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CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED
FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.9
PHARMACY MANAGEMENT AGREEMENT
WOMEN FIRST PHARMACY SERVICES, INC., a Delaware corporation (the
"Company") and HEALTH SCRIPT, a wholly owned division of Dura Pharmaceuticals,
Inc., a Delaware corporation ("Manager"), agree as follows:
1. RECITALS.
(a) WHEREAS, the Company desires to provide mail order pharmacy
services to its customers through a pharmacy to be located at 0 Xxxxxxxxx Xxxxx
Xxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Pharmacy"); and
(b) WHEREAS, Manager owns and is experienced in operating and
managing retail and mail order pharmacies; and
(c) WHEREAS, the Company desires to engage Manager, and Manager
desires to be engaged by the Company, to manage the Pharmacy on behalf of the
Company on the terms and conditions set forth in this Pharmacy Management
Agreement (this "Agreement").
2. DUTIES OF MANAGER.
(a) Pharmacy Personnel. With the exception of the
Pharmacist-in-Charge, who shall be employed or leased by the Company at its
election, Manager shall employ sufficient qualified Pharmacy personnel to
operate the Pharmacy in a professional, efficient and productive manner, and in
accordance with the performance standards set forth in Attachment "A" hereto.
All such personnel shall be employees or independent contractors of Manager and
shall be subject to the personnel policies and benefits of Manager, but shall
also follow the applicable rules and regulations of the Company, including
general oversight and direction by the Pharmacist-in-Charge. Manager shall also
make available a "back up" pharmacist who shall be on-site at such times as the
Company's Pharmacist-in-Charge is off-duty or unavailable.
(b) Products and Pharmaceuticals. Manager shall purchase at its
expense all materials, including pharmaceuticals, relating to Compounded
Products. "Compounded Products" shall mean compounded hormone products
containing estrogen, progesterone and/or androgen, in combinations of one to
three of such compounds, in no more than three strengths, in capsule and/or
suppository form. Manager shall arrange for the arms' length purchase by the
Company from manufacturers or distributors of all other necessary products and
pharmaceuticals required for the efficient operation of the Pharmacy. Manager
shall use its commercially reasonable efforts to arrange for the purchase of
such products and pharmaceuticals at the best possible price available given the
Company's needs and demands. The Company shall be solely responsible for the
purchase price and applicable sales taxes and delivery charges for such products
and pharmaceuticals, but the cost of arranging for such purchases shall be borne
by Manager as part of the services provided hereunder. The payment terms for
such purchases shall be not less favorable to the Company than net thirty (30)
days, without the prior written approval of the Company. The Company shall have
the right, upon prior written notice to Manager, to arrange directly for its
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purchases of such products and pharmaceuticals and to enter into contracts
directly with manufacturers and distributors of any such products and
pharmaceuticals, subject to Manager's prior approval of the quantities delivered
and stored at the Pharmacy from time to time, such approval not to be
unreasonably withheld or delayed.
(c) Patient and Order Entry Support.
(i) Manager shall provide at Manager's expense (other than "800"
line usage charges) pharmacy counseling and general patient support to all of
the Company's customers in substantially the same fashion and level of service
as that provided to customers of the Health Script pharmacy. Manager shall
assist the Company in establishing a sufficient number of dedicated "800" lines
to respond to all calls in a timely manner. Manager shall provide such pharmacy
support from 7:00 a.m. to 8:00 p.m. MST, Monday through Friday, with after hours
availability either through on-call service, voice mail or answering service.
The Company shall provide general customer support by telephone to its
customers. At the Company's request, the parties agree to negotiate in good
faith an appropriate increase in the monthly management fee and other
appropriate modifications to this Agreement if the Company desires that these
customer support services be provided by Manager.
(ii) At the Company's reasonable request, the parties agree to
negotiate in good faith an appropriate increase in the monthly management fee
and other appropriate modifications to this Agreement in the event the Company
desires Manager to provide telephonic order entry services for the Company's
customers.
(d) Pharmacy Services. Pharmacy services shall include without
limitation prescription verification, prescription preparation, compounding
services for Compounded Products, product shipping services, quality control and
those other services listed on Attachment F hereto. Manager shall insure that
all such services, as well as all other services provided pursuant to this
Agreement are provided in a manner which insures full compliance with all local,
state and federal laws and regulations and is otherwise consistent with the
standards of operation generally followed by high quality pharmacies within the
industry.
(e) Data Processing. Manager shall make available to the Company
its HBS and Dezine computer systems. These systems shall remain the property of
Manager at all times during the Term or any renewals thereof. The Company shall
be responsible for purchasing its own site license for the computer software,
which one-time fee license shall not exceed $6,000, and shall purchase certain
additional equipment described under Section 2(k) below, but all other costs of
using, operating and maintaining the computer systems shall be borne by Manager.
Manager shall provide programming and support to maintain the systems for the
Company comparable to Manager's, at no additional charge to the Company. Subject
to the Company's payment of any required site license fees to third parties, if
and as Manager implements any additional software application modules for its
own use that would assist in the efficient operation of the Pharmacy, it will
make such software applications available under this Section 2(e) at no
additional charge to the Company.
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(f) Billing and Collection Service. For an additional fee
specified in Section 3(f), Manager shall provide all billing and collection
services on behalf of the Company, including, without limitation, insurance plan
adjudication, processing reimbursements and other necessary interfacing with
private and governmental third party payors for the products shipped to the
Company's customers by Manager, in accordance with the Company's "business
rules" and billing and collection procedures established pursuant to Section
3(d). Either party may, upon prior written notice to the other party as
specified below in this Section 2(f), elect to terminate the billing and
collection services provided by Manager under this Agreement, and in such event,
the billing and collection fee specified in Section 3(f) no longer shall be
payable. If Manager desires to terminate the billing and collection services it
provides hereunder, Manager may do so upon not less than 180 days' prior written
notice of such termination to the Company. If the Company desires to terminate
the billing and collection services provided by Manager hereunder, then (i) the
Company may terminate such services upon not less than 90 days' prior written
notice of such termination and the payment to Manager of a termination fee equal
to [***] if the orders from the Company's customers are less than or equal to
[***] orders per month, and (ii) the Company may terminate such services upon
not less than 180 days' prior written notice of such termination, if the orders
from the Company's customers are greater than [***] orders per month.
(g) Reporting Capabilities. Manager shall be responsible for
reporting patient and billing information to the Company on a daily basis in
accordance with Manager's standard format and reporting schedules. Manager shall
arrange for the installation of all necessary telephone and data communications
lines required to adequately fulfill this requirement. The Company shall be
responsible for the out-of-pocket costs of such telephone and data communication
lines. The parties will negotiate in good faith appropriate compensation to
Manager for the preparation of any additional reports and billing information
which the Company may reasonably require.
(h) Supplies. Manager shall provide, at its expense, all supplies
necessary for the standard efficient operation of the Pharmacy, including but
not limited to forms, internal documents and paper products. Special programs
run by the Company shall not be included.
(i) Waste Disposal. Manager shall provide all hazardous, chemical
and infectious or bio-hazardous waste disposal from the Pharmacy. The Company
shall pay for all required charges, fees, taxes or other expenses payable to
third parties in connection with such disposal.
(j) Site Planning. Manager shall assist the Company in site
planning design and construction of the Pharmacy. Manager acknowledges and
agrees that, to the best of its knowledge, the subleased space for the Pharmacy
shall be sufficient and suitable to properly commence the delivery of the
services outlined in this Agreement.
(k) Additional Equipment. Manager shall arrange for the purchase
(or at, the Company's sole election, the lease) by the Company of the additional
equipment listed on Attachment "B" hereto. Manager shall not arrange for the
purchase of any other equipment by the Company necessary for the operation of
the Pharmacy without the Company's prior written
[***] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
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approval, not to be unreasonably withheld or delayed. Manager acknowledges and
agrees that the equipment listed on Attachment "B" is, to the best knowledge of
Manager, all of the equipment which the Company must purchase in order for the
Company and Manager to properly commence delivery of the services outlined in
this Agreement. Such equipment shall be charged to the Company and shall remain
the property of the Company at all times during the Term or any renewals
thereof. All equipment necessary for Manager to perform compounding services
shall be provided by Manager at its expense.
(l) Equipment Maintenance. Manager shall also furnish and oversee
at its expense all equipment maintenance, repairs, maintenance contracts and
other expenses reasonably determined to be necessary by the Company and Manager
for the proper operation of the Pharmacy.
(m) Other. Manager shall perform such other functions and provide
such other services as shall be required to operate the Pharmacy in an efficient
and cost effective manner, as well as such other functions and services as shall
be mutually agreed upon by the parties.
