Exhibit 10.9






Amended and Restated Exclusive
Supply Agreement


 by and
among  




NuSil Corporation 

a
California corporation


 SiTech, Inc.

a
California corporation




and


 Mentor Corporation

a
Minnesota corporation





 


July 6, 2004


 





 


EXCLUSIVE SUPPLY AGREEMENT:  Page 1


 



 

 




  	 	

TABLE OF CONTENTS


      
	Section  	 Page
	  	 
	1...... DEFINITIONS.  
      	1
	 	1.1      Affected
Material.  	1
	 	1.2      Affiliate.  
      	1
	 	1.3      Applicable
Requirements.  	2
	 	1.4      Delivery
Date.  	2
	 	1.5      Effective
Date.  	2
	 	1.6      Equivalent
Material.  	2
	 	1.7      FDA.  
      	2
	 	1.8      Improvements.  
      	2
	 	1.9      Initial
Materials.  	2
	 	1.10    Initial
Month.  	2
	 	1.11    Long-Term
Implantable Materials.  	2
	 	1.12    Market
Segment.  	2
	 	1.13    Material.  
      	2
	 	1.14    Mentor.	2
	 	1.15    Non-Long-Term
Implantable Materials.  	2
	 	1.16    NuSil.  
      	2
	 	1.17    Products.  
      	2
	 	1.18    Qualified
Alternative Supplier.	2
	 	1.19    Supplier.  
      	3
	 	1.20    Term.  
      	3
	 	1.21    Transfer
Agreement.  	3
	 	1.22    Year.  
      	3
	 	  	 
	2...... SALE AND PURCHASE OF MATERIALS.  
      	3
	 	2.1      Delegation
of Supplier's duties to SiTech.  	3
	 	2.2      Supply
of Materials.  	3
	 	2.3      Specifications;
Regulatory Compliance; Manufacturing.	6
	 	2.4      Purchase
Orders; Forecasts.  	8
	 	2.5      Fulfillment
by NuSil.  	8
	 	2.6      Labeling
and Packaging.  	9
	 	2.7      Delivery.  
      	9
	 	2.8      Supplier's
Compliance Certificate; Invoice.  	9
	 	2.9      Rejection
and Inspection of Material.  	9
	 	  	 
	3...... PRICES, TERMS AND PAYMENTS.	10
	 	3.1      Certain
Definitions for Computation Purposes.  	10
	 	3.2      Price
List.  	11
	 	3.3      Most
Favored Nation Pricing.  	11
	 	3.4      Credits
against Purchase Price.  	12
	 	3.5      Books
and Records; Reports.  	12
	 	3.6      Annual
Report.  	12
	 	3.7      Audits.  
      	13
	 	3.8      Price
Adjustments.  	13
	 	3.9      Method
of Payment.  	14
	 	3.10    Past
Due Amount.  	14





 


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TABLE OF CONTENTS (CONT'D)


    
	Section  	 Page
	  	 
	4...... PARTIAL TERMINATION AND PENDING
DISPUTES.  	14
	 	4.1      Failure
to Supply.  	14
	 	4.2      Termination
Right.	15
	 	  	 
	5...... TERMINATION, RIGHTS, AND OBLIGATIONS
UPON TERMINATION	15
	 	5.1      Term.  
    	15
	 	5.2      Termination
for Cause.  	15
	 	5.3      Termination
by Supplier.	15
	 	5.4      Mentor
Purchase of SiTech Assets.  	15
	 	5.5      Liability
of Mentor upon Termination for Default.  	16
	 	5.6      Liability
of Supplier upon Termination for Default.  	16
	 	5.7      Effect
of Expiration or Termination.  	16
	 	5.8      Return
of Property.  	16
	 	5.9      Enumerated
Remedies not Exclusive.	16
	 	5.10    Continuation
after Expiration of Initial Term.	16
	 	  	 
	6...... REPRESENTATIONS, WARRANTIES AND
COVENANTS.	16
	 	6.1      Vendor
Audit Rights.  	16
	 	6.2      No
Rights Created.  	17
	 	6.3      Rights,
Power, Authority and Binding Obligation.	17
	 	6.4      Compliance
with Law.  	17
	 	6.5      Fulfillment
Facilities.  	17
	 	6.6      No
Infringement.	17
	 	6.7      Production
Capacity.  	17
	 	6.8      Confidential
Information.	17
	 	6.9      Duty
to Keep Books and Records.  	18
	 	6.10    Intellectual
Property.  	19
	 	6.11    Warranties.  
    	19
	 	6.12    Reports
by Mentor.  	19
	 	  	 
	7...... INDEMNIFICATION..	19
	 	7.1      Indemnification
by Mentor.  	19
	 	7.2      Indemnification
by SiTech.  	19
	 	  	 
	8...... MISCELLANEOUS.  
    	20
	 	8.1      Effective
Date and Implementation.  	20
	 	8.2      Amendment
and Waiver.  	20
	 	8.3      Governing
Law and Legal Actions.	21
	 	8.4      Notice
and Reports.  	21
	 	8.5      Entire
Agreement.  	21
	 	8.6      Severability.  
    	21
	 	8.7      Relationship
of Parties.  	21
	 	8.8      Delegation
of Duties.	21
	 	8.9      Assignment.  
    	21
	 	8.10    Publicity
and Press Releases.  	22
	 	8.11    Force
Majeure.	22
	 	8.12    Counterparts.	22



 


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Amended
and Restated Exclusive Supply Agreement


            This Amended and Restated Exclusive
Supply Agreement (the "Agreement") is dated for
reference purposes as of  July 6, 2004, and effective as
of the "Effective Date" identified below, by and among NUSIL
CORPORATION, a California corporation ("NuSil"); SiTech, Inc.,
a California corporation that is wholly owned by NuSil ("SiTech"
and, collectively with NuSil, the "Supplier"), and Mentor
Corporation, a Minnesota corporation ("Mentor"),
with reference to the following facts:


         Recitals:


A.                
Alchemy
Engineering, LLC, a California limited liability company doing
business under the fictitious business name of "SiTech" ("Alchemy"),
is an Affiliate of NuSil.


B.                
Mentor and Alchemy executed that certain Exclusive Supply Agreement
dated effective September 16, 1997 (the "Original Supply Agreement"),
pursuant to which Alchemy has manufactured and sold to Mentor certain Materials
(as defined in Section 1.13 below) which are used by Mentor in the manufacture of its Products (as defined in Section 1.17 below).


C.                
In order to provide Mentor with a means of assuring itself a continuing
source of supply of the Materials, NuSil and Alchemy entered into an Option and
Asset Purchase Agreement with Mentor dated effective as of September 16, 1997
(the "Option Agreement") pursuant to which Mentor was granted
an option to purchase the assets of Alchemy, and Mentor has given notice of the
exercise of such option. 


D.                
Mentor and NuSil have now agreed that the rights of Mentor under the
Option Agreement should be transferred to SiTech, Inc., a newly formed,
wholly-owned subsidiary of NuSil ("SiTech"), in exchange for
the agreement of NuSil and SiTech to supply the Materials  to
Mentor for a period of twenty (20) Years.


E.                 
Mentor, NuSil and SiTech are therefore executing this Agreement in order
to replace and supersede the Original Supply Agreement and to memorialize (1)
the terms and conditions on which SiTech and NuSil jointly and severally agree
to produce and supply the Materials after the assignment of the Option
Agreement to SiTech, and (2) Mentor agrees to acquire such Materials from NuSil
and  SiTech following the
acquisition by SiTech of the assets of Alchemy.  


        AGREEMENTS:


       Now, Therefore, in
consideration of the premises and the mutual promises and covenants set forth
below, NuSil, SiTech and Mentor mutually agree as follows:


1.    DEFINITIONS.


For purposes of this Agreement, (a) the words
and phrases defined in Section 3.1 below shall have the meanings ascribed to them in that Section and (b) the following terms and phrases shall have the meanings set forth below:


1.1             
Affected
Material.   Any Material that Supplier is unable to supply to Mentor
(a) at the time and in the quantity required by this Agreement or (b) in
conformity with the specifications for such Material and in compliance with
Applicable Requirements.


1.2             

Affiliate. 
Any one of (a) any
company owned or controlled to the extent of at least fifty percent (50%) of
its issued and outstanding voting stock by a party to this Agreement and any
other company so owned or controlled (directly or indirectly) by any such
company or the owner of any such company, and (b) any partnership, joint
venture or other entity directly or indirectly controlled by, controlling, or
under common control of, to the extent of fifty percent (50%) or more of voting
power) or otherwise having power to control its general activities), a party to
this Agreement, but in each case only for so long as such ownership or control
shall continue.


 


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1.3             

Applicable Requirements.  Has the meaning assigned thereto in Section 2.3.1,
below.


1.4             

Delivery Date.  A date for which delivery of a Material to Mentor is
properly requested by Mentor in a written purchase order.


1.5             

Effective Date.   May 8, 2004.


1.6             

Equivalent Material.  Any material that is equivalent to or substantially the
same as a Material.


1.7             

FDA. 
The United States Food and Drug
Administration.


1.8             

Improvements.   Any change in a Material or a component
of a Material, or in the processes, procedures, methods or techniques used in
its manufacture, production or assembly, that enhances the safety, efficacy or
performance of such Material or that makes such Material quicker, easier or
less expensive to manufacture, assemble, distribute, store, use or dispose of. 


1.9           
 Initial Materials.  Those Materials that Supplier is initially supplying to
Mentor as of the Effective Date, and any substantially equivalent materials
that may be supplied to Mentor by any Qualified Alternative Supplier.


1.10         

Initial Month.
The second full calendar month following the date on
which this Agreement has been executed by each of the parties to this
Agreement.  


1.11         

Long-Term Implantable Materials. 
Silicone materials that are designed to
be implanted in the human body for a period of time greater than twenty-nine
(29) days.


1.12         

Market Segment.
A discrete portion of the market (defined by reference
to the territory to which Products are shipped, the type of Product shipped, or
other similarly specific factors) to which Mentor sells Products containing
Materials supplied by Supplier hereunder.


1.13         

Material.  Any material manufactured by Supplier as set forth in Exhibit A
to this Agreement, any variation of such material resulting from any
Improvements to such material, and any other Long-Term Implantable Material or
Non-Long-Term Implantable Material that Supplier may hereafter supply to Mentor
pursuant to Section 2.2 below.


1.14         

Mentor.
 Mentor and/or each of its wholly-owned Affiliates.


1.15         

Non-Long-Term Implantable Materials.  
Silicone materials other than Long-Term
Implantable Materials.  


1.16         

NuSil. 
NuSil Corporation, a California
corporation, and each of its Affiliates.  


1.17         

Products.
 Silicone or other synthetic implants that replace,
reconstruct, expand, enhance, augment or improve the functioning or appearance
either of human tissue or human organs or both.


1.18         

Qualified Alternative Supplier.
 A person or entity that is reasonably qualified to
produce or supply a Material or Equivalent Material of the type, in the
quantity, and at the same levels of reliability and quality that Supplier
delivers (or is entitled to deliver) hereunder for use in the Products marketed
and sold by Mentor.


 


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1.19         
Supplier.  Collectively, NuSil
and SiTech, who shall be jointly and severally liable for the performance of
the obligations of the Supplier under this Agreement.


1.20         

Term.
 A period of twenty (20) Years, measured from the
Effective Date of this Agreement.   


1.21         

Transfer Agreement.  
That certain Transfer Agreement by and
among SiTech, Mentor and NuSil being executed by the parties concurrently with
the execution of this Agreement pursuant to which the Option is being
transferred by Mentor to SiTech.


1.22         

Year.  
A period of twelve (12) consecutive
months commencing on the Effective Date of this Agreement and on each
succeeding annual anniversary of the Effective Date.


2.                 
SALE AND PURCHASE OF MATERIALS


2.1             

Delegation of Supplier's duties to SiTech.
 For as long as SiTech is an Affiliate of NuSil, NuSil
shall delegate to SiTech all of the duties and obligations of the Supplier
under this Agreement and may assign to SiTech all of the rights and benefits of
this Agreement, and SiTech shall accept such delegation and any such assignment
and shall perform all of the duties of the Supplier hereunder.


2.1.1       
No such delegation or assignment shall release NuSil from its
obligations as a Supplier under this Agreement.  For as long as the duty to
perform the obligations of the Supplier under this Agreement has been delegated
solely to SiTech, NuSil shall (a) take those actions in its capacity as the
sole shareholder of SiTech as are necessary or appropriate to enable SiTech to
perform the duties and obligations delegated to it under this Agreement, and
(b) refrain from taking any action that would impair or interfere with the
ability of SiTech to perform the duties and obligations delegated to under this
Agreement.


2.1.2       
If for any reason SiTech fails to perform any of the duties and
obligations of the Supplier under this Agreement, then NuSil shall immediately
resume the performance of such duties and obligations as fully and completely
as if this Agreement were solely between Mentor and NuSil.


2.1.3       
Mentor, upon request of Supplier from time to time, shall conduct
such tests and inspections as may be reasonably necessary in order to verify
that NuSil and its Affiliates appear to be qualified, under Applicable
Requirements and the requirements of Mentor, to supply Materials to Mentor from
facilities other than the SiTech facilities in Irving, Texas, but no such
verification given by Mentor shall (a) constitute a certification by Mentor
that Supplier is in compliance with Applicable Requirements or (b) relieve
Supplier of its obligation to comply with all Applicable Requirements or (c)
constitute or be construed to constitute a waiver by Mentor of its rights to
require Supplier to remedy any noncompliance that did not come to the attention
of Mentor during any such tests and inspections, whether due to the negligence
of Mentor or otherwise 


2.2             
Supply of
Materials.


2.2.1       

Manufacture by Supplier. 
Supplier hereby agrees to manufacture for, and deliver to Mentor, and Mentor
agrees to purchase from Supplier, such quantities of the Materials listed on Exhibit A
hereto as may be necessary to meet Mentor's requirements based upon such
written purchase orders and forecasts provided pursuant to Section 2.4 of this Agreement.  In the event that Mentor's requirements differ significantly (by more than 25%) from the forecasts, Mentor will promptly notify Supplier of the fact and the amount of such variance.  Supplier shall use
commercially reasonable efforts to satisfy any increases in Mentor's
requirements over its binding and non-binding forecasts as provided for in
Section 2.4.1.  The parties hereto acknowledge and agree that Supplier may
manufacture or sell other products to any third party.  


 


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2.2.2       

Mentor Purchase Commitments.  Subject to Supplier's discharge of
its obligations under this Agreement and the provisions of Sections 2.2.2A and 4 below, during the term of this Agreement Mentor (a) shall purchase solely from Supplier all Long-Term Implantable Materials (and any alternative materials having substantially the same specifications and functionality as
the Materials) required by Mentor, and (b) shall not purchase any Non-Long-Term
Implantable Materials from any Person other than Supplier without first (i)
delivering to Supplier a detailed written summary of the specifications and
proposed purchase price of such Non-Long-Term Implantable Materials, and (ii)
negotiating exclusively with Supplier, in good faith, for fourteen (14) days
regarding whether and on what terms Supplier may fulfill Mentor's requirements
for such Non-Long-Term Implantable Materials; provided that,
notwithstanding the foregoing:


A.                
Alternative
Supply.  If either (1) Mentor  identifies
a Qualified Alternative Supplier for any Material for use in an identified
Market Segment at a cost that is less than the price charged by Supplier
hereunder, or (2) a Material supplied by Supplier hereunder, in the reasonable
judgment of Mentor,
does not satisfy the reasonable requirements of Mentor for quality,
reliability and timeliness, then Mentor
shall deliver written notice of such circumstances to Supplier, including a
description of the events or circumstances occasioning the invocation of this
Section 2.2.2A, the name and location of the proposed alternative supplier, a description of the Market Segment affected, and all other relevant circumstances.


(1)               
Supplier
thereafter may elect, within thirty (30) days following the receipt of such
written notice from Mentor, either to lower its price for such Material or to
modify its manufacturing practices to meet the reasonable requirements of
Mentor, as applicable under clause "(1)" or "(2)" of
Section 2.2.2A above.  If Supplier fails, within that 30-day
period, either to meet the alternative supplier's price or to meet Mentor's
reasonable requirements, as applicable, then Mentor thereafter shall be released
from its exclusivity commitment with respect to such Material under this
Agreement and may procure such Material from the Qualified Alternative Supplier
(with respect to clause "(1)", above) or any other supplier (with respect to
clause "(2)", above). 


(2)               
An
election by Mentor to procure Materials from a Qualified Alternative Supplier
pursuant to clause (1) of Section 2.2.2A above shall release Supplier from its
obligations under this Agreement only with respect to those Materials being
purchased by Mentor from the Qualified Alternative Supplier and only for as
long as Mentor elects to procure such Materials from such Qualified Alternative
Supplier.  Mentor shall be entitled at any time to resume procuring the
Materials from SiTech or NuSil in accordance with the provisions of this
Agreement provided that either SiTech or NuSil is still in the business of
producing such Materials.  A suspension in the purchase of Materials by Mentor
pursuant to this Section 2.2.2A shall not toll the term of this
Agreement or result in an extension of its term.


B.    
NuSil Election
to Discontinue. 
If in any period of twelve (12) consecutive calendar months during the term of
this Agreement Mentor's purchases of Initial Materials from one or more
Qualified Alternative Suppliers ("QAS Procured Initial Materials") are, in the
aggregate, more than twenty percent (20%) of the total dollar volume of its
aggregate purchases of Initial Materials, including those procured from a Qualified
Alternative Supplier and those procured from Supplier (the "Total Procured
Initial Materials"), then Supplier may elect to deliver to Mentor a written
notice of Supplier's intent to discontinue supplying Mentor pursuant to this
Agreement (a "Preliminary Notice"), specifying the date on which such
discontinuation will become effective, not less than ninety (90) days prior to
such effective date.


(1)    Within thirty (30) days of its receipt of
any such Preliminary Notice, Mentor may elect to adjust the quantity of the
Initial Materials Mentor is purchasing from Supplier and any Qualified
Alternative Suppliers such that its purchases of the QAS Procured Initial
Materials will not exceed twenty percent (20%) of the Total Procured Initial
Materials.  Mentor shall notify NuSil of any such election (an "Adjustment
Election") within thirty (30) days of Mentor's receipt of Supplier's
Preliminary Notice.  If Mentor timely gives Supplier written notice of an
Adjustment Election, then during the sixty (60) days following its delivery of
the Adjustment Notice (the "Adjustment Period"), Mentor shall make the
adjustments to its purchases of the Initial Materials being procured from
Supplier and from Qualified Alternative Suppliers to amounts such that, if its
purchases during the Adjustment Period were to continue at the same level for
the twenty-four (24) full calendar months following its delivery of the
Adjustment Election (the "Remedial Period"), its QAS Procured Initial Materials
during such 24-month Remedial Period would not exceed twenty percent (20%) of
the Total Procured Initial Materials during the Remedial Period. 


 


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a.      
If
Mentor does not timely give an Adjustment Notice, or if, after timely giving an
Adjustment Notice, Mentor fails during the Adjustment Period to make the
adjustments to its purchases of the Initial Materials required by subparagraph 2.2.2B(1) above, then the provisions of 2.2.2B(2) below shall apply and Supplier shall be
entitled to discontinue supplying Mentor under this Agreement on the effective
date specified in the Preliminary Notice.


b.      
If
Mentor timely gives an Adjustment Notice and thereafter during the Adjustment
Period makes the adjustments to its purchases of the Initial Materials required
by subparagraph  2.2.2B(1) above, then Supplier's Preliminary Notice
shall automatically be suspended for as long as Mentor's purchases of the QAS
Procured Initial Materials do not exceed twenty percent (20%) of the Total
Procured Initial Materials.


c.      
If
at any time during the 24-month Remedial Period Mentor's purchases of the QAS
Procured Initial Materials, in the aggregate, exceed twenty percent (20%) of
Total Procured Initial Materials, then Supplier shall be entitled to
discontinue supplying Mentor pursuant to this Agreement by giving Mentor notice
of its intent to do so, specifying the effective date on which it shall
discontinue supplying Mentor, not less than ninety (90) days prior to such
effective date (a "Discontinuation Notice") at any time prior to the expiration
of the Remedial Period.  If a Discontinuation Notice is not properly given by
Supplier prior to the expiration of the Remedial Period, then the Preliminary
Notice shall automatically be cancelled and Supplier shall not be entitled to
discontinue supplying Mentor under this Agreement without first again giving a
Preliminary Notice in accordance with the provisions of this Section 2.2.2B and affording Mentor the opportunity to
make an Adjustment Election.


