Exhibit 10.1
[NOTICE : Confidential treatment has been requested for portions of this
document and the confidential material has been filed separately with the SEC.]
SPECIALTY PHARMACY
FUZEON(R) AGREEMENT
THIS AGREEMENT is entered into as of this 7th day of March, 2003, by
and between Chronimed Inc. located at 00000 Xxx Xxxxxx Xxxxx, Xxxxxxxxxx, XX.
00000 ("Chronimed"), and Roche Laboratories Inc. located at 000 Xxxxxxxxx
Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, ("Roche").
Whereas, Roche has developed, manufactured, and have sought U.S. Food
and Drug Administration approval to sell the Fuzeon brand of Enfuvirtide
("Fuzeon"); and
Whereas, Roche seeks to launch Fuzeon and anticipate that demand for
Fuzeon may exceed supply; and
Whereas, Roche seeks to establish a progressive distribution program by
which Fuzeon can be effectively introduced to and distribution managed in the
marketplace; and
Whereas, Chronimed has the expertise to facilitate the Fuzeon launch
and manage market demand for limited product supply from a central distribution
facility;
Now, Therefore, the parties agree as follows:
1. DEFINITIONS
1.1 CHRONIMED LOCATIONS shall mean those Chronimed or StatScript
Pharmacy distribution and dispensing facilities identified in
EXHIBIT A, CHRONIMED LOCATIONS.
1.2 CREDIT AVAILABILITY shall mean the amount of open, unsecured
credit that Roche is willing to extend to Chronimed at any one
time in purchasing Fuzeon pursuant to this Agreement.
1.3 DIRECT ACCOUNT AGREEMENT shall mean the general product sale
agreement entered among Roche Laboratories and Chronimed
effective March 8, 1999.
1.4 ENROLLED PATIENT shall mean an HIV/AIDS patient who meets the
eligibility criteria, if any, identified in EXHIBIT B, PATIENT
WAIT LIST, for receipt of Fuzeon, for whom a patient profile
and other data are maintained by Chronimed, is receiving
Fuzeon and is considered "active", as that term is defined in
EXHIBIT B, PATIENT WAIT LIST.
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1.5 EXPANDED ACCESS PROGRAM shall mean the Roche program initiated
for limited, pre-FDA approval distribution of Fuzeon for
qualified compassionate use patients.
1.6 HIPAA shall mean the Health Insurance Portability and
Accountability Act of 1996 and amendments or regulations
promulgated pursuant thereto, including specifically but not
exclusively 45 CFR Parts 160 and 164.
1.7 LAUNCH shall mean, with respect to the introduction of Fuzeon
for distribution into the market, the date on which Chronimed
first ships Fuzeon to a customer.
1.8 LONGITUDINAL DATABASE shall mean the data fields and elements
in the database management application created, modified,
utilized or populated pursuant to this Agreement and
identifying the therapeutic experience of Fuzeon Enrolled
Patients.
1.9 PATIENT ASSISTANCE PROGRAM shall mean Roche's program to make
Fuzeon available to eligible patients who lack adequate
benefits or financial resources.
1.10 PATIENT WAIT LIST shall mean the database maintained by
Chronimed of all patients with current valid prescriptions for
Fuzeon and who are potentially eligible for receipt of Fuzeon.
1.11 PRIME shall mean the current prime lending rate as published
in the Wall Street Journal.
1.12 REGULATORY APPROVAL shall mean the approval by any
governmental regulatory body having jurisdiction over the
manufacture, distribution, sale, or use of Fuzeon in the
Territory, including any Fuzeon registration or license,
pricing or reimbursement approval, and any amendments thereto.
1.13 TERM shall mean the period of time commencing upon the
Effective Date and continuing for one year following the -
date of Launch.
1.14 TERRITORY shall mean the United States, its territories and
protectorates.
1.15 WAC shall mean the Wholesale Acquisition Cost, as determined
by Roche. WAC is the list price for wholesalers, distributors
and other direct accounts before any rebates, discounts,
stocking or distribution allowances, chargebacks, and/or other
price concessions that may be offered by Roche.
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2. GRANT OF DISTRIBUTION RIGHTS
2.1 In accordance with the terms and conditions of this Agreement,
and during the Term of this Agreement, Roche grants to Chronimed and Chronimed
accepts the exclusive right to distribute and sell Fuzeon, and the non-exclusive
right to market Fuzeon, within the Territory. During the Term of this Agreement,
Roche shall not appoint any other distributor for Fuzeon within the Territory,
undertake any effort to distribute or sell Fuzeon within the Territory contrary
to Chronimed's exclusive rights, nor grant rights to market Fuzeon within the
Territory detrimental to Chronimed's distribution and sales during the Term.
This restriction will not apply to patients either in clinical trials or the
Expanded Access Program.
2.2 Any Fuzeon sale, purchase and distribution among or by the
parties following expiration of the Term of this Agreement will be governed by
the parties' Direct Account Agreement.
2.3 Chronimed acknowledges that Roche may utilize the services of
other non-pharmacy vendors in the distribution of Fuzeon, including, but not
limited to, reimbursement assistance and nursing communications. Chronimed
represents and agrees that it is ready, willing and able and agrees to work with
such other Roche vendors on a cooperative basis to provide satisfactory patient
service and support.
2.4 Chronimed represents and warrants that it is licensed to
dispense and able to ship (either directly or through agents or network
pharmacies) Fuzeon in the Territory, and Chronimed will utilize commercially
reasonable and diligent efforts to fulfill its duties as exclusive distributor
for Fuzeon during the Term.
3. CONSIGNMENT AND SALE OF FUZEON
3.1 (a) Roche will consign Fuzeon to Chronimed and Chronimed
will receive, store, distribute and sell Fuzeon according to the terms herein.
Title to consigned Fuzeon will remain exclusively with Roche, whether or not
commingled with Chronimed's inventory, until identified for sale to a Chronimed
customer. Identification for Chronimed customer sale, and transfer of Roche's
title and sale to Chronimed, shall occur on an individual SKU basis when the SKU
of Fuzeon is moved from Chronimed's warehouse bulk storage area to the Chronimed
distribution initial staging area. Until that time, all Fuzeon will be held in
trust for the benefit of and subject to the direction and control of Roche, and
Roche will hold a first priority lien on and purchase money security interest
pursuant to the UCC in all such consigned Fuzeon. After title to any of the
consigned Fuzeon has transferred to Chronimed as set forth above, Roche will
continue to hold a first priority lien on and purchase money security interest
in Chronimed's inventory of Fuzeon. Consigned Fuzeon will include exchanges,
replacements or returns of consigned Fuzeon.
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(b) During the term of this Agreement or prior to the
payment in full by Chronimed to Roche of all amounts required to be paid to
Roche hereunder, Chronimed hereby assigns and transfers to Roche, and grants
Roche a continuing first priority, purchase money security interest, pursuant to
the Uniform Commercial Code as in effect in any relevant jurisdiction in the
United States (the "UCC"), in all Fuzeon Inventory. Chronimed represents,
warrants and covenants to Roche that it will not pledge either the consigned
Fuzeon or Fuzeon with respect to which title has been transferred to Chronimed
as security, and shall not hold out to any third party, that the consigned
Fuzeon with respect to which title has not been transferred to Chronimed is
Chronimed inventory or the property of anyone other than Roche.
3.2 Roche and Chronimed each will identify a project manager to
communicate and coordinate the parties' respective inventory management
activities including, but not limited to, Fuzeon availability, ordering,
shipping and storage. Chronimed will submit written or EDI Fuzeon shipment
orders to Roche following periodic inventory manager conferences, to be
conducted not less than monthly. Inventory conferences will be directed toward
maximizing the number of patients receiving Fuzeon, subject to Roche's supply
constraints. Roche will ship Fuzeon without charge to Chronimed's Minnetonka
storage and distribution facility promptly following Roche's acknowledgment and
acceptance of a purchase order. Roche will have the discretion to determine the
volume of Fuzeon to be shipped to Chronimed. Chronimed will notify Roche in
writing of any damaged or otherwise non-conforming Fuzeon shipment within 48
hours following receipt by Chronimed. Roche will bear the cost of return of any
damaged or non-conforming Fuzeon upon such Chronimed notice. Chronimed will bear
the risk of loss for Fuzeon damaged or stolen after receipt at the Chronimed
facility.
3.3 i) During the term of this Agreement, Chronimed will
provide Roche with weekly written reports detailing daily Fuzeon sales to
Chronimed. Weekly reports will cover Fuzeon sales to Chronimed, on a
Friday-to-Thursday cycle, through the close of business Thursday for each week
of the Term. Roche will invoice Chronimed on a weekly basis for all Fuzeon sales
to Chronimed. [XXXXXXX] Chronimed will pay such Roche invoices within 30 days
following the date of invoice. No stocking allowances, contract rebates or
prompt pay discounts will be allowed.
The maximum unsecured amount that can be due from Chronimed to Roche at
any one time cannot exceed the assigned Credit Availability. In the event that
Chronimed is required by the terms of this Agreement to purchase additional
Fuzeon in an amount that would require the total amount due to exceed the
assigned Credit Availability then the parties must comply with the provisions of
Section 3.3 (iv) before Roche will ship the additional Fuzeon.
ii) During the term of this Agreement, Chronimed will
invoice Roche on a monthly basis for storage charges, and for the other
enumerated services at the described frequencies, as provided in EXHIBIT C,
CHRONIMED PRICING. Roche will pay Chronimed invoices within 30 days following
date of invoice.
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iii) The parties agree to remit all payments due by
electronic funds transfer or other mutually acceptable EDI format. Appropriate
wire transfer instructions will be provided in writing by each party and
Chronimed will complete a Roche EDI trading partner authorization form. The
parties reserve the right of recoupment or off-set, without prejudice to any
other remedy or right, with respect to sums due and unpaid.
iv) Roche agrees to provide Chronimed with a quarterly
update of Roche's evaluation of Chronimed's credit worthiness and assigned
Credit Availability. In the event that the operating results or financial
strength of Chronimed are, in Roche's evaluation, unable to support an increase
in Chronimed's existing Credit Availability for the Fuzeon product line,
Chronimed agrees to prepay invoices at Roche's instructions, in order for
additional shipments to be made. Roche will provide Chronimed not less than 30
days advance notice of Roche's intention to require pre-payment in amounts of
[XXXX]. In the event of such pre-payment, Roche will provide an Adjustment of
the selected invoice amounts. This Adjustment will be calculated according to
the following formula:
Adjustment = Interest Rate x Invoice Amount x Adjustment
Multiplier
whereby the:
Interest Rate = [XXXX] ;
Invoice Amount = face amount of the invoice subject to the
adjustment; and
Adjustment Multiplier = the number of full days an invoice is
paid in advance of the 30th day
following the invoice date, divided by
360.
In the event Chronimed is unable to obtain the necessary
funding to make a pre-payment, and as a result, pending orders cannot be
shipped, Chronimed would be in material breach of the Agreement and Roche, in
its sole and unreviewable discretion, could exercise its option to terminate
this Agreement as further outlined in Section 13.3.
3.4 During the Term of the Agreement, Chronimed agrees that it
(including any agents or network pharmacies utilized by Chronimed) will charge,
xxxx or invoice all customers (including patients or ultimate payors) [XXXX].
