Exhibit 10.1
THE CONFIDENTIAL PORTIONS OF THIS EXHIBIT,
WHICH HAVE BEEN REMOVED AND REPLACED WITH
AN ASTERISK, HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AN EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 405
PROMULGATED UNDER THE SECURITIES ACT OF 1933 AND
RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934.
SUPPLY AGREEMENT
between
Cardiac Pacemakers, Inc. (d/b/a Boston Scientific)
and
Greatbatch Ltd.
2007 - 2010
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TABLE OF CONTENTS
1.0 INTRODUCTION............................................................3
2.0 DEFINITIONS.............................................................4
3.0 CONTRACT TERM...........................................................6
4.0 FORECASTS, ORDERS AND SAFETY STOCK......................................7
5.0 PRICING.................................................................8
6.0 PRODUCT PURCHASE AND SALE...............................................9
7.0 DELIVERY...............................................................10
8.0 PRODUCT QUALITY AND INSPECTION.........................................10
9.0 INVOICES AND PAYMENT...................................................13
10.0 WARRANTY AND LIMITATION OF LIABILITY...................................13
11.0 PROCESS AND/OR DESIGN CHANGE...........................................17
12.0 BUSINESS REVIEWS AND CERTIFICATIONS....................................17
13.0 BUSINESS EXIT AND TERMINATION..........................................18
14.0 CONFIDENTIAL INFORMATION...............................................19
15.0 INTELLECTUAL PROPERTY..................................................21
16.0 FORCE MAJEURE..........................................................22
17.0 MISCELLANEOUS..........................................................24
EXHIBIT A - LOW AND MEDIUM RATE BATTERIES.....................................27
EXHIBIT B - HIGH RATE BATTERIES...............................................30
EXHIBIT C - WET TANTALUM CAPACITORS...........................................33
EXHIBIT D - CASE HALVES.......................................................37
EXHIBIT E - FILTERED FEEDTHROUGHS.............................................40
EXHIBIT F - BATTERY AND CAPACITOR PRICING ADJUSTMENTS FOR
INCREASED COMMITMENT.........................................................41
EXHIBIT G - *.................................................................42
EXHIBIT H - BSC-DESIGNATED THIRD PARTY SUPPLIERS..............................44
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Supplier Partnering Agreement
THIS AGREEMENT is effective 01 July 2007 and is by and between GREATBATCH LTD.,
a New York corporation located at 0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
("GB") and CARDIAC PACEMAKERS, INC., a Minnesota corporation and subsidiary of
BOSTON SCIENTIFIC CORPORATION ("BSC"), located at 0000 Xxxxxxx Xxxxxx Xxxxx, Xx.
Xxxx, Xxxxxxxxx 00000-0000 ("BSC"). GB and BSC are also each referred to as a
"Party" and collectively as the "Parties".
Whereas, BSC purchases certain Products for use in medical devices; and
Whereas, GB agrees to manufacture/provide and sell such Products to BSC and its
Affiliates in accordance with, and subject to, BSC's specifications and other
terms and conditions set forth in the Agreement.
Whereas, the Parties desire to continue and expand their relationship based on a
philosophy of continuous improvement geared toward world-class benchmarks in
quality, cost, inventory levels, delivery, technology and service.
NOW, THEREFORE, incorporating the above recitals and in consideration of the
mutual covenants below, GB and BSC hereby agree as follows:
1.0 INTRODUCTION
1.1 BSC and GB wish to enter into this Supplier Partnering Agreement. The
Parties desire to terminate:
1.1.1 The Battery Supply Agreement between Xxxxxx Xxxxxxxxxx Ltd.
and Cardiac Pacemakers Inc. dba Guidant entered into April
10, 2003 including the 1st Amendment to Battery Supply
Agreement entered into August 16, 2004 and the 2nd Amendment
to Battery Supply Agreement entered into December 12, 2006;
1.1.2 The Capacitor Supply Agreement between Xxxxxx Xxxxxxxxxx
Technologies, Inc. and Guidant/CRM entered into September
15, 2001 as amended by the Wet Tantalum Capacitor 2005
Pricing Proposal dated November 4, 2004, the Supplement to
Wet Tantalum Capacitor 04 November 2004 Pricing Proposal
dated November 8, 2004, Wet Tantalum Capacitor Pricing
Agreement dated April 6, 2005, and Amendment No. 1 to the
Wet Tantalum Capacitor Pricing Agreement effective December
12, 2006;
1.1.3 The * dated January 29, 2007, effective February 1, 2007 and
later extended by a revised * dated April 16,2007; and
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1.2 BSC and GB wish to continue the existing Filtered
Feedthrough Supply Agreement entered into February 10, 2005
as amended by the Fourth Amendment to Filtered Feedthrough
Supply Agreement effective October 1, 2006 until such time
as Parties can agree to the detail of Exhibit E of this
Agreement or the expiration of the existing agreement.
1.3 Any financial and other obligations owing by one Party to
the other under the foregoing agreements, and any
obligations therein with respect to warranty, limitation of
liability, and confidentiality, will not be terminated by
virtue of Article 1.1
2.0 DEFINITIONS
2.1 As used in this Agreement, the following defined terms will have the
meanings provided for in this Article 2.0:
2.2 "Affiliate" means:
2.2.1 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
2.2.2 any other entity/person, which at the time of such
determination, is controlling, controlled by or under common
control with, such entity/person.
2.2.3 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.
2.3 "Agreement" means this Agreement and all attached and incorporated
Exhibits.
2.4 "Batteries" means lithium iodine low rate batteries, lithium silver
vanadium oxide high rate batteries, QMR/QHR silver vanadium
oxide/carbon monofluoride batteries medium and high rate batteries,
lithium ion batteries and other similar power sources.
2.5 "Buyer-Managed Purchase Order" means BSC's purchase order for Products
not managed via Kanban.
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2.6 "Capacitors" means a capacitor for use in an Implantible Cardioverter
Defibrillator ("ICD").
2.7 "Case Half" means the drawn titanium, aluminum, and/or stainless steel
enclosures used in medical devices, medical device components and
similar or related products as listed on attached Exhibit D.
2.8 "Confidential Information" is defined in Article 14.0.
2.9 "Contract Year" means each calendar year during the Term, with the
initial Contract Year being the portion of calendar year 2007
remaining after the Effective Date.
2.10 "Effective Date" means 01 July 2007.
2.11 "Feedthroughs (FT)" 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 they are electrically insulated and hermetically sealed as listed
on attached Exhibit E.
2.12 "Filtered Feedthrough (FFT)" 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 as listed on attached Exhibit E.
2.13 "Force Majeure" is defined in Article 16.0.
