Document:

Exhibit 10.1

 

AMENDED AND RESTATED LICENSE AGREEMENT

 

This Amended and Restated License Agreement (the “Agreement”) is by and among Mayo Foundation for Medical Education and Research, a Minnesota charitable corporation, located at 200 First Street SW, Rochester, Minnesota 55905-0001 (“MAYO”), Venturi Group, LLC, located at 2800 Patton Road, St. Paul, Minnesota 55113 (“VGL,” and, together with MAYO, the “FOUNDERS”), and NBI Development, Inc., a private for-profit company, located at 2800 Patton Road, St. Paul, Minnesota 55113 (“COMPANY”).

 

WHEREAS, MAYO desires to make certain patent rights and know-how available for the development and commercialization of medical devices for public use and benefit; and

 

WHEREAS, VGL desires to make certain patent rights and know-how available for the development and commercialization of medical devices for public use and benefit; and

 

WHEREAS, COMPANY represents itself as being knowledgeable in developing medical devices, and such knowledge is applicable in the treatment of disorders in the Field; and

 

WHEREAS, FOUNDERS are willing to grant and COMPANY is willing to accept an exclusive license under certain patent rights and a license to certain know-how and are willing to confer with COMPANY on development of such devices as set forth below; and

 

WHEREAS, COMPANY will be solely responsible for regulatory compliance, marketing and selling any products in accordance with the grant of rights hereunder.

 

NOW THEREFORE, in consideration of the foregoing and the promises and covenants set forth below, the parties hereby agree as follows:

 

Article 1.00 - Definitions

 

For purposes of this Agreement, the terms defined in this Article 1.00 will have the meaning specified and will be applicable both to the singular and plural forms:

 

1.01                        “Affiliate”:  shall mean any corporation or other entity within the same “controlled group of corporations” as MAYO or its parent Mayo Foundation.  For purposes of this definition, the term “controlled group of corporations” will have the same definition as Section 1563 of the Internal Revenue Code as of November 10, 1998, but will include corporations or other entities which, if not a stock corporation, more than 50% of the board of directors or other governing body of such corporation or other entity is controlled by a corporation within the controlled group of corporations of MAYO or Mayo Foundation.  MAYO’s Affiliates include, but are not limited to: Mayo Foundation; Mayo Collaborative Services, Inc.; Rochester Methodist Hospital; Saint Mary’s Hospital; Mayo Clinic Rochester; Mayo Clinic Jacksonville, Florida; St. Luke’s Hospital, Jacksonville, Florida; Mayo Clinic Arizona; Mayo Clinic Hospital, Arizona; Mayo Regional Practices, P.C., Decorah, Iowa; Mayo Health System West Central Wisconsin; and controlled or wholly-owned subsidiary corporations of all of the above.

 

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1.02                        “COMPANY Product(s)”:  shall mean any product or service that is covered by a Valid Claim within the Licensed Patents or Jointly Owned Patents or that incorporates, uses or is manufactured using or is developed using (including testing) Licensed Know-How.

 

1.03                        “COMPANY Sublicense Revenue”: shall mean all revenue (including but not limited to upfront fees, milestone payments, royalties and other consideration) received by COMPANY or its affiliate from the sublicensing of its licenses under Sections 2.01 and 2.02 under the Licensed Patents, Jointly Owned Patents and Licensed Know-How to third parties per the terms of this Agreement.

 

1.04                        “Effective Date”: shall mean March 21, 2006.

 

1.05                        “Field”: shall mean the treatment of central, autonomic and peripheral nervous system disorders, including pain, using devices to modulate nerve signaling.  For avoidance of doubt, “Field” shall not include the treatment of obesity or other gastrointestinal disorders or treatment of cardiac indication using devices on or within the pericardium or heart.

 

1.06                        “First Commercial Sale”: shall mean the first sale of a COMPANY Product.

 

1.07                        “Founders”:  shall mean MAYO and VGL.

 

1.08                        “Jointly Owned Patents”: shall mean (i) any patent application claiming inventions arising out of Product Development or Product Testing activities conducted for COMPANY by the Mayo Neurological Device Group and/or the VGL Neurological Device Group pursuant to this Agreement that has as inventors (a) employees of MAYO and/or employees or members of VGL and (b) employees of COMPANY, (ii) all patents issuing from any of the foregoing, (iii) all continuations, divisions, continuations in part, substitutions, reissues, or reexaminations of any of the foregoing patents or patent applications, as applicable, and (iv) all foreign counterparts of any of the foregoing.

 

1.09                        “License Year”: shall mean, for the year beginning on the Effective Date, the period from the Effective Date to December 31, and thereafter each calendar year during the Term.

 

1.10                        “Licensed Know-How”:  shall mean information, whether patentable or not, that (i) is developed for and provided to COMPANY by the Mayo Neurological Device Group or the VGL Neurological Device Group through Product Development or Product Testing activities, (ii) is contained in Mayo Medical Ventures disclosure, [***] and [***], or (iii) arises from meetings held between the Mayo Neurological Device Group and the VGL Neurological Device Group beginning January 24, 2006.

 

1.11                        “Licensed Patents”: shall mean (i) all patent applications (including without limitation those claiming methods) owned solely by MAYO that claim inventions arising out of Product Development or Product Testing activities conducted for COMPANY pursuant to this Agreement by the Mayo Neurological Device Group, (ii) U.S. patent application Ser. No. [***], filed [***], entitled [***], (iii) all patent applications (including without limitation those claiming methods) owned solely by VGL that claim inventions arising out of Product Testing or Product Development activities conducted for COMPANY by the VGL Neurological Device Group, (iv) all patent applications owned jointly by MAYO and VGL claiming inventions arising out of Product Development or Product Testing activities conducted by the Mayo Neurological Device Group and the VGL Neurological Device Group for COMPANY, (v) all patents issuing from any of the

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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foregoing, (vi) all continuations, divisions, continuations in part, substitutions, reissues, or reexaminations of any of the foregoing patents or patent applications, as applicable, and (vii) all foreign counterparts of any of the foregoing.  Licensed Patents shall not be interpreted to include Jointly Owned Patents.

 

1.12                        “Net Sales”:  shall mean the amount invoiced by COMPANY or its affiliates for sales of COMPANY Products to third parties, less the following:  (a) normal and customary trade and/or quantity discounts, chargebacks, rebates and allowances actually allowed or taken; (b) sales, use, value added and excise taxes, import and customs duties, or tariffs to the extent actually invoiced by the selling entity; (c) freight, insurance, packaging costs and other transportation charges to the extent separately invoiced and paid by the selling entity; (d) amounts repaid or credits taken by reason of rejections, outdating, defects or returns or because of retroactive price reductions or due to recalls or government laws or regulations requiring rebate; and (e) a reasonable allowance for bad debts or uncollectible amounts.  “Net Sales” shall exclude amounts received for any COMPANY Product furnished to a third party for which payment is not intended to be received, including but not limited to COMPANY Products used in clinical trials and COMPANY. Products distributed as promotional and free goods, in reasonable quantities.  Net Sales will be determined in accordance with GAAP.

 

For Combination Products, royalties will be calculated based on Combination Net Sales.  If, on a country-by-country basis, a COMPANY Product is sold in the form of a combination product containing one (1) or more active ingredients or devices in addition to COMPANY Product (a “Combination Product”), then Net Sales for such Combination Product (“Combination Net Sales”) will be adjusted by multiplying actual Net Sales of such Combination Product by the fraction A/(A + B), where A is the average invoice price of COMPANY Product, if sold separately, and B is the average invoice price of any other active ingredient or device in the combination, if sold separately.  If, on a country-by-country basis, the other active ingredient or device in the combination is not sold separately, then Net Sales shall be calculated by multiplying actual Net Sales of such Combination Product in such country by the fraction A/C, where A is the invoice price of COMPANY Product, if sold separately, in such country and C is the invoice price of the Combination Product in such country. If, on a country-by-country basis, neither COMPANY Product nor the other active ingredient or device of the Combination Product is sold separately, then Net Sales shall be determined by COMPANY in good faith, in consultation with MAYO.

 

1.13                        “Mayo Neurological Device Group” or “MNDG”:  shall mean the Mayo Neurological Device Group (MNDG), which shall include the following members:

 

[***]

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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1.14            “Product Development”: shall mean the research (other than preclinical or clinical Product Testing), clinical or preclinical development, design and/or enhancement of devices.

 

1.15            “Product Testing”:  shall mean the design and development of preclinical or clinical test or study protocols, assays and/or measurement tools or methods, and the conduct of preclinical and clinical testing and/or validation activities, in each case relating to devices.

 

1.16            “Term”: shall have the meaning set forth in Section 6.01.

 

1.17            “Valid Claim”: shall mean a claim of an unexpired, issued patent that has not lapsed or been abandoned or determined by a court from which no further appeal can be taken or has been taken within the time allowed for appeal to be invalid or unenforceable.

 

1.18            “VGL Neurological Device Group” or “VNDG”: shall mean the VGL Neurological Device Group (VNDG), which shall include the following members:

 

[***]

 

Article 2.00- Grant of Rights

 

2.01                        FOUNDERS’ GRANT.  Subject to the reservation of rights set forth in Section 2.03, FOUNDERS grant COMPANY a worldwide, royalty-bearing, exclusive (even as to MAYO and VGL, subject to Section 2.03) license under the Licensed Patents and their interests in the Jointly Owned Patents to develop, make, have made, use, offer for sale, sell and import COMPANY Products, in the Field.

 

COMPANY shall have the right to sublicense the Licensed Patents and the Jointly Owned Patents in the Field. Any such sublicense will include obligations of confidentiality, name use, warranties, waivers and indemnification for the benefit of FOUNDERS of the same scope as set forth herein. COMPANY will be responsible for the performance of its sublicensees under any such sublicense. COMPANY will notify FOUNDERS of any sublicense within [***] days after execution thereof and provide FOUNDERS a copy of the same.  If COMPANY receives any non-cash consideration for the grant of a sublicense under the Licensed Patents and Jointly Owned Patents in the Field (e.g., in the form of services, products or technology in lieu of cash consideration for such sublicense), it shall include in COMPANY Sublicense Revenue the fair market value of such non-cash consideration, and COMPANY shall owe MAYO payments on such fair market value pursuant to Section 3.08.

 

2.02                        LICENSED KNOW-HOW COMMITMENT.  For a period of five (5) years from January 24, 2006, unless terminated earlier by either COMPANY or FOUNDERS as provided for in this Agreement, FOUNDERS commit to the following:

 

(a)                                  Subject to existing obligations to third parties, MAYO policies and for so long as its members are employees of MAYO, the MNDG would confer with COMPANY in the Field exclusively for Product Development and non-exclusively for Product Testing.  The VNDG would confer

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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with COMPANY in the Field exclusively for Product Development and non-exclusively for Product Testing.  For avoidance of doubt, in no event would the foregoing commitment to confer exclusively for Product Development be deemed to prevent MAYO from conducting preclinical or clinical Product Testing for third parties.

 

(b)                                 Subject to existing obligations to third parties and MAYO policies, FOUNDERS hereby grant COMPANY a royalty-bearing, worldwide license to use the Licensed Know-How in the Field to develop, make, use, sell, offer for sale and import COMPANY Products as provided below:

 

1. for Product Development, such license shall be exclusive; and

 

2. for Product Testing, such license shall be non-exclusive.

 

COMPANY shall have the right to sublicense such Licensed Know-How, but not any obligation of MAYO or VGL to confer, on the same terms and conditions as set forth above with respect to Licensed Patents.

 

MAYO represents and warrants that to the best of its internal patent counsel’s knowledge as of the Effective Date and without a duty to inquire, MAYO is not aware of any existing third-party obligations that will materially interfere with the MNDG conferring with COMPANY under this Agreement.  VGL represents and warrants that to the best of its internal counsel’s knowledge as of the Effective Date and without a duty to inquire, VGL is not aware of any existing third-party obligations that will materially interfere with the VNDG conferring with COMPANY under this Section 2.02, in accordance with the terms and conditions of this Agreement.

 

Each member of the MNDG shall use reasonable efforts to attend meetings, achieve specific Product Development objectives and milestones, and conduct Product Testing, contributing on average among the individuals of the groups between [***] hours per member per month to achieve an intended aggregate contribution of [***] person-hours per month as requested by COMPANY.  Any time credited under this Section 2.02 shall not also be subject to compensation under any other agreement including any agreement referenced under Section 3.13.

 

Certain members of the VNDG are employees of [***], developing [***].  VGL and such individuals represent they will not use any equipment, supplies, facilities or trade secret information of [***] for the benefit of COMPANY, and any development contributions for COMPANY will be developed entirely on their own time, and (1) will not relate (a) directly to the businesses of [***] and (b) to [***] actual or demonstrably anticipated research or development, and (2) will not result from any work performed by them for [***].  COMPANY will not require of such individuals any work or transfer of rights inconsistent with the foregoing.

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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2.03                        RESERVATION OF RIGHTS.  The grant of rights in Sections 2.01 and 2.02 are subject to the rights of the United States government, if any, in the Licensed Patents, the Jointly Owned Patents and Licensed Know-How and MAYO’s and its Affiliates’   reserved, irrevocable and royalty-free right under the Licensed Patents and Jointly Owned Patents to make, have made, use, offer for sale and sell, solely for the benefit of MAYO and its Affiliate’s internal programs, including research, any product or service and to use the Licensed Know-How for the same.  For avoidance of doubt, MAYO reserves the right to conduct Product Testing with third parties.

