MARKETING AGREEMENT
MARKETING AGREEMENT (this "Agreement"), dated as of January 2,
1999, between SYNETIC HEALTHCARE COMMUNICATIONS, INC., a Delaware corporation
(the "Company"), and CERNER CORPORATION, a Delaware corporation ("Cerner").
WHEREAS, the Company and Cerner have entered into a
Subscription Agreement, dated as of January 2, 1999 (the "Subscription
Agreement"), pursuant to which Cerner agreed to subscribe for and purchase from
the Company, and the Company agreed to issue and sell to Cerner, 248,439 shares
of the Company's common stock, par value $.01 per share, in exchange for Cerner
agreeing to enter into various agreements, including this Agreement; and
WHEREAS, the execution and delivery of this Agreement by the
parties hereto is a condition to the consummation of the transactions
contemplated by the Subscription Agreement;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings:
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control
with, such specified Person.
"CareXchange" means the transaction environment, consisting of
the Company's host computer or computers and a network or networks set
up by the Company to enable physicians and their staff to perform
information activities and transactions by interfacing between their
computers, those of the Company, and those of healthcare payers,
laboratories and pharmacies.
"Distribution Partner" means a Person that provides software
to physicians and physician office desktops and has (i) the right to
integrate the Company's core software or
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services into its physician desktops, which provides or enables access
to the CareXchange and (ii) the ability to distribute such integrated
software to physicians, subject to restrictions and scope of use of
such licensed technology.
"HMO" means a Health Maintenance Organization.
"IDN" or "Integrated Delivery Network" means a legally
structured alliance among one or more hospitals, physicians and other
healthcare providers (laboratories, imaging centers, etc.) that can
provide substantially all health care services to a defined geographic
population of patients in a coordinated fashion.
"Inter-Exchange Partner" means a Person that provides networks
to Payers, physicians or suppliers of health care products or services
and has the right to connect to the Company's network for the purpose
of exchanging reciprocal services between its network and the Company's
network of associated Payers, physicians and suppliers.
"License Agreement" means the license agreement among the
Company and Cerner, dated as of the date hereof.
"Marketing Agent" means a Person that has the right to sell
services of the Company to certain Payers or suppliers of health care
products or services, at prices, terms and technical requirements
determined by the Company.
"Non-Competition Agreement" means the non-competition
agreement among the Company, Synetic and Cerner, dated as of the date
hereof.
"PBM" means a pharmacy benefits manager.
"Payer" means any HMO, PBM, indemnity or other health care
insurer, self-funded health plan (including employers), union
sponsored plan, workers compensation entity or other source responsible
for the payment of fees and expenses for health care services.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as
well as any syndicate or group that would be deemed to be a person
under Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
"RCO" means a remote computing operation.
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"Services" means the following "extra-enterprise"
medical/healthcare transaction and messaging services provided by the
Company:
(i) claims, claims status, remittance advice;
(ii) encounter submission;
(iii) eligibility, which may include benefit plan detail;
(iv) referrals and authorizations;
(v) pre-certifications and authorizations;
(vi) prescription services; and
(vii) laboratory services (specifically, orders and results
linked to Payer rules).
"Stockholders Agreement" means the stockholders agreement
among Avicenna Systems Corporation, Synetic, Inc., Cerner and the
Company, dated as of the date hereof.
ARTICLE II
MARKETING RESPONSIBILITIES
SECTION 2.01 Marketing Responsibilities of the Company. At all
times during the Term of this Agreement, the Company shall be responsible for
coordinating the following sales, marketing and contracting activities with
respect to the Services:
(a) direct sales of Services to physicians;
(b) contracting with Distribution Partners to distribute or
sell Services to physicians;
(c) sales of Services, and contracting for the provision of
Services, to non-IDN Payers that seek to apply payer rules to
extra-enterprise ordering (managed care, prescription services and
laboratory services);
(d) contracting with Inter-Exchange Partners to provide
Services and to connect the Company's service network to the service
networks of such Inter-Exchange Partners; and
(e) sales of Services, and contracting for the provision of
Services, to non-IDN suppliers that seek to perfect orders through
utilization of the Services.
