Exhibit 10.3
In this document an "#" indicates that confidential material has been omitted
pursuant to a request for confidential treatment filed with the Office of the
Secretary of the Securities and Exchange Commission together with the omitted
material.
VENDOR SERVICES AGREEMENT
THIS VENDOR SERVICES AGREEMENT is made and entered into effective
as of the 28th day of September 2001 (the "Effective Date"), by and between
Express Scripts, Inc. a Delaware corporation ("ESI") and Medix Resources,
Inc., a Colorado corporation (collectively, with its wholly-owned
subsidiaries, referred to herein as "Vendor"). Vendor and ESI are sometimes
hereinafter referred to as a "Party" or the "Parties."
WHEREAS, ESI is engaged in the business of providing pharmacy
benefits management services to various health plans and other payors with
whom it has entered into arrangements for such services;
WHEREAS, Vendor has developed various programs and services
including, but not limited to, software that facilitates prescriber
connectivity at the point-of-care allowing physicians and other healthcare
professionals to write prescriptions and to access healthcare information as
a means of enhancing the efficacy of patient care and the efficiency of
healthcare benefits administration; and
WHEREAS, ESI desires to engage Vendor to provide and Vendor
desires to provide certain services to ESI that will assist ESI in providing
pharmacy benefit management services to ESI's customers.
NOW, THEREFORE, the Parties agree to be bound as follows:
1. DEFINITIONS
"Affiliate" means, as to any Party, any corporation or other
entity which, directly or indirectly, through one or more intermediaries,
controls (i.e., possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of an entity, whether
through ownership of voting securities, by contract, or otherwise), is
controlled by, or is under common control with such Party.
"Best Efforts" means, as to a Party, an undertaking by such Party
to perform or satisfy an obligation or duty or otherwise act in a manner
reasonably calculated to obtain the intended result by action or expenditure
not disproportionate or unduly burdensome in the circumstances.
"Eligible Prescriber" means a physician or other healthcare
professional authorized by law to write prescriptions who has entered into an
agreement directly or indirectly with Vendor to use the Vendor System.
"ESI Client" means an entity for which ESI has directly or
indirectly agreed to provide PBM Services.
"ESI Formulary" means a Formulary managed by ESI on behalf of
itself or one or more ESI Clients
"ESI Patient" means an enrollee in a health plan sponsored or
administered by an ESI Client.
"ESI Physician" means an Eligible Prescriber who provides medical
care to an ESI Patient and utilizes the Vendor System for prescribing
pharmaceutical products to such patient in connection with such care.
"ESI System" means the proprietary system of ESI comprised of one
or more computer systems (including hardware, software and electronic data
transmission network(s)) owned and maintained by ESI for purposes of
providing PBM Services to ESI Clients and their enrollees.
"Formulary" means a list of pharmaceutical products intended to
assist prescribers or others in the selection of such products for patients
covered by a related pharmaceutical benefit plan. A Formulary may be open,
closed or otherwise reflect coverage restrictions or limitations, may include
information concerning the beneficiary's financial obligation (e.g.,
co-payment) associated with drugs on the Formulary, and may include other
information such as prior authorization requirements or other matters of
interest to prescribers.
"Initial Phase" means the period of time commencing as of the
Effective Date and ending on the last day of the sixth calendar month
following the month in which the first Initial Phase Physician is able to
access the Vendor System and write prescriptions using ESI Formulary and ESI
Patient information provided pursuant to this Agreement.
"Initial Phase Physicians" means a certain group of at least 175
Atlanta metropolitan area physicians mutually agreed to between the Parties
with respect to who the Vendor System will be installed and used at
reasonable levels for purposes of (i) accessing information related to ESI
Formularies and ESI Patients and (ii) writing and transmitting prescriptions
electronically during the Initial Phase.
"Messages" means any information that is sent and/or received
between the ESI System and Eligible Prescribers via the Vendor System.
"Patient Confidential Information" means individually
identifiable patient information and other confidential information regarding
a patient, including but not limited to information pertaining to the
patient's health history, diagnosis or treatment.
"PBM" means a pharmacy benefits management company or other
similar entity providing PBM Services.
"PBM Services" means any one or more services typically provided
by a PBM, including, without limitation, design, management or administration
of pharmacy benefits, pharmaceutical claims adjudication, retail pharmacy
network management, mail order pharmacy operations, rebate management, and
formulary design and/or management.
"Proprietary Information" means all proprietary and non-public
information and data that concerns the business, technology, systems,
finances, personnel, operations, or other assets and activities of a Party,
including, but not limited to, trade secrets, ideas, processes, formulas,
systems, source codes, data programs, other original works of authorship,
know-how, improvements, discoveries, developments, designs, inventions,
techniques, marketing plans, information systems, strategies forecasts, new
products, unpublished financial statements, budgets, projections, licenses,
rates, prices (including the fees charged under this Agreement), costs,
customer lists, and supplier lists not available to the public. Proprietary
Information does not include information generally available to the public
other than as a result of improper disclosure by a Party or its agents or
employees receiving such information under this Agreement.
"Service Fee" means the fees payable to Vendor by ESI as
contemplated in Section 6.1.
"Term" means the period of time during which this Agreement is
made to be effective by and between the Parties, pursuant to the provisions
of Section 9.1.
"Vendor Services" means those services rendered by Vendor to ESI
pursuant to Section 4 below and as further described in Exhibit A attached
hereto.
"Vendor System" shall mean the proprietary system developed by
Vendor to facilitate prescriber connectivity at the point-of-care, consisting
of software, information and materials designed and developed by Vendor to
provide physicians and their staff with ESI Patient data through interface
with the ESI System and facilitate prescription transactions by Eligible
Prescribers for ESI Patients. The functionalities and services of the Vendor
System to be provided by Vendor pursuant to this Agreement are described on
Exhibit A to this Agreement.
2. Representations and Warranties
2.1 Representations and Warranties of Vendor
Vendor represents, warrants, and covenants that:
2.1.1 Licenses; Compliance with Law
Vendor has all necessary licenses required to perform its
obligations hereunder, is in good standing to perform its obligations
hereunder, and will perform such obligations in compliance with all
applicable state and federal laws and regulations affecting such services.
Vendor will take all necessary action to ensure that all prescriptions
generated by use of the Vendor System will be valid, legal prescriptions in
the states in which Vendor operates.
2.1.2 Authority of Vendor
Vendor has full power and authority to enter into this Agreement
as described herein, and the execution, delivery and performance of this
Agreement does not conflict with or result in a default under any other
agreements or obligations to which Vendor is a party or is otherwise subject.
This Agreement has been duly and lawfully authorized by all necessary
corporate action and this Agreement constitutes a valid and enforceable
obligation of Vendor in accordance with its terms.
2.2 Representations and Warranties of ESI.
ESI represents, warrants, and covenants that:
2.2.1 Licenses; Compliance with Law
ESI has all necessary licenses required to perform its
obligations hereunder, is in good standing to perform its obligations
hereunder, and will perform such obligations in compliance with all
applicable state and federal laws and regulations affecting such obligations.
2.2.2 Authority of ESI
ESI has full power and authority to enter into this Agreement as
described herein, and the execution, delivery and performance of this
Agreement does not conflict with or result in a default under any other
agreements or obligations to which ESI is a party or is otherwise subject.
This Agreement has been duly and lawfully authorized by all necessary
corporate action and this Agreement constitutes a valid and enforceable
obligation of ESI in accordance with its terms.
3. INITIAL PHASE
3.1 Implementation Plan Development
During the thirty (30) day period immediately following the
Effective Date of this Agreement, the Parties shall work together in good
faith to identify the Initial Phase Physicians for purposes of this Agreement
and develop a mutually agreeable plan and timeline for deployment of the
Vendor System to the Initial Phase Physicians with the functional
requirements described on Exhibit A to this Agreement on or before April 1,
2002. Such plan shall include provisions for (i) testing the data
communications between Vendor and ESI with respect to the accurate
transmission of all information to be exchanged between the Parties pursuant
to this Agreement, (ii) a detailed walk-through of all ESI requirements, and
(iii) ESI's review and approval of all Messages to be presented to Eligible
Prescribers. Each of the Parties shall use its Best Efforts to complete all
tasks assigned to such Party in connection with the foregoing plan and
timeline. In the event that this Agreement continues in effect subsequent to
the Initial Phase, the Parties shall work together in good faith, as
necessary, to determine and implement mutually acceptable modifications to
the foregoing plan and timeline for purposes of expanding the geographic
deployment of the Vendor System and the availability of ESI Information to
all Eligible Prescribers.
3.2 Vendor Obligations
During the Initial Phase, Vendor shall provide all of the Vendor
Services and fulfill all other obligations described in Section 4 of this
Agreement with respect to (i) all of the Initial Phase Physicians and (ii)
all information made available by ESI to Vendor with respect to ESI Patients
receiving services from the Initial Phase Physicians. Notwithstanding
anything in this Agreement to the contrary, Vendor shall not be obligated to
provide such services with respect to Eligible Prescribers other than Initial
Phase Physicians during the Initial Phase.
3.3 ESI Obligations
During the Initial Phase ESI will provide relevant ESI Patient
and ESI Formulary information in accordance with the provisions of Section 5
of this Agreement with respect to patients who receive services from the
Initial Phase Physicians. Notwithstanding anything in this Agreement to the
contrary, ESI shall not be obligated to provide such information with respect
to Eligible Prescribers other than Initial Phase Physicians during the
Initial Phase.
4. VENDOR RIGHTS AND OBLIGATIONS
4.1 Vendor Services
During the Term of this Agreement, Vendor shall perform the
Vendor Services as defined in and as more particularly described in Exhibit A
attached hereto. Vendor shall use its Best Efforts to perform, and to cause
its subcontractors to perform, the Vendor Services in a prompt, competent and
businesslike manner, and, upon ESI's request, to make reasonably acceptable
modifications to the Vendor Services to the extent necessary to conform with
provisions of ESI's contracts with ESI Clients. Vendor shall use Best
Efforts to recruit physicians to become Eligible Prescribers.
4.2 Vendor Facilities, Equipment, Systems and Personnel
During the Term of this Agreement, Vendor shall operate and
maintain all necessary and appropriate computer hardware and software,
facilities, processes, systems and other equipment and personnel to enable
Vendor to provide the Vendor Services in accordance with this Agreement.
Vendor will use Best Efforts to ensure that the Vendor System provides Vendor
Services to Eligible Prescribers at a level competitive with those services
offered by Vendor's competitors in the electronic prescribing and/or
physician interconnectivity industry. The Vendor System will at all times be
designed and operated consistent with applicable law, including without
limitation all applicable law relating to the protection of individually
identifiable patient information. Upon reasonable request, ESI may conduct
an audit of Vendor's procedures and business practices pertaining to the
Vendor Services, and the elements of the Vendor System pertaining to
prescribing by Eligible Prescribers for ESI Patients, to ensure compliance
with the provisions of this Agreement.
4.3 Reports
Subject to the terms of this Agreement and all applicable laws
and regulations, Vendor will provide ESI with monthly reports, within ten
(10) business days of the beginning of each calendar month, setting forth (i)
the data specified in Schedule A-1 of Exhibit A to this Agreement and (ii)
such other information as mutually agreed upon by the Parties from time to
time.
4.4 Access to Data and Records
Vendor shall provide ESI with full access to all data generated
by Vendor in connection with the Vendor Services pertaining to prescribing by
ESI Physicians. Furthermore, Vendor shall assist ESI in conducting ESI's own
internal review of such data for purposes of monitoring the progress and
conduct of the Vendor Services. Vendor shall assist and cooperate with ESI's
auditors in the conduct of the annual audit of ESI's financial records and
operations subject to Vendor's right to reimbursement of reasonable costs in
connection with such efforts. Until the expiration of four years after the
performance of Vendor Services under this Agreement or such longer period as
may otherwise be required by applicable law, Vendor shall maintain copies of
such books and records as may be reasonably necessary to verify the extent
and nature of the Vendor Services provided pursuant to this Agreement.
4.5 Insurance
Vendor, on its own behalf and at its expense, shall maintain
general commercial liability and professional liability insurance with
reasonable limits insuring both Vendor and its employees and agents from
claims arising from their respective acts and omissions in connection with
the Vendor Services.
4.6 Demonstration Support
During the Term of this Agreement, Vendor shall provide ESI with
remote access to the portion of the Vendor System supporting the Vendor
Services for purposes of allowing ESI to demonstrate the functionalities of
the Vendor System to ESI Clients and other potential customers of ESI.
4.7 Agreements with other PBMs and ESI Clients
Subject to the rights of ESI as set forth in this Agreement,
Vendor shall retain the right to negotiate and enter into agreements with
other PBMs. Vendor agrees that ESI will have an exclusive right to represent
ESI Clients with respect to pharmaceuticals and PBM Services, and thus Vendor
will not contract directly or indirectly with any ESI Client for pharmacy
related services (excluding e-detailing). Notwithstanding the foregoing,
with respect to ESI Clients for which ESI does not provide services for all
of the applicable client's lines of business, Vendor shall not be restricted
from approaching such clients in connection with providing services for
non-ESI lines of business.
4.8 Project Management
Vendor shall designate and communicate to ESI those Vendor
personnel responsible for business, product development, testing, deployment,
support and utilization services related to the Vendor Services. Vendor
shall also provide a dedicated project manager acceptable to ESI to be
responsible for management of all activities and obligations of Vendor with
respect to the Vendor Services and to provide weekly updates to the ESI
project manager regarding tasks assigned to Vendor, as applicable.
4.9 Quality Assurance
Vendor shall provide ESI with a reasonable means of reviewing
information provided by ESI for deployment via the Vendor System as it will
appear on the Vendor System prior to such information being made available to
Eligible Prescribers. Vendor shall implement any corrections to such
information no later than five (5) business days following Vendor's receipt
of verbal or written notice of such corrections from ESI; provided that, to
the extent such notice is given verbally, ESI shall provide written
confirmation of such notice within the foregoing five (5) day period. Vendor
further agrees to (i) use Best Efforts to ensure that the Vendor System is
available at all times, except for reasonable periods of time for
maintenance, and (ii) respond with reasonable corrective measures within two
(2) hours of Vendor's receiving notice that the Vendor System has become
unavailable to any Eligible Prescriber.
4.10 Customized Messaging
Vendor shall use its Best Efforts to assist ESI in developing
rules and content for purposes of providing customized Messages to Eligible
Prescribers ("Customized Messaging"). Such Customized Messaging shall be
designed to convey information not included in the ESI Information and not
typically used in connection with the prescription writing and
benefits-eligibility process.
5. ESI RIGHTS AND OBLIGATIONS
5.1 ESI Information
Subject to all necessary consents and/or approvals, ESI shall
make available to Vendor the information described in Exhibit B attached
hereto relating to ESI Patients, ESI Formularies and ESI Clients, as
reasonably necessary to allow Vendor to perform the Vendor Services in
accordance with this Agreement (collectively the "ESI Information"). Subject
to the limitations on use and disclosure of Patient Confidential Information
set forth in this Agreement, ESI hereby grants to Vendor, for the Term of
this Agreement, a nonexclusive, revocable, non-assignable, non-transferable
license to integrate, use, reproduce, distribute, and transmit the ESI
Information, and limited portions thereof, in connection with the
distribution and use of the Vendor System in the United States as
contemplated herein, and for no other purpose. Vendor shall not have any
right to alienate, assign, sublicense or otherwise transfer all or any part
of such license. Except as expressly set forth herein, ESI shall retain all
right, title and interest in and to the ESI Information. Vendor represents
and warrants that it (a) shall not use or disclose such ESI Information to
any other third party for any other purpose; and (b) shall, upon request of
ESI or upon termination of this Agreement, return all tangible copies of the
ESI Information to ESI and delete all references to ESI Information from any
database maintained by Vendor or its Affiliates. Vendor warrants that all
such ESI Information, and updates thereof, will be promptly and accurately
loaded on the Vendor System so as to be readily available to Eligible
Prescribers using the Vendor System.
5.2 Use of Vendor Data by ESI
Subject to applicable law and the restrictions set forth in
Section 8 of this Agreement, ESI will be entitled to use all data received
from Vendor in connection with the Vendor Services provided hereunder for
purposes related to (i) ESI's internal business operations (ii) any existing
or proposed business relationship with any ESI Customer, or (iii) the
promotion of ESI's PBM Services.
5.3 Project Management
ESI shall designate and communicate to Vendor those ESI
personnel responsible for business, product development, testing, deployment,
support and utilization services related to the Vendor Services received by
ESI pursuant to this Agreement. ESI shall also provide a dedicated project
manager reasonably acceptable to Vendor to be responsible for management of
all activities and obligations of ESI under this Agreement and to provide
weekly updates to the Vendor's designated project manager regarding tasks
assigned to ESI, as applicable.
