Wholesale Agreement
This Wholesale Purchase Agreement (“Agreement”) is entered into on the Effective date(the “Effective Date”) by and between Supplier (Name), a Supplier state of incorporation corporation with its principal place of business located at the address set forth under its name on the signature page of this Agreement (“Supplier”), and Buyer (Name) (as hereinafter defined), with offices at Buyer (Address (multi-line)) (“Buyer”).
Whereas,
Supplier is in the business of manufacturing and/or marketing Product.
Buyer is a broad-line wholesale distributor of Product.
Supplier desires to appoint Buyer as an authorized distributor of Product manufactured and/or marketed by Supplier (the “Products”) and agrees to sell the Products to Buyer. Buyer desires to accept such appointment and agrees to purchase the Products from Supplier on the terms and subject to the conditions described in this Agreement.
Generic products are not the subject of this Agreement. If Supplier now or hereafter manufacturers and/or markets generic products and wishes to have Buyer distribute such generic products, Supplier and Buyer shall enter into a generic wholesale purchase agreement which shall include, but not be limited to, a commitment to pay satisfactory compensation to Buyer for its distribution and services.
Supplier and Buyer hereby agree as follows:
Appointment of Buyer.
Supplier hereby appoints Buyer as a non-exclusive, authorized distributor of the Products inDistribution territory, its territories and possessions, and Buyer hereby accepts that appointment on the terms and subject to the conditions described in this Agreement. As an authorized distributor, Buyer may purchase such quantities of the Products as Buyer deems necessary or appropriate to fill its customers’ orders from time to time, subject to the order cutback procedures described below. Buyer shall not be required to provide any particular level of promotion or marketing activities with respect to or on behalf of any of the Products and shall not be prohibited from providing customized promotional or marketing services with respect to any other products on or behalf of other suppliers.
Notwithstanding anything in this Agreement to the contrary, Buyer may purchase Products from a source other than Supplier in the following circumstances: (a) when directed to do so by an agency of the United States government, provided that Buyer distributes those Products so purchased only to that agency or (b) when required by emergency medical needs reflected in a federal, state, or local government official’s declaration, request or statement or upon specific request from a Final Dispenser to treat a patient’s emergency medical condition.
As used in this Section the term “Final Dispenser” means (i) entities and individuals, such as pharmacies, hospitals, physicians, and prescribers whose practice with respect to prescription pharmaceuticals is devoted to selling, dispensing, or administering such pharmaceuticals to individual patients or patients’ agents, (ii) chain pharmacy warehouses that exclusively supply affiliated retail pharmacies and/or individuals with prescriptions, and (iii) entities that use prescription pharmaceuticals for research and development or clinical trial’s, but such uses will require prior approval from the Supplier for distribution by Buyer.
Orders for the Products.
Buyer shall transmit orders for the Products to Supplier using a mutually acceptable automated order entry system or such other means as may be agreed upon by the parties. All of Buyer’s orders for the Products are subject to acceptance and approval by Supplier. Buyer shall have no obligation to accept automatic shipments of any Product.
If any of the Products are in limited supply or otherwise unavailable in the quantities requested by Buyer, supplier may elect to cutback Buyer’s order for such Product and instead allocate such limited supply availability among Buyer and Supplier’s other wholesaler customers in a commercially reasonable manner that does not place Buyer at a competitive disadvantage. Buyer acknowledges and agrees that Buyer shall have no claim or remedy against Supplier, in connection with any such allocation by Supplier.
Terms of Sale and Shipment.
Supplier shall sell the Products to Buyer at Supplier’s published wholesale prices (“WAC”) in effect on the date of Buyer’s orders. Supplier shall give Buyer notice at least WAC increase notice full business day prior to the effective date of an increase in WAC for any Product; provided, however, that any orders submitted by Buyer after receiving notice of a WAC increase will be at the increased WAC. Supplier shall deliver the Products F.O.B. to those distribution centers specified in Buyer’s orders or to such other locations as may be agreed upon by the parties in the case of drop shipment orders, in either such case, freight prepaid. Title and risk of loss to the Products shall remain with Supplier until shipment is received at the specified destination.
