Internet Product Development and Marketing Agreement - Healtheon/WebMD Corp. and Quintiles Transnational Corp.
Internet Product Development and Marketing Agreement dated as of May 26, 2000
between Registrant and Quintiles Transnational Corp.
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INTERNET PRODUCT DEVELOPMENT AND MARKETING AGREEMENT
THIS INTERNET PRODUCT DEVELOPMENT AND MARKETING AGREEMENT (the
"AGREEMENT") is made and entered into as of May 26, 2000 by and between
HEALTHEON/WEBMD CORP., a Delaware corporation ("HWMD"), and QUINTILES
TRANSNATIONAL CORP., a North Carolina corporation ("QUINTILES").
References in this Agreement to "schedules" refer to the documents
attached as schedules to this Agreement, all of which form part of this
Agreement; and unless otherwise indicated, references to "articles" or
"sections" refer to the corresponding numbered articles and sections of this
Agreement.
BACKGROUND
(a) Quintiles provides product development and
commercialization solutions, healthcare informatics services, and healthcare
policy consulting to the healthcare industry worldwide.
(b) HWMD is applying advanced Internet technology to
enable healthcare providers and consumers to interact with each other and the
institutions of healthcare online.
(c) HWMD and Quintiles are parties to an Agreement and
Plan of Merger dated as of January 22, 2000 (the "MERGER AGREEMENT") pursuant to
which they have agreed, among other things, for Quintiles' wholly owned
subsidiary Pine to become a wholly owned subsidiary of HWMD by merger (the "PINE
MERGER").
(d) As a principal component of the transactions
surrounding the Merger Agreement, HWMD and Quintiles desire to engage in the
collaborative development, marketing, and commercialization of a portfolio of
Internet-based products and services for the pharmaceutical industry as provided
herein.
NOW, THEREFORE, in consideration of their respective
agreements set forth in this Agreement and of other good and valuable
consideration, the receipt and legal sufficiency of which they acknowledge, and
intending to be legally bound, HWMD and Quintiles agree as follows:
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ARTICLE I
DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the respective meanings set forth below:
(a) "AFFILIATE" of a Person means a Person controlling,
controlled by or under common control with such Person.
(b) "ALLIANCE" means and refers to the relationship
established between Quintiles and HWMD by this Agreement.
(c) "ALLIANCE GUIDELINES" means the alliance-wide
guidelines referred to in Section 2.2, which the parties intend to serve as
primary guidance for the Steering Committee in its administration of the
transactions contemplated by this Agreement.
(d) "CO-BRANDED AREA" means that portion of HWMD's
primary Internet presence which is devoted to the Alliance.
(e) "CONFIDENTIAL INFORMATION" means and includes all
information disclosed under this Agreement by either party to the other,
provided that the following shall not constitute Confidential Information:
information which (1) is known by the receiving party prior to disclosure by the
disclosing party; (2) is or becomes available publicly other than as a result of
a breach of this Agreement; (3) is developed independently by the receiving
party without the use of or reliance on the disclosing party's Confidential
Information; or (4) is provided to the receiving party by a third party under no
duty of confidentiality to the disclosing party.
(f) "DEVELOPMENT PERSONNEL" means HWMD personnel
performing development services relating to a Tool under Section 4.2 of this
Agreement.
(g) "EXECUTIVE SPONSOR" has the meaning set forth in
Section 2.4.
(h) "INTELLECTUAL PROPERTY RIGHTS" means trade secret,
confidentiality, patent, copyright, trademark, know-how, moral, and similar
rights of any type under the applicable laws of any governmental authority,
domestic or foreign, including without limitation all applications and
registrations relating to any of the foregoing.
(i) "INVESTIGATION PERIOD" has the meaning set forth in
Section 3.1(a).
(j) "MARKS" means a party's trademarks, trade names,
service marks, service names, logos and trade dress.
(k) "PERSON" means any person or entity.
(l) "PLATFORM ENHANCEMENTS" has the meaning set forth in
Section 7.1(c).
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(m) "HWMD PLATFORM" means that certain technology used by
HWMD as of the Effective Date which serves as the basis for HWMD's
Internet-based services provided to its customers.
(n) "SPECIFICATIONS" means, with respect to any Tool, the
functional specifications determined by the Steering Committee for such Tool and
reflected in the corresponding Work Plan.
(o) "STEERING COMMITTEE" means and refers to the
six-member steering committee comprised of three designees from each party
established pursuant to Section 2.4 to manage the conduct of the transactions
contemplated by this Agreement.
(p) "TERM" means the term of this Agreement, as
determined according to Section 9.1.
(q) "TOOL" means any product or service developed by the
parties under this Agreement, each to operate in connection with the HWMD
Platform.
(r) "TOOL GROUPS" means the three product/service groups
referred to in Section 3.1(b) in which the parties intend to develop and
commercialize Tools, namely drug development, physician detailing, and
direct-to-consumer.
(s) "WORK PLAN" means, with respect to any Tool, the
development and marketing plan, budget and schedule prepared pursuant to Section
3.1(c) in respect of such Tool.
ARTICLE II
PURPOSE AND MANAGEMENT OF COLLABORATION
2.1 PURPOSE. Through performance of their respective obligations
under this Agreement, HWMD and Quintiles agree to conceive, design, implement,
market, distribute, license, and sell services based on a portfolio of Tools to
be made available through a prominent co-branded location hosted by HWMD in
HWMD's healthcare Internet portal. The Tools the parties develop in the Alliance
as a foundation for these service offerings will fall into three broad
categories associated with the development, sales, and marketing process for
pharmaceutical products, referred to in this Agreement as "drug development,"
"physician detailing," and "direct-to-consumer," respectively (the "TOOL
GROUPS"). The parties intend to commercialize the Tool Groups on a package basis
to enable corresponding efficiencies across the pharmaceutical product
development and commercialization process.
2.2 ALLIANCE GUIDELINES. The parties intend to conduct the
activities contemplated by this Agreement according to the alliance guidelines
set forth in Schedule 2.2 concerning overall resource commitments, development
and marketing schedules, and revenue sharing (the "ALLIANCE GUIDELINES"). The
Steering Committee may depart from the Alliance Guidelines in the Work Plan for
any Tool or otherwise in connection with its administration of the Alliance.
Subject to any such departure, the Alliance Guidelines will control the parties'
relationship with respect to the subject matter covered thereby.
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2.3 IMPLEMENTATION; RESOURCE ALLOCATIONS. The parties intend to
implement development of an initial portfolio of Tools (referred to below as the
"Initial Toolkit") by conducting the software development activities
contemplated by Articles 3 and 4 and by allocating additional resources of the
types and amounts determined from time to time by the Steering Committee with
reference to the Alliance Guidelines. Quintiles agrees to purchase from HWMD,
and HWMD agrees to provide to Quintiles, $100,000,000 of development services
for the Initial Toolkit at cost, as set out in Section 6.1(a).
