Exhibit 10.11
INTERNET FULFILLMENT SERVICES AGREEMENT
This Internet Fulfillment Services Agreement ("Agreement") is made as of
July 1, 1999 by and between Bergen Xxxxxxxx Drug Company, a California
corporation ("BBDC"), and xxxx.xxx, a Delaware corporation ("IR").
RECITALS
A. IR is an Internet retailer 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
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the Terms and Conditions attached as Exhibit 1 (collectively, "Products");
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C. IR wishes to contract with a fulfillment service provider to ship the
Products and provide related services to IR's consumers in the United States;
D. BBDC wishes to provide the services described in this Agreement to IR;
E. Under no circumstances will 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.
The Terms and Conditions in Exhibit 1 ("Terms and Conditions") are
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incorporated by this reference. Capitalized terms used without definition have
meanings in the Terms and Conditions.
2. TERM.
Subject to Sections 9 and 10 of the Terms and Conditions, the Term of this
Agreement will be ten (10) years from the date of this Agreement.
3. MINIMUM ORDERS.
IR will submit Orders for at least [**].
4. FEES.
In addition to payment for Products, IR will pay BBDC the following service
fees.
**Confidential treatment has been
requested with respect to the
information contained within the
"[**]" markings. Such marked
portions have been omitted from
this filing and have been filed
separately with the Securities and
Exchange Commission.
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4.1 Set-Up Fee. [**]
4.2 Fulfillment Fee. [**]
4.3 [**] Such election may be changed by IR effective on the first
business day of any calendar quarter upon thirty (30) days' prior written notice
to BBDC.
4.3.1. [**] in addition to the amount set forth below:
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Category [**]
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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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4.3.2. [**] per Order in addition to the amount set forth below.
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Category [**]
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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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4.3.3 [**] per line in addition to the amounts set forth below
([**] maximum is subject to further review after October 1, 1999).
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Category [**]
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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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**Confidential treatment has been
requested with respect to the
information contained within the
"[**]" markings. Such marked
portions have been omitted from
this filing and have been filed
separately with the Securities and
Exchange Commission.
2
[**] represented on the manufacturers' current wholesale
price list, adjusted to reflect all applicable discounts
including free goods, promotional allowances and special
manufacturers pricing and IR contract pricing intended
by the manufacturer or supplier to be passed on to
retailers or consumers. Cash discounts, rebates and
ancillary benefits extended by any manufacturer or
supplier to the distributor are excluded from the
definition of "Cost". Any sales, use and business and
occupational taxes levied and/or paid by BBDC are IR's
responsibility and are added to IR's cost.
Net-billed items are primarily specific product
categories including home healthcare and durable medical
equipment from the Today's Healthcare (THC) catalog,
private label over-the-counter health and beauty care
merchandise, and certain consumer paper goods/bulk items
sold by the case. Net-billed items are not subject to
additional discounts or cost plus xxxx-ups, however such
purchases qualify towards total purchase volume.
Consumer Image and Ingredient Database License Fee. IR will be invoiced a
licensing fee of [**]
4.5 Special Services Fee. [Omitted]
4.6 Niche Products Storage Fee. At IR's reasonable request, BBDC will
provide storage space for additional items not generally stocked by BBDC ("Niche
Products"), subject to available suitable warehouse space. [**] 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, 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 cost-
plus xxxx-up) in addition to the normal per-Order charge pursuant to Section
4.3. Niche Products do not qualify towards total [**]
4.7 Rebate. On a quarterly basis, BBDC will pay IR rebates pursuant
to the following schedule set forth below:
[**]
**Confidential treatment has been
requested with respect to the
information contained within the
"[**]" markings. Such marked
portions have been omitted from
this filing and have been filed
separately with the Securities and
Exchange Commission.
3
[**]
4.8 Collateral Materials. IR will also be permitted to include in each
shipment up to [**] ("Collateral Materials") that are printed material no
bigger than 8 1/2 inches by 11 inches, each at no additional charge so long as
such Collateral Materials are to be included in all IR shipments. Order-specific
Collateral Materials, or Collateral Materials in excess of, or exceeding the
dimensions of, the allowable pieces of Collateral Materials described above will
be subject to an additional charge of [**] or as agreed upon by the parties. All
Collateral Materials will be paid for by IR.
5. PRICING.
BBDC will offer and make available to IR pricing programs under which
Products would be provided under this Agreement [**].
6. SERVICE LEVELS.
During the first sixty (60) days following the date BBDC begins shipping
Products under this Agreement ("Start-up Period"), BBDC will comply with the
"Start-Up Service Levels" in Exhibit A. After the Start-Up Period, BBDC will
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comply with the "Service Levels" in Exhibit A. Each of the Service Levels and
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Start-Up Service Levels will be deemed a material term of this Agreement, and
any failure to comply with them will entitle IR to terminate this Agreement
pursuant to Section 10.1.3 of the Terms and Conditions.
7. NOTICES.
Subject to Section 17.18 of the Terms and Conditions, notices to IR under
this Agreement will be sent to:
xxxx.xxx, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxx, Xxxx et al.
0 Xxxxxxxxxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Star, Esq.
Fax: (000) 000-0000
**Confidential treatment has been
requested with respect to the
information contained within the
"[**]" markings. Such marked
portions have been omitted from
this filing and have been filed
separately with the Securities and
Exchange Commission.
4
6. EXHIBITS.
All exhibits to this Agreement listed below are incorporated by this
reference.
Exhibit Number Exhibit Name
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1 Terms and Conditions
A Service Levels
IN WITNESS WHEREOF, the parties have executed this Internet Fulfillment
Services Agreement as of the date first written above.
IR:
xxxx.xxx
By:_______________________________________
Name:
Title:
BBDC:
Bergen Xxxxxxxx Drug Company
By:_______________________________________
Name: Xxxxx Xxxxxx
Title: Vice President, e-Commerce Sales
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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 will provide IR a list of
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specific products ("Products") and related information ("Item Catalog
Information" [EDI 832 Transaction Set]) from time to time. [**]
1.2 Niche Products. BBDC may elect to store and ship additional
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products requested by IR, including private label products and other products
that BBDC does not otherwise carry, upon payment of the Niche Product fees set
forth on the cover page.
1.3 Territory. BBDC will 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 ("Territory"). In no event will BBDC
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provide or ship Products to IR's consumers outside the Territory.
1.4 Exclusivity. [Omitted]
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1.5 Right of First Refusal. [Omitted]
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2. ORDERS; SHIPPING; RETURNS.
2.1 Operations Manual. The Operations Manual in Schedule 2.1 ("Operations
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Manual") is incorporated by this reference.
2.2 Orders. Orders for Products will be initially placed by IR's consumers
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using IR's Internet web site. IR will forward all orders for Products to BBDC by
electronic data interchange ("EDI") pursuant to Section 3.8 at least four (4)
times per day ("Orders"). Orders will 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. Subject to Section 4.2, BBDC will maintain sufficient
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inventory of the Products in an effort to facilitate the delivery of all Orders
for the Products. Inquiries by IR to BBDC's customer service representatives
concerning any Products must reference BBDC's Product number.
2.4 Shipping. BBDC will 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
will pass from BBDC to IR upon BBDC's delivery of the Products to the shipper
for delivery to IR's consumer. [**] BBDC will use commercially reasonable
efforts to ensure that all Orders for Products received before the daily "cut-
off time" will be shipped by the corresponding shipping time for such day. Out-
of-stock or back-ordered Products will be shipped promptly after BBDC's receipt
of such Products from the manufacturer or other supplier. Inquiries about
shipping status will be first directed to the shipper and any such initial
inquires to BBDC's customer service representatives where BBDC has provided IR
with a shipper's tracking number will be subject to an additional charge. BBDC
will 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
**Confidential treatment has been
requested with respect to the
information contained within the
"[**]" markings. Such marked
portions have been omitted from
this filing and have been filed
separately with the Securities and
Exchange Commission.
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forwarding agents, (v) shipments of hazardous materials or other products
requiring specialized shipping that shipper and/or BBDC are not prepared to
provide, and (vi) Drug Enforcement Administration ("DEA") Schedule II controlled
substances.
2.5 Labels and Invoices. Unless modified by Exhibit 2, if any, IR will
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provide BBDC standard packaging (standard size cardboard boxes, plain colored
plastic tape and plain bubble/paper packing material), labels and invoice forms
bearing IR's, and not BBDC's, name, logo and telephone number for BBDC's use in
shipping Products. IR may select from BBDC's standard invoice formats (inserting
IR's logo and return address) at no additional charge. Modifications and custom
work is subject to an additional charge at BBDC's then-current rates. If IR's
standard packaging, labels and invoice forms are not ordered through BBDC's
designated vendor (or IR uses non-standard packaging, labels or forms), IR will
be subject to additional charges for handling, storage and administration.
2.6 Returns. The Returned Goods Policy in Schedule 2.6 is incorporated by
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this reference.
3. PRICING; PAYMENT.
3.1 Pricing and Fees. [**]
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3.2 Price Adjustments. BBDC may change the pricing of any Product at any
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time; provided, however, any such change will not be effective with respect to
Products ordered by IR's consumers within twenty-four (24) hours of BBDC's
electronic notice to IR.
3.3 Rebates. [**]
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3.4 Taxes. IR will obtain and maintain a resale tax certificate in
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Kentucky and each other jurisdiction in which BBDC delivers Products to IR's
shipper. IR will collect and remit all applicable sales taxes and other taxes on
the sale or provision of Products to IR's consumers. IR will be responsible for
and will pay any excise, sales or use tax or other similar charge in the nature
of a tax imposed with respect to transactions under this Agreement (other than
income or other taxes on BBDC's net income) and, if paid or required to be paid
by BBDC, such amount will be added to and become part of the amount payable by
IR.
3.5 Timing of Payment. BBDC will submit invoices for the Products to IR on
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a per-Order basis for each Order received from IR's consumer. [**] IR's
obligation to pay for all purchases invoiced will be absolute and unconditional
and will not be subject to any abatement, reduction, set-off, defense,
counterclaim, interruption, deferment or recoupment for any reason whatsoever,
and such payments will 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 [**]
**Confidential treatment has been
requested with respect to the
information contained within the
"[**]" markings. Such marked
portions have been omitted from
this filing and have been filed
separately with the Securities and
Exchange Commission.
7
date. The right of BBDC to assess penalties for IR's payment delays will not
relieve IR of its obligation to make prompt payment in accordance with this
Section 3.
3.7 Financial Reconciliation. The Financial Reconciliation Process in
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Schedule 3.7 ("Financial Reconciliation Process") is incorporated by this
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reference.
3.8 EDI/EFT. The EDI/EFT Agreement in Schedule 3.8 is incorporated by
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this reference. All Orders, IR sales reports, BBDC invoices and remittance
detail information will be transmitted by EDI. All funds will be transferred
between the parties by electronic funds transfers ("EFT"). All data files
transmitted over the public Internet will be encrypted in adherence with EDIINT
standards.
4. IR'S COVENANTS.
4.1 Web Site. IR will, at its cost, develop, produce, implement and test
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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 under this Agreement. In
addition, IR will, at its cost, develop and procure all software interfaces or
programs necessary to enable IR to connect with BBDC's systems and operations
facilities. All software and hardware developed or purchased by IR to support
BBDC under this Agreement will remain the property of IR. Each screen accessible
to consumers on IR's web site will clearly identify IR. Unless modified by
Exhibit 2, if any, no content on IR's web site will directly or indirectly (a)
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identify BBDC or (b) lead any consumer or potential consumer to believe that IR
or its web site is the manufacturer of a Product. IR will update its web site to
indicate that a Product is unavailable or subject to other special conditions
based upon BBDC's Product notices and any failure to do so that results in
additional handling, storage, administrative or other costs to BBDC will subject
IR to an additional charge.
4.2 Marketing. [**] BBDC acknowledges that IR has sole authority and
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control over each stage of marketing for its program; provided however, if IR is
prohibited by law from performing any contemplated marketing activities, BBDC
may perform such functions at IR's expense to the extent BBDC may lawfully do
so. IR will provide reasonable advance notice of special offers, such as bundled
items, featured items and sales, advertising campaigns and other events that can
be reasonably expected to generate unusual volume (either overall or for
specific Products) in order to allow BBDC to have adequate inventory, staff and
other resources available to handle such volume.
4.3 Consumer Enrollment. IR will have sole responsibility for soliciting
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orders from consumers under this Agreement.
4.4 Records. IR will retain all documentation required by federal and
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state statutes and regulations.
4.5 License Revocation. IR will 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 IR's
required licenses, permits or registrations or any other approval required to
supply the services described in this Agreement.
4.6 Compliance with Law. IR will perform all of its duties under this
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Agreement in full compliance with all applicable federal, state, and local laws
and regulations.
4.7 Adequate Space and Personnel. IR represents and warrants it has, and
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agrees that it will 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.
**Confidential treatment has been
requested with respect to the
information contained within the
"[**]" markings. Such marked
portions have been omitted from
this filing and have been filed
separately with the Securities and
Exchange Commission.
8
4.8 Prohibition Against Publication of Certain Materials. IR will not
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knowingly or unknowingly incorporate in IR'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;
4.8.2 any material that is libelous, slanderous, harmful, abusive,
threatening, obscene or pornographic; or
4.8.3 distribution lists to be used for unsolicited electronic mail or
other mass electronic mailings.
4.9 Adverse Event Reporting. IR will report all adverse events relating to
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the Products pursuant to the requirements of the Food and Drug Administration.
4.10 Listed Chemicals. IR will obtain and maintain a Listed Chemicals
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license from the DEA and will 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. IR acknowledges and agrees that BBDC will 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 at the request
of IR will be at IR's sole cost and expense.
4.12 Support. BBDC and IR 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 will retain all documentation required by
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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 will 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 will 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 will 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 will
have no obligation under this Agreement to make public attorney-client
privileged documents.
5.2 Records. BBDC will retain all documentation required by federal and
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state statutes and regulations.
9
5.3 License Revocation. BBDC agrees that it will inform IR promptly after
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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.
5.4 Compliance with Law. BBDC agrees that it will perform all of its
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duties under this Agreement in full compliance with all applicable federal,
state, and local laws and regulations.
5.5 Adequate Space and Personnel. BBDC represents and warrants it has,
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and agrees that it will 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.
6. REPRESENTATIONS OF THE PARTIES.
6.1 Representations and Warranties of BBDC. BBDC hereby represents and
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warrants to IR 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 will 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 will
be free from any security interest or other lien (unless such Product is subject
to a chargeback agreement); (v) all Products will be delivered without damage to
IR's shipper for delivery to IR's consumer; (vi) this Agreement, when executed
and delivered by it, will be its legal, valid, and binding obligation,
enforceable against it in accordance with its terms; and (vii) its execution,
delivery and performance of this Agreement will 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.
6.2 No Representations or Warranties Regarding Products. BBDC makes, and
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will 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 and services provided in this Agreement. BBDC EXPRESSLY DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING BUT NOT LIMITED TO
THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE REGARDING THE
PRODUCTS AND SERVICES PROVIDED IN THIS AGREEMENT. IR understands that BBDC is
not the manufacturer of any Products and agrees that IR will settle all claims,
defenses, set-offs and counterclaims it may have with or against any
manufacturer directly with the manufacturer and will not assert any such claims,
defenses, set-offs or counterclaims against BBDC. IR agrees BBDC has made no
such representations or warranties, written or oral, express or implied, about
the Products or their fitness for any purpose. Accordingly, IR agrees that BBDC,
its subsidiaries and affiliates and the directors, officers, shareholders and
agents of each will not be liable to IR 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.
6.3 Representations and Warranties of IR. IR hereby represents and
------------------------------------
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 IR is duly authorized to bind IR to
all terms of this Agreement; (iii) this Agreement, when executed and delivered
by IR, will be the legal, valid, and binding obligation of IR, enforceable
against IR in accordance with its terms; (iv) its execution, delivery and
performance of this Agreement will 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) IR holds all valid licenses, permits and registrations in
appropriate jurisdictions to permit IR to operate its Internet services.
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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 IR, to the
extent of BBDC's legal capacity to do so, grants IR 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 IR 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 IR
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 IR by BBDC. IR will 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. IR may not sublicense, lease, distribute or otherwise
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transfer Software or Documentation or IR's right to use the Software or
Documentation.
7.3 No Copies. IR 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. IR may not remove,
obscure, or deface any proprietary notices contained in the Software or
Documentation, and IR must include such notices in any permitted copy of the
Software.
7.4 No Alterations. IR may not alter, modify or adapt any Software or
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Documentation or create derivative works from them. IR may not translate,
reverse engineer, disassemble or decompile the Software. BBDC will have no
liability for any claims by third parties or IR based upon altered Software or
Documentation.
7.5 Termination of License. The license to any part of the Software and
----------------------
Documentation will terminate automatically if IR fails to comply with the terms
of this license or any other material provision in this Agreement, or if the
Products for which IR is using the Software are discontinued. Upon termination
of a license, IR must cease using the Software and Documentation and, at BBDC's
election, return or destroy all copies of the Software and Documentation IR may
have in its possession or under its control, and certify to BBDC that IR has
done so. All of IR's obligations in this Agreement will survive termination of
any license.
7.6 Disclaimer. BBDC disclaims any representation or warranty regarding
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the Software and Documentation. IR acknowledges the possibility that (i) the
Software may not operate in combination with other software or hardware or in
the manner IR or its consumers may select for use and (ii) Software may not
operate without interruption or be error-free.
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 IR in connection with this
Agreement will be the property of BBDC.
7.8 Notice of Claims; Removal of Products and Content. Notwithstanding
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Section 14.2.1, IR will immediately notify BBDC of any written or oral claim
that any Software or Documentation used by IR in its web site or otherwise
infringes on the rights of any third party. Immediately upon notice from BBDC,
IR will discontinue the offering of any Product and the use of any Software and
Documentation that BBDC determines may subject BBDC or IR 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 IR in its web site or otherwise infringes on the rights of any third party
will terminate and rescind all of
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BBDC's representations, warranties, and indemnification obligations with respect
to the subject matter of the claim.
8. [Omitted]
9. TERM.
Unless terminated earlier pursuant to Section 10, the term of this
Agreement will be for the period years set forth on the cover page of this
Agreement from the date of this Agreement and will 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 IR by providing written
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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 IR upon a default by IR under this Agreement. For purposes of this provision,
a default will 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.
10.1.2 A party's failure to pay any amount that is due to the other
party under this Agreement or a consistent failure to make timely payments or
shipments under this Agreement and such failure continues for ten (10) 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 will 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 of a material adverse
--------------------------
change in the laws of any jurisdiction so as to affect through increased
regulations, liability, or otherwise, BBDC's fulfillment operations or the
Internet sale of Products, then either party may terminate this Agreement upon
thirty (30) days' written notice to the other without further obligation.
10.3 Licenses. If any required licenses, permits or registrations of BBDC
--------
or IR are revoked or suspended so as to materially impair such party's ability
to perform under this Agreement, BBDC or IR 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 will be entitled to payment of any amounts
owed to it by IR for Products ordered prior to termination or expiration and
shipped to IR's consumers. The obligations of the parties described in
12
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 will remain in effect notwithstanding the expiration or
termination of this Agreement. Additionally, termination of this Agreement will
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" will 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" will not include: (i) information that is or will 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 will, 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
Agreement. Notwithstanding the foregoing, the parties may issue a joint press
release 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 IR will each retain ownership of its own
--------------
customer lists.
12. NON-SOLICITATION.
12.1 Covenant Not to Solicit. Each party agrees that neither it nor its
-----------------------
employees, agents, or representatives will, during the ("Non-Solicitation
Period") without the other party's prior written consent, solicit for hire any
person who is employed by the other party or any of its subsidiaries or
affiliates
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.
12.4 Severability; Reformation. The covenants in this Section are severable
-------------------------
and separate, and the unenforcability of any specific covenant will not affect
the provisions of any other covenant in this Section or in this Agreement. In
the event any court of competent jurisdiction will 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 will thereby be reformed.
12.5 Independent Covenant. Each of the covenants in this Section will be
--------------------
construed as a covenant independent of any other provision of this Agreement,
and the existence of any claim or cause
13
of action of one party against the other, or any of its subsidiaries or
affiliates, whether predicated on this Agreement or otherwise, will 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 will 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.
During the Term and for two (2) years thereafter, IR will maintain at its
own cost and expense the following insurance together with such other insurance
as reasonably requested by BBDC in light of experience and changing risk
exposure:
(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 and [**] aggregate or [**] single limit.
(b) Workers' Compensation Insurance as mandated or allowed by all states in
which IR's business is being performed, including at least $1,000,000 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 IR locations in
the event of loss or damage.
(d) Errors and Omissions Insurance in the amount of [**], naming BBDC as an
additional insured.
All such policies will be written by a carrier or carriers rated "A" or
above by Best, will contain a clause requiring the carrier to give BBDC at least
thirty (30) days' prior written notice of any material change or cancellation of
coverage for any reason, and simultaneously with IR's execution of this
Agreement and annually thereafter, IR will deliver to BBDC original Certificates
of Insurance evidencing coverage required by this Section.
14. INDEMNIFICATION.
14.1 Indemnification by IR. IR will 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 death of, or bodily injury to, any person on account of the
use of a Product that results from IR's sale of such Product; or (2) any breach
by IR 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
--------------
will promptly notify IR in writing of any such Claim; provided, however, any
failure to so notify IR will not relieve BBDC of any liability it may have to IR
except to the extent such liability was caused by such failure.
**Confidential treatment has been
requested with respect to the
information contained within the
"[**]" markings. Such marked
portions have been omitted from
this filing and have been filed
separately with the Securities and
Exchange Commission.
14
14.1.2 Retention of Counsel. IR will retain counsel at its expense to
--------------------
act as lead counsel in the defense of all Claims against BBDC. The Indemnified
Party may retain 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 IR 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, IR
will have the right to control the defense, settlement, and prosecution of any
litigation.
14.2 Indemnification by BBDC. BBDC will indemnify, defend, and hold
-----------------------
harmless IR and its officers and directors from and against any and all Claims
to the extent arising out of claims against IR 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.
14.2.1 Notice by IR. Upon receipt of any notice of a Claim, IR will
------------
promptly notify BBDC in writing of any such claim; provided, however, any
failure to so notify BBDC will not relieve IR of any liability it may have to
BBDC except to the extent such liability was caused by such failure or as
provided in Section 7.8.
14.2.2 Retention of Counsel. BBDC will retain counsel at its expense
--------------------
to act as lead counsel in the defense of all Claims against IR. IR may retain
counsel of its own choice at IR's expense to the extent necessary to protect
IR'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 IR or that
fails to include an unconditional release of IR from all liability from all
asserted or threatened Claims, BBDC will have the right to control the defense,
settlement, and prosecution of any litigation.
15. LIMIT ON LIABILITY.
NEITHER PARTY WILL BE LIABLE FOR ANY CLAIM ARISING OUT OF THIS
AGREEMENT FOR INDIRECT, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES, WHETHER OR
NOT IT KNEW OR HAD REASON TO KNOW OF THE POSSIBILITY OF SUCH DAMAGES AND, EXCEPT
FOR PAYMENT OF MONEY DUE UNDER THIS AGREEMENT AND EXCEPT AS PROVIDED IN SECTION
14.1 OR SECTION 14.2, NEITHER PARTY'S AGGREGATE LIABILITY TO THE OTHER UNDER
THIS AGREEMENT FOR ANY AND ALL CLAIMS, WHETHER IN CONTRACT, TORT, OR OTHERWISE,
WILL EXCEED $1,000,000.
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 Extraordinary Events. 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
15
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, Products that BBDC is unable to supply will 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 will be relieved of any liability with respect to such
Products during the time BBDC may be unable to deliver such Products.
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 will be deemed severable from the remainder
of this Agreement and will in no way affect, impair or invalidate any other
provision in this Agreement. If such provision will be deemed invalid due to its
scope or breadth, such provision will 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 will 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 is necessary to enforce or
interpret the terms of this Agreement, the parties agree that such action will
be brought in Superior Court for the State of California, and the parties hereby
submit to 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
will be as if served upon it personally within the State of California. Any
action for a breach of this Agreement must commence within two (2) 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 agreement
between IR and BBDC with respect to the subject matter of this Agreement and
replace and supersede all prior written and oral agreements or statements by and
among the parties concerning the subject matter. No representation or warranty
concerning the subject matter not contained in this Agreement will 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 will together constitute but one and the same instrument.
17.7 Waivers. Neither party's failure to insist, in one or more instances,
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upon the performance of any term of this Agreement will 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 will continue in full force. Either
party's consent to any act by the other party on any one occasion will 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 provision of
----------------------
this Agreement.
17.9 Captions. The captions and heading in this Agreement are for
--------
convenience only and will not affect in any way the meaning or interpretation of
this Agreement.
16
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 will not be unreasonably withheld or delayed, which consent will be
based on the financial capability and business reputation of the proposed
assignee, or in the case of IR, a proposed assignment to any affiliate of a
major national pharmaceutical wholesale distributor that competes with BBDC.
Notwithstanding the foregoing, IR 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, sale, merger or consolidation of IR, or a substantial portion of
IR's assets, whether by contract or operation of law, or any other transaction
or series of related transactions transferring all or substantially all of IR's
business, assets (including this Agreement), stock or control will be deemed an
assignment and require such prior written consent by BBDC, but will 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 will be binding upon and will 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. Except as expressly
provided, this Section will not 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 IR,
-------------------
Products may, from time to time, be provided by an affiliate company of BBDC. IR
hereby acknowledges this fact and expressly consents to this distribution
arrangement. IR 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
will be implied by virtue of the fact that this Agreement was prepared by or at
the request of a particular party. This Agreement will be interpreted equally as
to both parties and not against the party that drafted it. Whenever the context
requires, the gender of all words will include the masculine, feminine and
neuter, and the number of all words will 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 will confer any rights
-------------------
on any third parties other than IR and BBDC and their respective successors and
assigns, nor will any provision give any third person any right of subrogation
or action over or against any party to this Agreement.
17.15 Information Reviewed. IR has received and reviewed all information it
--------------------
considers necessary or appropriate for deciding whether to purchase Products
from BBDC. IR 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 IR by BBDC.
17.16 Reliance on Authority of Person Signing Agreement. Neither IR nor
-------------------------------------------------
BBDC will be required to determine the authority of the individual signing this
Agreement to make any commitment or
17
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 IR and
---------------
BBDC should result in litigation, arbitration, or mediation the prevailing party
in such dispute will 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 will be deemed
to have accrued upon the commencement of such action and will be paid whether or
not such action is prosecuted to judgment. Any judgment or order entered in such
action will 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
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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:
IR: 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 & Marketing
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 will be deemed delivered on the date of
actual delivery. Items sent electronically or by facsimile will be deemed
delivered on the first business day after the date of transmission. Items sent
by certified or registered mail will 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]
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