Source: https://corporate.findlaw.com/contracts/operations/sourcing-and-supply-agreement-amgen-inc.html
Timestamp: 2019-07-16 06:02:40
Document Index: 571353947

Matched Legal Cases: ['§1128', '§ 1001', '§ 1001', '§ 164', '§ 1320', '§1861']

Sourcing and Supply Agreement - Amgen Inc. - FindLaw
Sourcing and Supply Agreement - Amgen Inc.
Note: Redacted portions have been marked with [*]. The redacted portions are subject to a request for
confidential treatment that has been filed with the Securities and Exchange Commission.
This Sourcing and Supply Agreement (this "Agreement") is made by and between Amgen USA Inc. ("Amgen"), a wholly-owned subsidiary of Amgen Inc., and DaVita Inc. ("Dialysis Center") to set forth the terms and conditions upon which Dialysis Center Purchasers shall purchase EPOGEN ® (Epoetin alfa) and Amgen shall provide discounts and pay rebates to Dialysis Center on EPOGEN. Each of Amgen and Dialysis Center are referred to herein as a "Party" and together as the "Parties". Amgen Inc. is a party to this Agreement for the purposes set forth in Sections 3.1, 8.2, 9.4, 9.5.1, and 11.14 of this Agreement. Capitalized terms used herein and not otherwise defined herein shall have the meaning set forth in Section 1.
WHEREAS, Amgen is a leading innovator in the field of ESAs with expertise in the field of anemia management and the ability to manufacture and supply safe and efficacious ESAs for the treatment of dialysis patients;
WHEREAS, Dialysis Center is a leading provider of dialysis services in the Territory with expertise in establishing and delivering state-of-the-art, quality-of-care standards, practices and procedures for the care of patients undergoing dialysis;
WHEREAS, Dialysis Center desires to select one ESA supplier to meet its primary ESA needs on a long term basis for patients undergoing dialysis;
WHEREAS, Dialysis Center has evaluated the ESAs available for commercial use and those in clinical development, including potential [*] ESAs, and has determined that EPOGEN ® (Epoetin alfa) will be its preferred ESA for managing anemia for patients undergoing dialysis;
WHEREAS, the Parties wish to enter into this Agreement to, among other things, provide for Dialysis Center's selection of Amgen as the Dialysis Center Purchasers' supplier of EPOGEN to meet the Dialysis Center Purchasers' requirements for EPOGEN for the treatment of dialysis patients during the Term, on all of the terms provided herein;
WHEREAS, Dialysis Center seeks stable, predictable and competitive pricing over a seven year period, which it can achieve through the discounts, rebates and other price concessions set forth herein;
WHEREAS, in order to provide Dialysis Center with such pricing over a seven year period, Amgen will make substantial long-term investments and forego other potential opportunities to scale and schedule its manufacturing capacity and supply of EPOGEN for Dialysis Center Purchasers in accordance with Dialysis Center Purchasers' anticipated demand for EPOGEN for use in the Territory as provided under this Agreement;
NOW THEREFORE, in consideration of the foregoing recitals and of the mutual promises and covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, each Party hereby agrees as follows:
When used with initial capitals herein, the following terms shall have the meaning ascribed to them below:
"Actual Supply Shortfall" has the meaning set forth in Section 2.5.
"Added Dialysis Center Purchaser" has the meaning set forth in Section 2.8.2.
"Added Dialysis Center Purchaser Effective Date" has the meaning set forth in Section 2.8.2.
"Added Dialysis Center Purchaser Transaction Date" means with respect to each Added Dialysis Center Purchaser: (a) in the case of a new Dialysis Center Affiliate, the effective date of the acquisition or establishment of the new Dialysis Center Affiliate; or (b) in the case of a new Managed Center, the earlier of (i) the effective date of the contract pursuant to which a dialysis facility becomes a Managed Center or (ii) the date Dialysis Center first provides services to a dialysis facility that results in such facility becoming a Managed Center, in each case after the Term Start Date.
"Administrator" has the meaning set forth in Section 9.2.1.
"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.
"[*]" has the meaning set forth in Section 2.5.1.
"Alternative ESA" means an ESA that is available for use in the Territory that is not EPOGEN or Aranesp.
"Alternative ESA Purchase Amount" has the meaning set forth in Section 2.1.1.
"Alternative ESA Purchase Event" has the meaning set forth in Section 2.1.1.
"Alternative ESA Purchase Event Share of Sales" shall be calculated as follows
A = Committed Unit Purchases of Amgen ESAs during the [*] which an Alternative ESA Purchase Event has occurred
B = Committed Unit Purchases of Amgen ESAs during the [*] which such Alternative ESA Purchase Event has occurred
C = Committed Unit Purchases of Alternative ESAs during the [*] which an Alternative ESA Purchase Event has occurred
D = Committed Unit Purchases of Alternative ESAs during the [*] which such Alternative ESA Purchase Event has occurred
"Amgen Business Representative" has the meaning set forth in Section 4.1.
"[*]" means [*] for use with patients receiving Dialysis Services, which [*] is the subject of a written agreement between the Parties or their Affiliates.
"Amgen ESA Risk Evaluation Program" has the meaning set forth in Section 11.18.
"Amgen ESAs Share of Sales" shall mean Committed [*] Purchases of Amgen ESAs during the Quarter divided by the sum of Committed [*] Purchases of Amgen ESAs and Committed [*] Purchases of Alternative ESAs during the Quarter.
Amgen ESAs Share of Sales Illustration:
Committed [*] Purchases of Amgen ESAs
Committed [*] Purchases of Amgen ESAs + Committed [*] Purchases of Alternative ESAs
"Amgen Indemnitees" has the meaning set forth in Section 9.5.2.
"Appeal Procedures" has the meaning set forth in Section 9.2.3.
"Aranesp" means Amgen's proprietary darbepoetin alfa product that is marketed by Amgen in the Territory under the trademark Aranesp ®.
"Arbitrator" has the meaning set forth in Section 9.2.1.
"Authorized Removal Occurrence" has the meaning set forth in Section 2.8.3.
"Authorized Wholesalers" shall mean those wholesalers listed on Exhibit B, as such list may be modified pursuant to Section 2.7.
"Authorized Wholesaler List" has the meaning set forth in Section 2.7.
"Available EPOGEN SKUs" have the meaning set forth in Section 2.4.5.
"Award" has the meaning set forth in Section 9.2.3.
"Base Invoice Discount" means the base invoice discount described in Section 2.1 of Exhibit A.
"Base Rate Rebate" means the base rebate described in Section 3.1 of Exhibit A.
"Baseline [*]" has the meaning set forth in Section 2.1.2.
"[*] Rebate" means the [*] rebate described in Section 3.2 of Exhibit A.
"Best Price" has the meaning set forth in Section 3.6.
"[*] Rebate" means the [*] rebate described in Section 3.3 of Exhibit A.
"Business Representatives" has the meaning set forth in Section 4.1.
"Certification" has the meaning set forth in Section 5.2.
"Committed [*] Purchases of Amgen ESAs" means, for any period, the aggregate amounts in [*] of EPOGEN and Aranesp purchased by all Dialysis Center Committed Purchasers during such period for use in providing Dialysis Services, net of product returns and adjustments, which aggregate [*] data have been independently confirmed by Amgen through the Relevant Information.
"Committed [*] Purchases of Alternative ESAs" means, for any period, the aggregate amounts in [*] of all Alternative ESAs purchased by all Dialysis Center Committed Purchasers from any source during such period for use in providing Dialysis Services, (provided that any Alternative ESA provided to a Dialysis Center Committed Purchaser at no or nominal cost from any source shall be considered a purchase), adjusted to be an equivalent [*] of EPOGEN (in [*]) based on the [*] (if the [*] is clearly set forth therein) or otherwise as reasonably determined pursuant to Section 2.1.2, and which aggregate [*] data have been independently confirmed by Amgen through the Relevant Information.
"Compensation Data" has the meaning set forth in Section 6.1.
"Confidential Information" has the meaning set forth in Section 11.14.
"Data" means the data set forth on Schedule 1 provided by Dialysis Center to Amgen pursuant to the terms and conditions of Section 5 and Exhibit A.
"Debarred Party" has the meaning set forth in Section 10.2.3.
"Designated Affiliates" shall mean any Affiliate of Dialysis Center listed on Exhibit C, as such list may be modified pursuant to Section 2.8.1.
"Designated Affiliates List" has the meaning set forth in Section 2.8.1.
"Dialysis Center Business Representative" has the meaning set forth in Section 4.1.
"Dialysis Center Committed Purchasers" has the meaning set forth in Section 2.8.5.
"Dialysis Center Committed Purchasers List" has the meaning set forth in Section 2.8.5.
"Dialysis Center Indemnitees" has the meaning set forth in Section 9.5.1.
"Dialysis Center Purchasers" shall mean Dialysis Center, the Designated Affiliates, and the Managed Centers. Dialysis Center Purchasers include Added Dialysis Center Purchasers from and after the Added Dialysis Center Purchaser Effective Date.
"Dialysis Services" means services related to the treatment of patients receiving renal dialysis, including hemodialysis, peritoneal dialysis, nocturnal dialysis, and home hemodialysis in the Territory during the Term.
"Disclosing Party" has the meaning set forth in Section 11.14.
"Discounts" means all rebates and discounts set forth on Exhibit A that may be earned by the Dialysis Center Purchasers pursuant to the terms and conditions set forth in this Agreement, which shall be earned, calculated and vested as provided in Exhibit A.
"Disputes" has the meaning set forth in Section 9.1.
"[*]" has the meaning set forth in Section 2.1.2.
"EPOGEN" means Amgen's proprietary epoetin alfa product that is marketed by Amgen in the Territory under the trademark EPOGEN ®.
"EPOGEN Equivalent Quantity" has the meaning set forth in Section 2.1.1.
"ESAs" shall mean agents that stimulate erythropoiesis.
"FDA" has the meaning set forth in Section 8.3.
"FDA Website" has the meaning set forth in Section 11.18.
"Firm" has the meaning set forth in Section 3.2.
"Forecast Shortfall" has the meaning set forth in Section 2.4.2.
"Forecast Shortfall Amount" has the meaning set forth in Section 2.4.2.
"Force Majeure Event" has the meaning set forth in Section 11.8.
"Governmental Authority" shall mean in respect of any individual or entity, any government administrative agency, commission or other governmental authority, body or instrumentality, or any federal, state, or local governmental regulatory body having legal jurisdiction over that individual or entity.
"Gross Purchases of Amgen ESAs" means, for any period, the aggregate gross amounts paid for purchases of EPOGEN and Aranesp by all Dialysis Center Purchasers during such period for use in providing Dialysis Services, calculated by using [*] in effect on
each date of purchase, net of product returns and adjustments, which aggregate sales data have been independently confirmed by Amgen through the Relevant Information.
"Hearing" has the meaning set forth in Section 9.2.3.
"HIPAA" shall mean the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations, each as may be amended.
"IMS" means IMS Health Incorporated, a Delaware corporation and its Affiliates.
"Indemnified Party" has the meaning set forth in Section 9.6.1.
"Indemnifying Party" has the meaning set forth in Section 9.6.1.
"Individually Identifiable Health Information" shall have the meaning specified in HIPAA.
"Initial [*]" has the meaning set forth in Section 2.1.2.
"[*]" means an [*] for EPOGEN, Aranesp or an Alternative ESA, as applicable, based on its measured biological activity or effect.
"Joint Project" has the meaning set forth in Section 7.1.
"Joint Project Committee" has the meaning set forth in Section 7.1.
"Law" means, individually and collectively, any and all applicable laws, ordinances, rules, regulations, directives, administrative circulars, guidances and other pronouncements having the effect of law of any Governmental Authority.
"Liquidated Damages" has the meaning set forth in Section 10.3.
