EXHIBIT 10.22
INTERNET FULFILLMENT SERVICES AGREEMENT
This Internet Fulfillment Services Agreement ("Agreement") is made as of
September 16, 1999 by and between Bergen Xxxxxxxx Drug Company, a California
corporation ("BBDC"), and ePills, Inc., a Delaware corporation] ("ISP").
RECITALS
A. ISP is an Internet service provider and has created a marketing and
sales program designed to supply pharmaceutical products and related services to
individuals utilizing an Internet web site;
B. BBDC is a national distributor of, among other things, products in the
categories of over-the-counter pharmaceutical products, nutritional, health and
beauty care products and home health care products, described on Schedule 1.1 to
the Terms and Conditions attached as Exhibit 1 (collectively, the "Products");
C. ISP wishes to contract with a fulfillment service provider to ship the
Products and provide related services to ISP's customers in the United States;
D. BBDC wishes to provide the services described in this Agreement to
ISP;
E. Under no circumstances shall the Products include any prescription
pharmaceutical products; and
F. The parties wish to enter into this Agreement in order to set forth
their obligations to each other.
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the parties agree as follows:
1. TERMS AND CONDITIONS.
BBDC and ISP incorporate herein by reference the Terms and Conditions in
the form of Exhibit 1 (the "Terms and Conditions"). Capitalized terms used
herein without definition shall have the meanings set forth in the Terms and
Conditions.
2. TERM.
Subject to Sections 9 and 10 of the Terms and Conditions, the Term of this
Agreement shall be five (5) years from the date of this Agreement.
3. MINIMUM ORDERS.
Following the initial six (6) months of operation, ISP shall submit Orders
for at least [*] in invoiced Products each month of the Term [*].
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CERTAIN INFORMATION ON THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
4. FEES.
In addition to payment for Products, ISP shall pay BBDC the following
service fees.
4.1 Monthly Service Fee. A Monthly Service Fee ("Monthly Service Fee") in
the amount of [*] will be assessed on the last business day of each calendar
month.
4.2 Per Order Cost & Fulfillment Charge. A "Pick and Pack Handling
Charge" of [*] will be assessed in addition to the amounts set forth below (but
not less than [*] per Order).
Category *Cost of goods
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Traditional OTC and HBC [*]
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Nutritionals and natural remedies [*]
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Fragrances [*]
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Cosmetics [*]
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Home healthcare [*]
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Private label [*]
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Bulk/case goods [*]
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*Cost is defined as that cost incurred by BBDC, represented on the
manufacturers' current wholesale price list, adjusted to reflect all
applicable discounts including free goods, promotional allowances and
special manufacturers pricing. Cash discounts, rebates and any sales, use,
business and occupational taxes levied and/or paid by BBDC are excluded
from the definition of "Cost".
4.3 Consumer Image and Ingredient Database License Fee. ISP will be
invoiced a licensing fee of [*] at commencement of this Agreement and, on each
anniversary thereof during the Term, BBDC will invoice ISP a record maintenance
fee of [*] per record in the database as of such anniversary.
4.4 Niche Products Storage Fee. At ISP's reasonable request, BBDC will
provide storage space for additional items not generally stocked by BBDC ("Niche
Products"), subject to available suitable warehouse space. ISP will procure
Niche Products and maintain ownership of Niche Products. Each Niche Product will
be subject to BBDC's standard Product set-up fee to enter it in BBDC's order and
inventory systems. Storage space will be [*] per standard pallet (or portion
thereof), payable per calendar quarter in advance,
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
plus any special handling or storage charges (e.g., security, refrigeration,
insurance, etc.) reasonably determined by BBDC on a case-by-case basis, adjusted
to reflect BBDC's experience. Niche Products are subject to a [*] (in lieu of
the [*]) in addition to the normal per-Order charge pursuant to Section 3.1.
Niche Products [*] under Section 4.8.
4.5 Early Termination Fee. In addition to the provisions of Section 10 of
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the Terms and Conditions, ISP may terminate this Agreement during the first
three (3) years of the Term without cause effective upon sixty (60) days' prior
written notice to BBDC and payment of an early termination fee with such notice
in the amount set forth below:
[*] if notice is sent during the first year of the Term.
[*] if notice is sent during the second year of the Term.
[*] if notice is sent during the third year of the Term.
[*] if notice is sent during the fourth year of the Term.
[*] if notice is sent during the fifth year of the Term.
4.6 Volume Rebate. Bergen Xxxxxxxx will rebate ISP on a quarterly basis
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awccording to the following schedule:
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Average Monthly Volume Quarterly Rebate**
[Total Net Purchases*]
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[*] [*]
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[*] [*]
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[*] [*]
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[*] [*]
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[*] [*]
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* Total net purchases include all monthly purchases from all categories,
less any applicable credits and returns.
** Rebate is retroactive to dollar one.
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
5. SERVICE LEVELS.
During the first sixty (60) days following the date BBDC begins shipping
BBDC Products under this Agreement ("Start-up Period"), BBDC shall be required
to comply with the "Start-Up Service Levels" shown on Exhibit 2 ("Start-Up
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Service Levels"). After the Start-Up Period, BBDC shall be required to comply
with the "Service Levels" set forth in Exhibit 2 ("Service Levels"). Each of
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the Service Levels and Start-Up Service Levels shall be deemed a material term
of this Agreement, and BBDC's failure to comply with the Service Levels or the
Start-Up Service Levels shall entitle ISP to terminate this Agreement pursuant
to Section 10.1.3 of the Terms and Conditions.
6. HOURS OF OPERATION.
BBDC's Internet fulfillment center currently operates from Sunday afternoon
to Thursday evening. Receiving, stocking and office personnel operate Monday to
Friday, normal business hours. BBDC and ISP agree to explore additional hours of
operation as required to meet service levels. If ePills' volume is not
sufficient to justify additional hours, [*] the additional costs for such
additional hours to meet its requirements.
7. NOTICES.
Subject to Section 17.18 of the Terms and Conditions, notices to ISP under
this Agreement shall be sent to:
ePills, Inc.
0000 Xxxxxx, Xxxxx #X
Xxxxxxxxxx, Xxxxxxxxxx 00000
8. EXHIBITS.
Set forth below is a list of all exhibits to this Agreement which are
incorporated by this reference.
Exhibit Number Exhibit Name
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1 Terms and Conditions
2 Service Levels
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[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
IN WITNESS WHEREOF, the parties have executed this Internet Fulfillment
Services Agreement as of the date first written above.
ISP:
ePills, Inc.
By: /s/ Xxxxxxx Xxxx
__________________________________
Name: Xxxxxxx Xxxx
________________________________
Title: Treasurer
_______________________________
BBDC:
Bergen Xxxxxxxx Drug Company
By: /s/ Xxxxx Xxxxxx
__________________________________
Name: Xxxxx Xxxxxx
________________________________
Title: VP eCommerce Sales & Marketing
_______________________________
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EXHIBIT 1
TO
INTERNET FULFILLMENT SERVICES AGREEMENT
TERMS AND CONDITIONS
1. PRODUCTS AND TERRITORY.
1.1 Products. A list of the categories of the Products ("Product
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Categories") is set forth in Schedule 1.1. BBDC shall provide ISP a list of
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specific products (the "Products") and related information ("Item Catalog
Information" [EDI 832 Transaction Set]) from time to time. BBDC may add or
delete available Products upon two (2) days' notice to ISP; provided, however,
ISP may elect not to offer added Products.
1.2 Niche Products. BBDC may elect to store and ship additional products
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requested by ISP, including private label products and other products that BBDC
does not otherwise carry, upon due execution and delivery by ISP and BBDC of a
Niche Products Agreement in the form of Schedule 1.2.
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1.3 Territory. BBDC shall provide fulfillment services for the Products
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in the Unites States of America and its territories and possessions and each
other territory listed on Schedule 1.3 (the "Territory"). In no event shall
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BBDC provide or ship Products to ISP's consumers outside the Territory.
1.4 Exclusivity. ISP and its affiliates shall utilize BBDC and its
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affiliates exclusively for fulfillment of the Products to ISP consumers within
the Territory. ISP acknowledges that pricing it receives pursuant to this
Agreement is based on ISP purchasing pursuant to an exclusive relationship with
BBDC. ISP acknowledges and agrees that BBDC shall provide the Products to ISP's
consumers on a non-exclusive basis. ISP acknowledges BBDC and its affiliates are
developing web sites for current and future consumers of BBDC and its affiliates
obtained through its independent efforts. In addition, BBDC and its affiliates
have, and will continue to have, discussions with other companies that seek to
use Product fulfillment services.
1.5 Right of First Refusal. ISP hereby grants to BBDC and its affiliates
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the right of first refusal to provide fulfillment services to ISP for all
territories in addition to the Territory and for all product lines of a type
typically carried in a retail pharmacy in addition to the Products. When ISP
intends to sell such additional products or products in additional territories,
ISP shall first deliver to BBDC written notice of the proposed terms (the
"Notice"). BBDC shall have thirty (30) days from receipt of the Notice to notify
ISP of its desire to enter into an amendment to this Agreement with ISP for such
territory or products upon terms no less favorable to ISP than the terms set
forth in the Notice. If BBDC has not notified ISP of its desire to enter into
such amendment as of the expiration of such thirty (30) day period and entered
into an amendment to this Agreement with ISP with respect to such territory and
products within ninety (90) days of receipt of the Notice, ISP may enter into an
agreement with a third party for such territory and products on terms and
conditions no less favorable to ISP than those set forth in the Notice.
