MEDTRONIC MINIMALLY INVASIVE THERAPIES* ( MEDTRONIC ) DIRECT POLICIES AND PROCEDURES *THESE DIRECT POLICIES AND PROCEDURES ONLY PERTAIN TO MEDTRONIC S MINIMALLY INVASIVE THERAPIES GROUP CONSISTING OF ITS SURGICAL SOLUTIONS AND PATIENT MONITORING AND RECOVERY SEGMENTS Revised 11-24-15
2 TABLE OF CONTENTS A. PRODUCT LISTING BY BUSINESS UNITS...3 B. CUSTOMER OPERATIONS, DIRECTIONS, AND CONTACT INFORMATION...4 C. BACK OFFICE OPERATIONS CONTACT INFORMATION...5 D. DEFINITIONS...6 E. ADMINISTRATIVE REQUIREMENTS...7 F. CONTRACT AND PAYMENT PROCEDURE...7 G. FREIGHT TERMS...8 H. MINIMUM ORDER TERMS...9 I. RETURNED GOODS POLICIES...9 J. DAMAGE & SHORTAGE PROCEDURE...11 K. E-BUSINESS...12 L. GENERAL PROVISIONS...14 EXHIBIT A AFFILIATE LIST...17 EXHIBIT B RETURNED GOODS POLICIES...18 EXHIBIT C RESTOCKING FEES SCHEDULE...19 EXHIBIT D GUIDING PRINCIPLES FOR E-BUSINESS...20
3 A. PRODUCT LISTING
4 B. CUSTOMER OPERATIONS DIRECTIONS AND CONTACT INFORMATION How to order electronically To implement electronic ordering, preferred method, contact the Medtronic EDI team at EDI.customerservice@Covidien.com How to order via web portal, place special orders and order inquiry, etc. Contact CovidienConnect@covidien.com or to register, log onto www.covidienconnect.com and click on Register Now. How to order, by phone, email, fax and order inquiry * Call: 800-962-9888, option 1 Email: customerservice@covidien.com Fax: 800-544-8772 How to obtain service and warranty assistance Nursing Care, Patient Care & Safety and Surgical Solutions divisions Call: 800-962-9888 option 1, option 1 Email: swm.customerservice@covidien.com Fax: 800-724-1324 Respiratory and Monitoring Solutions division Call: 800-635-5267, option 3 Email: HQTSWEB@covidien.com Fax: 800-966-4955 How to return product Call: 800-962-9888, option 1 Email: customerservice@covidien.com
C. BACK OFFICE OPERATION CONTACT INFORMATION 5 GPO CONTRACTS Nursing Care and Patient Care & Safety Email: Mansfield.GPOcontracts@Covidien.com Surgical Solutions Email: Mansfield.GPOUSSURGEBD@Covidien.com Respiratory and Monitoring Solutions Email: Mansfield.GPORespiratory@Covidien.com INDIVIDUAL CONTRACTS Nursing Care and Patient Care & Safety divisions Email: MansfieldIndividualContracts@Covidien.com Surgical Solutions division Email: Mansfield.IndividualUSSURGEBD@Covidien.com Respiratory and Monitoring Solutions division Email: Mansfield.IndividualRespiratory@Covidien.com GPO ROSTERS, MEMBERSHIPS & LOC S Email: membership.mansfield@covidien.com
D. DEFINITIONS 6 Affiliate shall mean a Medtronic division or business, or an operating Company owned by Medtronic, which operated under common control with Medtronic named on the Affiliate list attached hereto as Exhibit A. Policy Year shall mean each twelve (12) month period of this Policy, beginning on the effective date of anniversary thereof. Contract shall mean a contract (other than one arising simply out of an accepted Purchase Order) between Medtronic, or one of its affiliates, and a Customer for the purchase of Products covered by this Policy. Customer shall mean an entity, which has a Contract with Medtronic or one of its affiliates, for the purchase of Products. Contract Price shall mean the price charged to a Customer or Participants for Products under a group purchasing or individual Contract. Direct Purchase Price shall mean the amount charged to customer for Products covered on Affiliate contract or price lists. Participant shall mean a Group Customer, member or site, who is eligible to purchase Products under a Contract OR retail/non-contract price. Products shall mean any products sold by Medtronic or an Affiliate that are purchased under this Policy.
