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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
April 5, 2000
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Date of Report (date of earliest event reported)
e-MedSoft.com
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Exact name of Registrant as Specified in its Charter
Nevada 1-15587 84-1037630
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State or Other Jurisdiction Commission File IRS Employer Identification
of Incorporation Number Number
1300 Marsh Landing Parkway, Suite 106, Jacksonville, FL 32250
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Address of Principal Executive Offices, Including Zip Code
(904) 543-1001
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Registrant's Telephone Number, Including Area Code
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION LOCATION
10.12 Management Services and Joint Filed herewith electronically
Venture Agreement dated April 6,
2000, between Prime RX.com, Inc.
and e-MedSoft.com, as modified
10.13 Master Preferred Provider Agree- Filed herewith electronically
ment between e-MedSoft.com and
Prime RX.com, Inc.
10.14 Agreement dated April 7, 2000 Filed herewith electronically
between e-MedSoft.com and
the shareholders of Prime RX.
com, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment No. 1 to this Report to be signed on
its behalf by the undersigned, hereunto duly authorized.
e-MedSoft.com
Dated: May 2, 2000 By:/s/ Margaret A. Harris
Margaret A. Harris, Chief Financial
Officer
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MANAGEMENT SERVICES AND JOINT VENTURE AGREEMENT
THIS MANAGEMENT SERVICES AND JOINT VENTURE AGREEMENT ("Agreement") is
made and entered as of April 6, 2000 by and between Prime RX.com, Inc., on the
one hand (hereinafter "Principal"), and e-MedSoft.com, on the other hand
("Manager").
This Agreement is made with reference to the following facts,
circumstances, recitals and agreements:
A. Principal currently owns, manages, leases and/or operates a series of
facilities and businesses throughout the country all of which, in one form or
another, are engaged in the pharmaceutical industry, including, without
limitation, the assets listed on Schedule "A" attached hereto (hereinafter
"Subject Business"). Principal has rapidly expanded its business over the
past eighteen months and intends to continue on a plan of rapid expansion and
penetration of various markets within the pharmaceutical industry. As used
hereafter, the term "Subject Business" shall mean and refer to (i) the assets
and businesses described on Schedule "A" hereto, (ii) any and all of
Principal's businesses whether now existing or hereafter acquired, as well as
all (iii) any and all rights of development, examination, expansion,
evaluation or other means by which additional business opportunities beyond
those currently owned by Principal are acquired or annexed as a part of
Principal's business.
B. Principal has represented and continues to represent to Manager that
Principal has completed a comprehensive evaluation of the "Subject Business"
as well as a comprehensive evaluation of Manager's electronics systems and,
based upon these evaluations, (i) Principal has come to the conclusion that
the implementation into the Subject Business by Manager of Manager's
electronics systems and protocols will yield significant benefits to Principal
and (ii) Principal wishes to retain Manager for an exclusive term of thirty
(30) years to completely manage all aspects of the Subject Business both with
respect to the implementation of Manager's electronics systems into the
Subject Business and with respect to supervising, managing and employing the
human capital needed to maintain and grow the Subject Business in accordance
with Principal's business plans.
NOW, THEREFORE, in consideration of the recitals, covenants and
conditions contained herein, the parties hereto agree as follows:
1. MANAGER'S OBLIGATIONS:
1.1 Compliance With Principal's Agreements. Manager understands
and acknowledges that Principal has entered into a series of contracts,
agreements and understandings with third parties which Principal shall provide
to Manager and attach hereto as Exhibit "B" within five (5) days after
execution ("Principal's Agreements"). In carrying out its responsibilities
hereunder, Manager agrees to abide by all terms and conditions of all
Principal's Agreements. Such obligations of Manager shall include the
obligation by Manager to fund monies necessary to pay obligations set out in
the Principal's Agreements even if the revenues of the Subject Business are
insufficient to reimburse Manager for such advances. Nothing herein shall
constitute an assignment of Principal's Agreements to Manager, but, rather,
Manager shall merely act as Principal's agent for all purposes in connection
with carrying out all of Principal's obligations under Principal's Agreements.
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1.2 Management Services and Administration. During the term of
this Agreement, Manager shall have the full, exclusive and complete authority
and discretion in the management and control of all business appertaining or
relating to the Subject Business, and all decisions permitted to be made by
Principal in the conduct of its business are hereby B for the term hereof B
delegated exclusively, irrevocably and unconditionally to Manager.
(i) Duty to Cooperate. Principal acknowledges that its
cooperation is critical to the ability of Manager to perform its duties
hereunder. Accordingly, Principal agrees to cooperate with Manager as
reasonably requested by Manager to enable Manager to render performance
hereunder.
(ii) Independent Contractor. In the performance of this
Agreement, it is mutually understood and agreed that Manager is at all times
acting and performing as an independent contractor with, and not the employee
of, Principal.
(iii) Manager Not Responsible for Medical Matters. The
parties hereto understand and acknowledge that certain responsibilities
hereunder related to the Subject Business will necessarily involve the
interaction by Manager with health care professionals who are or will render
medical or related professional advice in connection with or related to the
Subject Business. In this regard, Principal represents and warrants to
Manager that none of Principal's business, none of the revenues which
Principal has historically realized in the past from the Subject Business, and
none of the revenues which Principal intends to realize in the future from the
Subject Business, involve the rendering of professional medical advice or care
whatsoever by Principal. The parties therefore agree that to the extent the
rendering of professional medical judgment or advice occurs within the Subject
Business, any and all such matters (whether medical, ethical or professional)
requiring professional medical judgment shall remain the responsibility of
medical staff and allied health professionals employed or engaged by persons
other than Principal and Manager. Manager shall have no responsibility for
such judgments or for such matters; provided, however, that Manager agrees to
use its best efforts to comply with any reasonable and lawful directives of
responsible third parties regarding professional medical advice appertaining
to the Subject Business.
1.3 Staffing. During the term hereof and in order for Manager to
carry out the terms of this Agreement, Principal intends that Manager may B
within Manager's full discretion B (a) hire any and all current or future
employees of Principal to become employees of Manager, (b) hire any personnel
not currently affiliated with Principal to provide services with respect to
the Subject Business, (c) utilize current employees of Manager in connection
with Manager's responsibilities hereunder and (d) take any other action with
respect to the Subject Business which Manager deems (in its sole and absolute
discretion) is necessary or appropriate to preserve the current and future
value derived and to be derived from the Subject Business. Principal shall
have no right hereunder to have any of its officers, directors or employees
involved in the management of the Subject Business, it being the intention of
the parties that Principal shall have no involvement or connection B directly
or indirectly B with respect or appertaining to the Subject Business.
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2. FINANCIAL MATTERS; ACCOUNTS; MANAGEMENT FEE
2.1 Bank Account and Accounting. Manager shall exclusive authority
over all bank accounts of Principal currently in existence as well as over all
future bank accounts which Manager may establish -- within its sole and
absolute discretion -- relative to the ongoing business conducted at the
Subject Business (hereinafter collectively "bank accounts"). Manager shall be
the only party authorized to draw upon any bank accounts set up to handle the
management of the Subject Business. Manager shall be the only party
authorized to have access to information concerning the bank accounts set up
to handle the management of the Subject Business. Whether or not Manager
chooses to set up bank accounts with regard to the Subject Business, Manager
shall provide to Principal a full accounting of all financial matters
appertaining or relating to Manager's operation of the Subject Business, but
Manager shall only have an obligation to do so after the passage of sixty (60)
days following receipt of a written request by Principal for such an
accounting.
2.1.1 No Further Guaranty By Principal Dr. Reddy. The parties
hereto acknowledge that Prem Reddy, M.D., the largest shareholder of the
Principal, has guaranteed certain lines of credit and other bank debt, and the
parties hereto agree that B subsequent to the execution of this Agreement B no
further bank debt or other monies may be drawn down in any manner appertaining
to Principal unless and until it is done in such a fashion that Dr. Reddy is
not a guarantor on any future advances of such bank debt occurring after the
date of execution hereof.
2.2 Disbursements. All monies received by Manager arising from
its management of the Subject Business shall be disbursed monthly in the
following order of priority: First, to pay any and all operating expenses
appertaining or relating to the Subject Business in the order of priority
chosen by Manager within Manager's absolute discretion, such operating
expenses to include, without limitation, general operating expenses, special
operating expenses, capital improvements and expenditures, property repair and
maintenance expenses, utility charges, property taxes, payroll taxes, legal,
accounting and other general administrative expenses (hereinafter collectively
"expenses"); and then Second if money is still available after payment of
expenses, then such money shall be utilized to pay any previously unreimbursed
expenses of any kind arising out of, appertaining or related to the Subject
Business (hereinafter collectively "unreimbursed expenses"); and then Third if
money is still available after payment of expenses and unreimbursed expenses,
then such money shall be utilized to pay off all principal and interest owed
under any debt or other obligation in which Principal is the primary obligor
and Prem Reddy, M.D. is a guarantor thereof pursuant to a written guaranty
obligation ("payoff of guaranteed obligations"); and Fourth if money is still
available after payment of expenses and unreimbursed expenses and payoff of
guaranteed obligations, then such money shall be utilized to pay Manager its
management fee set forth on Schedule "C" attached hereto (hereinafter
"Manager's Fee"). At the time of each anniversary date after execution of
this Agreement, Manager shall disburse to Principal any money remaining from
the operation of the Subject Business after deduction of expenses,
unreimbursed expenses and Manager's Fee.
2.3 Loan Provisions. Any unreimbursed expenses owed to Manager
hereunder, whether directly or indirectly, that have not been repaid under
section 2.2 above shall be repaid to Manager by Principal upon the termination
of this Agreement.
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3. TERM AND TERMINATION:
3.1 Term. The term of this Agreement shall be for a period of thirty
(30) years commencing on the date of execution hereof and terminating on the
thirty-year anniversary date hereof.
3.2 Termination.
(a) Principal shall have no right to terminate this Agreement
unless and until one of the following events occur (hereinafter collectively
referred to as "Manager Default"), after which Principal shall have the right
B but not the obligation B to declare a termination of this Agreement in
accordance with the termination protocols set forth below:
(i) appointment of a receiver or trustee to manage the assets
of Manager;
(ii) assignment for the benefit of creditors of the assets of
Manager;
(iii) any act of bankruptcy by Manager; and/or
(iv) breach of any material term of this Agreement, where such
breach has not been cured within ninety (90) days after the giving of written
notice of the breach, specifying the nature of the breach, and complying with
all provisions regarding mediation set forth herein.
(b) Manager shall have no right to terminate this Agreement unless
and until one of the following events occur (hereinafter "Principal Default"),
after which Manager shall have the right B but not the obligation B to declare
a termination of this Agreement in accordance with the termination protocols
set forth below:
(i) appointment of a receiver or trustee to manage the assets
of Principal;
(ii) assignment for the benefit of creditors of the assets of
Principal;
(iii) any act of bankruptcy by Principal;
(iv) breach of any material term of this Agreement, where such
breach has not been cured within ninety (90) days after the giving of written
notice of the breach, specifying the nature of the breach, and complying with
all provisions regarding mediation set forth herein; and/or
(v) any other conduct by Principal which interferes with or
renders more difficult Manager's unobstructed operation of the Subject
Business.
