This GPO Membership Agreement (this "Agreement") is entered into by and between Afaxys Group Services, LLC, a wholly owned subsidiary of Afaxys, Inc. ("AGS") and the undersigned entity ("Member") as of the date set forth above (the "Effective Date"). AGS and Member will each be referred to individually herein as a "Party" and together as the "Parties."
Whereas, one of the purposes of AGS is to support the mission of health care providers and their ability to serve their clients with a broad range of affordable, high quality products and services including products manufactured and/or distributed by Afaxys Pharma, LLC that is also a wholly owned subsidiary of Afaxys, Inc. (the "Mission");
Whereas, AGS negotiates prices and terms for the purchase of necessary and appropriate products and services by those entities that choose, by executing this Agreement, to designate AGS as their group purchasing organization ("Members"); and
Whereas, Member desires to retain AGS as a group purchasing organization as of the Effective Date in accordance with the terms of this Agreement.
Now, therefore, the Parties hereby agree as follows:
AGS shall furnish group purchasing organization services to Member, including, for example, assessing the needs of Members and their patients, identifying quality products, preparing requests for proposals, analyzing responsive bids and negotiating Supplier Contract terms on behalf of the Members (the “Program”). Subject to the terms and conditions of this Agreement, Member hereby engages AGS as its group purchasing organization (“GPO”) to negotiate and enter into (i) purchase agreements with vendors, including manufacturers, distributors, or other third parties (“Suppliers”), and (ii) GPO participation agreements (collectively, such agreements are “Supplier Contracts”). For purposes of this Agreement, (i) the term “Supplier” shall also mean and include any supplier of a GPO with which AGS has entered into a Supplier Contract in the form of a participation agreement on behalf of Member as authorized above, and (ii) the term “Supplier Contract” shall also mean and include a Supplier’s Supplier Contract with such other GPO.
AGS shall negotiate and enter into Supplier Contracts on behalf of Member, pursuant to which Member on a non-exclusive basis (i) may purchase products and services available under those Supplier Contracts for use by Member, and/or (ii) participate in other GPOs or arrangements under which Member may be able to gain access to services or purchase products and services from Suppliers with which AGS does not have Supplier Contracts. Member hereby authorizes AGS, as the authorized agent for Member and in its name, to: (i) negotiate the terms of and enter into Supplier Contracts, and to cancel, amend or modify any Supplier Contracts as it deems necessary, advisable or appropriate; (ii) receive from Suppliers, third party organizations including other GPOs, distributors, and e-commerce companies, data relating to purchases of products and services under Supplier Contracts by Member and (iii) share in any administrative and other fees arising from any purchases made by Member pursuant to any Supplier Contract. Member acknowledges that AGS endeavors to negotiate with Suppliers to secure the most advantageous terms and conditions possible for the benefit of the Program’s membership as whole and that Member’s direct negotiation with Suppliers may undermine those efforts. Therefore, Member agrees that Member shall not enter into a direct contractual relationship with a Supplier without prior written approval of AGS. For the avoidance of doubt, Member may 1) directly enter into arrangements with other GPOs and suppliers that are not part of the Program, and 2) purchase products and services from a Supplier through other GPO programs.
(a) Disclosure. AGS and Afaxys Pharma, LLC (“Afaxys Pharma”) are wholly owned subsidiaries of Afaxys, Inc. AGS offers products in the Program that are marketed and distributed by Afaxys Pharma. Member acknowledges that AGS has advised Member that participation in the Program is in no way conditioned upon, or creates any commitment or requirement for Member to purchase any Afaxys Pharma products, or in any way, restricts Member from purchasing products from a Supplier that may offer products which compete with those distributed by Afaxys Pharma.
