EXHIBIT 10.2
INTEGRATED MEDICAL SYSTEMS, INC.
NETWORK SPONSORSHIP AND PARTICIPATION AGREEMENT
THIS AGREEMENT ("AGREEMENT") dated November 17, 1993 is between McKesson
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Corp. ("MCKESSON"), a Delaware corporation, and Integrated Medical Systems, Inc.
("IMS"), a Colorado corporation.
WHEREAS, IMS develops and operates medical communication networks ("IMS
NETWORKS") in various areas throughout the United States to improve the
efficiency and effectiveness of medical communications between members of the
medical community;
WHEREAS, McKesson wishes to utilize IMS Networks to send and receive
information between IMS Network sites and McKesson's clients, and to link IMS
Networks to McKesson's transaction processing and data base management
infrastructure to send and receive information in support of a variety of
services;
THEREFORE, in consideration for the fees and mutual undertakings specified
herein and for other good and valuable consideration, McKesson and IMS hereby
agree as follows:
1. DEFINITIONS
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1.1. COMCENTER HARDWARE. ComCenter Hardware shall mean the message
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switching computer(s), owned by an IMS Network, on which the ComCenter Software
runs.
1.2. COMCENTER SOFTWARE. ComCenter Software shall mean that portion of
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the IMS-NET Software that resides on the ComCenter Hardware.
1.3. COMCENTER SYSTEM. ComCenter System shall mean the ComCenter
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Software and ComCenter Hardware together.
1.4. IMS-NET(TM) SOFTWARE. IMS-NET Software shall mean the proprietary
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Ims communications software that supports the Ims Networks.
1.5. IMS NETWORK. An IMS Network shall mean the ComCenter Hardware,
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ComCenter Software, IMS-Net Software, Synergy Series Software, Network
Interfaces Software, the facility and staff required to provide IMS
communication services in a specific market area, and the Sponsors, Subscribers
and other participants from and to whom IMS communication services are
transmitted in such market area.
1.6. JOINT VENTURE. Joint Venture shall mean any IMS related business
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unit for which an economic interest has been sold to another party.
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1.7. LICENSED SOFTWARE. Licensed Software shall mean, collectively, the
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ComCenter Software, the IMS-NET Software; the PC-COM Software, the Relay
Software and the Synergy Series Software, together with any and all subsequent
modifications, revisions, improvements, enhancements or updates made by IMS in
such software.
1.8. MCKESSON PRODUCT LINES. Each of the following shall be a McKesson
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Product Line (collectively, the "McKesson Product Lines"): (i) the Prescription
Benefit Management Services transmitted through the IMS Networks; (ii) financial
services products offered by McKesson or its direct or indirect subsidiaries;
and (iii) other groups of products mutually agreed upon by the parties.
1.9. NCW. NCW (Network Communications Workstation) shall mean an IBM
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personal computer or fully compatible computer on which the PC-COM Software
runs.
1.10. NETWORK INTERFACE. Network Interface shall mean those portions
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of the IMS-NET Software that automate or partially automate message transmission
and which are used to interface McKesson's existing computer system(s) to the
IMS Network, and which include the Relay Software.
1.11. NETWORK SERVICES. Network Services shall mean the services provided
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by IMS under Section 4.
1.12. PC-COM SOFTWARE. PC-COM Software shall mean that portion of the
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IMS-NET Software that resides on a Sponsor's or Subscriber's NCW.
1.13. PRESCRIPTION BENEFIT MANAGEMENT SERVICES. Prescription Benefit
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Management Services shall mean the following services provided by McKesson or
its direct or indirect subsidiaries: transaction and medical information
services related to prescription drugs. Prescription Benefit Management Services
include, but are not limited to, the following: formulary management; quality of
care alerts involving drug interactions with other drugs, medical diagnosis, and
other health care information; patient drug histories; patient instructions for
drug use; electronic prescriptions and refill authorization; clinical
information and educational sources related to drugs; information on drug
distribution and pricing; clinical trial information; and drug sample
management.
1.14. RELAY(TM) SOFTWARE. Relay Software shall mean proprietary software
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of IMS that captures medical reports from any Sponsor information systems and
distributes them to Subscribers.
1.15. SCRIPT. Script shall mean any customized screen or message format
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that appears on a Sponsor's or Subscriber's NCW to
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facilitate the sending or receiving of information in a format selected by a
Sponsor.
1.16. SECONDARY MARKETS. Any geographic market not listed in Exhibit B.
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1.17. SPONSOR. Sponsor shall mean any participant on any IMS Network that
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pays a fee to IMS (or its subsidiaries) in order to allow communication with a
Subscriber. Sponsors include, but are not limited to, hospitals, clinical
laboratories, managed care organizations, drug companies, and other payors and
providers.
1.18. SUBDIRECTORY. Subdirectory shall mean a list of Sponsor sites and
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Subscriber sites that appears as a screen or screens on Sponsor's NCW and
designates those Subscribers that Sponsor has paid to communicate with through
an IMS Network.
1.19. SUBSCRIBER. Subscriber shall mean any physician private practice
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site that is authorized by IMS to participate in an IMS Network.
1.20. SYNERGY SERIES(TM) SOFTWARE. Synergy Series Software shall mean the
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practice support software modules provided by IMS to Subscribers other than the
PC-Com Software. Synergy Series Software shall include the following
capabilities: "Word Pro(TM)" word processing; "Clinical Manager(TM)" clinical
data management; "Rx Manager(TM)" drug therapy management; "CME Manager(TM)"
continuing medical education management; Image Manager(TM) clinical imaging
management and other modules that may be offered by IMS from time to time.
1.21. TOP FIFTY MARKETS. Top Fifty Markets shall mean the markets set
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forth in EXHIBIT B.
2. BENEFICIARIES
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IMS will make available the services set forth in this Agreement on the
terms set forth herein to McKesson and any of its direct or indirect
subsidiaries. Services provided to other entities, including partners of
McKesson or its subsidiaries pursuant to joint venture, joint marketing,
technology development or other types of associations shall be governed by
separate sponsorship and participation agreements.
3. TERM
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3.1. Except as otherwise provided in Section 3.2, the initial term of this
Agreement will be five (5) years, and will renew annually thereafter unless
canceled in writing by either party sixty (60) days prior to the Agreement
anniversary date.
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3.2. At such time, if any, as McKesson makes the First Tranche investment
described in Section 5, the provisions set forth in Section 3.1 will be without
effect and the following provisions shall become effective. The initial term of
this Agreement will be five (5) years, and will renew automatically for one year
unless canceled in writing by McKesson at least sixty (60) days prior to the
expiration of the initial five-year terms. After the initial extension period,
the Agreement will renew automatically for subsequent one-year terms unless:
(i) McKesson cancels the Agreement in writing at least sixty (60) days prior to
the Agreement anniversary date; or (ii) McKesson has failed to make Cumulative
Payments of at least $250,000 in each of the four quarters preceding the renewal
date.
4. NETWORK SERVICES AND FEES
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4.1. EXISTING NETWORKS IN TOP FIFTY MARKETS. For the fees set forth in
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Exhibit A, with respect to existing IMS Networks located in the Top Fifty
Markets that are wholly controlled by IMS, IMS will provide access for the
McKesson Product Lines to all Subscribers designated by McKesson. For existing
IMS Networks located in the Top Fifty Markets that are operated under a Joint
Venture agreement, IMS will use its best efforts to obtain the consent of the
Joint Venture participants to provide such access by McKesson. IMS shall ensure
that any Joint Venture agreements entered into after the date of this Agreement
shall expressly permit such access by McKesson.
4.2. NEW NETWORKS IN TOP FIFTY MARKETS. For the fees set forth in
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Exhibit A, IMS will provide access for the McKesson Product Lines to all
Subscribers designated by McKesson in IMS Networks established after the date of
this Agreement in the Top Fifty Markets. Additionally, McKesson shall have the
right to become the initial Sponsor for IMS Networks established after the date
of this Agreement in the Top Fifty Markets. McKesson acknowledges that IMS
reserves the right to determine how many new IMS Networks IMS shall be
established in the Top Fifty Markets after the date of this Agreement.
4.3. ACCESS TO NETWORKS IN SECONDARY MARKETS. For the fees set forth in
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Exhibit A, IMS will provide access for the McKesson Product Lines to all current
Subscribers designated by McKesson in IMS Networks in the Secondary Markets.
IMS and McKesson will negotiate in good faith the terms on which access would be
made available to McKesson to new Subscribers in IMS Networks in the Secondary
Markets. McKesson acknowledges that routing of messages, directory updates and
other message or data files to Subscribers through the COMCENTER of an IMS
Network in a Secondary Market requires approval of, and involves the payment of
fees to, the operator of such IMS Network.
4.4. OTHER SERVICES. For no additional fee, IMS will take the actions
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set forth in this Section 4.4, provided, however,
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that for IMS Networks operated in conjunction with another party who is not
under the control of IMS, IMS' obligations under this Section shall be subject
to approval by such other party, which approval IMS shall use its best efforts
to obtain.
a. IMS will provide and maintain for each IMS Network the ComCenter
System, related personnel and services needed to support current and future IMS
Networks (together, the "Network Infrastructure"). IMS has the right to make
such changes to the Network Infrastructure, IMS-NET Software and Synergy Series
Software as it deems advisable in order to serve the needs of all IMS Network
participants.
b. IMS will assist McKesson to develop and implement a plan to
recruit prospective Subscribers specified by McKesson for access to the McKesson
Product Lines. IMS will implement such a plan through direct mail,
telemarketing, group presentations and individual site visits.
McKesson will, in its sole discretion, choose the Subscribers that are to
be included in McKesson's Subdirectory, subject to acceptance by such
Subscribers. McKesson will have the right to approve all IMS communications
with McKesson clients related to McKesson's participation in the IMS Networks.
IMS and the IMS Networks will conduct themselves at all times according to the
highest professional and ethical standards when communicating with McKesson's
clients.
Nothing in this Agreement shall be construed to limit IMS' right to enroll
additional Sponsors or Subscribers.
c. IMS will develop and execute a technical implementation plan for
each IMS Network. Such implementation will include meetings with appropriate
personnel of McKesson and McKesson's clients to identify departments and/or
functions to be included on the IMS Network, development of implementation
schedules and related documentation, training of personnel on Script development
and other support required to assist staff to optimize utilization of IMS
Networks.
d. For no additional fee, IMS, in conjunction with participating
Joint Venture partners and other IMS Network operators, will be responsible for
installation of Licensed Software and for providing training, support, IMS
Network administration and updates and enhancements of Licensed Software to
Subscribers sponsored by McKesson.
4.5. CALCULATION OF FEES. For purposes of calculating amounts due under
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Exhibit A, IMS Network usage shall include (i) messages in connection with
McKesson Product Lines sent through an Ims Network Controller and (ii) messages
in connection with McKesson Product Lines sent between McKesson or its
subsidiaries and a Sponsor or Subscriber, whether transmitted directly, or
through an intermediate switching point. IMS will provide
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McKesson with quarterly reports summarizing volume of such messages sent through
IMS Network Controllers. McKesson will provide IMS with quarterly reports
summarizing volume of such messages sent between McKesson or its subsidiaries
and Sponsors or Subscribers.
5. REMUNERATION AND PAYMENT
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5.1. MINIMUM SPONSOR FEE. McKesson shall pay IMS, as of the date of this
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Agreement, a fee of one million dollars ($1,000,000) (the "Minimum Sponsor
Fee").
a. Subject to paragraph 5.1(c), IMS shall credit the amount paid
as the Minimum Sponsor Fee toward any fees incurred by McKesson under Exhibit A
on or before December 31, 1996. Credit shall be given in IMS Networks operated
under a Joint Venture Agreement only up to IMS' national sponsor and marketing
agreement fees plus IMS' pro-rata ownership portion of the Joint Venture.
b. The parties acknowledge that McKesson presently contemplates an
equity investment in IMS as follows: McKesson may, in its sole discretion,
choose to purchase 2.25-million shares of IMS Preferred Stock for ten million
dollars ($10,000,000) as set forth in this paragraph. McKesson would purchase
1,250,000 shares by releasing five million dollars ($5,000,000) to IMS at an
initial closing (the "First Tranche"); and McKesson would purchase an additional
1,000,000 shares by paying the one million dollar ($1,000,000) Minimum Sponsor
Fee and by placing an additional four million dollars ($4,000,000) (the "Second
Tranche") in an interest bearing restricted account to be released to IMS if IMS
meets or exceeds certain operating performance criteria during the period from
October 1, 1993 through September 30, 1994. In the event that the performance
criteria were not met, McKesson would have the right, in its discretion, to
retain the four million dollars plus accrued interest and to put back to IMS the
1,000,000 shares.
(1) IMS agrees that at such time, if any, that McKesson makes
the First Tranche and Second Tranche investments IMS shall issue warrants (the
"Warrants") to purchase shares of convertible Series C Preferred Stock of IMS
("Shares") as follows:
(a) At the time that the First Tranche investment is made,
IMS shall issue Warrants for 375,000 Shares exercisable at any time during
the three-year period after such investment is made. If redeemed during the
first year after issuance, the Warrants will be exercisable at five dollars
($5.00) per Share; if redeemed during the subsequent year, the Warrants
will be exercisable at six dollars ($6.00) per Share; if redeemed during
the subsequent
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year, the Warrants will be exercisable at seven dollars ($7.00) per Share.
(b) At the time that the Second Tranche investment is
released from escrow, IMS shall issue additional Warrants for 500,000
Shares exercisable at any time during the two-year period after the Second
Tranche investment is released from escrow. If redeemed during the first
year after issuance, the Warrants will be exercisable at six dollars
($6.00) per Share; if redeemed during the subsequent year, the Warrants
will be exercisable at seven dollars ($7.00) per Share.
(c) At the time that the First Tranche investment is made,
and following the payment by McKesson of the Minimum Sponsor Fee under this
Agreement, IMS shall issue Warrants for 375,000 Shares exercisable at any
time during the three-year period after such investment is made. If
redeemed during the first year after issuance, the Warrants will be
exercisable at five dollars ($5.00) per Share; if redeemed during the
subsequent year, the Warrants will be exercisable at six dollars ($6.00)
per Share; if redeemed during the subsequent year, the Warrants will be
exercisable at seven dollars ($7.00) per Share. Notwithstanding the above,
the Warrants described in this Paragraph (c) shall expire prior to the end
of three years under the following circumstances. If McKesson has not made
Cumulative Payments (for purposes of this Agreement, "Cumulative Payments"
shall mean the full amount of the $1,000,000 Minimum Sponsor Fee, any
Optional Quarterly Sponsor Payments, and any other fees paid under this
Agreement) in the amounts set forth below by any dates set forth below,
then the Warrants described in this Paragraph (c) shall expire thirty (30)
days after such date.
====================================================
CUMULATIVE PAYMENT DATE DUE
====================================================
$1,375,000 January 31, 1995
$1,750,000 April 30, 1995
$2,125,000 July 31, 1995
$2,500,000 October 31, 1995
$3,000,000 January 31, 1996
$3,500,000 April 30, 1996
$4,000,000 July 31, 1996
$4,500,000 October 31, 1996
======================================================
(2) IMS agrees that, in addition to crediting the Minimum
Sponsor Fee toward fees as set forth in Section 5.1
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(a), at such time, if any, as the Second Tranche investment is released from
escrow to IMS, the amount of the Minimum Sponsor Fee shall also be credited
toward the purchase of the 2.25 million shares of IMS Preferred Stock, thus
constituting one million dollars of the ten million dollar purchase price for
the 2.25 million shares.
(3) The parties acknowledge that nothing in this Agreement
shall be construed as a commitment or agreement by McKesson to make any equity
investment in IMS and any such agreement would be subject to a separate written
agreement.
c. IMS agrees that, upon receipt of written instructions from
McKesson, IMS shall spend for regional or technical development efforts up to
one half of the proceeds from the Minimum Sponsor Fee as directed in writing by
McKesson.
The parties agree that the credit toward fees granted to McKesson
under paragraph 5.1.a shall not apply to any portion of the proceeds from the
Minimum Sponsor Fee for which McKesson directs the spending under this paragraph
5.1.c.
5.2. OPTIONAL QUARTERLY PAYMENTS. In addition to the Minimum Sponsor Fee,
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McKesson may, in its sole discretion, make quarterly prepayments toward amounts
incurred under Exhibit A ("Optional Quarterly Sponsor Payments").
5.3. PAYMENT OF ADDITIONAL AMOUNTS. If McKesson incurs fees under Exhibit
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A which at any time exceed the cumulative amount of the Minimum Sponsor Payment
and any Optional Quarterly Payments made by McKesson, then the following payment
terms shall apply:
a. BILLING. IMS shall submit invoices to McKesson for amounts
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payable under this Agreement as they are incurred; provided, however, that
invoices for Annual Sponsor Fees (as defined in Exhibit A) shall be submitted
thirty (30) days before the expiration of the prior sponsorship period.
b. PAYMENT. Within thirty (30) days of receipt of an invoice,
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McKesson shall initiate an electronic funds transfer to the amount to be paid to
a bank account designated in writing by IMS.
c. LATE FEE. In the event that McKesson fails to pay any amount
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owing under this Agreement by the applicable due date, IMS shall have the right
to impose late payment charges on any unpaid balance at the rate of twelve
percent (12%) per year.
5.4. PRICE CHANGES.
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a. IMS will not increase the fees set forth in Exhibit A during the
first year of this Agreement. Thereafter, throughout the term of this Agreement
and any renewals, IMS not increase such fees during any contract year by a
percentage
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that exceeds two times any increase in the Consumer Price Index during such
contract year. Notwithstanding the above, in no event shall IMS increase any
fees to McKesson such that McKesson does not have the benefit of the preferred
price provided to McKesson as set forth in Exhibit A.
b. IMS agrees that throughout the term of this Agreement and any
renewals, if IMS reduces its fees to any Sponsor, the fees set forth in Exhibit
A shall be reduced by a percentage necessary to maintain the preferred price
spread provided to McKesson as set forth in Exhibit A.
c. The parties agree that they shall negotiate in good faith changes
to the fees set forth in Exhibit A, or the criteria on which fees under this
Agreement are based, if such changes are necessary or desirable to meet market
conditions and demands.
5.5. RIGHT TO AUDIT AGREEMENTS. IMS shall provide McKesson with an annual
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certificate of compliance signed by an officer of IMS certifying that IMS is in
compliance with the provisions of Section 5.4.
5.6. TAXES. The parties acknowledge that any fees or other charges to be
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paid by McKesson under this Agreement do not include any Federal, State, County
or local sales, use or other excise taxes however designated that may be levied
on McKesson as the buyer.
6. APPROVAL RIGHTS FOR PRESCRIPTION BENEFIT MANAGEMENT SERVICES
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6.1. IMS will not introduce Prescription Benefit Management Services on or
before January 31, 1995 without the approval of, and except on terms acceptable
to McKesson. If McKesson makes Cumulative Payments to IMS under this Agreement
in the amounts set forth below, then the rights granted to McKesson under this
Section shall be extended by one year from the date IMS receives payment of such
cumulative amount.
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CUMULATIVE PAYMENT DATE DUE
===================================================
$1,375,000 January 31, 1995
$3,000,000 January 31, 1996
$5,000,000 January 31, 1997
===================================================
6.2. Notwithstanding anything to the contrary in Section 6.1, at such
time, if any, as the First Tranche investment is made, IMS will not introduce
Prescription Benefit Management
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Services throughout the term of this Agreement and any extension thereof without
the approval of and except on terms acceptable to McKesson regardless of any
Cumulative Payments made by or due from McKesson under Section 6.1.
7. DATABASE/INFORMATION SERVICES.
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McKesson may elect to use IMS Networks to provide physicians and other
health care entities with access to McKesson proprietary data base/information
services.
8. DATA OWNERSHIP.
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8.1. McKesson acknowledges that McKesson has no right of ownership or use
in any data transmitted across IMS Networks that is not transmitted in
connection with a McKesson Product Line.
8.2. McKesson will not compile, use or sell data that is transmitted across
IMS Networks in connection with a McKesson Product Line and in which McKesson
reasonably determines that a Sponsor or a Subscriber has a proprietary right,
unless McKesson obtains the consent of such Sponsor or Subscriber.
8.3. Subject to the limitations set forth above, McKesson shall have the
right to capture and compile data transmitted across IMS Networks in connection
with McKesson Product Lines and to generate, use and sell compilations, analyses
and reports based on such data. IMS acknowledges that IMS shall have no right
of ownership in such data, except that IMS shall be entitled to any fees set
forth in Exhibit A in connection with the transmission of such data. McKesson
acknowledges that IMS intends to provide and support various application
software modules and provide other solutions to assist Subscribers and other IMS
Network constituents to create or update databases. McKesson acknowledges that,
except as otherwise provided above, they have no proprietary rights to such
databases and that both McKesson and IMS are free to negotiate agreements to
gain access to such databases to support their respective business objectives.
9. SOFTWARE WARRANTY.
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IMS warrants that the Licensed Software will be free of errors and
malfunctions and agrees, upon notification by McKesson, to correct at its own
costs, as quickly as possible but no later than 30 days after receipt of such
notification, any such errors or malfunctions in its software or related
documentation. This warranty will not apply in the event of any unauthorized
alteration to or use of Licensed Software by McKesson.
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IMS warrants that it has all right and title to or has entered into
licensing agreements covering all Licensed Software.
10. CONFIDENTIALITY
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As used in this Section "Confidential Information" shall mean trade
secrets, pricing, marketing plans, client lists, software and other information
which a party identifies as proprietary and confidential. McKesson and IMS
shall not (i) disclose Confidential Information of the other party to any third
party without first obtaining the express written permission of the other party,
which permission shall not be unreasonably withheld, (ii) shall use Confidential
Information only as is necessary to fulfill its obligations pursuant to this
Agreement, and (iii) shall limit such disclosure to any of its officers or
employees on a need-to-know basis for purposes of fulfilling its obligations
under this Agreement.
Notwithstanding anything to the contrary in this Section, Confidential
Information shall not include:
a. information which is in the public domain prior to the receiving
party's receipt thereof from the supplying party, or which subsequently becomes
a part of the public domain other than by the receiving party's negligence or
wrongful act;
b. information which was disclosed to the receiving party by a third
party having the legal right to make such disclosure, or which the receiving
party can establish was in its lawful possession prior to its receipt from the
supplying party;
c. information which the receiving party can establish was
independently developed without breach of this agreement; and
d. information to the extent it is disclosed pursuant to a subpoena
or court order.
11. OBLIGATIONS OF McKESSON TO IMS.
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11.1. NETWORK LIAISON. McKesson will identify personnel responsible for
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working with IMS to support IMS Network activities including Subscriber
marketing, interface testing, and interactions between participants in IMS
Networks.
11.2. SUBSCRIBER RECRUITING. McKesson will provide reasonable and
---------------------
appropriate cooperation with IMS' efforts to recruit potential Subscribers,
including: providing lists of targeted potential Subscribers; participating in
group informational meetings; sending letters to McKesson clients, selected by
McKesson, encouraging IMS Network participation; and
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participating in IMS Network publicity either directly or in cooperation with
McKesson clients.
11.3. NETWORK UTILIZATION. McKesson agrees not to transmit unsolicited
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advertising messages to Subscribers; provided, however, that McKesson may
transmit unsolicited product or service information using IMS authorized
procedures under which such information is stored for optional review by the
Subscriber.
11.4. NETWORK ACCESS. McKesson will provide IMS Network participants with
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access to the data center of McKesson's subsidiary PCS Health Systems, Inc.
("PCS") consistent with access customarily provided to PCS clients.
11.5. INSTALLING SOFTWARE UPDATES. McKesson will promptly install any
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changes, updates or corrections to IMS software that are provided to McKesson by
IMS.
12. SOFTWARE LICENSE.
IMS hereby grants to McKesson a fully paid, nonexclusive license to use the
Licensed Software in connection with McKesson's rights and duties under this
Agreement. Without limiting the generality of the foregoing, the right of
McKesson to use Licensed Software shall include the right to conduct such
evaluations and reviews of the Licensed Software as McKesson may desire, the
right to make modifications or improvements in the Licensed Software for any
purpose, the right to copy the Licensed Software, and the right to use the
Licensed Software to provide access to the McKesson Product Lines for IMS
Networks.
12.1. TERM FOR LICENSE. The License granted under this Section shall
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commence on the date of this Agreement and shall be effective in perpetuity.
12.2. ESCROW AGREEMENT. IMS agrees to keep, and maintain current, a copy
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of the Licensed Software, source codes and technical documentation in escrow
with Hopper & Kanouff, Suite 200, 1610 Wynkoop, Denver, Colorado 80202,
303/892-6000 as escrow agent under the terms set forth in Exhibit D.
13. SUBSCRIBER RIGHTS AND OBLIGATIONS
---------------------------------
IMS and Subscribers' obligations to each other are defined in the Network
Subscriber Agreement, a copy of which is attached as Exhibit E for reference.
14. NETWORK PERFORMANCE/RELIABILITY
-------------------------------
In order to insure continuity of Network service and eliminate any single
point of Network failure, IMS will maintain
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identical Network directories on two or more Network Controllers located in
separate physical sites. If one Controller malfunctions, messages will be
automatically re-routed through the back-up Controllers.
15. INDEMNIFICATION
---------------
McKesson and IMS each agrees to defend, indemnify and hold the other
harmless against any and all claims, costs and expenses that may arise, be
charged to, incurred by or recovered from the indemnified party and that arise,
or are alleged to arise as a result of the indemnifying party's willful
misconduct or acts by the indemnifying party that are a material breach of this
Agreement.
IMS further agrees to defend, indemnify and hold McKesson harmless against
any and all copyright infringement, trademark infringement or other intellectual
property claims, costs and expenses ("Claims") that may arise, be charged to,
incurred by or recovered from McKesson or its direct or indirect subsidiaries
and that arise, or are alleged to arise, as a result of McKesson's use of
Licensed Software or Network Services.
16. NO AGREEMENT TO MAKE EQUITY INVESTMENT
--------------------------------------
The parties mutually agree that nothing in this Agreement, nor any conduct
by McKesson or IMS nor their respective directors, officers, employees, agents
or representatives shall be deemed to constitute a binding agreement or
understanding for McKesson to make any equity investment in IMS. Without
limiting the generality of the foregoing, IMS covenants not to sue or institute
any legal proceedings seeking to establish that any such contractual
relationship exists under this Agreement or otherwise.
17. INSURANCE
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IMS will maintain at all times general liability insurance in an amount of
at least $1,000,000.
18. APPLICABLE LAW
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This Agreement will be interpreted according to Colorado law.
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19. SUCCESSORS AND ASSIGNS
----------------------
This Agreement will be binding upon, and will inure to the benefit of, IMS
and McKesson and their permitted successors and assigns.
20. ENTIRE UNDERSTANDING
--------------------
This Agreement, including any attachments hereto, constitutes the entire
understanding of IMS and McKesson with respect to the subject matter hereof and
supersedes any prior communications, written or oral. This Agreement may be
amended only by a writing executed by IMS and McKesson.
21. NOTICES
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Any notice required or permitted to be given pursuant to this Agreement
will be in writing and will be sent by mail or delivered personally to the
signatories to this Agreement (or their designates) at the addresses set forth
below. All notices will be effective upon receipt.
22. CHANGES IN LAWS, RULES AND REGULATIONS
--------------------------------------
The parties agree that if any changes in laws, rules or regulations occur
which affect the terms of this Agreement, the parties shall take any and all
actions and provide necessary information to comply with such laws, rules and
regulations and the parties further agree that they will, if necessary,
renegotiate in good faith the terms of this Agreement to comply therewith.
23. ASSIGNMENT
----------
This Agreement may not be assigned by either party without the prior
written consent of the other, and any such attempted assignment shall be without
effect.
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24. SEVERABILITY
------------
Whenever possible, each provision of this Agreement shall be interpreted so
as to be effective and valid under applicable law, but if any provision of this
Agreement should be prohibited or found invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
IN WITNESS WHEREOF, McKesson and IMS have executed this Agreement.
AGREED TO AND ACCEPTED FOR McKESSON:
McKESSON CORPORATION
One Post Street
San Francisco, California 94104-5296
Attention: David Mahoney
-----------------------------
By: /s/ David L. Mahoney
-----------------------------------
Title: Vice President
--------------------------------
AGREED TO AND ACCEPTED FOR IMS:
Integrated Medical Systems, Inc.
15000 W. Sixth Avenue
Golden, CO 80401
Attention: John A. McChesney
By: /s/ John A. McChesney
-----------------------------------
Title: President/CEO
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