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Commercial Outsourcing Services Agreement

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COMMERCIAL OUTSOURCING SERVICES AGREEMENT



This Commercial Outsourcing Services Agreement ("Agreement") is entered into as of October , 2008 (the "Effective Date") by INTEGRATED COMMERCIALIZATION SOLUTIONS, INC. , a California corporation ("ICS") and AMAG PHARMACEUTICALS, INC. , a Delaware corporation (the "Company").



RECITALS





A. Company is, among other things, in the business of manufacturing, selling and distributing pharmaceutical products, including those listed on Schedule A (" Products");



B. ICS is, among other things, in the business of providing commercialization services for pharmaceutical products;



C. The Company desires to engage ICS as its agent to provide certain commercialization services related to Products pursuant to this Agreement; and



D. ICS desires to provide such commercialization services to the Company as its agent pursuant to this Agreement.



AGREEMENT



NOW, THEREFORE, the parties hereby agree as follows:





1. Appointment As Exclusive Agent



The Company hereby appoints ICS as the exclusive provider of Services (as defined in Section 2) for Products sold to the Company92s customers ("Customers" ) in the United States, Guam, Puerto Rico and the U.S. Territories during the Term (as defined in Section 4.1), as provided in this Agreement.





2. Services To Be Performed



The Company hereby engages ICS to provide the following services with respect to Products ("Services"):



2.1 Customer Services as described in Exhibit B .



2.2 Warehousing and Inventory Program Services as described in Exhibit C .



2.3 Distribution Services as described in Exhibit D .



2.4 Contract Administration and Chargeback Processing as described in Exhibit E .



2.5 Accounts Receivable Management and Cash Applications as described in Exhibit F .



2.6 Financial Management Services as described in Exhibit G .



2.7 Information Technology Services as described in Exhibit H .



2.8 Government Contracting and Reporting Services as described in Exhibit I .



2.9 Solely for the limited purpose of compliance with the pedigree requirements of the Prescription Drug Marketing Act and any similar state laws, ICS shall be considered an



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"Authorized Distributor of Record" for the Products and a third party logistics provider who does not take title to Product or have general responsibility to direct the Product92s sale or disposition. The foregoing shall not be construed in a manner that results in ICS being considered a distributor or wholesaler for any other purpose or under any other law or regulation.



2.10 ICS will not be responsible for collection or payment of any Taxes on behalf of the Company.



2.11 Capitalized words used without definition in this Agreement will each have the meaning in Schedule C.





3. Compensation - - Fees For Services



3.1 Compensation . The Company will compensate ICS for Services in accordance with Schedule B . ICS will provide monthly invoices for fees for Services to the Company, and will bill the Company for any pass through charges that have been previously approved (except freight) by the Company on a monthly basis or as ICS is billed. The Company will notify ICS of any disputed charges in writing within 30 days of the date of the invoice covering such charges. In the absence of any such notice of dispute, all invoices will be deemed to be correct and due in full within 30 days of the invoice date. If the Company disputes a portion of an invoice, the Company shall pay the undisputed portion of the invoice within 30 days of the invoice date. A late fee of 1.5% per month (or any portion thereof) will be charged as of the due date on all amounts not paid within thirty (30) days of the invoice date, except any amount disputed by the Company in good faith. If any dispute is resolved in favor of ICS, the Company will pay the applicable late fee on such amount from the original due date.



3.2 Cost Adjustment . If ICS can reasonably demonstrate to the Company that the costs to ICS for providing Services have materially increased (or are reasonably likely to increase materially during the following twelve (12) month period of the Term) as a result of any changes in the Requirements of Law, including the adoption of any new Requirements of Law impacting Services, then ICS may increase the applicable component of the fees for such Services provided in Schedule B (" Cost Adjustment"). ICS will notify the Company of any proposed Cost Adjustment at least one hundred fifty (150) days prior to its effective date. All Cost Adjustments will be determined under generally accepted accounting principles (GAAP) and cost allocation methods applied on a consistent basis. If the Company objects to any Cost Adjustment and the parties are unable in good faith to resolve such objection to the reasonable satisfaction of both parties, then either party may terminate this Agreement upon ninety (90) days92 prior written notice to the other party.



