EXHIBIT 10.10
SUPPLY AGREEMENT
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This Supply Agreement dated this 14th day of January, 1999, between McKesson
U.S. Health Care, a division of McKesson Corporation ("McKesson") and Planet Rx,
Inc. ("Customer") shall be to establish a [+] year program for the supply of
prescription drugs and other health and beauty care products by McKesson to
Customer's centralized pharmacy (referred to herein as "Facility"). The parties
hereto agree as follows:
1. MERCHANDISE
For purposes hereof, "Merchandise" shall comprise all items normally
stocked or drop-shipped by McKesson Drug Distribution Centers servicing the
48 contiguous states, including prescription drugs, OTC drugs, home health
care products, DME, health and beauty aids and sundries. This Agreement
does not apply to merchandise sold to Customer by McKesson Corporation
divisions or subsidiaries other than McKesson Drug Company.
2. TERM
The term of this Agreement shall be for the [+] year period commencing on
January 1, 1999, and during such period Customer agrees to designate
McKesson as its primary wholesale supplier of Merchandise and to purchase
from McKesson substantially all of the requirements of its Facility(ies)
for Merchandise and other items covered hereunder.
3. ORDERING AND DELIVERY
Prescription products will be delivered to Customer's Facility up to [+]
times per week, on mutually agreed upon days. Orders transmitted by 9:30
p.m. local time Sunday through Thursday will be delivered the next day.
Additional deliveries will be available on a mutually agreed upon schedule.
4. PAYMENT TERMS
A. Except as provided in Section 4(J) regarding opening orders, the
payment terms options for the Merchandise covered by this Agreement
are as follows:
Standard Semi-Monthly Payment Terms
-----------------------------------
Payment for Merchandise delivered to Customer's Facility shall be paid
by Customer as follows: Invoices dated from the [+] to the [+] of the
month are due and payable on the [+] day of the [+] month. Invoices
dated from the [+] to the [+] are due and payable on the [+] of the
[+] month.
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
Weekly Payment Terms
--------------------
Invoices dated from Monday through Friday are due by [+] of the
following week. A [+]% reduction in the cost of goods markup shall
apply.
Prepayment Incentives
---------------------
Prepayment Terms (30 day, 15 day and 7 day): The prepayment is a one-
time payment equivalent to thirty (30) or fifteen (15) or seven (7)
days worth of purchases (based on the most recent three-month purchase
history) which is held as a deposit by McKesson. The amount of the
required deposit will be adjusted quarterly, and may be adjusted as
often as monthly, to cover increases or decreases in purchase volume.
Following such one-time payment, all purchases are payable under the
Standard Semi-Monthly Payment Terms as described above.
Customer shall be entitled to a reduction in the markup set forth in
the cost of goods schedule for prepayment if Customer elects this
prepayment option. The prepay incentive shall be as follows:
Prepay Incentive Markup Reduction
---------------------------------
30 Days [+]%
15 Days [+]%
7 Days [+]%
B. If any of the above-specified due dates falls on a weekend day or
holiday, payment is due on the [+].
X. XxXxxxxx encourages the use of Electronic Funds Transfer ("EFT"). If
EFT is used as the Customer's method of payment, a [+]% reduction in
the cost of goods markup shall apply.
D. Any payments made after the due date indicated herein shall result in
a [+] percent ([+]%) (or the maximum amount permissible under
applicable law, if lower) increase in the purchase price of the
Merchandise. A [+] percent ( [+] %) service charge (or the maximum
amount permissible under applicable law, if lower) will be imposed
semi-monthly on all balances delinquent more than [+] days.
E. Customer agrees to render payment in full to McKesson on the
applicable due date as specified in this Agreement without (i) making
any deductions, short payments, or other accounts payable adjustments
to such payment obligation except as specified herein in Section 8
(5); or (ii) seeking to condition such remittance on any demand for or
receipt of proofs of delivery. Any accounts payable adjustments
claimed by Customer shall require prior written authorization
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
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of McKesson and must be supported by accompanying detail documenting
the basis for any such requested adjustments.
