\n Section 13.3 Bankruptcy and Related Events…………………………………………30
\n Section 13.4 Obligations Upon Termination or Expiration……………………………..30
\n Section 13.5 Transfer of Site…………………………………………………….30
\n Section 13.6 Survival……………………………………………………………31<\/p>\nARTICLE 14. GUARANTY OF SOFTWATCH, LTD……………………………………………………31
\n Section 14.1 Guaranty……………………………………………………………31
\n Section 14.2 Obligations Unconditional…………………………………………….31
\n Section 14.3 Successors and Assigns; Applicable Law…………………………………31<\/p>\n
ARTICLE 15. GENERAL PROVISIONS…………………………………………………………..32
\n Section 15.1 No Joint Venture Created……………………………………………..32
\n Section 15.2 Entire Agreement…………………………………………………….32
\n Section 15.3 Assignment………………………………………………………….32
\n Section 15.4 Waiver……………………………………………………………..32
\n Section 15.5 Notices…………………………………………………………….32
\n Section 15.6 Force Majeure……………………………………………………….33
\n Section 15.7 Publicity…………………………………………………………..33
\n Section 15.8 Governing Law……………………………………………………….34
\n Section 15.9 Including…………………………………………………………..34
\n Section 15.10 Schedules and Exhibits……………………………………………….34
\n Section 15.11 Captions……………………………………………………………34
\n Section 15.12 Counterparts………………………………………………………..34
\n Section 15.13 SoftWatch, Ltd as Party………………………………………………34
\n Section 15.14 Right of Offset……………………………………………………..34<\/p>\n
Exhibit 1.1 LICENSED SOFTWARE……………………………………………………………36
\nExhibit 1.2 SPECIFICATIONS………………………………………………………………39
\nExhibit 1.3 THE CO-BRANDED DIET CENTER SPECIFICATIONS………………………………………42
\nExhibit 9.3 MEDSCAPE COMPETITIVE BUSINESSES……………………………………………….44<\/p>\n
INDEX OF DEFINED TERMS……………………………………………………………………….46<\/p>\n
<\/c><\/s><\/caption>\n<\/table>\n
iv<\/p>\n
6
\n LICENSE AND WEB SITE DEVELOPMENT AGREEMENT<\/p>\n
This LICENSE AND WEB SITE DEVELOPMENT AGREEMENT (this “Agreement”) is
\nmade as of June 15, 1999 (the “Effective Date”), between MEDSCAPE, INC., a
\nDelaware corporation, with offices at 134 W. 29th Street, New York, New York
\n10001-5399 (“Medscape”), SOFTWATCH INC., a Delaware corporation, with offices at
\n67 South Bedford St., Burlington, MA 01803 (“SoftWatch” and together with
\nMedscape, collectively, the “Parties,” and each a “Party”), and solely with
\nrespect to the provisions of Article 9 (Non-Compete, Confidentiality), Section
\n10.2 (Representations and Warranties), and Article 14 (Guaranty), SOFTWATCH,
\nLTD., a corporation organized under the laws of Israel, with offices at 1 Ta’as
\nStreet, Ramat-Gan 52512, Israel, and the direct parent of wholly-owned
\nsubsidiary SoftWatch (“SoftWatch, Ltd.”). Unless otherwise specified herein,
\ncapitalized terms used in this Agreement have the meanings defined in this
\nAgreement and the Schedules and Exhibits hereto.<\/p>\n
ARTICLE 1. LICENSE OF SOFTWARE, CUSTOMIZATIONS; DIETWATCH WEBSITE<\/p>\n
Section 1.1 (a) SoftWatch Software License Grant. Subject to
\nSection 9.3 and the other terms and conditions of this Agreement, SoftWatch
\ngrants to Medscape and its Affiliates during the Term a non-exclusive, worldwide
\nlicense (the “SoftWatch Software License”):<\/p>\n
(i) to use, execute and display on the Medscape Consumer Site and the
\n Co-Branded Diet Center SoftWatch’s end-user interactive healthcare
\n tools identified on Exhibit 1.1 (the “End-User Tools”); and<\/p>\n
(ii) to use, execute and display for and in connection with the development,
\n construction, enhancement and continuing operation and maintenance of,
\n the Medscape.com website, the Medscape Consumer Site and the Co-Branded
\n Diet Center SoftWatch’s content creation, data management, display and
\n other tools identified on Exhibit 1.1 (the “Creation Tools,” and
\n together with the End-User Tools, collectively the”SoftWatch
\n Software”), in each case at any location or locations around the world.<\/p>\n
In addition:<\/p>\n
(x) SoftWatch agrees that the foregoing grant of license with respect to
\n the End-User Tools includes the right of all end-users of the Medscape
\n Consumer Site and the Co-Branded Diet Center, wherever such end-users
\n are located, to use, execute and display the End-User Tools within and
\n in connection with services and functionalities made available in the
\n Medscape Consumer Site and the Co-Branded<\/p>\n
7
\n Diet Center; and the foregoing grant of license with respect to the
\n End-User Tools includes the right of any and all of Medscape’s
\n employees, contractors and agents (including any operator or host of
\n the Medscape Consumer Site and\/or the Co- Branded Diet Center),
\n wherever such employees, contractors and agents are located, to use,
\n display and execute the End-User Tools in connection with the
\n development, construction, operations, maintenance, and hosting of the
\n Medscape Consumer Site and\/or the Co-Branded Diet Center; and<\/p>\n
(x) the foregoing grant of license with respect to the Creation Tools
\n includes the right of any and all of Medscape’s employees, contractors
\n and agents (including any operator or host of the Medscape.com website,
\n the Medscape Consumer Site and\/or the Co-Branded Diet Center), wherever
\n such employees, contractors and agents are located, to use, display and
\n execute the Creation Tools in connection with the development,
\n construction, operations, maintenance, and hosting of the Medscape.com
\n website, the Medscape Consumer Site and\/or the Co-Branded Diet Center.<\/p>\n
(b) Medscape Consumer Site Defined. As used in this Agreement
\nthe “Medscape Consumer Site” means: (i) Medscape’s principal publicly available
\nwebsite on the Internet containing medical and healthcare information which
\nMedscape makes available to consumers or other members of the general public,
\nand (ii) all other eHealth service sites or other commercial on-line service
\nsites (whether or not mainly providing healthcare news, information and\/or
\nrelated tools or features) on or available through the Internet (including such
\nas may be made available to private entities and individuals in connection with
\na customized “intranet” service) which contain Medscape’s proprietary marks and
\ncontain substantially all the content and functionality as Medscape’s principal
\npublicly available website on the Internet referred to above.<\/p>\n
(c) Internet Defined. For purposes of this Agreement,
\n“Internet” means the public collection of computer networks referred to
\ngenerally as the “internet” as in existence on the date hereof and any evolution
\nthereof or successor network thereto, and includes privately available computer
\nnetworks connected to the Internet (e.g. so-called “intranets”) or which use (x)
\nInternet standards and\/or (y) other use standards which are compatible with, or
\nessentially similar in functionality to, such networks (including websites, HTML
\nor other similar delivery systems). The term “Internet” shall also mean and
\ninclude any and all other commercial on-line services, whether or not based on
\nInternet compatible use standards such as HTML.<\/p>\n
(d) SoftWatch Software Further Defined. The term “SoftWatch
\nSoftware” shall be deemed to mean and include all enhancements, modifications,
\ncustomizations and corrections to the SoftWatch Software made by or on behalf of
\nSoftWatch during the Term, including as part of the Customization Services
\nreferred to in Section 1.2 or the Maintenance Services referred to in Section
\n5.1. The term “SoftWatch Software” shall<\/p>\n
2<\/p>\n
8
\nexpressly exclude new modules or other developments which add to, or
\nsubstantially increase the functionality of, the SoftWatch Software which
\nSoftWatch generally makes available to third parties for an additional license
\nfee, unless Medscape has agreed to license the same and pay to SoftWatch any
\nsuch additional license fee.<\/p>\n
(e) Licence For Use in Connection with Multiple Sclerosis. It
\nis expressly understood and agreed by the parties that the SoftWatch Software
\nLicense is intended by the Parties to include Medscape’s right to use, on all
\nthe terms and conditions set forth in this Section 1.1, the SoftWatch Software
\nin connection with a specific disease channel on the Medscape Consumer Site
\ndedicated to the medical condition Multiple Sclerosis. If by September 30, 1999
\nSoftWatch: (i) is unable to secure the necessary rights to permit Medscape to
\nuse the SoftWatch Software in relation to a specific disease channel for
\nMultiple Sclerosis on all the terms and conditions set forth in this Section
\n1.1, or (ii) otherwise to secure, at SoftWatch’s expense, the license to
\nMedscape of a functional equivalent of the SoftWatch Software satisfactory to
\nMedscape (in its sole discretion) which can be used in a specific disease
\nchannel on the Medscape Consumer Site for Multiple Sclerosis on all the terms
\nand conditions set forth in this Section 1.1, then SoftWatch shall pay to
\nMedscape (x) on September 30,1999 an amount equal to $125,000, and (y) on
\nSeptember 30, 2000 an amount equal to $100,000, provided, however, that if at
\nany date after September 30, 1999, but prior to September 30, 2000, SoftWatch is
\nable to secure the rights contemplated in clause (i) or (ii) above, and Medscape
\nelects (in its sole discretion) to accept a license of such rights, then
\nSoftWatch shall have no obligation to make the payment of $100,000 referred to
\nin the foregoing clause (y).<\/p>\n
(f) Copying. Medscape may not copy the SoftWatch Software
\nexcept as necessary for maintenance, backup, test and disaster recovery
\npurposes, or as otherwise authorized or permitted by SoftWatch. Notwithstanding
\nthe foregoing, Medscape may, without the consent of SoftWatch, make non-revenue
\ngenerating demonstration copies of the SoftWatch Software for use in connection
\nwith Medscape’s general marketing and promotion activities. This Agreement does
\nnot provide Medscape with title or ownership of the SoftWatch Software, but only
\na right of limited use. Subject to Article 7 and the terms of the SoftWatch
\nSoftware License granted under this Agreement, SoftWatch retains sole and
\nexclusive ownership of, and all right, title and interest in and to the
\nSoftWatch Software and all copies thereof.<\/p>\n
Section 1.2 Customization Services. SoftWatch agrees to
\nperform customization services (the “Customization Services”) in respect of the
\nSoftWatch Software in accordance with the specifications, and subject to the
\ndelivery terms attached hereto as Exhibit 1.2 (the “Customization
\nSpecifications”). As used in this Agreement, “Customize,” “Customized” and
\nrelated words means the modeling of the existing SoftWatch Software for a
\nspecific use, purpose or application as provided in the relevant Customization
\nSpecifications, and the term “Customization” means any such SoftWatch<\/p>\n
3<\/p>\n
9
\nSoftware as so modeled. The Certification Testing procedures specified in
\nArticle 4 shall be applicable to any Customization to be delivered pursuant to
\nthis Agreement.<\/p>\n
Section 1.3 DietWatch Site License. Subject to the terms of
\nthis Agreement, SoftWatch grants to Medscape a worldwide license during the Term
\nto create, operate and maintain using the SoftWatch Software, and\/or otherwise
\nto incorporate and display within and in connection with the Medscape Consumer
\nSite, a version of SoftWatch’s proprietary Internet web-site service known as
\n“DietWatch.com,” as modified in accordance with the specifications (the
\n“Co-Branded Diet Center Specifications”) set forth on Exhibit 1.3 attached
\nhereto (the “Co-Branded Diet Center”). Except as otherwise provided in this
\nAgreement, the term “Co-Branded Diet Center” shall be deemed to mean and include
\nall enhancements, modifications, customizations and corrections to the Co-
\nBranded Diet Center. The foregoing license shall be subject to the following
\nadditional terms, and such other terms as may be agreed by the Parties in the
\nCo-Branded Diet Center Specifications:<\/p>\n
(a) Exclusive Diet Center. Medscape agrees that the Co-Branded Diet Center
\n will be the exclusive weight management and dieting center for the
\n Medscape Consumer Site, provided, however that the foregoing shall not
\n limit or otherwise restrict Medscape from integrating third-party tools
\n or other software components not proprietary to SoftWatch in the
\n Co-Branded Diet Center;<\/p>\n
(b) General Health and Wellness Center; Hyperlink. The Co-Branded Diet
\n Center will be maintained separate and apart from, and will contain
\n content distinct from that of, any “general health and wellness”
\n service or channel maintained on the Medscape Consumer Site (the
\n “General Health and Wellness Center”), provided, however, that the
\n General Health and Wellness Center may contain End-User Tools similar
\n to those contained in the Co-Branded Diet Center (e.g. a diary tool).
\n In addition, Medscape agrees that: (i) any such General Health and
\n Wellness Center shall be designed and maintained in such a manner as to
\n permit users thereof to directly link to the Co-Branded Diet Center if
\n they wish to access content and features specifically relating to
\n dieting and weight management or control, and (ii) the General Health
\n and Wellness Center will not be exclusively or primarily related to
\n dieting and\/or nutrition.<\/p>\n
(c) Branding. The Co-Branded Diet Center will be branded as the “Medscape
\n Diet Center powered by DietWatch.com” (or such other name and SoftWatch
\n product reference as may be mutually agreed by the Parties). The
\n DietWatch.com logo will be displayed at not less than 50% of the scale
\n of, and with substantially similar graphics, visibility and other
\n characteristics as, the “Medscape Diet Center” logo (or other Medscape
\n proprietary mark) in order to properly convey the co-branding of the
\n Co-Branded Diet Center.<\/p>\n
4<\/p>\n
10
\n(d) Member Information; All customer information (the “Member Information”)
\n relating to registered members of the Medscape Consumer Site
\n (“Members”) using the Medscape Consumer Site and\/or the Co-Branded Diet
\n Center during the Term (including personal dietary diary information
\n collected from such Members) shall be owned exclusively by Medscape,
\n provided, however, that at least thirty (30) days prior to termination
\n or other expiration of this Agreement (or if termination is by Medscape
\n for any cause in respect of which Medscape has an immediate right of
\n termination, then upon notice of termination), Medscape will coordinate
\n with SoftWatch to provide a mutually agreeable e-mail notice to all
\n registered Co-Branded Diet Center users:<\/p>\n
(i) announcing the termination of the relationship contemplated
\n hereby and alerting them to the existence of the independent
\n “DietWatch.com” website; and<\/p>\n
(ii) advising such users that they may, by written or electronic
\n notice to Medscape, authorize and direct Medscape to promptly
\n release and transfer a copy of such of their personnel Member
\n Information as is maintained as part of the Co-Branded Diet
\n Center to SoftWatch for use in the independent “DietWatch.com”
\n website.<\/p>\n
If a Member requests the release and transfer of his or her Member
\n Information as contemplated in clause (ii), Medscape will, subject to
\n any privacy laws then in effect, exercise reasonable commercial efforts
\n to promptly as technically practicable transfer a copy of the relevant
\n Member Information to SoftWatch so that SoftWatch may provide
\n continuous service to such Member on the DietWatch.com website.
\n Medscape further agrees to provide SoftWatch with a non-exclusive,
\n perpetual, royalty free license to use such Member Information solely
\n for the purpose of continuing to provide service to such Member on the
\n DietWatch.com website. Notwithstanding the foregoing: (x) SoftWatch
\n will have no right to obtain or use any of Medscape’s proprietary
\n clinical content, and (y) Medscape shall have no responsibility for the
\n accuracy or completeness of any data released and transferred to
\n SoftWatch and makes no representation or warranty that such information
\n will be incorrupt or error free. It is further understood and agreed
\n that, after any termination or expiration of this Agreement,
\n information provided directly to SoftWatch by users who directly log-in
\n to, or otherwise access, the DietWatch.com website service shall be the
\n property of SoftWatch, and that nothing herein shall restrict or
\n prohibit SoftWatch from compiling and using customer information
\n gathered through its own efforts or those of its agents, except to the
\n extent constituting Medscape Confidential Information derived directly
\n or indirectly in the course of the services being performed by
\n SoftWatch’s under this Agreement.<\/p>\n
5<\/p>\n
11
\n(e) Medscape Content; Editorial and Artistic Control; Look and Feel of
\n Tools. Medscape will have the right to integrate Medscape Content into
\n the Co-Branded Diet Center. Medscape will have exclusive editorial and
\n artistic control over the Co- Branded Diet Center and all elements
\n thereof, including (i) the selection of the Medscape Content, (ii) the
\n selection, from among those set out in Schedule 1.3 or otherwise
\n included in the grants of license made by SoftWatch’s under this
\n Agreement, of the functionalities and features from DietWatch.com that
\n Medscape wishes to include in the Co-Branded Diet Center, and (iii) the
\n determination of the design and look and feel of all visual elements
\n (including the End-User Tools), appearing in the Co-Branded Diet
\n Center. Medscape acknowledges that the exercise of its rights to
\n editorial and artistic control may materially alter the Specifications
\n as then in effect, and that the same may result in an extension of, or
\n other change to the relevant Delivery and Milestone Schedule and\/or
\n additional expense to Medscape. SoftWatch will promptly notify Medscape
\n if any change requested by Medscape will result in any such extension
\n of, or other change and\/or additional expense, and will not undertake
\n the same without Medscape’s prior authorization.<\/p>\n
(f) Limited Use License As to Medscape Content. If applicable, and subject
\n to Article 7 and the other terms and conditions of this Agreement,
\n Medscape grants SoftWatch a non-exclusive, non-transferable license
\n during the Term to reproduce, display and perform Medscape Content and
\n other Medscape Materials within and in connection with the
\n construction, development, operations and maintenance of the Co-Branded
\n Diet Center and for such other purposes as Medscape may authorize or
\n request in writing. SoftWatch will comply with such restrictions and
\n requirements regarding the use of such Medscape Content as may be
\n specified in the Co-Branded Diet Center Specifications, or as may be
\n otherwise notified by Medscape to SoftWatch from time to time.<\/p>\n
ARTICLE 2. MEDSCAPE CONSUMER SITE DEVELOPMENT SERVICES<\/p>\n
Section 2.1 Development Services. In consultation with
\nMedscape, SoftWatch will develop and build for Medscape the Medscape Consumer
\nSite in accordance with the Site Specifications and the Co-Branded Diet Center
\nSpecifications. As used herein, “Site Specifications” means the site
\nspecifications for the Medscape Consumer Site attached hereto as Exhibit 1.2,
\nand “Specifications” means, collectively, the Site Specifications, the
\nCustomization Specifications, the Co-Branded Diet Center Specifications and any
\nother specifications agreed by the parties pursuant to this Agreement.<\/p>\n
The foregoing development services (the “Development Services”) shall be subject
\nto Medscape’s testing and acceptance as provided in Article 4 and shall include
\nthe following:<\/p>\n
6<\/p>\n
12
\n(a) the coordination with Medscape’s technical personnel and vendors to
\n develop:<\/p>\n
(i) the input system to accept, organize and store the Medscape
\n Content; and<\/p>\n
(ii) the tools and user interface components to surface and display
\n the Medscape Content on the Medscape Consumer Site; and<\/p>\n
(b) implementing the overall Site Design in consultation with Medscape and
\n any third party design vendor retained by Medscape;<\/p>\n
(c) integrating any third-party components (including chat software and
\n existing professional content and\/or other applications) specified in
\n the Specifications (“Third Party Components”), which Medscape will be
\n responsible for providing to SoftWatch at Medscape’s expense; and<\/p>\n
(d) the development by SoftWatch of certain other functionalities as
\n provided in the Specifications.<\/p>\n
ARTICLE 3. ADDITIONAL MEDSCAPE CONSUMER SITE DEVELOPMENT SERVICES
\n AND CO-BRANDED DIET CENTER CRITERIA.<\/p>\n
Section 3.1 Content and Uploading of Content. Medscape will
\nprovide to SoftWatch Medscape’s proprietary data and content that Medscape
\ndetermines will be part of the Medscape Consumer Site and\/or the Co-Branded Diet
\nCenter, including text and visual material regarding itself, Medscape products,
\nservices, pricing, Medscape Trademarks, and conditions for the Medscape Consumer
\nSite and the Co-Branded Diet Center (including proprietary notices) (“Medscape
\nContent”). In accordance with the Specifications, SoftWatch will provide
\nMedscape with web-based interfaces to enable Medscape to upload Medscape Content
\nto the Medscape Consumer Site and the Co- Branded Diet Center, and Medscape will
\nmaintain the on-going responsibility for uploading content to, and managing the
\ncontent on, the Medscape Consumer Site and the Co- Branded Diet Center.<\/p>\n
Section 3.2 Editorial and Artistic Control. Medscape will have
\nexclusive editorial and artistic control over the Medscape Consumer Site and all
\nelements thereof, including the selection of the Medscape Content and Third
\nParty Components, and the design and look and feel of all visual elements
\n(including the End-User Tools), appearing in the Medscape Consumer Site.
\nMedscape acknowledges that the exercise of its rights to editorial and artistic
\ncontrol may materially alter the Specifications as then in effect, and that the
\nsame may result in an extension of, or other change to the relevant Delivery and
\nMilestone Schedule and\/or additional expense to Medscape. SoftWatch will
\npromptly notify Medscape if any change requested by Medscape will result in any
\nsuch extension of, or<\/p>\n
7<\/p>\n
13
\nother change and\/or additional expense, and will not undertake the same without
\nMedscape’s prior authorization.<\/p>\n
ARTICLE 4. DELIVERY, TESTING AND ACCEPTANCE; RESPONSIBILITIES OF THE
\n PARTIES.<\/p>\n
Section 4.1 Commencement of Services. The services to be
\nperformed under this Agreement shall commence no later than the execution hereof
\nand shall proceed in accordance with the relevant Delivery and Milestone
\nSchedule included in the Specifications. The Parties acknowledge and agree that
\ncertain services contemplated in this Agreement have been performed prior to,
\nand are in the course of being performed as of the Effective Date, and that all
\nof the terms and conditions of this Agreement shall be applicable to the same
\nextent and with the same effect as if such services had been performed after the
\nEffective Date. The Parties anticipate and intend that a commercial launch of
\nthe initial phase of the Medscape Consumer Site will occur on July 7, 1999 (the
\n“Phase I Delivery Date”), and that all remaining deliveries to be made by
\nSoftWatch shall be made by September 30, 1999 (the “Phase II Delivery Date”).
\nEach Party will provide or otherwise make available to the other each
\ndeliverable (“Deliverable”) or other materials identified in the Specifications
\non the date (the “Delivery Date”) specified therefor in the relevant Delivery
\nand Milestone Schedule. Medscape acknowledges that if it requests SoftWatch to
\nimplement a material change in the Specifications (as in effect from time to
\ntime), such a request may result in an extension of, or other change to the
\nrelevant Delivery and Milestone Schedule and\/or additional expense to Medscape.
\nSoftWatch will promptly notify Medscape if any change requested by Medscape will
\nresult in any such extension of, or other change and\/or additional expense, and
\nwill not undertake the same without Medscape’s prior authorization.<\/p>\n
Section 4.2 Certification Testing. Promptly upon Medscape’s
\nreceipt of each Deliverable on the relevant Delivery Date, Medscape shall
\nconduct tests to determine whether the relevant Deliverable contains the
\nfeatures and is capable of performing the operations set forth in the
\nSpecifications (each such test a “Certification Test” and the process of
\nperforming them, “Certification Testing”). Each Deliverable shall be accepted by
\nMedscape upon the first to occur of: (x) Medscape’s written notice to SoftWatch
\nspecifying successful completion of Final Certification, (y) Medscape’s written
\nwaiver of such Certification Tests, or (z) deemed acceptance pursuant to Section
\n4.3. SoftWatch may observe or participate in any Certification Tests performed
\nby Medscape.<\/p>\n
Section 4.3 Final Certification; Deemed Acceptance. If: (i)
\nthe relevant Deliverable is in conformity in all material respects with the
\nrelevant Specifications, as Medscape in its reasonable judgment determines (but
\nsubject to the understanding that no initial release software operates
\nuninterrupted or error free); or (ii) if Medscape determines to waive
\nCertification Testing with respect to such Deliverable), then Medscape<\/p>\n
8<\/p>\n
14
\nshall notify SoftWatch of its acceptance thereof (“Final Certification”). If
\nMedscape either (i) fails to give notice of Final Certification or a notice of
\nnon-conformity within thirty (30) days after Medscape receives the relevant
\nDeliverable, or (ii) makes the relevant Deliverable commercially available to
\nthe public on the Internet for revenue generating purposes (i.e. not as or part
\nof a beta test version), then Medscape will be deemed to have accepted such
\nDeliverable on the earlier to occur of (x) the date on which such thirty (30)
\nday period ends or (y) the date on which the relevant Deliverable becomes so
\navailable to the public, provided, however, that deemed acceptance by Medscape
\nof any Deliverable pursuant to either of clause (i) or (ii) shall not constitute
\na waiver of, or otherwise affect, any rights or claims which Medscape may have
\nhereunder with respect to any such Deliverable under the warranty and
\nmaintenance provisions hereof, all of which rights and claims are expressly
\nreserved by Medscape. In addition, deemed acceptance shall not in any way affect
\nany rights or claims which Medscape may have against SoftWatch for fraud or
\ngross negligence.<\/p>\n
Section 4.4 Retesting. If the relevant Deliverable fails to
\nmeet all or any part of the relevant Certification Tests, Medscape shall
\npromptly deliver to SoftWatch a written notice of non-conformity, specifying in
\ndetail the manner in which the same does not conform to the Specifications.
\nPromptly upon its receipt of such notice, SoftWatch shall have ten (10) days
\nthereafter, or such longer period of time as may be agreed by the Parties, to
\ncorrect the deficiencies cited by Medscape so as to meet the criteria set forth
\nin such Specifications, and to deliver a corrected version to Medscape. Upon its
\nreceipt thereof, Medscape shall have an additional ten (10) days to reinitiate
\nand complete an additional round of Certification Tests (the “Retesting”) of the
\nrelevant Deliverable as so corrected. SoftWatch shall be permitted, in any such
\ncase, to direct, oversee and perform additional testing in order to determine
\nthe cause or causes for any error or malfunction. Medscape shall be responsible
\nfor all direct costs and expenses which Medscape incurs in connection with any
\nrequired Retesting.<\/p>\n
Section 4.5 Failure to Achieve Final Certification. Medscape
\nand SoftWatch shall follow the delivery, testing and cure procedure set forth in
\nSection 4.4 until such time as the relevant Deliverable has been finally
\naccepted by Medscape as provided in Section 4.3, provided, however, that unless
\nsuch failure has resulted from (x) conditions which were beyond the reasonable
\ncontrol of SoftWatch, or (y) conditions which were caused by Medscape, or which
\nMedscape should have disclosed to SoftWatch, but failed to do so, on the date
\nthe Specifications therefor were agreed, then the failure of such Deliverable to
\nmeet in all material respects the criteria set forth in such Specifications
\n(subject to the understanding that no initial release software operates
\nuninterrupted or error free) upon completion of two (2) rounds of Certification
\nTesting shall, at Medscape’s option, be deemed to be a failure by SoftWatch to
\ndeliver, and upon delivery of written notice by Medscape to SoftWatch referring
\nto this Section 4.5, Medscape shall have the right, exercisable in its sole
\ndiscretion, to reject and to refuse payment for such<\/p>\n
9<\/p>\n
15
\nDeliverable, and, if prior payment has been made in respect thereof, to receive
\na credit equal to the pro rata portion of the Development Fee attributable
\nthereto.<\/p>\n
Section 4.6 Delivery Delays. Each Party will cooperate with
\nthe other in good faith to facilitate the completion, testing and acceptance of
\nthe Deliverables. Each Party will promptly give notice to the other if such
\nParty determines at any time prior to the Delivery Date of any Deliverable, or
\nprior to the date specified in the Delivery and Milestone Schedule for any
\ninformation or materials due pursuant thereto, that there has occurred any
\ncondition or event which adversely affects such Party’s ability to deliver the
\nsame by its Delivery Date or other applicable date. Medscape shall have the
\nright to delay any payments due to SoftWatch hereunder in connection with the
\nDevelopment Services or the Customization Services if SoftWatch fails to deliver
\nany Deliverable within thirty (30) days of its scheduled Delivery Date, unless
\nMedscape has given its prior consent to such delay, or if such delay has
\nresulted, in whole or in part, from an event of force majeure or any delay or
\nfailure by Medscape to perform its obligations hereunder.<\/p>\n
Section 4.7 Medscape Responsibilities with respect to
\nDeliverables. In conjunction with SoftWatch’s performance of the Development
\nServices and the Customization Services, Medscape is responsible for performing
\nand bearing all costs of the following actions:<\/p>\n
(a) determining whether the Deliverables meet the applicable
\n Specifications;<\/p>\n
(b) procuring, installing, and operating hardware and operating systems to
\n run the Deliverables in accordance with the Specifications;<\/p>\n
(c) providing a proper environment and proper utilities for the computers
\n on which the Deliverables operate, including an uninterrupted power
\n supply;<\/p>\n
(d) selecting and training personnel who can operate computers and are
\n familiar with the accounts and records that serve as input and output
\n for the relevant Deliverables;<\/p>\n
(e) establishing adequate operational back-up provisions to protect against
\n data loss and\/or a defect or malfunction that renders any Deliverable
\n or the computer systems on which it runs non-operational; and<\/p>\n
(f) identifying and making available during the Term, specific project
\n managers to serve as Medscape’s contacts with SoftWatch.<\/p>\n
10<\/p>\n
16
\nARTICLE 5. MAINTENANCE AND SUPPORT SERVICES<\/p>\n
Section 5.1 Maintenance Period. Subject to the terms and
\nconditions of this Agreement, SoftWatch will provide such maintenance services
\nto Medscape (the “Maintenance Services”) as may be required to maintain and
\nupdate the Medscape Consumer Site, the Co-Branded Diet Center, the SoftWatch
\nSoftware and the individual components thereof. The initial one-year Maintenance
\nServices period (the “Initial Maintenance Period”) shall begin on the date of
\nFinal Certification of the Phase I Deliverables (as set forth in the
\nSpecifications), and subject to the payment of the fees specified in Section
\n6.2, each additional one-year maintenance period thereafter shall begin on the
\ndate immediately following the date on which the preceding maintenance period
\nends (each such period a “Paid Maintenance Period” and together with the Initial
\nMaintenance Period, the “Maintenance Period”). The Maintenance Services shall be
\nof the same scope and character as are generally provided by SoftWatch to its
\nbest maintenance customers, and shall include Medscape’s right, so long as it
\nremains current in Maintenance Fees owed to SoftWatch as provided in Section
\n6.2, to receive at no additional costs all updates, bug fixes and other standard
\nmodifications provided by SoftWatch to its other maintenance customers.
