EX-10.26 12 v315460_ex10-26.htm

CONFIDENTIAL TREATED REQUESTED Redacted Portions are indicated by [****] |

FirstCyte Ductal Lavage

Idea Center Proposal

1020451

Presented to:

Steven Quay

Atossa Genetics

Presented by:

Gary Falwell

Technical Business Development Leader

Accellent Inc

100 Fordham Road

Wilmington, MA 01887

August 8, 2011

Development and Manufacturing Transfer for Atossa |

Table of Contents

Executive Summary |  |  | 3
Key Assumptions |  |  | 5
Cost Estimate for the Project |  |  | 8
Unit Price Estimates |  |  | 9
Payment Terms and Execution |  |  | 10
Accellent Inc |  |  | 11
Appendix I: Engineering Services Terms and Conditions |  |  | 12
Appendix II: Key Personnel |  |  | 15
Appendix III: Accellent Commitment to Quality |  |  | 16
Appendix IV: Accellent Three Phase Design Control |  |  | 17
Appendix V: Preliminary Project Gantt |  |  | 18
Appendix VI: Deliverables Checklist |  |  | 18
Appendix VII: Equipment and Fixture List. |  |  | 18

Proposal # 1020451 | Page 2 ACCELLENT CONFIDENTIAL | August 8, 2011

Development and Manufacturing Transfer for Atossa |

Executive Summary

Background |  | Atossa Genetics Inc is a privately held company focused on the development and marketing of a novel cellular and molecular diagnostic risk assessment for breast cancer. Steven C. Quay, M.D., Ph.D. Chairman, President, and Chief Executive Officer is a physician scientist and biotechnology entrepreneur who has founded six companies and rebranded a seventh over a 25+ year career.
|  | Atossa has purchased the rights to the Cytec FirstCyte Aspirator, E.Z Microcatheter, UltraSlim and tapered Dilator products previously produced by MedSource.
|  | Atossa would like Accellent to resurrect the Cytec FirstCyte Aspirator, E.Z Microcatheter, UltraSlim and tapered Dilator products previously produced by MedSource (and subsequently by Hologic/Cytyc in its Costa Rica facility) and begin manufacturing of these devices. To do this, Accellent will need to re-establish the supply chain and a validated manufacturing process.
Project Scope |  | The objective of this project is to re-introduce into manufacturing the FirstCyte Ductal Lavage system that was previously produced by MedSource in its Newton, MA facility.
|  | To accomplish this, Accellent proposes three project phases: Phase I: Transfer preparation
|  | · | Updates to design and manufacturing documents as required.
|  | · | Re-establish supply chain for each device.
|  | · | Execute Pre-DV builds and testing.
|  | Phase II: Design Verification
|  | · | Establish Master Validation Plan for the devices.
|  | · | Finalize design and manufacturing documentation.
|  | · | Execute DV builds for the devices.
|  | · | Execute DV testing for the devices.
|  | · | Complete a clinical build and provide devices to Atossa after executing Accellent’s sterile lot release process. Estimated availability of clinical devices is ~7.5-8 months after project start.
|  | Phase III: Validation
|  | · | Complete all tooling / component validation activity.
|  | — | Conduct PQ builds and testing.
|  | — | Sterilization Validation.
|  | — | Complete and audit the DHF and DMR.
|  | — | Commercial release of the devices.
|  | The detailed tasks to accomplish this are outlined in the Project Gantt located in Appendix V. The Key Deliverables from the activities included in this program are outlined in Appendix VI.

