U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended January 31, 1996
--------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from N/A to
----------------------- ---------------------
Commission file Number 33-9396-LA
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National Health Enhancement Systems, Inc.
- --------------------------------------------------------------------------------
(Name of small business issuer in its charter)
Delaware 86-0460312
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
Number)
Suite 1750
3200 North Central Avenue
Phoenix, Arizona 85012
(Address of principal executive offices) (Zip Code)
Issuer's telephone number 602-230-7575
Securities registered under Section 12(b) of the Exchange Act:
NONE
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK $.001 PAR VALUE
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [ X ] No [ ].
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [ X ].
Issuer's revenues for its most recent fiscal year: $16,891,143
As of March 29, 1996, the aggregate market value of Registrant's voting shares
held by non-affiliates of shares, based upon the average between the closing bid
and asked prices of such stock as quoted on NASDAQ, was approximately
$12,298,664.
The number of shares of the Registrant's common stock issued and outstanding was
3,835,380 at March 29, 1996.
The Registrant's definitive Proxy Statement to be filed pursuant to Regulation
14A with the Securities and Exchange Commission not later than May 31, 1996 is
incorporated by reference into Part III, Items 9 through 12.
JTZ3602
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TABLE OF CONTENTS
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PAGE
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PART I
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Item 1. Description of Business
Item 2. Description of Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART II
Item 5. Market for Common Equity and Related Stockholder
Matters
Item 6. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Item 7. Financial Statements
Item 8. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
PART III
Item 9. Directors, Executive Officers, Promoters and
Control Persons: Compliance with Section 16(a) of
the Exchange Act
Item 10. Executive Compensation
Item 11. Security Ownership of Certain Beneficial
Owners and Management
Item 12. Certain Relationships and Related Transactions
Item 13. Exhibits and Reports on Form 8-K(*)
SIGNATURES
(*) Confidential Treatment has been requested for portions of this Item.
</TABLE>
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this 10-KSB/A to be signed on its behalf by the undersigned, thereunto
authorized.
NATIONAL HEALTH ENHANCEMENT SYSTEMS, INC.
(Registrant)
By /s/ Jeffrey T. Zywicki
------------------------------------------
Jeffrey T. Zywicki
Chief Financial Officer
Date: August 7, 1996
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EXHIBIT INDEX
Exhibit Page or
number Description Method of Filing
- ------ ----------- ----------------
<S> <C> <C>
2.1 Plan of Reorganization and Incorporated by Reference
Agreement of Merger to Form 8-k filed July 13, 1994
3.1 Certification of Incorporation Incorporated by Reference
of the Company to
Exhibit 3.1 of S-18
No. 33-9396-LA
3.2 Bylaws of the Company Incorporated by Reference
to Exhibit 3.2 of S-18
No. 33-9396-LA
4.1 Specimen Certificate Incorporated by Reference
Representing $.001 par value to Exhibit 4.1 of S-18
Common Stock No. 33-9397-LA
4.2 Form of Warrant to the Incorporated by Reference
Underwriter to Exhibit 4.2 of
Amendment No. 2 to S-18
No. 33-9397-LA
4.3 Form of Warrant to the Incorporated by Reference
Advisor to Exhibit 4.3 of
Amendment No. 2 to S-18
No. 33-9397-LA
10.1 Confirmation of License and Incorporated by Reference
Agreement Regarding Purchase to Exhibit 10.1 of S-18
Option and related letter No. 33-9397-LA
agreement dated October 2, 1986
10.2 Franchising and Licensing Incorporated by Reference
Agreement with The Arizona to Exhibit 10.2 of
Heart Institute, Ltd. Amendment No. 1 to S-18
No. 33-9397-LA
10.3 Assignment of Rights to The Incorporated by Reference
Heart Test to Exhibit 10.3 of S-18
No. 33-9397-LA
10.4 Shareholders Contribution and Incorporated by Reference
Conversion Agreement as to Exhibit 10.4 of S-18
Amended, and related notes held No. 33-9397-LA
by Shareholders and Affiliated
10.5 Form of Outstanding Warrants Incorporated by Reference
to Exhibit 10.5 of S-18
No. 33-9397-LA
Exhibit Page or
number Description Method of Filing
- ------ ----------- ----------------
10.6 Promissory Notes in the Incorporated by Reference
Aggregate amount of $100,000 to Exhibit 10.6 of S-18
Principal No. 33-9397-LA
10.7 Lease for Company's Office Incorporated by Reference
Space dated August 22, 1986 to Exhibit 10.7 of S-18
No. 33-9397-LA
10.7.1 Amendment to Lease for Incorporated by Reference
Company's Office Space dated to Exhibit 10.7.1 to Form
August 22, 1986 10-K filed for the year
Ended January 31, 1987
10.8 Agreement and Plan of Merger Incorporated by Reference
Exhibit 10.8 of S-18
No. 33-9397-LA
10.9 Employment Agreements with Incorporated by Reference
Dr. Larry Gettman and Exhibit 10.9 of S-18
Jeffrey Zywicki No. 33-9397-LA
10.10 Line of Credit Documentation Incorporated by Reference
to Exhibit 10.10 of S-18
No. 33-9397-LA
10.11 Promissory Note in the Incorporated by Reference
Principal Amount of $25,801 to Exhibit 10.11 of S-18
No. 33-9397-LA
10.12 Company Indemnities Incorporated by Reference
to Exhibit 10.12 of S-18
No. 33-9397-LA
10.13.1 Forms of Franchise Incorporated by Reference
Agreement used in 1987 to Exhibit 10.13.1 to
Amendment No. 2 of S-18
No. 33-9397-LA
10.13.2 Forms of Franchise Incorporated by Reference
Agreement used in 1986 to Exhibit 10.13.2 to
Amendment No. 1 and
Amendment No. 2 to S-18
No. 33-9397-LA
10.13.3 Forms of Franchise Agreement Incorporated by Reference
used in 1985 to Exhibit 10.13.3 to S-18
No. 33-9397-LA
10.13.4 Forms of Franchise Agreement Incorporated by Reference
used in 1984 to Exhibit 10.13.4 to S-18
No. 33-9397-LA
Exhibit Page or
number Description Method of Filing
- ------ ----------- ----------------
10.13.5 Franchise Agreements Executed Incorporated by Reference
Agreement to Exhibit 10.13.5 of S-18
No. 33-9397-LA
10.13.6 Existing Area Franchise Incorporated by Reference
Agreement to Exhibit 10.13.6 of S-18
No. 33-9397-LA
10.13.7 Form of Franchise Agreement Incorporated by Reference
used by the Company in 1987 to Form 10-K filed for
year ended January 31,
1988
10.13.8 Form of Franchise Agreement Incorporated by Reference
used by the Company in 1988 to Form 10-K filed for the year ended January 31,
1989
10.13.9 Form of Franchise Agreement Incorporated by Reference
used by the Company in 1989 to Form 10-K filed for the year ended January 31,
1990
10.14 Forms of Rescission offers Incorporated by Reference
to Exhibit 10.14 of S-18
No. 33-9397-LA
10.15 Rescission and Refund Responses Incorporated by Reference
for internal use of Programs to Exhibit 10.15 of S-18
No. 33-9396-LA
10.16 Agreements with Corporations Incorporated by Reference
for internal use of Programs to Exhibit 10.16 of S-18
No. 33-9397-LA
10.17 South Dakota and Wisconsin Incorporated by Reference
"No Action" letters and certain to Exhibit 10.17 of
related documents Amendment No. 1 to S-18
No. 33-9397-LA
10.18 Revised Exhibit A to Form of Incorporated by Reference
Stock Escrow Agreement required to Exhibit 10.18 of
by the Arizona Corporation Amendment No. 1 to S-18
Commission and Shareholder No. 33-9397-LA
lock-up agreements
10.19 Promissory Note in Principal Incorporated by Reference
Amount of $50,000 and related to Exhibit 10.19 of
materials Amendment No. 1 to S-18
No. 33-9397-LA
10.20 Agreement with Advisor Incorporated by Reference
to Exhibit 10.20 of
Amendment No. 1 to S-18
No. 33-9397-LA
Exhibit Page or
number Description Method of Filing
- ------ ----------- ----------------
10.21 Notification of Option to Incorporated by Reference
Purchase the Personal Fitness to Exhibit 10.21 to Form
Profile Software 10-K filed for the fiscal
year ended January 31, 1987
10.21.1 List of Subsidiaries Page 37
10.22 Promissory Note in Principal Incorporated by Reference
Amount of $75,000 for purchase to Exhibit 10.22 to Form
of Personal Fitness Profile 10-K filed for the fiscal
Software and related materials year ended January 31, 1987
10.23 Employment Agreement with Incorporated by Reference
James Wichterman to Exhibit 10.23 to Form
10-Q filed for the quarter ended April 30, 1987
10.24 Term Note Payable in the Incorporated by Reference
Principal Amount of $75,000 to Exhibit 10.24 to Form
10-Q filed for the
quarter ended April 30, 1987
10.25 Software Customization and Incorporated by Reference
License Agreement with to Exhibit 10.25 to Form
Resource Center Enterprises, 10-Q filed for the
Inc. dated May 22, 1987 quarter ended July 31, 1987
10.26 Med Plus Corporation Distribution Incorporated by Reference
and Sales Agreement dated to Exhibit 10.26 to Form
September 19, 1987 10-Q filed for the quarter ended October 31, 1987
10.27 Distribution Agreements Incorporated by Reference
for Marketing Consultants to exhibit 10.27 to Form
10-Q filed for the quarter ended October 31, 1987
10.28 Consulting, Development Incorporated by Reference
and License Agreement with to Exhibit 10.28 to Form
Humana Inc., dated December 10-K filed for the year
31, 1987 ended January 31, 1988
10.29 Agreement with Healthscan, Inc. Incorporated by Reference
to discontinue use of Healthscan to Exhibit 10.29 to Form
10-K filed for the year
ended January 31, 1988
10.30 Stock Option Letter with Incorporated by Reference
Jim Wichterman to Exhibit 10.30 to Form
10-K filed for the year
ended January 31, 1988
Exhibit Page or
number Description Method of Filing
- ------ ----------- ----------------
10.31 Employment Agreement with Incorporated by Reference
Dan Bergman to Exhibit 10.31 to Form
10-K filed for the year
ended January 31, 1988
10.32 Form of Stock Option Agreement Incorporated by Reference
with Key Employees and Officers to Exhibit 10.32 to Form
10-K filed for the year
ended January 31, 1989
10.33 Form of Stock Option Agreement Incorporated by Reference
with Outside Directors to Exhibit 10.33 to form
10-K filed for the year
ended January 31, 1989
10.34 Severance Agreement with Incorporated by Reference
Gregory J. Petras to Exhibit 10.34 to Form
10-K filed for the year
ended January 31, 1989
10.35 $100,000 Installment Note Incorporated by Reference
Payable to Three Carollo to Exhibit 10.35 to Form
Partnership 10-Q filed for the quarter ended July 31, 1989
10.36 Purchase, Consulting and Incorporated by Reference
Distribution Agreement with to Exhibit 10.36 to Form
Micromedex, Inc. 10-K filed for the fiscal
year ended January 31, 1991
10.37 $125,000 Installment Note Incorporated by Reference
Payable to Gardiner S. Dutton to Exhibit 10.37 to Form
as Agent 10-Q for the quarter ended July 31, 1990
10.38 Asset Purchase Agreement with Incorporated by Reference
Prentice Hall, Inc. to purchase to Exhibit 10.38 to Form
Riskscan July 31, 1990
10.39 Lease for Company's Office Space Incorporated by Reference
dated October 1990 to Exhibit 10.39 to Form 10-K filed for the
fiscal year ended January 31, 1991
10.40 Exclusive Distributor Agreement Incorporated by Reference to Exhibit
with Vim & Vigor, Inc. 10.40 to Form 10-K filed for the fiscal year
ended January 31, 1992.
10.41 Exclusive Agency Agreement Incorporated by Reference to Exhibit
with Joseph Stevens Group, Inc. 10.41 to Form 10-K filed for the
fiscal year ended January 31, 1992
Exhibit Page or
number Description Method of Filing
- ------ ----------- ----------------
10.42 Development and Distribution Incorporated by Reference to Exhibit
Agreement with Parlay 10.42 to Form 10-KSB filed for fiscal
International Communication, Inc. year ended January 31, 1993
10.43 Amended and Restated Purchase, Incorporated by Reference to Exhibit
Consulting and Distribution Agreement 10.43 to From 10-KSB filed for fiscal
with Micromedex, Inc. year ended January 31, 1993
10.44 Employment Agreement with Gregory J. Incorporated by Reference to
Petras and Form Other key Executives the Form 10-KSB filed for the
fiscal year ended January 31, 1993
10.45 1988 Stock Option Plan Incorporated by Reference to
1988 Proxy statement
10.46 Employment Agreement with Incorporated by Reference to
A. Neal Westermeyer Exhibit 10.46 to Form 10-KSB
filed for fiscal year ended
January 31, 1994
10.47 Amendment and Restated Certificate Incorporated by Reference to
of Designation Agreement of Series A the Form 10-QSB filed for the fiscal
Preferred Stock dated, June 14, 1994 quarter ended April 30, 1994
10.48 Pediatric Protocol Publishing Incorporated by Reference to Exhibit
Agreement with Barton D. Schmitt M.D. 10.48 to Form 10KSB for the fiscal
year January 31, 1995
10.49 Consulting Agreement with Incorporated by Reference to Exhibit
Steven Poole, M.D. 10.49 to Form 10-KSB for the fiscal
year January 31, 1995
10.50 First Amendment to Amended and Restated Incorporated by Reference to Exhibit
Purchase, Consulting and Distribution 10.50 to Form 10-KSB for the fiscal
Agreement year January 31, 1995
10.51 Development and Distribution Agreement Pages 40-98
with Pfizer Health Sciences Inc. (*)
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(*) Confidential Treatment has been requested for portions of this document.
EXHIBIT 10.51
DEVELOPMENT AND DISTRIBUTION AGREEMENT
Agreement made as of the 22nd day of December, 1995 (the
"Effective Date"), by and between Pfizer Health Sciences, Inc. ("Pfizer
Health"), a Delaware corporation having its principal place of business at 235
East 42nd Street, New York, New York 10017-5755, and National Health Enhancement
Systems, Inc. ("NHES"), a Delaware corporation having its principal place of
business at 3200 North Central Avenue, Suite 1750, Phoenix, Arizona 85012;
WHEREAS, NHES is in the business of developing, marketing,
selling and operating the products described on Schedule A attached hereto (the
"NHES Products") and offers, or intends to offer the services described on
Schedule A attached hereto ("NHES Services");
WHEREAS, Pfizer Health and its Affiliates (as defined
hereunder) desire to use, and to distribute to third party end-users, NHES
Products and NHES Services;
WHEREAS, Pfizer Health and NHES desire to enter into an
arrangement for the development of: (i) customized products, including, but not
limited to, the [Deleted - see *] ("Customized Products"); (ii) services to
health care organizations and their beneficiaries by the operation of any
Customized Product ("Related Services"); and (iii) interfaces between the NHES
Products, Customized Products (including, but not limited to, [Deleted - see *])
and [Deleted - see *];
WHEREAS, Pfizer Health and its Affiliates desire to use, and
to distribute to third party end-users, such Customized Products, Related
Services and Interfaces; and
WHEREAS, the parties desire to accomplish the foregoing on the
terms and conditions set forth herein.
In consideration of the mutual promises and subject to the
terms and conditions set forth herein, Pfizer Health and NHES agree as follows:
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Section 1. DEFINITIONS
When used in this Agreement and in each Work Order issued hereunder,
the capitalized terms listed in this Section 1 shall have the following
meanings:
1.1. Affiliate -- of a party shall mean any corporation or other
business entity that directly or indirectly controls, is controlled by, or is
under common control with, such party.
1.2. Change in Control -- of NHES means (a) whenever a majority of the
members of the Board of Directors of NHES shall have been elected against the
recommendation of the management of NHES or the Board of Directors of NHES in
office immediately prior to such election; provided, however, that for purposes
of this clause (a), a member of such Board of Directors whose initial election
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended) or other actual or threatened solicitation of
proxies or consents by or on behalf of a person other than such Board of
Directors shall be deemed to have been elected against the recommendation of
such Board of Directors; (b) whenever any person or group of persons (other than
those set forth in Schedule I) shall acquire (whether by merger, consolidation,
sale, assignment, lease, transfer or otherwise, in one transaction or any
related series of transactions) or otherwise beneficially own equity securities
of NHES that represent in excess of fifty (50) percent of the voting power of
all outstanding equity securities of NHES generally entitled to vote for the
election of directors; or (c) whenever any pharmaceutical company shall acquire
(whether by merger, consolidation, sale, assignment, lease, transfer or
otherwise, in one transaction or any related series of transactions) or
otherwise beneficially own equity securities of NHES that represent in excess of
thirty (30) percent of the voting power of all outstanding equity securities of
NHES generally entitled to vote for the election of directors.
1.3. Code -- shall mean computer programming code other than Source
Code, including, without limitation, the machine-readable form of such code
(hereinafter "Object Code"), any Maintenance Modifications or Basic Enhancements
thereto created
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
by NHES and made generally available to its customers from time to time, and
Major Enhancements thereto when added in connection with a Work Order issued
hereunder.
1.4. Customer -- shall mean any third party that purchases or licenses
products or services from Pfizer Health, including, without limitation, any NHES
Product, NHES Service, Customized Product, Related Service, or [Deleted - see
*].
(a) Tier 1 Customer -- shall mean a Customer having more than
250,000 beneficiaries.
(b) Tier 2 Customer -- shall mean a Customer having no more than
250,000 beneficiaries.
1.5. Deliverables -- shall mean all Code, Documentation, Customized
Products, [Deleted see *], data, databases, and other materials developed by
NHES under this Agreement or any Work Order issued hereunder.
1.6. Derivative Work -- shall mean a work that is based upon one or
more preexisting works, such as a revision, modification, translation,
abridgement, condensation, expansion, or any other form in which such
preexisting works may be recast, transformed, or adapted, and that, if prepared
without authorization of the owner of the copyright in such preexisting work,
would constitute a copyright infringement. For purposes hereof, a Derivative
Work shall also include any compilation that incorporates such a preexisting
work.
1.7. Documentation -- shall mean user manuals and other written
materials, including materials useful for design (e.g., logic manuals, flow
charts, and principles of operation). Documentation shall include any
Maintenance Modifications or Basic Enhancements thereto created by NHES from
time to time, and shall include Major Enhancements thereto when added to the
Documentation in connection with a Work Order issued hereunder.
1.8. Enhancements -- shall mean changes or additions, other than
Maintenance Modifications, to Code and Source Code and related Documentation,
that are incorporated in any new release that NHES makes available to more than
one third party or to Pfizer and that improve functions, add new functions, or
significantly improve performance by changes in system design or coding.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(a) Basic Enhancements -- shall mean any Enhancements that are not
Major Enhancements.
(b) Major Enhancements -- shall mean Enhancements that (1) have a
value and utility separate from the use of the Code and Documentation; (2) as a
practical matter, may be priced and offered separately from the Code and
Documentation; and (3) are not made available to any of NHES' customers without
separate charge.
1.9. Error -- shall mean any error, problem, or defect resulting from
(1) an incorrect functioning of Code, or (2) an incorrect or incomplete
statement of diagram in Documentation, if such an error, problem, or defect
renders the Code inoperable, causes the Code to fail to meet the specifications
thereof, causes the Documentation to be inaccurate or incomplete in any material
respect, causes incorrect results, or causes incorrect functions to occur when
any such materials are used.
1.10. Initial Term -- shall mean the period of one (1) year from the
Effective Date.
1.11. Maintenance Modifications -- shall mean any modifications or
revisions that NHES makes available to more than one third party or to Pfizer,
other than Enhancements, to Code or Documentation that correct Errors, support
new releases of the operating systems with which the Code is designed to
operate, support new input/output (I/O) devices, or provide other incidental
updates and corrections.
1.12. Product Completion -- shall mean the date of Pfizer Health's
acceptance of a Customized Product or Interface in accordance with the
parameters set forth in the applicable Work Order.
1.13. Quarter -- shall mean any consecutive three-month period of the
Initial Term, commencing on the Effective Date and each three months thereafter.
1.14. Representative -- of a party shall mean any officer, director,
employee, independent contractor, agent, assign or any other person or entity
working under the supervision of or at the direction of such party.
1.15. Source Code -- shall mean the human-readable form of the computer
programming code and related Documentation, including all comments and any
procedural code such as job control language and including any Maintenance
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Modifications or Basic Enhancements thereto created by NHES and made generally
available to its customers from time to time, and Major Enhancements thereto
when added in connection with a Work Order issued hereunder.
1.16. Technology -- shall mean all materials, processes, inventions,
works of authorship, techniques, data, know how, algorithms, programs,
subroutines, specifications, tools, testing and maintenance specifications, and
related technology, that are used in, incorporated in, embodied in or displayed
by any Code or Source Code, or used or useful in the design, development,
reproduction, maintenance or modification of any Code or Source Code, and all
intellectual property rights, including, without limitation, those in patents,
copyrights, and trade secrets in the foregoing.
1.17. Third Party Product -- shall mean any Code, Source Code or other
Technology that is owned by a third party.
1.18. Work Order -- shall mean an agreement entered into by Pfizer
Health and NHES pursuant to this Agreement for the development of a Customized
Product, Related Service, [Deleted - see *], or the provision of services
pursuant to Sections 4.2 and 4.3, a form of which is attached hereto as Schedule
C.
Section 2. SUPPLY OF NHES PRODUCTS AND NHES SERVICES
2.1. NHES' Obligation to Supply. (a) NHES shall provide to Pfizer
Health all NHES Products and NHES Services ordered by Pfizer Health hereunder at
prices to be determined according to Section 14.2.
(b) NHES shall also provide to Pfizer Health Customized Products,
Related Services, and [Deleted - see *] in accordance with this Agreement and
pursuant to a Work Order hereunder, including, without limitation, all Code,
Source Code, Documentation, Enhancements, and Maintenance Modifications related
thereto, at fees to be determined according to Section 14.3.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
2.2. Pfizer Health's Obligation to Acquire. (a) Within one (1) year of
the Effective Date, Pfizer Health shall acquire the NHES Products and NHES
Services at the prices listed on Schedule A hereto in an amount of $1,375,000,
which shall be payable pursuant to Section 14.1.
(b) Pfizer Health shall deliver to NHES a written purchase order
specifying such NHES Products and NHES Services in accordance with Schedule J by
each of the following dates: January 15, 1996; March 15, 1996; June 14, 1996;
and September 13, 1996.
Section 3. SOFTWARE DEVELOPMENT
3.1. Health Risk Assessment Tool. (a) NHES shall develop the HRA at no
additional cost to Pfizer Health, pursuant to the HRA project description
attached hereto as Schedule B. NHES shall use its best efforts to develop a more
detailed product description, specifications, and development schedule that meet
Pfizer Health's approval by January 31, 1996.
(b) NHES shall provide Enhancements and new releases to the HRA
pursuant to the Work Order process.
3.2. Customized Products and Related Services. NHES shall develop
Customized Products and Related Services upon the execution of, and pursuant to
the terms of, a Work Order.
3.3. [Deleted - see *]
(b) [Deleted - see *] shall be at no additional cost to Pfizer Health.
The cost to Pfizer Health of any additional [Deleted - see *] will be set forth
in the related Work Order.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Section 4. NHES SUPPORT AND CONSULTING SERVICES
4.1. Standard Product Support and Consulting Services. (a) NHES,
through its service department, shall provide product support and consulting
services to Pfizer Health, its Affiliates and its Customers, as set forth in,
and under the terms and conditions (including but not limited to cost) of, the
License Agreement attached hereto as Schedule D, or Annual License, Support and
Maintenance Agreement attached hereto as Schedule E, as applicable, provided the
same is executed and delivered by the applicable user.
(b) Such services shall include, but not be limited to:
(1) initial software and hardware installation;
(2) start-up training; and
(3) routine product servicing, including, without limitation, the
development of Maintenance Modifications to the Customized
Products.
(c) The cost to Pfizer Health of support and consulting services for
Customized Products provided by NHES to Pfizer Health or any of its Affiliates
is set forth in Section 14.3.
4.2. Additional Product Support and Consulting Services. (a) NHES shall
provide additional product support and consulting services to Pfizer Health, its
Affiliates and its Customers upon the issuance of a Work Order specifying the
requested services and the cost to Pfizer Health, its Affiliate or its Customer,
as applicable.
(b) NHES shall provide such services either through its service
department or, at NHES' discretion, by subcontracting such services to a third
party service provider (or providers) in accordance with the Work Order;
provided that Pfizer Health approves any such subcontract, including, without
limitation, the subcontractor, in advance. Pfizer Health's approval of any such
subcontract shall not be unreasonably withheld.
(c) The cost to Pfizer Health of such support and consulting services
provided by NHES to Pfizer Health or any of its Affiliates is set forth in
Section 14.4.
4.3. Turnkey Services. (a) NHES shall provide turnkey services,
including, but not limited to, hardware purchasing, space configuration,
training and staffing, to Pfizer Health, its Affiliates, and its Customers, upon
the issuance of a Work Order specifying the requested services and the cost to
Pfizer Health, its Affiliate, or its Customer, as applicable.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(b) NHES shall provide such services either through its service
department or, at NHES' discretion, by subcontracting such services to a third
party service provider (or providers) in accordance with the Work Order;
provided that Pfizer Health approves any such subcontract, including, without
limitation, the subcontractor, in advance. Pfizer Health's approval of any such
subcontract shall not be unreasonably withheld.
(c) The cost to Pfizer Health of such support and consulting services
provided by NHES to Pfizer Health or any of its Affiliates is set forth in
Section 14.4.
4.4. Discontinued NHES Products. (a) NHES shall continue to provide
support services to Pfizer Health or its Affiliate, as applicable, at Pfizer
Health's request, for at least the two (2) most recent versions of any
discontinued NHES Product for the term of this Agreement, and, in any event,
until Pfizer Health or its Affiliate, as applicable, has completed its
transition to a substitute NHES Product. Such transition period shall not exceed
ninety (90) days.
(b) NHES shall continue to provide support services to any
Customer, at the Customer's request, for at least the two (2) most recent
versions of any discontinued NHES Product for the term of any applicable License
Agreement or Annual License, Support and Maintenance Agreement and, in any
event, until the Customer has completed its transition to a substitute NHES
Product. Such transition period shall not exceed ninety (90) days.
Section 5. PROMOTIONAL MATERIAL
5.1. Provision of Marketing Resources. Pfizer Health shall provide
reasonable marketing resources for the development, production and distribution
of promotional material for the NHES Products, NHES Services, Customized
Products, Related Services and [Deleted - see *], including access to personnel
designated by Pfizer Health, the use of Pfizer Health's or its Affiliates'
vendors for the purpose of obtaining volume discounts, and any additional
resources designated and agreed to by Pfizer Health. Reasonable resources shall
not include access to Pfizer Health's or any of its Affiliates' pharmaceutical
sales representatives unless Pfizer Health agrees otherwise.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
5.2. Allocation of Cost. If the promotion is initiated by Pfizer Health
or any of its Affiliates, the cost of the promotional material shall be borne by
Pfizer Health. If the promotion is initiated by NHES or any of its Affiliates,
the cost of the promotional material shall be borne by NHES.
Section 6. CUSTOMER INFORMATION
6.1. Pfizer Health's Obligation. Pfizer Health shall provide NHES with
customer information on a confidential basis, as needed, for the sole purpose of
coordinating sales calls between the two parties, unless such information
violates a confidentiality agreement between Pfizer Health and a Customer.
6.2. NHES' Obligation. NHES shall provide Pfizer Health and its
Affiliates with access to its customer database on a confidential basis,
including, without limitation, stand-alone or on-line access, to a limited
number of personnel on a "need to know basis," for the sole purpose of
coordinating sales calls between the two parties.
Section 7. CONTRACT ADMINISTRATION AND PROJECT MANAGEMENT
7.1. Contract Coordinator. (a) On the Effective Date, each party shall
notify the other party of the name, business address, and telephone number of
its Contract Coordinator.
(b) The Contract Coordinator shall be responsible for:
(1) arranging all meetings, visits, and consultations between the
parties that are of a non-technical nature;
(2) receiving all notices other than those described in Section
22.12(a), including, but not limited to, all requests,
reports, or approvals under this Agreement; and
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(3) all administrative matters such as invoices, payments, and
amendments to the Agreement.
7.2. Technical Coordinator. Each Work Order shall state the name,
business address, and telephone number of the Technical Coordinator of each
party, who may also be the Contract Coordinator. The Technical Coordinator shall
be responsible for performance under such Work Order, including, but not limited
to, the transmission and receipt of Deliverables and technical information
between the parties.
7.3. Support Services Personnel. The following personnel of NHES'
service department shall be responsible for NHES' performance under Section 4:
one (1) Manager, one (1) Sales Specialist, and one (1) Client Service
Coordinator. NHES shall identify the Manager within ninety (90) days of the
Effective Date, and the Sales Specialist and Client Service Coordinator within
one hundred eighty (180) days of the Effective Date.
7.4. Issuance of Work Orders. A Work Order may be originated by a
written request by Pfizer Health, a written proposal by NHES, or other written
instrument by either of the parties, and shall become effective, and shall be
deemed to have issued, upon its execution by authorized representatives of both
parties.
7.5. Notice. All notice required or permitted to be given under this
Section 7 shall be in writing and shall be deemed to have been given if
personally delivered, faxed (with receipt confirmed) or mailed (by registered or
certified air mail, return receipt requested), postage prepaid, to the persons
identified in this Section 7, as applicable or as designated from time to time
by written notice.
Section 8. CHANGES
8.1. Changes in Work Order. (a) Changes in any Work Order, including,
without limitation, any Specifications or Deliverables related thereto, shall
become effective only when a written change request is executed by authorized
representatives of both parties. Change requests that do not substantially
affect the nature of Deliverables, their performance or functionality, and that
do not change the total estimated time for development or provision of services
stated in the Work Order by more than ten percent (10%), or the estimated
development cost or support cost stated in the Work Order by more than ten
percent (10%), as applicable, may be requested and/or accepted by the parties'
Technical Coordinators. All other change requests with respect to this Agreement
or any Work Order must be requested and/or accepted by both parties' Contract
Coordinators.
(b) NHES may not decline to accept any change requests that reduce the
cost of performance, provided that an equitable adjustment in compensation is
made for the out-of-pocket costs of any performance or preparation already
undertaken. NHES further may not decline any change requests that increase the
cost or magnitude of performance, provided that the changes are reasonable in
scope and result in a commensurate increase in compensation.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
8.2. Unused NHES Products and NHES Services. (a) For any NHES Product
purchased by Pfizer Health in the first Quarter, NHES hereby grants Pfizer
Health the option to upgrade such NHES Product to a new version of the NHES
Product during the Initial Term at no additional cost to Pfizer Health under the
terms and conditions set forth on Schedules D and E, as applicable, or NHES'
standard form agreement for NHES Services, as the same may be hereafter
developed.
(b) For any NHES Product or NHES Service purchased by Pfizer Health
during the second, third and fourth Quarters, NHES hereby grants Pfizer Health
the option to exchange any NHES Product or NHES Service acquired by Pfizer
Health for any other NHES Product or NHES Service of the same or comparable
value during the Initial Term, at no additional cost to Pfizer Health; provided
that such option is exercised in accordance with Schedule J.
8.3. Enhancements. (a) For any NHES Product or Customized Product, NHES
shall develop Enhancements in accordance with a Work Order.
(b) NHES shall provide Pfizer Health with advance notice of the
availability of other Enhancements for incorporation into any NHES Product or
Customized Product, which shall be no later than the advance notice provided to
any third party end-user of such NHES Product or Customized Product. NHES shall
notify Pfizer Health promptly of any Enhancement, or its intention to develop an
Enhancement, which is likely to adversely affect the utility of the subject
matter of a pending Work Order.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
8.4. Delay. NHES agrees to notify Pfizer Health promptly of any factor,
occurrence, or event coming to its attention that NHES believes in good faith
may materially and adversely affect NHES' ability to meet the requirements of
any Work Order issued under this Agreement, or that NHES believes in good faith
is likely to occasion any material delay in delivery of Deliverables. Such
factors, occurrences, and events include, but are not limited to, the loss or
reassignment of key employees, threat of strike, major equipment failure, or
threat of Change in Control of NHES.
Section 9. OWNERSHIP
9.1. NHES Products and NHES Services. (a) Ownership of all NHES
Products and NHES Services shall remain with NHES. Schedule A identifies all
NHES Products and NHES Services that are commercially available on, or planned
as of, the Effective Date.
(b) If, at any time during the term of this Agreement but independent
of its performance under this Agreement, NHES develops additional medical call
center or other demand management products or services that are commercially
available and are not listed on Schedule A, NHES shall promptly amend Schedule A
to include the same and the prices therefor.
9.2. Customized Products, Related Services and Interfaces. NHES shall
own all Customized Products, Related Services and [Deleted - see *] developed
pursuant to this Agreement, including, but not limited to, all Deliverables,
Code, Source Code, Derivative Works, and Documentation, and including all trade
secrets, copyrights, patents, and other intellectual property rights therein and
thereto.
Section 10. LICENSES
10.1 License of NHES Products and NHES Services in the United States.
(a) License to Use. NHES grants to Pfizer Health and its Affiliates a
non-exclusive license to use the NHES Products and NHES Services ordered by
Pfizer Health from NHES pursuant to Section 2.2, including, but not limited to,
any related Technology and any updates, Enhancements, Maintenance Modifications,
or new releases thereof, in the United States, under the terms and conditions
set forth on Schedules D and E, as applicable, or NHES' standard form agreement
for NHES Services, as the same may be hereafter developed.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(b) License to Market, Etc. NHES grants to Pfizer Health a
non-exclusive license to market, distribute, lease, and sublicense, during the
term of this Agreement, the NHES Products and NHES Services ordered by Pfizer
Health from NHES pursuant to Section 2.2, including, but not limited to, any
related Technology and any updates, Enhancements, Maintenance Modifications, or
new releases thereof, to its Customers in the United States, provided that such
Customers agree to use the NHES Products and NHES Services pursuant to the terms
and conditions of an agreement that is substantially similar to either Schedule
D or E, as applicable, or NHES' standard form agreement for NHES Services, as
the same may be hereafter developed.
10.2. License of [Deleted - see *] in the United States.
(a) License to Use. NHES hereby grants Pfizer Health and its Affiliates
a perpetual license to use the [Deleted - see *], including, but not limited to,
any related Technology and any updates, Enhancements, Maintenance Modifications,
or new releases thereof, in the United States, under the terms and conditions of
an agreement that is substantially similar to either Schedule D or E, as
applicable, or NHES' standard form agreement for NHES Services, as the same may
be hereafter developed. Such license shall be exclusive except for the
sublicenses authorized by Section 10.2(b).
(b) License to Market, Etc. NHES hereby grants Pfizer Health a
perpetual, exclusive license to market, distribute, lease, and sublicense the
[Deleted - see *], including, but not limited to, any related Technology and any
updates, Enhancements, Maintenance Modifications, or new releases thereof, to
its Customers in the United States; provided that such Customers agree to use
the [Deleted see *] pursuant to the terms and conditions of an agreement that is
substantially similar to either Schedule D or E, as applicable, or NHES'
standard form agreement for NHES Services, as the same may be hereafter
developed.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
10.3. License of Other Customized Products, Related Services and
[Deleted - see *] in the United States.
(a) License to Use. NHES hereby grants Pfizer Health and its Affiliates
a perpetual license to use the Customized Products other than [Deleted - see *],
and Related Services and [Deleted see *], including, but not limited to, any
related Technology and any updates, Enhancements, Maintenance Modifications, or
new releases thereof, in the United States, under the terms and conditions of an
agreement that is substantially similar to either Schedule D or E, as
applicable, or NHES' standard form agreement for NHES Services, as the same may
be hereafter developed. Such license shall be exclusive except for the
sublicenses authorized by Section 10.3(b).
(b) License to Market, Etc. NHES hereby grants Pfizer Health a
perpetual, exclusive license to market, distribute, lease, and/or sublicense the
Customized Products other than [Deleted see *], and Related Services and
Interfaces, including, but not limited to, any related Technology and any
updates, Enhancements, Maintenance Modifications, or new releases thereof, to
its Customers in the United States; provided that such Customers agree to use
the Customized Products ( [Deleted - see *]) and [Deleted - see *] pursuant to
the terms and conditions of an agreement that is substantially similar to either
Schedule D or E, as applicable, or NHES' standard form agreement for NHES
Services, as the same may be hereafter developed.
(c) Exclusivity. If the exclusivity of the license granted in Section
10.3(b) causes at least three (3) lost opportunities by NHES to provide its
medical call center products to third party end-users within any consecutive
twenty-four (24)-month period, NHES may distribute the Customized Products
(other than [Deleted - see *]) to third party end-users in the United States,
other than any other pharmaceutical company or any Affiliate thereof for
perpetual term and in accordance with the terms and conditions of the relevant
Work Order (including any relevant royalty payments payable by NHES to Pfizer
Health); provided that, at Pfizer Health's request, NHES submits proof of such
loss and causation to Pfizer Health to Pfizer Health's reasonable satisfaction
prior to marketing the Customized Products.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
10.4 License of [Deleted - see *] and Other Customized Products,
Related Services and Interfaces Outside the United States.
(a) License to Use. NHES hereby grants Pfizer International Inc., an
Affiliate of Pfizer Health ("Pfizer IPG"), a perpetual license to use the
Customized Products, Related Services, and [Deleted - see *], including, but not
limited to, any related Technology and any updates, Enhancements, Maintenance
Modifications, or new releases thereof, under the terms and conditions of an
agreement that is substantially similar to either Schedule D or E, as
applicable, or NHES' standard form agreement for NHES Services, as the same may
be hereafter developed. Such license shall be exclusive except as provided in
Section 10.4(b) and 10.4(c).
(b) License to Market, Etc. NHES hereby grants Pfizer IPG a perpetual
license to market, distribute, lease, and sublicense the Customized Products,
Related Services, and [Deleted - see *], including, but not limited to, any
related Technology and any updates, Enhancements, Maintenance Modifications, or
new releases thereof, to third party end-users outside of the United States;
provided that such Customers agree to use the Customized Products and Interfaces
pursuant to the terms and conditions of an agreement that is substantially
similar to either Schedule D or E, as applicable, or NHES' standard form
agreement for NHES Services, as the same may be hereafter developed. Such
license shall be exclusive except as provided in Section 10.4(c).
(c) NHES' Rights. NHES shall retain the right to use, market,
distribute, lease and sublicense the Customized Products to third party
end-users outside of the United States for the term of this Agreement and for
twelve (12) months thereafter.
10.5. License of Data.
(a) License to Use. NHES hereby grants Pfizer Health and its Affiliates
a perpetual, royalty-free license to use any data or databases owned by NHES
that are reasonably required by Pfizer Health and its Affiliates for operation
of the NHES Products, NHES Services, Customized Products, Related Services, and
[Deleted - see *], provided that such use does not violate any confidentiality
agreement between NHES and any third party.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(b) Right to Sublicense. NHES further grants Pfizer Health a perpetual
right to sublicense to its Customers the right to use any data or databases
owned by NHES that are reasonably required by its Customers for operation of the
NHES Products, NHES Services, Customized Products, Related Services, and
[Deleted - see *]; provided, however, that no Customer shall further sublicense
such right.
10.6. License Modifications. Notwithstanding the provisions of this
Section 10, NHES may from time to time reasonably modify the terms and
conditions contained in Schedules D and E; provided, however, that no such
modification may adversely affect the rights of Pfizer Health hereunder.
Section 11. ESCROW
11.1. Escrow Agreement. NHES shall enter into an agreement with Pfizer
Health and an escrow agent to be agreed upon by the parties (the "Escrow Agent")
within thirty (30) days of the Effective Date, for the deposit and custody with
the Escrow Agent of the Source Code for any and all NHES Products, Customized
Products, [Deleted - see *], and any other Deliverables, including any
Enhancements and Maintenance Modifications (the "Escrow Agreement"). NHES shall
use its best efforts to enter into such agreement within such period.
Notwithstanding the foregoing, Pfizer Health shall not unreasonably withhold its
consent to such Escrow Agreement.
11.2. Deposit and Custody of Source Code. Pursuant to the Escrow
Agreement, NHES shall deposit the Source Code described in Section 11.1 with the
Escrow Agent.
11.3. Release of Source Code. (a) Pursuant to the Escrow Agreement,
NHES, on 30 days written notice from Pfizer Health, shall authorize the Escrow
Agent to release copies of all Source Code described in Section 11.1 to Pfizer
Health, on a confidential basis, in the event that, but only for so long as,
NHES is unable to perform its obligations under Section 4, and only to the
extent Pfizer Health reasonably believes necessary for Pfizer Health's
performance of such obligations. Any dispute concerning whether Pfizer Health's
access to the Source Code was reasonably necessary will be resolved pursuant to
provisions contained in the Escrow Agreement.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(b) Pfizer Health shall use the Source Code for the NHES Products only
for the performance of the services described in Section 4, and, in any event,
not for distribution to any third party.
11.4. Return or Destruction of Source Code for NHES Products. If NHES
is able to perform its obligations under Section 4 at any time after the release
of the Source Code for the NHES Products pursuant to Section 11.3, or upon
termination of this Agreement, whichever occurs first, Pfizer Health shall
return to the Escrow Agent, or destroy, any and all copies of such Source Code.
11.5. Verification and Testing of Source Code. Upon written notice to
NHES and the Escrow Agent, and at Pfizer Health's expense, Pfizer Health shall
have the right to appoint a consultant to conduct tests of the Source Code held
in escrow pursuant to Section 11.1, under the supervision of NHES and subject to
reasonable confidentiality requirements requested by NHES, to confirm that they
are a correct, current, and complete version of the Deliverables.
Section 12. CONFIDENTIALITY
12.1. Definition of Confidential Information. Pfizer Health and NHES
recognize that, in connection with their performance under this Agreement, each
of them may disclose to the other information about the disclosing party's (or
one of its Affiliates') business or activities which such party or such
Affiliate considers proprietary and confidential and that, in the course of the
performance of their duties under this Agreement, each will create certain
materials and develop certain Software and Technology that are not generally
known. All of such information of each party and its Affiliates, which shall
include all business, customer, financial and technical information of a party
or one of its Affiliates, all Technology, the terms and provisions of this
Agreement, and any other information of a party designated by that party as
confidential information, is hereafter referred to as "Confidential
Information," except that the existence of this Agreement itself shall not be
deemed confidential.
12.2. Treatment of Confidential Information. The party receiving any
Confidential Information (the "Receiving Party") shall maintain it in confidence
and shall not use it for any purpose other than the purposes contemplated by
this Agreement.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Pfizer Health and NHES may disclose the other's Confidential Information only:
(1) to the Representatives of such party (and, in the case of Pfizer Health, to
Pfizer Inc. and the Representatives thereto); and (2) upon the prior approval of
the party disclosing its Confidential Information (the "Disclosing Party").
12.3. Exceptions. (a) The obligations of Section 12.2 shall not apply
to information that the Receiving Party can show to the reasonable satisfaction
of the Disclosing Party:
(1) is in the possession of the Receiving Party without
obligation of confidence to the Disclosing Party before
receipt thereof from the Disclosing Party;
(2) is or has become available to the public without fault of the
Receiving Party; or
(3) is disclosed to the Receiving Party, without restriction, by
a third party who is not under any legal obligation (either
by agreement with the disclosing party or otherwise by law)
prohibiting such disclosure.
(b) The Receiving Party may disclose the other's Confidential
Information in the event it is required by law to disclose Confidential
Information to governmental agencies or authorities or in connection with any
litigation or proceeding; provided, however, that the Receiving Party endeavors
to limit disclosure to that purpose and gives the Disclosing Party written
notice of any instance of such a requirement in reasonable time for the
Disclosing Party to take steps to object to or to limit such disclosure.
(c) NHES may disclose the confidential terms and conditions of this
Agreement in connection with a proposed material transaction to a third party
other than a pharmaceutical company upon such third party's consent to treat the
confidential terms and conditions of this Agreement as Confidential Information
in accordance with Section 12.2. NHES may disclose the confidential terms and
conditions of this Agreement in connection with a proposed material transaction
to a pharmaceutical company only if Pfizer Health consents in advance in writing
to such disclosure.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(d) At any time during the term of, and upon termination of, this
Agreement, each party shall, on the written request of the other party, deliver
to the requesting party any written, printed or other materials embodying
Confidential Information of the requesting party in its possession, in the
possession of any of its Representatives, or, in the case of Pfizer Health, in
the possession of any Representatives of Pfizer Inc.
12.4. Obligated Persons. The foregoing obligations of confidentiality
shall apply to the Representatives of the parties and the parties' Affiliates
and any other person to whom the parties have delivered copies of, or permitted
access to, such Confidential Information pursuant to this Section 12, and each
party shall identify all Confidential Information in tangible form by either
stamping or otherwise affixing in a legible manner the term "CONFIDENTIAL" on
such tangible form.
12.5. Third-party Confidential Information. Any confidential
information of a third party that is so designated by such third party and is
disclosed to either Pfizer Health or NHES in furtherance of this Agreement,
shall be treated by Pfizer Health or NHES, as the case may be, in accordance
with the terms under which such third-party confidential information was
disclosed.
Section 13. PREFERRED RELATIONSHIP
13.1. Product Distribution. (a) During the term of the Agreement and
for six (6) months thereafter, NHES shall not enter into any agreement for the
distribution of the NHES Products or NHES Services in the United States with any
other pharmaceutical company or any affiliate thereof.
(b) During the term of the Agreement and for six (6) months thereafter,
Pfizer Health shall not, for the benefit of its pharmaceutical business or the
pharmaceutical business of any of its Affiliates, enter into any distribution
and development agreement comparable to this Agreement with any of NHES' direct
competitors whose primary business is stand-alone demand management systems and
services comparable to those provided by NHES hereunder.
13.2. Product Development. During the term of the Agreement and for six
(6) months thereafter, NHES shall not develop any customized products based on
the NHES Products for any other pharmaceutical company or any Affiliate thereof
for use in the United States.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
13.3. Hiring of Representatives. During the term of the Agreement and
for one (1) year thereafter, each party and its Affiliates shall not hire or
solicit for hire any Representative of the other party or any of its Affiliates
who has performed any obligation under this Agreement or any Work Order issued
hereunder, or who otherwise obtained Confidential Information in connection with
this Agreement.
13.4 Right of First Refusal. (a) During the term of this Agreement, if
NHES desires to sell, assign or transfer any equity securities, or any
securities convertible into equity securities, to another pharmaceutical
company, where such sale, assignment or transfer would result in such
pharmaceutical company's beneficial ownership of NHES' equity securities
representing in excess of thirty percent (30%) of the voting power of all of
NHES' outstanding equity securities generally entitled to vote for the election
of directors (the "Noticed Securities"), NHES shall not sell, assign or transfer
the Noticed Securities without first sending a written notice to Pfizer Health
setting forth in detail the terms of the proposed sale, assignment or transfer
and offering to sell the Noticed Securities to Pfizer Health at the price and on
the terms contained therein (the "Notice"). Pfizer Health shall have an option
for thirty (30) days from its receipt of the Notice to elect to purchase all,
but not less than all, of the Noticed Securities. The exercise of Pfizer
Health's right to purchase the Noticed Securities shall be made in writing to
NHES. The closing of the purchase of the Noticed Securities by Pfizer Health
shall occur no later than sixty (60) days following expiration of the initial
thirty (30)-day period provided for above.
(b) If Pfizer Health does not elect to purchase the Noticed Securities
and NHES fails to transfer the Noticed Securities within one-hundred and fifty
(150) days following the expiration of the thirty (30)-day period provided for
above, then any sale, assignment, or transfer of the Noticed Securities to the
other pharmaceutical company shall again be subject to Pfizer Health's right of
first refusal as set forth in this Section 13.4.
(c) Notwithstanding the above, Pfizer Health's right of first refusal
shall not apply to any transfer of the Noticed Securities to an Affiliate of
Pfizer Health.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Section 14. PRODUCT AND SERVICE PAYMENTS
14.1. Advance Payments for NHES Products and NHES Services. (a) During
the Initial Term, Pfizer Health shall make the following minimum payments for
NHES Products and NHES Services, at the prices established in accordance with
Section 14.2. Such payments shall be non-refundable and made on or before the
dates specified below, with the first payment to be made on the Effective Date
by wire transfer; except that payment for the fourth Quarter shall be made only
in the event that the [Deleted see *] is delivered to Pfizer Health to Pfizer
Health's reasonable satisfaction, and if so, upon the later of the commencement
of the fourth Quarter or such delivery of the [Deleted - see *] to Pfizer
Health.
Quarter Payment Date Amount
------- ------------ ------
1 Effective Date $[Deleted - see *]
2 March 22, 1996 $[Deleted - see *]
3 June 21, 1996 $[Deleted - see *]
4 September 20, 1996 $[Deleted - see *]
(b) During the Initial Term, Pfizer Health may purchase additional NHES
Products and NHES Services at the prices established in accordance with Section
14.2.
14.2. [Deleted - see *]
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
14.3. Fees for Customized Product Support and Consulting Services.
(a) [Deleted - see *]. (1) For the Initial Term, Pfizer Health shall
pay to NHES the following fees for product support and consulting services
relating to the [Deleted - see *] and provided pursuant to Section 4.1: (i) for
each Tier 1 Customer, $[Deleted - see *]; and (ii) for each Tier 2 Customer,
$[Deleted - see *]; except that the aggregate amount paid by Pfizer Health for
Tier 1 Customers and Tier 2 Customers shall not exceed $[Deleted - see *], and
the aggregate number of Tier 1 Customers and Tier 2 Customers shall not exceed
seventy (70) Customers.
(2) For the Second Term and Successive Terms, NHES and Pfizer Health
shall agree upon support and maintenance fees at the commencement of each such
term; provided that if the parties are unable to agree on such fees, NHES shall
have no further obligation to provide consulting and support services for the
[Deleted - see *] pursuant to Section 4.1.
(b) Customized Products and Interfaces. Pfizer Health shall pay to NHES
fees for product support and consulting services relating to the Customized
Products other than the [Deleted - see *] and the [Deleted - see *], and
provided pursuant to Section 4.1, to be agreed upon by the parties in the
relevant Work Order or otherwise; provided that if the parties are unable to
agree on such fees, NHES shall have no further obligation to provide consulting
and support services for such Customized Products and Interfaces pursuant to
Section 4.1.
14.4. Fees for Additional Product Support and Consulting and Turnkey
Services. (a) The fee rates for NHES' services to Pfizer Health or any of its
Affiliates or Customers pursuant to Sections 4.2 and 4.3 shall be in the amount
of the average product support fees charged by NHES in connection with sales of
similar services to other NHES customers that are of similar size and complexity
to the Customer at issue during the most recent six (6)-month period, as set
forth on Schedule H hereto, as amended from time to time upon agreement of the
parties.
(b) Such fees shall be payable by Pfizer Health or any of its
Affiliates or Customers pursuant to a Work Order. Such payments shall commence
in accordance with Schedules D and E, as applicable, or NHES' standard form
agreement for NHES Services, as the same may hereafter be developed.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
14.5. Invoicing. (a) NHES shall submit invoices on a monthly basis for
charges due or accruing in each calendar month to Pfizer Health for services
rendered pursuant to Sections 4.2 and 4.3 and for Deliverables delivered
pursuant to Section 3 at such time or times as payment becomes due under each
Work Order. Invoices shall be addressed to Pfizer Health's Contract Coordinator
and shall specifically refer to the Work Order to which they relate.
(b) Each invoice shall separately set forth travel and other
out-of-pocket or cash expenses, if any, authorized by Pfizer Health for
reimbursement. Any supporting documentation reasonably required by Pfizer
Health, including, but not limited to, receipts for air travel, hotels, and
rental cars, shall accompany each invoice. Any extraneous terms on NHES'
invoices shall be void and of no effect, except as otherwise agreed by the
parties.
14.6. Sales Commission. NHES shall pay Pfizer Health a sales commission
for Pfizer Health's referral to NHES or other facilitation of sales by Pfizer
Health of the NHES Products, NHES Services, Customized Products, Related
Services and Interfaces during the Second or Successive Term, at a rate to be
agreed upon by the parties at the commencement of the applicable term. Pfizer
Health shall not be entitled to sales commissions on the placement of products
and services previously ordered by Pfizer Health.
Section 15. TERM AND RENEWAL
15.1. Term of Agreement. This Agreement shall be effective upon the
Effective Date and shall remain in force for the Initial Term, unless otherwise
terminated as provided herein.
15.2. Renewal of Agreement for Second Term. During the fourth Quarter,
this Agreement may be renewed for an additional three year period upon mutual
written agreement of the parties (the "Second Term"). [Deleted - see *].
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
15.3. Additional Renewals. Thereafter, this Agreement may be renewed
upon mutual written agreement of the parties for additional three year periods
(each a "Successive Term") during the last Quarter or the last quarter of the
Second Term or Successive Term, as the case may be.
Section 16. TERMINATION
16.1. Termination of Agreement by Either Party. Either party may
terminate this Agreement, effective immediately upon receipt of notice of
default to the other party, in the event that the other party defaults on the
performance or observance of any of the material terms or conditions of this
Agreement, including, without limitation, any material breach of warranty or
breach of confidentiality, which default is not remedied within thirty (30)
calendar days after written notice specifying the nature of the default is
received by NHES (the "uncured material breach"), except as provided in Section
16.4.
16.2. Termination of Agreement by Pfizer Health. Pfizer Health may
terminate this Agreement, effective immediately upon NHES's receipt of notice to
NHES, upon the occurrence of any of the following events: (a) a Change in
Control of NHES or the transfer or disposal of a substantial portion of NHES'
assets necessary for NHES' performance under this Agreement; (b) the filing by
or against NHES of, or the entry of an order for relief against NHES in, any
voluntary or good faith involuntary proceeding under any bankruptcy, insolvency,
reorganization or receivership law (including, without limitation, the United
States Bankruptcy code) or an admission seeking relief as therein allowed, which
filing or order is not vacated within ninety (90) calendar days from the entry
thereof; (c) the appointment of a receiver for all or a substantial portion of
NHES' property for a period exceeding sixty (60) calendar days; or (d) the
assumption of custody, attachment or sequestration by a court of competent
jurisdiction of all or a significant portion of NHES' property.
16.3. Termination of Work Orders. (a) Should Pfizer Health terminate
this Agreement pursuant to Sections 16.1 or 16.2, Pfizer Health may, at its
option, terminate any or all Work Orders outstanding, upon thirty (30) days'
written notice.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(b) Either party may terminate a Work Order, effective immediately upon
receipt of notice of default to the other party, in the event that the other
party materially defaults on the performance or observance of any of the
material terms or conditions of such Work Order, which default is not remedied
within thirty (30) calendar days after written notice specifying the nature of
the default is received by the defaulting party. Notwithstanding the foregoing,
this Section 16.3 shall not apply to a failure by Pfizer Health to meet a
payment obligation as to which there is a good faith dispute, up to the amount
of such dispute.
(c) Upon receipt of notice by either party of termination pursuant to
Sections 16.3(a) or 16.3(b), NHES shall inform Pfizer Health of the extent to
which performance has been completed through such date, and collect and deliver
to Pfizer Health whatever Deliverables and other work product have been
developed pursuant to the applicable Work Order(s) and then exist, in a manner
to be prescribed by Pfizer Health. NHES shall be paid for all work performed
pursuant to such Work Order(s) through the date of termination, provided that
such payment shall not be greater than the payment that would have become due if
the work had been completed.
16.4. Refusal of Work Orders. If Pfizer Health fails to meet a payment
obligation as to which there is a good faith dispute between the parties, up to
the amount of such dispute: (a) NHES may decline to accept any additional Work
Orders, provided that it continue to perform in accordance with this Agreement
and any Work Orders then in effect; and (b) such failure to pay shall not be
considered an uncured material breach pursuant to Section 16.1.
Section 17. EFFECT OF TERMINATION OR EXPIRATION
17.1. Deliverables. Upon termination or expiration of this Agreement,
all completed or partially completed Customized Products, [Deleted - see *],
related Documentation and other Deliverables developed, and for which Pfizer
Health has made payment, pursuant to this Agreement and any applicable Work
Order, shall be transferred to Pfizer Health.
17.2 Payments. (a) Upon (1) expiration of this Agreement or (2)
termination of this Agreement due to either: (i) an uncured material breach by
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
NHES under Section 16.1, or (ii) one of the events described in Section 16.2, no
further amounts (except for amounts past due) will be payable to NHES, and NHES
shall repay to Pfizer Health any amounts received by it that are in excess of
payments due under this Agreement for work actually performed to the point in
time of termination or expiration.
(b) Upon termination of this Agreement due to an uncured
material breach by Pfizer Health under Section 16.1, Pfizer Health shall pay
NHES the balance of the $ 1,375,000 due under Section 2.2 of this Agreement, and
shall be entitled to receive NHES Products and NHES Services of the same value.
17.3. Winding-Up. Upon termination or expiration of this Agreement,
NHES shall provide the necessary services for winding up, including services in
connection with the transition to a substitute product by Pfizer Health, its
Affiliates, or its Customers, as requested by Pfizer Health, to the extent
Pfizer Health agrees to make payments for such services, which payments shall be
at the rates established pursuant to Section 14.2, up to an amount of $50,000.
17.4. Survival Provisions of Agreement. (a) In the event of any
termination or expiration of this Agreement, the perpetual licenses granted in
Section 10 and the provisions of Sections 18.1(a), 18.1(b), 18.2, 18.4 and 19.1
hereof shall survive and continue in effect and shall inure to the benefit of
and be binding upon the parties and their legal representatives, heirs,
successors, and assigns.
(b) In the event of any termination or expiration of this Agreement,
Sections 18.3 and 21.2 hereof shall survive and continue in effect and shall
inure to the benefit of and be binding upon the parties and their legal
representatives, heirs, successors, and assigns for a period of two (2) years
after such termination or expiration.
17.5. Survival of Confidential Information. In the event of any
termination or expiration of this Agreement, Section 12 shall survive and
continue in effect and shall inure to the benefit of and be binding upon the
parties and their legal representatives, heirs, successors, and assigns for a
period of five (5) years after termination or expiration of this Agreement;
except that Pfizer Health shall maintain in confidence all Source Code for the
NHES Products, including, without limitation, all Technology and Documentation
related thereto, in accordance with Section 12 of this Agreement in perpetuity.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
17.6. Survival of Work Order. Upon termination or expiration of this
Agreement, any Work Order then in effect shall continue to remain in effect, at
Pfizer Health's sole option, for the term of the Work Order, unless the Work
Order is terminated pursuant to Section 16.3.
17.7. Survival of License Agreement, Annual License, Support and
Maintenance Agreement and Applicable Warranties. Upon termination or expiration
of this Agreement, any License Agreements and Annual License, Support and
Maintenance Agreements in effect on such date of termination or expiration, and
Sections 18.1(c) and 18.1(d) applicable thereto, shall remain in effect in
accordance with the terms of such agreements.
17.8. Survival of Rights Accrued Prior to Termination. The exercise of
any right of termination under this section shall not affect any rights which
have accrued prior to termination and shall be without prejudice to any other
legal or equitable remedies to which the terminating party may be entitled by
reason of such rights.
Section 18. REPRESENTATIONS AND WARRANTIES
18.1. General Representations and Warranties of NHES. NHES hereby
represents, warrants and covenants to Pfizer Health that:
(a) NHES has full corporate power and authority to enter into this
Agreement, and the execution by NHES of this Agreement and the consummation by
NHES of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate actions on behalf of NHES; the execution
and delivery of this Agreement by NHES, and the consummation of the transactions
contemplated by this Agreement, do not conflict with or violate: (i) the charter
documents or by-laws of NHES; (ii) any contract or agreement to which NHES or
any of its Affiliates is a party, by which NHES or any of its Affiliates is
bound, or to which NHES' or any of its Affiliates' assets are subject; or (iii)
any applicable law or the order of any court or governmental authority;
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(b) NHES is the legal and beneficial owner of all rights, title and
interest in the NHES Products having good title thereto, free and clear of any
and all liens, subject to the licenses from third parties to NHES set forth in
Schedule F hereto, and the liens on NHES Products provided on Schedule G hereto;
(c) NHES shall diligently perform all NHES Services in a professional
and workmanlike manner and in accordance with industry standards and practices
applicable to the performance of such services; and
(c) The support services described in the License Agreement or Annual
License, Support and Maintenance Agreement, whichever is applicable, are
sufficient in NHES' experience to enable Pfizer Health or a third party to use
and operate NHES Products.
18.2. Warranty for Infringement. NHES hereby represents, warrants and
covenants to Pfizer Health that:
(a) NHES shall have obtained all the necessary licenses and
authorizations to use Third Party Products before incorporating it into, or
using it in connection with, NHES Products, Customized Products, [Deleted - see
*], or any other Deliverables; the incorporation of any Third Party Product in
any NHES Product, Customized Product, Interface, or Deliverable is, to the
extent necessary, permitted by such third parties; the use, reproduction,
distribution or modification of any NHES Product, Customized Product,
Interfaces, or any other Deliverable shall not be in violation of any third
party rights in such Third Party Product; and the term of such licenses and
authorizations is for the term of the Agreement, and, if longer, the term of the
relevant License Agreement or Annual License, Support and Maintenance Agreement,
as applicable, except where such license would violate any confidentiality
agreement between NHES and a third party.
(b) Neither the NHES Products, including, without limitation, any
Technology, nor the copying, using or selling thereof to the extent permitted
under this Agreement or attachments hereto, infringe or are infringed by any
United States copyright, trade secret, United States trademark, United States
patent or any other intellectual property right of any third party in the United
States; and
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(c) Neither the Customized Products, [Deleted - see *], or any other
Deliverables, the copying, making, using or selling thereof, nor the practice or
use of any process or product to develop such Customized Products, Interfaces,
or Deliverables, including, without limitation, any Technology, to the extent
permitted under this Agreement or attachments hereto, infringe or are infringed
by any United States copyright, trade secret, United States trademark, United
States patent or any other intellectual property right of any third party in the
United States.
18.3. Warranty of Performance and Reliability. Without limiting in any
way NHES' support and maintenance obligations under this Agreement or any Work
Order, NHES hereby represents, warrants and covenants that:
(a) Any Deliverable shall conform to the specifications and operational
requirements set forth in the Work Order for the development of the Customized
Product or Interface associated with such Deliverable and be free from Errors,
defects, and faulty workmanship in accordance with best industry practice;
(b) The Technology of the NHES Products, Customized Products, [Deleted
- - see *], and other Deliverables, including, without limitation, all algorithms,
are or shall be free from and do not and shall not contain Errors, defects, or
faulty workmanship in accordance with best industry practice, are or shall be as
up-to-date as is reasonably possible at the time of delivery to Pfizer Health,
its Affiliates or its Customers, and, to the best of NHES' knowledge, are or
shall be accurate, safe, efficacious and complete for use by qualified and
competent end-users;
(c) The Source Code of any NHES Product, Customized Product, Interface,
or any other Deliverable (i) is or shall be free from physical defects in the
media in which it is embodied and (ii) does not or shall not contain any (A)
"back door," "time bomb," "drop dead" device or other software routine designed
to disable a computer program automatically with the passage of time or under
the positive control of any person or (B) any virus, "Trojan horse," "worm" or
other software routines or hardware components designed to permit unauthorized
access, to disable, erase or otherwise harm software, hardware or date, or to
perform any other similar actions;
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(d) The descriptions of the NHES Product, Customized Product, [Deleted
- - see *], or any other Deliverable contained in each Work Order are a part of
the basis of the bargain, and the NHES Product, Customized Product, Interface,
or any other Deliverable shall conform to such descriptions in all material
respects; and
(e) Upon completion of all performance obligations under each Work
Order, the NHES Product, Customized Product, [Deleted - see *], or any other
Deliverable shall be reasonably suitable for its intended purpose as set forth
in the terms of the Work Order.
18.4. General Representations and Warranties of Pfizer Health. Pfizer
Health hereby represents, warrants and covenants to NHES that Pfizer Health has
full corporate power and authority to enter into this Agreement, and the
execution by Pfizer Health of this Agreement and the consummation by Pfizer
Health of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate actions on behalf of Pfizer Health; the
execution and delivery of this Agreement by Pfizer Health, and the consummation
of the transactions contemplated by this Agreement, do not conflict with or
violate: (1) the charter documents or by-laws of Pfizer Health; or (2) any
contract or agreement to which Pfizer Health or any of its Affiliates is a
party, by which Pfizer Health or any of its Affiliates is bound, or to which any
of Pfizer Health's or any Affiliates' assets are subject; or (3) any applicable
law or the order of any court or governmental authority.
18.5. LIMITATIONS. THE REPRESENTATIONS AND WARRANTIES OF NHES AND
PFIZER HEALTH SET FORTH IN SECTIONS 18.1, 18.2, 18.3, and 18.4 ARE IN LIEU OF
ALL OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED REPRESENTATIONS OR WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Section 19. INDEMNIFICATION
19.1. Indemnification by NHES. (a) NHES shall indemnify Pfizer Health,
its Affiliates, and its Representatives and hold them harmless from any and all
claims, losses, deficiencies, damages, liabilities, costs, and expenses
(including, but not limited to, reasonable attorneys' fees and all related costs
and expenses) incurred by Pfizer
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Health, its Affiliates, or its Representatives as a result of any third party
claim, judgment or adjudication against Pfizer Health alleging or arising from:
(1) the infringement by any of the Deliverables of any third party intellectual
property rights; (2) the intentional misconduct, negligent actions or omissions,
or grossly negligent actions or omissions of NHES or its Representatives, in
performing under the terms of this Agreement or any Work Order related thereto;
and (3) any breach or allegation which, if true, would constitute a breach of
any of NHES' obligations, representations, covenants or warranties under
Sections 18.1, 18.2 and 18.3; and (4) any product liability arising from the use
of NHES Products, Customized Products, [Deleted - see *], or any other
Deliverables; provided that Pfizer Health promptly notifies NHES in writing of
any such claims and reasonably cooperates with NHES in defending against any
such claims, at NHES' sole expense.
(b) To the extent that Pfizer Health, its Affiliates and its
Representatives exercise their rights to use the NHES Products, NHES Services,
Customized Products, Related Services and [Deleted - see *] pursuant to Sections
10.1(a), 10.2(a)(1), 10.3(a), 10.4(a) and 10.5(a), NHES assumes liability for
and hereby agrees to indemnify, protect and keep harmless Pfizer Health, its
Affiliates, and its Representatives for, from and against any and all
liabilities, obligations, losses, damages, injuries, claims, demands, penalties,
actions, costs and expenses, including reasonable attorneys' fees, of whatsoever
kind and nature, arising out of any failure on the part of NHES to perform or
comply with its obligations under this Agreement.
19.2. Indemnification by Customer. NHES shall obtain an agreement from
each Customer to indemnify, protect and keep harmless Pfizer Health, its
Affiliates and its Representatives for, from and against any and all
liabilities, obligations, losses, damages, injuries, claims, demands, penalties,
actions, costs and expenses, including reasonable attorneys' fees, of whatsoever
kind and nature, arising out of: (1) any failure on the part of such Customer to
perform or comply with its obligations under any License Agreement or Annual
License, Support and Maintenance Agreement in effect; and (2) any advice,
information, health reference information or materials provided directly or
indirectly by the Customer to an independent third party as a result of the
normal use and operation of any NHES Product, NHES Service, Customized Product,
Related Service or
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
[Deleted - see *]; provided that if the Customer agrees to provide additional
indemnification to NHES, NHES shall obtain an agreement from such Customer to
provide commensurate indemnification to Pfizer Health, its Affiliates and its
Representatives.
19.3. Indemnification by Pfizer Health. (a) Pfizer Health shall
indemnify NHES and hold NHES harmless from any and all claims, losses,
deficiencies, damages, liabilities, costs, and expenses (including, but not
limited to, reasonable attorneys' fees and all related costs and expenses)
incurred by NHES as a result of any third party claim, judgment or adjudication
against NHES alleging or arising from intentional misconduct, negligent actions
or omissions, or grossly negligent actions or omissions of Pfizer Health, its
Affiliates, or its Representatives, in performing pursuant to this Agreement or
any Work Order related thereto; provided that NHES promptly notifies Pfizer
Health in writing of any such claims and reasonably cooperates with Pfizer
Health in defending against such claims, at Pfizer Health's sole expense.
(b) Pfizer Health shall indemnify NHES in connection with its use of
any NHES Products pursuant to Section 10.1 in accordance with the licensee
indemnification provisions set forth on Schedule D or Schedule E, as applicable.
19.4. NHES Insurance. During the term of this Agreement, NHES shall
carry comprehensive property damage and liability insurance, including, without
limitation, protection against product liability claims, with reputable and
financially secure insurance carrier(s), affording it coverage consistent with
good business practice for the size and type of business operated by NHES. This
insurance shall cover any actions of Pfizer Health, its Affiliates and its
Customers under the provisions of this Agreement or any Work Order issued
hereunder. Additional insurance requirements may be imposed in connection with a
Work Order. Upon request, NHES shall provide Pfizer Health with certificates of
insurance or other proof of insurance.
19.5. Litigation. (a) In the event that any third party makes a claim
or brings an action against NHES and/or Pfizer Health directly or indirectly
related to any NHES Product, Customized Product, [Deleted - see *], or other
Deliverable, the party becoming aware of such claim or action shall provide
prompt notice thereof to the other party. The party that pays for the defense or
settlement of the claim or action shall have the first right to direct the
defense or settlement against such claim or action.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(b) Pfizer Health shall bear its own respective direct expenses in
defending or settling such claim or action unless such claim or action is
subject to the indemnity by NHES set forth in Section 19.1, in which case NHES
shall bear all of Pfizer Health's reasonable litigation expenses, as incurred,
provided that Pfizer Health tenders to NHES its right to direct the defense or
settlement against such claim or action.
(c) If NHES is named as sole defendant or otherwise undertakes any
defense of such claim or action, Pfizer Health shall have the right, bearing its
own direct expenses, to join and participate in such defense; provided, however,
that if such claim or action is subject to the indemnity by NHES set forth in
Section 19.1, NHES shall bear all of Pfizer Health's reasonable litigation
expenses. Notwithstanding the above, Pfizer Health shall in no way be obligated
to join or participate in such defense.
(d) Notwithstanding the above, in no event shall NHES settle any such
action in a manner that does or may affect the continued rights and ability of
Pfizer Health to use, modify or maintain any NHES Product, Customized Product,
[Deleted - see *], or any other Deliverable in the manner permitted by the terms
of this Agreement without the prior written consent of Pfizer Health, which
shall not be unreasonably withheld or delayed.
19.6. Mitigation of Infringement. (a) In the event that any of NHES
Products, Customized Products, Interfaces, or Deliverables are alleged to
infringe a third party's intellectual property rights, and counsel for Pfizer
Health reasonably concludes that there is a significant possibility that such
allegation may be upheld in a litigation, in addition to any indemnity
obligations which may arise pursuant to Section 19.1, NHES shall use it best
efforts to promptly: (1) procure for Pfizer Health the right to continue using
the NHES Product, Customized Product, [Deleted - see *], or Deliverable free of
any liability or infringement; (2) provide Pfizer Health with a functionally
equivalent, non-infringing replacement for the NHES Product, Customized Product,
[Deleted - see *], or Deliverable otherwise complying with all of the
requirements of this Agreement, except that such replacement may deviate from
the specifications, as then in effect, provided such replacement does not have
an adverse effect on the operation or capacity of the NHES Product, Customized
Product, [Deleted - see *], or Deliverable.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(b) If the operation of the NHES Product, Customized Product, [Deleted
- - see *], or Deliverable would not be adversely affected by the absence of the
affected NHES Product, Customized Product, [Deleted - see *], or Deliverable,
and NHES is not reasonably able to perform the options set forth in Section
19.6(a), NHES shall use its best efforts to promptly repurchase the affected
NHES Product, Customized Product, [Deleted - see *], or Deliverable from Pfizer
Health AS IS, WHERE IS and WITH ALL FAULTS, for an aggregate price equal to the
sum of the total amounts theretofore paid and then payable to NHES under this
Agreement with respect to the affected NHES Product, Customized Product,
[Deleted - see *], or Deliverable, multiplied by a fraction, the numerator of
which will be thirty-six (36) minus the number of months since the Effective
Date, and the denominator of which will be thirty-six (36), if NHES exercises
this option to repurchase the affected NHES Product, Customized Product,
[Deleted - see *], or Deliverable within three (3) years of delivery by NHES of
the Deliverable, and otherwise at no cost to NHES.
Section 20. FORCE MAJEURE
20.1. Limitation on Liability. Neither party will be liable for failure
or delay in performance under any Work Order, and such failure or delay shall
not constitute a default under or breach of this Agreement or any Work Order
issued hereunder, for any period and to the extent that the failure or delay is
due in whole or in part to any cause beyond such party's reasonable control,
including but not limited to, action or inaction of governmental, civil or
military authority, delays in transportation, sources of supply, material
shortages, labor difficulties, accidents, Acts of God, or fire, flood, war,
riot, earthquake or any other force majeure (hereinafter "Force Majeure");
provided, however, that: (i) NHES will use a standard of care acceptable in
software development industry practice to protect against such failures and
fluctuations and may not rely on the provisions of this Section 20.1 to excuse
its failure to exercise such standard of care; and (ii) NHES' delay or failure
to perform will not be excused by a default by any of its subcontractors or
suppliers unless such failure is attributable to a cause that would excuse
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
20.2. Notice. Any party desiring to rely on an event of Force Majeure
as an excuse for its failure or delay in performance hereunder or under any Work
Order shall, when the cause arises, give to the other party prompt notice in
writing of the facts that constitute such cause; shall use diligent and
determined efforts to mitigate or overcome the effects thereof; and, when the
cause cases to exist, shall give prompt notice in writing thereof to the other
party.
20.3. Pfizer Health's Option to Terminate a Work Order. Notwithstanding
any other provision of this Agreement, in the event NHES fails to perform a
material portion of its obligations under any Work Order for sixty (60) or more
consecutive days because of an event of Force Majeure, and no alternative
service is agreed upon by the parties during such period, then Pfizer Health may
elect to terminate such Work Order as of the date specified in a written notice
of termination delivered to NHES by Pfizer Health, which shall be on or after
the date on which the Force Majeure first occurred.
20.4. Pfizer Health's Option to Terminate this Agreement.
Notwithstanding any other provision of this Agreement, in the event NHES fails
to perform a material portion of its obligations under this Agreement for sixty
(60) or more consecutive days because of an event of Force Majeure, and no
alternative service is agreed upon by the parties during such period, then
Pfizer Health may elect to terminate this Agreement as of the date specified in
a written notice of termination delivered to NHES by Pfizer Health, which shall
be on or after the date on which the Force Majeure first occurred.
Section 21. RECORDS
21.1. Records. NHES shall keep reasonably accurate records of all work
performed by NHES related to the development of each NHES Product, Customized
Product, [Deleted - see *], or any other Deliverable and of any costs incurred
by NHES in connection with such work for the term of the Agreement and for two
(2) years thereafter. Such records shall clearly and separately set forth all
relevant information, including a detailed description of the work performed,
the hourly billing rate of the individuals who are involved, the number of hours
(or part thereof) expended on the task, and the total billable amount for that
task and any components of NHES's development costs.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
21.2. Audits. NHES shall allow Pfizer Health or its agents, upon Pfizer
Health's request and reasonable prior notice, to inspect, audit and analyze all
relevant portions of NHES' books and records relating to any or all of the NHES
Products, Customized Products, Interfaces, and any other Deliverables as they
relate to this Agreement, during business hours at NHES' place of business.
Unless otherwise reasonable under the circumstances, such audits shall not occur
more frequently than once per year and shall not commence any later than two (2)
years subsequent to the expiration or termination of any Work Order. Pfizer
Health shall bear the cost of such inspection and audit unless material
unauthorized activities, materially improper record keeping or overbilling of
payments in excess of five percent (5%) of the amount required to be paid by
Pfizer Health is discovered, in which case NHES shall bear the cost of such
inspection and audit. Any overpayment by Pfizer Health shall be promptly
remitted to Pfizer Health, together with interest at the prime rate of interest
in effect at Chase Manhattan Bank, N.A., calculated from the time such
overpayment was made.
Section 22. MISCELLANEOUS
22.1. Headings. The headings of the Sections of this Agreement are for
convenience only and in no way limit or affect the terms or conditions of this
Agreement.
22.2. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
22.3. Dispute Resolution. (a) If a dispute arises between the Pfizer
Health, its Affiliates, its Customers and/or NHES in connection with this
Agreement or a Work Order submitted in connection therewith, including, without
limitation, an alleged breach of any representation or warranty herein or
therein, or a disagreement regarding the interpretation of any section hereof or
thereof (the "Dispute"), the parties agree to use the following procedure in
good faith prior to any party pursuing other available judicial or non-judicial
remedies:
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
(1) The party alleging non-performance or breach shall deliver to
the other party written notice specifying in detail the
alleged non-performance or breach (the "Dispute Notice");
(2) As soon as is reasonably practical following the delivery of
such Dispute Notice, a meeting shall be held between the
parties attended by a representative of each party having
decision-making authority regarding the Dispute, to attempt
in good faith to negotiate a resolution of the Dispute;
and/or to consider appropriate non-binding alternative
dispute resolution mechanisms ("ADRs"), including the
submission of the Dispute to a mediator or other mutually
acceptable neutral person or persons not affiliated with
either of the parties.
(b) Notwithstanding the foregoing, nothing in this Section
22.3 shall preclude any party from seeking interim or provisional relief, in the
form of a temporary restraining order, preliminary injunction or other interim
equitable relief concerning the Dispute, either prior to or during any ADR
selected by the parties, if necessary to protect the interests of such party.
22.4. Jurisdiction. If the dispute resolution process under Section
22.3 does not terminate the Dispute, then it shall be subject to the
jurisdiction of the state and federal courts of the state in which the defendant
in such action resides.
22.5. Severability. If any provision or any portion of any provision of
this Agreement is construed to be illegal, invalid or unenforceable, such
provision or portion thereof shall be deemed stricken and deleted from this
Agreement to the same extent and effect as if it were never incorporated herein,
but all other provisions of this Agreement and the remaining portion of any
provision that is construed to be illegal, invalid or unenforceable in part
shall continue in full force and effect; provided that such resulting
construction of the Agreement does not frustrate the main purpose of the
Agreement.
22.6. Entire Agreement. This Agreement, together with all the Schedules
hereto, constitutes the entire agreement between the parties and supersedes all
previous agreements, promises, representations, understandings and negotiations,
whether written or oral, between the parties with respect to the subject matter
hereof. In the event any one or more of the provisions of this Agreement shall
for any reason be held to be invalid, illegal or unenforceable, the remaining
provisions of this Agreement shall be unimpaired. The terms and conditions of
any and all Schedules to this Agreement are incorporated herein by this
reference and shall constitute part of this Agreement as if fully set forth
herein.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
22.7. Publicity. Neither party shall promote or otherwise publicize the
terms and conditions of this Agreement, any Work Order issued hereunder, or the
Customized Products, Related Services or Interfaces developed or distributed
thereunder, without the prior approval of the other party, except for any
disclosures required by law, in which case the disclosing party shall provide
the other party with reasonable advance notice of such disclosure.
22.8. No Assignment Without Consent. (a) This Agreement shall inure to
the benefit of and be binding upon the parties hereto, their successors and
assigns. The rights granted to each party hereunder are personal in nature.
(b) NHES shall not sell, transfer, lease, sublicense or assign this
Agreement, any of its obligations, rights and interests hereunder, or any part
thereof, to any third party, by operation of law or otherwise, without prior
written consent of Pfizer Health, except to a successor entity in connection
with the sale of substantially all of Pfizer Health's business, subject to
NHES's option to terminate pursuant to Section 16.2.
(c) Pfizer Health shall not sell, transfer, lease, sublicense or assign
this Agreement, its obligations, rights and interests hereunder, or any part
thereof to any unaffiliated third party, by operation of law or otherwise,
without the prior written consent of NHES, except to a successor entity in
connection with the sale of substantially all of Pfizer Health's business.
22.9 No Relationship Between the Parties. Neither NHES nor Pfizer
Health shall represent itself as the agent or legal representative of the other
or as joint ventures for any purpose whatsoever, and neither shall have any
right to create or assume any obligations of any kind, express or implied, for
or on behalf of the other in any way whatsoever.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
22.10 Non-Waiver. A failure of either party to enforce at any time any
term, provision or condition of this Agreement, or to exercise any right or
option herein, shall in no way operate as a waiver thereof, nor shall any single
or partial exercise preclude any other right or option herein; in no way
whatsoever shall a waiver of any term, provision or condition of this Agreement
be valid unless in writing, signed by the waiving party, and only to the extent
set forth in such writing.
22.11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
22.12 Notices. (a) All legal notices to either party shall be given:
If to Pfizer Health: If to NHES:
- -------------------- -----------
Pfizer Health Sciences, Inc. National Health Enhancement Systems, Inc.
235 E. 42nd Street 3200 North Central Avenue, Suite 1750,
New York, New York Phoenix, Arizona 85012;
10017-5755
Attn: President
Attn: Secretary Telecopy: (602) 274-6158
Telecopy: (212) 573-3977
Copy to: Copy to:
- -------- --------
Dennis J. Block Thomas H. Curzon
Weil, Gotshal & Manges Osborn Maledon
767 Fifth Avenue 2929 N. Central Avenue
New York, New York 10153 Suite 2100
Phoenix, Arizona 85012
Telecopy: (212) 310-8007 Telecopy: (602) 235-9444
(b) All notices required or permitted to be given under Sections 7.1
and 22.12(a) shall be given in writing and, unless specifically provided
otherwise in this Agreement, shall be deemed to have been given if personally
delivered, faxed (with receipt confirmed) or mailed (by registered or certified
air mail, return receipt requested), postage prepaid, to the party concerned, at
its address or addresses as set forth below or as designated from time to time
by notice in writing.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
22.13. Written Approval. All approvals and/or consents required by a
party to this Agreement and each Work Order must be requested by such party in
writing to the other party, and all approvals or consents shall not be effective
unless in writing.
22.14 Schedules. The following Schedules referred to in the Agreement
are incorporated in this Agreement in their entirety.
Schedule A: Description and Prices of
NHES Products and NHES Services
Schedule B: Customized [Deleted - see
*] General Project Description
Schedule C: Form of Work Order
Schedule D: License Agreement
Schedule E: Annual License, Support
and Maintenance Agreement
Schedule F: Licenses to NHES from
Third Parties
Schedule G: Liens on NHES Products
Schedule H: Product Support and
Consulting Rate Fees
Schedule I: Present Significant
Owners of NHES Securities
Schedule J: Quarterly Purchase
Schedule of NHES Products and NHES
Services
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
IN WITNESS THEREOF, Pfizer Health and NHES have caused this
Agreement to be signed and delivered by their duly authorized officers, all as
of the date first hereinabove written.
Pfizer Health Sciences, Inc. National Health Enhancement Systems, Inc.
By:________________________ By: _______________________
Name:______________________ Name:______________________
Title:_____________________ Title:_____________________
<TABLE>
<CAPTION>
Schedule A.
PFIZER INC
[Deleted - see *]
DEMAND MANAGEMENT
FEES
PRODUCT DESCRIPTION INITIAL*/ANNUAL AVAILABLE
------- ----------- --------------- ---------
<S> <C> <C> <C>
Centramax Plus - Installed system complete with adult & [Deleted - see *] YES
Hospital Systems pediatric triage algorithms and related
health education databases.
Centramax Plus - Installed system complete with adult & [Deleted - see *] YES
Managed Care pediatric triage algorithms and related
( 50,000 Members health education databases.
50,000 - 99,999
100,000 - 249,999
250,000 - 500,000
) 500,000
Pediatric Triage/ Installed system with pediatric triage [Deleted - see *] YES
Advice System algorithms and health education
guidelines.
Demand Management Service Bureau for Demand Management and To Be Defined Mar - 96
Service Bureau other call center applications
- ---------------------------------------------------
*Initial Fee reflects a 20% savings off list price.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Schedule A.
VOICE RESPONSE SYSTEMS
----------------------
FEES
PRODUCT DESCRIPTION INITIAL*/ANNUAL AVAILABLE
------- ----------- --------------- ---------
VoiceMax Plus Installed audio text hardware w/1,200 [Deleted - see *] YES
(varies with volume) health education scripts and ability to [Deleted - see *]
8 lines customize or add additional topics [Deleted - see *]
12 lines (custom topics at $75 ea.).
16 lines
Communication Plus National Service Bureau for audio Level Monthly Topics Monthly Fee YES
library services. ----- -------------- -----------
1 (500 [Deleted - see *]
2 1,250 [Deleted - see *]
3 2,000 [Deleted - see *]
4 2,750 [Deleted - see *]
5 3,500 [Deleted - see *]
6 4,250 [Deleted - see *]
7 5,000 [Deleted - see *]
8 5,750 [Deleted - see *]
9 6,500 [Deleted - see *]
10 7,250 [Deleted - see *]
(7,250 [Deleted - see *]
Parent Advice Line Installed audio text hardware with 250 [Deleted - see *] YES
(Installed System) Pediatric topics for parents.
Parent Advice Line Service Bureau audio text w/250 Same fee structure as Communication Plus Nov - 95
Pediatric topics for parents.
Physician Test National Service Bureau to disseminate To Be Defined Feb - 96
Results physician test results.
Practice Information Service Bureau for Medical Practice and To Be Defined May - 96
Line Information.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Schedule A.
HEALTH RISK ASSESSMENTS
FEES
PRODUCT DESCRIPTION INITIAL*/ANNUAL AVAILABLE
------- ----------- --------------- ---------
Health Risk Installed system for HRA processing. [Deleted - see *] Mar - 96
Assessments [Deleted - see *]
(Installed System)
Health Risk Service Bureau for HRA processing. Quantity Per Test Mar - 96
Assessments -------- --------
(Service Bureau)
1 - 1,999 [Deleted - see*]
2,000 - 2,999 [Deleted - see*]
3,000 - 4,999 [Deleted - see*]
5,000 - 9,999 [Deleted - see*]
10,000+ Per Quote
</TABLE>
*All availability dates for Products or Services not yet available are estimates
only and may vary.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Schedule B.
[Deleted - see *]
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Schedule C.
FORM OF WORK ORDER
1. General. This Work Order, dated as of _____________________, is entered into
under the Agreement between Pfizer Health Sciences, Inc. and National Health
Enhancement Systems, Inc., dated as of December ___, 1995.
2. Technical Coordinators.
Pfizer Health: NHES:
name: name:
address: address:
3. Summary or Purpose of Statement of Work.
4. Identification of Preexisting Works.
5. Estimated Development Cost.
6. Payment Schedule.
7. Development Schedule and Performance Milestones.
8. Completion and Acceptance Criteria.
9. Estimated Support Cost.
10. Third Party Subcontractors:
(a) Performance Obligations
(b) Cost Estimates
11. Licenses to NHES.
12. Applicable Royalties, if any.
13. Other relevant items.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Pfizer Health Sciences, Inc.
By:________________________
Name:______________________
Title:_____________________
National Health Enhancement Systems, Inc.
By: _______________________
Name: _____________________
Title:_____________________
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Schedule D.
LICENSE AGREEMENT
This License Agreement is entered into as of this ____day of
___________________, 19____, by and between National Health Enhancement Systems,
Inc., a Delaware corporation ("Licensor"), and
______________________________________________________________________,_________
_________________________,__________________________,________,("Licensee").
Whereas, each Product (as defined hereunder) is an NHES Product or Deliverable,
as defined in the Development and Distribution Agreement entered into on
December _____, 1995, by and between Licensor and Pfizer Health Sciences, Inc.
In consideration of the mutual promises and subject to the terms and conditions
set forth herein, Licensor and Licensee agree as follows:
1. DEFINITIONS.
a. "Product" shall have as its meaning the definition provided in each
Schedule attached hereto.
b. "Schedule" shall mean any schedule attached hereto.
c. "License Agreement" shall mean this license agreement.
d. "Agreement" shall mean the License Agreement, any and all Schedules
attached thereto, and any and all exhibits attached to said Schedules.
