1

 
authorities, or the like in order to obtain an approval or license to distribute a Productwithin a specific country. It is assumed that filing a Governmental Registration requires that allrelevant Product Certifications have been obtained.     **1.4 “Know-How”**shall mean the know-how relating to the development or manufacture ofany Product, including, without limitation, processes, techniques, methods, products, apparatuses,and other materials and compositions which are reasonably related thereto.     **1.5 “Manufacturing Costs”**shall mean the direct labor, direct overhead and RawMaterials costs incurred in the manufacture of Products.     **1.6 “Synergetics Patent”**shall mean any and each of the patents set forth onSchedule B, along with any foreign counterparts thereof.     **1.7 “Product Certification”**shall mean the demonstration of performancecharacteristics and design and quality processes showing conformance with internationallyrecognized product safety and conformance standards and the associated documentation (test reports,product specifications, etc.) in order to achieve certification of standards compliance. Auditingand testing activities generally are required to be conducted by a third party certifyingorganization authorized or otherwise recognized as able to certify compliance.     **1.8 “Raw Materials”**shall mean the materials, components, and packaging required tomanufacture and to package any Product in accordance with the Specifications.     **1.9 [Redacted**********]**     **1.10 “Specifications”**shall mean the specifications for the design, composition,product safety assurance, packaging, and/or quality control, including product acceptance testingprotocols, of any Products as the same may hereafter be modified by mutual agreement of the Partiesin writing. Schedule C attached hereto and incorporated herein includes preliminarySpecifications for the Products. Schedule C shall be modified from time to time byagreement of the Parties as required to account for changes in the Specifications and Products, andcomplete Specifications will be set in accordance with Section 2.2(c) herein.     **1.11 “Term”**shall have the meaning set forth in Section 11.1 herein. ** This information has been omitted pursuantto a request for confidential treatment and has been filed separately with theSecurities and Exchange Commission.
2

 
     **1.12 “Expansion Payment”**shall mean a payment from Alcon to Synergetics to be usedby Synergetics for capacity expansion to meet the supply obligations under this Agreement.     **1.13 “Process Engineering Payment”**shall mean a payment from Alcon to Synergetics tobe used to improve product design, product performance and reduce manufacturing costs.**ARTICLE 2****ARRANGEMENT AND SCOPE**     **2.1****Arrangement.** Synergetics shall manufacture, sell and deliver Product toAlcon. Alcon may at times supply parts or components to Synergetics, **[redacted**********]**, forincorporation into the Product. Synergetics shall not manufacture or sell Product containing anypart or component supplied to Synergetics by Alcon, **[redacted**********]**, to any party otherthan Alcon.     **2.2****Purchase/Supply of Requirements****.**     **(a) **Alcon and its Affiliates shall purchase all of their requirements of theProducts solely from Synergetics during the term of the Agreement. Alcon is not obligated to makeany minimum purchases under this Agreement.     **(b) **Synergetics shall supply Product to Alcon as required by Alcon (and itsAffiliates), subject to the qualifications set forth herein. Each such Product shall bemanufactured by Synergetics or its suppliers in accordance with the Specifications.     **(c) **The Parties acknowledge that, as of the Effective Date, a complete Specificationfor any Product has not been defined. After the Effective Date, the Parties will work diligentlyand in good faith to define Specifications acceptable to Synergetics and approved by Alcon for**[redacted**********]**, the designs for which will be based substantially on Synergetics’ products**[redacted**********]**. The Parties’ expectation is that these Specifications will be set within**[redacted**********]**of the Effective Date, and manufacturing validations will be complete, andsuch Product will be ready to be delivered **[redacted**********]**of the Effective Date.     **(d) **With regard to **[redacted**********]**that are capable of**[redacted**********]**and would compete directly with the Products, but which are not within atleast one valid claim of the Synergetics Patents **[redacted**********]**, Alcon shall, if it sodesires and in its sole discretion, manufacture itself or purchase from Synergetics, all of itsrequirements for such **[redacted**********]**for a period of five (5) years from the EffectiveDate. After the expiration of that five (5) year period, and until the expiration of this Agreement, beforeaccepting an offer ** This information has been omitted pursuantto a request for confidential treatment and has been filed separately with theSecurities and Exchange Commission.
3

 
from a third party to supply a non-Product **[redacted**********]**, Alcon shall,to the extent permitted by law and to the extent permitted by any applicable agreement to whichAlcon is a party, (i) provide to Synergetics all information about the third party**[redacted**********]**that would reasonably be required to determine the cost to Synergetics todevelop and manufacture, and to develop and manufacture, **[redacted**********]**(“Development &Manufacturing Information”), and (ii) for a period of up to one hundred eighty (180) days from thedate such Development & Manufacturing Information is transmitted to Synergetics, afford Synergeticsa right of first refusal and permit Synergetics to submit its own proposal to manufacture**[redacted**********]**for Alcon, with such proposal including all such reasonable details asnecessary to estimate development feasibility and costs, development and manufacturingimplementation time, and proforma manufacturing costs. If Alcon is unable to provide allinformation reasonably required to determine the cost to Synergetics to develop and manufacture,and to develop and manufacture such non-Product **[redacted**********]**(as may be due to alimitation on Alcon under the law or under an applicable agreement, and such limitation cannot beovercome by Synergetics’ willingness to enter a reasonable confidentiality agreement with respectto such information), then it shall be deemed that Alcon has not fulfilled its obligation toprovide Synergetics the right of first refusal described above, and until such time as thatdeficiency has been cured, Alcon shall not be permitted to enter a supply arrangement with suchthird party. Nothing in this Agreement shall restrict the right of Alcon to internally developand/or manufacture, and then sell, any products, including without limitation any non-Product**[redacted**********]**that are outside the scope of the Synergetics Patents, regardless ofwhether those products include components acquired from third parties.     **(e) **Alcon, in its sole discretion, may at any time during the Term make a proposalthat Synergetics supply to Alcon hereunder any **[redacted**********]**, and Synergetics shallrespond to such proposal with a “no bid” or an offer to supply **[redacted**********]**to Alconupon terms acceptable to Synergetics. Thereafter the parties may, but shall not be required to,negotiate to include **[redacted**********]**within this Agreement.**ARTICLE 3****TERMS OF COMMERCIAL SALE**     **3.1****Prices.**     **(a) **The price (the “Price”) for each Product is as set forth on Schedule Aattached hereto. The Prices set forth in Schedule A shall include all costs ofmanufacturing (but not including the cost of any components supplied by Alcon for incorporation in Product during the manufacturing process)labeling, ** This information has been omitted pursuantto a request for confidential treatment and has been filed separately with theSecurities and Exchange Commission.
4