\nMaintenance Services shall not include the distribution of new modules or other
\ndevelopments which add to, or substantially increase the functionality of, the
\nSoftWatch Software or the Co-Branded Diet Center and which SoftWatch generally
\nmakes available to third parties at additional cost. During the Maintenance
\nPeriod, SoftWatch will promptly correct any material errors, defects, bugs,
\nviruses, design flaws or other malfunctions (taking into account the severity
\nand technical difficulty in fixing the same) in the SoftWatch Software, the
\nCustomizations, the Medscape Consumer Site, the Co-Branded Diet Center, or any
\nother Deliverable, in each case, which result from causes within SoftWatch’s
\ncontrol and which have not resulted from the inoperability or incompatibility
\nof Third Party Components or any other material supplied by Medscape.<\/p>\n
Section 5.2 SoftWatch Services; Outside Consultants. If
\nMedscape requests maintenance or consulting services beyond the scope of those
\neither identified in the Development Services or otherwise being provided
\npursuant to this Agreement, SoftWatch will provide such services, subject to
\nSoftWatch’s resources and the requirements of its other customers, at
\nSoftWatch’s then current rates. Notwithstanding the foregoing, during the
\none-year period following the Effective Date, SoftWatch will make available to
\nMedscape at a rate of $175\/hour up to 4000 hours of additional services beyond
\nthose specified in Exhibit 1.2. In each subsequent year, SoftWatch will make
\navailable to Medscape at its then current rates up to 4,000 hours, of additional
\nconsulting and\/or maintenance services. Medscape agrees to provide advance
\nnotice to SoftWatch, which notice shall be reasonable under the circumstances,
\nif Medscape requires any of the above-referenced additional hours of service.
\nSoftWatch agrees to use its reasonable commercial efforts to timely respond to
\nand address any emergency or other exigent<\/p>\n
11<\/p>\n
17
\nrequest. The Parties anticipate developing an annual plan describing additional
\nconsulting and\/or maintenance services to be performed during the proceeding
\nyear, including financial terms for budgeting purposes, and such plan, shall,
\nupon agreement by the Parties, become a part of this Agreement. If during any
\nyear Medscape requires out-of- scope consulting and\/or maintenance services
\nwhich require hours in excess of those contemplated above, Medscape and
\nSoftWatch shall cooperate in good faith to negotiate the terms on which
\nSoftWatch will perform such services, taking into account such resource
\nconstraints which SoftWatch may have at the relevant time. SoftWatch’s agreement
\nto provide the foregoing out-of-scope maintenance and\/or consulting services
\nshall in no way expand, or be construed to expand, the scope of the licenses
\ngranted by SoftWatch under this Agreement.<\/p>\n
Section 5.3 Medscape.com Website. Notwithstanding anything in
\nthis Article 5 to the contrary, the Maintenance Services shall not include the
\ncorrection of any operability, functionality or compatibility errors or
\nmalfunctions relating to the use of the Creation Tools with the Medscape.com
\nwebsite, or the provision of general maintenance service in respect of the
\nCreation Tools to the extent relating exclusively to the use of the Creation
\nTools in or with the Medscape.com website, it being understood that any
\nmaintenance or consulting services requested by Medscape in connection with the
\nCreation Tools, as used in or with the Medscape.com website, shall be considered
\nout-of-scope consulting and\/or maintenance services subject to the provisions
\nof Section 5.2.<\/p>\n
ARTICLE 6. FEES FOR DEVELOPMENT AND CUSTOMIZATION SERVICES;
\n ROYALTIES.<\/p>\n
Section 6.1 SoftWatch Software Basic License Fee and
\nCustomization Fee. Medscape will pay a basic license fee of $1,000,000 with
\nrespect to the SoftWatch Software (the “SoftWatch Software License Fee”) and a
\nfee of $500,000 for SoftWatch’s Customization Services and Development Services,
\nwith such total payable as follows: (i) one third ($500,000) on the execution of
\nthis Agreement, (ii) one third ($500,000) on Final Certification of the Phase I
\nDeliverables (as set forth in the Specifications); and (iii) the balance
\n($500,000) on Final Certification of the Phase II Deliverables (as set forth in
\nthe Specifications).<\/p>\n
Section 6.2 Maintenance Fees. During the Initial Maintenance
\nPeriod, SoftWatch shall perform Maintenance Services at no cost to Medscape.
\nUnless Medscape terminates (or gives prior notice of its intent to terminate)
\nthis Agreement as provided in Section 13.1 or 13.2, from and after the date on
\nwhich the Initial Maintenance Period ends, Medscape agrees to subscribe, on an
\nannual basis, for continuing Maintenance Services at SoftWatch’s then-current
\nstandard annual maintenance fee rates (the “Maintenance Fee”). Medscape’s annual
\nMaintenance Fee for the one year period immediately following the end of the
\nInitial Maintenance Period shall be fixed at $150,000,<\/p>\n
12<\/p>\n
18
\n\\with the first monthly installment of $12,500 due on the first anniversary of
\nthe date of Final Certification of the Phase I Deliverables. All Maintenance
\nFees shall be payable on a monthly basis in advance.<\/p>\n
Section 6.3 Royalty Payments. Subject to the terms of this
\nArticle 6 and for so long as the grants of license made in Article 1 and
\nelsewhere in this Agreement remain in effect, the following royalties
\n(collectively “Royalties”) shall be payable to SoftWatch by Medscape:<\/p>\n
(a) End-User Tools Royalties. Medscape shall pay to SoftWatch
\nthe following royalties with respect to the End-User Tools:<\/p>\n
(i) for each quarterly period during the Term, an amount equal to five
\n percent (5%) of all Net Advertising Revenue derived from the sales for
\n such quarter of Sponsorships specifically tied to a specific End-User
\n Tool (other than as appear in the Co-Branded Diet Center, and other
\n than as appear in Nutrition\/GHW Sponsorship Pages) (e.g. Claritin
\n Sponsorship of the diary End-User Tool in the “Medscape Allergy
\n Center”) (the “Quarterly Sponsorship Royalty”); and<\/p>\n
(ii) for each quarterly period during the Term, an amount equal to two and
\n one-half percent (2.5%) of all Net Advertising Revenue derived from the
\n sale of Run-of-Site banner advertisements on the Medscape Consumer Site
\n for such quarter multiplied by a fraction, the numerator of which is
\n the total number of page views on which an End-User Tool application
\n (not just a link to the application) appears on the Medscape Consumer
\n Site (other than in the Co-Branded Diet Center and other than in
\n Nutrition\/GHW ROS Banner Pages) during such quarter and the denominator
\n of which is the number of total page views displayed in the Medscape
\n Consumer Site for the same quarter (the “Quarterly ROS\/Tool Banner
\n Royalty”).<\/p>\n
(b) Co-Branded Diet Center Royalties. Medscape shall pay to
\nSoftWatch the following royalties with respect to Co-Branded Diet Center:<\/p>\n
(i) for each quarterly period during the Term, an amount equal to fifty
\n percent (50%) of all Net Advertising Revenue derived from the sale of
\n Sponsorships for such quarter specifically tied to the Co-Branded Diet
\n Center multiplied by a fraction, the numerator of which is the number
\n of total page views appearing in the Co-Branded Diet Center during such
\n quarter less the total number of page views on which content provided
\n by Medscape (not just links to such Medscape content) appears during
\n the same quarter, and the denominator of which is the number of total
\n page views displayed in the Co-Branded Diet Center during the same
\n quarter (the “Quarterly Diet Center Tools Sponsorship Royalty”);<\/p>\n
13<\/p>\n
19
\n(ii) for each quarterly period during the Term, an amount equal to
\n twenty-five percent (25%) of all Net Advertising Revenues derived from
\n the sale of Sponsorships for such quarter specifically tied to the
\n Co-Branded Diet Center multiplied by a fraction, the numerator of which
\n is the number of total page views on which content provided by Medscape
\n (not just links to such Medscape content) appears in the Co-Branded
\n Diet Center during such quarter, and the denominator of which is the
\n total number of page views displayed in the Co-Branded Diet Center
\n during the same quarter (the “Quarterly Diet Center Medscape Content
\n Sponsorship Royalty”);<\/p>\n
(iii) for each quarterly period during the Term, an amount equal to fifty
\n percent (50%) of Diet Center\/ROS Tools Banner Revenue. For purposes
\n hereof, “Diet Center\/ROS Tools Banner Revenue” means all Net
\n Advertising Revenue derived from the sale of Run-of-Site banner
\n advertisements appearing on the Medscape Consumer Site during such
\n quarter multiplied by a fraction, the numerator of which is the number
\n of total page views appearing in the Co-Branded Diet Center during such
\n quarter less the total number of page views on which content provided
\n by Medscape (not just links to such Medscape content) appears in the
\n Co-Branded Diet Center during the same quarter and the denominator of
\n which is the number of total page views displayed in the Medscape
\n Consumer Site during the same quarter (the “Quarterly ROS\/Diet Center
\n Tools Banner Royalty”);<\/p>\n
(iv) for each quarterly period during the Term, an amount equal to
\n twenty-five percent (25%) of Diet Center\/ROS Content Banner Revenue.
\n For purposes hereof, “Diet Center\/ROS Content Banner Revenue” means all
\n Net Advertising Revenues derived from the sale of Run-of-Site banner
\n advertisements in the Medscape Consumer Site for such quarter
\n multiplied by a fraction, the numerator of which is total number of
\n page views appearing in the Co-Branded Diet Center for such quarter on
\n which content provided by Medscape (not just links to such Medscape
\n content) appears and the denominator of which is the number of total
\n page views displayed in the Medscape Consumer Site for the same quarter
\n (the “Quarterly ROS\/Diet Center Content Banner Royalty”).<\/p>\n
(c) Nutrition\/General Health and Wellness Center Royalties.
\nMedscape shall pay to SoftWatch the following royalties with respect to
\n“Nutrition” pages appearing in the General Health and Wellness Center:<\/p>\n
(i) for each quarterly period during the Term, an amount equal to fifteen
\n percent (15%) of all Net Advertising Revenue derived from the sales for
\n such quarter of Sponsorships which are displayed when a user of the
\n General Health and Wellness Center clicks on or otherwise selects any
\n “Nutrition” icon featured within such General Health and Wellness
\n Center (each such display a “Nutrition\/GHW Sponsorship Page”); and<\/p>\n
14<\/p>\n
20
\n(ii) for each quarterly period during the Term, an amount equal to fifteen
\n percent (15%) of all Net Advertising Revenue derived from the sale of
\n Run-of-Site banner advertisements on the Medscape Consumer Site for
\n such quarter multiplied by a fraction, the numerator of which is the
\n total number of page views displayed during such quarter as a result of
\n a General Health and Wellness Center user’s clicking or otherwise
\n selecting any “Nutrition” icon featured within such General Health and
\n Wellness Center (each such display a “Nutrition\/GHW ROS Banner Page”),
\n and the denominator of which is the number of total page views
\n displayed in the Medscape Consumer Site for the same quarter.<\/p>\n
For purposes of this Section 6.3: “Net Advertising Revenue”
\nmeans all advertising revenue actually received by Medscape less all related
\nsales credits, rebates, taxes and third-party ad sales commissions, paid or
\nissued by Medscape; “Run-of Site” or “ROS” means advertising by one or more
\nadvertisers which is evenly distributed throughout the web-site; and
\n“Sponsorship” means all other advertising which is not ROS (e.g. is unevenly
\ndistributed or is specifically tied to a particular feature, tool or content set
\nin the Medscape Consumer Site or the Co-Branded Diet Center). By way of example
\nonly, Schering Plough’s purchase of all or a portion of the ad impressions
\ndelivered in the “Medscape Asthma interactive diary” is a Sponsorship. Medscape
\nagrees that it will not use the Co-Branded Diet Center or any “Nutrition” icon
\nor nutrition management tool identified in Schedule 1.1 (or the related
\nfunctionality of any of foregoing) featured in the General Health and Wellness
\nCenter as a “loss leader.”<\/p>\n
Section 6.4 Payment Terms; Taxes. All payments due to
\nSoftWatch under this Agreement are stated and payable in U.S. dollars and shall
\nbe paid by wire transfer to such account as SoftWatch shall from time to time
\nnotify Medscape in writing. Amounts subject to Royalty and received by Medscape
\nduring each Reporting Period shall be paid to SoftWatch within thirty (30) days
\nafter the end of such Reporting Period, and each such payment shall be
\naccompanied by a copy of the report specified in Section 6.5. All payments
\nspecified in this Agreement are exclusive of, and Medscape agrees to pay, any
\napplicable sales or use tax related to the transactions described herein (other
\nthan taxes based on the net income to SoftWatch). Unless otherwise specified in
\nthis Agreement, invoices are payable within 30 days of receipt. SoftWatch
\nreserves the right to charge a late fee of up to 1.5% per month (or, if less,
\nthe maximum rate permitted by law) on any balance remaining unpaid for more than
\nforty-five (45) days.<\/p>\n
Section 6.5 (a) Reporting by Medscape for purposes of
\nCalculating Royalties. Subject to Section 6.5(b), within thirty (30) days after
\nthe end of each calendar quarter during the Term (each such quarterly period a
\n“Reporting Period” with the first such Reporting Period to end on the last day
\nof the first full calendar quarter to occur after commercial launch of the
\nMedscape Consumer Site), Medscape shall send a statement to SoftWatch
\nsummarizing, and certifying as to, the information used by Medscape to calculate
\nthe Royalties payable to SoftWatch for such Reporting Period in order to confirm<\/p>\n
15<\/p>\n
21
\nthe actual amount of Net Advertising Revenues received or projected to be
\nreceived by Medscape during the applicable Reporting Period for each category
\nspecified in Section 6.3.<\/p>\n
(b) Independent Auditor on Change of Control. If at any time
\nafter the Restricted Period a Change of Control occurs, all reports required to
\nbe delivered by Medscape to SoftWatch pursuant to Section 6.5(a) shall be
\ndelivered to and subject to review by an independent auditor reasonably
\nacceptable to both parties, who shall agree to be bound by the confidentiality
\nobligations set forth in Article 9 (an “Independent Auditor”). The Independent
\nAuditor shall prepare a report confirming the accuracy of information provided
\nby Medscape. SoftWatch shall have the right to receive solely the results of
\nsuch review only, and shall have no right to receive, review or consult actual
\ninformation provided by Medscape in its reports, Medscape’s books of account, or
\nany workpapers prepared by the Independent Auditor in connection with its
\nreview. The costs of any such Independent Auditor shall be borne equally by the
\nparties.<\/p>\n
Section 6.6 (a) Audit Rights. Medscape will maintain for at
\nleast three (3) years its records, contracts and accounts relating to each sale,
\nlicense, service, or other transaction in respect of which a Royalty is payable
\nby Medscape hereunder, and will permit examination not more frequently than once
\nper calendar year of that information upon reasonable request and during normal
\nbusiness hours by an Independent Auditor. In addition, but subject to Section
\n6.6(b), SoftWatch shall be entitled annually to appoint an Independent Auditor
\nto audit the books of account of Medscape, at SoftWatch’s expense, during normal
\nbusiness hours, with at least two weeks’ prior notice. If during the course of
\nsuch audit, it is discovered that Medscape has underpaid SoftWatch by an amount
\nin excess of five percent (5%) of the amount determined to be due for the
\naudited period, then the cost of such audit shall be borne by Medscape.
\nFurthermore, any error discovered by the Independent Auditor shall be promptly
\nremedied by Medscape after receipt of notice by SoftWatch. All information
\nreceived by a Party in the course of such audit shall be treated as Confidential
\nInformation and shall not be disclosed to any third party (other than its
\nattorneys and accountants) or used for any purpose whatsoever other than to
\ndetermine compliance with this Article 6.<\/p>\n
(b) Audit Report on Change of Control. If at any time after
\nthe Restricted Period a Change of Control occurs, SoftWatch shall have the right
\nto receive solely the results of any audit performed pursuant to Section 6.6(a),
\nand shall have no right to receive, review or consult Medscape’s books of
\naccount, the Independent Auditor’s audit report, or any workpapers prepared by
\nthe Independent Auditor in connection with its audit.<\/p>\n
(c) Change in Control. A “Change of Control” means the sale or
\nother transfer of all or substantially all of the assets of SoftWatch, Ltd. or
\nSoftWatch or the acquisition of SoftWatch, Ltd. or SoftWatch by, or other merger
\nof SoftWatch, Ltd. or SoftWatch with or into, any Competitive Business, or if
\nthere shall occur any other event<\/p>\n
16<\/p>\n
22
\nwhich results in the direct or indirect possession or exercise by any
\nCompetitive Business of voting control over SoftWatch, Ltd. or SoftWatch, or the
\ndirect or indirect holding by any Competitive Business of a majority of the
\nequity interests in SoftWatch, Ltd. or SoftWatch The foregoing shall not be
\napplicable to any change in the ownership of any publicly held stock of
\nSoftWatch, Ltd. or SoftWatch to the extent that such change does not result in
\nthe acquisition by any Competitive Business of ownership or control of more than
\n49% of any class of publicly held stock entitled to vote for the election of
\ndirectors. A “Change of Control” shall also be deemed to occur if any officer,
\ndirector, employee, shareholder (or other equity participant) of, or other
\nindividual associated with, any Competitive Business shall become a director of
\neither SoftWatch or SoftWatch, Ltd.<\/p>\n
Section 6.7 Expense Reimbursement. In addition to the other
\nfees payable by Medscape pursuant to this Agreement, Medscape agrees to
\nreimburse SoftWatch for the reasonable and necessary out-of-pocket travel and
\nliving expenses related to the provision of the Services, including travel,
\nlodging meals, incidentals and miscellaneous materials and supplies, provided,
\nhowever, that any individual item, or series of related items, of expense in
\nexcess of $750.00 shall require the prior written authorization of Medscape.<\/p>\n
ARTICLE 7. INTELLECTUAL PROPERTY RIGHTS<\/p>\n
Section 7.1 SoftWatch Owned Software and Customizations.
\nSoftWatch owns all copyright and other proprietary rights in the SoftWatch
\nSoftware, Customizations and all other extensions and derivative works created
\nby SoftWatch pursuant to this Agreement or otherwise (the foregoing,
\ncollectively, the “SoftWatch Materials”). This Agreement does not provide
\nMedscape with title or ownership of the SoftWatch Software, but only a right of
\nlimited use as provided in Article 1. Subject to the grants of license made
\npursuant to Article 1, and to the restrictions contained in Section 9.3,
\nSoftWatch retains sole and exclusive ownership of all right, title and interest
\nin and to the SoftWatch Software and all copies thereof.<\/p>\n
Section 7.2 Medscape-Owned Materials; Customization User
\nInterfaces. Medscape owns all copyright and other proprietary rights in all of
\nthe materials Medscape supplies to SoftWatch under this Agreement, including all
\nMedscape proprietary marks and brands, the specific user interface design
\nelements for or related to the Medscape Consumer Site and the Customizations
\n(including the particular look and feel and navigation thereof), all Medscape
\nContent (including as may be integrated in the Co- Branded Diet Center),
\ncustomer and professional data (including Member Information embodied in, or
\nrelating to, the SoftWatch Software and Customizations thereof), metadata
\nstructure and registration questionnaire (all of the foregoing, collectively,
\nthe “Medscape Materials”).<\/p>\n
17<\/p>\n
23
\n Section 7.3 Shared Materials. Each Party shall contribute
\nmaterials pursuant to this Agreement which are to be used jointly throughout the
\nTerm (collectively, the “Shared Materials”). Each Party retains ownership of
\nwhatever material that Party contributed to the Shared Materials pursuant to
\nthis Agreement both during the Term and thereafter, and each Party may
\nre-implement or otherwise use (subject, in the case of SoftWatch, to the
\nprovisions of Section 9.3) its respective portion of the Shared Material both
\nduring and after the Term. Under no circumstances will either Party use after
\nthe Term any portion of the Shared Materials that the other Party contributed to
\nthe Shared Materials.<\/p>\n
Section 7.4 Trademarks, Etc. Medscape owns all rights in its
\nTrademarks, and SoftWatch owns all rights in its Trademarks.<\/p>\n
Section 7.5 Limited License. Medscape grants SoftWatch a
\nnon-exclusive, non-transferable license during the Term, to reproduce, display
\nand perform the Medscape Materials for the limited purpose of designing,
\nbuilding, and maintaining the Medscape Consumer Site. SoftWatch may make only
\nsuch copies of the foregoing as may be necessary to perform its obligations
\nunder this Agreement.<\/p>\n
Section 7.6 Third Party Materials. For any material
\nincorporated in any Deliverable included in the Specifications that is not
\noriginal material created by, or licensed to, SoftWatch or is not in the public
\ndomain (but excluding Third Party Components (including chat software) which are
\nprovided to SoftWatch by Medscape), SoftWatch will have the responsibility to
\nobtain at its expense, on Medscape’s behalf, all permissions necessary to
\nincorporate and use such third-party material on an irrevocable, worldwide,
\nperpetual basis (except as a result of a breach by Medscape or its sub-
\nlicensors) as part of the Medscape Consumer Site. Medscape may obtain (or shall
\nhave the right to request SoftWatch to obtain on Medscape’s behalf) at
\nMedscape’s expense such rights as Medscape may require to incorporate additional
\nthird party materials not included in the Specifications (e.g. new features, or
\nenhancements) in the Medscape Consumer Site.<\/p>\n
ARTICLE 8. TRADEMARKS; COPYRIGHT NOTICES.<\/p>\n
Section 8.1 Incorporation of Marks. Medscape and SoftWatch
\nshall incorporate the other’s trademarks, service marks, trade names, logos and
\nother similar proprietary rights (“Trademarks”) as they may mutually agree in
\ngood faith, provided that each of Medscape and SoftWatch shall comply with such
\nrestrictions and requirements as may be notified to it from time to time by the
\nother with respect to the use of the same. Neither Party shall incorporate the
\nother’s Trademarks without first submitting a sample of the use to the Trademark
\nowner and obtaining written consent.<\/p>\n
18<\/p>\n
24
\n Section 8.2 Mutual Covenants as to Marks and Notices.
\nSoftWatch covenants and agrees that it shall not knowingly delete any Trademarks
\nor copyright notices of Medscape or any of its Affiliates that are present in or
\non, or displayed by, the Medscape Consumer Site or the Co-Branded Diet Center,
\nor otherwise use without Medscape’s consent any of Medscape’s Trademarks or
\nother identifiers in any manner other than as is expressly provided by this
\nAgreement, Medscape covenants and agrees that it shall not knowingly delete any
\nTrademarks or copyright notices of SoftWatch that are present in or on, or
\ndisplayed by, the Medscape Consumer Site or the Co-Branded Site, or otherwise
\nuse without SoftWatch’s consent any of SoftWatch’s Trademarks or other
\nidentifiers in any manner other than as is expressly provided by this Agreement.
\nIf either Party for any reason deletes or causes the deletion of any Trademark
\nor copyright notice of the other Party or any of its Affiliates that are present
\nin or on, or displayed by, the Medscape Consumer Site or the Co-Branded Diet
\nCenter, such Party shall, upon notice by the affected Party, promptly take such
\nremedial actions as the affected Party may request.<\/p>\n
ARTICLE 9. CONFIDENTIALITY; NON-COMPETE<\/p>\n
Section 9.1 Confidentiality Obligations. Each Party
\nacknowledges that it and its subcontractors(if any) have had prior to the
\nEffective Date, and in performing its obligations under this Agreement, it and
\nits subcontractors (if any) will have access to or be directly or indirectly
\nexposed to Confidential Information . Each Party covenants and agrees that it
\nshall hold confidential all Confidential Information and shall not use or
\ndisclose such Confidential Information without the express consent of the
\ndisclosing Party. Each Party shall take reasonable measures and efforts to
\nprovide protection for the disclosing Party’s Confidential Information,
\nincluding measures at least as strict as those the receiving Party uses to
\nprotect its own Confidential Information. Such measures will include requiring
\nemployees and any independent contractors to sign a non-disclosure agreement
\nbefore obtaining access to the disclosing Party’s Confidential Information. The
\nconfidentiality obligations of the Parties shall survive any termination or
\nother expiration of this Agreement.<\/p>\n
Section 9.2 Confidential Information. “Confidential
\nInformation” means information in the possession or under the control of a Party
\nrelating to a Party’s technical, marketing, product and business affairs,
\nincluding customer, price, and other proprietary and trade secret information,
\nwhether oral, graphic, written, electronic or in machine readable form, and
\nincludes the computer code embodying the Medscape Consumer Site, the SoftWatch
\nSoftware and any Customizations thereof, and the underpinnings of the
\nDietWatch.com website, and the terms and conditions of this Agreement (except
\nthat any Party may disclose the Agreement to its legal and financial advisers
\nfor the purpose of obtaining legal or financial advice). In the case of
\nMedscape, Confidential Information includes the Medscape Content, source code of
\nany software Deliverables, Member<\/p>\n
19<\/p>\n
25
\nInformation and other customer and user information, including any information
\npertaining to usage of the Medscape Consumer Site or the Medscape.com website.
\nConfidential Information does not include information which (A) was known to the
\nreceiving Party or in the public domain before disclosure; (B) becomes part of
\nthe public domain after disclosure by a publication or other means except by a
\nbreach of this Agreement by the receiving Party, (C) or was received from a
\nthird party under no duty or obligation of confidentiality to the disclosing
\nParty. Upon termination or other expiration of this Agreement, all Confidential
\nInformation disclosed by a Party to a receiving Party will be returned to the
\ndisclosing Party or, upon the request of the disclosing Party, will be promptly
\ndestroyed and certified as destroyed by the receiving Party.<\/p>\n
Section 9.3 Exclusivity; Non-Competition Covenants. (a) Each
\nof SoftWatch, Ltd. and SoftWatch hereby agrees for itself and on behalf of its
\nAffiliates, that it shall not independently or in connection with any other
\nperson or entity, directly or indirectly until the end of the Restricted Period:<\/p>\n
(i) license or sell to any Competitive Business, or otherwise
\n authorize, permit, or allow (with or without its consent) any
\n Competitive Business to use: (1) DietWatch or the
\n DietWatch.com website or any part thereof, (2) the SoftWatch
\n Software, (3) any Customizations thereof, or (4) any other
\n tools substantially similar to the SoftWatch Software or such
\n Customizations; and<\/p>\n
(ii) negotiate or conclude any license, acquisition, merger,
\n partnership, joint venture or similar arrangement, or sale of
\n all or substantially all of its assets or equity interests,
\n with, or otherwise establish, acquire, participate or own any
\n interest in, any Competitive Business established or
\n conducting business anywhere in the world;<\/p>\n
“Competitive Business” means (1) the business entities set
\nforth on Exhibit 9.3 hereof or (2) any other business that owns or operates an
\n“eHealth Service”. “Restricted Period” means (x) with respect to any
\nCompetitive Business (other than WebMD, Healtheon and InteliHealth), the period
\nbeginning on the Effective Date and ending on September 30, 1999, and with
\nrespect to WebMD, Healtheon and InteliHealth only, the period beginning on the
\nEffective Date and ending on October 31, 1999. “eHealth Service” means an
\nInternet, website or online service that mainly provides healthcare news,
\ninformation and\/or interactive tools or features to physicians, allied
\nhealthcare professionals or consumers, including, those listed on Exhibit 9.3,
\nprovided, however, that the term “eHealth Service” shall not include any website
\noperated or developed by a pharmaceutical or medical device company, ad agency
\nor other nutrition, sports or wellness organization focused on a limited number
\nof closely related products or medical conditions (e.g., MSWatch by Teva).
\n“Affiliate”, as to any Party, means any person or entity directly or indirectly
\ncontrolling, controlled by or under common control with such Party, and shall
\ninclude any officer, director and partner of any such Party. A<\/p>\n
20<\/p>\n
26
\nParty shall be deemed to control another person if it owns or has the power to
\nexercise voting rights with respect to more than 50 percent of the voting
\nsecurities of such other person or entity.<\/p>\n
(b) Notwithstanding the provisions of Section 9.3(a) above,
\nnothing in this Agreement shall prevent or otherwise restrict SoftWatch from:<\/p>\n
(i) the marketing and sale of its products and services (including the
\n SoftWatch Software and the DietWatch.com website) to any entity after
\n the Restricted Period, or to any entity other than a Competitive
\n Business during the Restricted Period; and<\/p>\n
(ii) performing its obligations under its existing arrangements with Third
\n Age, the material terms of which SoftWatch has previously disclosed to
\n Medscape.<\/p>\n
(c) Each of SoftWatch and SoftWatch, Ltd. acknowledges that
\nMedscape’s business, insofar as its relates to provision of content and services
\nover World Wide Web of the Internet, is global in scope, and that, accordingly,
\ncompetition with Medscape’s business is possible from nearly every part of the
\nworld. Each of SoftWatch and SoftWatch, Ltd. further acknowledges and agrees
\nthat the restrictions set forth in this Section 9.3 are reasonable in scope and
\nduration and are necessary to protect, and to enable Medscape to receive the
\nanticipated benefits of this Agreement and the arrangements contemplated hereby.
\nThe Parties hereto agree that, if any of the length of time, the geographical
\narea, the scope or another parameter of the restrictions set forth above is
\ndeemed to be unlawfully restrictive by a court of competent jurisdiction, such
\nprovision shall be deemed to be amended and shall be construed by such court to
\nhave the broadest type, scope and duration permissible under applicable law, and
\nif no validating construction is possible, shall be severable from the rest of
\nthis Agreement, and the validity, legality or enforceability of the remaining
\nprovisions of this Agreement shall not in any way be affected or impaired
\nthereby.<\/p>\n
Section 9.4 Specific Performance. The parties recognize that
\nthe performance of the obligations by the Parties of their respective
\nobligations under this Article 9 is special, unique and extraordinary in
\ncharacter. In addition to such other rights and remedies as a non-breaching
\nParty may have at equity or in law with respect to any breach of this Agreement,
\nif a Party commits a breach of any of the provisions of this Article 9, the
\nnon-breaching Party shall have the right and remedy to have such provisions
\nspecifically enforced by any court of competent jurisdiction or to enjoin the
\nbreaching Party from performing any act being taken by the breaching Party in
\nviolation of this Article 9, it being acknowledged and agreed that any such
\nbreach or threatened breach will cause irreparable injury to the non-breaching
\nParty, its business, proprietary marks and brands, and the goodwill associated
\ntherewith and that money damages will not provide an adequate remedy to the
\nnon-breaching Party.<\/p>\n
21<\/p>\n
27
\nARTICLE 10. REPRESENTATIONS, WARRANTIES, COVENANTS, AND
\n INDEMNITIES<\/p>\n
Section 10.1 SoftWatch. SoftWatch represents, warrants, and
\ncovenants that:<\/p>\n
(a) all of the services it performs under this Agreement will be
\n performed in a professional and workmanlike manner, consistent
\n with generally accepted industry standards, using trained
\n personnel;<\/p>\n
(b) all Deliverables and the Medscape Consumer Site, in light of
\n the fact that no software operates uninterrupted or is
\n error-free, will be designed and operate in all material
\n respects in conformity with the relevant Specifications and
\n the terms and conditions of this Agreement. Notwithstanding
\n the foregoing, but subject to Section 11.4, SoftWatch makes no
\n representation or warranty that the operation of the Medscape
\n Consumer Site or any other Deliverable will not be adversely
\n affected by documented or other known errors in any Microsoft
\n or other standard third-party operating system or similar
\n software in generally accepted industry use (including
\n Webserver and database and other e-commerce software) included
\n in the Medscape Consumer Site or such Deliverable, or on which
\n their operations rely;<\/p>\n
(c) SoftWatch has full authority to enter into this Agreement, and
\n the person signing on behalf of SoftWatch is authorized to
\n sign on SoftWatch’s behalf;<\/p>\n
(d) SoftWatch is the owner, or has the right to use, license,
\n reproduce, and distribute all materials and methodologies,
\n including computer programs, used, licensed or supplied by
\n SoftWatch in connection with the services it is providing
\n under this Agreement;<\/p>\n
(e) SoftWatch owns, or has the right to use, and has the right to
\n authorize Medscape to use, the SoftWatch Software and other
\n materials supplied by SoftWatch pursuant to this Agreement;<\/p>\n
(f) none of the materials that SoftWatch supplies pursuant to this
\n Agreement (including non-standard or custom designed
\n third-party materials such as charting software) infringes any
\n copyright, patent, trademark, trade secret or other third
\n party proprietary right. Notwithstanding the foregoing, it is
\n expressly understood and agreed by the Parties that SoftWatch
\n makes no representation or warranty, and shall have no
\n liability, with respect to any claim that any Microsoft or
\n other standard third-party operating system or similar
\n software which is in generally accepted industry use
\n (including<\/p>\n
22<\/p>\n
28
\n Webserver and database and other e-commerce software) (or any
\n use thereof) infringes the rights of any third party; and<\/p>\n
(g) SoftWatch will comply with all applicable and material
\n federal, state, and local laws and regulations in the
\n performance of its obligations under this Agreement, including
\n laws concerning the encryption and import\/export of software
\n products;<\/p>\n
Section 10.2 SoftWatch, Ltd. SoftWatch, Ltd. represents,
\nwarrants, and covenants that:<\/p>\n
(a) SoftWatch, Ltd. has full authority to enter into the
\n provisions of this Agreement applicable to, and the person
\n signing on behalf of SoftWatch, Ltd. is authorized to sign on
\n SoftWatch, Ltd.’s behalf;<\/p>\n
(b) upon execution and delivery of this Agreement by SoftWatch,
\n Ltd., this Agreement shall be the legal, valid, and binding
\n obligation of SoftWatch, Ltd., enforceable against it in
\n accordance with the terms hereof;<\/p>\n
(c) the performance by SoftWatch, Ltd of its obligations
\n hereunder, and its compliance with the terms hereof, do not
\n and will not violate any provisions of applicable Israeli law;<\/p>\n
(d) SoftWatch, Ltd. is the owner, or has the right to use,
\n reproduce, and distribute all materials and methodologies,
\n including computer programs, licensed to SoftWatch for
\n SoftWatch’s use in connection with the services its is
\n providing pursuant to this Agreement;<\/p>\n
(e) SoftWatch, Ltd. owns, or has the right to use, the SoftWatch
\n Software and other materials (including third-party materials)
\n licensed by SoftWatch, Ltd to SoftWatch; and<\/p>\n
(f) None of the materials that SoftWatch, Ltd. licenses to
\n SoftWatch (including non-standard or custom designed
\n third-party materials such as charting software) infringes any
\n copyright, patent, trademark, trade secret or other third
\n party proprietary right. Notwithstanding the foregoing, it is
\n expressly understood and agreed by the Parties that SoftWatch,
\n Ltd. makes no representation or warranty, and shall have no
\n liability, with respect to any claim that any Microsoft or
\n other standard third-party operating system or similar
\n software which is in generally accepted industry use
\n (including Webserver and database and other e-commerce
\n software) infringes the rights of any third party.<\/p>\n
23<\/p>\n
29
\n Section 10.3 Medscape. Medscape represents, warrants, and
\ncovenants:<\/p>\n
(a) Medscape has full authority to enter into this Agreement, and
\n the person signing on behalf of Medscape is authorized to sign
\n on Medscape’s behalf;<\/p>\n
(b) the Medscape Content and any other materials (including Third
\n Party Components) supplied by Medscape pursuant to this
\n Agreement do not and will not infringe any copyright, patent,
\n trademark, trade secret, or other third- party proprietary
\n right. Notwithstanding the foregoing, it is expressly
\n understood and agreed by the Parties that Medscape makes no
\n representation or warranty, and shall have no liability, with
\n respect to any claim that any Microsoft or other standard
\n third-party operating system or similar software which is in
\n generally accepted industry use (including Webserver and
\n database and other e-commerce software) (or any use thereof)
\n infringes the rights of any third party;<\/p>\n
(c) Medscape is the owner, or has the right to use, reproduce, and
\n distribute all materials and methodologies, including computer
\n programs used or supplied by Medscape in connection with this
\n Agreement;<\/p>\n
(d) Medscape will comply will all applicable and material federal,
\n state and locals laws and regulations in the performance of
\n its obligations under this Agreement, including any applicable
\n laws concerning the encryption and import\/export of software
\n products; and<\/p>\n
(e) Medscape will use its reasonable commercial efforts to promote
\n the Medscape Consumer Site and the Co-Branded Diet Center, and
\n to market and sell of advertising on such sites.<\/p>\n
Section 10.4 Indemnification. Each Party agrees to defend and
\nindemnify the other Party, its directors, officers, employees, and agents
\nagainst any claim, demand, suit, debt, liability, or costs, including reasonable
\nattorney’s fees (“Losses”), to the extent that it is based on a claim that: (a)
\nconstitutes a breach of the indemnifying Party’s warranties, representations,
\nand undertakings in this Agreement; or (b) arises out of the gross negligence or
\nwillful misconduct of the indemnifying Party, provided, however, that neither
\nParty shall not have any liability pursuant to this Section 10.4 unless the
\naggregate of all Losses for which the indemnifying Party would, but for this
\nproviso, be liable, exceeds on a cumulative basis $25,000, in which case the
\nindemnifying Party shall be liable for the aggregate of all Losses (i.e.,
\nwithout regard to the foregoing limitation). Notwithstanding the foregoing, the
\nlimitation on liability contained in the foregoing proviso shall not be
\napplicable in the case of any Losses on account of any breach of a Party’s
\nrepresentations and warranties pertaining to (x) the infringement of any
\ncopyright, patent, trademark, trade secret or other third party proprietary
\nright or (y) compliance with any applicable and<\/p>\n
24<\/p>\n
30
\nmaterial federal, state, and local laws, it being understood that the
\nindemnifying Party shall be liable to the indemnified Party in all events for
\nthe aggregate amount of all such Losses.<\/p>\n
Section 10.5 Indemnification Procedures. The Party claiming
\nindemnification pursuant to Section 10.4, shall notify the other Party promptly
\nof the claim. The indemnified Party may, at its own expense, assist in the
\ndefense if it so chooses, provided that the indemnifying Party controls the
\ndefense and all negotiations relative to any settlement and further provided
\nthat any settlement intended to bind the indemnified Party is not final without
\nthe indemnified Party’s consent. Without limiting the foregoing, if a third
\nparty makes a claim against Medscape alleging that any Deliverable infringes the
\nintellectual or other proprietary rights, SoftWatch (x) shall, at its expense,
\nsecure for Medscape the right to continue to use the relevant Deliverable in the
\nterritory or jurisdiction to which the infringement claim relates, or if the
\nclaim relates to worldwide rights, everywhere throughout the world (the
\n“Affected Territory”), or (y) modify or replace the Deliverable so as to make it
\nnon-infringing, or (z) if neither of the foregoing options is available in
\nSoftWatch’s reasonably commercial judgment, require Medscape to either cease
\nusing the Deliverable in the Affected Territory or return the Deliverable, in
\neach case, for a credit equal to a pro-rata portion of the previously paid
\nlicense fee (if any), in either of which event Medscape’s obligation to pay
\nroyalties with respect to such Deliverable to the extent relating to the
\nAffected Territory shall terminate with effect from the date on which the third
\nparty infringement claim is first made, and Medscape shall be entitled to a
\nrefund of any royalty actually paid to SoftWatch with respect to any period
\noccurring after such date to the extent relating to the Affected Territory.<\/p>\n
ARTICLE 11. PRODUCT RELATED WARRANTIES AND COVENANTS.<\/p>\n
Section 11.1 General Provisions. The provisions of this
\nArticle 11 shall be applicable to each Deliverable required to be delivered by
\nSoftWatch to Medscape pursuant to the Specifications.<\/p>\n
Section 11.2 Viruses. SoftWatch represents and warrants that
\nprior to delivery of any media containing any Deliverable, it shall use
\nreasonable efforts, consistent with generally accepted industry practice, to
\nensure that the relevant Deliverable is free of any programming devices (e.g.,
\nviruses, key locks, back doors, Trojan horses, worms, etc.) that are designed to
\ndisrupt or are capable of disrupting the use of the Deliverable or any system
\nwith which the Deliverable operates, or destroy or damage data or make it
\ndelayed or inaccessible, except for file and purge routine functioning of the
\nrelevant Deliverable.<\/p>\n
Section 11.3 Year 2000 Compliance. SoftWatch represents and
\nwarrants that the Deliverables and the Medscape Consumer Site, when operated
\naccording to the applicable Specifications, will accurately recognize, record,
\nstore and process (including<\/p>\n
25<\/p>\n
31
\ncalculating, comparing, and sequencing) date data from, into and between the
\nyears 1999 and 2000 and the twentieth and twenty-first centuries; will
\naccurately perform leap-year calculations; will accurately recognize, record,
\nstore and process two- and four-digit dates; and will not cause other
\ninformation technology to fail or generate errors related to two-or four-digit
\ndates.<\/p>\n
Section 11.4 Limited Warranty. SoftWatch makes no
\nrepresentation or warranty that the operations of any Deliverable will be error
\nfree or uninterrupted in all circumstances. If any Deliverable (including
\nstandard third-party operating systems or similar software in generally accepted
\nindustry use) or the media of which it is contained is found to contain an
\noperability problem, bug, virus or other destructive programming device (whether
\nor not any of the same are documented), then SoftWatch’s sole obligation and
\nliability hereunder shall be upon the request of Medscape, and if appropriate
\nupon Medscape’s return of the defective Deliverable, to correct the operability
\nproblem, bug, virus or other programming device (such as by providing an
\neffective by-pass or patch where technically practicable) at no charge to
\nMedscape, or, if SoftWatch is unable to do so, to replace the affected
\nDeliverable with a functional equivalent. EXCEPT AS EXPRESSLY SET FORTH IN THIS
\nAGREEMENT, SOFTWATCH MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY.
\nSOFTWATCH SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR
\nA PARTICULAR PURPOSE.<\/p>\n
Section 11.5 Limitation of Liability. THE CUMULATIVE LIABILITY
\nOF EITHER PARTY FOR ALL CLAIMS RELATING TO ARISING UNDER OR IN CONNECTION WITH
\nTHIS AGREEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL NOT EXCEED THE
\nTOTAL AMOUNT OF ALL FEES PAYABLE BY MEDSCAPE TO SOFTWATCH UNDER THIS AGREEMENT
\nDURING THE TWENTY- FOUR (24) MONTH PERIOD IMMEDIATELY PRECEDING THE DATE ON
\nWHICH THE RELEVANT CLAIM IS MADE. NOTWITHSTANDING THE FOREGOING, THIS LIMITATION
\nSHALL NOT APPLY TO LOSSES RELATING TO CLAIMS ASSERTED BY THIRD PARTIES WITH
\nRESPECT TO INFRINGEMENT OF INTELLECTUAL PROPERTY OR OTHER PROPRIETARY RIGHTS.
\nNEITHER PARTY SHALL IN ANY EVENT BE LIABLE TO THE OTHER FOR INDIRECT,
\nINCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS
\nBEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) INCLUDING LOSS OF REVENUE, LOSS
\nOF DATA, OR ANTICIPATED PROFITS OR LOST BUSINESS.<\/p>\n
Section 11.6 Adequate Controls. SoftWatch covenants and agrees
\nthat, at all times during the Term, it shall implement and maintain systems that
\nprovide for the effective back-up and recovery of all data relating to the
\nDevelopment Services.<\/p>\n
26<\/p>\n
32
\n Section 11.7 Reverse Engineering. Medscape will not cause or
\npermit the reverse engineering, disassembly or decompilation of the SoftWatch
\nSoftware, whether alone or as used in any Deliverable.<\/p>\n
Section 11.8 Encryption Covenant. At the specific request of
\nMedscape, SoftWatch will encrypt each Deliverable in the manner reasonably
\ndirected by Medscape, but then only to the extent such encryption is permissible
\nunder applicable law.<\/p>\n
Section 11.9 Medscape.com Website. Notwithstanding anything in
\nthis Article 11 to the contrary, SoftWatch makes no representation or warranty
\nas to the Creation Tools, when and to the extent used or operated in or with the
\nMedscape.com website.<\/p>\n
ARTICLE 12. SALES AGENCY.<\/p>\n
Section 12.1 Appointment. During the Term, SoftWatch appoints
\nMedscape, and Medscape shall act, as SoftWatch’s non-exclusive agent for the
\npurpose of soliciting advertising, sponsorship and co-branded distribution sales
\nin the United States and elsewhere throughout the world related to DietWatch.com
\n(the “Sales Agency Services”).<\/p>\n
Section 12.2 Scope of Agency; Right of Approval. Medscape has
\nno power or authority to execute any advertising agreements or other contracts
\nfor or on behalf of SoftWatch. All orders procured by Medscape in the
\nperformance of the Sales Agency Services are subject to final acceptance and
\napproval by SoftWatch, in its sole discretion.<\/p>\n
Section 12.3 Medscape’s Obligations. Medscape will:<\/p>\n
(a) forward all orders to SoftWatch for its approval or disapproval;<\/p>\n
(b) arrange for direct billing by and payment to SoftWatch with respect to
\n each advertiser, sponsorship or other account approved by SoftWatch;
\n and<\/p>\n
(c) unless authorized or directed by SoftWatch, make no representation with
\n respect to any SoftWatch product which is at variance with SoftWatch’s
\n own representations, and indemnity SoftWatch for all claims or damages
\n resulting for any representations made by Medscape which are at
\n variance with SoftWatch’s own representations and which are not
\n otherwise authorized or directed by SoftWatch.<\/p>\n
Section 12.4 Commission. In consideration of Medscape’s Sales
\nAgency Services, SoftWatch will pay to Medscape a sales commission (“Sales
\nCommission”) equal<\/p>\n
27<\/p>\n
33
\nto fifty (50%) of each order solicited by Medscape for which SoftWatch actually
\nreceives payment.<\/p>\n
Section 12.5 Expenses. Unless otherwise agreed by SoftWatch in
\nadvance in writing, Medscape is responsible for all costs and expenses incurred
\nby Medscape in performing the Sales Agency Services under this Agreement.<\/p>\n
Section 12.6 SoftWatch’s Responsibilities. SoftWatch will
\nfurnish Medscape with all necessary promotional and other materials and will pay
\nMedscape the compensation set out in Section 12.4.<\/p>\n
Section 12.7 Payment Terms; Taxes. All payments due to
\nMedscape under this Article 12 are stated and payable in U.S. dollars and shall
\nbe paid by wire transfer to such account as Medscape shall from time to time
\nnotify SoftWatch in writing. Amounts subject to Sales Commission shall be paid
\nto Medscape within thirty (30) days after the end of the relevant SoftWatch
\nReporting Period . Medscape reserves the right to charge a late fee of up to
\n1.5% per month (or, if less, the maximum rate permitted by law) on any balance
\nremaining unpaid for more than forty-five (45) days.<\/p>\n
Section 12.8 (a) Reporting by SoftWatch for purposes of
\nCalculating Sales Commissions. Subject to Section 12.8(b), within thirty (30)
\ndays after the end of each calendar quarter during the Term (each such quarterly
\nperiod a “SoftWatch Reporting Period,” with the first such SoftWatch Reporting
\nPeriod to end on the last day of the first full calendar quarter to occur after
\nMedscape begins conducting the Sales Agency Services), SoftWatch shall send a
\nstatement to Medscape summarizing, and certifying as to, the information used by
\nSoftWatch to calculate the Sales Commissions payable to Medscape in order to
\nconfirm the actual amount of Sales Commissions due or projected to be due to
\nMedscape during the applicable SoftWatch Reporting Period.<\/p>\n
(b) Independent Auditor on Change of Control. If at any time
\nafter the Restricted Period a Medscape Change of Control occurs, all reports
\nrequired to be delivered by SoftWatch to Medscape pursuant to Section 12.8(a)
\nshall be delivered to an Independent Auditor, who shall agree to be bound by the
\nconfidentiality obligations set forth in Article 9. The Independent Auditor
\nshall prepare a report confirming the accuracy of information provided by
\nSoftWatch only. Medscape shall have the right to receive solely the results of
\nsuch review only, and shall have no right to receive, review or consult actual
\ninformation provided by SoftWatch in its reports, SoftWatch’s books of account,
\nor any workpapers prepared by the Independent Auditor in connection with its
\nreview. The costs of any such Independent Auditor shall be borne equally by the
\nparties.<\/p>\n
Section 12.9 (a) Audit Rights. SoftWatch will maintain for at
\nleast three (3) years its records, contracts and accounts relating to each
\ntransaction in respect of which a Sales Commission is payable to Medscape
\nhereunder, and will permit examination<\/p>\n
28<\/p>\n
34
\nnot more frequently than once per calendar year of that information upon
\nreasonable request and during normal business hours by an Independent Auditor.
\nIn addition, Medscape shall be entitled annually to appoint an Independent
\nAuditor to audit the books of account of SoftWatch, at Medscape’s expense,
\nduring normal business hours, with at least two weeks’ prior notice. If during
\nthe course of such audit, it is discovered that SoftWatch has underpaid Medscape
\nby an amount in excess of five percent (5%) of the amount determined to be due
\nfor the audited period, then the cost of such audit shall be borne by SoftWatch.
\nFurthermore, any error discovered by the Independent Auditor shall be promptly
\nremedied by SoftWatch after receipt of notice by Medscape. All information
\nreceived by a Party in the course of such audit shall be treated as Confidential
\nInformation and shall not be disclosed to any third party (other than its
\nattorneys and accountants) or used for any purpose whatsoever other than to
\ndetermine compliance with this Article 12.<\/p>\n
(b) Audit Report on Change of Control. If at any time after
\nthe Restricted Period a Medscape Change of Control occurs, Medscape shall have
\nthe right to receive solely the results of any audit performed pursuant to
\nSection 12.9(a), and shall have no right to receive, review or consult
\nSoftWatch’s books of account, the Independent Auditor’s audit report, or any
\nworkpapers prepared by the Independent Auditor in connection with its audit.<\/p>\n
(c) Medscape Change in Control. A “Medscape Change of Control”
\nmeans the merger or consolidation of Medscape into or with any SoftWatch
\nCompetitor, or the acquisition of Medscape by a SoftWatch Competitor, or the
\nsale of all or substantially all of the shares, properties or assets of Medscape
\nto a SoftWatch Competitor, in each case under circumstances in which the holders
\nof a majority (by voting power) of the outstanding capital stock of Medscape
\nimmediately prior to such merger, consolidation, acquisition or sale own less
\nthan a majority (by voting power) of outstanding capital stock of Medscape or
\nthe surviving or resulting entity or acquirer, as the case may be, immediately
\nfollowing such merger, consolidation, acquisition or sale. A “Medscape Change of
\nControl” shall also be deemed to occur if any officer, director, employee,
\nshareholder (or other equity participant) of, or other individual associated
\nwith any SoftWatch Competitor shall become a director of Medscape. For purposes
\nhereof, a “SoftWatch Competitor” means (i) each of Agency.com, BroadVision,
\nCaresoft, Clarify, CyberDiet, Dr. Koop, eDiets, Exchange Applications,
\nHealthDesk, Healtheon, HealthMagic, Jenny Craig, Mediconsult, Patinet Info
\nsystems, peregrine Systems, PHDI, Phys, remedy Corp, Siebel, USWeb, Vantive,
\nVignette, WebMD, WeightWatchersgency.com, or (ii) any other entity, including
\nthose referred to in the foregoing clause (i), whose primary business is: (1)
\nthe development and sale of web software relating to healthcare, self-care
\nmanagement, or healthcare relationship marketing, or (2) the development,
\nmarketing and sale of on-line diet\/nutrition information services.<\/p>\n
29<\/p>\n
35
\nARTICLE 13. TERM AND TERMINATION<\/p>\n
Section 13.1 Term. This Agreement will begin on the date that
\nit is signed by Medscape, SoftWatch and SoftWatch, Ltd. and, unless sooner
\nterminated, shall continue until the date which is twelve months after the date
\non which Medscape notifies SoftWatch of its intent to terminate all or a portion
\nof this Agreement. Medscape shall have the right to terminate all or any portion
\nof the services being provided by SoftWatch under this Agreement at any time
\nafter the Development Services have been completed.<\/p>\n
Section 13.2 Termination for Breach. Either Medscape or
\nSoftWatch may terminate this Agreement on thirty (30) days’ notice if the other
\nmaterially breaches any of its obligations hereunder unless the breach is cured
\nwithin the thirty (30) day period, provided, however, this Agreement shall be
\nsubject to termination (x) by Medscape, effective immediately upon written
\nnotice, if either SoftWatch or SoftWatch, Ltd. breaches any of its obligations
\nunder Article 9, or (y) by SoftWatch effective immediately upon written notice,
\nif Medscape breaches its confidentiality obligations under Section 9.1.<\/p>\n
Section 13.3 Bankruptcy and Related Events. Either Party may
\nterminate this Agreement, effective immediately upon written notice, if (a) all
\nor a substantial portion of the other Party’s assets are transferred to an
\nassignee for the benefit of creditors or to a receiver or trustee in bankruptcy;
\n(b) a proceeding is commenced by or against the other Party for relief under the
\nbankruptcy or similar laws and such proceeding is not dismissed within thirty
\n(30) days; or (c) the other Party is adjudged bankrupt or insolvent. In
\naddition, the foregoing terminate right shall be exercisable by Medscape if any
\nof the specified events shall occur with respect to SoftWatch, Ltd.<\/p>\n
Section 13.4 Obligations Upon Termination or Expiration. Upon
\ntermination or expiration of this Agreement, (a) SoftWatch shall immediately
\nreturn to Medscape all copies of the Medscape Confidential Information and all
\nrecords pertaining to Medscape’s Member Information or other proprietary user
\ninformation in SoftWatch’s possession or control, except as specifically
\nprovided to the contrary in Section 1.3(d); and (b) Medscape shall immediately
\nreturn to SoftWatch all copies of the SoftWatch Confidential Information. In
\naddition, each Party shall promptly pay to the other Party any and all amounts
\ndue and owing by such Party to such other Party for all periods up to and
\nincluding the date of termination or expiration.<\/p>\n
Section 13.5 Transfer of Site. Upon Medscape’s request, or
\nupon the termination or expiration of this Agreement (other than as a result of
\nMedscape’s breach), whichever occurs first, SoftWatch shall provide all
\nreasonable assistance to Medscape and third parties authorized by Medscape to
\ntransfer the Medscape Consumer Site or parts of it to an alternate server to be
\nowned and operated by whatever entity Medscape chooses. Unless termination has
\nresulted from a breach by SoftWatch of SoftWatch, Ltd. of their<\/p>\n
30<\/p>\n
36
\nrespective obligations hereunder, such assistance shall be provided to Medscape
\nat SoftWatch’s then-current cost for such services. Such transition assistance
\nmay include: (A) delivery of full and complete copies of all computer programs
\nthat are not SoftWatch Software; and (B) assignment of all necessary rights
\nunder third-party agreements to Medscape or a new hosting service.<\/p>\n
Section 13.6 Survival. The provisions of Section 6.6, Article
\n7, Article 8, Section 9.1, Section 9.2 , Section 10.4 , Section 12.9, Section
\n13.5, Article 14 , Section 15.8 and any other provision of this Agreement
\nnecessary for the interpretation of any of the foregoing shall survive the
\ntermination or expiration of this Agreement.<\/p>\n
ARTICLE 14. GUARANTY OF SOFTWATCH, LTD.<\/p>\n
Section 14.1 Guaranty. SoftWatch, Ltd. irrevocably and
\nunconditionally guarantees all financial obligations and liabilities of
\nSoftWatch under this Agreement, and the due performance and compliance by
\nSoftWatch with the terms hereof. All payments by SoftWatch, Ltd. pursuant to
\nthis Article 14 shall be made on the same basis as are required to be made by
\nSoftWatch pursuant to this Agreement. SoftWatch, Ltd. hereby waives notice of
\nacceptance of this guaranty, presentment, demand of payment, protest, notice of
\ndishonor or nonpayment, and any suit or taking of other action by Medscape
\nagainst, and any other notice to, SoftWatch. SoftWatch, Ltd. waives, to the
\nfullest extent permitted by law, the benefit of any statute of limitations
\naffecting its liability hereunder or the enforcement thereof. This guaranty
\nshall be binding upon SoftWatch, Ltd. and its successors and assigns and shall
\ninure to the benefit of Medscape and its successors and assigns.<\/p>\n
Section 14.2 Obligations Unconditional. The obligations of
\nSoftWatch, Ltd. under this Article 14 are absolute and unconditional and shall
\nremain in full force and effect without regard to, and shall not be released,
\nsuspended, discharged, terminated or otherwise affected by, any circumstance or
\noccurrence whatsoever, including termination of this Agreement. The guaranty
\nmade by SoftWatch, Ltd. pursuant to this Article 14 is a primary obligation of
\nSoftWatch, Ltd. No failure or delay on the part of Medscape in exercising any
\nright, power or privilege hereunder and no course of dealing between SoftWatch,
\nLtd. and Medscape shall operate as a waiver thereof; nor shall any single or
\npartial exercise of any right, power or privilege hereunder preclude any other
\nor further exercise thereof or the exercise of any other right, power or
\nprivilege. The rights, powers and remedies herein expressly provided are
\ncumulative and not exclusive of any rights, powers or remedies which Medscape
\nmay otherwise have.<\/p>\n
Section 14.3 Successors and Assigns; Applicable Law. The
\nprovisions of this Article 14 shall be binding upon SoftWatch, Ltd. and its
\nsuccessors and assigns and shall inure to the benefit of Medscape and its
\nsuccessors and assigns.<\/p>\n
31<\/p>\n
37
\nARTICLE 15. GENERAL PROVISIONS<\/p>\n
Section 15.1 No Joint Venture Created. Nothing in this
\nAgreement shall be construed so as to constitute SoftWatch and Medscape as joint
\nventurers, partners, or agents of each other, and neither SoftWatch nor Medscape
\nshall have the power to obligate or bind the other in any way whatsoever.<\/p>\n
Section 15.2 Entire Agreement. This Agreement constitutes the
\ncomplete agreement between the parties and supersedes all other agreements
\n(including confidentiality agreements), promises, representations, and
\nnegotiations, whether written or oral, between the parties regarding the subject
\nmatter of the Agreement. No amendment of this Agreement shall be valid or take
\neffect unless it is in writing and signed by all the parties.<\/p>\n
Section 15.3 Assignment. SoftWatch may not assign this
\nAgreement without Medscape’s prior written permission, except that from and
\nafter the end of the Restricted Period, SoftWatch may assign this Agreement (and
\nany license contained in it) to any of its Affiliates or any person or entity
\nthat acquires its business. Medscape may assign this Agreement (and any license
\ncontained in it) to any of its Affiliates, any person or entity that acquires
\nall or portion its business, or to any other person that operates and maintains
\nthe Medscape Consumer Site. Any assignment in violation of this provision will
\nbe null and void.<\/p>\n
Section 15.4 Waiver. No waiver of any term or condition or of
\nany breach of this Agreement or of any part of it, shall be deemed a waiver of
\nany other term or condition or of any later breach of the Agreement or of any
\npart of it.<\/p>\n
Section 15.5 Notices. Any notice, consent, approval or
\ndisapproval, required or permitted under this Agreement, including any change to
\nthis Section 15.5, shall not be valid unless in writing and shall be given
\neither personally; by certified mail, return receipt requested, or by fax which
\nthe sending Party must confirm at the following addresses or telephone and fax
\nnumbers:<\/p>\n
If to Medscape:<\/p>\n
Medscape, Inc.
\n 134 W. 29th Street
\n New York, New York
\n 10001-5399
\n Attn: Paul Sheils
\n Phone: (212) 760-3200
\n Fax: (212) 265-9228<\/p>\n
32<\/p>\n
38
\n with a copy to:<\/p>\n
Patterson, Belknap, Webb & Tyler LLP
\n 1133 Avenue of the Americas
\n New York, New York 10036
\n Attn: John P. Schmitt
\n Phone: (212) 336-2849
\n Fax: (212) 336-2222<\/p>\n
If to SoftWatch:<\/p>\n
SoftWatch, Inc.
\n 67 South Bedford St.
\n Burlington, MA 01803
\n Attn: Asaf Evenhaim, Executive VP
\n Tel: 781-229-5802
\n Fax: 781-229-5878<\/p>\n
with a copy to:<\/p>\n
Lucash, Gesmer & Updegrove, LLP
\n 40 Broad Street
\n Boston, MA 02109
\n Attention: Peter M. Moldave, Esq.
\n Tel: 617-350-6800
\n Fax: 617-350-6878<\/p>\n
Section 15.6 Force Majeure. Neither Party shall be deemed in
\ndefault of this Agreement to the extent that performance of its obligations or
\nattempts to cure any breach are delayed, restricted, or prevented by reason of
\nany act of God or government, fire, natural disaster, labor stoppage, the
\nfailure of necessary power systems or connections, or any other act or condition
\nbeyond the reasonable control of the Parties, or agents appointed by such
\nParties, provided that the Party so affected uses its commercially reasonable
\nefforts to avoid or remove the causes of nonperformance and continues
\nperformance immediately after those causes are removed. Notwithstanding this
\nprovision, any delay that exceeds (2) two months shall entitle the Party whose
\nperformance is not affected by the relevant event of force majeure to terminate
\nthe Agreement and to revert any rights granted hereunder.<\/p>\n
Section 15.7 Publicity. A Party may use the name of the other
\nParty in press releases, sales material and literature only with the written
\nconsent of the other Party.<\/p>\n
33<\/p>\n
39
\n Section 15.8 Governing Law. This Agreement shall be governed
\nby and construed under the laws of the State of New York and of the United
\nStates, without regard to their conflicts of laws provisions.<\/p>\n
Section 15.9 Including. The word “including” shall mean
\n“including without limitation.”<\/p>\n
Section 15.10 Schedules and Exhibits. The Schedules and
\nExhibits hereto are an integral part of this Agreement, and any reference herein
\nto this Agreement shall be deemed to mean and include a reference to such
\nSchedules and Exhibits.<\/p>\n
Section 15.11 Captions. Headings and captions throughout this
\nAgreement are for convenience only and should not be considered part of the
\nAgreement.<\/p>\n
Section 15.12 Counterparts. This Agreement may be executed in
\ntwo or more counterparts, each of which shall be deemed an original and all of
\nwhich together shall constitute one and the same document.<\/p>\n
Section 15.13 SoftWatch, Ltd as Party. All references in
\nArticle 9 and the other provisions of this Agreement to a “Party” or “Parties”
\nshall be deemed to mean and include reference to SoftWatch, Ltd. to the extent
\nsuch provisions are expressly applicable to SoftWatch, Ltd., or the context so
\nrequires.<\/p>\n
Section 15.14 Right of Offset. Medscape shall have the right
\nto offset against any and all amounts due and owing by Medscape to SoftWatch
\nhereunder any and all amounts due by SoftWatch to Medscape hereunder. SoftWatch
\nshall have the right to offset against any and all amounts due and owing by
\nSoftWatch to Medscape hereunder any and all amounts due by Medscape to SoftWatch
\nhereunder.<\/p>\n
[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]<\/p>\n
34<\/p>\n
40
\n IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
\nexecuted and delivered on its behalf, as of the date and year first written
\nabove, by its duly authorized representative.<\/p>\n
MEDSCAPE INC.<\/p>\n
By: \/s\/ Paul T. Sheils
\n ———————————-
\n Name: Paul T. Sheils
\n Title: President & CEO<\/p>\n
SOFTWATCH INC.<\/p>\n
By: \/s\/ Asaf Evenhaim
\n ———————————-
\n Name: Asaf Evenhaim
\n Title: Executive Vice President<\/p>\n
SoftWatch, Ltd. joins this
\nAgreement solely for purposes
\nof Article 9, Section 10.2,
\nand Article 14<\/p>\n
SOFTWATCH, LTD.<\/p>\n
By: \/s\/ Amir Kishon
\n —————————-
\nName: Amir Kishon
\n Title: CEO & President<\/p>\n
35<\/p>\n
41
\n Exhibit 1.1<\/p>\n
LICENSED SOFTWARE<\/p>\n
FRAMEWORK SERVICES
\n Enrollment-registration (*)(+)
\n Logins\/lost passwords (*)(+)
\n Access control, privacy and security tracking (*)(-)
\n Back-end tools for content management and reports (*)(-)
\n Database (*)(-)
\n User consoles
\n Consumer (*)(+)
\n Reporting (*)(-)
\n Community administrator (back-end administration for content,
\n discussion groups and other community functionality) (*)(-)
\n News administrator (*)(-)
\n Medical expert (*)(-)
\n System administrator (*)(-)<\/p>\n
SEGMENTATION
\n Additional risk assessment\/segmentation questionnaire to cluster users in
\n registration phase to segments (+)
\n Target specific content and functionality to specific segment (-)
\n Targeted messaging lists (-)
\n Targeted reporting (example: which services where utilized most by segment
\n 1 users, etc.) (-)<\/p>\n
SELF-CARE MANAGEMENT TOOLS
\n Diary (*) (+)
\n Weight (*)(+)
\n Medication (**)(+)
\n Doctor visits (**)(+)
\n Memos (*)(+)
\n To Dos (*)(+)
\n Peak flow (+)
\n Blood pressure (+)
\n Glucose level (+)
\n Health journal (condition specific) (**)(+)
\n Graphs (Chart effects standard license) (*)(+)<\/p>\n
36<\/p>\n
42
\nNUTRITION MANAGEMENT TOOLS
\n Nutrition tracking (*)(+)
\n USDA and user contributed food database (over 10,000 foods) (*)(+)
\n BMI calculation, RDA guidelines and personal nutritional goal setting (*)
\n (+)
\n Add new food, recipe, or meal (*)(+)
\n Interactive database search (*)(+)
\n Immediate visual feedback (*)(+)
\n Graphs and reports of nutritional information (*)(+)
\n Diary-to-go (*)(+)<\/p>\n
EXERCISE MANAGEMENT TOOLS
\n Exercise and activity tracking (*)(+)
\n A database of activities (*)(+)
\n Calculations of time and energy burnt (*)(+)
\n Add new physical activity (*)(+)
\n Graphs and reports of exercise information (*)(+)<\/p>\n
COMMUNITY INFORMATION TOOLS FOR END-USERS
\n Ask-an-expert (*)(+)
\n Personal stories (*)(+)
\n Recommend a friend (*)(+)
\n Vote of the week (*)(+)
\n Library (*)(+)<\/p>\n
COMMUNITY NEWS TOOLS FOR END-USERS
\n Health news (3rd party news feed) (**)(+)
\n Community news (what’s new on the site) (*)(+)<\/p>\n
COMMUNITY COMMUNICATION TOOLS FOR END-USER
\n Chat ( Third party “eshare” with standard license for 50 users included)
\n (*)(+) (moderated chat option (-))
\n Discussion forums (*)(+)
\n Instant messaging (*)(+)
\n Buddy list (*)(+)
\n White pages (*)(+)
\n Postcards (*)(+)<\/p>\n
MESSAGING SYSTEM UNI-DIRECTIONAL
\n Support for newsletter attachments (*)(-)
\n Broadcast messages to members (*)(-)
\n Attachments capability (for forms, questionnaires, surveys, instruments)
\n (*)(-)<\/p>\n
37<\/p>\n
43
\nMESSAGING SYSTEM BI-DIRECTIONAL
\n Adds the consumer-to-consumer messages (*)(+)
\n Adds consumer to company messages (customer service or technical support).
\n Messages may be in a structured form format (*)(+)<\/p>\n
KEY TO SYMBOLS<\/p>\n
(*) substantially as in www.DietWatch.com
\n(**) substantially as in www.MSWatch.com
\n(+) this component\/functionality is part of the End-User Tools.
\n(-) this component\/functionality is part of the Creation Tools.<\/p>\n
Capitalized terms used herein without definition have the respective meanings
\nprovided in the License and Web Site Development Agreement.<\/p>\n
38<\/p>\n
44
\n Exhibit 1.2<\/p>\n
SPECIFICATIONS<\/p>\n
The specifications for the customization services are outlined below.
