Exhibit 10.1
THE CONFIDENTIAL PORTION OF THIS EXHIBIT, WHICH
HAVE BEEN REMOVED AND REPLACED WITH AN
ASTERISK, HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 PROMULGATED UNDER
THE SECURITIES ACT OF 1933 AND RULE 24b-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934.
SUPPLY AGREEMENT
SORIN/ELA AND GREATBATCH
2006 - 2010
Contents:
1.0 Definitions
2.0 Product Purchase and Sale
3.0 Price
4.0 Orders and Forecasts
5.0 Warranty and Limitation of Liability
6.0 Contract Term
7.0 Business Exit
8.0 Confidentiality
9.0 Force Majeure
10.0 Intellectual Property
11.0 Miscellaneous
12.0 Exhibits
A. General Conditions
B. Pricing for Batteries and Capacitors
C. Pricing for Feedthroughs and Filtered Feedthroughs
D. Pricing for Assembled Headers
E. Pricing for Cases
F. Pricing for Miscellaneous Piece Parts
G. Standard Lead Time
H. Audit Process
I. Enclosure Visual Inspection Criteria
Supply Agreement
THIS AGREEMENT is effective 31 March 2006 and is by and between GREATBATCH,
INC., a New York corporation located at 9645 Wehrle Drive, Clarence, New York,
14031, ("GB") and SORIN/ELA BIOMEDICA CRM and ELA MEDICAL SAS a company located
at 13040 Saluggia (VC), Via Crescentino, Italy ("SORIN/ELA").
RECITALS: SORIN/ELA wishes to purchase Assembled Headers, Batteries,
Capacitors, Cases, Coated Components, Feedthroughs, Filtered Feedthroughs, and
miscellaneous machined or molded piece parts (hereinafter referred to as
Products) for use in medical devices. GB agrees to manufacture and sell such
Products to SORIN/ELA and/or their Affiliates in accordance with, and subject
to, the specifications and other terms and conditions set forth in the
Agreement.
NOW, THEREFORE, GB and SORIN/ELA hereby agree as follows:
1.0 DEFINITIONS.
------------
As used in this Agreement, the following defined terms shall
have the meanings provided for in this Article 1:
1.1 "Affiliate" means:
1.1.1 "any other entity/person of which the securities or other
ownership interests representing 50% (fifty percent) or more
of the equity or 50% (fifty percent) or more of the ordinary
voting power or 50% (fifty percent)or more of the general
partnership interests are, at the time of such
determination, owned, controlled or held, directly or
indirectly, by such entity/person, or
1.1.2 any other entity/person, which at the time of such
determination, is controlling, controlled by or under common
control with, such entity/person.
1.1.3 As used herein, the term "control," whether used as a noun
or verb, refers to the possession, directly or indirectly,
of the power to direct, or cause the direction of, the
management or policies of a entity/person, whether through
the ownership of voting securities, by contract or
otherwise.
1.2 "Agreement" means this Agreement and all Exhibits hereto and any other
attachments hereto.
1.3 "Assembled Headers" means a single piece molded device header
assembly, including where the context requires all such Products
manufactured by GB and sold to SORIN/ELA under this Agreement.
1.4 "Batteries" means lithium iodine low-rate batteries, lithium silver
vanadium oxide high rate batteries, QHR silver vanadium oxide/carbon
monofluoride high rate batteries and other power sources, including
where the context requires all such Products manufactured by GB and
sold to SORIN/ELA under this Agreement.
2
1.5 "Big Four CPA Firm" means Ernst & Young, Deloitte & Touche,
PricewaterhouseCoopers and KPMG.
1.6 "Capacitors" means wet tantalum high voltage electrical capacitors,
including where the context requires all such Products manufactured by
GB and sold to SORIN/ELA under this Agreement.
1.7 "Cases" means drawn titanium or stainless steel
enclosures used in a medical device, including where the context
requires all such Products manufactured by GB and sold to
SORIN/ELA under this Agreement.
1.8 "Change of Control" means the occurrence of any of the following
events:
1.8.1 The acquisition by any person of beneficial ownership,
directly or indirectly, of securities of GB representing
fifty percent (50%) or more of the total voting power
represented by GB's then outstanding voting securities;
1.8.2 A change in the composition of the Board of Directors of GB
occurring within a one-year period, as a result of which
fewer than a majority of the directors are Incumbent
Directors. "Incumbent Directors" shall mean directors who
either (i) are directors of GB as of the date hereof, or
(ii) are elected, or nominated for election, to the Board of
Directors of GB with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such
election or nomination (but shall not include an individual
not otherwise an Incumbent Director whose election or
nomination is in connection with an actual or threatened
proxy contest relating to the election of directors to GB);
1.8.3 A merger or consolidation of GB with any other corporation,
other than a merger or consolidation which would result in
the voting securities of GB outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) at least fifty percent (50%) of the
total voting power represented by the voting securities of
GB or such surviving entity outstanding immediately after
such merger or consolidation, or the approval by the
stockholders of GB of a plan of complete liquidation of GB
or of an agreement for the sale or disposition by GB of all
or substantially all GB's assets;
1.8.4 The sale or transfer of all or substantially all of the
assets of GB relating to the manufacture of any Product; or
1.8.5 The complete liquidation or dissolution of GB.
3
1.9 "Coated Component" means low polarization electrode
coatings, including where the context requires all such Products
manufactured by GB and sold to SORIN/ELA under this Agreement.
1.10 "Confidential Information" means know-how, trade secrets, and
unpublished information disclosed (whether before or during the term
of this Agreement) by one of the parties (the "disclosing party") to
the other party (the "receiving party"), and which is marked as
proprietary or confidential as provided below.
All Confidential Information disclosed by one party to the other
under this Agreement shall be in writing and bear a legend
"Proprietary," "Confidential" or words of similar import or, if
disclosed in any manner other than writing, shall be followed by
confirmation that such information is confidential by the disclosing
party within*. The following information communicated to GB by
SORIN/ELA shall be considered Confidential Information of SORIN/ELA
for purposes of, and subject to, Article 8 and the other provisions
of this Agreement whether or not marked "Proprietary" or
"Confidential":
1.10.1 Specifications;
1.10.2 Information regarding circuitry design or mechanical
design;
1.10.3 Information regarding product or component
qualification or verification; and
The following information communicated to SORIN/ELA by GB shall be
considered Confidential Information of GB for purposes of, and subject to,
Article 8 and the other provisions of this Agreement whether or not marked
"Proprietary" or "Confidential":
1.10.4 information regarding delivery or production
schedules;
1.10.5 information regarding GB delivery and production
schedules or production capacity;
1.10.6 information regarding GB product or component
qualification or verification;
1.10.7 information related to GB manufacturing processes;
1.10.8 information related to Product technology including
GB designs and materials used for components and
assemblies; and
1.10.9 information related to Product pricing.