2.14 "High Rate Battery" means a battery for use in an ICD.
2.15 "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. "Patent Rights" means in addition to the above items
protectable under U.S. and foreign patent laws, all reissues,
reexaminations, divisionals, continuations, substitutions, extensions,
and applications with respect thereto.
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2.16 "Kanban Purchase Order" means BSC Purchase Orders set-up for Products
on an as needed basis.
2.17 "Non-Recurring Engineering Charges (NRE)" means tooling, engineering
and qualification testing costs associated with the development of
Products by GB for BSC including but not limited to Products included
in the Agreement in Exhibits A, B, C, D, and E.
2.18 "Product" means Batteries, Capacitors, Case Halves, and Feedthroughs
(including Filtered Feedthroughs) as listed on the attached Exhibits
A, B, C, D, and E.
2.19 "Purchase Order" means both Buyer-Managed Purchase Orders and Kanban
Purchase Orders.
2.20 "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.
2.21 "Qualified" means the Product has fully met the Specifications through
Qualification.
2.22 "Renewal Term" means a period of four (4) years.
2.23 "Specifications" means with respect to Products listed on Exhibits A,
B, C, D, and E the requirements and protocols developed by GB or
provided to GB by BSC prior to the date of this Agreement, relative to
the design, physical characteristics, function, performance,
manufacture, packaging and quality of such Products.
2.24 "WIP" or "Work In Process" means materials for the manufacture of a
Product that is currently being processed in an operation, or
inventory that has been processed through one operation and is
awaiting another operation. WIP represents the value of materials,
labor, and overhead that has been issued to manufacturing but has not
yet produced a stockable item and may include finished products
awaiting final inspection.
3.0 CONTRACT TERM
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3.1 The Term of this Agreement commences on the Effective Date and ends on
December 31, 2010 (the "Initial Term"). It may be extended pursuant to
Article 3.2 or earlier terminated pursuant to Article 13.2. Pricing is
set forth in Exhibits A, B, C, D, and E is in effect as of the
Effective Date.
3.2 The Term of this Agreement may be extended for one or more Renewal
Terms (each a "Renewal Term"); provided that the Products and pricing
for each Renewal Term will be subject to the mutual written agreement
of the Parties reached no later than * prior to the last day of the
Initial Term or then current Renewal Term (whichever is applicable).
3.3 Parties agree to begin agreement review and negotiations at least *
prior to the last day of the Initial Term or then current Renewal Term
(whichever is applicable).
4.0 FORECASTS, ORDERS AND SAFETY STOCK
4.1 Purchase Orders for Products and Forecasts
4.1.1 By * of each Contract Year, BSC will provide GB with a
non-binding forecast indicating BSC's forecasted purchases
of Products from GB for the next *, which will include an
identification of Products, and anticipated quantities and
delivery dates.
4.1.2 By * of each Contract Year, BSC will provide GB with a
revised non-binding forecast and * for the following *.
Greatbatch will acknowledge these Purchase Orders within *
days or prior to BSC's holiday shutdown whichever comes
first.
4.1.3 All Purchase Orders will set forth at a minimum: (i) an
identification of Products ordered, (ii) quantities ordered,
(iii) proposed delivery dates (Buyer-Managed Purchase Orders
only), and (iv) shipping instructions.
4.1.4 On or about the *, BSC will submit to GB in writing a
rolling * forecast of anticipated needs. The first * of the
* rolling forecast will be considered binding and the last *
of the * rolling forecast will be considered non-binding.
Upon completion of * of a *, BSC will provide a non-binding
* forecast for the * in the subsequent forecast.
4.2 Modification of Orders. The delivery dates and quantities within a
Buyer-Managed Purchase Order by BSC cannot be modified or canceled
within * of scheduled completion except upon the written mutual
agreement of the Parties. Mutually agreed change orders will be
subject to all provisions of this Agreement, whether or not the change
order so states.
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4.3 Notwithstanding the foregoing, BSC may in its sole discretion by
written notice to GB cancel orders for and deliveries of any Products
against Buyer-Managed Purchase Orders which are not shipped within *
following the shipping date set forth in the applicable Greatbatch
Purchase Order Acknowledgement and in the event of such cancellation
by BSC, BSC may then make such appropriate adjustments to any
outstanding orders and forecasts as it deems advisable in light of any
shortfalls in supply which relate to such cancellation.
4.4 Standard Lead Time. The standard lead time for production quantities
of fully qualified Products is defined in the Exhibit appropriate to
that Product. GB will use all commercially viable means to meet BSC's
delivery requirements. GB will notify BSC, in writing, of any changes
to these standard lead times.
4.5 Safety Stock. GB agrees to maintain a minimum of * inventory as Safety
Stock based on the most recent * submission. This Safety Stock is the
amount of Product and components required to enable GB to process the
Products to completion, ship to BSC within * of receipt of BSC Kanban
release, and replenish Safety Stock Product. All Safety Stock
requirements above the minimum level will be requested by the BSC
buyer in the forecast for that particular Product and approved by GB
in writing.
4.5.1 Greatbatch will use best commercial effort to increase
Safety Stock within * of said change in Safety Stock
requirement.
4.5.2 BSC and GB agree to work together to minimize inventory
obsolescence costs for Products under Kanban Purchase
Orders. BSC will be responsible for all finished goods
inventory, WIP, Product-specific, non-returnable purchased
material and any non-cancelable purchase orders outstanding
with GB's suppliers necessary to sustain the Safety Stock
levels provided for in this Article 4.5. GB will be
responsible for billing BSC for obsolescence costs no later
than three (3) months after written notification from BSC
that a part is obsolete.
5.0 PRICING
5.1 Pricing. The pricing for Products are set forth on Exhibits A, B, C,
D, and E.
5.2 Price Adjustments for Increased Commitment. For those Products priced
in Exhibit B (High Rate Batteries) and Exhibit C (Wet Tantalum
Capacitors), BSC may choose to increase business commitment to realize
improved pricing from GB as outlined in those Exhibits and in Exhibit
G.
5.3 Price Adjustments for Significant Cost Impact.
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5.3.1 The price for any Product may be adjusted up or down as of
the * of each * during the Term of this Agreement, by mutual
consent, if there is significant impact to GB's final cost
to manufacture the Product as contemplated within the
Product Exhibits. If GB determines that a price increase or
decrease under this Article 5.3 is required or permissible,
GB will deliver written notice to BSC setting forth the
basis for such determination by * of each Contract Year.
5.3.2 The price for any Product may be adjusted up or down in the
event that a Product redesign results in a change in the
cost of the Product.