For third party payors with whom Chronimed is not already a contracted provider,
[XXXX]. Notwithstanding the above, this provision does not prohibit Chronimed
from charging a price [XXXX] or as required by a pre-existing agreement. The
parties agree that any failure to comply with the terms of this Section 3.4
shall constitute a material breach for purposes of Article 13 "Term and
Termination".
3.5 The parties agree that Roche will file a financing statement
and take other steps Roche deems necessary or appropriate to establish, maintain
and protect its rights and security interest in both the consigned Fuzeon and
the Fuzeon with respect to which title has been transferred to Chronimed
inventory. Roche is authorized to execute and
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deliver on behalf of Chronimed, such financing statements or other instruments
or to file any such financing statements without the signature of Chronimed to
the extent permitted by law. Chronimed agrees to cooperate with Roche's
perfection, maintenance protection and enforcement of its security interest in
such Fuzeon inventory. Chronimed represents it has requisite authorization from
its lending institutions to permit implementation of this security interest.
Notwithstanding the foregoing provisions of this Section 3.5, the parties
acknowledge and agree that this is a true consignment with respect to the Fuzeon
delivered to Chronimed at all times prior to the transfer of title to said
Fuzeon as set forth in Section 3.1(a) above.
3.6 The parties each will identify a principal accounts
payable/receivable manager for purposes of communicating and coordinating the
parties' respective issuance, processing, and payment of invoices. The parties'
accounts payable/receivable managers will establish a mutually acceptable
process for issuance and resolution of any credit or debit memoranda and will
confer as necessary to address financial account management.
3.7 Chronimed hereby acknowledges and agrees to cooperate fully in
the prompt return of Roche owned Fuzeon to Roche or another distribution company
as may be advised by Roche and to not make any claim of ownership to Roche owned
Fuzeon in the event of any insolvency filing under State or Federal law or other
event which may substantially compromise the ability of Chronimed to perform
hereunder. In the event of any such insolvency filing by or against Chronimed,
Chronimed agrees that Roche shall be entitled to relief from the automatic stay
to allow Roche to take possession of all unsold Fuzeon in order to deliver such
Fuzeon to patients by means of an alternative distributor or pharmacy, and shall
support and not oppose or assert any defense to any motion Roche might file
seeking such relief. Additionally, in the event of termination for breach,
Chronimed agrees to cooperate fully in returning the consigned inventory to
Roche.
4. CHRONIMED WAREHOUSE AND SUPPLY OBLIGATIONS
4.1 During the Term of this Agreement, Chronimed will maintain
adequate, dedicated secure storage space for Fuzeon inventory at its Minnetonka,
Minnesota facility, consistent with the standards in EXHIBIT D, PERFORMANCE
STANDARDS. Chronimed's Fuzeon storage space environment will be maintained
consistent with Roche's Fuzeon label specifications, as well as all regulations
regarding the storage of pharmaceuticals, specifically 21 CFR Parts 210 and 211.
Chronimed will apply First In First Out inventory management practices to its
distribution or sale of Fuzeon. Roche will endeavor to ship all Fuzeon on or
after June 1, 2003 such that it will arrive at Chronimed's Minnetonka facility
with not less than twelve months product dating. Roche will not accept product
returns for lack of adequate dating, unless product dating was less than twelve
months, upon receipt at the Chronimed facility, and Chronimed can demonstrate
that despite its FIFO inventory management programs, Product could not be
supplied to patient prior to expiration date. Chronimed will destroy by
incineration and not resell any Fuzeon returned to it by a customer or patient
and will report monthly the
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total of any such returns. Chronimed will not provide return credits or
reimbursement to customers returning Fuzeon.
4.2 During the Term of this Agreement, and subject to supply by
Xxxxx, Xxxxxxxxx will maintain on-hand quantities of Fuzeon sufficient to
provide all Enrolled Patients with a continuous supply of Fuzeon. At Roche's
discretion, Roche may consign and Chronimed will maintain an on-hand inventory
of Fuzeon sufficient to provide each Enrolled Patient up to a six-month
continuous supply. Chronimed may adjust its inventory levels of Fuzeon to
reflect decreased demand due to Enrolled Patients who may become inactive.
Enrolled patients may be deemed inactive in the event they fail to order Fuzeon
for more than two consecutive months, for reasons other than supply limitations
caused by Roche or Chronimed. The parties will periodically review these on-hand
inventory requirements.
4.3 During the term of this Agreement, in addition to the Fuzeon
storage capabilities at its Minnetonka, Minnesota facility, the parties will
confer regarding the advisability of Chronimed maintaining appropriate levels of
consigned Fuzeon inventory at additional warehouse facilities or other Chronimed
Locations, on mutually acceptable terms. All Fuzeon maintained at any additional
warehouse facilities or other Chronimed Locations will be stored under mutually
acceptable conditions in secure, climate controlled environments and tracked on
Chronimed's central inventory tracking system, and be subject to all other
performance standards in EXHIBIT D.
4.4 In the event of termination or non-renewal of Chronimed's
exclusive distribution rights under this Agreement, the parties will promptly
confer to identify Chronimed's reasonably estimable, post-termination
requirements for its on-hand inventory of Fuzeon. Chronimed will make good faith
efforts to reduce, by sales to other wholesalers, providers or pharmacies, any
on-hand inventory the parties deem to exceed Chronimed's estimable requirements.
In the event Chronimed is unable, after good faith efforts, to sell any excess
inventory, Chronimed may purchase consigned inventory from Roche or return
consigned inventory without obligation to purchase. Chronimed will also adhere
to the Transition Plan set forth in EXHIBIT G, TRANSITION PLAN.
