exv4w18



 




Exhibit 4.18




Dialysis Organization Agreement



     
This Dialysis Organization Agreement (this
“Agreement”) is made by and between Amgen USA Inc.
(“Amgen”) and National Medical Care, Inc.
(“NMC”) to set forth the terms and conditions upon
which NMC shall purchase Products and Amgen shall pay rebates.



     
Amgen and NMC hereby agree as follows:






		
	1.	
    DEFINITIONS






		
	 	
     When used with initial capitals herein, the following terms
    shall have the meanings ascribed to them below:






		
	1.1.	
    “Affiliate” of a given entity shall mean an entity
    that controls, is controlled by, or under common control with
    such given entity. Control shall mean ownership of more than
    fifty percent (50%) of the voting stock of an entity or, for
    non-stock entities, the right to more than fifty percent (50%)
    of the profits of such entity.
	 
	1.2.	
    “Authorized Wholesalers” shall mean those wholesalers
    listed on Schedule 1.2, as such list may be modified
    pursuant to Section 2.3.
	 
	1.3.	
    “Data” shall mean the data provided by NMC to Amgen
    hereunder in accordance with Article 4.
	 
	1.4.	
    “Designated Affiliates” shall mean any Affiliate of
    NMC listed on Schedule 1.4, as such list may be
    modified pursuant to Section 2.2.
	 
	1.5.	
    [*]
	 
	1.6.	
    “HIPAA” shall mean the Health Insurance Portability
    and Accountability Act of 1996 and its implementing regulations,
    each as amended.
	 
	1.7.	
    “Individually Identifiable Health Information” shall
    have the meaning specified in HIPAA.
	 
	1.8.	
    “Information Sheet” shall mean the information sheet
    attached hereto.
	 
	1.9.	
    “Managed Centers” shall mean an entity for which NMC
    provides management and administrative services including the
    purchase and billing of Products, and that is listed on
    Schedule 1.9, as such list may be modified pursuant
    to Section 2.2.
	 
	1.10.	
    “Products” shall mean the Amgen products specified on
    the Information Sheet.
	 
	1.11.	
    [*]
	 
	1.12.	
    [*]
	 
	1.13.	
    “WAC” shall mean the wholesaler acquisition cost
    established by Amgen in its sole discretion from time to time.
    WAC is subject to change by Amgen in its sole discretion at any
    time, by any amount, without notice, provided, however, that
    Amgen shall use commercially reasonable efforts to notify NMC of
    any change to WAC.






		
	2.	
    PURCHASE AND SALE OF PRODUCTS






		
	2.1.	
    Discounts. [*]
	 
	2.2.	
    Affiliates. Only purchases of Products made by NMC, its
    Designated Affiliates and Managed Centers shall be eligible for
    the pricing, discounts and rebates granted pursuant to this
    Agreement. NMC shall have the right to add or remove its
    Affiliates to or from the list of Designated Affiliates and add
    or remove Managed Centers to or from the list thereof by thirty
    (30) days prior written notice to Amgen upon Amgen’s
    approval, which shall not be unreasonably withheld or delayed.
    In the event of a change to



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    information regarding a Designated Affiliate or Managed Center
    (such as address), NMC shall promptly notify Amgen and Amgen
    shall update the relevant list. Amgen shall for cause have the
    right to add or remove Affiliates of NMC from the list of
    Designated Affiliates and Managed Centers from the list thereof
    by thirty (30) days prior written notice to NMC. NMC shall
    ensure compliance with the terms and conditions of this
    Agreement applying to NMC by its Designated Affiliates and
    Managed Centers. NMC shall be jointly and severally liable for
    the acts and omissions of its Affiliates and Managed Centers,
    and Amgen shall have the right (but not the obligation) to
    proceed directly against NMC in the event of a breach of this
    Agreement by any such Affiliate or Managed Center, without first
    proceeding against such Affiliate or Managed Center.
	 
	2.3.	
    Authorized Wholesalers. Only Products purchased from
    Authorized Wholesalers shall be eligible for the [*]
    granted pursuant to this Agreement. NMC shall have the right to
    remove wholesalers from the list of Authorized Wholesalers by
    thirty (30) days prior written notice to Amgen, and shall
    have the right to add wholesalers to the list of Authorized
    Wholesalers by thirty (30) days notice to Amgen upon
    Amgen’s approval, which shall not be unreasonably withheld
    or delayed. Amgen shall have the right to add or remove
    wholesalers from the list of Authorized Wholesalers by thirty
    (30) days prior written notice to NMC. In the event of any
    such removal by Amgen, Amgen shall work with NMC to transition
    NMC’s purchasing to an Authorized Wholesaler and shall use
    reasonable efforts to establish a direct purchasing relationship
    in any interim period between the removal of the removed
    Authorized Wholesaler and the initiation of purchases from a new
    Authorized Wholesaler, if no alternative Authorized Wholesaler
    exists at such time. Any such relationship shall be subject to
    credit qualification and the approval by Amgen of an application
    for direct ship account.
	 
	2.4.	
    Own Use. Only Products purchased for NMC’s, its
    Designated Affiliates’ or its Managed Centers’
    “own use” for the treatment of dialysis patients shall
    be eligible for the [*] granted pursuant to this
    Agreement. NMC, its Designated Affiliates and its Managed
    Centers covenant that they shall not seek any such [*]
    for any Products not for its or their “own use” for
    the treatment of dialysis patients, and shall promptly notify
    Amgen in the event Amgen does provide NMC, its Designated
    Affiliate or a Managed Center any such [*].
	 
	2.5.	
    [*]
	 
	2.6.	
    Vial Sizes. NMC agrees that it and its Affiliates and
    Managed Centers shall notify Amgen if it desires to modify in
    its relative mix of Product types in their purchases from its
    historical mix. NMC shall give Amgen at least six months’
    prior written notice should NMC intend to modify the percentage
    of its purchases made up by any particular SKU deviate by more
    than 15% from the previous calendar quarter unless Amgen’s
    prior written consent shall have been obtained, which will not
    be unreasonably withheld. By way of example, if
    EPOGEN®
    2,000 unit/mL (NDC 55513-126-01) made up 35% of the aggregate
    purchases of Amgen Products by NMC, its Affiliates and Managed
    Centers in the first calendar quarter of given year, it shall
    make up no less than 29.75% (i.e. 85% of 35%) and no more than
    40.25% (i.e. 115% of 35%) of the aggregate purchases of Amgen
    Products by NMC, its Affiliates and Managed Centers in the
    second calendar quarter of such year, unless NMC shall have
    given Amgen six months’ prior written notice of such
    change. NMC shall promptly notify and consult with Amgen should
    it consider a material modification to its Product type mix. The
    purpose of this section is to allow Amgen adequate time to
    adjust its manufacturing processes. Amgen will use commercially
    reasonable efforts to modify its processes to meet the new mix,
    and will commence shipping the new mix when available.







		
	3.	
    REBATES






		
	3.1.	
    Earning and Vesting of Rebates. [*]
	 
	3.2.	
    Payment of Rebates. [*]
	 
	3.3.	
    Verification and Audit. [*]
	 
	3.4.	
    Adjustments for Changes. [*]



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	3.5.	
    Treatment of Discounts and Rebates. NMC agrees that it,
    its Affiliates and Managed Centers shall properly disclose and
    account for all discounts and rebates earned hereunder, in
    whatever form, in compliance with all applicable federal, state,
    and local laws and regulations, including §1128B(b) of the
    Social Security Act and its implementing regulations. NMC also
    agrees that it, its Affiliates and Managed Centers shall
    (i) claim the benefit of such discount or rebate received
    in the fiscal year in which such discount or rebate was earned
    or the year after, (ii) fully and accurately report the
    value of such discount or rebate in any cost reports filed under
    Title XVIII or Title XIX of the Social Security Act,
    or a state health care program, and (iii) provide, upon
    request by the U.S. Department of Health and Human Services
    or a state agency or any other federally funded state health
    care program, the information furnished to NMC, its Affiliates
    or Managed Centers by Amgen concerning the amount or value of
    such discount or rebate. Amgen shall properly disclose and
    account for all discounts and rebates given hereunder in
    accordance with its obligations under all applicable federal,
    state, and local laws and regulations, including §1128B(b)
    of the Social Security Act and its implementing regulations.
	 
	3.6.	
    Reports. Amgen shall provide to NMC a quarterly statement
    of the rebates earned hereunder with the itemization of Product
    purchases made in a particular calendar quarter, broken down by
    Designated Affiliates and Managed Centers; and any other
    information that NMC may reasonably request that is reasonably
    available to Amgen and necessary for NMC to obtain in order to
    comply with its obligations hereunder or to calculate or confirm
    purchases, discounts, or rebates due or paid. NMC agrees that it
    will provide such information to its Affiliates and Managed
    Centers in a timely manner in order to allow such Affiliates and
    Managed Centers to meet their reporting and other obligations
    hereunder and under applicable law and regulation.






		
	4.	
    PRODUCT DATA






		
	4.1.	
    Data Submission. NMC shall provide the data specified in
    Exhibit 3.1 to Amgen (or to a data collection vendor
    specified by Amgen) within thirty (30) days of the end of
    each calendar month. Such Data shall be provided in the format
    set forth in such Schedules.
	 
	4.2.	
    HIPAA Compliance. NMC shall not provide Amgen (or any
    specified data collection vendor) any Data in violation of
    HIPAA. Any Individually Identifiable Health Information shall
    have been de-identified in accordance with HIPAA prior to
    provision to Amgen or its designee. Notwithstanding anything
    contained herein to the contrary, in order to assure compliance,
    as determined by either party in its reasonable discretion, with
    any existing federal, state or local statute, regulation or
    ordinance relating to patient privacy of medical records, or at
    any time following the enactment of any federal, state, or local
    law or regulation relating to patient privacy of medical records
    that in any manner reforms, modifies, alters, restricts, or
    otherwise affects any of the data received or to be received in
    connection with any of the incentives contemplated under this
    Agreement, either party may upon thirty (30) days’
    notice, seek to modify this Agreement with respect to the
    affected incentive. NMC and Amgen shall meet and in good faith
    seek to mutually agree to modify this Agreement to accommodate
    any such change in law or regulation, with the intent to, if
    possible, retain the essential terms of the affected incentive
    and pricing structure. If the parties, after a reasonable time,
    are unable to agree upon such a modification, Amgen shall be
    entitled to terminate the affected incentive upon thirty
    (30) days’ notice or upon the date such change in law
    or regulation goes into effect, whichever is earlier.
    Notwithstanding the foregoing, in the event Amgen terminates
    such affected incentive as contemplated in the preceding
    sentence, any amount earned by NMC under such incentive through
    the effective date of such change in law or regulation or the
    date of termination, as applicable, shall be due and owing to
    NMC. In such a case, NMC agrees that it shall provide Amgen with
    such data as may be necessary for Amgen to calculate such
    incentive. In the event NMC fails to provide Amgen with such
    data, Amgen shall have no obligation to pay such incentive.
	 
	4.3.	
    Case Identifier. NMC shall consistently use a unique
    alpha-numeric code (which shall not be derived from Individually
    Identifiable Health Information) as a “case
    identifier” to track the care rendered to each individual
    patient over time, and such case identifier shall be included in
    the data provided to Amgen. The key or list matching patient
    identities to their unique case identifiers shall not be
    provided to Amgen.



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	4.4.	
    Data Use. Amgen shall have the right to use Data to
    support verification of the services referenced in this
    Agreement, for Amgen-sponsored research and analysis,
    development of marketing materials, running internal trending
    analyses, overall analyses of how to improve treatment of
    patients on dialysis, creating tools by Amgen marketing
    personnel, and other internal Amgen business purposes.
    Notwithstanding the foregoing, without NMC’s prior written
    consent (such consent not to be unreasonably withheld or
    delayed): (i) Amgen shall not disclose to third parties the
    health information data provided by NMC hereunder except
    pursuant to public health activities and to agents of Amgen
    bound by commercially reasonable obligations of confidentiality
    (or as required by law or regulation); and (ii) Amgen shall
    not sell or resell any such data or derivative works thereof to
    any third party.






		
	5.	
    WARRANTIES, REPRESENTATIONS AND COVENANTS






		
	5.1.	
    Power and Authority. Each party represents and warrants
    to the other that this Agreement: (a) has been duly
    authorized, executed, and delivered by it, (b) constitutes
    a valid, legal, and binding agreement enforceable against it in
    accordance with the terms contained herein, and (c) does
    not conflict with or violate any of its other contractual
    obligations, expressed or implied, to which it is a party or by
    which it may be bound. The party executing this Agreement on
    behalf of NMC specifically warrants and represents to Amgen that
    he or she is authorized to execute this Agreement on behalf of
    and has the power to bind NMC, its Affiliates and Managed
    Centers to the terms set forth in this Agreement. The party
    executing this Agreement on behalf of Amgen specifically
    warrants and represents to NMC that he or she is authorized to
    execute this Agreement on behalf of and has the power to bind
    Amgen.
	 
	5.2.	
    Compliance with Law and Regulation. Amgen shall, and NMC,
    its Affiliates and Managed Centers shall, comply with all
    applicable law and regulation.
	 
	5.3.	
    Products. Amgen warrants that, as of the time of delivery
    by Amgen to a common carrier or other third party that:






			
	 	5.3.1.	
    the Products are manufactured and labeled in accordance with all
    applicable federal, state and local laws and regulations
    pertaining to the manufacturing of the Products including
    without limitation, the Federal Food, Drug and Cosmetic Act and
    implementing regulations and meet all the specifications for
    effectiveness and reliability as required by the United States
    Food and Drug Administration; and;
	 
	 	5.3.2.	
    when used in accordance with the directions on their labeling,
    the Products are fit for the purposes and indications described
    in such labeling.






		
	 	
    Amgen agrees that it will promptly notify NMC if it determines
    that there has been any material defect in any of the Products
    delivered to NMC.






		
	5.4.	
    NO OTHER WARRANTIES. OTHER THAN THE WARRANTIES EXPRESSLY
    SET FORTH HEREIN, NEITHER PARTY MAKES, AND EACH PARTY EXPRESSLY
    DISCLAIMS, ALL OTHER WARRANTIES, INCLUDING THOSE OF
    NONINFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR
    PURPOSE.






		
	6.	
    INDEMNITY AND INSURANCE






		
	6.1.	
    Insurance. Each of the parties agrees that it shall
    secure and maintain in full force and effect throughout the term
    of this Agreement (and following termination, to the extent
    necessary to cover any claims arising from the Agreement)
    comprehensive general liability insurance. Such insurance shall
    provide, among other things, product liability, professional
    liability, workmen’s compensation, and broad form
    contractual liability coverage for its indemnification
    obligations hereunder, and shall have limits acceptable to the
    other party. Any limits on each of a party’s insurance
    coverage shall not be construed to create a limit on such
    party’s liability with respect to its obligations under
    this Agreement. The parties shall have the right to satisfy its
    obligations under this Section 6.1 through self-insurance.



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	6.2.	
    Indemnity.






			
	 	6.2.1.	
    By Amgen. Amgen agrees to indemnify, defend and hold
    harmless NMC, its Affiliates and Managed Centers, and its and
    their respective employees, officers and directors from and
    against any and all amounts payable to third parties pursuant to
    a written settlement agreement or court order (including but not
    limited to reasonable attorney fees incurred by NMC in the
    defense of a third party claim prior to Amgen’s assumption
    of the defense thereof) (“Third Party Awards”) that
    result directly from: (a) Products that as of the date of
    shipment by Amgen: (i) contain defects in material and
    workmanship, (ii) are adulterated or misbranded within the
    meaning of applicable provisions of the FDC Act, or
    (iii) are prohibited from being introduced into interstate
    commerce by Section 301 of the FDC Act or Section 351
    of the Public Health Service Act, or (b) Amgen’s gross
    negligence or willful misconduct; provided that such indemnity
    shall not apply to Third Party Awards arising out of the
    negligent or willful actions or omissions of NMC, its Affiliates
    or Managed Centers, or its or their respective agents,
    employees, representatives, successors or assigns, or to the
    extent arising out of a matter for which NMC is required to
    indemnify Amgen pursuant to Section 6.2.2 of this
    Agreement, or due to defects in the Products caused by persons
    other than Amgen or that result from neglect, misuse,
    unauthorized adulteration or modification, improper testing,
    handling or storage or any cause beyond the range of normal
    usage; and further provided that (a) Amgen is promptly
    notified in writing of any such third party claim for which this
    indemnity obligation may apply, (b) Amgen shall have sole
    control of the defense and settlement thereof, and (c) NMC
    cooperates fully and gives Amgen all requested information and
    assistance for such defense. The preceding paragraph sets forth
    NMC’s and its Affiliates’ sole remedy for claims of
    Product defect, adulteration or misbranding.
	 
	 	6.2.2.	
    By NMC. NMC, its Affiliates and Managed Centers agree to
    indemnify, defend and hold harmless Amgen and its respective
    employees, officers and directors from and against any and all
    Third Party Awards that result from NMC’s, its
    Affiliates’ or its Managed Centers’ transportation,
    handling, storage, promotion or sale of the Products and not
    arising solely out of Amgen’s negligence, or a matter for
    which Amgen is required to indemnify NMC pursuant to the above
    paragraph, provided that (a) NMC is promptly notified in
    writing of any such third party claim for which this indemnity
    obligation may apply, (b) NMC shall have sole control of
    the defense and settlement thereof, and (c) Amgen
    cooperates fully and gives NMC all requested information and
    assistance for such defense.






		
	7.	
    TERM AND TERMINATION






		
	7.1.	
    Term. This Agreement shall come into effect as of the
    Term Start Date and shall expire as of the Term End Date, unless
    sooner terminated in accordance with this Article 7.
	 
	7.2.	
    Termination. Either party may terminate this Agreement in
    the event of an uncured material breach following thirty
    (30) days written notice of same (which termination shall
    be automatically effective at the end of such thirty
    (30) day period should such breach remain uncured). In
    addition, Amgen shall have the right to terminate this Agreement
    without cause by thirty (30) days written notice to NMC.
	 
	7.3.	
    Compliance with or Change in Law or Regulation.
    Notwithstanding anything contained herein to the contrary, in
    order to assure compliance with any existing federal, state or
    local statute, regulation or ordinance, or at any time following
    the enactment of any federal, state, or local law, regulation,
    policy, program memorandum or other interpretation, modification
    or utilization guideline by any payer that in any manner
    reforms, modifies, alters, restricts, or otherwise affects the
    pricing of or reimbursement available for any of the Products or
    restricts NMC’s ability to provide, or Amgen’s ability
    to receive or use Data in accordance with this Agreement,
    including but not limited to the enactment of any reimbursement
    rule, guideline, final program memorandum, coverage decision,
    pricing decision, instruction or the like by the Centers for
    Medicare and Medicaid Services (“CMS”) or one of its
    contractors (carriers or fiscal intermediaries), or any change
    in reimbursement systems that in any manner reforms, modifies,
    alters, restricts or otherwise affects the reimbursement
    available to NMC for any of the



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    Products, upon ten (10) days prior written notice,
    (i) either party may terminate this Agreement,
    (ii) Amgen may, in its sole discretion, modify any pricing,
    rebate or discount terms contained herein, or (iii) Amgen
    may, in its sole discretion, exclude any Designated Affiliates
    or Managed Centers from participating in this Agreement. Without
    limiting the foregoing, any change, modification or further
    clarification to the Medicare Prescription Drug Improvement and
    Modernization Act of 2003 (“MMA”) or any rules or
    regulations promulgated thereunder, or the Erythropoeitin
    Monitoring Policy for ESRD Patients that occurs subsequent to
    the Term Start Date would specifically trigger the right to the
    termination or modification referenced herein. Additionally, to
    assure compliance with any existing federal, state or local
    statute, regulation or ordinance, Amgen reserves the right, in
    its sole discretion, to exclude any Affiliates or Managed
    Centers from the pricing, rebate and discount provisions of this
    Agreement and/or to reasonably modify any pricing, rebate or
    discount terms contained herein.
	 
	7.4.	
    [*]
	 
	7.5.	
    Effect of Termination. Upon any termination or expiration
    of this Agreement, any earned and vested rebates shall be paid
    in accordance with the terms set forth in Article 3.
    Upon termination of this Agreement for any reason other than
    actual or threatened breach by NMC, any earned but unvested
    rebates shall vest as of the effective date of such termination.
    In the event of any termination during a calendar quarter, Amgen
    shall pro-rate any data used in calculating payments hereunder,
    and such payments, as appropriate.
	 
	7.6.	
    Survival. The following provisions shall survive any
    expiration or termination of this Agreement:
    Sections 3.2-3.5 (with respect to periods prior to
    such expiration or termination) and 7.5 and
    Articles 4 (with respect to periods prior to such
    expiration or termination), 6 and 8.







		
	8.	
    MISCELLANEOUS






		
	8.1.	
    Amendment. Except as expressly set forth herein, no
    amendment of this Agreement shall be effective unless expressed
    in a writing signed by each of the parties. Amgen reserves the
    right to amend any discount, rebate or other incentive program
    described in this Agreement at any time as provided in
    Section 7.3 by giving NMC prior written notice
    thereof. In the event of such amendment, Amgen shall have the
    right, but not the obligation, to immediately vest any unvested
    rebates as of the effective date of any amendment. In addition,
    if determined by Amgen to be necessary or useful to accommodate
    such amendment, Amgen shall have the right to calculate any
    rebates as of the effective date of such amendment.
	 
	8.2.	
    Assignment. Neither party shall have the right to assign
    this Agreement without the other’s prior written consent,
    and any attempted assignment shall be void. Notwithstanding the
    foregoing, Amgen shall have the right to assign this Agreement,
    in its entirety, to an Affiliate. This Agreement shall be
    binding on the parties’ permitted successors and assigns.
	 
	8.3.	
    Conflicting Provisions. In the event of any conflict
    between this Agreement and any purchase order or invoice
    relating to the subject matter of this Agreement, including
    service fees, purchase orders or payment terms, this Agreement
    shall control.
	 
	8.4.	
    Construction. This Agreement shall be deemed to have been
    jointly drafted by the parties, and no rule of strict
    construction shall apply against either party. As used herein,
    the word “including” shall mean “including,
    without limitation.”
	 
	8.5.	
    Counterparts. This Agreement may be executed in one or
    more counterparts, each of which shall be considered an original.
	 
	8.6.	
    Currency. All amounts herein are set forth in United
    States Dollars.
	 
	8.7.	
    Force Majeure. Neither party will be liable for delays in
    performance or nonperformance of this Agreement or any covenant
    contained herein if such delay or nonperformance is a result of
    Acts of God, civil or military authority, civil disobedience,
    epidemics, war, failure of carriers to furnish transportation,



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    strike or other labor disturbances, inability to obtain material
    or equipment, or any other cause of like nature beyond the
    control of such party.
	 
	8.8.	
    Further Assurances. The parties shall perform all further
    acts reasonably requested by the other party to effectuate the
    purposes of this Agreement.
	 
	8.9.	
    Governing Law. This Agreement shall be governed by the
    laws of the State of Delaware, excluding its choice of law
    rules. Each party hereby irrevocably submits to the jurisdiction
    of the state and Federal courts located in the State of
    Delaware, and agrees that any dispute arising out of or relating
    to this Agreement shall be heard in a state or Federal court
    located in Wilmington, Delaware, and agrees that it shall not
    assert any objection or defense of lack of jurisdiction,
    improper venue or forum non conveniens in any dispute brought in
    such courts. The parties agree that any such dispute shall be
    adjudicated as between the parties, and neither party shall seek
    certification as a class. Notwithstanding the foregoing, either
    party shall have the right to join any party ruled indispensable
    by the relevant court.
	 
	8.10.	
    Merger. This Agreement, together with the Information
    Sheet, constitutes the entire Agreement, written or oral, of the
    parties concerning the subject matter hereof. The Exhibits to
    this Agreement are hereby incorporated into and made a part of
    this Agreement. This Agreement supersedes any prior or
    contemporaneous agreements on the subject matter hereof,
    including any prior data use agreement between the parties.
	 
	8.11.	
    No Partnership. The relationship between Amgen and NMC,
    its Affiliates and Managed Centers is that of independent
    contractors, and not a partnership or an agency, franchise or
    other relationship. Neither party shall have the authority to
    bind the other.
	 
	8.12.	
    Notices. Any notice or other communication required or
    permitted hereunder shall be in writing and shall be deemed
    given or made five (5) days after deposit in the United
    States mail with proper postage for first-class registered or
    certified mail prepaid, return receipt requested, or when
    delivered personally or by facsimile (as shown by concurrent
    written transmission confirmation), or one (1) day
    following traceable delivery to a nationally recognized
    overnight delivery service with instructions for overnight
    delivery, in each case addressed to the address set forth for
    Amgen below, or for NMC, at the address set forth in the
    Information Sheet, or at such designated address that either
    party shall have furnished to the other in accordance with this
    Section 8.12:





	 	 	 	 	 
	 	 	
    If to Amgen:	 	 
	 	 	 	 	
    Amgen USA Inc.
	 	 	 	 	
    One Amgen Center Drive, M/S 37-2-B
	 	 	 	 	
    Thousand Oaks, CA 91320-1789
	 	 	 	 	
    Attn: Sr. Contract and Pricing Analyst — Nephrology
    Business Unit
	 	 	 	 	
    Fax: (805) 376-8558
	 	 	
    with a copy to:	 	 
	 	 	 	 	
    Amgen USA Inc.
	 	 	 	 	
    One Amgen Center Drive, M/S 28-2-D
	 	 	 	 	
    Thousand Oaks, CA 91320-1789
	 	 	 	 	
    Attn: General Counsel
	 	 	 	 	
    Fax: (805) 499-8011







		
	8.13.	
    Publicity. The terms and conditions of this Agreement and
    the amount and structures of any discount, rebate or other
    reduction in price described herein are the confidential
    information of the parties, and neither party shall disclose the
    same to any person or entity without the other’s prior
    written consent, except as necessary to comply with obligations
    pursuant to Section 3.5 or applicable law or
    regulation. NMC shall only share such information with those
    employees who have a need to know and shall only use such
    information for the purpose of fulfilling its obligations under
    this Agreement. Neither party shall make any press release in
    connection with the execution of this Agreement without the
    other party’s prior written consent.



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	8.14.	
    Severability. Should any one or more of the provisions of
    this Agreement be determined to be illegal or unenforceable, the
    parties shall attempt, in good faith, to negotiate a
    modification of this Agreement so as to comply with the relevant
    law or regulation. Should they be unable to do so within thirty
    (30) days, either party shall have the right to terminate
    this Agreement upon ten (10) days prior written notice to
    the other.
	 
	8.15.	
    Waiver. No party shall be deemed to have waived any right
    hereunder, unless such waiver is expressed in a writing signed
    by such party.
	 
	8.16.	
    Direct Purchase of Products. NMC may purchase
    EPOGEN®
    S10, 10,000 U, 1 mL (10,000 U/mL) vial NDC
    55513-144-10;
    EPOGEN®
    M20, 20,000 U, 1 mL vials, NDC 55513-478-10 packaged
    as ten (10) vials per pack and four (4) packs per
    case; S4, 4,000 U, 1 mL vials, NDC 55513-148-10
    packaged as ten (10) vials per pack and ten (10) packs
    per case; and
    Aranesp®
    25 mcg, 1.0 mL vials, NDC 55513-010-04 packaged as
    four (4) vials per pack and ten (10) packs per case;
    40 mcg, 1.0 mL vials, NDC 55513-011-04 packaged as
    four (4) vials per pack and ten (10) packs per case;
    60 mcg, 1.0 mL vials, NDC 55513-012-04 packaged as
    four (4) vials per pack and ten (10) packs per case;
    100 mcg, 1.0 mL vials, NDC 55513-013-04 packaged as
    four (4) vials per pack and ten (10) packs per case;
    200 mcg, 1.0 mL vials, NDC 55513-014-01 packaged as
    one (1) vial per pack and four (4) packs per case;
    150 mcg, 0.75 mL single-use vials, NDC 55513-054-04
    packaged as four (4) vials per pack and ten (10) packs
    per case; 300 mcg, 1.0 mL single-use vials, NDC
    55513-015-01 packaged as one (1) vial per pack and four
    (4) packs per case;
    Aranesp®
    SingleJect®
    Prefilled Syringe 60 mcg, 0.3 mL (200 mcg/mL),
    single-use syringe, NDC 55513-039-04 packaged as 4 syringes
    per pack; 10 packs per case;
    Aranesp®
    SingleJect®
    Prefilled Syringe 100 mcg, 0.5 mL (200 mcg/mL),
    single-use syringe, NDC 55513-041-04 packaged as 4 syringes
    per pack; 10 packs per case;
    Aranesp®
    SingleJect®
    Prefilled Syringe 200 mcg, 0.4 mL (500 mcg/mL),
    single-use syringe, NDC 55513-044-01, packaged as 1 syringe
    per pack; 4 packs per case; and
    Aranesp®
    SingleJect®
    Prefilled Syringe 300 mcg, 0.6 mL (500 mcg/mL),
    single-use syringe, NDC 55513-046-01, packaged as 1 syringe
    per pack; 4 packs per case, NDC 55513-043-04 single-use
    syringe; four (4) syringes per pack; ten (10) packs
    per case, 150 mcg, 0.3 mL (500 mcg/mL) (the
    “Direct Product”) on a direct basis from Amgen in
    accordance with the terms set forth in Exhibit 8.16 which
    is incorporated herein by reference.




