[CLAIMSNET.COM LOGO]
Exhibit 10.2
Affiliate and Partner Services and License Agreement
This Affiliate and Partner Services and License Agreement (this "Agreement"),
dated September __, 2002, is made and entered into by and between CLAIMSNET.COM
INC. ("Claimsnet"), a Delaware corporation, and PROXYMED, INC. ("ProxyMed"), a
Florida corporation.
W I T N E S S E T H:
WHEREAS, ProxyMed is in the business of supplying financial, administrative and
other related transaction services to the health care industry (the "ProxyMed
Services"); and
WHEREAS, Claimsnet provides claims submission systems and other related
services, including but not limited to web site development and payer specific
editing and formatting (the "Claimsnet Services") over the Internet; and
WHEREAS, ProxyMed and Claimsnet have agreed to supersede and replace that
certain Affiliate and Partner Services Agreement dated September 11, 2000; and
WHEREAS, ProxyMed and Claimsnet have agreed that Claimsnet will provide certain
Claimsnet Services to ProxyMed, ProxyMed's affiliated payers and partners
(collectively, the "Partners") and ProxyMed's affiliated providers (the
"End-Users"), as requested by ProxyMed;
WHEREAS, ProxyMed and Claimsnet have agreed that ProxyMed will provide certain
ProxyMed Services to Claimsnet, as requested by Claimsnet; and
WHEREAS, ProxyMed and Claimsnet have agreed that Claimsnet will grant ProxyMed a
limited license to its proprietary software;
NOW THEREFORE, the parties hereby agree:
1. Claimsnet Services.
a. Claimsnet will modify the registration and member sites currently being
used by Transferred Customers (as defined in the Asset Purchase Agreement of
even date herewith between Claimsnet and ProxyMed (the "Asset Purchase
Agreement")). Claimsnet clients to a private label branded site that removes the
Claimsnet branding. Additionally, Claimsnet will modify ProxyMed's existing
co-branded registration and member site to remove Claimsnet branding. These new
private label applications will include all the existing edits, functionality,
and back-end output formats currently offered. The one-time charges set forth on
Exhibit A, Section 1(a), shall cover all aspects of this Claimsnet Service.
b. ProxyMed shall have an option to acquire the right to market co-branded
member sites and co-branded registration sites of the Claimsnet Services. If so
elected, Claimsnet will create co-branded member sites in addition to co-branded
registration sites for ProxyMed and those Partners who elect to utilize the
Claimsnet Services. The co-branded member sites will contain the colors
determined by ProxyMed and Partner, and will contain the Partner's logo (subject
to the Partner's consent), and ProxyMed's logo, and shall be in all other
material respects similar to ProxyMed's web site. The charges set forth on
Exhibit A, Section 1(b), shall cover all aspects of this Claimsnet Service.
c. Claimsnet will include direct data entry and online error correction
functionality in the ProxyMed and co-branded member sites at the same time as
such functionality is available on Claimsnet's own member site, however, in any
case the direct data entry product shall be available to ProxyMed no later than
June 1st, 2003. The charges set forth on Exhibit A, Section 1(c), shall cover
all aspects of this Claimsnet Service.
d. Claimsnet will provide Internet claims submission application services for
registered End Users of ProxyMed. Application functionality includes the
application interface and services to submit, review status, and view
acknowledgement and error reports; translation and validation processing; payer
file formatting and data transfer; and receipt and posting of clearinghouse and
payer reports to the End User's specific message center. The charges set forth
on Exhibit A, Section 1(d), shall cover all aspects of this Claimsnet Service.
e. Each payer for which ProxyMed elects to receive claims electronically by
means of the Claimsnet Services will be added to ProxyMed's payer direct table
within the Claimsnet system. Claimsnet will create a record that allows matching
to ProxyMed's payer data set with the associated ProxyMed payer ID numbers, and
configure the Claimsnet system to recognize the payer as valid, utilizing a
ProxyMed default edit set currently in use. The charges set forth on Exhibit A,
Section 1(e), shall cover all aspects of this Claimsnet Service. If so requested
by ProxyMed, Claimsnet will provide technical service personnel to enter into
the system changes to the ProxyMed default edit set or payer-specific edits
which will be used to validate the claims data being sent to ProxyMed. ProxyMed
will provide any necessary information with regard to the edits which are
required. ProxyMed will provide such payer specific edits in a mutually agreed
upon format. The charges set forth on Exhibit A, Section 1(j), shall cover all
aspects of these Claimsnet Services.
f. Claimsnet will transmit claims (excluding errored claims) to ProxyMed, in
the current ANSI 837 format (or other format as mutually agreed upon by ProxyMed
and Claimsnet in writing, and subject to change from time to time by the parties
in writing). The ProxyMed EMC provider number assigned to each End User will be
associated with claims transmitted to ProxyMed. Claimsnet will transmit the
claims file to ProxyMed electronically via the secure transfer method currently
in use (as mutually agreed upon by ProxyMed and Claimsnet in writing, and
subject to change from time to time by the parties in writing). The charges set
forth on Exhibit A, Section 1(f) (or Exhibit A, Section 1(j), in the case of a
requested change in format or transfer method), shall cover all aspects of these
Claimsnet Services.
g. Claimsnet will transmit patient statement files in the format received
from End Users to ProxyMed electronically via a secure transfer method (as
mutually agreed upon by ProxyMed and Claimsnet in writing, and subject to change
from time to time by the parties in writing). The charges set forth on Exhibit
A, Section 1(g) (or Exhibit A, Section 1(j), in the case of a requested change
in transfer method), shall cover all aspects of these Claimsnet Services.
