As filed with the Securities and Exchange Commission on April 23, 1999
Registration No. 333-75071
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
Amendment No. 1
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
CareInsite, Inc.
(Exact name of registrant as specified in its charter)
Delaware 7374 22-3630930
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation Industrial Classification Identification Number)
or organization) Code Number)
--------------------
CareInsite, Inc.
669 River Drive, River Drive Center II
Elmwood Park, New Jersey 07407
(201) 703-3400
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive
offices)
--------------------
David C. Amburgey
CareInsite, Inc.
Vice President -- General Counsel
669 River Drive, River Drive Center II
Elmwood Park, New Jersey 07407
(201) 703-3400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Copies to:
Stephen T. Giove Alan J. Jakimo
Shearman & Sterling Brown & Wood LLP
599 Lexington Avenue One World Trade Center
New York, New York 10022 New York, New York 10048
(212) 848-4000 (212) 839-5300
--------------------
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. |_|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier registration statement for the
same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier registration statement for the
same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, please check the following box. |_|
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
EXPLANATORY NOTE
This Amendment No. 1 is being filed solely for the purpose of amending
Item 16 of Part II of the Registration Statement (Registration No. 333-75071)
and the filing of certain exhibits. This Amendment No. 1 does not contain a copy
of the Prospectus included in the Registration Statement, which is unchanged
from the initial filing of the Registration Statement on March 26, 1999.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
SEC registration fee...................................... $ 17,236
NASD filing fee........................................... 6,700
Nasdaq listing fee........................................ *
Blue Sky fees and expenses................................ *
Printing and engraving expenses........................... *
Attorneys' fees and expenses.............................. *
Accountants' fees and expenses............................ *
Transfer agent's and registrar's fees and expenses........ *
Miscellaneous............................................. *
--------
Total............................................ *
========
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* To be supplied by amendment
The amounts set forth above are estimates except for the SEC
registration fee and the NASD filing fee.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides, in
summary, that directors and officers of Delaware corporations are entitled,
under certain circumstances, to be indemnified against all expenses and
liabilities (including attorney's fees) incurred by them as a result of suits
brought against them in their capacity as a director or officer, if they acted
in good faith and in a manner they reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any criminal action
or proceeding, if they had no reasonable cause to believe their conduct was
unlawful; provided that no indemnification may be made against expenses in
respect of any claim, issue or matter as to which they shall have been adjudged
to be liable to the Company, unless and only to the extent that the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, they are fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper. Any such indemnification may be made by the
Company only as authorized in each specific case upon a determination by the
shareholders or disinterested directors that indemnification is proper because
the indemnities have met the applicable standard of conduct.
Article Six of the registrant's Certificate of Incorporation provides
that no director of the registrant shall be personally liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability: (i) for any breach of the director's duty of
loyalty to the Company or its stockholders; (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law; (iii) in respect of certain unlawful dividend payments or stock redemptions
or purchases; or (iv) for any transaction from which the director derived an
improper personal benefit.
The Company's Certificate of Incorporation and By-Laws provide for
indemnification of its directors and officers to the fullest extent permitted by
Delaware law, as the same may be amended from time to time.
In addition, the Company maintains liability insurance for its
directors and officers.
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The following information reflects sales by the registrant of
unregistered securities within the past three years. The issuance by the
registrant of the securities sold in the transactions referenced below were not
registered under the Securities Act of 1933, as amended pursuant to Section 4(2)
thereof, as such transactions did not involve a public offering.
In January 1999, the registrant issued to The Health Information
Network Connection LLC (i) a warrant (the "THINC Warrant") exercisable for
1,298,917 shares of the registrant's common stock (subject to adjustment),
representing approximately 6% of the registrant's common stock outstanding after
giving effect to the exercise of the THINC Warrant and (ii) $1.5 million in
cash, in exchange for a 20% ownership interest in THINC.
In January 1999, the registrant issued to Cerner Corporation (i)
3,980,000 shares of its common stock, representing 19.9% of its common stock
outstanding after such issuance, and (ii) a warrant exercisable for a number of
shares of common stock of the registrant equal to 19.9% of the shares issuable
upon exercise of the THINC Warrant, each in consideration for Cerner Corporation
entering into non-competition, marketing, license and master servicing and
outsourcing agreements with the registrant.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
Exhibit
Number Description of Exhibit
------ ----------------------
1.1 Form of Underwriting Agreement.*
3.1 Amended and Restated Certificate of Incorporation of
the Registrant.*
3.2 By-laws of the Registrant.*
4.1 Specimen Certificate representing Common Stock.*
5.1 Opinion of Shearman & Sterling as to the legality of
the Common Stock.*
10.1 Agreement and Plan of Merger among Synetic, Inc.,
Synternet Acquisition Corp., a subsidiary of Synetic,
Inc., Avicenna Systems Corp., and the individuals and
entities listed on the signature pages thereof, dated
as of December 23, 1996.*
10.2 Agreement and Plan of Merger among Synetic, Inc.,
Synternet Acquisition Corp., CareAgents Inc. and the
individuals listed on the signature pages thereof,
dated as of January 23, 1997.*
10.3 Subscription Agreement dated as of January 2, 1999
between Synetic Healthcare Communications, Inc.
("SHC"), Synetic, Inc., Avicenna Systems Corporation
and Cerner Corporation.*
10.4 License Agreement dated as of January 2, 1999 between
SHC and Cerner Corporation.*
10.5 Stockholders' Agreement, dated as of January 2, 1999,
among SHC, Synetic, Inc., Avicenna Systems
Corporation and Cerner Corporation.*
10.6 Non-Competition Agreement, dated as of January 2,
1999, among SHC, Synetic, Inc., Avicenna Systems
Corporation and Cerner Corporation.*
10.7 Marketing Agreement, dated as of January 2, 1999,
between SHC and Cerner Corporation.*
10.8 Clinical Transaction Agreement, dated as of January
1, 1999, between SHC and Empire Blue Cross and Blue
Shield, Empire Healthchoice, Inc., Empire
Healthchoice Assurance Inc. and Empire Health Plans
Assurance, Inc.+
10.9 Clinical Transaction Agreement, dated as of January
1, 1999, between SHC and Group Health Incorporated.+
10.10 Clinical Transaction Agreement, dated as of January
1, 1999, between SHC and Health Insurance Plans of
Greater New York.+
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<PAGE>
10.11 Management Services Agreement, effective as of
January 1, 1999, between SHC and The Health
Information Network Connection LLC ("THINC").*
10.12 Warrant dated as of January 1, 1999 (entitling THINC
to purchase from SHC 81,081 shares of common stock).*
10.13 Amended and Restated Operating Agreement, dated as of
January 1, 1999, among The Health Information Network
Connection LLC, Empire Blue Cross and Blue Shield,
GNYHA Management Corporation, Group Health
Incorporated, Health Insurance Plan of Greater New
York and SHC.*
10.14 Form of Tax-Sharing Agreement between the Registrant
and Synetic, Inc.*
10.15 Form of Services Agreement between the Registrant and
Synetic, Inc.*
10.16 CareInsite, Inc. Stock Option Plan.*
23.1 Consent of Arthur Andersen LLP.**
23.2 Consent of Shearman & Sterling (included in its
opinion in Exhibit 5.1).
23.3 Consent of Kegler, Brown, Hill & Ritter Co., L.P.A.**
24.1 Powers of Attorney (included on the signature page of
this Registration Statement).**
27.1 Financial Data Schedule for fiscal year ended June
30, 1998 (for SEC use only).**
27.2 Financial Data Schedule for six months ended December
31, 1998 (for SEC use only).**
- -------------------
* To be filed by amendment.
** Previously filed.
+ Exhibits for which Registrant is seeking confidential treatment for
certain portions. Confidential material has been redacted and has been
separately filed with the Securities and Exchange Commission.
(b) Financial Statement Schedules.
The schedules have been omitted because of the absence of circumstances
under which they would be required.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
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<PAGE>
The undersigned registrant hereby undertakes to provide to the
Underwriters at the closing specified in the U.S. Underwriting Agreement and the
International Underwriting Agreement certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has duly caused this Amendment to the Registration
Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Borough of Elmwood Park in the State of New Jersey on
April 23, 1999.
CAREINSITE, INC.
By: /s/ Paul C. Suthern
-------------------------------
Name: Paul C. Suthern
Title: President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed by the following persons
in the capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Paul C. Suthern Director and Principal April 23, 1999
- ------------------------------ Executive Officer
Paul C. Suthern
/s/ Paul M. Bernard Principal Financial and April 23, 1999
- ------------------------------ Accounting Officer
Paul M. Bernard
* Director April 23, 1999
- ------------------------------
Roger C. Holstein
* Director April 23, 1999
- ------------------------------
James R. Love
* Director April 23, 1999
- ------------------------------
David M. Margulies
* Director April 23, 1999
- ------------------------------
Charles A. Mele
* Director April 23, 1999
- ------------------------------
Martin J. Wygod
*/s/David C. Amburgey April 23, 1999
- ------------------------------
As Attorney-in-fact
II-5
EXECUTION COPY
CLINICAL TRANSACTION AGREEMENT
Between
SYNETIC HEALTHCARE COMMUNICATIONS, INC.
and
EMPIRE BLUE CROSS AND BLUE SHIELD, EMPIRE
HEALTHCHOICE, INC., EMPIRE HEALTHCHOICE ASSURANCE,
INC. AND EMPIRE HEALTH PLANS ASSURANCE, INC.
Pages where confidential treatment has been requested are stamped "Confidential
Treatment Requested and the Redacted Material has been separately filed with
the Commission", and the confidential section has been marked in the margin
with a star (*).
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS............................................................... 1
2. SYNETIC RESPONSIBILITIES.................................................. 3
3. PAYER RESPONSIBILITIES.................................................... 4
4. DEPLOYMENT AND IMPLEMENTATION............................................. 5
5. INTELLECTUAL PROPERTY AND LICENSES........................................ 6
6. PERFORMANCE............................................................... 7
7. FEES AND CHARGES.......................................................... 7
8. LIMITATION OF LIABILITY AND REMEDIES...................................... 8
9. INDEMNITIES............................................................... 8
10. TERM OF AGREEMENT........................................................ 9
11. TERMINATION OF AGREEMENT................................................. 10
12. DISPUTE RESOLUTION AND ARBITRATION....................................... 10
13. SECURITY, CONFIDENTIALITY AND DATA....................................... 11
14. GENERAL.................................................................. 12
SCHEDULE A - Fees............................................................A-1
SCHEDULE B - Prescription Communication Services.............................B-1
SCHEDULE C - Laboratory Communication Services...............................C-1
SCHEDULE D - Payer-Supplied Information......................................D-1
SCHEDULE E - Financial Warranty..............................................E-1
SCHEDULE F - Synetic Insurance...............................................F-1
SCHEDULE G - Performance Standards...........................................G-1
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CLINICAL TRANSACTION AGREEMENT
This Agreement is entered into as of this 1st day of January, 1999, by and among
Empire Blue Cross and Blue Shield, Empire HealthChoice, Inc., Empire
HealthChoice Assurance, Inc. and Empire Health Plans Assurance, Inc., each a
corporation with offices at One World Trade Center, New York, New York
10048-0682 (collectively, "Payer"), and Synetic Healthcare Communications, Inc.,
a Delaware corporation having its principal place of business at River Drive
Center 2, 669 River Drive, Elmwood Park, New Jersey 07407-1361 ("Synetic").
WHEREAS, Synetic desires to provide to Payer, on an exclusive basis,
certain on-line prescription and laboratory transaction, messaging and
content/reference services described in this Agreement as Clinical Transaction
Services;
WHEREAS, Payer desires that Synetic provides such services, all on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises made, the
terms and conditions hereunder described and other valuable consideration, the
parties agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings indicated
unless the context clearly requires otherwise:
1.1 Agreement. "Agreement" shall refer to the terms and conditions set
forth herein and in the Schedules attached hereto, which are hereby made an
integral part of this Agreement and shall be read as if included within the text
of this Agreement.
1.2 Clinical Transaction Services. "Clinical Transaction Services" shall
mean the Prescription Communication Services and the Laboratory Communication
Services.
1.3 Confidential Information. "Confidential Information" shall have the
meaning set forth in Section 13.2.
1.4 Cure Period. "Cure Period" shall have the meaning set forth in Section
11.1.
1.5 Current Payer-Member. "Current Payer-Member" shall mean each of Payer,
and Group Health Incorporated and Health Insurance Plan of Greater New York.
1.6 Damages. "Damages" shall have the meaning set forth in Section 9.1.
1.7 Debtor Relief Law. "Debtor Relief Law" shall have the meaning set forth
in Section 11.2.1
1.8 Effective Date. "Effective Date" shall mean the date in this Agreement
first written above.
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1.9 End-User. "End-User" shall mean a physician or other healthcare
provider or staff thereof, who is an authorized and registered user of any of
the Clinical Transaction Services.
1.10 Healthcare-Payer. "Healthcare-Payer" shall mean an insurer or other
payer of health-related claims.
1.11 Indemnified Party. "Indemnified Party" shall have the meaning set
forth in Section 9.3.1.
1.12 Indemnifying Party. "Indemnifying Party" shall have the meaning set
forth in Section 9.3.1.
1.13 IT. "IT" shall have the meaning set forth in Section 2.4.
1.14 Laboratory Communication Services. "Laboratory Communication Services"
shall mean on-line transaction, messaging and content services which connect
physician offices with Payer and with clinical laboratories (via the Synetic
System) in order to enable physicians to write, modify and order laboratory
tests, view laboratory test results, and review information relating to or
prompted by the selection of a laboratory test, as such services are more fully
described in Schedule C.
1.15 Lab Project Plan. "Lab Project Plan" shall have the meaning set forth
in Section 4.2.
1.16 Member. "Member" shall mean any member, including without limitation
any Payer-Member, of THINC.
1.17 Payer Data. "Payer Data" shall have the meaning set forth in Section
13.3.
1.18 Payer Marks. "Payer Marks" shall have the meaning set forth in Section
5.4.
1.19 Payer-Member. "Payer-Member" shall mean a Healthcare-Payer who is or
becomes a Member, including without limitation the Current Payer-Members.
1.20 Payer Proprietary Materials. "Payer Proprietary Materials" shall have
the meaning set forth in Section 5.1.
1.21 Payer Relationship Manager. "Payer Relationship Manager" shall have
the meaning set forth in Section 3.12.
1.22 Payer-Supplied Information. "Payer-Supplied Information" shall mean
such information described in Schedule D.
1.23 Payer System. "Payer System" shall mean the facilities, computer
hardware and software and the communications network, which Payer shall employ
to utilize the Clinical Transaction Services.
1.24 PBM. "PBM" shall mean pharmaceutical benefit manager.
1.25 Performance Standards. "Performance Standards" shall mean the
procedures and standards set forth in Schedule G attached hereto for the
Clinical Transaction Services and the Synetic System.
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1.26 Person. "Person" shall mean a natural person, corporation, limited
liability company, association, joint stock company, limited partnership,
general partnership, proprietorship, trust, self-regulatory organization or
other entity, enterprise authority or business organization.
1.27 Prescription Communication Services. "Prescription Communication
Services" shall mean on-line transaction, messaging and content services which
connect physician offices with Payer and with pharmacies (via the Synetic
System) in order to enable physicians to write, modify, order and renew
prescriptions and review information relating to or prompted by the selection or
use of a prescription drug, as such services are more fully described in
Schedule B.
1.28 Prescription Project Plan. "Prescription Project Plan" shall have the
meaning set forth in Section 4.2.
1.29 Project Plan. "Project Plan" shall have the meaning set forth in
Section 4.2.
1.30 Synetic Marks. "Synetic Marks" shall have the meaning set forth in
Section 5.3.
1.31 Synetic Proprietary Materials. "Synetic Proprietary Materials" shall
mean all software, information, data and materials provided by Synetic
hereunder, including but not limited to the Clinical Transaction Services, the
Synetic System, the Synetic Marks, all software and documentation associated
with any of the foregoing, all copyrights, trademarks, patents, trade secrets
and other intellectual property rights inherent therein or appurtenant thereto
and any modifications, enhancements, updates and upgrades thereto, all as owned
or licensed by Synetic as of the Effective Date or thereafter created, designed,
developed or licensed by Synetic, its employees or agents.
1.32 Synetic Relationship Manager. "Synetic Relationship Manager" shall
have the meaning set forth in Section 2.6.
1.33 Synetic System. "Synetic System" shall mean the facilities, computer
hardware and software and the communications network and related services, which
Synetic shall use to provide the Clinical Transaction Services.
1.34 Term. "Term" shall have the meaning set forth in Section 10.1.
1.35 THINC. "THINC" shall mean The Health Information Network Connection
LLC, a New York limited liability company.
2. SYNETIC RESPONSIBILITIES
2.1 Provision of Clinical Transaction Services. Synetic shall provide to
Payer the Clinical Transaction Services, in accordance with the terms and
conditions set forth in this Agreement, for the fees set forth in Section 7.
2.2 Connections. Synetic will provide the high speed telecommunications
connections and supporting equipment required to maintain connectivity between
the Synetic System and the Payer System for the Clinical Transaction Services.
Synetic and Payer will share equally the costs of such connections and
supporting equipment.
2.3 End-User Support. Synetic shall provide training, implementation and
support services to enable End-Users to use the Clinical Transaction Services.
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2.4 Synetic Implementation and Support. Synetic will provide appropriate
information technology ("IT") management assistance for project planning and
execution. Synetic will institute an appropriate internal chain of command for
escalating IT issues regarding development or implementation priorities. Synetic
will provide appropriate response to technical inquiries or service issues from
Payer's designated technical personnel.
2.5 Laws and Regulations. Synetic will meet all applicable legal and
regulatory requirements with regard to the transmission of confidential patient
data and electronic prescriptions. Synetic shall comply in all material respects
with applicable laws and regulations relating to performance of its obligations
hereunder.
2.6 Synetic Relationship Manager. Synetic will appoint a relationship
manager (the "Synetic Relationship Manager") to manage the relationship
established by this Agreement who will (a) coordinate and monitor Synetic's
obligations under this Agreement, and (b) serve as the primary liaison with the
Payer Relationship Manager.
3. PAYER RESPONSIBILITIES
3.1 Exclusive Grant. Payer agrees that Synetic shall have the sole and
exclusive right to implement, deliver, support, provide, maintain or make
available to or on behalf of Payer any or all of the Clinical Transaction
Services. Without limitation of the foregoing, Payer shall not, directly or
indirectly, endorse, advertise, promote, implement, access, use, deliver,
support or license or contract for any service or software that implements,
supports, provides or mediates any aspect of the Clinical Transaction Services,
either synchronously or asynchronously. Payer acknowledges that Synetic will
provide Clinical Transaction Services to other Healthcare-Payers, and that the
Synetic System and the Clinical Transaction Services will be open to all
Healthcare-Payers and healthcare providers.
3.2 Connections and Interfaces. Payer shall establish all interfaces to the
Synetic System from the Payer System and modify the Payer System to provide
additional capabilities as are reasonably necessary for the proper use of the
Clinical Transaction Services. Payer shall establish such interfaces as soon as
practicable pursuant to, and, in any case, not later than the dates specified
in, the Project Plan.
3.3 Payer-Supplied Information. Payer agrees to provide to Synetic, either
directly or through a surrogate (e.g., PBM) designated by Payer, the
Payer-Supplied Information and other content, in a form, manner and frequency to
be mutually agreed upon and set forth in the Project Plan, as is reasonably
necessary for Synetic to provide to Payer the Clinical Transaction Services.
3.4 Support of Synetic's Marketing Efforts. Payer agrees to actively
endorse and support Synetic's efforts to market the Clinical Transaction
Services. Payer shall identify Synetic as Payer's exclusive provider of the
Clinical Transaction Services. Payer will provide Synetic access to and liaison
with Payer's product marketing department/division and other Payer marketing
resources so as to cooperate with the marketing and sales activities of Synetic.
3.5 Payer-Physician Communications. Payer will communicate to its
participating, and prospective participating, physicians regarding the
advantages of utilizing the Clinical Transaction Services by integrating such
announcements into all appropriate Payer-to-physician communications.
3.6 Marketing of Clinical Transaction Services. Payer shall use its best
efforts to develop prescription and lab management programs aimed at maximizing
adoption of the Clinical Transaction
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<PAGE>
Services. Payer agrees to use best efforts to promote and market the Clinical
Transaction Services to its customers.
3.7 Physician Data. As soon as practicable, and in any case not later than
thirty (30) days after the Effective Date, Payer will provide Synetic with a
list of, and detailed data regarding, target "high prescribing" and "high lab
test ordering" physicians, to support targeted sales efforts, such data to be in
a form, manner and frequency to be agreed upon. Payer will also provide Synetic
with updates to such data from time to time.
3.8 Payer Implementation and Support. Payer will provide Synetic with
access to and support from Payer technical resources in connection with the
operation of and connectivity between the Synetic System and the Payer System,
and for testing, certifying, implementing and updating Payer System interfaces
and software related to the Clinical Transaction Services. Without limitation of
the foregoing, Payer will ensure commitment of appropriate Payer's internal IT
resources and personnel to the implementation of the Project Plan. Payer will
provide Synetic with appropriate IT management assistance for project planning
and execution. Payer will institute an appropriate internal chain of command for
escalating IT issues regarding development or implementation of the Clinical
Transaction Services. Payer will provide appropriate response to technical
inquiries or customer service issues from the Synetic Help Desk or Synetic
technical support personnel.
3.9 Payer System. Payer shall be responsible for acquiring, operating and
maintaining the Payer System, as may be reasonably necessary for the proper use
of the Clinical Transaction Services.
3.10 Performance Problems. Payer shall promptly report to Synetic any
performance problems relating to the Clinical Transaction Services.
3.11 Laws and Regulations. Payer shall comply in all material respects with
all applicable laws and regulations relating to performance of its obligations
hereunder.
3.12 Payer Relationship Manager. Payer will appoint a relationship manager
to manage the relationship established by this Agreement (the "Payer
Relationship Manager") who will (a) coordinate and monitor Payer's obligations
under this Agreement, and (b) serve as the primary liaison with the Synetic
Relationship Manager.
3.13 Plan Members. Payer represents to Synetic that, as of November 30,
1998, Payer provides medical health insurance benefits to at least 1,640,000
plan members.
4. DEPLOYMENT AND IMPLEMENTATION
4.1 Deployment and Implementation Activities. Each of the parties shall
perform its respective duties and obligations regarding deployment and
implementation of the Clinical Transaction Services according to the plans and
within the timeframes set forth in each Project Plan established pursuant to
Section 4.2. The parties acknowledge that it may be necessary to conduct market
tests of the Clinical Transaction Services prior to pilot or full-scale
deployment. In addition, the parties acknowledge that the timely deployment and
implementation of the Clinical Transaction Services will require the full
cooperation of the parties and that the ability of each party to perform its
duties and obligations with respect to the Clinical Transaction Services may be
dependent on the other party's performance of its duties and obligations.
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4.2 Project Plans. Payer and Synetic will develop, within one hundred
twenty (120) days from the Effective Date, or such longer period as is necessary
for the completion of such plan, a detailed project plan, which will contain the
development and technical implementation schedule, pilot timeframe, and
production availability/timeframe of the deployment of the Prescription
Communication Services (the "Prescription Project Plan"). Following completion
of the Prescription Project Plan, Payer and Synetic will develop, within one
hundred eighty (180) days from such completion of the Prescription Project Plan,
or such longer period as is necessary for the completion of such plan, a
detailed project plan, which will contain the development and technical
implementation schedule, pilot timeframe, and production availability/timeframe
of the deployment of the Laboratory Communication Services (the "Lab Project
Plan", and, together with the Prescription Project Plan, the "Project Plan").
The completed Prescription Project Plan and Lab Project Plan shall be attached
to, and shall become a part of, this Agreement. Any changes to a Project Plan
must be mutually agreed to in writing by the parties. Each party acknowledges
and agrees that such changes may require changes in performance deadlines for
Synetic and/or Payer, and that the failure by one party to meet the requirements
set forth in either Project Plan may require changes in the performance
deadlines for the other party.
5. INTELLECTUAL PROPERTY AND LICENSES
5.1 Payer System. Subject to the terms of this Agreement, Payer hereby
grants to Synetic the right to access and use the Payer System and any other
Payer-owned or licensed systems and technology, software, proprietary elements,
documentation, records and trade secrets or know-how (including, without
limitation, the Payer Data and the Payer-Supplied Information) (collectively the
"Payer Proprietary Materials") for the sole purpose of enabling Synetic to
perform its responsibilities hereunder, including but not limited to providing
the Clinical Transaction Services. Payer shall obtain, and Synetic will
cooperate with Payer in obtaining, any necessary consents, licenses and
approvals from Payer's licensors or other providers with respect to Synetic's
use of the Payer Proprietary Materials as contemplated hereunder.
5.2 Synetic System. Synetic hereby grants to Payer the right to use and
access the Synetic System and the Clinical Transaction Services for the sole
purpose of enabling Payer to perform its responsibilities hereunder. Synetic
shall obtain, and Payer will cooperate with Synetic in obtaining, any necessary
consents, licenses and approvals of Synetic's licensors or other providers with
respect to Payer's use of the Synetic System and the Clinical Transaction
Services.
5.3 Synetic Marks. Synetic hereby grants to Payer the right to use the
Synetic trademarks, corporate and trade names and logos, and other appropriate
branding (collectively, the "Synetic Marks") in connection with and for the
marketing and promotion of the Clinical Transaction Services. Synetic will have
the right to approve the use of the Synetic Marks in any written communication
materials prior to publication.
5.4 Payer Marks. Payer hereby grants to Synetic the right to use Payer's
trademarks, corporate and trade names and logos, and other appropriate branding
(collectively, the "Payer Marks") in connection with and for the marketing and
promotion of the Clinical Transaction Services, including without limitation, in
sales/marketing collateral, on computer screens, and via other communications
media, such as monthly Synetic-hosted physician seminars. Payer will have the
right to approve the use of the Payer Marks in any written communication
materials prior to publication.
5.5 Limitations. Neither party shall have the right to sublicense, assign
or otherwise transfer the rights granted to it by the other under this Section
5, except as provided in Section 14.10.
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5.6 Rights of Synetic. Payer acknowledges and agrees that, as between Payer
and Synetic, all right, title and interest in and to the Synetic Proprietary
Materials shall remain the sole and exclusive property of Synetic. All rights to
patents, copyrights, trademarks, service marks, trade secrets, know-how and
methodologies relating to the Synetic Proprietary Materials and Synetic's
performance of the Clinical Transaction Services under this Agreement belong
exclusively to, and shall at all times remain with, Synetic. All rights therein
not explicitly licensed to Payer herein, whether now existing or which may
hereafter come into existence, including without limitation rights in all media
and formats addressed herein and in media and formats other than those addressed
herein, are reserved exclusively to Synetic.
5.7 Rights of Payer. Synetic acknowledges and agrees that, as between Payer
and Synetic, all right, title and interest in and to the Payer Proprietary
Materials and the Payer Marks, shall remain the sole and exclusive property of
Payer.
6. PERFORMANCE
6.1 Manner of Performance. Synetic undertakes to perform the Clinical
Transaction Services in a professional and businesslike manner. In addition,
Synetic warrants that such Clinical Transaction Services will be performed, and
the Synetic System will be managed, in accordance with the Performance Standards
set forth in Schedule G.
6.2 NO WARRANTIES. EXCEPT AS SO PROVIDED IN SECTION 6.1, NEITHER SYNETIC
NOR ANY OF ITS AFFILIATES, EMPLOYEES, OFFICERS, DIRECTORS, AGENTS OR LICENSORS
MAKES, AND PAYER RECEIVES, NO WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR
ALLEGEDLY EXTENDED IN ANY COMMUNICATION WITH PAYER, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR A PARTICULAR PURPOSE OR
WARRANTY THAT THE CLINICAL TRANSACTION SERVICES PROVIDED TO PAYER UNDER THIS
AGREEMENT SHALL BE UNINTERRUPTED OR ERROR-FREE.
7. FEES AND CHARGES
7.1 Clinical Transaction Services Fees. Payer agrees to pay to Synetic the
Clinical Transaction Services fees and other fees set forth in Schedule A.
7.2 Financial Warranty. Synetic will provide to Payer the financial
warranty regarding the Prescription Communication Services as set forth in
Schedule E. Payer agrees to provide Synetic with such information as is
reasonably sufficient to enable Synetic to verify Payer's actual savings
pursuant to Schedule E.
7.3 Costs of Performance. Unless otherwise specified herein, Synetic and
Payer will each bear its respective costs of performance under this Agreement.
7.4 Timeliness of Payment. Payer shall pay all fees to Synetic as described
in this Section 7 and Schedule A within thirty (30) days after receipt of an
invoice therefor, except for fees disputed in good faith. If such payment has
not been made within sixty (60) days after Payer's receipt of an invoice
therefor, Payer shall also pay to Synetic interest at a rate of one percent (1%)
of the invoice amount for each thirty (30) day period, or portion thereof, for
which timely payment has not been made.
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7.5 Beta Tests. Synetic agrees that Payer will not be charged Clinical
Transaction Services fees in connection with any beta tests conducted by
Synetic.
7.6 Taxes. Payer will pay to Synetic amounts equal to any taxes, however
designated or levied, based upon any charges under this Agreement, or upon this
Agreement or the services or materials provided hereunder, or Payer's use
thereof, including state and local sales, use, privilege or excise taxes based
on gross revenue, and any taxes or amounts in lieu thereof paid or payable by
Synetic in respect of the foregoing, but excluding any franchise taxes, taxes
based on the adjusted gross income of Synetic, and employee withholding, FICA,
and other taxes relating to Synetic personnel performing services hereunder.
8. LIMITATION OF LIABILITY AND REMEDIES
8.1 DISCLAIMER OF DAMAGES. EXCEPT TO THE EXTENT PROVIDED IN SECTION 9,
NEITHER SYNETIC NOR PAYER WILL BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES ARISING UNDER THIS AGREEMENT,
INCLUDING BUT NOT LIMITED TO LOSS OF DATA, INTEREST, ANTICIPATED SAVINGS,
REVENUES OR PROFITS, OR INTERRUPTION OF BUSINESS, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES. THE LIMITATIONS OF
LIABILITY IN THIS SECTION SHALL APPLY REGARDLESS OF THE FORM OF ACTION, WHETHER
IN CONTRACT, TORT (INCLUDING NEGLIGENCE OF ANY KIND, WHETHER ACTIVE OR PASSIVE),
WARRANTY, STRICT LIABILITY OR ANY OTHER LEGAL OR EQUITABLE GROUNDS. EXCEPT TO
THE EXTENT PROVIDED IN SECTION 9, ALL REMEDIES AVAILABLE TO SYNETIC AND PAYER
SHALL BE LIMITED TO (I) INJUNCTIVE RELIEF (WHERE APPROPRIATE), (II) SUCH PARTY'S
ACTUAL DIRECT MONEY DAMAGES IN AN AGGREGATE AMOUNT FOR THE TERM NOT TO EXCEED
FEES PAYABLE BY PAYER TO SYNETIC DURING THE TWELVE (12) MONTHS IMMEDIATELY PRIOR
TO THE CLAIM TO WHICH SUCH DAMAGES RELATE, AND (III) ANY UNPAID OR UNREIMBURSED
FEES AND COSTS.
8.2 ESSENTIAL ELEMENTS. THE PARTIES ACKNOWLEDGE THAT THE FOREGOING
DISCLAIMER AND LIMITATIONS OF LIABILITY ARE ESSENTIAL ELEMENTS OF THIS
AGREEMENT.
9. INDEMNITIES
9.1 Performance Indemnity. Each party hereby agrees to indemnify, defend
and hold harmless the other party, such other party's parent, subsidiaries, and
affiliates and their respective officers, directors, employees and agents, from
and against any and all third-party claims, actions, suits, demands,
proceedings, obligations and liabilities, damages, losses, judgments and
expenses (including costs of collection, attorneys' fees and other costs of
defense) (collectively "Damages") arising out of or resulting from the first
party's performance or non-performance of its obligations hereunder.
9.2 Exception. The indemnities set forth in Section 9.1 will not apply to
the extent that the party claiming indemnification was responsible for giving
rise to the matter upon which the claim for indemnification is based.
9.3 Indemnification Procedures.
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9.3.1 A party seeking indemnification under this Agreement (an
"Indemnified Party") for a claim by a third party shall promptly notify the
other party (the "Indemnifying Party") in writing of the commencement, or
threatened commencement, of any civil, criminal, administrative or
investigative action or proceeding involving a claim for indemnification
under this Agreement. The Indemnifying Party shall have sole control over
the defense and settlement of such claim, provided that, within thirty (30)
days after receipt of the above-described notice, the Indemnifying Party
notifies the Indemnified Party of its election to so assume full control.
The foregoing notwithstanding, the Indemnified Party shall be entitled to
participate in the defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim. The Indemnifying Party
shall obtain the prior written approval of the Indemnified Party, which
shall not be unreasonably withheld, before entering into any settlement of
such claim or ceasing to defend against such claim if such settlement or
cessation would cause injunctive or other equitable relief to be imposed
against the Indemnified Party. A condition to any settlement by the
Indemnifying Party of a claim shall be that the Indemnified Party is fully
released from any liability related to the claim. After notice by the
Indemnifying Party to the Indemnified Party of its election to assume full
control of the defense of any such action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal expenses incurred by the
Indemnified Party in connection with the defense of that claim. If the
Indemnifying Party does not assume sole control over the defense of such
claim, the Indemnifying Party may participate in such defense and the
Indemnified Party shall have the right to defend the claim in such manner
as it may deem appropriate, at the cost and expense of the Indemnifying
Party. An Indemnifying Party shall not be required to indemnify an
Indemnified Party for any amount paid or payable by such Indemnified Party
in the settlement of any such claim which was agreed to without the written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld.
9.3.2 If a claim for indemnification hereunder involves a third-party
claim, the Indemnifying Party may, at its sole cost, expense and ultimate
liability regardless of the outcome, and through counsel of its choice,
litigate, defend, settle or otherwise attempt to resolve such claim, except
that the Indemnified Party may elect, at any time and at its sole cost,
expense and ultimate liability, regardless of the outcome, and through
counsel of its choice, to so resolve such claim, thereby waiving any right
to indemnification under this Agreement. In any event, each party shall
fully cooperate with the other and their respective counsel in connection
with any such resolution, and notwithstanding which party is defending any
such third-party claim, the other party shall have the right to select
co-counsel at its sole cost and expense and to consult with counsel for the
Indemnifying Party.
10. TERM OF AGREEMENT
10.1 Initial Term. This Agreement shall commence on the Effective Date and
extend for five (5) years after the date that the Clinical Transaction Services
are launched for Payer, which launch date will be set forth in the Project Plan
(the "Term").
10.2 Extension. Synetic shall notify Payer within six (6) months prior to
the expiration of the Term, whether Synetic desires to renew this Agreement and
of the proposed terms to govern such renewal. Not less than three (3) months
prior to such expiration, Payer shall notify Synetic whether it desires to renew
this Agreement on the terms proposed by Synetic or on other terms as may be
proposed by Payer.
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11. TERMINATION OF AGREEMENT
11.1 Termination for Cause. If either party materially breaches any of its
duties or obligations hereunder, and such breach is not cured within sixty (60)
days after written notice of the breach ("Cure Period"), then the non-breaching
party may terminate this Agreement, provided that such non-breaching party
provided written notice of the breach within sixty (60) days following the date
that it first became aware of such breach. This termination right must be
exercised during the thirty (30)-day period beginning at the end of the Cure
Period.
11.2 Termination for Insolvency. If either Synetic or Payer becomes or is
declared insolvent or bankrupt, then this Agreement shall be immediately
terminated, without the requirement of any notice to the insolvent or bankrupt
party. A party shall be deemed insolvent or bankrupt for purposes of this
Section if:
11.2.1 a receiver, liquidator or trustee of a party is appointed by
court order and such order remains in effect for more than sixty (60) days,
or a case is commenced or a petition is filed against a party, and is not
dismissed or stayed within sixty (60) days, under any applicable
liquidation, conservatorship, bankruptcy, moratorium, insolvency,
reorganization or similar laws for the relief of debtors from time to time
in effect and generally affecting the rights of creditors (a "Debtor Relief
Law"); or
11.2.2 a party commences a voluntary case or voluntarily seeks,
consents to, or acquiesces in the benefit or benefits of any provision of
any Debtor Relief Law; consents to the filing of any petition against it
under such Debtor Relief Law; makes an assignment for the benefit of its
creditors; admits in writing its inability to pay its debts generally as
they become due; or consents to the appointment of a receiver, trustee,
liquidator or conservator for it or any part of its property.
11.3 Cooperation Upon Termination. Without limiting the foregoing, upon
termination of this Agreement for any reason, each party shall assist the other
party in the orderly termination of this Agreement and the transfer of all
aspects hereof, tangible and intangible, as may be necessary for the orderly,
non-disrupted business continuation of each party.
12. DISPUTE RESOLUTION AND ARBITRATION
12.1 Dispute Resolution. Payer and Synetic will agree to use their best
efforts to resolve disputes informally and amicably. If, after negotiating for
thirty (30) days or for some longer period if the parties agree, no resolution
of a dispute is reached, Payer and Synetic will submit the dispute to binding
arbitration in New York, New York pursuant to the Commercial Arbitration Rules
of the American Arbitration Association ("AAA") and the procedures set forth in
Section 12.2.
12.2 Arbitration. All disputes that cannot be resolved pursuant to the
internal dispute resolution process identified above will be submitted to and
settled by final and binding arbitration. Any dispute which cannot be resolved
as set forth above, will be resolved by final and binding arbitration in New
York, New York by a panel of three (3) arbitrators in accordance with and
subject to the Commercial Arbitration Rules of the AAA then in effect. Following
notice of a party's election to require arbitration, each party will within
thirty (30) days select one arbitrator, and those two arbitrators will within
thirty (30) days thereafter select a third arbitrator. If the two arbitrators
are unable to agree on a third arbitrator within thirty (30) days, the AAA will
within thirty (30) days thereafter select such third arbitrator. Judgment upon
the award rendered in any such arbitration may be entered in any court
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of competent jurisdiction, or application may be made to such court for a
judicial acceptance of the award and an enforcement, as the law of such
jurisdiction may require or allow. Notwithstanding the foregoing, either party
may seek injunctive relief in a court of competent jurisdiction, where
appropriate, to protect its rights pending the outcome of such arbitration.
13. SECURITY, CONFIDENTIALITY AND DATA
13.1 Security. Synetic agrees that Synetic shall provide, as part of the
Synetic System, all reasonable security measures. Synetic will establish a
security and confidentiality program and policies to protect against
unauthorized access to the Synetic System and the Payer Proprietary Materials,
which program and policies will be reviewed by an independent third party that
is a recognized expert in the area of systems security. Moreover, Synetic shall
employ reasonable system security measures to ensure that only authorized
personnel and End-Users have access to the Synetic System.
13.2 Confidentiality. "Confidential Information" shall mean information
such as proprietary lists, business plans, operation plans, plan information,
the Synetic Proprietary Materials, the Payer Proprietary Materials, and all
other materials relating to the business of Payer, Synetic, and Synetic's and
Payer's respective parent, subsidiaries, affiliates (including financial
information relating thereto). Each party hereby agrees that it and its
respective officers, employees, agents, contractors, assignees, and successors
shall (i) keep all Confidential Information received from the other party
strictly confidential, (ii) instruct its officers, employees, agents,
contractors, and permitted assignees and successors to use the same degree of
care and discretion with respect to the Confidential Information of the other
party, or of any third party utilized hereunder, that Synetic and Payer each
require with respect to their own most confidential information, (iii) use such
information solely for the purposes and in the manner set forth in this
Agreement, (iv) not disclose any such information to any other person,
corporation, governmental agency or other entity without the express written
permission of the other and (v) institute the necessary security policies and
procedures to meet its obligations hereunder. Notwithstanding the foregoing, the
confidentiality obligations set forth in this Section 13 will not apply to any
information which the recipient party can establish to have (x) become publicly
available without breach of this Agreement, (y) been independently developed by
the recipient party outside the scope of this Agreement and without reference to
the Confidential Information received under this Agreement, or (z) been
rightfully obtained by the recipient party from third parties which are not
obligated to protect its confidentiality.
13.3 Payer Data. Synetic acknowledges that Payer-originated data (whether
or not such data is identifiable to Payer) ("Payer Data"), as between Synetic
and Payer, shall be owned by Payer and shall be used by Synetic only with
Payer's written consent.
13.4 Patient Information. Without limitation of the foregoing, Synetic
agrees to treat as confidential all patient-identifiable information in
accordance with applicable state and federal laws and regulations, and with all
applicable policies of Payer that are provided to Synetic in writing. Synetic
agrees that patient-identifiable clinical information collected or transmitted
through the Synetic System (including patient drug histories and lab results)
will be delivered by Synetic to a non-originating physician only when such
physician certifies that he or she has received prior written consent from the
patient, except to the extent that (i) such delivery is otherwise permitted
under applicable state and federal laws or is consistent with Payer's
then-current practices for the delivery of such information to non-originating
physicians or (ii) Payer has certified that it has obtained the requisite
written consent from the patient.
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13.5 Physician Agreements. Synetic agrees that contracts for network
connection between Synetic and physicians will include a provision which (a)
permits a physician to use Payer Data transmitted from the Synetic System only
for the medical treatment of patients and the processing of clinical, financial
and administrative transactions on behalf of patients and (b) limits access to
such Payer Data to physicians and their partners, affiliates, employees, agents
or contractors who have a need to access such Payer Data in connection with the
performance of their professional responsibilities.
14. GENERAL
14.1 Authority. Each party represents and warrants to the other party that
(i) it has the power and authority to enter into and perform its obligations
under this Agreement, and (ii) neither the execution of this Agreement nor the
performance of its obligations hereunder will breach or result in any default
under its articles, by-laws, or other organization documents, or under any
agreement or other legally binding instrument, license or permit to which it is
a party or by which it may be bound.
14.2 Independent Contractor. Synetic, in performing its obligations under
this Agreement, is acting only as an independent contractor of Payer and the
rights and responsibilities of the parties shall be determined accordingly.
14.3 Meetings. Synetic and Payer will meet regularly to discuss performance
results relating to the Clinical Transaction Services and to address concerns
and plan future activities of Payer and Payer's customers.
14.4 Approvals and Similar Actions. Each party will cooperate with the
other by, among other things, making available, as reasonably requested by the
other, management decisions, information, approvals and acceptances in order
that each party may properly accomplish its obligations and responsibilities
hereunder.
14.5 Force Majeure. Each of Payer and Synetic will be excused from
performance of its obligations under this Agreement for any period and to the
extent that performance is prevented as a result of delays caused by fire,
flood, interruptions of power, changes in laws or regulations, and other events
beyond its reasonable control.
14.6 Modification. No amendment, change, waiver or discharge hereof shall
be valid unless in writing and signed by an authorized representative of the
party against which such amendment, change, waiver or discharge is sought to be
enforced.
14.7 Binding Nature. This Agreement is binding on the parties hereto and
their respective successors and assigns.
14.8 Notices. Whenever one party is required or permitted to give notice to
the other, such notice shall be deemed given: when delivered by hand, one (1)
day after being given to an express courier with a reliable system for tracking
delivery; when telecopied or faxed and receipt confirmed; or three (3) days
after the day of mailing, when mailed through United States mail, registered or
certified mail, return receipt requested, postage prepaid, and addressed as
follows:
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If to Synetic, to:
Synetic Healthcare Communications, Inc.
c/o Synetic, Inc.
River Drive Center 2
669 River Drive
Elmwood Park, New Jersey 07407-1361
Fax No. 201-703-3401
Attention: Chief Financial Officer
with a copy to:
Synetic, Inc.
River Drive Center 2
669 River Drive
Elmwood Park, New Jersey 07407-1361
Fax No. 201-703-3401
Attention: General Counsel
If to Payer, to:
Empire Blue Cross and Blue Shield
One World Trade Center, 20th Floor
New York, NY 10048-0682
Fax No. 212-476-6453
Attention: Ms. Connie Poirier
with a copy to:
Empire Blue Cross and Blue Shield
One World Trade Center, 28th Floor
New York, NY 10048-0682
Fax No. 212-986-8187
Attention: General Counsel
Either party may from time to time change its address for notification purposes
by giving the other thirty (30) days prior written notice of the new address and
the date upon which it shall become effective.
14.9 Insurance. Synetic will maintain general liability insurance and such
other insurance, as set forth on Schedule F.
14.10 Assignment. Neither Synetic nor Payer may assign this Agreement or
any of the rights or obligations thereunder without the consent of the other
(which consent shall not be unreasonably withheld) provided that (i) each party
may assign this Agreement and such rights and obligations to a purchaser or
transferee of all or substantially all of its assets and business, and (ii)
Synetic may assign this Agreement and such rights and obligations to any parent
or majority owned subsidiary of Synetic.
