EXHIBIT 10.2
[*] CERTAIN CONFIDENTIAL INFORMATION
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
SECOND AMENDMENT TO
HEMOPHILIA PRODUCT VOLUME
COMMITMENT AGREEMENT
Second Amendment to Hemophilia Product Volume Commitment Agreement ("Second
Amendment") effective this 24th day of September, 2003, by and between Xxxxxx
Healthcare Corporation, a Delaware corporation, through its BioScience business
unit, with offices at Xxx Xxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (hereinafter
referred to as "Baxter"), and Coram, Inc., with offices at 0000 Xxxxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000 ("Purchaser"). Baxter and Purchaser are collectively
referred to hereinafter as the "Parties".
RECITALS
WHEREAS, Baxter and Purchaser entered into a Hemophilia Product Volume
Commitment Agreement ("VCC Agreement") effective December 19, 2001 and amended
from time to time (collectively, the VCC Agreement and all of its amendments are
referred to herein as the "Agreement");
WHEREAS, the Parties desire to amend the Agreement for the purpose of:
1. revising Section 1;
2. revising Section 3;
3. revising Section 4;
4. revising Section 5;
5. revising Schedule A; and
6. revising Schedule C-1.
Now therefore, it is hereby agreed as follows:
1. Section 1. Definitions is hereby amended to (a) delete and restate
Paragraphs 1.2, 1.3, 1.13, and (b) add Paragraph 1.15, as follows:
"1.2 'Base Level Product Volumes' shall mean the annual volume of
Recombinant Hemophilia Product and rAHF-PFM (as defined in Paragraph
1.15) for each year as set forth in Schedule A-1.
"1.3 'Competitor' shall mean (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, Recombinant
Hemophilia Product or rAHF-PFM.
"1.13 'Therapeutic Products' shall mean Recombinant Hemophilia
Product, Plasma Based Hemophilia Products and rAHF-PFM.
"1.15 'rAHF-PFM' shall mean ADVATE rAHF-PFM.
Page 1 of 8
2. Paragraph 3.1 is hereby deleted and restated as follows:
"3.1 Term. The term of this Agreement will be from the Effective Date
through December 31, 2005, unless terminated earlier pursuant to
the provisions of Section 3. Thereafter, the Agreement will
remain in effect for successive [*]. The Agreement may be
terminated by either Party by providing written notice of
termination from one Party to the other Party not later [*] prior
to the expiration of the term then in effect."
3. Section 4, Paragraphs 4.1 Prices and 4.3 Terms are hereby deleted and
amended as follows;
"4.1 Prices. Purchaser will purchase Therapeutic Products and Other
Produce for Home Care Patients from Baxter and Baxter will sell
Therapeutic Products and Other Products for Home Care Patients to
Purchaser at the prices specified in Schedule C-2. The prices
specified in Schedule C-2 will be in effect as stated in Schedule
C-2. As to Recombinant Hemophilia Product, Hemofil M AHF, FEIBA
VH Anti-Inhibitor Coagulation Concentrate, Bebulin VH Factor IX
Complex and Proplex T Factor IX, effective [*], Baxter may
increase the prices specified in Schedule C-2 for calendar year
[*] by up [*]. Thereafter, for each subsequent year that this
Agreement is in effect, Baxter reserves the right to increase all
prices set forth in Schedule C-2 by up [*] over the prices for
the previous year, except as provided in Section 4.2 below.
4.3 Terms. Baxter will provide Purchaser with an invoice for payment
upon the delivery of Therapeutic Products and Other Products.
Payment of an invoice in full within [*] of the invoice date will
entitle Purchaser to [*] discount off the invoice price. Invoices
will be paid in full not later than [*] after the invoice date.
If unpaid after [*] of the invoice date, the invoice will be
considered past due and will bear a service charge at the rate of
[*] per month (or the highest amount allowed by law, if lower) of
the invoiced amount.
