Exhibit 10(i)
CONFIDENTIAL TREATMENT- Asterisked material has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
MARKETING SUPPORT AGREEMENT
This Marketing Support Agreement (the "Agreement"), dated as of January
30, 1997, is between Neuromedical Systems, Inc., a Delaware corporation
("NSI"), NetMed, Inc., an Ohio corporation ("NetMed") and Blue Cross and Blue
Shield Mutual of Ohio, a corporation and its wholly owned subsidiaries and
affiliates ("BCBSMO").
RECITALS
1. NSI has designed, developed and produces the PAPNET-Registered
Trademark- Testing System ("PAPNET testing"), which is a semi-automated system
for the testing of supposedly negative Pap smears. NetMed has a license to
market and sell PAPNET testing services in the State of Ohio, among other
places.
2. BCBSMO is an insurance company that desires to strongly recommend
PAPNET testing for the routine examination of Pap smears for patients served by
BCBSMO's network of physicians and clients.
3. NSI and NetMed desire to assist BCBSMO with the communication of the
availability of PAPNET testing to its network of physicians and patients, and
otherwise to promote the availability of PAPNET testing to physicians and
patients in the State of Ohio.
AGREEMENT
In consideration of the foregoing and mutual agreements set forth below,
the parties agree as follows:
Section 1. COVERAGE OF PAPNET TESTING; COMMUNICATION TO CLINICIANS.
BCBSMO agrees to strongly recommend that all "negative" Pap smears covered by
its benefit plans be examined using PAPNET testing, and to cover the costs of
such examination. BCBSMO shall use its best efforts to promote PAPNET testing
of negative Pap smears among its patient and provider populations. In
furtherance thereof BCBSMO agrees to notify all relevant parties to its plans
(including laboratories, obstetrician/gynecologists, family practitioners,
general practitioners, nurse practitioners and the health care providers who
take Pap smears), in accordance with its usual practices for announcing that new
products, services or procedures are covered by its plans and in any event
within two weeks of the date hereof of such coverage and recommendation. Such
notifications shall be substantially in the form of the letters attached to this
Agreement as Annex B.
Section 2. LABORATORIES. NSI will train, equip and certify any
laboratory designated by BCBSMO and otherwise meeting NSI's requirements to
perform PAPNET testing in accordance with its usual practices.
Section 3. MARKETING SUPPORT TO BE PROVIDED BY NSI AND NETMED. (a)
In consideration of the foregoing, NSI and NetMed will assist BCBSMO in the
education of clinicians and clients about the availability and benefits of
PAPNET testing by:
(i) mailing to all BCBSMO laboratories announcing BCBSMO's coverage
of PAPNET testing in accordance with Section 1, which mailing will consist
of at least a promotional advertisement or brochure and a letter;
(ii) mailing to all appropriate clinicians announcing coverage of
PAPNET testing in accordance with Section 1, which mailing will inform
clinicians of background information on PAPNET testing and the laboratory
that will perform the test, and which mailing will consist of at least a
promotional advertisement or brochure, a letter, appropriate patient
information and educational materials on the PAPNET test;
(iii) at NSI's and NetMed's cost, making the services of NSI's
marketing department, advertising agency and public relations firm
reasonably available to BCBSMO to assist in the development of specific
educational and marketing materials and the announcement specified above;
(iv) at NSI's and NetMed's cost, production and distribution of such
educational and marketing materials;
(v) NSI and NetMed will assist BCBSMO in the development of suitable
joint press releases announcing the coverage specified in Section 1 hereof,
provided that each party will submit any such press release in draft form
to the other party for its approval, such approval not to be unreasonably
withheld or delayed;
(vi) at NSI's and NetMed's cost, including and specifically mentioning
BCBSMO as a provider of the PAPNET test in selected advertising in
accordance with the media plan attached to this agreement as Annex A.
(b) *Portions have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment.
(c) *Portions have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment.
Section 4. INTELLECTUAL PROPERTY. Each party hereby grants the other
party a non-exclusive, revocable right to use, for the limited purposes of
complying with or performing this Agreement, the copyrights, trademarks and
trade names used by each party to identify its products or services. Neither
party shall use the other's copyrights, trademarks or trade names in a
disparaging manner or take any action which is inconsistent with such party's
ownership of its copyrights, trademarks and trade names. In furtherance of the
foregoing, BCBSMO shall review and
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approve any promotional or informational materials that refer to BCBSMO prior
to their use or distribution.
Section 5. REPRESENTATIONS AND WARRANTIES OF NSI.
NSI hereby represents and warrants to BCBSMO as follows:
5.1 ORGANIZATION. NSI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. NSI has the
corporate power to own or lease its properties and assets and to carry on its
business as now conducted.
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. NSI has the right, power and
authority to enter into this Agreement and to perform all of its obligations
hereunder. This Agreement has been authorized by all necessary corporate action
of has been duly executed and delivered by, and constitutes the valid and
binding obligation of, NSI, enforceable in accordance with its terms.
5.3 NO CONFLICTS; NO CONSENTS. The execution, delivery and performance of
this Agreement will not result in a breach in the terms or conditions of or
constitute a default under, or violate, or conflict with, as the case may be:
(i) any provision of any law, regulation or ordinance, (ii) the Certificate of
Incorporation or Bylaws of NSI (iii) any agreement, lease, mortgage or other
instrument or undertaking, oral or written, to which NSI is a party or by which
it or any of its properties or assets is or may be bound or affected, (iv) any
judgment, order, writ, injunction or decree of any Governmental Body, or (v) any
action of or by, or filing with, any Governmental Body. The execution and
delivery of this Agreement do not and, except for any approvals, permits and
licenses required to market the PAPNET service in Ohio, the performance of this
Agreement will not, require any action, consent or approval of any person,
entity or Governmental Body.
5.4 LITIGATION. There is no pending or, to the knowledge of NSI,
threatened, legal, administrative, arbitration or other proceeding or
governmental investigation which is likely to have a material adverse effect on
NSI or the performance by NSI of this Agreement.
Section 6. REPRESENTATIONS AND WARRANTIES OF NETMED.
6.1 ORGANIZATION. NetMed is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio. NetMed has
the corporate power to own or lease its properties and assets and to carry on
its business as now conducted.
6.2 AUTHORITY RELATIVE TO THIS AGREEMENT. NetMed has the right, power and
authority to enter into this Agreement and to perform all of its obligations
hereunder. This Agreement has been authorized by all necessary corporate action
of, has been duly executed and delivered by, and constitutes the valid and
binding obligation of NetMed, enforceable in accordance with its terms.
6.3 NO CONFLICTS; NO CONSENTS. The execution, delivery and performance of
this Agreement will not result in a breach in the terms or conditions of or
constitute a default under, or
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violate, or conflict with, as the case may be: (i) any provision of any law,
regulation or ordinance, (ii) the Certificate of Incorporation or Bylaws of
NetMed, (iii) any agreement, lease, mortgage or other instrument or
undertaking, oral or written, to which NetMed is a party or by which it or
any of its properties or assets is or may be bound or affected, (iv) any
judgment, order, writ, injunction or decree of any Governmental Body, or (v)
any action of or by, or filing with, any Governmental Body. The execution
and delivery of this Agreement do not and, except for any approvals, permits
and licenses required to market the PAPNET service in Ohio, the performance
of this Agreement will not, require any action, consent or approval of any
person, entity or Governmental Body.
6.4 LITIGATION. There is no pending or, to the knowledge of NetMed,
threatened, legal administrative, arbitration or other proceeding or
governmental investigation which is likely to have a material adverse effect on
NetMed or the performance by NetMed of this Agreement.
Section 7. REPRESENTATIONS AND WARRANTIES OF BCBSMO.
BCBSMO hereby represents and warrants to NSI and NetMed as follows:
7.1 ORGANIZATION. BCBSMO is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio. BCBSMO has
the corporate power to own or lease its properties and assets and to carry on
its business as now conducted.
7.2 AUTHORITY RELATIVE TO THIS AGREEMENT. BCBSMO has the right, power and
authority to enter into this Agreement and to perform all of its obligations
hereunder. This Agreement has been authorized by all necessary corporate action
of, has been duly executed and delivered by, and constitutes the valid and
binding obligation of BCBSMO, enforceable in accordance with its terms.
7.3 NO CONFLICTS; NO CONSENTS. The execution, delivery and performance of
this Agreement will not result in a breach in the terms or conditions of or
constitute a default under, or violate, or conflict with as the case may be: (i)
any provision of any law, regulation or ordinance, (ii) the Certificate of
Incorporation or Bylaws of BCBSMO, (iii) any agreement, lease, mortgage or other
instrument or undertaking, oral or written, to which BCBSMO is a party or by
which it or any of its properties or assets is or may be bound or affected, (iv)
any judgment, order, writ, injunction or decree of any Governmental Body, or (v)
any action of or by, or filing with, any Governmental Body. The execution and
delivery of this Agreement do not, and the performance of this Agreement will
not, require any action, consent or approval of any person, entity or
Governmental Body.
Section 7A. MUTUAL INDEMNIFICATION.
In connection with and in consideration of the matters contemplated in this
Agreement, BCBSMO on the one hand, and NSI and NetMed collectively on the other
hand (any such party, an "Indemnifying Party"), shall each indemnify, save and
hold harmless the other, its and their subsidiaries, its and their respective
employees, officers, directors, agents and representatives (collectively, the
"Indemnified Parties"), from and against any and all costs, losses, liabilities,
damages, lawsuits, deficiencies, claims and expenses (whether or not arising out
of third-party
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claims), including, INTER ALIA, interest, penalties, reasonable attorneys'
fees and all reasonable amounts paid in investigation, defense or settlement
of any of the foregoing (herein, the "Losses"), incurred in connection with
or resulting from the activities conducted pursuant to this Agreement;
PROVIDED, that neither of BCBSMO, on the one hand, or NSI and NetMed, on the
other hand, shall be under any obligation to pay Losses to or for the benefit
of any Indemnified Party arising from the finally judicially determined
negligence, gross negligence or willful misconduct of such Indemnified Party.
If any claim is made against any Indemnified Party for which
indemnification is sought hereunder, written notice shall be given to the
Indemnifying Party as promptly as practicable; PROVIDED, that the failure of any
Indemnified Party to give timely notice shall not affect rights to
indemnification hereunder except to the extent that the Indemnifying Party
demonstrates actual damage caused by such failure. If within 30 days of receipt
of such notice the Indemnifying Party acknowledges in writing to the Indemnified
Party that the Indemnifying Party shall be obligated under the terms of its
indemnity hereunder in connection with such claims, then the Indemnifying Party
shall be entitled, if it so elects, to take control of the defense and
investigation of such claim and to employ and engage attorneys of its own choice
to handle and defend the same, at the Indemnifying Party's cost, risk and
expense; PROVIDED, that the Indemnified Party may, at its own cost, participate
in the investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom. Each party shall cooperate in all reasonable respects with
the other party and its attorneys in the investigation, trial and defense of
such lawsuit or action and any appeal arising therefrom.
Section 8. MISCELLANEOUS.
8.1 ASSIGNMENT. This Agreement is not assignable by BCBSMO (including its
wholly owned subsidiaries and affiliates), NetMed or NSI and the rights granted
by one party shall not be transferred without the prior written consent of the
other. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns.
8.2 WAIVER. No waiver by any party of any breach of any provision hereof
shall constitute a waiver of any other breach of that or any other provision
hereof.
8.3 SEVERABILITY. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of any other party
or provision of this Agreement.
8.4 CHOICE OF LAW. This Agreement and the performance hereunder shall be
governed by and construed in accordance with the laws of the State of Ohio
(without giving affect to principles of conflicts of laws).
8.5 NOTICE. All notices, invoices, consents or other communications
required or permitted to be given by either party to the other shall be in
writing (including facsimile or similar writing) and shall be given by facsimile
and hard copy or by certified or registered mail, postage prepaid as follows;
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(a) If to NSI:
Neuromedical Systems, Inc.
Two Executive Boulevard
Suffern, New York 10901-4164
Attn: Andrew C. Panagy
Facsimile: (914) 368-3896
With a copy to the same address to the attention of:
John B. Henneman, III
Vice President of Corporate Development and General Counsel
(b) If to NetMed:
NetMed, Inc.
425 Metro Place North
Suite 140
Dublin, Ohio 43017
Attention: David J. Richards, President and CEO
Facsimile: (614) 793-9376
(c) If to BCBSMO:
BlueCross BlueShield of Ohio
2060 East Ninth Street
Cleveland, Ohio 44115-1355
Attention: Benjamin D. Zelman, Director, Utilization Management
Facsimile: 216-687-6080
or at such other address or facsimile number (or other similar number) as any
party may from time to time specify to the other party hereto. Any notice,
consent or other communication required or permitted to be given hereunder shall
be deemed to have been given on the date of mailing, personal delivery or
facsimile (provided the appropriate answer back is received) thereof and shall
be conclusively presumed to have been received on the second business day
following the date of mailing or, in case of personal delivery, the actual day
of personal delivery thereof, or, in the case of facsimile delivery, when such
facsimile is transmitted, except that a change of address shall not be effective
until actually received.
8.7 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
previous proposals, both oral and written, negotiations, representations,
commitments, writings and all other communications between the parties. It may
not be released, discharge& changed or modified except by an instrument in
writing signed by a duly authorized representative of each of the parties.
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8.8 HEADINGS. The headings used in this Agreement are for reference
purposes only and shall not be construed to limit or further define any term or
provisions hereof.
8.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by a
duly authorized representative as of the date first written above.
NEUROMEDICAL SYSTEMS, INC.
By: /S/ MARK RUTTENBERG
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NETMED, INC.
By: /s/ David J. Richards
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BLUE CROSS AND BLUE SHIELD MUTUAL OF OHIO
By: /s/ Kent W. Clapp
------------------------
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