Exhibit 10.1
PREFERRED PROVIDER AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the ____ day of ________,
2000 between National Century Financial Enterprises, Inc., An Ohio Corporation
(hereinafter referred to as "NCFE") and X-XxxXxxx.xxx, a corporation
incorporated under the laws of Nevada (hereinafter referred to as "E-MED").
WHEREAS E-MED represents that it has expertise in the area of
electronic commerce as it is engaged in the business of developing, customizing,
selling, supplying, installing, testing and implementing computer software
applications and services, as well as providing outsourcing solutions, and is
ready, willing, and able to provide these products and services to the NCFE on
the terms and conditions set forth herein; and
WHEREAS, in reliance on E-MED's representations and in exchange for
receiving the commitments, intellectual property and services set forth herein,
NCFE is willing to engage E-MED as an independent contractor, and not as an
employee, on the terms and conditions set forth herein.
NOW THEREFORE in consideration of the obligations herein made and
undertaken, the parties, intending to be legally bound, covenant and agree as
follows:
SECTION 1
SCOPE OF SERVICES AND OBLIGATIONS OF THE PARTIES
1.1 SERVICES. E-MED agrees to provide, and NCFE agrees to accept, the products
and consulting services described in the "Statement of Work," attached hereto as
Exhibit 1A, as more fully set for in the "Business Plan," attached hereto as
Exhibit 1B. The parties hereto agree that they may in the future mutually agree
to modify or amend the Statement of Work and the Business Plan and any such
modifications and amendments shall be in writing and shall be attached to this
Agreement for future reference. The descriptions in the Statement of Work and in
the Business Plan are intended by the parties to be read in the broadest
possible sense such that -- except as otherwise limited by this Agreement --
E-MED shall have the right and then the obligation to provide services and
software solutions with respect to all electronic (excluding hardware) needs of
NCFE and NCFE shall have the licensure and other rights as more fully set forth
herein. The parties hereto agree that all existing and new projects hereunder
shall be set forth in writing between the parties in the form of a scope of
services to be mutually agreed upon, in order to permit the parties to have a
standard by which to judge the performance of E-MED hereunder (e.g., under
subparagraph 1.3.1).
1.2 CONDUCT OF SERVICES. All work shall be performed in a workmanlike and
professional manner in accordance with the terms and conditions of this
Agreement. NCFE agrees to provide E-MED with all necessary hardware and
facilities to enable E-MED to provide its products and services in accordance
with general industry standards.
1.3 METHOD OF PERFORMING SERVICES. E-MED shall have the right to determine the
method, details and means of performing the work to be performed for NCFE so
long as the method is not in conflict with NCFE's standard policies and
requirements. NCFE shall, however, be entitled to exercise general power of
supervision and control over the results of work performed by E-MED to assure
satisfactory performance. NCFE's general power of supervision and control shall
include, but not be limited to, the right to inspect, the right to stop work,
the right to make suggestions or recommendations as to the details of the work,
and the right to propose modifications to the work. NCFE shall control the
timing of the work set out in the Statement of Work and the Business Plan. No
work thereunder shall be initiated by E-MED unless and until NCFE first gives
E-MED the requisite approval.
1.4 EXTRAORDINARY CASE WHERE NCFE MAY UTILIZE ALTERNATIVE SERVICES.
Notwithstanding any provision of this Agreement to the contrary, NCFE may
utilize the services of an alternative vendor or supplier in the case where (a)
such utilization occurs on or after July 25, 2002, (b) E-MED has shown a pattern
in the course of this Agreement where it has not provided acceptable products
and/or services, (c) NCFE has notified E-MED of this fact in writing in
accordance with the notice provisions set out below at each point during the
process by which E-MED has demonstrated the pattern set out in subsection a
below, and (d) NCFE has a good faith basis to believe that E-MED will be unable
to perform the service or provide the product in an acceptable manner and NCFE
has a good faith basis to believe that E-MED's failure to do so will cause
irreparable injury to NCFE. Nothing herein shall permit NCFE to terminate this
entire Agreement under the provisions of this subparagraph. Neither E-MED nor
NCFE may file any litigation in any court in the world against the other for any
alleged breaches hereunder unless and until such litigation is filed after July
25, 2002.
1.5 CUSTOM DELIVERABLES. E-MED and NCFE both acknowledge and understand that by
design this Agreement and any Exhibits appended hereto have been drafted with
the anticipation and expectation that E-MED will be providing some services and
resultant work product to NCFE that shall be considered Custom Deliverables.
Such Custom Deliverables shall be defined as Software and/or intellectual
property developed by E-MED for the specific purposes of this Agreement and
shall be considered a "work made for hire". Such Custom Deliverables and any
copyrights in those Custom Deliverables, upon NCFE's payment of any and all
amounts then due and owing under the terms of this Agreement, shall be the sole
and exclusive property of NCFE. In consideration for E-MED's services, NCFE
shall be required to grant E-MED the retention of a perpetual, worldwide,
non-exclusive, royalty free, transferable license to possess, copy, transform,
perform, display, use, modify, disclose, distribute, and sub-license any and all
of that custom Software or intellectual property in any manner E-MED chooses,
provided that in doing so E-MED does not include any of NCFE's confidential
information.
1.6 OBLIGATIONS OF THE PARTIES.
(a) In consideration for NCFE entering into this Agreement, E-MED
shall issue to NCFE 9.5 million shares of the capital stock of E-MED, and
shall immediately register such shares so that all of the shares are free
trading in accordance with applicable law and all industry standards for the
securities industry in the United States;
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(b) In consideration for E-MED entering into this Agreement and as
partial consideration for E-MED issuing the 9.5 million shares detailed
above, NCFE shall and hereby does (a) immediately convert all debt, currently
believed to be approximately Four Million-Five Hundred Thousand Dollars
(US$4,500,000.00), owed to NCFE by E-MED into equity;
(c) In consideration of E-MED adhering to section 1.6(a), NCFE or it's
Affiliates shall arrange for
1. $ 1,000,000 of additional equity financing (which is part of the
consideration given by NCFE in exchange for the 9.5 million shares granted to
NCFE), to be accomplished within 30 days after consummation of the agreement
in four equal payments of $250,000; and
2. $4,000,000 of debt financing within a period of 90 days with the
understanding that the debt will be retired and effectively converted as soon as
NCFE is able to sell $4,000,000 worth of its stock at a price per share in
excess of $9.50 per share. Until that time, the debt will not accrue interest
and will be carried as long term debt on the books of NCFE and E-MED.
