EX-10.4 11 ex10-4.htm EXHIBIT 10.4 ex10-4.htm Exhibit 10.4 Confidential Treatment Requested SUPPLY AGREEMENT This SUPPLY AGREEMENT (the “ Agreement ”), effective the 14 th day of March, 2016 (the “ Effective Date ”) is between Greatbatch Ltd., located at 10000 Wehrle Drive, Clarence, New York 14031, (“ Greatbatch ”) and QiG Group, LLC , a Delaware limited liability company, located at 5700 Granite Parkway, Suite 960, Plano, Texas, 75024 (“ QiG Group ”). Greatbatch and QiG Group are referred to collectively as the “Parties” and individually as a “Party”. RECITALS: WHEREAS, QiG Group desires to purchase the Relevant Project Components (as defined below) exclusively from Greatbatch; WHEREAS, Greatbatch is in the business of supplying Relevant Project Components; and WHEREAS, the Parties desire to terminate, replace and supersede the Umbrella Agreement between Greatbatch and QiG Group, dated August 28, 2009 and hereby establish the new terms and conditions that shall apply to QiG Group’s exclusive purchase of Relevant Project Components from Greatbatch. NOW, THEREFORE, in consideration of the mutual covenants contained herein, Greatbatch and QiG Group hereby agree as follows: I. DEFINITIONS As used in this Agreement, the following capitalized terms, whether used in the singular or plural, shall have the meanings set forth in this Article I: A. “ Acknowledged Order ” has the meaning set forth in Section VIII.A. B. “ Affiliate ” means, with respect to any Person, any other Person which controls, is controlled by or is under common control with such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to control another Person if any of the following conditions is met: (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the election of directors, and (b) in the case of non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities. For purposes of this Agreement, in no event shall QiG Group or any of its Affiliates be deemed Affiliates of Greatbatch (or any of its Affiliates) nor shall Greatbatch or any of its Affiliates be deemed Affiliates of QiG Group (or any of its Affiliates). CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. C. “ Agreement ” has the meaning as described in the Preamble. D. “ Change of Control ” means (i) a consolidation or merger of a Party or other change of control transaction (other than a merger to reincorporate a party in a different jurisdiction) in which the shareholders or members, as applicable, of a Party immediately prior to such transaction do not continue to hold a greater than 50% interest in the successor or survivor entity immediately following such transaction, (ii) a transaction or series of transactions that results in the transfer of more than 50% of the voting power of a Party to an unaffiliated Person or (iii) the sale, lease, transfer or other disposition of all or substantially all of the assets of a Party (which shall include any effective transfer of such assets regardless of the structure of any such transaction as a license or otherwise). E. “ Confidential Information ” of a Party means any and all information of a confidential or proprietary nature disclosed by a Party under this License Agreement, whether in oral, written, graphic or electronic format, which includes, but is not limited to, Trade Secrets, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, diagrams, data, business activities and operations, customer lists, reports, studies and other technical and business information. F. “ Consigned Products ” has the meaning set forth in Section VIII.A. G. “ Consignment Inventory ” has the meaning set forth in Section VIII.B. H. “ Consignment Orders ” has the meaning set forth in Section VIII.A. I. “ Exercise Period ” has the meaning set forth in Section II.C. J. “ Effective Date ” has the meaning as described in the Preamble. K “ Facility Approval Notice ” has the meaning set forth in Section IV.B. L. “ FDA ” means the U.S. Food & Drug Administration or any successor entity thereto. M. “ Field of Use ” means spinal cord stimulation. N. “ Force Majeure ” has the meaning set forth in Section V.N. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 2 - O. “ Greatbatch ” has the meaning as described in the Preamble. P. “ Greatbatch Indemnitees ” has the meaning set forth in Section X.C. Q. “ Improvements ” has the meaning set forth in Section XII.B. R. “ Initial Term ” has the meaning set forth in Section II.B. S. “ Intellectual Property ” means all rights held by a Party in its technology, products and business information, all or some of which may constitute Confidential Information, and including but not limited to: patent rights, copyrights, trademark rights, goodwill, inventions, improvements, discoveries, designs, modifications, data, business information, financial information, clinical information and data, regulatory information, trade secret rights, mask work, know how rights and other intellectual property and proprietary rights. T. “ Joint IP ” has the meaning set forth in Section XII.B. U. “ Legal Requirements ” means any