<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 17, 1997
REGISTRATION NO. 333-41259
===============================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1 TO FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
----------------
ENACT HEALTH MANAGEMENT SYSTEMS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 8082 77-0326649
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
1975 WEST EL CAMINO REAL, SUITE 306
MOUNTAIN VIEW, CA 94040
(650) 967-0379
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,OF
PRINCIPAL EXECUTIVE OFFICES AND PRINCIPAL EXECUTIVE OFFICERS)
----------------
MATTHEW SANDERS
CHIEF EXECUTIVE OFFICER
ENACT HEALTH MANAGEMENT SYSTEMS
1975 WEST EL CAMINO REAL, SUITE 306
MOUNTAIN VIEW, CA 94040
PHONE: (650) 967-0379
FACSIMILE: (650) 967-9223
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES TO:
J. HOWARD CLOWES, ESQ. DONALD J. MURRAY, ESQ.
GRAY CARY WARE & FREIDENRICH DEWEY BALLANTINE LLP
A PROFESSIONAL CORPORATION 1301 AVENUE OF THE AMERICAS
400 HAMILTON AVENUE NEW YORK, NY 10019
PALO ALTO, CALIFORNIA 94301 PHONE: (212) 259-8000
PHONE: (650) 328-6561 FACSIMILE: (212) 259-6333
FACSIMILE: (650) 327-3699
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
===============================================================================
<PAGE>
EXPLANATORY NOTE
This Amendment is being filed solely for the purpose of filing certain
exhibits to the Registration Statement.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the Registrant in connection with the
sale of the Common Stock being registered. All amounts shown are estimates
except for the registration fee and the NASD filing fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE
PAID
--------
<S> <C>
Registration fee................................................ $ 12,546
NASD filing fee................................................. $ 4,640
Nasdaq National Market fee...................................... $ 17,500
Blue sky qualification fees and expenses........................ $ 15,000
Printing and engraving expenses................................. $140,000
Legal fees and expenses......................................... $250,000
Accounting fees and expenses.................................... $150,000
Transfer agent and registrar fees............................... $ 1,500
Miscellaneous................................................... $158,814
--------
Total......................................................... $750,000
========
</TABLE>
- --------
* To be supplied by amendment.
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Pursuant to Section 145 of the Delaware General Corporation Law, a
corporation generally has the power to indemnify its present and former
directors, officers, employees and agents against expenses incurred by them in
connection with any suit to which they are, or are threatened to be made, a
party by reason of their serving in such positions so long as they acted in
good faith and in a manner they reasonably believed to be in, or not opposed
to, the best interests of a corporation, and with respect to any criminal
action, they had no reasonable cause to believe their conduct was unlawful.
With respect to suits by or in the right of a corporation, however,
indemnification is not available if such person is adjudged to be liable for
negligence or misconduct in the performance of his duty to the corporation
unless the court determines that indemnification is appropriate. In addition,
a corporation has the power to purchase and maintain insurance for such
persons. The statute also expressly provides that the power to indemnify
authorized thereby is not exclusive of any rights granted under any bylaw,
agreement, vote of stockholders or disinterested directors, or otherwise.
The Registrant's Certificate of Incorporation includes provisions
eliminating a director's personal liability for monetary damages to the
Registrant and its stockholders arising from a breach of a director's
fiduciary duty, except for liability under Section 174 of the Delaware General
Corporation Law or liability for any breach of the director's duty of loyalty
to the Registrant or its stockholders, for acts or omissions not in good faith
or that involve intentional misconduct or a knowing violation of law or for
any transaction in which the director derived an improper personal benefit.
The Registrant's Bylaws provide generally for indemnification of officers,
directors, agents and employees of the Registrant to the extent authorized by
the General Corporation Law of the State of Delaware.
The Registrant anticipates that it will enter into indemnification
agreements (Exhibit 10. ) with directors. These agreements will provide
substantially broader indemnity rights than those provided under the Delaware
General Corporation Law and the Registrant's Bylaws. The proposed
indemnification agreements are not intended to deny or otherwise limit third
party or derivative suits against the Registrant or its directors or officers,
but to the extent a director or officer were entitled to indemnity or
contribution under the indemnification
II-1
<PAGE>
agreement, the financial burden of a third party suit would be borne by the
Registrant, and the Registrant would not benefit from derivative recoveries
against the director or officer. Such recoveries would accrue to the benefit
of the Registrant but would be offset by the Registrant's obligations to the
director or officer under the indemnification agreement.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
(a) Since January 1, 1994, the Registrant has sold the following
unregistered securities:
(1) In June 1994, the Registrant issued warrants to purchase 450,000
shares of Common Stock at an exercise price of $0.02 per share to a
sophisticated investor as consideration for consulting services previously
provided to the Registrant by the investors. These warrants were exercised
in 1996.
(2) In September 1994, the Registrant sold 14,200 shares of Series A
Preferred Stock to GCW&F Partners I for aggregate cash consideration of
$10,000.
(3) In September 1994, the Registrant sold 220,385 shares of Series B
Preferred Stock to two sophisticated foreign investors for aggregate cash
consideration of $800,489.
(4) In April 1995, the Registrant sold 125,000 shares of Common Stock to
employees of the Registrant in return for promissory notes in the aggregate
amount of $18,750. Said promissory notes were canceled by the Registrant
pursuant to their terms upon the completion by the employees of four months
employment with the Registrant.
(5) In April 1995, the Registrant issued warrants to purchase 95,256
shares of Series C Preferred Stock at an exercise price of $4.20 per share
to a sophisticated investor as consideration for a loan made to the
Registrant by said investor.
(6) In July 1996, the Registrant issued two warrants to purchase 40,000
shares of Common Stock at an exercise price of $0.50 per share to
sophisticated investors as consideration for services provided by a vendor
and customer.
(7) In September 1995, the Registrant sold 381,024 shares of Series C
Preferred Stock in return for aggregate cash consideration of $1,999,995,
and issued a warrant to purchase an additional 72,327 shares of Series C
Preferred Stock at an exercise price of $6.913 per share to ALZA
Corporation.
(8) In August 1996, the Registrant issued a Convertible Promissory Note
to ALZA Corporation in the amount of $1,000,000, which will be convertible
upon the completion of this offering into 171,788 shares of Common Stock at
a weighted average price of $5.82 per share.
(9) In September 1996, the Registrant issued warrants to purchase 18,000
shares of Common Stock at an exercise price of $0.50 per share to
sophisticated investors in connection with the issuance of the warrants
described in (5) above.
(10) In October 1996, the Registrant issued Convertible Promissory Notes,
which were amended in November 1997, to sophisticated investors in the
aggregate amount of up to $2,000,000 in return for loan commitments of up
to $2,000,000 of which $1,000,000 is outstanding, which will convert into
166,667 shares of Common Stock (or 287,879 shares of Common Stock if the
Company draws down the entire [$2,000,000]) at a weighted average price of
$6.95 per share upon the completion of this offering.
(11) In July 1997, the Registrant sold 275,373 shares of Series D
Preferred Stock to Johnson & Johnson Development Corp. and ALZA Corporation
for aggregate cash consideration of $3,304,476, or $12 per share. If this
offering closes on or prior to February 20, 1998, these shares will convert
into 462,164 shares of Common Stock. If this offering closes after February
20, 1998, these shares will convert into 600,813 shares of Common Stock.
(12) From March 1995 to September 30, 1997, the Registrant issued options
to purchase an aggregate of 873,500 shares of Common Stock under the
Company's stock option plans, of which options to purchase 116,900 shares
have been exercised.
II-2
<PAGE>
(b) The issuances of securities described in Item 15(a)(1) through (13) were
deemed to be exempt from registration under the Securities Act in reliance on
Section 4(2) of the Securities Act as transactions by an issuer not involving
any public offering. The issuance's of securities described in Item 15(a)(14)
were deemed to be exempt from registration under the Securities Act in
reliance on Rule 701 promulgated thereunder as transactions pursuant to a
compensatory benefit plan or a written contract relating to compensation.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following is a list of exhibits filed herewith as part of this
amendment to the Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENTS
------- ------------------------
<C> <S>
1.1* Form of Underwriting Agreement.
2.1* Form of Agreement and Plan of Merger between ENACT Health Management
Systems, a California corporation, and ENACT Health Management
Systems, a Delaware Corporation.
3.1** Amended and Restated Articles of Incorporation of ENACT Health
Management Systems, a California Corporation.
3.2* Certificate of Incorporation of ENACT Health Management Systems, a
Delaware corporation.
3.3** Bylaws of ENACT Health Management Systems, a California corporation.
3.4* Bylaws of ENACT Health Management Systems, a Delaware corporation.
4.1* Form of certificate for Common Stock.
5.1** Legal Opinion of Gray Cary Ware & Freidenrich, A Professional
Corporation, with respect to the Common Stock being registered.
10.1* Form of Indemnity Agreement for officers and directors.
10.2** The Registrant's 1995 Stock Option Plan, form of Incentive Stock
Option Agreement and form of Nonstatutory Stock Option Agreement
thereunder.
10.3** The Registrant's 1997 Stock Option Plan form of Nonstatutory Stock
Option Agreement and form of Incentive Stock Option Agreement
thereunder.
10.4* The Registrant's 1997 Directors' Stock Option Plan.
10.5* The Registrant's 1997 Employee Stock Purchase Plan and form of
Subscription Agreement thereunder.
10.6** Amended and Restated Rights Agreement dated August 29, 1996, as
amended.
10.7** Convertible Note issued by ENACT Health Management Systems to R.D.
Merrill Associates II dated October 17, 1996.
10.8** Convertible Note issued by ENACT Health Management Systems Health
Management Systems to ALZA Corporation dated August 30, 1996.
10.9** Convertible Note issued by ENACT Health Management Systems to Nippon
Enterprise Development Corp. dated October 21, 1996.
10.10** Form of Warrant to Purchase Common Stock (the "Form") issued by ENACT
Health Management Systems (see Schedule A in Exhibit 10.10 for a list
of other documents omitted from this Index and a statement of the
material details in which such documents differ from the Form).
10.11** Warrant to Purchase Series C Preferred Stock issued by ENACT Health
Management Systems to ALZA Corporation dated August 30, 1996.
10.12* Form of Warrant to Purchase Series C Preferred Stock ("Form of
Warrant") issued by ENACT Health Management Systems (see Schedule A in
Exhibit 10.12 for a list of other documents omitted from this Index to
Exhibits and a statement of the material details in which such
documents differ from the Form of Warrant).
10.13** Employment Agreement by and between ENACT Health Management Systems
and Gilbert S. Mott dated March 1, 1995.
10.14** Offer Letter by ENACT Health Management Systems to Henry Evans dated
September 8, 1995.
10.15** Consulting Agreement by and between ENACT Health Management Systems
and Wayne Wager Cascadia Ventures dated December 1, 1996.
10.16 Memorandum by and between ENACT Health Management Systems and Teijin
Ltd. dated September 21, 1995.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENTS
------- ------------------------
<C> <S>
10.17 Agreement by and between ENACT Health Management Systems and Teijin
Ltd. dated November 21, 1995.
10.18 Operating Agreement by and between ENACT Health Management Systems and
ALZA dated August 29, 1995.
10.19 Development and Marketing Agreement by and between ENACT Health
Management Systems and LifeScan, Inc. dated July 25, 1997.
10.20** Lease Agreement between ENACT Health Management Systems and El Camino
Office Investments dated September 19, 1995.
10.21** Lease Agreement between ENACT Health Management Systems and North
Hills Property, Inc.
11.1** Statement of Computation of Net Loss Per Share.
21.1** List of Subsidiaries of ENACT Health Management Systems (none).
23.1** Consent of Ernst & Young LLP, Independent Auditors (See page II-6).
23.2** Consent of Gray Cary Ware & Freidenrich, A Professional Corporation,
(included in Exhibit 5.1).
24.1** Power of Attorney (See page II-5).
27.1** Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment
** Previously filed
(b) Financial Statement Schedules
Schedule II--Valuation and Qualifying Accounts has been included at S-1.
Other schedules have been omitted because the information required to be set
forth therein is not applicable or is shown in the consolidated financial
statements or notes thereto.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes to provide the Underwriters at
the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referenced in Item 14 of
this Registration Statement or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered hereunder, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and this offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Mountain View, State of California,
on the 17th day of December, 1997.
Enact Health Management Systems
/s/ Henry Evans
By: _________________________________
HENRY EVANS
CHIEF FINANCIAL OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on December 17, 1997 by the
following persons in the capacities indicated.
SIGNATURE TITLE
Chairman of the Board, President and
Matthew Sanders* Chief Executive Officer (Principal
- ------------------------------------- Executive Officer)
(MATTHEW SANDERS)
Vice-President--Finance, Chief
/s/ Henry Evans Financial Officer (Principal
- ------------------------------------- Financial and Accounting Officer)
(HENRY EVANS)
Chris Tacklind* Director
- -------------------------------------
(CHRIS TACKLIND)
Gilbert S. Mott* Director
- -------------------------------------
(GILBERT S. MOTT)
Wayne Wager* Director
- -------------------------------------
(WAYNE WAGER)
A. Crawford Cooley* Director
- -------------------------------------
(A. CRAWFORD COOLEY)
Ernest Mario* Director
- -------------------------------------
(ERNEST MARIO)
/s/ Henry Evans
*By: ________________________________
HENRY EVANS, ATTORNEY-IN-FACT
II-5
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Selected
Financial Data" and "Experts" and to the use of our report dated March 27,
1997 (except for Note 8, as to which the date is November 25, 1997), in the
Registration Statement (Form S-1) and related Prospectus of ENACT Health
Management Systems for the registration of 3,450,000 shares of its common
stock.
Our audits also included the financial statement schedule of ENACT Health
Management Systems listed in Item 16(b). This schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion based
on our audits. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.
Ernst & Young LLP
Palo Alto, California
November 26, 1997
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
1.1* Form of Underwriting Agreement.
2.1* Form of Agreement and Plan of Merger between ENACT Health Management
Systems, a California corporation, and ENACT Health Management
Systems, a Delaware Corporation.
3.1** Amended and Restated Articles of Incorporation of ENACT Health
Management Systems, a California Corporation.
3.2* Certificate of Incorporation of ENACT Health Management Systems, a
Delaware corporation.
3.3** Bylaws of ENACT Health Management Systems, a California corporation.
3.4* Bylaws of ENACT Health Management Systems, a Delaware corporation.
4.1* Form of certificate for Common Stock.
5.1** Legal Opinion of Gray Cary Ware & Freidenrich, A Professional
Corporation, with respect to the Common Stock being registered.
10.1* Form of Indemnity Agreement for officers and directors.
10.2** The Registrant's 1995 Stock Option Plan, form of Incentive Stock
Option Agreement and form of Nonstatutory Stock Option Agreement
thereunder.
10.3** The Registrant's 1997 Stock Option Plan form of Nonstatutory Stock
Option Agreement and form of Incentive Stock Option Agreement
thereunder.
10.4* The Registrant's 1997 Directors' Stock Option Plan.
10.5* The Registrant's 1997 Employee Stock Purchase Plan and form of
Subscription Agreement thereunder.
10.6** Amended and Restated Rights Agreement dated August 29, 1996, as
amended.
10.7** Convertible Note issued by ENACT Health Management Systems to R.D.
Merrill Associates II dated October 17, 1996.
10.8** Convertible Note issued by ENACT Health Management Systems Health
Management Systems to ALZA Corporation dated August 30, 1996.
10.9** Convertible Note issued by ENACT Health Management Systems to Nippon
Enterprise Development Corp. dated October 21, 1996.
10.10** Form of Warrant to Purchase Common Stock (the "Form") issued by ENACT
Health Management Systems (see Schedule A in Exhibit 10.10 for a list
of other documents omitted from this Index and a statement of the
material details in which such documents differ from the Form).
10.11** Warrant to Purchase Series C Preferred Stock issued by ENACT Health
Management Systems to ALZA Corporation dated August 30, 1996.
10.12* Form of Warrant to Purchase Series C Preferred Stock ("Form of
Warrant") issued by ENACT Health Management Systems (see Schedule A in
Exhibit 10.12 for a list of other documents omitted from this Index to
Exhibits and a statement of the material details in which such
documents differ from the Form of Warrant).
10.13** Employment Agreement by and between ENACT Health Management Systems
and Gilbert S. Mott dated March 1, 1995.
10.14** Offer Letter by ENACT Health Management Systems to Henry Evans dated
September 8, 1995.
10.15** Consulting Agreement by and between ENACT Health Management Systems
and Wayne Wager Cascadia Ventures dated December 1, 1996.
10.16 Memorandum by and between ENACT Health Management Systems and Teijin
Ltd. dated September 21, 1995.
10.17 Agreement by and between ENACT Health Management Systems and Teijin
Ltd. dated November 21, 1995.
10.18 Operating Agreement by and between ENACT Health Management Systems and
ALZA dated August 29, 1995.
10.19 Development and Marketing Agreement by and between ENACT Health
Management Systems and LifeScan, Inc. dated July 25, 1997.
10.20** Lease Agreement between ENACT Health Management Systems and El Camino
Office Investments dated September 19, 1995.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
10.21** Lease Agreement between ENACT Health Management Systems and North
Hills Property, Inc.
11.1** Statement of Computation of Net Loss Per Share.