"Managed Center" shall mean a dialysis facility that is not an Affiliate of Dialysis Center but for which Dialysis Center or an Affiliate of Dialysis Center provides management services or administrative services in which it controls the selection or procurement of ESAs.
"Managed Centers List" has the meaning set forth in Section 2.8.1.
"Material Label Change" means a material amendment, change, revision, and/or modification to the Chronic Kidney Disease section of the Boxed Warning of the US prescribing information for EPOGEN as it relates to dialysis use.
"Minimum Forecast Commitment" has the meaning set forth in Section 2.4.2.
"[*] Rebate" means the [*] rebate described in Section 3.4 of Exhibit A.
"Non-Disclosing Party" has the meaning set forth in Section 11.14.
"Notice of Added Dialysis Center Purchaser" has the meaning set forth in Section 2.8.2.
"Objection Notice" has the meaning set forth in Section 3.2.
"Other Agreement(s)" has the meaning set forth in Section 2.2.
"Other Agreement Early Termination Date" has the meaning set forth in Section 2.2.
"Party" and "Parties" have the meaning set forth in the preamble hereto.
"[*]" has the meaning set forth in Section 5.5.
"Permitted Percentage Variances" has the meaning set forth in Section 2.4.3.
"Permitted Variance Period" has the meaning set forth in Section 2.4.3.
"Policies and Procedures" has the meaning set forth in Section 2.8.6.
"Project Plan" has the meaning set forth in Section 7.1.
"Project Proposal" has the meaning set forth in Section 7.1.
"Purchase Commitment" has the meaning set forth in Section 2.1.
"Qualified Gross Purchases of EPOGEN" shall mean the amount of EPOGEN purchased by Dialysis Center Purchasers during the Term from an Authorized Wholesaler (or from Amgen pursuant to Section 2.7) for use in providing Dialysis Services, and confirmed by Amgen through sales tracking data. Qualified Gross Purchases of EPOGEN shall be calculated using the [*] in effect at the time of the relevant purchase, net of product returns and adjustments.
"Quarter" shall mean each calendar quarter during the Term (i.e., January 1 through March 31, April 1 through June 30, July 1 through September 30, and/or October 1 through December 31, as applicable).
"Recall" has the meaning set forth in Section 11.19.
"Relevant Information" means the Data, all sales tracking data, Self-Reported Purchase Data, Compensation Data and other relevant information, including relevant Third Party reporting agency data.
"Research Study" has the meaning set forth in Section 5.5.
"Rolling Forecast" has the meaning set forth in Section 2.4.1.
"Rolling Forecasts" has the meaning set forth in Section 2.4.1.
"Rules" has the meaning set forth in Section 9.2.1.
"Self-Reported Purchase Data" means all [*] purchased of each ESA and the number of patients who received each such ESA from Dialysis Center Purchasers and such other related data as may be specified on Exhibit SR-1.
"Supply Commitment" has the meaning set forth in Section 2.1.
"Supply Shortfall" has the meaning set forth in Section 2.5.
"Supply Shortfall Notice" has the meaning set forth in Section 2.5.
"Supply Shortfall Quarter" has the meaning set forth in Section 2.5.
"Term" means the period commencing on the Term Start Date and ending on the Term End Date.
"Term End Date" shall mean December 31, 2018.
"Term Start Date" shall mean January 1, 2012.
"Termination Date" means the date upon which this Agreement shall have been terminated in accordance with the terms and conditions of this Agreement pursuant to Section 10.2.
"Territory" means the United States, and its territories and possessions, including Puerto Rico.
"Third Party" means any individual or entity other than a Party or an Affiliate of a Party (or, in the case of Dialysis Center, a Managed Center).
"Third Party Claim(s)" has the meaning set forth in Section 9.5.1.
"[*]" shall mean the [*] for EPOGEN to [*] as established by [*] in its [*] from time to time, not including prompt pay or other discounts, rebates, or reductions in [*].
Purchase and Supply Commitments. Subject to the terms and conditions of this Agreement, (i) the Dialysis Center Committed Purchasers shall purchase from Amgen through one or more Authorized Wholesalers those quantities of EPOGEN that are needed to meet an Amgen ESAs Share of Sales of at least ninety percent (90%) during each Quarter of the Term (the "Purchase Commitment"), and (ii) Amgen shall ensure that during each Quarter of the Term [*] percent ([*]%) of the [*] for each such Quarter is available for purchase by the Dialysis Center Purchasers from one or more Authorized Wholesalers (the "Supply Commitment"). Subject to Section 2.3.2 and Section 2.3.3, Amgen acknowledges and agrees that nothing in this Agreement shall prohibit any Dialysis Center Committed Purchaser from purchasing an amount of EPOGEN necessary to satisfy the Purchase Commitment in a particular Quarter regardless of whether such EPOGEN was actually administered by the Dialysis Center Committed Purchasers to their patients for the provision of Dialysis Services during such Quarter.
Alternative ESA Purchases. If in any Quarter the Dialysis Center Committed Purchasers do not meet the Purchase Commitment (an "Alternative ESA Purchase Event"), then Dialysis Center shall (i) within thirty (30) days of the end of any such applicable Quarter provide notice to Amgen of such Alternative ESA Purchase Event, including the Committed [*] Purchases of Alternative ESAs in such Quarter and (ii) within thirty (30) days of the end of the Quarter immediately following the Quarter in which the Alternative ESA Purchase Event occurred, the Committed [*] Purchases of Alternative ESAs in such subsequent Quarter. If Dialysis Center provides such notice pursuant to this Section 2.1.1, or if Amgen, in its sole discretion, through the use of Relevant Information determines that there has been an Alternative ESA Purchase Event, then Amgen shall have the right to deliver to Dialysis Center a notice that sets forth the "EPOGEN Equivalent Quantity," which shall be that quantity of EPOGEN (in [*]) [*] but for the Alternative ESA Purchase Event (based on the [*] (if the [*] is clearly set forth therein), or otherwise as reasonably determined by Amgen through the Relevant Information as set forth in Section 2.1.2). In the event the Alternative ESA Purchase Event Share of Sales is equal to or greater than ninety percent (90%), then Dialysis Center shall be deemed to have met the Purchase Commitment for the Quarter in which the Alternative ESA Purchase Event occurred. If the Alternative ESA Purchase Event Share of Sales is less than ninety percent (90%) for any reason, including a Force Majeure Event related to Dialysis Center and/or the Dialysis Center Purchasers, and not the result of a Supply Shortfall, then Amgen shall deliver to Dialysis Center a notice, and Dialysis Center shall pay to Amgen within thirty (30) days of its receipt of such notice, an amount (the "Alternative ESA Purchase Amount") indicated by Amgen (as determined by Amgen based on the Relevant Information) in such notice equal to (a) the EPOGEN Equivalent Quantity multiplied by (b) [*] of EPOGEN earned by the Dialysis Center Committed Purchasers during such Quarter. At Amgen's option, any Alternative ESA Purchase Amount may be offset in whole or in part against any Discounts earned by the Dialysis Center Purchasers on Qualified Gross Purchases of EPOGEN in the applicable Quarter or any subsequent Quarter.
If a Party, in its reasonable discretion, feels that the Dialysis Center Committed Purchasers potentially may not meet the Purchase Commitment due to purchases of Alternative ESAs by the Dialysis Center Committed Purchasers in a Quarter, then Amgen shall in consultation with Dialysis Center determine the appropriate methodology to be used to determine the [*] (in [*]) of an Alternative ESA that was
used by the Dialysis Center Committed Purchasers patients' during the applicable measurement period that is equivalent to a [*] (in [*]) of EPOGEN that was used by the Dialysis Center Committed Purchasers patients' during the applicable measurement period (the "[*]") and Dialysis Center shall reasonably cooperate with Amgen and provide any other reasonable data, including [*] of ESAs utilized during the applicable measurement period, necessary to complete the determination. If Dialysis Center has a reasonable objection to the methodology proposed by Amgen, the Parties shall appoint a mutually agreeable Third Party to determine the methodology to be used with the costs of such Third Party to be borne equally by the Parties. The initial [*] for any particular Alternative ESA as determined by either the Parties or the Third Party appointed by the Parties, as applicable, pursuant to this Section 2.1.2 (the "Initial [*]") shall only apply to the Quarter immediately preceding the Initial [*]. The determination of the [*] for each particular Alternative ESA shall be recalculated for each of the first [*] after the Initial [*] for such Alternative ESA and the calculation of the [*] for such Alternative ESA after each Quarter during such [*] period shall only apply to the immediately preceding Quarter after each such recalculation. The [*] for a particular Alternative ESA for all periods after such [*] period shall be the [*] determined as of the end of the [*] Quarter after the Initial [*] for such Alternative ESA (the "Baseline [*]"); provided, either Party may, no more frequently than once per calendar year, request a recalculation of the Baseline [*], which recalculation shall be applied prospectively, if such Party reasonably believes that the Baseline [*] has materially changed over time, in which event the requesting Party shall bear the costs of any Third Party appointed by the Parties in connection therewith.
Purchase Commitment Transition Period for Added Dialysis Center Purchasers. If, after the Term Start Date, there is a new Added Dialysis Center Purchaser pursuant to Section 2.8.2, that is a Dialysis Center Committed Purchaser, Dialysis Center shall use its commercially reasonable efforts to cause such Added Dialysis Center Purchaser to meet the Purchase Commitment as soon as practicable, but such Added Dialysis Center Purchaser shall not be obligated to meet the Purchase Commitment until [*] days after the Added Dialysis Center Purchaser Effective Date. If, as of the Added Dialysis Center Purchaser Effective Date regarding an Added Dialysis Center Purchaser, such Added Dialysis Center Purchaser was a party to a written agreement with a Third Party which includes an obligation on the part of such Added Dialysis Center Purchaser to exclusively purchase an Alternative ESA to meet a majority of its ESA requirements for the provision of Dialysis Services in the Territory (an "Other Agreement(s)") and Dialysis Center can demonstrate via reasonable evidence to Amgen that such Other Agreement was entered into by such Added Dialysis Center Purchaser at least [*] days prior to the Added Dialysis Center Purchaser Transaction Date, then such Added Dialysis Center Purchaser shall not be subject to the Purchase Commitment until [*] days after such time that such Other Agreement(s) can be terminated and/or amended to terminate such obligation with respect to the Alternative ESAs without such Added Dialysis Center Purchaser and/or Dialysis Center and/or any of its Affiliates paying any damages and/or other amounts to such Third Party (the "Other Agreement Early Termination Date"); provided that Dialysis Center shall use its best efforts to terminate such Other Agreement as soon Dialysis Center can do so without such Added Dialysis Center Purchaser and/or Dialysis Center and/or any of its Affiliates paying any damages and/or other amounts to such Third Party. Amgen shall not be obligated to meet the Supply Commitment for any Added Dialysis Center Purchaser until the expiration of the [*] day period after the Added Dialysis Center Purchaser Effective Date or, in the case of an
Added Dialysis Center Purchaser that is a party to an Other Agreement, [*] days after the Other Agreement Early Termination Date.
Purchases from Authorized Wholesaler. Only purchases of EPOGEN made by a Dialysis Center Purchaser from an Authorized Wholesaler shall be eligible to receive the Discounts provided under this Agreement.
Own Use. The Dialysis Center Purchasers shall purchase EPOGEN under this Agreement solely for their own use in providing Dialysis Services, and only purchases made by Dialysis Center Purchasers for such use shall be eligible for the Discounts provided under this Agreement and shall be considered Committed [*] Purchases of Amgen ESAs. Dialysis Center on behalf of itself and each other Dialysis Center Purchaser covenants that none of them shall seek to procure any of the Discounts available under this Agreement for any purchases of EPOGEN not for its or their use in providing Dialysis Services, and Dialysis Center shall promptly notify Amgen in the event Amgen shall have provided any Dialysis Center Purchaser with any Discounts hereunder for any EPOGEN that was not used by them for the provision of Dialysis Services.
