Exhibit 10.15
STRATEGIC ALLIANCE AGREEMENT
THIS STRATEGIC ALLIANCE AGREEMENT (this "Agreement") is made and
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entered into as of January 8, 2001 by and between ALLSCRIPTS HEALTHCARE
SOLUTIONS, INC., a Delaware corporation ("Allscripts") and IDX SYSTEMS
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CORPORATION, a Vermont corporation ("IDX").
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W I T N E S S E T H
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WHEREAS, Allscripts is in the business of developing and marketing
products and services (the "Allscripts Products") to automate the delivery of
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physician or licensed clinical professional care and associated administrative
tasks using technology at whatever location the physician or licensed clinical
professional performs such activities;
WHEREAS, IDX has business units that develop and market computer
technology to automate administrative and financial aspects of physician office
medical practice. Through its subsidiary CHANNELHEALTH INCORPORATED, a Delaware
corporation ("ChannelHealth"), IDX is in the business of developing and
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marketing products and services ( the "Physician Channel Products") to automate
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the delivery of physician or allied professional clinical care and associated
administrative tasks carried out by physicians and licensed clinical
professionals using technology at whatever location such physicians or clinical
professionals perform such activities;
WHEREAS, IDX desires to divest its Physician Channel business and
Allscripts desires to acquire such business;
WHEREAS, IDX and Allscripts have entered into an Agreement and Plan of
Merger whereby Allscripts will acquire all of the issued and outstanding capital
stock of ChannelHealth, and ChannelHealth will become a wholly-owned subsidiary
of Allscripts (the "Acquisition");
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WHEREAS, IDX and ChannelHealth entered into that certain Cross License
and Software Maintenance Agreement, dated as of January 1, 2000, pertaining to
the use and distribution of certain technology and products (the "Cross License
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Agreement"), and, concurrently herewith, the parties are entering into an
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Amended and Restated Cross License and Software Maintenance Agreement to modify
the terms and conditions thereof to provide for the transfer of certain
technology to Allscripts (the "License Addendum" and, together with the Cross
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License Agreement, the License Agreement"); and
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WHEREAS, IDX and Allscripts desire to enter into an exclusive
strategic relationship whereby Allscripts and its Affiliates and successors,
including without limitation, ChannelHealth, and IDX and its Affiliates and
successors, will cooperate in marketing the Allscripts Products and the
Physician Channel Products to IDX customers. Allscripts would agree to sell IDX
products with agreeable revenue sharing or commission arrangement.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. DEFINITIONS
Capitalized terms used in this Agreement, unless otherwise defined in
this Agreement, shall have the meanings ascribed to them on Schedule 1 attached
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hereto.
2. TERM AND TERMINATION
2.1 Term. This Agreement shall be in effect for an initial term of ten
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(10) years from the date hereof (the "Initial Term") and shall
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automatically renew for additional, successive two (2) year terms
unless earlier terminated by either of IDX or Allscripts by giving
written notice of such party's election not to renew this Agreement
not later than one (1) year prior to the expiration of the Initial
Term or six (6) months prior to the expiration of any then current
successive term.
2.2 Termination. Notwithstanding the provisions of Section 2.1, this
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Agreement may be terminated:
2.2.1 by Allscripts if IDX shall have defaulted under or breached
any material term of this Agreement and shall not have cured
such breach within one hundred twenty (120) days after
receiving written notice from Allscripts specifying the
nature of such default or breach; or
2.2.2 by IDX if Allscripts shall have defaulted under or breached
any material term of this Agreement and shall not have cured
such breach within one hundred twenty (120) days after
receiving written notice from IDX specifying the nature of
such default or breach; or
2.2.3 by either party upon receipt of a notice from the other
party that such other party requires a composition or other
similar arrangement with creditors, files for bankruptcy or
is declared bankrupt.
2.3 Effect of Termination; Survival.
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2.3.1 In the event that this Agreement is validly terminated as
provided herein, then each of the parties shall be relieved
of their duties and obligations arising under this Agreement
after the date of such termination and such termination
shall be without liability to Allscripts or IDX; provided,
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however, that the obligations of the parties set forth in
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Sections 11.7 and 11.8 hereof shall survive
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any such termination and shall be enforceable hereunder;
provided, further, however, that nothing in this Section 2.3
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shall relieve Allscripts or IDX of any liability for a
breach of this Agreement.
2.4 Change of Control.
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2.4.1 Allscripts Change of Control. If a Change of Control of
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Allscripts or the Physician Channel Products business shall
occur at any time during the term of this Agreement whereby
a Direct Competitor of IDX shall Control Allscripts or the
Physician Channel Products business, (i) IDX shall
thereafter, for the term of this Agreement, be entitled to
payment of compensation on the sale or license of all
Allscripts Products (other than pharmaceutical products) in
a percentage amount equivalent to that provided to IDX at
the time of such Change of Control pursuant to the
Compensation Table set forth in the Development Plan and
(ii) immediately at the end of the term of this Agreement,
Allscripts shall deliver the source code for all Allscripts
Products to IDX.
2.4.2 IDX or Patient Channel Change of Control. If a Change of
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Control of IDX or the Patient Channel business of IDX shall
occur at any time during the term of this Agreement whereby
a Direct Competitor of Allscripts shall Control IDX or the
Patient Channel business of IDX (i) Allscripts shall
thereafter, for the term of this Agreement, be entitled to
payment of compensation on the sale or license of all
Patient Channel Products in a percentage amount equivalent
to that provided to Allscripts at the time of such Change of
Control pursuant to the Compensation Table set forth in the
Development Plan and (ii) immediately at the end of the term
of this Agreement, IDX shall deliver the source code for all
Patient Channel Products to Allscripts.
2.4.3 "Intellectual Property". All rights and licenses granted
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under or pursuant to this Agreement are, and shall otherwise
be deemed to be, for purposes of Section 365(n) of the
United States Bankruptcy Code (the "Code"), licenses to
rights to "intellectual property" as defined in the Code. A
party receiving such rights under this Agreement shall
retain and may fully exercise all of its rights and
elections under the Code. The parties further agree that, in
the event of the commencement of bankruptcy proceeding by or
against a party under the Code, the other party shall be
entitled to retain all of its rights under this Agreement.
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3. OPERATIONAL MANAGEMENT
The following obligations shall be in effect during the Initial Term
of this Agreement only:
3.1 Executive Management. Allscripts and IDX shall each appoint an
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executive with the title of vice president or higher to oversee
performance under this Agreement. These two executives shall meet not
less frequently than once each calendar quarter during the Initial
Term (and more frequently as needed) and shall produce not later than
five (5) business days after the end of each such calendar quarter a
written report to the boards of directors of IDX and Allscripts
setting forth in detail:
3.1.1 the accomplishments of Allscripts and IDX during the
preceding month in performing this Agreement;
3.1.2 plans for managing the relationship between IDX and
Allscripts during the next calendar month;
3.1.3 any items of dispute or disagreement between IDX and
Allscripts;
3.1.4 plans for resolving any dispute or disagreement between IDX
and Allscripts;
3.1.5 any changes proposed to be made to the Marketing Plan or
Development Plan; and
3.1.6 such other items as may be deemed appropriate by such
executives.
4. PRODUCT DEVELOPMENT
The following obligations shall be in effect during the Initial Term
of this Agreement only:
4.1 Product Development.
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4.1.1 Development and Enhancement of Allscripts Products.
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Allscripts shall be responsible for development of the
Physician Channel Products as described in the Development
Plan attached hereto as Exhibit A, as such Development Plan
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is updated from time to time pursuant to Section 4.1.2. IDX
shall perform all of its duties under the Development Plan.
The parties shall cooperate to jointly test any software
used in connection with the Allscripts Products to ensure
the functionality of such software prior to distribution
thereof to any IDX Customer.
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4.1.2 Update of Development Plan. IDX and Allscripts shall
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update the Development Plan every calendar quarter during
the term of this Agreement unless earlier updated as
necessary to maintain the commercial reasonableness thereof.
The Development Plan, as updated from time to time, shall
describe detailed activities and responsibilities for two-
year periods initially commencing on the date hereof. Not
later than three (3) months prior to the expiration of the
initial two-year term of the Development Plan, and
thereafter not later than three (3) months prior to the
expiration of each successive two-year period, the parties
shall commence work on a revised Development Plan for the
following two-year period. The Development Plan, as updated
from time to time, shall be executed by the parties and
shall become subject to this Agreement. Should the parties
have failed to agree upon and execute a revised an updated
Development Plan at the time of the expiration of the then
current Development Plan, the parties shall continue to
perform under the terms of the then current Development Plan
until such time as the parties shall agree upon a revised
Development Plan. Notwithstanding anything contained herein
or in any Development Plan to the contrary, at all times
during the Initial Term, Allscripts shall continue to fund
the development of the Physician Channel Products as
provided in the Development Plan as adopted on the date
hereof.
4.1.3 Participation in Development. Upon reasonable request by
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the other party, each party agrees to cooperate during the
term of this Agreement in the provision of suggestions and
specifications for enhancement and improvement of their
respective products and services based upon the needs and
requirements of their respective customers. If either party
agrees to develop additional products, features,
functionality, or interfaces, the material terms with
respect to such additional development shall be memorialized
in a written addendum to this Agreement specifying such
terms.
4.1.4 User Groups. Allscripts shall be given an opportunity to
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present and participate at IDX's annual ESD and Systems
Division national sales and user group conferences.
4.1.5 Early Releases and Testing. IDX and Allscripts shall
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deliver to each other for testing purposes only, copies of
the earliest test releases of all development deliverables
provided for in the Development Plan prior to delivery
thereof to any other customers or Distribution Partners.
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4.1.6 Demonstration Products. Each party shall develop
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demonstration versions of its products for use in selling
its products to the other party's customers and prospects
and shall have access to the demonstration systems of the
other party, in accordance with the Demonstration Product
Specification.
4.2 Technologies and Architectures.
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4.2.1 Standards.
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4.2.1.1 To facilitate data exchange and ease of use of the
parties' respective products, Allscripts Products
shall connect with the appropriate technical,
architectural, communication, functional design
and programming standards embodied in IDX Practice
Management Products, as well as the Patient
Channel and EDiX products, from time to time,
including without limitation the technical
standards, protocols, conventions and platforms
incorporated in the IDX Web FrameWork. IDX shall
provide Allscripts with no less than ninety (90)
days' prior written notice before implementing any
change with respect to such standards, protocols,
conventions or platforms.
4.2.1.2 IDX represents and warrants, as of the Closing
Date, that Physician Channel Products connect with
the appropriate technical, architectural,
communication, functional design and programming
standards embodied in IDX Practice Management
Products, as well as the Patient Channel and EDiX
products, including without limitation the
technical standards, protocols, conventions and
platforms incorporated in the IDX Web FrameWork.
4.2.1.3 To facilitate data exchange between the Patient
Channel and the portions of the Allscripts
Products related to the Patient Channel, all IDX
products shall connect with the appropriate
technical, architectural, communication,
functional design and programming standards
embodied in such Allscripts Products, such
compliance to allow for connection with such
products. Allscripts shall provide IDX with no
less than ninety (90) days' prior written notice
before implementing any change with respect to
such technical, architectural, communication,
design and programming standards embodied in such
Allscripts Products from time to time.
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4.2.2 Databases. Allscripts shall not create the capability in
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its products and services, or permit the use of its products
and services, to write to Practice Management Product
database except in conformance with written standards and
procedures approved by IDX in advance. IDX shall not create
the capability in its products and services, or permit the
use of its products and services, to write to any Allscripts
Product database except in conformance with written
standards and procedures approved by Allscripts in advance.
The parties shall regularly keep each other informed of
their respective standards and procedures.
4.3 Data Exchange.
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4.3.1 Interfaces. Each of IDX and Allscripts shall develop and
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maintain Interfaces with respect to each of the products of
the other party identified in the Development Plan. The
Interfaces, and any updates thereof required to be made to
maintain the Interfaces, shall be developed at the complete
and sole expense of the developing party with respect to any
particular Interface and shall be provided to the other
party at no charge. Allscripts shall migrate toward a
service oriented architecture in 2002 provided that such
architecture is stable, deployable, has comparable
performance to currently utilized technologies and has a
similar cost structure to currently utilized technologies.
Allscripts shall be responsible for integration and support
costs related to the guaranteed methods developed by
Allscripts in connection with such architecture.
4.3.2 Synchronization. Each of IDX and Allscripts shall be
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required to reasonably maintain the compatibility of their
respective products with any updates or new version releases
of the products of the other party identified in the
Development Plan.
4.3.3 Additional Interfaces. If the parties agree to develop
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interfaces between their respective products in addition to
the Interfaces, the material terms with respect to such
additional interfaces shall be memorialized in a written
addendum to this Agreement specifying such terms. Upon the
execution of such an addendum by each party, such additional
interfaces shall be deemed to be Interfaces hereunder.
4.3.4 Effects on Integration. Each party shall provide ninety
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(90) days' prior notice to the other of any new versions or
other material changes in any of its respective products
that might affect any Interface. Within a reasonable time
following receipt of such notice, the notified party shall
make any alterations or updates to
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any so affected Interface necessary to maintain such
Interface, at its own expense.
4.4 Other Products. The parties shall make suggestions for developing
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functional integration and data exchange among other IDX Practice
Management Products, EDiX products, Patient Channel Products and
Allscripts Products for the purpose of creating work flows and
processes that benefit physicians.
5. MARKETING OF ALLSCRIPTS PRODUCTS
The following obligations shall be in effect during the Initial Term
of this Agreement only:
5.1 Marketing Plan. During the Initial Term, IDX and Allscripts shall
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regularly update a marketing plan for marketing Allscripts Products to
IDX Customers and prospects, such marketing plan to initially to be
developed by Allscripts and IDX during the first ninety (90) days
following the Closing Date (as updated from time to time, the
"Marketing Plan"). The Marketing Plan shall commence on the Closing
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Date, shall include the physician installation targets of new
physician users of Allscripts Products set forth in Schedule 5.1 and
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shall describe detailed activities and responsibilities (including
without limitation, with respect to implementation) and sales
forecasts over the initial two-year period of this Agreement, but
shall be updated not less frequently than every three (3) months. The
Marketing Plan for the initial two-year period shall be completed and
executed by the parties no later than ninety (90) days following the
Closing Date and shall be subject to the terms of this Agreement. Not
less than three (3) months prior to the expiration of the initial two-
year period, and thereafter three (3) months prior to the expiration
of each successive two-year period of the Initial Term, the parties
shall commence work on a revised Marketing Plan for the following two-
year sales forecast period. The initial and each revised two-year
Marketing Plan shall be executed by the parties and shall be subject
to the terms of this Agreement. Should the parties have failed to
agree upon and execute a revised Marketing Plan at the time of the
expiration of the then current Marketing Plan, the parties shall
continue to perform under the terms of the then current Marketing Plan
until such time as the parties shall agree upon a revised Marketing
Plan.
5.2 Certain Restrictions on Marketing Rights.
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5.2.1 Restrictions on Allscripts. Except as provided in Section
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5.2.3:
5.2.1.1 Allscripts shall not develop any Practice
Management Products and shall not enter into any
relationship or arrangement with any Direct
Competitor of IDX whereby Allscripts or such
Direct Competitor of IDX Provides
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Practice Management Products; provided, that
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except as expressly set forth in this Agreement,
nothing shall preclude Allscripts from developing
or marketing any product, service, or
functionality that it currently markets.
5.2.1.2 Allscripts shall not Provide any products to IDX
Customers that are similar to the Virtual Office
Products unless IDX has abandoned the marketing of
such products.
5.2.2 Restrictions on IDX. Except as provided in Section 5.2.3,
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(i) IDX shall not develop or Provide any products similar to
the Allscripts Products and (ii) shall not enter into any
relationship or arrangement with any Direct Competitor of
Allscripts whereby IDX Provides products similar to or in
competition with the Allscripts Products, including without
limitation, the IDX products referred to as "OCM" or "Order
Communication" or "ESD's Mobile Schedule" (except to
continue to market the "ESD Mobile Schedule" as a stand
alone application on the Palm Pilot). The Practice
Management System of IDX as of the date hereof shall not be
deemed to be similar to the Allscripts Products.
5.2.3 Restrictions Not Applicable. Notwithstanding anything to
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the contrary contained in this Agreement or in any other
agreement between the parties:
5.2.3.1 Allscripts may cooperatively market Allscripts
Products with any vendor of Practice Management
Products that is not a Direct Competitor of IDX,
to any Person other than IDX Customers.
5.2.3.2 Allscripts may cooperate with a Person that
Provides products and services similar to the
Practice Management Products for the purpose of
deploying such products and services, on a
case-by-case basis to any Allscripts customer or
prospect, including without limitation by
development of data exchange or interfaces, if
such Allscripts customer or prospect requests such
similar products or services; provided, that
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interface development and data exchange performed
by Allscripts in connection with such other
products or services shall be performed at a
charge that is consistent with the ordinary and
customary practices of Allscripts, and Allscripts
will not cooperate with any Direct Competitor of
IDX to provide any financial benefits beyond
payment of such ordinary and customary charge.
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5.2.3.3 IDX may Provide any products or services similar
to Allscripts Products only as an offering
integrated with its LastWord and IDXrad and
Imaging Suite product lines, and any other non-
Practice Management Product products and services,
such as image management. IDX shall not Provide
any products or services similar to Allscripts
Products as an offering integrated with any
Practice Management Products. IDX may Provide any
hand-held device for dictation only in connection
with its EDiX product line, but not any other
products similar to Allscripts Products in
connection therewith.
5.2.3.4 IDX may establish direct connections for pharmacy
benefit management companies, drug manufacturers
and drug distributors involving a direct message
to a patient via the Patient Channel only (except
with respect to IDX Customers that utilize
LastWord as their inpatient EMR).
5.2.3.5 IDX may cooperate with a Person that Provides
products and services similar to the Allscripts
Products for the purpose of deploying such
products and services, on a case-by-case basis to
any IDX Customer or prospect, using any means,
including without limitation, development of
interfaces or publication of specifications, if
such IDX Customer or prospect requests such
similar products or services; provided, that
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interface development and data exchange performed
by IDX in connection with such other products or
services shall be performed at a charge which is
consistent with the ordinary and customary
practices of IDX, and IDX will not cooperate with
any Direct Competitor of Allscripts to provide any
financial benefits beyond payment of such ordinary
and customary charge.
5.2.3.6 Allscripts may market Allscripts Products to any
IDX Customer; provided, that Allscripts shall
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notify IDX of any such marketing efforts within
seven (7) days after Allscripts' initial contact
with such IDX Customer.
5.2.3.7 IDX may sell and market CMS subject to the
compensation provisions of Section 9.1.
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5.2.3.8 Clinical Trials. Nothing in this Agreement shall
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prevent either party from developing or marketing
functionality that that facilitates participation
by customers and prospects of such party in
clinical trials. With respect to and in connection
with marketing such functionality as
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may be contained in IDX's Practice Management
Products, however, IDX shall not resell or
distribute products of any Person that are similar
to the Allscripts Products.
5.2.4 Termination of Restrictions. Allscripts may elect to
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terminate Section 5.2.1 in the event of a Material Adverse
Change with respect to IDX, and IDX may elect to terminate
Section 5.2.2 in the event of a Material Adverse Change with
respect to Allscripts. In the event of a notice given
pursuant to this Section 5.2.4 by either party, the notified
party may, in its sole and absolute discretion, refer to
arbitration pursuant to Section 11.20, the determination of
whether the change which is the subject of such notice is a
Material Adverse Change.
5.3 Joint Marketing Duties.
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5.3.1 Joint Marketing Materials. At their joint expense, shared
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equally, Allscripts and IDX shall develop and produce
product marketing documentation and materials similar in
kind and quality to that currently provided by Allscripts
and IDX to their respective sales prospects for the purpose
of promoting and marketing the joint solution for physician
office practice, including without limitation,
administrative, financial and clinical information systems,
through integration of the IDX Practice Management Products
and the Allscripts Products.
5.3.2 User Groups and Trade Shows. Allscripts shall provide for
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featured participation by IDX at Allscripts' user group
meetings involving the Allscripts Products, and IDX shall
provide for featured participation by Allscripts at IDX's
user group meetings involving the Practice Management
Products. Each of Allscripts and IDX shall provide space at
their respective user group meetings for the other party's
products and shall show such products together with their
own respective products. In accordance with the Marketing
Plan, Allscripts and IDX shall publicize the alliance
created hereby at appropriate trade shows.
5.3.3 Information Regarding IDX Customers and Competitors.
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Allscripts and IDX shall keep each other informed of
opportunities that may exist for marketing products to their
respective customers. Allscripts shall promptly notify IDX
of any sales contact with an IDX Customer. IDX shall provide
Allscripts with access to IDX sales pipelines and IDX
Customer and competitor databases to the same extent and in
the same manner as provided to ChannelHealth prior to the
date hereof.
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5.3.4 Joint Sales. Each of Allscripts and IDX shall bill and
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collect for its own respective products and services
provided to IDX Customers. Allscripts and IDX shall each be
responsible for the payment to members of their own
respective sales forces of any appropriate commissions
earned by such members on sales of Allscripts Products
pursuant to Sections 5.4 and 5.5. Glen Tullman and Rich
Tarrant shall be reasonably available for initial marketing
efforts undertaken by Allscripts in connection with the
Merger Agreement and for subsequent meetings with customers
of the Physician Channel Products (which shall occur no less
frequently than once per month).
5.4 Marketing Duties of Allscripts--Allscripts Products. Allscripts shall
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market the Allscripts Products in accordance with the Marketing Plan
and in any event shall provide services necessary to support IDX's
marketing of Allscripts Products to IDX Customers as set forth below,
at its own expense:
5.4.1 Allscripts shall continue to develop and produce product
marketing documentation and collateral similar in kind and
quality to that currently provided by Allscripts to its
sales prospects. Allscripts shall deliver such documentation
and collateral in reasonable quantities and at such times
and places reasonably requested by IDX.
5.4.2 Allscripts shall provide sales support services with respect
to the Allscripts Products as generally and customarily
employed by IDX in support of sales of its products,
including without limitation, assisting in making sales
calls, providing product demonstrations, facilitating site
visits and responding to inquiries from prospects and
customers, such as requests for proposals, requests for
information and requests for quotations.
5.4.3 Allscripts shall maintain a qualified sales and marketing
support staff in numbers reasonably sufficient to support
IDX sales activities related to Allscripts Products.
5.4.4 Allscripts shall provide training to the IDX sales staff in
the Allscripts Products and Allscripts' business strategy.
5.4.5 Allscripts shall provide IDX with current sales projections
and regular updates thereto.
5.4.6 Allscripts shall develop and maintain a program for
incenting at least one IDX Customer in each IDX sales region
to be a reference site for every Allscripts Product in
general release.
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5.4.7 Allscripts shall appropriately compensate and incent its
sales personnel to sell Allscripts Products to IDX Customers
and prospects.
5.5 Marketing Duties of IDX--Allscripts Products. IDX shall market the
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Allscripts Products in accordance with the Marketing Plan and in any
event shall provide services necessary to support Allscripts'
marketing of Allscripts Products to IDX Customers as set forth below,
at its own expense:
5.5.1 IDX shall educate and train its sales and sales support
personnel so as to be able to present the Allscripts
Products to IDX Customers and prospects as necessary to
appropriately commercialize the Allscripts Products.
5.5.2 IDX shall appropriately compensate and incent its sales
personnel to sell Allscripts Products.
5.5.3 IDX shall provide Allscripts with current sales projections
and regular updates thereto.
5.5.4 IDX shall include appropriate descriptions of Allscripts
Products and Allscripts' business strategy in sales
proposals for new business as necessary to appropriately
commercialize the Allscripts Products.
5.5.5 IDX shall respond to requests for information, quotations,
proposals and the like for Allscripts Products as necessary
to appropriately commercialize the Allscripts Products.
5.5.6 IDX shall pay reasonable compensation to its sales force for
sales of Allscripts Products to IDX Customers; provided,
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that commission percentages paid on gross profit of
Allscripts Products by any member of IDX's sales force shall
be not less than commission percentages paid to such members
on sales of any other products.
5.5.7 Quotas for sales of Allscripts Products to IDX Customers and
prospects shall be placed on members of IDX's ESD and
Systems Division sales force. IDX account executives shall
be provided with a special bonus opportunity of $5,000 per
year in each of years 2001 and 2002 for the achievement of
such quotas established pursuant to this Section 5.5.7.
5.5.8 Each member of IDX's ESD and Systems Division sales
management shall be included in bonus plans and commission
plans whereby a meaningful portion of such person's annual
compensation is based upon overall sales of Allscripts
Products.
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5.5.9 IDX shall provide Allscripts employees involved in the sale
and development of Physician Channel Products with
reasonable access to IDX facilities for the same or similar
purposes related to the development, marketing and sale of
Physician Channel Products as provided to ChannelHealth
prior to the Closing Date.
5.6 Use of Allscripts Names and Marks. IDX may use the name "Allscripts"
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and the other Allscripts names and marks in connection with customer
communications pertaining to the co-marketing relationship between IDX
and Allscripts provided for under this Agreement and in accordance
with Allscripts' reasonable branding standards in effect from time to
time.
5.7 Use of IDX Names and Marks. Allscripts may use the name "IDX" and the
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other IDX names and marks in connection with customer communications
pertaining to the co-marketing relationship between IDX and Allscripts
as provided for under this Agreement and in accordance with IDX's
reasonable branding standards in effect from time to time.
5.8 Marketing and Administrative Duties of IDX. IDX shall have the
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authority to market, sell, resell and distribute Allscripts Products
pursuant to IDX's own terms and conditions as previously agreed upon
in writing by Allscripts. At IDX's request, IDX and Allscripts shall
enter into a distribution agreement for the term of this Agreement
that shall set forth customary terms and conditions upon which IDX may
purchase, license, sell and sublicense the Allscripts Products. To the
extent permitted by law, IDX shall have authority as Allscripts' agent
to bind Allscripts to perform for IDX Customers all of Allscripts'
standard sales terms and conditions as previously agreed upon in
writing by Allscripts; provided, however, that in the event of a
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failure by an IDX Customer to pay for an Allscripts Product, and such
failure is not based upon a dispute with respect to such Allscripts
Product, IDX shall be responsible to Allscripts for the sale price of
such Allscripts Product. Allscripts shall confirm IDX's authority as
provided in this Section 5.8 to any IDX Customer or prospective
customer on request of IDX.
6. OTHER MARKETING RIGHTS
6.1 Right to Provide on Non-exclusive Basis. Notwithstanding any
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termination or non-renewal of this Agreement, other than a termination
pursuant to Section 2.2.1 and including otherwise without limitation
any termination under Section 2.2 of this Agreement, for so long as
Allscripts or any Affiliate of Allscripts shall offer, license,
support, or maintain any Allscripts Products, or any derivatives,
enhancements, or improvements thereof, IDX shall be entitled to and
Allscripts shall offer to permit IDX to, Provide such Allscripts
Products, derivatives, enhancements, and improvements, and support or
maintenance services with respect thereto, upon the best terms and
conditions offered by Allscripts or such Affiliate
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of Allscripts to any distributor of Allscripts; provided, that if
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Allscripts or such Affiliate has no distributor, IDX's provision of
Allscripts Products shall be upon customary terms and at a price equal
to Allscripts' direct sale price less a commercially reasonable
discount.
6.2 Best Prices. Allscripts or any Affiliate of Allscripts shall at all
-----------
times during the term of this Agreement offer IDX Customers such
prices and terms for Allscripts Products equally favorable to the
prices (plus any subsidy earned by Allscripts on such Allscripts
Products) and terms offered to any customer of Allscripts similarly
situated to such IDX Customer.
7. TERMINATION OF PRIOR MARKETING OBLIGATIONS
Upon the Closing, that certain Marketing, Development and Service
Agreement, made and entered into as of January 1, 2000, by and between
ChannelHealth and IDX shall, except for the obligations of the parties set forth
in Section 5.1 thereof, terminate and cease to be of any further effect.
8. OWNERSHIP
8.1 In General. Ownership of software developments shall be governed by
----------
the License Agreement, except with respect to Interfaces, which shall
be governed by Section 8.2 of this Agreement.
8.2 Interfaces Developed Pursuant to This Agreement. The parties
-----------------------------------------------
contemplate that they may individually or jointly develop certain new
Interfaces. In each instance in which a new Interface is created, the
parties will agree to a specification for the Interface. Where the
specification is in the public domain, this Agreement does not purport
to create any rights for either party in such specification. If the
specification is owned by one of the parties, the other party receives
a perpetual, non-exclusive, non-transferable license to use the
Intellectual Property embodied in the Interface specification for the
purpose of creating the Interfaces contemplated in this Agreement. If
a specification is jointly authored by the parties, the parties shall
jointly own such specification and shall be free to use such
specification without interference from the other party and without
any obligation to pay any royalties or account for any profits. The
parties contemplate that Intellectual Property in and to the new
Interfaces may be created as a result of the creation of the new
Interfaces. As between the parties, such Intellectual Property related
to portions of the Interfaces intended to (a) organize data from IDX's
systems in the manner stated in the specification or (b) organize data
received in the manner stated in the specifications for use by IDX's
systems, shall be IDX's Intellectual Property. As between the parties,
the Intellectual Property related to Interfaces intended to (x)
organize data from Allscripts systems in the manner stated in the
specification, (y) organize data received in the
15
manner stated in the specifications for use by Allscripts' systems, or
(z) organize data between Allscripts' systems and third party systems,
shall be Allscripts' Intellectual Property. IDX hereby assigns to
Allscripts all right, title, and interest in and to all Intellectual
Property in the new Interfaces that is described above as belonging to
Allscripts. Allscripts hereby assigns to IDX all right, title, and
interest in and to all Intellectual Property in the new Interfaces
that is described above as belonging to IDX. The parties agree from
time to time to exchange and agree upon a written schedule setting
forth the allocation of the ownership and rights in and to the
specifications and Intellectual Property used or developed in
connection with the development of the new Interfaces.
9. COMPENSATION
9.1 Compensation; Payment. IDX and Allscripts shall be entitled to
---------------------
compensation for the sale or license of Allscripts Products and IDX
products as set forth in the Compensation Table set forth in the
Development Plan; provided, however, that IDX shall not be entitled to
-------- -------
any compensation for the sale or license of any Allscripts Products or
IDX Products installed prior to the Closing Date.
9.2 Minimum Compensation. Provided Allscripts shall not have defaulted
--------------------
under or breached any material term of this Agreement and shall not
have cured such breach within one hundred twenty (120) days after
receiving written notice from IDX specifying the nature of such
default or breach:
9.2.1 If the gross revenues to Allscripts for Allscripts Products
(less any commissions paid to IDX by Allscripts and less
payments to third parties for equipment sold) for fiscal
year 2001 (the "2001 Revenue") are less than $4.5 million,
------------
IDX will pay to Allscripts an amount equal to the difference
between $4.5 million minus 2001 Revenue.
9.3 Payments. Any payment to be made by a party pursuant to this
--------
Agreement shall be made no later than the twentieth-fifth (25th) day
of the calendar month next following the calendar month to which such
payment applies and shall be made by delivery of a check, payable to
the order of the party entitled to payment or by wire transfer of
immediately available funds to an account designated by such party.
Any payment to be made by IDX to Allscripts pursuant to Section 9.2
shall be made no later than March 31st of the year next following the
fiscal year to which such payment applies and shall be made by
delivery to Allscripts of a check, payable to the order of Allscripts
or by wire transfer of immediately available funds to an account
designated by Allscripts.
16
9.4 Late Fees. Each party agrees to pay late fees equal to one and
---------
one-half percent (1 1/2%) per month on all amounts due but not paid
within the time provided in Section 9.3.
10. SERVICES
10.1 Customer Support Services. Allscripts shall provide customer support
-------------------------
services for Allscripts Products, as follows:
10.1.1 CMS. Allscripts shall provide support for all existing CMS
---
customers of IDX in a manner consistent with support
provided by IDX to its customers generally and to the level
necessary to fulfill all contractual commitments of IDX to
its customers for CMS. As the sole compensation to
Allscripts for such services, IDX hereby assigns to
Allscripts all support fees for CMS it receives from such
customers.
10.1.2 Other Products. At its own expense and cost, Allscripts
--------------
shall provide Allscripts Maintenance for all IDX Customers
of Allscripts Products, including bugs, fixes and drivers,
consistent with Allscripts' ordinary and customary business
practices. Upgrades to Allscripts Products sold to IDX
Customers will be provided in the manner and price as is
consistent with Allscripts' ordinary and customary business
practices.
10.1.3 Other Services. Notwithstanding the fact that each party
--------------
shall be responsible for servicing and supporting its own
products, the parties hereby agree to cooperate with respect
to installation and implementation of each others' products
and in the provision of customer support services. The
parties further agree to cooperate to create a seamless help
desk, operations support and problem triage model for
customers to which products of both parties are marketed and
sold. If requested by an IDX Customer, IDX shall be entitled
to oversee and coordinate the implementation of such model.
10.2 Service Quality. All installation services provided by Allscripts
---------------
with respect to sales by IDX of Allscripts Products pursuant to
Section 5.8 shall be performed in a good and workmanlike manner and
consistent with standards generally applicable in the healthcare
clinical information systems industry and consistent with the
reasonable and customary support standards maintained in the
healthcare clinical information systems industry or, if higher, by the
IDX business unit most closely associated with the IDX Customer using
the Allscripts Products as previously communicated to Allscripts in
writing. Allscripts employees shall be permitted to directly support
IDX Customers.
17
11. MISCELLANEOUS
11.1 Confidentiality. Each of IDX and Allscripts will receive or learn
---------------
from, information, both orally and in writing, concerning the business
of Allscripts or IDX, respectively, including, without limitation,
financial, technical and marketing information, data, and information
related to the development of technology and services relating to
business plans, customers, and markets, which information is deemed,
in the case of Allscripts, proprietary to Allscripts and, in the case
of IDX, proprietary to IDX. Both parties hereby agree, as set forth
below, to protect such information, whether furnished before, on or
after the date of this Agreement, as it protects its own similar
confidential information, but never less than by commercially
reasonable efforts, and not to disclose such information to anyone
except as otherwise provided for in this Agreement. Such information,
in whole or in part, together with analyses, compilations, programs,
reports, proposals, studies or any other documentation prepared by the
parties, as the case may be, which contain or otherwise reflect or
make reference to such information, is hereinafter referred to as
"Confidential Information." Each party hereby agrees that the
Confidential Information will be used solely for the purpose of this
Agreement and not for any other purpose. Each party further agrees
that any Confidential Information pertaining to the other party is the
sole and exclusive property of such other party, and that the
receiving party shall not have any right, title, or interest in or to
such Confidential Information except as expressly provided in this
Agreement. Each party further agrees to protect and not to disclose to
anyone (except as provided in this Agreement) for any reason
Confidential Information pertaining to the other party; provided,
--------
however, that: (a) such Confidential Information may be disclosed to
-------
the receiving party's respective officers, directors, employees,
agents, or representatives (collectively, "Representatives") on a
"need to know" basis for the purpose of this Agreement on the
condition that (i) each of such Representatives will be informed by
the receiving party of the confidential nature of such Confidential
Information and will agree to be bound by the terms of this Agreement
and not to disclose the Confidential Information to any other person
and (ii) each party agrees to accept full responsibility for any
breach of this Section 11.1 by its respective Representatives; and (b)
Confidential Information pertaining to the other party may be
disclosed upon the prior written consent of the other party. Each
party hereby agrees, upon the request of the other party, to promptly
deliver to the other party at the other party's cost the Confidential
Information pertaining to such other party, without retaining any
copies thereof. Specifically and without limitation, each party agrees
to notify the other party promptly in writing upon any officer or
director learning of any unauthorized disclosure or use of the
Confidential Information.
18
11.2 Non-Confidential Information. The term "Confidential Information"
----------------------------
shall not include any information: (i) which at the time of disclosure
or thereafter is generally available to or known by the public (other
than as a result of a disclosure directly or indirectly by the
receiving party); (ii) is independently developed by the receiving
party, without reference to or use of, the Confidential Information of
the other party; (iii) was known by the receiving party as of the time
of disclosure without a breach of confidentiality; (iv) is lawfully
learned from a third party not under obligation to the disclosing
party; or (v) is required to be disclosed pursuant to a subpoena,
court order or other legal process, whereupon the receiving party
shall provide prompt written notice to the other party prior to such
disclosure.
11.3 No-Solicitation. During the first year of the term of this Agreement,
---------------
neither party, nor any Affiliate within its Control, shall hire any
individual who had been in the employ of the other party or any of the
other party's Affiliates. After the first year of the term of this
Agreement, neither party, nor any Affiliate within its Control, shall
hire any individual who had been in the employ of the other party or
any of the other party's Affiliates until such time as one (1) year
has passed since such individual was in the employ of the other party.
11.4 Regulatory Matters. Each party shall adopt, implement, and maintain
------------------
appropriate and compliant policies, procedures, and practices
necessary to comply with laws and regulations (including without
limitation the Health Insurance Portability and Accountability Act of
1996 ("HIPAA")) applicable to it in its business and applicable to it
as a business partner of a customer of the other to whom products or
services are provided under this Agreement. The parties agree to
amend this Agreement to contain any provisions necessary to be
included as a result of such business partner status. Each party
agrees to timely develop and include in its respective products
covered by this Agreement the functionality required to support the
minimum necessary standards applicable to users of its products as
required by HIPAA.
11.5 No Consequential Damages. In no event shall either party or any
------------------------
Affiliate of either party be liable hereunder for any consequential,
special, incidental, punitive or indirect damages (including without
limitation loss of profit, revenue, business opportunity or business
advantage), whether based upon a claim or action of tort, contract,
warranty, negligence, strict liability, breach of statutory duty, or
any other legal theory or cause of action, even if advised of the
possibility of such damages.
11.6 Agreements with Healtheon/WebMD. Each of IDX and Allscripts agree not
-------------------------------
to cause any default under or termination of (other than a termination
as a result of a default by Healtheon/WebMD) of the contracts between
IDX and Healtheon/WebMD and ChannelHealth and Healtheon/WebMD.
19
In the event IDX shall cause such a default or termination, IDX agrees
to pay Allscripts such amount of revenues as would have been paid to
Allscripts under the terms of the defaulted or terminated contract if
such default or termination by IDX had not occurred.
11.7 Indemnification. Each party (an "Indemnifying Party") will indemnify
--------------- ------------------
the other party, its officers, employees, and agents (each
an "Indemnified Party" and, collectively, the "Indemnified Parties")
----------------- -------------------
against, and hold each Indemnified Party harmless from, all claims,
suits, judgments, losses, damages, fines or costs (including
reasonable legal fees and expenses) ("Losses") resulting from any
------
claim, suit, or demand by any third party ("Third Party Claim") for
-----------------
injuries to or deaths of persons or loss of or damage to property
arising out of: (i) the Indemnifying Party's products or services as
marketed by the Indemnified Parties, unless the Indemnified Parties
shall have acted outside the scope of their rights under this
Agreement; and (ii) the Indemnifying Party's performance or willful
misconduct of the Indemnifying Party, its employees, officers, or
agents in connection with the Indemnifying Party's performance of this
Agreement, except to the extent caused by the negligence of any
Indemnified Party.
11.7.1 The Indemnifying Party's obligations under this Section 12
will survive the termination of this Agreement.
11.7.2 Each Indemnified Party shall give an Indemnifying Party
prompt written notice of any Third Party Claim of which such
Indemnified Party has knowledge concerning any Losses as to
which such Indemnified Party may request indemnification
hereunder. If the Indemnifying Party acknowledges in writing
its obligation to indemnify the Indemnified Party hereunder
against any Losses that may result from such Third Party
Claim, then the Indemnifying Party shall be entitled to
assume and control the defense of such Third Party Claim at
its expense and through counsel of its choice if it gives
notice of its intention to do so to the Indemnified Party
within five (5) days of the receipt of such notice from the
Indemnified Party; provided, however, that if there exists
-------- -------
or is reasonably likely to exist a conflict of interest that
would make it inappropriate in the judgment of the
Indemnified Party, in its sole and absolute discretion, for
the same counsel to represent both the Indemnified Party and
the Indemnifying Party, then the Indemnified Party shall be
entitled to retain its own counsel, at the expense of the
Indemnifying Party. In the event the Indemnifying Party
exercises the right to undertake any such defense against
any such Third Party Claim as provided above, the
Indemnified Party shall cooperate with the Indemnifying
Party in such defense and make available to the Indemnifying
Party, at the Indemnifying Party's expense, all witnesses,
pertinent records, materials and information in the
20
Indemnified Party's possession or under the Indemnified
Party's control relating thereto as is reasonably required
by the Indemnifying Party. Similarly, in the event the
Indemnified Party is, directly or indirectly, conducting the
defense against any such Third Party Claim, the Indemnifying
Party shall cooperate with the Indemnified Party in such
defense and make available to the Indemnified Party, at the
Indemnified Party's expense, all such witnesses, records,
materials and information in the Indemnifying Party's
possession or under the Indemnifying Party's control
relating thereto as is reasonably required by the
Indemnified Party. No such Third Party Claim may be settled
by the Indemnifying Party without the prior written consent
of the Indemnified Party.
11.7.3 In no event shall the Indemnifying Party be liable to an
Indemnified Party for any indirect, incidental, special,
punitive, exemplary or consequential damages arising out of
or otherwise relating to this Agreement, even if the
Indemnifying Party has been advised of the possibility or
likelihood of such damages.
11.7.4 Notwithstanding the foregoing, with respect to any claim
that would otherwise be subject to indemnification by a
party pursuant to this Agreement, if indemnification with
respect to such claim is governed by the License Agreement,
then no indemnification shall be available under this
Agreement.
11.8 Expenses. Except as otherwise specified in this Agreement, all
--------
costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants,
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs
and expenses, whether or not the Closing shall have occurred.
11.9 Further Assurances and Documents. IDX and Allscripts shall take all
--------------------------------
actions and do all things, including without limitation the execution
and delivery of instruments and documents, necessary to effectuate
the purposes and intent of this Agreement.
11.10 Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by courier service, by telecopy or by
registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or
at such other address for a party as shall be specified in a notice
given in accordance with this Section 11.10):
21
(a) if to Allscripts:
Allscripts Healthcare Solutions, Inc.
2401 Commerce Drive
Libertyville, Illinois 60048
Attention: President
Facsimile: (847) 680-3573
With a copy to:
Weil, Gotshal & Manges LLP
700 Louisiana, Suite 1600
Houston, Texas 77002
Attention: Steven D. Rubin III
Facsimile: (713) 224-9511
(b) if to IDX:
IDX Systems Corporation
1400 Shelbourne Road
South Burlington, VT 05043
Attention: President
Facsimile: (802) 865-3681
With a copy to: General Counsel at the same address
11.11 Public Announcements. Except as required by law, governmental
--------------------
regulation or by the requirements of any securities exchange on which
the securities of a party hereto are listed, no party to this
Agreement shall make, or cause to be made, any press release or
public announcement in respect of this Agreement or the transactions
contemplated hereby or otherwise communicate with any news media
without the prior written consent of the other party, and the parties
shall cooperate as to the timing and contents of any such press
release or public announcement.
11.12 Headings. The descriptive headings contained in this Agreement are
--------
for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.13 Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or incapable of being enforced by any law,
governmental regulation or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify
this
22
Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
11.14 Entire Agreement. This Agreement, together with the License
----------------
Agreement, constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof and supersedes all prior
agreements and undertakings, both written and oral, with respect to
the subject matter hereof.
11.15 Assignment. This Agreement shall be binding upon the parties and
----------
their respective successors, representatives and permitted assigns
and their Affiliates Controlled by them, respectively. Neither party
may assign this Agreement without the prior written consent of the
other party, except that either party hereto may assign its rights
hereunder to an Affiliate of such party and either party may,
without the consent of the other party, assign and delegate this
Agreement and its rights and obligations hereunder in connection
with a merger, consolidation or sale of substantially all of its
assets (which sale shall include the assignment and assumption of
all rights and obligations under the License Agreement); provided,
--------
however, that such assignee or transferee shall assume all
-------
obligations of the assigning or transferring party and any such
assignment shall not relieve the assigning or transferring party of
its obligations hereunder.
11.16 No Third Party Beneficiaries. This Agreement shall be binding upon
----------------------------
and inure solely to the benefit of the parties hereto and their
permitted assigns and successors and nothing herein, express or
implied, is intended to or shall confer upon any other person or
entity, any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
11.17 Amendment. This Agreement may not be amended or modified except by
---------
an instrument in writing signed by, or on behalf of, each of the
parties.an
11.18 Governing Law. This Agreement shall be governed by the laws of the
-------------
State of Delaware without regard to its conflict of laws provisions.
11.19 Counterparts. This Agreement may be executed in one or more
------------
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and
the same agreement.
11.20 Arbitration. The parties shall attempt in good faith to resolve by
-----------
agreement any claim or controversy arising out of or relating to
this Agreement or the breach hereof.
23
11.20.1 Subject to the first sentence of this Section 11.20, any
and all claims, counterclaims, demands, causes of action,
disputes, controversies, and other matters in question
arising out of or relating to this Agreement, any
provision hereof, the alleged breach of any such
provision, or in any way relating to the subject matter of
this Agreement or the relationship between the parties
created by this Agreement, involving the parties, their
Affiliates and/or their respective representatives (all of
which are referred to herein as "Arbitrable Claims"), even
------------------
though some or all of such Arbitrable Claims allegedly are
extra-contractual in nature, whether such Arbitrable
Claims sound in contract, tort, or otherwise, at law or in
equity, under state or federal law, whether provided by
statute or the common law, for damages or any other
relief, will be resolved by binding arbitration. Any
arbitration will be administered by the arbitrators in
accordance with the Commercial Arbitration Rules of the
American Arbitration Association (the "AAA") in effect at
---
the time the arbitration is initiated (collectively, the
"Rules").
-----
11.20.2 The validity, construction, and interpretation of this
agreement to arbitrate, and all procedural aspects of the
arbitration conducted pursuant to this agreement to
arbitrate, including without limitation, the determination
of the issues that are subject to arbitration (i.e.,
arbitrability), the scope of the arbitrable issues,
allegations of "fraud in the inducement" to enter into
this Agreement or this arbitration provision, allegations
of waiver, laches, delay or other defenses to
arbitrability, and the rules governing the conduct of the
arbitration (including without limitation, the time for
filing an answer, the time for the filing of
counterclaims, the times for amending the pleadings, the
specificity of the pleadings, the extent and scope of
discovery, the issuance of subpoenas, the times for the
designation of experts, whether the arbitration is to be
stayed pending resolution of related litigation involving
third parties not bound by this Agreement, the receipt of
evidence, and the like), will be decided by the
arbitrators in accordance with the Rules. In deciding the
substance of the parties' Arbitrable Claims, the
arbitrators shall refer to the substantive laws of the
State of Delaware for guidance (excluding Delaware choice-
of-law principles that might call for the application of
some other state's law). Each party shall be entitled to
discovery rights equivalent to those provided under the
Federal Rules of Civil Procedure. NOTWITHSTANDING ANY
OTHER PROVISION IN THIS AGREEMENT TO THE CONTRARY, THE
PARTIES EXPRESSLY AGREE THAT THE ARBITRATORS WILL HAVE
ABSOLUTELY NO AUTHORITY TO AWARD CONSEQUENTIAL, TREBLE,
24
EXEMPLARY OR PUNITIVE DAMAGES OF ANY TYPE UNDER ANY
CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES MAY BE
AVAILABLE UNDER DELAWARE LAW, THE LAW OF ANY OTHER STATE,
OR FEDERAL LAW, OR UNDER THE FEDERAL ARBITRATION ACT, OR
UNDER THE RULES, THE PARTIES HEREBY WAIVING THEIR RIGHT,
IF ANY, TO RECOVER CONSEQUENTIAL, TREBLE, EXEMPLARY OR
PUNITIVE DAMAGES IN CONNECTION WITH ANY ARBITRABLE CLAIMS.
11.20.3 The arbitration proceeding will be conducted in New York,
New York. Within thirty days of the notice of initiation of
the arbitration procedure, the parties shall obtain from the
AAA a list of arbitrators from its Commercial Panel from
which the parties shall select a panel of three neutral
arbitrators in accordance with the Rules and normal
procedures of the New York office of the AAA. If necessary,
the AAA shall select some or all of the arbitrators when it
is authorized to do so under the Rules.
11.20.4 In the event of an arbitration proceeding between Allscripts
and IDX or any of their Affiliates, one half of all fees of
the arbitrators will be borne by Allscripts and the other
half will be borne by IDX.
11.20.5 To the fullest extent permitted by law, the arbitration
proceeding and the arbitrators' award will be maintained in
confidence by the parties.
11.20.6 The award of the arbitrators will be final and binding on
the parties, and judgement thereon may be entered in a court
of competent jurisdiction.
11.21 Waiver of Jury Trial. Each of the parties hereto irrevocably and
--------------------
unconditionally waives trial by jury in any legal action or proceeding
relating to this Agreement or the transactions contemplated hereby and
for any counterclaim therein.
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized signatories thereunto duly
authorized as of the day and year first above written.
IDX SYSTEMS CORPORATION ALLSCRIPTS HEALTHCARE
SOLUTIONS, INC.
By: /s/ Robert W. Baker, Jr. By: /s/ Robert W. Baker, Jr.