21.1** List of Subsidiaries of ENACT Health Management Systems (none).
23.1** Consent of Ernst & Young LLP, Independent Auditors (See page II-6).
23.2** Consent of Gray Cary Ware & Freidenrich, A Professional Corporation,
(included in Exhibit 5.1).
24.1** Power of Attorney (See page II-5).
27.1** Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment
** Previously filed
<PAGE>
EXHIBIT 10.16
MEMORANDUM
THIS MEMORANDUM, made this 21 day of September 1995, by and between ENACT
Products Inc., a California corporation having its principal place of business
at 421 Jacaranda Lane, Palo Alto, CA 94306-1846, U.S.A. (hereinafter called
ENACT) and Teijin Limited having its principal place of business at 6-7,
Minamihonmachi 1- chome, Chuo-ku, Osaka 541, Japan (hereinafter called Teijin),
WITNESSETH:
WHEREAS, both parties hereto are engaged in the design, development,
manufacture, and sale of certain health care medical equipment and computer
systems:
WHEREAS, ENACT, has developed a peak-flow monitor and its computer system
for respiratory disease:
WHEREAS, each of the parties is interested in the evaluation, development
and exploitation of a peak-flow monitor and computer systems in Japan and wishes
to cooperate with each other in the exploitation of the same:
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereby agree as follows;
1. Both parties hereto agree in principal to the terms and conditions of the
Outline of the Formal Agreement (hereinafter referred to as Agreement)
attached to this Memorandum as Exhibit A.
2. Upon signing this Memorandum, Enact commits to provide Teijin:
a) Exclusive rights to negotiate definitive terms of the Agreement for the
period of forty-five (45) days from the date first above written. This
period can be extended by mutual agreement between the parties hereto:
b) All technical information , data and support relating to the Base
Product (as defined in the Exhibit A) required by Teijin to begin the Pilot
Study (as defined in the Exhibit A);
c) [ * ] of peak-flow monitors of the Base Product; and
d) A right to evaluate the computer system of the Base Product by one or
more Teijin's employee(s) at Enact's office in the U.S.A.
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
3. In consideration of the above, Teijin shall pay Enact [ *
] upon signing this Memorandum.
4. Either party hereto shall keep secret and confidential any and all
information and data disclosed by the other party under this Memorandum,
except in so far as necessary to examine the cooperation between the
parties and shall not disclose the same to any third party.
Unless otherwise agreed upon between the parties hereto, either party
hereto shall not use such information and data for any other purpose other
than specifically provided herein.
The foregoing shall not , however, apply to any information which:
(a) is or becomes public knowledge other than by default on the part of the
receiving party, or
(b) can be established by competent proof to have been in the possession of
the receiving party at the date of disclosure to it, or
(c) is received from a bona fide third party having free right of disposal
thereof.
5. Teijin indemnifies and agrees to hold Enact harmless from and against any
and all claims, judgements, actions or damages which arise in any manner
from the performance by Teijin of its obligations pursuant to this
Memorandum or its conduct of the preliminary studies and agrees to defend
Enact, at its expense, if Enact so requests, with respect to any of the
foregoing.
6. The rights and obligations resulting from this Memorandum shall not be
assignable by either party without prior written consent of the other party
hereto, which consent will not be unreasonably withheld.
7. In case that either party fails to comply with the terms of this
Memorandum, the other party has the right to terminate this Memorandum
unless such default is cured within thirty (30) days from the service, by
such other party, of notice concerning the particular default and intention
to terminate this Memorandum.
8. The address of each party for the purpose of notice, reports, and other
communications to be made hereunder shall be as follows;
To ENACT: ENACT Products Inc.
421 Jacaranda Lane,
Palo Alto, CA. 94306-1846, U.S.A.
Atten: President
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
To Teijin: Teijin Limited
1-1, Uchisaiwaicho 2- chome, Chiyoda-ku,
Tokyo 100, Japan
Attn: General Manager,
Home Health Care Planning Dept.
Medical and Pharmaceutical Group
9. Not withstanding the existing Secrecy and Non-Disclosure Agreement between
Teijin and ENACT , this Memorandum constitutes the entire agreement between
the parties hereto and supersedes all prior, communications,
representations, agreements or understandings, whether written or oral ,
with respect to the subject matter hereof.
10. This Memorandum shall be interpreted and construed in accordance with the
laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Memorandum to be
signed by their respective duly authorized representatives as of the day and
year first above written.
ENACT Products Inc. Teijin Limited
BY: /s/ MATTHEW SANDERS BY: /s/ Masao Matsuzaki
----------------------------- ---------------------------
Masao Matsuzaki
Title:__________________________ Title:________________________
CHIEF EXECUTIVE OFFICER Senior Managing Director
<PAGE>
EXHIBIT A
THE OUTLINE OF THE FORMAL AGREEMENT
[*]
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
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EXHIBIT 10.17
AGREEMENT
This Agreement, made this 21st day of November 1995, by and between ENACT
Health Management Systems (formerly Enact Products Inc.), a California
corporation having its principal place of business at 1975 West El Camino Real
#306, Mountain View, CA 94040, U.S.A. (hereinafter called Enact) and Teijin
Limited, a Japanese Corporation having its principal place of business at 6-7
Minamihonmachi 1-chome, Chuo-ku, Osaka 541, Japan (hereinafter called Teijin),
WITNESSETH:
WHEREAS, both parties hereto are engaged in the design, development,
manufacture, and sale of certain health care medical equipment and its computer
systems;
WHEREAS, both parties hereto executed the MEMORANDUM dated September 21,
1995 for the cooperative development of a peak-flow monitor and its computer
systems for the Japanese market and the SECOND MEMORANDUM dated November 2, 1995
for the extension of the MEMORANDUM (hereinafter collectively called
MEMORANDUM);
WHEREAS, Teijin has paid Enact [ *
] and is conducting the Pilot Study (as hereinafter defined) in
accordance with the MEMORANDUM; and
WHEREAS, both parties hereto desire to execute a formal agreement with
respect to such equipment and its computer systems in accordance with the
MEMORANDUM;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereby agree as follows;
Article 1 - Definition
----------------------
1.1 As used in this Agreement, the following terms have the following
meanings respectively:
(1) "Base Product" shall mean a peak-flow monitor, its computer system
and their improvements for the U.S. market for respiratory diseases developed by
Enact as described in Exhibit A attached hereto.
(2) "Final Product" shall mean a peak-flow monitor and its computer
system for the Market (as hereinafter defined) developed by both parties based
on the Base Product as described in Exhibit B attached hereto.
(3) "Market" shall mean the market for patient monitoring in Japan in
the area of respiratory diseases including, but not limited to, asthma and
chronic obstructive pulmonary disease.
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(4) "Development" shall mean the cooperative development of the Final
Product for the Market, including, but not limited to, the Pilot Study (as
hereinafter defined) and the Clinical Trial (as hereinafter defined). It
consists of the following phases.
Phase I: the cooperative business development
Stage I: the Pilot Study
Stage II: the Clinical Trial
Phase II: the commercialization
A summary of Teijin's Initial Development plan for the Teijin Asthma
Monitoring System is attached hereto as Exhibit C.
[*]
[*]
Article 2 - Subject Matter
--------------------------
2.1 Subject to the terms and conditions of this Agreement, both parties
hereto shall collaborate with each other in carrying out the Development under
this Agreement.
Article 3 - Assignment of Teijin and Enact
-------------------------------------------
3.1 The major assignment of both parties hereto is as follows:
For Enact: 1) Supply of the Base Product for the Pilot Study
and Client Trial;
2) Supply of technology and technical support for
Teijin's modification of the Base Product
and/or Final Product as provided in Section 4.2
only for the purpose of conducting the Pilot
Study and Clinical Trial; *
3) Improvements of the peak-flow monitor of the
Base Product, which are (i) included in the
standard monitor made and marketed by Enact,
and/or (ii) improvements to the Base Product
made by Enact to comply with Japanese Telephony
standards to qualify such Base Product for use
in the Pilot Study, and/or to obtain JATE
(Japan Approvals Institute for
Telecommunications Equipment) approval for the
Base Product prior to such Pilot Study, and as
described in Exhibit B attached hereto;
4) Commercial supply of the Final Product for the
Market;
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*Note: 5) For modification purpose, Enact agrees that
Teijin uses and modifies source code of the
computer system of the Base Product as
described in Section 9.1.
For Teijin: 6) Test and Evaluation of the Base Product and/or
Final Product;
7) Conduct of the Pilot Study and Clinical Trial;
8) Development of Teijin's monitoring services
program and modification of the computer system
based on the results from the Pilot Study for
the Japanese language, Japanese software
(database, operating system, etc.) and Market
requirements;
9) Obtaining of the Koseisho import and/or
manufacturing approval of the Base Product
and/or Final Product;
10) Application for Koseisho reimbursement of the
Final Product.
3.2 Both parties hereto shall cooperate with each other in carrying out
the Development in addition to the major assignment stipulated above.
Article 4 - Support to Teijin by Enact
---------------------------------------
4.1 Enact shall provide the Base Product to Teijin for the Pilot Study
and/or Clinical Trial and the total quantities are one thousand (1,000) peak-
flow monitor units and one (1) computer system, provided, however, that such
quantities include ten (10) units peak-flow monitors to have been provided under
the MEMORANDUM.
4.2 Enact agrees to provide training and technical support as reasonably
requested by Teijin. Unless otherwise agreed, such training will be at Enact's
facilities. Teijin agrees to train personnel in the use and support of the Base
Product and/or Final Product on an ongoing basis in order to reduce the amount
of Enact's technical support.
Upon reasonable advance written request made by Teijin during the five (5)
year period from the date hereof, Enact will send to Teijin [ *
] of Enact for maximum [* * *] per one stay to provide Teijin with
technical support. However, such sending by Enact shall not exceed [ *
]
In the event that support to Teijin exceeds [ *
] Enact and Teijin will agree on fair compensation to
Enact, but not to exceed the equivalent of [ *
] For the purpose of this paragraph of Section 4.2, "support" shall not
include improvements and/or modifications of the defective Base Product and/or
Final Product.
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RESPECT TO THE OMITTED PORTIONS.
<PAGE>
Article 5 - Progress Report
---------------------------
5.1 Each party hereto shall make and send to the other party a progress
report, within one (1) month after the end of every calendar quarter during the
term of this Agreement, stating the situation of the development made by it
during the preceding calendar quarter.
Article 6 - Alteration
----------------------
6.1 In case Teijin wishes Enact to make changes or modifications to the
basic design of the Base Product and/or Final Product in connection with the
Development, Enact and Teijin shall evaluate such change or modification and
reach agreement as to such change or modification.
6.2 With respect to any changes made or proposed by Enact which affect the
form, fit or function of the Base Product and/or Final Product, Enact agrees to
notify Teijin of all such modifications as soon as reasonably possible, but in
any case within ten (10) days of issue of a release notice to Enact's
manufacturing facility, by transmitting to Teijin the engineering drawings along
with a release notice or change order.
Article 7 - Milestone Payments and Share of Costs
-------------------------------------------------
7.1 Teijin shall make the following milestone payments for (i) the supply
of a computer system and peak-flow monitors under Section 4.1 and (ii) expenses
for the development in ENACT and (iii) the right to develop and commercialize
the Base Product and/or Final Product as described elsewhere herein.
1) First Payment: [*]
2) Second Payment: [*]
3) Third Payment: [*]
7.2 Each party hereto shall bear any cost arising from its own activities
hereunder.
7.3 As for the amount of the first and second milestone payments made by
Teijin to Enact in accordance with the MEMORANDUM and Section 7.1 hereof
(excluding the third milestone payment), Enact agrees to send to Teijin a report
which shows the details of Enact's activities and related expenses hereunder for
every calendar quarter.
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RESPECT TO THE OMITTED PORTIONS.
<PAGE>
7.4 The third milestone payment to enact shall be made after the deduction
of withholding taxes duly levied in Japan on payments to the extent that the tax
credit may be obtained under the convention for the avoidance of double taxation
between the governments of U.S.A. and Japan. Teijin agrees to secure for Enact
tax receipt acceptable to U.S. tax authorities for the said tax purpose and send
it to Enact within sixty (60) days after such payment. Subject to Enact's
compliance with Section 7.3 hereof, Teijin agrees to indemnify Enact against any
deductions from the payments to Enact under Section 7.1.
Article 8 - Result and Patent
-----------------------------
ENACT has title and ownership to all intellectual property in the Base
Product. If in the course of the Development any new intellectual property is
created, the following provisions shall apply:
8.1 The result made solely by either party hereto shall be the sole and
exclusive property of such party, and the result made jointly by both parties
hereto shall be the common property of such both parties.
8.2 Both parties hereto will cooperate to file patents for any invention
solely owned by Enact in Japan and any such patents shall be filed by and in the
name of Enact.
8.3 The patent on any joint inventions (hereinafter "Joint Patent") shall
be filed by both parties hereto in any country. Any expenses to be incurred in
filing and maintaining the Joint Patent shall be born equally by both parties
hereto. If either of the parties hereto has no intention to file the Joint
Patent in a country or countries, such party (hereinafter "Non-Desiring Party")
shall notify its intentions to the other party of as soon as possible. After
receipt of such notice from the Non-Desiring Party or after failure of either
party to notify the other party of its intention to join within thirty (30) days
from the delivery of written notice by such other party expressing its desire to
file the Joint Patent in a country or countries (hereinafter "Desiring Party"),
which comes earlier, the Desiring Party has the right to file the Joint Patent
in its single name in such country or countries.
8.4 Should either party hereto intend to withdraw or abandon its patent,
the party shall notify the other party of its intentions and provide an
opportunity for such other party to acquire the subject patent in its single
name.
Article 9 - Commercial Rights
-----------------------------
9.1 Enact hereby grants to Teijin and its subsidiaries an exclusive
license during the term of this Agreement under copyrights, trade secrets,
patents, patent applications and other intellectual property rights embodied in
the Base Product and Final Product as provided to Teijin by Enact for the Market
and only for the purpose of conducting the Pilot Study and the Clinical Trial.
Such license shall include a right to modify the source code provided by Enact
and make object code copies thereof, but only for the above purposes. An
additional license to use and sell the Base Product and Final Product for the
Market will be granted only as part of the agreement
5
<PAGE>
referenced in Sections 9.2 or 9.3. All licenses granted hereunder or in the
future are limited to the Market.
9.2 If Teijin decides to commercialize the Base Product and/or Final
Product based upon the fact that the Koseisho reimbursement will be obtained as
the result of the Clinical Trial by Teijin, both parties hereto shall enter into
a distribution agreement for the Base Product and/or Final Product in Japan.
Such an agreement shall includes the following items:
1) Royalty: principally [ * ] on
the net sales of Teijin's Final Product and
services depending upon the business forecast
which will be influenced by three factors;
reimbursement, technical advantage and market
competition
2) Transfer Price: [ * ] agreed
upon between the parties, for the commercial
sale by Teijin in Japan
3) Specification: To be agreed
4) Warranty: To be agreed
5) Maintenance: To be agreed
9.3 If Teijin decides to commercialize the Base Product and/or Final
Product before obtaining of the Koseisho reimbursement as the result of the
Clinical Trial by Teijin, both parties hereto shall negotiate an appropriate
agreement. The terms and conditions of such an agreement shall be separately
agreed upon between the parties hereto.
9.4 Teijin hereby grants to Enact a non-exclusive, worldwide right under
the copyrights, trade secrets, patents, patent applications and other
intellectual property rights embodied in any modifications to the Base Product
and/or Final Product made by Teijin during the term of this Agreement.
Article 10 - Infringement of Intellectual Property Right
--------------------------------------------------------
10.1 Enact agrees to manufacture the Base Product and/or Final Product
without knowingly infringing any third party's patent, patent application and/or
other intellectual property rights, and indemnify and save Teijin harmless from
any liability, costs and/or expenses resulting from any claim that the Base
Product and/or Final Product infringe any third party's United States patent,
patent application and/or other intellectual property rights or any claim based
upon a Japanese third party's right which is equivalent in scope to such a U.S.
right. Enact's obligation under this Section 10.1 shall not exceed one-half
(1/2) of the total amount paid by Teijin to Enact under this Agreement and a
distribution agreement separately executed by both parties hereto but excluding
the amounts of the first and second milestone payments hereunder. For such
indemnity to be effective, Enact must be promptly notified and rendered
reasonable assistance by Teijin (at Enact's expense). In the event Enact wishes
to minimize its potential liability hereunder Enact
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RESPECT TO THE OMITTED PORTIONS.
<PAGE>
may, at its option, either: (i) substitute fully equivalent non-infringing units
or the Final Product; (ii) modify the infringing Final Product so that it no
longer infringes but remains functionally equivalent; or (iii) obtain for Teijin
or its customers, at Enact's expense, the rights to continue use of such Final
Product. The indemnity shall not apply to any infringement that would not have
arisen but for modifications made by, or requested by, Teijin or that results
from the integration of the Base Product and/or Final Product with products of
the third parties.
10.2 In the event that either party hereto becomes aware of any
infringement of solely or jointly owned patent in Japan, the party becoming
aware of such situation shall promptly notify the other party in writing. If
either party hereto decides to sue any third party for an infringement action,
the other party shall join in such actions. [*]
Article 11 - Indemnification and Liability
------------------------------------------
11.1 Except for the limitations, to which Teijin acknowledges and agrees,
in Enact's then current: (i) directions and instructions for the use of the Base
Product and/or Final Product (ii) terms and conditions of enrollment, and
standard warranty of the Base Product and/or Final Product (attached to them),
Enact shall be liable for, indemnify, defend and hold harmless Teijin from and
against any and all liabilities, damages, losses, costs and expenses (excluding
product liabilities) relating to the use, repair or replacement of, or refund of
amounts paid for, the Base Product and/or Final Product.
Except for the matters covered by the above paragraph of this Section 11.1,
Enact shall be liable for, indemnify, defend and hold harmless Teijin from and
against any and all liabilities, injuries, damages, losses, claims, suits, costs
and expenses (including attorney's fees) caused by a defect of the Base Product
and/or Final Product supplied by Enact. Enact's obligation shall be limited to
the amount stipulated in Section 10.1 hereof.
11.2 Teijin shall indemnify, hold harmless and defend Enact from and
against any and all claims or losses and the associated costs and expenses
(including attorney's fees), which it may incur or become responsible for in
connection with the Pilot Study, Clinical Trial or other activity conducted by
Teijin with respect to the Base Product or Final Product. Such indemnity shall
not cover matters covered under Sections 10.1 and 11.1.
11.3 If it is not obvious that which party may become responsible for
claims, losses, costs and/or expenses in connection with the activities
hereunder, Enact and Teijin shall negotiate a treatment about such claims,
losses, costs and/or expenses in good faith.
11.4 Each party agrees that any indemnity under this Agreement shall be
conditioned upon the indemnifying party receiving prompt notice and reasonable
assistance from the indemnified party (at the indemnified party's expense) of
the matter in question. Each party agrees that it shall not settle any
indemnified mater with any third party without the consent of the other party.
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Article 12 - Development with Any Third Party
---------------------------------------------
12.1 Neither party hereto may cooperate with any third party during the
term of this Agreement, in any field concerning the Development for the Market
or any development for the same purpose as described herein; provided, however,
that each party hereto may develop and commercialize any product and/or service
not to be based upon the other party's technology disclosed to it hereunder but
to be based upon its own technology to be developed independently. Such product
and/or service shall not directly compete with the Base Product and/or Final
Product.
Article 13 - Termination
------------------------
13.1 Teijin has the right to evaluate the progress and result of the
Development at any milestone stipulated in Section 7.1 hereof. If such progress
and/or result are unsatisfactory to Teijin, Teijin may terminate this Agreement
at any time. Thereafter, Teijin will have no obligation to pay the remainder of
the milestone payments stipulated in Section 7.1 hereof.
13.2 Enact may terminate this Agreement at any time in the event that; (i)
Teijin has neither obtained the Koseisho approval by October 31, 2000, nor come
to an agreement with Enact under Section 9.3 which is satisfactory to Enact, or
(ii) Teijin breaches the scope of the license under Section 9.1 or the
confidentiality provisions under Article 14. Thereafter, all Teijin's rights
hereunder shall terminate immediately, and Teijin shall return to Enact the
source code and all other confidential information provided by Enact in any
form.
13.3 In the event that either party hereto, at any time during the term of
this Agreement, commits the material breach of any provision hereunder, and
fails to rectify such breach within sixty (60) days from the receipt of written
notice from the other party, such other party may terminate this Agreement
forthwith by notice in writing to the breaching party, and then any right of
such breaching party under this Agreement shall cease forthwith. Any termination
as provided hereunder shall not prejudice any cause of action or claim of the
other party.
13.4 Should either party hereto become insolvent or make an assignment for
the benefit of creditors, or should proceedings in voluntary or involuntary
bankruptcy be instituted on behalf or against either party, or should a receiver
or trustee of either party's property be appointed, then the other party has the
right to terminate this Agreement forthwith.
Article 14 - Confidentiality
----------------------------
14.1 Either party hereto shall keep secret and confidential any and all
information and data disclosed by the other party hereunder and any result
arising from the Development, and shall not disclose the same to any third party
excluding its subsidiaries. However, such information, data and/or result may
be disclosed insofar as such disclosure is necessary for purposes hereof.
Unless otherwise agreed upon between the parties hereto, either party hereto
shall not use such information, data and/or result for any purpose other than
specifically provided herein. The foregoing shall not, however, apply to any
information, data and/or result which:
8
<PAGE>
(a) is or becomes public knowledge other than by default on the part
of the receiving party;
(b) can be established by competent proof to have been in the
possession of the receiving party at the time of disclosure to it, or
(c) is received from bona fide third party having free right of
disposal thereof.
This secrecy and non-use obligations shall remain in effect for a period of
five (5) years after expiration or earlier termination of this Agreement.
14.2 Teijin agrees that it shall protect and cause its subsidiaries to
protect all information provided by Enact in the same manner as they would
protect their own information of similar type. In particular, Teijin and its
subsidiaries shall allow access to such information only to their employees and
contractors who are under legal obligations to protect the secrecy of such
information. Source code shall in all cases be kept in locked, restricted access
room and be treated as confidential. Source code may not be copied and shall be
provided only to Teijin's and it subsidiaries' employees with a need to access
to such software for purposes hereof. All modifications can be made except for
the purposes of this Agreement. Enact agrees to comply with similar restrictions
in the event that source code or similar confidential information is provided to
it by Teijin.
Article 15 - Survival Rights and Obligations
--------------------------------------------
15.1 Articles 9 (Result and Patent), 10 (Infringement of Intellectual
Property Rights), 11 (Indemnification and Liability), 14 (Confidentiality), 19
(Governing Law), 20 (Arbitration) and 21 (Notice) shall remain in effect as long
as necessary after expiration or earlier termination of this Agreement.
15.2 In case of any termination of this Agreement based upon a breach by
either party, the parties shall negotiate in good faith a right and license
under solely owned result by either party hereunder respectively. However,
neither party shall be obliged to enter into such an agreement.
Article 16 - Assignment to Any Third Party
------------------------------------------
16.1 Neither party hereto shall assign this Agreement nor any of the
rights and obligation arising hereunder in whole or in part to any third party
excluding it subsidiaries without the prior written consent of the other party,
and any attempted assignment in violation of this Article shall be void provided
that Enact may assign this Agreement to any party which acquires the business of
Enact which is the subject of this Agreement.
Article 17 - Force Majeure
--------------------------
17.1 Neither party hereto shall be liable for failure to perform its
obligation hereunder due to riot, explosion, war, fire, flood, earthquake, acts
of God, strike, lockout or other labor troubles, acts or non-acts of the
government or any other causes beyond the control of the party,
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and the performance of its obligation hereunder shall be suspended during the
existence of such causes, provided, however, that if such suspension exceeds
three (3) months, the other party has the right to terminate this Agreement by
at least thirty (30) days' notice in writing to the party suspending the
performance of the obligation.
Article 18 - Term
-----------------
18.1 This Agreement shall become effective on the date first above written
and shall continue in full force for a period of ten (10) years, unless earlier
terminated under this Agreement. The term of this Agreement may be extended by
prior mutual agreement in writing of both parties hereto for a mutually agreed
period.
Article 19 - Governing Law
--------------------------
19.1 This Agreement shall be governed by and construed in accordance with
the laws of the State of California, U.S.A.
Article 20 - Arbitration
------------------------
20.1 All disputes, controversies or differences which may arise between
the parties hereto, in connection with this Agreement, or for the breach
thereof, shall be finally settled by arbitration in accordance with the rules of
the Conciliation and Arbitration of the International Chamber of Commerce. The
arbitration shall be held in Honolulu, U.S.A.
Article 21 - Notice
-------------------
21.1 All notices and other communications required or permitted to be
given hereunder shall be in writing and in the English language and shall be
deemed given seven (7) days after they are dispatched by postage prepaid and
registered airmail, addressed as follows:
To Teijin: 1-1, Uchisaiwaicho 2-chome, Chiyoda-ku,
Tokyo 100, Japan
Attn: General Manager of Home Health Care Planning
Department
To Enact: 1975 West El Camino Real #306
Mountain View, CA 94040
Attn: Chief Financial Officer
Article 22 - Damages
--------------------
22.1 NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR SPECIAL OR
CONSEQUENTIAL DAMAGES OR LOST PROFITS FOR ANY REASON OR CAUSE OF ACTION.
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Article 23 - Another Collaboration
----------------------------------
23.1 Both parties hereto shall use their reasonable efforts to find a
chance of another collaboration in addition to the Development.
Article 24 - Public Releases
----------------------------
24.1 Neither party shall make a public release relating to the execution
of this Agreement or the terms thereof without the prior written consent of the
other party; provided, however, that with respect to any required release of
information to the U.S. Securities and Exchange Commission, the filing party
need only provide the non-filing party with a reasonable prior opportunity to
review the release.
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
signed by their respective duly authorized representatives as of the day and
year first above written.
Enact Health Management Systems Teijin Limited
By:______________________________________ By:______________________________
Matthew Sanders Masao Matsuzaki
Title: President Title: Senior Managing Director
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The AirWatch[_] System
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EXHIBIT A: BASE PRODUCT
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The AirWatch[_] System
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The AirWatch[_] System
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The AirWatch[_] System
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The AirWatch[_] System
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EXHIBIT B: FINAL PRODUCT
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The AirWatch[_] System
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EXHIBIT C: TEIJIN'S INITIAL DEVELOPMENT PLAN
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The AirWatch[_] System
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EXHIBIT 10.18
CONFIDENTIAL
OPERATING AGREEMENT
-------------------
THIS AGREEMENT ("Agreement") is made and entered into as of the effective
date ("Effective Date") set forth below between ENACT Health Management Systems,
having its principal place of business at 421 Jacaranda Lane, Palo Alto, CA
94306 ("ENACT"), and ALZA Corporation, having its principal place of business at
950 Page Mill Road, Palo Alto, CA 94304 ("ALZA").
RECITALS
--------
WHEREAS, ENACT is engaged in the business of designing, manufacturing,
selling and providing products and services for health management systems; and
WHEREAS, ALZA wishes to act as a promotional representative for certain
products produced by and services provided by ENACT;
NOW THEREFORE, in consideration of the mutual promises and covenants set
forth below, the parties agree as follows:
AGREEMENT
---------
1. DEFINITIONS.
-----------
1.1 To "promote" means to encourage purchase of Products and Services
-------
by Payers and seek access to and reimbursement approval of the Products and
Services by Payers in the Territory as more fully set forth in Section 3.
1.2 "NAMs" shall mean ALZA's National Account Managers.
----
1.3 "Territory" means the United States of America and Puerto Rico.
---------
1.4 "Products" means the ENACT AirWatch products described in Exhibit
-------- -------
"A".
- ---
1.5 "Payer" means federal (including military and the veterans
-----
administration), state (including Medicaid), managed care or other third party
payers for health care products and services, including, but not limited to,
health maintenance organizations, preferred provider organizations and managed
insurance accounts.
1.6 "Net Sales" means the net amount invoiced by ENACT or any third
---------
party for the Products and Services after deducting all reasonable trade and
quantity discounts actually taken, taxes on sales and freight, insurance and
other transportation charges, in each case to the extent added to the sales
price and set forth separately as such in the total amount invoiced.
1.7 "Exempt Sales" means sales of the Products and Services to or
------------
through pharmaceutical companies and clinical research organizations by ENACT
for
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
one-time clinical or pharmacoeconomic studies; provided, however, that
Exempt Sales shall not include the continuation of the Services for clinical
study subjects beyond the end of such study.
1.8 "Services" means the ENACT AirWatch Central Service and related
--------
services described in Exhibit "A".
-----------
1.9 An "affiliate" means a corporation or any other entity which
---------
controls, is controlled by, or is under common control with, the designated
party.
2. APPOINTMENT OF ALZA.
-------------------
2.1 Appointment. ENACT hereby appoints ALZA, and ALZA accepts such
-----------
appointment, as an authorized representative of ENACT to promote the Products
and Services to Payers within the Territory subject to the terms and conditions
of this Agreement. Notwithstanding the foregoing, except as otherwise limited
by the rights of ALZA set forth herein, ENACT may market and conduct promotional
and sales efforts either within or without the Territory; provided, however,
that such marketing, promotional and sales efforts in the Territory shall not
relieve ENACT of its obligation to pay commissions to ALZA in accordance with
this Agreement. ALZA will act as the primary contact with Payers in the
Territory with respect to access to and reimbursement approval of Products and
Services and shall manage overall Payer promotional strategy and specific
promotional call plans to implement such strategy in the Territory. ENACT shall
coordinate its activities with ALZA when ENACT or its designated representatives
other than ALZA are contacting any Payer in the Territory.
2.2 Cooperation. Each party hereto shall cooperate with and assist
-----------
the other in promotional and marketing efforts within the Territory; provided,
however, that, except as otherwise expressly provided herein, ALZA shall not
have primary responsibility for any promotional or marketing effort, but shall
assist ENACT with such efforts upon ENACT's reasonable request and subject to
the availability of ALZA's existing resources as determined by ALZA. Whenever
reasonably requested by one party hereto, the other party shall follow up on
correspondence with any Payer relating to the Products and Services within the
Territory, and shall assist in the resolution of commercial or technical issues
which may arise with such Payer.
3. ALZA'S GENERAL DUTIES. ALZA shall use reasonable diligent efforts, on
---------------------
a similar basis as ALZA's promotion of its own products to Payers, to: (a)
introduce, promote, solicit and otherwise encourage and seek access to and
reimbursement approval of the Products and Services by Payers in the
Territory; (b) cooperate in implementing lawful and applicable Products and
Services sales programs and policies of ENACT; and (c) except as otherwise
provided in this Agreement, bear the entire cost and expense of conducting all
of its activities under this Agreement. Except as otherwise agreed upon by
ENACT and ALZA, ALZA's scope of promotional responsibility shall not include
direct contact with prescribing physicians or other respiratory care
specialists except to the extent that such persons affect or can influence
decisions regarding product access, formulary approval, reimbursement (both
initial approval and continued approval) and prescribing by Payers.
4. ALZA'S SPECIFIC DUTIES. Without in any way limiting the generality of
----------------------
the
2
<PAGE>
preceding paragraph, ALZA agrees as follows:
4.1 Promotion. ALZA's promotional efforts shall include, but are not
---------
limited to, direct contacts and visitation with representatives of Payers,
including medical and pharmacy directors, formulary committee members, outcome/
pharmacoeconomic staff, utilization managers, plan administrators and health
plan sales and marketing staff. Notwithstanding anything herein to the
contrary, ALZA's obligations hereunder shall not include direct contacts with
Payers other than the large, influential Payers in the Territory such as those
listed in Exhibit " B." ALZA shall not make any representations, warranties,
-------------
claims or other descriptions with respect to the Products or Services except as
set forth in ENACT's most current written instructional materials and product
warranty as furnished by ENACT to ALZA.
4.2 Maintenance of Reimbursement Approval. In addition to the
-------------------------------------
seeking of access to and reimbursement approval of the Products and Services by
Payers, ALZA shall seek to maintain access and reimbursement approval of the
Products and Services by Payers.
4.3 Soliciting Contracts. ALZA shall use reasonable diligent efforts
--------------------
(similar to those ALZA would use to promote its own products of similar
commercial potential) to solicit and obtain contracts to purchase the Products
and Services from Payers, as is appropriate. Contracting practices shall be
developed jointly by ALZA and ENACT as set forth in greater detail in Section
5.6 hereof.
4.4 Dedication of NAMs. ALZA agrees to devote the following to
------------------
promoting the Products and Services pursuant to this Agreement: (a) in the
twelve months immediately following the Effective Date, ALZA will devote the
services of its NAMs [*], (b) after the twelfth month through the twenty-fourth
month following the Effective Date, ALZA will devote the services of its NAMs
[*], and (c) thereafter, through termination of this Agreement, ALZA will devote
the services of its NAMs [*]. During the twelve months immediately following the
date of commercial launch of the Products and Services, ALZA agrees to base a
portion of the incentive compensation of each NAM involved in promoting the
Products and Services under this Agreement on such activities, which portion
shall be, in the aggregate, [*]. Thereafter, ALZA agrees to base a portion of
the incentive compensation of each NAM involved in promoting the Products and
Services on such activities, which portion [*].
4.5 Additional Support. Upon ENACT's reasonable request, ALZA shall
------------------
provide ENACT with additional support and assistance in the areas of market
research, convention/conference organization, managed care and other advisory
groups, public relations and clinical protocol review/input (including but not
limited to pharmacoeconomic studies); provided, however, such additional support
shall be subject to the availability of ALZA's existing resources as determined
by ALZA at the
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
3
<PAGE>
time of such request and shall in no event exceed [*]. Except as otherwise
expressly provided herein, ENACT shall have primary responsibility for the
preparation, development and execution of such projects and any additional
support and assistance provided by ALZA hereunder shall be in the form of
review, comment and other similar assistance. ENACT shall reimburse ALZA for all
reasonable out-of-pocket expenses incurred by ALZA while providing such
additional support and assistance.