\nCapitalized terms used herein without definition have the respective meanings
\nprovided in the License and Web Site Development Agreement. The full
\nSpecifications, which will be negotiated and mutually agreed upon between the
\nParties within 30 days of the Effective Date, will provide that Phase I will not
\nexceed 10 man-months work and Phase II will not exceed 10 man-months work. The
\nspecifications will be provided by Medscape, and shall include:<\/p>\n
1. the architectural and graphical design components of the Medscape
\n Consumer Site, including a complete storyboard description showing the
\n opening pages, content and link structure, logo design, page layout,
\n descriptions of elements, and sample interactions within the Medscape
\n Consumer Site (“Site Design”), which Medscape will be responsible for
\n providing to SoftWatch in a timely manner and in a form reasonably
\n acceptable to SoftWatch;<\/p>\n
2. specifications for any Third Party Components and integration
\n requirements;<\/p>\n
3. a delivery and milestone schedule for performance of the Development
\n Services (as may be modified from time to time by agreement of the
\n Parties( the “Delivery and Milestone Schedule”);<\/p>\n
4. guidelines and specifications pertaining to generally accepted
\n technical standards applicable to the computer program and web-site
\n development industry (“Process Certification Requirements”);<\/p>\n
5. specifications for the use of standard encryption technologies (e.g.,
\n Secure Socket Layer) to provide a secure environment for all transfer
\n of personal, confidential user information and transactions; and<\/p>\n
6. registration process specifications to implement registration of
\n existing Medscape users and existing DietWatch users;<\/p>\n
7. specifications of Medscape document structure and tagging scheme; and<\/p>\n
8. other information reasonably necessary for the implementation of the
\n Medscape Consumer Site.<\/p>\n
39<\/p>\n
45
\nThe Specifications will be based on the following outline:<\/p>\n
PHASE I FOR JULY 7 LAUNCH (VERSION 1.0) OUTLINE:<\/p>\n
– Implementation of Medscape look and feel
\n– Implement the Medscape Consumer Registration Process (Phase I will
\n include a single tier registration process with 10 questions)
\n– Consumer \/ Professional \/ DW registration and login transparency
\n– Enhance content loading tools and surfacing to users based on Medscape
\n personalization and metadata structure and 18 conditions
\n– At least one custom event per health condition
\n– Adopt Medscape platform requirements: development, staging and
\n production.
\n– Start integration of existing Professional Site Components that will be
\n implemented by a third party with the Medscape Consumer Site (These
\n components include: (i) MEDLINE; (ii) AIDSLINE; (iii) TOXLINE; (iv)
\n Drug database; (v) Medical dictionary; and (vi) importing of existing
\n ~40K HTML articles from Medscape Professional Site to the Medscape
\n Consumer Site database) as agreed based on effort and impact. Final
\n integration specification will be mutually developed by June 15, 1999.
\n– External ad service integration (e.g. Doubleclick)
\n– Implementation of the Co-Branded Diet Center Specifications
\n– Track and report defined measurements such as page view calculations to
\n support revenue share calculations
\n– Partial site search of defined areas using SQL search
\n– Establish and meet SoftWatch promulgated system performance
\n measurements<\/p>\n
PHASE II FOR SEPTEMBER 30 LAUNCH (VERSION 1.1):<\/p>\n
– Implement look and feel overhaul as supplied by design firm, in html,
\n by July 30, 1999. Project not to exceed 3 man months.
\n– Completion of Professional Site Components integration (as defined
\n above)
\n– Full site search using commercial search engine
\n– Nutrition support for current generation on at least one Macintosh
\n browser platform
\n– Make major user screens bookmark-able
\n– Implement 2-tier registration process
\n– Bulk load of content sets where appropriate and automatable.
\n Specification to be mutually developed by June 18, 1999.
\n– Resource assignment to address future defined projects not to exceed
\n 40 man-days and must be functionally defined by June 18.
\n– Support for multiple web servers and database servers to permit
\n hardware scalability<\/p>\n
40<\/p>\n
46
\nCUSTOM MODULES<\/p>\n
Currently all the professional site components are defined as “custom
\n modules.”<\/p>\n
41<\/p>\n
47
\n Exhibit 1.3<\/p>\n
THE CO-BRANDED DIET CENTER SPECIFICATIONS<\/p>\n
Capitalized terms used herein without definition have the respective meanings
\nprovided in the License and Web Site Development Agreement.<\/p>\n
OVERALL PLAN: The Co-Branded Diet Center will use templates created and
\ndelivered by Medscape (Medscape look and feel with appropriate co-branding as
\nspecified in the Agreement). Final layouts and HTML pages will be provided by
\nMedscape to SoftWatch by June 20, 1999;<\/p>\n
Additionally, Medscape will provide DietWatch editorial the Medscape Consumer
\nEditorial Guidelines as updated from time to time. DietWatch editorial will
\nfollow these guidelines for all DietWatch content that will be presented in the
\nCo-Branded Diet Center. The existing Medscape Consumer Editorial Guidelines will
\nbe provided to SoftWatch by June 20, 1999.<\/p>\n
The following is the list of features for the Co-Branded Diet Center:<\/p>\n
Featured article: DietWatch feature article (not “announcements”) content would
\nbe used, in addition to Medscape Consumer featured articles. The DietWatch
\narticle would be served from the DietWatch server and the Medscape articles from
\nthe Medscape server. Both would be presented on the page, with the Medscape
\narticle in the first position. May involve some coordination between editorial
\ngroups for content programming. DietWatch editorial will follow Medscape
\nConsumer Editorial Guidelines for all feature articles.<\/p>\n
News: News content will come from Medscape Consumer only.<\/p>\n
Ask-an-expert: The Co-Branded Diet Center will include DietWatch’s
\nAsk-an-expert. DietWatch experts will follow Medscape Consumer Editorial
\nGuidelines for all Ask-an-Expert questions. In the future Medscape may offer
\nadditional experts from its own network of experts.<\/p>\n
Personal Zone\/Stories: The Co-Branded Diet Center will include the DietWatch
\npersonal stories. All existing and future personal stories will be in compliance
\nwith Medscape Consumer Editorial Guidelines.<\/p>\n
42<\/p>\n
48
\nRecipe of the Week: DietWatch Recipe of the Week content will not be used on the
\nCo-Branded Diet Center.<\/p>\n
Vote: DietWatch Vote will be available on the Co-Branded Diet Center. All votes
\nwill be selected by DietWatch community manager in compliance with Medscape
\nConsumer Editorial Guidelines.<\/p>\n
Activist: This feature will not be used on the Co-Branded Diet Center.<\/p>\n
Feedback: Medscape will receive and process this information per the
\nfunctionality specified for Medscape Consumer 1.0. SoftWatch will receive a copy
\nof user feedback for the Co-Branded Diet Center for the purpose of enhancing its
\ntools and content.<\/p>\n
Chat: Only DietWatch’s moderated chat sessions will be offered in the Co-Branded
\nDiet Center according to Medscape Consumer Editorial Guidelines regarding the
\ntopic and schedule; no unmoderated chat will be offered; In the future, Medscape
\nmay expand this offering using moderators in its expert network<\/p>\n
Discussion Groups: The Co-Branded Diet Center will not have DietWatch or other
\ndiscussion groups.<\/p>\n
Users Online: To be integrated per 1.0 template specifications<\/p>\n
Postcards: To be integrated per 1.0 template specifications<\/p>\n
Diary to Go: To be integrated per 1.0 template specifications; needs to include
\nMedscape logo<\/p>\n
Tips: The Co-Branded Diet Center will not include DietWatch Tips section. It
\nwill use the Medscape Consumer Tips functionality.<\/p>\n
Humor: The Co-Branded Diet Center will not include DietWatch or other humor
\ncontent.<\/p>\n
Newsletter: The Co-Branded Diet Center will not include DietWatch newsletter. It
\nwill include the general Medscape Consumer newsletter.<\/p>\n
43<\/p>\n
49
\n Exhibit 9.3<\/p>\n
MEDSCAPE COMPETITIVE BUSINESSES<\/p>\n
AltaVista
\nAmerica’s Doctor
\nAOL
\nAsk Dr. Weil
\n@Home
\nBetterHealth
\nCareInsite
\nCVS\/Soma
\nCyBear
\nDr. Koop\/Empower
\nDrugstore.com
\nExcite
\nGO Network
\nHealtheon
\nHealthGate
\nHealthScout
\nInfoseek
\nInteliHealth
\niVillage\/Thrive
\nLycos
\nMayo Clinic Health Oasis
\nMD Consult
\nMedicalogic
\nMediconsult
\nMedsite
\nMining Company
\nMSN
\nMSNBC
\nOnHealth
\nPhysician’s Online
\nPlanetRx
\nQD Online
\nRiteAide
\nSalu.net
\nSnap
\nWalgreen<\/p>\n
44<\/p>\n
50
\nWalmart
\nWebMD
\nWomen.com<\/p>\n
45<\/p>\n
51
\n INDEX OF DEFINED TERMS<\/p>\n
“Affected Territory” – Section 10.5<\/p>\n
“Affiliate” – Section 9.3(a)<\/p>\n
“Agreement” – Preamble<\/p>\n
“Certification Test” – Section 4.2<\/p>\n
“Certification Testing” – Section 4.2<\/p>\n
“Change of Control” – Section 6.6(c)<\/p>\n
“Co-Branded Diet Center Specifications” – Section 1.3<\/p>\n
“Co-Branded Diet Center” – Section 1.3<\/p>\n
“Competitive Business” – Section 9.3(a)<\/p>\n
“Confidential Information” – Section 9.2<\/p>\n
“Creation Tools” – Section 1.1(a)(ii)<\/p>\n
“Customization” – Section 1.2<\/p>\n
“Customization Services” – Section 1.2<\/p>\n
“Customization Specifications” – Section 1.2<\/p>\n
“Customize”, “Customized” and related words – Section 1.2<\/p>\n
“Deliverable” – Section 4.1<\/p>\n
“Delivery and Milestone Schedule” – Exhibit 1.2 (Specifications)<\/p>\n
“Delivery Date” – Section 4.1<\/p>\n
“Development Services” – Section 2.1<\/p>\n
46<\/p>\n
52
\n“Diet Center\/ROS Content Banner Revenue” – Section 6.3(b)(iv)<\/p>\n
“Diet Center\/ROS Tools Banner Revenue” – Section 6.3 (b)(iii)<\/p>\n
“Effective Date” – Preamble<\/p>\n
“eHealth Service” – Section 9.3(a)<\/p>\n
“End-User Tools” – Section 1.1(a)(i)<\/p>\n
“Final Certification” – Section 4.3<\/p>\n
“General Health and Wellness Center” – Section 1.3(b)<\/p>\n
“Including” – Section 15.9<\/p>\n
“Independent Auditor” – Section 6.5(b)<\/p>\n
“Initial Maintenance Period” – Section 5.1<\/p>\n
“Internet” – Section 1.1(c)<\/p>\n
“Losses” – Section 10.4<\/p>\n
“Maintenance Fee” – Section 6.2<\/p>\n
“Maintenance Period” – Section 5.1<\/p>\n
“Maintenance Services” – Section 5.1<\/p>\n
“Medscape” – Preamble<\/p>\n
“Medscape Change in Control” – Section 12.9(c)<\/p>\n
“Medscape Consumer Site” – Section 1.1(b)<\/p>\n
“Medscape Content” – Section 3.1<\/p>\n
“Medscape Materials” – Section 7.2<\/p>\n
“Member Information” – Section 1.3(d)<\/p>\n
47<\/p>\n
53
\n“Members” – Section 1.3(d)<\/p>\n
“Net Advertising Revenue” – Section 6.3<\/p>\n
“Nutrition\/GHW Sponsorship Page” – Section 6.3(c)<\/p>\n
“Nutrition\/GHW ROS Banner Page” – Section 6.3(c)<\/p>\n
“Paid Maintenance Period” – Section 5.1<\/p>\n
“Parties” – Preamble<\/p>\n
“Party” – Preamble<\/p>\n
“Phase I Delivery Date” – Section 4.1<\/p>\n
“Phase II Delivery Date” – Section 4.1<\/p>\n
“Process Certification Requirements” – Exhibit 1.2 (Specifications)<\/p>\n
“Quarterly Diet Center Medscape Content Sponsorship Royalty” – Section
\n6.3(b)(ii)<\/p>\n
“Quarterly Diet Center Tools Sponsorship Royalty” – Section 6.3(b)(i)<\/p>\n
“Quarterly ROS\/Diet Center Tools Banner Royalty” – Section 6.3(b)(iii)<\/p>\n
“Quarterly ROS\/Diet Center Content Banner Royalty” – Section 6.3(b)(iv)<\/p>\n
“Quarterly ROS\/Tool Banner Royalty” – Section 6.3(a)(ii)<\/p>\n
“Quarterly Sponsorship Royalty” – Section 6.3(a)(i)<\/p>\n
“Reporting Period” – Section 6.5(a)<\/p>\n
“Restricted Period” – Section 9.3(a)<\/p>\n
“Retesting” – Section 4.4<\/p>\n
“Royalties” – Section 6.3<\/p>\n
“Run-of Site” (“ROS”) – Section 6.3<\/p>\n
48<\/p>\n
54
\n“Sales Agency Services” – Section 12.1<\/p>\n
“Sales Commissions” – Section 12.4<\/p>\n
“Shared Materials” – Section 7.3<\/p>\n
“Site Design” – Exhibit 1.2 (Specifications)<\/p>\n
“Site Specifications” – Section 2.1<\/p>\n
“SoftWatch” – Preamble<\/p>\n
“SoftWatch Competitor” – Section 12.9(c)<\/p>\n
“SoftWatch, Ltd.” – Preamble<\/p>\n
“SoftWatch Materials” – Section 7.1<\/p>\n
“SoftWatch Reporting Period” – Section 12.8(a)<\/p>\n
“SoftWatch Software” – Section 1.1<\/p>\n
“SoftWatch Software License” – Section 1.1<\/p>\n
“SoftWatch Software License Fee” – Section 6.1<\/p>\n
“Specifications” – Section 2.1<\/p>\n
“Sponsorship” – Section 6.3<\/p>\n
“Third Party Components” – Section 2.1(c)<\/p>\n
“Trademarks” – Section 8.1<\/p>\n
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