EXHIBIT 10.36
Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment pursuant to Rule 406 under the Securities Act of 1933.
The omitted portions have been filed separately with the Securities and
Exchange Commission.
ADDENDUM AND AMENDMENT NO. 3 TO
DISTRIBUTION AND SERVICES AGREEMENT
This Addendum and Amendment No. 3 to Distribution and Services Agreement
is entered into as of this 1st day of July, 1997 by and between Biogen, Inc.,
through its offices located at 701 Green Valley Road, Suite 308, Greensboro,
NC 27408 ("Biogen") and Nova Factor, Inc., with principal offices located at
1620 Century Center Parkway, Suite 109, Memphis, TN 38134 ("Nova Factor").
WHEREAS, Biogen has appointed Nova Factor as a preferred distributor of
Biogen's AVONEX-Registered Trademark- (Interferon beta-1a) under the terms of
a Distribution and Services Agreement between the parties, dated as of
November 1, 1995, as amended by Amendment No. 1 to Distribution and Services
Agreement, dated as of May 17, 1996, and as amended and supplemented by
Addendum and Amendment No. 2 to Distribution and Services Agreement, dated as
of May 21, 1997, (the "Distribution Agreement");
WHEREAS, as additional services under the Distribution Agreement, Biogen
desires Nova Factor to (i) accept and process referrals from physicians under
* program and (ii) to supply Product, as defined in the Distribution
Agreement, to participants in Biogen's variable cap program, and Nova Factor
is willing to provide such additional services on the terms and conditions
set forth in this Addendum;
WHEREAS, to reflect the additional services to be provided by Nova
Factor, the parties desire to supplement and amend the Distribution Agreement
as set forth in this Addendum;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereby agree as follows:
1. DEFINITION
The capitalized terms used in this Addendum that are defined in the
Distribution Agreement shall have the meanings assigned to such terms in
the Distribution Agreement. In addition, the following terms used in
this Addendum shall have the following meanings:
1.1 "Additional Services" shall mean the services to be provided by
Nova Factor under this Addendum.
1.2 "Free VCAP Product" shall mean Product supplied by Nova Factor,
acting on behalf of Biogen, to a VCAP Participant in a VCAP
Program Year, at no cost to the VCAP Participant or to any third
party payor, after the VCAP Participant has purchased his or her
VCAP Quantity of Product for such VCAP Program Year.
1.3 "Interim" shall mean Interim Healthcare, Inc.
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities Exchange Commission.
1.4 "Paid VCAP Product" shall mean Product supplied by Nova Factor,
acting on behalf of Biogen, to a VCAP Participant in a VCAP
Program Year as part of the VCAP Participant's VCAP Quantity of
Product for such VCAP Program Year.
1.5 *
1.6 *
1.7 *
1.8 "Training Provider" shall mean Interim or such other company as
Biogen shall engage to provide Product administration training
services, and as to whose appointment Biogen shall notify Nova
Factor.
1.9 "Variable Cap Program" shall mean a financial assistance program
funded by Biogen and administered for Biogen by the VCAP
Administrator under which a VCAP Participant who has purchased his
or her VCAP Quantity of Product during a VCAP Program Year will
thereafter receive Free VCAP Product for the remainder of such
VCAP Program Year.
1.10 "VCAP Administrator" shall mean Covance Health Economics and
Outcome Services Inc., or such other administrator of the Variable
Cap Program as Biogen shall appoint and as to whose appointment
Biogen shall notify Nova Factor.
1.11 "VCAP Participant" shall mean an end-user of Product who has been
enrolled in the Variable Cap Program by the VCAP Administrator
acting on behalf of Biogen.
1.12 "VCAP Product" shall mean Free VCAP Product and Paid VCAP Product.
1.13 "VCAP Program Year" for each VCAP Participant shall mean the
twelve-month period commencing with the date of the VCAP
Participant's enrollment or re-enrollment, as the case may be, in
the Variable Cap Program, as determined by the VCAP Administrator.