4.6 Reports and Meetings. ALZA and ENACT will jointly develop and
--------------------
design an overall Payer promotional strategy. ALZA will develop specific
promotional call plans to implement such strategy. Within thirty (30) days of
the end of each quarter, ALZA shall prepare and submit to ENACT a quarterly call
activity report summarizing the account call activities of ALZA's NAMs
hereunder, other activities and efforts conducted by ALZA hereunder and any
material customer feedback received with respect to the Products and Services
during the preceding quarter. ALZA and ENACT, together with ENACT's other
representatives, shall cooperate with each other to formalize a process for
making quarterly forecasts as to the level of expected sales of the Products and
Services. In addition, ALZA shall forward to ENACT information regarding any
significant promotional problems or significant problems with the Products and
Services promptly upon receipt by ALZA. Additionally, ALZA and ENACT shall meet
no less than twice each calendar year, or as may be more frequently agreed upon,
to review and discuss the relationship of the parties and the sales, marketing
and promotional strategies (including the overall Payer promotional strategy)
and efforts of both parties.
4.7 Professional Association Meetings and Trade Conventions. ALZA
-------------------------------------------------------
agrees to display the Products and Services at appropriate professional
association meetings, trade conventions and industry symposia in managed
health care attended by ALZA at which ALZA personnel are displaying other
products. At ENACT's expense, ENACT shall provide to ALZA for such events all
printed promotional materials and, as appropriate, display graphics to ALZA's
display specifications. ALZA will be responsible for coordinating, and shall
coordinate, such meeting, convention and symposia plans and schedules with
ENACT. To the extent such events as agreed to by ALZA and ENACT require ALZA
to retain a greater exhibit display space than ALZA would need for products
being displayed by ALZA other than the Products and Services, ALZA and ENACT
shall share the associated costs payable to third parties (including without
limitation display space rental) of such events.
4.8 ENACT Materials. ALZA shall provide ENACT with ALZA's supply
---------------
destination for the ENACT promotional information, marketing literature, forms
and other marketing materials. ALZA shall then be responsible for distributing
and disseminating such information, marketing literature and other materials in
connection with its activities hereunder, and shall notify ENACT when additional
materials are required. ALZA shall not use any ENACT promotional information,
marketing literature, forms or other printed material of any kind, for any
purpose, except as may otherwise be provided herein and except to the extent
ALZA is required to disclose ALZA's promotion of the Products and Services
during the course of its business operations, without obtaining ENACT's prior
written consent for such use.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
4
<PAGE>
5. ENACT'S DUTIES, REPRESENTATIONS AND WARRANTIES.
----------------------------------------------
5.1 Promoting and Marketing Products. Consistent with ALZA's rights
--------------------------------
to promote the Products and Services as set forth in this Agreement, ENACT,
through its own marketing organization or through designated representatives,
shall diligently promote and market the Products and Services throughout the
term of this Agreement. ENACT's promotional and marketing efforts shall
include, without limitation, direct detailing to allergy, pulmonary and other
appropriate prescribing physicians.
5.2 Marketing Plan. ENACT has developed a marketing plan with
--------------
respect to the Products and Services covering the period from the Effective Date
through December 31, 1996, a copy of which is attached hereto as Exhibit "C".
-----------
By November 30 of each year after 1995 during the term of this Agreement, ENACT
and its designated representatives will prepare and present to ALZA a marketing
and business plan for the Products and Services for the following calendar year.
ENACT will seek and consider in good faith ALZA's input in the development of
each such plan.
5.3 Product Marketing. From the Effective Date through the later of
-----------------
(a) the date which is 12 months after the date of commercial launch of the
Products and Services, and (b) the date which is 18 months after the Effective
Date, [*] and (ii) may not include packaging, packaging development and clinical
outcomes research expenses) consistent with the marketing activities set forth
in the marketing plan attached hereto as Exhibit "C".
-----------
5.4 Reports and Meetings. Within forty-five (45) days of the end of
--------------------
each quarter, ENACT shall provide ALZA with a detailed report on direct
detailing and marketing activities undertaken by ENACT and its designated
representatives during the preceding quarter, including, without limitation, the
total number of sales calls and the number of direct details to allergy,
pulmonary and other appropriate prescribing physicians. Such report shall also
include a summary of any material customer feedback received with respect to the
Products and Services during the preceding quarter. Within twenty (20) days of
the end of each month, ENACT shall provide ALZA with a summary report of all
contacts ENACT, acting directly or through its designated representatives, had
with Payers during the preceding calendar month, including, without limitation,
the identity of the Payer contacted and the purpose of the contact. In addition
to fulfilling the mutual reporting and meeting obligations described in Section
4.6 hereof, ENACT shall forward to ALZA information regarding any significant
sales and marketing problems or significant problems with the Products and
Services promptly upon receipt by ENACT.
5.5 Literature and Promotional Materials. ENACT shall furnish ALZA,
------------------------------------
without charge (except as may otherwise be agreed upon), with such quantities as
ALZA may reasonably request of technical, advertising and selling information
and literature concerning the Products and Services and samples of the Products,
which
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
5
<PAGE>
ENACT may from time to time produce or have available for trade
circulation. Upon ALZA's reasonable request, ENACT shall cooperate with ALZA to
develop modifications of such information and literature, or packages comprised
of the foregoing and/or samples of Products, for use specifically with
particular Payers to assist ALZA in its promotion of the Products and Services
to such Payers. All ENACT technical, promotional and other literature and sales
samples which are provided to ALZA must be maintained in a commercially
reasonable manner and any unused materials shall be returned to ENACT upon
request. ENACT shall develop and review such information and literature in on-
going consultation with ALZA and shall update such information and literature on
a timely basis and notify ALZA promptly of any such updates.
5.6 Pricing, Terms and Conditions and Warranties. ENACT and ALZA
--------------------------------------------
shall develop in consultation with each other contract terms relating to the
price and availability of Products and Services for Payers, which terms will
be based on ENACT's general pricing policies, and contracting practices.
Subject to such joint development obligations, ALZA shall have no right or
authority, express or implied, directly or indirectly, to alter, enlarge or
limit ENACT's terms and conditions of sale or the representations or
guarantees expressly contained in ENACT's most current written product
warranty as distributed by ENACT for the applicable Product and ENACT shall be
solely responsible for setting, and may, in its sole discretion and with
prompt notice to ALZA, amend, alter or change, the terms and conditions of
sale and/or the product warranty.
5.7 Training. ENACT shall provide to ALZA training sessions for
--------
ALZA's NAMs and other sales representatives at locations specified and provided
for by ALZA. Each party shall be responsible for such expenses and costs that
it incurs for such training sessions, including training materials,
transportation costs, facilities, etc.
5.8 Pharmacoeconomic Support. ENACT will provide ALZA, at ENACT's
------------------------
expense, pharmacoeconomic and outcomes support in ALZA's promotional efforts
hereunder. Pharmacoeconomic support shall include, without limitation,
development of customized protocols and analysis of Product and Services data,
as requested by Payers. ENACT will allow ALZA to have input into the
development of any pharmacoeconomic studies relating to the Products and
Services and shall provide ALZA with access to the results of any such studies.
5.9 Clinical Studies. ENACT shall be responsible for conducting any
----------------
clinical studies necessary or desirable in connection with the Products and
Services and shall provide ALZA with copies of all clinical publications and
reports promptly as such publications and reports become available.
5.10 Sales Representative in Territory. [*]. After the first three
---------------------------------
years and six months of this Agreement, ENACT and/or its qualified designated
representative shall promote the Products and Services to prescribers in a
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
6
<PAGE>
manner consistent with commercial opportunity and practice. ENACT will provide
to ALZA copies of any agreements reached with primary sales representatives for
the Products and Services in the Territory during the term of this Agreement.
5.11 Manufacturing. ENACT represents and warrants that the Products
-------------
will be manufactured in accordance with Good Manufacturing Practices. ENACT
shall maintain a secured source for the manufacture of the Products with
sufficient capacity to meet projected sales forecasts and shall maintain
sufficient inventories of the Products to meet projected sales forecasts.
5.12 Regulatory Compliance. ENACT represents and warrants that ENACT
---------------------
has obtained all applicable governmental and regulatory approvals for the
promotion, sale and use of the Products and Services in the Territory and that
ENACT will maintain such approvals and such other approvals as may become
necessary during the term of this Agreement and will comply with all laws and
regulations applicable to the packaging, labelling, use, promotion and sale of
the Product and Services. In furtherance and not in limitation of the
foregoing, ENACT shall prepare all technical, advertising and selling
information and literature concerning the Products and Services in full
compliance with all applicable laws and regulations, including but not limited
to any applicable United States Food and Drug Administration guidelines
concerning promotional materials, and shall be solely responsible for complying
with all applicable pharmacovigilance requirements.
5.13 Provision of Services. Throughout the term of this Agreement,
---------------------
ENACT will diligently perform the Services, including, without limitation,
customizing data reports upon the reasonable demand of Payers and prescribers
and providing periodic newsletters to Payers, prescribers and subscribers to the
Services. In addition, ENACT will provide sufficient operational support in
order to meet the foregoing obligations. ENACT will develop a back-up data
storage site for use in providing the Services in the event of an emergency at
the primary data storage site for the Services.
5.14 Distribution and Customer Service. ENACT shall have the sole
---------------------------------
responsibility for Product warehousing and distribution, processing, invoicing
and collection of customer orders for the Products and Services, inventory,
receivables and handling customer service activities, either directly or through
its designated or qualified representatives. ENACT shall maintain a toll-free
customer telephone line available to ENACT's customers during ENACT's regular
business hours.
5.15 Other Assistance. Upon ALZA's reasonable request, ENACT shall
----------------
provide ALZA with such other sales, engineering and technical assistance and
training regarding the Products and Services as may be reasonably necessary to
promote the Products and Services to Payers in the Territory.
6. COMMISSIONS.
-----------
6.1 Accrual and Payment of Commissions.
----------------------------------
(a) Beginning on the Effective Date and continuing until this
Agreement is terminated, ENACT shall pay ALZA [*]
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
7
<PAGE>
[*] subject to the adjustments set forth below.
(b) [*].
(c) Commissions due pursuant to this Section 6 shall be paid by
ENACT to ALZA on or before fifteen (15) days after the last day of each
fiscal quarter and in a manner and in amounts that are consistent with the
timing of ENACT's revenue recognition policy, attached hereto as Exhibit
-------
"D," which shall be in accordance with generally accepted accounting
----
principles and which is subject to change by mutual agreement of ENACT and
ALZA. ALZA acknowledges that ENACT will recognize, in conformance with
generally accepted accounting principles, revenue for Services over the
terms of the Services provided. Accompanying each payment of commission
hereunder, ENACT shall also deliver a statement setting forth the
information necessary to calculate Net Sales during the period for which
the commissions are being paid and the calculation of the commissions due
by ENACT for such period. ALZA's sole source of compensation for rendering
services on ENACT's behalf pursuant to this Agreement shall be the
commissions payable under this Agreement. Except as otherwise expressly
provided herein, ALZA shall have no right to receive any other compensation
from ENACT for services rendered as a promotional representative or to
receive reimbursement of any expenses or other costs incurred by ALZA in
connection therewith. ENACT shall not, without ALZA's written consent,
accept consideration for any sale or transfer of Products or Services in
the Territory in a form that would not be reflected in Net Sales.
6.2 Ineligible Sales. Notwithstanding any other provisions of this
----------------
Agreement, ALZA shall not be entitled to receive commissions on the following:
[*];
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
8
<PAGE>
[*]
[*].
6.3 Commission Adjustments. There shall be deducted by ENACT from
----------------------
any future commissions earned by, owed to or later accruing to ALZA, an amount
equal to previously paid commissions (or a portion thereof) received by ALZA for
any canceled Services for which a commission has been paid in advance, but only
if ENACT refunds to the purchaser amounts paid by such purchaser in advance and
only if such cancellation is not a result of ENACT's nonperformance under the
applicable service agreement. This deduction from or charge against any future
commissions shall be made within the three calendar months immediately following
the event giving rise to the need for the deduction from or charge against
present or future commissions. In the event that no commissions are earned by
and payable to ALZA within such three calendar month period, ALZA shall
reimburse ENACT for the full amount of such deduction or charge within thirty
(30) days of the end of such three calendar month period.
6.4 Right of Audit. ENACT shall maintain accurate records of (a)
--------------
marketing expenses incurred in compliance with Section 5.3 hereof, and (b) Net
Sales of Products and Services in the Territory, the dates of sale, the price of
the Products and Services sold, and other information relating to discounts,
cancellations and the like. To ensure compliance with the terms of this
Agreement, ALZA shall have the right to have an inspection and audit of all the
relevant accounting and sales books and records of ENACT conducted by an
independent audit firm reasonably acceptable to both parties, and any such
inspection and audit shall be conducted during regular business hours at
ENACT's offices and in such a manner as not to interfere with ENACT's normal
business activities. ENACT agrees to cooperate fully with any such audit. In
no event shall audits be made hereunder more frequently than every six (6)
months. Such audit firm shall present to ENACT and ALZA a confidential summary
of its conclusions as to what marketing expenses have been incurred by ENACT
and whether commissions paid are sufficient under this Agreement, and such
audit firm shall keep confidential all information disclosed or made available
to it by ENACT in the investigation. If such inspections should disclose any
underreporting of commissions, ENACT shall promptly pay ALZA such amount,
together with interest thereon at the rate of 1-1/2% per month or the highest
interest rate allowed by law, whichever is lower from
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
9
<PAGE>
the date on which such amount became due, plus the cost of the audit,
including, without limitation, the fee of the independent audit firm. If an
inspection does not disclose any underreporting of commission in excess of
five percent (5%) over the course of the applicable audit period or is
requested solely for purposes of verifying marketing expenses, ALZA shall bear
the cost of the audit.
7. SALES OF PRODUCTS AND SERVICES. ENACT shall accept and reject orders
------------------------------
for the purchase of the Products and Services at its sole discretion. ENACT
shall not have any obligation to ALZA to accept any purchase order for Products
and Services and shall not have any liability to ALZA for any rejection,
cancellation or other action taken by ENACT with respect to a purchase order;
provided ENACT acts in good faith and in a manner consistent with its other
obligations under this Agreement.
8. PROPRIETARY RIGHTS AND CONFIDENTIAL INFORMATION.
-----------------------------------------------
8.1 Use and Ownership of Proprietary Rights. Ownership and all
---------------------------------------
right, title and interest in and to any trademarks, trade names or service marks
relating to the Products and Services are and shall remain vested solely in
ENACT. ENACT grants to ALZA a non-exclusive, limited license to use ENACT's
trademarks, trade names, service marks and logos solely to identify ALZA as a
promotional representative of ENACT in the Territory. ALZA acknowledges the
ownership of ENACT in the trademarks, trade names and service marks and agrees
to use reasonable efforts to preserve ENACT's rights in such proprietary rights.
ALZA acknowledges that ALZA's utilization of such trademarks, trade names and
service marks will not create any right, title or interest in or to such
proprietary rights by ALZA, and shall inure to the benefit of ENACT. ALZA shall
provide to ENACT, at no cost to ENACT, examples of its use of ENACT's
trademarks, trade names, service marks and logos, shall use such proprietary
rights in a manner which conforms with the standards set by ENACT and shall
modify such use if reasonably requested by ENACT. ALZA shall not adopt any
trademarks, trade names or service marks which are confusingly similar to the
trademarks, trade names or service marks used by ENACT to sell or assist in the
sale of its Products and Services.
8.2 Confidentiality of Information. Each party hereto acknowledges
------------------------------
that, in the course of promoting the Products and Services and performing its
duties under this Agreement, it may obtain information relating to the other
party and the products of the other party which it knows or has reason to know
is of a confidential and/or proprietary nature ("Confidential Information").
Such Confidential Information may include, but is not limited to, minimum
price guidelines, future product releases, trade secrets, know-how,
inventions, techniques, processes, programs, schematics, software source
documents, data, pricing and discount schedules, customer lists, financial
information and sales and marketing plans. Each party hereto shall keep and
hold such Confidential Information in the strictest confidence, and shall not
use such Confidential Information for any purpose, other than as may be
reasonably necessary for the performance of its duties pursuant to this
Agreement, without such other party's prior written consent. No party shall
disclose any Confidential Information to any person or entity, other than to
its employees or consultants who are bound by obligations of confidentiality
at least as stringent as those set forth in this Agreement as may be
reasonably necessary for purposes of performing its duties hereunder, without
such other party's prior written consent. The duty to protect the other
party's
10
<PAGE>
Confidential Information expires three years from the date of disclosure of
such Confidential Information. The obligations of this paragraph shall survive
the termination of this Agreement.
9. TERM AND TERMINATION.
--------------------
9.1 Finite Term. This Agreement is effective as of the Effective
-----------
Date and shall expire and terminate 5 years and 6 months following the Effective
Date, unless renewed by mutual consent of both parties for such further term as
the parties may determine; provided, however, for each month that the launch and
commencement of commercial sales of the Products and Services in the Territory
is delayed after November 1, 1995, the date of termination under this Section
9.1 shall be extended for an additional month.
9.2 ALZA Termination Without Cause. ALZA may terminate this
------------------------------
Agreement at any time and for any reason, without cause and without penalty and
without compensation of any kind except as expressly set forth herein, effective
270 days after delivery of written notice of termination to ENACT if such notice
is given within three years of the Effective Date of this Agreement; otherwise
such termination shall be effective 180 days after delivery of such notice to
ENACT.
9.3 Immediate Termination for Cause by ENACT. Notwithstanding the
----------------------------------------
foregoing, upon the occurrence of any of the following events, ENACT may
terminate this Agreement for cause immediately by giving to ALZA written notice
of such termination:
9.3.1 ALZA materially breaches or defaults in any of the terms or
conditions of this Agreement and such breach or default is not corrected or
rectified to the reasonable satisfaction of ENACT within 90 days following
notice of breach or default from ENACT.
9.3.2 Any general assignment by ALZA for the benefit of
creditors, or admission in writing of its inability to pay its debts as they
become due, or filing of a voluntary petition in bankruptcy, or adjudication
as a bankrupt or insolvent, or filing by ALZA of any petition or answer
seeking for itself any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief from creditors, or filing of any
answer admitting or failing to deny the material allegations of a petition
filed against it for any such relief, or seeking or consenting to or
acquiescing in the appointment of any trustee, receiver or liquidator of
itself or all or substantially all of its properties.
9.4 Immediate Termination for Cause by ALZA. Notwithstanding the
---------------------------------------
foregoing, upon the occurrence of any of the following events, ALZA may
terminate this Agreement immediately by giving ENACT written notice of
termination:
9.4.1 ENACT materially breaches or defaults in any of the
terms or conditions of this Agreement (other than as provided in Section
9.4.2) and such breach or default is not corrected or rectified to the
reasonable satisfaction of ALZA within 90 days following notice of breach or
default from ALZA.
11
<PAGE>
9.4.2 ENACT fails to make a payment when due to ALZA under this
Agreement and such failure to pay is not rectified to the reasonable
satisfaction of ALZA within 30 days following notice of failure to pay from
ALZA.
9.4.3 ENACT and its designated representatives do not diligently
promote and market the Product.
9.4.4 Except as otherwise agreed upon by ENACT and ALZA in
writing, ENACT and its designated representative do not achieve, through direct
detailing to allergy, pulmonary and other appropriate prescribing physicians, a
minimum of 30,000 direct details in the Territory each fiscal quarter during the
first three years and six months of this Agreement; provided, however, if the
number of details achieved in a fiscal quarter is between 15,000 and 30,000 in
the Territory, ENACT shall have the immediately following two fiscal quarters to
makeup any deficiency in a given quarter such that the average of all three
quarters is at least 30,000 direct details in the Territory.
9.4.5 Any general assignment by ENACT for the benefit of
creditors, or admission in writing of its inability to pay its debts as they
become due, or filing of a voluntary petition in bankruptcy, or adjudication as
a bankrupt or insolvent, or filing by ENACT of any petition or answer seeking
for itself any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief from creditors, or filing of any
answer admitting or failing to deny the material allegations of a petition
filed against it for any such relief, or seeking or consenting to or
acquiescing in the appointment of any trustee, receiver or liquidator of
itself or all or substantially all of its properties.
9.4.6 ENACT materially defaults under the terms of the Loan
Agreement dated August ___, 1995 between ENACT and ALZA, and such default is not
cured pursuant to the terms of the Loan Agreement.
9.5 Post-Termination Marketing and Other Obligations. Following
------------------------------------------------
notice of intent to terminate pursuant to Sections 9.2, 9.3 or 9.4 of this
Agreement, ENACT shall pay to ALZA, in accordance with the payment periods set
forth in Section 6 hereof, commissions as determined pursuant to Section 6.1 for
such remaining period(s), if any, up to the effective date of termination.
ENACT shall have the right after the effective date of termination of this
Agreement to deal with, and solicit orders from, any and all persons and
entities, including Payers who dealt with ALZA, without any liability of any
kind to ALZA, except as expressly provided herein. ALZA shall, within 30 days
after termination of this Agreement, provide to ENACT a list of all Payers, with
their address, that ALZA contacted in the course of its promotional activities
hereunder.
9.6 Post-Termination Payment. Following termination of this
------------------------
Agreement pursuant to Section 9.1 or termination of this Agreement for cause by
ALZA pursuant to Section 9.4, and until the earlier of (i) the date cumulative
commission payments to ALZA under this Agreement equal [*] million or (ii) the
date on which post-termination commissions paid pursuant to this Section 9.6
shall have been paid for 15 years, ALZA shall be entitled to receive a [*] based
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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upon Net Sales of Products and Services in the Territory, including any
renewals of the Services in the Territory, subject to the payment conditions
and adjustments set forth in Article 6 hereof; provided, however, that in the
event ENACT has offered in writing to ALZA to extend the term of the Agreement
under Section 9.1 for an additional two-year term on the terms set forth in
this Agreement (including, without limitation, the same commission and payment
structure, the same commitment of NAM support at the same level as is required
immediately prior to the time of renewal, and the right to receive the same
post-termination payments at the end of such renewal period), and ALZA has
rejected such an offer, no post-termination payment shall be due under this
Section 9.6. During the term of this post-termination payment, all obligations
of ENACT relating to the payment of commissions hereunder, including without
limitation, Sections 6.1, 6.2, 6.3 and 6.4, shall remain in full force and
effect.
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10. [*]
11. WARRANTY OF NON-INFRINGEMENT. ENACT represents and warrants that, to
----------------------------
ENACT's knowledge after conducting a reasonable investigation, ENACT has
sufficient title and ownership of all patents, trademarks, service marks,
tradenames, copyrights, trade secrets, proprietary rights and processes
necessary for the manufacture, use and sale of the Products and Services and
that the manufacture, use and sale of the Products and Services, will not
infringe on the proprietary rights of any third party.
12. LIMITATION OF REMEDY. Neither party hereto shall have any claim
--------------------
against the other for compensation or otherwise with regard to this Agreement or
the promotional representation created hereby, whether in contract, in tort,
under any warranty or otherwise, either during the term of this Agreement or
after its termination, except as expressly provided herein. The remedies for
commissions on termination set forth in Section 9.6 are exclusive remedies,
and any liability of a party hereto, whether in contract, in tort, under any
warranty or otherwise, with respect to this Agreement, or anything done in
connection with the promotional representation created hereby including, but
not limited to, the performance or breach hereof or the development,
manufacture, acceptance or rejection of orders for, sale and delivery of
Products and Services, shall not, except as expressly provided herein, exceed
or in any way differ from the compensation provided for in this Agreement.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
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13. LIMITATION OF LIABILITY. Except as expressly provided herein, neither
-----------------------
party hereto shall, by reason of the termination of this Agreement or otherwise,
be liable to the other party for any special, incidental or consequential
damages such as, but not limited to, compensation or damages for loss of present
or prospective profits or revenues, loss of actual or anticipated commissions on
sales or anticipated sales, or expenditures, investments or commitments made in
connection with the establishment, development or maintenance of the promotional
representation created by this Agreement or in connection with the performance
of obligations hereunder.
14. INDEMNIFICATION. ENACT shall indemnify, defend and hold ALZA and its
---------------
officers, directors, agents and employees harmless from and against any and all
claims, liabilities, demands, damages, money judgments and costs and expenses
(including reasonable attorneys' fees) of any kind arising from or relating to
the testing, manufacture, marketing, packaging, distribution, storage, handling,
sale or use of Products or Services, including, without limitation, any product
liability claims and any claim against ALZA for patent or trademark infringement
in connection with the promotion of the Products and Services, excepting only
any such claims by a third party that result directly from a breach by ALZA of
its obligations under this Agreement. ALZA shall permit ENACT's attorneys, at
ENACT's discretion and cost, to handle and control the defense of any claims and
suits as to which ALZA may be entitled to indemnity hereunder, and ALZA agrees
not to settle any claims or suits without the prior written consent of ENACT.
ALZA shall indemnify, defend and hold ENACT and its officers, directors, agents
and employees harmless from and against any and all claims, liabilities,
demands, damages, money judgments and costs and expenses (including reasonable
attorneys' fees) of any kind arising from or relating to any claims by a third
party that result directly from ALZA making any misrepresentations with respect
to the Products and Services by contradicting information set forth in written
instructional materials and the product warranty furnished by ENACT to ALZA.
ENACT shall permit ALZA's attorneys, at ALZA's discretion and cost, to handle
and control the defense of any claims and suits as to which ENACT may be
entitled to indemnity hereunder, and ENACT agrees not to settle any claims or
suits without the prior written consent of ALZA.
15. GENERAL PROVISIONS.
------------------
15.1 [*].
15.2 No Waiver. The failure of either party to enforce at any time or
---------
for any period any of the provisions of this Agreement shall not be construed to
be a waiver of those provisions or of the right of that party thereafter to
enforce each and every
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provision hereof.
15.3 Return of Property. Promptly upon the termination of this
------------------
Agreement, each party hereto shall turn over to the other party all Confidential
Information and all other information and material, including, without
limitation, all samples, pamphlets, catalogs, booklets and other technical
advertising data and literature concerning such other party and/or its products,
and all copies thereof, in its possession, custody or control; provided,
however, that a party shall be entitled to retain one set of all Confidential
Information for the sole purpose of monitoring such party's obligations under
Section 8.2 hereunder.
15.4 Prohibitions. Neither party hereto shall enter into any
------------
agreement, contract or arrangement with any government or government
representative or with any other person, firm, corporation, entity or enterprise
imposing any legal obligation or liability of any kind on the other party
hereto. Without limiting the generality of the foregoing, neither party hereto
shall sign the other party's name to any commercial paper, contract or other
instrument and neither shall contract any debt or enter into any agreement,
either express or implied, binding such other party to the payment of money
and/or in any other regard.
15.5 Independent Contractor. Each of ENACT and ALZA shall be
----------------------
independent contractors in all matters relating to this Agreement. Neither
party shall be deemed an agent for the other for any purposes and neither shall
have power or authority, whether apparent, actual, ostensible or otherwise, to
bind or commit the other in any way. Neither party hereto or its employees
shall be deemed to be or act as employees of the other party for any purpose,
including, but not limited to, under the meaning or application of any federal,
state or local unemployment insurance laws, social security laws, workers'
compensation or industrial accident laws or under any other laws or regulations
which would or might impute any obligation or liability to the other party
hereto by reason of any employment relationship.
15.6 Notices. All notices which any party to this Agreement may be
-------
required or may wish to give may be given by addressing them to the other party
at the addresses set forth below by: (a) personal delivery, (b) by commercial
overnight courier with written verification of actual receipt, (c) by registered
or certified mail, or (d) by facsimile with receipt confirmed:
If to ALZA: ALZA Corporation
950 Page Mill Road
P.O. Box 10950
Palo Alto, California 94303-0802
Attention: Vice President and General Counsel
If to ENACT: Enact Health Management Systems
421 Jacaranda Lane
Palo Alto, CA 94306
Attention: President
If so mailed or otherwise delivered, such notices shall be deemed and presumed
to have been given on the earlier of the date of actual receipt or three (3)
days after mailing or authorized form of delivery.
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15.7 Governing Law. This Agreement (and any other documents referred
-------------
to herein) shall in all respects be interpreted, enforced and governed by and
under the laws of the State of California applicable to instruments, persons and
transactions which have legal contacts and relationships solely within the State
of California. The language of this Agreement shall be construed as a whole
according to its fair meaning, and not strictly for or against either of the
parties.
15.8 Binding Arbitration. Any claim, dispute or controversy arising
-------------------
out of or in any way relating to this Agreement or to the promotional
representative relationship created hereby, or the enforcement or alleged
infringement, interference or breach of any related right or obligation of the
parties hereto, shall be submitted to binding arbitration by the American
Arbitration Association in accordance with the commercial rules then in effect
for that Association. The arbitration shall be conducted in San Mateo or Santa
Clara County, California. Notwithstanding this provision and the agreement
between the parties to submit their disputes to binding arbitration, nothing in
this Agreement shall prevent either party from seeking injunctive relief (or any
other provisional remedy) from any court having jurisdiction over the parties
and the subject matter of their dispute. The prevailing party in any such
arbitration or in any action at law or suit in equity relating to this Agreement
shall be paid by the other party a reasonable sum for attorneys' fees and
expenses of such prevailing party.
15.9 Assignment. Neither party shall transfer, pledge or assign this
----------
Agreement or any part hereof, interest herein, obligation hereunder or
commissions or compensation due to it hereunder without obtaining in each
instance the prior written consent of the other; provided, however, that ALZA
may assign its rights to any affiliate of ALZA without the consent of ENACT.
15.10 Integration/Modification/Entire Agreement. This Agreement
-----------------------------------------
constitutes the entire agreement and final understanding of the parties with
respect to the subject matter hereof and supersedes and terminates any and all
prior and/or contemporaneous negotiations, representations, understandings,
discussions, offers and/or agreements between the parties, whether written or
verbal, express or implied, relating in any way to the subject matter hereof.
This Agreement is intended by the parties to be a complete and wholly integrated
expression of their understanding and agreement, and it may not be altered,
amended, modified or otherwise changed in any way except in writing.
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15.11 Survivability. The provisions of Sections 6.4, 8.2, 9.5, 9.6,
-------------
14, 15.1, 15.3 and this Section 15.11 shall survive the termination for any
reason of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of August __, 1995 (the "Effective Date").
ENACT HEALTH MANAGEMENT SYSTEMS ALZA CORPORATION
By: _____________________________ By: ___________________________
Title: __________________________ Title: ___________________________
Date: ___________________________ Date: ___________________________
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EXHIBIT A
---------
[*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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EXHIBIT B
---------
[*]
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RESPECT TO THE OMITTED PORTIONS.
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EXHIBIT C
---------
[*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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EXHIBIT D
---------
[*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
Exhibit 10.19
DEVELOPMENT AND MARKETING AGREEMENT
THIS DEVELOPMENT AND MARKETING AGREEMENT ("Agreement") is made and
entered into as of July 25, 1997 (the "Effective Date") by and between ENACT
Health Management Systems ("ENACT"), a California corporation with a principal
place of business at 1975 West El Camino Real, Suite 306, Mountain View,
California 94040, and LifeScan, Inc. ("LifeScan"), a California corporation with
a principal place of business at 1000 Gibraltar Drive, Milpitas, California
95035-6312.
RECITALS
--------
LifeScan and ENACT intend to cooperate to develop and expand the market for
diabetes care by employing innovative new approaches to remote patient
monitoring, reporting, and disease management. The parties intend in
particular, to improve the lives of persons with diabetes, to increase
LifeScan's market share and to promote adoption of ENACT's health reporting
system.
ENACT has developed products and information services for the management of
chronic medical conditions; ENACT has developed an electronic reporting
methodology currently embodied in a device referred to as "Reporter", and on
line health reporting system ("Care Central") that allows individuals with
diabetes systems to transmit monitored data over phone lines or other electronic
networks to a centralized database/records repository; authorized persons are
able to access the repository to receive health status information via fax,
electronic network, or mail;
LifeScan desires to develop, market and distribute various products and
services based on Reporter and Care Central throughout the world to health care
providers and patients involved in managing diabetes, and is willing to make
certain purchase and other commitments to ENACT. In consideration of the
foregoing, the parties agree as follows:
1. Definitions.
1.1 "Affiliate" means any person that is directly or indirectly
controlled by, under common control with or that controls the person with which
it is affiliated. For purposes of this definition, control will be deemed to
exist where (a) a person has the ability to elect a majority of the directors,
trustees (or other managers) of such other person; (b) a person is a general
partner of such other person; or (c) a person directly or indirectly holds (or
has power to vote) more than forty percent (40%) of the voting equity interests
of such other person.
1.2 "Care Central" means ENACT's electronic records repository,
database, and communications center(s) used for the receipt, storage, and
electronic delivery of monitored End User medical data including data from
LifeScan Diabetes Systems, as further described in Exhibit G. "Care Central" is
---------
a service mark of ENACT.
- --------------------------------------------------------------------------------
CONFIDENTIAL
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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1.3 "Care Central Services" means the services offered by ENACT
hereunder to receive, store, and report data and derivations thereof for
applications in diabetes management utilizing the Reporter and ENACT's Care
Central as described in Exhibit D.
---------
1.4 "Diabetes System" means any device that measures and stores blood
glucose and/or other diagnostic readings and measurements (all of which are
directly related to diabetes monitoring) and that is capable of downloading such
measurements to another device or system.
1.5 "ENACT Interface" means the circuit design, software protocols,
and other technical information and devices, used to connect remote LifeScan
medical monitors to Care Central, whether embodied in a separate device such as
a Reporter or embedded in a medical device.
1.6 "End User" means the individual person whose Diabetes System is
connected by a Reporter to Care Central.
1.7 "End User Enrollment" or in the past tense "Enrolled" means the
establishment in Care Central of a data record for an End User for one year, or
for a period mutually agreed upon by ENACT and LifeScan for specific programs,
for the purpose of providing Care Central Services for a fee.
1.8 "End User Record" means the diabetes related data measurements
and other collected information for a single End User that are stored in Care
Central and associated with that End User.
1.9 "Exclusive Period" shall have the meaning set forth in
Section 3.1.
1.10 "Intellectual Property Rights" means (i) all United States and
foreign letters patent and applications for letters patent, industrial models,
industrial designs, utility models, certificates of invention, and other indicia
of invention ownership, including any such rights granted upon any reissue,
division, continuation or continuation-in-part applications now or hereafter
filed ("Patent Rights"); (ii) all trade secret rights arising under the laws of
any jurisdiction; (iii) all United States and foreign semiconductor mask work
rights and registrations for such rights; and (iv) all copyright rights and all
other literary property and author rights, whether or not copyrightable, and all
copyrights and copyrighted interests, including any renewals thereof but will
not include any rights in any trademarks, trade names, service marks, logos and
the goodwill associated therewith.
