License & Website Development Agreement

LICENSE AND WEB SITE DEVELOPMENT AGREEMENT



MEDSCAPE, INC.



SOFTWATCH INC.





Dated as of June 15, 1999







- -------------------------------------------------------------------------------- TABLE OF CONTENTS



Page(s)

ARTICLE 1. LICENSE OF SOFTWARE, CUSTOMIZATIONS;

DIETWATCH WEBSITE......................................................................1

Section 1.1 (a) SoftWatch Software License Grant.....................................1

(b) Medscape Consumer Site Defined................................................2

(c) Internet Defined..............................................................2

(d) SoftWatch Software Further Defined............................................2

(e) Licence For Use in Connection with Multiple Sclerosis.........................3

(f) Copying.......................................................................3

Section 1.2 Customization Services........................................................3

Section 1.3 DietWatch Site License........................................................4

(a) Exclusive Diet Center.........................................................4

(b) General Health and Wellness Center; Hyperlink.................................4

(c) Branding......................................................................4

(d) Member Information............................................................5

(e) Medscape Content; Editorial and Artistic Control;

Look and Feel of Tools.......................................................6

(f) Limited Use License As to Medscape Content....................................6



ARTICLE 2. MEDSCAPE CONSUMER SITE DEVELOPMENT SERVICES............................................6

Section 2.1 Development Services..........................................................6



ARTICLE 3. ADDITIONAL MEDSCAPE CONSUMER SITE

DEVELOPMENT SERVICES AND CO-BRANDED

DIET CENTER CRITERIA...................................................................7

Section 3.1 Content and Uploading of Content..............................................7

Section 3.2 Editorial and Artistic Control................................................7



ARTICLE 4. DELIVERY, TESTING AND ACCEPTANCE; RESPONSIBILITIES

OF THE PARTIES.........................................................................8

Section 4.1 Commencement of Services......................................................8

Section 4.2 Certification Testing.........................................................8

Section 4.3 Final Certification; Deemed Acceptance........................................8

Section 4.4 Retesting.....................................................................9

Section 4.5 Failure to Achieve Final Certification........................................9

Section 4.6 Delivery Delays..............................................................10

Section 4.7 Medscape Responsibilities with respect

to Deliverables..............................................................10



ARTICLE 5. MAINTENANCE AND SUPPORT SERVICES......................................................11

Section 5.1 Maintenance Period...........................................................11

Section 5.2 SoftWatch Services; Outside Consultants......................................11

Section 5.3 Medscape.com Website.........................................................12



ARTICLE 6. FEES FOR DEVELOPMENT AND CUSTOMIZATION

SERVICES; ROYALTIES..................................................................12

Section 6.1 SoftWatch Software Basic License Fee

and Customization Fee........................................................12

Section 6.2 Maintenance Fees.............................................................12

Section 6.3 Royalty Payments.............................................................13

(a) End-User Tools Royalties.....................................................13

(b) Co-Branded Diet Center Royalties.............................................13

(c) Nutrition/General Health and Wellness

Center Royalties.............................................................14

Section 6.4 Payment Terms; Taxes.........................................................15

Section 6.5 (a) Reporting by Medscape for purposes

of Calculating Royalties.....................................................15

(b) Independent Auditor on Change of Control.....................................16

Section 6.6 (a) Audit Rights.............................................................16

(b) Audit Report on Change of Control............................................16

(c) Change in Control............................................................16

Section 6.7 Expense Reimbursement........................................................17



ARTICLE 7. INTELLECTUAL PROPERTY RIGHTS..........................................................17

Section 7.1 SoftWatch Owned Software and Customizations..................................17

Section 7.2 Medscape-Owned Materials; Customization

User Interfaces..............................................................17

Section 7.3 Shared Materials.............................................................18

Section 7.4 Trademarks, Etc..............................................................18

Section 7.5 Limited License..............................................................18

Section 7.6 Third Party Materials........................................................18



ARTICLE 8. TRADEMARKS; COPYRIGHT NOTICES.........................................................18

Section 8.1 Incorporation of Marks.......................................................18

Section 8.2 Mutual Covenants as to Marks and Notices.....................................19



ARTICLE 9. CONFIDENTIALITY; NON-COMPETE..........................................................19

Section 9.1 Confidentiality Obligations..................................................19

Section 9.2 Confidential Information.....................................................19



Section 9.3 Exclusivity; Non-Competition Covenants.......................................20

Section 9.4 Specific Performance.........................................................21



ARTICLE 10. REPRESENTATIONS, WARRANTIES, COVENANTS,

AND INDEMNITIES..............................................................22

Section 10.1 SoftWatch....................................................................22

Section 10.2 SoftWatch, Ltd...............................................................23

Section 10.3 Medscape.....................................................................24

Section 10.4 Indemnification..............................................................24

Section 10.5 Indemnification Procedures...................................................25



ARTICLE 11. PRODUCT RELATED WARRANTIES AND

COVENANTS...................................................................25

Section 11.1 General Provisions...........................................................25

Section 11.2 Viruses......................................................................25

Section 11.3 Year 2000 Compliance.........................................................25

Section 11.4 Limited Warranty.............................................................26

Section 11.5 Limitation of Liability......................................................26

Section 11.6 Adequate Controls............................................................26

Section 11.7 Reverse Engineering..........................................................27

Section 11.8 Encryption Covenant..........................................................27

Section 11.9 Medscape.com Website.........................................................27



ARTICLE 12. SALES AGENCY..........................................................................27

Section 12.1 Appointment..................................................................27

Section 12.2 Scope of Agency; Right of Approval..........................................27

Section 12.3 Medscape's Obligations.......................................................27

Section 12.4 Commission...................................................................27

Section 12.5 Expenses.....................................................................28

Section 12.6 SoftWatch's Responsibilities.................................................28

Section 12.7 Payment Terms; Taxes.........................................................28

Section 12.8 (a) Reporting by SoftWatch for purposes of

Calculating Sales Commissions................................................28

(b) Independent Auditor on Change of Control.....................................28

Section 12.9 (a) Audit Rights........................................................28

(b) Audit Report on Change of Control............................................29

(c) Medscape Change in Control...................................................29



ARTICLE 13. TERM AND TERMINATION..................................................................30

Section 13.1 Term.........................................................................30

Section 13.2 Termination for Breach.......................................................30



Section 13.3 Bankruptcy and Related Events................................................30

Section 13.4 Obligations Upon Termination or Expiration...................................30

Section 13.5 Transfer of Site.............................................................30

Section 13.6 Survival.....................................................................31



ARTICLE 14. GUARANTY OF SOFTWATCH, LTD............................................................31

Section 14.1 Guaranty.....................................................................31

Section 14.2 Obligations Unconditional....................................................31

Section 14.3 Successors and Assigns; Applicable Law.......................................31



ARTICLE 15. GENERAL PROVISIONS....................................................................32

Section 15.1 No Joint Venture Created.....................................................32

Section 15.2 Entire Agreement.............................................................32

Section 15.3 Assignment...................................................................32

Section 15.4 Waiver.......................................................................32

Section 15.5 Notices......................................................................32

Section 15.6 Force Majeure................................................................33

Section 15.7 Publicity....................................................................33

Section 15.8 Governing Law................................................................34

Section 15.9 Including....................................................................34

Section 15.10 Schedules and Exhibits.......................................................34

Section 15.11 Captions.....................................................................34

Section 15.12 Counterparts.................................................................34

Section 15.13 SoftWatch, Ltd as Party......................................................34

Section 15.14 Right of Offset..............................................................34



Exhibit 1.1 LICENSED SOFTWARE.....................................................................36

Exhibit 1.2 SPECIFICATIONS........................................................................39

Exhibit 1.3 THE CO-BRANDED DIET CENTER SPECIFICATIONS.............................................42

Exhibit 9.3 MEDSCAPE COMPETITIVE BUSINESSES.......................................................44



INDEX OF DEFINED TERMS..................................................................................46



LICENSE AND WEB SITE DEVELOPMENT AGREEMENT





This LICENSE AND WEB SITE DEVELOPMENT AGREEMENT (this "Agreement") is made as of June 15, 1999 (the "Effective Date"), between MEDSCAPE, INC., a Delaware corporation, with offices at 134 W. 29th Street, New York, New Y ork 10001-5399 ("Medscape"), SOFTWATCH INC., a Delaware corporation, with offices at 67 South Bedford St., Burlington, MA 01803 ("SoftWatch" and together with Medscape, collectively, the "Parties," and each a "Party"), and solely with respect to the provi s ions of Article 9 (Non-Compete, Confidentiality), Section 10.2 (Representations and Warranties), and Article 14 (Guaranty), SOFTWATCH, LTD., a corporation organized under the laws of Israel, with offices at 1 Ta'as Street, Ramat-Gan 52512, Israel, and the direct parent of wholly-owned subsidiary SoftWatch ("SoftWatch, Ltd."). Unless otherwise specified herein, capitalized terms used in this Agreement have the meanings defined in this Agreement and the Schedules and Exhibits hereto.



ARTICLE 1. LICENSE OF SOFTWARE, CUSTOMIZATIONS; DIETWATCH WEBSITE



Section 1.1 (a) SoftWatch Software License Grant. Subject to Section 9.3 and the other terms and conditions of this Agreement, SoftWatch grants to Medscape and its Affiliates during the Te rm a non-exclusive, worldwide license (the "SoftWatch Software License"):



(i) to use, execute and display on the Medscape Consumer Site and the

Co-Branded Diet Center SoftWatch's end-user interactive healthcare

tools identified on Exhibit 1.1 (the "End-User Tools"); and



(ii) to use, execute and display for and in connection with the development,

construction, enhancement and continuing operation and maintenance of,

the Medscape.com website, the Medscape Consumer Site and the Co-Branded

Diet Center SoftWatch's content creation, data management, display and

other tools identified on Exhibit 1.1 (the "Creation Tools," and

together with the End-User Tools, collectively the"SoftWatch

Software"), in each case at any location or locations around the world.



In addition:



(x) SoftWatch agrees that the foregoing grant of license with respect to

the End-User Tools includes the right of all end-users of the Medscape

Consumer Site and the Co-Branded Diet Center, wherever such end-users

are located, to use, execute and display the End-User Tools within and

in connection with services and functionalities made available in the

Medscape Consumer Site and the Co-Branded Diet Center; and the foregoing grant of license with respect to the

End-User Tools includes the right of any and all of Medscape's

employees, contractors and agents (including any operator or host of

the Medscape Consumer Site and/or the Co- Branded Diet Center),

wherever such employees, contractors and agents are located, to use,

display and execute the End-User Tools in connection with the

development, construction, operations, maintenance, and hosting of the

Medscape Consumer Site and/or the Co-Branded Diet Center; and



(x) the foregoing grant of license with respect to the Creation Tools

includes the right of any and all of Medscape's employees, contractors

and agents (including any operator or host of the Medscape.com website,

the Medscape Consumer Site and/or the Co-Branded Diet Center), wherever

such employees, contractors and agents are located, to use, display and

execute the Creation Tools in connection with the development,

construction, operations, maintenance, and hosting of the Medscape.com

website, the Medscape Consumer Site and/or the Co-Branded Diet Center.



(b) Medscape Consumer Site Defined. As used in this Agreement the "Medscape Consumer Site" means: (i) Medscape's principal publicly available website on the Internet containing med ical and healthcare information which Medscape makes available to consumers or other members of the general public, and (ii) all other eHealth service sites or other commercial on-line service sites (whether or not mainly providing healthcare news, inform a tion and/or related tools or features) on or available through the Internet (including such as may be made available to private entities and individuals in connection with a customized "intranet" service) which contain Medscape's proprietary marks and con tain substantially all the content and functionality as Medscape's principal publicly available website on the Internet referred to above.



(c) Internet Defined. For purposes of this Agreement, "Internet" means the public collection of com puter networks referred to generally as the "internet" as in existence on the date hereof and any evolution thereof or successor network thereto, and includes privately available computer networks connected to the Internet (e.g. so-called "intranets") or w hich use (x) Internet standards and/or (y) other use standards which are compatible with, or essentially similar in functionality to, such networks (including websites, HTML or other similar delivery systems). The term "Internet" shall also mean and inclu de any and all other commercial on-line services, whether or not based on Internet compatible use standards such as HTML.



(d) SoftWatch Software Further Defined. The term "SoftWatch Software" shall be deemed to mean and include all enhanc ements, modifications, customizations and corrections to the SoftWatch Software made by or on behalf of SoftWatch during the Term, including as part of the Customization Services referred to in Section 1.2 or the Maintenance Services referred to in Sectio n 5.1. The term "SoftWatch Software" shall



expressly exclude new modules or other developments which add to, or substantially increase the functionality of, the SoftWatch Software which SoftWatch generally makes available to third parties for an additional license fee, unless Medscape has agreed to license the same and pay to SoftWatch any such additional license fee.



(e) Licence For Use in Connection with Multiple Sclerosis. It is expressly understood and agreed by the parties that the S oftWatch Software License is intended by the Parties to include Medscape's right to use, on all the terms and conditions set forth in this Section 1.1, the SoftWatch Software in connection with a specific disease channel on the Medscape Consumer Site dedi c ated to the medical condition Multiple Sclerosis. If by September 30, 1999 SoftWatch: (i) is unable to secure the necessary rights to permit Medscape to use the SoftWatch Software in relation to a specific disease channel for Multiple Sclerosis on all the terms and conditions set forth in this Section 1.1, or (ii) otherwise to secure, at SoftWatch's expense, the license to Medscape of a functional equivalent of the SoftWatch Software satisfactory to Medscape (in its sole discretion) which can be used in a s pecific disease channel on the Medscape Consumer Site for Multiple Sclerosis on all the terms and conditions set forth in this Section 1.1, then SoftWatch shall pay to Medscape (x) on September 30,1999 an amount equal to $125,000, and (y) on September 30, 2000 an amount equal to $100,000, provided, however, that if at any date after September 30, 1999, but prior to September 30, 2000, SoftWatch is able to secure the rights contemplated in clause (i) or (ii) above, and Medscape elects (in its sole discretio n) to accept a license of such rights, then SoftWatch shall have no obligation to make the payment of $100,000 referred to in the foregoing clause (y).



(f) Copying. Medscape may not copy the SoftWatch Software except as necessary for main tenance, backup, test and disaster recovery purposes, or as otherwise authorized or permitted by SoftWatch. Notwithstanding the foregoing, Medscape may, without the consent of SoftWatch, make non-revenue generating demonstration copies of the SoftWatch So f tware for use in connection with Medscape's general marketing and promotion activities. This Agreement does not provide Medscape with title or ownership of the SoftWatch Software, but only a right of limited use. Subject to Article 7 and the terms of the SoftWatch Software License granted under this Agreement, SoftWatch retains sole and exclusive ownership of, and all right, title and interest in and to the SoftWatch Software and all copies thereof.



Section 1.2 Customization Services. Sof tWatch agrees to perform customization services (the "Customization Services") in respect of the SoftWatch Software in accordance with the specifications, and subject to the delivery terms attached hereto as Exhibit 1.2 (the "Customization Specifications" ) . As used in this Agreement, "Customize," "Customized" and related words means the modeling of the existing SoftWatch Software for a specific use, purpose or application as provided in the relevant Customization Specifications, and the term "Customization " means any such SoftWatch



Software as so modeled. The Certification Testing procedures specified in Article 4 shall be applicable to any Customization to be delivered pursuant to this Agreement.



Section 1.3 DietWatch Site License. Subje ct to the terms of this Agreement, SoftWatch grants to Medscape a worldwide license during the Term to create, operate and maintain using the SoftWatch Software, and/or otherwise to incorporate and display within and in connection with the Medscape Consum e r Site, a version of SoftWatch's proprietary Internet web-site service known as "DietWatch.com," as modified in accordance with the specifications (the "Co-Branded Diet Center Specifications") set forth on Exhibit 1.3 attached hereto (the "Co-Branded Diet Center"). Except as otherwise provided in this Agreement, the term "Co-Branded Diet Center" shall be deemed to mean and include all enhancements, modifications, customizations and corrections to the Co- Branded Diet Center. The foregoing license shall be subject to the following additional terms, and such other terms as may be agreed by the Parties in the Co-Branded Diet Center Specifications:



(a) Exclusive Diet Center. Medscape agrees that the Co-Branded Diet Center

will be the exclusive weight management and dieting center for the

Medscape Consumer Site, provided, however that the foregoing shall not

limit or otherwise restrict Medscape from integrating third-party tools

or other software components not proprietary to SoftWatch in the

Co-Branded Diet Center;



(b) General Health and Wellness Center; Hyperlink. The Co-Branded Diet

Center will be maintained separate and apart from, and will contain

content distinct from that of, any "general health and wellness"

service or channel maintained on the Medscape Consumer Site (the

"General Health and Wellness Center"), provided, however, that the

General Health and Wellness Center may contain End-User Tools similar

to those contained in the Co-Branded Diet Center (e.g. a diary tool).

In addition, Medscape agrees that: (i) any such General Health and

Wellness Center shall be designed and maintained in such a manner as to

permit users thereof to directly link to the Co-Branded Diet Center if

they wish to access content and features specifically relating to

dieting and weight management or control, and (ii) the General Health

and Wellness Center will not be exclusively or primarily related to

dieting and/or nutrition.



(c) Branding. The Co-Branded Diet Center will be branded as the "Medscape

Diet Center powered by DietWatch.com" (or such other name and SoftWatch

product reference as may be mutually agreed by the Parties). The

DietWatch.com logo will be displayed at not less than 50% of the scale

of, and with substantially similar graphics, visibility and other

characteristics as, the "Medscape Diet Center" logo (or other Medscape

proprietary mark) in order to properly convey the co-branding of the

Co-Branded Diet Center.



(d) Member Information; All customer information (the "Member Information")

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