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14.11 Entire Agreement. This Agreement, including any Schedules referred to
herein and attached hereto, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and there are no
representations, understandings or agreements relative hereto which are not
fully expressed herein.
14.12 General. Notwithstanding any provisions of this Agreement to the
contrary, any provision of this Agreement that by its terms, nature or operation
of law should survive the termination or expiration of this Agreement will
survive. The waiver or failure of either party to exercise any right in any
instance shall not be deemed a waiver of any other or further right hereunder.
If for any reason a court of competent jurisdiction finds any provision of this
Agreement, or portion thereof to be unenforceable, that provision shall be
enforced to the maximum extent permissible so as to effect the intent of the
parties, and the remainder of this Agreement shall continue in full force and
effect. The section headings used herein are for reference and convenience only
and shall not enter into the interpretation thereof.
14.13 Publicity. Each of Synetic and Payer and their respective affiliates
(existing today and in the future) shall hold the terms of this Agreement in
strict confidence and not make any public statements with respect thereto,
except as may be required under applicable laws and regulations (including,
without limitation, insurance regulations and securities laws) or with the
consent of Synetic, in the case of disclosure by Payer, or with the consent of
Payer, in the case of disclosure by Synetic, in each case which consent will not
be unreasonably withheld. Notwithstanding the foregoing, Synetic and Payer will
issue a press release announcing the execution of this Agreement. In addition,
each of Synetic and Payer shall be permitted to respond generally to inquiries
regarding its business, provided that it shall not disclose specific terms of
the Agreement (except as may be required under applicable laws and regulations).
14.14 Nonassumption of Liabilities. Unless specifically provided by this
Agreement, Synetic does not assume or become liable for any of the existing or
future obligations, liabilities or debts of Payer, and Payer does not assume or
become liable for any of the existing or future obligations, liabilities or
debts of Synetic.
14.15 Governing Law. This Agreement shall be construed and enforced
according to the laws of the State of New York without reference to principles
of conflicts of laws.
14.16 Third Party Beneficiaries. Nothing in this Agreement shall confer any
benefits or rights on any Person other than the parties to this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
EMPIRE BLUE CROSS AND BLUE SHIELD
By:
--------------------------------------------------
Name:
Title:
EMPIRE HEALTHCHOICE, INC.
By:
--------------------------------------------------
Name:
Title:
EMPIRE HEALTHCHOICE ASSURANCE, INC.
By:
--------------------------------------------------
Name:
Title:
EMPIRE HEALTH PLANS ASSURANCE, INC.
By:
--------------------------------------------------
Name:
Title:
SYNETIC HEALTHCARE COMMUNICATIONS, INC.
By:
--------------------------------------------------
Name:
Title:
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SCHEDULE A
Fees
*
Confidential Treatment Requested and the Redacted Material has been separately
filed with the Commission. Three pages have been omitted from Schedule A
pursuant to the confidential treatment request.
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SCHEDULE B
Prescription Communication Services
"Prescription Communication Services" shall mean on-line transaction, messaging
and content services which connect physician offices with Payer and with
pharmacies (via the Synetic System) in order to enable physicians to write,
modify, order and renew prescriptions and review information relating to or
prompted by the selection or use of a prescription drug. Such services include
but are not limited to the following: (1) enabling physicians to conduct online
registration and identification of patients consistent with plan eligibility,
(2) enabling physicians to access medication histories, (3) enabling physicians
to write a prescription, (4) enabling physicians to review the prescription drug
relative to Payer's administrative, financial or clinical rules, (5) providing
online messages, alerts, advisories and other notifications to and from
physicians, particularly when medication treatment is at variance to Payer's
rules, (6) enabling physicians to select and route prescriptions to a pharmacy
(where permitted by laws and regulations), and (7) enabling physicians to
authorize a new or renewal prescription or modify an existing prescription.
The following is a description of the various functions of such services:
1. Registration and identification: Host Payer eligibility files and present
such files to End-Users in order to enable End-Users to register patients and
conduct services specific to the patient and Payer-specific rules.
2. Patient medication histories: Host patient medication histories and present
such histories to End-Users in order to enable End-Users to conduct services
specific to the patient and Payer-specific rules.
3. Clinical, financial and administrative rules: Host and display Payer-specific
formularies, drug utilization review, treatment guidelines and other rules
and present End-Users with alerts and/or advisories relevant to such rules.
Payer must approve all alerts and advisories with respect to both the
criteria that trigger them and their content.
4. Consent: Require End-Users to obtain the appropriate level of patient consent
when using the Synetic System to request any confidential patient
information; capture and store all representations by End-Users.
5. Pharmacy directory: Host and present End-Users with a list of Payer-specific
pharmacies for the purpose of automating the transmission of either messages
and/or prescriptions to pharmacies, where permitted by law.
6. Messages: Present End-Users with Payer and patient-specific messages posted
to a Message Center, which include but are not limited to patient-specific
alerts and advisories (e.g., renewals, interchanges) and broadcast messages
(e.g., common message intended for many End-Users).
7. Content: Host Payer-specific formularies, treatment guidelines, pharmacy
directories and other related information and provide End-Users the ability
to search, browse and store such information.
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SCHEDULE C
Laboratory Communication Services
"Laboratory Communication Services" shall mean on-line transaction, messaging
and content services which connect physician offices with Payer and with
clinical laboratories (via the Synetic System) in order to enable physicians to
write, modify and order laboratory tests, view laboratory test results, and
review information relating to or prompted by the selection of a laboratory
test. Such services include but are not limited to the following: (1) enabling
physicians to conduct registration and identification of patients consistent
with plan eligibility, (2) enabling physicians to access lab results histories,
(3) enabling physicians to write a lab order, (4) enabling physicians to review
the lab order relative to Payer's administrative, financial or clinical rules,
(5) providing messages, alerts, advisories and other notifications to and from
physicians, particularly when lab treatment is at variance to Payer's rules, (6)
enabling physicians to authorize and route lab orders to a clinical laboratory
(where permitted by laws and regulations), (7) enabling laboratories to route
lab results to physicians, and (8) interpreting lab results.
The following is a description of the various functions of such services:
1. Registration and identification: Host Payer eligibility files and present
such files to End-Users in order to enable End-Users to register patients and
conduct services specific to the patient and Payer-specific rules.
2. Patient-laboratory histories: Host patient laboratory histories, where
available, and present such histories to End-Users.
3. Clinical, financial and administrative rules: Host and present Payer-specific
treatment guidelines, order sets and other rules and present End-Users with
alerts and/or advisories relevant to such rules. Payer must approve all
alerts and advisories with respect to both the criteria that trigger them and
their content.
4. Consent: Require End-Users to obtain the appropriate level of patient consent
when using the Synetic System to request any confidential patient
information; capture and store all representations by End-Users.
5. Laboratory directory: Host and present End-Users with a list of
Payer-specific laboratories for the purpose of automating the transmission of
either messages and/or lab orders to laboratories, where permitted by law.
6. Messages: Present End-Users with Payer and patient-specific messages posted
to a Message Center, which include but are not limited to both
patient-specific alerts and advisories and broadcast messages (e.g., common
message intended for many End-Users).
7. Content: Host Payer-specific treatment guidelines, laboratory directories and
other related information and provide End-Users the ability to search, browse
and store such information.
C-1
<PAGE>
SCHEDULE D
Payer-Supplied Information
PRESCRIPTION COMMUNICATION SERVICES INFORMATION:
1. Eligibility files: files which enable End-Users to identify and register
patients, and conduct services specific to the patient and Payer-specific
rules (to be provided no less than monthly). Where the PCP/patient
relationship is relevant, rosters of patients assigned to each primary care
provider.
2. Patient dispensed-medication history files: at Payer's option, patient
dispensed-medication histories for presentation to End-Users (to be provided
no less than monthly), which may be built for Payer by Synetic from Payer's
billing or claims data. Payer assumes responsibility for the quality and
accuracy of such histories.
3. Clinical, financial and administrative rules: formularies, treatment
guidelines, drug utilization review, as well as relevant plan designs and
other related information, to enable End-Users to conduct transactions
consistent with Payer-specific rules.
4. Pharmacy directory: lists of available pharmacies by plan so that
prescriptions and/or messages can be routed to the patient's Payer-specific
pharmacy of choice, where permitted by law.
5. Messages: messages for transmission to End-Users, which include but are not
limited to patient-specific alerts and advisories (e.g., retrospective drug
utilization review, renewals, interchanges) and broadcast messages (e.g.,
common messages intended for many End-Users).
6. Content: Payer-specific content which provides End-Users the ability to
conduct transactions specific to Payer-specific rules and search, browse and
store such information. Initial content from Payer will include Payer
formularies, treatment guidelines, pharmacy directories and other related
information.
7. Test files: representative sample data sets for eligibility, group/plan
identification, provider directories, medication and lab histories, messages
and content.
8. Patient Plan files: files necessary to ensure patients can be associated with
the appropriate plan rules.
9. Interface, message and connectivity specifications: specifications required
to establish communications to Payer System or its designated surrogate for
the purpose of patient identification and receipt of patient histories and
messages.
LABORATORY COMMUNICATION SERVICES INFORMATION:
1. Eligibility files: files which enable End-Users to identify and register
patients, and conduct services specific to the patient and Payer-specific
rules (to be provided no less than monthly). Where the PCP/patient
relationship is relevant, rosters of patients assigned to each primary care
provider.
2. Patient-laboratory histories: at Payer's option, patient laboratory histories
for presentation to End-Users, where available. Payer assumes responsibility
for the quality and accuracy of such histories.
D-1
<PAGE>
SCHEDULE D
(continued)
Payer-Supplied Information
3. Clinical, financial and administrative rules: order sets, treatment
guidelines, reflexive testing algorithms, as well as relevant plan designs
and other related information, to enable End-Users to conduct transactions
consistent with Payer-specific rules.
4. Laboratory directory: lists of available laboratories by plan so that orders
and/or messages can be routed to the patient's Payer-specific laboratory of
choice, where permitted by law.
5. Messages: messages for transmission to End-Users, which include but are not
limited to patient-specific alerts and advisories (e.g., retrospective lab
utilization review) and broadcast messages (e.g., common messages intended
for many End-Users.
6. Content: Payer-specific content which provides End-Users the ability to
conduct transactions specific to Payer-specific rules and search, browse and
store such information. Initial content from Payer will include Payer order
sets, treatment guidelines, laboratory directories and other related
information.
7. Test files: representative sample data sets for eligibility, group/plan
identification, provider directories, medication and lab histories, messages
and content.
8. Patient Plan files: files necessary to ensure patients can be associated with
the appropriate plan rules.
9. Interface, message and connectivity specifications: specifications required
to establish communications to Payer System or its designated surrogate for
the purpose of patient identification and receipt of patient histories and
messages.
D-2
<PAGE>
SCHEDULE E
Financial Warranty
*
Confidential Treatment Requested and the Redacted Material has been separately
filed with the Commission.
E-1
<PAGE>
SCHEDULE F
Synetic Insurance
Coverage Limits Insurance Company
Umbrella Policy $15,000,000 Crum & Forster
Professional Liability $5,000,000 Evanston Insurance Group
(e.g., "errors and omissions")
General Liability Crum & Forster
-- General aggregate $2,000,000
-- Personal $1,000,000
-- Each occurrence $1,000,000
-- Fire damage $50,000
-- Medical expense $5,000
-- Auto liability $1,000,000
-- Employee benefit $1,000,000
Commercial Crime $3,000,000 Gulf Insurance Co.
(employee theft, etc.)
Property $5,000,000 Crum & Forster
(location of Synetic's
Clinical Transaction system)
Workers' Compensation Statutory Crum & Forster
Employers Liability $1,000,000 per Crum & Forster
accident/disease
F-1
<PAGE>
SCHEDULE G
Performance Standards
SYNETIC PERFORMANCE STANDARDS
GENERAL ASSUMPTIONS
1. The success/failure of each service level objective set forth below will
be determined on the basis of a quarterly average. Service level
objectives will be measured and reported on a monthly basis.
2. There will be a ninety (90) day grace period on reliability measurements
when scheduled major upgrades to either the THINC Network or the Synetic
System occur.
SERVICE CHANGE PROCEDURE
1. The Synetic Relationship Manager and the Payer Relationship Manager will
be responsible for addressing any changes to this schedule.
2. Modifications to any performance standards or to this document, and all
requests as set forth in the previous paragraph will require the review
and approval of both parties.
CONNECTIVITY
Synetic will support connectivity to End-Users via:
1. Dial-up via 28.8, 33.6 or 56 kbps modem
2. Dial-up via ISDN; or
3. Dedicated line (56 kbps up to T-1).
Clinical Transactions will be available to End-User desktop workstations that
are:
1. Intel based: Windows 95, Windows NT 4.0, Windows 98
2. Synetic's standard browser: Microsoft Internet Explorer 4.0+, which
may utilize one or more plug-ins or applets provided by Synetic
SYNETIC SYSTEM AND THINC NETWORK AVAILABILITY
Synetic will provide End-Users access to Clinical Transaction Services, which
Clinical Transactions Services will be available seven days a week, twenty-four
hours a day, 365 days a year excluding regularly scheduled down-time for
maintenance. The Synetic System (accessed through the THINC Network) will have
an effective rate of 99.5% availability. Measurement will be based on data from
the availability logs of the THINC Network and the Synetic System. Scheduled
outages are not included when calculating the service level objective. The
foregoing availability measurement is exclusive of availability of all
interfaces and connections from the Payer System to the THINC Network, as well
as the availability of the Payer System or the system of any affiliated
organization (e.g., PBMs).
G-1
<PAGE>
SCHEDULE G
(continued)
Performance Standards
If, for any reason, the Clinical Transaction Services are unavailable other than
by reason of a scheduled downtime, if such unavailability is due to an outage in
the Synetic System of the THINC Network, Synetic will (or will cause THINC to):
1. Make its reasonable commercial efforts to restore all services
with minimum outage,
2. Escalate resources to aid in resolution, if the outage persists
for longer than one (1) hour, and
3. Provide information messages to End-Users including the time that
availability is expected again.
Access to the Internet and World Wide Web
Synetic will provide an Internet service connection and IP addresses for
End-Users that is available on a 24 hours a day, 7 days a week, 365 days a year
basis. Such Internet accessibility (accessed by an End-User through the Synetic
System and the THINC Network) will have an effective rate of 99.5% availability.
Synetic shall monitor traffic and performance, and take appropriate preemptive
action (such as adding bandwidth, upgrading, or redesigning the access points)
to insure satisfactory performance and reliability.
NETWORK DOWNTIME
Required downtimes for both THINC Network and Synetic System backup will be
scheduled by Synetic at times as have been demonstrated (through past usage
records) to (i) interfere minimally with Payer's use of or access to the
Clinical Transaction Services and (ii) proceed without significant degradation
during such downtimes of performance of THINC Network and Synetic System
pursuant to these standards, though such downtimes shall not affect performance
criteria. Except in the event of unforeseen or emergency repair circumstances,
notice of the schedule of downtimes for the THINC Network and the Synetic System
will be provided to Payer in writing at least seven (7) days prior to such
downtime.
HELP DESK AVAILABILITY STANDARDS
1. Synetic shall staff a central point of telephone support to provide
End-Users, THINC's help desk, or others as appropriate with assistance
throughout the Term (the "Synetic Help Desk").
2. End-User calls will be placed to the THINC Help Desk. End-Users will be
provided a toll-free telephone number. Issues associated with Clinical
Transaction Services will be referred to the Synetic Help Desk.
3. Both THINC's and Synetic's Help Desks will use a problem tracking system
(PTS) to manage problem resolution. Synetic's Help Desk staff will be
professional and trained so as to handle issues associated with the
Synetic System and the Clinical Transaction Services.
G-2
<PAGE>
SCHEDULE G
(continued)
Performance Standards
4. Synetic will provide coverage seven (7) days a week, twenty four (24)
hours a day, 365 days per year to respond to referred telephone calls.
5. During "normal working hours", defined as 8:00 am to 8:00 pm Eastern
Standard Time or Eastern Daylight Time, as applicable, Monday through
Friday, and Saturday from 9:00 am to 4:00 pm], the Synetic Help Desk will
answer all calls by the fourth (4th) ring. The Synetic Help Desk personnel
will resolve all telephone calls that can be resolved at the Synetic Help
Desk level.
6. Telephone calls received during normal working hours that cannot be
resolved at the Synetic Help Desk level will be assigned to the
appropriate Synetic technician.
7. Regarding calls received during normal working hours which the Synetic
Help Desk staff or the Synetic technician has determined that the caller's
issue can be resolved remotely, ninety-five percent (95%) of such calls
shall be resolved by Synetic via remote access in less than eight (8)
business hours from such determination.
8. Telephone calls received by the Synetic Help Desk outside the timeframe
defined as "normal working hours" will be forwarded to the appropriate
Synetic technical staff within four (4) hours after the telephone call is
received. Within this four hour time period, Synetic will notify the
caller of the name of the Synetic technician who has been assigned to the
problem.
9. If Synetic fails to notify the caller within the agreed upon time as to
who has been assigned to the problem, the caller will place a second
telephone call to the Synetic Help Desk and ask that the problem be
immediately escalated to the next level.
G-3
EXECUTION COPY
CLINICAL TRANSACTION AGREEMENT
Between
SYNETIC HEALTHCARE COMMUNICATIONS, INC.
and
GROUP HEALTH INCORPORATED
Pages where confidential treatment has been requested are stamped "Confidential
Treatment Requested and the Redacted Material has been separately filed with
the Commission", and the confidential section has been marked in the margin
with a star (*).
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS............................................................... 1
2. SYNETIC RESPONSIBILITIES.................................................. 3
3. PAYER RESPONSIBILITIES.................................................... 4
4. DEPLOYMENT AND IMPLEMENTATION............................................. 6
5. INTELLECTUAL PROPERTY AND LICENSES........................................ 6
6. PERFORMANCE............................................................... 8
7. FEES AND CHARGES.......................................................... 8
8. LIMITATION OF LIABILITY AND REMEDIES...................................... 9
9. INDEMNITIES............................................................... 9
10. TERM OF AGREEMENT........................................................ 11
11. TERMINATION OF AGREEMENT................................................. 11
12. DISPUTE RESOLUTION AND ARBITRATION....................................... 12
13. SECURITY, CONFIDENTIALITY AND DATA....................................... 12
14. GENERAL.................................................................. 13
SCHEDULE A - Fees............................................................A-1
SCHEDULE B - Prescription Communication Services.............................B-1
SCHEDULE C - Laboratory Communication Services...............................C-1
SCHEDULE D - Payer-Supplied Information......................................D-1
SCHEDULE E - Financial Warranty..............................................E-1
SCHEDULE F - Synetic Insurance...............................................F-1
SCHEDULE G - Performance Standards...........................................G-1
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CLINICAL TRANSACTION AGREEMENT
This Agreement is entered into as of this 1st day of January, 1999, by and among
Group Health Incorporated, a corporation with offices at 441 Ninth Avenue, 8th
Floor, New York, New York 10001 ("Payer"), and Synetic Healthcare
Communications, Inc., a Delaware corporation having its principal place of
business at River Drive Center 2, 669 River Drive, Elmwood Park,
New Jersey 07407-1361 ("Synetic").
WHEREAS, Synetic desires to provide to Payer, on an exclusive basis,
certain on-line prescription and laboratory transaction, messaging and
content/reference services described in this Agreement as Clinical Transaction
Services;
WHEREAS, Payer desires that Synetic provides such services, all on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises made, the
terms and conditions hereunder described and other valuable consideration, the
parties agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings indicated
unless the context clearly requires otherwise:
1.1 Agreement. "Agreement" shall refer to the terms and conditions set
forth herein and in the Schedules attached hereto, which are hereby made an
integral part of this Agreement and shall be read as if included within the text
of this Agreement.
1.2 Clinical Transaction Services. "Clinical Transaction Services" shall
mean the Prescription Communication Services and the Laboratory Communication
Services, as such services are more fully described in Schedules B and C,
respectively.
1.3 Confidential Information. "Confidential Information" shall have the
meaning set forth in Section 13.2.
1.4 Cure Period. "Cure Period" shall have the meaning set forth in Section
11.1.
1.5 Current Payer-Member. "Current Payer-Member" shall mean each of Payer,
Empire Blue Cross and Blue Shield, and Health Insurance Plan of Greater New
York.
1.6 Damages. "Damages" shall have the meaning set forth in Section 9.1.
1.7 Debtor Relief Law. "Debtor Relief Law" shall have the meaning set forth
in Section 11.2.1.
1.8 Effective Date. "Effective Date" shall mean the date in this Agreement
first written above.
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1.9 End-User. "End-User" shall mean a physician or other healthcare
provider or staff thereof, who is an authorized and registered user of any of
the Clinical Transaction Services.
1.10 Healthcare-Payer. "Healthcare-Payer" shall mean an insurer or other
payer of health-related claims.
1.11 Indemnified Party. "Indemnified Party" shall have the meaning set
forth in Section 9.4.1.
1.12 Indemnifying Party. "Indemnifying Party" shall have the meaning set
forth in Section 9.4.1.
1.13 IT. "IT" shall have the meaning set forth in Section 2.4.
1.14 Laboratory Communication Services. "Laboratory Communication Services"
shall mean on-line transaction, messaging and content services which connect
physician offices with Payer and with clinical laboratories (via the Synetic
System) in order to enable physicians to write, modify and order laboratory
tests, view laboratory test results, and review information relating to or
prompted by the selection of a laboratory test, as such services are more fully
described in Schedule C.
1.15 Lab Project Plan. "Lab Project Plan" shall have the meaning set forth
in Section 4.2.
1.16 Member. "Member" shall mean any member, including without limitation
any Payer-Member, of THINC.
1.17 Payer. "Payer" shall have the meaning set forth in the first paragraph
of this Agreement.
1.18 Payer Data. "Payer Data" shall have the meaning set forth in Section
13.3.
1.19 Payer Marks. "Payer Marks" shall have the meaning set forth in Section
5.4.
1.20 Payer-Member. "Payer-Member" shall mean a Healthcare-Payer who is or
becomes a Member, including without limitation the Current Payer-Members.
1.21 Payer Proprietary Materials. "Payer Proprietary Materials" shall have
the meaning set forth in Section 5.1.
1.22 Payer Relationship Manager. "Payer Relationship Manager" shall have
the meaning set forth in Section 3.12.
1.23 Payer-Supplied Information. "Payer-Supplied Information" shall mean
such information described in Schedule D.
1.24 Payer System. "Payer System" shall mean the facilities, computer
hardware and software and the communications network, which Payer shall employ
to utilize the Clinical Transaction Services.
1.25 PBM. "PBM" shall mean pharmaceutical benefit manager.
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1.26 Performance Standards. "Performance Standards" shall mean the
procedures and standards set forth in Schedule G attached hereto for the
Clinical Transaction Services and the Synetic System.
1.27 Person. "Person" shall mean a natural person, corporation, limited
liability company, association, joint stock company, limited partnership,
general partnership, proprietorship, trust, self-regulatory organization or
other entity, enterprise authority or business organization.
1.28 Prescription Communication Services. "Prescription Communication
Services" shall mean on-line transaction, messaging and content services which
connect physician offices with Payer and with pharmacies (via the Synetic
System) in order to enable physicians to write, modify, order and renew
prescriptions and review information relating to or prompted by the selection or
use of a prescription drug, as such services are more fully described in
Schedule B.
1.29 Prescription Project Plan. "Prescription Project Plan" shall have the
meaning set forth in Section 4.2.
1.30 Project Plan. "Project Plan" shall have the meaning set forth in
Section 4.2.
1.31 Synetic Marks. "Synetic Marks" shall have the meaning set forth in
Section 5.3.
1.32 Synetic Proprietary Materials. "Synetic Proprietary Materials" shall
mean all software, information, data and materials provided by Synetic
hereunder, including but not limited to the Clinical Transaction Services, the
Synetic System, the Synetic Marks, all software and documentation associated
with any of the foregoing, all copyrights, trademarks, patents, trade secrets
and other intellectual property rights inherent therein or appurtenant thereto
and any modifications, enhancements, updates and upgrades thereto, all as owned
or licensed by Synetic as of the Effective Date or thereafter created, designed,
developed or licensed by Synetic, its employees or agents.
1.33 Synetic Relationship Manager. "Synetic Relationship Manager" shall
have the meaning set forth in Section 2.6.
1.34 Synetic System. "Synetic System" shall mean the facilities, computer
hardware and software and the communications network and related services, which
Synetic shall use to provide the Clinical Transaction Services.
1.35 Term. "Term" shall have the meaning set forth in Section 10.1.
1.36 THINC. "THINC" shall mean The Health Information Network Connection
LLC, a New York limited liability company.
2. SYNETIC RESPONSIBILITIES
2.1 Provision of Clinical Transaction Services. Synetic shall provide to
Payer the Clinical Transaction Services, in accordance with the terms and
conditions set forth in this Agreement, for the fees set forth in Section 7.
2.2 Connections. Synetic will provide the high speed telecommunications
connections and supporting equipment required to maintain connectivity between
the Synetic System and the Payer
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System for the Clinical Transaction Services. Synetic and Payer will share
equally the costs of such connections and supporting equipment.
2.3 End-User Services. Synetic shall provide contracting and implementation
services enabling End-Users to use the Clinical Transaction Services, including
marketing, training and customer support.
2.4 Synetic Implementation and Support. Synetic will provide appropriate
information technology ("IT") management assistance for project planning and
execution. Synetic will institute an appropriate internal chain of command for
escalating IT issues regarding development or implementation priorities. Synetic
will provide appropriate response to technical inquiries or service issues from
Payer's designated technical personnel.
2.5 Laws and Regulations. Synetic will meet all applicable legal and
regulatory requirements with regard to the transmission of confidential patient
data and electronic prescriptions. Synetic shall comply in all material respects
with applicable laws and regulations relating to performance of its obligations
hereunder.
2.6 Synetic Relationship Manager. Synetic will appoint a relationship
manager (the "Synetic Relationship Manager") to manage the relationship
established by this Agreement who will (a) coordinate and monitor Synetic's
obligations under this Agreement, and (b) serve as the primary liaison with the
Payer Relationship Manager.
2.7 Complementary Services. Synetic has designed the Clinical Transaction
Services to be unique and different from the services currently being provided
to Payer by PBMs, reference laboratories and other service companies. Synetic
agrees to use its best efforts to ensure that the Clinical Transaction Services
are complementary with and incremental to services provided to Payer by PBMs,
reference laboratories, or other service companies who have contracted with
Payer. Synetic agrees to review with Payer periodically the services being
provided to Payer by service companies under other contracts in the context of
the unique services being provided to Payer by Synetic under this Agreement, and
to identify and use its best efforts to minimize any duplicate charges.
3. PAYER RESPONSIBILITIES
3.1 Exclusive Grant. Payer agrees that Synetic shall have the sole and
exclusive right to implement, deliver, support, provide, maintain or make
available to or on behalf of Payer any or all of the Clinical Transaction
Services, except as provided in Section 3.6. Payer acknowledges that Synetic
will provide Clinical Transaction Services to other Healthcare-Payers, and that
the Synetic System and the Clinical Transaction Services will be open to all
Healthcare-Payers and healthcare providers.
3.2 Connections and Interfaces. Payer shall establish all interfaces (in
such forms as will be set forth in the Project Plan) to the Synetic System from
the Payer System and modify the Payer System to provide additional capabilities
as are reasonably necessary for the proper use of the Clinical Transaction
Services. Payer shall establish such interfaces as soon as practicable pursuant
to, and, in any case, not later than the dates specified in, the Project Plan.
3.3 Payer-Supplied Information. Payer agrees to use reasonable efforts to
provide to Synetic, either directly or through a surrogate (e.g., PBM)
designated by Payer, the Payer-Supplied Information set forth in Schedule D, and
other content, in a form, manner and frequency to be mutually agreed upon and
set forth in the Project Plan, as is reasonably necessary for Synetic to provide
to Payer
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the Clinical Transaction Services. Payer shall have the right to review
and approve such Payer-Supplied Information that may be provided by any such
surrogate or other third party.
3.4 Support of Synetic's Marketing Efforts. Payer agrees to actively
endorse and support Synetic's efforts to market the Clinical Transaction
Services, provided that Payer shall not be obligated to provide material
financial endorsement or support of such efforts. Payer shall identify Synetic
as Payer's exclusive provider of the Clinical Transaction Services. Payer will
provide Synetic reasonable access to and liaison with Payer's product marketing
department/division.
3.5 Payer-Physician Communications. Payer will communicate to physicians
regarding the advantages of utilizing the Clinical Transaction Services by
integrating announcements into appropriate Payer-to-physician communications.
3.6 Marketing of Clinical Transaction Services. Payer agrees to cooperate
with Synetic in the development of Synetic's prescription and lab management
programs aimed at maximizing adoption of the Clinical Transaction Services to
the extent that such programs do not conflict with Payer's contracts with PBMs,
laboratory companies or other third-party vendors. Payer agrees to use
reasonable best efforts to promote and market the Clinical Transaction Services
to its customers, and agrees not to promote or market to its customers the
Clinical Transaction Services of any other vendor. In the event that any
customer of Payer communicates to Payer its desire to utilize the Clinical
Transaction Services of another vendor, Payer will inform such customer that
Synetic is Payer's exclusive provider of Clinical Transaction Services, and will
use its best efforts to persuade such customer to utilize Synetic's Clinical
Transaction Services. Synetic recognizes, however, that a customer of Payer may
ultimately choose not to purchase or utilize the Clinical Transaction Services
or to purchase or utilize them from another vendor, which services Payer may
integrate into Payer's overall administration of such customer's product to the
extent necessary for such administration.
3.7 Physician Data. As soon as practicable, and in any case not later than
the date set forth in the Project Plan, Payer will provide Synetic with a list
of, and detailed data regarding, target "high prescribing" and "high lab test
ordering" physicians, to support targeted sales efforts, such data to be in a
form, manner and frequency to be agreed upon. Payer will also provide Synetic
with updates to such data from time to time.
3.8 Payer Implementation and Support. Payer will provide Synetic with such
technical resources access and support, consistent with Payer's own technical
demands and requirements, for testing, certifying, implementing and updating
Payer System interfaces and software related to the Clinical Transaction
Services. Payer will provide Synetic with appropriate IT management assistance
for project planning and execution. Payer will institute an appropriate internal
chain of command for escalating IT issues regarding development or
implementation of the Clinical Transaction Services. Payer will provide
appropriate response to technical inquiries or customer service issues from the
Synetic Help Desk or Synetic technical support personnel.
3.9 Payer System. Payer shall be responsible for operating and maintaining
the Payer System, as may be reasonably necessary for the proper use of the
Clinical Transaction Services.
3.10 Performance Problems. Payer shall report to Synetic any performance
problems relating to the Clinical Transaction Services.
3.11 Laws and Regulations. Payer shall comply in all material respects with
all applicable laws and regulations relating to performance of its obligations
hereunder.
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3.12 Payer Relationship Manager. Payer will appoint a relationship manager
to manage the relationship established by this Agreement (the "Payer
Relationship Manager") who will (a) coordinate and monitor Payer's obligations
under this Agreement, and (b) serve as the primary liaison with the Synetic
Relationship Manager.
3.13 Plan Members. Payer represents to Synetic that, as of the Effective
Date, Payer provides health insurance benefits or administrative services to at
least ______ plan members (including duplicative member coverage).
4. DEPLOYMENT AND IMPLEMENTATION
4.1 Deployment and Implementation Activities. Each of the parties shall
perform its respective duties and obligations regarding deployment and
implementation of the Clinical Transaction Services according to the plans and
within the timeframes set forth in each Project Plan established pursuant to
Section 4.2. The parties acknowledge that it may be necessary to conduct market
tests of the Clinical Transaction Services prior to pilot or full-scale
deployment. In addition, the parties acknowledge that the timely deployment and
implementation of the Clinical Transaction Services will require the full
cooperation of the parties and that the ability of each party to perform its
duties and obligations with respect to the Clinical Transaction Services may be
dependent on the other party's performance of its duties and obligations.
4.2 Project Plans. Payer and Synetic, within one hundred twenty (120) days
from the Effective Date, or such longer period as is reasonably necessary for
the completion of such plan, will mutually develop and agree upon a detailed
project plan, which will contain the development and technical implementation
schedule, pilot timeframe, and production availability/timeframe of the
deployment of the Prescription Communication Services (the "Prescription Project
Plan"). Following completion of the Prescription Project Plan, Payer and
Synetic, within one hundred eighty (180) days from such completion of the
Prescription Project Plan, or such longer period as is reasonably necessary for
the completion of such plan, will mutually develop and agree upon a detailed
project plan, which will contain the development and technical implementation
schedule, pilot timeframe, and production availability/timeframe of the
deployment of the Laboratory Communication Services (the "Lab Project Plan",
and, together with the Prescription Project Plan, the "Project Plan"). The
completed Prescription Project Plan and Lab Project Plan shall be attached to,
and shall become a part of, this Agreement. Any changes to a Project Plan must
be mutually agreed to in writing by the parties. Each party acknowledges and
agrees that such changes may require changes in performance deadlines for
Synetic and/or Payer, and that the failure by one party to meet the requirements
set forth in either Project Plan may require changes in the performance
deadlines for the other party.
4.3 Cooperation with Vendors. Synetic agrees to cooperate fully and work
together with Payer's PBMs, clinical laboratory companies and other third-party
vendors in connection with the deployment of the Clinical Transaction Services,
as appropriate.
5. INTELLECTUAL PROPERTY AND LICENSES
5.1 Payer System. Subject to the terms of this Agreement, Payer hereby
grants to Synetic the right to access and use the Payer System and any other
Payer-owned or licensed systems and technology, software, proprietary elements,
documentation, records and other Payer-owned or licensed trade secrets or
know-how (including, without limitation, the Payer Data and the Payer-Supplied
Information) (collectively the "Payer Proprietary Materials") for the sole
purpose of enabling Synetic to
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perform its responsibilities hereunder, including but not limited to providing
the Clinical Transaction Services. Payer shall obtain, and Synetic will
cooperate with Payer in obtaining, any necessary consents, licenses and
approvals from Payer's licensors or other providers with respect to Synetic's
use of the Payer Proprietary Materials as contemplated hereunder.
5.2 Synetic System. Synetic hereby grants to Payer the right to use and
access the Synetic System and the Clinical Transaction Services for the sole
purpose of enabling Payer to perform its responsibilities hereunder. Synetic
shall obtain, and Payer will cooperate with Synetic in obtaining, any necessary
consents, licenses and approvals of Synetic's licensors or other providers with
respect to Payer's use of the Synetic System and the Clinical Transaction
Services.
5.3 Synetic Marks. Synetic hereby grants to Payer the right to use the
Synetic trademarks, corporate and trade names and logos, and other appropriate
branding (collectively, the "Synetic Marks") in connection with and for the
marketing and promotion of the Clinical Transaction Services. Synetic will have
the right to approve all communication materials, and uses of the Synetic Marks
in such communication materials, prior to publication. Payer shall not publish
or use the Synetic Marks without Synetic's prior written approval.
5.4 Payer Marks. Payer hereby grants to Synetic the right to use Payer's
trademarks, corporate and trade names and logos, and other appropriate branding
(collectively, the "Payer Marks") in connection with and for the marketing and
promotion of the Clinical Transaction Services, including without limitation, in
sales/marketing collateral, on computer screens, and via other communications
media, such as monthly Synetic-hosted physician seminars. Payer will have the
right to approve all such communication materials and uses prior to publication.
Synetic shall not publish or use the Payer Marks without Payer's prior written
approval.
5.5 Limitations. Neither party shall have the right to sublicense, assign
or otherwise transfer the rights granted to it by the other under this Section
5, except as provided in Section 14.10, and any such prohibited sublicense,
assignment or transfer shall be null and void.
5.6 Rights of Synetic. Payer acknowledges and agrees that, as between Payer
and Synetic, all right, title and interest in and to the Synetic Proprietary
Materials shall remain the sole and exclusive property of Synetic. All rights to
patents, copyrights, trademarks, service marks, trade secrets, know-how and
methodologies relating to the Synetic Proprietary Materials, and relating to
Synetic's performance of the Clinical Transaction Services under this Agreement
(except for such as constitute Payer Proprietary Materials), belong exclusively
to, and shall at all times remain with, Synetic. All rights therein not
explicitly licensed to Payer herein, whether now existing or which may hereafter
come into existence, including without limitation rights in all media and
formats addressed herein and in media and formats other than those addressed
herein, are reserved exclusively to Synetic.
5.7 Rights of Payer. Synetic acknowledges and agrees that, as between Payer
and Synetic, all right, title and interest in and to the Payer Proprietary
Materials and the Payer Marks, shall remain the sole and exclusive property of
Payer. All rights to patents, copyrights, trademarks, service marks, trade
secrets, know-how and methodologies relating to Payer's operation of the Payer
System and performance of its obligations under this Agreement (except for such
as constitute Synetic Proprietary Materials) belong exclusively to, and shall at
all times remain with, Payer.
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6. PERFORMANCE
6.1 Manner of Performance. Synetic undertakes to perform the Clinical
Transaction Services, as provided and described herein, and as provided and
agreed upon in the Project Plan, in a professional and businesslike manner. In
addition, Synetic warrants that such Clinical Transaction Services will be
performed, and the Synetic System will be managed, in accordance with the
Performance Standards set forth in Schedule G.
6.2 Millenium Compliance. Payer represents that the Payer System, and
Synetic represents that the Synetic System (each including any upgrades and
updates thereto), is and shall be Millennium Compliant. For purposes of this
Agreement, as to any hardware, software or system, "Millennium Compliant" shall
mean the ability of that hardware, software or system to provide the following
functions: (a) consistently process date information before, during and after
January 1, 2000 including but not limited to accepting date input, providing
date output, performing calculations on dates or portions of dates, and
calculating leap years; and (b) function accurately in accordance with its
respective specifications and documentation and without interruption before,
during and after January 1, 2000 without any adverse change in operation,
function or performance associated with the advent of the new century; and (c)
respond to two-digit year date input in a way that resolves any ambiguity as to
century in a disclosed, defined and predetermined manner; and (d) store and
provide output of date information in ways that are unambiguous as to century;
and (e) maintain interoperability with other hardware and software products with
which it must interact and exchange records, provided that such other hardware
and software products are themselves Millenium Compliant as set forth in (a) -
(d) above.
6.3 NO WARRANTIES. EXCEPT AS PROVIDED IN THIS AGREEMENT, NEITHER SYNETIC
NOR ANY OF ITS AFFILIATES, EMPLOYEES, OFFICERS, DIRECTORS, AGENTS OR LICENSORS
MAKES, AND PAYER RECEIVES, NO WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR
ALLEGEDLY EXTENDED IN ANY COMMUNICATION WITH PAYER, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR A PARTICULAR PURPOSE OR
WARRANTY THAT THE CLINICAL TRANSACTION SERVICES PROVIDED TO PAYER UNDER THIS
AGREEMENT SHALL BE UNINTERRUPTED OR ERROR-FREE, NOR DO THEY WARRANT THAT CERTAIN
RESULTS MAY BE OBTAINED BY PAYER OR AN END-USER IN CONNECTION WITH EITHER'S USE
OF THE CLINICAL TRANSACTION SERVICES.
7. FEES AND CHARGES
7.1 Clinical Transaction Services Fees. Payer agrees to pay to Synetic the
Clinical Transaction Services fees and other fees set forth in Schedule A.
7.2 Financial Warranty. Synetic will provide to Payer the financial
warranty regarding the Clinical Transaction Services as set forth in Schedule E.
Payer agrees to provide Synetic with such information as is reasonably
sufficient to enable Synetic to verify Payer's actual savings pursuant to
Schedule E.
7.3 Costs of Performance. Unless otherwise specified herein, Synetic and
Payer will each bear its respective costs of performance under this Agreement.
7.4 Timeliness of Payment. Payer shall pay all fees to Synetic as described
in this Section 7 and Schedule A within thirty (30) days after receipt of an
invoice therefor, except for fees disputed in good faith. If such payment has
not been made within sixty (60) days after Payer's receipt of an invoice
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<PAGE>
therefor, Payer shall also pay to Synetic interest at a rate of one percent (1%)
of the invoice amount for each thirty (30) day period, or portion thereof, for
which timely payment has not been made.
7.5 Beta Tests. Synetic agrees that Payer will not be charged Clinical
Transaction Services fees in connection with any beta tests conducted by
Synetic.
7.6 Taxes. Payer will pay to Synetic amounts equal to any taxes, however
designated or levied, based upon any charges under this Agreement, or upon this
Agreement or the services or materials provided hereunder, or Payer's use
thereof, including state and local sales, use, privilege or excise taxes based
on gross revenue, and any taxes or amounts in lieu thereof paid or payable by
Synetic in respect of the foregoing, but excluding any franchise taxes, taxes
based on the adjusted gross income of Synetic, and employee withholding, FICA,
and other taxes relating to Synetic personnel performing services hereunder.
7.7 Unauthorized Transactions: Payer shall not be liable for fees for any
unauthorized Clinical Transactions Services that may occur as a result of a
hacking or other breach of the Synetic System.
8. LIMITATION OF LIABILITY AND REMEDIES
8.1 DISCLAIMER OF DAMAGES. EXCEPT TO THE EXTENT PROVIDED IN SECTION 9,
NEITHER SYNETIC NOR PAYER WILL BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES ARISING UNDER THIS AGREEMENT,
INCLUDING BUT NOT LIMITED TO LOSS OF DATA, INTEREST, ANTICIPATED SAVINGS,
REVENUES OR PROFITS, OR INTERRUPTION OF BUSINESS, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES. THE LIMITATIONS OF
LIABILITY IN THIS SECTION SHALL APPLY REGARDLESS OF THE FORM OF ACTION, WHETHER
IN CONTRACT, TORT (INCLUDING NEGLIGENCE OF ANY KIND, WHETHER ACTIVE OR PASSIVE),
WARRANTY, STRICT LIABILITY OR ANY OTHER LEGAL OR EQUITABLE GROUNDS. EXCEPT TO
THE EXTENT PROVIDED IN SECTION 9, ALL REMEDIES AVAILABLE TO SYNETIC AND PAYER
SHALL BE LIMITED TO (I) INJUNCTIVE RELIEF (WHERE APPROPRIATE), (II) SUCH PARTY'S
ACTUAL DIRECT MONEY DAMAGES IN AN AGGREGATE AMOUNT FOR THE TERM NOT TO EXCEED
FEES PAYABLE BY PAYER TO SYNETIC DURING THE TWELVE (12) MONTHS IMMEDIATELY PRIOR
TO THE CLAIM TO WHICH SUCH DAMAGES RELATE, AND (III) ANY UNPAID OR UNREIMBURSED
FEES AND COSTS.
8.2 ESSENTIAL ELEMENTS. THE PARTIES ACKNOWLEDGE THAT THE FOREGOING
DISCLAIMER AND LIMITATIONS OF LIABILITY ARE ESSENTIAL ELEMENTS OF THIS
AGREEMENT.
9. INDEMNITIES
9.1 Synetic Indemnity. Synetic will indemnify, defend and hold Payer,
Payer's parent, subsidiaries, and affiliates and their respective officers,
directors, employees and agents, harmless from and against any and all
third-party claims, actions, suits, demands, proceedings, obligations and
liabilities, damages, losses, judgments and expenses (including costs of
collection, attorneys' fees and other costs of defense) (collectively "Damages")
relating to the Clinical Transaction Services (including,
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without limitation, damage, loss or liability relating to unauthorized access to
the Synetic System, the delivery of incorrect messages, and the failure to
provide messages).
9.2 Payer Indemnity. Payer will indemnify, defend and hold Synetic,
Synetic's parent, subsidiaries, and affiliates and their respective officers,
directors, employees and agents, harmless from and against any Damages relating
to Payer-Supplied Information and any other content, messages, rules, guidelines
and other information provided to Synetic by such Payer or on behalf of such
Payer by a third party (e.g., PBM, laboratory company), provided that such Payer
has authorized and approved the use of such information.
9.3 Exception. The indemnities set forth in Sections 9.1 and 9.2 will not
apply to the extent that the party claiming indemnification was responsible for
giving rise to the matter upon which the claim for indemnification is based.
9.4 Indemnification Procedures.
9.4.1 A party seeking indemnification under this Agreement (an
"Indemnified Party") for a claim by a third party shall promptly notify the
other party (the "Indemnifying Party") in writing of the commencement, or
threatened commencement, of any civil, criminal, administrative or
investigative action or proceeding involving a claim for indemnification
under this Agreement. The Indemnifying Party shall have sole control over
the defense and settlement of such claim, provided that, within thirty (30)
days after receipt of the above-described notice, the Indemnifying Party
notifies the Indemnified Party of its election to so assume full control.
The foregoing notwithstanding, the Indemnified Party shall be entitled to
participate in the defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim. The Indemnifying Party
shall obtain the prior written approval of the Indemnified Party, which
shall not be unreasonably withheld, before entering into any settlement of
such claim or ceasing to defend against such claim if such settlement or
cessation would cause injunctive or other equitable relief to be imposed
against the Indemnified Party. A condition to any settlement by the
Indemnifying Party of a claim shall be that the Indemnified Party is fully
released from any liability related to the claim. After notice by the
Indemnifying Party to the Indemnified Party of its election to assume full
control of the defense of any such action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal expenses incurred by the
Indemnified Party in connection with the defense of that claim. If the
Indemnifying Party does not assume sole control over the defense of such
claim, the Indemnifying Party may participate in such defense and the
Indemnified Party shall have the right to defend the claim in such manner
as it may deem appropriate, at the cost and expense of the Indemnifying
Party. An Indemnifying Party shall not be required to indemnify an
Indemnified Party for any amount paid or payable by such Indemnified Party
in the settlement of any such claim which was agreed to without the written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld.
9.4.2 If a claim for indemnification hereunder involves a third-party
claim, the Indemnifying Party may, at its sole cost, expense and ultimate
liability regardless of the outcome, and through counsel of its choice,
litigate, defend, settle or otherwise attempt to resolve such claim, except
that the Indemnified Party may elect, at any time and at its sole cost,
expense and ultimate liability, regardless of the outcome, and through
counsel of its choice, to so resolve such claim, thereby waiving any right
to indemnification under this Agreement. In any event, each party shall
fully cooperate with the other and their respective counsel in connection
with any such resolution, and notwithstanding which party is defending any
such third-party claim, the
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other party shall have the right to select co-counsel at its sole cost and
expense and to consult with counsel for the Indemnifying Party.
10. TERM OF AGREEMENT
10.1 Initial Term. This Agreement shall commence on the Effective Date and
extend until the later of (i) four (4) years after the date that the Clinical
Transaction Services are launched for Payer, which launch date will be set forth
in the Project Plan, and (ii) either (a) the end of the initial term of the
Management Services Agreement, dated of even date herewith, between Synetic and
THINC (as provided in Section 8.1 therein), or (b) if such Management Services
Agreement is terminated by Synetic prior to the expiration of such initial term
due to a material breach by THINC, June 1, 2004 (the "Term").
10.2 Extension. Synetic shall notify Payer within six (6) months prior to
the expiration of the Term, whether Synetic desires to renew this Agreement and
of the proposed terms to govern such renewal. Not less than three (3) months
prior to such expiration, Payer shall notify Synetic whether it desires to renew
this Agreement on the terms proposed by Synetic or on other terms as may be
proposed by Payer.
11. TERMINATION OF AGREEMENT
11.1 Termination for Cause. If either party materially breaches any of its
duties or obligations hereunder (including, without limitation, any duties or
obligations under the Project Plans), and such breach is not cured within ninety
(90) days after written notice of the breach ("Cure Period"), then the
non-breaching party may terminate this Agreement, provided that such
non-breaching party provided written notice of the breach within ninety (90)
days following the date that it first became aware of such breach. This
termination right must be exercised during the thirty (30)-day period beginning
at the end of the Cure Period.
11.2 Termination for Insolvency. If either Synetic or Payer becomes or is
declared insolvent or bankrupt, then this Agreement shall be immediately
terminated, without the requirement of any notice to the insolvent or bankrupt
party. A party shall be deemed insolvent or bankrupt for purposes of this
Section if:
11.2.1 a receiver, liquidator or trustee of a party is appointed by
court order and such order remains in effect for more than sixty (60) days,
or a case is commenced or a petition is filed against a party, and is not
dismissed or stayed within sixty (60) days, under any applicable
liquidation, conservatorship, bankruptcy, moratorium, insolvency,
reorganization or similar laws for the relief of debtors from time to time
in effect and generally affecting the rights of creditors (a "Debtor Relief
Law"); or
11.2.2 a party commences a voluntary case or voluntarily seeks,
consents to, or acquiesces in the benefit or benefits of any provision of
any Debtor Relief Law; consents to the filing of any petition against it
under such Debtor Relief Law; makes an assignment for the benefit of its
creditors; admits in writing its inability to pay its debts generally as
they become due; or consents to the appointment of a receiver, trustee,
liquidator or conservator for it or any part of its property.
11.3 Cooperation Upon Termination. Without limiting the foregoing, upon
termination of this Agreement for any reason, each party shall assist the other
party in the orderly termination of this
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Agreement and the transfer of all aspects hereof, tangible and intangible, as
may be necessary for the orderly, non-disrupted business continuation of each
party.
12. DISPUTE RESOLUTION AND ARBITRATION
12.1 Dispute Resolution. Payer and Synetic will agree to use their best
efforts to resolve disputes informally and amicably. If, after negotiating for
thirty (30) days or for some longer period if the parties agree, no resolution
of a dispute is reached, Payer and Synetic will submit the dispute to binding
arbitration in New York, New York pursuant to the Commercial Arbitration Rules
of the American Arbitration Association ("AAA") and the procedures set forth in
Section 12.2.
12.2 Arbitration. All disputes that cannot be resolved pursuant to the
internal dispute resolution process identified above will be submitted to and
settled by final and binding arbitration. Any dispute which cannot be resolved
as set forth above, will be resolved by final and binding arbitration in New
York, New York by a panel of three (3) arbitrators in accordance with and
subject to the Commercial Arbitration Rules of the AAA then in effect. Following
notice of a party's election to require arbitration, each party will within
thirty (30) days select one arbitrator, and those two arbitrators will within
thirty (30) days thereafter select a third arbitrator. If the two arbitrators
are unable to agree on a third arbitrator within thirty (30) days, the AAA will
within thirty (30) days thereafter select such third arbitrator. Judgment upon
the award rendered in any such arbitration may be entered in any court of
competent jurisdiction, or application may be made to such court for a judicial
acceptance of the award and an enforcement, as the law of such jurisdiction may
require or allow. Notwithstanding the foregoing, either party may seek
injunctive relief in a court of competent jurisdiction, where appropriate, to
protect its rights pending the outcome of such arbitration.
13. SECURITY, CONFIDENTIALITY AND DATA
13.1 Security. Synetic agrees that Synetic shall provide, as part of the
Synetic System, all reasonable security measures. Synetic will establish a
security program and policies to protect against unauthorized access to the
Synetic System and the Payer Proprietary Materials, which program and policies
will be made available to Payer and will be reviewed by an independent third
party that is a recognized expert in the area of systems security and who has
been mutually agreed upon by the parties. Moreover, access to the Synetic System
will be limited to authorized personnel only, which personnel will be governed
by a formal security policy.
13.2 Confidentiality. "Confidential Information" shall mean information
such as proprietary lists, business plans, operation plans, plan information,
the Synetic Proprietary Materials, the Payer Proprietary Materials, and all
other materials relating to the business of Payer, Synetic, and Synetic's and
Payer's respective parent, subsidiaries, affiliates (including financial
information relating thereto). Each party hereby agrees that it and its
respective officers, employees, agents, contractors, assignees, and successors
shall (i) keep all Confidential Information received from the other party
strictly confidential, (ii) instruct its officers, employees, agents,
contractors, and permitted assignees and successors to use the same degree of
care and discretion with respect to the Confidential Information of the other
party, or of any third party utilized hereunder, that Synetic and Payer each
require with respect to their own most confidential information, (iii) use such
information solely for the purposes and in the manner set forth in this
Agreement, (iv) not disclose any such information to any other person,
corporation, governmental agency or other entity without the express written
permission of the other and (v) institute the necessary security policies and
procedures to meet its obligations hereunder. Notwithstanding the foregoing, the
confidentiality obligations set forth in this Section 13 will not apply
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to any information which the recipient party can establish to have (x) become
publicly available without breach of this Agreement, (y) been independently
developed by the recipient party outside the scope of this Agreement and without
reference to the Confidential Information received under this Agreement, or (z)
been rightfully obtained by the recipient party from third parties which are not
obligated to protect its confidentiality.
13.3 Payer Data. Synetic agrees that all Payer-identifiable data, policies,
procedures and protocols, records and documentation provided to Synetic under
this Agreement ("Payer Data"), as between Synetic and Payer, shall be owned by
Payer and shall be used by Synetic only with Payer's consent, and that such
Payer Data will not be shared with other Healthcare-Payers or Payer-Members. In
addition, any patient data that is transferred to or from Payer through or by
the Synetic System shall at all times remain the property of Payer. Synetic
shall not extract, accumulate, analyze or in any manner use such data without
the parties executing a prior written agreement as to the manner of use and cost
to Synetic for Payer permitting such use, except to the extent necessary to
perform its obligations under this Agreement and as is reasonably necessary to
engage in the business of providing Clinical Transaction Services to Payer.
13.4 Patient Information. Without limitation of the foregoing, Synetic
agrees to treat as confidential all patient-identifiable information in
accordance with applicable laws and regulations, and with all applicable
policies of Payer that are provided to Synetic in writing. Synetic agrees that
patient-identifiable clinical information collected or transmitted through the
Synetic System (including patient drug histories and lab results) will be
delivered by Synetic to a non-originating physician only when such physician
certifies that he or she has received prior written consent from the patient,
except to the extent that (i) such delivery is otherwise permitted under
applicable state and federal laws or is consistent with Payer's then-current
practices for the delivery of such information to non-originating physicians or
(ii) Payer has certified that it has obtained the requisite written consent from
the patient.
14. GENERAL
14.1 Authority. Each party represents and warrants to the other party that
(i) it has the power and authority to enter into and perform its obligations
under this Agreement, and (ii) neither the execution of this Agreement nor the
performance of its obligations hereunder will breach or result in any default
under its articles, by-laws, or other organization documents, or under any
agreement or other legally binding instrument, license or permit to which it is
a party or by which it may be bound.
14.2 Agreements with PBM and Laboratory Vendors.
14.2.1 Notwithstanding any language in this Agreement to the contrary,
Payer shall not be deemed to have granted to Synetic the sole and exclusive
right to implement, deliver, support, provide, maintain or make available
to, or on behalf of, Payer any or all of the Prescription Communication
Services set forth in this Agreement, nor will Payer be obligated to
provide the information set forth in Schedule D, paragraphs one through
nine inclusive under the heading of "Prescription Communication Services
Information", in each case until such time as there exists a fully executed
written agreement ("Prescription Vendor Agreement"), by and among Payer,
Synetic and Payer's existing PBM, containing such terms as may be required
and mutually agreed upon, and outlining a methodology whereby the
Prescription Communication Services contemplated hereunder may be
effectuated; provided however, that (i) Payer, at its sole discretion, may
elect to grant such rights and assume such obligations without the
execution of any Prescription Vendor Agreement, and (ii) Synetic shall have
the right at any time after the
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forty-five (45) day period following the Effective Date, upon thirty (30)
days notice to Payer, to terminate this Agreement with respect to the
Prescription Communication Services if no Prescription Vendor Agreement has
been entered into and Payer has not elected to grant such rights and assume
such obligations under clause (i).
14.2.2 Notwithstanding any language in this Agreement to the contrary,
(a) Payer's grant to Synetic in Section 3.1 of the sole and exclusive right
to implement, deliver, support, provide, maintain or make available to, or
on behalf of, Payer any or all of the Laboratory Communication Services set
forth in this Agreement shall lapse commencing forty-five (45) days
following the date that such Laboratory Communication Services are
operational and available for Payer's use and benefit, (b) Payer will not
be obligated to provide the information set forth in Schedule D, paragraphs
one through nine inclusive under the heading of "Laboratory Communication
Services Information", in each case until such time as there exists a fully
executed written agreement ("Lab Vendor Agreement'), by and among Payer,
Synetic and Payer's existing clinical laboratory vendor(s), containing such
terms as may be required and mutually agreed upon, and outlining a
methodology whereby the Laboratory Communication Services contemplated
hereunder may be effectuated; provided however, that (i) Payer, at its sole
discretion, may elect to grant such rights and assume such obligations
without the execution of any Lab Vendor Agreement, and (ii) Synetic shall
have the right at any time after such forty-five(45) day period, upon
thirty (30) days notice to Payer, to terminate this Agreement with respect
to the Laboratory Communication Services if no Lab Vendor Agreement has
been entered into and Payer has not elected to grant such rights and assume
such obligations under clause (i), and (c) Synetic shall not implement the
Laboratory Communication Services on behalf of Payer until either a Lab
Vendor Agreement has been entered into or Payer has elected to grant the
rights and assume the obligations under clause (b)(i) above.
14.3 Independent Contractor. Synetic, in performing its obligations under
this Agreement, is acting only as an independent contractor of Payer and the
rights and responsibilities of the parties shall be determined accordingly.
14.4 Meetings. Synetic and Payer will meet regularly to discuss performance
results relating to the Clinical Transaction Services and to address concerns
and plan future activities of Payer and Payer's customers.
14.5 Approvals and Similar Actions. Each party will cooperate with the
other by, among other things, making available, as reasonably requested by the
other, management decisions, information, approvals and acceptances in order
that each party may properly accomplish its obligations and responsibilities
hereunder.
14.6 Force Majeure. Each of Payer and Synetic will be excused from
performance of its obligations under this Agreement for any period and to the
extent that performance is prevented as a result of delays caused by fire,
flood, interruptions of power, changes in laws or regulations, and other events
beyond its reasonable control.
14.7 Modification. No amendment, change, waiver or discharge hereof shall
be valid unless in writing and signed by an authorized representative of the
party against which such amendment, change, waiver or discharge is sought to be
enforced.
14.8 Binding Nature. This Agreement is binding on the parties hereto and
their respective successors and assigns.
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14.9 Notices. Whenever one party is required or permitted to give notice to
the other, such notice shall be deemed given: when delivered by hand, one (1)
day after being given to an express courier with a reliable system for tracking
delivery; when telecopied or faxed and receipt confirmed; or three (3) days
after the day of mailing, when mailed through United States mail, registered or
certified mail, return receipt requested, postage prepaid, and addressed as
follows:
If to Synetic, to:
Synetic Healthcare Communications, Inc.
c/o Synetic, Inc.
River Drive Center 2
669 River Drive
Elmwood Park, New Jersey 07407-1361
Fax No. 201-703-3401
Attention: Chief Financial Officer
with a copy to:
Synetic, Inc.
River Drive Center 2
669 River Drive
Elmwood Park, New Jersey 07407-1361
Fax No. 201-703-3401
Attention: General Counsel
If to Payer, to:
Group Health Incorporated
441 Ninth Avenue, 8th Floor
New York, New York 10001
Fax No. 212-563-8529
Attention: Mr. Greg Kaladjian
with a copy to:
Group Health Incorporated
441 Ninth Avenue, 8th Floor
New York, New York 10001
Fax No. 212-563-8569
Attention: Mr. William Mastro
Either party may from time to time change its address for notification purposes
by giving the other thirty (30) days prior written notice of the new address and
the date upon which it shall become effective.
14.10 Insurance. Synetic will maintain general liability insurance and such
other insurance, as set forth on Schedule F.
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14.11 Assignment. Neither Synetic nor Payer may assign this Agreement or
any of the rights or obligations thereunder without the consent of the other
(which consent shall not be unreasonably withheld) provided that (i) each party
may assign this Agreement and such rights and obligations to a purchaser or
transferee of all or substantially all of its assets and business and (ii)
Synetic may assign this Agreement and such rights and obligations to any parent
or majority owned subsidiary of Synetic.
14.12 Entire Agreement. This Agreement, including any Schedules referred to
herein and attached hereto, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and there are no
representations, understandings or agreements relative hereto which are not
fully expressed herein.
14.13 General. Notwithstanding any provisions of this Agreement to the
contrary, any provision of this Agreement that by its terms, nature or operation
of law should survive the termination or expiration of this Agreement will
survive. The waiver or failure of either party to exercise any right in any
instance shall not be deemed a waiver of any other or further right hereunder.
If for any reason a court of competent jurisdiction finds any provision of this
Agreement, or portion thereof to be unenforceable, that provision shall be
enforced to the maximum extent permissible so as to effect the intent of the
parties, and the remainder of this Agreement shall continue in full force and
effect. The section headings used herein are for reference and convenience only
and shall not enter into the interpretation thereof.
14.14 Publicity. Each of Synetic and Payer and their respective affiliates
(existing today and in the future) shall hold the terms of this Agreement in
strict confidence and not make any public statements with respect thereto,
except as may be required under applicable laws and regulations (including,
without limitation, insurance regulations and securities laws) or with the
consent of Synetic, in the case of disclosure by Payer, or with the consent of
Payer, in the case of disclosure by Synetic, in each case which consent will not
be unreasonably withheld. Notwithstanding the foregoing, Synetic and Payer will
issue a press release announcing the execution of this Agreement. In addition,
each of Synetic and Payer shall be permitted to respond generally to inquiries
regarding its business, provided that it shall not disclose specific terms of
the Agreement (except as may be required under applicable laws and regulations).
14.15 Nonassumption of Liabilities. Unless specifically provided by this
Agreement, Synetic does not assume or become liable for any of the existing or
future obligations, liabilities or debts of Payer, and Payer does not assume or
become liable for any of the existing or future obligations, liabilities or
debts of Synetic.
14.16 Governing Law. This Agreement shall be construed and enforced
according to the laws of the State of New York without reference to principles
of conflicts of laws.
14.17 Third Party Beneficiaries. Nothing in this Agreement shall confer any
benefits or rights on any Person other than the parties to this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
GROUP HEALTH INCORPORATED
By:
------------------------------------------------
Name:
Title:
SYNETIC HEALTHCARE COMMUNICATIONS, INC.
By:
------------------------------------------------
Name:
Title:
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SCHEDULE A
Fees
*
Confidential Treatment Requested and the Redacted Material has been separately
filed with the Commission. Four pages have been omitted from Schedule A
pursuant to the confidential treatment request.
A-1
<PAGE>
SCHEDULE B
Prescription Communication Services
"Prescription Communication Services" shall mean on-line transaction, messaging
and content services which connect physician offices with Payer and with
pharmacies (via the Synetic System) in order to enable physicians to write,
modify, order and renew prescriptions and review information relating to or
prompted by the selection or use of a prescription drug. Such services include
but are not limited to the following: (1) enabling physicians to conduct online
registration and identification of patients consistent with plan eligibility,
(2) enabling physicians to access medication histories, (3) enabling physicians
to write a prescription, (4) enabling physicians to review the prescription drug
relative to Payer's administrative, financial or clinical rules, (5) providing
online messages, alerts, advisories and other notifications to and from
physicians, particularly when medication treatment is at variance to Payer's
rules, (6) enabling physicians to select and route prescriptions to a pharmacy
(where permitted by laws and regulations), and (7) enabling physicians to
authorize a new or renewal prescription or modify an existing prescription.
The following is a description of the various functions of such services:
1. Registration and identification: Host Payer eligibility files and present
such files to End-Users in order to enable End-Users to register patients and
conduct services specific to the patient and Payer-specific rules.
2. Patient medication histories: Host patient medication histories and present
such histories to End-Users in order to enable End-Users to conduct services
specific to the patient and Payer-specific rules.
3. Clinical, financial and administrative rules: Host and display Payer-specific
formularies, drug utilization review, treatment guidelines and other rules
and present End-Users with alerts and/or advisories relevant to such rules.
Payer must approve all alerts and advisories with respect to both the
criteria that trigger them and their content.
4. Consent: Require End-Users to obtain the appropriate level of patient consent
when using the Synetic System to request any confidential patient
information; capture and store all representations by End-Users.
5. Pharmacy directory: Host and present End-Users with a list of Payer-specific
pharmacies for the purpose of automating the transmission of either messages
and/or prescriptions to pharmacies, where permitted by law.
6. Messages: Present End-Users with Payer and patient-specific messages posted
to a Message Center, which include but are not limited to patient-specific
alerts and advisories (e.g., renewals, interchanges) and broadcast messages
(e.g., common message intended for many End-Users).
7. Content: Host Payer-specific formularies, treatment guidelines, pharmacy
directories and other related information and provide End-Users the ability
to search, browse and store such information.
B-1
<PAGE>
SCHEDULE C
Laboratory Communication Services
"Laboratory Communication Services" shall mean on-line transaction, messaging
and content services which connect physician offices with Payer and with
clinical laboratories (via the Synetic System) in order to enable physicians to
write, modify and order laboratory tests, view laboratory test results, and
review information relating to or prompted by the selection of a laboratory
test. Such services include but are not limited to the following: (1) enabling
physicians to conduct registration and identification of patients consistent
with plan eligibility, (2) enabling physicians to access lab results histories,
(3) enabling physicians to write a lab order, (4) enabling physicians to review
the lab order relative to Payer's administrative, financial or clinical rules,
(5) providing messages, alerts, advisories and other notifications to and from
physicians, particularly when lab treatment is at variance to Payer's rules, (6)
enabling physicians to authorize and route lab orders to a clinical laboratory
(where permitted by laws and regulations), (7) enabling laboratories to route
lab results to physicians, and (8) interpreting lab results.
The following is a description of the various functions of such services:
1. Registration and identification: Host Payer eligibility files and present
such files to End-Users in order to enable End-Users to register patients and
conduct services specific to the patient and Payer-specific rules.
2. Patient-laboratory histories: Host patient laboratory histories, where
available, and present such histories to End-Users.
3. Clinical, financial and administrative rules: Host and present Payer-specific
treatment guidelines, order sets and other rules and present End-Users with
alerts and/or advisories relevant to such rules. Payer must approve all
alerts and advisories with respect to both the criteria that trigger them and
their content.
4. Consent: Require End-Users to obtain the appropriate level of patient consent
when using the Synetic System to request any confidential patient
information; capture and store all representations by End-Users.
5. Laboratory directory: Host and present End-Users with a list of
Payer-specific laboratories for the purpose of automating the transmission of
either messages and/or lab orders to laboratories, where permitted by law.
6. Messages: Present End-Users with Payer and patient-specific messages posted
to a Message Center, which include but are not limited to both
patient-specific alerts and advisories and broadcast messages (e.g., common
message intended for many End-Users).
7. Content: Host Payer-specific treatment guidelines, laboratory directories and
other related information and provide End-Users the ability to search, browse
and store such information.
C-1
<PAGE>
SCHEDULE D
Payer-Supplied Information
PRESCRIPTION COMMUNICATION SERVICES INFORMATION:
1. Eligibility files: files which enable End-Users to identify and register
patients, and conduct services specific to the patient and Payer-specific
rules (to be provided no less than monthly). Where the PCP/patient
relationship is relevant, rosters of patients assigned to each primary care
provider.
2. Patient dispensed-medication history files: at Payer's option, patient
dispensed-medication histories for presentation to End-Users (to be provided
no less than monthly). Payer assumes responsibility for the quality and
accuracy of such histories.
3. Clinical, financial and administrative rules: formularies, treatment
guidelines, drug utilization review, as well as relevant plan designs and
other related information, to enable End-Users to conduct transactions
consistent with Payer-specific rules.
4. Pharmacy directory: lists of available pharmacies by plan so that
prescriptions and/or messages can be routed to the patient's Payer-specific
pharmacy of choice, where permitted by law.
5. Messages: messages for transmission to End-Users, which include but are not
limited to patient-specific alerts and advisories (e.g., retrospective drug
utilization review, renewals, interchanges) and broadcast messages (e.g.,
common messages intended for many End-Users).
6. Content: Payer-specific content which provides End-Users the ability to
conduct transactions specific to Payer-specific rules and search, browse and
store such information. Initial content from Payer will include Payer
formularies, treatment guidelines, pharmacy directories and other related
information.
7. Test files: representative sample data sets for eligibility, group/plan
identification, provider directories, medication and lab histories, messages
and content.
8. Patient Plan files: files necessary to ensure patients can be associated with
the appropriate plan rules.
9. Interface, message and connectivity specifications: specifications required
to establish communications to Payer System or its designated surrogate for
the purpose of patient identification and receipt of patient histories and
messages.
LABORATORY COMMUNICATION SERVICES INFORMATION:
1. Eligibility files: files which enable End-Users to identify and register
patients, and conduct services specific to the patient and Payer-specific
rules (to be provided no less than monthly). Where the PCP/patient
relationship is relevant, rosters of patients assigned to each primary care
provider.
2. Patient-laboratory histories: at Payer's option, patient laboratory histories
for presentation to End-Users, where available. Payer assumes responsibility
for the quality and accuracy of such histories.
D-1
<PAGE>
SCHEDULE D
(continued)
Payer-Supplied Information
3. Clinical, financial and administrative rules: order sets, treatment
guidelines, reflexive testing algorithms, as well as relevant plan designs
and other related information, to enable End-Users to conduct transactions
consistent with Payer-specific rules.
4. Laboratory directory: lists of available laboratories by plan so that orders
and/or messages can be routed to the patient's Payer-specific laboratory of
choice, where permitted by law.
5. Messages: messages for transmission to End-Users, which include but are not
limited to patient-specific alerts and advisories (e.g., retrospective lab
utilization review) and broadcast messages (e.g., common messages intended
for many End-Users.
6. Content: Payer-specific content which provides End-Users the ability to
conduct transactions specific to Payer-specific rules and search, browse and
store such information. Initial content from Payer will include Payer order
sets, treatment guidelines, laboratory directories and other related
information.
7. Test files: representative sample data sets for eligibility, group/plan
identification, provider directories, medication and lab histories, messages
and content.
8. Patient Plan files: files necessary to ensure patients can be associated with
the appropriate plan rules.
9. Interface, message and connectivity specifications: specifications required
to establish communications to Payer System or its designated surrogate for
the purpose of patient identification and receipt of patient histories and
messages.
D-2
<PAGE>
SCHEDULE E
Financial Warranty
*
Confidential Treatment Requested and the Redacted Material has been separately
filed with the Commission. Two pages have been omitted from Schedule E
pursuant to the confidential treatment request.
E-1
<PAGE>
SCHEDULE E
(continued)
Financial Warranty
*
Confidential Treatment Requested and the Redacted Material has been separately
filed with the Commission. Two pages have been omitted from Schedule E
pursuant to the confidential treatment request.
E-2
<PAGE>
SCHEDULE F
Synetic Insurance
Coverage Limits Insurance Company
Umbrella Policy $15,000,000 Crum & Forster
Professional Liability $5,000,000 Evanston Insurance Group
(e.g., "errors and omissions")
General Liability Crum & Forster
-- General aggregate $2,000,000
-- Personal $1,000,000
-- Each occurrence $1,000,000
-- Fire damage $50,000
-- Medical expense $5,000
-- Auto liability $1,000,000
-- Employee benefit $1,000,000
Commercial Crime $3,000,000 Gulf Insurance Co.
(employee theft, etc.)
Property $5,000,000 Crum & Forster
(location of Synetic's
Clinical Transaction system)
Workers' Compensation Statutory Crum & Forster
Employers Liability $1,000,000 per Crum & Forster
accident/disease
F-1
<PAGE>
SCHEDULE G
Performance Standards
SYNETIC PERFORMANCE STANDARDS
GENERAL ASSUMPTIONS
1. The success/failure of each service level objective set forth below will
be determined on the basis of a quarterly average. Service level
objectives will be measured and reported on a monthly basis.
2. There will be a ninety (90) day grace period on reliability measurements
when scheduled major upgrades to either the THINC Network or the Synetic
System occur.
SERVICE CHANGE PROCEDURE
1. The Synetic Relationship Manager and the Payer Relationship Manager will
be responsible for addressing any changes to this schedule.
2. Modifications to any performance standards or to this document, and all
requests as set forth in the previous paragraph will require the review
and approval of both parties.
CONNECTIVITY
Synetic will support connectivity to End-Users via:
1. Dial-up via 28.8, 33.6 or 56 kbps modem
2. Dial-up via ISDN; or
3. Dedicated line (56 kbps up to T-1).
Clinical Transactions will be available to End-User desktop workstations that
are:
1. Intel based: Windows 95, Windows NT 4.0, Windows 98
2. Synetic's standard browser: Microsoft Internet Explorer 4.0+, which
may utilize one or more plug-ins or applets provided by Synetic
SYNETIC SYSTEM AND THINC NETWORK AVAILABILITY
Synetic will provide End-Users access to Clinical Transaction Services, which
Clinical Transactions Services will be available seven days a week, twenty-four
hours a day, 365 days a year excluding regularly scheduled down-time for
maintenance. The Synetic System (accessed through the THINC Network) will have
an effective rate of 99.5% availability. Measurement will be based on data from
the availability logs of the THINC Network and the Synetic System. Scheduled
outages are not included when calculating the service level objective. The
foregoing availability measurement is exclusive of availability of all
interfaces and connections from the Payer System to the THINC Network, as well
as the availability of the Payer System or the system of any affiliated
organization (e.g., PBMs).
If, for any reason, the Clinical Transaction Services are unavailable other than
by reason of a scheduled
G-1
<PAGE>
SCHEDULE G
(continued)
Performance Standards
downtime, if such unavailability is due to an outage in the Synetic System of
the THINC Network, Synetic will (or will cause THINC to):
1. Make its reasonable commercial efforts to restore all services
with minimum outage,
2. Escalate resources to aid in resolution, if the outage persists
for longer than one (1) hour, and
3. Provide information messages to End-Users including the time that
availability is expected again.
Access to the Internet and World Wide Web
Synetic will provide an Internet service connection and IP addresses for
End-Users that is available on a 24 hours a day, 7 days a week, 365 days a year
basis. Such Internet accessibility (accessed by an End-User through the Synetic
System and the THINC Network) will have an effective rate of 99.5% availability.
Synetic shall monitor traffic and performance, and take appropriate preemptive
action (such as adding bandwidth, upgrading, or redesigning the access points)
to insure satisfactory performance and reliability.
NETWORK DOWNTIME
Required downtimes for both THINC Network and Synetic System backup will be
scheduled by Synetic at times as have been demonstrated (through past usage
records) to (i) interfere minimally with Payer's use of or access to the
Clinical Transaction Services and (ii) proceed without significant degradation
during such downtimes of performance of THINC Network and Synetic System
pursuant to these standards, though such downtimes shall not affect performance
criteria. Except in the event of unforeseen or emergency repair circumstances,
notice of the schedule of downtimes for the THINC Network and the Synetic System
will be provided to Payer in writing at least seven (7) days prior to such
downtime.
HELP DESK AVAILABILITY STANDARDS
1. Synetic shall staff a central point of telephone support to provide
End-Users, THINC's help desk, or others as appropriate with assistance
throughout the Term (the "Synetic Help Desk").
2. End-User calls will be placed to the THINC Help Desk. End-Users will be
provided a toll-free telephone number. Issues associated with Clinical
Transaction Services will be referred to the Synetic Help Desk.
3. Both THINC's and Synetic's Help Desks will use a problem tracking system
(PTS) to manage problem resolution. Synetic's Help Desk staff will be
professional and trained so as to handle issues associated with the
Synetic System and the Clinical Transaction Services.
4. Synetic will provide coverage seven (7) days a week, twenty four (24)
hours a day, 365 days per
G-2
<PAGE>
SCHEDULE G
(continued)
Performance Standards
year to respond to referred telephone calls.
5. During "normal working hours", defined as 8:00 am to 8:00 p.m. Eastern
Standard Time or Eastern Daylight Time, as applicable, Monday through
Friday, and Saturday from 9:00 am to 4:00 p.m.], the Synetic Help Desk
will answer all calls by the fourth (4th) ring. The Synetic Help Desk
personnel will resolve all telephone calls that can be resolved at the
Synetic Help Desk level.
6. Telephone calls received during normal working hours that cannot be
resolved at the Synetic Help Desk level will be assigned to the
appropriate Synetic technician.
7. Regarding calls received during normal working hours which the Synetic
Help Desk staff or the Synetic technician has determined that the caller's
issue can be resolved remotely, ninety-five percent (95%) of such calls
shall be resolved by Synetic via remote access in less than eight (8)
business hours from such determination.
8. Telephone calls received by the Synetic Help Desk outside the timeframe
defined as "normal working hours" will be forwarded to the appropriate
Synetic technical staff within four (4) hours after the telephone call is
received. Within this four hour time period, Synetic will notify the
caller of the name of the Synetic technician who has been assigned to the
problem.
9. If Synetic fails to notify the caller within the agreed upon time as to
who has been assigned to the problem, the caller will place a second
telephone call to the Synetic Help Desk and ask that the problem be
immediately escalated to the next level.
G-3
EXECUTION COPY
CLINICAL TRANSACTION AGREEMENT
Between
SYNETIC HEALTHCARE COMMUNICATIONS, INC.
and
HEALTH INSURANCE PLAN OF GREATER NEW YORK
Pages where confidential treatment has been requested are stamped "Confidential
Treatment Requested and the Redacted Material has been separately filed with
the Commission", and the confidential section has been marked in the margin
with a star (*).
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS............................................................... 1
2. SYNETIC RESPONSIBILITIES.................................................. 3
3. PAYER RESPONSIBILITIES.................................................... 4
4. DEPLOYMENT AND IMPLEMENTATION............................................. 5
5. INTELLECTUAL PROPERTY AND LICENSES........................................ 6
6. PERFORMANCE............................................................... 7
7. FEES AND CHARGES.......................................................... 8
8. LIMITATION OF LIABILITY AND REMEDIES...................................... 8
9. INDEMNITIES............................................................... 9
10. TERM OF AGREEMENT........................................................ 10
11. TERMINATION OF AGREEMENT................................................. 10
12. DISPUTE RESOLUTION AND ARBITRATION....................................... 11
13. SECURITY, CONFIDENTIALITY AND DATA....................................... 11
14. GENERAL.................................................................. 12
SCHEDULE A - Fees............................................................A-1
SCHEDULE B - Prescription Communication Services.............................B-1
SCHEDULE C - Laboratory Communication Services...............................C-1
SCHEDULE D - Payer-Supplied Information......................................D-1
SCHEDULE E - Financial Warranty..............................................E-1
SCHEDULE F - Synetic Insurance...............................................F-1
SCHEDULE G - Performance Standards...........................................G-1
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CLINICAL TRANSACTION AGREEMENT
This Agreement is entered into as of this 1st day of January, 1999, by and among
Health Insurance Plan of Greater New York, a corporation with offices at 7 West
34th Street, 12th Floor, New York, New York 10001 ("Payer"), and Synetic
Healthcare Communications, Inc., a Delaware corporation having its principal
place of business at River Drive Center 2, 669 River Drive, Elmwood Park, New
Jersey 07407-1361 ("Synetic").
WHEREAS, Synetic desires to provide to Payer, on an exclusive basis,
certain on-line prescription and laboratory transaction, messaging and
content/reference services described in this Agreement as Clinical Transaction
Services;
WHEREAS, Payer desires that Synetic provides such services, all on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises made, the
terms and conditions hereunder described and other valuable consideration, the
parties agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings indicated
unless the context clearly requires otherwise:
1.1 Agreement. "Agreement" shall refer to the terms and conditions set
forth herein and in the Schedules attached hereto, which are hereby made an
integral part of this Agreement and shall be read as if included within the text
of this Agreement.
1.2 Clinical Transaction Services. "Clinical Transaction Services" shall
mean the Prescription Communication Services and the Laboratory Communication
Services.
1.3 Confidential Information. "Confidential Information" shall have the
meaning set forth in Section 13.2.
1.4 Cure Period. "Cure Period" shall have the meaning set forth in Section
11.1.
1.5 Current Payer-Member. "Current Payer-Member" shall mean each of Payer,
Empire Blue Cross and Blue Shield and Group Health Incorporated.
1.6 Damages. "Damages" shall have the meaning set forth in Section 9.1.
1.7 Debtor Relief Law. "Debtor Relief Law" shall have the meaning set forth
in Section 11.2.1
1.8 Effective Date. "Effective Date" shall mean the date in this Agreement
first written above.
1.9 End-User. "End-User" shall mean a physician or other healthcare
provider or staff thereof, who is an authorized and registered user of any of
the Clinical Transaction Services.
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<PAGE>
1.10 Healthcare-Payer. "Healthcare-Payer" shall mean an insurer or other
payer of health-related claims.
1.11 Indemnified Party. "Indemnified Party" shall have the meaning set
forth in Section 9.3.1.
1.12 Indemnifying Party. "Indemnifying Party" shall have the meaning set
forth in Section 9.3.1.
1.13 IT. "IT" shall have the meaning set forth in Section 2.4.
1.14 Laboratory Communication Services. "Laboratory Communication Services"
shall mean on-line transaction, messaging and content services which connect
physician offices with Payer and with clinical laboratories (via the Synetic
System) in order to enable physicians to write, modify and order laboratory
tests, view laboratory test results, and review information relating to or
prompted by the selection of a laboratory test, as such services are more fully
described in Schedule C.
1.15 Lab Project Plan. "Lab Project Plan" shall have the meaning set forth
in Section 4.2.
1.16 Member. "Member" shall mean any member, including without limitation
any Payer-Member, of THINC.
1.17 Payer Data. "Payer Data" shall have the meaning set forth in Section
13.3.
1.18 Payer Marks. "Payer Marks" shall have the meaning set forth in Section
5.4.
1.19 Payer-Member. "Payer-Member" shall mean a Healthcare-Payer who is or
becomes a Member, including without limitation the Current Payer-Members.
1.20 Payer Proprietary Materials. "Payer Proprietary Materials" shall have
the meaning set forth in Section 5.1.
1.21 Payer Relationship Manager. "Payer Relationship Manager" shall have
the meaning set forth in Section 3.12.
1.22 Payer-Supplied Information. "Payer-Supplied Information" shall mean
such information described in Schedule D.
1.23 Payer System. "Payer System" shall mean the facilities, computer
hardware and software and the communications network, which Payer shall employ
to utilize the Clinical Transaction Services.
1.24 PBM. "PBM" shall mean pharmaceutical benefit manager.
1.25 Performance Standards. "Performance Standards" shall mean the
procedures and standards set forth in Schedule G attached hereto for the
Clinical Transaction Services and the Synetic System.
1.26 Person. "Person" shall mean a natural person, corporation, limited
liability company, association, joint stock company, limited partnership,
general partnership, proprietorship, trust, self-regulatory organization or
other entity, enterprise authority or business organization.
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1.27 Prescription Communication Services. "Prescription Communication
Services" shall mean on-line transaction, messaging and content services which
connect physician offices with Payer and with pharmacies (via the Synetic
System) in order to enable physicians to write, modify, order and renew
prescriptions and review information relating to or prompted by the selection or
use of a prescription drug, as such services are more fully described in
Schedule B.
1.28 Prescription Project Plan. "Prescription Project Plan" shall have the
meaning set forth in Section 4.2.
1.29 Project Plan. "Project Plan" shall have the meaning set forth in
Section 4.2.
1.30 Synetic Marks. "Synetic Marks" shall have the meaning set forth in
Section 5.3.
1.31 Synetic Proprietary Materials. "Synetic Proprietary Materials" shall
mean all software, information, data and materials provided by Synetic
hereunder, including but not limited to the Clinical Transaction Services, the
Synetic System, the Synetic Marks, all software and documentation associated
with any of the foregoing, all copyrights, trademarks, patents, trade secrets
and other intellectual property rights inherent therein or appurtenant thereto
and any modifications, enhancements, updates and upgrades thereto, all as owned
or licensed by Synetic as of the Effective Date or thereafter created, designed,
developed or licensed by Synetic, its employees or agents.
1.32 Synetic Relationship Manager. "Synetic Relationship Manager" shall
have the meaning set forth in Section 2.6.
1.33 Synetic System. "Synetic System" shall mean the facilities, computer
hardware and software and the communications network and related services, which
Synetic shall use to provide the Clinical Transaction Services.
1.34 Term. "Term" shall have the meaning set forth in Section 10.1.
1.35 THINC. "THINC" shall mean The Health Information Network Connection
LLC, a New York limited liability company.
2. SYNETIC RESPONSIBILITIES
2.1 Provision of Clinical Transaction Services. Synetic shall provide to
Payer the Clinical Transaction Services, in accordance with the terms and
conditions set forth in this Agreement, for the fees set forth in Section 7.
2.2 Connections. Synetic will provide the high speed telecommunications
connections and supporting equipment required to maintain connectivity between
the Synetic System and the Payer System for the Clinical Transaction Services.
Synetic and Payer will share equally the costs of such connections and
supporting equipment.
2.3 End-User Services. Synetic shall provide certain End-User training,
implementation, marketing and support services for use of the Clinical
Transaction Services.
2.4 Synetic Implementation and Support. Synetic will provide appropriate
information technology ("IT") management for project planning and execution.
Synetic will institute an appropriate internal chain of command for escalating
IT issues regarding development or implementation priorities.
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Synetic will provide appropriate response to technical inquiries or service
issues from Payer's designated technical personnel.
2.5 Laws and Regulations. Synetic will meet all applicable legal and
regulatory requirements with regard to the transmission of confidential patient
data and electronic prescriptions. Synetic shall comply in all material respects
with applicable laws and regulations relating to performance of its obligations
hereunder.
2.6 Synetic Relationship Manager. Synetic will appoint a relationship
manager (the "Synetic Relationship Manager") to manage the relationship
established by this Agreement who will (a) coordinate and monitor Synetic's
obligations under this Agreement, and (b) serve as the primary liaison with the
Payer Relationship Manager.
3. PAYER RESPONSIBILITIES
3.1 Exclusive Grant. Payer agrees that Synetic shall have the sole and
exclusive right to implement, deliver, support, provide, maintain or make
available to or on behalf of Payer any or all of the Clinical Transaction
Services, except as provided in Schedules B and C. Without limitation of the
foregoing, Payer shall not, directly or indirectly, endorse, advertise, promote,
implement, access, use, deliver, support or license or contract for any service
or software that implements, supports, provides or mediates any aspect of the
Clinical Transaction Services, either synchronously or asynchronously, except as
provided in Schedules B and C. Payer acknowledges that Synetic will provide
Clinical Transaction Services to other Healthcare-Payers, and that the Synetic
System and the Clinical Transaction Services will be open to all
Healthcare-Payers and healthcare providers.
3.2 Connections and Interfaces. Payer shall establish all interfaces to the
Synetic System from the Payer System and modify the Payer System to provide
additional capabilities as are reasonably necessary for the proper use of the
Clinical Transaction Services. Payer shall establish such interfaces as soon as
practicable pursuant to, and, in any case, not later than the dates specified
in, the Project Plan.
3.3 Payer-Supplied Information. Payer agrees to provide to Synetic, either
directly or through a surrogate (e.g., PBM) designated by Payer, the
Payer-Supplied Information and other content, in a form, manner and frequency to
be mutually agreed upon and set forth in the Project Plan, as is reasonably
necessary for Synetic to provide to Payer the Clinical Transaction Services.
3.4 Support of Synetic's Marketing Efforts. Payer agrees to actively
endorse and support Synetic's efforts to market the Clinical Transaction
Services. Payer shall identify Synetic as Payer's exclusive provider of the
Clinical Transaction Services. Payer will provide Synetic access to and liaison
with Payer's product marketing department/division and all other Payer marketing
resources so as to fully cooperate with the marketing and sales activities of
Synetic.
3.5 Payer-Physician Communications. Payer will communicate to its
participating, and prospective participating, physicians regarding the
advantages of utilizing the Clinical Transaction Services by integrating such
announcements into all appropriate Payer-to-physician communications.
3.6 Marketing of Clinical Transaction Services. Payer shall use its best
efforts to develop prescription and lab management programs aimed at maximizing
adoption of the Clinical Transaction Services. Payer agrees to use best efforts
to promote and market the Clinical Transaction Services to its customers.
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<PAGE>
3.7 Physician Data. As soon as practicable, and in any case not later than
thirty (30) days after the Effective Date, Payer will provide Synetic with a
list of, and detailed data regarding, target "high prescribing" and "high lab
test ordering" physicians, to support targeted sales efforts, such data to be in
a form, manner and frequency to be agreed upon. Payer will also provide Synetic
with updates to such data from time to time.
3.8 Payer Implementation and Support. Payer will provide Synetic with all
access to and support from Payer technical resources as is deemed reasonably
necessary by Synetic in connection with the operation of and connectivity
between the Synetic System and the Payer System, and for testing, certifying,
implementing and updating all Payer System interfaces and all software related
to the Clinical Transaction Services. Without limitation of the foregoing, Payer
will ensure commitment of Payer's internal IT resources and personnel to the
implementation of the Project Plan. Payer will provide Synetic with appropriate
IT management assistance for project planning and execution. Payer will
institute an appropriate internal chain of command for escalating IT issues
regarding development or implementation of the Clinical Transaction Services.
Payer will provide appropriate response to technical inquiries or customer
service issues from the Synetic Help Desk or Synetic technical support
personnel.
3.9 Payer System. Payer shall be responsible for acquiring, operating and
maintaining the Payer System, as may be reasonably necessary for the proper use
of the Clinical Transaction Services.
3.10 Performance Problems. Payer shall promptly report to Synetic any
performance problems relating to the Clinical Transaction Services.
3.11 Laws and Regulations. Payer shall comply in all material respects with
all applicable laws and regulations relating to performance of its obligations
hereunder.
3.12 Payer Relationship Manager. Payer will appoint a relationship manager
to manage the relationship established by this Agreement (the "Payer
Relationship Manager") who will (a) coordinate and monitor Payer's obligations
under this Agreement, and (b) serve as the primary liaison with the Synetic
Relationship Manager.
3.13 Plan Members. Payer represents to Synetic that, as of the Effective
Date, Payer provides medical health insurance benefits to at least 800,000 plan
members.
4. DEPLOYMENT AND IMPLEMENTATION
4.1 Deployment and Implementation Activities. Each of the parties shall
perform its respective duties and obligations regarding deployment and
implementation of the Clinical Transaction Services according to the plans and
within the timeframes set forth in each Project Plan established pursuant to
Section 4.2. The parties acknowledge that it may be necessary to conduct market
tests of the Clinical Transaction Services prior to pilot or full-scale
deployment. In addition, the parties acknowledge that the timely deployment and
implementation of the Clinical Transaction Services will require the full
cooperation of the parties and that the ability of each party to perform its
duties and obligations with respect to the Clinical Transaction Services may be
dependent on the other party's performance of its duties and obligations.
4.2 Project Plans. Payer and Synetic will develop, within one hundred
twenty (120) days from the Effective Date, or such longer period as is necessary
for the completion of such plan, a detailed project plan, which will contain the
development and technical implementation schedule, pilot timeframe, and
production availability/timeframe of the deployment of the Prescription
Communication
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Services (the "Prescription Project Plan"). Following completion of the
Prescription Project Plan, Payer and Synetic will develop, within one hundred
eighty (180) days from such completion of the Prescription Project Plan, or such
longer period as is necessary for the completion of such plan, a detailed
project plan, which will contain the development and technical implementation
schedule, pilot timeframe, and production availability/timeframe of the
deployment of the Laboratory Communication Services (the "Lab Project Plan",
and, together with the Prescription Project Plan, the "Project Plan").
Notwithstanding the foregoing, Synetic and Payer may commence the development
work described in Section 4.3 prior to the completion of the Lab Project Plan.
The Project Plan will address key Payer requirements, as well as generic product
functionality issues (i.e., bar coding and deployment of bar coding equipment,
sorting of patient specimens between multiple clinical labs, etc.). The
completed Prescription Project Plan and Lab Project Plan shall be attached to,
and shall become a part of, this Agreement. Any changes to a Project Plan must
be mutually agreed to in writing by the parties. Each party acknowledges and
agrees that such changes may require changes in performance deadlines for
Synetic and/or Payer, and that the failure by one party to meet the requirements
set forth in either Project Plan may require changes in the performance
deadlines for the other party.
4.3 Development Partner. Synetic will designate Payer as a Synetic
development partner for the Clinical Transaction Services. Specifically:
4.3.1 Payer will pilot the Laboratory Communication Services with
Payer's laboratory subsidiary, Centralized Laboratory Services, Inc.
("CLS"), and End-Users in Payer's owned and leased facilities.
4.3.2 Payer will pilot the Prescription Communication Services with
End-Users in Payer's owned and leased facilities, and as permitted by
applicable laws and regulations, with Payer's owned pharmacies.
4.3.3 Synetic agrees to work closely with Payer on the development of
the lab product and implementation specifications.
4.3.4 Payer agrees to implement the Prescription Communication
Services for all End-Users within Payer's owned and leased sites as soon as
is reasonably practicable.
4.3.5 Synetic will waive all program set up and annual maintenance
costs associated with the Prescription Communication Services and the
Laboratory Communication Services for the first two (2) years of the Term.
5. INTELLECTUAL PROPERTY AND LICENSES
5.1 Payer System. Subject to the terms of this Agreement, Payer hereby
grants to Synetic the right to access and use the Payer System and any other
Payer-owned or licensed systems and technology, software, proprietary elements,
documentation, records and trade secrets or know-how (including, without
limitation, the Payer Data and the Payer-Supplied Information) (collectively the
"Payer Proprietary Materials") as necessary to enable Synetic to perform its
responsibilities hereunder, including but not limited to providing the Clinical
Transaction Services. Payer shall obtain, and Synetic will cooperate with Payer
in obtaining, any necessary consents, licenses and approvals from Payer's
licensors or other providers with respect to Synetic's use of the Payer
Proprietary Materials as contemplated hereunder.
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5.2 Synetic System. Synetic hereby grants to Payer the right to use and
access the Synetic System and the Clinical Transaction Services as necessary to
enable Payer to perform its responsibilities hereunder. Synetic shall obtain,
and Payer will cooperate with Synetic in obtaining, any necessary consents,
licenses and approvals of Synetic's licensors or other providers with respect to
Payer's use of the Synetic System and the Clinical Transaction Services.
5.3 Synetic Marks. Synetic hereby grants to Payer the right to use the
Synetic trademarks, corporate and trade names and logos, and other appropriate
branding (collectively, the "Synetic Marks") in connection with and for the
marketing and promotion of the Clinical Transaction Services. Synetic will have
the right to approve in writing the use of the Synetic Marks in any written
communication materials prior to publication.
5.4 Payer Marks. Payer hereby grants to Synetic the right to use Payer's
trademarks, corporate and trade names and logos, and other appropriate branding
(collectively, the "Payer Marks") in connection with and for the marketing and
promotion of the Clinical Transaction Services, including without limitation, in
sales/marketing collateral, on computer screens, and via other communications
media, such as monthly Synetic-hosted physician seminars. Payer will have the
right to approve in writing the use of the Payer Marks in any written
communication materials prior to publication.
5.5 Limitations. Neither party shall have the right to sublicense, assign
or otherwise transfer the rights granted to it by the other under this Section
5, except as provided in Section 14.10.
5.6 Rights of Synetic. Payer acknowledges and agrees that, as between Payer
and Synetic, all right, title and interest in and to the Synetic Proprietary
Materials shall remain the sole and exclusive property of Synetic. All rights to
patents, copyrights, trademarks, service marks, trade secrets, know-how and
methodologies relating to the Synetic Proprietary Materials and Synetic's
performance of the Clinical Transaction Services under this Agreement belong
exclusively to, and shall at all times remain with, Synetic. All rights therein
not explicitly licensed to Payer herein, whether now existing or which may
hereafter come into existence, including without limitation rights in all media
and formats addressed herein and in media and formats other than those addressed
herein, are reserved exclusively to Synetic.
5.7 Rights of Payer. Synetic acknowledges and agrees that, as between Payer
and Synetic, all right, title and interest in and to the Payer Proprietary
Materials and the Payer Marks, shall remain the sole and exclusive property of
Payer.
6. PERFORMANCE
6.1 Manner of Performance. Synetic undertakes to perform the Clinical
Transaction Services in a professional and businesslike manner. In addition,
Synetic warrants that such Clinical Transaction Services will be performed, and
the Synetic System will be managed, in accordance with the Performance Standards
set forth in Schedule G.
6.2 NO WARRANTIES. EXCEPT AS SO PROVIDED IN SECTION 6.1, NEITHER SYNETIC
NOR ANY OF ITS AFFILIATES, EMPLOYEES, OFFICERS, DIRECTORS, AGENTS OR LICENSORS
MAKES, AND PAYER RECEIVES, NO WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR
ALLEGEDLY EXTENDED IN ANY COMMUNICATION WITH PAYER, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR A PARTICULAR PURPOSE OR
WARRANTY THAT THE CLINICAL TRANSACTION SERVICES PROVIDED TO PAYER UNDER THIS
AGREEMENT SHALL BE UNINTERRUPTED OR ERROR-FREE, NOR DO THEY WARRANT THAT CERTAIN
RESULTS
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MAY BE OBTAINED BY PAYER OR AN END-USER IN CONNECTION WITH EITHER'S USE
OF THE CLINICAL TRANSACTION SERVICES. ALL SERVICES AND PRODUCTS (INCLUDING THE
CLINICAL TRANSACTION SERVICES AND THE SYNETIC SOFTWARE) ARE PROVIDED ON AN "AS
IS" BASIS.
7. FEES AND CHARGES
7.1 Clinical Transaction Services Fees. Payer agrees to pay to Synetic the
Clinical Transaction Services fees and other fees set forth in Schedule A.
7.2 Financial Warranty. Synetic will provide to Payer the financial
warranty regarding the Prescription Communication Services as set forth in
Schedule E. Payer agrees to provide Synetic with such information as is
reasonably sufficient to enable Synetic to verify Payer's actual savings
pursuant to Schedule E.
7.3 Costs of Performance. Unless otherwise specified herein, Synetic and
Payer will each bear its respective costs of performance under this Agreement.
7.4 Timeliness of Payment. Payer shall pay all fees to Synetic as described
in this Section 7 and Schedule A within thirty (30) days after receipt of an
invoice therefor, except for fees disputed in good faith. Payer shall also pay
to Synetic interest at a rate of one percent (1%) of the invoice amount for each
thirty (30) day period, or portion thereof, for which timely payment has not
been made.
7.5 Beta Tests. Synetic agrees that Payer will not be charged Clinical
Transaction Services fees in connection with any beta tests conducted by
Synetic.
7.6 Taxes. Payer will pay to Synetic amounts equal to any taxes, however
designated or levied, based upon any charges under this Agreement, or upon this
Agreement or the services or materials provided hereunder, or Payer's use
thereof, including state and local sales, use, privilege or excise taxes based
on gross revenue, and any taxes or amounts in lieu thereof paid or payable by
Synetic in respect of the foregoing, but excluding any franchise taxes, taxes
based on the adjusted gross income of Synetic, and employee withholding, FICA,
and other taxes relating to Synetic personnel performing services hereunder.
8. LIMITATION OF LIABILITY AND REMEDIES
8.1 DISCLAIMER OF DAMAGES. EXCEPT TO THE EXTENT PROVIDED IN SECTION 9,
NEITHER SYNETIC NOR PAYER WILL BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES ARISING UNDER THIS AGREEMENT,
INCLUDING BUT NOT LIMITED TO LOSS OF DATA, INTEREST, ANTICIPATED SAVINGS,
REVENUES OR PROFITS, OR INTERRUPTION OF BUSINESS, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES. THE LIMITATIONS OF
LIABILITY IN THIS SECTION SHALL APPLY REGARDLESS OF THE FORM OF ACTION, WHETHER
IN CONTRACT, TORT (INCLUDING NEGLIGENCE OF ANY KIND, WHETHER ACTIVE OR PASSIVE),
WARRANTY, STRICT LIABILITY OR ANY OTHER LEGAL OR EQUITABLE GROUNDS. EXCEPT TO
THE EXTENT PROVIDED IN SECTION 9, ALL REMEDIES AVAILABLE TO SYNETIC AND PAYER
SHALL BE LIMITED TO (I) INJUNCTIVE RELIEF (WHERE APPROPRIATE), (II) SUCH PARTY'S
ACTUAL DIRECT MONEY DAMAGES IN AN AGGREGATE AMOUNT FOR THE TERM NOT TO EXCEED
FEES PAYABLE BY PAYER TO
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SYNETIC DURING THE TWELVE (12) MONTHS IMMEDIATELY PRIOR TO THE CLAIM TO WHICH
SUCH DAMAGES RELATE, AND (III) ANY UNPAID OR UNREIMBURSED FEES AND COSTS.
8.2 ESSENTIAL ELEMENTS. THE PARTIES ACKNOWLEDGE THAT THE FOREGOING
DISCLAIMER AND LIMITATIONS OF LIABILITY ARE ESSENTIAL ELEMENTS OF THIS
AGREEMENT.
9. INDEMNITIES
9.1 Performance Indemnity. Each party hereby agrees to indemnify, defend
and hold harmless the other party, such other party's parent, subsidiaries, and
affiliates and their respective officers, directors, employees and agents, from
and against any and all third-party claims, actions, suits, demands,
proceedings, obligations and liabilities, damages, losses, judgments and
expenses (including costs of collection, attorneys' fees and other costs of
defense) (collectively "Damages") arising out of or resulting from the first
party's performance or non-performance of its obligations hereunder.
9.2 Exception. The indemnities set forth in Section 9.1 will not apply to
the extent that the party claiming indemnification was responsible for giving
rise to the matter upon which the claim for indemnification is based.
9.3 Indemnification Procedures.
9.3.1 A party seeking indemnification under this Agreement (an
"Indemnified Party") for a claim by a third party shall promptly notify the
other party (the "Indemnifying Party") in writing of the commencement, or
threatened commencement, of any civil, criminal, administrative or
investigative action or proceeding involving a claim for indemnification
under this Agreement. The Indemnifying Party shall have sole control over
the defense and settlement of such claim, provided that, within thirty (30)
days after receipt of the above-described notice, the Indemnifying Party
notifies the Indemnified Party of its election to so assume full control.
The foregoing notwithstanding, the Indemnified Party shall be entitled to
participate in the defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim. The Indemnifying Party
shall obtain the prior written approval of the Indemnified Party, which
shall not be unreasonably withheld, before entering into any settlement of
such claim or ceasing to defend against such claim if such settlement or
cessation would cause injunctive or other equitable relief to be imposed
against the Indemnified Party. A condition to any settlement by the
Indemnifying Party of a claim shall be that the Indemnified Party is fully
released from any liability related to the claim. After notice by the
Indemnifying Party to the Indemnified Party of its election to assume full
control of the defense of any such action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal expenses incurred by the
Indemnified Party in connection with the defense of that claim. If the
Indemnifying Party does not assume sole control over the defense of such
claim, the Indemnifying Party may participate in such defense and the
Indemnified Party shall have the right to defend the claim in such manner
as it may deem appropriate, at the cost and expense of the Indemnifying
Party. An Indemnifying Party shall not be required to indemnify an
Indemnified Party for any amount paid or payable by such Indemnified Party
in the settlement of any such claim which was agreed to without the written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld.
9.3.2 If a claim for indemnification hereunder involves a third-party
claim, the Indemnifying Party may, at its sole cost, expense and ultimate
liability regardless of the outcome,
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and through counsel of its choice, litigate, defend, settle or
otherwise attempt to resolve such claim, except that the Indemnified
Party may elect, at any time and at its sole cost, expense and
ultimate liability, regardless of the outcome, and through counsel of
its choice, to so resolve such claim, thereby waiving any right to
indemnification under this Agreement. In any event, each party shall
fully cooperate with the other and their respective counsel in
connection with any such resolution, and notwithstanding which party
is defending any such third-party claim, the other party shall have
the right to select co-counsel at its sole cost and expense and to
consult with counsel for the Indemnifying Party.
10. TERM OF AGREEMENT
10.1 Initial Term. This Agreement shall commence on the Effective Date and
extend for five (5) years after the date that the Clinical Transaction Services
are launched for Payer, which launch date will be set forth in the Project Plan
(the "Term").
10.2 Extension. Synetic shall notify Payer within six (6) months prior to
the expiration of the Term, whether Synetic desires to renew this Agreement and
of the proposed terms to govern such renewal. Not less than three (3) months
prior to such expiration, Payer shall notify Synetic whether it desires to renew
this Agreement on the terms proposed by Synetic or on other terms as may be
proposed by Payer.
11. TERMINATION OF AGREEMENT
11.1 Termination for Cause. If either party materially breaches any of its
duties or obligations hereunder, and such breach is not cured within ninety (90)
days after written notice of the breach ("Cure Period"), then the non-breaching
party may terminate this Agreement, provided that such non-breaching party
provided written notice of the breach within ninety (90) days following the date
that it first became aware of such breach. This termination right must be
exercised during the thirty (30)-day period beginning at the end of the Cure
Period.
11.2 Termination for Insolvency. If either Synetic or Payer becomes or is
declared insolvent or bankrupt, then this Agreement shall be immediately
terminated, without the requirement of any notice to the insolvent or bankrupt
party. A party shall be deemed insolvent or bankrupt for purposes of this
Section if:
11.2.1 a receiver, liquidator or trustee of a party is appointed by
court order and such order remains in effect for more than sixty (60) days,
or a case is commenced or a petition is filed against a party, and is not
dismissed or stayed within sixty (60) days, under any applicable
liquidation, conservatorship, bankruptcy, moratorium, insolvency,
reorganization or similar laws for the relief of debtors from time to time
in effect and generally affecting the rights of creditors (a "Debtor Relief
Law"); or
11.2.2 a party commences a voluntary case or voluntarily seeks,
consents to, or acquiesces in the benefit or benefits of any provision of
any Debtor Relief Law; consents to the filing of any petition against it
under such Debtor Relief Law; makes an assignment for the benefit of its
creditors; admits in writing its inability to pay its debts generally as
they become due; or consents to the appointment of a receiver, trustee,
liquidator or conservator for it or any part of its property.
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11.3 Cooperation Upon Termination. Without limiting the foregoing, upon
termination of this Agreement for any reason, each party shall assist the other
party in the orderly termination of this Agreement and the transfer of all
aspects hereof, tangible and intangible, as may be necessary for the orderly,
non-disrupted business continuation of each party.
12. DISPUTE RESOLUTION AND ARBITRATION
12.1 Dispute Resolution. Payer and Synetic will agree to use their best
efforts to resolve disputes informally and amicably. If, after negotiating for
thirty (30) days or for some longer period if the parties agree, no resolution
of a dispute is reached, Payer and Synetic will submit the dispute to binding
arbitration in New York, New York pursuant to the Commercial Arbitration Rules
of the American Arbitration Association ("AAA") and the procedures set forth in
Section 12.2.
12.2 Arbitration. All disputes that cannot be resolved pursuant to the
internal dispute resolution process identified above will be submitted to and
settled by final and binding arbitration. Any dispute which cannot be resolved
as set forth above, will be resolved by final and binding arbitration in New
York, New York by a panel of three (3) arbitrators in accordance with and
subject to the Commercial Arbitration Rules of the AAA then in effect. Following
notice of a party's election to require arbitration, each party will within
thirty (30) days select one arbitrator, and those two arbitrators will within
thirty (30) days thereafter select a third arbitrator. If the two arbitrators
are unable to agree on a third arbitrator within thirty (30) days, the AAA will
within thirty (30) days thereafter select such third arbitrator. Judgment upon
the award rendered in any such arbitration may be entered in any court of
competent jurisdiction, or application may be made to such court for a judicial
acceptance of the award and an enforcement, as the law of such jurisdiction may
require or allow. Notwithstanding the foregoing, either party may seek
injunctive relief in a court of competent jurisdiction, where appropriate, to
protect its rights pending the outcome of such arbitration.
13. SECURITY, CONFIDENTIALITY AND DATA
13.1 Security. Synetic agrees that Synetic shall provide, as part of the
Synetic System, all reasonable security measures. Synetic will establish a
security and confidentiality program and policies to protect against
unauthorized access to the Synetic System and the Payer Proprietary Materials,
which program and policies will be reviewed by an independent third party that
is a recognized expert in the area of systems security. Moreover, Synetic shall
employ reasonable system security measures to ensure that only authorized
personnel and End-Users have access to the Synetic System.
13.2 Confidentiality. "Confidential Information" shall mean information
such as proprietary lists, business plans, operation plans, plan information,
the Synetic Proprietary Materials, the Payer Proprietary Materials, and all
other materials relating to the business of Payer (including without limitation
Payer's lab utilization management rules and algorithms), Synetic, and Synetic's
and Payer's respective parent, subsidiaries, affiliates (including financial
information relating thereto). Each party hereby agrees that it and its
respective officers, employees, agents, contractors, assignees, and successors
shall (i) keep all Confidential Information received from the other party
strictly confidential, (ii) instruct its officers, employees, agents,
contractors, and permitted assignees and successors to use the same degree of
care and discretion with respect to the Confidential Information of the other
party, or of any third party utilized hereunder, that Synetic and Payer each
require with respect to their own most confidential information, (iii) use such
information solely for the purposes and in the manner set forth in this
Agreement, (iv) not disclose any such information to any other person,
corporation, governmental agency or other entity without the express written
permission of the other and (v) institute the necessary
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security policies and procedures to meet its obligations hereunder.
Notwithstanding the foregoing, the confidentiality obligations set forth in this
Section 13 will not apply to any information which the recipient party can
establish to have (x) become publicly available without breach of this
Agreement, (y) been independently developed by the recipient party outside the
scope of this Agreement and without reference to the Confidential Information
received under this Agreement, or (z) been rightfully obtained by the recipient
party from third parties which are not obligated to protect its confidentiality.
13.3 Payer Data. Synetic agrees that all Payer-identifiable data, policies,
procedures and protocols, records and documentation provided to Synetic under
this Agreement ("Payer Data"), as between Synetic and Payer, shall be owned by
Payer and shall be used by Synetic only with Payer's written consent.
Notwithstanding the foregoing, Payer acknowledges that Synetic intends to create
data products and services based on the use of the Clinical Transaction
Services. Such information services will analyze patterns and trends in the
aggregate and will not be disaggregated to a level where specific patients or
Payer will be identifiable.
13.4 Patient Information. Without limitation of the foregoing, Synetic
agrees to treat as confidential all patient-identifiable information in
accordance with applicable state and federal laws and regulations, and with all
applicable policies of Payer that are provided to Synetic in writing. Synetic
agrees that patient-identifiable clinical information collected or transmitted
through the Synetic System (including patient drug histories and lab results)
will be delivered by Synetic to a non-originating physician only when such
physician certifies that he or she has received prior written consent from the
patient, except to the extent that (i) such delivery is otherwise permitted
under applicable state and federal laws or is consistent with Payer's
then-current practices for the delivery of such information to non-originating
physicians or (ii) Payer has certified that it has obtained the requisite
written consent from the patient.
14. GENERAL
14.1 Authority. Each party represents and warrants to the other party that
(i) it has the power and authority to enter into and perform its obligations
under this Agreement, and (ii) neither the execution of this Agreement nor the
performance of its obligations hereunder will breach or result in any default
under its articles, by-laws, or other organization documents, or under any
agreement or other legally binding instrument, license or permit to which it is
a party or by which it may be bound.
14.2 Independent Contractor. Synetic, in performing its obligations under
this Agreement, is acting only as an independent contractor of Payer and the
rights and responsibilities of the parties shall be determined accordingly.
14.3 Meetings. Synetic and Payer will meet regularly to discuss performance
results relating to the Clinical Transaction Services and to address concerns
and plan future activities of Payer and Payer's customers.
14.4 Approvals and Similar Actions. Each party will cooperate with the
other by, among other things, making available, as reasonably requested by the
other, management decisions, information, approvals and acceptances in order
that each party may properly accomplish its obligations and responsibilities
hereunder.
14.5 Force Majeure. Each of Payer and Synetic will be excused from
performance of its obligations under this Agreement for any period and to the
extent that performance is prevented as a
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result of delays caused by fire, flood, interruptions of power, changes in laws
or regulations, and other events beyond its reasonable control.
14.6 Modification. No amendment, change, waiver or discharge hereof shall
be valid unless in writing and signed by an authorized representative of the
party against which such amendment, change, waiver or discharge is sought to be
enforced.
14.7 Binding Nature. This Agreement is binding on the parties hereto and
their respective successors and assigns.
14.8 Notices. Whenever one party is required or permitted to give notice to
the other, such notice shall be deemed given: when delivered by hand, one (1)
day after being given to an express courier with a reliable system for tracking
delivery; when telecopied or faxed and receipt confirmed; or three (3) days
after the day of mailing, when mailed through United States mail, registered or
certified mail, return receipt requested, postage prepaid, and addressed as
follows:
If to Synetic, to:
Synetic Healthcare Communications, Inc.
c/o Synetic, Inc.
River Drive Center 2
669 River Drive
Elmwood Park, New Jersey 07407-1361
Fax No. 201-703-3401
Attention: Chief Financial Officer
with a copy to:
Synetic, Inc.
River Drive Center 2
669 River Drive
Elmwood Park, New Jersey 07407-1361
Fax No. 201-703-3401
Attention: General Counsel
If to Payer, to:
Health Insurance Plan of Greater New York
7 West 34th Street, 12th Floor
New York, New York 10001
Fax No. 212-216-7074
Attention: Mr. John Steber
with a copy to:
Health Insurance Plan of Greater New York
7 West 34th Street, 12th Floor
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New York, New York 10001
Fax No. 212-630-5078
Attention: Mr. Frederic Futterman
Either party may from time to time change its address for notification purposes
by giving the other thirty (30) days prior written notice of the new address and
the date upon which it shall become effective.
14.9 Insurance. Synetic will maintain general liability insurance and such
other insurance, as set forth on Schedule F.
14.10 Assignment. Neither Synetic nor Payer may assign this Agreement or
any of the rights or obligations thereunder without the consent of the other
(which consent shall not be unreasonably withheld) provided that (i) each party
may assign this Agreement and such rights and obligations to a purchaser or
transferee of all or substantially all of its assets and business, (ii) Synetic
may assign this Agreement and such rights and obligations to any parent or
majority owned subsidiary of Synetic and (iii) Payer may assign this Agreement
and such rights and obligations in connection with an internal corporate
restructuring, provided that Payer demonstrates to Synetic that such assignment
will not adversely affect the rights or obligations of Synetic, or benefits that
accrue to Synetic, under this Agreement.
14.11 Entire Agreement. This Agreement, including any Schedules referred to
herein and attached hereto, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and there are no
representations, understandings or agreements relative hereto which are not
fully expressed herein.
14.12 General. Notwithstanding any provisions of this Agreement to the
contrary, any provision of this Agreement that by its terms, nature or operation
of law should survive the termination or expiration of this Agreement will
survive. The waiver or failure of either party to exercise any right in any
instance shall not be deemed a waiver of any other or further right hereunder.
If for any reason a court of competent jurisdiction finds any provision of this
Agreement, or portion thereof to be unenforceable, that provision shall be
enforced to the maximum extent permissible so as to effect the intent of the
parties, and the remainder of this Agreement shall continue in full force and
effect. The section headings used herein are for reference and convenience only
and shall not enter into the interpretation thereof.
14.13 Publicity. Each of Synetic and Payer and their respective affiliates
(existing today and in the future) shall hold the terms of this Agreement in
strict confidence and not make any public statements with respect thereto,
except as may be required under applicable laws and regulations (including,
without limitation, insurance regulations and securities laws) or with the
consent of Synetic, in the case of disclosure by Payer, or with the consent of
Payer, in the case of disclosure by Synetic, in each case which consent will not
be unreasonably withheld. Notwithstanding the foregoing, Synetic and Payer will
issue a press release announcing the execution of this Agreement. In addition,
each of Synetic and Payer shall be permitted to respond generally to inquiries
regarding its business, provided that it shall not disclose specific terms of
the Agreement (except as may be required under applicable laws and regulations).
14.14 Nonassumption of Liabilities. Unless specifically provided by this
Agreement, Synetic does not assume or become liable for any of the existing or
future obligations, liabilities or debts of Payer, and Payer does not assume or
become liable for any of the existing or future obligations, liabilities or
debts of Synetic.
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14.15 Governing Law. This Agreement shall be construed and enforced
according to the laws of the State of New York without reference to principles
of conflicts of laws.
14.16 Third Party Beneficiaries. Nothing in this Agreement shall confer any
benefits or rights on any Person other than the parties to this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
HEALTH INSURANCE PLAN OF GREATER NEW YORK
By:
--------------------------------------------------
Name:
Title:
SYNETIC HEALTHCARE COMMUNICATIONS, INC.
By:
--------------------------------------------------
Name:
Title:
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SCHEDULE A
Fees
*
Confidential Treatment Requested and the Redacted Material has been separately
filed with the Commission. Four pages have been omitted from Schedule A
pursuant to the confidential treatment request.
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SCHEDULE B
Prescription Communication Services
"Prescription Communication Services" shall mean on-line transaction, messaging
and content services which connect physician offices with Payer and with
pharmacies (via the Synetic System) in order to enable physicians to write,
modify, order and renew prescriptions and review information relating to or
prompted by the selection or use of a prescription drug. Such services include
but are not limited to the following: (1) hosting all relevant Payer-supplied
information, and presenting, displaying or providing such information to
End-Users as described below, (2) enabling physicians to conduct online
registration and identification of patients consistent with plan eligibility,
(3) enabling physicians to access medication histories, (4) enabling physicians
to write a prescription, (5) enabling physicians to review the prescription drug
relative to Payer's administrative, financial or clinical rules, (6) providing
online messages, alerts, advisories and other notifications to and from
physicians, particularly when medication treatment is at variance to Payer's
rules, (7) enabling physicians to select and route prescriptions to a pharmacy
(where permitted by laws and regulations), and (8) enabling physicians to
authorize a new or renewal prescription or modify an existing prescription.
The following is a description of the various functions of such services:
1. Registration and identification: Host Payer eligibility files and present
such files to End-Users in order to enable End-Users to register patients and
conduct services specific to the patient and Payer-specific rules.
2. Patient medication histories: Host patient medication histories and present
such histories to End-Users in order to enable End-Users to conduct services
specific to the patient and Payer-specific rules.
3. Clinical, financial and administrative rules: Host and display Payer-specific
formularies, drug utilization review, treatment guidelines and other rules
and present End-Users with alerts and/or advisories relevant to such rules.
Payer must approve all alerts and advisories with respect to both the
criteria that trigger them and their content.
4. Consent: Require End-Users to obtain the appropriate level of patient consent
when using the Synetic System to request any confidential patient
information; capture and store all representations by End-Users.
5. Pharmacy directory: Host and present End-Users with a list of Payer-specific
pharmacies for the purpose of automating the transmission of either messages
and/or prescriptions to pharmacies, where permitted by law.
6. Messages: Present End-Users with Payer and patient-specific messages posted
to a Message Center, which include but are not limited to patient-specific
alerts and advisories (e.g., renewals, formulary compliance, interchanges)
and broadcast messages (e.g., common message intended for many End-Users).
7. Content: Host Payer-specific formularies, treatment guidelines, pharmacy
directories and other related information and provide End-Users the ability
to search, browse and store such information.
B-1
<PAGE>
SCHEDULE B
(continued
Prescription Communication Services
In-House Pharmacy Services
The following is a description of additional functions of the Prescription
Communication Services relating to Payer's in-house pharmacy:
1. Where permitted by applicable laws and regulations, electronic
transmission of new prescriptions and renewals from End-Users' offices
to such pharmacy.
2. Where permitted by applicable laws and regulations, on behalf of such
pharmacy, delivery of electronic prescription renewal notification
messages and other specialized, plan-specific messages (e.g., generic
interchange, therapeutic interchange) to End-Users.
3. Where permitted by applicable laws and regulations, establishment of
pharmacy-to-End-User systems interfaces for the purposes of sending and
receiving all relevant messages and responses to and from End-Users and
such pharmacy.
B-2
<PAGE>
SCHEDULE C
Laboratory Communication Services
"Laboratory Communication Services" shall mean on-line transaction, messaging
and content services which connect physician offices with Payer and with
clinical laboratories (via the Synetic System) in order to enable physicians to
write, modify and order laboratory tests, view laboratory test results, and
review information relating to or prompted by the selection of a laboratory
test. Such services include but are not limited to the following: (1) hosting
all relevant Payer-supplied information, and presenting, displaying or providing
such information to End-Users as described below, (2) enabling physicians to
conduct registration and identification of patients consistent with plan
eligibility, (3) enabling physicians to access lab results histories, (4)
enabling physicians to write a lab order, (5) enabling physicians to review the
lab order relative to Payer's administrative, financial or clinical rules, (6)
providing messages, alerts, advisories and other notifications to and from
physicians, particularly when lab treatment is at variance to Payer's rules, (7)
enabling physicians to authorize and route lab orders to a clinical laboratory
(where permitted by laws and regulations), (8) enabling laboratories to route
lab results to physicians, and (9) interpreting lab results.
The following is a description of the various functions of such services:
1. Registration and identification: Host Payer eligibility files and present
such files to End-Users in order to enable End-Users to register patients and
conduct services specific to the patient and Payer-specific rules.
2. Patient-laboratory histories: Host patient laboratory histories, where
available, and present such histories to End-Users.
3. Clinical, financial and administrative rules: Host and present Payer-specific
treatment guidelines, order sets and other rules and present End-Users with
alerts and/or advisories relevant to such rules. Payer must approve all
alerts and advisories with respect to both the criteria that trigger them and
their content.
4. Consent: Require End-Users to obtain the appropriate level of patient consent
when using the Synetic System to request any confidential patient
information; capture and store all representations by End-Users.
5. Laboratory directory: Host and present End-Users with a list of
Payer-specific laboratories for the purpose of automating the transmission of
either messages and/or lab orders to laboratories, where permitted by law.
6. Messages: Present End-Users with Payer and patient-specific messages posted
to a Message Center, which include but are not limited to both
patient-specific alerts and advisories and broadcast messages (e.g., common
message intended for many End-Users).
7. Content: Host Payer-specific treatment guidelines, laboratory directories and
other related information and provide End-Users the ability to search, browse
and store such information.
C-1
<PAGE>
SCHEDULE C
(continued)
Laboratory Communication Services
In-House Lab Services
The following is a description of additional functions of the Laboratory
Communication Services relating to Payer's in-house clinical laboratory:
1. On behalf of such in-house lab, establish connectivity with End-Users'
offices for the purposes of enabling automated order entry and
electronic transmission of lab test requisitions.
2. Host and maintain plan-specific eligibility and various lab rules and
protocols for the purpose of editing and validating lab test
requisitions before electronic transmittal to the designated
laboratory.
3. Provide the capability to perform such lab test editing and validation
on-line, when required to meet the needs of patient service centers.
4. Establish connectivity to deliver lab test results through electronic
transmission to End-Users' offices.
Exception to Exclusive Grant
Notwithstanding anything to the contrary in this Agreement, the exclusivity
restrictions set forth in Section 3.1 shall not apply to the transmission of lab
orders to and results from the CLS laboratory system via Payer's internal or
third party solutions, subject to the following:
1. Following deployment of the Laboratory Communication Services (in
accordance with the Lab Project Plan and certain Performance Standards so
as to ensure, among other things, that the Synetic System has the same or
superior rule-sets and algorithms as Payer's then-current system) ("Lab
Deployment"), Payer will make Synetic the exclusive gateway to the CLS
laboratory system for all future Physician Office Management Information
System ("POMIS") vendor and other third-party network relationships. For
purposes of clarification, the obligation set forth in the previous
sentence of this paragraph 1 does not apply to relationships existing at
the time of Lab Deployment.
2. Following Lab Deployment, Payer will use best efforts to provide all new
physician/office locations with connectivity to the Synetic System and
access to the Laboratory Communications Services. Notwithstanding the
obligation set forth in the previous sentence of this paragraph 2, the
exclusivity restrictions set forth in Section 3.1 shall continue to not
apply to the transmission of lab orders to and results from the CLS
laboratory system via Payer's internal or third party solutions, except
as provided in paragraph 1 above.
3. If Payer desires to migrate connections between the CLS laboratory system
and physician/office locations to the Synetic System, Payer and Synetic
will jointly evaluate the requirements of such migration and develop
migration plans in the interests of all parties, as may be mutually
agreed upon.
C-2
<PAGE>
SCHEDULE D
Payer-Supplied Information
PRESCRIPTION COMMUNICATION SERVICES INFORMATION:
1. Eligibility files: files which enable End-Users to identify and register
patients, and conduct services specific to the patient and Payer-specific
rules (to be provided no less than monthly). Where the PCP/patient
relationship is relevant, rosters of patients assigned to each primary care
provider.
2. Patient dispensed-medication history files: at Payer's option, patient
dispensed-medication histories for presentation to End-Users (to be provided
no less than monthly), which may be built for Payer by Synetic from Payer's
billing or claims data. Payer assumes responsibility for the quality and
accuracy of such histories.
3. Clinical, financial and administrative rules: formularies, treatment
guidelines, drug utilization review, as well as relevant plan designs and
other related information, to enable End-Users to conduct transactions
consistent with Payer-specific rules.
4. Pharmacy directory: lists of available pharmacies by plan so that
prescriptions and/or messages can be routed to the patient's Payer-specific
pharmacy of choice, where permitted by law.
5. Messages: messages for transmission to End-Users, which include but are not
limited to patient-specific alerts and advisories (e.g., retrospective drug
utilization review, renewals, interchanges) and broadcast messages (e.g.,
common messages intended for many End-Users).
6. Content: Payer-specific content which provides End-Users the ability to
conduct transactions specific to Payer-specific rules and search, browse and
store such information. Initial content from Payer will include Payer
formularies, treatment guidelines, pharmacy directories and other related
information.
7. Test files: representative sample data sets for eligibility, group/plan
identification, provider directories, medication and lab histories, messages
and content.
8. Patient Plan files: files necessary to ensure patients can be associated with
the appropriate plan rules.
9. Interface, message and connectivity specifications: specifications required
to establish communications to Payer System or its designated surrogate for
the purpose of patient identification and receipt of patient histories and
messages.
LABORATORY COMMUNICATION SERVICES INFORMATION:
1. Eligibility files: files which enable End-Users to identify and register
patients, and conduct services specific to the patient and Payer-specific
rules (to be provided no less than monthly). Where the PCP/patient
relationship is relevant, rosters of patients assigned to each primary care
provider.
2. Patient-laboratory histories: at Payer's option, patient laboratory histories
for presentation to End-Users, where available. Payer assumes responsibility
for the quality and accuracy of such histories.
D-1
<PAGE>
SCHEDULE D
(continued)
Payer-Supplied Information
3. Clinical, financial and administrative rules: order sets, treatment
guidelines, reflexive testing algorithms, as well as relevant plan designs
and other related information, to enable End-Users to conduct transactions
consistent with Payer-specific rules.
4. Laboratory directory: lists of available laboratories by plan so that orders
and/or messages can be routed to the patient's Payer-specific laboratory of
choice, where permitted by law.
5. Messages: messages for transmission to End-Users, which include but are not
limited to patient-specific alerts and advisories (e.g., retrospective lab
utilization review) and broadcast messages (e.g., common messages intended
for many End-Users.
6. Content: Payer-specific content which provides End-Users the ability to
conduct transactions specific to Payer-specific rules and search, browse and
store such information. Initial content from Payer will include Payer order
sets, treatment guidelines, laboratory directories and other related
information.
7. Test files: representative sample data sets for eligibility, group/plan
identification, provider directories, medication and lab histories, messages
and content.
8. Patient Plan files: files necessary to ensure patients can be associated with
the appropriate plan rules.
9. Interface, message and connectivity specifications: specifications required
to establish communications to Payer System or its designated surrogate for
the purpose of patient identification and receipt of patient histories and
messages.
D-2
<PAGE>
SCHEDULE E
Financial Warranty
*
Confidential Treatment Requested and the Redacted Material has been separately
filed with the Commission.
E-1
<PAGE>
SCHEDULE F
Synetic Insurance
Coverage Limits Insurance Company
Umbrella Policy $15,000,000 Crum & Forster
Professional Liability $5,000,000 Evanston Insurance Group
(e.g., "errors and omissions")
General Liability Crum & Forster
-- General aggregate $2,000,000
-- Personal $1,000,000
-- Each occurrence $1,000,000
-- Fire damage $50,000
-- Medical expense $5,000
-- Auto liability $1,000,000
-- Employee benefit $1,000,000
Commercial Crime $3,000,000 Gulf Insurance Co.
(employee theft, etc.)
Property $5,000,000 Crum & Forster
(location of Synetic's
Clinical Transaction system)
Workers' Compensation Statutory Crum & Forster
Employers Liability $1,000,000 per Crum & Forster
accident/disease
F-1
<PAGE>
SCHEDULE G
Performance Standards
SYNETIC PERFORMANCE STANDARDS
GENERAL ASSUMPTIONS
1. The success/failure of each service level objective set forth below will
be determined on the basis of a quarterly average. Service level
objectives will be measured and reported on a monthly basis.
2. There will be a ninety (90) day grace period on reliability measurements
when scheduled major upgrades to either the THINC Network or the Synetic
System occur.
SERVICE CHANGE PROCEDURE
1. The Synetic Relationship Manager and the Payer Relationship Manager will
be responsible for addressing any changes to this schedule.
2. Modifications to any performance standards or to this document, and all
requests as set forth in the previous paragraph will require the review
and approval of both parties.
CONNECTIVITY
Synetic will support connectivity to End-Users via:
1. Dial-up via 28.8, 33.6 or 56 kbps modem
2. Dial-up via ISDN; or
3. Dedicated line (56 kbps up to T-1).
Clinical Transactions will be available to End-User desktop workstations that
are:
1. Intel based: Windows 95, Windows NT 4.0, Windows 98
2. Synetic's standard browser: Microsoft Internet Explorer 4.0+, which
may utilize one or more plug-ins or applets provided by Synetic
SYNETIC SYSTEM AND THINC NETWORK AVAILABILITY
Synetic will provide End-Users access to Clinical Transaction Services, which
Clinical Transactions Services will be available seven days a week, twenty-four
hours a day, 365 days a year excluding regularly scheduled down-time for
maintenance. The Synetic System (accessed through the THINC Network) will have
an effective rate of 99.5% availability. Measurement will be based on data from
the availability logs of the THINC Network and the Synetic System. Scheduled
outages are not included when calculating the service level objective. The
foregoing availability measurement is exclusive of availability of all
interfaces and connections from the Payer System to the THINC Network, as well
as the availability of the Payer System or the system of any affiliated
organization (e.g., PBMs).
If, for any reason, the Clinical Transaction Services are unavailable other than
by reason of a scheduled
G-1
<PAGE>
SCHEDULE G
(continued)
Performance Standards
downtime, if such unavailability is due to an outage in the Synetic System of
the THINC Network, Synetic will (or will cause THINC to):
1. Make its reasonable commercial efforts to restore all services
with minimum outage,
2. Escalate resources to aid in resolution, if the outage persists
for longer than one (1) hour, and
3. Provide information messages to End-Users including the time that
availability is expected again.
Access to the Internet and World Wide Web
Synetic will provide an Internet service connection and IP addresses for
End-Users that is available on a 24 hours a day, 7 days a week, 365 days a year
basis. Such Internet accessibility (accessed by an End-User through the Synetic
System and the THINC Network) will have an effective rate of 99.5% availability.
Synetic shall monitor traffic and performance, and take appropriate preemptive
action (such as adding bandwidth, upgrading, or redesigning the access points)
to insure satisfactory performance and reliability.
NETWORK DOWNTIME
Required downtimes for both THINC Network and Synetic System backup will be
scheduled by Synetic at times as have been demonstrated (through past usage
records) to (i) interfere minimally with Payer's use of or access to the
Clinical Transaction Services and (ii) proceed without significant degradation
during such downtimes of performance of THINC Network and Synetic System
pursuant to these standards, though such downtimes shall not affect performance
criteria. Except in the event of unforeseen or emergency repair circumstances,
notice of the schedule of downtimes for the THINC Network and the Synetic System
will be provided to Payer in writing at least seven (7) days prior to such
downtime.
HELP DESK AVAILABILITY STANDARDS
1. Synetic shall staff a central point of telephone support to provide
End-Users, THINC's help desk, or others as appropriate with assistance
throughout the Term (the "Synetic Help Desk").
2. End-User calls will be placed to the THINC Help Desk. End-Users will be
provided a toll-free telephone number. Issues associated with Clinical
Transaction Services will be referred to the Synetic Help Desk.
3. Both THINC's and Synetic's Help Desks will use a problem tracking system
(PTS) to manage problem resolution. Synetic's Help Desk staff will be
professional and trained so as to handle issues associated with the
Synetic System and the Clinical Transaction Services.
4. Synetic will provide coverage seven (7) days a week, twenty four (24)
hours a day, 365 days per
G-2
<PAGE>
SCHEDULE G
(continued)
Performance Standards
year to respond to referred telephone calls.
5. During "normal working hours", defined as 8:00 am to 8:00 pm Eastern
Standard Time or Eastern Daylight Time, as applicable, Monday through
Friday, and Saturday from 9:00 am to 4:00 pm, the Synetic Help Desk will
answer all calls by the fourth (4th) ring. The Synetic Help Desk personnel
will resolve all telephone calls that can be resolved at the Synetic Help
Desk level.
6. Telephone calls received during normal working hours that cannot be
resolved at the Synetic Help Desk level will be assigned to the
appropriate Synetic technician.
7. Regarding calls received during normal working hours which the Synetic
Help Desk staff or the Synetic technician has determined that the caller's
issue can be resolved remotely, ninety-five percent (95%) of such calls
shall be resolved by Synetic via remote access in less than eight (8)
business hours from such determination.
8. Telephone calls received by the Synetic Help Desk outside the timeframe
defined as "normal working hours" will be forwarded to the appropriate
Synetic technical staff within four (4) hours after the telephone call is
received. Within this four hour time period, Synetic will notify the
caller of the name of the Synetic technician who has been assigned to the
problem.
9. If Synetic fails to notify the caller within the agreed upon time as to
who has been assigned to the problem, the caller will place a second
telephone call to the Synetic Help Desk and ask that the problem be
immediately escalated to the next level.
G-3