3. DUTIES OF THE COMPANY.
(a) Pharmacist-in-Charge. The Company shall, in consultation with
Manager, hire or lease a qualified Pharmacist-in-Charge (the
"Pharmacist-in-Charge"). Such person shall be an employee or leased employee of
the Company throughout the Term of this Agreement and any renewals thereof. At
such time as the Company hires a Pharmacist-in-Charge, the Company shall
determine the amount and character of the Pharmacist-in-Charge's compensation
and will be responsible for compensating him or her for all services rendered in
connection with this Agreement. If at any time during the Term or any renewals
thereafter, the Company desires to lease the Pharmacist-in-Charge or the
services of other pharmacy personnel for special projects not otherwise provided
under this Agreement, Manager will lease such personnel to the Company pursuant
to the Employee Lease Agreement in the form attached hereto as Attachment "C"
(as amended from time to time, the "Employee Lease"), which will be executed
concurrently with this Agreement.
(b) Space. The Company shall provide, at its expense, reasonably
sufficient space for the operation of the Pharmacy, which shall be sub-leased
from Manager pursuant to the Sublease Agreement attached hereto as Attachment
"D" (as amended from time to time, the "Sublease Agreement"), which will be
executed concurrently with this Agreement. The parties acknowledge and agree
that the monthly rent to be paid by the Company under the Sublease Agreement is
intended to be all-inclusive, including without limitation, all fees and charges
for "operating expenses" (as defined under the Master Lease) and other charges
payable by the Manager to lessor under the Master Lease. In the event the
Company becomes liable under the Master Lease as a result of Section 9 of the
Sublease Agreement for any amounts in excess of the Company's monthly rent under
the Sublease Agreement, Manager shall indemnify and hold harmless the Company
from and against any and all such excess amounts. Any construction or leasehold
improvements to the Pharmacy shall be subject to the Company's prior written
approval. Manager shall be responsible for all costs associated with the
planning and oversight of
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construction and leasehold improvements; however, the actual cost of
construction, as well as the cost of all leasehold improvements reasonably
determined by the Company and Manager to be necessary for the proper operation
of the Pharmacy, shall be the sole responsibility of the Company. If the leased
space for the Pharmacy is expanded, the Sublease Agreement shall be amended to
reflect such additional space. In addition, Manager shall provide, at its
expense, sufficient additional storage space as may be reasonably required from
time to time to efficiently operate the Pharmacy. In the event the Master Lease
is terminated due to the fault of Manager, the Manager agrees to reimburse the
Company for its subtenant improvements (as defined in the Sublease Agreement)
and all other damages incurred as a result of such termination. A
reorganization, merger or transfer of stock of the Company will not constitute
an assignment of the Sublease Agreement. Each party hereby consents to the
assignment of the Sublease Agreement to the purchaser of all or substantially
all of the other party's assets, provided all liabilities and obligations of the
assigning party under the Sublease Agreement are assumed by such purchaser.
(c) [Intentionally omitted].
(d) Charges, Billing and Collection. The Company shall establish
the overall charge structure for the Pharmacy services and will provide to the
Manager the Company's "business rules" and billing and collection procedures
with respect to taking, processing, fulfilling and collecting payment for
customer orders, including timely updates to such business rules from time to
time.
(e) Hours of Operation. The Pharmacy shall be operated Monday
through Friday (except for legal holidays), on an as needed basis, with hours to
be expanded as the Company's customer demands increase. Manager will provide, on
behalf of the Company, 24 hour a day, seven day a week pharmacy emergency
services, either through on call service, voice mail or answering service.
(f) Optional Billing and Collection Fee. In exchange for
Manager's billing and collection services provided under Section 2(f) above, the
Company shall pay to Manager a fee per order equal to the greater of (i) [***]
or (ii) [***] of "Billed Revenue" (as defined below), during the [***] of this
Agreement and [***] thereafter, [***] "Billed Revenue" shall be defined as the
sales price of the product shipped by Manager on behalf of the Company in
accordance with the Company's "business rules" and billing and collection
procedures under Section 3(d). The Company shall remit all amounts owed within
thirty (30) days of receipt of the monthly invoice from Manager.
4. MANAGEMENT AND SERVICES FEES.
(a) Monthly Management Fee. As compensation for the management
and other services rendered pursuant to this Agreement, the Company shall pay to
Manager a monthly fee based on volume as set forth on Attachment E, commencing
upon the filing of the Company's application for a Pharmacy license with the
State of Colorado, but subject to a credit of [***]
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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[***] per month for the first three months during which a management fee is
payable under this Section 4(a). The Company will remit all amounts owed within
thirty (30) days of receipt of an invoice from Manager.
(b) Compounding Fee. As compensation for the compounding services
rendered and compounding materials provided pursuant to this Agreement, the
Company shall pay to Manager a monthly fee equal to the product of [***] times
the number of units compounded during such month, but only to the extent such
amount exceeds [***].
(c) Distribution Costs. Manager shall charge the Company a
monthly distribution fee equal to its actual cost of packaging materials used
and third-party shipping charges incurred for shipments of products to the
Company's customers, plus [***]. This payment shall cover Manager's cost of
distributing all products and pharmaceuticals to the Company's customers,
including packaging, labeling and shipping the products. The Company shall remit
all amounts owed within thirty (30) days of receipt of an invoice from Manager.
(d) Annual Fee Increase. On each anniversary date of this
Agreement, Manager may increase its fees by a percentage equal to the percentage
increase, if any, in the United States Department of Labor Consumer Price Index
for all urban consumers (U.S. City Average) published by the Bureau of Labor
Statistics ("CPI") for the preceding twelve months. Manager shall give immediate
written notice to the Company of any such increase.
(e) Changes in Services or Facilities. In the event that (i) the
Company's primary services materially change or (ii) the Company requires
additional services that materially affect the operating expenses of the
Pharmacy or (iii) the Company exceeds the order volumes set forth on Attachment
"E" hereto, one party shall notify the other party in writing of such event and
Manager and the Company agree to renegotiate, in good faith, the terms of this
Agreement, including the fees to be paid for such services, in order to
alleviate the impact of such changes, or, in the case of clause (iii) above, to
reflect the cost savings resulting from the economics of scale attributable to
such increased volumes. Any such changes in services or terms shall be in
writing and signed by the parties. If the parties have negotiated in good faith
but cannot agree to revised terms within a period of thirty (30) days of the
date on which one party received the written notice described hereinabove, this
Agreement shall be terminated upon ninety (90) days written notice from either
party.
(f) Right to Accounting; Audit Policies. The Company will be
entitled to an accounting from Manager at any time and from time to time upon
written request from the Company to Manager. For the purposes of this Agreement,
"accounting" means a complete and accurate statement with worksheets and
original source documentation of all funds, transactions, writings, documents,
statements, ledgers, reports and other information reasonably requested by the
Company relating to any matter arising out of this Agreement. Manager agrees and
acknowledges that the services provided hereunder may be audited by the Company
or its agents,
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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for both accuracy and quality, pursuant to the Company's normal internal audit
policies. All audits shall occur on-site during normal business hours.
5. CONSULTATION. The Company and Manager will meet and confer in good
faith at the end of each calendar quarter during the term of this Agreement to
discuss any concerns either of them may have with any of the provisions,
conditions or the implementation of this Agreement and to suggest appropriate
changes in operational procedures to address such concerns.
6. TERM. The term of this Agreement (the "Term") shall be for two (2)
years commencing on the 30th day of September, 1998, and ending on the 29th day
of September, 2000. Either party may elect to extend this Agreement for up to
three (3) additional one (1) year terms, and such additional one (1) year terms
as would run through the end of the Manager's Master Lease in the event such
lease is extended. In the event a party desires to extend, such party shall
provide written notice of its election to extend this Agreement not less than
180 days prior to the then-current expiration date, or such shorter notice
period as the parties may mutually agree, and this Agreement shall be extended
unless the other party responds to the extending party with written notice of
its unwillingness to extend this Agreement within ten (10) business days of
receipt of such notice of extension. Notwithstanding any provision of this
Agreement to the contrary, the Company's obligations under this Agreement shall
be subject in all respects to prior approval by the Women First HealthCare, Inc.
Board of Directors and by the holders of two-thirds of the outstanding shares of
Series A Preferred Stock of Women First HealthCare, Inc. If this condition is
not satisfied or waived by the Company within 45 days of the execution of this
Agreement, this Agreement shall be null and void and neither party shall have
any obligations to the other hereunder. The Company will notify Manager in
writing when and if the requisite approvals have been obtained.
