Exhibit 10.22(b)

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

CONFIDENTIAL

SUPPLY AGREEMENT

This Supply Agreement (the “Agreement”) is effective as of November 11, 2016
(the “Effective Date”), by and between CENTRO DE CONSTRUCCION DE
CARDIOESTIMULADORES DEL URUGUAY S.A., a Uruguay corporation having its principal
place of business at General Paz 1371, Montevideo, Uruguay, CP 11400 (“CCC”),
and Nevro Corp., a Delaware corporation having its principal place of business
at 1800 Bridge Parkway, Redwood, City, California 94065 (“Nevro”).

1.

Definitions

Defined terms used in this Agreement shall have the meanings as defined in the
text of the Agreement or as set forth in this Article 1:

1.1“Affiliate” shall mean any other entity that directly or indirectly, through
one or more intermediaries, controls, is controlled by or is under common
control with the first entity, including, but not limited to, other entities
which become Affiliates after the date of execution of this
Agreement.  “Control” of an entity shall mean ownership of 50 percent or more of
the total voting securities or other voting interests of the entity.

1.2“Applicable Law” shall mean all laws, statutes, ordinances, codes, rules, and
regulations that have been enacted by a Governmental Authority and are in force
as of the Effective Date or come into force during the Term, in each case to the
extent applicable to the performance by the parties of their respective
obligations under this Agreement.

1.3“Approved Manufacturer List” shall mean the approved list of vendors in the
Specifications for the supply of Components.

1.4“Bill of Materials” shall mean the listing or reference for the Components
included in or required for the manufacture of each Product in accordance with
the Specifications, which Bill of Materials is set forth on Exhibit F (as such
exhibit is updated in accordance with Section 4.1).

1.5“Change of Control” with respect to a Party means a transaction pursuant to
which an entity acquires all or substantially all of the assets of such Party
related to this Agreement or acquires “control” of such Party, where “control”
means: (i) ownership, directly or indirectly, of more than (a) fifty percent
(50%) of the outstanding voting shares of such Party, or (b) fifty percent (50%)
of the of the total combined voting power entitled to elect or appoint directors
or persons performing similar functions for such Party, or (ii) the power to
direct or cause the direction of the management and policies of such Party by
contract or otherwise.

1.6“Components” shall mean the parts, materials and supplies included in or
required for each Product as stipulated in the Bill of Materials.

1.7“Confidential Information” shall mean any and all confidential or proprietary
business, technical, scientific and other know-how and information, including,
but not limited to,

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trade secrets, knowledge, technology, means, methods, processes, practices,
formulas, instructions, skills, techniques, procedures, specifications, data,
results and other material, manufacturing procedures, test procedures, and any
tangible embodiments of any of the foregoing, and any scientific, manufacturing,
marketing and business plans, any financial and personnel matters relating to a
party or its present or future products, sales, suppliers, customers, employees,
investors or business, that have been disclosed by or on behalf of such party to
the other party in connection with this Agreement.  The terms of this Agreement
shall be deemed the Confidential Information of both parties.

 

1.8“Consigned Components” shall mean any Components designated as “Consigned
Components” on the Bill of Materials.

1.9“Contract Year” means each calendar year during the Term, except that
Contract Year 1 commences on the Effective Date and ends on December 31, 2016
and Contract Year 11 commences on January 1, 2026 and ends on the date that is
ten (10) years after the Effective Date.

1.10“Defect” or “Defective” shall mean a defect caused by a breach of a warranty
in Section 10.3.  

1.11“Epidemic Failure” has the meaning specified in Section 8.5.

1.12“Equipment” shall mean any and all equipment installed at the Manufacturing
Facility and used to manufacture the Products.

1.13“FDA” means the United States Food and Drug Administration, or any successor
entity thereto.

1.14“Forecast” has the meaning specified in Section 2.1.

1.15“Good Manufacturing Practice” or “GMP” shall mean compliance with the most
recent version of ISO13485 and the Quality System Regulations 21 CFR Part 820.

1.16“Governmental Authority” shall mean any supranational, national, regional,
state or local government, court, governmental agency, authority, board, bureau,
instrumentality, or regulatory body, including the FDA.

1.17“CCC IP” shall mean the Intellectual Property Rights owned or otherwise
controlled by CCC necessary for the manufacture of Products for Nevro pursuant
to this Agreement.

1.18“Intellectual Property Right” means any patent or patent application,
including with respect to patents rights granted upon any reissue, divisional,
continuation or continuation-in-part applications, utility models issued or
pending, registered and unregistered design rights, copyright (including the
copyright on software in any code), trademark, trade dress, trade secret,
know-how, or any other intellectual property right or proprietary right, whether
registered or unregistered, and whether now known or hereafter recognized in any
jurisdiction.

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1.19“Inventory” shall mean WIP (i.e., Components contained in partly finished
Products that are in various stages of the manufacturing process), finished
Products (including, but not limited to, Safety Stock), Product-specific,
non-returnable purchased Components and non-cancelable purchase orders for
Components outstanding with CCC’s suppliers, consistent with Section 2.3(c).

1.20“Last Time Buy” shall mean Nevro’s option to order any quantities of
Products totaling up to the quantities equal to [***] ([***]) times the volumes
of such Products contained in the last received [***] ([***]) month Forecast,
subject to the requirements set forth in this Agreement.

1.21“Manufacturing Facility” shall mean the CCC facility located at General Paz
1371, 11400 Montevideo, Uruguay, and any other facility approved by Nevro in
accordance with Section 5.2(b) and that has been Qualified to manufacture the
Products.  

1.22“NDS Components” shall mean all Components purchased by CCC from a Nevro
Dictated Subcontractor.

1.23“Nevro Dictated Subcontractor” shall mean the Subcontractors identified in
Attachment 1 of the Quality Agreement as “Nevro Dictated Suppliers.”

1.24“Nevro IP” shall mean the Intellectual Property Rights owned or otherwise
controlled by Nevro, solely to the extent necessary for the manufacture of
Products for Nevro pursuant to this Agreement.  

1.25“Nevro Property” shall mean (a) any tooling, equipment or software provided
by Nevro, and (b) tooling or equipment developed or procured by CCC at Nevro’s
expense but, with respect to tooling or equipment developed or procured by CCC
at Nevro’s expense after the Effective Date, only if it has been invoiced
separately from the purchase price of the Products, and (c) CCC’s Safety Stock
upon Nevro’s payment of the applicable purchase price therefor.

1.26“Nevro System” shall mean an implantable system intended to be completely
introduced to a living body by surgical intervention to apply electrical
stimulation for treatment of chronic pain.

1.27“Products” shall mean the products that are listed in Exhibit A attached
hereto, as well as any follow-on, modified, or improved versions of such
products, or additional products, that the parties may mutually agree in writing
to be subject to this Agreement.

1.28“Purchase Order” shall mean a written purchase order issued by Nevro for
Products.  

1.29“Qualified” shall mean that the Manufacturing Facility and Equipment have
been fully qualified by CCC to supply Nevro with such Products meeting the
Specifications and requirements of the applicable Governmental Authorities.  To
remain Qualified, the Manufacturing Facility and Equipment must (i) be
maintained as specified in the Quality Agreement and to at least the same
conditions as when initially Qualified;  and (ii) continue to

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

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CONFIDENTIAL

comply with all applicable requirements of any Governmental Authorities; in each
case without any unapproved changes.

1.30“Quality Agreement” shall mean the quality agreement executed by the parties
and dated July 13, 2016, and any amendments thereto executed by the parties.

1.31“Safety Stock” shall mean the level of finished Products to be maintained by
CCC, in excess of the amount required to meet Nevro’s Purchase Orders, which
level is specified in Section 2.2 below.

1.32“Shipment Date” shall mean the shipment date from the Facility as specified
in a Purchase Order that is consistent with the Volume Acceptance Range and the
applicable lead times for such Products as set forth on Exhibit A, or another
date mutually agreed by the Parties in writing.

1.33“Specifications” shall mean Nevro’s written specifications for the Products,
including the current revision number, Approved Manufacturer List, Bills of
Materials, manufacturing procedures, schematics, testing procedures, drawings
and documentation, including the specifications referenced on Exhibit B.

1.34“Subcontractor” shall mean any component supplier, material supplier,
service provider, consultant, contract laboratory, contractor, or other third
party supplier who provides to CCC any product(s) or services relating to, or
that could otherwise reasonably be expected to have any effect on, the Product,
including any component or service related to the warehousing, storage or
preparation of the Product.

1.35“Tested NDS Component” has the meaning specified in Section 3.6(d).

1.36“Validation Documentation” means the collection of all documentation
demonstrating that Product equivalence and all applicable regulatory
requirements, and any other requirements agreed by the parties, have been
achieved with respect to a proposed new Manufacturing Facility, including master
validation plans, qualification documentation (including operational
qualification documentation), performance qualification documentation (including
protocols and reports), line validation/product performance qualification
protocols and reports, and process failure modes and effects analysis
documentation. The Validation Documentation is intended to be delivered as a
package and considered for approval as such.

1.37“Volume Acceptance Range” has the meaning specified in Section 2.5.

1.38“Warranty Period” shall mean, for each Product, the period of eighteen (18)
months immediately following the date the Product is received by Nevro.  

2.

Product Purchase

2.1Forecasts.  Following execution of this Agreement, and on a monthly basis
thereafter, Nevro will provide CCC with a [***] ([***]) month rolling forecast
of Nevro’s expected monthly order volume for each of the Products for the
forthcoming [***] ([***]) month

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

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period (each, a “Forecast”). Nevro agrees to update the Forecast monthly.  The
first [***] ([***]) months of the Forecast will be considered binding (provided
for clarity that no forecast with respect to the IPG 2000 shall be binding
unless and until the IPG 2000 has been approved by Nevro in accordance with
Exhibit A), and the last [***] ([***]) months of the Forecast will be considered
non-binding. If Nevro’s Purchase Orders for the [***] ([***]) month period
covered by a binding Forecast are for a quantity less than the volume of
Products specified in the Forecast for such [***] ([***]) month period (the
“Shortfall”), Nevro will revise such Purchase Orders or submit additional
Purchase Orders.  