 
 and packaging in accordance with the Specifications, **[redacted**********]**. Alcon willspecify all labeling and packaging materials and the package configuration, provided that thepackaging configuration is compatible with Synergetics’ packaging equipment and know-how. ThePrices set forth on Schedule A shall remain effective for two years after Alcon receivesthe first shipment of the Product. At that point, and for every two (2) year period thereafter,if Synergetics seeks to increase the Prices, it must provide reasonably detailed writteninformation using generally accepted accounting principles as used in accounting for costs ofmanufacturing the Products and the related gross profit margin, justifying the proposed priceincrease to Alcon no less than ninety (90) days before expiration of the applicable two yearperiod Following discussion between the parties of the price increase details, and following goodfaith negotiations, if the Parties are unable to agree on the proposed price increase, then thematter will be pursued under the provisions of Section 12.1. Any mutually agreed price increaseapplicable to Products for such two (2) year period shall not exceed the lesser of (A) an amountmutually agreed upon by the Parties, (B) **[redacted**********]**or (C) **[redacted**********]**.     **(b) **Alcon will make a Process Engineering Payment to Synergetics within two (2)weeks of the Effective Date of this Agreement in the amount of one million U.S. dollars($1,000,000.00). This is the only required Process Engineering Payment during the term of theAgreement. The Process Engineering Payment is anticipated to allow Synergetics to make changes toSynergetics’ production processes to facilitate the supply of Products to Alcon. Such productionprocess changes may be implemented by Synergetics throughout the Term. Future process engineeringchanges and funding sources (if any) are subject to the mutual agreement of the Parties.     **(c) **Alcon will make an Expansion Payment to Synergetics within two (2) weeks of theEffective Date of this Agreement in the amount of one million U.S. dollars ($1,000,000.00). Thisis the only required Expansion Payment during the Term of the Agreement. The Expansion Payment isanticipated to allow Synergetics to expand its production capability to facilitate the supply ofProducts to Alcon. Such expansion may be implemented by Synergetics throughout the Term. Futureexpansion requirements and funding sources (if any) are subject to the mutual agreement of theParties.     **3.2****Orders****.**     **(a) **On a monthly rolling basis Alcon shall provide to Synergetics firm purchaseorders covering a three month period and specifying the delivery dates, and Synergetics shall useits good faith efforts to meet those delivery dates. Lead time for delivery after placement of a firmpurchase order should ** This information has been omitted pursuantto a request for confidential treatment and has been filed separately with theSecurities and Exchange Commission.
5

 
be at least ninety (90) days, unless otherwise agreed to by Synergetics.Alcon may reschedule open Purchase Order quantities, delivery dates and destinations with thirty(30) days written notice. Rescheduled quantities of Alcon’s firm purchase order for each month maynot be more than +/- 25% unless mutually agreed upon by both parties. To the extent there is anyconflict or inconsistency between this Agreement and any purchase order, purchase order release,confirmation, acceptance or any similar document, the terms of this Agreement shall govern.Notwithstanding Section 2.2 hereof, Synergetics shall be contractually obligated to supply the unitvolume ordered by Alcon only up to 100% of the quantity forecasted pursuant to Section 5.1 for theperiod from the beginning of such forecast to the last delivery date for any open order (the“Committed Amount”). Synergetics shall use commercially reasonable efforts to meet any orders inexcess of the Committed Amount or with requested delivery times less than the applicable MinimumLead Time.     **(b) **Alcon shall provide Synergetics, at no cost, **[redacted**********]**for theProducts. At a minimum, Alcon will provide quantities equal to the corresponding Purchase Orderquantity. Alcon shall ship **[redacted**********]**to Synergetics, at Alcon cost, for deliverywithin one (1) week after placement of the Purchase Order. The risk of loss shall remain withAlcon until **[redacted**********]**are delivered to Synergetics. **[Redacted**********]**willremain Alcon property, and shall be subject to inventory cycle counting and/or an annual physicalinventory audit. Alcon reserves the right to request the return of **[redacted**********]**to Alconat any time, provided that **[redacted**********]**that have begun assembly into Product shall onlybe returned upon purchase of the Product by Alcon.     **3.3****Delivery****.**All shipments must be accompanied by a packing slip thatdescribes the articles, states the purchase order number and shows the shipment’s destination.Synergetics agrees to promptly forward the original bill of lading or other shipping receipt foreach shipment in accordance with Alcon’s instructions.     **3.4****Payment****.**Synergetics further agrees to promptly render correct andcomplete invoices to Alcon and to accept payment by check or electronic transfer of funds. Allinvoices submitted by Synergetics shall be payable upon receipt and due net within thirty (30) daysafter receipt of such invoices. The date of invoice with respect to any Product shall not beearlier than the date of shipment of such Product.     **3.5****Shipment****.**All deliveries of the Products by Synergetics to Alconhereunder shall be shipped FOB Origin. Title to and risk of loss for any such product shall passfrom Synergetics to Alcon or ** This information has been omitted pursuantto a request for confidential treatment and has been filed separately with theSecurities and Exchange Commission.
6

 
its designee when it is delivered to the carrier at Synergetics’manufacturing or warehousing facility. Unless otherwise directed by Alcon in writing, Synergeticsshall select the carrier, and insure the shipment, the costs of which shall be charged to Alcon.Synergetics will package all Products in accordance with the packaging requirements included in theSpecifications, including as specified, sterile, single-use packaging.     **3.6****Acceptance****.**Alcon shall have no obligation to pay for any Product thatis subject to a claim of non-compliance with the Specifications; provided that any such claim ofnon-compliance is based upon product acceptance testing performed by Alcon in accordance with thetest protocols set forth in the Specifications; and provided further that Alcon shall pay forProduct within thirty (30) days of receipt of the invoice therefor, unless such Product has beenrejected within thirty (30) days of delivery. No inspection or testing of Product by Alcon or anythird-party agent of Alcon shall constitute acceptance by Alcon thereof, nor shall any suchinspection or testing be in lieu or substitution of any obligation of Synergetics for testing,inspection and quality control as provided in the Specifications or under applicable local, state,or federal laws, rules, regulations, standards, codes or statutes. Synergetics shall replace atits own cost and expense, including reimbursement of freight costs incurred by Alcon, Product thatfails to comply with the Specifications or other warranties made in Article 6 hereof, whichreplacement shall constitute Alcon’s sole and exclusive remedy therefore (but in no way limitingSynergetics’ indemnity obligations under Article 7 and confidentiality obligations under Article9). The acceptance (or non-rejection) of any Product shall in no way limit Alcon’s rights underSynergetics’ product warranty or for indemnification hereunder.     **3.7****Return of Non-compliant Product****.**Alcon shall notify Synergetics of theexistence and nature of any non-compliance with the Specifications that comes to its attention andshall return such non-compliant Product to Synergetics within fifteen (15) days after it isrejected by Alcon. Before returning such non-compliant Product, Alcon shall comply with allreasonable requirements of Synergetics’ returned goods policy, attached as Schedule E, including byobtaining a Returned Goods Authorization (“RGA”) number and marking the returned goods therewith,as appropriate under such policy. Synergetics shall have a reasonable opportunity, not to exceedfifteen (15) days from receipt of such returned Product, to inspect such non-compliant product andprovide Alcon an explanation of the non-compliance and proposed course of action (i.e., repair(including the nature of the repair) or replacement of the Product).     **3.8****Independent Testing.** If, after Synergetics’ inspections of any Product,the Parties disagree as to whether such Product conforms to the Specifications, either party maydeliver the item to anindependent third-party laboratory, mutually and reasonably acceptable to both Parties, foranalytical testing to confirm such item’s conformance to the Specifications. All costs associatedwith such third-
7

