Exhibit 10.9
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This will serve as a memorandum of agreement for a joint venture between
CommonHealth and Xxxxxxxxxxx.xxx, setting forth the present intentions of the
parties with respect to the formation of a new company ("Newco"). Newco is to be
the premier company offering Internet and new media based marketing campaigns
and programs for healthcare audience.
Below are the points of understanding between CommonHealth LLP and
Xxxxxxxxxxx.xxx with respect to a joint venture to be created by the two
Parties. It is anticipated that Newco will be formed as an LLC, subject to
confirmation.
Name: Newco - The parties will agree on the name of Newco.
This joint venture will also be entitled to carry the
appellation "A CommonHealth Venture" (with the
CommonHealth logo) and "A Xxxxxxxxxxx.xxx Venture" (with
the Xxxxxxxxxxx.xxx logo)
Mission of Newco: To create and execute a new Business Plan focused on
pharmaceutical and other health care companies in need
of innovative multi-media approaches to marketing their
products, which will encompass all forms of media
including: the Internet, print, television, direct
marketing and others.
Staffing of Newco: Upon the signing of this Letter of Intent, each Party
will contribute one appropriate, mutually agreed, senior
marketing professional on a full-time basis to develop
Newco's Business Plan and to be paid by each respective
Party. One senior marketing professional will be agreed
by the Parties to act as Managing Director of Newco.
Further staffing, compensation, budget and all other
material business decisions will be the responsibility
of the Managing Director, who will report regularly to
the full Board of Newco. Each of the Parties will bear
their own cost of preparation of the Business Plan.
Resources Available
to Newco: The Parties agree to make available and will xxxx to
Newco at normal rates for the human resources required
to carry out the Business Plan. Clients will then be
billed by Newco for these services and the Parties will
be correspondingly paid or reimbursed pursuant to a
service or "loan-out" agreement entered into by Newco
and each Party. To the extent that Newco hires its own
employees, Newco will pay salaries and other costs.
Newco will xxxx out these resources and other services
at market rates. Newco
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will be entitled to contribution from the Parties pro
rata in accordance with their xxxxxxxx to Newco. Premium
xxxxxxxx of Newco will be shared in proportion to their
ownership of Newco. This mechanism will be clarified in
the Business Plan and definitive documentation
concerning their ownership and the operation of Newco.
Intellectual Property: Intellectual property created by Newco will be owned by
Newco and each of its respective parties, as follows:
Intellectual Property brought in to Newco or developed
by either of the parties will remain the Intellectual
Property of the contributing or developing Party
exclusively, and Intellectual Property jointly developed
by the Parties will be jointly owned by the Parties.
Board of Newco: Newco's Board will initially consist of six (6) persons,
including the Managing Director. Each Party will
designate an equal number of Directors, and initially
will include of Xx. Xxxxxx Xxxxx, Xx. Xxxx Xxxxxx, Mr.
Xxxxxx Xxxxxxxx and Xx. Xxx Xxxxxxxxx. It is currently
expected that the Managing Director will be Xxxxxxx
Xxxxxxx.
Exchange of
Board Members: Upon signing of this memorandum of understanding, one
designee of Mediconsult, to be approved by CommonHealth,
will join the Management Committee of CommonHealth.
Mediconsult may have a CommonHealth representative on
their Board or Management Committee.
Location of Newco: Parsippany, NJ, in office space currently occupied by
CommonHealth or an affiliate.
Selected Expectations
of Newco Performance: The Parties agree to use their best efforts to have
Newco's Business Plan finalized within 14 days of the
signing of this memorandum of understanding and to have
Newco identify Prospective Business within 28 days of
the signing of this memorandum of understanding.
Ownership/Initial
Capital Contribution: Final approval of this joint venture is contingent upon
acceptance by both parties of the completed Business
Plan and definitive
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documentation concerning their ownership and the
operation of Newco.. Each of the Parties will own 50% of
the equity of Newco. It is not expected that Newco will
have any debt. Upon completion of the Business Plan and
its approval by each Party, each Party will initially
contribute the capital prescribed by the approved
Business Plan to Newco and, if the business objectives
of Newco are being accomplished, will continue to
contribute on a quarterly basis capital adequate to
enable Newco to carry out its Business Plan on a timely
basis. If requested by Mediconsult, CommonHealth will
loan the funds required for Mediconsult's capital
contributions for the first six months, such loan to be
represented by a Note bearing interest at prime
percentage and re-payable the earlier of three years
from the date hereof, within 90 days after the
termination of the agreement or through 25% of any and
all revenue received by Mediconsult pursuant to its
billing of services to Newco and through 100% of
distributions of profit.
Newco Proprietary
Prospects/Revenue: Newco will identify specific business prospects
("Prospective Business") and create an ongoing list of
these prospects (the "List"). All revenue emanating from
projects conducted by Newco from the List is to accrue
to Newco as described above.
Right of First Refusal: Newco shall have a right of first refusal to accept a
major (i.e. in excess of a specific number of hours or
dollars to be specified later.) prospective business
opportunity, that could be considered consistent with
the Mission of Newco, that comes to the attention of
either CommonHealth or Mediconsult (the "Sourcing
Parties"). The Prospective Business opportunities will
be identified with the following criteria:
o Xxxxxxxxxxx.xxx opportunities that encompass
significant non-Internet aspects
o CommonHealth opportunities that encompass
significant Internet aspects
o Opportunities that either Party desires to pursue
through Newco with the approval of the other
Party.
The Board of Newco shall either accept this project and
add such Prospective Business to the List, or allow the
Sourcing Party to pursue the project independently.
However, media buying on or for web sites owned or
managed by Mediconsult is to be excluded from
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Newco, unless desired to be pursued through Newco by
Mediconsult and accepted by Newco.
An example will be prepared and agreed upon by the
Parties.
Termination/
Buyout Option: To be agreed upon by the Parties. (CommonHealth to
draft)
Cross Non-Compete: Neither Party shall employ or solicit for employment an
employee of the other Party during the term of this
Agreement or within one (1) year following its
termination. A cross non-compete will also be included
in the final joint-venture agreement.
Accounting: Newco will comply with WPP Group and Mediconsult
budgeting and financial reporting systems requirements.
The Parties intend to enter into one or more formal agreements
incorporating the terms hereof. However, until such formal agreement or
agreements are signed, this memorandum of agreement will be deemed a binding
agreement of the Parties, governed by and construed in accordance with the laws
of the State of New Jersey.
IN WITNESS WHEREOF, the Parties have executed this memorandum of agreement
as of February 23, 1999.
COMMONHEALTH LLC XXXXXXXXXXX.XXX, Ltd.
By: Xxx Xxxxxxxxx By: Xxxxxx Xxxxx
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