********



8







 



     
The parties have executed this Agreement by their designated
representatives set forth below.




	 	 	 	 	 	 	 
	
    AMGEN USA INC.	 	
    NATIONAL MEDICAL CARE, INC.
	 
	
    
    By:

    	 	
    /s/ Fred Manak
    	 	
    By:	 	
    /s/ Robert J. McGorty
    
	 	 	 	 	 	 	 
	 
	
    
    Name (print):

    	 	
    Fred Manak	 	
    Name (print):	 	
    Robert J. McGorty
	 	 	 	 	 	 	 
	 
	
    Title:	 	
    Director Contracts and Pricing	 	
    Title:	 	
    Vice President
	 	 	 	 	 	 	 
	 
	
    Date:	 	
    12/14/05	 	
    Date:	 	
    12/14/05
	 	 	 	 	 	 	 




9







 




Schedule 1.2




Authorized Wholesalers



     
[*]



10







 




Schedule 1.4




Designated Affiliates




(to be inserted)



11







 




Schedule 1.9




Managed Centers




(to be inserted)



12







 




Schedule 8.16




Approved Distribution Centers




Fresenius USA Manufacturing, Inc.




d/b/a Nephromed and affiliates




95 Hayden Avenue




Lexington, MA 92420-9192



13







 




Exhibit 3.1




Discount Terms and Conditions






		
	1	
    Rebate/Incentive Qualification Requirements. [*]



14







 




Exhibit 8.16




Terms for Purchase of Direct Product



     
Pursuant to Section 8.16 of the Agreement, the terms under
which NMC may purchase Direct Product on a direct basis from
Amgen are as follows:






		
	1.	
    Orders/Invoices. NMC shall place Direct Product orders
    with NMC Distribution Center. NMC Distribution Center shall
    transmit orders and receive corresponding invoices via
    electronic data interchange (“EDI”) in a format
    specified by Amgen.






		
	 	
     Orders may be submitted via facsimile, mail, or telephone to
    the address and telephone/fax numbers listed
    below. [*]
	 
	 	
     Amgen Customer Service may be reached at the following address
    and phone numbers:




	 	 	 	 	 
	 	 	
           Amgen USA Inc.	 	 
	 	 	
           Customer Service
    Department	 	
    Fax: 1-800-292-6436
	 	 	
           One Amgen Center Drive	 	
    Tel: 1-800-282-6436
	 	 	
           Thousand Oaks,
    CA 91320-1799	 	 







		
	2.	
    [*]
	 
	3.	
    Title and Risk of Loss. [*]
	 
	4.	
    Pricing for Direct Product. [*]
	 
	5.	
    Terms of Payment. NMC Distribution Center agrees to pay a
    [*] for Direct Product ordered, at terms of [*]
	 
	6.	
    Credit. NMC Distribution Center shall send annually,
    within one hundred twenty (120) days of Fresenius Medical
    Care Holdings, Inc.’s (“FMCH”) fiscal year end,
    or more frequently as requested by Amgen, copies of FMCH’s
    audited financial statements for such fiscal year to:




	 	 	 	 	 
	 	 	
    Amgen USA Inc.	 	 
	 	 	
    Customer Finance Department	 	 
	 	 	
    One Amgen Center Drive	 	 
	 	 	
    Thousand Oaks, CA 91320-1799	 	 







		
	 	
     If no audited financial statements are available, NMC
    Distribution Center shall send unaudited financial statements
    which are certified by NMC Distribution Center’s principal
    financial officer as being accurate in all material respects.
    Amgen shall not be obligated to ship Direct Product to NMC
    Distribution Center if there are any amounts past due on NMC
    Distribution Center’s account or if NMC Distribution
    Center’s outstanding balance due exceeds NMC Distribution
    Center’s predetermined credit limit. NMC Distribution
    Center shall supply Amgen written notice of the sale or transfer
    of all or substantially all of its assets of, or a controlling
    interest in, NMC Distribution Center at least thirty
    (30) days prior to such action if not otherwise prohibited
    by law or contractual obligations. Amgen reserves the right in
    its sole discretion to modify its credit policies and to require
    prepayment or satisfactory security at any time.






		
	7.	
    Sales Data. NMC Distribution Center shall submit all
    Direct Product sales data, including Customer returns,
    rebillings and associated credits to IMS America, Ltd.
    (“IMS”) and to any other third-party sales reporting
    organization as reasonably requested by Amgen, on a monthly
    basis, and within two (2) weeks after the close of each
    month. NMC Distribution Center shall provide all information and
    assistance reasonably required by Amgen to determine and verify
    Medicaid, other government, or third-party rebate claims or
    obligations. If NMC Distribution Center is unable to report such
    sales data to the agreed upon independent third-party sales
    reporting organization(s) due to unwillingness of the third
    party to deal with NMC Distribution Center, Amgen’s sole
    recourse shall be to terminate the Direct Product purchase
    components of this Agreement.
	 