5.3.3 If Specification changes occur BSC and GB will work in good
faith to minimize obsolescence costs.
5.3.3.1 *
5.3.3.2 *
5.3.3.3 *
6.0 PRODUCT PURCHASE AND SALE
6.1 Manufacture and Supply. On and subject to the terms and conditions of
this Agreement, during the Term: (a) GB will deliver and sell Products
to BSC in the quantities ordered by BSC from time to time by delivery
to GB of BSC's purchase order and delivery instructions and (b) BSC
will purchase not less than the percentage of its requirements for
each of the Products as set forth in the Exhibits to this Agreement
pending the Food and Drug Administration's (FDA) approval and the
market release of the finished ICD and/or pacemaker.
6.1.1 BSC Tooling. Any tooling supplied by BSC to or purchased by
BSC from GB is and remains the property of BSC. Clearly
visible asset tags will be assigned and applied to all such
tooling specifying Boston Scientific as the owner of that
tooling. GB will (a) store and maintain all BSC tooling in
good working condition, (b) insure it at full replacement
value under an all-risk policy of property insurance
endorsed to name BSC as an additional insured with respect
to such tooling, and (c) not relocate said tooling without
the express written permission of BSC. All direct charges
for maintenance, repair or replacement after expiration of
useful life of any BSC tooling by GB or any third party,
other than that which may be caused by misuse of any tooling
or breach hereof by GB, will be the sole financial
responsibility of BSC. GB will use BSC tooling only in the
manufacture of Products pursuant to this Agreement and will
return said tooling without cost other than freight and
packaging charges to BSC at any time upon the written
request of BSC.
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6.1.2 Subcontracting. GB is not permitted to subcontract or
delegate any of its obligations under this Agreement without
the prior written consent of BSC.
7.0 DELIVERY
7.1 BSC will give GB written instructions as to the method of shipment and
carrier, which GB must follow. If BSC does not give specific
instructions, GB may select the method of shipment and the carrier for
the respective purchase order, and GB will prepay transportation and
similar charges upon shipment (which payments will be added to the
invoice).
7.2 Title to all Products conforming to BSC'S purchase order will pass,
free and clear of all encumbrances, at the FOB shipping point, which
is * . BSC will bear all risk of damage or loss to those items after
delivery by GB to the carrier at the FOB shipping point, and BSC
releases GB from any and all claims and liability with respect to any
such in-transit damages or losses to those items. The acceptance of
title of the items does not constitute acceptance as conforming to
applicable Specifications.
7.3 GB will ship Product under Buyer Managed Purchase Orders to BSC * of
GB's Sales Order Acknowledgement commit date. GB will ship Product
under Kanban Purchase Orders to BSC within * of GB's confirmation of
Kanban release receipt. GB will acknowledge receipt of Kanban release
in *.
7.4 In the event of any shortage, damage or discrepancy in or to a
shipment of Products, BSC will promptly notify GB of the shortage,
damage or discrepancy. GB will promptly ship the quantities of any
missing Products to remedy any such shortage.
7.5 Failure to Ship. If GB fails for any reason, other than Force Majeure
or breach of this Agreement by BSC, to ship to BSC sufficient
quantities of Products meeting BSC's Purchase Orders and Forecasts
within *, GB agrees to provide BSC with * the committed purchase
requirement for that Product for the *. The remedies provided to BSC
in Article 4.2 and 4.3 (order cancellation), in this Article 7.5
(reduction of volume commitments) and in Article 13.2 (termination)
shall constitute BSC's sole remedies for any late shipments or
failures to ship Product as provided for in this Agreement.
8.0 PRODUCT QUALITY AND INSPECTION
8.1 Testing and Inspection.
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8.1.1 GB will perform testing to ensure that all Products
delivered to BSC meet all applicable Specifications. BSC
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 BSC.
8.1.2 BSC will conduct any incoming inspection tests not later
than * from the date of BSC'S receipt of the Products.
Products not rejected by BSC by written notice to GB within
such period will be deemed accepted.
8.1.2.1 For Products shipped that fail to meet the
Specifications, BSC will deliver to GB, as appropriate,
a request for change to remedy the nonconformance of
the shipped Products and/or future Products. GB will,
upon receipt of BSC's documentation, ship promptly at
GB's expense, replacement items of the Product that are
in conformance with the Specifications.
8.1.2.2 Prior to returning any Product to GB, BSC will first
contact its GB customer service representative and
obtain a Return Material Authorization (RMA) number.
BSC will only return the items and quantities approved
through the RMA.
8.2 Manufacturing Location. Should GB wish to manufacture BSC Product at
any other location other than the approved site, GB will provide
written notice to BSC before the site change to allow for product
qualification. GB agrees to provide BSC with transfer plans, site
specifications, on-site inspection and audit opportunities and any
reasonable documentation as requested by BSC to ensure GB's ability to
continue production of acceptable Products that meet all
Specifications. Should GB manufacturing move outside the U.S., BSC
reserves the right to review and approve any additional charges that
result from the move outside the U.S. The Parties acknowledge GB's
Quality Performance Rating (as determined by BSC) and delivery
performance as of the Effective Date as the desired performance to be
achieved and maintained by GB. BSC is entering into this Agreement in
reliance upon and conditioned on GB's quality and delivery ratings
remaining consistent with the levels that exist as the Effective Date,
regardless of the location at which Products are manufactured. BSC
will qualify each Product before production components can be shipped
to BSC and share in cost increases or decreases realized from such
move.
8.3 Quality Control. GB will 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 to the specified use of these Products and
such requirements, policies, and procedures as provided for in Article
8.4. BSC 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 BSC.
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8.4 Quality Management
8.4.1 Quality Management System. GB has established and maintains a
certified quality management system in accordance with ISO
9001-2000 or ISO 13485 and other relevant quality management
standards and legal provisions applicable to its business (the
"GBQMS"). GB represents and warrants that the actual production
of the Products takes place under such GBQMS.
8.4.2 Except to the extent in conflict with this Agreement, GB agrees
to comply with the following quality assurance requirements,
policies and procedures of BSC:
8.4.2.1 *.
If BSC determines that it is necessary or desirable to make
changes to BSC's quality standards, BSC will so notify GB in
writing. GB will work to comply with all updates and revisions to
BSC's quality standards that GB agrees to in writing. The
requirements specified in, or subsequently approved pursuant to
this Article 8.4.2 are referred to herein as the "BSC Supplier
Quality Requirements".