3.3 Notice of Default. Neither a Manager Default or Principal Default
shall be deemed to have occurred unless the non-defaulting Party has complied
with the escalation procedure set forth in Section 4 and the non-defaulting
Party has given written notice (a "Default Notice") to the defaulting Party in
accordance with the requirements of this Section 3.3. A Default Notice shall
specify in reasonable detail the events which the non-defaulting Party
believes have occurred and which constitute or evidence a Default, the
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provisions of this Agreement which have not been performed or complied with,
and the actions which, in the opinion of the non-defaulting Party, would be
required to fulfill the requirements of this Agreement and cure the Default.
A Default shall not be deemed to have occurred unless and until ninety (90)
days has lapsed since the non-defaulting Party provided notice to the
defaulting party of the Default and the defaulting Party has not cured the
Default. An immaterial failure to comply precisely with the foregoing notice
requirements shall render inoperative the validity of a Default Notice, even
if the defaulting Party was not prejudiced by such failure. For purposes of
this Agreement, all Defaults shall be deemed curable and no Default shall be
deemed to occur unless and until the non-defaulting Party provides, in
writing, an outline of the acts necessary to achieve a cure.
3.4 Termination for Default. Only upon (a) the occurrence of any
Default which is not excused pursuant to this Agreement, (b) the inability to
resolve the dispute under Section 4, (c) the delivery of a Default Notice to
the defaulting Party as provided in Section 3.3, (d) the circumstance where a
specific remedy for the Default is not set forth above and/or such a specific
remedy is so set forth but compliance with such remedial procedure has not
yielded a resolution of the Default and (e) the defaulting Party's failure to
cure the Default set out in the Default Notice prior to the expiration of the
cure period specified in Section 3.3 above and any extension of that cure
period, the defaulting Party shall be deemed to be in breach of this Agreement
and the non-defaulting Party shall have the right to terminate this Agreement
by delivering written notice of termination to the defaulting Party.
3.5 Effect of Termination. Upon termination of this Agreement (and
irrespective of which Party terminates this Agreement), all of the following
shall apply:
(a) Manager shall turn over to Principal a complete set of
books and records appertaining to the Subject Business within thirty (30) days
after the termination has become effective and all cure periods and other
required time has lapsed; and
(b) Subject to subsection c below, Manager shall have no further
right to operate the Subject Business, whether directly or indirectly; and
(c) All sums due Manager hereunder, whether appertaining to
expenses, unreimbursed expenses or the Management Fee shall be due and payable
by Principal to Manager within 180 days after the effectiveness of the
termination, and Manager shall have the full power and discretion to not
return the operation of the Subject Business back to Principal unless and
until such sums (if any) are paid in full.
4. DISPUTE ESCALATION AND MEDIATION
The parties hereto agree that they will use all reasonable efforts
to resolve any disputes arising out of this Agreement in a co-operative and
expeditious manner. If the staff members for each party are unable to resolve
the dispute within ten (10) days after it arises, either party hereto may
escalate the dispute to Manager's Chief Executive Officer then to Principal's
Chairman (hereinafter collectively "Mediation Officers"). Upon such
escalation, the Mediation Officers shall meet in person to discuss the
outstanding issues and attempt in good faith to reach a resolution. If the
foregoing procedure fails to resolve the dispute within sixty (60) days after
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such meeting, the parties hereto shall be entitled to any and all remedies
provided by law.
5. STANDARDS OF PERFORMANCE, COMPLIANCE WITH LAWS:
Manager shall perform its duties under this Agreement in good faith
in compliance with the business judgment rule, while complying with all
applicable federal, state and municipal laws and regulations. Notwithstanding
any provision of this Agreement to the contrary, Manager:
(a) shall not be liable in connection with the performance of
its duties hereunder, except for its own wilful and intentional misconduct;
(b) shall not be liable for any error of judgment made in good
faith in connection with the performance of its duties hereunder, unless it
shall be proven in a court of law that Manager engaged in wilful and
intentional misconduct; and
(c) shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written
direction of Principal.
6. REPRESENTATIONS AND WARRANTIES:
6.1 Corporate Existence. Each party to this Agreement is a
corporation duly organized, validly existing and in good standing under the
applicable law as may be applicable to the particular entity in question.
Each party to this Agreement is duly qualified to do business, and is in good
standing as a foreign corporation in the State of California and in each other
jurisdiction where the party actively conducts business, except where the
failure to be so qualified or licensed would not have a material adverse
effect on that party.
6.2 Corporate Power; Authorization; Enforceable Obligations. Each
party to this Agreement has taken corporate action on its part sufficient
under the laws of California, and under its Certificate of Incorporation and
By-Laws to authorize the execution, delivery and carrying out of this
Agreement on its behalf. Each party to this Agreement has the corporate power
and authority to execute, deliver and perform this Agreement and to consummate
the transactions contemplated hereby without the necessity of any act or
consent of any other entity. The execution, delivery and performance of this
Agreement by each party to this Agreement has been duly authorized by all
necessary corporate action. This Agreement has been, and the other
agreements, documents and instruments required to be executed and delivered by
each party hereto will be, duly executed and delivered by each party hereto
and constitute valid and legally binding obligations of each party,
enforceable against each in accordance with the terms hereof and thereof.
6.3 No Conflicts. The execution, delivery and performance of this
Agreement and any other documents executed concurrently herewith, does not and
will not violate, conflict with or result in the breach of any term, condition
or provision of, or require the consent of any other person under: (a) any
contract, agreement, law or governmental rule or regulation to which any party
hereto is subject, (b) any judgment, order, writ, injunction or decree of any
court, arbitrator or governmental or regulatory authority applicable to any
party, and/or (c) the charter documents or code of regulations of, or any
securities issued by, any party hereto. Each party has the absolute and
unfettered right to enter into this Agreement and carry out its obligations
hereunder.
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6.4 Unencumbered. With respect to all of the Subject Business and
with the exception of encumbrances not exceeding $1,250,000 that have come
about in the ordinary course of business after December 31, 2000, there are no
encumbrances appertaining or relating thereto except those listed on the most
recent financial statements provided by Principal to Manager.
6.5 Litigation. As of the date of execution hereof, (a) each party
hereto represents and warrants that there is not now any pending litigation,
including any arbitration, investigation or other proceeding before any court,
arbitrator or governmental or regulatory authority, or, to each party's
knowledge, threatened against each party, which if decided adversely against
that party would have a material adverse effect on the business of that party
and (b) neither party is subject to any judgment, order, writ, injunction, or
decree of any court, arbitrator or governmental or regulatory authority which
has a material adverse effect on its business.
6.6 Compliance with Laws. To the best knowledge of each party to
this Agreement, each party hereto has complied in all material respects with
all laws, regulations and orders applicable to their business. Principal
warrants and represents that it has obtained all governmental permits or
licenses required in order to conduct the Subject Business, and the present
use of its properties and the conduct of the Subject Business does not violate
in any material respect any law, regulation, ordinance, decree, injunction or
order. No notice or warning from any governmental authority with respect to
any failure or alleged failure of Principal to comply with any law, regulation
or order has been issued or given, nor is any such notice or warning proposed
or threatened so far as is known to Principal.
6.7 Environmental Compliance. To the best knowledge of Principal,
Principal has previously complied with, and is currently complying with, in
all material respects, all laws appertaining and relating to the environment,
including any and all federal, state or local environmental, health and/or
safety-related laws, regulations, standards, decisions of courts, ordinances,
rules, codes, orders, decrees, directives, guidelines, permits, or permit
conditions applicable to the operation of the Subject Business. Principal
has not caused or permitted any Hazardous Materials (as defined below) to be
brought upon, stored, manufactured, generated, handled, released, treated or
disposed or used on, under or about or in connection with the operation of
Subject Business, except for routine office, pharmaceutical, clinic or
hospital supplies and material, janitorial supplies and material used in
connection with the Subject Business in usual and customary quantities and
which are used, handled and disposed of in compliance with all applicable
Environmental Laws, as defined above ("Permitted Hazardous Materials"). As
used herein "Hazardous Materials" means any chemical, substance, material,
controlled substance, object, condition, waste, organism or combination
thereof, which is or may be hazardous to human health or safety or to the
environment due to its radioactivity, ignitability, corrositivity, reactivity,
toxicity, carcingenicity, mutagenicity, infectiousness or other harmful or
potential harmful properties or effects, including, without limitation, the
Permitted Hazardous Materials, petroleum and petroleum products, asbestos,
radon, polychlorinated biphenyls, refrigerants and all of those chemicals,
substances, materials, controlled substances, conditions, wastes, organisms or
combinations thereof which are now or become listed, defined or regulated in
any manner by any Environmental Law.
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6.8 Financial Statements. All financial statements provided by
Principal to Manager prior to the execution of this Agreement were prepared in
accordance with generally accepted accounting principles consistently applied,
and fairly present the financial position and results of operations of the
Subject Business as of the date of the financial statements. The financial
statements can be reconciled with the financial records maintained and the
accounting methods applied by Principal for federal income tax purposes.
6.9 Patents, Trademarks, Trade Names. Principal currently owns or
has the full right to use all patents, inventions, trademarks, trade names,
copyrights, technology, know-how and processes, registrations or applications
therefore, used in or necessary for the Subject Business (hereinafter
"Rights"). No claims have been asserted by any person to the use of any of
the Rights or challenging or questioning the validity or effectiveness of any
such Rights, and to the best knowledge of either party, there is no valid
basis for any such claim. The use of the Rights by Manager does not infringe
on the rights of any person. No director, officer or employee of Principal
owns directly or indirectly, in whole or in part, any of the Rights or
interest therein which Principal has used, is presently using, or the use of
which is necessary for the Subject Business are now conducted.
6.10 Contracts and Arrangements. All contracts and agreements of
Principal referenced herein are valid, binding, in full force and effect and
enforceable in accordance with their terms. Principal is not in default or
breach and no event has occurred or shall occur by reason of the transactions
contemplated herein which would constitute a default or breach, where such
default or breach would entitle another party thereto to accelerate or
terminate any contracts or agreements or otherwise impose a penalty or
forfeiture thereunder (whether with or without notice, lapse of time or the
happening or occurrence of any other event), under any such contracts or
agreements. All such agreements are valid and binding agreements, and to the
best knowledge of Principal, there are no facts or circumstances which make a
default under any such agreement by any party thereto likely to occur
subsequent to the date hereof. Unless otherwise described herein or listed
on an Exhibit or Schedule hereto, Principal is not obligated under any
agreement that materially and adversely affects its business, property,
prospects, assets or condition, financial or otherwise.
6.11 All Assets Included. There is, and on the date of execution
hereof, there will be, no material asset that is owned by Principal that is
used in the conduct of Subject Business which is not included in the matters
which Manager has the exclusive right to manage hereunder.
6.12 Consents. Except as may be waived in writing by the parties
hereto, each party hereto has obtained the consents and approvals of all
parties whose consent or approval is necessary and provided such notices
(including as required by any applicable plant closing laws) for the valid and
effective consummation and completion of the transactions contemplated hereby
or as necessary in order that each party may validly, lawfully and effectively
perform and carry out its obligations hereunder, including without limitation,
without becoming in default under any agreement with any party or subjecting
itself to any claim or penalty.
6.13 Tax Matters. Principal has timely filed all federal, state
and local tax returns or extensions thereof relating to the operation of
Subject Business which were required to be filed. Principal has paid, or
where payment is not yet required, established adequate reserves for the
payment of all taxes with respect to the periods covered by such returns.