2.2In-Stock Product Minimum.  CCC agrees to carry at its own cost Safety Stock
levels of each Product to accommodate Product purchases by Nevro, as calculated
based on the applicable Forecast for the period and in an amount equal to [***]
([***]) [***] worth of expected Product orders in the applicable Forecast.  CCC
agrees to fulfill Purchase Orders first from such Safety Stock inventory, and to
manufacture sufficient units of the Products to maintain the forecasted levels
in the Safety Stock inventory.  The Safety Stock inventory will be available to
ship to Nevro within [***] ([***]) [***] of Nevro placing a Purchase Order. If
the Safety Stock inventory drops below the [***] ([***]) [***] level at any
time, CCC will promptly replenish it within [***] ([***]) [***].  Nevro is
responsible in accordance with Section 11.4 for such Inventory that was
reasonably and customarily necessary to sustain Safety Stock levels.  The
parties may agree from time to time to alter the number of Product units for
each Product that need to be maintained in the Safety Stock inventory.  

2.3Component Supply.  

(a)CCC shall maintain and manage adequate Component inventory in order to meet
Nevro’s Purchase Orders. CCC shall immediately notify Nevro in the event of any
potential material delays or shortages that may impact CCC’s delivery of
Products in accordance with the applicable Forecast or Purchase Orders.    

(b)CCC may order a reasonable volume of Components above the quantities required
to satisfy Purchase Orders in order to meet Component minimum order quantities
imposed by Component suppliers.

(c)Subject to the remainder of this Section 2.3(c), Nevro shall be responsible
for the cost/price of finished Products and Safety Stock (as such prices are set
forth on Exhibit A) and the cost of other types of Inventory purchased or
manufactured by CCC under the terms of this Agreement which becomes obsolete due
to reduction in demand (i.e., which were reasonably ordered based on a Forecast
including but not limited to the Product requirements contained in the binding
portion of the Forecast and the Components ordered that were ordered consistent
with the non-binding portion of the Forecast due to long Component lead times)
or due to Change Orders (if such finished Products, Safety Stock and other
Inventory were identified by either party as becoming obsolete in such mutually
agreed Change Order), provided that CCC has made a reasonable effort to return
such Inventory or cancel the applicable orders from Subcontractors (except that
this obligation on CCC to return or cancel will not apply in the case of
finished Products, Safety Stock, and WIP). In the event of such obsolescence,
CCC shall notify Nevro in writing of the applicable Inventory, which notice
shall explain the reason such

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

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Inventory became obsolete and shall include invoices and other documentation
that show the cost to CCC of such Inventory.

(d)If Nevro engages in a process pursuant to which Nevro accepts bids from third
parties to supply Components, Nevro shall (i) notify CCC in writing of Nevro’s
intent to engage a third party with respect to such Components within a
reasonable period of time prior to the scheduled commencement of such process,
(ii) provide CCC with a general written description of Nevro’s requirements with
respect to such Components, and (iii) provide CCC with an opportunity to submit
a bid to provide such Components to Nevro. Nevro shall discuss any such
submitted bid with CCC in good faith. If Nevro does not accept CCC’s bid in any
such process, Nevro shall inform CCC in reasonable detail of the reasons for
such non-acceptance.

2.4Purchase Orders.  During the Term of this Agreement, Nevro shall issue
Purchase Order(s) for the order volume of each of the Products specified in the
binding [***] ([***]) month portion of each Forecast. Each Purchase Order shall
include at least the following: (a) Nevro’s Purchase Order number;
(b) identification of the Products ordered by Nevro; (c) the Shipment Date; and
(d) any shipping instructions, including preferred carrier and shipping
destination.  Nevro and CCC agree that a Purchase Order sent to CCC by confirmed
facsimile or electronic transmission shall constitute a writing for all legal
purposes.  In addition, the parties may communicate regarding Purchase Orders
via mutually agreeable electronic means, such as confirmed electronic mail.

2.5Purchase Order Acceptance.  CCC will accept all Purchase Orders that have
Shipment Dates that conform to Section 2.4 and that order volumes of Products
that are within [***] percent ([***]%) and [***] percent ([***]%) of the
Forecast for the applicable period (the “Volume Acceptance Range”).  CCC will,
within five (5) business days after receipt of a Purchase Order, notify Nevro of
acceptance of such Purchase Order or will indicate the Shipment Dates that do
not comply with Section 2.4 or the order volumes that are not within the Volume
Acceptance Range.  Nothing contained in any Nevro Purchase Order or CCC Purchase
Order acknowledgement shall modify the terms of purchase or add any additional
or different terms or conditions except as otherwise specifically agreed in
writing by the parties and any pre-printed or similar terms or conditions that
may be incorporated in such Nevro Purchase Order or CCC Purchase Order
acknowledgement are hereby rejected.  

2.6Revision of Purchase Orders.  In the event that Nevro cancels a Purchase
Order inside the standard lead time for a Product as set forth on Exhibit A,
then Nevro will be responsible for all finished Product, WIP, raw material,
components and any non-cancelable purchase orders outstanding with suppliers
directly related to the cancelled Purchase Order. In the event that Nevro
cancels a Purchase Order outside of the standard lead time for a Product, Nevro
and CCC will negotiate the resulting costs.  Nevro may change an accepted
Purchase Order only if agreed upon in writing by CCC, but CCC shall use its
commercially reasonable efforts to accommodate increases, decreases or
reschedules of the quantities in a Purchase Order requested by Nevro. Any
additional costs of such change approved by Nevro prior to the implementation of
such change will be borne by Nevro.  

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

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2.7Minimum Purchase Thresholds.  During the Term, and subject to the terms and
conditions of this Agreement, Nevro will satisfy the minimum purchase thresholds
as defined in Exhibit A (such obligations, the “Minimum Purchase Thresholds”).

2.8Reduction of Minimum Purchase Thresholds.  If during the Term of this
Agreement with respect to any Product, for any reason: (a) CCC fails to supply
non-Defective Products in accordance with this Agreement with respect to at
least [***] percent ([***]%) of the amount of the Product scheduled on a
Purchase Order accepted in accordance with Section 2.5 (a “Purchase Order
Failure”); or (b) [***] percent ([***]%) or more of a shipment of the Product
delivered by CCC does not meet the applicable Specifications (a “Defect
Failure”); or (c) such Product is subject to an Epidemic Failure; then (i) Nevro
may require CCC to increase Safety Stock inventory specified in Section 2.2 up
to [***] ([***]) [***] worth of expected Product orders, and (ii) the Minimum
Purchase Thresholds for the year or years in which such events occur will be
[***] in connection with a Purchase Order Failure or the [***] affected by a
Defect Failure or Epidemic Failure. In addition, in the case of an extended
interruption of supply of sixty (60) consecutive days or more, CCC and Nevro
agree to negotiate in good faith further reductions in the Minimum Purchase
Thresholds until such time as CCC is in a position to satisfy future Purchase
Orders.

3.

Supply

3.1Delivery. Delivery of all Products shall be made EXW (Incoterms 2010)
Manufacturing Facility.  Title to and risk of loss for the Products shall pass
to Nevro at the delivery point.  Nevro shall be responsible for paying freight,
handling, shipping and insurance charges that it approves in writing in advance
for shipments to destinations requested by Nevro.  CCC shall deliver the
Products to Nevro on or before the applicable Shipment Date and in accordance
with the shipping instructions in the applicable Purchase Order, including the
ship-to address, carrier and means of transportation or routing.  Nevro may
return any unauthorized  over-shipment or any portions thereof, at CCC’s expense
and without charge to Nevro.  If Nevro fails to provide shipping instructions,
CCC will make the selection of carrier on a commercially reasonable basis.

3.2Notification of Delay. Without limiting Nevro’s rights and remedies under
this Agreement, if circumstances arise that prevent CCC from making the Products
available on the Shipment Date, CCC shall (i) immediately notify Nevro of the
nature of the problem, the methods taken to overcome the problem and the
estimated time of delay, and (ii) expedite shipment of such Products when the
problem is overcome.  

3.3Product Quality.  CCC shall test and inspect all Products before shipment for
compliance with the Specifications, all Applicable Laws, and the Quality
Agreement and shall provide to Nevro written certification that each Product
shipped was manufactured in compliance with the foregoing.  In addition, CCC
shall comply with its obligations under the Quality Agreement and Good
Manufacturing Practice with respect to all Manufacturing Facilities and the
manufacture of the Products.  Upon receipt of each shipment of Products, Nevro,
or a third party designated by Nevro, may test and inspect such Products for
compliance with the foregoing.

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

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3.4Rejection.  Nevro must conduct any incoming inspection tests not later than
45 days from the date of its receipt of the Products. Products not rejected by
Nevro by written notice to CCC within such period will be deemed accepted, with
the exception of Products with defects that are not readily observable by Nevro.
Any Defective Products may be returned to CCC in accordance with Section
10.3(b).  For clarity, nothing in this Section 3.4 modifies or otherwise affects
Nevro’s rights and remedies under Section 10 with respect to any Products.

3.5Consigned Components.

(a)In the event that Nevro supplies certain Consigned Components to CCC, such
Consigned Components shall be delivered to CCC in sufficient time and in
sufficient quantities based on Purchase Orders and in accordance with this
Agreement, including normal yield levels, to allow CCC to meet scheduled
Shipment Dates for the applicable Products.  All Consigned Components shall be
in good condition and in good working order.  Nevro assumes complete liability
for the quality of all Consigned Components and CCC shall not be responsible for
any Defects or deficiencies therein.  CCC shall, upon receipt of the Consigned
Components, perform all necessary inspections of the Consigned Components, in
accordance with its standard procedures and shall notify Nevro in writing, not
later than twenty (20) Days from the date of receipt of the Consigned
Components, of any Defects found or of any discrepancy in quantities. CCC
reserves the right, after receipt of the Consigned Components, to timely inform
Nevro of additional Defects which may be discovered or revealed by further
inspection by or through the manufacturing process that could not be discovered
at incoming inspection by CCC.

