EXHIBIT 10(a)
INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND
IS NOTED WITH "[CONFIDENTIAL TREATMENT REQUESTED]." AN UNREDACTED VERSION OF
THIS DOCUMENT HAS BEEN FILED SPEARETELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
AGREEMENT
This AGREEMENT ("Agreement") is dated as of February 28, 2002 by and between
XxxXxx, Inc., an Ohio corporation doing business as Cardinal Health Sales and
Marketing Services ("Vendor"), with its principal place of business at 0000
Xxxxxxxx Xxxxx, Xxxxxx, Xxxx, and Alliance Pharmaceutical Corp. ("Company"),
a New York corporation having a principal place of business at 0000 Xxxxxxx
Xxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000.
BACKGROUND INFORMATION
Company develops, distributes and sells pharmaceutical products, and Vendor
provides medical representatives who Detail (as hereinafter defined)
pharmaceutical products for third parties. The Company desires Vendor to provide
representatives to Detail certain products as determined and directed by Company
in the geographical territory hereinafter specified, pursuant to the terms and
conditions of this Agreement, and Vendor desires to provide the Representatives
and perform such services pursuant to the terms and conditions set forth in this
Agreement.
The parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND REFERENCES TO VENDOR
1.1. DEFINITIONS. The following terms when used in this Agreement shall,
except where the context otherwise requires, have the following meanings:
(a) "Act" means the Federal Food, Drug and Cosmetic Act, as
amended, and the regulations promulgated thereunder from time to time.
(b) "Affiliate" means any corporate or non-corporate business
entity that controls, is controlled by, or is under common control with a party
to this Agreement. A corporation or non-corporate business entity shall be
regarded as in control of another corporation if it owns or directly or
indirectly controls at least forty percent (40%) of the voting stock of the
other corporation, or (i) in the absence of the ownership of at least forty
percent (40%) of the voting stock of a corporation or (ii) in the case of a
non-corporate business entity, if it possesses directly or indirectly, the power
to direct or cause the direction of the management and policies of such
corporation or non-corporate business entity, as applicable.
(c) "Agency" means any governmental regulatory authority in the
Territory responsible for granting approvals for the sale or maintaining
regulatory oversight of the Products, including, without limitation, the FDA.
(d) "Clinical Science Liaison" means an individual hired by and
retained as an employee of Vendor to educate physicians, sonographers and nurses
on new technology and ultrasound techniques.
(e) "Detail" means an interactive, face-to-face visit by a
Representative with a Target Customer or his or her legally empowered designee
in the Territory, during which the FDA-approved indicated uses, safety,
effectiveness, contraindications, side effects, warnings and other relevant
characteristics of one of the Products are described by the Representative in a
fair and balanced manner consistent with the requirements of the Act, and using,
as necessary or desirable, the Product Labeling and the Product Promotional
Materials. "Product Detail" means Detail of a Product between Target Customer
and Representative. When used as a verb, "Detail" or "Detailing" shall mean to
engage in a Detail as defined in this Section 1.l(e).
(f) "FDA" means the United States Food and Drug Administration and
any successor agency having substantially the same functions.
(g) "Gross Sales" means all sales of the Product for uses in the
cardiology area by Vendor and/or by Company, its agents, Affiliates,
distributors, assignees, licensees or any other third party, without reduction
for credits, returns and related items.
(h) "Manager" means individuals hired by and retained as an
employee of Vendor to supervise activities of Clinical Science Liaisons and
Representatives under this Agreement.
(i) "PDMA" means the Prescription Drug Marketing Act of 1987, as
amended, and the regulations promulgated thereunder from time to time.
(j) "Product Labeling" means all labels and other written, printed,
or graphic matter provided by the Company including (i) any container or wrapper
utilized with a Product, or (ii) any written material accompanying a Product,
including, without limitation, Product package inserts.
(k) "Product Launch Date" means ninety (90) days after FDA approval
of the Product.
(l) "Product Promotional Materials" means all written, printed or
graphic material provided by the Company, including Product Labeling, intended
for use by Representatives during a Detail, including visual aids, file cards,
premium items, clinical studies, reprints, drug information updates and any
other promotional support items that Company deems necessary or appropriate to
conduct the Program. Product Promotional Materials shall include FDA approved
indicated uses, safety, effectiveness, contraindications, side effects, warnings
and other relevant characteristics of each of the Products.
(m) "Product" means the pharmaceutical product set forth on
attached Schedule 1.1(m) and such other products as may be mutually agreed
between the parties and added to Schedule 1.1(m) attached hereto.
2
(n) "Program" means the program of Detailing to be conducted by the
Representatives pursuant to this Agreement and during the term of this
Agreement, as defined in Section 14.1.
(o) "Representative" and "Representatives" mean an individual hired
by and retained as an employee of Vendor to conduct Detailing of Products in
connection with the Program. As sometimes used in this Agreement where the
connotation is appropriate, "Representatives" shall include "Clinical Science
Liaisons" and "Managers."
(p) "Target" or "Target Customer" means a physician or other
specialist identified by Company.
(q) "Territory" means the United States of America.
(r) "Vendor" means XxxXxx, Inc., an Ohio corporation, doing
business as Cardinal Health Sales and Marketing Services. References herein to
Vendor shall be deemed to include the Mangers, Representatives and Clinical
Science Liaisons.
ARTICLE II
APPOINTMENT OF VENDOR; GENERAL SCOPE OF ACTIVITIES
2.1. FURNISHING REPRESENTATIVES. Beginning upon full execution of this
Agreement and over a period of time to be mutually agreed upon by the parties,
Vendor shall recruit and hire at least [CONFIDENTIAL TREATMENT REQUESTED], to
engage in Product Detail activities in the Territory. In addition, Vendor shall
recruit and hire [CONFIDENTIAL TREATMENT REQUESTED]. The hiring of the
Representatives and Managers may be phased over a period of time as directed by
the JCC (as hereinafter defined).
Vendor shall assign Representatives for such Target Customers, in such
numbers, and in such Territories as shall be designated by Joint
Commercialization Committee (as hereinafter defined) during the term of this
Agreement. Each Representative shall make Product Details on his or her assigned
Target Customers based on the general direction given by the Joint
Commercialization Committee. The duties of such Representatives shall be
exclusively to Detail the Products and perform other related activities deemed
necessary for the establishment and maintenance of new and existing customers of
the Products in the Territory.
From time to time, Vendor may utilize the Representatives to Detail
products for other clients of Vendor, in addition to such Representatives'
obligations to Detail Company's Product, upon the mutual written agreement of
Company and Vendor regarding the general terms and conditions of such
arrangement, including but not limited to compensation (i.e., credit or
reduction in fees) to Company.
2.2. JOINT COMMERCIALIZATION COMMITTEE. During the term of this Agreement
Company and Vendor will participate on a Joint Commercialization Committee
("JCC").
(a) The responsibilities of the JCC shall include, but not be
limited to the following: the overall strategic direction for the Product,
including phase IV clinical field studies; the overall marketing and sales
strategy for the Product; approval of plans and budgets
3
related to the marketing and sale of the Product; specification of minimum
levels of sales of the Product; and review of any other activity related to the
use of the Product. Notwithstanding anything to the contrary contained herein or
elsewhere in this Agreement, Company shall at all times remain solely
responsible for the sale and use of the Product. Further, Company shall have
ultimate responsibility for the marketing and sales of the Product, direction of
the Representatives regarding the Product, manufacturing of the Product,
providing medical affairs services (including physicians and staff) to support
the marketing and sale of the Product, management of the clinical development of
the Product (including phase IV studies) and regulatory affairs.