5.4 Project Feedback
ESI will, upon reasonable request from Vendor, provide Vendor
with access to information reasonably necessary to evaluate the efficacy of
the Vendor System.
6. FEES AND EXPENSES
6.1 Service Fee Amount
In consideration of Vendor's performance of the Vendor Services
and its other obligations hereunder, ESI shall pay to Vendor the Service Fee
set forth in Exhibit C to this Agreement with respect to Eligible Prescribers
who access the Vendor System and write prescriptions using ESI Formulary and
ESI Patient information provided pursuant to this Agreement.
6.2 Payment of Service Fee
During the Term of this Agreement, Vendor shall provide ESI with
monthly invoices for any Service Fees due with respect to the previous
calendar month in accordance with the provisions of Exhibit C to this
Agreement. Such invoices shall include reasonably detailed summaries of the
components used to calculate the total amount due to Vendor on each invoice.
Payment from ESI to Vendor shall be due no later than thirty (30) days
following ESI's receipt of each such invoice. The foregoing notwithstanding,
to the extent that ESI determines, and provides reasonably detailed
documentation to Vendor to support such determination, that ESI has paid
Vendor more than it was entitled to receive hereunder in connection with any
invoice dated no earlier than One Hundred Eighty (180) days prior to such
determination, ESI shall receive either (i) a credit from Vendor on all
future invoices, as necessary to compensate ESI for such overpayment, or (ii)
a check in the amount of such overpayment from Vendor.
6.3 Costs Associated with This Agreement
Except as otherwise provided in this Agreement, ESI and Vendor
shall each be responsible for the cost and expense of its own legal,
accounting and other professional services associated with the preparation,
negotiation and performance of this Agreement.
6.4 Taxes and Other Governmental Obligations
All taxes or other governmental obligations required of or
imposed on a Party in connection with or as a result of its performance of
its obligations under this Agreement shall be the sole obligation of such
Party.
7. INTELLECTUAL PROPERTY
Vendor represents and warrants to ESI that, to the best of its
knowledge after reasonable inquiry, the Vendor System, including Vendor's
prescription writing system, is proprietary to Vendor and that the use of the
Vendor System as contemplated herein will not infringe upon any patent,
copyright, trade secret or other proprietary right of any third party.
8. RECORDS, CONFIDENTIALITY AND nondisclosure
8.1 Ownership of Records
All books and records relating to the operations of ESI,
including but not limited to all books of account, ESI Patient records, and
general administrative records, shall be and remain the property of ESI;
provided, that, subject to the provisions of this Agreement relating to
confidentiality of records, Vendor may maintain copies of any such records
received by Vendor in connection with this Agreement as necessary to comply
with Section 8.2 below and for Vendor's archival purposes.
8.2 Confidentiality and Non-Disclosure
8.2.1 Non-Disclosure of Proprietary Information
Except as expressly provided for in this Agreement, each Party
(as the "Receiving Party") shall, and shall cause its Affiliates and its and
their respective officers, directors, employees, agents and subcontractors
(collectively, "Representatives") to, preserve the confidential nature of and
keep in strictest confidence all Proprietary Information of or acquired from
another Party, its Affiliates or any of their respective Representatives
(collectively, the "Disclosing Party") (regardless of the form or medium used
to store or communicate such information or whether such information is
observed) in connection with the relationship contemplated by this Agreement,
and the Receiving Party shall not use, reproduce or disclose, directly or
indirectly, and shall cause its respective Affiliates and Representatives not
to use, reproduce or disclose, directly or indirectly, any Proprietary
Information of the Disclosing Party to any third party; provided, however,
that the foregoing restrictions shall not apply to any Proprietary
Information disclosed to a third party by the Receiving Party or its
Affiliate or one or more of their respective Representatives, if the
Receiving Party, such Affiliate or Representative can demonstrate that such
Proprietary Information:
(i) is or hereafter becomes generally available to the trade or
public other than by reason of any breach of this Section 8.2.1;
(ii) was already known to the Receiving Party or such Affiliate
or Representative as shown by written records; or
(iii) is disclosed to the Receiving Party or such Affiliate or
Representative by a third party who has the right to disclose such
information.
Upon request, each Party shall either promptly return to a
Disclosing Party all documents and materials, and all copies thereof,
containing any Proprietary Information of the disclosing Party, or shall
destroy all such items, as the Disclosing Party may direct, except as may be
reasonably necessary for the Party in possession of such documents or
materials to preserve its business records, provided that reasonable measures
are implemented to preserve the confidentiality of such records.
8.2.2 Disclosure Required by Governmental Authority
Notwithstanding Section 8.2.1 above, if the Receiving Party is
requested or required in a judicial, administrative or governmental
proceeding of competent jurisdiction to disclose any Proprietary Information,
the Receiving Party shall promptly notify the Disclosing Party so that the
Disclosing Party may either seek an appropriate protective order or waiver.
If the Receiving Party is nevertheless required to disclose such Proprietary
Information in any court or administrative tribunal or to any governmental
agency of competent jurisdiction, the Receiving Party may disclose such
Proprietary Information without liability under this Section 8.2.
8.3 Confidentiality of Patient Information
The Parties agrees that any Patient Confidential Information
disclosed to Vendor pursuant to this Agreement Party shall be (a) used only
as necessary and appropriate to carry out the provisions of this Agreement,
and (b) disclosed only as specifically provided for under this Agreement or
required by law. Vendor shall use all reasonable and appropriate safeguards
to prevent any unauthorized disclosure of Patient Confidential Information
and shall report to ESI any unauthorized disclosure of Patient Confidential
Information belonging ESI. In the event that Vendor uses a subcontractor or
other agent to fulfill any of Vendor's obligations under this Agreement and
it becomes necessary for such subcontractor or agent to receive Patient
Confidential Information disclosed pursuant to this Agreement, Vendor shall
cause any such subcontractor or agent to agree to be bound by the same
restrictions and conditions that apply to Vendor hereunder. In the event
that Vendor is requested or required by a government authority to disclose
Patient Confidential Information received from ESI, Vendor shall treat such
event as if it relates to the Proprietary Information of ESI and shall act in
accordance with Section 8.2 in notifying ESI and providing ESI an adequate
opportunity to object to any disclosure of the applicable Patient
Confidential Information. Vendor further agrees to make Vendor's internal
practices, books and records relating to the use and disclosure of Patient
Confidential Information available to all appropriate government bodies for
purposes of determining Vendor's compliance with all laws relating to the use
and disclosure of such information.
9. TERM AND TERMINATION
9.1 Term and Renewal
The Term of this Agreement shall commence on the Effective Date
hereof and continue for an initial period of three (3) years (the "Initial
Term"), and shall be renewed automatically for additional renewal terms of
three (3) years each, subject to the mutual agreement of both parties, unless
this Agreement has been terminated as provided herein.
9.2 Automatic Termination
This Agreement shall automatically terminate as of April 1, 2002
in the event that Vendor has not provided access to the Vendor System and the
ability to write prescriptions using ESI Formulary and other ESI Information
to at least One Hundred (100) of the Initial Phase Physicians by such date;
provided that ESI has not breached the obligations set forth in Section 3.1
of this Agreement.
9.3 Termination With or Without Cause
Until December 31, 2002, either Party may terminate this
Agreement at any time, with or without cause upon thirty (30) days prior
written notice to the other Party. Beginning as of January 1, 2003, to the
extent that this Agreement has not been earlier terminated, either Party may
terminate this Agreement at any time, with or without cause upon ninety (90)
days prior written notice.
9.4 For Cause Termination
Either Party may terminate this Agreement in the event that the
other Party materially defaults in the performance of a material covenant,
agreement, term, or provision of this Agreement to be performed by such other
Party, and such default shall continue uncured for a period of 30 days after
such Party's receipt of written notice stating with specificity the default.
9.5 Effect of Termination
Upon the termination or expiration of this Agreement, each Party
shall promptly return to the other any books, records, or materials that
belong to such other Party. Except as provided in this Section 9.5 and
Section 10, no Party shall have any further liability or obligation to the
other after termination or expiration of this Agreement. Upon termination of
this Agreement, Vendor shall (a) use Best Efforts to return to ESI, within
thirty (30) days of its request, all Proprietary Information disclosed to
Vendor by ESI regardless of the form or medium in which such information is
stored and (b) reasonably cooperate with ESI to effectuate the orderly
termination of this Agreement, including the transmission to ESI of all
reports and data required pursuant to this Agreement but not yet received by
ESI as of the effective date of termination.
9.6 Final Billing
Upon termination of this Agreement, any Party may request a final
accounting to determine any amounts due to one Party from the other Party
under this Agreement. At the request of either Party, such final accounting
shall be audited by an independent auditor acceptable to the Parties and the
cost of such audit shall be borne by the Party requesting it, or as otherwise
mutually agreed.
10. INDEMNIFICATION AND LIMITATION OF LIABILITY
10.1 Indemnification
10.1.1 Agreement of Vendor to Indemnify
Subject to the conditions, provisions and limitations of this
Section 10, and other applicable provisions of this Agreement, Vendor hereby
agrees to indemnify, defend and hold harmless ESI and its Affiliates (each,
an "ESI Party") from and against all actual and direct damages, costs and
expenses, including, without limitation, interest, penalties and reasonable
attorneys' fees and disbursements, imposed upon or directly incurred by an
ESI Party by reason of or resulting from any of the following:
10.1.1.1. Any negligent act or failure to act or
willful misconduct of Vendor or any violation of law by Vendor, its
employees, officers or agents in connection with performance of the Vendor
Services.
10.1.1.2. Any material breach of or failure to
perform or to properly and accurately perform any of Vendor's obligations,
representations or covenants under this Agreement.
10.1.1.3. The performance of the Vendor System.
10.1.1.4. Any actual or alleged infringement of any
patent or other intellectual property rights in connection with the use of
the Vendor System.
10.1.1.5. Any actual or alleged violation of
applicable law or regulations in connection with the marketing or use of the
Vendor System.
10.1.1.6. Any actual or alleged unauthorized
disclosure by Vendor of Patient Confidential Information.
10.1.2 Agreement of ESI to Indemnify
Subject to the conditions, provisions and limitations of this
Section 10, and other applicable provisions of this Agreement, ESI hereby
agrees to indemnify, defend and hold harmless Vendor and its Affiliates (each
a "Vendor Party") from and against all actual and direct damages, costs and
expenses, including, without limitation, interest, penalties and reasonable
attorneys' fees and disbursements, imposed upon or directly incurred by any
Vendor Party by reason of or resulting from any of the following:
10.1.2.1. Any negligent act or failure to act or
willful misconduct or any violation of law by ESI, its employees, officers or
agents in connection with this Agreement.
10.1.2.2. Any material breach of or failure to
perform or to properly and accurately perform any of ESI's obligations,
representations or covenants under this Agreement.
10.1.3 Conditions of Indemnification
The obligations and liabilities of ESI and Vendor hereunder with
respect to their respective indemnities pursuant to this Section 10.1,
resulting from any claim, demand or other assertion of liability by third
parties (hereinafter called collectively "Demands"), shall be subject to the
following terms and conditions:
10.1.3.1. Subject to the consent of the party to be
indemnified pursuant to this Section 10 (the "Indemnified Party") (such
consent not to be unreasonably withheld or delayed), the indemnifying party
(the "Indemnifying Party") will have the right to undertake, by counsel or
representatives of its own choosing, the defense, compromise or settlement of
any such Demand asserted against the Indemnified Party, such defense,
compromise or settlement to be undertaken on behalf of and for the account
and risk of the Indemnifying Party.