h. Claimsnet will retrieve electronic remittance advices in ANSI 835 format
from ProxyMed via Claimsnet's preferred secure transfer method. Claimsnet will
post the electronic remittance advices to the End User's specific message center
and will allow the electronic download of the electronic remittance advices by
the End User. The charges set forth on Exhibit A, Section 1(h), shall cover all
aspects of these Claimsnet Services.
i. Claimsnet will retrieve ProxyMed electronic reports from ProxyMed via the
secure transfer method currently in use (or as mutually agreed upon by ProxyMed
and Claimsnet in writing, and subject to change from time to time by the parties
in writing) and will post the reports back to the End User's specific message
center. The charges set forth on Exhibit A, Section 1(i) (or Exhibit A, Section
1(j), in the case of a requested change in format or transfer method), shall
cover all aspects of these Claimsnet Services.
j. Claimsnet will provide technical service personnel to perform such other
tasks as may be requested by ProxyMed and mutually agreed upon by ProxyMed and
Claimsnet in writing in order to better serve the End Users. The charges set
forth on Exhibit A, Section 1(j), shall cover all aspects of this Claimsnet
Service.
k. Claimsnet will provide to ProxyMed, as required, access to the payers to
which Claimsnet has electronic connectivity (i.e., the "Gateway Services") for
the processing of claims and patient statements to facilitate an orderly
transition of services for the contracts being assigned by Claimsnet to ProxyMed
pursuant to the Asset Purchase Agreement. The foregoing not withstanding, in no
event shall Claimsnet be required to provide gateway services to ProxyMed for
less than Claimsnet's cost to provide such services. The charges set forth on
Exhibit A, Section 1(k), shall cover all aspects of this Claimsnet Service.
l. Claimsnet hereby acknowledges that ProxyMed intends to establish, at its
own expense, a "hot-site" at which ProxyMed shall provide the hardware, hosting
services and operating system software required to run the "claimsnet.com
application" in its own environment (the "Hot-Site"). In addition ProxyMed shall
bear all communication expenses needed to access the "claimsnet.com" application
on the Colocation Hardware (as defined below) from the Claimsnet facility and
all fees for the use of the Colocation Facility.Claimsnet hereby agrees to
provide application installation and production system migration services (the
"Migration Services") to help ProxyMed establish the Hot-Site. In addition, once
the Hot-Site has been activated, Claimsnet agrees to provide remote
administration services, as defined herein (the "Remote Services") with respect
to the Hot-Site. The Remote Services shall include the following: (i)
Installation by Claimsnet personnel of all the "claimsnet.com application"
software programs required to run the ProxyMed private label versions of the
"claimsnet.com" application onto the ProxyMed hardware (the "Colocation
Hardware") located at the Atlanta, GA Bell South colocation facility (the
"Colocation Facility"); (ii) Claimsnet administering, operating, supporting and
maintaining the "claimsnet.com" application on the Colocation Hardware remotely;
and (iii) Claimsnet processing all of the claims submitted by ProxyMed's
End-Users (including the Transferred Customers) on the private label
applications installed on the Colocation Hardware. The charges set forth on
Exhibit A, Section 1(l), shall cover all aspects of these Remote and Migration
Services.
m. Claimsnet will have the option to refer prospective new End Users who may
be interested in utilizing the Claimsnet Services to ProxyMed in a manner
mutually agreed upon by ProxyMed and Claimsnet. The referral fees set forth on
Exhibit A, Section 1(m), shall cover all aspects of this Claimsnet Service.
2. ProxyMed Services.
a. ProxyMed will process electronic commercial claims submitted by Claimsnet
on behalf of Claimsnet's end users and partners (the "Claimsnet Customers") and
shall pay Claimsnet rebates for such claims. Claims processed by the Claimsnet
system through the member sites of ProxyMed and ProxyMed Partners are
specifically excluded from this section. The rebates set forth on Exhibit B,
Section 1(a), shall cover all aspects of this ProxyMed Service.
b. ProxyMed will process electronic non-commercial claims submitted by
Claimsnet on behalf of Claimsnet Customers. Claims processed by the Claimsnet
system through the member sites of ProxyMed and ProxyMed Partners are
specifically excluded from this section. The charges set forth on Exhibit B,
Section 1(b), shall cover all aspects of this ProxyMed Service.
c. ProxyMed will process paper claims submitted by Claimsnet on behalf of
Claimsnet Customers. Claims processed by the Claimsnet system through the member
sites of ProxyMed and ProxyMed Partners are specifically excluded from this
section. The charges set forth on Exhibit B, Section 1(c), shall cover all
aspects of this ProxyMed Service.
d. ProxyMed will process patient statements submitted by Claimsnet on behalf
of Claimsnet Customers. Statements processed by the Claimsnet system through the
member sites of ProxyMed and ProxyMed Partners are specifically excluded from
this section. The charges set forth on Exhibit B, Section 1(d), shall cover all
aspects of this ProxyMed Service.
3. Transactions; Use of Services.
a. Transactions. As used in this Agreement, the term "Services" shall either
mean the ProxyMed Services or the Claimsnet Services, or both, depending on the
context; and "Transaction Specifications" shall mean with respect to a party
that party's Transaction specifications, data format and certification
requirements and instructions, and payer data format and technical requirements.
Each party shall provide its respective Services in connection with one or more
of the following "Transactions": Commercial electronic claims processing,
non-commercial electronic claims processing, electronic remittance advice
transmission, paper claims processing, and patient statements. Each party
acknowledges with respect to Transactions submitted by it to the other party
that: (i) the other party's Services will reject any Transaction that fails to
meet applicable Transaction Specifications (a "Non-Conforming Transaction") and
(ii) each recipient of the Transactions through the other party's Services has
the right to reject any Non-Conforming Transaction.
Each party reserves the right from time to time in its sole and exclusive
judgment without liability to the other party or the other party's applicable
customers, Partners or End-Users to suspend, revise, modify or update any part
of the Services upon reasonable advance written notice to the other party.
However, the parties agree to work together in good faith to accommodate
regulatory or payer changes that necessitate modifications to the Services, any
Transaction, or any applicable Transaction Specifications. Moreover, the parties
agree to conform to changes in the Transaction Specifications for the applicable
Services within fourteen (14) days after notice from the other party or within
such shorter period of time as mandated by a payer.
b. Use of Services. Each party shall use the other party's system, Services,
and Transaction Specifications only in accordance with this Agreement and shall
provide the other party with adequate information and cooperation and the
necessary data in the proper format (as reasonably determined by the party) to
enable the first party to properly furnish its Services. Each party agrees to be
bound, to the same extent as the other party, by all applicable payer-imposed
contractual obligations required for access to such payer. Each party
acknowledges and agrees that, from time to time, such party may be required to
give its written acknowledgment of certain payer-imposed obligations and/or to
notify its customers or End-Users and obtain their written acknowledgment of
same. This Agreement shall be subject to any payer-imposed obligation or any
other form of requirement imposed by any payer on a party. Each party shall make
no statement, representation or warranty to any of its customers, End-Users or
any other third party regarding the other party's system, Services, or
Transaction Specifications that derogates from the representation, disclaimers
or liability limitations made by the other party in, or otherwise is
inconsistent with, this Agreement.
c. No Obligation to Use Services. Claimsnet hereby acknowledges that ProxyMed
may migrate the Transferred Customers off of Claimsnet's hosted system and onto
the Hot-Site in ProxyMed's sole discretion; provided, however, notwithstanding
any such migration, until the occurrence of an Escrow Release Event (as defined
below), ProxyMed shall be obligated to pay any of the applicable service fees
provided for herein, in addition to the Remote Services fee, with respect to the
servicing by ProxyMed of any of its End-Users (including Transferred Customers)
using the "claimsnet.com application", whether through Claimsnet's hosted system
or the Hot Site.
4. Customer Support. Claimsnet will provide training and customer support to
ProxyMed for the Claimsnet Services. The charges set forth on Exhibit A, Section
2, shall cover all aspects of the Claimsnet customer support. The parties agree
that ProxyMed will provide all setup, mapping, training, and customer support to
ProxyMed End Users and Partners.
ProxyMed will provide customer support to Claimsnet for the ProxyMed
Services. The charges set forth on Exhibit B, Section 2, shall cover all aspects
of the ProxyMed customer support.
5. Grant of Limited License.
a. Claimsnet hereby grants to ProxyMed a limited, royalty-free,
non-transferrable (other than to a Buyer Assigneee (as defined in the Asset
Purchase Agreement)), non-exclusive license to use and market the private label
version of the "claimsnet.com application" proprietary software (the "Licensed
Technology") solely in connection with the provision of the Claimsnet Services
to ProxyMed's End Users (including the Transferred Customers) through the Hot
Site, in accordance with the terms of this Agreement (hereinafter, the
"Technology License"). The parties agree that the Technology License shall
include a limited right of sublicense pursuant to which ProxyMed shall have the
right to sublicense the Licensed Technology to the extent necessary to provide a
customized application interface to subscribing Customers or End Users, which
sublicense shall be governed by a form of agreement to be mutually agreed
between Claimsnet and ProxyMed. Notwithstanding anything herein to the contrary,
the Technology License shall be terminable by Claimsnet upon the occurrence of
an event of default by ProxyMed pursuant to Section 13 of this Agreement.
b. Upon the occurrence of an Escrow Release Event, Buyer's obligations to pay
any of the service fees provided for herein incurred from and after the date of
such Escrow Release Event shall terminate and the Technology License shall be
automatically amended to become a perpetual, fully-paid, non-exclusive,
royalty-free, non-transferrable (except to a Buyer Assignee that agrees in
writing to be bound to the terms of this Agreement) license to use the Licensed
Technology and to use, modify, maintain and update the source code for the
Licensed Technology in such manner as may be necessary or appropriate to enable
ProxyMed to use the Licensed technology for its intended purposes; provided,
however, ProxyMed may only use the Licensed Technology to provide services to
any End-User or Partner (including that Partner's end-users) then using the
Licensed Technology.
c. ProxyMed shall use its best efforts to market and promote the Claimsnet
Services, and shall, at all times, act in good faith in the performance of the
Agreement and shall not delay or otherwise forestall any sales of Claimsnet
Services in anticipation of Escrow Release Event.
6. Title. The parties agree that, as between ProxyMed and Claimsnet, (i)
Claimsnet shall have sole and exclusive ownership of, and all right, title, and
interest in and to, the Claimsnet Services, its systems, and its Transaction
Specifications, including documentation, all copies of all or portions of
Claimsnet's other services or their documentation, and all modifications and
enhancements to the Claimsnet Services, Claimsnet's other services or their
documentation (including ownership of all copyrights and other intellectual
property rights), and (ii) ProxyMed shall have sole and exclusive ownership of,
and all right, title, and interest in and to, the ProxyMed Services, its
systems, and its Transaction Specifications, including documentation, all copies
of all or portions of ProxyMed's other services or their documentation, and all
modifications and enhancements to the ProxyMed Services or ProxyMed's other
services or their documentation (including ownership of all copyrights and other
intellectual property rights). The web sites, address (URL's) and other property
created by Claimsnet pursuant to this Agreement shall belong solely to
Claimsnet.
7. Intellectual Property. Neither party shall use the other party's logos,
including possibly trademarks, trade names or other intellectual property (the
"Logos"), except as agreed in advance in writing by the parties. If a party
consents to the use of its Logos, the other party shall not use the Logos in any
way, or otherwise make any representation, whether oral or written, that might
confuse, mislead or deceive the public, that might be detrimental to the Logos,
good name or slogans of the other party, or otherwise that might imply or
suggest a relationship other than that of independent contractors, as set forth
in this Agreement. If a party consents to the use of its Logos by the other
party, the other party agrees that it will in no way modify, alter, conceal,
remove or make any other modification to any Logos of the other party. Each
party acknowledges and agrees that it has no right, title, or interest in any
Logos of the other party. Each party's limited right to use the other party's
Logos shall cease upon termination of this Agreement or otherwise upon five (5)
days prior written notice from the other party if, in the reasonable judgment of
such party, the other party is not using its Logos in conformity with the
provisions of this Section 7 and such non-conforming use shall not, in the
reasonable judgment of the party who owns such Logos, have been cured within
such five-day period.
8. Online Agreement. The provisions of this Agreement are in addition to the
provisions that each End User agrees to by way of enrollment and acceptance of
the online agreement which shall be in a form mutually acceptable to the parties
hereto (the "Online Agreement"). The parties agree to use best efforts to agree
on a final form of Online Agreement as soon as practicable after the date
hereof. It is understood that the Online Agreement shall not govern or control
any aspect of the relationship between ProxyMed and Claimsnet, that the Online
Agreement is attached hereto for informational purposes only, and that each and
every End User is free to accept or reject the terms and conditions of such
Online Agreement in their own discretion. End Users that reject the terms and
conditions of the Online Agreement will not be authorized to utilize the
Claimsnet Services.
9. Term and Termination. This Agreement is effective as of September 1, 2002 and
shall continue for a period of five (5) years, unless otherwise terminated in
accordance with this Agreement. This Agreement shall automatically renew for
additional one (1) year periods, unless either party shall notify the other
party in writing of its intention not to renew this Agreement at least 180 days
prior to the date that this Agreement would otherwise renew, or unless
terminated earlier by either party in writing in accordance with this Agreement.
10. Service Level Agreements. Claimsnet agrees to adhere to the Service Level
agreements as stated in Exhibit D of this agreement.
11. Protection of Business. Pursuant to Section 6.7 of the Asset Purchase
Agreement, the parties hereto shall enter into an escrow agreement at ProxyMed's
expense, permitting access by ProxyMed to the Deposit Materials (as such term is
defined in the Preferred Escrow Agreement of even date herewith by and among
Claimsnet, ProxyMed and DSI Technology Escrow Services, Inc.) for the Licensed
Technology in the event that Claimsnet (a) voluntarily files a Chapter 7
bankruptcy case under Title 11, United States Code, or (b) has an involuntary
petition for a Chapter 7 case under Title 11, United States Code filed, which is
not either dismissed or converted to a Chapter 11 case within sixty (60) days
after the involuntary case was filed, or (c) announces publicly or in writing to
one or more customers that it will permanently cease to support the
"claimsnet.com" application, or (d) has an involuntary petition for a Chapter 11
case under Title 11, United States Code filed, which is not dismissed within
sixty (60) days after the involuntary case was filed (each, an "Escrow Release
Event"), so that ProxyMed can support Partners and End Users in accordance with
Section 5 of this Agreement with the same functionality and service that
Claimsnet supported; provided that such access shall be permitted only if
ProxyMed is not otherwise, or becomes otherwise, in default under this
Agreement.
12. Representations and Warranties. Each party warrants (i) that the Services
provided and the Transactions processed and delivered under this Agreement, in
each case by such party, will be effected in a competent and professional
manner; (ii) that the Services to be provided by such party will be provided and
the Transactions to be processed and delivered by such party, will be processed
and delivered substantially in accordance with the Transaction Specifications;
and (iii) that all Transactions it submits to the other party shall be valid,
complete, true and accurate. The party providing such warranty (the "Warranty
Party") will use commercially reasonable efforts to (i) recreate any affected
Transaction data or files; (ii) repair the Warranty Party's Services to remedy
any reproducible error; or (iii) in the case of transmission errors, retransmit
the faulty Transactions, in each of the foregoing, upon written notice to the
Warranty Party by the other party thereof within ninety (90) days from the
Warranty Party's breach of warranty. Each party's Customers, End-Users or
Partners, as applicable, are not intended nor implied third party beneficiaries
under this Agreement.
13. Default and Remedies.
a. Either party will be in default upon (1) non-payment of any amount due
under this Agreement and the continuation of nonpayment for a period of ten (10)
days after written notice of non-payment has been given to the breaching party;
(2) failure in any material respect to perform any obligation or breach of any
warranty or representation in this Agreement, and the continuation thereof, for
a period of thirty (30) days after written notice of such failure or breach; or
(3) dissolution, insolvency, appointment of a receiver, trustee, conservator or
guardian, assignment for the benefit of creditors, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against the defaulting
party.
b. In the event of default, the non-defaulting party may recover damages
and suspend or terminate this Agreement or any Services, and be entitled to any
other remedy existing at law or in equity, except as expressly limited herein.
c. All remedies are cumulative and may be pursued concurrently or
separately. Pursuit of one remedy is not an election of remedies or a waiver of
another remedy. Delay or failure to pursue a remedy will neither waive the
remedy nor modify the terms of this Agreement.
14. Patient Identifiable Information. Each party agrees to treat as strictly
confidential all "protected health information" ("PHI") (as defined under HIPAA)
in accordance with the applicable state and federal laws and regulations,
including the Health Insurance Portability and Accountability Act of 1996, as
amended, and any regulations promulgated thereunder ("HIPAA"). . Each party
acknowledges that it is aware, and will advise its representatives who are
informed of the matters that are the subject of this Agreement, that the laws of
the United States and of individual States prohibit any person who has received
PHI from using or further disclosing such PHI other than as permitted or
required by this Agreement or as permitted or required by law. Each Party may
use such PHI (i) for the proper management and administration of its respective
business or; (ii) to provide data aggregation services relating to the health
care operations of the other Party; or (iii) as required or permitted by law.