2.4 STEERING COMMITTEE.
(a) The parties will organize the Steering Committee
promptly after execution of this Agreement. The membership of the Steering
Committee shall be composed of the same individuals comprising the Steering
Committee under that certain Data Rights Agreement entered into of even date by
and between the parties. The Steering Committee shall convene on such schedule
(but not less frequently than monthly) and employ such procedures as it shall
determine from time to time in good faith, and, except as otherwise specifically
required by this Agreement, shall act by unanimous consent.
(b) The Steering Committee will provide general oversight
and coordination of the parties' collaboration, and will be responsible for
identifying Tools, overseeing creation of corresponding Work Plans, and
monitoring the parties' conduct of the Work Plan for each Tool.
(c) The parties will resolve deadlock among the Steering
Committee through the Executive Review procedure described in Section 10.1(a)
below.
2.5 EXECUTIVE SPONSORS. Each party shall appoint a member of its
senior management as an executive sponsor for the Alliance ("EXECUTIVE
Sponsor"). Executive Sponsors will be responsible for monitoring the Alliance
relationship, conducting periodic briefings for each other and their management
teams, and providing a defined means of communication with other senior
executives. Each party may change its Executive Sponsor at any time by written
notice to the other party.
ARTICLE III
TOOL IDENTIFICATION; WORK PLANS
3.1 IDENTIFICATION OF TOOLS.
(a) SELECTION BY STEERING COMMITTEE. The Steering
Committee will facilitate the initial review of potential Tools for the parties
to develop under this Agreement, in accordance with the general timelines
contemplated by the parties as described in the Alliance Guidelines. While the
parties anticipate that Quintiles personnel will be primarily involved in the
identification of Tools with appropriate support from HWMD personnel, either
party may propose a Tool concept to the other, and any such proposal agreed upon
by the Steering Committee will constitute and be deemed a Tool for purposes of
this Agreement.
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(1) The parties will research, evaluate and
agree on a base set of Tools (the "INITIAL TOOLKIT") during approximately the
first six (6) months after the Execution Date of this Agreement, as contemplated
in the Alliance Guidelines (the "INVESTIGATION PERIOD").
(2) The parties acknowledge that after
determination of the Initial Toolkit, the parties may desire to develop and
commercialize additional Tools under this Agreement, and/or to create
enhancements of existing Tools. The Steering Committee will facilitate review of
proposals for additional Tools and enhancements of existing Tools from time to
time, and any agreed-to projects shall be developed as set forth in this Article
III.
(3) HWMD will develop each Tool selected by the
Steering Committee, as set forth in the corresponding Work Plan, and Quintiles
will pay HWMD for development activities for the Initial Toolkit, as further
specified in each corresponding Work Plan and at rates determined according to
Section 6.1.
(b) CREATION OF WORK PLAN. Promptly after identification
of any Tool under subsection (a) above, the parties shall collaborate in the
preparation of a Work Plan for such Tool. Any Work Plan under this Agreement
must be unanimously approved by the Steering Committee. As applicable, each Work
Plan shall include, among other things:
(1) The Specifications for the Tool;
(2) Delivery and acceptance guidelines for the
Tool prior to any commercial launch of the Tool;
(3) Allocation of responsibility for the actions
required for development, implementation and marketing of the Tool;
(4) Uptime and related services and hosting
requirements;
(5) Establishment of the parties' respective
corresponding financial, personnel, and other resource commitments for the Tool;
(6) Establishment of a budget; and
(7) Establishment of a schedule for carrying out
the development and marketing activities for such Joint Product.
3.2 RESTRICTIVE COVENANTS. Except with the other party's prior
written consent or as otherwise provided in this Agreement, neither party will
undertake directly or indirectly, or permit any of its Affiliates to undertake
directly or indirectly, its respective conduct as follows:
(a) During the term of this Agreement, Quintiles will not
promote, distribute or provide access to its products or services related to the
CRO Business and CSO Business via the Internet through any Person other than
HWMD; provided, however that Quintiles (1) may deploy its internal computer
systems for internal purposes, (2) may continue to operate Quintiles.com and
services offered through Quintiles.com, (3) may continue to provide services
through existing
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contractual arrangements for so long as it is obligated to do so, and (4) may
render client services through such client's systems as requested by such client
without solicitation by Quintiles.
(b) During the term of this Agreement, HWMD will not
promote any third party in the CRO Business or CSO Business or develop,
distribute or provide access to any such company's services.
(c) During the term of this Agreement, HWMD will not
participate in the CRO Business (other than pursuant to this Agreement) or
develop or host for itself or any Person other than Quintiles any product
designed to facilitate any CRO Business or the administration of clinical
trials.
(d) During the term of this Agreement, Quintiles will not
promote or advertise pharmaceutical products directly to consumers via the
Internet through any Person other than HWMD.
(e) Quintiles will not contribute to the development with
or procure development from any Person other than HWMD, of any Internet-based
product or service to the extent such product or service is substantially
functionally comparable to any Tool selected by the Steering Committee for
development in the Alliance (all such products and services, "RESTRICTED
PRODUCTS") (1) at any time during the three-year period commencing on the date
of this Agreement (the "INITIAL ROLL-OUT PERIOD"); or (2) at any time after the
Initial Roll-Out Period unless the Steering Committee has declined to pursue
such product after the written suggestion to that effect from Quintiles,
including a clear statement by Quintiles of its intent to undertake such
activity.
(f) HWMD will not develop any Restricted Products for, or
provide any Restricted Products to, any Person other than Quintiles (1) at any
time during the Initial Roll-Out Period; or (2) at any time after the Initial
Roll-Out Period unless the Steering Committee has declined to pursue such
product after the written suggestion to that effect from HWMD, including a clear
statement by HWMD of its intent to undertake such activity.
As used in this Section 3.2, "CRO Business" means generally the business of
managing or conducting clinical trials on a contract basis as further defined by
reference to Quintiles' contract research business as of the date of this
Agreement, giving effect to future developments in the natural evolution of the
contract research industry; "CSO Business" means generally the business of
providing pharmaceutical sales services on a contract basis as further defined
by reference to Quintiles' contract sales business as of the date of this
Agreement, giving effect to future developments in the natural evolution of the
contract sales industry.
The steering committee shall review these restrictive covenants six months after
the effective date of this Agreement and annually thereafter at the request of
either party.
