Exhibit 10.27
DEVELOPMENT AND DISTRIBUTION AGREEMENT
BETWEEN
GE MEDICAL SYSTEMS
AND
HEALTHGATE DATA CORP.
JUNE 11, 1999
DEVELOPMENT AND DISTRIBUTION AGREEMENT
This Agreement, effective as of June 11, 1999, is between GE Medical
Systems, a division of General Electric Company, a corporation organized and
existing under the laws of the state of New York ("GEMS"), and HealthGate Data
Corp., a corporation organized and existing under the laws of the state of
Delaware ("HealthGate").
RECITALS
A. HealthGate owns or has rights to certain "HealthGate Products" (as
defined below) which are used in health, medicine, training and education.
B. GEMS owns or has rights to certain content, satellite broadcast
programming and branding and related goods and services which are used in
health, medicine, training and education, and which are used to distribute
information about, and to promote, its other goods and services.
C. The parties intend to develop certain enhanced or supplemented
embodiments of HealthGate Products (called "GEMS Products" herein, as defined
below) by integrating certain Marks (as defined below), content, programming and
e-commerce capabilities of GEMS with the HealthGate Products. GEMS is granted a
limited worldwide right hereunder to distribute HealthGate Products, including
an exclusive right to distribute HealthGate Products to the Exclusive Customers
(as defined below), and an exclusive worldwide right to distribute GEMS
Products. The parties are to share Revenue (as defined herein) in connection
therewith.
D. Simultaneous with this Agreement, the parties are entering into a
Warrant Purchase Agreement (the "Warrant Agreement") of even date herewith,
under which General
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Electric Company or one or more of its affiliates acquires a warrant to purchase
certain stock of HealthGate as set forth therein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises and covenants set forth below, the parties agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms herein shall have the following meanings for purposes of
this Agreement:
1.1 "Agreement" has the meaning set forth in the preamble.
1.2 "HealthGate Products" means all present and all future releases,
versions and embodiments of the suite of HealthGate products and services
currently known as "CHOICE," that are developed for or marketed or sold to the
Healthcare Marketplace, including any future products or services having a
different name but substituting for or superseding, or performing the same or
equivalent function as, or competing with, CHOICE, but not including those
current products or services listed on Exhibit B attached hereto with respect to
which HealthGate is prohibited by existing obligations to content providers from
allowing distribution by GEMS.
1.3 "Healthcare Marketplace" means institutions, organizations and
corporations in the business of delivering patient care, including but not
limited to hospitals, multi-hospital systems, clinics, out-patient centers,
healthcare group purchasing organizations and integrated delivery networks.
1.4 "GEMS Products" means products resulting from HealthGate Products
(i) being enhanced or supplemented with content contributed by GEMS, regardless
of format, or (ii) to which Marks of GEMS are applied, or (iii) for which GEMS
contributes any development costs.
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1.5 "Products" means HealthGate Products sold or deemed sold by GEMS and
GEMS Products, singly and jointly.
1.6 "Exclusive Customers" means the companies and institutions listed in
Exhibit A hereto.
1.7 "Revenue" means all monetary consideration and the fair market value
of all non-monetary consideration actually received, not including any sales or
value-added taxes, and less any returns or refunds. In the case of Revenue in a
currency other than United States dollars, such Revenue shall be converted to
United States dollars using the exchange rate in effect on the last day of the
calendar quarter during which such Revenue is received.
1.8 "Qualified Lead" means a lead with an Exclusive Customer for which
HealthGate delivers written notice to GEMS (a) identifying such Exclusive
Customer, (b) identifying a contact at such Exclusive customer, (c) summarizing
the web capabilities of and HealthGate proposals made to such Exclusive Customer
as of the date of such notice, and (d) describing any discussions between
HealthGate and such Exclusive Customer as of the date of such notice.
1.9 "Confidential Information" means any information received by a party
that is marked "Confidential" or "Proprietary" or, in the case of information
that is disclosed orally, is reduced to writing and such writing is delivered to
the receiving party confirming the oral disclosure and identifying the oral
disclosure as "Confidential" within 30 days after the oral disclosure.
Confidential Information shall not include any information that the receiving
party can demonstrate, by a preponderance of the evidence, is already known to
it at the time of the disclosure, is in the public domain other than as
consequence of breach by it of its obligation hereunder not to disclose the
information, is received from another without an obligation of
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confidentiality, or is thereafter independently developed by it without the use
of any such information.
1.10 "Marks" has the meaning set forth in Section 6.5 below.
1.11 "Control" has the meaning set forth in Section 13.3 below.
1.12 "Integration Support" has the meaning set forth in Article 2 below.
1.13 "Competitive Activities" means GEMS selling of any enterprise-wide
supplemental website healthcare content to the Healthcare Marketplace other than
as provided hereunder. As of the signing of this Agreement, "Competitive
Activities" shall mean those offered by xxxxxx.xxx and AHN. "Competitive
Activities" shall not include departmental and educational solutions, shall not
include GEMS' existing distribution arrangements with the Health Channel, and
shall not include TiP.
1.14 "List Price" means, with respect to the sale of Products during a
calendar quarter, the lesser of (a) the list price for HealthGate Products last
published by HealthGate prior to such calendar quarter and (b) any discounted
prices at which HealthGate directly or indirectly distributes comparable volumes
of HealthGate Products to end users during such calendar quarter. "List Price"
does not include any sales or value-added taxes, surcharges, discounts, refunds
or credits.
ARTICLE II
DEVELOPMENT
2.1 DEVELOPMENT OF GEMS PRODUCTS. The parties will collaborate in the
development of GEMS Products by integrating into HealthGate Products those
portions of GEMS' content, programming and branding and related goods and
services as may be designated by GEMS from time to time. The GEMS Products will
be directed toward specific areas of expertise of GEMS,
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including, but not limited to, radiology, cardiology and women's health, and
related educational materials, and GEMS e-commerce applications. More
specifically, the parties anticipate that the GEMS Products will include
continuing education and continuing medical education, e-commerce, medical
content, health and wellness content and consulting services.
2.2. INTEGRATION SUPPORT. During the term of this agreement, HealthGate
will provide Integration Support (as defined below) to GEMS as follows:
(a) Upon receipt of a request for Integration Support from GEMS,
each of which shall be written with sufficient detail to enable
HealthGate's personnel to estimate the programming and other requirements
thereof, HealthGate shall promptly deliver to GEMS a written project
outline which will outline the scope of work and the number of man hours
required to fulfill such request (each, a "Project Outline"). Any
modifications to the GEMS request for Integration Support shall require a
further request from GEMS and a further Project Outline from HealthGate.
(b) At its expense, HealthGate will provide up to 300 man-hours of
Integration Support to GEMS during each calendar quarter. Subject to
Section 2.2(c) below, all Integration Support provided to GEMS in excess
of 300 man-hours during each calendar quarter shall be provided to GEMS on
an as available basis and at the expense of GEMS, based on the actual time
and materials costs incurred by HealthGate in providing such additional
Integration Support and on terms and conditions no less favorable than
those granted to others.
(c) Any time or material expenses incurred by HealthGate in excess
of the time and materials set forth in a Project Outline (as modified in
accordance with Section 2.2(a) above) shall be borne by HealthGate, and
any such excess man-hours shall
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not apply for any purpose against the 300 man-hours agreed to be provided
under Section 2.2(b) above.
(d) "Integration Support" includes, but is not limited to, the
following services: review of requests submitted by GEMS as contemplated
under Section 2.2(a) above; preparation and delivery of Project Outlines;
and design, development, testing and implementation of all necessary
services and support for the integration of GEMS Marks, links to GEMS
Websites and the integration of GEMS' content and look and feel of GEMS
into HealthGate Products for the purpose of creating GEMS Products.
2.3 CREATION OF DERIVATIVE WORKS. HealthGate will provide all necessary
technical support to GEMS in the creation and development of derivative works of
and new content or features for GEMS Products, subject to the ownership
provisions of Article III below and such other terms and conditions as agreed
upon by the parties from time to time. Such terms and conditions will be
reasonable, and no less favorable to GEMS than those offered by HealthGate to
others under similar circumstances. The parties may mutually agree for
HealthGate to provide such support at the expense of GEMS, the shared expense of
GEMS and HealthGate, or the expense of HealthGate, which agreement shall have
the effect described in Article III and Section 7.2(b).
ARTICLE III
OWNERSHIP
3.1 OWNERSHIP OF GEMS PRODUCTS. GEMS will own, and HealthGate hereby
assigns and agrees to assign to GEMS, all elements of GEMS Products that (i)
constitute, or are derivative works of, GEMS content, regardless of format
(including without limitation works of authorship, source and object code, and
databases) or (ii) for which GEMS contributes
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development costs. Such assignment shall include all copyrights, trade secret
rights and other intellectual property rights thereto, with the unrestricted
right to reproduce, prepare derivative works, use, distribute, perform and
display such elements. HealthGate will have no rights to any such elements
unless expressly provided otherwise in writing by GEMS.
3.2 OWNERSHIP OF HEALTHGATE PRODUCTS. HealthGate shall own all
HealthGate Products and any elements of GEMS Products that do not constitute,
and are not derivative works of, GEMS content and for which GEMS does not
contribute development costs, including all copyrights, trade secret rights and
other intellectual property rights thereto, subject to the distribution rights
of GEMS under Section 4.1 below and other rights of GEMS hereunder.
3.3 GEMS OWNERSHIP OF WORK FOR WHICH GEMS FUNDS DEVELOPMENT. All work,
including associated technology, developed by HealthGate and funded by GEMS
shall be owned by GEMS and all rights therein together with all intellectual
property rights shall be owned by GEMS, unless HealthGate delivers to GEMS clear
and convincing proof including corroborated records showing prior ownership of
such rights by HealthGate, and GEMS agrees with such ownership, in advance of
such development. HealthGate hereby grants GEMS a royalty-free, irrevocable,
non-exclusive license to allow GEMS to copy, modify, distribute, perform
publicly such portions of the delivered work, and to use any portions of any
associated technology that are not owned by GEMS in connection with GEMS'
commercialization of the delivered work.
3.4 HEALTHGATE'S RIGHTS IN WORK FOR WHICH GEMS FUNDS DEVELOPMENT. GEMS
hereby grants to HealthGate a royalty-free, irrevocable, non-exclusive license
to allow HealthGate to copy, modify, distribute, perform publicly the technology
associated with the work for which GEMS funded development, but only outside the
field of medical imaging and patient
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monitoring and only without the involvement of any competitors of GEMS including
but not limited to those listed in Exhibit C hereto.
3.5 ASSIGNMENTS. Except as provided in this Article III and subject to
the licenses and other rights under this Agreement, each party retains ownership
of its respective underlying intellectual property rights. Each party agrees to
take such action as may be reasonably required to effectuate the ownership
provisions of this Article III, including without limitation the execution and
delivery of instruments of assignment, recordation or registration, and the
giving of truthful testimony.
3.6 ENFORCEMENT. Each party shall promptly notify the other of any
infringement or other violation by any third party of any patent, copyright,
trade secret, trademark or other intellectual property right related to the
Products. The party owning such right may enforce such right against such third
party, and the other party shall reasonably cooperate with such enforcement at
the enforcing party's expense. Any damages or other monetary recovery in the
enforcement action shall be retained by the enforcing party.
ARTICLE IV
DISTRIBUTION RIGHTS
4.1 GRANT OF RIGHTS GOVERNING GEMS PRODUCTS. HealthGate hereby grants
to GEMS and its affiliates an exclusive worldwide right and license to
distribute, and arrange for subdistribution through GEMS subdistributors that
do not engage in any activities that would be deemed Competitive Activities
if engaged in by GEMS, GEMS Products on such terms and conditions as GEMS may
determine, consistent with the provisions of this Agreement.
4.2 GRANT OF RIGHTS GOVERNING HEALTHGATE PRODUCTS.
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(a) HealthGate hereby grants to GEMS a worldwide right and license,
exclusive except as provided in this Section 4.2(a), to distribute, and
arrange for subdistribution through GEMS subdistributors that do not engage
in any activities that would be deemed Competitive Activities if engaged in
by GEMS, HealthGate Products on such terms and conditions as GEMS may
determine, consistent with the provisions of this Agreement to the Exclusive
Customers. If GEMS engages in any Competitive Activities, then HealthGate may
convert such right and license to nonexclusive upon 30 days notice to GEMS.
HealthGate may continue to market or sell HealthGate Products to any
Exclusive Customer, for a period of 90 days after execution of this
Agreement, but any resulting sale of any HealthGate Products shall be deemed
a sale by GEMS for purposes of the sharing of Revenues and other provisions
of this Agreement. After the first 90 day period of this Agreement,
HealthGate may deliver to GEMS written notice of a Qualified Lead with any
Exclusive Customer. If within 90 days after receiving such notice from
HealthGate, GEMS fails to consummate a sale to, or receive a commitment from,
such Exclusive Customer, or achieve other significant demonstrated progress
toward a sale to such Exclusive Customer, then HealthGate at its option upon
notice to GEMS may thereafter distribute or arrange for the distribution of
HealthGate Products to such Exclusive Customer.
(b) HealthGate hereby grants to GEMS a nonexclusive worldwide right
and license to distribute HealthGate Products, other than to the Exclusive
Customers, on such terms and conditions as GEMS may determine, consistent
with the provisions of this Agreement in those instances in which a customer
desires to purchase HealthGate Products and the distribution to such customer
does not violate any then-existing exclusive distribution obligation of
HealthGate and subject to HealthGate prior consent. In addition, GEMS shall
have the non-exclusive right to distribute HealthGate Products to Quorum.
4.3 REVOCATION OR TRANSFER OF CONFLICTING DISTRIBUTION RIGHTS. If
HealthGate has previously granted distribution rights to others for any of the
Exclusive Customers, then
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HealthGate shall revoke such rights or cause them to be transferred to GEMS in
accordance with all the provisions herein.
4.4 UNAVAILABLE CONTENT. Promptly after the date of this Agreement,
HealthGate shall exert its best efforts with each of its content providers that
prohibit the distribution of their content through GEMS Products or otherwise
prohibit distribution by GEMS to waive such prohibition and allow such
distribution. HealthGate will regularly keep GEMS informed of HealthGate's
efforts and progress in obtaining such waivers.
4.5 PROHIBITED DISTRIBUTORS. HealthGate will not distribute or allow the
distribution of any HealthGate Products or any components, portions, modules or
other constituents of HealthGate Products, or any product or service competitive
to HealthGate Products, by any company listed in Exhibit C hereto; provided,
however, the limitation provided under this Section 4.5 shall only apply to the
Healthcare Marketplace and shall not limit HealthGate's ability to enter into
transactions or arrangements not involving the Healthcare Marketplace; and
provided further, HealthGate will be released from the limitation provided under
this Section 4.5 at its option upon 30 days prior notice to GEMS if GEMS engages
in any Competitive Activities.
4.6 TERMS OF DISTRIBUTION. The general terms and conditions of the
distribution of Products by GEMS will be as set forth in a Standard End User
License Agreement substantially in the form agreed upon by the parties from time
to time.
4.7 NO BEST EFFORTS OR RESTRICTIONS. The loss of exclusivity by GEMS
with respect to the Exclusive Customers as set forth in Section 4.2 above is
HealthGate's sole remedy for any failure by GEMS to make sales of Products.
Except as expressly set forth herein, GEMS will not be restricted in its conduct
of any activities by this Agreement; the distribution activities of GEMS for the
Products shall be as determined by GEMS in its sole discretion subject to the
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terms and conditions of this Agreement; and GEMS shall not be obligated to
undertake any "best efforts" or any other particular commitment level.
4.8 MEETINGS. The parties will meet approximately each calendar quarter
to discuss market conditions and strategies for the effective sale and
distribution of the Products.
ARTICLE V
SERVICES AND SUPPORT
5.1 WEBSITE DESIGN AND HOSTING. HealthGate, at its expense, shall
design, develop, maintain, update, support and host the websites for all
Products; provided, however, with respect to products, services and applications
that are resident on non-HealthGate servers, HealthGate shall only be
responsible for maintaining the links between HealthGate's servers and such
other servers. Promptly upon request, HealthGate shall deliver to GEMS and, if
required under the applicable end user agreement, to customer's quarterly usage,
tracking and similar information related to each such customer's website, such
information to include, if applicable, page views, numbers of unique visitors,
numbers of visits to sections, advertisers' and sponsors' usage and click
throughs.
5.2 TRAINING. At the request of GEMS, and on a date and at a location
chosen by GEMS and provided to HealthGate a reasonable time in advance,
HealthGate shall provide one comprehensive training session for the GEMS sales
and marketing force to launch the sales and marketing of the Products by GEMS.
While this Agreement is in effect, on a quarterly basis, and on a date and at a
location chosen by GEMS and provided to HealthGate a reasonable time in advance,
HealthGate will conduct a comprehensive training session for individuals
selected by GEMS as GEMS internal trainers for the sales and marketing of the
Products. In addition, while this Agreement is in effect, HealthGate shall
provide such additional training and sales support to
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GEMS as it may reasonably request in the sales and marketing of the Products.
HealthGate and GEMS shall each pay the travel, lodging and other related
expenses of their respective personnel in connection with any of the
above-referenced training. HealthGate shall also bear the cost of the necessary
ancillary print materials related to such training. GEMS and HealthGate shall
share equally the cost of any facilities usage expenses of all such training,
except for training that takes place at HealthGate's offices, for which
HealthGate shall bear such expenses, provided that HealthGate approves such
expenses in advance.
5.3 SURVIVAL OF SERVICES AND SUPPORT. HealthGate's provision of the
services described in this Article V shall survive termination or expiration of
this Agreement with respect to then active Products customers (i.e. those with
which an end user agreement is then in effect) and Products customers for which
there are commitments prior to termination or expiration.
5.4 RIGHT OF GEMS TO SUPPORT. If, during or after the term of this
Agreement, HealthGate fails to provide service to one or more Products customer
consistent with the level of service mutually deemed satisfactory from time to
time by HealthGate and GEMS, with such initial level of satisfactory service to
be established by HealthGate and GEMS within 60 days after the date of this
Agreement, GEMS and HealthGate will meet and work together in good faith to
address and resolve any such service level issue. If any such service level
issue is not remedied in a timely manner such that the level of service provided
to such Products customers is not at least equal to the then mutually
agreed to level of service, HealthGate shall fully cooperate with GEMS, to
enable GEMS, at HealthGate's expense, to provide such services; provided,
however, HealthGate's liability under this Section 5.4 shall be limited to the
amount of actual revenue it shall have received from the sale of Products to the
affected customers.
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ARTICLE VI
MARKETING
6.1 GEMS' MARKETING. GEMS and HealthGate will work collaboratively to
develop the overall strategic marketing plan for the Products in accordance with
this Article VI.
6.2 COOPERATION BY HEALTHGATE. HealthGate at its expense (except to the
extent provided otherwise in this Article VI) will cooperate as reasonably
requested by GEMS in marketing the Products. Without limiting the generality of
the foregoing sentence, HealthGate (i) on a timely basis will provide to GEMS
all relevant technical, marketing and other information regarding the Products
and will provide appropriate artwork for marketing communications; and (ii) in
advance of each calendar quarter will review with GEMS the HealthGate budget and
detailed plan for the marketing of Products and HealthGate's plans for public
relations and enhancing and building company image and branding for such
calendar quarter.
6.3 COOPERATION BY GEMS. GEMS will be responsible for the production and
distribution of marketing communications regarding GEMS Products. During the
initial one-year term of this Agreement, GEMS will incorporate HealthGate's name
into marketing communications for GEMS Products to the extent consistent with
General Electric Company corporate guidelines. GEMS will include the GEMS
Products (and prices therefor) in its product catalog or equivalent supporting
materials. The GEMS Products may be included as a part of industry trade shows
and exhibitions in which GEMS participates, at GEMS discretion. The GEMS
Products may be included as a part of GEMS public advertising strategy, at GEMS
discretion. The expenses attributable to the inclusion of the GEMS Products in
such trade shows,
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exhibitions, and advertisements will be split evenly between GEMS and
HealthGate, provided that HealthGate approves such expenses in advance.
6.4 TIP PROGRAMMING AND OTHER WEBSITES. GEMS may, at its option, promote
HealthGate on GEMS TiP TV to the extent TiP content has been posted on
HealthGate hosted websites such as XxxxxxXxxx.xxx and xxxxxx.xxx. Such promotion
may be in the form of a tag line reading substantially as "To access a web-based
copy of this program, please contact XxxxxxXxxx.xxx." GEMS, at its discretion,
will determine what GEMS content is available for HealthGate sponsored websites
and the prices charged to HealthGate for such content. GEMS may also, with the
assistance of HealthGate, promote the Products in TiP TV magazine. HealthGate
may choose to sponsor TiP programming, subject to program availability. Pricing
for such sponsorship will be set at the then current sponsorship market price
less a discount to be agreed upon by the parties taking into consideration the
development costs expended by GEMS and other market factors, such discount to be
no more than 15%. In exchange for the discounted sponsorship fee, HealthGate
will be named as such program's sponsor.
6.5 BRANDING. Each party reserves all rights to any name, marks and
logos ("Marks") it may have. GEMS will have the right, but not the obligation,
to include its Marks in the Products, and to prohibit the inclusion of the Marks
or advertising of any company if such company is in competition with GEMS in any
goods or services distributed by GEMS. The Products will also include the name
of HealthGate, consistent with applicable General Electric Company corporate
guidelines including without limitation guidelines to avoid confusion of
customers, sales forces and others and to produce and maintain market identity.
Each use by HealthGate of any Marks of GEMS, whether in advertising or marketing
materials, company announcements or offering circulars, informational materials,
public events, or otherwise, shall
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be subject to the prior written approval of GEMS. Neither party shall by this
Agreement obtain any right, title, or interest in or to any Marks of the other
party or its affiliates. Accordingly, neither party shall use any Marks
confusingly similar to or likely to cause confusion with the Marks of the other
or of any other person or entity. This Section 6.5 shall survive termination of
this Agreement. Violation of this Section 6.5 shall entitle the owner of the
Xxxx to seek any legal or equitable remedy it has, whether arising under this
Agreement or otherwise.
ARTICLE VII
REVENUE SHARING
7.1 HEALTHGATE PRODUCTS. Unless otherwise agreed by the parties (as, for
example, to address promotional activities or volume accounts), all Revenues
collected by either party for subscriptions to HealthGate Products sold by GEMS,
or for upgrades, services or enhancements thereto (but not including GEMS
Products, which are addressed in Section 7.2 below) sold by either party, shall
be divided such that 70% of the List Price is received by HealthGate and the
remainder is received by GEMS.
7.2 GEMS PRODUCTS. Unless otherwise agreed by the parties (as, for
example, to address promotional activities or volume accounts), all Revenues
collected by either party for subscriptions to GEMS Products sold by GEMS, or
upgrades, services or enhancements thereto sold by either party, shall be
divided such that:
(a) 70% of the List Price of any HealthGate Products components in
such GEMS Products is received by HealthGate and the remainder is received by
GEMS, except as provided in Subsection (b) below.
(b) If such GEMS Products or upgrades, services or enhancements
thereto shall have been created or developed by HealthGate at its own expense
or partial expense by agreement of
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the parties under Section 2.3 above, then the division of Revenues shall be
modified as the parties agree upon in advance of such creation or development
taking into consideration the expense so incurred by HealthGate.
7.3 ADVERTISING REVENUE. All Revenues collected by either party for
advertisements or other promotional material included in the Products during
the term of this Agreement shall be divided 90% to HealthGate and 10% to GEMS.
7.4 E-COMMERCE. All Revenues collected by either party from e-commerce
offered on the Products not involving products or services of GEMS or its
affiliates, shall be divided 90% to HealthGate and 10% to GEMS. Any Revenues
collected by either party from e-commerce offered on the Products involving
products or services of GEMS or its affiliates, for the first two and one-half
years following the date of this Agreement, shall be retained 100% by GEMS, and
any such Revenues collected after such two and one-half year period shall be
divided as the parties negotiate in good faith considering (a) the level of
effort expended by each party to enable such e-commerce, (b) prevailing market
conditions, (c) comparable third party web-based distribution fees, (d) the
price points of GEMS Products, (e) the volume of sales and (f) in no event shall
be any less favorable to GEMS than the fees charged by HealthGate to others.
7.5 SURVIVAL OF REVENUE SHARING. The Revenue sharing arrangements set
forth in this Article VII shall survive the termination or expiration of this
Agreement with respect to then active Products customers (i.e. those with which
an end user agreement is then in effect) and Products customers for which GEMS
has a signed commitment.
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ARTICLE VIII
ACCOUNTING
8.1 ACCOUNTING. Reconciliation of accounts in accordance with the
Revenue sharing arrangements set forth in Article VII above shall be made within
45 days after each calendar quarter with respect to Revenues received during
such calendar quarter, by each party delivering to the other party a check (or
by making a wire transfer or in such other reasonable manner as the receiving
party may direct) for the amount due without offset for any amount due from the
other party together with the report described in Section 8.2 below.
8.2 RECORDS. Each party shall keep complete and accurate records showing
its Revenues hereunder, for the term of this Agreement and a period of one year
thereafter. Each party shall deliver to the other party a written report
accompanying each of the payments described in Section 8.1 above setting forth
the share of Revenues due to the other party and the calculation thereof.
ARTICLE IX
WEBSITE LINKING
9.1 LINKING. HealthGate will make available the HealthGate Products for
linking to GEMS websites, and will provide all necessary formatting services and
support for such linking in a manner that is invisible to users. Such services
and support will be on such reasonable terms and conditions as the parties may
agree upon, and no less favorable to GEMS than those granted to others in
similar circumstances.
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ARTICLE X
WARRANTIES AND INDEMNITIES
10.1 REPRESENTATIONS AND WARRANTIES OF HEALTHGATE. HealthGate represents
and warrants to GEMS as follows:
(a) that HealthGate is a validly existing corporation in good
standing under the laws of the State of Delaware;
(b) that HealthGate has full corporate power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder;
(c) that HealthGate has full right, power and authority to enter
into and perform its obligations under this Agreement, and that HealthGate
has the right to grant to and vest in GEMS all rights and licenses set
forth in this Agreement, free and clear of any and all claims, rights and
obligations whatsoever;
(d) that except for any portion of the Products that may be
created by GEMS, to the knowledge of HealthGate no part of the Products is
or shall be an imitation or copy of, or shall infringe upon, any other
materials, or shall violate or infringe upon any common law or statutory
rights of any person or entity, including without limitation rights
relating to defamation, contract, trademark, patent, copyright, trade
secret, privacy or publicity;
(e) that HealthGate has not sold, assigned, leased, licensed, or
in any other way disposed of or encumbered any of the rights or licenses
granted to GEMS in this Agreement other than a security interest granted
to Petra Capital LLC in connection with a subordinated loan to HealthGate;
and
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(f) that all versions of the Products delivered to GEMS under this
Agreement shall be free from any specification nonconformities,
significant programming errors or defects in workmanship or materials and
shall operate and run in a reasonable and efficient business manner
(including, with respect to HealthGate's internal systems only, being free
of any Year 2000 defects or nonconformities due to the passage of the year
1999). In the event of any breach of this Section 10.1 (f), other than
those based on any Year 2000 defects or nonconformities due to the passage
of the year 2000 not related to HealthGate's internal systems, HealthGate
shall, at its sole expense, immediately correct the nonconformity or other
defect.
10.2 REPRESENTATIONS AND WARRANTIES OF GEMS. GEMS represents and warrants
to HealthGate as follows:
(a) that GEMS is a validly existing corporation in good standing
under the laws of the State of New York;
(b) that it has full corporate power and authority to execute and
deliver this Agreement and to perform the transactions contemplated
hereunder; and
(c) that, with respect to any portion of the Products that may be
created by GEMS, to the knowledge of GEMS no such portion of the Products
is or shall be an imitation or copy of, or shall infringe upon, any other
materials, or shall violate or infringe upon any common law or statutory
rights of any person or entity, including without limitation rights
relating to defamation, contract, trademark, patent, copyright, trade
secret, privacy or publicity.
20
10.3 INDEMNITY. Each party will indemnify and hold harmless the other'
from and against any liability, costs or expenses (including attorney fees)
based upon any action, claim or assertion inconsistent with the warranties and
representations of Section 10.1 or 10.2 above. The indemnified party shall
promptly notify the indemnifying party of any such action or assertion and shall
cooperate in the defense thereof. The indemnifying party shall have the right to
direct the defense of any such action, claim or assertion, subject to the
indemnified party's approval of any settlement thereof and the indemnified
party's right to take such actions as may be reasonably necessary to protect its
rights hereunder.
10.4 INSURANCE. HealthGate will maintain insurance coverage for product
liabilities and other claims arising from the Products in the policy amount of
$5 million combined single limit per occurrence and $5 million in the aggregate
(with a self-insured retention of $10,000 per occurrence and $50,000 aggregate).
During the term of the Agreement, HealthGate covenants to maintain such
insurance policy and to take such steps, as necessary, to name GEMS as an
additional insured under such insurance policy. Evidence of the existence and
amount of the insurance policy shall be provided by HealthGate to GEMS upon GEMS
written request.
10.5 NO OTHER WARRANTIES. THE WARRANTIES EXPRESSED IN THIS ARTICLE X ARE
IN LIEU OF ALL OTHER WARRANTIES, WHETHER EXPRESSED OR IMPLIED OR ARISING BY
PERFORMANCE, CUSTOM OR USAGE IN THE TRADE, AND THE PARTIES HEREBY DISCLAIM ALL
OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
10.6 NO CONSEQUENTIAL DAMAGES. Except as expressly set forth herein, in
no event shall either party be liable under, or in connection with, this
Agreement for any indirect, special,
21
incidental, punitive or consequential losses, expenses or damages whatsoever,
including, but not limited to, loss of revenue or profits or increased costs as
a result of inability to operate, inability to fulfill contracts with third
parties, or similar matters or events. The limitations, exclusions and
disclaimers in this Agreement shall apply irrespective of the nature of the
cause of the action or demand, including but not limited to breach of contract,
negligence, tort or any other legal theory and shall survive any breach or
breaches and/or failure of the essential purpose of this Agreement, or any
remedy contained in this Agreement.
ARTICLE XI
CONFIDENTIALITY
11.1 OBLIGATION. Each party agrees that any Confidential Information
furnished or disclosed to it by the other party shall be treated as confidential
by it and used by it only as expressly authorized herein, that it shall not
disclose such Confidential Information to others without the prior written
consent of the disclosing party, and that it shall take all necessary measures
to protect the confidentiality of such Confidential Information that it takes to
protect its own similar proprietary or confidential information (and that such
measures shall in no event be less than those required by law to protect the
confidentiality and proprietary nature of such information), EXCEPT insofar as:
(a) expressly provided otherwise herein or in any other written
agreement with the disclosing party or required by law;
(b) such Confidential Information is necessarily disclosed by its
use in products manufactured and sold or otherwise disposed of by the
disclosing party; or
22
(c) such Confidential Information is necessarily disclosed to bona
fide subcontractors of the receiving party provided that such
subcontractors agree to maintain such Confidential Information in
confidence and to protect such Confidential Information from disclosure to
others to the extent of the foregoing requirements of this Section and to
limit their use of such Confidential Information to fulfilling their
obligations as a subcontractor or supplier.
11.2 COOPERATIVE DEVELOPMENT. Without limiting the generality of Section
11.1 above, should any joint development effort be undertaken by the parties
involving software owned by GEMS, then GEMS may in its sole discretion make
source code for such software available to HealthGate to the extent reasonably
necessary for HealthGate to perform the development or maintenance obligations
agreed upon by the parties or provided hereunder. HealthGate shall not use such
source code or software except in performing such obligations and shall not
disclose it to anyone other than its employees who both (a) require access
thereto in order to allow HealthGate to perform such obligations and (b) have
agreed in writing to refrain from using or disclosing it other than as permitted
hereunder.
11.3 OTHER CONFIDENTIALITY AGREEMENT. Except to the extent modified
hereunder, all the obligations of the Confidentiality Agreement made as of March
25, 1999 between General Electric Company and HealthGate remain in full force
and effect as provided thereunder.
23
ARTICLE XII
TERM AND TERMINATION
12.1 TERM. This Agreement shall be for an initial term of one year,
automatically renewed for successive one-year periods unless either party
delivers to the other party written notice of non-renewal at least 90 days prior
to the end of the initial term or any renewal term.
12.2 EARLY TERMINATION. This Agreement may be terminated by GEMS in its
sole discretion and shall have no further force and effect if, as of June 14,
1999, the transactions contemplated by the Warrant Agreement between General
Electric Company and HealthGate dated on or about the date hereof have not been
closed and the Warrant to be issued to General Electric Company thereunder has
not been issued by HealthGate. GEMS shall have no liability for such termination
and shall retain any other rights or remedies it may have in regard to such
termination. If either party commits a material breach of this Agreement or the
Warrant Agreement, then the other party may deliver written notice of such
breach to the breaching party. If the breaching party fails to remedy such
breach within 30 days after such notice, then the other party may terminate this
Agreement by written notice of termination. A material breach shall be deemed to
include without limitation any failure to remit in a timely manner amounts due
under Article VII above, any violation by HealthGate of the exclusive
distribution rights of GEMS under Article IV above, any breach of any of the
representations or warranties of Article X, any violation by HealthGate of any
of the Confidentiality Obligations of Article XI, and any dissolution,
insolvency, bankruptcy, appointment of a receiver or trustee, making of an
assignment for the benefit of creditors, the commencement of any proceeding
(state or federal) relating to the administration of creditors rights generally,
or the failure generally to pay debts as they become due.
24
12.3 REMEDIES. Upon any termination of this Agreement pursuant to this
Article XII, each party shall have all rights and remedies available to it
hereunder and at law or in equity, it being understood that the exercise of any
one remedy is not meant to be exclusive of any other remedy and that all
remedies hereunder are intended to be cumulative. Following termination, the
terminating party may suspend any and all performance hereunder except as
provided under Section 12.4 below.
12.4 SURVIVAL AND POST-TERMINATION RIGHTS. The provisions of Sections
5.3, 5.4 and Article VIII (to the extent provided in each such Section and
Article) and Articles I, X, XI and XIII and Sections 3.1 through 3.4, 4.7 and
6.5 shall survive any termination or expiration of this Agreement. No
termination or expiration shall in any way terminate or otherwise affect the
right of any user or customer of GEMS with respect to any Products.
ARTICLE XIII
MISCELLANEOUS
13.1 ENTIRE AGREEMENT. This Agreement together with the Warrant Agreement
constitute the entire agreement and understanding of the parties with regard to
the subject matter hereof. This Agreement shall not be modified or supplemented
except by a written instrument signed by both parties.
13.2 NOTICES. Any notice required or permitted under this Agreement shall
be deposited in First Class Mail addressed as follows:
25
If to GEMS:
GE Medical Systems
0000 Xxxxx Xxxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attention: General Manager, E-Commerce
Mail Code: 440
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
GE Medical Systems
0000 Xxxxx Xxxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attention: General Counsel
If to HealthGate:
HealthGate Data Corp., Inc.
00 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: GEMS Project Manager
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to:
Xxxxxxx X. Xxxx, Esq.
Rich, May, Xxxxxxxx & Xxxxxxxx, P.C.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
13.3 NO ASSIGNMENT BY HEALTHGATE. Neither this Agreement nor any rights
or obligations may be assigned or transferred by HealthGate except with the
written consent of GEMS. GEMS may assign this Agreement freely to any affiliates
of GEMS, and may assign to non-affiliates of GEMS to the extent such assignments
are not contrary to pre-existing obligations by HealthGate to its content
providers (in which case HealthGate will exert its best efforts to obtain
waivers of such obligations). GEMS shall notify HealthGate of any assignment
26
that is not to a GEMS affiliate, and the assignee shall agree in writing to
assume all obligations of GEMS. Any transaction or series of related
transactions pursuant to which any entity or person (including without
limitation any of their respective affiliates) first acquires after the
effective date of this Agreement, directly or indirectly, an aggregate amount of
fifty percent (50%) or more voting control or fifty percent (50%) or more of the
equity securities ("Control") of HealthGate (or of any entity directly or
indirectly having Control of HealthGate) or by contract or otherwise obtains the
right to appoint at least fifty percent (50%) of the Board of Directors of
HealthGate (or any entity directly or indirectly having Control of HealthGate),
shall be deemed an assignment of rights under this Agreement for purposes of
this Section 13.3. Further, any sale, assignment, pledge, hypothecation, or
exclusive license of any of the copyrights, patents, trade secret rights or
other intellectual property rights in or relating to any of the Products (other
than that security interest referenced in Section 10.1(e) above) shall be deemed
an assignment of this Agreement for purposes of this Section 13.3. Any purported
assignment or other transaction in violation of this Section 13.3 shall be null
and void and of no force or effect.
13.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without reference to
any conflict of law principles.
13.5 ARBITRATION. Any dispute under this Agreement shall be finally
resolved by arbitration by a panel of three arbitrators (or such other number as
the parties may agree to) in New York, New York, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitrators may award attorney fees to the prevailing party to the extent they
may deem appropriate. The parties hereto waive all rights to trial by jury in
any
27
action, suit or proceeding brought to enforce or defend any rights or remedies
arising under or in connection with this Agreement, whether grounded in tort,
contract or otherwise.
13.6 CONFIDENTIALITY. No public announcements may be made of the contents
of this Agreement except as mutually agreed in writing.
13.7 RELATIONSHIPS OF THE PARTIES. Each party is an independent
contractor under this Agreement. No party shall have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of the other party or to bind the other party to any contract, agreement or
undertaking with any third party.
13.8 INTERPRETATION. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words "included", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." References to a person are also to its successors and assigns, and
references to any statute are also to all rules, regulations and orders
promulgated thereunder. No rule of construction shall be applied to the
disadvantage of a party by reason of that party having been responsible for the
preparation of this Agreement or any part hereof.
28
Executed on the dates set forth below.
GE Medical Systems, a division of
General Electric Company
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Title: /s/ GM Global Business Development
-----------------------------------
Date: June 11, 1999
------------------------------------
HealthGate Data Corp.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Title: Chief Executive Officer
------------------------------------
Date: June 11, 1999
------------------------------------
29
EXHIBIT A
List of exclusive Companies and Institutions
1. Harvard Medical Complex (except Spalding Rehabilitation Hospital and
Cambridge Health Alliance)
2. Columbia Pres.-New York Hospital and associated Columbia and Cornell
teaching hospitals (except New Milford Hospital)
3. Sloan Kettering Cancer Hospital.
4. University of Massachusetts @ Worcester (except University of
Massachusetts Medical Center)
5. Hospital for Special Surgery, NYC
6. Hospital of the University of Pennsylvania, Philadelphia
7. Xxxxxx Xxxx Xxxxxxx Medical Center, NJ
8. Xxxxx Xxxxxxx Medical Center and Associated Hospitals
9. National Inst. of Health Clinical Center and Suburban Hosp, Bethesda
10. Duke Medical Complex
11. Xxxxxx Xxxx Medical Center and Associated Hospitals
12. Emory University Complex
13. University of Alabama
14. Vanderbilt Complex
15. University of Pittsburgh complex
16. Cleveland Clinic
17. University of Toronto complex (except Toronto Hospital)
18. XxXxxx University Complex
19. University of Western Ontario, London, Ont.
20. University of Chicago complex
21. University of Illinois complex
22. Northwestern University complex
23. Medical College of Wisconsin
24. University of Wisconsin, Madison
25. Mayo Clinic
26. Texas Medical Center/U Texas @, MD Xxxxxxxx Xxxxxxx,
00. University of Texas Dallas (Southwestern Medical Center, Parkland
Hospital)
28. University of Iowa
29. University of Utah
30. University of Washington complex, Seattle
31. University of British Columbia/Vancouver General Hosp. (except Vancouver
General Hospital)
32. UCSF complex
33. Stanford
34. UCLA complex
35. Cedars Sinai Medical Center
36 Columbia / HCA
37. HealthSouth
EXHIBIT B
LIST OF EXCLUDED PRODUCTS OR SERVICES
Products/Services
Versions of CHOICE products for content syndication to other web-sites
(e.g., WebMD and AHN).
Versions of CHOICE products for Corporate-Wellness programs
(non-Healthcare Marketplace).
The suite of activePress product and services (terms and conditions to be
agreed upon on a case-by-case basis).
Content
Xxxxxxxxx-Synergy
Provider permission required
Complete Guide to Medical Tests
Re-negotiating contract.
Complete Guide to Pediatric Symptoms, Illness & Medications
Re-negotiating contract.
Complete Guide to Prescription and Non-Prescription Drugs
Re-negotiating contract.
Complete Guide to Sports Injuries
Re-negotiating contract.
Complete Guide to Symptoms, Illness & Surgery
Re-negotiating contract.
Xxxxx Book Reviews
Re-negotiating contract; may not offer to CHOICE
HCIA Cost Report Database
Re-negotiating contract.
HCIA DRG Summary Database
Re-negotiating contract.
HCIA Health Care Professionals Database
Re-negotiating contract.
HCIA Managed Care Database
Re-negotiating contract.
HCIA Medical Rehabilitation Facilities Database
Re-negotiating contract.
HCIA National Inpatient Profile Database
Re-negotiating contract.
HCIA National Link Study
Re-negotiating contract.
HCIA National Outpatient Profile Database
Re-negotiating contract.
HCIA Nursing Home Database
Re-negotiating contract.
HCIA Retirement Facilities Database
Re-negotiating contract.
Los Angeles Times Syndicate News Services
Cannot offer to CHOICE except as provided through Healthy Living
Medical Software Reviews
Re-negotiating contract.
New England Journal of Medicine
Provider permission required
Physicians World Communications Group Continuing Medical Education programs
Distribution rights for CHOICE not available
PsycFIRST
Re-distribution rights not available
PsycINFO
Distribution limited to block of citations only
Reuters Medical News
Distribution rights for CHOICE not available
Well-Connected Consumer Health Reports
Re-negotiating contract; re-distribution to other Web sites not available as
part of CHOICE
EXHIBIT C
PROHIBITED DISTRIBUTORS
1. Siemens
2. Toshiba
3. Philips
4. ATL
5. Picker
6. Acuson
7. ADAC
8. Hitachi
9. Hewlett Packard
10. AGFA
11. Spacelabs
EXHIBIT D
LIST PRICING
Patient and Consumer Package USD $28,000
-----------------------------------------------------------------
Patient Series Content:
Adult Health Advisor
Behavioral Health Advisor
Pediatric Health Advisor
Woman's Health Advisor
Seniors Health Advisor
Well-Connected Patient Education Reports
The Consumer Series Content:
Health News
The Wellness Center
Complete Guide to Prescription and Non-Prescription Drugs
Complete Guide to Symptoms, Illness, and Surgery
Diagnostic Procedures Handbook
Medical Dictionary
Healthy Eating
Healthy Parenting
Healthy Sexuality
Healthy Woman
Healthy Man
Healthy Mind
Healthy Athlete
Included Features for Patient and Consumer Package:
o Customized "Web-zines" for front page of the articles
o Three articles per web-zine per month
o Standard "Send to a friend"
o Quarterly usage reports
o Authentication for Patients
o 1500 authentication cards with hospital ID number (additional authentication
cards can be made available for USD $200.00 per 1,000).
o Customized "Intelligent promotional" Service
o Includes hosting of up to 10 banner ads
o Customized "Commercial advertising and sponsorship" spots
Professional Package USD $20,000
-----------------------------------------------------------------
Included Content
MEDLINE
AIDSLINE
AIDSDRUGS
AIDSTRIAL
CANCERLIT
BIOETHICSLINE
HEALTHSTAR
Drug Information Handbook
PsycINFO; 5000 citations
EMBASE; 2,000 citations
CME's (Continuing Medical Education) unlimited for [130] physicians
CINAHL
Medical News
Detwilers Directory
Included Features for Professional Package:
o Standard "Send to a friend"
o Quarterly reports on the usage
o Authentication for Professionals
o 750 authentication cards with hospital ID number
o Customized "Intelligent promotional" Service
o Includes hosting of up to 10 banner ads
o Commercial advertising and sponsorship Module
Required customization and implementation USD $ 7,000
--------------------------------------------------------------------------
Included Features:
o A Standard design template
o Customized coloring scheme
o Customized sizing of the templates
o Customized logo placement
o Customized front page for each of the selected series
o Customized linking to and from the Institution's Web site
o Limited Customized authentication scheme, including combination of
o Linked URL
o Linked Domain address
o Password and Username
o Quarterly usage report
o User support at HealthGate
o Printing Module for the Patient Series
o School Nurse Communication module
o Additional banner ads, package of 5
o Resource Locator Module with content sensitive links
o Find a doctor
o Find a facility
o Find a service
Itemized Pricing
-------------------------------
Consumer / Patient Series Total USD $28,000
Professional Series Total USD $20,000
Total License Fee USD $48,000
Implementation Fee (one-time) USD $7,000
-----------
Package Total USD $55,000
