CONFIDENTIAL TREATMENT REQUESTED
INFORMATION MANAGEMENT AGREEMENT
BETWEEN
SAINT MARY'S HEALTH NETWORK
AND
DAOU SYSTEMS, INC.
CONFIDENTIAL
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
TABLE OF CONTENTS
1. SERVICE
1.1 SCOPE OF SERVICE
1.2 SUPPLEMENTAL SERVICES
1.3 THIRD PARTY VENDORS
2. PERSONNEL
2.1 EXECUTIVE ADMINISTRATOR
2.2 CONTRACT ADMINISTRATOR
2.3 EXECUTIVE ADMINISTRATOR AND CHIEF INFORMATION OFFICER
2.4 CLIENT MEETINGS
2.5 STATUS OF DAOU AND DAOU EMPLOYEES
2.6 EMPLOYEES
2.7 ***
2.8 ACCEPTANCE OF DAOU EMPLOYEES
2.9 REPLACEMENT OF DAOU EMPLOYEES
3. TERM
3.1 TERM OF AGREEMENT
4. TERMINATION
4.1 TERMINATION OF AGREEMENT
5. SPECIFIC REQUIREMENTS
5.1 SITE VISITS
5.2 ADVERTISING
5.3 EXECUTIVE ADMINISTRATOR VISITS
5.4 OTHER PROJECTS
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
6. FEES
6.1 INFORMATION MANAGEMENT SERVICES
6.2 ANNUAL ADJUSTMENTS
6.3 OUT OF POCKET EXPENSES
6.4 CURRENT WORKLOAD
6.5 PERFORMANCE INCENTIVES
6.6 SUPPLEMENTAL SERVICES
6.7 LONG RANGE PLANNING
6.8 CAPITAL EXPENDITURE FEES
6.9 TAX EXEMPT CERTIFICATE
7. ADDITIONAL CONDITIONS AND PROVISIONS
7.1 NOTICES
7.2 CONFIDENTIALITY OF ENTIRE AGREEMENT
7.3 MISCELLANEOUS
7.4 REMEDIES, WARRANTY, INDEMNITY AND LIMITATION OF LIABILITY
7.5 ENTIRE AGREEMENT
EXHIBIT A INFORMATION MANAGEMENT SERVICES
EXHIBIT B LEVEL OF SERVICE
EXHIBIT C PERFORMANCE CRITERIA
EXHIBIT D INDEMNITY
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
INFORMATION MANAGEMENT AGREEMENT
Agreement made and entered into as of January 1, 1999 by and between Saint
Mary's Health Care Corporation, doing business as Saint Mary's Health Network
(SMHN), a not-for-profit corporation organized and existing under the laws of
the State of Nevada, hereinafter referred to as "Client," and DAOU Systems,
Inc., a Delaware corporation qualified to transact business in the State of
Nevada, hereinafter referred to as "DAOU."
WITNESSETH
WHEREAS, Client presently operates a Healthcare System including acute health
care facilities and physician clinics in Nevada, which are in need of the
services of a company that can manage, maintain, modify and enhance a
sophisticated Corporate Information Services Department and a Telecommunications
Department (not to include the PBX Operators) on a 24 hours a day, seven days a
week, 365 days a year basis; and
WHEREAS, DAOU represents itself as being duly qualified to provide such services
to Client.
NOW, THEREFORE, Client and DAOU, in consideration of the mutual promises and
covenants contained herein, mutually agree as follows:
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1. SERVICE
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1.1 SCOPE OF SERVICE DAOU agrees to furnish Client Information Management
Services for both the CIS Department and the Telecommunications Department (not
to include the PBX Operators), as specifically described in EXHIBIT A which
represents the current services being performed. DAOU and Client may expand
Services provided by DAOU only by execution of amended exhibits signed by both
parties. The level of service, as described in EXHIBIT B, represents the current
level of services being performed and is the basis for the monthly fees provided
for in Section 6.1 If during the term of this Agreement Client requests a change
to the level of service, upward or downward, the total monthly fee shall change
as mutually agreed by the parties.
1.2 SUPPLEMENTAL SERVICES Upon the mutual agreement of Client and DAOU, DAOU
shall provide supplemental services, in addition to those listed in the attached
exhibits, at the supplemental rates set in Section 6.6. Any such supplemental
services shall be in accordance with all terms and conditions of this
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
Agreement. Nothing in this Agreement shall require that either Client or DAOU
agree to any supplemental services.
1.3 THIRD PARTY VENDORS DAOU acknowledges that many of Clients installed
hardware, software and phone systems are governed by existing agreements between
Client and other vendors. DAOU will act on behalf of Client when working with
these vendors and honor in a timely manner all pre-existing contractual
conditions and agreements entered into by Client. Client confirms that all of
the cost increases in these agreements are reflected in the Client's current
operating or capital budget, as applicable, and will be reflected by Client in
future budgets.
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2. PERSONNEL
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2.1 EXECUTIVE ADMINISTRATOR DAOU designates *** as the current Special Projects
Administrator and Executive Administrator for this project, who shall be
responsible for oversight of DAOU's performance and for coordinating with DAOU's
Chief Information Officer (***) with regard to the proper execution of this
Agreement and obligations and duties hereunder. In the event that either the
person identified as the Executive Administrator or CIO does not continue to
serve in his respective position, Client may terminate the Agreement for cause.
Any replacement of either person requires the prior approval of Client.
2.2 CONTRACT ADMINISTRATOR Client shall designate the Chief Financial Officer,
or his designee, as its Contract Administrator for this project. The Contract
Administrator shall be responsible for communicating with DAOU's Executive
Administrator, or his designee, with regard to the proper performance of this
Agreement and the obligations and duties thereunder.
2.3 EXECUTIVE ADMINISTRATOR AND CHIEF INFORMATION OFFICER DAOU will designate,
with prior approval of Client, an Executive Administrator and CIO. The Executive
Administrator will have those duties set forth in Section 2.1 and the CIO shall
be responsible for coordinating DAOU's efforts hereunder and for communicating
with Client's Contract Administrator with regard to the proper performance of
its duties and obligations under this Agreement. 2.4 CLIENT MEETINGS DAOU shall
host semi-annual meetings, which will include Client Contract Administrator. The
purpose of these meetings is to monitor DAOU's performance at Client's site.
2.5 STATUS OF DAOU AND DAOU EMPLOYEES
It is understood that DAOU and its employees and agents will act hereunder as
independent contractors, and DAOU and its employees and agents agree that they
shall not have
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
any claim under this Agreement or otherwise against Client for vacation pay,
sick leave, retirement benefits, social security, workers compensation,
disability or unemployment insurance benefits of any kind. All tax and other
payments required by government bodies and all other benefits shall be the sole
responsibility of DAOU. DAOU and its employees and agents, hereby agree to
perform their work and functions at all times in strict accordance with
currently approved methods and practices and that the sole interest of DAOU is
to ensure that the Client's CIS and Telecommunications Departments shall be
managed in a competent, efficient and satisfactory manner. During the term of
this Agreement or any renewal term, DAOU agrees that its employees and agents
shall abide by Client standards of conduct.
2.6 EMPLOYEES Subject to the exceptions set forth herein, Client shall not hire
DAOU employees during the term or any extension of this Agreement for a period
of *** following the termination of the Agreement. The following exceptions
shall permit Client to hire DAOU employees with the payments noted (as
applicable): ***
2.7 *** In the event that *** Client may terminate this Agreement upon thirty
(30) days written notice to DAOU ***.
2.8 ACCEPTANCE OF DAOU EMPLOYEES Prior to DAOU placing any employee at Client
site, Client's Contract Administrator shall have the right to review candidate's
employment record and qualifications.
2.9 REPLACEMENT OF DAOU EMPLOYEES Subject to the provisions of Sections 2.1 and
2.3, DAOU may temporarily or permanently replace its employees provided it gives
prior notice to Client of its intention to replace such employee.
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3. TERM
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3.1 TERM OF AGREEMENT The initial term of this Agreement shall be for a period
of five (5) years commencing on January 1, 1999 and continuing through December
31, 2003 with an option, by mutual agreement, to extend for an additional one
(1) year thereafter.
