DISTRIBUTION OF PRODUCT UNDER
THIS AGREEMENT, SOLELY FOR PURPOSES OF CLARIFICATION AND NOT LIMITATION, IS SET
FORTH IN EXHIBIT 6.2.
IN PARTICULAR, BASED ON A STANDING PURCHASE ORDER FROM
UNITED THERAPEUTICS, LILLY WILL MANUFACTURE AND SHIP PRODUCT TO A LILLY
DISTRIBUTION CENTER, USING SHIPMENT ARRANGEMENTS CONSISTENT WITH THOSE LILLY
USES FOR PRODUCTS LILLY DISTRIBUTES AND SELLS DIRECTLY FOR LILLY'S OWN BENEFIT,
AS FURTHER DESCRIBED IN SECTION 7.5(A).
THE PARTIES WILL ESTABLISH A JOINT
COMMITTEE THROUGH THE SUPPLY LEAD CONTACTS TO FACILITATE THE USE BY UNITED
THERAPEUTICS OF LILLY'S DISTRIBUTION PROCESSES AS CONTEMPLATED BY THIS
AGREEMENT. THE PARTIES WILL AGREE ON A MINIMUM INVENTORY LEVEL OF PRODUCT TO BE
MAINTAINED IN LILLY DISTRIBUTION CENTERS IN THE MRD.
LILLY SHALL USE
COMMERCIALLY REASONABLE EFFORTS TO MAINTAIN A QUANTITY OF PRODUCT IN INVENTORY
IN LILLY'S DISTRIBUTION CENTER EQUAL TO OR GREATER THAN THE AGREED-UPON MINIMUM
INVENTORY LEVEL;
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PROVIDED THAT THE MINIMUM REPLENISHMENT QUANTITY WILL BE ONE (1) THEN-STANDARD
LILLY MANUFACTURING LOT OF PRODUCT; PROVIDED FURTHER THAT, IF A BATCH IS SPLIT,
UNITED THERAPEUTICS SHALL BE RESPONSIBLE ONLY FOR THE PORTION OF SUCH A SPLIT
BATCH THAT IS ALLOCATED TO UNITED THERAPEUTICS' DOMAIN AND NO PORTION OF SUCH A
SPLIT BATCH THAT IS ALLOCATED TO LILLY'S DOMAIN.
AS OF THE EFFECTIVE DATE, ONE
(1) STANDARD MANUFACTURING LOT OF PRODUCT IS EQUAL TO [***] ([***]) TABLETS.
LILLY WILL INVOICE UNITED THERAPEUTICS IN ACCORDANCE WITH SECTION 6.4 FOR
PRODUCT SHIPPED BY LILLY TO LILLY DISTRIBUTION CENTERS AT THE TIME OF SHIPMENT
TO DISTRIBUTION CENTER, AND UNITED THERAPEUTICS WILL MAKE PAYMENT TO LILLY
AGAINST SUCH INVOICES IN ACCORDANCE WITH SECTIONS 6.3, 6.4, 6.5, 6.6, 6.7 AND
6.8.
(B)
AS AN AGENT FOR UNITED THERAPEUTICS, LILLY WILL (I) STORE PRODUCT
IN ITS DISTRIBUTION CENTERS, (II) RECEIVE, THROUGH ITS DISTRIBUTION CENTERS,
ORDERS FOR PRODUCT FROM WHOLESALERS, (III) SHIP ORDERED PRODUCT TO WHOLESALERS,
(IV) BILL/INVOICE WHOLESALERS, (V) PROCESS INVOICE REMITTANCES FROM WHOLESALERS,
AND (VI) RECEIVE PAYMENTS FROM WHOLESALERS.
UPON SHIPMENT OF PRODUCT TO A
WHOLESALER, LILLY SHALL INVOICE THE WHOLESALER FOR THE SELLING PRICE AT LILLY'S
THEN-CURRENT STANDARD TERMS AND THE TERMS OF LILLY'S AGREEMENTS WITH ITS
WHOLESALERS.
(C)
THE INTENT OF THE ARRANGEMENT DESCRIBED IN SECTIONS 6.2(A) AND
6.2(B) IS TO PERMIT THE PARTIES TO TAKE ADVANTAGE OF LILLY'S INTERNAL PROCESSES
AND LILLY'S EXISTING RELATIONSHIPS WITH WHOLESALERS BUT, IF THERE ARE SUBSEQUENT
CHANGES IN LILLY'S INTERNAL PROCESSES AND/OR LILLY'S EXISTING RELATIONSHIPS WITH
WHOLESALERS, OR THERE ARE OTHER CHANGES AND CIRCUMSTANCES THAT OTHERWISE MAKE
SUCH ARRANGEMENT NOT FEASIBLE OR DESIRABLE, THE PARTIES SHALL DISCUSS IN GOOD
FAITH AMENDING THIS AGREEMENT.
6.3
PURCHASE PRICE.
(A)
IN ADDITION TO THE AMOUNT PAID TO LILLY DEL CARIBE BY UNITED
THERAPEUTICS AS A PREPAYMENT FOR SUPPLY OF THE PRODUCT IN THE AMOUNT SET FORTH
IN SECTION 6.1, AND IN CONSIDERATION FOR SUPPLY OF THE PRODUCT UNDER THIS
AGREEMENT, UNITED THERAPEUTICS SHALL PAY TO LILLY THE PURCHASE PRICE FOR SUCH
PRODUCTS SOLD BY LILLY TO UNITED THERAPEUTICS, AS SET FORTH IN EXHIBIT 6.3(A),
SUBJECT TO ADJUSTMENT IN ACCORDANCE WITH SECTION 6.3(B) AND/OR 6.3(C),