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EXHIBIT 10.47
ADDENDUM AGREEMENT
This Addendum Agreement is entered into as of this 7th day of
December, 1998 between Sabratek Corporation ("Sabratek") and Coram Healthcare
Corporation ("Coram").
Recitals
Coram and Sabratek entered into an Exclusive Supply Agreement for
IV Infusion Pumps, IV Disposable Sets and Related Items, dated as of February
26, 1997 (as amended from time to time, the "IV Pump/Sets Agreement").
Coram and Sabratek entered into an Exclusive Supply Agreement
for Prefilled Saline and Heparin Flush Solution Syringes, dated as of May 6,
1998 (as amended from time to time, the "Prepared Syringes Agreement", and
together with the IV Pump/Sets Agreement, the "Agreements").
The parties desire to amend both Agreements by extending their
maturity through December 31, 2008, and modifying certain credits, pricing
features and liquidated damages provisions of the Agreements, as provided
below.
The parties also desire to enter into a service agreement whereby
Coram agrees to perform evaluations, studies and related services and research
with respect to Sabratek products in exchange for a payment, as provided below.
Accordingly, in consideration of the modifications set forth
below which provide benefits to both parties, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree
as follows:
Agreement
1. Changes Affecting Prepared Syringes Agreement
A. Term. The Contract term for the Prepared Syringes Agreement is
hereby extended through December 31, 2008. The word "four" in line five of
paragraph 4 of the Prepared Syringes Agreement is changed to "each". The term
"Contract Term" as defined in paragraph 7 of the Prepared Syringes Agreement
is changed extend to and end on December 31, 2008. The last sentence of
paragraph 2 of Exhibit A of the Prepared Syringes Agreement is rewritten to read
as follows: "Credits earned in the last contract year can be used to make
purchases of the prefilled syringe products for a one year period following the
last contract year."
B. Initial. Sales Credit. The $500,000 sales credit offered to
Coram in paragraph I of Exhibit A to the Prepared Syringes Agreement is
deleted.
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C. Annual Price Increases. The prices set forth in the Prepared
Syringes Agreement or otherwise quoted to Coram for products covered by that
Agreement are subject to annual increases for orders placed on or after January
1st of each year starting with January 1, 2000. Annual increases shall be based
on the most recently available percentage annual increase for the preceding year
published in the Consumer Price Index Urban of the Bureau of Labor Statistics
for the category Medical Care, but such increases shall not exceed 3.0% per
year. Any provision in the Prepared Syringes Agreement which is inconsistent
with or prohibits annual price increases as set forth above is deleted and
superseded by this provision.
D. Credit. In consideration as set forth in the Recitals of this
Addendum Agreement, Sabratek grants to Coram an additional nonrefundable credit
of $275,000.
E. Liquidated Damages Addendum. In connection with the Prepared
Syringes Agreement, the parties entered into an Indemnification Agreement
Addendum to the Prefilled Syringe Agreement of May 9, 1998 (the
"Indemnification Agreement"), which itself contained an Addendum to the
Indemnification Agreement which replaced paragraph 3 of the Indemnification
Agreement dealing with Sabratek's duty to indemnify Coram. if Sabratek were
unable to continue to supply to Coram products covered by Prepared Syringes
Agreement for regulatory reasons prior to the issuance of a 510(k) approval by
the Food and Drug Administration. That Addendum to Indemnification Agreement
and paragraph 3 of the Indemnification Agreement is hereby deleted and
eliminated retroactive to the date of the Indemnification Agreement and the
following language is substituted in its place:
"3. Non-Delivery Damages. In the event Xxxxx is unable to
continue to supply Products to Coram or a clinically equivalent
prefilled syringe product, in lieu of all other damages, Sabratek
shall pay Coram. an amount equal to the difference between
Sabratek's price for the Product specified in the Exclusive
Supply Agreement for Prefilled Saline and Heparin. Flush Solution
Syringes dated as of May 6, 1998 between Sabratek and Coram. (the
"Prepared. Syringes Agreement") and the price Coram pays for
clinically equivalent substitute products it purchases for a
period, the duration of which is the lesser of six months or the
period of time Xxxxx is unable to continue to supply the Product
to Coram."