(b) The JCC will develop [CONFIDENTIAL TREATMENT REQUESTED]
Comprehensive Commercialization Plan ("CCP") for the marketing, promotion, sale,
manufacturing and distribution of the Product. The CCP will define the market
opportunity for the Product and formulate a strategy to exploit the existing
market opportunity. The parties will use their best efforts to prepare the CCP
within sixty (60) days of full execution of this Agreement. In order to
implement the CCP, each year the JCC will prepare and approve a marketing plan
("Marketing Plan") for the upcoming year that is based, in part, on the actual
performance of the Product during the previous year. The JCC shall utilize the
Marketing Plan in carrying out its duties regarding the marketing, promotion,
distribution and sale of the Product. From time to time during the year, the JCC
shall review the Marketing Plan and make any necessary adjustments to reflect
actual market conditions.
(c) The JCC will include two (2) executives from Company and two
(2) executives from Vendor. The chairperson of the JCC shall be one of the
Company executives. Company maintains the final and definitive authority over
the decisions made by the JCC.
(d) The JCC will meet at least once per month, or more frequently
as mutually agreed upon by the parties, either in person or via telephone. The
location of in person meetings shall alternate between Company's offices in San
Diego, California, and Vendor's offices in Dublin, Ohio.
2.3. SCOPE OF ACTIVITIES. The parties shall perform the following
activities as applicable to each in connection with the Program:
(a) Vendor will recruit, interview and hire as its employees, the
Representatives. Vendor will use its best efforts to ensure that Representatives
have experience in the medical/pharmaceutical industry, preferably with a
sonography background and experience in performing cardiac sonography in a
hospital setting; prior experience and training in ultrasound equipment sales
preferred; or such other sales experience deemed mutually acceptable by Company
and Vendor. The Representatives shall have a minimum of a four (4) year degree
from a college or university, professional in manner and appearance, and shall
be hired in accordance with all applicable state and federal laws. Each
Representative shall have a valid driver's license for purposes of performing
his/her obligations under this Agreement. Vendor shall use its best efforts to
ensure that the Representatives have satisfactory references from prior
employers. Vendor shall have the sole authority to reject any applicant for
employment as a Representative. Company may, at its sole cost and expense,
participate with Vendor in the interviewing of Representatives; provided,
however, in the event that Vendor
4
rejects an applicant for Representative and thereafter hires such applicant at
the request of Company, Company shall indemnify and hold Vendor harmless from
any Damages (as defined in Section 16.1) arising as a result of such
Representative's breach of this Agreement, or any wrongful or negligent acts or
omissions.
(b) Vendor shall have sole and exclusive authority to discipline or
terminate the employment of Representatives. Company may reasonably request that
a Representative be terminated or reassigned if such Representative's activities
or conduct are not adequately achieving the performance goals of the Product, or
if the Representative fails to comply with all applicable laws, regulations, and
Company requirements for Detailing the Product. Vendor shall use its best
efforts to comply with such request; provided that such action complies with
applicable laws and is in accordance with Vendor's policies and procedures, as
determined by Vendor's human resources manager. In the event Vendor determines
that its policies and procedures or applicable laws prohibit the termination or
reassignment of any Representative so requested by Company, it shall notify
Company of such determination and submit a corrective action plan for Company
approval.
(c) Vendor shall cause each Representative to attend and
successfully complete the Training Program (as defined in Section 6.1) conducted
by Company for each of the Products prior to participating in the Program. Any
such Representative who does not successfully complete all such requirements
shall be removed and replaced by another Representative who shall comply with
such requirements.
(d) Company shall provide Vendor without cost with sufficient
quantities of the Product Promotional Materials and Product Labeling for the
performance and supervision of Detailing. Company shall be solely responsible
for the preparation, content, and method of distribution of the Product
Promotional Materials and the Product Labeling. In connection with the Detailing
of the Products, the Representatives shall use only the Product Labeling and the
Product Promotional Materials provided by Company; and under no circumstances
shall Vendor or the Representatives develop, create, or use any other
promotional material or literature for the Detailing of the Products. Company
shall advise Vendor immediately of any inaccuracy or incompleteness of the
Product Promotional Materials or the Product Labeling, and upon such notice,
Vendor and the Representatives shall immediately cease the use of any portion or
all of the Product Promotional Materials or Product Labeling so identified by
Company.
(e) Vendor shall instruct the Representatives to limit their verbal
statements and claims regarding the Products, including efficacy and safety, to
those that are consistent with the Product Labeling and the Product Promotional
Materials. The Representatives shall not add, delete, or modify claims of
efficacy or safety in the Detailing of the Products, nor make any changes
(including underlining or otherwise highlighting any language or adding any
notes thereto) in the Product Promotional Materials. Representatives shall
utilize only printed materials provided by Company. Representatives shall not
make any disparaging, untrue, or misleading statements about any of Company or
its Affiliates, employees, competitors, or competing products. Representatives
shall Detail the Products in strict adherence to all applicable laws,
regulations, and professional requirements, including, but not limited to, the
Act, the Medicare and Medicaid Anti-Kickback Statute, and the American Medical
Association Gifts to Physicians from Industry Guidelines.
5
(f) The Representatives shall remain under the direct authority and
control of Vendor, but shall cooperate with the members of Company and shall
receive advice and direction related to Detail activities on the Products from
Company and Vendor mutually through the JCC. Company shall make all decisions
with respect to the overall strategy in connection with the Detailing of the
Products. Any Company personnel interacting with Vendor Representatives shall
not discipline the Representatives or implement terms or conditions of
employment or personnel policies and/or practices with respect to the
Representatives or otherwise control the daily activities of Representatives.
Company shall provide Vendor with copies of all reports, memoranda, audits and
other data it develops pertaining to the Representatives, Detailing, and the
Program within fifteen (15) days of the preparation of such documents. Provided,
however, that any such documents claiming negligent or wrongful acts or
omissions of Representatives shall, as provided in Section 2.5, be sent to
Vendor as promptly as practicable.
(g) Vendor shall supply Representatives with a vehicle allowance
(to be mutually agreed to by Company) for their use in performing and
supervising the Detailing, and Company shall reimburse Vendor for such vehicle
allowance. Company shall reimburse Vendor for all Territory Operating Expenses
(as defined in Schedule 3.1). All Territory Operating Expenses shall be subject
to a [CONFIDENTIAL TREATMENT REQUESTED] administrative fee as further set forth
on Schedule 3.1.
(h) Company shall provide Vendor with a list of Target Customers in
the Territory and with data on sales in the Territory for Vendor's use in
performing this Agreement. Company shall also provide Vendor with such other
sales and marketing information concerning the Products that is obtained or
prepared during the term of this Agreement. Upon the request of Company, Vendor
will purchase customer lists and other data; provided, however, Company shall
reimburse Vendor for the costs associated with such purchase(s).
(i) Representatives shall comply with Company's drug policy, a copy
of which is attached hereto and incorporated by reference herein as Schedule
2.3(i).
2.4. ORDERS FOR PRODUCTS. Company shall be solely responsible for
establishing the terms and conditions of the sale of the Products, including
without limitation, the price at which the Products will be sold, whether sales
of the Products will be subject to any discounts, the method of distribution of
the Products, and whether any credit will be granted or refused in connection
with the sale or return of any Product. Company shall be exclusively responsible
for accepting and filling all purchase orders for the Products, billing and
returns for the Products, and all other activities in connection with the sale
and delivery of the Products, other than Detailing. If Vendor or the
Representatives receive an order for the Products, they shall immediately
transmit such order to Company for further handling and communications with the
submitter of the order, including acceptance or rejection, which shall be in
Company's sole discretion.
