Standard Terms of Sale

1.  Acceptance and Agreement.  ProPharma Distribution, LLC (“Company”) reserves the right to accept or reject any order, in whole or in part, placed by a customer (“Customer”).  By accepting Company’s delivery of product(s), Customer agrees that the version of these Standard Terms (the “Agreement”) then in effect shall govern the transaction.  Customer further agrees that no different or additional terms proposed by Customer – including any terms contained in a purchase order from Customer – shall be effective unless Company agrees in writing to modify this Agreement.  Orders may be cancelled or modified only with Company’s written consent, and may be subject to Customer reimbursing any costs incurred by Company.

2.  Payment and Credit Terms.  Prices may change at any time without notice.  Unless Company agrees otherwise in writing, prices billed are prices in effect or quoted at the time of Customer’s order.  Customer agrees to tender timely payment in full to Company hereunder, regardless of reimbursement by any insurer or other third party.  Upon credit approval, net payments are due within the time stated in the invoice.  As a condition of credit approval, Company may require a Customer credit card on file to pay any past due account balances (among other potential conditions).  If credit is declined, Customer must pay Company in full prior to or upon product delivery.  Any returned payments shall be subject to Customer paying returned check fees, state surcharges, and incidental costs.  Amounts outstanding for 30 days or more shall accrue interest at 1.5% per month (18% A.P.R.).  Overdue balances paid by credit card may be assessed a three percent (3%) late charge.  If Customer’s account balance has been outstanding for 60 days or more, Company shall have the right, in its sole discretion, to accelerate and demand payment in full and/or suspend or terminate Customer’s account and refer it to collections. 

3.  Taxes and Other Charges.  Customer shall pay all taxes, fees, charges, penalties, costs and interest (collectively “Taxes”) assessed by any governmental authority in connection with products acquired from Company, including paying any required sales tax on products purchased from Company, unless Customer provides a certificate of exemption to Company.  In the event that Company is required to pay any Customer Taxes, Customer shall indemnify and reimburse Company in full.

4.  Discounts and Cost Reporting.  Customer acknowledges that it may be required by law (a) to disclose, in cost reports or claims for payment submitted to federal and/or state healthcare insurance reimbursement programs, the cost of any product acquired from Company, including any discounts, rebates, adjustments in price, or other price concessions (collectively, the “Discount”); and (b) upon request, to provide to the U.S. Department of Health and Human Services or other authority any invoices, coupons, statements or other documentation reflecting such Discount.  If Company’s invoice prices are subject to any Discount (which may be reflected on other documentation), Company shall apply the Discount to products sold hereunder, and in turn, Customer shall comply with any “anti-kickback” and/or anti-fraud laws requiring Customer to report or disclose, and to retain and provide documentation of, such Discount to federal and state healthcare programs or third-party payers, including, without limitation, Section 1128(b)(3)(a) of the Social Security Act and the regulations set forth in 42 C.F.R. § 1001.952(h).  Under such regulations, Customer is a “buyer” and must comply with all applicable requirements.  Customer agrees to retain a copy of the invoice and any other documentation provided by Company on any Discount, and Customer acknowledges that it may be required to disclose as a Discount any product valued on an invoice at $0.00.

5.  Controlled Substances.  To be eligible to purchase controlled substances, Customer must complete Company’s Controlled Substance Evaluation Program (“CSEP”) application, provide current copies of all required DEA and state licensure, and receive final CSEP approval from Company’s Compliance Department.  Company reserves the right to deny CSEP approval to Customer for any reason or no reason, in Company’s sole discretion, and even if such approval is granted, Customer understands and agrees that Company has the authority to refuse, cancel or reduce orders for controlled substances at any time and for any reason or no reason whatsoever.  Customer further understands and agrees that Company may report such orders as suspicious and/or excessive, in Company’s sole discretion, to regulators or law enforcement, without notice to Customer.

6.  Legal Compliance.  For purposes of this Agreement, Customer represents and agrees that Customer shall: (a) reasonably comply with all local, state and federal laws to maintain in good standing Customer’s professional licensure and other authorizations to conduct business, and to lawfully possess, use, administer and/or dispense prescription drug products, including, without limitation, the Food, Drug & Cosmetic Act (“FDCA”), the Drug Supply Chain Security Act (“DSCSA”) and their implementing regulations; (b) maintain all licenses, permits and/or registrations, and comply with any applicable FDA reporting requirements, as required to be “authorized” to engage in prescription drug product transactions with Company under the DSCSA; (c) order prescription drug products for each of its facilities and practitioners only insofar as they remain licensed in good standing and otherwise authorized to possess, use, administer and/or dispense such products for legitimate medical purposes; (d) comply with all recordkeeping, drug verification, and other obligations imposed by law, including those set forth in the DSCSA and any implementing regulations; (e) not re-sell, distribute, export or dispose of any products subject to this Agreement contrary to any applicable U.S. export laws and regulations, including but not limited to embargoed countries and anti-boycott regulations; (f) not engage in any fraud or diversion with respect to products acquired from Company under this Agreement; and (g) notify Company in writing as soon as Customer is aware of any governmental action or private lawsuits pertaining to any products acquired from Company. 

7.  Transaction Documentation and Confidentiality.  Company maintains all product transaction records or “T3 Statements” required by the DSCSA for at least six (6) years, including records of all regulated transactions with Customer.  As a condition of this Agreement, except where Customer is required by law to disclose T3 Statements in connection with a subsequent product transaction or to federal or state governmental authorities (including the FDA) for purposes of a product investigation or recall, or is otherwise legally compelled to disclose such information, Customer shall refrain from disclosing Company’s T3 Statements or any information contained therein to third parties, including other suppliers/competitors, trade groups, group purchasing organizations/GPOs, pharmacy benefit managers/PBMs, outside management groups, or any other outside affiliate or partner of Customer.  To discharge its duties, Customer acknowledges and agrees that: (a) Company and its employees maintain information on Company’s suppliers as confidential and proprietary trade secrets, as defined in applicable Colorado and federal laws, and some of this trade secret information on Company’s supply channels is contained within T3 Statements; (b) Customer shall protect the confidentiality of any Company T3 Statements disclosed to or otherwise received by Customer with at least the same degree of care as Customer accords its own proprietary information (and in any event, no less than a reasonable standard of care); (c) Customer shall not use such information to solicit or attempt to solicit, directly or indirectly, the business of any of Company’s suppliers or partners, nor solicit or attempt to solicit the services of any of Company’s employees, or otherwise convince them to leave their employment with Company; and (d) Customer shall restrict access to such information to only those employees, agents or other representatives of Customer who (i) have a need to know such information for purposes of their job duties for Customer (including tax, accounting or legal advisors retained by Customer), and (ii) are bound by a written confidentiality/non-disclosure contract at least as restrictive as this Agreement.  This duty of confidentiality shall survive the termination of this Agreement indefinitely as to Company trade secrets, and otherwise, for three (3) years following termination.  If Customer receives any subpoena, warrant, court order or other request to compel disclosure of T3 Statements, Customer shall promptly notify Company, cooperate with Company, and permit Company to intervene in any legal proceedings. 

8.  No Warranties and Limited Liability.  Company grants no warranties, express or implied, in connection with this Agreement, and hereby disclaims all warranties whatsoever to the maximum extent permitted by law, including, without limitation, all warranties of merchantability, fitness for a particular purpose, or non-infringement with respect to any products delivered hereunder.  Company does not manufacture the products that may be sold hereunder and, therefore, offers no product warranties in connection with such products.  Under no circumstances shall any verbal or written statements or information provided by Company, or its employees, agents or other representatives, ever create any warranties hereunder.  Total damages recoverable against Company shall not exceed, and shall be exclusively limited to, the purchase price of the products, in whole in in part, in relation to which such damages are claimed.  In no event shall Company be liable for any special, punitive, exemplary, incidental or consequential damages, including, without limitation, any lost data or profits, or increased costs to procure substitute products or services, regardless of the form of the action, whether in contract, tort or otherwise, and even if Company has been advised or is otherwise aware of such possibility. 

9.  Insurance and Indemnification.  Customer agrees to maintain, at its sole cost, liability insurance in commercially reasonable amounts while this Agreement is in effect.  Upon receipt and acceptance of product from Company, Customer is responsible for the proper handling, use, and/or disposition of such products.  To the fullest extent permitted by law, Customer agrees to indemnify, defend and hold harmless Company, its subsidiaries, affiliates, partners and parents, their successors and assigns, and each of their past and present directors, officers, representatives, employees and contractors, jointly or severally, from and against any and all third-party claims, lawsuits, losses, damages, liabilities and/or judgments, including, without limitation, reasonable attorney’s fees and expenses (collectively “Damages”), that Company may incur in connection with or related to Customer’s improper handling, use, and/or disposition of any products acquired from Company hereunder; provided, however, Customer shall not be liable for any Damages caused solely by Company’s gross negligence or willful misconduct.

10.  Governing Law and Dispute Resolution.  This Agreement shall be interpreted in accordance with the laws of the State of Colorado, without regard to its conflict of laws principles.  In the event of any breach of or other dispute arising under or related to this Agreement, the Parties agree to initially seek to resolve their differences by good faith negotiation between representatives from each Party with the respective authority to resolve the dispute fully and finally on behalf of the Party they represent.  If informal settlement negotiations fail, the Parties may, by voluntary written agreement, pursue formal mediation of the dispute before the Judicial Arbiter Group (JAG) in Denver, Colorado, in which case each Party shall pay one-half of the costs of mediation and their own attorney’s fees (if any).  Notwithstanding the foregoing settlement/mediation provisions, nothing herein shall preclude either Party from seeking emergency relief from any court to maintain the status quo pending a resolution of such settlement/mediation.  If formal mediation fails or is undesirable, Customer consents to the jurisdiction of the state and federal courts located in the State of Colorado, and to the venue of Broomfield County, Colorado for any state-court action, to resolve any disputes between the Parties arising under or related to this Agreement, including any breach of the terms of this Agreement; provided, however, that for purposes of collecting any sums due and owing by Customer hereunder, Company shall have the option, in its sole discretion, to alternatively file suit in a different jurisdiction at the site of any alleged breach or wrong by Customer, including Customer’s business location, subject to the application of Colorado law in such lawsuit.  In the event that Customer breaches this Agreement, and legal action becomes necessary to collect overdue sums due and owing from Customer hereunder, Company shall be entitled to recover its reasonable attorney’s fees and costs from Customer.

11.  Miscellaneous.  (a) These Standard Terms may be modified at any time by Company, in its sole discretion, without notice to Customer.   As a condition of ordering from Company, Customer shall be required to agree in writing at the time of confirming any order that the current version of Company’s Standard Terms shall govern the transaction.  Company’s current Standard Terms can be viewed online at www.propharmausa.com/standardterms.  (b) This Agreement constitutes the entire agreement and understanding of the Parties with respect to its subject matter, and supersedes all prior oral or written agreements of the Parties.  Customer hereby confirms that it has not been induced to purchase products from Company by any statement or representation not set forth in this Agreement.  (c) This Agreement may be modified only in writing as mutually signed by the Parties.  (d) Customer may not assign this Agreement, in whole or in part, unless Company consents in writing.  (e) Any waiver of an individual provision of this Agreement shall not constitute a waiver of its future enforceability or that of any other provisions of this Agreement.  (f) If any provision(s) of this Agreement is held to be unenforceable, then such provision(s) shall be severed from this Agreement and all remaining provisions shall continue in full force and effect and be construed consistent with the Parties’ intent to the fullest extent permitted by the law.  (g) This Agreement is not intended to benefit any third parties, and does not create any agency, partnership, trust, or joint venture between Company and Customer, or confer upon Customer any license, express or implied, under any proprietary or intellectual property rights owned and/or controlled (including licensed) by Company.  The Parties are independent contractors.  (h) This Agreement may be terminated by either Party without cause upon 30 days’ written notice, and if Customer breaches this Agreement or becomes insolvent, Company may terminate immediately upon written notice; provided, however, that termination shall not relieve Customer of any continuing obligations, including, without limitation, the obligation to pay any outstanding balance owed hereunder.  (i) Any notice hereunder shall be in writing and delivered in person, or by first class mail or recognized delivery service.

 

Standard Terms of Shipping, Delivery. and Product Returns

1. .  Company ships to the 48 contiguous states, as well as Alaska and Hawaii.   Unless Customer requires expedited delivery, orders are shipped by ground service.  Company reserves the right to pack and ship products in the manner it deems most convenient and economical.  Customer understands that Company may charge Customer a $50.00 handling charge for same day express or overnight service, and that Customer shall be responsible for paying any additional costs incurred by Company to accommodate any special packaging or shipping requests.  In Company’s sole discretion, special orders (including products in shortage), hazardous substances, and bulk and refrigerated items may be subject to Customer agreeing to pay additional shipping and handling charges.  Customer understands that any items requiring refrigeration (a) may be shipped separately from the remainder of an order, (b) must be shipped by overnight or express service, (c) cannot be returned unless delivered in error or in a damaged, deteriorated or defective condition, and (d) cannot be shipped on Fridays, holidays or other days where expedited shipment cannot be assured.  Hazardous materials are excluded from air shipments.     

2.  Delivery.  Unless otherwise specified, all deliveries made by common carrier are F.O.B. Destination.  Risk of loss shall pass upon Customer’s acceptance of product delivery.  Company shall not be liable to Customer for any failure to deliver an order, in whole or in part, if caused by any circumstances or conditions beyond Company’s reasonable control, including fires, floods, accidents, terrorism, government actions, war, insurrection or riots, labor strikes, shortages of products, labor, energy, materials, facilities or transportation, or any other force majeure circumstance or condition delaying or preventing product delivery, in which case the total quantity of invoiced products may be reduced by the amount omitted from delivery, and Customer’s account credited accordingly.  Backordered/shortage products will be shipped to Customer upon Company’s receipt of available product, but Customer’s purchase order may be cancelled if it cannot be filled within 60 days, with notice and account credit to Customer.  All products on manufacturer backorder or subject to other market shortage are special order items that may not be returned to Company unless subject to an official product recall or investigation, or unless Company agrees otherwise in writing. 

3.  Product Claims.  Unless Company agrees otherwise in writing, all claims for product defects, damages, discrepancies, omissions or errors, or other failure of Company to conform product delivery to the terms of a purchase order, must be made by Customer, in writing, within 48 hours or two (2) business days of receipt of non-refrigerated products and within 24-hours or one (1) business day of receipt of refrigerated products; and if Customer fails to timely provide such notice describing the problem, Customer shall be deemed to have waived any objection and accepted product delivery.  If Customer disputes only part of an order, Customer shall timely pay Company for any undisputed portion of such order. All product returns must be authorized in writing by Company in accordance with the FDCA, the DSCSA, Company’s return policies and procedures, and any other applicable laws and regulations.  Products returned due to Customer error or overstocking may be subject to a 20% restocking fee.  Special orders, dated or refrigerated products, controlled substances, products precluded from return by their manufacturer, and products with opened or damaged packaging or containers may not be returned, unless delivered in error or in a damaged, deteriorated or defective condition, or if Company agrees otherwise in writing. 

4.  Product Returns.  Unless Company agrees otherwise in writing, Company will accept for return and Customer account credit only products that are (a) subject to an official recall, (b) subject to seizure or quarantine by any governmental authority or law enforcement, or (c) rendered unsalable through any act or omission of Company or its shipping agent.  Customer agrees to keep reasonable inventory records of products acquired from Company, as necessary to enable Company to meet FDA or other requirements applicable to a product recall, field action or market withdrawal.  Company is not responsible for products returned without prior authorization, and reserves the right to reject any unauthorized return (including any C.O.D. shipments) and bill Customer for any charges incurred by Company.  All returns must be accompanied by a Return Merchandise Authorization or RMA number clearly marked on the outside of each shipping box (one RMA per box).  Product authorized for return under an RMA must be sealed in original packaging, unmarked, unexpired, unopened and in salable condition, and stored and shipped at Customer’s sole cost in compliance with USP drug monographs, FDA guidelines and manufacturer requirements, including climate control requirements.  All authorized returns of glass products must be securely packaged to avoid breakage in transit, and all authorized returns of refrigerated product must be packed with ice packs placed in plastic bags to maintain proper storage conditions and avoid moisture damage in transit.  For purposes of the DSCSA, until further notice, Customer may make an authorized return of product to Company without Customer providing a new T3 Statement to Company.

5.  Account Credit.  Company has sole discretion to determine eligibility to return product for account credit, which shall be issued only upon written authorization, at the original purchase price, less any restocking fees and off-invoice adjustments or allowances.  Customer will be entitled to account credit for any returned products Company accepts hereunder.  If applicable, credits will be netted against invoiced amounts before calculating any Discount.  From time to time, Company may provide Customer with periodic notices, which may be combined with invoices, regarding available account credit.  Customer must request, in writing, when it chooses to apply such credit towards purchase.  Any Customer account credit balance must be used within one (1) year of accrual, and Customer understands and agrees that the failure to timely use any account credit may result in its cancellation by Company and/or its escheat to the respective jurisdiction.

 

Rev.08-18-2018.GDC