[LETTERHEAD OF NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.]
Prescription Benefit Manager
June 16, 1998
Xx. Xxxx X. Xxxxxxx
Sandata, Inc.
00 Xxxxxx Xxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
Dear Xx. Xxxxxxx:
From time to time prior to the date hereof, Sandata, Inc. ("Sandata") and
National Medical Health Card Systems, Inc. ("Health Card") have entered into one
or more verbal or written agreements (collectively "Agreements") pursuant to
which, among other things, Sandata developed certain computer software and
related documentation (collectively "Software") for Health Card. This letter
agreement (the "Letter Agreement") supersedes and is an amendment to the
Agreements.
1. Notwithstanding anything contained in the Agreements, all ideas,
processes, methods, devices, business concepts, Software, inventions,
improvements, discoveries, know-how and other creative achievements (hereinafter
referred to collectively as "Discoveries") which were produced and/or developed
by Sandata and all patent, copyright, trademark, trade secret and other
proprietary rights in all Discoveries created by (i) Sandata or (ii) Sandata and
Health Card jointly, during the course of the Agreements, was and is hereby
deemed the property of Health Card. Sandata agrees to sign and execute, and will
require its personnel to sign and execute, all assignments and other documents
necessary to convey and vest the entire right, title, and interest in such
property in Health Card, or its successors and assigns at Health Card's request,
and to do all lawful acts and sign all assignments and other papers Health Card
reasonably requests relating to applications for patents, copyrights,
trademarks, trade secrets and other proprietary rights throughout the world, in
the providing of protection of Health Card's interest in such property.
2. Sandata will defend at its own expenses and will hold Health Card
harmless from all claims, suits, proceedings. losses, damages, deficiencies,
liabilities, exposure, penalties actions, investigations, demands, assessments,
audits, fines and judgments relating to any patent, copyright, trademark, trade
secret or other intellectual property rights of a third party anywhere
throughout the world asserted or brought against Health Card, based on a claim
that any Discovery developed by Sandata for Health Card, or Sandata and Health
Card jointly, during the course of its performance under Agreements constitutes
an infringement of any patent, copyright, trademark, trade secret or other
intellectual property rights through the world. Health Card shall provide prompt
written notice to Sandata of any such claim; provided, however, that the failure
to give such notice shall not be deemed a waiver or otherwise limit Health
Card's rights to indemnification hereunder. Sandata shall not, without the prior
written consent of Health Card, consent to the entry of any judgment against
Health Card or enter into any settlement or compromise which does not include,
as an
unconditional term thereof (i.e., there being no requirement that Health Card
pay any amount of money or give any other consideration), the giving by the
claimant or plaintiff to Health Card of a release in form and substance
satisfactory to the Health Card from all liability in respect of such claim or
litigation. Sandata will not be responsible for any compromise made without its
consent, which shall not be unreasonably withheld or delayed. If such discovery
is held to constitute infringment and its use is enjoined, Sandata may, at its
election and expense, either obtain for Health Card the right to continue using
such Discovery, modify it so that it is not infringing, or accept Health Card's
return of the Discovery and grant Health Card a credit thereafter. Sandata will
not be liable to Health Card for indemnity to the extent that a claim of
infringement is based upon the use of such Discovery in combination with
equipment, other Discovery, or other devices for which such Discovery was not
designed. Sandata hereby consents to jurisdiction in any forum in which Health
Card may be sued on a claim subject to indemnification under this Letter
Agreement.
3. Sandata hereby represents and warrants that the Software is compatible
with Health Card's computer system (the "System") so that all functions of the
System will be able to utilize the Software both prior to and following January
1, 2000. Health Card shall not experience termination errors and/or invalid
and/or incorrect results from the Software in the operation of Health Card's
business. To ensure year 2000 compatibility, the design and performance
capability of the Software includes, but shall not be limited to, date data
century recognition, calculations which accommodate same century and
multi-century formulas and date values, and date data interface values which
reflect the correct century. In the events that at any time the Software is
found by Health Card not to function as required as a result of the date change
from December 31, 1999 or any date prior thereto to January 1, 2000 or any date
thereafter, notwithstanding any other obligation of Sadata contained in this
Agreement, at no additional charge to Health Card, Sandata shall immediately
upon receipt of a report form Health Card, correct any such defect so at to
enable the Software to fully function as required.
4. This Letter Agrement constitutes the entire agreement of the parties
with respect to the subject matter hereof.
5. This Letter Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and assigns.
6. No change, modification, amendment, addition, waiver or termination of
this Letter Agreement or any part thereof shall be valid unless in writing and
signed by or on behalf of the party to be charged therewith.
7. This Letter Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.
8. This Letter Agreement shall be governed by, and interpreted and
construed in accordance with, the laws of the State of New York, excluding
choice of law principles thereof. In the event any clause, section or part of
this Agreement shall be held or declared to be void, illegal or invalid for any
reason, all other clauses, sections or parts of this Letter Agreement
[ILLEGIBLE]
[LOGO]
effected without such void, illegal or invalid clause, section or part shall
nevertheless continue in full force and effect.
9. Sandata agrees that it has held, and at all times hereafter will hold in
a fiduciary capacity and in strict confidence all information, data and
documents received from Health Card with respect to the Agreements and this
Letter Agreement (collectively, "Information") and will not, without the consent
of Health Card, use or disclose, directly or indirectly, the Information in any
manner whatsoever, in whole or in part. Notwithstanding the foregoing, the
obligations under this Section 9 to maintain such confidentiality shall not
apply to any Information (a) that is in the public domain at the time furnished
by Health Card, (b) that becomes in the public domain thereafter through any
means other than as a result of any act of Sandata or of its agents, officers,
directors or shareholders which constitutes a breach of this Letter Agreement,
or (c) that is required by applicable law to be disclosed.
[LOGO]
Please acknowledge your agreement to the foregoing by countersigning a copy
of this letter in the space provided and returning it to the undersigned.
Very truly yours,
NATIONAL MEDICAL HEALTH CARD
SYSTEMS, INC.
By: Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
(Please Print)
Title: President
AGREED TO AND ACCEPTED:
SANDATA, INC.
By: /s/ Xxxx X. Xxxxxxx
---------------------
Name: XXXX X. XXXXXXX
(Please Print)
Title: Chairman
[LOGO]