4. TERMINATION
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4.1 TERMINATION OF AGREEMENT This Agreement may be terminated without cause upon
either party serving upon the other a written notice of its intent to terminate;
such termination shall be effective ninety (90) days following receipt of such
notice. In the event that either party commits a material breach of this
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
Agreement and fails to cure such breach within thirty days of receipt of notice
of the breach, the Agreement shall be terminated for cause. If DAOU terminates
the Agreement for cause and such termination is disputed by Client, DAOU will
continue to provide to Client the services set-forth in EXHIBIT A and Client
shall continue to pay DAOU its fees and expenses pursuant to this Agreement in a
timely manner; the obligation to provide these services and make such payments
shall last only until conclusion of the dispute resolution proceeding described
in Section 7.3, but in no event shall it exceed ninety (90) days from the date
of notice.
The parties agree that upon termination of this Agreement for any reason DAOU
will assign and the Client will accept assignment of and assume all rights and
obligations under existing agreements and contracts which DAOU entered into and
are contemplated by this Agreement or otherwise approved by Client related to
(i) the Information Management Services as set forth in EXHIBIT A, or (ii)
Client's capital expenditure purchases from or through DAOU, referenced in
Section 6.8 of this Agreement. In the case of such termination, Client will be
charged and/or credited, as applicable, for products/services which have been
prepaid or with deferred billings, respectively, in order to insure that Client
incurs the appropriate benefit/cost of each such products/services. For example,
if DAOU has prepaid a software maintenance fee on an annual basis, Client shall
assume the software maintenance agreement and receive the benefit of the balance
of the software maintenance for the year but shall pay to DAOU the prorated
portion of the maintenance fee for the period after termination of this
Agreement for which Client receives these maintenance services. Similarly, in
the case of a software maintenance agreement with deferred annual billing for
which DAOU may have already been paid by Client as part of the operating budget
pursuant to Section 6.1 of this Agreement, DAOU will credit to Client an amount
reflecting the amounts paid to DAOU for which DAOU has not been billed and
Client will assume responsibility for payment in full of the software
maintenance fee.
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5. SPECIFIC REQUIREMENTS
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5.1 SITE VISITS DAOU shall have the right to six (6) visits per year by
potential DAOU clients. The timing of such visits shall be agreed to in advance
by client. DAOU agrees that such visits shall not interfere with Client's normal
operation and DAOU's performance under this Agreement. Client agrees to use its
best efforts in accommodating DAOU's needs in scheduling such visits.
5.2 ADVERTISING:
DAOU agrees that it will not use Clients name in advertising without prior
approval from Client.
5.3 EXECUTIVE ADMINISTRATOR VISITS DAOU's Executive Administrator will visit
Client at least monthly to ensure Client's satisfaction with DAOU's performance
hereunder
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REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
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5.4 OTHER PROJECTS DAOU will not accept any new business within the Reno Sparks
area without prior approval of Client Contract Administrator during the term of
this Agreement.
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6. FEES
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6.1 INFORMATION MANAGEMENT SERVICES The annual fee for the services to be
performed pursuant to Section 1.1 of this Agreement shall be Seven Million, Four
Hundred and Seventy-Five Thousand, Seven Hundred and Eighty-Two Dollars
($7,475,782) and will be paid in twelve (12) equal monthly installments. The
base management fee is equal to Client's current 1999 operating budget for the
services provided herein less depreciation. The base management fee for
subsequent years shall be adjusted for the addition or deletion of systems
(including any new hardware and/or software applications), as determined by
Client. The monthly payments shall be paid in advance on the first day of each
month, with payment to be received by the fifth (5th) day, PROVIDED, HOWEVER,
that the payment for January, 1999 shall be paid within two (2) days of
execution of this Agreement. If services are paid for by Client, but are not
performed, Client shall be entitled to a credit or return of fees paid related
thereto. If during the term of this Agreement Client requests a change to the
level of service, upward or downward, the total monthly fee shall change as
mutually agreed by the parties.
6.2 ANNUAL ADJUSTMENTS Beginning January 1, 2001, and then each January 1
thereafter, for the term of this Agreement, an annual increase of ***% will be
added to the then current Base Fee for all salaries and wages. In addition,
beginning January 1, 2001, and then each January 1 thereafter, for the term of
this Agreement, for all other components of the base fee other than salaries and
wages, an increase to Base Fee will be made based on the then current Consumer
Price Index.
6.3 OUT OF POCKET EXPENSES Except as otherwise provided herein, out-of-pocket
expenses incurred by representatives of DAOU in connection with this Agreement,
including recruitment and relocation costs, shall be reimbursed by Client.
Out-of-pocket expenses shall not exceed $*** per year unless agreed to in
writing by Client in advance. DAOU shall use best efforts to contain such
expenses and Client reserves the right, after discussion with DAOU's Executive
Administrator to disallow expenses if deemed unreasonable.
6.4 CURRENT WORKLOAD Compensation for services rendered is based on current
workload and number of devices. The number of devices is currently ***. As
numbers of devices (nodes) increase or decrease by increments of ***, contract
fees will be adjusted upward and downward by $*** per month for the remainder of
the Agreement.
6.5 PERFORMANCE INCENTIVES
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
$END
CONFIDENTIAL TREATMENT REQUESTED
The annual incentive fee, based upon successful achievement of the performance
criteria set-forth in EXHIBIT C, may be paid to DAOU on or before March 1 of the
year following DAOU's performance. This fee shall not exceed $***. The incentive
fee may only be used by DAOU to make bonus payments to the DAOU employees
working at Client's site as determined by DAOU's Executive Administrator based
upon the employee's contribution to the achievement of the performance criteria.
In addition, a long term incentive may be paid to DAOU at the end of the initial
Agreement period based upon DAOU's successful implementation of the long range
plan. Determination of the amount paid to DAOU shall be at Client's sole
discretion but shall not exceed $500,000.
6.6 SUPPLEMENTAL SERVICES In the event Client requires and agrees to
supplemental services, DAOU shall be paid at a rate of $*** per person per day,
for supplemental services, as agreed to by Client, plus out of pocket expenses.
6.7 LONG RANGE PLANNING DAOU shall conduct the process to prepare a Long Range
Information Systems Plan covering the initial term of this Agreement. This plan
shall involve key Client personnel, as defined by Client. DAOU will revise this
plan annually in concert with Client, and will provide written status reports
covering progress on the plan together with any major revisions.
6.8 CAPITAL EXPENDITURE FEES In addition to the Base Fee set forth in Section
6.1, above, Client will purchase from or through DAOU all computer hardware,
software, consulting assistance, and provide manpower required for the
installation or maintenance of computer or network systems which historically
were recorded as capital expenditures by Client. The prices to be paid to DAOU
will be mutually agreed to in advance of the contract year in question, with the
first year contract prices being agreed upon by March 1, 1999. All title to
hardware or software shall be in Client's name. DAOU shall be entitled to a
security interest in the hardware and/or software purchased, only to the extent
DAOU has made payment for such hardware and/or software and for which Client has
not paid DAOU. Client shall execute such documentation as DAOU shall reasonably
request to perfect its security interest. All necessary software and licenses
will be executed on behalf of Client by DAOU utilizing a power of attorney
provided to it by Client. Client reserves the right to cancel any purchase
during the contract year as dictated by changes in business conditions, provided
that DAOU is held harmless from and does not incur any loss as a result of
cancellation. Similarly, Client may add purchases during the contract year at
prices and payment terms mutually agreed with DAOU. All cancellations and
additions will be reflected in a revised capital budget for the year in
question.
The parties acknowledge that certain salaries and expenses related to the
implementation of upgrades to software systems or projects of similar scope have
been and will be included in the
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
annual base fee set forth in Section 6.1. Such salaries and expenses will be
deducted in computing the capital expenditure fee(s).
Capital expenditure fees will be paid to DAOU on or before the date DAOU is
required to make payment to the respective vendors. DAOU agrees to use
reasonable commercial efforts to schedule products and systems for delivery as
close to the planned installation schedule as practicable under all facts and
circumstances.
6.9 TAX EXEMPT CERTIFICATE Client will provide DAOU with a tax exempt
certificate with respect to the fees to be paid for products and services under
this Agreement. DAOU shall itemize separately items of software and hardware
purchased on behalf of Client.
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7. ADDITIONAL CONDITIONS AND PROVISIONS
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7.1 NOTICES All notices, consents, approvals, waivers and elections which any
party shall be required or shall desire to make or give under this Agreement
shall be in writing and shall be sufficiently made or given only when mailed by
U.S. mail, certified, return receipt requested, addressed:
TO CLIENT AT: TO DAOU SYSTEMS, INC. AT:
SMHN DAOU SYSTEMS, INC.
1155 West Fourth Street, Suite 216 5120 Shoreham Place
Reno, NV 89503 San Diego, CA 92122
ATTN: RONALD R. LONG ATTN: DAN L. PORTER
or to such other address as any party hereto shall designate by like notice
given to the other parties hereto. Notices, Consents, Approvals, Waivers and
Elections given or made as aforesaid shall be deemed to have been given and
received on the next business day following the date of the mailing thereof as
aforesaid.
7.2 CONFIDENTIALITY OF ENTIRE AGREEMENT DAOU and Client agree that, except as
set forth below, the terms of this Agreement inclusive of dollar amounts, shall
remain confidential and shall not be disclosed directly or indirectly by the
parties, their counsel, agents or employees or so long as they are employed with
the party, except as required to accomplish the matters set forth above, or
where such disclosure is required by law. The parties acknowledge that, as a
public corporation, DAOU is required to disclose publicly the existence of the
Agreement and its material terms and conditions and that the Agreement must be
filed with the Securities and Exchange Commission (the "Commission"). DAOU
intends to apply for confidential treatment of those portions of the Agreement
which qualify for confidential treatment under the rules of the Commission, but
cannot guarantee concurrence of the Commission with DAOU's request.
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REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
7.3 MISCELLANEOUS
A. Confidentiality of Information: DAOU shall not disclose information relating
to Client operations to persons other than members of the Medical Staff, State
Licensing Boards, or Joint Commission on Accreditation of Healthcare
Organizations without written consent of Client, or duly issued Court Process or
Orders. B. Confidentiality of Data: All data on the Client network shall remain
confidential. This provision shall survive the term(s) of this Agreement. C.
Assignability: Neither party may assign or transfer its rights, interests,
obligations, and/or duties under this Agreement without the prior approval of
the other party, which approval shall not be unreasonably withheld. D. Headings:
The headings of the various sections of this Agreement are inserted merely for
the purpose of convenience and do not expressly or by implication limit or
define or extend the specific terms of the section so designated. E. Governing
Law: This Agreement shall be deemed to have been made and shall be constructed
and interpreted in accordance with the laws of the State of Nevada, without
regard to the application of conflict of laws principles. F. No Right to Rely:
Nothing stated herein shall give any person other than Client and it's
affiliates and Clients receiving services hereunder any right to rely on any of
the rights or obligations hereunder and likewise no other person shall be a
third-party beneficiary hereof. G. Existing Laws: This Agreement shall be
constructed to be in accordance with Federal and State Statues. H. Severability:
If any provision of provisions of this Agreement are held to be illegal, invalid
or unenforceable in any respect, such provisions shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provisions never comprised a part hereof, and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or enforceable provision or by their severance
from this Agreement. In the event of any such holding, the parties will
immediately commence negotiations to remedy such illegality or invalidity. I.
Construction: This Agreement shall be construed in its entirety according to its
plain meaning and shall not be construed against the party who provided or
drafted it. J. Notification of Adverse Action: Each party shall notify the other
party in a timely manner of any action or situation that might or will
materially affect the party's ability to carry out its responsibilities under
this contract. K. Waiver: The Waiver by either party of any breach of any
provision of this Agreement or warranty or representation herein set forth shall
not be constructed as a waiver of any subsequent breach of the same or any other
provision. L. Medicare Books and Records: DAOU agrees to make available, upon
request, to the Secretary of Health and Human Services and the Comptroller
General of the United States, or their authorized representatives, successors or
assigns, this Agreement, and all books, documents and records related to the
nature and extent of the costs hereunder for a period of four (4) years after
the furnishing of goods and the costs hereunder for a period of four (4) years
after the furnishing of goods and services. In addition, DAOU hereby agrees that
if services under this Agreement are to be provided by a subcontract with a
related organization not contracting
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directly with Client, DAOU shall require in writing that the subcontractor make
available, upon request, to the Secretary of Health and Human Services and the
Comptroller General of the United States, or their authorized representatives,
successors or assigns, this Agreement, and all books, documents and records
related to the nature and extent of the costs hereunder for a period of four (4)
years after the furnishing of goods and services. If DAOU is requested to
disclose this Agreement or any books or documents or records pursuant to this
paragraph, DAOU shall immediately notify SMHN of the nature and scope of this
request.