 
party testing shall be at Alcon’s expense unless the tested item is deemed by suchthird-party to be not in compliance with the Specifications, in which case all such costs,including reimbursement of freight and disposition costs, shall be promptly paid by Synergetics.**ARTICLE 4****ADDITIONAL PRODUCT RESPONSIBILITIES**     **4.1****Labeling and Marking****.**     **(a) **Alcon shall be responsible for the text and regulatory compliance of all packagelabels, labeling and Product inserts used in connection with the Products. For purposes of thisAgreement the terms “label” and “labeling” shall have the meanings set forth in Sections 201(k) and201(m) respectively of the U.S. Federal Food, Drug and Cosmetics Act.     **(b) **Alcon shall be responsible for the development and approval of the content ofthe label and the instructions for use. Synergetics shall provide Alcon with the English versionof the label for Synergetics’ **[redacted**********]**which will be the design basis for theProduct. Alcon shall be responsible for copy format, artwork preparation, and translations     **(c) **Alcon will specify all labeling and packaging materials and the packageconfiguration, provided that the packaging configuration is compatible with Synergetics’ packagingequipment and know-how.     **(d) **Synergetics shall have the right to apply reasonable patent marking on theProducts indicating the Synergetics Patents covering the Products, as well as reasonable markingindicating manufacture by Synergetics (i.e., manufactured by Synergetics for Alcon Laboratories,Inc.).     **4.2****Provision of Information by Synergetics****.**Synergetics shall, at thereasonable request of Alcon, provide Alcon with the following information relating to the Products,and, to the extent reasonably available to Synergetics, at no cost to Alcon:     **(a) **all relevant information on product safety, efficacy, reliability andperformance characteristics; and     **(b) **copies of all U.S. and foreign regulatory submissions and approvals, includingany 510(k) submissions, held by a Party for the Products. ** This information has been omitted pursuantto a request for confidential treatment and has been filed separately with theSecurities and Exchange Commission.
8

 
     **4.3****Changes****.**     **(a) **In no event shall any significant change in form, fit or function, safety,efficacy or reliability, or the appearance of an Product be made without the prior written approvalof Alcon. If the Parties agree on any such change, they shall modify the Specifications to reflectthe same, and shall record such change in the Parties’ respective engineering change order systems,as appropriate. As used in this Section 4.3, the term “significant change” shall mean any changethat (i) results in a material change to the Specifications, labeling or packaging; (ii) affects aProduct’s performance, physical appearance or configuration, or sterilization processes, (iii)affects product safety, reliability or integrity; (iv) requires a submission to or approval from agovernmental body; or (v) is a change in the indications for use or a material change in theinstructions for use. In the event of any significant change, Alcon shall have the responsibilityto establish an appropriate and reasonable qualification protocol, if required by Alcon, and Alconand Synergetics shall determine an appropriate inventory level for the pre-change Product in orderto cover on-going requirements during the qualification process.     **(b) **At any time and from time to time during the Term, Alcon may request thatSynergetics change the Specifications and/or the Products, if and to the extent that any suchchange is reasonably required to make the affected Product(s) meet applicable safety standards,governmental statutes, rules, orders or regulations or necessary electronic certificationrequirements. Synergetics shall use commercially reasonable efforts to effect any such changes ina reasonably prompt manner.     **(c) **The Parties will negotiate in good faith to determine the change in the purchaseprice, if any, or delivery schedule that may be required by any change to any Specifications of anyProduct under this Section 4.3.     **4.4****Regulatory Compliance****.**     **(a) ****Product Certifications****.**Synergetics will obtain the necessary ProductCertifications that will benefit and will be made available to Alcon in order to permit Alcon tofile Governmental Registrations for the Products. Synergetics shall apply for such ProductCertifications at Synergetics’ expense including any required updates due to any applicable changein worldwide product safety and compliance standards.     **(b) ****Governmental Registrations****.**Alcon shall apply, in its name and at itscost, for all Governmental Registrations required for Alcon to market Products, except thatSynergetics will obtain necessary Governmental Registrations for the United States. Synergeticsshall reasonably cooperate with Alcon in its efforts to obtain such Governmental Registrations.Synergetics agrees that Alcon shall have
9

 
access to all of Synergetics’ non-confidential regulatorysubmissions and Product Registrations for the Products **[redacted**********]**to the extentnecessary to exercise its rights or fulfill its obligations hereunder. Likewise, Alcon agrees thatSynergetics shall have access to all of Alcon’s non-confidential regulatory submissions for theProducts to the extent necessary to effect registration in the United States.     **4.5****Corrective Action.**     **(a) **In the event any governmental agency having jurisdiction shall request or order,or if Alcon shall reasonably determine to undertake, any corrective action with respect to anyProduct, including any recall, corrective action or market action, and the cause or basis of suchrecall or action is reasonably attributable to a breach by Synergetics of any of its warranties,guarantees, representations, obligations or covenants relating to that Product, then Synergeticsshall actively cooperate with Alcon in executing such corrective action relating to Product qualityand performance, and, Synergetics shall reimburse Alcon for the reasonable out of pocket costs ofsuch action, including the cost of replacing any Product which is so recalled, whether or not anysuch specific unit of Product shall be established to be in breach of any warranty by Synergeticshereunder; provided, however, that any such amount to be reimbursed to Alcon shall beproportionately reduced by an appropriate amount based on the degree to which such correctiveaction may also be reasonably attributable to a breach by Alcon of any of its obligations orcovenants hereunder or its negligence or willful misconduct.     **(b) **Before undertaking a voluntary corrective action with regard to the Products,Alcon shall provide, to the extent reasonably practicable under the circumstances, reasonableadvance notice to Synergetics of the proposed corrective action and shall discuss in good faithwith Synergetics its rationale for such proposed corrective action. The Party responsible for theissue causing the voluntary correction action shall be responsible for all costs and expensesassociated with the voluntary corrective action. If the responsible business people cannot resolvethe issues related to the voluntary corrective action, including the allocation of responsibilityand which party will bear the costs and expenses, then the unresolved issues will be determinedpursuant to the dispute resolution procedure outlined in Section 12.1. In the event a mediator isselected pursuant to Section 12.1, the Parties agree that the mediator shall make a bindingdecision on which party will be responsible for the costs and expenses associated with thevoluntary corrective action.     **4.6****Medical Device Reports****.**The Parties agree to cooperate in good faithwith respect to responding to or making any Medical Device Reports (“MDR’s”) pertaining to theProducts. Synergetics ** This information has been omitted pursuantto a request for confidential treatment and has been filed separately with theSecurities and Exchange Commission.
10

