{"id":42073,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/amendment-no-1-to-agreement-wellpoint-health-networks-inc-and.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"amendment-no-1-to-agreement-wellpoint-health-networks-inc-and","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/amendment-no-1-to-agreement-wellpoint-health-networks-inc-and.html","title":{"rendered":"Amendment No. 1 to Agreement &#8211; WellPoint Health Networks Inc. and Drugstore.com Inc."},"content":{"rendered":"<pre>\n                                                        [LOGO] drugstore.com(TM)\n\n\n                               AMENDMENT NO. 1 TO\n              AGREEMENT BETWEEN WELLPOINT HEALTH NETWORKS, INC. AND\n                              DRUGSTORE.COM, INC.\n\n\n\n\nThis Amendment No.1, dated as of June 29, 2001(the \"Amendment\"), is made to the\nAgreement, dated June 23, 2000, between WellPoint Health Networks, Inc.\n(\"WellPoint\") and drugstore.com, inc. (\"drugstore.com\") (the \"Agreement\"). The\nparties have discussed the relationship contemplated by the Agreement and have\nfound some aspects to be operationally and financially unfeasible. In accordance\nwith that discussion, the parties have mutually agreed to make this Amendment in\nmutual agreement that this Amendment modifies the Agreement sufficiently to\naddress each parties' concerns and represents the accurate present intention of\nthe parties. Except as otherwise indicated, all terms defined in the Agreement\nshall have the same meanings when used in this Amendment No. 1.\n\nWellPoint and drugstore.com agree as follows:\n\n1.   Section 4.1(c) of the Agreement is hereby amended to read in its entirety\n     as follows:\n\n          (c) WellPoint shall market drugstore.com and its internet pharmacy\n              services to WellPoint Members and to WellPoint Plan Sponsors,\n              including without limitation offering WellPoint customers a direct\n              Link to drugstore.com from WellPoint Plan Sponsors' intranets and\n              by promoting drugstore.com through all reasonably available\n              channels, including among other things (i) the inclusion of\n              information and mutually agreed upon promotions in fifty percent\n              (50%) of all regular mailings to WellPoint Members that reference\n              pharmacy for BCC and Unicare; (ii) physical and\/or E-mail mailings\n              on behalf of drugstore.com (the schedule for which shall be\n              mutually agreed upon by the parties in advance) to all Members\n              (costs of preparing the drugstore.com-specific inserts to be borne\n              by drugstore.com, inc. in accordance with Section 4.4 of this\n              Agreement) so as to provide drugstore.com with a minimum of ten\n              million (10,000,000) Member messages to a minimum of 5,000,000\n              WellPoint Member households about drugstore.com or drugstore.com\n              promotions per year of the Term with uniform distribution of such\n              \"impressions\" if reasonably practical through the Term\n              (drugstore.com acknowledging that a large number of mail\n              impressions are during plan enrollment periods. With respect to\n              WellPoint Plan Sponsors that are not WellPoint Affiliates,\n              drugstore.com acknowledges that WellPoint may need to obtain such\n              WellPoint Plan Sponsor's consent before engaging in certain of\n              these activities that relate specifically to the WellPoint Plan\n              Sponsor or its members. WellPoint agrees that it shall exercise\n              commercial best efforts to obtain any such consents as soon as\n              possible.\n\n2.   Section 4.1(e) of the Agreement is hereby amended to read in its entirety\n     as follows:\n\n          (e) WellPoint shall make commercially reasonable efforts to provide to\n              drugstore.com WellPoint Plan Sponsor e-mail addresses, and in\n              WellPoint's reasonable judgment (with respect to Plan Sponsor's\n              that are not Affiliates of WellPoint), introduce drugstore.com\n              personnel to appropriate WellPoint Plan Sponsor contact persons so\n              that the parties may announce their relationship and explain its\n              benefits to WellPoint Plan Sponsors.\n\n3.   Section 6.4 of the Agreement is hereby amended to read in its entirety as\n     follows:\n\n                                       1\n\n\n\n6.4 In the event that, at the two-year anniversary of the Effective Date (the\n\"Determination Date\"), the fair market value of the Shares is not equal to or\ngreater than $2,500,000, drugstore.com shall issue to WellPoint within twenty\n(20) days of the Determination Date, at drugstore.com's discretion, either (i)\ncash equal to the difference between $2.5 million and the aggregate fair market\nvalue of the Shares or (ii) that number of additional shares of common stock\nwhose aggregate fair market value as of their issuance date equals the\ndifference between $2,500,000 and the aggregate fair market value of the Shares.\nThe number of additional shares issued to WellPoint are limited to thirty-five\n(35) million and are issued subject to the conditions of Sections 6.3 of the\nAgreement. If thirty-five (35) million shares are not sufficient to settle the\ncontract on the Determination Date, then the additional number of shares\nrequired to settle the contract will be fixed based on market value on such date\nand the Company will use its best effort to settle its obligation in shares. For\nthe purposes of this Section, \"fair market value\" of the shares of drugstore.com\ncommon stock shall be determined as follows: (i) if traded on a securities\nexchange or the Nasdaq National Market, the fair market value of the\ndrugstore.com common stock shall be deemed to be the average of the closing or\nlast reported sale prices of the drugstore.com stock on such exchange or market\nover the ten (10) trading day period ending five business days prior to the\nDetermination Date; (ii) if otherwise traded in an over-the-counter market, the\nfair market value of the drugstore.com common stock shall be deemed to be the\naverage of the closing ask prices of the drugstore.com common stock over the ten\n(10) trading day period ending five business days prior to the Determination\nDate; or (iii) if there is not public market for the drugstore.com common stock,\nthen fair market value shall be determined by mutual agreement of drugstore.com\nand WellPoint, and if drugstore.com and WellPoint are unable to so agree, at\ndrugstore.com and WellPoint's equally shared expense by an investment banker of\nnational reputation selected by drugstore.com and reasonably acceptable to\nWellPoint.\n\n4.   Section 8.2 of the Agreement is hereby deleted in its entirety.\n5.   Exhibit C is hereby replaced in its entirety with the attached Exhibit C to\n     this Amendment.\n6.   The amendments made to the Agreement by this Amendment No.1 shall be\n     effective as of the date of this Amendment No.1. Except as specifically\n     stated in this Amendment No.1, the Agreement is not modified, revoked or\n     superseded and remains in full force and effect.\n\n\n\n\n\nWellPoint:                             drugstore.com:\n\nWellPoint Health Networks, Inc.        drugstore.com, inc.\n\nBy:  \/s\/ Joan Herman                   By:  \/s\/ Bob Barton\n    --------------------------------       -------------------------------------\nTitle:   President                     Title:   CEO\n       -----------------------------          ----------------------------------\nDate Signed:  9\/14\/01                  Date Signed:   9\/15\/01\n             -----------------------                ----------------------------\nAddress:  1 Well Point Way             Address:  13920 SE Eastgate Way\n         ---------------------------            --------------------------------\n          Thousand Oaks, CA 91362                Bellevue, WA 98555\n         ---------------------------            --------------------------------\nPhone:    (805) 557-6333               Phone:    (425) 372-3240\n       -----------------------------          ----------------------------------\n\n                                        2\n\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 $15.00 during the year of such acquisition (the \"New\nCustomer Fees\"). In addition, drugstore.com shall pay WellPoint $5.00 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:  $1,000,000.00 (paid by 6\/29\/2001)\n                  Year 2 of the Term:  $  750,000.00\n                  Year 3 of the Term:  $  750,000.00\n                  Year 4 of the Term:  $  750,000.00\n                  Year 5 of the Term:  $  750,000.00\n\nFor the purpose of this Exhibit C, \"Year 1 of the Term\" means the initial\n12-month period following the Effective Date, and each successive 12-month\nperiod during 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, with each payment due by the fifth day of the following\nquarter. All Customer Fees due and payable shall be offset by the Minimum Fees\npaid by drugstore.com. During each Year of the Term, when Customer Fees exceed\nthe Minimum Fees, such excess Customer Fees shall be due and payable within 30\ndays following the end of each Year of the Term.\n\nIf for any reason drugstore.com is 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 $500,000.00 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 network(s), Minimum Fees shall no longer be payable to WellPoint for\nperiods following such event.\n\n\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-42073","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\/42073","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=42073"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42073"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42073"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}