EXHIBIT 10.18
****denotes information omitted
pursuant to a request for
confidential treatment under Rule 406
Xxxxx Medical
Attn: Xx. Xxxxxxx X. Xxxxx
0000 Xxxxxx Xxxxxx Xx.
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Re: Fee for Services Agreement
Dear Xx. Xxxxx:
This letter will memorialize the agreement between Valera Pharmaceuticals,
Inc. ("Valera") and Xxxxx Medical ("Besse") with respect to Xxxxx'x distribution
of certain products purchased from Valera and delivered to Xxxxx'x customers.
Pursuant to Group Purchasing Agreements (the "GPO Agreements") between
Valera and International Physician Networks, LLC d/b/a/ International Urology
Network ("IPN"), certain specified persons and entities ("Eligible Purchasers")
may purchase Valera products at prices set forth in the GPO Contracts, plus any
markup, other fee or markdown charged or allowed by Besse. With respect to such
purchases:
1. Valera hereby designates Besse as an authorized specialty distributor
of Valera to sell its products to Eligible Purchasers. Form time to time, Valera
or IPN will advise Besse of the Eligible Purchasers.
2. Eligible Purchasers may purchase Valera products at the Contract Prices
set forth on Exhibit A, plus any markup or other fee, and less any markdown,
charged or allowed by Besse to the Eligible Purchaser. The amount of any such
markup, fee or markdown is strictly a matter between Besse and the Eligible
Purchaser and is not a part of this letter agreement.
3. The purchase price to be paid by Besse to Xxxxxx for Xxxxxx products
covered by this Agreement shall be **** per unit; provided that Besse shall be
entitled to submit chargebacks ("Chargebacks") for each Valera product sold to
an Eligible Purchaser equal to the difference between the **** per unit cost
and the Contract Price applicable to the Eligible Purchaser to whom Besse sold
the product as set forth Exhibit X. Xxxxx and Xxxxxx will mutually agree on the
method and timing for the submission by Besse to Xxxxxx, and the payment by
Xxxxxx to Besse, of Chargebacks, provided that credit memoranda for Chargebacks
shall be provided by Xxxxxx to Besse no more than 30 days after the submission
of such Chargebacks by Besse.
4. Valera shall extend payment terms to Besse of **** under the
Agreements. Products may be returned under the standard Valera Returned Goods
Policy, a copy of which will be supplied to Besse on request. All other general
terms and conditions of product
Xxxxx Medical
Attn: Xx. Xxxxxxx X. Xxxxx
Page 2
purchases by Besse from Xxxxxx shall be those in effect on the effective date of
this letter agreement.
5. Besse shall enter into such agreements that will allow it to accept
credit card purchases of Valera products from Eligible Purchasers, and shall
provide Valera a monthly report of all credit card purchases of Valera products
by Eligible Purchasers.
6. Besse shall perform all other distribution and related services
customarily provided by a wholesale distributor, including but not limited to
the stocking, packing and shipment of products, credit and billing processing,
and contracts and chargeback administration.
In consideration of the services to be provided by Besse under this letter
agreement, the receipt and sufficiency of which are hereby acknowledged, Xxxxxx
shall pay the following amounts to Besse (collectively, the "Distribution
Services Fee"):
X. Xxxxxx shall pay Besse a fee equal to **** of the purchases of Valera
products through Besse under the GPO Agreements, calculated based on Contract
Prices
X. Xxxxxx shall reimburse Besse for ****.
X. Xxxxxx agrees that it shall reimburse Besse for ****.
The amount of the Distribution Services Fee shall be deducted or billed on
a monthly basis (as may be agreed by the parties) within 30 days after the end
of a calendar month; provided, however, that with respect to amounts due under
Section C above for a particular Eligible Purchaser, Valera shall make such
payments to Besse no less than thirty days after Besse has provided Valera
documentation that: (i) the Eligible Purchaser's account is at least ninety days
past due and (ii) Besse has exhausted commercially reasonable collection efforts
to collect such account.
The effective date of this letter agreement shall be December 1, 2004, and
the term of this letter agreement will expire on November 30, 2005. Either party
may terminate this letter agreement if the other party breaches any of its
obligations or provisions of this letter agreement; provided, however, that the
defaulting party will be given not less than thirty days' prior written notice
of such default and the opportunity to cure the default during such period.
Notwithstanding anything to the contrary herein, Valera, at its sole
discretion, may at any time modify or vary the Wholesale Acquisition Cost
referenced on Exhibit A on not less than ten days' advance written notice to
Besse, and this letter agreement shall automatically be amended, without further
action by the parties to reflect such new Wholesale Acquisition Cost. Xxxxxx
Xxxxx Medical
Attn: Xx. Xxxxxxx X. Xxxxx
Page 3
agrees to perform a floor stock adjustment in the event of a decrease in
Wholesale Acquisition Cost. Besse agrees to provide an inventory count of
product on hand as of the first business day following a price decrease. Xxxxxx
agrees to issue a credit based on the difference of previous Wholesale
Acquisition Cost and new Wholesale Acquisition Cost and the number of vials or
other units on hand at such time.
The parties will keep all the terms, conditions and prices in this letter
agreement confidential. The obligations of either party hereunder will be
suspended in the event that such party is hindered or prevented from complying
therewith because of labor disturbances (including strikes and lockouts), wars,
fires, storms, accidents, or interference or any other cause beyond such party's
reasonable control. Any failure of either party to require the other party to
comply with any provision of this letter agreement will not be deemed a waiver
of such provision or any other provision of this letter agreement. Each party
represents that its performance under this letter agreement will be in full
compliance with any and all applicable laws and regulations, and neither party
will be deemed agents of the other party.
This letter agreement will be construed in accordance with the laws of the
state of Delaware with the exception of its choice of law principles. Any
clause, section or paragraph of this letter agreement that is determined by a
court of competent jurisdiction to be illegal, invalid or unenforceable will be
deemed severed from the remainder of this letter agreement and will have no
effect on the legality, validity or enforceability of the remaining provisions.
This letter agreement, including Exhibit A, represents the entire
understanding between the parties with respect to the subject matter hereof.
Each party expressly agrees and acknowledges that, other than those statements
expressly set forth in this letter agreement, it is not relying on any
statement, whether oral or written, of any person or entity with respect to its
entry into this letter agreement or to the consummation of the transactions
contemplated by this letter agreement. Any amendment or renewal of this letter
agreement or Exhibit A shall be in writing and signed by both parties.
If this letter accurately sets forth our agreement, please indicate your
acceptance by signing this letter in the space provided below and returning the
letter to me at your earliest convenience.
Very truly yours,
Valera Pharmaceuticals, Inc.
By: /s/ XXXXX X. XXXXXXX
--------------------------------
Name: Xxxxx X. xxxxxxx
--------------------------------
Title:President and CEO
--------------------------------
Xxxxx Medical
Attn: Xx. Xxxxxxx X. Xxxxx
Page 4
Agreed and accepted:
Xxxxx Medical
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx
General Manager
Xxxxx Medical
Attn: Xx. Xxxxxxx X. Xxxxx
Page 5
Exhibit A
Products covered by this letter agreement and related Contract Price
Q1/05
VANTAS CONTRACT PRICE DISCOUNT OF WAC
------ -------------- ---------------
IUN Physician Members **** ****
U.S. Urology Practices **** ****
US Bioservices **** ****
Q2/05
VANTAS CONTRACT PRICE DISCOUNT OF WAC
------ -------------- ---------------
IUN Physician Members **** ****
U.S. Urology Practices **** ****
US Bioservices **** ****
