Healtheon Customer Agreement
This Healtheon Customer Agreement ("Agreement") is entered into as of
the 16th day of September, 1999 ("Effective Date"), by and between Healtheon
Corporation, a Delaware corporation with its principal offices at 4600 Patrick
Henry Drive, Santa Clara, California 95054 ("Healtheon"), and Alternative
Technology Resources, Inc. ("Customer"), a Delaware corporation with offices at
629 J Street, Sacramento, California 95814.
Recitals
A. WHEREAS, Healtheon is in the business of developing and providing medical
transaction processing services and Internet-based information services for
managed care organizations, health care providers, employers and other health
care entities;
B. WHEREAS, Customer desires to obtain such services from Healtheon, and
Healtheon is willing to provide such services, subject to the terms and
conditions of this Agreement.
NOW, therefore, for and in consideration of the mutual covenants set
forth herein, and for other good and valuable consideration, the adequacy of
which is hereby acknowledged, the parties agree as follows:
Agreement
Article 1. Agreement Structure.
1.1 Transaction Documents. This Agreement anticipates one or more
business transactions between Healtheon and Customer, and sets forth the terms
and conditions pursuant to which Healtheon will provide one or more Healtheon
Services to Customer. For each business transaction, Healtheon will provide the
appropriate "Service Exhibit" that will refer to this Agreement, specify the
services to be provided thereunder, and provide any additional terms and
conditions applicable to such services. A Service Exhibit shall not be binding
upon the parties unless and until signed by their respective authorized
representatives. Each Service Exhibit may incorporate one or more Schedules. The
following are examples of Schedules and a description of their content:
(a) On-Line Service Specifications. Describes the functions and features
of the Healtheon On-Line Services indicated in the corresponding
Service Exhibit.
(b) Project Plan. Describes the management, planning, development,
implementation and testing of the development of Healtheon On-Line
Services and its integration with Customer's application systems.
(c) Fee Schedule. Sets forth the one-time and recurring fees payable by
Customer for one or more Healtheon Services.
(d) Other Schedules. Other Schedules may describe other Healtheon Services
(e.g., training services, support services, development services) or
additional terms and conditions relating to one or more Healtheon
Services (e.g., software terms and conditions, performance standards).
1.2 Incorporation; Conflicts. Each Service Exhibit signed by an authorized
representative of each party, and its associated Schedules, are hereby
incorporated in full into this Agreement by reference and shall be subject to
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the terms and conditions of this Agreement. In the case of a conflict among the
provisions in the various documents, unless expressly provided otherwise, those
of the Service Exhibit prevail over those of the Schedules, and those of this
Agreement prevail over those of the Service Exhibits.
Article 2. Services.
2.1 Healtheon Services. Healtheon will use commercially reasonable efforts
to provide the Healtheon Services to Customer under the terms and conditions of
this Agreement, including those of the Service Exhibit and associated Schedules.
2.2 Hardware and Software. Unless otherwise expressly provided in the
Service Exhibit or associated Schedules, all computer hardware owned or leased
by Customer (including computer hardware used to access and use the Healtheon
Services) and all computer software installed on such computer hardware
(including, but not limited to, operating systems, browsers, networking systems,
telecommunications software, and third party application software) shall be
provided by Customer, at its sole expense, and Customer shall be solely
responsible for its selection, installation, configuration, testing, operation,
maintenance, support and use. Healtheon will be responsible only for the
computer hardware owned or leased by Healtheon that is used by Healtheon to
render the Healtheon Services.
2.3 Connectivity. Unless otherwise provided in the Service Exhibit or
associated Schedules, Customer is responsible for providing at its sole expense
all Internet access, telephone access line and telephone and communications
equipment (e.g., modems or other access devices). Customer shall be solely
responsible for the selection, installation, configuration, testing, operation,
maintenance, support and use of the foregoing items. Healtheon is not obligated
hereunder to provide training or support services relative to the foregoing
items. Healtheon may, at its option, make available Internet connectivity
services via third parties for an additional charge.
2.4 Backups. Healtheon will store and maintain all Data that it receives
for at least one (1) year from the date of receipt, and provide any such Data to
Customer if requested by Customer during such one (1) year period. Healtheon is
not responsible for the backup or storage of Data beyond this one (1) year
period unless otherwise required by any U.S. law or regulation applicable solely
to Healtheon. Notwithstanding Healtheon's duty under this Section, Customer is
solely responsible for arranging for adequate backup and storage of Data
relating to its transactions such that it may replicate any Data conveyed
through Healtheon's Services (e.g., in the event Healtheon fails in its duty
under this Section).
2.5 No Restriction. Nothing in this Agreement shall restrict either party
from providing other products or services, whether with or without charge, to
Customer-affiliated Providers or to any third party.
2.6 Modification of Services. One or more Healtheon Services may be
modified or withdrawn from time to time during the term of this Agreement by
Healtheon in its continuing sole discretion, and any such action shall not
constitute a breach by Healtheon of any of its obligations hereunder. Healtheon
will give Customer sixty (60) days prior written notice of the material
modification of or withdrawal of any such Healtheon Service, and require
Customer to negotiate in good faith for a reasonable reduction in the fees
charge or to be charged Customer under this Agreement that takes into account
the loss of service, functionality, or availability occasioned by the material
modification or withdrawal of a Healtheon Service. If the parties are unable to
agree on such fee reduction, Customer may terminate this Agreement and Healtheon
shall pay to Customer, as Customer's sole and exclusive remedy, a pro-rata
refund of all one-time charges incurred under this Agreement prorated based upon
a five (5) year straight line depreciation method. Healtheon may deduct from any
such payment all other sums due Healtheon from Customer. Upon termination of
this Agreement, all of Customer's rights to use the Healtheon Services or the
Healtheon Application Software shall terminate.
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Article 3. Contract Management.
3.1 Contract Managers. The Contract Managers for the parties shall be as
follows:
For Healtheon: David W. DeBoard
Healtheon Corporation
4600 Patrick Henry Drive
Santa Clara, California 95054
Phone: (714) 579-1076
Facsimile: (714) 579-1076
For Customer: David Edelstein
Alternative Technology Resources, Inc.
629 J Street
Sacramento, California
Phone: (916) 557-9920
Facsimile: (916) 447-9324
Unless otherwise specified herein, the Contract Managers for each party shall be
primarily responsible for arranging all meetings, visits, and consultations
between the parties relating to this Agreement, for receiving all notices under
this Agreement, and for coordinating all administrative matters such as
invoices, payments, and amendments. The Contract Managers shall also be
responsible for coordinating the resolution of any issues and disputes between
the parties arising under this Agreement or relating to the Healtheon Services.
From time to time during the term of this Agreement, each party may replace its
Contract Manager with another person having equivalent authority by providing
written notice to the other party.
3.2 Personnel Resources. Healtheon and Customer shall each commit the
number of personnel which are reasonably necessary to perform their respective
obligations under this Agreement and as further outlined in the Service Exhibit.
Healtheon shall have the sole right and obligation to hire, supervise, manage,
contract, direct, procure, perform or cause to be performed all work to be
performed by Healtheon and its personnel hereunder. Healtheon, at its option,
may engage third party contractors to render services in connection with the
performance of the Healtheon Services contemplated hereunder. All Healtheon
employees and third-party contractors utilized to provide the Healtheon Services
shall have entered into nondisclosure agreements or shall otherwise be subject
to obligations of confidentiality sufficient to satisfy Healtheon's
confidentiality obligations under this Agreement.
3.3 Change Requests. Customer may propose changes to this Agreement,
including the Service Exhibit or associated Schedule or other documented
agreement developed and mutually agreed upon pursuant thereto (e.g., project
plans and schedules). Such Change Requests shall be submitted in writing.
Healtheon shall review the Change Request and advise Customer whether
Healtheon's assessment of and response to the Change Request will require
payment of fees by Customer to Healtheon. If a Change Request does not, in
Healtheon's sole opinion, require Healtheon's expenditure of materially more
time and effort, Healtheon shall agree to the change at no additional charge,
but may require adjustment of the time schedules. If such Change Request does
require, in Healtheon's sole opinion, Healtheon's expenditure of materially more
time and effort, Healtheon will provide Customer a cost estimate for
implementing the change and shall advise in writing of the impact on the
Healtheon Services. No such changes, however, shall become effective until a
written amendment specifying the change or changes is executed by authorized
representatives of both parties.
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Article 4. Payment.
4.1 Fees. The service fees, fixed fees, time and materials charges, and
other fees payable to Healtheon by Customer for Healtheon Services to be
provided hereunder will be set forth in the Service Exhibits.
4.2 Payment Terms. At the end of each calendar month or part thereof during
the term of this Agreement, Healtheon shall prepare an invoice ("Invoice")
setting forth in reasonable detail the computation of all amounts owed by
Customer to Healtheon hereunder in accordance with the Service Exhibit, and
deliver such Invoice to Customer together with the monthly billing summary. All
amounts owed by Customer to Healtheon hereunder, as reflected on Healtheon's
Invoice, shall be paid by Customer to Healtheon within thirty (30) days
following Healtheon's delivery of such Invoice. Invoices not paid by Customer
within thirty (30) days from the date of the Invoice shall be subject to a
1-1/2% per month late payment charge, or such lesser maximum amount as may be
allowed by applicable law.
4.3 Fee Adjustments. Unless otherwise expressly stated in a schedule, all
fees and charges payable under this Agreement may be adjusted by Healtheon upon
sixty (60) days written notice.
4.4 Records. Either party will maintain accurate and complete records to
allow verification of the fees payable pursuant to this Agreement for a period
of one year after the date of payment of each monthly Invoice. All information
relating to the fees and payments hereunder constitutes Confidential
Information, and neither party may disclose such Confidential Information to
third parties (except its advisors, attorneys, and accountants) without the
prior written consent of the other party.
4.5 Audit Rights. Either party shall have the right to audit the portion of
the other party's books and records relating to the provision or receipt of the
Healtheon Services hereunder for the purpose of verifying the fees paid to
Healtheon hereunder. Such audits shall be performed by independent third party
auditors who agree, in writing, to maintain the confidentiality of the materials
audited. Such audits shall occur during regular business hours and with at least
two (2) weeks prior written notice to the audited party. During audits, the
auditing party agrees to require its third party auditors to follow security and
confidentiality procedures reasonably required by other party. The parties will
bear their own costs associated with such audits, except that if the audit
reveals an undercharge of five percent (5%) or more, the auditing party will
bear all costs associated with the audit.
4.6 Taxes. Customer will be responsible for, and shall pay as invoiced, any
applicable sales, use, real or personal property, franchise or other like taxes
attributable to the Healtheon Services, the Healtheon Application Software or
any other good or service provided by Healtheon to Customer, excluding, however,
taxes based upon Healtheon's net income. All fees charged hereunder by Healtheon
are net of any such taxes.
Article 5. Intellectual Property.
5.1 Intellectual Property. As between Healtheon and Customer, Healtheon,
and/or its suppliers, own all worldwide rights (including, without limitation,
all Intellectual Property Rights), titles, and interests, in and to the
Healtheon Services, the Healtheon System and the Healtheon Application Software,
including, without limitation, any software and documentation (collectively, the
"Healtheon Property"). All rights in the Healtheon Property are expressly
reserved by Healtheon. The parties also contemplate that they may individually
or jointly develop certain data maps, software, protocols, translations, and
interfaces to enable the parties to use and provide the Healtheon Services
contemplated under this Agreement (collectively referred to herein as
"Interfaces"), and the parties contemplate that certain Intellectual Property
Rights in and to such Interfaces may be created (the "Interface Intellectual
Property Rights"). Unless expressly provided to the contrary in the Service
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Schedule, the parties hereby agree that Healtheon shall own all Interface
Intellectual Property Rights. Unless expressly provided to the contrary in the
Service Exhibit, Customer hereby assigns all Intellectual Property Rights that
Customer may now or hereafter own in the Interface Intellectual Property Rights.
Customer agrees upon request and without any additional consideration to
execute, acknowledge, and deliver to Healtheon all assignments and other
instruments that Healtheon may reasonably request to effectuate the intent of
this Section 5.1.
5.2 Trademarks. Each party owns all right, title, and interest in and to
its Marks, and the other party will acquire no rights in such Marks. Except as
expressly provided in this Agreement, Service Exhibit or Schedules, neither
party shall use the Marks, whether registered or not, of the other party in
publicity releases or advertising or in any other manner, without securing the
prior written approval of the other party.
Article 6. Grant of Access Rights; Authorized Uses and Authorized Users.
6.1 Access to the Healtheon Services. Subject to the terms and conditions
of this Agreement, Healtheon hereby grants Customer a non-exclusive,
non-assignable, non-sublicenseable, and terminable right and license to access
and use the Healtheon Services for Authorized Uses only. Upon the expiration or
termination of this Agreement, Customer agrees to cease all access to and use of
the Healtheon Services, and agrees within ten (10) days of any expiration or
termination of this Agreement to revoke the access of all Customer's personnel
to the Healtheon System, so that no further access or use of the Healtheon
Services may be made by Customer. All rights not expressly granted in this
Agreement are reserved to Healtheon. No other rights or licenses, whether
express, implied, or arising by estoppel or otherwise are intended or conveyed
herein.
6.2 Use by Authorized Users Only. Healtheon Services may be accessed and
used by Authorized Users only. Customer shall not cause or knowingly permit (a)
any person that is not an Authorized User to use the Healtheon Services, or (b)
any Authorized User to use the Healtheon Services in an unauthorized manner.
Customer agrees to report to Healtheon all unauthorized uses and users of the
Healtheon Services to Healtheon. An Authorized User's right to use the Healtheon
Services shall cease when the Authorized User is no longer an employee, agent or
contractor of Customer.
6.3 Passwords. Upon Customer's request, Healtheon shall issue (or shall in
Healtheon's sole discretion, authorize Customer to issue) Customer-unique
identification numbers ("IDs") and associated passwords ("Passwords") for its
Authorized Users, which IDs and Passwords are required to access the Healtheon
Services. Customer shall be solely responsible for transmitting such IDs and
Passwords to its personnel and for verifying that such personnel are authorized
to access and use the Healtheon Services. Customer shall maintain its IDs and
Passwords in strict confidence and shall advise its Authorized Personnel to
maintain their IDs and Passwords in strict confidence. Healtheon reserves the
right to disable any ID upon reasonable belief that its security has or will be
compromised.
Article 7. Confidentiality.
7.1 Confidentiality Obligations. In the course of performing under this
Agreement, each party may receive, be exposed to or acquire the Confidential
Information of the other party, its suppliers or customers. The parties (i)
shall not disclose to any third party the Confidential Information of the other
party except as otherwise permitted by this Agreement, (ii) only permit use of
such Confidential Information by its employees and agents having a need to know
in connection with performance under this Agreement, and (iii) advise each of
their employees, agents, and representatives of their obligations to keep such
Confidential Information confidential. Notwithstanding anything to the contrary
herein, Healtheon shall be free to use, for its own business purposes, any
ideas, suggestions, concepts, know-how or techniques contained in information
received from Customer that directly relates to Healtheon's Services. For
example, Healtheon shall be free to incorporate any suggested changes or
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modifications to the Healtheon Services into services provided to other
customers. Healtheon's receipt of Confidential Information under this Agreement
shall not create any obligation that in any way limits or restricts the
assignment and/or reassignment of Healtheon's employees to different positions
within Healtheon.
7.2 Confidentiality of Data. Healtheon acknowledges that Data may include
Confidential Information of consumers, and agrees to treat such information as
Confidential Information, and agrees not to disclose such information except in
connection with its obligations hereunder and as may be required or permitted by
law or contract. Customer agrees that Healtheon, its licensors, and all other
persons or entities involved in the operation of the Healtheon Services, have
the right to transmit, monitor, retrieve, store and use Data in connection with
the operation of the Healtheon Services.
7.3 Agreement Confidential. The parties agrees that not to disclose the
terms and conditions of this Agreement with any person or entity, without the
other party's prior written consent, except for disclosure to its employees who
have a need to know the terms of this Agreement.
7.4 Disclosure Required Court or Government. If a Receiving Party is
required to disclose Confidential Information of a Disclosing Party pursuant to
court order or government authority, the Receiving Party shall provide
reasonable notice where feasible to the Disclosing Party prior to such
disclosure and shall cooperate with the Disclosing Party to obtain protection
from such disclosure.
7.5 No Removal of Proprietary Legends. No Receiving Party shall remove,
obscure, or deface any proprietary or confidentiality legends relating to the
Disclosing Party's rights, on or from any electronic or tangible embodiment of
any Confidential Information, without the Disclosing Party's prior written
consent.
7.6 Reports of Third-Party Misappropriation. A Receiving Party shall
immediately report to the Disclosing Party any attempt by any person of which
the Receiving Party has knowledge (a) to use or disclose the Confidential
Information without authorization from the Disclosing Party, or (b) to copy,
reverse assemble, reverse compile or otherwise reverse engineer any part of the
Healtheon Services or Healtheon Application Software.
Article 8. Representations and Warranties.
8.1 Healtheon's Representations and Warranties.
8.1.1 Healtheon Services. Healtheon warrants that Healtheon Services
shall be performed in a workmanlike manner. In addition, Healtheon warrants
to Customer that the Healtheon On-Line Services shall be rendered so that
the Performance Standards shall be met or exceeded. However, Customer
acknowledges and agrees that Healtheon uses complex computer software,
computer hardware, communication systems, and Internet connectivity to
render the Healtheon Services to Customer and third parties, i.e.,
consumers and Providers affiliated with Customer. Computer software,
computer hardware, communication systems, and Internet connectivity of this
type are rarely free from defects, perform without interruption, or provide
complete security. Thus, the Healtheon System may periodically fail to
satisfy the warranties provided in this Section 8.1.1.
8.1.2. Warranties Relative to Healtheon Application Software.
Healtheon warrants to Customer that, for a period of ninety (90) days after
final acceptance of the Healtheon Application Software by Customer, the
Healtheon Application Software shall (i) conform in all material respects
to its end user documentation, (ii) contain no unauthorized code (e.g.,
back doors, trojan horses, time bombs, or cancelbots), virus, or other
mechanisms intended to adversely disable, erase, harm or grant unauthorized
access to the Healtheon Application Software, and (iii) beY2K Compliant.
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8.1.3 Compliance with Applicable Laws. Healtheon warrants to Customer
that it will use commercially reasonable efforts to render the Healtheon
Services in conformance with the Health Insurance Portability and
Accountability Act of 1996.
8.1.4 Non-infringement Representation and Warranties. Healtheon
represents and warrants to Customer that the use by Customer of the
Healtheon Services and the Healtheon Application Software for Authorized
Uses will not infringe on any valid and subsisting United States copyright
or any valid or subsisting trade secret recognized under the laws of the
United States or any of its states that are owned by a third party.
Specifically excluded from this representation and warranty, however, is
any infringement or misappropriation which arises from, relates to, or is
attributable to (a) Customer's modification of the Healtheon Application
Software, (b) Third Party Content, or (c) Customer Content. Healtheon also
represents to Customer that it has no knowledge that the use of the
Healtheon Services and the Healtheon Application Software permitted
pursuant to this Agreement will infringe on any valid and subsisting United
States patent owned by any third party. The foregoing representation does
not extend to any knowledge or lack thereof with respect to the possibility
of infringement of a United States patent as a result of a Combination Use
of the Healtheon Services or the Healtheon Application Software. Healtheon
has no duty to investigate or to warn Customer of any possibility of
infringement by Combination Use. Customer's sole and exclusive remedy with
respect to a breach of the representations and warranty provided in this
Section 8.1.4 will be for Customer to invoke the infringement defense
provisions set forth in Section 12.1.
8.1.5 Representations and Warranties Solely For Benefit of Customer.
The representations and warranties given by Healtheon in this Agreement
extend solely to Customer and to no third party whatsoever, including,
without limitation, Providers affiliated with Customer.
8.1.6 EXCLUSIVE REMEDIES. CUSTOMER'S EXCLUSIVE REMEDY FOR ANY DEFAULT
OR BREACH OF ANY EXPRESS OR IMPLIED WARRANTY RELATING TO THE HEALTHEON
SERVICES, THE HEALTHEON APPLICATION SOFTWARE OR THE HEALTHEON SYSTEM SHALL
BE LIMITED TO EITHER THE REPAIR OR REPERFORMANCE OF THE SERVICES AT
HEALTHEON'S EXPENSE, OR THE REFUND OF ALL ON-TIME CHARGES AS SPECIFIED IN
SECTION 11.4 BELOW.
8.2 Customer Representations and Warranties.
8.2.1 Compliance with Laws. Customer warrants to Healtheon that it
will comply with all Laws that are directly or indirectly applicable to
Customer as they may relate to the use or operation of the Healtheon
Services or the Healtheon Application Software or Customer's Provider
Network. As between Healtheon and Customer, Customer warrants to Healtheon
that Customer shall undertake responsibility for compliance with all such
Laws (except where such Laws prohibit Healtheon from so shifting
responsibility for compliance to Customer). Without limiting the foregoing,
Customer expressly represents and warrants to Healtheon that Customer shall
comply with all laws and regulations that may now or hereafter govern the
offer and/or provision of services through Customer's Provider Network
and/or the gathering, use, transmission, processing, receipt, reporting,
disclosure, maintenance, and storage of the Data, and that it shall use its
best efforts to cause all affiliated Providers and End Users to comply with
such laws.
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8.2.2 Data. Customer represents and warrants to Healtheon that
Customer shall, at all times during the term of this Agreement and
thereafter, comply with all Laws directly or indirectly applicable to
Customer that may now or hereafter govern the gathering, use, transmission,
processing, receipt, reporting, disclosure, maintenance, and storage of the
Data. Customer further represents and warrants to Healtheon that: (a) when
Customer submits Data or other information (e.g., about its affiliated
Providers and Provider Network) to Healtheon, Customer has the right and
authority to do so; and (b) Customer has the right and authority to view
and access the Data it has requested to retrieve in connection with the
Healtheon Services.
8.2.3 Consents. Customer represents and warrants to Healtheon that
Customer (and not Healtheon) is, at all times during the term of this
Agreement and thereafter, solely responsible for maintaining the
confidentiality of the Data on behalf of consumers or other persons or
entities to whom the Data may pertain or relate, and obtaining and
maintaining all patient consents and all other legally necessary consents
or permissions required or advisable to disclose, process, retrieve, and
view the Data it submits or receives in connection with the Healtheon
Services, and to transmit such Data to providers, and others. Upon
Healtheon's request, Customer shall provide, or it will cause the End-Users
to provide, Healtheon copies of any such required consents or permissions.
TO THE EXTENT CUSTOMER REQUESTS HEALTHEON TO TRANSMIT DATA TO THIRD
PARTIES, IN ACTING ON CUSTOMER'S REQUESTS, HEALTHEON HEREBY AGREES THAT IT
WILL SERVE AS CUSTOMER'S LIMITED AGENT IN TRANSMITTING PATIENT MEDICAL
INFORMATION TO OTHER PAYERS, PHYSICIANS, AND OTHER MEDICAL SERVICE
PROVIDERS USING HEALTHEON SERVICES FOR SUCH PATIENT.
8.2.4 Environment. Customer represents and warrants that it shall
maintain appropriate safeguards against the destruction, loss, and
alterations of the Data, and that it shall maintain commercially-available,
network-based virus protection software, which shall be adequate to protect
Customer's data, software, and computer and telecommunications hardware.
8.2.5 Third Party Content. Customer warrants to Healtheon that
Customer (and not Healtheon) shall undertake sole responsibility to verify
the accuracy, reliability, timeliness, and completeness of Third Party
Content before using or relying upon it in any manner whatsoever.
8.2.6 Federal Health Care Programs. Customer represents and warrants
to Healtheon that:
(a) neither Customer, nor its officers, directors, employees or
agents, have engaged in or will engage in any activities that are in
violation of Medicare, Medicaid or any other "State Health Care
Program" (as defined in Section 1128(h) of the Social Security Act
("SSA")) or "Federal Health Care Program" (as defined in SSA Section
1128B(f)) under 42 U.S.C. ss.ss. 1320a-7, 1320a-7a, 1320a-7b, or
1395nn, the federal Civilian Health and Medical Plan of the Uniformed
Services ("CHAMPUS") statute, or the regulations or rules promulgated
pursuant to such statutes or regulations or related state or local
statutes or which are prohibited by any private accrediting
organization from which Customer seeks accreditation or by generally
recognized professional standards of care or conduct, including but
not limited to the following activities:
(i) knowingly and willfully making or causing to be made a
false statement or representation of a material fact in any
application for any benefit or payment;
(ii) knowingly and willfully making or causing to be made
any false statement or representation of a material fact for use
in determining rights to any benefit or payment; or
(iii) presenting or causing to be presented a claim for
reimbursement under CHAMPUS, Medicare, Medicaid or any other
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State Health Care Program or Federal Health Care Program that is:
(A) for an item or service that the person presenting
or causing to be presented knows or should know was not
provided as claimed;
(B) for an item or service and the person presenting
knows or should know that the claim is false or fraudulent;
(iv) knowingly and willfully offering, paying, soliciting or
receiving any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or
in kind in return for referring, or to induce the referral of, an
individual to a person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made
in whole or in part by CHAMPUS, Medicare, Medicaid, or any other
State Health Care Program or Federal Health Care Program, or in
return for, or to induce, the purchase, lease, or order, or the
arranging for or recommending of the purchase, lease, or order,
of any good, facility, service, or item for which payment may be
made in whole or in part by CHAMPUS, Medicare, Medicaid or any
other State Health Care Program or Federal Health Care Program;
or
(v) knowingly and willfully making or causing to be made or
inducing or seeking to induce the making of any false statement
or representation (or omitting to state a material fact required
to be stated therein or necessary to make the statements
contained therein not misleading) or a material fact with respect
to the conditions or operations of a facility in order that the
facility may qualify for CHAMPUS, Medicare, Medicaid or any other
State Health Care Program or Federal Health Care Program
certification, or information required to be provided under SSA
ss.1124A.
(b) neither Customer nor to the best knowledge of Customer any other
person who has a direct or indirect ownership interest (as those terms are
defined in 42 C.F.R. ss. 1001.1001(a)(2)) in CUSTOMER, or who will have an
ownership or control interest (as defined in SSA ss. 1124(a)(3) or any
regulations promulgated thereunder) in Customer, or who will be an officer,
director, agent (as defined in 42 C.F.R. ss. 1001.1001(a)(2)), or managing
employee (as defined in SSA ss. 1126(b)) of Customer and to the best
knowledge of Customer:
(i) has had a civil monetary penalty assessed against it under
SSA ss. 1128A;
(ii) has been excluded from participation under Medicare,
Medicaid or any other State Health Care Program or Federal Health Care
Program; or
(iii) has been convicted (as that term is defined in 42 C.F.R.ss.
1001.2) of any of the following categories of offenses as described in
SSAss. 1128(a) and (b)(1), (2), (3):
(A) criminal offenses relating to the delivery of an item or
service under Medicare, Medicaid or any other State Health Care
Program or Federal Health Care Program;
(B) criminal offenses under federal or state law relating to
patient neglect or abuse in connection with the delivery of a
health care item or service;
(C) criminal offenses under federal or state law relating to
fraud, theft, embezzlement, breach of fiduciary responsibility,
or other financial misconduct in connection with the delivery of
a health care item or service or with respect to any act or
omission in a program operated by or financed in whole or in part
by any federal, state or local government agency;
(D) federal or state laws relating to the interference with
or obstruction of any investigation into any criminal offense
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described in (a) through (c) above; or
(E) criminal offenses under federal or state law relating to
the unlawful manufacture, distribution, prescription or
dispensing of a controlled substance.
8.2.7 Representations and Warranties Extend to Healtheon's Suppliers or
Licensors. The representations and warranties given by Customer in this
Agreement extend to Healtheon and to its suppliers and licensors.
8.3 Mutual Representations and Warranties.
8.3.1 Due Organization. Each party represents and warrants to the other
party that it is duly organized, validly existing, and in good standing under
the laws of the jurisdiction in which it is organized, it has the full power to
enter into this Agreement and to perform its obligations hereunder, and that the
performance by it of its obligations under this Agreement have been duly
authorized by all necessary corporate or other actions and will not violate any
provision any corporate charter or bylaws.
8.3.2 No Conflicts. Each party represents and warrants to the other party
that neither the execution of this Agreement nor its performance hereunder, will
directly or indirectly violate or interfere with the terms of another agreement
to which it is a party, or give any governmental entity the right to suspend,
terminate, or modify any of its governmental authorizations or assets required
for its performance hereunder. Each party represents and warrants to the other
party that it will not enter into any agreement the execution and/or performance
of which would violate or interfere with this Agreement.
8.3.3 No Bankruptcy. Each party represents and warrants to the other party
that the party is not currently the subject of a voluntary or involuntary
petition in bankruptcy, does not currently contemplate filing any such voluntary
petition, and is not aware of any claim for the filing of an involuntary
petition.
8.4 Disclaimers.
8.4.1 DISCLAIMER OF IMPLIED WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED
HEREIN, HEALTHEON MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER
EXPRESS OR IMPLIED (EITHER IN FACT OR BY OPERATION OF LAW) WITH RESPECT TO THE
HEALTHEON SERVICES OR THE HEALTHEON APPLICATION SOFTWARE, AND, IF ANY, ANY OTHER
PRODUCTS OR SERVICES PROVIDED OR RENDERED TO CUSTOMER (OR TO A PROVIDER
AFFILIATED WITH CUSTOMER) BY HEALTHEON. HEALTHEON EXPRESSLY DISCLAIMS ALL
WARRANTIES OR CONDITIONS OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
ALL WARRANTIES ARISING FROM CONDUCT, COURSE OF DEALING OR CUSTOM OF TRADE, AND
(EXCEPT AS SPECIFICALLY SET FORTH IN SUBSECTION 8.1.4), ALL WARRANTIES OF TITLE
AND NON-INFRINGEMENT. HEALTHEON DOES NOT WARRANT THAT THE HEALTHEON SERVICES OR
THE HEALTHEON APPLICATION SOFTWARE ARE OR WILL BE ERROR-FREE OR, THAT THE USE OR
OPERATION OF THE HEALTHEON SERVICES OR THE HEALTHEON APPLICATION SOFTWARE WILL
BE UNINTERRUPTED OR SECURE, AND HEALTHEON HEREBY DISCLAIMS ANY AND ALL
LIABILITIES ON ACCOUNT THEREOF.
<PAGE>
8.4.2 Results. Healtheon makes no warranty as to: (a) the results that
may be obtained from the use of the Healtheon Services, or (b) as to the
accuracy, reliability or content of any information or data provided or
received by Customer. Healtheon further does not guarantee the payment or
the timing of payment of any transactions or claims, if any, submitted
using the Healtheon Services. Payment remains the responsibility of the
particular consumer of health care services and suppliers with which
Customer is working.
8.4.3 Content. Healtheon cannot be responsible for the accuracy,
reliability or content of any Customer or third-party's use or misuse of
any information or data transmitted, monitored, stored or received using
the Healtheon Services. Healtheon is not responsible for, and does not
verify, patient information, referral, eligibility, or claim information or
rules, insurance information, or any information entered or generated by
others.
Article 9. Errors in Healtheon On-Line Services
9.1 Procedure. The procedure for correcting Errors in Healtheon's On-Line
Services shall be set forth in the Performance Standards.
Article 10. Exclusion of Damages; Limitation of Liability.
10.1 EXCLUSION OF DAMAGES. CUSTOMER AGREES THAT IN NO EVENT WILL HEALTHEON
OR ITS SUPPLIERS OR LICENSORS BE LIABLE TO CUSTOMER OR ANY THIRD PARTY
(INCLUDING THE PROVIDERS AFFILIATED WITH CUSTOMER), UNDER ANY THEORY OF
LIABILITY, HOWEVER ARISING, FOR ANY COSTS OF COVER OR FOR INDIRECT, SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING ANY LOSS OF USE,
INTERRUPTION OF BUSINESS, LOSS OF BUSINESS PROFITS, LOSS OF BUSINESS
INFORMATION, AND THE LIKE) ARISING OUT OF THIS AGREEMENT, THE PROVISION OR USE
OF HEALTHEON SERVICES AND/OR HEALTHEON APPLICATION SOFTWARE, OR THE PROVISION OR
USE OF ANY DATA CREATED BY OR ACCESSED THROUGH THE HEALTHEON SERVICES AND/OR
HEALTHEON APPLICATION SOFTWARE, EVEN IF HEALTHEON HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY
FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED WARRANTY OR REMEDY.
10.2 LIMITATION OF LIABILITY. IF, NOTWITHSTANDING ANY OF THE OTHER
PROVISIONS OF THIS AGREEMENT (EXCLUDING CLAIMS COVERED UNDER SECTION 8.1.4),
THERE SHALL BE ANY LIABILITY OF HEALTHEON TO CUSTOMER OR ANY THIRD PARTY THAT
ARISES OUT OF OR IS IN ANY WAY CONNECTED TO THIS AGREEMENT, HEALTHEON'S
AGGREGATE LIABILITY FOR ALL DAMAGES, LOSSES AND CAUSES OF ACTION WHETHER IN
CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EITHER JOINTLY OR SEVERALLY,
SHALL NOT EXCEED THE AMOUNT PAID BY CUSTOMER TO HEALTHEON HEREUNDER DURING THE
THREE (3) MONTHS IMMEDIATELY PRECEDING THE DAY THE ACT OR OMISSION OCCURRED THAT
GAVE RISE TO THE CLAIM. THIS LIMITATION OF LIABILITY REFLECTS AN ALLOCATION OF
RISK BETWEEN THE PARTIES IN VIEW OF THE FEES CHARGED. THE LIMITATIONS IN THIS
AGREEMENT SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY.
Article 11. Term; Breach; Termination.
11.1 Initial Term and Renewals. The term of this Agreement shall commence
on the Effective Date and, unless earlier terminated as provided herein, shall
continue for three (3) years from the Effective Date (the "Initial Term"). Upon
<PAGE>
expiration of the Initial Term, the term of this Agreement shall be
automatically renewed for successive one-year periods (individually, a "Renewal
Term"), unless sooner terminated in accordance with the provisions herein.
Notice of non-renewal of this Agreement after the Initial Term must be given in
writing by a party to the other party at least ninety (90) days prior to the
commencement of any Renewal Term.
11.2 Term and Termination of Service Exhibits. Unless otherwise stated in a
Service Exhibit, the terms of the Service Exhibit shall coincide with the term
of this Agreement. In a Service Exhibit, the parties may specify circumstances
under which a party may terminate the Service Exhibit in the absence of a
material breach. Under such circumstances, unless otherwise expressly provided
in the Service Exhibit, termination will become effective upon thirty (30) days'
written notice, and Sections 11.7 and 11.8 shall apply with respect to the
subject matter thereof. Termination of a Service Exhibit shall not result in the
termination of this Agreement.
11.3 Termination for Errors. Customer may terminate this Agreement for
cause if, upon the completion of the Error Escalation Procedures, Healtheon has
failed to resolve a Severity Level I or Severity Level II Level Error (as those
terms are set forth in the Performance Standards). Customer shall provide a
written notice of breach providing specific details as to the continuing Error
that continues to exist and why Customer believes such Error constitutes a
Severity I or Severity II Level Error. Upon receipt of a notice of breach,
Healtheon shall have ninety (90) days (or such longer period of time acceptable
to Customer) in which Healtheon may in its sole discretion:
(a) Attempt to cure the Error so that it is no longer a Severity I or
Severity II Level Error;
(b) Require Customer to negotiate in good faith for a reasonable
reduction in the fees charge or to be charged Customer under this Agreement
that take in account the loss of service, functionality, or availability
occasioned by the uncorrected Error so long as it shall remain a Severity I
or Severity II Level Error; and/or
(c) Inform Customer in writing that Healtheon will not correct the
Error, and allow Customer to terminate this Agreement and receive, as
Customer's sole and exclusive remedy, the refund provided in Section 11.4.
11.4 Effect of Terminations for Errors. Within thirty (30) days after
termination of this Agreement pursuant to Section 11.3 above, Healtheon shall
pay to Customer, as Customer's sole and exclusive remedy, a pro-rata refund of
all one-time charges incurred under this Agreement prorated based upon a five
(5) year, straight line depreciation method. Healtheon may deduct from any such
payment all other sums due Healtheon from Customer. Upon termination of this
Agreement, all of Customer's rights to use the Healtheon Services or the
Healtheon Application Software shall terminate.
11.5 Terminations for Other Cause. Except for terminations governed by
Section 11.3, either party has the right to terminate this Agreement at any time
if:
(a) the other party is in material breach of any warranty, term,
condition or covenant of this Agreement and (i) fails to cure that breach
within ninety (90) days (or, in the case of a breach involving the
nonpayment of fees by Customer, ten (10) days) of receiving notice from the
non-breaching party which specifies such material breach and demands cure
thereof, or (ii) fails to provide the non-breaching party assurance that
the breach will be cured within a longer period of time which is acceptable
to the non-breaching party; or
(b) the other party (i) becomes insolvent; (ii) fails to pay its debts
or perform its obligations in the ordinary course of business as they
mature; (iii) admits in writing its insolvency or inability to pay its
debts or perform its obligations as they mature; or (iv) becomes the
subject of any voluntary or involuntary proceeding in bankruptcy,
liquidation, dissolution, receivership, attachment or composition or
<PAGE>
general assignment for the benefit of creditors; provided that if such
condition is assumed involuntarily it has not been dismissed with prejudice
within thirty (30) days after it begins.
11.6 Effective Date of Termination for Cause. Termination will become
effective under Sections 11.6 and 11.5(a) automatically upon expiration of the
cure period in the absence of a cure or mutually agreed-upon resolution, and
under Section 11.5(b) immediately upon the non-terminating party's receipt of a
notice of termination at any time after the specified event or the failure of
the specified proceeding to be timely dismissed. Termination for a breach of the
provisions of confidentiality under Article 7 above shall become effective
immediately upon receipts of written notice thereof.
11.7 Effect on Rights. Except for terminations governed by Section 11.3,
termination of this Agreement by either party shall not act as a waiver of any
breach of this Agreement and shall not act as a release of either party from any
liability for breach of such party's obligations under this Agreement. Within
thirty (30) days of termination of this Agreement, Customer shall pay to
Healtheon all sums then due and owing. Upon termination of this Agreement, all
licenses and rights to use the Healtheon Services, the Healtheon Application
Software, Healtheon Intellectual Property granted under this Agreement shall
terminate.
11.8 Return of Materials. Within thirty (30) days after the Termination of
this Agreement, (a) Customer shall return to Healtheon all copies of all
Healtheon Application Software provided hereunder, all copies of technical
materials, brochures, and marketing materials, and all other materials
pertaining to the Healtheon Services which are in Customer's possession, and all
tangible embodiments of Healtheon's Confidential Information; and (b) Healtheon
shall return to Customer all tangible embodiments of Customer's Confidential
Information.
11.9 Survival. The rights and obligations of Sections 2.5, 4.4, 4.5 and
4.6, and Articles 5, 7, 8, 9, 10, 12, 14, and 15 in their entirety shall
expressly survive expiration or any termination of this Agreement
Article 12. Defense and Indemnification.
12.1 Defense and Indemnity Relative to Infringement Claims by Third
Parties.
12.1.1 Limited Covenant to Defend. Healtheon, at its own expense and
subject to the terms and conditions of this Section 12.1, will defend
claims brought against Customer in the United States by third parties
(other than affiliates of Customer) that, if true, would constitute a
breach by Healtheon of the non-infringement representations and warranties
set forth in Subsection 8.1.4 above. The defense shall only extend to those
portions of the claim that, if true, would constitute a breach by Healtheon
of the non-infringement representations and warranties set forth in
Subsection 8.1.4 above.
12.1.2 Conditions for Healtheon Defense. To be entitled to defense by
Healtheon against a third-party infringement claim:
(a) Customer shall advise Healtheon of the existence of the
claim, by the most expeditious reasonable means, immediately upon
learning of the assertion of the claim against Customer (whether or
not litigation or other proceeding has been filed or served); and
(b) Healtheon shall have the sole right to control the defense
and/or settlement of all such claims, in litigation or otherwise,
provided that Healtheon will not enter into a settlement on behalf of
Customer without Customer's prior written approval, such approval not
to be unreasonably withheld.
<PAGE>
12.1.3 Infringement Injunctions Obtained by Third Parties. If a
third-party infringement claim, of which Healtheon was notified in
accordance with Section 12.1.2 (a) (or which Healtheon is otherwise aware),
results, or in Healtheon's reasonable opinion is likely to result, in an
injunction prohibiting Customer from continued use of the Healtheon
Services, the Healtheon Application Software, or portions thereof, then
Healtheon shall, in its sole election and at its sole expense:
(a) procure for Customer the right to continue to use the
Healtheon Services or the Healtheon Application Software;
(b) replace or modify the Healtheon Services or the Healtheon
Application Software to make them non-infringing, but, where
reasonably possible, preserving the functionality of the Healtheon
Services or the Healtheon Application Software; or
(c) direct Customer to cease use of all of or those portions of
the Healtheon Services or the Healtheon Application Software that have
been (or, in Healtheon's opinion, are likely to become) enjoined. In
such event, the parties agree to use the dispute resolution procedures
in Article 13 to determine the future reduction in the fees and
charges under this Agreement necessary to reflect the loss of
functionality while taking into account the use the Authorized Users
have enjoyed until the date the use was terminated. The foregoing
states the sole and exclusive remedy of Customer in the event
Healtheon must direct Customer to cease use of all of or those
portions of the Healtheon Services or the Healtheon Application
Software that have been (or, in Healtheon's opinion, are likely to
become) enjoined.12.1.4 Healtheon Responsibility for Expenses and
Infringement Monetary Awards. If a third-party infringement claim, of
which Healtheon was notified and which Healtheon has a duty to defend
accordance with this Section 12.1, is brought, and if such claim is
sustained in a final judgment from which no further appeal is taken or
possible, then Healtheon will pay or otherwise satisfy any monetary
award entered against Customer as part of such final judgment to the
extent such award is adjudged in such final judgment to arise from
such infringement, without regard to limitation of liability set forth
in Section 10.2.
12.2 Defense and Indemnity Obligations Relative to Other Claims.
12.2.1 Healtheon's Agreement to Indemnify. Healtheon agrees to
defend, indemnify, and hold Customer, its officers, agents, employees
and contractors, harmless from any loss, damage or expense, arising
from or otherwise in respect of any breach of any representation or
warranty of Healtheon set forth in Article 7. (Confidentiality).
12.2.2 Customer's Agreement to Indemnify. Customer agrees to
defend, indemnify, and hold Healtheon and its suppliers or licensors,
and its and their officers, agents, employees and contractors,
harmless from any loss, damage, or expense, arising from or otherwise
in respect of any breach of any obligation, representation or warranty
of Customer set forth in Article 7 (Confidentiality) and Section 8.2.
12.3 Indemnity and Defense Administrative Procedures.
12.3.1 Except for claims covered by Section 12.1.2 (a), for which
the shorter period stated therein shall apply, a party seeking to be
defended against a claim under this Article 12 (the "Invoking Party"),
shall notify the other party (the "Defending Party") within thirty
(30) days of the assertion of any claim(s) or discovery of any fact
upon which the Invoking Party intends to base a claim for defense
and/or indemnification under this Article 12. The Invoking Party's
failure to so notify the Defending Party will not relieve the
Defending Party from any liability under this Agreement to the
<PAGE>
Invoking Party with respect to defense or indemnity with respect to
such claim(s), except to the extent the Defending Party demonstrates
that the defense of such claim was prejudiced by the failure to so
notify.
12.3.2 If the Defending Party defends the Invoking Party in a
lawsuit, arbitration, negotiation, or other proceeding concerning a
claim pursuant to this Article 12, then the Invoking Party may engage
separate counsel, at the Invoking Party's expense, to monitor and
advise the Invoking Party about the status and progress of the matter,
but, with respect to any issues involved in a matter as to which the
Defending Party has acknowledged the obligation to indemnify the
Invoking Party, the Defending Party will have the sole right to
control the defense of (and/or to settle or otherwise dispose of) the
matter on such terms as the Defending Party in its judgment deems
appropriate.
12.4 Exceptions to Duties to Defend and Indemnify. Except as may be
expressly provided otherwise in this Agreement, neither party will be required
to defend or indemnify the other party with respect to losses, damages or
expenses finally adjudged to have been caused by the indemnified party's own
negligence or willful misconduct.
Article 13. Dispute Resolution.
13.1 Dispute Resolution. Except as provided in Section 13.2 below, if a
dispute, controversy, or claim arising out of, or connected with, this Agreement
or with the relationship of the parties arises, and the dispute is not resolved
by agreement between the Contract Managers, then the parties shall attempt to
resolve the dispute by means of the procedure set forth in this Article 13
before initiating any lawsuit.
13.2 Exceptions. The alternative dispute resolution requirements set forth
in this Article 13 shall not apply to claims arising out of, connected to, or
related to: (a) any infringement or misappropriation of Healtheon's Intellectual
Property Rights, and (b) any violation of the confidentiality obligations set
forth in Article 7.
13.3 Progressive Dispute Negotiation Procedures. Prior to the filing of any
suit or initiating arbitration with respect to a dispute, the party believing
itself aggrieved (the "Requesting Party") will call for progressive management
involvement in the negotiation of the dispute by notice to the other party. Such
a notice will be without prejudice to the Requesting Party's right to any other
remedy permitted by this Agreement. The parties will use their best efforts to
arrange personal meetings and/or telephone conferences as needed, at mutually
convenient times and places, between negotiators for the parties at the
following successive management levels, each of which will have a period of
allotted time as specified below in which to attempt to resolve the dispute:
<TABLE>
<S> <C> <C> <C>
HEALTHEON CUSTOMER ALLOTTED TIME
FIRST LEVEL Director / Manager Director / Manager 10 Business Days
SECOND LEVEL VP VP 10 Business Days
THIRD LEVEL CEO CEO 30 Days
</TABLE>
The allotted time for the first-level negotiators will begin on the effective
date of the Requesting Party's notice. If a resolution is not achieved by
negotiators at any given management level at the end of their allotted time,
then the allotted time for the negotiators at the next management level, if any,
will begin immediately. If a resolution is not achieved by negotiators at the
<PAGE>
final management level within their allotted time, then either party may file a
lawsuit.
Article 14. Miscellaneous.
14.1 No Reimbursement. Customer shall be responsible for its own expenses
and costs under this Agreement and that Healtheon shall have no obligation to
reimburse Customer for any expenses or costs incurred by Customer in connection
with Customer activities as they relate to this Agreement.
14.2 Force Majeure. If either party is unable to perform its obligations
under this Agreement due to circumstances beyond its reasonable control (other
than obligations for the payment of money or the maintenance of
confidentiality), including, but not limited to, acts of God, earthquakes, labor
disputes and strikes, riots, war, actions decrees of governmental bodies,
changes in applicable Laws, or communications line or power failures, such
obligations will be suspended so long as those circumstances persist, provided
that the delaying party notifies the other party promptly of the delay and its
causes and uses commercially reasonable efforts to recommence performance
without delay.
14.3 Assignment. Neither party shall assign, transfer, or otherwise
delegate any of its rights or obligations under this Agreement in whole or in
party to any individual, firm or corporation without the prior written consent
of the other party, which consent shall not be unreasonably withheld; provided
however, that either party may assign its rights and obligations hereunder
without approval of the other party to a party that succeeds to all or
substantially all of its assets (whether by sale, merger, operation of law or
otherwise), provided that such assignee or transferee agrees in writing to be
bound by the terms and conditions of this Agreement. Any assignment with consent
does not release the assignor from any of its obligations under the Agreement
unless the consent so states.
14.4 No Agency or Authority. Except as expressly provided in Section 8.2.3
when applicable, nothing in this Agreement shall be construed to create an
agency, joint venture, partnership or other form of business association between
the parties. Neither party has the right or authority to make any contract,
representation, or binding promise of any nature on behalf of the other party,
whether oral or written, without the express written consent of the other party.
14.5 No Waiver. The failure on the part of either party to exercise any
right or remedy hereunder will not operate as further waiver of such right or
remedy in the future or any other right or remedy.
14.6 Binding. This Agreement shall be binding on the parties, their
affiliated companies, subsidiaries, successors, and assigns (if any), and they
each warrant that the undersigned are authorized to execute this Agreement on
behalf of the respective party. This Agreement is also binding upon the
officers, directors, agents, employees, partners, and shareholders of the
parties and any other persons acting in concert with them.
14.7 Governing Law; Jurisdiction; Venue. The laws of the State of
California will govern this Agreement without reference to conflicts of law
principles. Jurisdiction and venue for all disputes relating to this Agreement
shall lie with the state and federal courts located in Santa Clara County,
California.
14.8 Headings. The headings in this Agreement are for purposes of reference
only and are not intended to affect the meaning or interpretation of this
Agreement.
14.9 Severability. If any provision in this Agreement is found to be
invalid, void, or unenforceable by a court of competent jurisdiction, the
remaining provisions will nevertheless continue in full force and effect, and if
<PAGE>
the invalid, void or unenforceable provision is an essential part of the
Agreement, the parties shall immediately begin negotiations for its replacement.
14.10 No Bias. This Agreement shall be interpreted as written and
negotiated jointly by the parties. It shall not be strictly construed against
either party, regardless of the actual drafter of the Agreement.
14.11 Costs, Attorneys' Fees, and Experts' Fees. In the event any
obligation of this Agreement must be enforced, through litigation or otherwise,
the prevailing party will be entitled to recover reasonable costs and expenses
incurred in enforcing the obligation, including costs, reasonable attorneys'
fees and experts' fees.
14.12 Counterparts. This Agreement may be executed in duplicate and either
copy or both copies are considered originals.
14.13 Notices. Any and all notices given under this Agreement shall be in
writing and may be effected by personal delivery, facsimile, or mail, registered
or certified, postage prepaid with return receipt requested. Notices shall be
sent to the parties at their respective addresses set forth on the first page of
this Agreement, with a copy to such party's General Counsel. Notices delivered
personally or by facsimile shall be deemed given as of actual receipt, and
mailed notices shall be deemed given as of seven (7) days after mailing.
14.14 No Representations. Each party acknowledges that it enters into this
Agreement of its own accord and does not do so on the basis of, and does not
rely on, any representation, warranty or other provision except as expressly
provided herein, and all conditions, warranties or other terms implied by
statute or common law are hereby excluded to the fullest extent permitted by
law.
14.15 Insurance. During the term of the Agreement, each party shall
maintain, either through external insurance coverage or internal self insurance,
such capability to bear risks associated with the performance of this Agreement
as is reasonable and prudent under the circumstances.
14.16 Publicity. The parties shall issue a public announcement and mutually
agreed upon press release regarding the parties' relationship and the nature of
this Agreement upon execution of this Agreement.
14.17 U.S. Government Restricted Rights. The Healtheon Service and the
Healtheon Application Software are made available only with RESTRICTED RIGHTS.
All use, duplication, or disclosure of the Healtheon Service or such software by
the government is subject to restrictions as set forth in subparagraphs
(c)(1)(ii) of the Rights in Technical Data Computer Software Clause at DFARs
252.22-70013 and/or subparagraphs c(1) and c(2) of the Commercial Computer
Software Restricted Rights Clause at 48 C.F.R. Section 52.227-19, as applicable.
The contractor/vendor/manufacturer is Healtheon Corporation, 4600 Patrick Henry
Drive, Santa Clara, California 95054, U.S.A.
14.18 Entire Agreement. This Agreement (including the attached Exhibits and
Schedules which are hereby incorporated herein by reference) constitute the
final and entire agreement between the parties, and supercedes all prior written
and oral agreements, understandings, or communications with respect to the
subject matter of this Agreement (including without limitation any memorandums
of understanding, written proposals, and term sheets). This Agreement may not be
modified except in writing signed by a duly authorized representative of each
party. The parties agree that the terms and conditions contained in this
Agreement shall prevail over any terms and conditions of any purchase order,
acknowledgment form or other instrument.
14.19 Non-Solicitation. Neither Customer nor Healtheon will, during the
initial term of this Agreement and for six (6) months thereafter, hire any
employee of the other who engage in activity directly related to this Agreement.
<PAGE>
14.20 Export. Customer shall comply with all export laws and regulations of
the Department of Commerce or other United States agency or authority, and shall
not export, or allow the export or re-export, of the Healtheon Application
Software in violation of such laws or regulations.
Article 15. Glossary.
15.1 "Authorized User" means Customer employees and contractors who have
been duly authorized by Customer to access and use the Healtheon Services.
15.2 "Authorized Uses" means access to and use of the Healtheon Services or
the Healtheon Application Software for the internal business purposes of
Customer and use in the manner specified in the end user documentation therefor.
15.3 "Change Request" means a written request provided by Customer to
Healtheon for a modification in the Healtheon Services or for Additional
Services, and as further described in Section 3.4.
15.4 "Combination Use" means use of an item in combination or conjunction
with any of the following, unless such use is shown to be infringing when not in
combination or conjunction with any of the following, or unless such use is
expressly an Authorized Use or expressly identified as non-infringing in this
Agreement:
(a) any item other than the item in question;
(b) any apparatus other than hardware; and/or
(c) any non-use activities by any person or entity.
15.5 "Confidential Information" means information that: (i) is
disclosed in writing or other tangible or intangible form to the Receiving Party
by the Disclosing Party or a third party having an obligation of confidence to
the Disclosing Party and is designated as proprietary or confidential by or on
behalf of a Disclosing Party, (ii) is not generally known in its entirety by the
relevant industry or industry segment, and (iii) affords possessors of the
information a commercial or business advantage over others who do not have the
information. Confidential Information does not include any information that:
(a) was, as of the time of its disclosure, or thereafter becomes part
of the public domain through a source other than Receiving Party;
(b) the Receiving Party can demonstrate was known to the Receiving
Party as of the time of its disclosure;
(c) the Receiving Party can demonstrate was independently developed
by the Receiving Party without use of or reference to any code,
documentation or materials provided by the Disclosing Party; or
(d) the Receiving Party can demonstrate was subsequently learned from
a third party not under a confidentiality obligation to the
Disclosing Party.
15.6 "Content" means text, graphics, audio, and audiovisual material that
may be viewed and downloaded using the Healtheon Services.
15.7 "Contract Manager" means the person designated as such pursuant to
Section 3.1 of this Agreement, and having the responsibilities set forth
therein.
15.8 "Data" means data and information submitted, transmitted, and received
using the Healtheon Services.
<PAGE>
15.9 "Disclosing Party" means the party who discloses its Confidential
Information to the other party.
15.10 "End Users" means Authorized Users, Registered Users,
Customer-Affiliated Providers, and any other third party to whom Customer has
authorized the transmittal or receipt of Data.
15.11 "Error" means an error, defect, or malfunction of the Healtheon
System or Healtheon On-Line Service that causes the Healtheon On-Line Service to
fail to operate in accordance with its associated On-Line Service
Specifications.
15.12 "Healtheon Application Software" means all computer software, if any,
developed as specified in the corresponding Service Exhibit, and any
modifications or improvements thereto provided by Healtheon hereunder.
15.13 "Healtheon Services" mean the services defined to be Healtheon
Services in the Service Exhibit, and all updates, modifications, and
improvements thereto provided by Healtheon to Customer hereunder.
15.14 "Healtheon System" means the entire system, including all related
hardware and software, and Healtheon Application Software, now or hereafter
developed and operated by or for Healtheon to host, maintain and support
Healtheon Services, including all updates, improvements, and modifications
thereto.
<PAGE>
15.15 "Intellectual Property " means all worldwide intangible legal rights
or interests evidenced by or embodied in (a) any idea, design, concept, method,
process, technique, apparatus, invention, discovery, or improvement, including
any patents, trade secrets, and know-how; (b) any work of authorship, including
any copyrights, moral rights or neighboring rights; (c) any trademark, service
mark, trade dress, trade name, or other indicia of source or origin; and (d) any
other similar rights.
15.16 "Laws" mean all laws, statutes, rules, regulations, decrees,
practices, and all other requirements of any kind or nature that are applicable,
directly or indirectly, to a party whether implemented by any federal, state, or
local government body, department, agency, bureau or division or by any trade
association, industry organization or other body, the rules of which, are
binding upon the party.
15.17 "Marks" means trademarks, service marks, trade names, logos and such
other business identifiers.
15.18 "Performance Standards" mean the service level and response time
requirements for the Healtheon On-Line Services as will be set forth in Schedule
5 of the corresponding Service Exhibit.
15.19 "Practice" means Healtheon's Internet-based portal service that
allows for the secure communication between physicians and other healthcare
organizations (e.g., payers, managed care organizations, labs, pharmacies) for
the purpose of managing the business functions and clinical work of healthcare.
Practice is provided by Healtheon to physicians and their staff members under
the terms and conditions of the Practice Website Use Agreement, which Healtheon
may modify from time to time.
15.20 "Provider" means any entity licensed to provide healthcare services,
including, but not limited to a physician, hospital, lab, nurse practitioner and
the like.
15.21 "Provider Network" means the network of providers under contract with
Customer to provide discounted medical services to consumers who register for
Customer's Provider Network via the On-Line Services.
15.22 "Receiving Party" means a party who is accepting or receiving
Confidential Information from the other party.
15.23 "Registered Users" means those authorized members of a Subscriber's
staff who have agreed to the terms and conditions of the Healtheon's Practice
Website Use Agreement.
15.24 "On-Line Service Specifications" means the document that
describes the functions and features of the On-Line Services, as specified in
the corresponding Service Exhibit.
15.25 "Subscriber" means a Customer-affiliated physician that has agreed to
the terms and conditions of the Healtheon Website Use Agreement.
15.26 "Third Party Content" means the text, graphics, audio, and
audiovisual elements that are proprietary to third parties and may be viewed and
downloaded using the Healtheon Services or the Healtheon Application Software.
An example of Third Party Content is textual works that are contained on third
party web sites, but which may be accessed through a hypertext link.
15.27 "Y2K Compliant" means the ability of the Healtheon Application
Software to calculate and compare date data between the twentieth and
twenty-first centuries (including calendar dates for leap years), without
impairment in the functioning of the Healtheon Application Software, when used
in accordance with its documentation, but only if all associated systems
<PAGE>
necessary for the installation, operation, use and maintenance of the Healtheon
Application Software (e.g., computer hardware, computer software, Internet
connectivity, and communication systems) properly exchange date data with the
Healtheon Application Software.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and do each hereby warrant and represent that their respective
signatory whose signature appears below has been and is on the date of this
Agreement duly authorized by all necessary and appropriate corporate action to
execute this Agreement.
HEALTHEON CORPORATION ALTERNATIVE TECHNOLOGY
RESOURCES, INC.
By: ______________________ By: ____________________________
Name: ______________________ Name: ____________________________
Title: ______________________ Title: ____________________________
Date: ______________________ Date: ____________________________
<PAGE>
SERVICE EXHIBIT A
Development Services
This Service Exhibit A is entered into as of the 16 day of September,
1999, by and between Healtheon Corporation, a Delaware corporation with its
principal offices at 4600 Patrick Henry Drive, Santa Clara, California, 95054
("Healtheon") and Alternative Technology Resources, Inc., a Delaware corporation
with offices at 629 J Street, Sacramento, California 95814 ("Customer"). This
Service Exhibit incorporates by reference the terms and conditions of the
Healtheon Customer Agreement dated September 16th, 1999, entered into between
Healtheon and Customer ("Agreement").
Agreement
1. Services
1.1 Specifications; Project Plan. In consultation with Customer, Healtheon
will prepare refined written specifications ("Specifications") for
Internet-based registration services meeting the requirements set
forth in Schedule 1. For the purposes of this Agreement, "Healtheon
Application Software" includes all software developed by Healtheon to
meet the Specifications. The Specifications shall include a more
detailed description of the feature and function requirements, the
design for the user interface, and the workflow and other requirements
for integration of the Healtheon Application Software with Customer's
Provider Search Application and Provider Database. The Specifications,
however, shall not materially differ from Schedule 1. Healtheon will
also consult with Customer to prepare a written project plan ("Project
Plan") that will describe in detail the parties' respective
Responsibilities, Deliverable Materials, and associated time schedules
and dependencies relating to the Development of the Healtheon
Application Software. Upon completion of the Specifications or Project
Plan document, Healtheon shall submit the document to Customer for
formal written approval, such approval not to be unreasonably
withheld. If accepted by Customer, the Specifications and Project Plan
shall form part of the Agreement and shall be attached to this Service
Exhibit as, respectively, Schedules 4 and 5. Failure by Customer to
provide written notice of non-acceptance within ten (10) days shall be
deemed acceptance. If the parties are unable to agree in writing to
mutually acceptable Specifications and Project Plan on or before
ninety (90) days after the Effective Date, either party may terminate
the Agreement pursuant to Section 11.2 of the Agreement. Such
termination shall not relieve Customer from its obligation to pay
Healtheon for all fees due and owing Healtheon as of the date of such
termination. Unless expressly provided to the contrary in the
Specifications or Project Plan, the terms and conditions of this
Service Exhibit and associated Schedules shall control over those of
the Specifications and/or Project Plan.
1.2 Development. Following Customer's acceptance of the Specifications and
the Project Plan, the parties agree to use commercially reasonable
efforts to complete the Development of the Healtheon Application
Software in accordance with the Project Plan, and to perform their
respective Responsibilities and to provide to the other party their
Deliverable Materials within the time frames set forth in the
Estimated Schedules. The parties acknowledge and agree that the
Estimated Schedule and such other mutually agreed upon time frames are
good faith estimates, and it shall not be a breach of the Agreement if
<PAGE>
the Healtheon Application Software is not developed by the times set
forth therein.
1.2.1 Prototype. In accordance with the Project Plan, Healtheon will
render services to develop a prototype of the Healtheon
Application Software ("Prototype"). Healtheon shall use
combinations of technology as Healtheon, in consultation with
Customer, deems appropriate to develop the Healtheon Application
Software.
1.2.2 System Testing and Final Acceptance. In accordance with the
Project Plan, the parties will mutually agree upon a Test Plan
and Acceptance Criteria for the Healtheon Application Software.
Customer shall have thirty (30) days (or such time as otherwise
agreed by the parties in writing) from the date of written notice
of completion of the Prototype to review, perform System Testing
in accordance with the Test Plan, and make any Change Requests
for revisions to the Prototype pursuant to Section 3.3 of the
Agreement. Customer will give notice of its acceptance or
rejection of the Prototype on or before the end of this thirty
(30) day period. Customer shall accept the Prototype if it
substantially meets the Acceptance Criteria. If Customer
determines that the Prototype does not substantially conform to
the Acceptance Criteria, Customer shall notify Healtheon in
writing of the non-conformities identified by Customer. If
Customer notified Healtheon of such non-conformities within the
thirty (30) day period, Healtheon will correct and document to
Customer the corrective actions within thirty (30) days after its
receipt of such notice. Upon receiving written notice of
completion of such corrective actions, Customer shall immediately
retest the Prototype in accordance with the Test Plan and provide
notice of acceptance or rejection as set forth above. The
foregoing testing and acceptance cycle shall be repeated up to
four (4) times before invocation of any other remedy in this
Agreement by Customer. Failure to provide notice of acceptance or
rejection with fifteen (15) days following completion of System
Testing shall be deemed acceptance by Customer of the Prototype.
1.2.3 Completion of Project Plan. The Project Plan shall specify
"Completion Criteria" for the tasks described therein. Each party
shall have met its obligations under the Project Plan upon
satisfying in all material respects such Completion Criteria.
During the Development and testing of the Prototype, the parties
agree to work together to determine the cause of any performance
problems, and to rectify such performance problems. Upon the
successful completion of the Project Plan, and provided that each
party has approved the performance and reliability of the
Healtheon Application Software in writing (and such approval
shall not be unreasonably withheld), Customer may proceed with
using the Healtheon Services as described in Service Exhibit B.
1.3 Launch. Following Customer's final acceptance of the Healtheon
Application Software, Healtheon will Launch the On-Line Services (as
defined in Service Exhibit B) nationwide upon (a) Customer's
achievement of the Minimum National Provider Network Requirement or
(b) six (6) months from the final acceptance date, whichever is
earlier. Healtheon shall have the option, in its sole discretion, to
do a Partial Launch of the On-Line Services in targeted Medical
Trading Areas, provided that at least twenty (20) percent of the
mutually agreed upon targeted Providers in the Medical Trading Area
<PAGE>
have agreed to participate in Customer's Provider Network. "Launch"
means to make the On-Line Services nationally available through the
Healtheon Consumer Portal, and "Partial Launch" means to make the
On-Line Services available through the Healtheon Consumer Portal to
Registered Consumer Users in targeted Medical Trading Areas specified
in Schedule 3. Upon the Partial Launch or Launch, whichever is
earlier, Healtheon will provide the On-Line Services to Customer in
accordance with the terms and conditions of Service Exhibit B for
Registration Services executed herewith.
1.4 Other Services. Customer may from time to time request Healtheon to
perform one or more services not described in this Service Exhibit
("Additional Services"), including, but not limited to, requests to
enhance the Healtheon Application Software, under such terms and
conditions as may be mutually agreed upon by the parties. Such
Additional Services and mutually agreed upon terms and conditions will
be set forth in a written Statement of Work ("SOW") that references
this Agreement and is signed by both parties. In the event of a
conflict, the terms and conditions of this Agreement shall override
those of the SOW unless expressly provided otherwise in the SOW.
Additional Services shall be subject to a time and materials charge,
plus reasonable travel and related expenses incurred by Healtheon
personnel in performing such Additional Services. Additional Services
may be rendered or refused by Healtheon in its sole discretion.
2. Fees.
2.1 Development Fees. Customer shall pay Healtheon all fees, charges, and
expenses set forth in Schedule 2.
2.2 Other Costs. Except for amounts payable by Customer as set forth in
Schedule 2, each party shall bear its own costs related to its
activities hereunder.
3. Additional Provisions.
3.1 Healtheon Property. All worldwide rights (including, without
limitation, all Intellectual Property Rights), titles, and interests,
in and to the Healtheon Application Software and related work product
developed hereunder (including, but not limited to, the Specifications
and Project Plan) shall constitute Healtheon Property. Customer shall
have only such rights to use such Healtheon Property, as expressly
provided in this Agreement.
3.2 Provider Search Application and Provider Database. Customer is solely
responsible for providing at its own expense Provider Search
Application and Provider Database meeting the requirements set forth
in the Specifications in the time frames specified in the Project
Plan. The parties acknowledge and agree that the Estimated Schedule
and such other mutually agreed upon time frames are good faith
estimates, and it shall not be a breach of the Agreement if the
Provider Search Application is not provided by the times set forth in
the Project Plan. Such Specifications will require the Provider Search
Application and Provider Database to be able to interface with the
Healtheon Application Software via standard Application Program
Interfaces (APIs). Customer shall install, host, maintain, and operate
<PAGE>
the Provider Search Application and Provider Database at its own data
center. Customer shall retain all Intellectual Property Rights to the
Provider Search Application and Provider Database.
3.3 Interface Between Healtheon System and Provider System. Healtheon
hereby grants to Provider a limited non-exclusive, non-transferable,
non-sublicenseable, royalty-free perpetual license to use the
specifications for the Interface between the Healtheon System and
Customer's application system developed hereunder for its internal
business purposes.
4. Glossary.
4.1 "Acceptance Criteria" means the criteria that the Healtheon
Application Software meets the Specifications in all material
respects.
4.2 "Completion Criteria" means criteria designated as Completion Criteria
in the Project Plan.
4.3 "Deliverable Materials" means the documents, resources, information,
approvals, and other materials designated as Deliverable Materials in
the Project Plan.
4.4 "Estimated Schedule" means the estimated schedule for completion of
the Project Plan.
4.5 "Healtheon Consumer Portal" means Healtheon's Internet-based portal
service that provides healthcare related information and services to
consumers. The Healtheon Consumer Portal is provided by Healtheon to
consumers under the terms and conditions of the Consumer Portal
Website Use Agreement, which Healtheon may modify from time to time.
4.6 "Healtheon Services" means the "Development Services", i.e., the
project management, planning, service design and definition,
development, testing, integration and implementation services
Healtheon agrees to provide Customer as part of the Project Plan
(including, without limitation, preparation of the Specifications and
Project Plan).
4.7 "Medical Trading Area" means a geographic region in the United States
defined by Healtheon in connection with its service offerings. The
targeted Medical Trading Areas are specified in Schedule 3.
4.8 "Member" means an individual who has successfully completed the
enrollment process for Customer's Provider Network and has been issued
a confirmation number via the On-Line Services.
4.9 "Minimum National Provider Network Requirement" means 100,000 primary
care Providers have contracted with Customer to provide discounted
services through Customer's Provider Network in the major metropolitan
areas of the United States.
4.10 "Provider Database" means the database provided, operated, and
maintained by Customer that contains information and data relating to
Customer's Provider Network, the Providers in the Provider Network,
and the discounted services available through the Provider Network.
The Provider Database must meet the applicable requirements set forth
in the Specifications.
<PAGE>
4.11 "Provider Search Application" means the software application provided,
operated, and maintained by Customer that provides search capabilities
for Customer's Provider Database. The Provider Search Application must
meet the applicable requirements set forth in the Specifications.
4.12 "Registered Consumer User" means an individual who has successfully
completed the enrollment process for the Healtheon Consumer Portal and
has been issued an account and password.
5. Schedules. The following Schedules are incorporated by reference and made
part of this Service Exhibit:
Schedule 1: Healtheon Application Software Specifications
Schedule 2: Pricing and Payment
Schedule 3: Targeted Medical Trading Areas
The parties may agree on additional Schedules which, when executed by
both parties, shall become a part of this Service Exhibit.
IN WITNESS WHEREOF, the parties have caused this Service Exhibit to be
executed and do each hereby warrant and represent that their respective
signatory whose signature appears below has been and is on the date of this
Service Exhibit duly authorized by all necessary and appropriate corporate
action to execute this Service Exhibit.
HEALTHEON CORPORATION ALTERNATIVE TECHNOLOGY
RESOURCES, INC.
By: By:
-----------------------------------------
Name: Name:
---------------------------------------
Title: Title:
--------------------------------------
Dated: Dated:
--------------------------------------
<PAGE>
SERVICE EXHIBIT B
Registration Services
This Service Exhibit B is entered into as of the 16th day of September,
1999, by and between Healtheon Corporation, a Delaware corporation with its
principal offices at 4600 Patrick Henry Drive, Santa Clara, California, 95054
("Healtheon") and Alternative Technology Resources, Inc. a Delaware corporation
with offices at 629 J Street, Sacramento, California 95814 ("Customer"). This
Service Exhibit incorporates by reference the terms and conditions of the
Healtheon Customer Agreement dated September 16, 1999, entered into between
Healtheon and Customer ("Agreement").
Agreement
1. Services.
1.1 On-Line Services. For the purposes of this Service Exhibit, "On-Line
Services" means the Registration Services generally described in
Schedule 1. Healtheon will provide the On-Line Services to Customer in
accordance with the terms and conditions of the Agreement.
1.2 Support Services. Prior to the Launch of the On-Line Services,
Healtheon will prepare a Schedule describing such support services. If
accepted by Customer, such document will be attached to this Service
Exhibit as Schedule 4.
1.3 Other Services. Customer may from time to time request Healtheon to
perform one or more services not described in this Service Exhibit
("Additional Services") under such terms and conditions as may be
mutually agreed upon by the parties. Such Additional Services and
mutually agreed upon terms and conditions will be set forth in a
written Statement of Work ("SOW") that references this Agreement and
is signed by both parties. In the event of a conflict, the terms and
conditions of this Agreement shall override those of the SOW unless
expressly provided otherwise in the SOW. Additional Services shall be
subject to a time and materials charge, plus reasonable travel and
related expenses incurred by Healtheon personnel in performing such
Additional Services. Additional Services may be rendered or refused by
Healtheon in its sole discretion.
2. Provider Network.
2.1 Generally. Customer is solely responsible for the development,
administration, and operation of Customer's Provider Network,
including, but not limited to, marketing, contracting with Providers
to provide discounted services to Members, and except for
Registration, processing all transactions arising from or related to
the provision or receipt of services through Customer's Provider
Network. Customer agrees to focus its efforts to develop the Provider
Network in the targeted Medical Trading Areas specified in Schedule 3.
Customer acknowledges and agrees that Healtheon cannot be responsible
for the quality of services provided to Members by Customer-affiliated
Providers, the results therefrom, or payment or non-payment of or for
such services. Accordingly, Customer shall defend, indemnify and hold
Healtheon harmless from and against any claim, loss, damage, demand,
action, or expense (including attorneys' fees) arising out of or
<PAGE>
related to the use of Customer's Provider Network by Members and/or
the provision of services by Customer-affiliated Providers.
2.2 Provider Search Application and Provider Database. Customer is solely
responsible for providing, updating, maintaining, supporting, and
operating at its own expense the Provider Search Application and
Provider Database. Customer acknowledges and agrees that the Provider
Database and Provider Search Application are necessary to support the
On-Line Services-the Provider Database contains the information about
Customer's Provider Network, and the Provider Search Application runs
the queries sent by consumers via the On-Line Services against the
Provider Database and retrieves the search results to be transmitted
to Customer via the On-Line Services. Customer represents and warrants
that the Provider Search Application and Provider Database shall meet
or exceed mutually agreed upon written Performance Standards, which
will be attached to this Service Exhibit as Schedule 5. In the event
Customer desires to purchase hosting services from Healtheon for the
Provider Search Application and Provider Database, the parties shall
execute the then current Hosting Services Service Exhibit, and
Healtheon shall render hosting services pursuant to the terms and
conditions of such agreement. Customer shall defend, indemnify and
hold Healtheon harmless from and against any claim, loss, damage,
demand, action, or expense (including attorneys' fees) arising out of
or related to any errors or omissions in the Provider Search
Application and/or Provider Database and/or any third party claims
that the use of the Provider Search Application and/or the Provider
Database as contemplated hereunder violates third party Intellectual
Property Rights.
2.3 Member Status Changes. Customer is responsible for notifying Healtheon
via the On-Line Services of any changes in the status of Members that
would affect their use of the On-Line Services, including, but not
limited to, termination of their membership in Customer's Provider
Network.
3. Co-Marketing.
3.1 Joint Marketing. The parties agree to jointly market Practice and the
related On-Line Services to existing and prospective
Customer-affiliated Providers as will be described in Schedule 6.
Healtheon agrees that during the first year of this Agreement, it will
underwrite the Practice subscription fee for Providers who subscribe
to Practice as a result of such marketing efforts. Such subscription
fees shall be underwritten for one (1) year from the date the Provider
subscribes to Practice. Each party will bear its own expenses
associated with such joint marketing efforts.
3.2 Promotional Announcement. Healtheon will place a hyperlink (consisting
of Customer's name, Mark, and/or other brand indicia) on either the
Healtheon Consumer Portal or Practice, as will be mutually agreed upon
by the parties. The hyperlink will lead to a promotional announcement
for Customer's Provider Network and the On-Line Services. Customer is
responsible for providing the content of the announcement. Healtheon,
however, shall retain sole discretion over the placement and format of
the hyperlink and the announcement. Both parties must approve the
<PAGE>
promotional announcement before it is implemented, and such approval
shall not be unreasonably withheld. Healtheon will display the
hyperlink and promotional teaser until the Launch of the On-Line
Services. In the event of a Partial Launch, Healtheon will replace the
promotional announcement with the actual On-Line Services for
Registered Consumer Users in the targeted Medical Trading Areas;
however, the promotional announcement will continue to run for all
other users until the national Launch.
3.3 Co-branding. Customer will be entitled to Co-Branding on the Healtheon
Consumer Portal. "Co-Branding" means that Customer's name, Mark,
and/or other brand indicia will appear on a non-exclusive basis (i.e.,
with other third party brands) on a web page within the Healtheon
Consumer Portal. Customer's brand will be hyperlinked to the On-Line
Services. Customer will also be entitled to Co-Branding on the web
pages for the On-Line Services. Healtheon shall have sole discretion
over the placement and format of all such Co-Branding. All Co-Branding
will be consistent with Healtheon's then current Co-Branding
guidelines. Nothing in this Agreement shall restrict Healtheon's right
to place third party Marks or other brand indicia on Healtheon
Consumer Portal web pages.
3.4 Marketing Materials. Healtheon may, in its sole discretion, provide
Customer with information and materials to use in creating brochure(s)
describing Practice and the related On-Line Services. Customer may
modify, at its sole expense, such materials to make them consistent
with its other material but may not substantially change the content
of such materials without Healtheon's prior written approval. Customer
shall submit pre-production samples of any advertising, merchandising,
promotional or display materials containing all or a portion of the
marketing materials or describing Practice (collectively "Marketing
Materials") to Healtheon, for Healtheon's evaluation and approval as
to quality, style, appearance, usage of any Healtheon Marks, and
accuracy of the information, prior to any actual production, use or
distribution of Marketing Materials by Customer. Subject to
Healtheon's prior written approval as set forth above, Customer shall
have the right to distribute such approved Marketing Materials to its
Customer-affiliated Providers solely in conjunction with the
identification, marketing, and promotion of Practice. All use of
Healtheon Marks by Customer accrues to the benefit of Healtheon.
3.5 Use of Customer Marks. Customer shall permit Healtheon to use Customer
Marks in the course of performance of this Agreement solely for the
purposes of marketing Healtheon services to consumers. Customer hereby
grants to Healtheon a non-exclusive, royalty-free, world-wide license
to use such Customer Marks as expressly permitted under this Section
3. All use of Customer Marks by Healtheon accrues to the benefit of
Customer. Customer warrants that Healtheon has the right to use any
such Customer Marks as contemplated by this Agreement, and that
Customer has or shall undertake appropriate measures to ensure the
same. Customer shall defend, indemnify and hold Healtheon harmless
from and against any claim, loss, damage, demand, action, or expense
(including attorneys' fees) arising out of or related to Customer's
breach of the foregoing warranties or any third party claim arising
from Healtheon's use of Customer Marks as allowed under this Section
3.
3.6 No Endorsement. Customer acknowledges and agrees that it shall not
make any representation suggesting that Healtheon endorses or
recommends in any way Customer, Customer-affiliated Providers,
<PAGE>
Customer's Provider Network, and/or the services provided thereunder.
Customer further acknowledges and agrees that Healtheon reserves the
right to place notices to that effect in the On-Line Services.
4. Fees.
4.1 Service Fees. Customer agrees that the Annual Service Fee is due and
payable to Healtheon as set forth in Schedule 2. The Annual Service
Fee is subject to renegotiation on an annual basis, as calculated from
the Launch date.
4.2 Other Costs. Except for the amounts payable by Customer and by
Healtheon as set forth in Schedule 2, each party shall bear its own
costs related to its activities hereunder.
5. Additional Provisions.
5.1 Notices; Terms of Use. Healtheon reserves the right to place legal
notices on the On-Line Services and/or to require consumers,
Customer-affiliated Providers, and/or Customer's Authorized Users to
agree to a terms of use agreement as a condition to accessing and
using the On-Line Services.
5.2 Modification of Services. Healtheon agrees that it will not materially
withdraw or modify the On-Line Services before six (6) months after
the Launch date.
5.3 Registration Fee. Customer is responsible for notifying Healtheon of
the Registration Fees it charges consumers to become a Member of
Customer's Provider Network. Healtheon will charge such Registration
Fees to consumer's credit cards as part of the On-Line Services. The
parties agree that a portion of the Annual Service Fees due to
Healtheon for the services provided hereunder shall be deducted from
the Net Registration Revenue collected by Healtheon, as set forth in
Schedule 2. "Net Registration Revenue" means the Registration Fees
collected by Healtheon after deducting all amounts for (a) any credit
card processing charges; (b) applicable taxes; and (c) any charge
backs, rejections, or cancellations of previously validated credit
card charges. Notwithstanding the foregoing, Customer shall bear all
the risk for any partial or whole refunds of the Registration Fee
resulting from voluntary (e.g., by Customer's choice) or involuntary
(e.g., by Customer) cancellations of membership in Customer's Provider
Network, and no such amounts shall be set-off against gross
Registration Revenue.
5.4 Customer-Provider Contracts. The terms and conditions of Customer's
contracts with Providers relating to Customer's Provider Network shall
constitute Customer's Confidential Information.
6. Glossary.
6.1 "Healtheon Consumer Portal" means Healtheon's Internet-based portal
service that provides healthcare related information and services to
<PAGE>
consumers. The Healtheon Consumer Portal is provided by Healtheon to
consumers under the terms and conditions of the Consumer Portal
Website Use Agreement, which Healtheon may modify from time to time.
6.2 "Healtheon Services" means, collectively, the On-Line Services and the
Support Services.
6.3 "Medical Trading Area" means a geographic region in the United States
defined by Healtheon in connection with its service offerings. The
targeted Medical Trading Areas are specified in Schedule 3.
6.4 "Member" means an individual who has successfully completed the
enrollment process for Customer's Provider Network and has been issued
a confirmation number via the On-Line Services.
6.5 "Provider Database" means the database provided, hosted, operated, and
maintained by Customer that contains information and data relating to
Customer's Provider Network, the Providers in the Provider Network,
and the discounted services available through the Provider Network,
and all updates, modifications, and improvements thereto made by or
for Customer. The Provider Database must meet the applicable
requirements set forth in the Specifications.
6.6 "Provider Search Application" means the software application provided,
operated, and maintained by Customer that provides search capabilities
for Customer's Provider Database, including all updates,
modifications, and improvements made thereto by or for Customer. The
Provider Search Application will use the queries received via the
On-Line Services to search and retrieve relevant information from the
Provider Database, which will be presented to consumers via the
On-Line Services. The Provider Search Application must meet the
applicable requirements set forth in the Specifications.
6.7 "Registered Consumer User" means an individual who has successfully
completed the enrollment process for the Healtheon Consumer Portal and
has been issued an account and password.
6.8 "Registration Fee" means the fee Customer charges consumers to enroll
in Customer's Provider Network and to be eligible to receive
discounted services from Customer-affiliated Providers.
7. Schedules. The following Schedules are incorporated by reference and made
part of this Service Exhibit:
Schedule 1: Healtheon Registration Services Specifications
Schedule 2: Pricing and Payment
Schedule 3: Medical Trading Areas
The parties may agree on additional Schedules which, when executed by
both parties, shall become a part of this Service Exhibit.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Service Exhibit to be
executed and do each hereby warrant and represent that their respective
signatory whose signature appears below has been and is on the date of this
Service Exhibit duly authorized by all necessary and appropriate corporate
action to execute this Service Exhibit.
HEALTHEON CORPORATION ALTERNATIVE TECHNOLOGY
RESOURCES, INC.
By: By:
Name: Name:
Title: Title:
Dated: Dated:
