EXHIBIT 10.44
Distribution Agreement
Orphan Medical, Inc.
AGREEMENT made this 26th day of November, 1996, by and between ORPHAN
MEDICAL, INC. (hereinafter "ORPHAN") located at 00000 Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000 and W.A. XXXXXX COMPANY (hereinafter "DISTRIBUTOR") located
at 0000 Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000. WHEREAS, ORPHAN is a developer and
marketer of pharmaceutical products and DISTRIBUTOR is a distributor of
veterinary products; THEREFORE in consideration of the mutual representations
and covenants contained herein, the parties agree as follows:
DEFINITIONS
The following terms shall have the following meanings in this
Agreement:
"INITIAL TERM" of this Agreement shall be defined as the time from the
date of execution of this Agreement by both parties through and including
December 31, 1999.
"PRODUCT" means the pharmaceutical product Antizol-Vet(TM) (fomepizole)
kit.
"FDA" means the United States Food and Drug Administration.
"GMPs" means the FDA-required current Good Manufacturing Practices.
"TERRITORY" means the fifty (50) states of the United States of
America.
"PROPRIETARY INFORMATION" means all non-public information or data
relating to the subject matter hereof first communicated by or for one party to
the other, in writing or orally, including without limitation, all scientific,
clinical, commercial, financial and business information and data, know-how,
compilations, formulae, processes, plans, technical information, new product
information, compounds, formulations, methods of product delivery, test
procedures, product samples, customer and sales information, specifications, and
data, including the fact of this Agreement.
"SOP" shall mean Standard Operating Procedure which may be in effect
and which shall conform in all respects and requirements of the FDA and any
other applicable laws and regulations of the United States and its agencies.
"AFFILIATE" means any corporation or non-corporate business entity
which controls, is controlled by, or is under common control with a party to
this Agreement, such control defined as ownership, direct, or indirect control
of at least forty percent (40%) of the voting stock of another corporation, or
(a) in the absence of the ownership of at least forty percent (40%) of the
voting stock of a corporation, or (b) in the case of a non-corporate business
entity, if it possesses, directly or indirectly, the power to direct the
management and policies of the business entity.
1. PURPOSE
Under this Agreement ORPHAN will consign to DISTRIBUTOR the product
Antizol-Vet(TM) (fomepizole) for injection (Product) for sale and distribution
solely within the TERRITORY described in Section 2.
2. TERRITORY/RIGHTS
2.1 DISTRIBUTOR agrees to sell or distribute the PRODUCT only
within the United States (TERRITORY) and only to the
veterinary market.
2.2 ORPHAN grants DISTRIBUTOR exclusive rights to distribute, and
sell the PRODUCT in the TERRITORY, providing the DISTRIBUTOR
meets or exceeds the minimum annual sales volumes described in
section 3.1.b and is not otherwise in breach of any of the
terms of this Agreement (after the expiration of any
applicable cure periods provided herein). In the event
DISTRIBUTOR fails to achieve the minimum sales volume for any
performance period and such failure is not due to ORPHAN'S
breach of any of the terms of this Agreement, ORPHAN may
terminate the Agreement in whole or in part or convert
DISTRIBUTOR rights to nonexclusive in all or some part of the
TERRITORY after first giving DISTRIBUTOR thirty (30) days
prior written notice of such failure and DISTRIBUTOR'S
inability to cure the same within such period of time.
3. DUTY TO PROMOTE PRODUCT
3.1 Within the TERRITORY the DISTRIBUTOR will;
3.1.a Use its reasonable best efforts to promote the use of
the PRODUCT and will maintain an adequate number of well trained and
well managed sales personnel capable of in-service efforts and
committed to maximizing the demand for the PRODUCT.
3.1.b DISTRIBUTOR and ORPHAN have discussed and have agreed
upon yearly performance standards as outlined in Appendix A. Even
though this Agreement shall commence on the date of the signing of this
Agreement by both parties, year one of this Agreement shall begin on
January 1, 1997 and end on December 31, 1997. Year two is defined as
January 1, 1998 to and including December 31, 1998. DISTRIBUTOR will
use its best efforts to meet agreed upon standards yearly.
3.1.c DISTRIBUTOR agrees to meet with the ORPHAN Sales Manager
on at least a quarterly basis for the purpose of reviewing DISTRIBUTOR
performance. DISTRIBUTOR agrees to hold sales training meetings for
it's sales representatives on a semi-annual basis or more often in the
case of a product introduction. ORPHAN will assist in the preparation
and presentation of these meetings and DISTRIBUTOR agrees that training
be followed by competency testing, with only those sales personnel
passing competency testing as those allowed to promote the PRODUCT in
the TERRITORY. DISTRIBUTOR agrees to allow ORPHAN Sales Manager to meet
with DISTRIBUTOR sales personnel and make joint calls on veterinary
clinics with DISTRIBUTOR sales personnel.
3.1.d DISTRIBUTOR agrees to actively promote materials ("sell
sheets") and promotions offered by ORPHAN "as-is", (provided that such
materials comply with applicable law) and not to revise ORPHAN
materials in any way. DISTRIBUTOR will make no representation with
respect to the PRODUCT, including oral representations, which are not
approved in advance by ORPHAN and are otherwise provided by ORPHAN to
DISTRIBUTOR in product inserts, labels or other ORPHAN promotional
materials. DISTRIBUTOR representations made with regard to the PRODUCT
will be consistent with the training material provided by ORPHAN. Any
representations made or promotion by DISTRIBUTOR will be in compliance
with all Food and Drug Administration (FDA) regulations governing
marketing and promotion of prescription products. DISTRIBUTOR's use of
ORPHAN trademarks or referencing ORPHAN in any way is subject to ORPHAN
approval. Distributor agrees to provide an ORPHAN sell sheet to all
customers in it's "Xxxxxx Review" on a basis which DISTRIBUTOR deems
appropriate, at launch during January and February, ***
3.1.e DISTRIBUTOR agrees to promote the PRODUCT at all
conventions and trade shows at which DISTRIBUTOR attends.
3.1.f DISTRIBUTOR agrees not to distribute samples, provide
rebates or promotional allowances without the prior written consent of
ORPHAN.
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*** DENOTES CONFIDENTIAL INFORMATION THAT HAS BEEN OMITTED FROM THE EXHIBIT
AND FILED SEPARATELY, ACCOMPANIED BY A CONFIDENTIAL TREATMENT REQUEST,
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF
THE SECURITIES EXCHANGE ACT OF 1934.
3.2 DISTRIBUTOR will not knowingly disparage the PRODUCT and will not
knowingly misrepresent either directly or by omission the capabilities,
qualities, and characteristics of the PRODUCT. DISTRIBUTOR will insure that
sales representatives present the PRODUCT consistent with the labeling of the
PRODUCT and not make claim to any characteristic or result which is not
supported by labeling, product inserts or other promotional materials provided
by ORPHAN.
3.3 Provided ORPHAN performs its obligations under this Agreement,
DISTRIBUTOR will not market or promote any product of another company which
shall compete with the PRODUCT in the TERRITORY.
4. DISTRIBUTOR'S OBLIGATION TO ORPHAN
4.1 DISTRIBUTOR represents that from its place of business it is
equipped to extend the following services to ORPHAN as a DISTRIBUTOR of ORPHAN
PRODUCT and DISTRIBUTOR acknowledges that the following obligations are material
to proper performance thereunder and the breach of any one (after the expiration
of any applicable cure periods provided herein) shall constitute grounds for
termination by ORPHAN.
4.1.a Maintain a satisfactory credit relationship with ORPHAN
by respect to amounts owing to ORPHAN by DISTRIBUTOR after sale by
DISTRIBUTOR of any PRODUCT hereunder as provided in this agreement
within ninety (90) days of product sale.
4.1.b Maintain warehouse facilities, and any other storage or
transportation sites, suitable for the storage as contained in the
prescribing information of the PRODUCT and conforming to Good
Manufacturing Practices (GMP), delivery facilities and stock of ORPHAN
PRODUCT adequate to completely fill within *** of the orders of all
customers. No charge will be levied to ORPHAN for warehousing services.
If any special storage or shipping requirements apply with respect to
the PRODUCT, ORPHAN shall give DISTRIBUTOR thirty (30) days prior
written notice of the same. Upon execution of this Agreement,
DISTRIBUTOR shall provide to ORPHAN a copy of SOPs applicable to
storage of drug product held in DISTRIBUTOR'S facilities.
4.1.c Properly dispose of any outdated PRODUCT or PRODUCT
returned to DISTRIBUTOR per ORPHAN standard operating procedures (SOPs)
outlined in Appendix C. In the event of any complaint or quality issue,
DISTRIBUTOR agrees to forward the product to ORPHAN for analysis and
disposal per ORPHAN SOP outlined in Appendix D. In all cases of the
return of PRODUCT to ORPHAN, the freight and insurance charges incurred
in connection with such return shall be paid by ORPHAN.
4.1.d Forward any medically related inquiry or report of
adverse event to ORPHAN, at 1-888-80RPHAN, within 24 hours of receipt,
per ORPHAN SOP outlined in Appendix D.
5. TERM/TERMINATION
5.1 The term of this Agreement shall be to and including December 31,
1999, which shall be the INITIAL TERM of the Agreement. The Agreement shall
automatically renew for successive two (2) year terms on the same terms and
conditions, unless either party in their sole discretion gives one hundred and
twenty (120) days prior written notice to the other of its desire not to renew.
ORPHAN may terminate this Agreement for any reason within its sole discretion
upon six (6) months prior notice of DISTRIBUTOR. In such event, the parties will
discuss any further actions needed to minimize further costs and work by
DISTRIBUTOR.
5.2 Either party may terminate this Agreement in the event of a
material breach by the other party of any of the terms of this Agreement. In the
event of such breach, the affected party shall give notice to the other of the
breach no later than sixty (60) days prior to the date of termination, and
provide the other party with the
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*** DENOTES CONFIDENTIAL INFORMATION THAT HAS BEEN OMITTED FROM THE EXHIBIT
AND FILED SEPARATELY, ACCOMPANIED BY A CONFIDENTIAL TREATMENT REQUEST,
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF
THE SECURITIES EXCHANGE ACT OF 1934.
opportunity to cure its breach. Termination will occur only in the event the
breaching party has not cured its breach within such sixty (60) day period.
5.3 In the event of any termination or expiration of this Agreement as
provided herein:
5.3.a. DISTRIBUTOR shall return to ORPHAN or its designee, at
ORPHAN's cost and expense, all of Distributor stock of the PRODUCTS,
including samples, held on consignment by DISTRIBUTOR, which
DISTRIBUTOR has not sold to its customers as of the date of such
termination; and
5.3.b. Such termination or expiration shall terminate only the
rights and obligations of the parties with respect to the sale and
purchase of PRODUCTS hereunder and shall not affect, or release either
party from, any rights, liabilities or obligations that may have
accrued, or been based upon facts or circumstances arising, under the
laws or the terms of the Agreement prior to the date of such
termination or expiration, including without limitation the
indemnification provisions contained herein.
6. NOT A REQUIREMENTS CONTRACT
ORPHAN will use reasonable best efforts to fill Distributor proper
orders. If ORPHAN faces a back-order situation in the PRODUCT, ORPHAN will
handle purchase orders pursuant to Section 2-61 5(b) of the Uniform Commercial
Code. ORPHAN may discontinue production or sale of any PRODUCT, or change the
design or specifications of any PRODUCT, at any time during of after the INITIAL
TERM by giving DISTRIBUTOR not less than sixty (60) days prior written notice of
any of the foregoing. ORPHAN is not liable for delays in production, shipping or
delivery due to any cause beyond it's control.
7. OTHER TERMS AND CONDITIONS
Other terms and conditions of the sales (prices, invoicing, payment
terms, risk of loss, returned goods policy, and warranties) are stated in
Appendix B. ORPHAN may change any provision of that appendix upon sixty (60)
days prior written notice during or after INITIAL TERM, (a) but the change will
not affect any order properly placed before the effective date of the change,
(b) unless otherwise provided in Appendix B, and (c) except in no event shall
may change in pricing by ORPHAN adversely affect the percentage margin to be
retained by DISTRIBUTOR from the sale of PRODUCT as provided in Appendix B.
8. WARRANTY
ORPHAN warrants the PRODUCT against any defects as of the time shipped
to DISTRIBUTOR, and further guarantees that as of such shipment, the PRODUCT (a)
is not adulterated or misbranded within the meaning of the Federal Food, Drug,
and Cosmetic Act, (b) is not an article which may not, under the provisions of
section 404, 505, or 512 of the act, be introduced into interstate commerce, (c)
has been manufactured in substantial accordance with applicable GMPs, and (d)
will have remaining shelf life of not less than six (6) months. If any PRODUCT
is found to be defective in material or manufacture during the above-mentioned
warranty period, ORPHAN'S only obligation, and DISTRIBUTOR'S exclusive remedy,
is replacement of PRODUCT by ORPHAN within a reasonable time after written
notification to ORPHAN thereof, except the foregoing limitation on DISTRIBUTOR'S
remedies shall not apply to ORPHAN'S indemnification obligations under Article 9
with respect to any third party claims concerning the PRODUCTS. In addition,
ORPHAN represents to DISTRIBUTOR that (a) nothing in this Agreement is intended
to shift liability from ORPHAN to DISTRIBUTOR for the manufacture or sale of
defective PRODUCTS by ORPHAN, and (b) applicable law does not require a Material
Safety Data Sheet ("MSDS") to be disseminated in connection with the sale of
PRODUCTS, and if applicable law does so require, ORPHAN shall provide to
DISTRIBUTOR prior to any shipment of PRODUCTS hereunder a complete and accurate
copy of the MSDS applicable to the PRODUCTS so that DISTRIBUTOR can provide a
copy of the same to its customers.
DISTRIBUTOR shall take all necessary and customary measures to ensure
security and storage under appropriate conditions as described in 4.1.b. of the
PRODUCT while PRODUCT is in its possession or under its control and during
shipment from DISTRIBUTOR FOB destination.
9. INDEMNIFICATION
9.1 Subject to ORPHAN'S compliance with its obligations set forth in
this Agreement, DISTRIBUTOR shall indemnify, defend, and hold ORPHAN and its
directors, officers, employees, agents, and AFFILIATES harmless against any and
all losses, damages, expenses, reasonable attorneys' fees (regardless of outcome
and including fees expended to successfully enforce its right to indemnification
hereunder), settlement costs and judgments resulting from DISTRIBUTOR'S breach
of any of its obligations or warranties under this Agreement, including, but not
limited to, any intentional misconduct in storage, handling, distributing or
promoting the PRODUCT.
9.2 Except as provided in Section 9.1 above, and subject to
DISTRIBUTOR'S compliance with its obligations set forth in this Agreement,
ORPHAN shall indemnify, defend, and hold DISTRIBUTOR and its directors,
officers, employees, agents, and AFFILIATES harmless against any and all losses,
damages, expenses, reasonable attorneys' fees (regardless of outcome and
including fees expended to successfully enforce its right to indemnification
hereunder), settlement costs, and judgments resulting from (a) ORPHAN'S breach
of any of its obligations or warranties under this Agreement, or (b) allegations
which relate to or pertain to the PRODUCTS sold by ORPHAN to DISTRIBUTOR
pursuant to this Agreement.
9.3 A party which intends to claim indemnification under this Article 9
(the "Indemnitee") shall promptly notify the other party (the "Indemnitor") in
writing of any action, claim, or other matter in respect of which the Indemnitee
or any of its directors, officers, employees, agents, and AFFILIATES intend to
claim such indemnification. The Indemnitee shall permit, and shall cause its
directors, officers, employees, agents, and AFFILIATES to permit, the
Indemnitor, at its discretion, upon providing the Indemnitee with a written
acknowledgment of full and complete responsibility for the indemnification of
the Indemnitee with respect to any such action, claim, or other matter, to
settle any such action, claim, or other matter; and agrees to complete control
of such defense or settlement by the Indemnitor; provided, however, that such
settlement does not adversely affect the Indemnitee's rights hereunder or impose
any obligations on the Indemnitee in addition to those set forth herein in order
for it to exercise such rights. No such action, claim, or other matter shall be
settled without the prior written consent of the Indemnitor (unless the
Indemnitor fails to actively investigate and defend any such action, claim or
other matter hereunder), and the Indemnitor shall not be responsible for any
legal fees or other costs incurred other than as provided herein. The
Indemnitee, its directors, officers, employees, agents, and AFFILIATES shall
cooperate with the Indemnitor and its legal representatives in the investigation
and defense of any action, claim, or other matter covered by this
indemnification, and the Indemnitor shall keep the Indemnitee apprised as to the
status and progress of any such action, claim, or other matter. The Indemnitee
shall have the right, but not the obligation, to be represented by counsel of
its own selection, at its own expense, unless the Indemnitor fails to actively
investigate and defend any such action, claim or other matter hereunder, in
which event the cost of Indemnitee's counsel shall be paid by the Indemnitor.
10. CONFIDENTIALITY
10.1 During the term hereof, and for a period of five (5) years
thereafter, any PROPRIETARY INFORMATION disclosed by the one party (the
"Disclosing Party"), directly or indirectly, to the other party (the "Receiving
Party") under this Agreement shall be deemed confidential and trade secret
information, whether so designated or not, and shall not be used or disclosed by
the Receiving Party to any Third Party, except as set forth below. Access to
such PROPRIETARY INFORMATION will be limited to employees, agents, consultants,
or other contractors of the Receiving Party who reasonably require such
Proprietary Information for purposes of performing the Receiving Party's
obligations hereunder and who are bound to the Receiving Party by similar
obligations in respect of confidentiality and use. Such employees, agents,
consultants, or contractors will be advised of the nature and existence of the
undertakings in respect of such PROPRIETARY INFORMATION pursuant to this
Agreement and of the applicability of such undertakings to them. The Receiving
Party will use such PROPRIETARY INFORMATION only to carry out its obligations or
to exercise its rights hereunder and will not use such PROPRIETARY INFORMATION
for its own benefit or for the benefit of others or in any way inconsistent with
this Agreement. Without limiting the generality of the foregoing, ORPHAN shall
not be entitled to use any of DISTRIBUTOR'S confidential customer information
for ORPHAN'S direct sales of PRODUCTS, without DISTRIBUTOR'S prior written
consent.
10.2 Exceptions. Information shall not be deemed PROPRIETARY
INFORMATION which:
10.2.a at the time of disclosure, is already in the public
domain or thereafter becomes part of the public domain by publication
or otherwise through no fault or act of the Receiving Party;
10.2.b was demonstrably in the possession of the Receiving
Party prior to the time of the disclosure to it and was not acquired,
directly or indirectly, from the Disclosing Party;
10.2.c is independently disclosed to the Receiving Party by a
third party who has not violated any confidential obligation owed to
the Disclosing Party;
10.2.d was independently developed by the Receiving Party
without use of or reliance on any PROPRIETARY INFORMATION of the
disclosing Party;
10.2.e is required to be disclosed by legal process; provided,
in each case the party so disclosing information timely informs the
other and uses its best efforts to limit the disclosure and maintain
confidentiality to the extent possible and permits the other party to
attempt by appropriate legal means to limit such disclosure;
10.2.f is information which is required to be provided to the
FDA or any other regulatory authority in the TERRITORY in order for
ORPHAN to obtain Registrations or approval for the PRODUCT or otherwise
comply with applicable regulatory requirements; provided, however, that
no PROPRIETARY INFORMATION of ORPHAN or DISTRIBUTOR will be disclosed
in any such manner without the written consent of the Disclosing Party,
which consent will not be unreasonably withheld, or
10.2.g is information which is required to be disclosed to
customers, users, and prescribers of the PRODUCT or which is reasonably
necessary to disclose in connection with the ethical marketing of the
PRODUCT, if applicable.
10.3 Disclosure by the Receiving Party to a Third Party shall be made
only to the extent necessary to enable the Receiving Party to comply with its
contractual obligations to the Disclosing Party.
10.4 Each Third Party to which PROPRIETARY INFORMATION is disclosed
agrees in writing to such disclosure to keep the PROPRIETARY INFORMATION in
strict confidence and to comply with the terms of this Agreement.
10.5 Both Parties agree to limit access of PROPRIETARY INFORMATION to
those of its officers, directors, or employees, or any Third Party who must have
PROPRIETARY INFORMATION to carry out the terms of any agreement made between the
Parties.
10.6 Neither party shall utilize the PROPRIETARY INFORMATION disclosed
to it by the Other Party after the completion of the Agreement between the
Parties, either in its own business endeavors or for commercial purposes,
without advance written consent of the Other Party.
10.7 Except as otherwise required by law, applicable regulations or the
terms of this Agreement or mutually agreed upon by the Parties hereto, each
Party shall treat as confidential the terms and conditions of this Agreement.
11. RELATIONSHIP
DISTRIBUTOR makes this Agreement, and buys and sells PRODUCT, as an
independent contractor. DISTRIBUTOR is not an agent or a franchisee of ORPHAN.
DISTRIBUTOR will not state or imply the contrary to anyone. The employees and
agents of DISTRIBUTOR are not for any purpose the agents or employees of ORPHAN.
DISTRIBUTOR may not assign its rights or delegate its duties under this
Agreement without the prior written consent of ORPHAN.
12. ENTIRE AGREEMENT
12.1 This Agreement, together with the most current issue of the price
page(s) identified in Attachment 1, states the complete understanding between
ORPHAN and DISTRIBUTOR on this subject and replaces any previous statement,
communication, or understanding, whether oral or written.
12.2 This Agreement cannot be modified except by in writing signed by
the party to be bound, or through ORPHAN'S unilateral revision of the price
pages as provided in Article 7 hereof, DISTRIBUTOR may place orders under this
Agreement using DISTRIBUTOR'S regular purchase order form. However, any
provision of that form, or of any other document or form of DISTRIBUTOR or
ORPHAN, which conflicts with or differs from the provisions or intent of this
Agreement, is void.
13. NO WAIVER
A course of dealing or of performance does not effect a waiver or
modification unless ratified in writing. A party's failure to exercise a right
in one of many instances does not waive that party's right to later exercise
that right.
14. GOVERNING LAW
Any questions, claims, disputes, or litigation concerning this
Agreement are governed by the laws of Minnesota.
15. USE OF ORPHAN NAME
15.1 During the term of this agreement, DISTRIBUTOR may refer to itself
as "An Authorized Distributor of Orphan Medical veterinary products" and may use
the term "Orphan Medical". DISTRIBUTOR may not refer to itself as an "agent" of
ORPHAN. DISTRIBUTOR will make no other use of any name or trademark of ORPHAN
without ORPHAN'S prior written permission. The decision to grant or withhold
permission is at ORPHAN'S sole discretion.
15.2 When this Agreement terminates, DISTRIBUTOR will immediately (a)
cease all use of any name or trademark of ORPHAN, and (b) take all action
possible to cause the removal of any ORPHAN name or trademark from any
advertisement, directory or other listing or description of DISTRIBUTOR'S
business.
16. DISPUTE RESOLUTION
16.1 The parties shall attempt in good faith to resolve any dispute
arising out of the making or performance of or otherwise relating to this
Agreement promptly by negotiations between executives who have authority to
settle the controversy. Any party may give the other party written notice of
dispute not resolved in the normal course of business. Within twenty (20) days
after delivery of said notice, executives of the disputing parties shall meet at
a mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary, to exchange relevant information and to attempt to resolve the
dispute. If the matter has not been resolved within thirty (30) days of the
disputing party's notice, or if the parties fail to meet within twenty (20)
days, a party may initiate mediation of the controversy or claim as provided
hereinafter. If a negotiator intends to be accompanied at a meeting by an
attorney, the other negotiators shall be given at least seven (7) days notice of
such intention and may also be accompanied by an attorney.
16.2 All negotiations pursuant to this Article 16 and any mediation
proceeding pursuant to Article 17 hereof will constitute settlement negotiations
for purposes of the federal and state rules of evidence (including without
limitation Federal Rules of Evidence 408) and will be treated as
non-discoverable, confidential, and privileged communication by the parties and
the mediator. No stenographic, visual, or audio record will be made of any such
negotiations or mediation proceeding. All conduct, statements, promises, offers,
and opinions made in the course of negotiations or mediation by any party, its
agents, employees, representatives, or other invitees and by the mediator will
not be discoverable nor admissible for any purposes in any litigation or other
proceeding involving the parties and will not be disclosed to any party.
17. MEDIATION
17.1 If the dispute has not been resolved by negotiation as stated
above, the parties shall endeavor to settle the dispute by mediation. Either
party may initiate mediation by a request in writing to the other party.
Thereupon, both parties will be obligated to engage in mediation with a mutually
acceptable mediator. The parties regard the aforesaid obligation to mediate an
essential provision of this Agreement and one that is legally binding on them.
In case of a violation of such obligation by either party, the other may bring
an action to seek enforcement of such obligation in any court of law having
jurisdiction thereof.
17.2 Within ten (10) days following a party's notice to initiate
mediation hereunder, the parties will submit to each other a written list of
acceptable qualified mediators not affiliated with any of the parties. Within
ten (10) days from the date of receipt of such list, the parties to this
Agreement will rank the mediators in numerical order of preference and exchange
such rankings. If one or more names appear on both lists, the person whose name
appears on both lists and who receives the highest combined ranking will be
chosen as the mediator. If no mediator has been selected under this procedure,
the parties agree jointly to request a mutually agreeable State or Federal
District Judge in Hennepin County, Minnesota, to supply within ten (10) business
days a list of qualified mediators within numerical order of preference and will
simultaneously exchange such list and will select as the mediator the individual
receiving the highest combined ranking. If such mediator is not available to
serve, they will proceed to contact the mediator who was next highest in ranking
until they are able to select a mediator.
17.3 The parties' efforts to reach a settlement of any dispute will
continue until the conclusion of the mediation proceeding. The mediation
proceeding will be concluded when: (a) a written settlement agreement is
executed by the parties, or (b) the mediator concludes and informs the parties
in writing that further efforts to mediate the dispute would not be useful, or
(c) the parties agree in writing that an impasse has been reached.
Notwithstanding the foregoing, either party may withdraw from the mediation
proceeding without liability therefore in the event such proceeding continues
for more than thirty (30) days from the commencement of such proceeding. For
purposes of the preceding sentence, the proceeding will be deemed to have
commenced following the completion of the selection of a mediator as provided in
Paragraph 17.2.
17.4 The procedures specified in Articles 16 and 17 shall 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, if in its sole
discretion such action is necessary to avoid irreparable damage or to preserve
the status quo. Despite such action, the parties will continue to participate in
good faith in the procedures specified in Articles 16 and 17 hereof.
17.5 All applicable statues of limitation and defenses based upon
passage of time shall be tolled while the procedures specified in Articles 16
and 17 are pending. The parties will take such action, if any, required to
effectuate such tolling.
17.6 Each party will bear its own cost of mediation; provided, however,
the cost charged by any independent third party mediator will be borne equally
by the parties.
18. ASSIGNABILITY
DISTRIBUTOR may not assign this Agreement or any of its obligations
hereunder to any other person, company, or party absent the prior written
consent of ORPHAN, which consent shall be at ORPHAN'S sole and absolute
discretion.
19. AFFILIATES
Any reference in this Agreement to ORPHAN, or DISTRIBUTOR, shall
include the AFFILIATES of those entities.
20. FORCE MAJEURE
Neither party shall be liable for delays or failure of performance of
any obligation hereunder by reason of Act of God, fire, flood, war, public
disaster, strike, or labor difference, governmental enactment, rule, or
regulation, or any other cause beyond such party's control, provided that
diligent continuing efforts are made to resume performance hereunder if such
resumption is a commercially reasonable option. Written notice must be given to
the other party for any cause made under this Article 20.
21. PRODUCT LIABILITY INSURANCE
21.1 During the term of this Agreement, ORPHAN shall maintain, at its
own cost and expense, Product Liability insurance, with limits of not less than
three million ($3,000,000) United States dollars. ORPHAN'S obligation to
DISTRIBUTOR, under Paragraph 9.2, shall not be limited to the minimum amount of
insurance required or the amount of insurance actually carried by ORPHAN. ORPHAN
shall, upon execution of this Agreement, furnish DISTRIBUTOR with a certificate
of insurance evidencing compliance with the requirements of this Article 21.
Such certificate shall provide that DISTRIBUTOR be given not less than thirty
(30) days written notice in the event of cancellation or material change in such
insurance.
21.2 During the term of this Agreement, DISTRIBUTOR shall maintain, at
its own cost and expense, Workers Compensation insurance, and General Business
Liability insurance, with limits of not less than one million ($1,000,000)
United States dollars. DISTRIBUTOR'S obligation to ORPHAN, under Paragraph 9.1,
shall not be limited to the minimum amount of insurance required or the amount
of insurance actually carried by DISTRIBUTOR. DISTRIBUTOR shall, upon execution
of this Agreement, furnish ORPHAN with a certificate of insurance evidencing
compliance with the requirements of this Article 21. Such certificate shall
provide that ORPHAN be given not less than thirty (30) days written notice in
the event of cancellation or material change in the insurance.
ACCEPTED AND AGREED TO:
W. A. XXXXXX CO. ORPHAN MEDICAL, INC.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxx Bullion
--------------------- -----------------------
Print Name: Xxxxxx X. Xxxxxxx Print Name: Xxxx Xxxxxx Bullion
----------------- -------------------
Title: Sr.V.P Marketing and Operations Title: Chief Executive Officer
------------------------------- -----------------------
Date: 11-27-96 Date: 11-26-96
-------- --------
Valid only if signed by the identified ORPHAN personnel. No other method of
acceptance (including other signature or processing of purchase orders) is
possible.
Distribution Agreement
Appendix A
November 26th, 1996
Yearly Performance Standards(1)
Year One(2) Year Two(3)
# of Kits **** ****
**** DENOTES CONFIDENTIAL INFORMATION THAT HAS BEEN OMITTED FROM THE EXHIBIT
AND FILED SEPARATELY, ACCOMPANIED BY A CONFIDENTIAL TREATMENT REQUEST
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF
THE SECURITIES EXCHANGE ACT OF 1934.
--------------------------
(1)GIVEN THE SHORT STUB PERIOD, NO PERFORMANCE STANDARDS SHALL APPLY FOR THE
BALANCE OF 1996. PERFORMANCE STANDARDS FOR 1999 SHALL BE MUTUALLY AGREED TO BY
THE PARTIES NINETY (90) DAYS PRIOR TO THE COMMENCEMENT OF SUCH YEAR.
(2)YEAR ONE DEFINED AS JANUARY 1, 1997 THROUGH AND INCLUDING DECEMBER 31, 1997.
(3)YEAR TWO DEFINED AS JANUARY 1, 1998 THROUGH AND INCLUDING DECEMBER 31, 1998.
Distribution Agreement
Appendix B
November 26, 1996
PRICING AND TERMS
A. ***
ORPHAN will*** to DISTRIBUTOR a predetermined number of units (kits) of
Antizol-Vet(TM). For each kit sold, ORPHAN will be paid by DISTRIBUTOR an amount
equal to*** of the price to the veterinarian customer (irrespective of any
changes made by ORPHAN to the selling price to the customer), so that
DISTRIBUTOR will receive a*** commission on the sale of any PRODUCT. The selling
price of Antizol-Vet(TM) will be printed on all promotional materials provided
to DISTRIBUTOR by ORPHAN. The selling prices to customers will be reviewed by
ORPHAN on a periodic basis, no less than once per year, to consider price
adjustments, but in no event shall any price adjustment adversely affect
DISTRIBUTOR'S*** commission on the sale of any PRODUCT. Any adjustment in price
will require the prior written agreement of ORPHAN.
B. Purchase Orders/ Sales Reporting/ Invoicing
ORPHAN will ship a predetermined number of units to DISTRIBUTOR as
denoted on the standard DISTRIBUTOR purchase order, modified to reflect the
consignment relationship hereunder. On a weekly basis at launch (defined by the
first three months of sales), and on a monthly basis thereafter, DISTRIBUTOR
will provide to ORPHAN a report of sales, including: number of units, sale date,
and address of ordering customer. Based on DISTRIBUTOR'S monthly sales,
DISTRIBUTOR will accrue its obligations on a monthly basis as outlined in
Paragraph A and pay ORPHAN no later than forty five (45) days later, following
the month of accrual.***
Inventory will be justified between ORPHAN and DISTRIBUTOR on a
quarterly basis, Any inventory discrepancies will be resolved by the parties. In
the event the parties can not agree on inventory resolution, the DISTRIBUTOR and
ORPHAN will share equally in responsibility for the sales revenue lost from
unaccounted for Product.
C. Terms
For accruals due past forty-five (45) days a*** charge on net will be
due ORPHAN. An additional*** will be due for each additional forty-five (45)
days from date of invoice.
D. Returned Goods Policy--Returns from Customer
Antizol-Vet(TM) kits returned due to quality problems will be exchanged
by ORPHAN per Section 8 of the Agreement. Antizol-Vet(TM) kits returned from the
customer due to outdating will be exchanged for the then current price of the
product less a*** restocking allowance to the customer. Outdated units must be
returned within six (6) months of expiration and DISTRIBUTOR agrees to remit to
ORPHAN*** of the amount paid by the customer and retain a*** commission as noted
above.
E. Warranties
All warranties are as represented in Section 8 of the Agreement.
---------------------
*** DENOTES CONFIDENTIAL INFORMATION THAT HAS BEEN OMITTED FROM THE EXHIBIT
AND FILED SEPARATELY, ACCOMPANIED BY A CONFIDENTIAL TREATMENT REQUEST
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF
THE SECURITIES EXCHANGE ACT OF 1934.
Appendix C
Policy for Handling and Disposition of Returned Drug Products
Between Orphan Medical, Inc. and the W.A. Xxxxxx Company
November 26, 1996
1.0 Objective
To establish a policy for proper receipt and disposition of returned
product from the W.A. Xxxxxx Company to Orphan Medical, Inc.
2.0 Scope
2.1 This policy covers all product returned to Orphan Medical,
Inc. through the W.A. Xxxxxx Company.
2.2 Conditions under which Orphan Medical, Inc. will accept
returned product.
2.3 Product damaged during shipment between Orphan Medical, Inc.,
or it's agent (manufacturer) and W.A. Xxxxxx Company.
2.4 Complaints concerning product quality from a customer or from
W.A. Xxxxxx Company, where it is clear that the problem did
not result from an action of W.A. Xxxxxx Company.
2.5 For any product which is more than six (6) months past its
expiration date, the President of Orphan Medical, Inc. will
decide if product may be accepted from the customer for
return.
3.0 Responsibilities
3.1 Orphan Medical Quality Assurance Department is responsible for
handling all product returned for quality reasons, determining
the disposition of product, supervising the process of the
returns, and maintaining records on returns due to quality
reasons.
3.2 The W.A. Xxxxxx Company is responsible for taking returns from
veterinary customers, separating them in order that they not
be returned to inventory, and returning them to Orphan Medical
for destruction.
3.3 Orphan Medical Quality Assurance Department is responsible for
the destruction of product returned from the W.A. Xxxxxx
Company for reasons other than quality related issues.
3.4 Orphan Medical is responsible for paying for the shipment of
product returned from the W.A. Xxxxxx company for purposes of
destruction.
4.0 Procedure
4.1 Returned product is received by the W.A. Xxxxxx Company and is
immediately physically isolated in a designated area of the
warehouse to insure it is not returned to inventory.
4.2 A visual examination is performed and the following
information is recorded in the Returned Goods Log; lot number,
reason for return, quantity returned, date of return to Orphan
Medical, and initials of responsible person for shipping to
Orphan Medical.
4.3 If the reason for return is quality related, the W.A. Xxxxxx
Company will call the Orphan Medical Quality Assurance
Department immediately for shipment of the product to Orphan
Medical, and product testing.
4.4 If the reason for return is not quality related, and is within
the bounds of the Orphan Medical returned goods policy
parameters, the W.A. Xxxxxx Company will physically isolate
product and ship to Orphan Medical at such time it deems
sufficient quantities to warrant shipment.
4.5 Orphan Medical will supervise destruction of product via a
contract destruction vendor.
APPENDIX D
SOP TITLES COMPLAINT HANDLING PROCEDURE FOR MARKETED PRODUCTS
ORPHAN MEDICAL, INC. QA-006 REV 0
STANDARD OPERATING PROCEDURE PAGE 1 OF 3
1.0 OBJECTIVE/SCOPE
1.1 To provide a procedure and description of responsibilities for
effective action in the event of a customer complaint.
1.2 To minimize both the customer's risk and Orphan Medical's
liabilities associated with the complaint.
1.3 To provide communication of responsibilities between all
individuals associated with the complaint.
1.4 To maintain high ethical standards and integrity of Orphan
Medical and achieve customer satisfaction through continued
good service and communication.
2.0 RESPONSIBILITIES
2.1 It is the responsibility of Orphan Medical's staff and
Contract Vendors to report all customer complaints to the
Quality Assurance Department of Orphan Medical.
2.2 The Marketing Department has the responsibility of
acknowledging receipt of a customer complaint and issuing the
final written response to the customer.
3.0 PROCEDURE
3.1 Receipt of Complaints
3.1.1 Complaints received by phone should be forwarded to
the Quality Assurance Department for processing. In
the event of the Quality Assurance Department not
being available, record the caller's name and
telephone number so that the Quality Assurance
Department can return the call and complete the
Complaint Information Form (Attachment l).
3.1.2 Written complaints must be forwarded to the Quality
Assurance Department for processing.
3.1.3 Complaints received by Orphan Medical contract
vendor's or distributor must be forwarded to Orphan
Medical Quality Assurance Department for processing.
3.2 All complaints regardless of the route of communication to
Orphan Medical are recorded on the Complaint Information Form
(Attachment l) by Orphan Medical Quality Assurance Department.
At this time the complaint 16 reviewed by Quality Assurance
and Regulatory Affairs and determined whether or not the
complaint is an Adverse Drug Reaction.
3.3 The Quality Assurance Department will assign a Complaint
Number consisting of a eight digit number. The first three
numbers will be sequential starting with 00l and the remaining
five numbers signifying the product and package size.
3.4 The Quality Assurance Department will log the information in
the Product Complaint Log Attachment 2).
3.5 The Director of Quality Assurance or designee will initiate an
investigation and complete the Complaint Investigation Plan
(Attachment 3) and forward a copy to the Contract
Manufacturer, Packager or Distributor responsible for
investigation of the complaint.
3.6 Coordination of complaint sample retrieval is the
responsibility of the Quality Assurance Department.
3.7 The Quality Assurance Department notifies the Marketing
Department by sending a copy of the completed Complaint
Information Form. The Marketing Department will send a form
letter (Attachment 4) acknowledging receipt of the complaint
with a copy of the letter forwarded to the Quality Assurance
Department for filing.
3.6 Upon completion of the investigation the Director of Quality
Assurance or designee will complete the Complaint
Investigation Report (Attachment 5). Copies of this report are
forwarded to all relevant parties, including the Product
Manager, Director of New Product Development, Regulatory
Affairs Department and the President. The original is filed in
the complaint file.
3.9 The Marketing Department is responsible for writing the final
response to the customer.
3.10 File retention: Complaint files are kept for one year past
expiration date of the product or one year after the date the
complaint was received, whichever is longer.
3.11 Retention of Complaint samples is determined by the Quality
Assurance Department.
4.0 DOCUMENT APPROVAL
---------------------------------- ------------
Quality Assurance Date
---------------------------------- ------------
Director of Regulatory Affairs Date
---------------------------------- ------------
Vice President of Date
Regulatory Affairs
---------------------------------- ------------
President Date
Effective Date:__________________
COMPLAINT INFORMATION FORM QA-006 REV 0
ATTACHMENT 1
l. Complaint Number Assigned by QA):___________________Date Rec'd:___________
2. Product Name:_____________________________________________________________
3. Nature of complaint:________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
4. Name of caller:___________________________________________________________
5. Title of caller(if healthcare professional):______________________________
6. Company name:_____________________________________________________________
7. Company or caller' s address:_______________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
8. Phone number:_____________________________________________________________
9. Product NDC#:_____________________________________________________________
10. Lot number:_______________________________________________________________
11. Expiration Date:__________________________________________________________
12. Is there a sample of the product available?: (yes) (no)
13. Amount of product to be returned:_________________________________________
Signature of person completing this form:______________________________________
-------------------------------------------------------------------------------
Numbers 14 and 15 to be completed by Quality Assurance and Regulatory Affairs
Jointly.
14. Is the complaint an Adverse Drug Reactions (yes) (no)
15. If yes, what type: ___________Expected ___________Unexpected
___________Non-serious ___________Serious
Determined by:__________________________ Date:_____________________________
Copies of this form sent to: Regulatory Affairs, Product Director, Director of
New Product Development and President
Product Complaint Log
QA-006 Rev 0
Attachment 2
Product name;____________________________________
Your complaint received:____________________________
=========================================================================================================================
Complaint Date Complaint Description Customer Name and Address NDC Lot Date CIR
Number Rec'd Number Number Approved
------------- --------- -------------------------------- ----------------------------- ---------- ------- ---------------
------------- --------- -------------------------------- ----------------------------- ---------- ------- ---------------
------------- --------- -------------------------------- ----------------------------- ---------- ------- ---------------
------------- --------- -------------------------------- ----------------------------- ---------- ------- ---------------
------------- --------- -------------------------------- ----------------------------- ---------- ------- ---------------
------------- --------- -------------------------------- ----------------------------- ---------- ------- ---------------
=========================================================================================================================
COMPLAINT INVESTIGATION PLAN
QA-006 REV 0
ATTACHMENT 3
Complaint number:______________________________________________________________
Product name:__________________________________________________________________
Product strength:____________________________
Lot number:__________________________________Expiration date___________________
NDC number:__________________________________Package size:_____________________
Complaint summary:_____________________________________________________________
QA-006 REV 0
ATTACHMENT 4
Form Letter Example
Date
Name
Health Care Institute
Street Address
City and State
Dear________________
Regarding: (Product or the problem)
Thank you for taking the time for calling/writing to express your concern about
the quality of our name of product product.
We are presently investigating the situation you have described and will
communicate the results to you at the earliest opportunity.
Thank you again for your concern. Maintaining the highest standards of product
quality is extremely important to us. We will do whatever is needed to assure
satisfaction of our customers.
Sincerely yours,
(To be completed by the Marketing Department)
AVRECO Inc.
00 X XXXXXXX XX. - 12TH FLOOR - CHICAGO, 11 60003-7099 - (000)000-0000 -
0-000-XXX-XXXX - FAX: (000) 000-0000
EVIDENCE OF INSURANCE
ISSUED TO: Levy & Associates
0000 Xxxxx Xxxx Xxxx
Xxxxxxxxxxx, XX 00000
THIS IS TO CERTIFY that the undersigned Insurance Brokers have procured
insurance as hereinafter specified from certain Underwriters and/or Companies.
ASSURED: Orphan Medical Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
AMOUNT OF LIMITS:
$3,000,000 Each Occ./$3,000,000 Aggregate
SUBJECT TO: $50,000/$250,000. Deductible
Each Claim including Claim Expense
Defense Costs are including in the Limit.
COVERAGE.: Product/Completed Operations including Contractual. B.F.
Vendors, Coverage Afforded For Products as Used in Clinical
Trail as Specified,
CARRIER: Steadfast Insurance Company
#SPC3655560-00
REMARKS: TERMS & CONDITIONS: EXCLUDE - Absolute Pollution, Asbestos,
Accutane, Birth Control Pill, Drug or Devices, DES,
LTryptophan, Swine Flu Vaccine, Non-FDA Approved Products.
Silent on Punitive Damages.
METRO DATE: 3/1/95
Extended Reporting Period:
Basic: Standard ISO, Supplemental - Seven Year ERP, No
Reinstatement of Aggregate at Maximum 200% of Premium.
TERM OF COVERAGE: From: 03-01-96 To: 03-01-97
THE ABOVE INSURANCE IS SUBJECT TO THE CONDITIONS AND TERMS OF THE CURRENT
POLICY(IES) NOW IN FORCE.
IT IS AGREED THAT SHOULD THE ABOVE DESCRIBED INSURANCE BE CANCELED OR MATERIALLY
CHANGES, WE THE UNDERSIGNED WILL ENDEAVOR TO GIVE TEN (1O) DAYS PRIOR NOTICE, IN
WRITING, TO THE ENTITY TO WHOM THIS FORM IS ISSUED BUT FAILURE TO GIVE SUCH
NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY UPON THE UNDERSIGNED OR THE
INSURERS.
DATE: March 6, 1996 By: _______________________________________
Attn: Xxxxx Xxxx
*THIS INSURANCE IS ISSUED PURSUANT TO THE
MINNESOTA SURPLUS LINES INSURANCE ACT. THE
INSURER IS AN ELIGIBLE SURPLUS LINES INSURER
BUT IS NOT OTHERWISE LICENSED BY THE STATE
OF MINNESOTA. IN CASE OF INSOLVENCY, PAYMENT
OF CLAIMS IS NOT GUARANTEED.*
