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Exhibit 10.38
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
LICENSE AND PRODUCT DEVELOPMENT AGREEMENT
This AGREEMENT is made as of July __, 1999 (the "Effective Date"),
between MEDSCAPE, INC., a Delaware corporation with offices at 000 X. 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 ("Medscape") and NATIONAL DATA
CORPORATION, a Delaware corporation with offices at National Data Plaza,
Atlanta, Georgia 30329 ("NDC" and together with Medscape, collectively, the
"Parties," and each a "Party"). Unless otherwise specified herein, capitalized
terms used in this Agreement have the meanings defined in this Agreement and the
Schedules and Exhibits hereto.
WHEREAS, Medscape is in the business of, and has substantial
skills and experience in, developing, providing and managing on-line clinical
and healthcare information.
WHEREAS, NDC is in the business of, and has substantial skills
and experience in, electronic data interchange products and services and data
management.
WHEREAS, subject to the terms and conditions of this
Agreement, Medscape and NDC wish to cooperate (x) to market each other's
products and services, and (y) to jointly develop, market and distribute certain
clinical practice management and healthcare-related, electronic data interchange
services to physicians, allied healthcare professionals, pharmaceutical
manufacturers, consumers and pharmacists.
WHEREAS, subject to the terms and conditions of this
Agreement, Medscape and NDC further desire to set forth the terms on which (x)
NDC may act as Medscape's preferred clinical data interchange and data
management services partner, and (y) Medscape may act as NDC's preferred
healthcare clinical content and information services partner.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, and for other good and
valuable consideration the receipt of which is hereby acknowledged, the Parties
hereby agree as follows:
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ARTICLE I
DEFINED TERMS
Section 1.1 As used in this Agreement, the following terms
shall have the following meanings:
"Affiliate," as to any Party, means any Person directly or
indirectly controlling, controlled by or under common control with such Party,
and shall include any officer, director and partner of any such Party. A Party
shall be deemed to control another Person if it owns or has the power to
exercise voting rights with respect to more than 50 percent of the voting
securities of such other Person.
"Agreement" means this License and Product Development
Agreement, as modified, supplemented, restated or amended from time to time.
"AMA" has the meaning provided in Section 2.1(f).
"AMA License" has the meaning provided in Section 15.1(b).
"AMA Sublicense" has the meaning provided in Section 2.1(a).
"Confidential Information" has the meaning provided in Section
14.2.
"EDI Services" has the meaning provided in Section 9.1
"EDI Services Commission" has the meaning provided in Exhibit
11.1
"Effective Date" has the meaning provided in the preamble
hereto.
"HCC Services" has the meaning provided in Section 9.2.
"Healthcare Clinical Content" means (i) any clinical content
derived from any Person whose primary business involves the provision of
healthcare information on the internet substantially similar to healthcare
information on any Medscape Website, or (ii) any clinical content that is
substantially similar to healthcare information offered on any Medscape Website.
"Independent Auditor" has the meaning provided in Section
11.4.
"Intellect Database" has the meaning provided in Section
2.1(a).
"Intellect License" has the meaning provided in Section
2.1(a).
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"Jointly Developed Products" has the meaning provided in
Section 6.1(a) below.
"Losses" has the meaning provided in Section 15.3.
"LYTEC," "LYTEC 99," and "LYTEC 99 Specifications" have the
respective meanings provided in Section 3.1.
"LYTEC 99 Exclusivity Period" has the meaning provided in
Section 3.2(c).
"LYTEC/Web" and "LYTEC/Web Specifications" have the respective
meanings provided in Section 4.1.
"LYTEC/Web Exclusivity Period" has the meaning provided in
Section 4.2(b).
"Medscape" has the meaning provided in the preamble hereto.
"Medscape Content" means Medscape's proprietary data and
content, including text and visual material regarding itself, Medscape products,
services, pricing, Medscape Trademarks, and any conditions of use (including
proprietary notices).
"Medscape Materials" has the meaning provided in Section 12.2.
"Medscape Reporting Period" has the meaning provided in
Section 11.3.
"Medscape Website" means any website now or hereafter owned or
operated by Medscape, including the website currently located at
xxx.xxxxxxxx.xxx.
"NDC" has the meaning provided in the preamble hereto.
"NDC Distribution Commissions" has the meaning provided in
Exhibit 11.1.
"NDC Healthcare Products" means, collectively, LYTEC 99,
LYTEC/Web and the Other NDC Products, or any of them.
"NDCHIS" has the meaning provided in Section 15.1(b).
"NDC Materials" has the meaning provided in Section 12.1.
"NDC Reporting Period" has the meaning provided in Section
11.5.
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"Notified Party" has the respective meanings provided in
Section 9.1 and Section 9.2.
"Offering Party" has the respective meanings provided in
Section 9.1 and Section 9.2.
"Other NDC Products" has the meaning provided in Section 5.1.
"Party" and "Parties" have the respective meanings provided in
the preamble hereto.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, trust, business association or other
entity, including any governmental entity.
"Products" has the meaning provided in Section 7.1.
"R&D Pipeline Information" has the meaning provided in Section
6.1(c).
"Services" has the meaning provided in Section 7.1.
"Shared Materials" has the meaning provided in Section 12.3.
"Shares" has the meaning provided in the Stock Purchase
Agreement.
"Specifications" means, collectively, (i) the LYTEC 99
Specifications, (ii) the LYTEC/Web Specifications, (iii) any other
specifications agreed by the Parties pursuant to this Agreement as to a product
or service to be developed hereunder, and (iv) as the context requires, any of
them.
"Stock Purchase Agreement" means that certain Stock Purchase
Agreement, dated as of the date hereof, between Medscape and NDC, as the same is
in effect from time to time.
"Term" has the meaning provided in Section 16.1.
"Trademarks" means, collectively, trademarks, service marks,
trade names, logos and other similar proprietary rights, and as the context
requires, any of them.
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ARTICLE II
NDC INTELLECT DATABASE
Section 2.1 (a) Intellect Database License Grant. Subject to
the terms and conditions of this Agreement, NDC grants to Medscape during the
Term a non-exclusive, perpetual, fully paid, non-assessable license (the
"Intellect License") to access (via internet and/or other means), to use, and to
execute only for Medscape's and its wholly-owned subsidiaries' internal purposes
(and not for public display), all the information and data embodied in the
elements of NDC's Intellect Q&A database described on Exhibit 2.1(a)-1 (as such
information and data may be enhanced, updated, modified or corrected from time
to time, the "Intellect Database"). Medscape's use of the Intellect Database
shall be subject to the terms and conditions of the AMA license agreement
attached hereto as Exhibit 2.1(a)-2, which Medscape shall, subject to Section
2.1(f) below, execute and deliver to NDC contemporaneously with the execution of
this Agreement (the "AMA Sublicense"). Medscape shall be responsible for all of
its telecommunications charges associated with Medscape's access to the
Intellect Data via the internet or other means.
(b) Scope of License. The Intellect License does not include,
and Medscape shall not have the right of access to information and data embodied
in the Intellect Database which pertains to territories, locations, activities,
products or individuals outside of the United States of America, unless such
information and data is subsequently licensed by NDC to Medscape.
(c) Update Services NDC will update the repository for the
Intellect Database on a monthly basis. NDC will advise Medscape of the date on
which such periodic updates customarily occur, and whether the Intellect
Database will at any time become unavailable for any extended period as a result
of such updates or otherwise.
(d) Cooperation; New Market Research Products. During the
Term, NDC and Medscape agree to work together and cooperate in good faith to
identify and develop new market research products that combine Medscape's
database information and the Intellect Database. The development of any such
products shall be subject to the Parties' agreement as to Specifications as
provided in Article VIII and as to intellectual property rights as provided in
Article XII.
(e) Updates, Modifications; Copying; Corrections. During the
Term, Medscape shall be entitled to receive and/or have access to the most
current version or compilation of the Intellect Database which NDC has available
and uses for its own internal purposes, and has the right to use the same
pursuant to the terms of Section 2.1(a). Medscape may not copy the Intellect
Database except as necessary to effectuate its license under Section 2.1(a), or
for maintenance, backup, test and disaster recovery
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purposes. If, at any time during the Term, the Intellect Database (or the media
on which it is contained) (x) fails through no fault of Medscape to perform in a
reasonably effective and consistent manner, or (y) is found to contain any
material error, bug, virus or other material defect, then in either case, NDC
will correct such failure to perform, material error, bug, virus or other
material defect at no charge to Medscape or, if unable to do so, within
forty-five (45) days, will refund to Medscape a pro-rata portion of the
Intellect License Fee (such proration to be based on the Initial Term).
(f) Approval for AMA Sublicense. The Parties recognize that,
pursuant to the terms of the AMA License, the consent of the American Medical
Association ("AMA") may be required in connection with, and as a condition to
the effectiveness of, the AMA Sublicense. Promptly upon execution hereof, NDC
shall exercise (or cause its Affiliates to exercise) best efforts to obtain any
such consent, which consent shall, in all events, be sufficient, in Medscape's
sole and absolute discretion, to secure the scope of use or uses of the AMA-PPD
(as defined in the AMA Sublicense) required by Medscape. In the event that any
consent required by the AMA as a condition to the effectiveness of the AMA
Sublicense cannot be or is not obtained by July 26, 1999, or such consent is not
sufficient, in Medscape's sole and absolute discretion, to secure the scope of
use or uses which it requires, then the provisions of Section 1(b) of Exhibit
11.1 shall be applicable.
ARTICLE III.
LYTEC 99
Section 3.1 LYTEC 99. NDC will develop a new version of its
proprietary LYTEC physician practice management software (the existing software
(currently marketed as "Lytec Medical 98(TM)") is referred to as "LYTEC" in this
Agreement, and the new version thereof referred to as "LYTEC 99") that will
include Medscape Website integration capability developed in accordance with
specifications and a project timetable to be mutually developed and agreed by
the Parties (the "LYTEC 99 Specifications") by no later than August 1, 1999.
Section 3.2 LYTEC 99 Specifications and Terms. Unless NDC and
Medscape otherwise agree, the following terms shall be applicable to LYTEC 99:
(a) Release Date. LYTEC 99 will be ready for full commercial release by no
later than September 30, 1999;
(b) Integration of Medscape. LYTEC 99 will include, and the LYTEC 99
Specifications will specify, an integrated web browser function, a
direct access function (via hotlink) to a Medscape Website, and an
optional internet service provider service.
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(c) Exclusivity. From the Effective Date until September 30, 2000 (the
"LYTEC 99 Exclusivity Period"), NDC agrees that the Medscape Website
designated by Medscape will be the sole and exclusive website providing
Healthcare Clinical Content integrated into LYTEC 99. During the LYTEC
99 Exclusivity Period, NDC covenants that it will not integrate (or
permit, or enter into any discussions concerning, the integration of)
any Healthcare Clinical Content into LYTEC 99 other than the content
contained in the relevant Medscape Website designated by Medscape.
(d) Right of First Negotiation. NDC hereby grants Medscape the exclusive
right of first negotiation to extend the LYTEC 99 Exclusivity Period on
mutually agreeable terms. If Medscape wishes to extend the LYTEC
Exclusivity Period, it shall give notice to NDC to this effect not less
than one hundred and twenty (120) days prior to the end of the LYTEC 99
Exclusivity Period. Within a reasonable time after delivery of such
notice, the Parties shall in good faith meet or discuss as often as is
necessary to reach mutual agreement on specific extension terms. If no
agreement can be reached following good faith negotiations on or before
the end of the LYTEC 99 Exclusivity Period, either Party may elect by
written notice to the other to discontinue further discussions. From
the date on which Medscape gives notice of its intent to extend, and
until such time as the earlier of either the date on which the original
LYTEC Exclusivity Period Ends or the date on which good faith
negotiations between the Parties are discontinued as aforesaid, NDC
covenants and agrees that it shall not enter into any discussions with,
or make any offer to, any third party with respect to the integration
of any website providing Healthcare Clinical Content into LYTEC 99. If
Medscape does not give notice to NDC of its desire to extend the LYTEC
99 Exclusivity Period Agreement at least ninety (90) days prior to the
end of the LYTEC 99 Exclusivity Period, Medscape will be deemed to have
waived its right of first negotiation under this Section 3.2(d), and
NDC shall be free to negotiate with third parties.
Section 3.3 License. For purposes of integrating the relevant
Medscape Website in LYTEC 99, Medscape grants to NDC during the Term a
non-exclusive, royalty free, fully paid and non-assessable license, to use,
execute and display, and/or otherwise to incorporate and display within LYTEC
99, such of Medscape's computer programs (such as Java applets), Trademarks,
designs, content and other intellectual property as Medscape may deem necessary
or appropriate to fully effect the integration of such Medscape Website into
LYTEC 99. The foregoing license shall be subject to the other terms of this
Agreement and such other terms as may be agreed by the Parties in the LYTEC 99
Specifications.
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ARTICLE IV
LYTEC/WEB.
Section 4.1 LYTEC/Web. NDC intends to develop a fully
web-enabled version of LYTEC (hereinafter referred to as "LYTEC/Web") that will
include Medscape Website integration capability developed in accordance with
specifications and a project timetable to be mutually developed and agreed by
the Parties (the "LYTEC/Web Specifications").
Section 4.2 LYTEC/Web Specifications and Terms. If LYTEC/Web
is developed by NDC, the following terms shall be applicable to LYTEC/Web unless
NDC and Medscape otherwise agree:
(a) Specifications. LYTEC/Web will include, and the LYTEC/Web
Specifications will specify: (i) a direct access function (via hotlink)
to a Medscape Website designated by Medscape; (ii) in-context,
integrated links to such Medscape Website from within the point-of-care
clinical features of LYTEC/Web (e.g., relevant Medscape content will be
automatically displayed when users insert ICD-9 codes); (iii)
navigational features, such as hypertext links, permitting direct
access to LYTEC/Web from within such Medscape Website; and (iv) a
feature permitting individual users to select a Medscape Website
specialty page.
(b) Exclusivity. Subject to Section 4.2(c) below, from the Effective Date
and until September 30, 2000 (the "LYTEC/Web Exclusivity Period"), NDC
agrees that the Medscape Website which Medscape designates will be the
sole and exclusive website providing Healthcare Clinical Content
integrated into LYTEC/Web. During the LYTEC/Web Exclusivity Period, NDC
covenants that it will not integrate (or permit, or enter into any
discussions concerning, the integration of) any website providing
Healthcare Clinical Content into LYTEC/Web other than such Medscape
Website.
(c) Right of First Negotiation. NDC hereby grants Medscape the exclusive
right of first negotiation to extend the LYTEC/Web Exclusivity Period
on mutually agreeable terms. If Medscape wishes to extend the LYTEC/Web
Exclusivity Period, it shall give notice to NDC to this effect not less
than one hundred twenty (120) days prior to the end of the LYTEC/Web
Exclusivity Period. Within a reasonable time after delivery of such
notice, the Parties shall in good faith meet or discuss as often as is
necessary to reach mutual agreement on specific extension terms. If no
agreement can be reached following good faith negotiations on or before
the end of the LYTEC/Web Exclusivity Period, either Party may elect by
written notice to the other to discontinue further discussions. From
the date on which Medscape gives notice of its intent to extend, and
until such time as the earlier of either the date on which the original
LYTEC/Web Exclusivity Period Ends or the date on which good
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faith negotiations between the Parties are discontinued as aforesaid,
NDC covenants and agrees that it shall not enter into any discussions
with, or make any offer to, any third party with respect to the
integration of any website providing Healthcare Clinical Content into
LYTEC/Web. If Medscape does not give notice to NDC of its desire to
extend the LYTEC/Web Exclusivity Period at least ninety (90) days prior
to the end of the LYTEC/Web Exclusivity Period, Medscape will be deemed
to have waived its right of first negotiation under this Section
4.2(c), and NDC shall be free to negotiate with third parties.
Section 4.3 License. If LYTEC/Web is developed by NDC, for
purposes of integrating a Medscape Website to be designated by Medscape in
LYTEC/Web, Medscape agrees that it shall grant to NDC during the Term a
non-exclusive, royalty free, fully paid and non-assessable license to use,
execute and display, and/or otherwise to incorporate and display within
LYTEC/Web, such of Medscape's computer programs (such as Java applets),
Trademarks, designs, content and other intellectual property as Medscape may
deem necessary or appropriate to fully effect the integration of such designated
Medscape Website into LYTEC/Web. The foregoing license shall be subject to the
other terms of this Agreement and such other terms as may be agreed by the
Parties in the LYTEC/Web Specifications.
ARTICLE V
WEB-ENABLING OF OTHER NDC PRODUCTS.
Section 5.1 Web-Enabling of Other NDC Products. NDC also
intends to develop (or has already developed) and make available separately, or
in bundled packages, web-enabled versions of its products known as NDC Connect,
NDC Assist, Intellect Q&A, Practice Analyzer, Medication Manager, and certain
credit card services (such products as so enabled, collectively, the "Other NDC
Products"). Subject to the Parties' agreement as to Specifications pursuant to
Article VIII, and the other terms and conditions of this Agreement, the Parties
intend that any web-enabled Other NDC Products may be modified to include an
integrated function permitting users thereof to directly access a Medscape
Website designated by Medscape, and that such Medscape Website may include
navigational features, such as hypertext links, permitting direct access to
Other NDC Products.
ARTICLE VI
JOINTLY DEVELOPED PRODUCTS.
Section 6.1 Jointly Developed Products. (a) General Terms.
Subject to Article VIII and the other terms and conditions of this Agreement,
NDC and Medscape intend and agree to work together and cooperate in good faith
during the Term to jointly
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identify market opportunities and, based on such opportunities, if any, to
jointly develop, market and sell new products (collectively, the "Jointly
Developed Products"). The Parties will agree at the time of development of any
Jointly Developed Products on appropriate compensation levels, ownership
interests, and licenses for each Jointly Developed Product. Jointly Developed
Products may include (x) new, web-enabled versions of products and applications
that will be integrated with various features and functions of a Medscape
Website which Medscape designates; (y) new products and applications targeted at
the consumer market; and (z) database and data management projects and products
targeted at pharmaceutical manufacturers. The Jointly Developed Products may
include products that integrate Medscape content and databases and NDC products
and databases.
(b) Consumer Products. Jointly Developed Projects for the
consumer audience may include NDC's prescription adherence/compliance tool
called Care Alert, which the Parties acknowledge will initially target consumers
and the prescription refill market. If the Parties mutually agree, Care Alert
may also target the physicians market by leveraging other NDC and Medscape tools
and services. The Parties further acknowledge that the consumer-based Care Alert
product is currently in prototype and is expected to launch in the third quarter
of 1999.
(c) R&D Pipeline Associated with Clinical Trials. NDC agrees
to license to Medscape, and Medscape shall have the right to incorporate, R&D
Pipeline Information for use within a Medscape Website designated by Medscape,
and/or as part of a broader consumer/physician clinical trials product, possibly
in partnership with third-party clinical research organizations involved in
providing clinical trials support, services and products. As used herein, "R&D
Pipeline Information" includes information about the therapeutic use, product
name, generic name, company name, stage of development and source abstracts of,
and NDC's comments regarding, drugs in development, as more particularly
described on Exhibit 6.1(c).
ARTICLE VII
OPERATING GUIDELINES AND DEDICATED RESOURCES
APPLICABLE TO ALL PRODUCTS AND SERVICES
Section 7.1 Operating Guidelines and Dedicated Resources. The
Parties agree that the following general principles and operating guidelines
will be applicable to each of the products and services described in this
Agreement to be developed or in development by NDC, Medscape or the Parties
jointly (including LYTEC 99, LYTEC/Web, and any market research product relating
to the Intellect Database) (collectively, the "Products" and "Services"): (a)
each of the Parties will assign at least one project manager to the development
and deployment of Products and Services; (b) joint senior level management
reviews involving representatives from both Parties will be held at least
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monthly during the Term; and (c) each Party shall provide personnel and
resources at its sole cost and expense unless otherwise agreed.
ARTICLE VIII
DEVELOPMENT OF SPECIFICATIONS;
ADDITIONAL TERMS APPLICABLE TO ALL
PRODUCTS AND SERVICES.
Section 8.1 Development of Product Specifications; Agreement
as to Terms. Each Product or Service to be jointly developed pursuant to this
Agreement shall be based upon detailed, written Specifications to be mutually
agreed by the Parties, as evidenced by written agreements executed by authorized
officers of the Parties. Upon such agreement, such Specifications shall be
deemed appended to and shall form part of this Agreement, and shall be binding
on the Parties for all purposes hereof. Unless and until the relevant
Specifications for a proposed Product or Service have been agreed by the
Parties, neither Medscape nor NDC shall have any obligation under this Agreement
to undertake the development of, or otherwise incur any cost or liability in
connection with, any such proposed Product or Service. The Specifications for
each such Product or Service shall include, at a minimum, provision for the
following, and shall be in addition to any other specific terms expressly
provided with respect to such Product or Service in this Agreement:
(a) Business Plan. An initial business plan establishing, among other
things, projected funding requirements, allocation of development costs
and other expenses, schedule for product development, production and
initial product launch, and projected pricing, sales volume and revenue
for such Product or Service;
(b) Technical Specifications. A summary of the technical specifications for
such Product or Service, including the architectural and graphical
design components thereof (including specifications for any Medscape or
third party components and integration requirements); and guidelines
and specifications, based upon generally accepted technical standards
applicable to the computer program and internet industry, pertaining to
acceptance testing and performance criteria for the Product or Service;
(c) Marketing and Support Plan. Subject to the general covenants and
agreements of the Parties set forth in Article X (Marketing), a
marketing and support plan for such Product or Service;
(d) Distribution, Licensing and Exclusivity. Distribution, licensing and
exclusivity terms applicable to such Product or Service, including
distribution territories, it being
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acknowledged, however, that the initial distribution territory for the
Products and Services now contemplated by the Parties will be North
America;
(e) Branding. Subject to the general covenants and agreements of the
Parties set forth in Article XIII (Branding), the terms on which such
Product or Service will be branded;
(f) Economic Rights. The respective economic rights of, or compensation due
to, the Parties in connection with the sale, licensing or other
distribution of such Product or Service, which may be based, without
limitation, on principles of revenue sharing, royalty, or bounty;
(g) Rights on Termination; Restrictions. The respective ownership interests
of the Parties in the relevant Product or Service (to the extent
applicable), and the respective rights of the Parties in and to such
Product or Service, both during the Term and upon any termination or
other expiration of this Agreement, which rights may be subject to
reasonable restrictions on each Party's right to sell, license or
assign its respective interest in such Product or Service to third
parties, or reciprocal rights of forced sale or co-sale; and
(h) Licensing of Intellectual Property or Other Proprietary Rights. To the
extent the intellectual property or other proprietary rights of a Party
are required to be used in connection with any such Product or Service
owned or to be owned by the other Party (for example, the use of
Medscape's Trademarks and content when the same are required to be
integrated in any of NDC's proprietary computer programs), the terms on
which such Party's intellectual property or other proprietary rights
will be licensed to the other Party.
In the event of any conflict between the terms of this Agreement and the terms
of any Specifications subsequently agreed by the Parties, the terms of the
Specifications shall be controlling.
ARTICLE IX
PREFERRED PARTNER STATUS
Section 9.1 Provision by NDC of Electronic Data Interchange
Services. Medscape hereby grants to NDC, during the Term, the right of first
negotiation to provide, on a product-by-product basis, the clinical data
interchange and data management services ("EDI Services") to Medscape in the
United States. If, at any time during the Term, Medscape (in this capacity and
for this purpose, Medscape is referred to as an "Offering Party") requires EDI
Services in the United States from a third party, it shall provide written
notice to NDC (in this capacity and for this purpose, NDC is referred to as
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a "Notified Party"). Medscape's notice to NDC shall include a statement that NDC
is being offered the right to provide EDI Services to Medscape in the United
States, and setting forth the proposed terms and conditions of NDC's provision
thereof, including as relates to timing, pricing, content, quality and feature
requirements. The provisions of Section 9.3 shall thereafter be applicable.
Section 9.2 Provision by Medscape of Clinical Content and
Information Services. NDC hereby grants to Medscape during the Term the right of
first negotiation to provide Healthcare Clinical Content ("HCC Services") to NDC
Healthcare Products in the United States. If, at any time during the Term, NDC
(in this capacity and for this purpose, NDC is referred to as an "Offering
Party") requires HCC Services with respect to one or more of its Healthcare
Products in the United States from a third party, it shall provide written
notice to Medscape (in this capacity, and for this purpose, Medscape is referred
to as a "Notified Party"). NDC's notice shall include a statement that Medscape
is being offered the right to provide HCC Services with respect to the relevant
NDC Healthcare Product(s) in the United States, and setting forth the proposed
terms and conditions of Medscape's provision thereof, including as relates to
timing, pricing, content, quality and feature requirements. The provisions of
Section 9.3 shall thereafter be applicable.
Section 9.3 Terms Applicable to Medscape's and NDC's
Respective Rights of First Negotiation. Within a reasonable time after delivery
of the Offering Party's notice, the Parties shall enter into good faith
discussions for a period not to exceed thirty (30) days to determine whether the
Notified Party is able to meet the proposed terms and conditions specified in
the Offering Party's notice. If the Notified Party determines that it is unable
to provide the services requested in the Offering Party's notice on all of the
terms and conditions specified in the Offering Party's notice, or the Parties
cannot otherwise agree on different or modified terms prior to the end of such
thirty (30) day period, then either Party may elect by written notice to the
other to discontinue further discussions. From the date on which the Offering
Party gives notice to the Notified Party of the Offering Party's proposed terms
and conditions until the end of the foregoing thirty (30) day period (or, if
earlier, the date on which either Party gives notice that discussions are to be
discontinued), the Offering Party covenants and agrees that it shall not enter
into any discussions with, or make any offer to, any third party with respect to
the provision of the services specified in the Offering Party's notice. If no
agreement can be reached by the Parties by the end of the foregoing thirty (30)
day period, the Offering Party shall have the right, without any further
obligation to the Notified Party hereunder, to seek the services of and to
retain any third-party provider of the services specified in the Offering
Party's notice.
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ARTICLE X
MARKETING, PROMOTION, SUPPORT.
Section 10.1 General Marketing, Promotional and Support
Responsibilities. During the Term, each of the Parties covenants and agrees to
exercise its reasonable, good faith commercial efforts to market and promote the
products and services of the other, as well as the Products and/or Services
developed or to be developed pursuant to this Agreement. The Parties further
covenant and agree that they shall cooperate in good faith to develop and agree
upon a detailed, coordinated marketing and support plan for each of such
Products or Services, which shall include a designation of marketing, sales,
installation, and customer support responsibilities. Unless otherwise agreed by
the Parties, all costs and expenses relating to a Party's marketing and
promotional responsibilities under this Agreement shall be borne exclusively by
such Party. Without limiting the generality of the foregoing, the Parties agree
that, during the term:
(a) Medscape shall market and promote LYTEC 99, LYTEC/Web and NDC Connect
to its registered physician members with direct links from Medscape
Websites to NDC's demonstration and processing website, and NDC shall
market and promote LYTEC 99 and LYTEC/Web to all 15,000 of LYTEC's
current licensed sites (which sites support approximately 30,000
users);
(b) NDC shall market and promote Medscape and its products and services to
its existing customer base (including NDC's network of pharmacists and
third-party value-added resellers), and shall exercise good faith,
commercially reasonable efforts to promote Medscape's proprietary
clinical content to other distributors of physician practice management
software which market NDC's EDI Services; and
(c) NDC and Medscape will jointly market LYTEC 00, XXXXX/Xxx, XXX Xxxxxxx,
XXX Assist, Medscape and an internet service provider to both Parties'
prospective customers.
Section 10.2 Agreement as to Specific Marketing Plans. In
furtherance of the foregoing Section 10.1, the Parties shall agree upon
marketing plans at the beginning of each year of the Term, including provisions
as to timing, budget, and scope, which plans shall upon agreement by the Parties
be deemed incorporated in this Agreement by reference. On or before the date
which is thirty (30) days after the Effective Date, the Parties shall cooperate
in good faith and shall agree upon a marketing plan for the initial one-year
period following the Effective Date.
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ARTICLE XI
FEES; NDC DISTRIBUTION COMMISSION; REPORTING.
Section 11.1 Fees; Payments. The Parties acknowledge and agree
that the payments, commissions, fees and credits set out in Exhibit 11.1
attached hereto shall be applicable to the transactions contemplated in this
Agreement and the relationships being established hereby and by the Stock
Purchase Agreement.
Section 11.2 Payment Terms; Taxes. All payments due by a Party
to the other Party under this Article XI are stated and payable in U.S. dollars
and shall be paid to such account and using such means as the Parties shall from
time to time notify each other in writing. Amounts subject to NDC Distribution
Commissions and received by Medscape during each Medscape Reporting Period shall
be paid to NDC within thirty (30) days after the end of such Medscape Reporting
Period, but only to the extent that amounts due and owing to NDC in any such
Medscape Reporting Period actually exceed the amount of any outstanding credit
allocable to the advance payment of NDC Distribution Commissions as provided in
Exhibit 11.1. Each such payment shall be accompanied by a copy of the report
specified in Section 11.3. Amounts subject to EDI Services Commissions and
received by NDC during each NDC Reporting Period shall be paid to NDC within
thirty (30) days after the end of such NDC Reporting Period. Each such payment
shall be accompanied by a copy of the report specified in Section 11.5.
Section 11.3 Reporting by Medscape for purposes of Calculating
NDC Distribution Commissions. Within thirty (30) days after the end of each
calendar quarter during the Term (each such quarterly period a "Medscape
Reporting Period" with the first such Medscape Reporting Period to end on the
last day of the first full calendar quarter to occur after any amounts subject
to NDC Distribution Commissions are first received by Medscape), Medscape shall
send a statement to NDC summarizing, and certifying as to, the information used
by Medscape to calculate the NDC Distribution Commissions payable to NDC for
such Medscape Reporting Period in order to confirm the actual amounts received
or projected to be received by Medscape during the applicable Medscape Reporting
Period for each category in respect of which an NDC Distribution Commission is
payable as provided in Exhibit 11.1.
Section 11.4 Audit Rights. Medscape will maintain for at least
three (3) years its records, contracts and accounts relating to each transaction
in respect of which an NDC Distribution Commission is payable by Medscape
hereunder, and will permit examination not more frequently than once per
calendar year of that information upon reasonable request and during normal
business hours by NDC and/or an independent auditor reasonably acceptable to
both Parties, who shall agree to be bound by the confidentiality obligations set
forth in Article XIV (an "Independent Auditor"). In addition, NDC shall be
entitled annually to appoint an Independent Auditor to audit the books of
account of Medscape, at NDC's expense, during normal business hours, with at
least two weeks' prior
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notice. If during the course of such audit, it is discovered that Medscape has
underpaid NDC by an amount in excess of five percent (5%) of the amount
determined to be due for the audited period, then the cost of such audit shall
be borne by Medscape. Furthermore, any error discovered by the Independent
Auditor shall be promptly remedied by Medscape after receipt of notice from NDC.
Section 11.5 Reporting by NDC for purposes of Calculating EDI
Services Commissions. Within thirty (30) days after the end of each calendar
quarter during the Term (each such quarterly period an "NDC Reporting Period"
with the first such NDC Reporting Period to end on the last day of the first
full calendar quarter to occur after any amounts subject to EDI Services
Distribution Commissions are first received by NDC), NDC shall send a statement
to Medscape summarizing, and certifying as to, the information used by NDC to
calculate the EDI Services Commissions payable to Medscape for such NDC
Reporting Period in order to confirm the actual amounts received or projected to
be received by NDC during the applicable NDC Reporting Period for each category
in respect of which an EDI Services Commission is payable as provided in Exhibit
11.1.
Section 11.6 Audit Rights. NDC will maintain for at least
three (3) years its records, contracts and accounts relating to each transaction
in respect of which an EDI Services Commission is payable by NDC hereunder, and
will permit examination not more frequently than once per calendar year of that
information upon reasonable request and during normal business hours by Medscape
and/or an Independent Auditor. In addition, Medscape shall be entitled annually
to appoint an Independent Auditor to audit the books of account of NDC, at
Medscape's expense, during normal business hours, with at least two weeks' prior
notice. If during the course of such audit, it is discovered that NDC has
underpaid Medscape by an amount in excess of five percent (5%) of the amount
determined to be due for the audited period, then the cost of such audit shall
be borne by NDC. Furthermore, any error discovered by the Independent Auditor
shall be promptly remedied by NDC after receipt of notice from Medscape.
ARTICLE XII
INTELLECTUAL PROPERTY RIGHTS
Section 12.1 NDC Owned Materials. NDC owns all copyright and
other proprietary rights in its intellectual property (including the Intellect
Database, LYTEC, LYTEC 99 and LYTEC/WEB, all other extensions and derivative
works thereof created solely by NDC), all of the other materials NDC licenses or
otherwise supplies or makes available to Medscape under this Agreement,
including all NDC Healthcare Products (but subject to Medscape's rights to any
Medscape Materials integrated therein), other computer programs, and all of
NDC's content and its Trademarks (including as may be integrated in any Medscape
Website), (the foregoing, collectively, the "NDC Materials").
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Subject to the grants of license and assignments of ownership rights made
pursuant to this Agreement, NDC retains sole and exclusive ownership of all
right, title and interest in and to the NDC Materials and all copies thereof.
Section 12.2 Medscape-Owned Materials. Medscape owns all
copyright and other proprietary rights in all of its intellectual property and
all of the materials Medscape licenses or otherwise supplies or makes available
to NDC under this Agreement, including all Medscape Websites, all computer
programs, all Medscape Content, Medscape's Trademarks (including as may be
integrated in LYTEC 99, LYTEC/WEB and any NDC Healthcare Products), and customer
and professional data (all of the foregoing, collectively, the "Medscape
Materials"). Subject to the grants of license and assignments of ownership
rights made pursuant to this Agreement, Medscape retains sole and exclusive
ownership of all right, title and interest in and to the Medscape Materials and
all copies thereof
Section 12.3 Shared Materials. Each Party shall contribute
materials pursuant to this Agreement which are to be used jointly throughout the
Term (collectively, the "Shared Materials"). Except as provided to the contrary
in Section 12.4 as to Jointly Developed Products or as otherwise agreed by the
Parties in any applicable instance (and then only to the extent agreed by the
Parties), each Party retains ownership of whatever material that Party
contributed to the Shared Materials pursuant to this Agreement both during the
Term and thereafter, and each Party may re-implement or otherwise use its
respective portion of the Shared Material both during and after the Term. Under
no circumstances will either Party use after the Term any portion of the Shared
Materials that the other Party contributed to the Shared Materials.
Section 12.4 Ownership of Jointly Developed Product; Related
Rights. Medscape and NDC shall agree in advance as to ownership of Jointly
Developed Products pursuant to Section 6.1. The Parties agree to assist each
other in making such filings, and preparing such information, as may be required
to register and protect any intellectual property rights in the Jointly
Developed Products.
Section 12.5 Trademarks and Uniform Resource Locators
("URLs"). Medscape owns all rights in its Trademarks and URLs, and NDC owns all
rights in its Trademarks and URLs.
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ARTICLE XIII
TRADEMARKS; COPYRIGHT NOTICES; BRANDING; CONTENT
Section 13.1 Branding of Joint Products. The Parties intend
and agree that NDC and Medscape will each receive prominent branding for the
Jointly Developed Products.
Section 13.2 Incorporation of Marks. Medscape and NDC shall
incorporate the other's Trademarks as they may mutually agree in good faith,
provided that each of Medscape and NDC shall comply with such restrictions and
requirements as may be notified to it from time to time by the other with
respect to the use of the same. Neither Party shall incorporate the other's
Trademarks without first submitting a sample of the use to the Trademark owner
and obtaining written consent.
Section 13.3 Mutual Covenants as to Marks and Notices. NDC
covenants and agrees that it shall not knowingly delete any Trademarks or
copyright notices of Medscape or any of its Affiliates, or otherwise use without
Medscape's consent any of Medscape's or its Affiliates' Trademarks or other
identifiers in any manner other than as is expressly provided by this Agreement.
Medscape covenants and agrees that it shall not knowingly delete any Trademarks
or copyright notices of NDC or its Affiliates, or otherwise use without NDC's
consent any of NDC's or its Affiliates' Trademarks or other identifiers in any
manner other than as is expressly provided by this Agreement. If either Party
for any reason deletes or causes the deletion of any Trademark or copyright
notice of the other Party or any of its Affiliates, such Party shall, upon
notice by the affected Party, promptly take such reasonable remedial actions as
the affected Party may request.
Section 13.4 Editorial and Artistic Control. Medscape will
have exclusive editorial and artistic control over the selection of any of its
intellectual property or other proprietary materials (including Trademarks and
Medscape Content) integrated or appearing in any of the Products or Services
developed or to be developed under this Agreement, and the determination of the
design and look and feel of all visual elements relating to such proprietary
materials (including any in-context, integrated links to any Medscape Website
from within any such Products). NDC will have exclusive editorial and artistic
control over the selection of any of its intellectual property and other
proprietary materials (including Trademarks and content) integrated or appearing
in any of the Products or Services developed or to be developed under this
Agreement, and except as provided in the immediately following sentence and the
provisos thereto, the determination of the design and look and feel of all
visual elements relating to such proprietary materials. Medscape shall have the
right, in its discretion, to determine the visual elements, the placement, and
the design and look and feel, of such of NDC's proprietary materials as may
appear or be integrated in any Medscape Website, provided that Medscape shall
have no right to request the alteration or other modification of any of NDC's
Trademarks,
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and provided further, that NDC shall have the right to approve any such
determination (which shall not be unreasonably withheld or delayed).
ARTICLE XIV
CONFIDENTIALITY; NON-COMPETE
Section 14.1 Confidentiality Obligations. Each Party
acknowledges that it and its subcontractors (if any) have had prior to the
Effective Date, and in performing its obligations under this Agreement, it and
its subcontractors (if any) will have access to or be directly or indirectly
exposed to Confidential Information. Except as may be required to comply with
any valid legal requirement, each Party covenants and agrees that it shall hold
confidential all Confidential Information and shall not use or disclose such
Confidential Information without the express consent of the disclosing Party.
Each Party shall take reasonable measures and efforts to provide protection for
the disclosing Party's Confidential Information, including measures at least as
strict as those the receiving Party uses to protect its own Confidential
Information. Such measures will include requiring employees and any independent
contractors to sign a non-disclosure agreement before obtaining access to the
disclosing Party's Confidential Information. The confidentiality obligations of
the Parties shall survive any termination or other expiration of this Agreement.
Section 14.2 Confidential Information. "Confidential
Information" means information in the possession or under the control of a Party
relating to a Party's technical, marketing, product and business affairs,
including customer, prospect, price, and other proprietary and trade secret
information, whether oral, graphic, written, electronic or in machine readable
form, and includes all computer programs (and source code therefor).
Confidential Information shall also include all proposals, plans, programs,
analyses, compilations, forecasts, studies or other documents prepared by a
Party or by them jointly relating to the subject matter of this Agreement
(including as relates to product development and deployment). In the case of
Medscape, Confidential Information includes the Medscape Content, member
information and other customer and user information, including any information
pertaining to usage of Medscape Websites. Confidential Information does not
include information which (A) was known to the receiving Party or in the public
domain before disclosure; (B) becomes part of the public domain after disclosure
by a publication or other means except by a breach of this Agreement by the
receiving Party, (C) was received from a third party under no duty or obligation
of confidentiality to the disclosing Party, or (D) was independently developed
by the receiving Party without reference to Confidential Information. Upon
termination or other expiration of this Agreement, all Confidential Information
disclosed by a Party to a receiving Party will be returned to the disclosing
Party or, upon the request of the disclosing Party, will be promptly destroyed
and certified as destroyed by the receiving Party. The disposition of
Confidential Information in which both of the Parties have proprietary or other
rights shall
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be determined by the Parties in good faith upon termination or expiration of
this Agreement.
Section 14.3 Exclusivity; Non-Competition Covenants as to NDC.
NDC hereby agrees for itself and on behalf of its Affiliates, that it shall not
independently or in connection with any other Person, directly or indirectly
until the end of the Term integrate NDC Connect or NDC Assist into any
Healtheon/WebMD service.
Section 14.4 Exclusivity; Non-Competition Covenants as to
Medscape. Medscape hereby agrees for itself and on behalf of its Affiliates,
that it shall not independently or in connection with any other Person, directly
or indirectly until the end of the Term:
(i) integrate any of Medscape's proprietary content in any Quintiles/Envoy
service (other than Quintiles business as a clinical research
organization, providing clinical trials services, goods, and support to
the pharmaceutical industry and other organizations involved medical
research) or in IMS Health; or
(ii) integrate Healtheon/WebMD EDI services into Medscape Web Sites.
Notwithstanding the foregoing, Medscape retains the right to license
its content to any other third party.
Section 14.5 Acknowledgment; Construction; Severability. Each
Party acknowledges that the other's business, insofar as its relates to
provision of content and services over the World Wide Web of the internet, is
global in scope, and that, accordingly, competition with such other Party's
business is possible from nearly every part of the world. Each Party further
acknowledges and agrees that the restrictions set forth in Section 14.3 as to
NDC and Section 14.4 as to Medscape are reasonable in scope and duration and are
necessary to protect, and to enable the other to receive the anticipated
benefits of this Agreement and the arrangements contemplated hereby. The Parties
agree that, if any of the length of time, the geographical area, the scope or
another parameter of the restrictions set forth in either or both of the
foregoing Sections 14.3 and 14.4 above is deemed to be unlawfully restrictive by
a court of competent jurisdiction, such provision shall be deemed to be amended
and shall be construed by such court to have the broadest type, scope and
duration permissible under applicable law, and if no validating construction is
possible, shall be severable from the rest of this Agreement, and the validity,
legality or enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
Section 14.6 Specific Performance. The Parties recognize that
the performance of the obligations by the Parties of their respective
obligations under this Article XIV is special, unique and extraordinary in
character. In addition to such other rights and remedies as a non-breaching
Party may have at equity or in law with respect
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to any breach of this Agreement, if a Party commits a breach of any of the
provisions of this Article XIV, the non-breaching Party shall have the right and
remedy to have such provisions specifically enforced by any court of competent
jurisdiction or to enjoin the breaching Party from performing any act being
taken by the breaching Party in violation of this Article XIV, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the non-breaching Party, its business, proprietary marks
and brands, and the goodwill associated therewith and that money damages will
not provide an adequate remedy to the non-breaching Party.
ARTICLE XV
REPRESENTATIONS, WARRANTIES, COVENANTS, AND INDEMNITIES
Section 15.1 NDC. NDC represents, warrants, and covenants (for
itself, and in the case of Section 15.1(b), for and on behalf of NDCHIS) to
Medscape as follows:
(a) NDC has full authority to enter into this Agreement, and
the person signing on behalf of NDC is authorized to sign on NDC's behalf;
(b) the license between NDC Health Information Services
(Arizona) Inc., a wholly-owned subsidiary of NDC ("NDCHIS"), and the American
Medical Association, dated as of January 1, 1998 (the "AMA License")(a true,
complete and accurate copy of which has been previously provided to Medscape) is
in full force and effect. Neither NDCHIS nor NDC is in breach or default, and
upon giving effect to the AMA Sublicense, will not be in breach or default, of
any of the material terms and conditions thereof. Upon receipt of AMA's consent
to the terms of the AMA Sublicense (if required), NDCHIS will have the right and
authority under the terms of the AMA License to sublicense its rights under the
AMA License to Medscape pursuant to the terms of the AMA Sublicense. The terms
of the AMA Sublicense do and shall comply in all respect with the terms or
conditions specified with respect thereto in the AMA License, and upon execution
of the AMA Sublicense by Medscape and NDCHIS, Medscape will be a duly authorized
sublicensee of NDCHIS, in accordance with and subject to the terms thereof and
the AMA License.
(c) NDC is the owner, or has the right to use, license,
reproduce, and distribute all materials and methodologies, including computer
programs, used, licensed or supplied by NDC to Medscape;
(d) NDC has the right to authorize Medscape to use, all
materials supplied or licensed by NDC to Medscape pursuant to this Agreement;
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(e) none of the materials that NDC supplies pursuant to this
Agreement infringes or will infringe any copyright, patent, Trademark, trade
secret or other third party proprietary right; and
(f) NDC will comply with all applicable and material federal,
state, and local laws and regulations in the performance of its obligations
under this Agreement, including laws concerning the encryption and import/export
of software products.
Section 15.2 Medscape. Medscape represents, warrants, and
covenants to NDC:
(a) Medscape has full authority to enter into this Agreement,
and the person signing on behalf of Medscape is authorized to sign on Medscape's
behalf;
(b) Medscape is the owner, or has the right to use, reproduce,
and distribute all materials and methodologies, including computer programs used
or supplied by Medscape to NDC in connection with this Agreement;
(c) Medscape has the right to authorize NDC to use all
materials supplied or licensed by Medscape to NDC pursuant to this Agreement;
(d) none of the materials that Medscape supplies to NDC
pursuant to this Agreement infringes or will infringe any copyright, patent,
Trademark, trade secret, or other third party proprietary right; and
(e) Medscape will comply will all applicable and material
federal, state and locals laws and regulations in the performance of its
obligations under this Agreement, including any applicable laws concerning the
encryption and import/export of software products.
Section 15.3 Indemnification. Each Party agrees to defend and
indemnify the other Party, its directors, officers, employees, and agents
against any claim, demand, suit, debt, liability, or costs, including reasonable
attorney's fees ("Losses"), to the extent that it is based on a claim that: (a)
constitutes a breach of the indemnifying Party's warranties, representations,
and undertakings in this Article XV; or (b) arises out of the gross negligence
or willful misconduct of the indemnifying Party in connection with this
Agreement; provided, however, that neither Party shall have any liability for
the breach of any representation or warranty, unless the aggregate of all Losses
for which the indemnifying party would, but for this proviso, be liable, exceeds
on a cumulative basis Two Hundred and Fifty Thousand Dollars ($250,000) Dollars.
Notwithstanding the foregoing:
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(x) NDC shall indemnify, defend and hold harmless Medscape for any Loss
relating to claims asserted by third parties with respect to any breach
of the representations and warranties contained in Section 15.1(a),
(b), (c), (d) and (e), regardless of whether the $250,000 threshold has
been met;
(x) Medscape shall indemnify, defend and hold harmless NDC for any Loss
relating to claims asserted by third parties with respect to any breach
of the representations and warranties contained in Section 15.2(a),
(b), (c) and (d), regardless of whether the $250,000 threshold has been
met;
(y) neither Party shall be liable to the other for Losses exceeding in the
aggregate the sum of Ten Million Dollars ($10,000,000); provided that
NDC's liability to Medscape for Losses relating to claims asserted by
third parties with respect to any breach of the representations and
warranties contained in Section 15.1(a), (b), (c), (d) and (e) shall
not be so limited, and provided further that Medscape's liability to
NDC for Losses relating to claims asserted by third parties with
respect to any breach of the representations and warranties contained
in Section 15.2(a), (b), (c) and (d) shall not be so limited.
Section 15.4 Indemnification Procedures. The Party claiming
indemnification pursuant to Section 15.3 shall notify the other Party promptly
of the claim. The indemnified Party may, at its own expense, assist in the
defense if it so chooses, provided that the indemnifying Party controls the
defense and all negotiations relative to any settlement and further provided
that any settlement intended to bind the indemnified Party is not final without
the indemnified Party's consent.
Section 15.5 Limitation of Liability. EXCEPT AS OTHERWISE
PROVIDED IN SECTION 15.3, THE CUMULATIVE LIABILITY OF EITHER PARTY FOR ALL
CLAIMS RELATING TO, ARISING UNDER, OR IN CONNECTION WITH THIS AGREEMENT, WHETHER
IN CONTRACT, TORT OR OTHERWISE, SHALL NOT EXCEED $10,000,000 (TEN MILLION UNITED
STATES DOLLARS). NEITHER PARTY SHALL IN ANY EVENT BE LIABLE TO THE OTHER FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (EVEN IF THAT
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) INCLUDING LOSS OF
REVENUE, LOSS OF DATA, OR ANTICIPATED PROFITS OR LOST BUSINESS.
ARTICLE XVI
TERM AND TERMINATION
Section 16.1 Term. This Agreement will begin on the date
signed by both of the Parties, with effect as of Effective Date and, unless
sooner terminated, shall continue until the date which is three (3) years from
the Effective Date (the "Initial Term",
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and together with any subsequent extension or renewal hereof as may be agreed by
the Parties, the "Term").
Section 16.2 Termination for Breach. Either Medscape or NDC
may terminate this Agreement on thirty (30) days' notice if the other materially
breaches any of its obligations hereunder unless the breach is cured within the
thirty (30) day period. Either Party may terminate this Agreement or revert any
of the licenses granted to the other Party hereunder effective immediately upon
written notice if the other Party breaches any of its obligations under Article
XIV (Confidentiality; Non-Compete).
Section 16.3 Bankruptcy and Related Events. Notwithstanding
the provisions of Section 16.2, either Party may terminate this Agreement,
effective immediately upon written notice, if (a) all or a substantial portion
of the other Party's assets are transferred to an assignee for the benefit of
creditors or to a receiver or trustee in bankruptcy; (b) a proceeding is
commenced by or against the other Party for relief under the bankruptcy or
similar laws and such proceeding is not dismissed within thirty (30) days; or
(c) the other Party is adjudged bankrupt or insolvent.
Section 16.4 Obligations Upon Termination or Expiration. Upon
termination or expiration of this Agreement, (a) NDC shall immediately return to
Medscape all copies of the Medscape Confidential Information in NDC's possession
or control; and (b) Medscape shall immediately return to NDC all copies of the
NDC Confidential Information. In addition, each Party shall promptly pay to the
other Party any and all amounts due and owing by such Party to such other Party
for all periods up to and including the date of termination or expiration.
Section 16.5 Survival. The provisions of Section 11.4, Section
11.6, Article XII, Article XIII, Section 14.1, Section 14.2, Section 14.6,
Section 15.3, Section 15.4, Section 15.5, Section 16.4, Section 17.8, and any
other provision of this Agreement necessary for the interpretation of any of the
foregoing shall survive the termination or expiration of this Agreement.
ARTICLE XVII
GENERAL PROVISIONS
Section 17.1 No Joint Venture Created. Nothing in this
Agreement shall be construed so as to constitute NDC and Medscape as joint
venturers, partners, or agents of each other, and neither NDC nor Medscape shall
have the power to obligate or bind the other in any way whatsoever.
Section 17.2 Entire Agreement. This Agreement constitutes the
complete agreement between the Parties and supersedes all other agreements,
promises,
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representations, and negotiations, whether written or oral, between the Parties
regarding the subject matter of the Agreement. No amendment of this Agreement
shall be valid or take effect unless it is in writing and signed by all the
Parties.
Section 17.3 Assignment. Neither Party may assign this
Agreement (in whole or in part) or any of its rights or obligations hereunder
without the written consent of the other. Any assignment in violation of this
provision will be null and void.
Section 17.4 Waiver. No waiver of any term or condition or of
any breach of this Agreement or of any part of it, shall be deemed a waiver of
any other term or condition or of any later breach of the Agreement or of any
part of it.
Section 17.5 Notices. Any notice, consent, approval or
disapproval, required or permitted under this Agreement, including any change to
this Section 17.5, shall not be valid unless in writing and shall be given
either: (i) personally; (ii) by nationally-recognized express courier service,
(iii) by certified mail, return receipt requested, or (iv) by fax (with copy via
any means specified in (i), (ii) or (iii)), in each case, at the following
addresses or telephone and fax numbers:
If to Medscape:
Medscape, Inc.
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Patterson, Belknap, Xxxx & Tyler LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
If to NDC:
National Data Corporation
Xxxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx
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Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
National Data Corporation
National Data Plaza
Atlanta, Georgia 30329
Attention: Corporate Secretary
Tel: (000) 000-0000
Fax: (000) 000-0000
Notices shall be deemed effective upon receipt or upon refusal to accept receipt
documented by the U.S. Postal Service or nationally recognized courier service.
Section 17.6 Force Majeure. Neither Party shall be deemed in
default of this Agreement to the extent that performance of its obligations or
attempts to cure any breach are delayed, restricted, or prevented by reason of
any act of God or government, fire, natural disaster, labor stoppage, the
failure of necessary power systems or connections, or any other act or condition
beyond the reasonable control of the Parties, provided that the Party so
affected uses its commercially reasonable efforts to avoid or remove the causes
of non-performance and continues performance immediately after those causes are
avoided or removed. Notwithstanding this provision, any delay that exceeds (2)
two months shall entitle the Party whose performance is not affected by the
relevant event of force majeure to terminate the Agreement upon written notice
to the other Party.
Section 17.7 Publicity. A Party may use the name of the other
Party in press releases, sales material and literature only with the written
consent of the other Party. Neither Party may make any public statement or issue
any press release regarding the subject matter of this Agreement (including as
relates to new products or product launches) without the written approval of the
other Party.
Section 17.8 Governing Law. This Agreement shall be governed
by and construed under the laws of the State of New York and of the United
States, without regard to their conflicts of laws provisions. Any controversy or
proceeding arising out of or related to this Agreement shall be brought in the
federal or state courts in the State and County of New York. The Parties
expressly submit to personal jurisdiction and venue in any of those courts and
will not object to such jurisdiction on the ground of forum non conveniens or
otherwise.
Section 17.9 Including. The word "including" shall mean
"including without limitation" and "include(s)" shall mean "include(s)" without
limitation"
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Section 17.10 Schedules and Exhibits. The Exhibits hereto are
an integral part of this Agreement, and any reference herein to this Agreement
shall be deemed to mean and include a reference to such Exhibits, as may be
supplemented, modified, restated or amended from time to time. The Parties agree
that each such Exhibit is hereby incorporated in this Agreement by reference,
and shall have the same force and effect as if fully set forth in the body
hereof.
Section 17.11 Captions. Headings and captions throughout this
Agreement are for convenience only and should not be considered part of the
Agreement.
Section 17.12 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same document.
Section 17.13 Right of Offset. Medscape shall have the right
to offset against any and all amounts due and owing by Medscape to NDC hereunder
any and all amounts due by NDC to Medscape hereunder. NDC shall have the right
to offset against any and all amounts due and owing by NDC to Medscape hereunder
any and all amounts due by Medscape to NDC hereunder.
[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed and delivered on its behalf, as of the date and year first written
above, by its duly authorized representative.
MEDSCAPE INC.
By:
--------------------
Name:
Title:
NATIONAL DATA CORPORATION
By:
--------------------
Name:
Title:
29
EXHIBIT 2.1(a)-1
to
License and
Product Development
Agreement
INTELLECT Q&A
PRODUCT OVERVIEW
Intellect Q&A allows Medscape to access Practitioner Level Detailing
from the NDC Intellect databases via a web or EICS Client Server deployment.
Users are able to select from a list of pre-written queries/reports and set
specific parameters within each report using a Windows-based, point-and-click
interface.
Through Intellect Q&A, Medscape has access to NDC Health Information
Services multi-terabyte retail prescription database. This database will
significantly aid Medscape in the targeting of Physicians as well as profiling
their writing patterns for up to a full 24 month window. The Intellect
repository is loaded with over 2.4 Billion prescriptions, collected from
approximately 36,000 pharmacies, and covering over 225,000 product variations,
and 1.2 million prescribers.
INTELLECT DELIVERABLE
The Intellect Q&A application comes complete with access to: geographic
level data and analysis, detailed level data subset of Practitioner Database
(requires contract with data agent), and subset of the Drug Database. Client to
furnish the Internet browser IE v3.02 or IE v4.01 for web based implementations,
NDC to furnish OLAP/EIS tool for Client Server implementations.
Intellect Q&A Physician Detailing application comes complete with 17
predefined reports as well as capabilities to create Medscape specific Reports,
Templates, and Filters, thus providing unique combinations of reporting to
support ongoing initiatives.
Intellect Q&A User Manual
Initial Intellect Q&A system training (2 Days)
Intellect Q&A EIS implementation (if needed)
2 Intellect Q&A user Logon ID's and 2 MicroStrategy software licenses
Note:
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30
Service is restricted to data which Medscape has purchased already from
NDC. Contracting for additional data elements outside the terms of the
clients data contract is covered in Additional Fees listed below.
INTELLECT PRE-DEFINED PRESCRIBER REPORTS
Lookup: Prescriber Lookup
Class / Specialty: Prescriber List
Class: Region Product Summary
Class: Specialty Summary
Class: State Product Summary
Class: Top 100 Prescribers
Class: Zip Product Summary
Prescriber/Product: Month Summary
Prescriber: Month Summary
Product / Specialty: Prescriber List
Product / State/ Plan : Month Summary
Product / State: Month Summary
Product / State: Pay Type Month Summary'
Product / Zip: Month Summary
Product : Region Summary
Product: Specialty Summary
Product: Top 100 Prescribers
USAGE
The Medscape price is based on 2 user ID's and a maximum of 5 hours
processing time per query, 12,000 row limit per query and 3 simultaneous queries
running per user. System usage will be captured in terms of server DSS
processing seconds, Medscape will not be accountable for system "Wall Time".
Medscape will be allocated 108,000 server DSS seconds per month.
SERVICE PARAMETERS
In providing Intellect Q&A to Medscape, NDC Health Information Services
is committed to delivering the highest level of service and quality. To meet
these service level goals, NDC has established the following basic service level
parameters:
Intellect Q&A will be available on a 5X16 basis (5 days a week, Monday
- Friday, 16 hours.
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31
NDC and Medscape will identify and designate one point of contact to
work through customer requests, comments, training issues, installation
issues, product enhancements, and general questions.
NDC will track Medscape usage at the report level. All product usage
will be reported in terms of server DSS utilization seconds.
TRAINING
Price includes 2 day of onsite training and materials in Medscape's New
York offices.
ADDITIONAL FEES
Additional User Fee
Intellect Q&A has been priced for usage by 2 Medscape users, for each
additional user, an additional charge of $5,000 will be assessed per year. The
"additional per user fee" covers the use and maintenance of the NDC Health
Information Services' proprietary Intellect Q&A application, the associated
service level, product support, and DSS software licensing.
The following components are included in the "additional per user fee:"
MicroStrategy software license (DSS Server and DSSWeb or DSS Agent)
MicroStrategy yearly software maintenance
Intellect Q&A processing capacity to support 5X16 availability
Intellect Q&A application (includes interface and predefined analysis
folders and reports)
Initial one (2) day basic user training and materials
Intellect Q&A is a subscription-based service that is driven off of
NDC's Intellect data warehouse infrastructure. The use our sophisticated
relational decision support architecture mitigates the need for our clients to
build, house and maintain an expense and cost prohibitive infrastructure of
their own. The "additional per user fees" allows NDC Health Information Services
to deliver cost effective business intelligence to our clients.
Additional CPU Seconds
Medscape will be accessed $1 US for every server DSS second over the
established threshold. NDC will be accountable for usage monitoring and
reporting to client.
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Additional Services
Medscape can elect to contract with NDC Health Information Services for
additional Physician Detailing services including Behavioral Segmentation, Early
Adopters Studies, and Quintiling/Deciling. Each service will be priced
independently at NDC Health Information Services most favorable partner pricing.
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APPENDIX A
to
Exhibit 2.1(a)-1
INTELLECT Q&A REPORT DESCRIPTIONS
LOOKUP ANALYSES
CLASS LIST
Returns a list of all Classes.
CLASS: PRODUCT LIST
Returns a list of NDC's for the selected Class.
NATIONAL: PLAN LIST
Returns a list of Health Plans that are affiliated with the selected
National Plan.
PBM: PLAN LIST
Returns a list of Health Plans that are affiliated with the selected
PBM.
PRESCRIBER LOOKUP
Returns a Prescriber list based on the First Name, Last Name and State
entered.
PRODUCT: NDC LOOKUP
Returns NDC, package size, generic name, and manufacturer code for the
selected drug name.
PRODUCT: NAME LOOKUP
Returns Drug name, package size, generic name and manufacturer code for
the entered NDC.
MARKET ANALYSES
CLASS: NATIONAL PAYER SUMMARY
Returns Rx values for all National Payers for the selected Class and
Time period.
CLASS: PBM SUMMARY
Returns Rx values for all PBM's for the selected Class and Time period.
CLASS: PLAN SUMMARY
Returns Rx values for all Health Plans for the selected Class and Time
period.
CLASS: PRODUCT MONTH SUMMARY
Returns Rx values by Product for selected Class and Time period.
CLASS: PRODUCT SHARE
Returns Rx shares by Product for selected Class and Time period.
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34
CLASS: PRODUCT TRX COUNT
Returns TRx Count by Product for the selected Class and Time period.
CLASS: PRODUCT TRX SHARE
Returns TRx Share by Product for the selected Class and Time period.
CLASS: SUMMARY
Returns Rx values for the selected Class and Time Period.
PRESCRIBER: CLASS SUMMARY
Returns all Product Rx values for the selected Class, Time period and
Prescriber ID.
PAYER ANALYSES
CLASS / PLAN: MONTH CHART
Returns TRx count by month for the selected Class, Plan and Time
period.
CLASS / PLAN: MONTH SUMMARY
Returns Rx values for the selected Plan, Class and Time period.
CLASS / PLAN: PRESCRIBER LIST
Returns Rx values for all Prescribers for the selected Class, Plan,
Time period and Specialty.
CLASS: PAYMENT TYPE MONTH SUMMARY
Returns Rx values by Payment Type (Cash, Medicaid, 3rd Party) for the
selected Class and Time period.
CLASS: TRX PAYMENT TYPE
Returns TRx Share by Payment Type (Cash, Medicaid, 3rd Party) for the
selected Class and Time period.
NATIONAL /PRODUCT: PLAN SUMMARY
Returns Rx values by affiliate Health Plan for the selected National
Plan, Product and Time period.
NATIONAL: PLAN SUMMARY
Returns Rx values for all Health Plans that are affiliates of the
selected National Plan.
NATIONAL: PRODUCT SUMMARY
Returns Rx values by Product for the selected National Plan and Time
period.
PBM/PRODUCT: PLAN SUMMARY
Returns Rx values by affiliate Health Plan for the selected PBM,
Product and Time period.
PBM: AFFILIATE PLAN SUMMARY
Returns Rx values for all Health Plans that are affiliates of the
selected PBM.
PBM: PRODUCT SUMMARY
Returns Rx values by Product for the selected PBM and Time period.
PLAN: CLASS SUMMARY
Returns Rx values for the selected Health Plan, Class and Time period.
PLAN: MONTH SUMMARY
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35
Returns Rx values for all products (summarized) for the selected Health
Plan and Time period
PLAN: PRODUCT SUMMARY
Returns Rx values by product for the selected Plan and Time period.
PRESCRIBER / CLASS: PLAN LIST
Returns Rx values for all Health Plans for the selected Product,
Prescriber and Time period.
PRESCRIBER / PRODUCT: PLAN LIST
Returns Rx values for all Health Plans for the selected Product,
Prescriber and Time period.
PRESCRIBER: PLAN LIST
Returns Rx values by Plan for all products for the selected Prescriber
and Time Period.
PAYER ANALYSES
PRODUCT / PLAN: MONTH CHART
Returns TRx count by month for the selected Product, Plan and Time
period.
PRODUCT / PLAN: MONTH SUMMARY
Returns Rx values for the selected Plan, Product and Time period.
PRODUCT / PLAN: PRESCRIBER LIST
Returns Rx values for all Prescribers for the selected Product, Plan,
Time period and Specialty.
PRODUCT: ALL PLANS
Returns Rx values for all plans for the selected Product and Time
period.
PRODUCT: PAYMENT TYPE MONTH SUMMARY
Returns Rx values by Payment Type (Cash, Medicaid, 3rd Party) for the
selected Product and Time period.
PRODUCT: TRX PAYMENT TYPE
Returns TRx Share by Payment Type (Cash, Medicaid, 3rd Party) for the
selected Product and Time period.
PRESCRIBER ANALYSES
CLASS / SPECIALTY: PRESCRIBER LIST
Returns Rx values by Prescriber for the selected Class, Time period and
Specialty.
CLASS: SPECIALTY SUMMARY
Returns Rx values and Prescriber Counts by Specialty for the selected
Class and Time period.
CLASS: TOP 100 PRESCRIBERS
Returns Rx values for the Top 100 Prescribers for the selected Class
and Time period.
PRESCRIBER/PRODUCT: MONTH SUMMARY
Returns Rx values for the selected Prescriber, Product and Time period.
PRESCRIBER: MONTH SUMMARY
Returns Rx values by Product for the selected Prescriber and Time
period.
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36
PRODUCT / SPECIALTY: PRESCRIBER LIST
Returns Rx values by Prescriber for the selected Product, Time period
and Specialty.
PRODUCT: SPECIALTY SUMMARY
Returns Rx values and Prescriber Counts by Specialty for the selected
Product and Time period.
PRODUCT: TOP 100 PRESCRIBERS
Returns Rx values for the Top 100 Prescribers for the selected Product
and Time period.
PRESCRIBER GEOGRAPHY ANALYSES
CLASS: REGION PRODUCT SUMMARY
Returns Rx values by product for the selected Class, Prescriber Region
and Time period.
CLASS: STATE PRODUCT SUMMARY
Returns Rx values by product for the selected Class, Prescriber State
and Time period.
CLASS: ZIP PRODUCT SUMMARY
Returns Rx values by product for the selected Class, Prescriber State
and Time period.
PRODUCT / STATE/ PLAN: MONTH SUMMARY
Returns Rx values for the selected Product, Prescriber State, Plan and
Time period.
PRODUCT / STATE: MONTH SUMMARY
Returns Rx values for the selected Product, Prescriber State and Time
period.
PRODUCT / STATE: PAY TYPE MONTH SUMMARY
Returns Rx values by Payment Type for the selected Product, Prescriber
State and Time period.
PRODUCT / ZIP: MONTH SUMMARY
Returns Rx values for the selected Product, Prescriber Zip and Time
period.
PRODUCT: REGION SUMMARY
Returns Rx values by Region for the selected Product and Time period.
RX ANALYSES
CLASS: MONTH SUMMARY W/PRSCR COUNT
Returns Rx values and Prescriber counts by month for the selected Class
and Time period.
PRODUCT / STRENGTH: MONTH SUMMARY
Returns Rx values and Prescriber Counts for the selected Product,
Strength and Time period.
PRODUCT: MONTH SUMMARY
Returns Rx values by month for the selected Product and Time period.
PRODUCT: MONTH SUMMARY W/PRSCR COUNT
Returns Rx values and Prescriber counts by month for the selected
Product and Time period.
PRODUCT: NDC SUMMARY
Returns Rx values and Prescriber Counts by month for the selected NDC
and Time period.
PRODUCT: TRX OVER TIME
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37
Returns TRx Count by month for the selected Product and Time period.
37
38
EXHIBIT 6.1(c)
to
License and
Product Development
Agreement
---------
R&D PIPELINE INFORMATION
------------------------
Data Elements:
--------------
Company Name
Product Name
Generic Name
Therapeutic Use
Stage of Development
Source of Abstracts
Comments
Approval Date
Prior Approval Date
Company Address
Company Phone Number
Company Fax
Company Web Site
39
39
EXHIBIT 11.1
to
License and
Product Development
Agreement
FEES, COMMISSIONS, PAYMENTS AND CREDITS
The following fees, commissions, payments and credits shall be
applicable to the transactions contemplated by the License and Product
Development Agreement between Medscape and NDC, dated as of July __, 1999 ( (the
"Agreement"). Capitalized terms used herein without definition have the meanings
provided in the Agreement. The terms of this Exhibit 11.1 are an integral part
of the Agreement and shall be subject to all of the terms and conditions
thereof.
1. Intellect License Fee. (a) Allocation. For and in
consideration of the Intellect License grant, Medscape shall pay to NDC a
one-time authorization fee equal to *
(the "Intellect License Fee"). The Parties acknowledge
and agree that an amount equal to the Intellect License Fee has been allocated
to a portion of the non-cash consideration being given by NDC to Medscape in
exchange for NDC's acquisition, and Medscape's sale, of Shares pursuant to and
as contemplated in the Stock Purchase Agreement. Accordingly, NDC hereby
acknowledges payment by, and receipt of value from, Medscape of an amount equal
to the Intellect License Fee and further agrees that Medscape's obligation to
pay the Intellect License Fee is satisfied and discharged in full. The
components of the Intellect License Fee are as follows:
(1) * attributable to the
perpetual Intellect License grant contemplated in Section 2.1(a) of the
Agreement; and
(2) * attributable to
NDC's grant to Medscape of the right to access and use, subject to the
terms of the Intellect License, monthly updates for the Intellect
Database during the Initial Term, as contemplated in Section 2.1(c) of
the Agreement.
(b) Review; AMA Consent. At any time on or prior to August 1,
1999, the Parties may agree to reallocate all or any portion of the dollar
amount specified in clause (2) above * to the dollar amount
allocable to the ad hoc consulting services referred to in Section 6 below. The
Parties agree that any discussions concerning such reallocation shall be
conducted in good faith with due regard for the respective economic interests of
the Parties. Notwithstanding the foregoing, if any consent required by the AMA
41
[* * *]
40
as a condition to the effectiveness of the AMA Sublicense cannot be or is not
obtained by July 26, 1999, or such consent is not sufficient, in Medscape's sole
and absolute discretion, to secure the scope of use or uses of the AMA-PPD (as
defined in the AMA Sublicense) which Medscape requires, then Medscape shall have
the right, exercisable in its sole and absolute discretion, to elect to
unilaterally reallocate all or any portion of the dollar amount specified in
clause (2) above * to the dollar amount allocable to the ad hoc
consulting services referred to in Section 6 below. If Medscape duly exercises
its right to make such election, NDC shall execute and deliver such amendatory
documents as Medscape may deem reasonably necessary or appropriate to give full
effect to the reallocation specified by Medscape.
2. LYTEC Distribution/Preferred Status Fee. For and in
consideration of NDC's agreement, subject to the terms and conditions of the
Agreement, to designate Medscape (x) as the exclusive website providing
Healthcare Clinical Content integrated in LYTEC 99, (y) as the exclusive website
providing Healthcare Clinical Content integrated into LYTEC/Web, and (z) a
preferred partner of NDC as contemplated in Article IX of the Agreement,
Medscape shall pay to NDC an aggregate amount equal to *
(the "LYTEC
Distribution/Preferred Status Fee"). The Parties acknowledge and agree that an
amount equal to the LYTEC Distribution/Preferred Status Fee has been allocated
to a portion of the non-cash consideration being given by NDC to Medscape in
exchange for NDC's acquisition, and Medscape's sale, of Shares pursuant to and
as contemplated in the Stock Purchase Agreement. Accordingly, NDC hereby
acknowledges payment by, and receipt of value from, Medscape of an amount equal
to the LYTEC Distribution/ Preferred Status Fee and further agrees that
Medscape's obligation to pay the LYTEC Distribution/ Preferred Status Fee is
satisfied and discharged in full. The components of the LYTEC
Distribution/Preferred Status Fee are as follows:
(a) *
attributable to modifications and integration efforts relating
to Medscape Content; and
(b) *
attributable to the designations referred to above.
3. Marketing and Promotion. For and in consideration of NDC's
marketing and promotion of LYTEC 99, LYTEC/Web and such other products and
services as the Parties may agree as contemplated in Article II of the
Agreement, Medscape shall pay to NDC an amount equal to *
(the "Marketing and Promotion
Fee"). The Parties acknowledge and agree that an amount equal to the Marketing
and Promotion Fee has been allocated to a portion of the non-cash consideration
being given by NDC to Medscape in exchange for NDC's acquisition, and Medscape's
sale, of Shares pursuant
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[***]
41
to and as contemplated in the Stock Purchase Agreement. Accordingly, NDC hereby
acknowledges payment by, and receipt of value from, Medscape of an amount equal
to the Marketing and Promotion Fee, and further agrees that Medscape's
obligation to pay the Marketing and Promotion Fee is satisfied and discharged in
full. The components of the Marketing and Promotion Fee are as follows:
(a) * attributable to the LYTEC 99
product launch, including in connection with a 100,000 Piece
VAR Catalog Mailing and a 250,000 Piece Pharmacy and
Physicians Mailing; and
(b) * attributable to
future product launches.
4. NDC Distribution Commission. During the Term, Medscape will
pay to NDC the following amounts (collectively, "NDC Distribution Commissions"):
(a) a bounty equal to * for each New
Medscape Member;
(b) * percent * of the Net Advertising Revenue attributable to the
number of Medscape page views which are generated when New Medscape
Members access any Medscape Website; and
(c) * percent * of Medscape's Net Revenue attributable to electronic
commerce purchases by each New Medscape Member, as reported by
Medscape's electronic commerce partners, but only to the extent tracked
and reported by such commerce partners.
For purposes of this Paragraph 4, the following terms have the
following meanings:
"Net Advertising Revenue" means all advertising revenue
actually received by Medscape less all related sales credits, rebates,
and third-party ad sales commissions, paid or issued by Medscape.
"Net Revenue" means all revenue, less any and all rebates,
credits, returns and charge backs.
"New Medscape Member" means either:
(i) a user of any Medscape Website who was not previously
registered as a Medscape member and subsequently registers on
his or her own behalf as a Medscape member either as a result
of (x) a link integrated into an NDC Healthcare Product, or
(y) NDC's direct sales effort; or
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[***]
42
(ii) a user of a Medscape Website who was previously registered as
a Medscape member but has not accessed the relevant Medscape
Website in the nine (9) month period prior to such user's
first access on his or her own behalf to such Medscape Website
from a link integrated into an NDC Healthcare Product.
5. Credit Against NDC Distribution Commissions. The Parties
acknowledge and agree that an amount equal to *
* (the "NDC Commissions Credit") has been allocated to a portion
of the non-cash consideration being given by NDC to Medscape in exchange for
NDC's acquisition, and Medscape's sale, of Shares pursuant to and as
contemplated in the Stock Purchase Agreement and, specifically, to the advance
payment of NDC Distribution Commissions payable by Medscape to NDC during the
Initial Term. Accordingly, NDC agrees that (i) Medscape's obligation to pay NDC
Commissions during the Initial Term up to an amount equal to the NDC Commissions
Credit is satisfied and discharged in full, and (ii) Medscape shall have no
obligation to pay any NDC Distribution Commission to NDC during the Initial Term
except and to the extent that the aggregate amount of all NDC Distribution
Commissions payable to NDC during the Initial Term exceeds the amount of the NDC
Commissions Credit.
6. Credit Against NDC Healthcare Products Purchases. The
Parties acknowledge and agree that an amount equal to *
* (the "NDC Healthcare Products
Credit") has been allocated to a portion of the non-cash consideration being
given by NDC to Medscape in exchange for NDC's acquisition, and Medscape's sale,
of Shares pursuant to and as contemplated in the Stock Purchase Agreement and,
specifically, to the advance payment by Medscape of purchases of NDC Healthcare
Products and related consulting or other ad hoc services. Accordingly, NDC
agrees that (i) Medscape's obligation to pay for purchases of NDC Healthcare
Products and related consulting or other ad hoc services up to an amount equal
to the NDC Healthcare Products Credit is satisfied and discharged in full, and
(ii) Medscape shall have no obligation to pay any funds for purchases of NDC
Healthcare Products or related consulting services or other ad hoc services
until the aggregate amount of such purchases (net of applicable taxes,
discounts, credits and returns), related consulting or other ad hoc services
exceeds the amount of the NDC Healthcare Products Credit. The terms of
Medscape's right to purchase and distribute NDC Healthcare Products and its
status as a reseller are as provided in Annex 1 attached hereto and made a part
hereof.
7. Review. On the date which is twelve (12) months after the
Effective Date, the Parties agree to commence good faith discussions (with due
regard being given to the respective economic interests of the Parties) to
review and to reconsider, as may be appropriate, the allocation of the dollar
amounts specified in, and as between, Paragraphs 5 and 6 above.
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[**]
43
8. EDI Services Commission. During the Term, *
for each electronic data interchange
transaction of the type identified in Annex 2 attached hereto which is processed
by NDC or on its behalf for any individual or entity brought to NDC through
Medscape's marketing efforts (the "EDI Services Commission").
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45
[**]
44
EXHIBIT 11.1
ANNEX 1
RESELLER STATUS FOR MEDSCAPE
1. NDC authorizes Medscape to identify itself as a reseller of the NDC
Healthcare Products, and to act as an intermediary in sales of NDC
Healthcare Products to third parties.
2. In all such sales by Medscape, the third party will license the NDC
Healthcare Products from NDC directly, and NDC (or an affiliate or
value-added reseller selected by NDC) will provide all support and
services directly to the third party purchaser at applicable rates.
3. Medscape will receive a discount of up to * off of
the then current retail price of NDC Healthcare Products where its acts
as reseller. Medscape will pay NDC's shipping costs for Medscape's
purchases.
4. Medscape will submit orders for products for third parties in
accordance with NDC's then current end user support policies.
46
[*****]
45
EXHIBIT 11.1
ANNEX 2
EDI SERVICES
(1) Claims (electronic transmission of HCFA 1500 forms).
(2) Eligibility (electronic transmission of patient-specific demographic
information to determine if patient is an eligible member).
(3) Referrals (electronic transmission of patient demographic information
to another participating provider for request of treatment).
(4) Claim Status (electronic request to verify the status of a previously
submitted claim).
(5) Remittance Advice (electronic acceptance of payable information for a
previously submitted claim).
47