For both of the of items 1 and 2, a funding schedule will be mutually agreed to
within 5 working days after contract signing. NCFE would be willing to provide
additional commitments of funding under mutually agreeable terms and conditions.
(d) NCFE agrees, concurrently with NCFE marketing efforts, to provide
E-MED with exclusive marketing access to all of NCFE's current clients which
access is only for the products and services to be provided by E-MED hereunder.
NCFE and E-MED hereby agree to exclusively market E-MED and NCFE's products to
NCFE's base of clients and E-MED's base of clients. NCFE and E-MED will share
equally all costs and expenses of the joint marketing effort on a national and
international basis to maximize the penetration of the parties' products into
the market. The parties agree that a Joint Steering Committee shall be
established pursuant to 1.6(f) below, and that neither entity shall begin
marketing unless and until the Joint Steering Committee expressly approves of a
marketing budget to carry out the terms and conditions of this Agreement.NCFE
and E-MED hereby agree to market E-MED and NCFE's products to NCFE's base of
clients through NCFE's Marketing Department. NCFE and E-MED will share equally
all costs and expenses associated with the joint marketing and joint sales
effort on both a national and international basis, so as to maximize the
penetration of the Parties products into the market.
(e) Pursuant to the terms of this Agreement and for the duration of
this Agreement the Parties agree to establish a proprietary Master Portal
wherein all of NCFE's and E-MED's products and services shall be able to be
marketed and sold to all of NCFE's and E-MED's customers in a manner mutually
agreeable and acceptable to the Parties. The anticipated Master Portal shall
function in such a way as to require it to be the "ultimate destination" Portal
that a customer will enter into prior to doing business electronically with the
Parties as anticipated under the terms of this Agreement. For the duration of
this Agreement and any extension thereof, E-MED shall be entitled to receive a
"per click" payment for each customer usage of the Master Portal. NCFE agrees to
a per click sign-on charge. Such sign-on charge would not include those clients
of NCFE who normally use the internet for the exchange of proprietary data
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as between NCFE and the client. However, NCFE will pay a charge of 5 cents per
click for all internet traffic with the exception of the transferring of reports
to clients. Such 5 cent fee will be monitored by the net and payable each month.
During the first year of the contract such minimum payments will be $15,000 per
month or 5 cents per click whichever is greater so long as E-MED continues to
maintain the network in an appropriate manner. During the second year of this
contract, so long as the net is provided and maintained by E-MED the minimum
charge will be $20,000 per month or 5 cents per click whichever is greater. In
the third year and every successive year of the contract the charge will be
$25,000 per month minimum or 5 cents per click whichever is greater. In addition
to the above consideration, to the extent that NCFE obtains new clients as a
result of their internet response, that is, the client must come to use through
the internet, whether that new client comes from the E-MEDSOFT client base or a
new client base that comes to NCFE as a result of NCFE'S establishment of a
portal, E-MED will receive $1,000 cash when such client commits to a funding
apparatus that NCFE offers. Such funding apparatus includes, medical accounts
receivable funding, self-pay receivable fundings, leases, loans, and bridge
financing as well as advisory serves in merger and acquisition. As long as such
new client maintains a contract relationship E-MED will receive one half of one
percent of the spread of NCFE. Such spread would be paid on a monthly basis and
would be remitted to E-MED. The minimum floor for clients added into this area
is 14%. Should the client be solicited through the internet and the rates are
less than 14% then E-MED would share the same on a prorata basis to a minimum
of 12%. No ongoing revenues would be shared for clients in which the return is
less than that unless done so by mutual agreement.
(f) NCFE and E MED will develop a financing methodology and program to
be offered to the purchasers of any of E MED solutions to include NCFE's portal
customers to finance any and all of E-MedSoft's solutions.
(g) Steering Committee: A steering committee will be established
representing the following parties (NCFE, E MED) to provide oversight to ensure
the spirit and intent of the agreement is being followed. The steering committee
members shall be senior level executives of each represented party. The
committee will meet no less than quarterly.
1.7 SCHEDULING. The services provided by E-MED are expected to require a
substantial effort by E-MED and E-MED agrees to staff the projects under the
Statement of Work accordingly. E-MED will use its best efforts to accommodate
all work schedule requests.
1.8 REPORTING. NCFE and E-MED shall develop appropriate administrative
procedures for completing all tasks set forth in the Statement of Work. NCFE
shall periodically provide E-MED with evaluations of E-MED's performance.
1.9 EXISTING PROJECTS. Immediately upon contract signing, the parties hereto
will meet and create a schedule of all existing projects that NCFE or its
affiliates were involved in prior to the execution hereof, and then the parties
hereto shall work in good faith to construct a plan whereby all such projects
will at the timing discretion of NCFE be supervised by E-MED. The term "timing
discretion" is meant by the parties to, with respect to projects existing as of
the date hereof, provide NCFE with the full discretion to determine the
transition periods in light of existing contractual commitments, business needs
and the overall best interests of NCFE.
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1.10 EFFECT OF SUPERVISORY CONTROL. Either through scope change, scheduling
change, stoppage of work or any other change in process dictated by NCFE, NCFE
will be responsible for any costs which result.
SECTION 2
TERM, DEFAULT AND TERMINATION
2.1 TERM. The term of this Agreement shall commence on the date set forth above
and shall (absent termination by either Party hereunder) be for an Initial Term
of seven (7) years [eighty four (84) months]. Following the expiration of the
Initial Term this Agreement may be extended by mutual agreement of the parties
for one (1) successive Extended Term. The Extended Term. shall be for a period
of five (5) years [sixty (60) months]. Therefore, including the Initial Term,
upon exercise of the Extended Term, this Agreement could remain effective for a
Cumulative Term of twelve (12) years [one hundred and forty four (144) months].
2.2 EVENTS OF DEFAULT. The following events shall constitute a "Default":
(a) NCFE fails to pay any amounts when due and does not pay such
amounts within forty-five (45) days of receipt of written
notice of such payment failure: or
(b) Either NCFE or E-MED has failed to comply with any obligation
of the Agreement herein (other than a payment default under
subsection (a)), the non-defaulting Party has exhausted any
specific contractual rights and remedies set forth herein, and
the remaining lack of compliance of the defaulting Party
remains uncured for a period of thirty (30) days after notice
of such breach is sent by the non-defaulting Party to the
Party alleged to be in Default, in accordance with Section
2.3. The cure period may be extended, if both parties agree to
such extension in writing.
2.3 NOTICE OF DEFAULT. A Default shall not be deemed to have occurred unless in
the case of a Default set forth in Section 2.2(a) and (b) the non-defaulting
Party has complied with the escalation procedure set forth in Section 3 and the
non-defaulting Party has given written notice (a "Default Notice") to the
defaulting Party in accordance with the requirements of this Section 2.3. A
Default Notice shall specify in reasonable detail the events which the
non-defaulting Party believes have occurred and which constitute or evidence a
Default, the provisions of this Agreement (including any applicable provisions
of the Statement of Work and the Business Plan) which have not been performed or
complied with, and the actions which, in the opinion of the non-defaulting
Party, would be required to fulfill the requirements of this Agreement and cure
the Default. An immaterial failure to comply precisely with the foregoing notice
requirements shall not affect the validity of a Default Notice if the defaulting
Party was not prejudiced by such failure.
2.4 TERMINATION FOR DEFAULT. Only upon (a) the occurrence of Any Default which
is not excused pursuant to this Agreement, (b) the inability to resolve the
dispute under Section 3, (c) the delivery of a Default Notice to the defaulting
Party as provided in Section 2.3, (d) the
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circumstance where a specific remedy for the Default is not set forth above
and/or such a specific remedy is so set forth but compliance with such remedial
procedure has not yielded a resolution of the Default and (e) the defaulting
Party's failure to cure the Default set out in the Default Notice prior to the
expiration of the cure period specified in Section 2.2(b) and any extension of
that cure period, the defaulting Party shall be deemed to be in breach of this
Agreement and the non-defaulting Party shall have the right to terminate this
Agreement or, alternatively, to terminate the particular project in the
Statement of work to which the Default relates (at the discretion of the
non-defaulting Party), by delivering written notice of termination to the
defaulting Party.
2.5 EFFECT OF TERMINATION. Upon termination of this Agreement (and irrespective
of which Party terminates this Agreement), all of the following shall apply:
(a) NCFE shall immediately cease use of all Software by E-MED not
considered a Custom Deliverable as defined in 1.4 above;
(b) NCFE shall, within 10 days of such termination, deliver to
E-MED all copies and portions of the Software and related
materials and documentation in its possession furnished by
E-MED that are not considered a Custom Deliverable as defined
in 1.4 above;
(c) All amounts payable or accrued to E-MED under this Agreement
shall become immediately due and payable;
(d) All rights and licenses granted to NCFE under this Agreement
or the applicable Schedule or Software license shall
immediately terminate;
(e) All ownership rights in and to Software provided to NCFE
hereunder and developed by E-MED that are considered Custom
Deliverables as defined in 1.4 above shall immediately vest in
NCFE for NCFE's perpetual ownership and use.
SECTION 3
DISPUTE ESCALATION AND MEDIATION
E-MED and NCFE hereby agree that they will use all reasonable efforts
to resolve any disputes arising out of this Agreement in a co-operative and
expeditious manner. If the staff members working on the Statement of Work are
unable to resolve the dispute within ten (10) days after it arises, either Party
may escalate the dispute to E-MED's Chief Executive Officer then to NCFE's
Chairman or one of its Vice Chairmen (hereinafter collectively "Mediation
Officers"). Upon such escalation, the Mediation Officers shall meet in person to
discuss the outstanding issues and attempt in good faith to reach a resolution.
If the foregoing procedure fails to resolve the dispute within five (5) days
after such meeting, the Parties hereto shall be entitled to any and all remedies
provided by law.
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SECTION 4
FEES AND PAYMENT
In consideration for the products to be provided and the services to be
performed by E-MED, E-MED shall be entitled to compensation in the sums set out
in Section 1.6 and the Statement of Work and the Business Plan. All fees shall
be paid by NCFE monthly.
SECTION 5
RESPONSIBILITIES OF E-MED FOR TAXES AND OTHER MATTERS
5.1 TAXES AND INSURANCE. As an independent contractor, E-MED shall pay and
report all federal and state income tax withholding, social security taxes, and
unemployment insurance applicable to E-MED. E-MED shall not be entitled to
participate in health or disability insurance, retirement benefits, or other
welfare or pension benefits (if any) to which employees of NCFE may be entitled.
E-MED agrees to defend; indemnify and hold harmless NCFE, NCFE's officers,
directors, employees and agents, and the administrators of NCFE's benefit plans
from and against any claims, liabilities, or expenses relating to such
compensation, tax, insurance, or benefit matters; provided that NCFE shall
promptly notify E-MED of each such claim when and as it comes to NCFE's
attention.
5.2 E-MED COVERAGE. Notwithstanding any other worker's compensation or insurance
policies maintained by NCFE, E-MED shall procure and maintain worker's
compensation coverage sufficient to meet the statutory requirements of every
state where E-MED's personnel assigned to NCFE's work are located.