2.5. REPRESENTATIVES' ACTIVITY. Subject to Company's obligations and
representations and warranties contained in this Agreement, including, but not
limited to, those contained in Sections 2.3(a) and 4.2, any negligent or
wrongful act or omission on the part of the Representatives (both individually
and as a group) that occur during the term of this Agreement
6
and that arise during the course and within the scope of their employment with
Vendor pursuant to this Agreement shall be deemed to be negligent or wrongful
acts or omissions of Vendor. Provided, however, that any acts or omissions of
the Representatives pursuant to the direction, control or supervision of Company
or its employees or agents shall not be deemed to be negligent or wrongful acts
or omissions of Vendor. Each party shall notify the other in writing as promptly
as practicable of any such material alleged negligent or wrongful acts or
omissions on the part of the Representatives of which it becomes aware along
with a plan to remedy such acts or omissions, and Company shall provide Vendor
with a reasonable opportunity to remedy such acts or omissions, and if
indicated, to replace the involved Representatives.
2.6. VACANCIES/TURNOVER. In the event of a Representative vacancy due to
resignation, reassignment or termination of a Representative, Vendor shall use
its best efforts to fill any such vacancy within a [CONFIDENTIAL TREATMENT
REQUESTED] period. Company shall be responsible for paying the Service Fee (as
defined in Section 3.1 below) during such vacancy, unless such vacancy exceeds
the [CONFIDENTIAL TREATMENT REQUESTED] period, in which event, the associated
Representative Fee for such vacancy shall be suspended after the [CONFIDENTIAL
TREATMENT REQUESTED] period and shall resume once the vacancy is filled by
Vendor. All recruiting and other related expenses for filling a vacancy shall be
borne by Vendor; provided, however, that Company shall be responsible for all
recruiting and other related expenses for filling any vacancy occurring pursuant
to Company's request for reassignment or termination other than a request
pursuant to the last sentence of Section 2.5 or resulting from the
Representative's failure to comply with any one or more of the provisions of
Section 2.3. In addition, if Company desires to interview any candidates,
Company shall bear its own cost of attending any final interview conducted by
Vendor or the costs of any separate interview arranged for by Company.
2.7. MANAGEMENT REPORTS. Vendor shall provide Company with monthly
reports in the form set forth in Schedule 2.7 within fifteen (15) days after the
end of each month. At the request of Company, Vendor shall furnish Company at
reasonable times such documentation as Company reasonably requests for purposes
of verifying the accuracy of any monthly report.
2.8. PROJECT MANAGER. Vendor shall appoint a Project Manager to serve as
a liaison between Vendor, Representatives and Company regarding the performance
by Vendor and Company of their respective obligations under this Agreement.
2.9. EXCLUSIVITY AND RIGHT OF FIRST NEGOTIATION. At all times during the
term of this Agreement, Vendor shall be Company's exclusive provider of sales
and marketing services related to the Product in the Territory. During the term
of this Agreement, Company will not (i) grant any third party any right to
market or sell the Product in the Territory, or (ii) directly or indirectly
develop, sell, market or promote any Competitive Product (as hereinafter
defined) in the Territory. The term "Competitive Product" shall mean any product
used for contrast enhancement during ultrasound cardiology imaging procedures,
or which may reasonably be considered to compete with, or could reasonably be
considered to provide a substitute for, the Product; provided, however,
Competitive Product shall not include (i) alternate indications for the Product
(other than those listed on Schedule 1.1(m)) developed after the date of this
Agreement; or (ii) new technologies that do not directly compete with, or
reasonably provide a substitute for, the Product.
7
During the term of the Agreement, Vendor will not provide the
services described in this Agreement for any Competitive Product in the
Territory.
Company shall provide Vendor with a right of first negotiation with respect
to the marketing and sales services, including but not limited to expansion of
the number of Representatives, related to promotion of the Products for uses in
the cardiology area. Company shall grant Vendor an exclusive right of
negotiation with respect to such additional services for a period of
[CONFIDENTIAL TREATMENT REQUESTED] after Company's notice to Vendor that it
desires to obtain additional marketing and sales services and/or expand the
number of Representatives. If the parties have not reached an agreement with
respect to the marketing and sales services or expansion of the number of
Representatives within [CONFIDENTIAL TREATMENT REQUESTED] from the date of
Company's notice, and entered into a definitive amendment to this Agreement
within [CONFIDENTIAL TREATMENT REQUESTED] thereafter, or if Vendor notifies
Company in writing at any point during such negotiation period that it is not
interested or unable to provide such services, then Company shall have no
further obligation with respect to such additional marketing and sales services
and/or additional Representatives under this Section 2.9.
2.10. [CONFIDENTIAL TREATMENT REQUESTED]
2.11. RIGHT OF FIRST NEGOTIATION TO MANUFACTURE PRODUCT. If, at any time
during the term of this Agreement, Company desires to outsource the manufacture
of the Product to a third party, Company shall grant Vendor an exclusive right
of negotiation to manufacture the Product for a period of [CONFIDENTIAL
TREATMENT REQUESTED] after Company's notice to Vendor that it desires to
outsource the manufacture of the Product. If the parties have not reached an
agreement with respect to manufacturing of the Product within [CONFIDENTIAL
TREATMENT REQUESTED] from the date of Company's notice, and entered into a
definitive amendment to this Agreement within [CONFIDENTIAL TREATMENT REQUESTED]
thereafter, or if Vendor notifies Company in writing at any point during such
negotiation period that it is not interested or unable to provide such services,
then Company shall have no further obligation with respect to such manufacturing
under this Section 2.11.
ARTICLE III
COMPENSATION
3.1. [CONFIDENTIAL TREATMENT REQUESTED]
3.2. [CONFIDENTIAL TREATMENT REQUESTED]
3.3. COMPANY'S TERMINATION, REMOVAL, OR HIRING OF REPRESENTATIVES OR
MANAGERS.
(a) At any time after Company has paid in full all Deferred Fees,
but prior to [CONFIDENTIAL TREATMENT REQUESTED] prior to expiration of the
Initial Term (or any extension thereof) as further set forth below, Company has
the option to hire all, but not a portion thereof, Representatives as its own
employees upon payment of a fee to Vendor equal to [CONFIDENTIAL TREATMENT
REQUESTED]. Upon payment of the Buyout Fee this Agreement shall immediately
terminate. Upon such termination, Vendor shall receive, in addition to the
Buyout Fee set forth above, the residual payments pursuant to Section 14.13.
8
(b) Notwithstanding Section 3.3(a) above, during the
[CONFIDENTIAL TREATMENT REQUESTED] period immediately prior to the end of the
later of the Initial Term (if no extension thereof is mutually agreed upon)
or the end of the Initial Term is extended pursuant to Section 14.1, as
applicable, Company shall have the right to identify those Representatives
and Managers Company desires to hire (collectively, the "Targeted Employees")
and to negotiate with any Targeted Employee concerning the terms on which
Company might hire that Targeted Employee. At the end of the later of the
Initial Term or the extended Initial Term, as applicable, Company shall have
a period of [CONFIDENTIAL TREATMENT REQUESTED] (the "Employee Selection
Period") to hire some or all of the Targeted Employees. Vendor agrees not to
interfere with the Company's solicitation and hiring of the Targeted
Employees prior to or during the Employee Selection Period, and Vendor will
assist Company in the transition of Targeted Employees from Vendor to
Company. For a period of [CONFIDENTIAL TREATMENT REQUESTED] after the
expiration of the Employee Selection Period: (a) the Company shall not hire
or retain as an employee or as agent or independent contractor any
Representatives and Managers that are not Targeted Employees or are not
actually hired by Company during the Employee Selection Period, and (b)
Vendor agrees not to solicit for hire as an employee, agent or independent
contractor any Targeted Employee hired by Company during the Employee
Selection Period.
(c) Other than as specifically set forth above, Vendor shall at no
time during the term of this Agreement, and for a period of [CONFIDENTIAL
TREATMENT REQUESTED] after the expiration or termination of this Agreement,
directly or indirectly, solicit or hire for employment any employee of Vendor.
3.4. REIMBURSEMENT OF EXPENSES. Unless otherwise set forth in this
Agreement, all expenses of Vendor for which Company is obligated to reimburse
Vendor under this Agreement shall be paid by Company within thirty (30) days
after Vendor has submitted a statement itemizing such expenses. Vendor shall use
its best efforts to submit such expense statements to Company monthly.
3.5. PAST DUE AMOUNTS. Failure of the Company to timely make any payment
to Vendor under this Agreement will constitute a material breach of this
Agreement by Company. All amounts owing by Company to Vendor pursuant to this
Agreement that are not timely paid by Company will bear interest at the rate of
[CONFIDENTIAL TREATMENT REQUESTED] from the due date.
3.6. ROYALTIES. During the term of this Agreement, Company shall pay to
Vendor a royalty ("Royalty") based upon the percentage of Gross Sales of the
Product in excess of the agreed upon threshold of Gross Sales of the Product set
forth below ("Gross Sales Threshold") during each [CONFIDENTIAL TREATMENT
REQUESTED] period of this Agreement beginning on the Product Launch Date as
follows ("Royalty"):
ACTUAL GROSS SALES OF PRODUCT/GROSS
SALES THRESHOLD ROYALTY
[CONFIDENTIAL TREATMENT [CONFIDENTIAL TREATMENT
REQUESTED] REQUESTED]
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The Gross Sales Threshold for each [CONFIDENTIAL TREATMENT REQUESTED]
period of this Agreement beginning on the Product Launch Date is as follows:
[CONFIDENTIAL TREATMENT REQUESTED]
The Gross Sales Threshold may be adjusted from time to time by mutual
agreement of the parties. The Royalty shall be calculated on an annual basis,
and Company shall pay the Royalty to Vendor within thirty (30) days of the end
of the applicable [CONFIDENTIAL TREATMENT REQUESTED]. All Royalty payments shall
be made as set forth in the preceding sentence. At no time shall the Royalty
owed to Vendor by Company be financed by Company (i.e., added to the Deferred
Fees).
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1. BY VENDOR. Vendor represents, warrants, and covenants to Company, as
of execution of this Agreement and during the term of this Agreement, as
follows:
(a) that Vendor and the Representatives shall perform the Detailing
in a professional and timely manner;
(b) that Vendor shall comply, in all material respects, with all
laws, rules and regulations that apply to the performance of services under this
Agreement, including but not limited to the PDMA, the Medicare and Medicaid
Anti-Kickback Act (42 U.S.C. Section 1320a-7b(a)), the Civil False Claims Act
(31 U.S.C. Section 3729(a)), Sections 1128A, 1128B, and 1877 of the Social
Security Act (42 U.S.C. Sections 1320a-7a, -7b, and 1395nn), the Health Care
Fraud Act (18 U.S.C. Section 1347), and the Criminal False Claims Act (18 U.S.C.
Section 287), as amended from time to time, as well as similar applicable state
laws;
(c) when on Company's premises or on the premises of Company's
customers, Vendor and the Representatives shall comply with all of Company's or
Company's customer's policies regarding the conduct of visitors of which Vendor
and the Representatives are aware;
(d) that Vendor is under no obligation to any third party that
would prevent the execution of this Agreement or interfere with its performance
under this Agreement.
4.2. BY COMPANY. Company represents, warrants, and covenants to Vendor,
as of execution of this Agreement and during the term of this Agreement, as
follows:
(a) that Company is under no obligation to any third party that
would prevent the execution of this Agreement or interfere with its performance
under this Agreement;
(b) that Company shall comply, in all material respects, with all
laws, rules and regulations that apply to the Products and their sale, the
Program, and this Agreement, including but not limited to the Act, the PDMA, the
Medicare and Medicaid Anti-Kickback Act
10
(42 U.S.C. Section 1320a-7b(a)), the Civil False Claims Act (31 U.S.C. Section
3729(a)), Sections 1128A, 1128B, and 1877 of the Social Security Act (42 U.S.C.
Sections 1320a-7a, -7b, and 1395nn), the Health Care Fraud Act (18 U.S.C.
Section 1347), and the Criminal False Claims Act (18 U.S.C. Section 287), as
amended from time to time, as well as similar applicable state laws;
(c) that the Product Labeling and Product Promotional Materials are
accurate, complete, and in compliance with the Act and all rules and regulations
of the FDA;
(d) that the manufacture, sale, and distribution of the Products do
not and will not during the term of this Agreement, in any material respect,
infringe any patent or other proprietary rights of third parties, and the
Products have all necessary governmental approvals and may be lawfully Detailed
and sold by Company and the Representatives;
(e) that Company has the right and authority to market and sell the
Product in the Territory and to grant Vendor the exclusive right and authority
to market and sell the Product in the Territory.
ARTICLE V
STATUS OF VENDOR AND THE REPRESENTATIVES
5.1. VENDOR INDEPENDENT CONTRACTOR. Vendor is being retained and shall
perform hereunder strictly as an independent contractor. Representatives
performing services hereunder shall not be, and shall not be considered to be,
employees of Company for any purpose, and shall at all times remain employees of
Vendor, subject to Section 3.3. Neither party shall have any responsibility for
the hiring, termination, compensation, benefits or other conditions of
employment of the other party's employees, except as otherwise provided in this
Agreement.
5.2. NO COMPANY BENEFITS. While employees of Vendor, the Representatives
are not eligible to participate in any benefits programs or sales bonuses
offered by Company to its employees, or in any pension plans, profit sharing
plans, stock purchase plans, insurance plans or any other employee benefit plans
offered from time to time by Company to its employees, provided that the
Representatives shall be eligible to participate in Company sales contests if so
requested by Company and approved by Vendor. Vendor acknowledges and agrees that
Company does not, and will not, maintain or procure any worker's compensation or
unemployment compensation insurance for or on behalf of the Representatives
while they are employees of Vendor. Vendor acknowledges and agrees that it shall
be solely responsible for paying all salaries, wages, benefits and other
compensation which its employees (including Representatives) may be entitled to
receive in connection with the performance of the services hereunder.
5.3. SALES, USE AND EXCISE TAXES. If any state or local government or
other taxing authority determines that sales, use or excise Taxes ("Taxes") are
applicable to Vendor's services performed hereunder, Vendor shall promptly
accrue and Company shall pay such Taxes on behalf of Vendor to the appropriate
taxing authorities (excluding Taxes on Vendor's or any Representative's income).
In addition, Company shall be responsible for the payment of any applicable
Taxes related to Company's supply to Vendor of Product Promotional Materials and
Product Samples.
11
5.4. NO JOINT VENTURE. Nothing contained in this Agreement shall be
construed as creating a joint venture or, except as otherwise provided herein,
as granting to either party the authority to bind or contract any obligations in
the name of or on the account of the other party or to make any guarantees or
warranties on behalf of the other party.
ARTICLE VI
TRAINING
6.1. TRAINING PROGRAMS.
(a) Company shall conduct a training program (of approximately five
(5) days duration) for the Representatives prior to the commencement of the
Program, which shall include such medical and technical information about the
Products and such sales training as Company, along with Vendor, deems necessary
and appropriate (the "Training Program"). The Training Program shall also
include instruction on compliance with applicable laws. Vendor shall assist
Company with the Training Program only to the extent requested by Company.
(b) In order to qualify for assignment in a Territory, a
Representative must demonstrate thorough knowledge of the Products by passing
Company approved Product tests at a level of proficiency agreed upon by Company
and Vendor.
(c) Vendor shall conduct a selling skills training program for the
Representatives prior to commencement of the Program.
6.2. TRAINING MATERIALS. With the advice and assistance of Vendor,
Company shall prepare written training materials for the Training Program and an
up-to-date programmed learning unit for the Products, to be sent to each
Representative for "at home" study a minimum of five (5) days prior to the
commencement of the Training Program.