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Development and Manufacturing Transfer for Atossa |

Timeline & NRE |  | Phase I: 13 Weeks – | [****] |
Price Estimate |  | Phase II: 11 Weeks | [****] |
|  | Phase III: 15 Weeks | [****] |
|  | Phase I-III: 39 Weeks | [****] |
|  | Estimated availability of clinical devices is ~7.5-8 months after project start.
Unit Price |  | Pricing for kit containing 5 of each device.
Estimate |  |
|  |  | [****]
|  | Kit containing 5 | [****]
|  | of each device | [****]
|  | See detailed unit pricing table on page 8 for more information.
|  | Prototype & Pre-production units are billed on a Time & Materials basis.
Customer Deliverables |  | In order to ensure program success, Accellent requires the following Customer Deliverables prior to the project start:
|  | — Signed Proposal
|  | — Purchase Order

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Key Assumptions

In preparing this proposal for Atossa, Accellent has made the following assumptions:

■ |  | Estimates provided are based upon the released documents that were contained in MedSource’s system at the time these devices were produced in its former Newton, MA facility. Accellent cannot guarantee that its records carried over from MedSource represent the latest embodiment of the devices, especially given that the device was manufactured by Hologic/Cytyc in its Costa Rica facility after MedSource completed its production of devices. A thorough review of the device drawings and manufacturing documentation is included in the scope of this proposal. A milestone is to be established in the project for Accellent and Atossa to review and agree upon the design to be built, tested, and released into production.
■ |  | The Design History File (DHF) for the devices is not available requiring that it must be rebuilt prior to releasing these devices into production. The scope of this project is based upon the initial DHF gap analysis that Accellent has executed. Based upon the results of that documentation assessment, it is assumed that the Accellent project team will have documents to be used as starting points. However, effort will be required as part of this project to update the documentation and to generate the official reports demonstrating compliance. Additionally, testing required to support those reports may be required and is included in the scope of this proposal.
■ |  | It is assumed that all tooling for components is available and appropriate for production use, though re-validation may be required. If it is determined that new tooling for any component is required, the effect on cost and timing will be communicated to Atossa prior to incurring the additional cost associated with the scope change.
■ |  | Included in the scope of this project is the transfer of the models and drawings into Accellent’s current system. The time estimated to complete this task is based upon an initial assessment of drawings sampled from the MedSource archive. When transferring documents of this type, compatibility issues could arise that may require creating drawings from scratch rather than a simple transfer. If it is determined during the transfer process that drawings need to be generated from scratch, this change will be communicated to Atossa and the effect on timing and cost will be reviewed prior to incurring the additional cost.
■ |  | A new kit configuration consisting of 5 of each device is assumed to be required. This proposal includes the packaging design and testing required for the new shelf carton and shipper boxes required to meet this requirement.
■ |  | Existing fixture designs available in Accellent’s archived project folders will be used as a baseline for fixture designs for this project. However, due to EH&S requirements some designs may need to be updated.
■ |  | Maximum lead time for any given component is assumed to be 4 weeks. This will be updated when final quotes from all suppliers are received based upon the final updated drawings being released for each device.

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■ |  | Maximum lead time for equipment and fixtures is assumed to be 4 weeks. This will be updated when final quotes from all suppliers are received based upon the final updated manufacturing procedures being released for each device.
■ |  | One round of pre-DV testing is sufficient to achieve confidence in passing DV. If an additional round of build and testing is required, Accellent will review the effect on cost and timing with Atossa prior to executing the additional work.
■ |  | 1-year shelf life assumed.
■ |  | Parts for Design Verification, tooling validation, OQ, PQ, and the clinical build will all be ordered concurrently.
■ |  | Clinical devices will be built at risk following the DV build and made available to Atossa following sterile lot release process and successful completion of transit, aging, and biocompatibility testing.
■ |  | PQ builds are set to start after successful completion of transit, aging, biocompatibility. Starting PQ at risk before test completion could reduce timeline by ~1 month.
■ |  | Existing bar and tray sealer equipment in Laconia will be used for this project. If it is determined that dedicated equipment is required to support this line, the cost of this equipment will be quoted separately.
■ |  | Gamma sterilization is assumed for all devices.
■ |  | Accellent assumes Form-Fit-Function prototypes in Phase I require 50 units, which are NOT FOR HUMAN USE, and Design Verification in Phase II requires 100 units.
■ |  | Accellent has estimated the cost of the Materials for pre-production units in our Cost Estimate Section on page 8 and has planned the timeline accordingly; any change to the number of units may affect the Materials cost and/or the project Timeline. Estimated not included in this version of the proposal, but will be added to next revision.
■ |  | Accellent assumes Design Validation requires 300 PQ units and human use Clinical trials performed by Atossa require 200 units; these units will be billed at the lowest volume Unit Price Estimate in our Cost Estimate Section on page 9. The material cost estimates on Page 8 includes the cost for the clinical devices in Phase II.
■ |  | Atossa is responsible for defining product inputs and is ultimately responsible for assessing clinical efficacy; Accellent will work closely with Atossa to translate design inputs in to measurable specifications.
■ |  | An approved supplier will perform sterilization services as an Outside Service. Accellent and Atossa will jointly review the sterilization protocol and report, which will include the results of the Sterilization Validation/Revalidation. Atossa will have final approval responsibility for all sterilization documentation and is ultimately responsible for verification and certification of product sterility. A Supply Agreement between Accellent and Atossa will define the product transfer and terms of sterile lot release.

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Development and Manufacturing Transfer for Atossa |

■ |  | Atossa is responsible for the cost of Quarterly Dose Audits (Gamma), which include sterilization charges, transportation charges, test lab charges, product (destructive test units) costs and documentation costs.
■ |  | Atossa is responsible for ensuring Atossa-supplied materials meet incoming inspection requirements and comply with quality requirements per the drawings.
■ |  | The timeline estimated in this proposal is contingent on the timely receipt of documentation, drawings and approvals from Atossa; delays outside of Accellent’s direct control may affect the timeline and schedule provided.
■ |  | Atossa will work with Accellent prior to the project start to align Accellent’s project plan with Atossa’s project plan.
■ |  | Additional Terms & Conditions that apply to this proposal are located in Appendix I.

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Cost Estimate for the Project

|  | Phase |  | Labor |  | Materials |  | Tooling & Equipment |  | Travel & Shipping |  | Outside Services |  | Total
Quoted |  | Phase I Preparation 13 Weeks |  | [****] |  | [****] |  | [****] |  | [****] |  | [****] |  | [****]
|  |  |  |  |  | [****] |  | [****] |  | [****] |  | [****] |  | [****]
Budgetary |  | Phase II Design Verification 11 Weeks |  | [****] |  | [****] |  | [****] |  | [****] |  | [****] |  | [****]
|  |  |  |  |  | [****] |  | [****] |  | [****] |  | [****] |  | [****]
|  | Phase III Design Validation & Transfer 15 Weeks |  | [****] |  | [****] |  | [****] |  | [****] |  | [****] |  | [****]
|  |  |  | [****] |  | [****] |  | [****] |  | [****] |  | [****] |  | [****]
Total Estimate |  | Phase I-III 39 Weeks |  | [****] |  | [****] |  | [****] |  | [****] |  | [****] |  | [****]

This is a good faith estimate based on managing projects of similar scope and complexity. If unanticipated contingencies or changes in project scope potentially cause the estimate to be exceeded, Atossa’s written authorization will be required prior to incurring expenses beyond this estimate. Travel Expenses are in addition and will be billed at cost, as incurred.

§ |  | See Appendix VII for the equipment list that is assumed to be required to reestablish the production of these devices.
§ |  | Phase II material estimate includes ~100 devices for DV and ~200 devices to be provided to Atossa for human use clinical testing.
§ |  | Saleable PQ devices will be built in Phase III and will be billed at the lowest volume Unit Price Estimate in our Cost Estimate Section on page 9.

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Part Number | [****] | [****] | [****] | [****] | [****]
160-08427-00 FirstCyte Microcatheter | [****] | [****] | [****] | [****] | [****]
160-08417-00 FirstCyte Aspirator | [****] | [****] | [****] | [****] | [****]
160-08788-00 FirstCyte UltraSlim Dilator | [****] | [****] | [****] | [****] | [****]
160-08782-00 FirstCyte Tapered Dilator | [****] | [****] | [****] | [****] | [****]

Kit containing 5 of each device | [****] | [****] | [****] | [****] | [****]

§ |  | Accellent reserves the right to revise the Unit Price Estimates; the above pricing reflects Accellent’s best estimate based on the current product concept and/or Bill of Materials (BOM) received from Atossa and assumes lot purchasing for optimum supply chain management. Any changes to the BOM, component material selection or quantities per may require Accellent to re-estimate the Unit Price.
§ |  | As design and development progress and annual volumes are established, a more accurate Unit Price Estimate can be determined. A Manufacturing Agreement will establish final Unit Price and Volume Breaks.
§ |  | Aspirator cup and f-adaptor in MicroCatheter are assumed to be made from RX2530 Macrolon, which is what the supplier stated was used when parts were supplied to Cytyc. MedSource prints state Lexan, which must be an old revision.
§ |  | MicroCatheter: Sheath 110-08987-00 shall be manufactured from LDPE and not HDPE as the drawing states.

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Payment Terms and Execution

To initiate this proposed project, we require an authorization of $296,000 for Engineering Services and related expenses, which may include tooling, travel, materials, outside services and other items allocated to this project. A deposit of $50,000, which will be credited against final invoices, is also required prior to the project start.

Prior to the end of each phase of the project, Accellent will provide Atossa with an updated cost estimate for the following phase. A purchase order will then be required to continue into the next phase of this project.

Invoices will be sent monthly on a Time & Materials basis; a final invoice for final expenses will be sent upon completion of this work.

Payment Terms are Net 30; past due invoices will incur interest charges at the rate of 1.5% per month.

A full set of Terms & Conditions related to Accellent’s Engineering Services is provided in Appendix I of this proposal and shall have full force and effect over the content of this proposal. Terms & Conditions for production components and assemblies developed under this agreement shall be subject to Accellent’s standard Terms & Conditions. A copy of this document can be provided upon request.

This proposal is valid for 30 days.

To proceed, please return this proposal with:

1) The required signature acknowledging your acceptance.

2) A Phase I Purchase Order for [****] referencing Proposal No. 1020451.

3) A deposit/retainer for [****] prior to the project kick-off meeting.

This program may be canceled at any time and by either party with 10 days written notice. Atossa will be responsible only for charges incurred up to the termination date (including material, tooling purchases and cancellation charges).

Accepted For |  | Accepted For
Accellent Inc |  | Atossa
Signature: |  |  | Signature: |
| /s/ Gary Falwell |  |  |
Name: | Gary Falwell |  | Name: | Steven Quay
Title: | Technical Business Development Leader |  | Title: | President
Date: | August 8, 2011 |  | Date: |

Proposal # 1020451 | Page 10 ACCELLENT CONFIDENTIAL | August 8, 2011

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Accellent Inc

Accellent is the established leader in the field of medical device outsourcing. We have over 3,000 employees and focus the breadth of our expertise on:

· Increased speed to market

· Lower total delivered cost

· Continuous improvement

Accellent provides complete design to assembly services of custom precision components and completed devices on a global basis. We have manufacturing facilities in the United States, Mexico and Europe. Our Integrated OutsourcingSM model provides supply chain management to companies looking to bring new products to market quickly and cost-effectively.

The comprehensive scope of our services includes product development, functional design and analysis, complete project management, thin wall plastic and metal tubing, precision machining, metal stamping and wire forming, metal and plastic injection molding, grinding and coiling, laser processing, radiopaque markers, assembly, packaging, labeling, contract sterilization and order fulfillment. Accellent has the capability to accommodate a product anywhere in its lifecycle - from rapid prototyping of early designs to pilot production, to large scale, off-shore manufacturing in a QSR-compliant operation. Our product experience is very broad within the three core market segments we serve; endoscopy, cardiology and orthopaedics.

The Engineering Services group in our Boston Technical Center numbers more than 35 professionals with backgrounds in mechanical engineering, material science, manufacturing and quality engineering and project management. Dedicated teams handle your project from initiation through validation ensuring a seamless transition from design to manufacturing. Our Project Manager is accountable to you until the successful transition of the project to production manufacturing.

Accellent is ISO 13485 certified and registered with the FDA and is committed to continuous improvement of its business processes. Additional information can be found on our web site, www.Accellent.com.

Integrated Outsourcing is a service mark of Accellent, Inc.

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Appendix I: Engineering Services Terms and Conditions

To effectively execute the Project Scope outlined in this proposal, Accellent establishes the following terms and conditions for Services it provides.

Services. “Services” means all work performed by Accellent as detailed in this proposal.

Statement of Confidential Intent

Accellent is providing this proposal at the request of Atossa. The project goals and product details are as described to us by Atossa. The development process and techniques presented herein for accomplishing those goals are the property of Accellent and are intended exclusively for our use while under contract to Atossa.

Purchase Orders; Payment Terms; Inconsistencies. Accellent’s Services will be performed according to this Proposal. Atossa shall make payment to Accellent for the Services in accordance with the terms of this Proposal. Any payment not made when due shall at Accellent’s option accrue interest at the rate of 18% per annum until paid in full. To the extent that the terms of the purchase orders or any other documents related to the Services differ from or are inconsistent with the terms of this Proposal, the terms of this Proposal will control.

Accellent may discontinue Services for any Purchase Order if the Company has failed to make timely payment in full as agreed by the parties with respect to those or any other Services

Force Majeure. Neither Accellent nor Atossa shall be liable to the other for any loss or damage suffered because of the impossibility of either party performing any of its obligations to the other by reason of any fire, strike, riot, sabotage, war delay, damage by the elements, act of God, act of the public enemy, or any other unavoidable casualty of like nature beyond the control of the party in default. There shall be no liability for interruptions or delays in the making of any delivery or the performance of any act provided such interruption or delay results from any legally enforceable order of a State or Federal Government or any agency thereof. The foregoing shall not apply to any obligation of Atossa to make timely payment for Services.

The Services, or the result of any Services, produced under this Proposal shall become the property of Atossa after full payment for all Services and expenses have been received by Accellent.

Responsibilities for Accepted Services.

Accellent. With respect to any Services accepted by Atossa, Accellent shall be responsible for its warranty and indemnity obligations as provided below.

Atossa. Subject to Accellent’s warranty and indemnity obligations below, upon acceptance by Atossa of any Services, (i) Atossa shall be fully and solely responsible for such Services and the consequences of any implementation or use by Atossa or others of such Services, including without limitation, compliance with applicable laws and regulations and claims of any third parties arising from such implementation and use and, (ii) Accellent will work closely with Atossa to translate design inputs into measurable specifications however, Atossa is responsible for defining product inputs and is solely responsible for assessing clinical efficacy, or for transfers to production (iii) Accellent will work closely with Atossa to transfer the product design into production processes however, Atossa is responsible for defining product inputs and is solely responsible for assessing clinical efficacy.

Sterilization Services. Sterilization services with respect to any Product will be provided only if requested by Atossa and will only be performed as an outside service by a supplier approved by Atossa.

With respect to any such sterilization services, Accellent and Atossa will jointly review the sterilization protocol and report, which will include the results of the Sterilization Validation/Revalidation. Atossa will have final approval responsibility for all sterilization documentation (and the services provided thereunder) and is ultimately responsible for verification and certification of product sterility. Accellent and Atossa will define the product transfer and mutually agree to the terms of sterile lot release.

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Warranty

Accellent Warranty. Accellent warrants that the Services hereunder shall be performed in a manner consistent with prevailing industry standards. If any Services do not comply with this warranty, Accellent shall be obligated, as Atossa’s sole and exclusive remedy, to make commercially diligent efforts to bring the non-complying Services into compliance at Accellent’s expense.

THE WARRANTY EXPRESSLY STATED ABOVE IS THE ONLY WARRANTY APPLICABLE TO THE SERVICES. ACCELLENT MAKES NO REPRESENTATION OR WARRANTY IN THIS AGREEMENT TO Atossa CONCERNING ANY PRODUCTS CONTEMPLATED BY ANY SERVICES, INCLUDING TITLE TO ANY INTELLECTUAL PROPERTY INVOLVED IN THE DESIGN OR MANUFACTURE OF SUCH PRODUCTS, THE PERFORMANCE OF ANY SUCH PRODUCTS, OR THEIR SAFETY OR THEIR FUNCTIONALITY. ALL WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. ACCELLENT SHALL NOT BE LIABLE UNDER THIS AGREEMENT FOR ANY PUNITIVE, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, PERSONAL INJURY AND PROPERTY DAMAGE, EQUIPMENT DAMAGE, LOSS OF PROFITS OR REVENUES OR BUSINESS, COST OF CAPITAL, COST OF PURCHASE, COST OF RECALL, OR COST OF REPLACEMENT GOODS. EXCEPT WITH RESPECT TO ACCELLENT’S INDEMNIFICATION OBLIGATIONS BELOW, IN NO EVENT SHALL ACCELLENT’S LIABILITY UNDER THIS AGREEMENT, WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE EXCEED THE ACTUAL AMOUNTS PAID BY Atossa HEREUNDER DURING THE IMMEDIATELY PRECEDING TWELVE (12) MONTH PERIOD FROM WHEN THE CLAIM FOR LIABILITY AROSE.

Indemnities

Accellent. Accellent agrees to defend and indemnify and hold Atossa and its officers, directors, employees, and agents harmless against any and all claims, suits, proceedings, expenses, recoveries, and damages, including court costs and reasonable attorneys fees and expenses, by third parties against Atossa to the extent they arise out of, are based on, or are caused by Accellent’s negligence in the performance of Services, except to the extent that such arise from or are aggravated by acts of or failure to act by Atossa. Atossa will promptly notify Accellent of any such claim or demand that comes to its attention.

Atossa. Atossa agrees to defend and indemnify and hold Accellent and its officers, directors, employees, and agents, harmless against any and all claims, suits, proceedings, expenses, recoveries, and damages, including court costs and reasonable attorneys fees and expenses, by third parties against Accellent to the extent they arise out of, are based on, or are caused by (i) alleged defects in the design of any products which are the subject of the Services, (ii) any claim that any such product or its design infringes upon the intellectual property rights of third parties, (iii) statements, whether written or oral, made or alleged to be made by Atossa or its Affiliates or others on the packaging or labeling on any of such products, or in the advertising, publicity, promotion, or sale of any of such products, (iv) the storage, sale, shipment, promotion, or distribution of such products, , or (v) the implementation or use of the Design; in each case except to the extent that such arise from or are aggravated by acts of or failure to act by Accellent. Accellent will promptly notify Atossa if any such claim or demand that comes to its attention.

Benefits; Assignment; Binding Notice. This agreement is not intended to confer upon any person other than the parties, any rights or remedies hereunder and may not be assigned by either party without the prior written consent of the other party provided however, either party may assign this agreement without the prior written consent of the other, to any of its Affiliates or in connection with the sale by such party of substantially all of its assets or the business to which this agreement relates. A sale of the shares of a party or a public offering of its shares, or its merger, consolidation, or reorganization, shall not constitute an assignment of this agreement requiring the consent of the other party. Any attempted assignment in violation of the terms hereof will be null and void and of no force or effect. This agreement will be binding upon and inure to the benefit of the parties and their respective successors and assigns.

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Severability. If any term or provision of this agreement is deemed to be invalid or unenforceable, the remainder of this agreement will be unaffected thereby and each other term or provision of this agreement will be valid and enforced to the fullest extent permitted by law.

Governing Law. The validity and interpretation of this agreement and the legal relations of the parties to it shall be governed by the internal laws of the State of Massachusetts.

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Appendix II: Key Personnel

TBD – contingent upon receipt date of P.O. to initiate the project.

For consistency, Accellent will make every effort to use the team members that executed the DHF audit as part of the team for this project.

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Appendix III: Accellent Commitment to Quality

ONESOURCE FOR QUALITY -- Accellent recognizes that quality is among the most important factors for medical device companies. Consequently, we have chosen to focus our business exclusively on manufacturing for medical device companies.

