EXHIBIT 10.20
THE CONFIDENTIAL PORTIONS 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.
SUPPLIER PARTNERING AGREEMENT
This agreement (Agreement) is dated October 23, 2003 by and between the
following parties:
Pacesetter, Inc. (d/b/a St. Jude Medical CRMD), a St. Jude Medical Company,
00000 Xxxxxx Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000-0000 ("Buyer"); and
Xxxxxx Xxxxxxxxxx Technologies, Inc., (WGT) 0000 Xxxxxx Xxxxx, Xxxxxxxx,
Xxx Xxxx 00000 ("Seller").
INTRODUCTION
Buyer and Xxxxxx Xxxxxxxxxx Ltd., a subsidiary of Seller entered into a
certain Supplier Partnering Agreement dated as of June 1, 2000 (the "2000
Agreement") and the parties desire to replace the 2000 Agreement in its
entirety as set forth in this Agreement. The parties desire to establish
and continue a stable relationship based on a continuous improvement
process leading toward world-class benchmarks in quality, cost, inventory
levels, delivery, technology, and service.
Therefore, Seller and Buyer mutually agree to the following:
1. Term of Agreement. This Agreement is enforceable immediately but its
terms and conditions shall become effective on 01 January 2004 and will
remain in force until 31 December 2006 ("Initial Term"); provided, however,
that the term of this Agreement may be extended pursuant to Section 9 of
Exhibit A. This Agreement shall supercede and replace the 2000 Agreement in
its entirety effective as of 01 January 2004.
2. Purchase orders; Terms and Conditions of Sale. Seller will provide Buyer
Products (as defined in Exhibit A to this Agreement) pursuant to purchase
orders to be issued by Buyer's business units, including its Swedish
affiliate. The general terms and conditions of sale for Products sold by
Seller to Buyer hereunder are set forth on Exhibit A attached to and made a
part of this Agreement. The parties expressly agree that none of the terms
and conditions of any standard purchase preprinted forms used by either
Seller or the Buyer 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.
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3. Pricing. Pricing shall be as shown in Exhibits B (Batteries and
Capacitors), C (Feedthroughs, Filtered Feedthroughs), D (Component Parts)
and E (Enclosures).
4. Inventory. Seller will maintain a finished inventory for each Product at
the level indicated in Exhibits B, C, D and E. The level is a proportion of
the estimated annual usage for the product and will be updated each
quarter. If inventory drops below the indicated level at any time or is
totally consumed by Buyer, Seller will promptly replenish inventory to the
appropriate level as indicated in Exhibits B, C, D and E. Seller will keep
Buyer informed of the inventory level and location of each Product. At
Buyer's discretion, any inventory may be consigned to Buyer's facility.
Buyer will be responsible for any resulting additional costs to Seller.
Buyer is responsible for all inventory held by Seller under the terms of,
and as provided for in, Section 6 of Exhibit A to this Agreement.
5. Forecasts. Effective January, 2004 and each quarter thereafter that the
Agreement continues to remain in effect, Buyer shall provide Seller with a
written rolling 12 month forecast of the amount of each Product which Buyer
projects it will purchase during the next 12 months ("Forecasts").
Forecasts shall be non-binding on Buyer; provided, however, that the amount
of inventory that Seller is required to maintain (as set forth on Exhibits
B, C, D and E) during the 12 months shall be determined by reference to the
Forecasts. Buyer shall make every reasonable effort to provide 12 month
rolling forecast no later than the 5th business day of each quarter.
6. Quantity. Subject to Section 2.6 on Exhibit A, Buyer will purchase no
less than the inventory commitment of each product indicated in Exhibits B,
C, D and E. Also subject to Section 2.6 on Exhibit A, Buyer will purchase
from Seller a percentage of Buyer's total annual requirements of each
Product determined as indicated in Exhibits B, C, D and E. Excluded from
this obligation is Buyer's need for new or developing technologies that
Seller is unable to supply at competitive prices and in time to meet
Buyer's needs.
7. Quality/Improvements. Seller will start or maintain a program that
includes the ability to measure and report on quality control and
improvement processes.
7.1. Seller will start and/or maintain a continuous improvement strategy
for product quality, cost, delivery, inventory reduction, and service.
7.2. Delivery to be 100% on time (up to three days early and zero days
late).
7.3. Seller will start and/or maintain a quality system or plan that meets
the requirements of ISO-9000.
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7.4. Upon request by Buyer or Seller, Seller will participate, or be
permitted to participate, in early supplier involvement with Buyer for
Buyer's new Products of the type specified in this Agreement. Buyer will
provide Seller with sufficient information and cooperation in connection
therewith to permit Seller to qualify product for sale to Buyer.
7.5. Seller will meet with Buyer on a regular basis to review programs,
performance measurements, and barriers to progress. Seller and Buyer will
mutually agree on taking actions to correct problems and eliminate
barriers.
8. Communication. Seller and Buyer will conduct quarterly reviews to
facilitate the purposes of this Agreement. Also, Buyer will inform Seller
of Buyer's planned production rates for the Products to help Seller in its
planning. Until further notice, the key people who will be responsible for
routine communications between Seller and Buyer are:
For Seller: Xxxxx Xxxx, Market Manager - Batteries and Capacitors
Xxxx Xxxxxxxxxx, Market Manager - Components
Xxxx Xxxxxxxx, Market Manager - Feedthroughs / Filtered
Feedthroughs
Xxxx Xxxxxxxx, Plant Manager - Enclosures
For Buyer: Xxxx Xxxxx, Commodity Manager
Owe Eriksson, Director of Purchasing (Sweden)
9. Buyer's drawings and designs. Seller will use only drawings that have
been mutually agreed upon to manufacture the Products. Seller will never
make or sell any Products using Buyer's designs for anyone other than
Buyer.
