Supply Agreement between Becton Dickinson and Company and Coram Healthcare (June 10, 1998)
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This agreement, effective June 10, 1998, is between Becton Dickinson and Company (the supplier) and Coram Healthcare. Becton Dickinson agrees to supply specified medical devices and healthcare products to Coram's facilities in the United States, with pricing, product lists, and eligible facilities detailed in attachments. Coram commits to using Becton Dickinson as a preferred supplier and must notify the supplier of any changes to its facility list. The agreement includes confidentiality obligations, payment terms, and conditions for price adjustments. Both parties agree to keep certain information confidential for three years after the agreement ends.
EX-10.3 5 d09791exv10w3.txt EX-10.3 BECTON DICKINSON SUPPLY AGREEMENT EXHIBIT 10.3 [*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. SUPPLY AGREEMENT This Agreement, effective June 10, 1998, is between Becton Dickinson and Company, having a principal place of business at 1 Becton Drive, Franklin Lakes, NJ 07417 ("Supplier") and Coram Healthcare, having offices at Suite 2100, 1125 17th Street, Denver, Colorado 80202 ("Coram") under the terms as set forth below. WITNESSETH Whereas, Supplier is interested in continuing as a supplier of medical devices and healthcare products and services for Coram; and Whereas, Supplier is interested in continuing as a preferred supplier for Coram of such Products; and Whereas, Coram is interested in continuing to utilize the Products of Supplier. NOW, THEREFORE, for mutual consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follows: A. SERVICES 1. Products 1. Supplier will provide all Becton Dickinson and Company Products but presently limited to products sold by Becton Dickinson Medical, Becton Dickinson Consumer Products, Becton Dickinson Infusion Therapy Systems, and Becton Dickinson VACUTAINER Systems. See product lines covered on Attachment A ("Products"). Becton Dickinson and Company reserves the right to delete Products from the scope of this contract which become no longer generally available to the public. This Agreement applies only to Products listed on Attachment A on the date of acceptance by Supplier, or such Products at such prices as may be added in the future by mutual agreement of the parties. 2. Membership All owned Coram Facilities as described below, listed in Attachment B are eligible to participate in this Agreement. Coram will provide Supplier with a Facility List, and represents and warrants that the Facility List is a true and complete statement of all Facilities in the United States owned, operated, or effectively managed, whether directly or indirectly, by Coram as of the Effective Date of this Agreement, and in which Coram uses products of the type set forth in Attachment A ("Facilities and Facility List"). Coram agrees to notify Supplier in writing and in a timely manner of all changes in the Facility List during the term of the Agreement. In the event that Coram adds one or more pharmacy or other healthcare facilities/sites through acquisition or other arrangement during the course of the contract, upon consent of Supplier, not to be unnecessarily withheld by Supplier, the volume of Becton Dickinson and Company Products purchased at those new Facilities will be added to the total base volume of the year of acquisition. The prices set by this Agreement for Products shall be available to new Facilities added to the Facility List as of the date of Coram's written notice. Coram further represents that it, and each of its Facilities, have all Federal, State and local licenses or permits necessary for their purchase, sale, and/or distribution and use of Products sold under this Agreement, and will provide copies of same to Supplier upon its request. B. COMPENSATION When buying directly, Coram will pay Supplier within [*] after receipt of invoice or billing in accordance with the price in effect at the time of the order minus the discounts reflected herein. When buying indirectly, Coram agrees to use dealers in good standing and in full compliance with all of Supplier's credit terms and conditions. All discounts are in consideration of Coram having selected this supplier as a Preferred Supplier for those Products which it uses in its Facilities in the United States. Neither Coram nor any third party acting on its behalf shall export or otherwise transfer outside the United States Products acquired under this Agreement. Prices shown on the Attachments (referred to below) are net of brokerage, and may be amended by the mutual agreement of the parties, shall start at the Effective Date and shall expire at the end of each respective year of this Agreement. At the expiration of the [*] of this Agreement, prices for years [*] for conventional needles and syringes, sharps