ORIGINAL
EQUIPMENTMANUFACTURER
AGREEMENT




This
Original Equipment Manufacturer Agreement (the "Agreement") is entered into as
of the 25THday
of June, 2002, by and between BOVIE MEDICAL CORPORATION, a Delaware corporation
with its principal place of business at 7100 30th Avenue North, St. Petersburg,
FL 33710-2902 ("Bovie"), and ARTHREX, INC., a Delaware corporation having its
principal place of business at 2885 South Horseshoe Drive, Naples, FL 34104
("Arthrex").


WHEREAS,
Bovie manufactures, packages and sells certain devices and components for resale
and desires to manufacture and supply certain Products (as defined
below);




WHEREAS,
Bovie desires to invest time and resources in the development and the
improvement of the Products, and in consideration therefor, Arthrex desires to
purchase its Products inventory from Bovie; and




WHEREAS,
Arthrex desires that Bovie manufacture and supply the Products to
Arthrex;




NOW,
THEREFORE, in consideration of the terms and provisions of this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Bovie and Arthrex agree as follows:




1.0DEFINITIONS.




1.1An "Affiliate" of a
Person means any company, corporation, partnership, limited liability company,
association, organization, entity, individual or other that directly or
indirectly controls, is controlled by or is under common control with such
Person.




1.2            "Delivery
Date" means a date for which delivery of Product is properly requested in a
Purchase Order (as such term is hereinafter defined).




1.3 
"FDA" means the United States Food and Drug Administration or any successor
agency or authority, the approval of which is required to market, distribute,
supply and sell health care products in the United States.




1.4 
"Product or Products" mean any one or more of the devices and components set
forth in Appendix A, and such other devices and components as may be added, in
writing, to Appendix A by Arthrex from time to time.




1.5 
"Purchase Order" means a written order issued by Arthrex to Bovie with respect
to purchases of Products, substantially in the form attached hereto as Appendix
B, which shall be subject to, and governed exclusively by, the terms of this
Agreement.




1.6            "Ramp-Up
Period" shall mean the first six months of the Term (as defined below) of this
Agreement.


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2.0 PURCHASEAND SALE OF PRODUCTS.
2.1                          Bovie's Supply
Obligations




(a)            Bovie
shall use its best efforts to supply Arthrex with Product inventory. Subject to
the provisions of Section 5 below, all Products sold under this Agreement shall
conform in all material respects to the product specifications ("Product
Specifications") and manufacturing processes ("Manufacturing Processes") as set
forth in Appendix A as such Products, Product Specifications and Manufacturing
Processes may be modified from time to time by Bovie's engineering and design
teams; provided, however, that no
changes, modifications or improvements may be made to, or implemented within,
any Products delivered to Arthrex pursuant to this Agreement without Arthrex's
prior written consent, such consent not to be unreasonably
withheld.




(b)            Subject
to Section 2.1(c), Bovie shall agree to any reasonable and lawful modification
to the Product Specifications requested by Arthrex in writing, which are
designed to improve the Products; provided, however, that Bovie
shall have a reasonable period of time to implement such Product
Specifications.




(c)            Notwithstanding
anything to the contrary in Sections 2.1(a) and (b), in the event that any
change or modification to the Products or the Product Specifications results in
a material change to the costs incurred by Bovie in the development, production,
manufacture, sterilization and/or packaging of the Products, Bovie shall so
notify Arthrex prior to the implementation of the change or modification and,
upon the written consent of Arthrex thereto, the purchase prices, as set forth
in Section 3.1, shall be modified accordingly.




(d)            Bovie
agrees, and shall cause its officers, directors, employees, advisers, agents and
consultants (collectively, "Representatives") to agree, that if any Product
Specification requested by Arthrex in accordance with Section 2.1(b), includes
changes to the Products or to the Product Specifications ("Inventions"), that
all Inventions shall be the sole property of Arthrex to the maximum extent
permitted by applicable law and to the extent permitted by law shall be "works
made for hire" as that term is defined in the United States Copyright Act (17
USCA, Section 101). Arthrex shall be the sole owner of all patents, copyrights,
trade secret rights and other intellectual property or other rights in
connection with the Inventions. Bovie shall, and shall cause its Representatives
to, assign to Arthrex all right, title and interest Bovie and/or its
Representatives may have or acquire in any and all Inventions. Bovie shall, and
shall cause its Representatives to, assist Arthrex in every proper way to
obtain, and from time to time, enforce, all patents, copyrights or other rights
on said improvements in any and all countries, and to that end Bovie shall, and
shall cause its Representatives to, execute all documents necessary. Arthrex
shall have the sole and exclusive right to:




(i) apply
for, obtain and vest in the name of Arthrex alone (unless Arthrex otherwise
directs) letters patent, copyrights or other analogous protection in any country
throughout the world and when so obtained or vested to renew and restore the
same in its sole discretion; and


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(ii)
defend any opposition proceedings in respect of such applications and any
opposition proceedings or petitions or applications for revocation of such
letters patent, copyright or other analogous protection.




(e)
Bovie's and its Representatives' obligations to assist Arthrex in obtaining and
enforcing patents and copyrights for the Inventions in any and all countries, as
set forth above, shall continue beyond the Term, at Arthrex's cost.




2.2            Arthrex's Purchase
Obligations




(a)           Subject
to Section 2.11, Arthrex shall engage Bovie as the exclusive manufacturer of one
hundred percent (100%) of its Product requirements in the marketplace,
including, without limitation, Products required for engineering, testing and
clinical trials, if any. Except as expressly set forth herein, Arthrex agrees to
purchase all of its Product requirements exclusively from Bovie, and from no
other manufacturer, person or entity, including, without limitation, any entity
belonging, in whole or in part, to Arthrex.




(b)           Subject
to Section 2.2(a) above, Arthrex shall provide Bovie with firm Purchase Orders
for Products in accordance with the lead-times set forth in Section 2.4(a);
provided, that
Arthrex shall have the right, up to the date of manufacture, and with the
consent of Bovie, which shall not be unreasonably withheld, to issue binding,
written change orders to increase or decrease the quantity of such Purchase
Orders. Arthrex agrees to accept partial shipments of Products should it, for
any commercially reasonable reason, become necessary to ship in advance of order
completion. Bovie shall make all commercially reasonable efforts to comply with
any revisions to Purchase Order requirements consistent with the provisions of
Section 2.3. Within seven days after receipt of a Purchase Order from Arthrex,
Bovie shall acknowledge such receipt and confirm whether the order can be
supplied.




