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EXHIBIT 10.01
[*]--Certain information omitted and filed separately with the Commission
pursuant to a confidential treatment request under Commission Rule 24b-2
DATA RIGHTS AGREEMENT
THIS DATA RIGHTS AGREEMENT (the "AGREEMENT") is made and entered into
as of May 26, 2000 by and between HEALTHEON/WEBMD CORPORATION, a Delaware
corporation ("HEALTHEON"), and QUINTILES TRANSNATIONAL CORP., a North Carolina
corporation ("QUINTILES").
References in this Agreement to "schedules" refer to the documents
attached as schedules to this Agreement, all of which form part of this
Agreement; and unless otherwise indicated, references to "articles" or
"sections" refer to the corresponding numbered articles and sections of this
Agreement. As used in the body of this Agreement, the term "Healtheon" shall be
deemed to include Healtheon and all of its Affiliates (as defined in Article I
below).
BACKGROUND
(a) Quintiles provides product development and
commercialization solutions, healthcare informatics services, and healthcare
policy consulting to the healthcare industry worldwide.
(b) Healtheon is applying advanced Internet technology to
enable healthcare providers and consumers to interact with each other and the
institutions of healthcare online.
(c) Healtheon and Quintiles are parties to an Agreement and
Plan of Merger dated as of January 22, 2000 (the "MERGER AGREEMENT") pursuant to
which they have agreed, among other things, for Quintiles' wholly owned
subsidiary Envoy Corporation ("Envoy") to become a wholly owned subsidiary of
Healtheon by merger (the "ENVOY MERGER").
(d) As a principal component of the transactions surrounding
the Merger Agreement, Quintiles desires to secure the right and license from
Healtheon, effective upon consummation of the Envoy Merger, to develop and
commercialize Data Products based on data available to Healtheon by virtue of
Healtheon's Transaction Business (including without limitation that acquired
through Envoy) and other healthcare businesses, all as provided below.
NOW, THEREFORE, in consideration of their respective
agreements set forth in this Agreement and of other good and valuable
consideration, the receipt and legal sufficiency of which they acknowledge, and
intending to be legally bound, Healtheon and Quintiles agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the respective meanings set forth below:
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(a) "ACCESS SPECIFICATIONS" means the schedule, method,
medium, format, structure, organization, archival, mapping, and other
logistical, technical, legal, and other parameters by which Healtheon will
provide Quintiles electronic access to and copies of the Licensed Data. The
Access Specifications will be determined by the parties and may be modified from
time to time pursuant to Section 2.2(a).
(b) "AFFILIATE" of a Person means a Person controlling,
controlled by or under common control with such Person at any time as of or
after the date of this Agreement and, with respect to Healtheon, shall include
WebMD International, LLC, Healtheon's international joint venture with an
affiliate of The News Corporation Limited.
(c) "CONFIDENTIAL INFORMATION" means and includes all
information disclosed under this Agreement by either party to the other (subject
to the exceptions defined below), including without limitation all business and
product plans, marketing information, and other business information so
disclosed; provided, however, that the Licensed Data shall constitute
Confidential Information of Healtheon except as and to the extent reflected in
Data Products commercialized by Quintiles under authority of this Agreement.
Notwithstanding the foregoing, the following shall not constitute Confidential
Information: information which (1) is known by the receiving party prior to
disclosure by the disclosing party; (2) is or becomes available publicly other
than as a result of a breach of this Agreement; (3) is developed independently
by the receiving party without the use of or reliance on the disclosing party's
Confidential Information; or (4) is provided to the receiving party by a third
party under no duty of confidentiality to the disclosing party.
(d) "DATA PRODUCT" means any product created for the purpose
of sale or licensing to one or more third Persons which is based on the
selective or strategic extraction, compilation, assimilation, manipulation,
analysis, and/or presentation of aggregate De-Identified Data of the type that
comprises the Licensed Data, with a view toward creation of a derivative
compilation of data (or analytical conclusions thereon) having commercial
utility. The term Data Product also shall include the sale or licensing of
Licensed Data in a raw format data feed or any other form.
(e) "DE-IDENTIFICATION" means the process of removing, coding,
encrypting or otherwise eliminating or concealing the data elements that makes
Licensed Data individually identifiable to a particular patient or consumer, and
includes the removal or concealing of any data elements specifically required by
Law or contractual obligation to be removed or concealed to make Licensed Data
not individually identifiable as to the patient or consumer or other elements of
the Licensed Data that are required by law to be de-identified.
