Sample Business Contracts

Distribution Services Agreement - Celgene Corp. and Ivers Lee Corp. d/b/a Sharp

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                               CELGENE CORPORATION


                              IVERS LEE CORPORATION

                                 JUNE ___, 2000



         This Agreement entered into this ___ day of ___ 2000_, by and between
Celgene Corporation, a Delaware corporation ("CELGENE"), and Ivers Lee
Corporation, a Delaware corporation doing business as "Sharp" ("SHARP").

         WHEREAS, CELGENE manufactures, markets and distributes the
pharmaceutical product ThalomidTM (the "Product"); and

         WHEREAS, SHARP is in the business of providing distribution services
for pharmaceutical products at its facility in West Caldwell, New Jersey (the
"SHARP Facility"); and

         WHEREAS, CELGENE desires to engage SHARP to provide distribution
services with respect to the Product, and SHARP desires to be engaged to provide
such services.

         NOW, THEREFORE, in consideration of the promises, covenants, agreements
and other valuable consideration hereinafter set forth, the parties hereto
hereby agree as follows:


As used in this agreement, the following words and phrases shall have the
following meanings:

(A)      "FDA" shall mean the United States Food and Drug Administration, or any
         successor entity thereto.

(B)      "Act" shall mean the United States Food, Drug and Cosmetics Act, as
         amended, and rules and regulations promulgated thereunder.


This Agreement shall be in effect for an initial term of three (3) years (the
"Initial Term"), if not earlier terminated according to Article 5 of this
Agreement. The term of this Agreement shall automatically renew for successive
one-year periods unless either party hereto gives the other notice of
non-renewal hereof at least six months prior to the expiration of the Initial
Term or any one-year renewal period, as the case may be.



3.01     CELGENE hereby engages SHARP and SHARP hereby accepts the engagement by
         CELGENE, to provide the services hereinafter described on the terms,
         and subject to the conditions set forth in this Agreement.

3.02     SHARP will, as agent for CELGENE, process Product sales orders, ship
         Product and process Product returns. Without limiting the generality of
         the preceding sentence, SHARP will

         (a) dedicate at least 2,000 square feet at the SHARP Facility for the
         warehousing of Product, the processing of sales orders for Product and
         the processing of Product returns;

         (b) dedicate at least five full-time SHARP employees to provide the
         services described herein;

         (c) provide storage space at the SHARP Facility for 38 pallet

         (d) provide perpetual tracking of Product inventory by lot number
         within SHARP's inventory system; and

         (e) provide supervision of the destruction of returned and expired

3.03     CELGENE will provide SHARP remote access to CELGENE's validated sales
         order processing system, and the computer equipment to be described on
         Schedule 3.03 hereto for the purpose of such access and to enable SHARP
         to report on a daily work-day basis to CELGENE. SHARP acknowledges that
         any and all information equipment, inventory or other items provided to
         SHARP pursuant to this Agreement shall be and remain the exclusive
         property of CELGENE, shall be used by SHARP solely for the purpose of
         rendering the services provided for hereunder and shall be returned
         promptly by SHARP to CELGENE upon termination of this Agreement,
         without SHARP having retained any copy thereof.


4.01     For all services to be rendered by SHARP to CELGENE hereunder, CELGENE
         shall pay SHARP the fees set forth on Schedule 4.01 hereto at the times
         also described in such Schedule.

4.02     Freight charges will be billed directly to CELGENE by carriers.

4.03     Additional charges due to volume demand, changes required by Celgene,
         and/or annual inflation/wage increases, to be mutually agreed upon.
         Reductions in charges due to volume decline or other similar factors,
         are to be negotiated in good faith and mutually agreed upon.



5.01     Upon the occurrence of the following events, either party may terminate
         this Agreement by giving the other party sixty (60) days prior written

         (a) If the other party is unable to pay its debts, becomes bankrupt or
         insolvent or enters into liquidation whether compulsory or voluntary,
         or compounds with or convenes a meeting of its creditors, or has a
         receiver appointed overall or part of its assets, or takes or suffers
         any similar action in consequence of a debt, or ceases for any reason
         to carry on business; or

         (b) Upon the breach of any material provision of this Agreement by the
         other party if the breach is not cured within thirty (30) days after
         written notice thereof to the party in default and the material breach
         continues to exist at the time of notice of termination.

5.02     (a) CELGENE may terminate this Agreement at any time by giving sixty
         (60) days written notice to SHARP, if CELGENE, in its sole discretion,
         determines that it will no longer market Thalomid or if the FDA
         withdraws approval of the manufacture or marketing of Thalomid. CELGENE
         may terminate this agreement if the FDA or any other regulatory agency
         that regulates Thalomid takes any action the result of which is to
         prohibit the manufacture, sale or use or any similar action of the drug
         product or any raw material contained therein or to impose significant

5.03     The Agreement may be terminated Pursuant to Article 2, which provides
         for termination, by notice from either party, upon expiration of the
         Initial Term or any one-year renewal period.

