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EXHIBIT 10.279
DISTRIBUTION,
STORAGE, DATA AND INVENTORY MANAGEMENT SERVICES AGREEMENT
This
Distribution, Storage, Data and Inventory Management Services
Agreement ("Agreement") is entered into as
of _______________ (the "Effective
Date") by and between Ligand
Pharmaceuticals Incorporated, a Delaware
corporation with its principal place of
business located at 10275 Science Center
Drive, San Diego, California, 92121
("Ligand"), and ________________ with its
principal place of business located at
_____________ ("Distributor").
RECITALS
WHEREAS, the
parties wish to provide for certain additional distribution,
storage, data and inventory services to
Ligand, including
certain-product-specific services to be
provided monthly.
NOW THEREFORE,
in consideration of the foregoing, the mutual
representations, warranties and covenants
contained in this Agreement, and other
good and valuable consideration, the
receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as
follows:
ARTICLE 1
Definitions
1.1. "AGGREGATE INVENTORY" means, at any
given time, the total of saleable
Products in
units that Distributor has on hand at all of its storage and/or
distribution
facilities and that Distributor has on order from Ligand.
1.2. "BASE SERVICES" means the value-added
processing and data services that
Distributor will
provide as set forth in paragraph 2.1.
1.3. "CONFIDENTIAL INFORMATION" means the
confidential information described in
Section 4.2.
1.4. "AVERAGE WEEKLY MOVEMENT" means, at
any given time, the total quantity of
Products in
units (by NDC number) sold by Distributor to Customers over the
immediately
preceding thirteen (13) weeks divided by thirteen (13).
1.5. "CUSTOMERS" means the purchaser of
Products from Distributor in the United
States.
1.6. "EFFECTIVE DATE" means the first date
appearing above.
1.7. "INVENTORY AND SALES REPORTS" means
the reports described in Sections 2.21
(C).
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1.8. "ON HAND INVENTORY" means saleable
Product in Distributor's individual
distribution
centers.
1.9. "ON ORDER INVENTORY" means
Distributor's unfilled orders of Product from
Ligand.
1.10. "NEW PRICE" means the price charged
by Ligand to its wholesale customers
for Products
from and after the effective date and time of a price change
instituted by
Ligand at any time following the Effective Date of this
Agreement.
1.11. "OLD PRICE" means the price charged
by Ligand to its wholesale customers
immediately
preceding the institution of a New Price.
1.12 "PRODUCTS" means the FDA approved
pharmaceutical products listed in
Attachment
A.
ARTICLE 2
Purchasing and Inventory
2.1. Base Distribution and Inventory
Management Services. - Distributor agrees
to provide the
following "Base Services" to Ligand for products identified
on Attachment
A:
- Daily
consolidated deliveries to providers
-
Emergency shipments to providers 24/7/365
- Returns
and Recall processing
- Customer
Service for those end users serviced by Distributor
-
Consolidated accounts receivable management
- Contract
and Chargeback administration, consolidation and
processing
-
Licensed, environmentally controlled, PDMA compliant, secure
facilities for product storage, appropriate inventory rotation
and distribution
Ligand shall pay
Distributor for the Base Services as set forth in
Attachment
A.
2.2 Additional Distribution, Storage,
data and Inventory Management Services. -
In addition to
the "Base Services" Distributor agrees to provide to Ligand
the following
Distribution and Inventory Management Services which it
desires:
2.2.1 Inventory
Management
Inventory Levels & Storage. During the term of this
Agreement,
Distributor will maintain an aggregate inventory level of
Ligand
Products, as specified on Attachment A. Compliance with this
inventory
level will be measured on the last working day of each month
("Compliance Measurement Date"). Orders may be placed as
needed,
provided that orders necessary to reach the established
inventory
level in any month will be placed and received by Ligand no later
than
10 working days prior to the Compliance Measurement Date for
that
month.
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Product Availability. Distributor will work with Ligand to
minimize
product shortages and maximize product availability by agreeing to
the
following:
a. Distributor
will institute an automated balancing system on
Ligand Products in order to optimize the use of existing
inventories across the entire Distributor network, including
brokerage. This will be done using parameters agreed upon by
Distributor and Ligand.
b. During
backorder situations and limited product availability
and upon Ligand's request, Distributor will implement more
frequent order and receiving cycles to help reduce inventory
requirements.
2.2.2 Special
Handling
Special Handling Distributor will provide for the special
handling
required for products identified in Schedule A. These
requirements
include, but are not limited to frozen product storage, special
shipping and/or packaging, and CII vault storage
2.2.3 Data
Services
A. Inventory and
Sales Reports. Distributor shall prepare inventory
reports detailing the status of its Aggregate Inventory of
Products and movement of Products by NDC number ("Inventory and
Sales Reports") and, for the duration of this Agreement,
provide
Ligand with such Inventory Reports (852's) weekly and Sales
Reports (867's) weekly. All such Inventory and Sales Reports
shall be transmitted in EDI format within 7 days of the end of
each week pursuant to this section and shall include such
information as reasonably requested by Ligand, including but
not
limited to the following:
On Hand Inventory level by distribution center; and On Order
Inventory level by distribution center; and Sales out by
distribution center
Distributor may, due to contractual requirements, be required
to
block certain data in the 867's that discloses Customer
identity.
This may include Customer name and DEA number, and any other
data
that would identify a Customer. In no event will Distributor be
required to provide Customer identifying information to Ligand
in
the event it is contractually prohibited from doing so.
Distributor Inventory and Sales Reports shall be transmitted to
Ligand in an EDI 852 and EDI 867 format respectively.
Within thirty (30) days after entering into this Agreement, the
parties shall examine and test the capability of their
respective
EDI systems and complete implementation of a mutually agreeable
system whereby transfers of information can be made effectively
on a consistent basis. In the event that critical internal
support systems and electronic communication links including
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EDI, are not available for five (5) consecutive business days,
the parties will cooperate to promptly implement substitute
procedures to document the information customarily sent by EDI
and prevent interruptions to each other's business.
B. Returns,
Chargebacks and order overage/shortage reconciliation
Distributor will process and provide sufficient documentation
to
support any claims as defined below. If a dispute occurs
concerning a claim for payment then the disputed
invoices/claims
will be resolved within 90 calendar days after the date of
receipt of the claim. Ligand will not be responsible for
insufficiently documented claims or disputed claims not
resolved
with such 90 days. Non-disputed claims will be processed under
normal provisions.
Returns - Documentation will include either return of the
product to a Ligand approved facility or a signed proof of
destruction form.
Chargebacks - Detailed breakout of all chargeback claims by
end users by date.
Overage/Shortage - Documentation for claims will include
order number, P.O. number and the amount of
overage/shortage.
2.3 Invoices. Distributor will invoice
Ligand for all services hereunder within
5 days of the
end of each quarter. The invoices may be transmitted by
e-mail or by
mail. Payment will be made as described in Attachment A.
2.4 Inspections. Upon reasonable prior
notice and during normal business hours,
Distributor
shall allow permanent employees of Ligand to enter into
