Development Agreement - SmithKline Beecham Clinical Laboratories Inc. and ActaMed Corp.
DEVELOPMENT AGREEMENT
THIS AGREEMENT is made as of this 31 day of October, 1997, by
and between SmithKline Beecham Clinical Laboratories, Inc., a Delaware
corporation with offices located at 1201 S. Collegeville Road, Collegeville, PA
19426 ("SBCL"), and ActaMed Corporation, a Georgia corporation with offices
located at 7000 Central Parkway, Suite 600, Atlanta, GA 30328 ("ACTAMED").
WHEREAS, ACTAMED has expertise in software development, installation and
implementation, systems analysis and design, data processing and computer
programming;
WHEREAS, ACTAMED employs a staff of qualified technical personnel whose
services ACTAMED is willing to provide to SBCL on a temporary or project basis;
WHEREAS, SBCL desires to have ACTAMED provide certain services and
personnel to SBCL for the project described in the attached Statement of Work;
and
WHEREAS, the parties desire to agree upon the terms and conditions under
which ACTAMED may provide such services and personnel to SBCL.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings and shall include the plural as well as the singular:
"Affiliate" means any corporation or other entity which controls, is
controlled by, or is under common control with SBCL, and any joint venture or
partnership in which SBCL is a partner or joint venturer, or any other entity in
which SBCL has an interest and to which it supplies or receives information
processing services. A corporation or other entity shall be deemed to control
another corporation or entity if it owns, directly or indirectly, more than
fifty percent (50%) of the voting shares or other interest, or has the power to
elect more than half the directors, of such other corporation or entity.
"Confidential Information" means any and all proprietary information
disclosed or made available by a party hereto to the other party in the course
of performing hereunder, whether in written, oral, magnetic, photographic,
optical or other form and whether now existing or hereafter created, including,
without limitation, all trade secrets, know-how, information systems,
technology, data, computer programs, processes, methods, operational procedures,
plans, strategies or results, and other information of a similar nature that is
not generally disclosed by such party to the public.
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Confidential Information shall not include any information which (a) is proven
by written evidence to have been in a receiving party's possession prior to
disclosure by the other party; (b) is received from a third party having the
right to disclose such information; (c) is or hereafter becomes public knowledge
through no act or fault of a receiving party; or (d) is proven by written
evidence to have been independently developed by a receiving party without
access to the Confidential Information of the other party.
"Deliverables" means all Software, Documentation and other materials
developed for or delivered to SBCL by ACTAMED under this Agreement and described
in a Statement of Work.
"Derivative Work" means a work that is based upon one or more preexisting
works, such as a revision, modification, translation, abridgment, condensation,
expansion, or any other form in which such preexisting works may be recast,
transformed, translated or adapted, and that, if prepared without authorization
of the owner of the copyright in such preexisting work, would constitute a
copyright infringement.
"Documentation" means manuals (e.g., user, utility reference and language
reference) and other written materials that relate to particular Software,
including materials useful for the operation of the Software by a user, and
information (e.g., data flows, data structures, control logic, flow diagrams,
and principles of operation) useful for design, modification and maintenance of
the source code by a programmer. Documentation also shall include any
Maintenance Modifications or Enhancements thereto created by ACTAMED from time
to time, and such additional materials as may be described in a Statement of
Work.
"Enhancements" means changes or additions, other than Maintenance
Modifications, to Software and related Documentation, including all new
releases, that improve functions, add new functions, or significantly improve
performance by changes in system design or coding.
"Error" means any error, problem, or defect resulting from (a) an incorrect
functioning of Software, or (b) an incorrect or incomplete statement of diagram
in Documentation, if such an error, problem or defect renders the Software
inoperable, causes the Software to fail to meet the Specifications thereof,
causes the Documentation to be inaccurate or incomplete in any material respect,
causes incorrect results or causes incorrect functions to occur when any such
materials are used.
"Maintenance Modifications" means any modifications or revisions, other
than Enhancements, to Software or Documentation that correct Errors, support new
releases of the operating systems with which the Software is designed to
operate, support new input/output devices or provide other incidental updates
and corrections.
"Services" means the software development, design, analysis, data
processing, computer programming, consulting, training and/or such other
services and duties to be provided to SBCL under this Agreement and described in
a Statement of Work.
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"Software" means computer programming code, including updates and revisions
thereto, which conform to the Specifications and includes both object code
(i.e., machine-readable) and source code (i.e., human-readable), and associated
procedural code, all as more fully described in a Statement of Work. Software
also shall include any Maintenance Modifications and Enhancements thereto
created by ACTAMED from time to time.
"Specifications" means the description of the design, operating procedures,
performance, functions and other requirements for the Software set forth in a
Statement of Work.
"Statement of Work" or "SOW" means a written instrument in substantially
the form of Exhibit A attached hereto which is signed on behalf of both parties
by their authorized representatives.
ARTICLE II
SERVICES
2.1 SERVICES. SBCL hereby retains ACTAMED to provide the Services and
Deliverables, and ACTAMED hereby agrees to provide the Services and
Deliverables, in the manner described in this Agreement and in Statements of
Work issued from time to time hereunder. The Services and Deliverables shall
conform to the Specifications set forth in the applicable SOW.
2.2 SCHEDULE; LOCATION. SBCL, at its own expense, shall furnish to
ACTAMED access to appropriate computer personnel, as well as all relevant
Documentation, Specifications and source code in its possession and necessary
for ACTAMED to provide the Services and Deliverables. ACTAMED will provide the
Services and deliver the Deliverables on or before the dates (the "Schedule")
and at the location(s) set forth in a SOW. Delivery of any intermediate
Deliverables, or status reports thereon, also shall be on the dates specified in
the Schedule. No variation or modification shall be made to the Schedule
without the prior written consent of SBCL and ACTAMED.