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Principal is not delinquent in the payment of any material tax, assessment or
governmental charge. Each of the returns and filings referred to above when
filed was complete and accurate in all material respects and included complete
and accurate representation of gross income, deductions or other tax
attributes. Principal has not consented to any waiver or extension of any
statute of limitations relating to the assessment or collection of any
federal, state or local tax of Principal. There are no deficiency assessments
against Principal. Principal is not a party to any tax allocation or sharing
agreements nor has Principal at any time been included in the filing of a
consolidated federal income tax return.
6.14 Material Misstatements or Omissions. No representation or
warranty by any party in this Agreement, the exhibits or any schedule hereto,
or any schedule or certificate furnished to pursuant hereto or in connection
with the transactions contemplated hereby contains any untrue statement of a
material fact. There is no fact known to Principal that could have a material
adverse effect on the financial condition or operation of the Subject
Business.
6.15 Compliance. No party hereto is in violation, breach or
default, whether or not declared, of any term of its Articles of Incorporation
or Bylaws, or any material term or provision of any agreement or other
instrument to which either is a party, or any material term or provision by
which any of the properties or assets covered hereby are bound. Each party
hereto has an absolute right to make the promises it is making hereunder.
7. MISCELLANEOUS:
7.1 Assignment. Except as otherwise provided herein, the parties
hereby agree that this Agreement shall not be assigned or transferred by
either party without the prior written consent of the other; provided,
however, that this Agreement may be assigned, in whole or in part, by Manager
in its sole discretion to any parent, affiliate, majority-owned subsidiary or
successor entity.
7.2 Choice of Law; Venue. This Agreement shall be construed and
governed by the laws of the State of California and the invalidity and
unenforceability of any provision hereof shall not affect the validity or
enforceability of any other provision. Any litigation occurring hereunder
shall occur exclusively in the County of Los Angeles, State of California.
7.3 Practice of Medicine. The parties hereto acknowledge that
Manager is not authorized or qualified to engage in any activity which may be
construed or deemed to constitute the practice of medicine. To the extent any
act or service herein required of Manager should be construed or deemed to
constitute the practice of medicine, the performance of said act or service by
Manager shall be deemed waived or forever unenforceable.
7.4 Modification. This Agreement shall not be modified or amended
except by a written document executed by both parties to this Agreement, and
two duplicate originals of such written modification(s) shall be attached to
an original of this Agreement by both parties.
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7.5 No Reciprocation. The parties hereby acknowledge and agree
that the benefits conferred upon each of them hereunder neither require nor
are in any way contingent upon the admission, recommendation, referral, or any
other arrangement for the provision of any item or service offered by Master
Manager to Manager, or by either of them to any patients of Groups, or the
Subject Business, its shareholders, officers, directors, employees,
contractors or agents.
7.6 Notices. All notices which either party is required or may
desire to give to the other under this Agreement shall be in writing, and
shall be given by addressing the same to such other party at the address
provided in writing from time to time during the performance of this
Agreement.
7.7 Waiver. No waiver by either of the parties hereto of any
failure by the other party to keep or perform any provision, covenant or
condition of this Agreement shall be deemed to be a waiver of any preceding or
succeeding breach of the same, or of any other provision, covenant or
condition. All rights and remedies herein granted or referred to are
cumulative; resort to one shall not preclude resort to another or any other
right or remedy provided by law.
7.8 Additional Documents. Each of the parties hereto agrees to
execute any document or documents that may be requested from time to time by
the other party to implement or complete such party's obligations pursuant to
this Agreement.
7.9 Entire Agreement. This Agreement contains the complete and
full agreement between the parties regarding the subject matter hereof. Other
than documents executed concurrently herewith, there have been no other oral
or written agreements having anything to do with the subject matter of this
Agreement.
7.10 Attorneys' Fees. Should either party institute any action or
proceeding to enforce this Agreement or any provision hereof or for damages by
reason of any alleged breach of this Agreement of any provision hereof, or for
a declaration of rights hereunder, the prevailing party in such action or
proceeding shall be entitled to receive from the other party all costs and
expenses, including reasonable attorneys= fees, incurred by the prevailing
party in connection with such action or proceeding.
7.11 Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original document, but all of which together
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
"PRINCIPAL"
PRIME RX.COM., INC.
By: /s/ Prem Reddy
"PRINCIPAL"
PRIME RX.COM., INC.
By: /s/ David W. Rombro
"MANAGER"
E-MEDSOFT.COM
By: /s/ John F. Andrews
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Exhibit "A"
Any and all of the assets, real property, tangible and intangible
personal property, rights and claims of every kind and nature whatsoever used
in, necessary or intended for, arising from or related to the operation of the
business of Principal, including, without limitation, the following:
1. all of the real property used in the operation of the business of
Principal, whether owned or leased by the Principal, including, without
limitation, all improvements, construction-in-progress and fixtures located
thereon;
2. all tangible personal property of every kind and nature used in the
operation of the business of Principal, whether owned or leased by the
Principal;
3. all intangible personal property used in the operation of the
business of Principal;
4. all patents, trademarks, trade names, business names, service marks,
trade secrets, copyrights and know-how including, without limitation, all of
Principal's right, title and interest in and to its trade names, logos
utilized in the operation of its business;
5. all telephone numbers used in connection with the operation of the
business of Principal; and
6. all licenses, permits, certificates, accreditations and other indicia
of authority relating to business operations appertaining to the business of
Principal (collectively, the "Licenses and Permits"); all rights or
obligations of Principal under all contracts, agreements, options and
commitments relating to the construction, renovation, ownership, servicing,
maintenance, occupancy and/or operation of Principal's business, or any part
thereof.
<PAGE>
Exhibit "B"
To be attached by Principal and provided to Manager within five (5) days after
execution hereof.
<PAGE>
Exhibit "C"
Manager's fee shall be:
1. On all net profits from the Subject Business under generally accepted
accounting principals consistently applied that are less than $5,000,000,
Manager shall receive 25% of such net profits;
2. On all net profits from the Subject Business under generally accepted
accounting principals consistently applied that are between $5,000,000 and
$15,000,000, Manager shall receive 50% net profits;
3. On all net profits from the Subject Business under generally accepted
accounting principals consistently applied that are between $15,000,000 and
$30,000,000, Manager shall receive 60% net profits;
4. On all net profits from the Subject Business under generally accepted
accounting principals consistently applied that are more than $30,000,000,
Manager shall receive 70% of such net profits.
The profit hurdle percentages set out above are cumulative over the life of
this Agreement, meaning, e.g., that once the cumulative historical net profits
reach $30,000,001 the Manager shall receive 70% of such net profits for over
the balance of this Agreement.
MASTER PREFERRED PROVIDER AGREEMENT
BETWEEN
E-MEDSOFT.COM
AND
PRIME RX.COM, INC.
<PAGE>
TABLE OF CONTENTS
ARTICLE 1
1.1 Definitions ........................................ 1-3
1.2 Headings ........................................... 3
1.3 Number and Gender .................................. 3
1.4 Currency and Payment Obligations ................... 3
1.5 Statute References ................................. 3
1.6 Section and Schedule References .................... 3
ARTICLE 2
2.1 Engagement of Provider ............................. 4
2.2 Term of Engagement ................................. 4
2.3 Account Management ................................. 4
2.4 Project Management Team ............................ 4-5
2.5 Statement of Work .................................. 5
2.6 Requirements ....................................... 5
2.7 Site Preparation ................................... 5
2.8 Preparation of Project Plan ........................ 5-6
2.9 Installation of Software ........................... 6
2.10 Implementation of Software ......................... 6
2.11 Acceptance Testing ................................. 6-7
2.12 Training ........................................... 7
2.13 Warranty Period Support ............................ 7
2.14 Future Maintenance and Support ..................... 7
2.15 Documentation ...................................... 7
2.16 Excusable Delays ................................... 7-8
2.17 Marketing Obligations .............................. 8-9
ARTICLE 3
3.1 Grant of License ................................... 9
3.2 Term of License .................................... 9
3.3 Extent of License .................................. 9
3.4 Permitted Uses ..................................... 9-10
ARTICLE 4
4.1 License Fee ........................................ 10
4.2 Implementation Fee ................................. 10
4.3 Payment of Amounts .................................10-11
4.4 Payment of Taxes ................................... 11
4.5 Late Payment Charge ................................ 11
ARTICLE 5
5.1 Ownership of Software .............................. 11
5.2 Confidentiality of Documentation ................... 11
ARTICLE 6
6.1 Proprietary Information ............................ 11
6.2 Non-Competition ....................................11-12
6.2.1 Prohibition against Utilizing Competitive
Services and Products ............................ 12
6.2.2 Prohibition against Engaging in Competitive
Activity ......................................... 12
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TABLE OF CONTENTS
ARTICLE 7
7.1 Indemnification by CUSTOMER ........................ 12
7.2 Indemnification by PROVIDER ........................ 13
7.3 Participation in Defense ........................... 13
7.4 Indemnified Persons ................................13-14
ARTICLE 8
8.1 Warranty of PROVIDER ............................... 14
8.2 Year 2000 Compliant ................................ 14
8.3 Limitation of Liability ............................ 14
8.4 Exclusions .........................................14-15
8.5 Software and Data .................................. 15
ARTICLE 9
9.1 Events of Default .................................. 15
9.2 Notice of Default .................................. 15
9.3 Extension of Cure Period ...........................15-16
9.4 Termination for Default ............................ 16
9.5 Effect of Termination .............................. 16
ARTICLE 10
Escalation Procedure ....................................... 16
ARTICLE 11
11.1 Further Assurances ................................ 17
11.2 Entire Agreement .................................. 17
11.3 Applicable Law and Venue .......................... 17
11.4 Severability ...................................... 17
11.5 Notices ........................................... 17
11.6 Successors and Assigns ............................ 17
11.7 Independent Contractors ........................... 17
11.8 Counterparts and Facsimile ........................ 18
11.9 Due Execution ..................................... 18
11.10 Survival of Obligations ........................... 18
SCHEDULE DESCRIPTION EFFECTIVE DATE
SCHEDULE 1A Statement of Work Execution
SCHEDULE 1B Fee Schedule Execution
SCHEDULE 1C Project Plan Execution/Numerous (TBA)
SCHEDULE 1D Software Requirements Execution/Numerous (TBA)
RESERVED RESERVED RESERVED
SCHEDULE E Acceptance Letter Execution/Numerous (TBA)
SCHEDULE F Non-Disclosure Agreement Execution
iii
<PAGE>
MASTER AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 5th day of April, 2000
between PRIME RX.COM, INC. (hereinafter referred to as "CUSTOMER") and
E-MEDSOFT.COM (hereinafter referred to as "PROVIDER").
WHEREAS PROVIDER is engaged in the business of developing, customizing,
selling, supplying, installing, testing and implementing computer software
applications, as well as providing outsourcing solutions, and is willing to do
all of these things for CUSTOMER under the terms set forth in this Agreement
(the "Software"); and
WHEREAS CUSTOMER in exchange for receiving the commitments and
intellectual property of PROVIDER with regard to the Software is willing to
engage in the significant and far reaching commitments as set forth in this
Agreement.
NOW THEREFORE in consideration of the mutual covenants and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions. In this Agreement, unless the context otherwise
requires, in addition to the words and expressions defined above, the
following words and expressions shall have the meanings indicated below:
"Acceptance Letter" has the meaning set forth in Section 2.11.
An "Acceptance Test" means any test included in Acceptance Testing.