Maximum Quarterly Purchase Increases. Notwithstanding any other provision of this Agreement, no Discounts earned by Dialysis Center shall apply to Qualified Gross Purchases of EPOGEN for any Quarter that exceed [*] percent ([*]%) of the Qualified Gross Purchases of EPOGEN in the immediately preceding Quarter unless Amgen, in its sole discretion, determines that such increase is necessary for Dialysis Center to meet its Purchase Commitment for any such Quarter. Such calculation shall be adjusted to remove from the calculation the effect of any change in [*], or increases/decreases in the number of Dialysis Center Purchasers during the relevant comparison periods.
Quantity Forecasts and Minimum Forecast Commitment.
Rolling Forecast. Each Quarter during the Term, Dialysis Center shall submit in writing to Amgen a rolling [*] month forecast setting forth on a month-by-month basis the aggregate quantities in [*] of EPOGEN by Available EPOGEN SKU that Dialysis Center has determined in good faith are required for all Dialysis Center Purchasers for each month in the forecast period, starting with an initial [*] month forecast beginning as of [*] which shall be delivered to Amgen by [*] (each, a "Rolling Forecast" and collectively the "Rolling Forecasts"). With the exception of the initial Rolling Forecast, Dialysis Center shall submit each Rolling Forecast by no later than the [*] of the [*] of each Quarter during the Term (e.g., by [*] Dialysis Center shall submit a Rolling Forecast for the [*] month period from [*] through [*]). The Rolling Forecasts shall not reflect any EPOGEN requirements for periods after the Term End Date. If Dialysis Center has not timely delivered a Rolling Forecast as provided above, the Rolling Forecast previously in effect shall remain in effect for the periods covered thereby. The purpose of this Section 2.4.1 is to allow Amgen adequate time to adjust its manufacturing planning and operations to properly reflect the anticipated mix of Available EPOGEN SKUs.
Minimum Forecast Commitment. Without reducing or limiting the Purchase Commitment set forth in Section 2.1, the forecasted quantities of each Available EPOGEN SKU for months [*] of each Rolling Forecast shall constitute the Dialysis Center Purchasers' aggregate minimum purchase commitment of [*] of EPOGEN by Available EPOGEN SKU (the "Minimum Forecast Commitment"). If
the Dialysis Center Purchasers purchase an aggregate quantity in [*] of EPOGEN by Available EPOGEN SKU during any Quarter that is less than the Minimum Forecast Commitment for any such Quarter (the quantity of any such difference, the "Forecast Shortfall"), then Amgen shall notify Dialysis Center of the Forecast Shortfall in writing. If the Dialysis Center Purchasers purchase a quantity in [*] of EPOGEN by Available EPOGEN SKU during the Quarter in which the Forecast Shortfall occurred and the immediately following Quarter in the aggregate that is less than the aggregate Minimum Forecast Commitments for such two Quarters, Amgen shall notify Dialysis Centers of such failure in writing, and within thirty (30) days of Dialysis Center's receipt of such notice, it shall pay to Amgen an amount equal to [*] percent ([*]%) of (i) the Forecast Shortfall for the applicable Quarter multiplied by (ii) [*] less the Discounts per [*] of EPOGEN for each Available EPOGEN SKU earned by the Dialysis Center Purchasers during such Quarter (the "Forecast Shortfall Amount"). At Amgen's option, any Forecast Shortfall Amount may be offset in whole or in part against any Discounts earned by the Dialysis Center Purchasers on purchases of EPOGEN in the applicable Quarter or any subsequent Quarter.
Forecast Variance. Each Rolling Forecast provided by Dialysis Center may [*] quantities of each Available EPOGEN SKU only for new months [*] and may [*] quantities of each Available EPOGEN SKU in the new months [*] from the corresponding months in the immediately prior Rolling Forecast by the "Permitted Percentage Variances" in the table below. The Permitted Percentage Variances for the months of each Rolling Forecast (the "Permitted Variance Period") are as follows:
Permitted Percentage Variance
*]%
If Dialysis Center submits a Rolling Forecast that contains a forecast for any month therein that is not in compliance with this Section 2.4.3, Amgen shall have the right, in its sole discretion, to either (a) accept such forecast for any month therein that is not in compliance with this Section; or (b) adjust such non-compliant forecasted quantity for any such month to increase or decrease the amount forecasted for such month by up to the minimum amount necessary to bring such forecasted quantity into compliance with this Section 2.4.3. Dialysis Center may, at any time for any good faith reason, request additional variances to the Permitted Percentage Variances and, in such event, the Parties shall work in good faith to accommodate such request; provided, however, that (i) in no event shall Amgen be liable for any resulting Supply Shortfall or Actual Supply Shortfall and (ii) Dialysis Center shall remain liable for any Forecast Shortfall that may occur. If in any Quarter during the Term, the Dialysis Center Purchasers have a Forecast Shortfall and the Parties have determined, after good faith discussions, that such Forecast Shortfall is the necessary result of a Material Label Change, then the Dialysis Center Purchasers shall not be liable for such Forecast Shortfall.
Good Faith Estimates. Each Rolling Forecast submitted by Dialysis Center shall represent good faith estimates of the Dialysis Center Purchasers' actual anticipated purchases of EPOGEN for the treatment of dialysis patients in the
Territory and reasonable inventory requirements for EPOGEN in the Territory during the relevant timeframes.
Available EPOGEN SKUs. The Available EPOGEN SKU Schedule attached as Schedule 3 hereto sets forth the "Available EPOGEN SKUs" as of the Term Start Date. Amgen may add Available EPOGEN SKUs to, or remove Available EPOGEN SKUs (with respect to all purchasers of EPOGEN for free-standing dialysis clinics) from, the Available EPOGEN SKUs Schedule upon at least [*] advance written notice to Dialysis Center; provided that Amgen may not remove any Available EPOGEN SKUs from the Available EPOGEN SKUs Schedule that accounted for [*] percent ([*]%) or more of the Qualified Gross Purchases of EPOGEN during the immediately preceding [*] without the prior written consent of Dialysis Center, which consent may be withheld by Dialysis Center in its sole discretion, unless there is an Available EPOGEN SKU that corresponds to the same dosage, size and potency of the deleted Available EPOGEN SKU; and provided further that, notwithstanding the foregoing, Amgen may immediately remove any Available EPOGEN SKU should Amgen determine, in its sole discretion, that the removal of any such Available EPOGEN SKU is for safety or quality or similar reasons. The Parties shall mutually agree upon (a) the first period for which any such new Available EPOGEN SKU may be ordered by the Dialysis Center Purchasers and (b) any permitted adjustments to the EPOGEN SKU mix contained in Dialysis Center's then applicable Rolling Forecast to reflect any changes in the Available EPOGEN SKUs or as otherwise may be required due to any production shortfall applicable to all EPOGEN customers.
Supply Commitment Shortfalls. Dialysis Center shall promptly notify Amgen in writing (the "Supply Shortfall Notice") if a Dialysis Center Purchaser has not been able to purchase from the Authorized Wholesalers a quantity of EPOGEN in [*] for any Available EPOGEN SKU that meets the Minimum Forecast Commitment for any Quarter for any reason, including as a result of a Force Majeure Event related to Amgen (a "Supply Shortfall Quarter"), setting forth in such notice the quantity of EPOGEN in [*] by Available EPOGEN SKU representing such shortfall, including as a result of a Force Majeure Event related to Amgen (the "Supply Shortfall"). In the event of a Supply Shortfall, Amgen shall not intentionally discriminate against any of the Dialysis Center Purchasers in its allocation of the available quantities of an Available EPOGEN SKU subject to such Supply Shortfall by making its allocation decisions, in whole or in part, on the basis of the prices, Discounts, and/or other financial terms offered to the Dialysis Center Purchasers pursuant to the terms and conditions of this Agreement. In no event shall the inability to obtain a particular Available EPOGEN SKU in a Minimum Forecast Commitment be deemed a Supply Shortfall, if a Dialysis Center Purchaser can purchase (i) the same quantity of EPOGEN in [*] through other Available EPOGEN SKUs or (ii) Aranesp, other than with respect to use by physicians with privileges at a Dialysis Center Purchaser who have obtained approval through Dialysis Center's formulary exception process to use a "short-acting" Alternative ESA instead of Aranesp. If the Authorized Wholesalers are actually unable to supply the Dialysis Center Purchasers with a quantity of (i) EPOGEN or (ii) Aranesp equal to the Supply Shortfall within the time period reasonably required by the Dialysis Center Purchasers as set forth in the Supply Shortfall Notice, which in no event will be less than five (5) business days after Amgen's receipt of the applicable Supply Shortfall Notice, the Purchase Commitment shall be reduced by the quantity of any Supply Shortfall that actually occurs (the "Actual Supply Shortfall").
In the event of an Actual Supply Shortfall, Dialysis Center shall use good faith efforts to procure any Alternative ESAs from a Third Party at the [*]. Dialysis
Center shall deliver to Amgen a statement setting forth the aggregate [*] (i.e., the aggregate [*] less all applicable discounts, rebates, chargebacks and other price adjustments) actually paid by the Dialysis Center Purchasers to any such Third Party for that quantity of Alternative ESAs purchased by such Dialysis Center Purchasers during the Supply Shortfall Quarter solely as a substitute for the Actual Supply Shortfall (the "[*]"); provided that should Dialysis Center be subject to any confidentiality restrictions that Dialysis Center may have with any Third Party from which it procured Alternative ESAs, then the Parties agree to send such [*] to the Firm to be verified. Amgen shall pay to Dialysis Center an amount of cash equal to the difference, if any, between (a) the [*] and (b) the product of (i) (1) [*] in effect for the Supply Shortfall Quarter less (2) the Discounts per [*] of Available EPOGEN SKU earned by the Dialysis Center Purchasers in such Supply Shortfall Quarter multiplied by (ii) the Actual Supply Shortfall. Amgen shall also pay to Dialysis Center any incremental difference in the aggregate [*] of Aranesp purchased by Dialysis Center Purchasers as a result of the Supply Shortfall compared to the aggregate [*] of EPOGEN unless Amgen shall have notified Dialysis Center in advance that Dialysis Center Purchasers may purchase an Alternative ESA as opposed to Aranesp during the Actual Supply Shortfall.
Upon the completion of an Actual Supply Shortfall, the Purchase Commitment, with respect to the quantities of EPOGEN in [*] of the Available EPOGEN SKUs that constitute the Actual Supply Shortfall shall be suspended for a period of [*] days to allow the Dialysis Center Purchasers to transition back from any Alternative ESA's used by the Dialysis Center Purchasers during such Actual Supply Shortfall back to such applicable Available EPOGEN SKU.
Provided that Amgen complies with its obligations under Section 2.5.1, then Amgen will not be in breach of Section 2.1 and the Supply Commitment as a result of the Actual Supply Shortfall.
[*]. The Dialysis Center Purchasers shall purchase EPOGEN from an Authorized Wholesaler at the then-prevailing [*] (subject to any wholesaler markup, discount, services fees or other charges), and any Discounts shall be applied in accordance with the schedules and terms set forth in Exhibit A and this Agreement. Amgen reserves the right to change [*] at any time, by any amount, without notice. Amgen shall promptly notify Dialysis Center of any change to [*].
