Document:

ORIGINAL
EQUIPMENT MANUFACTURER
AGREEMENT

     

    This
Original Equipment Manufacturer Agreement (the "Agreement") is entered into as
of the 25TH day
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:

     

    1.0 DEFINITIONS.

     

     1.1  An "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 PURCHASE AND 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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      4.0 CAPITAL. 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.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    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.

    
      
         

      

      
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    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.

    
      
         

      

      
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     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.

     

    8.0
CONFIDENTIALITY.

     

     8.1 The 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.

     

    9.0
INDEMNIFICATION.

     

     9.1 Arthrex 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.

     

     9.4 Each 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.

     

    10.0
NON-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 BINDING
EFFECT/ASSIGNMENT.

     

    11.1 This 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.

    
      
         

      

      
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    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.

     

    12.0
MISCELLANEOUS.

     

    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.

    
      
         

      

      
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    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.

    
      
         

      

      
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    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 date fast it ten above.

    

    
      
        
          
            
              	
                      BOVIE DIC ..
      CORPORATION

                    
	 
      	 
      
	
                      By:

                    	
                       
      

                    
	 	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
DeterminedUnassociated Document

    

    
      	
              Corporation

            	
              DISTRIBUTION
      AGREEMENT

            

    

     

    Article
I.

    This
Distribution Agreement ("Agreement") is made as of October 6, 2006 ("Effective
Date") by and between Boston Scientific Corporation, One Boston Scientific
Place, Natick, MA 01760 ("Buyer"), and Bovie Medical Corporation, 7100 30th
Avenue-North, St. Petersburg, FL  33710 ("Seller") for the purpose of
purchase, sale and delivery of Products (as defined in Section 1.1) in
accordance with this Agreement.  Buyer and Seller are herein referred
to collectively as “Parties” and individually as a “Party.”

     

    MAILING
ADDRESSES AND FAX NUMBERS FOR NOTICES, ETC. UNDER AGREEMENT

    

    
      
        
          
            	
                    Seller:

                    Bovie
      Medical Corporation

                    7100
      30th
      Avenue North

                    St.
      Petersburg, FL 33710

                    Attn:  Moshe
      Citronowicz, COO

                    Fax:  (727)
      344-3876

                  	
                    with copy to:

                    Bovie
      Medical Corporation

                    7100
      30th
      Avenue North

                    St.
      Petersburg, FL 33710

                    Attn:
      General Counsel

                    Fax:  (727)
      344-3876

                  
	 	 
	
                    Buyer:

                    Boston
      Scientific Corporation

                    One
      Boston Scientific Way

                    Marlborough,
      Massachusetts 01752-1242

                    Attn:  President,
      Oncology

                    Fax:  (508)
      683-5693

                     

                  	
                    with copy to:

                    Boston
      Scientific Corporation

                    One
      Boston Scientific Place

                    Natick,
      Massachusetts  01760-1537

                    Attn:  General
      Counsel

                    Fax:  (508)
      650-8956

                  

          

        

      

    

    NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto hereby agree as follows:

     

    1.           Purchase and
Sale.

     

    1.1           Products.  For
purposes of this Agreement, “Product” shall mean the
medical resection device having a sintered tip, manufactured by Seller, as more
particularly described in the Specifications (defined below) attached hereto as
Exhibit A.  Additional products, together with specifications and
pricing therefor, may be added to this Agreement by mutual agreement of the
Parties in accordance herewith.

     

    1.2           Exclusivity. Seller
will manufacture, offer and sell on an exclusive, worldwide basis Products to
and for Buyer during the term of this Agreement.  Seller shall not
offer or sell to any third party or for itself or its Affiliates or have made,
offered or sold on its behalf the Products.  Buyer shall purchase the
minimum quantity of Products, as described in Sections 1.3(b) and 1.3(f),
below.   For purposes of this Agreement, "Affiliate" means, as to
either Party, any other person or entity that, directly or indirectly, controls,
is under common control with, or is controlled by, that Party. For purposes of
this definition, "control" (including, with its correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
person or entity, shall mean direct or indirect ownership of more than 50% of
the stock or (partnership) shares of such person or entity.

     

    1.3           Ordering.

    

    (a)           Buyer
shall place all orders with Seller for Products under this Agreement on Buyer’s
form of purchase order. A copy of Buyer’s current purchase order form is
attached hereto as Exhibit B and is made a part hereof.  All Buyer
purchase orders shall set forth the Specifications (including relevant revision
level), quantities, and delivery schedule, and shall state such additional terms
and conditions as Buyer may deem appropriate.  If a Buyer purchase
order conflicts with this Agreement as to Specifications, terms or conditions,
the Specifications, terms and conditions of this Agreement shall
control.  No other terms or conditions (including those on Buyer’s
purchase order) and no modification, alteration or amendment of this Agreement
shall be binding on the Seller unless accepted in writing, in advance, by an
authorized officer of Seller.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (b)           Buyer
will deliver to Seller an initial binding purchase order for two hundred (200)
units for the first three (3) calendar months of Product (the “Initial Purchase
Order”).  Buyer shall deliver such Initial Purchase Order to
Seller with a mutually agreed lead-time prior to the first Product delivery date
set forth on that Initial Purchase Order.  The first calendar month of
the Initial Purchase Order will be deemed to be the month in which the Initial
Purchase Order is placed.  From time to time, Buyer may also place
additional purchase orders for Product.  “Contract Year” means the
one-year period beginning on the Product Launch Date and ending on the 12-month
anniversary thereof, and each successive one-year period thereafter, during the
term of this Agreement.  Notwithstanding anything herein to the
contrary, Buyer shall purchase a minimum
of  **       ** units of Product
during the
first   **       **  Contract
Years of the term of this Agreement as follows: during the first Contract Year,
a minimum
of   **       **  units
in order quantities of at least 200 (as the Initial Purchase
Order),  **       **  respectively;
and during the second Contract Year, a minimum of the difference
between   **       **  and
the actual number of units purchased
by   **       **   **       **  units.  The
quantity of Product ordered by Buyer prior to the Product Launch Date (if any),
subject to the minimum per-order quantities set forth above, shall accrue to
the   **       **  unit
minimum purchase requirement for
the   **       ** Contract
Years.  “Product
Launch Date” means the date the Seller ships to Buyer Product for
commercial resale (subject to all required regulatory approvals), but no later
than ninety (90) days after mutual execution of the design transfer document
required under applicable law; provided, however, that Seller
timely ships Product to Buyer in accordance with the Initial Purchase
Order.

    

    (c)           Within
five (5) Business Days after receipt of a purchase order from Buyer, Seller
shall acknowledge receipt and confirm whether the order can be supplied within
the delivery dates set forth therein.  Unless Seller advises Buyer to
the contrary, in writing and within five (5) Business Days of the date Seller
receives Buyer’s sent purchase order, Seller shall be conclusively presumed to
have accepted the Specifications, quantities, due dates, and other terms of such
purchase order. For purposes of this Agreement a “Business Day” means any day,
other than Saturday, Sunday, or a legal holiday in Massachusetts or
Florida.

    

    (d)           Due
dates on the purchase orders are the dates that the Products must be received at
Buyer’s facility indicated on that purchase order. Orders arriving up to three
(3) Business Days early or three (3) Business Days late will be considered on
time.  As soon as it becomes apparent to Seller that it cannot meet a
due date on a purchase order, Seller shall notify Buyer in writing of the
expected delivery delay.

    

    (e)           Seller
shall invoice Buyer and Buyer shall pay all shipping, insurance and related
charges.  Seller shall pay premium freight charges in excess of normal
shipping charges to ensure timely deliver of Products ordered pursuant to a
purchase order if Seller is responsible for a delay in shipment unexcused by
Force Majeure (as set forth in Section 7.3).

    

    (f)           In
the first two (2) Contract Years, Buyer shall purchase at least the minimum
quantity of Product as set forth in Section 1.3(b), above, at the unit transfer
price set forth in Exhibit E (Transfer Pricing) for that
period.  Thereafter, during each of the next three (3) Contract Years
during the term of this Agreement, if Buyer orders any Product, Buyer shall
issue a binding purchase order for a minimum
of   **       **  units
of Product, with a minimum per-shipment quantity of not less
than   **       **  units,
for delivery during the subsequent 12-month period.

    

    “Pricing Period” means the six
(6) month period beginning on the commencement date of the first Contract Year,
and each successive six (6) month period thereafter during the term of this
Agreement.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    As set
forth in Exhibit E, for Products purchased during Contract Years one (1) and two
(2), the price per unit of Product purchased during such twenty-four (24) month
period shall be   **       **
for the first  **       ** units
purchased, and
(b)  **       **  for all
Product above the
first   **       **  purchased
(whether purchased in Contract
Year  **       **).

    

    The
initial pricing set forth in Exhibit E is based on the Specifications Revision
“A-1,” as set forth in Exhibit A.  Seller reserves the right to amend
the pricing in Exhibit E for the Product in accordance with changes to the
Specifications requested by Buyer; provided, that (i) Seller will provide Buyer
advance notice of any such price change, (ii) Seller will implement such changes
to the Specifications and amend such pricing, only upon Seller’s receipt of the
Buyer’s Oncology division’s president’s written approval thereof.

    

    During
each of Contract Years three (3) through five (5), for each Pricing Period,
Buyer will initially pay the Product transfer price (set forth in Exhibit E)
that corresponds to the forecasted quantity of Products to be ordered for that
Pricing Period as set forth in the twelve (12)-month rolling forecast delivered
by Buyer in accordance with Section 1.6 of the Agreement on the last day of the
second month immediately preceding the commencement of such Pricing
Period.  Within thirty (30) days following the end of each of Pricing
Period during Contract Years three (3) through five (5), the Parties will
compare the total amount actually paid for Products by Buyer during that Pricing
Period with the total amount which should have been paid based upon the actual
purchases of Products in such Pricing Period using the applicable Product prices
set forth in Exhibit E, as amended.  Any difference will be paid to
the appropriate Party within forty-five (45) days following the end of the
applicable Pricing Period.

    

    (g)           Buyer
shall timely place and Seller shall timely fulfill binding purchase orders as
required under this Agreement.  However, if (i) Seller is unable to
fulfill such binding purchase orders, (ii) Product is recalled as permitted
under Section 3.11 (Product Recalls), or (iii) Buyer rejects or returns all or
any part of a shipment of Product as permitted under Section 3.4 (Product
Acceptance) or 3.12 (Product Returns), as applicable, Seller shall suspend
Buyer’s minimum purchase obligations set forth in this Section 1.3 until fifteen
(15) business days after either (x) Seller is able to fulfill such binding
purchase orders, or (y) Seller satisfies its applicable obligations under
Section 3.4, 3.11, or 3.12.

    

    1.4           Shipping; Freight
Terms.  Subject to the terms set forth in Section 1.3, above,
Seller shall deliver Products that meet the Specifications in accordance with
the quantities, timing and shipping destination specified in Buyer’s purchase
orders utilizing Buyer’s appointed carriers and Buyer’s contracted
rates.  Seller shall deliver all Products to Buyer free and clear of
all liens and encumbrances or other defects in title.  All Products
shall be shipped F.O.B. St. Petersburg, FL.

    

    1.5           Inventory;
Scheduling.

     

    (a)    Except
as expressly set forth herein, during the term of this Agreement, Buyer shall
purchase its Product requirements exclusively from Seller (including Products
required for engineering, testing, and clinical trials, if any) and from no
other manufacturer, person or entity, including, without limitation, any
division or Affiliate of Buyer.