SECTION 6
CONFIDENTIALITY AND NON-COMPETITION
6.1 PROPRIETARY INFORMATION. The Parties agree that the terms of the
Nondisclosure Agreement, Exhibit 1C, shall apply to and bind the Parties for the
longer of the Term of this Agreement or ten (10) years, notwithstanding any
term, termination, breach or material breach of this Agreement.
6.2 PROHIBITION AGAINST COMPETITIVE SERVICES AND PRODUCTS. The parties hereto
agree t, that, excepting any existing projects or agreements that would
otherwise be subject to paragraph 1.8 below,, neither party shall engage in any
activity, directly or indirectly, competitive with, or adverse to, the business
or welfare of the other party, whether alone, as a partner, or as an officer,
director, employee, consultant, or holder of more than five percent (5%) of the
capital stock of any other corporation. Therefore, subject to the limitations of
this Section, NCFE and E-MED agree that during the term of the Agreement neither
party shall, without the prior written consent of the other, compete or
participate in competition, either directly, indirectly, with, or against the
other party. Such prohibition against participation in competition shall
include, without limitation, all of the services and products to be provided
under the terms of this Agreement.
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Nothing herein shall permit NCFE to compete against E-MED during the term hereof
in a manner in which NCFE uses -- in any way shape or form -- the services or
products of any company other than E-MED with respect to the projects and work
set out in the Statement of Work and the Business Plan.
NCFE further agrees that it shall give E-MED the first opportunity to continue
to provide services set forth in the Statement of Work. If E-MED demonstrates
that it can perform the services set forth in the Statement of Work and any
future services in a manner satisfactory to NCFE, NCFE shall then continue to
use the services of E-MED. NCFE has no obligation to continue to use the
services of E-MED after the termination of this Agreement. NCFE also agrees that
it shall not utilize the services or products of any provider engaged in the
business of providing technological solutions of the kind set out in the
Statement of Work or of any technological or service solutions similar or
related thereto, other than and with the sole exception of NCFE's utilization
hereunder of E-MED's services and products; provided, however, that NCFE may at
all times use such competitive products if E-MED has shown an inability to
provide the solutions set out in the Statement of Work and the Business Plan and
if NCFE has exhausted all dispute escalation remedies expressly set forth in
Section 3, with the exception that if those escalation procedures do not yield a
resolution within the provided time frame, NCFE shall not be compelled to obtain
judicial approval before using alternative services.
6.3 NON-COMPETITION REGARDING PRIVATE LABEL PRODUCT. The parties hereto agree
and understand that by virtue of the intellectual property and services being
provided by E-MED to NCFE hereunder, NCFE and E-MED both will have access to
extraordinarily confidential, proprietary and valuable information of the other
party, and that, such information if misused and/or used in violation of this
Agreement, could seriously injure the business of either E-MED or NCFE, as the
case may be. The parties also agree and understand that NCFE -- under the terms
and conditions of this Agreement -- expects to utilize the intellectual property
and services of E-MED in order to develop on a going forward basis a "private
label" product entitled "XXXX.XXX" and thus NCFE can only agree to the following
non-competition provisions with the express proviso and condition precedent that
(a) E-MED provides adequate services to NCFE under the Statement of Work and the
Business Plan and (b) NCFE by definition will be competing with E-MED with
respect to all current and future clients of NCFE which NCFE provides financing
services to, and thus as to such clients NCFE shall have no obligation to adhere
to the non-competition provision of this Agreement so long as NCFE is utilizing
E-MED for exclusive provision of the products and services anticipated under the
terms of this Agreement (i.e., it is intended that XXXX.XXX will deliver to the
NCFE clients E-MED generated products, and it is further intended that E-MED
will deliver to its clients NCFE generated financial products). Additionally,
E-MED and NCFE, pursuant 1.5(e) above, shall establish a proprietary Master
Portal (hereinafter "Master Portal") whereby E-MED's and NCFE's products and
services shall be exclusively marketed in a manner mutually agreed by all
parties. Notwithstanding this Master Portal arrangement, the parties hereto
agree and understand that, prior to launch of the proprietary Master Portal,
either E-MED or NCFE shall have the absolute right to market their individual
products and services through the proprietary portals of' companies other than
E-MED or NCFE. It being the intention of the parties that the utilization of
such proprietary ultimate destination portals other than the Master Portal shall
only be used during a transition period which shall begin from the date of
execution hereof and which shall
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terminate, at the latest, on March 1, 2000. The parties hereto agree to
immediately begin working vigorously toward the completion of their proprietary
Master Portal. Nothing herein and nothing in this Agreement shall be read to (a)
provide E-MED with the right to deliver any health care services products other
than NCFE's through any ultimate destination portal other than the Master Portal
or (b) provide NCFE with the right to deliver any computer, technology or
Internet products other than E-MED's through any ultimate destination portal
other than the Master Portal.
SECTION 7
OWNERSHIP OF SOFTWARE APPLICATIONS
7.1 GRANT OF LICENSE. Subject to the payment of all compensation due under this
Agreement and all other terms and conditions herein, E-MED grants to NCFE -- for
the term hereof -- a perpetual, personal, non-transferrable, non-exclusive
license to Software, other than Custom Deliverables which are owned by NCFE and
defined in 1.4 above, in object code form solely for the purpose of serving the
normal business operations of NCFE as set out in the applicable Schedule. This
license grant is subject to CUSTOMER's continual retention during the term
hereof of PROVIDER's products and services so that PROVIDER -- and not the
competitors of PROVIDER -- can continue to service its Software and receive
compensation for such services as set out in the Statement of Work and the
Business Plan.
7.2 TERM OF LICENSE. NCFE's license for the Software to be provided by E-MED
under the Statement of Work and the Business Plan is effective from the later
date of signing of this Agreement and payment of the consideration thereunder.