1.11 "Contract Year" means each calendar year during the Term, provided
that for clarification the initial Contract Year shall mean 2006.
1.12 "Effective Date" means the date this Agreement is signed by the
parties hereto.
1.13 "Feedthrough" means a subassembly consisting of: (a) an outer
electrically conductive member (usually referred to as a flange or
ferrule), (b) an inner electrically conductive member or members
(usually represented as a metallic wire or pin, or multiple wires or
pins), and (c) a nonconductive material fused or brazed between the
inner and outer members (usually a glass or ceramic material) such
that
4
they are electrically insulated and hermetically sealed; including
where the context requires all such Products manufactured by Seller
and sold to Buyer under this Agreement.
1.14 "Filtered Feedthrough" means an assembly consisting of:
(a) Feedthrough and (b) feedthrough type capacitor composed of ground
electrodes interleaved with conductive active electrodes, one for
each active feedthrough pin; including where the context requires all
such Products manufactured by Seller and sold to Buyer under this
Agreement.
1.15 "Force Majeure" is defined in Article 9.
1.16 "Intellectual Property" means U.S. and foreign Patent Rights,
trademarks, service marks and registrations thereof and applications
therefore, copyrights and copyright registrations and applications,
mask works and registrations thereof, Know-How, trade secrets,
Inventions, discoveries, ideas, technology, data, information,
processes, drawings, designs, licenses, computer programs and
software, and technical information including but not limited to
information embodied in material specifications, processing
instructions, equipment specifications, product specifications,
confidential data, electronic files, research notebooks, invention
disclosures, research and development reports and the like related
thereto, all amendments, modifications, and improvements to any of
the foregoing.
1.17 "Miscellaneous Piece Parts" means machined and molded components used
in the manufacturing of implantable medical devices, including, but
not limited to,* and such items including where the context requires
all such Products manufactured by GB and sold to SORIN/ELA under this
Agreement.
1.18 "Product" means Assembled Headers, Batteries, Capacitors, Cases,
Coated Components, Feedthroughs, Filtered Feedthroughs, and
miscellaneous piece parts, in each case identified on Exhibits B, C,
D, E and F, as modified from time to time by mutual written
agreement.
1.19 "Qualification" means Product performance testing conducted according
to an approved and controlled protocol to ensure that the Products
meet Specifications. Products used to perform the qualification must
be manufactured using validated equipment and processes per GB
procedures.
1.20 "SORIN/ELA" means SORIN BIOMEDICA CRM and ELA MEDICAL SAS and their
Affiliates.
1.21 "Specifications" means (i) with respect to Products listed on
Exhibits B, C, D, E and F as of the date hereof, all applicable
requirements and protocols provided to GB by SORIN/ELA prior to the
date of this Agreement as provided hereunder, and approved by GB in
writing, relative to the design, physical characteristics, function,
performance, manufacture, packaging and quality of such Products, in
each case as modified by Article 2.2. To the extent not superseded by
the foregoing, Specifications will also include all specifications
and protocols applicable to the Products published by GB.
5
1.22 "Term" means the period of time this Agreement is in effect as
provided for in Article 6.1.
1.23 "GB" means Greatbatch, Inc. and its Affiliates.
2.0 PRODUCT PURCHASE AND SALE.
-------------------------
2.1 Manufacture and Supply. GB shall supply Products to SORIN/ELA in the
quantities ordered by SORIN/ELA from time to time and in accordance
with the Specifications agreed to by the parties and with the
schedules for deliveries thereof established pursuant to this
Agreement
2.2 Specifications. All Products supplied by GB to SORIN/ELA shall be in
accordance with the Specifications and supplied after Qualification
thereof. Any changes to Specifications for Products to be sold under
this Agreement shall be agreed upon by both parties in writing.
2.3 Quality Control. GB agrees to follow strict quality control standards
with respect to the production and transport of Products sold under
this Agreement and consistent in all material respects with the
standard of care and science applicable at the time of delivery.
SORIN/ELA agrees to follow strict quality control standards with
respect to the storage, preservation and use of Products purchased
under this Agreement and consistent in all material respects with such
guidelines as GB may from time to time deliver to SORIN/ELA.
2.4 GB / SORIN/ELA Supply Agreement and Extension. SORIN/ELA and GB desire
to terminate (i) the original Purchase Agreement between GBL and Ela
Medical S.A. signed on or about November 17, 2000 by ELA Medical; and
(ii) the Supply Agreement Pricing Amendment, signed on or about
November 16, 2001 (the "Current Supply Agreement") by Sorin and Ela,
and the Supply Agreement Extension executed on or about 19 January
2006, which is superseded by this Agreement; provided, however, that
any financial and other obligations owing by one party to the other,
and any such obligations which, by their terms survive termination of
these Agreements, shall not be terminated by virtue of this Article
2.4.
2.5 Standard Forms Not Applicable. The general terms and conditions of
sale for Products sold by GB to SORIN/ELA hereunder are exclusively
set forth in this Agreement. The parties expressly agree that none of
the terms and conditions of any written or electronic standard or
other preprinted forms used by either GB or the SORIN/ELA in
effectuating the purchase and sale transactions contemplated by this
Agreement (including, but not limited to, purchase orders,
acknowledgements and acceptance forms, invoices, labels and shipping
documents) which are inconsistent with, or in addition to, those
contained in this Agreement shall have any force or effect.
2.6 *: SORIN/ELA will provide GB the* SORIN/ELA with*.
3.0 PRICE.
-----
3.1 Pricing. The initial prices for Products are set forth on Exhibits B,
C, D, E and F.
6
3.2 *
3.3 Payment Terms. Payment terms are net* from date of invoice and terms
are* or the location of such other* facility that manufactures the
Product ("FCA" per INCOTERMS 2000). Remittances are to be made per the
following:
Please direct all Wire Transfer Payments to:
-------------------------------------------
Account Name: *
Account Number: *
ABA: *
Bank Name: *
Swift Code (if needed): *
3.4 Price Adjustments for Significant Cost Impact. The price for any
product may be adjusted up or down during the term of this agreement,
by mutual consent, if there is significant impact to the final cost of
the Product:
3.4.1 In the case of * the price of any Product is subject
to *modification from time to time due to *. The
reference price of * will be based upon the *
3.4.1.1 *shall be executed (reflecting revised SORIN/ELA
pricing) on an agreed upon volume and timing basis.
