Exhibit 10.5

 

PRODUCT COMPONENT FRAMEWORK AGREEMENT

 

This PRODUCT COMPONENT FRAMEWORK AGREEMENT (the “Agreement”), effective the 14th
day of March, 2016 (the “Effective Date”) is by and between Greatbatch Ltd., a
New York corporation, 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 and Greatbatch entered into that certain Restricted License
Agreement, dated March 14, 2016, pursuant to which QiG Group licensed to
Greatbatch certain of its intellectual property (the “Restricted License
Agreement”);

 

WHEREAS, QiG Group and Greatbatch entered into that certain Unrestricted License
Agreement, dated March 14, 2016, pursuant to which QiG Group licensed to
Greatbatch certain of its intellectual property (the “Unrestricted License
Agreement”);

   

WHEREAS, QiG Group desires to purchase, and require the QiG Affiliates and the
QiG Licensees to purchase, exclusively from Greatbatch, all Product Components
for each Product it or they, as applicable, may develop or have developed on its
or their behalf;

 

WHEREAS, Greatbatch is in the business of manufacturing and supplying Product
Components; and

 

WHEREAS, the Parties desire to establish a framework of the terms and conditions
that shall apply to QiG Group’s or each QiG Licensee’s or QiG Affiliate’s, as
applicable, purchase of all Product Components exclusively from Greatbatch.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein,
Greatbatch and QiG Group hereby agree as follows:

 

Article 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:

 

Section 1.01     “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

 

 

 
 

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Section 1.02     “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).

 

Section 1.03     “FDA” means the United States Food and Drug Administration or
any successor entity.

 

Section 1.04      “FDA Approval” means the receipt of all Regulatory Approvals
from the FDA that would permit a Person to sell the Products in the United
States.

 

Section 1.05     “Field of Use” means sacral nerve stimulation and/or deep brain
stimulation.

 

Section 1.06     “Initial Term” has the meaning set forth in Section 2.01.

  

Section 1.07     “Licensed IP” has the meaning in the Restricted License
Agreement and the Unrestricted License Agreement.

 

Section 1.08     “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).

 

Section 1.09     “Product” means any product for applications in the Field of
Use that are currently in development or that may be developed by QiG Group or
by any QiG Affiliates or QiG Licensees that is based on, uses or incorporates
the Licensed IP including, without limitation, the Pelvistim sacral nerve
stimulation system currently under development (the “Pelvistim System”);
provided that nothing herein is intended to include any surgical accessories or
peripheral devices, including, without limitation, torque wrenches, introducers,
tunneling tools, adjustable belts, patient programmers, clinician programmers,
external pulse generators and patient feedback tools.

 

Section 1.10     “Product Components” means all products, parts or components
that are based on, uses or incorporates any Licensed IP and that are intended to
be incorporated within, used in conjunction with or sold as part of any Product,
including, but not limited to, the Pelvistim System or a deep brain stimulation
system medical device).

 

 

 
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Section 1.11     “QiG Affiliates” means each direct or indirect Affiliate of QiG
Group.

 

Section 1.12      “QiG Licensees” means each Person to which QiG Group licenses
any or all of its rights to and under the Licensed IP.

 

Section 1.13     “QiG Supply Agreement” means that certain Supply Agreement,
effective March 14, 2016, by and between Greatbatch and QiG Group.

 

Section 1.14     “Regulatory Approvals” means all approvals necessary for the
commercial sale of a Product for any indication in a given country or regulatory
jurisdiction, which shall include satisfaction of all applicable regulatory and
notification requirements, but which shall exclude any pricing and reimbursement
approvals.

 

Section 1.15     “Renewal Term” has the meaning set forth in Section 2.03.

 

Section 1.16     “Steering Committee” has the meaning set forth in Section 3.02.

 

Section 1.17     “Steering Committee Representative” has the meaning set forth
in Section 3.02.

 

Section 1.18     “Substantial Completion” means that a Product or Product
Component has substantially completed all design, development and testing phases
and such Product or Product Component, as applicable, is ready for submission to
obtain Regulatory Approval or, if Regulatory Approval is not required, is ready
for commercial sale.

 

Section 1.19     “Supply Agreement” has the meaning set forth in Section 2.03.

  

Section 1.20     “Term” has the meaning set forth in Section 4.01.

  

Article II.          Sale and Purchase Obligations

 

Section 2.01     Except as set forth in this Article II and provided that the
QiG Supply Agreement has not been terminated by QiG Group pursuant to Section
III.A(i) or Section III.A(ii) thereof, QiG Group agrees to purchase, and require
each QiG Affiliate and QiG Licensee to purchase, exclusively from Greatbatch,
all of its or their, as applicable, requirements for Product Components with
respect to each Product it or they, as applicable, develops or has developed on
its or their behalf. With respect to each Product, the period during which QiG
Group, a QiG Affiliate or a QiG Licensee, as applicable, shall be required to
purchase all such Product Components with respect to such Product exclusively
from Greatbatch shall commence upon the Substantial Completion of the
development of such Product and continue until the date that is five (5) years
after the date of receipt of FDA Approval for such Product (the “Initial Term”);
provided, however, if the Product is to never be sold in the United States or
does not need FDA Approval to be sold in the United States, the “Initial Term”
shall be the period commencing upon the Substantial Completion of the
development of such Product and ending on the date that is five (5) years after
the date of (i) receipt of Regulatory Approval outside the United States for
such Product if Regulatory Approval is necessary to permit the sale of such
Product outside the United States, or (ii) the first commercial sale of such
Product if no Regulatory Approvals are necessary to permit the sale of such
Products.

 

 

 
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Section 2.02     Upon the Substantial Completion of a Product and prior to QiG
Group, or any QiG Affiliates or QiG Licensees purchasing any such Product or
Product Components with respect to such Product from a third party, QiG Group
will promptly notify Greatbatch of such Substantial Completion and, if
Greatbatch elects to be the exclusive manufacturer of the Product Components
with respect to such Product, the Parties agree (and QiG Group shall cause the
QiG Affiliates and the QiG Licensees to agree) to negotiate exclusively and in
good faith for a period not to exceed 120 days regarding entry into a definitive
manufacturing and supply agreement for the manufacture and supply of Product
Components with respect to such Product(s) (each, a “Supply Agreement”), which
shall document the purchase and sale obligations described in Sections 2.01 and
2.04 below with respect to such Product(s). The Supply Agreement shall contain
terms and conditions substantially similar to the terms of the QiG Supply
Agreement, a copy of which is attached hereto as Exhibit A, including, without
limitation, (i) pricing for such Product Components that allows each party to
achieve substantially similar profit margins as achieved by such party pursuant
to the QiG Supply Agreement, (ii) a provision that is substantially similar to
Section II.A. of the QiG Supply Agreement, (iii) a term provision reflecting the
Initial Term and a requirement that such Supply Agreement shall automatically be
renewed after the Initial Term for successive terms of one (1) year each (each a
“Renewal Term”) unless notice of non-renewal or termination is given not less
than three (3) months prior to the expiration of such Initial Term or Renewal
Term, (iv) a right of first refusal provision substantially similar to Section
II.C of the QiG Supply Agreement, (v) warranty periods, indemnities, limits of
liability and manufacturing, quality and supply obligations substantially
similar to those set forth in the QiG Supply Agreement, and (vi) a “Field of
Use” definition that reasonably reflects the field of use for such Product.

 

Section 2.03     If, despite good faith and commercially reasonable efforts,
Greatbatch and QiG Group, or an QiG Affiliate or QiG Licensee, as applicable, do
not execute and deliver a new Supply Agreement within 120 days of QiG Group’s,
QiG Affiliate’s or QiG Licensee’s, as applicable, notice to Greatbatch of
Substantial Completion of development of a new Product or Product Component, as
applicable, QiG Group, or such QiG Affiliate or QiG Licensee, as applicable,
shall be free to negotiate a manufacturing and supply agreement with any other
third party supplier (a “Third Party Supplier Agreement”), provided that prior
to QiG Group’s, QiG Affiliate’s or QiG Licensee’s, as applicable, execution of a
Third Party Supplier Agreement, QiG Group, or such QiG Affiliate or QiG
Licensee, as applicable, will provide to Greatbatch the key terms of such
proposed Third Party Supplier Agreement and for a period lasting at least
fourteen (14) days after Greatbatch’s receipt of such terms, Greatbatch will
have the opportunity to enter into a manufacturing and supply agreement with QiG
Group, or such QiG Affiliate or QiG Licensee, as applicable, on terms
substantially consistent with such Third Party Supply Agreement. For the
avoidance of doubt, the Parties agree that if the QiG Supply Agreement has been
terminated by QiG Group pursuant to Section III.A(i) or Section III.A(ii)
thereof, this Agreement will no longer be in effect and QiG Group, QiG
Affiliates and QiG Licensees may seek another third party supplier to
manufacture any Products or Product Components that are subject to this Article
II.