1.11 "Products and Services" means Reporters and Care Central
Services.
1.12 "Product Warranty" means the warranty for Reporters and Care
Central Services described in Section 15 of this Agreement.
- --------------------------------------------------------------------------------
CONFIDENTIAL
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1.13 "Reporter" (or "Product") means the device developed by ENACT
that interfaces a LifeScan Diabetes System to a telephone line or electronic
network and transmits data to the Care Central database. "Reporter" includes
the initial Reporter as specified in Exhibit C and functional equivalents
---------
thereof developed by ENACT.
1.14 "Territory" means the United States, Canada and such additional
countries of the world as the parties agree to include pursuant to the
provisions of Section 3.5.
2. Pre-Commercial Activities; Pilot Programs; Payments
2.1 LifeScan's Pre-Commercial Responsibilities. In order to rapidly
------------------------------------------
and appropriately identify market opportunities and to effectively prepare
Products and Services for use with LifeScan Diabetes Systems, prior to
[*] (other than the actions provided for in Section 2.1.6), LifeScan will:
2.1.1 identify market segments and applications for Products and
Services,
2.1.2 conduct market research and pricing analyses,
2.1.3 [*],
2.1.4 perform market pilot studies as appropriate,
2.1.5 prepare marketing programs and undertake commercial
launches of such Products and Services determined to be commercially viable by
LifeScan in its sole and absolute discretion, and
2.1.6 [*].
LifeScan will regularly advise ENACT of the status and timing of its
actions hereunder.
2.2 ENACT's Pre-Commercial Responsibilities. Prior to LifeScan's
----------------------------------------
commercial sales of Products and Services, and until [*], ENACT will support
LifeScan's activities in Section 2.1. Specifically ENACT will:
2.2.1 [*].
2.2.2 Manufacture [*] pilot-production Reporter units,
including procuring materials and building product tooling, test and quality
fixturing as required.
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CONFIDENTIAL
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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2.2.3 Develop ENACT's Care Central Services for LifeScan's
identified markets, including making reasonable additions and/or modifications
to reports, delivery methods, enrollment forms, and other materials required to
support the commercial programs.
2.2.4 [*].
2.3 Milestone Payments to ENACT. In consideration of ENACT's Pre-
----------------------------
Commercial efforts in Section 2.2, and in consideration of LifeScan's Exclusive
Interface Rights under this Agreement, LifeScan agrees to pay ENACT One Million
Eight Hundred Thousand dollars ($1,800,000.00) in milestone payments, subject to
the satisfaction of the conditions set forth in each such milestone provision
below, as follows:
2.3.1 [*] Dollars [*] for certain of ENACT's development efforts
through the date of this Agreement, which has been paid, coincident with an
order for [*] pilot production Reporter units.
2.3.2 [*] Dollars [*] within ten (10) days after signing of this
Agreement by both parties in consideration of the development efforts through
the date of this Agreement and for [*] pilot production units;
2.3.3 [*] Dollars [*] for providing the Care Central Services
described in Section 2.2.4 at any time after completion of the trials described
in Section [*], but in any event prior to [*], unless such trials shall not have
been completed as of such date due to material non-performance or breach on the
part of ENACT.
3. Exclusivity, New Products, Distribution Rights.
3.1 Exclusive Interface Rights; Rights of LifeScan to Contract with
---------------------------------------------------------------
Others. In recognition of the efforts and funding provided by LifeScan
- ------
hereunder, ENACT hereby grants to LifeScan, and LifeScan hereby accepts, (i) the
exclusive right during the Exclusive Period, as defined below, to market and
distribute Products and Services for use with Diabetes Systems in the Territory;
and (ii) Exclusive Interface Rights during the Exclusive Period for Diabetes
Systems within the Territory. "Exclusive Interface Rights" means that ENACT
shall not offer or provide or agree to offer or provide an ENACT Interface (or
any similar device) for Diabetes Systems manufactured by or for any other
entity. LifeScan shall have the right to sell products and/or services that are
competitive with the Products and Services but during the Exclusive Period
LifeScan shall (i) not itself transfer or solicit End Users to transfer from the
Products and Services to competitive products and services, except upon the
request of such End Users, and (ii) notify ENACT in writing if it intends to
sell competitive products and services. "Exclusive Period" shall mean the period
commencing on the Effective Date and continuing for each subsequent full
calendar year during the term of this Agreement if LifeScan has met the minimum
End User Enrollments specified under "Exclusive Minimums" on Exhibit E for the
---------
prior calendar year. During any calendar year ENACT may request that LifeScan
advise it as to whether LifeScan
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expects to meet such minimums for such calendar year, and LifeScan will so
advise ENACT in writing. Upon any written notice from LifeScan advising ENACT
that it will not meet such minimum End User Enrollments, ENACT shall have the
sole option to terminate the Exclusive Period. Notwithstanding anything to the
contrary in this Agreement, nothing in this Agreement shall restrict LifeScan's
absolute freedom to operate in the general field of telemedicine, with or
without partners and whether or not such operation is competitive with the sale
of Products and Services. For the avoidance of doubt, such freedom is explicitly
unaffected by whether or not LifeScan has met the Exclusive Minimums for the
prior calendar year.
3.2 Compatibility with New LifeScan Products.
----------------------------------------
3.2.1 ENACT agrees that during the term of this Agreement,
LifeScan shall be entitled to receive any Products and Services modified for
those new models of LifeScan Diabetes Systems that have data ports. Such right
shall be exclusive during the period of LifeScan's exclusivity under Section 3.1
for the functionality provided by the Products and Services and nonexclusive if
LifeScan's rights are nonexclusive hereunder.
3.2.2 [*].
3.3 [*]. If the parties mutually determine to proceed with such a
project, the parties will attempt to negotiate a separate agreement based on
additional commercial development, licensing, purchasing, exclusivity and other
terms mutually acceptable to the parties.
3.4 Additional Products and Services. From time to time ENACT or
--------------------------------
LifeScan may identify additional products or services not contemplated by this
Agreement, but applicable to the diabetes market described herein. If both
parties are interested in offering such products and services, they shall work
cooperatively to include such products or services under this Agreement, with
such changes to the Agreement as may be appropriate.
3.5 [*]
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CONFIDENTIAL
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[*].
3.6 Option on Non-Invasive Diabetes Systems. [*].
---------------------------------------
4. LifeScan's Commercial Marketing Activities.
------------------------------------------
4.1 Marketing and Distribution Rights. Subject to the terms and
---------------------------------
conditions of this Agreement, ENACT hereby grants to LifeScan, and LifeScan
hereby accepts, the exclusive right to market and distribute Products and
Services for Diabetes Systems within the Territory. LifeScan will have
exclusive responsibility, except as described in the next sentence and in
Section 4.5, to accept orders for Products and Services from customers, and to
perform physical distribution thereof as required. ENACT will also have the
right to promote Products and Services, but will direct customers to LifeScan
for purchase and fulfillment. LifeScan and ENACT agree to cooperate and bear
their own costs in joint marketing efforts, and if the parties mutually
determine that it is preferable for orders to be placed directly with ENACT,
ENACT would agree to accept such orders. LifeScan may distribute through a sub-
distributor only with ENACT's prior written consent, which shall not be
unreasonably withheld, provided such sub-distributor acknowledges and agrees to
the territorial restrictions herein and the obligations set forth in
Sections 4.9, 4.10 and 4.12 of this Agreement.
- --------------------------------------------------------------------------------
CONFIDENTIAL
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4.2 Market Plan. LifeScan shall be primarily responsible with input
-----------
from ENACT for developing and revising a marketing plan for the Products and
Services in the Territory in conjunction with LifeScan's Diabetes Systems.
LifeScan shall develop the initial marketing plan within [*] of this Agreement
and shall consult with ENACT in the course of such preparation. LifeScan will
prepare an annual update to the marketing plan including forecasts, resources,
market analysis, and major marketing programs, by [*], and provide copies
thereof to ENACT. In preparing the marketing plan and updates, LifeScan will
seek ENACT's input and share drafts with ENACT to the extent considered
appropriate by LifeScan.
4.3 LifeScan's General Duties. LifeScan shall:
-------------------------
4.3.1 Introduce, promote, solicit and otherwise encourage the use
of the Products and Services by pharmacies, health plans, managed care
organizations, third party payers, physicians, and individual End Users and
others, where economically feasible.
4.3.2 Accept such orders and enroll such End Users in the
Territory,
4.3.3 Devote as much time, attention and skill as may in
LifeScan's judgment be commercially reasonable to properly conduct such
activities,
4.3.4 Cooperate with ENACT as practicable in implementing sales
programs, policies, training, instructions, and response to requests that best
represent the Products and Services and their benefits, and
4.3.5 Bear the entire cost and expense of conducting all of
LifeScan's activities under this Agreement.
4.4 Marketing Materials. LifeScan will develop with cooperation from
-------------------
ENACT the marketing materials necessary to ensure awareness of the Reporter and
Care Central Services among customers. LifeScan agrees to allow ENACT to review
such materials prior to finalization.
4.5 End User Enrollments. It generally shall be the responsibility of
--------------------
LifeScan to register End Users and to maintain (or renew as appropriate) their
Enrollments. If the parties mutually determine that it is desirable for ENACT
to enroll End Users, then in such event ENACT shall charge LifeScan an
enrollment fee appropriate to the application fee as agreed by the parties.
ENACT and LifeScan will cooperate to develop procedures and forms for End User
Enrollment and renewal as appropriate.
4.6 End User Enrollments - Quantities. The annual minimum number of
---------------------------------
End User Enrollments by LifeScan for the Care Central Services are listed in
Exhibit E.
- ---------
The number of enrollments shall be determined by the number of End
Users Enrolled into Care Central on the last day of each calendar year. Should
LifeScan fail to achieve the annual
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minimum Enrollments as set forth in Exhibit E in any calendar year and provided
----------
LifeScan has performed its obligations hereunder in all material respects, then
LifeScan shall not be in default of this Agreement. However, effective at the
end of the calendar year in which such failure occurs, LifeScan's exclusive
rights under Section 3.1 above shall become nonexclusive. Any shortfalls by
LifeScan that are due to ENACT's failure to deliver against LifeScan's accepted
purchase orders, or due to ENACT's failure to provide sufficient capacity for
the enrollment of End Users in a timely manner, shall be credited toward
LifeScan's minimum annual number of End User Enrollments.
4.7 Commercial Launch. LifeScan intends to [*], provided ENACT meets
-----------------
its responsibilities set forth in Sections 2.2 and 5.
4.8 Steering Committee. The parties shall establish a Steering
------------------
Committee which will meet monthly for first twelve months of the term of this
Agreement and quarterly (or as otherwise agreed) thereafter. The Steering
Committee will be comprised of two persons from each party and will be
responsible for communication and oversight of all aspects of the Agreement and
development of business between the parties, including customer feedback and the
marketing strategies and efforts of both parties, including listings of
customers signed-up directly by ENACT.
4.9 No Representations and Warranties Regarding Products. LifeScan
----------------------------------------------------
shall not make any representations, warranties, claims or other descriptions
with respect to the Products and Services except as set forth in ENACT's most
current written specifications therefor and Product Warranty as published by
ENACT for the applicable Products and Services and as may be modified from time
to time by ENACT after written notification to LifeScan.
4.10 Compliance with Law. In marketing the Products and Services,
-------------------
each party shall comply with all applicable laws and regulations.
4.11 Independent Pricing. Nothing in this Agreement shall be
-------------------
construed as restricting in any way LifeScan's discretion in setting the prices
at which it resells Products and Services.
4.12 LifeScan Customer Support. LifeScan agrees to provide first line
-------------------------
direct customer support to assist health care providers, End Users and others to
understand and use the Products and Services, and to respond to customer
problems. ENACT shall provide "second-line" support to LifeScan as provided in
Section 5.4 ("ENACT Customer Support").
5. ENACT's Responsibilities.
------------------------
5.1 Reporter Production and Supply. ENACT shall use reasonable
------------------------------
commercial efforts to develop and produce Products and Services as specified in
Exhibits C and D in sufficient quantities to meet demand as forecasted by
- ----------------
LifeScan. ENACT retains the right to manufacture the Reporter at its own
facilities or to subcontract its manufacturing obligations to a third party,
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provided that all manufacturing, testing and inspection requirements contained
in this Agreement shall apply to such third party provided that ENACT shall
remain liable for all manufacturing obligations so subcontracted.
5.2 Care Central Services. ENACT shall provide various Care Central
---------------------
Services as listed in Exhibit D and as priced in Exhibit A for Enrolled End
--------- ---------
Users using a Reporter. Any additional services not listed on Exhibit D may be
---------
added to this Agreement upon mutual agreement of the parties, in which case
Exhibit D shall be amended, modified or supplemented in writing.
- ---------
5.3 Additions and Modifications. In order to enhance the use of the
---------------------------
Products and Services and the potential market for LifeScan's related products,
ENACT agrees to make reasonable modifications and additions to the Care Central
Services from time to time as recommended by LifeScan. ENACT shall also have the
right to modify Services from time to time, so long as ENACT notifies LifeScan
of such changes and assures that the function of the Services is retained. The
Steering Committee will be responsible for determining and implementing a change
control process to meet the needs of each party.
5.4 ENACT Customer Support. ENACT agrees to provide Product support to
----------------------
LifeScan personnel from 8:00 a.m. Eastern Time to 6:00 p.m. Pacific Time, and
will make customer service personnel available by pager 24 hours per day for
special circumstances. Such assistance shall normally be provided to LifeScan
personnel or to customers directly enrolled by ENACT (provided such direct calls
do not exceed a mutually agreed amount). However, the parties agree to develop
an escalation process for ENACT personnel to address questions or problems by
telephone directly with End Users that cannot be handled by LifeScan. ENACT
support shall not include providing medical advice of any kind.
5.5 Training. Upon one month's advance request, ENACT will provide
--------
training at LifeScan's facilities in Milpitas, CA for designated LifeScan
personnel on the use of the Reporter and Care Central Services. [*].
5.6 End User Record/Maintenance/[*].
----------------------------------
5.6.1 ENACT shall maintain for each enrolled End User a record of
End User information, transmitted readings, and other information as needed to
deliver the Care Central Services provided. Said information shall reside in
ENACT's Care Central database and the parties shall have the same rights of
access to and use of such information, subject to the provisions of Section
5.6.2. ENACT will maintain said information in electronic format for the longer
of three years from receipt of last entry or as otherwise required by applicable
laws.
5.6.2 [*]. Absent a specific
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request by LifeScan, ENACT will provide a reasonable format [*].
5.6.3 [*].
5.7 Expenses. ENACT shall bear the entire cost and expense of
--------
conducting all of ENACT's activities under this Agreement, other than for
payments from LifeScan explicitly provided for herein.
6. Equity Purchase in ENACT. [*].
------------------------
7. Purchase Orders and Forecasts.
7.1 Purchase Orders. LifeScan shall have no obligation hereunder to
---------------
purchase Product from ENACT, except as expressly set forth in official purchase
orders executed on behalf of LifeScan by authorized representatives of LifeScan,
and accepted by ENACT. Except for the Initial Purchase Order, LifeScan shall
not be required to purchase any minimum quantities, or be held responsible for
any restocking fees, or bill backs for not ordering any estimated purchase
volume. Purchase Order(s) will contain the Product description, quantity,
pricing and required delivery dates. ENACT shall within ten (10) days following
receipt, notify LifeScan of its acceptance or rejection of each such Purchase
Order. Once accepted by ENACT the requirements specified in such Purchase
Orders will be firm subject to the variations provided in Section 7.2 below.
LifeScan will issue its Purchase Orders for Products based upon their forecasted
usage. LifeScan will issue subsequent Purchase Orders or Change Orders monthly
to continue a rolling [*] product purchase commitment. No terms and conditions
in purchase orders or any other order documents shall be binding on the parties
except model numbers, quantities, requested delivery dates and destinations, and
prices, all of which shall be consistent with this Agreement.
7.2 Purchase Order Variations and Raw Materials Inventory. From and
-----------------------------------------------------
after the time that LifeScan places purchase orders for more than [*] units per
month and so long as orders continue at such rate, LifeScan may vary its
purchase order quantities and schedules for any specific month from LifeScan's
previous purchase order quantities for such month as follows:
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<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Allowable Allowable Allowable Maximum
Month Prior to Quantity Quantity Quantity Reschedule
Date of Delivery Increases Cancelable Reschedulable Period
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
[*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------
</TABLE>
There will be no cancellation charge for orders canceled within the allowable
time frames and quantities set forth above. Any purchase order quantities
rescheduled pursuant to this Section 7.2 may not subsequently be canceled or
rescheduled by LifeScan without the prior written approval of ENACT. ENACT
shall notify the LifeScan buyer by telephone immediately upon knowledge that any
order quantity exceeds ENACTis capacity constraints and shall within one (1)
week confirm this notification in writing by fax or by letter with the identity
of the limiting factor(s) preventing ENACT from fulfilling the LifeScan order.
[*] Title to all such inventory shall remain in ENACT until such time it is
shipped to LifeScan. Annually LifeScan will negotiate and reimburse ENACT for
reasonable carrying costs associated with maintaining such raw materials in
inventory. At the expiration of this Agreement or during the notice period of
any termination for convenience issued hereunder, ENACT is to attempt to deplete
this inventory. [ * * *]
7.3 Delivery Dates. [*] its customer orders; therefore, ENACT shall
--------------
notify LifeScan of any delay as soon as ENACT is aware of same and shall use its
best efforts to minimize such delay by working reasonable overtime at its own
expense. If ENACT fails to meet LifeScan's delivery schedule on all or any part
of any Purchase Order, then LifeScan may terminate the applicable portion of the
Purchase Order. With respect to the portion of any such Purchase Order not
terminated, if any, the unit price will not change and ENACT will otherwise
continue performance under this Agreement.
7.4 Initial Purchase Order. LifeScan's initial firm Purchase Order
----------------------
specifying quantities and delivery dates will be issued within 45 days after the
Effective Date.
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7.5 Long Term Forecasts. LifeScan shall each month provide ENACT with
-------------------
a non-binding forecast of the anticipated quantity of Product and Services to be
contracted with Supplier over the next twelve (12) month period. Thereafter,
each month during the term of this Agreement, LifeScan will use reasonable
efforts to provide ENACT a rolling twelve (12) month forecast of its usage of
Products and Services. Such forecast shall specify LifeScan's reasonable
estimates of the anticipated quantity of Products and Services required weekly
during the first three (3) months and monthly during the remaining nine (9)
months.
7.6 Services Forecast. At the same time as it places its first
-----------------
commercial order, LifeScan shall provide to ENACT a non-binding forecast of
Enrolled End Users anticipated for the following twelve (12) month period.
After the first commercial shipments as described in Section 2.1.6, LifeScan
shall provide ENACT a monthly non-binding rolling forecast of Enrolled End Users
covering a twelve (12) month period.
8. Pricing, Invoicing, Payment.
---------------------------
8.1 Products and Services. LifeScan shall pay ENACT for each End User
----------------------
Enrollment and each Reporter unit shipped to LifeScan or its designees at prices
to be mutually agreed from time to time in writing, but in no event less than
the minimum prices set forth in Exhibit A for the items listed therein. LifeScan
---------
shall be invoiced for the service fee for one annual Enrollment upon activation
of an End User in Care Central and for each Reporter shipped at the time of
shipping. A separate invoice is required for each payment made hereunder.
Invoices must match the applicable Purchase Order and will be rendered no more
often than semimonthly. Product will be shipped FOB ENACT's facilities in
Northern California.
8.2 Renewals. ENACT will notify LifeScan of upcoming expirations by
---------
submitting its invoice(s) for renewals approximately sixty (60) days prior to
the then applicable expiration date(s). ENACT will handle renewals for
customers that had originally enrolled directly with ENACT.
8.3 Payment Terms. Payment terms are net 30 days after receipt of
--------------
invoice.
8.4 Other. The provisions of this Section 8 shall not apply to the
------
payments described in Section 2.4 for Pre-Commercial activities.
9. Taxes. LifeScan shall pay all taxes, duties, or other amounts, however
-----
designated, which are levied or based upon payments made by LifeScan to ENACT
for Products or Services provided by ENACT, provided that LifeScan shall not be
liable for taxes based upon ENACT's income or net income. If LifeScan provides
a reseller certificate to ENACT verifying that sales taxes are not due upon a
sale to LifeScan, ENACT shall not invoice LifeScan for such taxes, however
LifeScan shall indemnify ENACT for any taxes, including penalties and interest,
which are assessed against ENACT therefor if such reseller certificate is
inaccurate and such inaccuracy is the primary cause for the assessment of such
penalties and interest.
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10. Manufacturing; Quality Assurance Testing; Acceptance.
----------------------------------------------------
10.1 Quality Assurance. Prior to the shipment of any Reporter for
------------------
resale by LifeScan, and prior to the initiation of Care Central Services, ENACT
and LifeScan shall jointly develop test procedures ("QA Test") for the Reporter
and Care Central Services to ensure compliance with the applicable
Specifications. All Reporters shipped to LifeScan by ENACT shall be accompanied
by a certification from ENACT that each such Reporter has passed the applicable
QA Test. Notwithstanding the fact that the Products and Services have
successfully passed the QA test they will continue to be subject to the warranty
obligations in Section 15 and the inspection and remedy provisions of
Section 10.2 At LifeScan's request, ENACT shall provide copies of ENACT's
documentation of QA Tests on any shipped Reporters, and on Care Central
Services.
10.2 Inspections. Acceptance testing, when deemed applicable by
------------
LifeScan, shall be performed by LifeScan in accordance with LifeScan's Quality
Acceptance Procedures within fourteen (14) calendar days after receipt of the
Products. Any discrepancies found during such test period shall be noted in
reasonable detail and if found non-conforming, LifeScan may at its option return
the Products to ENACT freight collect after obtaining a return material
authorization number from ENACT and including such number on the return shipping
label. ENACT shall bear the risk of loss for rejected Reporters, beginning at
such time as they are taken at LifeScan's premises for return delivery. ENACT
shall immediately review the cause of rejection and upon confirmation take
corrective action to eliminate reoccurrence of the non-conformance. ENACT shall
repair or replace any such non-conforming Products and prepay the freight.
Otherwise, after the fourteen (14) day testing period referenced above, the
Products will be considered accepted by LifeScan. Failure to inspect or reject
one shipment shall not constitute a waiver of LifeScan's rights with respect to
any other. "Non-conforming goods" means that the Reporters (a) fail to conform
to the specifications provided in Exhibit C hereto (as amended by the parties in
---------
writing from time to time), (b) are not the model ordered or differ from the
quantity ordered, (c) fail to pass the QA Test and/or (d) are damaged or
reasonably appear to be damaged, except that ENACT shall not be held responsible
for shipping damage given that Products are to be shipped FOB ENACT, unless
damage results from inadequate packaging. LifeScan shall obtain a return
material authorization number from ENACT, which number shall be provided to
LifeScan within twenty-four (24) hours of LifeScan's request (if ENACT accepts
the RMA), before returning Reporters and shall include such number on the
shipping label therefor. This Section 10.2 sets forth LifeScan's sole and
exclusive remedy for rejected Reporters. To the extent rejected Reporters are
examined by ENACT and found to meet the Specifications, LifeScan shall pay all
freight, evaluation, and reshipping charges, and the RMA shall be rescinded.
10.3 Regulatory Standards & On Site Inspections: During the term of
------------------------------------------
this Agreement ENACT must:
10.3.1 Comply with all requirements specified herein and the
Specifications referenced above.
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10.3.1.1 Any changes to the Specifications proposed by
ENACT must be reviewed and approved in writing by LifeScan prior to
implementation. LifeScan is under no obligation to approve any proposed
change(s) to the Specifications.
10.3.1.2 All deviations from the Specifications must be
reviewed and approved in writing by LifeScan prior to shipment of the affected
Product. LifeScan is under no obligation to approve any requested deviation from
the Specifications.
10.4 Quality Improvements. In order to improve yields and the overall
--------------------
quality of the Products produced by ENACT, upon request of LifeScan, ENACT
agrees to actively participate in LifeScan Program for Controlling a Process and
to the extent applicable to request its manufacturing subcontractor to
participate therein. This program will be presented by LifeScan to ENACT's
representative(s) following notification to ENACT that LifeScan would like ENACT
to participate. It consists of the following ten steps:
1. Process Flow Diagram
2. Failure Mode and Effects Analysis
3. Identify Critical "Nodes"
4. Identify Critical Measuring Gauges
5. Run Gaugeability Study
(Gauges R & R)
6. Establish Gauge Control Chart
7. Set-up Data Collection
8. Components of Variance
9. Establish Control Charts
10. Establish "Out of Control" Procedures
11. Record Keeping. LifeScan and ENACT respectively agree (and ENACT agrees
--------------
to cause its manufacturing subcontractor) to maintain complete, clear and
accurate records of information required by governmental agencies for a period
of three years or as required by law, whichever is longer. Each party shall
permit the other party to inspect, at such other party's own expense, records
pertaining to the Reporter and Care Central Services to ensure compliance by the
other party. Any such inspection shall be conducted during regular business
hours and in such a manner as not to interfere with normal business activities
of LifeScan and ENACT.
12. Intellectual Property.
---------------------
12.1 Ownership. Technology, including any know-how, copyrights and
---------
patents therein, developed hereunder solely by Enact (hereinafter "Enact
Technology") shall belong solely to Enact. Technology, including any know-how,
copyrights and patents therein, developed hereunder solely by LifeScan, or its
Affiliates (hereinafter "LifeScan Technology"), shall belong solely to LifeScan.
[*]
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[*].
[*].
12.2 Report Formats. The parties agree that they shall jointly own
--------------
the report formats developed for the delivery of Care Central Services for
diabetes under this Agreement. Each party hereby assigns and agrees to assign
to the other party an undivided co-equal interest in all Intellectual Property
Rights in such report formats developed in the course of this Agreement. ENACT
agrees to file for copyrights for such formats. Each party shall retain sole
ownership of any rights in works pre-existing the date of this Agreement.
12.3 Reservation of Rights. All rights not expressly granted herein
---------------------
are reserved to the owner, and no other licenses are granted herein, by
implication, estoppel or otherwise. Specifically, nothing in this Agreement
shall either expressly or by implication, estoppel or otherwise give either
party any license to the other party's Patent Rights not explicitly granted
herein.
12.4 Notices. Each party agrees to mark products that it provides to
-------
the other party and/or to others, under this Agreement, with appropriate notice
of any patents that cover the Products. Each party agrees to retain and not
remove any patent, copyright, trademark and other proprietary rights notices
which are on the products or documents received from the other party. LifeScan
will have final approval of any report forms for use with the Products and
Services.
13. Trademarks.
----------
13.1 Use of Marks on Products. The Reporters and report forms and
------------------------
other documentation for the Care Central Services provided by ENACT to LifeScan
and its End Users shall contain the ENACT name and trade/service marks ("ENACT
Marks"), as selected from time to time by ENACT, along with LifeScan's name and
trade/service marks or those of LifeScan's Affiliates ("LifeScan Marks"), as
selected from time to time by LifeScan.
13.2 Use of Marks in Marketing by LifeScan. LifeScan agrees to
-------------------------------------
include references to ENACT as the source of the Reporters and Care Central
Services provided by
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ENACT in LifeScan's marketing and promotional materials therefor. ENACT hereby
grants LifeScan a nonexclusive, non-transferable license to use the ENACT Marks
for such purposes subject to such reasonable guidelines on usage of the ENACT
Marks as ENACT may provide to LifeScan from time to time.
13.3 Use of Marks in Marketing by ENACT. ENACT agrees to include
----------------------------------
references to LifeScan Marks in ENACT's marketing and promotional materials for
Reporters and Care Central Services to be used with LifeScan's Diabetes Systems.
LifeScan hereby grants ENACT a nonexclusive, non-transferable license to use the
LifeScan Marks for such purposes subject to such reasonable guidelines on usage
of the LifeScan Marks as LifeScan may provide to ENACT from time to time.
13.4 Approval for Use of Marks. Each party agrees to obtain the prior
-------------------------
written approval of the other party for any marketing or promotional materials
which use the other party's Marks.
14. Term, Termination and Renewal.
-----------------------------
14.1 Term. The initial term of this Agreement shall be from the date
----
of execution through [*]. After such initial term, the Agreement may be renewed
for successive one year terms upon the written agreement of the Parties,
provided that LifeScan has met the number of Exclusive Minimums for each year as
listed in Exhibit E.
---------
14.2 Termination.
-----------
14.2.1 By ENACT. ENACT may terminate this Agreement upon ten
--------
(10) days written notice to LifeScan upon the occurrence of any of the
following:
14.2.1.1 LifeScan has materially breached one or more of
its obligations under this Agreement, including the failure to pay any amounts
owed under this Agreement when due, if such breach is not cured within sixty
(60) days after receipt of written notice thereof; or
14.2.1.2 LifeScan has failed to commercially launch
Products and Services by [*] through no fault of ENACT.
14.2.2 By LifeScan. LifeScan may terminate this Agreement upon
-----------
ten (10) days written notice to ENACT upon the occurrence of any of the
following:
14.2.2.1 ENACT has materially breached one or more of
its obligations under this Agreement if such breach is not cured within sixty
(60) days after receipt of written notice thereof; or
14.2.2.2 ENACT has failed to deliver Reporters and Care
Central Services meeting the Specifications in Exhibits C and D by [*].
----------------
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14.2.3 By Either Party. ENACT or LifeScan may immediately
---------------
terminate this Agreement after giving written notice (i) if the other party
becomes insolvent, or (ii) if the other party shall have a receiver appointed
over the whole or any part of its assets.
14.3 Rights Upon Termination by ENACT. In addition to all rights
--------------------------------
provided under law, upon termination of this Agreement by ENACT pursuant to
Section 14.2.1:
14.3.1 LifeScan's appointment as a distributor for the Products
and Services shall immediately terminate.
14.3.2 Except as set forth in Section 14.3.4, LifeScan shall
immediately cease promoting and distributing Products and Services and shall
discontinue all representations that it is an authorized ENACT representative or
distributor.
14.3.3 LifeScan shall not be entitled to any compensation,
damages, or payments in respect of goodwill or otherwise or for any damages on
account of prospective profits or anticipated sales, and LifeScan shall not be
entitled to reimbursement in any amount for any training, advertising, market
development, investments, leases or other costs that shall have been expended,
in the event of such termination of this Agreement by ENACT. LifeScan hereby
waives its rights under applicable laws for any such compensation,
reimbursement, or damages.
14.3.4 Provided that LifeScan is not offering products and
services that are competitive with Products and Services at that time, ENACT
shall, at its option, permit LifeScan to sell its inventory and/or purchase such
inventory from LifeScan and refund LifeScan's cost. ENACT shall take reasonable
efforts to minimize any further costs.
14.3.5 ENACT will continue for a period of no less than two
(2) years from the date of termination to provide Care Central Services to
persons who were End Users at the date of termination at the then current prices
for such Care Central Services.
14.4 Rights Upon Termination by LifeScan. In addition to all rights
-----------------------------------
provided under law, upon termination of this Agreement by LifeScan pursuant to
Section 14.2.2:
14.4.1 LifeScan may terminate all outstanding purchase orders,
including the Initial Purchase Order.
14.4.2 Notwithstanding the foregoing Section 14.4.1, LifeScan
shall pay for all Reporters shipped by ENACT to LifeScan pursuant to LifeScan
purchase orders before the date of termination, in accordance with the terms
hereof.
14.4.3 ENACT will continue for a period of no less than two
(2) years from the date of termination to provide Care Central Services to
persons who were End Users at the date of termination at the then current prices
for such Care Central Services.
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14.4.4 LifeScan shall take reasonable efforts to minimize
further costs.
15. Warranty; Disclaimer; Consequential Damages; Limitation of Liability.
--------------------------------------------------------------------
15.1 Product Warranty to LifeScan.
----------------------------
15.1.1 (a) For a period of twelve (12) months after delivery of a
Reporter to LifeScan, ENACT warrants the Reporter shall be free of defects in
materials and workmanship, and will conform to the Specifications listed in
Exhibit C. Notwithstanding the foregoing, the warranties provided by ENACT do
- ---------
not apply to any Reporter that has been altered, repaired (other than by ENACT),
or which has been subjected to abuse, misuse, misapplication or negligence of a
person other than ENACT or an agent of ENACT, or accident or disaster, or that
has been damaged due to the failure to return the Reporter in its original or a
functionally equivalent shipping container.
15.1.2 LifeScan shall obtain a return material authorization
number from ENACT (which shall not be unreasonably withheld or delayed by ENACT)
before returning Reporters and shall include such number on the shipping label
therefor. All freight and insurance for the return of Nonconforming Reporters
will be paid by ENACT. Defective Reports shall be repaired or replaced at
ENACT's election. If ENACT can not repair or replace such Reporter within
30 days after receipt from LifeScan, LifeScan shall at its request be credited
or reimbursed based upon the current per unit invoice price for Reporters sold
to LifeScan. The foregoing is LifeScan's sole and exclusive remedy for breach of
the warranty in this Section 15.1 except for LifeScan's rights under
Sections 17.1 and 17.2.
15.2 Services Warranty. ENACT warrants to LifeScan that the
-----------------
transmission interface from the Reporter to Care Central and from Care Central
to health care providers or End Users will conform to generally accepted analog
telephone and data transmission standards, and will not require equipment
different than other standard data transmission devices. ENACT does not warrant
that End User equipment (such as End User facsimile devices) will perform
properly or that the quality of the telephone connection will be adequate or
that access to the database will be uninterrupted. If ENACT fails to provide to
an End User access meeting the requirements of this warranty, LifeScan shall be
entitled to a refund of Reporter and Service fees for such End User. The
foregoing is LifeScan's sole and exclusive remedy for breach of the warranty in
this Section 15.2 except for LifeScan's rights under Sections 17.1 and 17.2.