F. Customer hereby grants to McKesson a purchase money security interest
for all Merchandise shipped to Customer to secure the price of the
Merchandise and all related charges. Customer agrees to execute from
time to time such financing statements as McKesson may request for the
purpose of perfecting McKesson's security interest.
G. This Agreement is conditioned upon Customer's maintaining a sound
financial condition throughout the term hereof and to that end,
Customer agrees to promptly substantiate in writing, at McKesson's
request, the existence of such condition with audited financial
statements and any other supporting information required by McKesson.
H. Each company doing business with McKesson is required to negotiate its
payment terms and credit line with McKesson individually, based upon
such company's individual financial and risk characteristics. Nothing
in this Agreement is intended to be, nor shall it be construed as, a
binding obligation or continuing commitment by McKesson to extend
credit or payment terms options and all such terms and conditions
shall be subject to the review and approval of McKesson's Financial
Services Department.
X. XxXxxxxx reserves the right, in its sole discretion, to change a
payment term (including imposing the requirement of cash payment upon
delivery) or limit total credit, if (i) McKesson concludes there has
been a material change in the Customer's financial condition or an
unsatisfactory payment performance; or (ii) Customer ceases to meet
McKesson's credit requirements or McKesson determines that the
Customer is likely to cease meeting such requirements. Upon the
occurrence of any of the above-specified events, McKesson further
shall be entitled to suspend or discontinue the shipment of any
additional orders to Customer's Facility.
J. Opening orders shall include any new Facility orders submitted to
McKesson up to the end of the second week after the Facility begins
filling prescriptions. For purposes hereof, the term "new Facilities"
shall not include (i) any existing Facility of Customer that changes
its address; or (ii) any Facility acquired through acquisition,
merger, partnership or other business combination by Customer.
Opening orders for new Facilities of Customer will be billed at the
normal cost for both Rx and OTC Merchandise as determined by the Cost
Plus Markup schedule set forth in Section 5 below. Opening order
invoices will receive [+] ([+]) month payment terms, subject to review
and approval by McKesson's Credit Department. Customer's opening
orders for its initial Facility shall be due and payable on [+].
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
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5. COST OF GOODS
A. In consideration for the Cost of Goods specified herein, Customer
expressly commits to purchase no less than [+]% of its total volume of
Merchandise purchased from wholesalers from McKesson during the term
of this Agreement ("Volume Purchase Commitment"). Due to the start-up
nature of the Customer's business, McKesson will xxxx Merchandise
purchased hereunder based on the $[+]-$[+] volume bracket amount
category specified in Section 5.C below until the Customer's purchases
surpass this purchase volume level. If after the first year of this
Agreement Customer has not achieved a monthly average purchase volume
amount of at least $[+] per Facility, McKesson, in addition to the
other rights and remedies available to it hereunder, reserves the
right in its sole discretion to redetermine the Cost of Goods pricing
specified below.
B. Subject to the terms and conditions of this Section, the Cost of Goods
for Merchandise delivered to Customer shall be Cost plus the
applicable markup as specified below. Except in the case of contract
items as discussed below, "Cost" for the purposes of this Agreement
shall mean the manufacturer's published acquisition cost (exclusive of
cash discounts) on the date of McKesson's invoice to Customer,
adjusted for selected bonus goods, manufacturers' off-invoice
allowances, and manufacturers' deal prices to be made available to
Customer in accordance with McKesson's established policies. For
purchases of Merchandise with respect to which Customer has entered
into a vendor contract with a manufacturer ("Contract Products")
loaded with McKesson, "Cost" shall mean the "bid price" of the product
as set forth in the vendor contract.
C. Subject to the terms and conditions herein, the Cost of Goods under
this Agreement shall be in accordance with the pricing schedule set
forth below. After the Customer achieves the maximum purchase volume
for the initial volume bracket category specified below, the
Customer's Cost of Goods shall thereafter be subject to monthly review
by McKesson and will be adjusted, if and to the extent necessary, to
reflect the Customer's actual monthly average purchase volume.
Cost Plus Markup
Chain-wide Monthly Average Based on Standard
Volume Per Facility Semi-Monthly Payment Terms
(net of returns, allowances and rebates) RxOTC
----------------------------------------------
[+]
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
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[+]
Net Billed Items: The purchase price for selected Merchandise,
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including but not limited to the following product lines, will be net-
billed and not covered by the above-specified Cost of Goods pricing:
[+].
X. XxXxxxxx believes that the price, value, and quality of the
Merchandise delivered to Customer pursuant to this Agreement will be
market competitive at all times throughout the term of this Agreement.
In the event that at any time during the term of this Agreement there
is a material decline in the prevailing market price for comparable
products to similarly situated purchasers, Customer may so notify
McKesson and McKesson and Customer will meet and negotiate in good
faith an adjustment in the pricing with respect to future purchases as
appropriate to reflect such price decline. Nothing in this paragraph
is intended to restrict McKesson in its ability to meet individual
competitive situations.
6. SERVICE LEVEL
McKesson shall extend to Customer a service level guarantee on Rx
Merchandise purchased hereunder if McKesson acts as the primary supplier of
such pharmaceutical products to Customer. If such service level (based on
the definition below) falls below [+]% for [+] consecutive quarters,
McKesson shall pay Customer a sum equal to [+]% of net Rx Merchandise sales
to Customer's Facility(ies) for those quarters.
Service Level Guarantee - Definition
------------------------------------
"Service Level" shall mean a percentage amount calculated as follows:
[+] = Service Level
where,
A=[+]
B=[+]
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
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C=[+]
Any agreed upon Service Level Guarantee shall be subject to the following:
i) The Service Level Guarantee shall not apply within sixty
(60) days after the later of (i) the commencement date of
the term of the Supply Agreement entered into between
Customer and McKesson, or (ii) the date on which Customer
has furnished to McKesson reasonably accurate estimates of
its pharmaceutical products requirements.
ii) The Service Level Guarantee shall not apply for any month in
which Customer purchases exceed [+] percent [+] of its prior
month's purchases.
iii) Items that (i) are new to the market or (ii) have not been
previously ordered by Customer shall require a one-month
startup period.
7. MANUFACTURERS' PRICE CHANGE COMMUNICATIONS
Advance notice of prescription drug increases, when and if received from
the manufacturer, shall be submitted to Customer in the fastest manner
practicable. McKesson agrees to use fax communication to provide prompt
information related to open buy price increases, special deals, extended
dating or investment buy opportunities.
8. RETURNED GOODS
A. Credits for returned goods from McKesson "("Credits")" are divided
into four categories, depending on the reason for the claim. Credits
will be issued for any of the following reasons:
1) Non-merchandise problems, such as shortages and pricing errors;
2) McKesson merchandise received in error;
3) Recalls; and
4) Outdated merchandise (defined as items with less than 6 months
dating)
B. The amount of credit allowed by McKesson will vary as follows:
1) [+]% credit will be given for:
-----------
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
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a) Pricing errors, shipping errors and billing errors;
b) Shortages (required to be phoned into the Distribution
Center within 48 hours of receipt of Merchandise);
c) Ordering errors (must be returned within 30 days of
receipt);
d) Manufacturer recalls;
e) Items received by McKesson's customer with less than
six (6) months dating; and
f) Merchandise that had concealed damage.
Invoice number is required in each of the above-specified instances,
except recalls, for full credit.
2) [+]% credit will be given for:
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Clean, salable merchandise with at least nine (9) months dating
returned more than 30 days after store receipt.
3) [+]% credit will be given for:
-----------------------------
a) Unsalable merchandise which can be returned to
manufacturer;
b) Outdated items (subject to the approved vendor list);
and
c) Salable merchandise with price tickets not removed.
---
4) [+] will be given for:
---------------------
a) Merchandise damaged in Customer's Facility;
b) Merchandise from manufacturers not listed on the
approved vendor list; and
c) Merchandise not purchased from McKesson.
These items will be sent back to the Facility which initiated the return.
5) If McKesson has failed to provide Customer with Credits as
identified above within fifteen (15) business days of McKesson's
receipt of notice of such Credit, then Customer may defer payment
of an amount equal to such Credits until the earlier of
McKesson's issuance of a credit memorandum to Customer in such
amount or McKesson's written notice that it has
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
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determined that no credit or a lower credit was required in
accordance with the terms of this Agreement.
9. CUSTOMER SUPPORT
A. A National Account Executive will be assigned to Customer's
headquarters and will hold regular meetings and business review to
identify business opportunities and address Customer's needs.
B. The designated National Account Manager will become the first contact
for headquarters when Customer requires assistance for issue
resolution.
C. National Account Customer service personnel will be available at the
McKesson Premier Service Center from 8 a.m. EST to 8 p.m. EST Monday
through Friday. Technical and emergency support is available 24 hours
a day, seven (7) days a week.
D. Customer will be provided the names and telephone numbers of its key
contacts at McKesson as well as the names and telephone numbers of
McKesson's designated support personnel.
10. CONTRACT MANAGEMENT
X. XxXxxxxx agrees to service all manufacturers' contracts negotiated by
Customer, provided such manufacturers are approved suppliers of
McKesson. Merchandise will be supplied at Customer's negotiated bid
price plus McKesson's applicable markup as described above in the Cost
of Goods section.
B. Customer's eligibility for participation under a vendor contract must
be authorized by the vendor and Customer's group purchasing
organization, if applicable, before the contract is loaded by McKesson
for Customer. Customer shall be liable for unpaid chargebacks
resulting from eligibility issues.
C. In the event a vendor (i) makes an assignment for the benefit of
creditors, files a petition in bankruptcy, is adjudicated insolvent or
bankrupt, or if a receiver of trustee is appointed with respect to a
substantial part of the vendor's property or a proceeding is commenced
against it which will substantially impair its ability to pay on
chargebacks or (ii) otherwise defaults in the payment of chargebacks
to McKesson, Customer shall be invoiced and become liable for the
unpaid chargebacks allocable to its purchases from such vendor.
11. GENERIC PHARMACEUTICALS
Customer agrees to fully participate in McKesson's Select Generics Program
through its auto-substitution feature and to thereby designate this program
as Customer's primary source of generic pharmaceuticals. In consideration
for the above commitments, McKesson will extend to Customer McKesson Select
Generics contract pricing in
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accordance with the attached. This contract is based upon McKesson Select
Generics Program pricing less [+]%. Prices are subject to change; provided
however, the contract discount percentage made available under this
Agreement will remain the same. A quarterly rebate shall be paid to
Customer in accordance with the following schedule based on such above-
specified participation:
Quarterly McKesson Select
Generics Volume (net of Quarterly Rebate % on Net
returns, allowances and rebates)McKesson Select Generics Purchases
------------------------------------------------------------------
[+]
Customer shall be rebated at [+]% for the [+] ([+]) months of this
Agreement and thereafter rebated at the earned rate based on actual
quarterly purchases. The rebate check will be due to Customer no later than
the 30th of the month following the end of the quarter. A [+]% penalty will
be paid to Customer on rebate payments received after the applicable due
date as defined above.
12. REPACKAGED PHARMACEUTICALS
A competitive and comprehensive program will be made available to Customer
for repackaged pharmaceutical products. Such products shall be net-billed
with an additional volume rebate to be paid to Customer's headquarters on a
quarterly basis.
Quarterly RxPak
Volume (net of returns, Quarterly Rebate %
allowances and rebates)on Net RxPak Purchases
---------------------------------------------
[+]
Customer shall be rebated at [+]% for the [+] ([+]) months of this
Agreement and thereafter rebated at the earned rate based on actual
quarterly purchases. The rebate check will be due to Customer no later than
the 30th of the month following the end of the quarter. A [+]% penalty will
be paid to Customer on rebate payments received after the applicable due
date as defined above.
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
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13. SYSTEM SERVICES AND EQUIPMENT
The following systems and services will be made available to Customer by
McKesson:
A. Telxon electronic order entry equipment (including shelf wand) [+].
B. Item price stickers, [+], with Customer custom pricing, where
required, and other features, to the extent applicable to Customer,
such as:
1) Department number
2) Invoice cost
3) Month and year ordered
4) Facility name
5) AWP or retail pricing
(Note: Each feature is available for both Rx and OTC.)
C. Bar-coded shelf labels, [+].
D. Consolidated Quarterly Purchase Reports for all of Customer's Facility
purchases, [+].
E. Monthly report of controlled substances purchased from McKesson Drug
for each Facility, [+].
F. A complete catalog or microfiche of items stocked by McKesson's
Distribution Centers, [+].
G. Electronic price update information will be provided weekly, [+].
H. [+] EconoLink systems shall be provided to Customer [+]. [+] will be
provided to its headquarters and [+] to its Memphis dispensing
Facility. EconoLink shall be subject to a separate license agreement
between the parties governing use and maintenance.
I. OmniLink: Terms and conditions for utilization of McKesson's OmniLink
program will be agreed to under separate contract.
14. TERMINATION
A. Failure to make any payment when due in accordance with the terms of
this Agreement shall constitute a default. Any other material breach
of this Agreement by either party shall constitute a default if not
cured within thirty (30) days after written notice of such breach is
given by the non-breaching party.
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
10
Upon default by either party, the other party may terminate this
Agreement on five (5) days' written notice.
B. Either party may terminate this Agreement without cause by providing
the other party with [+] days' prior written notice.
C. Either party may, on ten (10) days written notice, terminate this
Agreement:
1) If the other party shall file any petition under any bankruptcy,
reorganization, insolvency or moratorium laws, or any other law
or laws for the relief of or in relation to the relief of
debtors; or
2) If the other party shall file any involuntary petition under any
bankruptcy statute or a receiver or trustee shall be appointed to
take possession of all or substantial part of the assets of the
party which has not been dismissed or terminated within sixty
(60) days of the date of such filing or appointment; or
3) If the other party shall make a general assignment for the
benefit of creditors or shall become unable or admit in writing
its inability to meet its obligations as they mature; or
4) If the other party shall institute any proceedings for
liquidation or the winding up of its business other than for
purposes of reorganization, consolidation or merger; or
5) If the other party's financial condition shall become such as to
endanger completion of its performance in accordance with the
terms and conditions of this Agreement.
X. XxXxxxxx may, at its own discretion, terminate this Agreement on sixty
(60) days written notice to Customer upon or at any time following the
sale or transfer of the stock or assets of Customer or a controlling
interest therein, or a change in the effective control of the
management of Customer; provided however, this Section 14.C shall not
apply if the change of control is due to an Initial Public Offering
(IPO) of Customer.
E. In the event of a termination hereunder the following continuing
obligations and liabilities shall survive termination and remain in
full force and effect:
1) Liability for accounts receivable balances or any other payment
due hereunder to the other party at the date of or upon the
occurrence of such termination; and
2) Obligations imposed on each party under the Proprietary and
Confidentiality Information section set forth below.
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
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15. PROPRIETARY AND CONFIDENTIAL INFORMATION
A. Any and all accounts, records, books, files, and lists regarding any
transaction provided for or contemplated hereunder, shall be
confidential and proprietary to the party creating or generating such
information. This Agreement, and the terms and conditions hereof, are
confidential. The parties expressly agree to maintain such terms and
conditions in confidence, and shall take every precaution to disclose
the contents of this Agreement only to those employees of each of the
parties who have a reasonable need to know such information.
B. Customer and McKesson each acknowledge that, in connection with their
respective businesses, they have developed certain operating manuals,
symbols, trademarks, trade names, service marks, trade secrets,
customer lists, procedures, formulas, and other patented, copyrighted,
or legally protected materials which are confidential and proprietary
to each of them.
C. Neither party may disclose the terms of this Agreement during the term
hereof and for an additional period of thirty-six (36) months
following the effective date of expiration or other termination of
this Agreement. Furthermore, except upon the prior written consent of
the other party, neither party may divulge, disclose, communicate, or
use any of the other party confidential or proprietary information
generally described in Subsection A and B above, in any manner or for
any purpose, including, without limitation, use in advertising or for
promotional materials, except upon the prior written consent of the
other party. A party hereto may refuse consent to the use of its
confidential or proprietary information for any or no reason. In the
event that any such confidential or proprietary information is used
during the course of this Agreement it shall retain its confidential
and proprietary nature and shall be returned immediately to its owner
or destroyed upon termination of this Agreement. Notwithstanding
anything herein to the contrary, nothing in this subsection shall
require either party to maintain in confidence any information,
materials, or data which is in the public domain, enters the public
domain through no fault of such party, was in possession of the party
prior to being furnished to it by the other, was supplied to the party
by a third party or parties lawfully in possession thereof, or which
the party is required to divulge pursuant to process of any judicial
or governmental body of competent jurisdiction, provided that notice
of receipt of such process is given to the other.
16. ALTERNATE SERVICE
If service from any McKesson distribution center to any Facility of the
Customer is interrupted or delayed because of strike, lockout, labor
dispute, fire or other casualty, or any other reasons beyond the reasonable
control of McKesson, McKesson will take such action as may be reasonably
necessary, without additional cost or expense to Customer, to maintain
service as mutually agreed upon to the affected Facility from an alternate
McKesson Distribution Center.
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17. NOTICES
All notices pertaining to this Agreement shall be delivered in person, sent
by certified mail, delivered by air courier, or transmitted by facsimile
and confirmed in writing (sent by air courier or certified mail) to a party
at the address or facsimile number shown in this Section, or such other
address or facsimile number as a party may notify the other party from time
to time. Notices delivered in person, and notices dispatched by facsimile
prior to 4:00 p.m. and confirmed, shall be deemed to be received on the day
sent. All other facsimiles and notices shall be deemed to have been
received on the business day following receipt; provided, however, if such
day falls on a weekend or legal holiday, receipt shall be deemed to occur
on the next business day. Notices may also be transmitted electronically
between the parties, provided that proper arrangements are made in advance
to facilitate such communications and provide for their security and
verification.
If to McKesson:
McKesson Corporation
Central Regional Xxxxxx
0000 Xxxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxx Xxxxxx
Senior Vice President, Group Sales Operations
Fax:(000) 000-0000
If Customer:
Planet Rx, Inc.
000 Xxxxxx Xxxxx Xxxx.
Xxxxx 000
Xx. Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Chief Executive Officer
Fax:(000) 000-0000 and (000) 000-0000
cc: H. Xxxxxxx Xxxxx
0000 Xxxxxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
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18. MISCELLANEOUS
A. This Agreement embodies the entire agreement between the parties with
regard to the subject matter hereof and supersedes all prior
agreements, understandings and representations with the exception of
any promissory note, security agreement or other credit or financial
related document(s) executed by Customer or between Customer and
McKesson. This Agreement may not be modified, supplemented or extended
except by a writing signed by both parties.
B. This Agreement supersedes any and all prior McKesson agreements and
discount plans in which any Customer Facility may currently be
participating.
C. Except as provided above in the Alternate Service section, neither
party shall have any obligation hereunder for failure or delay of
performance due to fire, shortage of materials or transportation,
government acts, or any other cause beyond its control.
D. Neither party shall have the right to assign this Agreement or any
interest therein without the prior written consent of the other party,
and any such attempted assignment shall be without effect, except that
either party may, without the consent of the other, assign this
Agreement to an affiliate of such party and except that this provision
shall not be applicable to any corporate reorganization of McKesson,
including but not limited to any merger, reincorporation or sale of a
significant portion of McKesson's assets.
E. This Agreement shall be construed in accordance with the laws of the
State of California without regard to the provisions of Section 1654
of the California Civil Code or the rules regarding conflict of laws.
F. If any provision of this Agreement shall be held invalid under any
applicable law, such invalidity shall not affect any other provision
of this Agreement. The parties agree to replace any such invalid
provision with a new provision which has the most nearly similar
permissible economic effect.
G. The failure of either party to enforce at any time or for any period
of time any one or more of the provisions thereof shall not be
construed to be a waiver of such provisions or of the right of such
party thereafter to enforce each such provision.
H. If any federal, state, or local tax currently or in the future is
levied upon McKesson in a jurisdiction where either McKesson or
Customer does business and such tax relates or applies to the
Merchandise or any transactions covered by this Agreement (excluding
taxes imposed on McKesson's net income), the Cost of Goods to the
involved Facility will be increased a corresponding percentage amount.
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I. Customer represents and warrants that the above conditions, including
prices, rebates, terms and delivery, have been made available to its
Facility by wholesale drug competitors of McKesson in the areas
covered by this Agreement.
J. Customer agrees to comply fully with all federal, state and local laws
and regulations applicable to the purchase, handling, sale or
distribution of the Merchandise and to defend, indemnify and hold
McKesson harmless from any and all liability arising out of or due to
Customer's nonadherence with such legal or regulatory requirements.
K. If and to the extent any product discounts, rebates or other
purchasing incentives are earned by or granted to Customer and paid by
McKesson under this Agreement, then applicable provisions of the
Medicare/Medicaid and state health care fraud and abuse/antikickback
laws and regulations (collectively, "fraud and abuse laws") may
require disclosure of the applicable price reduction on customer's
claims or cost reports for reimbursement from governmental or other
third party health care programs or provider plans. Customer agrees to
comply with all applicable provisions of the fraud and abuse laws and
to defend, indemnify and hold McKesson harmless for any failure on its
part to do so.
L. Participation hereunder by Customer's Facility in McKesson's Preferred
Provider Network may be terminated by McKesson if such Facility fails
to comply with the terms and conditions of this Agreement or the
M.P.P.N. Agreement.
X. XxXxxxxx shall be entitled at all times to set off any amount owing at
any time from Customer to McKesson against any amount payable at any
time by McKesson to Customer whether arising under this Agreement or
otherwise. For purposes of this Section, Customer and McKesson in each
case shall include its subsidiaries and affiliates.
N. Whenever possible, each provision of this Agreement shall be
interpreted so as to be effective and valid under applicable law, but
if any provision of this Agreement should be prohibited or invalid
under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity without invalidating the
other of such provision or the remaining provisions of this Agreement.
O. The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
P. This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed an original instrument, but
all such counterparts together shall constitute one agreement.
15
IN WITNESS WHEREOF the parties have caused this Agreement to be duly executed as
of the date and year written below and the persons signing warrant that they are
duly authorized to sign for and on behalf of the respective parties. This
Agreement shall be deemed accepted by McKesson only upon execution by a duly
authorized representative of McKesson.
PLANET RX, INC. McKESSON U.S. HEALTH CARE,
a division of McKesson Corporation
By: ____________________________ By: _______________________________________
Name: Xxxxxxx X Xxxxxxx Name: Xxxx X. Xxxxxxx
------------------------- ------------------------------------
(Print or Type) (Print or Type)
Title: Chief Executive Officer Title: Group President, Customer Operations
------------------------- ------------------------------------
Date: __________________________ Date: _____________________________________
