LICENSE
AGREEMENT
This License
Agreement (this "Agreement"), dated as of
Date (the "Effective
Date"), is
entered into by and between Network Technology, Inc., a Maryland C
corporation ("RxNT"), and eRXSYS, Inc., a Nevada C corporation
("eRXSYS"). RxNT and eRXSYS are each sometimes referred to herein
as a "Party" and collectively as the "Parties".
I. BACKGROUND AND RECITALS
1.1 eRXSYS intends to partner with physicians to
provide paperless prescriptions that safely enhance patient
care. The focus will be on the pain management segment of the
physician office market place.
1.2 RxNT owns the RxNT Technology (as hereinafter defined) and the Licensed
Products (as hereinafter defined), and has the right to grant
licenses of the Licensed Products thereunder.
1.3 eRXSYS desires to obtain from RxNT, and RxNT hereby
desires to grant to eRXSYS, certain non-exclusive licenses to the
Licensed Products as provided in this Agreement.
II.
DEFINITIONS
The
following terms shall have meanings ascribed to them below:
2.1
"Affiliate" means, with respect to either Party, any Person that
(directly or indirectly) controls, is controlled by or is under
common control with that party. "Control" of a Person means the
power (directly or indirectly) to direct the management or policies
of that Person, whether through ownership of voting securities, by
contract, by agency or otherwise. For purposes of this Section,
"Person" means a corporation, partnership, joint venture,
association, individual or other entity.
2.2 " End Users" means
eRXSYS’s end user customers, including without limitation,
participating physicians and pharmacies, who have each entered into
an End User License with eRXSYS prior using the Licensed Products
to access the Services.
2.3 "End User License" means the standard form of
license allowing End Users to use the Licensed Products solely to
access the Services, and not for resale or transfer to others, and
as provided in Section 3.1 below.
2.4 "Licensed Products" means
the products identified on Exhibit
A attached hereto, and any derivatives, modifications
and/enhancements thereto developed pursuant
to this Agreement and during the Term (defined in Section 9.1
below).
2.5 "RxNT Technology" means the intellectual
property of RxNT, including, without
limitation, any patent, patent application, source code, object
code, software, copyright, trademark and/or trade secret related
to or embodied by
the Licensed Products
.
2.6 "PBM" means a pharmacy benefit management company (e.g., Express
Scripts and Merck-Medco).
2.7 "RxHub" means RxHub LLC, a Delaware limited liability company.
2.8 "Services" means the electronic prescription
services providing .
2.9 "eRXSYS Customer" means any person or entity which
purchases Services from eRXSYS during the Term, including, without
limitation, physician group or healthcare organization; provided,
however, that a "eRXSYS Customer" shall not include any person or
entity that has purchased products or services from RxNT during the
six (6) month period prior to such time that such person, entity or
agency first purchased products or services from eRXSYS.
2.10
"eRXSYS Product" means the product developed pursuant to this
Agreement, which incorporates the Licensed Products, for the sole
purpose of providing the Services to the eRXSYS Customers.
III. GRANT OF LICENSE BY
RXNT
3.1 License Grant; During the
Term , and subject to the terms and
conditions of this Agreement, RxNT hereby
grants to eRXSYS, the
non-exclusive right
and license to use the compiled object code version of the Licensed
Products exclusively to market and sell the Services and provide
the Services to End Users. The Licensed Products may be used to
market, sell and provide the Services to one thousand (1000) End
Users who enter into an End User License with eRXSYS; the terms of
such End User License shall be in a standard form and shall be approved
in advance and in writing by RxNT, which approval shall not be unreasonably
withheld or delayed. eRXSYS agrees not to
disassemble or reverse engineer the Licensed Products in whole or
in part, except to the extent that such restriction is expressly
prohibited by applicable law. eRXSYS has the option of purchasing
additional End User Licenses in increments of one thousand (1000)
End Users per $100,000 under identical terms and conditions
described herein.
3.2 Improvements. Any modifications, customizations
and/or improvements (the "Improvements") to the Licensed Products
required or desired by the Parties to implement the Services shall
be made solely by RxNT unless approved in advance and in writing by
RxNT. Any Improvements developed with the purpose of exclusive use
and license by eRXSYS shall require mutually agreed upon written
consent by eRXSYS and RxNT prior to development. RxNT shall own all
rights, title and interest in and to the Improvements and RxNT
hereby agrees to grant to eRXSYS an annual, non-exclusive license
to use the Improvements solely in conjunction with the authorized
use of the Licensed Products. eRXSYS agrees
that it shall use only the Licensed Products (including without
limitation RxNT’s interface to RxHub) for each prescription
transaction generated by eRXSYS Product .
IV. BRANDING AND
TRADEMARK USAGE
4.1 Branding. The initial Licensed Product to be
offered by eRXSYS shall be distributed under the brand name ASSURED
SCRIPT . All Licensed Product distributed by eRXSYS under this
Agreement shall also be marked "powered by RxNT" unless otherwise
mutually agreed to by the Parties in advance and in writing. The
designation "powered by RxNT" shall be placed in a conspicuous and
highly visible location on the Licensed Product and shall be
displayed on the End Users computer screen each time the License
Product is launched.
4.2 Use of Trademarks. During the Term, eRXSYS may use
trademarks owned by RxNT that are associated with the Licensed
Product(s), subject to the following conditions. eRXSYS agrees to
use the appropriate trademark symbol (either TM or
® in a superscript following the Licensed Product name) and
clearly indicate RxNT’s ownership of the trademark whenever
the Licensed Product name is mentioned in any computer screen
display, advertisement, brochure, or in any other manner in
connection with the Licensed Products. eRXSYS shall at least
annually provide RxNT with samples of all screen displays,
literature, packages, labels and labeling prepared by eRXSYS that
uses the Licensed Product name. Solely as set forth in Section 4.1
above, eRXSYS may use another brand name, trademark or service mark
in addition to any of the RxNT trademarks. eRXSYS shall not combine
RxNT’s trademarks and other marks so as to effectively create
a unitary composite mark without the prior written approval of
RxNT. eRXSYS acknowledges the ownership of the RxNT trademarks in
RxNT and agrees that it will do nothing inconsistent with such
ownership and that all use of the RxNT trademarks will inure to the
benefit of and on behalf of RxNT. ˆ‰N!
V. DUTIES AND
RESPONSIBILITIES
5.1 During the Term, eRXSYS intends to partner with
physicians to provide paperless prescriptions that safely enhance
patient care. The focus
will
be on the pain management segment of the physician office market
place.
5.2 Activities may include the
following:
(a) Marketing of the prescription writing software to
large groups within geographic areas.
(b) Marketing of a variety of healthcare products and
services based on software and transaction services to a variety of
healthcare submarkets.
5.3 During the Term, RxNT shall
undertake to achieve the following duties
and responsibilities:
(a) Ensuring that the Licensed Products remain in good
standing with PBM’s, RxHUB and all applicable industry
regulatory rules (with eRXSYS agreeing to cooperate with RxNT in
such efforts).
(b) Maintaining network connectivity and business
relationships with PBM’s and RxHUB.
(c) Customizing and installing the product to combine
the ASSURED SCRIPT .
(d)
Considering and approving all pricing models for the product.
(e) Jointly responsible with eRXSYS (subject to Section 3.2 above) for the design and implementation of the network and
product architecture of the ASSURED SCRIPT product and service.
(f) Second level support of the ASSURED SCRIPT product
and service.
5.4 During the Term, eRXSYS will
shall undertake to achieve the following duties and
responsibilities:
(a) Primary responsible for the sales and marketing of
the ASSURED SCRIPT product.
(b) Sourcing appropriate financing for eRXSYS.
(c) Jointly responsible with RxNT (subject to Section 3.2 above) for the design and implementation of the network and
product architecture.
(d) First level support of the product and service.
(e) General product implementation, including training
of personnel.
6.1 eRXSYS hereto expressly
acknowledges and agrees that the ownership
of and all right,
title and interest in the RxNT Technology and Licensed Products, the components
comprising the RxNT
Technology and Licensed Products, and any trademark, trade name,
trade secret, patent
or copyright relating
to
the RxNT Technology
and Licensed Products is and will remain vested solely in RxNT. Except as otherwise
provided herein, e RXSYS will not have access to or permission to
use in any manner the RxNT Technology,
including without limitation the source code version of the
Licensed Products, without the express
written permission of
RxNT.
VII. LICENSE FEES; ROYALTIES;
STOCK APPRECIATION RIGHTS
7.1 eRXSYS will pay to RxNT a license fee of $100,000,
$50,000 of which shall be payable upon execution of this contract,
and the remaining $50,000 of which shall be payable upon "going
live" as indicated by the installation of a
functional version of the product.
7.2 eRXSYS will commence paying RxNT royalties (the "Royalties") equal to twenty five percent (25%)
of the Gross Profit from the sale of the ASSURED SCRIPT product of
eRXSYS for the remainder of the Term.
7.3 Royalties due under Section
7.2 above shall be paid on a calendar
monthly basis within thirty (30) days after the end of the
applicable calendar month. Payments shall be made by wire transfer
to an account specified by RxNT in writing at least thirty (30)
days prior to the date a Royalty payment is due. Within thirty (30)
days after the end of each calendar month, eRXSYS shall furnish to
RxNT a report providing the Gross Profit, and Gross Revenues for
the ASSURED SCRIPT product for the applicable monthly period.
7.4 eRXSYS agrees to make and maintain such books,
records and accounts as are reasonably necessary to verify the
Royalty payments due RxNT under this Agreement. An independent
certified accountant, selected by RxNT, may, upon reasonable notice
and during normal business hours, but no more than once per
calendar quarter, audit and inspect those records of eRXSYS which
are necessary to determine the accuracy of the Royalty payments
made by eRXSYS to RxNT under this Agreement. In the event that that
any such audit reveals that the Royalties paid to RxNT for a given
calendar quarter are more than five percent (5%) greater than the
Royalties actually paid by eRXSYS for that calendar quarter, then
in addition to remitting all outstanding Royalties shown to be due
under such audit, all reasonable out-of-pocket expenses incurred by
RxNT in conducting the audit shall be paid by eRXSYS within thirty
(30) days of receiving the auditor’s report; otherwise, all
expenses incurred by RxNT in conducting such audit will be borne by
RxNT.
8.1 The Parties acknowledge and agree that, during the
Term, RxNT will not sell the Licensed
Products (whether as a standalone product or in combination with
any other product) to any existing eRXSYS physician group or
healthcare organization.
9.1 The term of this Agreement shall commence on the
Effective Date and
shall continue for three (3) years or until terminated (a) upon the
written consent of both RxNT and eRXSYS; or (b) as provided in
Sections 9.2 or 9.3 below (the "Term"). Such term shall
automatically be extended for additional one-year terms thereafter
upon payment of an agreed upon annual licensing fee or unless
either party notifies the other, not less than thirty (30) days
prior to the expiration of the applicable term, of its intention
not to renew the Agreement. In the case of a change in ownership or
control of RxNT pursuant to Section 15.1 below, the RxNT Successor
(as defined in Section 15.1) shall provide prior written notice to
eRXSYS, not less than twelve (12) months prior to the expiration of
the applicable term, of its intention not to renew the Agreement.
Any debts, obligations covenants or liabilities accrued hereunder
between the Parties shall survive the expiration or termination of
this Agreement for whatever reason.
9.2 Either Party shall have the right to terminate this
Agreement upon a material default by the other Party of any of its
obligations hereunder, if such default has not been cured within
sixty (60) days after receipt of written notice from the other
Party of the alleged default.
9.3 In the event either Party files a petition in
bankruptcy or in case a petition in bankruptcy is filed against
such Party and said petition is not dismissed within ninety (90)
days thereafter, or if said Party is adjudged bankrupt or shall
make a general assignment for the benefit of its creditors or any
assignment in the nature of such a general assignment, or in case a
receiver is appointed for its business, then this Agreement, at the
option of the other Party, shall terminate forthwith upon written
notice from the other party to the insolvent Party in the exerci
se of such option to terminate.
9.4 Upon termination of this Agreement by RxNT
pursuant to Section 9.2 above:
(a) All obligations of eRXSYS to pay all sums due on or
prior to the date of termination shall be due and payable upon the
effective date of termination.
(b) The licenses granted herein shall immediately
terminate, except as provided below in this Section 9.4.
(c) eRXSYS and its reproduct
