Exhibit 10.2
CONFORMED COPY
DATA SUPPLY
AND SERVICES AGREEMENT
THIS DATA SUPPLY AND SERVICES AGREEMENT is made and entered into as of
January 6, 2006 (the "Effective Date") by and among NDC Health Information
Services (Arizona) Inc., a Delaware corporation ("Client"), NDCHealth
Corporation, a Delaware corporation ("NDCHealth"), and Per-Se Technologies,
Inc., a Delaware corporation ("Patriot").
RECITALS
Client is in the business of providing data, analytics and information
management support solutions to pharmaceutical manufacturers, Biotechnology
Firms, Medical Device Manufacturers, Wall Street investment and private equity
firms (buy and sell side) for purposes of their pharmaceutical and biotechnology
analysis and governmental payors, enabling them, among other things, to evaluate
performance, develop strategies and optimize their marketing and sales efforts,
rebate spend and clinical trial recruitment efforts (the "IM Business").
NDCHealth is in the business of (i) processing, editing and transmitting
pharmacy and medical data between providers (pharmacy, physician, hospital) and
payers (commercial, non-profit and government) and other parties (government
reporting, etc.), (ii) the development, sale and maintenance of systems for the
pharmacy, high volume (mail order, payers), hospital and physician markets and
claims cash flow management systems for the hospital industry and (iii) the
development, sale, license and conveyance of informatics products to the retail
pharmacy industry, Medical Device Manufacturers (limited to utilization review)
and third-party payers.
Immediately prior to the Effective Date, Client was a wholly owned
subsidiary of NDCHealth. Upon the closing of the transactions contemplated by
that certain Stock Purchase Agreement, dated as of August 26, 2005, by and among
Wolters Kluwer Health, Inc. ("WKHI"), NDCHealth and Client (the "Purchase
Agreement"), WKHI is acquiring, as of the Effective Date, all of the issued and
outstanding equity interests of Client (the "Sale Transaction").
Simultaneously herewith Client and NDCHealth have entered into a Retail
Informatics Supply and Services Agreement (the "RI Agreement") and a
Contribution Agreement (the "Contribution Agreement").
Upon the closing of the transactions contemplated by that certain Agreement
and Plan of Merger (the "Merger Agreement"), dated as of August 26, 2005, by and
among Patriot, and NDCHealth, Royal Merger Co., a Delaware corporation and a
wholly owned subsidiary of Patriot ("Purchaser"), Purchaser will merge with and
into NDCHealth (the "Merger") such that NDCHealth will continue as the surviving
corporation and a wholly owned subsidiary of Patriot following the Merger.
Prior to consummation of the Sale Transaction, NDCHealth provided to Client
data and related support services through intercompany arrangements. The parties
are entering into this Agreement to set forth the terms and conditions pursuant
to which NDCHealth and Patriot shall provide to Client data and related services
after consummation of the Sale Transaction and the Merger.
As an integral part of the long-term commercial relationship contemplated
by this Agreement and as a partial inducement to NDCHealth to enter into this
Agreement, Client has agreed to contemporaneously enter into the RI Agreement.
Capitalized terms shall have the meanings ascribed to them in Section 13 of
this Agreement.
NOW, THEREFORE, for and in consideration of the above premises, the mutual
promises contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. DATA SUPPLY; DE-IDENTIFICATION AND ENCRYPTION; NDCHEALTH CERTIFICATION;
MONITORING
(a) Covered Data. Subject to the terms and conditions of this Agreement,
during the Term, NDCHealth shall deliver Covered Data to Client.
NDCHealth shall provide the Covered Data to Client (or, if requested
by Client, the Permitted Designee) pursuant to the Service Level
Commitments. Patriot covenants and agrees that it shall use
commercially reasonable efforts to enable the delivery of Patriot Data
to Client (or, if requested by Client, the Permitted Designee) via the
NDC Proprietary Network; provided that the parties acknowledge and
agree that (i) on the date hereof, none of the Patriot Data Agreements
allow Patriot to license, transmit or deliver Patriot Data as
contemplated in this Agreement and (ii) in utilizing its commercially
reasonable efforts to enable the license, transmission or delivery of
the Patriot data, Patriot shall not be obligated to agree to pay to
any third party data provider fees for such Patriot Data.
(b) Method and Timing of Delivery. NDCHealth shall deliver the Covered
Data to Client (or, if requested by Client, the Permitted Designee) in
accordance with the Data Transmission Protocol. The Covered Data shall
be deemed delivered to Client when successfully placed on Client's FTP
Server, as evidenced by NDCHealth's FTP server logs.
(c) Alterations to Covered Data and Delivery.
i. Notwithstanding the terms of this Agreement, NDCHealth retains
the right at any time during the Term to alter the content,
format, method or timing of delivery of the Network Data if
NDCHealth determines, in its reasonable discretion, exercised in
accordance with its policies and
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procedures (applied in a non-discriminatory manner with respect
to similar circumstances) that such alteration is required as a
result of (i) changes in the Act or other Applicable Laws, (ii)
the passage of any new Applicable Laws, (iii) the issuance of a
published interpretation of the Act or any other Applicable Law
by a Governmental Body, (iv) the inability of NDCHealth to obtain
Level 1 Certification, or (v) the terms of the Data Agreements
(each of the enumerated items are hereinafter referred to as a
"Data Alteration Event"). If NDCHealth determines any such
alteration is required, NDCHealth will notify Client as soon as
reasonably practicable and provide Client with an explanation of
the reasons for the alteration.
ii. NDCHealth covenants and agrees that it shall use commercially
reasonable efforts to cause the terms of the NDC Data Agreements
first entered into after the Effective Date to permit or, in the
case of NDC Data Agreements that are executory as of the
Effective Date, to continue to permit, NDCHealth to license the
Licensed Data to Client in the manner described in this
Agreement.
iii. NDCHealth covenants and agrees that it shall use commercially
reasonable efforts to ensure that any Informatics Business
Agreements also constitute NDC Data Agreements.
iv. NDCHealth shall use commercially reasonable efforts to provide
Client with sixty (60) days (or such shorter period as is
practicable under the circumstances) advance notice of any
termination or non-renewal of an NDC Data Agreement.
(d) Redelivery; Retention of Data.
i. If any delivery of Delivered Data is damaged or unreadable and
Client notifies NDCHealth thereof in writing within five (5) days
after Client's receipt of such Delivered Data, NDCHealth shall
transmit to Client replacement Delivered Data within two (2) days
of its receipt of written notice from Client.
ii. NDCHealth shall retain the Network Data in its raw format, prior
to encryption and de-identification, for a period of the longer
of six (6) years or such period as may be required by the Act or
other Applicable Laws. If Client desires that NDCHealth retain
the Covered Data for longer periods, Client shall provide
NDCHealth with such a request and NDCHealth shall provide Client
with an estimate of the resulting increase in costs to NDCHealth.
If Client agrees in writing to reimburse NDCHealth an amount
equal to the lesser of such estimated increase in costs and
NDCHealth's actual increase in costs pursuant to Section 6(b)(ii)
of this Agreement, NDCHealth shall extend its retention of the
Covered Data for such longer period.
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(e) License Grant; Support and Maintenance.
i. The parties acknowledge that pursuant to the Contribution
Agreement, NDCHealth has conveyed to Client, subject to the terms
and conditions of the Contribution Agreement, all of NDCHealth's
right, title and interest in and to the Encryption Engine, other
than the Key (as defined in the Contribution Agreement). In
connection with the ownership and license rights set forth in
Section 1.2 of the Contribution Agreement and subject to the
terms and conditions of this Agreement, Client hereby grants to
NDCHealth and NDCHealth hereby accepts a non-exclusive,
fully-paid, world-wide, irrevocable, royalty-free license for the
sole purpose of engaging in the following activities during the
Term: (A) internal use of the Encryption Engine for purposes of
performing its obligations under and pursuant to this Agreement
and the RI Agreement; (B) to perform data restoration as agreed
upon in writing by the parties; and (C) any other use as agreed
upon in writing by the parties. NDCHealth agrees that it shall
not transfer or sublicense any of its rights set forth in this
paragraph except in connection with an assignment of this
Agreement in accordance with Section 12(b).
(f) De-Identification and Encryption of Delivered Data. Before delivering
Covered Data and (to the extent authorized for delivery) Patriot Data
to Client, NDCHealth shall de-identify the Covered Data and Patriot
Data to Level 1 De-Identification and shall utilize the Encryption
Engine to encrypt such Covered Data and Patriot Data.
(g) Data Certification. NDCHealth shall provide Client with Level I
Certifications in accordance with the Data Security Requirements.
(h) DISCLAIMER. CLIENT ACKNOWLEDGES THAT THE COMPLETENESS OF THE DATA
ELEMENTS INCLUDED IN THE DELIVERED DATA IS DEPENDENT ON THE DATA
ELEMENTS INCLUDED IN THE CLAIMS DATA RECEIVED BY NDCHEALTH OR PATRIOT
FROM THE PHARMACIES AND HEALTH CARE PROVIDERS PROVIDING SUCH DATA.
NEITHER NDCHEALTH NOR PATRIOT MAKE ANY REPRESENTATIONS OR WARRANTIES
REGARDING THE DELIVERED DATA, AND HEREBY DISCLAIM ALL IMPLIED
WARRANTIES, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY FITNESS FOR A PARTICULAR PURPOSE, COMPLETEDNESS, AND
ACCURACY.
(i) Discovery of PHI. Client shall notify NDCHealth immediately if Client
becomes aware of (a) any PHI included in the Delivered Data or (b) any
unauthorized access, use, disclosure, modification or destruction of
information or interference in the operation of any information system
maintained by Client containing
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Delivered Data. Following such notice, Client shall consult with
NDCHealth regarding treatment and handling of the Delivered Data
determined to contain PHI and shall destroy all Delivered Data
including PHI in a manner satisfactory to NDCHealth and shall certify
such destruction to NDCHealth in writing.
2. LICENSE TO USE LICENSED DATA; PROHIBITED USES OF COVERED DATA; OWNERSHIP
(a) Licenses.
i. Exclusive License. Subject to the terms, conditions, and
restrictions set forth in this Agreement and any limitations
imposed by Applicable Laws, NDCHealth and Patriot hereby grant to
Client an exclusive, world-wide, non-transferable (except to the
extent this Agreement is transferred in accordance with its
terms) license to the Network Data for use by Client in the IM
Field, for a period of ten (10) years commencing on the Effective
Date in accordance with terms and conditions of this Agreement.
Notwithstanding the foregoing, nothing in this Agreement shall
prohibit NDCHealth or Patriot from continuing to license the
Network Data pursuant to existing NDCHealth or Patriot customer
contracts, including any extensions or renewals thereof.
ii. Non-Exclusive License. Subject to the terms, conditions and
restrictions set forth in this Agreement and any limitations
imposed by Applicable Laws, NDCHealth and Patriot hereby grant to
Client during the Term a non-exclusive, world-wide,
non-transferable (except to the extent this Agreement is
transferred in accordance with its terms) license to the Network
Data for all lawful uses except in the NDC Field.
(b) Scope of Use of Delivered Data.
i. Subject to the restrictions set forth in this Agreement, Client
shall be permitted to use, copy, extract, compile, assimilate,
manipulate, analyze and otherwise process and modify the Licensed
Data and to the extent authorized for delivery the Patriot Data
for purposes of incorporating the Delivered Data into Certified
Products and may license, sublicense, transmit and distribute the
Licensed Data and to the extent authorized for delivery of the
Patriot Data, as incorporated into Certified Products, to third
parties in accordance with the terms of this Agreement.
ii. As a condition to Client's license to any third party of the
Delivered Data, as incorporated into Certified Products, Client
shall first enter into a written agreement with such third party
which contains terms sufficient to restrict such third party's
use of the Delivered Data included in the Certified Products in a
manner consistent with the Data Security Requirements. Such
agreements shall include, without limitation, (a) a
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right for Client to cease providing Certified Products to such
third party if such third party uses the Delivered Data included
in the Certified Products in any manner prohibited by this
Agreement, the Act or other Applicable Laws, (b) an express
obligation not to employ the Delivered Data for any Prohibited
Use, and (c) an express right for Client to audit such third
party on terms consistent with NDCHealth's rights under Section
4(a). Client covenants and agrees that it will audit each such
third party described in this paragraph both on a periodic basis
and upon the reasonable request of NDCHealth and/or Patriot, and
will deliver the results of each such audit promptly to NDC
Health and Patriot.
(c) Certain Covenants. Notwithstanding the licenses granted pursuant to
this Section 2 or any other term of this Agreement, Client covenants
and agrees that it shall not engage, and shall not cause or permit any
Person acting on its behalf or at its direction to engage, at any time
in any Prohibited Use of the Delivered Data. NDCHealth and Patriot
each covenants and agrees that during the Term, it shall not (i) use
the Network Data actually purchased by Client (or, during the first
five (5) years of the Term, actually delivered to Client) to create,
sell or deliver the IM Products in the IM Field, or (ii) license or
sell any Network Data actually purchased by Client (or, during the
first five (5) years of the Term, actually delivered to Client) to the
IM Party for use in the IM Field. Subject to the provisions of the
second sentence of Section 2(a)(i), NDC Health and Patriot each
covenants and agrees that during the first five (5) years of the Term,
NDCHealth shall not use the NDC Proprietary Network, and Patriot shall
not use a like network controlled by Patriot, to process data for use
in the IM Field by any third party and thereafter for the remainder of
the Term for use in the IM Field by the IM Party.
(d) Survival. The licenses granted pursuant to this Section 2 shall
survive the expiration or earlier termination of this Agreement with
respect to Network Data provided to Client before the effective date
of such expiration or termination, provided Client remains in
compliance with all material terms and conditions of this Agreement
applicable to such Network Data and provided further that any such
surviving license shall, in respect of Network Data initially licensed
exclusively, revert to a non-exclusive license six years after the
date of purchase or delivery (whichever is earlier) but in any event
not sooner than the end of the tenth year of the Term.
(e) Ownership of Data. As between the parties, (i) all rights in and to
the Network Data (including, but not limited to, all intellectual
property rights therein) shall remain the property of NDCHealth,
Patriot or such other licensor of the Network Data to NDCHealth or
Patriot, and (ii) all rights in and to the Certified Products
(including, but not limited to, all intellectual property rights
therein) shall remain the property of Client. Client shall acquire no
right, title or interest in or to the Network Data except as otherwise
expressly provided in this Section 2. Nothing in this Agreement shall
be deemed to confer upon NDCHealth, Patriot or any
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other Person any right, title or interest in or to the Client Data
(including, but not limited to, all intellectual property rights
therein) except as necessary to perform NDCHealth's obligations
hereunder. Client Data shall remain the property of Client or such
other licensor of the Client Data to Client.
3. CLIENT CERTIFICATIONS
(a) Security Certifications. Client shall provide NDCHealth with annual
Level II Certifications and an annual Security Certification in
accordance with the Data Security Requirements.
(b) Level II Certification. Prior to any offer for sale, sale, license,
delivery or other conveyance by Client, or by any Person acting on
Client's behalf or at Client's direction, of a Covered Data Product,
Client shall provide NDCHealth with Level II Certifications for such
Covered Data Product in accordance with the Data Security
Requirements.
(c) Level III Certifications. Any material change or modification to (i) a
Certified Product; (ii) the permitted or prohibited uses of a
Certified Product or (iii) any ad hoc or non-standard deliverable or
product that has not received a Level II Certification must be
preceded by a Level III Certification delivered to and approved by
NDCHealth pursuant to this Section 3(c). The implementation of any
material change or modification to a Certified Product or to the
permitted or prohibited uses thereof that has not been preceded by a
Level III Certification delivered to NDCHealth in accordance with the
Data Security Requirements and this Section 3(c) shall result in the
affected Covered Data Product(s) no longer constituting Certified
Products for purposes of this Agreement. For purposes of this
Agreement, any modification to a Certified Product or to its permitted
or prohibited uses shall be deemed material if, in NDCHealth's
reasonable discretion exercised in accordance with NDCHealth's
policies and procedures (applied in a non-discriminatory manner with
respect to similar circumstances), such modification could reasonably
be expected to adversely impact the validity of the Level II or Level
III Certification applicable to such Certified Product.
(d) Form of Certifications. Each Client Certification shall be signed by a
Qualified Statistician reasonably acceptable to NDCHealth. All fees
and expenses incurred by Client in obtaining the Client Certifications
shall be borne by Client.
(e) Additional Certifications. If any third party from which NDCHealth
obtains data that is included within the Delivered Data is entitled,
pursuant to a Data Agreement governing the provision of such data, to
receive certifications, in addition to those set forth in this Section
3, Client shall provide such certifications as a condition to the
inclusion within the Delivered Data of the data provided by such third
party.
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Client may at any time at Client's reasonable discretion, upon ninety (90)
days' prior written notice to NDCHealth, alter any aspects of the policies
and procedures relating to Client's determination of whether to issue a
particular Client Certification; provided that, if at any time during the
90-day notice period set forth in this paragraph, NDC determines, in its
reasonable discretion, that a proposed alteration would not be consistent
with this Agreement (including the Data Security Requirements) the Act,
Applicable Laws or the NDC Data Agreements, Client will refrain from
effecting the proposed alteration until such time as NDCHealth has
consented in writing to the proposed alteration. Client shall promptly
notify NDCHealth upon learning of any unsuccessful, unauthorized, access,
use, disclosure modification or interference with the NDC Proprietary
Network or involving any Network Data.
4. AUDIT RIGHTS AND DATA SUSPENSION
(a) Audit Rights. Subject to the provisions of this Section 4, NDCHealth
may, at any time upon reasonable notice to Client, engage a third
party auditor reasonably acceptable to Client to inspect and audit the
systems, operations, processes, records and leased and owned premises
of Client (or of any Person performing services on behalf of or at the
direction of Client) that relate to or impact in any material respect
the transmission, processing or storage of the Delivered Data or the
sale, license, delivery, distribution or other conveyance of any
Covered Data Product for purposes of confirming Client's compliance
with the terms, conditions and requirements of this Agreement. Client
shall include in its contracts with Persons performing functions on
behalf of or at the direction of Client and lessor of premises to
Client, which functions or premises are within the scope of the audit
rights afforded NDCHealth pursuant to this Section 4(a), terms
requiring such Persons to grant NDCHealth sufficient access to such
Persons' systems, processes, operations, records and premises to
enable NDCHealth to exercise fully its rights hereunder; provided that
Client shall not be required to include in its leases such terms if
Client otherwise has the right to allow NDCHealth access to such
premises. NDCHealth may engage a third party, reasonably acceptable to
Client, to perform audits in accordance with this Section 4(a) on
behalf of NDCHealth, provided (i) such third party is not engaged in a
business that is competitive with the business engaged in by Client
and (ii) such third party enters into a confidentiality or similar
agreement placing reasonable restrictions on such third party's use of
any confidential information of Client obtained by the third party
during its performance of the audit. For purposes of this Section
4(a), "reasonable notice" means notice of at least five (5) calendar
days, or such shorter period that NDCHealth demonstrates it reasonably
requires; provided, however, that NDCHealth shall be permitted to
exercise its audit rights under this Section 4(a) immediately and
without advance notice if the audit pertains to a suspected breach of
the terms of Section 2(a), 2(b) or 2(c) of this Agreement or a
suspected violation of the Act or other Applicable Laws. NDCHealth may
perform an audit under this Section 4(a) no more often than once in
any six (6) month period, except that NDCHealth may perform such
audits more often if the audit pertains to a suspected breach of the
terms of Section 2(a), 2(b) or 2(c) of this Agreement
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or a suspected violation of the Act or other Applicable Laws, or if
otherwise required under the Act or any other Applicable Laws, or if
required by a court or another Governmental Body. Client shall
cooperate, as reasonably requested by NDCHealth, in any audits
performed on behalf of NDCHealth (or by any third party engaged by
NDCHealth) pursuant to this Section 4(a). Any audits performed on
behalf of NDCHealth (or a third party engaged by NDCHealth) pursuant
to this Section 4(a) shall be conducted at the expense of NDCHealth.
During the Term, and for a period of six (6) years thereafter, or for
such longer period as may be required by the Act or other Applicable
Laws, Client shall retain sufficient historical business records, for
a period of at least six (6) years, to evidence compliance with its
obligations under this Agreement, the Act and all other Applicable
Laws. Any notice of NDCHealth's intent to conduct an audit pursuant to
this Section 4(a) shall be provided in writing to an individual
designated by Client to receive such notice, and to Client at the
address specified in Section 12(d) of this Agreement. Any audit
conducted pursuant to this Section 4(a) shall be conducted so as to
minimize any disruption to the conduct of Client's day-to-day
operations to the extent reasonably possible in light of the
circumstances, and otherwise in a commercially reasonable manner.
(b) Data Suspension. If NDCHealth or its auditor determines, in its
reasonable discretion, whether as a result of an audit performed
pursuant to Section 4(a) or otherwise, a Data Alteration Event has
occurred or that any change in Client's transmission, use or storage
of the Delivered Data or any Certified Product (i) constitutes a
breach of the terms of Section 2(a), 2(b) or 2(c) of this Agreement,
(ii) is not in compliance with the Act, other Applicable Laws or the
terms of any Data Agreement, or (iii) poses greater than a Very Small
risk that Delivered Data in a particular Covered Data Category could
be used or disclosed in a manner to identify individuals, NDCHealth
shall immediately notify Client of such determination, and NDCHealth
may, upon delivery of such notice, suspend transmission of all
Delivered Data included in each Covered Data Category which NDCHealth
or its auditor determines, in its reasonable, good faith discretion,
should be suspended in response to such Data Alteration Event or in
order to eliminate such breach, non-compliance or greater risk. In
such event (a "Data Suspension Event"), NDCHealth shall (i) continue
to produce, but withhold delivery of, the Delivered Data included in
each suspended Covered Data Category, (ii) store all Delivered Data
produced during such Data Suspension Event and included in each
suspended Covered Data Category, and (iii) upon a joint determination
by the parties that delivery of the Delivered Data included in a
suspended Covered Data Category may be resumed in compliance with the
Act, other Applicable Laws and the terms of this Agreement and the NDC
Data Agreements, transmit such stored Delivered Data to Client and
resume ongoing delivery of the Covered Data included in such Covered
Data Category. Client shall continue to pay for all Delivered Data
produced during such Data Suspension Event included in each suspended
Covered Data Category on a monthly basis as if such Delivered Data had
been delivered to Client if such Data Suspension Event arises from any
action or failure to act on the part of Client. If
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Client is not required to pay for Network Data pursuant to the
preceding sentence, then upon any such Data Suspension Event, the Data
Providers may sell or license any Network Data subject to such Data
Suspension Event provided that if any third party makes a bona fide
offer to purchase or license such Network Data, Data Provider shall
first offer to Client the right to resume paying for such Network Data
and Client shall promptly notify Data Provider whether it will resume
paying for such Network Data, failing which Data Provider shall be
free to sell or license such Network Data to the third-party offeror.
5. SERVICES
(a) Data Support Services. During the first five (5) years of the Term,
NDCHealth shall make available to Client employees of NDCHealth with
sufficient experience and expertise in operational matters related to
the collection and transmission of the Delivered Data (excluding
certification services, except to the extent such services are
provided pursuant to the Transition Services Agreement) to provide
reasonable data support services to Client. The parties anticipate
that the data support services shall be provided primarily by
telephone and email communications. Notwithstanding the foregoing, if
requested by Client, NDCHealth shall provide the data support services
on-site at Client facilities at Client's cost and expenses (including
reasonable travel expense); provided that Client must provide
NDCHealth with reasonable advance notice of a request for on-site
support. NDCHealth shall cause any of its employees providing Data
Support Services at Client facilities to comply with all rules and
guidelines of Client applicable to conduct in its premises, including
security protocols. NDCHealth shall be responsible for the conduct of
its employees while present in Client facilities and shall take all
reasonable precautions to prevent the occurrence of any injury to
persons or property or any interference with the operations of Client.
(b) Messaging Services.
i. Subject to Applicable Laws, the terms of NDCHealth's agreements
with its pharmacy customers and Client's compliance with the
terms of this Section 5(b), during the Term, NDCHealth shall
continue to allow Client to utilize the NDC Proprietary Network
to provide the Existing Messaging Programs in a manner
consistent, in all material respects (including with respect to
the types, sizes and volume of messages transmitted), with the
manner in which such Existing Messaging Programs were provided
prior to the Effective Date.
ii. In consideration of the use of the NDC Proprietary Network for
the creation and delivery of Existing Messaging Programs and any
additional Messaging products offered by the parties pursuant to
Section 5(b)(iv), the Client shall pay to NDCHealth an amount
equal to one-half of Net Messaging Revenue, and Client shall
simultaneously distribute allocable
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costs in the calculation of Net Messaging Revenue to the party
incurring such costs.
iii. Client represents, warrants and covenants that all Messages
created and delivered by NDCHealth pursuant to this Section 5(b),
the manner of delivery of such Messages (except to the extent
solely determined and controlled by NDCHealth), the delivery
thereof and the use of PHI in connection therewith shall comply
with all Applicable Laws, including without limitation, all
applicable regulations promulgated by the Food and Drug
Administration and all other Governmental Bodies that regulate
the activities relating to such Messages.
iv. If (i) Client requests during the Term that any Existing
Messaging Program or the manner in which NDCHealth creates or
delivers an Existing Messaging Program be modified to include new
features or functionality or that any new or additional Messaging
in addition to the Existing Messaging Programs be developed and
offered, or (ii) changes in technology or Applicable Laws require
or make advisable changes in any such Messaging or the manner in
which NDCHealth creates or delivers such Messaging, the parties
shall negotiate in good faith the terms of any such modifications
or development, including costs, if any, to be charged by
NDCHealth to Client for its modification or development of such
Messaging, and any regulatory or other approvals, licenses or
consents necessary or advisable under Applicable Laws to permit
the creation and delivery of such Messaging as so modified or
developed. If the parties are unable to agree upon the terms of
any such modification or development, NDCHealth shall not be
required to proceed with such modification or development.
v. Client shall use commercially reasonable efforts to utilize the
NDC Proprietary Network for pharmaceutical sponsored letter
programs; provided (i) NDCHealth's price for such services are
competitive and (ii) Client shall offer NDCHealth any business
opportunities related to such programs provided NDCHealth can
match the best price for such product or service being offered
with respect to such pharmaceutical sponsored letter program.
vi. The parties shall, in good faith, cooperate to jointly develop
and commercialize "ePrescribing" products utilizing the NDC
Proprietary Network. To the extent the parties are able to
jointly develop and commercialize any contemplated ePrescribing
products, net revenues attributable to the commercialization of
such ePrescribing products shall be shared equally between the
parties. To the extent the parties are unable to agree upon the
joint development and commercialization of any contemplated
ePrescribing products, either party shall be free to develop
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and commercialize such product independently and without the
participation of the other party.
(c) Destruction and Use of the Key.
i. The parties acknowledge that, as of the Effective Date, Client's
mainframe system located in the Client Data Center includes one
or more copies of the Key. Client shall locate and destroy all
backup and other copies of the Key in the possession of Client or
any of its agents. Client hereby covenants that, from and after
the Effective Date, Client shall not, in any manner or for any
purpose, access or use the Key or permit any other Person to do
so except in accordance with the Escrow Agreement. If Client
becomes aware of any such event it shall notify NDCHealth
immediately.
ii. Except as may be permitted pursuant to the terms of the Escrow
Agreement, NDCHealth acknowledges and agrees that it shall have
no right to transfer, copy, use, license or otherwise dispose of
the Key for any purpose except to the extent necessary to provide
the Key Account Services and to encrypt the Covered Data in
accordance with the terms of this Agreement.
(d) Data Extraction Tool. During the period preceding the Effective Date,
the parties were engaged in an initiative pursuant to which NDCHealth
was developing an extraction tool (the "Extraction Tool") to be
integrated into NDCHealth's Lytec and Medisoft practice management
systems, which tool would enable physician data to be extracted (such
data the "Extracted Physician Data") from data provided by physicians
and relating to such physicians' practices, pursuant to the
physicians' express consent, employing such practice management
systems and delivered to the NDCHealth Proprietary Network for
subsequent use to support certain product offerings of Client. The
parties agree that if they elect, they will continue their respective
efforts with respect to such initiative, including, in the case of
NDCHealth, the further development of the Extraction Tool and in the
case of Client, the payment of $300,000 (the "Extraction Tool
Development Fee") to NDCHealth. In consideration of the development
and implementation of the Extraction Tool, Client may pay to NDCHealth
the Extraction Tool Development Fee promptly after the Extraction
Tool, in a form reasonably acceptable to Client, has been implemented
in a manner reasonably acceptable to Client. The implementation and
rollout of the Extraction Tool and the terms of any use of Extracted
Physician Data in support of Client products shall be subject to terms
agreed upon by the parties, if at all, in writing after the Effective
Date.
(e) Existing PHI Products. The parties acknowledge that, as of the
Effective Date, NDCHealth supports and provides PHI Data Sets for
Client's delivery of the Existing PHI Products pursuant to the PHI
Agreements. Subject to any restrictions or prohibitions that may be
imposed under the Act, other Applicable
12
Laws or the terms of NDC Data Agreements, NDCHealth shall continue to
support and supply PHI Data Sets for the sale of Existing PHI Products
pursuant to and in accordance with the terms of the PHI Agreements, in
a manner consistent with the Service Level Commitments and in
accordance with Section 5(d). If Client desires during the Term, that
NDCHealth support and provide data for New PHI Products in addition to
the Existing PHI Products (or that represent modifications to Existing
PHI Products), or if Client desires to enter into new agreements for
the sale of Existing PHI Products or to amend existing PHI Agreements,
NDCHealth shall cooperate in good faith with Client in such
initiatives, provided that NDCHealth retains the right to decline to
support and provide data for New PHI Products in its reasonable
discretion. Any such additional or modified support and provision of
data that NDCHealth elects to provide shall be on terms agreed upon by
the parties in writing; provided, however, that if the parties are
unable to agree, NDCHealth shall not be required to provide such
additional or modified support and provision of data. Subject to
receipt of appropriate patient authorizations that comply with the Act
and written consents from the appropriate pharmacies, each in form
reasonably satisfactory to NDCHealth, NDCHealth shall cooperate in
good faith with Client regarding the release to Client of data related
to Existing PHI Products and New PHI Products (to the extent NDCHealth
elects to provide such New PHI Products).
(f) Key Account Services. The parties acknowledge that, as of the
Effective Date, NDCHealth maintains and supports a database of PHI
Data Sets in order to provide data products pursuant to the Key
Account Agreements. The parties further acknowledge that compliance
with the Act will require that, as of the Effective Date, products
that are offered pursuant to Key Account Agreements be serviced by
employees of NDCHealth. NDCHealth covenants and agrees that at all
times during the Term, it shall utilize the services of four (4) (or
such other appropriate number as Client may reasonably request)
NDCHealth employees (the "Key Account Personnel") to provide the Key
Account Services. NDCHealth may select the employees to serve in such
functions in its discretion, provided each such employee shall be
reasonably acceptable to Client and sufficiently experienced and
qualified to support the applicable products in a professional and
workmanlike manner. NDCHealth shall charge Client for the services
provided by the Key Account Personnel pursuant to Section 6(b)(i) of
this Agreement. If Client desires that NDCHealth provide additional or
modified data or support with respect to the Key Account Agreements or
the customers thereunder, NDCHealth shall cooperate in good faith with
Client in such initiatives, provided that NDCHealth retains the right
to decline to provide such support and data in its reasonable
discretion (other than renewals of existing Key Account Agreements on
similar terms). Any such additional or modified support and data that
NDCHealth may elect to provide shall be on terms agreed upon by the
parties in writing; provided, however, that if the parties are unable
to agree, NDCHealth shall not be required to provide such additional
or modified support and data.
13
(g) Informatics Products. Subject to timely delivery of the relevant
retail informatics products from Client pursuant to the RI Agreement
(the "Retail Informatics Products"), NDCHealth shall continue to
deliver Retail Informatics Products pursuant to the terms of the
Walgreens Agreement and the Albertson's Agreement in accordance with
the existing terms thereof until the expiration or earlier termination
of the Walgreens Agreement and the Albertson's Agreement,
respectively. In the case of the Walgreens Agreement, (i) NDCHealth
shall invoice Walgreens directly for amounts payable with respect to
the Retail Informatics Products provided pursuant to the Walgreens
Agreement, and NDCHealth shall retain all amounts paid by Walgreens
with respect to such products, and (ii) invoicing and payments with
respect to the Certified Products provided by Client pursuant to the
Walgreens Agreement shall be directly between Client and Walgreens.
Subject to timely delivery of Retail Informatics Products from Client
pursuant to the RI Agreement, in the case of the Albertson's
Agreement, NDCHealth shall continue to deliver the Retail Informatics
Products pursuant to the terms of such agreement, but shall not
receive payment in exchange for providing such products.
(h) Use of NDCHealth Premises by Client Employees. The parties acknowledge
that as of the Effective Date seven (7) employees of Client are
provided with office space at NDCHealth Corporation, NDC Plaza,
Atlanta, Georgia, and one (1) employee of Client is provided with
office space at 6100 South Yale Avenue, Suite 1900, Tulsa, Oklahoma
74136. During the Term, NDCHealth shall continue to allow such Client
employees (or new employees who replace such employees) to occupy and
utilize, without charge, similar office space and facilities at such
premises (or any similar premises to which NDCHealth may relocate
during the Term). Client shall cause its employees occupying such
premises to comply with all rules and guidelines of NDCHealth
applicable to conduct in its premises, including security protocols.
Client shall be responsible for the conduct of its employees while
present in NDCHealth facilities and shall take all reasonable
precautions to prevent the occurrence of any injury to persons or
property or any interference with the operations of NDCHealth.
(i) Serono. NDCHealth and Client shall continue to perform their
respective obligations under the Serono Agreement in accordance with
the terms thereof and in a manner consistent with their practices as
of the Effective Date. All revenues received pursuant to the Serono
Agreement with respect to periods after the Effective Date shall be
shared equally between the parties.
(j) New Services. Client may request from time to time during the Term
that NDCHealth provide to Client New Services in addition to those
described in this Section 5 as required to be provided to Client as of
the Effective Date. By way of example, the parties contemplate that
New Services may include activities related to the (i) transition of
data feeds for certain Client Data to direct data feeds to Client's
Data Center, and (ii) the outsourcing by Client of certain portions of
its information technology infrastructure. NDCHealth shall cooperate
in good faith
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regarding any requests by Client that NDCHealth perform New Services.
The terms and conditions pursuant to which NDCHealth would provide New
Services, including any fees that would be payable by Client to
NDCHealth in consideration of its performance thereof, shall be agreed
upon by the parties in writing prior to the commencement of the
performance of any New Services by NDCHealth; provided, however, that
if the parties are unable to agree on the terms and conditions
pursuant to which NDCHealth would provide any New Services, NDCHealth
shall not be required to provide such New Services.
6. PAYMENTS AND INVOICING
(a) Fees. The parties have agreed to allocate $40,000,000 of the purchase
price paid to NDCHealthpursuant to the Purchase Agreement as partial
consideration for the performance by NDCHealth of its obligations
under this Agreement and the license to the Licensed Data and NDC
Proprietary Network granted to Client hereunder. Client shall pay fees
to the Data Provider as set forth on the Fee Schedule as further
consideration for the performance by the Data Providers of their
obligations under this Agreement and the license to the Delivered Data
and NDC Proprietary Network granted to Client hereunder.
(b) Reimbursement of Costs. Client shall be subject to the following
additional charges (collectively, the "NDC Expenses"):
i. Client shall reimburse NDCHealth for all salary, bonus and
benefits costs incurred by NDCHealth in connection with its
employment of the Key Account Personnel during the Term; provided
that NDCHealth shall consult with Client before paying any bonus
or other compensation other than in the ordinary course of
business.
ii. To the extent NDCHealth agrees, in its discretion, to provide any
modified data or modified services hereunder or any modifications
in the manner in which data or services are provided hereunder,
such modifications shall be agreed upon in writing in advance by
the parties. In addition to the payment to NDCHealth of any fees
that may be agreed upon by the parties in connection with such
modifications, Client shall reimburse NDCHealth for any actual
additional costs incurred by NDCHealth as a result of such
modifications, and shall reimburse NDCHealth for the actual cost
of all travel, travel-related (including food, lodging and
incidental) and out-of-pocket expenses incurred by NDCHealth
employees in performing the Data Support Services at Client
sites, provided in each case that such expenses are reasonable
and evidenced by sufficient documentation provided to Client.
(c) Fees for New Services. Any fees payable by Client to NDCHealth in
connection with NDCHealth's performance of New Services shall be
agreed upon by the parties in writing pursuant to Section 5(i).
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(d) Payment and Invoice. Within fifteen (15) days after the end of each
calendar month during the Term, NDCHealth shall invoice Client for
amounts, if any, that may be due under this Agreement with respect to
such month. Each invoice shall provide in reasonable detail a
breakdown of the amounts invoiced by the categories of fees, NDC
Expenses and New Services, as applicable. Client shall pay to
NDCHealth all invoiced amounts not in dispute within thirty (30) days
of Client's receipt of each invoice.
(e) Withholding of Disputed Amounts. Client shall have the right to
dispute in good faith any amount included in any invoice delivered
pursuant to this Agreement and to withhold from payment of any such
invoice the amount in dispute. If any invoice is disputed, the
undisputed amount shall be timely paid and the parties shall negotiate
in good faith a resolution for the remainder; provided, however, that
if the parties cannot reach agreement on any disputed amount, the
matter shall be resolved in accordance with Section 10 of this
Agreement. If Client disputes the amount of any invoice, it shall
provide NDCHealth with a written notice setting forth the disputed
amount and the reasons therefor. Any deduction of a disputed amount of
an invoice that is not specifically agreed to by NDCHealth in writing
and that finally is determined to have been improperly withheld shall
be paid promptly by Client, plus interest thereon computed at a rate
equal to one-half percent (0.5%) per month of the improperly withheld
amount, accruing from the date when payment was due until the date
paid.
(f) Late Fees. NDCHealth may assess Client a late payment charge on any
amount not in dispute that remains unpaid by Client after it is due,
computed at a rate equal to one-half percent (0.5%) per month of the
unpaid amount accruing from the date when payment was due until the
date paid.
(g) Taxes. Client shall be responsible for all sales, use, transfer,
privilege, excise, charges; surcharges; or other taxes, however
designated, which are levied or imposed by a Governmental Body by
reason of the transactions contemplated hereby, excluding income taxes
which may be levied against NDCHealth.
(h) Audit Rights. Either party may, at any time upon reasonable notice to
the other party, inspect and audit the books and records of such other
party for purposes of confirming the accuracy of amounts invoiced
pursuant to this Agreement (but not more than once in any six month
period) pursuant to this Agreement. Each Party may engage a third
party to perform audits in accordance with this Section 6(h) on behalf
of such party, provided (i) such third party is not engaged in a
business that is competitive with the business engaged in by the party
being audited, and (ii) such third party enters into a confidentiality
or similar agreement placing reasonable restrictions on such party's
use of any confidential information of the audited party obtained by
the third party during its performance of the audit. Audits conducted
pursuant to this Section 6(h) shall be conducted in a manner that does
not unreasonably disrupt or delay such party's business operations and
in compliance with the reasonable security procedures of such party.
The party
16
being audited shall cooperate, as reasonably requested, in any audits
performed by the auditing party (or by any third party engaged by such
auditing party) pursuant to this Section 6(h). For purposes of this
Section 6(h), "reasonable notice" means notice of at least five (5)
calendar days or such shorter period that the auditing party
demonstrates it reasonably requires. Any audits performed pursuant to
this Section 6(h) shall be conducted at the expense of the auditing
party. Each party shall retain sufficient historical business records,
for a period of at least three (3) years, to evidence the accuracy of
the amounts invoiced to the other pursuant to this Agreement during
the Term and for a period of three (3) years thereafter.
7. TERM; TERMINATION AND TERMINATION ASSISTANCE
(a) Term. The term of this Agreement (the "Term") shall begin on the
Effective Date and, unless terminated earlier pursuant to Section 7(c)
or Section 7(d) or extended pursuant to Section 7(b), shall continue
until 12:01 a.m. Atlanta, Georgia time on the twentieth (20th)
anniversary thereof.
(b) Extension of Term. Unless NDCHealth provides written notice to the
Client no less than six (6) months prior to the end of the Term that
NDCHealth will not extend the Term, the parties shall negotiate in
good faith the terms and conditions applicable to, and the duration
of, an extension of the Term. If the parties have not agreed upon the
terms and conditions applicable to an extension of the Term by the
date two (2) months prior to the expiration of the Term, this
Agreement shall expire at the end of the Term.
(c) NDCHealth Rights to Terminate. NDCHealth may terminate this Agreement
immediately upon the occurrence of any one or more of the following
events:
i. Subject to the provisions of Section 6(e), upon Client's
non-payment of amounts owed to NDCHealth or Patriot within thirty
(30) days following an arbitrator's final award in NDCHealth's or
Partriot's favor in accordance with Section 10 of this Agreement;
or
ii. upon (A) the adjudication of Client to be bankrupt or insolvent,
(B) the filing of a petition in bankruptcy or insolvency by or
against Client, or the filing of a petition seeking the
appointment of a receiver with respect to all or a substantial
part of the property of Client, (C) the filing by Client of a
petition seeking reorganization of its debts or financial
structure under a law relating to insolvency or bankruptcy, or
(D) the institution by Client of any proceedings for liquidation
or winding up of its business (other than for purposes of
reorganization, consolidation or merger), provided that Client
shall have sixty (60) days to obtain a stay from or dismiss any
filings under this Section 7(c)(ii) that are commenced by
third-parties.
(d) Client Rights to Terminate. Client may terminate this Agreement
immediately upon (A) the adjudication of NDCHealth to be bankrupt or
insolvent, (B) the
17
filing of a petition in bankruptcy or insolvency by or against
NDCHealth, or the filing of a petition seeking the appointment of a
receiver with respect to all or a substantial part of the property of
NDCHealth, (C) the filing by NDCHealth of a petition seeking
reorganization of its debts or financial structure under a law
relating to insolvency or bankruptcy, or (D) the institution by
NDCHealth of any proceedings for liquidation or winding up of its
business (other than for purposes of reorganization, consolidation or
merger), provided that NDCHealth shall have sixty (60) days to obtain
a stay from or dismiss any filings under this Section 7(d) that are
commenced by third-parties.
8. CONFIDENTIALITY
(a) Definition of Confidential Information. As used herein, the term
"Confidential Information" means information in the possession or
under the control of a party relating to a party's technical,
marketing, product and business affairs, including customer, prospect,
price, and other proprietary and trade secret information, whether
oral, graphic, written, electronic or in machine readable form, and
includes all computer programs (and source code therefor), all amounts
paid or payable to NDCHealth under Section 6 hereof, all information
relating to the payment of such amounts, all proposals, plans,
programs, analyses, compilations, forecasts, studies or other
documents prepared by a party or by them jointly relating to the
subject matter of this Agreement, including the terms of this
Agreement. Confidential Information does not include information which
(i) was in the public domain before disclosure, (ii) becomes part of
the public domain after disclosure by a publication or other means
except by a breach of this Agreement by the receiving party, (iii) was
received from a third party under no duty or obligation of
confidentiality to the disclosing party, or (iv) was independently
developed by the receiving party without reference to Confidential
Information.
(b) Use of Confidential Information. Each party acknowledges that it and
its affiliates, and its or their respective employees, agents and/or
subcontractors, has had prior to the Effective Date, and/or will have
in performing its obligations and/or exercising rights under this
Agreement, access to or be directly or indirectly exposed to
Confidential Information of the other party. Except as may be required
to: (i) facilitate either party's performance of its obligations
and/or exercise of its rights under this Agreement; or (ii) comply
with any applicable law, court order or Exchange Rule, each party
covenants and agrees that it shall hold confidential all Confidential
Information of the other party and shall not use or disclose such
Confidential Information without the express consent of the disclosing
party. Each party shall take reasonable measures and efforts to
provide protection for the disclosing party's Confidential
Information, including measures at least as strict as those the
receiving party uses to protect its own Confidential Information. A
party may disclose Confidential Information of the other party only
with such other party's prior written consent or as otherwise required
by law, court order or Exchange Rule; provided that in each case the
parties shall use all
18
reasonable efforts to limit the disclosure and maintain
confidentiality of such Confidential Information to the extent
reasonably possible. If a party is served with a court or
administrative order requiring any disclosure of the other party's
Confidential Information, or determines that it is obligated to
disclose the other party's Confidential Information pursuant to an
Exchange Rule, the party receiving such order or bound by such
Exchange Rule shall immediately notify the other party in writing of
such service or determination and fully comply with the provisions of
Section 8(c) of this Agreement. Upon termination or other expiration
of this Agreement, all Confidential Information disclosed by a party
to a receiving party shall be returned to the disclosing party or,
upon the request of the disclosing party, shall be promptly destroyed
and certified as destroyed by the receiving party; provided, however,
that any Covered Data shall not be returned or destroyed, but shall be
maintained in accordance with this Agreement. The obligations of the
parties under this Section 8 shall survive the expiration or
termination of this Agreement. Without limiting the generality of this
Section 8, Client covenants and agrees that, except to the extent
expressly required pursuant to law, court order or Exchange Rule, it
shall not, without the prior written consent of NDCHealth, disclose to
any Person that NDCHealth is the source of the Covered Data.
(c) Notice of Orders Requiring Disclosure of Confidential Information.
Each party shall immediately notify the other party in writing of any
subpoena, order (judicial or administrative) or Exchange Rule
requiring disclosure of Confidential Information obtained from the
other party. The party whose Confidential Information is sought to be
disclosed may, at such party's cost, attempt to prevent or limit the
disclosure by appropriate legal means prior to any such disclosure
being made. Each party shall cooperate fully with the other party in
challenging any subpoena, order or Exchange Rule requiring disclosure
of Confidential Information.
(d) Equitable Remedies. The parties acknowledge and agree that irreparable
harm would result to a party upon any breach of the covenants
contained in this Section 8 by the other party and that damages
arising out of such breach may be difficult to ascertain. Therefore,
the parties agree that, in addition to all other remedies provided at
law or in equity, the non-breaching party may seek, without bond, from
a court of law or equity both temporary and permanent injunctive
relief to prevent a breach of any of such covenants.
9. INDEMNIFICATION AND REMEDIES
(a) Obligation to Indemnify. Each party (the "Indemnifying Party") shall
hold harmless, indemnify and defend the other party (the "Indemnified
Party") against all third party claims and shall pay all costs,
damages and attorneys' fees, arising out of or resulting from (i) any
breach by the Indemnifying Party of any of its representations,
warranties, covenants or agreements contained in this Agreement, or
(ii) any breach by the Indemnifying Party of the Act or other
Applicable Laws.
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Each party agrees that the provisions contained in this Section 9
shall survive the termination or expiration of this Agreement.
(b) Indemnification Procedures.
i. Promptly after receipt by any Indemnified Party under this
Section 9 of notice of the commencement or threatened
commencement of any action, proceeding or other claim by a third
party involving a claim in respect of which the Indemnified Party
will seek indemnification, the Indemnified Party shall notify the
Indemnifying Party of such claim in writing and provide to the
Indemnifying Party all reasonably available information
requested. Subject to the provisions of Section 9(c)(iv), no
failure to so notify an Indemnifying Party shall relieve it of
its obligations under this Agreement except to the extent that it
can demonstrate damages attributable to such failure. Within
thirty (30) days following receipt of notice and such reasonably
available information from the Indemnified Party relating to any
claim, but no later than ten (10) days before the date on which
any response to a complaint or summons is due (the applicable
period referred to herein as the "Notice Period"), the
Indemnifying Party shall notify the Indemnified Party in writing
if the Indemnifying Party assumes full responsibility to
indemnify, defend and hold harmless the Indemnified Party and
elects to assume control of the defense and settlement of that
claim (a "Notice of Election"). During the Notice Period, the
Indemnified Party shall use commercially reasonable efforts to
extend the date on which a response to the claim is due until the
Indemnifying Party has provided its Notice of Election. The
Indemnifying Party shall be responsible for all costs and
expenses related to such claim (including reasonable legal fees
and disbursements and reasonable out-of-pocket costs of
investigation and litigation) incurred by the Indemnified Party
("Costs and Expenses") during the Notice Period if the
Indemnifying Party is obligated to indemnify the Indemnified
Party.
ii. If the Indemnifying Party delivers a Notice of Election relating
to any claim within the required Notice Period, the Indemnifying
Party shall be entitled to have sole control over the defense and
settlement of such claim; provided, however, that (i) the
Indemnified Party shall be entitled to participate in the defense
of such claim and to employ counsel at its own expense to assist
in the handling of such claim, and (ii) the Indemnifying Party
shall obtain the prior written approval of the Indemnified Party
before entering into any settlement of such claim or ceasing to
defend against such claim. The Indemnified Party shall not
unreasonably withhold its consent to any such settlement,
provided that it shall be deemed reasonable to withhold consent
if the settlement would cause harm to the reputation of the
Indemnified Party. After the Indemnifying Party has delivered a
Notice of Election relating to any claim in accordance with the
preceding paragraph, the Indemnifying Party shall not be liable
to the
20
Indemnified Party for any legal expenses incurred by such
Indemnified Party in connection with the defense of that claim.
In addition, the Indemnifying Party shall not be required to
indemnify the Indemnified Party for any amount paid or payable by
such Indemnified Party in the settlement of any claim for which
the Indemnifying Party has delivered a timely Notice of Election
if such amount was agreed to without the written consent of the
Indemnifying Party.
iii. If the Indemnifying Party does not deliver a Notice of Election
relating to any claim within the Notice Period, or otherwise
fails to acknowledge its indemnification obligations, the
Indemnified Party shall have the right to defend the claim in
such manner as it may deem appropriate, at the cost and expense
of the Indemnifying Party. The Indemnifying Party shall promptly
reimburse the Indemnified Party for all Costs and Expenses
related to such claim. If no Notice of Election is delivered, the
Indemnified Party may settle any such claim without the consent
of the Indemnifying Party, except that the Indemnified Party must
use reasonable commercial efforts to reduce the amount of any
such settlement. If it is determined that the Indemnifying Party
failed to defend a claim for which it was liable, the
Indemnifying Party shall not be entitled to challenge the amount
of any settlement or compromise paid by the Indemnified Party.
(c) Liability Limitations.
i. In no event shall either NDCHealth or Patriot have any liability,
whether based on contract, tort (including, without limitation,
negligence), warranty or any other legal or equitable grounds,
for any punitive, special, or exemplary loss or damage suffered
by Client arising from or related to this Agreement even if the
party providing the services hereunder is advised of the
possibility of such losses or damages, provided that these
limitations shall not apply to consequential damages or lost
profits. Notwithstanding anything in this Agreement to the
contrary, in no event (1) shall the Data Providers' aggregate
liability with respect to a single event or circumstance giving
rise to a claim for damages by Client exceed $100,000 and (2)
shall the Data Providers' aggregate liability pursuant to this
Section 9 exceed $2,000,000.
ii. Without limiting Client's rights more specifically set forth in
Section 9(a) above, NDCHealth acknowledges that any breach of
this Agreement by NDCHealth will cause Client irreparable harm
the nature of which cannot be measured or remedied by monetary
damages alone and, accordingly, in the event of any breach of
this Agreement by NDCHealth, Client shall be entitled to seek
equitable relief including, without limitation, specific
performance and injunctive relief.
21
iii. Without limiting NDCHealth's rights more specifically set forth
in Section 9(a) above, Client acknowledges that any breach of
this Agreement by Client will cause NDCHealth irreparable harm
the nature of which cannot be measured or remedied by monetary
damages alone and, accordingly, in the event of any breach of
this Agreement by Client, NDCHealth shall be entitled to seek
equitable relief including, without limitation, specific
performance and injunctive relief.
iv. Notwithstanding anything contained herein, in no event shall the
Indemnifying Party be liable for indemnification pursuant to this
Section 9 if the Indemnified Party fails to provide notice to the
Indemnifying Party pursuant to Section 9(b)(i) within two (2)
years after the Indemnified Party obtains knowledge of the event,
act, fact or circumstances giving rise to such claim.
10. DISPUTE RESOLUTION
All disputes arising under this Agreement that the parties' designated
representatives cannot first resolve by negotiating in good faith shall be
resolved by arbitration in accordance with the Commercial Arbitration Rules
(collectively, the "AAA Rules") of the American Arbitration Association.
Arbitration shall be by a panel of three arbitrators experienced in the
matters at issue and selected jointly by NDCHealth and Client in accordance
with the AAA Rules. The arbitration shall be held in such place in
Charlotte, North Carolina as may be specified by the arbitrators (or any
place agreed to by NDCHealth, Client and the arbitrators). The decision of
the arbitrators shall be final and binding as to any matters submitted
under this Agreement and shall not be subject to judicial review. Judgment
on the arbitration award may be entered and enforced in any court having
jurisdiction over the parties or their assets. It is the intent of the
parties that the arbitration provisions hereof be enforced to the fullest
extent permitted by Applicable Laws. All costs and expenses incurred in
connection with any such arbitration proceeding (including reasonable
attorneys' fees) shall be borne by the party against which the decision is
rendered, or, if no decision is rendered, such costs and expenses
(including reasonable attorneys' fees) shall be borne by the party
incurring such costs and expenses. If the arbitrators' decision is a
compromise, the determination of which party bears the costs and expenses
incurred in connection with any such arbitration proceeding shall be made
by the arbitrators on the basis of the arbitrators' assessment of the
relative merits of the parties' positions. Nothing contained in this
Section 10 or elsewhere in this Agreement shall prevent or delay a party
from seeking injunctive relief of any issue for which injunctive relief is
sought by either party hereto.
11. NON-COMPETITION AND NON-SOLICITATION
(a) For a period of five (5) years after the Effective Date, Client shall
not solicit (other than through the use of general employment
advertising where such solicitation is not targeted at NDCHealth's
employees) or hire any employees of NDCHealth without the prior
written consent of NDCHealth; provided, however, that (i) if
22
NDCHealth terminates an employee's employment with NDCHealth, with or
without cause, the foregoing restrictions shall not apply from and
after the date of such employee's termination, and (ii) if an employee
of NDCHealth terminates his or her employment with NDCHealth, Client
may solicit and hire the former employee without the consent of
NDCHealth at any time after twelve (12) months following such
employee's termination from NDCHealth.
(b) In consideration for the licenses granted herein, and in order to
induce the Data Providers to enter into and perform this Agreement and
to ensure that they obtain the benefits they reasonably expect to
obtain hereunder, Client covenants and agrees that for a period
commencing on the Effective Date and ending on the fifth (5th)
anniversary of the Effective Date, Client shall not, directly or
through its Subsidiaries (as such term is defined in the Purchase
Agreement):
(i) engage in, or own an equity or profit interest in any business
which engages in, the provision of those types of products and
services to those markets, in each case set forth on Schedule
11(b), in the United States (collectively, "Restricted
Activities"); provided, however, that it will not be deemed a
breach of this clause (i) if (A) Client and its Subsidiaries
collectively own beneficially or of record in the aggregate less
than five percent (5%) of any class of security which is publicly
traded on a national securities exchange or actively traded in a
recognized over-the-counter market, (B) Client engages in any
activities contemplated or permitted by this Agreement or the
Retail Informatics Data and Services Agreement, or (C) Client or
any of its Subsidiaries acquires (and thereafter, owns and
operates) all or any part of the stock and/or assets of any
company or entity (the "Acquired Business") provided that the
trailing twelve-month revenues derived by the Acquired Business
from Restricted Activities do not exceed twenty percent (20%) of
the total revenues of the Acquired Business during such
twelve-month period, provided that Client sells, transfers or
otherwise disposes of, to any third-party which is not an
Affiliate of Client, that portion of the applicable Acquired
Business or discontinues that portion of the Acquired Business in
its entirety within eighteen (18) months after acquiring the
Acquired Business; or
(ii) induce or attempt to persuade any customer of the Business to
terminate such relationship.
(c) Client expressly acknowledges that (i) each of the covenants contained
in this Section 11 are integral to and in consideration for the Data
Providers' granting of the licenses hereunder and (ii) without the
protection of such covenants, Data Providers would not have entered
into this Agreement, (iii) the value and benefit of the licenses
granted by Data Providers hereunder bears no relationship to the
damages Data Providers may suffer in the event of any breach of any of
the covenants of this Section 11, and (iv) such covenants contain
limitations as to time, geographical area and/or scope of activity to
be restrained which are
23
reasonable and necessary to protect Data Providers' business
interests. If this Section 11 shall nevertheless for any reason be
held to be excessively broad as to time, duration, geographical scope,
activity or subject, it shall be enforceable to the fullest extent
compatible with applicable laws that shall then apply. Client hereby
further acknowledges that money damages will be impossible to
calculate and may not adequately compensate the Data Providers in
connection with an actual or threatened breach by Client of any of the
provisions of this Section 11. Accordingly, Client, on its own behalf
and on behalf of its Subsidiaries, hereby expressly waives all rights
to raise the adequacy of Data Providers' remedies at law as a defense
if either Data Provider seeks to enforce by injunction or other
equitable relief the due and proper performance and observance of the
provisions of this Section 11. In addition, Data Providers shall be
entitled to pursue any other available remedies at law or equity,
including the recovery of money damages, in respect of the actual or
threatened breach of the provisions of this Section 11.
(d) Client hereby expressly waives any right to assert inadequacy of
consideration as a defense to enforcement of the non-competition
covenants in this Section 11 should such enforcement ever become
necessary.
(e) For so long as Client has any continuing obligations pursuant to this
Section 11, any successor by merger to Client or any purchaser,
transferee or licensee of any assets of Client constituting
substantially all of the assets of any reporting segment of Client as
of the date hereof shall assume, perform and otherwise be bound by the
obligations of Client set forth in this Section 11, and Client shall
condition any such sale, transfer or license on the agreement by such
purchaser, transferee or licensee to be bound by the obligations set
forth in this Section 11.
12. MISCELLANEOUS
(a) No waiver, modification or alteration of any of the provisions of this
Agreement shall be binding unless approved in writing by a duly
authorized representative of the party to be so bound. Notwithstanding
any provision of this Agreement to the contrary, the parties agree to
take such action as is necessary to amend this Agreement from time to
time as is necessary for either party to comply with the requirements
of the Act, including the Privacy and Security Rules thereof, as
amended from time to time, and any privacy, security, or other
administrative simplification regulations promulgated pursuant
thereto.
(b) This Agreement may not be assigned (by operation of law or otherwise)
by either party in whole or in part without the prior written consent
of the other party. For purposes of this Section 12(b), a Change in
Control of Client involving a competitor of NDCHealth or Patriot shall
be deemed to constitute an assignment of this Agreement. Neither the
merger of NDCHealth with Royal Merger Co., nor the merger of WKHI with
Client shall be deemed an assignment of this
24
Agreement or any right hereunder. Any assignment in violation of this
Section 12(b) shall be null and void.
(c) This Agreement shall be construed in accordance with the laws of the
State of Georgia, without regard to conflicts of laws provisions.
(d) All notices hereunder shall be in writing and shall be conclusively
deemed to have been received and shall be effective (i) on the day on
which delivered if delivered personally or transmitted by facsimile
transmission, (ii) one business day after the date on which the same
is delivered to a nationally recognized overnight courier service, or
(iii) three business days after being sent by registered or certified
United States mail, return receipt requested, and shall be addressed:
i. If to Client, to:
NDC Health Information Services (Arizona) Inc.
c/o Wolters Kluwer Health, Inc.
530 Walnut Street, 7th Floor
Philadelphia, PA 19106
Attn: Jeffery A. McCaulley
Telephone: 215-521-8503
Facsimile: 215-521-8484
ii. If to NDCHealth, to:
NDCHealth Corporation
c/o Per-Se Technologies, Inc.
1145 Sanctuary Parkway, Suite 200
Alpharetta, Georgia 30004
Facsimile: (770) 237-4323
Attn: General Counsel
ii. If to Patriot, to:
Per-Se Technologies, Inc.
1145 Sanctuary Parkway, Suite 200
Alpharetta, Georgia 30004
Facsimile: (770) 237-4323
Attn: General Counsel
Either party may change its address for notices upon written notice to
the other party.
(e) Nothing in this Agreement shall be construed so as to constitute
Client, NDCHealth or Patriot as joint venturers, partners, or agents
of each other, and
25
neither Client on the one hand nor NDCHealth or Patriot on the other
hand shall have the power to obligate or bind the other in any way
whatsoever.
(f) Neither party shall be deemed in default of this Agreement to the
extent that performance of its obligations or attempts to cure any
breach are delayed, restricted, or prevented by reason of any act of
God or Governmental Body, fire, natural disaster, labor stoppage, the
failure of necessary power systems or connections, or any other act or
condition beyond the reasonable control of the parties, provided that
the party so affected suspends performance only to the extent and for
the duration that is reasonably required by the force majeure event
and uses its commercially reasonable efforts to avoid or remove the
causes of non-performance and continues performance promptly after
those causes are avoided or removed.
(g) Headings and captions throughout this Agreement are inserted only as a
matter of convenience and for reference and they in no way define,
limit, or describe the scope of this Agreement or the intent of any
provision hereof.
(h) While the parties have used their best efforts to ensure that this
Agreement accurately reflects the commitments and undertakings
required of each in order to ensure an orderly transition of the
intercompany relationship of the parties without material disruption
to their respective businesses, they agree to cooperate in good faith
if after the Effective Date either party believes that it is
appropriate for the parties to take further actions or provide further
assurances, as may be reasonably required and agreed upon by the
parties to implement and give effect to the understandings of the
parties set forth herein. Without limiting the generality of the
foregoing, each party shall, at any time and from time to time,
execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered, all such further documents, assurances or
things, and secure all necessary consents, as may be reasonably
required for the more perfect observance and performance by the
parties of the terms of this Agreement.
(i) Time is of the essence with respect the obligations of each of the
parties to this Agreement.
(j) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall
constitute one and the same document.
(k) This Agreement constitutes the entire agreement between the parties
and supersedes all prior agreements, promises, proposals,
representations, understandings and negotiations, whether written or
oral, between the parties respecting the subject matter hereof.
(l) This Agreement shall be binding upon, and inure to the benefit of,
each party's authorized successors and assigns including any
successors or assigns to such
26
party's business and assets.
(m) This Agreement shall not become effective unless and until the Retail
Informatics Agreement is duly executed and delivered by the parties.
13. CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"AAA Rules" shall have the meaning ascribed to such term in Section 10 of this
Agreement.
"Act" shall mean the Health Insurance Portability and Accountability Act of
1996, as amended, and any regulations issued thereunder.
"Agreement" shall mean this Data Supply and Services Agreement and all Exhibits
and Schedules hereto.
"Albertsons Agreement" shall mean that certain Service Agreement by and between
Pharmaceutical Data Services, Inc. and Albertsons, Inc. dated September 15, 1992
as amended by those Addenda dated December 5, 1995, January 27, 1998, and
January 1, 2004.
"Applicable Laws" shall mean all applicable laws (including those arising under
common law), statutes, codes, rules, regulations, reporting or licensing
requirements, ordinances and other pronouncements having the effect of law of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision, including those promulgated, interpreted or
enforced by any Governmental Body.
"Biotechnology Firm" means an entity applying scientific techniques utilizing
living organisms, or substances from such organisms, to manufacture or modify
products for pharmaceutical use or to develop micro-organisms for specific
medical treatments.
"Certified Product" shall mean a Covered Data Product for which a Level II or
Level III Certification has been issued, and has not been revoked, pursuant to
the Data Security Requirements.
"Change in Control" shall mean any of the following, whether in a single
transaction or a series of related transactions: (a) (i) the merger,
consolidation or other business combination of a party with or into another
Person; (ii) the merger, consolidation or other business combination of another
Person with or into a party; or (iii) the acquisition by any Person of any
equity interests in a party, in each case with the effect that, immediately
after such transaction, the shareholders of such party immediately prior to such
transaction hold none of, or less than a majority in interest of, the total
voting power entitled to vote in the election of directors, managers or trustees
of the Person surviving such transaction or less than fifty percent of the
economic interests in such Person, or (b) the acquisition by any Person or
related group of Persons, by way of merger, sale, transfer, consolidation or
other business combination or acquisition of all or substantially all of the
assets, business or properties of a party. Notwithstanding the foregoing,
neither the merger
27
of NDCHealth with Royal Acquisition Corp., nor the merger of WKHI with Client,
shall be deemed to be a "Change in Control" hereunder.
"Client" shall have the meaning ascribed to such term in the Preamble of this
Agreement.
"Client Certification" shall mean any Security Certification, Level II
Certification or Level III Certification.
"Client Data" shall mean data provided to Client pursuant to Client Data
Agreements and processed by NDCHealth using the NDC Proprietary Network and
otherwise in accordance with this Agreement.
"Client Data Agreement" shall mean an agreement among Client and one or more
third parties pursuant to which Client receives from such third party an
electronic record of a single transaction or interaction between one Patient and
one Health Care Provider, or between two Health Care Providers, which record
does not, to Client's knowledge, contain PHI.
"Client Data Center" shall mean the facility owned or otherwise controlled by
Client and dedicated to receiving and processing Covered Data in connection with
the conduct of the IM Business, which facility is, as of the Effective Date,
located at 2394 East Camelback Road, Phoenix, Arizona. Client shall notify
NDCHealth in writing of any change in the physical location of the Client Data
Center.
"Client's FTP Server" shall mean the computer server designated by Client to
receive Covered Data in accordance with the Data Transmission Protocol, which
server is, as of the Effective Date, located at the Client Data Center.
"Confidential Information" shall have the meaning ascribed to such term in
Section 8(a) of this Agreement.
"Contribution Agreement" shall have the meaning ascribed to such term in the
Recitals of this Agreement.
"Costs and Expenses" shall have the meaning ascribed to such term in Section
9(b)(i) of this Agreement.
"Covered Data" shall mean Licensed Data and Client Data.
"Covered Data Category" shall mean a particular type of Delivered Data sharing
one or more common attributes such as the identity of the entity from whom the
Delivered Data is received, a particular discrete item of data (e.g., date of
birth) or other identifiable characteristic.
"Covered Data Product" shall mean any data, report, study, analysis, service or
product that includes, is based upon or derived from (whether alone or in
combination with any other data) any portion of the Delivered Data or any Legacy
Covered Data.
28
"Data Agreement" means any NDC Data Agreement or any Patriot Data Agreement.
"Data Acquisition Costs" shall mean any consideration paid by, or additional
costs (other than costs arising solely in connection with the Service Level
Commitments, Data Security Requirements, Maintenance, Training and Support and
related obligations of the Data Providers under this Agreement) incurred, paid
or otherwise borne by any Data Provider to induce any third party to (i) agree
to renew or extend the term of any Data Agreement or (ii) authorize the license
of any Network Data pursuant to such Data Agreement.
"Data Alteration Event" shall have the meaning ascribed to such term in Section
1(c)(i) of this Agreement.
"Data Providers" shall mean NDCHealth and Patriot.
"Data Security Requirements" shall mean the procedures, certifications and
methods for processing, handling, storing and disclosing PHI Data Sets set forth
in Exhibit D attached hereto.
"Data Suspension Event" shall have the meaning ascribed to such term in Section
4(b) of this Agreement.
"Data Transmission Protocol" shall mean the electronic transmission of Delivered
Data in accordance with the Service Level Commitments.
"Delivered Data" shall mean Network Data and Client Data.
"Effective Date" shall have the meaning ascribed to such term in the Preamble of
this Agreement.
"Encryption Engine" shall mean certain software developed by NDCHealth prior to
the Effective Date and useful for encrypting PHI Data Sets using the advanced
encryption standard, a symmetric algorithm that utilizes block encryption and
meets the requirements of Federal Information Processing Standard 197 as
approved by the United States Department of Commerce, the Encryption Engine
being the Algorithm referred to in Section 1.2(a) of the Contribution Agreement.
"Escrow Agreement" shall mean the escrow agreement among NDCHealth, Client and
Iron Mountain Intellectual Property Management Co., Inc., as Escrow Agent,
entered into pursuant to the Contribution Agreement.
"Exchange Rule" shall mean any rules of any exchange or other trading
environment in which the securities of a party are publicly traded.
"Existing Messaging Programs" shall mean the Messaging products more
specifically described in Exhibit E attached hereto.
29
"Existing PHI Products" shall mean the products provided pursuant to those
agreements, more specifically described in Exhibit G attached hereto.
"Extracted Physician Data" shall have the meaning ascribed to such term in
Section 5(d). "Extraction Tool" shall have the meaning ascribed to such term in
Section 5(d).
"Extraction Tool Development Fee" shall have the meaning ascribed to such term
in Section 5(d).
"Fee Schedule" means the schedule of fees to be paid by Client to NDCHealth set
forth on Exhibit F attached hereto.
"Governmental Body" means any government or governmental or regulatory body
thereof, or political subdivision thereof, whether federal, state, local or
foreign, or any agency, instrumentality or authority thereof, or any court or
arbitrator (public or private).
"Gross Messaging Revenues" shall mean gross revenues received by the parties
from their joint efforts with respect to the provision and sale of
Pharmaceutical Messaging Products provided during the Term.
"Health Care Provider" shall have the meaning ascribed to such term in the Act.
"IM Business" shall have the meaning ascribed to such term in the Recitals of
this Agreement.
"IM Field" shall mean the provision of IM Products to pharmaceutical
manufacturers, Biotechnology Firms, Medical Device Manufacturers and Wall Street
investment and private equity firms (buy and sell side).
"IM Party" shall mean IMS Health Incorporated.
"IM Products" shall mean the types of products set forth on Exhibit H.
"Indemnified Party" shall have the meaning ascribed to such term in Section 9(a)
of this Agreement.
"Indemnifying Party" shall have the meaning ascribed to such term in Section
9(a) of this Agreement.
"Individual" shall have the meaning ascribed to such term in the Act.
"Informatics Business Agreements" shall mean (i) agreements between NDCHealth
and any other Person entered into after the Effective Date which provide for the
delivery to NDCHealth of PHI Data Sets, and (ii) agreements amending agreements
to which NDCHealth was a party prior to the Effective Date which either (x)
include within their scope the delivery, to NDCHealth, of PHI Data Sets or (y)
contemplate, among other things, an amendment providing for the delivery to
NDCHealth of PHI Data Sets.
30
"Informatics Field" shall mean the provision of informatics products derived
from PHI Data Sets to the Retail Pharmacy Industry.
"Key" shall mean the proprietary encryption key useful for both encrypting and
de-encrypting Covered Data processed by the Encryption Engine.
"Key Account Agreements" shall mean the agreements more specifically described
in Exhibit G attached hereto and such other agreements as Client may enter into
after the Effective Date in accordance with Section 5(e) of this Agreement.
"Key Account Personnel" shall have the meaning ascribed to such term in Section
5(f) of this Agreement.
"Key Account Services" shall mean the services required to be provided pursuant
to the Key Account Agreements set forth on Exhibit G.
"Legacy Covered Data" shall mean Covered Data first delivered to Client on or
before the Effective Date.
"Legacy Product" shall mean a Covered Data Product which contains Legacy Covered
Data for which NDCHealth had obtained Level II Certification or Level III
Certification on or before the Effective Date, and which certification remains
valid.
"Level I De-Identification" shall mean de-identification of PHI pursuant to
Level I Certifications.
"Level I Certification" shall mean a certification, made in accordance with
Level I of the Data Security Requirements, including all applicable Privacy and
Security Rules, that Covered Data transmitted to Client is de-identified in
compliance with the Act, including the Privacy and Security Rules.
"Level II Certification" in respect of a Covered Data Product shall mean a
certification, made in accordance with Level II of the Data Security
Requirements, including all applicable Privacy and Security Rules, that applying
generally accepted statistical and scientific methods for rendering information
not individually identifiable, the risk is Very Small that the Delivered Data
included in the Covered Data Product could be used, alone or in combination with
other reasonably available information, by an anticipated recipient to identify
an Individual who is a subject of the information.
"Level III Certification" in respect of any Covered Data Product shall mean a
certification, made in accordance with Level III of the Data Security
Requirements, including all applicable Privacy and Security Rules, that applying
generally accepted statistical and scientific methods for rendering information
not individually identifiable, the risk is Very Small that the Delivered Data
included in the Covered Data Product could be used, alone or in combination with
other reasonably available information, by an anticipated recipient to identify
an Individual who is a subject of the information.
31
"Licensed Data" shall mean data derived from PHI Data Sets provided to NDCHealth
pursuant to NDC Data Agreements and processed by NDCHealth using the NDC
Proprietary Network.
"Medical Device Manufacturers" means a manufacturer of diagnostic and laboratory
products, orthopedic products, surgical devices, cardiac rhythmia management
products, and implantable cardiac defibrillators.
"Messaging" shall mean the delivery of pharmaceutical manufacturer sponsored
textual information to pharmacies using the NDC Proprietary Network.
"Merger" shall have the meaning ascribed to such term in the Recitals of this
Agreement.
"Merger Agreement" shall have the meaning ascribed to such term in the Recitals
of this Agreement.
"NDC Data Agreements" shall mean all agreements between NDCHealth on the one
hand, and Health Care Providers or customers in the Retail Pharmacy Industry, on
the other hand, now existing or hereafter arising from time-to-time during the
Term pursuant to which such third parties agree to provide to NDCHealth, certain
PHI Data Sets and the terms of which NDCHealth has determined, in its reasonable
discretion, permit NDCHealth, to license the Licensed Data to Client in the
manner contemplated by this Agreement.
"NDC Expenses" shall have the meaning ascribed to such term in Section 6(b) of
this Agreement.
"NDC Field" shall mean the provision or delivery of the types of products listed
in:
(i) the Network Services Category, Provider Applications Category, and
Financial Services Transaction Processing Category set forth on
Exhibit I to the Retail Pharmacy Industry, Health Care Providers,
non-governmental third party payers and consumers;
(ii) the Patient Safety and Compliance Category and Other Messaging, Fraud
and Abuse Category, Key Account Agreements, Wall Street and Private
Equity Firms set forth on Exhibit I to Health Care Providers,
non-governmental third party payers and consumers.
(iii) the Information Management Category set forth on Exhibit I to the
Retail Pharmacy Industry and non-governmental third party payers;
(iv) the Longitudinal Record Category set forth on Exhibit I to
non-governmental third party payers and Health Care Providers.
(v) the Private Label PBM, Mail Order and Rebate Capture Category set
forth on Exhibit I to the Retail Pharmacy Industry.
32
"NDCHealth" shall have the meaning ascribed to such term in the Preamble of this
Agreement.
"NDC Proprietary Network" shall mean the proprietary network of computer
software (including NDCHealth's use of the Encryption Engine as authorized in
Section 1(e)(i)(v) of this Agreement), computer hardware, databases and related
processes utilized by NDCHealth to prepare Delivered Data for delivery to
Client.
"NCPDP" shall mean National Council for Prescription Drug Programs.
"Net Messaging Revenues" shall mean, in respect of any fiscal year, Gross
Messaging Revenues in excess of $2,600,000, less that portion allocated to such
excess Gross Revenues with respect to all sales commissions, direct third party
costs incurred in providing Messaging products, (including Existing Messaging
Programs) including payments to pharmacies and other third parties in connection
with their participation in or facilitation of such Messaging products.
"Network Data" shall mean the Patriot Data and the Licensed Data.
"New PHI Products" shall mean modified Existing PHI Products and new products
containing PHI Data Sets all to the extent agreed upon pursuant to Section 5(e)
of the Agreement and required to be provided pursuant to any Key Account
Agreement.
"New Services" shall mean services provided by NDCHealth to Client which
services either (i) were not provided prior to the Effective Date, but are
agreed upon by NDCHealth and Client during the Term and thereafter provided by
NDCHealth to Client, or (ii) constitute a modification of services to be
provided by NDCHealth to Client as of the Effective Date pursuant to Sections
5(a) through 5(i).
"Notice of Election" shall have the meaning ascribed to such term in Section
9(b)(i) of this Agreement.
"Notice Period" shall have the meaning ascribed to such term in Section 9(b)(i)
of this Agreement.
"Patriot" shall have the meaning ascribed to such term in the Preamble of this
Agreement.
"Person" shall mean an individual, corporation, limited liability company,
partnership, trust, association, joint venture, unincorporated organization or
entity of any kind or nature, or a Governmental Body.
"Permitted Designee" shall mean Acxiom Corporation, or such other third party
designated by client from time to time and reasonably acceptable to Patriot,
provided that Acxiom Corporation, or such other designee (as the case may be),
shall have executed and delivered an acknowledgement or similar agreement, in a
form and substance reasonably satisfactory to Patriot, obligating Acxiom
Corporation, or such other designee (as the case may be), to receive and
maintain any Covered Data in a manner compliant with the Act and all Applicable
Law and requiring Acxiom Corporation, or such other designee (as the case may
be), to be subject to and
33
adhere at all times to all confidentiality, privacy and security obligations of
this Agreement, the Act and all Applicable Law (including the implementation of
all policies and procedures) necessary to obtain and maintain the Security
Certification.
"Patriot Data" shall mean data derived from PHI Data sets provided to Patriot
pursuant to Patriot's Data Agreements and processed by Patriot using the NDC
Proprietary Network.
"Patriot Data Agreements" shall mean all agreements between Patriot on the one
hand and Health Care Providers on the other hand, now existing or hereafter
arising from time-to-time during the Term pursuant to which such third parties
agree to provide Patriot certain PHI Data Sets and the terms of which Patriot
has determined, in its reasonable discretion, permit Patriot to license the
Patriot Data to Client in the manner contemplated by the Agreement.
"PHI" shall mean protected health information, as that phrase is defined in the
Act.
"PHI Agreements" shall mean the agreements to provide Existing PHI Products.
"PHI Data Set" shall mean an original electronic record of a single transaction
or interaction (including, among other things, reject and reversal transactions,
hospital transaction data and physician claim data) between one Patient and one
Health Care Provider, or between two Health Care Providers, which record,
immediately prior to encryption and delivery to NDC Health, contains PHI or, if
associated with one or more other PHI Data Sets, could be used to determine PHI.
"Privacy and Security Rules" shall mean the Standards for Privacy of
Individually Identifiable Health Information at 45 C.F.R. part 160 and part 164,
subparts A and E, and the regulations promulgated thereunder; and the Security
Standards at 45 C.F.R. parts 160, 162 and 164, and the regulations promulgated
thereunder, in all cases, as in effect or amended from time to time.
"Prohibited Use" shall mean:
i. any offer for sale, sale, license, delivery, distribution or other
conveyance of any Covered Data Product that does not constitute a
Certified Product at the time of such offer for sale, sale, license,
delivery, distribution or other conveyance;
ii. any use of the Covered Data (whether alone or in combination with any
other data) to identify a pharmacy, hospital, payer or individual;
iii. any attempt, directly or indirectly, to derive PHI from any Covered
Data; and
iv. any offer for sale, sale, license, delivery, distribution, other
conveyance or use of the Covered Data in a manner that violates this
Agreement, the Act or any other Applicable Laws.
"Purchase Agreement" shall have the meaning ascribed to such term in the
Recitals of this Agreement.
34
"Purchaser" shall have the meaning ascribed to such term in the Recitals of this
Agreement.
"Qualified Statistician" shall mean a person with appropriate knowledge of and
experience with generally accepted statistical and scientific methods for
rendering information not individually identifiable.
"Retail Informatics Products" shall have the meaning ascribed to such term in
Section 5(g).
"Retail Pharmacy Industry" shall mean the business of owning or operating
establishments or operations where prescriptions are filled for consumers,
including without limitation, pharmacies, general merchandise stores, hospitals,
long-term care facilities, mail order and specialty operations and future
locations where prescription fulfillment and drug sales to consumers occur.
"RI Agreement" shall have the meaning ascribed to such term in the Recitals of
this Agreement.
"Sale Transaction" shall have the meaning ascribed to such term in the Recitals
of this Agreement.
"Security Certification" shall mean a certification, made in accordance with the
Data Security Requirements, that all access, extraction, compilation,
assimilation, manipulation, analysis and other processing of the Covered Data by
Client, or by any Person acting on Client's behalf or at Client's direction, is
being conducted in compliance with the Act, including the Privacy and Security
Rules.
"Serono Agreement" shall mean that certain Service Agreement dated September 1,
2002 by and between NDCHealth Corporation and Serono, Inc. as amended by the
First Amendment to Service Agreement dated May 28, 2993, Second Amendment to
Service Agreement dated November 3, 2003, Third Amendment to Service Agreement
dated July 18, 2004, and the Fourth Amendment to Service Agreement.
"Service Level Commitments" shall mean the technical, qualitative, quantitative
and other standards and commitments, consistent with the standards and
commitments on the date hereof, examples of which are set forth on Exhibit A
attached hereto.
"Term" shall have the meaning ascribed to such term in Section 7(a) of this
Agreement.
"Transition Services Agreement" shall mean that certain Transition Services
Agreement, dated the date hereof, between NDCHealth and Client.
"Very Small" shall have the meaning given it by the National Institute of
Standards and Technology, or such other standard as may be required from
time-to-time by the Act.
"Walgreens Agreement" shall mean that certain License Agreement dated January 9,
1992 by and between Pharmaceutical Data Services, Inc. as amended by Addenda
dated February 24,
35
1993, May 13, 1993, March 8, 1995, January 8, 1999, July 14, 1999, January 1,
2001, January 1, 2001 and August 20, 2004.
[Signatures on next page]
36
SIGNATURE PAGE
TO
DATA SUPPLY AND SERVICES AGREEMENT
IN WITNESS WHEREOF, the parties hereto, each acting under due and proper
authority, have executed and delivered this Agreement as of the Effective Date.
Joinder for Purposes of Section 11. NDCHEALTH:
By execution below Wolters Kluwer
U.S. Corporation does hereby agree NDCHealth Corporation
that it and its Affiliates are, and
shall be bound by the provisions of
Section 11 hereof and shall be liable By: /s/ Randolph L.M. Hutto
to NDCHealth and Patriot for any ------------------------------------
breach of section 11 by Client, Name: Randolph L.M. Hutto
Wolters Kluwer U.S. Corporation or Title: EVP
any of their respective Affiliates
WOLTERS KLUWER U.S. CORPORATION PATRIOT:
Per-Se Technologies, Inc.
By: /s/ Bruce C. Lenz
--------------------------------
Name: Bruce C. Lenz By: /s/ Philip M. Pead
Title: Secretary ------------------------------------
Name: Philip M. Pead
Title: President
CLIENT:
NDC Health Information Services
(Arizona) Inc.
By: /s/ Randolph L.M. Hutto
------------------------------------
Name: Randolph L.M. Hutto
Title: EVP