E. ADMINISTRATIVE REQUIREMENTS 7 1) Customer must pay all invoices from Medtronic within standard, cashpayment terms. 2) Customer will request all Proof of Deliveries from Medtronic within 30 days of date of sale (invoice date). 3) Customer will resolve all Medtronic additional billings for disputed items within 60 days of add-bill date. 4) Customer will provide a detailed deduction explanation for all adjustments to invoices from Medtronic. 5) Customer will submit all requests for credit within 90 days of invoice date. F. CONTRACT AND PAYMENT PROCEDURES 1) Payment Terms - Medtronic offers net 30 days, from date of invoice, payment terms. 2) All Rebates and contract payments will be calculated on purchases made directly from the Medtronic based on invoice date (ship date), not order date, and/or Customer provided sales tracings 3) Custom Products - Custom Products are intended for sale to the Customer specified on the Product label, and are made to the specifications and requirements of the individual Customer. These Products may not be sold to any other Customer without the prior written approval of the Medtronic. 4) Purchase Only from Affiliate Customer will not resell Medtronic products that were purchased under contract pricing. 5) Customer must purchase contracted Product directly from Medtronic or reseller customer duly authorized by Medtronic to resell products.
G. FREIGHT TERMS 8 Standard Product Orders Standard orders will be shipped FOB destination, freight prepaid by Medtronic preferred method including, but not limited to, common carrier, parcel or air depending on size of order, customer location and product requirements. Medtronic reserves their right to ship capital goods freight prepaid with the cost of freight added to the product invoice. Check with your Medtronic sales representative for details. Expedited Orders Expedited orders will be shipped FOB destination, freight prepaid and add, using most timely and efficient delivery option based on carriers delivery schedule to customer s location. Orders expedited at the request of the customer will incur a fee for premium service. The fee will reflect the current published rate for the designated carrier and mode of transportation, less a 20% discount. Hawaii Orders For Medtronic Nursing Care and Patient Care & Safety divisions only, Medtronic Nursing Care and Patient Care & Safety divisions will not ship directly to HI. Medtronic Nursing Care and Patient Care & Safety divisions products are available through Authorized Distributor. Note, Authorized Distributor will add appropriate mark up for freight charges from CA to HI.
H. MINIMUM ORDER AND DIRECT ORDER TERMS 9 Minimum Order Requirements - Minimum Order Requirements are outlined in the Table of Medtronic Terms below. The Minimum Order charges will be applied to any purchase order that does not satisfy the Minimum Invoice amount. These policies apply to Products purchased and consumed by Customer within the United States. TABLE OF MEDTRONIC TERMS Minimum Purchase Order and Direct Order Terms Minimum (Gross Dollars) $500 Below * Minimum Charge $90 per order Direct Order Charge 3% of product purchase price# *Medtronic affiliates will apply the $90 minimum order fee automatically on the invoice. Note, customer may not be notified in advance or at time of order entry. #Medtronic product orders that are available through distributor will be assessed a 3% direct handling charge. Some products (i.e. parts, equipment and some disposables) will not be assessed a direct handling fee. Contact your Customer Service representative or sales rep for details. I. RETURNED GOODS Subject to the following policies for returned goods and credit apply for all Affiliates: 1. All standard saleable Products may be returned for credit. Credit is issued based upon the reason for the return (see Exhibit C for credit amount). Product must be returned in original packaging with return label placed in an open area of package to receive credit. Medtronic reserves the right to refuse any return. 2. All returns must be authorized by Medtronic Customer Service or Returned Goods Department. All Product returns must be sent freight prepaid unless prior approval is granted. 3. Overstock returns must be authorized by Customer Service. Customer Service will assign a Product return authorization number once the following information is provided:
a) Reason for return; 10 b) Item number; c) Quantity of item; d) Original invoice number; e) Purchase order number; and f) Lot number, if applicable. Customer Service will forward a copy of the Product-Return Authorization to the appropriate Customer contact along with return instructions. The Product Return Number and return goods packing list must be included with all paper work. 4. Customer should not return Product per the conditions below. Credit will not be given and the Product will not be returned to the Customer: a) All Made-To-Order or Custom-Manufactured Products; b) Discontinued Products, divested Products, and Products not listed in current price lists; c) Expired Products or Products within the applicable Affiliate s required months from expiration (see Exhibit B); d) Used Products or unreported damaged Products; e) Products that are not in original packaging - standard selling unit-ofmeasure (i.e., full, unopened cases of Product); f) Products that were not purchased directly from an Affiliate; and g) Products for which no authorization to return has been given. Exceptions to Returned Goods Policies Any Customer reports of defective Product received by the Customer must be communicated to Medtronic s Customer Service Department within 24 hours, providing all information below. Medtronic will contact the Customer, investigate the problem, and notify the Customer of the outcome and any action taken. Name and address of Customer; Customer contact and phone number; Product catalog number and description;
Lot number, if applicable; 11 Nature of problem and quantity involved; and PO Number. J. DAMAGE & SHORTAGE PROCEDURES 1) To ensure appropriate credit is issued in the event goods are damaged in transit, Customer should accept all Products delivered by carrier, note visible damages on the carrier s delivery documents and contact Medtronic customer service. a) Medtronic will issue a credit and make arrangements for a replacement shipment. A Returned Goods Authorization will be issued for the damaged Product(s) only. b) Medtronic will arrange for a carrier to pick up the damaged Products(s) within a reasonable timeframe. c) Medtronic will issue credit for damaged Product(s) upon physical receipt of the damaged Product(s) at the designated distribution center subject to the following conditions: i) Damages must be reported to the Medtronic Customer Service Department within 7 calendar days of delivery. This applies to dropped trailers, live unload palletized and small package shipments, and includes damages within an over-packed corrugate. ii) Damages within full cases should be reported to Medtronic Customer Service immediately when encountered. 2) To ensure appropriate credit is issued in the event a shortage occurs in transit, Customers should accept all Products delivered by carrier, note visible shortages on the carrier s delivery documents and contact Medtronic Customer Service. a) Medtronic will make arrangements for a replacement shipment, if requested by customer. b) Medtronic will investigate shortage claims by reviewing carrier Proof of Delivery, pallet architecture (for pallet shipments) and distribution center product cycle count. c) Medtronic will issue a credit for shortages if Medtronic concludes the shortage is validated and subject to the following conditions: i) Shortages must be reported to the Medtronic Customer Service Department within 7 calendar days of delivery. This applies to dropped trailers, live unload palletized and small package shipments,
and includes shortages within an over-packed corrugate. Note Customer must sign for number of pallets received. 12 ii) Shortages within full cases should be reported to Medtronic Customer Service immediately when encountered. 3) To ensure appropriate processing (billing or return authorization) is completed in the event an overage occurs in transit, Customers should accept all Products delivered by carrier, note visible overage on the carrier s delivery document and report the overage to Medtronic Customer Service. a) Medtronic will make arrangements for a carrier to pick up the overshipped Product(s) within a reasonable timeframe. b) Medtronic will issue an invoice for over-shipped Product(s) at Customer request. c) Overages must be reported to the Medtronic Customer Service Department within 7 calendar days of delivery. This applies to dropped trailers, live unload palletized and small shipments and includes overages within an over-packed corrugate. 4) Returned Goods Authorization Numbers not utilized within 30 days are cancelled or null and void. Customer must contact Medtronic Customer Service for a new Returned Goods Authorization Number after 30 days have lapsed. K. E-BUSINESS TRANSACTIONS Current technology provides the tools to rapidly automate manual business processes and transactions throughout the health-care supply chain. Increased use of this automation will streamline product selection, purchasing, and utilization for the mutual benefit of all parties. A full statement of Medtronic s E-Business principles is included. (See Exhibit D Guiding Principles for E-Business attached.) 1) Medtronic utilizes the EDI standard HIBCC subset of the ANSI x.12 format. 2) E-Business solution is via the EDI X.12 standard. Medtronic supports transactions via Global Health Exchange (GHX). GHX offers a variety of connection solutions for our Customers.