------------------------------------- --------------------------------
[Signature of Authorized Agent] Glen E. Tullman
Chief Executive Officer
Print Name and Title:
26
SCHEDULE 1
----------
DEFINITIONS
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, such specified
Person.
"Allscripts" means Allscripts Healthcare Solutions, Inc. a Delaware
corporation.
"Allscripts Products" means the products and services (i) offered by
Allscripts as more fully described in the Development Plan, (ii) the Physician
Channel Products as of the Closing Date and (iii) all of the products and
services to be developed as set forth under the Development Plan.
"Change of Control" means any event, transaction or occurrence as a
result of which either of IDX or Allscripts (i) shall cease to own or control,
directly or indirectly through any of its respective Affiliates, a majority of
the voting rights associated with ownership of its respective voting stock or
(ii) shall cease to have the ability, directly or indirectly, through one or
more of its Affiliates, to elect a majority of its respective board of
directors.
"ChannelHealth" means ChannelHealth Incorporated, a Delaware
corporation, its successors and assigns, and any other entity which, as of the
Closing, Controls, is Controlled by, or is under common Control with
ChannelHealth.
"ChannelHealth Customers" means customers that have contracted or are
in the process of contracting for some or all of the products and services
offered by ChannelHealth.
"Clinical Management Suite" or "CMS" means the product currently
marketed by IDX under the trademark of "CMS" or "Clinical Management Suite,"
including its predecessor product known as "CRS."
"Closing" means the closing of the acquisition by Allscripts of all of
the issued and outstanding capital stock of ChannelHealth pursuant to the Merger
Agreement.
"Closing Date" means the date on which the Closing occurs.
"Compensation Table" means the revenue sharing model as provided in
the Development Plan.
"ConnectR" means the product currently marketed by IDX under the
trademark "ConnectR."
27
"Control" including the terms "Controlling," "Controlled by," and
"under common Control with," means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise.
"Cross License Agreement" has the meaning set forth in the recitals to
the Strategic Alliance Agreement.
"Demonstration Product Specification" means the hardware and software
required to demonstrate the Allscripts Products as mutually agreed to in the
Marketing Plan.
"Development Plan" means the Development Plan as described in Section
4 to the Strategic Alliance Agreement, and as initially set forth on Exhibit A
attached to the Strategic Alliance Agreement.
"Direct Competitor of Allscripts" means any Person that Provides any
products similar to the Allscripts Products and any successor, assignee,
Affiliate or partner of such Person.
"Direct Competitor of IDX" means any Person that Provides any Practice
Management Products and is named on Annex A to this Schedule 1 and any
-------
successor, assignee, Affiliate or partner of such Person and any Person that IDX
notifies Allscripts shall be additionally included on Annex A to this Schedule 1
-------
from time to time.
"Distribution Partner" means any Person that has the right to market,
cooperatively market, distribute, resell, sublicense, license, sell or otherwise
provide a party's products or services, including by way of example and not in
limitation, any reseller, distributor, licensee, customer, contractor, service
provider, co-marketer, outsourcing vendor, or other information technology
company.
"EDI" means effecting the exchange of information and transactions
between trading partners over a network using electronic means.
"IDX" means IDX Information Systems Corporation, a Vermont
corporation.
"IDX Customer" means any Person that has entered into a written
agreement with IDX pursuant to which IDX provides any of its core products,
including without limitation Practice Management Systems, IDXrad, and
LastWord(R) (the "Core Products"), all Affiliates of such Person, and all
Persons receiving the benefit of any of the Core Products by or through such
Person or Affiliates of such Person including without limitation those IDX
Customers as set forth in the Development Plan.
"IDX Licensed Technology" means the technology licensed to Allscripts
and ChannelHealth pursuant to the License Addendum.
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"Initial Term" means a period of ten (10) years commencing on the
Closing Date.
"Intellectual Property" means, without limitation, know-how, trade
secrets, inventions (whether or not patentable), ideas, materials, discoveries,
techniques, plans, designs, formulas, processes, invention disclosures,
technology, data or information, software and documentation therefor, hardware,
source code (including all programmers' notes), procedures, methods, works and
other documentation and information and the right to sue and recover damages for
past, present and future infringement of such intellectual property.
"Interfaces" means the interfaces between the Allscripts Products and
the IDX Practice Management Products, Patient Channel, and EDiX as described on
Schedule 4.3.1 attached to the Strategic Alliance Agreement.
"Lastword" means the product marketed by IDX under the trademark
LastWord.
"License Addendum" has the meaning set forth in recitals to the
Strategic Alliance Agreement.
"License Agreement" has the meaning set forth in recitals to the
Strategic Alliance Agreement.
"Maintenance" means the upkeep of software products by a Person
including the provision of bugs, fixes and drivers, consistent with such
Person's ordinary and customary business practices
"Marketing Plan" has the meaning set forth in Section 5.1 of the
Strategic Alliance Agreement.
"Material Adverse Change" means any material adverse change in the
business, properties, results of operations, condition (financial or otherwise)
of an applicable Person (other than changes that are the result of economic
factors affecting the economy as a whole or changes that are the result of
factors generally affecting the specific industry or markets in which a party
competes).
"Merger Agreement" means that certain Agreement and Plan of Merger by
and among Allscripts (formerly named Allscripts Holding, Inc.), Allscripts,
Inc., Bursar Acquisition, Inc., Bursar Acquisition No. 2, Inc., IDX and
Channelhealth, dated as of July 13, 2000, whereby Allscripts agreed to acquire
all of the issued and outstanding capital stock of ChannelHealth.
"OutReach" means the product currently marketed by IDX under the
trademark "OutReach."
"Patient Channel" means the product marketed by ChannelHealth and IDX
under the name Patient Channel.
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"Patient Channel Products" means the computer software and
computerized or automated products and services marketed under the name "Patient
Channel" as more fully described in the Development Plan.
"Person" means any individual, partnership, firm, corporation,
association, trust, limited liability company, limited liability partnership,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended.
"Physician Channel Products" means the computer software and
computerized or automated products and services marketed under the name
"Physician Channel" as more fully described in the Development Plan.
"Practice Management Products" means any software application
expressly designed to automate the business processes of physician billing,
physician scheduling and managed care contract administration.
"Provide" means to market, sell, license, cooperatively market, or
otherwise distribute, including through one or more Distribution Partners.
"Regulatory Requirements" means all federal and state laws and
regulatory requirements applicable to the use by IDX, IDX Customers,
ChannelHealth, and ChannelHealth Customers of the ChannelHealth products from
time to time during the term of the Strategic Alliance Agreement, including
without limitation those applicable to billing and claims submittal, managed
care, prescriptions, EDI transactions, data transmission, security and privacy,
and program requirements generally applicable to healthcare organizations, such
as those involving accreditation.
"Strategic Alliance Agreement" means that certain agreement to which
these definitions are a Schedule entitled "Strategic Alliance Agreement" by and
between Allscripts and IDX executed or intended to be executed on the Closing
Date.
"Virtual Office Products" means the product currently marketed by IDX
under the name "Virtual Office" which allows for secure messaging, managing
appointments, viewing of personal information, monitoring patient account status
and tasking management.
"Web FrameWork" means the product currently marketed by IDX under the
trademark "IDX Web FrameWork" and as more fully described in the Development
Plan.
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