2. MUTUAL OBLIGATIONS
(a) Confidentiality. Each Party shall hold all confidential and proprietary information, including but not limited to the terms of this Agreement and the proposed and actual Supplier Contract prices and terms and conditions, in confidence and in accordance with any applicable provision of the Supplier Contracts and shall not disclose such information to any person or entity without the prior written consent of the other Party; provided, however, that the foregoing shall not apply to information which (i) is generally available to the public or was already known at the time of the disclosure, as evidenced by a Party’s written records, (ii) becomes available on a non-confidential basis from a source other than the other Party which source was not itself bound by a confidentiality agreement, (iii) is required to be disclosed by Law, or any governmental or regulatory authority provided that the disclosing party provides reasonable prior written notice of such disclosure and uses all reasonable efforts to minimize the extent of such disclosure. Each Party shall use confidential and proprietary information solely for that Party’s performance of this Agreement, and upon the termination of this Agreement, or at the request of the other Party, will return or destroy all materials containing any portion of the confidential and proprietary information. Provided however, that, one (1) copy of the Confidential Information may be retained for the sole purpose of monitoring a Party’s ongoing obligations under this Agreement, and there shall be no obligation to destroy any Confidential Information retained in a Party’s electronic computer storage systems or backups or archival storage thereto. The non-disclosing Party shall be entitled to injunctive relief to prevent a breach or threatened breach of this Section, in addition to all other remedies that may be available. This Section shall survive termination or suspension of this Agreement.
(b) Indemnification. To the extent permitted by Law, Each Party shall indemnify, defend and hold harmless the other Party, and its shareholders, directors, officers, agents, affiliates, employees, successors and assigns from and against any and all losses, claims, liabilities, shareholders, lawsuits, costs, damages, and expenses whatsoever, including reasonable attorneys’ fees and court costs, arising out of, incident to or in any manner occasioned by or attributable to: (a) the breach by the Party of any representation, warranty, covenant or obligation set forth in this Agreement; (b) any intentional or negligent act or omission by such Party, its employees, contractors or agents in the performance of this Agreement; or (c) any violation of any applicable Law.
(c) Compliance with Law. During the term of this Agreement, each Party will comply with all applicable federal, state or local constitutional provisions, laws, rules, regulations, ordinances, orders, judgments, or decrees issued or promulgated by judicial, governmental or regulatory authority (collectively, “Law”) applicable to the conduct of each Party arising out of, or related to, this Agreement, including, but not limited to those Laws regarding (i) reimbursement under any state or federal governmental payment program, including but not limited to any state Medicaid program and the federal Medicare program; (ii) engaging in any activities which are prohibited under federal Medicare and Medicaid statutes, 42 U.S. C. §§ 1320a-7, 1320a-7(a) and 1320a-7b, or the regulations promulgated pursuant to such statutes or related state or local statutes or regulations (including but not limited to the federal Anti-Kickback Statute); and (iii) Section 340B of the Public Health Service Act (42 U.S.C. § 340B(a)(4)). For purposes of clarification, the term “Law” includes any State constitution provision, law, statute, regulation, reported judicial opinion, or formal written opinion of a State attorney general that is required to preserve a state’s sovereign authority or right over a Member that is a State agency.
(d) Records/Audit. Each Party to this Agreement will maintain all information related to its performance under this Agreement in a current, detailed, organized and comprehensive manner and in accordance with customary industry practice and applicable Law. Each Party will maintain such records in readily accessible form, for a period of at least six (6) years from the applicable service date, or to the extent required by applicable Law, whichever is longer. Upon AGS giving Member reasonable notice, Member shall provide AGS reasonable access to such records to audit Member’s compliance under this Agreement or to assist AGS’ efforts to audit Suppliers.
(e) Exclusion. Each Party hereby represents and warrants to the other that (i) it is not currently excluded, debarred, or otherwise ineligible to participate in any federal health care program as defined in 42 U.S.C. § 1320a 7b(f) (“the Federal Healthcare Programs”); (ii) has not been convicted of a criminal offense related to the provision of health care items or services and not yet been excluded, debarred, or otherwise declared ineligible to participate in the Federal Healthcare Programs, and (iii) is not under investigation or otherwise aware of any circumstances which may result in the Party being excluded from participation in the Federal Healthcare Programs. This shall be an ongoing representation and warranty during the term of this Agreement, and each Party shall immediately notify the other of any change in the status of the representations and warranties set forth in this Section (the “Exclusion Notice”). Any breach of this Section by a Party shall give the other Party the immediate right to terminate this Agreement.