ARTICLE VII
SAMPLES
7.1. PROVISION OF SAMPLES. Company shall provide samples of the Products
to the Representatives at Company's option and at its expense. Company shall
determine the quantity and types of samples to be provided to the
Representatives and the method of distribution of the samples. In the event
Company elects to have Vendor manage the storage and distribution of samples,
Vendor shall pass on to Company the actual invoice costs for storage,
distribution and other related costs and use prudent business sense in costs
incurred. All samples shall be stored and handled by Company and Vendor in
compliance with the PDMA and other applicable law.
7.2. SAMPLE ACCOUNTABILITY. Vendor shall prepare and provide to Company
for approval a sample accountability program applicable to the samples provided
by Company.
7.3. RETURN OF SAMPLES. Within thirty (30) days following the termination
or expiration of this Agreement or within thirty (30) days from the termination
or removal from the Program of a Representative (unless such Representative has
been hired or retained by Company), Vendor shall cause the Representatives to
return to Company all unused Product samples provided to Vendor or the
Representatives by Company. Company shall pay or
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reimburse Vendor for all costs and expenses in connection with the storage and
shipment of returned samples.
ARTICLE VIII
TRADEMARKS AND INTELLECTUAL PROPERTY RIGHTS
The Products shall be Detailed by Vendor's Representatives under trademarks
owned by Company or an Affiliate of Company. This Agreement does not constitute
a grant to Vendor of any property right or interest in the Products or any
trademarks which Company or an Affiliate of Company uses with respect to the
Products or to the name or business style of Company. Vendor and the
Representatives shall use the Product Promotional Materials only for the
purposes of this Agreement, and all copyright and other intellectual property
rights in the Product Promotional Materials shall remain with Company.
ARTICLE IX
COMMUNICATIONS; MONITORING THE PROGRAM
9.1. COMMUNICATIONS FROM THIRD PARTIES. Vendor and its Representatives
shall use their best efforts to advise Company of all comments, statements,
requests and inquiries of the medical profession or any other third parties
relating to the Products that are not addressed by either Product Labeling or
the Product Promotional Materials, of which Vendor becomes aware. All responses
to such communications to the medical profession or such other third parties
shall be handled solely by Company. Vendor shall provide reasonable assistance
to Company to the extent requested by Company, and at Company's cost and
expense, to fully respond to such communications.
9.2. GOVERNMENT AGENCIES. All communications with government agencies,
including the FDA, concerning the Products shall be the sole responsibility of
Company. Company shall supply Vendor with a copy of all such communications.
Vendor shall assist Company with respect to such communications with government
agencies to the extent requested by Company, and at Company's cost and expense.
Vendor shall use its best efforts to provide Company with any documents or
information reasonably requested by Company for purposes of responding to any
communications with government agencies within seventy-two (72) hours of
Company's request.
9.3. CUSTOMER COMMUNICATIONS. In addition to Detailing, Vendor shall
assist Company with respect to customer communications (as reasonably requested
by Company and at Company's cost and expense) within the Territory and shall
regularly advise Company of market, economic, regulatory and other developments
of which Vendor may become aware which may affect the sale of the Products in
the Territory.
9.4. APPOINTMENT OF COORDINATORS. The parties shall each appoint an
authorized coordinator of the Program ("Coordinators") between whom all
communications required or desired to be given will be sent and between whom
Detailing activities will be coordinated. Within thirty (30) days of signing
this Agreement, each party will notify the other as to the name of its
Coordinator. Each party may replace its Coordinator at any time, upon notice to
the other party.
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9.5. REVIEW OF RESULTS. The parties shall review and discuss the actual
results compared to the marketing plans for Detailing of the Products at the JCC
meetings, or as otherwise mutually agreed upon by the parties. Company shall
regularly and promptly share with Vendor all reports, audits and other data it
develops relative to the Program.
ARTICLE X
INSURANCE
10.1. VENDOR INSURANCE COVERAGE. Vendor shall maintain insurance coverage
as follows:
(a) Workers' Compensation insurance with statutory limits of
liability and Employer's Liability insurance with a limit of [CONFIDENTIAL
TREATMENT REQUESTED];
(b) Commercial General Liability insurance, including completed
operations and products liability, with a combined single limit of [CONFIDENTIAL
TREATMENT REQUESTED];
(c) Automobile liability insurance with a combined single limit of
[CONFIDENTIAL TREATMENT REQUESTED].
10.2. COMPANY INSURANCE COVERAGE. Company shall maintain Commercial
General Liability insurance (primary and secondary coverage combined), including
completed operations and products liability, with a combined single limit of at
least [CONFIDENTIAL TREATMENT REQUESTED].
10.3. CERTIFICATES OF INSURANCE. All of the foregoing insurance shall be
maintained with responsible carriers and such terms of coverage shall be
evidenced by certificates of insurance furnished by one party to the other. Such
certificates of insurance shall provide for at least thirty (30) days' written
notice to the other party prior to cancellation or modification of any of the
material terms of such coverage, and include a loss payable clause naming the
other party as a beneficiary of such insurance or as an additional insured.
ARTICLE XI
ADVERSE REACTION REPORTING AND REGULATORY MATTERS
11.1. IMMEDIATE NOTIFICATION. Vendor and Company agree to notify the other
party as soon as reasonably practicable of any information that each may obtain
or learn concerning any Product or package complaint or any serious unexpected
side effect, injury, toxicity, or sensitivity reaction or any unexpected
incidence of severity thereof associated with the clinical uses, studies,
investigations, tests and marketing of the Products, whether or not determined
to be attributable to the Products. "Serious" as used in this Section 11.1
refers to an experience which results in death, permanent or substantial
disability, in-patient hospitalization, prolongation of existing in-patient
hospitalization, a congenital anomaly or cancer, or a result of an overdose or
life threatening condition. "Unexpected" as used in this Section 11.1 refers to
(i) conditions or developments not previously submitted to governmental Agencies
or encountered during clinical studies of the Products and not reflected in the
Product Promotional Materials or the Product
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Labeling, or (ii) conditions or developments occurring with greater frequency,
severity, or specificity than shown by information previously submitted to
governmental Agencies or encountered during clinical studies of the Products and
not reflected in the Product Promotional Materials or the Product Labeling. Each
party shall also notify the other in a timely manner of any other adverse
experience, i.e., any unfavorable and unintended change in the structure
(signs), function (symptoms) or chemistry (laboratory data) of the body
temporally associated with the use of the Products, whether or not considered
related thereto.
11.2. THREATENED AGENCY ACTION. Vendor and Company shall each immediately
notify the other party of any information that each may obtain or learn
regarding any threatened or pending action by an Agency which may affect the
Products. Vendor shall, at the request of Company and at the cost and expense of
Company, cooperate with Company in formulating a procedure for taking
appropriate action in response to such information. Unless compelled by law,
Vendor shall not respond to an Agency without the prior written consent of
Company.
11.3. TRAINING. Vendor and Company shall develop appropriate instructions
in the Training Program for Representatives as to handling of information
received or obtained subject to Sections 11.1 and 11.2.
ARTICLE XII
RETURN/RECALL
12.1. RETURNED PRODUCTS.
(a) Company shall be responsible for handling all returned
Products, including shipment and compensation or credit for the returned
Products. Any Products inadvertently returned to Vendor shall be shipped to
Company or at its direction, in compliance with Company's returned goods policy,
and Vendor shall advise the customer who made the return that the Products have
been returned to Company. Company shall reimburse Vendor's shipping and other
costs in connection with the handling of such returned Products within thirty
(30) days of delivery to Company of Vendor's statement for such costs. Upon
request Vendor shall provide Company with documentation relating to such costs.
(b) At Company's request, Vendor shall assist Company in obtaining
and receiving any Products that have been recalled, and any costs incurred by
Vendor with respect to participating in any such recall shall be reimbursed by
Company within thirty (30) days of delivery to Company of Vendor's statement for
such costs.