(2)    If Supplier becomes entitled to
discontinue supplying Mentor pursuant to any provision of this Section 2.2.2B, then during
the ninety (90)-day period following its receipt of any Preliminary Notice or any
Discontinuation Notice given pursuant to this Section 2.2.2B (the "Option Period"):


a.      
Mentor
may elect to purchase the assets of SiTech in accordance with the terms and
conditions set forth in Sections 4.1 and 5 of the Transfer Agreement
(the "SiTech Purchase Option").  If Mentor elects to exercise the SiTech
Purchase Option, then Mentor shall deliver to SiTech within such 90-day Option Period an irrevocable, binding election
to purchase such assets.  The purchase and sale of the SiTech assets thereafter
shall close at the time, in the manner, and with such mutual deliveries as are
required under Section 5 of the Transfer Agreement.   If Mentor fails
to timely exercise its purchase option and close the purchase of SiTech's
assets in accordance with the foregoing subparagraph (a), then at the
expiration of the 90-day Option Period Supplier shall be entitled to
discontinue supplying Mentor under this Agreement.  


b.      
The
parties shall also negotiate in good faith such other prices or terms for the
Materials as may be mutually acceptable to the parties, in their respective
sole discretion.  If the parties agree upon such alternative prices or terms
within such subsequent 90-day period, then (a) this Agreement shall remain in
full force and effect as modified by such agreement regarding alternative
prices and terms and (b) the Discontinuation Notice shall be cancelled.  If the
parties fail to reach agreement upon such alternative prices or terms within
such 90-day period, then Supplier may elect to terminate this Agreement
pursuant to Section 5.3 below.


 


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C.                 
Suspension of
Obligation.  Mentor's obligation to purchase a Material
exclusively from Supplier and Supplier's obligation to manufacture and sell
such Material to Mentor may be suspended for not more than ninety (90) days
after the filing by Supplier of a Master Access File for that Material with the
FDA to the extent necessary to enable Supplier or Mentor to perform such
clinical testing or other procedures as may be required by the FDA as a
condition to its approval of the marketing and sale of such Material or a
Product of which such Material is a component.


2.2.3       

Materials.  Supplier
shall maintain an inventory of raw materials and finished goods sufficient to
assure that at all times during the term of this Agreement Supplier can ship
and deliver to Mentor within thirty (30) days a three (3) month supply of the
Materials to be purchased by Mentor pursuant to the terms of this Agreement
after taking into account shipments made during the preceding thirty (30) days
(the "Minimum Inventory Level").  Upon written request of
Mentor from time to time (but in all events not more frequently than once in
any consecutive three (3) month period), Supplier shall provide to Mentor
within thirty (30) days of written request therefor a list of Supplier's raw
materials and finished goods inventory as of the last day of the last preceding
calendar month.  Mentor shall have the right, but not the obligation, to
conduct an annual audit of Supplier, at Mentor's expense, to satisfy itself
that such Minimum Inventory Level is being met.  In the event that Mentor's
audit or any Supplier report reveals that Supplier is not maintaining the
Minimum Inventory Level for each necessary raw material, Mentor may, at its
sole option, but shall not be obligated to purchase a three (3) month supply of
any such raw material and store such raw material at Supplier's facility at any
time when Supplier's inventory (including any inventory provided by Mentor hereunder)
is below (the "Minimum Inventory Level").  Supplier shall use
any such raw material purchased by Mentor prior to using any raw materials
thereafter purchased by Supplier and shall reimburse Mentor the amount of
Mentor's actual cost for such raw materials upon Supplier's use of the raw
material purchased by Mentor.  An election by Mentor not to purchase and store
an inventory of raw materials at Supplier's facility shall not excuse a default
by Supplier in its duty to timely supply Mentor as provided by Section 2.4
below. 



2.3             
Specifications;
Regulatory Compliance; Manufacturing.


2.3.1       

Product specifications. 
Supplier shall manufacture the Materials in accordance with the specifications therefor
to which Supplier has been manufacturing such Materials prior to the date
hereof.  Supplier's Manufacturing operations shall be in conformance with the
requirements of the United States Food and Drug Administration applicable to
Supplier, the Quality System Regulations as promulgated or modified by the FDA
from time to time ("QSRs"), and the requirements of other cognizant
foreign, federal, state, and local regulatory authorities applicable to
Supplier (collectively, the "Applicable Requirements"). 
Supplier shall not deviate in any way whatsoever therefrom without the prior
written consent of a duly authorized representative of Mentor.  


A.                
In the event Mentor determines that Supplier is not in compliance with
Applicable Requirements, including without limitation applicable QSRs, Mentor
shall promptly deliver to Supplier written notice of such non-compliance
("Non-compliance Notice").  Supplier shall create and deliver
to Mentor an action plan to address any such non-compliance (the "Action
Plan") within fifteen (15) days of its receipt of the Non-compliance
Notice.  The Action Plan shall be mutually agreeable to Mentor and Supplier,
including the time period and the action(s) necessary to correct any
non-compliance by Supplier.  In no event shall the time period set forth in the
Action Plan to correct any current non-compliance exceed twelve (12) months
from the date of Supplier's receipt of the Non-compliance Notice.


 


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(1)               
In the event Supplier fails to cure any such non-compliance within the
time period set forth in the Action Plan, Mentor shall have the right, but not
the obligation, to terminate this Agreement pursuant to Section 5.2.5
below with respect to the Affected Material or to elect to have some or all of the Affected Materials supplied by a third party supplier pursuant to Section 4 below.  


(2)               
The termination of this Agreement by Mentor pursuant to this
Section 2.3.1 shall be without prejudice to any other rights and remedies Mentor may have by reason of the breach by Supplier of its obligations under this Agreement.


B.    
For any changes to the specifications for any Materials requested by
Mentor which are not required to comply with Applicable Requirements, including
without limitation, applicable QSRs, Mentor shall deliver to Supplier written
notice of such desired changes, and Supplier shall use its commercially
reasonable efforts to implement such changes requested by Mentor.  The parties
hereto agree to work together in good faith to implement any such changes to
the specifications.  Supplier shall charge for such work at rates equal to its
established hourly rates for the research, technical and engineering personnel
actually performing such work, and Mentor shall reimburse the charges therefor
promptly upon receipt of an itemized invoice therefor.  Notwithstanding any
other provision hereof to the contrary, Supplier shall be entitled to increase
the prices for the Improved Materials containing such changed specifications by
the amount of any increase in Supplier's costs of materials and other direct
manufacturing costs.


2.3.2       

Master Access File. 
Supplier shall establish, file with the FDA and maintain in accordance with the
requirements of the FDA a Master Access File ("Master Access File")
with respect to the Materials.


A.                 
Subject to Paragraphs B and C, below, upon Mentor's request, Supplier
shall:


(1)   
Provide Mentor with a table of contents of any other summary information
regarding the Master Access File that Mentor may reasonably request, but nothing
in this Section 2.3.2 shall require Supplier to disclose any confidential information in such table of contents. 


(2)   
Authorize the FDA to access on behalf of Mentor any Master Access File
of Supplier pertaining to the Materials (provided that, this clause
"(2)" is not intended and shall not be construed to avoid the
limitations imposed by Sections 2.3.2 B and C, below).


(3)   
Provide Mentor with such information as Mentor may reasonably request
relative to the interpretation or application of data contained in the Master
Access File in order to support (A) any filing or application then pending
before the FDA or any other United States or foreign government agency, or (B)
any proceedings then being conducted by or before the FDA or any other United
States or foreign government agency, or (C) any pending or threatened
litigation or other proceeding involving Materials to which Mentor is or may
become a party. 


(4)   
Certify to or on behalf of Mentor that any Materials delivered hereunder
meet the specifications contained in the Master Access File and are
manufactured in compliance with Applicable Requirements.


(5)   
Notify Mentor of the nature and extent of any deficiency alleged by the
FDA to exist in the Master Access File and any actions that Supplier proposes
to take to remedy any such deficiency required to be remedied to satisfy
Applicable Requirements.  


B.                 
Notwithstanding Paragraph A of this Section 2.3.3, as a condition
of NuSil's delivering any of the information contemplated by subparagraphs (1)
through (5) of the foregoing Paragraph A, Supplier may require Mentor to
execute and deliver an appropriate confidentiality agreement or nondisclosure agreement as a condition to the
disclosure of any proprietary information requested by Mentor hereunder.


 


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C.    
Notwithstanding Paragraph A of this Section 2.3.3, in no event
shall Mentor be entitled to have access to, or shall Supplier be required to
disclose hereunder, any information containing Supplier's manufacturing
processes for Materials except in the connection with the transfer of the SiTech
Assets to Mentor upon exercise by Mentor of the SiTech Purchase Option
contained in the Transfer Agreement.  



2.4             
Purchase
Orders; Forecasts.


2.4.1       

Forecast.  Mentor
shall deliver to Supplier within five (5) days after the execution of this
Agreement by each party (a) Mentor's rolling non-binding forecast of its
requirements for the Materials for the twelve (12) month period commencing with
the first day of the Initial Month, and (b) a written purchase order setting
forth the quantities and Delivery Dates for Mentor's first purchase order of
Materials for the sixty (60) day period commencing with the Initial Month. 
Thereafter, Mentor shall deliver to Supplier on a monthly basis (or at such
other intervals as Mentor and Supplier mutually agree upon, but in no event
longer than ninety (90) days), an updated non-binding forecast of its
requirements for the ensuing twelve (12) month period and a binding update of
its quantity requirements and purchase order for such Materials for the ensuing
sixty (60) day period or such longer period as the parties agree.  