(b)CCC will provide Nevro with a written statement of the Consigned Components
used by CCC at the end of each calendar month.

3.6Subcontractors.

(a)Use of Subcontractors.  CCC will not use any Affiliate or Subcontractor for
any supply of Components or services related to the Product without the prior
written consent of Nevro.  If Nevro consents to the use of an Affiliate or
Subcontractor, Nevro may specify change control procedures applicable to the
provision of services by such Affiliate or Subcontractor in addition to the
terms of Section 5.

(b)Verification of Subcontractors.  Except for Nevro Dictated Subcontractors,
CCC shall establish and maintain written requirements, including quality
requirements, for evaluating, selecting, and assessing any Subcontractors and
shall ensure that each Subcontractor is qualified and able to provide the
product(s) or service(s) (including Components) required to perform its required
tasks or services in accordance with the Specifications, all Applicable Laws,
and this Agreement.  CCC shall establish and maintain appropriate quality
requirements to ensure the performance of Subcontractors (other than Nevro
Dictated Subcontractors) in accordance with the terms and conditions of this
Agreement, Applicable Laws, CCC’s standard operating procedures, and, if any,
Nevro’s written instructions.  CCC shall use commercially reasonable efforts to
ensure Nevro has the right to audit CCC’s Subcontractors to assure compliance
with this Agreement and any regulatory requirements, and CCC shall include such
right for Nevro to conduct such audits (including the right to access facilities
and records) in any applicable contract CCC has with a Subcontractor.

 

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(c)Liability for Subcontractors.  CCC shall be responsible for keeping all
Subcontractors adequately informed and ensuring that the correct design,
production, or process controls are applied to Subcontractor as applicable to
ensure that the Product, including any Component therein, conforms to the
Specifications.  With the exception of Nevro Dictated Subcontractors, CCC is
responsible for the acts and omissions of any Subcontractor as if those acts and
omissions had been carried out by CCC.

(d)Nevro Dictated Subcontractors.  In the event that a Nevro Dictated
Subcontractor supplies NDS Components to CCC, CCC shall (i) conduct inspection
and acceptance testing on such NDS Components in accordance with section 7.16
and Attachment 2 of the Quality Agreement (“NDS Component Testing”), (ii) use in
the manufacture of Products only NDS Components that have passed the properly
conducted NDS Component Testing (each, a “Tested NDS Component”), (iii) notify
Nevro of any NDS Components that fail the NDS Component Testing within thirty
(30) days after such failure, (iv) use commercially reasonable efforts to cause
such Nevro Dictated Subcontractor to deliver such NDS Components in sufficient
time and in sufficient quantities based on Purchase Orders and in accordance
with this Agreement to allow CCC to meet scheduled Shipment Dates for the
applicable Products, and (v) notify Nevro in writing within five (5) business
days of any shipment delay, NDS Component quality issue or other business or
performance concern with respect to any Nevro Dictated Subcontractor (each, an
“NDS Component Subcontractor Issue”), which writing shall describe in detail the
NDS Component Subcontractor Issue and any actions CCC has taken with respect to
such issue. Subject to and without limiting CCC’s obligations set forth
immediately above, (i) Nevro will be responsible for qualifying, monitoring, and
managing all Nevro Dictated Subcontractors in accordance with Nevro’s internal
procedures, (ii) except as set forth herein, CCC shall not be responsible for
the quality of NDS Components that have passed properly conducted NDS Component
Testing in accordance with the Quality Agreement and CCC shall not be
responsible for costs related to or arising from defects or deficiencies in any
NDS Components that have passed properly conducted NDS Component Testing in
accordance with the Quality Agreement, including, without limitation, costs and
expenses related to the repair or replacement (including shipping and handling
expenses) of any Defective Products that are Defective due to such defective or
deficient NDS Components that have passed properly conducted NDS Component
Testing in accordance with the Quality Agreement, provided that in each case
that any such defect or deficiency could not have reasonably been discovered
during NDS Component Testing and was not caused by CCC in its handling of such
NDS Component or during the manufacturing process, (iii) without limiting CCC’s
obligation to properly test NDS Components, CCC reserves the right, after
receipt of the NDS Components, to timely inform Nevro of additional defects
which may be discovered or revealed by further inspection by or through the
manufacturing process that could not be reasonably discovered during NDS
Component Testing, (iv) upon receipt of a notice of an NDS Component
Subcontractor Issue, Nevro will work with CCC and use reasonable efforts to
cause such Nevro Dictated Subcontractor to deliver non-defective NDS Components
in sufficient time and in sufficient quantities based on Purchase Orders and in
accordance with this Agreement, including normal yield levels, to allow CCC to
meet scheduled Shipment Dates for the applicable Products and (v) failure or
delay of CCC to perform fully any of its obligations under this Agreement caused
by defects or deficiencies in any NDS Component that has passed properly
conducted NDS Component Testing (which defects or deficiencies could not have
reasonably been discovered during NDS Component Testing and were not caused by
CCC in its handling of such NDS

 

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Component or during the manufacturing process) or the non-performance or delay
of a Nevro Dictated Subcontractor in delivering non-defective NDS Components
will be deemed not to be a breach of this Agreement if such NDS Components or
the Nevro Dictated Subcontractor’s non-performance or delay were the primary
cause of CCC’s failure or delay to fully perform such obligations.

 

4.

Price; Payment

4.1Product Purchase Price.  Nevro shall pay to CCC the prices for the Products
set forth in Exhibit A attached hereto. Notwithstanding the preceding sentence,
(a) subject to clause (b) of this Section 4.1, if there is a net increase or
decrease of $[***] or more in the [***] a Product ([***]), which increase or
decrease shall be [***]), then a corresponding change equal to [***] percent
([***]%) of the documented amount of such increase or decrease will be made to
the price of the applicable Product. The parties shall meet at least twice per
Contract Year to calculate the amount of any such increase or decrease and, if
any increase or decrease in the Product price is made as a result of any such
meeting, the parties shall update the [***] after such meeting to reflect the
change in the [***] such increase or decrease. CCC shall provide to Nevro
documentation [***] such increase or decrease.  All Purchase Orders for Products
issued by Nevro after the parties' agreement regarding the amount of such
increase or decrease shall reflect the adjusted Product price. For clarity,
Nevro shall [***] with respect to [***].  

4.2Invoices; Payments. CCC shall invoice Nevro for the Products on or after the
date on which CCC ships the Product to Nevro.  All such invoices shall be
submitted by CCC to Nevro via email. Nevro shall pay all undisputed amounts
within thirty (30) days following Nevro’s receipt of CCC’s invoice.  All
payments under this Agreement shall be in U.S. dollars. All amounts referenced
in or to be paid under this Agreement, exclude taxes, customs, shipping,
insurance and duties.  CCC agrees to notify Nevro of any past due amounts and
reserves the right to charge interest on any such undisputed amounts which
remain past due for ten (10) days after such notification at the rate of 1.5%
per month or the highest rate allowed by law, whichever is lower. In addition to
all other available rights and remedies on default, CCC may refuse orders,
require advance payment in full, ship C.O.D. or halt shipments if all undisputed
prior invoices are not paid in full within 10 days after CCC notifies Nevro in
writing of the applicable past due amounts under such invoices.  

4.3Taxes.  Nevro agrees to pay any applicable sales, use, excise or similar
taxes, including value added taxes and customs duties, itemized on the
applicable invoice and arising from purchases made by Nevro under this
Agreement, but not any taxes based on CCC’s net income.

4.4Cost Reduction Initiatives. CCC shall collaborate with Nevro to make
proposals that, if implemented, would deliver a reduction in the cost of the
Product, including by reducing Component and manufacturing costs and improving
Product yields. CCC shall provide to Nevro a plan detailing cost reduction
efforts that CCC proposes to undertake to achieve the cost reductions, which
must be approved by Nevro, which approval may be provided or withheld in Nevro’s
sole discretion.  The parties shall meet at least twice per Contract Year to
review the

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

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cost reduction efforts.  Nevro and CCC will mutually agree upon the business
case analysis, including expenses, cost savings and implementation
schedule.  Cost reduction efforts or proposals shall not compromise quality or
reliability, and CCC shall comply with Product Specifications and Good
Manufacturing Practices.  If CCC and Nevro share the expenses associated with
the implementation, cost savings shall be split [***] percent ([***]%) to Nevro
and [***] percent ([***]%) to CCC.  If either party pays the full cost of such
implementation (as such payment responsibility is specified in the approval of
such implementation), then that party will receive [***] percent ([***]%) of the
demonstrated cost reduction. For avoidance of doubt, for design changes in a
Product that are initiated by Nevro and for which the implementation costs are
paid by Nevro, Nevro will receive [***]% of the demonstrated cost reduction upon
implementation.  CCC shall give Nevro notice of the implementation of the
foregoing cost reductions as soon as practicable, but in any event within thirty
(30) days of the accomplished reduction. After any such implementation, all
invoices shall reflect the applicable reduced pricing and the parties shall work
to update Exhibit A accordingly.  

5.

Process Change Notification

5.1Specification Change Process.  If, during the Term of this Agreement, Nevro
wishes to engage CCC with respect to a change to any Specifications, including
critical raw material specifications and sourcing, for any Product then being
manufactured by CCC, it shall give CCC written notice of such request (a “Change
Order”).  CCC shall respond to such Change Order, including any pricing change
driven by such Change Order (provided that any such pricing change shall be
consistent with [***]), and the parties shall thereupon negotiate in good faith
for a written change to such Specifications, incorporating the modifications to
the Specifications and any associated regulatory approvals and facility
qualifications required as a result.  CCC may not reject reasonable Change
Orders requested by Nevro and CCC shall promptly implement any Change
Orders.  Except as specified in this Section 5.1, CCC may not change the
manufacturing process of the Products except in accordance with the Quality
Agreement. Any Inventory that will be rendered unusable as a result of a Change
Order shall be identified in such Change Order and CCC shall provide
documentation reasonably supporting the unusability of such Inventory. [***]  

5.2Notification of Changes.  