    

    (b)    Buyer
shall provide Seller with firm purchase orders for Products in accordance with
the procedures and requirements set forth in Section 1.3; provided, however, that Buyer
shall have the right, exercisable only one (1) time per any three (3) month
period, up to five (5) Business Days prior to the date of shipment, and with the
prior written consent of Seller, which shall not be unreasonably withheld, to
issue binding, written change orders to delay up
to   **       **  of
the quantity of Products on such purchase orders by no more than sixty (60)
calendar days from their originally scheduled shipment date. Buyer agrees to
accept partial shipments of Products from Seller should it, for any commercially
reasonable reason, become necessary to ship in advance of Seller’s ability to
complete each order. Seller shall make all commercially reasonable efforts to
comply with any revisions to a purchase order consistent with the provisions of
this Agreement.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (c)           Seller
shall maintain its production capacity with respect to finished products and raw
materials
at   **       **  Percent   **       **
of all undelivered Product quantities on open purchase orders for the
then-current month. Seller will immediately notify Buyer in the event of any
material obsolescence, supply shortage, or other interruption or potential
interruption, in supply of any Products, or component or sub-assembly thereof,
as soon as Seller becomes aware of such.

     

    (d)           Within
the mutually agreed lead-time for the Initial Purchase Order set forth in
Section 1.3(b), above, Seller shall accumulate a finished goods inventory of
Products to be held in reserve equal to the average monthly quantity, based on
the Initial Purchase Order.  Thereafter, for each subsequent month,
Seller will hold in inventory an amount of finished Products equal to the
average monthly quantity of the then-current Binding Forecast (defined
below).  All Products held in inventory pursuant to this Section shall
be referred to herein as “Shelf
Inventory.”  Seller may only deplete Shelf Inventory when
Buyer’s orders exceed the applicable Binding Forecast.  Seller will at
all times throughout the term of this Agreement maintain the agreed upon Shelf
Inventory level, except that Seller will replace any units taken from Shelf
Inventory in accordance with previous sentence within thirty (30) days of the
date Seller takes such units from Shelf Inventory.

     

    1.6           Estimates of
Requirements.

    

    (a)           
At the same time Buyer issues its Initial Purchase Order, and by the last day of
each calendar month thereafter, Buyer shall deliver to Seller a written,
twelve-month rolling forecast of Buyer's requirements for
Products.  The first three (3) months of each such twelve-month
rolling forecast shall be binding upon Buyer (the “Binding Forecast”) and the
remaining nine (9) months of each such forecast will be non-binding and subject
to adjustment. Seller shall, no later than twenty-five (25) days after receipt
of each twelve-month rolling forecast delivered pursuant to this Section, notify
Buyer of any prospective problems of which Seller is aware that might prevent
Seller from meeting Buyer’s
forecasted requirements or estimated delivery dates.  In the event
Seller so notifies Buyer of any issues in meeting quantities, Seller shall state
in writing the quantity of Products it estimates it can deliver and Buyer shall
only be required to purchase such revised quantity.

    

    (b)           In
addition to the forecasts delivered pursuant to Section 1.6(a), above, Buyer
will create a non-binding twelve-month forecast for Products, the first month of
which will be the month this Agreement is signed and delivered and which will be
attached hereto as Exhibit C.  For the avoidance of doubt, Exhibit C
is being delivered for planning purposes only and no portion of Exhibit C will
be binding on either Party hereto.

    

    (c)          
Seller and Buyer 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 Buyer hereunder. Seller shall use commercially reasonable
efforts to supply Buyer with all of its Product requirements, including, but not
limited to, the use of commercially reasonable efforts to accommodate "Rush"
orders from Buyer; provided, however, Seller shall
not be in breach of this Agreement for any failure or delay to supply quantities
of Products which exceed the Binding Forecast for the then-current month by more
than   **       **  percent   **       **.

    

    1.7           
Materials Requirements
Process.

    

    (a)           Seller
will deliver to Buyer a list of all components with lead times greater than
twelve   **       **  weeks
(“Long Lead Time
Components”) upon the Parties’ mutual finalizations of and approvals for,
the Product requirements, Specifications, design, and bill of materials, which
list shall be set forth as Exhibit D and attached hereto.  Seller
shall use its best efforts to reduce and minimize the number of Long Lead Time
Components.  Seller shall use reasonable efforts to update the list of
Long Lead Time Components every quarter and to present an updated list of Long
Lead Time Components to Buyer.  Each revised list of Long Lead Time
Components shall be deemed an amendment to Exhibit D.  In the event
that Seller fails to present an updated list of Long Lead Time Components, (i)
the Parties shall continue to rely on the preceding list (as updated in writing
by the Parties) and (ii) Buyer will accept responsibility for Long Lead Time
Components ordered outside the lead times set forth in the list provided that
Seller can demonstrate to Buyer’s reasonable satisfaction that such components
were ordered in accordance with the then-current vendor lead times. (Buyer
acknowledges that lead times constantly change and the Seller might not always
be able to present Buyer with a current list of Long Lead Time
Components.)

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    (b)           Buyer
shall be financially liable for all Long Lead Time Components when ordered in
accordance with this Section 1.7 if Buyer terminates this Agreement without
cause or Seller terminates this Agreement pursuant to Section 7.1(a) or
(d).  Seller shall otherwise be financially liable for all Long Lead
Time Components. Specifically, Buyer’s  component  liability
for Long Lead Time Components shall be equal to Seller’s delivered cost
(delivered cost is the cost paid by Seller for the components, net of all
credits and discounts, plus a materials margin equal
to   **       **  of
all components ordered in support of any Binding Forecast.  At Buyer’s
request, Seller shall use commercially reasonable efforts to minimize Buyer’s
component liability by attempting to return components to the vendor; provided, however,
that  Seller shall not be obligated to attempt to return to a vendor
components that are, in the aggregate, worth less
than  **       **
Dollars   **       **.

     

    2.           Pricing; Payment; Continuous
Improvement.

     

    2.1           Pricing;
Escalation.  Prices for the Products are set forth in Exhibit E
attached hereto, and include packaging (as set forth in the then-applicable
Specifications) and taxes.  Subject to the provisions of Section
1.3(f), such prices shall be fixed for the
initial   **       **  Contract
Year period of this Agreement.  Thereafter, Seller may adjust prices
for each successive Contract Year period of this Agreement, according to the
annual Producer Price Index for Finished Goods (“PPIFG”) or its replacement if
so identified by the publisher, published by the United States Department of
Labor, Bureau of Labor Statistics (“BLS”); provided, that such
increases or decreases will be capped
at   **       **
Percent   **       ** of the
previous Contract Year’s Product transfer price.  Such PPIFG shall not
be seasonally adjusted. The frequency for periodic adjustments hereunder shall
be annual, using the first publication of the annual value in the month
following the anniversary month of each successive Contract Year period of this
Agreement.  The adjustments shall be calculated using the “simple
percentage method” as set forth by the BLS.  Such PPIFG-based price
changes shall be in addition to price changes (if any) permitted under Section
1.3(f).

     

               2.2           Payment.  Payment
will be due forty five (45) days from Buyer’s receipt of Seller’s invoice,
except to the extent Buyer in good faith disputes each
invoice.  Seller shall invoice Buyer at the time of shipment of the
applicable Product and as otherwise provided for hereunder.

     

    2.3           Continuous
Improvement; Seller Performance Business Reviews.  During the
term of this Agreement, Seller shall use commercially reasonable efforts
(including reasonable engineering support) to improve and enhance Product
design, quality, performance and manufacturing
processes  (collectively, “Improvements”)
so as to maintain or increase the competitive advantage of the Products as
compared to similar products in the marketplace.  Improvements may
result from Seller’s own initiative (“Bovie
Improvements”) or the request or suggestion of Buyer (“BSC
Improvements”) but, if a proposed BSC Improvement or Bovie Improvement
changes the Specifications or requirements of a purchase order the proposed
Improvement must be approved in writing by Buyer prior to implementation as
described in Section 3.1 hereof.  Buyer shall pay Seller for waste or
remanufacturing of raw materials, work-in-progress, intermediate sub-assemblies
and finished goods inventory, which are rendered unusable by said BSC
Improvements or any other changes approved by Buyer (collectively, “Waste
Reimbursement”); provided, however, Buyer shall not be responsible for
Waste Reimbursements for Bovie Improvements.  BSC Improvements
approved in accordance with this Section 2.3 and Section 3.1 hereof shall be
promptly incorporated into the Specifications and Products in accordance
herewith.  In order to establish an effective system to identify and
achieve productivity and quality objectives, BSC Improvements and Bovie
Improvements, Seller shall submit a productivity report to key administrators
designated by Buyer on a mutually agreeable basis.  Seller’s and
Buyer’s representatives will meet as reasonably requested by Buyer for the
specific purpose of driving mutual productivity and quality
objectives.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    2.4           Tooling and Capital
Equipment.  In addition to the price for each Product set forth
on Exhibit
E,  **       **  shall   **       **  Seller
the actual cost, net of all third party credits and discounts, plus a fifteen
percent (15%) management fee (“Management Fee”), of tooling, machining, molding,
and other capital expenditures necessary or appropriate for the manufacturing of
Product and that are purchased solely for use in connection with manufacturing
Product (collectively, “Manufacturing
Equipment”).  Buyer will not be responsible for paying for any
Manufacturing Equipment unless Buyer approves the purchase of such Manufacturing
Equipment in writing in advance of purchase.    Payment for
Manufacturing Equipment will be due in accordance with Section 2.2. Seller will
use Manufacturing Equipment solely in connection with the manufacturing of
Products for Buyer.  Buyer will at all times have title to and own all
Manufacturing Equipment.  Seller shall not take any action that would
cause a lien or other encumbrance to be placed on any Manufacturing Equipment.
At all times while the Manufacturing Equipment is in Seller’s custody and
control, Seller will maintain adequate levels of loss insurance to cover loss or
damage to the Manufacturing Equipment.

     

    2.5           Payment of Start-up
Fee.  Upon the execution of this Agreement, Buyer shall pay
Seller
a   **       **  start-up
fee of   **       **
Dollars   **       **  (“Start-up Fee”), which is in
addition to any other payments from Buyer due hereunder.

     

     3.           Quality
Assurance; Recordkeeping; Notification.  The
following obligations of Seller set forth in Sections 3.1 through 3.10 shall be
collectively referred to throughout this Agreement as the "QA
Standards".

