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
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TABLE OF CONTENTS
PAGE
1. DEFINITIONS.............................................................................................2
2. SERVICE PROVIDER OBLIGATIONS............................................................................9
2.1 Migration......................................................................................9
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2.1.1 Migration Plan........................................................................9
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2.1.2 Assumptions and Further Development..................................................10
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2.1.3 Migration Services...................................................................10
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2.2 Services......................................................................................10
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2.2.1 Pre-Migration Services...............................................................11
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2.2.2 Post-Migration Services..............................................................11
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2.2.3 [*****] [*****] [*****]..............................................................11
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2.3 Service Levels; Root-Cause Analysis...........................................................12
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2.3.1 Service Levels.......................................................................12
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2.3.2 Root-Cause Analysis..................................................................12
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2.4 [*****].......................................................................................13
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2.5 Service Provider's Interaction with Members; Pre-Existing Data and Service Arrangements.......13
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2.5.1 Member-Facing Plan...................................................................13
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2.5.2 Members Using Service Provider prior to the Effective Date...........................13
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2.5.3 Maintenance of [*****]...............................................................14
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2.5.4 Participation of Additional and Renewal Members......................................14
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2.6 Data From Suppliers...........................................................................15
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2.6.1 [*****]..............................................................................15
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2.6.2 Product Data.........................................................................16
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2.6.3 [*****]..............................................................................16
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2.7 Knowledge Sharing.............................................................................16
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2.8 Communications with Novation and Alliances....................................................16
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2.8.1 Notice of Materially Adverse Facts...................................................16
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2.8.2 Reports..............................................................................16
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2.8.3 Regular Meetings.....................................................................17
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2.9 Goals and Incentives..........................................................................17
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3. THE GHX EXCHANGE.......................................................................................17
3.1 Maintenance as Leading Provider...............................................................17
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3.2 User Registration.............................................................................18
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3.2.1 NPS..................................................................................18
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3.2.2 GHX Exchange.........................................................................18
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3.2.3 Novation Marketplace.................................................................19
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3.3 Notice of Novation Contracts..................................................................19
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3.4 Provision of Product Information..............................................................20
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3.4.1 Provision of Non-Novation Contract Product Information...............................20
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3.4.2 Provision of Novation Contract Product and [*****]...................................20
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3.5 Removal of Materials and Products from NPS....................................................20
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TABLE OF CONTENST
(continued)
PAGE
3.5.1 Removal of Materials.................................................................20
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3.5.2 Removal of Products..................................................................20
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3.6 Other GPOs....................................................................................20
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3.7 Reasonable Assistance.........................................................................21
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4. NOVATION PROPRIETARY SERVICES AND CHANGES IN SERVICES..................................................21
4.1 Novation Proprietary Services.................................................................21
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4.2 Change Control for Novation Proprietary Services..............................................21
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4.2.1 Change Control Procedure.............................................................21
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4.2.2 Adjustment in [*****]................................................................22
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4.2.3 Emergency Changes....................................................................22
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5. SERVICE PROVIDER EXCLUSIVITY...........................................................................22
5.1 Exclusivity...................................................................................22
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5.2 Marketing Other Services To Members...........................................................22
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6. LICENSES...............................................................................................22
6.1 Marks.........................................................................................22
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6.2 Service Provider Materials....................................................................23
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6.3 Novation Materials............................................................................23
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6.4 Licenses; Source Code Escrow; Proprietary Rights..............................................23
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6.4.1 Access License.......................................................................23
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6.4.2 License to Service Provider..........................................................24
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6.4.3 Grant of Source Code License.........................................................24
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6.4.4 Third Party Technology...............................................................26
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6.4.5 Source Code Escrow...................................................................26
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6.4.6 Proprietary Rights; Restrictions.....................................................28
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7. FEES AND TAXES.........................................................................................28
7.1 Fees..........................................................................................28
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7.2 Taxes.........................................................................................29
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7.3 Other Expenses................................................................................29
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7.4 Payment Terms.................................................................................29
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7.4.1 Invoices.............................................................................29
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7.4.2 Payments.............................................................................29
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7.4.3 Credits..............................................................................29
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7.5 Member-Based Pricing..........................................................................29
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7.5.1 Conversion to Member-Based Pricing...................................................29
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7.5.2 [*****] Member-Based Pricing.........................................................30
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8. TERM AND TERMINATION...................................................................................30
8.1 Initial Term..................................................................................30
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8.2 Renewal and Extension of Term.................................................................30
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TABLE OF CONTENST
(continued)
PAGE
8.3 Termination for Cause or Dissolution..........................................................30
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8.3.1 For Cause............................................................................30
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8.3.2 [*****] [*****]......................................................................31
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8.3.3 Termination of Merger Agreement......................................................31
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8.4 Termination for Insolvency Events.............................................................31
---------------------------------
8.4.1 Service Provider Insolvency Event....................................................31
---------------------------------
8.4.2 Novation Insolvency Event............................................................32
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8.4.3 [*****] [*****] [*****] [*****]......................................................32
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8.5 Termination Upon Service Provider Change of Control...........................................33
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8.6 Return of Materials...........................................................................33
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8.7 Survival......................................................................................34
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8.8 Termination Assistance Services...............................................................34
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8.9 Equitable Remedies............................................................................34
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9. DATA RIGHTS; INTELLECTUAL PROPERTY....................................................................34
9.1 Data Rights...................................................................................34
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9.1.1 Member Data..........................................................................34
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9.1.2 Transaction Data.....................................................................35
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9.1.3 Aggregated GHX Data..................................................................35
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9.1.4 Aggregated Alliance Member Data......................................................36
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9.1.5 Product Data.........................................................................36
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9.2 Analytic Data.................................................................................36
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9.3 No Other Licenses or Use......................................................................36
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9.4 Ownership by Third Parties....................................................................36
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9.5 Intellectual Property.........................................................................37
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9.5.1 Deliverables.........................................................................37
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9.5.2 Proprietary Rights; Restrictions.....................................................37
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10. SAFEGUARDING OF DATA; CONFIDENTIALITY..................................................................38
10.1 Confidentiality...............................................................................38
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10.1.1 Confidential Information.............................................................38
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10.1.2 Confidentiality Obligations..........................................................38
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10.1.3 Exclusions...........................................................................38
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10.1.4 No License...........................................................................39
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10.1.5 Loss of Confidential Information.....................................................39
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10.2 Safeguarding of Data..........................................................................39
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10.3 Business Associate Provisions.................................................................39
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11. REPRESENTATIONS, WARRANTIES AND COVENANTS..............................................................40
11.1 Representations by Service Provider...........................................................40
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11.1.1 Due Organization.....................................................................40
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11.1.2 Authority; Non-Contravention.........................................................40
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11.1.3 Performance..........................................................................41
TABLE OF CONTENST
(continued)
PAGE
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11.1.4 Extension of Other Agreements........................................................41
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11.1.5 Source Code Escrow...................................................................41
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11.1.6 Agreements...........................................................................41
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11.2 Representations by Novation, VHA, UHC and HPPI................................................42
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11.2.1 Due Organization.....................................................................42
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11.2.2 Authority; Non-Contravention.........................................................42
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11.3 Compliance with Laws and Regulations; Other Covenants.........................................43
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11.3.1 Compliance with Laws.................................................................43
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11.3.2 HHS and Comptroller General..........................................................43
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11.3.3 No Exclusion or Debarment............................................................44
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11.3.4 No Exchange of Competitively Sensitive Information...................................44
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11.4 Warranty Disclaimer...........................................................................44
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12. USE OF SUBCONTRACTORS; RIGHTS TO REQUEST REPLACEMENT...................................................45
12.1 Generally.....................................................................................45
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12.2 Right to Request Replacement..................................................................45
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12.3 Continuing Responsibility.....................................................................45
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12.4 Confidential Information......................................................................45
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13. INSURANCE..............................................................................................45
13.1 Insurance.....................................................................................45
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13.2 Proof of Insurance............................................................................45
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14. INDEMNITY..............................................................................................46
14.1 Service Provider Indemnity....................................................................46
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14.2 Novation Indemnity............................................................................46
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14.3 Infringement Claims...........................................................................47
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14.3.1 Indemnity............................................................................47
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14.3.2 Indemnity Exclusions.................................................................47
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14.3.3 Injunction or Prohibition............................................................48
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14.4 Indemnity Procedures..........................................................................48
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14.5 Exclusive Remedy..............................................................................48
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15. LIMITATION OF LIABILITY................................................................................48
16. AUDIT RIGHTS...........................................................................................49
16.1 General.......................................................................................49
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16.2 Frequency of Audits...........................................................................49
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16.3 Auditors......................................................................................49
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16.4 Record Retention..............................................................................50
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16.5 Cooperation...................................................................................50
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16.6 Overcharges and Undercharges..................................................................50
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16.7 Audit Reports.................................................................................50
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TABLE OF CONTENST
(continued)
PAGE
17. DISPUTE RESOLUTION.....................................................................................50
18. GENERAL PROVISIONS.....................................................................................50
18.1 No Waiver.....................................................................................50
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18.2 Entire Agreement..............................................................................50
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18.3 Publicity.....................................................................................51
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18.4 Assignment; Successors and Assigns............................................................51
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18.5 Governing Law.................................................................................51
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18.6 Notices.......................................................................................51
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18.7 No Agency.....................................................................................52
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18.8 Force Majeure.................................................................................52
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18.8.1 Performance Excused..................................................................52
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18.8.2 Period of Excused Performance........................................................53
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18.8.3 Critical Functions...................................................................53
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18.9 Severability..................................................................................53
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18.10 Counterparts..................................................................................53
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18.11 Headings......................................................................................53
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18.12 Section 365(n) Matters........................................................................53
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18.13 Additional Members............................................................................54
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18.14 Termination of Neoforma Outsourcing Agreement.................................................54
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19. [*****] OF [*****].....................................................................................54
19.1 [*****] and [*****] [*****]...................................................................54
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19.2 [*****] and [*****] [*****]...................................................................54
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19.3 [*****] of [*****]............................................................................55
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TABLE OF CONTENST
(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.
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSION.
"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.
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSION.
"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.
"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
[*****].
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSION.
"[*****] 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.
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSION.
"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.
"[*****]" 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).
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"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.
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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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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
[*****] [*****]:
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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
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technical personnel and other resources (including,
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
[*****].
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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
Date and, thereafter once each year within
ninety (90) days after the anniversary of
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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
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[*****] [*****] [*****] [*****] [*****],
[*****] [*****] [*****][*****] [*****]
[*****] to [*****] and the [*****] [*****]
of [*****] [*****] [*****] for [*****]
[*****] [*****] to [*****] a [*****] [*****]
the [*****] [*****] that [*****] such
[*****]. [*****] and [*****] the [*****]
[*****] [*****] [*****] [*****] 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.
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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 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 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, 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 [*****]. Service
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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
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and reject or accept the Change Request in writing
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
obligation not to target market such Services as set forth
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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.
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
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royalty-free license to modify and use the
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
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.
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 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 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.
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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 during the Renewal Term, unless
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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
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[*****] in [*****] by [*****] and shall [*****]
[*****] the [*****] [*****] [*****] [*****] [*****].
[*****] shall [*****] in [*****] with [*****] or
[*****] if [*****] [*****] [*****] to [*****] 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.
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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 [*****] [*****] [*****][*****] [*****]
[*****],[*****] [*****] [*****] [*****] [*****]
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[*****] [*****] [*****] to [*****] the [*****] of an
[*****] to [*****]. "[*****]" [*****] [*****], with
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
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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.
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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:
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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 from a Member without
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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
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
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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.
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.
(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.
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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, 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
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 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.
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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
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
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Party Technology, only the indemnity, if any, given
by the developer or 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.
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 any
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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.
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.
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.
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.
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.
(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.
[Remainder of page intentionally left blank.]
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:________________________________
Name:
By:______________________________
Title:
Name:
Date:
Title:
Date:
HEALTHCARE PURCHASING PARTNERS INTERNATIONAL, LLC
By:_______________________________
Name:
Title:
Date:
[SIGNATURE PAGE TO
OUTSOURCING AGREEMENT]