ARTICLE XIII
CONFIDENTIAL INFORMATION
13.1. CONFIDENTIAL INFORMATION. Each party acknowledges and agrees that it
will have access to, or become acquainted with, Confidential Information of
Company in the course of the performance of services under this Agreement. For
the purposes of this Agreement, "Confidential Information" shall mean any
information of Vendor, Company or any of their respective Affiliates, which
gives Vendor or Company an advantage over its competitors who do not possess
such information and constitutes valuable trade secrets and/or proprietary data
which was revealed to Company or Vendor as a result of entering into or
performing its obligations
15
under this Agreement, including but not limited to, information which relates to
Products, the Program, Target Customers, designs, methods, discoveries,
improvements, documents, trade secrets, proprietary rights, business affairs,
customer information or employee information. Provided, however, that
Confidential Information shall not include any information that:
(a) Was known to the receiving party formation prior to execution
of this Agreement. without an obligation to keep it confidential;
(b) Was lawfully obtained by the receiving party from a third party
without any obligation of confidentiality;
(c) Is, at the time of disclosure, in the public domain;
(d) Becomes part of the public domain after disclosure by
publication or otherwise, except by breach of this Agreement;
(e) Is developed by or for the receiving party independently and
apart from this Agreement; or
(f) Is otherwise knowledge possessed by the receiving party or its
employees as the result of their industry experience or education.
13.2. HANDLING OF CONFIDENTIAL INFORMATION. Except as otherwise required
by law, each party shall keep all Confidential Information in confidence and
shall not, at any time during or for a period of three (3) years from the
termination of this Agreement, without the disclosing party's prior written
consent, disclose or otherwise make available, directly or indirectly, any
Confidential Information to anyone other than the receiving party's employees
who need to know the same in the performance of the services hereunder. Each
party shall use the Confidential Information only in connection with the
performance of the services hereunder and for no other purpose. Each party shall
inform its employees of the trade secret, proprietary and confidential nature of
the Confidential Information.
ARTICLE XIV
TERM AND TERMINATION
14.1. TERM. This Agreement shall take effect on the date on which both
parties execute this Agreement and shall continue in effect until the date
[CONFIDENTIAL TREATMENT REQUESTED] after the Product Launch Date (the "Initial
Term"), unless terminated earlier as set forth herein. The Initial Term of this
Agreement may be extended upon mutual, written agreement of the parties. If the
Initial Term is extended, the parties shall negotiate in good faith provisions
of Section 3.1 regarding Service Fees. References in this Agreement to the term
of this Agreement include both the Initial Term and any extension thereof, if
applicable.
14.2. BANKRUPTCY: INSOLVENCY. Either party may terminate this Agreement
upon notice to the other upon the occurrence of: (a) the entry of a decree or
order for relief by a court of proper jurisdiction in an involuntary case of the
other party under the Federal Bankruptcy Code, as now constituted or hereafter
amended, or any other applicable federal or state insolvency or other similar
laws, and the continuance of any such decree or order in effect for a period of
sixty
16
(60) consecutive days; or (b) the filing by the other party of a petition for
relief under the Federal Bankruptcy Code, as now constituted or hereafter
amended, or any other applicable federal or state insolvency or similar laws.
14.3. TERMINATION FOR BREACH. Subject to Section 3.2 and other continuing
obligations, either party may terminate this Agreement in the event of a
material breach of the other party's obligations under this Agreement, provided
that such breach has not been cured within thirty (30) days after notice thereof
from the non-breaching party.
14.4. TERMINATION DUE TO FAILURE TO RECEIVE FDA APPROVAL. If Company does
not receive an approval letter from the FDA for the Product on or before May 1,
2002, Vendor may terminate this Agreement immediately upon providing written
notice to Company.
14.5. TERMINATION DUE TO DELAY IN PRODUCT LAUNCH. If the Product Launch
Date does not occur within ninety (90) days after FDA approval, either party may
terminate this Agreement upon sixty (60) days written notice to the other.
14.6. TERMINATION DUE TO REGULATORY AND OTHER PROBLEMS. If the Product is
not being marketed due to regulatory problems, court or administrative
proceedings, product liability claims, recalls, raw materials shortages, or
similar factors beyond the control of Company, then, subject to Section 3.2,
Vendor may terminate this Agreement upon thirty (30) days written notice to
Company.
14.7. TERMINATION DUE TO ASSIGNMENT OR CHANGE IN CONTROL. In the event of
a Change of Control (defined herein), the party that has had a Change In Control
(the "Affected Party") shall give Notice to the other party (the "Non-Affected
Party") within thirty (30) days of the occurrence of such Change In Control. If
the Change In Control involves a material and direct competitor of the
Non-Affected Party, the Non-Affected Party may terminate this Agreement by
written notice to the Affected Party within sixty (60) days after receipt of the
Notice of a Change In Control. If the Change In Control does not involve a
material and direct competitor of the Non-Affected Party, this Agreement may not
be terminated by the Non-Affected Party. For purposes of this Section, "Change
In Control" includes a purchase, assignment or transfer of a controlling
interest in the Affected Party or substantially all of its business and assets
and any merger or consolidation involving the Affected Party or any Affiliate of
the Affected Party that requires a vote of the stockholders of the Ultimate
Parent of the Affected Party. "Ultimate Parent" for Vendor is Cardinal Health,
Inc. and the Ultimate Parent for Company is its stockholders.
14.8. TERMINATION DUE TO FAILURE TO REACH SALES MINIMUMS. Upon expiration
of the twelve (12)-month period beginning on the Product Launch Date, either
party may terminate this Agreement upon providing at least one hundred eighty
(180) days prior written notice to the other party if sales of the Product are
less than the minimum levels specified by the JCC; provided, however, Company
may not terminate this Agreement pursuant to this Section 14.8 until all amounts
owed to Vendor by Company are paid in full.
17
14.9. TERMINATION: PHASE OUT. In the event that this Agreement is
terminated pursuant to Sections 14.2 through 14.8, and at Company's request, the
parties shall discuss in good faith an appropriate phase-out of Vendor's
Detailing activities.
14.10. TERMINATION: CONTINUING RIGHTS. The termination or expiration of
this Agreement shall not affect Company's obligation to reimburse or pay Vendor
any amount then due and owing under this Agreement. Further, the termination or
expiration of this Agreement shall not affect any rights or obligations of any
party under this Agreement which are intended by the parties to survive such
termination. The Service Fee paid by Company for the month in which this
Agreement is terminated shall be prorated based on the number of days in that
month, and Vendor shall refund any overpayment to Company.
14.11. TERMINATION: RETURN OF MATERIALS. Within sixty (60) days following
the termination or expiration of this Agreement, Vendor shall return to Company
all Confidential Information, Product Promotional Materials, marketing plans,
forms, territory lists, reports and any and all other tangible items provided to
Vendor by Company.
14.12. TERMINATION: ACCELERATION OF DEFERRED FEES. Upon termination of this
Agreement, all unpaid Deferred Fees consisting of all unpaid principal and
accrued but unpaid Interest and any other amounts due from Company and financed
by Vendor under this Agreement shall be accelerated and immediately due and
payable by Company.
14.13. RESIDUAL PAYMENTS. Upon expiration or termination of this Agreement,
with the exception of termination by Company pursuant to Section 14.3 of this
Agreement, Company shall continue to pay Vendor on a monthly basis, in arrears,
for a period of [CONFIDENTIAL TREATMENT REQUESTED] after such expiration or
termination, residual payments as follows: the residual payments shall equal
[CONFIDENTIAL TREATMENT REQUESTED]; provided, however, such residual payment
percentage may be reduced as follows: In the event Company increases the number
of Representatives hired by Vendor under this Agreement (as set forth in Section
2.1 of this Agreement), the residual payment shall be reduced by [CONFIDENTIAL
TREATMENT REQUESTED]. Further, if this Agreement is extended beyond the initial
five (5) year term in accordance with Section 14.1 of this Agreement, the
residual payment shall be reduced by [CONFIDENTIAL TREATMENT REQUESTED]. For
purposes hereof, the number of Representatives and the related residual fee
shall be determined as of the first day of each calendar month. This Section
shall not limit any damages to which either Vendor may be entitled as a result
of Company's breach.
During the term of this Agreement and thereafter as long as residual
payments are due to Vendor pursuant to this Section 14.13, Company shall provide
to Vendor monthly sales reports in a mutually agreed upon format. Such sales
reports shall be provided to Vendor electronically within ten (10) days of the
end of each month.
During the term of this Agreement and for a period of one (1) year after
the final residual payment owed to Company is made by Vendor, Company shall
permit Vendor's designated employees or agents to have access during ordinary
business hours to records of all Product sales information in order to verify
the accuracy of amounts paid to Vendor by Company.
18
ARTICLE XV
RECORDKEEPING; AUDIT RIGHTS
Vendor shall keep accurate records in sufficient detail as to costs and
expenses for which Company must reimburse Vendor under this Agreement. Upon
Company's reasonable request made during or within one (1) year after the term
of this Agreement, and at Company's expense, Vendor shall permit Company's
designated employees or agents to have access during ordinary business hours to
records of such costs and expenses in order to verify the accuracy of amounts
reimbursed by Company to Vendor. Company and its designated employees or agents
shall maintain in confidence all such cost and expense records of Vendor.
ARTICLE XVI
INDEMNIFICATION
16.1. DEFINITIONS. As used in this Article 16 and this Agreement,
"Damages" shall mean all liabilities, damages, assessments, levies, losses,
fines, penalties, costs, and expenses, including, without limitation, reasonable
attorneys', accountants', investigators', and experts' fees and expenses,
sustained or incurred as a result of any claims, suits, liabilities, or actions
of any nature.
16.2. INDEMNIFICATION BY VENDOR. Subject to the extent of any
indemnification from Company pursuant to Section 16.3 hereof, Vendor shall
indemnify and hold Company, its Affiliates, directors, officers, employees and
agents harmless from and against any and all Damages, except to the extent such
damages arise from the negligence or intentional wrongful actions of Company,
arising directly or indirectly from:
(a) Vendor's breach of or failure to comply with any of its
obligations under this Agreement;
(b) any inaccuracy in or breach or failure of any representation,
warranty, or covenant made by Vendor in this Agreement;
(c) any negligent or wrongful act or omission on the part of Vendor
or its employees or agents;
(d) Vendor's violation of or failure to comply with all applicable
laws relating to the promotion, distribution and sale of the Products, including
but not limited to the Act, the PDMA, the Medicare and Medicaid Anti-Kickback
Act (42 U.S.C. Section 1320a-7b(a)), the Civil False Claims Act (31 U.S.C.
Section 3729(a)), Sections 1128A, 1128B, and 1877 of the Social Security Act (42
U.S.C. Sections 1320a-7a, -7b, and 1395nn), the Health Care Fraud Act (18 U.S.C.
Section 1347), and the Criminal False Claims Act (18 U.S.C. Section 287), as
amended from time to time, as well as similar applicable state laws;
(e) Detailing of the Products, except to the extent such Damages
arise from a negligent or wrongful act or omission of Company; or
19
(f) any federal or state claim or assessment for nonpayment or late
payment by Vendor of any tax or contribution based on the status of any
Representatives as employees of Vendor.
16.3. INDEMNIFICATION BY COMPANY. Subject to the extent of any
indemnification from Vendor pursuant to Section 16.2 hereof, Company shall
indemnify and hold Vendor and its Affiliates, directors, officers, employees and
agents harmless from and against any and all Damages, except to the extent such
damages arise from the negligence or intentional wrongful actions of Vendor,
arising directly or indirectly from:
(a) Company's breach of or failure to comply with any of its
obligations under this Agreement;
(b) any inaccuracy in or breach or failure of any representation,
warranty, or covenant made by Company in this Agreement;
(c) any negligent or wrongful act or omission on the part of
Company or its employees or agents;
(d) Company's violation of or failure to comply with all applicable
laws relating to the manufacture, sale, distribution, possession and use of the
Product, the Program and this Agreement, including but not limited to the Act,
the PDMA, the Medicare and Medicaid Anti-Kickback Act (42 U.S.C. Section
1320a-7b(a)), the Civil False Claims Act (31 U.S.C. Section 3729(a)), Sections
1128A, 1128B, and 1877 of the Social Security Act (42 U.S.C. Sections 1320a-7a,
-7b, and 1395nn), the Health Care Fraud Act (18 U.S.C. Section 1347), and the
Criminal False Claims Act (18 U.S.C. Section 287), as amended from time to time,
as well as similar applicable state laws;
(e) Detailing of the Products, except to the extent such Damages
arise from a negligent or wrongful act or omission of Vendor;
(f) the accuracy or completeness of the Product Labels, Product
Promotional Materials, or the Training Program;
(g) any claims or liabilities for injury to or death of persons,
regardless of when such claim or liability is asserted or incurred, resulting
from or arising out of the manufacture, use, sale, distribution, possession of
the Products, or a manufacturing design or defect of the Products, or any
failure to warn or inadequacy of warning regarding the Products;
(h) Company's failure to pay when due or to reimburse Vendor for
any Taxes (as defined in Section 5.3);
(i) any negligent or wrongful acts or omissions on the part of
Company with respect to Vendor's employees or Representatives or those
individuals who have made application to be Representatives of Vendor;
(j) any federal or state claim or assessment for nonpayment or late
payment by Company of any tax or contribution based on the status of any former
Representatives as employees or agents of Company;
20
(k) the use by Vendor, in the performance of its duties hereunder
and as specified or directed by Company, of any trademark, trade name,
copyright, patent or other rights which use actually or allegedly infringes on
the rights of any third party;
(l) any decision or action of the JCC.
16.4. INDEMNIFICATION PROCEDURES. A party (the "Indemnitee") which intends
to claim indemnification under this Article 16 shall promptly notify the other
party (the "lndemnitor") in writing of any action, claim or liability in respect
of which the lndemnitee or any of its employees or agents are entitled to
indemnification. The Indemnitee shall permit, and shall cause its employees and
agents to permit, the Indemnitor at its discretion, to settle any such action,
claim or liability and agrees to the complete control of such defense or
settlement by the Indemnitor; provided, however, that such settlement or defense
does not adversely affect the lndemnitee's rights hereunder or impose any
obligations on the Indemnitee in addition to those set forth in this Agreement.
The Indemnitee, its employees, and agents, shall cooperate fully with the
Indemnitor and its legal representatives in the investigation and defense of any
action, claim or liability subject to indemnification. The Indemnitee shall have
the right, but not the obligation, to be represented by counsel of its own
selection and at its own expense, in connection with any indemnified claim.
16.5. LIMITATION ON VENDOR LIABILITY. It is understood that Vendor is not
an insurer and that the sums payable hereunder to Vendor by Company are based
upon the value of services offered and the scope of liability undertaken, and
such sums are not related to any potential liability of Company. Vendor makes no
warranty, expressed or implied, that the services it furnishes will avert or
prevent occurrences or the consequences therefrom which may result in loss or
damage to Company. [CONFIDENTIAL TREATMENT REQUESTED].
16.6. NO CONSEQUENTIAL DAMAGES. Notwithstanding any provision of this
Agreement to the contrary, and except with regard to claims by third parties,
neither party shall be liable to the other for any special, indirect, incidental
or consequential damages (other than liability for personal injury as provided
in this Article 16), including lost profits.
ARTICLE XVII
MISCELLANEOUS
17.1. NO WAIVER: CUMULATIVE REMEDIES. No failure or delay on the part of
either party in exercising any right, power or remedy hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder. No waiver of any provision hereof
shall be effective unless in writing and signed by the party giving such waiver.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
17.2. CAPTIONS. Article and Section headings used in this Agreement are
for convenience only and shall not affect the construction of this Agreement.