Specifically, GB agrees to *with SORIN/ELA's formal
agreement on pricing, volume, and delivery
requirements.
3.4.1.2 The cost of * used as the basis to establish pricing
in Exhibit C of this Agreement was *.
3.4.2 In the case of *, the price of any Product is subject
*modification from time to time due to *. The
reference price of * will be based upon the * as
reported by the * The cost of * used as the basis to
establish pricing in Exhibits E, F and G of this
Agreement was *
3.4.3 In the case of *, the price of any Product is subject
to *modification from time to time due to *. The
reference price of *will be based upon the "*" as
reported by the *. The cost of *used as the basis to
establish pricing in Exhibits E, F and G of this
Agreement was *.
3.4.4 If GB determines that a price *under this Article is
required or permissible, GB shall deliver written
notice to SORIN/ELA setting forth the basis for such
determination. The new price(s) shall be in effect *
of GB's notification to SORIN/ELA.
3.5 Price Adjustments for *.
3.5.1 The price for a Product from time to time as set
forth on Exhibits B, C, D, E and F is subject to *
modification in the event that a redesign of a
Product results in *of the Product.
3.5.2 If SORIN/ELA determines that it is necessary or
desirable to make a change to the applicable
Specifications for any Product, then SORIN/ELA will
so notify GB in writing. GB will respond to SORIN/ELA
in writing as soon as practicable, but in no event
later than *, after the date of any such notice,
7
specifying (i) GB's suggestions, if any, for
modifying SORIN/ELA'S Specifications change; (ii) the
lead time necessary to implement such change; and
(iii) the amount and nature of any *, if any,
estimated to result from implementing such change.
The parties agree to negotiate in good faith after
delivery of such notice with respect to an adjustment
to the Specifications *. If the Specification changes
requested by SORIN/ELA for a Product are agreed to by
GB, SORIN/ELA will be responsible for all finished
product, WIP raw components, and any non-cancelable
purchase orders outstanding with GB's suppliers
*requirements for the Product (as listed in Exhibit
G), that do not meet the revised Specifications.
3.6 Non-Recurring Charges. GB and SORIN/ELA agree to *, for Products that
are developed by GB for SORIN/ELA, including, but not limited to,
Products included in this Agreement in Exhibits B, C, D, E and F.
3.7 U.S. Funds. All amounts referenced in or to be paid under this
Agreement shall be in U.S. funds.
3.8 *. During the Term of the Agreement, GB and SORIN/ELA agree to explore
the opportunity for GB to *.
4.0 ORDERS AND FORECASTS.
--------------------
4.1 Firm Purchase Orders for Products and Forecasts.
4.1.1 By *of each Contract Year, SORIN/ELA shall provide GB
with a non-binding *forecast indicating SORIN/ELA'S
forecasted purchases of Products from GB for the next
Contract Year. The forecast for the months remaining
in 2006 shall be provided within *of the effective
date of this Agreement. The forecast shall be used
for purposes of facilitating each party's planning
and in order to meet the lead times required by
certain of GB's suppliers. Such forecasts are not
legally binding in any manner and may be revised from
time to time by SORIN/ELA, as it deems appropriate,
by providing notice to GB.
4.1.2 By the *day of every month, SORIN/ELA will submit to
GB in writing the following information:
4.1.2.1 A rolling *forecast of anticipated needs. Such
forecast shall not be binding on SORIN/ELA or GB.
Only a firm purchase order that is accepted by GB
shall create a binding commitment.
4.1.2.2 A firm purchase order for each of the immediately
following *
4.1.3 Upon completion of any Specifications for and
Qualification of new models of Products by the
parties, SORIN/ELA agrees to provide GB with an
8
initial *forecast indicating SORIN/ELA'S forecast
purchases of Products from GB during that period *
4.1.4 All Firm Purchase Orders shall set forth at a
minimum: (i) an identification of Products ordered,
(ii) quantities ordered, (iii) proposed delivery
dates, and (iv) shipping instructions.
4.1.5 Items
4.1.5.1 GB shall cause Products to be delivered to
SORIN/ELA'S facilities per SORIN/ELA'S delivery
instructions;
4.1.5.2 unless SORIN/ELA gives GB written instructions as to
the method of shipment and carrier, GB shall select
the methods of shipment and the carrier for the
respective purchase order, and GB shall prepay
transportation and similar charges upon shipment
(which payments shall be added to the invoice); and
4.1.5.3 title to all Products conforming to SORIN/ELA'S
purchase order shall pass, free and clear of all
encumbrances, at the FCA shipping point, which shall
be *, and SORIN/ELA assumes and agrees to bear all
risk of damage or loss to the goods after delivery by
GB to the carrier at the FCA shipping point, and
SORIN/ELA hereby releases GB from any and all claims
and liability with respect to any such in-transit
damages or losses to the goods. SORIN/ELA shall also
be responsible for securing insurance coverage to
cover shipments and deliveries thereunder.
4.2 Modification of Orders. No Firm Purchase Order by SORIN/ELA
shall be modified or canceled except upon the written mutual
agreement of the parties. Mutually agreed change orders
shall be subject to all provisions of this Agreement,
whether or not the change order so states. Notwithstanding
the foregoing, *.
4.3 Order Limitations. In the event that:
4.3.1 Firm Purchase Orders placed by SORIN/ELA for any
Product(s) for delivery within any *for such Product
ordered by SORIN/ELA under the most recent prior
period of *of SORIN/ELA Firm Purchase Orders by more
than *, and
4.3.2 The Firm Purchase Orders *then GB shall not be
obligated to supply any such excess above such *,
however, GB shall use all reasonable commercial
efforts to supply amounts requested for delivery
which are in excess of such overage, it being
understood that in the supply of any such excess
beyond the permitted overage GB may take into account
delivery commitments to other customers.
4.3.3 Should such order increases by SORIN/ELA result in *
due to the need by *the right to make *for the
product volume that * to account for *, not
withstanding the terms of Articles 3.3 and 3.4.
9
4.4 Failure to Ship. Subject to Article 6.3 of this Agreement, if GB fails
for any reason, other than Force Majeure or breach of this Agreement
by SORIN/ELA, to ship to SORIN/ELA *of Products meeting SORIN/ELA'S *
(as contemplated by Articles 4.1, 4.2 and 4.3), GB agrees to provide
SORIN/ELA with *.
4.5 Standard Lead Time. Standard lead-time for the Products is listed in
Exhibit G. GB will notify SORIN/ELA, in writing, of any changes to
these standard lead times. In the event that SORIN/ELA cancels a firm
purchase order inside agreed upon lead-time, SORIN/ELA *. SORIN/ELA
will also be responsible for *. In the event that SORIN/ELA cancels a
firm purchase order outside of agreed upon lead-time, SORIN/ELA and GB
*.
4.6 Testing and Inspection.
4.6.1 GB shall perform testing to ensure that Products delivered
to SORIN/ELA meet all applicable Specifications. SORIN/ELA
inspection of incoming Products will rely upon GB testing
and may consist of an examination of GB's testing
documentation as well as independent testing by SORIN/ELA.
4.6.2 SORIN/ELA shall conduct any incoming inspection tests not
later than * from the date of * Products. Products not
rejected by SORIN/ELA by written notice to GB within such
period shall be deemed accepted.
4.6.2.1 In the event of any shortage, damage or discrepancy in or
to a shipment of Products or in the event any Products fail
to comply with the then current specifications for
Products, SORIN/ELA shall promptly report the same to GB
and furnish such written evidence or other documentation as
GB reasonably may deem appropriate.
4.6.2.2 If evidence indicates that such shortage, damage or
discrepancy or nonconformity with specifications existed at
the time of delivery of the Products at the FCA shipping
point, SORIN/ELA may return the Products to GB at GB's
expense, and at SORIN/ELA'S request, GB shall promptly
deliver substitute Products to SORIN/ELA in accordance with
delivery procedures set forth herein
4.6.2.3 Prior to returning any Product to GB, SORIN/ELA will first
contact its GB customer service representative and obtain a
return material authorization (RMA) number. SORIN/ELA will
only return the items and quantities approved through the
RMA.
4.6.3 If GB determines that it is necessary or desirable to make
any change affecting the form, fit, function, or
performance of any Product, GB will immediately notify
SORIN/ELA in writing. GB shall not implement any such
change without SORIN/ELA'S prior consent.
10
5.0 WARRANTY AND LIMITATION OF LIABILITY.
------------------------------------
5.1 Warranty. GB warrants to SORIN/ELA that Products sold by GB to
SORIN/ELA under this Agreement shall be in conformance with applicable
Specifications and shall be free from defects in material and
workmanship at the time of delivery of said Products.
5.2 Limited Warranty. THE WARRANTIES SET FORTH ABOVE ARE IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED AND
EXCLUDED BY GB, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, OF FITNESS FOR A PARTICULAR PURPOSE OR USE OR OF
NONINFRINGEMENT.
5.3 Remedies for Breach of Warranty. In the event that any Product
manufactured or sold by GB to SORIN/ELA under this Agreement fails to
comply with the limited warranty provided for in this Article 5 and
SORIN/ELA delivers notice of such noncompliance to GB, within * of the
delivery of such Product to SORIN/ELA, GB will, upon substantiation
that the Product has been stored, preserved and used in accordance
with Article 2.3, correct such failure by suitable repair or
replacement at its own expense. GB agrees that it will promptly inform
SORIN/ELA in writing of any actual or potential problems of which GB
becomes aware relating to the performance of any Product design
manufactured for SORIN/ELA relative to the specifications for such
design.
5.4 LIMITATION OF LIABILITY. THE REPAIR OR REPLACEMENT OF ANY EFFECTIVE
PRODUCT OR ANY PRODUCT WHICH DOES NOT CONFORM WITH APPLICABLE
SPECIFICATIONS AS PROVIDED FOR HEREIN, IN THE MANNER PROVIDED ABOVE,
SHALL CONSTITUTE THE FULL EXTENT OF GB'S LIABILITY TO SORIN/ELA WITH
RESPECT TO PRODUCTS SOLD HEREUNDER. IN NO EVENT SHALL GB BE LIABLE
UNDER THIS AGREEMENT FOR INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES,
INCLUDING, BUT NOT LIMITED TO, LOSS OF SALES, PROFITS OR REVENUES OR
COSTS OF ANY PARTIAL OR TOTAL RECALL OF DEVICES IN WHICH PRODUCTS MAY
HAVE BEEN INCORPORATED, AND IN NO EVENT SHALL GB BE LIABLE IN AN
AMOUNT IN EXCESS OF ITS PRODUCT LIABILITY INSURANCE AS PROVIDED FOR
UNDER ARTICLE 5.6.1. THE PROVISIONS OF THIS ARTICLE 5 SHALL SURVIVE
THE EXPIRATION OR TERMINATION OF THIS AGREEMENT.
5.5 Quality Management
5.5.1 Quality Management System. GB has established and maintains
a certified Quality Management System in accordance with
ISO 9001-2000 and other relevant quality management
standards and legal provisions applicable to its business.
GB represents and warrants that the actual production of
the Product takes place under such Quality Management
System. GB and SORIN/ELA acknowledge and agree that GB is
not subject to *or *.
11
5.5.2 Audits and Inspections. SORIN/ELA shall have reasonable
access to the portion of GB's premises in which Products
are manufactured for SORIN/ELA, and its relevant
documentation, during regular business hours in order to
verify that the production and inspection of the Products
occur and occurred under application of all relevant
provisions of GB's certified Quality Management System and
in compliance with the Product Specification. GB will also
fully support and permit any inspection or audit by any
conformity assessment body, which is legally entitled to
inspect or audit SORIN/ELA, as the legal manufacturer of a
medical device (which includes a Product), and GB, as the
manufacturer of such Product.
5.5.3 Compliance Inspection. GB shall inspect and test Products
prior to delivery to SORIN/ELA to ensure compliance with
the Product Specification.
5.5.4 Traceability. In accordance with the relevant quality
standards and internal GB procedures, traceability of
critical or major components, processes, manufacturing and
release inspection results will be maintained by GB, per GB
documentation retention standards, to the individual
Product identified by serial or lot number.
5.5.5 Compliance Notification. It is SORIN/ELA'S sole
responsibility to file Medical Device Reports or Vigilance
Reports to any legal authority for the medical devices
which contain a Product in order to comply with the
applicable laws and regulations.
5.5.6 Survival. The provisions of this Article 5.5 shall survive
the termination of the Agreement.
5.6 Product Liability Insurance.
5.6.1 GB shall procure and maintain product liability insurance
in such amounts as ordinary good business practice for its
type of business would make advisable and shall provide
SORIN/ELA with evidence of this coverage; provided,
however, that in no case shall the limits of such coverage
be less than the following (but subject to any deductible
or self-insured retention (SIR) which shall not exceed *):
5.6.1.1 Bodily Injury:
o* Each Occurrence
o* General Aggregate
12
5.6.1.2 Property Damage:
o* Each Occurrence
o* General Aggregate
GB shall provide SORIN/ELA with an insurance certificate on or
before January 30th of each year concerning the year started
specifying the amounts stated in this article including the SIR.
5.6.2 SORIN/ELA shall procure and maintain product
liability insurance in such amounts as ordinary good
business practice for its type of business would
make advisable and shall provide GB with evidence of
this coverage; provided, however, that in no case
shall the limits of such coverage be less than the
following (but subject to any deductible or
self-insured retention (SIR) which shall not
exceed *):
5.6.2.1 Bodily Injury:
o* Each Occurrence
o* General Aggregate
5.6.2.2 Property Damage:
o* Each Occurrence
o* General Aggregate
SORIN/ELA shall provide GB with an insurance certificate on or
before January 30th of each year concerning the year started
specifying the amounts stated in this article including the SIR.
5.7 Indemnification.
5.7.1 SORIN/ELA hereby agrees to indemnify, defend and hold GB,
its Affiliates and each of their officers, directors and
employees harmless from any damage, costs or liabilities,
including, without limitation, any reasonable costs or
legal fees thereby incurred by GB and payable to third
parties (collectively, "damages") arising out of any claim
to the extent that such claim arises from or results out of
the marketing, distribution or sale of medical devices by
SORIN/ELA which contain a Product, including, without
limitation:
5.7.1.1 personal injury or death resulting from the use of a
medical device containing a Product;
5.7.1.2 alleged defects of the medical devices containing a
Product; and
13
5.7.1.3 any breach by SORIN/ELA of its covenants contained in
this Agreement.
unless the damage is solely caused by GB's negligence, wilful
misconduct or breach of this AGREEMENT.
5.7.2 Indemnification Procedure. GB shall give SORIN/ELA written
notice of any claim *of its first knowledge thereof.
6.0 CONTRACT TERM
-------------
6.1 This Agreement shall commence on the Effective Date and have an
initial term ending on December 31, 2010 ("Initial Term"). Pricing set
forth in Exhibits B, C, D, E and F is in effect as of the Effective
Date. This Agreement may be extended for renewal terms, the length of
which to be set by mutual written agreement. In that regard, unless
either party gives notice of termination not less than * prior to the
expiration of the Initial Term or any such renewal term, the parties
will meet prior to each such expiration to negotiate price or other
changes to this Agreement. Unless the parties mutually agree in
writing, however, this Agreement shall not be extended and shall
expire by its terms at the end of the Initial Term or any such renewal
term.
6.2 Termination. Notwithstanding the provisions of Article 6.1 above, this
Agreement may be terminated in accordance with the following
provisions:
6.2.1 A party may terminate this Agreement by giving notice in
writing to the other party in the event the other party is
in breach of any material representation, warranty or
covenant of this Agreement and shall have failed to cure
such breach within * of receipt of written notice thereof
from the first party;
6.2.2 A party may terminate this Agreement at any time by giving
notice in writing to the other party, which notice shall be
effective upon dispatch, should the other party file a
petition of any type as to its bankruptcy, be declared
bankrupt, become insolvent, make an assignment for the
benefit of creditors, go into liquidation or receivership;
or
6.2.3 A party may terminate this Agreement by giving notice in
writing to the other party should an event of Force Majeure
continue for more than *as provided in Article 9.1 below.
6.3 Rights and Obligations on Termination. Termination of this Agreement
shall not release either party from the obligation to make payment of
all amounts previously due and payable, or which become due and
payable due to termination of this Agreement. In addition,
6.3.1 In the event of early termination by SORIN/ELA, GB will *
all Products up to the date the termination letter is
received by GB.
14
SORIN/ELA will * to SORIN/ELA Product unless such
termination was pursuant to Article 6.2.1 and such
termination was due to a fundamental failure of GB to
perform its obligation under this Agreement after notice
thereof.
6.3.2 Upon expiration or termination of this Agreement for any
reason whatsoever or if SORIN/ELA changes the model mix of,
or discontinues, any Products which it requires, resulting
in the cancellation of firm purchase orders inside the
standard lead times, SORIN/ELA*. SORIN/ELA will *. In the
event that SORIN/ELA cancels a firm purchase order outside
of agreed upon lead-time, SORIN/ELA and GB *.
7.0 BUSINESS EXIT
-------------
7.1 GB must give SORIN/ELA *of any intent to discontinue supply of any
Product to SORIN/ELA ("Article 7.0 Notice"), but GB *. If GB so
informs SORIN/ELA of its intent to discontinue, SORIN/ELA shall have
the right to * as set forth by GB in the Article7.0 Notice, which will
be fulfilled by GB provided that (i) units of Product covered by
*shall, for any Product, *the number of units of such Product
delivered to SORIN/ELA in the *the date of this Article 7.0 Notice;
and (ii) GB may deliver Product *.
8.0 CONFIDENTIALITY.
---------------
8.1 Confidential Information. The receiving party agrees to maintain the
confidentiality of the Confidential Information of the disclosing
party and agrees not to disclose or use (except as permitted or
required for performance by the receiving party of its rights or
duties hereunder) any Confidential Information of the disclosing
party; provided, however, that a party shall not be so restricted from
using or disclosing any information (that otherwise is covered under
the Confidential Information) that:
8.1.1 was already in the possession of the receiving party prior
to its receipt from the disclosing party (provided that the
receiving party is able to provide the disclosing party
with reasonable documentary proof thereof);
8.1.2 is or becomes part of the public domain by reason of acts
not attributable to the receiving party;
8.1.3 is or becomes available to the receiving party from a
source other than the disclosing party which source, to the
best of the receiving party's knowledge, has rightfully
obtained such information and has no obligation of
nondisclosure or confidentiality to the disclosing party
with respect thereto;
15
8.1.4 is made available by the disclosing party to a third party
unaffiliated with the disclosing party on an unrestricted
basis;
8.1.5 is independently developed by the receiving part
completely without reference to any Confidential
Information of the disclosing party, as evidenced by the
receiving party's written records; or
8.1.6 has been or must be publicly disclosed by reason of legal,
accounting or regulatory requirements beyond the reasonable
control, and despite the reasonable efforts, of the
receiving party.
