EXHIBIT 10.74
This document contains confidential information which is not
being provided to the Public.
HEMOPHILIA PRODUCT
VOLUME COMMITMENT AGREEMENT
This Hemophilia Product Volume Commitment Agreement is made and entered
into this 19th day of December, 2001, by and between ▇▇▇▇▇▇ Healthcare
Corporation, a Delaware corporation, through its BioScience Division, with
offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred
to as "Baxter") and ▇▇▇▇▇, Inc. with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ #▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ (hereinafter referred to as "Purchaser"). Baxter and Purchaser are
collectively referred to hereinafter as the "Parties," or individually as a
"Party."
WHEREAS Baxter produces and distributes a number of therapeutic protein
products derived from blood plasma and recombinant sources for the treatment of
hemophilia (hereinafter and as defined below, "Therapeutic Products"); and
WHEREAS Baxter intends to appoint Hemophilia Specialty Pharmacy
Providers to distribute ▇▇▇▇▇▇'▇ Therapeutic Products to hemophilia patients and
provide essential services in support thereof; and
WHEREAS Purchaser has the management expertise and capital and will
acquire the facilities and systems required to distribute ▇▇▇▇▇▇'▇ Therapeutic
Products to hemophilia patients and provide essential services in support
thereof; and
WHEREAS Baxter is willing to commit a supply of Therapeutic Products to
Purchaser and to appoint Purchaser as a nonexclusive Hemophilia Specialty
Pharmacy Provider of its Therapeutic Products on the terms and conditions set
forth herein; and
WHEREAS Purchaser is willing to accept such appointment.
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereby agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms will have the
following meanings:
1.1 "Affiliate" means, with respect to any Person, any other Person (i)
that controls, is controlled by or is under common control with such
specified Person or (ii) which beneficially owns 50% or more of the
equity securities of such specified Person. For purposes of the
definition of Affiliate, the term "beneficially owns" means possesses,
directly or indirectly, the power to vote (or direct the voting of) or
dispose of (or direct the disposition of) an equity security. For
purposes of the definition of Affiliate, the term "control" (including
the terms "controls," "controlled by," and "under common control with")
means the possession, direct or
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indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.
1.2 "Base Level Product Volumes" means the annual volume of Recombinant
Hemophilia Product for each year as set forth on Schedule A.
1.3 "Competitor" means (i) those entities listed on Schedule B attached
hereto and (ii) any person or entity which either itself or through any
of its affiliates manufactures, or is actively seeking government or
regulatory approval to manufacture or market, any recombinant or plasma
derived therapeutic protein product for the treatment of hemophilia
that could reasonably be expected to serve as substitutes for Plasma
Based Hemophilia Products and Recombinant Hemophilia Product.
1.4 "Effective Date" means the date of this Agreement, as referenced in the
first paragraph of this Agreement.
1.5 "Government Program" means any purchasing program that includes
Therapeutic Products sponsored, financially supported or paid for, in
whole or in part, by (i) any federal, state or municipal government
agency, (ii) any covered entity eligible the price discounts pursuant
to Section 602 of the Veterans' Health Care Act of 1992, or (iii)
Medicaid, Medicare, Children's Medical Services or other government or
similar programs.
1.6 "Home Care Patients" means hemophilia and other patients who use or can
use Therapeutic Products and associated services by having such
products and services delivered to their homes or to such other
residence, office or other locations as they may specify.
1.7 "New Therapeutic Products" means therapeutic protein products
constituting substantial improvements to Therapeutic Products that
Baxter may introduce from time to time, as well as new therapeutic
protein products for the treatment of hemophilia that Baxter may
introduce from time to time.
1.8 "Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, trust, unincorporated
organization, governmental body or authority or any other entity.
1.9 "Plasma Based Hemophilia Products" means Hemofil M AHF and FEIBA VH
Anti-Inhibitor Coagulation Concentrate.
1.10 "Other Products" means commercially available Proplex T Factor IX and
Bebulin VH Factor IX Complex.
1.11 "Recombinant Hemophilia Product" means Recombinate rAHF.
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1.12 "Territory" means the United States excluding the Commonwealth of
Puerto Rico and other territories.
1.13 "Therapeutic Products" means Recombinant Hemophilia Product and Plasma
Based Hemophilia Products.
1.14 "Quarterly Base Level Product Volume" shall mean one-fourth of the Base
Level Product Volume for the then current calendar year.
2. APPOINTMENT AND NON-EXCLUSIVITY
2.1 Appointment. Subject to the terms and conditions contained herein,
Baxter hereby appoints Purchaser and Purchaser hereby accepts an
appointment as a nonexclusive Hemophilia Specialty Pharmacy Provider of
Therapeutic Products to Home Care Patients in the Territory. Purchaser
will sell and distribute Therapeutic Products purchased from Baxter
hereunder only to Home Care Patients for whom Purchaser holds an active
prescription and to whom Purchaser provides home care services for the
treatment of hemophilia. Purchaser will only sell and distribute
Therapeutic Products directly to Home Care Patients. Without ▇▇▇▇▇▇'▇
prior written consent, Purchaser will not, directly or indirectly, (i)
sell or distribute Therapeutic Products to other Persons for commercial
re-sale (including distributors and hospitals), (ii) barter or trade
Therapeutic Products, or (iii) sell or distribute Therapeutic Products
outside the Territory or otherwise make them available for export.
Purchaser represents and warrants that all of the entities to whom it
is currently providing Therapeutic Products for commercial resale and
for which Baxter has previously consented are set forth in Schedule D,
attached. Baxter hereby consents to Purchaser continuing to provide
Therapeutic Products to such entities until the earlier of i) the
expiration of the initial term of this agreement, or ii) the expiration
of such arrangements between Purchaser and the other entities listed on
Schedule D in accordance with their terms as of the effective date of
this agreement.
2.2 Non-Exclusivity. Purchaser's appointment under this Agreement as a
Hemophilia Specialty Pharmacy Provider is nonexclusive. Purchaser may
purchase therapeutic protein products for the treatment of hemophilia
from suppliers other than Baxter during the term hereof. Baxter may
sell Therapeutic Products to distributors or providers other than
Purchaser during the term of this Agreement and may sell or distribute
directly to users, subject to the provisions of Section 3.2 of this
Agreement. Baxter reserves the right to appoint other Hemophilia
Specialty Pharmacy Providers and to sell or distribute Therapeutic
Products to, without limitation, distributors, hospitals, wholesalers,
hemophilia treatment centers, hemophilia home care providers and other
third parties.
3. TERM AND TERMINATION
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3.1
3.2
3.3
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3.4
3.5
4. PRICING, PRICING PROTECTION, TERMS AND SUBSTITUTION
4.1 Prices. Purchaser will purchase Therapeutic Products for Home Care
Patients from ▇▇▇▇▇▇ and ▇▇▇▇▇▇ will sell Therapeutic Products for Home
Care Patients to Purchaser at the prices specified in Schedule C. The
prices specified in Schedule C will be in effect from the Effective
Date until December 31, 2002. Effective January 1, 2003, Baxter may
increase the prices specified in Schedule C for
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calendar year 2002 by up to five percent (5%). On January 1 and for
each subsequent year this Agreement remains in effect, Baxter may
increase the prices by up to five (5%) per cent over the prices for the
previous year except as provided in Section 4.2 below.
4.2 Pricing Protection. Beginning on January 1, 2002, ▇▇▇▇▇▇'▇ prices to
Purchaser for Recombinant Hemophilia Product under this Agreement will
not exceed the lowest prices charged by Baxter to any other third party
provider of Recombinant Hemophilia Product to Home Care Patients who
purchases similar volumes of Recombinant Hemophilia Product from Baxter
for Home Care Patients in similar circumstances on an annual basis. In
the event such prices to another third party provider in such similar
circumstances become more favorable, Baxter will adjust Purchaser's
pricing to such more favorable prices effective on a retroactive basis
to the date such more favorable prices went into effect and will
provide Purchaser with prompt notice of such adjustment. This Section
4.2 does not apply to the prices charged in connection with any
Government Program.
4.3 Terms. Baxter will provide Purchaser with an invoice for payment upon
the delivery of Therapeutic Products. Payment of an invoice in full
within thirty (30) days of the invoice date will entitle Purchaser to a
1% discount off the invoice price. Invoices will be paid in full not
later than thirty-one (31) days after the invoice date. If unpaid after
31 days of the invoice date, the invoice will be considered past due
and will bear a service charge at the rate of 1.0% per month (or the
highest amount allowed by law, if lower) of the invoiced amount.
4.4 Product Supply: Baxter shall ship the Therapeutic Products to
Purchaser, FOB Purchaser's facility, freight prepaid. Baxter shall ship
Purchaser's orders for Therapeutic Products within five (5) business
days after ▇▇▇▇▇▇'▇ receipt of Purchaser's orders. Baxter shall accept
returns of Therapeutic Products in accordance with ▇▇▇▇▇▇'▇ Returned
Good Policy attached hereto as Schedule E.
5. MINIMUM SUPPLY/PURCHASE COMMITMENTS
5.1 Recombinant Hemophilia Product Minimum Supply/Purchase Commitments. For
each year this Agreement remains in effect, Baxter will supply
Purchaser, and Purchaser will purchase from Baxter, the annual Base
Level Product Volumes of Recombinant Hemophilia Product set forth in
Schedule A for each year. At the end of any year that this Agreement is
in effect, if Purchaser's purchases have not met such minimum purchase
thresholds, Baxter shall provide Purchaser with written notice of the
unit amount of the shortfall. Purchaser shall have 30 days from receipt
of such notice to make such purchases of Recombinant Hemophilia Product
necessary to meet the minimum unit purchase requirements. In the event
Purchaser breaches this Agreement by failing to satisfy its unit
purchase commitments for Recombinant Hemophilia Product, as set forth
under this Section 5.1, then ▇▇▇▇▇▇,
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in addition to any other relief available to it, will be entitled to
monetary damages for lost profits for such shortfall. In the event
Baxter fails to make delivery or repudiates or Purchaser rightfully
rejects or justifiably revokes acceptance, then with respect to the
Therapeutic Products involved, Baxter shall either i) offer substitute
therapeutics (recombinant derived product for Recombinant Hemophilia
Products, plasma derived product for Plasma Based Hemophilia Products),
as an accommodation, or ii) Baxter shall pay to the Purchaser an amount
equal to ten percent (10%) of the then applicable invoice price for the
Therapeutic Products involved as liquidated damages, which figure shall
include both incidental and consequential damages. Baxter shall in each
quarter tender delivery and Purchaser will purchase at least eighty
percent (80%) of the then applicable Quarterly Base Level Product
Volume of Recombinate Hemophilia Product for such quarter.
