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THIS EXHIBIT CONTAINS CONFIDENTIAL INFORMATION WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED. THE CONFIDENTIAL INFORMATION ON PAGE 3 HAS BEEN REPLACED WITH
ASTERISKS.
Exhibit 10.20(a)
PROFESSIONAL DETAILING, INC.
AND
IPHYSICIAN NET INC.
RELATIONSHIP AGREEMENT
FEBRUARY __, 2000
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RELATIONSHIP AGREEMENT
This Relationship Agreement (the "Agreement") is made as of the __day
of February, 2000 by and between iPhysician Net Inc., a Delaware corporation
("IPNI") and Professional Detailing, Inc., a Delaware corporation ("PDI").
WHEREAS, PDI is a leading contract sales organization providing
customized product detailing programs and other marketing and promotional
services, including professional communications and educational services and
marketing research and consulting services, to the pharmaceutical industry; and
WHEREAS, IPNI provides internet and high-speed telecommunications
services to enhance the efficiency, quality and convenience of communications
between pharmaceutical companies and physicians; and
WHEREAS, PDI and IPNI desire to enter into a contract sales and
outsourcing strategic relationship to enhance the IPNI System and enable the
parties to offer a suite of outsourcing services to the pharmaceutical industry
which will include, but not be limited to: (i) the provision of contract video
detailing sales representatives and services; (ii) the provision and/or
management of video detailing call center facilities; (iii) the recruitment of
physicians for video based Peer Influence and Clinical Experience meetings,
clinical trials, continuing medical education and focus group meetings; (iv)
customized marketing research; and (v) medical education and symposia services;
and
WHEREAS, in connection with the strategic relationship PDI will become
IPNI's exclusive contract sales organization; and
WHEREAS, PDI desires to make certain equity investments in IPNI and
IPNI desires that PDI acquire certain of its securities.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements hereinafter set forth, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, each of the following defined terms
shall have the meaning ascribed to them in this Article for the purposes of this
Agreement.
1.1 "CSO" means a person, including individuals, partnerships, limited
liability companies, trusts and corporations, providing product
detailing programs to the pharmaceutical industry on an outsourced
basis.
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1.2 "Common Stock" means the common stock, $001 par value, of IPNI.
1.3 "IPNI" means iPhysician Net, Inc., a Delaware corporation.
1.4 "IPNI Channel" means one of the channels on the IPNI System providing
access and interactive voice and video capabilities to targeted
physicians.
1.5 "IPNI System" means IPNI's interactive audio and video communications
system connecting the pharmaceutical and health-care industries to
targeted physicians, as such system may be modified from time to time.
1.6 "PDI" means Professional Detailing, Inc., a Delaware corporation.
1.7 "ProtoCall" means ProtoCall, Inc., a New Jersey corporation and
wholly-owned subsidiary of PDI.
1.8 "Qualified IPO" means an initial public offering of IPNI common stock
that yields gross proceeds to IPNI of at least $40 million, which is
managed by Xxxxxx Bros. and Xxxxxxx Xxxxx & Company, or such other
underwriter as is reasonably approved by PDI.
1.9 "Series D Preferred Stock" means the Series D Preferred Stock of IPNI,
the terms of which are described in the Amended and Restated
Certificate of Incorporation annexed hereto as Exhibit A-6 (the
"Certificate of Incorporation").
1.10 "Series D-1 Preferred Stock" means the Series D-1 Preferred Stock of
IPNI, the terms of which are described in the Certificate of
Incorporation.
ARTICLE II
EQUITY INVESTMENTS
2.1 As soon as practicable after the execution of this Agreement,
subject to the terms and conditions of the Series D and D-1 Preferred Stock
Purchase Agreement annexed hereto as Exhibit A-1 (the "Series D Agreement"), PDI
agrees to purchase pursuant to the Series D Agreement at the First Closing (as
defined therein) and the Company agrees to sell and issue to PDI at the First
Closing 83,334 shares of Series D Preferred Stock for aggregate cash
consideration of $1.0 million. The conditions to the First Closing shall
include, inter alia, the execution and exchange of a Co-Sale Agreement,
Investors' Rights Agreement, Voting Agreement (which shall include the
designation of a representative of PDI as an observer to IPNI's Board of
Directors) and Relationship Agreement in substantially the form of Exhibits A-2
through A-5 annexed hereto, and the filing with the Secretary of State of the
State of Delaware of the Certificate of Incorporation designating the rights and
preferences of the Series D and D-1 Preferred Stock.
2.2 On the day of, but prior to, IPNI's filing of a Registration
Statement on Form S-1 with the Securities and Exchange Commission contemplating
a Qualified IPO, subject to the terms and conditions of the Series D Agreement,
PDI agrees to purchase at the Second Closing
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* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.
(as defined therein) and the Company agrees to sell and issue to PDI at the
Second Closing 107,143 shares of Series D-1 Preferred Stock for aggregate cash
consideration of $1.5 million.
ARTICLE III
EXCLUSIVE RELATIONSHIP
3.1 IPNI hereby constitutes and appoints PDI as the exclusive CSO in
the United States to be affiliated in any respect, directly or indirectly, with
the IPNI System. In furtherance of this exclusivity, PDI shall be the sole
provider to the pharmaceutical industry on an outsourced basis of contract video
detailing sales representatives and services using the IPNI System and video
detailing call center facilities and related management services. PDI also shall
be a non-exclusive provider of (i) recruitment services of physicians for
video-based peer influence and clinical experience meetings, clinical trials,
continuing medical education and focus group meetings; (ii) customized marketing
research; and (iii) medical education and peer-to-peer promotion or symposia.
PDI and Protocol will provide all physician recruitment services as an
independent contractor to IPNI on a fee-for-service basis; provided, however,
that such fees will be on a "most favored client" basis. PDI and IPNI covenant
and agree to jointly and diligently develop a joint business plan, to be
completed on or before August 31, 2000, regarding the services referred to
herein, all in furtherance of the development and commercialization of the IPNI
System. In this respect the parties shall immediately constitute and appoint the
PDI/IPNI Joint Marketing Committee (the "Committee"), comprised of three PDI
representatives and three IPNI Representatives. The Committee shall meet at
least once per calendar quarter until a two-thirds majority of the Committee
members determine otherwise.
3.2 Simultaneous with the execution hereof, PDI and IPNI shall enter
into a License Roll-Out Agreement, in substantially the form of Exhibit C
annexed hereto, granting PDI the exclusive rights to an IPNI Channel to provide
CSO services. The initial term of the license shall be for a three year period,
with a PDI option to renew for an additional three year period, provided that
PDI is not in breach of the license agreement. The license fee for the initial
three year term shall be **** percent **** of any revenue received by PDI on
account of services rendered utilizing the IPNI Channel. Thereafter, and for any
extension of the initial term, the license fee shall be on a "most favored
client" basis. The provisions of Section 3.1 of this Agreement will remain in
effect only as long as the license agreement also remains in effect.
3.3 Simultaneous with the closing of the $1.5 million equity investment
by PDI in IPNI contemplated by Section 2.2 of this Agreement, IPNI shall enter
into an agreement with Protocol providing for Protocol's provision of physician
recruitment services for the IPNI System through a part-time sales force
comprised of 50 to 100 representatives for a term of no less than six months.
Protocol shall be paid $1.0 million for such services over the term of the
agreement based upon "most favored client" rates.
3.4 IPNI shall not, directly or indirectly, contravene or circumvent
PDI's exclusive relationship with IPNI as the exclusive CSO affiliated with the
IPNI System.
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3.5 IPNI shall provide to PDI in a timely manner any reports or other
information reasonably requested by PDI with respect to the development and
operation of the IPNI System, and will, on a monthly basis, provide PDI with the
same basic activity reports that it provides to pharmaceutical companies.
ARTICLE IV
PUBLICITY; CONFIDENTIALITY
4.1 PDI and IPNI shall jointly promote the relationship established by
this Agreement. In furtherance thereof, PDI shall, as it deems commercially
reasonable, include reference to its relationship with IPNI in its promotional
materials, capability presentations and proposals. IPNI shall provide in its
promotional materials, to the extent it deems commercially reasonable, that PDI
is its exclusive CSO affiliated with the IPNI System.
4.2 The parties agree that in the course of entering into and
performing pursuant to this Agreement, they have and will be provided with and
have access to information that is designated by the disclosor as confidential
and/or proprietary. With respect to such information, the recipient covenants
and agrees that, without prior written consent of the disclosor, or except as
may be required by law, the recipient shall neither disclose to any third party
such information nor permit any third party to have access to such information
nor use such information for any purpose other than in furtherance of this
Agreement. The foregoing obligation shall not apply to any information which the
recipient can demonstrate falls within any of the following categories:
(i) information which has come within the public domain through no
fault or action of the recipient;
(ii) information which is in the possession of the recipient
prior to the time of disclosure by the disclosor or which is independently
discovered, after the date hereof, by the recipient without the aid, application
or use of the information;
(iii) information which is obtained after the date hereof by
the recipient from any third party which is lawfully in possession of such
information and not in violation of any contractual or legal obligation to the
disclosor with respect to such information; or
(iv) information that is required by law to be disclosed,
provided, however, that in such case the party who may be obligated to so
disclose such otherwise confidential information of the other party shall give
such other party notice of such required disclosure as soon as reasonably
practicable so that such party may have an opportunity to contest such
disclosure or obtain protective orders regarding such disclosure.
4.4 Either party may include reference to this Agreement and the
relationship created hereby in any filing effected by it with the United States
Securities and Exchange Commission or in a press release, in each instance
subject to the prior written approval of the other party, which approval shall
no be unreasonably withheld or delayed.
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ARTICLE V
REPRESENTATIONS
5.1 IPNI represents to PDI that, except as might be provided for in the
Schedule of Exceptions contained in the Series D and D-1 Preferred Stock
Purchase Agreement:
(i) IPNI is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. IPNI is duly qualified
to conduct its business and is in corporate and tax good standing under the laws
of each jurisdiction in which the nature of its business or the ownership or
leasing of its properties require such qualification, except where the failure
to so qualify would not have a material adverse effect on IPNI;
(ii) IPNI has all requisite corporate power and authority to
carry on the businesses in which it is engaged and to own and use the properties
owned and used by it;
(iii) IPNI has all requisite power and authority to execute
and deliver this Agreement and the agreements contemplated hereby (collectively,
the "Fundamental Agreements"). The execution and delivery of the Fundamental
Agreements and the performance by IPNI of the Fundamental Agreements and the
consummation by IPNI of the transactions contemplated thereby have been duly and
validly authorized by all necessary corporate action on the part of IPNI. Each
Fundamental Agreement has been, or when delivered will be, duly and validly
executed and delivered by IPNI, and, assuming the due authorization, execution
and delivery by PDI, will constitute a valid and binding obligation of IPNI,
enforceable against it in accordance with its terms, subject to the effect of
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and except as the availability of
equitable remedies may be limited by general principles of equity; neither the
execution and delivery by IPNI of the Fundamental Agreements, nor the
consummation by IPNI of the transaction contemplated thereby will (a) conflict
with or violate any provision of the Articles of Incorporation (as amended) of
IPNI, (b) require on the part of IPNI any filing with or any permit,
authorization, consent or approval of, any court, arbitrational tribunal,
administrative agency or commission or other government or regulatory authority
or agency, (c) conflict with, result in a breach of, constitute (with or without
due notice or lapse of time or both) a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under any contract, lease, sublease,
license, sub-license, franchise, permit, indenture, agreement or mortgage,
instrument of indebtedness, security interest or other arrangement to which the
IPNI is a party or by which IPNI is bound.
5.2 PDI represents to IPNI as follows:
(i) PDI is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. PDI is duly qualified
to conduct its business and is in corporate and tax good standing under the laws
of each jurisdiction in which the nature of its business or the ownership or
leasing of its properties require such qualification, except where the failure
to so qualify would not have a material adverse effect on PDI;
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(ii) PDI has all requisite corporate power and authority to
carry on the businesses in which it is engaged and to own and use the properties
owned and used by it;
(iii) PDI has all requisite power and authority to execute and
deliver the Fundamental Agreements. The execution and delivery of the
Fundamental Agreements and the performance by PDI of the Fundamental Agreements
and the consummation by PDI of the transactions contemplated thereby have been
duly and validly authorized by all necessary corporate action on the part of
PDI. Each Fundamental Agreement has been, or when delivered will be, duly and
validly executed and delivered by PDI, and, assuming the due authorization,
execution and delivery by IPNI, will constitute a valid and binding obligation
of PDI, enforceable against it in accordance with its terms, subject to the
effect of bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and except as the availability of
equitable remedies may be limited by general principles of equity; neither the
execution and delivery by PDI of the Fundamental Agreements, nor the
consummation by PDI of the transaction contemplated thereby will (a) conflict
with or violate any provision of the Articles of Incorporation (as amended) of
PDI, (b) require on the part of PDI any filing with or any permit,
authorization, consent or approval of, any court, arbitrational tribunal,
administrative agency or commission or other government or regulatory authority
or agency, (c) conflict with, result in a breach of, constitute (with or without
due notice or lapse of time or both) a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under any contract, lease, sublease,
license, sub-license, franchise, permit, indenture, agreement or mortgage,
instrument of indebtedness, security interest or other arrangement to which the
PDI is a party or by which PDI is bound.
ARTICLE VI
DISCLAIMER OF WARRANTIES,
LIMITATION OF LIABILITY AND INDEMNIFICATION
6.1 IPNI and PDI each disclaims all warranties, express or implied,
including, but not limited to, the implied warranty of merchantability and
fitness for a particular purpose with respect to the services to be provided by
it pursuant to this Agreement. Neither party makes any representations or
warranties as to the quality, suitability or merchantability of its services
under this Agreement for any purpose or use.
6.2 PDI shall have no liability to IPNI, except as specifically
provided for in the License Roll-Out Agreement, with respect to its furnishing
any of the services hereunder except for liabilities arising out of the willful
malfeasance, bad faith or gross negligence of PDI or any affiliate of PDI. In
addition to its indemnification obligations under the License Roll-Out
Agreement, PDI will indemnify, defend and hold harmless IPNI and its officers,
directors, employees and agents in respect of all Liabilities (as hereinafter
defined) relating to, arising from, asserted against or associated with such
willful malfeasance, bad faith or gross. In no event shall PDI or any PDI
affiliate have any liability for any incidental, indirect, special or
consequential damages, whether or not caused or resulting from negligence or
breach of obligations hereunder and whether or not informed of the possibility
of the existence of such damages. For the
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purposes of this Agreement, the terms Liabilities means any and all losses,
claims, charges, debts, demands, actions, causes of action, suits, damages,
costs and expenses, and similar obligations, including those arising under any
law, rule, regulation, action, suit, proceeding (including reasonable attorneys'
fees) and any and all costs and expenses relating thereto.
6.3 IPNI shall have no liability to PDI, except as specifically
provided for in the License Roll-Out Agreement, with respect to its furnishing
any of the services hereunder except for liabilities arising out of the willful
malfeasance, bad faith or gross negligence of IPNI or any affiliate of IPNI. In
addition to its indemnification obligations under the License Roll-Out
Agreement, IPNI shall indemnify and hold harmless PDI and its officers,
directors, employees and agents in respect of all Liabilities related to,
arising from, asserted against or associated with such willful malfeasance, bad
faith or gross negligence or any breach by IPNI of a representation contained in
this Agreement. In no event shall IPNI or any IPNI affiliate have any liability
for any incidental, indirect, special or consequential damages, whether or not
caused or resulting from negligence or breach of obligations hereunder and
whether or not informed of the possibility of the existence of such damages.
PDI shall indemnify and hold harmless IPNI and its officers, directors,
employees and agents in respect of all Liabilities relating to a breach by PDI
of a representation contained in this Agreement.
ARTICLE VII
MISCELLANEOUS
7.1 SURVIVAL OF WARRANTIES. The warranties, representations and
covenants of PDI and IPNI contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and until the expiration of
any applicable statute of limitations.
7.2 TRANSFER; SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
7.3 GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law.
7.4 COUNTERPARTS. This Agreement may be executed by facsimile and in
two or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one instrument.
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7.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.6 NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by telegram or fax, or forty-eight
(48) hours after being deposited in the U.S. mail, as certified or registered
mail, with postage prepaid, addressed to the party to be notified at such
party's address as set forth on the signature page, or as subsequently modified
by written notice, and (a) if to IPNI, with a copy to Xxxxx Xxxxxxxx, Esq.,
Xxxxx & Xxxxxx L.L.P., Xxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000-0000 (Fax #
(000) 000-0000) or (b) if to PDI, with a copy to Xxxxxxx X. Xxxx, Esq., Morse,
Zelnick, Rose & Lander, LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Fax #
(000) 000-0000).
7.7 FINDER'S FEE. Each party represents that it neither is nor will be
obligated for any finder's fee or commission in connection with this
transaction. Each party agrees to indemnify and to hold harmless the other party
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which such party or any of its officers, employees, or
representatives is responsible.
7.8 ATTORNEY'S FEES. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
7.9 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
or waived only with the written consent of both parties.
7.10 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
7.11 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either
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under this Agreement or by law or otherwise afforded to any party, shall be
cumulative and not alternative.
7.12 ENTIRE AGREEMENT. This Agreement, and the documents referred to
herein constitute the entire agreement between the parties hereto pertaining to
the subject matter hereof, and any and all other written or oral agreements
relating to the subject matter hereof existing between the parties hereto are
expressly canceled.
The parties have executed this Agreement as of the date first written
above.
IPHYSICIAN NET INC.
By: _________________________________
Xxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
Address: 0000 Xxxxx Xxxxxx Xxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000
Fax #: 000-000-0000
PROFESSIONAL DETAILING, INC.
By: _________________________________
Xxxxxxx X. Xxxxxxxxx,
Chief Executive Officer
Address: 00 Xxxxxxxxxxxx Xxxx
Xxxxx Xxxxxx Xxxxx, XX 00000
Fax #: (000) 000-0000
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