	8.	
    Contracts and Chargebacks. NMC Distribution Center agrees
    to service contracts that Amgen has entered into with Customers
    in accordance with the terms specified in bid award
    notifications sent by Amgen to



15







 


		
		
    NMC Distribution Center. [*] Adjustments or credits will
    be made in accordance with Amgen’s Chargeback Policy
    (See Article One) attached hereto and incorporated
    herein. NMC Distribution Center further agrees to submit
    chargebacks to Amgen via EDI in a format acceptable to Amgen at
    least once per week, and in accordance with Amgen’s
    Chargeback Policy. NMC Distribution Center shall retain all
    documentation supporting such chargebacks for a period of
    eighteen (18) months from the date of sale and permit Amgen
    employees or contractors (who shall not be compensated by Amgen
    on a contingency basis) to review this documentation upon
    request.
	 
	9.	
    Product Returns. NMC Distribution Center shall comply
    with Amgen’s Product Return Policy (See
    Article Two) and all requirements of the Prescription Drug
    Marketing Act of 1987 (as amended from time to time).







			
	 	9.1	
    Returns by Customer to NMC Distribution Center: NMC Distribution
    Center shall notify Amgen of all Direct Product returned to NMC
    Distribution Center in the form of a negative chargeback. This
    will ensure that the proper adjustment is made to NMC
    Distribution Center’s account.
	 
	 	9.2	
    Returns by NMC Distribution Center to Amgen: Amgen shall
    only accept Direct Product returns from NMC Distribution
    Center that have been
    pre-authorized by Amgen
    Customer Service. Direct Product must be in original, unopened
    and undamaged cartons and returned within twelve
    (12) months post expiration and must be in full compliance
    with Amgen’s Product Return Policy (See
    Article Two) attached hereto and incorporated herein. Amgen
    will promptly issue credit to NMC Distribution Center in
    accordance with Amgen’s Product Return Policy.
	 
	 	9.3	
    Returns by Customer to Amgen: Amgen shall accept from Customer
    Direct Product returns that have been pre-authorized by Amgen
    Customer Service. NMC Distribution Center agrees to
    promptly issue credit to Customer returning Direct Product
    directly to Amgen and for which Amgen has issued a credit memo
    to NMC Distribution Center.






		
	10.	
    Rebillings and Associated Credits. NMC Distribution
    Center agrees to submit to Amgen all Customer rebillings and
    associated credits in conformance with Amgen’s Chargeback
    Policy.
	 
	11.	
    Product Recall. In the event of a recall, Amgen will
    promptly notify NMC Distribution Center and relevant
    Customer of such recall and arrange for Direct Product to be
    shipped directly to Amgen. Amgen will provide a third-party
    billing number (common carrier) to Customer and
    NMC Distribution Center for shipping of recalled Direct
    Product directly to Amgen. NMC Distribution Center shall
    provide a list of Customer names and addresses to Amgen who may
    have received recalled Direct Product. In consideration for
    NMC Distribution Center’s administrative expenses,
    Amgen will pay NMC Distribution Center for a list of each
    Customer that may have received recalled Direct Product in the
    amount equal to $1.00 per Customer name up to a maximum $100.00
    per distribution center. NMC Distribution Center shall
    render its services and assist Amgen in returning all recalled
    Direct Product to Amgen.






		
	 	
     Amgen shall provide reasonable compensation to
    NMC Distribution Center per HDMA standards for additional
    services that may be requested by Amgen. A credit memo will be
    issued to NMC Distribution Center for all recalled Direct
    Product returned to Amgen. NMC Distribution Center shall
    promptly issue credit to Customer for recalled Direct Product
    returned directly to Amgen for which Amgen has issued a credit
    memoranda to NMC Distribution Center. NMC Distribution
    Center may call Amgen Customer Service at
    1-800-282-6436 for
    further instructions in the event of a recall.






		
	12.	
    Applicable Laws and Regulations. Amgen and
    NMC Distribution Center agree to comply with all laws
    (local, state and federal) applicable to the purchase, handling,
    sale, and distribution of Direct Product. NMC agrees to provide
    Amgen with the statutory citation of all local and state laws
    and regulations contemplated by this Article 12. In
    the event there shall be a change in federal or state statutes
    (including, but not limited to Medicare or Medicaid statutes,
    Federal Food, Drug and Cosmetic Act (the “FDC Act”),
    and any other statutes governing distribution, handling,
    purchasing, or sale of drugs, medical supplies and durable
    medical equipment), case laws, regulations or general
    instructions, the interpretation of any of the foregoing, the
    adoption of new federal or state legislation, or a change in any
    third party reimbursement system, any of which are reasonably
    likely to materially and adversely affect the manner in which
    either party may perform



16







 


		
		
    or be compensated for its services under this Agreement or which
    shall make this Agreement unlawful, the parties shall
    immediately enter into good faith negotiations regarding a new
    service arrangement or basis for compensation for the services
    furnished pursuant to this Agreement that complies with the law,
    regulation, or policy. If good faith negotiations cannot resolve
    the matter within thirty (30) days, the parties shall
    terminate the Agreement.
	 
	13.	
    Diversion. NMC Distribution Center shall distribute
    Direct Product only to those approved Designated Affiliates and
    Managed Centers listed on Schedule 1.4 and
    Schedule 1.9. NMC Distribution Center shall
    promptly notify Amgen upon learning of any activity that appears
    to be diversion of Direct Product, including the sale,
    distribution or purchase of Direct Product for uses beyond the
    provision of care for dialysis patients, or the sale or
    distribution of Direct Product outside of the United States and
    Puerto Rico. Amgen may terminate this Agreement upon written
    notice if it is determined by Amgen, in its sole discretion,
    that NMC Distribution Center has purchased Direct Product from
    sources other than Amgen or distributed Direct Product to
    entities not listed on Schedule 1.4 and/or
    Schedule 1.9.