2.3 Personnel.
(a) ACTAMED shall provide fully trained, competent and skilled
personnel for performance of the Services.
(b) Promptly upon execution of this Agreement, each party shall
notify the other party of the name, business address and telephone number of its
Contract Administrator. The Contract Administrators of each party shall be
responsible for arranging all meetings, visits and consultations between the
parties that are of a nontechnical nature. The Contract Administrator also
shall be responsible for receiving all notices under this Agreement and for all
administrative matters such as invoices, payments and amendments.
(c) Each SOW shall state the name, business address and telephone
number of the Project Managers for each party. The Project Managers of each
party designated for a particular
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SOW shall, with respect to such SOW, be responsible for technical and
performance matters, and the delivery, receipt and acceptance of the
Deliverables and technical information.
2.4 PROGRESS REPORTS AND MEETINGS. At either party's reasonable written
request from time to time during the performance of this Agreement, but at least
once each month, and at no additional cost, the Project Managers and any other
personnel either party may designate shall meet to review the progress of the
project described in a particular SOW. At each such meeting, ACTAMED shall
provide SBCL with a written status report, which shall include but not be
limited to, any problem that, in ACTAMED's reasonable judgment, might cause any
increase in the budgeted costs for such project or adversely affect ACTAMED's
ability to meet the Schedule or the Specifications.
2.5 Change Order Procedures.
(a) REQUIREMENT OF CHANGE ORDERS. All changes, modifications and
additions to the obligations of either party under this Agreement or any SOW
requires a written change order (a "Change Order"). Either party may initiate a
Change Order by submitting a written request for a Change Order to the other
party along with an explanation of reasons as to why such a modification is
desirable or necessary.
(b) CHANGE ORDER CONTENTS. All Change Orders must contain:
(i) a description of any additional work to be performed
and/or changes to the performance required of either party, including the
estimated number and skill level of personnel necessary to make such changes
and/or additions and the availability of such personnel over the ensuing period;
(ii) a statement of the impact of the work or changes on the
Services, Deliverables, Schedule, costs or other requirements of this Agreement
or a SOW;
(iii) acceptance test procedures for such work, if
applicable; and
(iv) signatures of duly authorized individuals of each
party.
(c) ACCEPTANCE OF CHANGE ORDER. Within ten (10) days of the
submission of a Change Order request from one party to the other, the receiving
party shall notify the other party of its acceptance or rejection. SBCL may, in
its sole discretion, reject any Change Order requested by ACTAMED. ACTAMED may
not decline to accept any Change Order requested by SBCL that, together with any
prior accepted Change Orders, do not substantially affect the nature of the
Deliverables, their performance or functionality, and does not change the
Schedule by more than two man day or dollar amounts by more than 2%.
2.6 CONTROLLING DOCUMENT. In the event any provision contained in this
Agreement conflicts with any part of a SOW, the provision set forth in the SOW
shall take precedence.
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ARTICLE III
COMPENSATION; PAYMENT AND EXPENSES
3.1 COMPENSATION. Amounts and method of payment for all Services and
Deliverables to be provided under this Agreement shall be set forth in each SOW.
3.2 PAYMENT. Unless otherwise specified in the applicable SOW, (a)
ACTAMED shall submit invoices to SBCL for payment for Services and Deliverables
within thirty (30) calendar days after the close of each month during which
Services were rendered and/or Deliverables were delivered to SBCL; and (b) all
undisputed invoices shall be due and payable within [*] days of SBCL's
receipt of such invoice and acceptance of the Services and/or Deliverables. All
invoices shall specifically refer to the applicable SOW, indicate the period of
performance and provide reasonable detail with respect to the Services and
Deliverables to which they relate, including, if applicable, time and labor
spent in providing the Services, cost of materials and travel and living
expenses. Supporting documentation called for by SBCL's standard reimbursement
policies shall accompany any such invoice. Payment in accordance with these
terms shall represent full and complete compensation for all Services and
Deliverables provided pursuant hereto, and for any inventions, improvements,
copyrights, patent rights and other intellectual property rights assigned, as
more fully set forth below.
3.3 RECORDS AND AUDITS. ACTAMED shall maintain complete and accurate
accounting records in accordance with sound accounting practices to
substantiate ACTAMED's charges and shall preserve such records for a period
of at least [*] after completion of the pertinent work. SBCL shall have
access to such records for purposes of audit, either through its own
representatives or through an accounting firm selected and paid by SBCL. Any
such review of ACTAMED's records shall be conducted at reasonable times
during business hours, and no more than twice annually.
3.4 TAXES. ACTAMED assumes all responsibility and liability for the
payment of any federal, state, or local income taxes due on money received from
SBCL hereunder, and shall be responsible for all employment taxes and
withholding with respect to its employees and contractors.
3.5 EXPENSES. Except as otherwise agreed by SBCL in writing, ACTAMED
shall bear all of its own expenses arising from performance of its obligations
under this Agreement and each SOW, including, without limitation, expenses for
transportation, living facilities, work spaces, utilities, management, clerical
and reproduction services, supplies, and the like.
ARTICLE IV
DELIVERY; ACCEPTANCE AND MAINTENANCE
4.1 DELIVERY. ACTAMED shall deliver all Deliverables for testing and
acceptance in the manner set forth in the applicable SOW.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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4.2 TESTING.
(a) Upon receipt of the Deliverables, SBCL shall test the
Deliverables to determine whether they meet the Specifications and any other
requirements set forth in the SOW.
(b) Unless otherwise specified in the applicable SOW, such testing
shall be conducted in accordance with the following testing procedures and
criteria:
(i) SBCL will notify ACTAMED, in writing, that it is
accepting or rejecting the Deliverables within thirty (30) days after receipt.
Any notice of rejection shall set forth the grounds for rejection. ACTAMED
shall use its best efforts to remedy any failures of the Deliverables to meet
the Specifications, and shall deliver corrected Deliverables to SBCL as soon as
possible.
(ii) Upon receipt of corrected Deliverables, SBCL shall
have [*] within which to test them and inform ACTAMED of its acceptance or
rejection.
This procedure may be repeated any number of times; PROVIDED, HOWEVER, that
if SBCL detects errors in the Deliverables or the Deliverables fail to meet the
Specifications, SBCL may withhold payment under the applicable SOW until the
errors in the Deliverables are corrected or the Deliverables meet the
Specifications.
(c) If SBCL detects errors in the Deliverables or the Deliverables
fail to meet the Specifications after it has tested them twice, SBCL shall
thereafter have, until it accepts the Deliverables, the right to terminate this
Agreement or the applicable SOW upon written notice to ACTAMED. Upon such
termination, ACTAMED shall retain all payments SBCL has made to it up to the
date of termination, SBCL shall retain all Deliverables received by such date,
and SBCL shall have no further obligations to pay any amounts to ACTAMED under
this Agreement.
4.3 ACCEPTANCE. If SBCL does not detect any Errors or any failure of
the Deliverables to meet the Specifications after a performance of the tests
described in Section 4.2, SBCL shall accept the Deliverables by issuing a
written confirmation of acceptance to ACTAMED, which shall be effective as of
the date of successful completion of the tests.
ARTICLE V
OWNERSHIP AND CONFIDENTIALITY
5.1 OWNERSHIP OF WORK PRODUCT BY SBCL.
(a) SBCL and ACTAMED agree that any Deliverables prepared under
this Agreement, including modifications to software owned by ACTAMED, and
ownership of all intellectual property rights, including but not limited to
copyrights and all renewals and extensions thereof, in such works shall [*].
SBCL and ACTAMED agree to and hereby grant, transfer and assign such right,
title and interest in the Deliverables, including patents, copyrights and
trade secrets for purposes of, and to the extent necessary and
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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consistent with this Section 5.1(a). From time to time SBCL and ACTAMED, and
their respective officers, employees, contractors, representatives and agents,
shall confirm the foregoing assignment by execution and delivery of such
assignments, confirmations or other written instruments as may be reasonably
requested by the other party in order to vest each party with the rights
mentioned in this Section 5.1(a). ACTAMED shall obtain appropriate assignments,
covenants and obligations from its officers, employees, representatives, agents
and any contractors hired to carry out its obligations under this Agreement
prior to their performance under any SOW to ensure SBCL and ACTAMED may own the
rights specified in this Section 5.1(a).
(b) ACTAMED agrees that it shall not, directly or indirectly,
produce, develop or participate in the production or development of any work,
materials documentation or software similar to any Deliverable or Specification,
or utilize any techniques, methods or know-how relating to the aforementioned
items, for the period beginning as of the date hereof and ending on the date on
which the last phase any Deliverable was scheduled under an SOW to be delivered
to SBCL for testing and acceptance, or the date the last phase any such
Deliverable was actually delivered to SBCL for testing and acceptance, whichever
is later; PROVIDED, HOWEVER, nothing contained in this Section 5.1(b) shall
prohibit ACTAMED from purchasing any work, documentation or software similar in
function or purpose to any of the Deliverables or Specifications that is
produced or developed independently by a third party without access, reference
or knowledge of the Deliverables, Specifications or any other SBCL Confidential
Information. SBCL reserves the right to audit and inspect any work, materials,
documentation or software developed or purchased by ACTAMED at any time that is
similar to any Deliverable or Specification for purposes of ensuring compliance
with the confidentiality provisions of this Agreement.
(c) ACTAMED agrees that if, during [*] beginning with the date on
which the last phase of any Deliverable was scheduled under SOW No. 1 to be
delivered to SBCL for testing and acceptance, or the date the last phase of
any such Deliverable was actually delivered to SBCL for testing and
acceptance, whichever is later, ACTAMED, directly or indirectly, produces,
develops or participates in the production or development of any laboratory
test ordering and result reporting software, ACTAMED will not permit any
software engineer, designer or similar person (whether an employee or
independent contractor) that participated in the production or development of
the Services or Deliverables or who otherwise had access to SBCL Confidential
Information to participate, directly or indirectly, in such production or
development.
(d) Notwithstanding anything to the contrary in this Agreement,
both SBCL and ACTAMED agree not to exercise or to authorize any other party to
exercise any of SBCL's or ACTAMED's ownership rights or privileges with respect
to any of the Deliverables, including without limitation, the right to use,
license, sell, deliver, transfer or incorporate such Deliverables into any other
product for any reason without the prior written consent of the other party.
Neither party shall have any obligation to give their consent for purposes of
this Section 5.1(d).
(e) SBCL and ACTAMED agree not to reveal any Deliverable, in whole
or in part, to anyone outside of ACTAMED or SBCL without the prior written
consent of the other party, or to any officer, employee, contractor,
representative or agent of ACTAMED or SBCL who is not
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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covered by the restrictions on confidentiality and use contained herein.
ACTAMED further agrees not to use, sell, deliver, transfer or reveal any
Specification, in whole or in part, to anyone outside of ACTAMED without SBCL's
prior written consent, or to any officer, employee, contractor, representative
or agent of ACTAMED who is not covered by the restrictions on confidentiality
and use contained herein.
