[*] = Certain confidential information contained in this Exhibit 4.1,
marked by brackets with asterisks, has been omitted and filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.
Exhibit 4.1
SUPPLY AGREEMENT
----------------
This Supply Agreement is made and entered into by and between Diagnostic
Chemicals Limited, a corporation with principal offices at 00 XxXxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx XXX, Xxxxxx C 1E 2A6 ("DCL"), and International
Medical Innovations Inc., 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx,
Xxxxxx X0X 0X0 ("IMI").
DCL manufactures the product listed in Appendix A; and
IMI desires to purchase quantities of said products for resale; and
DCL is willing to supply IMI with said products as an exclusive supplier
for the US and Canada under the terms and conditions of this agreement.
All parties hereto agree to the following:
Definitions
-----------
For the purposes of this Agreement, the following terms shall have the
following meanings:
1.1 Agreement shall mean this Supply Agreement.
1.2 Product(s) shall mean those products listed in Appendix A including
any refinements and replacements and improvements on such product(s)
developed by IMI and transferred to DCL. Appendix A may be modified from
time to time by mutual consent and subsequent written amendment to this
Agreement.
1.3 Calendar Year shall mean, with respect to the first calendar year, the
period commencing on the Effective Date and ending on December 31 of the
same year. The second and subsequent calendar years shall commence on
January 1, and end on December 31 of each year thereafter.
1.4 Certificate of Analysis shall mean the document prepared by DCL for
each lot of Product(s) containing the results of tests performed on
Product(s) demonstrating that such shipment conforms to the mutually
agreed-to specification described in Appendix B. Said Certificate of
Analysis shall be faxed and the original mailed to IMI at the time the
product is released for shipment.
1.5 Finished Goods Stocking Date shall mean the calendar date when a
specific lot number of product will be released for shipment.
1.6 Effective Date shall mean the date of last signing of this Agreement
by either Party.
1.7 Party or Parties shall mean "DCL" or "IMI", or both, as the context
indicates.
2. Product
-------
2.1 Pricing. The purchase and sale of Product(s) shall be based on the
product(s) described in Appendix A and be in accordance with the pricing
schedule as shown in Appendix C and shall remain fixed for one (1) year
from Effective Date. Prices will be reviewed on an annual basis. Any
changes in pricing must be based on changes in material, labor costs, or
volumes. Changes in pricing must be made with at least 60 days prior
written notification.
2.2 Manufacturing of Products. Shipments. and Purchase Orders.
Manufacturing of Product(s) by DCL shall be in response to written purchase
orders submitted by IMI to DCL, Purchase orders shall be submitted at least
60 days prior to a requested Finished Goods Stocking Date. DCL agrees to
accept all purchase orders for Product(s) placed by IMI and to drop ship
products to IMI customers upon request from IMI and in accordance with IMI
written instructions. Product(s) shall be shipped F.O.B. DCL's
manufacturing location to the location specified by IMI. Shipping costs
will be invoiced to IMI.
2.3 Rejections. IMI shall notify DCL in writing of its rejection of any
product within five (5) working days after receipt of a CERTIFICATE OF
ANALYSIS from DCL. The sole basis for a rejection shall be the failure of
the product to conform to the CERTIFICATE OF ANALYSIS, in accordance with
Appendix B. Failure of IMI to reject a shipment of Product(s) in accordance
with this Section 2.3 shall constitute acceptance of the Product. Unless
the shipment is rejected by IMI, IMI agrees to pay DCL the purchase price
within thirty (30) days of receipt of the invoice.
2.4 Forecast. For the first calendar year or part thereof, IMI shall
submit to DCL a rolling twelve (12) month forecast with a firm
non-cancelable written purchase order for the first shipment. The balance
of such forecasts shall represent reasonable estimates for planning
purposes only and shall not obligate IMI to purchase such or any amounts,
however DCL will only build products to a firm Purchase Order placed in
accordance with Section 2.2 of this Agreement. In subsequent years, IMI
will provide DCL with a non-cancelable one-year blanket Purchase Order
against which periodic orders will be placed in accordance with Section 2.2
of this Agreement.
2.5 Instructions. DCL agrees to provide storage and handling instructions
on all shipping labels adhered to the Product(s).
2.6 Modifications. IMI must approve in advance in writing, any change made
by DCL affecting fit, form, or function in raw materials, formulations,
manufacturing process or QC testing. For changes initiated by IMI, IMI will
notify DCL in writing ninety (90) days in advance, and no change in fit,
form, or
2
function will apply to any purchase order placed by IMI prior to the
effective date of such change. Added expenses due to changes by IMI or DCL
will be passed on to IMI.
2.7 Correcting Problems. DCL will cooperate with IMI in investigating and
assisting IMI in correcting any problems IMI has with the Product(s). DCL
will use reasonable efforts to implement any corrective actions deemed
necessary by IMI.
2.8 Material Safety Data Sheets. DCL shall supply a current Material
Safety Data Sheet (MSDS) for the Product(s) sold under this agreement. DCL
will revise the MSDS for the Product(s) any time there is a change to such
Product(s).
2.9 IMI agrees to provide at no cost to DCL, equipment needed for QC of
the finished product. This equipment consists of, but is not limited to a
Reader, associated Software, and a Laptop Computer. Upon termination of the
agreement, DCL will promptly return the equipment to IMI.
2.10 Before DCL undertakes to manufacture the product, IMI must provide
DCL with data demonstrating that multiple lots of the product can be
manufactured to meet the required specifications. The data must also
demonstrate that the Quality Control Procedures are accurate and
reproducible with multiple lots.
3. Warranties
----------
3.1 DCL Warrant. DCL warrants and represents that:
(a) DCL is a corporation duly organized, validly existing and in good
standing under the laws of Canada.
(b) DCL has full right, power and authority to enter into this
agreement, and that the execution and performance of this
agreement shall not knowingly constitute a violation of any
material covenant or restriction, or a breach of any obligation
under any other agreement, contract, commitment, rule, or
regulation to which DCL is a party or by which DCL is bound.
(c) The Product(s) supplied by DCL to IMI shall conform to the
specifications contained in Appendix B.
3.2 IMI Warrant. IMI warrants and represents that:
(a) IMI is a corporation duly organized, validly existing and in good
standing under the laws of Canada.
(b) IMI has full right, power, and authority to enter into this
Agreement, and that the execution and performance of this
Agreement
3
shall not knowingly constitute a violation of any material
covenant or restriction, or a breach of any obligation under any
other agreement, contract, commitment, rule, or regulation to
which IMI is a party or by which IMI is bound.
(c) IMI has or will have all the necessary qualified personnel,
equipment, materials, facilities, and support for customers and
performance hereunder and to meet necessary regulatory
requirements.
3.3 Indemnification
(a) IMI agrees to defend, indemnify and hold DCL, its affiliates,
employees and agents (including successors and assigns) harmless
from and against all costs, damages, expenses and liabilities
arising out of or relating to any claims by third parties for
costs, damages, expenses (including legal fees) and liabilities
(collectively a "Claim") arising out of any errors in the data or
information provided to DCL under this Agreement, the negligence
or willful misconduct of IMI or any breach by IMI of any of the
terms of this Agreement, provided however, that this indemnity
shall not extend to any claim, demand, or legal action, (i)
arising in any way from any negligent act or omission of DCL or
(ii) arising in any way from violation by DCL of any third party
patent, trademark, copyright or trade secret rights.
(b) DCL agrees to defend, indemnify and hold IMI, its affiliates,
employees and agents (including successors and assigns) harmless
from and against all costs, damages, expenses and liabilities
arising out of or relating to any claims by third parties for
costs, damages, expenses (including legal fees) and liabilities
(collectively a "Claim") arising out of DCL's negligence or
willful misconduct, defects in the Products supplied to IMI or as
a result of any breach by DCL of any of the terms of this
Agreement, provided, however, that this indemnity shall not
extend to any claim, demand, or legal action (i) arising in any
way from any negligent act or omission of IMI or (ii) arising in
any way from any violation by IMI of any third party patent,
trademark, copyright or trade secrets.
(c) The indemnifying party shall have sole control over the defense
and settlement of any Claim and the indemnified party shall
cooperate with the indemnifying party in any such defense or
settlement.
3.4 Disclaimer. Except as otherwise expressly provided herein, DCL
disclaims all warranties, express or implied, including without limitation
warranties of merchantability or fitness for a particular purpose, or
warranties against patent infringement.