4. Section 5. Minimum Supply Purchase Commitments is hereby amended to
(a) delete and restate Paragraphs 5.1, 5.2, 5.3 and 5.4 and (b) add
Paragraphs 5.7 and 5.8 as follows:
"5.1 Recombinant Hemophilia Product and rAHF-PFM Minimum
Supply/Purchase Commitments. For each year this Agreement remain,
in effect, Baxter will supply Purchaser, and Purchaser will
purchase from Baxter, the annual Base Level Product Volumes of
Recombinant Hemophilia Product and rAHF-PFM set forth in Schedule
A-1 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
[*] days from receipt of such notice to make such purchases of
Recombinant Hemophilia Product and/or rAHF-PFM 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 and/or rAHF-PFM,
as set forth under this Section 5.1, then Baxter, in addition to
any other relief available to it, will be entitled to monetary
damages for lost profits for such shortfalls. In the event Baxter
fails to make delivery or repudiates or Purchaser rightfully
rejects or justifiably
Page 2 of 8
revokes acceptance, then with respect to the Therapeutic
Products involved, Baxter shall either (i) offer substitute
therapeutics (recombinant derived product for Recombinant
Hemophilia Product or rAHF-PFM, plasma derived product for
Plasma Based Hemophilia Products), as an accommodation, or
(ii) Baxter shall pay to the Purchaser an amount equal to [*]
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 [*] of the then applicable Quarterly Base
Level Product Volume of Recombinant Hemophilia Product and
rAHF-PFM for such quarter and shall tender delivery of the
full amount by the end of the calendar year.
"5.2 Adjustments to Base Level Product Volumes. Within [*]
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 and rAHF-PFM attributable to entities acquired by
Purchaser during the immediately prior quarter. If the
acquired entity either has recorded Recombinant Hemophilia
Product and/or rAHF-PFM sales or a Base Level Product Volume,
Purchaser may elect to receive up to [*] of the acquired
entities' purchases of Recombinant Hemophilia Product and/or
rAHF-PFM 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 [*], the Base Level Product Volumes
adjustment will be in the amount up to [*] of the acquired
entity's [*] purchases of Recombinant Hemophilia Product.
"5.3 Additional Supply. If Purchaser's forecasted demand for
Recombinant Hemophilia Product and/or rAHF-PFM exceeds the
Base Level Product Volumes, subject to the terms of Sections
6.1 and 10.1, Baxter will use reasonable efforts to provide
available Recombinant Hemophilia Product and/or rAHF-PFM 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 and/or
rAHF-PFM, 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 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 and/or rAHF-PFM, then Baxter will be
relieved of its Base Level Product Volumes commitment. In such
an event, Baxter will first make Recombinant Hemophilia
Product and/or rAHF-PFM 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
Page 3 of 8
Xxxxxx'x available supply will be made available on a pro-rata basis
to (i) customers with Firm Commitment, (ii) Xxxxxx'x emergency needs
inventory, and (iii) customers with previously accepted firm orders
for delivery in that quarter. If Xxxxxx'x supply of Recombinant
Hemophilia Product and/or rAHF-PFM 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 and/or rAHF-PFM
set forth in Section 5.1 will be reduced by an equivalent amount.
"5.7 Purchase Commitment.
"a. As to Hemofil M AHF only, the Base Level Product Volume is set
forth in Exhibit C-2. No later than [*], the Parties will
commence good-faith discussions between their designees toward
setting the Base Level Product Volume effective [*] of Hemofil M
AHF. Thereafter, no later than [*] of each subsequent year this
Agreement is in effect, the Parties will commence good-faith
discussions between their designees toward setting the Base Level
Product Volume for Hemofil M AHF.
"Should the Parties fail to reach an agreement as to the Base
Level Product Volume for Hemofil M AHF for any period of time
that this Agreement is in effect prior to [*].
"b. As to Recombinant Hemophilia Product and/or rAHF-PFM only, the
Base Level Product Volumes are set forth in Exhibit A-1.
Thereafter, no later than [*] of each subsequent year this
Agreement is in effect, the Parties will commence good-faith
discussions between their designees toward setting the Base Level
Product Volume for Recombinant Hemophilia Product and/or
rAHF-PFM.
"Should the Parties fail to reach an agreement as to the Base
Level Product Volume for Recombinant Hemofilia Product and/or
rAHF-PFM for any period of time that this Agreement is in effect
prior to [*] of said year, [*]
"5.8 Assortment. Purchaser shall specify its assortment when placing its
order, and Baxter shall make commercially reasonable efforts to meet
Purchaser's expectations; however, Baxter cannot guarantee assortment
on any Therapeutic Product. Purchaser's specific assortment needs may
be discussed with Baxter Customer Service at time of order placement
by calling 1-800-423-2090. If Baxter is unable to comply with
Purchaser's specifications, then Baxter reserves the right to make
reasonable and substitutions and will so inform Purchaser."
5. Schedule A is hereby deleted, and the Agreement is hereby amended so that
all references to such Schedule shall be to the new Schedule A-1 of the
Agreement attached hereto.
6. Schedule C-1 is hereby deleted, and the Agreement is hereby amended so that
all references to such Schedule shall be to the new Schedule C-2 of the
Agreement attached hereto.
Page 4 of 8
7. This Second Amendment will be effective until the expiration of the
term of the Agreement (unless further amended in accordance with the
terms of the Agreement).