5.04     Termination, expiration, or cancellation of this Agreement through any
         means and for any reason shall not relieve the parties of any
         obligation accruing prior thereto, including but not limited to the
         confidentiality provisions herein and the obligation to pay money, and
         shall be without prejudice to the rights and remedies of either party
         with respect to the antecedent breach of any of the provisions of this
         Agreement. During the term of this Agreement and for a period of five
         years thereafter, both parties hereto, subject to applicable laws,
         shall maintain in confidence all information received from the other
         party resulting from or related to the matters contemplated by this


SHARP represents and warrants to, and covenants with, CELGENE that it shall
render its services hereunder in compliance with all applicable laws and
regulations, including, but not limited to, those dealing with occupational
safety and health, those dealing with public safety and health, those dealing
with protecting the environment, and those dealing with disposal of wastes.



7.01     CELGENE shall indemnify and hold SHARP, its officers, directors,
         agents, servants, and employees harmless against all claims, losses,
         damages and liabilities, including reasonable legal expenses, arising
         out of CELGENE'S duties under this Agreement, and which are not
         attributable to:

                (i)        the negligence of SHARP or its agents or employees,

                (ii)       the failure of SHARP to follow the written
                           instructions and specifications of CELGENE; or

                (iii)      SHARP's breach of this Agreement.

         SHARP shall not settle any such claim without the prior written
         approval of CELGENE and CELGENE shall have the right, if it so wishes,
         to conduct negotiations to settle, settle or conduct any litigation
         arising out of, any such claim. SHARP shall provide prompt notice of
         any claim to CELGENE and shall cooperate in the defense of the claim.

7.02     SHARP shall indemnify and hold CELGENE, its officers, directors,
         agents, servants, and employees harmless against all claims, losses,
         damages, and liabilities including reasonable legal expenses, arising
         out of SHARP's duties under this Agreement and which are not
         attributable to:

                  (i)      any act or negligence of CELGENE or its agents or

                  (ii)     the failure of CELGENE or its employees to comply
                           with applicable law or regulations, or

                  (iii)    Celgene's breach of this Agreement.

         CELGENE shall not settle any such claim without the prior written
         approval of SHARP, and that SHARP shall have the right, if it so
         wishes, to conduct negotiations to settle, settle or conduct any
         litigation arising out of, any such claim. CELGENE shall provide prompt
         and written notice of any such claim to SHARP and shall cooperate in
         the defense of the claim.

7.03     The indemnification obligations set forth in this Article 11 shall
         survive the termination of this Agreement.



8.01     SHARP will notify CELGENE within twenty-four (24) hours of notification
         of any pending or ongoing FDA or government inspection related to
         Thalomid. SHARP shall immediately provide copies of any Form 483
         warning letter observations, or associated correspondence to and
         received from the FDA within two (2) work-days of receipt and in
         addition shall provide a facsimile copy within twenty-four (24) hours
         to CELGENE

         SHARP shall allow CELGENE to assist in any response to the FDA,
         including review of any written response made to the FDA by SHARP at
         CELGENE'S discretion.


9.01     In performing distribution of Thalomid hereunder, SHARP shall permit
         CELGENE and/or its designated representative to inspect on a regular
         basis or as needed, but not less than once per year that portion of
         SHARP Facility to evaluate SHARP's work practices, supporting systems,
         documents and records associated with Thalomid and make such copies of
         the documents as reasonably necessary for the purpose of assessing
         SHARP's compliance with applicable regulations. Additionally, SHARP
         shall from time to time permit CELGENE and/or its designated
         representative access to the SHARP Facility for the purpose of
         confirming Product inventory on hand, as and when such confirmation is
         determined to be appropriate by CELGENE's external auditors. All such
         reviews shall be conducted upon reasonable prior notice by CELGENE.

9.02     SHARP shall keep CELGENE fully informed of the steps taken by SHARP to
         resolve any outstanding issues with the FDA and the anticipated
         timetable of resolution of such issues as it applies to Thalomid.


10.01    This Agreement may not be assigned or transferred by SHARP without the
         prior written consent of CELGENE. In the event there is a change of
         control of SHARP or its business, this Agreement will remain in effect
         and bind the acquiror.


11.01    Any court proceeding initiated by one party against the other with
         respect to any dispute under this Agreement shall be commenced in the
         United States District Court for the Eastern District of New Jersey.
         This Agreement will be governed by, and construed in accordance with,
         the laws of the State of New Jersey.