(a)Equipment Change.  CCC shall notify Nevro of all proposed changes to any
Equipment that may affect the Products or any certification, approval, or
qualification by any Governmental Authority.  Any such notice shall be provided
in accordance with the Quality Agreement.  

(b)Manufacturing Facility Change.  Two options exist for the relocation of the
manufacturing facility as described in clauses (i) and (ii) below.

(i)If CCC desires to relocate the manufacturing of the Product from the
Manufacturing Facility to the location specified on Exhibit E, CCC shall provide
written notice to Nevro and shall provide an updated schedule for such
relocation and such other

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

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information reasonably required by Nevro with respect to such proposed new
location.  Following the notice, CCC shall deliver to Nevro qualification parts
manufactured at such proposed new location and the Validation Documentation with
respect to such proposed new location for Nevro’s review and approval (which
approval shall not be unreasonably withheld).  CCC shall not ship any Product
manufactured at the new location until CCC’s receipt of a written notice from
Nevro that it is ready to receive Product manufactured at the new facility (the
“Facility Approval Notice”). CCC will use reasonable commercial efforts to
qualify and otherwise achieve all regulatory approvals necessary for the
relocation and the manufacture of Products at the new location as soon as
possible, excluding any such approvals with respect to the Product that Nevro
itself is legally required to obtain (“Nevro Approvals”).  Nevro will use
reasonable commercial efforts to achieve the Nevro Approvals as soon as possible
after Nevro’s approval of the Validation Documentation.  Nevro shall provide
reasonable cooperation to CCC in connection with the qualification of such new
facility, and CCC shall provide reasonable cooperation to Nevro in connection
with obtaining the Nevro Approvals.   If Nevro does not issue the Facility
Approval Notice within [***] ([***]) days after all regulatory approvals
(including Nevro Approvals) necessary to manufacture the Product at the new
location have been obtained and CCC has reasonably demonstrated that it can
manufacture Products in accordance with this Agreement at such new location,
then all prices for the Products will automatically [***] ([***]%) unless and
until Nevro issues the Facility Approval Notice.  Nevro understands and agrees
that the relocation of the Manufacturing Facility located at General Paz 1371,
11400 Montevideo, Uruguay is accounted for in the pricing in Exhibit A, and
therefore, [***] will be made as result of such relocation.    Unless agreed
upon by the parties, each party will be responsible for their direct costs
associated with the move, including all costs related to internal Product and
process validation, equipment purchase and implementation and integration costs.
Notwithstanding the foregoing, CCC will be responsible for (i) the third party
expenses [***] with the [***] for such relocation (ii) the cost of [***]
required in connection with [***] required in connection with such relocation.  

(ii)Based on business requirements and agreed upon by both parties in writing,
the manufacturing of a Product could be relocated to a CCC site located in the
United States.  All requirements identified in  Section 5.2(b)(i) above must be
successfully completed before such Product can be shipped from the new location.
The NRE cost associated with this facility relocation will be negotiated in good
faith between the parties prior to the time the facility relocation is to be
executed.   The unit price for the Products manufactured at such new facility
will be in accordance with Exhibit A, unless otherwise agreed to by the
parties.  

(c)Change Approval.  CCC shall comply with the Quality Agreement for the
implementation of any changes to any process, system, or activity relating to
the Product. .  

6.

Personnel; Facilities; Equipment; Nevro Property

6.1Personnel.  CCC shall ensure that all of its personnel engaged in the
storage, handling, packaging, distribution, or other processing of the Products
shall have the education, training and experience reasonably sufficient to
perform their assigned functions in accordance with Applicable Laws.

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

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6.2Facilities.  CCC shall ensure that the Manufacturing Facility shall be
orderly and maintains (i) reasonably adequate lighting, ventilation and water
supply for the activities relating to the Product, (ii) space for performing the
activities required under this Agreement, and (iii) the ability to reasonably
separate discrete operations or processes relating to the Product in order to
prevent mixing, product errors or other contamination of Product.  

6.3Equipment.  

(a)CCC shall bear all costs of maintenance and repair, including validation,
periodic calibration, as required, and preventive maintenance, of the Equipment,
whether required as a result of routine and ordinary wear or otherwise.  

(b)CCC shall secure and maintain in good order, at its sole cost and expense,
all current governmental registrations, permits and licenses that are required
by Governmental Authorities in order for CCC to use the Equipment and to
manufacture the Products under this Agreement.  CCC shall make copies of such
registrations available for viewing by Nevro and its designees for inspection,
upon reasonable request from Nevro. CCC agrees to promptly inform Nevro of any
injury that occurs on manufacturing and testing equipment that is owned by Nevro
but in a CCC Manufacturing Facility.  

6.4Nevro Property.  Any Nevro Property shall reside and/or remain the property
of Nevro and shall (a) be clearly marked or tagged as the property of Nevro, (b)
be and remain personal property, and not become a fixture to real property, (c)
be subject to inspection by Nevro at any time, (d) be used solely for the
purpose of supplying the Products to Nevro, (e) be kept free by CCC from any and
all liens and encumbrances, (f) not be modified in any manner by CCC without the
prior written approval of Nevro, and (g) be maintained by CCC in accordance with
Nevro’s maintenance procedures and guidelines, including, if applicable, but not
limited to, periodic calibration procedures.  Nevro will pay all maintenance
costs of Nevro Property.  Nevro shall retain all rights, title and interest in
Nevro Property and CCC agrees to treat and maintain the Nevro Property with the
same degree of care as CCC uses with respect to its own property, but no less
care than reasonable care.  All processes and specifications related to the
Nevro Property shall constitute Nevro’s Confidential Information. CCC shall bear
all risk of loss or damage to the Nevro Property, normal wear and tear excepted,
until it is returned or delivered to Nevro. Upon Nevro’s request, CCC shall
deliver all of the Nevro Property to Nevro in good condition, normal wear and
tear excepted, without cost to Nevro (except freight costs); Nevro shall
determine the manner and procedure for returning the Nevro Property, and shall
pay the corresponding freight costs.  CCC agrees to execute all documents, or
instruments evidencing Nevro’s ownership of the Nevro Property as Nevro may
require from time to time.  

7.

Suspension of Minimum purchase thresholds

In the event that an injunction, exclusion order, or cease and desist order is
issued by any relevant court or tribunal, which thereby prevents the sale,
manufacturing, or importation of  a Product  due to such Product infringing the
intellectual property rights of a third party, the parties agree to suspend the
Minimum Purchase Thresholds for such Product until the

 

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injunction, exclusion order, or cease and desist order is lifted or terminated
(a “Minimum Purchase Suspension”).   The Minimum Purchase Suspension shall
terminate and Nevro shall immediately commence its obligations to satisfy the
Minimum Purchase Thresholds upon the termination or lifting of the applicable
injunction, exclusion order, or cease and desist order.  Nevro shall use its
best efforts to prevent any such injunction, exclusion order, or cease and
desist order from being issued. desist order from being issued. If an
injunction, exclusion order, or cease and desist order is issued despite Nevro’s
best efforts, Nevro shall use its best efforts to obtain a judgment vacating,
terminating or lifting any such injunction, exclusion order, or cease and desist
order as soon as possible after the issuance thereof, to the extent it is
legally permissible to do so.

8.

Program Management; Product Support; Complaints and Adverse Events; Epidemic
Failure

8.1Program Management. Each party shall provide a list of program team members.
The list shall include name, title, phone number, and email address. The Program
Team List is attached as Exhibit D.

8.2Technical Support.  CCC agrees to provide Nevro reasonable technical support
and assistance upon request regarding questions about the Specifications and the
manufacturing processes for the Products.  Any charges for such assistance
(beyond normal manufacturing assistance consistent with standard contract
manufacturing) will be agreed upon by the parties and paid for by Nevro.

8.3Other Support.  Each party shall, in response to any complaint, or in the
defense by the other party of any litigation, hearing, regulatory proceeding or
investigation relating to the Product, make available to the other party during
normal business hours and upon reasonable prior written notice, such party’s
employees and records reasonably necessary to permit the effective response to,
defense of, or investigation of such matters, subject to appropriate
confidentiality protections. Any charges for such assistance will be agreed upon
by the parties.

8.4Epidemic Failure.  

(a)For the purposes of this Agreement, epidemic failure will be deemed to have
occurred if there is an occurrence of an in-field failure rate of [***] percent
([***]%) or more of the total units of Product delivered by CCC to Nevro in any
[***] month period and the root cause of such failure is [***] (“Epidemic
Failure”).  In the event of an Epidemic Failure, CCC and Nevro will cooperate to
implement the following procedure:

(i)The discovering party shall promptly notify the other party upon discovery of
the failure; provided, however, that, in the event of a failure that creates a
risk of injury or death, the discovering party will immediately notify the other
party and will also provide the other party with written notice within [***]
([***]) business hours of any notification made by the discovering party to any
Governmental Authority responsible for regulation of product safety.  

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

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(ii)Within [***] ([***]) business day after such notification, CCC shall provide
to Nevro a preliminary plan for diagnosing the problem, which plan CCC will
revise on Nevro’s request;

(iii)CCC and Nevro shall jointly diagnose the problem (root cause) and plan a
solution or corrective action;

(iv)CCC shall prepare and consult with Nevro regarding an appropriate corrective
action plan; and

(v)CCC and Nevro shall mutually agree on a corrective action plan, customer
notification, replacement scheduling and remediation, which may include a
recall, field action, and return inventory replacement, and repair.