containers, and InterLink are subject to a maximum [*] price increase for each contract year unless Coram exceeds agreed upon minimum utilization levels by [*]. Price for extended dwell catheters and conventional PVA catheters will increase by a maximum of [*] only in [*] of this Agreement, provided that the utilization minimums for [*] have been met. Supplier shall give sixty [*] written notice prior to any additional price increases. Safety products will not be included in the calculation of minimums where conventional products are available. BD will track the cannabalization of conventional product and adjust Coram's conventional volume accordingly. Price increases on safety products for [*] of the agreement do not apply. However, should external factors beyond the control of the parties cause a significant increase or decrease in the pricing of a particular Product or Products, parties shall negotiate in good faith to reach a mutually agreeable price for the Product(s). 2 C. CONFIDENTIALITY Each party shall keep confidential and not disclose to any unauthorized third party any and all Confidential Information of the other. "Authorized third parties" shall include appropriate governmental authorities, legal counsel, financing sources, and business counselors who have executed appropriate confidentiality agreements. "Confidential Information" shall, without limitation, consist of trade secrets, know-how, proprietary information, processes, techniques and information relating to Coram's past, present and future marketing and research and development activities that are disclosed to Supplier by Coram and/or Coram's parent, subsidiary or affiliate companies. In addition, without limiting the foregoing, "Confidential Information" shall also include any and all information and records Supplier receives in the course of its performance of its services under this agreement. Notwithstanding the foregoing, Confidential Information shall not include: a. Information that is now in the public domain or subsequently enters the public domain through no fault of the respective party; b. Information that is presently known or becomes known to a party from its own independent sources as evidenced by its written records; c. Information that is received from any third party not under any obligation to keep such information confidential; or d. Information independently developed by or for a party hereto by persons who did not access information disclosed by the other party under this agreement. Supplier expressly agrees that Supplier shall not show this Agreement or disclose the existence, nature or subject matter of this Agreement to any third party without the prior written consent of Coram. Each party's obligations not to disclose Confidential Information to third parties and not to otherwise use Confidential Information shall survive the termination of this Agreement for a period of three (3) years D. TERMS OF SALE Agreements between any of the listed participating Becton Dickinson Divisions or Becton Dickinson and Company, and Coram, whether oral or written, are now superseded by the provisions of this Agreement. The price and terms of sale (including shipping, delivery and payment terms) for Products sold through distribution will be in accordance with the designated distributor's policies. Terms of sale for Becton Dickinson Consumer Products sold on a direct basis are set forth on Attachment E. 3 This contract and related incentives are contingent upon Coram's remaining committed to a "preferred supplier" award on all core product categories represented by each participating BDX Division (see attachments C through F). "Preferred Supplier" is defined for the purposes of this agreement as providing a [*] of the products identified as Coram Healthcare formulary items, and used by the Coram Facilities listed on Attachment B, which may be amended from time to time to reflect the expansion or contraction of Coram's business. Supplier agrees to [*] Coram the [*] outlined in this document under paragraph E, and to provide the pricing set forth on Supplier's Attachment to this Agreement based on Coram's commitment to the following Programs: 1. Becton Dickinson Infusion Therapy Systems items defined in Attachment C 2. Becton Dickinson Injection Systems items defined in Attachment D 3. Becton Dickinson Consumer Products items defined in Attachment F 4. Becton Dickinson Vacutainer Systems items defined in Attachment F 5. Becton Dickinson Divisions Value Offerings items defined in Attachment G 6. Becton Dickinson Safety Product offerings, including InterLink, Safety Glide, Safety Lok, Insyte AutoGuard/Saf-T-Intima, and Safe Blood Collection as defined in Attachments C, D, F and H This Agreement includes Products sold by several divisions. Some Products may be sold on a direct basis. An end-user buying Products sold on a direct basis will pay the "Direct