 

2.04                        ALL OTHER RIGHTS RESERVED. This Agreement does not grant a license to any patent or patent application (i) not defined in the Licensed Patents or the Jointly Owned Patents or Licensed Know-How that exists prior to the Effective Date or (ii) arising outside of FOUNDERS’ Product Development or FOUNDERS’ Product Testing.  Except as granted in Sections 2.01 and 2.02, no other license is granted by FOUNDERS under any intellectual property rights owned or controlled by FOUNDERS, including any patents, know-how, copyrights, proprietary information and trademarks.  All such rights are expressly reserved by FOUNDERS.  COMPANY acknowledges that in no event will this Agreement be construed as an assignment by MAYO or VGL to COMPANY of any intellectual property rights.  During the term of the obligation to confer under Section 2.02, subject to any obligations to third parties and MAYO policies, if MAYO, through Mayo Medical Ventures, becomes aware of any MAYO owned patent or patent application in the Field that is required for COMPANY to make, use or sell a COMPANY Product in the Field, and such patent or patent application is not otherwise licensed under this Agreement, MAYO will make its best efforts to so notify COMPANY to permit COMPANY to consider negotiating rights thereto before any third parties.

 

2.05                        CONFIDENTIALITY.  During the Term, and for a period of five (5) years thereafter, the parties agree to keep confidential by not disclosing to any third party any information (i) relating to this Agreement, including the terms and conditions thereof, except COMPANY may disclose the terms and conditions of this Agreement to its confidential advisors and agents and its existing or potential sublicensees or distributors, shareholders, investors or lenders, provided that if any such party refuses to sign a confidentiality agreement with terms at least as restrictive as those in this Section 2.05, COMPANY shall first notify FOUNDERS and obtain FOUNDERS written consent (including electronic correspondence) which will not be unreasonably withheld, or (ii) other confidential information transmitted to one or two of the parties by another party. Each party may use this information solely as necessary for complying with the terms and conditions of this Agreement.  The obligations of non-disclosure and non-use will not apply when and to the extent such information:

 

(a)                                 becomes part of the public domain through no action or fault of the receiving party; or

 

(b)                                 was in the receiving party’s possession before disclosure, as demonstrated by the receiving party’s written records, and was not acquired, directly or indirectly, from the disclosing party; or

 

(c)                                  was received by the receiving party from a third party having a legal right to transmit such information.

 

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At a party’s request, the other party will cooperate fully in any legal actions taken by the requesting party to protect its rights in the information disclosed hereunder, and each party shall bear its own costs of any such action.

 

2.06                        PURCHASE [***].  MAYO may, at its sole option, purchase COMPANY Products in any quantity for use within MAYO’s and its Affiliates’ own programs [***] available to MAYO from COMPANY.  This [***].

 

Article 3.00 - Condition Precedent, Consideration and Royalties.

 

3.01                        SHARE ISSUANCE.  Concurrent with the execution of this Agreement, COMPANY has issued (i) to MAYO one million (1,000,000) shares of its fully-diluted common stock in partial consideration for MAYO’s obligations under this Agreement and (ii) to VGL one million (1,000,000) shares of its fully-diluted common stock in consideration for a cash payment of one thousand dollars (US$1,000).  This initial issuance is not an advance or creditable against any payments otherwise due under this Agreement.

 

3.02                        EARNED ROYALTIES.  COMPANY will pay MAYO, on behalf of FOUNDERS, a [***] earned royalty on Net Sales of those COMPANY Products that are covered by a Valid Claim within the Licensed Patents and Jointly Owned Patents in the country in which such products are sold, and a [***] earned royalty on Net Sales of any other Company Product (such royalties, the “Earned Royalties”).  MAYO will distribute [***] of all amounts it actually receives under Sections 3.02, 3.03, 3.08 and 7.02 to VGL, except as provided in Section 6.04.

 

The obligation to pay worldwide royalties on a COMPANY Product not covered by a Valid Claim within the Licensed Patents and Jointly Owned Patents shall, on a product-by-product and country-by-country basis, commence upon the First Commercial Sale of such COMPANY Product in a country and cease on December 31st of the fifth calendar year after the year within which the First Commercial Sale occurred in such country, unless such COMPANY Product becomes covered by a Valid Claim.  Thereafter, the obligation for COMPANY to pay royalties on a COMPANY Product that is not covered by a Valid Claim shall be considered paid-up.  The obligation to pay Earned Royalties under this Section 3.02 for a COMPANY Product covered by a Valid Claim shall run on a product-by-product and country-by-country basis until the last to expire of the Valid Claims within the Licensed Patents and Jointly Owned Patents covering such COMPANY Product in such country.

 

3.03                        MINIMUM ROYAL TIES.  In order for COMPANY to maintain its license, COMPANY will pay MAYO a minimum annual royalty of [***] dollars (US$[***]) for each of the second and third License Years after the First Commercial Sale in the United States or Europe of a COMPANY Product.  The Earned Royalties due and accrued under Section 3.02 within a given License Year are fully creditable against such minimum annual royalty due only for that License Year.  If the Earned Royalty does not equal or exceed the minimum annual royalty due, COMPANY will pay the difference.  Payment must be made

 

within [***] days after the last relevant License Year, and failure to do so constitutes a material breach of this Agreement.

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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3.04                        ROYALTY STACKING.  If COMPANY or its affiliate is a party to a license agreement with any third party under which COMPANY or its affiliate obtains a license for technology required for the manufacture, use or sale of a COMPANY Product and the total royalty due in the aggregate to one or more third parties exceeds [***], then COMPANY may reduce the Earned Royalties due to MAYO pursuant to Section 3.02 on such COMPANY Product (on a product-by-product basis) by [***] of the royalties that are payable to such third party; provided, however, that in no event will the Earned Royalties otherwise due under Section 3.02 be reduced to less than [***] of the Earned Royalties that would otherwise be payable to MAYO pursuant to Section 3.02 by operation of the foregoing reduction.

 

3.05                        KNOW-HOW RETAINER FEES. COMPANY shall pay MAYO a quarterly retainer fee of [***] dollars (US$[***]) for the MNDG as partial compensation for its Licensed Know-How. The initial payment shall be due within [***] days after April 1, 2006 and the following payments are due on a quarterly basis: July 1, October 1, January 1, and April 1 during the term of the commitment under Section 2.02. For avoidance of doubt, the last quarterly retainer fee payment shall be due on January 1, 2011.

 

3.06                        KNOW-HOW MILESTONE PAYMENTS. As partial compensation for providing the Licensed Know-How, COMPANY shall have a pool of five hundred thousand (500,000) COMPANY common shares which it shall issue to MAYO within ninety (90) days after FDA approval of the first COMPANY Product.

 

3.07                        CERTAIN COMMON STOCK PROVISIONS.  In connection with COMPANY’s obligation to issue shares of its common stock to FOUNDERS under Section 3.01 and to MAYO under Section 3.06, COMPANY and FOUNDERS hereby covenant and agree as follows:

 

(a)                                 COMPANY hereby represents and warrants that the terms of this Agreement have been duly and validly approved and authorized by all requisite corporate action of the Board of Directors of COMPANY, and that the performance of COMPANY’s obligations under this Agreement will not result in the violation of the terms or provisions of any other agreements to which COMPANY is a party or is otherwise bound.

 

(b)                                 COMPANY represents and warrants that a sufficient number of shares of COMPANY common stock for performance of COMPANY’s obligations under this Agreement have been and will continue to be duly and validly reserved for issuance by all requisite corporate action of the Board of Directors of COMPANY, and upon the issuance of the common stock in accordance with this Agreement such shares of common stock will be duly and validly issued and fully paid and non-assessable shares of capital stock of COMPANY.

 

(c)                                  COMPANY and FOUNDERS covenant and agree that the number of shares of COMPANY common stock that may be issued from time to time to MAYO in the future pursuant to the Section 3.06 shall be equitably adjusted to give effect to all stock combinations or stock splits affecting COMPANY common stock and all dividend distributions payable to holders of COMPANY common stock in shares of additional COMPANY common stock.

 

(d)                                 COMPANY agrees that, simultaneous with the occurrence of a Liquidation Event or simultaneous with the initial closing in an arrangement involving COMPANY’s first firm commitment underwritten public offering of its common stock under the Securities Act of 1933, as amended, (the “Act”) MAYO shall automatically, and without need for further action, be

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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entitled to receive, and shall be deemed the beneficial owner of, all shares of COMPANY common stock issuable pursuant to Section 3.06, regardless of whether the conditions precedent to such issuance as set forth in each Section 3.06 have theretofore been achieved or satisfied.  If at any time there is a recapitalization of COMPANY common stock (other than as contemplated upon the occurrence of a Liquidation Event), COMPANY agrees that MAYO shall automatically, and without need for further action, be entitled to receive the number of shares of capital stock or other securities or property to which a holder of an aggregate number of shares of COMPANY common stock equal to the maximum number of shares which MAYO may have become entitled to receive in the future pursuant to Section 3.06 would be entitled to receive in connection with such recapitalization, regardless of whether the conditions precedent to such issuances as set forth in Section 3.06 have theretofore been achieved or satisfied.  Upon issuance of common stock, capital stock or other securities pursuant to this Section 3.07(d), COMPANY shall have no further obligation to issue common stock to MAYO pursuant to the terms of this Agreement.  For the avoidance of doubt, this Section 3.07(d) does not apply to any type of financing transaction that COMPANY may undertake in the furtherance of its business, e.g., venture equity, venture debt, lease-line undertakings, etc.  For this purpose, “Liquidation Event” shall include (A) the closing of the sale, lease, exchange, exclusive licensing or other disposition of all or substantially all of COMPANY’s assets or intellectual property (whether in one transaction of a series of related transactions), (B) the consummation of the merger, business combination, reorganization or consolidation of COMPANY with or into another entity (except a merger or consolidation in which the holders of capital stock of COMPANY immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of COMPANY or the surviving or acquiring entity), (C) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter of COMPANY’s securities or in connection with an equity, debt or other financial transaction whose principal purpose is the financing of COMPANY), of COMPANY’s securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of COMPANY (or the surviving or acquiring entity) or (D) a liquidation, dissolution or winding up of COMPANY; provided, however, that a transaction shall not constitute a Liquidation Event if its sole purpose is to change the state of COMPANY’s incorporation or to create a holding company that will have substantially similar series and classes of shares with the same terms as existed immediately prior to such transaction and be owned in substantially the same proportions by the persons who held COMPANY’s securities immediately prior to such transaction.

 

(e)                                  FOUNDERS hereby represent and warrant that they are investors in securities of companies in the development stage and acknowledges that they are able to fend for themselves, can bear the economic risk of its investment, and have such knowledge and experience in financial or business matters that they are capable of evaluating the merits and risks of the investment in the common stock of COMPANY.  FOUNDERS also represent they have not been organized for the purpose of acquiring the common stock of COMPANY.

 

(f)                                   FOUNDERS hereby represent and warrant that they are “accredited investors” within the meaning of SEC Rule 501 of Regulation D, as presently in effect.

 

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(g)                                  FOUNDERS understand that the common stock of COMPANY will be characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from COMPANY in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Act only in certain limited circumstances.  In this connection, FOUNDERS represent that they are familiar with SEC Rule 144, as presently in effect, and understand the resale limitations imposed thereby and by the Act.

 

(h)                                 Without in any way limiting the representations set forth above, FOUNDERS further agree not to make any disposition of all or any portion of the shares of common stock of COMPANY unless and until:

 

(1)                                 There is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(2)                                 If requested by COMPANY, FOUNDERS shall have furnished COMPANY with an opinion of counsel, reasonably satisfactory to COMPANY, that such disposition will not require registration of such shares under the Act.  It is agreed that COMPANY will not require opinions of counsel for transactions made in reliance upon Rule 144 except in unusual circumstances.

 

Notwithstanding the provisions of subsections (1) and (2) above, no such registration statement or opinion of counsel shall be necessary for a transfer by FOUNDERS to any of their “affiliates,” as that term is defined under the Act, so long as such affiliate is an “accredited investor” (within the meaning of Regulation D under the Act).

 

(i)                                     It is understood that the certificates evidencing the common stock of COMPANY may bear a legend that refers to the shareholders agreement between the shareholders of COMPANY and states:

 

“These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to COMPANY that such registration is not required or unless sold pursuant to Rule 144 of such Act.”

 

3.08                        SUBLICENSE REVENUE:

 

(a)                                 COMPANY shall pay MAYO on behalf of FOUNDERS [***] of all COMPANY Sublicense Revenue it receives during the Term for sublicenses executed within the first [***] years after the Effective Date.  COMPANY shall pay MAYO on behalf of FOUNDERS [***] of all COMPANY Sublicense Revenue it receives during the Term for sublicenses executed thereafter.

 

(b)                                 Payments due with respect to COMPANY Sublicense Revenue are payable as described

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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in Section 4.01.

 

3.09                        TAXES.  COMPANY is responsible for all taxes (other than net income taxes), duties, import deposits, assessments and other governmental charges, however designated, which are now or hereafter will be imposed by any authority on COMPANY (a) by reason of the performance by a FOUNDER of its obligations under this Agreement, or the payment of any amounts by COMPANY to a FOUNDER under this Agreement; or (b) based on the Licensed Patents, Joint Owned Patents, Licensed Know-How or use or sale of COMPANY Product.

 

3.10                        NO DEDUCTIONS.  All payments to be made by COMPANY to MAYO and/or FOUNDERS under this Agreement represent net amounts MAYO and/or FOUNDERS are entitled to receive, and will not be subject to any deductions or offsets for any reason whatsoever; provided, however, that COMPANY shall be entitled to deduct from payments due to FOUNDERS (as applicable) under this Agreement any taxes imposed upon MAYO and/or FOUNDERS with respect to such payments, if COMPANY is required to withhold such amounts under law.

 

3.11                        U.S. CURRENCY.  All payments to MAYO or FOUNDERS under this Agreement will be made by draft drawn on a United States bank, and payable in United States dollars.

 

3.12                        DISTRIBUTION OF CONSIDERATION WITHIN MAYO.  MAYO may distribute any of its funds received by reason of this Article 3.00 and Section 7.02 to individuals within the MNDG as MAYO, in its sole discretion, deems advisable and will hold COMPANY harmless from any claims by any person that any such distribution or related allocation is inadequate or unreasonable.