     

    3.1           Changes.  Seller
shall not make any changes to its documentation, shipping, manufacturing process
(including vendors) or manufacturing location, pertaining to any Product, to any
Product (including materials, packaging, labeling and Directions for Use) or to
the Specifications unless approved by Buyer in writing in advance. All such
changes shall be submitted to Buyer no later than sixty (60) days prior to
Seller’s proposed date of implementation for such change.  If a
proposed change is approved by Buyer in writing in its sole discretion, Seller
shall be responsible for properly communicating and implementing such change,
including with respect to any of Seller’s vendors.  Seller shall
notify Buyer in writing and must receive approval by Buyer prior to any (a) use
of any nonconforming material in the manufacture of any Product, (b)
implementation of any Seller-authorized temporary deviation that could
affect the production, interconnectivity, sterility, or handling of any Product,
or (c) implementation of any Seller-initiated corrective action that could
affect the safety or efficacy of any Product.  Without limiting any
other of Seller’s obligations hereunder, Seller will assume full responsibility
and costs for any product development activities necessary to remedy any
non-conformance in Products (with respect to quantity, Specifications,
requirements and delivery dates), including costs to implement such changes on
all units in the field and in inventory.    Notwithstanding
anything in this Agreement to the contrary, Buyer shall pay Seller for Waste
Reimbursements, as set forth in Section 2.3 above.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    3.2           Seller’s
Vendors.  At Buyer’s request, Buyer will perform a quality
system assessment of the vendors who provide Seller with raw
components/materials, sub-assemblies or contract services for
Products.   All such vendors who provide Seller with such
materials and services as of the Effective Date are set forth on Exhibit F
attached hereto, which Exhibit F will be amended from time to time as Seller’s
vendors change.  Buyer shall confirm in writing to Seller no later
than thirty (30) days after the Effective Date (and no later than thirty (30)
days after the date of any amendment to Exhibit F) the vendors listed on Exhibit
F with which Buyer’s Oncology Business (defined below) has a pre-existing
relationship (collectively, “Buyer’s
Vendors”).  Seller agrees to assist Buyer in arranging visits
and inspection of the plants at which Seller’s vendors manufacture any
component/material, sub-assembly or service for any Product.  Seller
shall not change the outsourcing of any sub-component of any Product unless
approved in writing in advance by Buyer in accordance with Section 3.1
hereof.  In addition, Seller shall obtain Buyer’s prior written
approval, which Buyer shall not unreasonably withhold, with respect to each
supplier, including a new supplier or a change to an existing supplier, of any
material, component, sub-assembly or service relating to any Product as
described in Section 3.1 hereof.  For avoidance of doubt, Seller shall
not incorporate into any Product any material, component or sub-assembly
purchased from a third-party supplier, or permit any third party to perform
services relating to a Product, unless approved in writing in advance by Buyer
in accordance with Section 3.1 hereof.  Buyer agrees, on behalf of its
Oncology Business, not to contract directly with any vendors listed on Exhibit
F, as amended, who supply Seller with Product components, for components of the
Product for sale by Buyer’s Oncology Business during, and for a period of two
(2) years after any termination or expiration of, this Agreement for any reason
except as set forth in the next sentence; provided that this
restriction in no way applies to or otherwise limits Buyer’s right to contract
directly with (a) Mott Corporation (“Mott”), (b) Buyer’s Vendors,
or (c) any vendor that Buyer introduces to Seller, and further, except as
permitted in subclauses (a), (b) and (c) of this sentence, Buyer’s Oncology
Business will not accept via intra-company transfer or otherwise such Product
components purchased by Buyer or its Affiliates from Seller’s vendors listed on
Exhibit F, as amended.  Notwithstanding the foregoing, such
restriction on Buyer’s Oncology Business’ contracting with Seller’s vendors as
set forth in the preceding sentence shall not apply in the event Seller breaches
this Agreement and Buyer terminates therefor pursuant to Sections 7.1(a),
7.1(b)(i), or 7.4, hereof.  Seller agrees that, at such time as the
Parties mutually execute the design transfer document referenced in Section
1.3(b), Seller will enter into, and during the balance of the term of this
Agreement, will maintain, a written supplier agreement with Mott for the supply
of the sintered tip incorporated into the Product, and a written understanding
with Mott whereby Buyer would be able to visit and inspect Mott upon reasonable
notice; provided, that Seller
agrees that it will not at any time during and for a period of five (5) years
after any termination or expiration of this Agreement for any reason enter into
an exclusive supply arrangement or any other agreement or arrangement with Mott
that would limit Mott’s ability to sell or otherwise provide any components or
products to Buyer or its Affiliates.  As used herein, “Buyer’s
Oncology Business” means that part of Buyer’s business primarily responsible for
Buyer’s oncological business.

     

    3.3           Product
Conformity.  Seller will manufacture Products in accordance
with the then-current (a) Specifications, (b) applicable regulations relating to
the current Good Manufacturing Practices (as defined by the Food, Drug and
Cosmetic Act, as amended) and similar protocols (“cGMP”), (c) the United States
Food and Drug Administration (“FDA”) quality system
regulations (“QSR”),
including master device and lot history records, ISO 13485 requirements,
ISO14971 requirements, MDD requirements and CMDCAS requirements, and (d) other
pertinent rules and regulations of FDA and similar regulatory bodies in other
applicable jurisdictions set forth in the Specifications, as
amended.  In the event that Seller is required or deems it desirable
to obtain ISO Quality System Certification, Seller shall promptly notify Buyer
in writing of Seller’s selection (or change in registrar) for obtaining ISO
Quality System Certification. Seller shall maintain a current Declaration of
Conformity status with EU Notified Bodies per MDD requirements when Buyer is
distributing in European markets.  During the term of this Agreement,
Seller will maintain or cause to be maintained the Product manufacturing
facility’s registration as a certified medical device manufacturing facility and
will maintain such facility registration with all applicable regulatory bodies
or cause such facility to be maintained such that the facility would pass an
audit for compliance with cGMP and QSR.  Seller shall maintain ongoing
quality assurance and testing policies sufficient to satisfy its obligations
under this Agreement, and Seller's standard quality assurance
policies.  Any non-conformance in Product, material or process which
Seller wishes to use “as is” or rework will require prior written approval from
Buyer.    Seller will assume full responsibility and its
costs for any product development activities necessary to remedy any
non-conformance in Products arising exclusively from defects in Product design,
manufacture or materials, or from deviation from quality standards (but not in any way from
Product claims, which are the sole
responsibility of Buyer), which non-conformance is not approved by Buyer
in accordance with the requirements of the preceding sentence. Seller shall be
responsible for obtaining and maintaining any required regulatory filings and
registrations set forth in the Specifications, as amended, including ISO
registration (“CE Mark”)
and 510(k) filings with the FDA (collectively, the “Regulatory Filings”) for the
Products under Seller’s notified body or through other applicable Regulatory
Authorities (defined below and set forth in the Specifications, as amended);
provided, that
Buyer will have the right to review any Regulatory Filings and provide comments
on such filings (which Seller will consider in good faith) before they are
submitted by Seller; and further, provided, that Buyer
will at all times upon notice to Seller have the right to make any Regulatory
Filings with Regulatory Authorities outside of the United States in Buyer’s name
and Seller will provide Buyer with access to all documents necessary or
appropriate for Buyer to make such Regulatory Filings and with authorization to
use such documents and the information contained therein to make Regulatory
Filings as the distributor of Products. Upon termination or expiration of this
Agreement, Buyer may purchase from Seller physical and legal ownership of all
Regulatory Filings for the Product, including all documents and communications
to and from the pertinent Regulatory Authorities. Products will bear Seller’s
regulatory registration mark(s), including Seller’s CE
Mark.   As used in this Agreement, “Regulatory Authority” means
any national supra-national, foreign, regional, state or local regulatory
agency, department, bureau, notified body, commission, council or other
governmental entity, including FDA, as set forth in the Specifications, as
amended.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    3.4           Product
Acceptance.  Each shipment of Product from Seller to Buyer
shall be inspected by Seller prior to shipment and shall contain such quality
control certificates reasonably requested by Buyer certifying, among other
things, that the Products are in conformity with Specifications.  All
Products are subject to final inspection and acceptance at Buyer within thirty
(30) Business Days of delivery.  Buyer shall notify Seller within
thirty (30) Business Days of delivery of any apparent defective material or
workmanship or non-conformity of any Product to the Specifications or applicable
purchase order.  If Buyer fails to notify Seller within thirty
(30)  Business Days of delivery of an apparent defect, Buyer will be
deemed to have accepted the Product; provided, that the
warranty contained in Section 8 hereof shall survive such
acceptance.  Without prejudice to any other right or remedy of Buyer,
in case any Product is defective in material or workmanship or otherwise not in
conformity with the Specifications or the requirements of Buyer’s purchase
order, Buyer will have the right to reject it; provided, however, that Buyer
shall notify Seller of any rejection hereunder, and the basis for it, in
writing, within the thirty (30) Business Day timeframe set forth
above.  Any Product that has been rejected must be replaced by and at
the expense of Seller promptly after notice.  Buyer will return all
rejected Products to Seller at Seller’s expense. Seller
shall investigate the cause for the rejection and provide to Buyer in writing
all proposed corrective actions associated with the cause for
rejection.  From time to time during the term of this Agreement, Buyer
may also request final inspection testing results from Seller, in addition to
the quality control certificates, as evidence that the supplied Product meets
Specifications.  Seller will timely and fully respond to all such
requests.

     

    3.5           Complaints and Corrective
Action.

     

    (a)           As
used in this Section:

     

    (1)           “Complaint” means any written,
electronic or oral communication, that alleges deficiencies related to the
identity, quality, durability, reliability, safety, effectiveness or performance
of a Product after it is released for distribution (marketed).

     

    (2)           “Complaint Investigation” means
a documented process for determining the root cause (or the most probable cause)
of a Complaint.

     

    (3)           “Medical Device Report” or
“MDR” means a report
filed with FDA to communicate an event when Seller or Buyer becomes aware (as
such phrase is defined in 21 CFR 803.3(c)) of information that reasonably
suggests that one of its marketed Products:

     

    
      	
               
      

            	
              (i)

            	
              May
      have caused or contributed to a death, Serious Injury or serious
      deterioration in the state of health of a user or patient;
    or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Has
      malfunctioned (see definition of Reportable Malfunction in 21
      CFR  803.3 (n)) and that the Product or a similar device
      marketed by the manufacturer or importer would be likely to cause or
      contribute to a death or Serious Injury of a user or patient if the
      malfunction were to recur.

            

    

     

    (4)           “Medical Device Vigilance
Report” or “MDV”
means the official notification provided to regulatory authorities outside of
the United States of adverse events deemed reportable pursuant to the local laws
and/or regulations.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (5)           “Serious Injury” means an
injury or illness that:

     

    
      	
               
      

            	
              (i)

            	
              Is
      life threatening (i.e. when continued use of the device is likely to have
      resulted in the death of a patient or when a patient was at substantial
      risk of dying at the time of the adverse event);
  or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Results
      in permanent impairment or damage to a body structure or body function, or
      necessitates medical or surgical intervention to preclude permanent
      impairment or permanent damage to a body structure or body
      function.

            

    

     

    (b)           Buyer
will be the initial contact for all Complaints from its
customers.  Buyer may require Seller to perform Complaint
Investigations related to the manufacturing, Seller’s design, or packaging of
Products in order to investigate the cause of any such Complaints and to
determine any required corrective actions.  In connection with every
Complaint Investigation, Seller will perform a lot history or device history
review of the affected Product.  If the Complaint is accompanied by or
followed by return of the subject Product to Buyer, Buyer will return to Seller
the Product that is the subject of the Complaint; provided, Buyer may
at its option perform an initial evaluation of the returned Product to determine
the root cause of failure.  Seller will maintain records of all such
Complaint Investigations as required by cGMP and other applicable rules and
regulations of any Regulatory Authority. No later than fifteen (15) business
days after Seller’s receipt of a written request from Buyer to perform a
Complaint Investigation including receipt of the allegedly defective Product
(unless such Product is unavailable), Seller will provide Buyer with an initial
report of such Complaint Investigation, and no later than thirty (30) days after
Seller’s receipt of a written request from Buyer to perform a Complaint
Investigation including receipt of the allegedly defective Product (unless such
Product is unavailable), Seller shall perform and provide to Buyer a written
report of such Complaint Investigation, including a complete investigation that
contains a root cause analysis and corrective action recommendations. In the
event of an MDR or MDV, Buyer may require Seller to expedite the Complaint
Investigation in order to comply with any applicable regulatory filing
requirements of any Regulatory Authority.

     

    (c)           Seller
will be responsible for filing all required Complaint reports (including MDRs
and/or MDVs) with the appropriate Regulatory Authorities.  In any
event, Buyer retains the right to file all required Complaint reports, including
MDR and MDV reports; provided, however, that Buyer
shall immediate notify Seller, in writing, of its intention to file such
reports.