Authorized Wholesalers. Prior to the Term Start Date, Dialysis Center shall select one or more Authorized Wholesalers from the Authorized Wholesaler list prepared by Amgen and set forth on Exhibit B (as such list may be amended from time to time as provided in this Agreement, the "Authorized Wholesaler List"), and only such selected Authorized Wholesalers shall be Authorized Wholesalers for purposes of this Agreement. From and after the Term Start Date, Dialysis Center shall have the right to change its selection of Authorized Wholesalers from the Authorized Wholesaler List with thirty (30) days prior written notice to Amgen. Dialysis Center may request Amgen to add wholesalers to the Authorized Wholesaler List, and Amgen, at its sole discretion, shall have the right to determine whether to approve of such addition to the Authorized Wholesaler List. Amgen shall have the right to add or remove wholesalers from the Authorized Wholesaler List set forth on Exhibit B in the exercise of its commercially reasonable discretion by thirty (30) days prior written notice to Dialysis Center, provided that for any removal (a) Amgen removes such Authorized Wholesaler with respect to providing EPOGEN to all purchasers of EPOGEN for free standing dialysis clinics, or (b) such Authorized Wholesaler requests Amgen to remove it as an Authorized Wholesaler for
Dialysis Center Purchasers. In the event of any removal of an Authorized Wholesaler from the Authorized Wholesaler List by Amgen, Amgen shall work with Dialysis Center to transition the Dialysis Center Purchasers' purchases of EPOGEN to an alternative Authorized Wholesaler, and if no alternative Authorized Wholesaler exists at such time, the Parties 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 Authorized Wholesaler exists at such time. Any such direct purchasing relationship shall be subject to credit qualification and the approval by Amgen of an application for direct ship account. If the Dialysis Center Purchasers purchase EPOGEN directly from Amgen as contemplated in this Section 2.7, all purchases of EPOGEN made from Amgen by such Dialysis Center Purchasers shall be deemed Qualified Gross Purchases of EPOGEN and eligible for the Discounts.
Dialysis Center Purchasers
Designated Affiliates and Managed Centers. Only the Designated Affiliates listed on Exhibit C (as such list may be amended from time to time as provided in this Agreement, the "Designated Affiliates List") and the Managed Centers set forth on Exhibit D (as such list may be amended from time to time as provided in this Agreement, the "Managed Centers List") shall be Dialysis Center Purchasers for purposes of this Agreement. Dialysis Center shall promptly update and maintain the accuracy of the Designated Affiliates List and the Managed Centers List throughout the Term, but in no event later than thirty (30) days after the addition or removal of a Dialysis Center Purchaser pursuant to Section 2.8.2 or 2.8.3 below. Dialysis Center shall not acquire, divest, restructure, reorganize or reclassify its Affiliates or Managed Centers, or request any addition or removal of any Dialysis Center Purchaser, with the purpose or intent in whole or in part to avoid or eliminate its obligations or commitments, or the obligations and commitments of each of the Dialysis Center Purchasers set forth in this Agreement.
Addition of Dialysis Center Purchasers. After the Term Start Date, subject to Amgen's reasonable consent under this Section 2.8.2, all new Affiliates and Managed Centers in the Territory shall be added to this Agreement and become Dialysis Center Purchasers. Dialysis Center shall provide prior written notice to Amgen of each new Affiliate and Managed Center in the Territory (each a "Notice of Added Dialysis Center Purchaser"), which notice shall include the proposed Added Dialysis Center Purchaser Transaction Date, plus any additional information regarding the proposed Dialysis Center Purchaser that Amgen shall reasonably request. Upon Amgen's reasonable consent and subject to the terms and conditions of Section 2.2 with respect to the Purchase Commitment, the Designated Affiliates List and the Managed Centers List shall be amended to include such Affiliates or Managed Centers effective as of the later of (i) thirty (30) days from the date of Amgen's receipt of a Notice of Added Dialysis Center Purchaser or (ii) the applicable Added Dialysis Center Purchaser Transaction Date (each such effective date, the "Added Dialysis Center Purchaser Effective Date", and each of the Affiliates and Managed Centers added by such amendments, an "Added Dialysis Center Purchaser"). The Designated Affiliates List and the Managed Centers List shall be amended without further action required of the Parties to reflect additions made in accordance with this Section 2.8.2.
Removal of Dialysis Center Purchasers. (A) Dialysis Center may remove Designated Affiliates from the Designated Affiliates List and Managed Centers from the Managed Center List only (i) upon the written consent of Amgen, which consent shall not be unreasonably withheld, conditioned, and/or delayed or (ii) upon thirty (30) days prior written notice to Amgen in the event such removal is a result of a (a) sale of all or substantially all of the assets or equity interests of a Designated Affiliate to a Third Party, whether by reorganization, merger, sales of assets, or sale of equity interests, (b) permanent closure of a Designated Affiliate facility or (c) termination of the relevant management agreement for a Managed Center that has ceased its management relationship with Dialysis Center and/or any Affiliate of Dialysis Center (each of the events described in this clause (ii), an "Authorized Removal Occurrence"). Dialysis Center shall provide Amgen written notice describing the nature of any requested removal, including the anticipated effective date of any Authorized Removal Occurrence, and such removal shall be effective thirty (30) days after Amgen has provided Dialysis Center with written consent to such removal or such earlier period as may be agreed to by Amgen or, in the event of an Authorized Removal Occurrence, the effective date of the Authorized Removal Occurrence.
(B) Amgen shall also have the right to remove any Designated Affiliates from the Designated Affiliates List and any Managed Centers from the Managed Centers List upon thirty (30) days (or such shorter /period as may be required by Law or any Governmental Authority) written notice to Dialysis Center (a) that such removal is required by order of a court or Governmental Authority or (b) in instances in which Amgen determines, in its reasonable discretion, that such removal is required (i) to comply with Law or (ii) as a result of any such Designated Affiliate's or Managed Center's negligence or willful misconduct in the use or administration of EPOGEN.
(C) The Designated Affiliates List and the Managed Centers List shall be amended without further action required of the Parties to reflect removals made in accordance with this Section 2.8.3.
Adjustments to Rolling Forecast. Following the addition or removal of an Affiliate to or from the Designated Affiliates List or a Managed Center to or from the Managed Centers List, the Parties shall mutually agree in good faith to implement any reasonable and necessary adjustments to the Rolling Forecast to account for such addition or removal of an Affiliate to or from the Designated Affiliates List or a Managed Center to or from the Managed Centers List; provided, that Amgen shall have no obligation under Section 2.5 for an Actual Supply Shortfall in the event that any increase to the quantities of each Available EPOGEN SKU set forth in such adjusted Rolling Forecast is in excess of the applicable Permitted Percentage Variances.
Dialysis Center Committed Purchasers List. The Dialysis Center Purchasers as of the Term Start Date shall constitute the initial list of "Dialysis Center Committed Purchasers" as listed on Exhibit E (as such list may be amended from time to time as provided in this Agreement, the "Dialysis Center Committed Purchasers List"). Each Added Dialysis Center Purchaser shall automatically be added to the Dialysis Center Committed Purchasers List as of the Added Dialysis Center Purchaser Effective Date unless Amgen shall have provided notice to the contrary prior to the Added Dialysis Center Purchaser Effective Date. Any Dialysis Center Purchaser removed from the Designated Affiliates List or the Managed Center List in accordance with Section 2.8.3 shall automatically be removed from the Dialysis
Center Committed Purchaser List as of the effective date of such removal from the Designated Affiliates List or the Managed Center List. Amgen shall have the right in its sole discretion to add or remove any Dialysis Center Purchasers from the Dialysis Center Committed Purchasers List upon at least fifteen (15) days' written notice to Dialysis Center, effective as of the first day of the Quarter after the expiration of the fifteen (15) day notice period; provided, that Amgen shall work together with Dialysis Center to agree as to which specific Dialysis Center Purchasers will be added or removed and, in the event, the Parties are unable to agree in a reasonable time, Amgen may in its discretion add or remove specific Dialysis Center Purchasers that are not disproportionate in their use of Alternative ESAs compared to all Dialysis Center Purchasers. For avoidance of doubt, any Dialysis Center Committed Purchaser that is removed from the Dialysis Center Committed Purchasers List but remains on the Designated Affiliates List or the Managed Center List shall still be considered a Dialysis Center Purchaser.
Access to Dialysis Center Facilities. Amgen covenants and agrees that neither it nor any of its employees and/or agents shall have the right to access to any Individually Identifiable Health Information while accessing any of the Dialysis Center Purchasers'. The Parties acknowledge and agree that (a) all of Dialysis Center's applicable policies and procedures regarding visitors and any updates thereto (the "Policies and Procedures") that will be in effect during the Term are and will be available for viewing by Amgen and its employees and/or agents during the Term at http://www.davita.com/about/vendor-policies and (b) Amgen and its employees and/or agents shall have [*] during [*] to the Dialysis Center Purchasers' facilities for the purpose of promoting and providing [*] regarding [*] and shall abide by all the Policies and Procedures during the Term to the extent that such Policies and Procedures have not changed since the Term Start Date, other than as required by any applicable Law and/or generally accepted industry guidance covering vendor access to facilities, in a manner that would limit Amgen's rights under this Section 2.8.6; provided, however, that, notwithstanding anything contained in the Policies and Procedures, Amgen's employees and/or agents shall be permitted to utilize, without any pre-approval or review by Dialysis Center, any Amgen internally approved (i) [*] materials that have been submitted to the FDA, (ii) [*] materials, and (iii) [*] materials, provided, such [*] materials have been previously submitted to Dialysis Center's Vice President of Clinical Management and Vendor Relations for approval and not objected to by Dialysis Center's Vice President of Clinical Management and Vendor Relations within [*] business days of such submission; and provided, further, that Amgen shall provide Dialysis Center's Vice President of Clinical Management and Vendor Relations with copies of all materials to be utilized at the Dialysis Center Purchaser's facilities prior to their first use at any facility of the Dialysis Center Purchasers.
Earning, Calculating, Payment and Vesting of Discounts. All Discounts will be earned, calculated and vested as set forth in Exhibit A. For the purposes of calculating the Discounts hereunder, Qualified Gross Purchases of EPOGEN by any Dialysis Center Purchaser shall be deemed to be made on the date of invoice by an Authorized Wholesaler or Amgen pursuant to Section 2.7 to any such Dialysis Center Purchaser. The Discounts (other than invoice discounts) shall be paid in arrears by electronic funds transfer using information provided to Amgen by Dialysis Center as necessary to enable payment. All Discounts, excluding the Base Rate Rebate and the Base Invoice Discount, shall be conditioned upon material compliance with Section 2.8.6. Amgen Inc.
hereby guarantees Amgen's obligations to pay all Discounts earned by Dialysis Center hereunder.
Verification and Audit. Discounts (including any qualification criteria for any Discounts) specified herein and/or any other amounts paid by one Party to the other Party pursuant to this Agreement are subject to verification and audit of the relevant purchase and other data (including the Data, the Self-Reported Data and the Compensation Data), as reasonably necessary to calculate any amounts payable hereunder. Dialysis Center Purchasers shall maintain their books and records in accordance with U.S. generally accepted accounting principles, consistently applied. To the extent either Amgen or Dialysis Center, in its reasonable discretion, determines that it is necessary to verify and confirm the calculation of: (a) any Discount described in this Agreement in order to audit and assure compliance with the terms of this Agreement and/or (b) any other amount that one Party must pay to the other Party under this Agreement, the requesting Party shall provide written notice of same to the other Party (an "Objection Notice") setting forth in detail any and all items of disagreement related to such computation, statement, and/or amount that must be paid by one Party to the other Party. Amgen and Dialysis Center shall jointly engage (at the requesting Party's sole cost and expense, subject to any reimbursement by the other Party as set forth below) and refer the items in dispute to a nationally recognized firm of independent, certified public accountants as to which Amgen and Dialysis Center mutually agree (the "Firm"), to resolve any disagreements. Amgen and Dialysis Center will direct the Firm to render a written determination within twenty (20) days of its retention, and Amgen and Dialysis Center and their respective employees and/or agents will cooperate with the Firm during its engagement. The Firm shall keep strictly confidential all data reviewed and information learned or obtained in connection with resolving any Objection Notice and shall report to the requesting Party only the conclusion of its review without the disclosure of any Confidential Information. All reports of the Firm shall be made available to both Parties simultaneously, promptly upon completion, and shall be deemed to conclusively and definitively resolve the related Objection Notice, which shall be reimbursed (if applicable) in accordance with this Section 3.2. Any such audit shall be conducted during normal business hours, and so as not to unreasonably interfere with the business of Amgen and/or any of the Dialysis Center Purchasers. In the event any such audit is requested by Amgen and shows that Dialysis Center Purchasers have submitted incorrect information resulting in Dialysis Center receiving in excess of [*] percent ([*]%) of the amount to which it was entitled in any Quarter, Dialysis Center shall reimburse Amgen for the reasonable costs of such audit; otherwise, Amgen shall be responsible for the costs of such audit. In the event any such audit is requested by Dialysis Center and shows that Dialysis Center Purchasers have submitted correct information but have been underpaid by more than [*] percent ([*]%) of the amount to which they were entitled in any Quarter, Amgen shall reimburse Dialysis Center for the reasonable costs of such audit; otherwise, Dialysis Center shall be responsible for the costs of such audit. The determination of the Firm will be conclusive and binding upon Amgen and Dialysis Center. Following any audit that shows any over or underpayment hereunder, the relevant Party shall, within sixty (60) days, make payment to the other Party for the difference between the amount paid hereunder and the amount actually payable hereunder based upon the results of such audit.
Adjustments for Changes. In accordance with Section 2.8.2 and/or 2.8.3 above, in the event of an Affiliate's addition to or deletion from the Designated Affiliates List or a Managed Center's addition to or deletion from the Managed Centers List during any Quarter of the Term, Amgen shall adjust Qualified Gross Purchases of EPOGEN to account for such Affiliate's addition to or deletion from the Designated Affiliates List or a
Managed Center's addition to or deletion from the Managed Centers List by adding or deleting such Designated Affiliates' or Managed Centers', as applicable, purchases to or from the relevant Quarter or comparison Quarter (or portion thereof).
Treatment of Discounts and Rebates.
Dialysis Center agrees that Dialysis Center Purchasers shall properly disclose and account for all Discounts earned hereunder, in whatever form, in compliance with all applicable federal, state, and local Laws, including §1128B(b) of the Social Security Act, as amended and its implementing regulations. Dialysis Center agrees that, if required by such statutes or regulations, it (together with its Designated Affiliates) shall and it shall cause its Managed Centers to (i) claim the benefit of such Discount received in the fiscal year in which such Discount was earned or the year after, (ii) fully and accurately report the value of such Discount in any cost reports filed under Title XVIII or Title XIX of the Social Security Act, as amended or a state or local health care program, and (iii) provide, upon request by the U.S. Department of Health and Human Services or a state or local agency or any other federally funded state health care program, the information furnished to Dialysis Center Purchasers by Amgen concerning the amount or value of such Discount.
In order to assist Dialysis Center's compliance with its obligations as set forth in Section 3.4.1 above, Amgen agrees that it will fully and accurately report all Discounts on the invoices or statements submitted to Dialysis Center and use reasonable efforts to inform Dialysis Center of its obligations to report all such Discounts to the extent specified by 42 C.F.R § 1001.952(h)(2)(ii)(A) or where the value of a Discount is not known at the time of sale, Amgen shall fully and accurately report the existence of the Discount program on the invoices or statements submitted to Dialysis Center and use reasonable efforts to inform Dialysis Center of its obligations to report all such Discounts to the extent specified by 42 C.F.R § 1001.952(h)(2)(ii)(B), and when the value of the Discounts become known, provide Dialysis Center with documentation of the calculation of the Discount identifying the specific goods or services purchased to which the Discount will be applied, in accordance with Section 3.5 below.
Reports. Within ninety (90) days of the end of each Quarter, Amgen shall provide to Dialysis Center a statement of the Discounts earned hereunder with the itemization of EPOGEN purchases made in a particular Quarter, broken down for each Dialysis Center Purchaser and any other information that Dialysis Center may reasonably request that is reasonably available to Amgen and necessary for Dialysis Center to obtain in order to comply with its obligations hereunder. Dialysis Center agrees that it will provide such information to its Dialysis Center Purchasers in a timely manner in order to allow such Dialysis Center Purchasers to meet their reporting and other obligations hereunder and under applicable Law.
Best Price Limitation. At any time following the repeal, enactment or modification of any Law, policy, program memorandum, or the interpretation thereof, including a decision by the Centers for Medicare & Medicaid Services, that affects the definition of "Best Price" (which, for purposes of this Agreement, shall mean the price reported in Amgen's Best Price Submission under Title XIX of the Social Security Act) or the methodology by which Best Price must be calculated, Amgen shall have the right, in its sole discretion, to determine the extent to which any [*] to any Third Party due to such repeal, enactment, modification or decision may impact Amgen's Best Price calculation under this Agreement alone or in combination with any other [*] in other agreements with Dialysis Center or any Third Party. In the event that Amgen determines reasonably and in good
faith that the then-existing [*] under this Agreement establishes or would establish a new "Best Price," Amgen shall have the right, in its sole discretion, upon the later of (a) the effective date of such repeal, enactment, modification or decision, or (b) notice to Dialysis Center, to [*] the Discounts offered under this Agreement [*], and shall promptly notify Dialysis Center of the [*]; provided that the [*] as adjusted by Amgen shall result in [*] available to Dialysis Center which would [*] the Best Price prior to the effective date of such repeal, enactment, modification or decision, calculated using the modified definition or methodology by which Best Price is to be calculated.
Business Representatives. The "Business Representatives" shall be comprised of: (i) in the case of Amgen, Amgen's General Manager of the Nephrology Business Unit (the "Amgen Business Representative"); and (ii) in the case of Dialysis Center, the Chief Operating Officer of DaVita Inc. (the "Dialysis Center Business Representative"). Each Business Representative shall be entitled to appoint designees who have been identified to the other Business Representative in writing and have equivalent authority to the Party's Business Representative or have been expressly given all requisite authority by the Party's Business Representative.
Responsibilities of Business Representatives. The Business Representatives shall be responsible for overseeing the Parties' activities and conduct under this Agreement generally, and for ensuring an appropriate level of oversight. The Business Representatives shall meet in person, via teleconference or videoconference at such times as may be deemed necessary by the Parties).
PATIENT AND PRODUCT DATA
Data Submission. Dialysis Center shall deliver all Data to Amgen (or to a data collection vendor specified by Amgen) in the format and manner provided in Exhibit A and subject to the provisions of this Section 5. To the extent Amgen requests that Dialysis Center deliver Data to a data collection vendor, Amgen agrees to cause any such data collection vendor to adhere to and be bound by a substantially similar confidentiality obligation as is applicable to Amgen under this Agreement, and Amgen shall be liable for any failure by any such data collection vendor to act in accordance with such requirements.
HIPAA Compliance. Neither Party has the intent that Dialysis Center will provide Amgen (or any specified data collection vendor) any Data in violation of HIPAA. Accordingly, the Parties shall engage an appropriately qualified statistician, reasonably acceptable to each Party, who meets the requirements set forth in 45 C.F.R. § 164.514(b)(1) to review the Data and deliver a written certification that shall conclude that, subject to any conditions, requirements or assumptions set forth therein, each delivery of Data pursuant to this Agreement will meet the standards for "de-identification" under HIPAA (the "Certification"). In connection with the Certification, the Parties agree to use their commercially reasonable best efforts to facilitate the completion and delivery of such Certification to each Party in an expedited manner, and Amgen shall bear the pre-approved costs of such Certification. Notwithstanding anything in this Agreement to the contrary, in order to assure compliance, as determined by either Party in its reasonable discretion, with any existing Law relating to patient privacy of medical records, or at any time following the enactment of any Law 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 Discounts contemplated under this Agreement, either Party may, upon thirty (30) days' prior written notice, seek to amend this Agreement with respect to the affected Discount. Dialysis Center and
Amgen shall meet and in good faith mutually agree to modify this Agreement to accommodate any such change in the Law, with the intent to, if possible, retain the essential terms of this Section 5 and the affected Discount and pricing structure of this Agreement.
Case Identifier. Dialysis Center 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.
Data Use. Amgen and its Affiliates shall have the right to use Data (a) to support verification of the services under this Agreement, (b) for its [*] and [*], development of [*], running [*] analyses, overall analyses of how to improve treatment of patients on dialysis and creating tools by its marketing personnel, (c) in the aggregate for publications as part of a larger data set incorporating comparable clinical data received from other dialysis providers in the Territory and provided that no portion of such data shall be attributed to Dialysis Center or its Affiliates, and (d) for purposes of verifying the Dialysis Center Purchasers' performance under this Agreement and the calculation of amounts payable hereunder, including verifying the Dialysis Center Purchasers' Purchase Commitment performance under this Agreement and calculating or determining the Dialysis Center Purchasers' eligibility to receive any Discount. Notwithstanding the foregoing, without Dialysis Center's prior written consent (such consent not to be unreasonably conditioned, withheld or delayed): Amgen and its Affiliates shall not (i) disclose to Third Parties the Data provided by Dialysis Center hereunder except (1) in any publication referenced in clause (c) above, (2) pursuant to public health activities, (3) to agents of Amgen bound by obligations of confidentiality no less restrictive than those contained in Section 11.14 or (4) to other Third Parties as required by Law or regulation as determined in Amgen's discretion; and (ii) sell or resell any such data or derivative works thereof to any Third Party.
Clinical Research Studies. Dialysis Center and Amgen acknowledge that Dialysis Center, either directly or through DaVita Clinical Research, Inc., an Affiliate of Dialysis Center, may from time to time be engaged in research studies in which patients of the Dialysis Center Purchasers, may serve as clinical trial subjects (a "Research Study"). Notwithstanding any obligation of Dialysis Center in this Agreement to the contrary, including any requirement in Section 3.5 of Exhibit A, Dialysis Center shall not be required to submit Data for any patients of the Dialysis Center Purchasers that are participating in a Research Study (a "[*]"), but shall continue without limitation to be eligible for, and if earned receive, all Discounts granted pursuant to this Agreement, so long as (i) Dialysis Center notifies Amgen of the [*] whose Data will not be delivered by Dialysis Center to Amgen as otherwise required by this Agreement as a result of such patient being a [*], and (ii) the aggregate number of [*] whose Data is excluded by Dialysis Center does not exceed the [*]. For purposes of the foregoing, "[*]" means [*] percent ([*]%) of the aggregate number of persons receiving treatment from the Dialysis Center Purchasers in any calendar month.
Compensation Data. Dialysis Center agrees that it shall provide the data, with respect to EPOGEN, set forth on Schedule 2 attached hereto (the "Compensation Data") to Amgen in the electronic format set forth on Schedule 2 on a calendar [*] basis no later than the fourteenth (14th) day of the following calendar [*] following the [*] for which such Compensation Data is being provided. Amgen acknowledges, agrees and covenants
that it shall only use the Compensation Data for sales force targeting and compensation. Dialysis Center and Amgen acknowledge and agree that the Compensation Data does not include and shall never include any Individually Identifiable Health Information of any patient of Dialysis Center Purchasers. Notwithstanding the foregoing, Amgen acknowledges and agrees that Dialysis Center shall only be required to deliver the Compensation Data to Amgen for as long as [*]. Amgen shall indemnify, defend and hold harmless Dialysis Center from and against any and all loss, damage and/or expense (including reasonable attorney's fees) that it may suffer as a result of claims, demands, actions, proceedings, liabilities, costs or judgments, or threats thereof arising out Dialysis Center's supply of the Compensation Data to Amgen.
Self-Reported Purchase Data. Dialysis Center, on behalf of the Dialysis Center Purchasers, acknowledges, covenants and agrees that it shall submit full and complete Self-Reported Purchase Data for each Quarter to Amgen within forty-five (45) days of the end of each such Quarter through a Purchase Data Submission Form attached here to as Exhibit SR-1. Exhibit SR-1 is subject to modification by mutual written agreement of the Parties. Dialysis Center on behalf of the Dialysis Center Purchasers shall submit Exhibit SR-1 in an Excel file format electronically by e-mail to [*] or in such other manner as may be specified by Amgen through written notification to Dialysis Center.
