The Appendices referred to in this Agreement are incorporated
herein and made a part of this Agreement by this reference. This Agreement
supersedes all prior and contemporaneous agreements and communications, whether
oral, written or otherwise, concerning any and all matters contained herein. No
trade customs, courses of dealing or courses of performance by the Parties shall
be relevant to modify, supplement or explain any term or terms used in this
Agreement. This Agreement may be modified or supplemented only in a writing
expressly stated for such purpose and signed by the Parties to this Agreement.

 

14.2. Use of Form Purchase Orders, Invoices and Other Documents. It is expressly
understood and agreed that sales of the Products to AMO shall be subject to the
provisions of this Agreement only, and any terms and conditions contained in
AMO’s purchase orders or the Supplier’s sales confirmations, invoices or other
documents that conflict with, vary from, or supplement the terms of this
Agreement shall be null and void, and the terms of this Agreement shall govern.

 

21

--------------------------------------------------------------------------------

14.3. Relationship Between the Parties. The relationship between AMO and the
Supplier shall be that of independent contractors. Nothing contained in this
Agreement shall be construed to create a partnership, joint venture or agency
relationship between AMO and the Supplier. Neither Party is a legal
representative of the other Party, and neither Party can assume or create any
obligation, liability, representation, warranty or guarantee, express or
implied, on behalf of the other Party for any purpose whatsoever.

 

14.4. Insurance. Supplier shall obtain and keep in force a commercial general
liability policy, and any necessary umbrella/excess liability insurance
policies, providing a combined single limit of ***** per occurrence with an
aggregate limit of not less than*****. Supplier shall name AMO as an additional
insured on such policy or policies of insurance, subject to approval of
regulatory authorities in India. The Supplier agrees to maintain the said policy
with a financially sound admitted carrier. Supplier shall, prior to the
Effective Date of this Agreement, deliver to AMO valid certificates of insurance
or copies of insurance binder evidencing the existence and amounts of the
required insurance. Such certificates shall reflect that AMO is named as an
additional insured on Supplier’s insurance policy. No such policy shall be
cancelable or subject to significant or material modification except after *****
prior written notice to AMO. Supplier shall promptly issue renewal certificates
of insurance or copies of insurance binders to AMO on or prior to the
termination or expiration of each insurance policy.

 

14.5. Non-Waiver. The failure of a Party to insist upon strict performance of
any provision of this Agreement or to exercise any right arising out of this
Agreement shall neither impair that provision or right nor constitute a waiver
of that provision or right, in whole or in part, in that instance or in any
other instance.

 

14.6. Remedies. Except as otherwise expressly provided herein, no remedy in this
Agreement is intended to be exclusive, but each shall be cumulative and in
addition to any other remedy referred to herein or otherwise available at law,
equity or otherwise.

 

14.7. Assignment. Neither Party shall have the right to, and each party
covenants that it will not, assign or delegate this Agreement or any of its
rights, duties or obligations hereunder without the prior written consent of the
other party. The foregoing notwithstanding, AMO shall have the right to assign
this Agreement without the consent of Supplier to any parent or subsidiary, any
entity which results from a merger or consolidation with AMO or any person or
entity which acquires all or substantially all the assets of AMO related to this
Agreement, provided AMO gives Supplier notice of such assignment and such person
or entity assumes all the obligations of AMO under this Agreement. Any
assignment, delegation or transfer, or attempt at the same, in violation of the
foregoing shall be void and without effect.

 

14.8. No Third Party Beneficiaries. This Agreement is neither expressly nor
impliedly made for the benefit of any Party other than those executing it.

 

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

22

--------------------------------------------------------------------------------

14.9. Severability. If, for any reason, any part of this Agreement is
adjudicated invalid, unenforceable or illegal by a court of competent
jurisdiction, such adjudication shall not affect or impair, in whole or in part,
the validity, enforceability or legality of any remaining portions of this
Agreement. All remaining portions shall remain in full force and effect as if
the original Agreement had been executed without the invalidated, unenforceable
or illegal part.

 

14.10. Notices. Any notice to be given under this Agreement shall be in writing
and shall be presumptively deemed given (i) when personally delivered or: (ii)
when sent by facsimile, with confirmation of receipt or: (iii) one (1) day after
having been sent by commercial overnight courier with written verification of
receipt; or (iv) seven (7) Days after having been sent by registered or
certified mail, return receipt requested, proper postage prepaid. All such
notices shall be addressed to the receiving Party at the address or addresses
set forth below or at such other addresses as either Party may specify from time
to time by written notice in accordance herewith.

 

If to Supplier, notices must be addressed to:

 

Nicholas Piramal India Limited

100 Centre Point, Dr B.A. Ambedkar Road,

Parel, Mumbai 400012

INDIA

 

Attention: Mr. N Santhanam

Chief Financial Officer, NPIL

Fax: +9122 24139536

 

If to AMO, notices must be addressed to:

 

Advanced Medical Optics, Inc.