10. Confidential information.
10.1. Treatment of Propriety Information. Each of Seller and Buyer (each a
"receiving party") agrees to maintain all proprietary information disclosed
by the other party to this Agreement (each a "disclosing party") in strict
secrecy and confidence, and not to disclose such proprietary information to
any third party, nor make any use of such information and technology for
its own benefit or gain 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; these agreements and/or policies
shall require them to maintain confidentiality of proprietary information
disclosed by 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.
10.2. Limited Release. The receiving party shall be released from the
obligations of Section 10.1 to the extent that any of the disclosed
information: (a) was already part of the public domain at the time of the
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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 a
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 Section 9.1, Seller may provide
proprietary information of Buyer to its subcontractors and vendors without
Buyer's prior approval provided that WGL first requires any such
subcontractor or vendor to sign a confidentiality agreement which requires
them to keep confidential such Buyer information and not to use it except
for the purpose of performing their obligations to Seller.
10.3. 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 Section 9, shall terminate eight (8) years from the date
of disclosure of the information hereunder and shall survive any earlier
termination of this Agreement.
10.4. Disposal Upon Termination. In the event this Agreement is terminated,
any samples, sketches, or other proprietary material provided by the
disclosing party to the receiving party shall 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.
11. Other Provisions.
11.1. Relationship of the parties. There is no principal-agent relationship
between the parties. Neither party will have any authority to contract,
bind, or act on behalf of the other, and neither party will try to do so.
11.2. Separability and waiver. If any part of this Agreement is not legally
enforceable, only that part will be disregarded and the rest will stay in
effect. If a party waives a particular term or condition, it will be for
one time only, it will not change the Agreement, and the same term or
condition can be enforced again later.
11.3. Entire agreement; changes. This Agreement contains the entire
understanding of the parties regarding this subject and replaces all
previous agreements. There are no written or oral agreements,
understandings, or representations apart from this Agreement. This
Agreement cannot be changed in any way except by a written document that
both parties sign. No interference will be drawn from any difference
between this Agreement and any prior negotiations, letters of intent, or
drafts of this Agreement.
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11.4. Notices. Notices under this Agreement must be in writing. A party can
send notice by U.S. certified or express mail, by express courier service
(e.g., Federal Express), or by telephone fax to the other party, addressed
as follows:
To Buyer at:
Xxxxxxx Xxxxx
President
St. Jude Medical Cardiac Rhythm Management Division
00000 Xxxxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
To Seller at:
Xxxxxx X. Xxxxxxx
Chairman, President & CEO
Xxxxxx Xxxxxxxxxx Technologies, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
or to whatever other address a receiving party may specify from time to time.
The parties will consider that notice is given at the end of two business
days after it is faxed, and/or five business days from the date it is
deposited postage prepaid in the mail or given to an express courier
service. A written receipt will be proof of delivery if it is signed by an
authorized representative of the receiving party at the address above.
11.5. Effect of Termination. Expiration or termination of this Agreement
shall not affect or cause the release of monetary obligation which shall
have accrued prior to such termination, and the parties obligations under
Section 9 and 10 and Sections 3 and 6 of Exhibit A shall continue in effect
until fully satisfied.
11.6. Public Announcements. 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.
11.7. Law. California law will govern this Agreement and its
interpretation, as well as the rights and duties of the parties.
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IN WITNESS OF THIS AGREEMENT, the parties have signed below by their
authorized officers:
PACESETTER, INC. XXXXXX XXXXXXXXXX TECHNOLOGIES, INC.
By: /s/ X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxxx
------------------------------ ----------------------------
Title: V.P. Mfg. Operations Title: COO, EVP
------------------------------ ----------------------------
Date: October 23, 2003 Date: October 17, 2003
------------------------------ ----------------------------
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EXHIBIT A
TO
SUPPLIER PARTNERING AGREEMENT
This Exhibit A sets forth the general terms and conditions of sale for all
Products sold by Seller to Buyer pursuant to the Agreement to which it is
attached.
1. Definitions. For purposes hereof, the following terms shall have the
defined meanings set forth below:
1.1 "Agreement" means the Supplier Partnering Agreement (as amended and
restated) to which this "Exhibit A" is attached.
1.2 "Batteries" means batteries and other power sources (other than
Capacitors), including where the context requires all such Products
manufactured by Seller and sold to Buyer under this Agreement.
1.3 "Capacitors" means wet tantalum and other electrical capacitors,
including where the context requires all such Products manufactured by
Seller and sold to Buyer under this Agreement.
1.4 "Feedthroughs" means all filtered and unfiltered device feedthrough
components, including where the context requires all such Products
manufactured by Seller and sold to Buyer under this Agreement.
1.5 "Components" means machined and molded products, including where the
context requires all such Products manufactured by Seller and sold to Buyer
under this Agreement.
1.6 "Enclosures" means device cases/cans, including where the context
requires all such Products manufactured by Seller and sold to Buyer under
this Agreement.
1.7 "Products" or "Products" means Batteries, Capacitors, Feedthroughs,
Component Parts and Enclosures, including where the context requires all
such Products manufactured by Seller and sold to Buyer under this
Agreement.
1.8 "Consignment Products" means all Products consigned by Seller to Buyer
under this Agreement.
2. Order, Delivery, Payment, Inspection.
2.1 Orders. All Products shall be ordered by Buyer using Buyer's standard
purchase order form which shall set forth, at a minimum, the quantity of
Products ordered, the address of the facility of Buyer (or its affiliate)
to which Product should be shipped and requested delivery dates.
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2.2 Payment Terms. Payment terms are as follows: (a) for Consignment
Products purchased by Buyer, by the thirtieth (30th) day after the day on
which Consignment Products shall have been withdrawn by Buyer or (b) for
all other Batteries and Components purchased by Buyer, net 30 days from the
date of the invoice, F.O.B. Clarence, New York or point of shipment,
whichever is applicable. Payment terms for tooling and engineering charges
are net 30 days from the date of the invoice.