2. LICENSE.
a. License Grant. Licensor hereby grants to Licensee, on the terms and
conditions of this Agreement, a license to use each Product or portions thereof
for Licensee's own use and benefit. The license to use does not include the
right to reproduce or copy any portion of any Product except for normal backup
procedures by Licensee, except as agreed to in writing by Licensor. Any
authorized or unauthorized copy of any portion of any Product is, and remains,
entirely the property of Licensor and shall include all copyright or trade
secret notices of Licensor set forth thereon or therein, or provided by
Licensor. For purposes of this Agreement, "use" of the "Product" refers to
physical use of the Product at Licensee's business location. "Physical use" does
not prohibit Licensee from conducting marketing efforts or solicitation related
to use of the Product outside Licensee's business location.
b. License Term. Unless otherwise stated, the license for the Product shall
continue until termination of this Agreement pursuant to Section 6 hereof.
c. Proprietary Rights and Confidentiality. Licensee's rights in each Product are
expressly limited to the right of use, as set forth in this Section 2, each
Schedule and any exhibits thereto, which are hereby incorporated herein by this
reference. Each Product shall at all times remain the property of Licensor, and
Licensee shall have no right, title or interest therein, except as expressly
stated in this Agreement. Licensee shall not sublicense, sell, transfer, lease,
assign or otherwise make available to others its right to use any Product or
copies thereof, except as specifically set forth in this Agreement, and any
attempt to do so shall be null and void and of no force or effect. Licensee
shall secure and protect each Product and copies thereof in a manner consistent
with complete preservation of Licensor's copyright and trade secret rights, and
shall take such actions to protect and preserve such rights as Licensee takes
with respect to its most valuable proprietary property. Licensee agrees not to
remove or destroy copyright notices, other confidentiality legends, or
proprietary markings placed upon or contained within any Product, and shall copy
the same in full on any copies of any such Product Licensee may make.
d. Injunctive Relief. Licensee acknowledges that each Product is proprietary in
nature and that Licensee's unauthorized transfer or disclosure of any of the
Products to a third party would cause great and irreparable harm to Licensor.
Licensee further acknowledges that, in the event of such unauthorized transfer
or disclosure, Licensor shall be entitled, as a matter of right, to an
injunction from a court of competent jurisdiction restraining further
unauthorized disclosures or use. This right to injunctive relief shall be in
addition to any other rights or remedies which Licensor may have pursuant to
this Agreement, or at law, including, without limitation, the right to recover
monetary damages, whether compensatory or punitive.
e. Further Restrictions on Use. Licensee may not, and may not cause or permit
any other person to, reverse compile, disassemble, decode, copy, modify, alter,
electronically transfer, sublicense any Product or any portion thereof, except
as stipulated in the related software user's manual for normal backup
procedures, or with the express prior written consent of Licensor.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
LICENSE AGREEMENT
f. Copyrights. No copyright license is granted to Licensee in any copyrighted
materials obtained from Licensor.
g. Possession of Product. Licensee shall not, without the prior written consent
of Licensor, knowingly or willingly part with possession or control of, or
suffer or allow to pass out of its possession or control, any Product, and
Licensee shall take all reasonable precautions to ensure that any Product does
not pass out of Licensee's possession or control. Licensee shall promptly notify
Licensor of all details of any claimed encumbrances upon, or any accident
allegedly resulting from the use or operation of any Product.
3. CLIENT QUALITY CONTROL REQUIREMENTS. To preserve and protect Licensor's
service marks and other proprietary rights, Licensee agrees, among other things,
to do each of the following:
a. Administer and conduct each Product in accordance with operating
instructions, specifications and recommendations made by Licensor. It is
understood and agreed that, except for quality control necessary to preserve and
protect Licensor's proprietary marks, if applicable, Licensee shall have full
and sole authority and responsibility for implementing, marketing, and
administering each Product and providing advice or information to patients or
members of the general public, whether or not such information is based on the
use of the Product.
b. Licensee shall participate and cooperate with Licensor in accumulating
certain Licensee information. Each quarter, Licensee shall provide Licensor with
certain performance data from the use of each Product, as reasonably requested
by Licensor. Such information shall be kept confidential by Licensor and used
strictly as statistical information to be shared with other authorized
licensees.
4. EVENTS OF DEFAULT BY LICENSEE.
a. Definition. "Event of Default by Licensee" shall mean those events described
in (b) and (c) below:
b. Individual Schedules. Licensee shall be in default under this License
Agreement as it relates to any individual Schedule, upon the happening of any of
the following events or conditions:
(i) Any default with respect to such Schedule by Licensee under Section
2 of this License Agreement and failure to cure the default immediately upon
receipt of written notice from Licensor.
(ii) Any default by Licensee in the performance or payment of any other
obligation now or hereafter owed by Licensee to Licensor under such Schedule or
this License Agreement as it relates to that Schedule and the continuance of
such default for thirty (30) consecutive days after receipt of written notice
from Licensor, except that, with respect to defaults under Section 3.a. of this
License Agreement as it relates to such Schedule, Licensee shall have ninety
(90) days to cure default after receipt of written notice from Licensor;
c. The Agreement. Licensee shall be in default of the entire Agreement upon the
dissolution, liquidation or termination of the existing Licensee or the
discontinuance of its business, the insolvency or business failure of, or
appointment of a receiver for any part of the property, or assignment for the
benefit of creditors of, Licensee, or the commencement by or against Licensee of
bankruptcy or insolvency proceedings which is not dismissed within ninety (90)
days.
No express or implied waiver by Licensor of any Event of Default by Licensee
hereunder shall in any way be, or be construed to be, a waiver of any future or
subsequent Event of Default by Licensee, whether similar in kind or otherwise.
5. EVENTS OF DEFAULT BY LICENSOR.
a. Definition. "Event of Default by Licensor" shall mean those events described
in (b) and (c) below:
b. Individual Schedules. Licensor shall be in default under this License
Agreement as it relates to any individual Schedule, upon the happening of any of
the following events or conditions: a material default in the performance or
payment of any obligation now or hereafter owed by Licensor to Licensee under
said Schedule or the License Agreement as it relates to said Schedule and the
continuance of such default for thirty (30) days after receipt of written notice
from Licensee to Licensor of such default.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
LICENSE AGREEMENT
c. The Agreement. Licensor shall be in default of the entire Agreement upon the
happening of any of the following events or conditions: The dissolution,
liquidation or termination of Licensor; the discontinuance of its business, the
insolvency or business failure of, or appointment of a receiver for any part of
the property, or assignment for the benefit of creditors of, Licensor; the
commencement by or against Licensor of bankruptcy or insolvency proceedings
which are not dismissed in ninety (90) days.
No express or implied waiver by Licensee of any Event of Default by Licensor
hereunder shall in any way be, or be construed to be, a waiver of any future or
subsequent Event of Default by Licensor, whether similar in kind or otherwise.
6. TERMINATION AND LICENSE TERM. This License Agreement is effective with
respect to any Schedule so long as such Schedule remains in effect.
a. Termination by Licensee During Operation. Licensee may terminate this License
Agreement as it relates to any individual Schedule (i) by providing at least
twelve (12) months prior written notice to Licensor or (ii) upon the occurrence
of an Event of Default by Licensor. Licensee may terminate the entire Agreement
(i) by providing at least twelve (12) months prior written notice to Licensor or
(ii) upon the occurrence of an event described in Section 5.c. above.
b. Termination by Licensor. Licensor may terminate this License Agreement as it
relates to any individual Schedule upon the occurrence of any event described in
Section 4.b. by delivering written notice to Licensee specifying the nature of
the default. Licensor may terminate the entire Agreement upon the occurrence of
any event described in Section 4.c. above by delivering written notice to
Licensee, specifying the nature of the default.
c. Licensee's Obligations Upon Termination. Licensee agrees that promptly upon
the termination of this Agreement, or any portion thereof, Licensee shall return
to Licensor any Product or portion thereof, including any copies of the
foregoing, provided under the terminated portion(s) of the Agreement in
Licensee's possession. Upon such termination, Licensee shall not make, nor
permit, the use of any such Product or copy thereof. The provisions of Section
2.c. of this License Agreement concerning confidentiality shall survive the
termination of the Agreement or any portion thereof.
d. Client Support Services. Upon termination pursuant to this Section 6, the
client support services provided in the Schedule(s) subject to termination shall
be discontinued.
e. No Release. Except as the parties otherwise may agree, or as expressly stated
herein, no termination shall release Licensor or Licensee from any liability for
recoverable damages caused by that party's material default under this
Agreement.
7. RISK OF LOSS. All risk of loss, damage, theft or destruction to any equipment
or other personal property, including any device on which any Product resides,
in Licensee's possession and control shall be borne by Licensee.
8. INDEMNIFICATION.
a. Except for any obligation disclaimed pursuant to Section 9.c. herein, and
matters as to which Licensee is required to indemnify Licensor pursuant to
Section 8.b. and c. herein, Licensor assumes liability for and hereby agrees to
indemnify, protect and keep harmless Licensee, its officers, directors,
shareholders, agents, employees and assigns for, from and against any and all
liabilities, obligations, losses, damages, injuries, claims, demands, penalties,
actions, costs and expenses, including reasonable attorneys' fees, of whatsoever
kind and nature, arising out of any failure on the part of Licensor to perform
or comply with its obligations under the Agreement. The indemnities and
assumptions of liabilities and obligations herein provided for shall continue in
full force and effect notwithstanding the expiration or other termination of
this Agreement. Nothing contained in this Agreement shall authorize Licensee or
any other person to operate any portion of any Product so as to incur or impose
any liability or obligation for, or on behalf of, Licensor.
b. Licensee assumes liability for, and hereby agrees to indemnify, protect and
keep harmless Licensor, its officers, directors, shareholders, agents,
employees, and assigns, and Pfizer Health Sciences, Inc., its officers,
directors, shareholders, agents, employees, assigns and affiliates for, from and
against any and all liabilities, obligations, losses, damages, injuries, claims,
demands, penalties, actions, costs and expenses, including reasonable attorneys'
fees, of whatsoever kind and nature, arising out of any failure on the part of
Licensee to perform or comply with its obligations under this Agreement.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
LICENSE AGREEMENT
c. Except to the extent of Licensor's indemnity obligations under Section 8.a.,
Licensee assumes liability for, and hereby agrees to indemnify, protect and keep
harmless Licensor, its officers, directors, shareholders, agents, employees, and
assigns, and Pfizer Health Sciences, Inc., its officers, directors,
shareholders, agents, employees, assigns and affiliates for, from and against
any and all liabilities, obligations, losses, damages, inquiries, claims,
demands, penalties, actions, costs and expenses, including reasonable attorney's
fees, of whatsoever kind and nature, arising out of advice, information, health
reference information or materials, provided directly or indirectly by Licensee
or a representative of Licensee to an independent third party as a result of the
normal use and operation of any Product.
d. Licensee represents to Licensor that Licensee has professional liability
insurance and Licensee shall maintain professional liability insurance in at
least such amount during the term of this Agreement and for a five year period
thereafter. Upon Licensor's request, Licensee will provide certificates of
insurance or other evidence reasonably demonstrating compliance with this
Section.
9. WARRANTY AND DISCLAIMERS.
a. Warranty.
(i) Licensor represents and warrants that it has the title or right to
grant to Licensee the license described herein for use of each Product.
(ii) Licensor warrants that each Product will conform to the features,
function descriptions and specifications of such Product set forth in user
documentation and other written instructions provided by Licensor. This warranty
is conditioned upon Licensee using each Product in accordance with the user
documentation and other instructions provided by Licensor with respect to the
Product and shall be null and void if Licensee alters or modifies the Product
without the prior written consent of Licensor.
b. Infringement. Licensor further represents and warrants to Licensee that
Licensor, at its own expense and in timely fashion, will defend, protect,
indemnify and hold Licensee harmless against any and all liabilities, damages,
costs and expenses, including reasonable attorneys' fees, which Licensee may
incur or be held liable for by reason of any action, suit, proceeding or claim
instituted against Licensee by any third party for infringement of any United
States patent, copyright, trademark, trade secrets or other proprietary rights,
based upon Licensee's use of any Product in unmodified form, provided that (1)
Licensee promptly notifies Licensor in writing of any such action, suit,
proceeding or claim and cooperates fully (at no out-of-pocket expense to
Licensee) with Licensor in the defense thereof, and (2) Licensor has sole
control of the defense and any related settlement negotiations. If any Product
is, in Licensor's opinion, likely to become or does become the subject of a
claim of infringement or misappropriation of a patent, copyright, trade secret
or other proprietary right, Licensor may, in addition to its rights in this
Section and at Licensor's election, (a) promptly replace the Product with a
compatible, functionally equivalent non-infringing Product, (b) promptly modify
the Product to make it non-infringing without materially impairing Licensee's
ability to use the Product as intended, (c) promptly procure the right of
Licensee to continue using the Product, or (d) refund the pro rata portion of
Licensee's prepaid license fee (based on a useful life of two (2) years) and
maintenance fees, and the license for such Product shall be terminated. This
indemnity does not extend to modifications of any Product made by Licensee or
any third party or to any unauthorized use of any Product.
c. Disclaimer; Limitations of Remedies. EXCEPT FOR THE EXPRESS WARRANTIES IN
SUBSECTIONS (a) and (b) OF THIS SECTION 9 AND THOSE EXPRESSLY PROVIDED FOR IN
ANY SCHEDULE OR EXHIBITS ATTACHED THERETO, THERE ARE NO REPRESENTATIONS OR
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE CONDITION OR
PERFORMANCE OF ANY PRODUCT OR THE MERCHANTABILITY OR FITNESS FOR PARTICULAR
PURPOSE THEREOF. THUS, SUCH WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES
CONCERNING PRODUCTS OR SERVICES PROVIDED BY LICENSOR, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, AS MAY RELATE IN ANY WAY TO THE PRODUCT. IN NO
EVENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WILL LICENSOR BE
LIABLE TO LICENSEE FOR ANY DAMAGES, INCLUDING ANY LOSS OF GOODWILL, LOST
PROFITS, LOST SAVINGS OR OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT
OF THE USE OF OR INABILITY TO USE ANY PRODUCT.
Licensee assumes responsibility for the selection of each Product to achieve
Licensee's intended results, and for the installation, use and the results
obtained from that Product, including without limitation provision of advice,
information, health reference information or materials to Licensee's customers
or third parties.
d. The foregoing warranties are subject to modification as provided in each
Schedule and any exhibits attached thereto.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
LICENSE AGREEMENT
10. REMEDIES OF LICENSOR AND LICENSEE. Upon the occurrence of any Event of
Default by Licensee and at any time thereafter, Licensor may, without further
notice, exercise either simultaneously or successively any one or more of the
following remedies, as Licensor in its sole discretion may elect:
a. Terminate any applicable portion of the Agreement pursuant to Section 6;
b. Take possession of any Product provided by any Schedule subject to the Event
of Default by Licensee and all copies thereof without any liability for suit,
action or other proceeding by Licensee;
c. Cause Licensee at its expense promptly to return each Product provided by any
Schedule subject to the Event of Default by Licensee and all copies of such
Product to Licensor;
d. Use, hold, sell or otherwise dispose of Licensee's interest in (i) the entire
Agreement, if the entire Agreement is subject to default pursuant to 4.c.
hereof, (ii) any portion of the Agreement which is subject to an Event of
Default by the Licensee, or (iii) any Product or any item thereof provided by
any Schedule subject to default, in accordance with the Uniform Commercial Code
and, if notice thereof is required by law, any notice in writing of any such
sale by Licensor to Licensee at least ten (10) days before the date thereof
shall constitute reasonable notice thereof to Licensee; and
e. Proceed by appropriate action either at law or in equity to enforce
performance by Licensee of the applicable covenants of this Agreement or to
recover damages for the breach thereof.
Upon the occurrence of any Event of Default by the Licensor and at any time
thereafter, Licensee may, without further notice, exercise any one or more of
the following remedies, at its sole discretion:
f. Terminate any applicable portion of the Agreement, pursuant to Section 6;
g. Proceed by appropriate action either at law or in equity to enforce
performance by Licensor of the applicable covenants of this Agreement or to
recover damages for the breach thereof.
h. Continue to use each Product in accordance with the terms and conditions
(including applicable fee provisions) of this Agreement as if no Event of
Default by Licensor had occurred.
Subject to Section 9 of this License Agreement and any express limitation on
remedies in any Schedule or any exhibits attached thereto, none of the remedies
under this License Agreement are intended to be exclusive, but each shall be
cumulative and in addition to any other remedy referred to herein or otherwise
available to Licensor or Licensee in law or in equity. Any repossession or
subsequent sale by Licensor of any interest in any Product shall not bar an
action for damages as herein provided, and the bringing of an action or the
entry of the judgment against Licensee shall not bar Licensor's right to
repossess any or all items of any Product.
11. TAXES. Licensee shall keep each Product free and clear of all levies, liens
and encumbrances and shall pay all assessments, license fees, taxes (including
sales, use, excise, stamp, documentary, personal property and other taxes) and
all other governmental charges, fees, fines or penalties whatsoever on or
relating to each Product or the use, shipment, transportation, delivery, or
operation thereof, and on or relating to this Agreement or services provided
pursuant thereto, except that the foregoing shall not include any federal or
state income taxes or taxes based upon ownership of any Product imposed upon and
payable by Licensor.
In the event use or sales taxes (or similar excise taxes) are properly assessed
or assessable on Licensee's use of any materials, items or information acquired
by it pursuant hereto and Licensor has a collection obligation with respect
thereto, Licensee agrees to cooperate with Licensor in connection therewith and
to pay promptly all such taxes and any interest and penalties in respect
thereof.
12. GENERAL PROVISIONS.
a. Acceptable by Authorized Agent. This Agreement and attached Schedule(s) shall
be binding on Licensor only upon being accepted in writing by the President,
Chief Operating Officer or Chief Financial Officer of Licensor.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
LICENSE AGREEMENT
b. Notice. Any notice to any party under this Agreement shall be in writing,
shall be effective on the earlier of (i) the date when received by such party,
or (ii) the date which is three (3) days after mailing (postage prepaid) by
certified or registered mail, return receipt requested, to the address of such
party set forth herein, or to such other address as shall have previously been
specified in writing by such party to all parties hereto.
c. Attorneys' Fees. If suit is brought or an attorney is retained by any party
to this Agreement to enforce the terms of this Agreement or to collect any money
due hereunder, or to collect money damages for breach hereof, the prevailing
party shall be entitled to recover, in addition to any other remedy,
reimbursement for reasonable attorneys' fees, court costs, costs of
investigation and other related expenses incurred in connection therewith.
d. Integration and Governing Law. This Agreement represents the entire agreement
of the parties on the subject matter hereof, and all agreements entered into
prior hereto, are revoked and superseded by this Agreement, and no
representations, warranties, inducements or oral agreements have been made by
any of the parties except as expressly set forth herein or in other
contemporaneous written agreements. This Agreement may not be changed, modified
or rescinded except in writing, signed by all parties hereto, and any attempt at
oral modification of this Agreement shall be void and of no effect. This
Agreement shall be deemed to be made under, and shall be construed in accordance
with and shall be governed by, the laws of Arizona, as if both parties were
residents of Arizona and the Agreement were to be performed entirely within
Arizona.
e. Interest on Overdue Amounts. Amounts past due thirty (30) days or more shall
bear interest at the lower rate of eighteen percent (18%) per annum or the
highest rate permitted by law until paid, and in connection with such past due
amounts, Licensee shall pay an annual service charge of Twenty-Five Dollars
($25.00).
f. No Waiver of Remedies. Nothing in this Agreement shall be construed to
eliminate or waive any remedies at law or in equity to either party.
g. Incorporation of Schedules and Exhibits. Any schedule or exhibit attached
hereto shall be deemed to have been incorporated herein by this reference, with
the same force and effect as if fully set forth in the body hereof.
h. Severability. If any provision of this Agreement is declared void or
unenforceable, such provision shall be deemed severed from this Agreement, which
shall otherwise remain in full force and effect.
i. Other. Licensee agrees not to solicit or hire or employ an employee of
Licensor without written consent of Licensor.
13. Escrow of Source Code. At the written request from Licensee, Licensor shall
deposit in escrow with Record Management Systems, Inc. ("Escrow Holder") a copy
of the most current version of the source code for any and all portions of each
Product owned by Licensor and all additional relevant documentation required for
an experienced programmer/analyst to reasonably understand and maintain such
portion of the Product, brought up to date to the date of delivery of the
Product, and Licensor shall continue to update such source code and
documentation as the Product is updated in accordance with this Agreement. Such
source code and documentation shall be released by the Escrow Holder to Licensee
in the event that Licensor is unable to perform and meet its support and
maintenance obligations under the License Agreement. Licensor shall have the
right to change and replace escrow holder with another qualified escrow holder.
Licensor will notify Licensee, in writing, of the new escrow and certify in
writing that the source code of each such Product has been transferred to new
escrow holder.
EXECUTED as of the first date set forth above.
National Health Enhancement Systems, Inc. Licensee
3200 North Central Avenue, Suite 1750
Phoenix, Arizona 85012 ______________________
Print Name of Licensee
_____________________________________ ______________________
Authorized Agent Authorized Agent
_____________________________________ ______________________
Print Name of Agent Print Name of Agent
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Schedule E.
Annual License, Support and Maintenance Agreement
(Pfizer)
This Schedule amends and supplements that certain License Agreement by and
between National Health Enhancement Systems, Inc., a Delaware corporation
("Licensor"), and , ("Licensee") dated . All capitalized terms used herein and
not otherwise defined herein shall have the meanings expressly assigned thereto
in the License Agreement. In the event of any conflict between any term or
condition in the License Agreement and in this Schedule (or any exhibits
attached hereto), the terms and conditions of this Schedule shall control. This
Schedule is dated .
1. DEFINITIONS.
a. The term "Product" means: (i) the CENTRAMAX. M(TM) software product
("CENTRAMAX. M" or "Software"), (ii) the HEALTH REFERENCE INFORMATION SYSTEM(TM)
("HRIS"), (iii) the related CENTRAMAX. M user's manuals ("User's Manuals") and
(iv) other proprietary materials related to the Software and HRIS that are
provided by Licensor (collectively, the User's Manuals and other proprietary
materials shall be referred to as the "Related Materials").
b. The term "License" means: the terms and conditions of the License Agreement,
this Schedule and any exhibits attached hereto.
2. FEES TO BE PAID BY LICENSEE; DELIVERABLE BY LICENSOR.
a. Annual License, Support Fee and Third Party License Fee. Licensee shall pay
Licensor an Annual Support Fee of Dollars ($ ) ("License and Support Fee"). The
License and Support Fee entitles Licensee to continued use of the Product and to
the Client Support Services for the Product as defined in Section 4 of this
Schedule. Licensee shall pay to Licensor a Third Party License Fee of ($ )
("Third Party License Fee"). The Third Party License Fee is to support the cost
incurred by Licensor for third party vendor obligations of the Product. Together
the License, Support Fee and Third Party License Fee shall be collectively
referred to hereafter as "Annual Fee". The Annual Fee shall be due beginning ,
19 and thereafter the Annual Support Fee shall be paid annually on the
anniversary date of this Schedule, within thirty (30) days from the date of
invoice. Each payment shall be in the form of a check payable to National Health
Enhancement Systems, Inc. Licensor may increase the Annual Fee once each
calendar year ("Annual Adjustment"). The Annual Adjustment shall be the greater
of (i) five percent (5%) of the then Annual Fee or (ii) an adjustment based upon
the "United States City Average (All Urban Consumers) -- All Items" index of the
Consumer Price Index published by the Bureau of Labor Statistics, United States
Department of Labor ("CPI"). The CPI adjustment shall be calculated as follows:
The Annual Fee to be adjusted shall be multiplied by a fraction. The numerator
of this fraction shall be the CPI for the most recent month for which the CPI is
available at the time the adjustment calculation is made. The denominator of the
fraction shall be the CPI for the month in which the most recent Annual
Adjustment was made. The CPI in the numerator and the denominator shall have the
same base year. In no case, however, shall the application of this formula
result in the reduction of the Annual Fee.
b. Confidential Price. The pricing in this License is confidential and Licensee
agrees not to disclose the purchase price or terms of this License with any
third party other than as required by law.
3. LICENSE. The license granted pursuant to Section 2 of the License Agreement
with respect to the Product set forth in this Schedule is a perpetual,
nonexclusive and nontransferable license to use the Product, subject to earlier
termination in accordance with Section 6 of the License Agreement. This license
does not extend to multiple geographic locations. Multiple copies of the License
and the Product must be purchased for multiple locations.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
SCHEDULE E
Annual License, Support and Maintenance Agreement
(Pfizer)
4. CLIENT SUPPORT SERVICES.
a. Maintenance. Licensor will provide to Licensee maintenance and support
services as hereinafter set forth for the most current version of each Software
program. The period for the rendering of such services shall be annual and shall
be automatically renewed each year unless either party terminates this License
upon written notice as provided for in Section 6 of the License Agreement.
b. Maintenance Fees. The maintenance and support fees for each Software program
shall be determined as provided herein. Fees for maintenance and support shall
be invoiced by Licensor annually and shall be payable by Licensee within thirty
(30) days after receipt of invoice by Licensee.
c. Maintenance Services. As long as a Software program is to be maintained and
supported by Licensor hereunder:
(i) Licensor shall correct any variance in the operational condition of
the Software program from the specifications set forth in the User's Manuals,
provided Licensee advises Licensor of the existence of such variance during the
period for which maintenance and support is to be provided hereunder for such
Software program and provided further that the variance can be corrected with
reasonable effort, including the correction of the software code. Licensor shall
distribute to Licensee one copy of the corrected program or patches as soon as
it is available. Licensee shall be responsible for effecting such changes and
corrections in each copy of the applicable Software licensed by Licensee.
Licensor will respond to Licensee's request for maintenance and support services
within a reasonable time considering all circumstances at the time of the
request, including the nature of the service or support required. Such
maintenance and support services do not include on-site maintenance or support
which, subject to availability of personnel, will be offered to Licensee only at
a separate charge.
(ii) Licensor shall provide support and maintenance services via a
toll-free telephone number to representatives of Licensee who have successfully
completed the required training program. Telephone support is defined as
"answering questions requiring a reasonable amount of time, usually during the
same telephone call." Telephone support shall be available Monday through
Friday, holidays excluded, during normal local business hours from 8:00 a.m. to
5:00 p.m. Telephone support service is available during extended hours for a fee
of fifty dollars ($50.00) per call. Extended hours are 8:00 a.m. to 5:00 p.m.
Mountain Standard Time on Saturdays, Sundays and holidays. Additional telephone
support for non-certified representatives of Licensee will be provided for a fee
of seventy dollars ($70.00) per hour billed monthly net thirty (30).
(iii) Licensee agrees to identify a competent technical support person
at Licensee's organization responsible for the ongoing oversight and technical
support issues to assist Licensor in resolving technical software matters. If
Licensee is unable to identify and Licensor is required to provide on-site
support services because of the absence of this individual, Licensee agrees to
pay Licensor a fee of $1,000 per day and reasonable out-of-pocket travel
expenses.
(iv) Licensor shall promptly make available to Licensee all
modifications and improvements to the Software that are generally released by
Licensor to other licensees of the Software. Modification and improvements may
include, but are not limited to:
1. Systems Updates. Versions of the appropriate Software which
operate under new releases of the computer manufacturer's operating system.
2. Computer Program Modifications. Versions of the appropriate
Software which encompass improvements and other changes which Licensor, at its
sole discretion, deems to be improvements or modifications of the original
version of the Software.
3. Documentation. Updates and modifications of user
documentation of the appropriate Software.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
SCHEDULE E
Annual License, Support and Maintenance Agreement
(Pfizer)
d. New Capabilities. New capabilities, or software programs which are generally
released as new and/or different from the Software described in this License are
not covered under this Agreement. Licensor reserves the sole right to determine
which capabilities shall be made available hereunder and which shall be deemed
to be new and different and not included in the applicable Software licensed
hereunder. All corrections, modifications, improvements and enhancements to the
Software shall remain the property of Licensor and shall be used by Licensee
only as part of the Software subject to this Agreement.
EXECUTED as of the first date set forth above.
National Health Enhancement Systems, Inc. Licensee
3200 North Central Avenue, Suite 1750
Phoenix, Arizona 85012 ______________________
Print Name of Licensee
________________________________ ______________________
Authorized Agent Authorized Agent
________________________________ ______________________
Print Name of Agent Print Name of Agent
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Schedule F.
LICENSES TO NHES FROM THIRD PARTIES
1) Agreement between Micromedex Inc. ("MDX") and National Health Enhancement
Systems ("NHES") dated October 1, 1992 and amended on March 28, 1995.
2) Agreement between Parlay and National Health Enhancement Systems ("NHES")
dated February 5, 1992.
3) Agreement between Dr. Barton Schmitt and National Health Enhancement
Systems ("NHES") dated October 14, 1994.
4) Agreement between Micro Focus and National Health Enhancement Systems
("NHES") dated June 8, 1989 and OSX dated April 27, 1992.
5) Agreement between Programmed Intelligence Corporation and National Health
Enhancement Systems ("NHES") dated December 4, 1989.
6) Agreement between MapInfo and National Health Enhancement Systems ("NHES")
dated February 15, 1995.
7) Agreement between COGNOS and National Health Enhancement Systems ("NHES")
dated September 30, 1994.
8) Agreement between Brite Voice Systems, Inc. and National Health Enhancement
Systems ("NHES") dated May 19, 1992 and amendment dated September 15, 1992.
9) Agreement between Advanced Logics, Inc. and National Health Enhancement
Systems, Inc. dated August 25, 1994.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Schedule G.
Blanket lien to Venture Lending, a division of Cupertino National Bank & Trust,
Palo Alto California on all NHES assets in connection with the Loan and Security
Agreement dated November 31, 1995.
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Schedule H.
Product Support and Consulting Rate Fees
SKILL RATE/HOUR
Project Manager $[Deleted - see *]
Analyst $[Deleted - see *]
Data Base Analyst $[Deleted - see *]
Programmer/Analyst $[Deleted - see *]
Voice Response Analyst $[Deleted - see *]
Reporting Specialist $[Deleted - see *]
Quality Assurance $[Deleted - see *]
Documentation Specialist $[Deleted - see *]
Training Specialist $[Deleted - see *]
Client Support Analyst $[Deleted - see *]
Physician Consultation $[Deleted - see *]
Nurse Consultation $[Deleted - see *]
Clerical $[Deleted - see *]
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Schedule I.
PRESENT SIGNIFICANT OWNERS OF NHES SECURITIES
Edward B. Diethrich, M.D. and Gloria B. Diethrich (Trust)
Gregory J. Petras
John P. Delmatoff
Terri S. Langhans
Bisgrove Financial Management Limited Partnership
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
Schedule J.
Quarterly - Purchase Schedule of NHES Products and Services
[Deleted - see *]
(* Confidential Treatment Pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934)