The receiving party further agrees to take appropriate measures to prevent any
such prohibited disclosure by its and its subsidiaries' present and future
employees, officers, agents and consultants.
8.2 Public Statements. Notwithstanding anything to the contrary contained
in this Agreement, neither party may initiate or make any public
announcement or other disclosure concerning the terms and conditions
or the subject matter of this agreement to any third party without the
prior written approval of the other party except as may be required by
law. In those circumstances where either party believes that any such
disclosure is required by law, it shall (a) notify the other party on
a timely basis in advance and (b) use its best efforts to seek
confidential treatment of the material provisions of this agreement,
to the greatest extent permitted by law.
9.0 FORCE MAJEURE.
-------------
9.1 "Force Majeure" shall mean storm, earthquake, embargoes, and acts of
God, war and/or public enemy that prevents in whole or in material
part the performance by one of the parties of its obligations
hereunder.
9.2 Upon giving notice to the other party, a party affected by an event of
Force Majeure shall be released without any liability on its part from
the performance of its obligations under this Agreement, except for
the obligations under Article 3 hereof and to pay any amounts due and
owing hereunder, but only to the extent and only for the period that
its performance of such obligations is prevented by the event of Force
Majeure.
9.3 During the period that the performance by one of the parties of its
obligations under this Agreement has been suspended by reason of an
event of Force Majeure, the other party may likewise suspend the
performance of all or part of its obligations hereunder to the extent
that such suspension is commercially reasonable.
10.0 INTELLECTUAL PROPERTY.
---------------------
10.1 Ownership of Product Technology.
16
10.1.1 All Product Technology is the sole property of GB. Nothing
in this Agreement shall give SORIN/ELA any license, claim,
right, title or interest in GB's Technology.
10.1.2 Any and all inventions, additions and/or improvements
relating to the Products, their use in implantable medical
devices or in respect of the Product Technology developed,
conceived, or invented solely by GB during the term of this
Agreement shall be the sole property of GB.
10.1.3 Any and all inventions, additions and/or improvements
relating to the Products, their use in implantable medical
devices or in respect of the Product Technology developed,
conceived, or invented solely by SORIN/ELA during the term
of this Agreement shall be the sole property of SORIN/ELA.
10.1.4 Any and all inventions, additions and/or improvements
relating to the Products, their use in implantable medical
devices or in respect of the Product Technology developed,
conceived, or invented jointly by GB and SORIN/ELA during
the term of this Agreement shall be *For purposes hereof,
the sole standard for establishing whether or not any
inventions, additions and/or improvements relating to the
Products *will be that, if the all inventions, additions
and/or improvements relating to the Products in question *.
10.1.5 *. However, SORIN/ELA is required to * regarding the
Products should SORIN/ELA *.
10.1.6 *shall be subject to all of the terms and conditions of
this Agreement.
11.0 MISCELLANEOUS.
-------------
11.1 Governing Law. This Agreement shall be interpreted, construed and
governed by and in accordance with the laws of the State of New York.
The parties expressly agree that the United Nations Convention on the
International Sale of Goods shall not apply to this Agreement on any
transaction pursuant hereto.
11.2 Assignment. Either party may assign this agreement to an entity that
acquires, directly or indirectly, substantially all of the assets or
merges with it. Except as set forth herein, neither this Agreement nor
any rights here under, in whole or in part, shall be assignable or
otherwise transferable by either party without the express written
consent of the other party. Subject to the above, this Agreement shall
be binding upon and inure to the benefit of the successors and assigns
to the parties here to.
17
11.3 Integration. This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all
previous agreements or proposals, oral or written, and all
negotiations, conversations or discussions heretofore had between the
parties related to the subject matter of this Agreement, but excluding
any confidentiality agreements between the parties or their Affiliates
which shall remain in full force and effect.
11.4 Survival. All of the representations, warranties, and indemnifications
made in this Agreement, and all terms and provisions hereof intended
to be observed and performed by the parties after the termination
hereof, shall survive such termination and continue thereafter in full
force and effect, subject to applicable statute of limitations.
11.5 Amendment; Waiver. This Agreement may not be released, discharged,
abandoned, changed or modified in any manner, except by an instrument
in writing signed on behalf of each of the parties to this Agreement
by their duly authorized representatives. The failure of either party
to enforce at any time any of the provisions of this Agreement shall
in no way be construed to be a waiver of any such provision, nor in
any way to affect the validity of this Agreement or any part of it or
the right of either party after any such failure to enforce each and
every such provision. No waiver of any breach of this Agreement shall
be held to be a waiver of any other or subsequent breach.
11.6 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement, and become a binding agreement when one or more
counterparts have been signed by each party and delivered to the other
party.
11.7 Headings. The titles and headings to Articles herein are inserted for
the convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. This
Agreement shall be construed without regard to any presumption or
other rule requiring construction hereof against the party causing
this Agreement to be drafted. All references to Articles, Articles and
Exhibits shall mean Articles and Sections of, and Exhibits to, this
Agreement.
11.8 No Third Party Beneficiaries. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties to
this Agreement and their Affiliates, or their respective successors or
assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
18
11.9 Notices. Any notice or other communication hereunder must be given in
writing and either (a) delivered in person, (b) transmitted by telex,
facsimile or telecopy mechanism, provided that any notice so given is
also mailed as provided in clause (c), or (c) mailed, postage
prepaid, receipt requested as follows:
If to GB: If to SORIN/ELA:
9645 Wehrle Drive 13040 Saluggia (VC)
Clarence, New York 14031 Via Crescentino, Italy
Facsimile: 716.759.5664 Facsimile: 39.0161.487874
Attention: President Attention: President
CC: Legal Department
or to such other address or to such other person as either party
shall have last designated by such notice to the other party. Each
such notice or other communication shall be effective (i) if given by
telecommunication, when transmitted to the applicable number so
specified in (or pursuant to) this Article 11.9 and an appropriate
receipt is received, (ii) if given by mail, three (3) days after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other means,
when actually received at such address.