2.3 Delivery. Except for any Consignment Products, Seller shall deliver
Products to Buyer's facility at Valley View Court in Sylmar, California,
and/or to such other location(s) as Buyer may designate. Unless Buyer gives
Seller written instructions as to the method of shipment and carrier,
Seller shall select the methods of shipment and the carrier for the
respective purchase order. Seller shall prepay transportation and similar
charges upon shipment. Except for Consignment Products, title to all
Products conforming to Buyer's purchase order shall pass, free and clear of
all encumbrances, at the FOB shipping point, which shall be Seller's
facility. Buyer assumes and agrees to bear all risk of damage or loss to
the goods after delivery by Seller to the carrier at the FOB shipping
point. Buyer hereby releases Seller from any and all claims and liability
with respect to any such in-transit damages or losses to the goods. Buyer
shall be responsible for securing insurance coverage to cover shipments and
deliveries hereunder.
2.4 Inspection. Seller shall perform testing to ensure that Products
delivered by Buyer meet all applicable specifications. Buyer inspection of
incoming Products will rely upon Seller testing and may consist of an
examination of Seller's testing documentation as well as independent
testing by Buyer. Notwithstanding the foregoing, Buyer shall attempt to
inspect all Products (including the Consignment Products) within thirty
(30) days, but not to exceed sixty (60) days, and notify Seller if any of
the Products fail to meet Buyer's specifications and quality standards for
such Products.
2.5 Acceptance. Buyer may reject any shipments or deliveries of Products,
which are short, nonconforming, defective or deficient and may request
correction and/or replacement. Rejected shipments or deliveries of Products
shall at the request of Seller be set aside for Seller inspection, or at
the request of Seller shipped freight prepaid to Seller. All Products
returned to Seller shall be accompanied by a copy of their original
shipping documents and the name and phone number of the person at Buyer to
be contacted regarding such return. Promptly upon receipt of notice of such
shortage, non-conformance, defect or deficiency, Seller shall immediately
notify Buyer:
(a) as to how Seller will replace the defective or deficient Products
upon return to Seller, ship replacement Products, or otherwise
promptly correct such shortage, non-conformance, or deficiency;
and/or
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(b) whether such shipment of Products shall be set aside and held by
Buyer or returned to Seller and the address to which such
affected Products should be returned, or whether such Products
should otherwise be disposed of.
If Buyer elects to cancel or rescind such purchase, Seller shall promptly
refund and reimburse Buyer the price paid by Buyer for such purchase,
including freight and shipping costs incurred by Buyer in such purchase,
prior to the return of the same to Seller. If Buyer elects to have the
product replaced, Seller shall bear or shall reimburse Buyer for all costs
and expenses incurred by Buyer to repackage, ship and return affected
Products to Seller and shall issue a credit memo for the amount of the
purchase price of the returned Products.
2.6 Force Majeure. In the event of fire, explosion, strikes, war, act of
any governmental agency, material or labor shortage, transportation
contingency, act of God or any other causes beyond the control of Seller
("Force Majeure"), Seller shall not be liable for any delay in shipment or
non-delivery of Products covered by this Agreement arising from Force
Majeure, and Buyer shall be bound to accept the delayed shipment or
delivery made within a reasonable time. In the event of Force Majeure,
Buyer shall be excused for the failure to take and pay for Products ordered
under this Agreement, until such Force Majeure condition is removed. In the
event such conditions cannot be corrected by the party affected within six
(6) months of the date of the occurrence of a Force Majeure event, then the
other party shall have the option to terminate this Agreement upon one (1)
month prior notice.
2.7 Outside Testing. In addition to Seller's testing and Buyer's inspection
under Section 2.4 above, Buyer may engage, at its sole expense, a third
party (hereinafter, "Testing Organization") to perform testing of Batteries
sold to Buyer hereunder, subject to the following conditions:
(a) The Testing Organization must be independent and not
affiliated or associated with Buyer in any way;
(b) Seller shall have approved the Testing Organization in
writing, which approval shall not be unreasonably denied. In
that regard, Buyer shall notify Seller in advance of the
name, address, qualifications and ownership of the Testing
Organization; and
(c) The Testing Organization shall have agreed in writing (i) to
follow all reasonable safety and use directions of Sellers'
applicable to the Batteries; (ii) not to reverse engineer,
disassemble or destructively test any Batteries of Seller
that are the subject of any testing or otherwise; and (iii)
to promptly provide to Seller copies of all test reports and
other documentation relating to the Batteries that it
delivers or makes available to Buyer.
3. Warranty, Limitation of Liability.
3.1 Product Warranty.
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(a) Seller warrants that the Products delivered to Buyer will
meet the applicable specifications for such Products and
will be free from defects in materials and workmanship at
the time of sale. Seller's sole obligation under this
Warranty is the repair or replacement, at its election, of
any Product, which is found, upon Seller's inspection not to
meet warranty set forth in Section 3.1. Such product will be
repaired or replaced without charge provided that, (1) prior
written approval is required before returning any product,
and (2) any product return sent to Seller without prior
written approval will be returned to the sender, freight
collect.
(b) This Warranty does not apply to depletion, wear and/or any
failure occurring as a result of any of the following:
normal use, abuse, misuse, any alteration or modification
made to any Product without the express written consent of
Seller, attempted disassembly, neglect, improper
installation, or any other use inconsistent with any
applicable law, rule, regulation or governmental directive,
or any use inconsistent with the specifications or warning
or recommended operating practices specific to the Product.