If Buyer requests special routing of a shipment which results in a higher transportation cost than would be incurred as a result of the routing selected by Supplier, then the extra cost incurred by Supplier shall be added to Supplier’s invoice. Buyer shall report any damage, defect, loss in transit, or other shipping errors promptly following Buyer’s discovery of the same. Any chargebacks (which are reductions in Buyer’s purchase price based on prices contractually established directly between Supplier and Buyer’s customers), rebates or promotional incentives shall be based on Supplier’s published wholesale price, without reduction for cash or off-invoice discounts, and shall be based on all purchases by Buyer, unless otherwise agreed upon by the parties.
All wholesale prices provided by Supplier are exclusive of taxes and each of the respective parties shall pay all applicable taxes, tariffs, duties or assessments other than taxes imposed on inventories of Products held by Buyer as assessed by taxing entities to the respective parties and arising out of the transactions contemplated under this Agreement.
Payment Terms.
Unless otherwise mutually agreed by the parties, all orders for the Products shall be invoiced by Supplier on the date shipped. Buyer shall pay Supplier’s invoices for Products in accordance with the due dates specified therein. In the event that a due date falls on a Saturday, Sunday or a federal holiday, Buyer may make payment on the next business day and still be entitled to the cash discount.
Notwithstanding the foregoing, Buyer shall not be required to remit payment to Supplier during any period of time in which Supplier carries a commercially unreasonable debt balance with Buyer (i.e., the total undisputed amount Supplier owes to Buyer as the result of chargebacks, product returns or any other transaction involving the Products exceeds the undisputed amounts Buyer owes to Supplier for invoiced Product purchases). Releasing payment for delivery to Supplier, whether through electronic means or the mail, constitutes making payment.
If Supplier establishes so-called “credit limits” for Buyer’s purchases, Supplier shall (a) promptly following the establishment of such limits and in any event not less than Credit limit notice business days prior to cutting back orders or otherwise acting upon such limits, give Buyer notice of the establishment of such limits, and (b) consult in good faith with Buyer as to the appropriateness of such limits in light of Buyer’s overall creditworthiness, sales growth rate, and other relevant factors.
If Buyer notifies Supplier that Supplier is carrying a debt balance, Supplier shall remit payments for such amounts to Buyer by check or wire transfer until such time that Buyer notifies Supplier that the debt balance has been eliminated; provided, however, that prior to requesting payment, Buyer and Supplier will work together to eliminate the Debt Balance through other means, including but not limited to, purchasing additional inventory, in order to eliminate and/or reduce the negative financial impact to Supplier.
Supplier shall, promptly following Buyer’s requests made from time to time during the term of this Agreement, provide Buyer with Supplier’s most recent year-end consolidated financial statements and quarterly year-to-date updates to such financial statements.
Buyer retains the right to withhold payments, setoff amounts owed to Supplier against amounts owed to Buyer, request a chargeback advance and/or cease its purchase relationship with Supplier based upon (a) Buyer not receiving payment for amounts owed to it under this Agreement, or (b) other credit considerations deemed relevant by Buyer. With respect to Buyer’s right of set-off, Buyer and its affiliates, parent or related entities, collectively or individually, may exercise a right of set-off against any and all amounts due Supplier, without in any way limiting its rights under law or in equity. For purposes of this provision, Buyer, its affiliates, parent and related entities shall be deemed to be a single creditor.
Inventory.
For purposes of this Agreement, Buyer’s then-current inventory shall include all inventory of Products held in Buyer’s distribution centers, all Products owned by Buyer located at any store owned or operated by a customer of Buyer and held by such customer on consignment, and all Products “in transit” to or from such distribution centers.
Returned Goods and Recalls.
Buyer shall have the right to return Products to Supplier for credit and Supplier shall process and provide appropriate credit to Buyer with respect to all Product returns, all in accordance with this Section 6 and the Supplier’s returned goods policy (“Returned Goods Policy”) in effect at the time of the return. A copy of the Returned Goods Policy in effect as of the Effective Date is attached hereto as Attachment 2 to this Agreement and incorporated herein. Buyer shall notify Supplier of its intent to return such Products to obtain return authorizations from Supplier. Such authorization shall not be unreasonably withheld by Supplier.
Except as provided otherwise in this Agreement, Buyer may return specific Products without limit, without regard to the remaining dating and without authorization under the following circumstances: (a) new Products during an agreed upon short period following their introduction; (b) Products discontinued by Supplier to the extent the then-current Product inventory is not sold after discontinuation; (c) Products that experience decreased market demand due to circumstances beyond Buyer’s control; and (d) all Products immediately upon termination of this Agreement between Supplier and Buyer. Should any of the circumstances specified in subsections (a)-(d) of this Section 6 occur, Supplier shall have the option to issue an additional period dating in which Buyer may return the Product. Third-party return companies shall be recognized as legitimate processors. These return guidelines shall be in effect for all Products originally purchased by Buyer from Supplier, exclusive only of specialty or promotional program purchases specifically exempted by mutual written consent of the parties.
Supplier shall reimburse Buyer, consistent with Healthcare Distribution Management Association guidelines, for the full amount of all reasonable costs and expenses incurred by Buyer in connection with Buyer’s performance of any recall services or assistance relating to the Products (unless such recall is due to the action or inaction of Buyer in which case such expense shall be borne by Buyer).
Contract Administration and Chargeback Procedures.
Buyer shall recognize and administer those contracts between Supplier and customers of Buyer pursuant to which Supplier and such customers have established prices at which the customers may purchase certain Products (each, a “Supplier Contract” and, collectively, “Supplier Contracts”), subject to the continued validity of Supplier Contracts in accordance with applicable law and to Buyer’s right to suspend such recognition as provided herein. Buyer’s Standard Policy on Chargebacks (the “Chargeback Policy”) in effect at the time of the chargeback shall govern the administration of Supplier Contracts under this Agreement. A copy of the Chargeback Policy in effect as of the Effective Date is attached hereto as Attachment 1 to this Agreement and incorporated herein. The Chargeback Policy may be amended by Buyer from time to time. If there is a dispute regarding Supplier Contracts administration and chargeback procedures that cannot be resolved in a timely manner, Buyer reserves the right to suspend the recognition and administration of such contracts until there is a mutually agreed upon resolution of the dispute.
Confidential Information.
During the course of operating under this Agreement, each party, its respective agents, employees and representatives (collectively, the “receiving party”) may receive or have access to confidential materials and information of the other party (the “disclosing party”). All such materials and information (including but not limited to information regarding Products, pipeline, operations, methods, strategies, formulas, price lists, discount programs, incentives, rebates, records of unit movement of Products, shipping and warehousing, and confidential proprietary information from third parties), are collectively referred to herein as “Confidential Information” and constitute the property of the disclosing party.
Confidential Information does not include, and the receiving party shall have no obligation hereunder with respect to, information that (a) was known to the receiving party before receipt, directly or indirectly, from the disclosing party; (b) is lawfully obtained by the receiving party from a third party who is under no obligation of confidentiality; (c) is or becomes publicly available other than as a fault of the receiving party; or (d) is developed by the receiving party independent of the Confidential Information disclosed by the disclosing party.
During the term of this Agreement and for a period of Confidentiality survival thereafter the receiving party shall not use or disclose to third persons any such Confidential Information without the disclosing party’s prior written consent, excepting those
disclosures made on a confidential basis to and use by the affiliates, directors, officers, employees, and agents of the receiving party who have a reasonable need to know such information in connection with the receiving party’s performance of this Agreement,
disclosures which are required by law, as reasonably determined by the receiving party or its legal counsel, or are made on a confidential basis to the receiving party’s attorneys, accountants, and other professional advisors in connection with matters relating to this Agreement, and
routine disclosures by Supplier in the normal course of business of aggregated warehouse withdrawals, sales and other data to IMS, DDD or other similar organizations. The existence of this Agreement and its terms and conditions are hereby designated as confidential and, notwithstanding anything in this Section to the contrary, shall be treated as Confidential Information subject to the obligations of the immediately preceding sentence for the term of this Agreement and for a period of Confidentiality survival thereafter.
Representations, Warranties and Indemnification.