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2. ORDERS; SHIPPING; RETURNS.
2.1 Operations Manual. BBDC and ISP incorporate herein by reference the
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Operations Manual in the form of Schedule 2.1 (the "Operations Manual").
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2.2 Orders. Orders for Products shall be initially placed by ISP's
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consumers using ISP's Internet web site. ISP shall forward all orders for
Products to BBDC by electronic data interchange ("EDI") pursuant to Section 3.8
initially once daily and, thereafter, at least four (4) times per day
("Orders"). Orders shall set forth a description of the Products, SKU
designations, quantities, requested method of delivery, the designated delivery
locations and other required information as agreed upon by the parties from time
to time.
2.3 Inventory. BBDC shall maintain sufficient inventory of the Products
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in an effort to facilitate the delivery of all Orders for the Products.
2.4 Shipping. BBDC shall cause all lawful orders to be shipped in
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accordance with the Operations Manual. Shipping guidelines may change due to
legal and product shipping requirements. Certain Products may be subject to
special shipping and handling fees. Title to, and risk of loss of, all Products
shall pass from BBDC to ISP immediately prior to BBDC's delivery of the Products
to the shipper for delivery to ISP's consumer. BBDC shall invoice ISP weekly for
all shipping charges. ISP shall pay all shipping invoices within seven (7) days
of receipt. BBDC shall use commercially reasonable efforts to ensure that ISP
receives any volume discount normally given BBDC by its shipper. BBDC shall use
commercially reasonable efforts to ensure that all Orders for Products received
before the daily "cut-off time" shall be shipped by the corresponding shipping
time for such day. Out-of-stock or back-ordered Products shall be shipped
promptly after BBDC's receipt of such Products from the manufacturer or other
supplier. BBDC shall not process any of the following shipments of Products: (i)
international shipments, (ii) COD shipments, (iii) shipments requiring a
declared value, (iv) shipments to freight forwarding agents, (v) shipments of
hazardous materials or other products requiring specialized shipping not
generally provided by BBDC, and (vi) Drug Enforcement Administration ("DEA")
Schedule II controlled substances.
2.5 Labels. Unless modified by Exhibit 2, if any, ISP shall provide BBDC
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standard packaging labels and invoice forms bearing ISP's, and not BBDC's, name,
logo and telephone number for BBDC's use in shipping the Products.
2.6 Returns. BBDC and ISP incorporate herein by reference the Returned
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Goods Policy in the form of Schedule 2.6.
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3. PRICING; PAYMENT.
3.1 Pricing and Fees. BBDC shall provide the Products to ISP's consumers
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on a net-billed or cost-plus basis, plus adjustable fees for fulfillment,
shipping (if not billed directly to ISP), handling, packing of collateral items
and other services, each on a per-order basis. The parties acknowledge and agree
that pricing for the Products set forth on Schedule 1.1 have been set in
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advance, are consistent with fair market value in an arms-length transaction,
and
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have not been determined in a manner that takes into account the volume or
value of any referrals or business otherwise generated between the parties.
3.2 Price Adjustments. BBDC may change the pricing or fulfillment fees of
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any Product at any time; provided, however, any such change will not be
effective with respect to Products ordered by ISP's consumers within twenty-four
(24) hours of BBDC's electronic notice to ISP; provided, however, that the
pricing offered for Products shall be as low or lower than pricing BBDC offers
for such Products to any third party Internet service provider with similar
purchase volume and under contracts with similar terms.
3.3 Rebates. As additional consideration under this Agreement, ISP hereby
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assigns to BBDC all ancillary benefits extended by any manufacturer or supplier
of the Products to the distributor, purchaser or user of the Products, including
cash or other rebates based upon purchase volume or other criteria, sales
promotions, allowances, free goods, and the like, other than discounts and
rebates intended by the manufacturer or supplier to be passed on to retailers or
consumers.
3.4 Taxes. ISP shall obtain and maintain a resale tax certificate in
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Kentucky and each other jurisdiction in which BBDC delivers Products to ISP's
shipper. ISP shall collect and remit all applicable sales taxes and other taxes
on the sale or provision of Products to ISP's consumers.
3.5 Timing of Payment. BBDC shall submit invoices for the Products to ISP
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on a per-order basis for each order received from ISP's consumer. Unless
modified by Exhibit 2, if any, ISP shall pay such invoices within twenty-four
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(24) hours of receipt of funds but in no event later than three (3) business
days after BBDC delivers Products to ISP's shipper for delivery to ISP's
consumer. Funds shall be transferred to BBDC on a daily basis (weekends and
banking holidays excluded). ISP's obligation to pay for all purchases invoiced
shall be absolute and unconditional and shall not be subject to any abatement,
reduction, set-off, defense, counterclaim, interruption, deferment or recoupment
for any reason whatsoever, and such payments shall be and continue to be payable
in all events.
3.6 Late Payment. If payment is not received as described in Section 3.5,
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a late payment penalty of the lower of one-and-one-half percent (1 1/2%) per
month or part thereof or the maximum rate permitted by law shall be assessed on
the outstanding balance, commencing from the first (1st) business day after such
due date. The right of BBDC to assess penalties for ISP's payment delays shall
not relieve ISP of its obligation to make prompt payment in accordance with this
Section 3.
3.7 Financial Reconciliation. BBDC and ISP incorporate herein by
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reference the Financial Reconciliation Process in the form of Schedule 3.7 (the
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"Financial Reconciliation Process").
3.8 EDI/EFT. BBDC and ISP incorporate herein by reference the EDI/EFT
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Agreement in the form of Schedule 3.8. All Orders, ISP sales reports, BBDC
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invoices and remittance detail information shall be transmitted by EDI. All
funds shall be transferred between the parties by electronic funds transfers
("EFT"). All data files transmitted over the public internet shall be encrypted
in adherence with EDIINT standards.
4. ISP'S COVENANTS.
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4.1 Web Site. ISP shall, at its cost, develop, produce, implement and
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test its web site and supporting electronic commerce enabling software, as well
as provide technical support, including developing and procuring credit card
processing and encryption software, subject, however, to the reasonable approval
of BBDC in relation to its fulfillment responsibilities hereunder. In addition,
ISP shall, at its cost, develop and procure all software interfaces or programs
necessary to enable ISP to connect with BBDC's systems and operations
facilities. All software and hardware developed or purchased by ISP to support
BBDC hereunder shall remain the property of ISP. Each screen accessible to
consumers on ISP's web site shall clearly identify ISP. Unless modified by
Exhibit 2, if any, no content on ISP's web site shall directly or indirectly (a)
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identify BBDC or (b) lead any consumer or potential consumer to believe that ISP
or its web site is affiliated with a Product manufacturer or supplier.
4.2 Marketing. ISP shall, at its cost, market ISP's program on the
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Internet, including ISP's Internet web site. BBDC acknowledges that ISP has sole
authority and control over each stage of marketing for its program; provided
however, if ISP is prohibited by law from performing any contemplated marketing
activities, BBDC may perform such functions at ISP's expense to the extent BBDC
may lawfully do so.
4.3 Consumer Enrollment. ISP shall have sole responsibility for enrolling
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consumers in ISP's program.
4.4 Records. ISP shall retain all documentation required by federal and
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state statutes and regulations.
4.5 License Revocation. ISP shall inform BBDC in writing within three (3)
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business days after receiving notice of any action or proceeding from any
federal, state, or local agency to restrict, suspend, or revoke any of ISP's
required licenses, permits or registrations or any other approval required to
supply the services described in this Agreement.
4.6 Compliance with Law. ISP shall perform all of its duties under this
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Agreement in full compliance with all applicable state, federal, and local laws
and regulations.
4.7 Adequate Space and Personnel. ISP represents and warrants that it
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has, and agrees that it shall continue to maintain or enlarge, as appropriate,
such space, equipment, resources, and personnel at its sole cost and expense
necessary to promote its web site and perform under this Agreement.
4.8 Prohibition Against Publication of Certain Materials. ISP shall not
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knowingly or unknowingly incorporate in ISP's web site any of the following
material (including pictures, links, or any other content, whether visible or
invisible with a web browser):
4.8.1 any material which violates or infringes any national or
international copyright, trademark, trade secret, patent, statutory, common law
or other proprietary rights of others, including any party's privacy right or
right of publicity, in effect or which may hereafter be enacted and applicable
to this Agreement or web sites;
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4.8.2 any material that is libelous, slanderous, harmful, abusive,
threatening, obscene or pornographic; or
4.8.3 distribution lists to be used via unsolicited electronic mail
or other mass electronic mailings.
4.9 Adverse Event Reporting. ISP shall report all adverse events relating
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to the Products pursuant to the requirements of the Food and Drug
Administration.
4.10 DEA Registration. ISP shall obtain and maintain all applicable
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licenses and registrations as is required by the DEA and shall report the sale
and shipment of all Products pursuant to the requirements of the DEA and comply
with all comparable state requirements.
4.11 Product Recalls. ISP acknowledges and agrees that BBDC shall not be
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obligated to recall any Product which is the subject of a manufacturer or
supplier recall but that either party may elect to do so from time to time in
its sole discretion, provided that any recall undertaken by BBDC on behalf of
ISP will be at ISP's sole cost and expense.
4.12 Support. BBDC and ISP will jointly evaluate which party will provide
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other support functions relating to the Products.