4.5 [XXXX], Roche may terminate this Agreement upon 60 days
advance written notice. No termination of the Agreement under this Section 4.5
may occur earlier than the sixth month anniversary of the Launch date. In the
event of termination after (6) months, and prior to twelve (12) months, Roche
shall pay Chronimed an early termination fee determined by [XXXX].
4.6 Chronimed will make available to Roche the necessary access in
order for Roche to take a physical inventory of Fuzeon on hand at any Chronimed
facilities as necessary. The conduct of any physical inventory is at the sole
discretion of Roche and will be at Roche's expense. Roche will cover reasonable
expenses incurred by Chronimed in association with any physical inventory. Roche
will give Chronimed at least one day's advance notice of its desire to conduct a
physical inventory at Chronimed.
5. CHRONIMED PATIENT SERVICES
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5.1 During the Term of this Agreement, Chronimed will create and
maintain a patient eligibility review process by which prospective Fuzeon
patients will be identified, evaluated and accepted to receive Fuzeon. All
potential Fuzeon patients identified by or to Chronimed will be placed on the
Patient Wait List. The parties will each designate a project manager to
communicate and coordinate the parties' respective responsibilities related to
Wait List management. The Patient Wait List will be managed in accordance with
and contain the information described in EXHIBIT B, PATIENT WAIT LIST. Chronimed
will actively manage the patient eligibility process to assure the earliest
feasible commencement of Fuzeon delivery to newly Enrolled Patients.
5.2 Chronimed will maintain and operate a secure warehouse, a
patient call center and dispensing facility, implement patient education
programs, and conduct patient adherence and persistence programs consistent with
its standard operating procedures and according to the schedule for services
identified in EXHIBIT D, PERFORMANCE STANDARDS.
5.3 Chronimed will not utilize any information received or any
patient interaction occurring pursuant to this Agreement to solicit Enrolled
Patients to provide any other pharmaceutical products. This restriction shall
not apply to Enrolled Patients with whom Chronimed has or had a prior provider
relationship. Chronimed agrees to include a local pharmacy reminder notice in
each shipment in a form similar to that contained in EXHIBIT D, PERFORMANCE
STANDARDS.
6. CHRONIMED BILLING AND REIMBURSEMENT
6.1 Chronimed will, as an element of its patient intake process,
attempt to identify insurance or other drug benefits coverage for Enrolled
Patients. Chronimed will coordinate, on behalf of Enrolled Patients, benefit
claims submission to procure reimbursement for Fuzeon. Chronimed will seek
reimbursement for Fuzeon from Enrolled Patients and their insurers according to
individual patient benefits plan design. Except as specifically stated in this
Agreement, or otherwise waived in writing by Chronimed on a case-by-case basis,
nothing herein shall prohibit or restrict Chronimed's right to seek or collect
patient co-payments, co-insurance, or other personal obligations to pay for
Fuzeon orders, in whole or in part, on or after the date of shipment.
6.2 In the event an Enrolled Patient lacks sufficient benefits
coverage, coverage is denied by an Enrolled Patient's insurance carrier, an
Enrolled Patient does not qualify for or receive governmental drug benefits, or
an Enrolled Patient is otherwise unable to pay for Fuzeon treatment, then
Chronimed will refer such Enrolled Patient to Roche, or its currently designated
vendor for further evaluation and possible admission to the Patient Assistance
Program.
6.3 Chronimed reserves the right to terminate services to any
Enrolled Patients, upon prior notice to and consultation with Roche, for whom
Chronimed has been unable to obtain payment, including benefits claims,
co-payments, coinsurance, deductibles, or other payment obligations, for more
than 60 days after the date of service generating the payment obligation.
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6.4 In the event an Enrolled Patient is entitled to benefits under
a non-Medicaid, government funded or subsidized program such as Xxxx Xxxxx,
ADAP, PHS pricing, or the VA system, Chronimed will facilitate and document such
patient's Fuzeon distribution and pricing sufficient to submit appropriate
credits to Roche, pursuant to the terms and procedures identified in EXHIBIT E,
TRANSACTION ADJUSTMENTS.
7. FUZEON TRACKING AND REPORTING
7.1 Chronimed will utilize Roche's code terminology to maintain
sales records of all Fuzeon lot and code numbers sufficient to support any
product notification or recall as may be required by Roche or the Food and Drug
Administration. Chronimed will make its Fuzeon inventory and sales records
available to Roche and Trimeris, Inc. on a daily basis, or to the FDA as
required by law, subject to any patient confidentiality restrictions imposed by
law.
7.2 Chronimed will provide Roche and Trimeris, Inc. with periodic
sales and process reports as identified in EXHIBIT F, REPORTS.
7.3 In addition to the Patient Wait List, Chronimed will develop
and maintain a Longitudinal Database for purposes of tracking Fuzeon therapeutic
efficacy. The Longitudinal Database will consist solely of De-identified Health
Information, as defined under 45 CFR Part 164.514 and, at Roche's election, will
be an optional opt-in program for Enrolled Patients. The Longitudinal Database
will be designed and access provided to Roche according to the terms of EXHIBIT
H, LONGITUDINAL DATABASE. [XXXX]
7.4 In the event an Enrolled Patient receives Fuzeon from a
pharmacy or provider other than Chronimed during the term of this Agreement,
Chronimed will accept, to the extent furnished, information from the Enrolled
Patients' other pharmacies or providers for inclusion in the Patient Wait List
and Longitudinal Database.
7.5 Chronimed will maintain a system and process for receiving,
maintaining, and promptly reporting to Roche any adverse Fuzeon events, as
defined and required by the FDA, or identified in Title 21 of the Code of
Federal Regulations, including GMPs and annual reports.
