MANAGEMENT SERVICES AGREEMENT
Between
SYNETIC HEALTHCARE COMMUNICATIONS, INC.
And
THE HEALTH INFORMATION NETWORK CONNECTION LLC
TABLE OF CONTENTS
1. DEFINITIONS..........................................................1
2. SYNETIC'S RESPONSIBILITIES...........................................5
3. THINC'S RESPONSIBILITIES.............................................7
4. TRANSITION...........................................................8
5. FEES AND PAYMENT.....................................................9
6. CONFIDENTIALITY.....................................................10
7. PROPRIETARY RIGHTS..................................................11
8. TERM AND TERMINATION................................................11
9. WARRANTIES..........................................................13
10. LIMITATIONS AS TO AMOUNT AND TYPE OF LIABILITY......................16
.
11. INDEMNITIES.........................................................16
12. DISPUTE RESOLUTION AND ARBITRATION..................................19
13. GENERAL.............................................................19
TABLE OF SCHEDULES
SCHEDULE A: Operating Plan
SCHEDULE B: Content and Messaging Services
SCHEDULE C: Third-Party Agreements
SCHEDULE D: THINC Employees
SCHEDULE E: Synetic Charges for Management Services
SCHEDULE F: Insurance
SCHEDULE G: Customer Contracts
SCHEDULE H: Performance Standards
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MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (the "Agreement") is between Synetic
Healthcare Communications, Inc., a Delaware corporation having its principal
place of business at River Drive Center 2, 669 River Drive, Elmwood Park, New
Jersey 07407-1361 (hereinafter "Synetic") and The Health Information Network
Connection LLC, a New York limited liability company having its principal place
of business at 1155 Avenue of the Americas, New York, New York 10036
(hereinafter "THINC"), and is effective as of January 1, 1999.
WHEREAS, THINC is engaged in the business of establishing a community
health information network in the New York City metropolitan area (as defined
further herein, the "THINC Network") and Synetic is engaged in the business of
providing healthcare communications products and services in the New York City
metropolitan area and in other areas of the United States;
WHEREAS, Synetic, THINC and the Members of THINC have entered into
simultaneously herewith an Amended and Restated Operating Agreement and other
Related Agreements (as hereinafter defined) whereby, among other things, Synetic
will become the Contract Manager (as defined in the Operating Agreement) of
THINC;
WHEREAS, THINC desires to outsource all Management Services (as
hereinafter defined) and other functions performed by THINC to Synetic, subject
to the terms of this Agreement;
WHEREAS, following the Transition Period (as hereinafter defined), Synetic
will become the Contract Manager of THINC, managing all aspects of THINC's
business, subject to the terms of this Agreement;
WHEREAS, as part of its services, Synetic will provide THINC with certain
Content and Messaging Services (as hereinafter defined); and
WHEREAS, THINC will provide Synetic with the exclusive right to deploy
Synetic's Clinical Transaction Services (as hereinafter defined) on the THINC
Network (as hereinafter defined).
NOW, THEREFORE, in consideration of the mutual covenants and agreements
described in this Agreement, the parties hereby agree as follows:
1. DEFINITIONS
1.1 1997 Financial Statements. "1997 Financial Statements" shall have the
meaning set forth in Section 9.1.11.
1.2 Agreement. "Agreement" shall refer to the terms and conditions set forth
herein and in the Schedules attached hereto, which are hereby made an integral
part of this Agreement and shall be read as if included within the text of this
Agreement.
1.3 Board of Managers. "Board of Managers" shall have the meaning set
forth in the Operating Agreement.
1.4 Change of Control. "Change of Control" shall have the meaning set
forth in Section 8.7.
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1.5 Clinical Transaction Contract. "Clinical Transaction Contract" shall mean
the contract entered into by Synetic and each of the Current Payer-Members on
the date of this Agreement and any contract entered into by Synetic and any
other Payer in the future, in each case for the provision by Synetic of Clinical
Transaction Services.
1.6 Clinical Transaction Services. "Clinical Transaction Services" shall mean
and include any or all of Synetic's prescription and laboratory services which
connect physicians, staffs and patients, with payers, pharmacies, hospitals,
laboratories, suppliers or other organizations involved in the concurrent,
retrospective or prospective communications of information relating to or
prompted by the selection or use of a prescription drug or lab test (as
applicable) by physicians on behalf of patients, all as provided pursuant to the
Clinical Transaction Contract.
1.7 Confidential Information. "Confidential Information" shall have the
meaning set forth in Section 6.1.
1.8 Confidential Member Information. "Confidential Member Information"
shall mean any information identified in writing by a Member as
"confidential."
1.9 Content and Messaging Services. "Content and Messaging Services"
shall mean, collectively, the services described on Schedule B hereto.
1.10 Cure Period. "Cure Period" shall have the meaning set forth in
Section 8.3.
1.11 Current Payer-Member. "Current Payer-Member" shall mean each of Empire
Blue Cross and Blue Shield, Group Health Incorporated and Health Insurance
Plan of Greater New York.
1.12 Customer Contracts. "Customer Contracts" shall have the meaning set
forth in Section 2.2.
1.13 Debtor Relief Law. "Debtor Relief Law" shall have the meaning set
forth in Section 8.8.
1.14 Effective Date. "Effective Date" shall mean the date of this
Agreement first written above.
1.15 GNYHA. "GNYHA" shall mean GNYHA Management Corporation.
1.16 GNYHA Member. "GNYHA Member" shall mean a member of the Greater New York
Hospital Association.
1.17 Health Plan Competitor. "Health Plan Competitor" shall mean an organization
that is engaged primarily in the business of providing health insurance or
health maintenance organization services.
1.18 Indemnified Party. "Indemnified Party" shall have the meaning set
forth in Section 11.3.1.
1.19 Indemnifying Party. "Indemnifying Party" shall have the meaning set
forth in Section 11.3.1.
1.20 Interim Financial Statements. "Interim Financial Statements" shall
have the meaning set forth in Section 9.1.11.
1.21 Liabilities. "Liabilities" shall have the meaning set forth in
Section 9.1.13.
1.22 Losses. "Losses" shall have the meaning set forth in Section 11.4.
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1.23 Managed Care Services. "Managed Care Services" shall mean and include any
or all of THINC's managed care transaction services, which include claims
submission, on-line (batch and real-time) eligibility, benefit plan detail,
roster distribution, remittance advice distribution, online claims inquiry,
electronic referral/pre-certification and authorization, and encounter
submission, all as provided pursuant to the Managed Care Transaction Contract.
1.24 Managed Care Transaction Contract. "Managed Care Transaction Contract"
shall mean the contract entered into by THINC and each of the Current
Payer-Members on the date of this Agreement and any contract entered into by
THINC and any other Payer in the future, in each case for the provision by THINC
of Managed Care Services.
1.25 Management Services. "Management Services" shall mean any and all services
relating to the management and day-to-day administration and operation of all
aspects of THINC's business, including without limitation administration,
finance, legal, product development, operations, information systems, marketing
and sales, customer support and account management functions, and
implementation, support and training services to enable use of the Content and
Messaging Services.
1.26 Member. "Member" shall mean any current or future member of THINC,
including without limitation Synetic, GNYHA and any Current Payer-Member.
1.27 Millennium Compliant. "Millennium Compliant" shall have the meaning
set forth in Section 9.2.7.
1.28 Operating Agreement. "Operating Agreement" shall mean that certain Amended
and Restated Operating Agreement of even date herewith entered into by and among
Synetic, GNYHA Management Corporation and the Current Payer-Members, as the same
may be amended or modified from time to time.
