EXHIBIT 10.9
DISTRIBUTOR AGREEMENT
between
THE UPJOHN COMPANY
and
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Redacted portions have been marked with asterisks (***). Confidential
treatment has been requested for the redacted portions. The confidential
redacted portions have been filed separately with the Securities and Exchange
Commission.
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made and entered into the ____ day
of _____________, 19 ___ by and between THE UPJOHN COMPANY, a Delaware
corporation ("Upjohn"), with offices at 0000 Xxxxxxx Xxxx, Xxxxxxxxx, XX
00000 and ______________ ("Distributor"), a _____________ corporation with
offices at ________________________
WHEREAS, Upjohn is engaged in the business of manufacturing the
products described in Exhibit A attached hereto;
WHEREAS, the Distributor would like to act as Upjohn's distributor
of such products on a nonexclusive basis within the area hereinafter
described;
Now, therefore, in consideration of the promises and agreements
herein set forth, it is agreed as follows:
I. DESIGNATION AS DISTRIBUTOR
1.1 Upon and subject to the terms and conditions contained in this
Agreement, Upjohn hereby designates the Distributor as an authorized
distributor of the products listed and described in Exhibit A attached hereto
and made a part hereof (hereinafter referred to as the "Products"),
throughout the area hereinafter described.
1.2 Distributor hereby agrees that it will distribute and otherwise
undertake to market the Products only within the territory described in Exhibit
B attached hereto and
made a part hereof (hereinafter referred to as the "Territory") and that it
will make deliveries of the Products only within the Territory and only to
persons located within the Territory whom the Distributor has no reason to
believe may take the Products outside the Territory.
1.3 Distributor shall have no right to distribute the Products to
any person or entity that may further distribute the Products without the
written approval of Upjohn.
II. PURCHASE AND RESALE OF PRODUCTS
2.1 Upjohn hereby grants to the Distributor the right, subject to
the terms and conditions of the Agreement, to purchase the Products from
Upjohn for resale only.
2.2 Upjohn agrees to sell and deliver to the Distributor such
Products as the Distributor may order for purchase, to the extent that Upjohn
has such Products available for sale and accepts such orders. No order
submitted to Upjohn by the Distributor shall become effective unless and
until it is formally accepted by Upjohn.
2.3 Upjohn reserves the right to accept or reject any orders
received by it from the Distributor. All orders and deliveries are subject to
the condition that the Distributor's credit standing is, in the sole judgment
of Upjohn's credit department, acceptable.
III. PRICES AND PAYMENT TERMS
3.1 The prices to be paid by the Distributor for the Products,
purchased for resale, in the absence of a specific arrangement in writing to
the contrary, shall be Upjohn's list prices in effect at the time of
shipment. Prices are subject to change by Upjohn at any time upon written
notice to the Distributor. No change in price shall,
however, be effective with respect to any orders received from the
Distributor which have been previously accepted by Upjohn.
3.2 Unless otherwise specifically agreed in writing, payment for any
Products purchased by the Distributor shall be made within the time when such
payment is due under Upjohn's standard terms and conditions for sale as in
effect from time to time. In case of any failure by the Distributor in making
payment for the Products shipped hereunder, Upjohn may, at its option, defer
further deliveries until the overdue payments shall have been made and Upjohn
shall be satisfied that payment will be made for further deliveries.
IV. DELIVERY; RISK OF LOSS
4.1 Upjohn shall ship all Products ordered by the Distributor
hereunder in the manner and under the terms specified in Exhibit C attached
hereto and made a part hereof.
4.2 Upjohn will not be responsible for any delays or damages in
shipment occurring after delivery of Products and transfer of title thereto
to Distributor as aforesaid. Distributor will handle the Products strictly in
accordance with Upjohn's shipment instructions.
V. WARRANTIES AND REPRESENTATIONS
5.1 a) Upjohn shall use due care in the manufacture of the Products
sold hereunder in accordance with the provisions of the Federal Food, Drug
and Cosmetic Act (the "Act") and the FDA's Current Good Manufacturing
Practices and other regulations promulgated thereunder relating to the
manufacture of pharmaceutical
products.
(b) Upjohn hereby acknowledges that no Product constituting or
being a part of any shipment made by Upjohn pursuant hereto shall at the time
of any such shipment be adulterated or misbranded within the meaning of the
Act, or regulations promulgated thereunder, as such law or regulation is
constituted and in effect at the time of any such shipment.
5.2 The foregoing warranty is in lieu of any other warranties,
express or implied, including but not limited to any implied warranties of
merchantability or fitness for a particular purpose. Distributor shall not
bind or purport to bind Upjohn to any affirmation, representation or warranty
with respect to the Products to any third party.