4
4. Confidential Information
------------------------
4.1 Obligation to Protect. Each of the Parties shall take such steps as
are reasonably required (including without limitation such steps as such
Party takes to protect its own proprietary information) to protect
confidential and/or propriety information ("Confidential Information")
supplied or revealed to it by the other Party pursuant to this Agreement,
and shall not, directly or indirectly, disclose to any third party or use
such information except pursuant to this Agreement. Any Confidential
Information and/or proprietary information shall be in writing and clearly
designated Confidential, or if initially disclosed orally, confirmed in
writing within thirty (30) days of disclosure. Not-with-standing the
foregoing, the Confidentiality Agreement dated January 10, 2000 between DCL
and IMI will govern.
5. Term and Termination
--------------------
5.1 Term. Unless earlier terminated as provided herein, this Agreement
shall continue for 5 years commencing on the Effective Date hereof, and
shall be automatically renewable for additional one (1) year terms unless
either Party provides written notification to the other Party of its
intention not to renew at least six (6) months prior to the termination
date.
5.2 Termination Upon Consent. This Agreement may be terminated at any
time, by IMI with 180 days prior written notice and by DCL with 12 months
notice.
5.3 Termination Upon Breach. Either Party may terminate this Agreement for
breach of any of its material provisions upon sixty (60) days prior written
notice to the other, if during such sixty-day notice period the default is
not corrected to the reasonable satisfaction of the non-defaulting Party.
In addition, either Party may terminate this Agreement by giving the other
Party at least sixty (60) days written notice if such other Party has
entered into or committed any act of liquidation, bankruptcy, insolvency,
receivership, or assignment for the benefit of creditors, to the extent
such act is permitted by law.
5.4 Transfer of Materials Upon Termination. Except for breach by DCL, IMI
agrees to purchase up to six months worth of raw materials, packaging
materials shipping materials, labeling materials, and all in-process and
finished goods from DCL upon termination of this Agreement as long as the
materials conform to the specifications contained in Appendix B. Upon
termination due to breach by DCL, IMI has the option to purchase the above
materials from DCL.
5.5 Dispute Resolution. The Parties covenant and agree in good faith to
attempt for a period of sixty (60) days, to resolve any disputes which may
5
arise in connection with this Agreement through negotiation and settlement
prior to giving notice of termination or bringing any legal action against
the other Party in connection with this Agreement. The provisions of this
Section shall not apply if one Party refuses to negotiate the dispute in
good faith, or if more prompt legal action is required to avoid material
loss or damage. Failure to resolve a dispute by negotiated settlement shall
not prejudice any subsequent legal action with respect thereto.
6. Government Approvals
--------------------
IMI, at its own expense, will be responsible for obtaining all necessary
governmental approvals for the Product(s) to IMI.
7. Miscellaneous
-------------
7.1 Relationship of the Parties: The relationship of DCL to IMI under this
Agreement is intended to be that of independent contractor. Nothing
contained in this Agreement is intended or is to be construed so as to
constitute DCL and IMI as partners or as employer/employee or
principal/agent or the employees or the agents of any Parts' hereto as
employees or agents of any other Party hereto. Neither Party hereto has any
express or implied right or authority under this Agreement to assume or
create any obligations on behalf of or in the name of the other Party
hereto or to bind the other Party hereto to any contract, agreement or
undertaking with any third party, other than the successors and permitted
assigns of the respective Parties hereto.
7.2 Assignment: This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and assigns,
provided, however, that neither Party shall have the right to transfer or
assign its interest in this Agreement without the prior written consent of
the other Party, except that either Party may make such transfer or
assignment to a partner, subsidiary, or entity otherwise controlled by or
under common control with such Party, or to an entity acquiring
substantially all the assets of a Party to which this Agreement pertains.
No transfer or assignment will relieve the transferor or assignor of any
liability or obligation hereunder.
7.3 Waiver of Performance: A failure of a Party hereto at any time to
require performance by the other Party hereto of any provision hereof
required to be performed by such other Party, will in no way affect the
right of the first Party to require such performance at any time
thereafter. The waiver of any breach of any provision hereof will in no way
be construed as a waiver of any succeeding breach of such provision or a
waiver of the provision itself.
6
7.4 Severability: In the event any provision of this Agreement shall be
invalid, void, illegal, or un-enforceable, the remaining provisions hereof
nevertheless will continue in full force and effect without being impaired
or invalidated in any way.
7.5 Survival: The provisions of Sections 3 and 4 shall survive five (5)
years from the date of termination of this Agreement.
7.6 Notices: Any notice or other communication required or permitted to be
made or to be given to either Party under this Agreement shall be
sufficiently made or given on the date of mailing if sent to such Party by
certified first class mail, postage prepaid, addressed to it as its address
set forth below, or to such other address as shall be designated by written
notice given to the other Party.
If to DCL:
Attn:
Mr. Xxxxx Xxxxxxxxx
Chief Executive Officer
Diagnostics Division
Diagnostic Chemicals Limited
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
If to IMI
Attn:
President
IMI International Medical Innovations, Inc.
0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
7.7 Force Majeure: Either Party shall be excused from the performance of
its obligations hereunder, or such performance may be delayed, by causes
beyond its reasonable control, including without limitation, acts of God,
war, riot, epidemic, fire, flood, insurrection, military authorities, or
failure of transportation or communication.
7.8 Entire Agreement; Modification: This Agreement and the Appendices
attached hereto constitute the full and entire understanding and agreement
of the Parties hereto with regard to the subjects hereof, and supersede all
prior agreements or understandings, written or oral, between the Parties
with respect to the subject hereof. This Agreement may not be amended
except by a written instrument signed by all of the Parties hereto.
7
8. Arbitration
-----------
Any and all disputes arising from this Agreement shall be amicably and
promptly settled upon consultation between the parties hereto, but in case
of failure of amicable settlement of any dispute, it shall be resolved by
arbitration. If the arbitration is requested by DCL, the arbitration shall
be held in Canada under the laws of Canada. If the arbitration is requested
by IMI, the arbitration shall be held in Canada, under the laws of Canada.
The award rendered shall be final and binding upon both parties hereto. The
arbitrators shall have no power to add to, subtract from, or modify any of
the terms or conditions of this Agreement. Any award rendered in such
arbitration may be enforced by either party in the Court with proper
jurisdiction, as the case may be, to whose jurisdiction for such purposes
each of the parties hereby irrevocably consents and submits. Each party
shall bear its own legal and arbitration expenses; except, if the
arbitrator(s) determine that a Party has acted in bad faith or committed
willful misconduct, the arbitrator(s) may assess as part of their award the
legal fees and arbitration expenses of the other party. Either party may
require that the arbitrator(s) set forth in writing its (their) findings of
fact and basis for their award. The arbitrator(s) will have the power to
award an equitable remedy. Notwithstanding anything herein, a Party may
seek equitable relief in any court of competent jurisdiction to maintain
status quo pending resolution of a dispute in arbitration pursuant to this
Agreement or if such Party reasonably believes recourse to such court is
likely to provide more expeditious relief.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed by their authorized representatives as of the date first above
written.
DCL IMI
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx Xxxxxx
Title: C.E.O. Title: C.E.O.
Date: May 21, 2001 Date: 19/6/01
8
APPENDIX A
Cholesterol 1,2,3 test kit will be packed to contain 20 individual tests per
kit. The materials going into each kit consists of
[*******************]
[**********************]
[*******************]
[**********************]
[*****************************]
[*********]
[***********************]
[************************]
[*******************]
[**********]
[*******]
[*******************]
[***************]
[******]
9
APPENDIX B
Certificate of Analysis
Product: [****************]
Cat. No.: [*******]
Lot No.:
-----------------------------------
Expiry Date:
-----------------------------------
Manufactured for: International Medical Innovations
Date of Manufacture:
-----------------------------------
------------------------------------- ----------------------------------- ---------------------- --------------------
[*********] [***************] [*************] [*********]
------------------------------------- ----------------------------------- ---------------------- --------------------
------------------------------------- ----------------------------------- ---------------------- --------------------
A. [***********] [******]
------------------ ------------------
- -
------------------------------------- ----------------------------------- ---------------------- --------------------
------------------------------------- ----------------------------------- ---------------------- --------------------
B. [********] [*******]
------------------
[*********] [*****]
- -
- -
------------------------------------- ----------------------------------- ---------------------- --------------------
------------------------------------- ----------------------------------- ---------------------- --------------------
C. [****************] [*******************
------------------ ------------------
********************
*******] - -
------------------------------------- ----------------------------------- ---------------------- --------------------
[**************************************************************************************]
Date [****************]
[*********************]
[*********************]
10
APPENDIX C
[*************************************************]
Note: Prices are subject to change due to [***********************************]
11