2.3            Estimates of
Requirements




(a) (i)
Upon execution and delivery of this Agreement, and upon each successive
three-month anniversary of the execution and delivery of this Agreement, Arthrex
shall deliver to Bovie a rolling three-month written commitment of Arthrex's
requirements of Products for the immediately succeeding three-month period
(each, a "Quarterly Commitment"). Arthrex shall deliver Quarterly Commitments to
Bovie no later than 30 days prior to the applicable three-month anniversary
date. Bovie shall, no later than 15 days after receipt of each Quarterly
Commitment, notify Arthrex of any prospective problems, of which Bovie is aware,
that might prevent Bovie from meeting Arthrex's order quantities or estimated
Delivery Dates.




(ii) Upon
execution and delivery of this Agreement, and upon each successive annual
12-month anniversary of the execution and delivery of this Agreement, Arthrex
shall deliver to Bovie a written, non-binding good faith estimate of Arthrex's
requirements of Products from Bovie for delivery during the immediately
succeeding 12 months (each, an "Annual Forecast"). Arthrex shall deliver Annual
Forecasts to Bovie no later than 60 days prior to the applicable annual
anniversary date. Bovie shall, no later than 15 days after receipt of each
Annual Forecast, notify Arthrex of any prospective problems, of which Bovie is
aware, that might prevent Bovie from meeting Arthrex's forecasted requirements
or estimated Delivery Dates.


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(b) Bovie
and Arthrex agree to cooperate with each other and work jointly to establish and
maintain a smooth and efficient timetable for the manufacture and supply of
Products to Arthrex hereunder. Bovie shall use commercially reasonable efforts
to supply Arthrex with all of its Product requirements, including, but not
limited to, the use of commercially reasonable efforts to accommodate "Rush"
orders from Arthrex; provided, however, Bovie shall
not be in breach of this Agreement for any failure to supply quantities of
Products which exceed the Quarterly Commitments provided by Arthrex under
Section 2.3(a) by more than 200%.




2.4           Orders,
Packaging and Delivery




(a)           Unless
otherwise agreed to in writing by the parties, all Products purchased pursuant
to this Agreement shall be effected by Arthrex's issuance of a firm written
Purchase Order, consistent with Section 2.3 above. Each Purchase Order shall
specify the type and quantity of the Product to be delivered, as well as
requested Delivery Dates. All requested Delivery Dates shall provide for at
least 30 days lead time for the manufacture and delivery of the Products ordered
(taking into consideration the production schedule established in the Quarterly
Commitments). After the end of the Ramp-Up Period, subject to Section 2.3(b), a
failure by Bovie to deliver Products within 30 days of a Delivery Date shall be
a material breach of this Agreement and be subject to Section 7.1.




(b)           (1)
Bovie shall be responsible for, in accordance with the terms, provisions and
conditions set forth in this Agreement: (i) the sterilization of the Products at
its facility or facilities or at any contract facility or facilities; (ii) the
packaging of the Products for shipment in accordance with validated procedures;
and (iii) the shipment of such Products. Arthrex, at its own expense, will
provide Bovie with Arthrex's labeling for the Products bearing Arthrex's
corporate name and trade dress. Bovie will print, either directly or through a
third party, labels and other printed material to be included as part of the
finished Products. Products manufactured by or on behalf of Bovie after Bovie's
receipt of any new or altered labeling for the Products, shall bear such new
labeling. Bovie shall also place other required notices and marks, such as ETL
and CE (both as defined below) notices and markings, as Arthrex may hereafter
prescribe from time to time as it deems appropriate, on all copies and
embodiments of the Products and associated documentation and advertising. Bovie
shall not remove any Arthrex approved or designated notice from any Products. As
set forth in Section 3.1, Arthrex will pay the costs of all private labeling by
Bovie.




(2) Bovie
shall not hire, contract with or otherwise engage any one or more contract
facilities to perform any of its obligations as set forth in this Agreement with
respect to the sterilization of the Products without the prior written consent
of Arthrex, which consent shall not be unreasonably withheld or delayed; provided, that any
contract facility that is engaged in any way with the sterilization of the
Products shall (i) perform the sterilization of the Products in accordance with
specifications that have been provided or approved in writing by Arthrex and
(ii) meet the same governmental and regulatory requirements, and maintain the
same registrations and certifications, as applicable, that Bovie is required to
meet under Section 2.5; provided, further, that Bovie
shall be liable for, and shall indemnify and hold Arthrex harmless in connection
with liabilities arising from, any violations of this Section
2.4(b)(2).


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(c)            Unless
otherwise agreed to, in writing, by the parties, all Products manufactured for
Arthrex shall be delivered to Arthrex at its principal place of business in
Naples, Florida. All shipments of Products to Arthrex shall be billed F.O.B.
Bovie's manufacturing plant in Florida. All deliveries shall be delivered in a
manner as may be, intermittently, agreed to by the parties. Title to and risk of
any loss and/or damage to the Products shall pass to Arthrex upon delivery of
such Product by Bovie, or any agent of Bovie, to the shipping
agent.




(d)            Bovie
shall assist Arthrex in arranging any desired shipping insurance (in amounts
that Arthrex shall determine) and shall use its best efforts to deliver all
Products by their respective requested Delivery Dates (provided that in no event
shall a Delivery Date be less than 30 days after the date the Purchase Order is
issued, unless otherwise consented to by Bovie), using mutually agreeable
carriers. All costs and expenses relating to transportation and delivery shall
be at Arthrex's expense. Arthrex shall have the right to require and inspect any
special or varied packing that it believes is reasonably necessary to meet the
customs, regulatory or other requirements within a territory.




(e)            Bovie
shall certify, in writing, upon Arthrex's written request, that each delivery of
Product was produced and tested in compliance with the Product
Specifications.




(f)            Arthrex
may return any defective Products to Bovie, pursuant to a product recall or
otherwise, for credit or replacement as Arthrex shall determine.




2.5           Quality
Control and Regulatory Compliance




(a)           During
the Term, Bovie shall establish and maintain a quality assurance control program
to be maintained by its Quality Control Team. Bovie shall enter into Arthrex's
Contract Manufacturers/Suppliers/Vendors Agreement with respect to quality
assurance, a copy of which is attached hereto as Appendix C. Arthrex shall
maintain its Quality Control Department, which shall provide technical and other
assistance to Bovie in order for Bovie to better understand and meet the Product
Specifications and manufacturing requirements. Bovie's Quality Control Team and
Arthrex's Quality Control Department shall work together in an effort to
establish total quality assurance.




(b)           During
the Term, Bovie shall manufacture the Products in a manner that is in compliance
with all federal and state governmental and regulatory requirements in the
United States of which Bovie is legally required to comply, including, but not
limited to, the FDA's Quality System Regulations ("QSR"), including Good
Manufacturing Practices ("GMP"), as well as ISO-9001 registrations (provided and
for such time that such standards remain valid) and EN 46001 certification, and
with the laws and regulations of each jurisdiction located outside of the United
States. Bovie, at its sole expense, shall have ETL Semko's medical devices group
("ETL") test and evaluate each of the Products and maintain the eligibility of
the Products for ETL Certification and for ETL's Certification Mark. Boyle shall
also comply with the essential requirements of the European health, safety and
environmental protections legislations set forth in the European Union Council
Medical Device Directives (the "EU Medical Device Directives") and declare such
compliance by affixing the "CE Marking" to the Products shipped to
Arthrex.


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(c)            Bovie
shall maintain all documents and records necessary for regulatory compliance and
such documents and records shall be maintained for a period of no less than
seven years from creation. Upon request and within a reasonable period of time,
Bovie shall make such documents and records completely available for inspection
by Arthrex, at any reasonable time during normal business hours. All such
documents and records reviewed by Arthrex shall be subject to the
confidentiality provisions of Section 8 herein.




(d)            Bovie
hereby covenants, after reasonable input from Arthrex, to implement a failure
investigation mode that is reasonably satisfactory to Arthrex and to establish a
formal complaint system as required by the United States Food, Drug &
Cosmetic Act, as amended, including all regulations promulgated pursuant thereto
(the "Act"), including, without limitation, the time requirements set forth in
the Medical Device Reporting regulations. Each party shall maintain a record of
all complaints received with respect to any Product in each jurisdiction in
which the Products are sold, and shall promptly notify the other party of such
complaints, in order to allow the responsible party to comply with any and all
regulatory requirements imposed upon it, by any country. Further, Bovie agrees
to assist Arthrex in analyzing and responding to such complaints and to make all
records readily accessible to Arthrex. Arthrex shall, upon receipt, notify
Bovie, in writing, of all warnings, disclaimers or informed consent statements
relating or affixed to any Products, or required to be acknowledged as a
condition to use of such Products.




(e)            In
the event of a regulatory audit at Arthrex, which involves any Products, Arthrex
shall notify Bovie of such audit within one week thereof. Pursuant to such
notice of audit, Bovie shall supply Arthrex with documents from the Quality
Control Team, related to the Products, within three business days from a request
by Arthrex.




(f)            Bovie
shall promptly notify Arthrex whenever a request for a plant inspection is
received from the FDA and shall promptly advise Arthrex of any scheduled FDA
inspection and the results thereof A copy of Form 483 observation or other
applicable report, which applies to the Products, shall be supplied to Arthrex
upon request. Bovie shall promptly take steps to remedy any valid deficiencies
found by the FDA inspectors relating to the manufacture, sterilization and
packaging of the Products.




2.6           Plant
Inspection




Arthrex
shall have the right to have qualified Arthrex employees, contractors or agents
present at Bovie's manufacturing facility, at mutually agreeable times during
normal business hours to (i) observe Bovie's manufacture of Products; (ii)
inspect Bovie's facility and manufacturing procedures, as such relate to
Products manufactured hereunder, and quality assurance/control procedures for
compliance with (A) QSR, including GMP, as well as ISO-9001 registrations
(provided and for such time that such standards remain valid) and EN 46001
certification, (B) ETL standards for testing and evaluation of each of the
Products and (C) compliance with the EU Medical Device Directives in connection
with the CE Marking; and (iii) inspect Bovie's inventory, work-in-process, raw
materials, QSR records and such other matters as may be pertinent to proper
quality assurance of Products to be delivered under the tea's of this
Agreement.


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2.7            License




Subject
to the provisions of this Agreement, during the Term, Arthrex grants to Bovie a
limited non-exclusive, non-transferable license to any intellectual property
that may be provided from time to time by Arthrex to Bovie in accordance with
Section 2.1, solely to manufacture, sterilize and package the Products. Such
license is personal to Bovie and shall not be sublicensed to, transferred to or
used for the benefit of, any person or entity not authorized in writing by
Arthrex except to a Back-up Supplier as set forth in Section 2.11. No other
licenses of any rights of Arthrex, except those expressly granted by this
Agreement, shall be construed to be extended to Bovie or its affiliates, foreign
divisions, licensees or customers, expressly or by implication, whether
pertaining to the subject matter of this Agreement or otherwise. To the extent
reasonable and practical, Bovie shall place all notices, including, but not
limited to, intellectual property notices such as patent notices or
confidentiality notices, and legends and other notices as Arthrex may hereafter
prescribe from time to time as it deems appropriate, on all copies and
embodiments of the Products and associated documentation and advertising. Bovie
shall not remove any Arthrex approved or designated notice from any
Products.




2.8           Acceptance
and Rejection




(a)           Except
as provided herein, Arthrex shall accept all Products delivered in accordance
with the terms and conditions of this Agreement. Arthrex may reject any portion
of any shipment of Products if such shipment does not conform in any material
respect with (i) the Product Specifications or (ii) subject to Section 2.3(b),
the quantities requested in the Purchase Order. In order to reject a shipment,
Arthrex must give Bovie a reasonably detailed statement of its reasons for
rejection and, where appropriate, Product samples demonstrating the proposed
nonconformance and requesting that Bovie either remedy or provide a reasonable
plan to promptly remedy such nonconformance within a reasonable time which shall
not to exceed 45 days. If no such statement is received by Bovie, then Arthrex
shall be deemed to have accepted the shipment of Product. In the event of proper
rejection by Arthrex, Bovie shall, within five days, notify Arthrex of whether
it accepts Arthrex's notice of nonconformity or it shall be deemed to accept
such notice.




(b)           If
Bovie disagrees with any proposed nonconformity by Arthrex, then both parties
agree to cooperate and make every reasonable effort to resolve the disagreement.
If Bovie confirms Arthrex's rejection, Bovie shall, at its sole option, and in a
reasonably prompt manner, either (i) replace (if it has not already done so) the
nonconforming Product with conforming Product or (ii) credit to Arthrex the
purchase price therefor.




(c)           Any
replacement shipments shall be subject to the provisions and procedures
contained in this Agreement. Whether or not Bovie accepts Arthrex's basis for
rejection, upon receipt of a notice of rejection and at Arthrex's request, Bovie
shall use its reasonable commercial efforts to promptly provide replacement
Product, which shall be purchased by Arthrex pursuant to this
Agreement.