11.10 Severability. If any provision of this Agreement is held invalid by a
court of competent jurisdiction, the remaining provisions shall
nonetheless be enforceable according to their terms. Further, if any
provision is held to be overbroad as written, such provision shall be
deemed amended to narrow its application to the extent necessary to
make the provision enforceable according to applicable law and shall
be enforced as amended.
11.11 Confidentiality. The parties agree that a violation of the
confidentiality covenants set forth in Article 8 of the Agreement
will cause damages to the other party that are significant, material
and difficult or impossible to adequately measure and the injured
party will be entitled to seek and obtain injunctive relief
compelling compliance in terms of this Agreement.
11.12 Arbitration. Except as set forth in Article 11.11 above, all disputes
and controversies arising out of or relating to this Agreement or any
of the other documents to be delivered hereunder, or the performance,
breach, validity, interpretation or enforcement thereof, will be
resolved by binding arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association (the
"Rules"), and judgement upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. A party may
initiate arbitration by sending written notice of its intention to
arbitrate the other parties and to the AAA office located in * (the
"Arbitration Notice"). The Arbitration Notice will contain a
description of the dispute and the remedy sought. The arbitration
will be conducted at the offices of the AAA in *before three
independent and impartial arbitrators experienced in legal matters
related to the medical device industry.
19
Each party will be entitled to select one arbitrator, and the two (2)
individuals so selected will select the third arbitrator. In no event
may the demand for arbitration be made after the date when
institutions of a legal or equitable proceeding based on such claim,
dispute or other matter in question would be barred by New York law.
The Arbitrators will deliver their decision in writing, together with
the summary of the reasons for their decision, including citations to
legal authority to the extent appropriate. The decision of the
arbitrators will be final and binding on both parties and their
successors and permitted assignees. The parties intend that this
agreement to arbitrate be irrevocable. The parties agree that,
notwithstanding anything to the contrary in this Article 11.12, any
award made by the arbitrators will be consistent with the terms of
the Agreement and that any award will be restricted to a remedy that
would be available to a party under this Agreement.
20
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their authorized representatives.
SORIN/ELA BIOMEDICA CRM GREATBATCH, INC.
By: By:
--------------------------- ---------------------------------
Title: Title:
------------------------ ------------------------------
Date: Date:
------------------------ ------------------------------
ELA MEDICAL SAS
By:
---------------------------
Title:
------------------------
Date:
------------------------
21
EXHIBIT A
GENERAL CONDITIONS
1.0 SORIN/ELA must purchase a Minimum Total Dollar Amount of *of Products
from GB during the Initial Term of the Agreement. The Minimum Total
Dollar Volumes targets on an annual basis are listed below (aggregate
$USD):
2006 - *
2007 - *
2008 - *
2009 - *
2010 - *
1.1 SORIN/ELA will make every reasonable effort to achieve the
Minimum total dollar volume targets, as established above,
on an annual basis; however, the overall minimum total
dollar amount for the individual periods listed below shall
be met:
Period #1 - 01 January 2006 through 31 December 2007 - *
Period #2 - 01 January 2008 through 31 December 2009 - *
Period #3 - 01 January 2010 through 31 December 2010 - *
2.0 No later than *of any Contract Year, SORIN/ELA and GB will *, and
remaining orders to *.
3.0 Should it become apparent that the minimum total dollar volumes for
the periods identified in this Exhibit A 1.1 will not be met by
SORIN/ELA, *. Upon the event of such * that may include, but will not
be limited to *.
4.0 Audit
4.1 GB will require that SORIN/ELA *, including the Purchase
Requirements specified in Exhibits B, C, D, E and F.
4.2 GB reserves the right to * specified in Exhibits B, C, D, E
an F. The audit process is outlined in Exhibit H.
22
EXHIBIT B
PRICING FOR BATTERIES AND CAPACITORS
1.0 Batteries
1.1 Lithium Iodine Low-Rate Battery Pricing, Terms and Conditions,
including Purchase Requirements
1.1.1 Lithium Iodine Low-Rate Battery Pricing
--------------------------------
Li Iodine Batteries
--------------------------------
--------------------------------
Year Unit Price
================================
2006 *
2007 *
2008 *
2009 *
2010 *
================================
1.1.2 Purchase Requirements: * of SORIN/ELA'S bradycardia
device battery demand to be purchased from GB
1.1.3 Pricing for *of *and *of Li Iodine batteries that are *
1.1.4 Price premiums to be applied based upon *
1.2 Lithium Silver Vanadium Oxide High-Rate Battery Pricing, Terms
and Conditions, including Purchase Requirements
1.2.1 Lithium Silver Vanadium Oxide High-Rate Battery Pricing
23
--------------------------------
SVO Batteries
--------------------------------
--------------------------------
Year Unit Price
================================
2006 *
2007 *
2008 *
2009 *
2010 *
--------------------------------
1.2.2 Purchase Requirements: * of SORIN/ELA'S tachycardia
device battery demand to be purchased from GB
1.2.3 Pricing for *and *of Lithium Silver Vanadium Oxide
High-Rate Batteries that *
1.2.4 Price premiums to be applied based upon *
1.3 QHR Silver Vanadium Oxide/Carbon Monofluoride High Rate Battery
Pricing, Terms and Conditions, including Purchase Requirements
1.3.1 QHR Silver Vanadium Oxide/Carbon Monofluoride High Rate
Battery Pricing
--------------------------------
QHR Batteries
--------------------------------
--------------------------------
Year Unit Price
================================
2006 *
2007 *
2008 *
2009 *
2010 *
--------------------------------
1.3.2 Purchase Requirements: * of SORIN/ELA'S tachycardia
device battery demand to be purchased from GB
1.3.3 Pricing for QHR Silver Vanadium Oxide/Carbon Monofluoride
High Rate Batteries of *Cathode plate construction that
are *
1.3.4 Price premiums to be applied based upon *
24
2.0 Capacitor Pricing, Terms and Conditions, including Purchase
Requirements
2.1 Wet Tantalum Capacitor Pricing:
--------------------------------
Capacitors
--------------------------------
--------------------------------
Year Unit Price
================================
2006 *
2007 *
2008 *
2009 *
2010 *
================================
2.2 Purchase Requirements: * of SORIN/ELA'S tachycardia
device capacitor demand to be purchased from GB for
SORIN/ELA device development platforms currently referred
to as *, as well as *
2.3 Pricing for *of *
2.4 Price Premiums to be applied based upon *
25
EXHIBIT C
PRICING FOR FEEDTHROUGHS AND FILTERED FEEDTHROUGHS
1.0 Feedthrough Pricing, Terms and Conditions, including Purchase
Requirements
1.1 Feedthrough Pricing
- --------------------------------------------------------------------------------
Feedthroughs
- --------------------------------------------------------------------------------
Unit Price
- --------------------------------------------------------------------------------
Drawing GB Item 2006 2007 2008 2009 2010
================================================================================
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
================================================================================
1.2 Purchase Requirements: * of SORIN/ELA'S Feedthrough
demand to be purchased from GB
1.3 Feedthrough pricing applies to the *of the */ items
listed in the table above.
