Exhibit 5
EXECUTION COPY
Confidential materials omitted and filed
separately with the Securities and Exchange
Commission. Asterisks denote such omission.
===============================================================================
OUTSOURCING AGREEMENT
dated as of October 10, 2005
among
NOVATION, LLC,
VHA INC.,
UNIVERSITY HEALTHSYSTEM CONSORTIUM,
HEALTHCARE PURCHASING PARTNERS INTERNATIONAL, LLC,
and
GLOBAL HEALTHCARE EXCHANGE, LLC
===============================================================================
TABLE OF CONTENTS
Page
1. DEFINITIONS................................................................2
2. SERVICE PROVIDER OBLIGATIONS...............................................9
2.1 Migration.............................................................9
2.1.1 Migration Plan...............................................9
2.1.2 Assumptions and Further Development.........................10
2.1.3 Migration Services..........................................10
2.2 Services.............................................................10
2.2.1 Pre-Migration Services......................................11
2.2.2 Post-Migration Services.....................................11
2.2.3 [*****] [*****] [*****].....................................11
2.3 Service Levels; Root-Cause Analysis..................................12
2.3.1 Service Levels..............................................12
2.3.2 Root-Cause Analysis.........................................12
2.4 [*****]..............................................................13
2.5 Service Provider's Interaction with Members; Pre-Existing Data
and Service Arrangements...........................................13
2.5.1 Member-Facing Plan..........................................13
2.5.2 Members Using Service Provider prior to the Effective Date..13
2.5.3 Maintenance of [*****]......................................14
2.5.4 Participation of Additional and Renewal Members.............14
2.6 Data From Suppliers..................................................15
2.6.1 [*****].....................................................15
2.6.2 Product Data................................................16
2.6.3 [*****].....................................................16
2.7 Knowledge Sharing....................................................16
2.8 Communications with Novation and Alliances...........................16
2.8.1 Notice of Materially Adverse Facts..........................16
2.8.2 Reports.....................................................16
2.8.3 Regular Meetings............................................17
2.9 Goals and Incentives.................................................17
3. THE GHX EXCHANGE...........................................................17
3.1 Maintenance as Leading Provider......................................17
3.2 User Registration....................................................18
3.2.1 NPS.........................................................18
3.2.2 GHX Exchange................................................18
3.2.3 Novation Marketplace........................................19
3.3 Notice of Novation Contracts.........................................19
3.4 Provision of Product Information.....................................20
3.4.1 Provision of Non-Novation Contract Product Information......20
3.4.2 Provision of Novation Contract Product and [*****]..........20
3.5 Removal of Materials and Products from NPS...........................20
3.5.1 Removal of Materials........................................20
3.5.2 Removal of Products.........................................20
3.6 Other GPOs...........................................................20
3.7 Reasonable Assistance................................................21
4. NOVATION PROPRIETARY SERVICES AND CHANGES IN SERVICES......................21
4.1 Novation Proprietary Services........................................21
4.2 Change Control for Novation Proprietary Services.....................21
4.2.1 Change Control Procedure....................................21
4.2.2 Adjustment in [*****].......................................22
4.2.3 Emergency Changes...........................................22
5. SERVICE PROVIDER EXCLUSIVITY...............................................22
5.1 Exclusivity..........................................................22
5.2 Marketing Other Services To Members..................................22
6. LICENSES...................................................................22
6.1 Marks................................................................22
6.2 Service Provider Materials...........................................23
6.3 Novation Materials...................................................23
6.4 Licenses; Source Code Escrow; Proprietary Rights.....................23
6.4.1 Access License..............................................23
6.4.2 License to Service Provider.................................24
6.4.3 Grant of Source Code License................................24
6.4.4 Third Party Technology......................................26
6.4.5 Source Code Escrow..........................................26
6.4.6 Proprietary Rights; Restrictions............................28
7. FEES AND TAXES.............................................................28
7.1 Fees.................................................................28
7.2 Taxes................................................................29
7.3 Other Expenses.......................................................29
7.4 Payment Terms........................................................29
7.4.1 Invoices....................................................29
7.4.2 Payments....................................................29
7.4.3 Credits.....................................................29
7.5 Member-Based Pricing.................................................29
7.5.1 Conversion to Member-Based Pricing..........................29
7.5.2 [*****] Member-Based Pricing................................30
8. TERM AND TERMINATION.......................................................30
8.1 Initial Term.........................................................30
8.2 Renewal and Extension of Term........................................30
8.3 Termination for Cause or Dissolution.................................30
8.3.1 For Cause...................................................30
8.3.2 [*****] [*****].............................................31
8.3.3 Termination of Merger Agreement.............................31
8.4 Termination for Insolvency Events....................................31
8.4.1 Service Provider Insolvency Event...........................31
8.4.2 Novation Insolvency Event...................................32
8.4.3 [*****] [*****] [*****] [*****].............................32
8.5 Termination Upon Service Provider Change of Control..................33
8.6 Return of Materials..................................................33
8.7 Survival.............................................................34
8.8 Termination Assistance Services......................................34
8.9 Equitable Remedies...................................................34
9. DATA RIGHTS; INTELLECTUAL PROPERTY........................................34
9.1 Data Rights..........................................................34
9.1.1 Member Data.................................................34
9.1.2 Transaction Data............................................35
9.1.3 Aggregated GHX Data.........................................35
9.1.4 Aggregated Alliance Member Data.............................36
9.1.5 Product Data................................................36
9.2 Analytic Data........................................................36
9.3 No Other Licenses or Use.............................................36
9.4 Ownership by Third Parties...........................................36
9.5 Intellectual Property................................................37
9.5.1 Deliverables................................................37
9.5.2 Proprietary Rights; Restrictions............................37
10. SAFEGUARDING OF DATA; CONFIDENTIALITY.....................................38
10.1 Confidentiality......................................................38
10.1.1 Confidential Information....................................38
10.1.2 Confidentiality Obligations.................................38
10.1.3 Exclusions..................................................38
10.1.4 No License..................................................39
10.1.5 Loss of Confidential Information............................39
10.2 Safeguarding of Data.................................................39
10.3 Business Associate Provisions........................................39
11. REPRESENTATIONS, WARRANTIES AND COVENANTS.................................40
11.1 Representations by Service Provider..................................40
11.1.1 Due Organization............................................40
11.1.2 Authority; Non-Contravention................................40
11.1.3 Performance.................................................41
11.1.4 Extension of Other Agreements...............................41
11.1.5 Source Code Escrow..........................................41
11.1.6 Agreements..................................................41
11.2 Representations by Novation, VHA, UHC and HPPI.......................42
11.2.1 Due Organization............................................42
11.2.2 Authority; Non-Contravention................................42
11.3 Compliance with Laws and Regulations; Other Covenants................43
11.3.1 Compliance with Laws........................................43
11.3.2 HHS and Comptroller General.................................43
11.3.3 No Exclusion or Debarment...................................44
11.3.4 No Exchange of Competitively Sensitive Information..........44
11.4 Warranty Disclaimer..................................................44
12. USE OF SUBCONTRACTORS; RIGHTS TO REQUEST REPLACEMENT......................45
12.1 Generally............................................................45
12.2 Right to Request Replacement.........................................45
12.3 Continuing Responsibility............................................45
12.4 Confidential Information.............................................45
13. INSURANCE.................................................................45
13.1 Insurance............................................................45
13.2 Proof of Insurance...................................................45
14. INDEMNITY.................................................................46
14.1 Service Provider Indemnity...........................................46
14.2 Novation Indemnity...................................................46
14.3 Infringement Claims..................................................47
14.3.1 Indemnity...................................................47
14.3.2 Indemnity Exclusions........................................47
14.3.3 Injunction or Prohibition...................................48
14.4 Indemnity Procedures.................................................48
14.5 Exclusive Remedy.....................................................48
15. LIMITATION OF LIABILITY...................................................48
16. AUDIT RIGHTS..............................................................49
16.1 General..............................................................49
16.2 Frequency of Audits..................................................49
16.3 Auditors.............................................................49
16.4 Record Retention.....................................................50
16.5 Cooperation..........................................................50
16.6 Overcharges and Undercharges.........................................50
16.7 Audit Reports........................................................50
17. DISPUTE RESOLUTION........................................................50
18. GENERAL PROVISIONS........................................................50
18.1 No Waiver............................................................50
18.2 Entire Agreement.....................................................50
18.3 Publicity............................................................51
18.4 Assignment; Successors and Assigns...................................51
18.5 Governing Law........................................................51
18.6 Notices..............................................................51
18.7 No Agency............................................................52
18.8 Force Majeure........................................................52
18.8.1 Performance Excused.........................................52
18.8.2 Period of Excused Performance...............................53
18.8.3 Critical Functions..........................................53
18.9 Severability.........................................................53
18.10 Counterparts........................................................53
18.11 Headings............................................................53
18.12 Section 365(n) Matters..............................................53
18.13 Additional Members..................................................54
18.14 Termination of Neoforma Outsourcing Agreement.......................54
19. [*****] OF [*****]........................................................54
19.1 [*****] and [*****] [*****].........................................54
19.2 [*****] and [*****] [*****].........................................54
19.3 [*****] of [*****]..................................................55
TABLE OF CONTENTS
(continued)
Page
EXHIBIT A: MIGRATION PLAN
EXHIBIT B: SCOPE OF SERVICES
EXHIBIT C: SERVICE LEVELS, METRICS AND PERFORMANCE CREDITS
EXHIBIT D: MEMBER-FACING PLAN
EXHIBIT E: FORM OF MEMBER AGREEMENT
EXHIBIT F: REPORTS AND METRICS
EXHIBIT G: REGISTRATION AND PASSWORD ISSUANCE AND PROTECTION PROCEDURES
EXHIBIT H: Intentionally Omitted.
EXHIBIT I: NOVATION'S TRADEMARK USAGE GUIDELINES
EXHIBIT J: SERVICE PROVIDER'S TRADEMARK USAGE GUIDELINES
EXHIBIT K: VHA'S, UHC'S AND HPPI'S TRADEMARK USAGE GUIDELINES
EXHIBIT L: Intentionally Omitted
EXHIBIT M: CERTAIN AGREEMENTS
EXHIBIT N: EXTENSION OF CERTAIN AGREEMENTS
EXHIBIT O: SERVICE PROVIDER GUIDING PRINCIPLES
EXHIBIT P: LETTER AGREEMENT
OUTSOURCING AGREEMENT
This Outsourcing Agreement ("Agreement") executed as of October 10,
2005 and effective as of the "Effective Time" as defined below, by and among
Global Healthcare Exchange, LLC, a limited liability company organized under
the laws of Delaware with offices at 00000 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxxx, XX 00000 ("Service Provider"), Novation, LLC, a Delaware limited
liability company with offices at 000 Xxxx Xxxx Xxxxxxxxx Xxxxxxx, Xxxxxx,
Xxxxx 00000 ("Novation"), Healthcare Purchasing Partners International, LLC, a
Delaware limited liability company with offices at 000 Xxxx Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxxx, Xxxxx 00000 ("HPPI"), VHA Inc., a Delaware corporation with
offices at 000 Xxxx Xxx Xxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxx 00000-0000 ("VHA"),
and University HealthSystem Consortium, an Illinois corporation with offices at
0000 Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxx 00000 ("UHC"). Capitalized
terms not otherwise defined herein shall have the respective meanings set forth
in Section 1 below.
RECITALS
WHEREAS, Service Provider is a provider of Internet e-commerce
services to the healthcare industry facilitating the sale, rental, lease and
license of new and used equipment, products, supplies, services, information
and other content, by allowing electronic orders to be placed and received for
the foregoing and by providing online information and analytic capabilities
regarding the foregoing;
WHEREAS, VHA and UHC are organizations whose Members are hospitals and
healthcare providers, and which view e-commerce services as an essential part
of their cooperative purchasing programs on behalf of their Members and desire
to cause such services to be available to their Members through this Agreement;
WHEREAS, VHA and UHC together own all the ownership interests in
Novation and HPPI;
WHEREAS, Novation is a contracting agent that also develops and
delivers supply chain management agreements, programs and services on behalf of
VHA and UHC and their Members;
WHEREAS, HPPI is a GPO that serves healthcare organizations that are
not members of VHA and UHC and other GPOs and which develops and delivers
supply-chain management programs and services to such healthcare organizations;
WHEREAS, the Parties desire to establish a relationship to enable the
Parties to achieve increased efficiency and cost savings through Internet-based
technology and pursuant to which Service Provider will provide the GHX
Exchange, the Novation Proprietary Services and other Services for the benefit
of the Members of VHA and UHC and the associated healthcare organizations of
HPPI;
WHEREAS, Novation, VHA, UHC and HPPI are parties to the Neoforma
Outsourcing Agreement and desire to transition the services provided thereunder
to Service Provider in accordance with this Agreement; and
WHEREAS, certain of the Parties have entered into the Merger Agreement
pursuant to which Neoforma will become a wholly-owned subsidiary of Service
Provider.
NOW, THEREFORE, for good and valuable consideration, the Parties agree
as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the
respective meanings set forth below. Other capitalized terms shall have the
meanings set forth elsewhere in this Agreement.
"Activation Event" has the meaning set forth in Section 6.4.3(d).
"Affiliate(s)" means, with respect to a specified Person, any other
Person that, directly or indirectly, through one or more intermediaries,
Controls, is Controlled by or is under common Control with such specified
Person. Service Provider, on the one hand, and Novation, VHA, HPPI and/or UHC,
on the other hand, shall not be Affiliates of each other.
"Aggregated Alliance Member Data" means a compilation prepared by or
on behalf of any Alliance consisting of Member Data with respect to any two or
more Members of the Alliance in question.
"Aggregated GHX Data" means a compilation prepared by Service Provider
of Transaction Data of Members and of non-Members (i.e., other customers of
Service Provider) concerning which Service Provider has taken commercially
reasonable precautions to ensure that no individual, particular transaction or
entity (including, without limitation, a Member or a GPO) can be identified.
"Agreement" has the meaning set forth in the Preamble.
"Alliance" means UHC, VHA or HPPI, as applicable.
"AllSource(R) Catalog" means the Product Data of multiple Suppliers,
organized according to the Classification Scheme.
"Analytic Data" means all or any portion of the information and data
created or generated from the analysis of Member Data and/or [*****] in
accordance with the terms hereof.
"Analytics" means the software or other functionality that enables a
User to review, analyze and/or report on Member Data and [*****].
"Change" has the meaning set forth in Section 4.2.1.
"Change Request" has the meaning set forth in Section 4.2.1.
___________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-2-
"Charges" has the meaning set forth in Section 7.4.1.
"Classification Scheme" means Service Provider's proprietary
classification scheme for Product Data made available through the GHX Exchange.
"Client Software" means the software licensed by Service Provider to
the Participating Members, including any manuals and other available
documentation therefor, and including any Updates thereto, but not including
any Third Party Technology.
"Competitor" means any Person that, at the time of determination,
would reasonably be considered to be a competitor of Novation, VHA, UHC or
HPPI.
"Confidential Information" has the meaning set forth in Section
10.1.1.
"Content" means any text, graphics, logos, button icons, images, audio
clips, HTML code, java programs and other material used or displayed as part of
or in connection with the GHX Exchange, the Novation Marketplace or NPS, other
than Product Data.
"[*****]" or "[*****]" means [*****] on [*****] use of the [*****] and
[*****], as more particularly described in [*****].
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and operating policies of
the entity in respect of which the determination is being made, through the
ownership of voting securities, contract, voting trust or otherwise.
"Current Version" has the meaning set forth in Section 6.4.5(a).
"Deliverables" has the meaning set forth in Section 4.1.
"Effective Date" means the date on which the Effective Time occurs.
"Effective Time" has the meaning set forth in the Merger Agreement.
"Escrow Agent" has the meaning set forth in Section 6.4.5(a).
"GHX Exchange" means Service Provider's e-commerce system and
marketplace for enabling e-commerce transactions and transmitting procurement
communications between buyers and Suppliers in the health care industry, all as
further described in Exhibit B ("Scope of Services"). GHX Exchange includes
both GHX Exchange Standard and GHX Exchange Plus.
"GHX Exchange Software" means the software necessary to provide the
GHX Exchange, including any manuals and other available documentation therefor,
and including any Updates thereto, but not including any Third Party
Technology.
_______________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-3-
"GHX Exchange Plus" or "GHXe Plus" means the services designated as
such in the Scope of Services, which shall be provided only if and to the
extent that any Participating Member elects to receive such services for an
additional fee.
"GHX Exchange Standard" or "GHXe Standard" means all of the GHX
Exchange other than GHX Exchange Plus.
"GHX Formation Agreement" means that certain Third Amended and
Restated Formation Agreement among Service Provider and its members, dated as
of December 30, 2002, as the same may be amended, modified or supplemented from
time to time.
"GHX LLC Agreement" means that certain Fifth Amended and Restated
Limited Liability Company Agreement among Service Provider and its members,
dated as of December 30, 2002, as the same may be amended, modified or
supplemented from time to time.
"GPO(s)" means any entity in the United States that meets the
definition of a "Group Purchasing Organization" as set forth in 42 CFR Section
1001.952(j), and any entity outside the United States performing a similar
function.
"HPPI" has the meaning set forth in the Preamble.
"HPPI Member(s)" means, at any date, those organizations acting as
purchasers, renters or lessees in their respective markets that are associates
of HPPI and to which HPPI provides procurement-related services, cost
management programs and other services.
"Infringement Claim" has the meaning set forth in Section 14.3.1.
"Initial Term" has the meaning set forth in Section 8.1.
"Insolvency Event" has the meaning set forth in Section 8.4.
"[*****]" has the meaning set forth in Section 8.4.
"Intellectual Property" has the meaning set forth in Section 9.5.2.
"Intellectual Property Rights" collectively means any and all rights
in Intellectual Property, including without limitation, copyrights, patents,
patent registration rights, business processes, data rights, mask works, Marks,
trade secrets, and know-how rights arising or enforceable under any U.S. law,
foreign law, or international treaty regime.
"Internet" means the public, global network of computer networks and
individual computers constantly connected using standardized communications
protocols, specifically TCP/IP or any successor protocol thereof.
"Items" has the meaning set forth in Section 14.3.1.
"Losses" has the meaning set forth in Section 14.1.
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-4-
"Marks" means all trademarks, trade names, service marks, service
names and logos, worldwide.
"Member(s)" means, at any date, those organizations that are (i)
Patrons of VHA as VHA designates from time to time, (ii) members of UHC as UHC
designates from time to time and/or (iii) HPPI Members, and in each case, that
are listed in an electronic file supplied to Service Provider and updated
periodically by Novation.
"Member-Based Pricing" has the meaning set forth in Section 7.5.1.
"[*****]" means those [*****] [*****] between any one or more [*****]
and any [*****], for the [*****] of such [*****].
"[*****] Portfolio" means a catalog of all [*****] for which one or
more [*****] has contracted for the benefit of such [*****].
"[*****] Product" means any [*****] that is part of the [*****]
Portfolio.
"Member Data" has the meaning set forth in Section 9.1.1.
"Member-Facing Plan" has the meaning set forth in Section 2.5.1.
"Merger Agreement" means that certain Agreement and Plan of Merger by
and among Service Provider, Neoforma, and Leapfrog Merger Corporation, a
Delaware corporation, dated as of the date hereof.
"Migrated" means, with respect to a particular Participating Member,
that [*****] of the activities set forth on the [*****] have been successfully
completed with respect to that Member.
"Migration Deadline" has the meaning set forth in Section 2.1.3.
"Migration Plan" has the meaning set forth in Section 2.1.1.
"[*****]" means the [*****] [*****] (and the [*****] related thereto)
that includes [*****] [*****] of [*****] [*****] [*****] [*****] to a [*****]
[*****] and [*****] [*****] that [*****] the [*****], the [*****] and the
[*****]. The [*****] included in [*****] shall include [*****] [*****] thereto
that are included in the [*****] to be [*****] in the [*****] (referred to as
[*****]).
"[*****] Data" means any [*****] [*****] by [*****], any [*****] or
any [*****] to [*****] for [*****] in [*****], including without limitation
[*****] that is [*****] to [*****] [*****] (including [*****]), [*****],
[*****], [*****] and [*****] [*****] that [*****], any [*****] or any [*****]
provides to [*****] for [*****] on [*****], including, without limitation,
[*****], [*****], [*****], [*****], [*****], [*****], [*****], [*****],
[*****], [*****] and other [*****].
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-5-
"[*****] Period" means the period of time during which [*****] [*****]
the [*****].
"[*****] Services" means the services necessary to [*****] and [*****]
[*****] during the [*****], including [*****] to [*****] by [*****], [*****]
and [*****] [*****].
"Neoforma" means Neoforma, Inc., a Delaware corporation.
"Neoforma Outsourcing Agreement" means that certain Fourth Amended and
Restated Outsourcing and Operating Agreement by and among Neoforma, Novation,
VHA, UHC and HPPI dated as of August 13, 2003.
"New Participating Members" has the meaning set forth in Section
2.5.4(a).
"Non-Novation Contract Product" means any [*****] that is not part of
the [*****], including, without limitation, a [*****] or a [*****].
"Non-Renewal Notice" has the meaning set forth in Section 8.2.
"Novation" has the meaning set forth in the Preamble.
"Novation Contract" means [*****] [*****] or [*****] contracts that
[*****] has entered into for the [*****] of the [*****].
"Novation Contract Product(s)" means any [*****] that is [*****] by a
[*****].
"[*****] [*****]" has the meaning set forth in Section [*****].
"Novation Marketplace" means the services being provided by Neoforma
pursuant to the Neoforma Outsourcing Agreement as of the Effective Date,
including the e-commerce marketplace accessible only to Members of VHA, UHC or
HPPI, as updated by the release to be issued in the fourth quarter of 2005
(referred to as Avalon), but excluding the Novation Proprietary Services.
"Novation Materials" means Content and [*****] Data provided by
Novation or by Suppliers to Service Provider solely for use in connection with
NPS.
"Novation Operating Agreement" has the meaning set forth in Section
8.3.2.
"Novation Proprietary Services" or "NPS" means the [*****], [*****]
and any other services [*****] developed pursuant to a SOW for the exclusive
use of Novation and hosted or otherwise provided by Service Provider.
"Novation Suppliers" means each Supplier with which Novation has an
agreement with respect to [*****] to be offered to Members.
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-6-
"Participating Members" means any Member that has signed an agreement
with Service Provider (or with Neoforma if signed prior to the Effective Date
and still in effect) for use of any of the Services.
"Party" means each of Service Provider, Novation, HPPI, VHA and UHC
and any other Person that becomes a signatory to this Agreement, unless the
context requires otherwise.
"Patron(s)" means a Person that is entitled to receive a patronage
refund from VHA.
"Performance Credits" means the liquidated damages amounts payable by
Service Provider to Novation for a failure to meet the Service Levels.
"Person" means a natural person, corporation, partnership (limited or
general), limited liability company, business trust or other entity.
"Post-Migration" has the meaning set forth in Section 2.2.2.
"Pre-Existing GHX Agreements" has the meaning set forth in Section
2.2.2(c).
"Pre-Existing Member Agreements" has the meaning set forth in Section
2.5.3.
"Pre-Migration" has the meaning set forth in Section 2.2.1.
"Product(s)" means equipment, products, supplies, services,
information and other content provided by Suppliers and available for purchase,
rental or lease by Members whether or not through the GHX Exchange or the
Novation Marketplace.
"Product Council" has the meaning set forth in the GHX LLC Agreement.
"Product Data" means product information that a Supplier provides to
Service Provider for display on the GHX Exchange, to communicate to purchasers
including, without limitation, product descriptions, product specifications,
Marks, catalog prices, catalogs, directions for use, text, pictures, sound,
video and other data. For avoidance of confusion, price data for a specific
transaction is Transaction Data, not Product Data.
"Renewal Proposal" has the meaning set forth in Section 8.2.
"Renewal Term" has the meaning set forth in Section 8.2.
"Reports" has the meaning set forth in Section 2.8.2(b).
"Response" has the meaning set forth in Section 4.2.1.
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-7-
"[*****]" means those [*****] or [*****] [*****] of [*****] or [****]
that have not been [*****] to [*****] and which the [*****] may have [*****]
because they are [*****] in [*****] or [*****].
"[*****]" means a [*****] of all [*****] for which [*****] or [*****]
have contracted for the benefit of their [*****] that have not been [*****] to
[*****] and which the [*****] may have [*****] because they are Members[*****]
in [*****] or [*****].
"[*****]" means any [*****] that is part of the [*****].
"Service(s)" means the services to be provided hereunder by Service
Provider, and includes, without limitation, collectively: (i) the Novation
Marketplace (with respect to Pre-Migration Members), (ii) GHX Exchange Standard
(with respect to Post-Migration Members), (iii) all other services to be
provided pursuant to this Agreement, (iv) the [*****] and the [*****], (v) the
other Novation Proprietary Services to the extent that such services are the
subject of one or more signed Statements of Work and (vi) GHX Exchange Plus (to
the extent that a Member has elected to receive such services).
"Service Fees" has the meaning set forth in Section 7.1.
"Service Level(s)" means the objective criteria establishing the level
of Service Provider's required provision of the Services under this Agreement,
as further described in Exhibit C.
"Service Provider" has the meaning set forth in the Preamble.
"Service Provider Change of Control" means a merger or consolidation
(other than with a subsidiary of Service Provider) in which Service Provider is
not the surviving entity, or the sale of substantially all the assets of
Service Provider, or a sale or other transaction or series of related
transactions in which more than [*****] of the outstanding common stock or
general voting securities (other than the sale of securities in any public
offering) of Service Provider (or the common stock or general voting securities
of the new parent entity of Service Provider) immediately after such sale or
other transaction or series of related transactions is not owned by the persons
or entities who, immediately prior to such sale or other transaction or series
of related transactions, owned one-hundred percent (100%) of the common stock
or general voting securities of Service Provider.
"Service Provider Materials" means Content provided by Service
Provider and displayed on and available to Users of NPS, the Novation
Marketplace, GHX Exchange or NPS but shall not include the Novation Materials.
"[*****]" has the meaning set forth in Section [*****].
"Source Code" has the meaning set forth in Section 6.4.5(a).
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-8-
"SOWs" has the meaning set forth in Section 4.1.
"Supplier(s)" means manufacturers, distributors and other suppliers of
medical, surgical, pharmaceutical and other products, equipment and services
used by healthcare providers and/or related professionals.
"[*****]" or "[*****]" means all or any portion of [*****] or [*****]
regarding the [*****], [*****] or [*****] of [*****] by [*****] that is [*****]
to [*****] by [*****], other than [*****]
"Term" has the meaning set forth in Section 8.2.
"Termination Assistance Period" means the [*****] period immediately
following the expiration or termination of this Agreement.
"Termination Assistance Services" means termination assistance to
allow the Services to continue in accordance with the terms and conditions of
this Agreement and without interruption or adverse effect and to facilitate the
orderly transition and migration of all Services then being performed by
Service Provider, including any transition and migration from Service Provider
to Novation or, if applicable, VHA and UHC (or a third-party provider
undertaking, on behalf of Novation, VHA or UHC, to provide the Services).
"Third Party Technology" shall mean software code and other technology
licensed by Service Provider for use in the GHX Exchange Software and/or the
Client Software, including Updates to such technology.
"Transaction Data" means any information communicated by Service
Provider to a Participating Member, by a Participating Member to Service
Provider or between a Supplier and a Participating Member through GHX Exchange
Standard (for Post-Migration Members) or through the Novation Marketplace (for
Pre-Migration Members) that relates to product purchase, sale, availability,
price, terms of payment or order status, including summaries of such
information.
"UHC" has the meaning set forth in the Preamble.
"Update" means an update to the GHX Exchange Software or the Client
Software, as applicable, licensed by Novation, UHC, VHA and HPPI hereunder, but
not including any updates to the Third Party Technology.
"User(s)" means the individual authorized representatives of
Participating Members who use the GHX Exchange, the Novation Marketplace or the
Novation Proprietary Services, the individual employees of UHC, VHA, Novation
or HPPI who access the GHX Exchange, the Novation Marketplace or the Novation
Proprietary Services and the individual employees of Suppliers that access the
GHX Exchange, the Novation Marketplace or the Novation Proprietary Services.
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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"VHA" has the meaning set forth in the Preamble.
"V/U/N" means VHA, UHC and Novation.
2. SERVICE PROVIDER OBLIGATIONS
2.1 Migration.
2.1.1 Migration Plan. Service Provider shall transition
Participating Members from the [*****] to the [*****] in
accordance with the Migration Plan attached hereto as Exhibit
A ("Migration Plan"). Service Provider shall use [*****]
efforts to provide a [*****] and [*****] transition, with
[*****] [*****] of [*****] during the transition from the
[*****], except as otherwise permitted under the Migration
Plan. The Migration Plan shall not be amended without the
consent of [*****], such consent not to be unreasonably
withheld.
2.1.2 Assumptions and Further Development. The Migration Plan is
based upon Service Provider's use of [*****]'s [*****] as
part of the [*****] in lieu of its [*****]. In the event
Service Provider elects to retain its [*****], the Migration
Plan may need to be [*****]. Service Provider shall notify
[*****] by [*****] as to which [*****] shall be used as part
of the [*****]. In developing the final Migration Plan,
Service Provider shall provide each of [*****] and the
[*****] with the opportunity to confirm that [*****]
("[*****]") is complete and correct and will work with
[*****] and the [*****] to add any items that may have been
unintentionally overlooked. The Parties will negotiate in
good faith the [*****] of adding any such
unintentionally-omitted items to Exhibit B.
2.1.3 Migration Services. Service Provider shall ensure that it has
[*****] resources and that it obtains [*****] cooperation
from third parties to develop and successfully implement the
Migration Plan in accordance with its terms. The Parties
shall cooperate to encourage Participating Members to migrate
to the [*****]. Service Provider may terminate the services
provided under the [*****] for any Participating Member that
has not Migrated to the [*****] on or before [*****] after
the Effective Date, provided that Service Provider has
performed [*****] [*****] [*****] [*****] relating to the
Migration Plan hereunder during such [*****] period (the
"Migration Deadline").
2.2 Services. Subject to the terms of this Agreement, Service Provider
shall perform all Services itself or through its wholly-owned
subsidiaries (or through Neoforma as a subcontractor of Service
Provider), unless and until otherwise agreed in writing by Novation
and each of the Alliances, which agreement shall not be unreasonably
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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withheld or delayed. Service Provider may liquidate or dissolve
Neoforma so that all of its assets are distributed to Service Provider
or merge or consolidate Neoforma into or with Service Provider, or
transfer all or substantially all of its assets to Service Provider or
a wholly-owned subsidiary of Service Provider, if despite such
transaction, Service Provider is able to maintain in full force and
effect the Pre-Existing Member Agreements pursuant to Section 2.5.3
unless and to the extent that they have been replaced by an agreement
with Service Provider pursuant to Section 2.5.4. Throughout the
Migration Period, all Participating Members will continue to receive
Services including at least all the functionality of the Novation
Marketplace.
2.2.1 Pre-Migration Services. With respect to those Participating
Members that have not been Migrated pursuant to the Migration
Plan ("Pre-Migration"), Service Provider shall provide to
such Participating Members: (a) [*****] of the Novation
Marketplace, (b) all other functions of the Novation
Marketplace, using [*****] the [*****] [*****] the [*****] in
accordance with the Migration Plan, and (c) the Novation
Proprietary Services.
2.2.2 Post-Migration Services. With respect to those Participating
Members that have been Migrated pursuant to the Migration
Plan ("Post-Migration"), Service Provider shall provide the
GHX Exchange, [*****] and the [*****] in accordance with this
Agreement. Service Provider shall also provide any additional
Services (including NPS Services) pursuant to the
Statements(s) of Work then in effect, if any, and any GHX
Exchange Plus services that the Participating Member has then
elected to receive, it being understood that GHX Exchange
Plus services may be subject to a competitive bid process
before being offered to Members with respect to one or more
of the Alliances. Service Provider and Novation acknowledge
and agree that the GHX Exchange will evolve and be modified
or be enhanced over time to keep pace with technological
advancements and improvements in e-commerce, in accordance
with the recommendations of the Product Council. Each of
Novation, VHA, UHC and HPPI may also independently elect in
its sole discretion, to receive any or all of the GHX
Exchange Plus services itself or on behalf of its
Participating Members.
2.2.3 [*****] [*****] [*****].
(a) To the extent the [*****] have then [*****] [*****]
[*****],[*****]'s [*****] to [*****] during [*****]
[*****] shall [*****] the [*****] [*****]:
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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(i) [*****] for the [*****] [*****] of any
[*****] or [*****] of the [*****] and
[*****] [*****] [*****] to [*****] [*****]
this Agreement shall be [*****] [*****] as
the [*****] [*****] [*****][*****] [*****]
by [*****] to any [*****] [*****] [*****]
or [*****] [*****] [*****], except [*****]
to [*****][*****] [*****] by [*****]
[*****] to the [*****] [*****]
[*****][*****] [*****] on [*****] [*****];
and
(ii) [*****]'s [*****] [*****] and [*****]
[*****] [*****] [*****] to [*****] [*****]
this Agreement shall be [*****] [*****] as
the [*****] [*****] [*****] [*****] and
[*****] [*****] [*****] (including [*****]
[*****] therefor) [*****] by [*****] (other
than [*****] [*****] to [******] [*****]
that are [*****] to [*****] the [*****]
[*****] [*****] of [*****]) to [*****]
[*****] [*****] for the [*****] or [*****]
[*****] [*****].
(b) [*****] [*****] [*****] that the [*****] and [*****]
[*****] and [*****] [*****] by [*****] to [*****]
the [*****] and [*****] [*****] this Agreement for
the [*****] or [*****] [*****] [*****] shall be
[*****] or [*****] than the [*****] and [*****]
[*****] by [*****] to [*****] [*****] [*****] in
[*****], [*****] [*****] [*****] to [*****] [*****]
[*****] on [*****].
(c) Notwithstanding the foregoing provisions of this
Section 2.2.3, [*****] [*****] [*****] to [*****] to
[*****] [*****] [*****] or [*****] [*****] and
[*****] for the [*****] or [*****] [*****] [*****]
that are [*****] [*****] [*****] than [*****] it
[*****] to [*****], the [*****] and the [*****]
[*****], [*****] that [*****] [*****] [*****] into
[*****] [*****] [*****], [*****] [*****] [*****]
[*****] [*****] to [*****] and the [*****] [*****]
and [*****] to [*****] [*****] [*****] (and [*****]
[*****] [*****] with [*****]) to [*****] [*****],
[*****] and [*****] to [*****], the [*****] and the
[*****] [*****] are [*****] or [*****] [*****]
[*****] [*****] by [*****] to [*****] [*****]
[*****] in [*****] [*****] [*****].
2.3 Service Levels; Root-Cause Analysis.
2.3.1 Service Levels. The Services shall be provided in a
manner that satisfies the performance standards and
service levels set forth on Exhibit C. Service
Provider shall maintain such professional and
technical personnel and other resources (including,
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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without limitation, hardware, software, facilities,
equipment and other assets) as shall be required to
provide the Services in accordance with the Service
Levels and to satisfy its obligations hereunder
throughout the Term. Novation's and the Alliances'
sole and exclusive remedies for Service Provider's
failure to meet the Services Levels are set forth in
Exhibit C. Except as provided in Exhibit C, Service
Provider's failure to meet the Service Levels shall
not be deemed a breach of this Agreement. The
Parties agree that the damages provided in Exhibit C
are a reasonable estimate of the damages that would
be suffered by Novation and the Alliances as a
consequence of the failures described in Exhibit C
and do not constitute a penalty (the Parties hereby
acknowledging the inconvenience and difficulty of
otherwise obtaining an adequate remedy).
2.3.2 Root-Cause Analysis. Upon receipt of a notice from
Novation or any of the Alliances of Service
Provider's failure to provide the Services in
accordance with this Agreement or upon Service
Provider's knowledge of a failure to provide the
Services in accordance with this Agreement, Service
Provider shall, as soon as reasonably practicable,
(i) perform a root-cause analysis to identify the
cause of such failure and (ii) provide Novation and
each of the Alliances with a report detailing the
cause of, and procedure for correcting, such
failure. If the root cause of such failure is due to
the fault of Service Provider (whether determined
pursuant to the foregoing or pursuant to Section
17), Service Provider will implement such procedure
and provide Novation and the Alliances with
reasonable assurance that such failure will not
recur; provided that Novation and each of the
Alliances shall retain any and all applicable rights
and remedies hereunder with respect to such failure.
If Service Provider concludes that the root cause of
such failure is due to the fault of any Person other
than Service Provider, Service Provider shall
promptly give Novation and each of the Alliances
notice of, and information supporting, such
conclusion, subject to Novation's and the Alliances'
right to disagree with Service Provider's conclusion
and to have the root cause determined in accordance
with Section 17. The Parties shall submit to the
process set forth in Section 17 any Disputed Matter
regarding the root cause of any such failure to
provide the Services in accordance with the
applicable Service Levels.
2.4 [*****] . Service Provider shall, on a [*****] basis as
agreed to by Service Provider and [*****] in connection with
the Service Levels, [*****] onto [*****] as provided by
[*****], including, without limitation, [*****] relating to
new [*****].
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-13-
2.5 Service Provider's Interaction with Members; Pre-Existing
Data and Service Arrangements.
2.5.1 Member-Facing Plan. Service Provider will provide
representatives to call upon Members that are not
already receiving Services on a periodic basis and
using appropriate methods of communications as
mutually agreed to in a plan approved in writing by
Service Provider, Novation and each of the Alliances
(the "Member-Facing Plan"). The initial
Member-Facing Plan is attached hereto as Exhibit D.
Except (a) as authorized by the Member-Facing Plan,
(b) to respond to specific Member inquiries
(including Requests for Proposals) or (c) as
otherwise required to provide the Services
hereunder, Service Provider shall not, directly or
through any of its Affiliates or another Person,
contact or communicate with any Member without the
prior written consent of the Alliance(s) to which
such Member belongs.
2.5.2 Members Using Service Provider prior to the
Effective Date. Service Provider shall assure that
any Participating Member that is currently receiving
services from Service Provider, is listed in the
Migration Plan, and desires to avail itself of the
benefits of this Agreement may, at its option and
without liability, supersede the pricing terms and
any other terms that conflict with the terms of this
Agreement under its existing contract(s) or other
arrangement(s) with Service Provider for the purpose
of participating in the GHX Exchange and the
Novation Proprietary Services under this Agreement.
Such Member shall be solely responsible for any and
all charges due with respect to any GHX Exchange
Plus services that it may elect to receive.
2.5.3 Maintenance of [*****]. Service Provider shall use
[*****] efforts to cause [*****] to maintain in full
force and effect [*****] [*****] and [*****]
existing as of the [*****] ("[*****]") (except in
response to a [*****] of a [*****] by a [*****]
after [*****] to the applicable [*****] and an
[*****] to assist in addressing the [*****]). Prior
to [*****] of any [*****], Service Provider shall
use (or shall cause [*****] to use) [*****] efforts
to [****] [*****] [*****] [*****] in accordance with
Section [*****] or to [*****] the [*****].
2.5.4 Participation of Additional and Renewal Members.
(a) Service Provider, Novation, UHC, VHA and
HPPI shall be jointly responsible for
encouraging additional Members to execute
agreements to participate in the GHX
Exchange and Novation Proprietary Services.
Within ninety (90) days after the Effective
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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Date and, thereafter once each year within
ninety (90) days after the anniversary of
the Effective Date, the Parties shall meet
and use good faith and reasonable efforts
to determine and agree upon their
respective responsibilities in connection
with obtaining agreements between
additional Members and Service Provider for
use of the GHX Exchange and Novation
Proprietary Services ("New Participating
Members").
(b) Service Provider shall present to each
Member that is considering participation in
the GHX Exchange and Novation Proprietary
Services a user agreement substantially in
the form of Exhibit E ("Form of Member
Agreement"). Service Provider shall be free
to negotiate such user agreements with
prospective Members in its sole discretion;
[*****] [*****] [*****], that [*****] shall
[*****] [*****] [*****], the [*****] to
[*****] or [*****] the [*****] of the
[*****] relating to [*****] [*****]'s
[*****] to the [*****] to [*****] and the
[*****] [*****] by [*****] of [*****] or
[*****] without [*****] [*****][*****]
[*****] [*****] to [*****] and the [*****]
[*****] of [*****] [*****] [*****] for such
[*****] [*****] to [*****] a [*****] with
the [*****] [*****] [*****] [*****] [*****]
[*****]. Service Provider shall promptly
provide to each of Novation and the
appropriate Alliance(s) copies of all
agreements with Participating Members.
(c) The Parties shall in good faith review and
consider proposed changes to the Form of
Member Agreement based on experiences
related to negotiation of agreements with
Members. Novation and the Alliances will
not unreasonably withhold or delay their
consent to changes in the Form of Member
Agreement.
(d) [*****] and [*****] the [*****] have
[*****] [*****] [*****], [*****] [*****]
with [*****] [*****] [*****] [*****],
[*****] shall [*****] [*****] the [*****]
of [*****] the [*****] to [*****] the
[*****] or [*****] [*****] for [*****]
[*****] the [*****] and the [*****] to the
[*****] to [*****] [*****] [*****] (or a
[*****]) in the event that [*****] [*****]
[*****] or [*****] [*****] to [*****]
("[*****]") herein: (a) in [*****] [*****]
by [*****] [*****] [*****] in [*****]
[*****], and (b) in [*****] [*****] [*****]
by [*****] [*****] [*****] [*****] to
[*****] the [*****] [*****]'s [*****] to
[*****] [*****] [*****] [*****] the [*****]
of [*****] [*****] to [*****] or of [*****]
[*****]. [*****] the [*****] of [*****]
[*****] and [*****] [*****] or [*****] as
[*****] [*****], [*****] a [*****] [*****]
to [*****] to the [*****] [*****] [*****]
or [*****] [*****] [*****] [*****] [*****],
[*****] [*****] [*****][*****] [*****]
[*****] to [*****] and the [*****] [*****]
of [*****] [*****] [*****] for [*****]
[*****] [*****] to [*****] a [*****]
[*****] the [*****] [*****] that [*****]
such [*****]. [*****] and [*****] the
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-15-
[*****] [*****] [*****] [*****] [*****] and
to the [*****] [*****] by the [*****]
[*****] or [*****] [*****], [*****]
[*****], [*****] [*****] [*****] of the
[*****] to [*****][*****] [*****] [*****],
[*****] such [*****] or [*****] [*****] to
the [*****] to [*****] [*****] [*****]
[*****] (or [*****] [*****])[*****] [*****]
or [*****] of [*****] [*****]
[*****][*****] [*****] [*****].
2.6 Data From Suppliers.
2.6.1 [*****]. Novation shall, in its discretion, enter
into agreements with Suppliers for the receipt of
[*****]. Service Provider shall work in good faith
to obtain the [*****] from such Suppliers and
utilize it to perform the Services in accordance
with Exhibit B.
2.6.2 Product Data. In its negotiations with Suppliers,
[*****] shall use [*****] efforts (without any
obligation to bear any expense or pay any amount) to
cause the Suppliers to provide [*****] regarding
[*****] of their [*****] to [*****] for [*****] in
the [*****]. [*****] shall, in its discretion,
obtain [*****] with Suppliers for [*****] to be
included in [*****]. Absent a separate agreement
with [*****], [*****] shall not be entitled to
[*****] [*****] in [*****].
2.6.3 [*****]. Absent a separate agreement with [*****],
Service Provider shall not use [*****] except as
necessary to provide [*****].
2.7 Knowledge Sharing. On a mutually agreed schedule, Service
Provider, Novation, VHA and UHC will provide information to
each other to understand how Service Provider provides the
Services and how Novation, VHA and UHC (or any of their
designees) use the Services so that each may better fulfill
its obligations under this Agreement.
2.8 Communications with Novation and Alliances.
2.8.1 Notice of Materially Adverse Facts. Subject to its
obligations under Section 10, Service Provider will
provide written notice to each of Novation, VHA, UHC
and HPPI reasonably promptly after becoming aware of
any fact relating to this Agreement or the Services
that would reasonably be likely to materially
adversely affect any of the Services, Service
Provider, the Members, VHA, UHC or HPPI including,
without limitation, the institution of litigation
against Service Provider.
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-16-
2.8.2 Reports.
(a) In addition to any other reports required
by this Agreement, Service Provider will
simultaneously provide each of Novation,
VHA, UHC and HPPI with its standard
real-time, on-line reports of its
Participating Members' usage statistics and
reports on other reasonable matters. In
addition, with respect to Pre-Migration
Members, Service Provider shall provide the
reports and metrics that Novation
previously received from Neoforma with
respect to the Novation Marketplace,
samples of which are attached in Exhibit F.
(b) With respect to GHX Exchange Standard
services provided to Post-Migration
Members, Service Provider shall provide the
same reports and metrics to Novation and
the Alliances as it provides to its other
customers, a sample of which is attached in
Exhibit F. (Collectively, all reports and
metrics provided pursuant to this Agreement
are "Reports").
(c) Service Provider shall provide the Reports
at least as frequently as Service Provider
generally provides its Reports to its other
customers, provided, however, that until
all activities described on the Migration
Plan have been completed, such reports
shall be provided no less frequently than
monthly. Such reports shall be made
available, at no additional charge, in the
form of Excel(TM) files transferred via
electronic transmission to Novation, VHA,
UHC or HPPI, such other files via the
Internet, or in such other format as the
Parties agree. The Parties will mutually
agree on any changes to the scope, format
and substance of the reporting system that
Service Provider will use from time to time
to communicate with Novation, VHA, UHC and
HPPI.
2.8.3 Regular Meetings. Service Provider, Novation, VHA,
UHC and HPPI will conduct regular business reviews
on a quarterly basis, or as otherwise agreed by the
Parties, to discuss the strategic direction of the
Novation Marketplace, the GHX Exchange, the Novation
Proprietary Services and, as applicable, the
following items: the Member-Facing Plan, compliance
with Service Levels, annual volume and connection
targets, goals surrounding New Participating
Members, matters regarding Suppliers, and any other
matter requested by Novation or one of the
Alliances. As part of the regular business reviews,
Service Provider and each of Novation and the
Alliances will review the Service Levels and discuss
in good faith any necessary revisions of the Service
Levels, the GHX Exchange, the Novation Proprietary
Services, the Novation Marketplace, Service
Provider's current products and services,
implementation and enhanced connections and planned
new products and services or Service Provider's
provision of the Services hereunder. No changes will
-17-
be made to the Service Levels unless the parties
mutually agree to the changes and execute a written
amendment to this Agreement.
2.9 Goals and Incentives. The Parties shall meet annually to
establish goals with respect to the Services to help assure
success, including use of the Services by Members. Each of
the Parties shall consider achievement of such goals in
determining incentive-based compensation for its management
employees.
3. THE GHX EXCHANGE
3.1 Maintenance as Leading Provider. Service Provider shall use
commercially reasonable efforts to maintain the GHX Exchange
as a leading provider of e-commerce services to the
healthcare industry.
3.2 User Registration.
3.2.1 NPS
(a) Members. Each User of a Participating
Member will be required to register as a
representative of such Member with UHC, VHA
or HPPI, as applicable, prior to using NPS.
UHC, VHA or HPPI, as applicable, will
request such information as each deems
necessary to verify that such User is an
authorized representative of such Member.
Each of UHC, VHA or HPPI, as applicable,
shall have the right to determine whether a
User has authority to access NPS.
(b) Employees of Alliances and Suppliers. Each
employee-User of any of UHC, VHA, Novation
or Suppliers will be required to register
as a representative of UHC, VHA, Novation
or a Supplier, as applicable, prior to
using NPS. UHC, VHA, HPPI, or a Supplier,
as applicable, shall have the right to
determine whether a User has authority to
access NPS.
(c) General Registration Procedures. When each
User logs on to NPS, Service Provider, with
Novation's assistance, shall register
Participating Members and their Users on
NPS. Service Provider will require Users to
create and use passwords as a necessary
condition to accessing NPS. Service
Provider will verify such information
against the on-line database information
then most-recently made available by
Novation and ensure that such registration
is authorized in accordance with
registration and password issuance and
protection procedures acceptable to Service
Provider and in accordance with Exhibit G
("Registration and Password Issuance and
Protection Procedures"). Service Provider
shall be responsible for keeping the NPS
registry current with the most-recent data
made available by Novation and for not
allowing access to NPS by unauthorized
Users. Participating Members shall only be
allowed to view data related to their
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respective Member organizations. Service
Provider will allow an employee-User of
Novation or any of the Alliances to have
access to information regarding Members of
one or more of VHA, UHC, HPPI only to the
extent permitted by an information feed
provided from time to time by Novation.
3.2.2 GHX Exchange.
(a) Identification. For GHX Exchange Standard,
Service Provider shall issue to Novation,
each Alliance and each Participating Member
a confidential user name(s) and password(s)
(each, an "Identification") for Novation,
each Alliance and each Participating Member
to access and use GHX Exchange Standard.
Novation, each Alliance and each
Participating Member shall each (a) protect
the security of each Identification, (b)
have the right to access GHX Exchange
Standard exclusively for their respective
business purposes, (c) not disclose its
Identification(s) to anyone other than
those of its authorized employees or agents
with a need to know in order to initiate
transactions on GHX Exchange Standard, and
(d) not have the right to authorize third
parties to access or use GHX Exchange
Standard for the benefit of any such third
party. Any and all persons accessing GHX
Exchange Standard using an Identification
issued to the Participating Members shall
be deemed to have actual authority to
transmit transactions through GHX Exchange
Standard on behalf of the applicable
Member. Any information that any
Participating Member inputs into GHX
Exchange Standard will be solely the
responsibility of the Member whose
Identification was utilized to gain access.
Novation will provide Service Provider
prompt notice of the loss or unauthorized
disclosure of its Identification, or upon
notice of an unauthorized use of GHX
Exchange Standard with its Identification.
(b) GHX Exchange Security. Each Party shall
take all commercially reasonable steps
necessary to protect the security of
accessing and conducting transactions
through use of the GHX Exchange, including
without limitation the implementation of
virus protection software on its network,
and of procedures to prevent abusive or
malicious acts or omissions against the GHX
Exchange. Except to access and make use of
the GHX Exchange pursuant to this
Agreement, Novation and the Alliances may
not upload, download, modify, disassemble,
decompile, or copy Service Provider's
Intellectual Property or otherwise take any
action that may affect the use or
functionality of the GHX Exchange.
(c) Privacy. Novation and the Alliances will
not breach or attempt to breach GHX
Exchange computer or software security,
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attempt to access the information of any
entity other than Novation or the Alliance,
as applicable, and the Participating
Members or otherwise invade the privacy of
others in connection with its use of the
GHX Exchange.
3.2.3 Novation Marketplace. As to all Pre-Migration
Members, Service Provider shall maintain the same
registration and authentication procedures as are in
effect for the Novation Marketplace as of the date
hereof.
3.3 Notice of Novation Contracts. Novation shall provide Service
Provider periodic notification (in a form mutually agreed
upon by the parties) of all effective group purchasing
agreements between Novation and Suppliers to enable Service
Provider to make a distinction between Novation Contract
Products and Non-Novation Contract Products.
3.4 Provision of Product Information.
3.4.1 Provision of Non-Novation Contract Product
Information. Service Provider will use commercially
reasonable efforts to obtain from Suppliers the
Product Data to be located on GHX Exchange Standard
in respect of all [*****] (except for [*****]
addressed in Section [*****]). Service Provider
shall display such Product Data on GHX Exchange
Standard and use commercially reasonable efforts to
keep such Product Data up to date.
3.4.2 Provision of Novation Contract Product and [*****].
Novation, VHA or UHC, as applicable, shall use
commercially reasonable efforts to obtain from
Suppliers and provide to Service Provider [*****]
information for [*****], [*****] and any unique
[*****] and [*****] relating to such [*****] and
[*****] that are prepared by Novation, VHA or UHC,
as the case may be. Service Provider shall display
such information on [*****] during the [*****] and
keep such information up-to-date in accordance with
the Service Levels.
3.5 Removal of Materials and Products from NPS.
3.5.1 Removal of Materials. [*****] may request that any
materials or data that [*****] or any of the [****],
in each of its sole discretion, believe are likely
to result in [*****] to Service Provider, Novation,
HPPI, VHA, UHC, any Members and/or any User be
[*****] removed from any part of NPS, and Service
Provider shall [*****] comply with such requests.
3.5.2 Removal of Products. Upon written instructions from
[*****] with regard to [*****], or from [*****] or
[*****] with regard to [*****], Service Provider
will [*****] remove any [*****] from [*****].
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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Service Provider will notify [*****] with regard to
[*****], or [*****] or [*****] with regard to
[*****], [*****] after becoming aware of any problem
with Products listed on [*****] that is [*****] to
result in [*****] to Service Provider, Novation,
HPPI, VHA, UHC, Members, or any Users, but Service
Provider will have [*****] obligation to monitor or
conduct any investigation regarding liability or
performance issues relating to Products.
3.6 Other GPOs. Service Provider shall not make the [*****],
[*****], [*****] or any other information or data provided by
Novation or any Alliance to Service Provider, available to
any other entity, including any GPO other than VHA, UHC or
HPPI. Service Provider shall act in accordance with its
Guiding Principles, a copy of which is attached hereto as
Exhibit O.
3.7 Reasonable Assistance. Each Party will provide the other
Parties with on-going reasonable assistance with regard to
technical, administrative and service-oriented issues
relating to the Services.
4. NOVATION PROPRIETARY SERVICES AND CHANGES IN SERVICES
4.1 Novation Proprietary Services. [*****], [*****], [*****] or
[*****] may each elect, in its sole discretion, to enter into
one or more Statements of Work ("SOWs") for Novation
Proprietary Services or for changes to [*****] or for [*****]
or [*****] not included in the [*****]. Any SOW entered into
by [*****] shall be subject to the Change Control Procedures
set forth in Section 4.2 and other applicable provisions of
this Agreement. Any SOW entered into by [*****], [*****] or
[*****] shall, unless otherwise provided therein, (1)
incorporate the terms of this Agreement except that the
recipient of services thereunder (i.e., [*****], [*****] or
[*****]) shall be the party thereto instead of [*****], (2)
provide that charges pursuant to the SOW shall be on a
[*****] and [*****] and (3) will allow [*****] by [*****],
[*****] pr [*****], as applicable, after [*****] without
further [*****]. Each of [*****], [*****] or [*****] shall
inform the others of any SOWs that it intends to enter into
with [*****]. Any deliverables created pursuant to a SOW (the
"Deliverables") shall be subject to the [*****] provisions
set forth in Section [*****].
4.2 Change Control for Novation Proprietary Services.
4.2.1 Change Control Procedure. In the event that (i)
either [*****] or [*****] wishes a change to the
Novation Proprietary Services, including changes in
the [*****], [*****] or [*****] of the foregoing, or
(ii) [*****] requests [*****] [*****] (each of the
foregoing, a "Change"), the requesting Party shall
submit a written proposal to the other Party
describing such desired change ("Change Request").
The receiving Party shall review the Change Request
and reject or accept the Change Request in writing
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-21-
within a [*****] period of time, but in no event
more than [*****] after receipt of the Change
Request (the "Response"). In the event that the
Change Request is rejected, the Response shall
include the [*****] and, in the event that the
Change Request is rejected by [*****], [*****] shall
wherever possible, [*****] a [*****] to the [*****].
[*****] and [*****] shall negotiate in good faith to
agree on a Change, and its accompanying terms,
within [*****] after receipt of the Response;
provided, however, that either Party may, in its
sole discretion, elect to not agree to any Change.
In the event that the Change Request is accepted,
the Parties shall mutually agree on the changes to
be made to this Agreement to reflect such Change.
The changes or additional terms and conditions (if
any) shall be made only in a written Change Order
signed by an authorized representative of the
Parties. Notwithstanding the foregoing, nothing set
forth in this Agreement shall be construed to
require renegotiation of existing Services.
4.2.2 Adjustment in [*****]. The [*****] [*****] hereunder
may [*****] or [*****] as a result of a [*****]
agreed upon by the Parties pursuant to the procedure
set forth in Section 4.2.1 and such [*****] or
[*****] shall be negotiated by the Parties in good
faith.
4.2.3 Emergency Changes. No Change shall be implemented
without [*****]'s approval, except reasonable,
temporary Changes made on an emergency basis that
are necessary to maintain the continuity of [*****].
If the need for an emergency change arises, either
Party's Contract Administrator or his or her
designee shall as [*****] submit to the other Party
a Change Request for such Change and each Party
shall, subject to the other terms and conditions of
this Agreement, use [*****] efforts to implement
such Change [*****]. The Parties shall thereafter
agree, [*****], upon a Change Order regarding such
emergency Change.
5. SERVICE PROVIDER EXCLUSIVITY
5.1 Exclusivity. Service Provider agrees that during the Term of
this Agreement it will not operate as a group purchasing
organization organized for the purpose of negotiating
specific prices on products and services to be purchased by
its members.
5.2 Marketing Other Services To Members. Service Provider shall
not target market any or all of the GHX Exchange to Members
through arrangements with other group purchasing
organizations. Nevertheless, nothing shall restrict Service
Provider from offering the GHX Exchange to any other group
purchasing organizations and its members and, except for the
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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obligation not to target market such Services as set forth
above in this Section 5.2, nothing shall restrict Service
Provider from selling such Services to members of such other
group purchasing organizations under Service Provider's
agreement with such other group purchasing organization even
if such member happens to be a Member. Notwithstanding the
foregoing, under no circumstances shall the Service Provider
offer or provide Novation Proprietary Services or any other
service involving the Novation Contracts to any Person other
than to a Member in accordance with the terms of this
Agreement.
6. LICENSES
6.1 Marks. Each Party hereby grants to each of the other Parties
a royalty-free, non-exclusive, non-transferable,
non-sublicenseable, worldwide license to use and display
during the Term the Party's Marks only as necessary to
perform in accordance with the Agreement and subject to the
Xxxx owner's prior approval of the form of use. The Xxxx
owner may terminate the foregoing Xxxx license if, in its
reasonable discretion, the licensee's use of the Marks
tarnishes, blurs or dilutes the quality associated with the
Xxxx or the associated goodwill and such problem is not cured
within ten (10) days of written notice of breach;
alternatively, instead of terminating the license in total,
the owner may specify that certain licensee uses may not
contain such Marks. Title to, ownership of, and all
proprietary rights (including, without limitation,
Intellectual Property Rights) and interest in the owner's
Marks will remain with the Xxxx owner. The licensee will use
the owner's Marks exactly in the form provided and in
conformance with the owner's Xxxx usage policies. A copy of
Novation's current trademark usage guidelines is attached as
Exhibit I ("Novation's Trademark Usage Guidelines"). A copy
of Service Provider's current trademark usage guidelines is
attached as Exhibit J ("Service Provider's Trademark Usage
Guidelines"). A copy of each of VHA's, UHC's and HPPI's
current trademark usage guidelines are attached as Exhibit K
("VHA's, UHC's, and HPPI's Trademark Usage Guidelines"). The
licensee will not take any action inconsistent with the
owner's ownership of its Marks, and any benefits accruing
from use of such Marks will automatically vest in the Xxxx
owner. The licensee will not form any combination Marks with
any other Party's Marks. Subject to the provisions of Section
8.8, upon termination or expiration of this Agreement, each
Party will cease all use of all Parties' Marks.
6.2 Service Provider Materials. Service Provider grants to
Novation a worldwide, nontransferable, non-exclusive,
royalty-free license to use the Service Provider Materials
only in promotional materials used to encourage participation
on the GHX Exchange and the Novation Marketplace, or to use
the NPS.
6.3 Novation Materials. Novation grants to Service Provider a
worldwide, nontransferable, non-exclusive, royalty-free
license to use the Novation Materials during the Term solely
to enable Service Provider to provide the Services
contemplated under this Agreement.
6.4 Licenses; Source Code Escrow; Proprietary Rights.
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6.4.1 Access License. Service Provider has developed
Confidential Information and trade secrets relating
to the sale of its products and services to a large
number of customers in the healthcare industry using
proprietary business processes. Each of Novation,
VHA, UHC and HPPI acknowledges that Service Provider
and its Affiliates have invested substantial money
in the development and maintenance of such processes
and in the sourcing and sales of products and
services. Each of Novation, VHA, UHC and HPPI will
have a position of special trust and confidence for
the use of such Confidential Information (including
without limitation the roster of Service Provider's
customers and business partners). Accordingly,
during the Term, Service Provider hereby grants to
each of Novation, VHA, UHC and HPPI a non-exclusive
license to use Confidential Information and such
trade secrets for the limited purpose of providing
the assistance to Service Provider as contemplated
in this Agreement. Additionally, during the Term,
Seller hereby grants to each of Novation, VHA, UHC
and HPPI a non-exclusive royalty-free license to use
the Services (including without limitation the
Client Software) for the limited purpose of
providing assistance to Service Provider as
contemplated in this Agreement and to Participating
Members and to the extent necessary to receive
Member Data, [*****] and Analytic Data as
contemplated hereby; provided, however, that nothing
in this Agreement grants Novation or the Alliances
any license to use or copy Product Data.
6.4.2 License to Service Provider. Neoforma, Novation,
VHA, UHC and/or HPPI have developed Confidential
Information and trade secrets relating to the
development of [*****]. Service Provider
acknowledges that Neoforma, Novation, VHA, UHC
and/or HPPI have invested substantial money in the
development and maintenance of [*****]. Service
Provider will have a position of special trust and
confidence for the use of [*****] to support the
purposes of this Agreement. Accordingly, during the
Term, to the extent of their rights therein,
Novation, VHA, UHC and HPPI hereby grant to Service
Provider a limited, non-transferable, royalty-free,
non-exclusive license to use and, on the terms
provided herein, to modify [*****] and any
Confidential Information of Novation, VHA, UHC and
HPPI related thereto for the limited purpose of
performing Service Provider's obligations under this
Agreement.
6.4.3 Grant of Source Code License.
(a) Subject to the terms of this Agreement,
Service Provider hereby grants, and
Novation, VHA, UHC and HPPI each hereby
accepts, a nontransferable, non-assignable
(except to Affiliates of Novation, VHA, UHC
or HPPI), non-exclusive, limited and
royalty-free license to modify and use the
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-24-
GHX Exchange Software solely in accordance
with this Section 6.4.3; provided, however,
that Novation, VHA, UHC and HPPI each
agrees not to exercise its rights under
such license to the GHX Exchange Software
unless and until the occurrence of an
Activation Event. Upon such occurrence,
Novation, VHA, UHC and HPPI each may use
the GHX Exchange Software to operate the
GHX Exchange solely for the benefit of
Participating Members and limited to the
extent necessary to cause Suppliers'
products to remain available for purchase
by Participating Members. Subject to the
conditions set forth herein, Novation, VHA,
UHC and HPPI each shall have the right to
run such software on an unlimited number of
servers which it controls and shall ensure
that no distribution of such software is
permitted to any third party.
(b) Novation's, VHA's, UHC's and HPPI's license
to use the GHX Exchange Software set forth
in Section 6.4.3(a) is limited solely to
the extent necessary to enable
Participating Members to use the GHX
Exchange in the state it exists as of the
date of an Activation Event, and only for
such limited purpose. Novation, VHA, UHC
and HPPI will each be entitled: (i) to
modify and make derivative works of the
Client Software; (ii) to use, reproduce,
transmit and copy the Client Software, and
(iii) to sublicense the Client Software to
Participating Members; provided, however,
Novation, VHA, UHC and HPPI each agrees not
to use, reproduce, transmit, copy,
distribute or sublicense the Client
Software until the occurrence of an
Activation Event.
(c) In connection with the license granted
under Section 6.4.3(a), Novation, VHA, UHC
and HPPI each shall have the right to use
Updates to the Client Software that may
become available to Participating Members.
Upon such availability of Updates to the
Client Software or GHX Exchange Software,
as the case may be, Service Provider shall
provide each of Novation, VHA, UHC and HPPI
with one copy of each such Update (in
object code form only) without additional
charge. Additionally, every six months
during the Term of this Agreement, upon the
request of Novation, VHA, UHC or HPPI
Service Provider shall deliver to each of
Novation, VHA, UHC and HPPI, at no charge,
the current version of the GHX Exchange
Software (in object code form only) being
used by Service Provider in operating the
GHX Exchange at such time.
(d) The licenses set forth in Sections 6.4.3(a)
and (b) shall be activated upon the
occurrence of any of the following events
(each an "Activation Event"): (i) Service
Provider or its successor in interest makes
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a determination that it will no longer
operate the GHX Exchange (such
determination will be evidenced by: (A)
Service Provider or its successor in
interest giving written notice thereof; or
(B) Service Provider or its successor in
interest ceasing to operate the GHX
Exchange, and failing to respond to a
written request from Novation, VHA, UHC or
HPPI for confirmation of such cessation
within [****] of Service Provider's receipt
of such written request); (ii) Service
Provider has ceased its ongoing business
operations, or has ceased the sale,
licensing, maintenance or other support of
the Client Software and no successor of
Service Provider has undertaken the sale,
licensing, maintenance and/or support of
the Client Software; or (iii) the GHX
Exchange is not available to at least
[*****] of Participating Members or is not
available to at least [*****] of the
Suppliers integrated with the GHX Exchange,
where the period of unavailability in
either case is [*****] or greater, and the
foregoing is not due to a Force Majeure
event. For purposes of this paragraph,
unavailability of the GHX Exchange means
that the designated participants are unable
to transmit and receive transaction
communications due to failure of Service
Provider systems and operations and not due
to any outside factors that are outside of
Service Provider's control.
(e) Novation, VHA, UHC and HPPI's rights
related to the GHX Exchange Software and
Client Software that are licensed to
Novation, VHA, UHC and HPPI by Service
Provider under this Section 6.4.3 shall
cease upon the first to occur of following
events:
(i) The end of the Initial Term, or if
this Agreement has been renewed
prior to the Activation Event, the
Renewal Term.
(ii) Immediately upon termination of
this Agreement if this Agreement
has been terminated by Service
Provider as a result of an uncured
material breach by Novation, VHA,
UHC or HPPI.
(iii) If Novation, VHA, UHC and HPPI's
rights are activated as a result
of the event described in clause
(iii) of Section 6.4.3(d), then
such rights shall cease at such
time when Service Provider has
cured the factors that have caused
such event to occur and Service
Provider becomes able to fulfill
its obligations under the Member
Agreements to provide the GHX
Exchange, and Service Provider is
able to demonstrate such
capability to Novation's
reasonable satisfaction.
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6.4.4 Third Party Technology. Service Provider agrees to
reasonably assist and cooperate with Novation, VHA,
UHC and HPPI in their efforts to obtain, within
ninety (90) days after the Effective Date of this
Agreement, a non-exclusive sublicense for each of
Novation, VHA, UHC and HPPI to use, and sublicense
the Third Party Technology to Participating Members
solely for the purposes of operating the GHX
Exchange and distributing the Client Software as
necessary for such operation in accordance with
these terms. Service Provider shall not be required
to assume any additional fees or costs in connection
with its obligations under this section, and
Novation, VHA, UHC and HPPI shall be responsible for
all license fees and costs, including attorney fees,
associated with obtaining such rights from such
Third Party Technology providers.
6.4.5 Source Code Escrow.
(a) Prior to the Effective Date, Service
Provider shall have deposited a current
version of the source code (to the extent
such source code is owned by Service
Provider) for the GHX Exchange Software and
the Client Software and any other software
required to provide the Services and any
associated documentation that exists, other
than software relating to the Novation
Marketplace as it exists immediately before
the Effective Time (the "Current Version")
with Iron Mountain, Inc. or another escrow
agent reasonably agreed by the Parties (the
"Escrow Agent") pursuant to an escrow
agreement executed by each of the Parties
and the Escrow Agent, in form and substance
satisfactory to each of the Parties
("Escrow Agreement"). The Escrow Agreement
shall be based on the Escrow Agent's
standard three-party master escrow
agreement form, with release conditions
conforming to the Activation Events and
such other changes as are approved by the
Parties. None of the Parties shall
unreasonably withhold or delay its approval
of the Escrow Agreement. Service Provider
further agrees to deposit copies of the
source code of any Updates or other
modifications to the GHX Exchange Software
or the Client Software (together with the
Current Version, the "Source Code"), to the
extent there are Updates or other
modifications delivered to Novation, VHA,
UHC and HPPI, each [*****] during the Term
of this Agreement. Promptly after the
Effective Date and from to time to time
hereafter, Service Provider shall deposit,
or cause to be deposited all source code
relating to NPS in the escrow arrangements
contemplated by the Escrow Agreement.
(b) Upon the occurrence of an Activation Event
(as verified in accordance with the terms
of the escrow agreement), Novation, VHA,
UHC and HPPI each may exercise its rights
under the licenses set forth in Section
6.4.3 above with respect to the Source
Code, and the Escrow Agent shall deliver
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the Source Code to each of Novation, VHA,
UHC and HPPI. Upon the delivery of the
Source Code by the Escrow Agent, Novation,
VHA, UHC and HPPI each shall maintain the
Source Code in confidence in accordance
with Section 10.1. Novation, VHA, UHC and
HPPI each shall use the Source Code to
exercise Novation, VHA, UHC and HPPI's
rights under Section 6.4.3 and for no other
purpose. Novation, VHA, UHC and HPPI each
shall promptly return the Source Code to
escrow upon the first to occur of: (a) the
expiration of the Initial Term or if this
Agreement has been renewed prior to the
Activation Event, the Renewal Term; (b)
immediately upon termination of this
Agreement if this Agreement has been
terminated by Service Provider as a result
of an uncured material breach by Novation,
VHA, UHC and HPPI; (c) if Novation, VHA,
UHC and HPPI's rights with respect to the
Source Code are activated as a result of
the event described in clause (iii) of
Section 6.4.3(d), then such rights shall
cease at such time when Service Provider
has cured the factors that have caused such
event to occur and Service Provider becomes
able to fulfill its obligations to make the
GHX Exchange available, and Service
Provider is able to demonstrate such
capability to Novation's reasonable
satisfaction; or (d) when Novation, VHA,
UHC and HPPI have no further need to
utilize the licenses granted in this
Section 6.4. Novation, VHA, UHC and HPPI
shall each be liable to Service Provider
for all damages incurred by Service
Provider arising from or relating to any
unauthorized disclosure of the Source Code
by it, or any third party operating under
the direction of it. All expenses
associated with providing the Source Code
escrow for the benefit of Novation, VHA,
UHC and HPPI shall be paid by Novation.
(c) Service Provider shall cause Neoforma (or
its successor, if any) to maintain in full
force and effect any source code escrow in
effect on the Effective Date until the
Migration Deadline. Service Provider shall
also cause Neoforma (or its successor) to
promptly deposit in such escrow any and all
material revisions or modifications after
the Effective Date to the software that is
the subject of such escrow. In lieu of the
foregoing, Service Provider may subject all
such software to the Escrow Agreement, in
which case "Source Code" shall be deemed to
include, in addition to the GHX Exchange
Software and Client Software, all the
corresponding software relating to the
Novation Marketplace.
6.4.6 Proprietary Rights; Restrictions. Notwithstanding
anything to the contrary expressed or implied in
this Agreement, Service Provider (or, as applicable,
its licensors) retains all right, title, interest,
and Intellectual Property Rights in and to the GHX
Exchange and any derivative works thereof. Except
only as expressly set forth in this Section 6.4,
none of Novation, VHA, UHC or HPPI may itself, or
allow any third party to: (a) modify or otherwise
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generate any derivative works from the GHX Exchange;
or (b) disassemble, decompile or otherwise reverse
engineer the GHX Exchange or attempt to reveal the
trade secrets, know-how, source code (except as
expressly permitted under Section 6.4.5), or
structure underlying the GHX Exchange. None of
Novation, VHA, UHC or HPPI shall provide access to
the GHX Exchange to any third party except as is
expressly authorized in this Agreement. Service
Provider reserves to itself all rights with respect
to the GHX Exchange not expressly granted to
Novation, VHA, UHC or HPPI under this Agreement.
7. FEES AND TAXES
7.1 Fees. [*****] shall pay the fees set forth as part of Exhibit
B ("Scope of Services") for [*****], the [*****], [*****] and
the [*****] (the "Service Fees"). Fees for [*****] (other
than [*****] and [*****]) shall be as set forth in the
applicable [*****]. [*****] who wish to receive the [*****]
shall be responsible for the [*****].
7.2 Taxes. Service Provider, Novation, VHA, UHC and HPPI shall
take reasonable steps to cooperate to minimize any local,
state, national and foreign taxes (including, without
limitation, sales, use and VAT taxes which may apply),
licenses, export/import fees and any other fees or similar
obligations relating to any sale, rental or lease of a
Product through the Novation Marketplace or the GHX Exchange
or relating to [*****].
7.3 Other Expenses. No Party shall be required to pay to any
other Party any amounts for the performance of their
respective obligations hereunder other than those expressly
set forth in this Agreement.
7.4 Payment Terms.
7.4.1 Invoices. Service Provider shall issue to Novation
at least thirty (30) days prior to the beginning of
a calendar month an invoice for the Service Fees and
other charges due Service Provider for such calendar
month hereunder and not otherwise invoiced
(collectively, "Charges").
7.4.2 Payments. All invoices submitted by Service Provider
to Novation are due and payable on or before the
first day of a calendar month.
7.4.3 Credits. With respect to any amounts to be paid or
reimbursed by Service Provider to Novation pursuant
to this Agreement or pursuant to liquidated damages
provisions, as set forth in Section 2.3.1, Service
Provider may, at its option, pay such amounts to
Novation by giving Novation a credit to be applied
against Charges otherwise payable to Service
Provider.
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-29-
7.5 Member-Based Pricing.
7.5.1 Conversion to Member-Based Pricing. Except for
[*****] Member-Based Pricing (as addressed in
7.5.2), the Parties shall begin to convert to
pricing based on payment for the [*****] by the
Members ("Member-Based Pricing") by [*****].
Notwithstanding the foregoing, upon the prior
written approval of VHA, UHC and Novation, they may
elect to [*****] the date for conversion to
Member-Based Pricing at any time. Upon the earlier
of written notice from Novation that Novation, VHA
and UHC have elected to proceed with Member-Based
Pricing on [*****] basis, or [*****], the Parties
shall work together in good faith to develop a
detailed plan for such conversion beginning at least
[*****] prior to the anticipated date of conversion
to Member-Based Pricing. Upon written approval of
such a Plan by each of Novation, VHA and UHC, each
Party shall be obligated hereunder to take the
respective actions set forth under such plan by the
applicable deadlines set forth therein. In
developing the detailed plan, the parties shall
negotiate appropriate amendments to this Agreement
to (i) credit in full against the [*****] [*****]
amounts collected from [*****] of [*****] and/or
[*****] paying under Member-Based Pricing, and (ii)
specify payment mechanics to effect the foregoing
credit.
7.5.2 [*****] Member-Based Pricing. Notwithstanding
Section 7.5.1, [*****] Members shall pay for access
to the [*****] (including any [*****] services if
they so elect) through Member-Based Pricing as of
the Effective Date, which Member-Based Pricing shall
be subject to Section 2.2.3.
8. TERM AND TERMINATION
8.1 Initial Term. This Agreement shall become effective at the
Effective Time and will remain in effect until 11:59 P.M.
Central Time Zone on December 31, 2011 (the "Initial Term"),
unless terminated earlier in accordance with the terms of
this Agreement.
8.2 Renewal and Extension of Term. None of the Parties shall be
obligated to renew or extend this Agreement beyond the
Initial Term. However, if Service Provider wishes to extend
or renew this Agreement, then at least [*****] prior to the
expiration of the Initial Term, Service Provider shall
deliver to each of the other Parties a proposal describing
the terms on which this Agreement would be extended for an
additional [*****] ("Renewal Proposal"). The pricing in the
Renewal Proposal shall be the most favorable pricing that
Service Provider provides, directly or indirectly, to any
Person that receives services that are the same as or
substantially similar to any of the Services to be provided
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-30-
during the Renewal Term, unless otherwise specifically
disclosed in the Renewal Proposal (such disclosure to include
how the proposed pricing differs from any more favorable
pricing). At least [*****] prior to the expiration of the
Initial Term, each of Novation, VHA or UHC shall provide
notice to Service Provider and to the other Parties of its
intent to (i) accept the Renewal Proposal describing the
terms on which this Agreement will be extended, and the
appropriate Parties shall promptly begin drafting a renewal
agreement including such terms; (ii) not renew this Agreement
("Non-Renewal Notice"); or (iii) negotiate with Service
Provider the terms on which to renew the Agreement. Any
statement or notice of such intent by a Party is not binding
on any other Party. In the event that all of the Parties
agree in writing on terms for a Renewal Term, the Agreement
shall, except as otherwise expressly agreed in writing, renew
for one (1) [*****] term after the completion of the Initial
Term ( "Renewal Term"). The Initial Term and any and all
renewals or extensions thereof and any Termination Assistance
Period are referred to herein as the "Term".
8.3 Termination for Cause or Dissolution.
8.3.1 For Cause. Each of Service Provider and Novation
will have the right to terminate this Agreement if
such other Party breaches any of its obligations
under this Agreement in any material respect unless
the breaching Party (x) cures such breach within
[*****] after receiving written notice of such
breach or (y) if such breach is not curable within
such [*****] period, makes substantial progress in
curing such breach within such [*****] period and
cures such breach within [*****] after receiving
written notice of such breach. Novation may
terminate this Agreement (i) for Service Provider's
failure to meet its Service Level obligations
hereunder only as set forth in Exhibit C or (ii) if
Service Provider is unable to perform for more than
[*****] all or a substantial portion of the Services
due to any third party claim of infringement or
misappropriation of Intellectual Property Rights
whether or not it is the subject of indemnification
hereunder. Any dispute regarding whether a breach
has occurred or has been cured or the nature of such
breach shall be addressed in accordance with Section
17.
8.3.2 [*****] [*****]. [*****] that the [*****], [*****]
[*****], [*****] from [*****] [*****] to [*****],
[*****] [*****] and [*****] ("[*****]") is [*****]
(and [*****] [*****] by [*****] [*****] [*****])
(the "[*****]"), as [*****] the [*****] by [*****]
[*****] or [*****] in a [*****] [*****] to [*****],
[*****] of [*****], [*****] and [*****] shall,
[*****] to [*****] [*****] [*****], [*****] [*****]
[*****] [*****] for the [*****] of the [*****]
[*****] with [*****] upon the [*****] and [*****]
[*****], with the [*****] [*****] for the [*****] to
be [*****] [*****] the [*****] [*****] [*****] to be
[*****] as [*****] in [*****] by [*****] and shall
[*****] [*****] the [*****] [*****] [*****] [*****]
[*****]. [*****] shall [*****] in [*****] with
[*****] or [*****] if [*****] [*****] [*****] to
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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[*****] the [*****] to be [*****] [*****] [*****] a
[*****] [*****] in [*****] to [*****] [*****]'s
[*****] and the [*****] [*****] for [*****] [*****];
provided that, if [*****] [*****] to [*****] [*****]
[*****] and [*****], [*****] shall [*****] [*****]
[*****] to [*****] [*****] by an [*****] [*****]
[*****] [*****] its [*****] are [*****]. If [*****]
by [*****] [*****] or [*****] of [*****] or [*****],
[*****] shall [*****] a [*****] "[*****]" for the
[*****] [*****] [*****] and [*****] a [*****]
[*****] for [*****] [*****] .
8.3.3 Termination of Merger Agreement. This Agreement
shall terminate, automatically and without notice,
if, prior to the Effective Time, the Merger
Agreement is terminated in accordance with its
terms.
8.4 Termination for Insolvency Events.
8.4.1 Service Provider Insolvency Event. If Service
Provider becomes or is declared insolvent, becomes
subject to a voluntary or involuntary bankruptcy or
similar proceeding, or makes an assignment for the
benefit of all or substantially of all of its
creditors ("Insolvency Event"), then in such event,
Novation may terminate this Agreement immediately
upon providing written notice of termination to
Service Provider or, if such termination is subject
to any statutory provision or judicial order staying
such action, seek leave to modify such stay so as to
terminate this Agreement.
8.4.2 Novation Insolvency Event. If Novation becomes the
subject of an Insolvency Event, each of Service
Provider, VHA and UHC shall, pursuant to good faith
negotiations, enter into separate agreements for the
remainder of the current Term with Service Provider
upon the terms and conditions hereof, with the
aggregate price for the Services to be rendered
under the new separate agreements to be allocated as
directed in writing by VHA and UHC and shall not
exceed the total amounts otherwise due hereunder.
Service Provider shall negotiate in good faith with
VHA or UHC if such Party wishes to reduce the
Services to be received under such a separate
agreement in order to reduce Service Provider's
costs and the amounts due for such Services;
provided that, if Service Provider agrees to reduce
such Services and Fees, Service Provider shall have
no obligation to reduce fees by an amount greater
than its costs are reduced. If requested by any one
or more of VHA or UHC, Service Provider shall
establish a separate "look and feel" for the Party
so requesting and charge a reasonable fee for such
service.
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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8.4.3 [*****] [*****] [*****] [*****]. [*****] [*****]
[*****] [*****] (the "[*****]") [*****] the [*****]
[*****] [*****] [*****] [*****], [*****] of [*****]
and the [*****] [*****] ([*****] [*****] and the
[*****]) (the "[*****]") shall, [*****] to [*****]
[*****], [*****] [*****] [*****] [*****] for the
[*****] of the [*****] [*****] with [*****] [*****]
the [*****] and [*****] [*****], with the [*****]
[*****] for the [*****] to be [*****] [*****] the
[*****] [*****] [*****] to be [*****] as [*****]
[*****] [*****] [*****] by the [*****]. [*****]
shall [*****] in [*****] with [*****] [*****] if
[*****] [*****] [*****] to [*****] the [*****] to be
[*****] [*****] [*****] a [*****] [*****] in [*****]
to [*****] [*****]'s [*****] and the [*****] [*****]
for [*****] [*****] as [*****] a [*****] of
[*****]'s [*****] and the [*****] [*****] for
[*****] [*****] as [*****] a [*****] of [*****]'s
[*****] and the [*****] [*****] for [*****] by
[*****] of the [*****] of [*****] to the [*****].
[*****] [*****] [*****] shall [*****] [*****]
[*****] the [*****] [*****]: (a) the [*****] [*****]
for the [*****] to be [*****] [*****] the [*****]
[*****] [*****] shall [*****] [*****] [*****] the
[*****] [*****] [*****]; (b) [*****] shall [*****]
[*****] [*****] to [*****] [*****] [*****] an
[*****] [*****] [*****] its [*****] are [*****]; (c)
[*****] shall [*****] [*****] [*****] to [*****]
[*****] than [*****] [*****] (as defined below)
[*****] to the [*****]; (d) [*****] [*****] shall
[*****] the [*****] to [*****] [*****] [*****] as
[*****] [*****] if, [*****] a [*****] [*****]
[*****] [*****] ([*****] the [*****] and [*****]
[*****]) [*****], it [*****] [*****] the [*****] to
[*****] the [*****] [*****] it [*****] [*****] to
the [*****] for [*****] [*****] [*****] to [*****]
[*****][*****] [*****] [*****] [*****] [*****]
[*****] to the [*****]; and (e) [*****] shall
[*****] [*****] the [*****] to [*****] [*****] as
[*****] [*****] [*****] if , [*****] a [*****]
[*****] [*****] ([*****] the [*****] and [*****]
[*****]) [*****], [*****] [*****] [*****] the
[*****] [*****] it [*****] to the [*****] [*****] to
the [*****] and [*****] the [*****] to [*****] an
[*****] [*****] for [*****] [*****] at [*****] to
(and [*****] [*****] [*****]) the [*****]' [*****]
[*****] to the [*****]. In the event that [*****]
[*****] [*****] [*****] and the [*****] [*****] to
[*****] [*****] [*****] for the [*****] of the
[*****] [*****], [*****] any of [*****] or the
[*****] [*****] [*****] [*****] [*****]. [*****]
[*****] by [*****] [*****] or [*****] of [*****],
[*****] shall [*****] a [*****] "[*****]" for the
[*****] [*****] [*****] and [*****] a [*****]
[*****] for [*****] [*****]. [*****] [*****] [*****]
[*****] is [*****] to [*****] a [*****] or [*****]
of [*****] [*****] that [*****] or [*****] [*****]
[*****] [*****][*****] [*****] [*****] that [*****]
the [*****] of an [*****] or [*****] [*****].
[*****], and [*****] [*****] [*****][*****] [*****]
[*****],[*****] [*****] [*****] [*****] [*****]
[*****] [*****] [*****] to [*****] the [*****] of an
[*****] to [*****]. "[*****]" [*****] [*****], with
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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respect to [*****] and the [*****] [*****]
[*****],[*****] [*****] [*****]'s [*****] of the
[*****] [*****] [*****] the [*****] [*****] [*****]
[*****] [*****] [*****] to the [*****].
8.5 Termination Upon Service Provider Change of Control. Service
Provider shall promptly notify Novation of the effectiveness
of any Service Provider Change of Control. In the event
Novation has not previously consented to a Service Provider
Change of Control, Novation shall have the right to terminate
this Agreement effective on the date specified in Novation's
notice of termination, in the event of receipt of any such
notice from Service Provider of a Service Provider Change of
Control, or upon the effectiveness of any Service Provider
Change of Control or thereafter in the event no notice is
given in accordance herewith.
8.6 Return of Materials. Upon termination or expiration of this
Agreement and any applicable Termination Assistance Period
for any reason, Service Provider, Novation and each of the
Alliances shall promptly return to the other Parties, and
shall not take, use or disclose, all records (in any form,
format or medium) containing or relating to Service Provider
Materials or Novation Materials or the Confidential
Information of the other Parties, except that Service
Provider and Novation may each maintain a copy of such
records for archival purposes, to meet obligations to joint
owners of Transaction Data, to comply with laws, for internal
audit purposes, for purposes of defense of litigation, for
continuity of business purposes and to establish or protect a
Party's rights under this Agreement, and Novation shall
provide a copy to each of VHA, UHC and HPPI for such
purposes.
8.7 Survival. All rights and obligations with regard to
information disclosed or matters occurring or arising before
the effective date of termination, and all rights and
obligations which by their terms are intended to survive
termination or expiration of this Agreement, will survive
such termination or expiration, including, without
limitation, the rights and obligations set forth in Sections
6.4.3, 6.4.5, 6.4.6, 8.6, 8.7, 8.8, 8.9, 9, 10, 11.3.2, 11.4,
14, 15, 16, 17, 18 and 19, and the final sentence of Section
2.5.4(d). The foregoing rights and remedies shall be
cumulative and in addition to all other rights and remedies
available in law and in equity.
8.8 Termination Assistance Services. Upon the later of
termination or expiration of this Agreement or the end of the
Termination Assistance Period, Service Provider will (i)
de-activate all Identifications of Novation, the Alliances
and all Participating Members who are not subject to
Member-Based Pricing at such time, and (ii) if this Agreement
has expired or if any party other than Service Provider has
terminated this Agreement in accordance with Section 8.3.1,
refund an allocable portion of Fees paid for any period after
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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termination and provide Novation and each Alliance with an
electronic copy of the Member Data and [*****] . Service
Provider hereby grants to Novation and each Alliance the
perpetual right to use the foregoing materials for their use
internally and with their Members and, if applicable, for
re-hosting and use on an e-commerce system that is
competitive with the GHX Exchange, solely for the use of
Novation, the Alliances and their Members. Service Provider
will provide the Termination Assistance Services during the
Termination Assistance Period. Except as otherwise provided
in this Section 8.8, this Agreement shall remain in full
force and effect during the Termination Assistance Period.
For the first [*****] of the Termination Assistance Period,
the Charges required to be paid hereunder shall be reduced by
[*****]. Thereafter, Termination Assistance Services shall be
provided at Service Provider's then-current Charges.
8.9 Equitable Remedies. Each Party reserves its rights to seek
equitable relief in connection with the enforcement of any of
its rights hereunder. If a court of competent jurisdiction
should find that any Party has breached (or attempted or
threatened to breach) any of its obligations hereunder, such
Party agrees that even without any additional findings of
irreparable injury or other conditions to injunctive relief,
it shall not oppose the entry of an appropriate order
compelling performance by it or restraining it from further
breaches (or attempted or threatened breaches).
9. DATA RIGHTS; INTELLECTUAL PROPERTY
9.1 Data Rights.
9.1.1 Member Data. Novation shall have the right to access
and use all Member Data as provided herein. For
purposes of this Agreement, "Member Data" shall be
defined as Transaction Data with respect to which
either (i) the applicable Participating Member or
(ii) the applicable Supplier has consented to
Novation's and the applicable Alliance's access to
and use of such Transaction Data either pursuant to
an agreement with Service Provider or Neoforma or as
separately agreed between the Member or Supplier, as
applicable, and Novation. During the Term, (i)
access of Novation or the applicable Alliance to
Member Data arising solely from the consent of a
particular Participating Member shall continue as
long as the Member remains a Participating Member
and is subject to an agreement with Service Provider
or Neoforma and as long as such Participating
Member's consent to such access remains in effect,
and (ii) Novation's access to Member Data arising
solely from a Supplier's consent shall continue as
long as the Supplier's consent to such access
remains uncontested and in effect.
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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9.1.2 Transaction Data. As between the Parties to this
Agreement, the parties to each transaction that is
executed in whole or in part via the GHX Exchange or
Novation Marketplace after the Effective Time (e.g.,
the applicable Supplier and Participating Member)
will each own the Transaction Data relating to such
transaction. Neither Service Provider nor Novation
may disclose any Transaction Data to any third party
without the consent of one of the owners of such
Transaction Data. All Transaction Data will be
deemed to be Confidential Information and therefore
subject to the provisions of Article 10 hereof (and
subject to rights and restrictions related to such
Transaction Data as apply between the Member and
Service Provider, Neoforma or Novation, as the case
may be).
9.1.3 Aggregated GHX Data. Service Provider will not
include Transaction Data in Aggregated GHX Data
without the consent of both the Supplier and the
Participating Member that are parties to the
transaction to which the Transaction Data relates.
Notwithstanding any provision of this Agreement to
the contrary, (i) no Aggregated GHX Data shall be
compiled by Service Provider or any of its
Affiliates in which Members are parties to more than
[*****] of the transactions that generate the
Transaction Data included in the compilation of
Aggregated GHX Data, (ii) neither Service Provider
nor any of its Affiliates, (including, without
limitation, any other GPO) shall have the right to
use any Transaction Data of Members of any Alliance
to create Aggregated GHX Data that permits a
recipient to compare GPOs or to compare academic
medical centers and non-academic medical centers,
and (iii) each of VHA, UHC and HPPI shall have the
right (subject to the terms of any license or other
permission of its Members) to aggregate Member Data,
to prepare Aggregated Alliance Member Data and to
perform analysis using Member Data with respect to
each of their Members in each of its sole
discretion. If Service Provider begins offering
Aggregated GHX Data to third parties during the
Term, then Service Provider shall provide Aggregated
GHX Data that is based in part on the Member Data to
Novation [*****] during the [*****] period following
the Effective Date and, following such period but
prior to the expiration or termination of the Term,
at pricing [*****] [*****] [*****] the [*****]
[*****] [*****] by [*****] to [*****] [*****]
[*****] [*****] [*****] with [*****].
9.1.4 Aggregated Alliance Member Data. Each of VHA, UHC
and HPPI hereby grant the following licenses with
respect to its Aggregated Alliance Member Data:
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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(a) A nonexclusive, non-transferable
royalty-free license to Novation to access
and use such Aggregated Alliance Member
Data only as directed by each of VHA, UHC
or HPPI ; and
(b) A nonexclusive, non-transferable
royalty-free license to Service Provider to
use such Aggregated Alliance Member Data
only to the extent that such use is: (i)
required for the performance of Service
Provider's obligations pursuant to this
Agreement and (ii) in accordance with the
confidentiality provisions of Section 10.
Assuming that it has the requisite rights from its
Members, each Alliance may prepare (or cause a third
party, including Service Provider, to prepare on its
behalf) any and all (i) Aggregated Alliance Member
Data that the Alliance deems appropriate with
respect to its Members and (ii) combinations of such
data that two or more of the Alliances may deem
appropriate with respect to each of their Aggregated
Alliance Member Data, in each case without the
consent of or license from any Supplier.
9.1.5 Product Data. All Product Data provided by a
Supplier shall be owned by the Supplier of the
Product which the Product Data describes.
9.2 Analytic Data. Subject to the rights of Members and Service
Provider with respect to the underlying Transaction Data, all
Analytic Data shall be owned by Novation. Novation hereby
grants to each of UHC, VHA and HPPI a non-exclusive,
royalty-free license to use for any purposes whatsoever the
Analytic Data that Novation owns.
9.3 No Other Licenses or Use. Except as expressly set forth in
this Xxxxxxx 0, xxxx of the Alliances, Novation or Service
Provider grants any license, express or implied, in any of
the Transaction Data, Product Data, Analytic Data, [*****]
Data or [*****]. The failure to abide by the terms and
conditions of this Section 9 shall constitute a material
default of this Agreement.
9.4 Ownership by Third Parties. The GHX Exchange, the Novation
Marketplace [*****] and the AllSource(R) Catalog contain
third party Marks and other Intellectual Property belonging
to third parties, including Product Data and Transaction
Data. All such Intellectual Property is and will remain the
property of its respective owners. The Parties acknowledge
that, from time to time, the Parties may use third parties to
provide certain data for use on or in connection with the GHX
Exchange and the Novation Marketplace pursuant to a separate
agreement with a third party (e.g., supply line data that is
provided by [*****]). The Parties acknowledge that all data
that a Party gathers or develops independent of this
Agreement shall not be covered by this Agreement, provided
that Service Provider shall not solicit any such information
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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from a Member without fully disclosing to the Member all
intended uses for which such information is being collected
and will be used.
9.5 Intellectual Property.
9.5.1 Deliverables. As between Service Provider and VHA,
UHC, HPPI or Novation, as the case may be, the
ownership of all Deliverables created pursuant to
Section 4 of this Agreement and all Intellectual
Property Rights related thereto shall be mutually
agreed by the parties to each SOW and set forth
therein.
9.5.2 Proprietary Rights; Restrictions. Notwithstanding
anything to the contrary expressed or implied in
this Agreement, but subject to Article 4 hereof,
each Party (or, as applicable, its licensors)
retains all right, title, interest in and to its
Intellectual Property, and any derivative works
thereof and improvements thereto, and each Party
reserves to itself all rights with respect thereto.
For purposes of this Agreement, "Intellectual
Property" collectively means any and all copyrights,
patents, patent registration rights, business
processes, data rights, mask works, Marks and
associated goodwill, trade secrets, know how, moral
rights, design and so-called "look and feel" and
graphical user interface, data flows, product and
connectivity specifications, schematics,
documentation, source code and object code, data
maps and definitions and other proprietary rights of
each Party, whether such is now existing or may
hereafter come into existence. With respect to
Service Provider, Intellectual Property includes,
without limitation: (i) the GHX Exchange (including,
without limitation, all web pages of such Exchange
and Service Provider's proprietary XML schema and
document type definitions, to the extent that the
same exist); (ii) the AllSource(R) Catalog; and
(iii) Aggregated GHX Data, but excluding in each of
(i) through (iii) Transaction Data and Product Data.
With respect to Novation, Intellectual Property
includes, without limitation: (i) Novation
Materials; (ii) Intellectual Property comprising or
included in Novation Proprietary Services; but
excluding in each of (i) and (ii) Transaction Data
and Product Data. As between Service Provider and
Novation on the one hand, and each of VHA, UHC and
HPPI on the other hand, each of VHA, UHC and HPPI
shall own the Aggregated Alliance Member Data with
respect to its Members. Notwithstanding the
foregoing and except as expressly provided in
Section 9.1.2, nothing in this Agreement shall
affect any Party's ownership or other rights in
Intellectual Property created or arising prior to
the Effective Date.
10. SAFEGUARDING OF DATA; CONFIDENTIALITY
10.1 Confidentiality.
10.1.1 Confidential Information. "Confidential Information"
means (i) business or technical information of any
Party, including, without limitation, information
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relating to a Party's product plans, designs, costs,
product prices, finances, marketing plans, business
opportunities, personnel, research, development,
know-how or the pricing information available to
Members, (ii) any information designated
"confidential" or "proprietary" or which, under the
circumstances, should reasonably have been
understood to be confidential, (iii) the terms and
conditions of this Agreement, (iv) all Transaction
Data, except as provided in Section 9, (v) as to
Novation and the Alliances, all [*****] , except as
provided in Section 9, (vi) with respect to an
Alliance, information regarding the affairs and
business of their respective Affiliates, Members or
customers, (vii) with respect to Novation, all
Novation Materials, the Novation Contracts and all
information contained therein or related thereto,
(viii) with respect to Novation and each Alliance,
all Aggregated Alliance Member Data relating to the
Members of such Alliance, (ix) with respect to GHX,
all Aggregated GHX Data and (x) with respect to
Novation and each Alliance, all Analytic Data
relating to the Members of such Alliance.
10.1.2 Confidentiality Obligations. Each Party agrees that
(i) it will not use or disclose to any other Party
or third Person including its Affiliates (other than
its wholly-owned subsidiaries) any Confidential
Information disclosed to it by any other Party
except as contemplated by this Agreement and (ii) it
will take all reasonable measures to maintain the
confidentiality of all Confidential Information of
each other Party in its possession or control, which
will in no event be less than the measures it uses
to maintain the confidentiality of its own
information of similar importance.
10.1.3 Exclusions. Section 10.1.2 will not prevent a Party
from disclosing Information that such Party
demonstrates: (i) is owned by such Party or its
Affiliates or is already known (except via a breach
of this Agreement) by the recipient Party or its
Affiliates without an obligation of confidentiality
other than under this Agreement, (ii) is publicly
known or becomes publicly known through no breach of
this Agreement or other unauthorized act of the
recipient Party, (iii) is rightfully received from a
third party, provided that (A) the source is not
known to be bound by a confidentiality agreement,
and (B) this clause (iii) shall in no event apply to
Transaction Data transmitted by or to Members, or
(iv) is independently developed by employees of a
Party or an Affiliate of a Party without use of the
other Party's Confidential Information. If
Confidential Information is required to be disclosed
pursuant to a requirement of a governmental
authority, such Confidential Information may be
disclosed pursuant to such requirement so long as
the Party required to disclose the Confidential
Information, to the extent possible, (i) provides
the Party that owns the Confidential Information
with timely prior notice of such requirement and
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
-39-
coordinates with such other Party in an effort to
limit the nature and scope of such required
disclosure and (ii) uses commercially reasonable
efforts to ensure that, within applicable law, such
Confidential Information will not be further
disclosed. If Confidential Information is required
to be disclosed in connection with the conduct of
any arbitration proceeding conducted pursuant to
Section 17, such Confidential Information may be
disclosed pursuant to and in accordance with the
approval and at the direction of the arbitrator
conducting such proceeding.
10.1.4 No License. Nothing contained in this Section 10.1
will be construed as obligating a Party to disclose
its Confidential Information to another Party, or as
granting to or conferring on a Party, expressly or
implied, any patent, copyright, Xxxx, trade secret
or other Intellectual Property Rights or any license
to the Confidential Information of the other Party.
10.1.5 Loss of Confidential Information. In the event of
any breach by the recipient Party of this Section
10.1 that results in a disclosure or loss of, or
inability to account for, any Confidential
Information of the furnishing Party, the receiving
Party shall promptly, at its own expense, (i) notify
the furnishing Party in writing, (ii) take such
commercially reasonable actions as may be necessary
or reasonably requested by the furnishing Party to
minimize the breach, and (iii) cooperate in all
reasonable respects with the furnishing Party to
minimize the breach and any damage resulting
therefrom.
10.2 Safeguarding of Data. Service Provider shall maintain
appropriate safeguards, consistent with prevailing industry
standards, against the destruction, inappropriate disclosure,
wrongful access or use, loss or alteration of Novation's or
either Alliance's Confidential Information in the possession
of Service Provider. In any event, Service Provider shall
maintain safeguards that are no less rigorous than those
maintained by Service Provider for its own information of a
similar nature and, in no event, less than a reasonable level
of safeguards. Novation and each Alliance shall maintain
appropriate safeguards, consistent with prevailing industry
standards, against the destruction, inappropriate disclosure,
wrongful access or use, loss or alteration of Service
Provider's Confidential Information in the possession of
Novation or such Alliance, as the case may be. In any event,
Novation and the Alliances shall maintain safeguards that are
no less rigorous than those maintained by Novation and the
Alliance for their own information of a similar nature and,
in no event, less than a reasonable level of safeguards.
10.3 Business Associate Provisions. To the extent reasonably
requested by any Party, each Party will enter into one or
more addenda to this Agreement to enable the other Parties to
satisfy their obligations as business associates of the
Members, including the obligation to extend certain
confidentiality obligations to subcontractors of such a Party
as a business associate.
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11. REPRESENTATIONS, WARRANTIES AND COVENANTS
11.1 Representations by Service Provider. Service Provider
represents and warrants to Novation, VHA, UHC and HPPI that
each of the following statements in this Section 11.1 are
true and correct as of the date hereof and as of the
Effective Time (except as otherwise provided below).
11.1.1 Due Organization. Service Provider is a limited
liability company duly organized, validly existing
and in good standing under the laws of the State of
Delaware.
11.1.2 Authority; Non-Contravention.
(a) Service Provider has all requisite limited
liability company power and authority to
enter into this Agreement and to perform
its obligations hereunder. The execution
and delivery of this Agreement and the
consummation of the transactions
contemplated hereby have been duly
authorized by all necessary limited
liability company action on the part of
Service Provider. This Agreement has been
duly executed and delivered by Service
Provider, and it constitutes the valid and
binding obligation of Service Provider,
enforceable against Service Provider in
accordance with its terms, except as
enforceability may be limited by bankruptcy
and other similar laws affecting the rights
of creditors generally and general
principles of equity.
(b) The execution and delivery of this
Agreement by Service Provider does not, and
the performance of this Agreement by
Service Provider will not, (i) conflict
with or violate the GHX Formation
Agreement, the GHX LLC Agreement or other
organizational documents of Service
Provider, (ii) conflict with or violate any
law, rule, regulation, order, judgment or
decree applicable to Service Provider or by
which Service Provider or any of its
properties is bound or affected or (iii)
result in any breach of or constitute a
default (or an event that with notice or
lapse of time or both would become a
default) under, or impair Service
Provider's rights or alter the rights or
obligations of any third party under, or
give to others any rights of termination,
amendment, acceleration or cancellation of,
or result in the creation of an encumbrance
on any of the properties or assets of
Service Provider pursuant to, any note,
bond, mortgage, indenture, agreement,
lease, license, permit, franchise or other
instrument or obligation to which Service
Provider is a party or by which Service
Provider or its assets is bound or
affected, except, in the case of clauses
(ii) and (iii), for such conflicts,
violations, breaches, defaults,
impairments, or rights which, individually
or in the aggregate, would not have a
material adverse effect on Service
Provider.
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(c) No consent, approval, order or
authorization of, or registration,
declaration or filing with any governmental
entity is required to be obtained or made
by Service Provider in connection with the
execution, delivery and performance of this
Agreement, except those already obtained as
of the Effective Date.
11.1.3 Performance. All Services will be performed
throughout the Term in a professional and
workmanlike manner.
11.1.4 Extension of Other Agreements. Except as otherwise
provided on Exhibit N hereto, all agreements with
members of Service Provider (including, without
limitation, HCA Inc., Premier, Inc. and each of
their Affiliates) have been extended until [*****]
on the same terms as were in effect on [*****],
other than amendments to its agreements with
Premier, Inc., HCA Inc. and their respective
Affiliates solely to conform certain provisions of
such agreements to the provisions of this Agreement
(the "Conforming Amendments"). Service Provider has
provided accurate and complete copies of such
agreements with each of such entities as they were
in effect on [*****] (or prior to the date of the
Merger Agreement in the case of the Conforming
Amendments), except for the redaction of certain
confidential information.
11.1.5 Source Code Escrow. As of the Effective Time, with
respect to all Source Code owned or controlled by
Service Provider immediately before the Effective
Date, Service Provider has taken all actions
required to be taken on or before the Effective Date
pursuant to Section 6.4.5.
11.1.6 Agreements.
(a) All agreements between Service Provider and
Suppliers that are currently in effect are
in the form provided to Novation and the
Alliance or have only immaterial
modifications thereto.
(b) All agreements between Service Provider and
any GPO that are currently in effect are
set forth on Exhibit M and complete copies
(subject to redaction of certain
confidential information) have been
provided to Novation and the Alliances.
Exhibit M also sets forth any pricing
policy, understanding or arrangement that
is currently in effect with respect to any
GPO that is not a party to an agreement
with Service Provider or members of such a
GPO.
(c) Service Provider charges a fee for all
services that it provides to customers,
except for its WebConnect product.
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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11.2 Representations by Novation, VHA, UHC and HPPI. Each of
Novation, VHA, UHC and HPPI, severally and not jointly,
represents and warrants to Service Provider that the
following statements made by it in this Section 11.2 are true
and correct as of the date hereof and as of the Effective
Time.
11.2.1 Due Organization. Novation is a limited liability
company duly organized, validly existing and in good
standing under the laws of the state of Delaware;
UHC is a corporation duly organized, validly
existing and in good standing under the laws of the
state of Illinois; VHA is a corporation duly
organized, validly existing and in good standing
under the laws of the state of Delaware; HPPI is a
limited liability company duly organized, validly
existing and in good standing under the laws of the
state of Delaware.
11.2.2 Authority; Non-Contravention.
(a) Each of Novation and HPPI has all requisite
limited liability company power and
authority, and each of VHA and UHC has all
requisite corporate power and authority, to
enter into this Agreement and to perform
its obligations hereunder. The execution
and delivery of this Agreement and the
consummation of the transactions
contemplated hereby have been duly
authorized by all necessary limited
liability company action on the parts of
Novation and HPPI and all necessary
corporate action on the parts of VHA and
UHC. This Agreement has been duly executed
and delivered by Novation, VHA, UHC and
HPPI, and it constitutes the valid and
binding obligation of each of Novation,
VHA, UHC and HPPI, enforceable against each
of Novation, VHA, UHC and HPPI in
accordance with its terms, except as
enforceability may be limited by bankruptcy
and other similar laws affecting the rights
of creditors generally and general
principles of equity.
(b) The execution and delivery of this
Agreement by Novation, VHA, UHC and HPPI
does not, and the performance of this
Agreement by each of Novation, VHA, UHC and
HPPI will not, (i) conflict with or violate
the limited liability company and corporate
organizational documents, respectively,
(ii) conflict with or violate any law,
rule, regulation, order, judgment or decree
applicable to Novation, VHA, UHC or HPPI or
by which Novation, VHA, UHC or HPPI, or any
of their respective properties are bound or
affected, or (iii) result in any breach of
or constitute a default (or an event that
with notice or lapse of time or both would
become a default) under, or impair
Novation's, VHA's, UHC's or HPPI's rights
or alter the rights or obligations of any
third party under, or give to others any
rights of termination, amendment,
acceleration or cancellation of, or result
in the creation of an encumbrance on any of
the properties or assets of Novation, VHA,
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UHC or HPPI pursuant to, any note, bond,
mortgage, indenture, agreement, lease,
license, permit, franchise or other
instrument or obligation to which Novation,
VHA, UHC or HPPI is a party or by which
Novation, VHA, UHC or HPPI, or any of their
assets, is bound or affected, except, in
the case of clauses (ii) and (iii), for
such conflicts, violations, breaches,
defaults, impairments, or rights which,
individually or in the aggregate, would not
have a material adverse effect on Novation,
VHA, UHC or HPPI, respectively.
(c) No consent, approval, order or
authorization of, or registration,
declaration or filing with any governmental
entity is required to be obtained or made
by Novation, VHA, UHC or HPPI in connection
with the execution, delivery and
performance of this Agreement.
11.3 Compliance with Laws and Regulations; Other Covenants.
11.3.1 Compliance with Laws. Service Provider represents
and warrants that throughout the Term, Service
Provider and the Services shall be and shall remain
in compliance with all applicable federal, state and
local laws and regulations. Each of Novation, VHA,
UHC and HPPI represents and warrants that throughout
the Term, Novation, VHA, UHC and HPPI shall be and
shall remain in compliance with all applicable
federal, state and local laws and regulations.
11.3.2 HHS and Comptroller General. Service Provider agrees
that, until the expiration of four (4) years after
the furnishing of any goods and services pursuant to
this Agreement, it will make available, upon written
request of the Secretary of Health and Human
Services or the Comptroller General of the United
States or any of their duly authorized
representatives, copies of this Agreement and any
books, documents, records and other data of Service
Provider that are necessary to certify the nature
and extent of the costs incurred by Members in
purchasing such goods and services. If Service
Provider carries out any of its duties under this
Agreement through a subcontract with a related
organization involving a value or cost of ten
thousand dollars ($10,000) or more over a
twelve-month period, Service Provider will cause
such subcontract to contain a clause to the effect
that, until the expiration of four (4) years after
the furnishing of any good or service pursuant to
said contract, the related organization will make
available upon written request of the Secretary of
Health and Human Services or the Comptroller General
of the United States or any of their duly authorized
representatives, copies of this Agreement and any
books, documents, records and other data of said
related organization that are necessary to certify
the nature and extent of costs incurred by Service
Provider for such goods or services. Service
Provider shall give Novation, VHA, UHC and HPPI
notice immediately upon receipt of any request from
the Secretary of Health and Human Services or the
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Comptroller General of the United States or any of
their duly authorized representatives for disclosure
of such information.
11.3.3 No Exclusion or Debarment. Service Provider
represents and warrants, as of the Effective Date,
that Service Provider has not: (a) been listed by
any federal or state agency as excluded, debarred,
suspended or otherwise ineligible to participate in
federal and/or state programs; or (b) been convicted
of any crime relating to any federal and/or state
program. Service Provider further agrees to
immediately notify Novation, VHA, UHC and HPPI in
writing in the event Service Provider is listed by a
federal or state agency as excluded, debarred,
suspended or otherwise ineligible to participate in
any federal and/or state programs or if Service
Provider is convicted of any crime relating to any
such program.
11.3.4 No Exchange of Competitively Sensitive Information.
None of Novation, VHA, UHC or HPPI will use the
Exchange or activities related to the Exchange for
the purposes of exchanging among Suppliers or their
Affiliates competitively sensitive information such
as prices or terms of sale.
11.4 Warranty Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, EACH OF NOVATION, VHA, UHC AND HPPI DISCLAIMS ALL
EXPRESS AND IMPLIED WARRANTIES, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES OF NON-INFRINGEMENT,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.
SERVICE PROVIDER MAKES NO REPRESENTATIONS, WARRANTIES OR
COVENANTS TO ANY OTHER PARTY HEREUNDER WITH RESPECT TO ANY
PRODUCTS SOLD THROUGH THE GHX EXCHANGE. EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT, SERVICE PROVIDER PROVIDES ALL
SERVICES HEREUNDER "AS IS." SERVICE PROVIDER HEREBY DISCLAIMS
ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NONINFRINGEMENT, AND IMPLIED WARRANTIES ARISING FROM
COURSE OF DEALING OR COURSE OF PERFORMANCE WITH REGARD TO THE
SERVICES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
SERVICE PROVIDER MAKES NO REPRESENTATION OR WARRANTY WITH
RESPECT TO ACCURACY OF DATA. SERVICE PROVIDER DOES NOT
WARRANT THAT IT WILL BE ABLE TO CORRECT ALL REPORTED DEFECTS
IN THE SERVICES OR THAT USE OF THE SERVICES, ACCESS TO
PRODUCT DATA OR LINKS TO OTHER SUPPLIER MATERIALS WILL BE
UNINTERRUPTED OR ERROR-FREE. EXCEPT AS EXPRESSLY PROVIDED
HEREIN, SERVICE PROVIDER PROVIDES NO WARRANTIES WITH RESPECT
TO THE FUNCTIONALITY OF THE GHX EXCHANGE SOFTWARE AND THE
CLIENT SOFTWARE. EXCEPT AS EXPRESSLY PROVIDED HEREIN, SERVICE
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PROVIDER MAKES NO WARRANTY REGARDING FEATURES, SOFTWARE OR
SERVICES PROVIDED BY THIRD PARTIES.
12. USE OF SUBCONTRACTORS; RIGHTS TO REQUEST REPLACEMENT
12.1 Generally. Service Provider may subcontract its obligations
under this Agreement subject to the limitations imposed by
this Section 12.1. Service Provider shall not subcontract any
Services included in the Member-Facing Plan to a Competitor.
12.2 Right to Request Replacement. Novation and each of the
Alliances shall have the right during the Term to request
that Service Provider withdraw and replace (or cause to be
withdrawn and replaced, as the case may be), as soon as
reasonably possible, an employee of Service Provider, any of
its Affiliates or subcontractors who is providing Services
included in the Member-Facing Plan. Service Provider will
approve any such request if Service Provider determines that
the individual's performance is materially deficient, good
faith doubts exist concerning the individual's ability to
render future performance, or there have been material
misrepresentations by or concerning the individual.
12.3 Continuing Responsibility. Service Provider shall remain
responsible for obligations performed by subcontractors to
the same extent as if such obligations were performed by
Service Provider. Service Provider shall be Novation's sole
point of contact regarding the Services, including with
respect to payment.
12.4 Confidential Information. Service Provider shall not disclose
Confidential Information of any of Novation, VHA, UHC, HPPI
or any of their Members to a subcontractor unless and until
such subcontractor has agreed in writing to protect the
confidentiality of such Confidential Information in all
material respects as required of Service Provider under this
Agreement.
13. INSURANCE
13.1 Insurance. Service Provider, Novation and each Alliance will
pay all costs and receive all benefits under policies
arranged by it, and each waives rights of subrogation it may
otherwise have regarding the other's insurance policies.
Service Provider will maintain and keep in force during the
Term general liability insurance, workers compensation
insurance and property damage insurance with a minimum
combined single limit of liability in the amount of not less
than [*****] per occurrence and [*****] in the aggregate and
will name Novation, VHA, UHC and HPPI, as their interests may
appear, as additional insureds. The foregoing liability
limits can be satisfied through a combination of primary and
excess policies.
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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13.2 Proof of Insurance. On the Effective Date and when otherwise
requested by Novation, Service Provider will provide a
certificate of insurance reflecting the coverage described in
Section 13.1 issued by an insurance company and signed by an
authorized agent. Service Provider will not amend, in any
material respect that affects the interests of Novation, VHA,
UHC, HPPI or the Members or terminate said insurance except
after thirty (30) days' prior written notice to Novation. In
addition, Service Provider shall provide Novation with at
least thirty (30) days prior written notice of any material
cancellation or material modification of such insurance by
the insurance company.
14. INDEMNITY
14.1 Service Provider Indemnity. Subject to Section 14.4, Service
Provider shall indemnify, defend and hold harmless each of
Novation, VHA, UHC and HPPI and each of their Affiliates,
officers, directors, employees, consultants and agents from
and against any and all damages, liabilities, claims,
actions, suits, proceedings, costs, charges and expenses,
including reasonable attorneys' fees (collectively,
"Losses"), incurred or sustained by any of such persons
arising from the claim of any Person who is not a Party
arising as a result of or from (i) the failure of Service
Provider to perform any of its obligations under any
agreement between Service Provider and a third party
(including, without limitation, any agreements between
Service Provider and a Supplier); (ii) any claims arising out
of Service Provider's breach of this Agreement; (iii) any
claim arising out of the death of or bodily injury to any
employee of any of Novation, VHA, UHC and HPPI and each of
their Affiliates (or their respective subcontractors) to the
extent caused by the gross negligence or willful misconduct
of Service Provider or its Affiliates; (iv) the loss of or
damage to the real or tangible personal property (whether
owned or leased) of any of Novation, VHA, UHC and HPPI and
any of their Affiliates, officers, directors, employees,
consultants and agents to the extent caused by the gross
negligence or willful misconduct of Service Provider or its
Affiliates; (v) Service Provider's failure to pay and
discharge any taxes (including interest and penalties) for
which Service Provider is responsible pursuant to the terms
of this Agreement; and (vi) any claim asserted against any of
Novation, VHA, UHC and HPPI and any of their Affiliates by an
employee of Service Provider to the extent such claim arises
from decisions, acts, omissions or violations of statute by
Service Provider with respect to such employee's
employee/employer relationship with Service Provider.
14.2 Novation Indemnity. Subject to Section 14.4, Novation shall
indemnify, defend and hold harmless each of Service Provider
and its Affiliates, officers, directors, employees,
consultants and agents from and against any and all Losses
awarded against or paid in settlement by Service Provider
incurred or sustained by any of such persons arising from the
claim of any Person who is not a Party arising as a result of
or from (i) the failure of Novation to perform any of its
obligations under any agreement between Novation and a third
party; (ii) any claims arising out of Novation's breach of
this Agreement; (iii) any claim arising out of the death of
or bodily injury to any employee of Service Provider or its
Affiliates (or their respective subcontractors) to the extent
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caused by the gross negligence or willful misconduct of
Novation or its Affiliates; (iv) the loss of or damage to the
real or tangible personal property (whether owned or leased)
of Service Provider and its Affiliates, officers, directors,
employees, consultants and agents to the extent caused by the
gross negligence or willful misconduct of Novation or its
Affiliates; (v) Novation's failure to pay and discharge any
taxes (including interest and penalties) for which Novation
is responsible pursuant to the terms of this Agreement; and
(vi) any claim asserted against Service Provider by an
employee of Novation to the extent such claim arises from
decisions, acts, omissions or violations of statute by
Novation with respect to such employee's employee/employer
relationship with Novation.
14.3 Infringement Claims.
14.3.1 Indemnity. Each of Service Provider and Novation,
VHA, UHC and HPPI, at their respective expense,
shall indemnify, defend and hold harmless the other
Party and its Affiliates, and their respective
officers, directors, employees, consultants, agents,
successors and assigns, from and against any and all
Losses arising from the claim of any Person who is
not a Party relating to any Services, software,
hardware or the indemnitor's Materials ("Item(s)")
provided or delivered by the indemnitor to the
indemnitee under this Agreement that, when used in
conformity with all applicable written instructions
and documentation, (i) infringes any United States
patent or United States copyright, or infringes or
otherwise violates any trademark rights under the
laws of the United States or any state thereof, or
(iii) constitutes misappropriation of any trade
secret that is enforceable in the United States
(each such third-party claim, action, suit or
proceeding, an "Infringement Claim").
14.3.2 Indemnity Exclusions. Notwithstanding anything to
the contrary herein, the indemnitor shall have no
obligation to defend or indemnify the indemnitee for
any Infringement Claim to the extent arising out of
or relating to (i) modifications to any Item made by
or on behalf of the indemnitee where but for such
modifications there would have been no Infringement
Claim, (ii) any Intellectual Property that is
embodied or otherwise included in [*****] as of the
Effective Date, (iii) any use of any Service
Provider Intellectual Property not in accordance
with this Agreement, (iv) any use of the GHX
Exchange in combination with other products,
equipment, software, or data not supplied by Service
Provider if the GHX Exchange can still be used and
infringement can be avoided by not using such other
product, equipment, software or data, or (v) any use
of any release of the GHX Exchange Software or
Client Software other than the most current release
made available to the Parties and their Members.
With respect to Third Party Technology, only the
indemnity, if any, given by the developer or
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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manufacturer thereof will apply, and Service
Provider shall not be obligated to provide any
indemnity hereunder for any third party claim to the
extent based on such Third Party Technology.
14.3.3 Injunction or Prohibition. If the indemnitee's use
of any Item is enjoined or otherwise prohibited, or
if the indemnitor reasonably believes that there
exists a threat of the same, the indemnitor shall
have the right, in its sole discretion and at its
expense, in addition to its indemnification
obligations above, to (i) obtain for the indemnitee
the right to continue to use the affected Item, or
(ii) replace or modify the affected Item so that it
becomes non-infringing and remains functionally
equivalent.
14.4 Indemnity Procedures. Promptly after receipt by an
indemnified party of a notice of any third party claim or the
commencement of any action, such indemnified party must (a)
notify the indemnifying party in writing of any such claim;
(b) provide the indemnifying party with reasonable assistance
to settle or defend such claim at the indemnifying party's
own expense; and (c) grant to the indemnifying party the
right to control the defense and/or settlement of such claim,
at the indemnifying party's own expense; provided, however,
that (i) the failure to so notify, provide assistance or
grant authority and control will only relieve the
indemnifying party of its obligation to the indemnified party
to the extent that the indemnifying party is prejudiced
thereby; (ii) the indemnifying party will not, without the
indemnified party's consent (such consent not to be
unreasonably withheld or delayed), agree to any settlement
which: (x) makes any admission on behalf of the indemnified
party; or (y) consents to an injunction against the
indemnified party (except an injunction relating solely to
the indemnified party's continued use of any infringing
Intellectual Property); and (iii) the indemnified party will
have the right, at its expense, to participate in any legal
proceeding to contest and defend a claim and to be
represented by legal counsel of its choosing, but will have
no right to settle a claim without the indemnifying party's
written consent, such consent not to be unreasonably withheld
or delayed, and (iv) in the event the indemnifying party
elects not to assume the control granted pursuant to clause
(c) above, the indemnified party will have the right,
notwithstanding anything in the preceding clause (iii) to the
contrary, to control the defense and/or settlement of such
claim, at the indemnifying party's expense. The indemnifying
party shall not be required to indemnify the indemnified
party for the cost of the arbitrators' fees, the allocation
of which is set forth in Section 17.
14.5 Exclusive Remedy. NOTWITHSTANDING ANYTHING ELSE CONTAINED IN
THIS AGREEMENT TO THE CONTRARY, SECTIONS 14.1, 14.2 AND 14.3
SET FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE INDEMNITEES,
AND THE ENTIRE OBLIGATION AND LIABILITY OF THE INDEMNITORS,
FOR ANY CLAIMS BY ANY PERSON WHO IS NOT A PARTY TO THIS
AGREEMENT.
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15. LIMITATION OF LIABILITY
EXCEPT FOR EACH PARTY'S OBLIGATIONS UNDER SECTIONS 10
(CONFIDENTIALITY) AND 14 (INDEMNIFICATION) OF THIS AGREEMENT AND
EXCEPT FOR PAYMENT OF FEES, NO PARTY'S AGGREGATE LIABILITY FOR ALL
CLAIMS OF ANY KIND (INCLUDING DEATH OR BODILY INJURY), WHETHER BASED
ON CONTRACT, INDEMNITY, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT
LIABILITY OR OTHERWISE, FOR ALL LOSSES OR DAMAGES ARISING OUT OF,
CONNECTED WITH, OR RESULTING FROM THIS AGREEMENT OR FROM THE
PERFORMANCE OR BREACH OF THIS AGREEMENT, OR FROM ANY SERVICES COVERED
BY OR FURNISHED UNDER THIS AGREEMENT, WILL IN ANY CASE EXCEED THE
EQUIVALENT OF THE SUM OF THE AMOUNTS PAID TO SERVICE PROVIDER BY
NOVATION PURSUANT HERETO DURING THE [*****] ENDING IMMEDIATELY PRIOR
TO THE CLAIM. EXCEPT FOR EACH PARTY'S INDEMNIFICATION OBLIGATIONS
UNDER SECTION 14 OF THIS AGREEMENT OR AMOUNTS PAYABLE PURSUANT TO
EXHIBIT C, NO PARTY WILL BE LIABLE FOR ANY LOSS OF BUSINESS, USE OR
DATA, INTERRUPTION OF BUSINESS, LOST PROFITS OR GOODWILL, OR OTHER
INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF
ANY KIND, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH LOSS, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OR OF
ANY LIMITED REMEDY. NO PARTY WILL APPLY FOR, SEEK OR OTHERWISE REQUEST
FROM ANY COURT, RELIEF OR REMEDY IN THE FORM OF EXEMPLARY OR PUNITIVE
DAMAGES.
16. AUDIT RIGHTS
16.1 General. Subject to the following provisions of this Section
16, upon reasonable prior written notice from Novation,
Service Provider shall provide to such third-party auditors
as Novation may designate in writing, access during normal
business hours to Service Provider's applicable facilities
and to appropriate Service Provider management personnel and
subcontractors, and to applicable data and records maintained
by Service Provider with respect to the Services for the
purpose of confirming Service Provider's compliance with this
Agreement. To the extent applicable to the Services performed
by Service Provider, the scope of such audits may include,
without limitation, (i) Service Provider's practices and
procedures, (ii) Service Provider's computer systems, (iii)
the adequacy of general controls and security practices and
procedures, (iv) the adequacy of disaster recovery and
back-up procedures, (v) any matter necessary to enable
Novation to meet applicable legal or regulatory requirements,
(vi) Service Provider's compliance with Service Levels and
(vii) billing data and records relating to the Services. Any
such audit shall be conducted in a manner so as to minimize
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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any disruption to Service Provider's business. Subject to
Section 16.6, such audits shall be conducted at the expense
of Novation.
16.2 Frequency of Audits. Novation shall not have the right to
conduct more than one audit in any 12-month period.
16.3 Auditors. The auditor conducting such audit shall be subject
to the approval of all the Parties, such approval not to be
unreasonably withheld or delayed, and shall be bound by
written confidentiality provisions at least as restrictive as
those contained in this Agreement.
16.4 Record Retention. In order to document the Services and the
fees and expenses paid or payable by Novation under this
Agreement, Service Provider shall retain its standard records
and supporting documentation for the greater of (i) five (5)
years or (ii) the period required by applicable law or (iii)
the period under which a claim could be asserted under
applicable law with respect to the transaction to which the
records relate.
16.5 Cooperation. Service Provider shall use commercially
reasonable efforts to assist such auditors in connection with
such audits.
16.6 Overcharges and Undercharges. If, as a result of any such
audit, the auditor determines that Service Provider has
overcharged or undercharged Novation, Novation, VHA, UHC or
HPPI shall notify Service Provider of the amount of such
overcharge or undercharge and Service Provider or Novation,
as applicable, shall promptly pay to the other the amount of
the overcharge or undercharge, plus interest at a rate of 1%
per month or the maximum rate permitted by law, whichever is
less, calculated from the date of receipt by Service Provider
of the overcharged or undercharged amount until the date of
payment. If any such audit reveals an overcharge to Novation
during any 12-month period exceeding seven percent (7%) of
Novation's aggregate fees hereunder for such period, Service
Provider shall reimburse Novation for the reasonable
out-of-pocket costs and expenses incurred for such audit.
16.7 Audit Reports. Service Provider and Novation shall meet to
review each audit report promptly after the issuance thereof
and to mutually agree upon the appropriate manner, if any, in
which to respond to the changes suggested by the audit
report.
17. DISPUTE RESOLUTION
Except as provided in Section 8.9, all disputes arising out of or in
connection with the execution, interpretation, performance or
nonperformance of this Agreement will be resolved in accordance with
the procedures set forth in Article VIII of the GHX Formation
Agreement, mutatis mutandis.
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18. GENERAL PROVISIONS
18.1 No Waiver. The delay or omission by any Party to exercise or
enforce any right or power of any provision of this Agreement
shall not be construed as a waiver or relinquishment to any
extent of such Party's right to assert or rely upon any such
provision or right in that or any other instance. A waiver by
any Party of any of the covenants to be performed by any
other or any breach thereof shall not be construed to be a
waiver of any succeeding breach thereof or of any other
covenant herein contained.
18.2 Entire Agreement. This Agreement and the Exhibits attached
hereto, and the GHX Formation Agreement, the GHX LLC
Agreement, and the Merger Agreement to the extent
specifically referred to in this Agreement, together
constitute the complete and exclusive agreement between the
Parties, and supersede any and all prior agreements of the
Parties with respect to the subject matter hereof. This
Agreement and the Exhibits attached hereto may be amended or
modified, or any rights under it waived, only by a written
document executed by all of the Parties.
18.3 Publicity. Except as required by law or provided in this
Agreement, no Party will make any public statement, press
release or other announcement relating to the terms of or
existence of this Agreement without the prior written
approval of all other Parties. In addition, the Service
Provider shall not make any public statement, press release
or other announcement (i) relating to the Services that uses
the name of a Member without such Member's prior written
approval and, except in the case of Participating Members
subject to Member-Based Pricing, the approval of the Alliance
to which such Member belongs; or (ii) regarding the
Deliverables without the approval of Novation, UHC, VHA or
HPPI, as the case may be. The Parties will cooperate prior to
the filing of any public document which may require the
filing of this Agreement as an exhibit or the filing of a
description thereof in order to preserve the confidentiality
and proprietary information contained herein.
18.4 Assignment; Successors and Assigns. This Agreement will be
binding on the Parties and their respective successors and
permitted assigns. No Party may, or will have the power to,
assign this Agreement without the prior written consent of
all other Parties. Notwithstanding the foregoing, no
assignment made in respect of or as a result of any
dissolution of Novation will be deemed an assignment for
which prior consent is required, and such assignment will be
valid (it being understood that this provision does not
supersede the Parties' rights and obligations under Section
8.3.2). Notwithstanding the foregoing, nothing shall restrict
Service Provider from performing any of its obligations
hereunder and/or in connection with services provided to
Participating Members through any of its wholly-owned
subsidiaries, or through subcontractors in accordance with
Section 12 above, provided that Service Provider remains
liable for all performance hereunder.
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18.5 Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of
Illinois, without regard to or application of conflicts of
law rules or principles.
18.6 Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed given if sent by
prepaid registered or certified United States mail, return
receipt requested, or overnight mail with a nationally
recognized overnight mail courier, or by personal delivery,
addressed to another Party at the address shown below or at
such other address for which such Party gives notice
hereunder. Notices will be deemed given five business days
after deposit in the United States Mail, two business days
after deposit with an overnight mail courier, or if by
personal delivery, when received, as applicable:
If to Novation:
Novation, LLC
000 Xxxx Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: General Counsel
If to VHA: With a copy to:
VHA, Inc. Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxx Xxx Xxxxxxx Xxxxxxxxx Four Times Square
Irving, Texas 75039-5500 Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Chief Financial Officer Attn: Xxxxx X. Xxxxxxxxx, Esq.
If to UHC: With a copy to:
University HealthSystem Consortium XxXxxxxxx Will & Xxxxx LLP
0000 Xxxxxx Xxxx, Xxxxx 000 000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel Attn: Xxxx X. Xxxx, Esq.
If to Service Provider: With a copy to:
Global Healthcare Exchange, LLC Sidley Xxxxxx Xxxxx & Xxxx LLP
00000 Xxxxxxxx Xxxxxx, Xxxxx 000 One South Dearborn Street
Westminster, CO 80021 Xxxxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
18.7 No Agency. Except as otherwise expressly provided herein, the
Parties are independent contractors and will have no power or
authority to assume or create any obligation or
responsibility on behalf of each other. This Agreement will
not be construed to create or imply any partnership, agency
(except as expressly provided herein) or joint venture.
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18.8 Force Majeure.
18.8.1 Performance Excused. Subject to 18.8.2, no Party
shall be liable for any default or delay in the
performance of its obligations under this Agreement
if and to the extent such default or delay is
caused, directly or indirectly, by: flood,
earthquake, elements of nature or acts of God,
riots, civil disorders, terrorism, rebellions or
revolutions in any country, or any other cause
beyond the reasonable control of such Party,
provided that (i) the non-performing Party has taken
reasonable measures to prevent such default or delay
and (ii) such default or delay cannot reasonably be
circumvented by the non-performing Party through the
use of alternate sources, workaround plans or other
means (including with respect to Service Provider,
by Service Provider executing its disaster recovery
plans).
18.8.2 Period of Excused Performance. In such event, the
non-performing Party shall be excused from further
performance or observance of the obligation(s) so
affected for as long as such circumstances prevail
and such Party continues to use commercially
reasonable efforts to recommence performance or
observance whenever and to whatever extent possible
without delay. With respect to Service Provider's
performance, such efforts shall be no less than the
efforts used for any other customer of Service
Provider. Any Party so delayed in its performance
shall immediately notify the Party to whom
performance is due by telephone (to be confirmed in
writing within two days after the inception of such
delay) and describe at a reasonable level of detail
the circumstances causing such delay.
18.8.3 Critical Functions. Notwithstanding anything in this
Section 18.8 to the contrary, upon the occurrence of
an event described in Section 18.8.1 that
substantially prevents, hinders or delays
performance of services necessary for the
performance of "critical functions" of such Party
for more than seven (7) consecutive days, such Party
to whom such affected or delayed performance is due
will have the right to immediately terminate this
Agreement. For the purposes of this Section 18.8.3,
"critical functions" means with respect to a Party,
those business functions that are essential and
critical to its business operations or the business
operations of its Members.
18.9 Severability. If for any reason a court of competent
jurisdiction finds any provision or portion of this Agreement
to be unenforceable, that provision of the Agreement will be
enforced to the maximum extent permissible so as to effect
the intent of the Parties, and the remainder of this
Agreement will continue in full force and effect.
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18.10 Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed an original, but all of which,
together, will constitute one and the same instrument.
18.11 Headings. Section headings are included for only convenient
reference and do not describe the sections to which they
relate.
18.12 Section 365(n) Matters. Service Provider acknowledges that if
Service Provider as a debtor-in-possession or a trustee in
bankruptcy in a case under the U.S. Bankruptcy Code rejects
this Agreement or any agreement supplementary hereto or
thereto, Novation may elect to retain its rights under this
Agreement or any agreement supplementary hereto, as and to
the extent provided in Section 365(n) of the U.S. Bankruptcy
Code. Upon the written request of Novation to Service
Provider or the bankruptcy trustee, Service Provider or such
bankruptcy trustee, as provided in Section 365(n) of the U.S.
Bankruptcy Code, (i) shall provide to Novation the
Intellectual Property for the Services as described in this
Agreement, including all third-party software and all Service
Provider-owned software, and (ii) shall not interfere with
the rights of Novation as provided in this Agreement or any
agreement supplementary hereto, including or any escrow
agreement that may be entered, to obtain such Intellectual
Property from the bankruptcy trustee.
18.13 Additional Members. In the event of a merger, consolidation,
sale of assets or other acquisition transaction between
Novation, VHA or UHC and any other GPO, the Parties shall
amend this Agreement to adjust Service Fees or implement
Member-Based Pricing for such new Members, at the election of
the affected Alliance, consistent with Section 2.2.3.
18.14 Termination of Neoforma Outsourcing Agreement. Immediately
after the Effective Time, the Parties shall execute (or cause
their respective Affiliates, as applicable, to execute), and
deliver to each of the other Parties, the letter agreement
attached hereto as Exhibit P and made a part hereof.
19. [*****] OF [*****]
19.1 [*****] and [*****] [*****]. [*****] and [*****] agree,
[*****] [*****] [*****] [*****], that they will [*****]
[*****] for the [*****] and [*****] of [*****] under this
Agreement, as follows:
(i) to the [*****] that any such [*****] or [*****]
[*****] [*****] to any [*****] or [*****] by [*****]
or any [*****], [*****] shall [*****] [*****];
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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s
(ii) to the [*****] that any such [*****] or [*****]
[*****] [*****] to any [*****] or [*****] by [*****]
or a [*****], [*****] shall [*****] [*****]; and
(iii) to the [*****] that the [*****] set forth in (i) and
(ii) are not applicable, [*****] and [*****] shall
[*****] [*****] in accordance with a [*****] between
[*****] and [*****].
19.2 [*****] and [*****] [*****]. Each of [*****] and [*****]
hereby [*****] the following with regard to [*****] [*****]
[*****] under this Section 19:
(i) any [*****] to [*****] [*****] to [*****] any other
[*****] in [*****]'s [*****] whatsoever, other than
[*****] [*****] [*****] [*****] [*****] or [*****]
with respect to a [*****] described in Section
19.1(i) and (ii);
(ii) any [*****] [*****] from the [*****], [*****] or
[*****] of any [*****] of [*****], [*****] or
[*****] of [*****] or [*****] [*****] [*****], or
[*****] one another;
(iii) any [*****] of [*****], [*****] or [*****] of the
[*****]'s [*****] hereunder based upon a [*****] of
or [*****] [*****] under the [*****] or [*****]'s
[*****] for any [*****] of its [*****] under this
Agreement based on [*****] for the [*****] of
[*****] generally;
(iv) any [*****] to be [*****] by [*****] of the [*****]
or other [*****] of [*****] or of [*****] or [*****]
or any [*****] therein or any other circumstances
bearing upon the [*****] of [*****] by [*****]; and
(v) any [*****] of [*****] or [*****] based on [*****]
of this Agreement in accordance with its terms.
Each of [*****] and [*****] agrees that its [*****], as set
forth in Section 19.1, constitutes a [*****] of [*****] when
[*****] and not [*****] [*****].
19.3 [*****] of [*****]. Neither [*****]'s nor [*****]'s [*****]
and [*****] under this Agreement shall [*****] [*****] to any
[*****],[*****],[*****],[*****] or [*****] for any reason,
including, without limitation, [*****], and shall not be
[*****] to any [*****] or [*****] whatsoever by reason of the
[*****],[*****] or [*****] of any of its [*****] and [*****]
under this Agreement; excluding, however, any [*****] based
upon [*****]'s [*****] to [*****] any of its [*****] under
this Agreement.
__________
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omission.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
GLOBAL HEALTHCARE EXCHANGE, LLC NOVATION, LLC
By: By:
------------------------------ -------------------------
Name: Name:
Title: Title:
Date: Date:
VHA INC. UNIVERSITY HEALTHSYSTEM
CONSORTIUM
By: By:
------------------------------ -------------------------
Name: Name:
Title: Title:
Date: Date:
HEALTHCARE PURCHASING PARTNERS INTERNATIONAL, LLC
By:
---------------------------
Name:
Title:
Date:
[SIGNATURE PAGE TO
OUTSOURCING AGREEMENT]
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