Price" indicated. Other Products not included on the Attachments shall be sold at dealer price. Transition to safety products will occur in accordance with any mandated conversion to use of safety engineered products, whether by law, regulation, or otherwise. For purposes of this Agreement, the dollar volume of all Becton Dickinson and Company products will be determined from the contract price, less any returns or credits on products purchased either direct or from an authorized distributor. Verification of purchases will be determined from data collected by divisions of Becton Dickinson and Company, Coram, and our authorized distributor(s), and will be reviewed on a quarterly basis. Supplier shall be the sole arbiter of dollar volume purchased. E. BDX ADMINISTRATIVE FEE AND CORAM COMMITMENTS 4 This Agreement between Coram and Becton Dickinson and Company will allow for the following fees to be paid, and prices offered on behalf of all participating divisions through this Agreement. At the Effective Date of this Agreement, Supplier [*] Coram an [*] for Coram's administration of the terms and conditions of this Agreement over its 5 year term at the [*]. Supplier is offering the pricing for Products and the Value Offerings in return for Coram's commitment to purchase the minimum quantities of supplier's Products in each year of this Agreement as set forth in Attachments C, D, E, F and H (the "Annual Minimum Committed Volumes") subject to the following terms and conditions: 1. If Coram fails to purchase its Annual Minimum Committed Volume of any Product Category in any given year of this Agreement after the first thirteen (13) months of this Agreement as set forth in Attachments C, D, E and F, Coram shall pay to Supplier a sum equal to twenty percent (20%) of the contract price, by Product Category as set forth on Attachments C, D, E and F, for Products not purchased falling beneath the Annual Minimum Committed Volume (the "Pricing Adjustment"). Coram shall pay the Pricing Adjustment to Supplier within [*] after Supplier determines the volume purchased by Coram in a given contract year. 2. If there is a material reduction in the patient population at the Facilities other than as a result of a sale, divestiture or other transfer of Coram's business, and upon the request of Coram, Supplier and Coram agree in good faith to meet and attempt to renegotiate a modification of Annual Minimum Committed Volumes and other applicable terms. If Supplier and Coram are unable to agree upon mutually acceptable terms, Coram may, upon [*] prior written notice to Supplier, terminate this Agreement in accordance with the provisions of Paragraph I.2. 3. Coram and Supplier agree to an annual review of minimum committed volumes on all products. At the end of each contract year, Supplier and Coram will review Coram's actual purchases of Products as compared with the Annual Minimum Committed Volumes for such Products during that contract year. In the event Coram's purchases of a given Product exceed that year's Annual Minimum Committed Volume for such product category by more than [*]. 5 F. INDEMNIFICATION Supplier agrees to indemnify Coram and/or its parent, subsidiary and affiliate companies against any liability (including reasonable attorneys' fees) arising out of any claim made against them for Supplier's negligence or (a) libel, slander or defamation, (b) infringement of copyright or other intellectual property right of any kind whatsoever (excluding infringement by Coram's products, trademarks, trade names, service marks, etc., of others' patents, names or marks), (c) piracy, plagiarism or unfair competition or item misappropriation under implied contract, (d) violation of any Federal, state or local law, statute, rule or regulation; (e) invasion of rights of privacy to the extent such liability arises from acts committed by Supplier in any work prepared for Coram hereunder except that Coram, its parent, subsidiary or affiliate companies shall be responsible for any such claim arising solely from Supplier's adherence to Coram's written instructions or directions to the extent applicable; (f) any claim for damages for personal injury allegedly arising out of the use of any of Supplier's Products, provided, however, that this indemnification against personal injury claims shall not apply to Supplier's Products which have been altered, modified, damaged, opened, or repackaged by Coram; or (g) or act or omission relating to any modification of Supplier's systems or processes required to permit such systems or processes to accommodate data occurring after December 31, 1999. G. WARRANTY Supplier warrants to the extent applicable that the Products supplied have been manufactured or stored in compliance with FDA guidelines, environmental, health and safety ("EHS") regulations, good manufacturing practices ("GMP") where applicable and good laboratory practices ("GLP"). Should any Product fail to perform as intended by Supplier or fail to meet the above warranties, Supplier shall replace it free of charge. In addition, if any product is proven to fail to meet FDA guidelines, Supplier will adjust the Annual Minimum Committed Volume requirement for that product accordingly. This warranty is in lieu of all other warranties, whether express or implied, including, without limitation, warranties of merchantability or fitness for a particular use, and shall in no event apply to any indirect or consequential damages. H. INSURANCE Supplier shall maintain at its individual cost and expense, Worker's Compensation, Comprehensive General Liability and Automobile insurance. Supplier shall provide reasonable written notice prior to the expiration or cancellation of such coverage. The amount and extent of such insurance coverage shall not be less than $1,000,000 per occurrence and $3,000,000 in aggregate. Supplier's General Liability coverage shall also include product liability endorsement under which Coram is an additional insured 6 either by being directly named under the policy or through a blanket vendor endorsement. I. DURATION OF AGREEMENT 1. Term This Agreement is effective upon execution and shall continue in full force and effect for a period of six (6) years provided that, either party may terminate this Agreement at any time upon at least one hundred twenty (120) days written notice to the other, sent by registered mail to the address for the other party first set forth above, or to such other address which a party may designate for its receipt of notices hereunder. 2. Termination for Cause If either party, its affiliates or Facilities fail to meet any material obligation under this Agreement, then the other party, at its sole option, and without waiver of any of its rights, may terminate this Agreement upon thirty (30) days' written notice containing details of the alleged breach to the breaching party, provided that the breach remains in effect at the end of the thirty (30) day notice period. 3. Costs Due Upon Early Termination Upon early termination of this Agreement, whether for cause or otherwise, Coram shall pay to Supplier an early termination penalty of [*] for each full unfulfilled contract year (as well as a pro-rated sum for any part of an unfulfilled contract year), in addition to any other amounts due and owing to Supplier from Coram, its affiliates, Facilities, or distributors J. INDEPENDENT CONTRACTORS The parties to this Agreement are independent contractors and nothing contained in this Agreement shall be construed to place the parties in the relationship of employer and employee, partners, principal and agent, or joint venturers. Neither party shall have the power to bind or obligate the other party nor shall either party hold itself out as having such authority. K. THIRD PARTY OBLIGATIONS 7 Supplier shall make no commitments or disbursements, incur no obligations nor place any advertising, public relations or promotional material for Coram and/or Coram's subsidiary or affiliate companies, nor disseminate any material of any kind using the name of Coram and/or Coram's subsidiary or affiliate companies or using their trademarks, without the prior written consent of Coram. L. GOVERNING LAW This Agreement is entered into in the State of Colorado and shall be construed and governed under and in accordance with the laws of that State. M. AUDIT Supplier reserves the right to conduct audits at reasonable times (but no more frequently than calendar quarter) of purchases by Coram under this Agreement, including purchase orders to and invoices from all distributor agents and/or Becton Dickinson divisions. Any such audits shall be conducted during Coram's normal business hours without causing any unreasonable disruption of Coram's business operation. N. SEVERABILITY If any provision of this Agreement is finally declared or found to be illegal or unenforceable by a court of competent jurisdiction, both parties shall be relieved of all obligations arising under such provision, but, if capable of performance, the remainder of this Agreement shall not be affected by such declaration or finding. O. FORCE MAJEURE Noncompliance with the obligations of this Agreement due to a state of force majeure, the laws or regulations of any government, regulatory or judicial authority, war, civil commotion, destruction of facilities and materials, fire, earthquake or storm, labor disturbances, shortage of materials, failure of public utilities or common carriers, and any other causes beyond the reasonable control of the applicable party, shall not constitute a breach of contract. P. MISCELLANEOUS 1. In recognizing Supplier as a preferred supplier, Coram agrees to: a. Encourage participation (e.g. permitting product exhibition) by the end-user community in selecting Supplier's products; 8 b. Permit the following: (i) distribution of product catalog and other Supplier provided literature; (ii) periodic vendor shows and technical seminars to display new products and technical information as may be agreed upon between Supplier and the individual sites; (iii) contractors passes to be provided to Supplier's personnel. 