3.3 Program Ready Date . If the Company requests that ICS delay the launch of Services beyond the agreed-upon date on the signatory page (the "Program Launch Date"), the Company will pay ICS a program ready fee and any associated expenses as specified in Schedule B, including reasonable out-of-pocket costs and other expenses. The Company will give ICS at least [***] written notice of changes to the Program Launch Date. Program ready fees will continue until the Program Launch Date. After the Program Launch Date, the Company will pay applicable monthly program fees. For the first month during which Services are provided, ICS will prorate any difference between program ready fees and applicable monthly program fees.








[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.



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4. Term And Termination



4.1 Initial Term . This Agreement will be effective as of the Effective Date and will continue for [***] years (the "Term") unless sooner terminated. The Term may be extended upon written mutual agreement of the parties, such extension to be negotiated in good faith six (6) months prior to the expiration of the Term.



4.2 Termination For Breach .



4.2.1 If a party fails to pay any amount due to the other party under this Agreement, the other party may provide notice to the non-paying party specifying the amount due and notifying the non-paying party that the other party may terminate this Agreement if the non-paying party fails to pay the amount due within five days of the date the notice is received. If the non-paying party fails to pay the amount due within five days of the date the notice is received, the other party may terminate this Agreement immediately and, in such event, shall provide written notice thereof to the non-paying party; provided that if such breach occurs more than three times during any 12-month period, the non-breaching party may terminate this Agreement upon five days92 written notice without any opportunity for cure.



4.2.2 If a party fails to perform any other material obligation under this Agreement, the other party may provide notice to the breaching party describing the breach in detail and notifying the breaching party that the other party may terminate this Agreement if the breaching party92s failure to perform is not cured within 30 days of the date of the notice. If the breaching party92s failure to perform is not cured within 30 days of the date of the notice, then the other party may terminate this Agreement immediately and, in such event, shall provide written notice thereof to the non-paying party; provided that (i) if the breaching party has begun to cure a non-monetary breach within such 30 days, but such cure is not completed to the non-breaching party92s reasonable satisfaction within such 30 days, the breaching party will have up to an additional 30 days to complete such cure (it being understood that if such cure is not completed to the non-breaching party92s reasonable satisfaction within such supplemental 30-day period, then the non-breaching party may terminate this Agreement immediately upon written notice to the breaching party), and (ii) if such breach occurs more than three times during any 12-month period, the non-breaching party may terminate this Agreement upon 30 days92 written notice without any opportunity for cure.



4.3 Termination For Specific Events . Either party may immediately terminate this Agreement upon written notice to the other party upon the other party92s: (a) filing an application for or consenting to appointment of a trustee, receiver or custodian of its assets; (b) having an order for relief entered in Bankruptcy Code proceedings; (c) making a general assignment for the benefit of creditors; (d) having a trustee, receiver, or custodian of its assets appointed unless proceedings and the person appointed are dismissed within 30 days; (e) insolvency within the meaning of Uniform Commercial Code Section 1-201 or failing generally to pay its debts as they become due within the meaning of Bankruptcy Code Section 303(h)(1), as amended; or, (f) certification in writing of its inability to pay its debts as they become due (and either party may periodically require the other to certify its ability to pay its debts as they become due) (each, a " Bankruptcy Event"). Each party agrees to provide immediate notice to the other party upon a Bankruptcy Event.








[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.



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4.4 [***]



4.5 [***]



4.6 Expenses . Within five days of expiration or earlier termination of this Agreement for any reason, the Company will (a) pay ICS any amount owed up to the effective date of termination; (b) return to ICS all hardware, software and other equipment provided to Company by ICS, or pay to ICS the replacement cost of items not returned; and (c) pay non-recoverable out-of-pocket expenses for telecommunication, facsimile, postage, shipping and other services incurred by ICS up to the effective date of termination.



4.7 Survival . Accrued payment, indemnity, intellectual property and confidentiality obligations, and any provision if its context shows that the parties intended it to survive, will survive expiration or termination of this Agreement and, except as expressly provided, expiration or termination will not affect any obligations arising prior to the expiration or termination date.





5. Recalls; Other FDA Issues



5.1 Recalls . If the Company conducts a recall, market withdrawal or field correction of any Products ("Recall"), the Company will conduct the Recall or designate a third party to do so and be responsible for all Recall expenses. ICS will comply with the Company92s reasonable requests in the Recall. To the extent that the Recall was not due to ICS92s negligence, the Company will pay or reimburse ICS92s Recall expenses (including reasonable attorneys92 fees). To that extent that the Recall was due to ICS92s negligence, ICS will pay or reimburse the Company92s reasonable documented out-of-pocket Recall expenses (including reasonable attorneys92 fees). Each party will use its best efforts to minimize Recall expenses. The Company will notify ICS of any proposed Recall as soon as possible and, in any event, will do so within forty-eight (48) hours of initiating a Recall.



5.2 Government Notices . Each party will provide the other with a copy of any correspondence or notices it receives from the FDA, DEA or any counterpart state agency specifically relating to Services or relating to a material violation of any kind that is related to the Product, whether such violation resulted from an act or omission by the Company or by ICS, as soon as possible but no later than three (3) business days following such receipt. In addition, ICS will provide the Company with any notice relating to Products promptly upon its receipt. Each party will also provide the other with concurrent copies of any responses to any such correspondence or notices ( e.g. , such as an FDA 483 notice, warning letters, untitled regulatory letters and establishment inspection reports). Where reasonably possible, ICS will give prior notice to the Company of any scheduled FDA or DEA inspections of ICS92s facilities specifically relating to any Products, and, if reasonably possible, will afford the Company the opportunity to be present at such inspection and to review and contribute to any written response, to the extent permitted by law.





6. Legal Compliance



6.1 General . During the Term, each party will comply with all Requirements of Law. ICS will comply with Requirements of Law related to storage, handling and distribution of








[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.



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Products. The Company will comply with Requirements of Law related to importation, manufacture, distribution, labeling, storage, sale and handling of Products.



6.2 Food and Drug Act . The Company hereby represents and warrants to ICS that, during the Term (a) no Products delivered by or on behalf of the Company to or on the order of ICS will be, at the time of shipment or delivery, adulterated, misbranded or otherwise prohibited within the meaning of the Act or within the meaning of any applicable state or local law, (b) Products will be, at the time of shipment and delivery to ICS, merchandise that may be introduced and delivered into interstate commerce under the provisions of Sections 404 or 405 of the Act, (c) all Products will be the subject of a duly approved NDA or ANDA and may be legally transported or sold under Requirements of Law, (d) the Company owns or holds the duly approved NDA or ANDA for the Products, or is otherwise considered the "manufacturer" of all Products under the Act and within the meaning of any other applicable federal, state or local law, and (e) all Products will have been approved by each applicable Governmental Authority for commercial sale and shipment within the United States.





7. Representations And Warranties



7.1 By the Company . The Company represents and warrants to ICS that: (a) it has authority to enter into and perform this Agreement without restriction and this Agreement is a valid and binding obligation of the Company, (b) execution, delivery and performance of this Agreement by the Company has been duly authorized by all necessary corporate actions, (c) the Company will obtain and will maintain, in full force and effect, all licenses and permits required under applicable law for the Company to sell and distribute Products under this Agreement prior to the initiation of such sale and distribution, (d) as of the Effective Date, there is no proceeding or investigation pending or threatened that questions validity of this Agreement, marketing authorizations related to Products or actions pursuant to this Agreement, and (e) as of the date that the first Product is distributed by ICS to a customer under this Agreement, no approvals, consents, orders or authorizations of or designation, registration, declaration or filing with any Governmental authority (within the United State) are required for Company92s performance of its obligations under this Agreement, other than any approval already obtained.



7.2 By ICS . ICS represents and warrants to the Company that: (a) it has authority to enter into and perform this Agreement without restriction and this Agreement is a valid and binding obligation of ICS, (b) execution, delivery and performance of this Agreement by ICS has been duly authorized by all necessary corporate actions, (c) ICS has and will maintain in full force and effect, all licenses and permits required under applicable law for ICS to perform the Services under this Agreement, (d) as of the Effective Date, there is no proceeding or investigation pending or threatened that questions validity of this Agreement, ICS92s licenses to warehouse and distribute pharmaceuticals, or any actions pursuant to this Agreement, and (e) as of the date that the first Product is distributed by ICS to a customer under this Agreement, no approval of or filing with any Governmental Authority (within the United States) is required for ICS to perform Services, other than any approvals already obtained.



7.3 Notice of Changes . The Company and ICS will give prompt written notice to the other if it becomes aware during the Term of any action or development that would cause any warranty in this Section 7 to become untrue.



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8. Trademarks/Data



Neither party may use the other party92s name, trademarks, service marks, logos, other similar marks, other intellectual property, or other data or information in any manner without its prior written approval, except to satisfy its obligations under this Agreement. Data and information that belong to the Company will be any data and information related to Products (including sales information), except ICS Data. "ICS Data" means data and information that (i) relates to ICS92s processes, reports and services provided to the Company under this Agreement or to its business relationships and transactions with other suppliers, but is not specific to Products or the Company, and (ii) was independently developed by ICS or its Affiliates without use of Company92s Confidential Information. ICS Data, including information and data relating to any of ICS92s customers and their profiles, and any derivative works or aggregations of ICS Data belongs to ICS.





9. Confidentiality



9.1 Existing Agreement . The parties have previously executed a written Confidentiality Agreement (" Confidentiality Agreement"), attached as Schedule D . The parties will abide by its provisions during the Term and for at least five (5) years thereafter, regardless of any shorter term in the Confidentiality Agreement.



9.2 Termination . Upon expiration or termination of this Agreement for any reason each party will promptly return to the other party all documents and other material containing Confidential Information (as defined in the Confidentiality Agreement), including copies, other than those which a party is reasonably required to maintain for legal, tax or valid business purposes, or if authorized in writing by Company, certify to the other party that it has destroyed all such documentation and other materials.





10. Remedies



10.1 Generally . Rights and remedies under this Agreement are cumulative and in addition to any other available rights or remedies under any agreement, at law or in equity.



10.2 Equitable Relief . If either party violates or threatens to violate Recall, Legal Compliance, Trademark/Data infringement, Confidentiality or other provisions of this Agreement, the other party may suffer irreparable harm and its remedies at law may be inadequate. Accordingly, the other party may seek equitable relief.



10.3 Breach by the Company . Either company acknowledges the difficulty (if not the impossibility) of ascertaining the amount of damages that would be suffered by either on account of the loss of monthly fees or revenues that it would have earned during the remaining months of the Term (the "Lost Profits"), if either party terminates this Agreement following a breach by either company. Accordingly, either company agrees that if either party terminates this Agreement during the Term following a breach by either company, then, as liquidated damages and not as a penalty, the measure of damages payable to either company for the Lost Profits shall be equal to [***] of the aggregate amount of all fees or revenues and other sums that, in absence of such breach, would have been paid by the Company to ICS under this Agreement for the remaining months of the Term[***] with such fees and other sums to be based on the average monthly amount paid or owed by the Company to ICS during the six months preceding such breach (or such shorter time as the Agreement has been in effect) or








[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.



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for company the average monthly amount of revenues booked into sales. The liquidated damages are intended to compensate either company for Lost Profits only. Either company does not waive and expressly reserves its rights with respect to all other claims or amounts due under this Agreement and the Continuing Guaranty (as defined in Section 13 below). Accordingly, the Lost Profits shall not constitute damages or compensation for any other breach of this Agreement or any other obligation of either company, including but not limited to any claim for indemnification under Section 11 of this Agreement or the Continuing Guaranty.



10.4 LIMITATIONS . EXCEPT FOR EACH PARTY92S OBLIGATIONS OF CONFIDENTIALITY UNDER SECTION 9, INDEMNIFICATION UNDER SECTIONS 11.1 AND 11.2, AND INTELLECTUAL PROPERTY UNDER SECTION 12:



(A) SUBJECT TO SECTION 10.3 ABOVE, NO PARTY WILL BE LIABLE TO ANY OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR OTHER SIMILAR DAMAGES ARISING OUT OF OR IN CONNECTION WITH A BREACH OF THIS AGREEMENT, PROVIDED THAT ANY LOSS DUE TO DAMAGE OR LOSS OF PRODUCTS WILL BE BASED UPON THE COMPANY92S COST OF MANUFACTURING OR ACQUIRING PRODUCTS, NOT ITS SELLING COST;



(B) Subject to Section 10.4(A) above, the Company shall bear all risk of loss or damage with respect to the Product warehoused by ICS except to the extent loss or damage results from the [***]. As used in this Section 10.4(B), the "net amount earned by ICS" shall be calculated in the same manner as lost profits are calculated under Section 10.3. This Section 10.4(B) shall not apply to any claim subject to indemnification under Section 11 that is brought by a third party.



(C) [***]





11. Indemnification



11.1 By the Company . The Company will defend, indemnify and hold harmless ICS and its Related Parties from and against all claims, liabilities, losses, damages, costs and expenses, including reasonable attorneys92 fees (collectively, "Claims") brought by third parties or the Company92s employees caused by or arising from any (a) act or omission of the Company or its Related Parties, (b) failure of the Company to perform its obligations or to comply with Requirements of Law, (c) breach of any warranty made by the Company in this Agreement (d) claims of patent, trademark, copyright or other infringement related to Products, (e) storage, handling, use, non-use, demonstration, consumption, ingestion, digestion, manufacture, production and assembly of Products and their transportation to ICS, or (f) Taxes imposed against ICS or its Related Parties; provided , however, the Company will have no obligations under this Section 11.1 for any Claims to the extent caused by any negligent act or omission of ICS or its Related Parties.



11.2 By ICS . ICS will defend, indemnify and hold harmless the Company and its Related Parties from and against all Claims brought by third parties or ICS92s employees against








[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.



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the Company or its Related Parties caused by or arising from any (a) negligent act or omission of ICS or its Related Parties, (b) failure of ICS to perform its obligations or to comply with Requirements of Law, (c) breach of any warranty made by ICS in this Agreement, or (d) making by ICS of representations or warranties with respect to Products to the extent not authorized by the Company; provided , however, that ICS will have no obligations under this Section 11.2 for any Claims to the extent caused by any negligent act or omission of the Company or its Related Parties.



11.3 Procedures . The obligations and liabilities of the parties with respect to Claims subject to indemnification under this Section 11, ("Indemnified Claims"), will be subject to the following terms and conditions:



11.3.1 The party claiming a right to indemnification hereunder ("Indemnified Person") will give prompt written notice to the indemnifying party ("Indemnifying Person" ) of any Indemnified Claim, stating its nature, basis and amount, to the extent known. Each such notice will be accompanied by copies of all relevant documentation, including any summons, complaint or other pleading that may have been served or any written demand or other document.



11.3.2 With respect to any Indemnified Claim: (a) the Indemnifying Person will defend or settle the Indemnified Claim, subject to provisions of this subsection, (b) the Indemnified Person will, at the Indemnifying Person92s sole cost and expense, cooperate in the defense by providing access to witnesses and evidence available to it, (c) the Indemnified Person will have the right to participate in any defense at its own cost and expense to the extent that, in its judgment, the Indemnified Person may otherwise be prejudiced thereby, (d) the Indemnified Person will not settle, offer to settle or admit liability in any Indemnified Claim without the written consent of an officer of the Indemnifying Person, and (e) the Indemnifying Person will not settle, offer to settle or admit liability as to any Indemnified Claim in which it controls the defense if such settlement, offer or admission contains any admission of fault or guilt on the part of the Indemnified Person, or would impose any liability or other restriction or encumbrance on the Indemnified Person, without the written consent of an officer of the Indemnified Person.



11.3.3 Each party will cooperate with, and comply with all reasonable requests of, eac
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