7. TERMINATION. This Agreement may be terminated with cause in the event
of a breach of any of the material terms of this Agreement, or failure of
Manager to comply with the performance standards set forth in Attachment A, if
such breach is not corrected within thirty (30) days from the date of the
breaching party's receipt of written notice of the breach by the nonbreaching
party. In addition, this Agreement may be terminated by the Company upon written
notice to Manager in the event that (i) the Company does not receive a license
for the Pharmacy from the State of Colorado or such license is suspended or
revoked, or (ii) the Employee Lease (Attachment "C") or the Sublease Agreement
(Attachment "D") is terminated for any reason other than as a result of the
breach thereof by the Company, or (iii) in the event the approvals referred to
in Section 6 are not received.
8. PROHIBITION AGAINST RECRUITMENT OF EMPLOYEES. During the Term of
Agreement and any renewal period thereof, and for a period of twelve (12) months
following its expiration or termination for whatever reason, neither the Company
nor Manager will hire (or contract with as an independent contractor) any
individual who is or was an employee of the other party who works at the
Company, the Manager or in the Pharmacy during the Term of this Agreement or any
renewal period thereof, without the prior written consent of the other party. In
addition, neither the Company nor Manager will discuss the possibility of or
make any job offer to any person who is or was an employee of the other party
during the Term of this Agreement, or any renewal period thereof, without the
other party's prior written consent. Each party acknowledges and agrees that
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these restrictions are reasonable and necessary to protect the other party's
legitimate interest. Any consent required hereunder shall not be unreasonably
withheld or delayed.
9. RESTRICTIVE COVENANTS.
(a) The Company and Manager acknowledge that each may have access
to certain confidential information, proprietary data and trade secrets of the
other, including, but not limited to: fee structures; processes; financial
statements; contract proposals or bidding information; business plans; training
and operations methods and manuals; and management systems, policies or
procedures, and related forms and manuals (collectively, the "Proprietary
Information") and that such Proprietary Information constitutes valuable,
special and unique property of each party. The parties agree that any product
formulations, or product preparation or compounding procedures or techniques,
which are not generally known within the pharmacy industry and which are
developed by the Company or Manager in connection with the sale of products to
the Company's customers under this Agreement, shall be the Proprietary
Information of the Company.
(b) During the term of this Agreement and for three (3) years
thereafter (herein, the "Noncompete Period"), Manager will not (i) use for
itself or others or disclose any of the Company's Proprietary Information,
directly or indirectly, to any person or corporation, association or other
entity for any reason or purpose whatsoever (except Manager may use in its
business any compounding procedures and techniques which constitute the
Company's Proprietary Information), except as otherwise permitted by the
Company; or (ii) disrupt or attempt to disrupt any past, present or reasonably
foreseeable future relationship, contractual or otherwise between the Company,
on the one hand, and any patient, customer, person or business with whom the
Company contracts in connection with its business, on the other hand.
(c) During the Noncompete Period, the Company will not (i) use
for itself or others or disclose any of Manager's Proprietary Information,
directly or indirectly, to any person or corporation, association or other
entity for any reason or purpose whatsoever except as otherwise permitted by
Manager, or (ii) disrupt or attempt to disrupt any past, present or reasonably
foreseeable future relationship, contractual or otherwise between Manager, on
the one hand, and any patient, customer, person or business with whom Manager
contracts in connection with its business, on the other hand.
(d) In the event of a breach of this Section 9, each party
recognizes that monetary damages shall be inadequate to compensate the
nonbreaching party and the nonbreaching party shall be entitled, without the
posting of a bond, to any injunction restraining such breach, with the costs,
including attorneys fees, of securing such injunction to be borne by the
breaching party. Nothing contained herein shall be construed as prohibiting the
nonbreaching party from pursuing any other remedy available to it for such
breach or threatened breach.
(e) Both parties hereto hereby acknowledge the necessity of
protection against the competition of the other party and that the nature and
scope of such protection has been carefully considered by the parties. The
period and scope of this Section 9 are expressly represented and
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agreed to be fair, reasonable and necessary. The consideration provided for
herein is deemed to be sufficient and adequate to compensate each party for
agreeing to the restrictions contained in this Section 9. If, however, any court
determines that the foregoing restrictions are not reasonable, such restrictions
shall be modified, rewritten or interpreted to include as much of their nature
and scope as will render them enforceable.
(f) Proprietary Information shall not include any information
which, at the time of disclosure, (i) is generally known by the public or
generally known within the respective parties' industries, (ii) was in the
recipient's possession free of any obligation of confidentiality at the time of
the disclosing party's communication thereof to the recipient, (iii) was
communicated to the recipient free of any obligation of confidentiality
subsequent to the time of the disclosing party's communication thereof, (iv) was
communicated to the recipient by a third party free of any obligation of
confidentiality, (v) was developed by employees or contractors of the recipient
independently of, and without reference to, any of the Proprietary Information
and such development is documented in a reasonably detailed written record, or
(vi) is subject to disclosure pursuant to any order, decree, subpoena or other
validly issued judicial or administrative process (provided that the recipient
shall notify the disclosing party promptly so that the disclosing party may seek
to obtain a protective order or other appropriate relief from disclosure).
(g) Each party shall explicitly inform each employee or
independent contractor of such party who will have access to any Proprietary
Information of the confidential nature of such information. Each party shall
cause each such employee or independent contractor who will have access to any
Proprietary Information to sign a confidentiality agreement with respect to all
Proprietary Information equivalent to this Section 9. Each party shall
immediately report to the other any knowledge which such party has with respect
to any attempt by any person to duplicate, use or disclose Proprietary
Information in violation of this Agreement.
10. MANNER OF PERFORMANCE. Manager shall act at all times as an
independent contractor and shall not act as, or be considered, an agent,
employee, partner, joint venture or otherwise an affiliate of the Company,
except as specifically provided in this Agreement. The Company shall not
withhold any taxes on behalf of Manager or any person employed by Manager or
independently contracted by Manager. No employee of Manager shall have any claim
under this Agreement or otherwise against the Company for wages, vacation pay,
sick leave, unemployment insurance, worker's compensation, retirement benefits
or employee benefits of any kind.
11. INSURANCE. Each party shall obtain and maintain throughout the term
of this Agreement minimum insurance coverage as follows:
- Worker's Compensation: Statutory Amount
- Employer's Liability: $1,000,000
- Comprehensive General
Liability and Property Damage: $1,000,000
- Professional Liability: $1,000,000/$3,000,000
Each party shall name the other party as an additional insured under such
policies.
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12. LICENSING AND REGULATORY REQUIREMENTS. The Pharmacy shall be
licensed under the Company's name and shall obtain its own Medicare and Medicaid
provider numbers. Subject to the Company's prior review and approval of
applications and other filings, Manager will prepare and file on behalf of the
Company and otherwise assist the Company in obtaining and maintaining such
licenses, certifications and permits as are required by local, state and federal
laws and regulations in connection with the operation of the mail order Pharmacy
throughout the United States. Manager will render Pharmacy services and, if the
Pharmacist-in-Charge is leased by the Company from Manager, Manager will cause
the Pharmacist-in-Charge to render his or her services, at all times in
compliance with all applicable statutes, regulations, rules and directives of
federal, state and other governmental authorities having jurisdiction over
Manager and the Company and in compliance with the policies and regulations of
the Company and all currently accepted and approved practices of providing
pharmacy services. Manager represents and warrants that, subject to the
Company's receipt of the proper licenses and filing of proper applications and
other filings (which Manager will prepare and file in accordance with this
Section 12), to Manager's best knowledge as of the date hereof, the transactions
contemplated by this Agreement will be in compliance with all applicable local,
state and federal laws and regulations.
13. CONFIDENTIALITY OF PATIENT RECORDS. All customer lists, including
the identities, lists and descriptions of patients and referral sources, and
other patient medical records (collectively, "Patient Records") will be
maintained as confidential and will be disclosed only in accordance with the
Company's policies and all applicable state and federal laws. All Patient
Records shall belong exclusively to the Company and the release, removal or
transfer of such records shall be governed by its established policies and
procedures. In handling such Patient Records, both parties agree to comply with
all applicable state and federal laws and with any requirements or limitations
described in the written consent for release. Each party hereto agrees to take
all reasonable precautions against any unauthorized disclosure of the Patient
Records and to protect the patients' rights to confidentiality. The Company
shall maintain such medical records of the patients in accordance with the time
periods established by state record retention laws and regulations. Manager
shall advise the Company from time to time as to these required time periods.
Upon termination or expiration of this Agreement for any reason, Manager shall
promptly deliver to the Company all Patient Records and shall not retain any
copies or extracts (whether in paper format, electronic or otherwise) of any
such records.
