Consignment Terms Agreement
INTRAOCULAR LENS CONSIGNMENT TERMS AND CONDITIONS
Unless a written agreement has been executed between you and AMO Sales and Service, Inc. ("J&J Vision"), the following terms and conditions apply if you (hereinafter "Consignee") are ordering and purchasing intraocular lenses ("IOLs") from J&J Vision on a consignment basis (the “Consignment”):
1. Title. The Consignment shall remain property of J&J Vision until used by Consignee and removed from Consignee's inventory. J&J Vision shall have a security interest in all goods covered by this Agreement as to all other creditors of Consignee for purposes of attachment, perfection and priority of competing security interests in accordance with Article 9 of the California Commercial Code. J&J Vision reserves the right to modify the IOL inventory and total consignment quantity available to Consignee at any time during the term of this Agreement and shall use reasonable efforts to provide Consignee with at least thirty (30) days’ written notice of such change. Consignee agrees that all IOLs under this Agreement will be used at Consignee’s facility and shall not be re-sold or otherwise diverted.
2. Loss or Damage. Consignee shall be responsible for all loss or damage to the Consignment. Consignee agrees to store the Consignment in accordance with the instructions contained on the applicable product labeling. Any IOLs under this Agreement that may need to be returned shall be returned to J&J Vision in accordance with J&J Vision’s Returned Goods Policy. If any IOLs are damaged as a result of the Consignee’s fault, J&J Vision may (in its discretion and under appropriate circumstances) charge Consignee in an amount determined by J&J Vision not to exceed the amount required to be paid under Section 3 below.
3. Payment. Within two (2) business days of the removal of an IOL from the Consignment, Consignee shall order a replacement IOL from J&J Vision. Upon receipt of such order, J&J Vision shall invoice Consignee in accordance with J&J Vision prices then in effect and ship Consignee the replacement IOL unless Consignment is to be adjusted in accordance with the terms described in Section 1 of this Agreement. Payment shall be made by Consignee based upon the invoice billing terms. In the event consigned IOLs reported as implanted by Consignee have not been invoiced previously, J&J Vision will automatically invoice Consignee for such IOLs and Consignee shall pay such invoice net thirty (30) days from the invoice date.
4. Audit and Report. J&J Vision shall have the right to audit the Consignment (which includes, without limitation, the right to physically inspect the Consignment and/or records relating to the Consignment) at any time and from time to time while this Agreement remains in full force and effect. Consignee shall perform quarterly, bi-annual, or annual audits as requested by J&J Vision or other representative working on behalf of J&J Vision. Consignee must respond to J&J Vision’s audit requests within thirty (30) days and shall reconcile all discrepancies resulting from each audit within thirty (30) days of the date the inventory was recorded. At the end of such thirty (30) days or upon completion of an audit by J&J Vision, Consignee will be invoiced by J&J Vision for all missing IOL units identified during such audit and any shortages shall be replaced and paid for by the Consignee in accordance with the terms described in Section 3 of this Agreement. In the event Consignee requires a purchase order (“PO”), Consignee must provide J&J Vision with a PO for all missing IOL units identified in an audit. If Consignee fails to provide J&J Vision with such PO, J&J Vision may (a) invoice Consignee based on inventory reconciliation or (b) suspend or discontinue providing IOLs under this Agreement, or other J&J Vision products under other agreements between J&J Vision and Consignee, until such PO is received. Any such audit shall be pre-scheduled at times mutually agreed upon in writing by J&J Vision and Consignee and conducted during regular business hours.
5. Inventory Turn Ratio. Consignee must maintain an overall inventory turn ratio of at least one and a half (1.5) times during each year of this Agreement with no one model turning less than half (.5) time during the same period. For example, if J&J Vision consigns a total quantity of ten (10) units, Consignee agrees to order that amount one and a half (1.5) times per year, for a total of fifteen (15) units per year. If Consignee fails to maintain the inventory turn ratio in accordance with this Section 5, J&J Vision may, at its sole option, terminate this Agreement in accordance with Section 8 below or adjust the IOL inventory or consignment quantity as set forth in Section 1 above.
6. Inventory Management. J&J Vision may request Consignee to return expired, soon to expire, obsolete and/or unusable products from Consignment, any time during the term of this Agreement with a thirty (30) days’ written notice. If Consignee fails to return such units within thirty (30) days, Consignee may be invoiced for such units within ten (10) days thereafter.
7. Term and Termination. The term of this Agreement continues until terminated by either party pursuant to this Section 7. This Agreement may be terminated for any reason by either party on thirty (30) days prior written notice. J&J Vision may terminate this Agreement immediately upon breach of its terms by Consignee or in the event that Consignee makes an assignment for the benefit of creditors, files bankruptcy, or becomes insolvent. Upon termination, Consignee at its expense shall immediately return the Consignment to J&J Vision. J&J Vision shall have the right to conduct a termination audit. Consignee agrees to pay for any shortages noted in such audit in accordance with the terms described in Section 3 of this Agreement. The following shall survive the termination of this Agreement: (1) any payment obligations that arose on or before the termination date; (2) Consignee’s obligation to return the Consignment, and (3) Consignee’s obligation to pay for any loss or damage that occurred to the Consignment on or before the termination date.
8. Authority. The person placing the order(s) and purchase(s) referenced herein must have, and does have, appropriate authority to bind Consignee to all terms and conditions referenced herein.
Rev. 1/26