     

    (d)           Seller
will maintain a cross-reference from Seller’s Complaint response to Buyer’s
associated Complaint file numbers.  Seller will complete all corrective
actions, including any corrective actions identified in a response to Buyer
pursuant to this Section 3.5 or any corrective actions reasonably requested by
Buyer, within a mutually agreed upon timeframe, and upon request of Buyer,
provide written evidence of such completion.

     

    3.6           Inspection;
Access.  Buyer shall have the right to have employees and other
representatives of Buyer (including external auditors and representatives of
Buyer’s notified body) present at any plant or production facility relating to
or used in connection with the manufacturing of Product during normal business
hours to conduct an initial and periodic inspections of such facilities and
manufacturing procedures for compliance with ISO, cGMP and QSR, and the
Specifications and to inspect Seller’s inventory of Products, work-in-process,
raw materials to be used for Products, production records, design history file,
quality manuals, regulatory dossiers and such other matters as may be pertinent
to proper quality assurance of Products to be delivered
hereunder.  Buyer agrees to give Seller a minimum of two (2) Business
Days’ prior notice of any such inspection
“for cause” and ten (10) Business Days’ prior notice for any other
inspection.  Seller shall immediately use its best efforts to take
such action as is required to correct any deficiencies identified by Buyer or
its representatives relating to the production of any Product.  Seller
is not currently a party to, and shall not enter into, any third-party
manufacturing agreement relating to any Product that does not grant to Buyer and
its representatives, as third-party beneficiaries, rights to inspect the plant
or plants at which Product components or materials are manufactured on the terms
set forth in this Section.  Seller further agrees to use its best
efforts to provide such documentation or conduct such analyses as Buyer or its
representatives may reasonably request in connection with any regulatory
submission or audit hereunder.  In accordance with applicable laws and
regulations governing regulatory inspections, Seller shall permit authorized
representatives of relevant regulatory authorities, including FDA, to inspect
any plant and production facilities relating to or used in connection with the
manufacture of any Product.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    3.7           Records.  For
the longer of seven (7) years after delivery to Buyer of each Product, or such
longer period as may be required by cGMP and other applicable rules and
regulations of any Regulatory Authority or by law, Seller shall:  (a)
maintain traceability records for each Product, including the manufacture date
and lot number of each unit of Product and each component and material
comprising the Product; (b) maintain records subject to 21 CFR 820 Subpart M
(such as the Device Master Record, quality system record and Complaint files);
and (c) provide Buyer a copy of such records without charge upon Buyer’s
request. Upon
termination or expiration of this Agreement, such records shall be placed in
escrow on terms mutually agreed to by the Parties.

     

    3.8           Required
Notification.  Each Party hereto shall immediately notify the
other Party by fax, with confirming notice by Overnight Delivery, as soon as a
Party becomes aware of any:  (a) defect or condition which renders or
may render any Product ineffective or dangerous; (b) Product that is not in
compliance with the Specifications (including manufacturing process, labeling or
packaging) or other QA Standards; (c) breach by either Party of the terms of
this Agreement; (d) regulatory, FDA or ISO inspections or other communications
with regulatory, FDA or ISO authorities related to a Product or that would in
any way impact the Product or either Party’s performance hereunder; or (e)
infringement by any party of intellectual property rights applicable to the
Product.  Without limiting the generality of the foregoing, each Party
will notify the other Party immediately if it becomes aware of any death or
bodily injury caused by a Product (or suspected to be caused by a Product) or
any malfunction of a Product.

     

    3.9           EEO
Laws.  Seller acknowledges that Buyer is an equal employment
opportunity/affirmative action employer subject to Executive Order 11246, the
Vietnam Era Veterans Readjustment Assistance Act, Section 503 of the Vocational
Rehabilitation Act, and their implementing regulations (collectively, "EEO Laws").  Seller
may be governed by these laws and implementing regulations which are
incorporated into this Agreement by reference.  By acceptance of this
Agreement, Seller certifies that it complies and will continue to comply with
all applicable EEO Laws, and it shall not discriminate on the basis of race,
age, color, religion, gender, sexual orientation, disability, veteran status,
national origin or any other characteristic protected by federal, state or local
law.

     

    3.10           Quality
Plan.        Seller and Buyer
shall establish a quality plan which will define the quality practices, the
resources and the activities relevant to Products that are designed and/or
manufactured for Buyer.  This plan will define how the quality
requirements will be met and will be approved in writing by both
Parties.

     

    3.11           Product
Recalls.

     

    (a)           If,
in the judgment of Seller or Buyer, any Product defect or any government action
requires a recall of, or the issuance of an advisory letter regarding, any
Product, either Party shall undertake such recall or issue such advisory letter
only after notification to and consultation with the other
Party.  Each Party shall notify the other Party
within   **       **  Business
Days of becoming aware (as such phrase is defined in 21 CFR 803)
of any issue that could lead to a field action related to the
Products.  The Parties shall endeavor to reach an agreement prior to
making any recall or issuing any advisory letter regarding the manner, text and
timing of any publicity to be given in such matters in time to comply with any
applicable legal or regulatory requirements, but such agreement will not be a
precondition to any action that either Party deems necessary to protect users of
Products or to comply with any applicable governmental orders or
mandates.  The Parties agree to provide reasonable assistance to one
another in the event of any recall or issuance of any advisory
letter.  Notwithstanding anything in this Agreement to the contrary,
Buyer shall have the right to manage any Product recall.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (b)           In
the event of a recall of Product, Seller shall correct any deficiency relating
to its manufacturing, packaging, testing, labeling, storing or handling of
Product, if applicable, or cause the vendor of any material, component, or
sub-assembly incorporated into Product to do likewise with respect to such
material, component, or sub-assembly, and shall, at Seller’s option, either (i)
at its cost replace each unit of Product recalled (including units held in
inventory by Buyer or its customers) with a corrected Product within a
reasonable period of time, or (ii) refund the Buyer’s purchase price
thereof.  Seller shall promptly pay or reimburse Buyer for its costs
and expenses (i.e., shipping, quality control testing, and notification)
incurred by Buyer as a result of any recall or advisory letter; provided, however, that if the
recall is related to requirements or Specifications (i.e., materials, design or
process changes, and Product claims) originating with Buyer, then Buyer will pay
the costs and expenses incurred for such recall.

     

    3.12           Product
Returns.  Seller shall accept returns of Product shipped by
Seller if:  (a) the request to return such Product is received
within   **       **  Business
Days of invoice date (or, if later, the date that shipment is received); (b) the
Product is returned in new condition, salable and in its original packaging, and
(c) the reason for the return is directly related to defective product
quality.  Nothing express or implied in this Section 3.12 shall be
deemed to modify or diminish the right of Buyer to reject Products in accordance
with the provisions of Section 3.4 or limit the warranty for Products set forth
in Section 8.

     

    3.13           Compliance with
Laws.  Seller will comply with all applicable laws and
regulations of the Regulatory Authorities set forth in the Specification, as
amended, pertaining to the testing, manufacture, labeling or packaging of
Products or pertaining to performance by Seller of its obligations under this
Agreement, including the maintenance of ongoing quality assurance and testing
procedures to comply with applicable regulatory requirements.  Without
limiting the generality of the foregoing, Seller will (a) report to every
applicable Regulatory Authority within any relevant time periods all events that
are required to be reported (including any death or serious bodily injury caused
by a Product); and (b) deliver, within the permitted time periods, all annual or
other periodic reports required to be delivered to every applicable Regulatory
Authority.  Seller represents and warrants that it is the legal
manufacturer of the Product.

     

    3.14           Product Specifications;
Packaging and Labeling.  All Products delivered by Seller
hereunder shall be in full compliance with the Specifications therefor and shall
be ready for end-user sale, including all packaging, labeling,
instructions-for-use and sterilization set forth therein, as
amended.  All Products shall be labeled (including bar coding/UPN
numbers) in accordance with the work instructions, procedures and label
text/graphics specified in writing from time to time by Buyer and mutually
approved by Buyer and Seller. Buyer shall give Seller at least thirty (30) days
advance written notice of any change to its labeling procedures prior to the
date when such changes are to take affect.  Notwithstanding anything
in this Agreement to the contrary, Buyer shall pay Seller for Waste
Reimbursements, as set forth in Section 2.3 above. All Products will be marked
to make it clear that they have been manufactured by Seller and are being
distributed by Buyer.  Buyer may include Product as a component in any
kit or collection of products.  Buyer maintains the right to
over-label Products as it deems necessary or appropriate in accordance with work
instructions, procedures, and label text/graphics, which are mutually approved
by both Parties hereto.  Seller is not responsible for any
over-labeling or any consequences thereof.    As used in
this Agreement, “Specifications” for the
Product means the specifications set forth on Exhibit A, as revised from time to
time pursuant to the next sentence, and as provided by Seller and approved by
Buyer, including the part number, revision level, controlled drawing, and
packaging and sterilization instructions for the Product and all requirements of
any applicable laws and regulations of the Regulatory Authorities, specified
therein.  The Parties understand that the Specifications may need to
be revised from time to time up to the Product Launch Date.  Each
version (each, a “Revision Level”) of the Specifications will be labeled with a
Revision Level number (“Revision Level Number”), starting with “A-1,” and
continuing sequentially with “A-2,” “A-3,” etc., and each revision of the
Specifications will be so labeled and attached to this
Agreement.  Each subsequent Revision Level will replace and supersede
all former Revision Levels for all purposes hereunder, except with respect to
Article 4 of this Agreement.  Attached to this Agreement as Exhibit A
as of the Effective Date is Revision Level “A-1.”

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    4.           Confidential Information;
Intellectual Property.

     

    4.1           Confidential
Information.

     

    (a)           "Confidential Information"
means all information disclosed by or on behalf of either Party hereto (a
“Disclosing Party”) to the other Party hereto (a “Receiving Party”), or any of
the Receiving Party’s employees, officers, directors, Affiliates,
subcontractors, agents, successors or assigns (collectively “Representatives” and together
with the Disclosing Party, the “Disclosing Group”), including
information  (i) relating to the matters that are the subject of this
Agreement, including the terms, existence and nature of this
Agreement,  (ii) all other information regarding the Disclosing
Party’s past, present or future research, technology, know-how, ideas, concepts,
designs, products, markets, customer information, computer programs, prototypes,
processes, machines, articles of manufacture, compositions of matter, business
plans and operations, technical information, drawings, specifications (including
Specifications), (iii) BSC Improvements or Bovie Improvements (as applicable),
and (iv) any knowledge or information developed by the Disclosing Party as a
result of work in connection with this Agreement that directly relates to the
Product, except information which is:  (i) at the time of disclosure,
or thereafter becomes lawfully part of the public domain through no act or
omission by the Receiving Party; (ii) lawfully in the possession of Receiving
Party prior to disclosure by or on behalf of Disclosing Party, as shown by
written records; (iii) lawfully disclosed to the Receiving Party by a third
party which did not acquire the same under an obligation of confidentiality from
or through the Disclosing Group; or (iv) independently developed by the
Receiving Party without use of Confidential Information, as shown by written
records.  If a Receiving Party believes in good faith that it is
required by law to disclose any Confidential Information, it shall provide
notice to the Disclosing Party, prior to making such disclosure so as to allow
Disclosing Party time to undertake legal or other action, to prevent such
disclosure or otherwise obtain confidential treatment of such
disclosure.

     

    (b)           A
Receiving Party shall not, without the prior consent of the Disclosing Party,
disclose any Confidential Information to anyone for any reason at any time or
use any Confidential Information for any purpose except as requested by the
Disclosing Party.  The Receiving Party shall limit dissemination of
Confidential Information to only those Receiving Party Representatives having a
"need to know."  A Receiving Party shall not, except as permitted
under this Agreement:  (i) appropriate or use a Disclosing Party’s
Confidential Information in Receiving Party’s own manufacture of Products for
itself or for any third party or for any other purpose; or (ii) by virtue of
either this Agreement or its supply or purchase of Products, as applicable,
obtain any title to, or any interest or license in, any Confidential Information
of a Disclosing Party.

