|
Exhibit
10.7
BIOLOGICS DISTRIBUTION
AGREEMENT
THIS DISTRIBUTION AGREEMENT
(“ Agreement ”), dated as of February 27, 2004,
is made and executed by and between ACCENTIA, INC., a Florida
corporation (“ Accentia ”) and McKESSON
CORPORATION, a Delaware corporation (“ McKesson
”) based on the following facts and
understandings:
WHEREAS, Accentia is a
vertically integrated specialty pharmaceutical company engaged in
the identification, acquisition, development and distribution of
biologic products;
WHEREAS, Accentia and
McKesson entered into a Forbearance Agreement dated as of December
9, 2003 and an Assumption of Debt and Security Agreement dated as
of December 31, 2003 (the “Assumption Agreement”). The
Recitals set forth in said agreements are incorporated herein by
reference, provided that to the extent there is any irreconcilable
inconsistency between the Recitals in the Forbearance Agreement and
the Recitals in the Assumption of Debt and Security Agreement, the
Recitals in the Assumption of Debt and Security Agreement shall
control because it is the more recent of the two
documents;
WHEREAS, Accentia desires to
grant and convey and McKesson desires to acquire the exclusive
rights to distribute all current and future biologic products
developed or acquired by Accentia;
NOW THEREFORE, for fair and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Accentia and McKesson hereby agree as
follows:
SECTION 1 Definitions:
Interpretation
(a) All capitalized terms
used in this Agreement and not otherwise defined herein shall have
the meanings assigned to them in the Assumption of Debt and
Security Agreement.
(b) As used in this Agreement
(including the Preamble hereof), the following terms shall have the
following meanings:
“ Accentia
” means Accentia, Inc, a Florida corporation together with
all Majority Owned Subsidiaries of Accentia. On the date of this
Agreement, the following are majority owned subsidiaries of
Accentia: Teamm Pharmaceuticals, Inc, Analytica, Inc and Biovest
International, Inc.
“ Biologic
Products ” means products such as monoclonal antibodies,
peptides, antigens for autologous cancer vaccines such as for
non-Hodgkins lymphoma and renal cell carcinoma, cytokines, and
viruses produced by mammalian cell culture techniques under an FDA
license for commercialization.
-Signature Page-
“ Person ”
means an individual, corporation, partnership, joint venture,
trust, unincorporated organization, governmental agency or
authority, or any other entity of whatever nature.
“ Net Revenue
” means the gross proceeds received by Accentia from the sale
of Biologic Products for use in the Territory less all returns,
rebates, discounts, advertising allowances, Cost of Distribution
and product cost.
“ Territory
” means the United States, Mexico, and Canada.
“ FDA ”
means the U. S. Food and Drug Administration.
“ Cost of
Distribution ” means all expenses, including but not
limited to materials, direct labor, indirect labor and overhead
determined in accordance with generally accepted accounting
principals consistently applied that are paid or incurred by
McKesson, or its affiliated entities, in providing services in
connection with the distribution of Biologic Products under this
Agreement. Any dispute regarding Cost of Distribution shall be
resolved by mutual agreement of the parties and failing mutual
agreement by arbitration in accordance with the Rules of the
American Arbitration Association.
“ Distribution
Services ” means any and all services relating to the
distribution of Biologic Products performed by McKesson under this
Agreement.
“ Majority Owned
Subsidiary of Accentia ” means a subsidiary in which
Accentia currently owns or hereafter acquires fifty-one per cent
(51%) or more of the outstanding capital stock or equity interests
(including membership interests in a limited liability company or
partnership interests in a partnership or joint venture,
etc.).
“ Biologic Product
Owned By Accentia ” means any Biologic Product which is
owned by Accentia by virtue of purchase, assignment, license or
which is otherwise controlled by Accentia under agreement or joint
venture.