Supplier hereby represents and warrants that, at the time of delivery to Buyer’s destinations designated in Buyer’s orders the Products are and shall be manufactured and delivered to Buyer in conformity with all applicable laws, rules, and regulations.
Supplier further represents and warrants that it is and throughout the term of this Agreement shall be an Authorized Manufacturer or Exclusive Distributor of the Products. For purposes of this Section, “Authorized Manufacturer” means a person or entity that (a) is authorized to engage in the manufacture, preparation, propagation, compounding, or processing, of the Products, as reflected in a registration with the applicable statute or (b) submits listing information for the Products directly to the authorities and has been assigned a Labeler Code; and “Exclusive Distributor” means, in cases where an Authorized Manufacturer does not currently, and has no current plans to, directly supply the Products to Buyer, the person or entity through whom the Authorized Manufacturer distributes or sells the Products.
If Supplier provides the Products to Buyer as an Exclusive Distributor, Supplier will also provide (x) documentation on the Authorized Manufacturer’s letterhead that indicates that the Authorized Manufacturer does not currently, and has no current plans to, supply the Products directly to Buyer and (y) documentation on Supplier’s letterhead that Supplier has and will only purchase the Products directly from the Authorized Manufacturer.
If Supplier acquires the rights as the Authorized Manufacturer of the Products, Supplier will provide written documentation to Buyer of the consummation of the acquisition to support sales of the Products.
Supplier shall defend, indemnify, and hold harmless Buyer and its affiliates, subsidiaries, directors, officers, employees and representatives from and against any and all third party claims, liabilities, losses, damages, costs, and expenses (including without limitation reasonable attorneys’ fees) arising directly or indirectly out of: (a) the breach of any representation or warranty set forth in this Section; (b) the fraud, intentional misconduct, omission or negligence of Supplier; (c) the manufacture, marketing, testing, shipping, sale, possession or use of the Products (including any claim, liability, loss, damage, cost or expense shown to be attributable to Buyer’s intentional misconduct or negligence in handling such Products); (d) “class of trade” pricing, if any maintained by Supplier from and after the effective date of this Agreement, including without limitation those arising out of Buyer’s administration of Supplier Contracts; and (e) any intellectual property infringement actions (including patent, trademark, service mark, copyright trade dress, trade secret and other proprietary rights) brought by a third party in connection with Buyer’s distribution of Products hereunder. The warranty and indemnification provisions of this Section shall survive any termination or expiration of this Agreement.
Buyer shall defend, indemnify, and hold harmless Supplier and its affiliates, subsidiaries, directors, officers, employees and representatives from and against any Claims, to the extent arising directly or indirectly out of (a) Buyer’s breach of this Agreement, or (b) the fraud, intentional misconduct or negligent act or omission of Buyer; provided that Buyer shall have no duty to indemnify, defend or hold harmless under this paragraph to the extent that Supplier, its affiliates, subsidiaries, directors, employees or representatives caused or contributed to the Claims or to the extent that Supplier is obligated to indemnify Buyer under the preceding paragraphs.
Neither party shall be liable to the other party for any incidental, indirect, punitive, consequential or special damages, including damages for loss of profits, loss of revenue or losses by reason of cost of capital, arising from or relating to any performance or lack of performance under this agreement, even if such damages were foreseeable or a party was advised of the possibility of such damages, and regardless of whether a claim is based on contract, tort, or violation of any applicable legal or equitable principle.
Insurance.
During the term of this Agreement and thereafter as may be necessary to cover claims associated with Products purchased by Buyer (whether arising or asserted before, during or after such term), Supplier shall obtain, pay for and maintain in full force and effect Product – Completed Operations Liability insurance with a per occurrence limit of not less than Insurance per occurence. In the event that these insurance policies are written on a claims-made basis, then the policy(ies) shall be maintained during the entire period of this Agreement and for a period of not less than Insurance tail coverage following the termination or expiration of this Agreement.
Supplier shall deliver to Buyer certificates evidencing the existence and continuation of such insurance immediately upon execution of this Agreement and upon Supplier’s periodic renewal of such policy. Such certificates shall contain the following language: “Buyer (Name) and its subsidiaries and affiliates are named as additional insured and the insurance evidenced by this certificate shall be considered primary and non-contributing to any Buyer (Name) insurance.” Such insurance shall include a provision requiring at least Insurance cancellation notice’ prior written notice to Buyer in the event of cancellation or material reduction of coverage.
