EXHIBIT 10.24
CONFIDENTIAL TREATMENT REQUESTED
AGREEMENT
This Agreement is made and entered into this 12th day of February, 1999 (the
"Effective Date"), between America's Doctor, Inc. (hereinafter "ADOL"), located
at 00000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxx 00000 and Xxxxx &
Nephew Inc., Rehabilitation Division (hereinafter "S&N"), Xxx Xxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxx, 00000. ADOL and S&N are incorporated in Delaware.
Recitals
ADOL and S&N desire to enter into this Agreement to establish terms and
conditions for engaging in an electronic commerce venture utilizing one or more
Internet sites and pages (the "Site") in which the manufacturing, distribution,
warehousing, product, fulfillment, call center and customer service capabilities
of S&N will be integrated with the Internet-based, interactive medical
information delivery capabilities of ADOL.
Agreement
1. Duties and Responsibilities
1.1 ADOL shall:
i. Maintain its current Internet site on America Online until expiration of
its current America Online agreement;
ii. Establish and maintain a world wide web site no later than March 15, 1999;
iii. Identify, purchase and integrate such electronic commerce software as may
be required to establish an active and functioning electronic commerce
site that can incorporate existing S&N call center capabilities. ADOL
shall be the sole owner of any and all such software and, unless otherwise
provided for, information derived therefrom;
iv. Identify and provide to S&N specific disease management topics to be
maintained on the Site;
v. Create and maintain a generic disease specific template for use on the
Site;
vi. Create and maintain disease specific pages to be used on the Site;
vii. Within 180 days of the Effective Date, or as negotiated, and if requested
by S&N, create and maintain a password protected section of the Site in
order to conduct business to business transactions, such site to include
AD Chatware if requested by S&N;
viii. For each S&N product sold via the Site, pay to S&N shipping and handling
fees and an amount equal to [***]. ADOL will be invoiced daily through
electronic data interchange (EDI) for fulfillment products with payment
due in ten (10) days;
ix. For non-S&N products sold in which S&N acts as a fulfillment center, pay
to S&N shipping and handling fees and a fee equal to [***] percent of
the retail (Internet) selling price,
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Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [***]. A complete version of this
exhibit has been filed separately with the Securities and Exchange Commission.
excluding shipping, handling, and taxes;
x. For any monthly period in which S&N's call center is utilized by ADOL for
non-S&N products sold in which S&N does not act as a fulfillment center,
and customer support and product information for such products are
supported solely through the S&N call center, pay to S&N a fee equal to
[***] percent of the retail (Internet) selling price of such products,
excluding shipping, handling and taxes sold via the Site. All such
non-fulfillment, retail sales will be transmitted to S&N on a daily basis
under source codes determined by S&N;
xi. Compensate S&N for personnel-related call center expenses directly
associated with ADOL incurred in excess of such existing call center
expenses during the hours between six o'clock p.m. and seven o'clock a.m.,
all times Central Time Zone, by paying monthly an amount equal to one half
of such expenses for the previous month. Such personnel-related expenses
are defined as 115% of the salaries paid during the hours between six
o'clock p.m. and seven o'clock a.m., all times Central Time Zone. The
hiring of such personnel, in excess of two per shift, requires the mutual
approval of ADOL and S&N;
xii. At ADOL's discretion, pay routine and normal costs associated with
producing video clips for non-S&N products;
xiii. Utilize good faith efforts to promote, market and sell S&N Products
included in the Site;
xiv. For all products provided for under this Agreement, provide electronic
order taking, including credit card acceptance for payment (the method of
which shall include but not be limited to VISA, MasterCard, Discover and
American Express), and the revenues of any such transactions credited to
ADOL;
xv. Collect, remit and report any and all applicable taxes related to
electronic commerce conducted via the Site. ADOL will be responsible for
audit assessments arising from these transactions.
1.2 S&N shall:
i. Pay to ADOL a one time portal access fee of [***] structured as follows:
(1) Within 30 days of the Effective Date, a payment of [***], and (2)
beginning March 1, 1999, [***] per month, with the final payment in
February, 2000. All payments will be forwarded to ADOL by the tenth
(10th) day of each month. Such payments will satisfy any and all access
fees required by this Agreement;
ii. Maintain its current call center capabilities in order to provide coverage
during existing current call center hours of operation and, unless
otherwise directed by ADOL, expand its call center capabilities by a
mutually agreed upon date in order to provide coverage 24 hours per day, 7
days per week, but in no case less than two personnel at any given time
dedicated to providing service;
iii. Provide computer hardware as may be required to operate such a call
center. S&N shall be the sole owner of any and all such hardware;
iv. Identify, qualify and hire such customer service personnel as may be
required to staff such a call center;
v. Utilizing the disease management topics as provided by ADOL, provide
recommendations for products to be included in such a disease management
area;
vi. Develop fault trees/decision matrices for disease management topics, as
appropriate, and
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integrate such systems with applicable disease management areas and/or
products. S&N shall own such fault trees/decision matrices;
vii. With the assistance of ADOL IT personnel, provide initial and recurring
training and certification of customer service personnel on (1) web site
software and hardware and (2) products offered for sale via the Site;
viii. Where requested by ADOL, provide fulfillment services for non-S&N
products. Such products will be procured through a consignment
relationship with the vendor or paid for by ADOL;
ix. For S&N products, and non-S&N products handled by S&N in the manner of a
fulfillment center, provide quality assurance, inventory, handling,
shipping and/or distribution as may be required to fulfill consumer
orders, with such shipping to occur in most cases within forty-eight (48)
hours maximum utilizing existing S&N shipping methods and procedures,
except as specified and reimbursed by the consumer for overnight (24 hour)
delivery or as authorized by ADOL. If shipment cannot be made within
forty-eight (48) hours, customer will be contacted by S&N and advised of
shipment date;
x. Maintain detailed information, frequently asked questions and relevant
data on S&N products in a 'pop-up' format that may be used by customer
service personnel;
xi. Utilize good faith efforts to promote and market America's Doctor as a
portal to health care products;
xii. Add the Site address to the priced version of all its consumer direct
product catalogs for the duration of the Agreement;
xiii. During the term of this Agreement, and wherever possible, utilize ADOL for
its business-to-business electronic commerce conducted via the Internet;
xiv. For business-to-business transactions conducted via the Site with
customers introduced by ADOL, pay a fee equal to [***]. For
business-to-business transactions conducted via the Site with customers
not introduced by ADOL, pay a fee of [***] every year thereafter on total
aggregate (cumulative) sales from such transactions. For
business-to-business transactions conducted telephonically with
customers introduced by ADOL, pay a fee to ADOL, the percentage and
duration of which shall be equal to [***];
xv. As requested by ADOL, but no sooner than three months following the
Effective Date, or as negotiated and mutually agreed to by ADOL and S&N,
provide video clips of S&N products for integration into the Site;
xvi. Maintain a video production capability for all products included in the
Site, as agreed by S&N and ADOL;
xvii. Allow ADOL to utilize the S&N call center, at ADOL's discretion, for
non-S&N products sold in which S&N does not act as a fulfillment center,
and customer support and product information is supported solely through
the S&N call center.
1.3 ADOL shall use its best efforts to promote and market its web site.
1.4 For purposes of this agreement, "S&N products" shall include such products
manufactured by S&N and other such products marketed, distributed and/or
sold by S&N.
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1.5 For purposes of this Agreement, "Net Sales" shall mean the gross revenues
received by S&N from its sale of S&N products less taxes, transportation,
duties, discounts and credit for returned products.
1.6 S&N will credit ADOL for the invoice price of properly returned products
purchased by ADOL or consumers using the ADOL site from S&N (for products
returned more than 30 days from the date of purchase, a 15% handling and
restocking fee will be deducted); provided, however, that if the product
shipped to ADOL or ADOL consumer was defective, full credit (without the
15% reduction) will be given regardless of the return date. If the product
is not defective and the returned product cannot be resold, ADOL and S&N
agree that no credit will be given except on a product-by-product basis as
agreed upon by ADOL and S&N. In such case, ADOL and S&N will each bear a
percentage of the return cost based upon the revenue split of the initial
transaction. S&N will provide a monthly returns report. S&N products will
be dealt with as stated above. ADOL will determine disposition of non-S&N
products. S&N bears no responsibility for disputes between customers and
ADOL regarding non-S&N Products.
1.7 To ensure continued sales growth and market acceptance, ADOL and S&N will
work together to improve all facets of the online site and offline
operations. ADOL and S&N agree to review on a regular basis the provisions
of this Agreement and renegotiate in good faith such provisions that
result in a demonstrably unfair burden to one of the parties.
1.8 Unless otherwise specified within this Agreement, all hardware, software
and products shall be owned by the developing or purchasing party.
1.9 The parties shall in good faith negotiate the terms of a separate
agreement with respect to international transactions.
1.10 All customer mailing lists created pursuant to this Agreement shall be
jointly owned by the parties and may not be sold or shared without the
written agreement of both parties.
2. Duration
2.1 This Agreement shall be effective as of the date first set forth above and
shall continue in effect for a period of six (6) years. S&N shall have a
right of first offer to renew this Agreement for an extended term
following the expiration of the initial six (6) year term.
3. Termination
3.1 Either party may terminate this Agreement by written notice (the "Notice")
effective as of delivery of such notice to the other party in the event
that any of the following events occur:
(a) A receiver is appointed over any of the assets of the other party;
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(b) The other party becomes insolvent or unable to pay its debts as they mature
or ceases to pay its debts as they mature in the ordinary course of business or
makes an assignment for the benefit of its creditors; or
(c) Any voluntary proceedings are commenced by or for the other party under any
bankruptcy, insolvency, or debtors relief law; or any involuntary proceedings
are commenced against the other party under any bankruptcy, insolvency, or
debtors relief law and such proceedings are not vacated or set aside within
sixty (60) days from the commencement thereof.
3.2 Any material breach by either party of any term of this Agreement shall
entitle the other party to terminate this Agreement provided it first
gives notice to the other party and permits the other party sixty (60)
days to cure said breach.
3.3 Notwithstanding the terms of paragraph 1.2 (i), S&N shall not be obligated
to pay any portion of the portal access fee which is unaccrued as of the
effective date of termination of this Agreement.
4. Product Restrictions and Changes
4.1 ADOL reserves the right to restrict the inclusion of any product to its
site(s). Material changes by S&N to any S&N product, excepting retail
price, requires ten (10) day prior notification of ADOL.
4.2 For the duration of the Agreement, ADOL may not include in its Site(s) any
product that is a direct competitor of an S&N product without S&N being
given an opportunity to provide to ADOL such an equivalent, similar
quality, similarly priced product. The products of companies that ADOL has
begun negotiating with prior to the Effective Date are exempt from this
provision. For the duration of the Agreement, S&N agrees to prohibit
and/or restrict online sales of S&N products, without prior permission
from ADOL, from any and all health-related information sites and
health-related product sites competing on the same or similar basis as
ADOL. Sites in which S&N products are being sold prior to the Effective
Date are exempt from this provision.
5. Indemnification:
5.1 Indemnification by ADOL: ADOL hereby agrees to indemnify, defend, and hold
S&N, its officers, affiliates, subsidiaries, agents, and employees (the
"S&N Indemnitees") harmless from and against all liabilities, losses,
costs, expenses, damages, claims, demands, suits or judgments (including,
but not limited to, reasonable attorneys' fees, disbursements and the
costs of any legal action) arising out of or in connection with any claim
against any of the S&N Indemnitees in connection with or as a result of
(i) medical information delivered by ADOL and not originating with S&N,
(ii) any non-S&N product, or (iii) ADOL's breach or nonfulfillment of its
obligations under this Agreement.
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5.2 Indemnification by S&N: S&N hereby agrees to indemnify, defend, and hold
ADOL, its officers, affiliates, subsidiaries, agents, and employees (the
"ADOL Indemnitees") harmless from and against all liabilities, losses,
costs, expenses, damages, claims, demands, suits or judgments (including,
but not limited to, reasonable attorneys' fees, disbursements and the
costs of any legal action) arising out of or in connection with any claim,
directly or indirectly, against any of the ADOL Indemnitees in connection
with or as a result of (i) any and all S&N products, (ii) the abuse,
negligence, or willful misconduct of S&N, (iii) S&N's promotion or
description of its products, or (iv) S&N's breach or nonfulfillment of its
obligations under this Agreement.
5.3 Indemnification Procedures:
(a) Promptly upon learning of any claim for which indemnification is sought from
the Indemnifying Party, the Indemnified Party shall notify the Indemnifying
Party in writing of such claim and shall furnish to the Indemnifying Party all
information known and available to the Indemnified Party related to such claim.
(b) In the event of commencement of litigation on the basis of such claim, the
Indemnified Party shall tender the defense of such litigation to the
Indemnifying Party.
(c) The Indemnified Party shall comply with instructions received from the
Indemnifying Party relating to settlement of such claim, if any, to the extent
that it lies within the power of the Indemnified Party to comply with any such
instructions, excluding any instruction that requires the Indemnified Party to
license or otherwise make available technology, intellectual property, or
confidential information to a third party.
(d) If the Indemnifying Party undertakes defense of such litigation, the
Indemnifying Party shall be entitled to appoint its attorneys to defend the case
in the name of the Indemnified Party, and the Indemnified Party shall cooperate
fully with the Indemnifying Party and its chosen attorneys in the defense of
such litigation. The Indemnified Party shall be free to appoint its own
attorneys in the same litigation, at its sole expense, although all decisions
with respect to the conduct or settlement of such litigation shall remain solely
with the Indemnifying Party.
6. Audits: Each party shall have the right to audit the financial records of
the other party with respect to documentation directly related to the
financial terms and agreements contained herein.
7. Miscellaneous
7.1 Waiver: The waiver by either party of a breach or default in any of the
provisions of this Agreement by the other party shall not be construed as
a waiver of any succeeding breach of the same or any other provision.
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7.2 Provisions: If any provisions of this Agreement shall be held to be
invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions of this Agreement shall not in
any way be affected or impaired thereby.
7.3 Entirety: This Agreement and any exhibit(s) hereto contain the entire
agreement between the parties with respect to the subject matter hereof.
The parties represent that, in entering into this Agreement, they are not
relying upon any previous representation, inducement, or agreement of any
kind.
7.4 Amendments: This Agreement shall be amended or modified only by a written
instrument executed by the duly authorized representatives of both
parties.
7.5 Attorneys' Fees: If litigation is brought concerning this Agreement, the
prevailing party shall be entitled to receive from the non-prevailing
party, and the non-prevailing party shall upon final judgment and
expiration of all appeals immediately pay upon demand, all reasonable
attorneys' fees and expenses of the prevailing party. Except as otherwise
provided in this Agreement, each party shall pay its own legal fees and
disbursements and other expenses incurred in connection with this
Agreement.
7.6 Binding Effect: This Agreement shall be for the benefit of, and shall be
binding upon, the parties and their respective heirs, personal
representatives, executors, legal representatives, successors, and
permitted assigns.
8. Trademarks
8.1 S&N's trade names, trademarks, service marks, logos and other proprietary
symbols shall be and remain the sole and exclusive property of S&N. ADOL's
trade names, trademarks, service marks, logos and other proprietary
symbols shall be and remain the sole and exclusive property of ADOL.
Neither party shall have the right to use in any way or reproduce for any
purpose the corporate trade names, trademarks, service marks, logos or
other proprietary symbols of the other party without that party's prior
written consent. All advertising or promotional materials broadcast,
displayed, published or distributed by either party pursuant to this
Agreement in conjunction with either party's corporate trade names,
trademarks, service marks or logos shall be subject to the parties'
written consent, which shall not unreasonably be withheld.
9. Confidentiality
9.1 The parties acknowledge that during the Term of this Agreement, the
parties will be making use of, acquiring and adding to confidential
information of a special and unique nature and value relating to such
matters as, but not limited to, the parties' business operations, internal
structure, financial affairs, systems, procedures, manuals, confidential
reports and lists of accounts, trade secrets, customers and vendors, as
well as the amount, nature and type of services used and preferred by
ADOL's accounts and customers and the fees paid by such accounts and
customers, all of which shall be deemed to be confidential
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information. In consideration of entering into this Agreement, the parties
agree that during the Term and for a period of two (2) years after
termination of this Agreement, the parties shall not, for any reason or
purpose whatsoever, directly or indirectly, divulge or disclose to any
person or entity any of such confidential information which was obtained
as a result of this Agreement and work performed hereunder, or any
information or knowledge respecting the affairs of the other party or any
of its officers, directors, executives, stockholders, accounts, customers
or referrers of accounts learned during the Term of this Agreement, but
shall hold all of the same inviolate.
10. Information to be contained on the Site(s):
10.1 Except as otherwise provided in this Agreement, all information regarding
S&N products to be contained on the ADOL Site shall be restricted to
information provided by S&N to ADOL (the "Product Information"). S&N shall
be responsible, at its sole cost and expense, for providing Product
Information to ADOL in a format mutually agreeable between S&N and ADOL.
Such specifications may include, but not be limited to, that the Product
Information must be delivered in a readable form usable on a specified
software program. ADOL is permitted to modify the format, including the
design and layout, of the Product Information provided by S&N to ADOL
pursuant to this section. However, ADOL shall make no revisions to the
content of the Product Information provided by S&N (other than price
adjustments) unless S&N agrees to such revisions in writing.
11. Notices: All notices under this Agreement shall be sufficient if
hand-delivered, sent via reputable overnight carrier, or via U.S.
certified mail, postage prepaid, to the following addresses:
If to S&N:
Xxxxx & Nephew, Inc., Rehabilitation Division
Attention: Xxx Xxxxxxxxx
N104 W13400 Xxxxxx Xxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
With a copy to:
Xxxxx & Nephew, Inc.
Attention: General Counsel
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
If to ADOL, Inc:
America's Doctor, Inc.
Attention: Xxxxx Xxxxxx, M.D.
00000 Xxxxxxxxx Xxxxx, Xxxxx 000
0
Xxxxxx Xxxxx, Xxxxxxxx 00000
With a copy to:
Rifkin, Livingston, Xxxxxxx & Silver, LLC
Attention: Xxxxx Xxxxxxxxx
000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
12. Governing Law: The construction, performance and enforcement of this
Agreement shall be governed by and construed in accordance with the laws
of the State of Wisconsin.
13. Arbitration: Any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, shall be submitted to arbitration in
accordance with the Commercial Rules of the American Arbitration
Association; provided, however, that this clause shall not be construed to
limit or to preclude either party from bringing any action in any court of
competent jurisdiction for injunctive or other provisional relief as
necessary or appropriate. The arbitration shall be conducted in: (a)
Baltimore, Maryland, if the claim is brought by S&N, or (b) Milwaukee,
Wisconsin, if the claim is brought by ADOL, at the office of the American
Arbitration Association. Any award or determination of the arbitration
tribunal shall be final, non-appealable, and conclusive upon the parties,
and judgment thereon may be entered by any court of competent
jurisdiction.
14. Force Majeure: In the event that either party is prevented from
performing, or is unable to perform any of its obligations under this
Agreement due to any act of God, fire, casualty, flood, war, strike,
lockout, failure of public utilities, injunction or any act, exercise,
assertion or requirement of governmental authority, epidemic, or any other
cause beyond the reasonable control of the party invoking this provision,
and if such party shall have used its best efforts to avoid such
occurrence and minimize its duration and has given prompt notice to the
other party, the affected party's performance shall be excused and the
time for performance shall be extended for the period of delay for
inability to perform due to such occurrence.
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Intending to be legally bound, the parties have executed this Agreement by their
duly authorized officers as of the day and year first above written.
America's Doctor, Inc. Xxxxx & Nephew, Inc.
Rehabilitation Division
By: /s/ Xxxxx X. Xxxxxx, M.D. By: /s/ Xxxxx X. XxXxxxxx
Title: CEO Title: President
Date: 2/16/99 Date: 2/16/99
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