5.3 Upjohn and Distributor will cooperate to handle any complaints
of Distributor's customers in an efficient and cost-effective manner,
PROVIDED that Distributor shall not return any Product to Upjohn without
Upjohn's prior written consent in each instance.
VI. OBLIGATIONS OF DISTRIBUTOR
6.1 Distributor shall maintain a stock of all Products and be able
to deliver 100% of orders within two working days.
6.2 Distributor shall use its best efforts to promote and sell the
Products in the Territory. All advertising, sales promotion and selling costs
shall be the responsibility of Distributor. Further, Distributor agrees to
initiate an incentive program with Distributor's sales and marketing
personnel to encourage promotion of Upjohn's Products. Distributor shall
submit to Upjohn reports of its incentive program on a quarterly basis.
6.3 Distributor shall be responsible for the shipping and billing on
all orders that are $300 or less. On orders greater than $300, Upjohn shall
be responsible for the shipping and billing to the customer.
6.4 Distributor shall provide Upjohn with sales reports in a form
designated by Upjohn, on a monthly basis, which reports shall include,
without limitation, customer names and addresses, customer contacts, customer
purchases and pricing.
VII. UPJOHN'S ASSISTANCE
7.1 Upjohn will supply to Distributor sales and promotional
materials to assist Distributor in selling or distributing the Products in a
proper manner. Upjohn shall not be responsible for or incur any liability in
connection with any sales or promotional materials not provided by it.
7.2 Upjohn shall provide to Distributor, in its sole discretion,
additional assistance, including qualified personnel to train and monitor
Distributor's sales force in product knowledge, selling skills and Upjohn's
marketing programs.
7.3 Upjohn shall replace all out-dated Products at 80% of Upjohn's
best catalog price at the time of the Products' return.
7.4 UPJOHN'S INCENTIVE PROGRAM
(a) By the last day of each calendar quarter, Upjohn shall pay
Distributor an "incentive payment" for each Product shipped by Distributor
and payment for which was received in full by the Distributor during the
immediately preceding calendar quarter.
(b) The incentive payment shall be calculated as follows:
1. GROUP IV PRODUCTS
a. Upjohn will pay distributor *% of the sales price for
stocking, shipping and collecting payment for the
Product, plus
b. Upjohn will pay Distributor up to a maximum of *% of
the sales price based on the Distributor's
participation, as determined by Upjohn, in the
activities as described in Exhibit D attached hereto
and made a part hereof.
2. All Other Products
a. Upjohn will pay distributor *% of the sales price
for stocking, shipping and collecting payment for
the Product, plus
b. Upjohn will pay Distributor up to a maximum of *% of
the sales price based on the Distributor's
participation, as determined by Upjohn, in the
activities as described in Exhibit D attached hereto
and made a part hereof.
***Confidential material omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.
VIII. TERM AND TERMINATION
8.1 This Agreement shall become effective upon its execution by
both parties hereto by their authorized representatives. Upon execution, this
Agreement shall remain in effect until terminated under the provisions
hereinafter set forth.
8.2 This Agreement may be terminated at any time by mutual consent
of the parties in writing, effective as provided therein, or may be
terminated without cause by either party be giving the other party thirty
(30) days notice, in writing, by registered or certified mail, of such
termination.
IX. REGULATORY MATTERS
9.1 Distributor shall promptly notify Upjohn of, and shall provide
Upjohn with, copies of any correspondence or other documentation received by
or prepared by Distributor in connection with any of the following events:
(a) receipt of a Warning Letter or other regulatory correspondence from the
FDA or any other regulatory authority in connection with the distribution
and/or storage of the Products; (b) any seizure or other regulatory or
enforcement action by the Food and Drug Administration or other regulatory
authority against the Products; or (c) any recall, market withdrawal or field
correction of the Products.
9.2 Distributor shall maintain copies of all complaints received by
it concerning Upjohn's Products and shall promptly provide to Upjohn copies
of all such complaints. Upjohn shall have the sole responsibility for
reporting to the FDA and/or any other regulatory authority all relevant
complaints relating to the Products, including, but not limited to,
complaints relating to adverse drug experience reports.