 

3.13                        RESEARCH AND CLINICAL TRIALS.  The parties acknowledge that any COMPANY-sponsored research or clinical trial at MAYO related to COMPANY Products will be subject to a separate agreement consisting of a defined protocol, associated budget and any terms and conditions that may be required by law or MAYO policy; however, all intellectual property arising from such research or trial shall be included in Licensed Patents, Jointly Owned Patents or Licensed Know-How, as applicable, and licensed to COMPANY pursuant to the provisions of this Agreement.  Any such separate agreement will not require any compensation beyond the mutually agreed upon costs for conducting the research or clinical trial.

 

3.14                        MAYO RESEARCH FUNDING.  MAYO shall have the right but not the obligation to propose that it provide to COMPANY research funding for Product Development and Product Testing efforts to be conducted at COMPANY’s direction.  COMPANY shall have the right, in its sole discretion, to accept or reject such proposal.  If it accepts such proposal, then if the parties mutually agree upon the scope of the research, the amount of the research funding, and the equity interest in COMPANY or other consideration that MAYO would receive for its provision of such funding, then the parties shall negotiate the terms of an agreement pursuant to which MAYO would provide such funding, COMPANY would direct such research, and MAYO would receive such mutually agreed consideration.

 

Article 4.00 - Accounting and Reports.

 

4.01                        PAYMENT.  COMPANY will deliver to FOUNDERS on or before [***] of each License Year a detailed written report stating Net Sales on which Earned Royalties are based,

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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COMPANY Sublicense Revenue on which payment is due FOUNDERS and all activities for all other payments due under Article 3.00 for the preceding License Year.  Each such report will be accompanied by the payment(s) to MAYO due to FOUNDERS for such License Year.  In the event no royalties are due, COMPANY shall submit a detailed written report on the progress of the development of COMPANY Products and a timeline for commercialization of the same, including a description of activities conducted as set forth in Section 7.02.

 

4.02                        ACCOUNTING.  COMPANY will keep complete, true and accurate books of accounts and records sufficient to support calculation of Net Sales, COMPANY Sublicense Revenue and all other payment payable to FOUNDERS under this Agreement.  Such books and records will be kept at COMPANY’s principal place of business for at least [***] years after the end of the License Year to which they pertain, and will be open at all reasonable times for inspection by a representative of FOUNDERS for verification of payments.  The FOUNDERS’ representative will treat as confidential all relevant matters and will be a person or firm reasonably acceptable to COMPANY.  In the event such audit reveals an underpayment by COMPANY, COMPANY will within [***] days pay the amount due in excess of the payments actually paid.  In the event the audit reveals an underpayment by COMPANY of more than [***] of the amount due, COMPANY will pay interest on the amount due in excess of the amount actually paid at the highest rate then permitted by law.  In the latter event, COMPANY will pay all of FOUNDERS’ costs in conducting the audit.

 

Article 5.00- Warranties and Indemnification.

 

5.01                        USE OF NAME AND LOGO.  COMPANY and VGL will not use publicly for publicity, promotion or otherwise, any logo, name, trade name, service mark or trademark of MAYO or its Affiliates, including, but not limited to, the terms “MAYO®,” “MAYO Clinic®” and the triple shield MAYO logo, or any simulation, abbreviation or adaptation of the same, or the name of any MAYO employee or agent, without MAYO’s prior, written, express consent, which MAYO may withhold in its absolute discretion.  Upon MAYO’s prior written consent, COMPANY may disclose that it has obtained a license under certain patents and know-how from MAYO related to products in the Field, and that MAYO has an equity interest in COMPANY, where required for COMPANY to comply with laws, rules, regulations or rules of any securities exchange, which consent shall not be unreasonably withheld or delayed.

 

5.02                        DISCLAIMER.  Except as expressly set forth in Section 5.08, nothing in this Agreement will be construed as:

 

(a)                                 a warranty or representation by MAYO or VGL as to the validity or scope of any of the Licensed Patents, Jointly Owned Patents and Licensed Know-How; or

 

(b)                                 an obligation to bring or to prosecute actions against third parties for infringement of the Licensed Patents, Jointly Owned Patents or Licensed Know-How; or

 

(c)                                  a warranty or representation that the manufacture, use, sale, offer for sale or importation

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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of any COMPANY Product or the use or practice of any of the Licensed Patents, Jointly Owned Patents or Licensed Know-How are free from infringement or misappropriation of a third party’s intellectual property rights.

 

5.03                        DISCLAIMER.  EXCEPT AS PROVIDED HEREIN, MAYO AND VGL HAVE NOT MADE AND PRESENTLY MAKE NO PROMISES, GUARANTEES, REPRESENTATIONS OR WARRANTIES OF ANY NATURE, DIRECTLY OR INDIRECTLY, EXPRESS OR IMPLIED, REGARDING THE MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT FOR THE COMPANY PRODUCTS, LICENSED PATENTS, JOINTLY OWNED PATENTS OR LICENSED KNOW-HOW.  EXCEPT AS EXPRESSLY PROVIDED IN SECTION 5.02 OR 5.08, THE LICENSED KNOW-HOW, JOINTLY OWNED PATENTS AND LICENSED PATENTS WHICH ARE LICENSED UNDER THIS AGREEMENT ARE PROVIDED “AS IS,” “WITH ALL FAULTS” AND “WITH ALL DEFECTS.”  COMPANY IS SOLELY RESPONSIBLE FOR DETERMINING WHETHER THE LICENSED PATENTS, JOINTLY OWNED PATENTS AND LICENSED KNOW-HOW HEREUNDER HAVE APPLICABILITY OR UTILITY IN COMPANY’S MANUFACTURING, DESIGN, MARKETING AND SALES ACTIVITIES.  COMPANY ASSUMES ALL RISK AND LIABILITY IN CONNECTION WITH SUCH DETERMINATION.

 

5.04                        INDEMNIFICATION.  COMPANY will defend, indemnify and hold harmless FOUNDERS and MAYO’s Affiliates from any and all claims, actions, demands, judgments, losses, costs, expenses, damages and liabilities (including but not limited to attorneys’ fees and other expenses of litigation) (“Claim”), regardless of the legal theory asserted, arising out of or connected with:  (a) practice by COMPANY of inventions claimed in the Licensed Patents or Jointly Owned Patents or of the Licensed Know-How furnished or licensed under this Agreement; (b) design, manufacture, distribution, use, sale or other disposition of COMPANY Products by COMPANY, or its transferees or sublicensees; and (c) the Product Development and Product Testing to be conducted for COMPANY hereunder.  The foregoing obligations of COMPANY to indemnify are contingent upon FOUNDERS or MAYO’s Affiliates giving COMPANY prompt and timely notice of any claim requiring indemnification, granting to COMPANY the right to control the defense of any such claim including selection of counsel and the right to settle any such claim (including the right to grant sublicenses, without royalty to FOUNDERS) of any right licensed under this Agreement.  Notwithstanding the foregoing, COMPANY shall not, without MAYO’s prior written consent, settle or compromise any Claim in a manner that would require MAYO to admit liability or incur financial obligation.  MAYO and VGL may be represented by counsel of their own choosing, at their own expense.

 

5.05                        INSURANCE.  As used in Sections 5.04 and 5.05, MAYO and its Affiliates include the trustees, officers, agents, and employees of MAYO and its Affiliates.  COMPANY will, during the Term, carry claim-based liability insurance, including products liability and contractual liability, in an amount and for a time period sufficient to cover the liability assumed by COMPANY hereunder, such amount being at least [***] dollars ($[***]).  In addition, such policy will name MAYO and VGL as an additional-named insured.  COMPANY may not settle any Claim in a manner that would require an admission of liability or incur financial obligation on the part of MAYO, without MAYO’s prior written consent.

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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5.06                        WAIVER OF SUBROGATION.  COMPANY expressly waives any right of subrogation that it may have against VGL or MAYO resulting from any claim, demand, liability, judgment, settlement, costs, fees (including attorneys’  fees) and expenses for which COMPANY has agreed to indemnify VGL, MAYO and its Affiliates or hold VGL, MAYO and its Affiliates harmless under this Agreement.

 

5.07                        ADDITIONAL WAIVERS.  SUBJECT TO COMPANY’S OBLIGATION TO INDEMNIFY FOUNDERS HEREUNDER, IN NO EVENT WILL ANY PARTY’S LIABILITY TO THE OTHER PARTY OR PARTIES INCLUDE ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE LOSSES OR DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.  IN NO CASE WILL A FOUNDER’S LIABILITY OF ANY KIND EXCEED THE TOTAL PAYMENTS WHICH HAVE ACTUALLY BEEN PAID BY COMPANY UNDER THIS AGREEMENT AS OF THEDA TE OF FILING OF THE ACTION AGAINST MAYO, VGL, OR FOUNDERS WHICH RESULTS IN THE SETTLEMENT OR AWARD OF DAMAGES.

 

COMPANY ACKNOWLEDGES AND AGREES THAT MAYO WILL NOT LIABLE OR RESPONSIBLE FOR ANY ACTIONS OR OMISSIONS OF VGL UNDER THIS AGREEMENT AND VGL SHALL NOT BE LIABLE OR RESPONSIBLE FOR ANY ACTIONS OR OMISSIONS OF MAYO UNDER THIS AGREEMENT.

 

5.08                        REPRESENTATIONS AND WARRANTY.  MAYO and VGL represent and warrant (each individually only as to itself) that, in the Field, the employees of MAYO are under an obligation to assign their rights to MAYO and the VGL members or employees are under an obligation to assign their rights to VGL, that, to the best of their internal counsel’s knowledge as of the Effective Date and without a duty to inquire, MAYO and VGL are otherwise the lawful owners of their respective Licensed Patent rights licensed hereunder and the patent rights licensed hereunder are provided free and clear of any third-party ownership rights.  MAYO and VGL represent and warrant (each individually only as to itself) that this Agreement is binding upon it and that it has all rights necessary to grant the rights it purports to grant hereunder.  VGL represents and warrants that, to the best of its knowledge, no license will be required from [***] for COMPANY and FOUNDERS’ research and commercialization efforts contemplated under this Agreement.  Notwithstanding the foregoing, nothing herein shall be construed as an express or implied representation or warranty of non-infringement, and COMPANY acknowledges that it may require rights to third-party intellectual property in order to practice the licenses granted hereunder.  VGL represents and warrants that no members or employees who owe their intellectual property rights in the Field to a third party will be permitted to participate in any activities of COMPANY or with MAYO, unless COMPANY or MAYO, as applicable, has given its prior written consent.

 

Article 6.00- Term and Termination.

 

6.01                        TERM.  This Agreement will commence on the Effective Date and, unless terminated earlier hereunder, will terminate upon the last to expire patent application or Valid Claim within the

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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Patent Rights or COMPANY’s last obligation to make payments under Article 3.00, whichever occurs last (the “Term”).

 

6.02                        TERMINATION FOR BREACH.  If any party commits a material breach of this Agreement, including without limitation for COMPANY the failure to make any required payments hereunder, either of the other parties may notify the breaching party in writing of such breach and the breaching party will have sixty (60) days after such notice becomes effective as set forth in Section 9.07 to cure such breach, or this Agreement will automatically terminate; provided that, if this Agreement is terminated hereunder by COMPANY for material breach committed by MAYO or VGL, then this Agreement shall remain in effect except as set forth in Section 6.05(b).

 

6.03                        INSOLVENCY OF COMPANY.  MAYO or VGL may terminate this Agreement by transmitting a notice of termination to COMPANY in the event COMPANY ceases conducting business in the normal course, becomes insolvent or bankrupt, makes a general assignment for the benefit of creditors, admits in writing its inability to pay its debts as they are due, permits the appointment of a receiver for its business or assets, or avails itself of or becomes subject to any proceeding under any statute of any governing authority relating to insolvency or the protection of rights of creditors.

 

6.04                        EARLY TERMINATION OF CONFERENCE RIGHTS.  Starting three (3) years after the Effective Date of this Agreement, MAYO or VGL, at its discretion and without a showing of cause, may terminate the obligations to confer under Sections 2.02(a) and 2.02(b) by giving notice of such election to COMPANY.

 

(a)                                 If MAYO so terminates, then, upon such notice:

 

(1) COMPANY’s obligation to pay Earned Royalties under Section 3.02 to MAYO, on behalf of the FOUNDERS, shall be reduced from [***] of Net Sales of COMPANY Products that are covered by a Valid Claim within the Licensed Patents and Jointly Owned Patents in the country in which such COMPANY Products are sold to [***] on Net Sales for each such COMPANY Product, and from [***] on Net Sales of any other COMPANY Product to [***] on Net Sales of each such COMPANY Product; COMPANY’s obligation to pay amounts due pursuant to Section 3.08 with respect to COMPANY Sublicense Revenue shall be reduced to from [***] of all such COMPANY Sublicense Revenue it receives during the Term for sublicenses executed within the first [***] years after the Effective Date to [***] of all such COMPANY Sublicense Revenue, and from [***] of all such COMPANY Sublicense Revenue it receives during the Term for sublicenses executed thereafter to [***] of all such COMPANY Sublicense Revenue; and MAYO will distribute [***] of all amounts it receives under this section to VGL;

 

(2)         any Licensed Know-How retainer fee obligations under Section 3.05 that have not accrued shall expire;

 

(3)         any Know-How milestone payment obligations under Section 3.06 that have not accrued shall expire; and

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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(4)         the grant of licenses from MAYO for its Licensed Know-How to COMPANY shall become non-exclusive.

 

(b)                                 If VGL so terminates, then, upon such notice:

 

(1)         COMPANY’s obligation to pay Earned Royalties under Section 3.02 to MAYO, on behalf of FOUNDERS, shall be reduced from [***] of Net Sales of COMPANY Products that are covered by a Valid Claim within the Licensed Patents and Jointly Owned Patents in the country in which such COMPANY Products are sold to one and [***] on Net Sales for each such COMPANY Product, and from [***] on Net Sales of any other COMPANY Product to [***] on Net Sales of each such COMPANY Product; COMPANY’s obligation to pay amounts due pursuant to Section 3.08 with respect to COMPANY Sublicense Revenue shall be reduced to from [***] of all such COMPANY Sublicense Revenue it receives during the Term for sublicenses executed within the first [***] years after the Effective Date to [***] of all such COMPANY Sublicense Revenue, and from [***] of all such COMPANY Sublicense Revenue it receives during the Term for sublicenses executed thereafter to [***] of all such COMPANY Sublicense Revenue; and MAYO will distribute [***] of all amounts it receives under this section to VGL; and

 

(2)         the grant of licenses from VGL for its Licensed Know-How to COMPANY shall become non-exclusive.