5. BBDC'S COVENANTS.
5.1 Records. BBDC agrees that it shall retain all documentation required
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by federal and state statutes and regulations. If and to the extent required by
Section 1395x(v) (1) of Title 42 of the United States Code, as subsequently
amended from time to time, until the expiration of four (4) years after the
termination of this Agreement, BBDC shall make available upon written request to
the Secretary of the United States Department of Health and Human Services, or
upon request to the Comptroller General of the United States General Accounting
Office, or any of their duly authorized representatives, a copy of this
Agreement and such books, documents, and records as are adequate to certify the
nature and extent of the costs of the goods and services provided by BBDC under
this Agreement. BBDC further agrees that in the event BBDC carries out any of
its duties under this Agreement through a subcontract, with a value or cost of
Ten Thousand Dollars ($10,000) or more over a twelve (12) month period, with a
related organization, such contract shall contain a clause to the effect that
until the expiration of four (4) years after the furnishing of such services
pursuant to such subcontract, the related organization shall make available,
upon written request to the Secretary of the United States Department of Health
and Human Services, or upon request to the Comptroller General of the United
States General Accounting Office, or any of their duly authorized
representatives, a copy of such subcontract and such books, documents and
records of such organizations as are necessary to verify the nature and extent
of such costs. Notwithstanding anything set forth in this Agreement to the
contrary, BBDC shall have no obligation under this Agreement to make public
attorney-client privileged documents.
5.2 License Revocation. BBDC agrees that it shall inform ISP promptly
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after receiving notice of any action or proceeding from any federal, state, or
local agency to restrict, suspend, or revoke any of BBDC's required licenses,
permits or registrations or any other approval required to supply the services
described in this Agreement.
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5.3 Compliance with Law. BBDC agrees that it shall perform all of its
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duties under this Agreement in full compliance with all applicable state,
federal, and local laws and regulations.
6. REPRESENTATIONS OF THE PARTIES.
6.1 Representations and Warranties of BBDC. BBDC hereby represents and
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warrants to ISP that (i) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was organized; (ii) the
person executing this Agreement on its behalf is duly authorized to bind it to
all terms of this Agreement; (iii) it shall have good title to all Products
delivered pursuant to this Agreement (unless such Product is subject to a
chargeback agreement); (iv) except as otherwise provided, all such Products
shall be free from any security interest or other lien (unless such Product is
subject to a chargeback agreement); (v) all Products shall be delivered without
damage to ISP's shipper for delivery to ISP's consumer; (vi) this Agreement,
when executed and delivered by it, shall be its legal, valid, and binding
obligation, enforceable against it in accordance with its terms; (vii) its
execution, delivery and performance of this Agreement shall not conflict with or
breach its charter documents, delegations of authority or any material agreement
to which it is a party, or require the consent of or notice to any third party
or governmental authority; and (viii) BBDC holds all valid licenses, permits and
registrations in appropriate jurisdictions to permit BBDC to operate its
fulfillment services.
6.2 No Representations or Warranties Regarding Products. Except as
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expressly provided herein, BBDC makes, and shall be deemed to make, no
representations or warranties, express or implied, written or oral, as to the
value, absence of defect, absence of infringement, or the absence of any
obligation based on strict liability in tort, or any other representation or
warranty whatsoever, express or implied, with respect to the Products provided
in this Agreement. BBDC EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED,
WRITTEN OR ORAL AS TO ANY PRODUCT, INCLUDING BUT NOT LIMITED TO THOSE OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE REGARDING THE PRODUCTS AND
SERVICES PROVIDED IN THIS AGREEMENT. ISP understands that BBDC is not the
manufacturer of any Products and agrees that ISP shall settle all claims,
defenses, set-offs and counterclaims it may have with or against any
manufacturer directly with the manufacturer and shall not assert any such
claims, defenses, set-offs or counterclaims against BBDC. Accordingly, ISP
agrees that BBDC, its subsidiaries and affiliates and the directors, officers,
shareholders and agents of each shall not be liable to ISP for any liability,
claim, loss, damage (consequential or otherwise) or expense of any kind caused,
directly or indirectly by (i) the inadequacy of the Products for any purpose,
(ii) any deficiency or defect, (iii) any delay in providing the Products, (iv)
failure to provide the Products, or (v) death or bodily injury which may be
caused by the Products. The foregoing is not intended to exculpate BBDC from or
limit any liability, obligation or claim a third party may have against BBDC
(other than as set forth in Section 15) to the extent arising out of BBDC's
performance of or its negligence with respect to its services and obligations
relating to this Agreement.
6.3 Representations and Warranties of ISP. ISP hereby represents and
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warrants to BBDC that (i) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was organized; (ii) the
person executing this Agreement on behalf of ISP is duly authorized to bind ISP
to all terms of this Agreement; (iii) this Agreement, when executed and
delivered by ISP, shall be the legal, valid, and binding obligation of ISP,
enforceable against ISP in accordance with its terms; (iv) its execution,
delivery and
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performance of this Agreement shall not conflict with or breach its charter
documents, delegations of authority or any material agreement to which it is a
party, or require the consent of or notice to any third party or governmental
authority; and (v) ISP holds all valid licenses, permits and registrations in
appropriate jurisdictions to permit ISP to operate its Internet services.
7. SOFTWARE AND DATABASE LICENSE.
7.1 Grant of License. For BBDC's Consumer Image and Ingredient Database
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and each software application and/or database BBDC may provide to ISP, to the
extent of BBDC's legal capacity to do so, grants ISP a non-exclusive,
nontransferable and revocable license for the use of such software and/or
database ("Software") and its related documentation ("Documentation") subject to
payment by ISP of the applicable licensing fee established by BBDC from time to
time. Each license is granted solely during the Term. BBDC does not grant to ISP
any rights to any copyright, patent, trademark, trade name or similar rights
with respect to any Software or Documentation or any other information provided
to ISP by BBDC. ISP shall not use the name, trade name, trademarks, service
marks, trade dress, logos or other intellectual property of BBDC, Product
manufacturers or suppliers or any of BBDC's affiliates in its web site,
publicity releases, advertising, sales literature or materials, or in any
similar activity without BBDC's prior written consent.
7.2 No Sublicense. ISP may not sublicense, lease, distribute or otherwise
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transfer Software or Documentation or ISP's right to use the Software or
Documentation.
7.3 No Copies. ISP may not make, or allow anyone else to make, copies of
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the Software or related Products, beyond one copy for backup and archival
purposes, except as BBDC may otherwise agree in writing. ISP may not remove,
obscure, or deface any proprietary notices contained in the Software or
Documentation, and ISP must include such notices in any permitted copy of the
Software.
7.4 No Alterations. ISP may not alter, modify or adapt any Software or
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Documentation or create derivative works from them. ISP may not translate,
reverse engineer, disassemble or decompile the Software. BBDC shall have no
liability for any claims by third parties or ISP based upon altered Software or
Documentation.
7.5 Termination of License. The license to any part of the Software and
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Documentation shall terminate automatically if ISP fails to comply with the
terms of this license or any other material provision in this Agreement, or if
the Products for which ISP is using the Software are discontinued. Upon
termination of a license, ISP must cease using the Software and Documentation
and, at BBDC's election, return or destroy all copies of the Software and
Documentation ISP may have in its possession or under its control, and certify
to BBDC that ISP has done so. All of ISP's obligations in this Agreement shall
survive termination of any license.
7.6 Disclaimer. BBDC disclaims any representation or warranty regarding
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the Software and Documentation. ISP acknowledges the possibility that (i) the
Software may not operate in combination with other software or hardware or in
the manner ISP or its consumers may select for use and (ii) Software may not
operate without interruption or be error-free.
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7.7 No Rights in Data. All files, input materials and output materials,
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the media upon which they are located (including cards, tapes, discs and other
storage facilities), and all Software (together with any Documentation, source
codes, object codes, upgrades, revisions, modifications and any related
materials) which are utilized by or developed for ISP in connection with this
Agreement shall be the property of BBDC.
7.8 Notice of Claims; Removal of Products and Content. Notwithstanding
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Section 14.2.1, ISP shall immediately notify BBDC of any written or oral claim
that any Software or Documentation used by ISP in its web site or otherwise
infringes on the rights of any third party. Immediately upon notice from BBDC,
ISP shall discontinue the offering of any Product and the use of any Software
and Documentation which BBDC determines may subject BBDC or ISP to liability to
any third party. Failure to notify BBDC in writing within three (3) business
days of the receipt of an oral or written claim that any Software or
Documentation used by ISP in its web site or otherwise infringes on the rights
of any third party shall terminate and rescind all of BBDC's representations,
warranties, and indemnification obligations with respect to the subject matter
of the claim.
8. WARRANTS. [INTENTIONALLY OMITTED]
9. TERM.
Unless terminated earlier pursuant to Section 10, the term of this
Agreement shall be for the period years set forth on the cover page of this
Agreement from the date of this Agreement and shall be automatically extended
for additional, successive one (1) year terms (collectively, the "Term") unless
either party gives written notice to the other of its intention to not extend at
least ninety (90) days prior to the end of the then current Term.