Term and Termination.
The term of this Agreement shall commence on the Effective Date and continue in effect for a period of Initial term, thereafter automatically renewing for successive Renewal term renewal periods unless either party provides the other not less than Termination notice prior written notice of termination of the Agreement at the end of the then-current term.
This Agreement may also be terminated (a) by mutual written agreement of Supplier and Buyer at any time; (b) by the non-breaching party in the event of a breach of any of the terms of this Agreement that is not cured within Cure breach period following written notification of such breach to the breaching party; (c) by either party in the event of the institution (whether voluntarily or involuntarily) of bankruptcy, insolvency, liquidation or similar proceedings by or against the other party or the assignment of the other party’s assets for the benefit of creditors; or (d) by either party for any reason or without reason at any time by giving the other party not less than Convenience termination prior written notice of such termination.
Compliance With Laws.
Supplier shall comply with all federal, state and local laws and regulations applicable to its operations. Supplier represents, warrants and certifies that neither it nor its principals was or is debarred, suspended, proposed for debarment or otherwise determined to be ineligible to participate in federal health care programs or convicted of a criminal offense related to the provision of health care items or services, but has not yet been debarred, suspended, proposed for debarment or otherwise determined to be ineligible to participate in federal health care programs. In the event that Supplier, or any of its principals, is debarred, suspended, proposed for debarment or otherwise determined to be ineligible to participate in federal health care programs or convicted of a criminal offense related to the provision of health care items or services, Supplier shall notify Buyer immediately.
In addition, Supplier represents and warrants that it complies with all federal, state, local and other applicable laws, regulations, conventions or treaties prohibiting any form of child labor or other exploitation of children in the manufacturing and delivery of Supplier’s products or services.
Audit and Inspection.
During the term of this Agreement, upon reasonable prior notice of at least Audit notice business days and during normal business hours, either party shall be entitled to audit and inspect those relevant records that are maintained by the other party in direct connection with its performance under this Agreement. Audits and inspections performed pursuant to this Section shall be performed by any of: (a) bona fide, permanent employees of the party conducting such audit or inspection; (b) auditors from independent accounting firms of national recognition; or (c) such other representatives as the parties may mutually agree upon. In no event shall any such audit or inspection relate to any transaction or event which occurred more than Audit lookback prior to the date of such audit or inspection. Supplier chargeback audits shall be governed by the terms and conditions contained in the Chargeback Policy.
Supplier agrees that until the expiration of Record retention after the expiration or termination of this Agreement, Supplier shall, upon request, make available to the duly authorized representatives, this Agreement and all books, documents and records that are necessary to verify the nature and extent of the cost incurred by Buyer’s customers, and that if Supplier carries out the duties of this Agreement through its subcontract for Subcontract access clause or more over a Subcontract measurement period period, such subcontract shall also contain an access clause to permit access by the duly authorized representatives to the subcontracting organization’s subcontract and related books, documents and records.
Relationship of the Parties.
The parties to this Agreement are independent contractors. Nothing in this Agreement shall be construed as creating any other relationship, whether of employer and employee, partners, joint venturers, agents or otherwise.
Notices.
All notices pursuant to this Agreement (each a “Notice”) shall be in writing and shall refer specifically to this Agreement. Notices shall be given by personal delivery, delivery by a nationally-recognized overnight courier, fax, e-mail or first class mail (certified or registered, postage prepaid), sent to the respective address(es) set forth below or to such other address(es) as Supplier or Buyer may specify as its notice address by notice given in accordance with this Section.
Except as may otherwise be provided in this Agreement, Notices are deemed to be given as follows: (a) when personally delivered, upon receipt as indicated by the date on the signed receipt, (b) when faxed, upon receipt by the sender of a transmission report generated by the transmitting machine indicating that the fax was sent in its entirety, (c) when sent by e-mail, on the date sent so long as the e-mail was sent by Email notice Email time zone time (transmissions after such time will be deemed to have been given the following day) and the sender does not receive a delivery error (i.e., a “bounced” message), (d) when sent by a nationally-recognized overnight courier (e.g., UPS, FedEx) on the date designated by the sender for delivery when sent, (e) when sent by first class certified or registered mail, three days after the sender mails them.