9.3 In the event that Distributor's facilities and/or records are
inspected by representatives of any federal, state or local regulatory agency
in connection with Upjohn's Products, Distributor shall notify Upjohn
immediately (by telephone and, if possible, in writing) upon learning of such
inspection, and shall supply Upjohn with copies of any correspondence or
portions of correspondence which relate to such inspection. Upjohn shall have
the right to review and comment on any response, or partial response prior to
submission of the response. After the filing of the response with the
appropriate regulatory authority, Distributor will notify Upjohn of any
further developments relating to the Products, and Distributor shall provide
copies of any documents obtained or received by Distributor from such
regulatory authority which relate to such further developments.
X. PRODUCT RECALLS
10.1 The parties agree that if either party shall discover or become
aware of any fact, condition, circumstance or event (whether actual or
potential) concerning or related to any Products which may reasonably require
recall, market withdrawal, or field correction of the Products, such party
shall promptly communicate such fact, condition, circumstance or event to the
other party within twenty-four (24) hours. In the event that: (a) any
governmental entity or regulatory body requests that any Products be
recalled, (b) a court of competent jurisdiction orders such a recall, or (c)
the parties agree, after consultation with each other, that any of the
Products should be recalled, withdrawn from the market or corrected in the
field, the parties shall take all appropriate remedial actions with respect
to such recall, withdrawal, or field correction of the Products. In the
extent that it is necessary to communicate with any party, including but not
limited to any governmental entity or regulatory body, the media or any
customer of Upjohn, concerning any such fact, condition, circumstance or
event, an Upjohn official shall be
the primary contact person concerning the remedial action. The party that is
responsible, as determined by an independent testing laboratory or mutually
acceptable FDA consultant, for the fact, consideration, circumstance or event
resulting in the recall, market withdrawal or field correction of the
Products shall bear all expense of notification, including but not limited
to, preparing customer lists and letters, mailing expenses, media notices or
other public announcements and any other necessary notices, and distribution
or return of the recalled, withdrawn, or corrected Product. Distributor shall
maintain, for a period of three years after the termination or expiration of
this Agreement, sufficient records of all sales and distributions of Products
(including but not limited to the names of customers purchasing such product
or the person receiving such distribution of Products) in order to adequately
administer a product recall, market withdrawal, or field correction.
XI. LEGAL COMPLIANCE
11.1 Each-party shall comply with all federal and state laws,
regulations and mandatory guidelines applicable to the content of its
business pursuant to this Agreement, including, but not limited to the
Federal Food, Drug & Cosmetic Act, and the Viruses, Serums, and Toxins Act.
XII. TRADEMARKS AND PROPRIETARY INFORMATION
12.1 Distributor may use Upjohn's trademarks as listed in Exhibit E
attached hereto and made a part hereof (hereinafter referred to as
"Trademarks") on a non-exclusive basis during the term of this Agreement in
the Territory solely for display, promotional and advertising purposes in
connection with the sale and distribution of the Products as permitted
hereunder. No other use of the Trademarks is permitted without Upjohn's prior
written permission.
12.2 Distributor shall identify prominently each Product by the
Trademark or Trademarks specified by Upjohn for such Product.
12.3 Distributor shall use the Trademarks so as to assure their
continued validity and enforceability. Distributor shall use the Trademarks
in strict compliance with the provisions of all applicable laws and
regulations.
12.4 No trademarks or trade names other than the Trademarks shall be
affixed to any Product.
12.5 Each party hereto understands that in connection with its
performance under this Agreement, it may receive from the other party certain
of the other party's confidential and proprietary technical or commercial
information and trade secrets, including information concerning the Products
and other products, the other party's sales, promotional and pricing
policies, plans for product development or marketing, sources of supply,
manufacturing processes and techniques, formula and raw materials. Each party
will treat as confidential and proprietary any information not protected by
patent or copyrights, and will not disclose such information to any third
party without the other party's prior written consent. Furthermore, the
receiving party will take all steps necessary to ensure that all persons to
whom such information is disclosed in the course of its performance of this
Agreement will treat such information as confidential and proprietary and
will not disclose such information to third parties.
12.6 No rights or licenses with respect to patents, Proprietary
Information, trademarks or trade names are granted or deemed granted
hereunder or in connection herewith, other than those rights expressly
granted in this Agreement.
XIII. GENERAL PROVISIONS
13.1 The Distributor is not an agent of Upjohn, and nothing herein
or performed hereunder shall be represented or construed as constituting the
Distributor an agent of Upjohn. The Distributor shall have no authority to
make any representation, guarantee or warranty (except such as are set forth
in any printed warranties furnished with the Products or otherwise authorized
by Upjohn), commitment or agreement on behalf of Upjohn or to assume or incur
any liability or indebtedness on Upjohn's behalf, or to bind Upjohn under any
obligation whatever. Upjohn shall not be liable for any act or failure to act
by the Distributor, its agents, salesmen, assistants or other employees. The
Distributor agrees to indemnify Upjohn and hold it harmless from any and all
claims resulting from violation of this paragraph or resulting from any
activity of the Distributor, its agents, salesmen, assistants or other
employees.
13.2 Neither this Agreement nor any rights hereunder shall be
assigned or transferred by the Distributor without the written consent of
Upjohn.
13.3 Upjohn shall in no event be liable for indirect, special or
consequential damages or for lost profits on any claim of any kind resulting
from any order hereunder, or from any performance or breach of this Agreement.
13.4 None of the conditions or provisions of this Agreement shall be
held to have been waived by any act or knowledge on the part of either party,
except by an instrument in writing signed by a duly authorized officer or
representative of such party. Further, the waiver by either party of any
right hereunder or the failure to enforce at any time any of the provisions
of this Agreement, or any rights with respect thereto, shall not be deemed to
be a waiver of any other rights hereunder or any breach or failure of
performance of the other party.
13.5 Any notice required or contemplated by this Agreement shall be
in writing, delivered by registered or certified mail, addressed to the
parties at their addresses hereinabove set forth, or at such other addresses
as may from time to time be substituted thereof or by notice in writing sent
by the party changing its address.
13.6 This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Michigan, United States of America.
13.7 If any provision of this Agreement shall in any way become
violative or prohibited by or under the valid applicable laws, judgments,
decrees or public policy of any state or jurisdiction, said provision or part
thereof shall be, as to said jurisdiction, ineffective and void to the extent
of such violation or prohibition without invalidating any of the remaining
provisions of this Agreement.
13.8 Distributor represents and warrants to Upjohn that this
Agreement constitutes the legal, valid and binding obligation of Distributor,
enforceable against Distributor in accordance with its terms. Upjohn
represents and warrants to Distributor that this Agreement constitutes the
legal, valid and binding obligation of Upjohn, enforceable against Upjohn in
accordance with its terms.
13.9 This Agreement and all exhibits attached hereto set forth the
entire understanding between the parties as to the subject matter hereof and
incorporates herein and supersedes all prior and collateral representations
and agreements by or between the parties. Any and all prior franchise,
dealership, distributorship or representation agreements, commitments or
understandings which may have been entered into by the parties are hereby
terminated and superseded hereby and any and all claims for violations or
breach thereunder are hereby disavowed and released.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized agents to sign this Agreement as of the first date written above.
THE UPJOHN COMPANY
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By: By:
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Name: Name:
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Title: Title:
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EXHIBIT A
THE UPJOHN COMPANY
PRODUCTS
GROUP IV PRODUCTS
ALL OTHER PRODUCTS
EXHIBIT B
THE UPJOHN COMPANY
TERRITORY
Fifty (50) United States and the District of Columbia
EXHIBIT C
THE UPJOHN COMPANY
TERMS OF DELIVERY
EXHIBIT D
THE UPJOHN COMPANY
ACTIVITY-BASED INCENTIVE PROGRAM
1. Conduct telemarketing programs identified and described by Upjohn;
2. Provide Upjohn with market and brand support;
3. Initiate and complete promotional mailings;
4. Conduct in-store advertising and marketing programs;
5. Conduct merchandising programs;
6. Provide incentives to Distributor's sales personnel to promote sales of
Upjohn Products; and
7. Assign an employee dedicated to handling Upjohn's business, including,
but not limited to, promotions, reporting, goal setting, problem solving
and communications with Upjohn and customers.
EXHIBIT E
THE UPJOHN COMPANY
TRADEMARKS
THE UPJOHN COMPANY
PRICING POLICY
The Upjohn Company ("Upjohn") believes that excessive discounting of its
products jeopardizes brand integrity and defeats advertising and marketing
goals. Accordingly, under Upjohn's Pricing Policy, Upjohn will terminate its
business relationship with any Distributor who advertises or sells any Upjohn
product at a price below the suggested retail price for the products on
Upjohn's most current price list. In addition, Upjohn will terminate its
business relationship with any Distributor who provides rebates or other
forms of price reductions on Upjohn products such that the price is below the
suggested retail price on Upjohn's most current price list.
The Pricing Policy reflects the unilateral action of Upjohn and is subject to
modification within Upjohn's sole discretion. Upjohn does not seek, nor will
it accept, a Distributor's agreement to the Pricing Policy. Each Distributor
must make its own independent decision as to how to advertise and to sell
Upjohn products, including deciding at what price to sell Upjohn products.
Issued: September, 1995
