CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY FAMILYMEDS GROUP, INC. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.] SUPPLY AGREEMENT
[CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED BY FAMILYMEDS GROUP, INC. CONFIDENTIAL PORTIONS
OF
THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.]
This
Supply Agreement dated this _____ day of _________________, 2007, between
Familymeds Group, Inc. (hereinafter, known as "Customer") and McKesson
Corporation ("McKesson") shall be to establish a multi-year program for the
supply of prescription drugs and other health and beauty care products by
McKesson to retail pharmacies owned or operated by Customer (referred to herein
as "Pharmacies" or "Stores"). The parties hereto agree as follows:
|
1.
|
MERCHANDISE
|
|
A.
|
For
purposes hereof, "Merchandise" shall comprise all items normally
stocked
by McKesson Drug Distribution Centers servicing the 48 contiguous
states,
including prescription drugs, OTC drugs, health and beauty aids and
sundries. McKesson reserves the right at all times to determine what
Merchandise it will stock and/or sell or discontinue from inventory
based
upon product quality, manufacturer indemnity, insurance, and other
policies and standards determined by it, and in the event McKesson
deletes
from its available inventory items of Merchandise, Customer shall
have the
right to purchase such products from any other source of its choosing.
This Agreement shall not apply to products sold to Customer by McKesson
subsidiaries, divisions, or other business operations other than
McKesson's pharmaceutical distribution centers.
|
|
B.
|
Customer
may from time to time request that certain private label and other
products (collectively, "Additional Products") be stocked by McKesson
to
satisfy Customer's reasonable needs. Such request shall be in writing
and
shall be accompanied by a utilization estimate of such Additional
Products. The stocking of any such Additional Products shall be at
the
sole option of McKesson and if agreed to by McKesson, shall be subject
to
any minimum purchase or other commercial terms of sale established
by
McKesson and any additional inventory-related considerations deemed
relevant by McKesson. All manufacturers of such Additional Products
must
offer industry standard trade terms and must meet McKesson's standard
indemnification, insurance and other requirements to become an approved
vendor.
|
|
2.
|
TERM
|
The
term
of this Agreement shall be for the three (3) year period commencing on
December
28, 2006, and during such period Customer agrees to designate McKesson as its
primary supplier of Merchandise and to purchase from McKesson substantially
all
of
the
requirements of its retail Pharmacies for Merchandise and other items covered
hereunder.
Each twelve month period ending on December 27 during the term of this
Agreement
shall constitute a “Contract Year”.
|
3.
|
ORDERING
AND DELIVERY
|
|
A.
|
Prescription
products will be delivered to Customer's Pharmacies up to five (5)
times
per week. Orders transmitted by 6:00 p.m. local time Sunday through
Thursday will be delivered the next day.
|
|
B.
|
In
the event that the primary distribution center servicing the Customer
is
temporarily out of stock of any prescription items, such distribution
center will utilize McKesson's National Distribution Network to make
those
items available for Store order within 72 hours, at Customer's expense.
If
the item is not available within the McKesson network, it will be
drop-shipped from the vendor if stock is available.
|
|
C.
|
Notwithstanding
anything to the contrary herein, McKesson shall not be obligated
either to
source or ship any Merchandise from a McKesson pharmaceutical distribution
center that is not the primary distribution center servicing Customer
or
to facilitate any drop shipment if, in either case, any such shipment
or
sourcing is prohibited by any law, regulation or governmental requirement
or would require that McKesson make additional expenditures in order
to
comply with any law, regulation or governmental requirement regarding,
or
otherwise affecting, such shipment or sourcing.
|
|
4.
|
PAYMENT
TERMS
|
|
A.
|
The
payment terms for the Merchandise covered by this Agreement are as
follows:
|
Seven
(7) Day Payment Terms
Payment
for Merchandise delivered to Customer’s retail Pharmacies shall be paid by
Customer as follows: Invoices are due and payable within seven days from invoice
date via EFT or ACH.
|
B.
|
For
purposes of this Agreement, "due and payable" means that Customer
shall
make any payments due hereunder on such earlier date as shall be
required
to provide McKesson with good funds in hand on each of the designated
due
dates specified in this Payment Terms section of this Agreement.
|
|
C.
|
If
any of the above-specified due dates falls on a weekend day or holiday,
payment is due and payable on the preceding business day.
|
|
▇.
|
▇▇▇▇▇▇▇▇
requires the use of EFT or ACH payment method. Cost of Goods will
be
increased by XX% if Customer for any reason does not pay via EFT
or ACH.
|
|
E.
|
Any
payments made after the due date indicated herein shall result in
a XX
percent (XX%) (or the maximum amount permissible under applicable
law, if
lower) increase in the purchase price of the Merchandise. A XX percent
(XX%) service charge (or the maximum amount permissible under applicable
law, if lower) will be imposed semi-monthly on all balances delinquent
more than fifteen
|
(15)
days.
|
F.
|
Customer
agrees to render payment in full to McKesson on the applicable due
date as
specified in this Agreement without (i) making any deductions, short
payments, or other accounts payable adjustments to such payment
obligation; or (ii) seeking to condition such remittance on any demand
for
or receipt of proofs of delivery. Any accounts payable adjustments
claimed
by Customer shall require prior written authorization of McKesson
and must
be supported by accompanying detail documenting the basis for any
such
requested adjustments.
|
|
G.
|
This
Agreement is conditioned upon Customer's maintaining a sound financial
condition throughout the term hereof and to that end, Customer agrees
to
promptly substantiate in writing, at McKesson's request, the existence
of
such condition with financial statements and any other supporting
information required by McKesson.
|
|
H.
|
Each
company doing business with McKesson is required to negotiate its
payment
terms and credit line with McKesson individually, based upon such
company's individual financial and risk characteristics. Nothing
in this
Agreement is intended to be, nor shall it be construed as, a binding
obligation or continuing commitment by McKesson to extend credit
or
payment terms options and all such terms and conditions shall be
subject
to the review and approval of McKesson's Financial Services Department.
|
|
▇.
|
▇▇▇▇▇▇▇▇
reserves the right, in its sole discretion, to change a payment term
(including imposing the requirement of cash payment upon delivery)
or
limit total credit, if (i) McKesson concludes there has been a material
change in the Customer's financial condition or an unsatisfactory
payment
performance; or (ii) Customer ceases to meet McKesson's credit
requirements or McKesson determines that the Customer is likely to
cease
meeting such requirements. Upon the occurrence of any of the
above-specified events and with one day’s written notice, McKesson further
shall be entitled to suspend or discontinue the shipment of any additional
orders to Customer's Pharmacies.
|
|
5.
|
COST
OF GOODS
|
|
A.
|
In
consideration for the cost of goods pricing (“Cost of Goods”) specified
herein, Customer expressly commits to purchase a minimum of $XX (net
of
returns, allowances, rebates and all credits and adjustments issued
and
exclusive of drop shipped purchases) per Contract Year in Direct
Store
Pharmacy Delivery ("D.S.D.") volume of Merchandise from McKesson
during
the term of this Agreement ("Volume Purchase Commitment"). If at
any time
after the first two (2) months of this Agreement Customer has not
achieved
the appropriate pro rata purchase volume, measured monthly, based
on its
Volume Purchase Commitment, McKesson, in addition to the other rights
and
remedies available to it hereunder, reserves the right in its sole
discretion to redetermine the Cost of Goods pricing specified below.
|
|
B.
|
Subject
to the terms and conditions of this Section, the Cost of Goods for
Merchandise delivered to Customer shall be Cost plus the applicable
markup
as specified below. Except in the case of contract items as discussed
below, "Cost" for the purposes of this Agreement shall mean the
manufacturer's published acquisition cost (exclusive of cash discounts)
on
the date of McKesson's invoice to Customer, adjusted for selected
bonus
goods, manufacturers' off-invoice allowances, and manufacturers'
deal
prices to be made available to Customer in accordance with McKesson's
established policies. For purchases of Merchandise with respect to
which
Customer has entered into a vendor contract with a manufacturer ("Contract
Products") loaded with McKesson, "Cost" shall mean the "bid price"
of the
product as set forth in the vendor contract.
|
|
C.
|
The
Cost of Goods hereunder shall be in accordance with the pricing provisions
set forth below. Customer hereby agrees to maintain a minimum chain-wide
monthly average volume of $XX in D.S.D. prescription drug and OTC
product
purchases (net of returns, allowances, rebates and all credits and
adjustments issued and exclusive of drop shipped purchases) per Store
from
McKesson throughout the term of this Agreement ("Monthly Volume
Commitment"). Customer shall at the time of implementation of service
under this Agreement be charged Cost minus XX% on Rx product purchases
and
Cost plus XX% on OTC product purchases. The Customer's Cost of Goods
thereafter shall be subject to quarterly review by McKesson and will
be
adjusted no later than ten (10) days following the close of the quarter,
if and to the extent necessary, to reflect the Customer's then current
chain-wide monthly average purchase volume.
|
Chainwide
Monthly Average Volume (net of returns, allowances, rebates and all credits
and
adjustments issued and Cost Plus Markup (Based on 7 - day Payment Terms per
Section 4.A)
|
Rx
|
OTC
|
|
XX
|
XX
|
|
XX
|
XX
|
|
XX
|
XX
|
|
XX
|
XX
|
|
XX
|
XX
|
exclusive
of drop shipped purchases)
From
XX
|
Contract
Products
|
Cost
Plus XX%
|
|
Drop
Shipped Products
|
Cost
Plus XX%
|
Specially
Priced Merchandise.
The
purchase price for selected Merchandise, including but not limited to
multi-source generic pharmaceuticals, repackaged pharmaceuticals, private label
products, HBC/OTC products, medical surgical supplies, home health care/durable
medical equipment, certain antibiotics, Merchandise acquired by McKesson from
vendors not offering customary cash discounts or other terms, and other
specialty; slow moving; non-pharmaceutical; and/or net-billed Merchandise will
not be based upon the cost-plus pricing described in the Cost of Goods pricing
schedule above, but will instead be billed in accordance with the terms and
conditions established by McKesson (including applicable markup) for such
Merchandise. Merchandise described in this paragraph is sometimes referred
to as
"Specially Priced Merchandise."
|
D.
|
The
above-specified Cost of Goods pricing is based on and contingent
upon
Customer's continued compliance with its commitment herein to maintain
the
following minimum purchase (net of returns, allowances, rebates and
all
credits and adjustments issued and exclusive of drop shipped purchases)
percentage ratios throughout the term of this Agreement:
|
1. Rx
purchases to total purchases of Merchandise of XX%
("Rx
Purchase Percentage Commitment"), and
2. McKesson
OneStop Generics purchases to total Rx purchases of XX%
("McKesson OneStop Generics Purchase Percentage Commitment").
If
Customer fails during any three-month period of this Agreement to achieve either
its Rx Purchase Percentage Commitment or McKesson OneStop Generics Purchase
Percentage Commitment, McKesson, in its sole discretion, reserves the right
upon
such occurrence to forthwith reprice the Rx/OTC Cost of Goods set forth in
Section 5.C.
|
E.
|
The
above-specified Cost of Goods pricing schedule (including contract
product
pricing) is subject to adjustment with respect to the products of
any
manufacturer that offers a cash discount that is below the industry
standard cash discount to McKesson during the term hereof.
|
|
F.
|
It
is further understood and agreed by the parties that if Customer
fails to
maintain a minimum chain-wide average volume of $XX in D.S.D. prescription
drug and OTC product purchases (net of returns, allowances, rebates
and
all credits and adjustments issued and exclusive of drop shipped
purchases) per Store per month
|
from
McKesson during any consecutive three (3) months of this Agreement
(excluding
the first three (3) month period of this Agreement), such failure shall
constitute
a default under this Agreement by Customer.
| G. |
For
the avoidance of doubt, nothing herein will entitle Customer to receive
or
share in any fees, discounts, rebates or other consideration received
by
McKesson from a vendor or its affiliates for any services rendered
by
McKesson or any other action or forbearance by McKesson, including
without
limitation any fees, discounts, rebates or other consideration received
by
McKesson pursuant to a core distribution agreement, inventory management
agreement or any other similar agreement with the vendor or its
affiliates.
|
|
6.
|
RETURNED
GOODS
|
Subject
to any separate policy and/or terms and conditions for returned goods adopted
by
McKesson for purposes of complying with any applicable law, rule or regulation
of any state (including without limitation the State of Florida), McKesson
will
process returned goods for items purchased by Customer from McKesson, in
accordance with McKesson's Returned Goods Policy (which is subject to change
by
McKesson, effective upon thirty
(30)
days' prior notice to Customer), as follows:
|
1)
|
Definitions
|
|
a)
|
Saleable
Merchandise
|
• Merchandise
is determined saleable by McKesson based upon the ability to resell the item
without special handling, refurbishing or other expense; or
• Saleable
Merchandise must have dating of current month plus XX months remaining until
expiration. Exceptions to this dating policy are:
|
i)
|
Refrigerated
and other temperature-controlled Merchandise; or
|
| ii) |
Merchandise
deemed permanently short-dated by McKesson and manufacturers/suppliers.
|
In
the
above-specified instance as set forth in Section 1(a)(ii), Customer shall be
permitted to return the Merchandise with current month plus three
(3)
months remaining until expiration.
|
b)
|
Unsaleable
Merchandise
|
• Merchandise
with less than current month plus XX months remaining until expiration (except
as otherwise provided in Section 1(a));
• Torn
or
damaged packaging;
• Labels
attached (prescription or price sticker);
• Soiled,
stained or worn;
• Safety
or
security seals not intact; or
• Merchandise
requiring special handling (i.e. biological or other temperature-controlled
products) that does not include Customer's signature to assure that the
Merchandise has been stored and protected under proper conditions specified
by
the manufacturer/supplier.
McKesson
reserves the right to determine whether Merchandise is saleable or unsaleable
upon inspection of the returned item.
|
c)
|
Florida
Pedigree Product
|
All
returns of prescription drug (“Rx”) Merchandise that meet the conditions set
forth in Section 2(e) below will be deemed returnable.
|
2)
|
Merchandise
Authorized For Return to McKesson
|
|
a)
|
Saleable
and Unsaleable Merchandise that was purchased from McKesson unless
otherwise blocked for return (determined by manufacturer/supplier
or
McKesson);
|
|
b)
|
Unsaleable
Merchandise purchased from McKesson which can be returned by McKesson
to
the manufacturer/supplier according to their policy;
|
|
c)
|
McKesson
Private Label Merchandise (Valu-Rite®,
Health Mart®,
SunmarkTM,
etc.); and
|
|
d)
|
Manufacturer/supplier
recall or market withdrawal in original manufacturer containers.
Authorized returns of partials require the Customer to include pill
counts, NDC and lot number for any Merchandise not returned in its
original manufacturer container.
|
|
e)
|
Florida
customers may only return Rx Merchandise that meets all of the following
conditions:
|
|
i.
|
Rx
Merchandise that was ordered by mistake; misshipped by McKesson or
received damaged;
|
|
ii.
|
Customer
must provide a valid invoice number when requesting the return;
|
|
iii.
|
Requests
for Return Authorization (“RA”) for Rx Merchandise must be made within XX
days of original invoice date;
|
iv. Rx
Merchandise returned to McKesson must contain the identical lot number and
quantity provided on the RA;
v. Rx
Merchandise returned to McKesson must be received within XX days of the date
of
the request for the RA; and
|
vi.
|
Customer
must sign the oath statement on the RA that each specific unit of
Rx
Merchandise being returned was purchased on the invoice referenced
and was
stored properly while in the Customer’s custody and control.
|
If
the
conditions set forth in Section 2(e) i-vi are not fully met, McKesson will
deem
the Merchandise as unsaleable and apply the credit issued and pricing conditions
set forth below for unsaleable Merchandise.
Customer
must provide signed verification certifying that proper conditions for storage,
handling and shipping have been maintained for all Merchandise returned to
McKesson.
Excluded
Merchandise:
|
•
|
Merchandise
not purchased from McKesson;
|
|
•
|
Merchandise
not physically carried by McKesson;
|
|
•
|
Merchandise
not eligible for return to the manufacturer/supplier or deemed collectible
by McKesson;
|
|
•
|
Saleable
Merchandise returned that does not meet proper storage conditions;
|
|
•
|
Unsaleable
returns of Customer’s private label Merchandise;
|
|
•
|
Merchandise
not in its original container;
|
|
•
|
Overbagged
or "robot-ready" Merchandise;
|
|
•
|
Merchandise
requiring refrigeration except for Merchandise shipped by McKesson
in
error or received damaged;
|
|
•
|
Repackaged
Merchandise that has less than XX months dating or is defined as
Unsaleable Merchandise;
|
|
•
|
ScanPakTM
Unit Dose and ScanPakTM
Multi Dose Merchandise that have less than XX months dating or are
defined
as Unsaleable Merchandise;
|
|
•
|
Merchandise
discontinued by manufacturer/supplier and no longer stocked by McKesson;
|
|
•
|
Partial
bottles, liquids and other containers except for recalls of Merchandise
other than Controlled Substances;
|
|
•
|
Schedule
II Controlled Substances will be evaluated on individual return requests;
|
|
•
|
Merchandise
damaged or defaced at the Pharmacy location or on the shelf; or
|
|
•
|
For
Florida accounts, any Rx Merchandise not meeting the stated policy
and
required processes in Section 2(e) above will be considered unsaleable
and
subject to the credit issued and pricing conditions applicable to
unsaleable items as specified below.
|
3)
Credit
Issued
McKesson
will provide the following credit based on the pricing rules outlined below
in
Section 5 as calculated from invoice date to credit request date:
|
Saleable*
|
0
-
30 days XX 31+ (or no invoice provided)XX
|
Received
Damaged 0
- 15
days XX or
Short-dated 16+
(or
no invoice provided) XX
|
Recall**
|
XX,
if and to the extent McKesson
|
|
recovers
an equal percent from the
|
|
|
manufacturer/supplier.
|
|
|
Unsaleable**
|
XX,
if and to the extent McKesson recovers an equal percent from the
|
|
manufacturer/supplier.
|
|
|
Florida
Saleable Returns
|
XX,
if all conditions in Section 2(e) above are met.
|
*All
saleable Home Healthcare Hub Merchandise is eligible for a maximum XX credit
value based on pricing rules outlined below in Section 5.
**Notwithstanding
anything in this Agreement to the
contrary, with regard to unsaleable products, recalls, market withdrawals and
any other manufacturer/supplier initiated returns (collectively, "Unsaleable
and
Recalled Products"), in the event a pharmaceutical manufacturer/supplier fails
for any reason to pay McKesson for the cost of or any amounts due with respect
to any Unsaleable or Recalled Products returned to McKesson by the Customer
or
the Customer's agent, the Customer agrees that the Customer will be responsible
for the collection of any unpaid monies due from the manufacturer/supplier,
and
shall fully reimburse McKesson for any credits or other forms of advance,
including deductions, that have already been paid to or received by the Customer
for such Unsaleable or Recalled Products.
|
4)
|
Customer
Eligibility McKesson
reserves the right to designate if the Merchandise returned by Customer
is
eligible for return, and to determine the appropriate percentage
of credit
to be provided.
|
|
5)
|
Pricing
on Returned Goods
|
McKesson
will use the invoice price when Customer provides a valid invoice number.
If
no
invoice number is provided, the following pricing rules will apply:
|
•
|
Customer
will be credited the contract price for Merchandise which is a Contract
Product on the date that return authorization is created.
|
|
•
|
Customer
will be credited a weighted average price based on the Customer's
past
twelve (12) month purchase history for Non-Contract Rx/OTC Merchandise.
|
|
•
|
Customer
will be credited the lowest price paid by the Customer over the past
twelve (12) months for Non-Contract Generics Merchandise.
|
|
•
|
Customer
will be credited the manufacturer's/supplier's published acquisition
cost
(exclusive of cash discounts) on the date of the of the return
authorization for Non-Contract Merchandise purchased more than twelve
(12)
months prior to the date the return authorization is created.
|
Any
handling charges will apply where appropriate to the determined price.
Final
credit will be issued based upon the condition and timing of the returned goods
to McKesson.
|
6)
|
Notification
of Changes
|
McKesson
reserves the right to change the above stated Returned Goods Policy at any
time
with 30 days' notification to Customer, including without limitation
implementing modifications required to meet applicable federal and/or state
laws
and regulations, FDA and other regulatory guidelines, and any additional
restrictions applicable to returned Merchandise.
|
7.
|
CUSTOMER
SUPPORT
|
|
A.
|
A
National Account Executive will be assigned to Customer's headquarters
and
will hold regular meetings and business reviews to identify business
opportunities and address Customer's needs as reasonably required.
|
|
B.
|
The
designated National Account Manager will become the first contact
for
headquarters when Customer requires assistance for issue resolution.
|
|
C.
|
National
Account Customer service personnel will be available at the McKesson
Premier Service Center from 8:00 a.m. Eastern Time to 6:00 p.m. Eastern
Time Monday through Friday. Technical and emergency support is available
24 hours a day, seven (7) days a week.
|
|
D.
|
Customer
will be provided the names and telephone numbers of its key contacts
at
McKesson as well as the names and telephone numbers of McKesson's
designated support personnel.
|
|
8.
|
CONTRACT
MANAGEMENT
|
|
▇.
|
▇▇▇▇▇▇▇▇
agrees to service all manufacturers' contracts negotiated by Customer,
provided such manufacturers are approved suppliers of McKesson that
have
satisfied its indemnification, insurance, credit and other requirements
and provides terms acceptable to McKesson, including without limitation
pricing, payment terms and returned goods policies. Merchandise will
be
supplied at Customer's negotiated bid price plus McKesson's applicable
markup as described above in the Cost of Goods section.
|
|
B.
|
Customer's
eligibility for participation under a vendor contract must be authorized
by the vendor and Customer's group purchasing organization, if applicable,
before the contract is loaded by McKesson for Customer. Customer
shall be
liable for unpaid chargebacks resulting from eligibility issues.
|
|
C.
|
In
the event a vendor (i) makes an assignment for the benefit of creditors,
files a petition in bankruptcy, is adjudicated insolvent or bankrupt,
or
if a receiver of trustee is appointed with respect to a substantial
part
of the vendor's property or a proceeding is commenced against it
which
will substantially impair its ability to pay on chargebacks or (ii)
otherwise defaults in the payment of chargebacks to McKesson, Customer
shall be invoiced and become liable for the unpaid chargebacks allocable
to its purchases from such vendor.
|
|
9.
|
GENERIC
PHARMACEUTICALS
|
Customer
agrees to fully participate in McKesson's OneStop Generics Program through
its
auto-substitution feature and to thereby designate this program as Customer's
primary source of generic pharmaceuticals. A quarterly rebate shall be paid
to
Customer in accordance with the following schedule based on such participation:
Quarterly
McKesson OneStop Generics Purchases as a Percentage of Total Rx Purchases (All
Purchases net of returns, allowances, rebates Quarterly Rebate % on Net and
all
credits and adjustments issued McKesson OneStop Generics Purchases
and
exclusive of drop shipped purchases) (Rebate amounts are not cumulative)
XX
XX
*Notwithstanding
anything in the foregoing, in order to qualify for the highest rebate percentage
on the above-specified McKesson OneStop Generics rebate schedule (XX%), Customer
must attain the specified minimum McKesson OneStop Generics to Rx Product
purchases ratio of XX% and must also purchase annualized McKesson OneStop
Generics volume of $XX. If Customer fails to meet the above-specified $XX
purchase volume threshold, the XX rebate percentage tier shall not apply. For
example, if the McKesson OneStop Generics to Rx Product purchases ratio is
XX%
but the annualized quarterly volume is $XX, Customer would qualify for a XX%
rebate.
|
10.
|
SYSTEM
SERVICES AND EQUIPMENT
|
The
following systems and services will be made available to Customer by McKesson
if
and to the extent that such systems and services are being made generally
available to other customers of McKesson, it being understood, however, that
McKesson shall have the right to eliminate or replace any of the following
systems and services, provided that McKesson eliminates such service or system
for McKesson customers generally:
|
A.
|
Telxon
electronic order entry equipment, including the wand (the “Telxon”) at no
charge upon such Store’s request. The Telxon remains the property of
McKesson at all times. Within 30 days of the closing of any Store,
closing
of a Store account, or the replacement of any non-functioning Telxon
with
a new Telxon, Customer agrees to return each Telxon or Telxons supplied
to
the Customer. If the Customer fails to return any Telxon to McKesson
as
specified above, Customer agrees to pay to McKesson the amount of
XX for
each Telxon not returned. Additionally, if the Customer returns any
Telxon
to McKesson without the wand, a charge of XX will apply. McKesson
will
provide, upon request, an inventory of Telxons supplied to the Customer,
including each Telxon’s serial number and the Store to which the Telxon
was supplied.
|
|
B.
|
Access
to Supply Management Online ("SMO") for each Customer Store, each
location
where Customer has a web link access, and for Customer's Headquarters,
at
no charge. SMO is an advanced Internet application allowing on-line,
real-time access to customer information and services, including
purchase
histories, accounts payable information, and ordering capability.
|
|
C.
|
Item
price stickers, at no charge, with Customer custom pricing, where
required, and other features such as:
|
1)
Department number
2)
Invoice cost
3)
Month
and year ordered
4)
Store
name
5)
AWP or
retail pricing
|
(Note:
|
Each
feature is available for both Rx and OTC.)
|
|
D.
|
Bar-coded
shelf labels, at no charge.
|
|
E.
|
Consolidated
Quarterly Purchase Reports for all Customer Store purchases, at no
charge,
via SMO.
|
|
F.
|
Monthly
report of controlled substances purchased from McKesson for each
Store, at
no charge, via SMO.
|
|
G.
|
A
complete catalog of items stocked by McKesson's Distribution Centers,
at
no charge, via SMO.
|
|
H.
|
Electronic
price update information will be provided weekly, at no charge.
|
|
11.
|
VALUE-ADDED
PROGRAMS
|
|
▇.
|
▇▇▇▇▇▇▇▇
New Store Dating
|
Subject
to the terms and conditions of this Section 11.A., the opening order will be
defined as the initial order placed by a new Store. The amount of the initial
order, which in no event shall exceed an estimated amount of XX days’ purchases
from McKesson for such new Store, is to be paid in XX consecutive, equal
monthly installments with payment beginning the first month after the account
is
opened. This dating will be extended to a maximum of XX new Stores each Contract
Year and will be limited to $XX per new Store. Notwithstanding anything in
the
foregoing, Customer will not be considered for new Store dating if any amount
due to McKesson has been past due in the previous 30 days. The above-specified
dating is subject to the review and approval of McKesson’s Financial Services
Department. For the purposes of this Section, the term “new Store” shall not
include (i) any existing pharmacy of Customer that changes its address; or
(ii)
any pharmacy acquired through acquisition, merger, partnership or other
combination that is already serviced by McKesson.
|
B.
|
To
assist Customer in managing the relatively small volume of items
that may
become unsaleable while at the Customer, McKesson shall offer the
following programs to Customer for the management of Customer’s unsaleable
Rx products. Customer may utilize either option as described in Section
11.B or Section 11.C. herein.
|
|
i.
|
Once
each quarter, the Customer will process a return to Carolina Logistic
Services for eligible, unsaleable Rx products.
|
|
ii.
|
OTC
items are not eligible for this program.
|
|
iii.
|
Customer
will not return any expired, unsaleable Rx products directly to its
McKesson Distribution Center or McKesson’s Redistribution Center. Customer
will deliver eligible Rx returns directly to Carolina Logistic Services
and be responsible for shipping fees associated with returns.
|
iv. McKesson
pays processing fees and costs associated with unsaleable return supplies,
for
example, shipping labels, etc.
v. All
product received by Carolina Logistic Services will be treated as unsaleable
regardless of expiration dates or condition of the product. No items will be
returned to Customer.
|
vi.
|
McKesson
shall pay all processing fees and costs to dispose product according
to
the manufacturer’s policy, including any fees from Carolina Logistic
Services.
|
|
vii.
|
Carolina
Logistic Services will scan all products sent to it by Customer and
will
determine if the products are returnable per the manufacturer’s policy.
Carolina Logistic Services will provide summary and detail reports
for all
products received by Carolina Logistic Services from Customer.
|
|
viii.
|
McKesson
will process credits for returnable product per manufacturer's policy
within thirty (30) days of the Carolina Logistic Services debit memo
or
invoice date.
|
|
ix.
|
Credit
is issued at the lower of XX McKesson’s current Wholesaler Acquisition
Cost (“WAC”) or XX of contract price for Rx unsaleable returns that meet
manufacturer return policy, unless that manufacturer is identified
as a
“No Credit Vendor”, found to be in a debit balance with McKesson, or fails
to reimburse McKesson for such claims at which time McKesson will
not
pursue credit for those claims and will not issue credit to Customer.
WAC
will be updated at least monthly.
|
|
▇.
|
▇▇▇▇▇▇▇▇
will issue a single credit for all returns to an established Customer’s
corporate account, with back up documentation outlining how much
credit is
applied to the Customer’s account including non returnable items that are
processed.
|
|
xi.
|
For
items that have a return value of zero, Carolina Logistic Services
will
destroy these items at no cost to Customer.
|
|
C.
|
To
assist Customer in managing the relatively small volume of items
that may
become unsaleable while at the Customer, McKesson shall offer the
following program to Customer for the management of Customer’s unsaleable
Rx products. Customer may utilize either option as described in Section
11.B or Section 11.C herein:
|
|
▇.
|
▇▇▇▇▇▇▇▇
agrees to assist in facilitating the amount of credits obtained from
“indirect” vendors for goods returned by Customer through Carolina
Logistic Services, or whichever other entity is designated the selected
returns processor for Customer (the Processor). Indirect vendors
are those
vendors with which Customer does not have a direct purchasing relationship
and for which a majority of the purchase volume is from McKesson.
|
|
ii.
|
Customer
will provide McKesson access to information provided by the Processor
that
includes vendor and store summary and detail; summary and detailed
debit
memos; product disposition/shipment tracking information; and other
information required to collect from the vendors. If a change in
Processors is made, or the processing operations are adjusted for
the
customer, McKesson should be notified at least sixty (60) days in
advance
of the change and of the specific effective date of the change.
|
|
iii.
|
McKesson
will receive debit memos from the Processors via disk, electronic
transmission, or a combination of the two. McKesson will provide
the
Processor with the file format for the transmission of the data.
Customer
will have the Processor provide to McKesson the shipping data for
the
return debit memos in order to facilitate collection of the credits
related to the return.
|
|
iv.
|
McKesson
will process debit memos on behalf of Customer and contact the appropriate
vendors for follow-up credit. If, and when, a vendor is identified
as a
“No Credit Vendor,” or a vendor is found to be in a debit balance with
McKesson, McKesson will not pursue credit for those returns debit
memos.
McKesson will report the status to Customer and ask that future return
debit memos exclude the reported vendors.
|
|
v.
|
The
basis for vendor collections will be mutually agreed upon by McKesson
and
Customer with the understanding that both companies shall strive
for
maximum recovery on returns. The basis of this valuation includes,
but is
not limited to, returnable value based on the Processor’s valuation,
vendors that do not allow returns from third parties, and other issues
that impact the accuracy of the valuation of the return debit memos
generated for Customer to reflect expected return value.
|
|
vi.
|
Customer
will notify McKesson as to the pricing methodology that will be used
to
value the product processed at the Processor’s location. The file will be
reviewed periodically by both companies for accuracy.
|
|
vii.
|
McKesson
agrees to pass through all credits collected from the vendor upon
receipt
of a final credit notification based on the documentation provided
by the
vendor within ten (10) days of posting the vendor credit memo in
McKesson’s system. Any subsequent credits received from the vendor
relating to such debit memo will be passed to Customer within ten
|
(10)
days
of posting into McKesson’s system. Credits will be issued less a XX
administrative support fee. If any direct reimbursements are made to Customer
from a vendor that relate to a return debit memo under this program, Customer
will send the funds to McKesson within ten (10) days of receipt of the funds
from the vendor.
|
viii.
|
Customer
and McKesson will agree on those open deductions sixty (60) days
subsequent to the date that the original file from the Processor
was
received. Customer may deduct at the returnable value as deemed by
the
Processor for those vendor debits that have no credits posted on
Customer
account. Any vendor credits received after this time will be credited
to
Customer’s RTV account at McKesson and the Customer’s amount previously
deducted from McKesson will be repaid. Customer is required to repay
any
items applied to its account such as repayment of previous deductions
within ten (10) business days of the credit being posted to the account.
Documentation to audit a claim will be available upon request and
supported by quarterly summary and detailed reporting.
|
|
ix.
|
Deductions
can only be made if supported with a valid return debit memo from
the
authorized Customer Processor, a signed proof of delivery, or authorized
destruction form, and any correspondence with the vendor supporting
the
return debit memo.
|
|
x.
|
All
credits passed to Customer will reference the debit memo assigned
by the
Processor, unless such a reference is not made, at which time McKesson
will pass the credit through to Customer referencing the credit memo
number. Summary & detailed reporting related to the vendor credits
will be sent to Customer quarterly.
|
|
xi.
|
Upon
one hundred eighty (180) days after the debit memo date by the Processor,
if no valid response is received from a vendor, McKesson will credit
Customer the entire value of the debit memo deducted from the vendor.
If
after that time, the vendor provides sufficient evidence to review
this
“closed” debit memo, McKesson will facilitate discussions regarding the
matter between Customer and the vendor. Customer and McKesson agree
to
address such matters in a timely, good faith manner if facts pertaining
to
the debit memo reasonably warrant such follow-up action. In the event
that
any amount is to be repaid to the vendor for such transaction, Customer
will pay McKesson within ten (10) days of agreement that such sum
is due
and owing by Customer to McKesson, whereupon McKesson will repay
the
vendor within ten (10) days of the receipt of Customer’s payment.
Additionally, Customer agrees to respond within thirty (30) days
of
receipt of any production of relevant documentation by McKesson.
|
|
xii.
|
McKesson
will expect a vendor to credit Customer under the vendor’s published
return goods policies. McKesson expects the Processor to evaluate
return
product from Customer using the vendor published return goods policies.
McKesson will be notified by Customer to any exceptions to this practice.
Reviews will be performed quarterly, or at such intervals as otherwise
determined by McKesson and Customer, to identify any exceptions to
the
published return goods policies being used to evaluate Customer’s product.
Customer will provide the signed agreement with the authorized agent
of
the vendor noting the exception to the published policy.
|
|
xiii.
|
Vendor
published returned goods policies and shipping data will be used
to
determine the estimated returnable value due for each debit memo.
Signed
and/or documented agreements between Customer and vendor will supersede
vendor standard returned goods policies.
|
|
xiv.
|
McKesson
hereby assumes no liability or responsibility of the actual collection
or
timely payment of any sums contemplated by Customer from the vendor
based
on this returned goods collection process. Customer will not make
any
unauthorized deductions from McKesson for such returns.
|
|
12.
|
TERMINATION
|
|
A.
|
Failure
by Customer to make any payment when due in accordance with the terms
of
this Agreement shall constitute a default. Any other material breach
of
this Agreement by either party shall constitute a default if not
cured
within thirty (30) days after written notice of such breach is given
by
the non-breaching party. Upon default by either party, the other
party may
terminate this Agreement on five (5) days' written notice.
|
|
B.
|
Either
party may terminate this Agreement without cause upon ninety (90)
days'
written notice to the other party.
|
|
C.
|
Either
party may, on ten (10) days written notice, terminate this Agreement:
|
|
1)
|
If
the other party shall file any petition under any bankruptcy,
reorganization, insolvency or moratorium laws, or any other law or
laws
for the relief of or in relation to the relief of debtors; or
|
|
2)
|
If
there shall be filed against the other party any involuntary petition
under any bankruptcy statute or a receiver or trustee shall be appointed
to take possession of all or substantial part of the assets of the
party
which has not been dismissed or terminated within sixty (60) days
of the
date of such filing or appointment; or
|
|
3)
|
If
the other party shall make a general assignment for the benefit of
creditors or shall become unable or admit in writing its inability
to meet
its obligations as they mature; or
|
|
4)
|
If
the other party shall institute any proceedings for liquidation or
the
winding up of its business other than for purposes of reorganization,
consolidation or merger; or
|
|
5)
|
If
the other party's financial condition shall become such as to endanger
completion of its performance in accordance with the terms and conditions
of this Agreement.
|
|
▇.
|
▇▇▇▇▇▇▇▇
may, at its own discretion, terminate this Agreement on ten (10)
days
written notice to Customer upon or at any time following the sale
or
transfer of the stock or assets of Customer or a controlling interest
therein, the occurrence of a merger involving Customer or a change
in the
effective control of the management of Customer.
|
|
E.
|
Upon
termination of this Agreement, expiration of this Agreement or
discontinuation by Customer of purchase of any such Additional Products
hereunder, which discontinuation shall be deemed to have occurred
if
Customer fails to purchase such Additional Products for a period
of at
least thirty (30) days, Customer shall be obligated to purchase from
McKesson all Additional Products purchased by McKesson exclusively
for
Customer as of the date of such termination, expiration or discontinuation
of purchase pursuant to a request from Customer in accordance with
Section
1.B above; provided that McKesson cannot return such Additional Products
for a full refund. Customer shall pay the original invoice price
charged
McKesson by the manufacturer of such Additional Products. Any such
Additional Products will be salable, undamaged, have at least six
months
dating (with the exception of private labeled items), and will be
delivered in a single shipment, unless otherwise agreed between the
parties, to a destination mutually agreed upon by Customer and McKesson.
|
|
F.
|
In
the event of a termination hereunder the following continuing obligations,
liabilities and rights shall survive termination and remain in full
force
and effect:
|
|
1)
|
Liability
for accounts receivable balances or any other payment due
|
hereunder
to the other party at the date of or upon the occurrence of such
termination;
|
2)
|
Obligations
imposed on each party under the Proprietary and Confidentiality
Information section set forth below; and
|
|
3)
|
Such
rights as either party may enjoy in law or in equity.
|
|
13.
|
PROPRIETARY
AND CONFIDENTIAL INFORMATION
|
|
A.
|
Any
and all accounts, records, books, files, and lists regarding any
transaction provided for or contemplated hereunder, shall be confidential
and proprietary to the party creating or generating such information.
This
Agreement, and the terms and conditions hereof, are confidential.
The
parties expressly agree to maintain such terms and conditions in
confidence, and shall take every precaution to disclose the contents
of
this Agreement only to those employees of each of the parties who
have a
reasonable need to know such information.
|
|
B.
|
Customer
and McKesson each acknowledge that, in connection with their respective
businesses, they have developed certain operating manuals, symbols,
trademarks, trade names, service marks, trade secrets, customer lists,
procedures, formulas, and other patented, copyrighted, or legally
protected materials which are confidential and/or proprietary to
each of
them.
|
|
C.
|
Neither
party may disclose the terms of this Agreement during the term hereof
and
for an additional period of thirty-six (36) months following the
effective
date of expiration or other termination of this Agreement. Furthermore,
except upon the prior written consent of the other party, neither
party
may divulge, disclose, communicate, or use any of the other party's
confidential or proprietary information generally described in Subsection
A and B above, in any manner or for any purpose, including, without
limitation, use in advertising or for promotional materials. A party
hereto may refuse consent to the use of its confidential or proprietary
information for any or no reason. In the event that any such confidential
or proprietary information is used during the course of this Agreement
it
shall retain its confidential and proprietary nature and shall be
returned
immediately to its owner or destroyed upon termination of this Agreement.
Notwithstanding anything herein to the contrary, nothing in this
subsection shall require either party to maintain in confidence any
information, materials, or data which is in the public domain, enters
the
public domain through no fault of such party, was in possession of
the
party prior to being furnished to it by the other, was supplied to
the
party by a third party or parties lawfully in possession thereof,
or which
the party is required to divulge pursuant to process of any judicial
or
governmental body of competent jurisdiction, provided that notice
of
receipt of such process is given to the other.
|
14.
ALTERNATE SERVICE
If
service from any McKesson distribution center to any Customer Store(s) is
interrupted or delayed because of strike, lockout, labor dispute, fire or other
casualty, or any other reasons beyond the reasonable control of McKesson,
McKesson will take such action as may be reasonably necessary, without
additional cost or expense to Customer, to maintain service as mutually agreed
upon to affected Stores from an alternate McKesson Distribution Center.
15.
EXTERNAL EVENT
For
purposes of this Section, “External Event” shall mean an event or series of
events external to and beyond the control of McKesson that has or is likely
to
have a significant adverse impact on McKesson’s business or operations. By way
of illustration and not of limitation, an External Event may include a material
market fluctuation, governmental law, the actual or proposed enactment or
promulgation of a regulation or administrative action, or a fundamental change
in manufacturers’ pricing or distribution policies. In response to an External
Event, McKesson may, at its option, request in writing (a “Request”) that the
pricing and/or other terms of this Agreement be renegotiated so as to equitably
reflect the effect of the External Event. The Request shall identify the
External Event and set forth the general nature and scope of the adjustment
requested. As soon as practicable after receipt of such request by Customer,
the
parties shall meet and begin good faith negotiations. If, at the end of sixty
(60) days following receipt of a Request by Customer, the parties have been
unable to agree on satisfactory pricing or other terms, McKesson shall have
the
right to terminate this Agreement, upon five (5) days’ prior written notice to
Customer.
In
the
event that Customer considers the reason(s) for termination to be inadequate
under this provision or refuses to renegotiate the Agreement, each party agrees
that prior to filing any lawsuit or other legal action against the other party
regarding such issue or dispute arising out of or otherwise relating to this
External Event provision, the parties shall participate in an expedited,
non-binding mediation conducted in accordance with the Commercial Mediation
Rules of the American Arbitration Association (“AAA”). A party shall initiate
such mediation by submitting a Request For Mediation ("Mediation Request")
to
the AAA and the other party by hand delivery and/or facsimile. Within 10 days
thereafter, the parties shall agree upon a single mediator to conduct the
mediation or, if they are unable to agree, request the AAA to make the
appointment. The mediation shall be conducted in San Francisco, California
and,
absent a written waiver executed by both parties, shall be completed within
thirty-five (35) days after either party first submits a Mediation Request.
All
mediation fees payable to the AAA shall be shared equally between the parties.
16.
NOTICES
All
notices pertaining to this Agreement shall be delivered in person, sent by
certified mail, delivered by air courier, or transmitted by facsimile and
confirmed in writing (sent by air courier or certified mail) to a party at
the
address or facsimile number shown in this Section, or such other address or
facsimile number as a party may notify the other party from time to time.
Notices delivered in person, and notices dispatched by facsimile prior to 4:00
p.m. and confirmed, shall be deemed to be received on the day sent. All other
facsimiles and notices shall be deemed to have been received on the business
day
following receipt; provided, however, if such day falls on a weekend or legal
holiday, receipt shall be deemed to occur on the next business day. Notices
may
also be transmitted electronically between the parties, provided that proper
arrangements are made in advance to facilitate such communications and provide
for their security and verification.
If
to
McKesson:
MCKESSON
CORPORATION
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇
Executive
Vice President, Retail National Accounts
Fax:
▇▇▇-▇▇▇-▇▇▇▇
If
to
Customer:
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇ ▇▇▇▇▇▇▇▇▇▇
President
and CEO
Fax:
▇▇▇-▇▇▇-▇▇▇▇
|
17.
|
MISCELLANEOUS
|
|
A.
|
This
Agreement embodies the entire agreement between the parties with
regard to
the subject matter hereof and supersedes all prior agreements,
understandings and representations with the exception of any promissory
note, security agreement or other credit or financial related document(s)
executed by Customer or between Customer and McKesson. This Agreement
may
not be modified, supplemented or extended except by a writing signed
by
both parties.
|
|
B.
|
This
Agreement supersedes any and all prior McKesson agreements and discount
plans in which any Customer Pharmacy may currently be participating.
|
|
C.
|
Except
as provided above in the Alternate Service section, neither party
shall
have any obligation hereunder for failure or delay of performance
due to
fire, shortage of materials or transportation, government acts, acts
of
terrorism or any other cause beyond its control.
|
|
D.
|
Neither
party shall have the right to assign this Agreement or any interest
therein without the prior written consent of the other party, and
any such
attempted assignment shall be without effect. This Agreement shall
inure
to and be binding upon the successors and permitted assignees of
both
parties. In the case of a successor or permitted assignee of Customer,
this Supply Agreement shall apply to all of the Pharmacies of the
successor or permitted assignee.
|
|
E.
|
This
Agreement shall be construed in accordance with the laws of the State
of
California without regard to the provisions of Section 1654 of the
California Civil Code or the rules regarding conflict of laws.
|
|
F.
|
If
any provision of this Agreement shall be held invalid under any applicable
law, such invalidity shall not affect any other provision of this
Agreement. The parties agree to replace any such invalid provision
with a
new provision which has the most nearly similar permissible economic
effect.
|
|
G.
|
The
failure of either party to enforce at any time or for any period
of time
any one or more of the provisions thereof shall not be construed
to be a
waiver of such provisions or of the right of such party thereafter
to
enforce each such provision.
|
|
H.
|
If
any federal, state, or local tax currently or in the future is levied
upon
McKesson in a jurisdiction where either McKesson or Customer does
business
and such tax relates or applies to the Merchandise or any transactions
covered by this Agreement (excluding taxes imposed on McKesson's
net
income), the Cost of Goods to those Customer Pharmacies involved
will be
increased a corresponding percentage amount.
|
|
I.
|
Customer
represents and warrants that the above conditions, including prices,
rebates, terms and delivery, have been made available to its Pharmacies
by
wholesale drug competitors of McKesson in the areas covered by this
Agreement.
|
|
J.
|
Participation
hereunder by any of Customer's Pharmacies may be terminated by McKesson
if
such Pharmacy fails to comply with the terms and conditions of this
Agreement.
|
|
K.
|
In
the event that either (a) the “U.S. Regular Gasoline Retail Prices (Cents
per Gallon)”, as reported by the Department of Energy in “This Week in
Petroleum” (the “Index Price”), is greater than or equal to One Dollar
Fifty Cents ($1.50) or (b) McKesson is assessed a fuel surcharge
or other
increase related to increased cost of fuel by its couriers, McKesson
shall
have the right to charge a delivery surcharge of One Dollar ($1.00)
(the
“Fuel Surcharge”) for all deliveries made to Customer. Subject to the
notice provision below, the Fuel Surcharge will be assessed on all
deliveries following the date on which the Index Price is greater
than or
equal to $1.50, until such time as the Index Price falls beneath
$1.50.
The Fuel Surcharge shall be assessed for each delivery stop made
by a
vehicle, even if such stops are within the same Pharmacy or occur
in the
same Pharmacy but at multiple times on the same day or otherwise.
In the
event that McKesson imposes a Fuel Surcharge or removes the same
pursuant
to this Section 17.K, such action will be effective upon five (5)
days’
written notice to Customer.
|
|
L.
|
If
and to the extent any product discounts, rebates or other purchasing
incentives are earned by or granted to Customer and paid by McKesson
under
this Agreement, then applicable provisions of the Medicare/Medicaid
and
state health care fraud and abuse/antikickback laws and regulations
(collectively, "fraud and abuse laws") may require disclosure of
the
applicable price reduction on Customer's claims or cost reports for
reimbursement from governmental or other third party health care
programs
or provider plans. Customer agrees to comply with all applicable
provisions of the fraud and abuse laws and to defend, indemnify and
hold
McKesson harmless for any failure on its part to do so.
|
|
M.
|
Any
rebate, volume incentive or other similar payment based on Customer's
purchase volume (collectively, "Rebates") are offered to Customer
as an
incentive for both volume purchases and prompt payment. Accordingly,
notwithstanding anything to the contrary in this Agreement, in the
event
that Customer on the payment date for any such Rebate ("Rebate Payment
Date") is not current with respect to Customer's payments due and
owing to
McKesson pursuant to this Agreement as of the Rebate Payment Date
McKesson
shall have no obligation hereunder to pay any such Rebate either
on the
Rebate Payment Date or at any time thereafter. Any Rebate that falls
within the scope of the preceding sentence shall be deemed forfeited;
provided however, such forfeiture shall in no way be considered a
penalty.
|
|
N.
|
Participation
hereunder by any of Customer's Pharmacies in McKesson's Preferred
Provider
Network may be terminated by McKesson if such Pharmacy fails to comply
with the terms and conditions of this Agreement or the M.P.P.N. Agreement.
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▇.
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▇▇▇▇▇▇▇▇
shall be entitled at all times to set off any amount owing at any
time
from Customer to McKesson against any amount payable at any time
by
McKesson to Customer whether arising under this Agreement or otherwise.
For purposes of this Section, Customer and McKesson in each case
shall
include its subsidiaries and affiliates.
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P.
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If
McKesson determines that, as the result of the introduction of or
any
change in or in the interpretation of any law, rule, regulation or
industry standard or guideline, or McKesson’s compliance therewith, there
shall be any increase in the cost to McKesson, or any capital expenditures
made by McKesson, with respect to its pharmaceutical distribution
business, Customer shall pay to McKesson, upon request, one or more
fees
in order to compensate McKesson for such increased cost or capital
expenditures.
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Q.
|
Customer
agrees to fully comply with all federal, state and local laws and
regulations relating to its obligations under this Agreement or otherwise
applicable to the purchase, handling, sale or distribution of the
Merchandise and further agrees to defend, indemnify and hold McKesson
harmless from any and all liability arising out of or due to Customer's
nonadherence with such legal or regulatory requirements.
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R.
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In
no event shall McKesson be liable to Customer or any other entity
for any
special, consequential, incidental or indirect damages, however caused,
on
any theory of liability and whether or not McKesson has been advised
of
the possibility of such damages.
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S.
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For
all purposes, Customer and McKesson shall remain independent contractors.
Accordingly, this Agreement does not constitute a partnership or
other
joint venture between the parties and neither party shall be deemed
to be
an agent or representative of the other.
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T.
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Whenever
possible, each provision of this Agreement shall be interpreted so
as to
be effective and valid under applicable law, but if any provision
of this
Agreement should be prohibited or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition
or
invalidity without invalidating the other of such provision or the
remaining provisions of this Agreement.
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U.
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All
rights and remedies of the parties in connection with this Agreement
are
cumulative and not exclusive.
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V.
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The
section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation
of this
Agreement.
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W.
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This
Agreement may be executed in any number of counterparts, and each
such
counterpart hereof shall be deemed an original instrument, but all
such
counterparts together shall constitute one agreement.
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IN
WITNESS WHEREOF the parties have caused this Agreement to be duly executed
as of
the date and year written below and the persons signing warrant that they are
duly authorized to sign for and on behalf of the respective parties. This
Agreement shall be deemed accepted by McKesson only upon execution by a duly
authorized representative of McKesson.
MCKESSON
CORPORATION
By:_________________________________
Name:
▇▇▇▇ ▇. Julian________________
Title:Executive
Vice President, Group President
Date:
_______________________________
By:________________________________
Name:__Ed
Mercadante_______________
Title:_President
and CEO______________
Date:_______________________________