Notwithstanding the foregoing, Nevro may undertake any and all action necessary
independently of CCC to correct the Epidemic Failure and shall communicate such
action to CCC; provided, that CCC is unable or unwilling to promptly correct the
Epidemic Failure.

(b)Any Defective Products subject to Epidemic Failure (including those Defective
Products outside of the Warranty Period) may be returned to CCC in accordance
with Section 10.3b.

9.

Regulatory Action

9.1Regulatory Inspection.  In the event that CCC receives notice of any
inspection by a Governmental Authority of the Manufacturing Facility that
involves or otherwise relates to the Product, CCC shall notify Nevro within
twenty-four (24) hours of its receipt of such notice.  CCC will cooperate,
including access to the Manufacturing Facility, Records and CCC personnel, as
reasonably necessary to support any such inspection and provide communication
and access to Nevro in accordance with the Quality Agreement.  

9.2Recalls.

(a)Incidents and Product Recalls.  CCC shall notify Nevro within [***] ([***])
business day of any information which may affect the safety or the continued
marketing of the Product, including any information relating to: (i) any
Product, including any production lot, being made subject to any correction
and/or removal, including a recall, market withdrawal or stock recovery
(collectively, a “Recall”), regardless of whether such Recall is initiated by
CCC, Nevro and/or any third party, including a Governmental Authority; (ii) any
incident that would cause the Product or its labeling to be mistaken for, or
applied to, another article; or (iii) any contamination or any significant
chemical, physical, or other change or deterioration in such Product that would
cause it to fail to meet the Specifications; or (iv) any other matter that would
require a report to the FDA concerning the Product.

(b)Cooperation.  In the event either party believes it may be necessary to
conduct a Recall, CCC and Nevro shall consult with each other as to how best to
proceed, it

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

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being understood and agreed that the final decision as to any Recall of any end
product in which the Product is included shall be at Nevro’s sole discretion,
following consultation with CCC.  Nevro will be responsible for, and oversee,
notification of any such Recall for such end product sold by Nevro to its
customers and will provide CCC with a final report to confirm that the Recall
was performed in compliance with Applicable Law.  In any event, with respect to
any such Recall, Nevro shall make all contacts with the FDA and shall be
responsible for coordinating all necessary activities in connection with the
Recall.  CCC will fully cooperate, at CCC’s sole expense, in providing all
requested information to Nevro, including any request by Nevro that CCC (i)
investigate such Recall, (ii) provide Nevro with an initial response or
preliminary report relating to the circumstances leading to the Recall, and
(iii) secure any recalled Product to prevent further distribution.

 

9.3Confidentiality.  All information disclosed or exchanged pursuant to this
Section 9 shall be treated as Confidential Information of the disclosing party
and shall not be disclosed to any third party without the original party’s prior
written consent, unless such disclosure is permitted under Section 13.3(d).

10.

Representations, Warranties and Covenants

10.1Representations, Warranties and Covenants of CCC.  CCC represents and
warrants to Nevro that:

(a)as of the Effective Date, CCC is duly organized, validly existing, and in
good standing under the laws of New York and has full corporate power and
authority to enter into this Agreement;

(b)as of the Effective Date, CCC is in good standing with all applicable
Governmental Authorities;

(c)as of the Effective Date, CCC has taken all corporate actions necessary to
authorize the execution and delivery of this Agreement and the performance of
CCC’s obligations under this Agreement;

(d)the performance of CCC’s obligations under this Agreement do not materially
conflict with, or constitute a material default under CCC’s charter documents,
any contractual obligation of CCC or any court order;

(e)neither CCC nor any of its employees, agents, consultants and Subcontractors
is debarred, suspended, proposed for debarment, or otherwise determined to be
ineligible to participate in federal health care programs (as that term is
defined in 42 U.S.C. 1320a-7b(f) or under any analogous foreign counterpart), or
convicted of a criminal offense related to the provision of health care items or
services;

(f)CCC shall not, during the term of this Agreement, undertake any obligation
that conflicts with CCC’s obligations under this Agreement;

 

 

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(g)CCC has obtained all material licenses, permits, authorizations, and
permissions necessary or requisite under Applicable Law for meeting and
performing its obligations under this Agreement, and all such material licenses,
permits, authorizations, and permissions are in full force and effect and shall
be kept in full force and effect during the term of this Agreement;

(h)the Manufacturing Facility is registered with the appropriate Governmental
Authorities and in compliance with all applicable Governmental Authority
standards and Applicable Laws;

(i)CCC shall manufacture all Products at and supply all Products from the
Manufacturing Facility, and CCC shall not, without Nevro’s prior written
consent, manufacture Products at or supply Products from any facility other than
the Manufacturing Facility;

(j)CCC shall transfer to Nevro good and clear title to the Products, free and
clear of all liens, claims and encumbrances;

(k)CCC has the right to grant the rights granted by CCC hereunder and CCC’s
manufacturing process and its performance of services under this Agreement will
not infringe any Intellectual Property Right of any third party;

(l)CCC shall not sell or otherwise transfer the Products to any third party,
other than as consented to by Nevro in writing; and

(m) CCC has the right and power to enter into this Agreement.  

10.2Representations, Warranties and Covenants of Nevro.  Nevro represents and
warrants to CCC that

(a)as of the Effective Date, Nevro is duly organized, validly existing and in
good standing under the laws of Delaware and has full corporate power and
authority to enter into this Agreement;

(b)as of the Effective Date, Nevro is in good standing with all applicable
Governmental Authorities;

(c)as of the Effective Date, Nevro has taken all corporate actions necessary to
authorize the execution and delivery of this Agreement and the performance of
Nevro’s obligations under this Agreement;

(d)the performance of Nevro’s obligations under this Agreement do not materially
conflict with, or constitute a material default under Nevro’s charter documents,
any contractual obligation of CCC or any court order;

(e)neither Nevro nor any of its employees, agents, consultants or Subcontractors
is debarred, suspended, proposed for debarment, or otherwise determined to be
ineligible to participate in federal health care programs (as that term is
defined in 42 U.S.C.

 

 

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1320a-7b(f) or under any analogous foreign counterpart), or convicted of a
criminal offense related to the provision of health care items or services;

(f)Nevro shall not, during the term of this Agreement, undertake any obligation
that conflicts with Nevro’s obligations under this Agreement;

(g)Nevro has obtained all material licenses, permits, authorizations, and
permissions necessary or requisite under Applicable Law for meeting and
performing its obligations under this Agreement, and all such
material  licenses, permits, authorizations, and permissions are in full force
and effect and shall be kept in full force and effect during the term of this
Agreement; and

(h)Nevro has the right and power to enter into this Agreement.  

10.3Performance Warranty and RMA Process.  

(a)CCC warrants that during the Warranty Period each Product will be free from
defects in material and workmanship, will conform to the relevant
Specifications, and will have been manufactured in accordance with Good
Manufacturing Practices and otherwise in accordance with this Agreement.  In the
event that any Product does not conform to such warranty, CCC will repair or
replace such Product (or refund the price paid therefor) as provided for in
Section 10.2(b).    

(b)Any Defective Products may be returned to CCC  and CCC will, at its sole
expense (including shipping and handling expenses), either (i) repair the
applicable Defective Products within a reasonable time (which shall be no
greater than the lead time set forth on Exhibit A for the applicable Product);
(ii) replace the applicable Defective Products within a reasonable time (which
shall be no greater than the lead time set forth on Exhibit A for the applicable
Product); and/or (iii) and if neither of (i) or (ii) is feasible within such
time, upon Nevro’s request and without limiting Nevro’s rights and remedies
under this Agreement, CCC will refund the amount of the payments paid for the
Product; provided that (i) Nevro obtains a return authorization from CCC prior
to returning the Products (and CCC shall provide Nevro with an RMA number
promptly upon request), and the failure analysis, or summary thereof, conducted
by Nevro shall accompany the Product or shall otherwise be promptly be delivered
to CCC. If the Product returned to CCC is not covered by the warranty (because
the return was outside the Warranty Period or was found not to be Defective
Product) CCC may charge Nevro for any services performed on the Product.

(c)Notwithstanding any other provision of this Agreement, CCC shall have no
obligation to Nevro under the limited warranty set forth in Section 10.3(a) or
under Section 14.1 to the extent that (a) the Product is not used in accordance
with the Specifications; (b) the Product has had modifications, alterations,
repairs or work performed on it by any party other than CCC or CCC’s authorized
agents; (c) the failure is due to incorrect use or handling of the Products by
Nevro or third parties after Nevro accepts such Product; (d) the failure is due
to a defect in a Tested NDS Component (which defect could not have reasonably
been discovered during NDS Component Testing and which failure or defect was not
caused by CCC or its agents

 

 

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in its handling of such Tested NDS Component or otherwise during the
manufacturing process), or (e) Nevro has not complied with Section 10.3(b)
(collectively, the “Section 10.3(c) Causes”).  

 

10.4Disclaimer of Warranties.  

(a)EXCEPT FOR THE WARRANTIES MADE IN SECTIONS 10.1 AND 10.3, CCC MAKES NO OTHER
WARRANTIES, EXPRESSED OR IMPLIED, WITH RESPECT TO THE COMPONENTS, PRODUCTS OR
ANY SERVICES PROVIDED UNDER THIS AGREEMENT, AND DISCLAIMS ALL OTHER WARRANTIES
INCLUDING THE WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A
PARTICULAR PURPOSE OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICE.

(b)EXCEPT FOR THE WARRANTIES MADE IN SECTION 10.2, NEVRO MAKES NO OTHER
WARRANTIES WITH RESPECT TO THE NEVRO INTELLECTUAL PROPERTY, CONSIGNED
COMPONENTS, NEVRO PROPERTY, THE LICENSES GRANTED HEREUNDER OR OTHER MATERIALS OR
DOCUMENTATION PROVIDED BY NEVRO HEREUNDER AND DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF NON-INFRINGEMENT,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICE.

11.

Term and Termination

11.1Term.  Unless earlier terminated pursuant to the terms and conditions of
this Agreement, this Agreement shall commence on the Effective Date and shall
remain in full force and effect for ten (10) years.  Thereafter, this Agreement
will be automatically extended for additional two (2) year periods unless one
party notifies the other in writing one (1) year in advance that it does not
intend to renew the Agreement for an additional term (all such renewal periods
and the initial term collectively being the “Term”).

11.2Termination by Nevro.  Nevro may terminate this Agreement by providing three
(3) years written notice to CCC in the event a Change of Control of CCC occurs,
provided that such notice period shall be one (1) year in the event CCC is
acquired by a competitor to Nevro such as but not limited to St. Jude Medical,
Boston Scientific or Medtronic or an Affiliate of any such entities.  Such
notice shall be given by Nevro not less than [***] ([***]) days after the
effective date of any Change of Control or Nevro’s rights under this Section
11.2 shall expire.

11.3Termination for Certain Events.  Either party may terminate the Agreement by
providing written notice to the other party, upon the occurrence of any of the
following events:

(a)if the other party ceases to do business, or otherwise terminates its
business operations, excluding any situation where all or substantially all of
such other party’s assets, stock or business to which this Agreement relates are
acquired by a third party (whether by sale, acquisition, merger, operation of
law or otherwise);

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

 

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(b)if the other party breaches any material provision of this Agreement and
fails to cure such breach within [***] ([***]) days of written notice describing
the breach, except that an undisputed breach of the payment provision of this
Agreement must be cured within [***] ([***]) day of written notice describing
the breach; or

(c)if the other becomes insolvent, makes an assignment for the benefit of
creditors, files a petition in bankruptcy, permits a petition in bankruptcy to
be filed against it, presents a petition or has a petition presented by a
creditor for its winding up, or enters into any liquidation or call any meeting
of its creditors, or admits in writing that it is unable to pay its debts as
they mature, or if a receiver or examiner is appointed for a substantial part of
its assets.

11.4Consequences of Termination.  

(a)Upon any termination or expiration of this Agreement, unless otherwise agreed
to by the parties, CCC shall continue to fulfill, subject to the terms of this
Agreement, all Purchase Orders placed by Nevro and accepted by CCC in accordance
with this Agreement prior to the effective date of termination or expiration.
Notwithstanding the foregoing, if this Agreement is terminated by CCC in
accordance with Section 11.3, then CCC shall not be required to fulfill its
obligations on any Purchase Orders.  Furthermore, CCC shall promptly turn over
to Nevro all Products (and Nevro shall pay for such Products at the then-current
price) and the Specifications, whether or not completed, and both parties shall
promptly turn over to the respective party the Confidential Information of such
party.

11.5Accrued Rights.  Termination or expiration of this Agreement for any reason
will not affect the rights and obligations of the parties accrued prior to the
effective date of the termination or expiration of this Agreement.

11.6Survival.  The following Articles and Sections of this Agreement shall
survive its termination or expiration:  Articles 1, 4 (solely to the extent
payment obligations remain after the effective date of such termination or
expiration), 9, 10, 11, 12, 13, 14, 15, 16 and 17 and Sections 6.4 and 8.3 and
8.4.

11.7Last Time Buy. In the event of any termination (excluding CCC’s termination
pursuant to Section 11.3 or termination pursuant to Section 11.2) or non-renewal
of this Agreement, Nevro shall have the option to make a Last Time Buy.   If
Nevro provides the notice of termination, then Nevro must provide the Last Time
Buy order at the same time it provides the notice of termination.  If CCC
provides the notice of termination under Section 11.1, then Nevro must provide
the Last Time Buy order at least [***] ([***]) months prior to the effective
date of termination and must take delivery of such Last Time Buy within [***]
([***]) months of such order.  Any Last Time Buy under Section 11.1 or Section
11.2 will be subject to a price increase equal to [***] (i.e., [***]), provided
that such incremental costs shall not exceed [***]% of the price of the
applicable Products. CCC shall provide invoices and other reasonably detailed
documentation to demonstrate the amount of such costs.  

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

 

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11.8Termination of Predecessor Agreement. The parties agree that as of the
Effective Date the Supply Agreement between Centro De Construccion de
Cardioestimuladores del Uruguary S.A. and Nevro Corp. dated March 13, 2015 is
terminated.  CCC warrants that it has the power and authority to terminate such
agreement.  

12.

Intellectual Property

12.1Pre-Existing Property. The term “Pre-Existing Property” means all rights of
a party to designs, inventions (whether patentable or not), copyrights,
trademarks, trade secrets, processes, software, devices and other Intellectual
Property Rights and confidential information owned or held by a party
immediately prior to the Effective Date. The parties acknowledge and agree that
all Pre-Existing Property is the property of the party or its licensors that
owned such property immediately before the Effective Date and that, except as
expressly set out herein, nothing in this Agreement shall convey or otherwise
grant any rights in or to any Pre-Existing Property from one party to the other
party.

12.2Resulting Property. The term “Resulting Property” means all designs, data,
information, inventions, improvements, discoveries, methods, processes (in each
case whether patentable or not), software, and devices and any Intellectual
Property Rights in any of the foregoing (including copyrights, trademarks, trade
secrets, and patent rights) developed by either party as a result of this
Agreement.

12.3Grant of License.  To the extent that any Resulting Property or any
materials, goods or services to be delivered or provided by CCC to Nevro under
this Agreement (“Deliverables”) incorporate in any manner any of the
Pre-Existing Property of CCC or any improvements to or derivatives of the
Pre-Existing Property of CCC (the “Incorporated CCC Property”), CCC hereby
grants to Nevro and its Affiliates and successors and assigns a perpetual,
irrevocable, fully paid, worldwide, sublicensable, non-exclusive license under
the Incorporated CCC Property and all Intellectual Property Rights therein to
make, use, sell, offer for sale, and import the Incorporated CCC Property and
all Intellectual Property Rights therein, in connection with such Resulting
Property or Deliverables and any improvements, derivatives or successor works of
or to such Resulting Property and Deliverables as Nevro considers appropriate,
including to use, manufacture, sell, offer for sale, import, display, copy,
perform, modify, alter and support the Incorporated CCC Property and any
products or services in which such property is incorporated. The license granted
to Nevro includes the rights to future improvements to or derivatives of the
Incorporated CCC Property to the extent such improvements or derivatives are
utilized in connection with a Deliverable, but it does not require CCC to take
any actions or perform any activities to incorporate such property into any
deliverable in connection with the Resulting Property or Deliverables, or any
improvements, derivatives or successor works thereof or thereto. Nothing in this
Agreement will be deemed to grant Nevro the right to market, sub-license or
otherwise use the Pre-Existing Property of CCC other than in connection with one
or more Deliverables or the Resulting Property and products or services in which
they are incorporated, or improvements, derivatives or successor works of the
foregoing.  

12.4Ownership of Resulting Property. The parties acknowledge and agree that all
Resulting Property and all Intellectual Property Rights therein, excluding the
Incorporated CCC

 

 

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CONFIDENTIAL

Property and any changes or improvements to the Incorporated CCC Property made
by CCC and all Intellectual Property Rights therein, shall be solely owned by
Nevro. CCC shall promptly disclose any such Resulting Property to Nevro. CCC
hereby assigns, and shall cause all of its employees, agents, Affiliates,
Subcontractors and other authorized representatives to assign, to Nevro any and
all interests it or they may have in any such Resulting Property and all
Intellectual Property Rights therein. CCC agrees to cooperate with Nevro, at
Nevro’s expense, for the purpose of filing and prosecuting patent and other
Intellectual Property Right applications in connection with the Resulting
Property, including the execution of any and all legal papers which are
necessary or desirable to affect the intent of this Section 12.4.

13.

Confidential Information

13.1Confidentiality Obligations.  Each party agrees that, during the Term of
this Agreement and thereafter, such party shall maintain all Confidential
Information of the other party in strict confidence, and shall not use such
Confidential Information for any purpose other than to perform its obligations
or exercise its rights under this Agreement.   A receiving party may disclose
Confidential Information to its directors, officers, employees, authorized
agents and professional advisers to the extent such persons have a need to know
such information for the purpose of performing such party’s duties and
obligations or exercising such party’s rights hereunder, provided that such
party advises each such individual of the terms of this Section 13 and ensures
that each such individual receives and hold such information as if that
individual were a party to this Agreement.

13.2Exceptions to Confidentiality.  The foregoing obligations in Section 13.1
will not apply to any portion of Confidential Information to the extent that it
can be established by the receiving party with competent proof that such
portion:

(a)was already known to the receiving party as evidenced by its written records,
other than under an obligation of confidentiality, at the time of disclosure;

(b)was generally available to the public or was otherwise part of the public
domain at the time of its disclosure to the receiving party;

(c)became generally available to the public or otherwise becomes part of the
public domain after its disclosure and other than through any act or omission of
the receiving party in breach of this Agreement; or

(d)is independently developed by the receiving party without use of the
Confidential Information received from the disclosing party, as evidenced by its
written records;

(e)was subsequently lawfully disclosed to the receiving party by a third party
other than in contravention of a confidentiality obligation of such third party
to the disclosing party.

13.3Authorized Disclosures.  Each party may disclose the other party’s
Confidential Information to the extent such disclosure is reasonably necessary
to (i) perform its obligations or exercise its rights under this Agreement and
such disclosure is made to a third party who has a

 

 

22

 

 

 

 

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CONFIDENTIAL

need to know the Confidential Information and who agrees to be bound by
confidentiality restrictions at least as restrictive as those contained in this
Agreement, and (ii) to comply with Applicable Law, a court order, or rules of a
securities exchange.  If a party is required to make any such disclosure of the
other party’s Confidential Information under this Section 13.3, it will give
reasonable advance notice to the other party of such disclosure requirement,
will reasonably cooperate with the other party in its efforts to secure
confidential treatment of such Confidential Information prior to its disclosure,
and will use all reasonable efforts to secure confidential treatment of such
Confidential Information prior to its disclosure (whether through protective
orders or confidentiality agreements or otherwise).

13.4Ownership and Return of Confidential Information.  All Confidential
Information provided hereunder shall remain the property of the disclosing
party.  The receiving party shall, within ten days of a written request to do
so, return to the disclosing party all Confidential Information that has been
provided in tangible form and shall, unless prohibited by law, destroy or
otherwise render unintelligible all other Confidential Information.
Notwithstanding the foregoing, each party will be allowed to keep one copy of
the Confidential Information in order to ensure continued compliance with the
terms of this Agreement.

13.5Equitable Relief.  The parties acknowledge that monetary damages may not be
sufficient remedy for a breach of obligation of confidentiality in this
Agreement and agree that each Party shall be entitled to seek appropriate
equitable remedies, including injunctive relief, to prevent the unauthorized use
or disclosure of any Confidential Information.

13.6Public Announcements.  Except to the extent required by Applicable Law,
neither party shall make any public announcements concerning this Agreement or
the terms hereof without the prior written consent of the other party.  

14.Indemnification.  

14.1CCC shall indemnify and hold Nevro and its Affiliates and its and their
directors, officers, agents, employees, and consultants (the “Nevro
Indemnitees”) harmless from and against any liabilities, damages, losses, costs,
and expenses (including reasonable attorneys’ fees) ) which the Nevro
Indemnitees may incur or suffer as a result of claims by third parties to the
proportionate extent they result from or arise out of (i) any (A) personal
injury or death or (B) other claim caused by a breach by CCC of the limited
warranty set forth in Section 10.3(a), (ii) any violation of law by CCC, (iii)
the gross negligence or intentionally wrongful conduct of CCC, and (iv) a breach
of the representations, warranties or covenants in Section 3.3, Section 10.1,
and Section 13.  Nevro shall promptly, and in any event, within  thirty
(30)  days, after Nevro first learns of such claim, notify CCC of such claim
tender the sole defense of such claim to CCC (provided CCC diligently pursues
such defense), and cooperate with CCC at CCC’s expense in connection with such
defense.

14.2Nevro will indemnify, defend and hold harmless CCC and its Affiliates and
each of their officers, directors, shareholders, employees, agents, successors
and assigns (the “CCC Indemnitees”) against any and all losses, obligations,
liabilities, damages, actions, settlements, judgments and reasonable costs and
expenses which the CCC Indemnitees may incur or suffer (including, but not
limited to, reasonable legal fees) as a result of claims by third parties to the

 

 

23

 

 

 

 

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CONFIDENTIAL

proportionate extent arising out of or related to (a) the breach by Nevro of any
of its warranties in Section 10.2 or the  covenants contained in Section 13 of
this Agreement, (b) the gross negligence or intentionally wrongful conduct of
Nevro, (c) the storage, handling, modification, distribution, marketing or sale
of the Nevro System and/or any of the Products (including, but not limited to,
any design defects of the Product and any personal injury or death or other
claims resulting from such design defects), but, for clarity, excluding any
liability to the extent CCC is obligated to indemnify Nevro for such liability
under Section 14.1 and any liability to the extent such liability arises from
CCC’s breach of this Agreement, (d) any statement, promise, representation or
warranty made by Nevro or by any agent or distributor of Nevro to a purchaser
beyond the limited warranty made by CCC in this Agreement, (e) any and all
Section 10.3(c) Causes after shipment by CCC, (f) materials, Components,
directives or instructions given by Nevro to CCC, made in writing, (g) any
failure to include warnings required by law or regulation on the Nevro System in
which a Product is incorporated and any recall of such Nevro System that is not
caused by CCC’s breach of this Agreement, and (h) infringement of the
proprietary rights of any third party by Nevro Intellectual Property.  CCC shall
promptly, and in any event, within thirty (30) days, after CCC first learns of
such claim, notify Nevro of any claim under this section, tender the defense of
such claim to Nevro (provided Nevro CCC diligently pursues such defense), and
cooperate with Nevro at Nevro’s expense in connection with such defense.

      

15.Limitation of Liability.  SUBJECT TO THE REMAINDER OF THIS SECTION 15, (A)
NEITHER PARTY WILL BE LIABLE UNDER THIS AGREEMENT FOR ANY INDIRECT,
CONSEQUENTIAL, COLLATERAL, SPECIAL OR INCIDENTAL DAMAGES (INCLUDING, BUT NOT
LIMITED TO, LOSS OF PROFITS) WHETHER SUCH CLAIM IS BASED ON CONTRACT,
NEGLIGENCE, STRICT TORT, WARRANTY OR ANY OTHER BASIS, AND (B) EACH PARTY’S TOTAL
LIABILITY UNDER THIS AGREEMENT ([***]) WILL NOT EXCEED [***] FOR THE IMMEDIATELY
PRECEDING [***] ([***]) MONTH PERIOD (INCLUDING ANY PORTION OF SUCH PERIOD
PRECEDING THE EFFECTIVE DATE).  NOTWITHSTANDING ANY PAYMENTS OF DAMAGES MADE
UNDER THIS SECTION, IF CCC BREACHES THIS AGREEMENT, NEVRO WILL BE ENTITLED TO
SPECIFIC PERFORMANCE AND THE LAST TIME BUY PURSUANT TO SECTION 11.7.  THE
FOREGOING LIMITATIONS OF LIABILITY DO NOT APPLY TO A PARTY’S INDEMNIFICATION
OBLIGATIONS UNDER SECTION 14.1 (PROVIDED THAT WITH RESPECT TO ANY “OTHER CLAIM”
DESCRIBED IN SECTION 14.1(i)(B), CCC’S LIABILITY SHALL BE LIMITED TO AN AMOUNT
EQUAL TO [***] THE AMOUNT OF THE LIABILITY LIMIT DESCRIBED ABOVE IN THIS SECTION
15) OR SECTION 14.2, OR CONFIDENTIALITY OBLIGATIONS HEREUNDER.  

16.

Insurance

16.1CCC Insurance.  CCC shall procure and maintain product liability insurance
in such amounts as ordinary good business practice for its type of business
would make advisable and shall provide Nevro with evidence of this coverage;
provided, however, that in no case shall the limits of such coverage be less
than the following (but subject to any deductible or self-insured retention
(SIR)):

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

 

24

 

 

 

 

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CONFIDENTIAL

Bodily Injury:$[***]Each Occurrence

$[***]General Aggregate

Property Damage:$[***]Each Occurrence

$[***]General Aggregate

Upon request, CCC shall provide Nevro with an insurance certificate on or before
January 31st of each year concerning the year started specifying the amounts
stated in this Section 16.1 including the SIR.

16.2Nevro Insurance.  Nevro shall procure and maintain product liability
insurance in such amounts as ordinary good business practice for its type of
business would make advisable and shall provide CCC with evidence of this
coverage; provided, however, that in no case shall the limits of such coverage
be less than the following (but subject to any deductible or self-insured
retention (SIR)):

Bodily Injury:$[***]Each Occurrence

$[***]General Aggregate

Property Damage:$[***]Each Occurrence

$[***]General Aggregate

 

Upon request, Nevro shall provide CCC with an insurance certificate on or before
January 31st of each year concerning the year started specifying the amounts
stated in this Section 16.2 including the SIR.

17.

General Provisions

17.1Relationship of the Parties.  The parties shall perform their obligations
under this Agreement as independent contractors and nothing in this Agreement is
intended or will be deemed to constitute a partnership, agency or
employer-employee relationship between the parties.  Neither party will have any
right, power or authority to assume, create, or incur any expense, liability, or
obligation, express or implied, on behalf of the other.

17.2Assignments.  Subject to the remainder of this provision, 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 either party without the prior written consent of the other party;
provided, however, that, upon [***] ([***]) days prior written notice to CCC but
without CCC’s consent, Nevro (a) may assign this Agreement to any of its
Affiliates provided that Nevro shall remain  secondarily liable under this
Agreement; and (b) shall assign this Agreement to any individual or entity which
acquires all or substantially all of its assets to which this Agreement relates
provided that the assignee, in the reasonable judgment of CCC, is able to
perform Nevro’s obligations under this Agreement.  Any assignment not in
accordance with this Section 17.2 will be null and void.

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

 

25

 

 

 

 

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CONFIDENTIAL

17.3Further Actions.  Each party agrees to execute, acknowledge, and deliver
such further instruments and to do all such other lawful acts as may be
reasonably necessary in order to carry out the express provisions of this
Agreement.

17.4Headings; Construction.  The headings to the clauses, sub-clause and parts
of this Agreement are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.  Any ambiguity in this Agreement shall be interpreted equitably
without regard to which party drafted the Agreement or any provision
thereof.  The terms “this Agreement,” “hereof,” “hereunder” and any similar
expressions refer to this Agreement and not to any particular Section or other
portion hereof.  As used in this Agreement, the words “include” and “including,”
and variations thereof, will be deemed to be followed by the words “without
limitation”.

17.5Governing Law; Arbitration.  This Agreement shall be governed by and
construed under the laws of the State of Delaware, U.S.A., without regard for
conflict of laws principles.  Any controversy or claim arising out of or
relating to this Agreement, or its breach, shall be subject to binding
arbitration in the State of Delaware, under the Commercial Arbitration Rules of
the American Arbitration Association by three (3) arbitrators appointed in
accordance with such Rules, provided, however, that neither party shall be
precluded from seeking injunctive relief or other provisional relief in any
court of law. The language of the arbitration shall be English. Judgment on the
award rendered by the arbitrators may be entered in any court having
jurisdiction. The parties expressly exclude the application of the United
Nations Convention on Contracts for the International Sale of Goods.  It is not
intended that any third party should be a beneficiary under this Agreement
pursuant to the Contracts (Rights of Third Parties) Act 1999.

17.6Notices and Deliveries.  Any notice, request, delivery, approval or consent
required or permitted to be given under this Agreement will be in writing and
will be deemed to have been sufficiently given if delivered in person or one (1)
business day after sending by express courier service (signature required) or
five (5) days after sending by registered letter, return receipt requested (or
its equivalent), provided that no postal strike or other disruption is then in
effect or comes into effect within two (2) days after such mailing, to the party
to which it is directed at its address first shown above or as amended by notice
pursuant to this subsection.

17.7Waiver. A waiver by a party of any of the terms and conditions of this
Agreement in any instance will not be deemed or construed to be a waiver of such
term or condition for the future, or of any subsequent breach thereof.  Unless
otherwise expressly specified herein, all remedies contained in this Agreement
will be cumulative and none of them will be in limitation of any other remedy.

17.8Severability.  Each provision of this Agreement will be interpreted in such
manner as to be effective and valid under Applicable Law, but, if any provision
of this Agreement is held to be prohibited by or invalid under Applicable Law,
such provision will be ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or of this
Agreement.  The parties will make a good faith effort to replace the invalid or
unenforceable provision with a valid one which in its economic effect is most
consistent with the invalid or unenforceable provision.

 

 

26

 

 

 

 

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CONFIDENTIAL

17.9Counterparts.  This Agreement may be executed simultaneously in
counterparts, including by facsimile or electronic exchange of signed copies in
PDF format, any one of which need not contain the signature of more than one
party but both such counterparts taken together will constitute one and the same
agreement.

17.10Entire Agreement of the Parties; Conflicts.  This Agreement, the Quality
Agreement, and the other exhibits hereto constitute and contain the entire
understanding and agreement of the parties respecting the subject matter hereof
and cancels and supersedes any and all prior and contemporaneous negotiations,
correspondence, understandings, and agreements between the parties, whether oral
or written, regarding such subject matter.  In the event of any conflict between
the provisions of this Agreement and the provisions of the Quality Agreement or
any other exhibit hereto, the provisions of this Agreement shall govern.

17.11Amendments.  No waiver, modification, or amendment of any provision of this
Agreement will be valid or effective unless made in writing and signed by each
of the parties.

 

17.12Force Majeure. The failure or delay of either Party to perform fully any of
its obligations under this Agreement (other than a payment obligation) solely by
reason of acts of God; acts of civil or military authority; civil disturbance;
war; embargo; strikes or other labor disputes (excluding those related to a
party’s workforce); fire; a delay or default caused by common carriers; or
similar circumstance beyond its reasonable control which cannot reasonably be
foreseen or provided against (“Force Majeure”) will be deemed not to be a breach
of this Agreement so long as the party so prevented from complying with this
Agreement has not contributed to such Force Majeure, has used commercially
reasonable efforts to avoid such Force Majeure or to ameliorate its effects, and
continues to take all commercially reasonable actions within its power to comply
as fully as possible with the terms of this Agreement.  In the event of any such
Force Majeure, full performance of the obligations affected will be deferred
until the Force Majeure ceases.  This Section will not apply to excuse a failure
to comply with the terms of this Agreement arising from any commercial dispute
between a Party and a third party or the failure by a Party to secure any
materials, supplies, labor or other input for any reason not caused by Force
Majeure.

 

 

[Remainder of page left intentionally blank.]

 

 

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CONFIDENTIAL

In Witness Whereof, the parties have caused this Agreement to be executed by
their respective duly authorized representatives as of the Effective Date.

 

 

CENTRO DE CONSTRUCCION DE CARDIOESTIMULADORES DEL URUGUAY S.A.

Nevro Corp.

 

 

By: /s/ Antonio Gonzalez

By: /s/ Andrew Galligan

 

 

Name: Antonia Gonzalez

Name: Andrew Galligan

 

 

Title: President, CRMN

Title: Chief Financial Officer

 

 

 

1

 

 

 

 

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CONFIDENTIAL

Exhibit A

Products

For IPG 1500:

PRODUCTS

Minimum Purchase Thresholds

Lead Time

[***]

[***]

 

 

 

 

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 

 

IPG Model 1500 VOLUME

PRICE

Contract Year One

[***]

  [***]

 

Contract Year Two and thereafter

[***]

  [***]

 

 

The prices in the table above reflect incremental volume pricing (for example,
the price for the first [***] units in Contract Year one is [***] per unit and
the price for the next [***] units is [***] per unit in that Contract
Year).  The IPG volumes above are measured by the volumes of units ordered
during a Contract Year (or at any time during 2016 for Contract Year 1).  

 

 

 

 

 

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

--------------------------------------------------------------------------------

CONFIDENTIAL

For IPG Model 2000:

The following provisions are non-binding on the parties unless and until (a)
[***], (b) [***], and (c) [***].  Both parties agree to update the lead time for
IPG 2000 upon successful completion of the qualification and release to
production.  Nevro shall reimburse CCC for its reasonable, documented IPG Model
2000 manufacturing startup cost up to the amount of non-recurring engineering
fees set forth in the table below:

 

IPG 2000

Item

Non-Recurring Engineering Fee

Milestone Payment Schedule

Milestone Price

1

NRE includes the following:

 

 

 

[***]

[***]

$[***]

 

[***]

[***]

$[***]

 

[***]

[***]

$[***]

 

[***]

[***]

$[***]-$[***]

 

Once approvals and qualifications in items (a) through (c) have occurred, the
following provisions shall apply to Nevro IPG Model 2000:

Subject to the terms and conditions of the Agreement, Nevro commits to a Minimum
Purchase Threshold of [***]% of the IPG Model 2000 worldwide requirements
through the term of the Agreement.  Nevro’s Forecast provided on or about
December 31 of each year shall include Nevro’s projected volume of Products and
share commitment for the IPG Model 2000 Product for the following Contract
Year.  Nevro’s price per Product for each IPG Model 2000 Product for such
Contract Year shall be determined based upon such projected volume and share
commitment in accordance with the following table:

                                          IPG Model 2000 Price Table

 

Price/Unit

Product Units/Year

[***]% Share Commitment

[***]% Share Commitment

[***]% Share Commitment

[***]

$[***]

$[***]

$[***]

[***]

$[***]

$[***]

$[***]

[***]

$[***]

$[***]

$[***]

[***]

$[***]

$[***]

$[***]

[***]

$[***]

$[***]

$[***]

 

 

 

 

 

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

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CONFIDENTIAL

On or about September 1 of each Contract Year, the parties shall meet to review
the next Contract Year Forecast and Nevro commitment and the per unit price for
the Products for the next Contract Year will be determined using the initial
forecasted volume’s price per the appropriate pricing tier set out above. If the
forecasted volume is within [***]% of Products of the next tier’s volume break,
the parties agree to set the initial pricing at the higher price (i.e., lower
volume) and review such pricing twice per year for any material changes in the
Forecast. A credit will be issued to Nevro immediately and the per unit price
will be reset once shipments scheduled for delivery during the binding portion
of the Forecast (pursuant to Section 2.1) exceed the current volume/pricing tier
and subsequent Purchase Orders scheduled for delivery during the same Contract
Year would be placed at the lower price (i.e., higher volume pricing tier.  In
the event that Nevro purchases in any Contract Year an amount of Products which
is less than the initial Forecast for such Contract Year and the total amount of
Products purchased during such Contract Year is in a higher price tier than the
price tier offered based on the initial Forecast for such Contract Year, Nevro
shall make a payment to CCC, by the end of such Contract Year, an amount equal
to [***].

Certain Price Adjustments.  If Nevro agrees to purchase from CCC or any of its
Affiliates a minimum of [***] percent ([***]%) of its finished leads products in
for a Contract Year, Nevro shall receive an additional [***] percent ([***]%)
reduction in price for each IPG Model 2000 Product ordered in accordance with
such Forecast.  Additionally, if Nevro agrees to utilize CCC- or an CCC
Affiliate-manufactured battery, feedthrough and enclosure Components in any
Contract Year, Nevro shall receive at least a [***] dollar ($[***]) reduction in
price for each IPG Model 2000 Product ordered in accordance with such
Forecast.  If Nevro agrees to utilize any one of the CCC- or CCC Affiliate-[***]
in any Forecast, the parties will negotiate an applicable reduction in price for
each IPG Model 2000 Product ordered in accordance with such Forecast.

 

 

 

 

 

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

--------------------------------------------------------------------------------

CONFIDENTIAL

Exhibit B

Specifications

 

IPG Model 1500

Document Number

Description

[***]

[***]

[***]

[***]

 

IPG Model 2000

Document Number

Description

[***]

[***]

[***]

[***]

 

 

 

 

 

 

 

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

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CONFIDENTIAL

Exhibit C

CCC Change Notice Form

[Intentionally omitted.]

 

 

 

 

 

 

 

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

--------------------------------------------------------------------------------

CONFIDENTIAL

Exhibit D

Program Team List

CCC:

Name  

Phone Number

E-mail Address

Title/Responsibility

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 

[***]

Nevro:

Name  

Phone Number

E-mail Address

Title/Responsibility

[***]

 

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

Communication Counterparts:

Topics

CCC Representatives

Nevro Representatives

[***]

[***]

 

 

[***]

[***]

 

[***]

[***]

 

[***]

[***]

[***]

 

[***]

[***]

[***]

 

[***]

 

 

[***]

[***]

 

[***]

[***]

 

[***]

[***]

 

[***]

[***]

 

[***]

[***]

 

 

 

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

 

 

 

 

 

--------------------------------------------------------------------------------

CONFIDENTIAL

Exhibit E

Approved Facility; Facilities Transfer

Approved Facility:

[***]

[***]

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

Exhibit F

Bill of Materials

For IPG 1500:

Component

Supplier

Cost

Qty

Total cost

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 

 

 

 

 

 

 

 

 

 

 

 

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

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TOTAL

[***]

 

 

 

For IPG 2000:  [***]

[***]

 

 

[***] Certain information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.