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Quality Management Form Effective Date: 01/01/2018
Title: Supplier Terms and Conditions Doc No. TF004 Rev. Initial
Approved by: Robert Waite & Bryan Payne (TSEP Partners)

The Surgical Equipment People, LLP
192 N Seven Oaks Drive
Knoxville, TN 37922
Ph. 800-268-5645
Fax 865-579-6335


1. Complete Agreement/Additional Terms: The terms, conditions, and provisions of this
Agreement together with the descriptions, specifications, drawings, schedules, exhibits and
attachments or riders annexed hereto and by this reference made a part of this Agreement
(collectively “Attachments”) constitute the entire Agreement between the partiers hereto and shall
supersede all previous communications, representations, or agreements, either verbal or written
between the parties with respect to the subject matter of this Agreement. There are no terms,
agreements or understandings between the parties that are not expressly set forth herein. Buyer’s
offer to purchase is conditioned upon Seller’s acceptance of all the terms and conditions set forth
in this Agreement without alternation of any kind whatsoever.

2. Warranties: Seller warrants that all goods are new (unless otherwise specified) and
warrants, whether new or used, that the goods supplied under this Agreement are fit and sufficient
for the purpose intended, are merchantable, of good quality and free from defects, whether patent
or latent in material, workmanship and design and that the goods conform to the specifications and
requirements of this Agreement, including, but not limited to those set forth in the Attachments.
Seller hereby warrants that it has good, marketable title to the goods or right to perform the services
supplied and that they are free and clear from all liens and encumbrances of any nature whatsoever,
and the Seller shall warrant and defend such title forever against all claims and demands. Seller
further warrants that it has complied with all applicable laws, regulations, standards, procedures
and general requirements. Seller warrants to Buyer that it will promptly repair or replace non-
conforming goods or re-perform such services including reimbursement to Buyer or
removal/installation costs and transportation charges. All repairs, modifications, corrections
and/or replacements shall be made by Seller unless Buyer and Seller agree that Buyer shall make
such repairs, modifications, corrections and/or replacements. All repairs and corrections
performed by Buyer shall be at Seller’s expense, including all material and direct labor costs.
Seller shall maintain a documented control system to assure special processes are performed in
adequate facilities by qualified personnel and that full compliance with the requirements for
governing specifications is achieved. This system shall provide for definitive, written procedures
for the accomplishment of special processes which shall be available in areas of performance. As
applicable, Seller shall provide adequate training and certification of personnel and equipment for
the performance of special processes. Seller shall impose these requirements on all suppliers
performing special processes on deliverable articles.

3. Time of the Essence: Seller and Buyer acknowledge that time is of the essence in
performance of their obligations under the terms of this Agreement.

4. Confidentiality: Seller shall not (a) disclose any information concerning the subject
matter of this Agreement to any third party except as agreed to in writing in advance, and/or (b)
disclose any information which Buyer considers private, proprietary, competition-sensitive or
confidential and/or (c) advertise or publish the fact that Seller has furnished or contracted to furnish
to Buyer the goods or services herein mentioned, without first obtaining the written consent of

5. Intellectual Property: Seller warrants that the sale or use of the goods covered by this
Agreement does not infringe upon any United States or foreign patent, trademark or copyright. Seller shall indemnify defend and hold Buyer, its subsidiaries and affiliates and their officers,
directors, agents and employees harmless from and against any and all royalties, liabilities,
damages, settlement costs and expenses, losses, claims, actions, lawsuits, demands, fines, penalties
of any third party (“Claimed Infringement”) and all court costs and attorney fees incurred by
Buyer, expenses associated with any of all the foregoing or associated with the successful
establishment of the right to indemnifications hereunder based upon, caused by, arising from or in
any manner connected with goods or services (when used separately or with any good(s) or
service(s) whether or not supplied by Seller) purchased or supplied hereunder or any portion
thereof. Seller agrees upon notification to promptly assume full responsibility for defense of any
suit or proceeding if it so desires and the costs for such representations shall be by the Seller. In
the event of any Claimed Infringement, Seller shall, to ensure there is no interference with Buyer’s
use of the goods, promptly either obtain for Buyer the right to use the infringing article, or portion
thereof, so that it becomes non-infringing or replace, modify, substitute or update the infringing
goods, or portion thereof so that it becomes non-infringing. Not patent or copyright application
shall be made by Seller in connection with goods manufactured by Seller hereunder which are of
Buyer’s original design.

6. Law Governing: This Agreement shall be deemed to have been made in the U.S.A. and
shall be interpreted, and the rights and liabilities of the parties hereto determined in accordance
with the laws of the U.S.A., without regard to conflicts of law principles.

7. Indemnity: Seller shall defend, indemnify and hold harmless Buyer together with its
parents, directors, officers, employees, assignees, agents and shareholders (herein after collectively
called the “Indemnified Parties”), from and against all claims, demands suits, obligations,
liabilities, damages, losses and judgments, including costs and expenses related thereto (including
but not limited to reasonable attorney’s fees and expenses and any obligation or liability for loss
of use or any other incidental or consequential damage and all fees and expenses incurred by the
Indemnified Parties in establishing the right to indemnification hereunder), which may be asserted
against, suffered by, charged to or be result from the Indemnified Parties by reason of Seller’s
performance of this Agreement.

