Exhibit 7
CATEGORY ONE
LABORATORY DATA ACCESS AGREEMENT
This CATEGORY ONE LABORATORY DATA ACCESS AGREEMENT (this
"AGREEMENT"), dated as of August 16, 1999, between SmithKline Xxxxxxx plc, a
public limited liability company organized under the laws of England
("SMITHKLINE XXXXXXX"), and Quest Diagnostics Incorporated, a Delaware
corporation ("QUEST DIAGNOSTICS").
WHEREAS, SmithKline Xxxxxxx and Quest Diagnostics have entered
into a Stock and Asset Purchase Agreement, dated as of February 9, 1999 (the
"PURCHASE AGREEMENT"), pursuant to which SmithKline Xxxxxxx has agreed to sell,
and Quest Diagnostics has agreed to purchase, SmithKline Xxxxxxx'x clinical
laboratories business, including 100% of the outstanding capital stock of SBCL,
Inc., a Delaware corporation ("SBCL"), and certain other assets, as further
described therein (the "TRANSACTION");
WHEREAS, the clinical laboratory data previously collected by
SBCL becomes the property of Quest Diagnostics pursuant to the Purchase
Agreement; and
WHEREAS, as a condition to completion of the Transaction,
SmithKline Xxxxxxx has required Quest Diagnostics to grant to SmithKline
Xxxxxxx, and Quest Diagnostics is willing to so grant to SmithKline Xxxxxxx,
certain non-exclusive and limited-use license rights on economically preferred
terms for a limited term for the clinical laboratory data identified herein.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
set forth herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. (a) For purposes of this Agreement:
"AFFILIATE" means with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by, or is under common control
with, a specified Person. For purposes of this definition, the term "CONTROL" as
applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management of that Person, whether
through ownership of voting securities or otherwise; PROVIDED that any Person
that performs Clinical Laboratory Services that generate revenues in any fiscal
year (as determined pursuant to generally accepted accounting principles in the
U.S.) exceeding $250,000,000 shall not be an Affiliate of SmithKline Xxxxxxx for
purposes of Articles III, IV and V. For purposes of the foregoing proviso,
Clinical Laboratory Services shall exclude Clinical Laboratory Information
Services (provided that the Person providing such Clinical Laboratory
Information Services does not perform and has not performed clinical laboratory,
anatomic pathology or other diagnostic testing services). SmithKline Xxxxxxx and
Quest Diagnostics shall not be deemed to be Affiliates of each other.
"APPLICABLE LAW" means, with respect to any jurisdiction, all
applicable statutes, laws, ordinances, rules, orders and regulations (to the
extent then in force and effect) of any federal, state, local or foreign
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, having authority over an applicable Person in such jurisdiction.
"AUTHORIZED SUBCONTRACTOR" means, with respect to SmithKline
Xxxxxxx, any subcontractor of SmithKline Xxxxxxx or its Affiliates that agrees
in writing not to disclose to Third Parties Data received under this Agreement
except at the direction and on behalf of SmithKline Xxxxxxx.
"CATEGORY ONE A USES" means uses of Data within SmithKline
Xxxxxxx and its Affiliates that is not a Category One B Use.
"CATEGORY ONE B USES" means uses of Data by SmithKline Xxxxxxx
and its Affiliates in programs or services supplied to a Third Party (including
such programs and services under which SmithKline Xxxxxxx or its Affiliates
receive no direct reimbursement from such Third Party), if such program or
service is designed to support any disease state category or vaccine category
for which SmithKline Xxxxxxx or its Affiliates are developing, marketing,
co-marketing, distributing or selling a pharmaceutical or vaccines product;
PROVIDED that Category One B Use shall not mean merging, consolidating or
otherwise combining Data with any clinical laboratory data (other than such data
provided by Quest Diagnostics and its Affiliates), except on a Client by Client
basis.
"CATEGORY ONE USES" means Category One A Uses and/or Category
One B Uses.
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"CATEGORY THREE DATA ACCESS AGREEMENT" means the Category
Three Data Access Agreement dated the date hereof between SmithKline Xxxxxxx and
Quest Diagnostics.
"CHANGE OF CONTROL" means any event where: (a) any "person" or
"group" (as such terms are used in Section 13(d) and 14(d) of the United States
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") is or becomes
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act) of shares representing more than 50% of the combined voting power of the
then outstanding securities entitled to vote generally in elections of directors
(the "VOTING STOCK") of SmithKline Xxxxxxx, unless the shareholders of
SmithKline Xxxxxxx immediately before such "person" or "group" becomes such a
beneficial owner of SmithKline Xxxxxxx continue to own, directly or indirectly
through such person or group, immediately following such event, at least a
majority of the combined voting power of the Voting Stock of SmithKline Xxxxxxx,
(b) SmithKline Xxxxxxx consolidates with or merges into any other corporation,
or conveys, transfers or leases all or substantially all of its assets (other
than to a wholly owned subsidiary of SmithKline Xxxxxxx) or any other
corporation merges into SmithKline Xxxxxxx, and, in the case of any such
transaction, the outstanding capital stock of SmithKline Xxxxxxx is reclassified
into or exchanged for any other property or security, unless the shareholders of
SmithKline Xxxxxxx immediately before such transaction own, directly or
indirectly, immediately following such transaction, at least a majority of the
combined voting power of the Voting Stock of the corporation resulting from, or
to which its assets were conveyed, transferred or leased in connection with,
such transaction or (c) at any time the Continuing Directors do not constitute a
majority of the Board of Directors of SmithKline Xxxxxxx (or, if applicable, a
successor corporation to SmithKline Xxxxxxx).
"CLIENT" means (a) with respect to Quest Diagnostics and any
of its Affiliates, any Person for whom Quest Diagnostics or any of its
Affiliates is providing laboratory services that generates Laboratory Data and
(b) with respect to SmithKline Xxxxxxx and any of its Affiliates, any Person for
whom SmithKline Xxxxxxx or any of its Affiliates is providing Data pursuant to
this Agreement.
"CLINICAL LABORATORY INFORMATION SERVICES" means providing in
any manner, directly or indirectly, data or information products or services
which substantially consist of laboratory test results and/or related
information (other than initial reporting of laboratory test results and test
development and other similar research activities engaged in by Quest
Diagnostics or its Affiliates).
"CLINICAL LABORATORY SERVICES" means clinical laboratory,
anatomic pathology or other diagnostics testing services (including, without
limitation, routine and esoteric clinical laboratory services (including
genetics testing), clinical laboratory services involved with clinical trials,
point-of-care testing, clinical laboratory services involving corporate
healthcare and services involved with managing hospital laboratories) including
the reports of test results, or
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providing to any unaffiliated Person, in any manner, directly or indirectly,
data or information products or services which substantially consist of
laboratory test results and/or related information.
"CONTINUING DIRECTORS" means as of any date of determination,
any member of the Board of Directors of SmithKline Xxxxxxx who (i) was a member
of such Board of Directors on the date of this Agreement or (ii) was nominated
for election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such board at the time
of such nomination or election.
"DATA" means Laboratory Data and Encoded Laboratory Data.
"EFFECTIVE DATE" means the date upon which this Agreement is
effective and shall be the Closing Date as defined in the Purchase Agreement.
"ENCODED LABORATORY DATA" means Laboratory Data that has been
encoded through the Encoding Process. Encoded Laboratory Data shall specifically
exclude Patient Identifiers.
"ENCODING KEY" means the unique randomly generated code
assigned by the Information Encoder in the Encoding Process which relates to a
specific person. An Encoding Key shall specifically exclude Encounter Numbers
(as defined in Appendix F).
"ENCODING PROCESS" means the process and procedures described
in Article VI.
"HEALTH INFORMATION" means that portion of Laboratory Data
that is medical and clinical information associated with any individual person
that relates to the past, present or future (a) physical or mental health
condition of the person, (b) family history of the person, (c) provision of
healthcare to the individual and (d) date of service. Health Information shall
specifically exclude Patient Identifiers and shall specifically include
Encounter Numbers.
"HISTORICAL DATA" means Laboratory Data entered into a
database prior to the Effective Date.
"INFORMATION ENCODER" means that independent Third Party
retained by SmithKline Xxxxxxx to perform the duties of the Encoding Process as
described in Article VI.
"INITIAL TERM" means, unless and until earlier terminated
pursuant to this Agreement, the forty-two (42) month period following the
Effective Date.
"IX COMPANY" has the meaning assigned to such term in the
Category Three Data Access Agreement.
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"LABORATORY DATA" means and consists of clinical laboratory
data and associated person specific data and other information related to
Clinical Laboratory Services performed by SBCL, Quest Diagnostics or their
Affiliates, but expressly excluding Data that (a) is generated by clinical
trials and forensic toxicology or (b) relates to Clinical Laboratory Services
performed prior to January 1, 1998 by Quest Diagnostics and its Affiliates
(excluding SBCL and its subsidiaries) or prior to January 1, 1997, by SBCL and
its subsidiaries.
"PATIENT DEMOGRAPHIC INFORMATION" means (a) with respect to
any Person, the following person-associated information: date of birth, age,
gender and 5-digit zip code, and (b) with respect to any Person's test order,
laboratory requisition number and identity of the performing laboratory.
"PATIENT IDENTIFIERS" means with respect to any Person, name,
street address, 9-digit zip code, communication numbers (telephone, facsimile,
pager, e-mail), Social Security number and patient benefit member identification
numbers.
"PAYOR/PROVIDER INFORMATION" means and includes that portion
of Laboratory Data consisting of information identifying healthcare payors and
providers (e.g., the referring physician, hospital or other primary provider).
"PERSON" means any individual, firm, corporation, partnership,
limited partnership, limited liability company, trust, joint venture, government
entity or other entity.
"PHARMACEUTICAL BUSINESS" means the discovery, development,
manufacture, marketing or distribution of pharmaceutical or vaccine products.
"PHARMACEUTICAL COMPANY" means a Person that derives, directly
or indirectly, more than $250,000,000 in revenues in any fiscal year from one or
more Pharmaceutical Businesses.
"QUEST DIAGNOSTICS INFORMATICS BUSINESS" means any business or
businesses conducted by Quest Diagnostics or its Affiliates pursuant to which
Quest Diagnostics or any of its Affiliates provides Clinical Laboratory
Information Services using laboratory data from testing services performed by
Quest Diagnostics and its Affiliates.
"QUEST INFORMATICS DATABASE" means the compilation of
Laboratory Data in the centralized clinical laboratory database maintained by
Quest Diagnostics or its Affiliates on the Effective Date and any comparable or
successor database or databases maintained by Quest Diagnostics or its
Affiliates in connection with the conduct of Clinical Laboratory Information
Services by Quest Diagnostics or its Affiliates.
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"SBCL INFORMATICS DATABASE" means the compilation of
Laboratory Data in the centralized clinical laboratory database maintained by
SBCL or its subsidiaries on the Effective Date and any comparable or successor
database or databases maintained by Quest Diagnostics or its Affiliates in
connection with the conduct of Clinical Laboratory Information Services by Quest
Diagnostics or its Affiliates.
"TAX" or "TAXES" shall mean any federal, state, local or
foreign net or gross income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium (including taxes under ss.59A of
the Internal Revenue Code), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated or other tax, governmental fee or like
assessment or charge of any kind whatsoever, including any interest, penalty or
addition thereto, whether disputed or not, imposed by any governmental entity or
other Tax authority or arising under any Tax law or agreement, including,
without limitation, any joint venture or partnership agreement.
"TERM" means, unless and until earlier terminated pursuant to
this Agreement, the Initial Term and any applicable Renewal Term in accordance
with Article IX.
"THIRD PARTY" means any party other than SmithKline Xxxxxxx
and Quest Diagnostics and their respective Affiliates.
"YEAR 2000 COMPLIANCE" includes any requirement that the
design and performance specifications of the relevant items include: accurate
date and century recognition, calculations that accommodate same century and
multicentury formulas and date values, and date/data interface values that
accurately reflect the century.
(b) The following terms have the meanings set forth in the
Sections set forth below:
Term Section
---- -------
Additional Services............................................ 7.05(b)
Agreement...................................................... Preamble
Applicable Fee................................................. 8.01(b)
Applicable Period.............................................. 8.01(b)
Authorization.................................................. 4.02(a)
Commencement Date.............................................. 8.01(a)
Data File 1.................................................... Appendix F
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Term Section
---- -------
Data File 2.................................................... Appendix F
Deliverables................................................... 6.06
Disputes....................................................... 12.15(a)
Encoder Contract............................................... 6.01(b)
Encounter Number............................................... Appendix F
Exchange Act................................................... 1.01(a)
Indemnified Party.............................................. 11.03(a)
Loss........................................................... 11.01
Master Encoding Key Database................................... 6.03(b)
Other Quest Data Access Agreement.............................. 8.01(e)
Protocols...................................................... 6.02(c)
Purchase Agreement............................................. Preamble
Quest Diagnostics.............................................. Preamble
Quest Diagnostics Indemnified Party............................ 11.01
Renewal Term................................................... 9.02
SBCL........................................................... Preamble
SmithKline Xxxxxxx............................................. Preamble
SmithKline Xxxxxxx Indemnified Party........................... 11.02
Source Identifier.............................................. Appendix F
Third Party Claims............................................. 11.03(b)
Transaction.................................................... Preamble
Voting Stock................................................... 1.01(a)
ARTICLE II
RIGHTS IN DATA
SECTION 2.01. RIGHTS IN DATA. The Laboratory Data to be
disclosed to SmithKline Xxxxxxx for use by SmithKline Xxxxxxx is proprietary
information of Quest Diagnostics. SmithKline Xxxxxxx'x rights in the Data are
defined solely by the Category One Uses and the other terms, conditions and
limitations in this Agreement.
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ARTICLE III
ENCODED LABORATORY DATA
SECTION 3.01. CATEGORY ONE USES. Quest Diagnostics hereby
grants to SmithKline Xxxxxxx and its Affiliates a non-exclusive, perpetual,
worldwide right and license (with sublicensing rights and transfer rights as
provided herein) to use Encoded Laboratory Data received under Section 3.02 for
Category One Uses, including the rights to receive, copy, transfer, manipulate,
integrate, disclose and display, subject to the terms and conditions of this
Agreement. SmithKline Xxxxxxx, without Authorization, shall have no right to
directly or indirectly attempt to match or link Encoded Laboratory Data with
Patient Identifiers and shall refrain from doing so.
SECTION 3.02. DELIVERY OF ENCODED LABORATORY DATA. During the
Term, if SmithKline Xxxxxxx requests Encoded Laboratory Data from Quest
Diagnostics, Quest Diagnostics shall, at the fees set forth in Article VIII,
electronically deliver, or deliver in electronic format, to a location in the
United States, Encoded Laboratory Data to SmithKline Xxxxxxx. Each transmission
of Encoded Laboratory Data shall be made in accordance with the performance
criteria set forth in Articles VI and VII, to the extent applicable, to one
recipient (which shall be SmithKline Xxxxxxx or an Affiliate or Authorized
Subcontractor designated by SmithKline Xxxxxxx).
ARTICLE IV
LABORATORY DATA
SECTION 4.01. CATEGORY ONE USES. Quest Diagnostics hereby
grants to SmithKline Xxxxxxx and its Affiliates a non-exclusive, perpetual,
worldwide right and license (with sublicensing rights and transfer rights as
provided herein) to use Laboratory Data received under Section 4.02 for Category
One Uses, including the rights to receive, copy, transfer, manipulate,
integrate, disclose and display, subject to Authorization (as defined below) and
the other terms and conditions of this Agreement.
SECTION 4.02. REQUEST FOR LABORATORY DATA. (a) During the
Term, in the event that SmithKline Xxxxxxx requests Laboratory Data from Quest
Diagnostics and accompanies such request by a written or electronic
authorization (an "AUTHORIZATION") granted by a Person with authority to grant
SmithKline Xxxxxxx access to Laboratory Data (as further provided herein), Quest
Diagnostics shall provide, at the fees set forth in Article VIII, SmithKline
Xxxxxxx or its Affiliates (as applicable) with such Laboratory Data in
accordance with the
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Authorization and the terms and conditions of this Agreement. Upon request by
Quest Diagnostics, SmithKline Xxxxxxx shall, and, if applicable, shall cause its
Affiliates to, disclose to Quest Diagnostics the identity of any Third Party to
which Laboratory Data (other than Encoded Laboratory Data) provided to
SmithKline Xxxxxxx under this Agreement is being directly disclosed by
SmithKline Xxxxxxx or its Affiliates.
(b) Depending upon the terms of such Authorization, Quest
Diagnostics shall electronically deliver, or deliver in electronic format, to a
location in the United States, (i) the requested Laboratory Data or (ii) at
SmithKline Xxxxxxx'x election in its sole discretion, the Encounter Numbers for
the Data covered by the Authorization, either to SmithKline Xxxxxxx or an
Affiliate or Authorized Subcontractor as designated in the Authorization. Any
such delivery shall be made in accordance with the performance criteria set
forth in Article VII to one recipient designated by SmithKline Xxxxxxx.
SECTION 4.03. AUTHORIZATION. Authorizations shall be
substantially in the form attached hereto as Appendix B, provided that
SmithKline Xxxxxxx may make reasonably appropriate drafting changes to tailor an
Authorization to a particular Client or circumstance. Quest Diagnostics may
revise Appendix B from time to time to reflect changes in its operating
procedures or in any Applicable Laws, subject to SmithKline Xxxxxxx'x approval
not to be unreasonably withheld or delayed. Any dispute between the parties
regarding Appendix B shall be resolved pursuant to Section 12.15. Receipt of an
Authorization executed by (1) a patient or a Person representing himself or
herself to be the legal representative of such patient or (2) a health plan
representing itself to have authority over such patient's Laboratory Data shall
be sufficient for any purpose under this Agreement for which an Authorization is
required with respect to such patient's Laboratory Data. SmithKline Xxxxxxx
shall be responsible for obtaining, at its sole expense, valid Authorizations
for Category One Uses of Laboratory Data under this Agreement.
ARTICLE V
DISCLOSURE OF DATA
SECTION 5.01. CATEGORY ONE A USES. Notwithstanding Section
5.02, SmithKline Xxxxxxx and its Affiliates may disclose (but not sublicense)
Data to a Person that is not an Affiliate of SmithKline Xxxxxxx if the
disclosure is (a) to a governmental, regulatory or accrediting agency, (b) is
required by Applicable Law or (c) is for a bona fide business purpose in the
pursuit of the ordinary course of the Pharmaceutical Business of SmithKline
Xxxxxxx or one of its Affiliates; PROVIDED that SmithKline Xxxxxxx and its
Affiliates may not disclose Data pursuant to this Section 5.01 in exchange for
payment to it of a fee or other specified consideration (other than fees or
other consideration paid to it by its Affiliates).
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SECTION 5.02. CATEGORY ONE B USES. SmithKline Xxxxxxx and its
Affiliates may not disclose or sublicense Data under Category One B Uses to a
Person that is not an Affiliate of SmithKline Xxxxxxx except to the extent that
the disclosure (a) is to a governmental, regulatory or industry accrediting
agency, (b) is required by Applicable Law or (c) is pursuant to a written
sublicense agreement between SmithKline Xxxxxxx (or its Affiliate) and the
sublicensee pursuant to which the sublicensee agrees to the following
restrictions:
(i) The sublicensee shall keep confidential and not further
disclose the applicable Data except for a bona fide business purpose in
the pursuit of such sublicensee's ordinary course operations; PROVIDED
that such sublicensee may not further sublicense or disclose Data in
exchange for payment to it of a fee or other specified consideration
(other than fees or other consideration paid to it by its Affiliates).
A fee charged by a sublicensee for a package of health related goods
and/or services that includes access to and disclosure of Data as part
of such goods and/or services shall be deemed to not be the sublicense
or disclosure of Data in exchange for a fee or other specified
consideration. For purposes of this Section 5.02, the "ordinary course
operations" of a sublicensee shall mean (a) the processes used by the
sublicensee or its Affiliates to facilitate the health of its or its
Affiliates' members or patients or to evaluate the efficiency,
effectiveness, cost or profitability of such processes, (b) the
utilization of the services and programs provided to such sublicensee
or its Affiliates, directly or indirectly, by SmithKline Xxxxxxx or
SmithKline Xxxxxxx'x Affiliates as permitted under this Agreement and
(c) disclosure of Data to a governmental, regulatory or accrediting
agency or if required by Applicable Law.
(ii) To the extent that any Encoded Laboratory Data relates to
Persons that are not members, customers or patients of the sublicensee
or its Affiliates, the sublicensee shall not disclose such Data (other
than to its Affiliates and to its agents, consultants and
subcontractors in the ordinary course operations of such sublicensee
who shall be restricted from the further disclosure of such Data to the
same degree as such sublicensee is restricted by this Section 5.02(c))
in a manner reasonably likely to identify the health care payor (e.g.
the managed care organization) with respect to such Data.
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SECTION 5.03. CATEGORY ONE USES. Notwithstanding the
provisions of Sections 5.01 and 5.02:
(a) SmithKline Xxxxxxx shall not, and shall cause its
Affiliates not to, (i) disclose Data, that is received pursuant to this
Agreement, via a website on the Internet that can be directly used by a patient
to access his or her laboratory test results or (ii) provide software to any
Third Party to facilitate such disclosure via a website on the Internet, except
in the case of both of the foregoing clauses (i) and (ii) where IX Company (as
defined in the Participation Agreement dated as of the date hereof, between
SmithKline Xxxxxxx and Quest Diagnostics) does so solely with respect to the
members and/or patients of a Client of SmithKline Xxxxxxx or its Affiliates or
of the Affiliates of such Client. For the avoidance of doubt, Quest Diagnostics
acknowledges that Clients of SmithKline Xxxxxxx and its Affiliates are not
restricted by this Agreement from disclosing Data via the Internet provided that
such disclosure complies with the other provisions of this Article V.
(b) Notwithstanding any provision to the contrary, SmithKline
Xxxxxxx shall delete all Payor/Provider Information from any Data provided to a
Person that is not its Affiliate or Authorized Subcontractor except to the
extent (and only to the extent) that Data is provided to (i) the applicable
payor or provider or patient with respect to the Clinical Laboratory Services
covered by such Data, (ii) a governmental, regulatory or accrediting agency or
(iii) a Person entitled to receive such information as a matter of Applicable
Law.
(c) Any disclosure by SmithKline Xxxxxxx or its Affiliates of
Laboratory Data (that is not Encoded Laboratory Data) shall be consistent with
the terms of the applicable Authorization. Any disclosure by SmithKline Xxxxxxx
and its Affiliates of Data shall be in compliance with Applicable Law and the
terms of this Agreement.
SECTION 5.04. MOST FAVORED NATION TREATMENT REGARDING
DISCLOSURE RESTRICTIONS. Notwithstanding the provisions of Section 5.01, 5.02 or
5.03, in the event that Quest Diagnostics or its Affiliates shall provide any
Data to any Pharmaceutical Company with confidentiality and/or disclosure
restrictions (including without limitation confidentiality and/or disclosure
restrictions on sublicensees of such Pharmaceutical Company) less stringent than
those contemplated by Section 5.01, 5.02 or 5.03, then Quest Diagnostics shall
promptly notify SmithKline Xxxxxxx of such less stringent restrictions, in which
case SmithKline Xxxxxxx shall have the right to disclose that same type of Data
to Third Parties subject to such less stringent restrictions rather than the
applicable restrictions provided in Section 5.01, 5.02 or 5.03. For purposes of
this Section 5.04, Data shall be deemed provided to a Pharmaceutical Company if
(a) the contract or agreement pursuant to which Quest Diagnostics or its
Affiliates provide such Data recites that a Pharmaceutical Company is sponsoring
or paying for the provision of the applicable program or service that includes
such Data, (b) a Pharmaceutical Company is a party to the contract or agreement
pursuant to which Quest Diagnostics or its Affiliates provide such
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Data or (c) such Data otherwise is provided for a purpose or project that Quest
Diagnostics knows (or reasonably should know) is sponsored or paid for by a
Pharmaceutical Company. For purposes of this Section 5.04, "knows" refers to the
knowledge (or imputed knowledge) of (a) the business leader of the Quest
Diagnostics Informatics Business and employees who report directly to such
business leader, (b) the business leader of the Quest Diagnostics managed care
business and employees who report directly to such business leader and (c) any
attorney employed in the legal department of Quest Diagnostics who routinely
reviews contracts entered into by Quest Diagnostics or its Affiliates with
managed care organizations or Pharmaceutical Companies.
ARTICLE VI
ENCODING
SECTION 6.01. SELECTION OF THE INFORMATION ENCODER. (a)
SmithKline Xxxxxxx shall be responsible for the selection of the Information
Encoder, subject to Quest Diagnostics' approval, which approval shall not be
unreasonably withheld or delayed. Quest Diagnostics shall be entitled to meet
with any prospective Information Encoder solely to review its procedures for
maintaining the confidentiality and security of Laboratory Data to be received
by the Information Encoder prior to giving its approval; PROVIDED, HOWEVER, that
the ultimate discretion in such selection belongs to SmithKline Xxxxxxx.
(b) SmithKline Xxxxxxx shall be responsible for the
negotiation with and implementation of an agreement with the Information
Encoder. SmithKline Xxxxxxx shall ensure that the agreement between SmithKline
Xxxxxxx and the Information Encoder (the "ENCODER CONTRACT") shall meet the
requirements set forth in Section 6.07.
(c) SmithKline Xxxxxxx shall be responsible for all fees and
expenses of the Information Encoder.
SECTION 6.02. PROCEDURES AND PROTOCOLS. (a) The procedures and
protocols to be used by the Information Encoder are intended to facilitate
linkage by SmithKline Xxxxxxx of the Encoded Laboratory Data for a given
individual person as received from Quest Diagnostics or its Affiliates with
other anonymous or encoded medical or clinical healthcare information associated
with the same individual person, to which information SmithKline Xxxxxxx or its
Affiliates may otherwise have access. Such procedures and protocols shall be
compatible with Quest Diagnostics' data formats as of the Effective Date and
fields as specified in Appendix A.
(b) Quest Diagnostics shall provide to the Information Encoder
and SmithKline Xxxxxxx copies of documentation relating to the data
specifications, elements and
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fields and formats used by Quest Diagnostics and its Affiliates with respect to
Data. Quest Diagnostics shall provide the Information Encoder and SmithKline
Xxxxxxx with access to use any standard data dictionary that Quest Diagnostics
or any Affiliate of Quest Diagnostics maintains or uses with respect to the
Laboratory Data and its documentation on file layouts in connection with the
Laboratory Data. Quest Diagnostics will identify, maintain and make available a
single point of contact to assist SmithKline Xxxxxxx in resolving any questions
regarding Data.
(c) The linking of individual data files, creation of the
Encoding Keys and the creation of the Master Encoding Key Database (as defined
below) shall be performed by the Information Encoder in accordance with the
processes and protocols provided to the Information Encoder by SmithKline
Xxxxxxx or its Affiliates from time to time (the "PROTOCOLS"). Notwithstanding
any other terms in this Agreement, in no event shall the Protocols be shared
with Quest Diagnostics or its Affiliates. In no event shall SmithKline Xxxxxxx,
Quest Diagnostics or any of their respective Affiliates provide, without
Authorization, any Laboratory Data other than Patient Identifiers, Patient
Demographic Information, Encoding Keys, Encounter Numbers, Source Identifiers
(as defined in Appendix F) and physician identification numbers to the
Information Encoder.
SECTION 6.03. USE OF INFORMATION. (a) The Information Encoder
shall be authorized to use the Patient Identifiers, Patient Demographic
Information, Encoding Keys, Encounter Numbers, Source Identifiers and physician
identification numbers solely for the purposes set forth in this Article VI.
(b) The Information Encoder shall be authorized to create and
maintain a database of the Patient Identifiers, Patient Demographic Information,
Encoding Keys, Encounter Numbers, Source Identifiers and physician
identification numbers provided by Quest Diagnostics ("MASTER ENCODING KEY
DATABASE") and shall be authorized to create a permanent encoding conversion
table for the individual files which links multiple individual fields for the
Patient Identifiers, Patient Demographic Information, Encoding Keys, Encounter
Numbers, Source Identifiers and physician identification numbers concerning an
individual, while maintaining individual accessibility of each data file
provided. The Information Encoder is authorized to use such Master Encoding Key
Database (subject to the terms of this Agreement, particularly regarding patient
confidentiality and Authorization) to link Encoding Keys to such individual data
files regarding the same individual and to link other demographic data to the
Encoding Key. The Information Encoder may make copies of the Master Encoding Key
Database or portions thereof, PROVIDED that the Master Encoding Key Database and
such copies are maintained by the Information Encoder under its control in
secure settings at all times.
SECTION 6.04. HISTORICAL DATA ENCODING. Quest Diagnostics (a)
will provide to the Information Encoder Patient Identifiers, Patient Demographic
Information, physician
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identification numbers, Encounter Numbers and Source Identifiers from the
Historical Data and (b) will provide to SmithKline Xxxxxxx, or an Affiliate or
Authorized Subcontractor of SmithKline Xxxxxxx, Laboratory Data from the
Historical Data, with the corresponding Patient Identifiers deleted, in each
case in accordance with Appendix F.
SECTION 6.05. ONGOING DATA ENCODING. Using the same
methodology and programming developed for the encoding of Historical Data
pursuant to the Encoding Process described on Appendix F (but using the service
levels provided in this Section 6.05), Quest Diagnostics no less frequently than
daily (for this purpose, six days a week or seven days a week if the normal
course of business) (with respect to the SBCL Informatics Database, weekly until
updated more frequently as provided in Section 7.01(d), at which point at least
as frequently as the SBCL Informatics Database is updated) shall send (a) to the
Information Encoder a Data File 1 and (b) to SmithKline Xxxxxxx or an Affiliate
or Authorized Subcontractor of SmithKline Xxxxxxx a Data File 2, in each case
generated by Quest Diagnostics and its Affiliates from the Quest Informatics
Database and the SBCL Informatics Database, commencing with the most recent
submission under this Section 6.05 (or in the case of the first submission under
this Section 6.05, commencing with all Laboratory Data since the most recent
Laboratory Data included in the Historical Data). The Information Encoder will
deliver to SmithKline Xxxxxxx the Encoding Keys created using the Encoding
Process together with the corresponding Encounter Numbers in Data File 1.
SECTION 6.06. COSTS AND EXPENSES. SmithKline Xxxxxxx shall
reimburse Quest Diagnostics for all reasonable costs and expenses to the extent
associated with the setup of the processes to transfer and process to the
Information Encoder and SmithKline Xxxxxxx (including initial extraction of, but
not for ongoing extraction of) Patient Identifiers, Patient Demographic
Information, Encounter Numbers, Source Identifiers, physician identification
numbers and Laboratory Data in accordance with this Article VI (the
"DELIVERABLES"), including but not limited to costs of acquiring and installing
required hardware and disk space, programming costs, interface development
costs, line charges, and any other such costs and expenses; PROVIDED that
SmithKline Xxxxxxx shall not be obligated to reimburse Quest Diagnostics more
than $90,000 pursuant to this Section 6.06. Quest Diagnostics shall be
responsible for all costs and expenses relating to the Deliverables in excess of
$90,000 and all costs and expenses associated with the ongoing processes to
transfer and process to the Information Encoder and SmithKline Xxxxxxx
(including ongoing extraction of) the Laboratory Data.
14
SECTION 6.07. INFORMATION ENCODER CONTRACT. The Encoder
Contract shall meet the following requirements:
(a) The Encoder Contract shall incorporate the duties of the
Information Encoder as set forth in this Article VI, and the relevant
definitions from Article I, including the definitions for Encoded Laboratory
Data, Patient Identifiers, Encoding Keys, Encounter Numbers, Source Identifiers
and Patient Demographic Information.
(b) The Information Encoder shall be subject to the terms of
Section 12.03 regarding confidentiality.
(c) The Information Encoder shall be prohibited from assigning
the Encoder Contract without Quest Diagnostics' consent, which shall not be
unreasonably withheld or delayed.
(d) If the Information Encoder's performance under the Encoder
Contract materially breaches the provisions of this Article VI and such breach
is not cured within 30 days of SmithKline Xxxxxxx'x receipt of written notice of
such breach from Quest Diagnostics or, if such breach is not of a type that can
reasonably be cured within such period, within 90 days of SmithKline Xxxxxxx'x
receipt of written notice of such breach from Quest Diagnostics (notwithstanding
that the Information Encoder is working diligently to cure such breach), then
Quest Diagnostics may suspend the delivery of Patient Identifiers, Patient
Demographic Information, Encounter Numbers, Source Identifiers and physician
identification numbers to the Information Encoder pursuant to this Article VI.
Any such suspension shall be pursuant and subject to the provisions of Section
9.05. SmithKline Xxxxxxx shall notify Quest Diagnostics promptly if it becomes
aware that the Information Encoder's performance under the Encoding Contract
materially breaches the provisions of this Article VI.
(e) The Encoder Contract shall provide that, in consideration
of Quest Diagnostics' provision of Patient Identifiers, Patient Demographic
Information, Encounter Numbers and physician identification numbers to the
Information Encoder, Quest Diagnostics shall have the right to exercise audit
rights with respect to the Information Encoder during normal business hours,
without unreasonably interfering with the Information Encoder's business and at
Quest Diagnostics' expense (and that SmithKline Xxxxxxx shall be empowered to
and shall enforce said rights of Quest Diagnostics). Such audit rights shall be
limited solely to the right to review the Encoder Contract and to verify the
Information Encoder's compliance with the applicable terms of this Article VI
and Section 12.03.
(f) Upon the termination of the Encoder Contract, the
Information Encoder either shall transfer all its files relating to the Master
Encoding Key Database to a successor Information Encoder that has entered into
an Encoder Contract with SmithKline Xxxxxxx that
15
meets the requirements of this Section 6.07 or, in the event that no Information
Encoder is appointed, either destroy all its files relating to the Master
Encoding Key Database (and certify to Quest Diagnostics that they have been
destroyed) or deliver such files to Quest Diagnostics. Notwithstanding the
foregoing, the Information Encoder and SmithKline Xxxxxxx shall be permitted to
retain a copy of any portion of the Patient Identifiers and Patient Demographic
information that is generally available from third party sources without
violation of Applicable Law; PROVIDED such information is maintained in a format
that is not linked with the Master Encoding Key Database or any Encoding Keys or
otherwise could reasonably be expected to link Patient Identifiers with the
applicable patients' Health Information. Such information only may be retained
and used for the benefit of SmithKline Xxxxxxx and its Affiliates.
(g) Except as permitted by Section 6.07(f) or this Section
6.07(g), under no circumstances will the Information Encoder provide to
SmithKline Xxxxxxx or its Affiliates or any Person other than Quest Diagnostics
the Master Encoding Key Database or Encoding Keys in any format that could
reasonably be expected to permit such Person to link Patient Identifiers with
the applicable patient's Health Information. Notwithstanding the foregoing, in
the event that SmithKline Xxxxxxx or its Affiliates have delivered to the
Information Encoder an Authorization, then the Information Encoder may provide
to SmithKline Xxxxxxx or its Affiliates the Encoding Keys, together with the
Patient Identifiers and Patient Demographic Information, covered by the
Authorization. In such event, SmithKline Xxxxxxx shall deliver to Quest
Diagnostics, by electronic or other means, a copy of the applicable
Authorization not later than two business days after the date on which
SmithKline Xxxxxxx delivers such Authorization to the Information Encoder and
notice that SmithKline Xxxxxxx has requested the Information Encoder to deliver
such Encoding Keys, Patient Identifiers and Patient Demographic Information to
SmithKline Xxxxxxx or its Affiliates.
ARTICLE VII
QUALITY OF DATA AND SERVICE LEVELS
16
SECTION 7.01. QUALITY OF DATA. (a) Except as expressly set
forth in this Agreement, Quest Diagnostics makes no representation or warranty
with respect to the quality of any Data provided to SmithKline Xxxxxxx pursuant
to this Agreement and shall provide such Data on an "as is" basis including,
without limitation, (i) any representation or warranty regarding Year 2000
Compliance or (ii) any warranty of merchantability or fitness of use; PROVIDED,
HOWEVER, that Quest Diagnostics will use reasonable commercial efforts to
maximize the accuracy of Data and to cause Laboratory Data relating to Clinical
Laboratory Services performed by Quest Diagnostics or its Affiliates after the
Effective Date to be in Year 2000 Compliance. Any efforts made by Quest
Diagnostics or its Affiliates in the normal course of the Quest Diagnostics
Informatics Business to improve the accuracy of the Data also shall be made for
SmithKline Xxxxxxx and its Affiliates pursuant to this Agreement.
(b) Quest Diagnostics makes no commitment to continue in the
Quest Diagnostics Informatics Business. If Quest Diagnostics and its Affiliates
exit the Quest Diagnostics Informatics Business and no longer maintain the Quest
Informatics Database and/or the SBCL Informatics Database, then Quest
Diagnostics shall provide the Laboratory Data on a "where is" as well as "as is"
basis with SmithKline Xxxxxxx to pay for all reasonable costs associated with
extracting Data from the laboratory information and billing information systems
of Quest Diagnostics and its Affiliates and transmitting such Data to SmithKline
Xxxxxxx; PROVIDED that Quest Diagnostics shall only be obligated to provide
SmithKline Xxxxxxx with Data relating to the data fields set forth on Appendix A
as of the date hereof plus Data relating to any data fields added to Appendix A
after the date hereof, but, subject to Section 7.04, only to the extent that
Quest Diagnostics and its Affiliates collect such Laboratory Data in the course
of performing Clinical Laboratory Services. In furtherance of this Section
7.01(b) and Section 7.01(e), Quest Diagnostics agrees to use commercially
reasonable efforts to accommodate, at SmithKline Xxxxxxx'x expense, reasonable
requests for any cleaning, collecting and/or transmitting of Laboratory Data,
including to facilitate encoding pursuant to Article VI.
(c) Unless (i) Quest Diagnostics or its Affiliates no longer
maintain the Quest Informatics Database and/or the SBCL Informatics Database or
(ii) Quest Diagnostics is in breach of its obligations set forth in Section
7.01(d) or (e) or Section 7.02(a), Quest Diagnostics' obligation to use
Laboratory Data to create Encoded Laboratory Data pursuant to Article VI for
delivery to SmithKline Xxxxxxx pursuant to Section 3.02 and its obligation to
deliver Laboratory Data to SmithKline Xxxxxxx pursuant to Section 4.02 shall be
limited to the Laboratory Data residing in electronic format in the Quest
Informatics Database and/or the SBCL Informatics Database, except to the extent
provided in Section 7.01(e).
(d) So long as Quest Diagnostics or its Affiliates conduct the
Quest Diagnostics Informatics Business, Quest Diagnostics shall cause the Quest
Informatics Database and the SBCL Informatics Database:
17
(i) to be updated, (A) in the case of the Quest Informatics
Database on a daily basis (at least five days a week) and (B) in the
case of the SBCL Informatics Database no less frequently than on a
weekly basis, with all Laboratory Data then reasonably available
relating to at least the fields then set forth on Appendix A (but in no
event relating to less than the fields set forth on Appendix A) and
generated by Quest Diagnostics or its Affiliates since the previous
time as of which such database or databases have been so updated, and
(ii) to include in a timely fashion Laboratory Data with
respect to substantially all Clinical Laboratory Services (excluding
Clinical Laboratory Information Services) performed by Quest
Diagnostics and its Affiliates during the preceding three-year period
(but in any event after January 1, 1998).
Without limiting Section 7.01(d)(i), Quest Diagnostics shall use reasonable
commercial efforts to cause the SBCL Informatics Database to be updated pursuant
to the foregoing clause (i) on a daily basis (at least five days a week). Quest
Diagnostics shall use commercially reasonable efforts to cause the Quest
Informatics Database and the SBCL Informatics Database to include, not later
than five days after the applicable laboratory test result is finally reported
to the applicable physician, Laboratory Data with respect to substantially all
Clinical Laboratory Services (excluding Clinical Laboratory Information
Services) performed by Quest Diagnostics and its Affiliates after the date
hereof, PROVIDED that, as of any date, Quest Diagnostics shall not be required
to cause such databases to include Laboratory Data with respect to Clinical
Laboratory Services performed more than three years prior to such date. Quest
Diagnostics shall use commercially reasonable efforts to cause each laboratory
that transmits Laboratory Data for entry into the Quest Informatics Database
and/or the SBCL Informatics Database to do so on a daily basis.
(e) If Quest Diagnostics or an Affiliate of Quest Diagnostics
deletes any field from the Quest Informatics Database or the SBCL Informatics
Database which field is marked with an asterisk on Appendix A, SmithKline
Xxxxxxx may request in writing that Quest Diagnostics continue providing
SmithKline Xxxxxxx with the Laboratory Data relating to such field; PROVIDED
that SmithKline Xxxxxxx shall pay for all reasonable costs associated with
extracting such Data from the laboratory information and billing information
systems of Quest Diagnostics and its Affiliates and transmitting such Data to
SmithKline Xxxxxxx unless Quest Diagnostics or its Affiliates deleted such field
from, or failed to include such field in, the Quest Informatics Database or the
SBCL Informatics Database in violation of Section 7.02(a).
(f) Quest Diagnostics shall provide SmithKline Xxxxxxx, on at
least a monthly basis, with the then current schedule for each of its or its
Affiliates' laboratories with respect to such laboratories' transmission of
Laboratory Data for entry into the Quest Informatics
18
Database and/or SBCL Informatics Database. This obligation shall be suspended
during any period that each such laboratory is transmitting laboratory data on a
daily basis.
SECTION 7.02. QUEST INFORMATICS DATABASE. (a) The current data
fields embodied in the Quest Informatics Database and SBCL Informatics Database
are set forth in Appendix A, which Appendix shall be updated from time to time
by Quest Diagnostics to reflect changes in such data fields. Quest Diagnostics
shall notify SmithKline Xxxxxxx in writing at least 30 days in advance of any
changes in the data fields embodied in the Quest Informatics Database or the
SBCL Informatics Database which may impact Data provided to SmithKline Xxxxxxx
or the Information Encoder. Notwithstanding the foregoing, Quest Diagnostics
agrees not to, and to cause its Affiliates not to, delete any data fields from
the Quest Informatics Database or SBCL Informatics Database designated by an
asterisk on Appendix A unless Quest Diagnostics and its Affiliates do not
provide Laboratory Data relating to such fields to any Third Party in connection
with the Quest Diagnostics Informatics Business and Quest Diagnostics provides
SmithKline Xxxxxxx with 12 months' written notice (unless and to the extent such
sooner deletion is required by a change in Applicable Law). If, in the manner
permitted by the preceding sentence, Quest Diagnostics or an Affiliate of Quest
Diagnostics deletes any field from the Quest Informatics Database or the SBCL
Informatics Database which field is marked with an asterisk on Appendix A and
Quest Diagnostics or its Affiliates subsequently provide Laboratory Data
relating to such field to any Third Party in connection with the Quest
Diagnostics Informatics Business, such field shall be added back to the Quest
Informatics Database and the SBCL Informatics Database and shall be deemed added
back to Appendix A (marked with an asterisk).
(b) During the Term, Quest Diagnostics shall provide to
SmithKline Xxxxxxx documentation defining the data specifications, elements,
data fields and formats used by Quest Diagnostics and its Affiliates with
respect to Data. Quest Diagnostics and its Affiliates shall provide all
associated reference data needed to interpret the Laboratory Data. All
Laboratory Data shall be linked in such a way that all relationships among data
fields and types are clearly and unambiguously established. During the Term,
Quest Diagnostics shall also provide SmithKline Xxxxxxx with a copy of any
available standard data dictionary that Quest Diagnostics or an Affiliate of
Quest Diagnostics maintains or uses with respect to the Laboratory Data and its
documentation on file layouts in connection with the Laboratory Data. Quest
Diagnostics will identify, maintain and make available a single point of contact
to assist SmithKline Xxxxxxx in resolving any questions regarding Data.
(c) SmithKline Xxxxxxx shall be entitled during the Term to
retain an independent Third Party (subject to Section 12.03 regarding
confidentiality) to audit, in accordance with Section 8.05, the procedures and
processes adopted by Quest Diagnostics for providing Data to SmithKline Xxxxxxx
and its Affiliates in accordance with the terms of this Agreement.
19
SECTION 7.03. REPAIRS AND REPLACEMENTS. Upon the making of any
material repairs or replacements to Data, Quest Diagnostics agrees to promptly
inform SmithKline Xxxxxxx (and, to the extent necessary, the Information
Encoder) of such material repairs or replacements and to use reasonable
commercial efforts to assist SmithKline Xxxxxxx (and, to the extent necessary,
the Information Encoder) in making any corresponding repairs or replacements to
Data previously provided to SmithKline Xxxxxxx (and, if applicable, the
Information Encoder), including providing SmithKline Xxxxxxx (or to the extent
necessary, the Information Encoder) with such repaired or replaced Data. If
Quest Diagnostics becomes aware of any material or systematic repairs necessary
to maintain the accuracy of the Data, Quest Diagnostics shall promptly notify
SmithKline Xxxxxxx.
SECTION 7.04. MINIMUM DATA FIELDS. Notwithstanding anything to
the contrary in this Article VII, Quest Diagnostics agrees to collect, and to
cause its Affiliates to collect, during the Term, to the extent consistent with
the normal operations of providing Clinical Laboratory Services, Laboratory Data
relating to the data fields set forth in Appendix C.
SECTION 7.05. SERVICE LEVELS. (a) Quest Diagnostics agrees to
the specific service levels set forth in Appendix E for providing Data to
SmithKline Xxxxxxx pursuant to Sections 3.02 and/or 4.02 but only to the extent
such service levels are expressly applicable to Sections 3.02 and/or 4.02.
(b) To the extent that (i) SmithKline Xxxxxxx requests service
pursuant to Sections 3.02 and/or 4.02 in excess of any expressly applicable
limits specified in Appendix E or (ii) to the extent SmithKline Xxxxxxx'x
request pursuant to Sections 3.02 and/or 4.02 does not fall within a category
for which there are specified service levels in this Agreement but which is of a
type comparable to the types of requests that are then serviced in the normal
course of the Quest Diagnostics Informatics Business, Quest Diagnostics agrees
to use commercially reasonable efforts to provide Laboratory Data to SmithKline
Xxxxxxx in satisfaction of such request in accordance with the normal business
practices of the Quest Diagnostics Informatics Business with respect to services
provided to its Clients; PROVIDED that Quest Diagnostics will not provide
services under the foregoing clause (ii) that are in addition to the services
contemplated by this Agreement (including Appendix E as then in effect) (such
additional services, "ADDITIONAL SERVICES"), other than the faster or more
frequent delivery of Data pursuant to Sections 3.02 and/or 4.02. Quest
Diagnostics will treat SmithKline Xxxxxxx no less favorably than any other
Client of the Quest Diagnostics Informatics Business in the normal course of
such business.
(c) To the extent that an applicable service level requested
by SmithKline Xxxxxxx for the provision of Data pursuant to Sections 3.02 and/or
4.02 is not specified on Appendix E as then in effect and is either (x) with
respect to a Renewal Term or (y) a request that
20
is of a type that is not then serviced in the normal course of the Quest
Diagnostics Informatics Business or involves Additional Services, upon
SmithKline Xxxxxxx'x request, Quest Diagnostics agrees to negotiate with
SmithKline Xxxxxxx in good faith for the purpose of determining such additional,
reasonably appropriate, service levels for providing Data to SmithKline Xxxxxxx
pursuant to Sections 3.02 and/or 4.02 and an adjustment to the price paid by
SmithKline Xxxxxxx pursuant to Section 8.01 solely to reflect the additional
service level to be provided by Quest Diagnostics (each such price adjustment to
be determined pursuant to Section 8.01(b) notwithstanding whether or not such
additional service level relates to an Applicable Period). The parties agree to
amend Appendix E from time to time to reflect such mutually agreed new service
levels and fees. If the parties cannot mutually agree on an applicable new
service level within 30 days of such request, the parties shall resolve such
dispute pursuant to Section 12.15.
ARTICLE VIII
FEES
SECTION 8.01. CATEGORY ONE USES. (a) INITIAL EIGHTEEN MONTHS
OF INITIAL TERM. During the period beginning on the Effective Date and ending on
the date immediately preceding the date on which Quest Diagnostics completes the
delivery to the Information Encoder or the Escrow Agent under Appendix F and to
SmithKline Xxxxxxx of all Historical Data in accordance with Section 6.04 and
Appendix F (the "COMMENCEMENT Date"), there shall be no charge for Category One
Uses of the Data. During the period beginning on the Commencement Date and
ending on the eighteen-month anniversary of the Effective Date, SmithKline
Xxxxxxx shall pay to Quest Diagnostics in advance and in full, promptly after
the Commencement Date, a fee of fifty thousand U.S. Dollars (US $50,000) per
month (prorated for any partial month based on the actual number of days
remaining in such month over the total number of days in such month) for such
period for Category One Uses of Data; provided that in no event shall the
aggregate fee for such period exceed $625,000.
(b) REMAINING TWENTY-FOUR MONTHS OF INITIAL TERM AND RENEWAL
TERMS. Subject to Section 8.01(c), for each twelve-month period during the
Initial Term, commencing on the eighteen-month and thirty-month anniversaries,
respectively, of the Effective Date, and for each Renewal Term, if the Term is
so extended by SmithKline Xxxxxxx (each such twelve-month period or Renewal
Term, an "APPLICABLE PERIOD"), SmithKline Xxxxxxx shall pay to Quest Diagnostics
for Category One Uses of Data a fee (the "APPLICABLE FEE") equal to the lowest
price charged in the twelve-month period preceding such Applicable Period by
Quest Diagnostics or its Affiliates to another Pharmaceutical Company for
similar use of laboratory data; PROVIDED that if Quest Diagnostics or its
Affiliates do not provide any other Pharmaceutical Company with similar use of
laboratory data, then the Applicable Fee shall be the lesser of (i) the
21
fair market value of SmithKline Xxxxxxx'x use of the Data during such Applicable
Period and (ii) the lowest price that Quest Diagnostics or one of its Affiliates
reasonably would charge a Pharmaceutical Company for similar use of the
laboratory data for such Applicable Period. The lowest price that Quest
Diagnostics or one of its Affiliates charges or reasonably would charge a
Pharmaceutical Company for similar use of laboratory data, as provided in the
foregoing sentence, shall be determined using as a reference the prices Quest
Diagnostics and its Affiliates charge other Clients that are Pharmaceutical
Companies for separate categories of laboratory data and separate uses of such
data, such as, without limitation, for use of patient identifiable laboratory
data, internal use of encoded laboratory data and use of encoded laboratory data
for programs, services and products. The use of Data under this Agreement shall
be valued based on, among other factors, such separate categories of laboratory
data and separate uses of such data provided for under this Agreement, the
provision of the Encoded Laboratory Data pursuant to Section 3.02 (it being
agreed that Quest Diagnostics would agree to a prospective reduction in the
volume of Data provided under Section 3.02 in order to reduce the fee for any
Applicable Period), the uses of the Data permitted pursuant to this Agreement,
the volume of Data to which SmithKline Xxxxxxx is entitled to receive under
Section 4.02 and any other services agreed to under Section 7.05(c) for the
Applicable Period. For each Applicable Period during the Initial Term, there
shall be no charge for Category One A Uses of the Data.
(c) Notwithstanding Section 8.01(b), the Applicable Fee for
any Applicable Period during the Initial Term shall not exceed $500,000 for such
Applicable Period. The $500,000 limitation under this Section 8.01(c) shall not
be evidence of the value of the delivery of the Encoded Laboratory Data (or the
use of the Encoded Laboratory Data for Category One A Uses) during any Renewal
Term.
(d) SmithKline Xxxxxxx and Quest Diagnostics, acting
reasonably and in good faith, shall seek to reach an agreement on the Applicable
Fee to apply for each Applicable Period not later than 90 days prior to the
start of such Applicable Period. If they reach agreement, such Applicable Fee
shall be binding on the parties for the entire Applicable Period, subject to any
adjustment in the Applicable Fee pursuant to Section 7.05. If they cannot timely
reach agreement on such Applicable Fee, then the Applicable Fee for the
twelve-month period of the Term immediately preceding the start of the
Applicable Period in dispute shall apply, pending resolution pursuant to Section
12.15. Payments of the Applicable Fee, whether final or pending resolution,
shall be made annually, in advance, on the first day of each Applicable Period.
Promptly and in any event within 30 days of the resolution of the Applicable Fee
to apply for such Applicable Period in dispute, either (i) Quest Diagnostics
shall refund to SmithKline Xxxxxxx any overpayment by it of the Applicable Fee
or (ii) SmithKline Xxxxxxx shall pay any remaining balance due of the Applicable
Fee to Quest Diagnostics, plus, in the case of each of the foregoing clauses (i)
and (ii), interest on the amount of such refund or balance due at the prime rate
published by Citibank, N.A. on the last business day of each month(s) during
22
the period from the beginning of such Applicable Period and the date on which
the amount of the refund or additional balance due, as the case may be, is paid.
(e) (i) In connection with the determination of the Applicable
Fee pursuant to Section 8.01(b), during the Term Quest Diagnostics
shall provide SmithKline Xxxxxxx, subject to Section 12.03, with the
relevant terms of each other agreement entered into during the Term
pursuant to which Quest Diagnostics or its Affiliates provide another
Pharmaceutical Company use of laboratory data (or encoded laboratory
data) (an "OTHER QUEST DATA ACCESS AGREEMENT"). Quest Diagnostics may
exclude the name of such Pharmaceutical Company, project specific data
and anything that could reasonably identify the Pharmaceutical Company
or the project, including the drug or vaccine involved, but shall
include a brief description of its use of the laboratory data and/or
encoded laboratory data.
(ii) In connection with the determination of the Applicable
Fee pursuant to Section 8.01(b), during the Term, SmithKline Xxxxxxx
shall provide Quest Diagnostics, subject to Section 12.03, with the
terms related to its anticipated use of the Data and other information
that is reasonably necessary in order to determine the Applicable Fee
for each Applicable Period. SmithKline Xxxxxxx may exclude the names of
any of its Clients, project specific data and anything that could
reasonably identify its Clients or its projects, including any drug or
vaccine involved.
(f) If SmithKline Xxxxxxx and Quest Diagnostics have not
reached an agreement on the Applicable Fee to apply pursuant to Section 8.01(b)
for an Applicable Period on or prior to 90th day prior to the start of such
Renewal Term, then such dispute shall be resolved pursuant to Section 12.15. If
the dispute is arbitrated pursuant to Section 5 of Appendix D, the arbitrator
shall request that each party present the arbitrator with a proposed Applicable
Fee, which can be based on a fixed amount, volume of use, a royalty rate or any
other reasonable method or combination of methods. The arbitrator shall then
select that party's proposal that most closely approximates the Applicable Fee
due pursuant to Section 8.01(b), before giving effect to Section 8.01(c). The
arbitrator shall not select any other amount as the Applicable Fee unless the
arbitrator determines that either party has not complied with Section 8.01(e).
In selecting which proposal most closely approximates the Applicable Fee, the
arbitrator shall consider, in addition to the other considerations set forth in
Section 8.01, (i) for purposes of determining the fair market value of
SmithKline Xxxxxxx'x use of the Data during such Applicable Period, any evidence
provided by the parties of the fair market value of SmithKline Xxxxxxx'x use of
the Data, (ii) for purposes of determining the lowest price that Quest
Diagnostics charges or reasonably would charge a Pharmaceutical Company for
similar use of laboratory data for such Applicable Period, the Other Quest Data
Access Agreements provided to the arbitrator by the parties and (iii) such other
information as the arbitrator shall deem relevant. In comparing the terms of
this Agreement with the terms of other data access agreements, the arbitrator
shall compare the type and scope of use of laboratory data, the volume of use of
23
laboratory data, the type of customer, the term of the applicable data access
agreement, when such agreement was entered into and any other factors the
arbitrator deems relevant.
SECTION 8.02. CURRENCY AND PAYMENT. All amounts due by
SmithKline Xxxxxxx to Quest Diagnostics under any provision of this Agreement
shall be payable in United States currency by electronic funds transfer (SWIFT)
to an account designated by Quest Diagnostics. Any obligation to pay shall only
be deemed fulfilled on the day on which the relevant amount of money is credited
to the aforesaid account. The fees specified in this Article VIII shall be
denominated in U.S. dollars. Quest Diagnostics shall be responsible on its own
account for its own corporate income taxes. In the event of a breach by Quest
Diagnostics that continues for thirty (30) days after SmithKline Xxxxxxx gives
Quest Diagnostics written notice setting forth the nature of such breach,
SmithKline Xxxxxxx may suspend payment of any amount due under Section 8.01
until Quest Diagnostics cures such breach.
SECTION 8.03. INTEREST. If SmithKline Xxxxxxx shall fail to
pay any amount specified under this Agreement after the due date thereof, the
amount owed shall bear interest at the prime rate published by Citibank, N.A. on
the last business day of the month(s) of the delay plus two (2) percentage
points, from the due date until paid; PROVIDED, HOWEVER, that, if this interest
rate is held to be unenforceable for any reason, the interest rate shall be the
maximum rate allowed by law at the time the payment is due.
SECTION 8.04. RECORDS. (a) SmithKline Xxxxxxx shall keep (and
ensure that its Affiliates shall keep) correct and complete records of account
containing all information required to compute and verify fees due to Quest
Diagnostics under this Agreement, to verify SmithKline Xxxxxxx'x overall
compliance with the terms of this Agreement and to verify Authorization.
(b) Quest Diagnostics shall keep (and ensure that its
Affiliates shall keep) correct and complete records of account containing all
information required to verify Quest Diagnostics' overall compliance with the
terms of this Agreement.
SECTION 8.05. AUDIT BY SMITHKLINE XXXXXXX. SmithKline Xxxxxxx
shall be entitled during the Term to retain an independent Third Party (which
shall execute a confidentiality agreement consistent with Section 12.03
reasonably acceptable to Quest Diagnostics) to audit, no more than once per year
at SmithKline Xxxxxxx'x expense, to verify the compliance of any pricing scheme
proposed by Quest Diagnostics with the standards defined in this Article VIII
and Quest Diagnostics' compliance with the other terms of this Agreement. The
auditor is subject to approval by Quest Diagnostics, which approval shall not be
unreasonably withheld or delayed. The auditor shall be enabled to inspect only
those records reasonably relevant to Quest Diagnostics' compliance with the
terms of this Agreement. The auditor shall conduct its review during Quest
Diagnostics' normal business hours and without unreasonably interfering with
24
Quest Diagnostics' normal operations. All information obtained by such auditor
shall be considered confidential and subject to Section 12.03 of this Agreement.
Such auditor shall provide to SmithKline Xxxxxxx only that information
reasonably required by SmithKline Xxxxxxx in order to verify Quest Diagnostics'
compliance with the terms of this Agreement and shall not provide any
information that would identify a Client of Quest Diagnostics or can be excluded
under Section 8.01(e). The auditor shall simultaneously provide to Quest
Diagnostics copies of all information collected from Quest Diagnostics.
SmithKline Xxxxxxx shall not under any circumstances disclose any information so
provided by such auditor to any Third Party, except as permitted by Section
12.03.
SECTION 8.06. AUDIT BY QUEST DIAGNOSTICS. Quest Diagnostics
shall be entitled during the Term to retain an independent Third Party (which
shall execute a confidentiality agreement consistent with Section 12.03
reasonably acceptable to SmithKline Xxxxxxx) to audit, no more than once per
year at Quest Diagnostics' expense, to verify SmithKline Xxxxxxx'x compliance
with the terms of this Agreement. The auditor is subject to approval by
SmithKline Xxxxxxx, which approval shall not be unreasonably withheld or
delayed. The auditor shall be enabled to inspect only those records reasonably
relevant to SmithKline Xxxxxxx'x compliance with the terms of this Agreement.
The auditor shall conduct its review during SmithKline Xxxxxxx'x normal business
hours and without unreasonably interfering with SmithKline Xxxxxxx'x normal
operations. All information obtained by such auditor shall be considered
confidential and subject to Section 12.03 of this Agreement. Such auditor shall
provide to Quest Diagnostics only that information reasonably required by Quest
Diagnostics in order to verify SmithKline Xxxxxxx'x compliance with the terms of
this Agreement and shall not provide any information that would identify a
Client of SmithKline Xxxxxxx or can be excluded under Section 8.01(e). The
auditor shall simultaneously provide to SmithKline Xxxxxxx copies of all
information collected from SmithKline Xxxxxxx. Quest Diagnostics shall not under
any circumstances disclose any information so provided by such auditor to any
Third Party, except as permitted by Section 12.03.
ARTICLE IX
TERM AND TERMINATION
SECTION 9.01. INITIAL TERM. Unless renewed or otherwise
terminated, this Agreement shall terminate upon the expiration of the Initial
Term.
SECTION 9.02. RENEWAL. Unless this Agreement is otherwise
terminated, SmithKline Xxxxxxx shall have the option to renew this Agreement for
up to seven (7) successive one-year renewal terms (each such renewal term, a
"RENEWAL TERM"). SmithKline Xxxxxxx agrees to notify Quest Diagnostics in
writing of its intent to renew at least
25
ninety (90) days prior to expiration of the Initial Term. Subject to Section
9.04, if no Renewal Term is elected by SmithKline Xxxxxxx prior to expiration of
the Initial Term or current Renewal Term, then this Agreement shall expire upon
expiration of the Initial Term, or the Renewal Term, as applicable, and, except
as expressly provided otherwise, all rights and obligations of the parties under
this Agreement, including the right to renew this Agreement, shall terminate.
SECTION 9.03. TERMINATION. Either party may terminate this
Agreement:
(a) If at any time the other party shall file in any court or
agency, pursuant to any statute or regulation of any state or country, a
petition in bankruptcy or insolvency or for reorganization or for an arrangement
or for the appointment of a receiver or trustee of such other party or of its
assets, or if the other party proposes a written agreement of composition or
extension of its debts, or if the other party shall be served with an
involuntary petition against it, filed in any insolvency proceeding, and such
petition shall not be dismissed within sixty (60) days after the filing thereof,
or if the other party shall propose or be a party to any dissolution or
liquidation, or if the other party shall make an assignment for the benefit of
creditors.
(b) In the event of a breach by the other party upon the
giving of thirty (30) days' written notice setting forth the nature of such
breach. However, if such breach is cured within the thirty (30) day period (or a
longer period where the nature of the breach is such that it is not curable
within thirty (30) days but actions to cure such breach within a reasonable
period of time have promptly been initiated and continue to be diligently
pursued, meeting reasonable milestones to cure), then such notice shall be
deemed to be withdrawn. Any dispute regarding this Section 9.03 shall be
resolved pursuant to Section 12.15.
SECTION 9.04. POST-TERM OBLIGATIONS. (a) Following the Term,
Quest Diagnostics agrees to continue to provide Data, as applicable, to
SmithKline Xxxxxxx otherwise in accordance the terms of this Agreement for up to
12 months following such expiration for the sole purpose of allowing SmithKline
Xxxxxxx to continue providing existing programs or services to Third Parties to
the extent SmithKline Xxxxxxx'x contractual obligations as of the expiration of
the Term to provide such programs or services extend past the expiration of this
Agreement; PROVIDED, HOWEVER, that Quest Diagnostics has no such obligation in
the event Quest Diagnostics terminates this Agreement pursuant to Section 9.03.
Fees for providing such continued use of Data will be determined in accordance
with Article VIII as if such Data is being provided during a Renewal Term.
(b) Upon termination of this Agreement, both parties shall
have the right to retain any sums already paid by the other party hereunder, and
each party shall pay all sums accrued hereunder which are then due.
26
(c) Upon termination of this Agreement, SmithKline Xxxxxxx,
its Affiliates and its sublicensees shall have the non-exclusive, perpetual,
royalty-free, worldwide right and license to use Data previously received by
them under Article III and/or Article IV.
(d) Expiration or termination of this Agreement in accordance
with the provisions hereof shall not limit remedies which may be otherwise
available in law or equity.
(e) Upon expiration or termination of this Agreement, this
Agreement shall be of no further force or effect, except for (i) any obligations
or liabilities of either party then accrued and unpaid or not performed and (ii)
Articles V and XI, and Sections 3.01, 4.01, 4.03, 12.03, 12.07, 12.15, 12.16,
12.17 and this Section 9.04 shall survive such expiration or termination.
Notwithstanding the foregoing, during the twelve-month period contemplated by
Section 9.04(a), the terms of this Agreement shall remain in effect except as
contemplated by this Section 9.04.
SECTION 9.05. SUSPENSION. If (a) SmithKline Xxxxxxx, its
Affiliates, the Information Encoder or any Person who obtained Data, directly or
indirectly, from SmithKline Xxxxxxx or any of its Affiliates has breached any
obligations contained in this Agreement related to patient confidentiality or
(b) a civil violation with respect to patient confidentiality attributable to
SmithKline Xxxxxxx, its Affiliates, the Information Encoder or any Person who
obtained Data, directly or indirectly, from SmithKline Xxxxxxx or any of its
Affiliates has occurred under this Agreement or (c) Quest Diagnostics reasonably
believes as a result of a change in Applicable Law or a new judicial or
administrative interpretation of existing Applicable Law binding on Quest
Diagnostics that a criminal violation with respect to patient confidentiality
attributable to SmithKline Xxxxxxx, its Affiliates, the Information Encoder or
any Person who obtained Data, directly or indirectly, from SmithKline Xxxxxxx or
any of its Affiliates has occurred under this Agreement (provided that (i) Quest
Diagnostics provides SmithKline Xxxxxxx with written notice of its determination
as promptly as reasonably practicable and (ii) Quest Diagnostics provides
SmithKline Xxxxxxx with a written opinion of counsel, reasonably qualified to
opine on the law of patient confidentiality, disclosures and use of healthcare
data, supporting Quest Diagnostics' contention), then in addition to its other
rights Quest Diagnostics, upon written notice to SmithKline Xxxxxxx, has the
right to immediately suspend the transmission of Patient Identifiers, Patient
Demographic Information and physician identification numbers to the Information
Encoder and the providing of Data to SmithKline Xxxxxxx solely to the extent
necessary to prevent the continuation of such breach or violation and only until
such time as (i) SmithKline Xxxxxxx puts in place a remedy reasonably acceptable
to Quest Diagnostics or (ii) Quest Diagnostics and SmithKline Xxxxxxx, each
acting reasonably and in good faith, agree that no such breach or violation or
change in Applicable Law has occurred. If, within 5 business days, SmithKline
Xxxxxxx and Quest Diagnostics cannot agree on the appropriate remedy or on
whether or not such alleged breach or violation has
27
occurred, the parties shall resolve such dispute pursuant to Section 12.15. If
Quest Diagnostics suspends the provision of Data pursuant to the foregoing
clause (c), SmithKline Xxxxxxx shall not be obligated to pay the fees provided
in Section 8.01 for such suspended Data during the period of such suspension.
ARTICLE X
ASSIGNMENT AND CHANGE OF CONTROL
SECTION 10.01. ASSIGNMENT. This Agreement and the rights and
obligations hereunder shall not be assignable or transferable by SmithKline
Xxxxxxx or by Quest Diagnostics (other than by operation of law in connection
with a merger, or sale of substantially all the assets, of SmithKline Xxxxxxx or
Quest Diagnostics) without the prior written consent of the other party hereto;
PROVIDED, HOWEVER, that SmithKline Xxxxxxx or Quest Diagnostics may assign its
rights hereunder in whole and not in part to an Affiliate of such party without
the prior written consent of the other party; PROVIDED FURTHER, HOWEVER, that no
assignment shall limit or affect the assignor's obligations hereunder. In the
event that any such assignee ceases to be an Affiliate of the assignor, all
rights and obligations hereunder shall revert to the assignor. Any attempted
assignment in violation of this Section 10.01 shall be void. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and permitted assigns of such party.
SECTION 10.02. CHANGE OF CONTROL. SmithKline Xxxxxxx shall
notify Quest Diagnostics promptly upon a Change of Control of SmithKline
Xxxxxxx. If a Change of Control of SmithKline Xxxxxxx occurs during the Initial
Term, the fees provided for in Section 8.01 shall immediately be adjusted so
that, over the remainder of the Initial Term, the fees are 50% of the amount
(prorated for a partial year and appropriately adjusted for any period exceeding
one year) that they would be for the remainder of the Initial Term (but without
application of the cap provided in Section 8.01(c)) plus $500,000 per year (pro
rated) for the remainder of the Initial Term. In addition, if a Change of
Control of SmithKline Xxxxxxx occurs at any time when this Agreement is in
effect and, over the twelve-month period immediately preceding such Change of
Control, on a pro forma basis, taking into account the Change of Control,
SmithKline Xxxxxxx and its Affiliates (or, if applicable, the successor
corporation to SmithKline Xxxxxxx and its Affiliates) records net revenue of
$250 million or more from providing Clinical Laboratory Services (excluding
Clinical Laboratory Information Services), Quest Diagnostics may terminate this
Agreement by providing notice at any time that is at least 18 months after the
date of such Change of Control unless SmithKline Xxxxxxx (or if applicable, its
successor corporation) and its Affiliates on or prior to the date of such notice
cease providing such Clinical Laboratory Services (excluding Clinical Laboratory
Information Services) either by selling the business or assets generating such
revenues to a Third Party or otherwise.
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ARTICLE XI
INDEMNIFICATION
SECTION 11.01. INDEMNIFICATION BY SMITHKLINE XXXXXXX. Quest
Diagnostics, its Affiliates and their successors and permitted assigns, and the
officers, directors, employees and agents of Quest Diagnostics, its Affiliates
and their successors and permitted assigns, in accordance with Section 10.01
(each a "QUEST DIAGNOSTICS INDEMNIFIED PARTY"), shall be indemnified and held
harmless by SmithKline Xxxxxxx for any and all liabilities, losses, damages,
claims, costs and expenses, interest, awards, judgments and penalties
(including, without limitation, reasonable attorneys' and consultants' fees and
expenses) actually suffered or incurred by any Quest Diagnostics Indemnified
Party (including, without limitation, any Action brought or otherwise initiated
by any of them) (hereinafter a "LOSS"), to the extent arising out of or
resulting from:
(a) the breach by SmithKline Xxxxxxx or any of its Affiliates
of any of the terms of this Agreement;
(b) the use or disclosure, by SmithKline Xxxxxxx or any of its
Affiliates, of any Data, whether or not in accordance with the terms of this
Agreement, but not the disclosure of Encoded Laboratory Data to SmithKline
Xxxxxxx or any of its Affiliates by Quest Diagnostics pursuant to this Agreement
(unless such disclosure is prohibited by the terms of an agreement entered into
by SBCL or its Affiliates prior to the Effective Date);
(c) the use or disclosure by any Third Party of any Data,
whether or not in accordance with the terms of this Agreement, when such Data
was obtained, directly or indirectly, from SmithKline Xxxxxxx or any of its
Affiliates, but not the disclosure of Encoded Laboratory Data to SmithKline
Xxxxxxx or any of its Affiliates by Quest Diagnostics pursuant to this Agreement
(unless such disclosure is prohibited by the terms of an agreement entered into
by SBCL or its Affiliates prior to the Effective Date); or
(d) any disclosure by the Information Encoder to any Person
(other than Quest Diagnostics) of any portion of the Master Encoding Key
Database in violation of Applicable Law or the terms of this Agreement;
PROVIDED that SmithKline Xxxxxxx shall not indemnify and hold harmless any Quest
Diagnostics Indemnified Party for any Loss to the extent arising out of or
resulting from such Quest Diagnostics Indemnified Party's negligence or wilful
misconduct, Quest Diagnostic's breach of this Agreement or from any inaccuracy
in the Data excluding Data in the SBCL Informatics
29
Database in the form such Data and the SBCL Informatics Database existed on the
Effective Date; PROVIDED FURTHER that the provision of Data by Quest Diagnostics
under this Agreement shall not be deemed to be negligence. Nothing herein shall
be deemed to supersede SmithKline Xxxxxxx'x indemnification obligation under the
Purchase Agreement with respect to testing performed by SBCL prior to the
Effective Date.
To the extent that a Quest Diagnostics Indemnified Party is
entitled under the terms of the applicable Authorization to indemnification or
to otherwise recover damages from a Client of Quest Diagnostics for any Losses
incurred by the Quest Diagnostics Indemnified Party for which SmithKline Xxxxxxx
also has an indemnification obligation under this Section 11.01 and such Client
is not the subject of an involuntary case or proceeding under federal or state
bankruptcy, insolvency, reorganization or other similar law, (i) the Quest
Diagnostics Indemnified Party shall seek, using commercially reasonable efforts,
to recover the full amount of such Losses from such Client before making any
claim against SmithKline Xxxxxxx under this Section 11.01 and (ii) SmithKline
Xxxxxxx shall be obligated to indemnify the Quest Diagnostics Indemnified Party
pursuant to this Section 11.01 for such Losses solely to the extent that such
Losses exceed the amount of indemnification or other damages recovered by the
Quest Diagnostics Indemnified Party from such Client, PROVIDED that the Quest
Diagnostics Indemnified Party has complied with its obligations under the
foregoing clause (i). For purposes of this Section 11.01, "commercially
reasonable efforts" shall include pursuing a claim for indemnification or to
otherwise recover damages from a Client of Quest Diagnostics until the matter is
finally determined by a court of competent jurisdiction, unless SmithKline
Xxxxxxx otherwise gives the Quest Diagnostics Indemnified Party its written
consent (which shall not be unreasonably withheld).
To the extent any obligation of SmithKline Xxxxxxx in this
Section 11.01 may be unenforceable, SmithKline Xxxxxxx shall contribute the
maximum amount that it is permitted to contribute under Applicable Law to the
payment and satisfaction of all Losses incurred by the Quest Diagnostics
Indemnified Parties for which SmithKline Xxxxxxx has an indemnification
obligation under this Section 11.01.
SECTION 11.02. INDEMNIFICATION BY QUEST DIAGNOSTICS.
SmithKline Xxxxxxx, its Affiliates and their successors and permitted assigns,
and the officers, directors, employees and agents of SmithKline Xxxxxxx, its
Affiliates and their successors and permitted assigns, in accordance with
Section 10.01 (each a "SMITHKLINE XXXXXXX INDEMNIFIED PARTY"), shall be
indemnified and held harmless by Quest Diagnostics for any and all Losses to the
extent arising out of or resulting from (i) the breach by Quest Diagnostics or
any of its Affiliates of any of the terms of this Agreement or (ii) any
inaccuracy in the Data excluding (A) Data in the SBCL Informatics Database in
the form such data and the SBCL Informatics Database existed on the Effective
Date and (B) Data transferred without error (to the extent such error relates to
the Loss) to the SBCL Informatics Database after the Effective Date solely to
the extent such Data relates
30
to testing performed by SBCL on or prior to the Effective Date. To the extent
any obligation of Quest Diagnostics in this Section 11.02 may be unenforceable,
Quest Diagnostics shall contribute the maximum amount that it is permitted to
contribute under Applicable Law to the payment and satisfaction of all Losses
incurred by the SmithKline Xxxxxxx Indemnified Parties for which Quest
Diagnostics has an indemnification obligation under this Section 11.02.
SECTION 11.03. CERTAIN PROCEDURES. (a) A Quest Diagnostics
Indemnified Party or SmithKline Xxxxxxx Indemnified Party (an "INDEMNIFIED
PARTY") shall give the indemnifying party written notice of any matter which
such Indemnified Party has determined has given or could give rise to a right of
indemnification under this Agreement within 30 days of such determination,
stating the indemnifiable amount, if known, and method of computation thereof,
and containing a reference to the provisions of this Agreement in respect of
which such right of indemnification is claimed or arises. The failure by any
Indemnified Party so to notify the indemnifying party shall not relieve the
indemnifying party from any liability which it may have to such Indemnified
Party under this Article XI, except to the extent that the indemnifying party
demonstrates that it has been materially prejudiced by such failure (except that
the indemnifying party shall not be liable for any expense incurred during the
period, if any, from the date that is thirty days after such determination to
the date the Indemnified Party provides notice hereunder). If the indemnifying
party does not notify the Indemnified Party within 30 days following its receipt
of such notice that the indemnifying party disputes its liability to the
Indemnified Party under this Article XI, such claim specified by the Indemnified
Party in such notice shall be conclusively deemed a liability of the
indemnifying party under this Article XI and the indemnifying party shall pay
the amount of such liability to the Indemnified Party on demand or, in the case
of any notice in which the amount of the claim (or any portion thereof) is
estimated, on such later date when the amount of such claim (or such portion
thereof) becomes finally determined. If the indemnifying party has timely
disputed its liability with respect to such claim, as provided above, the
indemnifying party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute and, if not resolved through
negotiations, such dispute shall be resolved by litigation in an appropriate
court of competent jurisdiction pursuant to Section 12.16.
(b) The obligations and liabilities of the indemnifying party
under this Article XI with respect to claims of any third party that are subject
to the indemnification provided for in this Article XI ("THIRD PARTY CLAIMS")
shall be governed by and contingent upon the following additional terms and
conditions: if an Indemnified Party shall receive notice of any Third Party
Claim, such Indemnified Party shall give the indemnifying party written notice
of such Third Party Claim within 30 days of the receipt by such Indemnified
Party of such notice and shall deliver copies of all notices and documents
(including court papers) received by the indemnified party relating to the Third
Party Claim during such 30-day time period; PROVIDED, HOWEVER, that the failure
to provide such notice shall not release the indemnifying party from any of its
obligations under this Article XI, except to the extent that the indemnifying
party
31
demonstrates that it has been materially prejudiced by such failure (except that
the indemnifying party shall not be liable for any expenses incurred during the
period, if any, from the date that is thirty days after receipt by the
Indemnified Party of such notice to the date the Indemnified Party provides
notice hereunder). If an indemnifying party acknowledges in writing its
obligation to indemnify an Indemnified Party hereunder against any Losses or
other amounts indemnified against that may result from such Third Party Claim,
then the indemnifying party shall be entitled to assume and control the defense
of such Third Party Claim at its expense and through counsel of its choice;
PROVIDED that such counsel is not reasonably objected to by the Indemnified
Party. Should the indemnifying party so elect to assume the defense of a Third
Party Claim, the indemnifying party shall not be liable to the Indemnified Party
for legal expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof. In the event an indemnifying party exercises the right
to undertake any such defense against any such Third Party Claim as provided
above, the Indemnified Party shall cooperate with the indemnifying party in such
defense and the prosecution thereof. Such cooperation shall include the
retention and (upon the indemnifying party's request) the provision to the
indemnifying party of records and information which are reasonably relevant to
such Third Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder. Whether or not the indemnifying party shall have assumed the defense
of a Third Party Claim, the Indemnified Party shall not admit any liability with
respect to, or settle, compromise or discharge, such Third Party Claim without
the indemnifying party's prior written consent (which consent in a case where
the indemnifying party shall not have assumed the defense of such Third Party
Claim shall not be unreasonably withheld). If the indemnifying party shall have
assumed the defense of a Third Party Claim, the Indemnified Party shall agree to
any settlement, compromise or discharge of a Third Party Claim which the
indemnifying party may recommend and which by its terms obligates the
indemnifying party to pay the full amount of the liability in connection with
such Third Party Claim, which releases the indemnifying party completely in
connection with such Third Party Claim.
SECTION 11.04. ADJUSTMENTS; LIMITATIONS ON INDEMNITY. (a) Any
amount indemnified against under this Article XI shall be net of any amounts
recovered by the Indemnified Party under insurance policies with respect to such
indemnified amount, shall be paid free and clear of any present or future
withholding taxes or other similar charges, and shall be (i) increased to take
account of any net Tax cost incurred by the Indemnified Party arising from the
receipt of indemnity payments hereunder (grossed up for such increase) and (ii)
reduced to take account of any net Tax benefit realized by the Indemnified Party
arising from the incurrence or payment of any such indemnified amount; PROVIDED,
HOWEVER, that (i) the indemnifying party shall be subrogated to the rights of
the Indemnified Party to recover amounts under insurance policies of the
Indemnified Party with respect to such indemnified amount and (ii) to the extent
that the Indemnified Party receives payment of amounts under such policies for
Losses for which the indemnifying party has already made payments under this
Article XI, the Indemnified Party shall pay over such amounts to the
indemnifying party. In computing the amount of any such
32
Tax cost or Tax benefit, the Indemnified Party shall be deemed to recognize all
other items of income, gain, loss, deduction or credit before recognizing any
item arising from the receipt or accrual of any indemnity payment hereunder or
incurrence or payment of any indemnified amount except that carrybacks of net
operating losses or other tax attributes shall be applied in making such
computation after recognizing any item arising from the receipt or accrual of
any indemnity payment or incurrence or payment of an indemnified amount. Any
indemnification payment hereunder shall initially be made without regard to
adjustment for net Tax benefit or net Tax cost under this Section 11.04 and
shall be increased or reduced to reflect any such net Tax cost (including
gross-up) or net Tax benefit within ten days after the Indemnified Party has
actually realized such cost or benefit. For purposes of this Agreement, an
Indemnified Party shall be deemed to have "actually realized" a net Tax cost or
a net Tax benefit to the extent that, and at such time as, the amount of Taxes
payable (including Taxes payable on an estimated basis) by such Indemnified
Party is increased above or reduced below, as the case may be, the amount of
Taxes that such Indemnified Party would be required to pay but for the receipt
or accrual of the indemnity payment or the incurrence or payment of such
indemnified amount as the case may be. The parties shall make any adjusting
payment between each other as is required under this Section 11.04 within ten
(10) days of the date an Indemnified Party is deemed to have actually realized
each net Tax benefit or net Tax cost. The amount of any increase or reduction
hereunder shall be adjusted to reflect any final determination (which shall
include the execution of Form 870-AD or successor form) with respect to the
Indemnified Party's liability for Taxes and payments the Indemnified Party and
the Indemnifying Party to reflect such adjustment shall be made if necessary
within ten (10) days of such determination.
(b) SmithKline Xxxxxxx shall not have any liability under this
Article XI or in connection with its breach of any other provision of this
Agreement for any consequential, punitive, indirect, special or incidental
damages incurred by any Quest Diagnostics Indemnified Party other than
consequential, punitive, indirect, special or incidental damages actually paid
to any third party by such Quest Diagnostics Indemnified Party.
(c) Quest Diagnostics shall not have any liability under this
Article XI or in connection with its breach of any other provision of this
Agreement for any consequential, punitive, indirect, special or incidental
damages incurred by any SmithKline Xxxxxxx Indemnified Party other than
consequential, punitive, indirect, special or incidental damages actually paid
to any third party by such SmithKline Xxxxxxx Indemnified Party.
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ARTICLE XII
MISCELLANEOUS
SECTION 12.01. INTERPRETATION. (a) The headings contained in
this Agreement, in any Appendix hereto, and in the table of contents to this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. All Appendices annexed hereto or
referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein. Any capitalized terms used in any Appendix but
not otherwise defined therein shall have the meaning as defined in this
Agreement.
(b) In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
(c) The definitions of the terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include the Person's successors and
permitted assigns, (iii) the words "herein", "hereof" and "hereunder", and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, and (iv) all references herein to
Articles, Sections and Appendices shall be construed to refer to Articles,
Sections and Appendices of this Agreement.
(d) All references in this Agreement to Laboratory Data,
Encoded Laboratory Data and Data expressly exclude (i) Laboratory Data used by
SmithKline Xxxxxxx and/or its Affiliates pursuant to the Category Three Data
Access Agreement dated the date hereof, between SmithKline Xxxxxxx and Quest
Diagnostics and (ii) any other Laboratory Data not used by SmithKline Xxxxxxx
and/or its Affiliates pursuant to this Agreement.
SECTION 12.02. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State other than
Section 5-1401 of the New York General Obligations Law.
34
SECTION 12.03. CONFIDENTIALITY. (a) During the Term of this
Agreement and for five (5) years thereafter, SmithKline Xxxxxxx and Quest
Diagnostics shall not, and shall ensure that their respective Affiliates do not,
use or disclose to Third Parties any confidential information received from the
other (disclosing) party, except as otherwise expressly permitted by this
Agreement, without first obtaining the written consent of the disclosing party.
This confidentiality obligation shall not apply to such information which is or
becomes a matter of public knowledge through no fault of the receiving party or
its Affiliates, or is in the rightful possession of the receiving party as of or
following the Effective Date, or is disclosed to the receiving party by a Third
Party having the right to do so, or is subsequently and independently developed
by employees of the receiving party or Affiliates thereof who had no knowledge
of the confidential information disclosed, or is required by law to be disclosed
(PROVIDED that to the extent feasible, the disclosing party is provided
reasonable advance notice of such disclosure and provided with an effective
opportunity to appear, protest, and seek to limit such disclosure). The parties
shall take all reasonable measures to assure that no unauthorized use or
disclosure is made to Third Parties by Affiliates to whom access to such
information is granted.
(b) Nothing herein shall be construed as preventing SmithKline
Xxxxxxx from disclosing any information received from Quest Diagnostics
hereunder to an Affiliate; PROVIDED that such Affiliate has undertaken a similar
written obligation of confidentiality to SmithKline Xxxxxxx with respect to the
confidential information. Nothing herein shall be construed as preventing Quest
Diagnostics from disclosing any information received from SmithKline Xxxxxxx
hereunder to an Affiliate; PROVIDED that such Affiliate has undertaken a similar
written obligation of confidentiality to Quest Diagnostics with respect to the
confidential information.
(c) SmithKline Xxxxxxx covenants for itself and its Affiliates
that they shall not use Data or any subportions thereof in any manner that
discloses or utilizes Patient Identifiers, in any way that violates any
Applicable Laws governing confidentiality of patient identifiable healthcare
information.
(d) Each party shall keep confidential, and shall cause its
Affiliates, officers, directors and employees to keep confidential and shall use
commercially reasonable efforts to cause its advisors to keep confidential, (i)
the existence of any notice delivered by a party hereto to another party hereto
in accordance with this Agreement and (ii) the content of any such notice,
except as required by Applicable Law and except for information which is
available to the public, or thereafter becomes available to the public other
than as a result of a breach of this Section 12.03(d). In the event disclosure
is required under Applicable Law, each party shall, and shall cause its
applicable Affiliate, officer, director or employee to, provide the other party
with prompt prior written notice of such requirement so that such party may seek
a protective order or
35
other appropriate remedy, and otherwise cooperate in all commercially reasonable
respects in obtaining the same.
(e) Nothing in this Section 12.03 shall enlarge or diminish
any right or obligations undertaken by either party in any other provision of
this Agreement. To the extent that the general restrictions of this Section
12.03 conflict in any respect with any other specific provision of this
Agreement, that specific provision shall control.
SECTION 12.04. AMENDMENTS AND WAIVER OF PERFORMANCE. (a) No
amendment, modification or waiver in respect of this Agreement shall be
effective unless it (i) shall be in writing making specific reference to this
Agreement and setting forth the plan or intention to amend, modify or waive this
Agreement; and (ii) shall be signed by the parties hereto.
(b) The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect its rights
at a later time to enforce the same. No waiver by either party of any condition
or term in any one or more instances shall be construed as a further or
continuing waiver of such condition or term or of another condition or term.
SECTION 12.05. NO THIRD-PARTY BENEFICIARIES. This Agreement is
for the sole benefit of the parties hereto and their permitted assigns and
nothing herein expressed or implied shall give or be construed to give to any
Person, other than the parties hereto and such assigns, any legal or equitable
rights hereunder.
SECTION 12.06. NOTICES. All notices or other communications
required or permitted to be given hereunder, except as provided in Sections
6.02(b) and 7.02(b), shall be in writing and shall be delivered by hand or sent
by prepaid telex, cable or telecopy or sent, postage prepaid, by registered,
certified or express mail or reputable overnight courier service and shall be
deemed given when so delivered by hand, telexed, cabled or telecopied, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:
(a) if to Quest Diagnostics:
Quest Diagnostics Incorporated
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
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(b) if to SmithKline Xxxxxxx,
SmithKline Xxxxxxx plc
Xxx Xxx Xxxxxxxx Xxxxx
Xxxxxxxxx XX0 0XX
Xxxxxxxxx, Xxxxxxx
Attention: General Counsel
with copies to:
SmithKline Xxxxxxx Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: U.S. General Counsel
SECTION 12.07. TRADEMARKS AND TRADE NAMES. SmithKline Xxxxxxx
shall not be permitted to use the trademarks or trade names of Quest Diagnostics
in connection with the use of Data or the distribution, marketing or sale of
programs or services which use Data without prior written approval of Quest
Diagnostics for each such use; PROVIDED that SmithKline Xxxxxxx shall be
permitted to properly identify Quest Diagnostics as the source of Data provided
that such identification is merely of Quest Diagnostics as the source of such
Data and is made in accordance with Quest Diagnostics' then current policy for
identifying itself (as provided in writing to SmithKline Xxxxxxx).
SECTION 12.08. CHANGE IN APPLICABLE LAW. In the event of a
change in or addition to any Applicable Law which has, or could reasonably be
expected to have, a material effect upon the access to or use of Data as
provided in this Agreement, then either party may give the other party notice of
the need for the parties to bring this Agreement into compliance with such
revised Applicable Law. Unless waived by the receiving party, the notifying
party shall support its contention of the need to amend this Agreement due to
the contended change in Applicable Law with a written legal opinion to such
effect from outside counsel reasonably qualified to opine on the law of patient
confidentiality, disclosures and use of health care data and reasonably
acceptable to the receiving party. If the parties agree that the change in or
addition to Applicable Law has occurred and that the Agreement must be brought
into compliance with such change or addition, the parties shall then negotiate
reasonably and in good faith to amend this Agreement solely to the extent
necessary to bring the terms of this Agreement into such compliance while
preserving to the extent possible the original intent of, and all the rights and
relative benefits of each party under, this Agreement. If, within five business
days, the parties can not mutually agree on whether or not a modification to the
Agreement is required pursuant to this Section 12.08 or on the terms of such
modification to this Agreement as
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contemplated by the immediately preceding sentence, such matter shall be
resolved pursuant to Section 12.15.
SECTION 12.09. DISENROLLMENT. SmithKline Xxxxxxx agrees (a) to
promptly notify Quest Diagnostics of any complaints by a Person concerning such
Person's inclusion in any product or service provided by SmithKline Xxxxxxx or
SmithKline Xxxxxxx'x Affiliate pursuant to this Agreement and (b) to cooperate
with Quest Diagnostics in resolving such complaints in a commercially reasonable
manner, including without limitation promptly disenrolling any Person who so
requests. SmithKline Xxxxxxx shall promptly disenroll from inclusion in any
product or service provided by SmithKline Xxxxxxx or SmithKline Xxxxxxx'x
Affiliate pursuant to this Agreement any Person who so requests, provided that
SmithKline Xxxxxxx may continue to use Data related to such Person for Category
One A Uses.
SECTION 12.10. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other party. Copies of
executed counterparts transmitted by telecopy, telefax or other electronic
transmission service shall be considered original executed counterparts for
purposes of this Section 12.10; PROVIDED that receipt of copies of such
counterparts is confirmed.
SECTION 12.11. ENTIRE AGREEMENT. This Agreement contains the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter including, without limitation, the Purchase
Agreement and its Exhibits (including the "Summary of Terms - Data Access
Agreement"). Neither party shall be liable or bound to any other party in any
manner by any representations, warranties or covenants relating to such subject
matter except as specifically set forth herein.
SECTION 12.12. SEVERABILITY. If any provision of this
Agreement (or any portion thereof) or the application of any such provision (or
any portion thereof) to any Person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof (or the remaining portion thereof) or the application of such
provision to any other Persons or circumstances.
SECTION 12.13. FORCE MAJEURE. If the performance of any part
of this Agreement by either party, or of any obligation under this Agreement, is
prevented, restricted, interfered with or delayed by reason of any cause beyond
the reasonable control of the party obligated to perform (including any computer
system or connectivity failures), unless conclusive evidence to the contrary is
provided, the party so affected shall, upon giving written notice to the other
party, be excused from such performance to the extent of such prevention,
restriction,
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interference or delay, PROVIDED that the affected party shall use reasonable
commercial efforts to avoid or remove such causes of non-performance and shall
promptly continue performance at such time when such causes are removed. When
such circumstances arise, the parties shall negotiate in good faith what, if
any, modification of the terms of this Agreement may be required in order to
arrive at an equitable solution.
SECTION 12.14. RECORDING. Either party may, at any time,
record, register or otherwise notify this Agreement in appropriate governmental
or regulatory offices anywhere in the world, and the other party shall provide
reasonable assistance to such party at such party's expense in effecting such
recording, registering or notifying.
SECTION 12.15. DISPUTE RESOLUTION. (a) All controversies,
claims or disputes ("DISPUTES") that arise out of or relate to Articles VI, VII
and VIII, Sections 4.03, 5.04, 9.03, 9.05 and 12.08 and any other provision of
this Agreement which expressly provides that this Section 12.15 applies to such
provision shall be resolved in accordance with the provisions of Appendix D.
(b) Either party may elect to cause any Dispute that arises
out of or relates to Sections 4.03, 5.04, 9.03, 9.05, 12.08 or otherwise arises
out of or relates to a change in Applicable Law relating to patent
confidentiality or the suspension by Quest Diagnostics of the transmission of
Data to SmithKline Xxxxxxx to be resolved pursuant to Sections 3 and 6 of
Appendix D.
(c) The costs and expenses of an arbitration pursuant to
Section 6 of Appendix D of any Dispute that arises out of or relates to Section
7.05(c) or 8.01(b), and the related costs and expenses of each of the parties,
shall be borne by the "Losing" party unless the arbitrator or arbitrators
determine that another allocation of such costs and expenses is equitable.
SECTION 12.16. CONSENT TO JURISDICTION. Both SmithKline
Xxxxxxx and Quest Diagnostics irrevocably submit to the exclusive jurisdiction
of (a) a Federal court for the Southern District of New York and (b) any New
York state court located in the County of New York, for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Both SmithKline Xxxxxxx and Quest Diagnostics
agree to commence any action, suit or proceeding relating hereto either in a
Federal court for the Southern District of New York or in a New York state court
located in the County of New York. Both SmithKline Xxxxxxx and Quest Diagnostics
further agree that service of any process, summons, notice or document by U.S.
registered mail to each such party's respective address set forth above shall be
effective service of process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to jurisdiction in this Section
12.16. Both SmithKline Xxxxxxx and Quest Diagnostics irrevocably and
unconditionally waive any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or
39
the transactions contemplated hereby in (i) any Federal court for the Southern
District of New York or (ii) any New York state court located in the County of
New York, and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
SECTION 12.17. WAIVER OF JURY TRIAL. Subject to their
obligations under Section 12.15, each of SmithKline Xxxxxxx and Quest
Diagnostics hereby waives to the fullest extent permitted by Applicable Law any
right it may have to a trial by jury with respect to any litigation directly or
indirectly arising out of, under or in connection with this Agreement or any
transaction contemplated hereby. Both SmithKline Xxxxxxx and Quest Diagnostics
(a) certify that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce that foregoing waiver and (b) acknowledge
that each of them and the other parties hereto have been induced to enter into
this Agreement by, among other things, the mutual waivers and certifications in
this Section 12.17.
SECTION 12.18. EQUITABLE RELIEF. (a) Quest Diagnostics
acknowledges that access to Laboratory Data and Encoded Laboratory Data for
SmithKline Xxxxxxx is a unique resource for which breach by Quest Diagnostics
could cause SmithKline Xxxxxxx immediate and irreparable harm and may entitle
SmithKline Xxxxxxx to preliminary, and permanent injunctive relief and other
equitable relief to remedy such breach or the threat of such a breach without
the necessity of proving actual damages.
40
(b) SmithKline Xxxxxxx acknowledges SmithKline Xxxxxxx'x
breach of the terms of this Agreement and the unauthorized disclosure of Data as
to which it has access under this Agreement could cause Quest Diagnostics
immediate and irreparable harm and under such circumstances may entitle Quest
Diagnostics to preliminary, and permanent injunctive relief and other equitable
relief to remedy such breach or the threat of such a breach without the
necessity of proving actual damages.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first written above.
SMITHKLINE XXXXXXX PLC,
By /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Authorized Signatory
QUEST DIAGNOSTICS
INCORPORATED,
By /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
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