8.4.3 Audits and Inspections. BSC will have reasonable access to the
portion of GB's premises in which Products are manufactured for
BSC, and its relevant documentation, during regular business
hours in order to verify that the production and inspection of
the Products occur in accordance with all relevant provisions of
the GBQMS, BSC's Supplier Quality System Assessment, and in
compliance with the Specifications. GB will also fully support
and permit any inspection or audit by any conformity assessment
body, which is legally entitled to inspect or audit BSC, as the
legal manufacturer of a medical device (which includes a
Product), and GB, as the manufacturer of such Product.
8.4.4 Compliance Inspection. GB will inspect and test Products prior
to delivery to BSC to ensure compliance with the Specifications
and quality management standards per this Article 8.4.
8.4.5 Traceability. In accordance with the GBQMS 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, for a minimum of ten years, to the level of the
individual item of each Product identified by serial or lot
number.
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8.4.6 Compliance Notification. It is * responsibility to file required
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.
8.4.7 Survival. The provisions of this Article 8.4 will survive the
termination of the Agreement.
8.5 Standard Forms Not Applicable. The terms and conditions of sale for
Products sold by GB to BSC 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 BSC in executing 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 will have any force or effect.
8.6 Continuous Improvement. The Parties recognize the need for continuous
improvement driven changes focused on quality improvement and cost
reduction. BSC and GB agree to work together to ensure such changes are
reviewed and approved. Pricing in this Agreement is based on GB's ability
to execute these changes in *.
9.0 INVOICES AND PAYMENT
9.1 Payment Terms. Payment terms are net * from date of receipt of invoice
and terms are * or the location of such other * 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): *
9.2 U.S. Funds. All amounts referenced in or to be paid under this
Agreement will be in U.S. funds.
10.0 WARRANTY AND LIMITATION OF LIABILITY
10.1 Warranty. GB warrants to BSC that Products sold by GB to BSC under
this Agreement are in conformance with applicable Specifications, are
manufactured in accordance with the GBQMS as described in Article
8.4.1 and are free from defects in material and workmanship at the
time of delivery of said Products.
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10.2 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, OR OF FITNESS FOR A PARTICULAR PURPOSE OR USE.
10.3 Remedies for Breach of Warranty. In the event that any Product
manufactured or sold by GB to BSC under this Agreement fails to comply
with the limited warranty provided for in this Article 10.0 and BSC
delivers notice of such noncompliance to GB, within * of the delivery
of that Product to BSC, GB will, upon substantiation that the Product
has been stored, preserved and used in accordance with Article 8.3,
correct such failure by *. GB agrees that it will promptly inform BSC
in writing of any actual or potential problems of which GB becomes
aware relating to the performance or safety of any Product design
manufactured for BSC relative to the Specifications for such design.
10.4 LIMITATION OF LIABILITY. *, IN THE MANNER PROVIDED ABOVE, CONSTITUTES
THE FULL EXTENT OF GB'S LIABILITY TO BSC WITH RESPECT TO PRODUCTS SOLD
HEREUNDER. IN NO EVENT WILL 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 WILL GB BE LIABLE *, WHETHER A RESULT OF
BREACH OF WARRANTY OR BREACH OF CONTRACT. THE PROVISIONS OF THIS
ARTICLE 10.4 WILL SURVIVE THE EXPIRATION OR TERMINATION OF THIS
AGREEMENT.
10.5 Third Parties. BSC 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 from
the marketing, distribution or sale of medical devices by BSC *. Such
indemnification will include, without limitation, damages resulting
from:
10.5.1 *
10.5.2 *
10.5.3 *
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unless the damage is *.
GB is responsible to complete incoming inspection requirements.
BSC's obligation under this Article 10.5 is subject to the following
conditions: GB must give BSC prompt written notification of any such
claim so as not to prejudice BSC's performance, and GB must cooperate
in the defense of such claim at BSC's expense. Further, GB agrees that
BSC has sole control over the defense or settlement of any such claim,
action or proceedings, including, but not limited to, the right to
select defense counsel. GB and its officers, directors, employees,
agents, or contractors will not enter into any agreement with respect
to such claim, action or proceeding for which indemnification is or
may be sought without receipt of BSC's prior written approval. GB will
have the right to retain separate counsel at its sole expense. Such
separate counsel will function solely to advise GB and will have no
right to control the defense of any lawsuit or to effect any
settlement, other than at GB's sole expense.
10.6 Product Liability Insurance.
10.6.1 GB has and will maintain product liability insurance in such
amounts as ordinary good business practice for its type of
business would make advisable and will provide BSC with evidence
of this coverage; provided, however, that in no case will the
limits of such coverage be less than the following (but subject
to any deductible or self-insured retention (SIR) which will not
exceed *):
Bodily Injury: * Each Occurrence
* General Aggregate
Property Damage: * Each Occurrence
* General Aggregate
10.6.1.1 GB will provide BSC with an insurance certificate *
specifying the amounts stated in this Article 10.6.1
including the SIR.
10.6.2 BSC has and will maintain product liability insurance in such
amounts as ordinary good business practice for its type of
business would make advisable and will provide GB with evidence
of this coverage; provided, however, that in no case will the
limits of such coverage be less than the following (but subject
to any deductible or self-insured retention (SIR) which will not
exceed *):
Bodily Injury: * Each Occurrence
* General Aggregate
- 15 -
Property Damage: * Each Occurrence
* General Aggregate
10.6.2.1 BSC will provide GB with an insurance certificate *
specifying the amounts stated in this Article 10.6.2
including the SIR.
10.7 Indemnification
10.7.1 Indemnification by BSC. BSC 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 BSC which contain a
Product, including, without limitation:
10.7.1.1 *
10.7.1.2 *
unless the damage is *
10.7.2 BSC's Indemnification Procedure. BSC's obligation under Article
10.7.1 is subject to the following conditions: GB must give BSC
prompt written notification of any such claim so as not to
prejudice BSC's performance, and GB must cooperate in the defense
of such claim at BSC's expense. Further, GB agrees that BSC has
sole control over the defense or settlement of any such claim,
action or proceedings, including, but not limited to, the right
to select defense counsel. GB and its officers, directors,
employees, agents, or contractors will not enter into any
agreement with respect to such claim, action or proceeding for
which indemnification is or may be sought without receipt of
BSC's prior written approval. GB will have the right to retain
separate counsel at its sole expense. Such separate counsel will
function solely to advise GB and will have no right to control
the defense of any lawsuit or to effect any settlement, other
than at GB's sole expense.
10.7.3 Indemnification by GB. GB hereby agrees to indemnify, defend and
hold BSC, 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 BSC and payable to third parties
(collectively, "damages") arising out of any claim to the extent
that such claim arises from or results out of: (a) personal
injury or death resulting from the use of the Product and caused
by GB's negligence or willful misconduct; and (b) personal injury
or death resulting from alleged defects of the Product caused by
GB's negligence or willful misconduct.
- 16 -
10.7.4 GB's Indemnification Procedure. GB's obligation under Article
10.7.3 is subject to the following conditions: BSC must give GB
prompt written notification of any such claim so as not to
prejudice GB's performance, and BSC must cooperate in the defense
of such claim at GB's expense. Further, BSC agrees that GB has
sole control over the defense or settlement of any such claim,
action or proceedings, including, but not limited to, the right
to select defense counsel. BSC and its officers, directors,
employees, agents, or contractors will not enter into any
agreement with respect to such claim, action or proceeding for
which indemnification is or may be sought without receipt of GB's
prior written approval. BSC will have the right to retain
separate counsel at its sole expense. Such separate counsel will
function solely to advise BSC and will have no right to control
the defense of any lawsuit or to effect any settlement, other
than at BSC's sole expense.
11.0 PROCESS AND/OR DESIGN CHANGE
11.1 Specifications. All Products supplied by GB to BSC will be in
accordance with the Specifications and supplied after GB Qualification
thereof. Any changes to Specifications for Products to be sold under
this Agreement will be agreed upon by both Parties in writing.
11.1.1 If GB determines that it is necessary or desirable to make
any change in process, material or design affecting the
form, fit, function, or performance of any Product, GB will
immediately notify BSC in writing. GB will not implement any
such change without BSC'S prior consent.
11.1.2 If BSC determines that it is necessary or desirable to make
any change to the Specification(s) for a Product, then BSC
will so notify GB in writing. GB will respond identifying
(a) GB's suggestions, if any, for modifying BSC's proposed
Specification change; (b) the lead time necessary to
implement such change; and (c) the amount and nature of any
price change, if any, estimated to result from implementing
such change. The Parties agree to negotiate in good faith
with respect to an adjustment to the Specifications and
pricing set forth in the pricing tables of the Agreement.
12.0 BUSINESS REVIEWS AND CERTIFICATIONS
12.1 * Business Review. The Parties agree to meet on a * basis for
purposes of a * Business Review focused on *. Meetings will be
coordinated by BSC's Commodity Manager and GB's Global Account
Manager. Agenda items should include:
- 17 -
o A review of GB's performance in meeting BSC's quality and
delivery requirements
o Ongoing * projects
o *.
o Review of options to improve * as well as and opportunities
to * through *.
* both Parties should be in attendance.
12.2 *:
12.2.1 *.
12.2.2 *.
12.2.3 *.
12.2.4 *
12.3 BSC will send a letter to GB on *, certifying BSC's compliance
with the terms and conditions of this Agreement during the prior
Contract Year, including the Purchase Requirements specified in
Exhibits A, B, C, D, and E.
13.0 BUSINESS EXIT AND TERMINATION
13.1 GB must give BSC * written notice of any intent to discontinue supply
of any Product to BSC ("Article 13.0 Notice"), but GB will not be
bound after the expiration of this Agreement to the pricing set forth
in Article 5.0. If GB so informs BSC of its intent to discontinue, BSC
has the right to make a last order, * prior to the date of
discontinuation as set forth by GB in the Article 13.0 Notice, which
will be fulfilled by GB provided that (a) units of Product covered by
the last order for any Product, not exceed * the number of units of
such Product delivered to BSC in the * immediately preceding the date
of such Article 13.0 Notice; and (b) GB will deliver Product in
accordance with a reasonable production and delivery schedule, but in
any event the full order will be completed prior to the date of
discontinuance. Further, GB will assist BSC in identification of a
replacement supplier.
13.2 Termination. Notwithstanding the provisions of Articles 3.1. and 3.2
above, this Agreement may be terminated in accordance with the
following provisions:
13.2.1 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.
- 18 -
13.2.2 A Party may terminate this Agreement at any time by giving
notice in writing to the other Party, which notice will be
effective upon delivery, 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
13.2.3 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 16.0 below.
13.3 Rights and Obligations on Termination. Termination of this Agreement
will 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:
13.3.1 Upon expiration or termination of this Agreement or if BSC
changes the model mix of, or discontinues, any Products,
resulting in the cancellation of Purchase Orders inside the
standard lead times, BSC will be responsible for all
finished goods inventory, WIP, Product-specific,
non-returnable purchased material and any non-cancelable
purchase orders outstanding with GB's suppliers. In the
event that BSC cancels a Buyer-Managed Purchase Order
outside of agreed upon lead-time, BSC and GB will negotiate
resulting costs.
14.0 CONFIDENTIAL INFORMATION
14.1 Treatment of Proprietary Information. Each of GB and BSC (each a
"receiving party" agrees to maintain all proprietary information
disclosed by the other Party (each a "disclosing party") pursuant to
or in the performance of this Agreement ("Proprietary Information") in
strict secrecy and confidence, and not to disclose said Proprietary
Information to any third party, nor make use of said Proprietary
Information for any purpose other than in carrying out its efforts
under this Agreement. The receiving party agrees to have its employees
sign agreements, or to have an appropriate corporate policy in effect,
which requires them to keep confidential any Proprietary Information
they learn in their positions at the receiving party; including the
Proprietary Information of the disclosing party. The receiving party
further agrees that no proprietary information or materials will be
supplied to any other corporation, partnership, laboratory, or
individuals other than those approved in writing by the disclosing
party, with the exception of disclosure to the FDA and similar
regulatory agencies of information relative to obtaining regulatory
approval.
- 19 -
14.2 Limited Release. The receiving party is released from the obligations
of Article 14.1 to the extent that any of the disclosed Proprietary
Information: (a) was already part of the public domain at the time of
the disclosure by the disclosing party; (b) becomes part of the public
domain through no fault of the receiving party (but only after and
only to the extent that it is published or otherwise becomes part of
the public domain); (c) was in the receiving party's possession prior
to the disclosure by the disclosing party and was not acquired,
directly, or indirectly, from the disclosing party or from a third
party who was under continuing obligation of confidence to the
disclosing party; (d) is received (after the disclosure by the
disclosing party) by the receiving party from a third party who did
not require the receiving party to hold it in confidence and did not
acquire it directly or indirectly, from the disclosing party under a
continuing obligation of confidence; or (e) is disclosed by the
receiving party pursuant to judicial compulsion, provided that the
disclosing party is notified at the time such judicial action is
initiated. In addition, notwithstanding Article 14.1, only to the
extent necessary to carry out the terms of this Agreement, GB may
provide proprietary information of BSC to its subcontractors and
vendors without BSC's prior approval provided that GB first requires
each subcontractor or vendor to sign a confidentiality agreement which
requires them to keep confidential such BSC Proprietary Information
and not to use it except for the purpose of performing their
obligations to GB.
