EXHIBIT 10.279
DISTRIBUTION, STORAGE, DATA AND INVENTORY MANAGEMENT SERVICES AGREEMENT
This Distribution, Storage, Data and Inventory Management Services
Agreement ("Agreement") is entered into as of _______________ (the "Effective
Date") by and between Ligand Pharmaceuticals Incorporated, a Delaware
corporation with its principal place of business located at 00000 Xxxxxxx Xxxxxx
Xxxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000 ("Ligand"), and ________________ with its
principal place of business located at _____________ ("Distributor").
RECITALS
WHEREAS, the parties wish to provide for certain additional distribution,
storage, data and inventory services to Ligand, including
certain-product-specific services to be provided monthly.
NOW THEREFORE, in consideration of the foregoing, the mutual
representations, warranties and covenants contained in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
ARTICLE 1
Definitions
1.1. "AGGREGATE INVENTORY" means, at any given time, the total of saleable
Products in units that Distributor has on hand at all of its storage and/or
distribution facilities and that Distributor has on order from Ligand.
1.2. "BASE SERVICES" means the value-added processing and data services that
Distributor will provide as set forth in paragraph 2.1.
1.3. "CONFIDENTIAL INFORMATION" means the confidential information described in
Section 4.2.
1.4. "AVERAGE WEEKLY MOVEMENT" means, at any given time, the total quantity of
Products in units (by NDC number) sold by Distributor to Customers over the
immediately preceding thirteen (13) weeks divided by thirteen (13).
1.5. "CUSTOMERS" means the purchaser of Products from Distributor in the United
States.
1.6. "EFFECTIVE DATE" means the first date appearing above.
1.7. "INVENTORY AND SALES REPORTS" means the reports described in Sections 2.21
(C).
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1.8. "ON HAND INVENTORY" means saleable Product in Distributor's individual
distribution centers.
1.9. "ON ORDER INVENTORY" means Distributor's unfilled orders of Product from
Ligand.
1.10. "NEW PRICE" means the price charged by Ligand to its wholesale customers
for Products from and after the effective date and time of a price change
instituted by Ligand at any time following the Effective Date of this
Agreement.
1.11. "OLD PRICE" means the price charged by Ligand to its wholesale customers
immediately preceding the institution of a New Price.
1.12 "PRODUCTS" means the FDA approved pharmaceutical products listed in
Attachment A.
ARTICLE 2
Purchasing and Inventory
2.1. Base Distribution and Inventory Management Services. - Distributor agrees
to provide the following "Base Services" to Ligand for products identified
on Attachment A:
- Daily consolidated deliveries to providers
- Emergency shipments to providers 24/7/365
- Returns and Recall processing
- Customer Service for those end users serviced by Distributor
- Consolidated accounts receivable management
- Contract and Chargeback administration, consolidation and
processing
- Licensed, environmentally controlled, PDMA compliant, secure
facilities for product storage, appropriate inventory rotation
and distribution
Ligand shall pay Distributor for the Base Services as set forth in
Attachment A.
2.2 Additional Distribution, Storage, data and Inventory Management Services. -
In addition to the "Base Services" Distributor agrees to provide to Ligand
the following Distribution and Inventory Management Services which it
desires:
2.2.1 Inventory Management
Inventory Levels & Storage. During the term of this Agreement,
Distributor will maintain an aggregate inventory level of Ligand
Products, as specified on Attachment A. Compliance with this inventory
level will be measured on the last working day of each month
("Compliance Measurement Date"). Orders may be placed as needed,
provided that orders necessary to reach the established inventory
level in any month will be placed and received by Ligand no later than
10 working days prior to the Compliance Measurement Date for that
month.
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Product Availability. Distributor will work with Ligand to minimize
product shortages and maximize product availability by agreeing to the
following:
a. Distributor will institute an automated balancing system on
Ligand Products in order to optimize the use of existing
inventories across the entire Distributor network, including
brokerage. This will be done using parameters agreed upon by
Distributor and Ligand.
b. During backorder situations and limited product availability
and upon Ligand's request, Distributor will implement more
frequent order and receiving cycles to help reduce inventory
requirements.