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ARTICLE IV
TOOL DEVELOPMENT AND IMPLEMENTATION
4.1 GENERAL. Upon execution of each Work Plan, the parties will
develop, implement and operate the corresponding Tool through the procedures set
forth in this Article 4.
4.2 DEVELOPMENT ACTIVITIES.
(a) PERFORMANCE. The parties will perform the development
work described in this Agreement to develop the Tool in accordance with the
Specifications and the time frames set forth in the Work Plan (on a best efforts
basis as to schedule and budget), as they may be modified from time to time in
accordance with the terms of this Agreement.
(b) DEVELOPMENT RESOURCES. In performing development
services under this Agreement, HWMD shall allocate Development Personnel of a
quality and experience level at least equal to that allocated to any other HWMD
customer. Quintiles shall have the right to request individual Development
Personnel, and HWMD will consider and shall use its commercially reasonable
efforts to use such individuals as Development Personnel. HWMD agrees to use its
commercially reasonable efforts to maintain continuity of leadership among the
Development Personnel in performing development services hereunder. In any
allocation of resources regarding HWMD's development resources, HWMD agrees that
the Alliance shall receive preferred treatment in obtaining and retaining
Development Personnel, of at least a level of preference afforded to any other
HWMD customer.
(c) MODIFICATIONS TO SPECIFICATIONS. Either party may
request modifications to the Specifications at any time during the development
of a Tool. Upon both parties' approval, HWMD will perform the requested
modifications, and the Specifications and the Work Plan will be deemed amended
accordingly.
(d) PROJECT MEETINGS AND REPORTS. During the performance
of development services under this Section 4.2, the parties will conduct regular
meetings, in accordance with a schedule mutually agreed by the parties, to
review performance of the Alliance under this Agreement and to resolve any
problems. During the term of this Agreement, HWMD will provide Quintiles with
periodic reports describing the progress of the development in the preceding
reporting period, in such a form as is agreed by the Steering Committee.
(e) REVIEW RIGHTS. Quintiles will have the right, in its
reasonable discretion and at its cost, to review the progress of HWMD's
performance of the development services at HWMD's facilities. HWMD will provide
reasonable cooperation to Quintiles in performing such reviews, including
without limitation providing Quintiles with access to all non-privileged work in
progress, documents and other materials related thereto, as reasonably requested
by Quintiles. Quintiles may perform such reviews during HWMD's normal business
hours by providing HWMD with at least five business days advance written notice.
In performing such reviews, Quintiles will not unduly interfere with the
operation of HWMD's other business activities, and Quintiles will comply with
HWMD's reasonable safety and security policies and procedures.
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(f) BETA AND PILOT PROGRAMS. The parties anticipate that
during the development of any given Tool, the parties may desire to implement
beta or pilot programs prior to commercial launch. To the extent that the
parties desire to implement such programs, HWMD agrees to make available
wherever practical prototype versions of the Tools for Quintiles' review during
the performance of the development services, and Quintiles shall provide
feedback regarding any nonconformities to Specifications or other suggestions
regarding the prototype for HWMD to incorporate into the development services,
all as further described in an applicable Work Plan.
(g) TECHNICAL CONTACTS. Quintiles and HWMD will each
designate primary and alternate technical contacts (collectively, the "TECHNICAL
CONTACTS") as the primary individuals responsible for facilitating
communications between Quintiles and HWMD regarding all technical matters and
for coordinating the design, development, and testing of the Tool. Each party
may change its respective Technical Contacts at any time by providing the other
party with no less than five (5) days' advance notice.
4.3 DELIVERY AND ACCEPTANCE. The parties shall determine in the
Work Plan the procedures for final testing of each Tool to determine whether the
Tool materially conforms to the applicable Specifications in the Work Plan. As
set forth in further detail in the Work Plan, Quintiles will provide HWMD with a
written acceptance of the Tool or one or more written statements of errors to be
corrected (a "STATEMENT OF ERRORS"). If Quintiles fails to provide HWMD with
written acceptance or Statement of Errors within the period of time set forth in
the Work Plan, then the Tool will be deemed accepted. If Quintiles provides HWMD
with a Statement of Errors, then HWMD shall promptly and correct such errors and
make the Tool available for re-testing. The foregoing procedure will be repeated
until Quintiles accepts or finally rejects each Tool. Upon acceptance of the
Tool, HWMD will make the Tool available for use on the Internet as described in
the Work Plan, or conduct such other activities to make the Tool available as
described in the Work Plan.
4.4 IMPLEMENTATION/COMMERCIALIZATION OF TOOL. Upon launch of the
Tool, HWMD shall host and operate the Tool as set forth in the Work Plan. Except
as otherwise set forth in the Work Plan, HWMD shall, in accordance with any
applicable costs and fees set forth in the Work Plan, comply with the following
as to each Tool.
(a) HOSTING; CAPACITY. HWMD shall provide (within the
context of HWMD's facilities and normal hosting operations) all computer
servers, routers, switches and associated hardware in an amount reasonably
necessary to meet anticipated traffic demands, adequate power supply (including
generator back-up) and HVAC, adequate insurance, adequate service contracts and
all necessary space, network cabling and power distribution to support the Tool.
HWMD shall not be responsible for any such items beyond its own data center.
(b) SECURITY. HWMD shall implement security mechanisms
for the Tool with a degree of protection at least as strong as any similar
product made available by HWMD on the HWMD Platform, or with such other security
mechanisms as are specified in the corresponding Work Plan.
(c) UPTIME; SERVICE LEVEL RESPONSE. HWMD will use
commercially reasonable efforts to ensure that a server hosting the Tool is
accessible to other Internet servers at a level agreed to in the Work Plan
("Uptime"), with the sole exception of scheduled maintenance to be performed
during off-peak hours. For Uptime problems or other service failures or failures
of any
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Tool to materially conform to the Specifications in the Work Plan, HWMD shall
make available its personnel during such hours, and devote priority levels to
correct any such problems, at least as strong as those provided by HWMD for any
other applications on the HWMD Platform.
4.5 CO-BRANDING. The Tools shall be made available to customers in
the Co-Branded Area, or as otherwise agreed in the Work Plan, and shall be
branded under both parties' Marks. In all uses of the Tools in which the Marks
of either party are displayed other than on HWMD's web sites, Quintiles' Marks
shall be displayed with substantially equivalent size, location and prominence
to HWMD's Marks, except as otherwise agreed in a Work Plan. HWMD's web site
shall feature a prominent link to the Co-Branded Area. which link will display
Quintiles' Mark. Within the Co-Branded Area, Quintiles Marks shall be displayed
with substantially equivalent size, location and prominence to HWMD's Marks,
except as otherwise agreed in a Work Plan.