Joint Projects. The Parties shall form a "Joint Project Committee" comprised of three (3) executives from each Party, one (1) of whom shall be a clinical executive, and shall be led by two (2) co-chairs, one (1) appointed by each of the Parties. During the Term, either Party may present to the Joint Project Committee one or more written proposals (a "Project Proposal") for a project or projects to be undertaken jointly by the Parties related to the provision of Dialysis Services (a "Joint Project"), together with a draft project plan for the Joint Project (a "Project Plan") which the Parties shall discuss in good faith. If the Parties agree in writing to undertake a Joint Project, the Parties shall jointly pursue such Joint Project in accordance with the Project Plan without any further approval action required by the Parties.
Joint Project Committee.
Joint Project Committee Responsibilities. The Joint Project Committee shall be responsible for the following:
Reviewing and approving each new Project Proposal prior to adoption of any Joint Projects set forth in such new Project Proposal;
Reviewing and approving changes to the Project Plans for existing Joint Projects prior to adoption of such changes;
Providing for communication and discussion between the Parties to, as appropriate, coordinate and optimize the development activities of the Parties under each Joint Project;
Reviewing and monitoring the activities and progress of the Parties against the Joint Projects;
Communicating with the Business Representatives regarding all of the foregoing; and
Such other matters as are appropriate to make operational the terms of this Agreement in respect of Joint Projects and as the Parties shall agree in writing.
Meetings. The Joint Project Committee shall meet in person, via teleconference or videoconference or otherwise, as frequently as deemed necessary by the Joint Project Committee. All Joint Project Committee meetings shall have at least one (1) member appointed by each Party in attendance.
Decision Making. The Joint Project Committee shall make decisions by a unanimous vote. The Parties shall use good faith, reasonable efforts to come to a complete agreement. In the event the Joint Project Committee fails to reach unanimity with respect to any matter, such matter shall be escalated to the Business Representatives.
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 and shall 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.
Compliance with Law and Regulation. Amgen and Amgen Inc. shall, and Dialysis Center shall, comply with all applicable Laws related to the performance of their respective obligations under this Agreement. Each Party represents and warrants that (which representations and warranties shall be ongoing representations and warranties during the Term): (i) it is not currently named on any of the following lists: (A) HHS/OIG List of Excluded Individuals/Entities, (B) GSA List of Parties Excluded from Federal Programs, or (C) OFAC "SDN and Blocked Individuals" and (ii) it shall promptly notify the other Party in the event it becomes named on any of the following lists: (x) HHS/OIG List of Excluded Individuals/Entities, (y) GSA List of Parties Excluded from Federal Programs, or (z) OFAC "SDN and Blocked Individuals".
Product. Amgen covenants and agrees that EPOGEN is not and will not be adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic Act, as amended, or within the meaning of any applicable Law, or is or will be a product which may not be introduced in to interstate commerce. Amgen warrants that EPOGEN purchased pursuant to this Agreement (a) is manufactured, and up to the time of its receipt by Authorized Wholesalers is handled, stored, and transported in accordance with all applicable Laws, and meet all specifications for effectiveness and reliability as required by the United States Food and Drug Administration (the "FDA"), and (b) when used in accordance with the directions in its labeling is fit for the purposes and indications described in its labeling. Amgen warrants that the use of EPOGEN by Dialysis Center Purchasers shall not infringe upon any ownership rights of any other individual or entity or upon any patent, copyright, trademark or other intellectual property or proprietary right or trade secret of any individual or entity. Amgen agrees that as soon as practicable it will notify Dialysis Center of any material defect in EPOGEN delivered to any Dialysis Center Purchasers in accordance with applicable Law.
Data. Dialysis Center represents and warrants to Amgen that: (a) the Data, the Compensation Data, and the Self-Reported Purchase Data that the Dialysis Center Purchasers deliver to Amgen pursuant to Section 5 and Section 6 shall be: (i) prepared and delivered in accordance with the provisions of Section 5, Section 6 and Exhibit A and (ii) as complete and accurate as is reasonably obtainable in view of the Dialysis Center Purchasers' customary method of compilation and the nature and accuracy of the Dialysis Center Purchasers' resources; (b) the Dialysis Center Purchasers shall not knowingly and intentionally misrepresent any of the Data, the Compensation Data,
and/or the Self-Reported Purchase Data provided by the Dialysis Center Purchasers to Amgen; and (c) Dialysis Center shall promptly notify Amgen in the event it has actual knowledge that any of the Data, the Compensation Data, and/or the Self-Reported Purchase Data is not complete and/or accurate.
Designated Affiliates List and Managed Centers List. Dialysis Center represents and warrants that the Designated Affiliates List and the Managed Centers List, as each of them is attached to this Agreement as of the Term Start Date (and as of any subsequent date that such lists are updated in accordance with the terms hereof) are complete and accurate lists of all Affiliates of Dialysis Center and Managed Centers of Dialysis Center providing Dialysis Services in the Territory as of the Term Start Date (and as of each such subsequent date).
Adverse Claims. Each Party represents and warrants to the other Party that, as of the execution of this Agreement, such Party has no actual knowledge of any legal claim or right to be asserted against the other Party or its Affiliates related to the negotiation or execution of this Agreement.
NO OTHER WARRANTIES. OTHER THAN THE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES, AND EACH PARTY EXPRESSLY DISCLAIMS, ALL OTHER WARRANTIES, STATUTORY, EXPRESS, AND/OR IMPLIED, INCLUDING THOSE OF MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE. EACH PARTY HEREBY EXPRESSLY WAIVES ANY AND ALL OTHER WARRANTIES, STATUTORY, EXPRESS, AND/OR IMPLIED, INCLUDING THOSE OF MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE.
DISPUTE RESOLUTION, INSURANCE and INDEMNITY
Escalation of Disputes to Business Representatives. The Parties recognize that claims, disputes or controversies arising out of or relating to this Agreement ("Disputes") may occur from time to time. It is the objective of the Parties to establish procedures to facilitate the resolution of Disputes arising under this Agreement in an expedient manner by mutual cooperation and, if possible, without resort to litigation.
In the event of any Dispute, and prior to either Party (a) commencing any action in a court of law or under any Governmental Authority, or (b) taking any action to terminate this Agreement as provided in Section 10, the Parties shall first undertake that the employees of each Party with relevant expertise and authority with respect to a Dispute shall meet to discuss such Dispute within five (5) business days of a Party receiving notice of a Dispute (except in the case where delay in resolving any such Dispute would be materially prejudicial to a Party, in which case the Dispute will be referred directly to the Business Representatives). In the event the Parties are unable to resolve any such Dispute within thirty (30) business days of the initial meeting between the Parties, it shall be referred to the Business Representatives, who shall negotiate with one another in good faith to reach a good faith resolution of the Dispute; provided, that the Parties shall use commercially reasonable best efforts to expedite the resolution of any Disputes which by their nature need to be made quickly by the Business Representatives. In the event the Dispute cannot be resolved by the Business Representatives within fifteen (15) business days of the initial meeting between the Business Representatives or such other period of time as is mutually agreed to by the Parties, then, upon the written demand of either Party, the Dispute shall be subject to arbitration, as provided in Section 9.2. Pending resolution of any Dispute, both Parties will continue their performance under this Agreement of all obligations that are not the subject of any such Dispute. If there is a Dispute relating to any amount owed by either Party to the other Party, the undisputed
portion of such amount shall be paid to the other Party in accordance with the terms hereof, and the Parties shall first attempt to resolve the disputed balance in accordance with this Section 9.1.
Claims. Subject to Section 9.3 below, any Dispute that is not resolved under Section 9.1 within thirty (30) days after a Party's initial written request for resolution, shall be resolved by final and binding arbitration administered by JAMS (the "Administrator") in accordance with its Comprehensive Arbitration Rules and Procedures (the "Rules"), except to the extent any such Rule conflicts with the express provisions of this Section 9.2. (capitalized terms in this Section 9.2 used but not otherwise defined in this Agreement shall have the meanings provided in the Rules.) For Disputes valued at less than Five Million Dollars ($5,000,000), the Arbitration shall be conducted by one (1) neutral arbitrator ("Arbitrator") selected in accordance with the Rules, provided that such Arbitrator shall not be a current or former employee or director, or a current stockholder, of either Party or any of their respective Affiliates. For Disputes valued at or more than Five Million Dollars ($5,000,000), the Arbitration shall be conducted by a panel of three (3) neutral Arbitrators selected in accordance with the Rules, provided that any such Arbitrator shall not be a current or former employee or director, or a current stockholder, of either Party or any of their respective Affiliates. The Arbitration shall be held in Los Angeles, California.
Discovery. Within forty-five (45) days after selection of the Arbitrator(s), the Arbitrator(s) shall conduct the Preliminary Conference. In addressing any of the subjects within the scope of the Preliminary Conference, the Arbitrator(s) shall take into account both the needs of the Parties for an understanding of any legitimate issue raised in the Arbitration and the desirability of making discovery efficient and cost-effective. In that regard, the Parties agree to the application of the E-Discovery procedures set forth in Rule 16.2(c) of JAMS' Expedited Procedures; provided that the Parties agree that the time limitations identified in Rule 16.2 of JAMS' Expedited Procedures shall not be binding and the Arbitrator(s) shall set time limitations for discovery and depositions that are reasonable and necessary in light of the issues and matters raised in the Preliminary Conference. In no event shall the time limitations set by the Arbitrator(s) for discovery and depositions be shorter than the time periods for discovery and depositions that are set forth in Rule 16.2 of JAMS' Expedited Procedures.
Hearing; Decision. The hearing ("Hearing") shall commence within a reasonable time after the discovery cutoff. The Arbitrator(s) shall require that each Party submit concise written statements of position and shall permit the submission of rebuttal statements, subject to reasonable limitations on the length of such statements to be established by the Arbitrator(s). The Arbitrator(s) shall also permit the submission of expert reports. The Arbitrator(s) shall render the award ("Award") within thirty (30) days after the Arbitrator(s) declares the Hearing closed, and the Award shall include a written statement describing the essential findings and conclusions on which the Award is based, including the calculation of any damages awarded. The Arbitrator(s) will, in rendering his, her or their decision, apply the substantive law of the State of California, without giving effect to its principles of conflicts of law, and without giving effect to any rules or laws relating to arbitration. The Award rendered by the Arbitrator(s) shall be final, binding and non-appealable, and judgment may be entered upon it in any court of competent jurisdiction. However, the Parties agree that the JAMS Optional Arbitration Appeal Procedures
("Appeal Procedures") shall apply to the Arbitration, at the request by either Party in accordance with such Appeal Procedures. If a Party appeals the Award rendered by the Arbitrator(s), the Award issued by the Appeal Panel (as defined in such Appeal Procedures) shall be final, binding and non-appealable, and judgment may be entered upon it in any court of competent jurisdiction.
Costs. Each Party shall bear its own attorney's fees, costs, and disbursements arising out of the Arbitration, and shall pay an equal share of the fees and costs of the Arbitrator(s); provided, however, the Arbitrator(s) shall be authorized to determine whether a Party is the prevailing party, and if so, to award to that prevailing party reimbursement for any or all of its reasonable attorneys' fees, costs and disbursements (including, for example, expert witness fees and expenses, photocopy charges, travel expenses, etc.), and/or the fees and costs of the Administrator and the Arbitrator(s).
Confidentiality. Each Party acknowledges and agrees that: (a) any discovery pursuant to this Section 9.2, (b) the Hearing, (c) any and all documents exchanged or delivered in connection with the Hearing, settlement negotiations, and/or settlement terms, including the statements of position, rebuttal statements, and expert reports, (d) settlement negotiations and/or settlement terms, and (e) the Award shall be treated as Confidential Information and subject to the terms and conditions of Section 11.14.
Court Actions. Nothing contained in this Agreement shall deny either Party the right to seek injunctive or other equitable relief from a court of competent jurisdiction in the context of a bona fide emergency or prospective irreparable harm, and such an action may be filed and maintained notwithstanding any ongoing discussions between the Parties or any ongoing arbitration proceeding.