Each party shall (i) use appropriate safeguards to prevent use or disclosure of
PHI other than as provided for by this Agreement; (ii) report to the other party
any use or disclosure of PHI not provided for by this Agreement of which it
becomes aware; (iii) ensure that any agents, including a subcontractor, to whom
it provides PHI agrees to the same restrictions and conditions that apply to
each party with respect to such PHI; (iv) to the extent it exists and is
accessible make available PHI in accordance with 45 CFR 164.524; (v) to the
extent it exists and is accessible make available PHI for amendment and
incorporate any amendments to PHI in accordance with 45 CFR 164.526; (vi) to the
extent it exists and is accessible make available the information required to
provide an accounting of disclosures in accordance with 45 CFR 164.528; (vii) to
the extent required by law make its internal practices, books, and records
relating to the use and disclosure of PHI received from the other party, or
created or received by one party on behalf of the other party, available to the
Secretary of the United States Department of Health and Human Services for
purposes of determining the other party's compliance with 45 CFR 164.504(e); and
(viii) at the termination of this Agreement, if feasible, return or destroy all
PHI received from the other party, or created or received by each party on
behalf of the other party, that each party still maintains in any form and
retain no copies of such PHI or, if such return or destruction is not feasible,
extend the protections of this Agreement to the PHI and limit further uses and
disclosures to those purposes that make the return or destruction of the PHI
infeasible.
15. Confidential Information.
a. All proprietary information (other than PHI, which shall be protected in
accordance with HIPAA) disclosed by either party to the other in connection with
this Agreement ("Confidential Information"), shall be protected by the recipient
party from disclosure to others. All standard software logic provided by either
party under this Agreement is herein identified as proprietary to the disclosing
party and may not be copied or used in any way other than as specifically
authorized in this Agreement. Any software or data and related documentation
furnished by either party in connection with this Agreement is identified as
proprietary to the disclosing party, but may be retained by the receiving party
until performance under this Agreement is completed or until this Agreement is
terminated, at which time all proprietary information previously disclosed, and
all copies thereof, shall be returned to the respective disclosing party upon
request. Except as specifically set forth herein, neither party grants any
rights to or in any of such party's Confidential Information.
b. ProxyMed and Claimsnet each acknowledges that all Confidential
Information disclosed by either party to the other party, or which comes to the
attention of one of the parties, its employees, officers, and agents,
constitutes a valuable asset. Therefore, ProxyMed and Claimsnet agree to hold
such information in confidence and shall not, except in the performance of the
duties under this Agreement or with the express prior written consent of the
other party, disclose or permit access to any such information to any person,
firm or corporation other than persons, firms or corporations authorized by the
disclosing party, and ProxyMed and Claimsnet shall cause their officers,
employees, agents, and representatives to take such action as shall be necessary
or advisable to preserve and protect the confidentiality of such information.
Both parties hereby covenant to immediately notify the other of any known breach
of disclosure in connection with the other's Confidential Information and to
provide reasonable assistance to the other in remedying the breach or mitigating
the resulting damages. The foregoing notwithstanding, the parties' obligations
under this Section 12 shall not apply to information supplied that (i) is or
becomes available to the public through no wrongful act of the receiving party;
(ii) is known to the receiving party through no wrongful act of the receiving
party or a third party of which the receiving party is aware prior to the
receipt thereof from the disclosing party; (iii) is received from a third party
without restriction; (iv) is disclosed pursuant to a requirement or request of a
government agency; or (v) is independently developed by the receiving party.
16. Limitation of Liability/Recovery.
a. THE PARTIES' ONLY REPRESENTATIONS AND WARRANTIES ARE THOSE SET FORTH IN
SECTION 12 OF THIS AGREEMENT, AND BOTH PROXYMED AND CLAIMSNET EXPLICITLY
DISCLAIM ALL OTHER EXPRESS OR IMPLIED WARRANTIES, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE IN CONNECTION
WITH THAT PARTY'S SYSTEM, SERVICES, TRANSACTION SPECIFICATIONS OR THIS
AGREEMENT. NEITHER PARTY WARRANTS THAT ITS SYSTEM, TRANSACTON SPECIFICATIONS OR
SERVICES WILL MEET THE OTHER PARTY'S OR ANY OF ITS CUSTOMERS, END-USERS' OR
PARTNERS' REQUIREMENTS OR OPERATE UNINTERRUPTED OR ERROR FREE.
b. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR LOSS OF PROFIT,
OR FOR SPECIAL OR CONSEQUENTIAL DAMAGES, OR FOR ANY OTHER INDIRECT DAMAGES, EVEN
IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. In no event will
EITHER PARTY be liable TO THE OTHER for loss or damages resulting, directly or
indirectly, in whole or in part, from errors, omissions, insolvency or other
fault or circumstance attributable to any third party. THE FOREGOING EXCLUSION
OF LIABILITY REPRESENTS THE ALLOCATION OF RISK OF FAILURE BETWEEN THE PARTIES AS
REFLECTED IN THE PRICING HEREUNDER AND IS AN ESSENTIAL ELEMENT OF THE BASIS OF
THE BARGAIN BETWEEN THE PARTIES.
c. EITHER PARTY'S AGGREGATE LIABILITY UNDER THIS AGREEMENT (OTHER THAN FOR
FEES THEN-OWING) AND WITH RESPECT TO EACH PARTY'S SERVICES AND MATERIALS
FURNISHED HEREUNDER (WHETHER UNDER CONTRACT, TORT OR ANY OTHER THEORY OR LAW OR
EQUITY) SHALL NOT EXCEED UNDER ANY CIRCUMSTANCES, WITH RESPECT TO EACH PARTY,
SEVEN HUNDRED THOUSAND DOLLARS (US$700,000). THE FOREGOING LIMITATION OF
LIABILITY REPRESENTS THE ALLOCATION OF RISK OF FAILURE BETWEEN THE PARTIES AS
REFLECTED IN THE PRICING HEREUNDER AND IS AN ESSENTIAL ELEMENT OF THE BASIS OF
THE BARGAIN BETWEEN THE PARTIES.