10. TERMINATION OF AGREEMENT.
10.1 Default. This Agreement may be terminated by ISP by providing written
-------
notice of termination to BBDC upon a default by BBDC under this Agreement. This
Agreement may be terminated by BBDC by providing written notice of termination
to ISP upon a default by ISP under this Agreement. For purposes of this
provision, a default shall be deemed to have occurred upon the happening of any
of the following:
10.1.1 With respect to either party (A) filing an application by
such party for, or consent to, appointment of a trustee, receiver, or custodian
of its assets; (B) entry of an order for relief in proceedings under the United
States Bankruptcy Code, as amended or superseded from time to time; (C) making a
general assignment for the benefit of creditors; (D) entry of an order by any
court of competent jurisdiction appointing a trustee, receiver, or custodian of
its assets unless the proceedings and the person appointed are dismissed within
ninety (90) days; or (E) failure generally to pay its debts as the debts become
due within the meaning of Section 303(h)(1) as amended or superseded from time
to time, of the United States Bankruptcy Code, as determined by a Bankruptcy
Court, or in the event of a party's admission in writing of its inability to pay
its debts as they become due.
13
10.1.2 A party's failure to pay any amount that is due to the other
party under this Agreement and such failure continues for five (5) days after
written notice from the other party; or
10.1.3 A party's failure to perform any other material obligation
under this Agreement, and such failure continues for thirty (30) days after such
party receives written notice of such breach from the non-breaching party;
provided, however, if the breaching party has commenced to cure such breach
within such thirty (30) days, but such cure is not completed within the thirty
(30) days, such party shall be afforded the amount of additional time reasonably
necessary to complete its cure, provided it diligently pursues doing so until
completion.
10.2 Adverse Regulatory Changes. In the event the laws of any jurisdiction
--------------------------
change so as to negatively effect through increased regulations, liability, or
otherwise, BBDC's fulfillment operations or the Internet sale of Products, then
either party may terminate this Agreement upon written notice to the other
without further obligation.
10.3 Licenses. If any required licenses, permits or registrations of BBDC
--------
or ISP are revoked or suspended so as to materially impair such party's ability
to perform under this Agreement, BBDC or ISP may terminate this Agreement upon
thirty (30) days' written notice without further obligation.
10.4 Effect of Termination or Expiration. Upon termination or expiration
-----------------------------------
of this Agreement for any reason, BBDC shall be entitled to payment of any
amounts owed to it by ISP for Products ordered prior to termination or
expiration and shipped to ISP's consumers. The obligations of the parties
described in Sections 4, 5, 6, 7 (except the license granted thereunder), 8, 11,
12, 13, 14, 15 and 16 and any provision the context of which shows that the
parties intended the provision to survive shall remain in effect notwithstanding
the expiration or termination of this Agreement. Additionally, termination of
this Agreement shall have no effect upon the obligation of the parties under the
terms of any other agreements entered into between the parties, except as set
forth otherwise in such other agreements.
11. CONFIDENTIALITY.
11.1 "Confidential Information". "Confidential Information" shall mean any
-------------------------
and all information disclosed in writing or orally by either party to the other
party, which is either confidential or proprietary in nature. "Confidential
Information" shall not include: (i) information that is or shall become
generally available to the public through no fault of the receiving party; (ii)
information that was known to the receiving party before that party received it
under this Agreement and was free of any obligation of nondisclosure; or (iii)
information that is disclosed in good faith to the receiving party by a third
party lawfully in possession of such information and who is not under an
obligation of nondisclosure with respect to such information.
11.2 Nondisclosure. During the Term and for ten (10) years thereafter,
-------------
neither party shall, without the prior written consent of the other party,
disclose to any third party (unless such disclosures are required by law) or use
for its own purposes (except as contemplated by this Agreement) this Agreement
or any other Confidential Information concerning the other party's business,
operations, or products that is obtained in the course of performing this
14
Agreement. Notwithstanding the foregoing, the parties may issue a joint press
release that is mutually agreeable to the parties as promptly as practicable
after the execution of this Agreement and may continue to communicate with
employees, customers, suppliers, lenders, shareholders and others as may be
legally required or appropriate and not inconsistent with the best interests of
the other party or the prompt consummation of the activities contemplated by
this Agreement.
11.3 Customer Lists. BBDC and ISP shall each retain sole ownership of
--------------
their respective customer lists.
12. NON-SOLICITATION.
12.1 Covenant Not to Solicit. Each party agrees that neither it nor its
-----------------------
employees, agents, or representatives shall engage in any of the following
activities, during the Term and for a period of two (2) years following this
Agreement's expiration or termination ("Non-Solicitation Period") without the
other party's prior written consent:
12.1.1 Hire, or solicit for hire, any person who was employed by the
other party or any of its subsidiaries or affiliates; or
12.2 Damages. Because of the difficulty of measuring economic losses as a
-------
result of the breach of any of the foregoing covenants, and because of the
immediate and irreparable damage that would be caused for which the other party
would have no other adequate remedy, each party agrees that, in the event of a
breach by it of any of the covenants set forth in this Section, the other party
or its subsidiary or affiliate may, at its option, in addition to obtaining any
other remedy or relief available to them (including damages at law), enforce the
provisions of this Section by injunction and other equitable relief.
12.3 Reasonable Restraint. Each party agrees that the covenants contained
--------------------
in this Section impose a reasonable restraint in light of the other party's
activities, business and future plans.
15
12.4 Severability; Reformation. The covenants in this Section are
-------------------------
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant in this Section or in this
Agreement. In the event any court of competent jurisdiction shall determine that
the scope, time or territorial restrictions set forth in this Section are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and the
provisions of this Section shall thereby be reformed.
12.5 Independent Covenant. Each of the covenants in this Section shall be
--------------------
construed as a covenant independent of any other provision of this Agreement,
and the existence of any claim or cause of action of one party against the
other, or any of its subsidiaries or affiliates, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by
such party or such subsidiaries or affiliates of such covenants.
12.6 Computation of the Non-Solicitation Period. The Non-Solicitation
------------------------------------------
Period shall be computed by excluding from such computation any time during
which either party is in violation of any provision of this Section and any time
during which there is pending in any court of competent jurisdiction any action
(including any appeal from any judgment) in which a party seeks to enforce the
covenants contained in this Section or in which the other party contests the
validity or enforceability of any such covenant or seeks to avoid the
performance or enforcement of any such covenant.
12.7 Materiality. Each party acknowledges and agrees that the covenants
-----------
set forth in this Section are a material and substantial part of this Agreement.
13. INSURANCE.
Each party shall obtain and maintain during the Term and for two (2) years
thereafter at its own cost and expense:
(a) Commercial General Liability Insurance covering its premises, including
bodily injury, property damage, broad form contractual liability, independent
contractors and products liability/completed operations coverages, with limits
of not less than [*] per occurrence, [*] aggregate and [*] single limit.
(b) Workers' Compensation Insurance as mandated or allowed by all states in
which such party's business is being performed, including at least [*] coverage
for Employer's Liability.
(c) All Risk Property Insurance in an amount adequate to cover the cost of
replacement of all equipment, improvements, and betterments at such party's
locations in the event of loss or damage.
(d) Errors and Omissions Insurance in the amount of [*].
All such policies shall be written by a carrier or carriers rated "A" or above
by Best, shall contain a clause requiring the carrier to give BBDC at least
thirty (30) days' prior written notice of any
16
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
material change or cancellation of coverage for any reason, and simultaneously
with ISP's execution of this Agreement and annually thereafter, ISP shall
deliver to BBDC original Certificates of Insurance evidencing coverage required
by this Section.
14. INDEMNIFICATION.
14.1 Indemnification by ISP. ISP shall indemnify, defend, and hold
----------------------
harmless BBDC and its officers, directors, agents and affiliates from and
against any and all claims, demands, actions, causes of action, losses,
judgments, damages, costs and expenses (including, but not limited to,
attorneys' fees, court costs, and costs of settlement) ("Claim") to the extent
arising out of claims against BBDC for: (1) the dishonest, fraudulent,
negligent, willful, or criminal acts of ePills or ePills' employees, agents or
representatives acting alone or in collusion with others; (2) the death of, or
bodily injury to, any person to the extent as a result of any act or omission of
ePills or ePills' employees, agents or representatives; or (3) any breach by ISP
of any of its representations, warranties or covenants in this Agreement.
14.1.1 Notice by BBDC. Upon receipt of any notice of a Claim, BBDC
--------------
shall promptly notify ISP in writing of any such Claim; provided however, any
failure to so notify ISP shall not relieve BBDC of any liability it may have to
ISP except to the extent such liability was caused by such failure.
14.1.2 Retention of Counsel. BBDC may retain counsel of its own
--------------------
choice at BBDC's expense to the extent necessary to protect BBDC's interests and
to act as co-counsel in the litigation or settlement of any Claim or threatened
Claim. So long as ISP does not enter into any settlement agreement or consent
judgment that admits liability on the part of BBDC or that fails to include an
unconditional release of BBDC from all liability from all asserted or threatened
Claims, ISP shall have the right to control the defense, settlement, and
prosecution of any litigation.
14.2 Indemnification by BBDC. BBDC shall indemnify, defend, and hold
-----------------------
harmless ISP and its officers and directors from and against any and all Claims
to the extent arising out of claims against ISP for: (1) the dishonest,
fraudulent, negligent, willful, or criminal acts of BBDC or BBDC's employees,
agents, or representatives acting alone or in collusion with others; or (2) any
breach by BBDC of any of its representations, warranties or covenants in this
Agreement; or (3) the death of, or bodily injury to, any person to the extent as
a result of any act or omission of BBDC or BBDC's employees, agents or
representatives.