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2.9           Product
Recalls




(a)            In
the event that either Bovie or Arthrex determines that a recall of any one or
more Products is necessary for any reason, Bovie and Arthrex, as applicable,
shall so notify each other in writing. Arthrex shall, immediately upon receipt
of such notice, give notice of the recall to each customer to which it has sold
any Products, along with the instructions, if any, delivered by Bovie or
prepared by Arthrex and/or Bovie relating to the recall.




(b)            Arthrex
and Bovie shall assist each other in giving effect to the recall. Bovie shall
bear all costs and expenses of any recall caused by its manufacturing,
packaging, misbranding or other issues caused by acts of Bovie that potentially
affect the safety, use or efficacy of the Products including, without
limitation, obligations to third parties, costs of notifying customers and costs
associated with the shipment of recalled Products from customers to Arthrex or
Bovie, and replacement of such products. Arthrex shall, however, bear all costs
of any recall caused by its misrepresentations or other acts causing a recall to
occur.




2.10
Arthrex's Right of First Refusal/Offer of Additional Manufacturing




(a)           In
the event that, at any time and from time to time, Bovie desires on its own
behalf, and not in connection with any contract, agreement or arrangement with
any third party, to manufacture, develop or produce any products which are
compatible with or otherwise relate to the technology contained in the Products
("Other Products"), Bovie shall first give written notice to Arthrex of such
desire, allowing Arthrex a reasonable opportunity to offer to be the exclusive
sellor or distributor of such Other Products, upon terms, conditions and
provisions reasonably similar to the terms, conditions and provisions contained
herein; provided, however, that subject
to Section 10, Bovie shall have no obligation to make any such offer to Arthrex
in connection with any Other Products which Bovie develops, produces or
manufactures on behalf of third parties.




(b)           Arthrex
must, within 30 days after receipt of the written notice, provide Bovie with a
written notice of acceptance ("Notice of Acceptance"), specifying a good faith
estimate of the quantity of Other Products that it shall sell or distribute,
based upon terms and conditions reasonably similar to the terms and provisions
contained herein. If, within 30 days of receipt of the written notice, Arthrex
has not delivered an effective Notice of Acceptance, Bovie shall have the right
to solicit any third party for the exclusive distribution of the Other Products;
without incurring any liability to Arthrex.




2.11
Alternate Source of Supply




If Bovie
is unable to supply Arthrex with its Product requirements in accordance with
Sections 2.1, 2.2 and 2.3 herein, including, but not limited to, an order by
Arthrex for Products which exceeds a Quarterly Commitment by more than 200%,
then Bovie shall promptly notify Arthrex of its inability to supply such
Products. If the supply issue cannot be resolved, Arthrex shall have the right
to engage a Back-Up Supplier to manufacture and supply the Products and to
terminate any Purchase Order, in whole or in part, that Bovie was unable to fill
without liability or charge. Such right shall continue until 30 days after Bovie
notifies Arthrex that it is prepared to supply all of Arthrex's Product
requirements, as provided herein. Bovie shall, in good faith, cooperate fully
with Arthrex and any Back-Up Supplier in supplying Arthrex with Products,
including assisting in the transfer of molds and any information necessary for
the supply of such Products. Any disclosure by Bovie and/or Arthrex to, or with
regard to, a Back-Up Supplier, or use of technical information by a Back-Up
Supplier, shall be subject to the Confidentiality provisions set forth in
Section 8 herein. Nothing in this Section 2.11, or this Agreement, shall
interfere with Arthrex's right to designate a Back-up supplier to manufacture
Products under the terms of this Section 2.11.


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3.0 P CE
AND PAYMENT; REBATE.




3.1 Purchase
Price


The
prices for Products purchased hereunder shall be set forth in the Pricing List,
attached hereto as Appendix D. The prices set forth in the Pricing List shall
include all charges related to Bovie's preparation, labeling, packaging, crating
and loading of the Products; provided, however, that in no
event shall the Prices exceed the lowest price that Bovie receives from third
party purchasers of like products in like volumes.




3.2           Taxes
and Duties




Except as
provided in this Agreement, each party shall be responsible for the payment of
all taxes and other governmental charges assessed against it and applicable in
any respect to this Agreement, and the grant or exercise of the rights granted
by this Agreement, and, in the event the other party is required to collect such
charges, shall promptly pay such charges to the other party. If any transaction
undertaken pursuant to this Agreement shall be subject to a foreign, state or
local sales tax, use tax, value added tax, customs duties or other similar taxes
or duties, the transferee of the property in the transaction giving rise to such
tax or duty shall be liable for payment of such tax or duty, and shall reimburse
the transferor for any tax or duty payments the transferor shall be required to
make to any governmental authorities.




3.3           Payment
of the Purchase Price




Bovie
shall bill Arthrex for all purchases made under this Agreement, by invoice sent
to Arthrex at Arthrex's address referenced on the first page of this Agreement.
All invoices submitted by Bovie to Arthrex shall be payable within 30 days after
Arthrex's receipt of said invoices; provided, that
Arthrex shall be entitled to a 1% discount from each invoice if such payment is
made within 10 days' of receipt of such invoice.




3.4            Rebate




Bovie
shall issue a credit or refund to Arthrex for, or replace at no charge to
Arthrex, all defective or otherwise unmerchantable Products returned by Arthrex,
or returned by the customers to Arthrex and subsequently returned to Bovie by
Arthrex, within 30 days of return to Bovie, and Bovie shall bear responsibility
for all costs associated with such Products, including any regular surface
freight charge.


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4.0CAPITAL. EQUIPMENT;DESIGNS/SPECIFICATIONS.


4.1 Capital
Equipment


Bovie
shall provide for such capital equipment as Bovie deems reasonably necessary for
the manufacturing, sterilizing and packaging of the Products at the Bovie plant
or facility or any contract facility used by Bovie. All such capital equipment
provided by Bovie shall remain the sole property of Bovie, and all processes and
specifications that relate to such capital equipment shall constitute Bovie's
proprietary Confidential Information, as defined in Section 8 herein, belonging
exclusively to Bovie. Any and all copyrights, patents, trademarks, proprietary
rights and/or trade secrets, registered or otherwise, arising or occurring,
under federal, state or other law and/or regulation, from or as a result of
Bovie capital equipment or any Confidential Information belonging to Bovie,
shall remain the sole property of Bovie.