 
and Alcon shall actively cooperate in investigating the circumstancesunderlying the MDR and in responding to FDA or other governmental agency inquiries. Synergeticsshall file any necessary manufacturer MDR’s for all complaints that are found to meet thedefinition of MDR reportable events (as defined in 21 CFR, Part 803).     **4.7****Notice of Audit or Inquire.** Each party agrees to promptly notify theother of any FDA audit, or any audit by any other regulatory body, of its facilities used for themanufacture, storage or distribution of Products, or any request for information from the FDA, orother regulatory body, related to the manufacture of Products, as soon as practicable after itreceived notice of such audit or request.**ARTICLE 5****ADDITIONAL OBLIGATIONS**     **5.1****Forecasts.** Attached hereto as Schedule D is Alcon’s initialestimated purchases of the Products from Synergetics in the form of a written, non-binding, rollingtwelve (12) month forecast (the “Forecast”). After the date hereof, the Forecast shall be updatedand revised by Alcon not less frequently than on a quarterly basis, which update shall extend theForecast forward twelve (12) months therefrom. Although the Forecast is non-binding, Alconunderstands that Synergetics shall use the Forecast for planning purposes (including Raw Materialacquisitions and investment in equipment and other resources) in order to make available theproduction capacity required to manufacture and supply the forecasted amounts of the Productswithin the time frames specified therein and herein.     **5.2****Meetings****.**In the spirit of cooperation with which this Agreement isentered, the Parties shall use good faith efforts to meet not less frequently than quarterly duringthe initial twelve (12) months after the Effective Date, then bi-annually thereafter to discussissues that may arise from time to time in connection with each Party’s performance of thisAgreement. Such meeting should occur at a mutually acceptable location and time and should includethe Alcon and Synergetics individuals responsible for managing supply under this Agreement and mayinclude senior management from both Alcon and Synergetics.     **5.3****Insurance.** Synergetics agrees to procure and maintain in full force andeffect during the Term valid and collectible insurance policies in connection with its activitiesas contemplated hereby,which policies shall provide Commercial General Liability coverage including Products andContractual Liability coverage in an amount not less than $5 million per occurrence. Such policyshall name Alcon as an additional insured. Upon Alcon’s request, Synergetics shall provide toAlcon a certificate of coverage or other written evidence reasonably satisfactory to Alcon of suchinsurance coverage. Such insurance policy shall provide that in the event such insurance coverageshould be materially adversely changed or
11

 
terminated for any reason, the insurer thereunder willgive Synergetics and Alcon ten (10) days’ prior notice. The existence of such coverage shall in noway limit Synergetics’ liability or obligations hereunder. Alcon represents and warrants that ithas access to insurance and other financial resources adequate to meet any financial obligationreasonably foreseeable under this Agreement.**ARTICLE 6****REPRESENTATIONS AND WARRANTIES**     **6.1****Product Warranty****.**     **(a) **Synergetics warrants to Alcon that the Products will meet the Specifications inall material respects and will be free from material defects in its materials, workmanship anddesign, PROVIDED THAT:**(i)**Synergetics or an authorized Synergetics representative is notifiedwithin ten (10) business days of the warranty claim, and as soon as notice of analleged defect is received by Alcon or the alleged defect appears, the Product shallbe taken out of service or otherwise separated from inventory without known defect;**(ii)**The Product has not been subject to (1) neglect, misuse or operationcontrary to the instructions for use provided with the Product or (2) improperstorage or handling contrary to the storage and handling instructions provided withthe Product where either or both of those activities would materially adverselyaffect the initial quality of the Product; and**(iii)**No repairs have been attempted or parts replaced by anyone notauthorized by Synergetics to perform such repair, and the Product serial number,date stamp or other identification marks have not been removed or defaced.     **(b) **Synergetics’ liability under the warranty under Section 6.1(a) above is limitedto the (i) supply of replacement parts or replacement Product (including shipping costs) or (ii)labor and parts repair at an authorized Synergetics facility (including shipping costs from Alconto Synergetics’ facility and back) up to a value not exceeding the original Synergetics’ invoiceprice of the Product.     **(c) **The duration of the warranty under Section 6.1(a) above shall be**[redacted**********]**from the date the Product is shipped to the end-user, but in no event morethan **[redacted**********]**after shipment of the Product by Synergetics to Alcon. ** This information has been omitted pursuantto a request for confidential treatment and has been filed separately with theSecurities and Exchange Commission.
12

 
     **(d) **The warranty under Section 6.1(a) above does not include:**(i)**Packaging, freight or insurance for return shipments from the end-usercustomer to Alcon; or**(ii)**Any Product not originally supplied by Synergetics; or**(iii)**Any Product component supplied by Alcon, including, for example,**[redacted**********]**     **(e) **Synergetics represents and warrants that it complies and shall comply withapplicable statutes, laws, ordinances, rules and regulations relating to the manufacture, assemblyand supply of the Product, including, without limitation, those enforced by the FDA (includingcompliance with CFR 21 Part 820 Quality System Regulation and cGMPs) and by the InternationalStandards Organization (including, to the extent applicable to Product, IEC 60601-1 ProgrammableElectromechanical Equipment, and all applicable, related, IEC collateral standards). Synergeticsrepresents and warrants that it has obtained ISO 13485 certification and has submitted to the FDAan application for 510(k) clearance for the Products or will seasonably do so upon a determinationby Synergetics that such application is necessary for the Product and no current application orclearance covers such Product, and that the application for such clearance contains (or prior toclearance will contain) complete and accurate information and that the information containedtherein has been provided in good faith in compliance with all applicable statutes, laws,ordinances, rules and regulations.     **6.2****Execution and Performance of Agreement.** Synergetics and Alcon eachrepresents and warrants to the other that it has full right, power and authority to enter into andperform its obligations under this Agreement. Synergetics and Alcon each further represents andwarrants to the other that the performance of its obligations under this Agreement will not resultin a violation or breach of, and will not conflict with or constitute a default under anyagreement, contract, commitment or obligation to which such party or any of its Affiliates is aparty or by which it is bound and that it has not granted and will not grant during the term ofthis Agreement or any renewal thereof, any conflicting rights, license, consent or privilege withrespect to the rights granted herein.     **6.3****Intellectual Property.** Synergetics represents and warrants to Alconthat Synergetics owns or otherwise holds the right, title and interest in and to the SynergeticsPatents and Know-How and all other Synergetics intellectual property that may be used in connectionwith the Products, and that, to the best of Synergetics’ knowledge, the manufacture, use and saleof the Products in accordance with the terms ** This information has been omitted pursuantto a request for confidential treatment and has been filed separately with theSecurities and Exchange Commission.
13

 
of this Agreement does not and will not infringe anythird party’s rights under any patent, copyright, trademark or trade secret; provided thatSynergetics makes no representation or warranty with respect to the infringement of third partyrights based on the manufacture, use, or sale of **[redacted**********]**.     **6.4****Alcon Supplied Components****.**Alcon represents and warrants to Synergeticsthat to the best of Alcon’s knowledge, the manufacture, use and sale of **[redacted**********]**incombination with Product, as approved by Alcon in accordance with the Specifications, does not andwill not, by virtue of including **[redacted**********]**, infringe any third party’s rights underany patent, copyright, trademark or trade secret.     **6.5****Further Warranty Limitations.**     **(a) **SYNERGETICS MAKES NO WARRANTY, EXPRESS OR IMPLIED, OTHER THAN THOSE WARRANTIESEXPRESSLY MADE HEREIN, INCLUDING WITHOUT LIMITATION, NO WARRANTY OF MERCHANTABILITY OR OF FITNESSFOR ANY PARTICULAR PURPOSE.     **(b) **THE ABOVE WARRANTIES SHALL SUPERSEDE ANY DISCLAIMER OF WARRANTIES STATEMENTWHICH IS INCLUDED IN ANY DOCUMENTATION PROVIDED WITH THE PRODUCT, TO THE EXTENT THE PROVISIONS OFSUCH DISCLAIMER OF WARRANTIES ARE INCONSISTENT WITH THIS AGREEMENT.     **(c) **NOTHING CONTAINED IN THIS ARTICLE 6 SHALL IN ANY WAY LIMIT SYNERGETICS’INDEMNITY OBLIGATIONS UNDER ARTICLE 7 AND CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 9.**ARTICLE 7****INDEMNIFICATION**     **7.1****Indemnification by Synergetics****.**Synergetics shall indemnify, defend andhold harmless Alcon and its Affiliates and their respective officers, directors and employees fromand against any and all claims, damages, lawsuits, liabilities, costs, charges, judgments andexpenses (including interest, penalties and reasonable attorneys’ fees) (collectively “Damages”)incurred by such party arising out of or resulting from (i) material breach by Synergetics of any of its representations, warranties, guarantees,covenants or obligations contained herein; or (ii) any defect in any Products supplied bySynergetics to Alcon pursuant to this Agreement, except to the extent caused by a componentsupplied by Alcon, Alcon’s distribution practices, Alcon’s advertising or promotional material forthe Products, or misrepresentations of the ** This information has been omitted pursuantto a request for confidential treatment and has been filed separately with theSecurities and Exchange Commission.
14

 
Products by Alcon; or (iii) allegations the Productsinfringe any patent, copyright, trademark or trade secret, except to the extent the allegations aredirected to Alcon’s **[redacted**********]**; or (iv) allegations of patent mismarking. Except forthe parties to this Agreement and their affiliates, no other persons shall be a third partybeneficiary of this Section 7.1.     **7.2****Indemnification by Alcon****.**Alcon shall indemnify, defend and holdharmless Synergetics and its Affiliates and their respective officers, directors and employees fromand against any and all Damages incurred by such party arising out of or resulting from (i) anymaterial breach by Alcon of any of its representations, warranties, guarantees, covenants orobligations contained herein; or (ii) the use of the Products (including personal injury andproduct liability claims) to the extent caused by Alcon’s distribution practices, Alcon’sadvertising or promotional material for the Products, or misrepresentations of the Products byAlcon; or (iii) any defect in any Product component supplied by Alcon **[redacted**********]**; or(iv) allegations that Alcon’s **[redacted**********]**infringes any patent, copyright, trademark ortrade secret of a third party. Except for the parties to this Agreement and their affiliates, noother persons shall be a third party beneficiary of this Section 7.2.     **7.3****Claims**. Each indemnified party agrees to give the indemnifying partyprompt written notice of any matter upon which such indemnified party intends to base a claim forindemnification (an “Indemnity Claim”) under this Article 7. The indemnified party shall at alltimes reasonably cooperate in the settlement and defense of third party claims and shall makeavailable all records, materials and other relevant matter reasonably requested by the indemnitorin connection with such claims. The indemnified party, at its own expense, shall have the right toparticipate with the indemnifying party in the indemnifying party’s defense, settlement or otherdisposition of any Indemnity Claim, subject to the ultimate control of the indemnifying party.With respect to any Indemnity Claim relating solely to the payment of money damages and which couldnot result in the indemnified party’s becoming subject to injunctive or other equitable relief orotherwise materially adversely affect the business of the indemnified party in any manner, and asto which the indemnifying party shall have acknowledged in writing the obligation to indemnify theindemnified party hereunder, the indemnifying party shall have the sole right to defend, settle orotherwise dispose of such Indemnity Claim, on such terms as the indemnifying party, in its solediscretion, shall deem appropriate, provided that the indemnifying party shall provide to theindemnified party reasonable evidence of its ability to pay any damages claimed and withrespect to any such settlement shall have obtained the written release of the indemnified partyfrom the Indemnity Claim. The indemnifying party shall obtain the written consent of theindemnified party prior to ceasing to defend, settling or otherwise disposing of any IndemnityClaim if as a result thereof the indemnified party would ** This information has been omitted pursuantto a request for confidential treatment and has been filed separately with theSecurities and Exchange Commission.
15

 
become subject to injunctive or otherequitable relief or the business of the indemnified party would be adversely affected in anymanner.     **7.4****Survival.** This Article 7 shall survive any termination of thisAgreement for a period of six (6) years, notwithstanding the survival period in Section 11.6.     **7.5****Limitation on Amount****.**The maximum aggregate liability of either partyunder this Article 7 shall be Ten Million Dollars ($10,000,000.00).**ARTICLE 8****INABILITY TO MANUFACTURE, FORCE MAJEURE**     **8.1****Failure to Manufacture.**     **(a) **Should Synergetics become aware that it may be unable or fail for any reason tomanufacture or otherwise supply the Committed Amount of a Product in accordance with the agreedupon Specifications or other requirements specified in this Agreement (such actual failurehereinafter referred to as a “Manufacturing Deficiency”, the likelihood of such failure hereinafterreferred to as a “potential Manufacuting Deficiency”), then Synergetics shall immediately provideAlcon written notice to that effect and the Parties shall promptly meet to address the potentialshortage. Synergetics shall have ninety (90) days after providing notice of the potentialManufacturing Deficiency to cure the potential Manufacturing Deficiency, either by: (i) remedyingthe potential Manufacturing Deficiency itself or (ii) contracting with a third party supplierreasonably acceptable to Alcon to provide the Committed Amount of Product that meetsSpecifications. If Synergetics uses a third party supplier, the Prices charged to Alcon will notchange. After contracting with a third party supplier, Synergetics shall be permitted to resumemanufacture and supply of the Product once Synergetics provides reasonable evidence to Alcon thatSynergetics is reliably capable of doing so. If Synergetics or its third party supplier is notable to meet an order for a Committed Amount within sixty (60) days following the expiration of thedesired delivery date, then Synergetics shall ship the shortfall as soon as reasonably possibleand, unless the failure is a result of a Force Majeure event as set forth in Article 8 hereof,Synergetics shall discount the price applicable to such shortfall units by 10%.     **(b) **If Synergetics and the third party supplier do not cure the ManufacturingDeficiencywithin one hundred twenty (120) days after providing notice of the potential ManufacturingDeficiency, then Synergetics and Alcon will enter a mutually agreeable contract for Alcon toproduce and supply Synergetics with Synergetics’ requirements for Products. Synergetics willprovide Alcon with any know-how required to manufacture the Products under such contractmanufacturing arrangement and will pay Alcon all of its reasonable start-up costs associated withsuch manufacturing. Synergetics and Alcon will
16

 
negotiate a commercially reasonable transfer pricefor Products supplied by Alcon under such contract manufacturing arrangement, provided however thatsuch transfer price for Products shall not be less than 90% of the Price for Products hereunder.Synergetics shall be permitted to resume manufacture of Product once Synergetics providesreasonable evidence to Alcon that Synergetics is reliably capable of supplying the CommittedAmount. At such time as Synergetics resumes manufacture, Alcon will be permitted to complete anywork in process under the contract manufacturing arrangement.     **8.2****Force Majeure.** Except as otherwise provided in this Agreement,Synergetics shall not be liable for any failure to supply or deliver or for any delay in thedelivery of the Products hereunder, when any such failure or delay is caused, directly orindirectly, by fires; floods; accidents; explosions; strikes or other labor disturbances(regardless of the reasonableness of the demands of labor); wars; shortages of fuel, power, or rawmaterials; inability to obtain or delays of transportation facilities; acts of God; or any cause,whether similar or dissimilar to the foregoing, beyond the reasonable control of Synergetics,affecting Synergetics’ production and/or delivery of the Products covered by this Agreement orAlcon’s acceptance or resale thereof. Such failure will be excused for two months or as long assuch event shall be continuing (whichever period is shorter) provided that Synergetics gives promptwritten notice to Alcon of the Force Majeure Event. Synergetics shall exercise all reasonableefforts to eliminate the Force Majeure event and to resume performance, including by contractingwith a third party supplier. The provisions of this paragraph shall not serve to modify any rightsAlcon may have under paragraph 8.1 concerning Synergetics’ inability to manufacture.**ARTICLE 9****CONFIDENTIALITY**     **9.1****Confidential Information.** As used herein, “Confidential Information”shall mean the Specifications, the Know-How, the Manufacturing Costs, information pertaining to anySynergetics product (including information obtained from the testing and evaluation of any suchSynergetics product), the Raw Materials, information pertaining to any Alcon product (includinginformation obtained from the testing and evaluation of any such Alcon product), and all otherconfidential or proprietary information that is reduced to writing, marked as confidential andgiven to one Party by the other Party relating to such other Party or any of its Affiliates,including information regarding any of the products of such other Partyor any of its Affiliates, information regarding its advertising, distribution, marketing orstrategic plans or information regarding its costs, productivity or technological advances.Neither Party shall, during the Term and for a period of five years following the termination orexpiration of this Agreement for any reason, use, or disclose to third parties any ConfidentialInformation of the other (except to the extent reasonably necessary to exercise its rights orcomply with its obligations under this Agreement) and each
17

 
Party shall insure that its employees,officers and agents shall not use, or disclose to third parties any Confidential Information of theother (except to the extent reasonably necessary to exercise its rights or comply with itsobligations under this Agreement); provided, however, that Alcon may disclose ConfidentialInformation of Synergetics to Alcon’s Affiliates and consultants if such persons reasonably need toknow such information for purposes of this Agreement, are informed of the confidential nature ofsuch information and are under contractual obligation to Alcon to keep such informationconfidential and not use or disclose such Confidential Information. Confidential Information shallnot include information that (i) was already known to the receiving Party at the time of itsreceipt thereof, as evidenced by its written records (other than information obtained from thedisclosing Party or from a third party that did not have the right to make a disclosure ofinformation without violating an obligation of confidentiality to the disclosing Party), (ii) isdisclosed to the receiving Party after its receipt thereof by a third party who has a right to makesuch disclosure without violating any obligation of confidentiality, (iii) is or becomes part ofthe public domain through no fault of the receiving Party, (iv) is subsequently independentlydeveloped by the receiving Party without use of or reference or access to the disclosing Party’sConfidential Information or (v) is required to be disclosed to comply with applicable laws orregulations, including without limitation the rules or regulations of the United States Securitiesand Exchange Commission or of any stock exchange (including without limitation Nasdaq) or an orderof a court or regulatory body having competent jurisdiction, provided that the receiving Partygives reasonable notice of its intent to disclose such information.**ARTICLE 10****INFRINGEMENT**     **10.1****Third-Party Infringement.**     **(a) **If at any time during the term hereof, Alcon or Synergetics learns of anunlicensed third party sale of any Product in the United States, Europe, or Japan and such sale isreasonably believed to be within the scope of any Synergetics Patents, the Party learning of theunlicensed sale shall use reasonable efforts to promptly notify the other party in writing of suchthird party sale. As soon as reasonably practicable after notice has been delivered, seniorrepresentatives from Alcon and Synergetics will meet todetermine if they agree on (i) whether an unlicensed third party is marketing a product withinthe scope of any Synergetics Patents and (ii) whether legal action would be cost effective.     **(b) **If Synergetics and Alcon believe that an unlicensed third party ismarketing a product within the scope of any Synergetics Patents and that legal action would be costeffective, then Synergetics
18

 
will initiate and lead the legal action. Synergetics and Alcon willequally share the costs and awards of any such legal action.     **(c) **If Synergetics and Alcon believe that an unlicensed third party is marketinga product within the scope of any Synergetics Patents, but disagree that legal action would be costeffective, then the issue of whether to pursue legal action will be resolved pursuant to thedispute resolution procedure outlined in Section 12.1. If it is determined that legal action willbe pursued, then Synergetics and Alcon will equally share the costs and awards of any such legalaction.     **(d) **If Synergetics and Alcon do not agree that an unlicensed third party ismarketing a product within the scope of any Synergetics Patents, then the Parties agree to submitthe matter to binding arbitration pursuant to procedures and an arbitrator to be agreed upon by theParties, or in the absence of agreement, pursuant to an arbitrator appointed by, and thearbitration to be conducted in accordance with the Expedited Procedures of the Commercial DisputeResolution Procedures of the American Arbitration Association in Houston, Texas, with the issue tobe decided within thirty (30) days after submission of the issue.     (i) If the arbitrator’s opinion supports infringement, then Synergetics will takeprompt legal action, in no event more than one hundred twenty (120) days after receivingnotice from Alcon, to enforce its patents and stop such third party infringement.Synergetics and Alcon will equally share the costs and awards of any such legal action. Inthe event that Synergetics either fails to initiate litigation within the one hundred twenty(120) day period or fails to secure a court order or a binding agreement prohibiting thecontinued sale of the third party product within a reasonable time, such failure, ifuncured, shall permit Alcon, at Alcon’s sole option and after notice to Synergetics, toinitiate and control litigation to stop such third party sales, to which litigationSynergetics agrees to be joined and shall reasonably cooperate at Alcon’s expense, providedhowever that Synergetics (at Synergetics’ expense) shall be allowed to control anylitigation defense in protection of any Synergetics Patent (such as defense against claimsof invalidity and unenforceability) and must approve any settlement impacting Synergetics’rights under any Synergetics Patent. Alcon shall be allowed to retain all monetary damagesawarded from such litigation initiated by Alcon.     (ii) If the arbitrator’s opinion does not support infringement, then no legal action isrequired.     **(e) **If Synergetics and Alcon do not prevail at the trial court level, seniorrepresentatives from Synergetics and Alcon will discuss the advisability of appealing the adversejudgment. If the Parties
19

 
cannot agree on whether to file an appeal, the Parties will obtain alegal opinion from a mutually agreed upon intellectual property lawyer regarding the likelihood ofa successful appeal. If the agreed upon lawyer determines that an appeal is more likely to succeedthan not, then Synergetics will initiate and lead the appeal and the Parties will equally share thecosts and awards of any such legal action. If the agreed upon lawyer determines that an appeal ismore likely to fail or equally likely to fail or succeed, then Alcon will continue with theAgreement for two years from the date of the adverse judgment, after which Alcon, at its option,may: (i) immediately terminate the Agreement or (ii) renew the Agreement for two years.     **10.2****Ownership of Developments****.**     **(a) **Except for intellectual property and other Know-How provided by Alcon toSynergetics (in the form of supplied parts, components, product specifications, associated Alconpatent rights, or otherwise), which will remain the exclusive property of Alcon, all inventionsmade, conceived or acquired by Synergetics pursuant to its activities under this Agreement shall bethe exclusive property of Synergetics.     **(b) **Except as provided in Section 10.2(a) above, all inventions made, conceived oracquired by Alcon, and the intellectual property related thereto, will be the exclusive property ofAlcon.**ARTICLE 11****TERM AND TERMINATION**     **11.1****Term****.**The “Term” of this Agreement shall be coterminous with theConfidential Settlement and License Agreement, or such later date that is mutually agreed to inwriting by Alcon and Synergetics, or such earlier date as provided in this Agreement. ThisAgreement can be extended upon mutual written consent from both Parties.     **11.2****Termination of Agreement****.**Six months prior to the expiration of theAgreement, the Parties agree to negotiate a mutually agreeable written termination plan that willallow for the smallest reasonable impact of the termination on the then current Forecast and oncontinuing support for end-user customers of either Party throughout the remainder of the Term.     **11.3****Termination for Breach****.**If either Synergetics, on the one hand, orAlcon, on the other hand, shall materially breach any covenant, agreement or obligation under thisAgreement, then the other party may give notice to terminate this Agreement by giving such partynotice of such breach. The party receiving such notice shall have one hundred twenty (120) daysfrom the date of receipt thereof to cure such breach. If such breach is not cured within such onehundred twenty (120) day period, then the non-
20

 
breaching party shall have the right to terminatethis Agreement effective as of the end of such period. In the event such breach is cured duringsuch period, such notice shall be of no force or effect and this Agreement shall not be terminated.     **11.4****Termination for Insolvency.** Either party may terminate this Agreementupon notice if the other party makes an assignment for the benefit of creditors, is the subject ofproceedings in voluntary or involuntary bankruptcy instituted on behalf of or against such party,or has a receiver or trustee appointed for all or substantially all of its property; provided thatin the case of an involuntary bankruptcy proceeding, such right to terminate shall only becomeeffective if the other party consents to the involuntary bankruptcy or such proceeding is notdismissed within ninety (90) days after the filing thereof.     **11.5****Effect of Termination****.**Notwithstanding the termination of thisAgreement for any reason, each party hereto shall be entitled to recover any and all damages (otherthan consequential damages or other damages expressly excluded by this Agreement) that such partyshall have sustained by reason of the breach by the other party hereto of any of the terms of thisAgreement. Termination of this Agreement for any reason shall be without prejudice to Synergetics’right to receive all payments accrued and unpaid on the effective date of termination and shall notrelease either party hereto from any liability which at such time has already accrued or whichthereafter accrues from a breach or default prior to such expiration or termination, nor affect inany way the survival of any other right, duty or obligation of either party hereto which isexpressly stated elsewhere in this Agreement to survive such termination. In the event oftermination for any reason, Alcon shall have the right to continue to market and distribute theProducts until its inventory is fully depleted, unless such termination is for non-cured materialbreach of this Agreement by Alcon or results from the termination of the License Agreement fornon-cured material breach by Alcon, which shall result in Alcon having no right to continue tomarket or distribute the Products.     **11.6****Survival of Certain Provisions****.**The provisions of this Agreement setforth in Sections 4.5, 4.6, 4.7, 5.3, 11.5, 12.1, 12.2, 12.3, 12.5, and Articles 6, 7, and 9, andany remedies for the breach thereof, shall survive the termination of this Agreement under theterms hereof for a period of three (3) years beyond the termination or expiration hereof unlessotherwise stated in the Agreement.**ARTICLE 12****MISCELLANEOUS**     **12.1****Dispute Resolution****.**     **(a) CEO Discussions.**Before initiating any litigation against each other, the Parties shallendeavor to amicably resolve any dispute arising out of this Agreement or any other disputepertaining to
21

 
the respective businesses of the Parties. Before initiating any litigation arisingout of or related in any way to this Agreement, the Parties agree that the Chief Executive Officerof the party that proposes to initiate litigation (the “Initiating Party”) shall contact the ChiefExecutive Officer of the other party to attempt to resolve any dispute informally without resort tolitigation, contemporaneously with or before giving any written notice of the existence of adispute. The Chief Executive Officers may resolve the dispute themselves, or may designate otherrepresentatives to discuss and attempt in good faith to resolve the dispute. Each party shall workdiligently to address the concerns raised by the other, and in any event shall attempt to resolvethe dispute within thirty (30) days of being notified in writing of the existence of a dispute, orsuch other length of time as the Parties may both agree upon in writing.     **(b) Mediation**. In the event that the Parties are not able to resolve their dispute pursuantto and within the time provided by paragraph 12.1(a) above, the Parties agree that beforeinitiating any litigation against each other, the Parties shall submit any disputes to non-bindingmediation in Houston, Texas with a mutually acceptable mediator; provided, however, that theParties’ obligations to mediate shall not prejudice any party’s right to seek injunctive relieffrom an appropriate court following the mediation. After the expiration of the time period providedin paragraph 12.1(a) above, the Parties shall have ten (10) business days to pick a mediator tohear the dispute. If the Parties are unable within ten (10) business days to agree upon a mediator,the Parties shall utilize a mediator selected by JAMS from among its panel of former jurists. TheParties agree not to initiate any action before any court with respect to such dispute until theearlier of the completion of the mediation or ninety (90) days after the party proposing toinitiate litigation has given written notice of the dispute to the other party. In the event thatmediation is unsuccessful, until the end of a period of sixty (60) days following completion of themediation or one hundred fifty (150) days following written notice of the dispute, whichever isearlier, no party other than the Initiating Party may bring litigation to resolve the dispute. TheInitiating Party’s choice of forum for such litigation shall be subject to the rights of the otherparty to challenge the forum for any reason contemplated by the applicable procedural rules andcase law.     **(c) **The Parties agree that nothing in this Agreement shall be construed as precludinginjunctive relief following the mediation or otherwise altering the legal standard for theimposition of such relief under the appropriate legal standards. The Parties further agree that aParty’s participation in, ordelays resulting from, the dispute resolution procedures described herein shall not be usedeither in support of or in opposition to any claim or defense, whether equitable or at law, in anysubsequent litigation.     (d) Nothing in this section 12 precludes any party from complying with any regulatory or legalreporting requirement or otherwise making submissions to regulatory or administrative agenciesrequired by law that might affect the other party, or objecting to regulatory or administrativeagency decisions (e.g. patent opposition proceedings) that might involve any other party, providedthat timely advance notice is provided to such other Party of such actions related to proceedingsin which such other
22

 
Party is involved. In addition, nothing in this Section 12.1 shall prevent aParty from filing an action if such filing is reasonably believed to be required to avoid a statuteof limitations bar; provided, however, that such filing shall not otherwise affect the obligationof the filing Party to comply with the provisions of this Section 12.1, and the filing Party shall,if possible and to the extent legally permitted, delay formal service of process on the other Partyuntil completion of the associated dispute resolution process of this Section 12.1.     **12.2****Publicity****.**Neither party hereto shall originate any publicity, newsrelease, or other announcement, written or oral, whether to the public press, the trade, Alcon’s orSynergetics’ customers or otherwise, relating to this Agreement, or to performance hereunder or theexistence of an arrangement between the parties without the prior written approval of the otherparty hereto, which shall not be unreasonably withheld; provided that neither Party shall beprohibited from any notice or announcement to the extent required by any law, court order, rule,regulation, or other public disclosure requirement (including exchange requirements or the NASD’sor SEC’s requirements, as applicable), in the opinion of counsel for the disclosing Party.     **12.3 Limitation of Liability.**EACH PARTY HERETO WAIVES ANY CLAIM OF CONSEQUENTIALDAMAGES (INCLUDING LOST PROFITS) FROM THE OTHER. EACH PARTY HERETO WAIVES ANY CLAIM TO PUNITIVE OREXEMPLARY DAMAGES FROM THE OTHER. This limitation of liability does not apply to each Party’sindemnity and confidentiality obligations.     **12.4****Headings.** The Article and Section headings contained in this Agreementare for reference purposes only and shall not affect in any way the meaning and interpretation ofthis Agreement.     **12.5****Notices****.**All notices and other communications hereunder shall be inwriting. All notices hereunder of an Indemnity Claim, a Force Majeure Event, default or breachhereunder, or, if applicable, termination of the term hereof, or any other notice of any event ordevelopment material to this Agreement taken as a whole, shall be delivered personally, or sent bynational overnight delivery service or postage pre-paid registered or certified U.S. mail, andshall be deemed given when delivered, if by personaldelivery or overnight delivery service, or five (5) business days after deposit in the mail,if sent by U.S. mail, and shall be addressed as follows:     If to Synergetics: Chief Executive OfficerSynergetics USA, Inc.3845 Corporate Centre DriveO’Fallon, MO 63368
23

 
       with a Copy to: General Counsel    Synergetics USA, Inc.3845 Corporate Centre DriveO’Fallon, MO 63368     If to Alcon: Joanne BeckGeneral ManagerALCON, Inc.Bosch 69, P.O. Box 62CH-6331 Hunenberg, SwitzerlandPhone: 41 + 41 785 8858Facsimile: 41 + 41 785 8889       with a Copy to: Elaine WhitbeckSenior Vice President & General CounselALCON Laboratories, Inc.6201 South FreewayForth Worth, Texas 76134-2099Phone: (817) 551-8693Facsimile: (817) 568-7579or to such other place as either party may designate by written notice to the other in accordancewith the terms hereof.     **12.6****Failure to Exercise.** The failure of either party to enforce at anytime for any period any provision hereof shall not be construed to be a waiver of such provision orof the right of such party thereafter to enforce each such provision.     **12.7****Assignment****.**No Party hereto shall assign this Agreement without firstobtaining the written consent of the other Party hereto; provided, however, that consent shall notbe required for any assignment of this Agreement by a Party to a current or future Affiliate, norshall consent be required for assignment by a Party hereto as a consequence of merger, change ofcontrol, sale or transfer of all or substantially all of the assets of its vitreoretinal surgicalbusiness, consolidation, or by operation of law. Notwithstanding the foregoing, any provisions ofthis Agreement that are not yet fully performed at thetime of the assignment shall extend to and be binding upon the Parties hereto and theirsuccessors and assigns. Any attempted assignment of this Agreement without such consent, except asprovided herein, shall be void.     **12.8****Severability****.**In the event that any one or more of the provisions (orany part thereof) contained in this Agreement or in any other instrument referred to herein, shall,for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximumextent permitted by law, such
24

 
invalidity, illegality or unenforceability shall not affect any otherprovision of this Agreement or any other such instrument. Any term or provision of this Agreementwhich is invalid, illegal or unenforceable in any jurisdiction shall, to the extent the economicbenefits conferred by this Agreement to both parties remain substantially unimpaired, not affectthe validity, legality or enforceability of any of the terms or provisions of this Agreement in anyother jurisdiction.     **12.9****Relationship of the Parties****.**The relationship of Alcon and Synergeticsestablished by this Agreement is that of independent contractors, and nothing contained hereinshall be construed to (i) give either party any right or authority to create or assume anyobligation of any kind on behalf of the other or (ii) constitute the parties as partners, jointventurers, co-owners or otherwise as participants in a joint or common undertaking.     **12.10****Entire Agreement****.**It is the desire and intent of the Parties toprovide certainty as to their future rights and remedies against each other by defining the extentof their undertakings herein. This Agreement and the Confidential Settlement and License Agreementconstitute and set forth the entire agreement and understanding between the Parties with respect tothe subject matter hereof and are intended to define the full extent of the legally enforceableundertakings of the parties hereto, and no promise, agreement or representation, written or oral,which is not set forth explicitly in this Agreement and the Confidential Settlement and LicenseAgreement is intended by either party to be legally binding. Each party acknowledges that indeciding to enter into this Agreement and the Confidential Settlement and License Agreement and toconsummate the transactions contemplated hereby it has not relied upon any statements, promises orrepresentations, written or oral, express or implied, other than those explicitly set forth in thisAgreement and the Confidential Settlement and License Agreement. This Agreement and theConfidential Settlement and License Agreement supersede all previous understandings, agreements andrepresentations between the parties, written or oral, with respect to the subject matter hereof.     **12.11****Counterparts****.**This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original, but all of which together shall constituteone and the same instrument.     **12.12****Expenses.** Each party shall pay all of its own fees and expenses(including all legal, accounting and other advisory fees) incurred in connection with thenegotiation and execution of this Agreement and the arrangements contemplated hereby.     **12.13****Modifications and Amendments****.**This Agreement shall not be modified orotherwise amended except pursuant to an instrument in writing executed and delivered by each of theparties hereto.
25

 
     **12.14****Construction****.**The Parties have participated jointly in thenegotiation and drafting of this Agreement. In the event an ambiguity or question of intent orinterpretation arises, this Agreement shall be construed as if drafted jointly by the Parties andno presumption or burden of proof shall arise favoring or disfavoring any party by virtue of theauthorship of any of the provisions of this Agreement.     **12.15****Governing Law****.**This Agreement shall be governed by, and construed inaccordance with, the laws of the State of Delaware, without giving effect to the choice of lawprovisions thereof.     **12.16****Incorporation of Exhibits and Schedules.** The Exhibits and Schedulesidentified in this Agreement are incorporated herein by reference and made a part hereof.     **12.17****Compliance with Laws****.**Each Party agrees to comply with all laws andregulations applicable to the performance of its obligations hereunder and/or applicable to itsmarketing and sale of the Products.     IN WITNESS WHEREOF, the parties hereto intending to be bound legally hereby have each causedthis Agreement to be duly executed as of the date first above written.     **SYNERGETICS USA, INC.**       By /s/ Robert H. Dick         Robert H. Dick    Chairman of the Board       **ALCON RESEARCH, LTD.**       By /s/ Elaine E. Whitbeck Senior Vice President, Chief Legal Officer    General Counsel and Corporate Secretary    Elaine E. Whitbeck  
26

 
**SCHEDULE A****PRODUCTS****[Redacted**]** ** This information has been omitted pursuant to a request for confidential treatment and hasbeen filed separately with the Securities and Exchange Commission.
27

 
**SCHEDULE B****Patents****[Redacted**]** ** This information has been omitted pursuant to a request for confidential treatment and hasbeen filed separately with the Securities and Exchange Commission.
28

 
**SCHEDULE C****PRODUCT SPECIFICATIONS****[Redacted**]** ** This information has been omitted pursuant to a request for confidential treatment and hasbeen filed separately with the Securities and Exchange Commission.
29

 
**SCHEDULE D****NON-BINDING FORECAST****[Redacted**]** ** This information has been omitted pursuant to a request for confidential treatment and hasbeen filed separately with the Securities and Exchange Commission.
30

 
**SCHEDULE E**