M. ADA Compliance: DAOU agrees to uphold and abide by all laws pertaining to
equal access and employment opportunities. These laws include Title VI & VII of
the Civil Rights Act of 1964 as amended, the Age Discrimination in Employment
Act of 1967, as amended, the Age Discrimination in Employment Act of 1975, the
Equal Pay Act of 1963, Section 501 & 504 of the Rehabilitation Act of 1973, the
Civil Rights Act of 1991 and the Americans With Disabilities Act of 1990. DAOU
agrees to offer reasonable accommodation, as required by the law, except where
such accommodation poses an undue hardship to the organization.
N. Dispute Resolution: Any problem or dispute arising under this Agreement
and/or concerning the terms of this Agreement, including those provisions
requiring decisions with the agreement of both parties, shall be submitted to
mediation prior to any action at law or in equity. Such mediation shall be
initiated by either party making a written demand for mediation on the other
party, which demand shall set out the nature and basis of the dispute and relief
sought. The cost of mediation shall be shared equally by the parties, and the
mediation shall be facilitated by a neutral mediator (e.g. JAMS). The parties
will use their best efforts to conclude any such mediation within sixty (60)
days of commencement. If the dispute cannot be resolved by the mediation process
described above, either party may commence an action in the second Judicial
District Court for the State of Nevada. All disputes shall be governed under
Nevada law. O. Ownership: All equipment purchased by DAOU for Client shall be
the sole property of Client. P. Project Delays: If DAOU's ability to perform its
obligations hereunder are materially delayed by virtue of Client's conduct or
demands, DAOU's Executive Administrator and Client's Contract Administrator
shall meet to discuss reasonable additional fees which Client might be required
to pay DAOU based on the actual cost of the delay.
7.4 REMEDIES, WARRANTY, INDEMNITY AND LIMITATION OF LIABILITY Remedies, warranty
terms, indemnity obligations and limitations of liability shall be as set forth
on EXHIBIT D.
7.5 ENTIRE AGREEMENT This Agreement contains the entire agreement between the
parties hereto and supersedes all prior agreements to include the Network
Management Services Contracts executed on May 15, 1995, November 18, 1996, and
November 17, 1997, and including amendments executed on July 15, 1995, April 15,
1996, May 19, 1997 and September 1, 1997. This Agreement may be amended at any
time by mutual agreement of the parties, provided that before amendment shall be
operative and valid, it shall be reduced to writing and signed by an executive
officer of each of the respective parties.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first herein above written.
SAINT MARY'S HEALTH NETWORK DAOU SYSTEMS, INC.
By: ______________________________ By: _______________________________
Jeff K. Bills Georges J. Daou
President and Chief Executive Chief Executive Officer Officer
Officer
WITNESSES:
_________________________________ ___________________________________
(Name and Title) (Name and Title)
_________________________________ ___________________________________
Signature Signature
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REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A
INFORMATION MANAGEMENT SERVICES
***
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REQUEST. REDACTED MATERIAL IS MARKED WITH A*** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B
LEVEL OF SERVICE
***
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REQUEST. REDACTED MATERIAL IS MARKED WITH A*** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C
PERFORMANCE CRITERIA
***
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REQUEST. REDACTED MATERIAL IS MARKED WITH A*** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT D
Remedies, Warranties, Indemnity and Limitation of Liability Additional Terms and
Conditions
***
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REQUEST. REDACTED MATERIAL IS MARKED WITH A*** AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.