(f) "DE-IDENTIFIED DATA" means Licensed Data that has been
through the De-Identification process. For the avoidance of doubt, De-Identified
Data only de-identifies data elements that make the Licensed Data individually
identifiable to a particular patient or consumer (unless other elements of the
Licensed Data are required by Law to be de-identified), and those data elements
(other than patient or consumer identifying data) of the Licensed Data that are
not required to be de-identified constitute De-Identified Data notwithstanding
their identifiable format. By way of example, and without limitation, specific
identifiable data such as the names of specific pharmacies, physicians,
hospitals and payors constitute De-Identified Data once the corresponding
Licensed Data has been through the De-Identification process, provided that such
items are not
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required by Law to be de-identified. Licensed Data will also be considered
De-Identified Data for purposes of this Agreement if the particular data set
does not contain patient or consumer identifying data or any data elements that
require de-identification pursuant to applicable Law and, accordingly, such data
set does not go through the De-Identification process.
(g) "EFFECTIVE TIME" means the effective time of the Envoy
Merger, determined according to the Merger Agreement.
(h) "FIELD OF USE" means on a worldwide basis the development
of Data Products based on or including Licensed Data and commercialization or
delivery of such Data Products to (1) the pharmaceutical industry, including
without limitation pharmaceutical, biotechnology, genomics, and other companies
in the business of research, development, production, manufacturing, marketing,
sale, distribution, or other commercialization of pharmaceutical products or
medical devices, as well as to foundations, government agencies, universities,
private individuals, or others engaged in research regarding drug efficacy,
epidemiology, disease control, diagnostic patterns, and similar areas of inquiry
that in each case are related to pharmaceutical use and medical outcomes, and
(2) physicians, patients, hospitals, health maintenance organizations,
governmental entities, and other healthcare consumers, providers, pharmacies,
and payors.
(i) "LAW" means any United States federal, state, local or
foreign law, statute, regulation, ordinance, order, judgment, decree, rule or
other applicable governmental or judicial restriction or requirement, and any
judicial or administrative interpretation or determination with respect thereto.
(j) "LICENSED DATA" means all of the following transmitted to,
from, or through or otherwise received, possessed or controlled from time to
time by or for the benefit of Healtheon to the extent Healtheon is not
prohibited by applicable Law or contractual arrangement from providing such data
to Quintiles under this Agreement, regardless of the medium of or circumstances
giving rise to transmission: (1) Transaction Data and (2) other data concerning
(A) the health, medical condition, or treatment of actual, specific people, (B)
the behavior of actual, specific people intended to treat, maintain, or
otherwise influence their health or medical conditions, or (C) the providing of
health care or reimbursement or payment therefor with respect to actual,
specific physicians, hospitals, health maintenance organizations, governmental
entities, and other providers, pharmacies, and payors.
(k) "PERSON" means any person or entity.
(l) "STEERING COMMITTEE" means the oversight committee formed
pursuant to Section 7.1.
(m) "TRANSACTION BUSINESS" refers to the business of
processing or facilitating the processing of transactions, of the following
type: reimbursement, indemnity, or payment or other related claims or encounters
by and among physicians, hospitals, health maintenance organizations,
governmental entities, and other providers, pharmacies, and payors, as well as
eligibility, adjudication, referrals, formulary checks, and similar
transactions, irrespective of the manner, mode, communications method or
platform through which such business is conducted from time to time, and giving
effect to evolutionary or other developments in the scope of and manner in which
such
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business generally is conducted going forward. Without limiting the foregoing,
the term "Transaction Business" includes the business conducted as of the date
of this Agreement (and evolutions thereof) by Envoy and by Healtheon's Affiliate
MedeAmerica, Inc.
(n) "TRANSACTION BUSINESS SERVICE AGREEMENT" means an
agreement to render Transaction Business services for a customer.
(o) "TRANSACTION DATA" means all data transmitted to, from, or
through or otherwise received or possessed by or for the benefit of Healtheon
from transactions processed or facilitated in the conduct of its Transaction
Business.
ARTICLE II
DATA PRODUCTS
2.1 LICENSE.
(a) Grant. Subject to the terms and conditions of this
Agreement, Healtheon hereby grants Quintiles, effective as of the Effective
Time, an irrevocable, perpetual, worldwide right and license to use the Licensed
Data (after its De-Identification according to Section 2.2(a)(2)) to develop,
license, sell, and otherwise commercialize Data Products, and in connection
therewith to receive, collect, possess, process, combine, analyze, and transfer
the Licensed Data to third parties. This license includes the right to
sublicense, subject to Section 7.9 below.
(b) Exclusivity. Subject to Section 2.1(d) below, Healtheon
shall not (i) grant any right or license, whether exclusive or non-exclusive, to
any Person to use the Licensed Data in the Field of Use, or (ii) engage directly
or indirectly in the development or commercialization of Data Products in the
Field of Use based on or including as a component thereof the Licensed Data.
Nothing in this Agreement shall preclude Healtheon from using or analyzing
Licensed Data solely for its internal purposes or for the development or
marketing of products or services that do not themselves constitute Data
Products. Nothing in this Agreement shall preclude Healtheon from providing to
those Persons from whom Healthon has acquired Licensed Data (or the Persons in
the same transaction chain) the same Licensed Data that was acquired from such
Persons, which may be processed, compiled or analyzed, but which shall not be
aggregated with the Licensed Data acquired from any other Person.
