exhibit102-baxterseconda






  [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE  COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.        Exhibit 10.2      SECOND AMENDMENT TO THE  EXCLUSIVE DISTRIBUTION AGREEMENT    This Second Amendment (the “Amendment”) to the Exclusive Distribution Agreement dated  October 2, 2014 (the “Agreement”) is entered into as of March 16, 2020, (the “Effective Date”),  as amended by that First Amendment to the Agreement dated June 23, 2017 (the “First  Amendment”), by and between Baxter Healthcare Corporation, a Delaware corporation (the  “Distributor”), and Rockwell Medical, Inc. a Delaware corporation (the “Company”).    Capitalized terms used herein to the extent not otherwise defined have the meanings specified in  Exhibit A to the Agreement.    Whereas, the Company develops, manufactures and sells hemodialysis concentrates (solutions and  powders) and related ancillary products; and    Whereas, the Distributor develops, manufactures and sells dialysis and related healthcare products;  and    Whereas, the Company and the Distributor entered into an Agreement to permit the Distributor to  market, sell and distribute certain Company products on the terms and conditions set forth in the  Agreement, which was entered into on October 2, 2014, along with the First Amendment to the  Agreement, dated June 23, 2017; and    Whereas, in consideration of the mutual covenants set forth in this Agreement, the Company and  the Distributor have agreed to amend the Agreement as follows:    1.         Section 3.3 is deleted in its entirety and replaced with the following:    3.3.      Manufacturing Capacity.  Beginning with the second Forecast provided by  the Distributor, the Company shall maintain sufficient Manufacturing Capacity for each  Product at each manufacturing facility to enable the Company to supply the Distributor in  any Calendar Quarter [***] of such Product for such manufacturing facility for such quarter  based upon the most recently available Forecast.    The Company agrees and covenants to the Distributor that it shall, at all times  during the Term, to allow for the continuous and uninterrupted supply of each of the  Products to the Distributor, (a) maintain and reserve for use exclusively by the Distributor  an amount of total inventory of each Product equal to [***] days of the forecasted purchase  quantities of such Products; and (b) have outstanding purchase orders with its suppliers for  raw materials and products in an amount sufficient to allow Company to manufacture an  amount of each such Product equal to [***] days of the forecasted purchase quantity of  such Product.    For avoidance of doubt, the Company shall make capital expenditures as  necessary in order to maintain such Manufacturing Capacity.   The Company shall use  Commercially Reasonable Efforts to supply quantities of Products in excess of the  minimum.  In the event of the Company’s failure or inabilities to supply any Product(s)  within and for the time required by the Distributor, as applicable, including as a result of a        _16629527_1 





 






2    [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED  BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II)  WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.              force majeure event (e.g., act of God, fire, casualty, flood, war, act of terrorism, strike,  lockout, labor trouble, failure of public utilities, injunction, epidemic, riot, insurrection, or  any other circumstances beyond the reasonable control of Company) (a “Failure to Supply  Event”), the Company covenants and agrees that it shall (a) give notice as promptly as is  practicable under the circumstances, but in no event more than [***] days, to the Distributor  of such Failure to Supply Event, unless an order of a regulatory agency or other action  arising out of patient safety concerns requires the giving of shorter notice; (b) allocate to  the Distributor any available quantities of any such Product(s) affected by such Failure to  Supply Event (exclusive of the inventory of such Product(s) reserved by the Company for  use by the Distributor pursuant to this Section 3.3, which inventory shall be solely for the  use of the Distributor), in accordance with the [***] period immediately preceding such  Failure to Supply Event in proportion to the [***] immediately preceding such Failure to  Supply Event; (c) not intentionally discriminate against the Distributor in its allocation of  the available quantities of any such Product(s) affected by such Failure to Supply Event;  (d) compensate the Distributor for costs of Cover using the process set forth in Section 3.5  of the Agreement; (e) continue to perform its other obligations hereunder that are not  affected by any such Failure to Supply Event; and (f) that if such a Failure to Supply Event  occurs, the Distributor’s Minimum Requirements using the process set forth in Section  3.8(b) of this Agreement shall be adjusted as contemplated.    2.         Section 3.5 is deleted in its entirety and replaced with the following:    If a Manufacturing Default or Failure to Supply Event occurs and the Distributor purchases  replacement or substitute products from one or more Third Parties (“Substitute  Products”), then the Company shall reimburse the Distributor for (a) the amount by which  the purchase price for any Substitute Product purchased by the Distributor exceeds the  Contract Price for the applicable Product under this Agreement (provided that the  Distributor has used its Commercially Reasonable Efforts to obtain Substitute Product at a  price comparable to the Contract Price), and (b) [***]. Amounts payable under this Section  3.5 shall be paid by the Company within [***] days of its receipt of the Distributor’s  invoice. The payment obligations under this Section 3.5 shall cease when the facts giving  rise to the Manufacturing Default or Failure to Supply Event have been cured or no longer  exist and no new Manufacturing Default or Failure to Supply Event has occurred for at least  [***] days thereafter. For avoidance of doubt, the Distributor shall not be obligated to  exercise its option to purchase Substitute Products under this Section  3.5; and any failure to do so in one instance shall not constitute a waiver of its right to do  so in a future instance. Any exercise of such option shall not be construed [***] for the  Company’s Manufacturing Default or Failure to Supply Event. 





 






3    [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED  BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II)  WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.              3.         Section 10.1(b)(i)(x) is deleted in its entirety and replaced with the following:    10.1     Term.    (b)       Extensions.    (i)        The Distributor shall have the option to extend the Term for a period  of five (5) years following the Initial Term Expiration Date (the “First Extension”)  provided that (x) the aggregate Contract Price paid for the Concentrate Product(s)  purchased by the Distributor or directly by its customers is at least $[***] during any period  of four consecutive Calendar Quarters ending on or before March 31, 2024 (the “First  Extension Threshold”); and (y) the Distributor shall pay to the Company an extension fee  of Seven Million Five Hundred Thousand ($7,500,000) Dollars (the “First Extension  Fee”).  In the event that the Distributor has satisfied the criteria in clause (x) and desires to  extend the Term, then the Distributor shall (A) notify the Company in writing at least [***]  days prior to the Initial Term Expiration Date and reference the Distributor’s option for the  First Extension under this Section and (B) pay the First Extension Fee to the Company in  immediately available funds within five (5) Business Days of delivering such notice.    4.         Section 11.17 is deleted in its entirety and replaced with the following;    11.17   Debt Payment    Within 180 days from the Effective Date, the Company shall (a) repay in full all  indebtedness of the Company owed under the Hercules Loan Agreement (including all  accrued interest, costs and expenses, and other amounts due thereunder); and (b) obtain the  complete release of all liens granted under the Hercules Loan Agreement.    5.         Exhibit A of the Agreement is amended by amending and restating the definition of  “Disruptive Event” as follows:    “Disruptive Event” means, with respect to a Product, (a) any claim, action, or litigation  (including product liability and intellectual property claims) relating to such Product; (b)  any occurrence or development that calls into question the safety or efficacy of such  Product or that reasonably could result in a material liability to the Distributor; (c) any  adverse regulatory action, ruling, or development; (d) any breach or violation of this  Agreement or the Quality Agreement by the Company, including any inability to fulfill  Customer Orders or Firm Orders submitted in compliance with Section 3.2 and in line with  its Forecasts; (e) any Force Majeure event; or (f) any Failure to Supply Event.    6. The section entitled Support Services, Fees to Exhibit C of the Agreement is hereby deleted  in its entirety and amended as follows:    Fees    The Customer Service costs will be limited to the costs of personnel and operating expenses  to provide the Customer Services, in each case, as determined using the same methodology 





 






4    [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED  BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II)  WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.              as used by the Company in its 10-Q filing with the SEC for the calendar quarter ended June  30, 2014.  Distributor will pay a management fee of [***]% of the Customer Service costs.    The Transportation Services costs will be limited to the costs of personnel and operating  expenses to provide the Transportation Services, in each case, as determined using the same  methodology as used by the Company in its 10-Q filing with the SEC for the calendar  quarter ended June 30, 2014, as well as any reasonable out-of-pocket expenses paid in  connection therewith.   The distributor will pay a management fee of [***]% of the  Transportation Services costs.  Commencing with the quarter ending December 31, 2020,  costs billed to the Distributor for Transportation Services shall not exceed 34% of the  aggregate Contract Price paid for the Concentrates Products by the Distributor in any  applicable quarter, subject to the limitations set forth herein:     The Distributor will use Commercially Reasonable Efforts to maintain the current  liquid to dry ratio [***] of units of concentrates sold. The applicable liquid to dry  ratio shall be calculated by summing the weight of liquid concentrates sold [***],  and dividing this number by the sum of the weight of all concentrates sold [***].    o If the applicable liquid to dry ratio exceeds [***], but is less than [***],  costs billed to the Distributor for Transportation Services shall not exceed  [***]% of the aggregate Contract Price paid for the Concentrates Products  by the Distributor in any applicable quarter.    o If the applicable liquid to dry ratio exceeds [***], costs billed to the  Distributor for Transportation Services shall not exceed [***]% of the  aggregate Contract Price paid for the Concentrates Products by the  Distributor in any applicable quarter.     Moreover, the Distributor agrees that the Company [***]. During the term of  the Agreement, Distributor agrees that it shall maintain the current level of service  provided to Company’s customers and will adjust the future level of service, as  needed, to take into account the evolving needs of Company’s customer base.    The [***] will be limited to those costs of personnel and operating expenses to provide the  [***], in each case, as determined using the same methodology as used by the Company  in its 10-Q filing with the SEC for the calendar quarter ended June 30, 2014.    7. All other terms and conditions of the Agreement and the First Amendment shall remain  unchanged. 





 






5    [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED  BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II)  WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.              8. The Distributor and the Company have executed this Second Amendment to the Agreement  as of the Effective Date to evidence their agreement to the terms and provisions set forth  herein.        BAXTER HEALTHCARE CORPORATION      By:    /s/ Gavin Campbell  Gavin Campbell Title:   General Manager, US Renal              ROCKWELL MEDICAL, INC.      By:    /s/ Stuart Paul  Stuart Paul Title:   President and CEO