SECTION 2 Exclusive
Distributor
A. Distributor.
Accentia hereby appoints McKesson and McKesson hereby agrees to
serve as the exclusive distributor in the Territory for all
Biologic Products Owned by Accentia during the Term of this
Agreement. The forgoing appointment includes Biologic Products
Owned by Accentia as of the date of this Agreement and all Biologic
Products subsequently acquired by Accentia during the term of this
Agreement. (“Distribution Rights”).
B. Refundable Deposit
. McKesson shall remit to Accentia a non-interest bearing
refundable deposit for the Distribution Rights in the amount of
three million dollars ($3,000,000) (“Refundable
Deposit”) upon execution of this Agreement. The Refundable
Deposit shall be returned by Accentia to McKesson upon termination
of this Agreement in accordance with Section 4 below. Upon
termination, once McKesson receives repayment of the Refundable
Deposit, McKesson will cease to have the exclusive distribution
rights granted under this Agreement. So long as the Refundable
Deposit is not repaid to McKesson in full, McKesson shall continue
to have the
2
exclusive right to distribute the
Biologic Products, but shall be under no obligation to undertake
any distribution efforts, though McKesson will continue to have a
right to the Distributor Fee payable under this Agreement and to
receive reimbursement for any Costs of Distribution. The retention
of the exclusive right to distribute pending payment in full of the
Refundable Deposit shall be in addition to, and not in lieu of, any
other rights and remedies McKesson may have under this Agreement,
any other agreement with Accentia or its affiliates and, applicable
law.
SECTION 3
Fees
A. Distributor Fee .
Accentia shall pay McKesson a monthly fee equal to five percent
(5%) of all Net Revenue, as defined in Section 1 hereof, from the
sale of all Biologic Products Owned By Accentia (“Distributor
Fee”). The Distributor Fee shall be paid within twenty (20)
days following the end of each calendar month and shall be
accompanied by an accounting prepared by Accentia of all Net
Revenue.
B. Reimbursement of Cost
of Distribution. In addition to the Distributor Fee, Accentia
shall reimburse McKesson for all Costs of Distribution, as defined
in Section 1, hereof. McKesson shall monthly provide a detail
invoice of the Cost of Distribution and Accentia shall pay all
approved Cost of Distribution within twenty days of said
Invoice.
C. Disposition of
Ownership of Biologic Product . In the event Accentia sells,
licenses or otherwise disposes of its ownership of any Biologic
Product (“Disposition of Biologic Product”), Accentia
shall pay McKesson a termination payment equal to five percent (5%)
of the net consideration received at any time by Accentia from the
sale, license or disposition of the Biologic Product for the
Territory. The termination payment shall be paid in the same form
and at the same time as received by Accentia from the disposition
of the Biologic Product.
D. Disposition of Majority
Owned Subsidiary . In the event any Majority Owned Subsidiary
of Accentia which owns a Biologic Product then being distributed by
McKesson ceases to be a Majority Owned Subsidiary of Accentia,
Accentia shall pay to McKesson a termination payment equal to five
percent (5%) of the lesser of: (i) 100% of the net consideration
received by Accentia for the subsidiary; or (ii) the appraisal
value of all of said subsidiary’s Biologic Products for the
Territory. The appraisal shall be performed by an appraiser
mutually selected by McKesson and Accentia and if the parties can
not mutually agree upon the selection of an appraiser, McKesson and
Accentia shall each appoint a separate appraiser, the two of whom
shall mutually select a third appraiser. The third appraiser shall
perform the appraisal. Notwithstanding the forgoing, no termination
payment shall be payable upon the disposition of a Majority Owned
Subsidiary of Accentia provided the Subsidiary agrees to continue
the appointment of McKesson as the exclusive Distributor of all
Biologic Products of said subsidiary in the Territory in form and
substance acceptable to McKesson.
3
SECTION 4 Term and
Termination.
This Agreement shall continue
until the first to occur of: (i) mutual written termination
executed by McKesson and Accentia; (ii) written notice of material
breach which is not cured within thirty (30) days of said
wri
| 