5.2 Adjustments to Base Level Product Volumes. Within five (5) business
days after each calendar quarter, Purchaser will provide to Baxter a
written statement of its Base Level Product Volumes adjusted to include
purchases of Recombinant Hemophilia Product attributable to entities
acquired by Purchaser during the immediately prior quarter. If the
acquired entity either has recorded Recombinant Hemophilia Product
sales or a Base Level Product Volume, Purchaser may elect to receive up
to 110% of the acquired entities' purchases of Recombinant Hemophilia
Product in the most recent calendar year prior to their acquisition by
Purchaser. The total unit volume provided to Purchaser will be
calculated by identifying recorded sales made by Baxter to the acquired
entity up to the date of acquisition in the current year and
subtracting this unit volume from the number of units Purchaser elected
to receive. This unit volume will be incorporated into the Base Level
Product Volume for purposes of this Agreement. For acquisitions made
prior to December 31, 2001, the Base Level Product Volumes adjustment
will be the in the amount up to 135% of the acquired entity's 2000
calendar year purchases of Recombinant Hemophilia Product.
5.3 Additional Supply. If Purchaser's forecasted demand for Recombinant
Hemophilia Product exceeds the Base Level Product Volumes, (subject to
terms of Sections 6.1 and 10.1), Baxter will use reasonable efforts to
provide available Recombinant Hemophilia Product to Purchaser to meet
this excess forecasted demand, on a priority basis. As supply
increases, Baxter will endeavor to make additional quantities of
Recombinant Hemophilia Product available to Purchaser to meet increased
demands arising from the conversion of existing patients to Recombinant
Hemophilia Product, from the addition of new patients or from the
increased usage of product by existing patients due to prescribed
prophylactic dosing or other existing patient requirements. This
priority commitment shall be on a pro-rata basis among (i) Hemophilia
Specialty Pharmacy Providers, (ii) firm product supply commitments made
to customers purchasing under committed volume contracts in effect as
of the Effective Date ("Prior Committed Volumes"), (iii) product supply
commitments required by any Government Program ("Government Program
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Committed Volumes"), and (iv) volume commitments/obligations to PHS
customers ("PHS Committed Volumes"). In order to be eligible for
priority under this Section 5.3, Purchaser must notify Baxter of its
desire to purchase Recombinant Hemophilia Product in amounts exceeding
the Base Level Product Volumes.
5.4 Supply Constraints. In the event a Force Majeure event described in
Section 10.1 hereof requires Baxter to limit deliveries and
redistribute available supply of Recombinant Hemophilia Product, then
Baxter will be relieved of its Base Level Product Volumes commitment.
In such an event, Baxter will first make Recombinant Hemophilia Product
available to meet Purchaser and other Hemophilia Specialty Pharmacy
Providers' Base Level Product Volumes, the Prior Committed Volumes, the
Government Program Committed Volumes and the PHS Committed Volumes (all
four collectively referred to as "Firm Commitments"). If a Force
Majeure event prevents Baxter from supplying the Firm Commitments, then
▇▇▇▇▇▇'▇ available supply will be made available on a pro-rata basis to
(i) customers with Firm Commitments, (ii) ▇▇▇▇▇▇'▇ emergency needs
inventory, and (iii) customers with previously accepted firm orders for
delivery in that quarter. If ▇▇▇▇▇▇'▇ supply of Recombinant Hemophilia
Product to Purchaser is reduced as a result of pro-rata distribution
pursuant to this Section 5.4, Purchaser's commitments to purchase
Recombinant Hemophilia Product set forth in Sections 5.1 will be
reduced by an equivalent amount.
5.5 Hemofil M AHF Product Supply/Purchase Commitments. Purchaser commits to
the following minimum purchase requirements for Hemofil M AHF Product:
a. Hemofil M AHF Product. For each year this Agreement remains in
effect, Baxter will supply Purchaser, and Purchaser will
purchase from Baxter, a minimum, the stated quantity of units
of Hemofil M AHF product as specified in Schedule C here to.
b. After Acquired Businesses. Purchaser's purchase commitments
with respect to Hemofil M AHF product under this Section 5.5
will include the requirements of any person hereinafter
acquired by Purchaser with such inclusion beginning ninety
(90) days following the date of their acquisition by
Purchaser.
c. Notice. At the end of any year that this Agreement is in
effect, if Purchaser's purchases of Hemofil M AHF product have
not met such minimum purchase thresholds, Baxter shall provide
Purchaser with written notice of the unit amount of the
shortfall. Purchaser shall have 30 days from receipt of such
notice to make such purchases necessary to meet the minimum
purchase requirements.
d. Purchase Commitment Shortfall. In the event Purchaser breaches
this Agreement by failing to satisfy its minimum purchase
commitments for
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Hemofil M AHF product, as set forth under this Section 5.5.
then Baxter, in addition to any other relief available to it,
will be entitled to monetary damages for lost profits for such
shortfall. In the event Baxter fails to make delivery or
repudiates or Purchaser rightfully rejects or justifiably
revokes acceptance, then with respect to the Hemofil M AHF
product involved, Baxter shall either i) offer substitute
therapeutics (plasma derived product for Hemofil M AHF), as an
accommodation, or ii) Baxter shall pay to the Purchaser an
amount equal to ten percent (10%) of the then applicable
invoice price for the Hemofil M AHF product involved as
liquidated damages, which figure shall include both incidental
and consequential damages.
