EXHIBIT 10.17
EXECUTION COPY
STRATEGIC RELATIONSHIP AGREEMENT
THIS STRATEGIC RELATIONSHIP AGREEMENT (this "Agreement"), dated as of April
30, 1999, is by and between VWR Scientific Products Corporation, a Pennsylvania
corporation ("VWR"), and Chemdex Corporation, a Delaware corporation
("Chemdex").
BACKGROUND
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VWR is a distributor of laboratory supplies and equipment. Any of such
supplies and equipment which are purchased from suppliers that are part of VWR's
core supplier portfolio or which are available from time to time on VWR's web
site or through its electronic catalog are hereinafter referred to as VWR's
"Core Products." From time to time, VWR's customers order Core Products from VWR
along with other products that are not among VWR's Core Products ("Third Party
Products"). Currently, VWR offers to purchase Third Party Products for certain
customers and distribute such Third Party Products to VWR's customers (each such
customer, a "Third Party Customer").
Chemdex is a provider of Internet purchasing services. It provides an
electronic marketplace which brings together buyers and sellers of laboratory
chemicals and other products.
Pursuant to a Common Stock Purchase Agreement, dated March 5, 1999, as
amended in certain respects, and for convenience restated in its entirety, by
the Amended Common Stock Purchase Agreement dated April 23,1999 (as so amended,
the "Purchase Agreement"), VWR purchased shares of capital stock in Chemdex in
consideration for certain rights relating to a list of the Third Party
Customers, as more fully described in the Purchase Agreement. In addition, VWR
and Chemdex intend to work jointly to create a comprehensive electronic
purchasing medium that will offer a single electronic point of contact for all
VWR customers in their ordering and purchasing of Core Products and Third Party
Products (the "System"). The System is not intended to be or become the sole
means (electronic or otherwise) by which a customer will have access to
purchasing from VWR or Chemdex.
VWR and Chemdex desire to set forth herein the terms and conditions of
their joint effort.
1. DESCRIPTION OF THE SYSTEM.
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1.1 General. The System developed and offered by Chemdex and VWR will
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include a front-end user interface produced by Chemdex which has traditional
purchasing application functionality. VWR and Chemdex shall agree on the form
and content of the System's front end-user interface. The front end-user
interface of the System shall be conspicuously and prominently branded
"VWR/Chemdex." The System will provide access to all products in the
VWR catalog, all VWR franchise suppliers, and all VWR services (including order
processing and physical distribution), as well as access to the Chemdex
electronic marketplace for the purchase of Third Party Products. The System is
intended to provide a seamless order system - the customer is to be able to
place a single order for both Core Products and Third Party Products without the
burden of having to contact multiple suppliers to fulfill its complete purchase
order. Orders for Core Products shall be filled by VWR and orders for Third
Party Products shall be filled by Chemdex. The parties intend that VWR's
Requisition Review Functionality be a part of the System, with implementation of
that functionality to be done on a customer-by-customer basis.
The System will also be able to accommodate a spot buying order fulfillment
functionality with respect to spot buying services to be provided by VWR. Such
spot buying services are more fully described in Section 4 hereof.
For purposes of this Section 1.1, VWR's "Requisition Review Functionality"
means the following process: From time to time, VWR will receive a purchase
requisition that includes a specific request for a product from a supplier other
than VWR (a "Non-VWR Product"). Pursuant to a program that has been pre-approved
by VWR's customers, VWR personnel review the purchase requisition and determine
whether the customer order for a Non-VWR Product can be substituted with a VWR
Core Product; if VWR personnel make such a determination, they will fill the
purchase requisition with a VWR Core Product.
1.2 Ownership. VWR understands and acknowledges that the System is owned
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by, and title shall remain with, Chemdex, and that all improvements,
modifications and enhancements (including, without limitation, the software
developed by Chemdex pertaining to VWR's Requisition Review Functionality) to
the System shall be and remain the property of Chemdex. VWR hereby assigns, and
upon creation of the System and each improvement, modification, and enhancement
thereto, automatically assigns to Chemdex, its successors and assigns, ownership
of all intellectual property rights in the System and each improvement,
modification, and enhancement thereto. From time to time upon Chemdex's request,
VWR and/or its personnel shall confirm such assignment by execution and delivery
of such assignments, confirmations, or other written instruments that Chemdex
may reasonably request. Notwithstanding the foregoing, Chemdex understands and
acknowledges that neither such assignment of intellectual property rights nor
Chemdex's ownership of the System includes, or implies that Chemdex owns or has
any rights in, any data from or about VWR, its customers or suppliers,
including, without limitation, customer names, purchasing histories and
purchasing practices (collectively, "VWR Data"); all rights to VWR data are and
shall remain the exclusive property of VWR. Chemdex, however, has the right to
use, sell or otherwise distribute aggregated statistical information regarding
use of the System, including purchasing histories and practices; provided,
however that Chemdex shall not disclose the name or identity of a customer or of
VWR, or any information or data from which such name or identity could
reasonably be discerned. The preceding sentence is an exception to the
provisions of Article 6 of this Agreement.
2. JOINT MARKETING EFFORTS
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2.1 Joint Sales Calls - Customers.
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(a) VWR and Chemdex shall cooperate in encouraging existing VWR
customers to adopt the System as the medium by which they order and purchase
products. These efforts shall include, but not be limited to, creating
incentives for salespersons and other employees to facilitate customers'
utilization of the System, such as Chemdex's sharing of fees with VWR specified
in Section 3.2 below.
(b) VWR and Chemdex shall cooperate to market the System to new VWR
customers, especially those whose projected product purchases will be between
[.........] and [.........] annually. These efforts shall include, but not be
limited to, creating incentives for salespersons and other employees to
facilitate customers' utilization of the System, such as Chemdex's sharing of
fees with VWR specified in Section 3.2 below. Notwithstanding such fee sharing
arrangement, VWR shall retain sole responsibility for determining the specific
details of sales incentive plans established for VWR personnel.
(c) In furtherance of the foregoing, VWR and Chemdex shall jointly
develop a semi-annual sales plan with a corresponding operating budget. The
sales plan shall be developed and managed by an electronic commerce group ("Ecom
Group") consisting of four members, two of which shall be appointed by VWR and
two of which shall be appointed by Chemdex. The two members of the Ecom Group
appointed by VWR shall be located at VWR's headquarters in Pennsylvania ("VWR
HQ") and the two members of the Ecom Group appointed by Chemdex shall be located
at Chemdex's headquarters in California ("Chemdex HQ"). The Ecom Group shall
report directly to Xxxx Xxxxxxxxx, the VWR Vice-President of Electronic
Commerce.
(d) Each semi-annual sales plan shall be approved by the senior
management of each of VWR and Chemdex prior to implementation. At least semi-
annually senior management of VWR and Chemdex shall also meet to review the
implementation of this Agreement and to agree upon amendments to this Agreement
that may be necessary or appropriate. Each such review shall include, but not be
limited to, the adequacy of the reimbursements to VWR for its direct costs
incurred in connection with the spot buying program discussed in Article 3.
(e) Each of VWR and Chemdex shall fund 50% of the costs associated
with special marketing efforts provided for in the duly-approved semi-annual
sales plans.
2.2 Joint Sales Calls - Suppliers
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(a) VWR and Chemdex shall cooperate to jointly solicit suppliers in
the laboratory supplies and equipment industry to distribute, market and sell
products through the System. It is anticipated that those suppliers that
currently supply products through Chemdex will continue to do so and that those
suppliers that currently supply products through VWR will continue to do so.
[....] CONFIDENTIAL TREATMENT REQUESTED
OMITTED PORTIONS FILED SEPARATELY WITH THE SECURITY AND EXCHANGE COMMISSION
(b) In the event that defined segments of a Supplier's product line
("Product Segments") are at the date hereof distributed by both VWR and Chemdex,
VWR and Chemdex shall ask such Supplier to choose either VWR or Chemdex to
distribute such Product Segments on a customer-by-customer basis. Whichever
party is not so chosen by the Supplier shall discontinue its distribution of
such Product Segments as promptly as possible; provided, however, to the extent
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such discontinuation of distribution constitutes a breach under the contract
with Supplier, VWR and Chemdex shall cooperate to negotiate a mutually
satisfactory arrangement with Supplier.
(c) With respect to suppliers that are not currently doing business
with either VWR or Chemdex, but who are jointly solicited by VWR and Chemdex to
utilize the System, VWR and Chemdex shall ask such suppliers at the onset of
their use of the System to choose either VWR or Chemdex to distribute their
Product Segments. Whichever party is not so chosen by the suppliers shall not
distribute said Product Segments through the System.
(d) VWR and Chemdex shall review on a semi-annual basis any potential
change by a Supplier from VWR to Chemdex or from Chemdex to VWR, and shall
mutually determine the best course of action with respect to such Supplier.
(e) VWR and Chemdex shall cooperate to jointly solicit suppliers in
an effort to expand the product lines currently offered. Each of VWR and Chemdex
shall appoint a representative to undertake this solicitation effort, with the
VWR representative being located at VWR HQ and the Chemdex representative being
located at the Chemdex HQ. These representatives shall report directly to Xxxxx
Xxxxx, the Chemdex Vice-President of Supplier Relations.
2.3 With respect to customers for which VWR is the primary supplier,
Chemdex shall coordinate with VWR to ensure that only representatives of VWR or
the Ecom Group referred to in Section 2.1(c) will communicate with such
customers for all sales and marketing purposes. Chemdex may communicate directly
with such customers only concerning operational aspects of the System. VWR shall
identify for Chemdex VWR's status as primary supplier for any given customer at
the time such customer initially logs on to the System. VWR shall review such
designations annually and modify as necessary at that time.
3. OPERATIONAL FLOW.
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3.1 Transition. VWR and Chemdex shall cooperate to transition VWR
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customers to become customers of Chemdex pursuant to a mutually agreed upon
plan. From the date hereof until such time as VWR customers are transitioned in
accordance with such plan, VWR shall provide spot buying, order, billing and
collection services as discussed below; provided, however, that the spot buying
services shall be provided until such time as determined pursuant to Section 4
below.
3.2 Spot Buying Services. VWR shall provide to Chemdex the spot buying
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services more fully described in Section 4 below.
3.3 Orders (a) Subject to the further provisions of this Section 3, all
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customer orders for Third Party Products initially may be processed by, and the
responsibility of, VWR. VWR and Chemdex shall cooperate to develop a plan by
which Chemdex ultimately will process, and be responsible for, all such customer
orders.
(b) Notwithstanding VWR's responsibility initially to process customer
orders pursuant to subclause (a):
(i) all costs of filling customer orders for Third Party Products
(including, without limitation, costs of goods sold and freight and handling)
shall be borne by Chemdex; provided, however, that (A) with respect to those
customers who have in the past in the ordinary course of business accepted and
paid for freight charges being passed through to them, such freight charges
shall continue to be passed through by Chemdex, and (B) for all Third Party
Customers, the [.....] fee set forth in Section 3.7 paid to VWR shall cover all
costs of delivering the product, including freight and handling.
(ii) all costs of filling customer orders for Core Products
(including, without limitation, costs of goods sold and delivery) shall be borne
by VWR; and
(iii) responsibility for customer orders, and related customer
service, shall pass to Chemdex at the time the customer places an order, and VWR
shall bear no risk of loss with respect to any such orders. It is acknowledged
by VWR and Chemdex that VWR will assist where practicable in providing
continuity in customer service, and will assist Chemdex where possible with
order follow-up.
(c) In connection with all Third Party Products ordered as contemplated in
Section 3.3(a), products shall be ordered by VWR on Chemdex's behalf subject to
Section 3.3(b)(iii). Products shall be ordered using Chemdex purchase orders, as
soon as practicable. In order to facilitate transition with suppliers where VWR
has a long-term relationship, VWR may be required to make joint payments for
Chemdex inventory purchases and VWR purchases. In such cases, VWR shall be
reimbursed monthly by Chemdex for such payments by check or wire transfer of
immediately available funds (pursuant to wire instructions previously provided
by VWR for that purpose ("VWR Wire Instructions")), with such payment being made
no later than the fifteenth day of the month following the purchases.
3.4 Billing. (a) Customers shall be billed separately for Core Products
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and Third Party Products (e.g., two separate invoices, with the invoice for
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Core Products coming from VWR and the invoice for Third Party Products coming
from Chemdex).
(b) VWR and Chemdex acknowledge that in certain instances, VWR
customers who purchase Core Products may request that billing for Core Products
from VWR and Third
[....] CONFIDENTIAL TREATMENT REQUESTED
OMITTED PORTIONS FILED SEPARATELY WITH THE SECURITY AND EXCHANGE COMMISSION
Party Products from Chemdex be combined into a single billing process in
connection with procurement services provided by VWR. In such instances, where
customers elect to have VWR act as their agent for purposes of aggregating
billing, such agreement shall be documented between VWR and such customers. In
such instances, VWR may also act as those customers' agent, if so elected by the
customers, for purposes of receiving cash payments related to amounts invoiced.
VWR agrees to remit the portion of collected cash related to Chemdex xxxxxxxx as
quickly as is practicable, but in no event later than two (2) days following
application of cash receipts by VWR to outstanding invoices.
(c) Chemdex and VWR acknowledge that the foregoing provisions of this
Section 3 shall not in any way minimize the responsibility of Chemdex to service
such customers, collect related accounts receivable or bear the risk of product
returns and allowances. The services being provided by VWR pursuant to this
Section 3 are merely intended to facilitate VWR current practices of providing
high quality customer service, and coordinated procurement services.
3.5 Sales Tax Liability. (a) VWR shall, at a time and in a manner
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mutually agreed upon by the parties, provide Chemdex with financial data
necessary for Chemdex to calculate its sales tax liability and prepare its sales
tax returns in connection with Chemdex revenues.
(b) Chemdex shall be solely responsible for (i) timely filing all sales
tax returns, (ii) all expenses incurred as a result of any audits conducted by
governmental authorities, and (iii) all assessments, penalties and fines levied
as a result of any such audit.
(c) All costs of preparing and filing sales tax returns shall be borne
solely by Chemdex.
3.6 Transaction Data. VWR shall provide Chemdex, on a monthly basis, with
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data regarding Chemdex customer transactions in respect of which VWR charges the
service fees set forth in Section 3.7.
3.7 Fees for Services Performed by VWR. (a) Chemdex shall pay VWR fees
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for the services performed, including spot buying services, by VWR on behalf of
Chemdex (except where expressly stated otherwise in this Agreement) equal to
[.....] of total gross revenues associated with customer purchases made in the
[.......] period from [...........] through [............]. After such [.......]
period expires, the percentage amount of such fees may be adjusted pursuant to
mutual agreement of VWR and Chemdex. VWR shall submit a detailed invoice to
Chemdex for payment of such fees on a monthly basis. Chemdex shall pay the
service fees to VWR by check or wire transfer of immediately available funds (in
accordance with VWR Wire Instructions), which funds shall be received by VWR
with respect to any month on or before the fifteenth day of the following month.
3.8 Other Fees. (a) In consideration of VWR's customers being offered
access to the System, VWR shall pay to Chemdex, for each customer that places a
product order for Core Products using the System, a transaction fee equal to
[....] of the total sales revenue resulting from such product order; provided,
however, that VWR shall pay such transaction fees only in
[....] CONFIDENTIAL TREATMENT REQUESTED
OMITTED PORTIONS FILED SEPARATELY WITH THE SECURITY AND EXCHANGE COMMISSION
respect of customer orders placed by those VWR customers that were not among
VWR's Top Forty Customers. For purposes of this Section 3.8,"Top Forty
Customers" means the forty customers who accounted for the most annual sales in
the most-recently-completed fiscal year of VWR. Chemdex shall submit a detailed
invoice to VWR for payment of such transaction fees on a monthly basis. VWR
shall pay the transaction fees to Chemdex by check or wire transfer of funds (in
accordance with wire instructions previously provided by Chemdex for that
purpose) within [..........] days after receipt of Chemdex's invoice. VWR shall
provide a list of the Top Forty Customers to Chemdex as soon as possible, and in
no event later than [.........].
(b) In consideration of VWR's sales and marketing efforts to solicit its
new customers to utilize the System, Chemdex shall pay to VWR [............].
Financial incentives from these fees will be provided at VWR's discretion to VWR
sales and marketing personnel who have principal account management
responsibility. Within thirty (30) days after receiving such fees, Chemdex shall
pay the hook-up fees to VWR by check or wire transfer of funds (in accordance
with wire instructions previously provided by VWR for that purpose) and shall
provide VWR with a written calculation of the hook-up fees.
4. SPOT BUYING PROGRAM.
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4.1 Through its existing third-party purchasing group, VWR shall furnish
spot buying services on behalf of Chemdex, and act as the agent of Chemdex, with
respect to those customers of the Third Party Customers being acquired pursuant
to the Purchase Agreement and for new customers of VWR that require such
services (collectively, "Spot Buying Customers"). Spot buying services consist
of processing customer orders for Third Party Products that are not available
through Chemdex's suppliers ("Non-Chemdex Third Party Products"), locating a
manufacturer, supplier or distributor of the Non-Chemdex Third Party Products
being ordered and procuring such products for the customers ("Spot Buying
Program"). Through its existing third party purchasing group, VWR shall furnish
spot buying services on behalf of Chemdex, and act as the agent of Chemdex, with
respect to the Spot Buying Customers. As the base of suppliers who offer
products for sale through the System increases, if at all, VWR and Chemdex shall
transition Spot Buying Customers to utilize the System as promptly as
practicable.
4.2 (a) VWR shall furnish spot buying services for a minimum of [.......]
from the date hereof, which period may be extended by mutual agreement of VWR
and Chemdex. Such extension of time will depend on the ability to transition
Spot Buying Customers to the System as mentioned above. VWR may terminate its
spot buying services at any time following the [......] period provided that it
provides at least [.........] prior written notice of termination to Chemdex.
(b) Chemdex shall pay VWR fees for the spot buying services that are
included in the fee rate set forth in Section 3.7.
4.2 In the event that Chemdex's order processing under the System causes
the quality of customer service to transitioned Spot Buying Customers to
materially diminish when compared to the services currently provided to them
under VWR's spot buying program, VWR
[....] CONFIDENTIAL TREATMENT REQUESTED
OMITTED PORTIONS FILED SEPARATELY WITH THE SECURITY AND EXCHANGE COMMISSION
shall have the right to immediately add customer service resources or other
resources to the System that it deems necessary or advisable to ensure that the
quality of customer service is restored to the quality level it was under VWR's
current spot buying program.
4.3 In the event that the quality of spot buying services provided by VWR
under this Article 4 materially diminishes when compared to the spot buying
services provided by VWR to them prior to the date of this Agreement, Chemdex
shall have the right to immediately add customer service resources or other
resources that it deems necessary or advisable to ensure that the quality of
customer service is restored to the quality level it was under the spot buying
program maintained by VWR prior to the date of this Agreement.
4.4 The Chief Executive Officer (or equivalent thereof) of each of VWR and
Chemdex shall use good faith efforts to resolve any dispute concerning whether
levels of service actually diminished under Sections 4.2 or 4.3 and/or which
party should bear the costs of adding resources to enhance customer service. In
the event that the Chief Executive Officers cannot reach agreement on such
issues, the determination shall then be made by an independent three-person
committee comprised of one outside director of VWR, one outside director of
Chemdex and one independent industry expert mutually selected by the VWR outside
director and the Chemdex outside director. Such committee shall resolve the
dispute within ninety (90) days after its submission to it. The procedure set
forth in this Section 4.4 need not precede or delay the exercise by VWR or
Chemdex of its right to enhance the spot buying program by immediately adding
customer service or other resources under Section 4.2 or Section 4.3,
respectively.
5. EXCLUSIVITY
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5.1 VWR shall be Chemdex's Preferred Laboratory Supply Distributor. VWR's
"Preferred Laboratory Supply Distributor" status shall mean that: (1) any
electronic functionality enhancements or upgrades to the System developed by
Chemdex or jointly by Chemdex and VWR shall be installed in and operated on the
System for a period of at least six (6) months prior to their installation in
any other electronic procurement system that Chemdex operates or will operate
with or on behalf of any other business concern; and (2) VWR shall be involved
in the development of, and have priority access to, all Chemdex supplier-related
initiatives relating to the System.
5.2 Chemdex shall not develop or offer a comprehensive electronic
purchasing medium that offers a Spot Buying Program to any person or entity
other than VWR, without VWR's prior written consent.
5.3 Chemdex may enlist any Supplier to provide products in the electronic
marketplace on the System or any other Chemdex product or service, subject to
Sections 5.1, 5.2 and 2.2(a) through (d).
5.4 Subject to Section 5.5, VWR may enter into a contract or business
relationship, or otherwise deal, with any provider of an Internet electronic
purchasing program, without the prior consent of or notice to Chemdex.
5.5 VWR shall not (a) participate in sales and marketing activities
promoting any other third party procurement application or with any other third
party procurement software service vendor or (b) provide an integrated spot
buying program through any competitor of Chemdex.
5.6 Notwithstanding anything to the contrary contained herein, Chemdex
acknowledges that VWR shall own and retain exclusive title to the Requisition
Review Functionality process and that Chemdex's rights with respect to such
process, as referred to in Section 1.2 are limited to ownership of the software
that it develops to computerize the process and do not extend to ownership of
the process itself. Accordingly, Chemdex shall not develop or offer a
comprehensive electronic purchasing medium that offers a Requisition Review
Functionality or similar process to any person or entity other than VWR, without
VWR's prior written consent.
6. CONFIDENTIALITY AND PROPRIETARY INFORMATION.
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6.1 Each of VWR and Chemdex recognizes that it will from time to time
obtain certain Information (as defined below) concerning the other that
constitutes confidential and trade secret information which would not otherwise
be available to it. Consequently, each of VWR and Chemdex agrees to receive and
maintain such Information in strictest confidence, and to use, disclose and
distribute such information only for the purpose intended under this Agreement,
subject to the confidentiality provisions hereof. For purpose of this Section
6.1, specific items of Information shall not be considered to fall within any of
the exclusions set forth in Section 6.4 merely because such items are embraced
by more general information which would fall within any of such exclusions.
6.2 Each of VWR and Chemdex agrees that access to Information of the other
party shall be at all times restricted to those of its officers, employees,
agents or representatives who have a need to know it or use it in the
performance of their obligations pursuant to this Agreement. Each of VWR and
Chemdex shall use its best efforts to ensure that its officers, employees,
agents or representatives who are to receive such Information or have access
thereto shall be properly advised of and be bound by its confidentiality
obligations hereunder. In any case, each of VWR and Chemdex shall be responsible
for the breach of these obligations by its officers, employees, agents or
representatives.
6.3 Neither VWR nor Chemdex shall disclose any Information of the other to
a third party without the prior written consent of the other; provided, that
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such disclosure shall be authorized hereunder to the extent necessary for the
performance of the parties' respective obligations pursuant to this Agreement.
6.4 The obligations of VWR and Chemdex pursuant to this Article 6 shall
not apply to any part of the Information which the receiving party can show by
reasonable proof (i) was at any time of disclosure to the receiving party
already in the public domain, (ii) was generally
known to the public through no fault of the receiving party, (iii) was known to
the receiving party prior to its receipt hereunder, (iv) was received by the
receiving party from a third party after such disclosure, unless the receiving
party knew that such third party acquired such information directly or
indirectly from the other party and was not free to disclose it without
violating a confidentiality obligation, (v) was independently developed by the
receiving party without the benefit of any disclosure hereunder, or (vi) was
required to be divulged by the receiving party to a third party under an
obligation as a result of the operation of law, including pursuant to the rules
and regulations promulgated by the Securities and Exchange Commission ("SEC")
with respect to exhibits required to be filed in connection with filings with
the SEC; provided, that the receiving party first gives the other party written
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notice and a reasonable opportunity to oppose disclosure or otherwise protect
such Information.
6.5 Upon any termination of this Agreement, each of VWR and Chemdex shall
immediately either return all Information (and all copies thereof) to the other
party, or certify in writing that all tangible Information (and copies thereof)
have been destroyed.
6.6 As used herein, "Information" means information in whatever form
furnished to one party by or on behalf of the other party, which information
relates in any way to the furnishing party's business including, without
limitation (i) technical information including ideas, inventions, research and
development work, production methods and techniques, computer programs, know-
how, designs, design specifications, test equipment and procedures, equipment,
processes and unpublished data, (ii) business information including personnel,
staffing, costs, pricing, profits, marketing data, customer data and customer
lists, supplier data and supplier lists, and (iii) other information proprietary
to either party held in confidence.
6.7 The covenants set forth in this Article 6 shall survive the
termination of this Agreement and shall be specifically enforceable.
7. INDEMNIFICATION.
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7.1 VWR shall indemnify and hold Chemdex and its directors, officers,
employees, agents and representatives and their respective affiliates harmless
against and in respect of any and all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, liabilities, obligations, taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses
(collectively, "Adverse Consequences"), which Chemdex and such other parties may
suffer, incur or become subject to arising out of, based upon or in connection
with: (i) any grossly negligent act or omission by VWR or its directors,
officers, employees, agents or representatives or their respective affiliates,
in connection with VWR's fulfillment of its obligations under this Agreement, or
(ii) any failure by VWR to comply with any of the covenants, agreements or terms
of this Agreement or with applicable laws.
7.2 Chemdex shall indemnify and hold VWR and its directors, officers,
employees, agents and representatives and their respective affiliates harmless
against and in respect of any
and all Adverse Consequences which VWR or such other parties may suffer, incur
or become subject to arising out of, based upon or in connection with: (i) any
grossly negligent act or omission by Chemdex or its directors, officers,
employees, agents or representatives or their respective affiliates in
connection with Chemdex's fulfillment of its obligations under this Agreement;
(ii) any failure by Chemdex to comply with any of the covenants, agreements and
terms of this Agreement or with applicable laws; or (iii) any claims by third
parties that the System violates, infringes or otherwise conflicts with any
copyright, patent or other intellectual property rights.
7.3 If any third party shall notify a party (the "Indemnified Party") with
respect to any matter (a "Third Party Claim") which may give rise to a claim for
indemnification against the other party (the "Indemnifying Party") under this
Article 7, then the Indemnified Party shall promptly notify the Indemnifying
Party thereof in writing; provided, however, that no delay on the part of the
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Indemnified Party in notifying the Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then solely to the
extent) the Indemnifying Party thereby is prejudiced. The Indemnifying Party
will have the right to defend the Indemnified Party against the Third Party
Claim with counsel of its choice reasonably satisfactory to the Indemnified
Party so long as (i) the Indemnifying Party notifies the Indemnified Party in
writing within 15 days after the Indemnified Party has given notice of the Third
Party Claim that the Indemnifying Party will indemnify the Indemnified Party
from and against the entirety of any Adverse Consequences the Indemnified Party
may suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (ii) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations hereunder,
(iii) the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (iv) settlement of, or an adverse judgment
with respect to, the Third Party Claim is not, in the good faith judgment of the
Indemnified Party, likely to establish a precedential custom or practice
materially adverse to the continuing business interests of the Indemnified
Party, and (v) the Indemnifying Party conducts the defense of the Third Party
Claim actively and diligently.
7.4 So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Section 7.3 above, (i) the Indemnified
Party may retain separate co-counsel at its sole cost and expense and
participate in the defense of the Third Party Claim, (ii) the Indemnified Party
will not consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld or delayed unreasonably), and (iii) the
Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnified Party (not to be withheld or delayed unreasonably).
7.5 In the event any of the conditions in Section 7.3 above is or becomes
unsatisfied in the reasonable judgment of the Indemnified Party, however, (i)
the Indemnified Party may defend against, and consent to the entry of any
judgment or enter into any settlement with respect to, the Third Party Claim in
any manner it reasonably may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (ii) the Indemnifying Parties will
reimburse the Indemnified Party promptly and periodically for the reasonable
costs of defending against the Third Party Claim (including attorneys' fees and
expenses), and (iii) the Indemnifying Parties will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim to the
fullest extent provided in this Article 7.
7.6 Limitation of Liability.
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(a) Each of VWR and Chemdex acknowledges that the other is not the
manufacturer of any of the Core Products or Third Party Products and that
accordingly, the only remedy with respect to any product liability action
relating to the Core Products or the Third Party Products shall be against the
manufacturer thereof, and not against VWR or Chemdex.
(b) IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER
PARTY FOR ANY EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS AND SIMILAR
CLAIMS, WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY OR ANY OTHER THEORY OR
FORM OF ACTION, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY THEREOF.
(c) The obligations of the parties under this Section 8.6 arising by
reason of any occurrence taking place while this Agreement is in effect shall
survive any expiration or termination of this Agreement.
8. GENERAL PROVISIONS.
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8.1 The initial term of this Agreement shall be four (4) years from the
date hereof, and shall automatically renew for additional one (1) year periods
thereafter. Either party may terminate this Agreement at the end of the initial
or any renewal term hereof by written notice provided to the other party at
least one year prior to the termination date.
8.2 During the term of this Agreement, Chemdex shall not solicit, or
contact with a view to engage or employ, any person who is an employee of VWR or
any of VWR's affiliates, without the prior written consent of VWR. During the
term of this Agreement, VWR shall not solicit, or contact with a view to engage
or employ, any person who is an employee of Chemdex or any of Chemdex's
affiliates, without the prior written consent of Chemdex. This provision shall
not prohibit either party from conducting general solicitations for employment
through newspaper advertisements, job postings on website(s) and other such
general, non-targeted means of solicitation.
8.3 Each of VWR and Chemdex represents and warrants that it is authorized
to enter into this Agreement and that in so doing it is not in violation of the
terms and conditions of any contract or other agreement to which it may be a
party.
8.4 Except for the payment of monies when due and owing, for the period
and to the extent that either VWR or Chemdex is prevented from fulfilling, in
whole or in part, its obligations hereunder by reason of any law or governmental
regulation or other governmental act, or flood, war, fire, riots, strikes,
explosion or other natural catastrophe or act of God, or acts of third parties
or other causes beyond such party's reasonable control (a "Force Majeure
Event"), such party shall be temporarily excused from such obligations as are
and to the extent so prevented until the abatement of such Force Majeure Event.
The term of this Agreement will be extended by the period of duration of the
Force Majeure Event. Notice of any such disability and the abatement will be
promptly given to the other party by the party claiming same.
8.5 (a) Other than as expressly set forth in this Agreement, Chemdex shall
have no right to use the marks, trade names or other proprietary rights of VWR
or its affiliates without the prior written approval of VWR. Other than
expressly forth in this Agreement, VWR shall have no right to use the marks,
trade names or other proprietary rights of Chemdex affiliates or its without the
prior written approval of Chemdex.
(b) VWR hereby grants a non-exclusive, non-transferable (except as
set forth in Section 8.7), perpetual, worldwide license to Chemdex to use trade
names, logos and trademarks solely for purposes of effecting the transactions
contemplated by this Agreement. Chemdex hereby grants a non-exclusive, non-
transferable, revocable license to VWR to use Chemdex's name solely for purposes
of effecting the transactions contemplated by this Agreement, including, without
limitation, the creation and use of the System set forth in Article 1, and the
marketing activities described in Article 2.