ARTICLE V
MARKETING
5.1 MARKETING PRINCIPLES.
(a) General. The parties will commercialize the Tools and
services provided through use of the Tools solely on a co-branded basis, except
as otherwise agreed in a Work Plan. Although each may engage in independent
marketing activities for Tools at its own expense, HWMD and Quintiles intend
primarily to market the Tools on a coordinated, collaborative basis using sales
teams comprised of representatives of each firm, with each party marketing all
three Tool Groups on a package basis.
(b) Integrated Sales Teams. Each party will provide
appropriate sales and marketing personnel to constitute an integrated sales
force for the sales of services based on the Tool Groups, and each sales team
will include representatives from each party. The Steering Committee will
coordinate development of sales teams comprised of representatives from each
party, structured generally (unless otherwise determined by the Steering
Committee) to include a Project Executive (with coordination authority over
sales efforts to multiple targeted customers), a Relationship Executive
(corresponding to the specific targeted customer), and a sales/follow-up team.
The parties will coordinate all sales team correspondence to each targeted
customer through the corresponding Project and Relationship Executives to enable
a unified, seamless message from the combined sales team. Project Executives and
Relationship Executives will be designated from time to time by the Steering
Committee.
(c) Joint Bids. The parties agree to coordinate all joint
sales bids for services provided through use of the Tools under this Agreement.
The sales teams shall, together with the Steering Committee, determine on a
bid-by-bid basis, issues relating to (1) the work to be performed by and the
compensation to be paid to each party, (2) pricing of the services, (3) which
party (based on preexisting relationships with the customer or otherwise) shall
take the lead in the bid process, (4) the contractual structure of any
transaction with a customer (through a prime and subcontractor arrangement or
otherwise), and (5) such other matters as are determined by the parties.
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(d) Customer Targeting. The parties (primarily Quintiles)
from time to time will target pharmaceutical companies for sales of services
based on the Tool Groups, and in particular will target an initial group of
approximately 15 key potential customers in connection with the Alliance's
Initial Toolkit roll-out.
(e) Primary Sales Force Responsibility. Quintiles will
bear primary responsibility for sales force activities for services related to
the drug development and physician detailing Tool Groups. HWMD will bear primary
responsibility for sales force activities for services relating to the
direct-to-consumer Tool Group.
(f) Package Orientation. The parties intend to market
services based on the Tool Groups primarily as a single package including all
three Tool Groups, but recognize that some customers may require the right to
purchase services provided through the use of Tools individually or on a Tool
Group basis. The Steering Committee will be responsible to establish and adapt
price levels and models for custom sales.
5.2 SPECIFIC MARKETING ACTIVITIES. The Work Plan for each Alliance
Product will specify the manner (if unique) in which the parties will market
such Alliance Product, along with the specific resources (if any) each party
will provide for that purpose. Each party will use commercially reasonable
efforts to conduct the marketing activities specified in each such Work Plan, in
the manner and on the schedule specified therein.
5.3 OTHER MARKETING ACTIVITIES.
(a) General. In addition to the marketing activities
designated in Work Plans for specific Tools, HWMD and Quintiles will engage in
such other marketing activities as the Steering Committee shall determine from
time to time, such as in connection with establishing a marketing infrastructure
for Alliance activities, preparing periodic marketing plans, developing general
marketing collateral, or otherwise. The Steering Committee may develop Work
Plans to address all such activities as it determines. Each party will conduct
its respective activities designated in each such Work Plan in the manner and on
the schedule specified therein.
(b) Procedures. The Steering Committee may develop sales
procedures from time to time in its discretion for such matters as contact
management and enhancement, coordinated bid preparation, and contracting, and
such other matters as the Steering Committee determines. Each party will cause
its Alliance sales personnel to comply with all such procedures adopted by the
Steering Committee as in effect from time to time.
ARTICLE VI
PAYMENTS; REVENUE SHARING
6.1 PAYMENTS FOR DEVELOPMENT WORK. Quintiles will compensate HWMD
for development activities as follows:
(a) For development of the Tools in the Initial Toolkit
and of any post-release enhancements during the year after any such Tool is
first made generally available, Quintiles shall
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pay HWMD at HWMD's "fully-loaded" development cost for Development Personnel
(determined as a function of salary and an overhead allotment agreed to by the
Steering Committee) and actual costs and expenses otherwise incurred in carrying
out a Work Plan approved by the Steering Committee ("Costs").
(b) For development of Tools other than those in the
Initial Toolkit, of any post-release enhancements for any such Tool, and of any
post-release enhancements of Tools in the Initial Toolkit following the year
after any such Tool is first made generally available, Quintiles shall pay HWMD
such development fees as are determined by the Steering Committee and set forth
in the applicable Work Plan.
(c) HWMD shall provide to Quintiles monthly invoices for
Costs which shall provide all information reasonably necessary for the
computation or conformation of the payments described in the invoices. Any
payments for Costs will be paid by Quintiles to HWMD within thirty (30) days
after Quintiles' receipt of such invoice. Quintiles will pay interest of 1% per
month on amounts not paid within such 30 day period, unless Quintiles delivers,
in good faith, notice to HWMD disputing such payment in reasonable detail.
6.2 REVENUE SHARING.
The parties will share their respective revenues from the
sales of services provided through use of the Tools in the manner determined by
the Steering Committee at the time of each bid to a potential customer. The
Alliance Guidelines include a model of the parties' revenue sharing expectations
by Product Channel as of the date of this Agreement.
6.3 AUDITS. Each party will maintain records reasonably sufficient
to document and record its shared revenues for Tools; and each shall have the
right to audit the other's books and records on a reasonable basis to confirm
the accuracy thereof solely relative to shared revenues. The parties will
address any apparent payment discrepancies promptly and in good faith, and the
affected party promptly will correct any confirmed over- or under-payment. Each
party may perform such audits up to twice per calendar year during the other
party's normal business hours by providing the audited party with at least five
business days advance written notice. In performing such audits, the auditing
party will not unduly interfere with the operation of the audited party's other
business activities, and the auditing party will comply with the audited party's
reasonable safety and security policies and procedures.
6.4 OTHER COSTS OF PERFORMANCE. Except as otherwise specifically
provided in this Agreement, each party will bear the costs and expenses of
performing its obligations hereunder. Neither party shall be obligated to pay
any taxes of the other or any other expenses for which the other party may be
liable based upon or in connection with the transactions contemplated by this
Agreement.
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ARTICLE VII
INTELLECTUAL PROPERTY OWNERSHIP
7.1 INTELLECTUAL PROPERTY RIGHTS. HWMD and Quintiles agree and
acknowledge that as between HWMD and Quintiles, ownership of Intellectual
Property Rights in the various intellectual properties associated with this
Agreement (whenever developed) is as follows, subject to the various rights
granted in this Agreement (and without any duty to account to one another except
as specifically provided herein):
(a) Each party shall own all right, title, and interest
in and to all Intellectual Property Rights in its Confidential Information.
(b) Quintiles will own all right, title, and interest in
and to all Intellectual Property Rights in the Tools, all computer software
implementing Tools, and all documentation for Tools (each of which shall be
deemed a "work made for hire" for purposes of the federal Copyright Act);
provided that HWMD shall be entitled to use all of the foregoing during the term
of, in the manner, to the extent, and for the purposes required by this
Agreement. HWMD hereby irrevocably transfers to Quintiles HWMD's entire right,
title and interest to all Intellectual Property Rights in such items.
(c) HWMD will own all right, title, and interest in and
to all Intellectual Property Rights in the HWMD Platform and all Platform
Enhancements created by HWMD under this Agreement. For purposes of this
Agreement, "PLATFORM ENHANCEMENTS" means a modification to the HWMD Platform
which relates to the operating environment in which the Tools and other
applications function.
7.2 FURTHER ASSURANCES. Each of HWMD and Quintiles shall, and
shall cause its Affiliates to, cooperate with the other (or its designee(s)) and
shall execute documents of assignment, oaths, declarations, and other documents
reasonably requested by the other to confirm or effect the allocation or
facilitate the enforcement of the Intellectual Property Rights described in
Section 7.1 above. Each party will provide such cooperation and execution at no
charge to the other, other than reimbursement of its reasonable related
out-of-pocket expenses.
7.3 LICENSE TO MARKS. Each party will retain all right, title, and
interest in and to its Marks worldwide. Subject to the terms and conditions of
this Agreement, HWMD hereby grants to Quintiles a royalty-free, non-exclusive,
non-transferable, worldwide license to use HWMD's Marks in connection with its
marketing activities for the Tools during the term of this Agreement; provided
that such use is in accordance with HWMD's then-current trademark usage
guidelines. Subject to the terms and conditions of this Agreement, Quintiles
hereby grants to HWMD a royalty-free, non-exclusive, non-transferable, worldwide
license to use the Quintiles Marks in connection with its marketing activities
for the Tools, including its use on the Co-Branded Area, during the term of this
Agreement; provided that such use is in accordance with Quintiles' then-current
Mark usage guidelines. Neither party shall form any combination marks with the
other party's marks. Neither party may modify any of the other party's Marks
without the other party's approval. Each party hereby assigns to the other party
all right, title and interest in the other party's Marks, together with
Page 12 of 20
<PAGE> 14
the goodwill attaching thereto, that may inure to it in connection with this
Agreement or from its use of the other party's Marks hereunder.
7.4 NO OTHER RIGHTS. Except as specifically provided in this
Agreement, neither party nor any of its respective Affiliates shall have any
right or license by virtue of this Agreement to use or exploit any Intellectual
Property Rights of the other party or any of the other party's Affiliates.
ARTICLE VIII
CONFIDENTIALITY
Each of HWMD and Quintiles will hold and cause its respective
Affiliates to hold the other party's Confidential Information in confidence and
refrain from using any such Confidential Information other than for purposes of
performing its respective obligations under this Agreement. Each party may
disclose Confidential Information to its employees, contractors, and agents with
a need to know the Confidential Information who are under obligations not to use
or disclose the Confidential Information. Notwithstanding the foregoing, each
party and its respective Affiliates will be permitted to disclose the other
party's Confidential Information as and to the extent required by applicable
law, provided the party required to make any such disclosure notifies the party
whose Confidential Information is required to be disclosed as far in advance of
the required disclosure as is reasonably practicable under the circumstances and
cooperates with such party (if reasonably requested to do so, and at the
requesting party's expense) to secure confidential treatment for the required
disclosure. Nothing in this Agreement shall prohibit HWMD from using or
disclosing any information learned by its employees or retained in such
employees memory after their last exposure to materials containing Confidential
Information, to the extent such information comprises software programming,
Internet product development, or hosting techniques applicable generally to
HWMD's business and products.
ARTICLE IX
TERM AND TERMINATION
9.1 INITIAL TERM; RENEWAL TERM. This Agreement shall commence upon
the date specified above in the preamble and continue thereafter for ten (10)
years. At the end of the initial term, this Agreement shall renew automatically
for successive two (2) year periods, unless either HWMD or Quintiles notifies
the other in writing of its intention to terminate this Agreement at least one
hundred eighty (180) days prior to the beginning of the applicable renewal term.
9.2 TERMINATION
(a) Either party may terminate this Agreement if the
other party has defaulted in any material obligation under this Agreement and
failed to cure such default within sixty (60) days after written notice thereof
from the terminating party.
(b) Either party may terminate this Agreement by
immediate written notice if the other party becomes insolvent or if a court of
competent jurisdiction enters an order or decree in
Page 13 of 20
<PAGE> 15
respect of such party under any bankruptcy or similar law approving a petition
for reorganization or appointing a custodian for all or substantially all its
assets or ordering the liquidation of such party.
9.3 EFFECT OF TERMINATION. The parties' respective rights and
obligations under Section 6.3 (Audits), and Articles VII (Intellectual Property
Ownership), VIII (Confidentiality), and X (Miscellaneous) will survive any
expiration or termination of this Agreement. In the event of any termination or
expiration of this Agreement, each party shall deliver to the other all copies
of all Confidential Information of the other party in its possession or control
(including, without limitation, HWMD's delivery to Quintiles of all copies of
the Tools in object and source code forms and all related documentation). In the
event of any termination or expiration of this Agreement, HWMD shall offer to
Quintiles a service agreement for a period of up to two years, under which HWMD
shall continue to operate the Tools on behalf of Quintiles and facilitate the
transition of the Tools to another platform, all on HWMD's then-current standard
pricing and other terms and conditions. HWMD shall also include a listing of all
third party software contained in the Tools, and will sublicense or assign
HWMD's rights in such software to Quintiles where HWMD possesses the right to do
so.
ARTICLE X
DISPUTE RESOLUTION
10.1 DISPUTE RESOLUTION.
(a) Internal Review. In the event that a dispute,
difference or question arises pertaining to any matters which are the subject of
the Alliance ("DISPUTE"), and either party so requests in writing, prior to the
initiation of any formal legal action, the following dispute resolution shall
apply:
(1) The Steering Committee will use its good
faith efforts to resolve the Dispute within ten (10) days. If the Steering
Committee is unable to resolve the Dispute in such period, the Steering
Committee will refer the Dispute to the Executive Sponsors as set forth in
subitem (2) below.
(2) For all Disputes referred to the Executive
Sponsors from the Steering Committee above, the Executive Sponsors shall use
their good faith efforts to resolve the Dispute within twenty (20) days after
such referral. If the Executive Sponsors are unable to resolve the Dispute in
such period, the Executive Sponsors will refer the Dispute to the Chief
Executive Officers of HWMD and Quintiles as set forth in subitem (3) below.
(3) For all Disputes referred to the Chief
Executive Officers from the Executive Sponsors above, the Chief Executive
Officers shall use their good faith efforts to resolve the Dispute within twenty
(20) days after such referral.
(b) Mediation. In the event of a Dispute which cannot be
resolved by the Chief Executive Officers, either party may commence a
non-binding mediation to resolve the Dispute by providing written notice to the
other party (a "MEDIATION NOTICE") informing the other party of the dispute and
the issues to be resolved and containing a list of five (5) recommended
individuals to
Page 14 of 20
<PAGE> 16
serve as the mediator. Within ten (10) business days after the receipt of a
Mediation Notice, the other party shall respond by written notice to the party
initiating mediation, providing a list of five (5) recommended individuals to
serve as the mediator and which adds additional issues to be resolved. The
recommended mediators shall be individuals with experience in the pharmaceutical
and healthcare technology industries and shall not be any employee, director,
shareholder or agent of either party or an Affiliate of either party, or
otherwise involved (whether by contract or otherwise) in the affairs of either
party. If, within twenty (20) business days after receipt of the Mediation
Notice, the parties shall have been unable to agree upon an individual to serve
as mediator, or to the extent the mediator selected by the parties is unable to
resolve the dispute, the dispute will be settled by final and binding
arbitration conducted in the manner described in subsection (c) below. If,
within twenty (20) business days after receipt of the Mediation Notice, the
parties shall have agreed upon an individual to serve as mediator, the mediator
shall conduct a mediation in an effort to resolve the dispute, employing
commercially reasonable procedures selected by the mediator in consultation with
the parties, completing such mediation no later than sixty (60) days after
engagement.
(c) Arbitration. Binding arbitration, if necessary, shall
be conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, as in effect at the time of the arbitration hearing,
such arbitration to be completed in a ninety (90) day period. The arbitration
panel will be composed of three arbitrators, one of whom will be chosen by HWMD,
one by Quintiles, and the third by the two so chosen. If both or either of HWMD
or Quintiles fails to choose an arbitrator or arbitrators within fourteen (14)
days after receiving notice of commencement of arbitration, or if the two
arbitrators fail to choose a third arbitrator within fourteen (14) days after
their appointment, the American Arbitration Association shall, upon the request
of both or either of the parties to the arbitration, appoint the arbitrator or
arbitrators required to complete the panel. The decision of the arbitrators
shall be final and binding on the parties, and specific performance may be
ordered by any court of competent jurisdiction.
(d) Costs. The parties shall bear their own costs in
preparing for and participating in the resolution of any dispute under this
Article, and the costs of mediator(s) and arbitrator(s) shall be equally divided
between the parties.
ARTICLE XI
WARRANTIES
11.1 POWER AND AUTHORITY. HWMD represents and warrants to Quintiles
that HWMD has full power, right and authority to enter into this Agreement, to
carry out its obligations under this Agreement, and to grant and assign the
rights granted and assigned to Quintiles under this Agreement.
11.2 PROPRIETARY RIGHTS. HWMD further represents and warrants to
Quintiles that:
(a) The Tools will be the original work of HWMD or
licensed from third party vendors as agreed to by the Steering Committee;
Page 15 of 20
<PAGE> 17
(b) HWMD has not previously granted or assigned and will
not grant or assign any rights in the Tools to any third party which are
inconsistent with the rights granted and assigned herein to Quintiles; and
(c) Each of HWMD's employees and consultants who has been
or will be involved in the development of the Tools, or who will have access to
any Confidential Information of Quintiles, will have signed, before beginning
such involvement, an agreement with HWMD with respect to proprietary rights and
confidentiality which complies with the terms of this Agreement.
11.3 VIRUS WARRANTY. HWMD warrants that HWMD has implemented all
measures used in its normal business, including at a minimum commercially
reasonable measures, to ensure that the Tools do not contain any virus or any
other contaminant, including but not limited to codes, commands or instructions
that may be used to access, alter, delete, damage, disable, cause disruption of
or otherwise interfere with Quintiles' use of the Tools, other software, or any
Quintiles data or information.
11.4 YEAR 2000 WARRANTY. HWMD warrants to Quintiles that it shall
take all steps to ensure that the Tools are and will be "Year 2000 Compliant" in
a manner commensurate with other applications used by HWMD on the HWMD Platform.
For purposes of this Agreement, "Year 2000 Compliant" means that the Tools will,
in processing data containing dates in the Year 2000 and any preceding and
following years: (a) initiate and operate, (b) correctly store, represent, and
process (including sort) dates (including single and multi-century formulas and
leap year calculations), and (c) not cause or result in an abnormal termination
or ending.
11.5 SERVICES WARRANTY. HWMD warrants that it shall provide
services under this agreement in a professional, workmanlike and efficient
manner, consistent with the high industry standards.
11.6 WARRANTY DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT, HWMD HEREBY DISCLAIMS ALL WARRANTIES, OF ANY KIND, EXPRESS OR
IMPLIED INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE XII
INFRINGEMENT INDEMNITY
12.1 DUTY TO INDEMNIFY BY HWMD. HWMD will, at its expense, defend,
indemnify, hold Quintiles harmless, from and against any damage, liability, cost
or expense (including reasonable attorneys' fees and court costs) arising out of
or resulting from any claim, suit or other proceeding in which it is alleged
that the Tools or Quintiles' exercise of its rights in the Tools, infringes the
Intellectual Property Rights of any third party. In the event of any such claim,
Quintiles will: (i) promptly notify HWMD, in writing, of the claim, suit or
proceeding; (ii) provide HWMD with all reasonable information and assistance, at
HWMD's expense, to defend or settle such a claim, suit or proceeding; and (iii)
grant HWMD with the authority and control of the defense or settlement of such
claim. Such indemnity shall not extend to the extent that any infringement is
caused by HWMD's conformance to Quintiles requirements or specifications.