Insurance. Each Party shall secure and maintain in full force and effect throughout the Term (and following termination, to the extent necessary to cover any claims arising from this Agreement) commercial general liability insurance and product liability (in the case of Amgen only) which include contractual liability with limits of no less than [*] dollars ($[*] USD); professional liability insurance (in the case of Dialysis Center only) with limits of no less than [*] dollars ($[*] USD), and workers' compensation with statutory limits. Any limits on each of a Party's insurance coverage shall not be construed to create any limit on such Party's liability with respect to its obligations under this Agreement or otherwise. Each of the Parties shall have the right to satisfy its obligations under this Section 9.4 through self-insurance. Amgen Inc. hereby guarantees the performance of Amgen's obligations as set forth in this Section 9.4.
By Amgen. Amgen agrees to indemnify, defend, and hold Dialysis Center, its officers, directors, agents and employees (collectively, the "Dialysis Center Indemnitees") harmless from and against any and all loss, damage and/or expense (including reasonable attorney's fees) that they may suffer as a result of Third Party claims, demands, actions, proceedings, liabilities, costs or judgments, or threats thereof ("Third Party Claim(s)") arising out of (i) any defect in the design and/or manufacture of EPOGEN or the storage and/or transportation of EPOGEN in Amgen's possession, including claims for property damage, loss of life, and/or bodily injury; and/or (ii) the breach by Amgen or Amgen Inc. of any of their respective warranties, representations, and/or covenants contained in this Agreement. Notwithstanding anything to the contrary contained herein, Amgen and Amgen Inc. shall not have any obligation to defend, indemnify, and/or hold the
Dialysis Center Indemnitees harmless from any Third Party Claims arising out of the negligent acts and/or omissions and/or willful misconduct of the Dialysis Center Indemnitees. This indemnification shall survive the termination or expiration of this Agreement. Amgen Inc. hereby guarantees the performance of Amgen's obligations as set forth in this Section 9.5.1.
By Dialysis Center. Dialysis Center agrees to indemnify, defend, and hold Amgen, its officers, directors, agents and employees (collectively, the "Amgen Indemnitees") harmless from and against any and all Third Party Claims arising out of (i) any Dialysis Center Purchasers' administration, promotion or use of EPOGEN purchased under this Agreement to its patients; (ii) any Dialysis Center Purchasers' failure to store and/or transport any EPOGEN in its possession in accordance with any applicable Law and/or labeling information; and/or (iii) the breach by Dialysis Center of any of its warranties, representations, and/or covenants contained in this Agreement. For purposes of the foregoing, the "administration" of EPOGEN by Dialysis Center shall mean the dispensing and handling by Dialysis Center and its employees of EPOGEN and the actual administration of EPOGEN to patients by Dialysis Center and its employees, but shall exclude physician prescriptions of EPOGEN to patients. Notwithstanding anything to the contrary contained herein, Dialysis Center shall not have any obligation to defend, indemnify, and/or hold the Amgen Indemnitees harmless from any Third Party Claims arising out of the negligent acts and/or omissions and/or willful misconduct of the Amgen Indemnitees. This indemnification shall survive the termination or expiration of this Agreement.
Procedure for Third Party Claims.
Notice. The Party receiving indemnification hereunder (the "Indemnified Party") shall give the Party providing indemnification hereunder (the "Indemnifying Party") written notice within fifteen (15) business days after the Indemnified Party receives notice of any Third Party Claim, subject to indemnification hereunder upon which such Indemnified Party intends to base a request for indemnification under Section 9.5.1 or Section 9.5.2. Failure to give any such notice shall not constitute a waiver of any right to indemnification or reduce in any way the indemnification available hereunder, except and only to the extent that as a result of such failure the Indemnifying Party demonstrates that it was directly and materially damaged as a result of such failure to give timely notice.
Control of Defense. The Indemnifying Party, at its expense, shall assume control of the defense and resolution of each Third Party Claim using legal counsel reasonably approved by the Indemnified Party and shall keep the Indemnified Party fully and timely informed of the progress of such defense and resolution. With respect to each Third Party Claim, the Indemnified Party shall have the right to retain independent legal counsel at its cost and monitor such Third Party Claim's defense and resolution. In such a case, the Indemnifying Party and its legal counsel shall fully cooperate with the Indemnified Party and its legal counsel in providing such information as the Indemnified Party may reasonably request. Notwithstanding this Section 9.6.2, the Indemnifying Party shall not be entitled to control, but may participate in, and the Indemnified Party shall be entitled to have sole control over and select counsel to conduct, the defense or settlement of each Third Party Claim that: (i) seeks a temporary restraining order, a preliminary or permanent injunction, and/or specific performance against the Indemnified Party, (ii) involves criminal allegations against the Indemnified Party, (iii) if unsuccessful, would set a precedent that would materially interfere with
and/or have a material adverse effect on the business and/or financial condition of the Indemnified Party, and/or (iv) imposes liability on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder. In such an event, the Indemnifying Party will still have all of its obligations hereunder with respect to any such affected Third Party Claims; provided that the Indemnified Party will not settle any such affected Third Party Claims without the prior written consent of the Indemnifying Party, which consent will not be unreasonably withheld, conditioned, and/or delayed by the Indemnifying Party.
Representation. If both the Indemnifying Party and the Indemnified Party are named parties in any Third Party Claim and representation of both Parties by the same legal counsel would be inappropriate due to the actual or potential differing interests between them, then the Indemnified Party, at the Indemnifying Party's expense, shall have the right to be represented by separate counsel of the Indemnified Party's choosing.
Resolution. The Indemnifying Party shall not settle, compromise or resolve any Third Party Claim without the written consent of the Indemnified Party; provided that, the Indemnifying Party may, without such consent, enter into any such judgment, settlement, compromise or resolution that relates solely to the payment of money damages, involves a full release of the Indemnified Party and does not result in any admission of any fault of the Indemnified Party with respect to such Third Party Claim.
Payment. Any final judgment entered or settlement agreed upon in the manner provided in this Section 9.6, as applicable, shall be binding upon the Indemnifying Party and shall conclusively be deemed to be an obligation with respect to which the Indemnified Party is entitled to prompt indemnification hereunder, if applicable. Payment of all amounts owing by the Indemnifying Party under this Section 9.6, as applicable, shall be made promptly upon a final settlement between the Indemnifying Party and the Indemnified Party or upon a final adjudication determined by the Arbitrator(s) that an indemnification obligation is owed by the Indemnifying Party to the Indemnified Party.
Term. This Agreement shall come into effect as of the Term Start Date and shall expire on the earlier of the Term End Date, or the Termination Date.
Termination for Cause. Amgen or Dialysis Center may terminate this Agreement only in the event of the following:
Breach of Purchase Commitment. The Parties acknowledge and agree that the Purchase Commitment is the principal value expected to be received by Amgen under this Agreement and it is the essential inducement for Amgen to enter into this Agreement, pursuant to which it has agreed, among other things, (a) to provide the Dialysis Center Purchasers for the duration of the Term the economic benefits of the Discounts provided for herein, (b) to make the Supply Commitment, which requires that Amgen commit facilities to the manufacture of EPOGEN at the expense of other Amgen uses and allocate significant resources to maintain its manufacturing capabilities and capacity at a commensurate level, (c) to assume the business risks and financial liability in respect of the representations, warranties and covenants made by it hereunder and (d) to forego potential other commercial opportunities in respect of its nephrology business. In the event that the Dialysis
Center Committed Purchasers do not meet an Amgen ESAs Share of Sales of (i) at least [*] percent ([*]%) for [*] or more [*] during the Term with respect to which the Dialysis Center is required to pay the Alternative ESA Purchase Amount with respect to each of such [*] in any [*] period during the Term, or (ii) at least [*] percent ([*]%) in any [*], then Amgen shall be entitled to terminate this Agreement immediately upon written notice to Dialysis Center and, notwithstanding any other provision of this Agreement, thereupon either receive the "Liquidated Damages" defined below or exercise such other rights and remedies as may be allowed at law or in equity under applicable Law.
Termination for Failure to Supply. Dialysis Center may terminate this Agreement immediately upon written notice to Amgen in the event that Amgen has not been able to supply to Dialysis Center through one or more Authorized Wholesalers EPOGEN in [*] (or Aranesp subject to the terms of Section 2.5) equal to at least [*] percent ([*]%) of the Minimum Forecast Commitment (other than as a result of one or more Force Majeure Events) for [*].
Termination for Exclusion from Federal Health Care Program. Either Amgen or Dialysis Center may immediately terminate this Agreement upon written notice to the other Party in the event there is change in the other Party's status which excludes it from participation in any "Federal health care program" (as defined under 42 U.S.C. § 1320a-7b(f)) (a "Debarred Party"), provided that no Party shall have the right to terminate this Agreement pursuant to this Section 10.2.3 if the Debarred Party can complete its obligations through, or otherwise transfer its obligations to, an Affiliate as permitted by applicable Law.
Liquidated Damages. The Parties acknowledge that Amgen's actual damages in the event of a termination by Amgen, pursuant to Section 10.2.1 or Section 10.2.3, would be difficult to ascertain, and that the payment of the Liquidated Damages represents the best estimate of the amount of such damages by the Parties at this time. The Parties further expressly acknowledge and agree that the Liquidated Damages are intended not as a penalty, but as full liquidated damages, in the event of Amgen's termination of this Agreement pursuant to Section 10.2.1 or Section 10.2.3 and as compensation for Amgen's losses and other expenses associated with this Agreement.
For purposes of this Agreement, "Liquidated Damages" means, in addition to any amounts owed to Amgen under this Agreement, including for breach of the Purchase Commitment under Section 2.1, an amount in cash equal to [*] percent ([*]%) of the [*] of Amgen's projected [*] for each remaining Quarter (including any fractional Quarters) in the Term, with such [*] equal to A : B, grown Quarterly at a [*] percent ([*]%) annual rate and discounted on a Quarterly basis, at a rate equal to the average annual increase in [*] for EPOGEN on an [*] basis for all calendar years during the Term prior to the related [*] calculation, where:
The average [*] for the [*] most recent Quarters prior to the Termination Date in which Dialysis Center satisfied the Purchase Commitment in full (or, if less than [*] such Quarters exist, then "A" shall equal the average of the sum of (i) [*] plus (ii) the [*], for the [*] most recent Quarters prior to the Termination Date); and
The average aggregate [*] (other than the [*] Rebate, the [*] Rebate and the [*] Rebate) earned by Dialysis Center Purchasers during the [*] most recent Quarters prior to the Termination Date, regardless of whether Dialysis Center satisfied the Purchase Commitment in such Quarters.
Effect of Termination. Upon any termination or expiration of this Agreement, (a) any earned and vested Discounts shall be paid in accordance with the terms set forth in Exhibit A, (b) any Alternative ESA Purchase Amounts shall be paid pursuant to Section 2.1.1, (c) any payments by Amgen owing to Dialysis Center under Section 2.5.1 shall be paid, (d) any payment by Dialysis Center owing to Amgen under Section 2.4.2 shall be paid and (e) the Liquidated Damages pursuant to Section 10.3 shall be paid. All Discounts available to Dialysis Center in the particular Quarter in which such termination occurs shall be paid to Dialysis Center based on an achievement of the eligibility and vesting requirements set forth in Exhibit A.
Survival. Any provision that, either expressly or by its nature is intended to survive this Agreement, shall survive any expiration or termination of this Agreement, including Sections 1, 3, 8, 9, 10, and 11.
Amendment. Except as expressly set forth herein, no amendment of this Agreement shall be effective unless expressed in a writing signed by a duly authorized representative of each Party.