21
17.3. GOVERNING LAW. This Agreement shall be construed and the respective
rights of the parties hereto determined according to the substantive laws of the
State of Ohio, exclusive of conflict of laws principles.
17.4. SEVERABILITY. If any provision of this Agreement or any other
document delivered under this Agreement is prohibited or unenforceable in any
jurisdiction, it shall be ineffective in such jurisdiction only to the extent of
such prohibition or unenforceability, and such prohibition or unenforceability
shall not invalidate the balance of such provision to the extent it is not
prohibited or enforceable nor the remaining provisions hereof, nor render
unenforceable such provision in any other jurisdiction. In the event any
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable, the parties hereto shall use their best efforts to substitute a
valid, legal and enforceable provision which, insofar as practical, implements
the purposes hereof.
17.5. ENTIRE AGREEMENT: MODIFICATION. This Agreement contains the entire
and exclusive agreement between the parties in respect of the subject matter
hereof and supersedes and cancels all previous agreements, negotiations,
commitments and writings between the parties hereto in respect of the subject
matter hereof. Except as provided herein, this Agreement may not be changed or
modified in any manner or released, discharged, abandoned or otherwise
terminated unless in writing and signed by the duly authorized officers or
representatives of the parties.
17.6. NOTICES. Any notice or request required or desired to be given in
connection with this Agreement shall be deemed to have been sufficiently given
if sent by pre-paid registered or certified mail or facsimile transmission to
the intended recipient at the address set forth below or such other address as
may have been furnished in writing by the intended recipient to the sender. The
date of mailing or facsimile transmission shall be deemed to be the effective
date on which notice was given, provided that all facsimile transmissions shall
contain a provision requiring the intended recipient to confirm receipt and no
facsimile transmission shall be effective unless confirmation of its receipt is
received within twenty-four hours of its transmission.
All notices shall be addressed to:
IF TO COMPANY, TO:
Alliance Pharmaceutical Corp.
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
------------------------
Attention: President
-----------------------------
If to Vendor, to:
Cardinal Health Sales and Marketing Services
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Fax: (000) 000-0000
Attention:
President
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17.7. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which, when executed and delivered, shall be deemed to be
an original and all of which together shall constitute one and the same
document.
17.8. ASSIGNMENT. This Agreement may not be assigned or transferred by a
party without the prior written consent of the other party hereto, and any such
assignment by Company shall be specifically subject to the continued obligation
to pay the residual payments pursuant to Section 14.13 of this Agreement. Any
such assignment shall not materially or adversely affect the rights or
obligations of either party to this Agreement.
17.9. PUBLIC ANNOUNCEMENTS. Neither party shall issue any press release or
other public announcement, verbally or in writing, referring to the other party
or any entity which controls, is controlled by or under common control of such
party, without the prior written consent of such party. Nothing contained herein
shall limit the right of either party to issue a press release or public
announcement if, in the opinion of such party's counsel, such press release or
public announcement is required pursuant to state or federal securities laws,
rules or regulations, or other applicable laws, in which case the party required
to make the press release or public announcement shall use its commercially
reasonable efforts to obtain the approval of the other party as to the form,
nature and extent of the press release or public announcement prior to issuing
the press release or making the public announcement.
17.10. MAINTENANCE OF RECORDS. Vendor and Company each agree that
throughout the term of this Agreement and for a period of six years after the
termination of this Agreement, each will maintain records and otherwise
establish procedures to assure compliance with all regulatory, professional, and
other applicable legal requirements which relate to the Detailing and marketing
of the Products and if applicable, with the other services and activities to be
performed hereunder.
17.11. FORCE MAJEURE. Failure of either party hereto to fulfill or perform
its obligations under this Agreement shall not subject such party to any
liability if such failure is caused or occasioned by, without limitation, acts
of God, acts of the public enemy, fire, explosion, flood, drought, war, riot,
sabotage, embargo, strikes or other labor disputes (which strikes or disputes
need not be settled), compliance with any order, regulation, or request of
government, or by any other event or circumstance of like or different character
to the foregoing beyond the reasonable control and without the fault or
negligence of such party (a "Force Majeure Event") provided such party uses
reasonable efforts to remove such Force Majeure Event and gives the other party
prompt notice of the existence of such Force Majeure Event. Provided, further,
that no Force Majeure Event shall serve to delay or excuse any payment by one
party to the other then due and owing.
17.12. SETOFF. The parties agree that with respect to this Agreement, no
party shall delay or refuse to make any payment then due and owing or to take
any action which itself is not in dispute on the grounds that such party is
entitled to delay or refusal as a result of some other matter between the
parties which is in dispute or is otherwise unresolved.
23
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers.
XXXXXX, INC. dba CARDINAL HEALTH ALLIANCE PHARMACEUTICAL CORP.
SALES AND MARKETING SERVICES
By: By:
--------------------------------- ---------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
------------------------------ ------------------------------
Date: Date:
------------------------------- -------------------------------
24
SCHEDULE 1.1(m)
LIST OF PRODUCTS
[CONFIDENTIAL TREATMENT REQUESTED]
SCHEDULE 2.3(i)
COMPANY'S DRUG POLICY
I. PURPOSE
To prohibit the use, sale, dispensing, possession or manufacture of
illegal drugs or narcotics on Company premises or the use or possession
of substances which may impair the employee's ability to perform
his/her job safely or properly.
II. POLICY
A. The Company expressly prohibits the use, sale, dispensing,
possession or manufacture of illegal drugs and narcotics o
nits premises.
B. The employee will be subject to disciplinary action up to and
including immediate Involuntary Termination for bringing
non-prescribed drugs or narcotics to the workplace; being
under the influence of drugs or alcohol while working; using
illegal drugs or alcohol while working; or dispensing,
distributing or illegally manufacturing or selling such
substances on Company premises or work sites in the Company
workplace.
C. As a condition of employment, the employee is required to sign
a consent form allowing the Company the right to test the
employee for suspected substance abuse. All testing procedures
shall confirm to local, state and federal regulations.
D. The Company reserves the right to inform appropriate law
enforcement agencies of any activity prohibited by this
policy, including the name of the person known or suspected to
be involved.
E. Nothing in this statement of policy is to be interpreted as
constituting a waiver of Management's responsibility to
maintain discipline or the right to take disciplinary measures
in the case of poor performance or misconduct.
F. Upon approval of the President, the Company may allow the use
of alcohol at Company-sponsored events.
III. PROCEDURE
A. Any employee who notices any other employee demonstrating
unusual behavior patterns which appear to be drug, narcotic or
alcohol related should report the observed behavior to a
supervisor or Human Resources. In such instances, it is
advisable to have such behavior witnessed by another
supervisor (if possible).
B. The employee determined by the supervisor to be under the
influence of drugs, narcotics or alcohol shall be required to
leave the premises and will not be paid
for the time not at work. If appropriate, the employee should
be encouraged to obtain safe transportation.
C. The employee experiencing problems relating from drug,
narcotic or alcohol abuse or dependency shall be encouraged to
seek outside counseling. Such substance abuse-related
counseling in and of itself shall have no influence on work
performance evaluations.
D. The employee who is diagnosed as a drug abuser or alcoholic
may be granted an LOA to undertake rehabilitation. The
employee will not be permitted to return to work until
certification is presented to the Company that the employee is
capable of performing his/her job. Failure to cooperate with
an agreed-upon plan may result in discipline up to and
including Involuntary Termination. Rehabilitative LOAs will be
limited to one per employee during the entire term of
employment.
SCHEDULE 2.7
FORM OF MANAGEMENT REPORT
[CONFIDENTIAL TREATMENT REQUESTED]
SCHEDULE 3.1
SERVICE FEES
[CONFIDENTIAL TREATMENT REQUESTED]