(c) Exclusivity and Royalty Dispute; Future Use of Licensed
Data.. The parties acknowledge and agree that there will be ambiguities
concerning whether certain activities constitute Data Products or produce Gross
Product Revenue or Operating Income from the sale or licensing of Data Products.
Such ambiguities shall be resolved in good faith pursuant to the dispute
resolution process set forth in Article V. If trends in the data product
industry move toward a more significant use of patient or consumer identifiable
data in informatics and other data products, Quintiles may request the Steering
Committee to expand the definition of Data Products to include such patient or
consumer identifiable data products.
(d) Healtheon Affiliates. Healtheon and Quintiles acknowledge
that Healtheon's Affiliates have or will have access to Licensed Data, and that
Healtheon and Quintiles intend for all such Affiliates of Healtheon to be
subject to and bound by this Agreement. In that regard, Healtheon
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agrees (1) that Healtheon's representations, warranties, and covenants made
under this Agreement shall be deemed also to include Healtheon Affiliates; and
(2) to cause each Affiliate to comply with Healtheon's obligations under this
Agreement as if parties hereto with obligations coextensive with Healtheon's.
(e) Limited Exceptions to Restrictive Covenant. At its
election, at any time three years after the Effective Date and from time to time
thereafter, Healtheon may propose Data Products for development by Quintiles
based on the Licensed Data for internal use or commercialization by Healtheon.
If Healtheon makes any such proposal in writing to Quintiles, including
certification by Healtheon that Healtheon intends to develop the proposed
product immediately if Quintiles elects not to do so, and Quintiles fails within
the Notice Period (defined below) to confirm for Healtheon in writing that
Quintiles has developed, is developing, or intends to develop a Data Product
substantially functionally comparable to that proposed by Healtheon, or if
Quintiles does not in fact so develop such a Data Product within one year from
the date of Quintiles' confirmation, then in either case Healtheon may develop
and commercialize such proposed Data Product (but no other) itself or with a
party other than Quintiles, and Quintiles' restrictive covenant in subsection
2.1(b) above shall be deemed thereafter to except such development and
commercialization for so long as (but no longer than) Healtheon's development,
internal use, or commercialization effort for such Data Product continues.
Healtheon agrees and acknowledges that its rights arising in this subsection are
not intended to enable broad commercial participation by Healtheon in the Data
Products market, but rather to enable Healtheon to pursue its discrete, isolated
Data Product needs. When used herein, the term Notice Period shall mean (i)
twenty (20) days after actual receipt of Healtheon's written proposal, followed
by (ii) to the extent Quintiles does not respond to such notice in writing
within the twenty-day period, ten (10) days after a follow-up written notice
indicating that Healtheon has not received a response to the initial written
proposal.
2.2 ACCESS TO LICENSED DATA.
(a) Determination of Access Specifications; Costs.
(1) Promptly after execution of this Agreement, the
parties will determine the Access Specifications. Each of the parties will
cooperate in good faith with the other to modify the Access Specifications
thereafter upon request. If the parties are unable to promptly agree on the
Access Specifications, or changes thereto from time to time, the matter shall be
promptly submitted to the Steering Committee and if it is unable to agree,
Quintiles shall have the right to establish or modify the Access Specifications
in Quintiles' reasonable discretion, provided that the Access Specifications or
changes thereto address Healtheon's reasonable business concerns and delivery of
Licensed Data in accordance therewith does not violate applicable Law or
contractual obligations, and Quintiles agrees to bear any incremental
out-of-pocket expenses related to such changes.
(2) The parties acknowledge and agree that the
Licensed Data provided to Quintiles will be delivered as De-Identified Data. In
this regard, Quintiles and its Affiliates have developed certain computer
software useful for De-Identification of data (such software, as it may be
modified or replaced through internal or third party development, the "Quintiles
De-Identification Software"). Quintiles may require Healtheon to use the
Quintiles De-Identification Software during the De-Identification process,
provided that the use of such software causes the data as delivered
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hereunder to comply with applicable Law and contractual obligations. Quintiles
will arrange for Healtheon to receive this software and a corresponding license
at no charge, along with reasonable related technical support, solely for the
purpose of fulfilling Healtheon's obligations under this Agreement. If the
Access Specifications require De-Identification through other means, Quintiles
shall pay Healtheon's related costs as provided in subsection (3) below.
(3) Quintiles and Healtheon acknowledge that
Healtheon is not primarily engaged in the business of collecting, preparing,
selling or delivering data as contemplated in this Agreement. Accordingly,
Quintiles shall pay to Healtheon all reasonable out-of-pocket expenses incurred
by Healtheon in conforming the Licensed Data to the Access Specifications and
delivering the Licensed Data under this Agreement to the extent such costs would
not have been incurred by Healtheon but for this Agreement, including all such
costs of satisfying the quality, accuracy and delivery criteria established in
this Agreement and the Access Specifications. All such amounts shall be paid
within thirty (30) days after invoicing by Healtheon, and all such amounts paid
by Quintiles shall be deemed data acquisition costs for purposes of determining
Quintiles' royalty obligations in Section 2.3.