2. BDX products purchased by Coram covered in this Agreement are "not for resale", as this may cause such purchases to violate the Robinson-Patman Act. Coram agrees to inform all responsible individuals in Facilities eligible to purchase under this Agreement of this requirement. 3. The terms of this Agreement shall bind Coram and Supplier and their respective successors and assigns. Notwithstanding the foregoing, this Agreement is not assignable in whole or in part by Supplier without the prior written consent of Coram, provided, however that Supplier may assign it to any of Becton's subsidiaries, affiliates, operating units, or other related companies. Factoring of accounts receivable hereunder is not permitted. 4. In the event that Coram merges with, acquires, or is acquired by a third party, the terms and conditions of this Agreement shall continue only with the mutual written consent of Coram and Supplier, which consent shall not be unreasonably withheld, provided, however, that Supplier shall be provided information on the new entity, including, without limitation, information relating to credit policy and product usage, before providing its consent. 5. The failure of either party to take action as a result of a breach of this Agreement by the other party shall constitute neither a waiver of the particular breach involved nor a waiver of either party's right to enforce any or all provisions of this Agreement through any remedy granted by law or this Agreement. 6. This Agreement contains the entire understanding of the parties with respect to the subject matter contained herein, supersedes any prior written or oral communications between the parties relating thereto and may be modified in writing subject to mutual agreement of the parties hereto. 7. The headings of each paragraph are for reference only and shall not be construed as part of this Agreement. 9 8. Any offers of gifts or gratuities will not be allowed. 9. All discounts or incentives received by Coram from Supplier under this Agreement are "Discounts or other reductions in price" to Purchaser under Section 1128B(b)(3)(A) of the Social Security Act [42 U.S.C. 1320 a-7b(b)(3)(A)]. Coram warrants that it will disclose all discounts and reductions in price under any State or Federal program which provides cost or charge based reimbursement to Coram for the Products and services provided under this Agreement. 10. The parties agree that they must attempt to resolve in good faith any dispute or claim arising out of or relating to this Agreement through non-binding mediation before filing suit in any court of competent jurisdiction. IN WITNESS WHEREOF, the parties hereto, each by a duly authorized officer, have entered into this Agreement this 10th day of June, 1998. CORAM HEALTHCARE BECTON DICKINSON AND COMPANY By: /s/ ROBERT ROOSE, JR. By: /s/ HOWARD SANDERS -------------------------------------- ------------------------------ Title: Senior Vice President Title: President BDHS ---------------------------------- --------------------------- Date: 1/7/00 Date: 1/10/00 ----------------------------------- ---------------------------- (Revised) 10 ATTACHMENT A CORAM APPROVED PRODUCT FORMULARY FOR BD PRODUCTS HYPODERMICS
ATTACHMENT A CORAM APPROVED PRODUCT FORMULARY FOR BD PRODUCTS HYPODERMICS
ATTACHMENT A CORAM APPROVED PRODUCT FORMULARY FOR BD PRODUCTS HYPODERMICS
ATTACHMENT A CORAM APPROVED PRODUCT FORMULARY FOR BD PRODUCTS SHARPS COLLECTORS
ATTACHMENT A CORAM APPROVED PRODUCT FORMULARY FOR BD PRODUCTS SHARPS COLLECTORS
ATTACHMENT A CORAM APPROVED PRODUCT FORMULARY FOR BD PRODUCTS INTERLINK
ATTACHMENT A CORAM APPROVED PRODUCT FORMULARY FOR BD PRODUCTS THERMOMETRY
ATTACHMENT A CORAM APPROVED PRODUCT FORMULARY FOR BD PRODUCTS BD INFUSION THERAPY - PERIPHERAL VASCULAR ACCESS
ATTACHMENT A CORAM APPROVAL PRODUCT FORMULARY FOR BD PRODUCTS BD INFUSION THERAPY -- SITE MAINTENANCE
* Coram agrees that effective 9/30/98 that all kit volume will be supplied by BD. Components will be determined by Coram and Price will be established by BD. ATTACHMENT A CORAM APPROVED PRODUCT FORMULARY FOR BD PRODUCTS BD INFUSION THERAPY - EXTENDED DWELL CATHETERS
ATTACHMENT A CORAM APPROVED PRODUCT FORMULARY FOR BD PRODUCTS BD CONSUMER
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ATTACHMENT C BECTON DICKINSON INFUSION THERAPY SYSTEMS
ATTACHMENT D BECTON DICKINSON INJECTION SYSTEMS
2 ATTACHMENT E BECTON DICKINSON CONSUMER PRODUCTS
3 ATTACHMENT F BECTON DICKINSON VACUTAINER SYSTEMS
4 ATTACHMENT G VALUE SUMMARY (updated 6/99)
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