14. NON-DISCRIMINATION. Neither Manager nor the Company will
discriminate against any patient or applicant for employment on the basis of
race, color, gender, sexual orientation, age, religion, national origin or
handicap in providing services under this Agreement.
15. INDEMNIFICATION. Each party agrees to indemnify and hold harmless
the other party and its officers, directors, affiliates, employees and agents
against and from all damages arising from the illegal, negligent, or intentional
acts or omissions of the indemnitor or the indemnitor's agents, employees,
affiliates, board members, or medical staff, including acts with respect to the
disposal of hazardous, chemical and infectious or bio-hazardous wastes. In the
event that any claim is made which may result in the right of indemnity
hereunder, the party against whom the claim is made (the "Defendant") shall
promptly give written notice to the other party and give such other party the
opportunity to defend the claim with counsel reasonably satisfactory to the
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Defendant, and such other party shall pay all costs of such defense (including
reasonable attorney fees), whether or not the claim is successful. Failure to
give prompt written notice shall not relieve an indemnitor of its obligations
under this Section 15 unless such failure materially prejudices indemnitor's
defense of such claim. Indemnitor will not settle any such claim or action
without the prior written consent of Defendant, not to be unreasonably withheld
or delayed. The provisions of this Section 15 shall survive any termination or
expiration of this Agreement.
16. AUTHORITY. Subject to Sections 6 and 12, the Company and Manager
each warrant that the execution and performance of this Agreement by it has been
authorized by all applicable laws and regulations and all necessary corporate or
partnership action, and that this agreement constitutes the valid and binding
obligation of it in accordance with its terms.
17. AMENDMENTS. Any amendments to this Agreement will be effective only
if contained in writing and signed by the Company and Manager.
18. NOTICES. All notices permitted or required by this Agreement will be
deemed given when in writing and delivered personally or by nationally
recognized overnight courier (e.g. Federal Express), or three (3) days after
such written notice is deposited in the United States mail, postage prepaid,
return receipt requested, addressed to the other party at the address set forth
in this Agreement and such other address as the parties from time to time may
designate in writing. Notices shall be directed to:
Manager:
HEALTH SCRIPT
Attention: General Manager
0 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
With a copy to:
Dura Pharmaceuticals, Inc.
Attention: Office of General Counsel
0000 Xxxx Xxxxxxxxx
Xxx Xxxxx, XX 00000
The Company:
Women First Pharmacy Services, Inc.
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: President and Chief Executive Officer
With a copy to:
Xxxxxx & Xxxxxxx
000 "X" Xxxxxx, Xxxxx 0000
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Xxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Esq.
19. ASSIGNABILITY. Neither the Company nor Manager may assign this
Agreement without prior written consent of the other party, which consent shall
not be unreasonably withheld or delayed. A reorganization, merger or transfer of
stock will not constitute an assignment. Each party consents to the assignment
of this Agreement to the purchaser of all or substantially all of the other
party's assets, provided all liabilities and obligations of the assigning party
under this Agreement are assumed by such purchaser.
20. ENTIRE AGREEMENT. This agreement constitutes the entire management
agreement between the Company and Manager and each agrees that no inducements,
representations or warranties exist except as set forth in this Agreement.
21. SEVERABILITY. In the event any part of this Agreement is declared
invalid, such invalidity will not affect the validity of the remainder.
22. LEGISLATIVE CHANGES AFFECTING TERMS OF AGREEMENT. In the event law,
rules, regulations or governmental policies related to reimbursement of the
items and services provided hereunder from any payment source are introduced or
changed so as to materially adversely affect either party to this Agreement, the
parties agree in good faith to renegotiate the terms of this Agreement.
Furthermore, in the event that any part of this Agreement is determined to
violate federal or state statutes, rules or regulations, Manager and the Company
agree to renegotiate the terms of this Agreement in good faith in order to
comply with such statute, rule or regulation. If this Agreement cannot be
amended to permit the Company or Manager to comply with applicable law and
continue on the same economic terms and service standards, this Agreement may be
terminated by either party by giving the other party written notice of
termination at least thirty (30) days prior to the effective date of such
termination.
23. NO PRESUMPTION AGAINST DRAFTING PARTY. The parties acknowledge that
this Agreement and the provisions contained herein are, and were, the product of
the parties equally, and that it shall not be construed or interpreted for or
against any party hereto because said party drafted, or caused its legal
representative to draft, any portion of its provisions.
24. RELEASE OF INFORMATION. Subject to applicable law, any release to
the public of information with respect to the matters set forth herein will be
made only in the form and manner approved by Manager and the Company.
25. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement.
26. GOVERNING LAW. This Agreement will be construed in accordance with
the laws of the State of Colorado.
27. CAPTIONS. The captions used in this Agreement are for convenience
only and shall not affect the meaning, construction or interpretation of any
term, provision or condition of this Agreement.
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28. Arbitration. Any claim or controversy arising out of or relating to
the execution, interpretation, performance and enforceability of this Agreement,
the Employee Lease or the Sublease Agreement, that cannot be resolved by mutual
agreement of the parties shall be submitted to arbitration. The arbitration
shall be conducted in accordance with the Commercial Arbitration Rules of the
American Arbitration Association in San Diego, California, who shall have the
powers to hear motions, control discovery, conduct hearings and otherwise do all
that is necessary to resolve the matter. The arbitration award shall be final
and binding, and judgment on the award may be entered in any court having
jurisdiction thereof. It is expressly understood that the parties have chosen
arbitration to avoid the time, burdens, costs and publicity of a court
proceeding, and the arbitrator is expected to handle all aspects of the matter,
including discovery and any hearings, in such a way as to minimize the expense,
time, burden and publicity of the process, while assuring a fair and just
result. In particular, the parties expect that the arbitrator will limit
discovery by controlling the amount of discovery that may be taken (e.g., the
number of depositions or interrogatories) and by restricting the scope of
discovery to only those matters clearly relevant to the dispute. It is further
understood that any award of punitive damages by the arbitrator would be
inconsistent with the commercial purposes of this Agreement, the Employee Lease
or the Sublease Agreement and the status of the parties with respect to one
another, and therefore, neither the arbitrator nor any other tribunal is
authorized or empowered to award punitive damages in any proceeding based upon
the Agreement, the Employee Lease or the Sublease Agreement or the dealings
hereby and thereby. Each party shall bear its own attorneys' fees and expenses
in connection with any claim or cause of action brought under this Agreement or
the other agreements and any resolution of disputes under this Section 28. The
provisions of this Section 28 shall survive the termination or expiration of
this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have set forth their signatures below:
THE COMPANY
Date: September 30, 1998 By: Xxxxx X. Xxxx
------------------ ---------------------------------------
Signature: /s/ XXXXX X. XXXX
--------------------------------
Title: President
-------------------------------------
HEALTH SCRIPT
Date: September 30, 1998 By:
------------------ ---------------------------------------
Signature: /s/
--------------------------------
Title: General Manager
-------------------------------------
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ATTACHMENT A
PERFORMANCE STANDARDS
All orders for the Company will be processed and shipped with the same
efficiency and expediency as Health Script Pharmacy, provided that all materials
are and remain readily available from manufacturers. In the event that any
item(s) becomes unavailable, Health Script on behalf of the Company will make
every effort to procure the items(s) from an alternative source. Notwithstanding
the foregoing, Manager will process and ship at least 90% per month of all
orders not requiring pharmacist intervention (i.e., contacting a patient or
prescriber) approved in accordance with the Company's "business rules" within 48
hours of receipt, except that orders received on Thursday shall ship not later
than Saturday and orders received on Friday shall ship not later than Monday.
Manager will "date-stamp" each order when and as received by Manager. The
Company and Manager will agree on a monthly reporting procedure with respect to
Manager's order fulfillment performance in light of the 90% processing and
shipping standard.
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ATTACHMENT B
ANCILLARY EQUIPMENT
Price/Unit Quantity Total $
INITIAL PHARMACY SETUP PROVIDED BY
HEALTH SCRIPT
Shipping station $ 5,000 1 $ 5,000
Hood 3,000 1 3,000
Capsule machines 750 1 750
-------
TOTAL SETUP PROVIDED BY HS $ 8,750
=======
INITIAL PHARMACY SETUP PROVIDED BY
WFPS
HBS Site License $ 5,500 1 $ 5,500
Compaq Server 15,000 1 15,000
Computers 2,000 3 6,000
Fax machine 1,000 1 1,000
Line printers 500 2 1,000
Laser printers 2,000 2 4,000
Pharmacy utensils and supplies 3,250 1 3,250
Compound area buildout (add 225 sq ft) 5,000 1 5,000
Six month buildout - new space (required only when the 25,000 1 25,000
-------
Company achieves business volumes in excess of 20,000
orders per month)
TOTAL SETUP PROVIDED BY WFPS $65,750
=======
17
ATTACHMENT C
FORM OF EMPLOYEE LEASE AGREEMENT
18
EMPLOYEE LEASE AGREEMENT
THIS EMPLOYEE LEASE AGREEMENT (this "Agreement") is made this 30th day
of September, 1998 between WOMEN FIRST PHARMACY SERVICES, INC, a Delaware
corporation (the "Company") and HEALTH SCRIPT a division of Dura
Pharmaceuticals, Inc., a Delaware corporation ("HS").