5.6 New Therapeutic Products. Baxter will make available to Purchaser a
preferred supply of all New Therapeutic Products at the same time and
on substantially the same terms and conditions that it makes New
Therapeutic Products available to Hemophilia Specialty Pharmacy
Providers, The Parties will negotiate in good faith terms and
conditions to add New Therapeutic Products to this Agreement upon their
introduction including mutually agreeable minimum supply and purchase
commitments. Baxter will use commercially reasonable efforts to make
additional quantities of New Therapeutic Products available to
Purchaser to meet increased demands arising from the conversion of
existing patients to Therapeutic Products, from the addition of new
patients or from the increased usage of product by existing patients
due to prescribed prophylactic dosing or other existing patient
requirements.
6. PRODUCT FORECASTS, ORDERING PROCEDURES, SALES REPORTING, DATA
COLLECTION AND RECORD KEEPING
6.1 Forecast. Within five (5) business days after the Effective Date of
this Agreement, and at least forty-five (45) days prior to each
succeeding calendar quarter, Purchaser will provide Baxter with a
written forecast of its anticipated purchases of each Therapeutic
Product for the next four (4) quarters of this Agreement. Baxter will
use such forecasts submitted by Purchaser in production planning,
provided, however, that in no event will any such forecast hereunder
constitute an order, create any right or expectation in Purchaser or be
binding in any respect upon Baxter.
6.2 Redistribution Data. Purchaser will use reasonable efforts to provide
Baxter on a monthly basis non-patient specific clinical information
regarding Therapeutic Product utilization by Therapeutic Product and
number of units dispensed by prescribing physician's zip code in the
previous month, within five (5) business days of month end. Baxter
agrees that such data will not be disclosed or distributed to any
outside or third party without Purchaser's written permission and, upon
Purchaser's prior written request, any reports compiled by Baxter
solely from Purchaser data will be provided to Purchaser for their
internal review.
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6.3 Record Keeping. Purchaser will retain sales transaction data for
Therapeutic Products for a three-year period, such period to commence
with the date of individual sales.
7. REGULATORY RESPONSIBILITY
7.1 Labeling. Baxter will be responsible at its sole expense for complying
with all applicable regulatory requirements relating to the manufacture
and labeling of Therapeutic Products. Baxter will provide all artwork,
labeling, product inserts and packaging for Therapeutic Products.
Purchaser will not change the artwork, labels, inserts or packaging for
Therapeutic Products without ▇▇▇▇▇▇'▇ prior written consent. Each use
of a trademark, trade name or logo, owned or used by Baxter or its
affiliated companies, on or in connection with Therapeutic Products
(other than Purchasers trademarks, trade names and logos) will inure to
the benefit of Baxter and its parent company. Should any such use vest
in Purchaser any rights in such a trademark, trade name or logo,
Purchaser will transfer such right to Baxter or its designee upon
▇▇▇▇▇▇'▇ request. Except as provided in this Agreement, Purchaser will
not use any trademark, trade name, or logo used or claimed by Baxter or
any confusingly similar trademark, trade name or logo during or after
the term of this Agreement. Purchaser will be responsible at its sole
expense for complying with all applicable regulatory requirements
imposed on Purchaser and relating to Purchaser's possession,
distribution and sale of Therapeutic Products.
7.2 Recalls. If requested to do so in writing by Baxter, Purchaser will
cooperate fully with Baxter in recalling or returning any Therapeutic
Product that Baxter believes should not be sold or used. Purchaser will
use reasonable efforts to maintain complete and accurate records of all
Therapeutic Products sold or used by it in order to facilitate
compliance with this Section 7.2. Purchaser will comply with ▇▇▇▇▇▇'▇
written instructions concerning communications with Purchaser customers
or the public regarding the procedures to be observed during a recall
or return of any Therapeutic Product. Baxter will reimburse Purchaser
for the reasonable direct costs of a product recall, including the cost
of notifying customers; the cost of collection and return of any
recalled Therapeutic Product up to a maximum of the price Purchaser
paid Baxter for Therapeutic Product; and actual shipping costs incurred
from Purchaser's facility to ▇▇▇▇▇▇'▇ facility.
7.3 Complaints. Purchaser will notify Baxter promptly of any complaint it
receives concerning any Therapeutic Product, or any other information
it receives relating to the safety and effectiveness of any Therapeutic
Product.
7.4 Licenses and Records. Purchaser will maintain all pharmacy licenses
necessary for the purchase and dispensing of prescription therapeutics.
Upon request, Purchaser will forward a copy of such licenses to Baxter.
Purchaser will ship or dispense Therapeutic Products pursuant to a
prescription or authorized purchase order solely
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in compliance with applicable federal or state laws, regulations and
orders including pharmacy laws. Purchaser will maintain such pharmacy
records as are required by applicable federal and state law,
regulations and orders.