13 Business Transaction Preferred Format Acceptable Format Availability Status Nonconformance Fee End-user Sales X.12, Direct EDI or via GHX EDI 867 Currently available None Purchase Order Purchase Order Acknowledgement X.12 Direct EDI or via GHX EDI 850 X.12 Direct EDI or via GHX EDI 855 Currently available Currently available None None Invoice X.12 Direct EDI or via GHX EDI 810 Currently available None Payment Order/Remittance Advice Advanced Ship Notice Direct from bank X.12 Direct EDI or via GHX EDI 820 EDI 856 Currently available Currently available None None Medtronic is committed to the use of electronic automation (E-Business) and is willing to comply with any of the open E-Business EDI standards. Direct customer E-business will be implemented according to the aforementioned schedule. Medtronic will not pay third party EDI testing process fees or monthly fees for EDI processing. 1. Purchase-Order (Transaction Set #850) - The electronic transmission of purchase order data using industry standard format: (HIBCC approved version of ANSI x.12). 2. Purchase-Order Acknowledgement (Transaction Set #855) - The electronic transmission of purchase-order confirmation data using industry standard format. 3. Invoicing (Transaction Set #810) - The electronic transmission of invoice information from Medtronic to the direct customer. This data will be provided in industry approved ANSI x.12 format, and will enable the direct customer to automatically match invoices to the original purchase order and receipt. 4. Funds Transfer (Transaction Set #820) - Electronic Funds Transfer provides a means for a direct customer to electronically transfer funds and remittance data Medtronic. The data would be provided in industryapproved banking standards (CTX). Medtronic can provide support for working through the necessary testing and communications with the direct customer s bank to help facilitate the setup of this transaction.
5. Additional electronic business transactions - Additional electronic business transactions supported by Medtronic are: Contract, Advance Ship Notice, Pricing, and Availability. Please contact Medtronic E-Business Group for specifics. L. GENERAL PROVISIONS 1) Medtronic Affiliates reserve the right to maintain their own policies and criteria regarding Customer purchases. Accordingly, not all Customers may be qualified to purchase all products of all Medtronic Affiliates and divisions. 2) Changes in Products - If the regulatory status of a Product (e.g., may be dispensed by prescription only ) changes, then Affiliate may delete that Product from the Product List by notice to Customer. Affiliate may discontinue or modify any Product at any time. 3) Terms - Affiliate may amend or terminate all or part of this Policy by giving a 60-day notice to the Customer. The terms of these General Provisions and any other terms hereof which expressly survive amendment or termination of this Policy. 4) Notices - Any notice given in connection with this Policy shall be sufficient if in writing and delivered by messenger or by postage prepaid mail or by facsimile to the Customer, provided that notices or communications shall be effective when received by or otherwise known to the recipient or its legal representative. The methods of delivery described above are not intended to be exclusive and any written notice actually received shall be sufficient. 4) Modification by Affiliate - Affiliate may modify Payment Terms, Table of Affiliate Specific Terms, Returned Goods Policies and any Exhibit by notice to Customer per the previous paragraph. This Policy and Procedure may be modified only by an Affiliate. The terms of any purchase order, invoice or similar document related to implement this Policy and Procedure shall not modify this Policy and shall be subject to this Policy. 5) Assignment - Neither Customer nor Affiliate may assign this Policy or any of its rights or obligations hereunder without the prior written consent of the other party provided that Customer may not unreasonably withhold condition, or delay such consent in the event of any assignment by Affiliate to an affiliated entity or any assignment which results from the change in control of any business or division of Affiliate. For purposes of this provision, assignment shall include any assignment by operation of law and any change in control of a party. 6) Relationship of Parties - The relationship of Customer to Affiliate is that of independent contractor. This Policy does not create a partnership, association or other business entity. Neither party has the right to bind the other. 14