2.4.2       

Purchase Orders. 
Each written purchase order shall specify the Delivery Date and shall include a
reference to this Agreement.  Supplier shall acknowledge within three (3)
business days after receipt of any written purchase orders submitted by Mentor
(a) its receipt of such purchase order,  (b) its ability or inability to
fulfill the above-described sixty (60) day forecasts and (c) if it is unable to
fulfill the order, the reasons why.  The terms and conditions of this Agreement
will control over any terms contained in any Mentor written purchase order,
written acceptance or acknowledgement by Supplier, invoice or any other
document that is not expressly identified as an amendment to this Agreement and
signed by both parties.


2.4.3       

Priority of Shipments to Mentor and
Other Customers.  Supplier
shall afford all purchase orders for the Materials received from Mentor equal priority with Supplier's own supply
requirements and orders from other customers or distributors for both the
Materials, Equivalent Materials, and other similar products manufactured by Supplier.  Supplier will ship all
orders for Materials, and for other products manufactured or supplied by
Supplier to others, in the priority in which such orders were received, and Supplier will not place any
purchase orders for Materials received from Mentor on a back-order
status if Supplier
is then shipping Materials, Equivalent Materials other products manufactured or
supplied by Supplier
to its other customers or distributors.  In addition, if Supplier is unable to
satisfy the requirements of Mentor and of any third party whose purchase orders
precede those submitted by Mentor, then Supplier shall not refuse or refrain
from filling Mentor's purchase orders, but rather shall fill Mentor's purchase
orders in proportion to its Purchase Ratio as compared to the Purchase Ratio of
any such third party.  For purposes of this provision, Mentor's "Purchase
Ratio" shall equal whichever of the following accords Mentor a higher
allocation of Materials with respect to the competing purchase orders:  (i) the
ratio of Mentor's then-pending purchase order size (determined by the
dollar-denominated price of such Purchase Order) to the then-pending (and earlier-submitted)
purchase order size (as also determined by the dollar-denominated price of such
purchase order) of such other third-party; or (ii) the ratio of Mentor's prior
12-months' purchases to the prior 12-month's purchases of such other third-party
that submitted an earlier purchase order.


2.5             

Fulfillment by NuSil.  Supplier may from time to time elect to have any order
for Materials hereunder fulfilled by NuSil from NuSil's facilities, but nothing
in this Section 2.5 is intended, and this Section 2.5 shall not be construed, to be in derogation of (a) the obligation of NuSil under Section 2.1 to delegate the performance of its duties and obligations hereunder to SiTech or (b) the obligation of SiTech under Section 6.7 to maintain the capacity to produce and supply the Materials to Mentor.


 


EXCLUSIVE SUPPLY AGREEMENT:  Page 8


 



 

 



2.6             

Labeling and Packaging.  Supplier shall label the Materials in accordance with
the labeling specifications set forth in this Section 2.6.  Unless Mentor otherwise requests, all Materials ordered by Mentor shall be packed for domestic shipment and storage in accordance with Supplier's standard commercial practices.  Supplier will mark all containers
with necessary handling and shipping information, including but not limited to
any special handling that may be required, and will provide an itemized packing
list with each shipment which shall include (a) the purchase order number(s) prominently
marked, (b) the quantity of the Material shipped, (c) the date of shipment, (d)
supplier parts number, (e) supplier parts description, (f) supplier lot number,
(g) net weight and (h) the warranty period.  Mentor shall notify Supplier of
any special packaging requirements, which shall be at Mentor's expense.


2.7             

Delivery.
 All Materials delivered to Mentor shall be  FOB Supplier's facilities set forth in each written purchase
order (or, at the election of Supplier pursuant to Section 2.5 above, NuSil's facilities).  Supplier shall use its best efforts and the latest and most efficient delivery systems to deliver the Materials no sooner than three (3) days prior to the applicable Delivery Dates and no
later than the applicable Delivery Date.  Supplier shall use its best efforts
to assist Mentor in arranging any desired insurance (in amounts that Mentor
shall determine) and transportation, via air freight unless otherwise specified
in writing, to any destination specified in writing from time to time by
Mentor.  All customs, duties, costs, taxes, insurance premiums, and other
expenses relating to such transportation and delivery, shall be at Mentor's
expense.


2.8             

Supplier's Compliance Certificate;
Invoice.
 All Materials delivered to Mentor
shall be accompanied by a certificate, signed by the President or the most
senior Quality Assurance Manager of Supplier at such time indicating that the
Materials being delivered (a) have been tested by Supplier, (b) meet the
specifications therefor and are in compliance with applicable QSRs and all
other Applicable Requirements, and (c) are free from any manufacturing defects.  An invoice for the amount due for the Materials shall be
sent separately by Supplier to Mentor's accounts payable department.


2.9             

Rejection and Inspection of
Material.
 Every
tender of Materials must materially comply with the Material specifications therefor. 
Mentor may reject any portion of any shipment of the Materials which is not
conforming with  such
specifications.  In order to reject a shipment, Mentor must (i) give notice to
Supplier of Mentor's intent to reject the shipment within fourteen (14) days of
receipt together with a written indication of the reasons for such possible
rejection.  After notice if intention to reject is given, Mentor and Supplier
shall both examine the Materials in question using mutually agreeable test
methods to determine the extent and existence, if any, of any nonconformity. 
If it is determined that the Materials in question are non-conforming, then (a)
the date for payment for such Materials, as set forth in Section 3 below, shall be suspended and (b) Supplier shall, at its own cost and expense, promptly undertake to replace such nonconforming Materials and deliver conforming Materials to Mentor.  If no such notice of intent to reject
is timely received, Mentor shall be deemed to have accepted such delivery of
Material.


2.9.1       
Notwithstanding Section 2.9 above, in the case of Materials having defects which Mentor could not reasonably have been discovered by diligent examination upon receipt thereof, or the physical characteristics of Materials have changed so that such
Material is not conforming with the specifications therefor, Mentor shall give
notice of Mentor's intent to return such Materials within thirty (30) days
after discovery of such defects or change in physical characteristics, provided
that such notice may in no event be given later than the expiration of the
warranty period set forth in Section 6.11 below, except as otherwise provided in Section 2.9.2 below.  Upon receipt of such notice, Supplier shall provide replacement Materials to Mentor at Supplier's own expense.


 


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2.9.2       
Notwithstanding Sections 2.9 and 2.9.1 above, Mentor may return to Supplier at any time any Material with physical characteristics that have changed such that the Material is not conforming with the specifications therefor to be reconditioned and
returned to Mentor, provided that Supplier may charge Mentor an amount not
greater than fifty percent (50%) of the original price paid by Mentor for such
reconditioned Material if the warranty period set for in Section 6.11
below has expired.  If such Material's shelf life and the warranty period set forth in the Section 6.11 have not expired, Supplier shall provide Mentor with new Material at Supplier's own cost.


2.9.3       
Except as otherwise agreed to by Mentor, Supplier shall not change
in any way the specifications of the Material, or any process, material,
equipment or facility use in the production of the Material without the prior
written approval of Mentor's Quality Assurance Manager at such time.


3.                 
PRICES, TERMS AND PAYMENTS


3.1             

Certain Definitions for Computation
Purposes.
 The following words and phrases shall have the meanings
set forth below:


3.1.1       

Competitor. 
Each
Person other than Mentor or its Affiliates that (a) competes with Mentor in any
Market Segment, and (b) purchases Materials or Equivalent Materials from
Supplier or any Affiliate of Supplier for use in one or more Products of the
type which are then being manufactured or distributed by Mentor using Materials
or Equivalent Materials purchased by Mentor from Supplier pursuant to this
Agreement.


3.1.2       

Major Competitor. 
A
Competitor to whom Supplier sells a Common Material in a quantity that equals
or exceeds during a single Year ten percent (10%) of the quantity of the same
Common Material sold to Mentor during such Year.  


3.1.3       

Customer.  Mentor
and/or any Major Competitor.


3.1.4       

Common Material.  With
respect to each separate Major Competitor, any Material and Equivalent Material
if such Material was sold to Mentor during a Year and the same Material or an
Equivalent Material was also sold to such Major Competitor during the same
Year.  A Material or an Equivalent Material shall be a Common Material as to Mentor
and any single Major Competitor in any Year only to the extent that Supplier
sold such Material or an Equivalent Material both to Mentor and such Major
Competitor during the same Year.  For example, in the following table
illustrating the Materials (designated by an alpha character) purchased by
Mentor or by a Major Competitor and Equivalent Materials (designated by an
alpha-numeric code) purchased by Major Competitors 1, 2 and 3: 


	
  MENTOR

  	
  COMPETITOR 1

  	
  COMPETITOR 2

  	
  COMPETITOR 3

  
	
  A

  	
  A1

  	
  --

  	
  --

  
	
  B

  	
  B1

  	
  B

  	
  --

  
	
  C

  	
  --

  	
  C1

  	
  C1

  
	
  D

  	
  --

  	
  D1

  	
  D2

  
	
  --

  	
  E

  	
  --

  	
  E

  
	
  --

  	
  F

  	
  F1

  	
  F2

  
	
  --

  	
  G

  	
  --

  	
  --

  
	
  H

  	
  --

  	
  --

  	
  --

  





Materials A & A1 are Common
Materials as to Mentor and Major Competitor 1;  

Materials B & B1 Common
Materials as to Mentor and Major Competitors 1 and 2; 


 


EXCLUSIVE SUPPLY AGREEMENT:  Page 10


 



 

 



Materials C & C1 are Common
Materials as to Mentor and Major Competitors 2 and 3; 

Materials D, D1 & D2 are
Common Materials as to Mentor and Major Competitors 2 and 3; and 

Materials E, F, F1, F2 & G
are not Common Materials because they were not purchased by Mentor.

Material H is not a Common
Material since no Major Competitor purchased it or an Equivalent Material.




