EXHIBIT 10.40
SUPPLY AGREEMENT
This Agreement, effective February 12, 1999, ("Effective Date"), is made
between IMPRA, Inc., a subsidiary of X.X. Xxxx, Inc., 0000 X. 0xx Xxxxxx, Xxxxx,
XX 00000 ("IMPRA") and Endologix, Inc. a Delaware corporation, with offices at
00 Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000 ("Endologix").
I. BACKGROUND
(A) IMPRA is capable of manufacturing certain components described in
the specifications set forth in the attached Exhibit A (the "Specifications")
and which are referred to in this agreement as "Components." Endologix desires
to purchase the Components for use in Implanted Devices.
(B) IMPRA wishes to sell Components to Endologix.
To accomplish these purposes, IMPRA and Endologix agree as follows:
II. DEFINITIONS
(A) "Confidential Information" means such information disclosed by one
party to the other is such information is marked confidential if in writing or
regarding which written notice is given as to its confidential nature if not in
writing. Such information may include, but is not limited to know-how, trade
secrets, formulations, product data, complaint and safety information,
identities of suppliers, identities of customers, and regulatory information.
Information will not be considered Confidential Information if (1) it is at the
time of disclosure or thereafter part of the public domain, without the fault of
the person claiming such information is not Confidential Information, (2) the
person claiming such information is not Confidential Information can show
through tangible records that it already knew the information before it was
received, (3) the person claiming such information is not Confidential
Information can show through tangible records that the information was developed
independently without reliance on such information, or (4 ) the person claiming
such information is not Confidential Information obtained such information from
a third party without breach of an obligation of confidentiality.
(B) "Implanted Device" means any medical device that (i) is manufactured
by or for Endologix, (ii) which contains one or more of the Components listed on
Exhibit A to this Agreement, and (iii) is designed to be permanently or
temporarily implanted inside the human body.
(C) "Component" means those Components listed in Exhibit A to this
Agreement and which are used in Implanted Devices. Similar or identical
Components will not be considered Component within the meaning of this Agreement
if not used in an Implanted Device.
(D) "Specifications" means the specifications for the Components and
their packaging manufactured by IMPRA for Endologix from time-to-time, subject
to the notice requirements contained in paragraph VI(C) of this Agreement, or
provided by Endologix to IMPRA, as the case may be.
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III. ENDOLOGIX' REPRESENTATIONS
(A) Endologix is a manufacturer of Implanted Devices.
(B) Endologix has determined that Component is suitable for the
applications in which it uses the Component in Implanted Devices.
(C) Endologix has in its employ or has retained consultants who are
experienced and knowledgeable in the properties, processing techniques and
potential hazards of the Component and its uses in Implanted Devices. Endologix
has a regulatory staff properly trained in the requirements of the United States
Federal Food, Drug and Cosmetic Act and pertinent regulations and similar
statutes and regulations of states and other countries in which Implanted
Devices may be sold and qualified medical staff, consultants and or clinical
investigators to conduct such studies as are needed to evaluate the safety and
efficacy of and the proper labeling for the Implanted Devices.
IV. PURCHASE AND SALE
(A) Purchases and Delivery. IMPRA agrees to manufacture and sell the
Components to Endologix, and Endologix agrees to purchase the Components for use
in Implanted Devices. All Sales of Components shall be subject to the terms and
conditions of this Agreement and the terms and conditions of Endologix' purchase
orders. IMPRA will use commercially reasonable efforts to fill orders, but IMPRA
shall not be liable for nonperformance or delays caused by a shortage of raw
materials, manufacturing problems, delivery or labor problems, acts of
regulatory agencies, discontinuation of a product line, Acts of God or other
causes beyond its control. This Agreement does not constitute the grant of a
license to Endologix.
(B) Price and Payment. The price paid and minimum purchase requirements
by Endologix to IMPRA for Components and terms of payment shall be as set forth
on Exhibit B hereto.
(C) Shipment of Products. IMPRA shall ship the Components F.O.B. IMPRA's
facility.
(D) Delivery Schedule. Endologix shall provide IMPRA with a rolling
twelve (12) month forecast of its purchases of Components, updated on a
quarterly basis. The forecast will be accompanied by a firm purchase order for
the quarter, and a projection of orders for the following nine (9) months.
V. ENDOLOGIX' COVENANTS
(A) Endologix is purchasing Components for its own use and will not
resell the Components except after transformation into a district finished
product or Component to (i) any third party, (ii) parties using the Components
for the sole purpose of manufacturing Implanted Devices or their components for
sale by Endologix or its Affiliates, or (iii) distributors of Endologix.
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(B) Endologix will be responsible for and will perform or has performed
all tests necessary to provide reasonable assurance of the suitability of the
Component for the applications in which Endologix uses the Component in
Implanted Devices.
(C) Endologix will provide its customers with all warnings reasonably
necessary for the appropriate use of the Implanted Devices.
(D) All Components purchased by Endologix for use in Implanted Devices
will be subject to incoming quality control by Endologix to determine conformity
to the Specifications and to such other standards as may be determined by
Endologix.
VI. IMPRA'S COVENANTS
(A) IMPRA will provide the applicable product code information to the
United States Food & Drug Administration and any equivalent foreign agency to
enable Endologix to refer to any of IMPRA's device master files covering any
Component supplied under this Agreement and as to which a IMPRA device master
file is applicable.
(B) As may be agreed by IMPRA and Endologix in writing with respect to
individual Components, IMPRA will cooperate with Endologix by providing
information requested by Endologix regarding the Components for the purpose of
Endologix obtaining governmental approvals for Endologix products as well as
such other information as may be requested by Endologix in writing relating to
health and safety aspects of the Components supplied under this Agreement. Such
agreement will not be unreasonably withheld. IMPRA will discuss with Endologix
how such information is selected from the information available to IMPRA
concerning the Components. It is the responsibility of Endologix to ensure the
adequacy and relevance of the information available to Endologix or provided to
governmental authorities relating to health and safety matters relevant to
Endologix Implanted Devices.
(C) IMPRA agrees that it will not make a change in Specifications which
could affect any characteristics of the Component without Endologix' prior
written consent (which consent shall not be unreasonably withheld) such as: (1)
source or composition of any raw Component used in the manufacture of Component,
or (2) method of producing, processing or testing the Component.
VII. IMPRA'S WARRANTY/LIMITATION OF IMPRA'S LIABILITY
(A) IMPRA warrants that the Components supplied to the Endologix will
conform to the Specifications and will be conveyed with good title, free from
any lien, security interest or encumbrance.
(B) THE ABOVE WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, WRITTEN OR
UNWRITTEN, EXPRESS OR IMPLIED. IMPRA EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED
WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE OF THE
COMPONENTS SUPPLIED.
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VIII. INDEMNIFICATION
(A) With the exception of any actions or claims covered by Section
VIII(B), Endologix agrees to defend, indemnify ad hold harmless IMPRA and its
parents, subsidiaries, affiliates, successors, assigns, officers, directors,
employees and agents from and against all claims, demands, costs, expenses,
suits, proceedings, actions, causes of action, damages (including incidental,
consequential or punitive damages), liabilities, judgments, fines or penalties
of any kind or description whatsoever, including reasonable expenses of
investigation and reasonable attorneys' fees (hereinafter "Claims") arising from
personal injury, wrongful death, property damage or commercial loss, or any
other losses or damages of any kind or description whatsoever that arise from,
are connected with, or relate to, on or after the date of this Agreement, use of
the Components by Endologix or the sale or use of medical devices made from
Components sold by IMPRA to Endologix; provided, however, the provisions of this
Section VIII(A) shall not apply to the extent that the provisions of Section
4.4(b) of the International Distributor Agreement ("Distributor Agreement") by
and between IMPRA and Endologix apply to make the indemnification and other
obligations provided in Section 4.4(a) of the Distributor Agreement
inapplicable. The parties shall give each other prompt written notice of any
Claim which is or may be subject to the indemnity set forth herein and Endologix
and IMPRA shall cooperate fully in relation to any such Claim, including making
available documents and witnesses in response to discovery requests or otherwise
assisting in the defense of any such Claim. Endologix shall have the right to
select counsel with respect to any Claim, provided, however IMPRA may
participate in any such Claim by counsel o fits own choice and at its own
expense. IMPRA shall not settle any claim for which indemnification is or may be
sought without Endologix' prior written approval, which shall not be
unreasonably withheld. Endologix shall make no settlement of any Claim which
Endologix has undertaken to defend without IMPRA's consent, unless (i) Endologix
fully indemnifies IMPRA in connection therewith, (ii) there is no admission of
violation of law, negligence or fault of any kind by or on behalf of IMPRA,
(iii) the relief agreed to in connection therewith requires no action, payment
or financial undertaking by or on the part of IMPRA and is not reasonably likely
to restrict or otherwise interfere with IMPRA's ability to conduct its business,
and (iv) IMPRA receives a general release of liability reasonably satisfactory
to it.
(B) IMPRA agrees to defend, indemnify and hold harmless Endologix and
its parents, subsidiaries, affiliates, successors, assigns, shareholders,
directors, officers, employees and agents from and against all claims, demands,
costs, expenses, suits, proceedings, actions, causes of action, damages
(including incidental, consequential or punitive damages), liabilities,
judgments, fines or penalties of any kind or description whatsoever, including
reasonable expenses of investigation and reasonable attorneys' fees, arising
solely from the failure of the Components to conform to the specifications of
the Components. Endologix will promptly notify IMPRA of any claims which may be
the subject of indemnity under this Agreement. IMPRA may, at its option and at
its expense, assume the defense and control of any claim or lawsuit brought
against Endologix and subject to this indemnity, using counsel selected by IMPRA
with the consent of Endologix, which consent will not be unreasonably withheld.
Endologix may be represented in such litigation by its own counsel at its own
expense. IMPRA will not enter any settlement which may be the subject of this
indemnity without the consent of Endologix, which consent will not be
unreasonably withheld.
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(C) Endologix shall obtain and keep in force during the term of this
Agreement product liability insurance in the minimum amount of $3 million. Said
policy shall name IMPRA as an additional insured. Additionally, said policy
shall provide for not less than thirty (30) days' prior written notice to IMPRA
in the event of any change in coverage or policy cancellation. Endologix hereby
covenants to deliver to IMPRA a certificate evidencing such coverage prior to
the first shipment of Components by IMPRA to Endologix.
IX. CONFIDENTIALITY
With respect to Confidential Information supplied by IMPRA to Endologix
or by Endologix to IMPRA, the recipient agrees not to disclose any Confidential
Information to any third party other than to its employees, consultants and
agents who are under an obligation of non-disclosure and who have a reasonable
need for access to the Confidential Information. Upon termination of this
Agreement, each party will return the Confidential Information of the other or
dispose of such Confidential Information and all copies of it, except (i) as
required by regulatory authorities and (ii) one copy may be retained for
archival purposes.
X. TERM AND TERMINATION
This Agreement will come into effect on the Effective Date and will
continue for an initial term of five years; notwithstanding the foregoing, this
Agreement may be sooner terminated by Endologix by providing IMPRA with six (6)
months' prior notice that Endologix will manufacture components in-house without
use of any IMPRA confidential information or proprietary rights. Thereafter,
this Agreement shall terminate automatically, without notice, unless prior to
that time the term of the Agreement is extended by mutual consent of the
parties. Following termination the provisions of this Agreement will continue to
apply to Components sold to Endologix during the term of this Agreement.
XI. GOVERNING LAW AND DISPUTE RESOLUTION
(A) This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of Arizona without giving effect to any choice or
conflict of law provision or rule (whether of the State of California or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Arizona.
(B) Except as provided in Section 11 hereof, in the event that at
anytime hereafter there arises any disagreement, controversy or dispute between
the parties hereto with respect to the enforcement, violation or interpretation
of this Agreement, or of the operations hereunder or of the respective rights
and liabilities of the parties hereto, then, upon written demand of any party
hereto, said demand setting forth each matter or matters upon which the parties
do not agree or upon which there is a controversy or dispute, after thirty (30)
days' written notice, such controversy or dispute shall be settled by
arbitration before one arbitrator in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon any award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. Each party hereto agrees to consider himself or itself bound and to be
bound by any award made by the arbitrators pursuant to this Agreement.
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XII. OTHER PROVISIONS
(A) Neither party may assign this Agreement without the written consent
of the other party.
(B) This Agreement contains all of the terms and conditions with respect
to the sale and purchase of the Components. These terms and conditions supersede
any prior agreements and no modifications of this Agreement will be binding on
the parties unless separately contracted in writing and agreed to by duly
authorized representatives of the parties. Waiver of either party of any default
by the other shall not be deemed a waiver by such party of any default by the
other that may thereafter occur.
(C) Nothing in this Agreement is intended to create any rights by
persons not a party to this Agreement and no other party will be construed to be
a third party beneficiary of this Agreement or otherwise have any legal or
equitable rights under it.
(D) If any part of this Agreement is held by a court to be illegal,
invalid, or unenforceable, the remainder of this Agreement will remain in full
force and effect and will be interpreted to achieve, to the greatest extent
possible, the objectives of this Agreement taken as a whole, including the
illegal, invalid or unenforceable provision.
(E) All notices required or permitted under this Agreement will be in
writing and will be deemed to be given when delivered personally; or ten (10)
business days after being mailed by registered or certified mail, postage
prepaid; when received if sent by any other method (including air courier) which
provides for a signed receipt upon delivery; and when received if sent by
facsimile transmission, addresses as follows, or to such other person or address
as may be designated by notice to the other party from time-to-time.
If to Endologix: Endologix, Inc.
Attention: Xxxxxxxx X. Xxxxx
00 Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
If to IMPRA: IMPRA
Attention: President
0000 X. 0xx Xxxxxx
Xxxxx, XX 00000
With a copy to: X.X. Xxxx
Attention: General Counsel
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
Effective Date.
IMPRA, Inc. Endologix, Inc.
By: By:
----------------------------- -------------------------------
Title: Title: President and Chief Executive
---------------------------- Officer
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EXHIBIT A
[SPECIFICATIONS FOR COMPONENTS]
[**]
** Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
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EXHIBIT B
[PRICE AND PAYMENT TERMS]
Size of Graft Price
16mm x 12cm graft [**]
25mm x 12cm graft [**]
28mm x 12cm graft [**]
Payment terms are 30 days from shipment to Endologix.
Minimum Purchase Requirements
Year: 1999 500 units*
Year: 2000 1,500 units
Year: 2001 2,500 units
Year: 2002 Year 2001 actual plus 10%
Year: 2003 Year 2002 actual plus 10%
*Provided IMPRA is able to supply according to
specifications by July, 1999.
** Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
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Amendment to EXHIBIT B
(Price and Payment Terms)
Size of Graft Price
16mm x 12cm graft [**]
25mm x 12cm graft [**]
28mm x 12cm graft [**]
34mm x 13cm graft [**]
42mm x 13 cm graft [**]
Payment terms are 30 days from shipment to Endologix.
Minimum Purchase Requirements
Year: 1999 500 units*
Year: 2000 1,500 units
Year: 2001 2,500 units
Year: 2002 Year 2001 actual plus 10%
Year: 2003 Year 2002 actual plus 10%
*Provided IMPRA is able to supply according to specifications by July 1999.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
and delivered by their respective duly authorized officers as of the August 4,
1999.
IMPRA, Inc. Endologix, Inc.
By: /s/ Xxxx XxXxxxxxx . By: /s/ Xxxxx Xxxxx .
------------------------- ----------------------
Title: President . Title: President .
------------------------- ----------------------
** Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
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Amendment to EXHIBIT B
(Price and Payment Terms)
Size of Graft Price
12mm x 14cm graft [**]
16mm x 14cm graft [**]
25mm x 13cm graft [**]
28mm x 13cm graft [**]
34mm x 13cm graft [**]
42mm x 13cm graft [**]
Payment terms are 30 days from shipment to Endologix.
Minimum Purchase Requirements
Year: 1999 500 units*
Year: 2000 1,500 units
Year: 2001 2,500 units
Year: 2002 Year 2001 actual plus 10%
Year: 2003 Year 2002 actual plus 10%
*Provided IMPRA is able to supply according to specifications by July 1999.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
and delivered by their respective duly authorized officers as of the November
16, 1999.
IMPRA, Inc. Endologix, Inc.
By: /s/ Xxxx XxXxxxxxx . By: /s/ Xxxxx Xxxxx .
------------------------- ----------------------
Title: President . Title: President/CEO .
------------------------- ----------------------
** Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
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Amendment to EXHIBIT B
(Price and Payment Terms)
Size of Graft Price
12mm x 14cm graft [**]
16mm x 14cm graft [**]
20mm x 14cm graft [**]
25mm x 13cm graft [**]
28mm x 13cm graft [**]
34mm x 13cm graft [**]
42mm x 13cm graft [**]
Payment terms are 30 days from shipment to Endologix.
Minimum Purchase Requirements
Year: 1999 500 units*
Year: 2000 1,500 units
Year: 2001 2,500 units
Year: 2002 Year 2001 actual plus 10%
Year: 2003 Year 2002 actual plus 10%
*Provide IMPRA is able to supply according to specifications by July 1999.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
and delivered by their respective duly authorized officers as of March 10, 2000.
IMPRA, Inc. Endologix, Inc.
By: /s/ Xxxx XxXxxxxxx . By: /s/ Xxxxx Xxxxx .
------------------------- ----------------------
Title: President . Title: President/CEO .
------------------------- ----------------------
** Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
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Amendment to EXHIBIT B
(Price and Payment Terms)
Product Code Size of Graft Price
M12061014 12mm x 14cm graft [**]
M16061014 16mm x 14cm graft [**]
M20061014 20mm x 14cm graft [**]
M25061013 25mm x 13cm graft [**]
M28061013 28mm x 13cm graft [**]
M34061013 34mm x 13cm graft [**]
M34061513 34mm tapered graft [**]
M42061013 42mm x 13cm graft [**]
Payment terms are 30 days from shipment to Endologix.
Minimum Purchase Requirements
Year: 2001 2,500 units
Year: 2002 Year 2001 actual plus 10%
Year: 2003 Year 2002 actual plus 10%
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
and delivered by their respective duly authorized officers as of the January 31,
2001.
IMPRA, Inc. Endologix, Inc.
By: /s/ Xxxx XxXxxxxxx . By: /s/ Xxxx XxXxxxxxx .
------------------------- ----------------------
Title: President . Title: President/COO .
------------------------- ----------------------
** Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
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