7.6 Neither party shall use or disclose, directly or indirectly,
any Protected Health Information ("PHI"), as that term is defined under 45 CFR
Parts 160 and 164 (the Department of Health and Human Services "Privacy Rules"),
except as required under this Agreement and permitted by the Privacy Rules.
Chronimed may permit its employees, officers and agents to have access to and
use the minimum necessary amount of PHI required to permit Chronimed to perform
its contractual obligations under this Agreement. Roche shall be entitled to
audit Chronimed's use of, and procedures to protect, PHI during regular business
hours upon reasonable advance notice.
A party may disclose PHI (i) as reasonably necessary to its auditors,
accountants, counsel, and regulators who have entered a written business
associate agreement to maintain the confidentiality of PHI, and (ii) to comply
with a properly authorized civil,
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criminal or regulatory investigation or subpoena or summons issued by a federal,
state or local authority, and respond to judicial process.
Each party shall implement adequate safeguards to assure the security
and confidentiality of PHI, including without limitation, the following: (i)
requiring employees, subcontractors and agents to maintain the strict security
and confidentiality of PHI as required under this Agreement and the Privacy
Rules; (ii) immediately reporting to the other party any use or disclosure of
PHI prohibited by the terms of this Agreement or the Privacy Rules; (iii)
implementing adequate technological safeguards to prevent unauthorized access or
interception of PHI; and (iv) not using or disclosing PHI in any manner that
would violate the Privacy Rules.
8. ROCHE'S OBLIGATIONS
8.1 Roche shall procure and maintain all necessary FDA or other
Regulatory Approvals for the manufacture, sale and use of Fuzeon within the
Territory.
8.2 Roche will consign to Chronimed all of Chronimed's
requirements of Fuzeon necessary to support all Enrolled Patients, subject to
the distribution management processes identified herein, Roche's supply
constraints, clinical trial supplies, and possible inventory requirement
modifications as determined by Roche.
8.3 Roche will pay Chronimed for the Chronimed services identified
in EXHIBIT C, CHRONIMED PRICING, according to the terms of this Agreement and
EXHIBIT C.
8.4 Roche will be solely responsible for determining the patient
eligibility requirements, if any, identified in EXHIBIT B, PATIENT WAIT LIST. In
the event Roche deems it necessary to modify the eligibility criteria during the
Term of this Agreement, Roche shall provide Chronimed with not less than 60 days
prior notice of such modification.
8.5 Roche will maintain an Enrolled Patient hardship program
consistent with the criteria identified in EXHIBIT I, ROCHE PATIENT ASSISTANCE
PROGRAM. In the event an Enrolled Patient is admitted to Roche's hardship
program, Chronimed shall be reimbursed for its services to such patient
according to the terms of EXHIBIT E, TRANSACTION ADJUSTMENTS.
8.6 Roche shall initially bear the expense of any Fuzeon recall or
product alert, whether ordered by the FDA or undertaken by Roche upon its own
initiative. Expenses shall include costs associated with patient notification,
product return shipping, and reasonable staffing time and expense to facilitate
the recall. The ultimate allocation of recall expense will be determined by the
respective fault of the parties by reason of their acts or negligence which
contribute to the need for such recall.
8.7 Roche warrants that it will manufacture Fuzeon in accordance
with FDA manufacturing requirements, with the Fuzeon specifications for which
FDA approval has been or will be obtained, and in compliance with any other
applicable regulatory
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approvals. Roche warrants that Fuzeon shipped by it under this Agreement shall,
at the time of shipment and for the shelf-life of the Fuzeon when stored and
handled in compliance with label specifications (i) meet all FDA approved
specifications for the shelf-life of the Fuzeon, (ii) be manufactured in
accordance with all applicable laws and regulations, and (iii) not be
adulterated or misbranded as a result of any act by or under the control of
Roche.
9. COMPLIANCE
9.1 During the Term of this Agreement, Chronimed and its
professional employees will maintain all necessary licenses, registrations and
qualifications to provide the distribution, pharmacy, and billing services
identified in this Agreement. Chronimed shall immediately notify Roche in the
event any such license, registrations or qualification has been suspended,
revoked, or denied.
9.2 The parties shall comply with all applicable laws,
regulations, rules and orders, specifically including without limitation the
provisions of 42 U.S.C. Section 1320a-7b prohibiting illegal remuneration, by
accurately and fully disclosing all discounts, rebates, and any other price
concessions related to or generated as a result of this Agreement (i) in the
costs claimed or charges made under Medicaid/Medicare programs or any other
similar federal or state programs, or (ii) when providing any pricing
information to such agencies, programs, or other third party payors.
9.3 The parties shall comply with all applicable provisions of
HIPAA, as specifically established in 45 CFR parts 160 and 164, and any further
amendments or regulations adopted pursuant thereto.
9.4 The parties agree to comply with the provisions of all
applicable laws, regulations, rules and orders including, but not limited to,
the Federal Food, Drug & Cosmetic Act, the Prescription Drug Marketing Act, and
all regulations, rules and orders promulgated thereunder. Any violation by a
party of said laws, rules, regulations or orders relating to Fuzeon shall
constitute a material breach of this Agreement.
10. INSURANCE
Each of the parties shall maintain insurance coverage as follows:
10.1 WORKER COMPENSATION, INCLUDING OCCUPATIONAL DISEASE
i) Statutory limits of each of the States in which a party
employs its workforce; and
ii) Employers Liability Insurance with minimum limits of $500,000
per occurrence and a $1,000,000 disease policy limit.