3.1.5       

Unit Purchase Price. 
With respect to any single Common Material, the price per unit, exclusive of
charges made for packaging, labeling, shipping, insurance and returns, charged
to a Customer for such Common Material during a Year, computed by dividing the
aggregate amount charged to such Customer for its total purchases of such
Common Material during such Year by the total quantity of such Common Material
purchased by such Customer during such Year.


3.1.6       

Aggregate Purchase Price. 
With respect to any single Common Material, the aggregate amount charged to a
Customer for its total purchases of such Common Material during a Year,
exclusive of charges made for packaging, labeling, shipping, insurance and
returns, computed by multiplying: (a) the total quantity of such Common
Material purchased by such Customer, by (b) the Unit Purchase Price charged to
such Customer for such Common Material.  


3.1.7       

Actual Cost of Common Materials.  The aggregate amount charged to a
Customer during a Year for its total purchases of all Common Materials during
such Year, exclusive of charges made for packaging, labeling, shipping, insurance
and returns, computed by adding the sum of the Aggregate Purchase Prices
charged to such Customer for each of the Common Materials purchased by such
Customer during such Year. 


3.1.8       

Imputed
Aggregate Purchase Price.  With respect to any Major Competitor,
a hypothetical Aggregate Purchase Price that Mentor would have been charged for
a Common Material during a Year had Supplier charged Mentor the same Aggregate
Purchase Price as Supplier actually charged such Major Competitor for such
Common Material during the same Year, computed by multiplying the Unit Purchase
Price charged to such Customer for such Common Material by the total quantity
of the same Common Material purchased by Mentor during the same Year.


3.1.9       

Imputed cost of Common Materials.  With respect to any Major Competitor
during any Year, the sum of the Imputed Aggregate Purchase Prices calculated
for the Common Materials purchased by such Major Competitor in such Year.  


3.2             

Price List.  Subject to adjustment pursuant to Section 3.8 below, the initial Unit Purchase Price charged to Mentor for each Material specified in Exhibit A
from and after the Effective Date of this Agreement shall be such prices as are
agreed to by the parties within thirty (30) days of the date on which this
Agreement is signed by the parties.   


3.3             

Most Favored Nation Pricing.
 At no time during the term of this Agreement will
Supplier sell Common Materials to Mentor at Unit Purchase Prices which, on
average, exceed the Unit Purchase Prices charged to any Major Competitor for
all such Common Materials during such Year, taking into account only Mentor's
(and not Major Competitor's) purchase volumes of such Common Materials.


3.3.1       
Supplier shall be deemed to be in compliance with the provisions of
Section 3.3 in any given Year when, with respect to each Major Competitor of Mentor:


Σ (MP x MQ) < 
Σ (CP x
MQ)


where, with respect to any single Major Competitor of
Mentor:


A.    
MP equals the Unit Purchase Price charged to Mentor for each separate
Common Material (as it pertains to each applicable Major Competitor) during the
Year; and


 


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B.    
MQ equals the quantity of such Common Material purchased by Mentor
during the Year; and


C.    
Σ (MP x MQ) means the Actual
Cost of Common Materials (calculated separately for each Major Competitor)
charged to Mentor, computed by adding the sum of the products of (MP x MQ) with
respect to each Common Material purchased both by Mentor and such Major
Competitor during the Year; and 


D.    
CP equals the Unit Purchase Price (calculated separately for each Major
Competitor) charged to a Major Competitor for each separate Common Material
purchased both by Mentor and such Major Competitor during the Year; and


E.     
  Σ (CP x MQ) means the Imputed
Cost of Common Materials (calculated separately for each Major Competitor),
computed by adding the sum of the products of (CP x MQ) with respect to each
Common Material purchased both by Mentor and such Major Competitor during the
Year.


3.3.2       
Supplier shall be deemed to be in breach of the provisions of this
Section 3.3 when, with respect to any Major Competitor of Mentor:



Σ (MP x MQ) >
Σ (MQ x CP)


3.3.3       
The formula set forth in Section 3.3.1 above shall be calculated separately for each Major Competitor each Year in order to compare the Actual Cost of Common Materials charged to Mentor for the Common Materials purchased by Mentor during the Year with the
Imputed Cost of Common Materials calculated for the Common Materials purchased
by each Major Competitor during such Year.


3.4             

Credits against Purchase Price.
 If in any Year the Actual Cost of Common Materials
charged to Mentor exceeds the Imputed Cost of Common Materials as calculated
for any Major Competitor during such Year, then Mentor shall be entitled to a
credit against the purchase price for the next Materials purchased by Mentor
from Supplier in an amount equal to 105% of the amount by which the Actual Cost
of Common Materials charged to Mentor exceeded the lowest Imputed Cost of
Common Materials as calculated for to that Major Competitor for whom the
computation required by Section 3.2 above produces the lowest Imputed Cost of Common Materials.   


3.5             

Books and Records; Reports.
 Supplier
shall keep books and records in sufficient detail to permit independent
verification by a disinterested auditing firm of the compliance by Supplier
with the pricing, supply and delivery provisions of this Agreement  


3.6             

Annual Report.    
  Supplier shall prepare and submit to Mentor within sixty (60) days
after the end of each Year a written compliance certificate executed by its
Chief Executive Officer or its Chief Financial Officer certifying that Supplier
has made each of the computations called for by Section 3.3 above for the purpose of comparing the Actual Cost of Common Materials charged to Mentor during the preceding Year with the Imputed Cost of Common Materials calculated for the Common Materials sold to each Major
Competitor during such Year and stating that (a) the Actual Cost of Common
Materials charged to Mentor during such Year did not exceed the Imputed Cost of
Common Materials calculated for the Common Materials sold to any Major
Competitor during such Year or, (b) if the Actual Cost of Common Materials paid
to Mentor during such Year exceeded the Imputed Cost of Common Materials sold
to any Major Competitor during such Year, (i) a computation of any credit to
which Mentor is entitled pursuant to Section 3.4 above and (ii) a revised Price List setting forth  the reductions in the Unit Purchase Price of the Materials being made to assure that Supplier will be in compliance with the provisions of Section 3.3.1 above for the Year following the Year for which the report is being submitted.   


 


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3.7             

Audits.   Mentor shall be entitled to have an audit of the books
and records maintained by Supplier pursuant to Section 3.5 above performed no more often than once in any consecutive twelve (12) month period for the purpose of verifying the compliance by Supplier with the pricing provisions of Section 3.3 of this Agreement.


3.7.1       
Any such audit shall be performed by a regional or national
accounting and auditing firm that does not otherwise perform auditing or
accounting services for Mentor and its Affiliates or for Supplier and its
Affiliates.


3.7.2       
Such auditing firm shall submit a written report to Mentor
advising whether Supplier is in compliance with the pricing provisions of this
Agreement and, if it is not, the dollar amount by which the Cost of Materials
charged to Mentor for the Materials during the period covered by the audit
exceeded the Cost of Materials charged to that Major Competitor who paid the
lowest Cost of Materials during such Year, but the auditing firm shall not be
permitted to disclose to Mentor the quantities of Materials or Equivalent
Materials being purchased by any individual Competitor.


3.7.3       
Any credit shown by such audit report to be owing to Mentor shall be
credited against the next purchases made by Mentor until such credit is
exhausted.


3.7.4       
The costs and expense of any audit conducted pursuant to this
Section 3.7 shall be borne by Mentor, but if any such audit discloses that the Actual Cost of Common Materials charged to Mentor for the period covered by the audit exceeded the Imputed Cost of Common Materials as calculated
for the Common Materials purchased by any Major Competitor for the period
covered by such audit, and if the amount of that excess is greater than the
amount of Mentor's out-of-pocket costs for the audit, then Supplier shall pay
the entire out-of-pocket cost of such audit.


3.8             

Price Adjustments.   Subject to the provisions of Section 3.3 above 


3.8.1       

Annual CPI Adjustment. 
The Selling Price applicable for each Material hereunder shall be adjusted as
of each Adjustment Date during the term of this Agreement to be equal to the
product determined by multiplying (a) the Purchase Price therefor set forth on Exhibit A
hereto, times (b) a fraction, (i) the numerator of which is the Index
for the Comparison Period, and (ii) the denominator of which is the Index for
the Base Period; provided that, in no event shall any such adjustment
cause the Selling Price for any Year be reduced below the Selling Price in
effect in the immediately preceding calendar Year.


A.    
Definitions.  For purposes
of this Section 3.8, the term:


(1)   
"Adjustment Date" shall mean each
January 1 during the term of this Agreement. 


(2)   
"Base Period" shall mean November 2003.  


(3)   
"Comparison Period" shall mean the month of
November in the calendar Year immediately prior to the Adjustment Date.


(4)   
"Index"
shall mean the Consumer Price Index for Urban Wage Earners and Clerical Workers
for the Los Angeles/Anaheim/Riverside Area, Average Subgroup "All
Items," 1982-84=100 Base, as published by the Bureau of Labor Statistics. 
If such Index is no longer published, then the term "Index" shall
refer to each successor or comparable Index mutually agreed by the parties to
be authoritative, and if the parties are unable to agree, then the substituted
Index shall be selected by the then-presiding judge of the Superior Court for
Santa Barbara County upon application of either party.


B.    
Notice of Adjustment. 
Supplier shall provide Mentor written notice of the adjustments pursuant to
this Section 3.8, setting forth the computation thereof, on or before each Adjustment Date or as soon thereafter as practicable, but no delay in computing or giving notice of any adjustments shall constitute a waiver of the right of
either party to have such adjustments made, retroactive to the applicable
Adjustment Date, once such computation has been made.


 


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3.8.2       

Cost Increases
Caused by External Circumstances.   Supplier may adjust its prices prospectively from time to
time upon delivery of written notice to Mentor specifying the amount of the
increase and the reason therefor if external factors beyond the ability of
Supplier to control affect Supplier's cost structure.  Such external factors
shall include, for example, but shall not be limited to dislocations in
materials supply markets, changes in laws, regulations, and other governmental
rules affecting the production or sale of the Materials, and changes in
specifications requested by Mentor, but shall not include increases in the
costs of labor, materials, manufacturing costs, selling expense or overhead and
general and administrative expense occurring in the ordinary course of business
or as the result of changing economic conditions that are not caused by
extraordinary circumstances.