(c) THE WARRANTY SET FORTH IN THIS SECTION 3.1 IS IN LIEU OF ALL
OTHER WARRANTIES (EXCEPT OF TITLE), WRITTEN OR ORAL,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT. BUYER EXPRESSLY ASSUMES ALL LIABILITY
ARISING FROM OR IN CONNECTION WITH THE USE OF THE PRODUCTS
PURCHASED HEREUNDER, WHETHER BASED ON CONTRACT, WARRANTY,
TORT OR OTHERWISE AND AGREES TO HOLD SELLER HARMLESS FROM
SUCH LIABILITIES AND CLAIMS.
3.2 LIMITATION OF LIABILITY. THE REMEDIES OF BUYER IN THE WARRANTY SET
FORTH IN SECTION 3.1 WITH RESPECT TO ALL PRODUCTS, EXCEPT AS SET FORTH IN
SECTION 3.3 BELOW, ARE EXCLUSIVE, AND THE TOTAL LIABILITY OF SELLER WITH
RESPECT TO ANY PRODUCT SOLD TO BUYER UNDER THIS AGREEMENT, OR FROM
DELIVERY, INSTALLATION OR REPAIR COVERED BY OR FURNISHED UNDER ANY SALE TO
BUYER, WHETHER BASED ON CONTRACT, WARRANTY, NEGLIGENCE, INDEMNITY, STRICT
LIABILITY, OR OTHERWISE, SHALL NOT EXCEED THE PURCHASE PRICE OF THE PRODUCT
UPON WHICH SUCH LIABILITY IS PLACED. SELLER SHALL IN NO EVENT BE LIABLE TO
BUYER OR TO ANY SUCCESSOR IN INTEREST OR ANY BENEFICIARY OR ASSIGNEE
THEREOF RELATING TO THE SALE OF PRODUCT FOR ANY CONSEQUENTIAL, INCIDENTAL,
INDIRECT, SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF SUCH SALE OR ANY
DEFECTS IN, OR FAILURE OF, OR MALFUNCTION OF THE PRODUCT UNDER SUCH SALE,
INCLUDING BUT NOT LIMITED TO, DAMAGES BASED UPON LOSS OF USE, LOST PROFITS
OR REVENUE, INTEREST, LOST GOODWILL, INCREASED EXPENSES AND/OR CLAIMS OF
CUSTOMERS OF BUYER, WHETHER OR NOT SUCH LOSS OR DAMAGE IS BASED ON
CONTRACT, WARRANTY, NEGLIGENCE, INDEMNITY, STRICT LIABILITY OR OTHERWISE.
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3.3 Limited Patent Indemnification.
(a) Seller agrees to indemnify and hold harmless Buyer, its affiliates and
their officers and directors (each, an "Indemnified Party") against any and
all amounts paid by any such Indemnified Party to any third party
("Person") by way of damages and, subject to Paragraph (b) of this Section
3.3, legal fees, other defense costs and amounts paid in settlement arising
out of any claim, legal action or proceeding by such Person asserting that
any Product as supplied to Buyer under this Agreement infringes any patent
or other intellectual property rights of such Person specifically relating
to such Product or the process of its manufacture by Seller (and not its
manner of use by Buyer or any affiliate of Buyer).
(b) If a claim by a Person is made against any Indemnified Party, and if
the Indemnified Party intends to seek indemnity with respect thereto under
this Section 3.3, the Indemnified Party shall promptly notify Seller of
such claim in writing ("Indemnity Claim Notice"). Seller shall be entitled,
but not obligated, to settle or assume the defense of such claim, including
the employment of counsel reasonably satisfactory to Seller. If Seller
elects to settle or defend such claim, Seller shall notify the Indemnified
Party within thirty (30) days after receipt of Buyer's Indemnity Claim
Notice of Seller's intent to do so. If Seller elects not to settle or
defend such claim or fails to notify the Indemnified Party of the election
within thirty (30) days after receipt of the Indemnity Claim Notice, the
Indemnified Party shall have the right to contest, settle or compromise the
claim provided that, regardless of which party is controlling the
settlement or defense of any claim, (a) both the Indemnified Party and
Seller shall act in good faith, (b) Seller shall permit the Indemnified
Party to participate in such settlement or defense through counsel chosen
by the Indemnified Party, (c) no entry of judgment or settlement of a claim
may be agreed to by an Indemnified Person without the prior written consent
of Seller, and (d) Seller shall reimburse the Indemnified Party for the
full amount of such claim and the related expenses as incurred by the
Indemnified Party pursuant to this Section 3.3; provided that, if Seller
does assume the defense of any claim hereunder, Seller shall not be
responsible for the Indemnified Party's legal fees, costs and/or expenses
from the date Seller assumes such defense. The controlling party shall upon
request deliver, or cause to be delivered, to the other party copies of all
correspondence, pleadings, motions, briefs, appeals or other written
statements relating to or submitted in connection with the settlement or
defense of any such claim, and timely notices of any hearing or other court
proceeding relating to such claim.
4. Compliance with Law.
4.1 Violation of Law. Buyer and Seller shall each strictly observe and
comply with all federal and local laws and regulations, which may govern
the manufacture, sale, handling and disposal of any Products herein
specified. Violation of any such law or regulation may be viewed as a
breach of the Agreement, and may be cause for termination or suspension of
sales thereunder. Nothing herein shall be construed to allow either party
the right to cancel this Agreement for any inadvertent error or minor
violation of any law or regulation by the other party.
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4.2 FDA Compliance. During the term of this Agreement Buyer shall have
responsibility for obtaining at its expense, in its name and at its
discretion any necessary device regulatory approvals from the U.S. Food and
Drug Administration (i.e. PMA's or 501(k)'s as the case may be), and
applicable regulatory agencies of such other countries in which any product
of Buyer incorporating the Products will be sold. Seller shall supply Buyer
with all documents, instruments, information, reports and advice and
general assistance as is necessary to complete, and as is reasonably
requested by Buyer in connection with such regulatory approval efforts.