2. Changes Affecting the IV Pump/Sets Agreement.
A. Term. The term or Contract Term of the IV Pump/Sets Agreement
is hereby extended through December 31, 2008. Coram agrees that Sabratek will
be and remain Coram's primary source of supply for, and Coram will use its best
efforts to purchase from Sabratek, substantially all of Coram's requirements
for IV pumps, IV pump monitoring systems, and IV disposable Sets for the entire
extended Contract Term. The handwritten modification of the phrase "Contract
Term" in paragraph 10 of the IV Pump/Sets Agreement permitting a shortened
Contract Term in the event Coram purchases from Sabratek $25 million in gross
dollar purchases of IV disposable sets is hereby eliminated.
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B. Sets Price Increases. The prices set forth in Exhibit A of the
IV Pump/Sets Agreement for Sets or otherwise quoted to Coram for Sets covered
by that Agreement are now subject to annual increases for orders received on or
after January 1st of each year starting with January 1, 2000. Annual increases
shall be based on the most recently available percentage annual increase for
the preceding year published in the Consumer Price Index Urban of the Bureau of
Labor Statistics for the category Medical Care, but such increases shall not
exceed 3.0% per year. Any provision in the IV Pump/Sets Agreement which is
inconsistent with or prohibits annual price increases as set forth above is
deleted and superseded by this provision.
C. Credit. In consideration as set forth in the Recitals of
this Addendum Agreement, Sabratek grants to Coram an additional nonrefundable
credit of $725,000.
3. Other Terms Reaffirmed. Except as modified by this Addendum
Agreement, all other terms and conditions of both Agreements remain in full
force and effect and are hereby reaffirmed by the parties.
4. Separateness of Agreements. This Addendum Agreement amends
both Agreements by a single document for convenience only. It is not intended
to transform both Agreements into a single interrelated agreement. Each
Agreement remains separate from the other and a default in the provisions of
one Agreement, as amended by this Addendum Agreement, shall not constitute a
default under the other Agreement.
5. Coram Evaluation Services Agreement.
X. Xxxxx Evaluation Services. Upon reasonable advance notice given
by Sabratek to Coram prior to December 31, 2008, Coram agrees
to perform validation and evaluation studies, testing and
related research and work for new products and product features
that Sabratek submits to it, including APM 2000 patent
products, GDS blood monitoring, electronic, modem, and other
telecommunication remote monitoring products for patient care,
IV usage and other treatments. Coram and Sabratek shall agree
in writing on the parameters, methods, duration, testing,
equipment, environment, controls, commencement dates, duration,
protocols, format, content and medium of data and reports, and
other characteristics of the studies, evaluation, monitoring,
research and other services to be performed by Coram. with
respect to Sabratek designated products. Coram agrees to
perform and discharge its services for Sabratek in a
professional and competent manner. Coram shall offer to
Sabratek charges or pricing and the promptness and timeliness
of performance with respect to its services, at rates of charge
and in a manner no less favorable than it offers to its most
favored clients.
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B. Payment. Sabratek agrees to pay no later than December 31,
1998, a nonrefundable $100,000 deposit to Coram, for the
services Coram is to perform as described above.
6. Authority. Each party represents to the other that it is duly
incorporated, validly existing and has the requisite power and authority to
enter into and perform this Addendum Agreement, and upon execution and delivery
as set forth in the next paragraph, this Addendum Agreement will be legal,
binding and enforceable against such party in accordance with its terms.
7. Counterparts. This Addendum Agreement may be executed in
counterparts by telecopy and shall be become binding when counterpart
signatures or original signed counterparts are exchanged. If this Addendum
Agreement is signed by telecopy, each party agrees to finish promptly
thereafter original signed counterparts to the other, but failure to do so
shall not affect the validity or enforceability of this Addendum Agreement.
8. Clinical Suitability of Products. Coram's obligations to
purchase any products described herein from Sabratek shall be suspended if
Coram reasonably determines that use of any such product is unsafe or may
result in injury to a patient. Such obligation shall be reinstated once
Sabratek demonstrates to Coram's reasonable satisfaction that the product is
once again safe.
SABRATEK CORPORATION CORAM HEALTHCARE CORPORATION
BY /s/ Xxxxxxx X. Xxxxxx BY /s/ Xxxxxx Xxxxx
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Xxxxxxx X. Xxxxxx Xxxxxx Xxxxx
ITS President ITS Sr. Vice President
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