1.4 Price premiums to be applied for *and/or *
26
2.0 Filtered Feedthrough Pricing, Terms and Conditions, including
Purchase Requirements
- --------------------------------------------------------------------------------
Filtered Feedthroughs
- --------------------------------------------------------------------------------
Unit Price
- --------------------------------------------------------------------------------
Drawing GB Item 2006 2007 2008 2009 2010
- --------------------------------------------------------------------------------
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
================================================================================
2.1.1 Filtered Feedthrough Pricing
2.2 Purchase Requirements:
2.2.1 Minimum * of SORIN/ELA'S Filtered Feedthrough demand to
be purchased from GB in 2006
2.2.2 Minimum * of SORIN/ELA'S Filtered Feedthrough demand to
be purchased from GB in 2007
2.2.3 *of SORIN/ELA'S Filtered Feedthrough demand to be
purchased from GB in 2008 and through termination of this
Agreement
2.3 Filtered Feedthrough pricing applies to the *of the *listed
in the table above with the exception of SORIN/ELA drawings
*. Pricing for SORIN/ELA drawings *assumes that these
Filtered Feedthroughs will be redesigned and qualified by
SORIN/ELA
2.4 Price premiums to be applied for *and/or *
27
EXHIBIT D
PRICING FOR ASSEMBLED HEADERS
1.0 Assembled Header Pricing, Terms and Conditions, including Purchase
Requirements
PRICING PENDING SPECIFICATION CONCURRENCE.
2.0 Purchase Requirements: Minimum * of SORIN/ELA'S molded Assembled Header
demand to be purchased from GB in 2007 and through termination of this
Agreement
3.0 GB and SORIN/ELA mutually agree to *for the new Assembled Headers to be
included in this Agreement
4.0 GB reserves the right to *for new models and modifications to existing
models.
5.0 Price premiums to be applied for *and/or *
28
EXHIBIT E
PRICING FOR CASES
1.0 Case Pricing, Terms and Conditions, including Purchase Requirements
- --------------------------------------------------------------------------------
Cases
- --------------------------------------------------------------------------------
Unit Price
- --------------------------------------------------------------------------------
Drawing GB Item 2006 2007 2008 2009 2010
- --------------------------------------------------------------------------------
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
- --------------------------------------------------------------------------------
2.0 GB and SORIN/ELA mutually agree to *for the new Cases included in this
Agreement
3.0 Case pricing applies only to the *of the */ items listed in the
table above
4.0 Price premiums apply for *and/*
5.0 Should GB and SORIN/ELA agree to implement *that allow GB to *, the
following price table *will apply.
5.1.1 *will be substantially equivalent to the items as shown
in Exhibit I of this Agreement
- --------------------------------------------------------------------------------
CASE PRICING - SPECIFICATION CHANGE PER EXHIBIT I
- --------------------------------------------------------------------------------
Unit Price
---------------------------------------------------------
Drawing GB Item 2006 2007 2008 2009 2010
=========================================================
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
* * * * * * *
- --------------------------------------------------------------------------------
29
EXHIBIT F
PRICING FOR MISCELLANEOUS PIECE PARTS
1.0 *
1.1 * Pricing, Terms and Conditions, including Purchase Requirements
- --------------------------------------------------------------------------------
*
- --------------------------------------------------------------------------------
--------------------------------------------
Unit Price
- --------------------------------------------------------------------------------
Drawing GB Item 2006 2007 2008 2009 2010
================================================================================
* * * * * * *
* * * * * * *
* * * * * * *
================================================================================
1.2 *pricing applies only to the *of the */ items listed in the
table above
1.3 Price premiums apply for *and/or *
2.0 Coated Components: SORIN/ELA agrees to *Coated Components. GB will *
once SORIN/ELA'S * by GB.
3.0 Miscellaneous Piece Part Pricing, Terms and Conditions, including
Purchase Requirements
3.1 Miscellaneous Piece Part pricing applies only to the *of the */
items listed in the Pricing Table above
3.2 Price premiums apply for *and/or *
- --------------------------------------------------------------------------------
Other Machined Components
- --------------------------------------------------------------------------------
------------------------------------------------
Unit Price
- --------------------------------------------------------------------------------
Drawing GB Item Type 2006 2007 2008 2009 2010
- --------------------------------------------------------------------------------
* * * * * * * *
* * * * * * * *
* * * * * * * *
* * * * * * * *
* * * * * * * *
================================================================================
EXHIBIT G
STANDARD LEAD TIME
Standard Lead Time: The standard lead time for production quantities of fully
qualified Products is *. GB will use *to meet SORIN/ELA'S delivery requirements.
GB will notify SORIN/ELA, in writing, of any changes to these standard lead
times.
30
EXHIBIT H
AUDIT PROCESS
Audit Process: GB reserves the right to audit SORIN/ELA'S records to validate
SORIN/ELA'S compliance with the terms and conditions of this Agreement,
including the Purchase Requirements specified in Exhibits B, C, D, E and F. The
audit process is outlined below:
1.0 GB, upon notice to SORIN/ELA, will request that an independent
CPA firm will audit SORIN/ELA'S information relative to
volumes. The CPA firm will be one of the Big Four CPA firms
that is not the external auditor of either GB or SORIN/ELA.
2.0 *, unless a discrepancy of greater than * exists between
SORIN/ELA'S claimed volumes versus the volumes discovered
through the audit process. In this case, *.
3.0 In the event that GB and SORIN/ELA can not agree regarding the
results of the audit, another independent CPA firm will be
requested to audit SORIN/ELA'S information relative to volumes.
31
EXHIBIT I
ENCLOSURE VISUAL INSPECTION CRITERIA
*
32