SECTION 2.02 Marketing Responsibilities of Cerner. At all
times during the Term of this Agreement, Cerner undertakes as follows with
respect to sales, marketing and contracting activities in connection with the
provision of Services:
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(a) Cerner shall be a Distribution Partner for Services, by
integrating Services into Cerner IDN physician desktop and physician
office products. In addition, except as expressly permitted in the
Non-Competition Agreement, Cerner shall not, without the Company's
prior written consent, be a Distribution Partner for any services that
are in competition with the Services with respect to Cerner IDN
physician desktop and physician office products. This Section 2.02(a)
shall prevent Cerner from actively marketing and distributing services
that are in competition with the Services as part of its desktop
product offering, but shall not prevent IDNs from using Cerner software
to connect to the national networks of the Company's competitors;
(b) Cerner shall be a Distributor Partner for Services by
integrating Services into Cerner (non-IDN) physician desktop products.
In addition, except as expressly permitted in the Non-Competition
Agreement, Cerner shall not, without the Company's prior written
consent, be a Distribution Partner for any services that are in
competition with the Services with respect to Cerner (non-IDN)
physician desktop products. This Section 2.02(b) shall prevent Cerner
from actively marketing and distributing services that are in
competition with the services as part of its desktop product offering,
but shall not prevent non-IDN physicians from using Cerner software to
connect to the national networks of the Company's competitors;
(c) Cerner shall be a Marketing Agent for Services to IDN
Payer customers who seek to apply IDN Payer rules to extra enterprise
ordering, and shall be the exclusive Marketing Agent for Services to
Cerner IDN customers. In addition, except as expressly permitted in the
Non-Competition Agreement, Cerner shall not be a Marketing Agent for
any services that are in competition with the Services with respect to
IDN Payer customers who seek to apply IDN Payer rules to
extra-enterprise ordering;
(d) Cerner shall be an Inter-Exchange Partner for Services to
Cerner IDN Payer networks that seek to provide physician access to
extra enterprise ordering. In addition, except as expressly permitted
in the Non-Competition Agreement, Cerner shall not compete with the
Company in the provision of services identical or similar to the
Services to Cerner IDN Payer networks that seek to provide physician
access to extra enterprise services. This Section 2.02(d) shall not,
however, prevent Cerner IDN Payer networks from also being an
Inter-Exchange Partner with the Company's competitors;
(e) the terms of all sales of Services shall be subject to the
prior approval of the Company; and
(f) Cerner shall ensure that all new releases of Cerner
physician desktop software shall be enabled to connect to CareXchange
not later than December 31, 1999,
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provided, however, that the Company has provided the necessary
interface specifications at least six (6) months prior to the date of
such release.
SECTION 2.03 Marketing to Non-IDN Payers. At all times during
the Term of this Agreement, the Company shall coordinate all sales of Services
to non-IDN payers and suppliers, and Cerner shall not, without the Company's
prior written consent, be a Marketing Agent for Services to non-IDN Payer
customers. Notwithstanding the foregoing, Cerner may seek to initiate marketing
activities to a Payer only in accordance with the following procedures:
(a) Cerner will identify to the Company in writing such Payer
to which it wishes to market Services;
(b) the Company will notify Cerner within ten business days of
the receipt of such notice whether it wishes to market Services
directly to such Payer or whether it wishes to appoint Cerner to act as
its Marketing Agent with respect to such Payer;
(c) if the Company appoints Cerner as its exclusive Marketing
Agent with respect to such Payer, Cerner shall act in that capacity for
up to nine months from such appointment, such appointment to continue
thereafter only if Cerner contracts with such Payer for Services within
the nine month period from the appointment; and
(d) if the Company does not appoint Cerner as its exclusive
Marketing Agent with respect to such Payer, the Company shall act in
that capacity for up to nine months, at the end of which time, if the
Company has failed to contract with such Payer for Services, Cerner
shall become the exclusive Marketing Agent to such Payer with respect
to Services for a period of nine months from such appointment, such
appointment to continue thereafter only if Cerner contracts with such
Payer for Services within the nine month period from the appointment.
SECTION 2.04 Favorable Pricing. The terms and pricing of the
Services shall be determined by the Company which agrees that the terms and
prices it offers to Cerner for the sale of Services shall be no less favorable
than the terms and prices offered to other marketing agents for services
comparable to the Services.
SECTION 2.05 Marketing of Cerner Products by the Company. (a)
During the Term of this Agreement, the Company shall market to physicians any
Cerner products not in competition with or duplicative of any features of the
Company's products and services, provided that Cerner and the Company can arrive
at mutually acceptable terms.
(b) The Company may license from other third parties, or
independently create, features and or functions, that were not included as part
of the License Agreement, and such
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features and/or functions may be delivered on an RCO or locally installed
basis; provided, that such features or functions do not violate the terms of the
Non-Competition Agreement.
(c) The Company shall provide Cerner, on a mutually acceptable
basis, with a list of physicians using the Services.
(d) The Company shall not enter into exclusive marketing
arrangements with providers of products or services competitive with the Cerner
products and services listed on Schedule A hereto.
SECTION 2.06 Data Rights. (a) Cerner Data Rights. Cerner
agrees that it will make the Company a party to any exclusive rights to Payer
data ("Data Rights"), provided that Cerner or the Company receives the Payer's
approval that the Company can be a party to Cerner's exclusive Data Rights.
(b) Company Data Rights. Company agrees that it will make
Cerner a party to any exclusive Data Rights, provided that Cerner or the Company
receives the Payer's approval that Cerner can be a party to the Company's
exclusive Data Rights.
ARTICLE III
COMPENSATION
SECTION 3.01 Compensation Levels. Cerner and the Company agree
that they will negotiate in good faith in the future to agree to compensation
levels for the marketing services provided by each party under this Agreement,
at least sixty (60) days prior to the commencement of such marketing services.
ARTICLE IV
TERM AND TERMINATION
SECTION 4.01 Term. Unless terminated earlier pursuant to
Section 4.02, this Agreement shall terminate five years from the date hereof
(the "Term").
SECTION 4.02 Termination. Notwithstanding Section 4.01, this
Agreement may be terminated:
(a) by the Company, at any time, not less than 60 days after
delivery of notice to Cerner, in the event that Cerner shall have
defaulted on or breached any material term
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of this Agreement and shall not have cured such breach within 30 days
after receiving such notice from the Company specifying the nature of
such default or breach; or
(b) by Cerner, at any time, not less than 60 days after
delivery of notice to the Company in the event that the Company shall
have defaulted on or breached any material term of this Agreement and
shall not have cured such breach within 30 days after receiving notice
from Cerner specifying the nature of such default or breach; or
(c) by any party, immediately upon delivery of notice to the
relevant party, in the event that such other party (i) requires a
composition or other similar arrangement with creditors, files for
bankruptcy or is declared bankrupt or (ii) shall have assigned or
transferred to any third party any of its rights or obligations
hereunder except in accordance with Section 4.01; or
(d) by either party upon termination of the Non-Competition
Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 Indemnification. (a) Each party (the
"Indemnifying Party") will indemnify each other party, its officers, employees,
and agents (collectively "Indemnified Parties") against, and hold each
Indemnified Party harmless from, all claims, suits, judgments, losses, damages,
fines or costs (including reasonable legal fees and expenses) ("Losses")
resulting from any claim, suit, or demand by any third party ("Third Party
Claim") for injuries to or deaths of persons or loss of or damage to property
arising out of:
(i) the Indemnifying Party's products or services as marketed
by the Indemnified Parties, unless the Indemnified Parties shall have
acted outside the scope of their rights under this Agreement; and
(ii) the Indemnifying Party's performance or willful
misconduct of the Indemnifying Party, its employees, officers, or
agents in connection with the Indemnifying Party's performance of this
Agreement, except to the extent caused by the negligence of any
Indemnified Party.
(b) The Indemnifying Party's obligations under this Section
5.01 will survive the termination of this Agreement.
(c) Each Indemnified Party shall give an Indemnifying Party
prompt written notice of any Third Party Claim of which such Indemnified Party
has knowledge concerning any
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Losses as to which such Indemnified Party may request indemnification hereunder.
If the Indemnifying Party acknowledges in writing its obligation to indemnify
the Indemnified Party hereunder against any Losses 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 if it gives notice of its intention to do so to the Indemnified
Party within five (5) days of the receipt of such notice from the Indemnified
Party; provided, however, that if there exists or is reasonably likely to exist
a conflict of interest that would make it inappropriate in the judgment of the
Indemnified Party, in its sole and absolute discretion, for the same counsel to
represent both the Indemnified Party and the Indemnifying Party, then the
Indemnified Party shall be entitled to retain its own counsel, at the expense of
the Indemnifying Party. In the event the 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 make available to the Indemnifying Party, at the Indemnifying
Party's expense, all witnesses, pertinent records, materials and information in
the Indemnified Party's possession or under the Indemnified Party's control
relating thereto as is reasonably required by the Indemnifying Party. Similarly,
in the event the Indemnified Party is, directly or indirectly, conducting the
defense against any such Third Party Claim, the Indemnifying Party shall
cooperate with the Indemnified Party in such defense and make available to the
Indemnified Party, at the Indemnified Party's expense, all such witnesses,
records, materials and information in the Indemnifying Party's possession or
under the Indemnifying Party's control relating thereto as is reasonably
required by the Indemnified Party. No such Third Party Claim may be settled by
the Indemnifying Party without the prior written consent of the Indemnified
Party.
(d) In no event shall the Indemnifying Party be liable to an
Indemnified Party for any indirect, incidental, special, punitive, exemplary or
consequential damages arising out of or otherwise relating to this Agreement,
even if the Indemnifying Party has been advised or the possibility or likelihood
of such damages.
SECTION 5.02 Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred.
SECTION 5.03 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by telecopy or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 5.03):
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(a) if to the Company:
c/o Synetic, Inc.
000 Xxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: General Counsel
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxxx O'M Xxxxxx, Esq.
(b) if to Cerner:
Cerner Corporation
0000 Xxxxxxxxx Xxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: President
with a copy to:
Cerner Corporation
0000 Xxxxxxxxx Xxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: General Counsel
SECTION 5.04 Public Announcements. Except as required by law,
governmental regulation or by the requirements of any securities exchange on
which the securities of a party hereto are listed, no party to this Agreement
shall make, or cause to be made, any press release or public announcement in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without the prior written consent of the other
party, and the parties shall cooperate as to the timing and contents of any such
press release or public announcement.
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SECTION 5.05 Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 5.06 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any law,
governmental regulation or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.
SECTION 5.07 Entire Agreement. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and undertakings, both written and oral,
with respect to the subject matter hereof.
SECTION 5.08 Assignment. This Agreement shall not be assigned
without the express written consent of the parties (which consent may be granted
or withheld in the sole discretion of any party), except that any party hereto
may assign its rights hereunder to an Affiliate of such party; provided,
however, that any such assignment shall not relieve the assigning party of its
obligations hereunder; provided, further, however, that either party may,
without the written consent of the other party, assign and delegate this
Agreement and its rights and obligations hereunder in connection with a merger,
consolidation or sale of all or substantially all of its assets (which sale
shall include the assignment and assumption of all rights and obligations under
the Ancillary Agreements (as defined in the Stockholders Agreement) and the
Stockholders Agreement).
SECTION 5.09 No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and successors and nothing herein, express or implied,
is intended to or shall confer upon any other person or entity, any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION 5.10 Amendment. This Agreement may not be amended or
modified except by an instrument in writing signed by, or on behalf of, each of
the parties.
SECTION 5.11 Governing Law. This Agreement shall be governed
by the laws of the State of New York.
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SECTION 5.12 Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 5.13 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.
SECTION 5.14 Waiver of Jury Trial. Each of the parties hereto
irrevocably and unconditionally waives trial by jury in any legal action or
proceeding relating to this Agreement, the Ancillary Agreements or the
transactions contemplated hereby and thereby and for any counterclaim therein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized signatories
thereunto duly authorized as of the day and year first above written.
SYNETIC HEALTHCARE COMMUNICATIONS, INC.
By
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Name:
Title:
CERNER CORPORATION
By
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Name:
Title:
