Note 5. OEM Neurosurgery Partner Agreements

The Company sells all of its generators and a majority of its neurosurgery instruments and accessories to two U.S.-based national and international original equipment manufacturer (“OEM”) partners as described below:

Codman & Shurtleff, Inc. (“Codman”)

In the neurosurgical market, the bipolar electrosurgical system manufactured by Valley Forge prior to the merger has been sold for over 30 years through a series of distribution agreements with Codman, an affiliate of Johnson & Johnson. On April 2, 2009, the Company executed a three-year distribution agreement with Codman for the continued distribution by Codman of certain bipolar generators and related disposables and accessories, effective January 1, 2009. In addition, the Company entered into a new, three-year license agreement, which provides for the continued licensing of the Company’s Malis^® trademark to Codman for use with certain Codman products, including those covered by the distribution agreement. In December 2010, Codman elected to exercise its option of exclusive distribution with respect to the bipolar generators and related disposables and accessories. On December 16, 2014, the Company executed an amendment to the agreements with DePuy Synthes Products, LLC, successor to Codman, effective as of December 9, 2014. This amendment extends the terms of the agreements until December 31, 2015. All other provisions of such agreements remain unchanged.

On November 16, 2009, the Company announced the signing of an addendum to its agreement with Codman. Under the terms of the revised agreement, Codman has the exclusive right to market and distribute the Company’s Malis^® branded disposable bipolar forceps produced by Synergetics. Codman began distribution of the disposable bipolar forceps on December 1, 2009, domestically, and on February 1, 2010, internationally.

Total sales to Codman and its respective percent of the Company’s net sales in the three and six months ended January 31, 2015 and 2014, including the sales of generators, accessories, disposable bipolar forceps and cord tubing, were as follows:

	Three Months Ended January 31, 2015			Three Months Ended January 31, 2014			Six Months Ended January 31, 2015			Six Months Ended January 31, 2014
Net Sales	$	5,010		$	3,090		$	8,818		$	7,191
Percent of net sales		27.5	%		20.5	%		25.3	%		23.5	%

Stryker Corporation (“Stryker”)

The Company supplies a multi-channel ablation generator, used for minimally invasive pain treatment, to Stryker pursuant to a supply and distribution agreement dated as of October 25, 2004, as amended. The agreement expires on June 30, 2015.

On March 31, 2010, the Company entered into a supply agreement with Stryker pursuant to which the Company agreed to supply Stryker with disposable ultrasonic aspirator instrument tips and certain other consumable products used in conjunction with Stryker’s ultrasonic aspirator console and handpieces. The agreement expires on March 31, 2016.

Total sales to Stryker and its respective percent of the Company’s net sales in the three and six months ended January 31, 2015, and 2014, including the sales of ablation generators, disposable ultrasonic instrument tips and accessories, were as follows:

	Three Months Ended January 31, 2015			Three Months Ended January 31, 2014			Six Months Ended January 31, 2015			Six Months Ended January 31, 2014
Net Sales	$	2,708		$	2,452		$	5,689		$	4,613
Percent of net sales		14.9	%		16.2	%		16.3	%		15.1	%

No other customer comprises more than 10 percent of sales in any given quarter.