"Acceptance Testing" means the process of conducting certain tests set forth
in this Agreement, in the Project Plan or in other written documentation, to
determine whether the Software is operating properly on the Designated
Platform and conforms to the Software Requirements.
"Account Manager" has the meaning set forth in Section 2.3.
"Agreement" means this Agreement, including the Schedules, Exhibits or other
attachments to this Agreement, as it or they may be amended or supplemented
from time to time, and the expressions "hereof", "herein", "hereto",
"hereunder", "hereby" and similar expressions refer to this Agreement as a
whole and not to any particular Section or other portion of this Agreement.
"Default" has the meaning set forth in Section 9.1.
"Default Notice" has the meaning set forth in Section 9.2.
"Designated Platform" has the meaning set forth in Section 3.3.
"Fee Schedule" means the Schedule attached to this Agreement as Exhibit 1B and
any other schedules appended thereto, all of which are applicable to each
project to be performed by PROVIDER, that provides for the methodology with
which the License Fees and other payments due from CUSTOMER and the Payment
Milestones (if any) for such payments as are to be made to PROVIDER.
<PAGE>
"Installation Site" means the designated location or locations in CUSTOMER's
offices throughout the world where the Software is to be Installed or is to
have functionality or is to be accessed in any way, shape or form.
"Install" or "Installation" means the physical installation of the Software on
CUSTOMER's Designated Platform at the Installation Site.
"Implement" and "Implementation" means the process after Installation of the
Software during which PROVIDER, with CUSTOMER's assistance and input, will
prepare the Software to become Operational, which process may include, as
agreed by the Parties in this Agreement and in the Project Plan, network
testing, database conversion, cutover support, evaluation of work flow
processes, recommendation of changes to work flow processes, training of
CUSTOMER's technical personnel to operate, administer and manage the Software,
Acceptance Testing and other activities, as well as PROVIDER providing a
complete servicing solution for ongoing maintenance of all Software.
"License Fee" has the meaning set forth in Section 4.1.
"Material Breach" shall include only such a Default(s) under this Agreement
that is (are) coupled with a failure to cure and inability to reach a
resolution to certain disputes, as more fully set forth in Section 9.4.
"Nondisclosure Agreement" means that Nondisclosure Agreement between the
Parties dated as of January 19, 1999 and attached hereto as Schedule F.
"Payment Milestones" mean key dates for delivery of certain deliverables as
may be set forth from time to time in attachments to the Project Plan, that
may, if agreed to by the parties to this Agreement, trigger CUSTOMER's
obligation to pay PROVIDER in accordance with the applicable Fee Schedule on
certain projects.
The Software will be "Operational" when it has completed Acceptance Testing
and is ready to be made accessible to actual end users for use in a live (as
opposed to a test) environment.
"Party" means PROVIDER or CUSTOMER and any reference to a Party includes
PROVIDER's or CUSTOMER's respective successors, affiliates, subsidiaries,
parents or any entity that a Party has substantial control over the business
affairs of.
"Project Manager" has the meaning set forth in Section 2.4.
"Project Management Team" has the meaning set forth in Section 2.4.
"Project Plan" means a written document that has been prepared by PROVIDER and
approved by CUSTOMER outlining the deliverables, due dates and other
milestones, responsible party for the deliverable, Acceptance Test criteria
and test plan and other relevant matters, all such matters to have been
prepared and approved or deemed approved in the manner set forth in Section
2.8.
"Reimbursable Expenses" mean out of pocket expenses incurred by PROVIDER in
performing under this Agreement, including but not limited to airline tickets,
car rental, mileage and other transportation expenses, meal, PROVIDER's
standard per diem amount, copies, facsimile transmissions, long distance
telephone charges, postage and courier expenses and similar charges.
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<PAGE>
"Statement of Work" means a document prepared by PROVIDER and approved by
CUSTOMER such as the document appended hereto as Schedule 1A which may be
prepared from time to time at the discretion of PROVIDER and particularly when
there is a variance to the initial work called for hereunder -- which
describes the work to be performed by PROVIDER for a specific project. Any
Statement of Work so prepared and approved shall constitute an approved
modification to this Agreement and its terms shall be incorporated herein by
reference as though they form a part of this Agreement.
"Site Requirements" means the specifications and functionality required of the
hardware, network and other technical architecture at the Installation Site in
order for the Software to operate in accordance with the Software
Requirements.
"Software" means any software described in the applicable Software
Requirements and developed, customized, Installed or Implemented by PROVIDER
from time to time under this Agreement.
"Software Requirements" means the final technical and design specifications
applicable to any Software as set forth in a Schedule attached to this
Agreement.
"Warranty Period" shall mean the thirty (30) day period beginning on the date
the Software becomes Operational or is deemed to be Operational. .
1.2 Headings. The division of this Agreement into Articles and Sections,
the insertion of headings is for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
1.3 Number and Gender. Unless the context requires otherwise, words
importing the singular include the plural and vice versa and words importing
gender include all genders.
1.4 Currency and Payment Obligations. Except as otherwise expressly
provided in this Agreement, all dollar amounts referred to in this Agreement
are stated in United States Dollars, and any payment contemplated by this
Agreement shall be made by cash, certified check or any other method that
provides immediately available funds.
1.5 Statute References. Any reference in this Agreement to any statute or
any section thereof shall, unless otherwise expressly stated, be deemed to be
a reference to such statute or section as amended, restated or re-enacted from
time to time.
1.6. Section and Schedule References. Unless the context requires
otherwise, references in this Agreement to Sections, or Schedules are to
Sections, or Schedules of this Agreement. Schedules may be attached from time
to time in connection with the Parties' agreement to execute a project.
ARTICLE 2
ENGAGEMENT; TERM; OBLIGATIONS IN DEPLOYMENT OF SOFTWARE
2.1 Engagement of PROVIDER. Subject to the terms and conditions contained
in this Agreement, CUSTOMER hereby retains PROVIDER to develop, customize,
Install and Implement the Software in accordance with the Statement of Work,
supply all surrounding services necessary for the effective operation of the
Software and systems set out in the Statement of Work and other Schedules
3
<PAGE>
applicable to such Software, and PROVIDER accepts the engagement to develop,
customize, Install and Implement Software as set forth in the applicable
Schedules attached hereto.
2.2 Term of Engagement. The term of this Agreement shall begin upon
execution hereof and shall conclude on April 6, 2030. Notwithstanding any
allegation of default hereunder, this Agreement may not be terminated by
either Party unless and until there has been a Material Breach hereunder.
2.3 Account Management. To manage the overall interaction between
PROVIDER and CUSTOMER for all projects, PROVIDER and CUSTOMER shall each
appoint a responsible and qualified individual reasonably acceptable to the
other Party acting reasonably as an "Account Manager". It is expected that
the Account Manager will remain the same person throughout the term of this
Agreement, although the Project Management Team will vary from project to
project. The Party employing the Account Manager will use reasonable efforts
not to change the Account Manager but if the reasonable efforts nonetheless
yield that Party's belief that the Account Manager should be replaced in the
best interests of this Agreement that Party may replace the Account Manager,
within its sole discretion, on fifteen (15) days notice (or a shorter period
if agreed to by the other Party). Either Party may require the other Party to
replace the Account Manager for reasonable cause by providing a written notice
describing such reasonable cause.
2.4 Project Management Team. The Parties acknowledge that to accomplish
the successful execution under each portion of the Statement of Work requires
the timely and full co-operation of both Parties. To manage each project set
forth in the Statement of Work, PROVIDER and CUSTOMER shall each designate
responsible and qualified individuals acceptable to the other Party acting
reasonably, to form a joint project management team (the "Project Management
Team"). PROVIDER and CUSTOMER each agree to designate at least one individual
(the "Project Manager") for each project with adequate authority and
competence to deal with the other Party with respect to any issue related to
the development and Implementation of the Software required for that Statement
of Work. In the case of CUSTOMER, the Project Manager shall also be
responsible for providing or co-ordinating the provision of such information
(including system specifications, business contract terms, etc.) about
CUSTOMER and its operations, external and internal procedures and such other
information as PROVIDER may reasonably require in order to perform its
obligations hereunder including supervising the conduct of the various
Acceptance Tests. In addition, CUSTOMER's Project Manager shall have the
authority on behalf of CUSTOMER to notify PROVIDER that any Acceptance Tests
provided for herein have been successfully passed or, where applicable, that
CUSTOMER waives compliance with any such Acceptance Test. PROVIDER's Project
Manager shall be responsible for co-ordinating with CUSTOMER's Project Manager
for effective and timely site preparation, delivery, completion,
Implementation and Acceptance Testing. The Party employing a member of the
Project Management Team may replace a member on fifteen (15) days notice (or a
shorter period if agreed to by the other Party). Either Party may require the
other Party to replace a Project Management Team member for reasonable cause
by providing written notice describing such reasonable cause.
2.5 Statement of Work. To the extent the Statement of Work and other
parameters of the projects as set forth herein require modification or
supplementation, PROVIDER will prepare a Statement of Work which will include,
among other provisions, a description of the feature and function requirements
for the Software. CUSTOMER will have ten (10) days (or such other period as
may be agreed to by the Parties) after receipt of the Statement of Work to
4
<PAGE>
accept the Statement of Work or propose modifications thereof. If CUSTOMER
fails to provide modifications to or otherwise reject the Statement of Work
within such ten (10) day or other period, the Statement of Work will be deemed
approved by CUSTOMER. The Statement of Work for each project to be performed
by PROVIDER will be attached to Schedule 1A and maintained at the corporate
offices of PROVIDER.
2.6 Requirements. PROVIDER will prepare the Software Requirements for
each Software application to be provided to CUSTOMER based on the feature and
function requirements set forth in the Statement of Work or any modifications
thereto. CUSTOMER will have ten (10) days (or such other period as may be
agreed to by the Parties) after receipt of the Software Requirements to accept
the Software Requirements or propose modifications thereof. If CUSTOMER fails
to provide modifications to or otherwise reject the Software Requirements
within such ten (10) day or other period, the Software Requirements will be
deemed approved and accepted by CUSTOMER. The Software Requirements for each
Software application to be provided by PROVIDER will be attached to Schedule
1A and maintained at the corporate offices of PROVIDER.
2.7 Site Preparation. PROVIDER will prepare, and CUSTOMER will review
and accept the Site Requirements. Unless otherwise agreed by the Parties,
CUSTOMER, at its own expense but only after obtaining the prior written
approval of PROVIDER, shall make such necessary changes and upgrades
(including acquiring necessary hardware and software) to its technical
architecture as may be reasonably necessary to comply with the Site
Requirements. CUSTOMER shall notify PROVIDER's Project Manager of the status
of its site preparation efforts and any required changes in its technical
architecture, and PROVIDER and CUSTOMER shall then mutually agree upon and
implement the appropriate modifications at the expense of CUSTOMER. CUSTOMER
shall use all reasonable efforts to have the Installation Site comply with all
Site Requirements at least five (5) calendar days before the agreed upon date
for Installation. . Unless CUSTOMER has complied with the Site Requirements,
CUSTOMER shall be responsible for and PROVIDER shall not be liable for any
performance problems or failures of the Software that result from the
technical architecture or functionality or other aspect of CUSTOMER's
technological systems, including but not limited to hardware and other
equipment, network capabilities, database structure and configuration and
security modules.