8. WARRANTY
8.1 Product Warranty. Baxter warrants that any therapeutic product pursuant
to this Agreement which includes without limitation Therapeutic
Products, Other Products and New Therapeutic Products, which is shipped
or delivered to Purchaser will not, at the time of shipment by Baxter,
be adulterated or misbranded within the meaning of the Federal Food,
Drug and Cosmetic Act, as amended, nor will such therapeutic product be
an article which may not, under the provisions of Sections 404 and 505
of said Act, be introduced into interstate commerce. Baxter further
warrants that all therapeutic products delivered to Purchaser will have
been manufactured in accordance with current Good Manufacturing
Practices promulgated by the federal Food and Drug Administration.
Baxter and its affiliates represent and warrant that all therapeutic
products delivered to Purchaser when stored and used in accordance
with the directions on the labeling are fit for the purposes and
indications described in the labeling unless the therapeutic product is
used in accordance with its instructions, these warranties are void and
of no effect. EXCEPT FOR THE WARRANTIES PROVIDED IN THIS SECTION 8.1,
BAXTER DISCLAIMS ALL WARRANTIES (EXPRESS OR IMPLIED) WITH REGARD TO THE
PRODUCT, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. BAXTER AND ITS AFFILIATES SOLE
OBLIGATION AND PURCHASER'S EXCLUSIVE REMEDY FOR BREACH OF ANY WARRANTY
SHALL BE AT ▇▇▇▇▇▇'▇ OPTION TO REPAIR OR REPLACE THE THERAPEUTIC
PRODUCT. NEITHER BAXTER NOR ITS AFFILIATES SHALL BE LIABLE FOR
PROXIMATE, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES.
8.2 Expiration Dates. All Therapeutic Products and Other Products sold to
Purchaser will have expiration dates at least six (6) months after the
shipping date unless otherwise approved in writing by Purchaser.
9. INDEMNIFICATION
9.1 ▇▇▇▇▇▇'▇ Indemnification of Purchaser. Baxter will at all times during
the term of this Agreement and thereafter defend, indemnify and hold
Purchaser and its officers, directors, agents and employees harmless
from and against any and all claims, suits, damages, liabilities, costs
and expenses, including but not limited to court costs and reasonable
attorneys' fees, incurred in connection with any third-party claim
arising out of this Agreement, including, without limitation, the use
of any Therapeutic Product by an end-user, except to the extent caused
by (i) the
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negligence or intentional misconduct of Purchaser or any of its
officers, directors, agents or employees: (ii) breach by Purchaser of
any of the terms of this Agreement: or (iii) acts of Purchaser or any
of its officers, directors, agents or employees which are outside the
scope of this Agreement.
9.2 Purchaser's Indemnification of Baxter. Purchaser will at all times
during the terms of this Agreement and hereafter defend, indemnify and
hold Baxter and its officers, directors, agents and employees harmless
from and against any and all claims, suits, damages, liabilities, costs
and expenses, including but not limited to court costs and reasonable
attorneys' fees, incurred in connection with any third-party claim
arising out this Agreement caused by (i) negligence or intentional
misconduct of Purchaser or any of its officers, directors, agents or
employees; (ii) breach by Purchaser of any of the terms of this
Agreement; or (iii) acts of Purchaser or any of its officers,
directors, agents or employees which are outside the scope of this
Agreement.
9.3 Indemnification Procedure. A Party seeking indemnification under this
Section 9.3 will give prompt notice of the claim to the other Party
and, provided that the indemnifying Party is not contesting the
indemnity obligation, will permit the indemnifying Party to control any
litigation relating to such claim and disposition of any such claim
provided that the indemnifying Party will act reasonably and in good
faith with respect to all matters relating to the settlement or
disposition of any claim as the settlement or disposition relates to
the parties being indemnified under this Section 9.3 and the
indemnifying Party will not settle or otherwise resolve any claim
without the prior written consent of the indemnified Party. If the
indemnified party does not consent to a proposed settlement, the
indemnified party agrees to assume the full cost of its own defense of
the action, and may employ its own counsel at its sole cost. The
indemnified Party will cooperate with the indemnifying Party in its
defense of any claim for which indemnification is sought hereunder.
9.4 Patent Indemnification. Baxter will indemnify Purchaser for all losses
arising from, and defend Purchaser against, all charges that
Purchaser's sale or use of the Products in accordance with their
labeling infringes the patent(s) of a third party. Baxter will bear
sole expense of any litigation arising from such alleged infringement
and will have sole discretion and control with regard to such
litigation. Purchaser may choose to be represented by its own counsel
in any such litigation but such representation will be at Purchaser's
sole expense.
9.5 Compliance With Law. Baxter will fully and accurately report any
discounts on any invoice, coupon, or statement submitted to Purchaser.
Purchaser acknowledges that the dollar value of any products or
services which Purchaser receives but does not pay for will be a
"discount or other reduction in price" and may be subject to the
disclosure requirements of Section 1128(b)(3)(A) of the Social
Security Act, 42
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U.S.C. Section 1320a-7b(b)(3)(A). Purchaser will disclose this discount
or reduction in price under any state or federal program that provides
cost or charge-based reimbursement to the participating institution for
products or services covered in this Agreement.
10. FORCE MAJEURE
10.1 Nonperformance of either Party will be excused to the extent the
nonperforming Party is prevented from performing its obligations under
this Agreement by extraordinary events, including acts of God, fires,
earthquakes, strikes and labor disputes, acts of war, civil unrest, the
acts or intervention of any governmental or regulatory authority,
material changes in regulatory, product performance or safety
requirements, reasonable and necessary manufacturing adjustments, slow
downs and stoppages, facility changes and modifications or a shortage
of supplies or raw materials. The nonperforming Party will be excused
from performance for the duration of such events, will promptly notify
the other Party of the reasons for non-performance and will diligently
and continuously attempt to resume its performance.
11. JOINT REVIEW MEETINGS
11.1 Baxter and Purchaser agree to cooperate in good faith to administer the
terms of this Agreement. To facilitate that cooperation, each Party
will appoint senior management representative(s) to meet twice each
year to discuss means for successfully administering this Agreement.
The schedule, agendas and procedures for such meetings will be mutually
agreed upon and each Party will be responsible for its own expenses
incurred from such meetings.
12. AUDIT PROCEDURE
12.1 In the event either Party to this Agreement has a reasonable basis to
question the accuracy of any representation, report or information
provided by the other Party pursuant to this Agreement or the other
Party's compliance with any provision hereof, then the Party
questioning the accuracy of the representation, report or information
or the other Party's compliance with any provision hereof may propose
in writing to the other Party that an independent accountant,
reasonably acceptable to the other, perform an audit to determine
compliance with such provision or the accuracy of the representation,
report or information. The accountant will provide the Party subject to
the audit with appropriate assurances that all information it reviews
and receives pursuant to the audit will be maintained in complete
confidence and not disclosed to either Party or any other person or
entity without the express written permission of the Party subject to
the audit. Upon receipt of such assurances, the Party subject to the
audit will permit the accountant to conduct an audit of the pertinent
records to assess, as applicable, compliance with such
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provision or the accuracy of the representation, report or information.
Notice of an audit under this Section 12.1 shall be given at least
thirty (30) days in advance of said audit and shall include a detailed
description of the proposed scope of the audit. At the conclusion of
the audit, the accountant will advise the parties whether such
provision of the agreement is being complied with or the
representation, report or information was accurate, and if not, what,
in its judgment, constitutes noncompliance or what the representation,
report or information should have been. The entire cost of the audit
will borne by the Party requesting the audit. In the event the
accountant determines and issues a written report that a Party is
noncompliant with a provision hereof or the representation, report or
information was inaccurate, then the parties shall review such report
and discuss in good faith appropriate revisions to the representation,
report or information called into question that was the subject of the
audit or appropriate actions to remedy such noncompliance. Anything to
the contrary in this Section 12.1 notwithstanding, a Party may invoke
the audit protection provided by this Section 12.1 no more than once
each year during the term of this Agreement.
13. ARBITRATION
13.1 In the event of any dispute, controversy or claim arising out of or
relating to this Agreement or to a breach hereof, including
interpretation, performance or termination, the parties agree to
proceed as follows:
a. Mediation/Third Party Accountant. The parties will commence
good faith discussions between their designees toward
resolution of such issues. If, after thirty (30) days, the
parties are unable to reach a resolution, the parties will
within fifteen (15) days make a determination as to whether
such issue is to be resolved by a third party accountant. If
the parties determine that such issue is to be resolved by a
third party accountant, then the issue will be submitted to a
firm of independent public accountants with substantial
experience in auditing healthcare companies (the "Third Party
Accountant") selected by the independent public accountants of
Baxter and Purchaser to resolve the dispute. The Third Party
Accountant's resolution of the issue will be final and binding
upon the parties hereto. All fees and expenses of the Third
Party Accountant will be shared equally between the parties.
b. Arbitration. Should the parties disagree upon submission of
the issue to the Third Party Accountant or make a
determination that the issue is not proper for resolution by a
Third Party Accountant, such issues will be finally resolved
by binding arbitration in accordance with the Center for
Public Resources ("CPR") Model Procedure and the CPR
Non-Administered Arbitration Rules in effect on the date of
this Agreement. The binding arbitration hereunder will be by
three independent and impartial arbitrators, one of which will
be selected by Baxter, one of which will be selected by
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12/28/2001 Page 14
Purchaser and one of which will be selected by the other two
chosen arbitrators. The arbitration will be governed by the
United States Arbitration Act, 9 U.S.C. Sections 1-16, and
judgment upon the award rendered by the arbitrator(s) may be
entered by any court having jurisdiction thereof. The place of
the arbitration will be Chicago, Illinois. The arbitration
will be no more than three full days in length and take place
within one hundred and twenty (120) days of the initiation of
arbitration. The expense of the arbitration (including,
without limitation, the award of attorneys' fees to the
prevailing party) will be paid as the arbitrators determine.
The arbitrators are not empowered to award punitive or
exemplary damages and each party hereby irrevocably waives any
right to recover such damages.
c. Discovery. In the event of binding arbitration, the parties
agree that limited discovery will be allowed in accordance
with the Federal Rules of Civil Procedure, Rule 26(a)(1)-(3),
as in effect on the Effective Date, which disclosure will be
made within sixty (60) days of the initiation of arbitration.
All issues regarding compliance with this mandatory disclosure
will be decided by the arbitrator(s) pursuant to the Federal
Rules of Civil Procedure. 1.2.
d. Provisional Remedies. The procedures specified in this
Section 13.1 will be the sole and exclusive procedures for the
resolution of disputes between the parties arising out of or
relating to this Agreement; provided, however, that a party,
without prejudice to the above procedures, may file a
complaint to seek a preliminary injunction or other
provisional judicial relief. Despite such action the parties
will continue to participate in good faith in the procedures
specified in this Section 13.1.
14. NOTICES
14.1 Notices pursuant to this Agreement will be in writing and will be
effective when delivered personally, delivered via telefax receipt
acknowledged, or upon receipt if sent via United States mail or courier
service and delivered to:
If to Purchaser:
Coram
▇▇▇▇ ▇▇▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX
Attention: President
VC Contract Confidential
12/28/2001 Page 15
with a copy to:
Coram
▇▇▇▇ ▇▇▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Law Department
Purchaser shall designate in writing (and shall provide
written updates noting any changes) the person at Purchaser
who is responsible for Therapeutic Product supply matters.
If to Baxter:
▇▇▇▇▇▇ Healthcare Corporation
BioScience
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX 847.940.
Attention: President
with a copy to:
▇▇▇▇▇▇ Healthcare Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX ▇▇▇.▇▇▇.▇▇▇▇
Attention: General Counsel
15. ENTIRE AGREEMENT
15.1 This Agreement constitutes the entire and only agreement between the
Parties relating to the subject matter hereof, and all prior
negotiations, understandings, representations, or agreements between
the Parties are hereby superseded. None of the terms or conditions of
this Agreement will be deemed to be waived or amended unless a written
waiver or amendment that specifically references this Agreement has
been signed by the Party to be bound and delivered to the other Party.
Any such waiver will not be deemed a waiver of any subsequent event, or
a continuing waiver.
16. ASSIGNMENT
16.1 This Agreement will be binding upon and inure to the benefit of the
Parties and their successors and assigns. Any assignment of this
Agreement by one Party
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(other than to the purchaser of substantially all of the assets of that
Party to which this Agreement relates) requires the written consent of
the other Party. Such consent will not be unreasonably withheld. This
Section 16.1 will not affect ▇▇▇▇▇▇'▇ right to terminate this Agreement
under Section 3.5 hereof in the event of a Change in Control as therein
defined.
17. GOVERNING LAW
17.1 This Agreement will be governed by the laws of the State of Illinois
applicable to contracts to be performed in Illinois.
18. SEVERABILITY
18.1 If any portion of this Agreement is determined by a court of competent
jurisdiction to be violative of an applicable law or regulation, only
that portion of this Agreement will be invalidated. All other portions
of this Agreement will remain in full force and effect.
19. CONSTRUCTION AND HEADINGS
19.1 The Parties acknowledge and agree that they participated equally in the
preparation of this Agreement and neither Party will be treated as the
author for purposes of resolving any ambiguity. The headings of the
Paragraphs of this Agreement are for reference only and will have no
effect on interpretation of the terms and conditions of this Agreement.
20. ACCESS TO BOOKS AND RECORDS
20.1 The Panics agree, to the extent necessary to permit receipt of
reimbursement for services under this Agreement by either Baxter or
Purchaser, to make available to the Secretary of Health and Human
Services, the Comptroller General of the General Accounting Office, or
their authorized representatives, this Agreement and any books,
documents and records in their possession relating to the nature and
extent of the cost of services hereunder fix a period of for (4) years
after the provision of said services. Each Party will protect the
confidentiality of any patient medical records and to comply with all
laws and regulations relating to such records.
21. CONFIDENTIALITY
21.1 The Parties shall take all reasonable steps and do all things
reasonably necessary to ensure that any information relating to the
Therapeutic Products, including the terms of this Agreement or to the
business of the disclosing Party ("Confidential Information"), that is
acquired from the disclosing party shall not be disclosed or made use
of outside this Agreement. The Parties acknowledge that ▇▇▇▇▇▇'▇ notice
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12/28/2001 Page 17
under Section 3.2 and/or Purchaser's notice under Section 3.5 may
constitute material non-public information. The Parties agree to:
(i) keep such information confidential, (ii) limit its representatives
who have access to this information, (iii) inform the representatives
that do have access to this information of the confidential nature of
this information, and (iv) be responsible for the breach of these
confidentiality obligations by any if its representatives. Information
shall not be deemed confidential to the extent it:
(i) is already in the receiving party's possession, provided
that such information is not known by the receiving party's to
be subject to another confidentiality agreement with the
disclosing party, or
(ii) becomes generally available to the public other than as a
result of a disclosure by the receiving party or its
representatives in violation of this Agreement, or
(iii) becomes available to the receiving parry on a
non-confidential basis from a source other than the disclosing
party or its representatives, provided that such source is not
known by the receiving party to be bound by a confidentiality
agreement with the disclosing party.