     

    (c)           Neither
Party shall issue a press release or other public announcement concerning this
Agreement (or any term sheet, bids, negotiations or other related information),
the transactions contemplated herein, or the relationship between the Parties
without the prior written approval of an authorized representative of the other
Party, which approval shall not be unreasonably withheld or
delayed.

     

    (d)           Neither
Party shall:  (i) disclose to the other Party any confidential or
proprietary information belonging to any third party without the consent of such
party; or (ii) represent as being unrestricted any designs, plans, models,
samples, or other writings or products that the Disclosing Party knows or has
reason to know are covered by valid patent, copyright, trade secret, or other
form of intellectual property protection.

     

    4.2           Buyer’s
Property.      All tangible property
provided to Seller in connection with this Agreement, including: Product
requirements, drawings, standard operating protocols, quality testing and other
documentation, all samples, Buyer’s Confidential Information, all reports,
brochures, manuals, sales literature, all equipment and tooling, provided by
Buyer to test, manufacture or assemble the Products, and all Manufacturing
Equipment (collectively, “Buyer’s Property”) shall be
and remain the exclusive property of Buyer unless otherwise agreed in
writing.  Seller shall:  (a) keep and maintain in its
custody and subject to its control any Buyer’s Property that it receives or
develops during the term of this Agreement, for the sole benefit of Buyer; (b)
use Buyer’s Property solely in furtherance of fulfilling its obligations to
Buyer under this Agreement; and (c) return or surrender to Buyer all Buyer’s
Property within fifteen (15) days after termination or expiration of this
Agreement or otherwise upon written request by Buyer provided; however, such
return of Buyer’s Property does not interfere with Seller’s performance
hereunder.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    4.3           Intellectual
Property.

     

    (a)           Buyer
and Seller acknowledge and agree that (i) the performance of engineering
services; and (ii) the development of designs, concepts, inventions, prototypes
and the like, and intellectual property relating thereto, by Seller prior to the
Effective Date, either solely or in cooperation with others including Buyer,
which relate solely to any medical device having a sintered, conductive metal
tip, are within the scope of this Agreement and the results of such services and
development are the exclusive property of Buyer and included within the
definition of BSC Intellectual Property provided in Section
4.3(b).  Consideration for such services and development has been
accounted for in the price of the Products herein.

     

    (b)           Except
for Seller’s intellectual property related solely to electrosurgical generators
(e.g., RF energy generation, monitoring and control), (i) all intellectual
property, both domestic and foreign, including any and all tangible and
intangible trade secret rights, patents rights (including registrations,
applications, renewals, extensions, continuations, divisions, reexaminations and
reissues), processes, know-how, prototypes, Specifications, drawings, designs,
tools, industrial property rights, inventions, Improvements (excluding
manufacturing processes), developments or discoveries, conceived or made by
Buyer or Seller, whether patentable or not, related solely to any medical device
having a sintered, conductive metal tip, (ii) Buyer’s Confidential Information,
and (iii) Buyer’s Property (except Manufacturing Equipment) (collectively,
“BSC Intellectual
Property”), shall be the exclusive property of Buyer, and Seller shall
cooperate in assigning, and hereby does assign, all right, title, and interest
in and to such BSC Intellectual Property to Buyer.  All copyrightable
works developed by Seller, either alone or with others, related to BSC
Intellectual Property, are “works made for hire” and are hereby assigned to and
shall belong exclusively to Buyer, and any and all copyright rights to such
works, including the right to copy or reproduce the works, create further
derivative works, file for copyright registration, and renew such rights, are
hereby assigned to, and shall be the exclusive property of, Buyer.

     

    (c)   Seller
agrees to cooperate with Buyer in the preparation, prosecution, filing and
maintenance of the BSC Intellectual Property during the term of this Agreement
and thereafter, and Buyer agrees to pay Seller reasonable compensation for such
cooperation.

     

    (d)   To
the extent there is jointly invented and jointly owned intellectual property,
each Party hereto agrees to cooperate with the other Party with the preparation,
prosecution, filing and maintenance of the intellectual property during the term
of this Agreement and thereafter beyond that provided by the
Agreement.  Each Party agrees to pay the other Party reasonable
compensation for such cooperation beyond the term of this
Agreement.

     

    (e)   During
the term of this Agreement, and any extension thereof, Buyer hereby grants to
Seller a worldwide, royalty-free, non-exclusive license to use the BSC
Intellectual Property solely for the purpose of fulfilling its obligations
hereunder.  No other license is granted by Buyer therein or in any
other of Buyer’s intellectual property.  Buyer reserves to itself
exclusive ownership and rights in the BSC Intellectual Property, except to the
extent of the limited license granted in this section.

     

    (f)   Seller
agrees that there shall be no consideration provided by Buyer to Seller not
expressly contemplated in this Agreement for Seller’s manufacturing know-how and
other intellectual property used by Seller in the manufacture and delivery of
Product to Buyer.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    4.4           Co-Branding

    

    (a)           All
labeling, packaging, materials for advertising and marketing, websites, and user
and technical documentation for Products (collectively, “Materials”) will be co-branded
with both the Boston Scientific and Bovie names (the “Co-Brand”).  Unless
otherwise mutually agreed to by the Parties in writing, the Co-Brand shall be
present on all Materials in a size and format to be mutually agreed upon by the
Parties, but in all cases so that each name is prominent and reasonably legible
to the naked eye.  The Parties will work in good faith to agree to one
or more standard Co-Brand templates for use on the Materials, which Templates
shall specify the acceptable visual characteristics of the Co-Brand for use on
Materials, and as long as one of these templates is used, Buyer may use the
Co-Brand without the further prior approval of Seller.  Any deviation
from the template will require the prior written approval of Seller, which
approval shall not be unreasonably withheld.

    

    (b)           Buyer
will use Seller’s trademarks as adjectives and not as nouns or verbs, and not in
the plural or possessive form.  In advertising and marketing
materials, Buyer shall distinguish Seller’s trademark from surrounding text by
using bold, italics or the appropriate visual tools, or by capitalization or the
use of quotation marks, and will use the proper trademark symbol in connection
with Seller’s trademarks.

    

    (c)           Seller
hereby grants to Buyer a fully paid-up, royalty free license to use Seller’s
trademarks solely in connection with the marketing, distribution, import,
export, use, offer to sell and sale of the Products.

    

    (d)           Seller
will take such actions as are reasonably necessary to prosecute and maintain its
trademarks and shall inform Buyer of any changes in or additions to any
trademark used in the Co-Brand materials.

    

    (e)           Except
as required under this Agreement, and as set forth in this Section 4.4
(Co-Branding), in no event will Seller be permitted to use Buyer’s trademarks
without the prior written consent of Buyer.

    

    (f)           Combining
the Parties’ trademarks is permitted only as mutually agreed to by the Parties
for purposes of the Co-Brand.

    

    5.           Insurance and
Indemnification.

     

    5.1           Insurance.  Seller shall:
(a) during the term of this Agreement, maintain commercial general liability
insurance, naming Buyer as additional insured and loss-payee; and (b)
immediately notify Buyer in writing of any change or cancellation relating to
such policy.  Prior to execution of this Agreement, Seller shall
provide Buyer with a certificate of insurance evidencing such
insurance.

     

    5.2           Indemnification.

     

    (a)           Seller
shall indemnify, defend and hold harmless Buyer and its Affiliates and their
respective directors, officers, employees and agents from and against any claim,
action, suit, demand, damage, expense or losses (including
reasonable attorneys’ fees) (collectively, "Claims") resulting from or in
any way relating to: (i) the gross negligence, intentional misconduct, or
violation of law by Seller or Seller Representatives in the performance of, or
its failure to perform, any of Seller’s obligations under this Agreement; (ii)
any material breach of Seller’s representations, warranties, covenants or
obligations under this Agreement, including Seller’s obligation to deliver
Product under this Agreement; or (iii) infringement or alleged infringement of
any third party intellectual property rights with respect to any Product
provided by Seller to Buyer hereunder to the extent that infringement is found
by a court of competent jurisdiction to result from the use or sale of a Bovie
Improvement or the incorporation of Bovie Intellectual Property into a
Product.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (b)           Buyer
shall indemnify, defend and hold harmless Seller and its Affiliates and their
respective directors, officers, employees and agents from and against any Claims
resulting from or in any way relating to:  (i) the gross negligence,
intentional misconduct, or violation of law by Buyer in the performance of, or
its failure to perform, any of Buyer’s obligations under this Agreement; (ii)
any material breach of Buyer’s representations, warranties, covenants or
obligations under this Agreement, or (iii) infringement or alleged infringement
of any third party intellectual property rights with respect to any BSC
Intellectual Property (including Specifications or requirements provided by
Buyer to Seller hereunder), except to the extent that infringement is found by a
court of competent jurisdiction to result from Buyer’s use, manufacture, offer
to sell, or sale of Bovie’s Intellectual Property or Bovie’s Improvements
incorporated into a Product.

     

    (c)           Each
Party’s obligations to the other Party under this Section 5.2 are conditioned
upon the Party seeking indemnification:  (i) providing notice to the
indemnifying Party of any Claims promptly, but not later than thirty (30) days
after the Party knows of such Claim; (ii) permitting the indemnifying Party to
assume full responsibility for the defense of such Claim; (iii) assisting the
indemnifying Party in defense of such Claim; and (iv) not compromising or
settling any such Claim without the indemnifying Party’s prior
consent.  Notwithstanding the foregoing, a Party's failure to give
the notice specified in Section 5(c)(i), or delay in giving such notice, shall
not affect such Party's right to indemnification under this Section 5.2 except
to the extent that the indemnifying Party has been prejudiced by such failure or
delay.  In addition, the indemnifying Party may not settle a claim
without the indemnified Party’s consent unless such settlement includes a full
release or license for both past and future sales of Product at no additional
cost to the indemnified Party.

     

    6.           Remedies.  Termination of this Agreement, or
the exercise of any other remedy, shall not be deemed to be an exclusive remedy
hereunder, and shall be in addition to any other remedies available at law or in
equity (including a Party’s right to obtain specific performance and other
equitable relief for other Party’s material breach).

     

    7.   
       Term.

     

    7.1           Term;
Termination.  The initial
term of this Agreement shall commence on the Effective Date and expire on the
fifth (5th) 12-month anniversary of the Product Launch Date of the
Product.  This Agreement will automatically renew for additional
one-year periods, unless notice of cancellation is delivered by either Party at
least one hundred and eighty (180) days prior to the end of the then current
term.  Notwithstanding the above, this Agreement shall
terminate:

     

    (a)           subject
to Section 7.1(b), sixty (60) days after notice of a material breach from one
Party to the other, but only if such breach remains uncured at the end of such
60-day period; provided, however, that this
Agreement shall terminate immediately upon notice of breach to a Party if the
same or similar material breach was the subject of a previous notice of breach
pursuant to which a 60-day cure period was previously provided to such
Party;

     

    (b)           subject
to the Force Majeure provisions of Section 7.3, immediately upon notice from
Buyer if:  (i) Seller does not satisfy Buyer’s binding purchase order
requirements for any two (2) consecutive months; (ii) Buyer determines in good
faith that Five Percent (5%) or more of any particular Product manufactured and
delivered to Buyer during a calendar month is defective, or does not meet the
Specifications for such Product, anytime after the first ninety (90) days of the
term of this Agreement; (iii) Buyer believes in good faith that Seller's quality
assurance policies do not comply with Section 3; or (iv) Buyer reasonably
determines that any material breach hereunder does or may negatively impact the
performance of any of Buyer’s Products, Buyer’s reputation, patient safety or
the safety of any other persons or the environment;

     

    (c)           in
accordance with Section 7.3 or 7.4 hereof;

     

    (d)           immediately
upon notice from a Party if the other Party has become the subject of voluntary
or involuntary bankruptcy, receivership, or insolvency proceedings;

     

    (e)           following
one hundred and twenty (120) days written notice from Buyer of its intent to
terminate for convenience;

     

    (f)           immediately
upon notice from Seller if Buyer fails to make payments to Seller in accordance
with the provisions of Section 2.2, above.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    7.2           Fulfillment Upon
Termination.  (a) Upon termination (except pursuant to Section
7.1(e), above) or expiration of this Agreement, Seller shall be obligated to
fulfill any then open binding purchase orders, and Buyer shall be obligated to
purchase (a) all Products on open binding purchase orders not yet purchased, and
(b) all then-existing Shelf Inventory; provided, however, that in no
event shall Buyer be required to purchase any Product (including work-in-process
or raw materials or Shelf Inventory) after any termination of this Agreement by
Buyer pursuant to Section 7.1(a), (b), (c) or (d) .

     

    (b) Upon
termination pursuant to Section 7.1(e), above, in Contract Years One or Two, if
Buyer has not purchased the minimum quantity of Product units for Contract Years
One and Two, as set forth in Section 1.3, above, Buyer shall immediately
purchase or, at its election, pay for in cash the transfer price of the number
of Product units equal to the difference between Thirty-Five Hundred (3,500) and
the actual number of Product units purchased to that point in time by Buyer.
Upon termination pursuant to Section 7.1(e), above, after Contract Year Two,
Buyer shall be obligated to purchase (a) all Products on then open binding
purchase orders not yet purchased, and (b) all then-existing Shelf
Inventory.

     

    7.3           Force
Majeure.  If a Party’s performance is delayed because of war or
similar unrest, terrorism, fire, act of God or other similar cause that is
beyond its control and which such Party could not have reasonably prevented,
such delay in performance shall not be considered a breach of this Agreement;
provided, however that if such
delay continues for sixty (60) days or more, then:  (a) the other
Party may upon notice cancel all or any portion of unfilled orders; and (b) that
other Party may immediately terminate this Agreement.

     

    7.4           Failure to
Supply.  If Seller fails to meet its binding supply obligations
under any binding purchase orders provided by Buyer pursuant to Section 1.3, and
such failure:

     

    (a)           remains
uncured for more
than   **       **, then such
shortfall shall be sold to Buyer at a price discount
of   **       **  percent   **       **
and this discount will remain in effect for three (3) consecutive months after
the failure to supply has been cured; and

     

    (b)           results
in less than the specified number of Product units being delivered to Buyer for
any five (5) months, whether consecutive or not, at any time during the term of
this Agreement, then Buyer may terminate this Agreement immediately upon written
notice and initiate a manufacturing transfer pursuant to Section 7.5 hereof to
be completed by Seller at Seller’s expense.

     

    7.5           Manufacturing
Transfer.  In the event of any termination of this Agreement,
Seller shall physically transfer to Buyer, at Buyers expense, all of Buyer’s
Property held by Seller.  Buyer may purchase from Seller, all tooling
developed by Seller and not previously charged to Seller.

     

    8.           Warranty.

     

    In
addition to any other representations and warranties of Seller herein, Seller
represents and warrants to Buyer that all Products supplied to Buyer hereunder
shall: (a) conform to the Product Specifications, (b) be manufactured, labeled,
packaged and tested in accordance with the applicable regulatory approvals
therefor and the applicable laws and regulations relating to the manufacture,
labeling, packaging and testing of Products, and (c)  be free from
defects in design, materials and workmanship.  Seller shall provide
all end-users of all Products a limited warranty that reasonable care has been
used in the design and manufacture of the Products.  If a Product does
not conform to the warranties set forth above, Seller will replace the Product,
issue Buyer a refund, or issue Buyer a credit toward future purchases, solely at
Seller’s discretion.

     

    9.           Miscellaneous.

     

    9.1           Seller
is an independent contractor of Buyer, and neither Party has the power to bind
the other.  Subject to the limitations of Force Majeure set forth in
Section 7.3, above, time is of the essence in performance
hereunder.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    9.2           Neither
Party shall assign this Agreement or its obligations hereunder, whether
voluntarily or involuntarily, without the express prior written consent of the
other Party, except that either Party hereto may assign all of its rights and
obligations under this Agreement to any purchaser, directly or indirectly, of
(a) in the case of Seller, all or substantially all of Seller’s assets (or
stock), and (b) in the case of Buyer, all or substantially all of Buyer’s
Oncology Business assets (or stock), without the other Party’s
consent.  Any permitted assignee hereunder is deemed to have assumed
the assignor’s performance obligations in favor of the non-assigning
Party.

     

    9.3           This
Agreement is fully binding upon either Party’s successors and permitted
assigns.

     

    9.4           All
requests, approvals, consents and notices must be in writing and will be
effective as of the date actually received and, unless otherwise specified in
this Agreement, shall be sent as follows: (i) certified mail - return receipt
requested; (ii) a nationally recognized overnight delivery service that
guarantees overnight delivery and requires the signature of recipient; or (iii)
facsimile, transmission confirmed; to the addresses and fax numbers indicated on
the first page of this Agreement; provided, however, that a copy
is also sent one of the foregoing methods of subsection (i) or (ii),
above

     

    9.5           This
Agreement:  (i) is governed by the laws of The State of New York,
without reference to its internal principles of conflicts of laws; (ii) together
with all Exhibits thereto (which are hereby incorporated into this Agreement) is
the entire and exclusive set of terms and conditions for transactions made with
respect to the Products; (iii) supersedes conflicting terms of purchase orders,
invoices or other documents issued under it; and (iv) may only be modified by a
writing signed by both Parties.

     

    9.6           Headings
of the articles, sections and subsections of this Agreement, and the name of
this Agreement, are for reference purposes only and shall not limit or affect
the meaning or construction of the terms and conditions
hereof.  Whenever the words “include”, “includes” or “including” are
used in this Agreement, they shall be deemed in each instance to be followed by
the words “without limitation.”

     

    9.7           No
failure of either Party to enforce any right under this Agreement shall be
deemed a waiver thereof.

     

    9.8           For
purposes of clarity, nothing in this Agreement shall restrict: as to Buyer, the
right to pursue alternative resection device technology or Dissimilar Devices
(defined below) from third parties or, as to Buyer or Seller, from
developing alternative resection device technology or Dissimilar Devices
internally or from selling any such Dissimilar Devices.  As used herein, a
"Dissimilar Device" is a
medical device whose manufacture, use, importation, offer for sale, or sale,
would not, if performed by a party other than Buyer (or its licensee) infringe
BSC Intellectual Property.

     

    9.9           All
obligations and rights which are by their nature continuing, including the
obligations contained in Sections 3.7 and 7.2 and Sections 4 through 6, and 8,
shall survive the expiration or termination of this Agreement.

     

    [BALANCE
OF THIS PAGE INTENTIONALLY LEFT BLANK]

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    10.           Additional Representations
and Warranties.  Each Party hereby represents and warrants to
the other that:  (a) the execution and delivery of and performance
under this Agreement by such Party does not, and will not, conflict with or
violate any other agreement or obligations with third parties or any
restrictions of any kind or any law to which it is bound or subject; and (b) it
has the unrestricted right to disclose any information it submits to the other
Party, free of all claims of third parties, and that such disclosures do not
breach or conflict with any confidentiality provisions of any agreement to which
it is a party.
Each Party hereto further hereby represents and warrants that (x) it owns
or has sufficient license and right to intellectual property used in connection
with or incorporated into the Product; and (y) the manufacture, use,
importation, offer for sale, and sale of the Product does not and will not
infringe the intellectual property rights of any third party.

     

    ACCEPTANCE
OF AGREEMENT

     

    By
signing below the undersigned acknowledge and accept all terms and conditions of
this Agreement.

     

    
      
        
          
            
              
                
                  	
                          SELLER: BOVIE MEDICAL
      CORPORATION

                        	 
      	
                          BUYER:  BOSTON SCIENTIFIC
      CORPORATION

                        
	 
      	 
      	 
      	 
      	 
      
	
                          By:

                        	
                          /S/ Moshe Citronowicz

                        	 
      	
                          By:

                        	 
      
	 
      	
                          (Signature)

                        	 
      	 
      	
                          (Signature)

                        
	
                          Print
      Name:

                        	
                          Moshe Citronowicz

                        	 
      	
                          Print
      Name:

                        	
                          Dave
      McClellan

                        
	
                          Title:

                        	
                          Vice President/COO

                        	 
      	
                          Title:

                        	
                          President,
      Oncology Division

                        
	
                          Date
      Signed:

                        	
                          10/06/06

                        	 
      	
                          Date
      Signed:

                        	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                          By:

                        	 
      
	 
      	 
      	 
      	 
      	
                          (Signature)

                        
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                          Print
      Name:

                        	
                          Ghislain
      Gackiere

                        
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                          Title:

                        	
                          Finance
      Director

                        
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                          Date
      Signed:

                        	 
      

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBIT
A: PRODUCT AND PRODUCT SPECIFICATIONS

    
      

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                1-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

      

      EXHIBIT A
Version A-1 to Exhibit 10.12 – Redacted

       

      

       

      BOVIE
–

      Resection
Device

      

      Product
Specifications

      

      BOVIE MEDICAL
CORPORATION

      CONFIDENTIAL

      FOR INTERNAL USE
ONLY

       

      BOVIE
MEDICAL CONFIDENTIAL

      THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                2-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

      

      Table of
Contents

      

      
        
          	
                  1     INTRODUCTION

                	
                  4

                
	 
      	 
      
	
                  1.1     Purpose

                	
                  4

                
	 
      	 
      
	
                  1.2     Scope

                	
                  4

                
	 
      	 
      
	
                  2     APPLICABLE
      DOCUMENTS

                	
                  4

                
	 
      	 
      
	
                  2.1     Standards

                	
                  4

                
	 
      	 
      
	
                  3.0
      GENERAL DESCRIPTION

                	
                  4

                
	 
      	 
      
	
                  3.1
      Concept Drawing

                	
                  5

                
	 
      	 
      
	
                  3.2
      Application

                	
                  5

                
	
                  3.2.1
      Intended Use

                	
                  5

                
	
                  3.2.2
      Intended Users

                	
                  6

                
	 
      	 
      
	
                  3.3
      Quality System Requirements

                	
                  6

                
	
                  3.3.1
      US Requirements

                	
                  6

                
	
                  3.3.2
      Canadian Requirements

                	
                  6

                
	
                  3.3.3
      European Classifications

                	
                  7

                
	
                  3.3.4
      Quality System Requirements

                	
                  7

                
	 
      	 
      
	
                  4     PRODUCT
      DOCUMENT STRUCTURE

                	
                  7

                
	 
      	 
      
	
                  4.1     Project
      Documentation

                	
                  7

                
	 
      	 
      
	
                  4.2     Model Number
      Format

                	
                  7

                
	 
      	 
      
	
                  5     PRODUCT
      REQUIREMENTS

                	
                  8

                
	 
      	 
      
	
                  5.1     Electrical and
      Mechanical

                	
                  8

                
	
                  5.1.1     Insulated
      Handle

                	
                  8

                
	
                  5.1.2     Shaft
      and Electrode Tip

                	
                  9

                
	
                  5.1.3     Shipping
      and Handling

                	
                  10

                
	
                  5.1.4     Sterilization

                	
                  10

                
	 
      	 
      
	
                  6     Protection
      Against Hazards

                	
                  10

                
	 
      	 
      
	
                  7     Packaging

                	
                  10

                
	 
      	 
      
	
                  7.1     Labeling

                	
                  10

                
	 
      	 
      
	
                  7.2     Packaging
      Configuration

                	
                  11

                
	 
      	 
      
	
                  7.3     Manufacturing

                	
                  11

                

        

      

       

      BOVIE
MEDICAL CONFIDENTIAL

      THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                3-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

       

      List
of Tables

      
        
          
            
              
                	
                        Table
      One – Standards

                      	
                        Page
      4

                      
	
                        Table
      Two – Device Classifications

                      	
                        Page
      6

                      
	
                        Table
      Three – Model Number Format

                      	
                        Page
      7

                      
	 
      	 
      
	
                        List
      of Figures

                      
	
                        Figure
      One – Concept Drawing

                      	
                        Page
      5

                      

              

            

          

        

      

       

      BOVIE
MEDICAL CONFIDENTIAL

      THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                4-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

       

      
        
          
            	
                    1

                  	
                    INTRODUCTION

                  

          

        

         

      

      
        
          
            	
                    1.1

                  	
                     
      Purpose

                  

          

        

         

      

      This
Product Specification defines preliminary product requirements and constitutes a
part of the Design Inputs for the Resection Device Project for Boston Scientific
Corporation (“BSC”).

       

      
        
          
            	
                    1.2

                  	
                     
      Scope

                  

          

        

         

      

      This
Product Specification sets forth the requirements, provided by BSC, for the
Resection Device, (the “Device”).

       

      
        
          
            	
                    2

                  	
                    APPLICABLE
      DOCUMENTS

                  

          

        

         

      

      The
following is a list of all documents and other sources of information referenced
in this Product Specification.

       

      
        
          
            	
                    2.1

                  	
                     
      Standards

                  

          

        

         

      

      
        
          
            
              
                
                  	
                          Standard

                        	
                             

                        	
                          Version/Date

                        	
                             

                        	
                          Description

                        
	
                          21
      CFR Part 820

                        	 
      	 
      	 
      	
                          Medical
      Devices, Current Good Manufacturing Practices, Final Rule, Quality System
      Regulation.

                        
	
                          HF-18

                        	 
      	
                          2001

                        	 
      	
                          AAMI/ANSI
      Electrosurgical Devices

                        
	
                          10993-1

                        	 
      	
                          3;
      Date 8-1-03

                        	 
      	
                          AAMI/ANSI/ISO
      Biological evaluation of medical devices – Part 1: Evaluation and
      Testing

                        
	
                          EN
      980

                        	 
      	
                          2003

                          04/16/2003

                        	 
      	
                          Graphical
      symbols for use in the labeling of medical devices

                        
	
                          EN
      ISO 14971

                        	 
      	
                          2000
      AMD 1 2003

                          03/01/2003

                        	 
      	
                          Medical
      devices – Application of risk management to risk management to medical
      devices (ISO 14971:2000)

                        
	
                          ISTA
      2A 2006

                        	 
      	
                          2006

                        	 
      	
                          Performance
      Test for Packaged-Products Weighing 150 lbs (68 kg) or
  Less

                        

                

              

            

          

        

      

      Table 1 -
Applicable Standards for Medical Devices (US)

       

      
        
          
            	
                    3.0

                  	
                    GENERAL
      DESCRIPTION

                  

          

        

         

      

      The
Device is a sterile, single use electrosurgical device intended to be used in
conjunction with an electrosurgical generator for the delivery of radiofrequency
(“RF”) current and sterile saline for hemostatic sealing and coagulation of soft
tissue in accordance with instructions and user procedures provided by
BSC.  The device is not intended for any other unspecified uses.

       

      BOVIE
MEDICAL CONFIDENTIAL

      THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                5-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

       

      
        
          
            	
                    3.1

                  	
                    Concept
      Drawing

                  

          

        

         

      

      

      Figure 1

       

      
        
          
            	
                    3.2

                  	
                    Application

                  

          

        

         

      

      
        
          
            	
                    3.2.1

                  	
                    Intended
      Use

                  

          

        

         

      

      The
Device is a sterile, single use electrosurgical device intended to be used in
conjunction with an electrosurgical generator for the delivery of radiofrequency
current and sterile saline for hemostatic sealing and coagulation of the soft
tissue in accordance with instructions and user procedures provided by BSC. The
device is not intended for any other unspecified uses.

       

      BOVIE
MEDICAL CONFIDENTIAL

      THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                6-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

       

      
        
          
            	
                    3.2.2

                  	
                     Intended
      Users

                  

          

        

         

      

      Users of
this Device will be healthcare professionals such as medical doctors and nurses,
who are qualified and trained in electrosurgical procedures.

       

      
        
          
            	
                    3.3

                  	
                     Quality
      System Requirements

                  

          

        

         

      

      The
Device has the following classifications for FDA, CMDR, and MDD
classification.

       

      
        
          
            
              
                
                  	
                          Device

                        	 
      	
                          US Classification

                        	 
      	
                          Canada

                          Classification

                        	 
      	
                          MDD

                          Classification

                        
	 	 	 	 	 	 	 
	
                          Resection
      Device

                        	 
      	
                          II

                        	 
      	
                          III

                        	 
      	
                          IIb

                        

                

              

            

          

        

      

       

      Table 2 -
Device Classifications

       

      
        
          	
                  3.3.1

                	
                   US
      Requirements

                

        

         

      

      To market
medical products, the Food and Drug Administration (FDA) must determine that a
medical device is substantially equivalent to similar marketed medical
devices.  The Bovie Regulatory department intends to use the
dissecting sealer device manufactured by TissueLink as a predicate
device.

       

      
        
          
            	
                    3.3.1.1

                  	
                    Classification

                  

          

        

         

      

      The
Device’s classification is Class II.

       

      
        
          
            	
                    3.3.1.2

                  	
                    Safety
      and Effectiveness
requirements

                  

          

        

         

      

      The
Device will meet electrical safety requirements (ANSI/AAMI
HF-18:2001).

       

      
        
          
            	
                    3.3.1.3

                  	
                    Quality
      System Requirements

                  

          

        

         

      

      Quality
system requirements are specified as part of 21 CFR Part 820, Quality System
Regulation.

       

      
        
          
            	
                    3.3.2

                  	
                     Canadian
      Requirements

                  

          

        

         

      

      To market
medical products in Canada, a license application must be presented to Health
Canada. Once the license application is approved, the medical product can be
labeled and made available for sale in the Canadian provinces.

       

      
        
          
            	
                    3.3.2.1

                  	
                    Classification

                  

          

        

         

      

      Class
III

       

      BOVIE
MEDICAL CONFIDENTIAL

      THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                7-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

       

      
        
          
            	
                    3.3.2.2

                  	
                    Safety
      and Effectiveness
requirements

                  

          

        

         

      

      Safety
and effectiveness requirements closely correspond to the essential requirements
of the Medical Device Directive.  A list of Health Canada recognized
standards has been issued as of April 11, 2002 in Policy on Recognition and Use
of Standards under Medical Device Regulations.

       

      
        
          
            	
                    3.3.2.3

                  	
                    Quality
      System Requirements

                  

          

        

         

      

      Health
Canada requires manufacturers of Class II, III and IV device to demonstrate that
their devices are manufactured in accordance with internationally recognized
standards.  Demonstration of compliance with the quality system
requirements will be required at the time an application is made for a medical
device license.

       

      
        
          
            	
                    3.3.3

                  	
                     European
      Classifications

                  

          

        

         

      

      
        
          
            	
                    3.3.3.1

                  	
                    Classification

                  

          

        

         

      

      The
Device is classified IIb (Rule 9 ) in accordance with the Medical Devices
Directive Annex IX.

       

      (Reference:
Guidelines for the Classification of Medical Devices – MEDDEV 2.4/1 Rev. 8, July
2001)

       

      
        
          
            	
                    3.3.3.2

                  	
                    Conformance
      Assessment Route

                  

          

        

         

      

      The
Device assessment route will be via Annex II (full quality assurance
system).

       

      
        
          
            	
                    3.3.4

                  	
                     Quality
      System
Requirements

                  

          

        

      

       

      Bovie
Medical Corporation (“Bovie”) has been certified to ISO13485

       

      
        
          
            	
                    4

                  	
                    PRODUCT
      DOCUMENT STRUCTURE

                  

          

        

         

      

      
        
          
            	
                    4.1

                  	
                     
      Project Documentation

                  

          

        

         

      

      Documents
will be in standard Bovie document format.

       

      
        
          
            	
                    4.2

                  	
                     
      Model Number Format

                  

          

        

         

      

      The
following table lists the Device’s model number and corresponding product /
catalog code.

       

      
        
          
            
              
                	
                        Catalog #

                      	 	
                        Comments

                      
	
                        TBD

                      	 	
                        Laparoscopic  Monopolar
      Device

                      
	
                        TBD

                      	 	
                        Open
      Abdominal Monopolar
Device

                      

              

            

          

        

      

          Table
Three

       

      BOVIE
MEDICAL CONFIDENTIAL

      THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                8-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

       

      
        
          
            	
                    5

                  	
                    PRODUCT
      REQUIREMENTS

                  

          

        

         

      

      The
following section will describe requirements for the insulated handle and shaft
with electrode tip.

       

      
        
          
            	
                    5.1

                  	
                    Electrical
      and Mechanical

                  

          

        

         

      

      The
Device hardware is comprised of two (2) major components: (i) an Insulated
Handle and (ii) a Shaft with Electrode Tip. RF energy is passed through the
Insulated Handle through the Shaft to the Electrode Tip by a powered lead from
an electrosurgical generator.

       

      
        
          
            	
                    5.1.1

                  	
                    Insulated
      Handle

                  

          

        

         

      

      The
Insulated Handle encases the controlling mechanism for the flow of saline, and
activation and selection of the RF current for the Device.

       

      5.1.1.1
Insulated Handle and Power Cord Insulation Resistance

       

      The
insulation of the Insulated Handle and Power Cord shall meet Requirements of
Section 4.2.5.4 Dielectric withstands of accessories ANSI/AAMI
HF-18:2001

       

      5.1.1.2
Insulated Handle Ergonomics

       

      The
Insulated Handle shall be designed for comfortable and efficient hand
operation.  It will incorporate an over-mold to give the body an
elegant feel and soft touch.

       

      5.1.1.3
Insulated Handle Electrical Cord

       

      The
Insulated Handle Electrical Cord shall be approximately ten (10) feet in length
and incorporate a 3-prong electrical plug.

       

      5.1.1.4
Insulated Handle Flow Control Mechanism

       

      The
Device will have a flow control mechanism, either on the tubing or in the handle
itself so the flow can be regulated by the user within the sterile
field.

       

      5.1.1.5
Insulated Handle Tubing Length

       

      The
tubing length should be approximately seven (7) feet in length and incorporate
an I.V. spike on the end to attach directly to a hanging IV bag.

       

      5.1.1.6
Insulated Handle Tubing Material

       

      The
tubing material should be a material that will resist kinking but should not
have so strong a memory as to pull the probe off of the sterile
field.

       

      5.1.1.7
Insulated Handle Activation Buttons

       

      The Device should have a Cut and Coagulation Mode. “Cut”/”Coag”
buttons must be easy to operate.

       

      BOVIE
MEDICAL CONFIDENTIAL

      THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                9-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

       

      5.1.1.8
Insulated Handle Compatibility

       

      
        	
                 
      

              	
                ·

              	
                The
      Insulated Handle should have compatibility with standard RF generators
      used for electrocautery and standard grounding
  pad.