 

 

 
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Section 2.04     In the event that Greatbatch elects to be the exclusive
manufacturer of the Product Components with respect to such Product, Greatbatch
agrees that it shall, subject to the terms of the applicable Supply Agreement
and during each such Initial Term, manufacture and sell to QiG Group and each of
the QiG Affiliates and QiG Licensees all Product Components as may be ordered by
QiG Group, the QiG Affiliates, or the QiG Licensees with respect to the Product.

  

Article III.     Product Design and Manufacturing Input

 

Section 3.01     During the Term, QiG Group will provide Greatbatch through the
Parties’ respective Steering Committee Representatives with information
regarding, and an opportunity to participate in, all product design programs and
planning for any Product Components for each Product being developed. In
connection therewith, QiG Group shall provide to Greatbatch from time to time
with information that may be relevant to the manufacture, design, testing and
production of any Product Components. In addition, to the extent practical, QiG
Group shall notify Greatbatch in advance and permit Greatbatch to be present and
to participate in appropriate planning meetings with respect to the Product
Components of each Products.

 

Section 3.02     Steering Committee.

 

(a)     Each party shall designate three (3) individuals (“Steering Committee
Representatives”) who shall be its representatives on the steering committee
(the “Steering Committee”) and responsible for monitoring implementation and
coordination of the Parties’ respective obligations under this Agreement. At
least one of the Steering Committee Representatives from each Party shall have
authority to make decisions regarding all matters within the scope of this
Agreement. Each Party shall have the right, at any time, to notify the other
Party of any change in any of its Steering Committee Representatives, and to
send an alternate to any meeting of the Steering Committee.

 

(b)     The Steering Committee shall determine the frequency of its meetings,
which shall meet no less frequently than quarterly, and may meet more often to
the extent reasonably requested by either Party. There shall be two (2) Steering
Committee Representatives from each Party at any formal meeting of the Steering
Committee. The Steering Committee will designate one (1) of the Steering
Committee Representatives to record minutes of any material recommendations made
at each meeting.

 

(c)     Without limiting the responsibilities of the Steering Committee, it
shall be responsible for the following:

 

(i)     generally, to monitor implementation of this Agreement and the Parties’
performance of their respective obligations hereunder and under each Supply
Agreement, including the QiG Supply Agreement;

 

(ii)     negotiate, in good faith, on the pricing terms, specifications and
other terms and conditions of any Supply Agreement;

 

 

 
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(iii)     to monitor cooperation and progress with respect to each Party’s input
on, and development of, Product Components; and

 

(iv)     to attempt to informally resolve any issues or disputes arising under
this Agreement or any Supply Agreement, including the QiG Supply Agreement.

 

Article IV.     TERM

 

Section 4.01     This Agreement will be in full force and effect from the
Effective Date until the Parties agree in writing to terminate this Agreement
(the “Term”).

 

Article V.     MISCELLANEOUS

 

Section 5.01     Amendment. 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.

 

Section 5.02     No Waiver. The failure of any Party to enforce at any time or
for any period any of the provisions of this Agreement shall not be construed to
be waiver of those provisions or of the right of that Party thereafter to
enforce each and every provision hereof. No rights under this Agreement shall be
waived except by an instrument in writing signed by the Party sought to be
charged with such waiver.

 

Section 5.03     Assignment. This Agreement shall be binding upon, and shall
inure to the benefit of, the Parties’ respective successors and permitted
assigns. This Agreement shall not be assignable by QiG Group or Greatbatch
without the prior written consent of the other; provided, however, that, upon
thirty (30) days’ prior written notice to the non-assigning Party, such Party,
(i) may assign this Agreement, in whole or in part, to any Affiliate provided
that it shall remain primarily liable under this Agreement and/or (ii) shall
assign this Agreement to its successor in connection with a Change of Control
provided that such successor, in the reasonable judgment of the non-assigning
Party is able to perform the assigning Party’s obligations under this Agreement
and/or the applicable unexecuted Supply Agreement, if any.

 

Section 5.04     Notices. Unless otherwise provided in this Agreement, any
notice to be given hereunder shall be in writing and (a) delivered personally
(to be effective when so delivered), (b) mailed by registered or certified mail,
return receipt requested (to be effective four days after the date it is mailed)
or (c) sent by Federal Express or other overnight courier service (to be
effective when received by the addressee), to the following addresses (or to
such other addresses which any Party shall designate in writing to the other
Party):

 

If to Greatbatch:

 

  Greatbatch Ltd.

  10000 Wehrle Drive

  Clarence, NY 14031

  Attention: General Counsel

 

If to QiG Group:

 

  QiG Group, LLC

  5830 Granite Parkway, Suite 1100

  Plano, Texas, 75024

  Attention: General Counsel

 

 

 
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Section 5.05     Successors and Assigns. This Agreement is binding on and inures
to the benefit of the Parties and their respective permitted successors and
permitted assigns.

 

Section 5.06     Injunctive Relief. The Parties hereto agree that irreparable
harm would occur in the event that any of the agreements or provisions of this
Agreement were not performed fully by the Parties hereto in accordance with
their specific terms or conditions or were otherwise breached, and that money
damages are an inadequate remedy for breach of the Agreement because of the
difficulty of ascertaining and quantifying the amount of damage that will be
suffered by the Parties hereto in the event that this Agreement is not performed
in accordance with its terms or conditions or is otherwise breached. It is
accordingly hereby agreed that the Parties hereto shall be entitled to an
injunction or injunctions, without the necessity of proving actual damages, to
restrain, enjoin and prevent breaches of this Agreement by the other Parties and
to enforce specifically the terms and provisions of this Agreement in any court
of the United States or any state having jurisdiction, such remedy being in
addition to, and not in lieu of, any other rights and remedies to which the
other Parties are entitled to at law or in equity.

 

Section 5.07     Governing Law.   This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, without
giving effect to the provisions, policies or principles thereof relating to
choice or conflict of laws.

 

Section 5.08     Waiver of Jury Trial. Each Party acknowledges and agrees that
any controversy that may arise under this Agreement, including any appendices
attached to this Agreement, is likely to involve complicated and difficult
issues and, therefore, each such Party irrevocably and unconditionally waives
any right it may have to a trial by jury in respect of any legal action arising
out of or relating to this Agreement, including any appendices attached to this
Agreement, or the transactions contemplated hereby.

 

Section 5.09     No Third-Party Beneficiaries. This Agreement benefits solely
the Parties to this Agreement and their respective permitted successors and
permitted assigns and nothing in this Agreement, express or implied, confers on
any other Person any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

 

Section 5.10     Titles of Sections. The section and other headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.

 

Section 5.11     Entire Agreement. This Agreement, the Restricted License
Agreement and the Unrestricted License Agreement constitutes the entire
agreement among the Parties hereto with respect to the subject matter hereof and
thereof, and supersedes any prior agreement or understanding among the Parties
hereto with respect to the subject matter hereof. For the avoidance of doubt,
nothing in this Agreement shall expand the rights of Greatbatch under the
Restricted License Agreement or the Unrestricted License Agreement.

 

 

 
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Section 5.12     Counterparts. This Agreement may be executed either directly or
by an attorney-in-fact, in any number of counterparts of the signature pages,
each of which shall be considered an original. Facsimile or pdf transmission of
an executed counterpart of this Agreement shall be deemed to constitute due and
sufficient delivery of such counterpart, and such facsimile or pdf signatures
shall be deemed original signatures for purposes of enforcement and construction
of this Agreement.

 

Section 5.13     Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be enforced to the maximum extent possible without invalidating the remaining
portions hereof or affecting the validity or enforceability of such provision in
any other jurisdiction.

 

[Signature Page Follows]

 

 

 
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
by their authorized representatives.

 

QiG Group, LLC     Greatbatch Ltd.            

 

 

 

 

 

By: /s/ Scott F. Drees

 

 

By: /s/ Thomas J. Hook

 

Name: Scott F. Drees

 

 

Name: Thomas J. Hook

 

Title: CEO

 

 

Title: CEO

 

Date: March 14, 2016     Date: March 14, 2016  

 

 

 
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EXHIBIT A

 

QiG Supply Agreement

 

See Attached.

 

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