WHEREAS, HS and the Company are parties to a Pharmacy Management
Agreement of even date herewith (the "Management Agreement"), pursuant to which
HS will act as a contract manager of a mail order pharmacy to be owned by the
Company, in exchange for, among other things, a monthly management fee; and
WHEREAS, HS desires to provide to the Company, when and to the extent
requested by the Company, contract human resource services, including the
services of one or more leased employees, hereinafter called an "HS Employee,"
or collectively, the "HS Employees," and the Company desires to contract with HS
for said services; and
WHEREAS, the execution and delivery of this Agreement by HS is a
condition to the Company's execution and delivery of the Management Agreement;
then, in consideration of the promises of the parties contained in this
Agreement, the parties agree as follows:
1. THE SERVICES, RIGHTS AND DUTIES OF HS.
(a) HS shall provide contract human resource services to the Company
for the Pharmacist-in-Charge and for the services of other
pharmacy personnel for special projects not otherwise provided
under the Management Agreement, for the job titles set forth in
Exhibit A to this Agreement in exchange for valuable
consideration as set forth in Section 3 below. The HS Employees
provided to the Company hereunder shall have such licenses,
certifications, education, training, skills and experience as
are (i) reasonably necessary to perform their respective duties
and responsibilities in a professional, competent and efficient
manner, and (ii) reasonably comparable to those of other
individuals performing substantially similar jobs elsewhere in
the pharmacy industry. HS shall provide the human resource
services hereunder when and to the extent requested in writing
from time to time by the Company, immediately upon written
request in the case of a Pharmacist-in-Charge and upon
reasonable prior written notice in the case of all other job
titles listed on Exhibit A.
(b) HS after consultation with and participation from the Company,
shall have all rights of an employer including a right of
direction and control over HS Employees and management of
safety, risk and hazard control at the work site or sites
affecting its employees as required by law and shall have
authority to hire, discipline, reassign and terminate HS
Employees. At the reasonable request of the Company after
consultation with HS, HS shall
19
reassign and replace any HS Employee provided under this
Agreement which the Company reasonably determines does not meet
the criteria set forth in Section 1(a) above or which is failing
to perform his or her duties and responsibilities in a
professional, competent and efficient manner.
(c) HS shall be solely responsible for payroll functions and payment
of all taxes, wages, insurance and benefits for HS Employees
covered by this Agreement.
(d) HS shall secure and maintain coverage for Worker's Compensation
for HS Employees covered under this Agreement. HS shall prepare
the required documents pertaining to reporting claims under
Workers' Compensation, and shall assist injured employees in
obtaining medical and rehabilitation benefits. HS shall be
responsible for any and all Worker's Compensation claims which
arise during the term of this Agreement.
(e) HS shall indemnify and hold the Company, its shareholders,
officers, directors, employees, associates and representatives,
harmless from and against any and all losses, liabilities,
claim, damages, injuries, costs and expenses, of whatever nature
(including reasonable attorneys' fees and costs), arising from
an act or omission of HS or any HS Employee or agent, where said
act or omission was engaged in without the prior consent of the
Company. This Section 1(e) shall survive the termination or
expiration of this Agreement.
(f) In the event law, rules, regulations or governmental policies
related to the items and services provided hereunder are
introduced or changed so as to materially adversely affect
either party to this Agreement, the parties agree in good faith
to renegotiate the terms of this Agreement. Furthermore, in the
event that any part of this Agreement is determined to violate
federal or state statutes, rules or regulations, HS and the
Company agree to renegotiate the terms of this Agreement in good
faith in order to comply with such statute, rule or regulation.
If this Agreement cannot be amended to permit the Company or HS
to comply with applicable law and continue on the same economic
terms and service standards, this Agreement may be terminated by
either party by giving the other party written notice of
termination at least thirty (30) days prior to the effective
date of such termination.
2. RIGHTS AND DUTIES OF THE COMPANY.
(a) HS shall determine, according to the Management Agreement, the
general work procedures to be followed at the work site by HS
Employees covered under this Agreement regarding performance of
their duties on behalf of the Company. The Company agrees to
comply with all applicable federal, state and local laws
affecting HS employees, and HS will, within twenty-four (24)
hours, notify the Company of any alleged violation.
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(b) The Company shall indemnify and hold HS, its employees,
shareholders, officers, directors and sales agents harmless from
and against any and all losses, liabilities, claims, demands,
damages, injuries, costs and expenses, of whatever nature
(including reasonable attorneys' fees and costs), arising as a
result of the acts or omissions of the Company or its agents.
Such agents shall not include HS or the HS Employees. This
Section 2(b) shall survive termination or expiration of this
Agreement.
(c) The Company agrees that it shall obtain and pay the
out-of-pocket costs of any required federal, state, county or
municipal licenses or permits required in connection with the
operation of its business or its utilization of the services of
any of the HS Employees. Subject to the prior review and
approval of the Company, HS will prepare and file on behalf of
the Company all applications and other filings for any required
Federal, State, County or Municipal licenses or permits required
in connection with the operation of the Pharmacy or its
utilization of the services of the HS Employees or any of its
personnel in the State of Colorado.
3. FEES.
(a) For services rendered under this Agreement, HS shall be entitled
to a fee as specified on Exhibit "A" hereto, entitled "Fee
Schedule." The fees are payable as specified below. The fees are
guaranteed until the first anniversary of the Commencement Date
of this Agreement set forth in Exhibit "A" hereto. On such date
and on each anniversary thereafter, HS may increase its fees by
a percentage equal to the percentage increase, if any, in the
United States Department of Labor Consumer Price Index for all
urban consumers (U.S. City Average) published by the Bureau of
Labor Statistics ("CPI") for the preceding twelve months.
(b) A late payment charge of two percent (2%) will be added to all
accounts not paid when due. Payment is due according to payment
policies stated below. An unpaid balance will also be subject to
a periodic charge of one and one-half percent (1 1/2%) per
calendar month until paid. HS reserves the right to suspend
services to the Company upon seven (7) days' prior written
notice of such suspension until full payment has been made on
any past due accounts.
(c) If for any reason whatsoever payment is not timely submitted to
HS for its services in accordance with the Agreement, it will be
considered a material breach of this Agreement and HS shall have
the right to immediately terminate this Agreement and enforce
its rights hereunder upon twenty (20) days' prior written notice
of termination, if such payment is not paid in full during such
20-day period.
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4. PAYMENT POLICIES.
(a) The Company shall make payment in cash, cashiers check, wire
transfer or funds on deposit, within thirty (30) days of the
receipt of HS's invoice. HS will generate invoices on a monthly
basis.
5. TERM OF AGREEMENT.
The term of this Agreement shall be two (2) years from the Commencement
Date as shown on Exhibit "A" attached hereto (hereafter referred to as "the
initial term"). Following the completion of the initial term, this Agreement
shall continue year to year until the Management Agreement is terminated or this
Agreement is terminated by mutual agreement of the parties. This Agreement shall
terminate automatically upon the termination of the Management Agreement.
Termination of this Agreement shall not affect any liabilities or obligations of
a party hereunder which have accrued prior to the termination date.
Notwithstanding any provision of this Agreement to the contrary, the Company's
obligations under this Agreement shall be subject in all respects to the
approval by the Women First HealthCare, Inc. Board of Directors and by the
holders of two-thirds of the outstanding shares of Series A Preferred Stock of
Women First HealthCare, Inc. If this condition is not satisfied or waived by the
Company within 45 days of the execution of this Agreement, this Agreement shall
be null and void and neither party shall have any obligations to the other
hereunder.
5. MISCELLANEOUS.
(a) The Company shall make payment in cash, cashiers check, wire
transfer or funds on deposit, within thirty (30) days of the
receipt of HS's invoice. HS will generate invoices on a monthly
basis.
(b) Assignability. This Agreement shall not be assigned by the
Company or HS without prior written consent of the other party,
which consent will not be unreasonably withheld or delayed. Any
attempt to assign any mutual rights, duties or obligations which
arise under this Agreement without such consent shall be void. A
reorganization, merger or transfer of stock will not constitute
an assignment. Each party consents to the assignment of this
Agreement to the purchaser of all or substantially all of such
party's assets, provided that all liabilities and obligations of
the assigning party are assumed in full by the purchaser.
(c) Severability. If any provision of this Agreement (or any portion
thereof) shall be held to be invalid, illegal or unenforceable,
the validity, legality or enforceability of the remainder of
this Agreement shall not in any way be affected or impaired
thereby.
(d) Governing Law. The validity of this Agreement and of any of its
terms or provisions, as well as the rights and duties of the
parties to this Agreement shall be governed by the laws of the
State of Colorado.
(e) Waiver. The failure by either HS or the Company to insist upon
strict performance of any of the provisions contained herein
shall in no way constitute a waiver of any of its rights as set
forth herein, at law or equity, or a waiver by either HS or the
Company of any other provision or
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subsequent default by the other in the performance of or
compliance with any of the terms and conditions set forth
herein.
(f) Headings. The headings in this Agreement are intended for
convenience or reference and shall not affect its
interpretation.
(g) Notices. Any notices (including notices of address changes)
under this Agreement must be in writing and must be delivered in
person or by nationally-recognized overnight courier (e.g.,
Federal Express) or by mail, postage prepaid, return receipt
requested, to the parties at the addresses set forth below:
HS: HEALTH SCRIPT
Attention: General Manager
0 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
With a copy to: Dura Pharmaceuticals, Inc.
Attention: Office of General Counsel
0000 Xxxx Xxxxxxxxx
Xxx Xxxxx, XX 00000
THE COMPANY: WOMEN FIRST PHARMACY SERVICES, INC.
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
With a copy to: Xxxxxx & Xxxxxxx
000 "X" Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Esq.
(h) Arbitration. Any dispute, claim or controversy arising under or
out of this Agreement or the interpretation thereof shall be
resolved by binding arbitration in the manner set forth in
Section 28 of the Management Agreement.
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ATTACHMENT D
FORM OF SUBLEASE AGREEMENT
18
24
SUBLEASE AGREEMENT
THIS AGREEMENT made this 30th day of September, 1998 between WOMEN FIRST
PHARMACY SERVICES, INC., a Delaware corporation ("Subtenant"), and HEALTH SCRIPT
a division of DURA PHARMACEUTICALS, INC., a Delaware corporation
("Sub-landlord").
RECITALS
WHEREAS, Inverness Venturers, a Colorado general partnership
("Landlord"), and Sub-landlord, as Lessee, entered into that certain Lease
Agreement, dated November 10, 1994 (the "Master Lease"). By the terms of the
Master Lease, the real property described in Section 1 of this Sublease, and in
Section 2.1 of the Master Lease is leased to Sublandlord for a term ending on
January 31, 2001, subject to earlier termination as provided in the Master
Lease. A copy of the Master Lease is attached to this Sublease as Exhibit "A"
and incorporated herein by this reference.
WHEREAS, Sub-landlord desires to sublease to Subtenant a portion of the
real property currently leased by Sub-landlord under the terms of the Master
Lease, and Subtenant desires to lease that property from Sub-landlord.
WHEREAS, The parties intend that, as a condition precedent to their
respective obligations hereunder, the Landlord shall first consent to this
Sublease by executing a written consent to this Sublease.
NOW THEREFORE, in consideration of the Subleased Premises (as defined
herein) and mutual covenants contained herein, and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged,
Sub-landlord and Subtenant agree as follows:
1. LEASING AND DESCRIPTION OF PROPERTY. Subject to the terms, conditions
and covenants set forth in this Sublease and the Master Lease, Sub-landlord
hereby leases to Subtenant, and Subtenant hereby leases from Sub-landlord,
approximately 225 square feet of the premises as set forth in the Master Lease,
as shown on the floor plan of the building attached hereto as Exhibit "B" (the
"Subleased Premises"). Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Master Lease.
2. TERM; OPTIONS TO EXTEND. This Sublease shall commence on the 30th day
of September, 1998 (the "Sublease Commencement Date"). The term of this Sublease
shall end on the 29th day of September, 2000. The term of this Sublease may be
extended for a one (1) year period upon written notice thereof delivered by
Subtenant to Sub-landlord no later than ninety (90) days prior to the expiration
of the term. Termination of this Agreement is automatic upon the termination of
the Pharmacy Management Agreement between Subtenant and Sub-landlord dated the
30th day of September, 1998. Notwithstanding any provision of this Sublease to
the contrary, Subtenant's obligations under this Sublease shall be subject in
all respects to the approval by the Women First HealthCare, Inc. Board of
Directors and by the holders of two-thirds of the outstanding shares of Series A
Preferred Stock of Women First HealthCare, Inc. If this condition is not
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satisfied or waived by Subtenant within 45 days of the execution of this
Sublease, this Sublease shall be null and void and neither party shall have any
obligations to the other hereunder.
3. PAYMENTS TO SUB-LANDLORD.
(a) Rent. Subtenant shall pay to Sub-landlord as annual base rent
("Base Rent") for the Subleased Premises of Twenty-Two U.S.
Dollars ($22.00) per square foot of subleased space, payable in
equal monthly increments. Base Rent shall commence once
Subtenant receives its pharmacy license from the Colorado State
Board of Pharmacy, and Base Rent shall be payable in advance
beginning on this date and on the first day of each calendar
month thereafter during the Sublease term. Base Rent shall
include those services and utilities described in Section 3 of
the Master Lease, for which Sub-landlord shall be responsible.
(b) Prorations. Base Rent due for any partial month shall be
pro-rated.
4. USE OF SUBLEASED PREMISES. Subtenant shall use the Subleased Premises
for only those uses permitted under the Master Lease.
5. QUIET ENJOYMENT. Sub-landlord covenants that Subtenant shall be
entitled to quiet enjoyment of the Subleased Premises, provided that Subtenant
complies with the terms of this Sublease.
6. CONSTRUCTION OF IMPROVEMENTS.
(a) Subtenant Improvements. Sub-landlord shall construct Subtenant
Improvements and make installations in, on or about the
Subleased Premises in accordance with plans and specifications
approved by Subtenant, Sub-landlord and Landlord. The work
described in the preceding sentences and the resulting
installations are referred to in this Sublease as the "Subtenant
Improvements".
(b) Cost of Subtenant Improvements. Sub-landlord, at Subtenant's
sole cost and expense, shall provide all Subtenant Improvements
necessary for Subtenant's business operation within and at the
Subleased Premises.
7. CONDITION OF SUBLEASED PREMISES.
(a) Compliance with Laws. To Sub-landlord's actual knowledge
(without any duty of Sub-landlord to investigate), the
construction, the current and proposed uses, and the operation
of the premises subject to the Master Lease and this Sublease
are in full compliance with applicable building and seismic
codes, environmental, zoning and land use laws, and other
applicable local, state and federal laws, regulations and
ordinances. Sub-landlord has not received written notice of any
non-compliance with the above requirements and, to
Sub-landlord's actual knowledge (without any duty of
Sub-landlord to investigate), is not aware of any situation
which, with the passage of time, would result in a notice of
such non-compliance being given with respect to the
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construction, current and proposed uses, or operation of the
premises subject to the Master Lease and this Sublease.
(b) Hazardous Substances. Subtenant shall have no liability or
responsibility for toxic or hazardous materials or substances in
existence on the Subleased Premises prior to Subtenant's
occupancy of the Subleased Premises or to the extent the same
result from Sub-landlord's acts or omissions, or which occur on
any portion of Sub-landlord's leased property not occupied by
Subtenant, unless caused by Subtenant, its agents, employees,
invitees or guests. Subtenant covenants and agrees not to
suffer, permit, use, introduce or maintain in, on, under or
about any portion of the Subleased Premises, any asbestos,
polychlorinated biphenyl, or any other hazardous or toxic
materials, wastes and substances which are defined, determined
or identified as such (including petroleum products if they are
defined, determined or identified as such) in any federal, state
or local laws, rules or regulations (whether now existing or
hereafter enacted or promulgated) or any judicial or
administrative orders or judgments, except for such materials,
wastes or substances as are customarily used in connection with
Subtenant's use of the Subleased Premises in accordance with
this Sublease, and Subtenant agrees that such materials, wastes
and substances will only be used, stored, transported and
disposed of in compliance with all applicable environmental
laws. Subtenant agrees that it will maintain Material Safety
Data Sheets for the Subleased Premises in accordance with
applicable law and will furnish copies thereof to Sub-landlord,
Landlord (or to any lender to Landlord) upon reasonable request
therefor from time to time. Subtenant shall indemnify, defend
and hold harmless Sub-landlord and its lenders from and against
any loss, cost, damage, liability, expense, suit, action or
order arising in connection with any breach by Subtenant of any
of the covenants and agreements set forth in the preceding
sentence.