8. In the event of any conflict between the Agreement and its associated
schedules and this Second Amendment and its associated schedules, the
provisions of this Second Amendment and its associated schedules shall
be controlling. Except as specifically modified herein, the terms and
conditions of the Agreement are hereby affirmed, confirmed and
ratified.
IN WITNESS WHEREOF, the Parties have caused this Third Amendment to be executed
by their duly authorized representatives:
PURCHASER: BAXTER:
Xxxxx, Inc. Xxxxxx Healthcare Corporation
Through its BioScience business unit
Sales and Marketing North America region
By: /s/ Xxxxx Xxxxxx By: /s/ Xxx Xxxxxx
------------------------------ -------------------------------------
Name: Xxxxx Xxxxxx Name: Xxx Xxxxxx
---------------------------- -----------------------------------
Title: SVP, CFO & Treasurer Title: VP Marketing
--------------------------- ----------------------------------
10-01-03
Page 5 of 8
SCHEDULE A-1
Amended Recombinant Hemophilia Product
Recombinate rAHF
Base Level Product Volumes
Year Base Level Volumes (In Units)
---- -----------------------------
2003 [*]
2004 [*]
2005 [*]
ADVATE rAHF-PFM
Base Level Product Volumes
Year Base Level Volumes (In Units)
---- -----------------------------
2003 [*]
2004 [*]
2005 [*]
Page 6 of 8
SCHEDULE C-2
PRICES AND VOLUME COMMITMENTS
EFFECTIVE THE EFFECTIVE DATE OF THIS AMENDMENT THROUGH DECEMBER 31, 2003
NEW STOCKING VOLUME
THERAPEUTIC PROTEIN LIST NUMBER PRICE/UNIT ORDER COMMITMENT
------------------- ----------- ---------- ------------ ----------
Factor VIII Recombinate* rAHF 060-351: 060-352: 060-353 [*] N/A [*]
Factor VIII ADVATE** (rAHF-PFM). 060-110:060-111 [*] N/A [*]
060-112:060-113
Factor VIII Hemofil* M AHF 060-792:060-793: [*] N/A [*]
060-795:060-796
FEIBA** VH Anti-Inhibitor Coagulation Concentrate 922204 [*] N/A [*]
Bebulin VH Factor IX Complex 924402 [*] N/A [*]
Proplex T Factor IX 060-739 [*] N/A [*]
EFFECTIVE JANUARY 1, 2004 THROUGH DECEMBER 31, 2004
NEW STOCKING VOLUME
THERAPEUTIC PROTEIN LIST NUMBER PRICE/UNIT ORDER COMMITMENT
------------------- ----------- ---------- ------------ ----------
Factor VIII Recombinate* rAHF 060-351: 060-352: 060-353 [*] N/A [*]
[*]
Factor VIII ADVATE** (rAHF-PFM). 060-110:060-111 [*] N/A [*]
060-112:060-113
Factor VIII Hemofil* M AHF 060-792:060-793: [*] N/A [*]
060-795:060-796 [*] [*]
FEIBA** VH Anti-Inhibitor Coagulation Concentrate 922204 [*] N/A [*]
[*]
Bebulin VH Factor IX Complex 924402 [*] N/A [*]
[*]
Proplex T Factor IX 060-739 [*] N/A [*]
[*]
Page 7 of 8
SCHEDULE C-2
PRICES AND VOLUME COMMITMENTS (CONTINUED)
EFFECTIVE JANUARY 1, 2005 THROUGH DECEMBER 31, 2005
New Stocking Volume
Therapeutic Protein List Number Price/Unit Order Commitment
-------------------------------- ----------------------- ------------- ------------ --------------
Factor VIII Recombinate* rAHF 06-351;060-352; 060-353 [*] N/A [*]
[*]
Factor VIII ADVATE** (rAHF-PFM). 060-110:060-111 [*] N/A [*]
060-112:060-113
Factor VIII Hemofil* M AHF 060-792:060-793: [*] N/A [*]
060-795:060-796 [*] [*]
FEIBA** VH Anti-Inhibitor 922204 [*] N/A [*]
Coagulation Concentrate [*]
Bebulin VH Factor IX Complex 924402 [*] N/A [*]
[*]
Proplex T Factor IX 060-739 [*] N/A [*]
----------
*Hemofil, Proplex, Recombinate and ADVATE are trademarks of Xxxxxx
International, Inc. Hemofil and Proplex are registered with the US Patent and
Trademark Office.
**FEIBA and Bebulin are trademarks of Xxxxxx XX and are registered with the US
Patent and Trademark Office.
Page 8 of 8