15.3 Recalls. In the event either party believes or is notified that
--------
a recall, product withdrawal, or field correction to the Reporter may be
necessary and/or appropriate, such party shall notify LifeScan's Vice President
of Quality Assurance and ENACT's President, at the addresses set forth on page
one of this Agreement, of its belief, and the parties shall cooperate with each
other in determining the necessity and nature of appropriate action. In the
event any governmental agency having jurisdiction shall request or order, or if
LifeScan in its reasonable judgment shall determine to undertake, any corrective
action with respect to the Reporters supplied hereunder, including any recall,
customer notice, restriction, change, corrective action or market action or any
change to the Reporters, and the cause or basis of such corrective action is
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<PAGE>
primarily attributable to a breach by ENACT of any of its warranties,
guarantees, representations, obligations or covenants contained herein, then
ENACT shall be liable, and shall reimburse LifeScan for the reasonable costs of
such action including the cost of any Reporter affected thereby whether or not
such particular Reporter shall be established to be in breach of any warranty by
ENACT hereunder.
15.4 Representations and Warranties of ENACT; Audit Rights.
------------------------------------------------------
15.4.1 ENACT represents and warrants to LifeScan that all
Products and Services supplied in connection with this Agreement shall be of
merchantable quality, and free from defects in material and workmanship and
shall be manufactured and provided by ENACT (i) in accordance and conformity
with the Specifications and in compliance with this Agreement and (ii) in
compliance with all applicable federal, state or municipal statutes, laws, rules
or regulations, including those relating to the environment, food or drugs and
occupational health and safety. Without limiting the foregoing, ENACT represents
and warrants that it shall comply or cause its suppliers to comply with all
present and future statutes, laws, ordinances and regulations relating to the
manufacture, assembly and supply of the Products being provided hereunder,
including, without limitation, those enforced by the United States Food and Drug
Administration (including compliance with current good manufacturing practices)
and International Standards Organization Rules 9,000 et seq. ENACT further
represents and warrants to LifeScan that the performance of its obligations
under this Agreement will not result in a violation or breach of, and will not
conflict with or constitute a default under its Articles of Incorporation or by-
laws or any agreement, contract, commitment or obligation to which ENACT or any
of its Affiliates is a party or by which it is bound.
15.4.2 LifeScan shall have the right, upon reasonable notice to
ENACT and during regular business hours, to inspect and audit the facilities
being used by ENACT for production of the Products and Services or cause its
suppliers to permit such inspection and audit to assure compliance by ENACT and
its suppliers with applicable rules and regulations and with other provisions of
this Agreement and to determine ENACT's raw materials and manufacturing costs in
connection with the Products and Services. Such inspections will be limited to
no more than one (1) inspection during any twelve (12) consecutive month period,
with follow-up as requested LifeScan, unless otherwise agreed by ENACT. ENACT
shall within thirty days remedy any deficiencies which may be noted in any such
audit, and the failure by ENACT to remedy any such deficiencies within such
thirty day period shall be deemed as material breach of this Agreement. ENACT
acknowledges that the provisions of this paragraph granting LifeScan certain
audit rights shall in no way relieve ENACT of any of its obligations under this
Agreement, nor shall such provisions require LifeScan to conduct any such
audits.
15.5 Limitation and Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES SET
-------------------------
FORTH IN THIS SECTION 15, ENACT MAKES NO OTHER WARRANTIES RELATING TO THE
PRODUCTS OR SERVICES, EXPRESS, IMPLIED OR STATUTORY, AND EXPRESSLY EXCLUDES ANY
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY OR
NONINFRINGEMENT OF THIRD PARTY RIGHTS.
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16. Limitation of Liability; Waiver and Consequential Damages. NEITHER
---------------------------------------------------------
PARTY WILL BE LIABLE TO THE OTHER PARTY FOR SUCH OTHER PARTY'S INDIRECT,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING LOST
PROFITS) REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, STRICT
LIABILITY, OR OTHERWISE, EVEN IF PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. FOR AVOIDANCE OF DOUBT, THE FOREGOING SHALL NOT RELIEVE EITHER PARTY
OF ANY OF ITS INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 17 TO THE EXTENT
RELATED TO THE INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY
KIND (INCLUDING LOST PROFITS) OF THIRD PARTIES OTHER THAN ANY AFFILIATE OF A
PARTY HERETO.
17. Indemnification.
---------------
17.1 Intellectual Property. At LifeScan's election, ENACT shall save,
---------------------
defend, indemnify and hold harmless LifeScan and its affiliates and their
respective officers, directors, employees, agents, successors and assigns
(collectively, "LifeScan Indemnities") from and against any and all claims,
losses, damages, judgments, costs, awards, expenses (including reasonable
attorney's fees) and liabilities of every kind, including, without limitation,
reimbursement for inventory of Reporters which LifeScan is unable or unwilling
to sell because of such claim (collectively, "Losses") arising out of or
resulting from any claim, suit, action or proceeding of which ENACT shall have
received notice based upon an assertion of infringement of any Intellectual
Property Rights in the Territory by the Reporter and/or Care Central Services.
LifeScan shall cooperate with ENACT in the defense of any such action. ENACT
shall use counsel that is reasonably acceptable to LifeScan. Alternatively,
LifeScan may elect to defend itself against any such claims in lieu of any
indemnification by ENACT under this Section 17.1 in which case ENACT shall be
entitled to maintain its own defense at its own expense. Notwithstanding any
other provision of this Agreement to the contrary or any firm purchase order
that may have been issued pursuant to this Agreement, LifeScan shall be under no
obligation to purchase any Reporters or pay for any Care Central Services if
LifeScan has a reasonable basis to believe such product or service may infringe
upon the rights of any third party and the minimums set forth in Exhibit H shall
---------
be adjusted accordingly. ENACT may, at ENACT's choice, negotiate a license with
any third party or replace the Product with non-infringing product; if the
foregoing are not commercially reasonable, ENACT may take back the infringing
Products from LifeScan or from such LifeScan customers as may be willing to
return Products) and refund the price paid therefor as well as any payments made
by LifeScan pursuant to Section 2.3.3. THE FOREGOING STATES LIFESCAN'S SOLE AND
EXCLUSIVE REMEDY WITH RESPECT TO CLAIMS OF INFRINGEMENT OF THIRD PARTY
PROPRIETARY RIGHTS OF ANY KIND.
17.2 ENACT Indemnity. At LifeScan's election, ENACT shall save,
---------------
defend, indemnify and hold harmless each of the LifeScan Indemnities from and
against any and all Losses arising out of or resulting from (i) any breach by
ENACT of any of its warranties, guarantees, representations, obligations or
covenants contained herein, (ii) ENACT's negligence or misrepresentation in the
conduct of the activities to be performed by ENACT under this
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Agreement or (iii) the acts or omissions of ENACT, its employees, agents,
representatives, subcontractors or invitees. LifeScan shall cooperate with ENACT
in the defense of any such action. ENACT shall use counsel that is reasonably
acceptable to LifeScan. Alternatively, LifeScan may elect to defend itself
against any such claims in lieu of any indemnification by ENACT under this
Section 17.2 in which case ENACT shall be entitled to maintain its own defense
at its own expense.
17.3 LifeScan Indemnity. At ENACT's election, LifeScan shall save,
------------------
defend, indemnify and hold harmless ENACT and its affiliates and their
respective officers, directors, employees, agents, successors and assigns
(collectively, "ENACT Indemnities") from and against any and all Losses, arising
out of or resulting from (i) LifeScan's negligence or misrepresentation in the
conduct of the activities to be performed by LifeScan under this Agreement,
(ii) the acts or omissions of LifeScan, its employees, agents, representatives,
subcontractors or invitees, or (iii) any breach of this Agreement by LifeScan,
its employees, agents, representatives, subcontractors or invitees. LifeScan
shall be solely responsible for any claims, warranties or representations made
to LifeScan's customers by LifeScan or LifeScan's employees or agents which
differ from the warranty provided in writing by ENACT, and LifeScan shall defend
and indemnify ENACT Indemnities from any such different claims, warranties
and/or representations. ENACT shall cooperate with LifeScan in the defense of
any such action. LifeScan shall use counsel that is reasonably acceptable to
ENACT (which shall be deemed to include in-house counsel of LifeScan or its
parent, Johnson & Johnson). Alternatively, ENACT may elect to defend itself
against any such claims in lieu of any indemnification by LifeScan under this
Section 17.3 in which case LifeScan shall be entitled to maintain its own
defense at its own expense. LifeScan shall not be responsible for any
compromise made without its written consent.
17.4 General Obligations. A party seeking indemnity hereunder shall
-------------------
provide prompt written notice of and information regarding any matter as to
which it intends to seek indemnity hereunder, but provided that the interests of
the indemnifying party are not materially hindered thereby, providing of such
notice shall not be a condition to indemnification. In no event will an
indemnifying party be responsible for any compromise made without its written
consent.
18. Confidential Information.
------------------------
18.1 General.
-------
18.1.1 "Confidential Information" as used in this Agreement
means that information of one party ("Disclosing Party") which is disclosed to
the other party ("Receiving Party") pursuant to this Agreement and which, if in
written form, is marked "Confidential". Any Confidential Information initially
disclosed orally or visually will be identified as being confidential at the
time of disclosure and confirmed in writing by the Disclosing Party within
thirty (30) days of such disclosure.
18.1.2 Each party agrees that all Confidential Information
received from the other party under this Agreement shall be maintained in
confidence for a period of five (5) years from the Effective Date of this
Agreement, and the Receiving Party agrees to use such
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21
<PAGE>
Confidential Information only for purposes related to this Agreement. Each party
shall use the same standard of care to protect the confidentiality of
information received from the other party as it uses to protect its own
confidential information, and shall limit disclosure of such information to
those of its personnel and consultants who have an actual need to know and have
a written obligation to protect the confidentiality of such information.
18.1.3 Notwithstanding the preceding provisions of this Section 18.1,
obligations regarding confidentiality and use of Confidential Information
disclosed hereunder shall not include:
18.1.3.1 information which, at the time of disclosure, was
published, known publicly, or otherwise in the public domain,
18.1.3.2 information which, after disclosure, is published,
becomes known publicly, or otherwise becomes part of the public domain through
no fault of the Receiving Party
18.1.3.3 information which, prior to the time of disclosure, is
known to the Receiving Party or, after disclosure, is independently developed by
the Receiving Party as evidenced by its written records; and
18.1.3.4 information which, after disclosure, is made available
to the Receiving Party in good faith by a third party who is under no obligation
of confidentiality or secrecy
18.2 No License. Neither this Agreement nor any disclosure made
----------
hereunder by either party shall be deemed, by implication or otherwise, to vest
in the Receiving Party any license or other ownership rights to or under any
patents, know-how, or trade secrets.
18.3 Return. At any time upon the request of the Disclosing Party,
------
(a) the Confidential Information, including all copies (with the exception of a
single copy thereof which may be kept by the Receiving Party to establish the
extent of disclosure of Confidential Information by the disclosing Party) shall
be returned to the Disclosing Party and (b) all other embodiments of the
Confidential Information in the possession of the Receiving Party, including all
copies and/or any other form or reproduction and/or description.
18.4 Publicity. Except to the extent required by law and for
---------
disclosure to each party's legal, accounting and financial advisors and
investors subject to confidentiality obligations, neither party shall disclose
the terms of this Agreement without the prior written approval of the other
party, which approval shall not be unreasonably withheld.
19. Notices. All notices permitted or required under this Agreement shall
-------
be in writing and shall be delivered as follows with notice deemed given as
indicated: by personal delivery when delivered personally; by overnight courier
upon written verification of receipt; by telecopy or facsimile transmission when
confirmed by telecopier or facsimile transmission; or by certified or
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registered mail, return receipt requested, five (5) days after deposit in the
mail. All notices must be sent to the addresses described below or to such other
address that the receiving party may have provided for the purpose of notice in
accordance with this Section 19. All notices shall be sent to the attention of:
LifeScan
--------
Attention: President
Address: LifeScan, Inc.
1000 Gibraltar Drive
Milpitas, California 95035-6312
Fax No.: (408) 956-4701
Copy to: Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, NJ 08933
Attention: Office of the General Counsel
Fax No.: (908) 524-2788
ENACT
-----
Attention: Matthew H. Sanders, President
Address: 1975 West El Camino Real, Suite 306
Mountain View, CA, 94040
Fax No.: (415) 967-9223
Copy to: Chief Financial Officer
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<PAGE>
20. Force Majeure. Neither party shall be liable hereunder by reason of any
-------------
failure or delay in the performance of its obligations hereunder (except for the
payment of money) on account of any cause beyond the reasonable control of such
party including the following only to the extent beyond the reasonable control
of such party: strikes, labor disputes, insurrection, fires, flood, explosions,
acts of God, war, component shortages, governmental action or earthquakes. The
party so affected shall give prompt notice to the other party of such cause and
shall take reasonable steps as are necessary to relieve the effect of such cause
as rapidly as practicable. Such non-performance will be excused for three months
or until the termination of such cause (whichever occurs sooner). Such non-
performing party shall exercise all reasonable efforts to eliminate the Force
Majeure Event and to resume performance of its affected obligations as soon as
practicable.
21. Waiver. The failure of either party to require performance by the other
------
party of any provision hereof shall not affect the full right to require such
performance at any time thereafter; nor shall the waiver by either party of a
breach of any provision hereof be taken or held to be a waiver of the provision
itself.
22. Severability. In the event that any provision of this Agreement shall
------------
be unenforceable or invalid under any applicable law or be so held by applicable
court decision, such unenforceability or invalidity shall not render this
Agreement unenforceable or invalid as a whole.
23. Controlling Law. This Agreement shall be governed by and construed and
---------------
interpreted in accordance with the laws of the State of California without
regard to its conflicts of laws rules. The United Nations Convention on the
International Sale of Goods shall have no application to this Agreement.
24. No Agency. Nothing contained herein shall be construed as creating any
---------
agency, partnership, or other form of joint enterprise between the parties.
25. Survival. Any and all provisions, promises and warranties contained
--------
herein which by their nature or effect are required or intended to be observed,
kept or performed after termination of this Agreement will survive the
termination of this Agreement and remain binding upon and for the benefit of the
parties hereto, including Sections 12, 14, 15, 16, 18, 23, 25, and 27.
26. Assignment. Neither party may assign any rights or obligations under
----------
this Agreement, except (i) upon a reorganization for the purpose of changing the
jurisdiction of incorporation or (ii) as otherwise subject to the restrictions
provided in this Section 26. LifeScan may assign its rights and/or obligations
under this Agreement to any Affiliate thereof provided that LifeScan shall
remain liable for the assignee's performance under this Agreement.
26.1 [*].
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24
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26.1.1 [*]:
26.1.1.1 [*].
26.1.2 [*].
26.1.2.1 [*].
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25
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26.1.2.2 [*].
27. Disputes. Any and all disputes between the parties relating to this
--------
Agreement shall be settled by binding arbitration at a mutually acceptable
neutral location in Santa Clara, California. Such arbitration shall be
conducted in accordance with the then current rules of the American Arbitration
Association with a panel of three arbitrators. The arbitrators shall be
selected from the National Panel of Arbitrators of the American Arbitration
Association. Reasonable discovery as determined by the arbitrators shall apply
to the arbitration proceeding. California law shall apply to the arbitration
proceedings. Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof. Each party in such arbitration shall
be responsible for its own costs and expenses including attorney costs and
expenses. The parties agree neither to request or seek to enforce any punitive
or exemplary damages from the arbitrator and shall not be empowered to grant any
such damages. The arbitrator shall issue written findings of fact and
conclusions of law. Either party may appeal issues of law to the appropriate
court in the State where the arbitration is held, including the application of
law to the facts. From the date a party notifies the other party that it wishes
to commence arbitration regarding any such dispute until such time as such
dispute has been finally settled by arbitration, the running of the time periods
set forth in this Agreement within which a party may cure a breach shall be
suspended as to the subject matter of such dispute.
28. Entire Agreement. This Agreement is the entire agreement between the
----------------
parties regarding its subject matter. It supersedes and its terms govern, all
prior proposals, agreements, or other communications between the parties, oral
or written, regarding such subject matter. This Agreement shall not be modified
unless done so in a writing signed by officers of both ENACT and LifeScan.
LifeScan, Inc. ENACT Health Management
Systems
By: ______________________________ By: ______________________________
Date: ____________________________ Date: ____________________________
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EXHIBIT A
Base Reporter and Care Central Service Pricing
Reporter (each)
[*] $[*]
[*] $[*]
Example Annual Enrollment Fee (per End User) $[*]
12 Send Calls
Modem Access
(Items (1) and (2) on Exhibit D)
Example Annual Enrollment Fee (per End User) $[*]
12 Send Calls
12 FAX Reports
Modem Access
(Items (1), (2) and (3) on Exhibit D)
Other Available Care Central Services [*]
(Items (4) through (9) on Exhibit D)
(a) Assumes individual purchase order of [*] or more Reporters
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EXHIBIT B
LifeScan Reporter Pilot List
(Preliminary)
Customer Application Start/Finish # End Users
- -------- ----------- ------------ -----------
[*]
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EXHIBIT C
Reporter(TM)
A Communications Accessory for the
LifeScan OneTouch(R) II and the OneTouch(R) Profile
Product Specification
Revision 1.3
7/12/96
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GENERAL DESCRIPTION
Revision 1.3
[*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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[*]
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[*]
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EXHIBIT D
Care Central Services- Examples
(1) [*];
(2) [*].
(3) [*].
(4) [*].
(5) [*].
(6) [*]
(7) [*].
(8) [*].
(9) [*].
(10) [*].
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EXHIBIT E
[*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
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EXHIBIT F
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EXHIBIT G
[*]
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