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EXHIBIT 10.11
We have omitted certain portions of this document and filed them separately
with the commission. These portions are marked with an asterisk (*).
JOINT MARKETING AND LICENSING AGREEMENT
This Joint Marketing and Licensing Agreement ("Agreement") is made by
and between HealthStream, Inc., a Tennessee corporation having its principal
place of business at 000 00xx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx
00000 ("HealthStream") and The Cleveland Clinic Center for Continuing Education
("CFCE"), a component of the Cleveland Clinic Educational Foundation, an Ohio
Not-for-Profit corporation having its principal place of business at 0000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000.
BACKGROUND
WHEREAS, CFCE has developed and marketed and continues to develop and
market a line of products known as the 1998 Cleveland Clinic Intensive Review of
Internal Medicine, a CD-ROM based course providing continuing education to
physicians;
WHEREAS, HealthStream has developed and marketed and continues to
develop and market a computer-based education system known as the Training
Navigator(TM) ("T.NAV(R)") that delivers and monitors World Wide Web based
content;
WHEREAS, CFCE and HealthStream wish to enter into a cooperative effort
to deploy CFCE's educational offerings utilizing HealthStream's T.NAV technology
on the World Wide Web;
WHEREAS, HealthStream wishes to acquire a license and CFCE has agreed
to grant a license to HealthStream for the delivery of the 1998 Cleveland Clinic
Intensive Review of Internal Medicine product, whether now existing or developed
by CFCE during the term of this Agreement, by HealthStream's T.NAV;
WHEREAS, CFCE and HealthStream wish to provide appropriate
consideration for those efforts that each party has agreed to undertake;
WHEREAS, CFCE and HealthStream each acknowledge the sufficiency and
adequacy of the value, concessions, and recitations set forth herein;
NOW THEREFORE, CFCE and HealthStream agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the terms below shall have the following
meanings:
1.1. "CFCE" means The Cleveland Clinic's Center for Continuing Education, a
component of the Cleveland Clinic Educational Foundation. For the
purposes of this agreement, components of that Center include the
Continuing Medical Education Department, The Media Services Department,
and UNITECH Communications.
1.2. "Educational Content" means the information contained in the entire
library of the CD-ROM version of the 1998 Cleveland Clinic Intensive
Review of Internal Medicine product and its incorporated modules
including, but not limited to, text and images that are the proprietary
property of CFCE that consist of continuing medical education ("CME")
in the modules listed in Exhibit A hereto.
1.3. "Educational Activity" means a single module of the Education Product,
specifically, a self-contained lesson consisting of Educational
Content, learning objectives, a post test, and an evaluation. Each
individual Educational Activity, when properly completed, is eligible
for CME credit.
1.4. "Educational Product" means the adaptation of the Educational Content
into Educational Activities contained in the 1998 Cleveland Clinic
Intensive Review of Internal Medicine CD-ROM, including but not limited
to conversion to a format appropriate for delivery over the World Wide
Web,
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definition of education objective, a post test and an evaluation form
for each segment in accordance with CFCE policies and the Accreditation
Council for Continuing Medical Education's ("ACCME") Essentials and
Guidelines for Accreditation of Sponsors of Continuing Medical
Education and Standards for Commercial Support and Enduring Materials
attached as Exhibit B hereto.
1.5. "Effective Date" means _____________, 1999, the date on which both
parties to this Agreement have executed same.
1.6. "HealthStream" means HealthStream, Inc. and any Subsidiary of
HealthStream, Inc.
1.7. "Internet" means the international network of computers and computer
networks accessible by the public at large of which the World Wide Web
is a subset.
1.8. "Net Revenue" means gross revenue derived by HealthStream from
Transactions Fees.
1.9. "Subsidiary" means a company in which, on a class-by-class basis, more
than fifty percent (50%) of the stock entitled to vote for the election
of directors is owned or controlled by another company, but only so
long as such ownership or control exists.
1.10. "T.NAV" is a branded trademark of HealthStream and is a computer based
training product that delivers and monitors World Wide Web based
Content.
1.11. "T.NAV Commerce" means HealthStream's proprietary computer based
training product that is a derivative product of T.NAV with additional
features added by HealthStream in its sole discretion and designated by
HealthStream in its sole discretion as "T.NAV v.x.x.c."
ARTICLE 2
LICENSE GRANTS
2.1 Subject to the payment of the consideration set forth in Article 3,
CFCE grants to HealthStream an exclusive worldwide license to deliver
the Educational Product on the World Wide Web.
2.2 Upon notice from CFCE that an Educational Activity is no longer
appropriate for use because, for example, it contains erroneous or
outdated information, or in other ways is no longer appropriate for the
awarding of CME credit, HealthStream shall cease to represent that the
Educational Activity being so delivered is CME accredited. During the
term of this agreement, CFCE shall restructure the CFCE Educational
Activity for CME accreditation at its own expense or shall provide an
equivalent number of CME hours of content at no expense to
HealthStream. After this Agreement terminates, HealthStream may, at its
option and expense, seek to have CFCE update the Educational Activity.
HealthStream may also seek permission from CFCE to continue to
broadcast the Educational Activity without CME credit.
2.3 CFCE shall retain the ownership to all Educational Content, including
but not limited to, text, images, and audio that have been copyrighted
by the CFCE under permissions and releases granted by the authors.
2.4 HealthStream shall retain the copyright to the Educational Activities
it produces under this agreement.
2.5 Any and all rights not expressly granted by either of the parties to
the other are reserved by the respective party claiming reservation of
that right.
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ARTICLE 3
CFCE RESPONSIBILITIES TO HEALTHSTREAM
3.1 CFCE will designate a project manager with sufficient experience and
training to resolve issues related to the production, review and
credentialling issues required by this project.
3.2 CFCE agrees to accredit each Educational Activity produced under this
Agreement if, in its sole judgment, CFCE policies and the ACCME's
Essentials and Guidelines for Accreditation of Sponsors Of Continuing
Medical Education And Standards For Commercial Support and Enduring
Materials as set forth in Exhibit B hereto have been complied with in
all material aspects.
3.3 CFCE agrees to provide initial accreditation for each Educational
Activity for two (2) years, with one (1) year extensions possible as
long as, in CFCE's judgment, the material is still current. At its sole
discretion, in accordance with its responsibilities to the ACCME's
Essentials and Guidelines for Accreditation of Sponsors Of Continuing
Medical Education And Standards For Commercial Support and Enduring
Materials as set forth in Exhibit B hereto, CFCE may determine at any
time that one or more Educational Activity is no longer appropriate for
CME accreditation. In the event the Center for Continuing Education
finds one or more Educational Activities of this Educational Product no
longer appropriate for CME accreditation, HealthStream agrees to
withdraw the Educational Activities, in accordance with Article 2.2.
3.4 For each Educational Activity, CFCE shall provide a title, objectives,
post test, and an evaluation form in a timely fashion. These components
for the first ten (10) Educational Activities shall be provided no
later than July 15, 1999; the second ten (10) components shall be
provided no later than September 15, 1999, and the remaining components
shall be provided no later than October 15, 1999.
ARTICLE 4
HEALTHSTREAM RESPONSIBILITIES TO CFCE
4.1 HealthStream will designate a project manager with sufficient
experience and training to resolve issues related to the production,
review and credentialling issues required by this project.
4.2 HealthStream will submit to CFCE a draft paper based version of each
Educational Activity it has converted to the Web for review and
approval by CFCE. CFCE will have twenty (20) working days to conduct
its reviews. Any approvals shall not be unreasonably withheld by CFCE.
4.3 HealthStream agrees to make all changes requested by CFCE in a timely
manner.
4.4 HealthStream will incorporate into each Educational Activity:
4.4.1 an accreditation statement to be provided by CFCE;
4.4.2 objectives to be created and provided by CFCE;
4.4.3 faculty disclosure information about actual or potential
conflicts of interest to be provided by CFCE;
4.4.4 Educational Activity evaluation to be provided by CFCE; and
4.4.5 a post test to be provided by CFCE.
4.5 HealthStream shall be responsible for issuing to qualified physicians a
document recognizing the attainment of CME credit. HealthStream shall
develop a system to bar issuance of such documentation unless the
participating physician has answered seventy-five percent (75%) of the
post test questions correctly.
4.6 HealthStream shall maintain a database of all users of the Educational
Activity and shall provide the following information quarterly to CFCE:
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4.6.1 number of users of each Educational Activity;
4.6.2 demographic information;
4.6.3 names of physicians who were issued letters of CME
accreditation for each Educational Activity; and
4.6.4 results of evaluations.
4.7 HealthStream shall submit for CFCE approval the format and content of
advertising, if any, so that CFCE can assure the requirements of ACCME
Standards For Commercial Support are met. CFCE will have ten (10)
working days to review and approve the format and content of such
advertising.
4.8 HealthStream shall submit for CFCE approval all promotional activities
related to this project. CFCE will have ten (10) working days to review
and approve such promotional activities.
4.9 HealthStream agrees to allow CFCE to acknowledge within each
Educational Activity the unrestricted educational grant provided by
Novartis Pharmaceutical.
ARTICLE 5
PRICE AND PAYMENT
5.1. During the term of this Agreement, HealthStream shall pay to CFCE (Tax
ID #: 34 - 0714553):
5.1.1. * in Licensing Fees according to the following terms;
5.1.2. * upon execution of this Agreement;
5.1.3. * on August 15, 1999; and
5.1.4. * on the earlier of September 15, 1999 or within thirty (30)
days after the delivery by CFCE of the final milestone.
5.2. HealthStream will pay a penalty of one percent (1%) per month for any
payment more than thirty (30) days past due. Failure of payment more
than ninety (90) days past due will be grounds for CFCE to withdraw the
license granted in Article 2 herein; in this event, CFCE will retain
all paid fees to that date.
5.3. Failure by CFCE to deliver the milestones in Section 3.4 herein within
ninety (90) days of the specified date will be grounds for HealthStream
to rescind this Agreement and CFCE refund the fees paid by HealthStream
for any undelivered milestones.
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ARTICLE 6
WARRANTIES AND INDEMNITIES
6.1. CFCE represents and warrants that:
6.1.1 Educational Content meets ACCME accreditation standards;
6.1.2. To the best of its knowledge Educational Content does not
infringe any copyright or patent enforceable under the laws of
any country;
6.1.3. To the best of its knowledge Educational Content does not
violate the trade secret rights of any third party; and
6.1.4. To the best of its knowledge Educational Content represents
the then existing reasonable standards of care.
6.2. Each party agrees to indemnify, hold harmless, and defend the other
from any and all damages, costs, and expenses, including reasonable
attorneys' fees, incurred in connection with a claim which constitutes
a breach of the warranties set forth in Section 4.1 provided, the
charged party is notified promptly in writing of a claim and has sole
control over its defense or settlement, and the party not charged
provides reasonable assistance in the defense of the same.
6.3. CFCE shall have no liability for any claim based on HealthStream's:
6.3.1. use or distribution of Educational Content after CFCE's
written notice that HealthStream should cease use or
distribution of Educational Content due to a claim, or
6.3.2. combination of Educational Content with a non-CFCE program or
data if such claim would have been avoided by the exclusive
use of Educational Content.
6.4. For all claims arising under Section 4.3, HealthStream agrees to
indemnify and defend CFCE from and against all damages, costs, and
expenses, including reasonable attorneys' fees. In the event CFCE
notifies HealthStream that it should cease distribution of Educational
Content due to a claim, HealthStream may terminate this Agreement.
ARTICLE 7
INTELLECTUAL PROPERTY PROVISIONS
7.1. HealthStream will cause to appear on all marketing or promotional
materials concerning the Educational Content, CFCE's copyright,
trademark, or patent notices.
7.2. The parties agree that ownership for any invention conceived or
developed during the course of this Agreement shall vest in accordance
with the patent rules governing inventorship.
7.3. To the extent that source code is written by either party title shall
vest in the party who has written such code.
7.4. Each party is responsible for protecting, documenting, and maintaining
its own intellectual property. Except as expressly set forth herein,
this Agreement does not grant either party any proprietary rights of
any type in the other party's materials, services or Content.
7.5. Both parties acknowledge that, except as otherwise provided herein,
each party owns and retains all right, title and interest in and to its
own Content provided to the other party.
7.6. HealthStream acknowledges that CFCE owns and retains all right, title
and interest in and to Educational Content and all CFCE's products and
services arising from the performance of this Agreement.
7.7. CFCE acknowledges that HealthStream owns and retains all right, title
and interest in and to
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T.NAV Commerce, the T.NAV Commerce source code, the T.NAV Commerce
object code, any derivatives of T.NAV Commerce and the interface
templates designed by HealthStream used to present and deliver the
Educational Content.
ARTICLE 8
PROHIBITION AGAINST ASSIGNMENT AND SUBLICENSE
This Agreement, and any rights or obligations hereunder, shall not be assigned
or sublicensed (except as permitted in this Article 6) by either party.
Notwithstanding the foregoing, this Agreement may be assigned to a successor in
interest to all of a party's assets or substantially all of a party's assets and
shall inure to the benefit of and be binding upon successors or purchasers of
substantially all of either party's assets. CFCE may , at its sole discretion,
enter into an agreement with any vendor, including UNITECH Communications, to
fulfill the terms of this agreement. The costs, if any, of such agreements will
be borne by CFCE.
ARTICLE 9
TERM OF AGREEMENT
Provided this Agreement has been properly executed by an authorized
representative of CFCE and by an officer of HealthStream, the term of this
Agreement ("Term") shall run from the Effective Date until three (3) year(s)
after the Effective Date, and thereafter be automatically extended for
additional one (1) year periods unless either party provides thirty (30) days
written notice to the non-terminating party. Nothing in this article prohibits
CFCE from exercising its responsibilities under the terms of its
responsibilities to the ACCME which calls for timely review for accuracy and
relevance of all educational activities and for termination of granting CME
credit for those activities. (See Section 3.3 herein).
ARTICLE 10
DEFAULT AND TERMINATION
10.1 The non-defaulting party may terminate this Agreement in its entirety
if any of the following events of default occur:
10.1.1 if the defaulting party materially fails to perform or comply
with this Agreement or any provision hereof;
10.1.2 if the defaulting party fails to strictly comply with the
provisions of Article 11, or makes an assignment in violation
of Article 6;
10.1.3 if a party becomes insolvent or admits in writing its
inability to pay its debts as they mature, or makes an
assignment for the benefit of creditors;
10.1.4 if a petition under any foreign, state, or United States
bankruptcy act, receivership statute, or the like, as they now
exist, or as they may be amended, is filed by a party; or
10.1.5 if such a petition is filed by any third party, or an
application for a receiver of a party is made by anyone and
such petition or application is not resolved favorably or
discharged to such party within ninety (90) days.
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10.2 Termination due to a breach of Articles 6 or 11 shall be effective upon
notice. In all other cases termination shall be effective sixty (60)
days after notice of termination to the defaulting party if the
defaults have not been cured within such sixty (60) day period. The
rights and remedies of the parties provided herein shall not be
exclusive and are in addition to any other rights and remedies provided
by law or this Agreement.
ARTICLE 11
OBLIGATIONS UPON TERMINATION
11.1. From and after termination or expiration of this Agreement,
HealthStream shall not employ Educational Content or portions thereof
which is owned by CFCE, as part or portion of any product that
HealthStream may use, sell, assign, lease, license, or transfer to
third parties. Both parties shall cease and desist from all use of the
other party's name(s) and associated trademark(s) and, upon request,
deliver to the other party or its authorized representatives or destroy
all material upon which those name(s) and the associated trademarks
appear.
11.2. Articles 4, 5, 9, 10, 11, 12, 13, Section 14.1, and Article 15 shall
survive termination or expiration of this Agreement.
ARTICLE 12
WARRANTIES, LIMITATION OF LIABILITY AND REMEDIES
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER
WARRANTIES. ANY AND ALL OTHER IMPLIED WARRANTIES OF ANY KIND WHATSOEVER,
INCLUDING THOSE FOR MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE, ARE
EXPRESSLY EXCLUDED. NEITHER PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL
(INCLUDING WITHOUT LIMITATION LOST PROFITS, UNLIQUIDATED INVENTORY, ETC.),
INCIDENTAL, INDIRECT, ECONOMIC, OR PUNITIVE DAMAGES EVEN IF THE OTHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
ARTICLE 13
NONDISCLOSURE AGREEMENT
13.1. HealthStream expressly undertakes to retain in confidence all
information and know-how transmitted to HealthStream by CFCE that CFCE
has identified as being proprietary and/or confidential or that, by the
nature of the circumstances surrounding the disclosure, ought in good
faith to be treated as proprietary and/or confidential, and will make
no use of such information and know-how except under the terms and
during the existence of this Agreement. HealthStream shall not
disclose, disseminate or distribute any such confidential information
or know how to any third party without CFCE's prior written consent.
HealthStream agrees to use the same degree of care to protect CFCE
confidential information as HealthStream takes to protect its own
confidential information of like importance. However, HealthStream
shall have no obligation to maintain the confidentiality of information
that:
13.1.1. it received rightfully from another party prior to its receipt
from CFCE;
13.1.2. CFCE has disclosed to a third party without any obligation to
maintain such information in confidence; or
13.1.3. has been or is independently developed by HealthStream.
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13.2. Further, HealthStream may disclose confidential information as required
by governmental or judicial order, provided HealthStream gives CFCE
prompt notice of such order and complies with any confidentiality or
protective order (or equivalent) imposed on such disclosure.
HealthStream shall treat the terms and conditions of this Agreement as
confidential; however, HealthStream may disclose such information in
confidence to its immediate legal and financial consultants as required
in the ordinary course of HealthStream's business. HealthStream's
obligation under this Article 12 shall extend to the earlier of such
time as the information protected hereby is in the public domain
through no fault of HealthStream or five (5) years following
termination or expiration of this Agreement. HealthStream shall not
disclose any information on CFCE's unannounced products to
HealthStream's employees or any third party.
13.3. CFCE shall have the same obligations in Sections 11.1 and 11.2 above
with respect to HealthStream's information and know-how.
13.4. Both parties shall prepare a mutually acceptable press release, if any,
to announce this Agreement.
ARTICLE 14
NOTICES AND REQUESTS
All notices, authorizations, and requests in connection with this Agreement
shall be deemed given three (3)days after they are deposited in the U.S. mails,
postage prepaid, certified or registered, return receipt requested, or sent by
air express courier, charges prepaid; and addressed as follows:
CFCE: The Cleveland Clinic Center for Continuing Education
Xxxxxxx X. Xxxxx, MD, Director
TT-31
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
With a copy to:
Office of General Counsel
0000 Xxxxxx Xxxxxx, Mail Code X-00
Xxxxxxxxx, XX 00000
HEALTHSTREAM: HealthStream, Inc.
Xxxxxx X. Xxxxx, Xx.
General Counsel
000 00xx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
or to such other address as the party to receive the notice or request so
designates by written notice to the other.
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ARTICLE 15
CONTROLLING LAW
14.1. This Agreement shall be construed and controlled by the laws of the
State of Ohio.
14.2. Neither this Agreement, nor any terms and conditions contained herein,
shall be construed as creating a partnership, joint venture or agency
relationship or as granting a franchise as defined in 16 CFR Section
436.2(a). The price and payment described in Article 3 of this
Agreement shall be construed as a royalty fee for the rights granted in
Article 2 of this Agreement, and not as a franchise fee.
ARTICLE 16
ATTORNEYS' FEES
If either HealthStream or CFCE employs attorneys to enforce any rights arising
out of or relating to this Agreement, the prevailing party in any proceeding
shall be entitled to recover its reasonable attorneys' fees, costs and other
expenses.
ARTICLE 17
GENERAL
17.1. This Agreement does not constitute an offer by HealthStream and it
shall not be effective until signed by both parties. Upon execution by
both parties, this Agreement shall constitute the entire agreement
between the parties with respect to the subject matter hereof and
replaces and supplants all prior and contemporaneous communications
including the Letter of Intent signed by the parties March 28, 1999. It
shall not be modified except by a written agreement signed on behalf of
CFCE and HealthStream by their respective duly authorized
representatives. Unless agreed to in a separate writing signed by both
parties, any statement appearing as a restrictive endorsement on a
check or other document which purports to modify a right, obligation or
liability of either party shall be of no force and effect.
17.2. If any provision of this Agreement shall be held by a court of
competent jurisdiction to be illegal, invalid, or unenforceable, the
remaining provisions shall remain in full force and effect. If this
Agreement as it relates to any product(s) licensed hereunder shall be
held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable or if this Agreement is terminated as to particular
product(s), this Agreement shall remain in full force and effect as to
the remaining product(s).
17.3. No waiver of any breach of any provision of this Agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of
the same or any other provisions hereof, and no waiver shall be
effective unless made in writing and signed by an authorized
representative of the waiving party.
17.4. The Article headings used in this Agreement and the attached Exhibits
are intended for convenience only and shall not be deemed to supersede
or modify any provisions.
17.5. Change in Law and Compliance.
17.5.1. Change in Law. By entering into this Agreement, the parties
specifically intend to comply with all applicable laws, rules
and regulations, including (I) the federal anti-kickback
statute (42 U.S.C. 1320a-7(b)) and the related safe harbor
regulations; and (ii) the Limitation on Certain Physician
Referrals, also referred to as the "Xxxxx Law" (42 U.S.C.
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1395nn). Accordingly, no part of any consideration paid
hereunder is a prohibited payment for the recommending or
arranging for the referral of business or the ordering of
items or services; nor are the payments intended to induce
illegal referrals of business. In the event that any part of
this Agreement is determined to violate federal, state, or
local laws, rules, or regulations, the parties agree to
negotiate in good faith revisions to the provision or
provisions which are in violation. In the event the parties
are unable to agree to new or modified terms as required to
bring the entire Agreement into compliance, either party may
terminate this Agreement on sixty (60) days written notice to
the other party.
17.5.2. Compliance. By executing this Agreement, to the extent
applicable, HealthStream agrees that Cleveland Clinic shall
have the right to automatically terminate this Agreement in
the event that HealthStream is debarred, excluded, suspended
or otherwise determined to be ineligible to participate in
federal health care programs (collectively, "Debarred" or
"Debarment"). Accordingly, HealthStream shall provide
Cleveland Clinic with immediate notice if HealthStream (i)
receives notice of action or threat of action with respect to
its Debarment during the term of this Agreement; or (ii)
becomes Debarred. Upon receipt of such notice from
HealthStream, this Agreement shall automatically terminate
without further action or notice.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth in Section 1.5 above. All signed copies of this Agreement shall
be deemed originals.
/S/ Xxxxxxx X. Xxxxx /S/ Xxxxxx Xxxxx, Xx.
--------------------------------- -------------------------------
The Cleveland Clinic Foundation HealthStream, Inc
Xxxxxxx X. Xxxxx, MD Xxxxxx Xxxxx
Vice Chair, Division of Education Chief Executive Officer.
APPROVED AS TO FORM
OFFICE OF
GENERAL COUNSEL
By /s/ CCF Office of General Counsel
------------------------------------
Date 6/8/99
----------------------------------
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EXHIBIT A
INFORMATION BASE FOR THE EDUCATIONAL PRODUCT
The 1998 Cleveland Clinic Intensive Review of Internal Medicine on CD-ROM
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EXHIBIT B
ACCREDITATION COUNCIL FOR CONTINUING MEDICAL EDUCATION ESSENTIALS AND
GUIDELINES FOR ACCREDITATION OF SPONSORS OF CONTINUING MEDICAL
EDUCATION AND STANDARDS FOR COMMERCIAL SUPPORT AND ENDURING MATERIALS
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