Page 16 of 20
<PAGE> 18
12.2 INJUNCTION REMEDIES FOR QUINTILES. If Quintiles' use of any
Tools is, or in HWMD's opinion is likely to be, enjoined due to the type of
claim specified in Section 12.1, then HWMD, at its sole option and expense, will
either: (i) procure for Quintiles a license to continue using the Tools in
accordance with the terms of this Agreement; or (ii) modify the allegedly
infringing item to avoid the infringement, without impairing the compliance of
the Tools with the Specifications; or (iii) if such is not reasonably possible,
then instruct Quintiles to cease use of the infringing item and the parties will
use the dispute resolution process set out in Article X to adjust this Agreement
or the Work Plan in question to compensate.
12.3 DUTY TO INDEMNIFY BY QUINTILES. Quintiles will, at its
expense, defend, indemnify, hold HWMD harmless, from and against any damage,
liability, cost or expense (including reasonable attorneys' fees and court
costs) arising out of or resulting from any claim, suit or other proceeding in
which it is alleged that the requirements or specifications produced by
Quintiles for the Tools or HWMD's exercise of its rights in the requirements or
specifications produced by Quintiles, infringes the Intellectual Property Rights
of any third party. In the event of any such claim, HWMD will: (i) promptly
notify Quintiles, in writing, of the claim, suit or proceeding; (ii) provide
Quintiles with all reasonable information and assistance, at Quintiles' expense,
to defend or settle such a claim, suit or proceeding; and (iii) grant Quintiles
with the authority and control of the defense or settlement of such claim. Such
indemnity shall not extend to the extent that any infringement is caused by
HWMD's method of conforming to Quintiles requirements or specifications.
12.4 INJUNCTION REMEDIES FOR HWMD. If HWMD's use of any Tools is,
or in Quintiles' opinion is likely to be, enjoined due to the type of claim
specified in Section 12.3, then Quintiles, at its sole option and expense, will
either: (i) procure for HWMD a license to continue using the requirements or
specifications in accordance with the terms of this Agreement; or (ii) modify
the allegedly infringing item to avoid the infringement, or (iii) if such is not
reasonably possible, then instruct HWMD to cease use of the infringing item and
the parties will use the dispute resolution process set out in Article X to
adjust this Agreement or the Work Plan in question to compensate.
ARTICLE XIII
MISCELLANEOUS
13.1 RELATIONSHIP OF PARTIES. HWMD and Quintiles agree that their
legal relationship to one another under this Agreement is as independent
contractors. Nothing in this Agreement shall be deemed to create a joint
venture, agency, partnership, or other relationship between HWMD and Quintiles,
and neither shall have any power by virtue of this Agreement to enter into any
contract or commitment on behalf of the other or to bind the other in any
respect whatsoever.
13.2 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by a written agreement (referring specifically to
this Agreement) of HWMD and Quintiles.
13.3 SEVERABILITY. In the event one or more of the provisions of
this Agreement or the application thereof to any circumstance are found to be
invalid or unenforceable to any extent by a
Page 17 of 20
<PAGE> 19
court with jurisdiction, the remaining provisions shall continue in full force
and effect. If any provision of this Agreement is found to be so broad as to be
unenforceable, such provision shall be interpreted to be only as broad as is
enforceable.
13.4 NOTICES. All notices and other communications hereunder shall
be in writing and shall be delivered personally or by next-day courier or
telecopied with confirmation of receipt, to the parties at the addresses
specified below (or at such other address for a party as shall be specified by
like notice; provided that notices of a change of address shall be effective
only upon receipt thereof). Any such notice shall be effective upon receipt, if
personally delivered or telecopied, or one day after delivery to a courier for
next-day delivery.
If to Quintiles, to:
Quintiles Transnational Corp.
4709 Creekstone Drive
Riverbirch Building, Suite 200
Durham, North Carolina 27703-8411
Telecopy Number: (919) 998-2177
Attention: John S. Russell, Senior Vice President, General
Counsel
with a copy to:
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.
Post Office Box 2611
Raleigh, North Carolina 27602-2611
Telecopy Number: (919) 821-6800
Attention: Gerald F. Roach
If to HWMD, to:
Healtheon/WebMD Corporation
400 The Lenox Building
3399 Peachtree Road NE
Atlanta, Georgia 30326
Telecopy Number: (404) 479-7603
Attention: Jack Dennison, Executive Vice President, General
Counsel
with a copy to:
Alston & Bird, L.L.P.
1211 East Morehead Street
P.O. Drawer 34009
Charlotte, North Carolina 28234-4009
Telecopy Number: (704) 334-2014
Attention: H. Bryan Ives III
Page 18 of 20
<PAGE> 20
13.5 DESCRIPTIVE HEADINGS. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.6 ENTIRE AGREEMENT. This Agreement (including its various
Schedules) constitutes the entire agreement and supersedes all other prior
agreements and understandings, both written and oral, among the parties with
respect to its subject matter.
13.7 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina, without
giving effect to the provisions thereof relating to conflicts of law.
13.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.
13.9 ASSIGNMENT. This Agreement and the rights, interests and
obligations hereunder shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns. Neither party may assign or otherwise transfer its rights, interests or
obligations under this Agreement without the other party's prior written consent
(not to be withheld or delayed unreasonably), except in connection with the
sale, transfer, or other disposition of all or any portion of its business or
assets in a transaction in which the transferee or successor to such business or
assets assumes the transferring party's corresponding obligations under this
Agreement.
13.10 PUBLICITY. Except as otherwise required by applicable law,
neither party shall refer to the other party in advertising, promotional
activities, or other public disclosures or announcements without such other
party's prior written consent, which shall not be withheld unreasonably.
13.11 LIMITATION OF LIABILITY. EXCEPT IN THE CASE OF FRAUD OR
WILLFUL OR INTENTIONAL MISCONDUCT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER
FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, OR SPECIAL DAMAGES
ARISING OUT OF OR RELATED TO SUCH ACTION OR OMISSION, INCLUDING WITHOUT
LIMITATION DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF
BUSINESS INFORMATION, AND THE LIKE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
13.12 FORCE MAJEURE. Neither party will be responsible for any
failure to perform its obligations under this Agreement due to causes beyond its
reasonable control, including without limitation acts of God, war, riot,
embargoes, acts of civil or military authorities, fire, floods, earthquakes,
accidents, strikes, or fuel crises, provided that such party gives prompt
written notice of such cause to the other party. The affected party's time for
performance will be extended for a period equal to the duration of the force
majeure.
* * * * * * * * *
Page 19 of 20
<PAGE> 21
[signature page to Internet Product Development and Marketing Agreement]
In witness whereof, each of HWMD and Quintiles has caused this
Agreement to be executed on its behalf by its respective officer duly authorized
to do so, all as of the date specified above in the preamble.
HEALTHEON/WEBMD CORPORATION
By: /s/ Jeff Arnold
--------------------------------------
Its: Chief Executive Officer
-------------------------------------
QUINTILES TRANSNATIONAL CORP.