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10.2 COMPREHENSIVE GENERAL LIABILITY INSURANCE with minimum limits
of $5,000,000 per occurrence and $10,000,000 aggregate for bodily injury and
property damage.
i) The General Liability Insurance will also provide coverage for
Broad Form Contractual Liability Insurance. This Broad Form
Contractual Liability Insurance will insure the hold harmless
and indemnification provisions contained in Section 11 of the
contract.
ii) In addition to Comprehensive General Liability Insurance,
Chronimed will also provide All Risk Property Insurance in an
amount sufficient to cover the value, at WAC, of all Roche
Fuzeon held on consignment and under the care, custody and
control of Chronimed. Roche will be named as the loss payee
for this coverage.
iii) The General Liability Insurance will also provide Completed
Operations Insurance for a term of two (2) years, which term
shall commence upon termination of this Agreement.
iv) The exclusion in the General Liability Policy, commonly
referred to as x, c, u exclusion, shall be deleted from the
Policy.
10.3 COMPREHENSIVE AUTOMOBILE INSURANCE covering the insured party
for claims arising from owned, hired, and non-owned vehicles for bodily injury
and property damage with minimum limits of $2,000,000 per occurrence and
$2,000,000 aggregate.
10.4 EXCESS LIABILITY INSURANCE
A party may fulfill its insurance obligations under this Section 10 by
providing $1,000,000 primary coverage limits for General Liability and for
Automobile Liability, and by providing excess or umbrella liability insurance
with minimum limits of $9,000,000 per occurrence and $9,000,000 aggregate in
excess of the primary coverage limits, but only so long as such excess policy
includes Broad Form Contractual Liability, Broad Form Property Damage, and
Completed Operations coverage.
10.5 ADDITIONAL INVENTORY INSURANCE COVERAGE
In the event Roche requires Chronimed to maintain inventory levels of
Fuzeon valued in excess of [XXXX], the parties may mutually determine
appropriate additional levels of Chronimed coverage insuring such excess
inventory. Roche shall reimburse Chronimed for the additional premium expense of
any such additional coverage.
11. INDEMNIFICATION
11.1 Chronimed agrees to defend, indemnify and hold harmless Roche
and its officers, directors and employees from and against all demands, claims,
actions, causes of action, assessments, liabilities, losses, damages, costs and
expenses including without
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limitation interest, penalties and disbursements, (collectively, "Damages"),
insofar as such Damages are imposed upon or incurred by Roche, or its officers,
directors and employees as a proximate result of (i) a breach by Chronimed of
the terms and conditions of this Agreement, or any misrepresentation or breach
of the representations made by Chronimed in this Agreement, or (ii) any
negligence or willful misconduct of Chronimed.
11.2 Roche agrees to defend, indemnify and hold harmless Chronimed
and its officers, directors and employees from and against all Damages, insofar
as the same are imposed upon or incurred by Chronimed, or its officers,
directors and employees as a proximate result of (i) a breach by Roche of the
terms and conditions of this Agreement, or any misrepresentation or breach of
the representation made by Roche in this Agreement, or (ii) any negligence or
willful misconduct of Roche.
11.3 The obligations and liabilities of the indemnifying party to
the party to be indemnified with respect to claims resulting from the assertion
of liability by third parties shall be subject to the following terms and
conditions:
(a) within twenty (20) days after (i) receipt of notice of
commencement of any action, (ii) receipt of a written assertion of any claim by
a third party, or (iii) the party to be indemnified obtains actual knowledge
that an event giving rise to any indemnity obligation has arisen, the party to
be indemnified shall give the indemnifying party written notice thereof
specifying the factual basis of the claim in reasonable detail to the extent
then known to the party to be indemnified, together with a copy of such claim,
process or other legal pleading, if applicable, (provided that failure so to
notify the indemnifying party of the assertion of a claim within such period
shall not affect its indemnity obligation hereunder except as and to the extent
that such failure shall adversely affect the defense of such claim), and the
indemnifying party shall have the right to undertake the defense thereof by
representatives of its own choosing who shall be reasonably satisfactory to
indemnified party;
(b) in the case of a third party claim, in the event that the
indemnifying party, by the 30th day after receipt of notice of any such claim
(or, if earlier, by the tenth day preceding the day on which an answer or other
pleading must be served in order to prevent judgment by default in favor of the
person asserting such claim) does not elect to defend against such claim, the
party to be indemnified will (upon further notice to the indemnifying party)
have the right to undertake the defense, compromise or settlement of such claim
on behalf of and for the account and risk of the indemnifying party, subject to
the right of the indemnifying party, with the consent of the indemnified party,
to assume the defense of such claim at any time prior to settlement, compromise
or final determination thereof;
(c) anything in this Section 11.3 to the contrary
notwithstanding, if there is a reasonable probability that a claim may
materially and adversely affect the indemnified party other than as a result of
money damages or other money payments, the indemnified party shall have the
right, at its own cost and expense, to compromise or settle such claim,
provided, however, that the indemnified party shall not, without prior written
consent of the indemnifying party, settle or compromise any claim or consent to
the entry of any judgment which does not include as an unconditional term
thereof the
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giving by the claimant or the plaintiff to the indemnifying party a release from
all liability in respect of such claim; and
(d) in connection with any such indemnification, the
indemnified party will cooperate in all reasonable requests of the indemnifying
party.
11.4 Notwithstanding anything to the contrary contained anywhere in
this Agreement, Chronimed does not waive or in any way compromise, modify or
diminish its rights and remedies, or release Roche from its obligations or
liabilities with respect to any third-party product liability or other claim
that may be asserted against Chronimed based upon an actual or alleged
merchantability, fitness for a particular purpose, the use of Fuzeon whether as
recommended or otherwise, or failure or problem in the manufacture of Fuzeon,
including without limitation any failure of Fuzeon product inserts and other
similar materials supplied with Fuzeon by Roche to contain accurate and adequate
information and warnings.
11.5 The party entitled to indemnification shall take all
reasonable steps to mitigate all indemnifiable liabilities and damages upon and
after becoming aware of any event which would reasonably be expected to give
rise to any liabilities or damages that are indemnifiable hereunder. No party
shall be entitled to indemnification to the extent of any insurance, federal or
state income tax deductions or credits arising from the indemnifiable event (to
the extent that any savings from such deduction or credit is actually realized)
or to the extent of any net proceeds of actions against third parties by the
indemnified party. An indemnified party under this Agreement agrees to timely
notify each insurance carrier of any possible claims for coverage with respect
to an indemnifiable liability, and to diligently prosecute such claims against
the insurance carrier without regard to the possibility of indemnification
hereunder.
12. RECORDS MAINTENANCE, ACCESS AND AUDIT
Subject to the requirements or restrictions of HIPAA or other
applicable federal, state or local law, each party agrees to provide the other
party, and any federal, state or local governmental authorities having
jurisdiction, upon request, access to all books, records and information
relating to this Agreement and the providing party's performance hereunder, and
to maintain such books, records and information for the longer of five (5) years
from and after termination of this Agreement or the period required by law. All
requested books, records, and information shall be supplied within fourteen (14)
days of the receipt of the request, where practicable. All books, records and
information shall be maintained in such form, contain such information, and be
preserved for such time periods as are required by law. A requesting party may
make copies of any such books, records, and information at the requesting
party's expense. All books, records, and information provided or reproduced
shall be protected by the parties' confidentiality covenant, as stated in
Section 16. This Section shall survive termination of this Agreement regardless
the reason for termination.
13. TERM AND TERMINATION
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13.1 The Term of this Agreement shall commence on the date of the
last signature by a party hereto and, unless earlier terminated pursuant to the
terms of this Section 13, continue for one year following the Launch date.
13.2 Upon the expiration of the Term of this Agreement, the parties
may elect to extend this Agreement on an exclusive basis for a period or time to
be agreed upon, and for specific services to be agreed upon and, failing such
extended or new agreement, this Agreement shall terminate. The parties agree to
meet not less than 90 days prior to the end of the Term to discuss renewal or
termination.
13.3 A party may terminate this Agreement upon 30 days written
notice to the other party in the event of (i) non-performance for two
consecutive months of a performance standard in EXHIBIT D or (ii) other breach
by the non-terminating party. Non-payment of any sum when due shall be deemed an
event of breach. In the event of notice to terminate for material
non-performance or breach, the non-terminating party shall be afforded
reasonable opportunity to cure within such 30-day period.
13.4 A party may terminate this Agreement immediately upon notice
to the other in the event of the non-terminating party's insolvency,
liquidation, petition in bankruptcy, or similar action for protection under laws
affording debtor relief.
13.5 Roche may terminate this Agreement if Chronimed is purchased
in whole or material part, or merges with a company unacceptable to Roche in its
reasonable discretion as an exclusive distribution company in the HIV
marketplace.
13.6 Roche may terminate this Agreement in accordance with the
terms of Section 4.5.
14. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement among the parties with
respect to Fuzeon and the services contemplated herein and supercedes all
previous negotiations, commitments and writings. No modifications or amendments
hereof shall be effective unless made in writing and signed by the parties.
15. ASSIGNMENT
This Agreement may not be assigned or the obligations or performance
required herein transferred by a party without the prior written consent of the
others.
16. CONFIDENTIALITY
The parties agree to maintain in confidence, indefinitely beyond the
termination of this Agreement, and not disclose to any third party, include in
any publication, or use for a receiving party's benefit or the benefit of any
third party, without the prior written consent of the disclosing party, any
Confidential Information of the disclosing party. Confidential Information shall
include, by way of example and not limited to, any scientific or business
information including data, know-how, materials, methods,
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financial data, projections or plans owned and treated by the disclosing party
as confidential. The parties' receipt, creation, ownership, use, or disclosure
of any Protected Health Information shall be governed by the requirements of
HIPAA or any other applicable state laws. No party will disclose to another or
use proprietary in-formation or property of a third party without the third
party's prior consent.
The restrictions in this Section shall not apply to any Confidential
Information that (i) was known to the receiving party prior to disclosure by the
disclosing party, as demonstrated in the receiving party's written records, or
(ii) at the time of disclosure, was generally available to the public, or after
disclosure was generally available to the public through no fault of the
non-disclosing parties, or (iii) is made available to a non-disclosing party by
a third party having a right to do so without violation of an obligation of
confidentiality, or (iv) is required by law, regulation, subpoena, government or
judicial order to be disclosed, provided the party subject to such required
disclosure notifies the other parties upon such request for disclosure and prior
to such required disclosure permits the other parties to oppose the same by
appropriate legal action.
17. DISPUTE RESOLUTION
The parties agree to meet and confer in good faith to resolve any
dispute arising under this Agreement. Any unresolved dispute arising out of or
relating to this Agreement or the breach, termination, or validity thereof,
except for temporary, preliminary, or permanent injunctive relief or any other
form of equitable relief, may, at the option of the party claiming to be
aggrieved, be settled by binding arbitration administered by the American
Arbitration Association ("AAA") and conducted by a sole Arbitrator
("Arbitrator") in accordance with the AAA's Commercial Arbitration Rules
("Rules"). Arbitration shall be conducted in Chicago, Illinois. A stenographic
record shall be made of all testimony in any arbitration in which any disclosed
claim or counterclaim exceeds $250,000. The arbitration shall be governed by the
Federal Arbitration Act, 9 U.S.C. Sections 1-16, to the exclusion of state laws
inconsistent therewith or that would produce a different result, and judgment on
the award rendered by the Arbitrator (the "Award") may be entered by any court
having jurisdiction thereof. An Award for $250,000 or more shall be accompanied
by a short statement of the reasoning on which the Award rests.
Within thirty (30) days of receipt of an Award of $250,000 or more
(which shall not be binding if an appeal is taken), a party may notify the AAA
of its intention to appeal the Award to a second Arbitrator (the "Appeal
Arbitrator"), designated in the same manner as the Arbitrator except that the
Appeal Arbitrator must have at least twenty (20) years' experience in the active
practice of law or as a judge. The Appeal Arbitrator shall not take new
testimony or other evidence and shall not modify or replace the Award except for
clear error of law. The Award, as confirmed, modified or replaced by the Appeal
Arbitrator, shall be final and binding, and judgment thereon may be entered by
any court having jurisdiction thereof.
Nothing in this Section 17 shall prevent a party claiming to be
aggrieved from opting to litigate said dispute pursuant to Section 19.
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18. NOTICE
Any notice required or permitted to be given under this Agreement shall
be in writing and shall be given in person, delivered by recognized overnight
delivery service, sent by mail (certified or registered) and addressed, in the
case of Chronimed, to the Chief Executive Officer (with copy to the General
Counsel) and, in the case of Roche, to the Roche Vice President, Marketing (with
a copy to the Roche's Corporate Secretary) and to the Trimeris, Inc. Vice
President of Finance at 0000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, X.X. 00000, or
such other persons or addresses as may have been furnished in writing to the
notifying party in accordance with the provisions of this Section. Except as
otherwise provided herein, any notice shall be deemed delivered upon the earlier
of (i) actual receipt, (ii) two (2) business days after delivery to such
recognized overnight delivery service, or (iii) five (5) business days after
deposit into the mail.
19. CHOICE OF LAW
This Agreement shall be governed by the laws of the State of New
Jersey, without giving effect to New Jersey's choice of law provisions. It is
understood that the parties submit to the jurisdiction of the state and federal
courts in the State of New Jersey as to any action commenced therein.
20. SEVERABILITY
The provisions of this Agreement are severable, and any judicial
determination that a provision is invalid or unenforceable shall not affect the
validity or enforceability of any other provision, but rather shall cause this
Agreement first to be construed in all respects as if such invalid or
unenforceable provision was modified to terms which are valid and enforceable
and to reflect the intent of the parties in performing this Agreement, but if
such intent cannot be determined or reasonably achieved, then as if such invalid
or unenforceable provision was omitted.
21. INDEPENDENT CONTRACTORS
The relationship between Roche and Chronimed and their respective
employees and agents is that of independent contractors, and none shall be
considered an agent or representative of the other for any purpose, nor shall
any party or its agents or employees hold themselves out to be an agent or
representative of any other party for any purpose. Roche and Chronimed will each
be liable solely for the action, rights and responsibilities of their respective
agents and employees, and neither Roche nor Chronimed will be liable for the
acts or omissions of the other or the agents and employees of the other,
including without limitation any employment, benefits, or tax obligations.
22. FORCE MAJEURE
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If either party shall be delayed, interrupted or prevented with respect
to the performance of any obligation hereunder by reason of an act of God, fire,
flood, war (declared or undeclared), public disaster, strike or labor dispute,
governmental enactment, rule or regulation, or any similar cause beyond such
party's reasonable control, such party shall not be liable to the other
therefore, and the time for performance of such obligation shall be extended for
a period equal to the duration of the contingency which occasioned the delay,
interruption or prevention.
Within fifteen (15) days after the beginning of the force majeure, the
party invoking its force majeure rights must notify the other of this fact in
accordance with Section 18. The party invoking force majeure rights must also
notify the other of the termination of the force majeure within fifteen (15)
days following such termination. If the force majeure renders either timely
notice impossible, notice must be provide as soon as practicably possible.
If a force majeure delay exceeds thirty (30) days, a party may elect to
treat such delay as a material breach and may terminate this Agreement pursuant
to the terms of Section 13. If no notice of such election to terminate is given
prior to termination of the force majeure, this Agreement will continue in
effect without modification.
23. USE OF NAMES OR TRADEMARKS
Neither party shall use the other party's, or other party's
affiliates', name, trade, or service marks for publicity or advertising
purposes, or in a press release without the prior written consent of the other
party. Chronimed agrees that it has no right to use the Fuzeon trademark except
as specifically allowed herein. Neither party will create any publication or
marketing tool utilizing Confidential Information or the names, trade or service
marks of the other without the express written consent of the other.
24. NO WAIVER.
In order to be effective, any waiver, by either Party, of any right
under this Agreement, must be in writing signed by an authorized representative
of the Party making the waiver. No such waiver or failure of either Party to
enforce a right or strict performance under this Agreement shall be deemed to be
a waiver or forbearance which would in any way prevent such Party from
subsequently asserting or exercising any such rights, making a claim not
specifically waived, or requiring strict performance of this Agreement. No such
waiver or failure to enforce shall affect the validity of this Agreement or be a
continuing waiver excusing non-compliance with any provision of this Agreement
in the future. Similarly, any waiver or failure to enforce shall in no event
constitute a course of dealing between the Parties.
IN WITNESS WHEREOF, the parties by their duly authorized representatives have
caused this Agreement to be executed as of the respective dates written below.
CHRONIMED INC. ROCHE LABORATORIES INC.
BY: ____/S/____________________ BY: _____/S/____________________
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_______________________________ ________________________________
NAME NAME
_______________________________ ________________________________
TITLE TITLE
_______________________________ ________________________________
DATE DATE
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