8. Cancellation/Termination: Buyer reserves the right, in its sole discretion, to terminate
this Agreement or any part hereof, by written notice and to refuse delivery or, at Seller’s cost,
return goods already delivered or to refuse performance of services (a) at any time prior to
acceptance by Buyer, (b) if shipment is made later than the date specified or note within reasonable
time if no time is otherwise specified.

9. Severability: If any provision of this Agreement shall be declared illegal, void or
otherwise unenforceable, the remaining provisions shall remain in full force and effect.

10. Certificate of Conformance: C of C – Certificate of Conformance (Compliance) must be
provided for each shipment and item in a shipment and include a statement that all applicable
specification(s), drawing(s), including reference to appropriate revision level(s), and purchase
order requirements have been met or exceeded.

11. Inspection and Acceptance: The specific quantities of goods or services ordered must be
performed or delivered in full in compliance with the itemized delivery schedule and cannot be
changed by Seller without the written consent of Buyer. All goods, and services, including all
material, workmanship and design, must be subject to inspection, test and acceptance by Buyer
within a reasonable time after delivery to Buyer. Buyer reserves the right to reject any goods or
services damaged or defective in material workmanship or design. Rejected goods must be
removed at the expense of Seller, including transportation both ways and other related costs,
promptly after notification of rejection and Seller must bear all risk of loss of or damage to rejected
goods. Notwithstanding Buyer’s right to inspect and test after tender of delivery (except where
specialized inspections or tests are to be performed solely by Buyer), Seller must perform, prior to
delivery, inspections and tests reasonably required to substantiate that the goods or services
conform to the requirements of this Agreement, including (where applicable) the technical
requirements for the manufacturer’s part numbers specified herein. With respect to latent defects
that are not apparent upon inspection, Buyer shall advise Seller promptly upon discovery. Any
advance payments by Buyer shall not constitute acceptance by Buyer and shall not be a waiver of
Buyer’s right to inspect and reject the goods or services.

12. Certificate of Conformance: C of C – Certificate of Conformance (Compliance) must be
provided for each shipment and item in a shipment and include a statement that all applicable
specification(s), drawing(s), including reference to appropriate revision level(s), and purchase
order requirements have been met or exceeded.

13. Article Inspection/Test: All articles must be inspected and/or tested by Seller, as
necessary to assure full compliance with requirements prior to presentation for Buyer’s acceptance.
The fact that inspections and/or tests may be performed by Buyer does not relieve Seller of this

14. In-Process Inspection and Test: Seller shall identify inspection and test points
throughout the entire course of fabrication and assembly. Inspection and test points shall be
planned at appropriate stages to verify compliance of characteristics and parameters that cannot be
readily examined after subsequent assembly.

15. Final Inspection and Test: Seller shall assure that final inspection and test verified
compliance with all requirements specified by Buyer as well as Seller’s internal requirements.
Documented evidence of acceptance through prior examinations is acceptable verification.

16. First Article Inspection: When invoked on a PO, Seller shall perform a First Article

17. Records: Records of inspections, test and other quality control activities shall be retained
for a minimum of 5 years and be filed in a manner that will allow access within 24 hours.

18. Processing of Non Conformities: The Seller does not have the authority to perform
material review on any supplies or products that do not conform to contractual requirements.
Nonconforming products or supplies or processes must be reported to Buyer’s purchasing
department. Under no circumstance shall supplies, products, materials be shipped without prior
disposition from our Quality Department.

19. Sub-Tier Suppliers: It is the Seller’s responsibility to ensure that all of their sub-tier
suppliers meet all terms and conditions listed within this Agreement.

20. Changes: Buyer reserves the right to make changes in drawings, designs, specifications,
scope of work to be performed, time and place of delivery and method of transportation. If such
change is to be made, it will be evidenced in writing by Buyer.

21. Quality Audits by Buyer: Seller shall permit Buyer to conduct audits of Seller’s quality
system to evaluate the degree of compliance with ISO 9001 and/or contractual requirements.
Seller shall make available to Buyer during audits a copy of each specification, procedure, record
or special requirement deemed by Buyer to be necessary for proper evaluation. Buyer may use
one or more requirement specific assessment checklist during the audits to determine compliance.

22. Seller’s Inspection and Test Equipment: Quality records and necessary personnel shall
be made available to Buyer for use at Seller’s facility to determine conformity of articles to
contractual requirements.

24. Authenticity of Goods: By Seller’s acceptance of this purchase order, Seller acknowledges
its counterfeit risk mitigation obligations as follows: That the goods to be delivered hereunder shall
be and only contain materials directly from the Original Component Manufacturer (OCM) or the
Original Equipment Manufacturer (OEM), Original Manufacturer (OM) or an authorized
Reseller/Distributor. Not be or contain counterfeit items. Contain only authentic, Unaltered OM
labels and other markings. Further, seller shall notify buyer in writing immediately in the event
that any material to be delivered cannot be procured in accordance with this requirement and seller
must obtain buyers written authorization if an alternate source is required and for any deviation
from the counterfeit risk mitigation requirement applicable to this purchase order. The contents of
this paragraph shall be flowed down to the Seller’s suppliers at all tiers.


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The Surgical Equipment People, LLP | 192 N Seven Oaks Drive | Knoxville, TN 37922 | toll free (800) 268-5645 | tel (865) 579-6330 | fax (865) 579-6335