{"id":42060,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-wellpoint-health-networks-inc-and-drugstore-com-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-wellpoint-health-networks-inc-and-drugstore-com-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/agreement-wellpoint-health-networks-inc-and-drugstore-com-inc.html","title":{"rendered":"Agreement &#8211; WellPoint Health Networks Inc. and Drugstore.com Inc."},"content":{"rendered":"<pre> \n                                   AGREEMENT\n                                   ---------\n\n     This Agreement (\"Agreement\"), dated as of June 23, 2000 (\"Effective Date\"),\nis between WellPoint Health Networks Inc., a Delaware corporation (\"WellPoint\"),\non its own behalf and on behalf of all of its Affiliates, and drugstore.com,\ninc., a Delaware  corporation (\"drugstore.com\"), on its own behalf and on behalf\nof its wholly-owned subsidiary, DS Pharmacy, Inc. (\"DS Pharmacy\").\n\n                                   RECITALS\n                                   --------\n\n     Whereas, WellPoint is a health care company whose Affiliate Professional\nClaim Services, Inc. (doing business as WellPoint Pharmacy Management) provides\npharmacy claims administration services and clinical management services and\narranges for pharmaceutical mail service dispensing for the benefit of its\ncustomers.  Certain other Affiliates of WellPoint, including but not limited to\nBlue Cross of California, BC Life &amp; Health Insurance Company and UNICARE Life &amp; Health Insurance Company, arrange for the provision of health care services for\nthe benefit of enrolled or eligible populations, on an insured, partially\ninsured and\/or self-funded basis.  All benefits and obligations referred to\nherein as those of WellPoint shall be deemed to refer as well to all of\nWellPoint's Affiliates.\n\n     Whereas, drugstore.com is an Internet Pharmacy which owns and operates an\nInternet based online shopping site for the retail sale of products customarily\nsold in retail pharmacies.\n\n     In consideration of the agreements, covenants and conditions set forth\nherein, the parties hereto agree as follows:\n\nSection 1.  Definitions\n\n     Whenever used in this Agreement with initial letters capitalized, the\nfollowing terms will have the following specified meanings:\n\n     \"Above-the-Fold\" means situated within the portion of a page of a Site that\nis designed to be visible on a standard computer screen without requiring the\nuser to scroll horizontally or vertically through the page.\n\n     \"Affiliate\" means, with respect to a party, any Person that, directly or\nindirectly, Controls, or is Controlled by, or is under common Control with, such\nparty.\n\n     \"Change in Control\" means (i) the time at which a Person, or two or more\nPersons acting in concert, acquire more than 50% of the voting power of the\nentity; (ii) the shareholders of a party approve a plan of complete liquidation\nof an entity; or (iii) the shareholders of an entity approve an agreement for\nthe sale or disposition by such entity of all or substantially all of the assets\nof such entity, or any transaction having a similar effect.\n\n \n     \"Competitor\" of WellPoint means any Third Party that is either a PBM or a\nHealth Plan.  \"Competitor\" of drugstore.com means a Third Party that, directly\nor through an Affiliate, sells via the Internet (i) Pharmaceutical Products or\n(ii) Pharmaceutical Products and OTC Products.\n\n     \"Confidential Information\" means all trade secrets, know-how and nonpublic\ninformation that relates to research, development, trade secrets, know-how,\ninventions, source code, technical data, software programming, concepts,\ndesigns, procedures, manufacturing, purchasing, accounting, engineering,\nmarketing, merchandising, selling, business plans or strategies and other\nproprietary or confidential information, protectable under the laws of the\nUnited States or any other nation, state or jurisdiction (including, but not\nlimited to, any foreign equivalents thereto).\n\n     \"Control\" means the possession, directly or indirectly, of the power to\ndirect or cause the direction of the management and policies of a Person,\nwhether by contract or through the ownership of voting securities, including the\nownership of more than fifty percent (50%) of the equity, partnership or similar\ninterest in such Person.\n\n     \"drugstore.com Site\" means the site currently located at www.drugstore.com\nand any successor site or Mirror Site.\n\n     \"Health Plan\" means any Person, such as an insurance company, health\nmaintenance organization, health plan or other Person, in the business of\narranging for the provision of health care services, for the benefit of an\nenrolled or eligible population, on an insured, partially insured and\/or self-\nfunded basis.\n\n     \"Home Page\" means (i) with respect to the drugstore.com Site, the page that\nis displayed to the user when the URL www.drugstore.com or any successor URL is\nentered (ii) with respect to the WellPoint Site, the page that is displayed to\nthe user when the URL www.WellPointRx.com or any successor URL is entered, and\n(iii) with respect to the sites of any WellPoint's Affiliates that are Health\nPlans, such pages as WellPoint shall reasonably determine provided that such\n                                                          -------------     \npages are prominent within such sites.  For the purposes of the foregoing\nsentence, drugstore.com acknowledges and agrees that \"prominent\" does not\nnecessarily mean the first page of a Site or the first item presented on any\nparticular page.\n\n     \"Identified Members\" are WellPoint Members that are identified by\ndrugstore.com as WellPoint Members whether by means of a drugstore.com-approved\nLink from the WellPoint Site or the website of a WellPoint Plan Sponsor, by\nmeans of a Link from a drugstore.com promotional URL delivered by WellPoint to\nWellPoint Members via e-mail or other promotions or by other means as mutually\nagreed in writing by WellPoint and drugstore.com.\n\n     \"Internet Pharmacy\" means a pharmacy that receives orders from customers\nthrough the Internet, including without limitation the Internet division or\noperations of pharmacy chains or other retail merchants (such as supermarket\nchains and discount stores) that dispense prescriptions drugs and that, as an\nadjunct to their traditional \n\n                                       2\n\n \npharmacy operations, also accept prescriptions orders via the Internet and mail\nor deliver the Pharmaceutical Products to their customers.\n\n     \"Internet\" means the Internet or the World Wide Web (or any successor or\nother online network including those using delivery over television, cable, set\ntop boxes, intranets, extranets and personal digital assistants (but does not\nmean traditional telephone service)).\n\n     \"IP Right\" means any copyright, Trademark, patent, trade secret, moral\nright or other intellectual property or proprietary right of any kind (including\napplications therefor and, in the case of patents, any continuation or\ndivisional patent applications claiming priority thereto), whether arising under\nthe laws of the United States or any other nation, state or jurisdiction\n(including any foreign equivalents thereto).\n\n     \"Link\" means a hypertext link connecting a website to another.\n\n     \"Member Data\" means any and all information regarding WellPoint Members\n(who are identified as such) including, without limitation, any and all\ninformation reasonably obtainable in connection with any WellPoint Member\npurchases facilitated through the drugstore.com Site, whether in separately\nidentifiable or aggregated form, including, without limitation, first or last\nname; E-mail or other address; postal code; gender or other demographic\ncharacteristics; year or date of birth; social security or other tax\nidentification number; occupation or other socio-economic or financial\ninformation; nature, subject matter, date or amount paid in any purchase(s),\npreferences or habits; plan type, site of origination and any other identifying\ninformation, to be mutually agreed upon, whether or not actually provided,\ncollected, derived or deduced, and regardless of its accuracy or completeness.\n\n     \"Mirror Site\" means an Internet Site that (i) contains the exact form and\ncontent of a Site, (ii) is located at a geographic location distinct from a Site\nand (iii) is created for the purpose of improving the performance of and\/or\naccessibility to a Site.\n\n     \"OTC Products\" means health, beauty, wellness and personal care products,\nincluding over-the-counter drugs, first aid, contraceptives, vitamins and\nfitness supplements, natural health remedies (such as nutritional supplements,\nherbs and homeopathy), personal care products relating to hair care, body care,\nskin care and eye care (e.g., contact lens solutions, but not contact lenses).\n\n     \"PBM\" means any Person that engages in any of the following activities as a\nsignificant line of business of such Person:  contracting with a Health Plan to\nprovide prescription drug benefits via mail order, point-of-sale electronic\nprocessing of pharmacy claims, formulary development and administration, or\ndeveloping and\/or maintaining retail pharmacy networks for fulfillment of\nconsumer orders for Pharmaceutical Products for members of a prescription drug\nbenefit plan; provided, however, that a Health Plan whose principal business\ninvolves offering policies or plans of comprehensive health care and which\nengages in such activities solely for the benefit of its policyholders or\n\n                                       3\n\n \nmembers of its comprehensive health plans shall not be deemed to be a PBM for\npurposes of this Agreement.\n\n     \"Person\" means any individual, corporation, partnership, limited liability\ncompany, trust, association or other entity or organization, including any\ngovernmental or political subdivision or any agency or instrumentality thereof.\n\n     \"Pharmaceutical Products\" means any product that under law may not be\ndispensed except pursuant to a prescription order written by a licensed medical\nprofessional and dispensed by a licensed pharmacy.\n\n     \"Pharmacy Provider Agreement\" means the agreement entered into by and\nbetween WellPoint and DS Pharmacy in substantially the form attached hereto as\nExhibit A.\n--------- \n\n     \"Term\" means the period commencing on the Effective Date and ending on the\nfifth anniversary of such date, subject to extension in accordance with Section\n14.4.\n\n     \"Third Party\" means any Person that is not a party hereto or an Affiliate\nof a party hereto.\n\n     \"Site\" means a location accessible on the Internet through the World Wide\nWeb and which provides multimedia content via a graphical user interface.\n\n     \"Trademark(s)\" means all common law or registered trademarks, logos,\nservice marks, trade names, Internet domain names and trade dress rights and\nsimilar or related rights arising under any of the laws of the United States or\nany other country or jurisdiction, whether now existing or hereafter adopted or\nacquired.\n\n     \"WellPoint Member\" means any individual who is entitled to benefits under a\nprescription drug plan provided by WellPoint or any Affiliates of WellPoint or\nwho is given the benefit of this Agreement as part of  an agreement or\narrangement entered into between any Person and WellPoint or any Affiliate of\nWellPoint pursuant to which WellPoint or its Affiliate agrees to provide health\nor pharmacy benefits to such Person.\n\n     \"WellPoint Networks\" means all of the networks of retail pharmacies\ncontracted with WellPoint or any Affiliate of WellPoint, including without\nlimitation Blue Cross of California, BC Life &amp; Health Insurance Company and\nUNICARE Life &amp; Health Insurance Company, and  all entities under contract with\nWellPoint to dispense Pharmaceutical Products to WellPoint Members.  A pharmacy\nnetwork that is contracted by a WellPoint Plan Sponsor and merely administered\nby WellPoint for such WellPoint Plan Sponsor shall not be deemed to be a\nWellPoint Network for purposes of this Agreement.\n\n     \"WellPoint Plan Sponsor\" means a Health Plan, an employer, a Taft-Hartley\nplan, a PBM , or any other Person acting on behalf of a WellPoint plan sponsor\nwho contracts with WellPoint or one of its Affiliates to provide a prescription\ndrug benefit or beneficial arrangement (such as discount cards) to members or\neligible persons of such health plan.\n\n                                       4\n\n \n     \"WellPoint Sites\" means the Site currently located at www.wellpoint.com,\n                                                           ----------------- \nthe Site currently located at www.wellpointrx.com and the Sites of any Health\nPlan or PBM Controlled by WellPoint (and, with respect to each of such Sites,\nany successor Site or Mirror Site).\n\n     \"World Wide Web\" means a method of representing and obtaining graphical\ndata and linking data items used by Internet users.\n\nSection 2. Affiliation Grants\n\n     2.1   WellPoint Grant.\n\n     (a)   Subject to the terms and conditions of this Agreement and the\nconditions described below, WellPoint agrees that drugstore.com shall be\nWellPoint and its Affiliates' preferred Internet Pharmacy and shall be the\nexclusive Internet Pharmacy which WellPoint and\/or its Affiliates actively\npromotes to WellPoint Members (except as otherwise provided in Section 2.1 or\nSection 3.1 of this Agreement), it being understood that other Internet\nPharmacies may be listed in the network directories and\/or pharmacy locators of\nWellPoint and its Affiliates, and, provided further, that drugstore.com's status\nas WellPoint and its Affiliates' preferred Internet Pharmacy and the provisions\nof this Section 2.1 shall not apply to mail service pharmacy activities (i.e.,\nthose involving a greater than 34 day supply of Pharmaceutical Products).\nNothing in this Section 2.1(a) shall preclude the listing of other Internet\nPharmacies in a WellPoint Plan Sponsor's provider directory or pharmacy locator.\nThe right of WellPoint, its Affiliates and WellPoint Plan Sponsors to list other\npharmacies on a list that is accessible via the Internet or other electronic\nmedia (as opposed to tangible printed lists as to which such conditions shall\nnot apply) is conditioned upon the absence of promotions of the Sites of such\npharmacies, and, to the extent possible given the nature and structure of such\nlist, the listing of drugstore.com first in any list of Internet Pharmacies, the\nsignificantly larger display of the drugstore.com name and logo than the name of\nany other Internet Pharmacy, and the absence of logos of any Internet Pharmacy\nother than that of drugstore.com. WellPoint (i), unless specifically requested\nnot to do so by a WellPoint Plan Sponsor, shall include drugstore.com in all the\nWellPoint Networks and (ii) with respect to each pharmacy network that is\ncontracted by a WellPoint Plan Sponsor and merely administered by WellPoint for\nsuch WellPoint Plan Sponsor and therefore is not deemed to be a WellPoint\nNetwork for purposes of this Agreement, shall use reasonable best efforts to\ninclude drugstore.com in such pharmacy network but does not guarantee that\ndrugstore.com shall be included in such network. Notwithstanding the foregoing\nsentence, drugstore.com acknowledges that a WellPoint Plan Sponsor may require\nthat one or more other Internet Pharmacies be included in the network for that\nWellPoint Plan Sponsor, or that one or more Internet Pharmacies (which might\ninclude drugstore.com) be excluded from the network for that WellPoint Plan\nSponsor.\n\n     (b)   The terms and conditions upon which DS Pharmacy will fulfill orders\nfor Pharmaceutical Products shall be governed by the Pharmacy Provider\nAgreement.  The terms of the Pharmacy Provider Agreement shall govern over any\ninconsistent term in the body of this Agreement or in any other agreement\nbetween the parties executed prior to \n\n                                       5\n\n \nthe execution of the Pharmacy Provider Agreement with respect to the matters\naddressed therein.\n\n     2.2  drugstore.com Grant.  drugstore.com agrees that WellPoint shall be\ndesignated as drugstore.com's preferred Health Plan.  drugstore.com shall\npromote WellPoint as its preferred Health Plan in accordance with Section 4.2 of\nthis Agreement.  If drugstore.com enters into an agreement with another Health\nPlan or PBM that provides the other Health Plan or PBM with a lower\nreimbursement rate (AWP discount and fill fee together) for the same days'\nsupply that drugstore.com is permitted to fill under the Pharmacy Provider\nAgreement, or commits drugstore.com to offer through the Health Plan or PBM a\nprogram that offers a superior discount program to the Health Plan's or PBM's\nmembers, drugstore.com shall notify WellPoint of such agreement (\"Third Party\nAgreement\") within ten (10) days of entering into the Third Party Agreement.\nFollowing receipt of such notice, WellPoint may unilaterally amend the Pharmacy\nProvider Agreement to match the reimbursement rate (in total) or amend the then\ncurrent WellPoint Member discount program to match the program provided for in\nthe Third Party Agreement.  Short-term promotions and discount program that are\nput in place for less than 120 continuous days shall not be covered under this\nSection 2.2.  In addition,  the provisions of this Section 2.2 shall not apply\nto guaranteed or minimum fees offered under a Third Party Agreement with a\nHealth Plan or PBM offering drugstore.com access to a Health Plan membership\nbase that is substantially larger (i.e., larger by 25% or more members) than the\nmembership that drugstore.com may access pursuant to this Agreement.\n\n     2.3  Member Identification.\n\n     (a)  Both parties agree to develop appropriate technology and web\ninterfaces to identify and track Member Data necessary for calculating all\npayments hereunder. The parties shall work together to enable drugstore.com to\nidentify WellPoint Members coming from WellPoint or Affiliate sites to the\ndrugstore.com Site, including without limitation enabling WellPoint Members to\nprovide drugstore.com with identifying, verifiable membership numbers related to\ntheir Health Plans.\n\n     (b)  drugstore.com shall provide WellPoint with Member Data necessary to\ncalculate fees owed WellPoint pursuant to Section 6 of this Agreement only in\naggregate form.  WellPoint understands that drugstore.com shall not provide any\nindividual Member Data to WellPoint in order to maintain WellPoint Member\nconfidentiality.  drugstore.com shall provide to WellPoint summary reports\nindicating the number of Identified Members visiting and\/or making purchases at\nthe drugstore.com Site and the aggregate amount of such purchases.    There\nshall be ordinary data exchange between DS Pharmacy as a contracting pharmacy\nand WellPoint and its Affiliates in conformity with the Pharmacy Provider\nAgreement and in conformity with applicable laws and regulations.\n\n     (c)  drugstore.com shall not disclose any individually identifiable Member\nData to any Third Party in violation of any applicable law or regulation or\ngenerally applicable policy of WellPoint that WellPoint provides in writing to\ndrugstore.com.\n\n                                       6\n\n \nSection 3.  Exclusivity and Non-competition\n\n     3.1    WellPoint shall not, and shall not permit any entity that it\nControls to contravene the terms of Section 2.1(a) hereof by actively promoting\nany Person that is a drugstore.com Competitor to WellPoint Members or WellPoint\nPlan Sponsors during the term of this Agreement (except as otherwise provided in\nSection 2.1 or Section 3.1 of this Agreement); provided, however, that the\nforegoing shall not preclude WellPoint from (1) holding an ownership interest in\ndrugstore.com, or (2) conducting activities relating to the drugstore.com Site\nand the WellPoint Sites as set forth in Section 4.1 of this Agreement, (3)\nlisting Internet Pharmacies in the provider directories or pharmacy finders of\nWellPoint or a WellPoint Plan Sponsor subject to the terms and conditions of\nSection 2.1(a) of this Agreement, or (4) honoring existing contractual\nobligations of a business or entity acquired by WellPoint under agreements\nexisting at the time of execution of the definitive agreement for such or (5)\ncontinuing WellPoint's relationship and arrangements with companies that are\nparticipating in WellPoint's Healthy Extensions program.\n\n     3.2    Each party agrees that neither it nor any entity that it Controls\nwill at any time from the date of this Agreement until the date upon which the\nTerm of this Agreement expires, solicit for employment any employee of the other\nparty, except with the consent of the other party. Advertisements in the media\nshall not constitute solicitation for purposes of this Section.\n\n     3.3    Nothing herein shall restrict drugstore.com from entering into any\nrelationship with any other PBM or health care or managed care entity that does\nnot contravene the terms of this Agreement.\n\n     3.4    drugstore.com will not permit any entity that it Controls to (i)\ntake any action to attempt to convert WellPoint Members ordering a greater than\n34 days supply of a Pharmaceutical Product to a 34 or fewer days supply or (ii)\ninitiate contact with any WellPoint Plan Sponsors without WellPoint's prior\nwritten consent; provided, however, that general solicitations or promotions\ntargeted at the general population or drugstore.com's general member base,\nwhether on the drugstore.com Site or otherwise, shall not be deemed to violate\nthis Section 3.4.\n\nSection 4.  Promotion\/ Co-Branded Effort\n\n     4.1    WellPoint Promotion.  WellPoint shall promote drugstore.com and its\nrelationship with drugstore.com as follows:\n\n     (a)    WellPoint shall designate drugstore.com as WellPoint's preferred\nInternet Pharmacy partner.\n\n     (b)    WellPoint shall promote drugstore.com on the WellPoint Sites and\nshall provide a Link to the drugstore.com Site from the WellPointRx.com Site,\nthe Sites of WellPoint's Affiliates that are Health Plans and such other of the\nWellPoint Sites as are mutually agreed upon by the parties. The placement of\nsuch Links shall be mutually agreed upon by the parties and shall conform with\nthe rules of the Blue Cross and Blue\n\n                                       7\n\n \nShield Association as applicable provided that the Link to DS shall be\n                                 -------------\nprominently displayed Above-the-Fold on the pharmacy fulfillment-related pages\nof such WellPoint Sites or as otherwise mutually agreed by the parties.\nWellPoint agrees to work with drugstore.com in testing the effectiveness of\nLinks to the drugstore.com Site from various WellPoint Sites and to the various\npages on the drugstore.com Site, including without limitation the drugstore.com\nHome Page and the drugstore.com pharmacy page.\n\n     (c)  WellPoint shall market drugstore.com and its internet pharmacy\nservices to WellPoint Members and to WellPoint Plan Sponsors, including without\nlimitation offering WellPoint customers a direct Link to drugstore.com from\nWellPoint Plan Sponsors' intranets and by promoting drugstore.com through all\nreasonably available channels, including among other things (i) the inclusion of\ninformation and mutually agreed upon promotions in fifty percent (50%),of all\nregular mailings to WellPoint Members that reference pharmacy and an agreed-upon\nportion of all other regular mailings; (ii) physical and E-mail mailings on\nbehalf of drugstore.com to all Members (costs of preparing the drugstore.com-\nspecific inserts to be borne by drugstore.com in accordance with Section 4.4 of\nthis Agreement) so as to provide drugstore.com with a minimum of twenty million\n(20,000,000) messages to WellPoint Members about drugstore.com or drugstore.com\npromotions per year of the Term with uniform distribution of such \"impressions\"\nif reasonably practical through the Term (drugstore.com acknowledging that a\nlarge number of mail impressions are during plan enrollment periods) (iii)\nreference to drugstore.com on telephone hold messages as appropriate, including\nassociated with prescription ordering; and (iv) reference to the drugstore.com\nURL on prescription benefit cards. In addition, drugstore.com , provided it\nenters into the standard agreement for participation therein (\"HE Agreement\")\nwill be included in the WellPoint Healthy Extensions program and throughout the\nterm of this Agreement will be promoted in such program on a basis no less\nfavorable than that afforded to any other party to an HE Agreement. With respect\nto WellPoint Plan Sponsors that are not WellPoint Affiliates, drugstore.com\nacknowledges that WellPoint may need to obtain such WellPoint Plan Sponsor's\nconsent before engaging in certain of these activities that relate specifically\nto the WellPoint Plan Sponsor or its members. WellPoint agrees that it shall\nexercise commercial best efforts to obtain any such consents as soon as\npossible.\n\n     (d)  All WellPoint Member materials as may be designated by WellPoint as\nfurthering the purposes of this Agreement shall indicate that drugstore.com is\nWellPoint's Internet Pharmacy provider, subject to client\/Plan Sponsor review\nand approval of the form and content of such materials where applicable.\n\n     (e)  WellPoint shall make commercially reasonable efforts to obtain and\nprovide to drugstore.com WellPoint Plan Sponsor e-mail addresses and, in\nWellPoint's reasonable judgment (with respect to Plan Sponsor's that are not\nAffiliates of WellPoint), introduce drugstore.com personnel to appropriate\nWellPoint Plan Sponsor contact persons so that the parties may announce their\nrelationship and explain its benefits to WellPoint Plan Sponsors.\n\n                                       8\n\n \n     (f)  WellPoint, where commercially appropriate, shall include drugstore.com\nproduct and service information in responding to requests for proposals and in\npresentations that WellPoint prepares for clients or potential clients.\n\n     (g)  WellPoint shall invite drugstore.com to participate jointly in\nexhibits at key healthcare conferences as appropriate.\n\n     4.2  drugstore.com Promotion. drugstore.com shall promote WellPoint and its\nrelationship with WellPoint as follows:\n\n     (a)  drugstore.com shall designate WellPoint as drugstore.com's preferred\nHealth Plan.  drugstore.com shall use all commercially reasonable efforts to\nprovide, within ninety (90) days of the Effective Date, visitors to the\ndrugstore.com Site with access to a list of Health Plans from one or more Links\non the drugstore.com Site and shall provide preferential placement on such list\nto Health Plans that are Affiliates of WellPoint or, as specified by WellPoint,\nWellPoint Plan Sponsors.  drugstore.com shall test the effectiveness of the\nplacement of the Links to such list, including by means of a Link from, among\nother pages, the drugstore.com Home Page, pharmacy page and insurance-related\npages.  drugstore.com will test the effectiveness of a Link from the\ndrugstore.com Home Page to such list of entities for a minimum of ninety (90)\ndays.  If the Home Page  placement is less effective than alternative\nplacements, drugstore.com may elect not to continue such placement in favor of\nan alternative placement, which will include at least the main drugstore.com\ninsurance-related page; provided, however, that at all times drugstore.com shall\nlist WellPoint, WellPoint Pharmacy Management, the Affiliates of WellPoint that\nare Health Plans and WellPoint Plan Sponsors (but only those WellPoint Plan\nSponsors that promote drugstore.com in a manner consistent with this Agreement)\nfirst among all other listings on the list directly available from the\ndrugstore.com Home Page for so long as such list is linked from the Home Page.\nUpon WellPoint's request and reasonable notice, drugstore.com will provide\ninformation to WellPoint Members regarding certain benefits provided by their\nrespective Health Plans.\n\n     (b)  drugstore.com shall provide resources and capabilities to establish\nLinks to the drugstore.com Site from WellPoint Plan Sponsors' home pages and\nother pages as mutually agreed by WellPoint, the WellPoint Plan Sponsors, as\napplicable, and drugstore.com.\n\n     (c)  To the extent permissible under law and by other agreements of\ndrugstore.com, drugstore.com shall use commercially reasonable efforts to work\nwith retail pharmacies in WellPoint's pharmacy network that are not Internet\nPharmacies to allow WellPoint Members to pick up prescription items ordered on\nthe drugstore.com Site at such pharmacy locations, upon agreement between such\npharmacies and drugstore.com on fees to be paid to drugstore.com for such\nefforts and provided that this obligation shall apply only to such pharmacies\nthat can communicate electronically with drugstore.com.\n\n     (d)  Subject to WellPoint's reasonable approval, drugstore.com shall\nprovide to WellPoint Members medical and pharmacy information on-line on the Co-\nbranded\n\n                                       9\n\n \nWebsites provided for in Section 4.3 but only to the extent that drugstore.com\nhas access to such information.\n\n     (e)  drugstore.com agrees to develop and implement a frequent buyer program\nor discount program for WellPoint Members for purchases of OTC Products. That\nprogram, whose features will be mutually agreed upon by the parties, will be\nsubject to the \"most favored nation\" provisions of Section 2.2 with respect to\nthe financial value provided by the program to WellPoint Members.\n\n     4.3  Co-branded Websites.\n\n     (a)  drugstore.com shall use all commercially reasonable efforts to cause,\nwithin ninety (90) days of the Effective Date, Identified Members to be\npresented with a co-branded drugstore.com Home Page and such other pages on the\ndrugstore.com Site as mutually agreed by the parties, including without\nlimitation the drugstore.com pharmacy page, that at a minimum prominently\nfeatures the Trademark of WellPoint Pharmacy Management or of the relevant\nAffiliate of WellPoint.  Such co-branding will contain a Link to a landing page\nthat is intended to explain to WellPoint Members the nature of the\ndrugstore.com-WellPoint (or Affiliate of WellPoint) relationship and facilitate\nthe conversion of WellPoint Members to drugstore.com purchasers (the \"Landing\nPage\").  drugstore.com will also provide a persistent \"button\" on its website's\npages for WellPoint Members that \"linked\" to the drugstore.com Site from a\nWellPoint Site or a WellPoint Affiliate's Site or, in the case of a WellPoint\nMember that has already identified himself to drugstore.com as a WellPoint\nMember and has made a purchase from drugstore.com, by means of such WellPoint\nMember's identifying \"member profile\" that allows drugstore.com to identify any\nperson based upon his or her user identification and password.  Identified\nMembers shall be presented on the Landing Page with a Link to the provider of\nWellPoint's mail order services for Pharmaceutical Products provided that such\n                                                            -------------     \nservice provider cooperates with drugstore.com in establishing such\nrelationship, including without limitation the payment to drugstore.com of a fee\nto cover the cost of designing and creating such Link, not to exceed $5000,\nintegrating the offering by drugstore.com and such service provider and an\nagreement by such service provider not to promote DS Competitors to such\nIdentified Members with respect to the purchase of OTC Products.  The mock-ups\nattached as Exhibit B indicates the parties' current thinking with respect to\n            ---------                                                        \nthe co-branding contemplated by this Section 4.3 but WellPoint acknowledges and\nagrees that such co-branding shall be subject to changes in drugstore.com's\ndiscretion in light of possible re-designs of the drugstore.com Home Page and\nother co-branded pages.\n\n     (b)  The co-branded website content, sponsorship and advertising available\nabove to Identified WellPoint Members may be different from that which is\navailable to non-WellPoint Members.\n\n     (c)  drugstore.com shall work with WellPoint to develop ways to\nappropriately demonstrate to WellPoint Plan Sponsors WellPoint's benefits in\nconnection with the drugstore.com relationship.\n\n                                       10\n\n \n     (d)  drugstore.com does not currently sell banner advertising on the\ndrugstore.com Site.  In the event that drugstore.com changes such policy,\ndrugstore.com agrees that all revenue from such advertising placed on the\ndrugstore.com Site which was brought to the Site by reason of the efforts of\nWellPoint in securing such advertising shall be shared by WellPoint and\ndrugstore.com as mutually agreed by the parties following good faith\nnegotiations.  All advertising revenue derived from advertising on the WellPoint\nSites shall be retained solely by WellPoint.  With respect to advertising on the\nLanding Page, as defined in Section 4.3, drugstore.com and WellPoint will share\nequally in such revenues unless otherwise mutually agreed by the parties.\n\n     4.4  Promotional Materials.  The parties shall work together to create\ncollateral materials to market drugstore.com, such as package inserts for\nWellPoint, WellPoint Affiliates, WellPoint Plan Sponsors and WellPoint Members\nin a mutually agreeable format.  Any form of branded communication and\ndocumentation must be agreed in writing by the parties before it is issued,\npublished or otherwise made available (in any form or medium).  WellPoint will\nuse commercially reasonable efforts to approve documentation and promotions\nprovided by drugstore.com and in any event will provide comments, if any, or\napproval within five (5) working days of receipt of each draft copy.\ndrugstore.com shall be responsible for the cost of producing (e.g. printing\ncosts) stand-alone promotional materials where such materials only include\ndrugstore.com promotions.  The costs of other materials shall be paid by\nWellPoint.  All communications from drugstore.com targeted specifically to\nWellPoint Members and WellPoint Plan Sponsors (unless the WellPoint Plan Sponsor\ninitiated contact with drugstore.com) shall require WellPoint's prior written\napproval, except to any party who is a drugstore.com customer.\n\n     4.5  drugstore.com Home Page.\n\n     (a)  With respect to Identified Members, drugstore.com will, in accordance\nwith Section 4.3(a), place the logo of WellPoint Pharmacy Management and\/or the\nIdentified Member's Health Plan on the Home Page of the drugstore.com Site.\n\n     (b)  WellPoint shall provide drugstore.com with samples of WellPoint\nTrademarks for use in advertising and on the drugstore.com Site. Without\nWellPoint's prior written approval, which shall not be unreasonably withheld,\ndrugstore.com may not use Trademarks owned by WellPoint.\n\n     4.6  WellPoint Home Pages.\n\n     (a)  One of the drugstore.com Trademarks designated by drugstore.com and\nacceptable to WellPoint, which acceptance shall not be unreasonably withheld,\nshall be featured on the Home Page of WellPointRx.com and such pages of\nWellPoint.com as mutually agreed by the parties consistent with the goals of\nthis Agreement, and on the Home Pages of WellPoint's Affiliates that are Health\nPlans.\n\n     (b)  drugstore.com shall provide WellPoint with samples of drugstore.com\nTrademarks for use in advertising and on the WellPoint Sites.  Without\ndrugstore.com's \n\n                                       11\n\n \nwritten approval, which shall not be unreasonably withheld, WellPoint may not\nuse Trademarks owned by drugstore.com.\n\n     4.7  Clinical Content.\n\n     (a)  WellPoint shall provide clinical content to drugstore.com pursuant to\nits obligations contained in this Agreement. WellPoint shall not provide any\nclinical content to any other Internet Pharmacy or allow any other Internet\nPharmacy to use or display any WellPoint clinical content during the term of\nthis Agreement. All clinical content made available only to WellPoint Members\nunder the terms of this Agreement shall be subject to WellPoint's prior approval\nand its peer review procedures.\n\n     (b)  WellPoint shall not knowingly publish on the WellPoint Site, and\ndrugstore.com shall not knowingly publish on the drugstore.com Site, any\ncontent, including Links, that is contrary to law or false or misleading in any\nmaterial respect, that promotes products generally acknowledged to be injurious\nto good health (e.g., cigarettes and other smoking products, alcoholic\nbeverages) or that would reasonably be expected to be offensive to a reasonable\nperson.  Any content that either party reasonably determines to be contrary to\nlaw or false or misleading in any material respect shall be removed, upon notice\nfrom the determining party, as soon as practicable by the offending party.\nAfter such removal, the parties may bring the dispute for immediate resolution\npursuant to Section 13 of this Agreement.\n\n     (c)  WellPoint shall have final approval regarding any representations made\nrelating to the quality of WellPoint services.  drugstore.com shall have final\napproval regarding any representations made relating to the quality of\ndrugstore.com services.\n\n     4.8  Additional Obligations. With respect to Identified Members, at no time\nduring the Term of this Agreement shall drugstore.com engage in prescribing\nmedicine or referring consumers to physicians or other medical, dental or other\nprofessionals to obtain prescriptions for Pharmaceutical Products in violation\nof federal, state or local laws or regulations and\/or VIPPS rules or create any\nLinks available to Identified Members to any sites on the Internet which it\nknows or should reasonably have known are engaged in such practices.\n\nSection 5.   License\n\n     5.1  License to Trademarks.\n\n     (a)  Subject to Section 4, drugstore.com hereby grants to WellPoint and any\nof its wholly owned entities a non-exclusive, royalty-free, non-transferable\n(except as provided in Section 15.2), non-sublicensable worldwide license in all\njurisdictions in which drugstore.com has any rights, to use, reproduce,\ndistribute and display the drugstore.com Trademarks in connection with the\nagreements among the parties with respect to advertising and promotions and the\nperformance of its obligations hereunder.\n\n     (b)  Subject to Section 4, WellPoint hereby grants to drugstore.com and any\nof its wholly owned entities a non-exclusive, royalty-free, non-transferable\n(except as provided\n\n                                       12\n\n \nin Section 15.2), non-sublicensable worldwide license in all jurisdictions in\nwhich WellPoint has any rights, to use, reproduce, distribute and display the\nWellPoint Trademarks in connection with the agreements among the parties with\nrespect to advertising and promotions and the performance of its obligations\nhereunder.\n\n     (c)  Each party shall have the right to exercise quality control over the\nuse of its Trademarks by the other party to the degree necessary, in the sole\nopinion of the owner of such Trademarks, to maintain the validity and\nenforceability of such Trademarks and to protect the goodwill associated\ntherewith. Each party shall, in its use of the other's Trademarks, adhere to a\nlevel of quality required by the Trademark owner. If the owner of a Trademark,\nin its reasonable opinion, finds that use of such Trademark by the other party\nmaterially threatens the goodwill of such Trademark, the user of such Trademark\nshall, upon notice from the owner, immediately, and no later than ten (10) days\nafter receipt of such owner's notice, take all measures reasonably necessary to\ncorrect the deviation(s) or misrepresentation(s) in, or misuse of, the\napplicable Trademark. All goodwill associated with the use of the other's\ntrademarks hereunder shall inure to the benefit of the owner of such Trademark.\n\n     (d)  Each party shall use the other's Trademarks in accordance with sound\ntrademark and trade name usage principles and in compliance with all applicable\nlaws and regulations of the United States (including all laws and regulations\nrelating to the maintenance of the validity and enforceability of such\nTrademarks) and shall not use the Trademarks in any manner that might tarnish,\ndisparage, or reflect adversely on the Trademarks or the owner of such\nTrademarks. Each party shall use, in connection with the other's Trademarks, all\nlegends, notices and markings required by law. No party may materially alter the\nappearance of another's Trademarks in any advertising, marketing, distribution,\nor sales materials, or any other publicly distributed materials without the\nprior written consent of the other party.\n\nSection 6.  Compensation\n\n     6.1  In consideration of the rights granted to drugstore.com and the\nobligations performed by WellPoint under this Agreement, drugstore.com shall pay\nWellPoint fees based on the schedule attached hereto as Exhibit C.\n\n     6.2  WellPoint shall be entitled  to have a national public accounting firm\nreasonably agreeable to the parties audit no more frequently than once per year\ndrugstore.com's applicable books and records in order to monitor drugstore.com's\ncompliance with its payment obligations described in this Agreement, subject to\nsuch accounting firm's execution of drugstore.com's confidentiality agreement.\nWellPoint will provide drugstore.com with at least fifteen (15) business days'\nnotice and such audit shall take place at such location where drugstore.com\nmaintains its books and records and during reasonable business hours. All audits\nshall be at the expense of WellPoint; provided, however, that if any annual\naudit reveals an underpayment by drugstore.com of at least 5% of the amounts due\nand payable to WellPoint, such audit shall be at the expense of drugstore.com.\nIn the event any annual audit reveals a shortfall in \n\n                                       13\n\n \ndrugstore.com's annual payment obligations under this Agreement, drugstore.com\nshall immediately make payments to WellPoint in order to cover such shortfall.\n\n     6.3  drugstore.com shall, within 30 days of the Effective Date, grant\nWellPoint 750,000 shares of drugstore.com common stock (the \"Shares\") subject to\nthe following conditions:\n\n               (i)   WellPoint acknowledges and agrees that the Shares have not\nbeen registered under the Securities Act of 1933, as amended or applicable state\nsecurities laws, and no interest may be sold, distributed, assigned, offered,\npledged or otherwise transferred unless (a) there is an effective registration\nstatement under such Act and applicable state securities laws covering any such\ntransaction involving said securities, (b) drugstore.com receives an opinion of\nlegal counsel for WellPoint satisfactory to drugstore.com stating that such\ntransaction is exempt from registration, or (c) drugstore.com otherwise\nsatisfies itself that such transaction is exempt from registration. A legend\nsetting forth or referring to the above restrictions shall be placed on any\ncertificate issued to WellPoint representing the Shares, and a stop transfer\norder shall be placed on the books of drugstore.com and with any transfer agent\nuntil such securities may be legally sold or otherwise transferred.\n\n               (ii)  By accepting the Shares, WellPoint represents that it is\nacquiring the Shares for investment and not with a view to, or for sale in\nconnection with, any distribution thereof.  In addition, in connection with the\nissuance of the Shares, WellPoint specifically represents to drugstore.com those\nrepresentations set forth on Exhibit D  attached hereto.\n                             ---------\n\n               (iii) Notwithstanding anything herein to the contrary, if\nrequested by drugstore.com and an underwriter of common stock (or other\nsecurities) of drugstore.com, WellPoint shall not sell or otherwise transfer or\ndispose of the Shares then owned by WellPoint during the one hundred eighty\n(180) day period (or such lesser period (a) as is permitted by the underwriter\ngenerally or (b) as is permitted with respect to any holder of stock equal to or\ngreater than the number of the Shares or (c) as is permitted with respect to any\nagreement reached with any of drugstore.com's stockholders that hold greater\nthan 1% of drugstore.com's common stock, or (d) as is permitted with respect to\nany of drugstore.com's executive officers) following the effective date of such\nunderwritten public offering. The obligations described in this Section 6.3(iii)\nshall not apply to a registration relating solely to employee benefit plans on\nForm S-1 or Form S-8 or similar forms that may be promulgated in the future, or\na registration relating solely to an SEC Rule 145 transaction on Form S-4 or\nsimilar forms that may be promulgated in the future, and shall not apply to\nregistrations solely of securities held by stockholders of drugstore.com In\norder to enforce the above covenant, drugstore.com shall have the right to place\nrestrictive legends on the certificates representing the Shares and to impose\nstop-transfer instructions with respect to the securities subject to the\nforegoing restriction until the end of such one hundred eighty (180) day (or\nother applicable) period.\n\n                                       14\n\n \n            (iv) If during the period following the date of the issuance of the\nshares, drugstore.com proposes to file a registration statement under the\nSecurities Act of 1933, as amended (other than a registration relating solely to\nemployee benefit plans on Form S-1 or Form S-8 or similar forms that may be\npromulgated in the future, or a registration relating solely to an SEC Rule 145\ntransaction on Form S-4 or similar forms that may be promulgated in the future),\ndrugstore.com shall give written notice of such filing to WellPoint at least ten\n(10) days prior to filing.  If WellPoint desires to include shares in such\noffering, WellPoint shall reply in writing to drugstore.com within five (5) days\nof receipt of notice, indicating the number of shares WellPoint would like to\ninclude in the filing. drugstore.com  shall use reasonable commercial efforts to\ninclude WellPoint's shares in the offering, provided that WellPoint's rights\nunder this Section are expressly subordinate in all respects to all registration\nrights of stockholders of drugstore.com, including subject to rights of all\nexisting drugstore.com shareholders to first include their shares in any\noffering, and is subject to the right of the lead underwriter to cutback\nWellPoint's shares due to market or other conditions that could adversely effect\ndrugstore.com's offering.\n\n            (v)  WellPoint shall not sell or otherwise dispose of, during any\nninety (90)-day period, more than 325,000 of the Shares. A legend setting forth\nor referring to the above restrictions shall be placed on any certificate issued\nto WellPoint representing the Shares, and a stop transfer order shall be placed\non the books of drugstore.com and with any transfer agent with respect thereto.\n\n     6.4 In the event that, at the two-year anniversary of the Effective Date\n(the \"Determination Date\"), the fair market value of the Shares is not equal to\nor greater than $10 million, drugstore.com shall issue to WellPoint within\ntwenty (20) days of the Determination Date, at drugstore.com's discretion,\neither (i) cash equal to the difference between $10 million and the aggregate\nfair market value of the Shares or (ii) that number of additional shares of\ncommon stock whose aggregate fair market value as of their issuance date equals\nthe difference between $10 million and the aggregate fair market value of the\nShares. However, with respect to the issuance of shares, if the additional\nshares issued to WellPoint are not freely tradable within thirty (30) days of\nthe date of issue, WellPoint may require drugstore.com to buy back the\nadditional shares back from WellPoint for cash at the value of the shares on the\ndate of issuance. For the purposes of this Section, \"fair market value\" of the\nshares of drugstore.com common stock shall be determined as follows: (i) if\ntraded on a securities exchange or the Nasdaq National Market, the fair market\nvalue of the drugstore.com common stock shall be deemed to be the average of the\nclosing or last reported sale prices of the drugstore.com common stock on such\nexchange or market over the ten (10) trading day period ending five business\ndays prior to the Determination Date; (ii) if otherwise traded in an over-the-\ncounter market, the fair market value of the drugstore.com common stock shall be\ndeemed to be the average of the closing ask prices of the drugstore.com common\nstock over the ten (10) trading day period ending five business days prior to\nthe Determination Date; or (iii) if there is no public market for the\ndrugstore.com common stock, then fair market value shall be determined by mutual\nagreement of drugstore.com and WellPoint, and if drugstore.com and WellPoint are\nunable to so agree, at drugstore.com and WellPoint's \n\n                                       15\n\n \nequally shared expense by an investment banker of national reputation selected\nby drugstore.com and reasonably acceptable to WellPoint.\n\nSection 7. IP Rights Ownership\n\n     7.1   Ownership by WellPoint.  As between WellPoint and drugstore.com,\nWellPoint shall own all WellPoint IP Rights and all IP rights in materials\ncreated solely by WellPoint.  drugstore.com shall not distribute any such\nmaterials to other than WellPoint Members without the approval of WellPoint.\n\n     7.2   Ownership by drugstore.com.  As between WellPoint and drugstore.com,\ndrugstore.com shall own all drugstore.com IP Rights and all IP rights in\nmaterials created solely by drugstore.com.\n\n     7.3   Program Ownership.  Notwithstanding any other provision of this\nAgreement, all content and tools that are jointly developed during the course of\nthe parties' relationship pursuant to this Agreement, such as guidelines and\ntherapeutic substitution programs, may be used by other parties with no duty of\naccounting and may be available to Persons other than WellPoint Members;\nprovided, however, that such materials may not be made available to any\nCompetitor of WellPoint; and further provided, however, all content and tools\nshall be presumed not to have been jointly developed by the parties absent a\nwritten agreement by the parties reflecting such joint development.  All\nclinical programs and guidelines developed by WellPoint independent of\ndrugstore.com will be solely owned by WellPoint and are to be made available to\nWellPoint Members only, unless both parties agree to make such materials\navailable to Persons other than WellPoint Members.  All content and tools\nindependently developed by drugstore.com will be solely owned by drugstore.com\nand will be made available to Persons at drugstore.com's sole discretion.\n\nSection 8. Technical and Advertising Communications\n\n     8.1   Advertising and Promotions.  drugstore.com shall appoint such account\nmanagers, and sales and marketing personnel that shall be dedicated to working\nwith WellPoint Members and WellPoint Plan Sponsors as are reasonably necessary\nto carry out drugstore.com's obligations under this Agreement.\n\n     8.2   FTE Programmer. During the term of this Agreement, drugstore.com\nshall provide to WellPoint one FTE web site designer\/programmer to work on-site\non WellPoint premises if the parties deem it necessary to help make the\nWellPoint Sites and drugstore.com Site complement each other as provided for in\nthis Agreement and to enhance the operational functionality of the WellPoint\nSites.\n\n     8.3   Oversight.  Each party will appoint a project manager responsible, as\nappropriate, to oversee the activities under this Agreement and to address any\nissues that may arise under this Agreement.  Such project managers shall meet,\neither in person or by telephone conference, at least once each calendar\nquarter.\n\n                                       16\n\n \nSection 9. Representations and Warranties\n\n     9.1   Representations and Warranties of drugstore.com. drugstore.com hereby\nrepresents and warrants to WellPoint:\n\n     (a)   Authorization. All corporate action on the part of drugstore.com, its\nofficers, directors and stockholders necessary for the authorization, execution\nand delivery of this Agreement by and between drugstore.com and WellPoint, and\nthe performance of all obligations of drugstore.com hereunder has been taken,\nand this Agreement, when executed and delivered by drugstore.com, will\nconstitute valid and legally binding obligations of drugstore.com, enforceable\nagainst drugstore.com in accordance with its terms except as limited by\napplicable bankruptcy, insolvency, reorganization, moratorium, fraudulent\nconveyance and other laws of general application affecting enforcement of\ncreditors' rights generally, as limited by laws relating to the availability of\nspecific performance, injunctive relief, or other equitable remedies.\n\n     (b)   Intellectual Property. To its knowledge, drugstore.com owns or\npossesses sufficient legal rights to all IP Rights necessary for its businesses\nnow conducted without conflict with, or infringement of the rights of others. To\nits knowledge, drugstore.com technology or Trademarks do not violate any of the\nIP Rights of any Third Party.\n\n     (c)   Compliance with Other Instruments. The execution, delivery and\nperformance of this Agreement and the consummation of the transactions\ncontemplated hereby will not result in any violation of or be in conflict with\nor constitute, with or without the passage of time and giving of notice, a\ndefault under any provision of drugstore.com's or any of its subsidiaries'\ncharter or bylaws or any instrument, judgment, order, writ, decree or contract\nto which drugstore.com or any of its subsidiaries is a party or by which\ndrugstore.com or any of its subsidiaries is bound, or any provision of any\nfederal or state statute, rule or regulation applicable to drugstore.com or any\nof its subsidiaries, the effect of which would have a material adverse effect on\nthe ability of drugstore.com or any of its subsidiaries to perform its\nobligations under this Agreement or result in the creation of any lien, charge\nor encumbrance upon any assets of drugstore.com or any of its subsidiaries.\n\n     (d)   NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, DRUG\nSTORE.COM MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER,\nDIRECTLY OR INDIRECTLY, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,\nIMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH\nRESPECT TO ANY GOODS OR SERVICES TO BE PROVIDED UNDER THIS AGREEMENT, OTHER THAN\nTHOSE EXPRESSLY SET FORTH IN THIS AGREEMENT.\n\n     9.2   Representations and Warranties of WellPoint. WellPoint hereby\nrepresents and warrants to drugstore.com:\n\n                                       17\n\n \n     (a)  Authorization.  All corporate action on the part of WellPoint, its\nofficers, directors and stockholders necessary for the authorization, execution\nand delivery of this Agreement by and between WellPoint and drugstore.com, and\nthe performance of all obligations of WellPoint hereunder has been taken, and\nthis Agreement, when executed and delivered by WellPoint, will constitute valid\nand legally binding obligations of WellPoint, enforceable against WellPoint in\naccordance with its terms except as limited by applicable bankruptcy,\ninsolvency, reorganization, moratorium, fraudulent conveyance and other laws of\ngeneral application affecting enforcement of creditors' rights generally, as\nlimited by laws relating to the availability of specific performance, injunctive\nrelief, or other equitable remedies.\n\n     (b)  Intellectual Property.  To its knowledge, WellPoint owns or possesses\nsufficient legal rights to all IP Rights necessary for its businesses now\nconducted without conflict with, or infringement of the rights of others.  To\nits knowledge, WellPoint technology or Trademarks do not violate any of the IP\nRights of any Third Party\n\n     (c)  Compliance with Other Instruments. The execution, delivery and\nperformance of this Agreement and the consummation of the transactions\ncontemplated hereby will not result in any violation of or be in conflict with\nor constitute, with or without the passage of time and giving of notice, a\ndefault under any provision of WellPoint's or any of its subsidiaries' charter\nor bylaws or any instrument, judgment, order, writ, decree or contract to which\nWellPoint or any of its subsidiaries is a party or by which WellPoint or any of\nits subsidiaries is bound, or any provision of any federal or state statute,\nrule or regulation applicable to WellPoint or any of its subsidiaries, the\neffect of which would have a material adverse effect on the ability of WellPoint\nor any of its subsidiaries to perform its obligations under this Agreement or\nresult in the creation of any lien, charge or encumbrance upon any assets of\nWellPoint or any of its subsidiaries.\n\n     (d)  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, WELLPOINT\nMAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, DIRECTLY OR\nINDIRECTLY, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED\nWARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT\nTO ANY GOODS OR SERVICES TO BE PROVIDED UNDER THIS AGREEMENT, OTHER THAN THOSE\nEXPRESSLY SET FORTH IN THIS AGREEMENT.\n\nSection 10.  Indemnification\n\n     10.1 Indemnification.  Subject to section 10.2, WellPoint and drugstore.com\neach shall indemnify and hold harmless the other and its divisions, its\nAffiliates and its officers, directors, employees, representatives and agents\n(the \"Indemnified Parties\") from and against (i) any and all liabilities, suits,\ncosts, judgments, penalties, expenses, and obligations arising from or related\nto claims or actions made by a Third Party, including any obligation or\nliability which may be imposed upon any of the Indemnified Parties as a matter\nof law, and constituting, or in any way based upon, resulting from or arising\nout of any breach or alleged breach by WellPoint or drugstore.com, as\napplicable, \n\n                                       18\n\n \nof any representation, warranty, agreement or covenant made by such party in\nthis Agreement, and (ii) any cost or expense (including legal fees and out-of-\npocket expenses) reasonably incurred by any of the Indemnified Parties (and\ntheir counsel) in investigating, preparing for, defending against or otherwise\ntaking any action in connection with any of the foregoing (collectively\n\"Damages\"). A party's Damages shall be calculated net of any tax benefit such\nparty would be entitled to in respect of such Damages.\n\n     10.2 Procedure. If any claim, demand, assessment or liability or cost\nincidental thereto (collectively, an \"Indemnified Claim\"), is asserted against\nan Indemnified Party in respect of which the Indemnified Party proposes to\ndemand indemnification from the other party (the \"Indemnifying Party\") pursuant\nto Section 10.1, such Indemnified Party will promptly notify the Indemnifying\nParty in writing. No failure of an Indemnified Party to so notify the\nIndemnifying Party shall relieve the Indemnifying Party from the obligation to\nindemnify the Indemnified Party unless and to the extent the Indemnifying Party\nis actually prejudiced by such failure. Such Indemnified Party will accord the\nIndemnifying Party the opportunity to assume entire control for the defense,\ncompromise or settlement of any such Indemnified Claim through its own counsel\nand at its own expense; provided that no such compromise or settlement shall\ninclude any non-monetary terms and conditions applicable to such Indemnified\nParty without the consent of the Indemnified Party, which consent shall not be\nunreasonably withheld or delayed. Notwithstanding the forgoing, Indemnified\nParty may retain its own counsel at its own expense (the Indemnifying Party\nshall only be liable for the reasonable cost of one such counsel for all\nIndemnified Parties) if (i) the Indemnifying Party, within thirty (30) days\nafter notice of any Indemnified Claim, fails to assume the defense of such\nIndemnified Claim or (ii) the representation of both the Indemnifying Party and\nthe Indemnified Party would, in the reasonable judgment of the parties, be\ninappropriate due to actual or potential conflicting interests between them. If\nthe Indemnifying Party does not assume entire control of the defense, compromise\nor settlement of such Indemnified Claim, the Indemnified Party may compromise or\nsettle any such Indemnified Claim. drugstore.com and WellPoint each agree to\nreasonably cooperate with respect to the defense of any Indemnified Claim, at\nthe indemnifying party's expense.\n\nSection 11.  Infringement Claims\n\n     11.1 Legal Action for Infringement of IP Rights.\n\n     (a)  WellPoint reserves any and all rights to commence, prosecute,\ncompromise and settle any claim, action or proceeding for infringement, unfair\ncompetition, unauthorized use, misappropriation or violation of any of the\nWellPoint IP Rights by any Third Party. WellPoint may commence, prosecute,\ncompromise or settle any such claim, action or proceeding, as well as any claim,\naction or proceeding to defend any of the WellPoint IP Rights, in its sole\ndiscretion, but shall not have any obligation to do so.\n\n     (b)  drugstore.com reserves any and all rights to commence, prosecute,\ncompromise and settle any claim, action or proceeding for infringement, unfair\ncompetition, unauthorized use, misappropriation or violation of any of the\ndrugstore.com IP Rights by any Third Party. drugstore.com may commence,\nprosecute, compromise or \n\n                                       19\n\n \nsettle any such claim, action or proceeding, as well as any claim, action or\nproceeding to defend any of the drugstore.com IP Rights, in its sole discretion,\nbut shall not have any obligation to do so.\n\n     (c)  No party shall have the right to commence or prosecute any legal\naction with regard to the IP Rights of the other party, without such other\nparty's prior written consent in such other party's sole discretion.\n\n     (d)  If either party becomes the subject of a claim, action or proceeding\nfor infringement, unfair competition, unauthorized use, misappropriation or\nviolation of any IP Rights of a Third Party as a result of its use of the other\nparty's IP Rights pursuant to this Agreement, then the party owning such IP\nRights shall upon the request of such other party defend and indemnify the\nrequesting party from and against such Third Party claim, action or proceeding\n(\"IP Claim\") and shall pay any and all damages, liabilities, costs and attorneys\nfees awarded against a party arising out of such IP Claim ; provided that: the\nparty owning such IP Rights has sole control over the defense or settlement of\nsuch IP Claim, the requesting party shall provide the party owning such IP\nRights prompt notice of the IP Claim, and such assistance in defense of the\nclaim, action or proceeding as the owning party may reasonably request and shall\ncomply with any settlement or court order made in connection with the claim,\naction or proceeding (e.g., relating to the future use of any infringing IP\nRights). In any case, the requesting party shall be entitled to participate in\nthe defense of any such claim, action or proceeding, at its own cost, with\ncounsel of its choice.\n\n     (e)  In the event either party should have a claim against the other party\nfor infringement, unfair competition, unauthorized use, misappropriation or\nviolation of any of its IP Rights as a result of the use of its IP Rights by the\nother party pursuant to this Agreement, the parties shall resort to the dispute\nresolution provisions set forth in Section 13.\n\nSection 12.  Additional Obligations of the Parties\n\n     12.1 Nondisclosure.\n\n     (a)  A party (the \"Receiving party\") receiving any Confidential Information\nof the other party (the \"Disclosing party\") will exercise a reasonable degree of\ncare, but in no event less than the same degree of care that it uses to protect\nits own confidential information of a like nature, to keep confidential and not\ndisclose such Confidential Information. Without limiting the generality of the\nforegoing, the Receiving Party shall disclose the Confidential Information of\nthe other party only to those of its employees and contractors (a) who have a\nneed to know the Confidential Information in order to exercise its license to\nsuch Confidential Information, and (b) who are contractually obligated to\nmaintain the confidentiality of the Confidential Information.\n\n     (b)  The obligations set forth in Section 12.1(a) above shall not apply to\nany Confidential Information to the extent it: (a) is approved by prior written\nauthorization of the Disclosing party for release by the Receiving Party; (b) is\ndisclosed in order to \n\n                                       20\n\n \ncomply with a judicial order issued by a court of competent jurisdiction, in\nwhich event the Receiving Party shall give prior written notice to the\nDisclosing Party of such disclosure as soon as practicable and shall cooperate\nwith the Disclosing party in using all reasonable efforts to obtain an\nappropriate protective order or equivalent, provided that the information shall\ncontinue to be Confidential Information to the extent it is covered by such\nprotective order or equivalent; (c) becomes generally available to the public\nthrough any means other than a breach by the Receiving party of its obligations\nunder this Agreement; (d) was in the possession of the Receiving party without\nobligation of confidentiality prior to receipt or disclosure under this\nAgreement as evidenced by written records made prior to such receipt or\ndisclosure; (e) is developed independently by the Receiving party without the\nuse of or benefit from any of the Confidential Information of the other party or\nwithout breach of this Agreement, as evidenced by records of the Receiving \nparty; or (f) is required to be disclosed by any national securities exchange,\nby government rule or regulation (e.g., in connection with a securities filing)\nor by any other provisions of applicable law, provided that the Receiving party\ngives the Disclosing party advance written notice (to the extent practicable) of\nthe disclosure and cooperates with the Disclosing party in any reasonable\nattempt to limit the scope of the required disclosure. In any dispute over\nwhether information is Confidential Information under this Agreement, it will be\nthe burden of the Receiving party to show that such contested information falls\nwithin the exceptions set forth in this Section 12.1(b).\n\n     12.2 No Contest of WellPoint IP Rights.  drugstore.com shall not contest or\notherwise challenge (e.g., in any legal action or otherwise), or assist or\nencourage any other Person to contest or challenge, the validity of any\nWellPoint IP Rights; provided that the foregoing shall not preclude\ndrugstore.com from claiming that the IP Rights in question are drugstore.com IP\nRights.\n\n     12.3 No Contest of drugstore.com IP Rights.  WellPoint shall not contest or\notherwise challenge (e.g., in any legal action or otherwise), or assist or\nencourage any other Person to contest or challenge, the validity of any\ndrugstore.com IP Rights; provided that the foregoing shall not preclude\nWellPoint from claiming that the IP Rights in question are WellPoint IP Rights.\n\nSection 13.  Resolution of Disputes\n\n     13.1 General.  If any dispute arises between the parties relating to this\nAgreement, each party will follow the dispute resolution procedures set forth in\nthis Section 13 prior to initiating any litigation or pursuing other available\nremedies unless otherwise agreed in writing by the parties at the time the\ndispute arises.  Notwithstanding the foregoing, any party may commence\nlitigation without having first complied with the provisions of this Section 13\nif such commencement occurs within thirty (30) days prior to the date after\nwhich the commencement of litigation would be barred by any statute of\nlimitations, statute of repose or other law, rule, regulation, or order of\nsimilar import or in order to request injunctive or other equitable relief\nnecessary to prevent irreparable harm.  In such event, the parties will (except\nas may be prohibited by judicial order) nevertheless continue thereafter to\nfollow the procedures set forth in this Section 13.\n\n                                       21\n\n \n     13.2 Initiation of Procedures.  If a party seeks to initiate the procedures\nunder this Section 13, such party will give written notice thereof to the other\nparty.  Such notice will (i) state that it is a notice initiating the procedures\nunder this section, (ii) describe briefly the nature of the dispute and the\ninitiating party's claim or position in connection with the dispute, and (iii)\nidentify an individual with authority to settle the dispute on such party's\nbehalf.  Within ten (10) days after receipt of any notice under this Section\n13.2, the receiving party will give the initiating party written notice that\ndescribes briefly the receiving party's claims and positions in connection with\nthe dispute and identifies an individual with the authority to settle the\ndispute on behalf of the receiving party.\n\n     13.3 Pre-Litigation Discussion.  The parties will cause the individuals\nidentified in their respective notices under Section 13.2 to promptly make such\ninvestigation of the dispute as such individuals deem appropriate.  Promptly and\nin no event later than ten (10) days after the date of the initiating party's\nnotice under Section 13.2, such individuals will commence discussions concerning\nresolution of the dispute.  If the dispute has not been resolved within 30 days\nafter commencement of such discussions, then the parties shall submit the\ndispute for non-binding mediation to a mutually agreed upon mediator or\nmediation firm.  The parties will use their best efforts to cause the mediator\nto resolve the dispute within 15 days of its submission thereto. If the mediator\nis unable to resolve the dispute within such time period, any party may submit\nthe dispute to litigation.\n\nSection 14.  Termination; Extension\n\n     14.1 The following shall be Events of Default under this Agreement:\n\n     (a)  WellPoint is in material breach of any of its material obligations\nunder this Agreement (including any material breach or inaccuracy of its\nrepresentations or warranties that has a material adverse effect on the ability\nof WellPoint to perform its obligations under this Agreement ), which breach\nWellPoint does not cure within thirty (30) days after drugstore.com gives\nWellPoint written notice thereof;\n\n     (b)  drugstore.com is in material breach by of any of its material\nobligations under this Agreement (including any material breach or inaccuracy of\nits representations or warranties that has a material adverse effect on the\nability of drugstore.com to perform its obligations under this Agreement ),\nwhich breach drugstore.com does not cure within thirty (30) days after WellPoint\ngives drugstore.com written notice thereof;\n\n     (c)  drugstore.com fails to pay any payments due hereunder to WellPoint\nwhen due, and such failure is not cured within ten (10) business days after the\nreceipt of the notice of such failure.\n\n     (d)  drugstore.com is in material breach of any material obligation under\nSection 4.8 of this Agreement or fails to maintain its privacy structure in\naccordance with state and federal regulatory requirements and industry standards\nas may be reflected in certification standards of organizations such as Trust e,\nBBB, VIPPS, the NABP or similar organizations and at a level comparable to that\nmaintained by other Internet \n\n                                       22\n\n \nPharmacies, and such breach or failure is not corrected within thirty (30) days\nof drugstore.com's receipt of written notice from WellPoint of such failure.\n\n     14.2 Termination\n\n     (a)  If an Event of Default occurs under Section 14.1 and such default is\nnot cured within the prescribed notice period, the non-defaulting party may\nimmediately terminate this Agreement.\n\n     (b)  If either party (i) ceases to do business, or otherwise terminates its\nbusiness operation or (ii) is declared insolvent or seeks protection under any\nbankruptcy, receivership, trust deed, creditors arrangement, composition or\ncomparable proceeding., the other party may immediately terminate this\nAgreement.\n\n     (c)  In the event that drugstore.com is, following a Change in Control of\ndrugstore.com, subject to the Control of a Competitor of WellPoint, WellPoint\nmay terminate this Agreement on sixty (60) days' prior written notice to\ndrugstore.com, so long as such notice of termination is given no later than\nthree (3) months after such Change in Control.  It shall be considered a Change\nin Control of drugstore.com to a Competitor if drugstore.com is, following a\nChange in Control of drugstore.com, subject to the Control of a Third Party that\nis either (a) a PBM or (b) a Health Plan or (c) is an organization that owns,\ncontrols or operates either (i) a PBM that services 1 million or more persons or\n(ii) a Health Plan that has annual premiums and premium equivalents in excess of\n$500 million.\n\n     14.3 Survival and Continuing Obligations\n\n     (a) Sections 6.2 (but only for a period of one year following the date of\ntermination of this Agreement), 7, 10, 11, 12, 13, 14.3 and 15 (but not Section\n15.2) and the third sentence of the first paragraph of Exhibit C (with respect\nto Repeat Customer Fees as set forth in such paragraph) shall survive\ntermination of this Agreement.\n\n     14.4 Extension. This Agreement shall continue throughout the Term.. Upon\nthe expiration of the Term, this Agreement shall automatically renew for\nadditional one (1) year terms at each anniversary of the Effective Date, unless\n(i) either party gives written notice of its intent not to renew no later than\nninety (90) days prior to the expiration of the Term or any renewal term, or\n(ii) this Agreement is terminated pursuant to its terms.\n\nSection 15.  Miscellaneous\n\n     15.1 Relationship.  The parties are independent contractors under this\nAgreement.  Each party acknowledges and agrees that it is not and will not be\nduring the Term an employee or an agent of the other party.  Nothing in this\nAgreement will be deemed to constitute, create, give effect to or otherwise\nrecognize a joint venture, partnership, franchise or business entity of any\nkind.\n\n                                       23\n\n \n     15.2 Assignment; Sale of Assets or Capital Stock.  This Agreement shall be\nbinding upon and inure to the benefit of the parties hereto, and the legal\nrepresentatives, successors in interest and permitted assigns, respectively, of\neach such party.  This Agreement shall not be assigned in whole or in part by\nany party without the prior written consent of the other party, which shall not\nbe unreasonably withheld. It shall be considered an assignment of this Agreement\nby drugstore.com  which requires WellPoint's prior written consent if\ndrugstore.com is, following a Change in Control of drugstore.com, subject to the\ncontrol of a Competitor of WellPoint as described in Section 14.2 (c).\n\n     15.3 Contract Modifications for Prospective Legal Events. Nothing contained\nin this Agreement shall be construed to require the commission of an act\ncontrary to law, and whenever there is any conflict between any provision of\nthis Agreement and any statute, law, ordinance or regulation, the latter shall\nprevail. In such event, and in any case in which any provision of this Agreement\nis determined to be in violation of a statute, law, ordinance or regulation, the\naffected provision(s) shall be limited only to the extent necessary to bring it\nwithin the requirements of the law and, insofar as possible under the\ncircumstances, to carry out the purposes of this Agreement. The other provisions\nof this Agreement shall remain in full force and effect, and the invalidity or\nunenforceability of any provision hereof shall not affect the validity and\nenforceability of the other provisions of this Agreement, nor the availability\nof all remedies in law or equity to the parties with respect to such other\nprovisions.\n\n     In the event any state or federal laws or regulations, now existing or\nenacted or promulgated after the Effective Date of this Agreement, are\ninterpreted by judicial decision, a regulatory agency or legal counsel of both\nparties in such a manner as to indicate that the structure of this Agreement may\nbe in violation of such laws or regulations, WellPoint and drugstore.com shall\namend this Agreement, to the maximum extent possible, to preserve the underlying\neconomic and financial arrangements between WellPoint and drugstore.com.\n\n     15.4 Notices.  All notices, requests, demands, applications, services of\nprocess, and other communications that are required to be or may be given under\nthis Agreement shall be in writing and shall be deemed to have been duly given\nif sent by telecopy or facsimile transmission, answer back requested, or\ndelivered by courier or mailed, certified first class mail, postage prepaid,\nreturn receipt requested, to the parties to this Agreement at the following\naddresses:\n\n     If to WellPoint:    WellPoint Health Networks, Inc.\n                         1 WellPoint Way\n                         Thousand Oaks, CA 91362\n                         Attention: President, Senior and Specialty Businesses\n                         Division\n                         Fax:  (808) 557-6823\n\n     With a copy to:     WellPoint Health Networks, Inc.\n                         1 WellPoint Way\n\n                                       24\n\n \n                         Thousand Oaks, CA 91362\n                         Attention: General Counsel\n                         Fax:  (805) 557-6820\n\n     If to drugstore.com:\n     \n     drugstore.com, inc.\n\n                         13920 SE Eastgate Way, Suite 300\n                         Bellevue, WA 98005\n                         Attention: General Counsel\n                         Fax:  (425) 372-3808\n\nor to such other address as the party shall have furnished to the other party by\nnotice given in accordance with this Section 15.4.  Such notice shall be\neffective (i) if delivered in person or by courier, upon actual receipt by the\nintended recipient, or (ii) if sent by telecopy or facsimile transmission, on\nthe date of transmission unless transmitted after normal business hours, in\nwhich case on the following date, or (iii) if mailed, upon the date of first\nattempted delivery.\n\n     15.5 Waiver. No provision of this Agreement shall be deemed to be waived\nand no breach excused unless such waiver or consent shall be in writing and\nsigned by the party that is claimed to have waived or consented. The failure of\na party at any time, or from time to time, to require performance by the other\nparty of any provision hereof shall in no way affect the rights of such party\nthereafter to enforce the same nor shall the waiver by a party of any breach of\nany provision hereof by the other party constitute a waiver of any succeeding\nbreach of such provision, or a waiver of any provision itself, or a waiver of\nany other provisions hereof.\n\n     15.6 Severability.  This Agreement will be enforced to the fullest extent\npermitted by applicable law.  If for any reason any provision of this Agreement\nis held to be invalid or unenforceable to any extent, then: (a) such provision\nwill be interpreted, construed or reformed to the extent reasonably required to\nrender the same valid, enforceable and consistent with the original intent\nunderlying such provision; (b) such provision will be void to the extent it is\nheld to be invalid or unenforceable; (c) such provision will remain in effect to\nthe extent that it is not invalid or unenforceable; and (d) such invalidity or\nunenforceability will not affect any other provision of this Agreement or any\nother agreement between the parties.\n\n     15.7 Remedies. Except as otherwise expressly provided in this Agreement,\neach and all of the rights and remedies provided in this Agreement, and each and\nall of the remedies allowed at law and in equity, will be cumulative, and the\nexercise of one right or remedy will not be exclusive of the right to exercise\nor resort to any and all other rights or remedies provided in this Agreement or\nat law or in equity.\n\n     15.8 Injunctive Relief.  The parties acknowledge that a material breach of\nSections 7 or 12 of this Agreement would cause irreparable harm, the extent of,\nwhich \n\n                                       25\n\n \nwould be difficult to ascertain. Accordingly, they agree that, in addition to\nany other legal remedies to which the non-breaching party may be entitled, such\nparty will be entitled to obtain immediate injunctive relief in the event of a\nmaterial breach of this Agreement.\n\n     15.9  Governing Law.  This Agreement will be governed by and construed\naccording to the laws of the State of California without regard to its choice of\nlaw provisions.  The parties consent to the jurisdiction of such courts and\nwaive any right to assert that any such court constitutes an inconvenient or\nimproper forum.\n\n     15.10 Publicity.  Neither party shall, without the approval of the other,\nmake any press release or other public announcement concerning the transactions\ncontemplated by the Agreements, except as and to the extent that any such party\nshall be so obligated by law or by the rules, regulations or policies of any\nnational securities exchange or association or governmental entity, in which\ncase the other party shall be advised and the parties shall use reasonable\nefforts to cause a mutually agreeable release or announcement to be issued;\nprovided, however, that the parties hereby acknowledge and agree that\ncommunications among employees of the parties and their attorneys,\nrepresentatives and agents necessary to consummate the transactions contemplated\nhereby shall not be deemed a public announcement for purposes of this Section\n15.10.  Upon the execution and delivery of this Agreement, the parties hereto\nwill cooperate in respect of the immediate issuance of a mutually acceptable\npress release relating to the transactions contemplated by the Agreements.\n\n     15.11 Entire Agreement.  All Exhibits and Schedules to this Agreement are\nincorporated in and constitute a part of this Agreement.  This Agreement,\nincluding the Exhibits and Schedules hereto, each as amended from time to time,\nconstitute the entire understanding between the parties in relation to the\nsubject matter hereof and supersede all prior discussions, agreements and\nrepresentations related to this subject matter, whether oral or written and\nwhether or not executed by a party.  Unless otherwise provided in this\nAgreement, no modification, amendment or other change may be made to this\nAgreement or any part thereof unless reduced to writing and executed by\nauthorized representatives of all parties.\n\n     15.12 Counterparts.  This Agreement may be executed in two or more\ncounterparts, each of which will be deemed an original, but all of which\ntogether will constitute one and the same instrument.\n\n     15.13 Titles and Subtitles. The titles and subtitles used in this Agreement\nand in the Exhibits and Schedules hereto are used for convenience only and are\nnot to be considered in construing or interpreting this Agreement.\n\n     15.14 Force Majeure.  Neither party shall be responsible for a failure to\nmeet its obligations under this Agreement to the extent caused by the following:\n(i) materially inaccurate data submitted by the other party; (ii) any material\nfailure of equipment, facilities or services not controlled or supplied by such\nparty; or (iii) failure(s) caused by acts of God, acts of nature, riots and\nother major civil disturbances, strike by such party's personnel, sabotage,\ninjunctions or applicable laws or regulations, in each case without \n\n                                       26\n\n \nbreach by such party of any obligations under this Agreement with regard to\neither such event or such failure. WellPoint or drugstore.com, as applicable,\nagrees to use its commercially reasonable efforts to restore performance of its\nobligations under this Agreement as soon as reasonably practicable following any\nsuch event.\n\n     15.15 Effective Date. This Agreement shall become effective at the\nEffective Date.\n\n                           [Signature Page Follows]\n\n                                       27\n\n \n     IN WITNESS WHEREOF, the parties have duly entered into this Agreement as of\nthe date first written above.\n\nWellPoint:                                   drugstore.com:\n\nWELLPOINT HEALTH NETWORKS INC.               DRUGSTORE.COM, INC.\n\nBy: \/s\/ Joan Herman                          By: \/s\/ Mark Silverman\n\nName:   Joan Herman                          Name:   Mark Silverman\n\nTitle:  Executive Vice President             Title:  Vice President, Business\n                                             Development\n\n                                       28\n\n \n                                   Exhibit A\n\n                          Pharmacy Provider Agreement\n                          ---------------------------\n\n                                (see attached)\n\n                                       29\n\n \n                                   Exhibit B\n\n                           Mock-Ups for Section 4.3\n                           ------------------------\n\n                                       30\n\n \n                                   Exhibit C\n\n                     Compensation to Be Paid to WellPoint\n\nFor each New Customer acquired by drugstore.com during the Term, drugstore.com\nshall pay WellPoint $10.00 during the year of such acquisition (the \"New\nCustomer Fees\"). In addition, drugstore.com shall pay WellPoint $2.50 in each\nsubsequent year that a New Customer purchases an OTC Product from drugstore.com,\nthrough the fourth year after the year in which the New Customer first purchased\nfrom drugstore.com (the \"Repeat Customer Fees\"). The Repeat Customer Fees will\ncontinue to be paid beyond termination of this Agreement (other than by\ndrugstore.com under Sections 14.2(a) for so long as the Pharmacy Provider\nAgreement remains in effect and drugstore.com is reimbursed for prescriptions it\nfills for WellPoint Members. Collectively, the New Customer Fees and the Repeat\nCustomer Fees are the \"Customer Fees\". A \"New Customer\" is an Identified Member\nthat purchases an OTC Product from drugstore.com and has not made a prior\npurchase from drugstore.com.\n\ndrugstore.com shall pay WellPoint minimum Customer Fees (\"Minimum Fees\")\naccording to the following schedule:\n\n     Year 1 of the Term:  $1.0 million\n\n     Year 2 of the Term:  $1.5 million\n\n     Year 3 of the Term:  $2.0 million\n\n     Year 4 of the Term:  $2.5 million\n\n     Year 5 of the Term:  $3.0 million\n\nFor the purpose of this Exhibit C, \"Year 1 of the Term\" means the initial 12-\nmonth period following the Effective Date, and each successive 12-month period\nduring the Term is noted Year 2 of the Term and so forth.\n\nWith respect to each Year of the Term, Minimum Fees shall be due and payable\nquarterly in advance, the first payment being due at signing and the remaining\npayments due by the fifth day of the following quarter.  All Customer Fees due\nand payable shall be offset by the Minimum Fees paid by drugstore.com.  During\neach Year of the Term, when Customer Fees exceed the Minimum Fees, such excess\nCustomer Fees shall be due and payable within 30 days following the end of each\nYear of the Term.\n\nIn addition to the Customer Fees, drugstore.com shall pay WellPoint bonus\nCustomer Fees (\"Bonus Fees\"), if any, according to the following schedule:\n\n     Upon reaching 50,000 New Customers within Year 1 of the Term, drugstore.com\nshall pay to WellPoint a one-time Bonus Fee of $100,000 and upon reaching\n100,000 \n\n                                       31\n\n \ncumulative New Customers within Year 1 of the Term, drugstore.com shall pay to\nWellPoint an additional one-time Bonus Fee of $250,000.\n\n     Upon reaching 250,000 cumulative New Customers by the last day of Year 2 of\nthe Term, drugstore.com shall pay to WellPoint a one-time Bonus Fee of $400,000.\n\n     Upon reaching 500,000 cumulative New Customers by the last day of Year 3 of\nthe Term, drugstore.com shall pay to WellPoint a one-time Bonus Fee of $500,000.\n\n     Upon reaching 800,000 cumulative New Customers by the last day of Year 4 of\nthe Term, drugstore.com shall pay to WellPoint a one-time Bonus Fee of $750,000.\n\n     Upon reaching 1,000,000 cumulative New Customers by the last day of Year 5\nof the Term , drugstore.com shall pay to WellPoint a one-time Bonus Fee of\n$1,000,000.\n\n\nNotwithstanding anything to the contrary in this Agreement, in the event that\ndrugstore.com has acquired fewer than 100,000 New Customers in the aggregate by\nthe thirtieth (30\/th\/) month after the Effective Date, the schedule of Minimum\nFees shall be adjusted to the following:\n\n     Year 4 of the Term:  $2.0 million\n\n     Year 5 of the Term:  $2.0 million\n\nNotwithstanding anything to the contrary in this Agreement, in the event that\n(i) WellPoint or any of its Affiliates actively promotes to WellPoint Members a\ncompany that sells OTC Products (other than pursuant to the agreement described\nin Section 3.1(5), AND (ii) drugstore.com has acquired fewer than 100,000 New\nCustomers in the aggregate by the 30\/th\/ month after the Effective Date, the\nschedule of Minimum Fees shall be adjusted to the following:\n\n     Year 4 of the Term:  $1.0 million\n\n     Year 5 of the Term:  $1.0 million\n\nIf for any reason drugstore.com is at any time during the Term (1) excluded from\npharmacy networks that cover 25% or more of all WellPoint Members as of the\nEffective Date or (2) precluded from placement on WellPoint Sites accessible by,\nand\/or from marketing (such as via mailings) pursuant to this Agreement to, 75%\nof all WellPoint Members as of the Effective Date, the Minimum Fees shall be\nreduced to $500,000 per year for each period following such event.  If for any\nreason drugstore.com is at any time during the Term (1) excluded from pharmacy\nnetworks that cover 50% or more of all WellPoint Members as of the Effective\nDate, (2) if Blue Cross of California is sold or is no longer an Affiliate of\nWellPoint (and it excludes drugstore.com from its networks), or (3) any two or\nmore PBMs or Health Plans that are Affiliates of WellPoint are sold or are no\nlonger Affiliates of WellPoint (and such Affiliates exclude drugstore.com from\ntheir \n\n                                       32\n\n \nnetworks), Minimum Fees shall no longer be payable to WellPoint for periods\nfollowing such event.\n\n                                       33\n\n \n                                   Exhibit D\n\n                     WellPoint Investment Representations\n\n          (i)    WellPoint is aware of drugstore.com's business affairs and\nfinancial condition, and has acquired information about drugstore.com sufficient\nto reach an informed and knowledgeable decision to acquire the Shares. WellPoint\nis acquiring the Shares for its own account for investment purposes only and not\nwith a view to, or for the resale in connection with, any \"distribution\" thereof\nfor purposes of the Securities Act. WellPoint hereby represents that WellPoint\nis an \"accredited investor\" as defined in Rule 501 promulgated under the\nSecurities Act of 1933, as amended.\n\n          (ii)   WellPoint understands that the Shares have not been registered\nunder the Securities Act in reliance upon a specific exemption therefrom, which\nexemption depends upon, among other things, the bona fide nature of WellPoint's\ninvestment intent as expressed herein.  In this connection, WellPoint\nunderstands that, in the view of the SEC, the statutory basis for such exemption\nmay be unavailable if WellPoint's representation was predicated solely upon a\npresent intention to hold the Shares for the minimum capital gains period\nspecified under tax statutes, for a deferred sale, for or until an increase or\ndecrease in the market price of the Shares, or for a period of one year or any\nother fixed period in the future.\n\n          (iii)  WellPoint further understands that the Shares must be held\nindefinitely unless subsequently registered under the Securities Act and any\napplicable state securities laws, or unless exemptions from registration are\notherwise available.  Moreover, WellPoint understands that drugstore.com is\nunder no obligation to register the Shares.\n\n          (iv)   WellPoint is aware of the provisions of Rule 144 and 144A,\npromulgated under the Securities Act, which, in substance, permit limited public\nresale of \"restricted securities\" acquired, directly or indirectly, from the\nissuer thereof (or from an affiliate of such issuer), in a non-public offering\nsubject to the satisfaction of certain conditions, if applicable, including,\namong other things: the availability of certain public information about\ndrugstore.com, the resale occurring not less than one year after the party has\npurchased and paid for the securities to be sold; the sale being made through a\nbroker in an unsolicited \"broker's transaction\" or in transactions directly with\na market maker (as said term is defined under the Securities Exchange Act of\n1934, as amended) and the amount of securities being sold during any three-month\nperiod not exceeding the specified limitations stated therein.\n\n          (v)    WellPoint further understands that at the time it wishes to\nsell the Shares there may be no public market upon which to make such a sale,\nand that, even if such a public market then exists, drugstore.com may not be\nsatisfying the current public information requirements of Rule 144 and 144A, and\nthat, in such event, WellPoint may be precluded from selling the Shares under\nRule 144 and 144A even if the one-year minimum holding period had been\nsatisfied.\n\n                                       34\n\n \n          (vi)   WellPoint further understands that in the event all of the\nrequirements of Rule 144 and 144A are not satisfied, registration under the\nSecurities Act or another registration exemption will be required; and that, not\nwithstanding the fact that Rule 144 and 144A are not exclusive, the Staff of the\nSEC has expressed its opinion that persons proposing to sell private placement\nsecurities other than in a registered offering and otherwise than pursuant to\nRule 144 and 144A will have a substantial burden of proof in establishing that\nan exemption from registration is available for such offers or sales, and that\nsuch persons and their respective brokers who participate in such transactions\ndo so at their own risk.\n\n                                       35\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9311],"corporate_contracts_industries":[9440],"corporate_contracts_types":[9613,9617],"class_list":["post-42060","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-wellpoint-health-networks-inc","corporate_contracts_industries-health__plans","corporate_contracts_types-operations","corporate_contracts_types-operations__jv"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42060","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42060"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42060"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42060"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42060"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}