Exhibit 10.5
AGREEMENT
This Agreement is made as of the 31st day of January, 1997 between
HealthGate Data Corp. ("HealthGate") a Delaware Corporation having its principal
place of business at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxxxxx
00000-0000 and Physicians World Communications Group ("PW") a New Jersey
Partnership having its principal place of business at 0 Xxxxx Xxxxx, Xxxxxxxx,
XX 00000 (collectively referred to as "the Parties").
WHEREAS:
HEALTHGATE is an experienced provider of quality healthcare and medical
information through the Internet and World Wide Web.
HEALTHGATE has and will continue to develop an extensive base of
Physicians seeking information by computer access.
HEALTHGATE wishes to maintain special relationships with its major
commercial supporters.
HEALTHGATE is seeking a partner to develop and manage the expansion of
continuing medical education ("CME") activities, services and products
on the HEALTHGATE Network.
AND WHEREAS;
The Professional Postgraduate Services Division of PW ("PPS") is an
accredited provider of CME.
PW maintains an account management and sales organization in frequent
contact with the pharmaceutical, biotechnology and medical device
industries.
PW has extensive experience in creating, developing, implementing and
managing a wide range of CME formats.
PW has worked successfully with many leading medical schools, teaching
hospitals and thought leader physicians in the creation and
implementation of successful CME programs.
PPS has formed and maintains an independent board of CME and medical
experts to guide program development and assure independent, objective,
balanced and scientific rigorous program content.
PW is recognized as a leader in the CME Community.
PW is seeking new low cost methods of conducting CME activities and PW
is seeking a partner to make available its CME programs on-line through
the Internet and World Wide
Web.
NOW THEREFORE: THE PARTIES AGREE TO PURSUE THE DEVELOPMENT AND EXPANSION OF CME
ON HEALTHGATE AS FOLLOWS:
Pursuant to the terms and conditions set forth herein, (i) HEALTHGATE
hereby agrees to utilize PW as the exclusive (subject to the
limitations described below) CME provider for physician education
programs to be carried on the HEALTHGATE network, (ii) PW hereby agrees
to utilize HEALTHGATE as the exclusive (subject to the limitations set
forth below) distributor of CME programs through the Internet and World
Wide Web. PW and HEALTHGATE agree to review, on a non-binding basis,
additional areas for PW representation, such as nurse practitioner,
technologist, hospital administrator, pharmacist, physician assistant
and patient education programs based on the initial success of
physician education programs.
Notwithstanding HEALTHGATE's agreement to utilize PW as the exclusive
CME provider for the HEALTHGATE network (i) HEALTHGATE may continue to
offer CME programs created, developed or implemented by or in
conjunction with Boston University School of Medicine; (ii) such
exclusivity shall not apply to acquisitions of CME programs acquired by
HEALTHGATE as described in the Non-Competition and Non-Solicitation
Section below; (iii) such exclusivity shall not apply to distribution
of physician education or CME programs with gross revenues to
HEALTHGATE in excess of $250,000; and (iv) such exclusivity shall
terminate upon written notice of HEALTHGATE to PW if the gross payments
received and retained by HEALTHGATE for the PW CME programs do not
exceed the annual minimum gross revenue amounts set forth in the
Business Plan (as defined below) for the years 1997 through 2001.
Notwithstanding PW's agreement to utilize HEALTHGATE as the exclusive
on-line distributor for PW's CME programs, PW may offer CME programs on line as
described in the Non-Competition and Non-Solicitation Section below.
DEVELOPMENT OF A BUSINESS PLAN:
Within three (3) months after execution of this Agreement the Parties
will develop a detailed written business plan for CME on the HEALTHGATE
network (the "Business Plan"). HEALTHGATE will develop a plan to
provide network background and network marketing sections including its
plans for expanding service. PW will develop a plan to identify and
secure companies to provide grants for physician education programming,
a sales call plan, a plan for operation of an educational advisory
board, a plan to solicit programs and participation from medical
schools and teaching hospitals, and other activities necessary for the
marketing of physician education programs. The Business Plan will
include a schedule of the annual minimum CME gross revenues to be
attained by PW for HEALTHGATE for the years 1997 through 2001 that will
be required for PW to maintain the exclusivity provided hereunder. Each
party will provide the other with
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appropriate background material and research on its past activities to
enable each party to properly plan its activities. Such materials shall
be subject to the Confidentiality Section, below. The Business Plan
shall include more detailed descriptions of the responsibilities of the
parties, compensation and commissions, and collections and payments as
outlined below. The Business Plan may be updated, reviewed, revised and
approved annually. The initial Business Plan and annual revisions
thereto shall be subject to the written approval of both parties.
RESPONSIBILITIES OF PW:
(a) PW will utilize its sales force, unless and until the Business Plan
provide otherwise, to call on the healthcare industry to solicit grants
for physician education programs on HEALTHGATE network.
(b) PW will solicit from and/or co-develop with leading medical
schools, teaching hospitals, publishers and others, CME content for
HEALTHGATE distribution.
(c) PW will explore the establishment of a comprehensive Postgraduate
Medical curriculum "PPS University" with HEALTHGATE.
(d) PW will, whenever appropriate, recommend CME on the HEALTHGATE
network as a distribution channel or secondary distribution channel for
all existing and selected 1995/1996 CME Programs.
(e) PPS will be responsible for quality assurance review of its CME and
physician education programming on the HEALTHGATE network. This may be
done by a sub-set of the existing PW Education Advisory Board.
Alternately the sponsored education programming offered on the
HEALTHGATE network will be vetted through a new third-party review
board established by PW for this purpose. Notwithstanding the
foregoing, all content on HEALTHGATE's network remains subject to
review and approval by HEALTHGATE's Physician Advisory Panel as long as
such review meets the standards and regulations of the Accreditation
Council for Continuing Medical Education ("ACCME").
(f) PPS will provide CME credit on programs properly developed and
suitable for such designation. New CME programming will be created in
compliance with guidelines, standards and regulations so as to allow
CME credit to be awarded.
(g) PW will handle all proposal development, invoicing and collections
required, using methods and reports acceptable to HEALTHGATE.
(h) PW will provide HEALTHGATE with such notice of programming
requirements as to allow HEALTHGATE adequate time to incorporate new
activities on the network.
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(i) PW will hold and maintain copyright for all its physician CME
programs.
RESPONSIBILITIES OF HEALTHGATE:
(a) HEALTHGATE will be responsible for the installation, maintenance,
operation and technology of the network and for obtaining enrollment of
new subscribers.
(b) HEALTHGATE agrees to provide messages on the HEALTHGATE network in
support of physician education activities.
(c) HEALTHGATE will be responsible for assuring that its network will
have sufficient capacity to accommodate the CME programming secured by
PW for HEALTHGATE.
(d) HEALTHGATE shall be responsible for collection of fees from
physicians and others participants accessing the CME programs through
HEALTHGATE's network.
(e) HEALTHGATE will provide to PPS all information required to be
maintained by PPS in accordance with the standards and regulations of
ACCME. This information will include, but will not be limited to,
course topic, enrollment by physicians, credit hours issued and
accrediting body.
JOINT RESPONSIBILITIES:
(a) The Parties will work together to develop a customer base with
managed care organizations based on the combined services of both
partners.
(b) The Parties will work together to assure that the speed of access,
graphic and content quality of the CME products offered are among the
best available in on-line services.
COORDINATION OF ACTIVITIES:
The parties agree to hold monthly meetings in person or by phone to
update and discuss activities being conducted under this Agreement.
These meetings will include senior management of PW, for example,
Xxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxxxx and other PW
employees involved in activities supporting CME on HEALTHGATE where
appropriate, and senior management of HEALTHGATE including Xxxxxxx
Xxxxx and Xxxx Xxxxxx and others, where appropriate.
In addition, quarterly or semi-annual senior management meetings will
be held to discuss longer range plans and resolve other issues.
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NON-COMPETITION AND NON-SOLICITATION:
(a) PW will not contract with any other on-line service for the
distribution of physician education or CME programs except as required
by its large clients so long as this Agreement is in force. A large
client is defined as contracting with PW for fee revenue in excess of
$250,000 in any calendar year.
(b) If HEALTHGATE or any of its affiliates or subsidiaries acquires or
obtains control of any other computer network system which includes
physician education or CME programs. HEALTHGATE shall negotiate with PW
for PW to become the CME representative of such acquired network. If a
mutually agreeable arrangement can not be negotiated, HEALTHGATE may
independently offer such physician education or CME program on its
network. If PW believes, in its reasonable judgment, that the addition
of such CME programs on the HEALTHGATE network will negatively impact
PW's reputation and image within the CME community, PW will give
HEALTHGATE written notice of its concerns and the deficiencies it
believes exist in such CME programs, and HealthGate shall have a 60-day
period after receiving such notice to cure the deficiencies specified
therein. If such deficiencies are not cured within such 60-day period,
PW may terminate this Agreement in accordance with the termination
provisions set forth herein.
(c) HEALTHGATE will not contract with any other medical education
company or CME provider other than PW and PPS, except as provided by
the exceptions to exclusivity described in this Agreement.
(d) Both parties agree to refrain from soliciting for employment or
hiring employees of the other party during the term of this Agreement
and for a period of two (2) years following the expiration of the
Agreement.
COMPENSATION AND COMMISSIONS PAYABLE TO PW AND HEALTHGATE:
(a) Physician Education Programs
Physician education programs to be offered on the HEALTHGATE network
usually will be derived from one of three sources, (1) PW with funding
from grants or self generated CME programs, (2) commercial
organizations with or without grant funding and (3) non-profit
organizations with or without grant funding. Regardless of the source
of the program HEALTHGATE will be compensated for its charges for
network services and PW will be compensated for its charges for
selling, creating quality assurance, invoicing, collections and,
certification fees, all in accordance with the rates set forth in the
Business Plan. Such rates will not be changed without the mutual
agreement of the Parties. Actual rates incorporating HEALTHGATE and PW
fees will be combined into a single amount
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and published from time to time.
The Parties may agree to forego all charges to distribute a program
from a non-profit foundation, but neither has the ability to commit the
other to waive its normal charges.
(b) The Parties envision a monthly space charge to third parties for
commercially supported CME educational offerings. HEALTHGATE and PW
will agree the division of these charges during the development of the
business plan. The space charge may be waived for non-commercial
offerings by agreement of both Parties.
(c) For programs where there is a per participant fee, the fee will be
shared between PW and HEALTHGATE as defined in the business plan.
(d) Sales Generation Fee payable to HEALTHGATE
During the term hereof, in the event that HEALTHGATE generates a lead
for PW with respect to a specific program and communicates the lead in
writing in advance of PW's contact with the prospective client with
respect to such program and the lead results in a sale by PW,
HEALTHGATE shall be entitled to compensation in the amount of 1% of the
net fee revenue received by PW, to a maximum fee of $1,000 for such
lead.
(e) Sales Generation Fee Payable to PW:
During the term hereof, in the event that PW generates a lead for
HEALTHGATE in areas outside the scope of PW's responsibilities
hereunder and communicates the lead in writing in advance of
HEALTHGATE's contact with the prospective client with respect to such
program and the lead resulted in a sale by HEALTHGATE, PW shall be
entitled to compensation in the amount of 1% of the net fee revenue
received by HEALTHGATE, to a maximum fee of $1,000 for such lead.
COLLECTION AND PAYMENT PROCEDURES:
(a) PW shall xxxx for the programs and services for which PW or PPS is
the representative under this Agreement. PW will be responsible for
normal collection and follow-up. Should any payment from a client be
overdue more than forty five (45) days, PW shall notify HEALTHGATE and
the parties will jointly determine the next course of action.
(b) PW shall pay HEALTHGATE space charges and other costs allocated to
HEALTHGATE pursuant to the Business Plan within ten (10) days of PW's
receipt of such funds from the program sponsor.
(c) HEALTHGATE shall pay PW its allocation of participants' fees within
ten (10) days of HEALTHGATE's receipt of such funds from the
participants.
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TERMS AND TERMINATION:
This Agreement shall commence as of the date hereof and shall remain in
effect for a five year period. The Agreement will automatically renew
for successive three (3) year terms, unless written notice is given by
either party not less than six months prior to the expiration date of
the Agreement. Notwithstanding the termination of this Agreement, each
party shall satisfy any obligation incurred pursuant hereto which
remains unfulfilled as of the expiration date.
Notwithstanding the foregoing, either party may terminate this
Agreement upon written notice to the other if the initial Business Plan
is not approved in writing by both parties within six months of the
date of the Agreement.
In the event the Agreement is terminated by HEALTHGATE all rights to
educational content developed by or secured by PW shall revert to PW.
The parties may agree terms under which all or some of this material
remains available on the HEALTHGATE network.
CONFIDENTIALITY:
(a) PW and HEALTHGATE each acknowledges and agrees that any information
that HEALTHGATE provides to PW relating to its operations and
technology, as well as any other plans, performance or data relating to
its services, or that any information that PW provides to HEALTHGATE
relating to its operations and methods of soliciting grants, arranging
for accreditation of programs, confidential information from grantors,
and plans for physician education programs, or any other data relating
to PW's operations shall be maintained in the confidence normally
accorded PW's or HEALTHGATE's own internal confidential material and
shall not be used during the term of this Agreement or for a period of
two (2) years thereafter, except for the purposes contemplated by this
Agreement and except for information which:
(1) is in or comes into the public domain (provided, however, that such
information does not come into the public domain as a result of any act
by PW or HEALTHGATE, as the case may be) or
(2) as shown by written records, was independently known to PW or
HEALTHGATE, as the case may be, at or prior to the time of disclosure;
or
(3) becomes known to PW or HEALTHGATE, as the case may be, through a
third party not under an obligation of confidentiality to HEALTHGATE or
PW.
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(b) It is understood that any and all property rights to the
confidential information disclosed to PW or to HEALTHGATE shall be and
remain in the disclosing party. At any time, upon written request, PW
or HEALTHGATE shall return to the other any and all written copies of
confidential information disclosed to it by the other which is then in
its possession. Each employee or consultant of PW or HEALTHGATE granted
access to all or any part of the confidential information received from
HEALTHGATE or PW shall be advised or this agreement not to disclose
such information except as provided herein.
NO ASSIGNMENT OF AGREEMENT:
Neither HEALTHGATE nor PW shall assign its rights or delegate the
performance of its duties under this Agreement without the prior
written consent of the other, except that PW or HEALTHGATE may assign
its rights or delegate the performance of its duties to a subsidiary or
affiliate, and except for an assignment in connection with the sale of
all or substantially all the business of HEALTHGATE or PW.
INDEMNIFICATION:
(a) HEALTHGATE agrees to defend, indemnify and hold harmless PW from
and any and all losses, costs, claims, demands, judgements and
liability (including reasonable attorneys' fees) resulting from PW's
performance under this Agreement, except to the extent that such
losses, costs, claims, demands, judgments or liabilities are due to the
negligence or wrongful act(s) of PW.
(b) PW agrees to defend, indemnify and hold harmless HEALTHGATE from
any and all losses, costs, claims, demands, judgments and liability
(including reasonable attorneys' fees) resulting from HEALTHGATE's
performance under this Agreement, except to the extent that such
losses, costs, claims, demands, judgments or liabilities are due to the
negligence or wrongful act(s) of HEALTHGATE.
BANKRUPTCY:
Should either of the Parties make an assignment for the benefit of
creditors, file a voluntary petition in bankruptcy, be adjudicated
bankrupt or insolvent in a court of law, the other party may in its
sole discretion terminate this Agreement without notice.
ENTIRE AGREEMENT:
(a) This Agreement contains the entire understanding between the
Parties concerning the subject matter hereof, and no representations,
inducement, promises, or agreements or otherwise, between the Parties
with respect thereto shall be of any force or effect.
(b) Nothing contained in this Agreement is intended or shall be deemed
to constitute
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HEALTHGATE or PW joint venturers or partners, the relationship or the
Parties being limited to the performance of the activities contemplated
herein in accordance with the terms of this Agreement.
CONSTRUCTION:
This Agreement shall be construed under the laws of the State of New
Jersey USA, applicable to contracts to be performed fully therein,
without giving effect to any statutes or principles of conflict of law.
Headings and titles of paragraphs herein are for convenience only and
should not be construed in any interpretation hereof.
The Parties acknowledge that HEALTHGATE provides healthcare and medical
information to physicians and others. Notwithstanding any other term or
condition of this Agreement or the Business Plan, HEALTHGATE's
obligations to PW relate solely to physicians' CME and this Agreement
does not limit or cover HEALTHGATE's operations which provide general
education or medical information to physicians via other content (i.e.,
MEDLINE, journals, monographs, databases, etc).
COUNTERPARTS:
This agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above indicated.
PHYSICIANS WORLD COMMUNICATIONS GROUP
By: /s/ Xxxxxx Xxxxxxx
------------------
Title: CEO
---------------
Date: January 31, 1997
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HEALTHGATE DATA CORP.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Title: CEO
-----------------
Date: January 29, 1997
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