4.3 Seller Compliance. Upon not less than three (3) business days' notice,
Seller will provide such Buyer personnel as Buyer reasonably deems
appropriate with reasonable access from time to time to Seller's facilities
and records for the purpose of confirming Seller's compliance with
requirement as noted in this Section 4, and for the further purpose of
confirming, if reasonably deemed necessary by Buyer, Seller's compliance
with applicable specifications for Products.
5. Consignment. If Buyer requests Seller to consign any Products to Buyer,
the following terms and conditions shall apply:
(a) Consignment Products shall be delivered to Buyer location at
which Buyer will use the Products, based upon information
supplied by Buyer to Seller. However, Seller shall have the
option not to make any such shipment unless Buyer shall have
paid all sums owing with respect to all previous quantities
of Products purchased by Buyer.
(b) Seller shall use Federal Express or UPS or other recognized
courier services to ship Consignment Products, as directed
by Buyer, and shall charge Buyer's account with such courier
service. Consignment Products shall be received by Buyer and
stored by Buyer as Seller's property. All charges and
expenses for receiving, handling, and storing such material
shall be paid by Buyer. The Consignment Products in all
cases shall be carefully segregated from other goods either
of the same or different character belonging either to Buyer
or to any third person, shall be marked as Seller's
property, and shall be stored in an area in Buyer's
facilities separate from and not mingled with other goods of
Buyer or of any third person.
(c) Buyer shall inspect all Products (including the Consignment
Products) and notify Seller within one month if any of the
Products fail to meet Buyer's specifications and quality
standards for such Products.
(d) Buyer shall comply with all laws which might in any way
affect Seller's ownership of the Consignment Products from
time to time stored in Buyer's facility(s) and shall
indemnify and hold harmless Seller from and against all
loss, damage, and expense arising out of any levy,
attachment, lien or process involving the Consignment
Products. Buyer shall be responsible for, and shall
indemnify Seller against, any loss or shrinkage in the
quantity of the Consignment Products while so stored,
whether such loss or shrinkage is caused by theft or
pilferage or by fire, flood, tornado or other similar
catastrophe. Buyer shall purchase and maintain insurance
covering all such losses and naming Seller as additional
insured.
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(e) Buyer shall keep at all times a complete list or inventory
of the Consignment Products so stored, copies of which list
shall be furnished to Seller upon request. Upon not less
than three (3) business days prior notice, Seller's
representatives shall have reasonable access to the
Consignment Products at Buyer's facilities for the purpose
of verifying such lists or inspecting the condition of
Consignment Products.
(f) All public charges, whether in the nature of sales,
occupational or other taxes or assessment or license fees,
which shall be levied or assessed against the Consignment
Products at Buyer's facilities, or against Buyer or Seller
by reason hereof, by any federal, state or municipal
authority, shall be paid by Buyer.
(g) All Consignment Products shall remain the property of Seller
and shall be held by Buyer as such until withdrawn from the
consigned stock and purchased by Buyer pursuant to this
Agreement. Buyer will withdraw Products from the inventory
of Consignment Products on a first-in-first-out basis for
each product model.
(h) From time to time, as Buyer shall purchase Consignment
Products from Seller, it may withdraw the Consignment
Products so purchased from Seller's consigned stock of the
product at Buyer's facility(s). Upon each such withdrawal
for purchase by Buyer pursuant to this Agreement, title to
the Consignment Products so withdrawn shall pass to Buyer.
6. Obligations Upon Termination or Certain Changes.
(a) Upon expiration or termination of this Agreement for any
reason whatsoever or if Buyer changes the model mix of, or
discontinues, any Products which it requires, Buyer shall
purchase, or be deemed to have purchased from Seller, all of
the remaining Consignment Products located at a Company
facility, which met Buyer's specifications and quality
standards at the time of receipt, as of the date of
expiration or termination, at the prices in effect at such
time. Payment shall be made in accordance with Section 2.2
13
(b) Upon expiration or termination of this Agreement for any
reason whatsoever or if Buyer changes the model mix of, or
discontinues, any Products which it requires, Buyer agrees
to purchase, within six (6) months, all Products that Seller
then holds either (i) as finished inventory or (ii)
work-in-progress ("WIP") up to the maximum amount of
inventory that Seller is required to maintain under Section
4 of the Agreement (provided, however that, for any WIP,
Buyer shall only be required to reimburse Seller for the
cost of any such material that Seller cannot reasonably use
for other product(s).
7. New Technology.
7.1 During the Initial Term of this Agreement and any extension thereof,
Seller agrees to offer, develop and manufacture for, and to sell to,
Products and for Buyer's products incorporating any technology or
intellectual property (collectively, "Technology") for such Products which
Seller now possesses or may hereafter develop or acquire, provided that
Seller is not otherwise restricted by law or contract including but not
limited to restrictions due to intellectual property rights owned by third
parties or designs the development of which were paid for in whole or in
part by a customer from selling Products incorporating such Technology to
Buyer ("New Products"). All New Products shall be subject to and covered by
this Agreement.
7.2 For any New Product developed under this Section 7 for Buyer, the
parties agree to negotiate pricing for such New Product in good faith.
8. Continuity of Supply. Seller acknowledges that Buyer has certain
concerns regarding the continuity of its supply source for Products in the
event that a change of control occurs with respect to Seller. In that
regard, Seller agrees as follows:
8.1 This Agreement is binding on Seller's successors and assigns.
8.2 In the event that Seller sells all or substantially all of its assets
to any third party, Seller shall require any such purchaser to assume and
agree to perform all of Seller's obligations under and for the term of this
Agreement.
8.3 In addition, Seller agrees that, in connection with any sale of a
controlling interest of Seller to any direct competitor of Buyer
("Acquiror"), Seller will notify any such potential Acquiror of its
obligations under this Agreement.
