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Title: |
Outsourcing Agreement |
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Entities: |
Iron Mountain Inc.; Neoforma, Inc.; McDermott, Will & Emery; Skadden, Arps, Slate, Meagher & Flom LLP |
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Date: |
2005 |
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Size: |
Preview shows 41KB of 256KB total |
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Price: |
$57 |
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ID: |
#1201934 |
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CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSION.
================================================================================
OUTSOURCING AGREEMENT
dated as of October 10, 2005
among
NOVATION, LLC,
VHA INC.,
UNIVERSITY HEALTHSYSTEM CONSORTIUM,
HEALTHCARE PURCHASING PARTNERS INTERNATIONAL, LLC,
and
GLOBAL HEALTHCARE EXCHANGE, LLC
================================================================================
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
<S> <C> <C> <C>
1. DEFINITIONS.............................................................................................2
2. SERVICE PROVIDER OBLIGATIONS............................................................................9
2.1 Migration......................................................................................9
---------
2.1.1 Migration Plan........................................................................9
--------------
2.1.2 Assumptions and Further Development..................................................10
-----------------------------------
2.1.3 Migration Services...................................................................10
------------------
2.2 Services......................................................................................10
--------
2.2.1 Pre-Migration Services...............................................................11
----------------------
2.2.2 Post-Migration Services..............................................................11
-----------------------
2.2.3 [*****] [*****] [*****]..............................................................11
-----------------------
2.3 Service Levels; Root-Cause Analysis...........................................................12
-----------------------------------
2.3.1 Service Levels.......................................................................12
--------------
2.3.2 Root-Cause Analysis..................................................................12
-------------------
2.4 [*****].......................................................................................13
-------
2.5 Service Provider's Interaction with Members; Pre-Existing Data and Service Arrangements.......13
---------------------------------------------------------------------------------------
2.5.1 Member-Facing Plan...................................................................13
------------------
2.5.2 Members Using Service Provider prior to the Effective Date...........................13
----------------------------------------------------------
2.5.3 Maintenance of [*****]...............................................................14
----------------------
2.5.4 Participation of Additional and Renewal Members......................................14
-----------------------------------------------
2.6 Data From Suppliers...........................................................................15
-------------------
2.6.1 [*****]..............................................................................15
-------
2.6.2 Product Data.........................................................................16
------------
2.6.3 [*****]..............................................................................16
-------
2.7 Knowledge Sharing.............................................................................16
-----------------
2.8 Communications with Novation and Alliances....................................................16
------------------------------------------
2.8.1 Notice of Materially Adverse Facts...................................................16
----------------------------------
2.8.2 Reports..............................................................................16
-------
2.8.3 Regular Meetings.....................................................................17
----------------
2.9 Goals and Incentives..........................................................................17
--------------------
3. THE GHX EXCHANGE.......................................................................................17
3.1 Maintenance as Leading Provider...............................................................17
-------------------------------
3.2 User Registration.............................................................................18
-----------------
3.2.1 NPS..................................................................................18
---
3.2.2 GHX Exchange.........................................................................18
------------
3.2.3 Novation Marketplace.................................................................19
--------------------
3.3 Notice of Novation Contracts..................................................................19
----------------------------
3.4 Provision of Product Information..............................................................20
--------------------------------
3.4.1 Provision of Non-Novation Contract Product Information...............................20
------------------------------------------------------
3.4.2 Provision of Novation Contract Product and [*****]...................................20
--------------------------------------------------
3.5 Removal of Materials and Products from NPS....................................................20
------------------------------------------
<PAGE>
TABLE OF CONTENST
(continued)
PAGE
3.5.1 Removal of Materials.................................................................20
--------------------
3.5.2 Removal of Products..................................................................20
-------------------
3.6 Other GPOs....................................................................................20
----------
3.7 Reasonable Assistance.........................................................................21
---------------------
4. NOVATION PROPRIETARY SERVICES AND CHANGES IN SERVICES..................................................21
4.1 Novation Proprietary Services.................................................................21
-----------------------------
4.2 Change Control for Novation Proprietary Services..............................................21
------------------------------------------------
4.2.1 Change Control Procedure.............................................................21
------------------------
4.2.2 Adjustment in [*****]................................................................22
---------------------
4.2.3 Emergency Changes....................................................................22
-----------------
5. SERVICE PROVIDER EXCLUSIVITY...........................................................................22
5.1 Exclusivity...................................................................................22
-----------
5.2 Marketing Other Services To Members...........................................................22
-----------------------------------
6. LICENSES...............................................................................................22
6.1 Marks.........................................................................................22
-----
6.2 Service Provider Materials....................................................................23
--------------------------
6.3 Novation Materials............................................................................23
------------------
6.4 Licenses; Source Code Escrow; Proprietary Rights..............................................23
------------------------------------------------
6.4.1 Access License.......................................................................23
--------------
6.4.2 License to Service Provider..........................................................24
---------------------------
6.4.3 Grant of Source Code License.........................................................24
----------------------------
6.4.4 Third Party Technology...............................................................26
----------------------
6.4.5 Source Code Escrow...................................................................26
------------------
6.4.6 Proprietary Rights; Restrictions.....................................................28
--------------------------------
7. FEES AND TAXES.........................................................................................28
7.1 Fees..........................................................................................28
----
7.2 Taxes.........................................................................................29
-----
7.3 Other Expenses................................................................................29
--------------
7.4 Payment Terms.................................................................................29
-------------
7.4.1 Invoices.............................................................................29
--------
7.4.2 Payments.............................................................................29
--------
7.4.3 Credits..............................................................................29
-------
7.5 Member-Based Pricing..........................................................................29
--------------------
7.5.1 Conversion to Member-Based Pricing...................................................29
----------------------------------
7.5.2 [*****] Member-Based Pricing.........................................................30
----------------------------
8. TERM AND TERMINATION...................................................................................30
8.1 Initial Term..................................................................................30
------------
8.2 Renewal and Extension of Term.................................................................30
-----------------------------
<PAGE>
TABLE OF CONTENST
(continued)
PAGE
8.3 Termination for Cause or Dissolution..........................................................30
------------------------------------
8.3.1 For Cause............................................................................30
---------
8.3.2 [*****] [*****]......................................................................31
---------------
8.3.3 Termination of Merger Agreement......................................................31
-------------------------------
8.4 Termination for Insolvency Events.............................................................31
---------------------------------
8.4.1 Service Provider Insolvency Event....................................................31
---------------------------------
8.4.2 Novation Insolvency Event............................................................32
-------------------------
8.4.3 [*****] [*****] [*****] [*****]......................................................32
-------------------------------
8.5 Termination Upon Service Provider Change of Control...........................................33
---------------------------------------------------
8.6 Return of Materials...........................................................................33
-------------------
8.7 Survival......................................................................................34
--------
8.8 Termination Assistance Services...............................................................34
-------------------------------
8.9 Equitable Remedies............................................................................34
------------------
9. DATA RIGHTS; INTELLECTUAL PROPERTY....................................................................34
9.1 Data Rights...................................................................................34
-----------
9.1.1 Member Data..........................................................................34
-----------
9.1.2 Transaction Data.....................................................................35
----------------
9.1.3 Aggregated GHX Data..................................................................35
-------------------
9.1.4 Aggregated Alliance Member Data......................................................36
-------------------------------
9.1.5 Product Data.........................................................................36
------------
9.2 Analytic Data.................................................................................36
-------------
9.3 No Other Licenses or Use......................................................................36
------------------------
9.4 Ownership by Third Parties....................................................................36
--------------------------
9.5 Intellectual Property.........................................................................37
---------------------
9.5.1 Deliverables.........................................................................37
------------
9.5.2 Proprietary Rights; Restrictions.....................................................37
--------------------------------
10. SAFEGUARDING OF DATA; CONFIDENTIALITY..................................................................38
10.1 Confidentiality...............................................................................38
---------------
10.1.1 Confidential Information.............................................................38
------------------------
10.1.2 Confidentiality Obligations..........................................................38
---------------------------
10.1.3 Exclusions...........................................................................38
----------
10.1.4 No License...........................................................................39
----------
10.1.5 Loss of Confidential Information.....................................................39
--------------------------------
10.2 Safeguarding of Data..........................................................................39
--------------------
10.3 Business Associate Provisions.................................................................39
-----------------------------
11. REPRESENTATIONS, WARRANTIES AND COVENANTS..............................................................40
11.1 Representations by Service Provider...........................................................40
-----------------------------------
11.1.1 Due Organization.....................................................................40
----------------
11.1.2 Authority; Non-Contravention.........................................................40
----------------------------
11.1.3 Performance..........................................................................41
<PAGE>
TABLE OF CONTENST
(continued)
PAGE
-----------
11.1.4 Extension of Other Agreements........................................................41
-----------------------------
11.1.5 Source Code Escrow...................................................................41
------------------
11.1.6 Agreements...........................................................................41
----------
11.2 Representations by Novation, VHA, UHC and HPPI................................................42
----------------------------------------------
11.2.1 Due Organization.....................................................................42
----------------
11.2.2 Authority; Non-Contravention.........................................................42
----------------------------
11.3 Compliance with Laws and Regulations; Other Covenants.........................................43
-----------------------------------------------------
11.3.1 Compliance with Laws.................................................................43
--------------------
11.3.2 HHS and Comptroller General..........................................................43
---------------------------
11.3.3 No Exclusion or Debarment............................................................44
-------------------------
11.3.4 No Exchange of Competitively Sensitive Information...................................44
--------------------------------------------------
11.4 Warranty Disclaimer...........................................................................44
-------------------
12. USE OF SUBCONTRACTORS; RIGHTS TO REQUEST REPLACEMENT...................................................45
12.1 Generally.....................................................................................45
---------
12.2 Right to Request Replacement..................................................................45
----------------------------
12.3 Continuing Responsibility.....................................................................45
-------------------------
12.4 Confidential Information......................................................................45
------------------------
13. INSURANCE..............................................................................................45
13.1 Insurance.....................................................................................45
---------
13.2 Proof of Insurance............................................................................45
------------------
14. INDEMNITY..............................................................................................46
14.1 Service Provider Indemnity....................................................................46
--------------------------
14.2 Novation Indemnity............................................................................46
------------------
14.3 Infringement Claims...........................................................................47
-------------------
14.3.1 Indemnity............................................................................47
---------
14.3.2 Indemnity Exclusions.................................................................47
--------------------
14.3.3 Injunction or Prohibition............................................................48
-------------------------
14.4 Indemnity Procedures..........................................................................48
--------------------
14.5 Exclusive Remedy..............................................................................48
----------------
15. LIMITATION OF LIABILITY................................................................................48
16. AUDIT RIGHTS...........................................................................................49
16.1 General.......................................................................................49
-------
16.2 Frequency of Audits...........................................................................49
-------------------
16.3 Auditors......................................................................................49
--------
16.4 Record Retention..............................................................................50
----------------
16.5 Cooperation...................................................................................50
-----------
16.6 Overcharges and Undercharges..................................................................50
----------------------------
16.7 Audit Reports.................................................................................50
-------------
<PAGE>
TABLE OF CONTENST
(continued)
PAGE
17. DISPUTE RESOLUTION.....................................................................................50
18. GENERAL PROVISIONS.....................................................................................50
18.1 No Waiver.....................................................................................50
---------
18.2 Entire Agreement..............................................................................50
----------------
18.3 Publicity.....................................................................................51
---------
18.4 Assignment; Successors and Assigns............................................................51
----------------------------------
18.5 Governing Law.................................................................................51
-------------
18.6 Notices.......................................................................................51
-------
18.7 No Agency.....................................................................................52
---------
18.8 Force Majeure.................................................................................52
-------------
18.8.1 Performance Excused..................................................................52
-------------------
18.8.2 Period of Excused Performance........................................................53
-----------------------------
18.8.3 Critical Functions...................................................................53
------------------
18.9 Severability..................................................................................53
------------
18.10 Counterparts..................................................................................53
------------
18.11 Headings......................................................................................53
--------
18.12 Section 365(n) Matters........................................................................53
----------------------
18.13 Additional Members............................................................................54
------------------
18.14 Termination of Neoforma Outsourcing Agreement.................................................54
---------------------------------------------
19. [*****] OF [*****].....................................................................................54
19.1 [*****] and [*****] [*****]...................................................................54
---------------------------
19.2 [*****] and [*****] [*****]...................................................................54
---------------------------
19.3 [*****] of [*****]............................................................................55
------------------
<PAGE>
TABLE OF CONTENST
(continued)
PAGE
EXHIBIT A: MIGRATION PLAN
EXHIBIT B: SCOPE OF SERVICES
EXHIBIT C: SERVICE LEVELS, METRICS AND PERFORMANCE CREDITS
EXHIBIT D: MEMBER-FACING PLAN
EXHIBIT E: FORM OF MEMBER AGREEMENT
EXHIBIT F: REPORTS AND METRICS
EXHIBIT G: REGISTRATION AND PASSWORD ISSUANCE AND PROTECTION PROCEDURES
EXHIBIT H: Intentionally Omitted.
EXHIBIT I: NOVATION'S TRADEMARK USAGE GUIDELINES
EXHIBIT J: SERVICE PROVIDER'S TRADEMARK USAGE GUIDELINES
EXHIBIT K: VHA'S, UHC'S AND HPPI'S TRADEMARK USAGE GUIDELINES
EXHIBIT L: Intentionally Omitted
EXHIBIT M: CERTAIN AGREEMENTS
EXHIBIT N: EXTENSION OF CERTAIN AGREEMENTS
EXHIBIT O: SERVICE PROVIDER GUIDING PRINCIPLES
EXHIBIT P: LETTER AGREEMENT
</TABLE>
<PAGE>
OUTSOURCING AGREEMENT
This Outsourcing Agreement ("AGREEMENT") executed as of October 10,
2005 and effective as of the "EFFECTIVE TIME" as defined below, by and among
Global Healthcare Exchange, LLC, a limited liability company organized under the
laws of Delaware with offices at 11000 Westmoor Circle, Suite 400, Westminster,
CO 80021 ("SERVICE PROVIDER"), Novation, LLC, a Delaware limited liability
company with offices at 125 East John Carpenter Freeway, Irving, Texas 75062
("NOVATION"), Healthcare Purchasing Partners International, LLC, a Delaware
limited liability company with offices at 125 East John Carpenter Freeway,
Irving, Texas 75062 ("HPPI"), VHA Inc., a Delaware corporation with offices at
220 East Las Colinas Boulevard, Irving, Texas 75039-5500 ("VHA"), and University
HealthSystem Consortium, an Illinois corporation with offices at 2001 Spring
Road, Suite 700, Oak Brook, Illinois 60523 ("UHC"). Capitalized terms not
otherwise defined herein shall have the respective meanings set forth in Section
1 below.
RECITALS
WHEREAS, Service Provider is a provider of Internet e-commerce services
to the healthcare industry facilitating the sale, rental, lease and license of
new and used equipment, products, supplies, services, information and other
content, by allowing electronic orders to be placed and received for the
foregoing and by providing online information and analytic capabilities
regarding the foregoing;
WHEREAS, VHA and UHC are organizations whose Members are hospitals and
healthcare providers, and which view e-commerce services as an essential part of
their cooperative purchasing programs on behalf of their Members and desire to
cause such services to be available to their Members through this Agreement;
WHEREAS, VHA and UHC together own all the ownership interests in
Novation and HPPI;
WHEREAS, Novation is a contracting agent that also develops and
delivers supply chain management agreements, programs and services on behalf of
VHA and UHC and their Members;
WHEREAS, HPPI is a GPO that serves healthcare organizations that are
not members of VHA and UHC and other GPOs and which develops and delivers
supply-chain management programs and services to such healthcare organizations;
WHEREAS, the Parties desire to establish a relationship to enable the
Parties to achieve increased efficiency and cost savings through Internet-based
technology and pursuant to which Service Provider will provide the GHX Exchange,
the Novation Proprietary Services and other Services for the benefit of the
Members of VHA and UHC and the associated healthcare organizations of HPPI;
WHEREAS, Novation, VHA, UHC and HPPI are parties to the Neoforma
Outsourcing Agreement and desire to transition the services provided thereunder
to Service Provider in accordance with this Agreement; and
<PAGE>
WHEREAS, certain of the Parties have entered into the Merger Agreement
pursuant to which Neoforma will become a wholly-owned subsidiary of Service
Provider.
NOW, THEREFORE, for good and valuable consideration, the Parties agree
as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the
respective meanings set forth below. Other capitalized terms shall have the
meanings set forth elsewhere in this Agreement.
"ACTIVATION EVENT" has the meaning set forth in Section 6.4.3(d).
"AFFILIATE(S)" means, with respect to a specified Person, any other
Person that, directly or indirectly, through one or more intermediaries,
Controls, is Controlled by or is under common Control with such specified
Person. Service Provider, on the one hand, and Novation, VHA, HPPI and/or UHC,
on the other hand, shall not be Affiliates of each other.
"AGGREGATED ALLIANCE MEMBER DATA" means a compilation prepared by or on
behalf of any Alliance consisting of Member Data with respect to any two or more
Members of the Alliance in question.
"AGGREGATED GHX DATA" means a compilation prepared by Service Provider
of Transaction Data of Members and of non-Members (i.e., other customers of
Service Provider) concerning which Service Provider has taken commercially
reasonable precautions to ensure that no individual, particular transaction or
entity (including, without limitation, a Member or a GPO) can be identified.
"AGREEMENT" has the meaning set forth in the Preamble.
"ALLIANCE" means UHC, VHA or HPPI, as applicable.
"ALLSOURCE(R) CATALOG" means the Product Data of multiple Suppliers,
organized according to the Classification Scheme.
"ANALYTIC DATA" means all or any portion of the information and data
created or generated from the analysis of Member Data and/or [*****] in
accordance with the terms hereof.
"ANALYTICS" means the software or other functionality that enables a
User to review, analyze and/or report on Member Data and [*****].
"CHANGE" has the meaning set forth in Section 4.2.1.
"CHANGE REQUEST" has the meaning set forth in Section 4.2.1.
--------------------
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSION.
<PAGE>
"CHARGES" has the meaning set forth in Section 7.4.1.
"CLASSIFICATION SCHEME" means Service Provider's proprietary
classification scheme for Product Data made available through the GHX Exchange.
"CLIENT SOFTWARE" means the software licensed by Service Provider to
the Participating Members, including any manuals and other available
documentation therefor, and including any Updates thereto, but not including any
Third Party Technology.
"COMPETITOR" means any Person that, at the time of determination, would
reasonably be considered to be a competitor of Novation, VHA, UHC or HPPI.
"CONFIDENTIAL INFORMATION" has the meaning set forth in Section
10.1.1.
"CONTENT" means any text, graphics, logos, button icons, images, audio
clips, HTML code, java programs and other material used or displayed as part of
or in connection with the GHX Exchange, the Novation Marketplace or NPS, other
than Product Data.
"[*****]" or "[*****]" means [*****] on [*****] use of the [*****] and
[*****], as more particularly described in [*****].
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and operating policies of the
entity in respect of which the determination is being made, through the
ownership of voting securities, contract, voting trust or otherwise.
"CURRENT VERSION" has the meaning set forth in Section 6.4.5(a).
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