d. Notwithstanding the foregoing, no limitation of damages contained in this
Agreement shall apply to or in any manner limit any action based on a party's
infringement of a third party's U.S. intellectual property rights (such as,
copyrights, trademarks, service marks, trade names or other proprietary rights)
with respect to the Services.
e. Due to the nature of the services being performed by the parties, it is
agreed that in no event will a party be liable for any claim, loss, liability,
correction, cost, damage or expense otherwise caused by its performance or
failure to perform hereunder which is not reported by the other party within
twelve (12) months of such failure to perform.
17. Mutual Indemnification Rights.
a. Each party hereby agrees to indemnify, save and hold the other party
harmless from and against any loss, claim, demand, action or expense (including
reasonable attorneys' fees) (singularly or collectively, a "Claim") arising out
of any third party demands asserted against the other party to the extent that
such a Claim is based upon a breach of any of the first party's obligations
under this Agreement, or pertains to the infringement of U.S. copyrights,
trademarks, or patents arising from the other party's use, as authorized by the
first party, of its system, Transaction Specifications, Services or any
proprietary programs supplied by the first party for the other party's use under
this Agreement.
b. The indemnification obligations contained in Section 17(a) shall be
conditioned upon the indemnifying party's receiving: (i) prompt written notice
of any Claim for which indemnification is sought, (ii) full control of the
defense or settlement of that Claim, and (iii) reasonable cooperation in the
defense or investigation of that Claim by the party seeking indemnification. The
party seeking indemnification shall have the right to participate in the defense
of the Claim at its option and expense. Should the indemnifying party fail to
honor a timely request for indemnification, then the indemnified party shall be
entitled to all costs (including reasonable attorneys' fees) incurred in the
enforcement of the right of indemnification hereunder when such enforcement
results in a legal judgment in its favor or an acknowledgment by the
indemnifying party that the claimed indemnification is valid in a settlement of
such Claim.
c. No compromise or settlement of a Claim may be effected by the
indemnifying party without the indemnified party's written consent, unless (i)
there is no finding or admission of any violation of law or any violation of the
rights of any person by the indemnified party; (ii) there is no adverse impact
on any other Claim that may be made by or against the indemnified party, (iii)
the sole relief provided is monetary damages that are paid in full by the
indemnifying party, and (iv) the compromise or settlement contains, as an
unconditional term thereof, the giving by the claimant or the plaintiff of the
indemnified party a release from all liability in respect of such Claim. The
indemnified party shall have no liability with respect to any compromise or
settlement of any Claim effected without its written consent.
d. In the event that a party's system, Services, Transaction Specifications
or proprietary programs supplied hereunder become, or in such party's opinion,
be likely to become, the subject of a claim of infringement, as set forth in
Section 17(a) above, such party shall have the right, at its option and expense,
either to (i) procure for the other party the right to continue using the
affected system, Services, Transaction Specifications or proprietary programs,
or (ii) replace or modify the same so that they become non-infringing and
functionally equivalent, or (iii) terminate, without any obligations, the other
party's use of the affected system, Services, Transaction Specifications or
proprietary programs.
18. Miscellaneous.
a. Notices and Communications. Except as otherwise specifically provided
herein, any notice required or permitted to be sent by this Agreement will be in
writing and will be (i) delivered by hand; (ii) sent by fax (if the receiving
machine confirms receipt through answerback and the sending machine prints a
paper copy of the answerback message); or (iii) mailed by registered, certified
or other prepaid, receipted delivery service, return receipt requested, to the
address or fax number provided by this Agreement. Complying notices will be
effective (a) when delivered by hand; (b) when sent by fax; (c) three (3)
business days after deposited in the mail in the manner required above, with
proper postage prepaid; or (d) one (1) business day after deposited with the
delivery service. Notices will be addressed as follows or as from time to time
directed in writing by either party by notice given hereunder:
To Claimsnet: Claimsnet.com Inc.
12801 No. Central Expressway, Suite 1515
Dallas, Texas 75248
Attention: Paul Miller, President and CEO
with a copy to: Reitler Brown, LLC
800 3rd Avenue, 21st Floor
New York, New York 10022
Attention: Mr. Bob Brown
To ProxyMed: ProxyMed, Inc.
2555 ProxyMed Road, Suite 110
Fort Lauderdale, Florida 33317
Attention: Nancy J. Ham, President and COO
with a copy to: ProxyMed, Inc.
2555 ProxyMed Road, Suite 110
Fort Lauderdale, Florida 33317
Attention: In-House Counsel
b. Modification. This Agreement may not be altered, amended or modified,
except by formal agreement in writing signed by duly authorized representatives
of both parties, except as expressly provided herein. Approvals can only be
given in writing by a duly authorized representative of the applicable party.