Supplier shall send Notices to Buyer at the following address:
Buyer (Name)
Buyer notice address
Attention: Buyer notice contact
E-Mail: Buyer notice email
Buyer shall send Notices to Supplier at the following address:
Supplier (Name)
Supplier notice address
Attention: Supplier notice contact
E-Mail: Supplier notice email
Governing Law.
This Agreement shall be interpreted in accordance with, and governed by, the laws of the State of Governing law, without regard to its conflict of laws principles.
Severability.
The invalidity of all or part of any provision of this Agreement shall not affect the validity of any other provision of this Agreement or the remaining portion of the applicable provision.
Force Majeure.
Neither party shall be liable for delay in delivery or nonperformance, in whole or in part, nor shall the said party have the right to terminate this Agreement where delivery or performance has been affected by a condition of force majeure unless such delivery or performance is delayed for Force majeure delay or more. For purposes of this Agreement, force majeure means a condition which results from causes beyond a party’s reasonable control, including, but not limited to acts of God, acts of the other party, shortages, fires, labor disputes, strikes, floods, epidemics, quarantines, war, riot, delay in transportation, compliance with any applicable governmental regulation or order, whether or not it later proves to be invalid, or inability to obtain labor, materials or manufacturing facilities.
If either party is affected by a force majeure event, such party shall promptly, but not later than Force majeure notice of its occurrence, give notice to the other party stating the nature of the event, its anticipated duration and any action being taken to avoid or minimize its effect. The suspension of performance shall be of no greater scope and no longer duration than is reasonably required and the non-performing party shall use its best efforts to remedy its inability to perform.
Entire Agreement.
This Agreement constitutes the entire agreement between the parties and supersedes all prior contracts, agreements and understandings between the parties, whether written or oral, with regard to the subject matter hereof (that being the purchase by Buyer from Supplier of Products for redistribution) and supersedes all prior or contemporaneous discussions, negotiations representations, warranties, and agreements relating thereto. This Agreement may not be amended, except by a writing signed by authorized representatives of the parties hereto. No waiver of any right or remedy under this Agreement shall be effective unless it is in a writing signed by an authorized representative of the party to be charged therewith. The failure of Supplier or Buyer at any time to require performance of the other of any provision of this Agreement shall in no way affect its right thereafter to require performance of the other of such provision, nor shall such failure be held to be a waiver of any succeeding breach of such provision or a waiver of such provision itself.
Assignment.
Neither party may assign this Agreement to any third party without the prior written consent of the other party. Notwithstanding the foregoing, no consent is needed in connection with a merger, acquisition, the sale of all or substantially all of the assets, or in connection with the grant of a security interest herein to a financial institution.
Publicity.
Supplier shall not use Buyer’s name, or any abbreviation thereof, or any Buyer logo, or any adaptation thereof, in any advertising or trade displays, or for any other commercial purpose, without Buyer’s prior written consent. Neither party shall make any press release or other public announcement regarding this Agreement without the other party’s express prior written consent, except as required under applicable law or by any governmental agency, in which case the party required to make the press release or public disclosure shall use commercially reasonable efforts to obtain the approval of the other party as to the form, nature and extent of the press release or public announcement prior to issuance. Without limiting the generality of the foregoing and notwithstanding anything to the contrary, Supplier shall provide Buyer’s Chief Legal Officer, Legal Department, with a written copy of any such press release or other public announcement no less than Press release review hours prior to the intended issuance of such release or announcement.
Limitation of Liability.
Except as related to any duties pursuant to the indemnification and insurance provisions herein, neither party shall be liable for any indirect, special or consequential damages, even if it is advised of the possibility of such damages.
In Witness Whereof, the parties hereto have duly executed this Agreement as of the day first above written.
Supplier (Name)
Supplier signatory name
Supplier signatory title
Buyer (Name)
Buyer signatory name
Buyer signatory title