8.4 "Controlling interest" means:
8.4.1 The acquisition by a competitor of Buyer of twenty-five percent (25%)
or more of any class of securities of Seller;
14
8.4.2 The acquisition by a competitor of Buyer of a right (whether by means
of warrants, options, or otherwise) to acquire twenty-five percent (25%) or
more of any class of securities of Seller;
8.4.3 The granting of a right to representation on the Seller's board of
directors to a competitor of Buyer (or a director, officer, employee, or
agent of a competitor of Buyer) or the election to Seller's board of
directors by a competitor of Buyer (or director, officer, employee or agent
of a competitor of Buyer); or
8.4.4 The establishment by the Seller of a joint venture, that engages or
proposes to engage in any business in which Buyer then engages, in which a
competitor of Buyer owns ten percent (10%) or more of any class of
securities or has a right to ten percent (10%) or more of the profits of
the venture.
9. Option to Extend the Agreement. Buyer shall have the option to extend
the term of this Agreement beyond the Initial Term for a period of two (2)
years ("Option Extension Period") by delivering written notice to Seller
not less than sixty (60) days prior to the extension date. The Option
Extension Period, however, is subject to all of the following conditions:
9.1 The prices for Batteries, Feedthroughs, Components and Enclosures
during the Option Extension Period shall be, at the option of * either: (a)
the * for each such Product * , or (b) prices for Batteries, Feedthroughs,
Components and Enclosures * for all Batteries (in the aggregate), for all
Feedthroughs (in the aggregate), for all Components (in the aggregate) and
for all Enclosures (in the aggregate) sold to Buyer in each year of the
Option Extension Period which is equal to * obtained by Seller for all
Batteries (in the aggregate), for all Feedthroughs (in the aggregate), for
all Components (in the aggregate) and for all Enclosures (in the aggregate)
, respectively, * ;
9.2 The prices for Capacitors will * during the Option Extension Period.
9.3 If * elects pricing under Section 9.1(b) above, Seller will notify
Buyer as soon as is reasonably possible, as to the pricing applicable for
the Option Extension Period. * as to the amount of the * that * with
respect to Batteries (in the aggregate), Feedthroughs (in the aggregate),
Components (in the aggregate) and Enclosures (in the aggregate),
respectively. Seller will cooperate with * so that the * within thirty (30)
days of its appointment by Buyer. If the * of the price quoted by Seller,
then Buyer will be solely responsible for the * of the * . If the price
quoted by Seller is more than * , then Seller will be solely responsible
for the * of the * .
9.4 " * " under Section 9.1(b) above shall: (a) be calculated according to
Generally Accepted Accounting Principles (GAAP) and in a manner consistent
with Seller's previous practices; and (b) * or * .
15
9.5 Seller, Buyer, and * will cooperate in good faith to establish the
relevant * of * to be included in the * of * . If Seller and Buyer have not
agreed to the composition of the relevant * within thirty (30) days, then
the relevant * will be finally * .
9.6 Seller and Buyer will cooperate and negotiate in good faith in
connection with allocating the aggregate price increases permitted by Buyer
under Section 9.1(b) among individual Products to be purchased by Buyer
during the Option Extension Period.
16
EXHIBIT B
MEDICAL POWER SOURCES
PRICING AND INVENTORY LEVEL
I. Battery
A. Pricing
Lithium iodine Bradycardia Device Batteries
Lithium Iodine Pricing
------------------------- ------------------- ------------------- -------------------
Model 2004 2005 2006
------------------------- ------------------- ------------------- -------------------
8077 $ * $ * $ *
------------------------- ------------------- ------------------- -------------------
8711 $ * $ * $ *
------------------------- ------------------- ------------------- -------------------
9107 $ * $ * $ *
------------------------- ------------------- ------------------- -------------------
9438 $ * $ * $ *
------------------------- ------------------- ------------------- -------------------
9918 $ * $ * $ *
------------------------- ------------------- ------------------- -------------------
1. Purchase Requirements: * % of Buyer's bradycardia device
battery demand to be purchased from Seller
2. Pricing for current models, standard shape and pin
modifications
SVO Multiplate Defibrillator Batteries
1. Purchase Requirements: Minimum of * % of Buyer's tachycardia
device battery demand to be purchased from Seller
2. $ * initial price for all models (excluding * )
3. * % annual price reduction for models > * units in previous
year
4. "Units per year" determined by battery model on a calendar
year basis
5. Models * excluded from annual price reduction
6. Pricing applies to current technologies referred to as High
Temperature Pressed Powder / High Temperature Sheet
(HTPP/HTS).
7. Price premiums based upon shape and /or terminal
modification complexity apply
17
----------------------- ----------------
Model 2004
----------------------- ----------------
----------------------- ----------------
----------------------- ----------------
----------------------- ----------------
2255 $ *
----------------------- ----------------
----------------------- ----------------
9443 $ *
----------------------- ----------------
----------------------- ----------------
2156 $ *
----------------------- ----------------
----------------------- ----------------
2150 $ *
----------------------- ----------------
----------------------- ----------------
Aegis $ *
----------------------- ----------------
Quasar High Rate Cell Pricing:
1. Quasar High Rate battery technology defined as High Rate
SVO/CFx hybrid
2. Purchase Requirements: Minimum of * % of Buyer's tachycardia
device battery demand to be purchased from Seller
3. $ * initial price for all * , * or * plate models
4. Price premium applies for all odd-number plate cells and
cells > * plates
8. * % annual price reduction for models > * units in previous
year
5. "Units per year" determined by battery model on a calendar
year basis
6. A price premium may be applied for shape and/or terminal
modification complexity
Carbon Monofluoride Basic Cell Pricing (CFx)
-------------------- ----------------------------
Units/Year Price
-------------------- ----------------------------
-------------------- ----------------------------
* - * $ *
-------------------- ----------------------------
-------------------- ----------------------------
* $ *
-------------------- ----------------------------
1. Purchase Requirements: * % of Buyer's bradycardia device
battery demand to be purchased from Seller
2. CFx "Units per Year" include all models on a calendar year
basis
3. Minimum annual quantity per model 500 pcs.
4. CFx pricing shown above is for stainless steel encased,
single cathode plate construction cells
5. Price premiums based upon shape and/or terminal modification
complexity apply
Quasar Medium Rate (MR) Cell Pricing
-------------------- ----------------------------
Units/Year Price
-------------------- ----------------------------
-------------------- ----------------------------
* - * $ *
-------------------- ----------------------------
-------------------- ----------------------------
* $ *
-------------------- ----------------------------
1. Purchase Requirements: * % of Buyer's bradycardia device
battery demand to be purchased from Seller
2. Quasar MR "Units per Year" include all models on a calendar
year basis
18
3. Minimum annual quantity per model 500 pieces.
4. Quasar MR pricing shown above is for stainless steel
encased, single cathode plate construction cells
5. Price premiums based upon shape and/or terminal modification
complexity apply
B. Battery Inventory
1. Seller's obligation under the Agreement to maintain
inventory is limited to the level reflected in "Inventory
Requirement" column of the table set forth below (subject to
Item 5 below).
2. The "Inventory Requirement" is that Seller maintain
inventory that can be processed by Seller to completion and
shipped to Buyer within 5 calendar days
3. Seller inventories will be replenished within a period of 40
calendar days.
4. All inventory levels adjusted quarterly per Buyer's updated
forecast
5. Safety Stock requirement for Buyer's location in Sweden (AB)
is limited to Consignment Inventory only
-------------------------------------------------------------
Battery Required Inventory
-------------------------------------------------------------
Lithium Iodine 15% of annual forecast
-------------------------------------------------------------
SVO 8% of annual forecast
-------------------------------------------------------------
CFx 15% annual forecast
-------------------------------------------------------------
Quasar HR 8% of annual forecast
-------------------------------------------------------------
Quasar MR 8% of annual forecast
-------------------------------------------------------------
C. Exclusivity
1. Lithium Iodine Power Sources (Pacemaker Applications)
1.1. The cell model/design will remain exclusive to Buyer for two
(2) years after shipment of the first implantable grade
unit.
1.2. In the event Buyer requests the cell to continue exclusivity
in perpetuity, the following course of action will apply:
1.2.1. Upon shipment of the * unit in the same model
configuration, Buyer must send Seller a letter stating
Buyer's intent of exclusivity in perpetuity, and pay
Seller the sum of $ * .
2. Shapes that are less than 5 mm thick.
2.1. The cell will remain exclusive to Buyer for two (2) years
after shipment of the first implantable grade unit. 2.2. In
the event Buyer requests the cell to continue exclusivity in
perpetuity, the following course of action will apply:
2.2.1. Upon shipment of the * unit in the same model
configuration, Buyer must send Seller a letter stating
Buyer's intent of exclusivity in perpetuity, and pay Seller
the sum of $ * .
19
3. Solid Cathode Multiplate Power Sources (High Rate Defibrillator
Applications)
3.1. The cell will remain exclusive to Buyer for three (3) years after
shipment of the first implantable grade unit.
3.2. In the event Buyer requests the cell to continue exclusivity in
perpetuity, the following course of action will apply:
3.2.1. Upon shipment of the * unit in the same model
configuration, Buyer must send Seller a letter stating
Buyer's intent of exclusivity in perpetuity, and pay Seller
the sum of $ * .
II. Capacitor:
A. Wet Tantalum Capacitor Pricing:
----------------------------------- --------------------------
Device Per Set of 4
----------------------------------- --------------------------
----------------------------------- --------------------------
Epic Plus $ *
----------------------------------- --------------------------
----------------------------------- --------------------------
Atlas II $ *
----------------------------------- --------------------------
1. Price Premiums for terminal modification complexity
and paralyne coating apply
B. Inventory
--------------------------------------------------------------
Capacitor Required Inventory
--------------------------------------------------------------
All 10% of annual forecast
Capacitors
--------------------------------------------------------------
C. Exclusivity
1. The capacitor pack will remain exclusive to Buyer for two
(2) years after shipment of the first implantable grade
unit.
2. In the event Buyer requests the pack to continue exclusivity
in perpetuity, the following course of action will apply:
Upon shipment of the * pack in the same model configuration,
Buyer must send Seller a letter stating Buyer's intent of
exclusivity in perpetuity, and must pay Seller the sum of $
* .
