Exhibit 10.5
In this document an "#" indicates that confidential material has been omitted
pursuant to a request for confidential treatment filed with the Office of the
Secretary of the Securities and Exchange Commission together with the omitted
material.
PILOT AGREEMENT
This Pilot Agreement is entered into as of the 28th day of December 1999 by and
between Professional Claim Services, Inc., a New York corporation doing business
as WellPoint Pharmacy Management ("WPM"), and Cymedix Lynx Corporation, a
Colorado corporation ("Cymedix")
RECITALS
A. Cymedix is the developer of Xxxxxxx.xxx, a proprietary software product
(the "Cymedix Software") designed to enable healthcare industry participants to
effectively communicate vital medical, financial and administrative information
over the Internet on a secure basis and to execute standard administrative
transactions, with a view to simplifying communications, improving patient care
and reducing the cost of that care.
B. WPM and Cymedix are parties to a binding letter of intent dated September
8, 1999 (the "LOI"), providing for the general terms of a pilot program (the
"Pilot Program") to integrate the pharmacy management component of the Cymedix
Software the (the "RX Software") under contract with Blue Cross of California, an
affiliate of WPM ("BCC") and/or other Health Plans.
C. The LOI also summarizes the general terms of the production programs (the
"Production Programs") that Cymedix will seek to implement with BCC, Unicare and
other health plans (collectively, "Health Plans") to expand the use of the TX
Software and other special functionality modules of the ("Cymedix Software
Modules") among physicians and healthcare industry service providers under
contract with the Health Plans.
D. In accordance with the LOI, Medix Resources, Inc., the parent company of
Cymedix ("Medix"), has issued to WPM warrants to purchase up to 6 million shares
of Medix common stock, or an amount equal to 19.9%, on a fully diluted basis,
calculated as of the date of issue, of the total number of outstanding shares of
Medix Common Stock, and has agreed to nominate a designee of WPM for appointment
to the Medix board of directors.
E. The parties desire to enter into this Agreement to memorialize their
respective responsibilities for implementing, conducting and monitoring the Pilot
Program and to establish objective criteria for determining its success (the
"Pilot Criteria").
Accordingly, the parties hereby agree as follows:
AGREEMENT
1. Objectives of the Pilot Program. The Pilot Program will establish an
electronic communication link between WPM and the Pilot Providers, enabling WPM
to evaluate the viability of the link and the value of the RX Software to BCC
and/or Health Plans, WPM and the Pilot Providers. During the course of the Pilot
Program, Cymedix will also complete and validate its data interface technology
included in the Cymedix Software to automate the process of acquiring relevant
data from legacy medical management systems maintained by the Pilot Providers
(the "Universal Interface")
2. Pilot Criteria.
2.1 Objective Standards. The Pilot Criteria shall be deemed to be
satisfied upon (a) the establishment of an electronic communication link between
WPM's pharmacy management information system and at least 25 Pilot Providers
("Core Providers") and (b) the processing of administrative transactions by the
Core Providers through the RX Software.
2.2 Functionality of WPM Message Specifications. To achieve the level of
functionality necessary for satisfying the Pilot Criteria, the WPM Message
Specifications, when properly input by the Pilot Provider, will provide the Pilot
Provider with data consisting of (a) patient medication history, (b) formulary
data and compliance recommendations, (c) drug to drug interactions (DUE), (d)
prior approval form selection and printing and (e) prescription form printing and
data storage.
2.3 Role of Universal Interface. Completion of the Universal Interface
is an objective of the Pilot Program but shall not be treated as a Pilot Criteria.
3. Pilot Period. The Pilot Program shall be conducted for a period (the
"Pilot Period") commencing on the date of this Agreement (the "Commencement Date")
and ending (the "Termination Date") upon the earlier of (a) the parties' mutual
determination that the Pilot Criteria have been satisfied or (b) 180 days after
the Commencement Date. The Pilot Period will be subject to extension in
accordance with the provisions of Section 7.
4. Pilot Responsibilities of WPM. During the Pilot Period, WPM shall use
commercially reasonable efforts to complete the following tasks during the time
frames specified below:
4.1 Equipment Requirements. On or before the Commencement Date, WPM will
return to Cymedix all computer equipment utilized by Cymedix at WPM's offices in
preparation for the Pilot Program and will obtain, at its own expense, a faster
Internet connection and the computer equipment specified on Schedule B (the "WPM
Equipment Requirements"). At the election of WPM, Cymedix will arrange for the
delivery of the items comprising the WPM Equipment Requirements at the unit costs
indicated on Schedule B. WPM will ensure that the items comprising the WPM
Equipment Requirements remain dedicated to the Pilot Program throughout the Pilot
Period.
4.2 Delivery of Data Tables. On or before the Commencement Date, WPM
will deliver to Cymedix all data tables required by the WPM Message
Specifications, to the extent then available without additional software
programming. WPM will complete the software programming required for delivery of
the remaining data tables within 30 days after the Commencement Date. At the
election of WPM, Cymedix will make its technical personnel available to assist in
completing those tasks at its standard per diem rates for those personnel,
together with reimbursement of their related expenses.
4.3 Appointment of Project Manager. On or before the Commencement Date,
WPM will appoint a qualified project manager from its professional staff (the
"WPM Manager") to coordinate WPM's participation in the Pilot Program throughout
the Pilot Period. Cymedix will make its personnel available to provide
sufficient training to enable the WPM Manager to demonstrate all functions of the
RX Software. Throughout the Pilot Period, the WPM Manager will be reasonably
available to assist Cymedix in answering any questions raised by the Pilot
Providers about the utilization of the RX Software. WPM acknowledges that the
availability and responsiveness of the WPM Manager throughout the Pilot Period
will be critical to the success of the Pilot Program.
4.4 Coordination with Pilot Providers. Upon identification of the Pilot
Providers, WPM will use commercially reasonable efforts to assist Cymedix in
making arrangements for (a) installation of the RX Software by Cymedix on site at
the offices of the Pilot Providers.
4.5 Participation in Presentations. Upon reasonable prior notice from
Cymedix, the WPM Manager or a member of the public relations staff of WPM
appointed by the WPM Manager will participate in field presentations organized by
Cymedix during the Pilot Period to familiarize Pilot Providers or other health
care industry participants with the benefits of the Cymedix Software.
5. Pilot Responsibilities of Cymedix. During the Pilot Period, Cymedix shall
use commercially reasonable efforts to complete the following tasks during the
time frames specified below:
5.1 Systems Analysis. Upon receipt from BCC and/or Health Plans of
information on physician practice groups under contract with Clients, Cymedix
will perform a technical analysis of the hardware, software and platforms
maintained by each prospective Pilot Provider. The results of that analysis will
be used by Cymedix in selecting Pilot Providers for inclusion in the Pilot
Program.
5.2 Software Installation. As soon as practicable after completion of
the analysis contemplated by Section 5.1, Cymedix will provide a list of the
Pilot Providers to WPM. In conjunction with the coordinating activities
contemplated by Section 4.4, Cymedix will install and test the RX Software on
site at the offices of the Pilot Providers.
5.3 Technical Assistance. Throughout the Pilot Period, Cymedix will make
its technical personnel reasonably available to address any questions raised by
the Pilot Providers about the utilization of the RX Software. Cymedix
acknowledges that the availability and responsiveness of its technical personnel
throughout the Pilot Period will be critical to the success of the Pilot Program.
5.4 Additional Cymedix Software Modules. At any tie during the Pilot
Period, if required by WPM or BCC and/or Health Plans, Cymedix will install and
test additional Cymedix Software Modules on site at the offices of the Pilot
Providers.
6. Marketing Undertakings.
6.1 Use of XX.xxx Trademark. During the Pilot Period and throughout the
continuation of any Production Programs, WPM shall have the right and license to
market and promote the RX Software under the private label "XX.xxx", provided
that the foregoing license shall not entitle WPM to any proprietary rights in the
technology or intellectual property underlying the RX Software or any other
Cymedix Software Modules.
6.2 Website Links. During the Pilot Period and throughout the
continuation of any Production Programs, (a) Cymedix shall have the right and
license to display the WPM logo, with written prior approval from WPM, on the
home page of Xxxxxxx.xxx, the website maintained by Cymedix, (b) Cymedix will
maintain, on the home page of its website, a brief description of the Pilot
Program (or any Production Programs then in effect) as well as the capability for
the hyperlink to the WPM website, (c) WPM shall have the right and license to
display the Cymedix logo on the home page of the website maintained by WPM and
(d) WPM may also maintain, on the home page of its website, a brief description
of the Pilot Program (or any Production Programs then in effect).
6.3 Client Newsletters. During the Pilot Period, applicable client
newsletters published by WPM will have space reserved for promotional material
about Cymedix, with client consent. The content will be provided by Cymedix,
subject to editorial modifications by WPM and clients, as appropriate.
6.4 Industry Conferences. During the Pilot Period and throughout the
continuation of any Production Programs, Cymedix will have the right to
participate as a co-exhibitor at industry conferences and other events where WPM
is an exhibitor, as determined by WPM.
7. Fees for the Pilot Program. During each month of the Pilot Period, WPM
will pay Cymedix a fee of $#, commencing on the Commencement Date, in
consideration for which Cymedix shall waive all transaction fees. In the event
that WPM fails to timely satisfy any of its undertakings under Section 4 and the
resulting delays impair the ability of Cymedix to demonstrate its satisfaction of
the Pilot Criteria by the Termination Date, the Pilot Period will be extended for
a period approximating the length of those delays (the "Extension Period"). In
that event, WPM will continue to pay Cymedix the foregoing monthly fees
throughout the Extension Period. However, if Cymedix fails to timely satisfy any
of its responsibility in Section 5 and delays occur, WPM will not be responsible
for any monthly fees during the Pilot Extension Period.
8. Representation and Warranty of Cymedix. Cymedix represents and warrants to
WPM that the RX Software and any other Cymedix Software Modules installed at the
request of WPM or BCCA for the Pilot Program and, if implemented, the Production
Programs, meet or exceed the requirements for encryption of authentications and
identifications as set forth in the HCFA Internet Security Policy issued on
November 24, 1998.
9. Indemnification. Each party (an "Indemnifying Party") shall indemnify and
hold harmless the other party and its officers, directors and other affiliates
(each, an "Indemnitee") from and against any and all judgments, penalties, fines
and amounts paid in settlement, including any interest assessments or other
charges payable in connection therewith, and all reasonable expenses, including
attorneys' fees, retainers and disbursements, court costs, experts' fees and
travel expenses incurred by the Indemnitee in connection with any threatened,
pending or completed action, claim, suit, investigation, hearing or other
proceeding, whether civil, criminal, administrative, arbitrative or
investigative, any appeal therein or any inquiry or investigation that could lead
thereto, to which the Indemnitee is, was or at any time becomes a party, arising
from the breach by the Indemnifying Party of its representation and warranty
under Section 8, in the case of Cymedix, or Section 9, in the Case of WPM.
10. Production Programs.
10.1 Implementation of Production Payment. Prior to or at the end of the
Pilot Period, if the Pilot Criteria are satisfied, WPM will provide reasonable
assistance to Cymedix in securing definitive agreements with Health Plans for the
implementation of Production Programs (the "Production Program Agreements")
10.2 Transaction Fees for Production Programs. During the continuation of
each Production Program, Cymedix will seek to implement with each Health Plan a
fee structure under which the sponsoring Health Plan or, at its election, each
healthcare service provider under contract with that Health Plan ("Production
Providers"), will undertake to pay monthly fees to Cymedix for the use of the
Cymedix Software in an amount equal to the greater of (a) $# for each Production
Provider location covered thereunder or (b) the total of all transactions by
those Production Providers at $# per transaction (collectively, the "Production
Fee Target").
11. Confidentiality.
11.1 Confidentiality Undertaking. The parties acknowledge that their
discussions and implementation of the Pilot Program may entail the exchange of
confidential information, including technical specifications for the Cymedix
Software and information about business methods, operations and prospects, costs,
markets, pricing policies, technical processes and applications and confidential
patient records ("Information"). Each party agrees that, subject to the
exceptions set forth below, for five years after the Commencement Date hereof, it
will (a) keep all Information confidential, (b) refrain from disclosing any
Information to any person or firm, other their respective employees and agents
having a need to know and (c) refrain from using any Information, directly or
indirectly, for its own benefit or the benefit of any affiliate.
11.2 Exceptions. For purposes of this undertaking, Information shall not
include information that (a) is in the public domain at the time of disclosure to
a party, (b) becomes part of the public domain after disclosure to a party
through no fault, act or failure to act, error or breach of this undertaking by
the recipient, (c) is known to the party at the time of disclosure, (d) is
discovered by the party independently, (e)is required by order, statute or
regulation of any government authority to be disclosed to any court or other
body, provided that the party shall notify the other party thereof to provide or
afford it the opportunity to obtain a protective order or other relief, or (f) is
obtained from a third party who has acquired a legal right to disclose the
specific information.
11.3 Remedies. In addition to any other remedies for breach of the
foregoing confidentiality undertakings, the parties will be entitled to equitable
relief in the event of any breach of threatened breach thereof. In the event of
litigation relating thereto, the prevailing party shall be entitled to recover
the reasonable legal fees incurred in connection therewith, including any appeal
therefrom.
12. Publicity. Neither party shall use the name of the other party in any
marketing, advertising or other public announcement about the subject matter of
this letter without the other party's written consent. A party desiring to make
a public disclosure shall submit a draft thereto for prior approval by the other
party, which will be deemed to have been given if comments thereon are not
provided within 72 hours.
13. Independent Contracts. Each party shall act as an independent contractor
hereunder, with sole responsibility for its own operations, personnel and
operating expenses, and nothing contained in this Agreement shall be construed to
create a partnership or joint venture between parties.
14. Assignability. This Agreement and a party's rights and obligations
hereunder may not be assigned for any reason without the written consent of the
other party.
15. Waive of Provisions. The waiver of compliance at any time with any of the
provisions, terms or conditions contained in this Agreement shall not be
considered a waiver of the provision, term or condition itself or of any of the
other provisions, terms or conditions hereof. Any waiver hereunder must be
express and in writing by the party agreeing to waive any right hereunder.
16. Integration. This Agreement contains the entire agreement of the parties
with respect to the subject matter hereof.
17. Amendment. This Agreement shall not be amended or modified except by a
written instrument signed by both parties.
18. Governing Law. This Agreement and the rights and obligations of the
parties shall be governed by and construed in accordance with the laws of the
State of California, excluding any conflict of laws rules of that State or other
principle that might refer the governance or construction of this Agreement to
the laws of another jurisdiction.
19. Binding Effect. The terms, conditions and provisions of this Agreement and
all obligations of the parties shall inure to the benefit of, and be binding
upon, the parties hereto and their respective successors and permitted assigns.
20. Notices. Any notice given under this Agreement shall be made in writing
and shall be deemed to have been duly given or made if delivered personally, or
mailed (postage prepaid by registered or certified mail), or sent by facsimile to
the parties at their respective addresses set forth below. Any notice so sent
shall be deemed to have been given or delivered at the time that it is either (i)
personally delivered or (ii) within two business days after the date deposited in
the United States mail or one business day after delivery to an overnight
courier, if sent by mail or courier, or (iii) when receipt is acknowledged, if
sent by facsimile, as the case may be. Any party may change its address by
giving notice in writing, stating its new address, to the other party.
If to WPM: with a copy to:
Wellpoint Pharmacy Management WellPoint Health Networks, Inc.
0000 Xx Xxxxxx Xxxxx 0 XxxxXxxxx Xxx
Xxxxxxxx Xxxx, XX 00000 Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Attention: General Counsel
General Manager
If to Cymedix: with a copy to:
Cymedix Corporation Medix Resources, Inc.
One Boardwalk - Suite 200 7100 E. Belleview Avenue -
Suite 301
Thousand Oaks, CA 91360 Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Attention: Xxxx X. Xxxxx,
Vice President President
21. Counterparts. This Agreement may be executed in any number of separate
counterparts that together shall constitute but one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
CYMEDIX LYNX CORPORATION
By:/s/ Xxxx X. Xxxxx
-----------------
Xxxx X. Xxxxx
President
By:/s/ Xxxxxxx X. Xxxxxx,
----------------------
Xxxxxxx X. Xxxxxx,
General Manager
Schedule A
INITIAL PILOT TASKS FOR WELLPOING PHARMACY MANAGEMENT
WellPoint Pharmacy Management ("WPM") will be responsible for completing the
following tasks as soon as practicable after acceptance of the accompanying
letter agreement. Capitalized terms used in this Schedule A and not otherwise
defined shall have the respective meanings ascribed to them in the letter of
intent.
1. WPM will provide a secured, non-dial up Internet access to the Cymedix host
PC located on site at WPM, within WellPoint security policy.
2. WPM will replace current pilot equipment from Cymedix with equivalent or
better equipment to serve as the WPM PC and Cymedix host PC dedicated
to the Pilot Program.
3. WPM and Cymedix will create a task plan (Project Plan) outlining the
remaining information systems issues to be resolved for the Pilot and
Production Programs, Both parties will work together to resolve those
issues to meet the time schedule and responsibilities outlined in the
Project Plan.
Schedule B
WPM EQUIPMENT REQUIREMENTS
Quantity Description Unit Cost Total Cost
---------- ----------------------------------------------- --------- ----------
Apollo Series PC, or equivalent, Mid-tower
case, P3 550 mhz, 125 megs ram, 8.4 gigs,
3c905b, Windows 98, PCI modem, with monitor
2 to be supplied by WPM $ 1,635 $ 3,270
Apollo Series PC, or equivalent, Mid-tower
case, P3 550 mhz, 125 megs ram, 8.4 gigs,
2x3c905b, Windows 98, PCI mode, with monitor
2 to be supplied by WPM 1,700 3,400
4 2 gig Jaz Drives with extra 3 pack of disks 654 2,616
4 Pc Anywhere Host Only Version 120 480
2 Cat 5 X-Over Cable 20 40
2 Watchdog PCI Card 200 400
2 Set up fee 150 300
---------- ----------
Total $ 10,506
==========
Dial-up modem Internet connection monthly fee
1 (for test system) 20
DSL Internet connection (minimum of 128KB
upstream and downstream) modem and
1 installation fees 700
1 Estimated monthly DSL service fee 99