5.2 PREEXISTING WORKS.
(a) In the event that any Deliverable or part thereof constitutes
a Derivative Work of any preexisting works owned by either party, or in the
event either party requires the other party's preexisting works in order to
perform under this Agreement, each party hereby grants to the other party and
its Affiliates a non-exclusive, worldwide, royalty-free right and license to
use, execute, reproduce, display, perform and distribute internally such
preexisting works for the sole and limited purpose of developing the
Deliverables and performing the Services in accordance with this Agreement. All
rights not granted herein are specifically reserved. For purposes of this
Section 5.2, "preexisting works" shall include, but not be limited to, the
Specifications (including the specifications for the [*] and [*]
systems) and "SBCL SCAN" software, in the case of SBCL, and the "Provider Link"
software, in the case of ACTAMED.
(b) In the event that any Deliverable or part thereof constitutes
a Derivative Work of preexisting works not owned by SBCL or ACTAMED, SBCL or
ACTAMED, as the case may be, shall ensure that the other party and its
Affiliates have a non-exclusive, worldwide, royalty-free right and license to
use, execute, reproduce, display, perform and distribute internally such
preexisting works for the sole and limited purpose of developing the
Deliverables and performing the Services in accordance with this Agreement.
SBCL and ACTAMED each agree to notify the other party in writing of any
pre-existing work, or portion thereof, which either or them does not own prior
to the incorporation of such pre-existing work in the Deliverables. Such notice
shall identify: (i) the pre-existing work which is not owned, (ii) the owner of
such pre-existing work, (iii) SBCL's or ACTAMED's, as the case may be, right to
use such pre-existing work, (iv) the nature of SBCL's or ACTAMED's right to
grant to the other party the license contemplated herein, and (v) it shall grant
the other party the aforesaid rights and license.
5.3 OBLIGATION OF CONFIDENTIALITY.
(a) SBCL and ACTAMED each acknowledge and agree that during the
term of this Agreement, they shall have access to certain Confidential
Information of the other party. SBCL and ACTAMED each agree to keep such
Confidential Information in strict confidence and shall not disclose it to any
person, firm, partnership or corporation other than to its officers, employees,
contractors, representatives and agents who have a need to know such information
in order to perform hereunder or under a SOW, nor use the same for any purpose
other than performance hereunder or under a SOW. SBCL and ACTAMED,
respectively, shall advise all officers, employees, contractors, representatives
and agents with access to the other party's Confidential Information of the
confidentiality obligations with respect thereto under this Agreement.
Notwithstanding the foregoing, SBCL and ACTAMED shall be and remain liable and
responsible
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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for the confidentiality obligations of their respective officers, employees,
contractors, representatives and agents. In addition to the foregoing, SBCL and
ACTAMED shall protect and safeguard the other party's Confidential Information
by using the same degree of care, but no less than a reasonable degree of care
to prevent the unauthorized use, dissemination or publication of such
Confidential Information as they each use to protect their own confidential or
proprietary information of a like nature. Upon request by the other party, SBCL
and ACTAMED shall require any or all of its officers, employees, contractors,
representatives and agents to sign a confidentiality agreement prepared by the
other party and approved by SBCL or ACTAMED, as the case may be, which affirms
such officers, employees, contractors, representatives or agents obligations in
regards to the Confidential Information.
(b) SBCL and ACTAMED each acknowledge and agree that the terms and
conditions with respect to confidentiality are reasonable and necessary for the
protection of each of the party's Confidential Information and to prevent damage
or loss to the other party. SBCL and ACTAMED further agree that any breach or
threatened breach of such provisions will cause the other party irreparable harm
for which there is no adequate remedy at law. Therefore, SBCL and ACTAMED each
agree that the nondisclosing party shall be entitled, in addition to any other
remedies available, to injunctive or other equitable relief to require specific
performance or to prevent a breach of the foregoing confidentiality provisions.
(c) Upon the breach of any provision, early termination or
completion of this Agreement or any SOW, SBCL and ACTAMED each agree to cease
all use and make no further use of the Confidential Information disclosed to it
by the other party and shall, upon the written request of the other party,
promptly return all such Confidential Information, including any copies used or
distributed to any of its officers, employees, contractors, representatives and
agents, and retain no copies.
(d) The confidentiality obligations of this Section 5.3 shall
survive termination of this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 WARRANTY OF TITLE AND NONINFRINGEMENT.
(a) ACTAMED represents and warrants to SBCL that:
(i) unless ACTAMED provides SBCL with advance written
notice to the contrary in accordance with Section 5.2(b), ACTAMED is and will be
the sole author of all works used by ACTAMED in preparing any and all
Deliverables;
(ii) ACTAMED shall require all officers, employees,
contractors, representatives and agents who provide Services or Deliverables
hereunder to assign to ACTAMED all intellectual property rights created or
arising in the performance of the Services and Deliverables for purposes
consistent with Article V;
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(iii) ACTAMED has and will have full and sufficient right to
assign or grant the rights granted pursuant to this Agreement, free and clear of
any liens, claims or encumbrances; and
(iv) none of the Deliverables infringe any patents,
copyrights, trademarks, or other intellectual property rights (including trade
secrets), privacy or similar rights of any third party, nor has any claim of
such infringement been threatened or asserted.
(b) SBCL represents and warrants to ACTAMED that:
(i) SBCL has and will have full and sufficient right to
assign or grant the rights granted pursuant to this Agreement, free and clear of
any liens, claims or encumbrances; and
(ii) none of the Specifications, software and any other
materials provided to ActaMed by SBCL hereunder infringe any patents,
copyrights, trademarks, or other intellectual property rights (including trade
secrets), privacy or similar rights of any third party, nor has any claim of
such infringement been threatened or asserted.
6.2 WARRANTIES OF CONFORMITY, PERFORMANCE AND COMPLIANCE. ACTAMED
represents and warrants to SBCL that:
(a) all Services and Deliverables shall be performed or provided
in a workmanlike manner and with professional diligence and skill;
(b) no portion of the Software contains any unauthorized code such
as a virus, Trojan horse, worm or other software routine or hardware component
designed to permit unauthorized access to disable, erase or otherwise harm the
Software, hardware, or data automatically, with the passage of time or under the
control of a person other than SBCL; and
(c) the Software includes acceptable Specifications so that any or
all such Software and any related hardware will not abruptly end or provide
invalid or incorrect results during the operation of SBCL's business due to
issues related to Year 2000 compliance. "Year 2000 compliance" requires that
the Specifications of the Software and related hardware include, but not be
limited to: date data century recognition, calculations that accommodate same
century and multi-century formulas and date values, and date data interface
values that reflect the century. The Software and related hardware shall be
used by SBCL prior to, during and after the calendar year 2000. The
Specifications of the Software and related hardware to ensure Year 2000
compliance shall be supplied by ACTAMED at no additional cost to SBCL.
6.3 AVOIDANCE OF INFRINGEMENT. In performing Services under this
Agreement, ACTAMED agrees to avoid designing or developing any items that
infringe any patents, copyrights or other intellectual property rights of any
third party. If SBCL or ACTAMED becomes aware of any such possible infringement
in the course of performing work under any SOW issued hereunder, SBCL or
ACTAMED, as the case may be, shall immediately so notify the other party in
writing.
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6.4 INDEMNIFICATION.
(a) SBCL and ACTAMED, respectively, shall indemnify and hold the
other party harmless from and against all loss, liability, costs, charges,
claims or damages to any persons or property, arising out of this Agreement, a
SOW or the provision of the Services or Deliverables where caused by its own
fault or negligence, or the fault or negligence of its officers, employees,
contractors, representatives or agents. SBCL and ACTAMED also shall indemnify
and hold the other party harmless from and against all loss, liability, costs,
charges, claims or damages which may arise as a consequence of or grow out of
any injury, illness or death of its officers, employees, contractors,
representatives or agents who are engaged in the performance of the Services
under this Agreement or a SOW.
(b) ACTAMED shall defend or settle, at its own expense, any and
all suits, actions, proceedings or claims against SBCL charging that any part of
the Services infringes any patent, trademark, trade secret, copyright or other
intellectual property right of any person or entity. SBCL and ACTAMED shall
defend or settle, each at its own expense, any and all suits, actions,
proceedings or claims against the other party charging that the use, copying,
modification, disclosure or distribution of any part of the Deliverables or
Documentation provided by SBCL or ACTAMED, as the case may be, infringes any
patent, trademark, trade secret, copyright or other intellectual property right
of any person or entity not a party hereto. Each party will pay actual costs of
the other party, including all legal fees and any damages awarded in any such
suit or proceeding, and will indemnify and hold that other party harmless from
all other liability incurred in connection with such action.
(c) SBCL and ACTAMED each agree to (i) promptly notify the other
party in writing of any claim for which it is seeking indemnification; (ii) at
the other party's request and expense, give assistance reasonably required for
the defense of any such claim; and (iii) give the other party control of the
defense and/or settlement of such claim; PROVIDED, HOWEVER, that the other party
may participate in such defense and/or settlement at its option and expense.
(d) If any part of the Services or Deliverables is or is likely to
become the subject of such a suit, action or claim, at no expense to the other
party, SBCL or ACTAMED may: (i) obtain sufficient rights to allow the other
party to use the Services or Deliverables as contemplated hereunder; or (ii)
substitute non-infringing services or deliverables acceptable to the other party
and substantially similar to the Services and Deliverables described in the SOW.
Any such replacement services and deliverables shall be subject to all of the
terms and conditions of this Agreement, including without limitation, the
foregoing indemnification provisions.
6.5 SURVIVAL. The provisions of this Section shall survive the
termination of this Agreement.
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ARTICLE VII
TERM AND TERMINATION
7.1 TERM. This Agreement shall commence on the date hereof and shall
remain in force for a period of one (1) year unless sooner terminated as
provided herein; PROVIDED, HOWEVER, this Agreement shall remain in effect
with respect to any Statements of Work already issued hereunder at the time
of such termination until such Statements of Work are themselves terminated
and/or performance thereunder is completed.
7.2 TERMINATION OF SOWS. SBCL may terminate any or all SOWs
outstanding, or any portion thereof, upon fifteen (15) business days' written
notice in the event that SBCL reasonably determines that ActaMed has failed to
meet any of the milestone dates for completing a phase of work, as set forth in
the project plan for the applicable SOW; provided however, that SBCL
acknowledges that ActaMed's timely performance may be dependent upon SBCL's
timely performance, and therefore SBCL may not so terminate if ActaMed's failure
to meet a milestone date is (i) the result of SBCL's failure to timely perform,
or (ii) because the parties are still engaged in the testing and acceptance
process for that milestone. Upon receipt of notice of such termination, ACTAMED
shall inform SBCL of the extent to which performance has been completed through
such date, and collect and deliver to SBCL whatever work product then exists in
the manner prescribed by SBCL. Subject to Section 4.2(c), ACTAMED shall be paid
for all work performed and accepted through the date of termination, provided
that such payment shall not be greater than the payment that would have become
due if the work had been completed. ACTAMED may not terminate any SOW once
ACTAMED has entered into such SOW.
7.3 TERMINATION OF AGREEMENT. SBCL or ACTAMED may terminate this
Agreement for cause, as provided below, upon [*] prior written notice. SBCL
and ACTAMED may terminate this Agreement or any SOW at any time upon mutually
written agreement. This Agreement shall continue to remain in effect with
respect to any SOW already issued hereunder until such SOW is itself
terminated and/or performance thereunder is completed.
7.4 TERMINATION IN THE EVENT OF BREACH. In the event of any material
breach of this Agreement or a SOW by either party, the other party may
terminate this Agreement or the applicable SOW without waiving any remedies
or rights available to such other party at law or in equity. Such
termination shall be in writing upon at least [*] prior written notice to the
party in breach specifying the nature of the breach. The party in breach
shall have the opportunity to cure such breach during such [*] period. If
the breach has been cured by the end of such period, this Agreement and the
applicable SOW will not terminate.
7.5 INSOLVENCY. Either party may immediately terminate this Agreement
if the other party is declared insolvent or bankrupt; the property of the other
party is assigned for the benefit of creditors, levied upon under execution, or
seized by virtue of any writ of any court of law; a petition for declaration of
bankruptcy or reorganization is filed against the other party in any court and
not dismissed in ninety (90) days; or a trustee or receiver is appointed for the
other party. In the event of any such insolvency or bankruptcy, all licenses
granted hereunder shall be considered licenses to
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
-12-
<PAGE>
intellectual property, and SBCL shall be entitled to retain the licenses granted
herein, subject to ACTAMED's right to terminate this Agreement for reasons other
than bankruptcy or insolvency as expressly provided in this Agreement. In the
event that a court or other legal or administrative tribunal, directly or
through an appointed master, trustee or receiver, assumes partial or complete
control over the assets of a party to this Agreement based on the insolvency or
bankruptcy of such party, the bankrupt or insolvent party shall promptly notify
the court or other tribunal of the confidentiality obligations under this
Agreement, and that Confidential Information received from the other party under
this Agreement remains the property of the other party. In addition, the
bankrupt or insolvent party shall, to the extent permitted by law, take all
steps necessary or desirable to maintain the confidentiality of the other
party's Confidential Information and to insure that the court, other tribunal or
appointee maintains such information in confidence in accordance with the terms
of this Agreement.
7.6 CONSEQUENCES OF TERMINATION. Upon termination of this Agreement,
ACTAMED shall:
(a) immediately cease work as provided in the notice of
termination, and shall cease to represent itself as providing services to SBCL;
and
(b) deliver to SBCL (i) a report describing the current state of
the Services and Deliverables to be provided by ACTAMED under this Agreement and
any applicable SOWs at the date of termination; (ii) all SBCL Confidential
Information in its possession; and (iii) all work product, Software, materials
and Documentation related to the Services and Deliverables in whatever state of
development they may exist on the date of termination.
ARTICLE VIII
MISCELLANEOUS
8.1 FORCE MAJEURE. Each party shall be excused from delays in
performing or from its failure to perform hereunder to the extent that such
delays or failures result from causes beyond the reasonable control of such
party; PROVIDED that, in order to be excused from delay or failure to perform,
such party must act diligently to remedy the cause of such delay or failure.
8.2 NO AGENCY. ACTAMED, in rendering performance under this Agreement
and any SOW, is acting solely as an independent contractor. SBCL does not
undertake by this Agreement or otherwise to perform any obligation of ACTAMED,
whether by regulation or contract. In no way is ACTAMED to be construed as the
agent or to be acting as the agent of SBCL in any respect. ACTAMED has the sole
obligation to supervise, manage, contract, direct, procure, perform, or cause to
be performed all work to be carried out by ACTAMED hereunder.
8.3 NO WAIVER. No delay or omission by either party to exercise any
right arising upon any noncompliance with, or breach of, any covenant, condition
or agreement to be performed by the other party shall impair any such right or
be construed to be a waiver thereof. A waiver by either of the parties hereto
of any noncompliance with, or breach of, any covenant, condition or agreement to
be performed by the other party must be in writing and signed by both parties.
No waiver of any
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<PAGE>
right upon any one occurrence of noncompliance or breach shall be construed to
be a waiver of any succeeding noncompliance or breach. Unless stated otherwise,
all remedies provided for in this Agreement shall be cumulative and in addition
to and not in lieu of any other remedies available to either party at law, in
equity, or otherwise.
8.4 SEVERABILITY. If any term, covenant, condition or provision of this
Agreement or the application thereof to any circumstance shall be invalid or
unenforceable to any extent, the remaining terms, covenants, conditions and
provisions of this Agreement shall not be affected thereby and each remaining
term, covenant, condition and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as is enforceable.
8.5 NOTICES. If one party is required or desires to give notice to the
other, such notice shall be deemed given if mailed by U.S. mail, first class,
postage prepaid, or via a nationally recognized overnight carrier, with all
freight charges prepaid, and addressed as follows (or as subsequently noticed to
the other party):
If to SBCL:
SmithKline Beecham Clinical Laboratories, Inc.
1201 S. Collegeville Road
Collegeville, PA 19426
ATTN: [*]
----------------------------
If to ACTAMED:
ActaMed Corporation
7000 Central Parkway
Suite 600
Atlanta, GA 30328
ATTN: Mike Hoover
----------------------------
8.6 ASSIGNMENT. SBCL may assign all of its rights and obligations under
this Agreement, SOWs or any license granted hereunder to any Affiliate, or to
any corporation or other entity pursuant to a merger, consolidation, or other
reorganization. SBCL agrees to notify ACTAMED of any such assignment, in
writing, specifying the name and address of the other entity. ACTAMED may not,
without the prior written consent of SBCL, assign or transfer this Agreement or
any right or obligation hereunder, and any attempt to do so in contravention of
this Section 8.6 shall be void and of no force and effect.
8.7 GOVERNING LAW; INTERPRETATION. This Agreement and all SOWs shall be
construed, interpreted and enforced under the laws of the Commonwealth of
Pennsylvania, excluding its provisions regarding conflicts of law. The section
and subsection headings used herein are for reference and convenience only, and
shall not enter into the interpretation hereof.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
-14-
<PAGE>
8.8 ENTIRE AGREEMENT. This Agreement, the SOWs issued from time to time
hereunder and the schedules and exhibits attached hereto or thereto, constitute
the entire agreement concerning the subject matter covered herein and supersede
all prior oral or written agreements, understandings and promises relating
thereto. This Agreement may not be modified or amended except by an instrument
in writing declared to be an amendment hereto and executed by both parties.
This Agreement may be executed in several counterparts, all of which taken
together shall constitute one single agreement between the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in the manner appropriate to each as of the day and year first above
written.
ACTAMED CORPORATION SMITHKLINE BEECHAM CLINICAL
LABORATORIES, INC.
By: /s/ By: /s/
------------------------ --------------------------------
Mike Hoover Rich Davis
President Vice President
Information Resources
Dated: 10/31/97 Dated: 10/30/97
--------------------- -----------------------------
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<PAGE>
EXHIBIT A
STATEMENT OF WORK
This is a Statement of Work entered into on this 31st day of October, 1997,
between SmithKline Beecham Clinical Laboratories, Inc., a Delaware corporation
with offices located at 1201 S. Collegeville Road, Collegeville, PA 19426
("SBCL"), and ActaMed Corporation, a Georgia corporation with offices located at
7000 Central Parkway, Suite 600, Atlanta, GA 30328 ("ACTAMED"), under the
Development Agreement, dated as of October 31, 1997.
1. PROJECT MANAGERS:
for SB: [*]
1201 So. Collegeville Rd.
Collegeville, PA 19426
VOICE: [*]
FAX: [*]
E-MAIL: [*]
for ACTAMED: [*]
7000 Central Parkway
Suite 600
Atlanta, Georgia 30328
VOICE: [*]
FAX: [*]
E-MAIL: [*]
2. GENERAL DESCRIPTION OF PROJECT:
ACTAMED will "port" the SBCL Scan system to its ActaLink architecture,
substantially re-engineering the system by re-writing most if not all of
the source code, thereby creating a new product, "ACTALAB," which
incorporates all of the requirements and functionality [*] of SBCL SCAN as
depicted by the actual SBCL SCAN system and its associated documentation.
This re-engineering will also incorporate ActaLink architecture,
functionality and components as appropriate to create a fully integrated
product that benefits from the functionality of the ActaLink product. This
will include functionality to perform an eligibility check at the time of
order entry and to associate the resulting billing and eligibility
information with each order for all payers available to ACTAMED.
A complete description and overview of the project is provided as
Attachment 1 to this Statement of Work, which includes:
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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<PAGE>
- Description of Specifications
- Description of Deliverables
- Description and Location of Services
- Project Schedule and Resources
- Testing procedures and Acceptance Criteria
3. PAYMENT SCHEDULE
For the Services and Deliverables to be provided hereunder, SBCL will pay
ACTAMED the aggregate sum of [*] in accordance with the following schedule.
The payment for each Deliverable shown below is due within [*] of receipt
of the corresponding sign-off from SBCL, as set forth in more detail in
Attachment 1, Section 5. The amount payable to ACTAMED by SBCL under this
SOW is based on the estimates outlined in Attachment 2.
<TABLE>
<CAPTION>
% OF TOTAL AMOUNT DELIVERABLE/MILESTONE
---------- ------ ---------------------
<C> <C> <C>
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
</TABLE>
ACTAMED CORPORATION SMITHKLINE BEECHAM CLINICAL
LABORATORIES, INC.
By: /s/ By: /s/
------------------------ --------------------------------
Mike Hoover Rich Davis
President Vice President
Information Resources
Dated: 10/31/97 Dated: 10/30/97
--------------------- -----------------------------
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
-17-
<PAGE>
AMENDMENT TO DEVELOPMENT AGREEMENT
SBCL and ActaMed hereby agree this 31st day of December, 1997, to amend their
Development Agreement October 31, 1997, as set forth herein as of the
effective dates set forth herein.
1. Effective as of the date of the Development Agreement, Article I of
the Development Agreement is hereby amended to include the following
additional or revised definitions:
"ActaLab Software" has the meaning ascribed to it by the License
Agreement.
"Deliverable" means all Software, Documentation and other materials
developed by ActaMed under this Agreement and described in a Statement of
Work.
"License Agreement" means that certain License Agreement between
SBCL and ActaMed dated December 31, 1997.
"SBCL Software" has the meaning ascribed to it by the License
Agreement.
"SOW No. 1" shall mean the Statement of Work dated October 31, 1997.
2. The second "Whereas" clause is hereby deleted.
3. The fourth "Whereas" clause is hereby revised to delete the words
"to SBCL."