1700 E. St. Andrew Place

Santa Ana, California 92705 U.S.A.

Attention: Russ Rinella and Peter Nolan

Fax: 714-247-8735

 

With a copy to:

 

Advanced Medical Optics, Inc.

1700 E. St. Andrew Place

Santa Ana, California 92705 U.S.A.

Attention: General Counsel

Fax: (714) 247-8679

 

14.11. Force Majeure. Neither Party shall be liable for the failure or delay in
performance of any obligation under this Agreement by reason of any event beyond
such Party’s reasonable control, including without limitation Acts of God, fire,
flood, earthquake or other natural forces, war, civil unrest, actions or decrees
of governmental bodies, accident, casualty, freight embargoes, worldwide
shortage of raw materials or equipment, failure or delay by vendors or labor
disputes (a “Force Majeure Event”). Such excuse from liability shall be
effective only to the extent and duration of the Force

 

23

--------------------------------------------------------------------------------

Majeure Event and provided that the affected Party has not caused such Force
Majeure Event to occur. Notice of a Force Majeure Event must be given to the
other Party within ten (10) working days after its occurrence. All Shipment
Dates under this Agreement that have been affected by a Force Majeure Event
shall be tolled for the duration of such Force Majeure Event. If the Force
Majeure Event continues for more than *****, the Party whose performance is not
affected by the Force Majeure Event shall have the right, effective immediately
upon written notice, to cancel any or all outstanding purchase orders and/or
terminate this Agreement.

 

14.12. Confidential Relationship. The Supplier shall not use the name or
trademarks of AMO or its Affiliates, directly or indirectly, in any press
release, advertisement, endorsement or any other form of publicity without the
prior written consent of AMO. The Supplier shall not, without the prior written
consent of AMO, disclose the existence of this Agreement or any terms and
conditions of this Agreement, except: (i) as may be required to implement or
enforce the terms of this Agreement, (ii) as may be required by legal
proceedings or law, and (iii) in confidence to the Supplier’s accountants and
attorneys.

 

14.13. Choice of Law, Forum and Jurisdiction. This Agreement shall be governed
by and construed both as to validity and performance in accordance with English
law without prejudice to its conflict of laws rules. In the event of a dispute
the Parties agree first to negotiate amicably for settlement of all such
disputes. If a dispute cannot be resolved through negotiation, it will be
referred for arbitration under the rules of conciliation and arbitration of the
International Chamber of Commerce by one or more arbitrators appointed in
accordance with the said rules. The place of arbitration will be London, U.K.
The arbitration shall be held in the English language.

 

14.14. Attorney Fees. In the event any litigation or other proceeding is brought
by either Party arising out of or relating to this Agreement, the prevailing
Party in such litigation or other proceeding shall be entitled to recover from
the other Party all costs, attorney fees, professional fees and other expenses
incurred by such prevailing Party in such litigation or proceeding.

 

14.15. Captions and Headings. The captions and section and paragraph headings
used in this Agreement are inserted solely for convenience and ease of reference
and shall not constitute any part of this Agreement, or have any effect on its
interpretation or construction.

 

14.16. Days. All references to days in this Agreement shall mean calendar days,
unless otherwise specified.

 

14.17. Ambiguities. Ambiguities and uncertainties in this Agreement, if any,
shall not be interpreted against either Party, regardless of which Party may be
deemed to have caused the ambiguity or uncertainty to exist.

 

--------------------------------------------------------------------------------

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

24

--------------------------------------------------------------------------------

14.18. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original document and all of which together
shall be deemed one instrument.

14.19. Further Assurances. Each Party to this Agreement shall, at its own
expense, furnish, execute, and deliver all documents and take all actions as may
reasonably be required to effect the terms and purposes of this Agreement.

 

IN WITNESS WHEREOF, the Parties, intending to be bound hereby, have executed
this Agreement as of the date first set forth above.

 

ADVANCED MEDICAL OPTICS, INC.

     

NICHOLAS PIRAMAL INDIA LIMITED

By:   /s/    JAMES V. MAZZO               By:   /s/    SWATI A. PIRAMAL        
   

--------------------------------------------------------------------------------

         

--------------------------------------------------------------------------------

Name:   JAMES V. MAZZO       Name:   DR. SWATI A. PIRAMAL    

--------------------------------------------------------------------------------

         

--------------------------------------------------------------------------------

Title:   President and Chief Executive Officer       Title:   Director    

--------------------------------------------------------------------------------

         

--------------------------------------------------------------------------------

Date:   November 17, 03       Date:   November 19, 03    

--------------------------------------------------------------------------------

         

--------------------------------------------------------------------------------

 

25