Sub-landlord represents and warrants that, to its actual knowledge, without duty
to investigate:
(i) Sub-landlord has conducted its operations at the Subleased
Premises so as not to suffer, permit, use, introduce or maintain in, on, under
or about any portion of the Subleased Premises, any asbestos, polychlorinated
biphenyl's, or any other hazardous or toxic materials, wastes and substances
which are defined, determined or identified as such (including petroleum
products if they are defined, determined or identified as such) in any federal,
state or local laws, rules or regulations (whether now existing or hereafter
enacted or promulgated) or any judicial or administrative orders or judgments,
except for such materials, wastes or substances as were and are customarily used
in connection with Sub-landlord's use of the Subleased Premises in accordance
with the Master Lease; and
(ii) Such materials, wastes and substances have only been (and
prior to the commencement of this Sublease will only be) used, stored,
transported and disposed of in compliance with all applicable environment laws.
(a) Subtenant's Inspections and Acceptance. Subtenant shall perform
and shall solely rely upon its own inspections of the Subleased
Premises and shall fully satisfy itself as to the condition of
the Subleased Premises and all parts thereof prior to
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acceptance of possession of the Subleased Premises. Except as
expressly provided in this Sublease, Sub-landlord makes no
representation or warranty regarding the condition of the
Subleased Premises or the common areas or the fitness of the
Subleased Premises for Subtenant's intended use.
(b) Sub-landlord's Actual Knowledge. For purposes of this Sublease,
Sub-landlord's actual knowledge shall be deemed to be the actual
knowledge, without duty to investigate, of Xxxxxxx X. Xxxxx,
General Manager of Sub-landlord.
8. APPLICABILITY OF MASTER LEASE. This Sublease is subject and
subordinate to the terms and conditions of the Master Lease.
9. ASSUMPTION; INCORPORATION OF MASTER LEASE PROVISIONS AS SUBSTANTIVE
PARTS OF THIS SUBLEASE.
(a) Assumption. Except as otherwise expressly provided in this
Sublease, Subtenant hereby expressly assumes and agrees to
perform and comply with all the obligations required to be kept
or performed by the Sub-landlord under the provisions of the
Master Lease to the extent that they are applicable to the
Subleased Premises. In the event of any default (as event of
default is defined in Section 15 of the Master Lease which is
incorporated herein) by Subtenant under this Sublease, or under
any of the obligations assumed by Subtenant under the Master
Lease, Sub-landlord shall have the same rights and remedies
against Subtenant as those available to the Landlord under the
Master Lease. The foregoing notwithstanding, Subtenant shall not
assume the obligations of Sub-landlord under the following
Master Lease provisions: Sections 1-5, 7, 10-13 and 26-29;
provided, however, that nothing herein shall be deemed to
relieve Subtenant from complying with the covenants of these
sections.
(b) Use of Master Lease Provisions To Define Sub-landlord/ Subtenant
Rights and Obligations. To the extent this Sublease refers to or
incorporates specific provisions of the Master Lease in order to
define rights or obligations of Sub-landlord and Subtenant
between Sub-landlord and Subtenant under this Sublease (e.g., as
in Section 9.a., above), such references shall be deemed to
refer to and incorporate the Master Lease provision referenced
but with all appropriate defined terms revised to include
Sublease defined terms (e.g., the terms Lessor, Lessee and
Premises shall be deemed to refer to Sub-landlord, Subtenant and
Subleased Premises, as appropriate).
(c) Incorporation of Certain Master Lease Provisions. In addition to
other Master Lease provisions specifically referenced elsewhere
in this Sublease, the following provisions of the Master lease
are specifically incorporated herein by reference, and shall
define the rights and obligations of Sub-landlord and Subtenant
with respect to each other and the subject matters addressed
therein: Sections 6, 9, 14-19 and 21-25.
(d) Subtenant shall be required to perform alterations, additions or
improvements to the Sublease Premises in order to comply with
laws, ordinances, regulations
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or orders only to the extent that such compliance is required
due to Subtenant's particular use of the Sublease Premises.
10. OBLIGATIONS OF SUB-LANDLORD.
(a) Continuation of Master Lease. Sub-landlord will maintain the
Master Lease during the entire term of this Sublease, and will
not perform any act, or omit to perform any act not assumed by
Subtenant hereunder, which would result in a default under the
Master Lease (subject, however, to any earlier termination of
the Master Lease not resulting from the fault of Sub-landlord).
Sub-landlord agrees not to terminate the Master Lease or to
modify the Master Lease in a manner, which would materially,
adversely affect Subtenant's rights hereunder without the prior
written consent of Subtenant. Any modification made without that
consent shall, at Subtenant's election, be null and void and
shall have no effect on the rights of Subtenant under this
Sublease. Sub-landlord shall promptly deliver to Subtenant any
notice of default received from Landlord pursuant to the Master
Lease.
(b) Discontinuation of Master Lease. If the Master Lease is
terminated due to the fault of the Sub-landlord, the
Sub-landlord agrees to reimburse the Subtenant for its Subtenant
Improvements.
(c) Services and Utilities. Sub-landlord shall contract and pay for
all water, gas, heat, light, power, waste removal, sewer and
other utilities and services supplies to the Subleased Premises,
together with any taxes thereon.
11. INDEMNIFICATION.
(a) Sub-landlord's Obligation. Sub-landlord shall indemnify, defend
and hold harmless Subtenant and its officers, directors, agents,
and employees from and against any claims, damages, costs,
expense (including an amount equal to reasonable attorneys' fees
and costs), or liabilities arising out of or in any way
connected with Sub-landlord's performance under this Sublease
including, without limitation, claims, damages, costs, expenses,
or liabilities for loss or damage to any property, or for death
or injury to any person or persons in proportion to and to the
extent that such claims, damages, costs, expenses, or
liabilities arise from the negligence or willful acts or
omissions of Sub-landlord, its officers, directors, agents,
employees, or invitees.
(b) Subtenant's Obligation. Subtenant shall indemnify, defend and
hold harmless Sub-landlord and its officers, agents, and
employees from and against any claims, damages, costs, expenses
(including an amount equal to reasonable attorneys' fees and
costs), or liabilities arising of out or connected with
Subtenant's performance under this Sublease including, without
limitation, claims, damages, costs, expenses, or liabilities for
loss or damage to any property or for death or injury to any
person or persons in proportion to and to the extent that such
claims, damages, costs, expenses, or liabilities arise from the
negligence or willful acts or omissions of Subtenant, its
officers, directors, agents, employees, or invitees.
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12. INSURANCE. Notwithstanding the continuing obligation of the parties
to maintain insurance coverage as required by Section 12 of the Master Lease
with a single limit of not less than $1,000,000:
(a) Subtenant shall maintain insurance as follows (the following
requirements are supplementary to the Master Lease
requirements):
(i) Comprehensive or Commercial Form General Liability
Insurance (contractual liability included), on an
occurrence form, with minimum limits as follows:
Each Occurrence $1,000,000
Products/Completed Operations Aggregate $1,000,000
Personal and Advertising Injury $1,000,000
General Aggregate $5,000,000
(ii) Property Insurance, Fire and Extended Coverage Form in an
amount sufficient to reimburse Subtenant for all of its
equipment, trade fixtures, inventory, fixtures and other
personal property located on or in the Subleased Premises
including all leasehold improvements hereinafter
constructed or installed.
The insurance and the coverage referred to under Subsection (a)(i) and (a)(ii)
of this Section 12 shall be endorsed to include Landlord and Sub-landlord as
additional insured, and shall include cross-liability endorsements. Prior to the
Sublease Commencement Date, Subtenant shall furnish Sub-landlord with
Certificates of Insurance evidencing compliance with all requirements for
insurance under this Sublease. Such Certificates shall further provide for
thirty (30) days advance written notice to Sub-landlord of any modification,
change or cancellation of any of the above insurance coverage.
The coverage required herein shall not in any way limit the liability of
Subtenant, or its officers, directors, agents, or employees.
13. WAIVER OF SUBROGATION. Subtenant and Sub-landlord each hereby
release and relieve the other, and waive their entire right of recovery against
the other, for losses or damages arising out of or incident to the risks insured
against (or required to be insured against) under this Sublease and the Master
Lease, or insured against under any policy held by the releasing party and then
in effect, which losses or damages occur in, on or about the Subleased Premises,
and whether due to the negligence of Subtenant or Sub-landlord or their agents,
employees, contractors or invitees.