4.2            Tooling
Equipment




In the
event that any tooling equipment is needed for the manufacturing, sterilizing
and packaging solely of the Products (the "Tooling Equipment"), Arthrex shall,
at its sole discretion, either pay for such Tooling Equipment or reimburse Bovie
for the purchase of such Tooling Equipment at Bovie's purchase price including
any discounts, rebates or other purchase price reductions to which Bovie is
entitled; provided, that
Arthrex shall consent in writing to the need for any Tooling Equipment prior to
the purchase or order thereof. Any such Tooling Equipment shall be and remain
the sole property of Arthrex. Bovie shall reimburse Arthrex for any damage to
the Tooling Equipment that exceeds the normal wear and tear of such Tooling
Equipment or was caused by the abuse or misuse of such Tooling Equipment by
Bovie, its Representatives or the representatives of any contract facility
engaged by Bovie.




4.3             Designs/Specifications; Manufacturing
Processes




Arthrex
shall retain sole ownership of the designs and specifications provided by it for
Products, to the extent that such designs and specifications constitute
proprietary Confidential Information, as defined in Section 8 herein. Bovie
shall retain sole ownership of all design and specifications, manufacturing
processes, including, but not limited to, injection or insert molding, and
assembly and packaging procedures, which processes shall constitute proprietary
Confidential Information, as defined in Section 8 herein.




4.4            Retention
of Samples




Bovie
shall retain as samples such quantities of Products as Arthrex shall reasonably
request. Retained samples shall be maintained in a suitable manner for a
reasonable period of time past the manufacture date. All such samples shall be
available for inspection and testing by Arthrex at reasonable times and upon
reasonable notice.


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5.0
WA                      
NTIES; LIMITATION OF LIABILITY; INSU              CE.




5.1          Product
Warranties




Subject
to the provisions set forth in Section 5.3 below, Bovie warrants: (i) that all
Products delivered hereunder shall conform in every material respect to Product
Specifications at the time of shipment; (ii) that all Products shall be
manufactured, sterilized and packaged in accordance with (A) QSR, including GMP,
as required by the Act, (B) the pertinent rules and regulations of the FDA and
(C) the EU Medical Device Directive, and shall have been evaluated and tested by
ETL; (iii) that no Product delivered hereunder shall at time of shipment be
adulterated or misbranded within the meaning of the Act, or within the meaning
of any applicable state or municipal law in which the definitions of
adulteration and misbranding are substantially the same as those contained in
the Act, provided such laws are constituted and effective at the time of such
delivery; and (iv) the Bovie-provided Product Specifications embedded in the
design and manufacture of any of the Products do not constitute or create an
infringement of any United States or non-United States patent, copyright,
trademark or other proprietary right or trade secret, be it registered or
otherwise, arising under federal, state or other law and/or regulation
(collectively, the "Product Warranties"). These Product Warranties shall be null
and void and shall not apply to any Product which is in any way altered,
modified, damaged or replaced by any person other than Bovie, or which is abused
or misused whether intentionally or accidentally.




5.2          Limitation of
Liability of Bovie




THE
FOREGOING WARRANTIES, SET FORTH IN SECTION 5.1 ABOVE, ARE EXCLUSIVE AND ARE IN
LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS OF ANY D. BOVIE HEREBY
DISCLAIMS ALL OTHER WARRANTIES AND REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR USE AND/OR PARTICULAR PURPOSES. BOVIE SHALL NOT, UNDER ANY CIRCUMSTANCES, BE
LIABLE FOR SPECIAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY NATURE
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ANY LOST REVENUES OR PROFITS OF
ARTHREX AND/OR ITS CUSTOMERS, AGENTS AND DISTRIBUTORS, RESULTING FROM OR ARISING
OUT OF OR IN CONNECTION WITH ANY SALE, MANUFACTURE, DISTRIBUTION OR ANY USE OF
ANY PRODUCT, WHETHER OR NOT BOVIE HAS BEEN ADVISED OF THE POSSIBILITY OF
DAMAGES, EXCEPT TO THE EXTENT OF NEGLIGENCE AND WILLFUL MISCONDUCT OF BOVIE OR
ITS REPRESENTATIVES. THE FOREGOING LIMITATION OF LIABILITY APPLIES BROADLY, AND
TO ANY AND ALL PRODUCTS MANUFACTURED AND SUPPLIED HEREUNDER, AND SHALL NOT BE
CONSTRUED TO APPLY ONLY TO DAMAGES OCCURRING AS A RESULT OF BREACH OF ANY
PRODUCT WARRANTIES, BUT SHALL ALSO APPLY TO ANY DAMAGES TO ARTHREX OCCURRING AS
A CONSEQUENCE OF THIS AGREEMENT OR ANY BREACH THEREOF, EXCEPT TO THE EXTENT OF
NEGLIGENCE AND WILLFUL MISCONDUCT OF BOVIE OR ITS REPRESENTATIVES. ALL
LIMITATIONS OF LIABILITY, PURSUANT TO THE TERMS


11




HEREIN,
SHALL SURVIVE ANY TERMINATION OR EXPIRATION OF THIS AGREEMENT.




5.3           Limitation
of Liability of Arthrex




ARTHREX
HEREBY DISCLAIMS ALL EXPRESS OR IMPLIED WARRANTIES AND REPRESENTATIONS,
INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR USE AND/OR PARTICULAR PURPOSES. ARTHREX SHALL NOT, UNDER ANY CIRCUMSTANCES,
BE LIABLE FOR SPECIAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY NATURE
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ANY LOST REVENUES OR PROFITS OF BOVIE
AND/OR ITS CUSTOMERS, AGENTS AND DISTRIBUTORS, RESULTING FROM OR ARISING OUT OF
OR IN CONNECTION WITH ANY SALE, DISTRIBUTION OR ANY USE OF ANY PRODUCT, WHETHER
OR NOT ARTHREX HAS BEEN ADVISED OF THE POSSIBILITY OF DAMAGES, EXCEPT TO THE
EXTENT OF NEGLIGENCE AND WILLFUL MISCONDUCT OF ARTHREX OR ITS REPRESENTATIVES.
THE FOREGOING LIMITATION OF LIABILITY APPLIES BROADLY, AND TO ANY AND ALL
PRODUCTS DISTRIBUTED OR SOLD HEREUNDER, AND SHALL NOT BE CONSTRUED TO APPLY ONLY
TO DAMAGES OCCURRING AS A RESULT OF BREACH OF ANY PRODUCT WARRANTIES, BUT SHALL
ALSO APPLY TO ANY DAMAGES TO BOVIE OCCURRING AS A CONSEQUENCE OF THIS AGREEMENT
OR ANY BREACH THEREOF, EXCEPT TO THE EXTENT OF NEGLIGENCE AND WILLFUL MISCONDUCT
OF ARTHREX OR ITS REPRESENTATIVES. ALL LIMITATIONS OF LIABILITY, PURSUANT TO THE
TERMS HEREIN, SHALL SURVIVE ANY TERMINATION OR EXPIRATION OF THIS
AGREEMENT.




5.4           Insurance




Bovie
shall acquire and maintain products liability insurance in a minimum amount of
$5 million in the aggregate and $2 million per occurrence, and Bovie shall name
Arthrex as an additional insured on all such policies and will provide Arthrex
with proof of insurance prior to the Start Date (as defined below) and
thereafter upon Arthrex's reasonable request. Such insurance shall be in
addition to, and not in lieu of, any insurance policy or policies maintained by
Arthrex. Bovie shall not cancel or terminate such products liability insurance
without 30 days prior notice to Bovie. Bovie shall notify Arthrex not less than
30 days' prior to any proposed cancellation, termination, non-renewal or
modification of such products liability insurance. Bovie acknowledges that a
failure to comply with this Section 5.4 shall be a material breach under Section
7 of this Agreement




6.0           T
E.




This
Agreement shall commence upon execution and delivery of this Agreement. The term
of this Agreement shall be five years, commencing on the date of the first
commercial shipment of Products manufactured at, and from, Bovie's facility (the
"Start Date"), and closing upon expiration of the fifth full year following the
Start Date (the "Term"). Following closing of the initial Term, this Agreement
shall be renewed for consecutive three-year periods, subject to the written
consent of both parties. If this Agreement is extended in accordance with the
preceding sentence, the "Term" shall be extended until the end of the applicable
extension period. Written notification to terminate must be given not less than
180 days prior to the intended termination date; provided, that if
Arthrex elects to have the Agreement terminate in accordance with this Section
6.0, Arthrex shall purchase all of Bovie's remaining inventory of the Products
up to and to the extent that Bovie's inventory does not exceed the Quarterly
Commitment for the quarter during which this Agreement is so terminated by
Arthrex.


12




7.0 TE
INATION.




7.1           Termination
for Material Breach




(a)           Either
party may terminate this Agreement, in writing, in the event of a material
breach by the other of this Agreement; provided, however, that the
parry asserting such breach must first serve written notice of the alleged
breach on the offending party, and must allow the offending party 45 days, from
the date of delivery of such notice, within which to cure the alleged breach.
For purposes of this Agreement, the term "material breach" shall include, but
not be limited to:


(i)           Bovie's
breach of Section 2.1(a) or 2.1(d);




(ii)          the
termination, for any reason, of the Manufacturing and Development Agreement
entered into between the parties hereto, dated as of the date
hereof;




(iii)         Bovie's
breach of Section 2.4(a); or




(iv)        Bovie's
transfer or sale of all or part of its individual assets, or all or part of its
individual business pertaining to the Products manufactured and supplied
pursuant to this Agreement; provided, however, that it
shall not be a material breach hereunder if any party that it is not a
competitor of Arthrex, other than any Affiliate of Bovie, becomes a party to
either: (i) a merger by, with or of Bovie, or any part, Affiliate or subsidiary
of Bovie that is involved in the manufacture, development, sterilization,
packaging or supply of the Products; or (ii) an acquisition of Bovie or any
part, Affiliate or subsidiary of Bovie that is involved in the manufacture,
development, sterilization, packaging or supply of the Products.




Notwithstanding
the preceding, Arthrex may terminate this Agreement immediately, without notice
or cure period, upon a material breach described in either clause (iii) or
clause (iv) above.




(b)           Arthrex
shall have the right to both immediately terminate this Agreement and obtain
injunctive relief in the event of the unauthorized use and/or disclosure of the
Confidential Information by Bovie. Arthrex may terminate this Agreement
immediately upon any attempt, unless, if curable, cured within 45 days by Bovie,
to assign, delegate, sublicense or otherwise transfer the license set forth in
Section 2.7 or any of its rights or obligations under this Agreement, except as
expressly provided for in this Agreement.


13




7.2            Bankruptcy;
Insolvency




Either
Party may terminate this Agreement, effective immediately upon the giving of
written notice, if the other Party shall file a petition for bankruptcy, or
shall be adjudicated a bankrupt or insolvent, or shall take advantage of the
insolvency laws of any state of the United States or of any country, or shall
make an assignment for the benefit of creditors, or shall have a receiver
appointed, whether by private instrument or by court officer, for its property
which is not dismissed within 60 days, or become subject to an involuntary
petition for bankruptcy which in not dismissed within 60 days.




7.3             Effect of
Termination




In the
event of termination of this Agreement pursuant to this Section 7, both parties
shall cooperate with each other and make all reasonable, good faith efforts to
accommodate each other, including but not limited to, with the transfer and/or
return of molds, equipment, Confidential Information and any other information,
documentation and/or data. Termination of this Agreement, for whatever reason,
shall not affect any rights or obligations that may have accrued to either party
prior to the effective date of such termination.




7.4             Survival




The
obligations of consent to change the Products and the Product Specifications set
forth in Section 2.1, the obligations of Confidentiality, set forth in Section
8, the Warranties and Limitation of Liability provided for in Section 5, the
Indemnification provisions set forth in Section 9 and the provision for
Assignment set forth in Section 11 herein, shall survive the expiration or
termination of this Agreement.




8.0CONFIDENTIALITY.




8.1The parties hereby agree
to keep strictly confidential and to not use, or permit the use of, for any
purpose whatsoever during the Term, and for a period of five years following
expiration or termination of this Agreement, all information received or
observed from the other party pursuant to this Agreement or otherwise
(including, without limitation, information of such party or such party's
customers or the business associates disclosed or observed, infoimation that is
known or reasonably should be known to be trade secrets and/or proprietary in
nature, and licenses, patents, patent application, technology or processes and
business plans of the other party) (the "Confidential Information"), except as
disclosure or use of such Confidential Information is expressly permitted by
this Agreement. Confidential Information does not include information which: (i)
is or becomes available to the general public or to other manufacturers within
the applicable industry, through no act or fault of the recipient; (ii) is
rightfully disclosed to recipient by a third party under no obligation of
confidentiality with respect to such information; or (iii) is rightfully in the
possession of the recipient at the time of disclosure without obligation of
confidentiality or non-use with respect thereto.




8.2
The recipient of Confidential Information shall protect it from disclosure with
the same degree of care by which it protects its own Confidential Information.
Each party shall use its best efforts to ensure that its Representatives do not
disclose or make any unauthorized use of Confidential Information, and each
parry agrees to promptly notify the other upon discovery of any unauthorized use
or disclosure of the other party's Confidential Information. Each party shall be
liable for the unauthorized use or disclosure of the other party's Confidential
Information by such party's Representatives.


14




8.3
Bovie shall not use the proprietary Confidential Information belonging to
Arthrex, including, without limitation, Arthrex's designs, specifications,
drawings, processes, materials, molds, tooling, jigs and fixtures, for any
purpose other than to manufacture Products for Arthrex, without Arthrex's prior
written consent.




8.4
In the event that Bovie or any of its Representatives is requested or required
(by oral questions, deposition, interrogatories, requests for information or
documents, subpoena, civil investigative demand or other process) to disclose
all or any part of any Confidential Information, Bovie will provide Arthrex with
prompt notice of such request or requirement so that Arthrex may seek an
appropriate protective order or waive compliance with the provisions of this
Agreement, as well as notice of the terms and circumstances surrounding such
request or requirement. In such case, the parties will consult with each other
on the advisability of pursuing any such order or other legal action or
available steps to resist or narrow such request or requirement. If, failing the
entry of a protective order or the receipt of a waiver hereunder, Bovie is, in
the opinion of counsel acceptable to Arthrex, legally compelled to disclose
Confidential Information, Bovie may disclose that portion of the Confidential
Information which counsel advises Bovie that it is legally compelled to
disclose. In any event, Bovie will use its best efforts to obtain and will not
oppose action by Arthrex to obtain an appropriate protective order or other
reliable assurance that confidential treatment will be accorded the disclosure
of such information. Bovie will cause its Representatives and agents to comply
with this paragraph.




9.0INDEMNIFICATION.




9.1Arthrex agrees to and
shall indemnify and defend Bovie, and hold Bovie harmless, from and against any
and all claims, alleged claims, losses, harms, damages, liabilities, penalties,
lawsuits, threats of lawsuits, recalls or other governmental action, costs and
expenses, including, without limitation, reasonable attorneys' fees, suffered or
incurred, made against or sustained by Bovie or any of its Affiliates, arising
from or as a result of: (i) any actual or alleged defects in the
Arthrex-provided Product Specifications, if any; (ii) any Arthrex breach of this
Agreement; (iii) any acts, negligent or otherwise, or willful malfeasance on the
part of Arthrex or its Representatives or customers, in connection with
Arthrex's design, sale, marketing or distribution of Product and/or any other
activities or actions in connection with the Product; and/or (iv) any claims or
allegations that the manufacture, use or sale of any Product manufactured by
Bovie resulting solely from such Arthrex-provided Product Specifications, if
any, hereunder constitutes or creates an infringement of any United States or
non-United States patent, copyright, trademark or other proprietary right or
trade secret, be it registered or otherwise, arising under federal, state or
other law and/or regulation.


15




9.2
Bovie agrees to and shall indemnify and defend Arthrex, and hold Arthrex
harmless, from and against any and all claims, alleged claims, losses, harms,
damages, liabilities, penalties, lawsuits, threats of lawsuits, recalls or other
governmental action, costs and expenses, including, without limitation,
reasonable attorneys' fees, suffered or incurred, made against or sustained by
Arthrex or any of its Affiliates, arising from or as a result of: (i) injury to
person or property to the extent that such claims arise out of or result from
(A) any product liability claim with respect to the manufacturing,
sterilization, packaging, branding and delivery of the Products, (B) any actual
or alleged defects in the designs of any product if such defect is the result of
Bovie-provided Product Specifications or (C) the failure of Bovie to meet all of
the Arthrex-provided Product Specifications; (ii) any Bovie breach of this
Agreement; (iii) any acts, negligent or otherwise, or willful malfeasance on the
part of Bovie or its Representatives, contract facilities or customers, in
connection with Bovie's manufacturing, sterilizing, packaging, branding and
delivery of the Products and/or any other activities or actions in connection
with the Products; and/or (iv) any claims or allegations that the manufacture of
any of the Products resulting solely from Bovie's manufacture of such Products
or from Bovie-provided Product Specifications hereunder constitutes or creates
an infringement of any United States or non-United States patent, copyright,
trademark or other proprietary right or trade secret, be it registered or
otherwise, arising under federal, state or other law and/or
regulation.




9.3
Nothing in this Section, or in the terms of this Agreement, shall limit Bovie's
liability to an unaffiliated third party for a claim, or alleged claim, against
Bovie for death or bodily injury to such third party caused by gross negligence
or willful misconduct in the manufacture of a Product hereunder.




9.4Each party shall give the
other prompt notice of any potential liability, and upon receiving notice of any
such liability, each party shall, when possible, promptly notify the other of
commencement of any action, a general summary of the action and, when
applicable, notice by Bovie to Arthrex of demand for indemnification. In the
later event, Arthrex shall have the right to participate in and to assume the
defense of such action with counsel of its choosing; provided, however, that both
parties should cooperate in such defense, if and when such cooperation would
benefit the overall defense. No settlement of such action may be made without
the consent of Arthrex, which consent shall not be unreasonably withheld or
delayed. The terms of this Section shall survive the expiration or termination
of this Agreement.




10.0NON-COMPETITION.




During
the Term, Bovie agrees not to, whether directly or indirectly, or through any
person or entity, whether on its own behalf or on behalf of any third party
other than Arthrex or Arthrex's Affiliates, (i) sell any of the Products to
third parties or Affiliates of Bovie or (ii) sell any console (as defined in
Appendix A) to any orthopedic distributor or company or to specifically market,
promote or advertise any such modified console for any orthopedic use; provided, however, that Bovie
may continue to perform under any contract, agreement or arrangement that would
otherwise violate this Section 10 which was in effect prior to the date hereof,
provided, further, that Bovie
shall not expand, increase or enlarge the scope of, or quantities involved with,
any such existing agreements, contracts or arrangements with third parties.
Notwithstanding the foregoing, Bovie may not sell any Products or consoles if
such Products or consoles contain any intellectual property or Confidential
Information of Arthrex.




11.0 BINDINGEFFECT/ASSIGNMENT.




11.1This Agreement and the
performance of any obligations hereunder shall be binding upon, shall inure to
the benefit of and be enforceable by, the parties hereto and any and all
permitted assignees, successors and legal representatives of the parties
hereto.


16




11.2 This
Agreement, and all rights, remedies, obligations, liabilities or interests in or
arising hereunder, as well as the performance of any obligations hereunder, may
not be assigned, delegated, encumbered or in any other manner transferred,
directly or indirectly, by a party hereto, without prior written consent of the
other party. Any attempted assignment, delegation, encumbrance or other transfer
in violation of this Agreement shall be void and of no effect, and shall be a
material breach hereof.