1.29 Operating Plan. "Operating Plan" shall mean the preliminary operating plan
(including budget) attached as Schedule A to this Agreement, which Operating
Plan shall be reviewed and amended in accordance with Section 2.4 hereto and the
Operating Agreement.
1.30 Payer. "Payer" shall mean an insurer, health maintenance organization or
other payer of health-related claims.
1.31 Performance Cure Period. "Performance Cure Period" shall have the
meaning set forth in Section 8.6.
1.32 Services. "Services" shall mean, collectively, the Management
Services and the Content and Messaging Services.
1.33 Synetic Proprietary Materials. "Synetic Proprietary Materials" shall mean,
collectively, the Content and Messaging Services, the Clinical Transaction
Services, and any other Synetic-owned or licensed system or technology
(excluding only the THINC Proprietary Materials) used by Synetic in connection
with the provision of the Management Services, the Content and Messaging
Services, and the Clinical Transaction Services, including without limitation
any related communications/integration network designed, developed or
implemented by Synetic, and all software, proprietary elements, documentation,
records and other Synetic-owned or licensed trade secrets or know-how related to
any of the foregoing, including but not limited to all copyrights, trademarks,
patents, trade secrets and other intellectual property rights inherent therein
or appurtenant thereto, and any modifications, enhancements,
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updates and upgrades thereto owned by Synetic or its licensors as of the
Effective Date or thereafter created, designed or developed by Synetic, its
employees or agents.
1.34 Synetic Relationship Manager. "Synetic Relationship Manager" shall
have the meaning set forth in Section 2.3.
1.35 Synetic System. "Synetic System" shall have the meaning set forth in
Section 9.2.5.
1.36 Term. "Term" shall have the meaning set forth in Section 8.1.
1.37 THINC Employees. "THINC Employees" shall mean THINC personnel identified on
Schedule D hereto.
1.38 THINC Facilities. "THINC Facilities" shall have the meaning set forth
in Section 4.3.
1.39 THINC Network. "THINC Network" shall mean and refer to the network of THINC
equipment, hardware, software and services owned or leased by THINC for the
processing or provision of healthcare communications services in the New York
City metropolitan area.
1.40 THINC Proprietary Materials. "THINC Proprietary Materials" shall have the
meaning set forth in Section 4.4.
1.41 THINC Relationship Manager. "THINC Relationship Manager" shall have the
meaning set forth in Section 3.1.
1.42 THINC-Supplied Assets. "THINC-Supplied Assets" shall have the meaning
set forth in Section 4.2.
1.43 Third-Party Business Property Rights. "Third-Party Business Property
Rights" shall have the meaning set forth in Section 9.1.9.
1.44 Transition Period. "Transition Period" shall mean the sixty (60)-day period
following the Effective Date of this Agreement during which the management of
THINC's operations is transferred from THINC to Synetic, or such longer period
that THINC and Synetic agree is necessary for the completion of such transition.
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2. SYNETIC'S RESPONSIBILITIES
2.1 Management Services. Following the Transition Period, Synetic shall provide
to THINC the Management Services in material accordance with the Operating Plan.
Without limiting the generality of the foregoing, Synetic shall be responsible
for conducting the management functions set forth in the Operating Plan, and
performing the tasks described in the Operating Plan relating to each such
function, subject in each case to such qualifications and other conditions as
are set forth in the Operating Plan. The parties acknowledge that the financial
targets set forth in the Operating Plan, and the ability of Synetic to
successfully achieve the goals or implement the strategies described in the
Operating Plan, are based on certain assumptions and other factors beyond
Synetic's reasonable control. Accordingly, the failure of THINC to meet such
financial targets or of Synetic to successfully achieve such goals or implement
such strategies shall not, in and of itself, be deemed a breach of this
Agreement. Synetic acknowledges and agrees, however, that it shall not incur
costs or expenses on behalf of THINC in any fiscal year in excess of the
aggregate amount of budgeted cost of sales, operating expenses and capital
expenditures for such fiscal year set forth in the Operating Plan without first
obtaining the required approval of the Members, as provided in the Operating
Agreement.
2.2 Standards of Performance. Synetic agrees to use due care and act in good
faith in its performance of the Management Services and to provide the
Management Services in a professional and businesslike manner and in accordance
with standard industry practices. In addition, provided that the conduct of such
THINC performance shall be within Synetic's reasonable control, Synetic agrees
to (a) cause THINC to perform in all material respects in accordance with the
terms of the contracts entered into between THINC and its customers listed on
Schedule G (the "Customer Contracts") and the Managed Care Transactions
Contracts entered into with the Current Payer-Members, except for certain
provisions of the Customer Contracts described on Schedule G, and (b) cause
THINC to perform in all material respects in accordance with the terms of each
contract entered into by Synetic on behalf of THINC.
2.3 Synetic Relationship Manager. Synetic will appoint a relationship manager to
manage the relationship established by this Agreement (the "Synetic Relationship
Manager") who will (a) coordinate and monitor Synetic's obligations under this
Agreement, and (b) serve as the primary liaison with the THINC Relationship
Manager.
2.4 Operating Plan. During the ninety (90) day period following the Effective
Date, Synetic will modify the preliminary Operating Plan attached as Schedule A
to this Agreement, as appropriate, to reflect information made available to it
during the Transition Period and other new information, and review such modified
Operating Plan with the Members. Synetic and each of the other Members will then
agree on a revised Operating Plan, which will replace such preliminary Operating
Plan. In the event that unanimous agreement of Synetic and such Members is not
reached, the Operating Plan attached as Schedule A to this Agreement shall
remain in effect unless and until it is modified pursuant to the terms of the
Operating Agreement. Thereafter, Synetic shall periodically review the Operating
Plan with the Board of Managers and in the event Synetic determines to amend the
Operating Plan, Synetic shall seek required approval of the Members, as provided
in the Operating Agreement.
2.5 Content and Messaging Services. Subject to the terms contained in this
Agreement, Synetic will provide THINC with access to and the right to use of the
Content and Messaging Services. Synetic and THINC will mutually agree upon the
timing of deployment of the Content and Messaging Services. Prior to such
deployment, and subject to the terms of this Agreement, Synetic will provide to
THINC any software and documentation necessary to allow physicians to access the
Content and Messaging
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Services.
2.6 Exclusive Use of THINC Network for Clinical Transaction Services. Synetic
will use the THINC Network, on an exclusive basis, to provide the Clinical
Transaction Services with the Current Payer-Members and other Payers in the New
York City metropolitan area, except to the extent that either (i) network
configurations of such Current Payer-Members and other Payers or third-party
distribution entities (e.g., physician office management or hospital information
systems (POMIS/HIS) vendors, pharmaceutical benefit managers, integrated
delivery networks, laboratory companies, other entities that provide software or
other online access to physician offices) make it impractical or prohibitively
expensive to use the THINC Network for such Clinical Transaction Services; or
(ii) such Current Payer-Members and other Payers or third-party distribution
entities will not permit Synetic to use the THINC Network after Synetic has used
its reasonable best efforts to cause such Current Payer-Members or other Payers
or third-party distribution entities to permit such use. Notwithstanding
exceptions (i) and (ii) set forth above, Synetic will not manage a network in
the New York City metropolitan area to conduct Clinical Transaction Services
that is competitive to the THINC Network.