NCFE's license for any other Software will be effective from the later date of
delivery of the Software or payment of the consideration therefor. Each license
shall continue throughout the term of this Agreement and throughout any
expansion to that term agreed to by the parties, but no license issued hereunder
shall extend any further. Provided, however, that NCFE shall at all times own
outright all right, title and interest in and to all of the basic hardware and
line communication and related software devices required to give NCFE the
minimal, basic connectivity with all its clients and other chosen clientele
(hereinafter "basic connectivity"); such basic connectivity to include none of
the functionality and robust data base, communication and information management
capabilities now owned by E-MED as all such technology is proprietary to E-MED,
represents E-MED's core business assets and represents state-of-the-art
technology that would never be transferred in any way, shape, or form to any
person, including NCFE. Provided further that NCFE shall at all times own
outright all right, title and interest in and to all Software and intellectual
property developed by E-MED and considered Custom Deliverables as defined in 1.4
above." as set forth below.
7.3 EXTENT OF LICENSE. The license granted hereunder to NCFE for intellectual
property and Software other than a Custom Deliverable is limited to its sole use
on a designated platform described in the Statement of Work and the Business
Plan (i.e., operating system with corresponding serial number) (the "Designated
Platform") set forth in the applicable Statement of Work and the Business Plan
with permitted access to NCFE's employees for each Software application
described in the Statement of Work and the Business Plan. Such license permits,
except as otherwise provided herein or in the Statement of Work, or the Business
Plan, access to
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the Software through the use of an on-line modem connecting to the Designated
Platform. No copy of the Software is to be maintained anywhere on the network
other than on the Designated Platform. NCFE may make one (1) additional copy of
the Software in machine-readable form for back up purposes only. NCFE will
obtain E-MED's prior written consent before granting networking privileges with
the Software to any party not permitted under the applicable Schedule. NCFE
acknowledges and agrees that E-MED may, from time to time, acting reasonably,
place such restrictions on the use of the Software on the network as it deems
necessary to protect its proprietary rights in the Software (including, where
appropriate, the withholding of access privileges to one or more NCFE's clients
or members or participants).
7.4 PERMITTED USES. NCFE acknowledges and agrees that no right or license is
granted under this Agreement for use of the Software, other than Custom
Deliverables, for any purpose other than set out in the Statement of Work, the
Business Plan or for use on any equipment other than the Designated Platform or
such other hardware as may be agreed to by E-MED, from time to time. NCFE and
E-MED both acknowledge that the Software, other than Custom Deliverables, is
proprietary to E-MED and constitutes a trade secret of E-MED under applicable,
State and Federal law, and NCFE agrees not to make or to authorize anyone to
make or to distribute copies or to use the Software or related documentation in
any manner inconsistent with E-MED's exclusive ownership or for any purpose
other than for the normal business operations of NCFE as set out in the
applicable Statement of Work unless otherwise specifically agreed to in writing
by E-MED. Without limiting the generality of the foregoing, excepting Custom
Deliverables, NCFE may not:
(a) use the Software or make copies of all or any part of it,
other than as expressly permitted in this Agreement;
(b) translate, change or reverse engineer the Software or its
method of operation by debugging, disassembling, reprogramming
or by any other means;
(c) modify, adapt or create derivative works based on all or any
part of the Software;
(d) rent, lease, sell, sublease, distribute, merge, assign,
transfer, share, sub-license or make available to another
person, the Software or any copy, in any way, in whole or in
part, except as expressly provided for in the applicable
Schedule;
(e) sell documentation, forms or other materials generated in
conjunction with the Software to third parties;
(f) provide access to any of the Software or to any of the other
items mentioned in subsections a through f above, to any
person that is not affiliated with NCFE; and
(g) use the Software for aiding or creating a competitive software
package and furnish information, data, or copies of
documentation concerning the input or output of the Software
to any one of the purposes of aiding in the design or creation
of a competitive software package.
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SECTION 8
INTELLECTUAL PROPERTY
8.1 OWNERSHIP OF SOFTWARE OTHER THAN A CUSTOM DELIVERABLE. Other than NCFE's
right to utilize the Software in the semi-exclusive manner provided for herein
and during the term hereof, NCFE acknowledges that it is not acquiring any
ownership rights to Software (which term includes modifications) other than
Custom Deliverables, or any copies thereof, or any copyright, trade secret,
patent and other intellectual property rights therein (including those of third
parties which E-MED has the right to use) and that E-MED retains all right,
title and interest in and to such Software, including all intellectual property
rights therein. Physical copies of such Software (in diskette, tape or other
form provided by E-MED) shall remain the property of E-MED, and such copies
shall be deemed to be licensed to NCFE during the term of the license granted
pursuant to this Agreement. NCFE shall not alter or remove any copyright, trade
secret, patent, proprietary or other legal notices contained on or in such
Software and shall reproduce all such notices that are contained on or in such
Software on the copy permitted to be made by NCFE for backup purposes only.
Notwithstanding anything in this paragraph or Agreement to the contrary, NCFE
shall at all times -- even in the event of a termination hereof -- retain full
ownership in all of the basic hardware and line communication and related
software devices required to give NCFE the minimal, basic connectivity with all
its clients and other chosen clientele (hereinafter "basic connectivity"); such
basic connectivity to include none of the functionality and robust data base,
communication and information management capabilities now owned by E-MED as all
such technology is proprietary to E-MED, represents E-MED's core business assets
and represents state-of-the-art technology that would never be transferred in
any way, shape or form to any person, including NCFE.
8.2 CONFIDENTIALITY OF DOCUMENTATION. All information, data, drawings,
specifications, documentation, software listings, source or object code which
E-MED has created in the development of Software other than Custom Deliverables
and the performance of the terms of this Agreement or which it may from time to
time create in supporting or enhancing such Software is proprietary or
confidential. NCFE agrees that it shall use the same solely in accordance with
the provisions of this Agreement and that it shall -- for the term set out in
Article 6 above -- not at any time during or after completion, expiration or
termination of this Agreement disclose the same, directly or indirectly, to any
third party without E-MED's prior written consent.