3.9             

Method of Payment.  All payments due hereunder to Supplier shall be paid in
United States dollars on the later of (a) thirty (30) days following the date
of the applicable invoice and (b) the receipt of the applicable invoice in
proper form (which form shall include (i) Mentor's purchase order number, (ii)
the customer part number and (iii) the same price for the materials set forth
in corresponding purchase order); provided, however, that in the event
Mentor rejects any Materials pursuant to Section 2.9 above, payment for such rejected Materials shall be suspended in accordance with the terms set forth in Section 2.9 above until Mentor and Supplier are able to determine the extent and existence, if any, of any nonconformity of the Materials in question.


3.10         

Past Due Amount.  Any amount due hereunder shall, if remaining past due
for thirty (30) days (i.e., sixty (60) days after Mentor's receipt of
invoice), accrue interest thereon at the rate of one and one-half percent
(1-1/2 %) per month for each month or portion thereof that the amount remains
unpaid.  In the event that any invoice remains past due for more than ninety
(90) days, Supplier may, at its option, require any further shipments of
Materials to Mentor to be sent C.O.D until all past due payments have been
made.  


4.                 
PARTIAL TERMINATION AND PENDING
DISPUTES


4.1             

Failure to Supply.   If Supplier (a) fails to timely deliver fifty percent (50%)
of the amount of any Materials ordered by Mentor as required hereunder for any
reason other than force majeure, as measured over any period of sixty (60) or
more consecutive days, or (b) the Materials delivered by Supplier do not
conform to the specifications for such Materials set forth in Exhibit A or
are not manufactured in conformance with Applicable Requirements, including
without limitation applicable QSRs, then:


4.1.1       
Mentor upon twenty (20) days' prior written notice to Supplier (so
long as Supplier has not cured such default within such time) may but shall not
be obligated to elect to have such Affected Materials supplied by a third party
supplier, selected by Mentor in its sole discretion, for the next ninety (90)
days (the "Third Party Period").


4.1.2       
Upon the expiration of the Third Party Period and upon the
satisfactory completion of an audit and inspection of Supplier pursuant to
Section 2.3 above, Supplier shall recommence supplying the Affected Materials to Mentor; provided, however, that if after the expiration of the Third Party Period, the audit and inspection of Supplier is not satisfactory to Mentor,
Mentor may, at its sole discretion, (a) continue to have Affected Materials
supplied by a third party supplier and terminate this Agreement with respect to
the Affected Materials or (b) continue to have the Affected Materials supplied
by a third party supplier for indefinite consecutive periods of ninety (90)
days until satisfactory completion of an audit and inspection of Supplier
pursuant to Section 2.3 above.


 


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4.2             

Termination Right.   If such default continues uncured for a period in excess
of ninety (90) days, then the Mentor shall have the right at any time thereafter
until such default has been cured to purchase from Supplier all of the assets
required to manufacture and produce the Materials at the price and on the terms
set forth in Section 4 of the Transfer Agreement.  


5.                 
TERMINATION, RIGHTS, AND
OBLIGATIONS UPON TERMINATION


5.1             

Term.   Unless terminated for any particular Material pursuant
to Section 4 above, or by either party pursuant to the other provisions of this Section 5, the term of this Agreement shall commence on the Effective Date and shall expire on the twentieth (20th) annual anniversary thereof in 2024 (the "Term").   


5.2             

Termination for Cause.   This Agreement may be terminated in its entirety by
either party upon the occurrence of an "Event of Default" (as defined
below) by delivering to the defaulting party at least thirty (30) days prior to
the effective date of the written notice of termination (the "Notice of
Termination") describing the Event of Default.  For purposes of this
Section 5.2, an "Event of Default" is any of the following events:


5.2.1       
Failure by Mentor to make any payment when due and the failure of
Mentor to pay such delinquent amount plus any other delinquent amounts then due
and payable within thirty (30) days of Mentor's receipt of the Notice of
Termination, excluding in each case amounts that are being disputed by Mentor
in good faith;


5.2.2       
Filing by either party hereto for bankruptcy, receivership,
assignment for the benefit of creditors of all or a substantial portion of the
assets of such party or other admission by such party of its inability to pay
its debts as they mature;


5.2.3       
The filing of an involuntary petition for bankruptcy,
reorganization, receivership or similar proceeding against either party hereto
which proceeding is not dismissed within sixty (60) days;


5.2.4       
If either party hereto breaches any material provision of this
Agreement and fails to cure such breach within ninety (90) days of written
notice describing the breach; or 


5.2.5       
If Supplier is at any time not in compliance with any of the
Applicable Requirements, including but not limited to QSRs, and it fails to
deliver an Action Plan to Mentor pursuant to Section 2.3.1A above, or it fails to otherwise cure the non-compliance pursuant to the Action Plan delivered to Mentor pursuant to Section 2.3.1A above.


5.3             

Termination by Supplier.  If Supplier has delivered a Discontinuation Notice to
Mentor pursuant to Section 2.2.2B(1)c above, then Supplier may terminate this Agreement effective at any time after the expiration of the 90-day Option Period described in Section 2.2.2B(2) above by giving Mentor not less than ten (10) day's prior written notice of its intention to do so unless the parties have reached agreement on alternative prices and terms for the continuing supply of the Initial
Materials to Mentor prior to the expiration of such 90-day Option Period.


5.4             

Mentor Purchase of SiTech Assets.  This Agreement shall terminate upon any purchase by
Mentor of the assets of SiTech pursuant to the exercise of the SiTech Purchase
Option under Transfer Agreement; provided that, in accordance with the
terms and conditions of the Transfer Agreement, to the extent that the assets
of SiTech that are purchased by Mentor pursuant to the Transfer Agreement do
not provide Mentor the capacity to produce the volume of Materials that
Supplier is then supplying to Mentor (such shortfall in production capacity,
the "Capacity Shortfall"), this Agreement shall remain in full
force and effect and Supplier shall continue to be obligated to supply to
Mentor hereunder (a) such portion of those Materials as would be produced by
the Capacity Shortfall and (b) any other materials that were being supplied to
Mentor pursuant to this Agreement prior to the exercise of the SiTech Purchase
Option to the extent that there was not transferred to Mentor sufficient
Production Capacity to manufacture and supply such materials itself.  


 


EXCLUSIVE SUPPLY AGREEMENT:  Page 15


 



 

 



5.5             

Liability of Mentor upon Termination for Default.
 Should this Agreement be properly terminated by Supplier
due to an uncured material default by Mentor, then: Supplier (a) shall be
entitled to recover damages from Mentor and (b) shall have no further duty to
supply Mentor hereunder.  In such event, Mentor's optional purchase and
first-refusal rights under the Transfer Agreement shall remain in effect for a
period of six (6) months following the effective date of the termination of
this Agreement and shall thereupon terminate without further notice.


5.6             

Liability of Supplier upon Termination for Default.
 Should this Agreement be terminated by Mentor due to an
uncured material default by Supplier, then Mentor shall be entitled (a) to
recover damages from Supplier and (b) to have the right to purchase the assets
of Supplier on the terms and conditions set forth in the Transfer Agreement.


5.7             

Effect of Expiration or Termination.  The following provisions shall survive the expiration or
termination of this Agreement: Sections 3 (to the extent of firm orders
required to be completed pursuant to the remainder of this Section 5.7),
5.5, 5.6, 6.5, 6.7, 6.8, 6.10, 7 and 8.  Remedies for all breaches hereunder
will also survive the expiration or termination of this Agreement.  Upon
expiration or termination of this Agreement, Supplier shall continue to
fulfill, subject to the terms of Section 3, all firm orders accepted by it prior to the effective date of expiration or termination, and Mentor shall be obligated to pay for all Materials ordered or delivered prior to the date of expiration or termination,
subject to the terms of Section 3 of this Agreement.  Notwithstanding anything in this Section 5.7 to the contrary, in the case of termination under Section 5.2, the terminating party may elect whether obligations under firm orders will remain in effect.


5.8             

Return of Property.  Upon expiration or termination of this Agreement, each
party shall return to the other party any information, confidential materials,
technical materials, samples, correspondence, specifications and other
documents or materials belonging to the other party, together with any copies
thereof (the "Properties"); provided, however, that
each party shall have the right to retain such Properties to perform its
obligations remaining hereunder after the expiration or termination of the
Agreement.


5.9             

Enumerated Remedies not Exclusive.
 The remedies identified by this Agreement as being
available to either party upon a default by the other are not intended to be
exclusive, but shall be in addition to any other remedies available to a party
at law or in equity upon the occurrence of any such default.  The exercise of
any such remedy by a party shall not constitute an election of remedies and
shall be without prejudice to the right of such party to exercise any other
remedy available by reason of a default by the other party in the performance
of its obligations under this Agreement, including the right to recover damages
suffered by reason of a breach of this Agreement by the other party without
terminating this Agreement in whole or in part.


5.10         
Continuation
after Expiration of Initial Term.  After the expiration of the initial Term of this
Agreement, Supplier shall continue to supply the requirements of Mentor for the
Materials at the same price and on the same terms as it supplies its other
customers for the Materials or Equivalent Materials on a year to year basis,
subject to the right of either party to terminate this agreement during any
such renewal term at any time upon six (6) months prior written notice of
termination.  


6.                 
REPRESENTATIONS, WARRANTIES AND
COVENANTS


6.1             

Vendor Audit Rights.
 Mentor shall have the right and Supplier shall allow
Mentor access, from time to time, and upon reasonable notice and during
business hours, to inspect or audit Supplier's manufacturing and storage
facility, tools, and equipment as well as Supplier's quality assurance systems,
testing operations, compliance procedures, and records relating to the
Material, to ensure compliance by Supplier with Applicable Requirements, provided
that in no event shall Mentor be entitled to have access to Supplier's
manufacturing processes except in the connection with the transfer of the SiTech
Assets to Mentor upon exercise by Mentor of the SiTech Purchase Option
contained in the Transfer Agreement.  Any audits shall be scheduled at normal
business hours upon at least fifteen (15) days prior written notice to
Supplier.


 


EXCLUSIVE SUPPLY AGREEMENT:  Page 16


 



 

 



6.2             

No Rights Created.  Mentor and Supplier hereby agree that nothing in this
Agreement shall confer upon either party any right, title or interest in any information,
or any copyrights, trademarks, patents or trade secrets of the other party or
used by the other party under license from a third party.


6.3             

Rights, Power, Authority and Binding Obligation.  Each party hereby represents and warrants to the other
party that it has full right, power and authority to enter into this Agreement
and that this Agreement constitutes a valid and binding obligation of such
party.


6.4             

Compliance with Law.  Supplier represents and warrants that it is in
compliance with all applicable laws and regulations (including but not limited
to environmental laws and regulations) and other orders in connection with
entering into this Agreement and manufacturing and delivering the Materials. 
Supplier will be solely responsible for the proper disposal of any materials or
waste resulting from the manufacturing of the Materials.  Under no
circumstances shall Mentor be liable for direct, incidental or consequential
damages result from the use, handling, storage or disposal of Materials, waste
or any other chemicals, raw materials or inputs by any affiliate, employee,
agent or contractor of Supplier.


6.5             

Fulfillment Facilities.  Supplier represents and warrants that each facility used
to manufacture the Materials or the location at which the Materials are
produced (including but not limited to each such facility owned by SiTech and
each such facility owned by NuSil, as permitted pursuant to Section 2.5, above) shall be in compliance with Applicable Requirements.  If Supplier elects to manufacture any Material from any location other than Supplier's current location on Campus Circle in Irving, Texas (or any
facility owned by NuSil, as permitted by Section 2.5, above), then Supplier shall be solely responsible for all costs, fees expenses associated with ensuring that such alternative facility meets the foregoing requirements, including but not limited to any quality
assurance, regulatory or other production costs, fees and expenses resulting
from such change in location (provided that, the foregoing is not
intended and shall not be construed to impose upon Supplier any liability for
the cost of shipping or transporting Materials from any such alternative
facility).


6.6             

No Infringement.  Supplier represents and warrants that (a) the Materials
are free from rights or claims of any other person and Mentor's purchase and
resale (or holding in inventory) of the Materials does not infringe upon or
violate any United States or foreign intellectual or industrial property right
or other right of any third party and (b) to Supplier's knowledge, there are no
patents issued by any country, or any other prior art, that invalidate or would
invalidate any of the patents covering the Materials.


6.7             

Production Capacity.
 NuSil and SiTech each shall at all times during the term
of this Agreement maintain the facilities, equipment and staff necessary to
produce the Materials in quantities sufficient to satisfy the requirements of
Mentor and its Affiliates (collectively, the "Production Capacity"),
but NuSil shall be relieved of its obligation to maintain Production Capacity
under this Section 6.7 for as long as the duties and responsibilities of Supplier have been delegated exclusively to SiTech and SiTech is maintaining such Production Capacity.


6.8             

Confidential Information. 
 From time to time during the term hereof, the parties
may require from each other certain secret confidential information, including
knowledge, information, data, know-how, concepts, ideas, methods, processes,
formulae, trade secrets, procedures, techniques and improvements and all other
compilation of information (whether or not reduced in writing or in electronic
format or whether or not patentable or copyrightable) which re or may in any
way be related to the Materials or to the respective businesses of the parties
("Proprietary Information").  


 


EXCLUSIVE SUPPLY AGREEMENT:  Page 17


 



 

 



6.8.1       
The parties shall keep strictly secret and confidential and shall
not, either during or after expiration or termination of the Agreement, without
the other party's written consent disclose to any third parties or use at any
time after expiration or termination of this Agreement any Proprietary
Information of the other party, excepting that either party may disclose such
Proprietary Information to its employees for whom such information is necessary
for performance of their duties.  The parties (a) shall use their best efforts
to compel any parties to whom they provide Proprietary Information to keep such
information confidential in accordance with this Section 6.8 and (b) shall not use the Proprietary Information of the other party commercially or for any other purpose other than for the purpose contemplated by this Agreement.


6.8.2       
The obligations undertaken by the parties pursuant to Section 6.8
above shall not apply to:


A.                
Such information that is generally known to the public at the time of
disclosure to the other party (the "Recipient Party") or
subsequently becomes generally known to the public through no breach of
Section 6.6(a) above by the non-disclosing party;


B.                
Such information that was in the Recipient Party's possession prior to
disclosure hereunder;


C.                
Such information that was obtained by the Recipient Party in good faith
from a third party lawfully possessing and having a right to disclose same;


D.                
Such information that the Recipient Party is required by court order to
disclose, provided that any Recipient Party receiving any subpoena, or
governmental, judicial or administrative request for any Proprietary
Information of the other party shall notify the other party of the request
immediately, and shall not disclose such information absent the other party's
consent or a court order requiring such disclosure; or


E.                 
Such information that the Recipient Party affirmatively demonstrates to
the other party's reasonable satisfaction, prior to any use or disclosure, that
the Propriety Information was independently developed by the Recipient Party
without the aid, application, reference or use in any way of information
received from the other party.


F.                 
Within thirty (30) days following the termination or expiration of this
Agreement or the request of a party hereto, each party shall return all
Proprietary Information belonging to the other party and copies hereof, and any
other records containing such Proprietary Information to the other party,
except that each party may retain copies of such Proprietary Information to the
extent necessary to meet its continuing obligations to supply Material under
this Agreement.


G.                
Mentor and Supplier acknowledge that any breach or violation of the
confidentiality provision in Section 6.8 will result in irreparable and continuing damage to the non-breaching party for which there may be no adequate remedy at law, and Mentor and Supplier agree that in the event of any such breach or violation by either
party, the non-breaching party shall be entitled to both damages and/or
injunctive relief.


6.9             

Duty to Keep Books and Records.  Supplier hereby covenants and agrees to keep and
maintain at all times an accurate account of all operations within the scope of
this Agreement for a period of at least seven (7) Years after the expiration or
termination of this Agreement, including without limitation, all of its books
and records of the sale of Materials and Equivalent Materials to Mentor and its
Competitors, device master records, device history records, and master access
files.  Such records shall be kept in a manner that permits easy identification
of each Material and Equivalent Material comprising a Common Material as to
Mentor and any Major Competitor so as to enable NuSil's independent public
accountants and any disinterested auditor or other third party to make and/or
verify the accuracy of the computations required by Section 3.3 of this Agreement.


 


EXCLUSIVE SUPPLY AGREEMENT:  Page 18


 



 

 



6.10         

Intellectual Property.  All discoveries, improvements, inventions and trade
secrets developed by Supplier in the performance of this Agreement shall be the
sole property of Supplier.


6.11         

Warranties.  Supplier warrants to Mentor that the Materials shipped
hereunder (a) shall conform in all material respects to the specifications set
for in Exhibit
A, as then in effect, and to all Applicable Requirements, including
without limitation, applicable QSRs regulations, as then in effect, and (b) shall
meet the specifications therefor for a period of at least six (6) months from
the date of shipment of such Materials to Mentor.  SUPPLIER HAS NOT AUTHORIZED
ANYONE TO MAKE ANY REPRESENTATION OR WARRANTY OTHER THAN AS PROVIDED ABOVE. 
THE FORGOING LIMITATIONS OF WARRANTIES SHALL NOT IN ANY WAY LIMIT MENTOR'S
RIGHTS UNDER SECTION 7 HEREOF.


6.12         

Reports by Mentor If at any time during the term of this Agreement Mentor is
purchasing one or more Initial Materials from a Qualified Alternative Supplier
pursuant to clause (a) of Section 2.2.2A of this Agreement, then:


6.12.1    Mentor shall
furnish to Supplier within thirty (30) days after the end of each calendar
quarter a written report setting forth for each Initial Material and for
Qualified Alternative Supplier from whom Mentor is purchasing such Initial
Material (a) the quantity of such Initial Material purchased by Mentor from
Supplier and from any Qualified Alternative Supplier during the preceding
calendar quarter and (b) the amount paid by Mentor to Supplier and such
Qualified Alternative Supplier for each such Initial Material during such
calendar quarter; and .


6.12.2   
If Mentor has made an Adjustment Election pursuant to  2.2.2B(1) above, then the reports required by Section 6.12.1 above shall be made on a monthly basis instead of a quarterly basis during the 24-month Remedial Period and shall be given to Supplier within thirty (30) days after the end of each month.


7.                 
INDEMNIFICATION


7.1             

Indemnification by Mentor.
 Mentor shall indemnify, defend and hold Supplier and its
officers, directors, employees, and agents (collectively, the "Supplier
Indemnitees") harmless from and against any and all loss, harm and
liability including, without limitation, all costs, damages, settlements,
claims, suits and expenses (including reasonable attorneys' fees) made against
or sustained by any Supplier Indemnitee (collectively, "Supplier Losses")
arising out of or resulting from the death of, or bodily injury to, any person
which is attributed to the use of a Material by Mentor or the incorporation of
a Material into any Mentor Product, except to the extent that such Supplier
Losses are caused by Supplier conduct of the type described in Section 7.2
below for which Supplier is obligated to indemnify Mentor.


7.2             

Indemnification by SiTech.
 SiTech shall indemnify, defend and hold Mentor and its
Affiliates and their officers, directors, employees and agents (collectively,
the "Mentor Indemnitees") harmless from and against all loss,
harm and liability including, without limitation, all costs, damages,
settlements, claims, suits, and expenses (including reasonable attorneys' fees)
made against or sustained by any Mentor Indemnitee arising from (a) the death
of, or bodily injury to, any person on account of the Materials as a result of
negligence or willful misconduct of Supplier or any affiliate, officer,
director, employee or agent of Supplier (b) any reasonable SiTech-approved
out-of-pocket costs to Mentor and its Affiliates due to the recall of any
Processed Material or (c) an infringement of any third party patent right,
copyright right, trademark right or other intellectual property right or misappropriation
of any trade secret (collectively "Mentor Losses") to the
extent such Mentor Losses are caused by (x) Supplier's failure to deliver such
Material in accordance with Supplier's warranties set for in Section 6.11, (y) the negligence or willful misconduct of Supplier or any employee, consultant, agent or subcontractor of Supplier or its Affiliates, or (z) an breach of a material obligation of Supplier under this Agreement
(collectively, a "Supplier Claim") except that, if any Mentor
Losses are caused in part by the negligence or willful misconduct of Mentor, then
SiTech's liability shall be in proportion to the fault of Supplier.


 


EXCLUSIVE SUPPLY AGREEMENT:  Page 19


 



 

 



7.2.1       

Limitations to Indemnity.  The indemnities of Sections 7.1 and 7.2 shall not apply (a) if the indemnified party fails to give the indemnifying party prompt notice of any claim it receives and such failure materially prejudices the indemnifying party, or (b) unless the indemnifying
party is given the opportunity to approve any settlement.  Furthermore, the
indemnifying party shall not be liable for attorneys' fees or expenses of
litigation of the indemnified party unless the indemnified party gives the
indemnifying party the opportunity to assume control of the defense or
settlement.  In no event shall the indemnifying party assume control of the
defense of the indemnified party without the consent of the indemnified party
(which consent shall be given at its sole discretion).


7.2.2       

Settlement.  In no event shall the indemnifying party be
entitled to settle any of the above-mentioned claims without the written
consent of the indemnified party, which consent shall not be unreasonably
withheld.


7.2.3       

Insurance.  Supplier, at its sole cost and expense, shall
carry and at all times during the Initial Term and any subsequent period,
maintain in full force and effect the following insurance coverage:


A.                
Workers' Compensation Insurance as required by Texas law;


B.                
Employers' Liability Insurance as required by Texas law;


C.                
General Comprehensive Liability Insurance, with contractual liability
and property damage endorsements in the minimum amount of Two Million  Dollars ($2,000,000) each occurrence
and in the aggregate.  Such coverage shall also include coverage for business
interruption with coverage limits and terms reasonably acceptable to Mentor.


D.                
Environmental impairment liability insurance for non-sudden and
accidental occurrences, if required by applicable law or regulation.


Such insurance policies shall cover
any and all Mentor Losses as provided herein for which indemnification is
provided by Section 7.2 above and Supplier shall name Mentor as an additional insured in each such policy.  Supplier, upon request of Mentor, will supply Mentor with appropriate certificates of insurance evidencing the forgoing insurance
coverage.


8.                 
MISCELLANEOUS


8.1             

Effective Date and Implementation.
 This Agreement shall not become effective until it has
been executed by each of the parties but, when so executed, shall be given
retroactive effect to the Effective Date and be applicable to all purchases of
Materials by Mentor from Supplier on and after such Effective Date.  If the
execution and implementation of this Agreement occurs after the Effective Date,
then Mentor shall be given a retroactive credit against its purchases of
Materials from and after the Effective Date to reflect the adjustment in the
Selling Price of the Materials that became effective as of the Effective Date.


8.2             

Amendment and Waiver.  Except as otherwise expressly provided herein, any
provision of this Agreement may be amended and the observance of any provision
of this Agreement may be waived (either generally or in any particular instance
and either retroactively or prospectively) only with the written consent of the
parties hereto.  However, it is the intention of the parties that this
Agreement be controlling over additional or different terms of any purchase
order, confirmation, invoice or similar document, even if accepted in writing
by both parties, and that waivers and amendments of any provision of this
Agreement shall be effective only if made by non-pre-printed agreements signed
by both parties and clearly understood by both parties to be an amendment or
waiver.  The failure of either party to enforce its rights under this Agreement
at any time for any period shall not be construed as a waiver of such rights.


 


EXCLUSIVE SUPPLY AGREEMENT:  Page 20


 



 

 



8.3             

Governing Law and Legal Actions.  This Agreement shall be governed by and construed under
the law of the State of California and the United States without regard to
conflicts of laws provisions thereof.  Unless the parties hereto mutually agree
otherwise, the sole jurisdiction and venue for actions related to the subject
matter hereof shall be the California state and U.S. federal courts having
within their jurisdiction the location of Mentor's principal place of
business.  Both parties consent to the jurisdiction of such courts and agree
that process may be served in the manner provided herein for giving of notices
or otherwise allowed by California state or U.S. federal law.  In any action or
proceeding to enforce rights under this Agreement, the prevailing party shall
be entitled to recover costs and attorneys' fees.


8.4             

Notice and Reports.  Any notices permitted or required hereunder shall be in
writing and shall be deemed to have been delivered and received (a) when
personally delivered; (b) on the third (3rd) business day after the date
on which deposited in the United States mail for first-class mail delivery,
postage prepaid, certified or registered mail, return receipt requested;
(c) on the date on which transmitted by facsimile or other similar
electronic means generating a receipt evidencing a successful transmission, or
(d) on the next business day after the day on which deposited with a regulated
public carrier (e.g., Federal Express) during such carrier's
regular business hours, freight prepaid, for overnight delivery, to the address
or facsimile number appearing on the signature page of this Agreement, or such
other address or facsimile number, notice of which is given in a manner
permitted by this Section 8.3.


8.5             

Entire Agreement.  This Agreement (and all Exhibits hereto) supersedes and
replaces the Original Supply Agreement and constitutes the entire understanding
and agreement with respect to the subject matter hereof and supersede all
proposals, oral and written, all negotiations, conversations, or discussion
between or among parties relating to the subject matter of this Agreement and
all past dealing or industry custom.


8.6             

Severability.  If any provision of this Agreement is held to be illegal
or unenforceable, that provision shall be limited or eliminated to the minimum
extent necessary so that this Agreement shall otherwise remain in full force
and effect and enforceable.


8.7             

Relationship of Parties.  The parties hereto expressly understand and agree that
the other is an independent contractor in the performance of each and every
part of this Agreement, is solely responsible for all of its employees and
agents and its labor costs and expenses arising in connection herewith.  neither
party hereto shall have any express or implied right or authority to assume or
create any obligations on behalf of or in the name of the other party or to
bind to any contract, agreement or undertaking with any third party.  Neither
party may use or assign to an Affiliate or any other third party the name,
brand, logo, or trademark or any derivative thereof, of the other party without
the prior written consent of said other party.


8.8             

Delegation of Duties.  Neither party may further delegate to a third party its
respective obligations hereunder without the written consent of the other
party.


8.9             

Assignment.  This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns; provided
that, notwithstanding the foregoing, Supplier may not delegate to any other
Person its duties of such party hereunder, except either (a) to any Person that
acquires all or substantially all of the assets of
Supplier (whether in a merger transaction, asset purchase transaction, or other
reorganization transaction), or (b) with the prior written consent of Mentor.


 


EXCLUSIVE SUPPLY AGREEMENT:  Page 21


 



 

 



8.10         

Publicity and Press Releases.  Except to the extent necessary under applicable laws or
for ordinary marketing purposes, the parties agree that no press releases or
other publicity relating to the substance of the matters contained herein will
be made without approval by both parties.


8.11         

Force Majeure.  No liability or loss of rights hereunder shall result to
either party from delay or failure in performance caused by an event of force majeure
(that is, circumstances beyond the reasonable control of the party affected
thereby, including without limitations, acts of God, fire, flood, war or government
action).  Obligations hereunder, however, shall in no event be excused for a
period of longer than six (6) months.  In the event of force majeure, the party
whose performance is affected shall give prompt written notice to the other
party stating the period of time the same is expected to continue and will use
its best efforts to mitigate the effect of the event giving rise to the failure
or delay in performance.  upon the occurrence of a force majeure which affects
Supplier's performance hereunder for long than six (6) months, Mentor shall
have the right, but not he obligation, to terminate this Agreement, or to elect
to have the affected Materials supplied by a third party supplier until
Supplier is able to resume performance.


8.12         

Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute one and the same instrument.




[Signatures appear on following page.]


 


EXCLUSIVE SUPPLY AGREEMENT:  Page 22


 



 

 




 




            In Witness
Whereof, the parties hereto have executed this Agreement to be
effective as of the date first written above.








	
  "NuSil:"

   

  NuSil Corporation, a California corporation



  By /s/ Richard Compton                                    
  

        Richard Compton, Chief Executive Officer


                                                                           
  

                                   Date


  Address and Facsimile No.  for Notices:


  NuSil Corporation

  1050 Cindy Lane

  Carpinteria, California 93013  


  Facsimile No.:  (805) 566-9905

   

   "SiTech:"

   

  SiTech, Inc.,
  a California corporation



  By  /s/ Richard
	Compton                                     
  

        Richard Compton, Chief Executive Officer


                                                                           
  

                                   Date


  Address and Facsimile No. for Notices:


  SiTech, Inc.

  c/o NuSil Corporation

  1050 Cindy Lane

  Carpinteria, California 93013  


  Facsimile No.:  (805) 566-9905

  	
  "Mentor:"

   

  Mentor Corporation,

  a Minnesota corporation



  By  /s/ Adel Michael                                        
  

        Adel Michael, Vice-Chairman


                                                                           
  

                                  Date


  Address and Facsimile No. for Notices;


  Mentor Corporation

  ATTN:  General Counsel

  5425 Hollister Avenue

  Santa Barbara, California 93111


  Facsimile No.:  (805) 879-6008

  





  


EXCLUSIVE SUPPLY AGREEMENT:  Page 23


 



 

 



 




EXHIBIT A


 


to


 


Amended and Restated Exclusive Supply Agreement




 


initial Materials


 


 


	

  
	
  FGB014,Me 35

  
	
  FGB014-1,Me 31

  
	
  FGB015,Bar 37

  
	
  FGB015-1,Bar 31

  
	
  Gel2167/2168,3:1

  
	
  Gel2167-1/2168-1,1:1

  
	
  Gel2167-2/2168-2,1:1

  
	
  HCE4735

  
	
  HCE4750

  
	
  MED6-6605,RTV,30

  
	

  



 


 




	
                          

  Initials of Supplier

  	
                          

  Initials of Mentor