(b) Access to Licensed Data.
(1) Healtheon will provide Quintiles access to and
copies of the Licensed Data in compliance and conformity with the Access
Specifications at all times as of and after the Effective Time; provided,
however, that Healtheon will not be required to provide Licensed Data solely to
the extent Healtheon is specifically prohibited from doing so by: (A) any
Transaction Business Service Agreement in effect as of the Effective Time
(including without limitation any acquired by Healtheon by virtue of the Envoy
Merger), provided Healtheon complies with the procedures required by Section 2.4
with respect to securing data use rights in current service agreements; (B) any
future Transaction Business Service Agreement (or any amendment to any existing
Transaction Business Service Agreement) or any future request by any existing or
future Transaction Business client to discontinue use of such client's data,
provided Healtheon has complied with the procedures required by Section 2.4 with
respect to securing data use rights in future service agreements; or (C) any
applicable Law, provided Healtheon has complied with the procedures required by
subsection (c) below concerning applicable Laws. For the avoidance of doubt,
Healtheon shall not be entitled to withhold Licensed Data except as and to the
extent specifically provided in subsections (1)(A) - (C) above or in subsection
(d) below concerning defaults in Quintiles' payment obligations.
(2) Quintiles and Healtheon agree to interpret the
data rights provisions in all Envoy Transaction Business Service Agreements in
effect as of the Effective Time in a manner consistent with Envoy's historical
interpretation practices absent a breach of the warranty by Quintiles in Section
2.5(b)(2), developments in applicable Law or specific requests or challenges by
clients, in which cases Section 2.2(c) or (d) shall apply, respectively.
(c) Interruptions to Data Stream Due to Applicable Law. In the
event Healtheon reasonably believes that developments to applicable Laws after
the date of this Agreement prohibit or limit Healtheon from providing a material
amount of data that would otherwise be Licensed Data but for the fact that
provision of such data under this Agreement is prohibited by applicable Law, or
that Quintiles breached its representation in Section 2.5(b)(2) below with
respect to current Law such
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that provision of data hereunder violates current Law, Healtheon will notify
Quintiles immediately in writing of the specific prohibition under applicable
Law and the nature of the corresponding prohibition or limitation and cooperate
in good faith with Quintiles to develop modifications to the Access
Specifications (if appropriate) or take other actions to fulfill the intent of
this Agreement without violating any such Law. Immediately upon such notice (or
on the date such Law takes effect, if later), Healtheon shall be entitled to
suspend providing the Licensed Data to Quintiles under this Agreement solely to
the extent that Healtheon believes in good faith that doing so would violate
such Law. Healtheon shall resume provision of the suspended Licensed Data within
five (5) business days after receiving a reasoned opinion of counsel reasonably
satisfactory to Healtheon, addressed to Quintiles and Healtheon, that providing
such Licensed Data (in the same or in a modified format) would not be prohibited
under applicable Law identified by Healtheon as the basis for suspension, along
with a specific undertaking by Quintiles to indemnify Healtheon from and against
any and all losses, claims, actions, damages, liabilities, costs, and expenses
(including attorneys' fees and expenses) arising from providing such data. In
the event the opinion of counsel provides that the Licensed Data must or should
be provided in modified form, Healtheon shall, at Quintiles' cost, use its
commercially reasonable efforts expeditiously to modify the data accordingly,
and the time period by which Healtheon shall resume providing the data shall be
extended until such modifications can be made.
(d) Limited Remedy for Payment Default. Healtheon shall be
excused from providing Licensed Data under this Agreement for any period during
which Quintiles is in material default of Quintiles' payment obligations to
Healtheon under this Agreement (including obligations to pay costs), provided
that Healtheon will not effect any such interruption (1) without giving
Quintiles at least thirty (30) days' prior written notice of Healtheon's intent
to do so, and (2) if and for so long as Quintiles disputes the alleged default
in good faith (as evidenced by written notice to that effect to Healtheon), pays
any undisputed amounts to Healtheon, and pays any disputed amounts into escrow.
Healtheon will resume providing Licensed Data immediately upon such cure of any
such default and the payment of any reasonable related out-of-pocket expenses
incurred by Healtheon in connection therewith. Healtheon agrees and acknowledges
that the suspension of provision of Covered Data described in this subsection
and recovery of amounts due and costs incurred in connection therewith is
Healtheon's sole and exclusive remedy for any such payment default by Quintiles,
and that no other type of default by Quintiles will entitle Healtheon to
withhold Licensed Data (except with respect to Section 2.2(c) as it relates to
Quintiles' breach of warranty under Section 2.5(b)(2)) or to terminate this
Agreement.
2.3 ROYALTIES.
(a) Definitions. As used in this Section 2.3, the following
capitalized terms shall have the respective meanings set forth below:
(1) "GROSS PRODUCT REVENUES" means [*].
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(2) "OPERATING INCOME" means [*].
(b) Payments.
(1) [*].
(2) Quintiles will make the payments required by
subsection (1) above on a quarterly (calendar year) basis and accompany each
payment with a statement of Quintiles' corresponding Gross Product Revenues and
Operating Income for the applicable quarter, together with an explanation of
Quintiles' calculation of the corresponding royalties due Healtheon. Quintiles
will make such payments within forty-five (45) days after the end of each
corresponding calendar quarter.
(c) Audits. Quintiles will maintain records reasonably
sufficient to document and record its Gross Product Revenues and Operating
Income; and Healtheon shall have the right to audit Quintiles' books and records
at Healtheon's expense on a confidential and otherwise commercially reasonable
basis to confirm the accuracy of all of the foregoing. Quintiles and Healtheon
will address any apparent payment discrepancy promptly and in good faith, and
the affected party promptly will correct any confirmed mispayment.
(d) Equitable Adjustments. In the event Quintiles pays
Healtheon any royalty in respect of Licensed Data the parties later determine to
have been provided by Healtheon to Quintiles improperly (such as in violation of
applicable Law or any applicable Healtheon service agreement) and as a result
Quintiles has not received or has refunded the related Gross Product Revenue,
Quintiles and Healtheon will determine in good faith an appropriate
corresponding royalty adjustment to be given effect as an offset against future
royalties to or a refund from Healtheon.
(e) Use of Licensed Data. Quintiles will use its commercially
reasonable efforts to incorporate the Licensed Data in all Data Products that it
develops that require the use of data of the type obtained from the conduct of a
Transaction Business, or other data of the type constituting the Licensed Data.
2.4 DATA USE RIGHTS.
(a) General. Healtheon will undertake or permit Quintiles to
undertake, as the case may be, the procedures described in this Section relative
to avoiding prohibitions or limitations on the provision of Licensed Data.
(b) Current Service Agreements. Promptly after execution of
this Agreement, Healtheon will identify for Quintiles in writing each of
Healtheon's Transaction Business Service
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Agreements (other than any obtained by Healtheon as a result of the Envoy
Merger) which prohibit or limit Healtheon's right to provide data of the type
which otherwise would be Licensed Data to Quintiles in the manner and for the
purposes contemplated by this Agreement. Healtheon further agrees to undertake
the access procedures described in subsection (d) below with respect to all such
Transaction Business Service Agreements requested by Quintiles (including any
originating from Envoy), to the end of eliminating or mitigating the
corresponding prohibitions or limitations. Healtheon also will undertake the
procedures described in this subsection with respect to Transaction Business
Service Agreements acquired by Healtheon by virtue of future transactions in
which Persons become Affiliates of Quintiles.
(c) Future Service Agreements. [*].
(d) Access Procedure. [*].
2.5 WARRANTIES.
(a) Healtheon warrants and covenants to Quintiles that:
(1) Healtheon is duly authorized to enter into and
perform its obligations under this Agreement, and, other than with respect to
any Law or contract which may prohibit or limit Healtheon's right to provide
Licensed Data to Quintiles as contemplated by this Agreement, is free of any
obligation or restriction that would prevent Healtheon from or impair or limit
its right or ability to do so.
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(2) The collection and accumulation of the Licensed
Data by Healtheon to the date of this Agreement has not violated applicable Law
or any agreement to which Healtheon is a party or by which it is bound as of the
date of this Agreement.
(3) Subject to the effects of being conformed to the
Access Specifications pursuant to Section 2.2(b)(1), the provision of the
Licensed Data by Healtheon to Quintiles pursuant to this Agreement will not
violate the corresponding agreement or arrangement pursuant to which Healtheon
rendered the services giving rise to such item of Licensed Data. All Licensed
Data shall be provided "as is" in the form resulting after Healtheon's
Transaction Business processing, De-Identification, and application of the
Access Specifications.
(4) To Healtheon's actual knowledge, after general
consultation with its legal advisors, but without conducting a comprehensive
investigation, Quintiles' current practices regarding the collection and
accumulation of data of the type comprising the Licensed Data and its use of
such data in Data Products would not violate applicable Law.
(b) Quintiles warrants and covenants to Healtheon that:
(1) Quintiles is duly authorized to enter into and
perform its obligations under this Agreement, and is free of any obligation or
restriction that would prevent Quintiles from or impair or limit its right or
ability to do so.
(2) There is no applicable Law as of the date of this
Agreement, or any material agreement to which Envoy or Quintiles is a party or
by which either is bound as of the date of this Agreement, that will prohibit
the collection and accumulation of data of the type that is Licensed Data under
this Agreement or its use by Quintiles in Data Products,.
(3) Provided that Healtheon's collection and
accumulation of the Licensed Data does not violate applicable Law, the use of
the Licensed Data by Quintiles after the date hereof will not violate applicable
Law as in effect from time to time; and the use of the Licensed Data by
Quintiles after the date hereof will not violate any agreement to which
Quintiles is a party or by which it is bound.
2.6 PRIVACY RELATED ACTIVITIES.
(a) Technical Consultation. Healtheon will cooperate in good
faith with Quintiles, through modifications to the Access Specifications or
otherwise (and subject to Quintiles' expense reimbursement obligations to
Healtheon described in Section 2.2(a)(3)), to develop "best practices" through
which to achieve availability of the Licensed Data to Quintiles, with a view
toward (1) achieving efficient technical processes for the parties and (2)
complying in all respects with applicable Laws concerning the privacy of
healthcare data. Such efforts may include periodic privacy compliance audits
upon the request of either party made no more frequently than once every
thirty-six (36) months.
(b) Public Policy and Public Relations Cooperation. Healtheon
and Quintiles also will cooperate in good faith to evaluate applicable Laws
concerning the privacy or collection of
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healthcare data or otherwise relevant to the transactions contemplated by this
Agreement and, where appropriate and mutually beneficial, to influence the
legislative process and public policy and perception on a coordinated basis
through lawful and appropriate means determined from time to time, including
without limitation public relations activities. Healtheon and Quintiles will
determine in good faith how to allocate their respective expenses for these
activities.
(c) Ongoing Adaptation. Healtheon and Quintiles agree to
cooperate in good faith on an ongoing basis to adapt the parties' arrangements
under this Agreement to accommodate future changes in applicable Laws, relevant
technology, or other changes in the Data Products industry or environment.
2.7 Distribution. Quintiles will not distribute Data Products on the
Internet other than through Healtheon without mutual agreement, not to be
unreasonably withheld.
ARTICLE III
INDEMNIFICATION
3.1 HEALTHEON. Healtheon shall defend, indemnify and hold Quintiles
harmless, to the full extent permitted in law or equity, from and against any
and all losses, claims, actions, damages, liabilities, costs and expenses
(including reasonable attorneys' fees and expenses), net of any corresponding
insurance proceeds received by any indemnified party (collectively, "LOSSES"),
proximately caused by or resulting from (i) any misrepresentation or
non-fulfillment of any representation, warranty, covenant, obligation or
agreement by Healtheon contained in or made pursuant to this Agreement, (ii) the
negligence or willful misconduct of Healtheon or any of its employees, agents,
or representatives, and (iii) the enforcement by Quintiles of its rights
pursuant to this Section 3.1, and any litigation, proceeding or investigation
relating to any of the foregoing.
3.2 QUINTILES. Quintiles shall defend, indemnify and hold Healtheon
harmless, to the full extent permitted in law or equity, from and against any
and all Losses proximately caused by or resulting from (i) Quintiles' use of the
Licensed Data, (ii) any misrepresentation or non-fulfillment of any
representation, warranty, covenant, obligation or agreement by Quintiles
contained in or made pursuant to this Agreement, (iii) the negligence or willful
misconduct of Quintiles or any of its employees, agents, or representatives, and
(iv) the enforcement by Healtheon of its rights pursuant to this Section 3.2,
and any litigation, proceeding or investigation relating to any of the
foregoing.
3.3 PROCEDURES. Whenever either party shall become aware that a claim
by a third party has been asserted or threatened which, if valid, would subject
the other party to an indemnity obligation under this Agreement, the indemnified
party promptly shall notify the indemnifying party in writing of such claim in
sufficient detail to enable the indemnifying party to evaluate the claim. The
indemnifying party or its designee will have the right, but not the obligation,
to assume the defense of such claim. If an indemnifying party fails to assume
the defense of such claim within fifteen (15) days after receipt of notice of
the claim, the indemnified party will (upon delivering written notice to such
effect to the indemnifying party) have the right to undertake, at the
indemnifying party's cost and expense, the defense, compromise or settlement of
such claim, subject to the right of the indemnifying party to assume the defense
of such claim at any time prior to settlement, compromise, or final
determination thereof, and provided, however, that the indemnified
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party shall not enter into any such compromise or settlement without the written
consent of the indemnifying party. In the event the indemnified party assumes
the defense of the claim, the indemnified party will keep the indemnifying party
reasonably informed of the progress of any such defense, compromise, or
settlement. The indemnifying party shall not be liable for any settlement of any
claim effected without its consent.
ARTICLE IV
CONFIDENTIALITY
Each of Quintiles and Healtheon will hold the other party's
Confidential Information in confidence and refrain from using any such
Confidential Information other than for purposes of exercising its respective
rights and performing its respective obligations under this Agreement.
Notwithstanding the foregoing, each party will be permitted to disclose the
other party's Confidential Information as and to the extent required by
applicable law, provided the party required to make any such disclosure notifies
the party whose Confidential Information is required to be disclosed as far in
advance of the required disclosure as is reasonably practicable under the
circumstances and cooperates with such party (if reasonably requested to do so,
and at the requesting party's expense) to secure confidential treatment for the
required disclosure.
ARTICLE V
RELATIONSHIP MANAGEMENT
5.1 STEERING COMMITTEE. Promptly after execution of this Agreement, the
parties will organize a six-member Steering Committee comprised of three
designees from each party to provide open lines of communication and facilitate,
coordinate, and oversee the performance of the parties' respective obligations
under this Agreement. The initial Steering Committee designees shall be [*] and
[*] and [*] from Quintiles and [*], [*] and [*] from Healtheon and shall be the
same Steering Committee under the Internet Product Development and Marketing
Agreement between the parties. Each party shall be entitled to replace its
designees to the Steering Committee by written notice to the other party. The
Steering Committee shall convene on such schedule (but not less frequently than
quarterly) and employ such procedures as it shall determine from time to time in
good faith, and, except as otherwise specifically required by this Agreement,
shall act by unanimous consent.
5.2 DISPUTE RESOLUTION.
(a) Executive Review. Each party shall have the right, at any
time after good faith efforts have failed to resolve any dispute, difference or
question concerning this Agreement at the Steering Committee level, to request
review of the matter by the chief executive officer of each party (an "EXECUTIVE
REVIEW"). Either party shall exercise its right to request an Executive Review
by delivering written notice to that effect to the other party. The chief
executive officers of each party shall meet in person or by telephone within ten
(10) days of the date such notice is given and shall engage in good faith
efforts to resolve the dispute within ten (10) days after such meeting.
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(b) Mediation. In the event of a dispute which cannot be
resolved by Executive Review, either party may commence a non-binding mediation
to resolve the dispute by providing written notice to the other party (a
"MEDIATION NOTICE") informing the other party of the dispute and the issues to
be resolved and containing a list of five (5) recommended individuals to serve
as the mediator. Within ten (10) business days after the receipt of a Mediation
Notice, the other party shall respond by written notice to the party initiating
mediation, providing a list of five (5) recommended individuals to serve as the
mediator and which adds additional issues to be resolved. The recommended
mediators shall be individuals with experience in the healthcare electronic data
interchange industry and shall not be any employee, director, shareholder or
agent of either party or an Affiliate of either party, or otherwise involved
(whether by contract or otherwise) in the affairs of either party. If, within
twenty (20) business days after receipt of the Mediation Notice, the parties
shall have been unable to agree upon an individual to serve as mediator, or to
the extent the mediator selected by the parties is unable to resolve the
dispute, the dispute will be settled by final and binding arbitration conducted
in the manner described in subsection (c) below. If, within twenty (20) business
days after receipt of the Mediation Notice, the parties shall have agreed upon
an individual to serve as mediator, the mediator shall conduct a mediation in an
effort to resolve the dispute, employing commercially reasonable procedures
selected by the mediator in consultation with the parties, completing such
mediation no later than sixty (60) days after engagement.
5.3 REMEDIES.
(a) Each of Healtheon and Quintiles acknowledges that its
failure to abide by the provisions of this Agreement (and in particular
Healtheon's obligations under Article II) would cause immediate and irreparable
harm to the other, for which legal remedies would be inadequate. Therefore, in
addition to any legal or other relief to which either party may be entitled by
virtue of the other party's failure to abide by these provisions, the injured
party shall be entitled to equitable relief, including but not limited to
preliminary and permanent injunctive relief and specific performance, for the
other party's actual or threatened failure to abide by these provisions.
(b) Notwithstanding the procedures described in Section 5.2,
each party shall be entitled to seek and obtain preliminary injunctive relief in
any court of competent jurisdiction for the other party's actual or threatened
breach of this Agreement, pending execution thereafter of the dispute resolution
procedures described in Section 5.2.
ARTICLE VI
TERM AND TERMINATION
TERM. The term of this Agreement shall be perpetual. This Agreement may
not be terminated except by the mutual written agreement of Healtheon and
Quintiles.
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ARTICLE VII
MISCELLANEOUS
7.1 RELATIONSHIP OF PARTIES. Healtheon and Quintiles agree that their
legal relationship to one another under this Agreement is as independent
contractors. Nothing in this Agreement shall be deemed to create a joint
venture, agency, partnership, or other relationship between Healtheon and
Quintiles, and neither shall have any power by virtue of this Agreement to enter
into any contract or commitment on behalf of the other or to bind the other in
any respect whatsoever.
7.2 AMENDMENT AND MODIFICATION. This Agreement may be amended, modified
or supplemented only by a written agreement (referring specifically to this
Agreement) of Healtheon and Quintiles.
7.3 SEVERABILITY. In the event one or more of the provisions of this
Agreement or the application thereof to any circumstance are found to be invalid
or unenforceable to any extent by a court with jurisdiction, the remaining
provisions shall continue in full force and effect. If any provision of this
Agreement is found to be so broad as to be unenforceable, such provision shall
be interpreted to be only as broad as is enforceable.
7.4 NOTICES. All notices and other communications hereunder shall be in
writing and shall be delivered personally or by next-day courier or telecopied
with confirmation of receipt, to the parties at the addresses specified below
(or at such other address for a party as shall be specified by like notice;
provided that notices of a change of address shall be effective only upon
receipt thereof). Any such notice shall be effective upon receipt, if personally
delivered or telecopied, or one day after delivery to a courier for next-day
delivery.
If to Quintiles, to:
Quintiles Transnational Corp.
4709 Creekstone Drive
Riverbirch Building, Suite 200
Durham, North Carolina 27703-8411
Telecopy Number: (919) 998-2177
Attention: John S. Russell, Senior Vice President, General Counsel
with a copy to:
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.
Post Office Box 2611
Raleigh, North Carolina 27602-2611
Telecopy Number: (919) 821-6800
Attention: Gerald F. Roach
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If to HWMD, to:
Healtheon/WebMD Corporation
400 The Lenox Building
3399 Peachtree Road NE
Atlanta, Georgia 30326
Telecopy Number: (404) 479-7603
Attention: Jack Dennison, Executive Vice President, General Counsel
with a copy to:
Alston & Bird, L.L.P.
1211 East Morehead Street
P.O. Drawer 34009
Charlotte, North Carolina 28234-4009
Telecopy Number: (704) 334-2014
Attention: H. Bryan Ives III
7.5 DESCRIPTIVE HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.6 ENTIRE AGREEMENT. This Agreement (including its various Schedules)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to its
subject matter.
7.7 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the State of North Carolina,
without giving effect to the provisions thereof relating to conflicts of law.
7.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.
7.9 ASSIGNMENT. This Agreement and the rights, interests and
obligations hereunder shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns. Quintiles may not assign, sublicense, or otherwise transfer its rights,
interests or obligations under this Agreement without Healtheon's prior written
consent (not to be withheld or delayed unreasonably), except (a) as a part of
the sale or other disposition of all or a substantial portion of its Data
Products business; (b) to make Data Products available to customers in the
ordinary course of business; (c) in connection with any joint venture or
strategic relationship with one or more pharmaceutical companies for the
development or commercialization of Data Products; or (d) to any Affiliate of
Quintiles. Healtheon may not assign or otherwise transfer its rights, interests
or obligations under this Agreement without Quintiles' prior written consent
(not to be withheld or delayed unreasonably), except in connection with the
sale, transfer, or other disposition of all or any portion of its business or
assets (other than in the ordinary
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course of business) in a transaction in which the transferee or successor to
such business or assets assumes Healtheon's corresponding obligations under this
Agreement.
7.10 PUBLICITY. Except as otherwise required by applicable law, neither
party shall refer to the other party in advertising, promotional activities, or
other public disclosures or announcements without such other party's prior
written consent, which shall not be withheld unreasonably.
7.11 LIMITATION OF LIABILITY. EXCEPT IN THE CASE THAT REDWOOD WILLFULLY
REFUSES TO PROVIDE MAPLE ACCESS TO LICENSED DATA AS CONTEMPLATED HEREIN (UNLESS
REDWOOD'S REFUSAL IS BASED ON GOOD FAITH ASSERTION OF ITS RIGHTS UNDER SECTIONS
2.2(C) OR (D)), NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT,
INCIDENTAL, CONSEQUENTIAL, PUNITIVE, OR SPECIAL DAMAGES ARISING OUT OF OR
RELATED TO SUCH ACTION OR OMISSION, INCLUDING WITHOUT LIMITATION DAMAGES FOR
LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION,
AND THE LIKE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
7.12 FORCE MAJEURE. Neither party will be responsible for any failure
to perform its obligations under this Agreement due to causes beyond its
reasonable control, including without limitation acts of God, war, riot,
embargoes, acts of civil or military authorities, fire, floods, earthquakes,
accidents, strikes, or fuel crises, provided that such party gives prompt
written notice of such cause to the other party. The affected party's time for
performance will be extended for a period equal to the duration of the force
majeure.
7.13 TIME IS OF THE ESSENCE. Time is of the essence in the performance
of both parties obligations hereunder.
* * * * * * * * * *
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[signature page to Data Rights Agreement]
IN WITNESS WHEREOF, each of Healtheon and Quintiles has caused this
Agreement to be executed on its behalf by its respective officer duly authorized
to do so, all as of the date specified above in the preamble.
HEALTHEON/WEBMD CORPORATION
By: /s/ Jeff Arnold
------------------------------------------
Its: Chief Executive Officer
------------------------------------------
QUINTILES TRANSNATIONAL CORP.
By: /s/ John S. Russell
------------------------------------------
John S. Russell
Senior Vice President, General Counsel and
Corporate Secretary
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SCHEDULE 2.3(b)
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