12.01    Any delay in the performance of any of the duties or obligations of
         either party (except the payment of money due hereunder) shall not be
         considered a breach of this Agreement and the time required for
         performance shall be extended for a period equal to the period of such
         delay; provided that such delay has been caused by or is the result of
         any acts of God, acts of the public enemy, insurrections, riots,
         embargoes, labor disputes, including strikes, lockouts, job actions, or
         boycotts, equipment failure, fires, explosions, floods, shortages of
         material or energy or other unforeseeable causes beyond the reasonable
         control and without the fault or negligence of the party so affected.
         The party so affected shall give prompt notice to the other party of
         such cause, and shall take whatever reasonable steps are necessary to
         relieve the effect of such cause as rapidly as reasonably possible. Not
         withstanding the forgoing, if SHARP is unable to perform for any of the
         above enumerated reasons, CELGENE shall be relieved of its obligations
         hereunder during the pendency thereof, and if such inability of SHARP
         to perform continues for a period longer than one week, CELGENE shall
         have a right to terminate this Agreement.


13.01    In the event that any provision of this Agreement is judicially
         determined to be void or unenforceable, such provision shall be
         construed to be separable from the other provisions of this Agreement
         which shall retain full force and effect.


14.01    All titles and captions in this Agreement are for convenience purposes
         only and shall not be of any force or substance.


15.01    Except as expressly required pursuant to the Act, neither party will
         without the prior written consent of the other: (a) use in advertising,
         publicity, promotional premiums or otherwise, any trade name,
         trademark, trade device, service mark, symbol, or any abbreviation,
         contraction or simulation thereof owned by either party, or (b)
         represent, either directly or indirectly, that any product or service
         of one party is a product or service of the other.


16.01    Each party is acting under this Agreement as an independent contractor
         and not as the agent or employee of the other. Each party understands
         and agrees that it has no authority to assume any obligation on behalf

         of the other party and that it shall not hold out to third parties that
         it has any authority to act on the other party's behalf except as
         expressly permitted herein. Unless otherwise expressly stated herein,
         each party shall be responsible for its own expenses relating to its
         performance under this Agreement and shall not incur expenses for the
         other party's account unless expressly authorized herein or by
         subsequent written agreements.


17.01    No waiver or modification of any of the terms of this Agreement shall
         be valid unless in writing and signed by an authorized representative
         of both parties hereto. Failure by either party to enforce any rights
         under this Agreement shall not be construed as a waiver of such rights
         nor shall a waiver by either party in one or more instances be
         construed as constituting a continuing waiver or as a waiver in other


18.01    Neither party shall disclose to any third party or originate any
         publicity, news release or public announcement, written or oral,
         whether to the public or the press, or otherwise, referring to the
         terms of this Agreement, including its existence, the subject matter to
         which it relates, the performance under it or any of its specific terms
         and conditions, except by such announcements as are (i) mutually agreed
         upon by the parties in writing, or (ii) in the opinion of counsel for
         the party making such announcement are required by law. If a party
         believes a public announcement to be required by law with respect to
         this Agreement, it will give the other party such notice as is
         reasonably practicable and an opportunity to comment upon the


19.01    Unless otherwise specified herein, all notices required or permitted to
         be given under this Agreement shall be in writing and shall be
         delivered either personally and promptly confirmed by such registered
         or certified mail or overnight courier service or sent by registered or
         certified mail, return receipt requested, or by overnight courier
         service, postage prepaid in each case, or by facsimile and promptly
         confirmed by such registered certified mail or overnight courier
         service to the receiving party at such party's address set forth below,
         or at such other address as may from time to time be furnished by
         similar notice by either party. Any notice sent by registered or
         certified mail as aforesaid shall be deemed to have been given when
         mailed, and shall be effective upon receipt.


         IF TO SHARP:

         Ivers Lee Corporation
         147 Clinton Road
         West Caldwell, New Jersey  07006

         IF TO CELGENE:

         Celgene Corporation
         7 Powder Horn Drive
         Warren, New Jersey 07059 U.S.A.

or to such other address as the addressee shall have last furnished in writing
to the addresser.


20.01    This Agreement constitutes the entire agreement between the parties
         with respect to the subject matter hereof, and supersedes all written
         or oral agreements or understandings with respect thereto.

20.02    Neither party shall claim any amendment, modification, or release from
         any provision, hereof, unless such an amendment is in writing signed by
         an authorized representative of each party.


By:__________________________                        By:________________________
Name:                                                Name:
Title:                                               Title:
Date:                                                Date: