License & Product Development

CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY

WITH THE SECURITIES AND EXCHANGE COMMISSION.

ASTERISKS DENOTE OMISSIONS.







LICENSE AND PRODUCT DEVELOPMENT AGREEMENT





This AGREEMENT is made as of July __, 1999 (the "Effective Date"), between MEDSCAPE, INC., a Delaware corporation with offices at 134 W. 29th Street, New York, New York 10001-5399 ("Medscape" ) and NATIONAL DATA CORPORATION, a Delaware corporation with offices at National Data Plaza, Atlanta, Georgia 30329 ("NDC" and together with Medscape, collectively, the "Parties," and each a "Party"). Unless otherwise specified herein, capitalized terms u sed in this Agreement have the meanings defined in this Agreement and the Schedules and Exhibits hereto.



WHEREAS, Medscape is in the business of, and has substantial skills and experience in, developing, providing and managing on-line clinical and healthcare information.



WHEREAS, NDC is in the business of, and has substantial skills and experience in, electronic data interchange products and services and data management.



WHEREAS, subject to the terms a nd conditions of this Agreement, Medscape and NDC wish to cooperate (x) to market each other's products and services, and (y) to jointly develop, market and distribute certain clinical practice management and healthcare-related, electronic data interchang e services to physicians, allied healthcare professionals, pharmaceutical manufacturers, consumers and pharmacists.



WHEREAS, subject to the terms and conditions of this Agreement, Medscape and NDC further desire to set forth the terms on which (x) NDC may act as Medscape's preferred clinical data interchange and data management services partner, and (y) Medscape may act as NDC's preferred healthcare clinical content and information services partner.



NOW, THEREFORE, in co nsideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable consideration the receipt of which is hereby acknowledged, the Parties hereby agree as follows: ARTIC LE I

DEFINED TERMS



Section 1.1 As used in this Agreement, the following terms shall have the following meanings:



"Affiliate," as to any Party, means any Person directly or indirectly c ontrolling, controlled by or under common control with such Party, and shall include any officer, director and partner of any such Party. A Party shall be deemed to control another Person if it owns or has the power to exercise voting rights with respect to more than 50 percent of the voting securities of such other Person.



"Agreement" means this License and Product Development Agreement, as modified, supplemented, restated or amended from time to time.



"AMA" has the meaning provided in Section 2.1(f).



"AMA License" has the meaning provided in Section 15.1(b).



"AMA Sublicense" has the meaning provided in Section 2.1(a).



"Confidential Information" has the meaning provided in Section 14.2.



"EDI Services" has the meaning provided in Section 9.1



"EDI Services Commission" has the meaning provided in Exhibit 11.1



"Effective Date" has the meaning provided in the preamble hereto.



"HCC Services" has the meaning provided in Section 9.2.



"Healthcare Clinical Content" means (i) any clinical content derived from any Person whose primary business involves the provision of healthcare info rmation on the internet substantially similar to healthcare information on any Medscape Website, or (ii) any clinical content that is substantially similar to healthcare information offered on any Medscape Website.



"Independent Auditor" has the meaning provided in Section 11.4.



"Intellect Database" has the meaning provided in Section 2.1(a).



"Intellect License" has the meaning provided in Section 2.1(a).





"Jointly Developed Products" has the meaning provided in Section 6.1(a) below.



"Losses" has the meaning provided in Section 15.3.



"LYTEC," "LYTEC 99," and "LYTEC 99 Specifications" have the respective meanings provided in Section 3.1.



"LYTEC 99 Exclusivity Period" has the meaning provided in Section 3.2(c).



"LYTEC/Web" and "LYTEC/Web Specifications" have the respective meanings provided in Section 4.1.



"LYTEC/Web Exclusivity Period" has the meaning provided in Section 4.2(b).



"Medscape" has the meaning provided in the preamble hereto.



"Medscape Content" means Medscape's proprietary data and content, including text and visual material regarding itself, Medscape products, services, pricing, Medscape Trademarks, and any conditions of use (including proprietary notices).



"Medscape Materials" has the meaning provided in Section 12.2.



"Medscape Reporting Period" has the meaning provided in Section 11.3.



"Medscape Website" means any website now or hereafter owned or operated by Medscape, including the website currently located at www.medscape.com.



"NDC" has the meaning provided in the preamble hereto.



"NDC Distribution Commissions" has the meaning provided in Exhibit 11.1.



"NDC Healthcare Products" means, collectively, LYTEC 99, LYTEC/Web and the Other NDC Products, or any of them.



"NDCHIS" has the meaning provided in Section 15.1(b).



"NDC Materials" has the meaning provided in Section 12.1.



"NDC Reporting Period" has the meaning provided in Section 11.5.





"Notified Party" has the respective meanings provided in Section 9.1 and Section 9.2.



"Offering Party" has the respective meanings provided in Section 9.1 and Section 9.2.



"Other NDC Products" has the meaning provided in Section 5.1.



"Party" and "Parties" have the respective meanings provided in the preamble hereto.



"Person" means any individual, corporation, partnership, limited liability company, joint venture, trust, business association or other entity, including any governmental entity.



"Products" has the meaning provided in Section 7.1.



"R&D Pipeline Information" has the meaning provided in Section 6.1(c).



"Services" has the meaning provided in Section 7.1.



"Shared Materials" has the meaning provided in Section 12.3.



"Shares" has the meaning provided in the Stock Purchase Agreement.



"Specifications" means, collectively, (i) the LYTEC 99 S pecifications, (ii) the LYTEC/Web Specifications, (iii) any other specifications agreed by the Parties pursuant to this Agreement as to a product or service to be developed hereunder, and (iv) as the context requires, any of them.



"Stock Purchase Agreement" means that certain Stock Purchase Agreement, dated as of the date hereof, between Medscape and NDC, as the same is in effect from time to time.



"Term" has the meaning provided in Section 16.1.



"Trademarks" means, collectively, trademarks, service marks, trade names, logos and other similar proprietary rights, and as the context requires, any of them.











ARTICLE II

NDC INTELLECT DATABASE





Section 2.1 (a) Intellect Database License Grant. Subject to the terms and conditions of this Agreement, NDC grants to Medscape during the Term a non-exclusive, perpetual, fully paid, non-assessable license (the "Intellect License") to access (via internet and/or other means), to use, and to execute only for Medscape's and its wholly-owned subsidiaries' internal purposes (and not for public display), all the information and data embodied in the elements of NDC's Intellect Q&A databas e described on Exhibit 2.1(a)-1 (as such information and data may be enhanced, updated, modified or corrected from time to time, the "Intellect Database"). Medscape's use of the Intellect Database shall be subject to the terms and conditions of the AMA lic e nse agreement attached hereto as Exhibit 2.1(a)-2, which Medscape shall, subject to Section 2.1(f) below, execute and deliver to NDC contemporaneously with the execution of this Agreement (the "AMA Sublicense"). Medscape shall be responsible for all of it s telecommunications charges associated with Medscape's access to the Intellect Data via the internet or other means.



(b) Scope of License. The Intellect License does not include, and Medscape shall not have the right of access to informa tion and data embodied in the Intellect Database which pertains to territories, locations, activities, products or individuals outside of the United States of America, unless such information and data is subsequently licensed by NDC to Medscape.



(c) Update Services NDC will update the repository for the Intellect Database on a monthly basis. NDC will advise Medscape of the date on which such periodic updates customarily occur, and whether the Intellect Database will at any time become un available for any extended period as a result of such updates or otherwise.



(d) Cooperation; New Market Research Products. During the Term, NDC and Medscape agree to work together and cooperate in good faith to identify and develop new ma rket research products that combine Medscape's database information and the Intellect Database. The development of any such products shall be subject to the Parties' agreement as to Specifications as provided in Article VIII and as to intellectual propert y rights as provided in Article XII.



(e) Updates, Modifications; Copying; Corrections. During the Term, Medscape shall be entitled to receive and/or have access to the most current version or compilation of the Intellect Database which ND C has available and uses for its own internal purposes, and has the right to use the same pursuant to the terms of Section 2.1(a). Medscape may not copy the Intellect Database except as necessary to effectuate its license under Section 2.1(a), or for main tenance, backup, test and disaster recovery





purposes. If, at any time during the Term, the Intellect Database (or the media on which it is contained) (x) fails through no fault of Medscape to perform in a reasonably effective and consistent manner, or (y) is found to contain any material error, bug, virus or other material defect, then in either case, NDC will correct such failure to perform, material error, bug, virus or other material defect at no charge to Medscape or, if unable to do so, within forty- five (45) days, will refund to Medscape a pro-rata portion of the Intellect License Fee (such proration to be based on the Initial Term).



(f) Approval for AMA Sublicense. The Parties recognize that, pursuant to the terms of the AMA Licens e, the consent of the American Medical Association ("AMA") may be required in connection with, and as a condition to the effectiveness of, the AMA Sublicense. Promptly upon execution hereof, NDC shall exercise (or cause its Affiliates to exercise) best ef f orts to obtain any such consent, which consent shall, in all events, be sufficient, in Medscape's sole and absolute discretion, to secure the scope of use or uses of the AMA-PPD (as defined in the AMA Sublicense) required by Medscape. In the event that an y consent required by the AMA as a condition to the effectiveness of the AMA Sublicense cannot be or is not obtained by July 26, 1999, or such consent is not sufficient, in Medscape's sole and absolute discretion, to secure the scope of use or uses which i t requires, then the provisions of Section 1(b) of Exhibit 11.1 shall be applicable.





ARTICLE III.

LYTEC 99



Section 3.1 LYTEC 99. NDC will develop a new version of its proprietary LYTEC physician practice management software (the existing software (currently marketed as "Lytec Medical 98(TM)") is referred to as "LYTEC" in this Agreement, and the new version thereof referred to as "LYTEC 99") that will include Medscape Website integration capability developed in accordance with specifications and a project timetable to be mutually developed and agreed by the Parties (the "LYTEC 99 Specifications") by no later than August 1, 1999.



Section 3.2 LYTEC 99 Specifications and Terms. Unless NDC and Medscape otherwise agree, the following terms shall be applicable to LYTEC 99:



(a) Release Date. LYTEC 99 will be ready for full commercial release by no

later than September 30, 1999;



(b) Integration of Medscape. LYTEC 99 will include, and the LYTEC 99

Specifications will specify, an integrated web browser function, a

direct access function (via hotlink) to a Medscape Website, and an

optional internet service provider service.







(c) Exclusivity. From the Effective Date until September 30, 2000 (the

"LYTEC 99 Exclusivity Period"), NDC agrees that the Medscape Website

designated by Medscape will be the sole and exclusive website providing

Healthcare Clinical Content integrated into LYTEC 99. During the LYTEC

99 Exclusivity Period, NDC covenants that it will not integrate (or

permit, or enter into any discussions concerning, the integration of)

any Healthcare Clinical Content into LYTEC 99 other than the content

contained in the relevant Medscape Website designated by Medscape.



(d) Right of First Negotiation. NDC hereby grants Medscape the exclusive

right of first negotiation to extend the LYTEC 99 Exclusivity Period on

mutually agreeable terms. If Medscape wishes to extend the LYTEC

Exclusivity Period, it shall give notice to NDC to this effect not less

than one hundred and twenty (120) days prior to the end of the LYTEC 99

Exclusivity Period. Within a reasonable time after delivery of such

notice, the Parties shall in good faith meet or discuss as often as is

necessary to reach mutual agreement on specific extension terms. If no

agreement can be reached following good faith negotiations on or before

the end of the LYTEC 99 Exclusivity Period, either Party may elect by

written notice to the other to discontinue further discussions. From

the date on which Medscape gives notice of its intent to extend, and

until such time as the earlier of either the date on which the original

LYTEC Exclusivity Period Ends or the date on which good faith

negotiations between the Parties are discontinued as aforesaid, NDC

covenants and agrees that it shall not enter into any discussions with,

or make any offer to, any third party with respect to the integration

of any website providing Healthcare Clinical Content into LYTEC 99. If

Medscape does not give notice to NDC of its desire to extend the LYTEC

99 Exclusivity Period Agreement at least ninety (90) days prior to the

end of the LYTEC 99 Exclusivity Period, Medscape will be deemed to have

waived its right of first negotiation under this Section 3.2(d), and

NDC shall be free to negotiate with third parties.



Section 3.3 License. For purposes of integrating the relevant Medscape Website in LYTEC 99, Medscape grants t o NDC during the Term a non-exclusive, royalty free, fully paid and non-assessable license, to use, execute and display, and/or otherwise to incorporate and display within LYTEC 99, such of Medscape's computer programs (such as Java applets), Trademarks, d esigns, content and other intellectual property as Medscape may deem necessary or appropriate to fully effect the integration of such Medscape Website into LYTEC 99. The foregoing license shall be subject to the other terms of this Agreement and such othe r terms as may be agreed by the Parties in the LYTEC 99 Specifications.









ARTICLE IV

LYTEC/WEB.



Section 4.1 LYTEC/Web. NDC intends to develop a fully web-enabled vers ion of LYTEC (hereinafter referred to as "LYTEC/Web") that will include Medscape Website integration capability developed in accordance with specifications and a project timetable to be mutually developed and agreed by the Parties (the "LYTEC/Web Specific ations").



Section 4.2 LYTEC/Web Specifications and Terms. If LYTEC/Web is developed by NDC, the following terms shall be applicable to LYTEC/Web unless NDC and Medscape otherwise agree:



(a) Specifications. LYTEC/Web will include, and the LYTEC/Web

Specifications will specify: (i) a direct access function (via hotlink)

to a Medscape Website designated by Medscape; (ii) in-context,

integrated links to such Medscape Website from within the point-of-care

clinical features of LYTEC/Web (e.g., relevant Medscape content will be

automatically displayed when users insert ICD-9 codes); (iii)

navigational features, such as hypertext links, permitting direct

access to LYTEC/Web from within such Medscape Website; and (iv) a

feature permitting individual users to select a Medscape Website

specialty page.



(b) Exclusivity. Subject to Section 4.2(c) below, from the Effective Date

and until September 30, 2000 (the "LYTEC/Web Exclusivity Period"), NDC

agrees that the Medscape Website which Medscape designates will be the

sole and exclusive website providing Healthcare Clinical Content

integrated into LYTEC/Web. During the LYTEC/Web Exclusivity Period, NDC

covenants that it will not integrate (or permit, or enter into any

discussions concerning, the integration of) any website providing

Healthcare Clinical Content into LYTEC/Web other than such Medscape



(c) Right of First Negotiation. NDC hereby grants Medscape the exclusive

right of first negotiation to extend the LYTEC/Web Exclusivity Period

on mutually agreeable terms. If Medscape wishes to extend the LYTEC/Web

Exclusivity Period, it shall give notice to NDC to this effect not less

than one hundred twenty (120) days prior to the end of the LYTEC/Web

Exclusivity Period. Within a reasonable time after delivery of such

notice, the Parties shall in good faith meet or discuss as often as is

necessary to reach mutual agreement on specific extension terms. If no

agreement can be reached following good faith negotiations on or before

the end of the LYTEC/Web Exclusivity Period, either Party may elect by

written notice to the other to discontinue further discussions. From

the date on which Medscape gives notice of its intent to extend, and

until such time as the earlier of either the date on which the original

LYTEC/Web Exclusivity Period Ends or the date on which good





faith negotiations between the Parties are discontinued as aforesaid,

NDC covenants and agrees that it shall not enter into any discussions

with, or make any offer to, any third party with respect to the

integration of any website providing Healthcare Clinical Content into

LYTEC/Web. If Medscape does not give notice to NDC of its desire to

extend the LYTEC/Web Exclusivity Period at least ninety (90) days prior

to the end of the LYTEC/Web Exclusivity Period, Medscape will be deemed

to have waived its right of first negotiation under this Section

4.2(c), and NDC shall be free to negotiate with third parties.



Section 4.3 License. If LYTEC/Web is developed by NDC, for purposes of integrating a Medscape Website to be designated by Medscape in LYTEC/Web, Medscape agrees that it shall grant to NDC during the Term a non-exclusive, royalty free, f ully paid and non-assessable license to use, execute and display, and/or otherwise to incorporate and display within LYTEC/Web, such of Medscape's computer programs (such as Java applets), Trademarks, designs, content and other intellectual property as Me d scape may deem necessary or appropriate to fully effect the integration of such designated Medscape Website into LYTEC/Web. The foregoing license shall be subject to the other terms of this Agreement and such other terms as may be agreed by the Parties in the LYTEC/Web Specifications.





ARTICLE V

WEB-ENABLING OF OTHER NDC PRODUCTS.



Section 5.1 Web-Enabling of Other NDC Products. NDC also intends to develop (or has already develope d) and make available separately, or in bundled packages, web-enabled versions of its products known as NDC Connect, NDC Assist, Intellect Q&A, Practice Analyzer, Medication Manager, and certain credit card services (such products as so enabled, collectiv e ly, the "Other NDC Products"). Subject to the Parties' agreement as to Specifications pursuant to Article VIII, and the other terms and conditions of this Agreement, the Parties intend that any web-enabled Other NDC Products may be modified to include an integrated function permitting users thereof to directly access a Medscape Website designated by Medscape, and that such Medscape Website may include navigational features, such as hypertext links, permitting direct access to Other NDC Products.





ARTICLE VI

JOINTLY DEVELOPED PRODUCTS.



Section 6.1 Jointly Developed Products. (a) General Terms. Subject to Article VIII and the other terms and conditions of this Agreement, NDC and Medscape intend and agree to work together and cooperate in good faith during the Term to jointly





identify market opportunities and, based on such opportunities, if any, to jointly develop, market and sell new products (collectively, the "Jointly Develop ed Products"). The Parties will agree at the time of development of any Jointly Developed Products on appropriate compensation levels, ownership interests, and licenses for each Jointly Developed Product. Jointly Developed Products may include (x) new, we b -enabled versions of products and applications that will be integrated with various features and functions of a Medscape Website which Medscape designates; (y) new products and applications targeted at the consumer market; and (z) database and data manage ment projects and products targeted at pharmaceutical manufacturers. The Jointly Developed Products may include products that integrate Medscape content and databases and NDC products and databases.



(b) Consumer Products. Jointly Develope d Projects for the consumer audience may include NDC's prescription adherence/compliance tool called Care Alert, which the Parties acknowledge will initially target consumers and the prescription refill market. If the Parties mutually agree, Care Alert ma y also target the physicians market by leveraging other NDC and Medscape tools and services. The Parties further acknowledge that the consumer-based Care Alert product is currently in prototype and is expected to launch in the third quarter of 1999.



(c) R&D Pipeline Associated with Clinical Trials. NDC agrees to license to Medscape, and Medscape shall have the right to incorporate, R&D Pipeline Information for use within a Medscape Website designated by Medscape, and/or as part of a broad e r consumer/physician clinical trials product, possibly in partnership with third-party clinical research organizations involved in providing clinical trials support, services and products. As used herein, "R&D Pipeline Information" includes information ab out the therapeutic use, product name, generic name, company name, stage of development and source abstracts of, and NDC's comments regarding, drugs in development, as more particularly described on Exhibit 6.1(c).



ARTICLE VII

OPERATING GUIDELINES AND DEDICATED RESOURCES

APPLICABLE TO ALL PRODUCTS AND SERVICES



Section 7.1 Operating Guidelines and Dedicated Resources. The Parties agree that the following general prin ciples and operating guidelines will be applicable to each of the products and services described in this Agreement to be developed or in development by NDC, Medscape or the Parties jointly (including LYTEC 99, LYTEC/Web, and any market research product r e lating to the Intellect Database) (collectively, the "Products" and "Services"): (a) each of the Parties will assign at least one project manager to the development and deployment of Products and Services; (b) joint senior level management reviews involvi ng representatives from both Parties will be held at least





monthly during the Term; and (c) each Party shall provide personnel and resources at its sole cost and expense unless otherwise agreed.





ARTICLE VIII

DEVELOPMENT OF SPECIFICATIONS;

ADDITIONAL TERMS APPLICABLE TO ALL

PRODUCTS AND SERVICES.



Section 8.1 Development of Product Specifications; Agreement as to Terms. Each Pro duct or Service to be jointly developed pursuant to this Agreement shall be based upon detailed, written Specifications to be mutually agreed by the Parties, as evidenced by written agreements executed by authorized officers of the Parties. Upon such agre e ment, such Specifications shall be deemed appended to and shall form part of this Agreement, and shall be binding on ...