federal, state, local, provincial, foreign, international, multinational or other statute, law, treaty, rule, regulation, guideline, administrative order, directives, ordinance, constitution or principle of common law (or any interpretation thereof by a governmental entity). V. “ Licensed IP ” has the meaning set forth in the Restricted License Agreement and the Unrestricted License Agreement. W. “ Manufacturing Request ” has the meaning set forth in Section II.C. Y. “ Person ” means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof). Z. “ Product ” means QiG Group’s Algovita spinal cord stimulation system and its related parts and components that are based on, use or incorporate the Licensed IP (the “Algovita System”) and such other products, parts and components, including replacement parts and components, that may be incorporated within, used in conjunction with or sold as part of the Algovita System as may be mutually agreed upon by the parties from time to time. AA. “ QiG Group ” has the meaning as described in the Preamble. For purposes of this Agreement, unless the context requires otherwise, any reference herein to QiG Group shall mean QiG Group, LLC and each of its Affiliates CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 3 - BB. “ QiG Group Indemnitees ” has the meaning set forth in Section X.D. CC. “ Relevant Project Components ” means the parts and components for the Product set forth in Appendix A , which may be amended by the Parties from time-to-time in accordance with this Agreement to incorporate additional Relevant Project Components. DD. “ Renewal Term ” has the meaning set forth in Section II.B. EE. “ Restricted License Agreement ” means that certain Restricted License Agreement, dated March 14, 2016, by and between Greatbatch and QiG Group whereby QiG Group has licensed certain of its intellectual property to Greatbatch. FF. “ Restricted Period ” has the meaning set forth in Section XI.B(iv). GG. “ Resultant Patents ” means any rights under United States and foreign patents and patent applications, including, but not limited to, divisions, continuations, continuations-in-part, reissues, and reexaminations thereof that arise from any Joint IP (as defined below). HH. “ ROFR Notice ” has the meaning set forth in Section II.C. II. “ ROFR Period ” has the meaning set forth in Section II.C. JJ. “ Safety Stock ” has the meaning set forth in Section VII. KK. “ Specifications ” has the meaning set forth in Section IV.A. LL. “ Term ” has the meaning set forth in Section II.B. MM. “ Third Party Supply Agreement ” has the meaning set forth in Section II.C. NN. “ Trade Secrets ” means trade secrets as they are defined in the Uniform Trade Secrets Act, as amended (UTSA). OO. “ Unrestricted License Agreement ” means that certain Unrestricted License Agreement, dated March 14, 2016, by and between Greatbatch and QiG Group whereby QiG Group has licensed certain of its intellectual property to Greatbatch. PP. “ Transfer Date ” has the meaning set forth in Section VIII.D. QQ. “ Validation Documentation ” has the meaning set forth in Section IV.B. RR. “ Warranty Period ” has the meaning set forth in Section X.A(i). CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 4 - SS. “ WIP ” has the meaning set forth in Section III.B. II. SUPPLY AND CONTRACT PERIOD: A. Sale and Purchase Obligations . Subject to all of the terms and conditions of this Agreement: (i) Greatbatch agrees that during the Term, it shall have the exclusive right to manufacture and sell to QiG Group all Relevant Project Components (as described in or added to Appendix A) that may be ordered by QiG Group in accordance with the terms of this Agreement; and (ii) QiG Group agrees to purchase exclusively from Greatbatch during the Term its requirements for Relevant Project Components to be used by QiG Group in the Products. During the Term, if QiG Group desires to have an item manufactured that replaces or is intended to replace a Relevant Project Component and such item is based on, or that incorporates, Licensed IP and such item falls within the Field of Use, and if Greatbatch elects to be the manufacturer of such item, then such item shall be included as a “ Relevant Project Component ” under this Agreement and Appendix A will be amended to include such item. Subject to the immediately preceding paragraph, during the Term, if QiG Group desires to have an item manufactured that is based on, or that incorporates, Licensed IP and such item falls within the Field of Use, and if Greatbatch elects to be the manufacturer of such item, then QiG Group and Greatbatch each agree to negotiate exclusively, reasonably and in good faith with each other for up to [***] days regarding the terms of a manufacturing and supply agreement including, but not limited to, pricing, acceptable margins for each party and any other unique manufacturing or quality requirements related to such item. In the event that the parties are unable to agree on terms within [***] days, QiG Group shall be free to negotiate a manufacturing and supply agreement with any other third party suppliers for such item. QiG Group agrees that prior to executing any such third party manufacturing and supply agreement, it will notify Greatbatch of the key terms of such manufacturing and supply agreement and will, for a period of at least [***] days after Greatbatch’s receipt of such terms, give Greatbatch the opportunity to enter into a manufacturing and supply agreement with QiG Group for such item on terms substantially consistent with such third party manufacturing and supply agreement. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 5 - During the Term, if QiG Group desires to have an item manufactured that is not based on or does not incorporate any Licensed IP but QiG Group intends that such item will be used within the Field of Use, then QiG Group will be permitted to negotiate a manufacturing and supply agreement with any third party with respect to such item. QiG Group agrees that prior to executing any such third party manufacturing and supply agreement, it will notify Greatbatch of the key terms of such manufacturing and supply agreement and will, for a period of at least [***] days after Greatbatch’s receipt of such terms, give Greatbatch the opportunity to enter into a manufacturing and supply agreement with QiG Group on terms substantially consistent with such third party manufacturing and supply agreement. Further, if at the time QiG Group is initially seeking to have such item manufactured, (a) Greatbatch is unable to manufacture the item so that the item and its manufacture are at least equivalent in terms of technology, quality, ramp-up times, lead times and capacity to manufacture in accordance with this Agreement, (b) Greatbatch is unable to provide at least equivalent in terms of price to manufacture as an offering made by a third party, or (c) the Parties otherwise agree in writing, QiG Group will be free to enter into or negotiate with any other third party supplier for the manufacture of such item(s). Notwithstanding Greatbatch’s exclusive right to manufacture and sell to QiG Group all Relevant Project Components, the parties hereby agree that QiG Group shall have the right to have a third party manufacture the external devices that are currently manufactured by Minnetronix, Inc. and that are listed under the heading “External Devices” on Appendix A ; provided, that in the event that QiG Group elects to have a third party manufacture the external devices, QiG Group shall (i) provide Greatbatch [***] ([***]) months’ written notice prior to any purchase of such external devices from such third party, (ii) purchase 100% of its requirements for such external devices from a party other than Greatbatch after the completion of the [***] ([***]) month notice period and Greatbatch shall have no obligation to sell any external devices to QiG Group; and (iii) purchase from Greatbatch, and be responsible for, all finished product, WIP, raw material, components, all Safety Stock held in accordance with Section VII, all Consignment Products, and any non-cancelable purchase orders outstanding with suppliers related to such external devices. B. Term of Agreement . This Agreement will be in full force and effect from the date of its execution until the earliest to occur of (i) the fifth anniversary of the date of FDA approval that permits QiG Group to sell the Products in the United States (the “ Initial Term ”), (ii) termination by the mutual agreement of the Parties, or (iii) termination in accordance with the following terms of this Agreement. This Agreement shall automatically be renewed after the Initial Term for successive terms of one (1) year each (each a “ Renewal Term ”) unless either Party gives written notice of non-renewal or termination not less than three (3) months prior to the expiration of the Initial Term or any such Renewal Term (the Initial Term and all Renewal Terms being collectively the “ Term ”). CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 6 - C. Right of First Refusal . During the period beginning one hundred eighty (180) days prior to the expiration of the Term and ending on the date that is six (6) months after the expiration of the Term (the “ ROFR Period ”), in the event that QiG Group determines to seek to purchase its requirements for any Relevant Project Components from a third party (a “ Manufacturing Request ”), QiG Group shall promptly, and prior to taking any material steps towards engaging any third party with respect to such Manufacturing Request, notify Greatbatch of such Manufacturing Request (the “ ROFR Notice ”). During the ninety (90) day period following Greatbatch’s receipt of the ROFR Notice (the “ Exercise Period ”), (A) QiG Group and Greatbatch shall negotiate reasonably and in good faith, on an exclusive basis, regarding entry into a definitive manufacturing and supply agreement with respect to such Manufacturing Request and (B) QiG Group shall not initiate any negotiations regarding a definitive manufacturing and supply agreement with any third party regarding such Manufacturing Request. If Greatbatch and QiG Group do not execute and deliver a definitive