2.7 Control of Services. The Services shall be under the exclusive control,
management and supervision of Synetic, subject to the terms and conditions of
the Operating Agreement. Synetic may, in its sole discretion (unless otherwise
expressly provided in the Operating Agreement): (a) enter into contracts and
other arrangements on behalf of THINC which are in the ordinary course of
THINC's business and in material accordance with the Operating Plan, (b) enter
into any other contracts and other arrangements on behalf of THINC, provided
that Synetic obtains approval from the Board of Managers of THINC; (c)
reengineer work functions and/or change locations where work functions are
performed; (d) perform its obligations through its subsidiaries or affiliates,
or through the use of Synetic-selected independent subcontractors; provided,
however, that Synetic shall not be relieved of its obligations under this
Agreement by use of such subsidiaries, affiliates or subcontractors, and
provided further, that Synetic shall not perform any material aspect of the
Management Services through independent subcontractors without the prior
approval of the Board of Managers; and (e) modify and/or replace work processes
and/or technology relating to the Services (except that Synetic shall not modify
or amend the Master Lease, dated February 12, 1997, between THINC and Sun Data,
Inc. (and related Master Lease Schedule Number 203528), without the prior
consent of each of GNYHA Management Corporation and the Current Payer-Members).
2.8 Personnel. Synetic will dedicate the qualified and competent personnel
necessary to perform its responsibilities hereunder. In connection therewith,
Synetic will provide part-time resources of members of its healthcare
communications management team. Synetic shall have the right to: (a) control and
supervise the activities of Synetic personnel who provide Services; (b)
determine which persons shall perform the Services; and (c) with respect to any
individual, reassign, promote, demote or terminate such individual, subject to
the provisions of the Operating Agreement relating to the right of the Board of
Managers to reasonably approve officer appointments. Synetic reserves the right
to determine the personnel assigned to perform the Services and to replace,
rotate or reassign such personnel during the Term of this Agreement.
2.9 THINC Employees. As soon as practicable after the Effective Date, Synetic
agrees to offer employment to all the THINC Employees listed on Schedule D. The
terms of such employment will be mutually agreed upon between Synetic and the
THINC Employees. In connection with the transition of the THINC Employees from
THINC to Synetic, Synetic shall request from each THINC Employee a general
release of all claims and liabilities arising out of such THINC Employee's
employment with THINC. The parties anticipate that, effective at the expiration
of the Transition Period, the THINC
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Employees will cease to be employees of THINC and become employees of Synetic
subject to Section 2.8. Synetic will appoint one of its officers as the contact
person to communicate regularly with the Board of Managers regarding performance
of the THINC Employees and other employees of Synetic who perform Services for
THINC. Following termination of this Agreement, THINC shall not be prohibited
from offering employment to those employees of Synetic who devote all or
substantially all of their time to providing Management Services under this
Agreement.
2.10 Minimization of Service Disruptions. Whenever conditions reasonably permit,
the parties will mutually agree on the scope, timing, frequency and duration of
any planned service interruptions or delays and will jointly attempt to minimize
their impact on THINC's business operations.
2.11 Books and Records. Synetic will keep full, true and accurate books,
accounts and records of THINC, which will be available for review by any Member;
provided however, that no Member shall be permitted to review the Confidential
Member Information of any other Member. Synetic shall maintain separate accounts
with one or more financial institutions on behalf of THINC and shall keep THINC
monies and funds separate from and shall not commingle such monies or funds with
monies or funds of Synetic.
3. THINC'S RESPONSIBILITIES
3.1 THINC Relationship Manager. The Members of THINC other than Synetic will
appoint a relationship manager to manage the relationship established by this
Agreement (the "THINC Relationship Manager") who will (a) coordinate and monitor
THINC's obligations under this Agreement, and (b) serve as the primary liaison
with the Synetic Relationship Manager.
3.2 Access to Information. THINC will provide to Synetic, during and after the
Transition Period, full access to and use of THINC's facilities, assets, books
and records and complete information relating to THINC's business so that
Synetic can perform its obligations under this Agreement. Such information will
include, without limitation, the following:
(a) Financial and accounting information;
(b) Equipment and other asset information;
(c) Employee and consultant information;
(d) Customer information;
(e) Market, strategic and related information;
(f) License and other contract information (including royalties
payable by or to THINC);
(g) Systems information; and
(h) Intellectual property information.
Synetic may accept as correct, accurate and reliable, without any further
inquiry, all information, data, documents and other records delivered, supplied
or made available to Synetic hereunder (i) on or prior to the Effective Date or,
(ii) after the Effective Date, that were generated or prepared without the
involvement of Synetic. Synetic shall have no responsibility or liability for
any error, inadequacy or omission which results from inaccurate or incomplete
information, data, documents or other records provided to Synetic hereunder.
3.3 Conduct of Business. During the Transition Period, THINC will conduct its
business in the ordinary course, consistent with past practice, and consult with
Synetic on all management and
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operational matters.
3.4 Exclusivity of Management Services. THINC agrees that Synetic will be the
exclusive provider to THINC of the Management Services.
3.5 Exclusivity of Clinical Transaction Services. THINC agrees that, during the
Term, Synetic will have the exclusive right to implement, deploy, deliver,
support, provide, maintain and make available any or all of the Clinical
Transaction Services, or any aspect of such services, on, through or in
conjunction with the THINC Network. THINC agrees not to, directly or indirectly,
endorse, advertise, promote, develop, implement, deploy, deliver, support,
provide, maintain, enhance, host, link to, license or make available any service
or software that implements, supports or mediates any aspect of the Clinical
Transaction Services or any transaction similar to any aspect of the Clinical
Transaction Services, either synchronously or asynchronously.
3.6 Exclusivity of Content and Messaging Services. THINC agrees that, during the
Term, Synetic will have the exclusive right to implement, deploy, deliver,
support, provide, maintain and make available any or all of the Content and
Messaging Services on, through or in conjunction with the THINC Network. THINC
agrees not to, directly or indirectly, endorse, advertise, promote, develop,
implement, deploy, deliver, support, provide, maintain, enhance, host, link to,
license or make available any service or software that implements, supports or
mediates any aspect of the Content and Messaging Services or any services
similar to any aspect of the Content and Messaging Services, either
synchronously or asynchronously.
3.7 Connectivity for Content and Messaging Services. THINC agrees to provide the
high speed telecommunications connections and supporting equipment required by
Synetic to maintain connectivity between the Synetic System and the THINC
Network and enable Synetic to provide the Content and Messaging Services.
Synetic and THINC will share equally the costs of such connections and
supporting equipment.
4. TRANSITION
4.1 Transition Period. During the Transition Period, Synetic and THINC will work
together to provide for the transition of management of THINC's operations from
THINC to Synetic.
4.2 THINC Supplied Assets. On the Effective Date, THINC shall permit Synetic to
use all of its owned or leased assets (the "THINC-Supplied Assets") to perform
the Services hereunder. THINC will retain financial responsibility for the
depreciation, funding, taxes and insurance expenses and other expenses
incidental to ownership of each of the THINC Supplied Assets.
4.3 THINC Facilities. As of the Effective Date, THINC shall provide to Synetic
the use and/or occupancy of THINC's owned and leased facilities (the "THINC
Facilities") which space is currently designated to be occupied by Synetic in
performing the Services. Synetic may attach equipment to and occupy any existing
THINC structures, office space or equipment space on THINC-controlled property
for any reasonable use consistent with this Agreement, and solely for the
purpose of providing the Services.
4.4 THINC Proprietary Materials. Subject to the terms of this Agreement, THINC
hereby grants to Synetic the right to access and use, during the Term and solely
for the purpose of enabling Synetic to perform its obligations under this
Agreement, including providing the Services, the THINC Network and
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any other THINC-owned or licensed systems and technology, software, proprietary
elements, documentation, records and other THINC-owned or licensed trade secrets
or know-how, including but not limited to all copyrights, trademarks, patents,
trade secrets and other intellectual property rights inherent therein or
appurtenant thereto (collectively the "THINC Proprietary Materials").
4.5 Third Party Consents. THINC shall be responsible, at its expense, to obtain,
and Synetic will cooperate with THINC in obtaining, any necessary consents,
licenses, sublicenses or approvals from third parties as are necessary to allow
Synetic to use and/or occupy the THINC Supplied Assets, THINC Facilities and the
THINC Proprietary Materials to enable Synetic to provide the Services hereunder,
which third party consents, licenses, sublicenses and approvals are listed on
Schedule C. In the event that THINC is not able to obtain any such consent,
license, sublicense or approval, THINC shall use and/or occupy the THINC
Supplied Assets, THINC Facilities or THINC Proprietary Materials covered
thereby, as directed by Synetic, to enable Synetic to provide the Services
hereunder.
5. FEES AND PAYMENT
5.1 Payment. Synetic shall invoice fees and costs set forth in Sections 5.2 and
5.3 for each month Services are provided hereunder. Invoices are payable within
thirty (30) days of the date invoices are delivered. All periodic charges under
this Agreement are to be computed on a calendar month basis, and shall be
prorated for any partial month.
5.2 Reimbursement of Costs for Management Services. THINC will reimburse Synetic
the actual costs of the Management Services it performs hereunder.
Notwithstanding the foregoing, Synetic shall not be reimbursed for any costs
incurred in any fiscal year costs in excess of the amount of aggregate budgeted
cost of sales, operating expenses and capital expenditures for such fiscal year
set forth in the Operating Plan, unless the incurrence of such excess costs was
approved by the Members, as provided in the Operating Agreement. The methodology
for calculation of charges payable by THINC for certain actual costs incurred by
Synetic in connection with the provision of Management Services is set forth in
Schedule E hereto. Synetic will provide to the Board of Managers of THINC
reasonable supporting documentation for these costs and, subject to Section 5.6,
an opportunity to review and audit such costs.
5.3 Fees for Content and Messaging Services. THINC will pay to Synetic set-up
fees in the amount of $30,000 per Payer to provide access to the Content and
Messaging Services and monthly maintenance fees of $1,000 per Payer thereafter.
Such set-up fees are associated with organizing, converting, publishing and
housing Payer's rules, reference materials and other content, and development of
necessary interfaces required to support Payer-specific messages, alerts and
advisories. The monthly maintenance fees are associated with ongoing maintenance
and refreshing of such files. In addition, THINC will bear the actual costs of
Synetic of any third-party licensed content provided to THINC as part of the
Content and Messaging Services in accordance with the Operating Plan. Except as
provided in this Section 5.3, Synetic and THINC shall bear their respective
costs relating to the provision of the Content and Messaging Services.
5.4 Reimbursement of Costs for Clinical Transaction Services. Synetic will
reimburse THINC for THINC's telecommunication and interface development costs
incurred in providing Synetic with network access for the Clinical Transaction
Services. Synetic will provide to the Board of Managers reasonable supporting
documentation for these costs and an opportunity to review and audit such costs
in accordance with the audit provisions contained in Section 5.6.
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5.5 Taxes. THINC shall bear all taxes, duties, levies, and other similar charges
(and any related interest and penalties), however designated, imposed as a
result of the existence or operation of this Agreement, except any income or
franchise taxes on profits which may be levied against Synetic.
5.6 Audits. The Board of Managers shall have the right to retain an independent
auditor to whom Synetic shall allow reasonable access to Synetic's applicable
books of account and other records reasonably relating to, and for the purpose
of, verifying the costs referred to in this Section 5.2. The information
disclosed by Synetic to such auditor in the course of performing such audit will
be kept confidential by the auditor. THINC may request such audits no more than
once in any six-month period. THINC shall bear the costs of any such audit;
provided, however, that in the event that such auditor determines that the costs
of Synetic reimbursed by THINC under Section 5.2 were in excess of one-hundred
and ten percent (110%) of the actual amounts payable under such Section 5.2
during the audit period, Synetic shall bear the reasonable out-of-pocket costs
incurred by THINC for the performance of such audit, including the costs of such
independent auditor. In the event that such auditor determines that the costs of
Synetic reimbursed by THINC under Section 5.2 exceeded the actual amounts
payable under such Section 5.2, Synetic shall reimburse THINC for such
overpayment. In the event that such auditor determines that the costs of Synetic
reimbursed by THINC under Section 5.2 were less than the actual amounts
otherwise payable under such Section 5.2, THINC shall pay to Synetic such
unreimbursed costs.
6. CONFIDENTIALITY
6.1 Confidentiality. Except as otherwise provided herein, THINC and Synetic each
acknowledge and agree that, in the case of Synetic, all information
communicated, orally or in writing, to THINC by Synetic in connection with or
containing any Synetic Proprietary Materials, and, in the case of THINC, all
information communicated, orally or in writing, to Synetic by THINC in
connection with or containing any THINC Proprietary Materials (in either case,
"Confidential Information"), shall be used only for purposes of, and in
accordance with, this Agreement, and that no such Confidential Information shall
be disclosed by either of the parties hereto, its agents or employees, without
the prior written consent of the other party, except as may be necessary by
reason of legal, accounting or regulatory requirements, including requirements
of independent auditors, insurance regulators and federal and state securities
commissions applicable to such party and its business. Except to the extent
otherwise required by applicable law or professional standards, the parties'
obligations under this Section 6.1 do not apply to information that: (a) is or
becomes generally available to the public through no fault of, or omission or
action by, the receiving party, (b) can be shown by documentation to have been
known to, or possessed by, the receiving party prior to disclosure by the
disclosing party, (c) THINC and Synetic agree from time to time to disclose, or
(d) is independently developed by the receiving party without resort to the
disclosing party's Confidential Information; provided, that the foregoing
exceptions to treatment of information as Confidential Information shall in no
event affect whether such information is or contains Proprietary Material of the
disclosing party. Each party shall be deemed to have met its nondisclosure
obligations under this Section 6.1 as long as it exercises the same level of
care to protect the other's information as it exercises to protect its own
confidential information, which in no event shall be less than a level of
reasonable care, except to the extent that applicable law or professional
standards impose a higher requirement. If either party receives a subpoena or
other validly issued administrative or judicial demand requiring it to disclose
the other party's Confidential Information, such party shall (i) assert the
privileged and confidential nature of the Confidential Information against the
third party seeking disclosure, (ii) cooperate fully with the disclosing party
in protecting against any such disclosure and/or obtaining a protective order
narrowing the scope of such disclosure and/or use of the Confidential
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Information and (iii) provide prompt written notice to the other party of such
demand. So long as the other party shall have received at least five (5)
business days written notice, and so long as the notifying party shall have
complied with the other requirements of the preceding sentence, the notifying
party shall thereafter be entitled to comply with such demand to the extent
required by law, subject to any protective order or the like that may have been
entered in the matter.
7. PROPRIETARY RIGHTS
7.1 THINC Proprietary Materials. The THINC Proprietary Materials will remain the
property of THINC or its licensors and Synetic will have no rights therein,
except as provided hereunder or as may be required for Synetic to perform its
obligations hereunder or as may be provided in other written agreement(s)
entered into by the parties. Any modifications or enhancements made by Synetic
to the THINC Proprietary Materials (as they exist as of the Effective Date)
during the Term, provided the costs for which were, or could have been, billed
to THINC under Section 5.2, will be the property of THINC. THINC Proprietary
Materials do not include any Synetic Proprietary Materials.
7.2 Synetic Proprietary Materials. The Synetic Proprietary Materials are and
will remain the property of Synetic or its licensors and THINC will have no
rights or interest therein, except as may be provided herein or in other written
agreement(s) entered into by the parties. Without limitation of the foregoing,
the parties recognize that circumstances may arise in which Synetic may develop,
specifically on behalf of or in conjunction with THINC, certain new systems,
software and communications capabilities, the ownership of which shall be agreed
upon by the parties in advance and in writing.
7.3 Return of Proprietary Materials. Upon the termination or expiration of this
Agreement for any reason, THINC shall, at Synetic's election, return such
Synetic Proprietary Materials in THINC's possession to Synetic, or certify to
Synetic that such Synetic Proprietary Materials have been destroyed. The THINC
Proprietary Materials are and will remain THINC's property and, upon the
termination or expiration of this Agreement for any reason, Synetic will, at
THINC's election, return such THINC Proprietary Materials in Synetic's
possession to THINC, or certify to THINC that such THINC Proprietary Materials
have been destroyed.
7.4 No License. Except as expressly set forth herein, no license is granted by
either party to the other with respect to any technical or business information,
including but not limited to the Synetic Proprietary Materials and THINC
Proprietary Materials, or with respect to rights in any patents, trademarks,
copyrights, mask work protection rights and other intellectual property rights.
8. TERM AND TERMINATION
8.1 Term. The term of this Agreement shall commence on the Effective Date and
continue until June 1, 2004, unless earlier terminated hereunder or extended
pursuant to Section 8.2 (the "Term").
8.2 Extension. Synetic shall notify THINC not less than nine (9) months prior to
the expiration of the Term, whether Synetic desires to renew this Agreement and
of the proposed terms to govern such renewal. Not less than six (6) months prior
to such expiration, THINC shall notify Synetic whether it desires to renew this
Agreement on the terms proposed by Synetic or on other terms as may be proposed
by THINC.
8.3 Termination for Breach. If either party materially breaches any of its
duties or obligations
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hereunder, and such breach is not cured within ninety (90) days after written
notice of the breach ("Cure Period"), then the nonbreaching party may terminate
this Agreement, provided that such non-breaching party provided written notice
of the breach within ninety (90) days following the date that it first became
aware of such breach. This termination right must be exercised during the thirty
(30)-day period beginning at the end of the Cure Period.
8.4 Termination for Fraud. In the event of fraud by a party, the other party may
terminate this Agreement. This termination right must be exercised during the
thirty (30)-day period beginning on the date such fraud is brought to the
attention of the other party.
8.5 Termination by Synetic. Synetic will have the right to terminate this
Agreement, upon ninety (90) days notice, in the event that two (2) Current
Payer-Members materially breach their obligations under a Clinical Transaction
Contract or a Managed Care Transaction Contract, and such breaches are not cured
within such notice period.
8.6 Termination by THINC Due to Missed Performance. Notwithstanding any other
provision of the Agreement, THINC will have the right to terminate this
Agreement in the event that Synetic fails to cause THINC to meet the Performance
Standards for either Physicians or Payers (as each such Performance Standard is
set forth in Schedule H) and such failure is not cured within ninety (90) days
after the measurement date set forth in Schedule H when such failure occurred
("Performance Cure Period"). This termination right must be exercised during the
thirty (30)-day period beginning at the end of the Performance Cure Period.
8.7 Termination by THINC Due to Acquisition. THINC will have the right to
terminate this Agreement if stock or assets of Synetic, Inc., Synetic Healthcare
Communications, Inc. or any of their respective affiliates is acquired by a
Health Plan Competitor such that such Health Plan Competitor, directly or
indirectly, owns more than fifty (50%) of the stock or assets of Synetic
Healthcare Communications, Inc. ("Change of Control"). This termination right
must be exercised by THINC during the ninety (90) day period following the date
that THINC first became aware of the occurrence of the Change of Control.
8.8 Termination for Insolvency. If either THINC or Synetic becomes or is
declared insolvent or bankrupt, then this Agreement shall be immediately
terminated, without the requirement of any notice to the insolvent or bankrupt
party. A party shall be deemed insolvent or bankrupt for purposes of this
Section if:
(a) a receiver, liquidator or trustee of a party is appointed by court
order and such order remains in effect for more than sixty (60) days, or a case
is commenced or a petition is filed against a party, and is not dismissed or
stayed within sixty (60) days, under any applicable liquidation,
conservatorship, bankruptcy, moratorium, insolvency, reorganization or similar
laws for the relief of debtors from time to time in effect and generally
affecting the rights of creditors (a "Debtor Relief Law"); or
(b) a party commences a voluntary case or voluntarily seeks, consents to,
or acquiesces in the benefit or benefits of any provision of any Debtor Relief
Law; consents to the filing of any petition against it under such Debtor Relief
Law; makes an assignment for the benefit of its creditors; admits in writing its
inability to pay its debts generally as they become due; or consents to the
appointment of a receiver, trustee, liquidator or conservator for it or any part
of its property.
8.9 Rights Upon Termination. As soon as practicable following the termination of
this Agreement
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for any reason, (a) THINC and Synetic shall pay all amounts due and payable
hereunder to the other party as soon as practicable; and (b) Synetic will
provide THINC with all files and records related to the performance by Synetic
of the Management Services. Synetic shall cooperate with THINC and its Members,
and take all reasonable steps necessary, to effect the transition of the
management of THINC from Synetic to THINC or a third-party designee of THINC.
THINC shall pay to Synetic its reasonable costs for such transition, unless such
transition is following a termination of this Agreement by THINC due to a
material breach of the Agreement by Synetic, as set forth in Section 8.3, or due
to fraud by Synetic, as set forth in Section 8.4, or due to an acquisition of
Synetic by a Health Plan Competitor, as set forth in Section 8.7.
8.10 No Effect. Synetic's equity ownership in THINC will not be affected
by a termination of this Agreement.
9. WARRANTIES
9.1 THINC Warranties. THINC represents and warrants that:
9.1.1 it is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of New York;
9.1.2 it has all requisite power and authority to execute this Agreement
and to perform its obligations hereunder and it shall perform its
obligations in a professional manner;
9.1.3 the execution, delivery and performance of this Agreement has been
duly authorized by THINC and will not violate the terms of any agreement to
which THINC is a party or is otherwise bound and this Agreement is a valid
and binding agreement enforceable against THINC in accordance with its
terms;
9.1.4 it has obtained, or will promptly obtain upon execution of this
Agreement, all third-party consents or licenses, or regulatory and
governmental approvals in all jurisdictions where the Services are to be
performed, to permit Synetic to perform the Services hereunder;
9.1.5 the documents, data and other information provided to Synetic and
relied on by Synetic to perform the Services are true, complete and
accurate in all material respects at the time provided;
9.1.6 THINC's performance of its obligations hereunder shall comply with
all applicable laws, rules and regulations;
9.1.7 the THINC Facilities and other THINC facilities used in connection
with performing the Services are in compliance with all applicable federal,
state and local laws governing environmental requirements; it owns or has
valid and binding leases or subleases on all THINC Facilities that are
leased or subleased by THINC; such leases and subleases are in full force
and effect and enforceable in accordance with their respective terms; and
there are no material defaults by THINC, and THINC knows of no material
default by any other party, under such leases and subleases;
9.1.8 the THINC Supplied Assets and THINC Proprietary Materials constitute
all of the rights, properties and assets necessary to permit Synetic to
provide the Services of a type and quality
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comparable to such services as rendered by THINC prior to the Effective
Date and as required hereby;
9.1.9 the THINC Proprietary Materials and THINC Supplied Assets do not and
shall not, and THINC shall perform its responsibilities under this
Agreement in a manner that does not, infringe, or constitute an
infringement or misappropriation of, any patent, invention, trade secret,
copyright, trademark, proprietary information, nondisclosure or other
proprietary right of any third party (collectively, "Third-Party Business
Property Rights"); no claims have been asserted or threatened by any third
party with respect to THINC's ownership or use of any of the THINC
Proprietary Materials, THINC Facilities and THINC Supplied Assets and there
is no valid basis for any such claim against such use or ownership by
THINC; and from and after the Effective Date, the use by Synetic in a
manner comparable to the use or ownership by THINC prior to the Effective
Date, of the THINC Proprietary Materials and THINC Supplied Assets does not
infringe, or constitute an infringement or misappropriation of, any
Third-Party Business Property Rights;
9.1.10 there are no pending or threatened claims, actions, suits,
proceedings or investigations before any court or any federal, state,
municipal or other government department, commission, board, agency,
instrumentality or authority, by or against, or otherwise materially
affecting THINC or the transaction contemplated by this Agreement;
9.1.11 true and complete copies of (a) the balance sheet of THINC as of
December 31, 1997, and the related statements of income and cash flows for
the year ended December 31, 1997, together with the report of independent
public accountants thereto (the "1997 Financial Statements"), and (b) the
unaudited consolidated balance sheet of THINC as of November 30, 1998, and
the related statements of income and cash flows for the eleven months ended
November 30, 1998 (the "Interim Financial Statements"), were provided to
Synetic prior to the Effective Date. The 1997 Financial Statements and the
Interim Financial Statements: (i) were prepared in accordance with the
books of account and other financial records of THINC, (ii) present fairly
the consolidated financial condition and results of operations of THINC as
of the dates thereof or for the periods covered thereby, (iii) have been
prepared in accordance with U.S. generally accepted accounting principles
applied on a basis consistent with the past practices of THINC, and (iv)
include all adjustments (consisting only of normal recurring accruals) that
are necessary for a fair presentation of the financial condition of THINC
and the results of the operations of THINC as of the dates thereof or for
the periods covered thereby; provided, however, that the Interim Financial
Statements do not include footnotes required by U.S. generally accepted
accounting principles and were or are subject to normal and recurring
year-end adjustments which were not and are not anticipated to be material
in amount.
9.1.12 the books of account and other financial records of THINC: (a)
reflect all items of income and expense and all assets and liabilities
required to be reflected therein in accordance with U.S. generally accepted
accounting principles applied on a basis consistent with the past practices
of THINC, (b) are in all material respects complete and correct, and do not
contain or reflect any material inaccuracies or discrepancies and (c) have
been maintained in accordance with good business and accounting practices;
9.1.13 there are no debts, liabilities or obligations, whether accrued or
fixed, absolute or contingent, matured or unmatured, or determined or
determinable ("Liabilities") of THINC, other than Liabilities (a) reflected
or reserved against on the Interim Financial Statements, and
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(b) in an aggregate amount not exceed $100,000 incurred since November 30,
1998 in the ordinary course of business, consistent with the past practice
of THINC. Reserves are reflected on the Interim Financial Statements and on
the books of account and other financial records of THINC against all
Liabilities of THINC in amounts that have been established on a basis
consistent with the past practices of THINC and in accordance with U.S.
generally accepted accounting principles;
9.2 Synetic Warranties. Synetic represents and warrants that:
9.2.1 it is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware;
9.2.2 it has all requisite power and authority to execute this Agreement
and to perform its obligations hereunder;
9.2.3 the execution, delivery and performance of this Agreement has been
duly authorized by Synetic and will not violate the terms of any agreement
to which Synetic is a party or is otherwise bound and this Agreement is a
valid and binding agreement enforceable against Synetic in accordance with
its terms;
9.2.4 Synetic's performance of its obligations hereunder shall comply with
all applicable laws, rules and regulations;
9.2.5 such of Synetic's network, system and facilities as are used in
connection with performing the Services (collectively, the "Synetic
System") is in compliance with all applicable federal, state and local laws
governing environmental requirements;
9.2.6 the Synetic Proprietary Materials do not and shall not, and Synetic
shall perform its responsibilities under this Agreement in a manner that
does not, infringe, or constitute an infringement or misappropriation of,
any Third-Party Business Property Rights; no claims have been asserted or
threatened by any third party with respect to Synetic's ownership or use of
any of the Synetic Proprietary Materials, and there is no valid basis for
any such claim against such use or ownership by Synetic;
9.2.7 the Synetic System is or shall be Millennium Compliant. For purposes
of clarification, in no way shall the foregoing be deemed to include or
apply to the THINC Network or the THINC Proprietary Materials. For purposes
of this Agreement, as to any hardware, software or system, "Millennium
Compliant" shall mean the ability of that hardware, software or system to
provide the following functions: (a) consistently process date information
before, during and after January 1, 2000 including but not limited to
accepting date input, providing date output, performing calculations on
dates or portions of dates, and calculating leap years; and (b) function
accurately in accordance with its respective specifications and
documentation and without interruption before, during and after January 1,
2000 without any adverse change in operation, function or performance
associated with the advent of the new century; and (c) respond to two-digit
year date input in a way that resolves any ambiguity as to century in a
disclosed, defined and predetermined manner; and (d) store and provide
output of date information in ways that are unambiguous as to century; and
(e) maintain interoperability with other hardware and software products
with which it must interact and exchange records, provided that such other
hardware and software products are themselves Millennium Complaint as set
forth in (a) - (d) above; and
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9.2.8 there are no pending or threatened claims, actions, suits,
proceedings or investigations before any court or any federal, state,
municipal or other government department, commission, board, agency,
instrumentality or authority, by or against, or otherwise materially
affecting Synetic or the transaction contemplated by this Agreement.
9.3 Disclaimer. EXCEPT AS PROVIDED IN THIS AGREEMENT, SYNETIC MAKES AND THINC
RECEIVES NO WARRANTIES HEREUNDER AND EXPRESSLY DISCLAIMS ANY AND ALL OTHER
WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR ALLEGEDLY EXTENDED IN ANY
COMMUNICATION WITH THINC, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF
MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR A PARTICULAR PURPOSE OR
WARRANTY THAT THE PROVISION OF THE SERVICES WILL BE UNINTERRUPTED OR ERROR-FREE.
10. LIMITATIONS AS TO AMOUNT AND TYPE OF LIABILITY
10.1 Limitation of Liability. Neither THINC nor Synetic will be liable for any
indirect, incidental, consequential, special or punitive damages arising under
this Agreement, including but not limited to loss of data, interest, anticipated
savings, revenues or profits, or interruption of business, even if such party
has been advised of the possibility of such losses or damages. The limitations
of liability in this Section shall apply regardless of the form of action,
whether in contract, tort (including negligence of any kind, whether active or
passive), warranty, strict liability or any other legal or equitable grounds.
Without limitation of the foregoing, but subject to Sections 11.2(ii)(b) and
11.2(ii)(c), Synetic's liability under this Agreement, if any, arising out of
the performance or non-performance of its obligations shall be limited to actual
direct money damages incurred as a result of Synetic's gross negligence or bad
faith, plus any unreimbursed telecommunication and interface development costs
of THINC actually incurred in providing access for the Clinical Transaction
Services.
10.2 Limitation Period. Neither party to this Agreement may assert against the
other party any claim for breach or nonperformance in connection with this
Agreement unless the asserting party has given the other party written notice of
the event giving rise to liability within three (3) years after the termination
of this Agreement, except this Section 10.2 shall not apply to any claim for
indemnification under Article 11 of this Agreement.
10.3 Definitions of Synetic and THINC. For the purposes of the limitations of
liability set forth in this Section 10, references to Synetic shall be deemed to
include its subsidiaries and their affiliates, and the directors, officers,
employees, agents, representatives, subcontractors and suppliers of any of them,
and references to THINC shall be deemed to include its subsidiaries and their
affiliates, and the directors, officers, employees, agents, representatives,
subcontractors and suppliers of any of them.
11. INDEMNITIES
11.1 Indemnification by THINC. THINC shall indemnify, defend and hold harmless
each of Synetic and its affiliates, and their respective officers, directors and
agents, and their respective successors and assigns, in accordance with the
procedures set forth in Section 11.3, from and against any and all Losses (as
defined in Section 11.4) arising out of or in connection with:
11.1.1 Any actions taken by THINC prior to the expiration of the Transition
Period, except to the extent such Losses were caused by Synetic's gross
negligence or bad faith;
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11.1.2 Synetic's provision of Management Services under this Agreement,
except to the extent such Losses were caused by Synetic's gross negligence
or bad faith, provided however that, subject to Section 8, this indemnity
shall not relieve Synetic of its obligations under this Agreement;
11.1.3 Any claims by third-party contracting entities to any of the
third-party agreements as a result of any third-party consents pursuant to
Section 4.5, relating to or arising out of THINC's failure to observe or
perform any duties or obligations required to be observed or performed
before or after the expiration of the Transition Period by THINC under or
with respect to any such agreements;
11.1.4 Any claims of infringement or misappropriation of any patent,
invention, trade secret, copyright, trademark, proprietary information
nondisclosure or other proprietary rights resulting from the use of any
THINC Supplied Assets or THINC Proprietary Materials by Synetic in the
performance of the Services;
11.1.5 The damage to or loss or destruction of any real or tangible
personal property in the possession or under the control of THINC or its
affiliates, except to the extent proximately caused by Synetic's gross
negligence or bad faith;
11.1.6 An act or omission by THINC or its employees (including without
limitation the THINC Employees) arising out of or relating to (a) federal,
state, or other laws or regulations for the protection of persons who are
members of a protected class or category of persons, (b) sexual
discrimination or harassment, (c) THINC employee benefits, (d) any
representations, oral or written, made by THINC to THINC's employees, and
(e) any other aspect of the employment relationship or the termination of
the employment relationship relating to the employees of THINC arising
prior to the date such employee becomes an employee of Synetic as
contemplated herein, if applicable, including but not limited to claims for
breach of an expressed or implied contract of employment and claims
relating to salaries, THINC employee benefit plans, severance, termination
liabilities, claims arising under the occupational health and safety or
other applicable federal, state or local laws or regulations, including
plant closing or mass layoff laws, the Employee Retirement Income Security
Act of 1974 or the related provisions of the Internal Revenue Code of 1986;
and
11.1.7 The death or bodily injury of any agent, employee, subcontractor,
customer, business invitee or business visitor of THINC or its affiliates,
except to the extent proximately caused by Synetic's gross negligence or
bad faith;
11.1.8 Any claim or action arising out of or relating to this Agreement
brought by or on behalf of a customer or agent of THINC or its affiliates,
except to the extent proximately caused by Synetic's gross negligence or
bad faith;
11.1.9 Any third-party claim or action arising out of or relating to a
breach by THINC of its representations and warranties set forth in Sections
9.1.3 through 9.1.13; and
11.1.10 Any third-party claim or action arising out of or relating to the
Content and Messaging Services, to the extent (a) caused by any negligent
action of a Payer or an end-user of such Content and Messaging Services,
(b) caused by any action of a Payer or an end-user of such Content and
Messaging Services other than in conformity with the Content and Messaging
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Services, or (c) arising out of or relating to any Payer's content,
messages, rules, guidelines or other information.
11.2 Indemnification by Synetic. Synetic shall indemnify, defend and hold
harmless THINC, in accordance with the procedures set forth in Section 11.3,
from and against any and all Losses: (i) caused by Synetic's gross negligence or
bad faith, or (ii) arising out of or in connection with any third-party claim or
action arising out of or relating to: (a) a breach by Synetic of its
representations and warranties set forth in Sections 9.2.3 through 9.2.6, and
Section 9.2.8; (b) the provision to a Payer by THINC of Content and Messaging
Services pursuant to a Managed Care Transaction Contract, except for Losses (w)
caused by any negligent action of a Payer or an end-user of such Content and
Messaging Services, (x) caused by any action of a Payer or an end-user of such
Content and Messaging Services other than in conformity with the Content and
Messaging Services, (y) arising out of or relating to any Payer's content,
messages, rules, guidelines or other information, or (z) arising out of or
resulting from the THINC Network to the extent the cause of such Losses was not
within Synetic's reasonable control as Contract Manager; (c) a breach by Synetic
of its representations and warranties set forth in Sections 9.2.7; and (d) use
by Synetic of any THINC Proprietary Materials other than for the purposes set
forth in Section 4.4.
11.3 Indemnification Procedures.
11.3.1 A party seeking indemnification under this Agreement (an
"Indemnified Party") for a claim by a third party shall promptly notify the
other party (the "Indemnifying Party") in writing of the commencement, or
threatened commencement, of any civil, criminal, administrative or
investigative action or proceeding involving a claim for indemnification
under this Agreement. The Indemnifying Party shall have sole control over
the defense and settlement of such claim, provided that, within thirty (30)
days after receipt of the above-described notice, the Indemnifying Party
notifies the Indemnified Party of its election to so assume full control.
The foregoing notwithstanding, the Indemnified Party shall be entitled to
participate in the defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim. The Indemnifying Party
shall obtain the prior written approval of the Indemnified Party, which
shall not be unreasonably withheld, before entering into any settlement of
such claim or ceasing to defend against such claim if such settlement or
cessation would cause injunctive or other equitable relief to be imposed
against the Indemnified Party. A condition to any settlement by the
Indemnifying Party of a claim shall be that the Indemnified Party is fully
released from any liability related to the claim. After notice by the
Indemnifying Party to the Indemnified Party of its election to assume full
control of the defense of any such action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal expenses incurred by the
Indemnified Party in connection with the defense of that claim. If the
Indemnifying Party does not assume sole control over the defense of such
claim, the Indemnifying Party may participate in such defense and the
Indemnified Party shall have the right to defend the claim in such manner
as it may deem appropriate, at the cost and expense of the Indemnifying
Party. An Indemnifying Party shall not be required to indemnify an
Indemnified Party for any amount paid or payable by such Indemnified Party
in the settlement of any such claim which was agreed to without the written
consent of the Indemnifying Party, which shall not be unreasonably
withheld.
11.3.2 If a claim for indemnification hereunder involves a third party
claim, the Indemnifying Party may, at its sole cost, expense and ultimate
liability regardless of the outcome, and through counsel of its choice,
litigate, defend, settle or otherwise attempt to resolve such claim, except
that the Indemnified Party may elect, at any time and at its sole cost,
expense and ultimate
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liability, regardless of the outcome, and through counsel of its choice, to
so resolve such claim, thereby waiving any right to indemnification under
this Agreement. In any event, each party shall fully cooperate with the
other and their respective counsel in connection with any such resolution,
and notwithstanding which party is defending any such third party claim,
the other party shall have the right to select co-counsel at its sole cost
and expense and to consult with counsel for the Indemnifying Party.
11.4 Losses. "Losses" shall mean all losses, liabilities, damages and claims and
all related costs and expenses, including reasonable legal fees and
disbursements.
12. DISPUTE RESOLUTION AND ARBITRATION
12.1 Dispute Resolution. Synetic and THINC will agree to use their best efforts
to resolve disputes informally and amicably. If, after negotiating for thirty
(30) days or for some longer period if the parties agree, no resolution of a
dispute is reached, Synetic and THINC will submit the dispute to binding
arbitration in New York, New York pursuant to the Commercial Arbitration Rules
of the American Arbitration Association ("AAA") and the procedures set forth in
Section 12.2.
12.2 Arbitration. All disputes that cannot be resolved pursuant to the internal
issue resolution process identified above, will be submitted to and settled by
final and binding arbitration. Any dispute which cannot be resolved as set forth
above, will be resolved by final and binding arbitration in New York, New York
by a panel of three (3) arbitrators in accordance with and subject to the
Commercial Arbitration Rules of the AAA then in effect. Following notice of a
party's election to require arbitration, each party will within thirty (30) days
select one arbitrator, and those two arbitrators will within thirty (30) days
thereafter select a third arbitrator. If the two arbitrators are unable to agree
on a third arbitrator within thirty (30) days, the AAA will within thirty (30)
days thereafter select such third arbitrator. Judgment upon the award rendered
in any such arbitration may be entered in any court of competent jurisdiction,
or application may be made to such court for a judicial acceptance of the award
and an enforcement, as the law of such jurisdiction may require or allow.
Notwithstanding the foregoing, either party may seek injunctive relief in a
court of competent jurisdiction, where appropriate, to protect its rights
pending the outcome of such arbitration.
12.3 Forbearance. The parties acknowledge that THINC shall not institute a
lawsuit, file any claim or cause of action at law or in equity, or bring legal
challenge or action in any forum against any GNYHA Member without giving GNYHA
sixty (60) days prior written notice, during which notice period GNYHA shall
have the right but not obligation to attempt to resolve any dispute between the
GNYHA Member and THINC, provided, however, that THINC shall not be subject to
such forbearance requirement if such delay would prejudice the rights of THINC.
13. GENERAL
13.1 Assignment. Neither Synetic nor THINC may assign this Agreement or any of
its rights or obligations hereunder without the consent of the other party
(which consent shall not be unreasonably withheld), provided that Synetic may
assign this Agreement and any of its rights and obligations, upon written notice
to THINC's Members, to a subsidiary of which Synetic owns, directly or
indirectly, a majority of the voting equity securities.
13.2 Force Majeure. Each of Synetic and THINC will be excused from performance
of its obligations
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under this Agreement for any period and to the extent that performance is
prevented as a result of delays caused by fire, flood, changes in laws or
regulations, and other events beyond its reasonable control.
13.3 Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof. There are no
representations, warranties, understandings or agreements relating to the
subject matter hereof which are not fully expressed in this Agreement. No
amendment, modification, waiver or discharge of this Agreement shall be valid
unless in writing and signed by the party against whom such amendment,
modification, waiver or discharge is sought to be enforced.
13.4 Amendments. All changes in this Agreement or its Schedules require the
mutual written agreement of the parties.
13.5 No Waiver. No waiver of any breach of any provision of this Agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of the same or
any other provisions hereof.
13.6 Severability. If any provision of this Agreement should be held invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby, and
such provision shall be deemed restated to reflect the original intention of the
parties as nearly as possible in accordance with applicable law.
13.7 Governing Law. This Agreement shall be governed by and construed in all
respects in accordance with the laws of the State of New York without regard to
its conflicts of law rules.
13.8 Binding Nature. This Agreement is binding on the parties hereto and
their respective successors and assigns.
13.9 Notices. Whenever one party is required or permitted to give notice to the
other, such notice shall be deemed given: when delivered by hand; one (1) day
after being given to an express courier with a reliable system for tracking
delivery; when telecopied or faxed and receipt confirmed; or three (3) days
after the day of mailing, when mailed through United States mail, registered or
certified mail, return receipt requested, postage prepaid, and addressed as
follows:
In the case of Synetic:
Synetic Healthcare Communications, Inc.
c/o Synetic, Inc.
River Drive Center 2
669 River Drive
Elmwood Park, New Jersey 07407-1361
Attention: General Counsel
With a copy to: Synetic Relationship Manager
In the case of THINC:
The Health Information Network Connection LLC
1155 Avenue of the Americas
New York, New York 10036
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Attention: Chairman
With a copy to: THINC Relationship Manager
Either party may from time to time change its address for notification
purposes by giving the other thirty (30) days prior written notice of the new
address and the date upon which it shall become effective.
13.10 Publicity. Each of Synetic and THINC and their respective affiliates
(existing today and in the future) shall hold the contents of this Agreement in
strict confidence and not make any public statements with respect thereto,
except as may be required under applicable laws and regulations (including,
without limitation, federal securities laws) or with the consent of Synetic, in
the case of disclosure by THINC, or with the consent of THINC, in the case of
disclosure by Synetic, in each case which consent will not be unreasonably
withheld. Notwithstanding the foregoing, Synetic and THINC will issue a press
release announcing the execution of this Agreement. In addition, each of Synetic
and THINC shall be permitted to respond generally to inquiries regarding its
business, provided that it shall not disclose specific terms of this Agreement
(except as may be required under applicable laws and regulations).
13.11 Insurance. Each of THINC and Synetic will maintain general liability
insurance and such other insurance, as set forth on Schedule F.
13.12 Nonassumption of Liabilities. Unless specifically provided by this
Agreement, THINC does not assume or become liable for any of the existing or
future obligations, liabilities or debts of Synetic, and Synetic does not assume
or become liable for any of the existing or future obligations, liabilities or
debts of THINC.
13.13 No Third Party Beneficiaries. Except as expressly specified in this
Agreement, the parties do not intend, nor shall any clause be interpreted to
create in any third party, any obligations to, or right or benefit by, such
third party under this Agreement from either Synetic or THINC.
13.14 Relationship of Parties. Synetic is acting as an independent contractor in
providing the Services under this Agreement, with the sole right to supervise,
manage, control, direct, procure, perform, or cause to be performed, all
necessary work, duties or obligations under this Agreement. Except as otherwise
expressly provided herein, Synetic does not undertake by this Agreement or
otherwise to perform any obligations of THINC whether regulatory or contractual.
13.15 Approvals and Similar Actions. Where agreement, approval, acceptance,
consent or similar action by either party hereto is required by any provision of
this Agreement, such action shall not be unreasonably delayed or withheld. Each
party will cooperate with the other by, among other things, making available, as
reasonably requested by the other, management decisions, information, approvals
and acceptances in order that each party may properly accomplish its obligations
and responsibilities hereunder.
13.16 Survival. Notwithstanding any provisions of this Agreement to the
contrary, any provision of this Agreement that by its terms, nature or operation
of law should survive the termination or expiration of this Agreement will
survive.
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THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT AND AGREE
TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE PARTIES AGREE THAT THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES RELATING
TO THIS SUBJECT SHALL CONSIST OF (1) THIS AGREEMENT AND (2) ITS SCHEDULES, EACH
AS AMENDED FROM TIME TO TIME. THIS STATEMENT OF THE AGREEMENT SUPERSEDES ALL
PROPOSALS OR OTHER PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER NEGOTIATIONS
AND COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER DESCRIBED
IN THIS AGREEMENT.
THE HEALTH INFORMATION NETWORK SYNETIC HEALTHCARE
CONNECTION LLC COMMUNICATIONS, INC.
By: By:
---------------------------------- ------------------------------
Name: Name:
Title: Title:
Date: Date:
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