11.3
Bovie agrees that it shall not transfer all or part of its individual assets, or
all or part of its individual business pertaining to the Products manufactured
and supplied pursuant to this Agreement, unless and without establishing and
demonstrating, in writing, to Arthrex that the transferor of such assets and/or
business expressly agrees to assume all rights and obligations set forth in this
Agreement. The terms of this Section shall survive the expiration or termination
of this Agreement.




12.0MISCELLANEOUS.




12.1
Further Assurances




Each
party hereto agrees to execute, acknowledge and deliver such further
instruments, and to do all such other acts, as may be necessary or appropriate
in order to carry out the purposes and intent of this Agreement.




12.2
Force Majeure




Except
where set forth expressly herein, neither party shall be liable for any delay or
for any consequence of any delay in the production or delivery or purchase, as
the case may be, of any of the Products if such delay shall be due to any cause
beyond its reasonable control, including, but not limited to, acts of God or the
public enemy, valid law, acts or requests of any national or provincial
government, or of any national or provincial officer or agent purporting to act
under duly constituted authority, wars, floods, fires, storms, strikes,
lockouts, delivery of nonconforming or defective material, supplies or
equipment, interruptions of transportation, freight embargoes or failures,
exhaustion or unavailability on the open market or delays in delivery of
material, supplies, equipment or services necessary for the performance of any
provision hereof, or happening of any unforeseen acts, misfortune, or casualty
by which performance hereunder is delayed or prevented; provided, however, that the
party so affected will use all commercially reasonable efforts to remedy the
situation, except that nothing contained herein shall require such party to make
settlement of any labor dispute on terms unacceptable to it and no such party
shall be liable to the other for any losses, damages, or costs by reason of its
inability to remedy the situation. If any such delay occurs, then (unless the
cause thereof shall frustrate or render impossible or illegal the performance of
this contract or shall otherwise discharge the same), the parties' period for
performing their respective obligations shall be extended by such period (not
limited to the length of the delay) as the other party may reasonably require to
complete the performance of its obligation. In addition to the foregoing, the
parties agree that Bovie shall have no obligation to supply Product to Arthrex
during any period in which Arthrex is in breach of any of its obligations under
this Agreement.


17




12.3
Relationship




This
Agreement shall not be construed to create between the parties hereto or their
respective successors or permitted assignees, the relationship of principal and
agent, joint-venturers, co-partners or any other similar relationship, the
existence of which is hereby expressly denied by each party. Each of the parties
shall be, in all matters connected to this Agreement, independent contractors.
Neither party shall be liable to any third party in any way for engagement,
obligation, contract, representation or transaction or for any negligent act or
omission to act, of the other, except as expressly provided herein.




12.4
Notice




All
notices, requests, consents, demands or communications contemplated or required
by this Agreement shall be in writing and, in order to be valid, shall be
delivered by personal delivery or sent by certified or registered mail or
equivalent, return receipt requested, by facsimile or telex, promptly confirmed
by a writing sent by registered or certified mail, or by recognized overnight
courier, addressed to the parties at the addresses set forth on the first page
of this Agreement, or such other addresses as may be designated, in writing, by
the respective parties. Any notice shall be deemed given when received by the
other parry.




12.5
Legal Construction/Severability




If any
part of this Agreement shall be held invalid or unenforceable, the remainder of
the Agreement shall nevertheless remain in full force and effect.




12.6
Section Headings/Construction




The
captions and headings appearing in this Agreement are for reference purposes
only and shall not be considered part of this Agreement. Such captions and
headings shall not modify, amend or affect the provision hereof. This Agreement
has been jointly prepared and shall not be strictly construed against either
party hereto.




12.7
Entire Agreement; Modifications; Consents; Waivers




This
Agreement, together with the Appendices attached hereto, contains the entire
Agreement of and between Bovie and Arthrex, with respect to the subject matter
hereof. This Agreement may not be modified or amended except by an instrument or
instruments in writing, signed by the party against whom enforcement of any such
modification or amendment is sought. Each party hereto may, by an instrument in
writing, waive compliance by the other party with any term or provision of this
Agreement on the part of such other party to be performed or complied with. The
waiver by either party hereto of a breach of any term or provision of this
Agreement shall not be construed as a waiver of any subsequent
breach.




12.8
Governing Law




The
provisions of this Agreement shall be governed, in all respects, by the laws of
the State of Florida and adjudicated, respectively, within the exclusive
jurisdiction of the courts in the State of Florida. The United Nations
Convention on the International Sale of Goods shall not apply to transactions
made pursuant to this Agreement.


18




12.9
Counterparts; Telecopies




This
Agreement may be executed by telecopy in multiple counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument. Transmission by telecopier of an executed counterpart this Agreement
shall be deemed to constitute due and sufficient delivery of such counterpart.
Each fully executed counterpart of this Agreement shall be deemed to be a
duplicate original.




12.10
Litigation




Each
Party hereby unconditionally and irrevocably consents to the jurisdiction and
venue in the Courts of the State of Florida and in the U.S. District Court for
the Middle District of Florida, and irrevocably waives any objection (including
any objection with respect to venue) that any Party may now or hereafter have to
the jurisdiction of said courts, and irrevocably consents to the service of
process of said courts in any matter relating to this Agreement by the mailing
of process by registered or certified mail, postage prepaid, at the addresses
specified in this Agreement. If necessary, Bovie shall appoint a registered
agent in the State of Florida for acceptance of service of process and/or other
notices provided for under this Agreement and shall notify Arthrex of the
identity of such registered agent within 30 days after the Start Date. Any award
made by a court in conjunction with litigation between the Parties regarding
this Agreement shall include an award of all reasonable attorneys' fees and cost
incurred by the Party in whose favor the final decision is
rendered.


19




ThESS        
OF, the pities he eve executed this Agmmt ;as of the datefast it ten above.





BOVIEDIC ..
      CORPORATIONBy:Nanrxe:Title:ARX,
      rNC.By:Title:VP.


20




The
Products that are subject to the Original Equipment Manufacturer Agreement (the
"Agreement") are as follows:




The
Product Specifications for each of the aforementioned Products are as
follows:




To Be
Determined




The
Manufacturing Process for each of the aforementioned Products are as
follows:




To Be
Determined







Appendix
D




Form of
Purchase Order







Appendix
D




Arthrex,
Inc.'s ("Arthrex") Form Contract Manufacturers/Suppliers/Vendors
Agreement







Appendix
D




Product
Price List




To Be
Determined