1
EXHIBIT 10.34
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
MASTER SERVICES, DEVELOPMENT AND LICENSE AGREEMENT
This Master Services, Development and License Agreement ("Agreement")
is made this 12th day of November, 1999 ("Effective Date") by and between
Healtheon Corporation, a Delaware corporation with offices at 0000 Xxxxxxx Xxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 ("Healtheon") and Beech Street Corporation,
a California corporation with offices at 000 Xxxxxxxxxx, Xxxxxx, Xxxxxxxxxx
00000 ("BSC").
WHEREAS, Healtheon and BSC have agreed to form an alliance to address
the information technology needs of BSC, develop new applications designed to
address the information service needs of companies providing managed care and
other administrative services and pursue other ventures which may be of mutual
interest to the parties.
WHEREAS, the parties had previously entered into a Service,
Development, and License Agreement effective December 15, 1997, as amended by an
Agreement effective May 7, 1999, ("Prior Agreement") under which Healtheon
provided certain application development and information technology ("IT")
services;
WHEREAS, the parties now desire to supersede the Prior Agreement with
this Agreement, thereby enabling the parties to more easily expand their
relationship and allowing for multiple Service Exhibits under which Healtheon
would provide services to BSC, including application development services,
on-line services, and IT services.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereby agree as follows:
1. DEFINITIONS.
1.1 "Additional Applications" shall mean those applications that
are developed by Healtheon for BSC hereunder, but excluding the Developed
Applications and the Healtheon Platform Software. As provided in the terms and
conditions below, Additional Applications shall be owned by Healtheon, unless
otherwise provided in the applicable Service Exhibit.
1.2 "BSC Client" shall mean those clients of BSC which use BSC
products or services.
1.3 "BSC Managed Care Services" shall mean the following types of
services provided by BSC to BSC Clients: personal health management (demand
management), workers' compensation, medical xxxx review, case management,
pre-admission review, concurrent review, discharge planning, hospital xxxx
audit, retrospective non-network xxxx review and fee negotiation, health care
provider contracting and management, preferred provider networks, data
reporting, computer operations, service bureau services, consulting and other
support services and such other related new products/services that BSC shall
develop subsequent to the execution of this Agreement. Notwithstanding the
foregoing, BSC Managed Care Services shall not include BSC On-Line Services.
1.4 "BSC On-Line Service" shall mean the on-line service provided
by BSC that incorporates all or a portion of the Developed Applications and any
derivative works thereof.
Page 1
2
1.5 "Database Information" shall mean the information provided to
Healtheon by BSC and contained within the Database Structures, including but not
limited to information concerning BSC's providers, provider contracts, customer
and customer contracts.
1.6 "Database Structure" shall mean the supporting database design
developed by Healtheon for use with the Developed Applications.
1.7 "Developed Applications" shall mean those applications, or
applications under development, and any improvements thereto which Healtheon
develops hereunder and which are designed to run on the Healtheon Platform, as
more fully described in the applicable Service Exhibit. As provided in the terms
and conditions set forth below, the Developed Applications will be owned by
Healtheon.
1.8 "Development Work" shall mean the work to be performed
hereunder by Healtheon to develop the Developed Applications.
1.9 "BSC End User" shall mean any employee, partner, agent or
other representative of (i) BSC, or (ii) a BSC Client; who is authorized to
access the BSC On-Line Service in conjunction with obtaining BSC Managed Care
Services.
1.10 "Healtheon Platform" shall mean the Healtheon Platform
Software, as well as certain industry standard software applications, tools, and
processes which provide the operating environment which enables the use of
Healtheon Developed Applications as part of an on-line service which is
accessible through the Internet by using industry standard web browsers.
1.11 "Healtheon Platform Software" shall mean the proprietary
operating system and other software which has been developed by Healtheon (but
excluding the developed applications and the Additional Applications) which is
part of the operating system of the Healtheon Platform.
1.12 "Services" shall mean the services to be performed by
Healtheon hereunder pursuant to a Service Exhibit.
1.13 "Work Product" shall mean any and all of the work product
produced or developed by Healtheon in connection with Healtheon's performance of
the Services to be provided hereunder.
2. PERFORMANCE OF SERVICES.
2.1 Service Exhibits. All Services to be provided by Healtheon
hereunder shall be by Service Exhibits. Each Service Exhibit shall refer to this
Agreement, describe the Services to be provided thereunder, and identify the
work product to be produced thereunder, if any. The initial Service Exhibits are
attached hereto as Service Exhibits A (for IT Services) and B (for ProviderWorks
Application Development Services). Additional Service Exhibits will become
effective when signed by authorized representatives of both parties.
2.2 Incorporation; Conflicts. Each Service Exhibit is hereby
incorporated in full into this Agreement by reference and shall be subject to
the terms and conditions of this Agreement. In the case of a conflict among the
provisions in this Agreement and a Service Exhibit, those of the Service Exhibit
will control.
Page 2
3
3. PROJECT MANAGEMENT.
3.1 Personnel Resources. Healtheon and BSC shall each commit the
number of qualified and experienced personnel which are reasonably necessary to
perform their respective obligations under this Agreement and as further
outlined in the Service Exhibits. 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 parties to render services
in connection with the performance of the Services contemplated hereunder, which
may include engaging the services of certain BSC employees to provide certain
information technology services. Healtheon will obtain written permission from
BSC prior to engaging any BSC employees to provide information technology
services. When engaging third party vendors, Healtheon will receive written
approval from BSC for any resulting fees which BSC will be obligated to pay. BSC
has the right to refuse on-site service from any third party vendor engaged by
Healtheon to provide such services hereunder. Notwithstanding the rights of BSC
in this section, BSC shall not unnecessarily withhold permissions, approvals or
acceptances to Healtheon unless BSC has a good faith reason for denying
permission, approval or acceptance, which shall be provided to Healtheon in a
written notice. All Healtheon employees utilized to provide the Services shall
have entered into Healtheon's standard form of employee nondisclosure agreement.
3.2 Project Management. Each party shall designate a project
manager (the "Project Managers") and the appropriate resources and persons to
coordinate the development and implementation of the Service Exhibits. The
Project Managers shall be responsible for resolving any matters arising under
this Agreement. In the event that the Project Managers are not able to resolve a
dispute, such dispute shall be resolved either by a management committee, as
described in Section 3.3 ("Management Committee") or by an agreed upon method as
defined within the applicable Service Exhibit.
3.3 Management Committee. The parties shall each designate an
equal number of management-level personnel to serve on the Management Committee.
The Management Committee shall conduct status meetings on a monthly basis, or as
decided by the Management Committee as appropriate, detailing the performance of
the Services during the prior four (4) week period and the work planned to be
performed during the upcoming four (4) week period or any other agreed upon time
period. The Management Committee shall be responsible for resolving any disputes
which have not been resolved by the Project Managers, unless the parties specify
another method in a Service Exhibit. The Management Committee shall be
responsible for determining whether services based upon the Developed
Applications shall be included in the definition of "BSC Managed Care Services"
for the purposes of this Agreement; otherwise, such services shall be excluded.
If such services are to be included, then the Management Committee shall be
responsible for establishing the applicable financial arrangements, if any,
pursuant to which such services may be offered by BSC.
3.4 Changes to Services, Service Exhibits. The scope of the
Services and the Service Exhibits shall not be changed in any material respect
without the prior written agreement of the parties, which agreement shall not be
unreasonably withheld.
4. OWNERSHIP AND LICENSE RIGHTS.
4.1 Ownership. BSC acknowledges and agrees that the Healtheon
Platform, and, unless otherwise specified in a Service Exhibit attached hereto,
Additional Applications, and all of the Work
Page 3
4
Product including, but not limited to, all technology of any nature whatsoever,
all notes, records, drawings, designs, inventions, improvements, developments,
discoveries, trade secrets and any copyrightable material, including but not
limited to, the Developed Applications, and related Database Structures, and all
patentable inventions, conceived, made or discovered by Healtheon, solely or in
collaboration with others, during the period of this Agreement and which relate
in any manner to the Services to be performed hereunder or which Healtheon may
be directed to undertake or investigate in performing the Services, including
any derivative works of any of the foregoing, is the sole property of Healtheon,
but excluding the Database Information, as provided by BSC to Healtheon to
incorporate and operate within the Developed Applications in order to operate
the Developed Applications, which may be incorporated into the Work
Product Unless otherwise provided in a Service Exhibit, BSC acknowledges and
agrees that Healtheon shall have all proprietary rights in and to the Work
Product, including, without limitation, all copyrights, patents and trade secret
rights, all moral rights, all contract and licensing rights, and all claims and
causes of action of any kind with respect to any of the foregoing, whether now
known or hereafter to become known, and that Healtheon shall have the sole and
exclusive right to use, modify and exploit the Work Product in any manner that
Healtheon may choose.Notwithstanding the foregoing, in the event BSC exercises
the option for the On-Line Services under Section 5.3 for a Developed
Application, Healtheon will not modify such Developed Application in such a way
that the Developed Application would no longer meet in all material respects
BSC's specifications as stated in the applicable Service Exhibit.
4.2 Proprietary Notices. BSC shall not remove or alter any
trademark, trade name, copyright, or other proprietary notices, legends,
symbols, or labels appearing on or in materials pertaining to the Work Product.
Each portion of the Healtheon documentation reproduced by BSC shall include the
intellectual property notice or notices appearing in or on the corresponding
portion of such materials as delivered by Healtheon hereunder (e.g. trademark,
copyright and patent notices).
5. LICENSE AND SERVICE RIGHTS.
5.1 License Rights. In consideration for the development fees paid
to Healtheon pursuant to Section 7.1, Healtheon hereby grants to BSC a
nonexclusive and nontransferable, fully-paid, perpetual right and license,
exercisable at BSC's Designated Operations Site, to: (i) install, use, copy,
modify, create derivative works and maintain the Developed Applications, in
object code and source code form, solely as (a) part of the BSC On-Line Services
which are offered to BSC Clients in conjunction with the BSC Managed Care
Services obtained by such BSC Clients and to enable world-wide remote access by
BSC End Users in conjunction with the BSC On-Line Service and (b) for BSC's
internal use in providing BSC Managed Care Services to BSC Clients, and (ii) use
the Work Product (excluding the Developed Applications and any derivative works
thereof) delivered to BSC by Healtheon hereunder in conjunction with the
operations of BSC's Managed Care Services. BSC shall not use, sublicense or
otherwise distribute the Healtheon Platform Software or the Work Product,
including the Developed Applications and any derivative works thereof, in any
other manner except as expressly stated herein. BSC's "Designated Operations
Site" is Irvine, California. BSC may change its Designated Operations Site to
another site within the United States or United Kingdom by prior written notice
to Healtheon. A change of the Designated Operations Site to locations outside
the United States or United Kingdom requires Healtheon's prior written approval.
Notwithstanding the foregoing, BSC shall make no more than two (2) copies of the
source code relating to the Developed Applications (the "Source Code") and shall
restrict access to such Source Code to only those employees and Permitted Third
Party Consultants who require such access to enable BSC to use the Source Code
as in the manner contemplated herein and otherwise secure and protect such
Source Code consistent with its own practices regarding its most highly
Page 4
5
confidential information. "Permitted Third Party Consultants" means third party
consultants for whom BSC has received Healtheon's prior written approval, which
shall not be unreasonably denied, and who have executed agreements with BSC that
includes confidentiality and intellectual property assignment provisions
consistent with this Agreement.
5.2 Option to License Healtheon Platform Software. Subject to the
payment of the license fee set forth below, Healtheon hereby grants to BSC a
nonexclusive and nontransferable, right and license, exercisable at BSC's
Designated Operations Site, to use the Healtheon Platform Software as part of
the Healtheon Platform to be deployed at BSC's Designated Operations Site to run
the Developed Applications and such Additional Applications which may be
licensed from Healtheon, as part of the BSC On-Line Service or other BSC Managed
Care Service to be offered to BSC Clients in conjunction with the BSC Managed
Care Services obtained by such BSC Client, and to enable world-wide access and
use by BSC End Users at remote locations in conjunction with the use of the BSC
On-Line Service and to make two back-up copies. The applicable one-time, up
front fee for such license shall be [*] dollars ($[*]), payable upon such
commercially reasonable terms as the parties may agree to at the time of BSC's
exercise of its rights hereunder; provided however, that such license fee shall
be waived after January 1, 2000. BSC shall not have the right to use, sublicense
or otherwise distribute the Healtheon Platform Software in any other manner
except as expressly stated herein. BSC shall be solely responsible for the costs
associated with acquiring all third-party hardware and software necessary to
deploy the Healtheon Platform at BSC's site. BSC shall pay Healtheon for any and
all associated implementation and installation services provided by or on behalf
of Healtheon on a time and materials basis under the then negotiated fee
schedule. In the event that BSC exercises its rights hereunder, Healtheon shall
make available to BSC maintenance services on such commercially reasonable terms
and conditions as may be agreed to by the parties. Healtheon shall provide all
existing Healtheon documentation reasonably necessary for BSC to exercise this
license option in order to make functional the Developed Applications and
Healtheon Platform to the extent Healtheon has it at the time BSC exercises its
option hereunder and Healtheon has the right to provide a copy to BSC.
5.3 Option to Use Healtheon On-Line Service. If, following the
completion of the Developed Applications, BSC declines to use its licensed
rights under Section 5.1, Healtheon hereby agrees to enter into a Service
Exhibit with BSC containing Healtheon's standard terms and conditions whereby
Healtheon shall provide BSC with (i) access to an on-line service which includes
the Developed Applications, and (ii) the right to sublicense such access rights
to BSC Clients. Healtheon shall offer such service to BSC and the BSC Clients at
the rate specified in the applicable Service Exhibit.
5.4 Media Marketing Materials. Healtheon may provide BSC with
information and materials to use in creating brochure(s), describing one or more
Healtheon on-line services provided hereunder ("Marketing Materials"). BSC may
modify 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. BSC shall submit a letter to Healtheon describing the intended
use of the Marketing Materials and any uses or references to Healtheon
trademarks, materials or information regarding such use for Healtheon's
evaluation and approval prior to any actual production, use or distribution of
Marketing Materials by BSC. Healtheon shall provide notice of approval or
rejection of the intended use of the Marketing Materials within seven (7) days
of receipt of the letter from BSC. Within such seven (7) days, Healtheon may
request additional information such as pre-production samples of the intended
advertising, merchandising, promotional or display materials containing any
Marketing Materials or description or reference to Healtheon's on-line services
for Healtheon's evaluation and approval as to quality, style, appearance, usage
of any Healtheon trademarks, and accuracy of the information, and Healtheon
shall
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
Page 5
6
provide notice or approval or rejection within five (5) days of receipt of such
additional information. Subject to Healtheon's prior written approval as set
forth above, BSC shall have the right to distribute Marketing Materials to its
BSC Clients solely in conjunction with the identification, marketing, and
promotion of Healtheon on-line services provided hereunder. All use of Healtheon
trademarks by BSC accrues to the benefit of Healtheon. Neither party shall use
the name of the other party, or refer to the other party, directly or
indirectly, in any news release or information provided to any trade publication
without such party's prior written approval.
6. TECHNOLOGY AND LICENSE RIGHTS. In the event that any Development Work
requires access to or use of any other third-party technology or software, the
Management Committee shall be responsible for assessing which party should
obtain any necessary rights thereto.
7. FEES AND PAYMENT.
7.1 Fees and Expenses, Payment. BSC shall pay Healtheon the fees
and expenses, as set forth in the Service Exhibits for the Services to be
performed hereunder (the "Fees"). Healtheon shall submit invoices to BSC on a
monthly basis for the Fees when due. Invoices shall be due and payable within
ten (10) days after receipt. If a discrepancy is found on the monthly invoice
received by BSC from Healtheon, BSC shall promptly notify Healtheon of such
discrepancy and Healtheon agrees to exercise its best efforts to resolve the
discrepancy within seven (7) business days. During the period that Healtheon is
resolving the discrepancy, BSC shall not be required to pay to Healtheon the
amount of the discrepancy, and no late fees shall apply to the amount in
dispute. Upon resolution of the dispute, the invoice shall be due and payable
within ten (10) days.
7.2 Other Expenses. Healtheon shall have sole responsibility for
payment of compensation to its personnel and shall pay and report, for all
personnel assigned to perform services hereunder, federal and state income tax
withholding, social security taxes, and unemployment insurance applicable to
such personnel. Healtheon shall bear sole responsibility for any health or
disability insurance, retirement benefits, or other welfare or pension benefits
(if any) to which its own personnel may be entitled.
7.3 Third-Party Hardware and Software. In the event that it is
reasonably necessary for Healtheon to purchase or license any third-party
hardware and/or software in order to perform the Services (except for
Healtheon's on-line Services), the Project Managers shall determine whether such
third-party hardware and/or software should be purchased and/or licensed by BSC
or Healtheon and how the costs and ownership shall be allocated between the
parties.
7.4 Taxes. All Fees and payments are exclusive of all taxes,
duties or levies, however designated or computed. BSC shall be responsible for
and pay all taxes upon payments due under this Agreement including, but not
limited to, sales, use, or value-added taxes, duties, withholding taxes and
other assessments now or hereafter imposed on or in connection with this
Agreement, exclusive of taxes based upon Healtheon's net income.
7.5 Audit Rights. Each of the parties shall have the right,
exercisable no more frequently than once per calendar quarter and exercisable
upon thirty (30) days prior written notice, to audit the appropriate books and
records of the other party during regular business hours to review the
calculations of the amounts payable pursuant to Section 7. The costs of such
audit shall be borne by the auditing party, unless the results of such audit
reveal an underpayment (or overpayment) of more than ten percent (10%) for a
twelve month period, in which case the reasonable expenses of the auditing party
shall be reimbursed by the other party. The parties shall promptly pay (or
refund) to the other, the amounts of any underpayments (or overpayments).
Page 6
7
8. CONFIDENTIALITY.
8.1 Confidential Information. The parties acknowledge that in the
course of performing under this Agreement, each party may be exposed to or
acquire information which is proprietary to or confidential to the other party,
its suppliers or customers ("Confidential Information"). Any and all such
Confidential Information of one party in any form obtained by the other party or
its employees, agents, or representatives in the performance of this Agreement
shall be deemed to be confidential and proprietary information of such party.
The parties agree to hold such Confidential Information in strict confidence, to
only permit use of such Confidential Information by its employees,
representatives, and agents having a need to know in connection with performance
under this Agreement, and not to copy, reproduce, sell, assign, license, market,
transfer, give or otherwise disclose the Confidential Information of the other
party to third parties or to use such Confidential Information for any purposes
whatsoever, except as expressly contemplated by this Agreement, without the
express written permission of the other party and to advise each of their
employees, agents, and representatives of their obligations to keep such
information confidential. The Healtheon Platform Software, Developed
Applications Additional Applications (unless otherwise specified in a Service
Exhibit), and Work Product shall be deemed to be the Confidential Information of
Healtheon. BSC's Database Information and interpretation rules shall be deemed
to be the Confidential Information of BSC.
8.2 Exceptions to Confidential Information. Confidential
Information shall not include information that (i) was, as of the time of its
disclosure, or thereafter becomes part of the public domain through a source
other than the receiving party; (ii) the receiving party can demonstrate was
independently known to the receiving party as of the time of its disclosure
without an obligation of confidentiality; (iii) the receiving party can
demonstrate it was independently developed by the receiving party without use of
materials containing the Confidential Information, or (iv) the receiving party
can demonstrate was subsequently learned from an independent third party not
under a confidentiality obligation to the providing party. In the event that a
receiving party is required to disclose certain Confidential Information of a
disclosing party pursuant to applicable law, court order or government
authority, the receiving party shall provide reasonable notice to the disclosing
party prior to such disclosure and shall cooperate with the disclosing party to
obtain protection from such disclosure. Anything to the contrary in this
Agreement notwithstanding, each party may use and exploit for any purpose any
programming techniques and ideas and concepts related to internet or computer
technology learned by its employees as a result of their exposure to the
Confidential Information of the other party and retained in the memory of such
employees after their last exposure to any computer code, documentation or
materials provided or owned by the other party, but excluding Healtheon Platform
Software, Developed Applications and Additional Applications design,
architecture and source code.
8.3 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 software provided to BSC hereunder.
Page 7
8
9. REPRESENTATIONS AND WARRANTIES.
9.1 Warranties for Services. Healtheon hereby represents and
warrants that (i) each person assigned to perform the Services shall have the
proper skill, training and background so as to be able to perform the Services
in a competent and professional manner and (ii) all Services and any Work
Product and other materials or documentation delivered under this Agreement
shall have been completed in a thorough and professional manner. In the event of
a breach of Healtheon's representations and warranties under this Section 9.1.
Healtheon's sole obligation shall be to use commercially reasonable efforts to
promptly correct any defects identified by BSC in a time frame reasonable to the
impact of the defect or within established service levels as defined in the
relevant Service Exhibits. Healtheon does not represent or warrant that all
defects can be corrected.
9.2 Third-Party Technology. BSC hereby represents and warrants
that it has obtained all necessary consents, licenses and/or assignments with
respect to the Third-Party Technology and Software (as defined in Service
Exhibit A) which is licensed and/or deployed by BSC and which are necessary in
order for Healtheon to perform the Services (excluding Healtheon's on-line
Services) to be performed hereunder. Healtheon hereby represents and warrants
that it has obtained all necessary consents, licenses and/or assignments with
respect to the third-party technology and software which is licensed and/or
deployed by Healtheon in its performance of the Development Work to be performed
hereunder.
9.3 Authority. Healtheon and BSC each hereby represents and
warrants to the other that it is duly organized and validly existing under the
laws of the jurisdiction in which it is organized, in good standing therein, and
has the power to enter into this Agreement and to perform its obligations
hereunder and, furthermore, that the performance by it of its obligations under
this Agreement has been duly authorized by all necessary corporate or other
action and will not violate any provision of law or regulation of any corporate
charter or bylaws.
9.4 Infringement. Healtheon and BSC each hereby represents and
warrants to the other that any information or technology provided by it to the
other party in order to define the specifications or to accomplish the
development objectives of this Agreement does not infringe, violate,
misappropriate, or in any manner contravene or breach any U.S. patent or any
trademark, copyright, trade secret right, license or other property, or
proprietary right of any third party.
9.5 No Implied Warranties. THE WARRANTIES STATED ABOVE IN THIS
SECTION 9 ARE THE ONLY WARRANTIES MADE BY EITHER PARTY. THE PARTIES DO NOT MAKE
AND HEREBY DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
THE PARTIES ACKNOWLEDGE THAT COMPLEX COMPUTER SOFTWARE AND SERVICES, SUCH AS THE
DEVELOPED APPLICATIONS AND THE SERVICES, ARE RARELY FREE OF DEFECTS OR ERRORS
AND HEALTHEON DOES NOT WARRANT THE SAME.
10. LIMITATION OF LIABILITY.
10.1 Exclusion of Certain Damages. EXCEPT FOR CLAIMS ARISING OUT OF
A BREACH OF SECTION 8 AND EXCEPT FOR DAMAGES AWARDED TO A THIRD PARTY PURSUANT
TO SECTION 11, UNDER NO CIRCUMSTANCES AND UNDER NO LEGAL THEORY SHALL EITHER
PARTY HAVE ANY LIABILITY FOR LOSS OF PROFITS, CONSEQUENTIAL,
Page 8
9
EXEMPLARY, INCIDENTAL OR PUNITIVE DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.
10.2 Limitation of Liability. EXCEPT WITH RESPECT TO INDEMNIFIABLE
CLAIMS AS PROVIDED IN SECTION 11.1 AND FOR CLAIMS ARISING OUT OF A BREACH OF
SECTION 8, IN NO EVENT SHALL EITHER PARTY'S AGGREGATE LIABILITY FOR ALL MATTERS
ARISING OUT OF THE SUBJECT MATTER OF THIS AGREEMENT, WHETHER IN CONTRACT, TORT
OR OTHERWISE, EXCEED [*] DOLLARS ($[*]) OVER THE PERIOD OF ANY YEAR DURING THE
TERM OF THE AGREEMENT AND THEN FOR ALL TIME AFTER THE TERM OF THE AGREEMENT.
(For example purposes only, if Healtheon is liable for claims equaling $[*] in
the first year of the Agreement, and for $[*] in the second year, then
Healtheon's liability would be $[*] in the first year, and $[*] in the second
year.) THE REMEDIES PROVIDED HEREIN ARE THE PARTIES' SOLE AND EXCLUSIVE
REMEDIES.
11. INDEMNIFICATION.
11.1 Indemnification. Healtheon agrees to hold harmless and defend
BSC from and against any and all claims, demands, suits, actions, or
proceedings, arising out of any actual or alleged infringement by Healtheon of
any copyright or any U.S. patent, trademark, or trade secret right or other
proprietary right, with respect to the Work Product and Healtheon Platform
Software, as delivered by Healtheon hereunder and used by BSC in accordance with
the terms of this Agreement. BSC agrees to hold harmless and defend Healtheon
from and against any and all claims, demands, suits, actions, or proceedings,
arising out of any actual or alleged infringement by Healtheon of any copyright
or any U.S. patent, trademark, or trade secret right or other proprietary right
which arises out of BSC's failure to obtain any necessary consents, licenses, or
assignments with respect to any Third-Party Technology or Software which has
been licensed and/or deployed by BSC and which is necessary in order for
Healtheon to perform the Services (but excluding Services relating solely to the
Developed Applications.).
In the event BSC exercises its license rights under Section
5.1, BSC 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 in any manner whatsoever
from or otherwise in respect to (a) BSC's, BSC Client's and/or BSC End User's
use of the Developed Applications, or (b) the failure of BSC to abide by the
terms and conditions of this Agreement relating to BSC's use of the Developed
Application.
11.2 Limitations. Healtheon shall have no indemnity obligation for
claims resulting from or alleged to result from (i) development work performed
by Healtheon in compliance with BSC's specifications where Healtheon's method of
compliance has been specifically compelled by the terms of BSC's specifications;
or (ii) BSC's use of the Work Product in combination with any hardware or
software not furnished by or authorized by Healtheon hereunder, if such
combination is the cause of such claim and the Work Product is not material to
the claim, or any modifications which have been made by BSC if such modification
is the cause of the claim. In addition, Healtheon shall have no indemnity
obligation for claims of infringement resulting or alleged to result from BSC's
failure within a reasonable time frame to implement any replacement or
modification which conforms to the requirements of Section 11.4 herein. BSC
shall have no indemnity obligations for claims resulting from or alleged to
result from Healtheon's breach of any Third-Party Technology or Software rights
where appropriate consents, licenses and/or assignments were obtained and
provided to Healtheon and Healtheon failed to adhere to the terms of applicable
consents, licenses and/or assignments.
[*]CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Page 9
10
11.3 Payment and Cooperation. Subject to the limitations set forth
in Section 11.2 above, the indemnifying party shall pay all losses, damages,
settlements, expenses, costs and reasonable attorneys' fees, incurred by the
indemnified party arising out of the matters set forth in Section 11.1 provided
that such payment shall be contingent on: (i) cooperation by the indemnified
party with the indemnifying party in the defense and or settlement thereof, at
the indemnifying party's expense; and (ii) allowing the Indemnifying Party to
control the defense and all related settlement negotiations. The indemnified
party shall give the indemnifying party prompt written notice of any such claim
to enable the indemnifying party to defend or mitigate the claim.
11.4 Remedy. If, in the event of an infringement action pertaining
to the Work Product, including the Developed Applications, and/or Healtheon
Platform Software and BSC's use of the such Work Product and/or Healtheon
Platform Software is disrupted, Healtheon shall, at its option, (i) provide BSC
with access to software which is functionally equivalent to the infringing
elements of the Work Product and/or Healtheon Platform Software as applicable,
without additional charge; (ii) modify the infringing portions of the Work
Product and/or Healtheon Platform Software, as applicable, to avoid the
infringement; or (iii) obtain a license for BSC to continue use of such Work
Product and/or Healtheon Platform Software, as applicable, for the term of the
applicable license and pay, on an annual basis, if Healtheon elects not to
acquire a perpetual license, the additional fee required for such license(s).
11.5 Sole Obligation. SECTION 11 SETS FORTH THE PARTIES' SOLE
OBLIGATION, AND THE SOLE RECOURSE AGAINST THE OTHER PARTY IN THE EVENT OF ANY
CLAIM OF INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.
11.6 In the event that an error or omission by Healtheon as part of
the IT Services provided to BSC under Service Exhibit A has caused a BSC Client
solely to suffer actual damage and the BSC Client has received compensation from
BSC for the actual damage, and if the Management Committee determines that such
error or omission was the result of negligence or a failure to meet the
warranties set forth in Section 9.1 above, then the Management Committee shall
determine the percentage of such damages amount that shall be payable by
Healtheon, taking into consideration the degree to which such error or omission
was the cause of such damage in relation to other contributing facts and
circumstances, including, without limitation, the errors, omissions, or
negligence of BSC, and Healtheon shall pay to BSC such amount as determined by
the Management Committee. Healtheon's obligations under this Section 11.6 shall
be subject to the Limitation of Liability set forth in Section 10.2 above.
12. TERM AND TERMINATION.
12.1 Term. This Agreement shall continue for a fixed term of five
(5) years from the Effective Date (the "Term") unless terminated earlier under
the provisions of this Section 12 or by the mutual agreement of the parties. At
the end of each year of the Term, the parties shall review the state of this
Agreement and have the option to mutually agree to extend the Term for an
additional year. For example, the parties shall meet after the first year of
this Agreement and review the state of the Agreement. At that time, the parties
may mutually agree to extend the term of the Agreement to a term of six years
from the Effective Date. Notwithstanding the foregoing, the licenses granted in
Sections 5.1 and 5.2 shall have a perpetual term unless terminated earlier
pursuant to Section 12.3 or 12.4 or by the mutual consent of the parties.
Page 10
11
12.2 Termination for Convenience. Either party may terminate this
Agreement upon one year prior written notice to the other for any reason.
Promptly following the notice of termination, the parties shall use good faith
efforts to agree to a commercially reasonable transition plan which will enable
the parties to mitigate any on-going expenses during the notice period.
12.3 Termination by Either Party for Default. If either party
defaults in the performance of any material provision of this Agreement, then
the non-defaulting party may give written notice to the defaulting party that if
the default is not cured within ninety (90) days of such notice the Agreement
will be terminated. If the non-defaulting party gives such notice and the
default is not cured during the ninety (90) day period, then the Agreement shall
automatically terminate at the end of that ninety (90) day period.
12.4 Insolvency. Either party may terminate this Agreement by
written notice to the other, and may regard the defaulting party as in default
of this Agreement, if the defaulting party becomes insolvent, makes a general
assignment for the benefit of creditors, suffers or permits the appointment of a
receiver for its business or assets, becomes subject to any proceeding under any
bankruptcy or insolvency law whether domestic or foreign, or has wound up or
liquidated, voluntarily or otherwise.
12.5 Effect of Termination. The provisions of Sections 7 (solely
with respect to Fees and other payments which were due and payable as of the
date of termination), 4, 8, 10, 11, and 13 (to the extent applicable) shall
survive the termination of this Agreement for any reason. All other rights and
obligations of the parties shall cease upon termination of this Agreement. In
the event of a termination, neither party shall be entitled to any refund of the
fees paid or cost incurred for the development performed hereunder. Provided
that this Agreement is not terminated by Healtheon pursuant to either Section
12.3 or 12.4 or by BSC pursuant to Section 12.2, upon termination, Healtheon
shall deliver to BSC a copy of each Developed Application, Additional
Application, Data Structure, and Database Information which has been completed
as of the date of termination or is under development, in source and object code
form, and the related technical and user documentation, and, in the event of the
exercise of BSC's option pursuant to Section 5.2, Healtheon shall deliver to BSC
a copy of the Healtheon Platform Software in object code form.
12.6 Return of Materials. Within thirty (30) days after the
termination of this Agreement, each party shall return to the other, all
Confidential Information, and other material of any kind which is the property
of the other party.
13. GENERAL.
13.1 No Exclusivity or Restriction on Other Activity. Except as
expressly set forth in this Agreement, nothing herein shall preclude either
party from entering into agreements to obtain similar services or development
work from third parties or from providing similar services or development work
to third parties.
13.2 Relationship of Parties. The relationship of the parties shall
be that of independent contractors. Neither party will represent that it has any
authority to assume or create any obligation, express or implied, on behalf of
the other party, or to represent the other party as agent, employee, or in any
other capacity, except as specifically provided herein.
Page 11
12
13.3 Binding Effect; Assignment. This Agreement shall be binding on
and inure to the benefit of the respective parties and their permitted
successors and assigns. Neither party shall transfer, assign, sublicense or
subcontract any right or obligation hereunder, except as expressly provided
herein. In the event of a change in control of a party hereto, such party shall
be permitted to assign this Agreement to the surviving or new corporation
acquiring all or substantially all of the business and assets of such party by
merger, acquisition, consolidation or otherwise, with the prior written consent
of the other party, which consent shall not be unreasonably withheld. Either
party may assign its rights under this Agreement to an entity which it controls,
with the prior written consent of the other party, which consent shall not be
unreasonably withheld. It shall not be unreasonable for a party to withhold its
consent if any proposed assignment would materially increase such party's
obligations under this Agreement or materially increase the scope of the other
party's rights (including but not limited to the grant of rights contained in
Section 5) or if such proposed assignee is a competitor of such party.
13.4 No Waiver. Either party's failure to exercise any right under
this Agreement shall not constitute a waiver of any other terms or conditions of
this Agreement with respect to any other or subsequent breach, nor a waiver by
such party of its right at any time thereafter to require exact and strict
compliance with the terms of this Agreement.
13.5 Notices. All notices or other communications which are
required or permitted to be given hereunder shall be in writing and shall be
sent to the address of the recipient set forth below or such other address as
the recipient may designate by notice given in accordance with the provisions of
this Section with copies to:
In the case of Healtheon: In the Case of BSC:
Healtheon Corporation Beech Street Corporation
0000 Xxxxxxx Xxxxx Xxxxx 173 Technology
Xxxxx Xxxxx, Xxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxx 00000
Attn: President Attn: President and COO
Copy to: General Counsel Copy to: Chief Financial Officer
Any such notice shall be delivered by either (i) first class registered or
certified airmail, postage prepaid, and shall be deemed to have been served
forty-eight (48) hours after posting; or (ii) express courier service, service
fee prepaid, and shall be effective upon delivery.
13.6 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, exclusive of
conflict of laws principles.
13.7 Severability. The invalidity of one or more phrases,
sentences, clauses or articles contained in this Agreement shall not affect the
remaining portions of this Agreement or any part thereof; and in the event that
one or more phrases, sentences, clauses or articles shall be declared void or
unenforceable this Agreement shall be amended to include only such portions of
such phrases, sentences clauses or articles that are not invalid, void or
unenforceable.
13.8 Entire Agreement; Amendments. This Agreement sets forth the
entire agreement between the parties and supersedes any other prior proposals,
agreements and representations between them related to its subject matter,
whether written or oral, including but not limited to the Prior Agreement
between the parties. No modifications or amendments to this Agreement shall be
binding upon the parties unless made in writing and duly executed by authorized
officials of both parties. It is
Page 12
13
expressly understood and agreed that no employee, agent, or other representative
of Healtheon has any authority to bind Healtheon with respect to any statement,
representations, warranty, or other expression unless the same is specifically
set forth in this Agreement. It is also understood and agreed that no usage of
trade or other regular practice or method of dealing between the parties hereto
shall be used to modify, interpret, supplement, or alter in any manner the terms
of this Agreement.
13.9 Attorneys' Fees. The prevailing party in any dispute shall be
entitled to collect from the other party the prevailing party's reasonable
attorneys' fees and costs in connection with the enforcement of this Agreement.
13.10 Non-Solicitation of Employees. Neither party shall solicit the
services or employment of any employee or agent of the other party during the
term of the Agreement, without the prior written consent of the other party. The
soliciting party who violates this Section 13.10 shall pay to the other party an
amount equal to one (1) years salary for any solicited employee of the other
party, as liquidated damages and not as a penalty. The amount of annual salary
shall be the annual salary in effect at the date the employee was solicited.
Initiation by an individual of contact regarding employment or response by an
individual to an advertisement or other generally available notice, shall not
constitute solicitation. BSC may solicit the services or employment of Healtheon
employees and agents who have a primary work location at a BSC office provided
that BSC provide Healtheon with notification prior to the solicitation.
13.11 Bankruptcy. The parties agree that the Agreement and any
related agreements are contracts under which Healtheon is a licensor of rights
to intellectual property within the scope of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Bankruptcy Code and that BSC shall have all the rights of a licensee set forth
in Section 365(n) of the Bankruptcy Code. Upon the commencement of a bankruptcy
petition involving either party, the other party shall be entitled to retain and
may fully exercise all rights and licenses available under the Bankruptcy Code,
subject to the fulfillment by the other party of its obligations under this
Agreement.
13.12 Residual Information. Without prejudice to either party's
proprietary rights, neither party shall be liable for using general ideas,
concepts and know-how that may be gained as a result of exposure to or contact
with the other party or its materials.
13.13 Escrow. Healtheon agrees that it will put the Healtheon
Platform Software, the Database Structures, the Database Information and the
Developed Applications, in escrow with an independent escrow agent on a yearly
basis. The escrow agreement will be on terms and conditions which are mutually
agreeable to the parties.
13.14 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.
13.15 U.S. Government Restricted Rights. The Healtheon Service and
the Healtheon Client Software are made available only with RESTRICTED RIGHTS.
All use, duplication, or disclosure of the
Page 13
14
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, 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000,
X.X.X.
13.16 No Third Party Beneficiaries. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto, and no
other person or entity shall be a direct or indirect beneficiary of, or shall
have any direct or indirect cause of action or claim in connection with this
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the Effective Date.
Healtheon Corporation Beech Street Corporation
By: /s/ By: /s/
----------------------------------- ---------------------------------
Title: Title:
-------------------------------- ------------------------------
Date: Date:
--------------------------------- -------------------------------
Page 14
15
SERVICE EXHIBIT A
IT SERVICES
This Service Exhibit A is subject to and incorporates the terms of the Master
Services, Development and License Agreement (the "Agreement") dated November
___, 1999 between Healtheon Corporation ("Healtheon") and Beech Street
Corporation ("BSC").
1. Scope of Services. Healtheon will operate and maintain BSC's
information technology infrastructure and data processing functionality and
related services (collectively referred to as "IT Services"), including the
following types of services, as necessary and agreed to by the parties:
- Maintain hardware operations
- Maintain software infrastructure
- Maintain data network(s)
- Maintain desktop computing systems
- Provide internal and external technical support
- Provide project planning and management
- Provide software installation
- Provide hardware installation
- Provide user technical support
- Provide user training
- Provide IT personnel management services
- Provide IT consulting services
- Provide custom software solution design and development services
2. Term. The term of this Service Exhibit A shall commence on the
Effective Date of the Agreement and, unless earlier terminated as provided
herein, shall continue for the term of the Agreement. The parties will review
the terms of this Service Exhibit A within ninety days after the Effective Date
and determine whether the IT Services to be provided should be more fully
addressed in a mutually agreed-upon amendment hereto. Beginning June 30, 2000,
and on each six month anniversary thereafter, BSC will review the IT Services
provided hereunder, and, if BSC reasonably determines that such services do not
adequately meet the requirements set forth in this Service Exhibit A or amended
version thereof ("IT Requirements"), BSC may provide Healtheon with a written
notice identifying those aspects not meeting such IT Requirements, and stating
BSC's intent to terminate the Service Exhibit in six (6) months. If, by the end
of such six (6) month period, Healtheon fails to improve the IT Services such
that the IT Requirements are met, this Service Exhibit will automatically
terminate.
BSC reserves the right to terminate this Service Exhibit with 90 days written
notice.
3. Third Party Technology and Software. In order to perform the Services
contemplated hereunder (but excluding Services relating solely to the Developed
Applications), BSC represents that Healtheon will need to have access only to
the third-party technology and software listed on Attachment A-1 which is
licensed and/or deployed by BSC (the "Third-Party Technology and Software"). BSC
hereby agrees to use commercially reasonable efforts to obtain, at its own
expense, all necessary consents, licenses and/or assignments which may be
necessary in order for Healtheon to perform such Services. Healtheon shall use
commercially reasonable efforts to cooperate with BSC to assist BSC in obtaining
any necessary consents, licenses and/or assignments to Third-Party Technology
and Software. During the term of this
Page 15
16
Agreement, BSC hereby grants to Healtheon a nonexclusive and nontransferable
right and license to use, modify and copy all technology and software owned by
BSC which is necessary for Healtheon to perform the Services.
4. Fees. For IT Services performed hereunder, BSC will pay Healtheon the
associated direct expenses and management fee as set forth below:
Direct Expenses: Healtheon shall charge BSC [*]% of Healtheon's
"direct" expenses associated with the IT Employees, including salary, and
benefits calculated at an assumed rate equal to [*]% of each IT Employee's
salary. "IT Employees" means those Healtheon employees or contractors whose
primary responsibility is the providing of IT Services hereunder at BSC's
facilities. Healtheon agrees that it will not charge BSC (i) any support
expenses, such as rent, phone, computing, office expenses for those IT
Employees; or (ii) any Healtheon "allocated" expenses, such as management,
administration, other overhead cost, etc., with respect to such IT Employees. In
the event that Healtheon decides to provide any of the IT Employees with
Healtheon stock options, Healtheon agrees that it will not charge BSC any
expenses associated with any such grants.
Healtheon Management Fees: The management fees for the remainder of
1999 will reflect a monthly management fee of $[*]. The parties will negotiate
the management fee to be applied to the remaining term of this Agreement.
The parties shall mutually develop a budget for the total fees and
expenses under this Service Exhibit and Healtheon shall make a reasonable
attempt to complete the services under this Service Exhibit within this budget.
5. Ownership Rights. Except as otherwise provided in this Section 5, all
work product created by Healtheon for BSC under this Service Exhibit ("IT
Service Product") is the sole property of BSC. Healtheon acknowledges and agrees
that BSC shall have all proprietary rights to all IT Service Product including,
but not limited to, all technology of any nature whatsoever, all notes, records,
drawings, designs, inventions, improvements, developments, discoveries, and any
copyrightable material, and all patentable inventions, conceived, made or
discovered by Healtheon employees under this Service Exhibit, solely or in
collaboration with others, in the performance of the Services performed under
this Service Exhibit, including any derivative works of any of the foregoing.
Healtheon acknowledges and agrees that BSC shall have all proprietary rights in
and to the IT Service Product, including, without limitation, all copyrights,
patents and trade secret rights, all moral rights, all contract and licensing
rights, and all claims and causes of action of any kind with respect to any of
the foregoing, whether now known or hereafter to become known, and that BSC
shall have the sole and exclusive right to use, modify and exploit the IT
Service Product in any manner that BSC may choose. Notwithstanding the
foregoing, IT Service Product shall not include, and Healtheon shall have sole
ownership of all right, title, and interest in and to, all enhancements,
modifications, improvements, and derivative works of the Healtheon Platform
Software, the Developed Applications, and the Additional Applications (excluding
those Additional Applications owned by BSC), created by Healtheon employees in
their performance under this Service Exhibit, or created by or for BSC
("Healtheon Improvements"), and all intellectual property rights therein.
Healtheon agrees that the software currently under development by Xx. Xx Xxxxx
for BSC is solely owned by BSC. Subject to the terms and conditions of the
Agreement, the licenses granted to BSC under Section 5.2 of the Agreement shall
apply to Healtheon Improvements of the Healtheon Platform Software, and the
licenses granted to BSC under Section 5.1 the Agreement shall apply to Healtheon
Improvements of the Developed Applications. Healtheon shall not use or provide
to third parties any Healtheon Improvements of the Developed Applications.
[*]CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Page 16
17
ATTACHMENT A-1
THIRD PARTY TECHNOLOGY AND SOFTWARE
SERVER TECHNOLOGY AND SOFTWARE
HOST NAMES DESCRIPTIONS OS IP ADDRESS ROLES AND FUNCTIONS
IRVINEFP CPQ 1500, Tower P133 NT4.0 SP5 192.168.200.5 Primary Domain Controller, File and
192.168.201.5 Print server, DHCP, and DNS
IRVINE2FP CPQ 1500, Tower P133 Ent NT4.0 SP5 192.168.201.15 Backup Domain Controller, File and
Print, and WINS
IRVINESECURE CPQ 850r PII 200 NT4.0 SP5 192.168.200.16 Backup Domain Controller and Cisco 5200
192.168.201.16 Secure GUI Interface
IRVINE1 CPQ 1500, Tower P133 Novell 312 File and Print
IRVINE2 CPQ 1500, Tower P133 Novell 312 File and Print
BEECH AST Tower Novell 312 File and Print, AS/400 Imaging
BEECHSAA AST Desktop Novell 312 Gateway for netware to AS/400,
Interface with AS/400 Imaging, and
File Transfer
GATEWAY3 CPQ Deskpro 575 NT4.0 SP5 192.168.200.56 Backup Domain Controller, SNA for
AS/400 Share folder
NOTES11 CPQ 2500r P200 NT4.0 SP5 192.168.200.4 Lotus Notes Email, GWI Apps
192.168.201.4
NOTES22 CPQ 2500r P200 NT4.0 SP3 192.168.200.9 GWI Apps
NOTES33 CPQ 850r PII 200 NT4.0 SP3 192.168.200.7 Lotus Notes SMTP Gateway
192.168.201.7
FRONTSTREET CPQ 3000r (2) PIII 500 NT4.0 SP5 192.168.199.24 Enterprise Backup System
ELMSTREET CPQ 3000r (2) PIII 500 Ent NT4.0 SP5 192.168.199.22 Enterprise File and Print/cluster,
Payroll Application, and PPO
PINESTREET CPQ 3000r (2) PIII 500 Ent NT4.0 SP5 192.168.199.23 Enterprise File and Print/cluster,
Payroll Application, and PPO
STATESTREET CPQ 5500 (4) PIII 500 Xeon Ent NT4.0 SP5 192.168.199.26 Enterprise SQL, IIS4.0 in Cluster, BARCC
CAPITALSTREET CPQ 5500 (4) PIII 500 Xeon Ent NT4.0 SP5 192.168.199.27 Enterprise SQL, IIS4.0 in Cluster, BARCC
MAINSTREET1 CPQ 2500r (2) P200 NT4.0 SP5 192.168.201.20 Backup Domain Controller (Cappcare),
Exchange Email
MAINSTREETEXCON CPQ 1600r P300 NT4.0 SP5 192.168.201.21 BDC (Cappcare), Exchange SMTP, and
Lotus Notes Connector
EXCSERV CPQ 2500r P200 NT4.0 SP5 172.16.10.25 PDC (Cappcare), WINS, and local DHCP
ARCSERV Dell PII 200 NT4.0 SP5 172.16.10.250 BDC (Cappcare), Arcserv for NT and DNS
CAPPSERV Novell 411 CORP, File and Print, and Old FTP
CASESERV CPQ 2500r P200 Novell 411 File and Print, and CMA Application
CITRIX CPQ Prolinea 800 PII 200 NT3.51 XX0 Xxxxxxxx0.0 for CMA Apps
SQLSERV CPQ 2500r P200 NT4.0 SP5 172.16.10.24 SQL6.5, Healtheon Upload and Download
INETSERV CPQ Prolinea NT4.0 SP5 208.145.144.33 Cappacare Firewall
COMMSERV CPQ Prolinea Novell 411 Novell communication server
POLKSTREET CPQ 1500, Tower P133 NT4.0 SP5 10.101.2.49 BDC (Western), File and Print
LAKESTREET CPQ 2500r P200 NT4.0 SP5 10.251.171.36 BDC (Chicago), File and Print
PEACHSTREET CPQ 2500r P200 NT4.0 SP5 10.251.171.68 BDC (Atlanta) File and Print
WOODSTREET CPQ 1500, Tower P133 NT4.0 SP5 192.168.111.5 BDC (Edison, NJ), File and Print
Page 17
18
TYLERSTREET CPQ 1500, Tower P133 NT4.0 SP5 192.168.103.5 BDC (Tampa), File and Print
BCHPR2 AS/400 9406/530 OS/400 192.168.201.10 BSC Production Machine
BCHDV1 AS/400 9406/500 OS/400 192.168.201.11 Development Machine
CAPPRICE AS/400 9406/530 OS/400 192.168.200.12 Cappcare Production Machine
DMACHINE AS/400 9406/500 OS/400 192.168.200.13 Development Machine
WEBTOHOST AS/400 720 OS/400 192.168.200.3 Web to Host
VOICE TECHNOLOGY AND SOFTWARE
BSC - TECHNOLOGY VOICE SYSTEMS
Northern Telecom PBX 61C
Northern Telecom Meridian Mail
CCR - ACD Scripting System
MAX - ACD Reporting System
TAMPA, FLORIDA - VOICE SYSTEMS
Norstar PBX System
StarTalk Voice Mail System
EDISON, NEW JERSEY VOICE SYSTEMS
Norstar PBX System
StarTalk Voice Mail System
MACARTHUR VOICE MAIL SYSTEMS
Lucent PBX - G3si
Intuity Voice Mail System
CMS ACD System
WESTERN REGION - 5000 BIRCH STREET
Lucent PBX - VS
Intuity Voice Mail System
CENTRAL REGION - OAKBROOK, ILLINOIS
Lucent PBX - VS
Intuity Voice Mail System
EASTERN REGION - ATLANTA, GEORGIA
Lucent PBX - VS
Intuity Voice Mail System
ADDITIONAL TECHNOLOGY AND SOFTWARE
OS/400
OV/400
JDEdwards
CA-PRMS
Hawkeye
PerZip
TurnOver
Page 18
19
PeekPlus
Novell IntranetWare
MS NT
MS Exchange
MS Professional Office Suite
MS Project
MS PowerPoint
MS Windows
MS Outlook
MS Internet Explorer
MS Visual Interdev
MS IIS
Visio
Visual Basic
SQL Server
HahtSite
MapInfo MapMarker
MapInfo MapXsite
GeoAccess
FoxPro
Netscape Navigator
Lotus Notes
Crystal Reports
Case Manager Assistant (CMA)
Paradox
WinFrame
ArcServ
Adobe Photoshop
PCAnywhere
QuarkXpress
GWI Help!
Fixed Asset System
Page 19
20
SERVICE EXHIBIT B
PROVIDERWORKS APPLICATION DEVELOPMENT WORK
This Service Exhibit B is subject to and incorporates the terms of the Master
Services, Development and License Agreement (the "Agreement") dated November __,
1999 between Healtheon Corporation ("Healtheon") and Beech Street Corporation
("BSC").
1. Development Work. Healtheon shall design, develop, test, and complete
Healtheon's ProviderWorks Application incorporating BSC's Repricing
Configuration. A "Repricing Configuration" for a particular entity means a
configuration of the application and associated database that is determined by
such entity's claim reimbursement schedules, and the repricing contracts between
such entity and its affiliated providers and payers. The specifications for the
ProviderWorks Application to be developed hereunder are described in Attachment
B-1 ("Specifications"), which is attached hereto for reference. The parties
shall jointly develop a mutually agreeable detailed project plan, which shall be
described in Attachment B-2 ("Project Plan"), which is attached hereto for
reference. The Project Plan shall describe, in a degree of detail reasonably
satisfactory to the parties, all tasks and responsibilities required for the
successful and timely completion of the development and delivery of the
ProviderWorks Application, including the projected costs. The ProviderWorks
Application incorporating BSC's Repricing Configuration shall be deemed a
"Developed Application" for purposes of the Agreement.
2. Project Managers. The Project Managers shall coordinate the development
of the ProviderWorks Application. In addition, the Project Managers shall be
responsible for the development of the Project Plan, coordinating their
respective personnel and resources to satisfy their respective responsibilities,
administering Change Requests, and arranging for the transmission and receipt of
any deliverables, information and periodic status reports as required under the
Project Plan. From time to time during the term of this Agreement, each party
may replace its Project Manager with another person having equivalent authority
by providing written notice to the other party.
3. Change Requests. From time to time prior to the completion of the
Development Work hereunder, BSC may propose changes to the Project Plan and/or
Specifications ("Change Requests"). Such Change Requests shall be submitted in
writing. Healtheon shall review the Change Request and advise BSC whether
Healtheon's assessment of and response to the Change Request will require
payment of fees by BSC 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 BSC a cost estimate for implementing the
change and shall advise BSC of the impact on the ProviderWorks Application. No
such changes, however, shall become effective until a written amendment
specifying the change or changes is executed by authorized representatives of
both parties.
4. Development Team. Healtheon shall provide an engineering team staffed
with up to forty engineers until the completion of the Development Work in
accordance with the Project Plan. In the event that the Project Plan require
additional personnel resources, the parties will revise the staffing commitments
hereunder.
Page 20
21
5. System Testing and Final Acceptance.
5.1 Testing. In accordance with the Project Plan, the parties will
mutually agree upon a plan for testing the ProviderWorks Application ("Test
Plan"). Within fifteen (15) days following the completion of testing in
accordance with the Test Plan, BSC will give notice of its acceptance or
rejection of the ProviderWorks Application provided to BSC hereunder. BSC shall
accept the ProviderWorks Application if it substantially meets the
Specifications in all material respects. If BSC determines that the
ProviderWorks Application does not substantially meet the Specifications in all
material respects, then BSC shall notify Healtheon in writing of the
non-compliances identified by BSC. If BSC provides Healtheon with a notice of
non-compliance within such fifteen (15) day period, then within thirty (30) days
after its receipt of such notice, Healtheon shall correct the non-compliance and
document to BSC the corrective actions. Upon receiving such documentation of
corrective action, BSC shall immediately retest the ProviderWorks Application 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
BSC. BSC shall have been deemed to accept the ProviderWorks Application upon (i)
BSC's delivery to Healtheon of a written notice of acceptance, (ii) BSC's
failure to provide notice of rejection or acceptance within fifteen (15) days
following completion of testing under the Test Plan, or (iii) BSC's use of the
ProviderWorks Application other than for testing purposes.
5.2 Rejection of ProviderWorks Application. Upon expiration of the
testing and acceptance process described in Section 5.1 above, if the
ProviderWorks Application fails to meet the Acceptance Criteria, BSC shall have
the option of either (i) accepting the ProviderWorks Application as it is then
currently implemented; or (ii) rejecting the ProviderWorks Application and
terminating this Service Exhibit. THESE RIGHTS OF ACCEPTANCE AND REJECTION
CONSTITUTE BSC'S SOLE REMEDY IN THE EVENT OF ANY FAILURE OF THE PROVIDERWORKS
APPLICATION TO MEET THE ACCEPTANCE CRITERIA. In the event BSC rejects the
ProviderWorks Application under this Section 5.2, the ProviderWorks Application
shall not be licensed under Sections 5.1 and 5.3 in the Agreement, and BSC shall
promptly return all copies thereof to Healtheon.
6. Ongoing Development. Following completion of the ProviderWorks
Application under Section 1 above, Healtheon will continue to provide, upon
BSC's request, services for the further development of the ProviderWorks
Application on a time and materials basis.
7. Revenue Sharing by Healtheon. Healtheon shall pay to BSC the Applicable
Percentage (as defined in this Section 7) of Net Revenues (as defined below)
with respect to ProviderWorks On-Line Services received from Healtheon's
ProviderWorks customers. "Net Revenues" shall mean the revenues received by
Healtheon from a Healtheon ProviderWorks customer for ProviderWorks On-Line
Services less any amounts paid or owed by Healtheon to anyone on account of the
revenues received, including but not limited to taxes, royalties, leased network
fees, broker fees, commissions paid to outside third parties, subcontractor
vendor fees and other such reasonable and customary fees as may apply from time
to time. The "Applicable Percentage" with respect to Healtheon's ProviderWorks
On-Line Services shall be [*] percent ([*]%) if the customer is a Qualified
Healtheon Customer, or [*] percent ([*]%) otherwise. A customer will be
designated as a "Qualified Healtheon Customer" if BSC generated the lead,
participated in sales calls, demonstrations, and negotiations, and brought the
sale by Healtheon to such customer to conclusion, such designation to be
determined by the parties on a case-by-case basis. Healtheon's obligation under
this Section 7 shall continue for the term of this Service Exhibit B for so long
as BSC
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Page 21
22
continues to use its best efforts to market the ProviderWorks On-Line Services,
and to pay the Development Services fees due hereunder.
8. Limitation on Right to Modify. Nothwithstanding Section 5.1 of the
Agreement, BSC may use the ProviderWorks Application solely in a BSC Repricing
Configuration, and may not reconfigure the ProviderWorks Application for a third
party Repricing Configuration.
9. Fees and Expenses. For Development Work performed hereunder, BSC will
pay Healtheon development fees at a rate of $[*] per hour. The parties shall
mutually develop a budget for the total fees and expenses under this Service
Exhibit and Healtheon shall make a reasonable attempt to complete the
Development Work within this budget.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Page 22
23
ATTACHMENT B-1
SPECIFICATIONS
The parties shall mutually agree upon the ProviderWorks Specifications to be
included in this Attachment B-1.
Page 23
24
ATTACHMENT B-2
PROJECT PLAN
Healtheon will provide the first draft of the Project Plan to BSC within ninety
(90) days after the Effective Date.
Page 24