Each of Sub-landlord and Subtenant shall cause each insurance policy obtained by
it to provide that the insurance company waives all right of recovery by way of
subrogation against either party in connection with any damage covered by any
policy. If any insurance policy cannot be obtained with a waiver of subrogation,
or is obtainable only by the payment of an additional premium charge, the party
undertaking to obtain the insurance shall notify the other party of this fact.
The other party shall have a period of ten (10) business days within which to
agree to pay the additional premium if such a policy is obtainable at additional
premium charged,
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the other party is relieved of the obligation to obtain a waiver of subrogation
rights with respect to the particular insurance involved.
14. ASSIGNMENT AND SUBLETTING. Subtenant shall have no right to assign
or transfer its interest in this Sublease or any part thereof, or to sublet,
transfer or convey, in any manner, the Sublease Premises or any part thereof,
without the prior written consent of both Sub-landlord and Landlord.
Sub-landlord's consent shall not be unreasonably withheld. If Subtenant attempts
to assign or transfer its interest in this Sublease or any part thereof, or
attempts to sublet, transfer or convey the Sublease Premises or any part thereof
without first obtaining such written consents, then any such attempted
assignment, transfer, sublet or conveyance shall be null and void and of no
force or effect. Notwithstanding the foregoing, Subtenant shall have the right
to assign, sublease or transfer its interest in this Sublease to a wholly owned
subsidiary of Subtenant without Sub-landlord's written consent, provided
Subtenant obtains the written consent of Landlord for such assignment, sublease
or transfer in accordance with the Master Lease or a letter from Landlord
waiving the requirement of Landlord's consent for such assignment, sublease or
transfer.
15. REPAIR AND MAINTENANCE. Except as set forth in Subsection 15a.
hereto, Sub-landlord shall be solely responsible for the obligations set forth
in Section 8 of the Master Lease.
(a) Negligent Acts or Omissions of Subtenant. Notwithstanding the
foregoing, Subtenant will promptly pay to Sub-landlord the
reasonable costs of any repairs or maintenance required as a
result of negligent acts or omissions or willful conduct of
Subtenant or its officers, directors, agents, employees, or
invitees.
16. ALTERATIONS, MECHANICS' LIENS.
(a) Alterations. Subtenant shall have no right to make structural
alterations, improvements or additions to the Subleased
Premises. Subtenant shall have the right to make non-structural
alterations, improvements, additions or Utility Installations to
the Subleased Premises not exceeding two thousand dollars
($2,000.00) without the prior written consent of Sub-landlord.
All other alterations, additions, improvements and Utility
Installations shall require the prior written consent of
Sub-landlord and Landlord. Sub-landlord's consent shall not be
unreasonably withheld. Notwithstanding the foregoing, all
proposed alterations shall be subjected to satisfaction of the
requirements of the Master Lease.
(b) Condition at Termination. Upon termination of this Sublease,
Subtenant shall remove any fixtures, machinery and equipment
installed in the Subleased Premises by Subtenant unless mutually
agreed otherwise. Subtenant shall repair, at its sole cost, any
damage to the Subleased Premises caused by such removal. Upon
termination of this Sublease, Subtenant shall return the
Subleased Premises in the same condition as when delivered to
Subtenant, excepting reasonable wear and tear and alterations,
additions, improvements and Utility Installations approved in
writing by Sub-landlord and Landlord and removal of which
Landlord has not required. To the extent the Master Lease
requirements pertaining to surrender contain obligations
respecting the Subleased Premises in addition to those set forth
in this Section 16.b., the Subtenant
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shall perform all such additional obligations prior to
surrender. Sub-landlord shall have the same rights as lessor
under the Master Lease Section 16 in connection with the
Subleased Premises and Subtenant's surrender of same, and shall
have the right to exercise such rights as against Subtenant.
(c) Mechanics' Liens. Each party shall keep the Subleased Premises
free from any liens arising out of any work performed by,
materials furnished to, or obligations incurred by, each such
party, respectively.
17. ATTORNEYS' FEES. If any action or other proceeding arising out of
this Sublease is commenced by either party to this Sublease concerning the
Subleased Premises, then as between Sub-landlord and Subtenant, the prevailing
party shall be entitled to receive from the other party, in addition to any
other relief that may be granted, the reasonable attorneys' fees, costs, and
expenses incurred in the action or other proceeding by the prevailing party.
18. NOTICES. All notices and demands of any kind which any party may be
required or desires to serve upon the other parties under the terms of this
Sublease shall be in writing, and shall be served upon the other parties at the
addresses set forth beside their names set forth below. These addresses may be
changed by a written notice given in accordance with this Section.
To Sub-landlord: Health Script
0 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: General Manager
Facsimile number: (000) 000-0000
with a copy to: Dura Pharmaceuticals, Inc.
0000 Xxxx Xxxxxxxxx
Xxx Xxxxx, XX 00000
Attn: Office of the General Counsel
Facsimile number: (000) 000-0000
To Subtenant: Women First Pharmacy Services, Inc.
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: President
Facsimile number: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxxx
000 "X" Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Facsimile number: (000) 000-0000
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Notices may be sent only by the following means: personal delivery; United
States mail, registered or certified, return receipt requested; or telephonic
facsimile process.
Notices shall be effective only upon actual receipt by the party to whom notice
is given or refusal to accept delivery. No notice shall be effective except as
delivered in a manner prescribed in this section. It is intended that the party
sending a notice shall bear the risk of non-delivery or late delivery.
19. BINDING EFFECT. This Sublease shall be binding upon and inure to the
benefit of the permitted successors and assigns of Sub-landlord and Subtenant.
20. ENTIRE AGREEMENT. This Sublease, together with the exhibits hereto
and incorporated herein, sets forth the entire agreement relating to the
occupancy of the Subleased Premises by Subtenant. No waiver of any provision of
this sublease or of any breach or default hereunder shall be held or waivers of
any other provision or any other breach or default. No agreement or
understanding pursuant to or contemplated by this Sublease and no consent to,
change in or modification of, any provision of this Sublease shall be effective
unless contained in a writing which is signed by the party against whom
enforcement is sought.
21. TIME OF ESSENCE. Time is of the essence of this Sublease.
22. LANDLORD'S CONSENT. This Sublease shall not become effective until
Landlord has given its written consent to this Sublease.
23. LENDER'S CONSENT. If any security documents which cover the
subleased premises provide the lender with consent rights with respect to this
Sublease and, despite the use of reasonable efforts, such lender withholds its
consent to such Sublease then, at the written election of Sub-landlord, this
Sublease shall automatically terminate without further liability or obligation
on the part of Sub-landlord or Subtenant, except for those provisions which by
their terms survive the termination of the Sublease.
24. COUNTERPARTS. This Sublease may be executed in oe or more
counterparts, all of which will be considered one and the same agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Sublease as the date
first set forth above.
THE COMPANY
By:
-----------------------------------------------------
Signature:
-----------------------------------------------------
Title:
-----------------------------------------------------
HEALTH SCRIPT
By:
-----------------------------------------------------
Signature:
-----------------------------------------------------
Title:
-----------------------------------------------------
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IN WITNESS WHEREOF, the parties have executed this Sublease as the date
first set forth above.
THE COMPANY
By: XXXXX X. XXXX
-----------------------------------------------------
Signature: /s/ Xxxxx X. Xxxx
-----------------------------------------------------
Title: President & CEO
-----------------------------------------------------
HEALTH SCRIPT
By:
-----------------------------------------------------
Signature:
-----------------------------------------------------
Title:
-----------------------------------------------------
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IN WITNESS WHEREOF, the parties have executed this Sublease as the date
first set forth above.
THE COMPANY
By:
-----------------------------------------------------
Signature:
-----------------------------------------------------
Title:
-----------------------------------------------------
HEALTH SCRIPT
By: XXXXXXX XXXXX
-----------------------------------------------------
Signature: /s/ Xxxxxxx Xxxxx
-----------------------------------------------------
Title: General Manager
-----------------------------------------------------
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EXHIBIT A
MASTER LEASE
37
ATTACHMENT E
CALCULATION OF PHARMACY MANAGEMENT FEE
PHARMACY MANAGEMENT FEE
Minimum Maximum Monthly Fee and Per Rx Fee(*)
Orders per month ***
Orders per month
Orders per month
Orders per month
Orders per month
Orders per month
Orders per month
Orders per month
Orders per month
Orders per month
Orders per month
Orders per month
Orders per month
Orders per month
Orders per month
Orders per month
(*) Per RX assessed on all orders dispensed.
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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