10.1.3.2. In the event the Indemnifying Party shall
elect not to undertake such defense by its own representatives, the
Indemnifying Party shall give prompt written notice of its election to the
Indemnified Party, and the Indemnified Party will undertake the defense,
compromise or settlement thereof by counsel or other representatives
designated by it whom the Indemnifying Party determines in writing to be
satisfactory for such purposes. The consent of the Indemnifying Party to the
Indemnified Party's choice of counsel or other representative shall not be
unreasonably withheld or delayed.
10.1.3.3. In the event that both an ESI Party and a
Vendor Party are subject to the same Demand, then each Party shall (i) assume
its own defense thereof with counsel of its choosing, (ii) bear its own
expenses in the defense thereof, except as otherwise provided herein, and
(iii) forego any settlement or compromise thereof without the consent of the
other Party unless the settlement or compromise includes an unconditional
release in favor of the other party and its Affiliates by all claimants from
any liability therein. Notwithstanding each Party's obligation to conduct
its own defense of any joint Demand and bear its own defense costs therein,
if relative fault is allocated or apportioned therein by final adjudication
or joint settlement primarily to one Party and its Affiliates, that Party
shall be responsible for reimbursing the other Party for all costs incurred
by the Party in the defense thereof. For purposes of this Section 10.1.3.3 a
Party shall be deemed "primarily" at fault only if at least eighty percent
(80%) of such fault is allocated or apportioned to such Party and its
Affiliates.
10.1.4 Survival
The agreements to indemnify contained in this Section 10.1 shall
survive termination or expiration of this Agreement for any reason.
10.1.5 Notice
A party having reason to believe that it may be entitled to
indemnification under this Section 10.1 shall give reasonably prompt written
notice to the other party from whom indemnification may be sought specifying
in reasonable detail the nature and basis of any Demand or other matter
(including actual and direct damages incurred other than as a result of a
third party claim) which may give rise to such indemnification, but such
notice shall not be a condition of such indemnification. The failure of the
Indemnified Party to provide such notice shall not relieve the Indemnifying
Party of its obligations under this Section 10.1, unless the delay or failure
to provide such notice prejudices an Indemnifying Party in a manner that
demonstrably results in actual and direct damages to such Indemnifying Party,
in which event such Indemnifying Party shall be relieved of such obligations
but only to the extent such actual and direct damages resulting from the
delay can be proved.
10.2 Limitation of Liability
NOTWITHSTANDING ANY OTHER PROVISION CONTAINED IN THIS AGREEMENT,
THE PARTIES' LIABILITY UNDER THIS AGREEMENT SHALL BE LIMITED TO ACTUAL AND
DIRECT LOSSES, COSTS AND/OR EXPENSES SUFFERED BY THE OTHER PARTY. THE
PARTIES ACKNOWLEDGE AND AGREE THAT NEITHER PARTY SHALL BE LIABLE FOR ANY LOST
REIMBURSEMENT OR LOSS OF DATA, EARNINGS, PROFITS OR GOODWILL OR ANY OTHER
INDIRECT, CONSEQUENTIAL, INCIDENTAL, EXEMPLARY OR PUNITIVE DAMAGES SUFFERED
BY ANY PERSON OR ENTITY, INCLUDING THE OTHER PARTY.
10.3 Remedies Upon Termination or Default
Subject to the dispute resolution provisions in Section 10 and
the limitations of liability in Section 10.2, each Party shall also have all
remedies other than termination available to it at law or in equity on
account of any default of another Party that is not cured as provided in this
Agreement.
11. DISPUTE RESOLUTION
If any dispute or controversy arises among the Parties with
respect to: the making, construction, terms, or interpretation of this
Agreement; or the rights of any Party; or with respect to any question
regarding any breach of this Agreement, it shall be referred to binding
arbitration before three arbitrators within 30 days after the notice of a
dispute. The arbitral panel shall be composed of one arbitrator appointed by
Vendor, one appointed by ESI, and one selected by mutual agreement of the two
selected arbitrators. The arbitral panel shall follow the rules of the
American Arbitration Association unless otherwise directed by Vendor and ESI
in writing. The decision of the arbitral panel shall be set forth in a
written opinion and shall be binding on the Parties. The Parties agree to
make their respective records available to each other in the arbitration
without recourse to formal discovery and to make their respective personnel
available for testimony in the arbitration. Any costs associated with such
proceedings shall be borne equally by the Parties; provided that, each Party
shall bear the costs of its own counsel and technical or consulting support
in connection with the arbitration. Pending final determination of a dispute
hereunder, ESI and Vendor shall proceed diligently with their performance of
this Agreement.
12. CHANGE IN LAW
In the event that legislation is enacted or regulations are
promulgated or a decision of a court is rendered that affect, or may affect
in the good faith opinion of either Party's legal counsel, the legality of
this Agreement or adversely affect the ability of either Party to perform its
obligations or receive the benefits intended hereunder, then, within fifteen
(15) days following notice, each Party will negotiate in good faith an
amendment to this Agreement or a substitute agreement which will carry out
the original intention of the Parties to the extent possible in light of such
legislation, regulation or decision and each Party will execute such
amendment. In the event that the Parties cannot reach agreement as to the
terms and provisions of the amendment or substitute agreement within thirty
(30) days following the notice provided in this Section, then this Agreement
may be terminated by either Party upon written notice of termination to the
other Party stating the effective date of termination.
13. MISCELLANEOUS
13.1 Audit Rights
ESI will have the right to conduct a reasonable annual audit of
Vendor's books and records, directly relating to Vendor's performance of its
obligations hereunder during normal business hours on prior written notice
for the purpose of verifying Vendor's compliance with the terms and
conditions of this Agreement. In connection with any such audit, ESI shall
have access to complete prescription data relating to any prescription
written for an ESI Patient by an Eligible Prescriber using the Vendor
System. ESI acknowledges and agrees that the provisions of this Section 13.1
shall not obligate Vendor to provide ESI with access to information relating
to the PBM Services of other clients of Vendor to the extent that such access
would disclose the identity of such clients.
13.2 Assignment and Subcontracting
This Agreement, and the rights and obligations of the Parties
created hereunder, shall not be assigned or subcontracted to any third party
by any Party without the prior written consent of the other Party, such
consent not being unreasonable withheld. Any purported or attempted
assignment or subcontract without such consent shall be void and without
effect, except that Vendor and ESI may assign or subcontract any or all of
their respective rights and obligations under this Agreement to any of their
respective Affiliates.
13.3 Binding on Successors and Assigns
Without in any way limiting the provisions of Section 13.2, this
------------
Agreement shall be binding upon, enforceable by and inure to the benefit of
the Parties, their successors and assigns.
13.4 Impossibility of Performance
Neither ESI nor Vendor shall be deemed to be in default of this
Agreement if prevented from performing any obligation hereunder for any
reason beyond its control, including without limitation, governmental laws
and regulations, acts of God or the public, flood, storm, strikes, or an act
of war against the United States. In such case, prompt notice shall be given
to the other Party, and the Parties shall negotiate in good faith with the
goal or intent of preserving this Agreement and the respective rights and
obligations of the Parties to the greatest extent possible.
13.5 Notices
All notices, demands, requests or other communications which may
be or are required to be given, served or sent by any Party to any other
Party pursuant to this Agreement shall be in writing and shall be mailed by
first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by hand delivery (including delivery by courier),
reputable overnight courier service, telegram, telex, or facsimile
transmission, addressed to Vendor or to ESI, as the case may be, as set forth
below.
If to Vendor:
Medix Resources, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to ESI:
Express Scripts, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Each Party may designate by notice in writing new addresses to which any
notice, demand, request or communication may thereafter be so given, served
or sent. Each notice, demand, request, or communication which shall be
mailed, delivered or transmitted in the manner described above shall be
deemed sufficiently given, served, sent and received for all purposes at such
time as it is delivered to the addressee (with the return receipt, the
delivery receipt, the affidavit of messenger or (with respect to a telex) the
answer back or (with respect to a facsimile) the printed confirmation being
deemed conclusive (but not exclusive) evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
13.6 Further Instruments or Action
Each Party agrees that it will execute and deliver such further
instruments and will take such other action as may reasonably be necessary in
order to effectively discharge or perform or to carry out any of the
respective obligations and agreements hereunder.
13.7 Governing Law
The validity and construction of the terms and provisions of this
Agreement and the rights and obligations of the Parties hereto shall be
interpreted and enforced in accordance with the laws of the State of Delaware
(without regard to its conflict of laws rules), except to the extent
preempted by federal law.
13.8 Rights Cumulative; No Waiver
No right or remedy conferred upon or reserved to either of the
Parties is intended to be exclusive of any other right or remedy, and every
right and remedy shall be cumulative and in addition to any other right or
remedy, now or hereafter legally existing upon any default. The failure of
any Party to insist at any time upon the strict observance or performance of
any of the provisions of this Agreement or to exercise any right or remedy as
provided in this Agreement shall not impair any such right or remedy or be
construed to be a waiver or relinquishment. Every right and remedy given by
Agreement to the Parties may be exercised from time to time and as often as
may be deemed expedient by the Parties.
13.9 Amendment
This Agreement may be amended at any time by mutual agreement of
the Parties, but no such amendment is valid unless it is in writing and
signed by both Parties by persons duly authorized to do so.
13.10 Agreement Not to Hire
During the Term and for one year thereafter, neither Party shall
directly or indirectly employ, or offer or promise to offer or otherwise
solicit for employment, or induce the termination of employment of, employees
or former employees (who were in the employ of a Party within the immediately
preceding 12 month period) of the other Party, or employees or former
employees of any Affiliate of such Party, without the prior written consent
of such other Party.
13.11 Rights of Third Parties
The Parties do not intend, and nothing in this Agreement shall be
construed or deemed, to give any person other than the Parties hereto any
right or interest based on this Agreement. The Parties reserve the right to
amend this Agreement by mutual written consent without notice to or consent
of any person or to terminate it without notice to or consent of any person
not a Party to this Agreement.
13.12 Relationship Of The Parties
ESI and Vendor are, and shall remain independent contractors.
Nothing in this Agreement shall be construed to create any relationship
between the Parties other than that of independent contractors.
13.13 Use of Marks
13.13.1 Rights to Use Marks
Except as expressly provided herein, no rights in or to the marks
"Vendor" or any other service marks, trademarks, or corporate names of Vendor
or its Affiliates (the "Vendor Marks") are granted to ESI or any other party
by virtue of this Agreement. Except as expressly provided herein, no rights
in or to the marks ESI, Express Scripts or any other service marks,
trademarks, or corporate names of ESI or its Affiliates (the "ESI Marks") are
granted to Vendor or any party by virtue of this Agreement. The Parties will
mutually agree upon the form and content of any disclosure or publication of
the relationship created hereunder.
13.13.2 Quality Control
Vendor and ESI agree that all services provided hereunder by one
Party in conjunction with the other Party's service marks or trademarks, or
in connection with the corporate names of such other Party or its Affiliates,
shall be performed in compliance with the quality standards specified in this
Agreement. Vendor and ESI shall use reasonable efforts to maintain the
validity and distinctiveness of the other Party's service marks, trademarks,
and corporate names so as to enhance the goodwill symbolized by such service
marks, trademarks, and corporate names.
13.14 Entire Agreement
This Agreement (including all Exhibits and Schedules hereto)
contains the entire agreement between the Parties with respect to the subject
matter contained herein and no representations or agreement, oral or
otherwise with respect to such subject matter, between the Parties not
embodied herein or attached hereto shall be of any force or effect.
13.15 Survival
The provisions of Sections 4.4, 7, 8, 10, 11 and 13 shall survive
the expiration on termination of this Agreement for any reason.
IN WITNESS WHEREOF, the Parties hereto have caused this Vendor
Services Agreement to be executed and delivered in their name and on their
behalf as of the date first set forth above.
VENDOR:
MEDIX RESOURICES, INC.
By: /s/▇▇▇▇ ▇. Prufetta
Name: ▇▇▇▇ Prufetta
Title: President & Chief Executive
Officer:
ESI:
EXPRESS SCRIPTS, INC.
By: /s/▇▇▇▇▇ ▇▇▇-▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇-▇▇▇▇▇▇
Title: Vice President & General
Manager, e-Business
EXHIBIT A
VENDOR SERVICES
In accordance with the terms and conditions of the Agreement,
Vendor shall perform the services set forth in this Exhibit A for and on
behalf of ESI during the term of the Agreement.
1. Vendor System. Vendor will provide the Vendor System (as hereinafter
defined) to Eligible Prescribers in accordance with the terms of this
Agreement.
2. Software. Vendor will provide Vendor System Software to Eligible
Prescribers and will provide all necessary installation, training and
on-going support. Vendor will be solely responsible for funding and
implementation of all software placement, together with all installation,
training and support.
3. Vendor System Features. The Vendor System will be loaded with the
information provided by ESI relating to applicable ESI Formularies, ESI
Patients, pharmacy network and other plan design features, as more
particularly described in Exhibit B to this Agreement, and with such other
physician messaging information relating to ESI Patients (e.g., regarding the
applicable formulary and other information and advertising) as Vendor and ESI
may agree.
4. Software Functionality. Vendor shall be and shall remain solely
responsible for the development of the Vendor System and its use on the
appropriate equipment, and all functionality relating thereto. The Vendor
System will incorporate or put into the cycle for development, at a minimum,
the following capabilities:
#
1. User Support. Vendor will develop and implement a comprehensive user
support function and will develop and implement ongoing software upgrades.
Specifically, Vendor will develop upgrades to the Vendor System which will
accomplish each of the functions described in paragraph 4 above, as well as
those described in Schedule A-1 attached hereto and incorporated herein.
2. Vendor System Enhancements. The parties will collaborate to devise
upgrades for the Vendor System. Vendor will work with ESI to enhance the
ability of the Vendor System to improve the marketing of products using the
Vendor System.
3. Quality Assurance System. Vendor will provide ESI with a system
(including necessary software) to perform quality assurance reviews of
Vendor's loading of the ESI Formulary information and other related
information provided by ESI.
4. Data Provided. Vendor will supply ESI with the data represented in
Schedule A-1.
5. Communication Specifications. Send and receive data in accordance with
the communications specifications represented in Schedule A-2.
6. Future Product/Service Offerings. Vendor will collaborate with ESI to
develop new product/service upgrades to enhance the value of the Vendor
System for ESI Customers.
Schedule A-1
DATA PROVIDED BY VENDOR TO ESI
# (8 pages)
#
#
#
#
#
#
#
Schedule A-2
Communication Specification
# (2pages)
#
EXHIBIT B
DATA PROVIDED BY ESI TO VENDOR
# (4 pages)
#
#
#
EXHIBIT C
SERVICE FEE
In accordance with Section 5 of the Agreement, in consideration
of the Vendor Services, ESI will pay Vendor the following Service Fees with
respect to any Eligible Prescriber who accesses the Vendor System and writes
prescriptions using ESI Formulary and ESI Patient information provided
pursuant to this Agreement:
---------------------------------------------------
Transaction Type Transaction Cost
---------------------------------------------------
Customized Messaging (per $#
message)
---------------------------------------------------
Prescriptions to Retail for $#*
ESI Patients using desk-top
PC:
Includes:
o Eligibility Verification
o Formulary Checking
o Drug to Drug Interaction
o Prior Authorizations
o Final Scripting
---------------------------------------------------
Prescriptions to Mail Order $#
for ESI Patients using
desk-top PC
Includes:
o Eligibility Verification
o Formulary Checking
o Drug to Drug Interaction
o Prior Authorizations
o Final Scripting
---------------------------------------------------
Notwithstanding anything in this Agreement to the contrary, ESI's maximum
financial liability during the Initial Phase for the Service Fees set forth
above shall be limited to $#. Vendor will absorb all deployment expenses and
any additional transaction costs above this amount during such period. In
the event that ESI terminates this Agreement without cause prior to the end
of the Initial Phase, ESI agrees to reimburse Vendor $# less any Service Fees
paid as of the date of such termination.
Upon the earlier of the completion of the Initial Phase or the date upon
which Service Fees paid to Vendor hereunder meet or exceed $#, the Parties
agree to work together in good faith to evaluate the costs and benefits of
the Vendor System and to negotiate appropriate adjustments to the fees paid
hereunder.
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* During the Initial Phase, Medix will receive the transaction fees indicated
above, which include a surcharge for this Initial Phase equal to $# on each
applicable retail prescription.