14.2.1 Notice by ISP. Upon receipt of any notice of a Claim, ISP
-------------
shall promptly notify BBDC in writing of any such claim; provided, however, any
failure to so notify BBDC shall not relieve ISP of any liability it may have to
BBDC except to the extent such liability was caused by such failure.
14.2.2 Retention of Counsel. ISP may retain counsel of its own
--------------------
choice at ISP's expense to the extent necessary to protect ISP's interests and
to act as co-counsel in the litigation or settlement of any Claim or threatened
Claim. So long as BBDC does not enter into any settlement agreement or consent
judgment that admits liability on the part of ISP or that fails to include an
unconditional release of ISP from all liability from all asserted or threatened
Claims, BBDC shall have the right to control the defense, settlement, and
prosecution of any litigation.
15. LIMIT ON LIABILITY.
BBDC SHALL NOT BE LIABLE FOR ANY CLAIM ARISING OUT OF THIS
17
AGREEMENT FOR INDIRECT, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES, WHETHER OR
NOT BBDC KNEW OR HAD REASON TO KNOW OF THE POSSIBILITY OF SUCH DAMAGES, AND
BBDC'S AGGREGATE LIABILITY UNDER THIS AGREEMENT FOR ANY AND ALL CLAIMS, WHETHER
IN CONTRACT, TORT, OR OTHERWISE, SHALL NOT EXCEED BBDC'S RECEIPTS FOR PRODUCTS
SOLD UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS IMMEDIATELY PRECEDING A
FINAL DETERMINATION OF SUCH LIABILITY.
16. INDEPENDENT CONTRACTOR.
Each party is an independent contractor and is solely responsible for all
taxes, withholdings, and other similar statutory obligations, including, but not
limited to, workers' compensation insurance. None of a party's employees,
agents, or associates are employees the other party and each party agrees to
defend, indemnify and hold the other harmless from any and all claims made by
any of its employees, agents, or associates, or by any entity or agency on
account of an alleged failure to satisfy any such tax or withholding
obligations. Neither party has authority to act on behalf of or to enter into
any contract, incur any liability, or make any representation on behalf of the
other.
17. MISCELLANEOUS.
17.1 Force Majeure. In the event BBDC's delivery or arranging for
-------------
delivery of Products under this Agreement is prevented, impaired, reduced or
restricted by reason of force majeure, labor disputes, fire, acts of God, or any
other similar or dissimilar cause beyond its control, including but not limited
to the unavailability of such Products, transportation, shortage of materials or
fuel, delay in delivery or failure to deliver by BBDC's suppliers, loss of
facilities of distribution, the voluntary foregoing of the right to acquire or
use any materials in order to accommodate or comply with the orders, requests,
regulations, recommendation or instructions of any governmental authority
(whether in furtherance of national defense or war activities or to meet any
other emergency), or the compliance with any law, order, ruling, regulation,
instruction or requirements of any governmental authority or any political
subdivision or agency thereof, or for any other cause whether of the same or
different character than specified in this Agreement, beyond the reasonable
control of the affected party, BBDC, without liability or obligation, may reduce
or eliminate Products during the period of any such disability. In any such
case, the products which BBDC is unable to supply shall be eliminated from this
contract by written notice describing the amounts eliminated and the estimated
time period during which deliveries are to be suspended; and BBDC shall be
relieved of any liability with respect to such Products during the time BBDC may
be unable to deliver such Products. In addition, due to circumstances beyond its
control, BBDC, at its discretion, may add to the cost of Products for any
account, regardless of location, its fuel costs, including any taxes and
surtaxes, and other related costs associated with its delivery of Products so
long as such circumstances continue to affect BBDC's costs.
17.2 Severability. In the event that any provision in this Agreement is
------------
held to be invalid, unenforceable, void or illegal, in whole or in part, by any
court of competent jurisdiction, it shall be deemed severable from the remainder
of this Agreement and shall in no way affect, impair or invalidate any other
provision in this Agreement. If such provision shall be deemed
18
invalid due to its scope or breadth, such provision shall be deemed valid to the
extent of the scope of breadth permitted by law.
17.3 Governing Law, Choice of Forum and Time for Bringing Action. The
-----------------------------------------------------------
validity, construction and performance of this Agreement shall be governed by
and construed in accordance with the internal laws of the State of California
without regard to its choice of laws provisions and, if applicable, the laws of
the United States. In the event any legal action become necessary to enforce or
interpret the terms of this Agreement, the parties agree that such action shall
be brought in the Superior Court for the State of California, County of Orange,
or the U.S. District Court for the Central District of California, and the
parties hereby submit to the exclusive jurisdiction of such courts. Each party
further agrees that personal jurisdiction over it may be effected by service of
process by registered or certified mail, return receipt requested, and that when
so made shall be as if served upon it personally within the State of California.
Any action for a breach of this Agreement shall commence within one (1) year
after the cause of action has accrued.
17.4 Entire Agreement. This Agreement and all exhibits and schedules and
----------------
related agreements incorporated by reference constitute the complete and
exclusive statement of agreement between ISP and BBDC with respect to the
subject matter hereof and replaces and supersedes all prior written and oral
agreements or statements by and among the parties concerning the subject matter
hereof. No representation or warranty concerning the subject matter hereof not
contained in this Agreement shall be binding on the parties or have any force or
effect whatsoever.
17.5 Amendments. This Agreement may not be amended, modified or waived in
----------
any respect without further written agreement of both parties, signed by their
respective authorized representatives.
17.6 Counterparts. This Agreement may be executed in one or more
------------
counterparts, which shall together constitute but one and the same instrument.
17.7 Waivers. Neither party's failure to insist, in one or more
-------
instances, upon the performance of any term of this Agreement shall be construed
as a waiver or relinquishment of its right to such performance or other
performance of such term, and the other party's obligations shall continue in
full force. Either party's consent to any act by the other party on any one
occasion shall not be deemed a consent of the same act on any other occasion.
17.8 Time Is of the Essence. Time is of the essence in each agreement,
----------------------
covenant and condition of this Agreement.
17.9 Captions. The captions and heading in this Agreement are for
--------
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
17.10 Assignment. Neither party may assign any rights or delegate any
----------
duties under this Agreement without the prior written consent of the other party
which shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, ISP acknowledges that BBDC has affiliates and subsidiaries and may
assign performance of some or all of the terms of this Agreement to one or more
such related entities. For purposes of this Section, any transfer,
19
sale, merger or consolidation of ISP, or a substantial portion of ISP's assets,
whether by contract or operation of law, or any other transaction or series of
related transactions transferring all or substantially all of ISP's business,
assets (including this Agreement), stock or control shall be deemed an
assignment and require such prior written consent by BBDC, but shall not modify,
supplement or terminate the rights or obligations of the parties under this
Agreement. For purposes of the preceding sentence, "control" means, with respect
to a corporation or limited liability company, the right to exercise, directly
or indirectly, more than fifty percent (50%) of the voting rights attributable
to the controlled corporation or limited liability company and, with respect to
any individual, partnership, trust, other entity or association, the possession,
directly or indirectly, of the power to direct or cause the direction of any
management or policies of the controlled entity. Subject to the foregoing, the
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the respective parties, including
without limitation any partnerships, corporations, or other entities in which
the parties may have a controlling interest or position. Nothing contained in
this Section shall be construed as a consent by either party to an assignment of
this Agreement or any interest in it by either party.
17.11 Further Assurances. Each party, at its own cost and expense, and at
------------------
the reasonable request of the other party, agrees to undertake all such further
acts and to execute all such further documents as may be necessary and
reasonably requested by either party to effectuate the performance of this
Agreement in accordance with the parties' intentions.
17.12 Affiliate Companies. In order to better serve the needs of ISP,
-------------------
Products may, from time to time, be provided by an affiliate company of BBDC.
ISP hereby acknowledges this fact and expressly consents to this distribution
arrangement. ISP further agrees to be liable for all payments due under this
Agreement to any such affiliate.
17.13 Interpretation. In the event of any claimed conflict, omission or
--------------
ambiguity in this Agreement, no presumption or burden of proof or persuasion
shall be implied by virtue of the fact that this Agreement was prepared by or at
the request of a particular party. This Agreement shall be interpreted equally
as to both parties and not against the party that drafted it. Whenever the
context requires, the gender of all words shall include the masculine, feminine
and neuter, and the number of all words shall include the singular and plural.
The word "and" includes the word "or". The word "or" is disjunctive but not
necessarily exclusive.
17.14 Parties in Interest. Nothing in this Agreement shall confer any
-------------------
rights on any third parties other than ISP and BBDC and their respective
successors and assigns, nor shall any provision give any third person any right
of subrogation or action over or against any party to this Agreement.
17.15 Information Reviewed. ISP has received and reviewed all information
--------------------
it considers necessary or appropriate for deciding whether to purchase Products
from BBDC. ISP has had an opportunity to ask questions and receive answers from
BBDC regarding the terms of the purchase of the Products and has further had the
opportunity to obtain all information which it deems necessary to evaluate the
purchase of the Products and to verify the accuracy of information otherwise
provided to ISP by BBDC.
17.16 Reliance on Authority of Person Signing Agreement. Neither ISP nor
-------------------------------------------------
BBDC shall be required to determine the authority of the individual signing this
Agreement to make any
20
commitment or undertaking on behalf of such entity or to determine any fact or
circumstance bearing upon the existence of the authority of such individual.
17.17 Attorneys' Fees. In the event that any dispute between ISP and BBDC
---------------
should result in litigation, arbitration, or mediation the prevailing party in
such dispute shall be entitled to recover from the other party all reasonable
fees, costs and expenses of enforcing any right of the prevailing party,
including reasonable attorneys' fees and expenses, all of which shall be deemed
to have accrued upon the commencement of such action and shall be paid whether
or not such action is prosecuted to judgment. Any judgment or order entered in
such action shall contain a specific provision providing for the recovery of
attorneys' fees and costs incurred in enforcing such judgment and an award of
prejudgment interest from the date of the breach at the maximum rate of interest
allowed by law. "Attorneys' fees" include (1) post-judgment motions; (2)
contempt proceedings; (3) garnishment, levy, and debtor and third party
examinations; (4) discovery; and (5) bankruptcy litigation. "Prevailing party"
means the party who is determined in the proceeding to have prevailed or who
prevails by dismissal, default or otherwise.
17.18 Notices. All notices must be given in writing and be personally
-------
delivered or delivered by facsimile or by certified or registered mail, return
receipt requested, postage prepaid, addressed to the parties as set forth
opposite their respective names below:
ISP: To the address set forth on the cover page of this Agreement.
BBDC: Bergen Xxxxxxxx Drug Company
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Vice President, eCommerce Sales
Fax: (000) 000-0000
with a copy to:
Bergen Xxxxxxxx Corporation
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Executive Vice President,
Chief Legal Officer & Secretary
Fax: (000) 000-0000
Items delivered personally shall be deemed delivered on the date of actual
delivery. Items sent electronically or by facsimile shall be deemed delivered on
the first business day after the date of transmission. Items sent by certified
or registered mail shall be deemed delivered three (3) business days after
mailing. A party may change the foregoing information or notices by notifying
the other party of such change in writing in accordance with the foregoing.
[END OF TERMS AND CONDITIONS]
21
Exhibit 2
Service Levels
--------------------------------------------------------------------------------------------
Performance Measure Service Levels Start-Up Service Levels
--------------------------------------------------------------------------------------------
Receiving accuracy per [*] [*]
10,000 lines
--------------------------------------------------------------------------------------------
Order filling accuracy per [*] [*]
10,000 lines filled
--------------------------------------------------------------------------------------------
Order delivery accuracy per [*] [*]
1,000 deliveries
--------------------------------------------------------------------------------------------
Document delivery accuracy [*] [*]
--------------------------------------------------------------------------------------------
Percent of lines filled [*] [*]
--------------------------------------------------------------------------------------------
Percent of adjusted lines [*] [*]
filled
--------------------------------------------------------------------------------------------
Percent of "A" lines filled [*] [*]
--------------------------------------------------------------------------------------------
Percent of fail to picks [*] [*]
--------------------------------------------------------------------------------------------
Receiving Accuracy. A receiving error is defined as an error regarding an
------------------
incorrect quantity received, an incorrect item received, and/or an incorrect
data entry code used for exceptions. Each condition is considered an error, so
it is possible to have more than one error on a single line. It is considered
an error once it is entered into the system.
Order Filling Accuracy. The Customer Call Log, maintained in customer service,
----------------------
is used to track the number of line items reported by customers on mispicks,
shortages, and outdates each week. Total lines filled information comes from
the Outbound Service Level Report. The error rate is calculated per 10,000
lines filled. All products reported as damaged when received by the customer
will be considered a delivery error.
Order Delivery Accuracy. Order delivery errors are shipped Orders delivered to
-----------------------
wrong consumers, packages left on truck, and damaged items (broken, crushed, cut
tops, leaking caps, etc). Each line will be considered 1 error.
Document Delivery Errors. Document delivery errors are deliveries made
------------------------
stickers, and invoices or stickers delivered late or to the wrong customer.
22
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTION.
Percent of Lines Filled, Percentage of Adjusted Lines Filled Percentage of Fail
-------------------------------------------------------------------------------
to Picks and Percent of Adjusted "A" Lines. The Percent of Lines Filled,
------------------------------------------
Adjusted Lines Filled, Fail to Picks, and Percent of Adjusted A Lines are
tracked daily on the Outbound Service Level Report. The monthly totals are
transferred by Performance & Quality Measurement into the Critical Success
Measures report.
23
LIST OF SCHEDULES
TO
TERMS AND CONDITIONS
Schedule Number Schedule Name
--------------- -------------
1.1 Product Categories
1.3 Additional Territories
2.1 Operations Manual
2.6 Returned Goods Policy
3.7 Financial Reconciliation Process
3.8 EDI/EFT Agreement
24
Schedule No. 1.1
Product Categories
FINELINE
CODE CODE DESCRIPTION
010 ANALGESIC
011 ANALGESIC, INTERNAL
012 ANALGESIC, EXTERNAL
030 ANTACIDS
031 ANTACIDS, LIQUID
032 ANTACIDS, OTHER
070 BABY NEEDS
071 BABY CARE
073 BABY FEEDING ACCESSORIES
074 BABY DISPOSABLE DIAPERS
110 COSMETICS, POPULAR PRICE
111 COSMETICS FOR LIPS
112 COSMETICS FOR FACE
113 COSMETICS FOR EYES
150 COUGHS & COLDS
151 COUGH & COLD LIQUIDS
152 COLD RUBS, INHALANTS, LOZENGES
153 COLD TABLETS & CAPSULES
154 NOSE DROPS & SPRAYS
170 DEODORANTS
171 DEODORANTS, AEROSOL
173 DEODORANTS, OTHER
190 DIET PRODUCTS
191 SUGAR & SALT SUBSTITUTES
192 FOODS, SPEC. OR SUPPLEMENTARY
193 WEIGHT CONTROL
205 BATTERIES
210 EYE PREPARATIONS
211 CONTACT LENS PREPARATIONS
212 EYE PREPARATIONS
230 FEMININE HYGIENE
231 SANITARY NAPKINS & TAMPONS
232 SANITARY BELTS & PANTS
233 FEMININE DEODORANTS
234 FEMININE DOUCHES
235 FEMININE SYRINGES
236 VAGINAL JELLY & CREAM
25
237 PROPHYLACTICS
250 FIRST AID
251 FIRST AID DRESSING
252 FIRST AID TREATMENTS
254 ELASTIC GOODS
270 FOOT CARE
271 FOOT PADS
272 FOOT PRODUCTS
296 TOILETRY SETS
310 HAIR ACCESSORIES
330 HAIR CARE
331 SHAMPOO
332 PERMANENTS & STRAIGHTENERS
333 HAIR SPRAY
334 HAIR SETTING
335 HAIR COLOR
337 MEDICATED SHAMPOO
370 LAXATIVES
371 LAXATIVES, TABLETS & LIQUIDS
372 LAXATIVES, OTHER
390 MANICURE PEDICURE
391 MANICURE IMPLEMENTS & ACCESSORIES
392 NAIL POLISH & REMOVER
410 MEN'S TOILETRIES
411 MEN'S COLOGNE, AFTER SHAVE
412 MEN'S HAIR PREPARATIONS
413 MEN'S TOILETRY SETS
450 ORAL HYGIENE
451 TOOTH PASTE & TOOTH POWDERS
000 XXXXX XXXXXXX & FLOSS
453 DENTURE PRODUCTS
454 MOUTH WASH & GARGLES
455 ORAL HYGIENE ACCESSORIES
470 PACKAGED REMEDIES
471 SEDATIVES & STIMULANTS
472 ASTHMA PREPARATIONS
473 TABLETS & CAPSULES
474 WETS & DRYS
476 OINTMENTS, CREAMS & LIQUIDS
477 NICOTINE REPLACEMENT THERAPY
490 PAPER PRODUCTS
491 FACIAL TISSUE
492 TOILET TISSUE & TOWELS
26
520 DIABETIC PRODUCTS
521 ALCOHOL SWABS
522 BLOOD GLUCOSE MONITORS/KITS
523 TESTING STRIPS
524 DIABETIC SUPPLIES
525 LANCETS
530 PHOTOGRAPHY
531 FILM & FLASH BULBS
550 PRIVATE LABEL
570 SEASONAL PRODUCTS
571 SUN TAN PREPARATIONS
572 INSECT REPELLANTS
610 BLADES
613 SHAVING CREAM
614 NON-ELECTRIC RAZORS
620 WELLNESS
621 HOMEOPATHIC
622 HERBAL
630 SICKROOM SUPPLIES
631 AMBULATORY AIDS
632 BATHROOM SAFETY PRODUCTS
633 WHEELCHAIRS & ACCESSORIES
634 HOSPITAL BEDS & ACCESSORIES
635 SCOOTERS & LIFTOUT CHAIRS
636 OSTOMY
637 INCONTINENCE CARE
638 SKIN CARE
639 WOUND CARE
640 CUSHIONING & PRESSURE RELIEF
641 DIAGNOSTICS
642 RESPIRATORY CARE
643 HEALTH & FITNESS
644 ORTHOPEDIC SUPPORTS & BRACES
645 VASCULAR SUPPORTS
646 AIDS FOR DAILY LIVING
647 MISCELLANEOUS
650 LADIES TOILETRIES
651 ACNE MEDICATIONS
652 PERSONAL SOAP
653 HAND, BODY & FACE LOTIONS, CREAMS
654 BATH PRODUCTS
000 XXXXXX XXXXX, XXXXX & XXXX
000 XXXXXXXXX PRODUCTS
27
657 DEPILATORY
658 LADIES TOILETRY SETS
730 VITAMINS
731 VITAMIN TABLETS
732 VITAMINS, LIQUID
733 VITAMINS, NATURAL
734 VITAMINS, GENERIC
800 PHARMACY, NON RX
28
Schedule 1.3
Additional Territories
NONE
29
Schedule 2.1
Operations Manual
TO BE ATTACHED
30
Schedule 2.6
Returned Goods Policy
1. BBDC shall not accept any returns of Products by ISP consumers that do not
include a Returned Product Authorization ("RPA"), which ISP's consumers may
obtain from an ISP customer service representative. ISP will
electronically transmit to BBDC the RPA, and related information, on a
daily basis.
2. Subject to the limitations and handling charges set forth in this policy,
ISP shall be given full credit for unopened and unused Products or
defective Products returned in accordance with this policy.
3. In no event shall BBDC accept returns in any month which in the aggregate
exceed five percent (5%) of the Orders for the current month.
4. ISP (or its consumers) shall be responsible for the shipping costs
associated with the return of Products, unless caused by an error in BBDC's
picking or packaging, in which case BBDC will pay for such shipping costs.
ISP shall receive full credit (ISP's acquisition cost) on:
(a) Filling Errors
(b) Guaranteed Sale Items
(c) Ordering Errors
(d) Shipping Errors
(e) Billing Errors
(f) Shortages, Claims
(g) Concealed Shipping Damages
5. BBDC will electronically notify ISP of its receipt of Products from ISP's
consumer and ISP will be responsible for processing the credit to the
consumer's credit card.
6. Products returned and received by BBDC twenty (20) or more days after
shipment by BBDC will be subject to a ten percent (10%) handling charge.
Certain other merchandise will be subject to the following:
(a) Unsalable merchandise as a general rule will not be returnable.
7. Credits are posted to statements twice a month (on the 15/th/ and 30/th/).
(a) Ordering/shipping errors and all other salable items will be processed and
posted within two (2) weeks of receipt of merchandise.
31
(b) All unsalable products (expired, outdated, shop worn, etc.) will be
processed and posted within four (4) weeks of receipt of merchandise.
8. Items requiring special handling:
(a) Specially handled Items: Salable items requiring special handling
(refrigeration, ORM-D items, and/or Listed Chemicals) should be held under
proper storage for special approval and instructions regarding return
shipping requirements.
9. Items that may not be returned:
(a) Unsalable products from manufacturers whose policy will not allow the
wholesaler to handle. BBDC will assist you in contacting these
manufacturers to help effect the return, if desired.
(b) Products which are outdated past allowable time given by the manufacturer
for return.
(c) Products with broken seals and/or partial contents.
(d) Promotional goods such as "cents off", bonus pack or trial size, or other
Products sold on a no return basis.
32
Schedule 3.7
Financial Reconciliation Process
TO BE ATTACHED
33
Schedule 3.8
ELECTRONIC PAYMENTS AGREEMENT
This Electronic Payments Agreement ("Agreement") effective as of September 16,
1999 is entered into by and between ePills, Inc., a Delaware corporation,
located at 0000 Xxxxxx. Xxxxx X, Xxxxxxxxxx, XX 00000 ("Originator") and Bergen
Xxxxxxxx Drug Company, a California corporation, located at 0000 Xxxxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxx 00000 ("Beneficiary").
RECITALS
--------
A. Originator and Beneficiary are or may become parties to one or more Business
Agreements, including the Internet Fulfillment Services Agreement dated
September 16, 1999, pursuant to which Originator may, from time to time, become
obliged to make payments to Beneficiary.
B. Originator and Beneficiary desire to establish terms and conditions upon
which Originator shall make such payments and communicate associated Remittance
Information in electronic form.
AGREEMENT
---------
NOW THEREFORE, the parties agree as follows:
1. DEFINITIONS
1.1 Terms as Defined in this Agreement. As used in this Agreement, the
----------------------------------
following terms have the following meanings:
(a) Beneficiary's Account: The deposit account at Beneficiary's Bank
---------------------
designated in Appendix 1.1, that is to be credited with payments
from Originator.
(b) Beneficiary's Bank: The bank designated by Beneficiary in
------------------
Appendix 1.1 for receiving payment from Originator.
(c) Business Agreements: All contractual relationships between the
-------------------
parties giving rise to an obligation of Originator to pay
Beneficiary, designated in Appendix 1.4.
(d) Payment Obligation: An obligation of Originator to pay money to
------------------
Beneficiary pursuant to the Business Agreements.
34
(e) Remittance Information: The information relating to a payment
----------------------
designated in Appendix 2.2.
(f) Third Party Service Provider: An entity designated by a party in
----------------------------
Appendix 1.2 to assist the party in the communication of
Transaction Sets and notice between the parties separate from any
payment order.
(g) Transaction Set: A collection of data that is communicated
---------------
between the parties, as designated in Appendix 2.1 or as
otherwise agreed by the parties.
1.2 Terms Defined in Article 4A. Terms used in this Agreement but not
---------------------------
otherwise defined shall be defined as provided in Uniform Commercial Code
Article 4A as enacted in the jurisdiction whose law governs this Agreement.
2. AGREEMENT AND AUTHORIZATION
2.1 Credits. Originator agrees and Beneficiary authorizes Originator to
-------
(i) satisfy its Payment Obligation by initiating funds transfers that result in
payment to the Beneficiary by credit to Beneficiary's Account, and (ii)
communicate associated Remittance Information to Beneficiary in accordance with
this Agreement.
2.2 Debits. Neither party shall initiate a transaction in connection with
------
a Payment Obligation for the purpose of debiting a bank account of the other
party.
3. PAYMENT AND REMITTANCE PROCEDURE
3.1 Payment. Originator shall instruct its bank to process funds
-------
transfers hereunder using the funds-transfer system or other mechanism specified
in Appendix 1.3, in accordance with this Agreement and the rules of such funds-
transfer system.
3.2 Remittance Information. For each funds transfer initiated under this
----------------------
Agreement, Originator shall communicate the associated Remittance Information to
Beneficiary as specified in Appendix 2.
3.3 No Warranty of Funds. Beneficiary acknowledges that its receipt of
--------------------
Remittance Information communicated separately from the funds transfer to which
the Remittance Information relates will not constitute a warranty by Originator
that the funds transfer has been initiated on a timely basis or that any
resulting payment order will be accepted by Beneficiary's Bank on any date
specified therein.
4. TIMING OF PAYMENTS
35
4.1 Timeliness. A payment from Originator to Beneficiary shall be
----------
considered timely with respect to any payment due date determined in accordance
with the applicable Business Agreement if the corresponding funds transfer is
completed on the day such payment is due. If the funds transfer cannot be
completed on such date, Originator's payment is timely if the funds transfer is
completed on the next day completion can occur.
4.2 Effect of Delay. Originator shall not be in breach of this Agreement
---------------
or the applicable Business Agreement, or suffer any loss of discount or other
penalty, with respect to a funds transfer that was initiated properly and timely
by Originator to the extent its completion is delayed because of failure or
delay by the funds-transfer system or other mechanism designated in Appendix
1.3, the operation of a funds-transfer system rule which could not be
anticipated by the Originator, or rejection by the Beneficiary's Bank. However,
any such failure, delay or rejection does not extinguish the Originator's
obligation to pay the Beneficiary as soon as practical after the failure, delay
or rejection is discovered.
5. DISCHARGE OF PAYMENT OBLIGATIONS
5.1 Discharge: Credit to Originator. Upon completion of a funds transfer
-------------------------------
authorized by Agreement 2.1, the corresponding Payment Obligation of the
Originator shall be discharged to the same extent as if such payment had been
received in cash. Beneficiary shall credit Originator for the amount of such
payment, as of the date the funds transfer was completed.
5.2 Disallowance of Credits Taken. If Beneficiary disallows any
-----------------------------
discounts, allowances, adjustments or other credits against a Payment Obligation
taken by Originator in conjunction with a funds transfer, Beneficiary shall
promptly notify Originator of the amount of and reason for such disallowance in
accordance with Appendix 2.1
5.3 Partial Payments. Notwithstanding any statement contained in any
----------------
Remittance Information or related Transaction Set, the completion of any funds
transfer hereunder shall not constitute full satisfaction of any portion of the
corresponding Payment Obligation greater than the amount paid.
5.4 Effect of Payment on Other Rights. Notwithstanding the terms of
---------------------------------
Agreement 5.1, the completion of a funds transfer shall not constitute a waiver
of any contract right under the corresponding Business Agreement that would be
deemed waived by the acceptance of such payment in cash if within ten (10)
business days after the completion of such funds transfer or such other time
period as allowed by applicable law or Business Agreement, Beneficiary sends an
equivalent payment amount to Originator in accordance with Agreement 5.5 and
notifies Originator of the reason for the return in accordance with Agreement
11.1.
36
5.5 Payment Returns, Adjustments, Credits and Rebates. If Beneficiary
-------------------------------------------------
elects to exercise a right to return a payment received from Originator or is
required to pay Originator any adjustment, rebate, or other credit because of,
for example, duplicate payments (rather than by crediting Originator's account
balance), Beneficiary shall make such payment by initiating a new payment in the
manner specified in Appendix 1.6.
6. RECEIPT, ACKNOWLEDGMENT AND VERIFICATION
6.1 Receipt. A Transaction Set or notice communicated in accordance with
-------
this Agreement shall be considered received when it is accessible by the
intended recipient as specified in Appendix 2.3.
6.2 Acknowledgment. To the extent required by Appendix 2.1, a party that
--------------
receives a Transaction Set or notice from the other party shall acknowledge that
such Transaction Set or notice was received and is syntactically correct by
communicating the Acknowledgment specified in Appendix 2.1 to the sender within
five (5) business days of receipt.
6.3 Verification. The recipient of a Transaction Set or notice shall take
------------
reasonable steps to verify the claimed identity of the sender and the integrity
of the content of a Transaction Set or notice (as specified in Appendix 4)
before relying upon it. If a Transaction Set or notice is received in garbled
form, or cannot be so verified, the recipient shall notify the sender of the
problem within five (5) business days unless the sender's identity cannot be
discerned. In the absence of such notice to an identifiable sender, the sender's
version of the Transaction set or notice shall control.
6.4 Validity and Enforceability. Neither party shall contest the validity
---------------------------
or enforceability of Transaction Sets or notices communicated in electronic form
pursuant to this Agreement on grounds related to the absence of paper-based
writings, signing or originals. Each Transaction Set or notice communicated in
electronic form pursuant to this Agreement shall be considered to be:
(a) "in writing" and "written" to an extent no less than as if in
paper form;
37
(b) "signed" where the signer includes data intended as a signature
to an extent no less than as if undertaken with pen and paper;
and
(c) an original.
7. SECURITY PROCEDURES
7.1 Procedures. Each party shall employ reasonable security procedures to
----------
ensure that Transaction Sets, notices and other information specified in this
Agreement that are electronically created, communicated, processed, stored,
retained or retrieved are authentic, accurate, reliable, complete and
confidential.
7.2 Effect of Non-Party Security. The communication of any Transaction
----------------------------
Set or notice via a funds-transfer system shall not constitute a breach of
Agreement 7.1.
8. CONFIDENTIALITY
8.1 Confidential Information. Information that is considered confidential
------------------------
by either party is identified in Appendix 3. Such information shall be held in
confidence by the recipient and shall be disclosed only to those of its
employees or authorized representatives who require access in the performance of
their duties to the recipient. The recipient will exercise reasonable care in
the safeguarding of such confidential information.
8.2 Exceptions. Neither party shall be liable for the disclosure or use
----------
of any information designated in Appendix 3 as confidential that: (a) is, or
becomes publicly known, other than by breach of this Agreement; (b) is obtained
by the recipient from another person without restriction; (c) is previously
known by the recipient without restrictions; (d) is, at any time, developed by
the recipient independently of any disclosures hereunder; (e) is disclosed
pursuant to the consent of the party that considers such information
confidential; or (f) is required to be disclosed by law, provided that prior to
disclosing such information the recipient shall promptly notify the other party
of the demand to disclose or provide the information and the recipient agrees to
reasonably cooperate if the other party deems it necessary to seek a protective
order.
8.3 Survival of Obligation. These obligations and restrictions shall
----------------------
survive the termination of this Agreement for a period of ten (10) years.
38
9. LIABILITY
9.1 Breach of Business Agreements. Except as otherwise specifically
-----------------------------
provided herein, this Agreement neither enlarges nor diminishes the respective
rights and obligations of the parties under any Business Agreement, and the
liability of a party for breach of a Business Agreement shall be determined by
the provisions of that agreement and applicable law.
9.2 Conduct of Third Parties. Except as otherwise limited herein, each
------------------------
party shall be liable to the other for the acts or omissions of its respective
banks and Third Party Service Providers designated hereunder with respect to
their conduct in connection with such party's performance under this Agreement.
Neither party shall be liable to the other for the acts or omissions of any
funds-transfer system operator, or for the acts or omissions of any banks or
third party not selected by such party.
9.3 Consequential Damages. Neither Party shall be liable to the other
---------------------
under this Agreement for any special, indirect or consequential damages, even if
such party has been advised of the possibility of such damages (except for
liability directly resulting from a breach of the confidentiality or security
obligations of this agreement).
9.4 Costs. Each party shall bear the respective fees and other charges
-----
assessed by its designated banks and Third Party Service Providers (except as
otherwise provided in Appendix 1.5).
10. CHANGES, SUSPENSIONS AND TERMINATION
10.1 Change of Designations. Either party may change its designations of
----------------------
an account, bank, or Thirty Party Service Provider by notice to the other party.
Any such change shall be effective twenty-five (25) business days after notice
of such change from the party entitled to make the original designation is
received by the other party.
10.2 Suspension of Operations. Either party may suspend operations under
------------------------
this Agreement:
(a) upon notice to the other party, in the event that the notifying
party has a good faith belief that the information of either
party may be materially threatened or compromised; or
(b) if the performance of a party under this Agreement is delayed or
prevented by an act of God, natural disaster, computer or
39
communications failure or other cause beyond the affected party's
reasonable control.
10.3 Termination of Agreement. Either party may terminate this Agreement
-------------------------
at any time upon ninety (90) days' notice to the other. Notwithstanding such
termination, this Agreement shall remain in effect as to all funds transfers and
Transaction Sets that have been initiated by the Originator and not canceled
prior to termination of this Agreement.
11. MISCELLANEOUS
11.1 Notice. Unless otherwise specified herein, any notice required or
------
permitted under this Agreement shall be communicated in the manner specified in
Appendix 5 and addressed to the intended recipient at its notice address by
notifying the other party. Either party may from time to time designate a
different notice address by notifying the other party.
11.2 Waiver. No provision of this Agreement or any breach thereof shall
------
be deemed waived unless such waiver is in writing and signed/communicated by the
party claimed to have waived such provision or breach. No waiver of a breach
shall constitute a waiver or excuse any different or subsequent breach.
11.3 Assignment. This agreement is binding upon and inures to the benefit
----------
of the parties hereto and their respective successors and assigns. However,
neither party may assign any of its rights or delegate any of its obligations
under this Agreement without the prior written consent of the other party, which
consent shall not be unreasonably withheld, conditioned or delayed.
11.4 Choice of Law. This Agreement is governed by and interpreted in
-------------
accordance with the laws of the State of California.
11.5 Conflict Rules. In the event of any inconsistency between this
--------------
Agreement and another agreement between the parties addressing the subject
matter of this agreement, this agreement shall control. Any remittance
instructions contained in purchase order from Originator are superseded by this
Agreement. The parties agree to be bound by the rules of the funds-transfer
system or other mechanism used to communicate a payment order.
11.6 Entire Agreement. This Agreement and the Appendix hereto constitute
----------------
the entire agreement of the parties relating to the matters specified in this
Agreement and supersede all prior communications and agreements with respect to
such matters.
40
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ePills, Inc., a Delaware Bergen Xxxxxxxx Drug Company,
corporation a California corporation
By: ____________________________ By: ________________________________
Name: __________________________ Name: ______________________________
Title: _________________________ Title: _____________________________
00
XXXXXXXX
XXXXXXX 1. DESIGNATIONS
1.1 Beneficiary's Bank
------------------
ABA Transit Routing Number: ____________________
Beneficiary's Account Number: __________________
Administrative Contact: ________________________
Special Instruction: ___________________________
1.2 Third Party Service Providers.
-----------------------------
1.2.1 Originator's Third Party Service Provider:
1.2.2 Beneficiary's Third Party Service Provider:
1.3 Funds Transfer System or Other Mechanism
----------------------------------------
Originator will pay Beneficiary via _____
1.4 Business Agreement.
------------------
The original Internet Fulfillment Services Agreement dated September 16,
1999 and any current addendum or extension.
1.5 Allocation of Costs.
-------------------
1.6 Procedure for Payment Returns.
-----------------------------
Check payable to _________________________
42
SECTION 2. TRANSACTION SETS
2.1 Transaction Sets.
----------------
Transaction Set Transaction Set Method of Acknowledgment
Function Format Communication Requirement
------------------- ------------------- ------------- -----------------
Remittance
Disallowance of Credits
Acknowledgment
Other Specify
2.2 Remittance Information.
----------------------
For each payment, the Remittance Information Transaction Set must contain
the following specified data:
(i) invoice number and date, (ii) invoice amount, (iii) discounts and
allowances taken against each invoice, (iv) net amount paid on each invoice, and
(v) identification of adjustments.
2.3 Receipt of Transaction Sets.
---------------------------
A Transaction Set will not be deemed to have been properly received by
the intended recipient, and no Transaction Set shall give rise to any
obligation, until it is accessible to the receiving party at such party's
receipt computer described below:
2.3.1 Originator's computer make and model:_______________________
__________________________________________________________________
2.3.2 Beneficiary's computer make and model: ______________________
___________________________________________________________________
SECTION 3. CONFIDENTIAL INFORMATION
All data is to be kept confidential.
43
SECTION 4. VERIFICATION AND SECURITY PROCEDURES
All transactions by both parties (Originator and Beneficiary) are carried
out through their respective banks. Appropriate verification and security
procedures are the responsibility of each party and its bank.
SECTION 5. NOTICE
5.1 Originator Notice Address
-------------------------
ePills, Inc.
0000 Xxxxxx, Xxxxx 0
Xxxxxxxxx, XX 00000
Attn:____________________
5.2 Beneficiary Notice Address
--------------------------
Bergen Xxxxxxxx Drug Company
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: ___________________
with a copy to:
Bergen Xxxxxxxx Corporation
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Executive Vice President,
Chief Legal Officer & Secretary
Facsimile: (000) 000-0000
5.3 Method for Communication of Notice
----------------------------------
The method for communication of notice shall be in written form.
44