14.3 Term of Obligation. The obligation of the receiving party to receive
and hold information disclosed by the disclosing party in confidence,
as required by this Article 14.0, will terminate five (5) years from
the date of the disclosure of the information hereunder and will
survive the termination or expiration of this Agreement.
14.4 Disposal upon Termination. Upon the termination or expiration of this
Agreement, any samples, sketches, or other proprietary material
provided by the disclosing party to the receiving party will be
destroyed or returned to the disclosing party, unless and to the
extent such materials are necessary to the receiving party to provide
continuing support.
14.5 Public Statements. (a) Neither Party will initiate or make any public
announcement or other disclosure concerning any previously
non-disclosed terms and conditions or the subject matter of this
Agreement, assuming all previously disclosed terms and conditions were
disclosed lawfully ("Confidential Information") to any third party
without the prior written approval of the other Party. Nothing herein
however, precludes a Party from disclosing Confidential Information
that the Party is compelled, based on advice of legal counsel, to
disclose under an applicable legal requirement, stock exchange rule or
similar rule, provided that the Party uses commercially reasonable
efforts to provide the other Party with at least five (5) business
days but in any event prompt advance written notice thereof and
cooperates with the other Party, to the extent the other Party
requests, so that such other Party may seek a protective order or
other appropriate remedy. If such protective order or other remedy is
not available or is not obtained, then the Party required to disclose
such Confidential Information will use commercially reasonable efforts
to limit the disclosure, furnish only that portion of such
Confidential Information that is legally required to be furnished and
will cooperate with the other Party to obtain a protective order,
agency ruling, or other assurance that Confidential Information will
be accorded such confidential treatment to the extent permissible
under the applicable legal requirement or rule.
- 20 -
(b) With regard to any required filing of this Agreement with the
Securities and Exchange Commission (the "SEC"), the disclosing Party
will seek Confidential Treatment pursuant to Rule 24b-2 of Securities
Exchange Act of 1934, as amended , with respect to the Confidential
Information. The Party required to disclose such Confidential
Information shall give the other Party a reasonable opportunity to
review and provide suggestions to limit disclosure of all Confidential
Information to be made public.
14.6 Mutual Non-Disclosure Agreements. The provisions of this Article 14.0
are not intended to replace, supersede, amend or modify all
non-disclosure agreements between the Parties, including the Mutual
Confidential Disclosure Agreement effective June 20, 2005, and the
Mutual Non-Disclosure Agreement effective August 1, 2005, except that
the requirements to maintain the confidentiality of Confidential
Information under those agreements will continue in full force and
effect for 5 years following the expiration or termination of this
Agreement.
15.0 INTELLECTUAL PROPERTY
15.1 Ownership of Product Technology
15.1.1 All Intellectual Property of GB in existence on the date of
this Agreement shall remain the exclusive property of GB
(hereinafter "GB Product Technology"). All Intellectual
Property of BSC in existence on the date of this Agreement
shall remain the exclusive property of BSC (hereinafter "BSC
Product Technology"). Nothing in this Agreement will give
BSC any license, claim, right, title or interest in any GB
Product Technology, nor will it give GB any license, claim,
right, title or interest in any BSC Product Technology.
15.1.2 All inventions, additions and/or improvements relating to
the Products or their use in implantable medical devices
developed, conceived, or invented solely by GB during the
Term is the sole property of GB.
15.1.3 All inventions, additions and/or improvements relating to
the Products or their use in implantable medical devices
developed, conceived, or invented solely by BSC during the
Term is the sole property of BSC.
- 21 -
15.1.4 All inventions, additions and/or improvements relating to
the Products, their use in implantable medical devices or in
respect of either the GB Product Technology or BSC Product
Technology developed, conceived, or invented jointly by GB
and BSC during the Term will be Joint Intellectual Property
("Joint IP").
15.1.5 All Joint IP will be jointly owned by the Parties and each
Party's joint ownership in the Joint IP will be an equal and
undivided interest therein.
15.1.6 Joint IP is otherwise subject to all of the terms and
conditions of this Agreement.
15.2 This Article 15.0 will survive expiration or termination of this
Agreement.
16.0 FORCE MAJEURE
16.1 "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 a Party of its obligations under this
Agreement.
16.2 Upon giving notice to the other Party, a Party affected by an event of
Force Majeure will be released without any liability on its part from
the performance of its obligations under this Agreement, except with
respect to Product delivered and accepted prior to the date of the
event of Force Majeure, the obligations under Article 9.0, Article
10.0, Article 13.1, Article 14.0, and Article 15.0, but only to the
extent and only for the period that its performance of such
obligations is prevented by the event of Force Majeure.
16.3 During the period that the performance of a Party 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.
17.0 MISCELLANEOUS
17.1 Governing Law. This Agreement will 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 does not apply to this Agreement on any
transaction pursuant hereto.
17.2 Assignment. Either Party may assign this Agreement to an entity that
acquires, directly or indirectly, substantially all of the assets or
shares of such Party or merges with it. Except as set forth herein,
neither this Agreement nor any rights here under, in whole or in part,
will be assignable or otherwise transferable by either Party without
the express written consent of the other Party. Subject to the above,
this Agreement will be binding upon and inure to the benefit of the
successors and assigns to the Parties here to.
- 22 -
17.3 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 between the Parties related
to the subject matter of this Agreement, but excluding any
confidentiality agreements between the Parties or their Affiliates
which will remain in full force and effect.
17.4 Survival. All of the representations, warranties, covenants and
indemnifications made in this Agreement, and all terms and provisions
hereof intended to be observed and performed by the Parties after the
termination or expiration of this Agreement, will survive the
termination or expiration and continue thereafter in full force and
effect, subject to applicable statute of limitations.
17.5 Amendment; Waiver. This Agreement is not to 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 will
not be construed to be a waiver of that 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 will be held to
be a waiver of any other or subsequent breach.
17.6 Counterparts. This Agreement may be executed in one or more
counterparts, all of which will 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.
17.7 Headings. The titles and headings to the 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 is to 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, Section and
Exhibits means Articles and Sections of, and Exhibits to, this
Agreement.
17.8 No Third Party Beneficiaries. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the Parties
and their Affiliates, or their respective successors or assigns, any
rights, remedies, obligations or liabilities under or by reason of
this Agreement.
17.9 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 BSC:
0000 Xxxxxx Xxxxx 0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000 Xx. Xxxx , XX 00000-0000
Facsimile: 716.759.5664 Facsimile: (sent to the Buyer)
Attention: President Attention: President
CC: General Counsel CC: General Counsel
- 23 -
or to such other address or to such other person as either Party
designates by such notice to the other Party. Each such notice or
other communication will be effective (i) if given by
telecommunication, when transmitted to the applicable number so
specified in (or pursuant to) this Article 17.9 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.
17.10 Severability. If any provision of this Agreement is held invalid by a
court of competent jurisdiction, the remaining provisions will
nonetheless be enforceable according to their terms. Further, if any
provision is held to be overbroad as written, that provision will be
deemed amended to narrow its application to the extent necessary to
make the provision enforceable according to applicable law and will be
enforced as amended.
17.11 Disputes; Enforceability
17.11.1 Confidentiality. The Parties agree that a violation of the
covenants set forth in Article 14.0 and Article 15.0 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.
17.11.2 Arbitration. Except as set forth in Article 17.11.1 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 that are not resolved
through negotiation, mediation other forms of alternative
dispute resolution, will be resolved by binding arbitration
in accordance with the commercial arbitration rules of the
American Arbitration Association (the "Rules"), and judgment
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 to the other Party and to the AAA office located
in New York, New York (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 New York, New York before an
independent and impartial arbitrator experienced in legal
matters related to the medical device industry. In no event
may the demand for arbitration be made after the date when
the initiation of a legal or equitable proceeding based on
such claim, dispute or other matter in question would be
barred by New York law. The arbitrator will deliver his or
her decision in writing, together with the summary of the
reasons for the decision, including citations to legal
authority to the extent appropriate. The decision of the
arbitrator will be final and binding on both Parties and
their successors and permitted assignees. The parties agree
that, notwithstanding anything to the contrary in this
Article 17.11.2, any award made by the arbitrator will be
consistent with the terms of this Agreement and that any
award will be restricted to a remedy that would be available
to a party under this Agreement.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
by their authorized representatives.
CARDIAC PACEMAKERS, INC. GREATBATCH LTD.
By: /s/ Xxxxx Xxxx By: /s/ Xxxxx Xxxxxxxx
------------------------------ ---------------------------------
XXXXX XXXX XXXXX XXXXXXXX
Title: Director, Materials Management Title: Sr. Vice President, Medical Power
Date: Date:
------------------------------ ---------------------------------
- 25 -
EXHIBIT A - LOW AND MEDIUM RATE BATTERIES
1.0 Purchase Requirements: a minimum of * % of BSC's Low and Medium rate
battery demand for * devices to be purchased from Seller.
2.0 Lithium Iodine Low Rate Battery Pricing
2.1 Volumes below are based on BSC * Lithium Iodine volume.
*
3.0 *Medium Rate Battery Pricing
*
4.0 Lead Time for GB Low and Medium Rate Batteries is * as of the Effective
Date of this Agreement.
5.0 Pricing Adjustments
5.1 Pricing shown in tables above valid for GB Low and Medium Rate battery
models shown in the table below in production as of the Effective Date
of this Agreement.
*
5.2 *
5.2.1 *.
5.2.2 *.
5.3 A price premium will apply for * enclosures, non-standard shapes, and
for terminal modification complexity.
5.4 A price premium will apply for other value added options (e.g., *)
requested by BSC.
5.5 Significant material cost change. The price for any Low or Medium Rate
Battery may be adjusted up or down as of the * of each Contract Year
during the Term of this Agreement, by mutual consent, if there is a
material cost change which has a significant impact to a Product's
final cost. Any price modification will be determined * of each year
and will be effective for shipments delivered beginning * the
following Contract Year.
- 26 -
5.5.1 In the case of Low and Medium Rate Batteries containing *,
if the Reference Price for * below has changed by more than
* compared to the Reference Price used for the current
Contract Year, a price adjustment (either up or down) will
be allowed for those products.
5.5.1.1 The "Reference Price for *" is based upon the * of each
Contract Year.
5.5.1.2 The Reference Price for * used as the basis to
establish 2007 pricing in this Exhibit A of the
Agreement is * per Xxxx Ounce.
5.5.2 Price adjustment per unit resulting from changes in
materials cost
*
6.0 NRE charges for new, custom designed cells will be no more than * per
development program.
- 27 -
EXHIBIT B - HIGH RATE BATTERIES
1.0 Purchase Requirements, Volumes and Prices.
1.1 *.
1.2 *
1.3 *.
2.0 * Battery Pricing
*
3.0 * High Rate Battery Pricing
*
4.0 Lead Time for GB High Rate Batteries * as of the Effective Date of this
Agreement.
5.0 Pricing Adjustments
5.1 Pricing shown in tables above valid for GB High Rate Battery models
shown in the table below in production as of the Effective Date of
this Agreement.
*
5.2 Price adjustment for increased commitment
5.2.1 Upon receipt of written commitment from BSC to procure no
less than * of GB's * batteries * for the remainder of the
Term of this Agreement, BSC will receive the following price
adjustments for High Rate Batteries:
5.2.1.1 *
5.2.1.2 *
5.2.2 Upon receipt of written commitment from BSC to procure no
less than * of GB's * batteries * for the remainder of the
Term of this Agreement, BSC will receive the following price
adjustments for High Rate Batteries:
- 28 -
5.2.2.1 *
5.2.2.2 *
These price adjustments for increased commitment are further
described in the flow chart included in Exhibit F of this
Agreement.
5.2.3 All price adjustments will be made for future purchases
only. No retroactive price reductions will be allowed.
5.3 A price premium will apply for * enclosures, non-standard shapes, and
for terminal modification complexity.
5.4 A price premium will apply for other value added options (e.g., *)
requested by Buyer.
5.5 A price premium will apply for each additional * configurations.
6.0 NRE charges for new custom designed cells will be no more than * per
development program
6.1 NRE charges for development of * for application in any of the *
models identified in this Exhibit B Article 5.1 will be * per program.
- 29 -
EXHIBIT C - WET TANTALUM CAPACITORS
1.0 Purchase Requirements: BSC will purchase GB Wet Tantalum Capacitors for use
in BSC's * devices for the minimum annual percentage of BSC hybrids per the
pricing table below.
2.0 Wet Tantalum Capacitor Pricing
*
3.0 Lead Time for GB Wet Tantalum Capacitors is * as of the Effective Date of
this Agreement.
4.0 Pricing Adjustments
4.1 Pricing shown in the table above valid for GB Wet Tantalum Capacitor
models shown in the table below in production as of the Effective Date
of this Agreement.
*
4.2 Price adjustment for increased commitment
4.2.1 Upon receipt of written commitment from BSC to * BSC will
receive the following price adjustments:
4.2.1.1 In the case of Wet Tantalum Capacitors, BSC will
receive a * to the then current price and * for Wet
Tantalum Capacitors purchased in subsequent Contract
Years.
4.2.2 Upon completion of activities defined in this Exhibit C,
Article 4.2.1 and * of the GB Wet Tantalum Capacitor
specified for the * device, BSC will receive the following
price adjustments:
4.2.2.1 In the case of Wet Tantalum Capacitors, BSC will
receive a * to the then-current price and * for Wet
Tantalum Capacitors purchased in subsequent Contract
Years. These price reductions are in addition to the
price reductions defined in Article 4.2.1.1 above.
4.2.3 Upon completion of activities defined in this Exhibit C,
Articles 4.2.1 and 4.2.2 and * of the GB Wet Tantalum
Capacitor specified for the * device, BSC will receive the
following price adjustments:
- 30 -
4.2.3.1 In the case of Wet Tantalum Capacitors, BSC will
receive a * to the then-current price and * for Wet
Tantalum Capacitors purchased in subsequent Contract
Years. These price reductions are in addition to the
price reductions defined in Articles 4.2.1.1 and
4.2.2.1. above.
4.2.4 Should BSC increase commitments as defined in this Exhibit C
Articles 4.2.1, 4.2.2, and 4.2.3 and Exhibit B, Article
5.2.1 and 5.2.2, BSC will receive the following additional
price reductions:
4.2.4.1 In the case of Wet Tantalum Capacitors, BSC will
receive a * to the then-current price.
4.2.4.2 In the case of * High Rate Batteries, BSC will receive
* for SVO batteries purchased in subsequent Contract
Years.
4.2.4.3 In the case of * High Rate Batteries, BSC will receive
a *.
These price adjustments for increased commitment are further
described in the flow chart included in Exhibit F of this
Agreement.
4.2.5 All Price Adjustments will be made on future purchases only.
No retroactive price reductions will be provided.
4.3 A price premium will apply for * enclosed designs
4.4 A price premium will apply for * modification complexity
4.5 A price premium will apply for other value added options (e.g., *)
requested by Buyer.
4.6 Significant material cost change. The price for any Wet Tantalum Capacitor
may be adjusted up or down as of the * of each Contract Year during the
Term of this Agreement, by mutual consent, if there is a material cost
change which has a significant impact to a Product's final cost. Any price
modification will be determined by * of each year and will be effective for
shipments delivered beginning * of the following Contract Year.
4.6.1 In the case of Capacitors containing *, if the Reference Price
for * below has changed by more than * compared to Reference
Price for * used for the current Contract Year, a price
adjustment (either up or down) will be allowed for those
products.
- 31 -
4.6.1.1 The "Reference Price of *" is based upon the * of each
Contract Year.
4.6.1.2 The Reference Price for * used as the basis to
establish 2007 prices in this Exhibit C of the
Agreement *.
4.6.2 In the case of Capacitors containing *, if the Reference
Price for * below has changed by more than * compared to
Reference Price for * used for the current Contract Year, a
price adjustment (either up or down) will be allowed for
those products.
4.6.2.1 The "Reference Price for *" is based upon the * of each
Contract Year.
4.6.2.2 The Reference Price for * used as the basis to
establish 2007 prices in this Exhibit C of the
Agreement is *.
4.6.3 In the case of Capacitors containing *, if the Reference Price
for * below has changed by more than * compared to Reference
Price for * used for the current Contract Year, a price
adjustment (either up or down) will be allowed for those
products.
4.6.3.1 The "Reference Price for *" is based upon the * of each
Contract Year.
4.6.3.2 The Reference Price for * used as the basis to
establish 2007 prices in this Exhibit C of the
Agreement is *.
4.6.4 Price adjustment per unit resulting from change in materials
cost
*
5.0 NRE charges for new custom designed capacitors will be no greater than *
per development program.
5.1 NRE charges for Future Program Commitments defined in Article 5.0
above will be rebated * at a rate of * for the *, which ever comes
first.
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5.2 NRE charges for a * capacitor development program will be rebated *,
which ever comes first.
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EXHIBIT D - CASE HALVES
1.0 Purchase Requirements: * of BSC's demand for Case Halves will be purchased
from GB
2.0 Case Half Pricing
*
- 34 -
3.0 Lead Time for GB Case Halves is * as of the Effective Date of this
Agreement.
4.0 Pricing Adjustments
4.1 Annual PPV
4.1.1 In the case of Case Halves listed in this Exhibit D, Article
2.0, BSC will receive * in the subsequent Contract Years
compared to the then-current year's pricing.
4.2 Significant material cost change. The price for any Case Half may be
adjusted up or down as of the * of each Contract Year during the Term
of this Agreement, by mutual consent, if there is a material cost
change which has a significant impact to a Product's final cost. Any
price modification will be determined by * of each year and will be
effective for shipments delivered beginning * of the following
Contract Year.
4.2.1 In the case of Case Halves containing *, if the Reference
Price for * below has changed by more than * compared to the
Reference Price for * used for the current Contract Year, a
price adjustment (either up or down) will be allowed for
those products.
4.2.1.1 The "Reference Price for *" is based upon the * of each
Contract Year.
4.2.1.2 The Reference Price for * used as the basis to
establish 2007 prices in this Exhibit D of the
Agreement is *.
4.2.2 In the case of Case Halves containing *, if the Reference
Price for * below has changed by more than * compared to the
Reference Price for * used for the current Contract Year, a
price adjustment (either up or down) will be allowed for
those products.
4.2.2.1 The "Reference Price for *" is based upon the * of each
Contract Year.
4.2.2.2 The Reference Price for * used as the basis to
establish 2007 pricing in this Exhibit D of the
Agreement is *.
- 35 -
EXHIBIT E - FILTERED FEEDTHROUGHS
Exhibit E intentionally blank
- 36 -
EXHIBIT F - BATTERY AND CAPACITOR PRICING ADJUSTMENTS FOR
INCREASED COMMITMENT
1.0 The flow chart included below provides a visual depiction of paths
available for BSC to realize improved pricing as a result if increased
business commitment to GB as described in Exhibit B Article 5.2 and Exhibit
C Article 4.2.
*
1.1 Pricing adjustments described in the flow chart above will apply only to
future purchases after completion of all elements described in the relative
Exhibit and Article. No retroactive price adjustments will be allowed.
- 37 -
EXHIBIT G - *
*.
1.0 *
*.
2.0 *
*
2.1 *
*
- 38 -
2.2 *
*
3.0 *
*.
- 39 -
EXHIBIT H - BSC-DESIGNATED THIRD PARTY SUPPLIERS
Exhibit H intentionally blank
- 40 -