2.2.2 Special Handling
Special Handling Distributor will provide for the special handling
required for products identified in Schedule A. These requirements
include, but are not limited to frozen product storage, special
shipping and/or packaging, and CII vault storage
2.2.3 Data Services
A. Inventory and Sales Reports. Distributor shall prepare inventory
reports detailing the status of its Aggregate Inventory of
Products and movement of Products by NDC number ("Inventory and
Sales Reports") and, for the duration of this Agreement, provide
Ligand with such Inventory Reports (852's) weekly and Sales
Reports (867's) weekly. All such Inventory and Sales Reports
shall be transmitted in EDI format within 7 days of the end of
each week pursuant to this section and shall include such
information as reasonably requested by Ligand, including but not
limited to the following:
On Hand Inventory level by distribution center; and On Order
Inventory level by distribution center; and Sales out by
distribution center
Distributor may, due to contractual requirements, be required to
block certain data in the 867's that discloses Customer identity.
This may include Customer name and DEA number, and any other data
that would identify a Customer. In no event will Distributor be
required to provide Customer identifying information to Ligand in
the event it is contractually prohibited from doing so.
Distributor Inventory and Sales Reports shall be transmitted to
Ligand in an EDI 852 and EDI 867 format respectively.
Within thirty (30) days after entering into this Agreement, the
parties shall examine and test the capability of their respective
EDI systems and complete implementation of a mutually agreeable
system whereby transfers of information can be made effectively
on a consistent basis. In the event that critical internal
support systems and electronic communication links including
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EDI, are not available for five (5) consecutive business days,
the parties will cooperate to promptly implement substitute
procedures to document the information customarily sent by EDI
and prevent interruptions to each other's business.
B. Returns, Chargebacks and order overage/shortage reconciliation
Distributor will process and provide sufficient documentation to
support any claims as defined below. If a dispute occurs
concerning a claim for payment then the disputed invoices/claims
will be resolved within 90 calendar days after the date of
receipt of the claim. Ligand will not be responsible for
insufficiently documented claims or disputed claims not resolved
with such 90 days. Non-disputed claims will be processed under
normal provisions.
Returns - Documentation will include either return of the
product to a Ligand approved facility or a signed proof of
destruction form.
Chargebacks - Detailed breakout of all chargeback claims by
end users by date.
Overage/Shortage - Documentation for claims will include
order number, P.O. number and the amount of
overage/shortage.
2.3 Invoices. Distributor will invoice Ligand for all services hereunder within
5 days of the end of each quarter. The invoices may be transmitted by
e-mail or by mail. Payment will be made as described in Attachment A.
2.4 Inspections. Upon reasonable prior notice and during normal business hours,
Distributor shall allow permanent employees of Ligand to enter into each of
Distributor's facilities to inspect Distributor's books and records
relating solely to inventory and supply of Products (including relevant
electronic information), and inspect and take physical counts of inventory,
not more than once during each consecutive twelve (12) month period of this
Agreement to ensure compliance with this Agreement, and to assist
Distributor in keeping such inventory clean, complete and moving to
minimize returned Products. In no event shall any such inspection relate to
any transaction or event that occurred more than twelve (12) months prior
to the date of such inspection.
2.5 Purchase Limits. Ligand agrees to ship all Distributor purchase orders in
full subject to the limits set forth in section 2.2.1 provided however that
Ligand has the right to question and cancel any order that exceeds 150% of
Distributor's Average Weekly Movement if Distributor is not able to provide
reasonable demand-related justifications and/or explanations. Ligand must
give Distributor notice of such cancellation within 48 hours of receiving
such order from Distributor.
2.6 Right to Audit: Upon reasonable prior notice and during normal business
hours, Distributor shall allow permanent employees of Ligand to enter into
each of Distributor's facilities to inspect Distributor's books and records
relating solely to claims related to
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Chargebacks and Returns. Such inspections must be scheduled within 30 days
of request and shall only cover claims in dispute. Such inspections can
only occur if other efforts to resolve the dispute have failed and
Distributor has deducted for the amount of the claim.
ARTICLE 3
Term and Termination; Remedies
3.1. Term and Termination. This Agreement shall remain in full force and effect
for one (1) year ("INITIAL TERM") from the Effective Date, i.e. through
_____, 20__. Thereafter, this Agreement will automatically renew for
subsequent one year periods unless terminated as provided herein. Either
party may request review and negotiation of the terms hereof by giving the
other written notice at least ninety (90) days prior to the expiration of
the current term. In event of such notice the parties will immediately
enter into good faith negotiations for a period of up to 30 days.
3.2. Either party may terminate this Agreement at any time (a) immediately upon
a breach by the other part of any of the terms of this Agreement that is
not cured within thirty (30) days of written notification thereof by the
non-breaching party; or (b) without cause after the Initial Term, upon
sixty (60) days' prior written notice of termination to the other party; or
(c) immediately by written notice upon insolvency or the institution
(whether voluntarily or involuntarily) of bankruptcy, liquidation or
similar proceedings by or against the other party, or the assignment of
such party's assets for the benefit of creditors.
ARTICLE 4
Miscellaneous
4.1. Nature of Relationship. The relationship between Ligand and Distributor is
that of independent contractor, and no agency, franchise, partnership,
joint venture or other relationship shall be construed to exist between the
parties by virtue of this Agreement.
4.2. Confidentiality. During the term of this Agreement, each party, its
respective agents, employees and representatives (collectively, the
"receiving party") may receive or have access to confidential materials and
information of the other party (the "disclosing party"). All such materials
and information (including, but not limited to the terms of this Agreement,
Products information, operations, methods, strategies, formulas, price
lists, discount programs, incentives, rebates, records of unit movement for
Products, shipping and warehousing, and confidential proprietary
information from third parties), are collectively referred to herein as
"Confidential Information" and constitute the property of the disclosing
party. During the term hereof and for a period of three (3) years
thereafter the receiving party shall not use or disclose to third persons
any such Confidential Information without the disclosing party's prior
written consent, excepting those (a) disclosures made on a confidential
basis to and used by the directors, officers, employees, and agents of the
receiving party who have a reasonable need to know such information in
connection with the receiving party's performance of this Agreement, (b)
disclosures which are required by law or government agencies, as reasonably
determined
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by the receiving party or its legal counsel, or are made on a confidential
basis to the receiving party's attorneys, accountants, and other
professional advisors in connection with matters relating to this
Agreement, (c) disclosures of Confidential Information that become public
through no fault of the receiving party hereunder; (d) disclosures of
Confidential Information received without restriction from a third party
with a valid right to disclose it; (e) with respect to Ligand's AVINZA
product only, disclosure by Ligand of this Agreement and information
received hereunder to its affiliates, to Organon USA Inc and affiliates of
such organization, and to its authorized representative for audit purposes,
provided that any such authorized representative is under similar
obligations of confidentiality and non-disclosure. Ligand understands and
agrees that Distributor may, in its sole discretion, elect to sell
warehouse - withdrawal, sales, and other data to IMS/DDD and/or other third
parties without contribution to Ligand.
Upon termination of this Agreement (for any reason) each party will
promptly: (i) return to the other party all documentation and other
materials (including copies of original documentation or other materials)
containing any confidential information of the other party; or (ii) certify
to the other party, pursuant to a certificate in form and substance
reasonably satisfactory to the other party, as to the destruction of all
such documentation and other materials.
4.3. Assignment and Delegation. Neither party may assign this Agreement without
the prior written consent of the other party; provided, however, that
either party may assign this Agreement without such consent to an
Affiliate, provided that the assigning party shall remain ultimately liable
for any financial obligations under this Agreement. For the purpose of this
Section 4.3, an Affiliate shall be defined to include any company
controlling, controlled by, or under common control with Distributor or
Ligand as the case may be through stock ownership, direct or indirect. This
Agreement shall be binding upon and shall inure to the benefit of the
successors and assigns of the parties.
4.4. Severability; Waiver. The invalidity of all or part of any provision of
this Agreement shall not affect the validity of any other provision of this
Agreement or the remaining portion of the applicable provision. Either
party's failure to insist on compliance or enforcement of any provision of
this Agreement shall not affect its validity or enforceability or
constitute a waiver of future enforcement of that provision or of any other
provision of this Agreement.
4.5. Statute of Frauds. All EDI transmissions made pursuant to this Agreement
shall be deemed by the parties to be the same as written communication for
all purposes, and for all applications of law and statutes, including but
not limited to, the Statue of Frauds under the Uniform Commercial Code.
4.6. Force Majeure. Neither party shall be liable for delay in delivery or
nonperformance in whole or in part nor shall the other party have the right
to terminate this Agreement where delivery or performance has been affected
by a condition of force majeure. If either party is affected by a force
majeure event, such party shall, within 10 days of its occurrence, give
notice to the other party stating the nature of the event, its anticipated
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duration and any action being taken to avoid or minimize its effect. The
suspension of performance shall be of no greater scope and no longer
duration than is reasonably required and the non-performing party shall use
its best efforts to remedy its inability to perform.
4.7. Notices. All notices to either party (each a "Notice") shall be in writing,
shall refer specifically to this Agreement and shall be hand delivered or
sent by express courier service, costs prepaid, or by facsimile to the
respective addresses specified below (or to such other address as may be
specified by Notice to the other party). Notices shall be effective upon
receipt.
If to Distributor, to:
If to Ligand, to: Ligand Pharmaceuticals Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000-0000
Attention: Commercial Contract Services
Telecopier: (000) 000-0000
With a copy to: Ligand Pharmaceuticals Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000-0000
Attention General Counsel
Telecopier: (000) 000-0000
4.8. Entire Agreement. This Agreement constitutes the entire agreement between
the parties and supersedes all prior contracts, agreements and
understandings between the parties whether written or oral with regard to
the subject matter hereof. To the extent this Agreement contains terms
inconsistent with the terms of any other existing Agreement between the
parties this Agreement will control. This Agreement may not be amended
except in writing signed by authorized representatives of the parties
hereto.
4.9. Public Announcements. Neither party shall issue any press release or other
public announcement, verbally or in writing, referring to the other party
or any entity which controls, is controlled by or under common control of
such party. Nothing contained herein shall limit the right of either party
to issue a press release or public announcement if, in the opinion of such
party's counsel, such press release or public announcement is required
pursuant to state or federal securities laws, rules or regulations, or
other applicable laws, in which case the party required to make the press
release or public announcement shall use commercially reasonable efforts to
obtain the approval of the other party as to the form, nature and extent of
the press release or public announcement prior to issuing the press release
or making the public announcement
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day first above written.
LIGAND PHARMACEUTICALS INC. DISTRIBUTOR
By: By:
--------------------------------- ------------------------------------
Name: Name:
------------------------------- ----------------------------------
Title: Title:
------------------------------ ---------------------------------
EDI Contact Person: EDI Contact Person:
Name: Name:
------------------------------- ----------------------------------
E-mail: E-Mail:
----------------------------- --------------------------------
Phone: Phone:
------------------------------ ---------------------------------
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ATTACHMENT A
PRODUCT: NAME
__ mg NDC Code: __________
__ mg NDC Code: __________
__ mg NDC Code: __________
__ mg NDC Code: __________
Term: _________, 20__ - __________, 20__
Total Service Fee: The total of the fee for all services described and covered
by the agreement related to this product will be $______ earned and paid
quarterly. A breakout of this fee by service area is described below. All such
fees will be paid to Distributor in the form of a check. For purposes of this
Agreement a "calendar quarter" shall mean the following consecutive three
calendar month periods: January 1 - March 31, April 1 - June 30, July 1 -
September 30 and October 1 - December 31. . Ligand shall pay such fees no later
than thirty (30) days after receipt of an invoice as set forth in section 2.3
BASE SERVICE FEE: Quarterly Fee for Base Services is $_______
INVENTORY LEVEL:
PRODUCT __ mg Minimum ___ Maximum ___ units
PRODUCT __ mg Minimum ___ Maximum ___ units
PRODUCT __ mg Minimum ___ Maximum ___ units
PRODUCT __ mg Minimum ___ Maximum ___ units
Quarterly fee for inventory management services $______
SPECIAL HANDLING REQUIREMENTS:
[DESCRIPTION]
Quarterly fee for special handling services $_______
DATA REQUIREMENTS:
Quarterly fee for data services $______
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