8.6 This Agreement may not be modified, amended or altered except pursuant
to a written instrument signed by both parties.
8.7 Neither party shall assign any of its rights and obligations under
this Agreement without the prior written consent of the other party; provided
that if the assets or stock of that portion of either party to which this
Agreement pertains hereafter becomes owned or controlled, directly or
indirectly, by a third party, such party may assign its entire right, title and
interest to this Agreement to such third party.
8.8 Except as set forth in Section 8.7, the parties do not intend the
benefits of this Agreement to inure to any third party, and nothing contained
herein shall be construed as creating any right, claim or cause of action in
favor of any such third party against either of the parties hereto.
8.9 This Agreement is made subject to the laws of the Commonwealth of
Pennsylvania, without reference to the choice of law provisions of that
Commonwealth. Nothing contained herein shall prevent or delay either party from
seeking, in any court of competent jurisdiction, specific performance or other
equitable remedies in the event of any breach or intended breach by the other
party of any of its obligations hereunder.
8.10 The parties agree to determine jointly the contents of any public
announcement informing the public about the existence of this Agreement between
the parties and, except as
may be required by law or the rules of any national securities exchange, neither
party shall issue or cause the issuance of any such public announcement without
the express prior approval of an executive officer of each party.
8.11 Any and all notices permitted or required to be given hereunder will
be deemed duly given: (a) upon actual delivery, if delivery is by hand; (b)
three (3) business days after delivery into the official mail if delivery is by
postage paid registered or certified return receipt request mail; (c) or one
business day after delivery to an overnight carrier if delivery is made by a
reputable overnight carrier guaranteeing next business day delivery. Each such
notice shall be sent to the respective party at the address indicated below or
at any other address as the respective party may designate by notice delivered
pursuant hereto.
If to VWR:
VWR Scientific Products Corporation
0000 Xxxxxx Xxxxxxx
Xxxx Xxxxxxx, XX 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attention: Xxxxxxx Xxxx
with a copy to:
Drinker Xxxxxx & Xxxxx LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attention: Xxxxxx X. Xxxx, Esq.
If to Chemdex:
Chemdex Corporation
0000 Xxxxxx Xxx
Xxxx Xxxx, XX 00000
Telephone: (650) 813-0300 ext. 117
Telecopier: (000) 000-0000
Attention: Xxxxx Xxxxx, President and CEO
with a copy to:
Venture Law Group
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
8.12 Subject to the terms and conditions herein provided, each of the
parties shall use its respective commercially reasonable efforts to take, or
cause to be taken, such action, to execute and deliver, or cause to be executed
and delivered, such additional documents and instruments and to do, or cause to
be done, all things necessary, proper or advisable under the provisions of this
Agreement and under applicable law to consummate and make effective the
transactions contemplated by this Agreement.
8.13 No term or provision of this Agreement will be deemed waived and no
default or breach will be deemed excused, unless such waiver or consent is in
writing and signed by a representative of the party claimed to have waived or
consented. Consent by a party to, or
waiver of, a breach or default by the other party, whether express or implied,
will not constitute a consent to, waiver of, or excuse of any different or
subsequent breach or default.
8.14 If any term or provision of this Agreement is finally found to be
illegal or unenforceable by a court or other tribunal of competent jurisdiction,
then, notwithstanding such illegality or unenforceability, this Agreement will
remain in full force and effect unless this Agreement is thereby rendered
impossible to perform.
8.15 The section headings used in this Agreement are for the convenience
and reference of the parties only, and shall not be deemed a part of, or
utilized in interpreting this Agreement.
8.16 The provisions of Sections 1.2, 3.7 (as to unpaid amounts) and 3.8 (as
to unpaid amounts), Article 6, Article 7, Sections 8.4, 8.7, 8.8, 8.9, 8.11,
8.13, 8.14, 8.15 and 8.18 of this Agreement shall continue as valid and
enforceable obligations of the parties notwithstanding any termination,
cancellation, completion or expiration of this Agreement.
8.17 This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.
8.18 This Agreement is a total and complete integration of any and all
undertakings existing between Chemdex and VWR concerning the subject matter
hereof and supersedes any prior written agreements, promises or representations
between them concerning the subject matter hereof.
IN WITNESS WHEREOF, the parties have set forth their respective hands
as of the date first above written, each by its duly authorized representative.
VWR SCIENTIFIC PRODUCTS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President
CHEMDEX CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President and CEO