2.8 Preparation of Project Plan. For each Statement of Work (whether
appended hereto or approved later) the PROVIDER will prepare a detailed
Project Plan and will submit it in writing to CUSTOMER. CUSTOMER shall have
five (5) calendar days within which to either revise the Project Plan in
writing or by the failure to make such revisions to be deemed,
conclusively, to have approved the Project Plan. So long as CUSTOMER's
revisions to the Project Plan are in full compliance with all provisions of
this Agreement including (without limitation) the provisions requiring
exclusivity, non-competition, defined Statement of Work set out on Exhibit 1A
and the compliance with PROVIDER's pricing requirments PROVIDER must comply
and proceed with the Project Plan submitted by the CUSTOMER.
2.9 Installation of Software. CUSTOMER will permit PROVIDER to Install
the Software on the applicable Designated Platform at the applicable
Installation Site. A representative of PROVIDER shall be available to
demonstrate how to use the Software to the Project Management Team and other
selected CUSTOMER representatives and such individuals shall provide feedback
to PROVIDER on the use of such Software. Installation of such Software shall
be considered completed when PROVIDER demonstrates to the reasonable
5
<PAGE>
satisfaction of CUSTOMER that such Software is operative by performing
appropriate diagnostic routines and PROVIDER certifies to CUSTOMER in writing
that such diagnostic routines have been successfully performed. The Parties
acknowledge and agree that such basic diagnostic routines are solely intended
to identify basic defects in such Software or the medium upon which it has
been recorded.
2.10 Implementation of Software. After Installation of the Software,
PROVIDER and CUSTOMER will enter the Implementation phase during which
PROVIDER will perform those Implementation services specified in the Project
Plan or other applicable document. As part of the Implementation phase,
PROVIDER and CUSTOMER will perform Acceptance Testing in accordance with
Section 2.11 and the applicable Schedule specifying the test plan, Acceptance
Tests, acceptance criteria and other relevant matters. The Implementation
phase will be deemed completed as of the date of the Acceptance Letter or if
CUSTOMER fails to provide the Acceptance Letter upon the date the Software is
deemed accepted under Section 2.11. No later than seven (7) days (or such
other period set forth in the Project Plan) after completion of the Acceptance
Test, the Software will be deemed Operational.
2.11 Acceptance Testing. CUSTOMER and PROVIDER shall develop a mutually
agreeable set of Acceptance Tests with defined objectives and criteria before
delivery of the Software. CUSTOMER shall have that number of days specified in
the Project Plan to inspect, test and evaluate it to determine whether such
Software conforms to the functionality described and Acceptance Tests in the
applicable Schedule. If such Software does not reasonably and substantially
satisfy the functionality described for Acceptance Tests in the applicable
Schedule, CUSTOMER shall give PROVIDER written notice stating why the Software
is unacceptable at the end of the Acceptance Testing period and PROVIDER shall
have that number of days specified in the applicable Schedule to correct the
deficiencies. Once corrected, PROVIDER will Install the corrected Software,
and CUSTOMER shall then have a period specified in the applicable Schedule to
inspect, test and re-evaluate the corrected Software. If the corrected
Software still does not satisfy the acceptance criteria, CUSTOMER's Chief
Executive Officer and PROVIDER's Chief Executive Officer shall attend an
in-person meeting in which CUSTOMER's additional deficiencies are noted for
PROVIDER; and from and after that meeting PROVIDER shall have thirty (30) days
to Install the Software in accordance with the new specifications of the
CUSTOMER. If after this last evaluation CUSTOMER remains dissatisfied with
the corrected Software, CUSTOMER shall have no right to terminate this
Agreement but, rather, shall have the option of either: (1) repeating the
procedure set forth above, or (2) choosing with respect to the deficient
Software only to seek alternative providers to deliver the software product
to CUSTOMER and such use of alternative providers shall not be in violation of
the Non-Competition provisions set out in Section 6 below. If CUSTOMER does
not give written notice to PROVIDER within the inspection, testing and
evaluation period or any extension of that period, that the Software does not
satisfy the acceptance criteria, CUSTOMER shall be deemed to have accepted the
Software upon expiration of such period. Promptly upon completion of
Acceptance Testing or the date the Software is deemed accepted under the
foregoing sentence, CUSTOMER shall deliver to PROVIDER a letter in the form
set forth as Schedule E (the "Acceptance Letter") stating that it accepts the
Software. The failure of CUSTOMER to deliver the Acceptance Letter shall not
in any way reduce, offset or defeat the fact that CUSTOMER shall have
absolutely and without condition be deemed to have accepted the Software in
the event CUSTOMER does not give written notice to PROVIDER within the
inspection, testing and evaluation period or any extension of that period,
that the Software does not satisfy the acceptance criteria.
6
<PAGE>
2.12 Training. PROVIDER shall provide such training for that number of
CUSTOMER's personnel at such dates and locations as may be set forth in an
applicable Schedule or as may otherwise be agreed to by the Parties. Such
training will be of sufficient scope and depth to permit CUSTOMER's personnel
who complete the training to operate, manage and administer the Software. The
content of such training will be specified in the applicable Schedule. At the
CUSTOMER's request, PROVIDER will provide training of CUSTOMER's end users as
set forth in the Fee Schedule (Schedule 1B) or as otherwise agreed to by the
Parties.
2.13 Warranty Period Support. During the Warranty Period, PROVIDER will
provide the support services described below. After receipt of the Acceptance
Letter, unless otherwise agreed in the applicable Schedule, PROVIDER's Project
Manager will be available on-site to assist CUSTOMER for the first five days
(or such other period set forth in the Project Plan) of the Warranty Period.
During the Warranty Period, PROVIDER shall also provide to CUSTOMER, free of
charge, support services on a twenty-four hour a day, seven days a week basis
with the response times, service level commitment, types of support services
and other terms and conditions described in PROVIDER's standard service level
commitment policy as it may be amended from time to time. CUSTOMER agrees that
it has received such policy and shall adhere to and be bound by it. In
addition, PROVIDER's Project Manager and chief support person for the Software
will participate in a weekly call with CUSTOMER's Project Manager and
designated personnel to discuss the status of any open trouble reports and
related matters, and PROVIDER's chief support person for the Software will
contact CUSTOMER's designated personnel on a daily basis to review progress.
Calls from CUSTOMER to PROVIDER will be made through the CUSTOMER's designated
personnel.
2.14 Future Maintenance and Support. Following expiration of the Warranty
Period, maintenance and support can be purchased by CUSTOMER from PROVIDER
through a maintenance and support agreement to be negotiated between the
parties.
2.15 Documentation. Upon delivery of the Software, PROVIDER will provide
to CUSTOMER all user documentation available for the Software. On an ongoing
basis, PROVIDER will provide CUSTOMER with additional documentation relevant
to the Software, as it becomes commercially available. CUSTOMER shall have the
right to use such documentation solely for the purpose of providing service
and support to its end users. All documentation disclosed by PROVIDER
hereunder shall be subject to the confidentiality provisions set out in the
Nondisclosure Agreement and in this Agreement.
2.16 Excusable Delays. Any delay in the delivery of the Software as set
out in the applicable Schedule or the non-performance of any provision of this
Agreement caused by conditions beyond the reasonable control of a Party shall
not constitute a breach of this Agreement by such Party nor result in any
penalties, monetary or otherwise, provided that the Party affected by such
conditions has taken reasonable measures to notify the other Party of the
delay in writing. A Party's time for performance shall be deemed to be
extended for a period equal to the duration of the conditions beyond its
control. For the purposes of this Section, conditions beyond a Party's
reasonable control shall include, but are not limited to, natural disasters,
acts of government after the date of the Agreement, acts of God or the public
enemy, fires or other loss of facilities, floods, epidemics, quarantine
restrictions, strikes, freight embargoes, failure of a common carrier, delays
or failures of access involving the Internet, World Wide Web or similar
services including network traffic and configuration problems therewith,
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unusually severe weather, labor disputes, riots, acts of war or terrorism, and
the failure by the other Party to provide timely co-operation or necessary
resources to complete any task required to be performed by it under this
Agreement. Failure of subcontractors engaged by a Party to perform its duties
shall not be considered a condition beyond such Party's reasonable control.
2.17 Marketing Obligations. The parties hereto agree and understand that a
significant and compelling part of the consideration PROVIDER expects to
receive from this Agreement and the Acquisition Transaction lies in the
ability to fully and effectively market its products to the vast network of
patients, physicians, other parties and affiliates within CUSTOMER's networks
("overall network"). Accordingly, CUSTOMER agrees to actively endorse and
support PROVIDER's efforts to market all of PROVIDER's products and services
so that PROVIDER can achieve maximum penetration of its product and service
offerings throughout CUSTOMER's overall network. Without limiting the
generality of the foregoing, the parties' rights and obligations with respect
to this marketing assistance shall include without limitation the
following:
(a) CUSTOMER shall identify PROVIDER as its provider of the products and
services set out on the Work Plan on all literature and marketing materials in
which such items are routinely mentioned or referenced;
(b) CUSTOMER shall provide PROVIDER with full access to and liaison with
CUSTOMER's product marketing department and all related divisions, as
reasonably requested by PROVIDER, so as to completely integrate PROVIDER's
service and product offerings into and with the marketing and sales activities
of PROVIDER;
(c) CUSTOMER shall communicate orally and in writing to its
participating and prospective physicians the advantages of utilizing the
products and services of PROVIDER and CUSTOMER shall do this by integrating
such announcements into CUSTOMER's communications with its overall network;
(d) CUSTOMER shall, not later than thirty (30) days after the initiation
of services hereunder, provide to PROVIDER a list of detailed data regarding
CUSTOMER's "high prescribing and high lab ordering" physicians to target for
penetration by PROVIDER; and CUSTOMER shall provide updates to such detailed
date from time to time as reasonably requested by PROVIDER;
(e) PROVIDER shall have the right to use CUSTOMER's trademarks, service
marks, corporate name, trade names and logos (hereinafter collectively
"marks") as PROVIDER shall deem necessary and fit in its marketing efforts,
provided, however, that CUSTOMER shall have the right to participate in
structuring the layout, context and content within which its marks are used
prior to PROVIDER actually disseminating any materials containing the marks;
(f) CUSTOMER shall sponsor a reasonable number of reference inquiries
and visits by customers and potential customers of PROVIDER;
(g) CUSTOMER shall provide all members of the overall network with a
strong financial incentive to induce those members to utilize the services
provided by PROVIDER such that any such members deciding to utilize PROVIDER's
services (hereinafter "participating members") would receive inducement
consideration, including, but not limited to, (i) earlier reimbursement for
those participating members with respect to services provided by the
participating members to CUSTOMER's overall network, (ii) additional volume
distributions to those participating members to increase their share of
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business from CUSTOMER's overall network and/or (iii) a premium to the current
pricing paid by CUSTOMER to all such participating members for the services
provided by such participating members to CUSTOMER or on CUSTOMER's behalf.
ARTICLE 3
OWNERSHIP OF SOFTWARE APPLICATIONS
3.1 Grant of License. Subject to the payment of all compensation due
under this Agreement and all other terms and conditions herein, PROVIDER
grants to CUSTOMER for the term hereof a perpetual, personal,
non-transferrable, non-exclusive license to the Software in object code form
solely for the purpose of serving the normal business operations of CUSTOMER
as set out in the applicable Schedule.
3.2 Term of License. CUSTOMER's license for the Software to be provided
by PROVIDER under the first Statement of Work is effective from the later date
of signing of this Agreement and payment of the consideration hereunder.