By: /s/ John S. Russell
--------------------------------------
John S. Russell
Senior Vice President, General Counsel
and Corporate Secretary
Page 20 of 20
<PAGE> 22
SCHEDULE 2.2 TO INTERNET PRODUCT DEVELOPMENT AND MARKETING AGREEMENT
ALLIANCE GUIDELINES
A. Master Development/Rollout Schedule
<TABLE>
<CAPTION>
Phase Months Action
<S> <C> <C>
-----------------------------------------------------------------------------------------------------
1 0-6 Specify functions to be provided by Tools
- Parties estimate 200 functions to be specified
- Quintiles to be primarily responsible for this activity, with support
from HWMD software development and other appropriate personnel
-----------------------------------------------------------------------------------------------------
2 7-18 Develop software to implement functions specified in Phase 1
- Parties estimate will require 200 software development personnel on
full-time basis
- HWMD to be primarily responsible, with support from Quintiles
- Quintiles to pay HWMD for development services at HWMD's cost
(see Designated Resource Commitments below)
Develop sales materials for pharmaceutical customers and training
materials for Alliance sales personnel from HWMD and Quintiles
- Quintiles to be primarily responsible, with support from HWMD
-----------------------------------------------------------------------------------------------------
3 19-27 Global joint sales roll-out to targeted large pharmaceutical companies;
roll-out to include personal efforts at CEO level of HWMD and Quintiles
-----------------------------------------------------------------------------------------------------
4 28 First sales targeted to occur
-----------------------------------------------------------------------------------------------------
</TABLE>
B. Revenue Sharing Objectives
Parties to share revenues derived from commercialization of Tools as determined
by Steering Committee. Current estimated guidelines are as follows:
<TABLE>
<CAPTION>
Estimates Revenue Share Operating Margin
---------------------------------------------------------------------------------
HWMD Quintiles HWMD Quintiles
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Drug
Development 12.5% 87.5% 25 - 30% 20 - 25%
------------------------------------------------------------------------------------------------------------------
Physician
Detailing 12.5% 87.5% 25 - 30% 20 - 25%
------------------------------------------------------------------------------------------------------------------
Direct-to-
Consumer 87.5% 12.5% 30% 30%
------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 23
These estimates and the parties' revenue sharing objectives are further modeled
in the attached Schedule 2.2.1.
C. Resource Commitment Model
1. In addition to Quintiles' funding HWMD's development of the
Initial Toolkit at cost (see Section 6.1), the parties
anticipate approximately the following commitment of resources
will be necessary to enable commercialization of the Initial
Toolkit:
<TABLE>
<S> <C>
Planning $ 5 million
-------------------------------------------------------------
Business development $ 15
-------------------------------------------------------------
Management $ 10
-------------------------------------------------------------
Clinical trial training $ 50
-------------------------------------------------------------
Detailing training $ 15
-------------------------------------------------------------
Contingencies $ 10
-------------------------------------------------------------
-------------------------------------------------------------
Total $[105] million
-------------------------------------------------------------
</TABLE>
2. The parties will commit such resources in the manner
determined by the Steering Committee in Work Plans.
<PAGE> 24
SCHEDULE 2.1.1 TO INTERNET PRODUCT
DEVELOPMENT AND MARKETING AGREEMENT
REVENUE SHARING MODEL (DETAIL)
Product Development and Commercialization Revenue Sharing Model
<TABLE>
<CAPTION>
Example at $1 billion
<S> <C> <C> <C> <C>
Quintiles 1,000,000 1,000,000
Revenues
Profit - before 325,000 32.50% 178,750 17.88%
spend
Payment to HWMD 125,000 12.50% 68,750 6.88%
-------------------------- -----------------------
Profit - after 200,000 20.00% 110,000 11.00%
spend
</TABLE>
<TABLE>
<CAPTION>
Example at $1 Billion in revenue
Quintiles Profits ---------------------------------------------------------------
--------------------- HWMD Profit Payment Profit Profit %
Pre-Spend Post-Spend Revenues Revenue Pre-Spend to HWMD Post-Spend Post-Spend
--------------------- -------- ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Quintiles at 32.50% 20.00% 12.50% 1,000,000 325,000 125,000 200,000 20.00%
20% after pmts.
30.88% 19.00% 11.88% 1,000,000 308,750 118,750 190,000 19.00%
29.25% 18.00% 11.25% 1,000,000 292,500 112,500 180,000 18.00%
27.63% 17.00% 10.63% 1,000,000 276,250 106,250 170,000 17.00%
26.00% 16.00% 10.00% 1,000,000 260,000 100,000 160,000 16.00%
24.38% 15.00% 9.38% 1,000,000 243,750 93,750 150,000 15.00%
22.75% 14.00% 8.75% 1,000,000 227,500 87,500 140,000 14.00%
21.13% 13.00% 8.13% 1,000,000 211,250 81,250 130,000 13.00%
19.50% 12.00% 7.50% 1,000,000 195,000 75,000 120,000 12.00%
17.88% 11.00% 6.88% 1,000,000 178,750 68,750 110,000 11.00%
-----------------------------------------------------------------------------------------------------------------------------------
16.00% 11.00% 5.00% 1,000,000 160,000 50,000 110,000 11.00%
15.00% 11.00% 4.00% 1,000,000 150,000 40,000 110,000 11.00%
14.00% 11.00% 3.00% 1,000,000 140,000 30,000 110,000 11.00%
-----------------------------------------------------------------------------------------------------------------------------------
13.00% 10.00% 3.00% 1,000,000 130,000 30,000 100,000 10.00%
12.00% 9.00% 3.00% 1,000,000 120,000 30,000 90,000 9.00%
11.00% 8.00% 3.00% 1,000,000 110,000 30,000 80,000 8.00%
10.00% 7.00% 3.00% 1,000,000 100,000 30,000 70,000 7.00%
9.00% 6.00% 3.00% 1,000,000 90,000 30,000 60,000 6.00%
8.00% 5.00% 3.00% 1,000,000 80,000 30,000 50,000 5.00%
7.00% 4.00% 3.00% 1,000,000 70,000 30,000 40,000 4.00%
6.00% 3.00% 3.00% 1,000,000 60,000 30,000 30,000 3.00%
</TABLE>
<PAGE> 25
Direct-to-Consumer Revenue Sharing Model
<TABLE>
<CAPTION>
Example at $1 billion
<S> <C> <C>
Total Revenues 1,000,000
Quintiles Revenues 125,000 12.50%
HWMD Revenues 875,000 87.50%
----------------------------------------
Total Revenues 1,000,000 100.00%
=====================
</TABLE>