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EXHIBIT 10.54
FOURTH AMENDMENT TO
AMENDED AND RESTATED PURCHASE,
CONSULTING AND DISTRIBUTION AGREEMENT
This agreement (the "Amendment") constitutes the Fourth Amendment to
the Amended and Restated Purchase, Consulting and Distribution Agreement, as
amended (the "Amended and Restated Agreement"), with an effective date of
October 1, 1992, by and between NATIONAL HEALTH ENHANCEMENT SYSTEMS, INC., a
Delaware corporation ("NHES"), and MICROMEDEX, INC., a Delaware corporation
("MDX"). The Amendment and the Amended and Restated Agreement are hereinafter
referred to as the "Agreement." Capitalized terms not otherwise defined herein
shall have the same meanings as are assigned thereto in the Amended and Restated
Agreement, except as the context otherwise requires.
WHEREAS, the parties recognize that NHES is continuously investing in
development and improvement of the HRIS Product, and they desire that NHES
invest more heavily in the HRIS Product during the NHES fiscal years ending
January 31, 1998, 1999 and 2000 (the "Development Term");
WHEREAS, in order to encourage NHES to make such additional investments
in the HRIS, MDX is willing to "co-invest" in such development and improvement
activity by reducing the amount of license fees payable to MDX under the
Agreement, as provided herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEVELOPMENT PLAN AND QUARTERLY REVIEW PROCESS. Using the form
attached hereto as Exhibit A, NHES will deliver to MDX on a quarterly basis
written proposals for specific uses of the Targeted Money (as defined below) to
develop and improve the HRIS Product during the Development Term ("Proposals").
The Proposals shall be subject to MDX's approval, which will not be unreasonably
withheld or delayed. If MDX has not, within 15 days after receipt of a Proposal
either requested a meeting with NHES (which may be telephonic) within the next
15 days following such request, or objected in writing to the Proposal, the
Proposal shall be deemed to be approved by MDX and NHES may proceed with the
work described therein, funding the same with Targeted Money.
2. TARGETED MONEY. MDX agrees to "invest" pursuant to this Amendment,
by way of fee reductions as provided in Section 3 hereof, $64,326 for fiscal
year ending January 31, 1997; $549,112 for fiscal year ending January 31, 1998;
$404,017 for fiscal year ending January 31, 1999; and $427,874 for fiscal year
ending January 31, 2000. Such amounts are defined herein as "Targeted Money".
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3. MDX INVESTMENT BY LICENSE FEE REDUCTIONS. Subject to Section 4
(RISK SHARING), the amounts otherwise payable to MDX by NHES under the Agreement
shall be reduced by the amount of Targeted Money for the related fiscal year, as
follows:
License Fee Reduction For FY Ending January 31,
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$ 64,326 1997
$549,112 1998
$404,017 1999
$427,874 2000
NHES shall use such Targeted Money solely for funding approved Proposals.
4. RISK SHARING. The parties are entering into this Amendment on the
express assumption that developing new and improved HRIS Product should result
in more licenses of HRIS Products ("Units") than otherwise would have occurred.
In order to share in the risk that the assumption may not prove to be true, the
parties agree that the amount of Targeted Money payable under Section 3 for a
fiscal year shall be reduced by an amount determined by multiplying (a) the
"Projected Units" set forth below less the actual number of Units licensed by
NHES during that fiscal year, times (b) the "Per Unit Amount" set forth below:
For FY Ending January 31, Projected Units Per Unit Amount
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1998 140 $1,961
1999 165 $1,224
2000 185 $1,156
For example, if for the fiscal year ended January 31, 1999, NHES sold licenses
for 150 Units, then the Target Money for that year ($404,017) would be reduced
by $18,360 [165 (Projected Units) minus 150 (actual Units) times $1,224].
5. INSPECTION RIGHTS. During the Development Term and for a period of
no fewer than twelve (12) months following termination thereof, NHES agrees to
permit MDX to inspect, during regular business hours and upon reasonable prior
written notice, the relevant books and records of NHES for the purpose of
ascertaining NHES's compliance with Sections 2, 3 and 4 of this Amendment.
6. TERMINATION RIGHT. MDX shall have the right, but not the
obligation, to terminate its obligations under this Amendment relating to fiscal
years ending January 31, 1999 and 2000, upon delivery of at least thirty (30)
days prior written notice of termination to NHES, provided that such termination
shall not terminate any Proposal that has been approved by MDX or the related
reduction of license fees otherwise owed to MDX under the Agreement.
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7. ENTIRE AGREEMENT. This Amendment modifies the Amended and Restated
Agreement. All terms and conditions of the Amended and Restated Agreement apply,
including, but not limited to, Section 2 (Health Reference Information System
Product Development) and Section 3 (Ownership & Indemnity), unless explicitly
modified by this Amendment.
Dated as of April 10, 1997.
MICROMEDEX, INC. NATIONAL HEALTH ENHANCEMENT SYSTEMS, INC.
By /s/ Xxxxxxx X. Xxxxx By /s/ Xxxx X. Xxxx
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Its CFO Its Chief Financial Officer