1.14 "VCAP Quantity", as determined by the VCAP Administrator, for each
VCAP Participant, shall mean the quantity of Product which such
VCAP Participant must purchase in any VCAP Program Year (using
available insurance and other resources) before such VCAP
Participant will be eligible to receive Free VCAP product in such
VCAP Program Year.
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities Exchange Commission.
2
2. *
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities Exchange Commission.
3
3. VARIABLE CAP PROGRAM
--------------------
3.1 As additional services under the Distribution Agreement, Nova
Factor shall, under the terms of this Addendum, act as a supplier
of VCAP Product on behalf of Biogen to VCAP Participants. Biogen
reserves the right to appoint other distributors of VCAP Product,
provided that Biogen shall give Nova Factor at least *
(*) days written notice prior to any such appointment.
3.2 Biogen, through the VCAP Administrator, shall have sole
responsibility for enrolling participants in the Variable Cap
Program. Upon enrollment of a * Customer into the
Variable Cap Program, as a VCAP Participant, the VCAP
Administrator shall provide notice to Nova Factor, substantially
in the form attached to this Agreement as Schedule C, of the name,
address, telephone number, Nova Factor code number, if applicable,
VCAP Quantity and VCAP Program Year for the VCAP Participant and
shall indicate whether or not the VCAP Participant will be
obtaining Paid VCAP Product through Nova Factor. In the event the
VCAP Participant is using another
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities Exchange Commission.
4
pharmacy for Paid VCAP Product, the VCAP Administrator shall
provide additional notification to Nova Factor at such time as the
VCAP Participant has purchased his or her VCAP Quantity from such
other source.
3.3 If the VCAP Administrator has indicated that a VCAP Participant
will be obtaining Paid VCAP Product through Nova Factor, Nova
Factor shall, on behalf of Biogen, supply Paid VCAP Product (at a
price determined by Biogen) to the VCAP Participant from Nova
Factor's inventory until the VCAP Participant has received his or
her VCAP Quantity for the applicable VCAP Program Year. Nova
Factor shall notify the VCAP Administrator when a VCAP Participant
who is receiving Paid VCAP Product through Nova Factor has been
shipped his or her VCAP Quantity for the applicable VCAP Program
Year and at such time as the VCAP Participant has fully paid for
the Paid VCAP Product.
3.4 Except as set forth in Section 3.7, after a VCAP Participant has
purchased (and paid for) his or her VCAP Quantity of Product in a
VCAP Program Year, Nova Factor shall, on behalf of Biogen, supply
Free VCAP Product on behalf of Biogen to the VCAP Participant from
Nova Factor's inventory for the remainder of such VCAP Program
Year. Nova Factor shall not bill a VCAP Participant or any insurer
or other third party payor for Free VCAP Product.
3.5 Nova Factor shall have the same obligations with respect to the
supply of VCAP Product to VCAP Participants as Nova Factor has
under the Distribution Agreement with respect to the supply of
Product to Nova Factor customers, including but not limited to
accepting assignment of benefits and billing and collecting with
respect to amounts due to Biogen for Paid VCAP Product, except
that (i) services provided with respect to VCAP Participants shall
be provided by Nova Factor on behalf of Biogen and Biogen shall
pay Nova Factor for such services as specified in Section 6.1 of
this Addendum, (ii) Nova Factor shall not bill a VCAP Participant
or any insurer or other third party payor for Free VCAP Product,
(iii) shipments of VCAP Product to VCAP Participants shall be
identified separately in the Database and in reports provided to
Biogen, as more fully described in Section 4 of this Addendum and
(iv) *. Each shipment of Free VCAP
Product shall be a three (3) months supply except that Nova Factor
shall ship less than a three (3) months supply of Free VCAP
Product when necessary to as not to exceed a VCAP Participant's
VCAP Program Year.
3.6 During each follow-up telephone call to a VCAP Participant under
Section 6.2 of the Distribution Agreement, Nova Factor shall use
its best efforts to confirm that the VCAP Participant's insurance
status or financial condition has not changed. If the VCAP
Participant's insurance status or financial condition has
changed, Nova Factor shall immediately notify the VCAP
Administrator.
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities Exchange Commission.
5
3.7 Nova Factor shall not ship VCAP Product to a VCAP Participant
after the end of the VCAP Participant's VCAP Program Year unless
Nova Factor receives written or faxed notice from the VCAP
Administrator that the VCAP Participant has been re-enrolled in
the Variable Cap Program for the next VCAP Program Year in which
case Nova Factor shall ship Free VCAP Product to the VCAP
Participant only after the VCAP Participant has purchased his or
her VCAP Quantity of Product for the new VCAP Program Year. Nova
Factor shall not ship VCAP Product to a VCAP Participant unless
Nova Factor has received notice of enrollment from the VCAP
Administrator. Nova Factor shall not ship VCAP Product to a VCAP
Participant after Nova Factor receives written notice that the
VCAP Participant is no longer participating in the Variable Cap
Program.
3.8 Nova Factor shall remit to Biogen on a weekly basis all amounts
collected by Nova Factor for Biogen with respect to Paid VCAP
Product supplied to VCAP Participants.
4. DATA AND REPORTS
----------------
In addition to the other information to be maintained in the Database
under the Distribution Agreement, Nova Factor shall maintain in the
Database the information specified in Schedule D to the Agreement
regarding the * Program and distribution of VCAP Product
under the Variable Cap Program. In addition to other reports to be
generated by Nova Factor under the Distribution Agreement, Nova Factor
shall generate the monthly and weekly reports from the Database as
specified in Schedule D to this Addendum.
5. *
---------------------
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities Exchange Commission.
6
5.2 *
6. PAYMENT
6.1 In consideration of the delivery by Nova Factor for Biogen of VCAP
Product to VCAP Participants under this Addendum, Biogen shall pay
to Nova Factor (i) a fee per unit of Paid VCAP Product (four dose
pack) shipped by Nova Factor to VCAP Participants equal to *, and
(ii) a fee of $* per unit of Free
VCAP Product (four dose pack) shipped by Nova Factor to VCAP
Participants, provided that the fee for the supply of Free VCAP
Product shall be reduced to $* per unit of Free VCAP
Product shipped commencing with the first quarter in which *
is $* or less. Nova Factor shall invoice Biogen at
the end of each month for amounts due hereunder with respect to
VCAP Product shipped during such month. Along with its invoice
Nova Factor shall submit to Biogen a report (the "VCAP Program
Report") specifying (i) the total quantity of Paid VCAP Product
shipped to VCAP Participants during the month, (ii) the total
quantity of Free VCAP Product shipped to VCAP Participants during
the month, (iii) the total amount billed and total amount
collected by Nova Factor during the month for Paid VCAP Product
and (iv) the amount then owing from VCAP Participants and third
party payors to Biogen on Paid VCAP Product. All amounts due from
Biogen shall be payable by check to Nova Factor in United States
funds. Payment by Biogen shall be due within * (*) days from
the date of invoice.
6.2 Within * (*) days of receipt of the VCAP Program Report,
Biogen shall issue to Nova Factor a credit in an amount equal to
the quantity of VCAP Product
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities Exchange Commission.
7
shipped during the month from Nova Factor's inventory under the
terms of this Addendum multiplied by the applicable Credit Price
for the month (as defined in the Distribution Agreement). Nova
Factor may apply credits under this Section against subsequent
purchases of Product under the Distribution Agreement. Credits may
not be assigned or transferred by Nova Factor to a third party,
and no cash payments shall be made on account of any credit. Nova
Factor shall not unilaterally apply any credit against or make any
deductions from payments due to Biogen without the prior written
approval of Biogen. Nova Factor shall apply credits on a first-in,
first-out basis.
6.3 Except as otherwise set forth herein, Nova Factor shall be
responsible for all costs and expenses associated with fulfilling
its obligations under this Agreement.
7. REPRESENTATIONS
---------------
Nova Factor shall not engage in any promotional activities with respect
to the * Program or the Variable Cap Program, other than
the distribution of literature approved by Biogen and other activities
expressly authorized by Biogen. Nova Factor shall not use any
promotional materials which refer to the * Program or the
Variable Cap Program unless such promotional materials have been approved
in writing in advance by Biogen. Any promotional literature or verbal
representations describing Nova Factor's role in the *
Program or the Variable Cap Program shall be approved in advance
in writing by Biogen.
8. TERMINATION
-----------
Biogen may terminate all or a portion of the Additional Services at any
time, upon forty-five (45) days' written notice to Nova Factor, without
terminating the entire Distribution Agreement, provided that
notwithstanding anything to the contrary contained in this Agreement,
Biogen may terminate further enrollment in the VCAP Program at any time
without prior notice to Nova Factor. After receipt of the termination
notice with respect to some or all of the Additional Services and during
the period thereafter ending six (6) months after such termination, Nova
Factor shall use reasonable efforts to cooperate with Biogen in ensuring
the smooth transition of the terminated services to a distributor
designated by Biogen.
9. DISTRIBUTION AGREEMENT
----------------------
The Additional Services to be provided by Nova Factor under this
Addendum shall be deemed to be services provided and obligations assumed
by Nova Factor under the terms of the Distribution Agreement, and,
except as expressly set forth herein, the terms of the Distribution
Agreement shall apply with full force and effect to such obligations and
the performance of such services.
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities Exchange Commission.
8
IN WITNESS WHEREOF, the parties have executed this Addendum on the date first
above written.
BIOGEN, INC.
By: /s/ Mark W. Leuchtenberger
-----------------------------------
Mark W. Leuchtenberger
Vice President--Marketing
and Sales
By: /s/ Darlene Romine
-----------------------------------
Darlene Romine
Director of National Accounts
NOVA FACTOR, INC.
By: /s/ Randy Grow
-----------------------------------
Title: President
9
SCHEDULE A
*
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities and Exchange Commission.
*
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities and Exchange Commission.
SCHEDULE B
*
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities and Exchange Commission.
*
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities and Exchange Commission.
SCHEDULE C
Form of status report from VCAP Administrator
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities and Exchange Commission.
VARIABLE CAP PROGRAM
PATIENT RECONCILIATION REPORT
PATIENTS REGISTERED AT COVANCE AS OF JUNE 23, 1997
- -------------------------------------------------------------------------------
Patient ID# Status
- -------------------------------------------------------------------------------
Patient Name 999 Denied by Phone: VCAP
- -------------------------------------------------------------------------------
Patient Name 998 Denied by Phone: VCAP
- -------------------------------------------------------------------------------
Patient Name 7271 Denied by Phone: VCAP
- -------------------------------------------------------------------------------
Patient Name 7157 Denied by Phone: VCAP
- -------------------------------------------------------------------------------
Patient Name 997 Denied by Phone: VCAP
- -------------------------------------------------------------------------------
Patient Name 901 Denied by Phone: VCAP
- -------------------------------------------------------------------------------
Patient Name 7237 Denied by Phone: VCAP
- -------------------------------------------------------------------------------
Patient Name 7144 Denied by Phone: VCAP
- -------------------------------------------------------------------------------
Patient Name 7093 Denied by Phone: VCAP
- -------------------------------------------------------------------------------
Patient Name 3487 In Process - VCAP Program
- -------------------------------------------------------------------------------
Patient Name 6987 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 7372 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 7383 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 996 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 3706 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 7307 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 6136 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 588 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 995 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 6917 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 7143 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 7373 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 6918 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 7393 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 6962 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 7329 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 7006 In Process: VCAP Program
- -------------------------------------------------------------------------------
Patient Name 7195 VCAP declined
- -------------------------------------------------------------------------------
Patient Name 4693 VCAP declined
- -------------------------------------------------------------------------------
Patient Name 902 VCAP declined
- -------------------------------------------------------------------------------
SCHEDULE D
*
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities and Exchange Commission.
*
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 406 under the Securities Act of 1933 and has been filed
separately with the Securities and Exchange Commission.