manufacturing and supply agreement prior to the expiration of the Exercise Period, QiG Group shall be free to negotiate a manufacturing and supply agreement with any third party with respect to such Manufacturing Request (a “ Third Party Supply Agreement ”) during the [***] ([***]) month period following the expiration of the Exercise Period; provided that QiG Group, prior to execution of any such Third Party Supply Agreement, provides Greatbatch with the key terms of such Third Party Supply Agreement and offers it, for a period lasting at least [***] ([***]) days after receipt of the Third Party Supply Agreement by Greatbatch, the opportunity to enter into a manufacturing and supply agreement with QiG Group on terms substantially consistent with such Third Party Supply Agreement before executing such Third Party Supply Agreement. For the avoidance of the doubt, the Parties hereby acknowledge that each Manufacturing Request that occurs during the ROFR Period separately triggers QiG Group’s right of first refusal obligations pursuant to this Section II.C; provided that in the event that this Agreement has been terminated by QiG Group pursuant to Section III.A(i) or Section III.A(ii), Greatbatch’s right of first refusal under this Section II.C will be void and QiG Group may freely negotiate with any third party to enter into a Third Party Supply Agreement. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 7 - III. TERMINATION: A. Termination . Notwithstanding the provisions of Section II.B above, this Agreement may be terminated in accordance with the following provisions: (i) Either Party may terminate this Agreement for cause by giving the other Party thirty (30) days’ prior written notice of such termination if the other Party materially breaches or defaults under any of the material terms or conditions of this Agreement and fails to cure such material breach or default within sixty (60) days after receiving notice thereof. (ii) Either Party shall have the right to terminate this Agreement in its entirety if, at any time, (i) the other Party shall file in any court or agency pursuant to any Legal Requirement of any state or country, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of the Party or of its assets, (ii) if the other Party shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be dismissed within sixty (60) days after the filing thereof, (iii) if the other Party shall propose or be a party to any dissolution or liquidation, or (iv) if the other Party shall make an assignment for the benefit of creditors. In the event that this Agreement is terminated or rejected by a Party or its receiver or trustee under applicable bankruptcy or other Legal Requirements due to such Party’s bankruptcy, then all rights and licenses granted under or pursuant to this Agreement by such Party to the other Party are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code and any similar state or foreign Legal Requirements, licenses of rights to “intellectual property” as defined under Section 101(52) of the U.S. Bankruptcy Code. The Parties agree that all intellectual property rights licensed hereunder, including, without limitation, any patents or patent applications in any country of a Party covered by the license grants under this Agreement, are part of the “intellectual property” as defined under Section 101(52) of the Bankruptcy Code subject to the protections afforded the non-terminating Party under Section 365(n) of the Bankruptcy Code, any similar law or regulation in any other country; or (iii) A Party may terminate this Agreement by giving written notice to the other Party if such other Party has given notice as to an event of Force Majeure and such other Party has suspended its performance hereunder for more than [***] ([***]) consecutive days. Nothing herein shall be construed to allow either Party the right to terminate this Agreement for any inadvertent error or minor violation of any law or regulation by the other Party; provided that such error or violation does not have a material adverse effect on the other Party. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 8 - B. Effect of Termination . In the event of termination by Greatbatch under Section III.A, QiG Group will be responsible for paying for (i) raw materials and other items subject to existing non-cancellable purchase orders that cannot otherwise be reasonably used by Greatbatch, (ii) all work-in-process (“ WIP ”) costs specific to QiG Group custom designs, (iii) all Safety Stock held in accordance with Section VII, and (iv) all Consignment Products. In the event of termination by QiG Group under Section III.A, QiG Group will be responsible for paying for (i) all Safety Stock held in accordance with Article VII and (ii) all Consignment Products. Greatbatch agrees to cooperate in good faith to return, in a timely manner, any and all materials, documentation, tooling, masks, capital and/or other equipment due to QiG Group. Any and all expenses and/or shipping arrangements will be borne or made by the receiving Party. Further, for the avoidance of doubt, the Parties agree that in the event QiG Group terminates this Agreement under Section III.A(i) or Section III.A(ii), QiG Group will have the right to have the Relevant Product Components manufactured by another third party supplier and all right of first refusal obligations of QiG Group under this Agreement will be void and not applicable. C. Amendment to Agreement . This Agreement may not be modified, changed or terminated orally. No change, modification, addition, or amendment shall be valid unless in writing indicating an intent to modify this Agreement and signed by an authorized officer of each Party. IV. SUPPLY A. The Relevant Project Components shall be manufactured in accordance with the specifications attached hereto as Appendix A (the “ Specifications ”) and in accordance with the terms of the Quality Agreement between the parties, effective as of September 22, 2015, as may be amended from time to time by the mutual written agreement of the parties (the “Quality Agreement”). CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 9 - B. During the Term, Greatbatch will manufacture the Relevant Project Components at its Plymouth, Minnesota facility and then likely transfer the manufacturing to another Greatbatch facility. If Greatbatch desires to relocate the manufacturing of the Relevant Project Components to another Greatbatch facility, Greatbatch shall provide written notice to QiG Group at least [***] months prior to Greatbatch’s proposed date of such relocation, and shall provide such other information reasonably required by QiG Group with respect to such proposed new location. Following the notice, Greatbatch shall deliver to QiG Group a final qualification report and final qualification parts in connection with the relocation indicating Relevant Project Component equivalence at the new location (“ Validation Documentation ”). Greatbatch shall not ship any Relevant Project Component manufactured at the new facility until Greatbatch’s receipt of a written notice from QiG Group that it is ready to receive Relevant Project Components manufactured at the new facility (the “ Facility Approval Notice ”). QiG Group will use best efforts to achieve all necessary regulatory approvals as soon as possible after QiG Group’s approval of the Validation Documentation. If QiG Group does not issue the Facility Approval Notice within [***] days after all regulatory approvals necessary to manufacture the Relevant Project Component at the new location have been obtained and Greatbatch has reasonably demonstrated that it can manufacture the Relevant Project Components in accordance with this Agreement at such new location, then all prices for the Relevant Project Components will automatically increase by [***] percent ([***]%) unless and until QiG Group issues the Facility Approval Notice. QiG Group shall provide reasonable cooperation to Greatbatch in connection with the qualification of such new facility. Notwithstanding anything in this Agreement to the contrary, QiG Group understands and agrees that the relocation of the manufacturing facility from the Plymouth, Minnesota facility is accounted for in the pricing in Appendix B , and therefore, no pricing adjustments will be made as result of such relocation. V. PRICE; ORDERS, DELIVERY, PAYMENT, INSPECTION : A. The prices for the Relevant Project Components shall be as set forth in Appendix B of this Agreement and such prices will be fixed for the Initial Term unless otherwise mutually agreed upon by the Parties in writing, or as may be adjusted in accordance with this Section V, or as may be reduced in accordance with Section V.P below. Notwithstanding anything in this Agreement to the contrary, the price for any Relevant Project Component may be increased from time-to-time during the Term if Greatbatch’s cost for any individual material or all of the materials used in the manufacture of such Relevant Project Component increases by [***]% or more. If Greatbatch determines that there has been such a change to its cost, it will provide QiG Group with at least 30 days’ written notice before adjusting the price for such Relevant Project Component; provided, that the change in price shall not exceed the increased cost to Greatbatch. B. Simultaneous with the execution of this Agreement, and on each January 1 st thereafter, QiG Group will deliver to Greatbatch a blanket purchase order by product category described on Exhibit B for the Relevant Project Components to be purchased by QiG Group for the remaining calendar year (a “Firm Purchase Order”). CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 10 - C. To the extent that the price for a Relevant Project Component is based on a volume pricing table set forth in Appendix B (a “Volume Priced Component”) , the price for such Volume Priced Component shall be based on the amount of such Volume Priced Components ordered pursuant to the Firm Purchase Order. In the event that QiG Group has not, in any calendar year, purchased and accepted delivery of a Volume Priced Component in such an amount that equals or exceeds the amount of such Volume Priced Components ordered pursuant to the Firm Purchase Order for such calendar year, then QiG Group shall, within [***] days after the end of such calendar year, pay to Greatbatch an amount equal to (i)(A) the number of such Volume Priced Components ordered pursuant to the Firm Purchase Order, minus (B) the actual number of such Volume Priced Components purchased and accepted by QiG Group during such calendar year, multiplied by (ii) the price of such Volume Priced Component. For illustrative purposes only, if QiG Group ordered [***] IPGs pursuant to the Firm Purchase Order for 2016, but only purchased and accepted [***] IPGs in 2016, QiG Group would pay $[***] to Greatbatch by [***] (i.e. [***] – [***] x $[***] = $[***]). D. In the event that QiG Group, in any calendar year, purchases and accepts delivery of a Volume Priced Component in an amount that exceeds the amount of such Volume Priced Components ordered pursuant to the Firm Purchase Order for such calendar year, and the purchased and accepted amount would have caused a different price to be applicable if such amount would have been included in the Firm Purchase Order for such calendar year, then Greatbatch shall, within [***] days after the end of such calendar year, issue a rebate to QiG Group in an amount equal to (i)(A) the actual number of such Volume Priced Components purchased and accepted by QiG Group during such calendar year, multiplied by (B) the price of such Volume Priced Component as dictated by the amount set forth in the Firm Purchase Order, minus (ii)(A) the actual number of such Volume Priced Components purchased and accepted by QiG Group during such calendar year, multiplied by (B) what the price of such Volume Priced Component would have been if the actual number of such Volume Priced Components purchased and accepted by QiG Group would have been included in the Firm Purchase Order. For illustrative purposes only, if QiG Group ordered [***] IPGs pursuant to the Firm Purchase Order for 2016, but purchased and accepted [***] IPGs in 2016, Greatbatch would issue a rebate of $[***] to QiG Group by [***] (i.e. [[***] x $[***]] – [[***] x $[***]] = $[***]). CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 11 - E. QiG Group may lock in the price for a precious metal used in a Relevant Project Component as follows: (i) QiG Group will provide written notification to its Greatbatch Account Manager and customer service representative when it wants to lock in the price for a precious metal used in a Relevant Project Component. In addition, forecast information and duration of the “price-lock” needs to be specified. (ii) Within 48 hours of receiving such notification, Greatbatch will lock in the price of the precious metal. Upon locking in the price, Greatbatch will notify QiG Group of the locked-in price. (iii) A locked-in price will become effective for the Relevant Project Component beginning the following January 1 (unless the notice provided by QiG Group under Section V.E.(ii) above is given on December 31, then the locked-in price will not become effective until the following January 2). If QiG Group does not notify Greatbatch to lock in the price for a precious metal, the cost of the precious metal will be the market price of the precious metal at the time of Greatbatch’s receipt of the applicable purchase order. (iv) In the event that any precious metal that is part of such “price-lock” is unused during the applicable “price-lock” period (“Unused Precious Metal”), the cost of such Unused Precious Metal will remain the “price-lock” price until the inventory of such Unused Precious Metal is fully depleted. In the event that QiG Group elects to lock the price for a precious metal that is the same metal as the Unused Precious Metal, such requested “price-lock” price will not be effective until the inventory of such Unused Precious Metal is fully depleted. Notwithstanding anything in this Section V.E.(iv) to the contrary, all Unused Precious Metals will be purchased by QiG Group within ninety (90) days of the end of the applicable “price-lock” period at Greatbatch’s cost for such Unused Precious Metals. (v) In the event that Greatbatch’s inventory of any precious metal that is part of such “price-lock” is fully depleted prior to the completion of the applicable “price-lock” period, the “price-lock” shall be terminated and the cost of the precious metal will be the market price of the precious metal at the time of Greatbatch’s next purchase of such precious metal. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 12 - F. Greatbatch will provide Relevant Project Components to QiG Group pursuant to purchase orders to be issued by QiG Group. The general terms and conditions of sale for Relevant Project Components sold by Greatbatch to QiG Group hereunder are set forth in this Agreement. The Parties expressly agree that none of the terms and conditions of any standard purchase preprinted forms used by either Greatbatch or the QiG Group 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) will apply, except insofar as a purchase order or acknowledgement establishes the quantity, destination, shipping information and the desired delivery date (which must satisfy the standard lead times identified for the applicable Relevant Project Component). G. QiG Group’s purchase order form shall set forth, at a minimum, the quantity of Relevant Project Components ordered, the address of the facility of QiG Group (or its affiliate) to which the Relevant Project Components should be shipped and requested delivery dates (which shall be no less than the lead time set forth in Section VI below). H. Unless QiG Group gives Greatbatch written instructions as to the method of shipment and carrier, Greatbatch shall select the methods of shipment and the carrier for the respective purchase order. Greatbatch shall prepay transportation and similar charges upon shipment. Title to all Relevant Project Components conforming to QiG Group’s purchase order shall pass, free and clear of all encumbrances, at the EXW shipping point, which shall be Greatbatch’s facility. QiG Group assumes and agrees to bear all risk of damage or loss to the Relevant Project Components after delivery by Greatbatch to the carrier at the EXW shipping point. QiG Group hereby releases Greatbatch from any and all claims and liability with respect to any such in-transit damages or losses to the goods. QiG Group shall be responsible for securing insurance coverage to cover shipments and deliveries hereunder. I. Greatbatch shall perform testing to ensure that certain Relevant Project Components delivered to QiG Group meet all applicable Specifications and such testing will be at Greatbatch’s cost, except as set forth below. QiG Group inspection of incoming Relevant Project Components will rely upon Greatbatch testing and may consist of an examination of Greatbatch’s testing documentation as well as independent testing by QiG Group. Notwithstanding the foregoing, QiG Group shall attempt to inspect all Relevant Project Components within thirty (30) days, but not to exceed sixty (60) days, and notify Greatbatch if any of the Relevant Project Components fail to meet the Specifications and quality standards for such Relevant Project Components. Prior to the Effective Date, QiG Group has provided, at no cost to Greatbatch, one (1) IPG board level testing station, one (1) IPG Charging 6 Bay station, one (1) IPG Fine Tune station, one (1) IPG final functional testing station and one (1) EPG board level testing station (the “Generation 1 Stations”). On or prior to March 31, 2016, QiG Group shall provide, to Greatbatch, one (1) IPG board level testing station and one (1) IPG final functional testing station (the “Generation 1A Stations”). To the extent that Greatbatch requests QiG Group to provide new or additional testing stations in addition to the Generation 1 or Generation 1A Stations (the “New Testing Stations”), QiG Group will use commercially reasonable efforts to develop, design and provide such New Testing Stations on the delivery schedule requested by Greatbatch. Greatbatch will be responsible for the hardware costs of the Generation 1A Stations and New Testing Stations and such costs shall be negotiated in good faith between the parties. Greatbatch will be responsible for its costs to validate and implement the Generation 1A Stations and New Testing Stations. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED WITH [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. - 13 - If QiG Group provides (i) periodic revisions or improvements, both software related and mechanical/structural, to any testing stations or (ii) new testing stations as a result of a QiG Group initiated redesign or modification, including, without limitation the Generation 2 Testing Stations expected to be delivered by QiG Group to Greatbatch in the first quarter of 2017 (collectively, the “QiG Initiated Stations”), QiG Group will be solely responsible for the cost of such revisions or improvements or such QiG Initiated Stations and QiG Group will reimburse Greatbatch for Greatbatch’s costs to validate and implement such revisions or improvements or QiG Initiated Stations. QiG Group will be responsible for all labor costs associated with developing, designing and providing the Generation 1A Stations, New Testing Stations, and QiG Initiated Stations. QiG Group agrees that it will provide, at no cost to Greatbatch, reasonable and necessary training, technical support and troubleshooting assistance for the Generation 1A Stations, New Testing Stations, and QiG Initiated Stations until such time that the Generation 1A Stations, New Testing Stations or QiG Initiated Stations, as applicable, perform to a mutually agreed upon level that is to be negotiated in good faith between the Parties. Within thirty (30) days of the expiration or termination of this Agreement, QiG Group shall purchase from Greatbatch all testing stations provided to, or purchased by, Greatbatch under this Section V.I. and the purchase price shall be the net book value of all such testing stations at the date of expiration or termination of this Ag