20
EXHIBIT C
COMPONENTS - FEEDTHROUGHS
PRICING AND INVENTORY LEVELS
III. Components
A. Feedthrough and Filtered Feedthrough Pricing
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
WGT Part SJM Part Current
Number Number Selling Price 2004 Price 2005 Price 2006 Price
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
Feedthrough Components
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
Tripolar 0959901 06327659 $ * $ * $ * $ *
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
Bipolar 0977101 02054583 $ * $ * $ * $ *
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
Quad 0970001 8001713 $ * $ * $ * $ *
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
Quad 0961101 3001206 $ * $ * $ * $ *
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
1540 EPIC HF 1540M102PXC 1080514-001 $ * $ * $ * $ *
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
ATLAS 2 4 PIN 1540M102PXE 10009230 $ * $ * $ * $ *
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
ATLAS 2 6 PIN 2060M102PXH 10009229 $ * $ * $ * $ *
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
2060shorter lead 2060M102PXE 1080492-004 $ * $ * $ * $ *
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
Photon micro 2 2060M102PXG 10007259 $ * $ * $ * $ *
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
Aegis 8-Pin 1016501 TBD $ * $ * $ * $ *
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
Aegis 6-Pin 1018301 TBD $ * $ * $ * $ *
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
IB Alternative (Surface XXX XXX $ * $ * $ * $ *
Mount)
---------------------------- ------------------ ----------------- ---------------- ------------- ------------- --------------
1. Purchase Requirements: Minimum of * % of Buyer's product
demand for items listed above to be purchased from Seller
2. 1B Alternative (part #TBD in table above) Supplier Pricing
and Buyer Demand requirements become effective within six
months after successful qualification of part
21
EXHIBIT D
COMPONENTS - MACHINED PARTS
PRICING AND INVENTORY LEVELS
B. Platinum Components Pricing
----------------------- ----------------- --------------------- --------------- -------------- -------------
WGT Part SJM Part
Number Number 2004 Price 2005 Price 2006 Price
----------------------- ----------------- --------------------- --------------- -------------- -------------
Platinum Components
----------------------- ----------------- --------------------- --------------- -------------- -------------
Tip 1005801 02106334/6042378 $ * $ * $ *
----------------------- ----------------- --------------------- --------------- -------------- -------------
Ring 1005701 02106342/6042379 $ * $ * $ *
----------------------- ----------------- --------------------- --------------- -------------- -------------
Ring 0947001 06112523 $ * $ * $ *
----------------------- ----------------- --------------------- --------------- -------------- -------------
Eluting Tip 0959201 6041783 $ * $ * $ *
----------------------- ----------------- --------------------- --------------- -------------- -------------
Coated Helix 0976301 6041992-002 $ * $ * $ *
----------------------- ----------------- --------------------- --------------- -------------- -------------
Tip 0956501 0602506 $ * $ * $ *
----------------------- ----------------- --------------------- --------------- -------------- -------------
Tip 0957001 6041706 $ * $ * $ *
----------------------- ----------------- --------------------- --------------- -------------- -------------
1. Purchase Requirements: Minimum of * % of Buyer's product
demand for items listed above to be purchased from Seller
2. Coated Helix (STJ part #6041992-002 above) Supplier Pricing
and Buyer Demand Requirements become effective within six
months after successful qualification of part
C . Other Machined/Molded Components Pricing
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
WGT Part
Number 2004 Price 2005 Price 2006 Price
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
Machined Parts
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
SET SCREW ALL 6041534-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
WASHER 6041701-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
L" CONNECTOR ASSEMBLY 7001630-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
L" CONNECTOR ASSEMBLY/MICRONY 7001441-012 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
SPACER 6041696-002 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
SET SCREW ALL 6041504-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
RING 6041697-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
CONNECTOR PIN 6041555-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
PROXIMAL RING 6041266-002 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
CRIMP CORE 6041693-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
ANCHOR-PROFILE 8008873 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
SEPTUM RING 3001236 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
HEADER COUPLING 6041994-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
CONNECTOR RING 6041987-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
CONNECTOR BLOCK 6041809-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
ICD CONNECTOR BLOCK 10001534 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
ICD CONNECTOR BLOCK 10001535 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
ICD CONNECTOR BLOCK 10001536 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
WELDED CONNECTOR ASSEMBLY 7002237-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
WELDED CONNECTOR ASSEMBLY 7002236-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
WELDED CONNECTOR ASSEMBLY 7002323-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
WELDED CONNECTOR ASSEMBLY 7002323-001 $ * $ * $ *
-------------------------------------------------- --------------------- ----------------- --------------- ---------------
22
1. Purchase Requirements: Minimum of * % of Buyer's product
demand for items listed above to be purchased from Seller
D. Component Inventory
1. Seller's obligation to maintain inventory is limited to the
level reflected in "Inventory Requirement" column of the
table set forth below (subject to Item 5 below).
2. The "Inventory Requirement" is that Seller maintain
inventory that can be processed by Seller to completion and
shipped to Buyer within 5 calendar days
3. Seller inventories will be replenished within a period of 40
calendar days.
4. All inventory levels adjusted quarterly per Buyer's updated
forecast
5. Safety Stock requirement for Buyer's location in Sweden (AB)
is limited to Consignment Inventory only
---------------------------------------------------------------
Component Required Inventory
---------------------------------------------------------------
Feedthroughs 15% of annual forecast
---------------------------------------------------------------
Filtered
Feedthroughs 15% of annual forecast
---------------------------------------------------------------
---------------------------------------------------------------
Machined Parts 10% annual forecast
---------------------------------------------------------------
Platinum Parts 10% annual forecast
---------------------------------------------------------------
Molded Parts 10% annual forecast
---------------------------------------------------------------
23
EXHIBIT E
ENCLOSURES
PRICING AND INVENTORY LEVELS
A. Enclosure Pricing
------------------------- --------------------------------------------------------------------------------------------
Price
------------------------- --------------------------------------------------------------------------------------------
Part Product 2004 2005 2006
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
6011200-001 Affinity $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
6011200-002 Affinity $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
2101590 Affinity AB $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
2101582 Affinity AB $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
6012054-001 Integrity $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
6012054-002 Integrity $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
2065589 Integ. Micro AB $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
2074441 Integ. Micro AB $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
6042356-001 Photon Micro $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
6042356-002 Photon Micro $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
10007741 Photon $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
10007742 Photon $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
10008938 Atlas $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
10008939 $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
10008940 $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
10008941 Atlas $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
*6231463 Case Left Side AB $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
*6231471 Case Right Side AB $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
10006573 Bathtub Anchor $ * $ * $ *
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
1. Purchase Requirements: * % of Buyer's overall enclosure
demand to be purchased from Seller.
B. Enclosure Inventory
---------------------------------------------------------------
Enclosure Required Inventory
---------------------------------------------------------------
All Enclosures 10% of annual forecast
---------------------------------------------------------------
24