The foregoing shall not limit Purchaser's disclosure of the cost of
Therapeutic Products or the term of this Agreement in connection with
claims for reimbursement or payor audits. In no event shall Baxter use
any Confidential Information of Purchaser in connection of the sale or
distribution of Therapeutic Products by Baxter to Home Care Patients.
The foregoing shall not apply to information which is required to be
disclosed pursuant to court order or which in the written opinion of
legal counsel is required to be disclosed pursuant to federal or state
law or regulation (including, without limitation, securities laws);
provided that a reasonable opportunity is afforded the disclosing Party
to challenge the requirement for such disclosure and/or request
confidential treatment. This Section 21.1 shall survive any termination
of this Agreement for a period of three (3) years.
22. RELATIONSHIP
22.1 Neither Party is in any way the legal representative or agent of the
other, nor authorized or empowered to assume any obligation of any
kind, implied or expressed, on behalf of the other Party, without the
express written consent of the other.
23. NON-SOLICITATION OF EMPLOYEES
23.1 Neither Baxter BioScience North America Region nor Purchaser shall
during the term of this agreement and for a period of one (1) year
after its expiration or early
VC Contract Confidential
12/28/2001 Page 18
termination directly or indirectly solicit the employees of the other
for employment or consultation with respect to the sale or provision of
homecare services involving the Therapeutic Products. To the extent
that either party hires any former employee of the other, then the
party hiring such employee shall not induce or otherwise attempt to
compel the employee, either directly or otherwise, to disclose any
confidential or proprietary information of his former employer,
including but not limited to patient information, pricing, and customer
data.
24. SUBSTITUTED AGREEMENT
24.1 This agreement is in substitution of the agreement between ▇▇▇▇▇▇
Healthcare Corporation ("Baxter") and ▇▇▇▇▇ under date of January 1,
2001, and which term was to expire on December 31, 2001 ("the former
Agreement"). In consideration of this agreement, Baxter and Coram each
shall be relieved and discharged from any and all further obligations
to perform under the former Agreement and shall be fully relieved of
further liability to the other party arising out of the former
Agreement from and after December 14, 2001. This shall not terminate or
otherwise impair the obligations of Baxter and ▇▇▇▇▇ to the other for
services performed or unpaid invoices for deliveries made prior to
December 31, 2001.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives:
CORAM, INC. ▇▇▇▇▇▇ HEALTHCARE CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇▇
--------------------------- -----------------------------
Title: Senior Vice President MM Title: VP/GM
------------------------ --------------------------
Date: 12/28/01 Date: 1/7/02
------------------------- ---------------------------
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SCHEDULE A
Recombinant Hemophilia Product
Base Level Product Volumes
Year Base Level Volumes (In Units)
---- -----------------------------
2001
2002
2003
2004
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SCHEDULE B
Competitors
Alpha Therapeutics (including Affiliates, successors and assigns)
American Red Cross (including Affiliates, successors and assigns)
Aventis Behring (including Affiliates, successors and assigns)
Bayer Corporation (including Affiliates, successors and assigns)
CSL/ZLB (including Affiliates, successors and assigns)
Genetics Institute (including Affiliates, successors and assigns)
Novartis (including Affiliates, successors and assigns)
Novo Nordisk (including Affiliates, successors and assigns)
Octapharma (including Affiliates, successors and assigns)
VC Contract Confidential
12/28/2001 Page 21
SCHEDULE C
PRICES
IN EFFECT FROM EFFECTIVE DATE THROUGH DECEMBER 31, 2001
THERAPEUTIC PROTEIN LIST NUMBER PRICE/UNIT
------------------- ----------- ----------
Factor VIII Hemofil* M AHF 060-792:060-793:060-795
Factor VIII Recombinate* rAHF 060-351:060-352:060-353
FEIBA** VH Anti-Inhibitor 922204
Coagulation Concentrate
IN EFFECT BEGINNING JANUARY 1, 2002 THROUGH DECEMBER 31, 2002
PRICES AND VOLUME COMMITMENTS
VOLUME
THERAPEUTIC PROTEIN LIST NUMBER PRICE/UNIT COMMITMENT
------------------- ----------- ---------- ----------
Factor VIII Hemofil* M AHF 060-792:060-793:060-795
Factor VIII Recombinate* rAHF 060-351:060-352:060-353
FEIBA** VH Anti-Inhibitor 922204
Coagulation Concentrate
Bebulin VH Factor IX Complex 924402
Proplex T Factor IX 060-739
----------
* Hemofil, Proplex and Recombinate are trademarks of ▇▇▇▇▇▇ International Inc.
Hemofil and Proplex are registered with the US Patent and Trademark Office.
** FEIBA and Bebulin are trademarks of ▇▇▇▇▇▇ ▇▇ and are registered with the
US Patent and Trademark Office.
SCHEDULE D
PURCHASER COMMERCIAL RESALE ACCOUNTS
SCHEDULE E
BAXTER RETURNED GOODS POLICY
Baxter can accept for credit only those Therapeutics and related devices, which
do not perform satisfactorily under the specified condition, Therapeutics and
related devices which may have been damaged during transportation, or which
Customer may have received in error. Due to the biological nature of the
Therapeutics and related devices and the government regulations involved, return
of the Therapeutics and related devices must be authorized before any returns
will be accepted. Customer shall contact Baxter Customer Service for
instructions on the return procedure to be followed.