Accellent Quality Policy

As A Medical Device Engineering, Product Development and Manufacturing Services Provider,

Accellent Is Committed To:

Exceeding Our Customers’ Expectations By:

Accelerating Time to Market

Reducing Total Delivered Cost

Providing Superior Customer Product Acceptance Through:

Business Excellence

Continuous Improvement

Teamwork

Accellent utilizes an enterprise-wide common Quality System, which ensures our customers consistent and repeatable quality from each and every Accellent facility worldwide.

The Accellent Quality System outlined in the Quality Manual complies with the following standards:

· International Standard ISO 13485

· International Standard ISO 9001

· FDA Quality System Regulation (QSRs) 21 CFR 820

· European Community Medical Device Directive (MDD) 93/42/EEC

The Accellent Quality System ensures customers receive the same high standards with respect to quality results, regulatory compliance, systematic monitoring and continuous improvement throughout Accellent. While remaining in compliance with FDA and ISO requirements, we maintain flexibility within our system to accommodate our customer’s quality needs.

| TÜV Product Service is the world leader in medical device certification and is the Quality System registrar for Accellent. All Accellent facilities are registered under one certificate with TUV Product Services; this integration allows Accellent to standardize design procedures, reduce inspection cost and minimize auditing activities for our customers.

Accellent and all of its employees are committed to the highest standards of quality, delivery, and service of our products to all of our customers.

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Appendix IV: Accellent Three Phase Design Control

Accellent has a Three Phase Design Control Procedure fully compliant with the current FDA QSR’s and ISO 9001 / ISO 13485. Each project is assigned an experienced Program Manager with direct responsibility in meeting customer expectations, project plan integrity, budget management, team member selection (Quality Assurance Engineer, Manufacturing Engineer, Designer, Technicians, etc.), overall coordination of activities both internal to Accellent as well as with outside suppliers and service providers.

Phase I and II are the concept development and design for manufacturing phases. Phase I consists of taking customer inputs and product specifications and transferring them into preliminary engineering drawings or prototypes. Phase II consists of design verification testing, Design Failure Modes Effects Analysis (FMEA), Design Review and may include builds for clinical or animal trials.

Phase III consists of the transfer to manufacturing and supply chain development. Production tooling is designed and procured, critical suppliers are identified and audited, manufacturing validations are carried out (including sterilization), a process FMEA is developed, all manufacturing documentation is formally introduced, operator training is conducted and all required process validations (accelerated age, transit, bioburden, etc…) are completed. Then, final unit pricing is determined. This phase ends with an extensive design review with all parties present for approval to release product.

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Appendix V: Preliminary Project Gantt

(Please see the next inserted page.)

Appendix VI: Deliverables Checklist

(Inserted after Gantt.)

Appendix VII: Equipment and Fixture List

(Inserted after Deliverables Checklist.)

Proposal # 1020451 | Page 18 ACCELLENT CONFIDENTIAL | August 8, 2011

Appendix VII

FirstCyte Equipment and Fixture List
MicroCatheter DV fixtures
Aspirator DV fixtures
Dilator DV fixtures
Seal Cutting Block
EFOS Acticure, Serial # A4000-01772
EFOS Acticure, Serial # A4000-01774
HYPO-TUBE PUNCH
Side Leg Tensile Fixture
Luer Tensile Fixture
Probe Tensile Fixture
Razor Blade Holder
Seal Punch Guide Block
Seal Slicing Fixture
Dilator Necking Die
Slicer Blade Holder
Catheter Cutter
Aspirator Gauge
Foam Alignment Gauge
Catheter Tipping Mold
Tipping Mold and Clamp
Snap Gauge, Mitutoyo
UV Curing Station
EFOS Ultracure 100SS - 5833
EFOS Ultracure 100SS - 8830
EFOS Ultracure 100SS - P1001-00017
EFOS Acticure A4000 - 00770
EFD Adhesive Dispenser #1
EFD Adhesive Dispenser #2
EFD Adhesive Dispenser #3
Test Gauge 0 - 200
Test Gauge 0 - 30
Vaccum Test Gauge 30 -0 inHg
Scale, 6" Stainless Steel
Tray sealing die
Benches