Handling Fees and Bonus Payments. Drugstore shall pay to ▇▇▇▇▇ handling fees and bonus payments for the handling, picking and packaging for shipment of both ▇▇▇▇▇ Inventory and Drugstore Inventory in accordance with the following terms: (a) Drugstore shall pay to ▇▇▇▇▇ a basic handling charge of $1.45 per order of goods which shall include up to five Lines of product regardless of the quantity of items of any one particular line of product. In addition, for each Line of product in excess of five for each order, Drugstore shall pay to ▇▇▇▇▇ an additional $0.09 per Line. In determining the number of Lines of product in an individual order, both ▇▇▇▇▇ Inventory and Drugstore Inventory shall be included. The picking and packing of samples, leaflets and other marketing materials shall not be considered a Line. However, if the picking and packing of such items materially increases the cost of fulfillment to ▇▇▇▇▇, ▇▇▇▇▇ shall notify Drugstore. The parties will, within five days of such notice, discuss methods to reduce or eliminate the additional cost to ▇▇▇▇▇, including reducing the picking and packing requirements for such materials or paying ▇▇▇▇▇ its cost for picking and packing such materials. In the event the parties fail to reach an agreement, to reduce or eliminate the additional costs to ▇▇▇▇▇ within ten days from the date of ▇▇▇▇▇'▇ notice to Drugstore, ▇▇▇▇▇ may discontinue the picking and packing of samples, leaflets and other marketing materials until such time the parties may so agree; and any such failure by ▇▇▇▇▇ to pick and pack any such samples, leaflets or other marketing materials shall not be considered a terminable event by either party under the terms of this Agreement. (b) ▇▇▇▇▇ shall invoice Drugstore for handling charges daily. Invoices are due on the fifteenth (15th) day after the date of the invoice (net 15 days) and must be paid by electronic funds transfer to the account specified in paragraph 2(c) above. (c) Drugstore hereby guarantees a minimum of 3,000,000 customer orders for product to be handled by ▇▇▇▇▇ during the three-year term of this Agreement. If Drugstore (1) ceases business for any reason and/or this Agreement is terminated for any reason other than default or breach by ▇▇▇▇▇, or (2) does not send 3,000,000 orders to ▇▇▇▇▇ during the initial three-year term, Drugstore shall pay to ▇▇▇▇▇ a sum calculated as follows: i. where the actual number of orders processed by ▇▇▇▇▇ is less than 2,268,000 orders, Drugstore shall pay that sum of money which is equal to the number of actual orders processed subtracted from 2,268,000 multiplied by $0.44 PLUS the difference between the number of actual orders processed and 3,000,000 multiplied by $0.49. For example, if the number of actual orders processed is equal to 1,000,000 orders, then Drugstore would pay to ▇▇▇▇▇ the sum of $1,537,920.00 which is the result of the following calculation: ((2,268,000 - 1,000,000) x $0.44) + ((3,000,000 - 1,000,000) x $0.49); or ii. where the actual number of orders processed by ▇▇▇▇▇ is equal to or greater then 2,268,000 orders, Drugstore shall pay that sum of money which is equal to the number of actual orders processed subtracted from 3,000,000 orders multiplied by $0.49. For example, if the number of CONFIDENTIAL TREATMENT REQUESTED actual orders processed is equal to 2,500,000 orders, then Drugstore would pay to ▇▇▇▇▇ the sum of $245,000.00 which is the result of the following calculation: (3,000,000 - 2,500,000) x ($0.49). Said sums shall be due and payable within 15 days after (1) cessation of business by Drugstore (2) termination of this Agreement for any reason other than default or breach by ▇▇▇▇▇, or (3) the end of the initial three year term, whichever first occurs. (d) Once a total of 2,268,000 orders have been filled by ▇▇▇▇▇ and paid for by Drugstore, the basic handling charge shall be reduced from $1.45 per order to $1.15 per order. Orders containing more than five Lines shall continue to be charged an additional $0.09 per extra line over five Lines for handling by ▇▇▇▇▇. (e) In the event either Drugstore or Drugstore's customer request additional special handling of an order such as gift wrap, extra packaging or extra wrapping, ▇▇▇▇▇ may impose a special handling charge upon each such order as the parties may so agree. All specialized wrapping, packaging and shipping supplies shall be furnished by Drugstore at Drugstore's cost. (f) In the event that ▇▇▇▇▇ fails to pick the required inventory, package it for shipment and deliver it to the Delivery Point at or before [*] Central Standard Time (or Central Daylight Savings Time when Daylight Savings Time is being observed) on the date of receipt of the order, ▇▇▇▇▇ shall reimburse Drugstore for the shipping charges paid by Drugstore upon that Order. This penalty shall not apply to any order which cannot be filled due to circumstances beyond the control of ▇▇▇▇▇, including but not limited to acts of God, strikes at facilities other than ▇▇▇▇▇ facilities, transportation interruptions affecting the supply of ▇▇▇▇▇ Inventory, manufacturer or distributor back orders and insufficient Drugstore inventory or packaging supplies. (g) Drugstore shall pay to ▇▇▇▇▇ bonus compensation in accordance with the following terms: (i) at the end of each calendar quarter during the term of this Agreement, commencing on March 31, 1999, a review of the goods and services provided by ▇▇▇▇▇ in accordance with the terms of this Agreement shall be made. ▇▇▇▇▇ shall be entitled to bonus compensation of [*] per processed order for each calendar quarter, if, and only if, the following bonus criteria are met: (A) Orders received before [*] each day are delivered to the Delivery Point not later than [*] of the same day at a rate equal to or greater than 99.8% of the time. [*] Represents a confidential provision for which confidential treatment has been requested from the Securities and Exchange Commission. CONFIDENTIAL TREATMENT REQUESTED (B) ▇▇▇▇▇ has maintained ▇▇▇▇▇ Inventory available to fill customer orders in stock and available for picking at least 98% of the time; provided, however, adjustments shall be made to account for manufacturer and distributor backorders of product, unavailable product, recall product, or any other circumstances outside of ▇▇▇▇▇'▇ control which affect the timely receipt of product by ▇▇▇▇▇. (C) ▇▇▇▇▇'▇ accuracy in filling and packaging for shipment in accordance with Drugstore customer orders is at or exceeds 99.8%. (D) Orders which are not filled and packaged ready for shipping due to events beyond the control of ▇▇▇▇▇ including but not limited to acts of God, strikes at facilities other than the ▇▇▇▇▇ facilities, transportation interruptions affecting the supply of ▇▇▇▇▇ inventory, unavailability of ▇▇▇▇▇ or Drugstore Inventory from the manufacturer or distributor, and unavailability of adequate and proper packaging and shipping materials to be supplied by Drugstore, shall not be considered in determining whether or not ▇▇▇▇▇ has met the bonus criteria specified in (A) through (C) above. (ii) Bonus compensation as provided in this paragraph shall be paid within 15 days of the invoice date by electronic funds transfer to the address and account provided in paragraph 2 (c) above.
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Handling Fees and Bonus Payments. Drugstore shall pay to ▇▇▇▇▇ handling fees and bonus payments for the handling, picking and packaging for shipment of both ▇▇▇▇▇ Inventory and Drugstore Inventory in accordance with the following terms:: CONFIDENTIAL TREATMENT REQUESTED
(a) Drugstore shall pay to ▇▇▇▇▇ a basic handling charge of $1.45 [*] per order of goods which shall include up to five [*] Lines of product regardless of the quantity of items of any one particular line of product. In addition, for each Line of product in excess of five [*] for each order, Drugstore shall pay to ▇▇▇▇▇ an additional $0.09 [*] per Line. In determining the number of Lines of product in an individual order, both ▇▇▇▇▇ Inventory and Drugstore Inventory shall be included. The picking and packing of samples, leaflets and other marketing materials shall not be considered a Line. However, if the picking and packing of such items materially increases the cost of fulfillment to ▇▇▇▇▇, ▇▇▇▇▇ shall notify Drugstore. The parties will, within five days of such notice, discuss methods to reduce or eliminate the additional cost to ▇▇▇▇▇, including reducing the picking and packing requirements for such materials or paying ▇▇▇▇▇ its cost for picking and packing such materials. In the event the parties fail to reach an agreement, to reduce or eliminate the additional costs to ▇▇▇▇▇ within ten days from the date of ▇▇▇▇▇'▇ notice to Drugstore, ▇▇▇▇▇ may discontinue the picking and packing of samples, leaflets and other marketing materials until such time the parties may so agree; and any such failure by ▇▇▇▇▇ to pick and pack any such samples, leaflets or other marketing materials shall not be considered a terminable event by either party under the terms of this Agreement.
(b) ▇▇▇▇▇ shall invoice Drugstore for handling charges daily. Invoices are due on the fifteenth (15th) day after the date of the invoice (net 15 days) and must be paid by electronic funds transfer to the account specified in paragraph 2(c) above.
(c) Drugstore hereby guarantees a minimum of 3,000,000 [*] customer orders for product to be handled by ▇▇▇▇▇ during the three-year term of this Agreement. If Drugstore (1) ceases business for any reason and/or this Agreement is terminated for any reason other than default or breach by ▇▇▇▇▇, or (2) does not send 3,000,000 [*] orders to ▇▇▇▇▇ during the initial three-year term, Drugstore shall pay to ▇▇▇▇▇ a sum calculated as follows:
i. where the actual number of orders processed by ▇▇▇▇▇ is less than 2,268,000 [*] orders, Drugstore shall pay that sum of money which is equal to the number of actual orders processed subtracted from 2,268,000 [*] multiplied by $0.44 [*] PLUS the difference between the number of actual orders processed and 3,000,000 [*] multiplied by $0.49[*]. For example, if the number of actual orders processed is equal to 1,000,000 [*] orders, then Drugstore would pay to ▇▇▇▇▇ the sum of $1,537,920.00 [*] which is the result of the following calculation: ((2,268,000 - 1,000,000) x $0.44) + ((3,000,000 - 1,000,000) x $0.49); or[*]
ii. where the actual number of orders processed by ▇▇▇▇▇ is equal to or greater then 2,268,000 [*] orders, Drugstore shall pay that sum of money which is equal to the number of actual orders processed subtracted from 3,000,000 [*] orders multiplied by $0.49[*]. For example, if the number of [*] Represents a confidential provision for which confidential treatment has been requested from the Securities and Exchange Commission. CONFIDENTIAL TREATMENT REQUESTED actual orders processed is equal to 2,500,000 [*] orders, then Drugstore would pay to ▇▇▇▇▇ the sum of $245,000.00 [*] which is the result of the following calculation: (3,000,000 - 2,500,000) x ($0.49)[*]. Said sums shall be due and payable within 15 days after (1) cessation of business by Drugstore (2) termination of this Agreement for any reason other than default or breach by ▇▇▇▇▇, or (3) the end of the initial three year term, whichever first occurs.
(d) Once a total of 2,268,000 orders have been filled by ▇▇▇▇▇ and paid for by Drugstore, the basic handling charge shall be reduced from $1.45 per order to $1.15 per order. Orders containing more than five Lines shall continue to be charged an additional $0.09 per extra line over five Lines for handling by ▇▇▇▇▇.[*]
(e) In the event either Drugstore or Drugstore's customer request additional special handling of an order such as gift wrap, extra packaging or extra wrapping, ▇▇▇▇▇ may impose a special handling charge upon each such order as the parties may so agree. All specialized wrapping, packaging and shipping supplies shall be furnished by Drugstore at Drugstore's cost.
(f) In the event that ▇▇▇▇▇ fails to pick the required inventory, package it for shipment and deliver it to the Delivery Point at or before [*] Central Standard Time (or Central Daylight Savings Time when Daylight Savings Time is being observed) on the date of receipt of the order, ▇▇▇▇▇ shall reimburse Drugstore for the shipping charges paid by Drugstore upon that Order. This penalty shall not apply to any order which cannot be filled due to circumstances beyond the control of ▇▇▇▇▇, including but not limited to acts of God, strikes at facilities other than ▇▇▇▇▇ facilities, transportation interruptions affecting the supply of ▇▇▇▇▇ Inventory, manufacturer or distributor back orders and insufficient Drugstore inventory or packaging supplies.
(g) Drugstore shall pay to ▇▇▇▇▇ bonus compensation in accordance with the following terms:
(i) at the end of each calendar quarter during the term of this Agreement, commencing on March 31, 1999, a review of the goods and services provided by ▇▇▇▇▇ in accordance with the terms of this Agreement shall be made. ▇▇▇▇▇ shall be entitled to bonus compensation of [*] per processed order for each calendar quarter, if, and only if, the following bonus criteria are met:
(A) Orders received before [*] each day are delivered to the Delivery Point not later than [*] of the same day at a rate equal to or greater than 99.8% [*] of the time. [*] Represents a confidential provision for which confidential treatment has been requested from the Securities and Exchange Commission. CONFIDENTIAL TREATMENT REQUESTED
(B) ▇▇▇▇▇ has maintained ▇▇▇▇▇ Inventory available to fill customer orders in stock and available for picking at least 98% [*] of the time; provided, however, adjustments shall be made to account for manufacturer and distributor backorders of product, unavailable product, recall product, or any other circumstances outside of ▇▇▇▇▇'▇ control which affect the timely receipt of product by ▇▇▇▇▇.
(C) ▇▇▇▇▇'▇ accuracy in filling and packaging for shipment in accordance with Drugstore customer orders is at or exceeds 99.8%[*].
(D) Orders which are not filled and packaged ready for shipping due to events beyond the control of ▇▇▇▇▇ including but not limited to acts of God, strikes at facilities other than the ▇▇▇▇▇ facilities, transportation interruptions affecting the supply of ▇▇▇▇▇ inventory, unavailability of ▇▇▇▇▇ or Drugstore Inventory from the manufacturer or distributor, and unavailability of adequate and proper packaging and shipping materials to be supplied by Drugstore, shall not be considered in determining whether or not ▇▇▇▇▇ has met the bonus criteria specified in (A) through (C) above.
(ii) Bonus compensation as provided in this paragraph shall be paid within 15 days of the invoice date by electronic funds transfer to the address and account provided in paragraph 2 (c) above.
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