Only a vice president or higher officer of a party can be an authorized
representative of such party.
c. No Solicitation. During the term of this Agreement and for one (1) year
after this Agreement is terminated, if either party solicits, directly or
indirectly, or encourages anyone to solicit, directly or indirectly, any
customer, end-user or partner from whom the other party has obtained an end-user
agreement, customer agreement or partner agreement, as the case may be, for the
products and services which are the subject matter of this Agreement, to
terminate or replace the aforesaid agreements, as the case may be, or otherwise
affect any customer, end-user's or partner's use of the Services in any manner
including, without limitation, promoting any competing Services or software
product, then (i) in the case of a violation by Claimsnet, Claimsnet's rights to
any rebates shall cease immediately, and ProxyMed shall be entitled to any
damages that it may be able to prove at law or in equity, or (ii) in the case of
a violation by ProxyMed, Claimsnet may elect to terminate ProxyMed's license of
Claimsnet's "claimsnet.com" application immediately, and Claimsnet shall be
entitled to any damages that it may be able to prove at law or in equity, in
each case subject to the limitation on liability set forth in Section 16(c)
above. Each party agrees that it shall not directly or indirectly through others
solicit for employment or hire any employee of the other party during any term
or extension of this Agreement. Former employees shall not be solicited or hired
by the other party for a period of six (6) months after such employee's
termination.
d. Waiver or Delay. Any waiver or delay in the exercise by a party of its
right to terminate or enforce any provision of this Agreement for any breach by
the other party will not prejudice such party's right of termination or
enforcement for such breach or any further, continuing or other breach by the
other party.
e. Severability. If any provision of this Agreement is, for any reason, held
unenforceable or invalid in any respect under the laws of any jurisdiction where
enforcement is sought, the invalidity or unenforceability will not affect: (i)
any other provision of this Agreement and this Agreement will be construed as if
such unenforceable or invalid provision was not contained herein; and (ii)
enforcement or validity of such provision in any other jurisdiction.
f. Governing Law. This Agreement will be construed and enforced in
accordance with the laws of Texas as applied to contracts entered into in and
performed in Texas between Texas residents.
g. Headings. The section headings of this Agreement are for convenience only
and will neither be considered a part of, nor affect the construction or
interpretation of, any provision of this Agreement.
h. Compliance with Laws. Each party will comply with any applicable federal,
state, local or other governmental laws and regulations or industry practices in
connection with their respective rights and obligations under this Agreement.
i. Relationship. The relationship of ProxyMed and Claimsnet established by
this Agreement is and at all times will remain one of independent contractors,
and except for the rights of either party hereunder, neither party will at any
time or in any way represent itself as being an agent or other representative of
the other party or as having authority to assume or create obligations or
otherwise act in any manner on behalf of the other party.
j. Interpretation. The parties hereto acknowledge and agree that they have
each had the benefit of counsel and participated in the drafting of this
Agreement. Therefore, the rule of law which provides that if an ambiguity is
found to exist in an agreement, the ambiguity is construed against the party who
drafted the agreement, shall not apply to the interpretation of this Agreement.
k. Arbitration. Except for disputes relating to Sections 5, 6, 7 and 11 of
this Agreement, any and all other disputes or controversies that shall arise
under or in connection with this Agreement or in any other way relate to this
Agreement, including its termination, shall be submitted to a panel of three
arbitrators (one arbitrator if the amount in dispute in less than $50,000) under
the Commercial Rules for Arbitration of the American Arbitration Association
then in effect (or the Expedited Rules if the dispute is less than $50,000). The
parties hereby acknowledge that the United States Arbitration Act (9 USC
ss.ss.1-16) takes precedence over any state arbitration statutes, rules and
regulations. Each of the arbitrators shall be qualified and experienced in the
computer system licensing agreements, with at least one arbitrator also being a
licensed attorney. The arbitrator(s) must base their determination solely on the
terms and conditions of this Agreement and the laws in the State of Texas. The
arbitrator(s) shall have the authority to award any remedies that a court may
order or grant, except that they will have no authority to award punitive
damages or any other damages not measured by the prevailing party's actual
damages, and may not in any event make any ruling, finding or award that does
not conform to the terms and conditions of this Agreement. Arbitration shall be
held in the forum jurisdiction of the defendant. The parties hereby agree to
accept service of process at its principal office address and agree to the
personal jurisdiction, forum and venue as set out herein. Both parties expressly
covenant and agree to be bound by the decision of the arbitrator(s) as the final
determination of the matter in dispute. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. Each
party will be responsible for its own attorneys' fees and expenses.
l. Assignment or Transfer. This Agreement shall not be assigned by either
party, in whole or in part without the prior written consent of the other party,
which consent shall not be unreasonably withheld or delayed; except that
ProxyMed may assign this Agreement to a parent, affiliate, subsidiary,
successor-in-interest or in connection with an acquisition, merger, or sale of
substantially all its assets or any business unit, so long as the assuming party
remains liable for all fees due and owing through the assignment date. Any
attempted assignment not permitted hereunder shall be void and shall be deemed a
material breach of this Agreement.
m. Force Majeure. Neither party shall be liable to the other for failure or
delay in the performance of a required obligation if such failure or delay is
caused by an act of any federal, state or local governmental authority, act of
God, acts of terrorism, loss of communication, delay of the other party or third
parties, strike, riot, fire, flood, lightning, electrical power failure, natural
disaster or other similar cause beyond its control. Written notice within thirty
(30) days of any such condition shall be provided by the party whose performance
hereunder has failed or been delayed as a result of force majeure hereunder to
the other party. Either party may terminate this Agreement if such force majeure
continues for a period of ninety (90) days.
n. Public Announcements. Subject to applicable legal requirements, neither
party may use the other party's name in any press releases, promotions,
marketing or advertising without obtaining the written consent of the other
party, which consent shall not be unreasonably withheld or delayed.
o. Integration. This Agreement constitutes the entire agreement of the
parties and supersedes any other agreement or understanding, written or oral,
that may have been made or entered into with regard to the subject matter hereof
by ProxyMed or Claimsnet.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.
PROXYMED, INC. CLAIMSNET.COM, INC.
By: /s/ Nancy J. Ham By: /s/ Paul W. Miller
- --------------------------------------- --------------------------------
Print Name: Nancy J. Ham Print Name: Paul W. Miller
- --------------------------------------- --------------------------------
Title: President and COO Title: President and CEO
- --------------------------------------- --------------------------------
Date September 11, 2002 Date September 11, 2002
- --------------------------------------- --------------------------------
Exhibit A
CLAIMSNET SERVICES PRICING AND PAYMENT TERMS
1. Claimsnet Services.
a. Modification of ProxyMed's web site and changing the No charge
current Claimsnet application to a private label
application for the Transferred Customers to access
b. Rights to market co-branded partner sites $; one-time charge
Co-branded ProxyMed Partner web site $; one-time charge, per site
Co-branded ProxyMed Partner registration site only $; one-time charge, per site
c. Direct data entry and online error correction No charge
functionality, when generally available
d. Transaction processing fees # Transactions per month Fee
------------------------ ---
1st 50,000 $
2nd 50,000 $
3rd 50,000 $
4th 50,000 $
All others $
e. Addition of new payer to ProxyMed payer table $; one-time charge
utilizing default edit set
f. Daily claim transmissions No charge
g. Patient statement file transmissions $ per statement (1st page only)
h. Electronic remittance advice transmission $ per claim
i. ProxyMed EDI report posting
j. Technical services, as requested $ per hour, plus travel
k. Gateway services As mutually agreed on a case-by-case
basis
l. Hot-Site Migration Services $ (one-time charge), plus
Claimsnet's T&E (only if booked or
approved in advance by ProxyMed)
Remote Services $
m. Referral services -- Only applies for so long as
the referred client goes into production as a ProxyMed
User on the ProxyMed private label Claimsnet processing system.
2. Claimsnet Customer Support.
a. Claimsnet will provide five (5) days of training for No charge, except travel reimbursement
ProxyMed personnel (only if booked by ProxyMed or otherwise
approved in writing in advance).
Additional training, as requested $95 per hour, plus travel
b. Second level customer support to ProxyMed personnel No charge
3. Payment Terms.
All payments to Claimsnet are due net thirty (30) days from the date of invoice
to ProxyMed. In the event the ProxyMed payment to Claimsnet is 30 days overdue,
upon Claimsnet notification of ProxyMed, including e-mail and telephone contact
to ProxyMed's designated contact, Claimsnet may interrupt service until complete
payment is made in full for all outstanding balances. If payment is 60 days
overdue, upon Claimsnet notification of ProxyMed, including e-mail and telephone
contact to ProxyMed's designated contact, Claimsnet may terminate service. If
service is interrupted or terminated, a reconnection fee may be charged for up
to an additional 50% of all amounts due to Claimsnet from ProxyMed at time of
interruption or termination. Notwithstanding anything herein to the contrary,
ProxyMed shall not be required to make any payments to Claimsnet under this
Agreement during the period commencing when ProxyMed has provided all of the
requisite space, hardware, software (other than the Licensed Technology) and
other materials necessary to permit Claimsnet to provide the migration services
set forth in Section 1(l) of the Agreement until such date (the "Activation
Date") as the Hot-Site is operational and capable of effectively servicing the
Transferred Customers in substantially the same manner in which they were
serviced by Claimsnet prior to the execution of this Agreement; provided,
however, that the foregoing period of non-payment shall not affect the accrual
of amounts due under the Agreement, only the timing of payment, which accrued
amounts shall become due and payable on the later to occur of (i) the Activation
Date; and (ii) thirty days from the date of invoice to ProxyMed.
4. Price Increases.
Upon each anniversary of the Effective Date, Claimsnet shall have the right to
increase the pricing herein by an amount not greater than the amount of increase
in the Consumer Price Index, All Urban Consumers over the previous twelve
months.
Exhibit B
PROXYMED SERVICES PRICING AND PAYMENT TERMS
1. ProxyMed Services.
a. Transaction processing rebates to Claimsnet Par Non-Par
for commercial electronic claims Payer Payer
# Claims per month Fee Fee
------------------ --- ---
1 - 50,000 $ $
50,001 - 70,000 $ $
70,001 & above $ $
b. Transaction processing fees to ProxyMed for # Transactions per month Fee
non-commercial electronic claims ------------------------ ---
1 - 50,000 $
50,001 - 100,000 $
100,001 - 150,000 $
150,001 - 200,000 $
200,001 & above $
c. Transaction processing fees to ProxyMed for $. per claim
paper claims (includes a laser printed claim
form and first class postage)
d. Transaction processing fees to ProxyMed for # Transactions per month Fee
patient statements (includes a laser printed ------------------------ ---
statement, return envelope, and first class 1 - 10,000 $
postage) 10,001 - 25,000 $
25,001 - 40,000 $
40,001 & above $
Patient statement second pages and $. each
submitter-supplied inserts.
2. ProxyMed Customer Support.
a. Second level customer support to Claimsnet No charge
personnel
3. Payment Terms.
All payments to ProxyMed are due net thirty (30) days from the date of invoice
to Claimsnet. In the event the Claimsnet payment to ProxyMed is 30 days overdue,
upon ProxyMed notification of Claimsnet, including e-mail and telephone contact
to Claimsnet's designated contact, ProxyMed may interrupt service until complete
payment is made in full for all outstanding balances. If payment is 60 days
overdue, upon ProxyMed notification of Claimsnet, including e-mail and telephone
contact to Claimsnet's designated contact, ProxyMed may terminate service. If
service is interrupted or terminated, a reconnection fee may be charged for up
to an additional 50% of all amounts due to ProxyMed from Claimsnet at time of
interruption or termination.
4. Price Increases.
Upon each anniversary of the Effective Date, ProxyMed shall have the right to
increase the pricing herein by an amount not greater than the amount of increase
in the Consumer Price Index, All Urban Consumers over the previous twelve
months. Upon an increase by the U.S. Postal Service for first class postage,
ProxyMed shall have the right to increase the pricing set forth in Section 1(d),
above, for first page patient statements and paper claims by an amount equal to
the increase in the first class postage rate.