 

6.05                        CONSEQUENCES OF TERMINATION.

 

(a)                   In the event of termination under Section 6.02 of this Agreement for COMPANY’s breach, the licenses to Licensed Patents and Jointly Owned Patents from FOUNDERS to COMPANY shall immediately terminate.  All licenses to Licensed Know-How shall become non-exclusive and any obligation to confer shall immediately terminate.

 

(b)                   In the event of termination under Section 6.02 of this Agreement for breach by MAYO or VGL:

 

(1)         the licenses to COMPANY of Licensed Patents of that breaching FOUNDER and to that breaching FOUNDER’s interest in Jointly Owned Patents shall continue;

 

(2)         All licenses to Licensed Know-How of that breaching FOUNDER shall continue on a non-exclusive basis;

 

(3)         Any obligation of that breaching FOUNDER to confer shall immediately terminate.

 

(4)         Such termination will trigger the provisions of Section 6.04(a) if the breach is by MAYO or of Section 6.04(b) if the breach is by VGL.

 

(c)                    In the event of termination of this Agreement under Section 6.03, all licenses granted hereunder shall immediately terminate.

 

(d)                   Subject to Section 6.05(a)-(c), nothing in this Agreement shall be construed to prohibit or enjoin

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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COMPANY from continuing to use Licensed Know-How licensed from FOUNDERS for any reason.  In the event of any claim of breach, except as set forth in this Section 6.05, above, FOUNDERS waive any remedy that would otherwise enjoin COMPANY from using Licensed Know-How as licensed hereunder.  In the event MAYO or VGL terminates this Agreement under Section 6.02, COMPANY’s license under such Licensed Know-How shall not be terminated and COMPANY’s license to such Licensed Know-How (and obligation to make payments therefor) shall continue, but only on a non-exclusive basis.  In any arbitration or court proceeding involving this Agreement, it is the intention of the parties that the relief for FOUNDERS and the effect on COMPANY be as least as significant as FOUNDERS having the right to terminate the Licensed Know-How license and, in this regard, an arbitrator or court may grant FOUNDERS such additional relief as such arbitrator or court deems equitable to compensate FOUNDERS.

 

6.06                        Survival. Subject to the foregoing, the following sections survive any termination or expiration of this Agreement, per their terms: 2.05; 2.06 (except if this Agreement is terminated for breach by MAYO under Section 6.02); any payment obligations that accrued or are accruable up to the date of termination and thereafter as may be set forth in Article 3.00; 3.07(g), (h) and (i); Article 4.00 (solely as to payments accruing during the term of the Agreement); Article 5.00; Article 6.00; all payment obligations of COMPANY that accrued or are accruable under Article 8.00; and Article 9.00.

 

Article 7.00- Representation and Warranties.

 

7.01                        REPRESENTATIONS OF COMPANY.  COMPANY represents and warrants to FOUNDERS that it has independently evaluated the Licensed Patents, Jointly Owned Patents and Licensed Know-How and is entering into this Agreement on the basis of its own evaluation and not in reliance of any representation by FOUNDERS. COMPANY represents and warrants that it shall have a minimum of [***] dollars (US$[***]) of available funding by [***] and shall raise, at a minimum, financing of [***] dollars (US$[***]) for COMPANY purposes, including COMPANY Product research and development, by [***].

 

7.02                        COMMERCIALIZATION EFFORTS. COMPANY will use commercially reasonable efforts to research, develop and commercialize COMPANY Product(s). If COMPANY has not [***] after the Effective Date, the license to COMPANY for Licensed Patents and Licensed Know- How shall terminate unless COMPANY pays FOUNDERS an annual license maintenance fee of [***] dollars (US$[***]) per year for each year [***]. The first such payment is due within [***] days of the [***] anniversary of the Effective Date, and subsequent maintenance fees are due within [***] days of subsequent anniversary dates of the Effective Date.

 

Article 8.00- Patents

 

8.01                        Patent Filing, Prosecution, Maintenance and Enforcement. All patent applications filed within the Licensed Patents shall be assigned as follows:

 

(a)         to MAYO for all inventions invented solely by one or more employees of Mayo;

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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(b)         to VGL for all inventions invented solely by one or more employees of VGL; and

 

(c)          jointly to the respective parties for all inventions invented jointly by one or more employees of such parties.

 

COMPANY shall have control and authority to direct prosecution of the Licensed Patents and Jointly Owned Patents, including the right to amend such patent applications and file new patent applications which shall be considered within the definition of Licensed Patents and/or Jointly Owned Patents, and FOUNDERS will be afforded the opportunity to advise and consult on all such filings and the prosecution.  In addition, COMPANY will provide FOUNDERS with copies of all papers submitted to or received from the United States Patent and Trademark Office on a timely basis.  For so long as the license to Licensed Patents and Jointly Owned Patents remains exclusive, COMPANY shall have control and authority to direct the enforcement and defense of the Licensed Patents in the Field and the Jointly Owned Patents.  COMPANY shall be responsible for all costs and expenses related to prosecution, maintenance, enforcement and defense of the Licensed Patents after the Effective Date and reimbursement of Licensed Patents invoice costs incurred prior to the Effective Date (such invoice costs to be limited to [***] dollars (US$[***]) in total).  COMPANY shall be responsible for all costs and expenses related to prosecution, maintenance, enforcement and defense of the Jointly Owned Patents.  FOUNDERS agree to take such actions as are reasonably necessary for COMPANY to file, prosecute, maintain, enforce and defend the Licensed Patents and Jointly Owned Patents, and will cooperate with COMPANY in any such matters except financially.  MAYO may not be joined as a party to any litigation, unless deemed a necessary party by law.  If MAYO is joined, COMPANY will pay all costs on a monthly basis, including attorneys’ fees, incurred by MAYO with respect thereto and will indemnify MAYO for any damages that may result from such litigation.  MAYO may be represented by counsel of its own choosing.  Any recoveries will first be used to reimburse each party’s out-of-pocket costs incurred in connection with such action (including, if applicable, under Section 5.04), and thereafter will be shared equally by the parties.

 

If COMPANY determines in its sole discretion to abandon any patent application or not to file any continuation patent application with claims suggested by FOUNDERS within the Licensed Patents or Jointly Owned Patent Rights that are assigned or co-assigned to MAYO and/or VGL, COMPANY will provide FOUNDERS with [***] days prior written notice of such determination and provide FOUNDER assignee(s) with the opportunity to prosecute, enforce, defend and maintain such patent or patent application at FOUNDER assignee(s)’ sole expense, and the license granted to COMPANY with respect to such patent or patent application shall convert to a non-exclusive license.  This conversion of rights to non-exclusive shall not apply to any decision by COMPANY not to file in any country other than the United States.  COMPANY shall have the sole discretion, without penalty, to opt to forego any foreign filing, provided that upon COMPANY’s making such a decision, FOUNDERS shall be entitled to pursue the foreign tiling at their own expense.

 

Upon termination of this Agreement, the parties shall confer as to the responsibility of prosecution, maintenance, enforcement and defense of Jointly-Owned Patents; MAYO and VGL shall retain their sole rights to prosecute, maintain, enforce and defend any Licensed Patents

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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assigned exclusively to either MAYO or VGL; and MAYO and VGL shall confer as to the responsibility of prosecution, maintenance, enforcement and defense of Licensed Patent that are co-assigned to MAYO and VGL.

 

8.02                        THIRD PARTY LITIGATION.  In the event a third party institutes a suit against COMPANY for patent infringement involving a COMPANY Product, COMPANY will promptly inform FOUNDERS and keep FOUNDERS regularly informed of the proceedings.  In the event the third party sues or joins FOUNDERS, COMPANY will defend FOUNDERS pursuant to the indemnification obligation in Section 5.04.  Any recoveries will first be used to reimburse each party’s out-of-pocket costs incurred in connection with such action (including, if applicable, under Section 5.04), and thereafter will be [***].

 

8.03                        KEY PATENT OWNERSHIP.  Prior to the submission of an IDE for a COMPANY Product, the parties will meet to discuss whether any Jointly Owned Patents are Key Patent(s) for such COMPANY Product.  “Key Patent(s)” shall mean one or more patents or applications within the Jointly Owned Patents that claim inventions material to the manufacture, use, operation or other aspect of such COMPANY Product, and that [***].  MAYO and VGL (to the extent either such party holds any rights in such Key Patent), shall assign all right, title and interest in and to such Key Patent to COMPANY, subject to COMPANY’s continuing obligations to pay royalties on sales of COMPANY Products covered by a Valid Claim within such Key Patent as if such Key Patent were still a Jointly Owned Patent, in accordance with the terms and conditions of this Agreement.  COMPANY shall grant to MAYO and/or VGL, whichever has assigned its interest therein to COMPANY, a fully paid up, fully sublicensable right and license under such Key Patent to make, have made, use, offer for sale, sell and import products and services outside the Field.  The Key Patent shall remain subject to the terms and conditions of this Agreement, including FOUNDERS’ retained rights to use the inventions claimed therein internally as provided in Section 2.03.

 

Article 9.00 - General Provisions.

 

9.01                        AMENDMENTS.  This Agreement may not be amended or modified except by a writing signed by the parties and identified as an amendment to this Agreement.

 

9.02                        ASSIGNMENT. A party may not assign its rights hereunder to any third party without the prior written consent of the other parties; provided that a party may assign its rights without the prior written consent of the other parties to any affiliate or other entity that controls, is controlled by or is under common control with such party.  Notwithstanding the foregoing, COMPANY is free to transfer or assign this Agreement (or any rights granted under this Agreement) to its successor, whether by way of merger, consolidation, reorganization or acquisition of stock or sale of substantially all of its assets relating to the subject matter of this Agreement.  COMPANY will promptly notify FOUNDERS of any such assignment.  Any purported assignment in violation of this clause is void.  Any assignment shall not in any manner relieve the assignor from liability for the performance of this Agreement by its assignee.  The assignee shall agree to be fully bound by the terms and conditions of this Agreement.  If COMPANY assigns this Agreement in accordance with this Section 9.02, MAYO’s and VGL’s obligations under Sections 2.02(a) and 2.02(b) shall terminate, unless, within [***] days after an assignment pursuant to this Section 9.02, MAYO, in its sole discretion, provides notice that

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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it desires to continue to confer per the terms of this Agreement.  If MAYO fails to provide such notice within [***] days of notification of assignment in writing by COMPANY, (1) no Know-How retainer fees under Section 3.05 shall thereafter accrue and be payable; and (2) no Know-How milestone payments under Section 3.06 shall thereafter accrue and be payable.

 

9.03                        BINDING EFFECT.  This Agreement shall be binding upon and inure to the benefit of the parties, their heirs, legal representatives, successors and permitted assigns.

 

9.04                        ENTIRE AGREEMENT.  This Agreement, including Exhibit A, constitutes the final, complete and exclusive agreement between the parties with respect to its subject matter and supersedes all past and contemporaneous agreements, promises and understandings, whether oral or written, between the parties.

 

9.05                        INDEPENDENT CONTRACTOR. It is mutually understood and agreed that the relationship between the parties is that of independent contractors. Neither party is the agent, employee, or servant of the other. Except as specifically set forth herein, neither party shall have nor exercise any control or direction over the methods by which the other party performs work or obligations under this Agreement. Further, nothing in this Agreement is intended to create any partnership, joint venture, lease or equity relationship, expressly or by implication, between the parties. Neither VGL nor Mayo shall have the right to bind or otherwise obligate the other to any commitment or contract or act on the other’s behalf under this Agreement.

 

9.06                        ARBITRATION.  Any disputes as described in Exhibit A will be arbitrated as set forth therein.

 

9.07                        NOTICES.  All notices and other business communications between the parties related to this Agreement shall be in writing, sent by certified mail, addressed as follows:

 

If to COMPANY:                                                 NBI Development, Inc.

Attn: Robert Nickoloff: CEO

2800 Patton Road

St. Paul, MN 55113

Facsimile:  (651) 634-3212

 

with a copy to:

Latham & Watkins LLP

Attn: Michael Pucker

Sears Tower, Suite 5800

233 South Wacker Drive

Chicago, IL 60606

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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Facsimile: (312) 993-9767
    
	
 
    	
 
    
	
If to VGL:
    	
VenturiGroup, LLC
    
	
 
    	
2800 Patton Road
    
	
 
    	
St. Paul, MN 55113
    
	
 
    	
Facsimile: (651) 634-3212
    
	
 
    	
 
    
	
If to MAYO:
    	
Mayo Medical Ventures
    
	
 
    	
Attn: Leif Nelson
    
	
 
    	
200 First Street SW
    
	
 
    	
Rochester, MN 55905
    
	
 
    	
Facsimile: (507) 284-5410
    
	
 
    	
 
    
	
 
    	
with a copy to:
    
	
 
    	
MAYO Legal Department
    
	
 
    	
Attn: General Counsel
    
	
 
    	
200 First Street SW
    
	
 
    	
Rochester, MN 55905
    
	
 
    	
Facsimile: (507) 284-0929
    

 

Notices sent by certified mail shall be deemed delivered on the third day following the date of mailing. Either party may change its address or facsimile number by giving written notice in compliance with this Section 9.07.

 

9.08         SEVERABILITY.  In the event any provision of this Agreement is held to be invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect as if the invalid or unenforceable provision had never been a part of this Agreement.

 

9.09         WAIVER. The failure of either party to complain of any default by the other party or to enforce any of such party’s rights, no matter how long such failure may continue, will not constitute a waiver of the party’s rights under this Agreement. The waiver by either party of any breach of any provision of this Agreement shall not be construed as a waiver of any subsequent breach of the same or any other provision. No part of this Agreement may be waived except by the further written agreement of the parties.

 

9.10                        LIMITATION OF RIGHTS.   Subject to Section 9.03, this Agreement is intended only to benefit the parties hereto.  They have no intention to create any interests for any other party. Specifically, no interests are intended to be created for any customer, patient, research subjects or other persons (or their relatives, heirs, dependents or personal representatives) by or upon whom COMPANY Products may be used.

 

9.11                        CONSTRUCTION.  The parties agree to all of the terms of this Agreement and have executed it only after reviewing it thoroughly. That one party may have drafted all or a part of this Agreement will not cause this Agreement to be read more strictly against the drafting party. This Agreement, and any changes to it, will be interpreted on the basis that the parties contributed equally to the drafting of each of its parts.

 

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9.12                        FORCE MAJEURE.  Neither party shall be responsible for the non-performance of its obligations under this Agreement if such non-performance is caused directly or indirectly by acts of God, acts of civil or military authority, civil disturbance, war, terrorism, fires, or strikes. The party so affected shall give notice to the other party and shall do everything reasonably possible to resume performance.

 

9.13                        GOVERNING LAW.  This Agreement shall be governed by the laws of the State of Minnesota, without giving effect to its conflict of laws principles.

 

[Signature Page Follows]

 

Confidential -Page 22 of 26-

 

MAYO FOUNDATION FOR MEDICAL EDUCATION AND RESEARCH:

 

	
Signed:
    	
/s/ Steven P. VanNurden
    	
 
    
	
 
    	
 
    	
 
    
	
Printed Name:
    	
Steven P. VanNurden
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Assistant Treasurer
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
10/02/2006
    	
 
    
	
 
    	
 
    	
 
    
	
VENTURI GROUP, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
Signed:
    	
/s/ Mark. B. Knudson
    	
 
    
	
 
    	
 
    	
 
    
	
Printed Name:
    	
Mark B. Knudson
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Managing Member
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
10/02/2006
    	
 
    
	
 
    	
 
    	
 
    
	
COMPANY
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed:
    	
/s/ Robert S. Nickoloff
    	
 
    
	
 
    	
 
    	
 
    
	
Printed Name:
    	
Robert S. Nickoloff
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
President
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
10/02/2006
    	
 
    

 

[A/R License Agreement]

 

 

EXHIBIT A

 

MANDATORY MEDIATION AND BINDING ARBITRATION

 

1.                                      NOTICE OF DISPUTE.   Any dispute related to this Agreement between the parties, including its formation, performance, or termination, which cannot be resolved by the parties themselves within [***] days after written notice by one party to another of the existence of a dispute, may be referred by either of the parties to mandatory mediation and binding arbitration under the terms of this Exhibit A.  The parties intend the mediation/arbitration  procedure described in this Exhibit A to substitute in all cases for litigation related to any such dispute, subject only to Section 7 of this Exhibit A, and this agreement to submit all such disputes to mandatory  mediation  and binding  arbitration is irrevocable.

 

2.                                      LIMITATION PERIOD. No demand for mediation/arbitration may be made regarding any claim more than [***] days after written notice by one party to the other of the existence of a dispute, regardless of any otherwise applicable statute of limitations.

 

3.                                      MEDIA TOR/ARBITRATOR.  If the parties cannot agree upon a single mediator/arbitrator within [***] days after written demand by either of them for mediation/arbitration, then a single mediator/arbitrator shall be chosen by the American Arbitration Association office in Minneapolis, Minnesota, within [***] additional days after the [***] day period. The mediator/arbitrator shall be generally experienced in the legal and technical matters related to the dispute.

 

4.                                      MEDIATION.   Within [***] days after the appointment of the mediator/arbitrator, the parties must attend a mediation session at which the mediator/arbitrator personally shall attempt to guide the parties to a settlement.  Each party may be represented by counsel at the mediation, but each party must attend through an officer having authority to agree to a settlement at the mediation.  The mediation session shall occur in Minneapolis or in St. Paul, Minnesota, and shall extend no longer than a single day.  Statements or offers made at the mediation session shall not be admissible in any later arbitration hearing.

 

5.                                     ARBITRATION.   If such mediation has not resulted in a mutually-executed settlement agreement (or withdrawal of claim) within [***] days after the date of mediation, then the parties shall proceed to arbitration as described below.   Such arbitration, which the parties intend to be final and to substitute for litigation, shall occur in Minneapolis or in St. Paul, Minnesota, and the arbitration results may be entered as a final judgment in any court with jurisdiction.   The decision of the arbitrator shall be final and binding upon the parties both as to law and fact.

 

(a)                                Initial Disclosures.   Within [***] days after the date of mediation, the parties shall exchange written disclosures listing with reasonable specificity: (i) all exhibits expected to be used by the party at arbitration, and complete copies of such exhibits, (ii) all witnesses expected to be called by the party at arbitration, and (iii) the substance of the testimony of each witness.  Copies of such disclosures shall be sent to the arbitrator. No exhibit or witness may be called if the same does not appear on such disclosure, and

 

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

 

Confidential -Page 24 of 26-

 

 

no witness may testify as to matters not described in such disclosure, except for rebuttal testimony as may be permitted by the arbitrator.

 

(b)                                   Discovery Period.  Within [***] days after exchange of the disclosure notices, the parties shall make specific discovery requests to the arbitrator, and within an additional [***] days the arbitrator shall issue to both parties a joint discovery order.  The discovery period preceding the arbitration hearing shall not exceed [***] days from the issuance of the discovery order by the arbitrator.

 

(c)                                    Scope of Discovery.  Discovery shall be limited to that ordered by the arbitrator as being reasonable and necessary, and in no case shall exceed the deposition of [***] witnesses for each party, and/or the exchange of more than a total of [***] specific and non-compound interrogatories by each party, and/or two specific requests by each party for the production of documents considered by the arbitrator to be reasonably relevant and not unduly burdensome.

 

(d)                                 Hearing.  The arbitration hearing, which shall be confidential to the parties and not open to the public, shall not exceed [***] days, and shall be completed within [***] days after the close of discovery.  The arbitrator may admit any testimony or other evidence which the arbitrator decides is reasonably relevant to the issues of the arbitration, but excluding statements or offers made by either party at the mediation session.

 

(e)                                 Final Decision.  The arbitrator shall issue a final written decision no later than [***] days following the end of the arbitration hearing, stating findings as to law and fact.  In any final decision, the arbitrator shall be free to grant a continuing license to COMPANY to any Licensed Know- How or Licensed Patents on terms deemed by the arbitrator to be just and equitable (such terms to include subject matter or geographic scope of any continuing license, royalty rate, degree of exclusivity).  The decision shall be confidential to the parties.  The arbitrator shall be limited to determining and ordering the payment of actual and direct damages if any, and may order the payment of indirect, special, incidental, or consequential damages only where bad faith has been shown and/or to the extent required to fulfill any obligations under Article 7.00 of the .  The arbitrator shall not order the payment of punitive or exemplary damages in any case.

 

6.                                      COSTS AND FEES.  Each party shall be responsible for its own costs and fees (including attorney’s fees), and shall divide common costs and fees equally; however, if the arbitrator specifically finds bad faith on the part of a party, then the arbitrator may order a different division of costs and fees.

 

7.                                      EQUITABLE RELIEF.  Nothing in this Exhibit A prohibits a party from seeking equitable relief to protect its rights to the extent that irreparable harm may occur and damages would not be a sufficient remedy, except that a party shall not seek to enjoin mediation/arbitration as described in this Exhibit A.

 

(a)                                Specific Performance.  Among the equitable remedies that a party may seek under this Section 7 of this Exhibit A, either party may petition a court for specific performance of

 

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

 

Confidential -Page 25 of 26-

 

 

the terms of this Exhibit A, including following the failure of either party without good cause to adhere to the time limits set out in this Exhibit A.  A party securing an order for specific performance under this Section 7(a) of this Exhibit A is entitled to recover costs and reasonable attorneys’ fees in connection with such petition for specific performance and any related hearings.

 

8.                                      SURVIVAL.  The rights and obligations of the parties described in this Exhibit A survive the termination, expiration, non-renewal, or rescission of this Agreement.

 

9.                                      GOVERNING RULES AND LAW.  To the extent not inconsistent with the terms of this Exhibit A, the mediation and arbitration are governed by the rules of the American Arbitration Association, the Minnesota Arbitration Act, and the Federal Arbitration Act (9 U.S.C § I, et seq.).

 

Confidential -Page 26 of 26-Exhibit 10.2

 

STELLAR MANUFACTURING AGREEMENT

 

This Stellar Manufacturing Agreement (“Agreement”), effective the 1st day of July, 2009 (the “Effective Date”), by and between Stellar Technologies, Inc., a Minnesota corporation (“Stellar”) and Nevro Corp., a Delaware corporation, having a place of business at 411 Acacia Avenue, Palo Alto, CA 94306 (“Customer”) (Stellar and Customer are the “Party[ies]”).

 

In consideration of the mutual covenants contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, Customer and Stellar agree as follows:

 

1.)                                  Appointment.  Customer hereby appoints Stellar as its supplier of all percutaneous leads and percutaneous lead extenders for neurological stimulation and related services that Customer orders from Stellar during the Contract Term.  All plans, designs and specifications used by Stellar in manufacturing or providing any Products and Services are designed solely by Customer and are owned exclusively by Customer.  Customer agrees to indemnify and hold Stellar harmless from any claims, judgments, penalties, recalls and attorney fees arising from any third-party allegations that Customer’s plans, designs and specifications for the Products infringe on or violate any third party’s patents, trade secrets, proprietary rights or other intellectual property rights.  Stellar will cooperate with Customer’s efforts to obtain regulatory approval for its Products from governmental authorities (“Regulatory Approvals”) without conveying to Customer or any governmental authorities any right, title or interest in its Confidential Information and Intellectual Property as defined herein.

 

2.)                                  Definitions.  For purposes of this Agreement, “Product(s)” means percutaneous leads and percutaneous lead extenders for neurological stimulation, including parts, components, supplies and finished devices, manufactured by Stellar for Customer.  “Service(s)” means any work or other services performed by Stellar for Customer, including without limitation any process and any work that may increase the effectiveness, efficiency or safety of any Products.  “Purchase Order Acknowledgment” refers to Stellar’s Purchase Order Acknowledgment as defined in Section 5; it does not refer to any of Customer’s Purchase Orders, requests for proposal, requests for quotations, shipping documents and other Customer documents relating to the Products and Services (collectively, “Customer Records”).  “Subcontractor” refers to Customer’s subassembly contractors or other subcontractors; “Subcontractor” does not include any buyer, licensee or other transferee of Customer or Customer’s assets, including without limitation a successor, assignee or transferee under a Customer Sale or Product/Service Transfer as defined in Section 22.  “Buyer” refers to a successor, assignee or transferee under a Customer Sale or Product/Service Transfer as defined in Section 22.  Buyer is deemed to assume all of Customer’s obligations under this Agreement, subject to the provisions of Section 25.

 

3.)                                  Term of Agreement.  This Agreement is for a term of five (5) years, beginning the Effective Date, and will automatically renew for an additional year on each subsequent annual anniversary date, unless terminated by either party in writing at least thirty (30) days prior to the expiration of the then-current term (“Contract Term”).  All Purchase Orders issued or approved by Stellar prior to the expiration date of the then-current Contract Term shall remain in effect 

 

 

through the date of Stellar’s last scheduled shipment made under that Purchase Order, even if manufacturing and shipment occur after the expiration or other termination of this Agreement (“Last Shipment”).  The terms of this Agreement shall also remain in effect through the Last Shipment.  In addition, Customer’s Indemnity described in Section 17 and the Continuation Charge described in Section 24 shall survive the expiration or termination of this Agreement, subject to the terms hereof.

 

4.)                                  Voluntary Termination by Stellar or Customer.  Stellar may terminate this Agreement at-will at any time on six (6) months’ notice (“Stellar Voluntary Termination”), without incurring any liability or obligation to Customer, except Customer’s right to a Last Time Buy under Section 12.  Customer may make a Last Time Buy at any time through the last day of the six (6)-month notice period.  In the event of a Stellar Voluntary Termination, Customer is not liable for the Continuation Charge.

 

Customer may also terminate this Agreement at-will at any time (“Customer Voluntary Termination”), provided Customer pays Stellar all amounts due or to become due under this Agreement, together with the Continuation Charge, immediately upon receipt of Stellar’s invoices for such amounts.  The amounts due or to become due include, without limitation: (a) the Price and other sums due under Section 10; (b) any costs under Section 11; (c) any remedies for Customer’s Default under Sections 22 and 23; (d) the Continuation Charge; and (e) any [***] and other costs under Exhibit A, Price Terms.

 

If Customer or Buyer is unable to obtain FDA approval of the Products, this shall also be deemed a Customer Voluntary Termination and Customer and Buyer shall remain liable for all amounts due or to become under this Agreement, except for the Continuation Charge.

 

5.)                                  Preferred Supplier Clause, Purchase Orders and Purchase Order Acknowledgments.  Customer designates Stellar as its preferred supplier of the Products and Services throughout the Contract Term.  Customer will in good faith negotiate exclusively with Stellar for a period of [***] days after giving Stellar written notice of its interest in negotiations before engaging any other suppliers or vendors of the Products and Services.

 

During the Contract Term, Customer or its Subcontractor(s) shall submit its own purchase orders or other requests for Products and Services to Stellar (“collectively, “Purchase Order(s)”).  Customer’s Purchase Orders may include such terms as components, price, quantity, delivery schedule (including proposed shipping dates and quantities), whether the Products will be delivered to the Customer or Subcontractor, plans, drawings, material specifications, process specifications, and other Customer specifications and requirements (“Terms”).

 

Within [***] business days after receipt of a Purchase Order, Stellar will issue a Purchase Order Acknowledgment signed by Stellar (“Purchase Order Acknowledgment”) accepting the Terms of the Purchase Order, except [***].  Stellar may amend (a) [***], and (b) [***].  Any such revisions to the [***] shall be incorporated into, and become a Term of, the Purchase Order.  Customer may not revise Stellar’s [***] Term except upon prior written consent of Stellar’s Chief Executive Officer.  All Purchase Orders are subject to the terms of this Agreement.

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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6.)                                  Right to Reject.  Stellar is only obligated to provide Products and Services under the Terms of Purchase Orders that it has approved in writing, subject to Changes, as defined in Section 7.  Stellar may [***].

 

7.)                                  Changes.  For purposes of this Agreement and any Purchase Order, “Change” means a change in materials, process, procedures or facilities that materially affects the Product or Service.  “Change” does not include alterations in the Product or Service characteristics that fit within the Customer’s specifications that are in effect on the date Stellar performs such work, and it does not include “Variations” as defined below.  Furthermore, Stellar does not make any Changes or Variations to Customer’s plans, designs and specifications for any Products or Services.

 

Stellar agrees to inform Customer of any process change that affects the fit, form or function of the Products.  Stellar agrees to notify Customer of any Changes in advance so that Customer may determine whether the Changes could affect the quality of a finished Product or Service.  Such notification shall be made in sufficient detail to allow the Customer to determine the impact of such Changes, if any, upon the affected finished Product or Service.

 

Stellar is not required to provide Customer prior notice in connection with the following variations in the following manufacturing processes, materials and other activities, provided Stellar complies with all specifications, drawings, material specifications, process specifications, and other Customer requirements as specifically set forth in the Purchase Orders (collectively, “Variations”):

 

(a)                                 Stellar may purchase materials, tools and any other items [***]appropriate for performance of any Purchase Order from multiple vendors, provided such purchases meet the applicable Customer specifications;

 

(b)                                 Stellar may [***] provided the relevant processing method does not change.  For example, and not by way of limitation, Stellar may [***].  The material processing will be verified by inspection and certified to Customer’s written specifications.  Part numbers are not machine-specific;

 

(c)                                  Stellar may [***], including, for example, [***].  Such [***] may include, without limitation, [***]; and

 

(d)                                 Stellar may [***].

 

8.)                                  Certificate of Conformance.  Stellar shall provide a written Certificate of Conformance with each delivery of Products or Services.

 

9.)                                  Delivery.  Stellar shall deliver Products and Services to Customer, [***], [***].  Packaging and delivery shall be made in accordance with Stellar’s policies in effect on the date of delivery.  Title to, and all risk of loss or damage with respect to, the Products and Services shall pass to Customer upon [***].  Delivery is subject to Stellar’s receipt of all necessary information and documentation from Customer, including all required certificates, licenses and documents required for export of the Products and Services.  Stellar is not liable for any delays in delivery beyond the reasonable control of Stellar and Stellar’s suppliers, including but not limited to:  (a) delays caused by unavailability or shortages of labor, fuel, power, materials, 

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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Products and Services, at customary and reasonable prices, rates and times; (b) natural disasters, acts of war, fire, flood or other casualty, strike, riot, or governmental interference; (c) failure or destruction of plant or equipment arising from any cause whatsoever; or (d) transportation delays.  Stellar will inform Customer or its Subcontractor(s) of any delays in delivery of Product within [***] days after knowledge of the delays.  Stellar will not charge increased unit prices under Exhibit A, Section 7, for its own delays.  Stellar is not responsible for [***] unless specified in the Purchase Order, in which event such [***] shall be based on [***].  Regardless of whether Stellar [***], Stellar is [***], and Customer [***], and instead [***].

 

10.)                           Price and Payment.  Customer shall remit payment to Stellar for all Products and Services within [***] days after the date of Stellar’s delivery, [***].  Customer agrees to pay Stellar the full amount of the price of the Products and Services set forth in each Purchase Order and any Schedules and Addenda referenced therein, plus any sums payable to Stellar under this Agreement (collectively, “Price”), as they accrue.  All of Stellar’s invoices shall be due within [***] days after the date of the invoice except invoices for (a) deliveries of Products and Services (which are due and payable within [***] days after the date of delivery) and (b) amounts immediately due and payable under this Agreement.  Invoices due within [***] days after the date of the invoice include, without limitation, invoices for modifications, revisions and cancellations under Section 11 and invoices for BAL seals under Exhibit A, Price Terms, Section 6.  If there is any inconsistency between the payment terms of any documents, the payment terms contained in this Section 10 govern.  However, if Customer is in Default, all Purchase Orders and invoices shall be immediately due and payable.  Customer shall pay all federal, state, municipal and other government taxes (such as sales, use, and similar taxes), as well as import or customs duties, license fees and similar charges relating to all sales.  Exemption certificates must be presented by Customer prior to delivery if they are to be honored.  Stellar may charge interest on all unpaid invoices at a rate equal to the lesser of (a) [***] per month on the unpaid balance, calculated from the date due; or (b) the highest rate allowed by law.  If Stellar accepts payment by check, Customer agrees to pay Stellar an administrative fee of $[***] for each check that is dishonored, returned “NSF”, or which is subject to a “stop payment” order, [***]

 

11.)                           Purchase Order Modification or Cancellation by Customer or Stellar.  Customer may modify or cancel a Purchase Order within [***] days after the date of the Purchase Order (“[***] Period”).  Such modification or cancellation must be in writing and received by Stellar within the [***] Period or it is void.

 

Upon receipt of such timely notice (that is, within the [***] Period), if Customer notifies Stellar that it is only delaying delivery for up to [***] days after the date specified in the Purchase Order (“Delayed Delivery”), Customer will pay the cost of (a) all finished Products and Services manufactured by Stellar, including without limitation Products and Services in Stellar’s and Customer’s inventory and in shipment and (b) Stellar’s losses relating in any way to precious metals materials that Stellar returns to its precious metals suppliers, plus the related costs of shipping, handling and any losses due to fluctuations in currency exchange rates.

 

Alternatively, upon receipt of such timely notice (that is, within the [***] Period), if (i) Customer modifies any Terms other than a Delayed Delivery (for example but not by way of limitation, by changing any revisions to the drawings and specifications), or (ii) Customer cancels the Purchase Order, or (iii) Customer fails to order delivery within the Delayed Delivery period, Stellar will calculate, and Customer will immediately pay Stellar, the cost of all (x) 

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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finished Products and Services manufactured or provided by Stellar, including without limitation Products and Services in Stellar’s and Customer’s inventory and in shipment, (y) all work in process (including Products and Services) and (z) [***].

 

If Customer delays delivery of any part of a Purchase Order more than [***] after the date of the Purchase Order [***], the unit price shall also be recalculated and added to the Price, as provided in Exhibit A, Price Terms, Section 7.

 

If Customer makes any modification or other revision to the drawings and specifications for a Product or Service, Customer shall pay all of Stellar’s costs for undertaking or making such modification or revision.  These costs are in addition to: (A) the amounts referenced in the preceding paragraphs of Section 11 and (B) any [***] to the unit price under Exhibit A, Price Terms, Section 2.  Customer is liable for these costs regardless of whether such modification or revision is made with timely notice under Section 11.

 

The amounts due under Section 11 will [***] and shall be payable as provided in Section 10.

 

Stellar reserves the right to cancel any Purchase Order and any delivery thereunder, at any time, as a result of Customer’s Default (as defined in Section 22) without incurring any liability or obligation to Customer, subject to the Last Time Buy, as defined in Section 12.

 

The remedies contained in Section 11 are in addition to all other remedies available to Stellar for Customer’s Default.

 

12.)                           Last Time Buys Upon Expiration or Termination of Agreement or Termination of Purchase Order by Stellar.  Upon expiration or termination of this Agreement, or upon termination of a Purchase Order by Stellar, Stellar shall take reasonable measures to cease any ongoing Services or production of Product(s) and limit further expenses associated with such ongoing production, except for the Last Time Buy.  Notwithstanding the foregoing, upon expiration or termination of this Agreement, or upon termination of a Purchase Order by Stellar, then unless such termination is the result of Customer’s Default under Section 22, Customer shall have the right to place a last Purchase Order with multiple delivery dates (the “Last Time Buy”).  The last delivery date under any Last Time Buy shall not to exceed [***] months from the date of the Last Time Buy.  Any credit remaining on Customer’s account upon expiration or termination of this Agreement shall be refunded to Customer within [***] days after the latest of the expiration, termination or last delivery of Product pursuant to the Last Time Buy.  Any credit remaining on Customer’s account upon termination of any Purchase Order under Section 12 shall be refunded to Customer within [***] days after the later of the termination of the Purchase Order or last delivery of Product ordered pursuant to the Last Time Buy.

 

13.)                           Confidential Information.  During [***], Stellar and Customer may provide confidential and proprietary information and trade secrets regarding their respective products, processes, know-how, work and business to the other party.  Such information shall be deemed the confidential and proprietary information, or trade secrets, of the disclosing party, provided the disclosing party designates the information as “CONFIDENTIAL” in writing at the time of disclosure or within [***] after disclosure to the receiving party (“Confidential Information”).  Any Confidential Information disclosed by either party will remain the sole property of the 

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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disclosing party unless it (i) was rightfully known to the receiving party (without any restriction on disclosure or use) prior to its receipt from the disclosing party, or (ii) becomes part of the public domain or (iii) is disclosed to the receiving party by a third party not in violation of the disclosing party’s rights.  Each party shall take all necessary precautions to protect the other party’s Confidential Information.  Both parties agree, on behalf of themselves and their respective employees, agents, successors and assigns, that the receiving party will not, directly or indirectly: (a) reproduce, publish or disclose the disclosing party’s Confidential Information to any third party, or (b) use the disclosing party’s Confidential Information for any purpose except to perform this Agreement and any Purchase Order, without the prior written consent of the disclosing party.  The Chief Executive Officer of Stellar is the only person authorized to grant such written consent on behalf of Stellar.  Each party agrees to not disclose the other party’s Confidential Information under any court or other governmental order without giving immediate written notice of the order to the disclosing party so that the disclosing party may take legal action to prevent the disclosure.  On request, each party will return the other party’s Confidential Information and certify the return or destruction of all copies thereof, regardless of the medium in which it is maintained.  Either party may obtain a temporary restraining order and temporary and permanent injunctions to enforce Section 13 and to prevent or prohibit the imminent or actual disclosure or use of its Confidential Information.  The receiving party shall pay all of the disclosing party’s damages, attorneys’ fees, costs and disbursements arising from the receiving party’s imminent or actual violation of any term of Section 13.  Each party shall have the right to review and approve the other party’s procedures for handling records and Confidential Information, and may make such inspections as the disclosing party deems necessary to insure that the other party is properly safeguarding the disclosing party’s records and Confidential Information.  Each party’s obligations under Section 13 shall survive the termination or expiration of this Agreement and all Purchase Orders except as to information that does not qualify, or no longer qualifies, as Confidential Information under the terms of Section 13 (i-iii).  Customer further agrees that all information and records that it received from Stellar on or before the date of this Agreement is Stellar’s Confidential Information.

 

14.)                           Intellectual Property.  Stellar retains sole and exclusive right, title and interest in its Confidential Information, trade secrets, proprietary information, patents, trademarks, servicemarks and all other intellectual property (“Intellectual Property”).  Customer retains sole and exclusive right, title and interest in its Intellectual Property.  All Intellectual Property that Stellar uses or develops in connection with performing this Agreement relating in any manner to [***] is and remains the sole property of Stellar.  Stellar does not [***].  All changes and improvements to the [***] is and remains the sole property of Customer.  If Stellar and Customer develop new Intellectual Property while working together [***] (“Other IP”), Customer is the owner of the Other IP and Customer hereby grants to Stellar an irrevocable, worldwide, nonexclusive license to use such Other IP at no cost to Stellar.  Stellar and Customer agree to cooperate with each other in effecting assignments of and registering any Intellectual Property and Other IP to effect the foregoing, subject to their respective rights in their own Confidential Information and Intellectual Property.  This duty to cooperate shall survive the expiration or termination of this Agreement.

 

15.)                           Customer’s Right to Inspect Records.  Stellar agrees to provide records confirming Stellar’s compliance with an appropriate quality system for Customer’s review upon reasonable request.  Stellar should allow Customer, upon reasonable notice, to perform quality 

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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system audits at Stellar’s facility, including the review of applicable documentation.  These records may include the following quality controls:

 

(a)                                 Process controls;

 

(b)                                 Inspection records confirming appropriate calibrated measuring equipment and statistically valid sampling plans;

 

(c)                                  Records tracing Products and Services to the materials and processes used, and the dates of manufacture;

 

(d)                                 Products and Services labeled to insure proper identification and packed for shipment in accordance with packing and shipping requirements set forth in the Purchase Order; and

 

(e)                                  Stellar will maintain a Device Master File (“DMF”) for Products manufactured by Stellar.  Stellar hereby grants Customer a right of reference for such DMF solely for the purpose of developing and obtaining regulatory approval of Customer’s products incorporating Products.  Such right of reference does not allow Customer to access directly the DMF or to review and read the DMF.  Stellar shall retain records for each batch of Product manufactured pursuant to this Agreement for [***] years after the last delivery of such Product.

 

16.)                           Limited Warranty.  Stellar makes no warranty except as specifically set forth in Stellar’s Certificate of Conformance for the Products and Services listed in the Certificate of Conformance (“Limited Warranty”).  STELLAR MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING WARRANTY OF TITLE AND IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

 

17.)                           Indemnification.  If Customer or any third party: (i) performs any operation, procedure or process involving any Products or Services, or (ii) assembles, installs, uses or manufactures any Products or Services, or (iii) transports or delivers any Products to any third party, Customer immediately assumes all liability for, and agrees to indemnify and hold Stellar harmless from all claims, damages, recalls, penalties and attorneys’ fees relating to, or arising from, the Products and Services.  In addition, Stellar is not liable for: (a) Customer’s designs, plans and specifications for the Products and Services; (b) Customer-supplied goods, including without limitation material, components, assemblies, and services, whether conforming or non-conforming, while in Stellar’s possession (“Customer Materials”); (c) non-conformities in any Products or Services created or occurring during Stellar’s handling, development, set-up, production, inspection, or provision of Services; and (d) non-conformities in any Products or Services created or occurring while in the possession of any third parties (collectively, (c-d), “Non-Conformities”).  Customer assumes all liability for, and agrees to indemnify and hold Stellar harmless from all claims, damages, recalls, penalties and attorneys’ fees relating to, or arising from, Customer’s designs, plans and specifications, Customer Materials and Non-Conformities (collectively, Section 17, “Customer’s Indemnity”).

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

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18.)                           Remedy and Limitation of Damages.  Customer or Subcontractor shall inspect each shipment of Products and Services within [***] days after delivery (“Inspection Period”).  If any Products or Services do not conform to the Certificate of Conformance (collectively, “Defect[s]”, “Product Defect” or “Service Defect”), Customer or Subcontractor shall notify Stellar of such Defects within [***] days after the expiration of the Inspection Period or the Defects are waived.  [***]  Subject to Customer’s Indemnity, in the event of a Product Defect, Stellar’s [***] and Customer’s [***] shall be as follows: (a) that Stellar repair or replace the defective Products (or any defective part thereof) without charge; OR (b) that Stellar credit the Price of the defective Products (or any defective part thereof) to future Purchase Orders; OR (c) that Stellar refund the Price of the defective Products (or any defective part thereof), which alternative remedy (a, b, or c) shall be [***].  Stellar will issue a Return Material Acceptance (RMA) number for the return and replacement, repair or refund of the defective Product.  Defective Products will be repaired or scrapped and Customer will receive a credit for those that are scrapped.  IN NO EVENT SHALL STELLAR BE LIABLE FOR ANY CLAIM OR DAMAGE IN EXCESS OF THE PURCHASE PRICE OF THE DEFECTIVE PRODUCTS (OR ANY DEFECTIVE PARTS THEREOF) UNDER THE RELATED PURCHASE ORDER.  STELLAR IS NOT LIABLE FOR ANY OTHER CLAIMS OR DAMAGES, INCLUDING WITHOUT LIMITATION, DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, PUNITIVE OR INCIDENTAL DAMAGES , RECALL OR ATTORNEYS’ FEES.  Subject to Customer’s Indemnity, in the event of a Service Defect, Stellar’s [***] and Customer’s [***] shall be as follows: (a) that Stellar repair or replace without charge defective Services provided by Stellar; OR (b) that Stellar credit the Price of defective Services provided by Stellar to future Purchase Orders; OR (c) that Stellar refund to Customer the Price of defective Services provided by Stellar, which alternative remedy (a, b, or c) shall be [***].  IN NO EVENT SHALL STELLAR BE LIABLE FOR ANY CLAIM OR DAMAGE IN EXCESS OF THE PURCHASE PRICE OF THE DEFECTIVE SERVICES PROVIDED BY STELLAR UNDER THE RELATED PURCHASE ORDER.  STELLAR IS NOT LIABLE FOR ANY OTHER CLAIMS OR DAMAGES, INCLUDING WITHOUT LIMITATION, DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, PUNITIVE OR INCIDENTAL DAMAGES, RECALL OR ATTORNEYS’ FEES.

 

If there is a dispute as to whether any of Stellar’s Products or Services contain Defects, Customer and Stellar agree to submit the dispute to an independent inspection laboratory for a determination (“Inspection Lab”).  If Customer and Stellar do not agree on the selection or decision of the Inspection Lab, each of them shall hire its own Inspection Lab and the decision whether Defects exist shall be determined by the Courts in the Exclusive Venue.

 

19.)                           Exclusions of Consequential Damages.  STELLAR AGREES THAT CUSTOMER IS NOT LIABLE TO STELLAR FOR ANY CONSEQUENTIAL, PUNITIVE OR INCIDENTAL DAMAGES ARISING FROM CUSTOMER’S BREACH OF THIS AGREEMENT, EXCEPT THOSE CLAIMED BY A THIRD PARTY AGAINST STELLAR.

 

20.)                           Stellar’s Inability to Perform.  If Stellar ceases business operations or cannot conduct business operations for sixty (60) days or more, or if Stellar refuses to perform this Agreement, Customer may terminate this Agreement after giving Stellar sixty (60) days’ written notice to cure.  If Stellar fails to cure within such time period, Customer may terminate this Agreement for cause.  [***]

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

8

 

21.)                           Customer’s Obligations.  Until Customer has paid the Price in full, Customer shall fulfill all of its duties with respect to the Products and, in addition, shall:  [***].  Customer warrants that all information that it provides Stellar at any time regarding its creditworthiness and ability to perform this Agreement is true and accurate.

 

22.)                           Customer’s Default.  If Customer engages in any of the following, such action shall constitute a default by Customer under this Agreement (each, a “Default”):  (a) fails to make any payment when due; (b) materially violates any warranty or any other term of this Agreement or any Term contained in any Purchase Order or Purchase Order Acknowledgement (except for nonpayment of amounts due, which is governed by Section 22(a)); (c) materially violates any Laws, as defined in Section 28; (d) violates the terms of any other contract or agreement between Customer and Stellar (collectively “Other Contract[s]”); (e) becomes insolvent or makes an assignment for the benefit of creditors, is named as the debtor in any voluntary or involuntary bankruptcy proceeding, or has a receiver, liquidator or similar officer appointed to take charge of all or part of Customer’s assets, and such event is not cured or removed, to Stellar’s satisfaction, within sixty (60) days thereafter; or (f) attempts to assign or delegate any of its rights or obligations under this Agreement or any Purchase Order to any third party, except in the case of a Customer Sale or Product/Service Transfer.  For purposes of this Agreement, (A) a “Customer Sale” occurs if Customer merges with or is acquired by a third party, or transfers or assigns (i) control of its business to any third party or (ii) fifty percent (50%) or more of its assets, capital stock, voting stock or rights to profits to a third party, or intends to engage in any such activities and (B) a “Product/Service Transfer”occurs if Customer sells, licenses, transfers or assigns ownership of, or its right to manufacture or sell, any Products or Services (or any items which contain or use Products or Services), to a third party, or intends to engage in any such activity.  A Customer Sale and Product/Service Transfer is further governed by the terms of Sections 24 and 25.

 

23.)                           Remedies.  In the event of Default, Stellar is entitled to all remedies available at law and in equity and all other remedies provided in this Agreement.  Such remedies shall be [***] and include, without limitation:  (a) obtaining temporary restraining orders and temporary and permanent injunctions to compel performance, or to prevent or stop any violation; (b) [***]; (c) [***]; (d) [***]; (e) Stellar’s termination of this Agreement, any Purchase Orders and any Other Contracts, in Stellar’s discretion; and (f) [***].  However, the [***] within [***] days after the due date.  Any termination shall be without prejudice to any claims, damages or other rights that Stellar has or may have against Customer and any third party.  Stellar may exercise any combination of remedies without incurring any liability to Customer or any third party.  Customer agrees to indemnify and hold Stellar harmless from all claims by any third party arising from Stellar’s exercise of any of its remedies against Customer, and agrees to pay all of Stellar’s attorneys’ fees, costs and disbursements incurred in defending against any such third-party claims.

 

24.)                           [***] Triggering Events.  Customer agrees to [***] upon the earliest of the following:  (a) upon Customer’s failure to pay any amount when due under this Agreement if such Default is not cured within [***] days thereafter; (b) at the time of a Customer Sale or Product/Service Transfer (however, a Customer Sale or Product/Service Transfer is not a Triggering Event if Buyer assumes Customer’s obligations under this Agreement[***]); (c) at the time Customer no longer uses, markets, or manufactures any Product (unless Customer or Buyer fails to obtain FDA approval for such Product); (d) at the time Customer no longer orders 

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

9

 

or purchases any Product from Stellar (unless Customer or Buyer fails to obtain FDA approval for such Product); (e) at the time Stellar terminates this Agreement based upon Customer’s Default (subject to the provisions of Section 24(a)); (f) at the time Customer terminates this Agreement, including without limitation at the time of a Customer Voluntary Termination (excluding, however, a termination under Section 20); (g) upon the expiration of the first five-year Contract Term, unless Customer or Buyer failed to obtain FDA approval for any Product(s) and demonstrates that it is diligently pursuing FDA approval of the Product(s) at that time, in which case the [***] at the earliest of (1) the first alternative grounds under Section 24(a-f and h), (2) the expiration of the Contract Term, or [***] years after the [***]; and (h) upon the occurrence of any other event that [***] any Product (each, (a-h), a “Triggering Event”).

 

The Continuation Charge is calculated and defined as follows:

 

Regardless of any other term of this Agreement, Customer, on behalf of itself and any Buyer, agrees that under all circumstances Customer and any Buyer shall pay, and have a continuing duty to pay, Stellar the following continuing obligation for each Product, beginning the Effective Date:

 

·                  Percutaneous leads:  $[***]

 

·                  Percutaneous lead extenders:  $[***]

 

The continuing obligation payable for each Product is referred to as the “Continuation Charge” for that Product.  The Continuation Charge for each Product is incurred as of the Effective Date.  The Continuation Charge is calculated for each Product separately.  [***]

 

For example, if Customer purchases only [***] percutaneous leads from Stellar during the Contract Term, it must pay Stellar $[***] as a [***] for percutaneous leads as provided below.  If Customer purchases [***] percutaneous leads from Stellar, it must pay Stellar $[***] as a [***] for percutaneous leads as provided below.  This [***] is calculated as follows:  [***].  If Customer purchases [***] percutaneous leads during the Contract Term, it owes Stellar no [***] for the percutaneous leads; however, Customer would owe Stellar the [***] for percutaneous lead extenders until its purchases of percutaneous lead extenders exceed the [***] for that Product.  [***]

 

The Continuation Charge for each Product shall be [***] and payable upon the occurrence of the [***].  The [***] shall survive each of the events referenced in Section 24(a-h).

 

Customer agrees that the Continuation Charge is reasonable in all respects.  Customer agrees that Stellar has made and will make valuable and material investments in order to provide the Customer with the Products and Services referenced in this Agreement and in all Purchase Orders, including without limitation labor, skills, know-how, machinery and manufacturing processes.  Stellar has factored these investments and its expectation of the [***] into the Price of the Products.  Customer agrees that the value of Stellar’s investments [***].  The [***] is not a penalty.  Stellar and Customer have entered this Agreement only because of Customer’s agreement to the [***].

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

10

 

25.)                           Customer Sale and Product/Service Transfer(s).  In the event of a Customer Sale or Product/Service Transfer, Buyer may (in Customer’s and Buyer’s judgment) assume all of Customer’s obligations under this Agreement.  However, if Buyer refuses to assume any of the following obligations at the time of a Customer Sale or Product/Service Transfer, Customer shall remain liable for those amounts and shall pay Stellar such amount(s) [***]: (a) the [***]; (b) the cost of all (i) outstanding invoices; (ii) all finished Products and Services manufactured or provided by Stellar, including without limitation Products and Services in Stellar’s and Customer’s inventory and in shipment, (iii) all work in process (including Products and Services) and (iv) [***]; (c) all other sums owed by Customer under this Agreement and any Purchase Orders, including without limitation any damages for any Default under Section 23; and (d) in the event of a Customer Sale, all other sums owed by Customer under any Other Contracts, all of which (that is, (a-d)) shall be [***].  In the event of a Customer Sale, Product/Service Transfer or other transfer approved under Section 26, the parties to such transactions shall include terms in the related agreements that prevent Stellar’s competitors from obtaining or using Stellar’s Confidential Information and Intellectual Property as a result of such transactions, which terms must be approved in advance and in writing by the Chief Executive Officer of Stellar, in Stellar’s discretion.  All of Customer’s duties and obligations that survive this Agreement upon termination or expiration shall survive a Customer Sale and Product/Service Transfer.

 

26.)                           Binding Effect and Limitations on Assignability.  This Agreement binds each of the parties, their successors and assigns.  Notwithstanding any other term of this Agreement, Customer may not license, transfer or assign any of its rights or obligations under this Agreement or any Purchase Orders to any licensees, successors, transferees or assigns, including without limitation any subsidiaries, affiliates, parents or any third party, except pursuant to a Customer Sale or Product/Service Transfer, unless approved in advance and in writing by Stellar’s Chief Executive Officer, [***].

 

27.)                           Governing Law, Jurisdiction and Venue.  This Agreement and all Purchase Orders, and all rights and obligations arising thereunder, shall be governed exclusively by the laws of the State of Minnesota, without regard to Minnesota’s choice of law or conflict-of-law rules.  Customer consents to personal jurisdiction in the State and Federal Courts of Minnesota.  Any dispute relating to this Agreement shall only be filed and venued in the State Courts or Federal Courts of Minnesota (“Exclusive Venue”) and Customer waives all objections to venue in the Exclusive Venue, including forum non conveniens.  [***].

 

28.)                           Governmental Approvals and Warrants.  Customer agrees to comply with all international, foreign, federal (i.e., United States), State, municipal and local statutes, laws, regulations, ordinance and codes that apply to the Products and Services and to the performance of all or any part of this Agreement, with respect to the Products and Services (collectively, “Laws”).  Customer agrees to defend, indemnify and hold Stellar harmless from and against any and all claims (including civil damages, recalls, fines, awards, attorneys’ fees, costs and disbursements) arising from any violation of such Laws.  Customer warrants that this Agreement and all information, records, prototypes and other items furnished to Stellar do not violate any Laws or the rights of any third party.  Customer agrees to indemnify and hold Stellar harmless from and against all damages, recalls, penalties, costs, disbursements and attorneys’ fees resulting from its violation of the covenants in Section 28.

 

Stellar is [***] responsible for complying with Laws that [***].  Stellar’s failure to

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

11

 

comply with any Laws contained in any specifications shall be deemed a violation of Stellar’s Certificate of Conformance and Limited Warranty, and its liability shall be limited to the remedies provided to Customer under Section 18.

 

Stellar agrees to comply with all ISO certification requirements and State and federal laws governing its general business operations, including without limitation environmental laws (“General Business Laws”).  General Business Laws [***], as described in the first two paragraphs of this Section 28.  Stellar warrants that it will not employ any person who is debarred by the United States Food and Drug Administration (“FDA”) during the Contract Term.

 

29.)                           Severability and Waiver.  If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, the enforceability of all remaining provisions of this Agreement will not be impaired and will remain in full force and effect.  If either Party fails to exercise, or delays its exercise of, any right, remedy, power or privilege under this Agreement, such failure or delay shall not operate as a waiver thereof in any later instance.  No waiver shall be effective unless it is in writing and is signed by an authorized officer of Stellar.

 

30.)                           Joint Signatures.  If more than one party signs this Agreement on behalf of Customer, including without limitation any personal guarantor or business guarantor, the term “Customer” shall mean all signing parties and guarantors, and all such parties shall be bound by all terms of this Agreement and shall be jointly and severally obligated hereunder.  All rights of Stellar shall inure to the benefit of its successors and assigns, and all obligations of Customer shall bind Customer’s permitted successors and assigns.

 

31.)                           Integration.  This Agreement including any Purchase Orders, Exhibits and Addenda contains the entire agreement between the parties concerning its subject matter and supersedes: (a) all other written and oral statements and agreements between the parties; (b) any prior course of dealing or industry practice; (c) any prior Confidentiality Agreement or Non-Disclosure Agreement between Stellar and Customer; and (d) any Customer Records (except Purchase Orders).  This Agreement may not be modified except in writing signed by the Chief Executive Officer of Stellar.

 

32.)                           No Joint Venture.  This Agreement does not create a joint venture or other business relationship between Stellar and Customer.  Stellar and Customer are, and at all times remain, separate and independent business entities.

 

	
STELLAR TECHNOLOGIES, INC.
    	
 
    	
NEVRO   CORP., a Delaware corporation
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Estelle Forcelle
    	
 
    	
By:
    	
/s/   Konstantinos Alataris
    
	
 
    	
Estelle   Forcelle,
    	
 
    	
 
    	
Konstantinos   Alataris, Ph.D.
    
	
 
    	
Its:   Chief Executive Offifcer
    	
 
    	
 
    	
Its:   Chief Executive Offifcer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
7/13/09
    	
 
    	
Date:
    	
7/10/09
    

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

12

 

EXHIBIT A

 

PRICE TERMS

 

This Exhibit A (“Exhibit”) is incorporated into that certain Stellar Manufacturing Agreement (“Agreement”), by and between Stellar Technologies, Inc. (“Stellar”) and Nevro Corp. (“Customer”).  All terms defined in the Agreement shall have the same meaning in this Exhibit.  The terms of this Exhibit supersede any inconsistent terms of the Quotations, as defined below.

 

1.                                      The Agreement incorporates Stellar Quotation [***], dated [***] (“[***] Quotation”), and Stellar Quotation [***], dated [***] (“[***] Quotation”) (collectively, the [***] Quotation and [***] Quotation, the “Quotation[s]”).  The [***] Quotation is attached as Exhibit A-1 and the [***] Quotation is attached as Exhibit A-2.

 

2.                                      The Quotations list the unit price of the Products based on Stellar’s general understanding of Customer’s current designs and specifications for each Product.  If the final designs and specifications for the Products [***].  Similarly, if Customer modifies the drawings and specifications of any Products, the Parties will [***].  Finally, if the unit prices for any Products are not included in the Quotations and are later agreed upon by the Parties, the [***].  This would occur, for example, (a) if Stellar provides the cable for orders of [***] or more percutaneous leads; or (b) if Stellar provides the BAL seals for orders of [***] or more percutaneous lead extenders.  For purposes of this Exhibit and the Agreement, any [***] supersede the unit price of the Products listed in the Quotations.

 

3.                                      For each Product, the unit prices listed in the Quotations, subject to [***], are valid through the earlier of:  (a) [***], or (b) the date Stellar delivers the first [***] units of that Product.  The [***] unit threshold does not include the first [***] percutaneous leads or the first [***] percutaneous lead extenders.  If Stellar attains the [***] unit threshold with a Purchase Order that, when delivered within [***] months, results in Customer’s purchasing more than [***] units of either Product, the [***]

 

4.                                      Stellar will provide all materials for percutaneous leads under Item 001 of both Quotations.

 

5.                                      Stellar will provide all materials for percutaneous lead extenders, including BAL seals, under Item 003 of the [***] Quotation.

 

6.                                      Stellar will not provide BAL seals for percutaneous lead extenders under Item 002 of the [***] Quotation or under Item 004 of the [***] Quotation.  Instead Stellar will purchase the BAL seals at then-current market rates from the manufacturer and immediately charge Customer the sum of Stellar’s purchase price [***].

 

7.                                      If Customer orders a certain number of units of either Product at the related unit price, but then requests delivery more than [***] months after the date of the Purchase Order, Customer will pay the unit cost for that order based on the actual amount delivered during each [***] period beginning the date of the Purchase Order.  For example, if Customer orders [***] percutaneous lead extenders under Item 002 of the [***] Quotation but then requests delivery of [***] in the first [***] calendar months after the date of Purchase Order, and the remaining [***] in the next [***] calendar months, Customer will pay the unit price of the first [***] under Item

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

13

 

4 of the [***] Quotation ($[***] per unit) and the last [***] under Item 4 of the [***] Quotation ($[***] per unit), subject to [***].  Customer will not pay the unit price of [***] percutaneous lead extenders under Item 002 of the [***] Quotation ($[***] per unit).

 

EXHIBITS A-1 and A-2 follow

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

14

 

Our Quotation #[***]

[***]

 

	

9200 Xylon Avenue North
   Brooklyn Park, MN  55445
   763-493-8556  FAX 763-493-8507
    	
 
    

 

	
To:
    	
Andre Walker
    	
 
    	
 
    
	
 
    	
Nevro Corporation
    	
 
    	
Quotation Valid Thru : [***]
    
	
 
    	
411 Acacia Avenue
    	
 
    	
Terms : [***]
    
	
 
    	
Palo Alto CA 94306
    	
 
    	
 
    
	
 
    	
US
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(650)251-0005
    	
 
    	
 
    

 

We are pleased to quote your requirements as shown below. Our company has a reputation for delivering quality products on time and we look forward to the opportunity of serving you. CONFIDENTIAL NOTICE: The information contained in this document and all attached documents is strictly confidential and contains proprietary information. It may only be used by the named addressee(s) and is also subject to the terms of any other confidentiality or nondisclosure agreement between parties. All other use is strictly prohibited.

 

	
Item
    	
 
    	
Part/Rev/Description/Details
    	
 
    	
Quantity Quoted
    	
 
    	
Unit Price $USD
    
	
001
    	
 
    	
[***]-XXXX
    	
U/M EA
    	
 
    	
[***]
    	
 
    	
[***]
    
	
 
    	
 
    	
Percutaneous   Lead
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Pricing   assumes [***], with deliveries [***] from order date. Pricing will be [***].
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Customer   Part: [***]-XXXX        Rev [***]
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
002
    	
 
    	
Perc.   Lead Extender
    	
U/M EA
    	
 
    	
[***]
    	
 
    	
[***]
    
	
 
    	
 
    	
Lead   Extension for Percutaneous lead
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Assumes   [***], with deliveries [***] of original order date. Pricing [***]. Stellar   will [***]. Pricing will be [***].
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Quoted   prices are based upon acceptance of shipments up to [***].  Delivery as quoted is [***], and will be   finalized [***]. This quotation is based on [***].
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Thank   you for your interest in Stellar Technologies as one of your suppliers.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
With   best regards,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[***]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Terms   and Conditions of Sale:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
General   Terms: All sales subject [***] terms and conditions of sales listed herein.   [***]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Indemnification:   Upon Customers installation, use, manufacture, or an other operation   involving the components listed herein, [***].  Remedy: Subject to [***], in the event of a   breach of [***], Stellar’s [***] shall be as follows: [***]
    

 

***STELLAR NOW OFFERS CLEAN ROOM ASSEMBLY, MOLDING, COIL WINDING AND LASER MARKING/CUTTING/WELDING***

 

	
Customer
    	
Dennis Forcelle
    
	
 
    	
Authorized Signature
    

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

1

 

Our Quotation  #[***]

[***]

 

	

9200   Xylon Avenue North
   Brooklyn Park, MN  55445
   763-493-8556  FAX 763-493-8507
    	
 
    	
 
    

 

	
To:
    	
Andre Walker
    	
 
    	
 
    
	
 
    	
Nevro Corporation
    	
 
    	
Quotation Valid Thru : [***]
    
	
 
    	
411 Acacia Avenue
    	
 
    	
 
    
	
 
    	
Palo Alto CA 94306
    	
 
    	
 
    
	
 
    	
US
    	
 
    	
 
    

 

	
Item
    	
 
    	
Part/Rev/Description/Details
    	
 
    	
Quantity Quoted
    	
 
    	
Unit Price $USD
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

[***]. In no event shall [***]. STELLAR [***]. Stellar is [***]. Stellar’s [***] shall be as follows: [***]. In no event shall [***]. STELLAR [***].

 

***STELLAR NOW OFFERS CLEAN ROOM ASSEMBLY, MOLDING, COIL WINDING AND LASER MARKING/CUTTING/WELDING***

 

	
Customer
    	
Dennis Forcelle
    
	
 
    	
Authorized Signature
    

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

2

 

Our Quotation  #[***]

[***]

 

	

9200   Xylon Avenue North
   Brooklyn Park, MN  55445
   763-493-8556  FAX 763-493-8507
    	
 
    	
 
    

 

	
To:
    	
Andre Walker
    	
 
    	
 
    
	
 
    	
Nevro Corporation
    	
 
    	
Quotation Valid Thru : [***]
    
	
 
    	
411 Acacia Avenue
    	
 
    	
Terms : [***]
    
	
 
    	
Palo Alto CA 94306
    	
 
    	
 
    
	
 
    	
US
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(650) 251-0005
    	
 
    	
 
    

 

We are pleased to quote your requirements as shown below. Our company has a reputation for delivering quality products on time and we look forward to the opportunity of serving you. CONFIDENTIAL NOTICE: The information contained in this document and all attached documents is strictly confidential and contains proprietary information. It may only be used by the named addressee(s) and is also subject to the terms of any other confidentiality or nondisclosure agreement between parties. All other use is strictly prohibited.

 

	
Item
    	
 
    	
Part/Rev/Description/Details
    	
 
    	
Quantity Quoted
    	
 
    	
Unit Price $USD
    
	
001
    	
 
    	
[***]-XXXX
    	
U/M EA 
    	
 
    	
[***]
    	
 
    	
[***]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Percutaneous   Lead [***]
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Pricing goes into affect [***]. Pricing assumes [***], with   deliveries [***] from order date.
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Customer Part: [***]-XXXX            Rev   [***]
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
002
    	
 
    	
[***]-XXXX   
    	
U/M EA
    	
 
    	
[***]
    	
 
    	
[***]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Percutaneous   Lead [***] 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Pricing goes into affect [***]. Pricing assumes [***], with   deliveries [***].
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Customer Part:   [***]-XXXX            Rev   [***]
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
003
    	
 
    	
Perc.   Lead Extender 
    	
U/M EA 
    	
 
    	
[***]
    	
 
    	
[***]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Lead   Extension for Perc. Lead [***]
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Pricing assumes [***], with deliveries [***] from order date.
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
004
    	
 
    	
Perc.   Lead Extender 
    	
U/M EA
    	
 
    	
[***]
    	
 
    	
[***]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Lead   Extension for Perc. Lead [***] 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Pricing assumes [***], with deliveries [***] from order date. Nevro   [***].
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

***STELLAR NOW OFFERS CLEAN ROOM ASSEMBLY, MOLDING, COIL WINDING AND LASER MARKING/CUTTING/WELDING***

 

	
Customer
    	
Dennis Forcelle
    
	
 
    	
Authorized Signature
    

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

1

 

Our Quotation  #[***]

[***]

 

	

9200 Xylon Avenue North
   Brooklyn Park, MN  55445
   763-493-8556  FAX 763-493-8507
    	
 
    	
 
    

 

	
To:
    	
Andre Walker
    	
 
    	
 
    
	
 
    	
Nevro Corporation
    	
 
    	
Quotation Valid Thru : [***]
    
	
 
    	
411 Acacia Avenue
    	
 
    	
 
    
	
 
    	
Palo Alto CA 94306
    	
 
    	
 
    
	
 
    	
US
    	
 
    	
 
    

 

	
Item
    	
 
    	
Part/Rev/Description/Details
    	
 
    	
Quantity Quoted
    	
 
    	
Unit Price $USD
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
 
    	
 
    	
Quoted   prices are based upon acceptance of shipments up to [***]. Delivery as quoted   is based on [***], and will be finalized [***], This quotation is based on   [***].
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Thank   you for your interest in Stellar Technologies as one of your suppliers.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
With   best regards,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[***]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Terms   and Conditions of Sale:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
General   Terms: All sales subject [***] terms and conditions of sales listed herein.   [***]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Indemnification:   Upon Customer’s installation, use, manufacture, or an other operation   involving the components listed herein, [***]. Remedy: Subject to [***], in   the event of a breach of [***], Stellar’s [***] shall be as follows: [***].   In no event shall [***]. STELLAR [***]. Stellar is [***].  Stellar’s [***] shall be as follows: [***].   In no event shall [***]STELLAR IS [***]
    

 

***STELLAR NOW OFFERS CLEAN ROOM ASSEMBLY, MOLDING, COIL WINDING AND LASER MARKING/CUTTING/WELDING***

 

	
Customer
    	
Dennis Forcelle
    
	
 
    	
Authorized Signature
    

 

[***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

 

2

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