4. Section 5.1(a) of the Development Agreement is hereby revised as
of the date of the Development Agreement to read as follows:
(a) the parties hereby acknowledge and agree that:
(i) The Deliverables under SOW No. 1 do not
constitute modifications or enhancements to the SBCL Software, but
instead constitute a new Windows- and JAVA-based product which will be
used in conjunction with and/or will be integrated into ActaMed's
ProviderLink software. All Deliverables (including but not limited to,
the ActaLab Software) under SOW No. 1, and all intellectual property
rights (including but not limited to copyrights and all renewals and
extensions thereof) in such Deliverables, shall be owned solely and
exclusively by ActaMed. Subject to the provisions of Section 5(a)(iv)
hereof, SBCL hereby grants, transfers and assigns all of its right, title
and interest in such Deliverables, including patents, copyrights, trade
secrets and other
<PAGE>
intellectual property developed or acquired in the course of creating
such Deliverables, to ActaMed and ActaMed shall have the right to obtain
and hold in its own name copyrights, patents, registrations and similar
protections which may be available with respect to such Deliverables.
(ii) The parties contemplate that additional SOWs
may be entered into from time to time for the purpose of enhancing,
modifying or upgrading the ActaLab Software (an "ActaLab SOW"). All
Deliverables under an ActaLab SOW and all intellectual property rights
(including but not limited to copyrights and all renewals and extensions
thereof) in such Deliverables, shall be owned solely and exclusively by
ActaMed. Subject to the provisions of Section 5(a)(iv) hereof, SBCL hereby
grants, transfers and assigns all of its right, title and interest in such
Deliverables, including patents, copyrights, trade secrets and other
intellectual property developed or acquired in the course of creating such
Deliverables, to ActaMed and ActaMed shall have the right to obtain and
hold in its own name copyrights, patents, registrations and similar
protections which may be available with respect to such Deliverables.
(iii) The parties contemplate that additional SOWs
may be entered into from time to time for the purpose of enhancing,
modifying or upgrading the SBCL Software (a "SCAN Development SOW").
Ownership of any Deliverables under a SCAN Development SOW, and ownership
of any intellectual property rights therein (including but not limited to
copyrights and all renewals and extensions thereof). shall be governed in
all respects by Article 3 of the License Agreement. Subject to the
provisions of Section 5(a)(iv) hereof, ActaMed hereby grants, transfers
and assigns all of its right, title and interest in such Deliverables,
including patents, copyrights, trade secrets and other intellectual
property developed or acquired in the course of creating such
Deliverables, to SBCL.
(iv) Nothing in this Section 5(a) shall be
construed to transfer to ActaMed, or otherwise divest SBCL of SBCL's
ownership of, the SBCL Software and, subject to the licenses granted by the
License Agreement, SBCL (as between SBCL and actaMed) shall be the sole
owner of the patents, copyrights, trade secrets and other intellectual
property rights therein. Nothing in this Section 5(a) shall be construed
to transfer to SBCL, or otherwise divest ActaMed of ActaMed's ownership of,
any software or work of authorship owned by ActaMed as of the effective
date of the Development Agreement and, subject to the licenses granted by
the License Agreement, ActaMed (as between SBCL and ActaMed) shall be the
sole owner of any patent, copyright, trade secret right or other
intellectual property right therein.
(v) Any Statement of Work, by mutual agreement
of the parties, may include limitations and restrictions on ActaMed's use
of the applicable
2
<PAGE>
Deliverables in support of laboratory testing services of commercial
laboratories other than SBCL.
6. Sections 5.1(d) and (e) and Section 5.2(a) as of the date of this
Amendment are hereby deleted from the Development Agreement.
7. In the event of conflict between the Development Agreement and the
License Agreement, the License Agreement shall control.
9. Except as expressly set forth herein, the Development Agreement
shall continue in full force and effect as originally executed by the parties.
10. Nothing in this Agreement shall be construed to modify or change in
any respect the ownership and use rights with respect to Exclusive
Developments (as defined in the Services Agreement between SBCL and ActaMed
dated the date hereof) pursuant to the License Agreement and Section V of
said Services Agreement.
In witness whereof, the parties have caused this Amendment to be
signed this 31st day of December, 1997.
SMITHKLINE BEECHAM CLINICAL ACTAMED CORPORATION
LABORATORIES, INC.
BY: /s/ John B. Okkenele Jr. BY: /s/ Michael K. Hoover
---------------------------- ---------------------------
NAME: John B. Okkenele Jr. NAME: Michael K. Hoover
------------------------- ------------------------
TITLE: President TITLE: President
------------------------ -----------------------
DATE: 12-31-97 DATE: 12-31-97
------------------------ -----------------------
3
<PAGE>
SECOND AMENDMENT TO DEVELOPMENT AGREEMENT
SmithKline Beecham Clinical Laboratories, Inc. ("SBCL") and Healtheon
Corporation ("Healtheon") hereby agree this 14th day of October, 1998, to
amend the Development Agreement dated October 31, 1997, as amended, by and
between ActaMed Corporation and SBCL, which was assumed by Healtheon on May
18, 1998, as follows:
1. Section 7.1 of the Development Agreement is hereby replaced in its
entirety by the following:
"7.1 TERM. This Agreement shall commence on the date hereof and shall
remain in effect until October 31, 1999 or such later date as mutually
agreed upon by the parties for the purposes of completing the work
required under Statements of Work adopted hereunder."
SMITHKLINE BEECHAM CLINICAL HEALTHEON CORPORATION
LABORATORIES, INC.
By: /s/ Donald F. Parmen By: /s/ Jack Dennison
--------------------------- ---------------------------
Name: Donald F. Parmen Name: Jack Dennison
--------------------------- ---------------------------
Title: Assistant Secretary Title: Vice President
--------------------------- ---------------------------
Date: October 14, 1998 Date: October 14, 1998
--------------------------- ---------------------------