15 7) No Third-Party Beneficiaries Unless specifically provided elsewhere herein, nothing in this Policy is intended to benefit any person or entity not a party hereto. 8) Publicity Neither Customer nor Affiliate shall permit or generate any publicity, advertising or promotion concerning this Policy without the prior written consent of the other party. 9) Force Majeure - Noncompliance with any obligation under this Policy for reasons of force majeure (such as: acts, regulations or laws of any government; war or civil commotion; destruction of Production facilities or materials; fire, earthquake or storm; labor disturbances; failure of public utilities or common carriers; and any other causes beyond the reasonable control of the party affected) shall not constitute a breach of this Policy. 10) Compliance with the Law - Both parties will comply with all applicable federal, state and local laws in connection with this Policy and the consumption of any Products hereunder by Customer. This Policy or any contract may involve a discount or other reduction in price with respect to one or more Products under 42 USC 1320A-7B 1128B(b) (3) (A) of the Social Security Act (42 USC 1320a-1128B(b)(3)(A) and regulations issued thereunder. Customer is responsible under such circumstances for accurately reporting and/or providing information on any such discounts, including rebates or reductions in price to reimbursement agencies (including Medicare and Medicaid) and other entities in accordance with all applicable laws and regulations, including, without limitation, 42 CFR 1001.952(h). Customer agrees that it shall properly disclose and appropriately reflect any discount or other reduction in price in its cost claimed under Medicare or any state health program. If the use of the Products sold hereunder require the reporting of costs on a cost report, then the benefit of any discount will be claimed in the fiscal year and Customer will fully and accurately report any such discount in the applicable cost report. 11) Trademarks and Proprietary Information a. The packaging and labeling of the Products shall contain Medtronic s trademarks and trade names. Each party s trademarks and trade names shall remain their exclusive property and nothing herein shall be construed as transferring any right, title, or interest of any kind or nature whatsoever thereto to the other party hereto. Except as specifically provided herein, neither party shall use in any way the trademarks or trade names of the other party, and will not do any act which would in any way infringe upon or be in derogation of the validity of such other party s trademarks or trade names, and will notify the other party of any conflicting claims that challenge any trademarks or trade names of such party of which it is aware.
by Medtronic and shall not divulge the same to any other person or entity without the prior permission of Medtronic. The confidentiality obligations in this Section 12 (b) shall not apply to Proprietary Information which: i. becomes public other than through the receiving party, ii. is already known to the receiving party as evidenced by its written records, iii. becomes known by the receiving party in the future from another source which is under no obligation of confidentiality to disclosing party, or iv. is subsequently developed by the receiving party in a manner which it can conclusively establish was independent of the disclosure hereunder. The obligations of Customer pursuant to the provisions of this Section v. 12 (b) shall survive termination of this Policy. 16 For purposes of this Policy, Proprietary Information shall mean all data and other information relating to Medtronic s business that could reasonably be expected to be valuable to a competitor or potential competitor or a customer for any such competitor of Medtronic, including, without limitation, any product specifications. 12) Product Incident Notification - Customer shall (i) immediately notify the applicable Medtronic Affiliate of (a) any event that might require an Affiliate to file a report or otherwise comply with any applicable law, rule, or regulation governing medical devices, (b) any Product malfunction which, were it to recur, would be likely to cause serious injury or death, or (c) any serious device effects to a patient and/or operator, and (ii) report all Product and service complaints to the applicable Affiliate, including the following information: Product model number, Product serial number (if applicable and available), nature of complaint or situation, any action taken.
17 EXHIBIT A - AFFILIATE LIST Nursing Care Patient Care & Safety Respiratory & Monitoring Solutions Surgical Solutions
18 EXHIBIT B - RETURNED GOODS POLICY AFFILIATE MONTHS PRIOR TO EXPIRATION FOR ACCEPTABLE RETURNED PRODUCT MANUFACTURING DATE IDENTIFICATION EQUIPMENT/ PRODUCTS REQUIRING SALES REPRESENTATIVE RETURN AUTHORIZATION* RETURN LOCATION 1 REDRESS/ RESTOCKING FEES Nursing Care 6 months Contained in lot number. Contact Customer Service for more information Contact your Sales Representative or call 1-800-962-9888 Will be provided by Customer Service upon receiving return authorization See Exhibit C Patient Care & Safety 6 months Stamped on Product Packaging Contact your Sales Representative or call 1-800-962-9888 Will be provided by Customer Service upon receiving return authorization See Exhibit C Respiratory & Monitoring Solutions 12 months Stamped on Product Packaging Contact your Sales Representative or call 1-800-962-9888 Will be provided by Customer Service upon receiving return authorization See Exhibit C Surgical Solutions 12 months Contained in lot # or batch # - contact Customer Service for more information Contact your Sales Representative or call 1-800-962-9888 Will be provided by Customer Service upon receiving return authorization See Exhibit C 1 Disposition or need for redress is determined by Affiliate and is deducted from the credit amount. * Permacol Surgical implant and Indermil Tissue Adhesive products are expressly prohibited from being returned for credit.
19 EXHIBIT C RESTOCKING FEE SCHEDULE Nursing Care* Patient Care & Safety Respiratory and Monitoring Solutions Surgical Solutions Defective Product Sales Representative must initiate and authorize. Invoiced price Invoiced price Invoiced price Invoiced price Medtronic error Invoiced price Invoiced price Invoiced price Invoiced price Medtronic Order error Invoiced price Invoiced price Invoiced price Invoiced price Order damaged in transit claim made within 7 days of delivery. Invoiced price Invoiced price Invoiced price Invoiced price Customer order error Invoiced price less 20% Service Charge Invoiced price less 20% Service Charge Invoiced price less 20% Service Charge Invoiced price less 20% Service Charge Refused shipment (not Medtronic error) Invoiced price less 20% Service Charge Invoiced price less 20% Service Charge Invoiced price less 20% Service Charge Invoiced price less 20% Service Charge *For equipment returns, call for schedule
EXHIBIT D 20 Medtronic s Guiding Principles for E-Business At Medtronic, meeting our Customer needs is our top priority. We are committed to making available Internet enabled purchasing services at no incremental cost to our Customers. Medtronic believes that supply chain efficiencies derived from E- Business will be reallocated over time throughout the entire supply chain. We also believe this will make product selection, purchase and utilization more efficient for all connected parties. To this end, Medtronic will allocate resources to all mutually beneficial initiatives. The following are our guiding principles: Medtronic will work with its Customers to create quantifiable savings and efficiencies in our E-Business efforts. Medtronic is committed to holding down supply chain costs and will not pay incremental fees that will result in increased supply chain costs. Medtronic will accept transactions from e-commerce companies when our Customers request it. Medtronic cannot be responsible for keeping information up-to-date on any third party or e-commerce company s websites or portals, as it will only increase the costs and inefficiencies of doing business. Medtronic does not approve, condone nor authorize transaction or pricing data to be available to any parties other than the purchaser and Affiliate(s) involved in the transaction. Medtronic will support industry data standardization efforts if they measurably benefit all constituents in the supply chain. All e-commerce messages and transactions to Medtronic must be either X12 EDI or XML.