              

      

       

      
        	
                 
      

              	
                ·

              	
                The
      Insulated Handle should have compatibility with standard 0.9% saline I.V.
      bag.

              

      

       

      
        
          
            	
                    5.1.2

                  	
                    Shaft
      and Electrode Tip

                  

          

        

         

      

      The Shaft
and Electrode Tip provide the actual working portion of this
system.

       

      5.1.2.1
Saline Flow Rate of Device

       

      The
Saline flow rate prior to use will be
**       **

       

      5.1.2.2
Device (Shaft) Length

       

      The
Device should be straight and have two (2) lengths: one for laparoscopic
monopolar procedures (approximately thirty-two (32) cm) and one for open
monopolar procedures (approximately fourteen (14) cm).

       

      5.1.2.3
Shaft Configuration

       

      The Shaft
will be hollow to allow for fluid to flow to the sintered stainless steel tip.
The inside diameter of the Shaft should be equal to the inside diameter of the
tubing that feeds fluid to the Shaft to minimize any flow restriction in the
fluid circuit.

       

      5.1.2.4
Tip Material

       

      The Tip
shall be made of **       **

       

      .

       

      5.1.2.5
Tip Strength

       

      The
porous blade tip to shaft tensile bond strength (axial mode) must be greater
than **       **

       

       after
being subjected to a full-power simulated use duty cycle.

       

      The
porous blade tip to shaft bond strength in an flexural mode must be greater than
**       **

       

      . after being subjected to a full-power simulated use duty
cycle.

       

      BOVIE
MEDICAL CONFIDENTIAL

      THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                10-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

       

      5.1.2.6
Tip performance

       

      
        	
                 
      

              	
                ·

              	
                Bovie
      will exert its best efforts to meet the design goal that tip cutting
      performance be superior to competitive devices with respect to cutting
      speed. Tip will have the ability to coagulate soft tissue when performed
      in a suitable simulated use
environment.

              

      

       

      
        
          
            	
                    5.1.3

                  	
                    Shipping
      and Handling

                  

          

        

         

      

      4.1.3.1
Shipping Temperatures

       

      Tropical
(Wet and Dry) Conditions and Winter (Frozen) Conditions per ISTA
2A.

       

      4.1.3.2
Transportation Testing

       

      The Final
Product Packaging Configuration for the Device shall meet the finished device
requirements after being subjected to Simulated Transportation Conditioning per
ISTA 2A.

       

      
        
          
            	
                    5.1.4

                  	
                    Sterilization

                  

          

        

         

      

      5.1.4.1
Withstand 2x ETO Sterilization.

       

      5.1.4.2
EN 550: 1994 – Sterilization of Medical Devices – Validation and routine control
of ethylene oxide sterilization.

       

      5.1.4.3
AAMI/ANSI/ISO 11135 -1994 Medical Devices – Validation and routine control of
ethylene oxide sterilization.

       

      
        
          
            	
                    6

                  	
                    Protection
      Against Hazards

                  

          

        

         

      

      A
Hazard/Risk Analysis will be performed throughout the design
process.  The Hazard/Risk Analysis will be documented and filed as
part of the design history file.

       

      
        
          
            	
                    7

                  	
                    Packaging

                  

          

        

         

      

      
        
          
            	
                    7.1

                  	
                     
       Labeling

                  

          

        

         

      

      
          7.1.1
Package must be labeled in accordance with both BSC and Bovie Labeling
Standards.

      

      

      
         
7.1.2 BSC and Bovie branding, including mutually approved trademarks, will
be on the Handle and/or the shaft.

      

      

      
         
7.1.3 The Device is to have a three (3) year shelf life under normal storage
conditions.

      

       

      BOVIE
MEDICAL CONFIDENTIAL

      THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                11-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

       

      
        
          
            	
                    7.2

                  	
                     
      Packaging Configuration

                  

          

        

         

      

      
        	
                 
      

              	
                ·

              	
                The
      Tip and Shaft protector shall be included into the
  Design.

              

      

      
        	
                 
      

              	
                ·

              	
                The
      Scratch Pad shall be packaged with the
Device.

              

      

      
        	
                 
      

              	
                ·

              	
                The
      Device will be packaged in a Sterile
Pouch.

              

      

      
         

        
          
            	
                    7.3

                  	
                     
      Manufacturing

                  

          

        

         

      

      Final
assembly and packaging will be performed by Bovie.

       

      BOVIE
MEDICAL CONFIDENTIAL

      THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 
      	
                Author

                Thomas
      Feldhaus

              	
                Document
      Number

                 

              	
                Rev

                Level
      A-1

              	
                Page

                12-12

              
	
                Title:  Product
      Specification: Resection
Device

              

      

      
 

      APPROVALS

      

      
        
          
            
              
                
                  
                    
                      
                        	
                                Author

                              	 
      	 
      	 
      
	 
      	
                                Thomas
      Feldhaus

                              	 
      	
                                Date

                              
	
                                Sales
      & Marketing

                              	 
      	 
      	 
      
	 
      	
                                Rick
      Pfahl

                              	 
      	
                                Date

                              
	
                                Regulatory

                              	 
      	 
      	 
      
	 
      	
                                Rick
      Kozloff

                              	 
      	
                                Date

                              
	
                                Quality

                              	 
      	 
      	 
      
	 
      	
                                John
      Woody

                              	 
      	
                                Date

                              
	
                                Manufacturing

                              	 
      	 
      	 
      
	 
      	
                                Lillian
      Eshem

                              	 
      	
                                Date

                              
	
                                Engineering

                              	 
      	 
      	 
      
	 
      	
                                Fred
      Baron

                              	 
      	
                                Date

                              

                      

                    

                  

                

              

            

          

        

      

       

      
        BOVIE
MEDICAL CONFIDENTIAL

        THIS
DOCUMENT IS THE PROPERTY OF BOVIE MEDICALCORPORATION AND MUST BE ACCOUNTED
FOR.  INFORMATION HEREIN IS CONFIDENTIAL.  DO NOT REPRODUCE,
USE, OR CONVEY ANY PORTION OF THIS DOCUMENT TO UNAUTHORIZED PERSONS, WITHOUT
PROPER AUTHORIZATION.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    EXHIBIT
B:  BUYER’S FORM OF PURCHASE ORDER

     

    PURCHASE
ORDER

    

    
      	
              Boston
      Scientific

              Corporate
      Headquarters

              One
      Boston Scientific Place

              Natick,
      MA 01760

              USA

            	 
      	
              Page
      1

               

              Purchase
      Order No.

              6056307

            
	 
      	 
      	
              This
      number must appear on all invoices, packages and
      correspondence

            
	 
      	
              Ship
      to Address:

            	 
      
	 
      	 
      	 
      
	 
      	
              Boston
      Scientific

              Corporate
      Headquarters

              One
      Boston Scientific Place

              Natick,
      MA 01760

              USA

            	 
      
	 
      	 
      	 
      
	 
      	
              Bill
      to Address:

            	 
      
	 
      	 
      	 
      
	 
      	
              Boston
      Scientific

              Corporate
      Headquarters

              One
      Boston Scientific Place

              Natick,
      MA 01760

              USA

            	 
      
	 
      	 
      	
              Tax
      Exemption No.

            
	
              Telephone:

            	
              5086478600

            	 
      	
              04-2695240

            
	
              FAX:

            	
              5086479416

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              Date
      Ordered:

            	
              FOB

            	 
      	
              Mode
      of  Transportation

            
	
              9-28-2006

            	
              VNCR:
      FOB: Ship Point - Collect

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              Buyer
      No.

            	 
      	
              Confirm
      To:

            	 
      
	
              06B
      NAT

            	 
      	
              John
      Q. Public

            	 
      
	 
      	 
      	 
      	 
      
	
              Terms
      of Payment

            	 
      	 
      
	
              Within
      45 days Due net

            	 
      	 
      

    

    
      
        
          
            
              
                
                  
                    
                      	 
      
	 	 	 	 	 	 	 
	
                              Item

                            	
                              Port
      Number

                            	 
      	
                              Description

                            	 
      	 
      	 
      
	 
      	
                              Quantity

                            	
                              UOM

                            	
                              Due
      Date

                            	
                              Unit
      Price

                            	
                              Taxable

                            	
                              Revision
      Total

                            
	 
      
	
                              00010

                            	 
      	 
      	
                              (Test
      Purchase Order)

                            	 
      	 
      	 
      
	 
      	
                              1.00
      EA

                            	 
      	 
      	
                              150.00/100

                            	
                              Y

                            	
                              0.00

                            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                              Balance
      Due: 0.03

                              Item
      Text:

                              ***
      Item Canceled ***

                              ***
      Item Canceled ***

                            	 
      	 
      	 
      	 
      
	 
      	 
      	
                              TOTAL
      ORDER:

                            	
                              0.00

                            
	 
      	 
      	
                              CURRENCY:

                            	
                              USD

                            
	 
      	 
      	 
      	 
      
	 
      	 
      	
                              Authorized
      Signature

                              JOHN
      SMITH

                            
	 
      	 
      	
                              BUYER

                            
	 
      	 
      	 
      

                    

                  

                

              

            

          

        

      

    

    No
changes or substitutions can be made to DSC specified components or he
processing of those components without prior notification and approval of the
purchasing department.

    

    VENDOR
COPY

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
C:  NON-BINDING 12-MONTH FORECAST

     

    Surgical
Resection

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        	
                                                                Year
      1 

                                                              	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	
                                                                Month 

                                                                1

                                                              	 	
                                                                Month 

                                                                2

                                                              	 	
                                                                Month 

                                                                3

                                                              	 	
                                                                Month 

                                                                4

                                                              	 	
                                                                Month 

                                                                5

                                                              	 	
                                                                Month 

                                                                6

                                                              	 	
                                                                Month 

                                                                7

                                                              	 	
                                                                Month 

                                                                8

                                                              	 	
                                                                Month 

                                                                9

                                                              	 	
                                                                Month 

                                                                10

                                                              	 	
                                                                Month 

                                                                11

                                                              	 	
                                                                Month 

                                                                12

                                                              	 	
                                                                Totals

                                                              
	 
      	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	
                                                                **  **

                                                              	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              	 	
                                                                **  **

                                                              

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBIT
D: LONG LEAD TIME COMPONENTS

     

    (To
be provided as set forth in Section 1.7(a))

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
E:  TRANSFER PRICES

    

    
      
        
          
            
              	
                      Units Purchased in Contract Years 1-2 (in
      aggregate)

                    	 	
                      Price per Unit*

                    
	 
      	 	 
      
	
                      **    **

                    	 	
                      **    **

                    
	
                      **    **

                    	 	
                      **    **

                    
	 
      	 	 
      
	
                      Units Purchased in Contract Years 3-5
      (annually)

                    	 	
                      Price per Unit*

                    
	 
      	 	 
      
	
                      **    **

                    	 	
                      **    **

                    
	
                      **    **

                    	 	
                      **    **

                    
	
                      **    **

                    	 	
                      **    **

                    
	
                      **    **

                    	 	
                      **    **

                    
	
                      **    **

                    	 	
                      **    **

                    

            

          

        

      

    

    

    *Note:
use of this Exhibit, including the determination of applicable pricing, is
subject to the provisions of Section 1.3 of the Agreement.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBIT
F:  SELLER’S VENDORS

     

    The
following list is tentative as of the Effective Date, and Seller reserves the
right to amend this list upon finalization and approval of the Specifications
and Bill-of-Materials for the Product.

     

    1.
**    **

     

    2. Mott
Corporation 84
Spring Lane, Farmington, CT 06032, 860-747-6333.

     

    3.  **    **

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