Assignment. Neither Party shall have the right to assign or otherwise transfer this Agreement, or any of its rights and obligations hereunder, in whole or in part, without the other Party's prior written consent, and any attempted assignment or transfer without such consent shall be void; provided, however, that Amgen may assign or otherwise transfer this Agreement and its rights and obligations hereunder to any of its Affiliates that is not in the business of providing Dialysis Services in the Territory. Notwithstanding the foregoing, each Party shall be obligated to assign and transfer this Agreement, without any required consent, to any Person to whom either such Party has transferred all or substantially all of its business relating to this Agreement, and the Parties agree that they shall take all reasonable and necessary actions in respect thereof including the execution and delivery of all appropriate instruments to effectuate such assignment and transfer of this Agreement; provided that any assignment and transfer of this Agreement by Amgen to any Person, a substantial portion of whose business consists of providing Dialysis Services in the Territory, shall require the prior written consent of Dialysis Center, which consent may be withheld by Dialysis Center in its sole and absolute discretion. This Agreement and the provisions hereof shall be binding upon, and inure to the benefit of, the Parties' permitted successors and assigns.
Modification of Law. If at any time following the Term Start Date, the enactment or modification of any Law occurs and, as a result, either Party's performance of its obligations under this Agreement would not comply with such Law, either Party may, upon notice to the other Party, recommend an amendment to modify this Agreement to address those provisions of the Agreement that may not comply with such Law. The Parties agree to use their commercially reasonable best efforts to modify this Agreement as necessary to bring it into compliance with the Law if that can be done while retaining, in all material respects, the essential rights and benefits of each Party under this Agreement, including the Purchase Commitment, the Supply Commitment, the collection, exchange and use of the Data and the ability for Dialysis Center Purchasers to earn the Discounts that the Dialysis Center Purchasers are eligible to receive hereunder. Promptly following the delivery of such notice describing the Law at issue and the proposed modifications to bring this Agreement into compliance with such Law, Dialysis Center and Amgen shall meet and in good faith seek to mutually agree to amend this Agreement to accommodate any such Law in accordance with this Section 11.3.
Conflicting Provisions. To the extent that any provisions of Amgen's general or customary policies and procedures or any terms of any purchase order conflict with or are in addition to the terms of this Agreement or any Exhibit or Schedule attached hereto, the terms of this Agreement and its Exhibits and Schedules shall govern.
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."
Counterparts; Facsimile/PDF Signatures. This Agreement may be executed in one or more counterparts, each of which shall be considered an original. The Parties agree that facsimile or PDF transmission of original signatures shall constitute and be accepted as original signatures.
Currency. All amounts herein are set forth in United States Dollars.
Force Majeure. Except as provided in Section 2.1.1 or Section 2.5, 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, acts of civil or military authority, acts of any Governmental Authority, civil disobedience or commotion, epidemics, war, terrorist acts, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe, inability to procure necessary raw materials in a commercially reasonable manner or default of suppliers or subcontractors or any events beyond the reasonable control and without the fault or negligence of a Party (all of the foregoing, a "Force Majeure Event"). Force Majeure Events shall not adversely affect Dialysis Center's eligibility for any Discounts.
Further Assurances. Each Party shall perform all further acts reasonably requested by the other to effectuate the purposes of this Agreement, including obtaining the Certifications under Section 5 or obtaining purchase data necessary from third parties to calculate any amounts payable pursuant to Exhibit A.
Governing Law. This Agreement shall be governed by the laws of the State of California (without regard to its conflict of law rules) and, except as otherwise set forth in this Agreement, the Parties submit to the jurisdiction of the California courts, both state and federal.
Merger/No Reliance. This Agreement, together with the Schedules, and the Exhibits constitutes the entire agreement, written or oral, of the Parties as of the Term Start Date concerning the subject matter hereof. The Parties acknowledge that, in making the determination to enter into this Agreement or otherwise, they have not relied, in whole or in part, on any promise, information, understanding, guarantees, discussions, representation, or warranty, expressed or implied, not contained specifically in this Agreement. Without limiting the generality of the foregoing, the Parties agree that neither Party makes or has made any representation or warranty with respect to any potential changes in the dialysis segment or the use or pricing of ESAs in dialysis, including as a result of the introduction of Alternative ESAs (including [*]) including the timing of such introduction(s), the pricing of such Alternative ESAs and their potential physician acceptance and impact on prescribing practices.
No Partnership. The relationship between Amgen and Dialysis Center 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.
Notices. Any notice or other communication required or permitted hereunder (excluding purchase orders) 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 and confirmed by overnight mail), 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 below, or at such designated address that either Party shall have furnished to the other in accordance with this Section 11.13:
One Amgen Center Drive, [*]
Attn: Specialist, Contracts & Pricing : Nephrology Business Unit
If to Amgen Inc.:
Fax No.: [*]
If to Dialysis Center:
1350 Old Bayshore Highway, Suite 777
Attn: Vice-President of Purchasing
Confidentiality. "Confidential Information" means any and all information provided by one Party and/or any of its Affiliates (including Managed Centers in the case of Dialysis Center) (the "Disclosing Party") to the other Party and/or any of its Affiliates (including Managed Centers in the case of Dialysis Center) (the "Non-Disclosing Party") which is identified in writing or orally as confidential by the Disclosing Party to the Non-Disclosing Party or given the nature of the information or circumstances surrounding its disclosure reasonably should be considered as confidential, whether in written, computerized, oral, tangible or intangible, and/or other form. Nothing in this Section 11.14 shall prohibit,
Amgen from using the Data, the Compensation Data, and/or the Self-Reported Purchase Data as provided in Section 5 and Section 6.
Confidentiality Covenants. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, the Non-Disclosing Party agrees that for the Term, and for a period of five (5) years following the Term, the Non-Disclosing Party will keep confidential and not publish or otherwise disclose to any Third Party or use for any purpose, other than in accordance with this Agreement, any Confidential Information, provided, however, that the Non-Disclosing Party may disclose any such Confidential Information to its directors, officers, employees, agents, consultants and advisors as necessary for the Non-Disclosing Party to carry out its rights and obligations under this Agreement on the condition that such directors, officers, employees, agents, consultants and advisors are bound by confidentiality provisions at least as restrictive as those contained in this Agreement. The confidentiality provisions contained in this Section 11.14 shall not apply to the extent that it can be established by the Non-Disclosing Party by competent proof that such Confidential Information:
was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Non-Disclosing Party by the Disclosing Party; or
became generally available to the public or otherwise part of the public domain after its disclosure to the Non-Disclosing Party by the Disclosing Party and other than through any act or omission of the Non-Disclosing Party in breach of this Agreement; or
was independently discovered or developed by the Non-Disclosing Party without the use of or reference to the Confidential Information belonging to the Disclosing Party.
Retention and Destruction of Confidential Information. At any time upon the written request of the Disclosing Party the Non-Disclosing Party shall promptly return to the Disclosing Party or destroy all Confidential Information. Notwithstanding the return or destruction of the Confidential Information to the Disclosing Party or such other party as designated by the Disclosing Party to the Non-Disclosing Party, the Non-Disclosing Party covenants and agrees that it will continue to abide by its obligations hereunder with respect to any and all Confidential Information.
Disclosures Required By Law. In the event that the Non-Disclosing Party and/or any of its directors, officers, employees, agents, consultants and advisors that have received any Confidential Information is required by Law (e.g., by oral questions, interrogatories, request for information or documents, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information, the Non-Disclosing Party agrees to (and shall cause each of its directors, officers, employees, agents, consultants and advisors that have received any Confidential Information to) provide the Disclosing Party with immediate written notice of any such disclosure of Confidential Information that is required by Law in order to provide the Disclosing Party with an opportunity to seek a protective order or other similar order with respect to such Confidential Information. If disclosure of any Confidential Information is required by Law, the Non-Disclosing Party will (and will cause each of its directors, officers, employees, agents, consultants and advisors that have received any Confidential
Information to) furnish only that portion of the Confidential Information which it is legally obligated to disclose by Law and consistent with the terms of any protective order or other similar order obtained by the Disclosing Party with respect to such Confidential Information required to be disclosed by Law.
Public Announcements; Authorized Disclosure. Neither Party shall make a public announcement or other public disclosure concerning this Agreement without the consent of the other Party, except that either Party may make such announcement or disclosure if it is required by applicable Law, reasonably necessary for any filings with any Governmental Authority or pursuant to the rules of any securities exchange or interdealer quotation system; provided, that the disclosing Party shall give reasonable prior advance notice of the proposed text of such announcement or disclosure to the other Party for its prior review and approval, which review and approval shall not be unreasonably conditioned, withheld or delayed. The proviso in the immediately preceding sentence shall not apply to Relevant Information included in any cost report filed under Title XVIII or Title XIX of the Social Security Act, or health care program of any Governmental Authority.
Confidential Terms. Notwithstanding the foregoing, each Party may disclose the terms of this Agreement in confidence under terms and conditions at least as restrictive as set forth herein on a need-to-know basis to its legal and financial advisors to the extent such disclosure shall be reasonably necessary in connection with such Party's activities as expressly permitted by this Agreement.
Enforcement. Each Party agrees that money damages alone would not be an adequate remedy for any breach of the terms and conditions of this Section 11.14. Therefore, in the event of a breach or threatened breach of this Section 11.14, the non-breaching Party may, in addition to other rights and remedies existing in its favor, apply to any court of competent jurisdiction for specific performance and/or injunctive and/or other relief in order to enforce and/or prevent any violation of the provisions of this Section 11.14 by the breaching Party (without proving monetary damages and/or posting a bond and/or other security).
Severability. Subject to the provisions of Section 11.3, if any one or more of the provisions of this Agreement is held to be invalid or unenforceable, the provisions shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof.
Waiver. No Party shall be deemed to have waived any right hereunder, unless such waiver is expressed in a writing signed by such Party.
Open Records. To the extent required by §1861(v)(1)(I) of the Social Security Act, as amended, the Parties will allow the U.S. Department of Health and Human Services, the U.S. Comptroller General and their duly authorized representatives, access to this Agreement and all books, documents and records necessary to certify the nature and extent of costs incurred pursuant to it during the Term and for four (4) years following the last date any EPOGEN or services are furnished under it. If Amgen carries out the duties of this Agreement through a subcontract worth $10,000 or more over a 12-month period with a related organization, the subcontract shall also contain an access clause to permit access by the U.S. Department of Health and Human Services, the U.S. Comptroller General, and their duly authorized representatives to the related organization's books and records.
Amgen's ESA Risk Evaluation and Mitigation Strategy Program. Dialysis Center and its Designated Affiliates and Managed Centers shall reasonably cooperate and comply with Amgen in Amgen's implementation of its ESA Risk Evaluation and Mitigation Strategy program as found at the FDA website: http://www.fda.gov/downloads/Drugs /DrugSafety/PostmarketDrugSafetyInformationforPatientsandProviders/UCM200105.pdf ("the FDA Website") and which may be modified from time to time by the FDA (the "Amgen ESA Risk Evaluation Program"). Dialysis Center shall refer to the FDA Website for updates to the Amgen ESA Risk Evaluation Program.
Recall. In the event the FDA initiates a mandatory recall or Amgen initiates a recall, field market withdrawal, stock recovery, or other similar action with respect to EPOGEN (a "Recall"), the Dialysis Center Purchasers shall cooperate with Amgen in implementing the Recall consistent with applicable Law, any industry guidance issued by the FDA, and the terms or procedures of the Recall, including reasonable cooperation with any Amgen designated Third Party vendors.
Assumption of Risk. Each Party expressly accepts and assumes all risks that may arise out of or result from uncertainties or changes to the dialysis market including those resulting from the introduction of Alternative ESAs (including [*]), including the timing of such introduction(s), the pricing of such Alternative ESAs and their potential physician acceptance and impact on prescribing practices.
The Parties have executed this Agreement by their designated representatives set forth below.
/s/ Anthony C. Hooper
/s/ Dennis Kogod
Amgen Inc. with respect to certain provisions of this Agreement as set forth herein.
[Exhibits omitted by Findlaw]