CUSTOMER's license for any other Software will be effective from the later
date of delivery of the Software or payment of the consideration therefor.
Each license shall continue throughout the term of this Agreement and
throughout any expansion to that term agreed to by the parties, but no license
issued hereunder shall extend any further..
3.3 Extent of License. The license granted hereunder to CUSTOMER is for
its sole use on a designated platform described in the Site Requirements
(i.e., operating system with corresponding serial number) (the "Designated
Platform") set forth in the applicable Schedule with permitted access to its
Project Management Team for each Software application described in the
applicable Schedule. Such license permits, except as otherwise provided
herein or in the applicable Schedule, access to the Software through the use
of an on-line modem connecting to the Designated Platform. No copy of the
Software is to be maintained anywhere on the network other than on the
Designated Platform at the Installation Site. CUSTOMER may make one (1)
additional copy of the Software in machine-readable form for back up purposes
only. CUSTOMER will obtain PROVIDER's prior written consent before granting
networking privileges with the Software to any Party not permitted under the
applicable Schedule. CUSTOMER acknowledges and agrees that PROVIDER may, from
time to time, acting reasonably, place such restrictions on the use of the
Software on the network as it deems necessary to protect its proprietary
rights in the Software (including, where appropriate, the withholding of
access privileges to one or more CUSTOMER's clients or members or
participants).
3.4 Permitted Uses. CUSTOMER acknowledges and agrees that no right or
license is granted under this Agreement for use of the Software for any
purpose other than set out in the applicable Schedule, or for use on any
equipment other than the Designated Platform at the Installation Site or such
other hardware as may be agreed to by PROVIDER, from time to time. CUSTOMER
acknowledges that the Software is proprietary to PROVIDER and constitutes a
trade secret of PROVIDER under applicable State and Federal law, and CUSTOMER
agrees not to make or to authorize anyone to make or to distribute copies or
to use the Software or related documentation in any manner inconsistent with
PROVIDER's exclusive ownership or for any purpose other than for the normal
business operations of CUSTOMER as set out in the applicable Statement of Work
unless otherwise specifically agreed to in writing by PROVIDER. Without
limiting the generality of the foregoing, CUSTOMER may not:
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(a) use the Software or make copies of all or any part of it, other than
as expressly permitted in this Agreement;
(b) translate, change or reverse engineer the Software or its method of
operation by debugging, disassembling, reprogramming or by any other means;
(c) modify, adapt or create derivative works based on all or any part of
the Software;
(d) rent, lease, sell, sublease, distribute, merge, assign, transfer,
share, sub-license or make available to another person, the Software or any
copy, in any way, in whole or in part, except as expressly provided for in the
applicable Schedule;
(e) sell documentation, forms or other materials generated in
conjunction with the Software to third parties;
(f) use the Software for aiding or creating a competitive software
package and furnish information, data or copies of documentation concerning
the input or output of the Software to any one for the purpose of aiding in
the design or creation of a competitive software package; or
(g) provide access to any of the Software or to any of the other items
mentioned in subsections a through f above, to any person that is not
affiliated with CUSTOMER.
ARTICLE 4
LICENSE FEE
4.1 License Fee. The consideration (the "License Fee") payable by CUSTOMER
to PROVIDER for licensing of the Software shall be as set forth or referenced
in the Fee Schedule.
4.2 Implementation Fee. The consideration (the "Implementation Fee")
payable by CUSTOMER to PROVIDER for services to be rendered in the
Implementation phase shall be as set forth or referenced in the applicable Fee
Schedule.
4.3 Payment of Amounts. CUSTOMER shall pay and satisfy the License and
Implementation Fees, Reimbursable Expenses and other amounts due under the Fee
Schedule to PROVIDER by electronic funds transfer or as PROVIDER may otherwise
direct, in accordance with the Payment Milestones (if any) or other due dates
set forth in the applicable Fee Schedule. PROVIDER shall invoice CUSTOMER
upon each Payment Milestone (if any) or other due date as provided in the Fee
Schedule. Invoices for Reimbursable Expenses will be issued monthly and will
be supported by appropriate documentation. CUSTOMER shall pay PROVIDER no
later than thirty (30) days of its receipt of PROVIDER's invoice.
4.4 Payment of Taxes. In addition to the License Fee payable hereunder,
CUSTOMER shall pay all taxes and other assessments applicable to, or resulting
from transactions contemplated by this Agreement (other than taxes due on
PROVIDER's net income).
4.5 Late Payment Charge. A late payment charge of 1.5% per month will be
assessed on amounts which are not paid when they are due.
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ARTICLE 5
INTELLECTUAL PROPERTY
5.1 Ownership of Software. CUSTOMER acknowledges that it is not acquiring
any ownership rights in the Software (which term includes modifications), or
any copies thereof, or any copyright, trade secret, patent and other
intellectual property rights therein (including those of third parties which
PROVIDER has the right to use) and that PROVIDER retains all right, title and
interest in and to the Software, including all intellectual property rights
therein. Physical copies of the Software (in diskette, tape or other form
provided by PROVIDER) shall remain the property of PROVIDER, and such copies
shall be deemed to be licensed to CUSTOMER during the term of the license
granted pursuant to this Agreement. CUSTOMER shall not alter or remove any
copyright, trade secret, patent, proprietary or other legal notices contained
on or in the Software and shall reproduce all such notices that are contained
on or in the Software on the copy permitted to be made by CUSTOMER for backup
purposes only.
5.2 Confidentiality of Documentation. All information, data, drawings,
specifications, documentation, software listings, source or object code which
PROVIDER has created in the development of the Software and the performance of
the terms of this Agreement or which it may from time to time create in
supporting or enhancing the Software is proprietary or confidential. CUSTOMER
agrees that it shall use the same solely in accordance with the provisions of
this Agreement and that it shall for the term set out in Article 6 below --
not at any time during or after completion, expiration or termination of this
Agreement disclose the same, directly or indirectly, to any third party
without PROVIDER's prior written consent.
ARTICLE 6
PROPRIETARY INFORMATION; NON-COMPETITION
6.1 Proprietary Information. The Parties agree that the terms of the
Nondisclosure Agreement, Exhibit F, shall apply to and bind the Parties for a
term of twenty (20) years, notwithstanding any term, termination, breach or
material breach of this Agreement.
6.2 Non-Competition. The parties hereto agree and understand that
CUSTOMER, as of the date of its execution hereof, shall participate on a going
forward basis in the Board of Directors of PROVIDER. Accordingly, because (a)
CUSTOMER will have access to extraordinarily confidential, proprietary and
valuable information of PROVIDER and (b) CUSTOMER will be in a fiduciary
position in which any deviation from the normal loyalty and fidelity of a
fiduciary could seriously injure the business of PROVIDER, the parties hereto
stipulate and agree that it would be unfair and irreparably damaging to
PROVIDER if CUSTOMER were permitted to compete against PROVIDER or to assist
in competitors' efforts against PROVIDER, whether directly or indirectly.
Therefore, during the term of this Agreement, CUSTOMER shall not without the
prior written consent of PROVIDER directly or indirectly compete with or
against, or participate in the competition with or against, PROVIDER. Such
prohibition against CUSTOMER participating in competition against PROVIDER
shall include, without limitation:
6.1.1 Prohibition against Utilizing Competitive Services and
Products. CUSTOMER agrees that it shall not utilize the services or products
of any provider engaged in the business of providing technological solutions
of the kind set out in the Statement of Work or of any technological or
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service solutions similar or related thereto, other than and with the sole
exception of CUSTOMER's utilization hereunder of PROVIDER's services and
products; and
6.1.2 Prohibition against Engaging in Competitive Activity. CUSTOMER
agrees that it shall not engage in any activity directly or indirectly
competitive with or adverse to the business or welfare of PROVIDER, whether
alone, as a partner, or as an officer, director, employee, consultant, or
holder of more than one percent (1%) of the capital stock of any other
corporation.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification by CUSTOMER.
(a) CUSTOMER shall defend, indemnify and hold harmless PROVIDER from
and against any and all claims of infringement of copyright, trade secret
rights, patents, trademarks, industrial designs, or other property rights
affecting the Software that are based upon or due to the use by the CUSTOMER
of technology that is not PROVIDER's technology but was selected by CUSTOMER
anyway, or due to changes or alterations made to the Software, including
customization of the software or other intellectual property forming part of
or incorporated into the Software, by CUSTOMER or at its direction.
(b) If PROVIDER gives CUSTOMER notice of any such infringement claim
made against PROVIDER and provides such assistance as is reasonably requested
by CUSTOMER in defending, responding to or settling such claim, CUSTOMER
shall, at its own expense, defend any such claims and make settlements thereof
at its own discretion.
(c) In the event that any such infringement occurs or may occur,
CUSTOMER may instruct PROVIDER at CUSTOMER's expense to:
(i) procure for CUSTOMER the right to continue using the
Software or infringing part thereof; or
(ii) modify or amend the Software or infringing part thereof so
that the same becomes non-infringing; or
(iii) replace the Software or infringing part thereof by other
software of similar capability.
7.2 Indemnification by PROVIDER.
(a) PROVIDER shall defend, indemnify and hold harmless CUSTOMER from
and against any and all claims of infringement of copyright, trade secret
rights, patents, trademarks, industrial designs, or other property rights
affecting the Software provided such claims are not due to the use by CUSTOMER
of technology that is not PROVIDER's technology but was selected by CUSTOMER
anyway, and provided such claims are not due to changes or alterations made to
the Software, including customization of the software or other intellectual
property forming part of or incorporated into the Software, by CUSTOMER or at
its direction.
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(b) If CUSTOMER gives PROVIDER notice of any such infringement claim
made against CUSTOMER and provides such assistance as may be reasonably
requested by PROVIDER in defending, responding to or settling such claim,
PROVIDER shall, at its own expense, defend any such claims and make
settlements thereof at its own discretion.
(c) In the event that PROVIDER receives notice of a valid claim or
demand or if CUSTOMER's use of the Software shall be prevented by injunction
(provided such event leading to the injunction do not give rise to a claim
under subsection 7.1(a)), PROVIDER shall, at its option and expense, procure
for CUSTOMER the right to continued use of the Software as provided hereunder,
modify the Software so that it is no longer infringing, or terminate this
Agreement and refund to CUSTOMER the fees paid under this Agreement, reduced
in a reasonable manner to reflect CUSTOMER's use of the Software. This
section 7.2 states PROVIDER's entire liability to CUSTOMER for any claim of
intellectual property rights infringement.
7.3 Participation in Defense. A Party may participate at its expense in
the defense of any action or claim which may be asserted against it and for
which such Party seeks indemnity pursuant to the provisions of this Article,
or such indemnified Party may assume the defense of such claim or action,
including the right to settle or compromise any claim against it without the
consent of the indemnifying Party, provided that in doing so it shall be
deemed to have waived its right to indemnification except in cases where the
indemnifying Party has declined to defend the claim. The indemnifying Party
may settle an action, suit or proceeding without the indemnified Party's
consent only if such settlement includes a full general release of the
indemnified Party.
7.4 Indemnified Persons. In this Article, references to CUSTOMER and
PROVIDER shall be deemed to include their respective directors, officers,
agents, employees and affiliates.
ARTICLE 8
WARRANTY
8.1 Warranty of PROVIDER. During the Warranty Period, PROVIDER warrants
to CUSTOMER that the Software will substantially comply with Software
Requirements. The warranty set forth in the preceding sentence is the only
warranty granted by PROVIDER under this Agreement. PROVIDER DISCLAIMS ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND
ANY ORAL OR WRITTEN REPRESENTATIONS, PROPOSALS OR STATEMENTS MADE PRIOR TO
THIS AGREEMENT. PROVIDER DOES NOT WARRANT THAT THE SOFTWARE WILL MEET
CUSTOMER'S NEEDS OR BE FREE FROM ERRORS, OR THAT THE OPERATION OF THE SOFTWARE
WILL BE UNINTERRUPTED.
8.2 Year 2000 Compliant. PROVIDER will use all reasonable efforts to
ensure that the Software is designed and has been tested for use prior to,
during, and after the calendar year 2000AD so that the Software will operate
during each such time period without error relating to date data, specifically
including any error relating to, or the product of, date data which represents
or references different centuries or more than a century. PROVIDER shall have
no liability for any failure of CUSTOMER's or third party's software,
hardware, applications, databases or other systems to be year 2000 compliant
or any year 2000 issues not solely caused by the Software.
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8.3 Limitation of Liability. CUSTOMER's sole remedy under this limited
warranty is replacement of the Software. Subject to Section 8.1 above, the
Software is provided on an "as is" basis, and the entire risk as to the
results and performance of the Software is assumed by CUSTOMER. NEITHER
PROVIDER NOR ITS DISTRIBUTORS, SUPPLIERS, AGENTS, OFFICERS, AND DIRECTORS
SHALL HAVE ANY LIABILITY TO CUSTOMER OR ANY OTHER PERSON OR ENTITY FOR ANY
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES WHATSOEVER, INCLUDING
BUT NOT LIMITED TO, LOSS OF REVENUE OR PROFIT, FAILURE TO REALIZE ANTICIPATED
PROFITS OR SAVINGS, LOST OR DAMAGED DATA, OR OTHER COMMERCIAL OR ECONOMIC
LOSS, EVEN IF PROVIDER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR
THEY ARE FORESEEABLE; OR FOR CLAIMS BY ANY OTHER PARTY. PROVIDER'S MAXIMUM
AGGREGATE LIABILITY TO CUSTOMER, AND THAT OF PROVIDER'S DISTRIBUTORS,
SUPPLIERS, AGENTS, OFFICERS, AND DIRECTORS, SHALL NOT EXCEED THE AMOUNT PAID
BY CUSTOMER FOR THE SOFTWARE. THE LIMITATIONS IN THIS SECTION SHALL APPLY
WHETHER OR NOT THE ALLEGED BREACH, DEFAULT, NONPERFORMANCE OR FAILURE IS A
BREACH OF FUNDAMENTAL CONDITION OR TERM, OR A FUNDAMENTAL BREACH. In no event
will PROVIDER be liable for any damages, loss or costs whatsoever of any
client of CUSTOMER or other user of the Software however incurred.
8.4 Exclusions. CUSTOMER assumes full responsibility for the use of the
Software and documentation and any information entered, used or stored
thereon, including without limitation, protection from data viruses, security
of information or systems, any unintended modification, destruction or
disclosure and for the accuracy and integrity of the results. PROVIDER
assumes no responsibility for the foregoing.
8.5 Software and Data. PROVIDER shall not be responsible for the repair
of damage to, or the replacement or restoration of any software or data files
resulting from accident, transportation, neglect or misuse, failure of
electrical power, air conditioning or humidity control or other causes.
CUSTOMER will be responsible for regularly backing up all software and data
utilized by the Software. If any act or omission by PROVIDER causes any loss
or damage to CUSTOMER's software or data, PROVIDER's sole obligation and
CUSTOMER's sole remedy shall be for PROVIDER to provide reasonable assistance
to CUSTOMER to restore the lost or damaged data from the most recent backup
copy maintained by CUSTOMER. PROVIDER shall have no obligation to recover,
restore or re-enter any other software, data, information or records.
ARTICLE 9
TERMINATION
9.1 Events of Default. The following events shall constitute a "Default":
(a) a Party fails to pay any amounts when due and does not pay such
amounts within fifteen (15) days of receipt of written notice of such payment
failure; or
(b) a Party has failed to comply with any obligation herein (other
than a payment default under subsection (a)), the non-defaulting Party has
exhausted all specific contractual rights and remedies in the precise manner
set forth in Articles 1 through 8 and 11 of this Agreement, and the remaining
lack of compliance of the defaulting Party remains uncured for a period of
thirty (30) days after notice of such breach is sent by the non-defaulting
Party to the Party alleged to be in default in accordance with Section 9.2.
9.2 Notice of Default. A Default shall not be deemed to have occurred
unless in the case of a Default set forth in Section 9.1(a) and (b) the
non-defaulting Party has complied with the escalation procedure set forth in
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Section 10.1 and the non-defaulting Party has given written notice (a "Default
Notice") to the defaulting Party in accordance with the requirements of this
Section 9.2. A Default Notice shall specify in reasonable detail the events
which the non-defaulting Party believes have occurred and which constitute or
evidence a Default, the provisions of this Agreement (including any applicable
provisions of any Schedule) which have not been performed or complied with,
and the actions which, in the opinion of the non-defaulting Party, would be
required to fulfill the requirements of this Agreement and cure the Default.
An immaterial failure to comply precisely with the foregoing notice
requirements shall not affect the validity of a Default Notice if the
defaulting Party was not prejudiced by such failure.
9.3 Extension of Cure Period. The cure period provided for in Section 9.1
(b) shall be extended for sixty (60) days (or for such longer period as the
parties may agree in writing) if (a) the defaulting Party is making its best
efforts to promptly cure the nonperformance, (b) a cure cannot practically be
achieved within thirty (30) days, and (c) within the first thirty (30) days of
the initial cure period, the defaulting Party gives the non-defaulting Party
written notice of the defaulting Party's need for an extension and of the
actions it is taking to cure its breach or nonperformance and the number of
days which it will require to cure its breach or nonperformance. As used in
the preceding sentence, the term, "best efforts" shall mean the application of
diligence and resources reasonably necessary to cure the nonperformance in a
business like fashion with due regard for the seriousness of the
nonperformance and its impact upon the other Party and those to whom the other
Party may have legal or contractual obligations.
9.4 Termination for Default. Only upon (a) the occurrence of any Default
which is not excused pursuant to this Agreement, (b) the inability to resolve
the dispute under Section 10.1, (c) the delivery of a Default Notice to the
defaulting Party as provided in Section 9.2, (d) the circumstance where a
specific remedy for the Default is not set forth in Articles 1 through 8 and
11 of this Agreement and/or such a specific remedy is so set forth but
compliance with such remedial procedure has not yielded a resolution of the
Default and (e) the defaulting Party's failure to cure the Default set out in
the Default Notice prior to the expiration of the cure period specified in
Section 9.2(b) as extended pursuant to Section 9.3, the defaulting Party shall
be deemed to be in Material Breach of this Agreement and the non-defaulting
Party shall have the right to terminate this Agreement or, alternatively, to
terminate the Schedule and Software license to which the Default relates (at
the discretion of the non-defaulting Party), by delivering written notice of
termination to the defaulting Party.
9.5 Effect of Termination. Upon termination of this Agreement (and
irrespective of which Party terminates this Agreement), all of the following
shall apply:
(a) CUSTOMER shall immediately cease use of the Software;
(b) CUSTOMER shall, within 10 days of such termination, deliver to
PROVIDER all copies and portions of the Software and related materials and
documentation in its possession furnished by PROVIDER under this Agreement or
the Schedule or Software license which has been terminated;
(c) All amounts payable or accrued to PROVIDER under this Agreement
shall become immediately due and payable; and
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(d) All rights and licenses granted to CUSTOMER under this Agreement
or the applicable Schedule or Software license shall immediately terminate.
ARTICLE 10
DISPUTE ESCALATION AND MEDIATION
PROVIDER and CUSTOMER hereby agree that they will use all reasonable
efforts to resolve any disputes arising out of this Agreement in a
co-operative and expeditious manner. If the Account Managers are unable to
resolve the dispute within ten (10) days of its referral, either Party may
escalate the dispute to PROVIDER's Chief Information Officer and CUSTOMER's
Chief Information Officer or such other person(s) as may be identified by
PROVIDER and/or CUSTOMER. Upon such escalation, the Chief Information
Officers for each Party shall meet in person to discuss the outstanding issues
and attempt in good faith to reach a resolution. If the foregoing procedure
fails to resolve the dispute within five (5) days of its referral, either
Party may further escalate the dispute to PROVIDER's Chief Executive Officer
and CUSTOMER's Chief Executive Officer, and these two persons must meet in
person within thirty (30) days of the referral. If these CEOs are unable to
resolve the dispute within seven (7) days thereafter, the dispute may be
litigated at the option of either Party.
ARTICLE 11
GENERAL
11.1 Further Assurances. Each of the parties hereto from time to time at
the request and expense of any other Party hereto and without further
consideration, shall execute and deliver such other instruments of transfer,
conveyance and assignment and take such further action as the other Party may
require to more effectively complete any matter provided for herein.
11.2 Entire Agreement. This Agreement including the attached Schedules
constitutes the entire agreement among the parties hereto and except as herein
stated and in the instruments and documents to be executed and delivered
pursuant hereto, contains all of the representations and warranties of the
parties hereto. There are no oral representations or warranties among the
parties hereto of any kind, and indeed the parties stipulate that no such
representations or statements were in fact made by either Party. This
Agreement may not be amended or modified in any respect except by written
instrument signed by both Parties hereto.
11.3 Applicable Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
regard to its choice or conflict of law rules. Any dispute hereunder shall be
litigated and tried in the federal courts situated in Los Angeles, California.
11.4 Severability. Any covenant or provision hereof determined to be void
or unenforceable in whole or in part shall not be deemed to affect or impair
the validity of any other covenant or provision hereof and the covenants and
provisions hereof are declared to be separate and distinct.
11.5 Notices. Any notice required or permitted to be given hereunder
shall be in writing, addressed in the case of PROVIDER to its signator signing
this Agreement and in the case of CUSTOMER to its signator signing this
Agreement (or such other person identified by CUSTOMER) and sent to the
address sent out on the execution page of this Agreement. Notices shall be
deemed given (a) upon delivery in person; (b) upon receipt if sent on a
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Business Day by facsimile transmission or other similar means of electronic
communication if receipt is duly confirmed, (c) upon receipt as shown in the
records of any reputable expedited delivery service or (d) three days after
posting with the United States Postal Service, postage prepaid, certified or
registered mail, return receipt requested. Any Party hereto or others
mentioned above may change its address by written notice to the others
delivered in the manner set forth above.
11.6 Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns. Notwithstanding the foregoing, this
Agreement shall not be assignable by any Party hereto without the express
written consent of the other Party hereto.
11.7 Independent Contractors. The parties acknowledge and agree that
PROVIDER will perform its obligations hereunder as an independent contractor
and shall not be deemed an employee or agent of CUSTOMER nor shall any of its
employees, contractors or agents be deemed to be employees of CUSTOMER.
11.8 Counterparts and Facsimile. This Agreement may be executed by the
Parties in any number of separate counterparts each of which, when so executed
and delivered, shall be an original, but all such counterparts shall together
constitute one and the same instrument. Counterparts may be executed either
in original or faxed form and the parties adopt any signatures received by a
receiving facsimile machine as original signatures of the Parties, provided,
however that any Party providing its signature in such manner shall promptly
forward to the other Party an original of the signed copy of this Agreement
which was so faxed.