17







 




Article 1




Chargeback Policy






		
	1.	
    INITIAL SUBMISSIONS:






		
	 	
     Chargeback claims must be submitted via EDI in a format
    acceptable to Amgen. Claims must be received by Amgen no later
    than sixty (60) calendar days after NMC Distribution
    Center has invoiced the Customer. Each item must contain the
    information necessary to uniquely identify the Customer,
    including the Health Industry Number (HIN) and complete ship-to
    name and address, or other identifier as required by Amgen.






		
	2.	
    PROCESSING TIME:






		
	 	
     Amgen will process all initial chargeback claims received in an
    acceptable format within ten (10) business days. Once the
    chargeback claim has been processed, NMC Distribution
    Center will receive, by mail, the credit memoranda and/or
    discrepancy report.






		
	3.	
    DISCREPANCIES:






		
	 	
     Partial Rejections: If any item cannot be validated from the
    claim, it will be rejected and credit will not be issued for
    that item. NMC Distribution Center will receive the credit
    memoranda for the validated items in conjunction with the
    discrepancy report for rejected items. A reason will be given
    for each rejected item.
	 
	 	
     Full Rejections: Submissions not in an acceptable format or
    with a rejection rate greater than ten percent (10%) may be
    rejected in full. Upon such notification, NMC Distribution
    Center must correct the error(s) and electronically retransmit
    the entire claim.






		
	4.	
    RESUBMISSIONS:






		
	 	
     Amgen will accept resubmissions for rejected chargebacks within
    sixty (60) calendar days after NMC Distribution Center
    has been notified of the rejection. Claims must be submitted on
    Amgen’s discrepancy report with any corrections or
    additional information necessary to validate such claim.






		
	5.	
    CUSTOMER RETURNS:






		
	 	
     NMC Distribution Center must report its Customer returns
    as “negative” or “reverse” chargebacks.






		
	6.	
    CREDITS AND REBILLS:






		
	 	
     NMC Distribution Center shall submit simultaneously to
    Amgen the credits and their associated rebills within sixty
    (60) calendar days after NMC Distribution Center rebills a
    Customer.






		
	7.	
    CONTRACT ELIGIBILITY:






		
	 	
     Claims will only be honored for sales made in accordance with
    the Bid Award Notifications sent by Amgen to
    NMC Distribution Center. A facility may only participate on
    one (1) contract for each product at any given time. An
    individual contract will take precedence over any group
    purchasing organization contract of which the facility may be a
    part.






		
	8.	
    AUDIT:






		
	 	
     Amgen shall have access to all information necessary to verify
    chargeback claims.






		
	9.	
    DEDUCTIONS:






		
	 	
     Deductions of chargeback claims are not permitted unless
    supported with a valid credit memoranda from Amgen. Amgen’s
    Chargeback Policy conforms with the guidelines set by the
    Healthcare Distribution Management Association. Amgen reserves
    the right to modify its Chargeback Policy upon notice to NMC
    pursuant to Section 8.12 in the Agreement.



18







 




Article Two




Product Return Policy




AUTHORIZATION:



     
Contact Amgen Customer Service Department at 800-282-6436 for
proper instructions for Amgen Products.




RETURNABLE ITEMS:






			
	 	• 	
    Unused partials or full pack quantities with less than one year
    post expiration date.
	 
	 	• 	
    Product received in error or damaged in transit.




NON-REFUNDABLE ITEMS:



     
Although all products may be returned, no credit will be issued
for:






			
	 	• 	
    Product twelve (12) months or more post expiration date.
	 
	 	• 	
    Product destroyed or damaged due to improper storage, heat,
    cold, water, or smoke, left unrefrigerated or other conditions
    beyond the control of Amgen.
	 
	 	• 	
    Product destroyed or losses suffered in a natural disaster
    (flood, hurricane, tornado, etc.).
	 
	 	• 	
    Product obtained other than through normal channels of
    distribution.
	 
	 	• 	
    Product that is in unsaleable condition through no fault of
    Amgen.
	 
	 	• 	
    Product shipped as a no charge item.
	 
	 	• 	
    Unauthorized excess stock.




TRANSPORTATION CHARGES:






			
	 	• 	
    Prepaid by customer




TERMS OF RETURN POLICY:






			
	 	• 	
    Credit if applicable for outdated Product, will be based on
    then-current WAC less ten percent (10%).
	 
	 	• 	
    Credit for indirect customers for outdated product, will be
    issued in the form of a check by Capital Returns Inc. on behalf
    of Amgen.
	 
	 	• 	
    Credit for direct customers for outdated product, will be issued
    by Amgen in the form of a credit invoice.
	 
	 	• 	
    Amgen will not be responsible for any charges associated with
    third party return processors.
	 
	 	• 	
    No credit for shipping, handling and return processing fees.
	 
	 	• 	
    Product ordered or received in error must be reported within
    fifteen (15) business days of Product receipt.
	 
	 	• 	
    Pre-deductions from invoices are not allowed.
	 
	 	• 	
    All items are subject to credit approval by Amgen Customer
    Service.




Third Party Returns Processors:






			
	 	• 	
    For all outdated Product, please forward return with detail
    manifest directly to:




Capital Returns, Inc.




Attn: Amgen Return Goods




6101 North 64th Street




Milwaukee, WI 53218



19







 




COMPANY DISCLAIMER:






			
	 	• 	
    Products returned are subject to Amgen’s and or Capital
    Returns’ evaluation at the time of receipt for final count
    and inspection.
	 
	 	• 	
    Amgen may, with notice to Wholesaler in its sole discretion,
    make exceptions, changes and/or modifications to the Returned
    Goods Policy.



20