3. MEMBER OBLGATIONS
(a) Contract Participation. Active Supplier Contracts will be listed on AGS’ website, which will be updated by AGS from time to time. AGS will facilitate processes for Member to notify Suppliers of decisions to participate in and purchase under Supplier Contracts. AGS shall provide Member with a copy of all Supplier Contracts available for Member’s participation upon written request by Member. Each Supplier will determine Member’s eligibility to purchase under a Supplier Contract, and Member will purchase products and services directly from the applicable Supplier or the designated distributor under each Supplier Contract in which Member elects to participate. Member will be solely responsible for product payments and compliance with all other obligations in Member’s capacity as the purchaser under each such Supplier Contract. Accordingly, Member hereby releases and holds harmless AGS from any liability or claims whatsoever with respect to such actions and obligations of Member and the Suppliers.
(b) Anti-Kickback Compliance. Available at https://www.gpo.gov/fdsys/pkg/CFR-2011-title42-vol5/pdf/CFR-2011-title42-vol5-sec1001-952.pdf is a copy of 42 C.F.R. § 1001.952(h), the discount “safe harbor” regulation of the federal Anti-Kickback Statute 42 U.S.C. § 1320a-7b(b). With respect to its purchases under Supplier Contracts or Supplier rebates it receives from AGS or directly from Suppliers, Member agrees to comply with the terms of § 1001.952(h)(1), as it may be amended form time to time, and acknowledges notice of this regulation’s reporting and information provision obligations.
(c) Non-Diversion/Own Use. Member hereby represents that every purchase of a product subject to the requirements of § 340B of the Public Health Services Act (a “340B Product”) made by Member through any Supplier Contract shall be for Member’s ultimate consumption or “Own Use,” and not for resale, as defined in Abbot Labs v. Portland Retail Discount Druggist Association, Inc. (425 US 1, 1976), and its successor line of cases (“Own Use”). Member shall report any known breach of this Section immediately to AGS. In furtherance, but not in limitation of the foregoing, Member hereby agrees to the following regarding 340B Products at all times
(i) Access to Supplier Contracts is limited solely to Members, and Member will use all products purchased under all Supplier Contracts in which Member participates solely for Member’s own patients who meet all eligibility requirements under the Supplier Contract and all applicable Law. Member will not divert, deliver, transfer, distribute or sell any 340B Product purchased under any Supplier Contract to any wholesaler, distributer, or other person or entity without specific, written permission from AGS and the applicable Supplier.
(ii) In the event Member fails to comply with the provisions of this Section, Member shall be liable for all losses or costs incurred by AGS, the applicable Supplier, and any other applicable manufacturers and distributers, as a result of such failure, including but not limited to, the costs of lost sales or payments that the applicable Supplier and/or other manufacturer and distributor may need to pay to their respective partners on account of such failure. In addition, AGS may require repayment by Member of any and all payments or benefits provided herein.
(d) Member Representations. Throughout the term of this Agreement Member agrees: (i) to comply with all terms and conditions of this Agreement, (ii) to comply with all terms and conditions of the Supplier Contracts (and any local supplements or other contracts between Member and Supplier or third parties relating to the Supplier Contracts), that are consistent with Member’s obligations under applicable law, including without limitation, payment terms, eligibility requirements, own use requirements, liability provisions, and arbitration of dispute requirements, (iii) to remain duly licensed under applicable state law to engage in Member’s business, and certified to participate in the Medicare and Medicaid programs; (iv) to comply with all Laws applicable to its performance under this Agreement; and (v) to execute separate agreements or acknowledgements as requested by AGS or any particular Supplier evidencing Member’s agreement to comply with the terms of the relevant Supplier Contracts.
(e) Designated Representative. Member shall appoint a designated representative, (the “Representative”), with whom AGS’ employees or agents may confer regarding matters of operations pursuant to the Agreement and who will be responsible for responding to requests from, and providing information to, AGS, and maintaining a current roster of Member contacts in the Customer Relationship Manager software system, or a similar system, on the AGS website. The Representative will also provide AGS with accurate and current data on all of Member’s sites to which Member expects delivery of products purchased under Supplier Contracts, and the Representative will provide AGS with updated data in advance of any change to such data. Data provided shall include the title of the person responsible at the Member for the ordering of products and services under a Supplier Contract, main address, main telephone number of the location of the person responsible, basis for eligibility for 340B Products, and any additional information reasonably requested. No product will be shipped to any “Ship To” address that has not been prior-identified by the Representative.
The contact information of the Representative shall be as set forth below, which shall be updated by Member upon written notice to AGS.