11.9 Due Execution. Each Party represents to the other Party that (a) it
has the power and authority to execute, deliver and perform this Agreement and
that the execution, delivery and performance of this Agreement have been duly
authorized by all necessary action, and (b) this Agreement has been duly
executed and delivered by such Party and constitutes the legal, valid and
binding obligation of such Party enforceable against it in accordance with its
terms.
11.10 Survival of Obligations. The Parties' respective obligations under
this Agreement which by their nature would continue beyond the termination or
expiration of this Agreement, including, without limitation, those contained
in the Articles entitled Intellectual Property, Confidential Information,
Indemnification and Dispute Resolution shall survive the termination or
expiration of this Agreement.
RESERVED SPACE
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IN WITNESS WHEREOF this Agreement has been executed by the Parties hereto
on the date first written above.
PRIME RX.COM, INC.
By: /s/ Prem Reddy
Title: Chief Executive Officer
Address: ____________________________
____________________________
Facsimile #:
e-mail address: _________________________
PRIME RX.COM, INC.
By: /s/ David W. Rombro
Title: President
Address: ____________________________
____________________________
Facsimile #:
e-mail address: _________________________
E-MEDSOFT.COM
By: /s/ John F. Andrews
Title: Chief Executive Officer
Address: ____________________________
____________________________
Facsimile #:
e-mail address: _________________________
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SCHEDULE 1A
STATEMENT OF WORK
Compliant with Encounter Data Guide appended hereto by the Parties prior to
execution, and development of full, web-based, subscription based network
pursuant to policies and pricing as may be promulgated from time to time by
PROVIDER, within PROVIDER's sole discretion, but provided that such pricing
shall be at levels such that CUSTOMER receives discounts of at least eight
percent (8%) from the standard pricing of PROVIDER.
In exchange for this preferred pricing being provided to CUSTOMER, PROVIDER
shall develop and implement and provide for all of CUSTOMER's electronic needs
including all software, portal, web and hardware products and services in
the following areas (among others):
1. Consumer web portals;
2. Provider web portals;
3. Broker web portals;
4. Employer web portals;
5. Claims and encounters;
6. Eligibility and benefits verification;
7. Claim status inquiry;
8. Referrals and authorizations;
9. Electronic remittance advice and funds transfer;
10. Coordination of benefits;
11. First report of injury;
12. Credentialing;
13. Drug history;
14. Prescription communication services;
15. Lab order and results.
<PAGE>
SCHEDULE 1B
FEE SCHEDULE
CUSTOMER agrees to comply with PROVIDER's standard fee schedule as may be
updated from time to time, provided that such fee schedule shall be modified
to enable CUSTOMER to receive a eight percent (8%) discount on all services
and products as measured from PROVIDER'S standard fee schedule. CUSTOMER
understands and acknowledges that PROVIDER requires payment under its standard
fee schedule as services are rendered.
In addition to such fees set forth above, PROVIDER shall also pay to CUSTOMER
under the following annuity schedule:
For the duration of this Agreement, the Parties agree to establish a
proprietary Master Portal wherein all of CUSTOMER's products and services
shall be able to be marketed and sold to the general public in a manner to be
determined by PROVIDER. The anticipated Master Portal shall function in such
a way as to require it to be the "ultimate destination" Portal that a client
will enter into prior to doing business electronically with CUSTOMER. For the
duration of this Agreement and any extension thereof, PROVIDER shall be
entitled to receive a "per click" payment for each customer usage of the
Master Portal. PROVIDER agrees to a per click sign-on charge. Such sign-on
charge would include (without limitation) those clients of CUSTOMER who
normally use the Internet for the exchange of proprietary data as between
CUSTOMER and the clients. However, CUSTOMER will pay a charge of 5 cents per
click for all Internet traffic. Such 5 cent fee will be monitored by the net
and payable each month. During the first year of the contract such minimum
payments will be $15,000 per month or 5 cents per click whichever is greater
so long as PROVIDER continues to maintain the network in an appropriate
manner. During the second year of this contract, so long as the net is
provided and maintained by PROVIDER the minimum charge will be $20,000 per
month or 5 cents per click whichever is greater. In the third year and every
successive year of the contract the charge will be $25,000 per month minimum
or 5 cents per click whichever is greater. In addition to the above
consideration, to the extent that CUSTOMER obtains new clients as a result of
their internet response, that is, the client must come to use through the
Internet, whether that new client comes from the PROVIDER client base or a new
client base that comes to CUSTOMER as a result of CUSTOMER'S establishment of
a portal, PROVIDER will receive $1,000 cash when such client commits to do
business with CUSTOMER.
<PAGE>
SCHEDULE 1C
PROJECT PLAN
To be attached by the parties after execution in the ordinary course of
business.
<PAGE>
SCHEDULE 1D
SOFTWARE REQUIREMENTS TO BE PROVIDED
To be attached by the parties after execution in the ordinary course of
business.
<PAGE>
SCHEDULE E
ACCEPTANCE LETTER
PROVIDER PROJECT MANAGER
[insert address]
RE: Acceptance Testing
This letter confirms that the Software provided under the Statement of Work
dated ______________ has completed the Acceptance Tests and pursuant to
Section 2.10 of the Master Agreement between PROVIDER and CUSTOMER, CUSTOMER
hereby accepts the Software.
___________________________[insert CUSTOMER name}
By: _________________________________
Name: _______________________________
Title: ________________________________
<PAGE>
SCHEDULE F
NON-DISCLOSURE AGREEMENT
THIS AGREEMENT is made and entered into as of the date and by and between
the parties as set forth below, for the purpose of allowing the parties to
exchange information relevant to business discussions and transactions in
which the parties are about to engage.
THE PARTIES signing below ("PARTIES") hereby agree, on behalf of their
agents, attorneys, predecessors, successors, affiliates, and those acting in
concert with them, to keep all client information strictly confidential. The
term "client information," as used herein, means and includes, without
limitation, all proprietary, confidential, or trade secret information, all
information appertaining or relating in any manner to the businesses of the
PARTIES or in which the PARTIES are involved including any and all literary
material and computer software products that could be or have been registered
or copyrighted, any and all operating manuals or similar materials which
constitute the systems, policies and procedures, and methods of doing business
developed by the PARTIES, and all documentation and information of any kind or
nature exchanged between the PARTIES at any time after the date the PARTIES
signed this Agreement. As to such client information, the PARTIES hereby
acknowledge that, except for their relationship with each other in analyzing a
prospective and potential business relationship and consummating such a
relationship, they would not otherwise have access to the foregoing client
information. During any interaction between the PARTIES and at all times
thereafter, the PARTIES shall not disclose to any person any such client
information. The PARTIES understand that all client information is the sole
property of the Party possessing the information prior to the date of this
letter, and the parties hereto agree not to make any copies thereof, other
than in the ordinary course of business and for purposes of carrying out
whatever business relationships are contemplated to be formed between the
PARTIES. Upon cessation of discussions and transactions between the PARTIES
hereunder, the PARTIES agree that they shall return to the other Party all
client information and that they shall not permit any client information to be
used in any manner whatsoever.
WHEREFORE, the PARTIES have set their hands to and executed this
Agreement below to confirm their consent and agreement to the foregoing terms
and to constitute the formal beginning of their business relationship. By
signing below, the signators expect and intend all entities with which they
are involved in a representative capacity to be bound by this confidentiality
agreement.
Dated: __________________________________
__________________________________
__________________________________
Dated: __________________________________
__________________________________
__________________________________
(Insert correct name of company
and correct name of official, then
so date and execute in the spaces
provided above.)
AGREEMENT
This Agreement is entered into this 7th day of April, 2000 by and among
e-MedSoft.com, a Nevada corporation ("eMed") and Prem Reddy, Richard Hayes,
Raymond Matko, Prime A. Investments and David W. Rombro, ( referred to
collectively as the Shareholders) who together own 100% of the issued and
outstanding shares of common stock of PrimeRX.com, Inc. (formerly known as
Primed Pharmacy Group, Inc.) ("Primed").
WHEREAS, eMed and Primed desire to provide a means by which the
Shareholders can exchange some of their shares of Primed for shares of the
common stock of eMed; and
WHEREAS, the Parties desire that eMed can acquire up to 33 percent of
Primed's outstanding common stock under certain conditions.
NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants set forth below, the parties agree as follows:
1. eMed hereby grants to the Shareholders a ten year option (the
"Option") to exchange their shares of Primed common stock for three million
shares of eMed common stock at an exchange rate which would result in the
Shareholders acquiring three million shares of eMed if the Shareholders
exchanged shares representing 33 percent of the outstanding shares of Primed.
Shareholders will be permitted to exercise their rights under the Option in
whole or in part, from time to time, at their discretion throughout the term
of the Option.
2. In the event that Primed conducts an initial public offering or if
there is a change of control of Primed before the Option is exercised in full,
eMed will have the option of requiring Shareholders to exercise any
unexercised portion of the Option just before the completion of such event. A
change of control for purposes of this paragraph will be defined as a change
in the ownership of Primed where the Shareholders no longer hold at least
fifty percent of the voting control of Primed.
3. The shares of eMed which will be issued to the Shareholders will be
restricted securities as that term is defined in Rule 144, and the shares of
Primed which may be exchanged will similarly be restricted securities.
4. In the event that eMed completes any reorganization, stock splits or
stock dividends before the Option has been exercised in full, the number of
shares of eMed common stock which may be acquired upon the exercise of the
Option will be adjusted accordingly.
5. EMed agrees to include the first 750,000 shares of eMed common stock
acquired by the Shareholders upon the exercise of the Option in the first
registration statement which eMed files after the execution of this Agreement,
other than registration statements on Form S-8 or S-4. This registration
statement will cover the resale of the 750,000 shares, and eMed currently
plans to have such registration statement declared effective by the Securities
and Exchange Commission before July 31, 2000.
<PAGE>
<PAGE>
6. Emed agrees to file a registration statement for any remaining shares
which are acquired by Shareholders upon exercise of the Option and to have
such registration statement declared effective by April 7, 2001. It is the
intent of the parties that this will be a shelf registration which will result
in registered shares of eMed common stock being issued to the Shareholders
upon their exercises of the Option after April 7, 2000.
7. Shareholders agree that with respect to any of their shares of eMed
common stock which are registered, they will not sell, in the aggregate, more
than 10,000 shares per day without the prior written consent of eMed, and no
sales will be made at a price below $8.00 per share. Shareholders further
agree that they will place the eMed shares they are selling in accounts with
Sutro & Company, Inc., and that all sales will be made from these accounts.
The foregoing provisions will not apply to the extent that any shares are
registered in an underwritten offering where the shares are purchased by the
underwriter.
8. The interpretation of this Agreement will be governed by the laws of
the State of California, and any actions to enforce the provisions of this
Agreement must be filed in the State of California.
9. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10. All stock issued hereunder shall be placed in a ten year voting
trust with two trustees: Alan Doris and Rex Beaber or if they both resign,
Bank of America.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
e-MedSoft.com, Inc.
_________________________ By:__________________________
Prem Reddy John F. Andrews, President
_________________________
Richard Hayes
_________________________
Raymond Matko
_________________________
David W. Rombro
Prime A. Investments, LLC
By: _____________________
Prem Reddy
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