SECTION 9
INDEMNIFICATION
9.1 INDEMNIFICATION BY NCFE.
(a) NCFE shall defend, indemnify and hold harmless E-MED from and
against any and all claims of infringement of copyright, trade
secret rights, patents, trademarks, industrial designs, or
other property rights affecting the Software that are based
upon or due to the use by the NCFE of technology that is not
E-MED's
11
technology but was selected by NCFE anyway, or due to changes
or alterations made to the Software, including customization
of the software or other intellectual property forming part of
or incorporated into the Software, by NCFE or at its
direction.
(b) If E-MED gives NCFE notice of any such infringement claim made
against E-MED and provides such assistance as is reasonably
requested by NCF E in defending, responding to or settling
such claim, NCFE shall, at its own expense, select and control
all legal representation to defend any such claims and make
settlements thereof at NCFE's discretion.
(c) In the event that any such infringement occurs or may occur,
NCFE may instruct E-MED at NCFE's expense to:
(ii) procure for NCFE the right to continue using the
Software or infringing part thereof, or
(iii) modify or amend the Software or infringing part
thereof so that the same becomes non-infringing; or
(iv) replace the Software or infringing part thereof by
other software of similar capability.
9.2 INDEMNIFICATION BY E-MED.
(a) E-MED shall defend, indemnify and hold harmless NCFE from and
against any and all claims of infringement of copyright, trade
secret rights, patents, trademarks, industrial designs, or
other property rights affecting the Software provided such
claims are not due to the use by NCFE of technology that is
not E-MED's technology but was selected by NCFE anyway, and
provided such claims are not due to changes or alterations
made to the Software, including customization of the software
or other intellectual property forming part of or incorporated
into the Software, by NCFE or at its direction.
(b) If NCFE gives E-MED notice of any such infringement claim made
against NCFE and provides such assistance as may be reasonably
requested by E-MED in defending, responding to or settling
such claim, E-MED shall, at its own expense, select and
control all legal representation to defend any such claims and
make settlements thereof at E-MED's discretion defend any such
claims and make settlements thereof at its own discretion.
(c) In the event that E-MED receives notice of a valid claim or
demand or if NCFE's use of the Software shall be prevented by
injunction (provided such event leading to the injunction do
not give rise to a claim under subsection 7.1(a)), E-MED
shall, at its option and expense, procure for NCFE the right
to continued use of the Software as provided hereunder, modify
the Software so that it is no longer
12
infringing, or terminate this Agreement and refund to NCFE the
fees paid under this Agreement, reduced in a reasonable manner
to reflect NCFE's use of the Software. This section 7.2 states
E-MED's entire liability to NCFE for any claim of intellectual
property rights infringement.
9.3 PARTICIPATION IN DEFENSE. A Party may participate at its expense in the
defense of any action or claim which may be asserted against it and for which
such Party seeks indemnity pursuant to the provisions of this Article, or such
indemnified Party may assume the defense of such claim or action, including the
right to settle or compromise any claim against it without the consent of the
indemnifying Party, provided that in doing so it shall be deemed to have waived
its right to indemnification except in cases where the indemnifying Party has
declined to defend the claim. The indemnifying Party may settle an action, suit
or proceeding without the indemnified Party's consent only if such settlement
includes a full general release of the indemnified Party.
9.4 INDEMNIFIED PERSONS. In this Article, references to NCFE and E-MED shall be
deemed to include their respective directors, officers, agents, employees and
affiliates.
SECTION 10
WARRANTY
10.1 WARRANTY OF E-MED. During the, term of this Agreement, E-MED warrants to
NCFE that the Software will substantially comply with Software Requirements,
except that NCFE acknowledges that E-MED cannot warrant systems currently in
place during the transition to E-MED's control. The warranty set forth in the
preceding sentence is the only warranty granted by E-MED under this Agreement.
E-MED DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AND ANY ORAL OR WRITTEN REPRESENTATIONS, PROPOSALS OR
STATEMENTS MADE PRIOR TO THIS AGREEMENT. E-MED DOES NOT WARRANT THAT THE
SOFTWARE WILL MEET NCFE'S NEEDS OR BE FREE FROM ERRORS, OR THAT THE OPERATION OF
THE SOFTWARE WILL BE UNINTERRUPTED.
10.2 YEAR 2000 COMPLIANT. E-MED will use all reasonable efforts to ensure that
the Software is designed and has been tested for use prior to, during, and after
the calendar year 2000AD so that the Software will operate during each such time
period. without error relating to date data, specifically including any error
relating to, or the product of, date data which represents or references
different centuries or more than a century. E-MED shall have no liability for
any failure of NCFE's or third party's software, hardware, applications,
databases or other systems to be year 2000 compliant or any year 2000 issues not
solely caused by the Software.
10.3 LIMITATION OF LIABILITY. NCFE's sole remedy under this limited warranty is
replacement of the Software. Subject to Section 8.1 above, the Software is
provided on an "as is" basis, and the entire risk as to the results and
performance of the Software is assumed by NCFE. NEITHER E-MED NOR ITS
DISTRIBUTORS, SUPPLIERS, AGENTS, OFFICERS, AND
13
DIRECTORS SHALL HAVE ANY LIABILITY TO NCFE OR ANY OTHER PERSON OR ENTITY FOR ANY
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES WHATSOEVER, INCLUDING BUT
NOT LIMITED TO, LOSS OF REVENUE OR PROFIT, FAILURE TO REALIZE ANTICIPATED
PROFITS OR SAVINGS, LOST OR DAMAGED DATA, OR OTHER COMMERCIAL OR ECONOMIC LOSS,
EVEN IF E-MED HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR THEY ARE
FORESEEABLE; OR FOR CLAIMS BY ANY OTHER PARTY. E-MED'S MAXIMUM AGGREGATE
LIABILITY TO NCFE, AND THAT OF E-MED'S DISTRIBUTORS, SUPPLIERS, AGENTS,
OFFICERS, AND DIRECTORS, SHALL NOT EXCEED THE AMOUNT PAID BY NCFE FOR THE
SOFTWARE. THE LIMITATIONS IN THIS SECTION SHALL APPLY WHETHER OR NOT THE ALLEGED
BREACH, DEFAULT, NONPERFORMANCE OR FAILURE IS A BREACH OF FUNDAMENTAL CONDITION
OR TERM, OR A FUNDAMENTAL BREACH. In no event will E-MED be liable for any
damages, loss or costs whatsoever of any client of NCFE or other user of the
Software however incurred.
10.4 EXCLUSIONS. NCFE assumes full responsibility for the use of the Software
and documentation and any information entered, used or stored thereon, including
without limitation, protection from data viruses, security of information or
systems, any unintended modification, destruction or disclosure and for the
accuracy and integrity of the results. E-MED assumes no responsibility for the
foregoing.
10.5 SOFTWARE AND DATA. E-MED shall not be responsible for repair of damage to,
or the replacement or restoration of any software or data files resulting from
accident, transportation, neglect or misuse, failure of electrical power, air
conditioning or humidity control or other causes. NCFE will be responsible for
regularly backing up all software and data utilized by the Software. If any act
or omission by E-MED causes any loss or damage to NCFE's software or data,
E-MED's sole obligation and NCFE's sole remedy shall be for E-MED to provide
reasonable assistance to NCFE to restore the lost or damaged data from the most
recent backup copy maintained by NCFE. E-MED shall have no obligation to
recover, restore or re-enter any other software, data, information or records.
SECTION 11
GENERAL
11.1 FURTHER ASSURANCES. Each of the parties hereto from time to time at the
request and expense of any other Party hereto and without further consideration,
shall execute and deliver such other instruments of transfer, conveyance and
assignment and take such further action as the other Party may require to more
effectively complete any matter provided for herein.
11.2 ENTIRE AGREEMENT. This Agreement including the attached Schedules
constitutes the entire agreement among the parties hereto and except as herein
stated and in the instruments and documents to be executed and delivered
pursuant hereto, contains all of the representations and warranties of the
parties hereto. There are no oral representations or warranties among the
parties hereto of any kind, and indeed the parties stipulate that no such
representations or
14
statements were in fact made by either Party. This Agreement may not be amended
or modified in any respect except by written instrument signed by both Parties
hereto.
11.3 APPLICABLE LAW AND VENUE. This Agreement shall be governed by and construed
in accordance with the laws of the State of Ohio, without regard to its choice
or conflict of law rules. Any dispute hereunder shall be litigated and tried in
the federal courts situated in Franklin County, Ohio.
11.4 SEVERABILITY. Any covenant or provision hereof determined to be void or
unenforceable in whole or in part shall not be deemed to affect or impair the
validity of any other covenant or provision hereof and the covenants and
provisions hereof are declared to be separate and distinct.
11.5 NOTICES. Any notice required or permitted to be given hereunder shall be in
writing, addressed in the case of E-MED to its signatory signing this Agreement
and in the case of NCFE to its signatory signing this Agreement (or such other
person identified by NCFE) and sent to the address sent out on the execution
page of this Agreement. Notices shall be deemed given (a) upon delivery in
person; (b) upon receipt if sent on a Business Day by facsimile transmission or
other similar means of electronic communication if receipt is duly confirmed,
(c) upon receipt as shown in the records of any reputable expedited delivery
service or (d) three days after posting with the United States Postal Service,
postage prepaid, certified or registered mail, return receipt requested. Any
Party hereto or others mentioned above may change its address by written notice
to the others delivered in the manner set forth above.
11.6 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns. Notwithstanding the foregoing, this
Agreement shall not be assignable by any Party hereto without the express
written consent of the other Party hereto.
11.7 INDEPENDENT CONTRACTORS. The parties acknowledge and agree that E-MED will
perform its obligations hereunder as an independent contractor and shall not be
deemed an employee or agent of NCFE nor shall any of its employees, contractors
or agents be deemed to be employees of NCFE.
11.8 COUNTERPARTS AND FACSIMILE. This Agreement may be executed by the Parties
in any number of separate counterparts each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together
constitute one and the same instrument. Counterparts may be executed either in
original or faxed form and the parties adopt any signatures received by a
receiving facsimile machine as original signatures of the Parties, provided,
however that any Party providing its signature in such manner shall promptly
forward to the other Party an original of the signed copy of this Agreement
which was so faxed.
11.9 DUE EXECUTION. Each Party represents to the other Party that (a) it has the
power and authority to execute, deliver and perform this Agreement and that the
execution, delivery and performance of this Agreement have been duly authorized
by all necessary action, and (b) this Agreement has been duly executed and
delivered by such Party and constitutes the legal, valid and binding obligation
of such Party enforceable against it in accordance with its terms.
15
11.10 SURVIVAL OF OBLIGATIONS. The Parties' respective obligations under this
Agreement which by their nature would continue beyond the termination or
expiration of this Agreement, including, without limitation, those contained in
the Articles entitled Intellectual Property, Confidential Information,
Indemnification and Dispute Resolution shall survive the termination or
expiration of this Agreement.
RESERVED SPACE
16
IN WITNESS WHEREOF this Agreement has be signed by the Parties hereto
on the date first written above.
NATIONAL CENTURY FINANCIAL
ENTERPRISES, INC.
BY: ______________________________
TITLE: ______________________________
ADDRESS: ______________________________
______________________________
FACSIMILE #:
X-XXXXXXX.XXX
BY: ______________________________
TITLE: ______________________________
ADDRESS: ______________________________
______________________________
FACSIMILE #:
17
SCHEDULE 1A
STATEMENT OF WORK
Compliant with Encounter Data Guide appended hereto by the Parties prior to
execution, and development of full, web-based, subscription based network
pursuant to policies and pricing as may be promulgated from time to time by
E-MED, within E-MED's sole discretion, but provided that such pricing shall be
at levels such that NCFE receives discounts of at least eight percent (8%) from
the standard pricing of E-MED.
In exchange for this preferred pricing being provided to NCFE, E-MED shall
develop and implement and provide for all of NCFE's electronic needs --
including all software, portal, web (and any other network) and hardware
products and services -- in the following areas (among others):
1. Consumer web portals;
2. E-MED web portals;
3. Broker web portals;
4. Employer web portals;
5. Claims and encounters;
6. Eligibility and benefits verification;
7. Claim status inquiry;
8. Referrals and authorizations;
9. Electronic remittance advice and funds transfer;
10. Coordination of benefits;
11. First report of injury;
12. Credentialing;
13. Drug history;
14. Prescription communication services;
15. Lab order and results
16. Other connectivity and connectivity/services;
17. Other e-commerce applications/services; and
18. Internet/extranet products/services
SCHEDULE 1B
BUSINESS PLAN
ATTACHED AND IDENTIFIED HERETO.
SCHEDULE 1C
NON-DISCLOSURE AGREEMENT
THIS AGREEMENT is made and entered into as of the date and by and
between the parties as set forth below, for the purpose of allowing the parties
to exchange information relevant to business discussions and transactions in
which the parties are about to engage.
THE PARTIES signing below ("PARTIES") hereby agree, on behalf of their
agents, attorneys, predecessors, successors, affiliates, and those acting in
concert with them, to keep all client information strictly confidential. The
term "client information," as used herein, means and includes, without
limitation, all proprietary, confidential, or trade secret information, all
information appertaining or relating in any manner to the businesses of the
PARTIES or in which the PARTIES are involved including any and all literary
material and computer software products that could be or have been registered or
copyrighted, any and all operating manuals or similar materials which constitute
the systems, policies and procedures, and methods of doing business developed by
the PARTIES, and all documentation and information of any kind or nature
exchanged between the PARTIES at any time after the date the PARTIES signed this
Agreement. As to such client information, the PARTIES hereby acknowledge that,
except for their relationship with each other in analyzing a prospective and
potential business relationship and consummating such a relationship, they would
not otherwise have access to the foregoing client information. During any
interaction between the PARTIES and at all times thereafter, the PARTIES shall
not disclose to any person any such client information. The PARTIES understand
that all client information is the sole property of the Party possessing the
information prior to the date of this letter, and the parties hereto agree not
to make any copies thereof, other than in the ordinary course of business and
for purposes of carrying out whatever business relationships are contemplated.
to be formed between the PARTIES. Upon cessation of discussions and transactions
between the PARTIES hereunder, the PARTIES agree that they shall return to the
other Party all client information and that they shall not permit any client
information to be used in any manner whatsoever.
WHEREFORE, the PARTIES have set their hands to and executed this
Agreement below to confirm their consent and agreement to the foregoing terms
and to constitute the formal beginning of their business relationship. By
signing below, the signators expect and intend all entities with which they are
involved in a representative capacity to be bound by this confidentiality
agreement.
Dated: _________________________
_________________________
_________________________
_________________________
_________________________
_________________________
NATIONAL CENTURY FINANCIAL ENTERPRISES, INC.
================================================================================
February 2, 2000
Xxxx X. Xxxxxxx
Chief Executive Officer
x-XxxXxxx.xxx
0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxxxx Xxxxx, Xxxxxxx 00000
Ref: Clarification and Modification to Preferred Provider Agreement
Dear Xxxx:
The following shall clarify in certain respects the Preferred Provider Agreement
of even date herewith and shall set forth certain additional commitments by and
among the parties executing this agreement below.
1. Xxxxxx X. Xxxxx shall immediately become a member of the Board of Directors
of x-XxxXxxx.xxx;
2. All stock tendered to NCFE under the Preferred Provider Agreement shall be
kept in a brokerage accounts chosen by NCFE and affiliates such that the
brokerage firm shall agree to be bound by all applicable provisions of law
and contract relative to the sale or distribution of any of the stock. NCFE
shall assure that the brokerage account fully complies with all laws,
contracts and regulations - including but not limited to Rule 144 - in
connection with any sale or other distribution of securities from that
account;
3. Attached hereto is a formula whereby E-MED shall receive payment from NCFE
relative to all new physician group practices signed up within the NCFE
network during the term of the Preferred Provider Agreement. This formula
was prepared by NCFE based upon the advice and evaluation of consultants and
represents its best conservative estimate of the future potential revenue
stream to E-MED from new physician group sign ups within the NCFE network.
The constant revenue stream to E-MED from the new physician group practices
is in addition to all other forms of consideration and revenue recognition
set out in the Preferred Provider Agreement. The formula describes the
recurring revenues E-MED is entitled to receive relative to its receipt of
.5% per year of the outstanding balance of accounts receivable financed and
remaining under management within the NCFE system plus a flat fee of $1,000
per every new physician or physician group signed up within the NCFE
Internet system. Upon the penetration into the marketplace as estimated and
subject to the
THE INNOVATORS IN THE SECURITIZATION OF HEALTHCARE RECEIVABLES
Corporate Headquarters o 0000 Xxxxxxxx Xxxxx x Xxxxxx, Xxxx 00000
Tel. (000)000-0000 o (000)000-0000 o Fax (000)000-0000
satisfaction of the assumptions upon which the evaluations are based, E-MED
would be scheduled to receive $526 million over the life of the Preferred
Provider Agreement for this one particular revenue stream;
4. To the extent NCFE engages in claims management, billing and collections,
pharmacy or marketing database management within its private label and
within its client base, (a) all revenues from those activities shall be
booked in a manner as to maximize the return to NCFE and E-MED, and all
profits shall be split equally as between NCFE and E-MED and (b) all
services provided thereunder shall be with branding provided by E-MED as is
appropriate.
Please sign below to confirm your agreement to the foregoing terms and
conditions.
Sincerely,
NATIONAL CENTURY FINANCIAL ENTERPRISES, INC.
/s/ Xxxxx X. Xxxxxxx
By: Xxxxx X. Xxxxxxx
Chairman
/s/ Xxxxxx X. Xxxxx
By: Xxxxxx X. Xxxxx
Vice-Chairman
THE FOREGOING IS AGREED TO:
X-XXXXXXX.XXX
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Chief Executive Officer
