Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
EXHIBIT 10.10
Final
AMENDED AND RESTATED MARKETING AND SALES AGREEMENT
This Amended and Restated Marketing and Sales Agreement ("Agreement")
between WORLDMED SHARED SERVICES, INC. d/b/a PSS WORLD MEDICAL SHARED SERVICES,
INC. ("PSS"), with its offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇, and athenahealth, Inc., a Massachusetts corporation ("Athena"),
with offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, (the "Parties") is
effective this 24th day of May, 2007 ("Effective Date").
WHEREAS Athena, a developer of innovative web-based solutions for practice
automation, billing and collections needs, and PSS, an independent marketing and
sales organization, entered into a Marketing and Sales Agreement, effective
December 12, 2006 (the "Initial Agreement"), pursuant to which Athena and PSS
established a relationship whereby PSS promotes and arranges for initial orders
for Athena's services to existing and prospective customers.
WHEREAS Athena and PSS desire to amend and restate the Initial Agreement
and accept the rights, obligations and covenants set forth in this Agreement in
lieu of their respective rights, obligations and covenants under the Initial
Agreement.
THEREFORE PSS and Athena agree to the following terms and conditions:
1 DEFINITIONS
The following terms have the meaning indicated here when used in this
Agreement:
1.1 "Affiliate": means, with respect to either Party, any person,
firm, corporation or other legal entity which controls or is
controlled by or under common control with such Party.
1.2 "Bolt-On" means a software module that is an enhancement to an
existing practice management information system (PMIS) or billing
system or service, and that does not, alone or in conjunction
with other Bolt-On modules, perform substantially all of the
functions of such a system or service or otherwise constitute a
replacement for such system or service.
1.3 "Generally Available" refers to a Clinical Cycle Service
developed by Athena that (i) has been CCHIT certified; (ii) is a
stand-alone service offered without the requirement that the
customer purchase any Revenue Cycle Service and (iii) has been
released to the Athena sales force for general sale to
prospective customers for implementation within six months of the
sale.
1.4 "Change of Control" means, with respect to either Party the
consummation of (1) the dissolution or liquidation of such Party,
(2) the sale of all or substantially all of the assets of such
Party on a consolidated basis to an unrelated person or entity,
(3) a merger, reorganization or consolidation in
which the outstanding shares of stock are converted into or
exchanged for securities of the successor entity and the holders
of such Party's outstanding voting power immediately prior to
such transaction do not own at least a majority of the
outstanding voting power of the successor entity immediately upon
completion of such transaction, (4) the sale of all or a majority
of the stock of the Party to an unrelated person or entity in a
single transaction or series of related transactions, or (5) any
other transaction or series of related transactions in which the
holders of the Party's outstanding voting power immediately prior
to such transaction do not own at least a majority of the
outstanding voting power of the Party or a successor entity
immediately upon completion of the transaction.
1.5 "Clinical Cycle Services" means Athena's athenaClinicals service
as it is defined from time to time by Athena in its standard
service specifications, or other Athena services relating to the
management of clinical processes as may be set forth from time to
time in an addendum to this Agreement.
1.6 "Contract Year" means each consecutive 12 month period during the
term of this Agreement, commencing on the first day of the first
month beginning after the Effective Date.
1.7 "Distribution Business" means (i) any business or subsidiary
thereof which has, as its primary source of revenue, revenue from
the Distribution Market including, without limitation, any of
McKesson Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇, Inc. or Cardinal Health,
Inc., or any affiliate, successor or assign of any of the
foregoing which entity has, as its primary source of revenue,
revenue from the Distribution Market, and (ii) Significant
Competitors. For purposes of this Section 1.7, the term
"Significant Competitors shall mean businesses that (a) have a
significant source or their revenue derived from the Distribution
Market such that PSS reasonably and in good faith determines them
to be significant competitors to PSS in the Distribution Market
(regionally or nationally), and (b) are listed on Exhibit F
hereto, as amended from time to time. The Parties shall meet
within 30 days of the date hereof to agree in good faith upon the
initial list for Exhibit F. At any time during the term of this
Agreement, PSS may suggest additions to Exhibit F to the extent
that additional businesses, in PSS's good faith judgment, are
significant competitors to PSS in the Distribution Market
regionally or nationally. Athena shall in good faith consider
such suggestion and, within a reasonable period notify PSS of its
agreement or disagreement with such suggestion, provided that
Athena shall not unreasonably withhold its agreement. Athena
shall use commercially reasonable efforts to terminate any
existing arrangement with any such business as promptly as
practicable. Upon such agreement, and upon the termination of any
such existing arrangement, if applicable, the parties will
execute an amendment to Exhibit F including the names of the
suggested additions.
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
1.8 "Distribution Market" means the business of distributing medical
and surgical supplies to the physician ambulatory care market in
the Territory.
1.9 "Estimated Contract Value" means, with respect to a PSS Order or
customer contract with a Practice, an amount equal to the
estimated aggregate of annual recurring revenue to Athena from
such PSS Order or customer contract, such estimate to be
calculated by Athena using the same methodology that Athena uses
to calculate commissions for its internal sales force.
1.10 "Initial Sale" means a contract by a Practice for purchase of any
Services that is the first contract of that Practice for any
services with Athena.
1.11 "Order" means an Athena-approved contract form fully filled out
and executed by a PSS Lead for an Initial Sale, accompanied by a
cash deposit from the Practice in the amount requested by Athena.
Orders may be accepted by Athena only at its home office and only
by its President or his or her designee. No Athena sales
personnel are authorized to accept any Order.
1.12 "Practice" means an office-based physician practice that: has its
principle place of business within the Territory, is not on any
exclusion list of the United States or any state government or
any government agency, is not a governmental entity and does not
▇▇▇▇ government payors on a cost or other pass-through basis.
Practices may also be referred to as "End-Users".
1.13 "Proposal" means a document prepared by Athena and provided to
PSS proposing contractual terms and conditions to PSS Leads.
1.14 "PSS/Athena Customers" shall mean PSS Leads who execute an Order
during the term of this Agreement which Order is accepted and
executed by Athena.
1.15 "PSS Leads" means those Practices who are registered by Athena as
such pursuant to the provisions of Sections 7.2 and 7.3 hereof.
1.16 "PSS Order" means an Order executed by a PSS Lead.
1.17 "PSS Bookings" for any period means the aggregate Estimated
Contract Value of PSS Orders executed by Athena during the
period.
1.18 "Revenue Cycle Exclusivity Date" means the earlier of (i) two
years from the Effective Date or (ii) the date upon which Athena
has executed an aggregate of at least * contracts to provide
Services to PSS Leads which were obtained using the Virtual Sales
Method.
1.19 "Revenue Cycle Services" means Athena's athenaCollector(SM)
service as defined from time to time by Athena in its standard
service specifications, or
3
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
other Athena services relating to physician practice management
as may be set forth from time to time in an addendum to this
Agreement.
1.20 "Services" means Revenue Cycle Services and Clinical Cycle
Services.
1.21 "Similar Services" means Similar Revenue Cycle Services and
Similar Clinical Cycle Services.
1.22 "Similar Revenue Cycle Services" means a third party's systems,
software or services that perform or facilitate physician
practice management, patient registration; patient scheduling;
▇▇▇▇ or accounts receivable generation and tracking; practice
financial performance reporting; recovery of patient demographic,
insurance and charge data; charge posting; tracking or follow- up
on collections; and/or any other activity that is a substitute
for some or all of the Revenue Cycle Services.
1.23 "Similar Clinical Cycle Services" means a third party's systems,
software or services that perform or facilitate the management of
key clinical processes, including medical record documentation,
order management, results processing, fax categorization and
access to aggregated clinical patient information, and/or any
other activity that is a substitute for some or all of the
functionality of the Clinical Cycle Services.
1.24 "Territory": USA
1.25 "Virtual Sales Method" means Athena's method of selling its
Services using the internet and telephone sales, without the
intervention of a face-to-face sales call by Athena sales
personnel, provided that presence of Athena personnel for sales
coaching or training, including but not limited to presence under
Section 2.1(c) below, will not constitute a face-to-face sales
call by Athena.
2 IMPLEMENTATION; APPOINTMENT
2.1 Athena shall, at its cost and expense, make the following
contributions during the rollout of the sales of Services by PSS:
(a) Athena shall allocate $* toward the establishment of an
incentive plan adopted by PSS for PSS Sales Reps in connection
with the performance of PSS's sales, marketing and promotion
obligations under this Agreement, with such incentives and award
to be distributed by PSS by the end of the first Contract Year.
(b) During the first Contract Year, Athena shall co-sponsor 6-8
training sessions for "expert" PSS Reps, to be conducted at sites
selected by PSS, Athena will share equally with PSS in the
payment of pre-approved expenses in connection with such training
sessions.
4
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(c) Athena shall provide competent personnel to accompany the top
performing 50% of PSS Reps (as designated by PSS) for two days of
sales calls during the first Contract Year.
(d) During the first Contract Year, Athena will conduct on-line
education for the PSS Reps on times and at a frequency that shall
be mutually determined.
2.2 On or before May 30, 2007, PSS shall (a) conduct a meeting with
all of its Sales Reps in connection with the formal introduction
and implementation of its sales and marketing plan for the
Services and (b) allocate a mutually agreeable number of Sales
Reps who focus on healthcare information technology and the
Services to be trained by Athena staff members in connection with
the performance of PSS's duties and obligations under this
Agreement. Additionally, PSS shall, within 30 days after the
Effective Date, establish a commission structure reasonably
acceptable to Athena in which any commission rate payable to a
PSS Sales Rep with respect to a sale of Revenue Cycle Services
shall be at least *% greater than any commission rate payable
to such Sales Rep with respect to a sale of Similar Revenue Cycle
Services. The same commission structure shall apply to the
Clinical Cycle Services as compared to Similar Clinical Cycle
Services; provided that once the Clinical Cycle Services become
Generally Available with respect to a particular medical
specialty, any commission rate payable to a PSS Sales Rep with
respect to a sale of Clinical Cycle Services to such medical
specialty shall be at least *% greater than any commission rate
payable to such Sales Rep with respect to a sale of Similar
Clinical Cycle Services.
2.3 Athena hereby grants PSS (including its Affiliates) the
non-exclusive right to distribute, sell, market and promote the
Services only in the Territory, subject to the terms and
conditions of this Agreement. PSS shall ensure that its sale
representatives ("PSS Sales Reps") are required to comply with
the terms and conditions of this Agreement. Except as otherwise
specifically set forth herein, PSS shall not be precluded from
marketing or selling Similar Services.
3 RELATIONSHIP; EXCLUSIVITY
3.1 The relationship of PSS to Athena shall be that of an independent
contractor engaged in marketing and selling the Services to PSS's
current and prospective customers.
3.2 Nothing contained in this Agreement shall be deemed to create a
partnership or joint venture between the Parties. Neither the
making nor the performance of this Agreement shall be construed
in any manner to have established a joint venture or partnership.
5
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
3.3 Neither Party shall hold itself out as the agent of the other,
nor shall they incur any indebtedness or obligations in the name
of, or which shall be binding on the other, without the prior
written consent of the other. Each Party assumes full
responsibility for its own personnel under laws and regulations
of the governmental authorities of the competent jurisdiction.
3.4 Both Parties shall comply with all laws, regulations and orders
relating to its performance under this Agreement, including
without limitation all anti-fraud and anti-kickback laws,
regulations and orders. PSS and Athena each agrees, warrants and
certifies that in performance of this Agreement it will fully
comply with the provisions of the Social Security Act, Section
1128B(b) (42 U.S.C. Section 1320a-7b(b)) which prohibit the
knowing or willful offer, solicitation or receipt of any
remuneration, including discounts and/or rebates, directly or
indirectly, in return for purchasing, leasing or ordering, or
arranging for or recommending the purchase, lease or order, of
any services or items, including any Services, for which payment
may be made in whole or in part under a federal health care
program.
3.5 Without limiting the generality of 3.4, neither Party shall
directly or indirectly, pay any compensation, amounts, benefits
or other consideration to any employee of the other Party, or any
family member of the other Party's employee, (other than
customary gifts valued under $100 in the course of one year, and
business meals in the ordinary course) without the express
written consent of such Party. The provisions of this Section
shall survive termination or expiration of this Agreement for any
reason.
3.6 Athena agrees not to send any product, or marketing materials or
other communications (including without limitation, email, voice
mail, direct mail or fax) to a Group of PSS's employees or agents
without prior written approval from PSS. For purposes of this
Section, a "Group" is defined as more than five people receiving
the same or similar communication. The provisions of this Section
shall survive termination or expiration of this Agreement for any
reason.
3.7 Notwithstanding anything to the contrary in this Agreement,
during the term of this Agreement, Athena (a) shall not permit
any of its marketers, resellers or distributors to assign or
otherwise make available their rights under any of their
agreements with Athena to a Distribution Business which would
effectively allow the Distribution Business to market, sell or
distribute any of the Services; (b) shall not enter into a
distribution arrangement with any business which has, as its
primary source of revenue, the manufacture of medical and
surgical supplies for the physician ambulatory care market in the
Territory unless such arrangement provides a commission rate
payable to such manufacturer for the sale of Services which is at
least *% less than the commission rate payable to PSS
hereunder; (c) shall not contract for, agree with or accept
compensation from any Distribution Business for the sale of any
medical, surgical or pharmaceutical products to its customers,
(d)
6
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
shall not sell, promote, market, contract for, or agree with any
Distribution Business other than PSS to provide services that are
substantially similar to the services provided by PSS under this
Agreement, and (e) shall not contract for, agree with or grant
any rights to any Distribution Business other than PSS to sell,
resell, offer for sale or distribute any Services within the
Territory, and Athena shall ensure that any such arrangements in
effect prior to the Effective Date shall have expired or shall
have been terminated as of the Effective Date, such that PSS
shall be the sole and exclusive Distribution Business with whom
Athena has a sales and marketing arrangement with respect to the
Services. For the avoidance of doubt, except as otherwise
provided in this Section 3.7, Athena reserves the right to sell,
in the Territory and elsewhere, to Practices and others, all of
the Services, directly or through any and all resellers,
distributors, representatives, employees or other agents or
contractors selected or appointed at any time by Athena.
3.8 PSS will not be entitled to any commission with respect to any
sale made or Order obtained by Athena other than with respect to
a PSS Lead as set forth herein. Notwithstanding the foregoing,
Athena agrees it shall not directly or indirectly market,
solicit, offer or sell medical supply products (not including the
Services or Similar Services) to any third party, without PSS's
prior written consent.
3.9 From and after the Revenue Cycle Exclusivity Date, except as set
forth in this paragraph PSS shall not contract or enter into any
partnership with any business that is a provider of Similar
Revenue Cycle Services (a "Revenue Cycle Vendor") other than
Athena. On or before the Revenue Cycle Exclusivity Date, any and
all contracts and partnership arrangements between PSS and any
other Revenue Cycle Vendors in effect as of the Effective Date or
entered into between the Effective Date and the Revenue Cycle
Exclusivity Date (other than arrangements in connection with a
Bolt- On as set forth in Section 3.10 below) shall have expired
or shall have been terminated, such that Athena shall be the sole
and exclusive Revenue Cycle Vendor with whom PSS has a sales and
marketing arrangement. Notwithstanding the foregoing, PSS may
enter into and continue contracts or partnership arrangements
with respect to Bolt-On products or services, as long as such
arrangements provide that the commission rate payable to PSS Reps
in connection with the sale of such Bolt-On products is at least
*% less than the commission rate payable in connection with the
sale of the Services. The foregoing limitation on commission
rates shall not apply, however, to the existing agreement between
PSS and ClaimRemedi Inc.
3.10 From and after the date that Clinical Cycle Services are
Generally Available with respect to a particular medical
specialty, PSS agrees that (i) it will not enter into any new
agreements or arrangements to sell any third party's Similar
Clinical Cycle Services relating to such medical specialty that
are based on an application service provider ("ASP") model, and
will terminate
7
any such agreement or arrangement then in effect, and (ii) in the
event PSS enters into a contract, agreement or arrangement with
any provider of Similar Clinical Cycle Services relating to such
medical specialty that are based on an ASP model, PSS shall not
be entitled to accept any commissions for sales of Similar
Revenue Cycle Services sold by such provider.
3.11 After termination or expiration of this Agreement:
(a) PSS shall not sell Similar Services to any PSS/Athena Customer;
if it does so and cannot cure such action (for example, by
terminating such sale) within 30 days of receipt of notice from
Athena, the obligations of Athena set forth in paragraph (b) of
this Section 3.11 shall terminate and be of no further force or
effect.
(b) Athena shall not directly or indirectly (i) sell any medical,
surgical or pharmaceutical products to any PSS/Athena Customer,
or (ii) accept compensation for any medical, surgical or
pharmaceutical products sold to any PSS/Athena Customer.
(c) Notwithstanding the foregoing, (i) if this Agreement is
terminated by PSS in accordance with Sections 5.1, 5.2 or 5.4 of
this Agreement, then PSS shall be relieved of its obligations set
forth in paragraph (a) of this Section 3.11 and such obligations
shall have no force or effect; and (ii) if this Agreement is
terminated by Athena in accordance with Sections 5.1, 5.2 or 5.4
of this Agreement, then Athena shall be relieved of its
obligations set forth in paragraph (b) of this Section 3.11 and
such obligations shall have no force or effect.
3.12 Athena and PSS intend to work together toward the development,
marketing and sale of an inventory management system having the
characteristics set forth on Exhibit E hereof, which development,
marketing and sale and other related rights and obligations of
the Parties shall be as set forth in an amendment to this
Agreement.
4 TERM OF AGREEMENT
4.1 The term of this Agreement shall commence on the Effective Date
and, subject to any earlier termination of this Agreement in
accordance with its terms, shall continue for a period of three
(3) years. Subject to any earlier termination of this Agreement
in accordance with its terms, this Agreement shall automatically
renew after the initial 3 year term and the term of this
Agreement shall be extended for successive one year periods
unless either Party gives notice of termination no later than
sixty (60) days prior to expiration of the then-current term.
8
4.2 In the event of expiration or termination of this Agreement for
any reason, this Agreement shall continue to apply to all Orders
previously accepted by Athena.
5 TERMINATION
5.1 If either Party breaches or fails to perform any of the
obligations imposed upon it under the terms of this Agreement,
the other Party may terminate the Agreement in the event the
breaching Party fails to cure such breach within sixty (60) days
after receiving written notice of such breach from the non-
breaching Party.
5.2 To the extent permitted by law, if either Party becomes
insolvent, is unable to pay its debts when due, files for
bankruptcy, is subject of involuntary bankruptcy, has a receiver
appointed, or has its assets assigned, the other Party may
terminate this Agreement immediately upon notice to the other
Party and may cancel any unfulfilled obligations.
5.3 Either Party may terminate this Agreement without cause by giving
the other Party at least one hundred twenty (120) days written
notice thereof.
5.4 Either Party may terminate this Agreement by written notice to
the other Party within 30 days after a Change of Control of such
other Party.
5.5 In event of a termination of this Agreement, (i) PSS shall
immediately cease marketing, promoting or initiating sales of the
Services, (ii) PSS shall cease use of all Athena trademarks,
service marks and trade names and (iii) each Party shall return
all Confidential Information and other tangible materials as
provided herein.
5.6 In the event of termination or expiration of this Agreement for
any reason, PSS shall be entitled to continued payment of its
commission for a tail period of two (2) years following such
termination or expiration, with respect to customers who had
purchased Revenue Cycle Services and/or Clinical Cycle Services
as of the Termination Date, as calculated, payable and set forth
herein, for as long as the customers use such Services. There
will be no situation (post-termination or expiration of this
Agreement) by which Athena may discontinue or interrupt the
payment of commissions to PSS during the 2 year tail unless and
only to the extent a customer terminates the Services.
6 ASSIGNMENT
During the term of this Agreement, the rights of either Party under
this Agreement shall not be assigned nor shall the performance of duties
hereunder be delegated, without the other Party's prior written consent, which
shall not be unreasonably withheld; provided however, either Party may assign
this Agreement (i) to an Affiliate that is an Affiliate as of the date of
execution of this Agreement; (ii) to an Affiliate whose assets consist entirely
of the assets of an
9
Affiliate or Affiliates that were Affiliates as of the date of execution of this
Agreement; or (iii) in the event of the sale of all or substantially all the
assets of the Party or a controlling interest in the Party. Notwithstanding the
generality of the foregoing, in the event Athena, or a controlling interest
therein, is acquired by a third party, whether through merger, restructuring,
sale of assets, sale of stock or otherwise, Athena agrees to require the
successor third party to assume all obligations under this Agreement. This
Agreement shall be binding on all successors and assigns of Athena.
7 PRICES AND PAYMENTS
7.1 Athena shall pay PSS a commission for the sale of the Services to
PSS Leads in accordance with Exhibit A, attached hereto, subject
to any applicable offsets in accordance with Exhibit A.
7.2 For purposes of this Agreement, a Practice shall be deemed a
registered PSS Lead if it has been introduced to Athena through
any one of the following marketing tactics and is registered in
accordance with Section 7.3 below:
(a) The PSS Sales Rep scheduled a telephone or face-to-face meeting
with a representative of the Practice and Athena;
(b) The PSS Sales Rep is responsible for a representative of the
Practice attending an Athenahealth sales webinar;
(c) The PSS Sales Rep has directed a representative of the Practice
to attend a local Athenahealth sales seminar; or
(d) The PSS Sales Rep called and informed the appropriate Athena
sales representative of the Practice and documented
Practice-specific information as reasonably required by Athena.
7.3 If PSS, through its pursuit of one or more of the tactics set
forth in Section 7.2 above or otherwise, identifies a Practice
that it believes in good faith could generate an Order, PSS will
inform Athena by e-mail or by telephone in accordance with
Section 7.2 (d) above, identifying the Practice, its size and
specialty. If Athena has not previously registered the Practice
in its customer relationship management system as a lead, and
unless Athena knows that pursuit of the sale is not advisable,
Athena will promptly (within two business days) notify PSS by
e-mail that the Practice is qualified and registered as of the
date of such email, and the Practice will be deemed a "PSS Lead"
for a period of 18 months from the date of such registration. If
the Practice is already registered in Athena's customer
relationship management system as a lead, Athena shall in good
faith conduct a diligent review to determine the background of
the lead and to determine if it was properly registered and
maintained as a lead, and shall, as promptly as is practicable,
inform PSS in writing of the results of such review and the
reasons for not registering the potential customer as a PSS Lead.
Notwithstanding anything to the contrary in this Agreement, if
Athena
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
contracts for the provision of any Services to a PSS Lead during
the 18 month period after its registration, such contract shall
be deemed an Initial Sale under a PSS Order for purposes of this
Agreement.
7.4 Athena will effectively and promptly follow up on all PSS Leads
within 10 days of the Practice being deemed a PSS Lead and Athena
will keep PSS informed of the results. However, if Athena
reasonably and in good faith believes that pursuit of the sale is
not advisable, it shall so notify PSS promptly after designation
of the Practice as a PSS Lead, and in such event Athena shall not
be obligated to follow up on such PSS Lead. If the PSS Lead is a
Practice consisting of four or more individuals, Athena's follow
up activities shall include an in-person meeting between the
Practice and an Athena field sales rep. If the PSS Lead is a
Practice consisting of less than four individuals, Athena's
follow up activities shall include its Virtual Sales Method.
7.5 Payment from Athena to PSS shall be in U.S. dollars fully payable
within thirty (30) days following each month end. A commission
payment report will be submitted to PSS within fifteen (15) days
following each month end.
7.6 In competitive situations or as part of a large order, PSS and
Athena may agree on a special price arrangement. In addition,
Athena may, in collaboration with PSS, agree to discount standard
pricing by up to *% (or up to the then current discount
threshold for Athena's sales representatives) under circumstances
in which price is mutually determined by Athena and PSS to be an
obstacle to a sale of Services. For avoidance of doubt, the
foregoing does not grant any right to PSS to determine Athena
pricing to Athena customers nor the fact that PSS may get
commissions under this Agreement be deemed to prevent Athena from
offering other discounts or credits to customers, from declining
to contract with prospective customers or from terminating
customer contracts as it, alone, determines.
7.7 To the extent Athena is not otherwise prohibited under this
Agreement from using other independent resellers of the Services,
Athena (including its Affiliates, successors and assigns) agrees
that the commission rates and the total commission payout to be
paid to PSS under this Agreement shall be at least as favorable
as the commission rates and/or total commission payout to be paid
by Athena, as applicable, to other independent resellers of
Athena's Services.
7.8 Unless the Parties otherwise agree, a sales booking quota shall
apply to PSS during the fifth Contract Year equal to *% of the
PSS Bookings achieved during the fourth Contract Year and each
Contract Year after the fifth Contract Year shall have a sales
booking quota as may be agreed upon by the Parties, provided that
if after good faith discussions the Parties fail to agree on a
quota, then the quota shall be equal to *% of the PSS Bookings
achieved in the previous Contract Year. Athena shall be obligated
to pay
11
continuing commissions on PSS Orders indefinitely (except in the
case of termination or expiration of this Agreement as set forth
in Section 5.6 hereof); provided that if PSS fails to meet it
sales booking quota in any Contract Year, then Athena's
obligation to pay continuing commissions on PSS Orders entered
into prior to the end of such Contract Year shall be limited to
five years with respect to each PSS Order. For the avoidance of
doubt, (i) except as otherwise provided in this Section 7.8 and
Section 5.6, Athena shall be obligated to pay PSS the commissions
under Exhibit A for as long as the customer uses the applicable
Services, and (ii) any failure by PSS to meet its sales booking
quota in any Contract Year shall have no affect on the
obligations of Athena set forth in Article 3 hereof.
8 OBLIGATIONS OF PSS
8.1 PSS will use its best efforts to promote and market the Services
within the Territory, and engage in sales activities approved by
Athena in writing in the Territory, including but not limited to
prospecting for sales leads and distributing printed material
supplied by Athena to potential customers. Athena may, but will
not be obligated to identify sales leads for PSS.
8.2 PSS will introduce Athena sales personnel to PSS Leads and will
coordinate and participate (where reasonably feasible for it) in
an initial sales meeting with such Practices and in demonstration
of the Services by Athena.
8.3 PSS will assist Athena in identifying Practice needs and
expectations with respect to Proposals.
8.4 As reasonably requested by Athena, the PSS sales representative
will coordinate and participate in presentation of Proposals to
PSS Leads.
8.5 PSS will transmit to PSS Leads Athena technical information and
other pre-sales customer liaison information to Athena and will
provide pre-sales advice to Athena as to the implementation of
Services and training programs. PSS will inform Athena of all
inquiries and requests of PSS Leads relating to the potential
sales of Services, will promptly and diligently collect and
communicate to Athena all requests for price and term quotes from
them, and will contemporaneously furnish Athena with copies of
all pertinent correspondence and communications by PSS with them.
8.6 PSS will provide such other assistance with respect to PSS Leads
as Athena may from time to time reasonably request.
8.7 PSS will make periodic reports to Athena, as reasonably requested
by Athena, with respect to potential sales, including available
information relating to commercial conditions in the Territory.
8.8 PSS will adhere to Athena's price and terms established for any
Practice and will not offer, promise, agree to or disclose prices
or terms for Services not
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as explicitly approved by Athena in writing on a
Practice-by-Practice basis. PSS will adhere to, cooperate and
comply with Athena's sales policies and programs, will at all
times conduct its business in a manner as will reflect favorably
on Athena and the Services and will not engage in any deceptive,
misleading, illegal or unethical business practice.
8.9 PSS will at all times designate and refer to the Services by
their current names (as designated by Athena) and identify them
as the Services of Athena being offered for sale through PSS. PSS
will not represent or permit representation of the Services as
its own, as supplied by it or as contracted by it. PSS will not
engage in advertising or in Internet or media promotions or in
any direct mail or telephone or fax marketing campaign of the
Services. For the avoidance of doubt, sales information
concerning the Services provided to Practices who call the PSS
call center shall not constitute a telephone marketing campaign.
No signage, written material, business cards, brochures, or other
descriptions of PSS or its business will include mention of
Athena unless individually and specifically approved in writing
by a vice-president or higher officer of Athena. In advance of
any use or distribution, PSS will furnish and get Athena's
written approval for copies of all written or electronic matter
used by PSS which are not supplied by Athena and in which Athena
or the Services are mentioned.
8.10 PSS will promptly advise Athena concerning any market information
that may come to PSS's attention regarding the Services, PSS's
market position, and the continued competitiveness of the
Services in the marketplace, including charges, complaints, or
claims about the Services. PSS shall confer with Athena from time
to time, at the request of Athena on matters relating to market
conditions, sales forecasting and service planning.
8.11 PSS will not make any representations, warranties, or guarantees
to End- Users or to the public with respect to the
specifications, features or capabilities of athenaNet(R) services
that are inconsistent with the literature distributed by Athena,
including all warranties, disclaimers, and license terms
contained in such literature.
8.12 PSS will be responsible for all expenses incurred by it in
connection with the implementation and performance of its duties
and obligations under this Agreement, including but not limited
to, the expenses incurred in fulfilling its duties and
responsibilities as described above; salaries for its personnel;
costs and expenses associated with establishing and maintaining
its sales organization and offices; communication expenses;
travel expenses, promotion expenses and any and all taxes,
duties, tariffs or charges which may be imposed on PSS. Subject
to Section 2.2 hereof, PSS, in its sole discretion, will
determine how PSS Sales Reps are compensated for the sale of
Services.
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8.13 PSS will designate an individual as the primary point of contact
to communicate with Athena personnel and to manage strategy and
logistics related to the arrangements described in this
Agreement.
9 OBLIGATIONS OF ATHENA
9.1 Athena will provide information to PSS on Service configuration,
price, delivery, scheduling, and implementation, sales orders,
order status, and invoices as reasonably requested by PSS with
respect to Practices that PSS has identified to Athena as
prospects. Athena shall provide PSS, on an as needed basis, with
Athena's sales pipeline report as in existence from time to time;
provided that PSS shall agree that if such information is shared
with any member of PSS's field sales organization, it will notify
Athena.
9.2 Athena, at its sole expense, will provide PSS with Service
marketing brochures, descriptions and other marketing collateral
in quantities and types as reasonably determined by Athena.
Athena will provide PSS with reasonable sales and technical
information regarding the Services, at Athena's sole expense and
in quantities to be established by Athena. All such items
furnished by Athena to PSS will remain the property of Athena,
and to the extent not distributed to prospects, will be returned
to Athena or certified as destroyed by PSS when Athena so
requests, but in no event later than the effective date of
termination of this Agreement.
9.3 Athena will receive and consider in good faith all inquiries and
request for proposals, terms and prices provided to it by PSS and
Athena will provide all practices deemed to be PSS Leads with
proposal and contract forms sufficient to provide to prospects
proposals, quotes of price and terms. Athena will receive and
consider in good faith acceptance of all Orders submitted by PSS.
Notwithstanding the foregoing and without limitation, Athena may
refuse to accept an Order where Athena business records show that
there is pre-existing sales activity by another person or entity
on behalf of Athena, or Athena in its discretion determines that
the sale is not advisable.
9.4 If Athena accepts an Order, Athena will use its best efforts to
meet the delivery dates and terms therein and otherwise to
fulfill its commitments pursuant to that Order. Athena will
assume all responsibility for the quality and performance of the
Services by it not caused by incorrect or incomplete information
provided to it or to the Practice by PSS. Athena will provide and
make available expert personnel and sales and technical
assistance, in the manner and at the time Athena considers
appropriate under the circumstances, to follow-up PSS's promotion
and sales activities and to fulfill accepted Orders. Athena will
be solely responsible for the design, development, supply,
production and performance of Services, and the performance of
its personnel, but in no event will PSS be entitled to nor have
any right to claim any compensation or loss for loss of
clientele, sales,
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or commission or for any other reason arising from Athena's
performance or failure to perform any obligations under any
accepted Order provided that Athena has acted in a good faith and
reasonable manner.
9.5 As reasonably requested by PSS, Athena from time to time will
arrange for briefings and demonstrations to PSS and to Practice
prospects with respect to the Services, as well as more advanced
programs depending on the circumstances to familiarize PSS and
prospects with the use and applications of the Services and to
facilitate PSS's performance of its duties hereunder. Athena and
PSS will consult from time to time and review the nature and
content of such briefings and programs to determine whether they
are accomplishing their purposes and whether improvements can be
made thereto. Such briefings and programs may take place at
Athena's facilities or elsewhere as may be approved by Athena.
Athena will bear the cost of arranging and conducting such
programs, including the cost of its personnel, and PSS will
likewise bear its own costs and expenses in attending such
programs.
9.6 Athena will provide a one-day training course to PSS with respect
to the athenaNet(R) Services without charge at Athena's
facilities two (2) times per year for the term of this Agreement.
Athena may combine this training with customer or internal
training, as it deems appropriate. All costs related to travel
and personal expenses for PSS employees will be the
responsibility of PSS.
9.7 Athena will be responsible for billing and collection of all fees
for Services from End-User customers.
9.8 Athena shall provide sales support during normal business hours
(8:30 AM to 5:00 PM EST/EDT, Monday through Friday), and shall
designate a primary customer service representative for PSS.
9.9 Athena will designate an individual as the primary point of
contact to communicate with PSS personnel and to manage strategy
and logistics related to the arrangements described in this
Agreement.
9.10 Athena will not pay its sales personnel a higher commission rate
with respect to sales of Services to customers other than
PSS/Athena Customers than it pays on sales to PSS/Athena
Customers.
10 ADVERTISING, PROMOTIONS, TRADEMARKS AND COPYRIGHTED MATERIAL
10.1 Athena hereby grants PSS a non- exclusive, royalty-free limited
right and license during the term of this Agreement to use,
display, copy and distribute only those Athena trademarks,
service marks or trade names which are associated with the
Services and are contained in the marketing collateral and other
materials provided to PSS pursuant to this Agreement or
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otherwise approved for use by PSS by Athena pursuant to this
Agreement, solely for purposes of and in connection with the
advertisement, promotion and sale of the Services. PSS may not
alter any such marketing collateral or other materials provided
by Athena in any way, without the prior express written consent
of Athena. Except as expressly permitted herein, or as expressly
agreed by the parties in writing, PSS may not affix or display
any Athena ▇▇▇▇ to any materials other than the marketing
collateral and other materials provided by Athena. Athena also
grants PSS, during the term of this Agreement, a non-exclusive
royalty-free limited right and license to post or otherwise
display on the PSS Intranet, Extranet and Internet web sites only
those Athena trademarks, service marks or trade names, and/or
other materials, as the Parties mutually agree in writing from
time to time, solely for purposes of and in connection with the
advertisement, promotion and sale of the Services; provided that
for purposes of quality control, any such posting and associated
textual description, placement, or design is approved in advance
in writing by Athena. Any use of any Athena trademark, service
▇▇▇▇ or trade name by PSS pursuant to this paragraph, and any
goodwill generated thereby, shall inure solely to the benefit of
Athena, and nothing herein shall convey to PSS any ownership
right, title or interest in or to any patent, trademark, service
▇▇▇▇ or trade name belonging to Athena.
11 SALES, MARKETING AND SUPPORT OBLIGATIONS
11.1 Athena shall maintain a commercially reasonable number of
sales/support representatives to provide marketing, demonstration
and sales support for PSS's sales efforts under this Agreement.
The sales representatives shall be reasonably available to PSS as
reasonably required in support of PSS's sales efforts with
respect to the Services. Athena shall use commercially reasonable
efforts to increase the number of sales/support representatives
within one (1) year after the Effective Date of this Agreement.
Athena shall replace terminated or transferred sales
representatives within sixty (60) days after such termination or
transfer.
11.2 PSS and its Sales Reps shall become knowledgeable about and
maintain detailed knowledge of the Services and shall arrange for
those responsible for training Sales Reps to attend sales
training meetings as may periodically be scheduled by Athena.
Travel and other incidental expenses of PSS incurred for such
training shall be borne by PSS. In addition, in certain
circumstances involving sales to potential customers which are
not PSS Leads, at the discretion of Athena, Athena may request a
PSS Sales Rep to provide account guidance, assistance with
negotiations or to assist in accelerating stalled sales. If such
a request is made and such assistance is given, then PSS shall be
entitled to a Deal Assist commission with respect to such sale,
as set forth on Exhibit A.
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11.3 PSS acknowledges that all customers who purchase the Services
must enter into an Athenahealth Services Agreement with Athena,
the current forms of which, relating to Revenue Cycle Services
and Clinical Cycle Services, respectively, are attached hereto as
Exhibit B-1 and Exhibit B-2, before services will be provided by
Athena and the Services will be available to such customers.
Neither PSS nor any of the PSS Sales Reps shall modify,
supplement or otherwise change the terms and conditions of the
Services Agreement.
12 BOOKS AND RECORDS
12.1 Each Party shall retain accurate books and records relating to
performance of and compliance under this Agreement for a minimum
of two (2) years after their creation. Each Party shall have the
right to inspect such books and records relating to the Parties'
relationship and business over the two (2) year period, no more
frequently than twice each calendar year. The following terms and
conditions shall apply with respect to each such audit:
12.2 The audited Party shall designate a central contact point and
coordinator for the audit;
12.3 The auditing Party shall provide the audited Party with at least
ninety (90) days prior advance written notice of the requested
audit, and shall promptly notify the audited Party of any
regulatory or governmental agency requested audit;
12.4 The audited Party shall have the right to notify the auditing
Party of annual "blackout periods" during which times, due to
other demands on the audited Party's internal resources, the
audited Party shall not be obligated to prepare for or permit the
requested audit, or any other audit that is not legally mandated
to be conducted within a particular period of time;
12.5 The auditing Party shall work and coordinate in good faith with
the audited Party to establish a reasonable audit sampling
approach to minimize the disruption to the audited Party's
operations; and
12.6 The auditing Party shall bear the costs for such audit; provided,
however, that if an independent auditor determines during the
audit that a discrepancy exists in the audited company's books
and records which resulted in a payment error in any month of
fifteen percent (15%) or more, then the audited Party shall
reimburse the auditing Party for all reasonable expenses incurred
by the auditing Party in conducting any such audit.
13 REPRESENTATIONS AND WARRANTIES
13.1 Both Parties, represent, warrant and covenant to the other that:
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13.1.1. They are and will continue to be a duly formed and
validly existing entity in good standing under the laws of
the state of its organization.
13.1.2. The execution, delivery and performance under this
Agreement, and the transactions and actions contemplated
hereunder, have been duly authorized by all necessary
actions by each Party. This Agreement, when duly executed
and delivered, constitutes a valid, legal and binding
obligation of both Parties enforceable in accordance with
its terms.
13.1.3. The execution, consummation of the transactions
contemplated by, and/or compliance with the terms and
provisions of this Agreement, will not conflict with, result
in a breach of, or constitute a default under any of the
terms, conditions or provisions of either Party's
constituent documents or any agreement, license or other
contract or instrument to which either Party is a party or
by which either Party may be bound or affected or to which
either Party is subject, or any law, regulation, order,
writ, injunction or decree of any court or agency or
regulatory body.
13.1.4. They will not publish or cause to be published any
statement, or encourage or approve any advertising or
practice, which might mislead or deceive any parties or
might be detrimental to the good name, marks, good will or
reputation of either Party.
13.1.5. They will conduct business in a manner that reflects
favorably at all times on the other Party and their
reputation; not engage in deceptive, misleading, or
unethical practices; make no false or misleading
representations with regard to the other Party; nor publish
or employ any misleading or deceptive advertising material.
Without limiting the generality of the foregoing, the
Parties agree to be bound by the provisions set forth in
Exhibit D hereto, which is hereby incorporated herein by
reference.
13.2 Athena represents and warrants to PSS that:
13.2.1. Athena has good and marketable title to, or has otherwise
adequate rights in, all software and systems used in the
delivery of the Services.
13.2.2. To the best of Athena's knowledge, the use of the
Services by any existing or potential customer of PSS does
not and will not infringe any intellectual property right
held by any third party, provided that such customer
complies with all of the terms, conditions, and
18
restrictions on use contained within such customer's
Services agreement with Athena.
13.2.3. Except as listed in Exhibit C to this Agreement, to the
best of Athena's knowledge, there are no threatened or
pending claims, disputes, actions or suits involving Athena
or any of its Affiliates that (i) relate to any software or
system used in the delivery of the Services and (ii) allege
infringement of any intellectual property right held by any
third party.
14 FORCE MAJEURE
No Party to this Agreement shall be liable for failure or delay of
performance of any of its obligations hereunder if such failure or delay is due
to causes beyond its reasonable control including, without limitation, natural
disasters, fires, earthquake or storm, strikes, failures of public utilities or
common carriers, acts of war, or intervention, acts restraints or regulations of
any governmental authority, including compliance with any order of any
governmental authority; provided that any such delay or failure shall be
remedied by such Party as soon as possible after removal of the cause of such
failure. A Party suffering such delay or which expects to suffer such delay
shall promptly notify the other Party in writing of the cause and expected
duration of such delay. In the event a delay lasts or is expected to last more
than sixty (60) days the other Party shall have the option to terminate this
Agreement upon written notice.
15 CONFIDENTIALITY
15.1 Return of Confidential Information. Each Party (the "Receiving
Party") shall return to the other all Confidential Information
(as defined below) received from that other Party (the
"Disclosing Party"), along with all copies, immediately upon the
termination of this Agreement.
15.2 Remedies. Each Party shall be liable to the other for damages
caused by any breach of this Section 15 or by any unauthorized
disclosure or use of the other's Confidential Information by such
Party or third parties to whom unauthorized disclosure was made.
In addition to any other rights or remedies which may be
available to it, each Party shall be entitled to seek appropriate
injunctive relief or specific performance to prevent unauthorized
use or disclosure of Confidential Information. Each Party
acknowledges and agrees that the unauthorized use or disclosure
of the other Party's Confidential Information will cause
irreparable injury to the other Party and that money damages will
not provide adequate remedy to the other Party.
15.3 Confidential Information. The business and technical information
developed or acquired by, or entrusted by a third party to, each
Party, including, but not limited to, customer lists, names,
contact information, addresses, telephone numbers, email
addresses, Service designs, manufacturing processes, Service
pricing, pricing strategies and pricing
19
information, business plans, and all related trade secrets
("Confidential Information") are the exclusive property of such
Party, are among such Party's valuable assets, and their value to
that Party may be lost by their unauthorized use or disclosure to
persons or entities not related to such Party. Neither Party
shall, directly or indirectly, use the other Party's Confidential
Information received hereunder (other than directly in connection
with its obligations hereunder) or disclose or disseminate it to
any party or entity during the term of this Agreement or at any
time thereafter (subject to the exceptions below), regardless of
the reason for such expiration, without the express written
consent of the other Party. This obligation of confidentiality
shall not apply to any Confidential Information which (i) was
properly and lawfully known to the Receiving Party at the time of
receipt without any misconduct on the Receiving Party's part;
(ii) was in the public domain at the time of receipt; (iii)
becomes public through no wrongful act of the Party obligated to
keep it confidential; or (iv) is properly received by the
Receiving Party from a third party who did not thereby violate
any confidentiality obligations to the Disclosing Party.
15.4 Cooperation. The Receiving Party may disclose Confidential
Information in response to a request for disclosure by a court or
other governmental authority, including a subpoena, court order,
or audit-related request by a taxing authority or other
governmental authority, or if so obligated under applicable laws
or regulatory authority, provided that the Receiving Party shall
promptly notify the Disclosing Party and cooperate with the
Disclosing Party in seeking continued protection of the
confidentiality of such Confidential Information, including
avoidance or limitation of such disclosure, or disclosure under
continued confidentiality protection and restrictions.
15.5 Ownership of Intellectual Property. Nothing in this Agreement
shall grant or result in PSS acquiring any right, title or
interest in the Services or any proprietary information of Athena
even if PSS or Athena modifies, customizes or privately brands
the Services. PSS shall take appropriate steps by instruction,
agreement or otherwise with its employees and Sales Reps to
restrict and control the use of such information and Services as
required by this Agreement.
16 INDEMNIFICATION
16.1 Athena shall, except as otherwise provided below, indemnify, and
hold PSS and its Affiliates (including their respective
directors, officers, employees, representatives and agents)
harmless, and defend or settle any claim made or any suit
proceeding, including reasonable attorneys fees, brought against
PSS and its Affiliates (including their respective directors,
officers, employees, representatives and agents), subsidiaries,
assigns, subcontractors, and customers, arising out of or
relating to (i) any Athenahealth Services Agreement or any other
agreement between Athena
20
and its customers, or (ii) an allegation that any Service
(including any software, system or part thereof), Athena
trademarks, Athena trade names, Athena logos, or materials
provided by Athena, or any portion or use or sale of any of the
foregoing, infringes, misappropriates or violates a patent,
copyright, trademark, trade secret, or other intellectual
property right of any third party. PSS shall (a) promptly notify
Athena in writing of any such claim, (b) reasonably cooperate
with Athena in connection with the defense of such claim, and (c)
give Athena the sole authority to defend or settle the claim (at
Athena's expense). Athena shall pay all damages and costs finally
awarded in any such claim, suit or proceeding against PSS or any
of its Affiliates (including their respective directors,
officers, employees, representatives and agents), or any
settlement amount required to settle the claim. In the event the
Service is held to infringe and the use or sale of said Service
is enjoined, Athena shall have the option at its own expense, to
procure for PSS the right to continue selling said Service, or
replace same with a non-infringing Service, or modify same so it
becomes non-infringing. Notwithstanding anything to the contrary
above, Athena shall have no obligation under this paragraph with
respect to any claims to the extent arising (i) as a result of
any breach by PSS of the terms of this Agreement or (ii) in
connection with the sale of a Bolt-On by PSS or use by any
customer of a Bolt-On sold by PSS, either alone or in combination
with the Services.
16.2 Each Party (the "Indemnifying Party") shall indemnify, defend and
hold the other Party and its Affiliates (the "Indemnified Party")
harmless from and against any and all liabilities, claims,
demands, damages, costs and expenses or money judgments
(including reasonable attorneys fees) asserted against, incurred
by or rendered against any of them arising out of or relating to
(a) third party claims or actions which arise out of the
Indemnifying Party's breach of any of its representations,
warranties, covenants or other obligations set forth herein, (b)
a defect due to defective design, parts, packaging, labeling,
advertising materials, or faulty workmanship of, or failure to
warn with respect to services provided by the Indemnifying Party,
except to the extent that such damage arise out of the
Indemnified Party's negligence or breach of this Agreement (as
set forth in herein), and (c) third party claims or actions
arising from the Indemnifying Party's negligence, breach of this
Agreement or other acts or omissions.
16.3 The indemnification obligations under this Agreement shall
survive termination or expiration of this Agreement for any
reason.
16.4 Except as explicitly set forth in this Agreement: (a) all
warranties and obligations by Athena with respect to the nature,
extent, content, timing, completeness, sufficiency, accuracy and
quality of the Services, including but not limited to all data in
connection with such Services, are contained exclusively in each
agreement of Athena with its customers and are owed only to its
customers and not to PSS; and, (b) without limiting the
foregoing, EXCEPT FOR ATHENA'S REPRESENTATIONS, WARRANTIES,
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COVENANTS AND OBLIGATIONS UNDER THIS AGREEMENT, ATHENA UNDERTAKES
IN THIS AGREEMENT NO OTHER WARRANTY, REPRESENTATION OR
CONTRACTUAL OR OTHER OBLIGATION WITH RESPECT TO THE SERVICES AND
EXPLICITLY DISCLAIMS ANY SUCH WARRANTY, REPRESENTATION OR
OBLIGATION UNDER OR WITH RESPECT TO THIS AGREEMENT, INCLUDING BUT
NOT LIMITED TO ANY IMPLIED WARRANTY OR WARRANTY OF
MERCHANTABILITY, TITLE, DESIGN, OPERATION OR FITNESS FOR ANY
PURPOSE.
17 LIMITATION OF LIABILITY
EXCLUDING CLAIMS FOR INDEMNIFICATION AND A PARTY'S LIABILITY ARISING
FROM BREACHES OF CONFIDENTIALITY, GROSS NEGLIGENCE, INTENTIONAL OR WILFULL
MISCONDUCT, AND FAILURE TO COMPLY WITH APPLICABLE LAWS AND REGULATIONS, IN NO
EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES OF ANY KIND WHATSOEVER
INCLUDING BUT NOT LIMITED TO LOST PROFITS, IN CONJUNCTION WITH OR ARISING OUT OF
THE PERFORMANCE UNDER THIS AGREEMENT OR THE USE OR PERFORMANCE OF PRODUCTS AND
SUPPORT SERVICES EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.
18 CONFLICT RESOLUTION
18.1 Each Party shall designate (in writing, if requested by the other
Party) a relationship manager responsible for the day to day
management and coordination of the Party's performance under this
Agreement, and the Parties' communications, transactions and
relationship with each other. The relationship managers shall
address conflicts that arise relative to this Agreement. If these
relationship managers can not resolve such conflicts, then Athena
and PSS shall promptly establish a review board comprised of
appropriate members of management from Athena and PSS to resolve
the conflict.
18.2 In the event that the review board of the Parties does not
resolve a dispute within thirty (30) days from the date the
review board is established, then the Parties agree to submit the
dispute to non-binding mediation. If the Parties do not resolve
the dispute through mediation, then the dispute will be submitted
to binding arbitration as provided in Section 18.3 below.
18.3 Arbitration pursuant to this Agreement will take place before a
panel of three arbitrators in accordance with the American Health
Lawyers Association (AHLA) Alternative Dispute Resolution Service
Rules of Procedure for Arbitration. Either Party will initiate
such arbitration only in Washington, DC by making a written
demand for arbitration on the other Party and notifying the AHLA
Alternative Dispute Resolution Service. The
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Parties agree to be bound by the final decision of the
arbitrators and to accept any final decision by the arbitrators
as a final determination of the matter in dispute. The Parties
will share equally the costs of the arbitration, including any
administration fee, the arbitrator's fee, and costs for the use
of facilities, during the arbitration. Attorney's fees and costs
may be awarded to the prevailing Party at the discretion of the
arbitrators. Notwithstanding the foregoing, either Party may
terminate the Agreement according to its terms or may seek
injunctive relief in court to prevent imminent harm, on condition
that in the latter case such Party will immediately submit the
merits of the subject of any injunction to arbitration pursuant
to this Subsection.
19 INSURANCE
Both Parties shall obtain, pay for and maintain the following
insurance coverages:
19.1 COMPREHENSIVE COMMERCIAL GENERAL LIABILITY insurance, including
product liability insurance against claims regarding the Services
and its activities contemplated by this Agreement, in an amount
not less than one million dollars ($1,000,000) Combined Single
Limit bodily Injury & Property Damage Each Occurrence / two
million dollars ($2,000,000) Aggregate, independent contractors,
and personal and advertising injury coverages.
19.2 WORKERS' COMPENSATION insurance with limits to conform with the
greater of the amount required by applicable law or one million
dollars ($1,000,000) each accident, including occupational
disease coverage.
19.3 COMPREHENSIVE AUTOMOBILE LIABILITY insurance with limits not less
than one million dollars ($1,000,000) each occurrence combined
single limit of liability for bodily injury, death, and property
damage, including owned and non-owned and hired automobile
coverages, as applicable.
Both Parties shall maintain such insurance during the term of this
Agreement and thereafter for so long as it maintains insurance for itself
covering such activities. Both Parties shall maintain such insurance during the
term of this Agreement and thereafter for so long as it maintains insurance for
itself covering such activities. Coverage shall be written on a Standard ISO
Occurrence Form CG00010196 or its equivalent. Upon execution of this Agreement,
and thereafter upon request from the other Party, both Parties will provide
certificates and renewal certificates of insurance reflecting such policies and
coverages as required above.
20 NON-SOLICITATION
Throughout the term of this Agreement and for a period of one (1) year
thereafter, neither Athena nor PSS will, directly or indirectly, induce or
attempt to induct any employee of the other to terminate his or her employment
with the other or hire or offer to hire away or attempt to hire away any
employee of the other.
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21 GENERAL
21.1 Entire Agreement. This Agreement constitutes the entire Agreement
between the Parties concerning the subject matter hereof and
supersedes any prior written or verbal agreements or understandings in
connection herewith. Upon the execution and delivery of this
Agreement, the Prior Agreement shall be amended in its entirety and
restated herein, and all provisions of, rights granted and covenants
made in the Prior Agreement shall be superseded in their entirety and
shall have no further force or effect. No addendum, amendment, waiver
or modification hereto or hereunder shall be valid unless specifically
made in writing and signed by an authorized signatory of each of the
Parties hereto. No form, invoice, order, receipt or other document
provided by either Party shall operate to supersede, modify or amend
any provisions of this Agreement, unless the document expressly states
that it modifies or amends this Agreement and is signed by an
authorized representative of both Parties. Neither Party's failure to
exercise any of its rights under this Agreement will constitute or be
deemed a waiver or forfeiture of those rights. All Exhibits attached
to the Agreement shall be deemed a part of this Agreement and
incorporated herein. Terms that are defined in this Agreement, and
used in any Exhibit, have the same meaning in the Exhibit as in this
Agreement. The provisions of an Exhibit shall prevail over any
conflicting provisions of the body of this Agreement.
21.2 Publicity. During the term of this Agreement and at all times after
the termination or expiration of this Agreement for any reason,
neither Party shall make any media release or other public
announcement relating to or referring to this Agreement without the
other Party's prior written consent. Notwithstanding the foregoing, to
the extent required by the Securities and Exchange Commission or other
agency, either Party may make public disclosures about this Agreement
and the terms thereof. Either Party will provide a copy of any
required public disclosures associated with this Agreement at least
two (2) business days prior to release to the public. Athena shall
acquire no right to use, and shall not use, without PSS's prior
written consent, the terms or existence of this Agreement, the names,
trade names, trademarks, service marks, artwork, designs, or
copyrighted materials, of PSS, its related or subsidiary companies,
parent, employees, directors, shareholders, assigns, successors or
licensees: (a) in any advertising, publicity, press release, client
list, presentation or promotion; (b) to express or to imply any
endorsement of Athena or Athena's products; or (c) in any manner other
than expressly in accordance with this Agreement.
21.3 Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or
certified mail or delivered either by hand or by messenger, or sent
via fax, addressed to the address set forth at the foot of this
Agreement. Any notice or other communication so addressed and mailed
by registered or certified mail (in
24
each case, with return receipt requested) shall be deemed to be
delivered and given when so mailed. Any notice or other communication
so addressed and delivered by hand, by messenger or by fax shall be
deemed to be given when actually received by the addressee.
21.4 Venue and Jurisdiction. The laws of the State of Florida, will govern
any disputes arising in connection with this Agreement. Athena and PSS
hereby consent to the exclusive jurisdiction and venue of the Florida
federal courts, and Florida state courts if a federal court denies
jurisdiction.
21.5 Attorneys' Fees. In any action to enforce a provision of this
Agreement, the prevailing party shall be entitled to recover from the
non-prevailing party reasonable attorneys' fees and other costs
incurred in such action, in addition to any other relief available at
law.
21.6 Severability. If for any reason any provision of this Agreement shall
be deemed by a court of competent jurisdiction to be legally invalid
or unenforceable, the validity of the remainder of the Agreement shall
not be affected and the offending provision shall be deemed modified
to the minimum extent necessary to make it consistent with applicable
law, and, in its modified form, the provision shall then be
enforceable and enforced.
21.7 Captions. The section headings and captions of this Agreement are for
convenience and reference only and in no way define, limit or describe
the scope or intent of this Agreement nor substantively affect it in
any way.
21.8 Survival. Any expiration or termination of this Agreement shall be
without prejudice to the survival of any provision expressly extending
beyond the term of this Agreement or necessary to interpret the rights
and obligations of the Parties in connection with the expiration or
termination of this Agreement. Without limiting the generality of the
foregoing, the following provisions shall survive the expiration or
termination of this Agreement: Section 3.11, Section 4.2, Section 5.6,
Article 15 (Confidentiality), Article 16 (Indemnification), Article 17
(Limitation of Liability), Article 18 (Conflict Resolution) and
Article 21 (General).
21.9 Third Party Beneficiaries. This Agreement is solely for the benefit of
the parties and their successors and permitted assigns, and does not
confer any rights or remedies on any other person or entity.
21.10 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the respective parties hereto, their respective
successors-in-interest, legal representatives, heirs and assigns.
21.11 Further Assurances. Each Party hereto agrees to take, or cause to be
taken, all such further or other actions as shall reasonably be
necessary to make effective, to consummate and to perform the
undertakings and obligations contemplated by this Agreement.
25
21.12 Cumulative Remedies. Except as otherwise expressly provided for in
this Agreement, the rights and remedies provided in this Agreement and
all other rights and remedies available to either Party at law or in
equity are, to the extent permitted by law, cumulative and not
exclusive of any other right or remedy now or hereafter available at
law or in equity. Neither the asserting of any right nor the employing
of any remedy shall preclude the concurrent assertion of any other
right or employment of any other remedy.
21.13 Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall be considered one and the
same Agreement.
26
IN WITNESS WHEREOF, the Parties have executed this Agreement to be executed
by their duly authorized representatives.
athenahealth, Inc., WORLDMED SHARED SERVICES, INC.,
a Delaware corporation a Florida corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------- ------------------------------------
Printed: ▇▇▇▇▇▇▇▇ ▇▇▇▇ Printed: ▇▇▇▇ ▇▇▇▇▇
Its: Chairman & CEO Its: EUP/CMO
27
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
EXHIBIT A
COMMISSIONS
1. Commission Rates. If Athena enters an Initial Sale by countersigning a PSS
Order for provision of Revenue Cycle Services and/or Clinical Cycle Services
with a PSS Lead within eighteen months after the PSS Lead first becomes a PSS
Lead, then Athena will pay a commission to PSS at the rates set forth below:
Commission Rates:
Initial Commission Subsequent Commission
Payment Payments
-------------------------- ---------------------
PSS Commission Payment (calculated *% (based on *% of each *%
as a percentage of Estimated PSS Order's Estimated
Contract Value of a PSS Order) Contract Value)
2. Accrual of Commissions. The commissions shall accrue as follows with respect
to each PSS Order and shall be payable pursuant to Section 7 of the Agreement:
a. Initial Commission Payment:
- *% of Athena's projected Year 1 Revenue for the PSS Order as
calculated in the applicable Athenahealth Services Agreement will
accrue with respect to *% of the Estimated Contract Value of a
PSS Order on the date on which Athena countersigns a PSS Order
for provision of Services to a PSS Lead. Such amount shall be
paid on the Go Live Date of such PSS Order, and shall be adjusted
15 months after the Go Live Date to reflect actual revenue
received by Athena during the first year of the contract with
such PSS/Athena Customer.
b. Subsequent Commission Payments:
- The subsequent annual commission payments, which shall be equal
to *% in the aggregate based on the actual Revenue with respect
to a PSS Order as of the date 15 months after the PSS Order's
"Go-Live Date," will accrue in 12 monthly installments beginning
on the PSS Order's "Go-Live Date" as such term is defined in the
applicable Athenahealth Services Agreement. Thereafter, annual
commissions due to PSS with respect to a PSS Order shall accrue
in 12 monthly installments beginning on each anniversary of the
PSS Order's Go-Live Date. For purposes of calculating the
Subsequent Commission Payments, "Revenue" shall mean net
collections that have been irrevocably paid by a PSS/Athena
Customer to Athena in cash in consideration for the provision of
Services.
3. "Deal Assist" Commissions shall be equal to *% of the first year Estimated
Contract Value of any order that is not a PSS Order but with respect to which
PSS has rendered assistance as described in Section 11.2 hereof. Such amount
shall be paid on the Go Live Date of such
28
order, and shall be adjusted 15 months after the Go Live Date to reflect actual
revenue received by Athena during the first year of the contract with such
customer.
4. Credit. If a PSS/Athena Customer's Athenahealth Services Agreement is
terminated prior to the applicable "Go-Live Date", then Athena will credit the
amount of any Initial Commission Payment made to PSS with respect to such
PSS/Athena Customer against the next payable commissions accrued hereunder,
until the amount of the initial commission for such PSS Order payment is offset
in full.
29
EXHIBIT B-1
ATHENACOLLECTOR SERVICES AGREEMENT
30
EXHIBIT B-2
ATHENACLINICALS SERVICES AGREEMENT
31
EXHIBIT C
LITIGATION
On February 8, 2005, the Company was served with a Complaint in Billingnetwork
Patent, Inc. v. athenahealth, Inc., alleging patent infringement. This lawsuit
is pending in the Federal District Court of Florida, Middle District (Case
Number 05-00205). The Company does not believe it is liable for patent
infringement. Billingnetwork Patent, Inc. has sued a number of other entities
including two public companies. The patent as written is not limited to the
health industry, but would include billing in a broad array of commercial
contexts. The Company selected counsel and filed a Motion to Dismiss. The
Company is awaiting further action by the Court.
32
EXHIBIT D
CERTAIN AGREEMENTS OF THE PARTIES
- Neither Party will take any action which would have the effect of causing
the other to be in violation of any laws, decrees, rules, or regulations.
- Each Party covenants and warrants to the other on a continuing basis that
any payments or remuneration to it under this Agreement are for it's own
account, and that except as appropriate to carry out its duties as set
forth herein in a legal manner, it has no obligation to and will not,
directly or indirectly, give, offer, pay, promise to pay, or authorize the
payment of money or thing of value to any other person in connection with
any transaction for which any payment or remuneration is to be made under
this Agreement.
- Each Party represents and warrants to the other on a continuing basis
throughout the term that this Agreement is in effect that (1) neither it
nor any of its agents is a provider, physician, or supplier as those terms
are defined in the Social Security Act as amended from time to time, or any
regulations promulgated thereunder; and, (2) neither it nor any of its
agents is authorized to nor will they refer, steer, allocate, direct,
solicit or otherwise arrange for any patient visit, health care, medical
item or medical service with respect to any such provider, physician or
supplier that is a customer of Athena or arrange for or make any request
for such visit, care, item or service or any purchase order or lease with
respect to such visit, care, item or service.
- Each Party represents and warrants to the other that neither it nor any of
its agents: has been excluded, disqualified or debarred from participating
in any government program; is under sanction or conviction for any Medicaid
or Medicare program offense; is the subject of any investigative or
criminal, civil, administrative or qui tam proceeding with respect to any
allegation of such an offense; or, is party to any settlement or corporate
integrity agreement with respect to any allegation of such an offense. If
at any time during the term that this Agreement is in effect, the status of
the Party or any of its agents should change from the above with respect to
exclusion, disqualification, debarment, sanction, conviction, proceeding,
settlement or agreement, the Party will immediately notify the other in
writing of such change.
- Notwithstanding any provision to the contrary in this Agreement, no payment
or remuneration under this Agreement will accrue, be paid or be accepted on
account of sale of Athena's Services to any person or entity:
- That charges, bills or seeks reimbursement or payment on a cost basis
from any third party payment program or payor for all or any part of
such services;
- With which the PSS or any of its agents, employees, owners or
principals or any of their family members, directly or indirectly has
any relationship other than an arms-length relationship as a sales
agent or sales representative for one or more vendors to the person or
entity. Without limiting the foregoing, the following relationships on
the part of PSS will prevent such payment or remuneration:
- Operation, management or control,
- Engagement as an administrator, consultant, purchasing agent,
employee, officer, director, trustee, member of the governing
body, or attorney-in-fact,
- Management of substantial activities or exercise of substantial
commercial influence over business or personal affairs,
- A fiduciary duty or duty of fidelity in connection with general
business affairs or in connection with purchase of services from
Athena, or
- Permission or ability exercise purchasing discretion; or,
33
- If the offer, payment, receipt or solicitation of compensation to
PSS under this Agreement with respect to the person or entity is
in violation of any law or of any legal duty to the person or
entity.
- The Parties will each exercise reasonable diligence to identify and
avoid proposing or accepting Practices as PSS Leads any person or
entity for which payment will not be made under this Agreement, and
the Parties will reasonably cooperate to identify such person and
entities in advance of any payment. If either Party learns that
payment or remuneration has been made not as provided in this
Agreement, it will promptly notify the other in writing, and the
Parties will unwind the compensation and will cooperate in such other
steps as are proper and appropriate to remedy any such situation.
- Neither Party will claim payment in any form, directly or indirectly,
from any third party payment program or payor for all or any part of
any activity or for the cost of all or any part of any activity
covered under this Agreement, nor will either party shift the
financial burden of this Agreement to the extent that any cost
reimbursement is claimed from any third party payment program or payor
by either of them or to the extent that either party believes that any
cost reimbursement is claimed or may be claimed by any third party
from any third party payment program or payor.
- PSS will not solicit, receive, offer or pay anything of value,
directly or indirectly, to or from any person or entity in connection
with entry by such person or entity into any contract with Athena,
continuation of any contract with Athena, or acceptance of services or
items from Athena; and PSS will not condition, withhold, or threaten
to withhold anything of value to any person or entity in connection
with entry or consideration of entry by such person or entity into any
contract with Athena, continuation of any contract with Athena or
acceptance of services or items from Athena.
- PSS will make such disclosures to Practices and obtain such consents,
authorizations and agreements (including but not limited to any
business associate agreements as necessary) with respect to Practices
as are required by law in light of its relationships with those
Practices and its activities and obligations and rights in connection
with this Agreement.
NO FRANCHISE OR DISTRIBUTORSHIP: The Parties agree that nothing in this
Agreement or PSS' or Athena's performance under it will constitute PSS a
franchisee or participant in any business opportunity of or with Athena under
any applicable federal or state law.
34
EXHIBIT E
INVENTORY MANAGEMENT SYSTEM DEVELOPMENT GOALS
PHASE I:
Link to the existing ▇▇▇▇▇.▇▇▇ & SmartScan Basic Functionality from the
Athena Platform.
- Customers will be able to login to ▇▇▇▇▇.▇▇▇ from within an Athenahealth
frame-set.
PHASE II:
Integration of the PSS SmartScan Intermediate
- Will include an athena CPT Billing code reconciliation routine
- to the PSS inventory valuation
- Integration of PSS SmarScan intermediate to Physician GL Systems
PHASE III:
PSS and athenahealth will co-develop an integrated inventory management
platform for the tracking, ordering, and replenishment of medical supplies
within the physician office
- Development of an integrated athenahealth inventory management module.
To run on the athenahealth platform (Billing Integration).
Development of a real time athenahealth inventory management process that
is integrated into the procedure / usage capture during the patient
clinical work-flows. (EMR Integration).
35
EXHIBIT F
SUBSTANTIAL COMPETITORS
36
Agreement of Amendment
This Agreement of Amendment (the "Amendment") amends the terms of the
"AMENDED AND RESTATED MARKETING AND SALES AGREEMENT" entered between the Parties
hereto (the "Agreement"). Except as explicitly amended herein, the Agreement is
confirmed; and, it shall remain in full force and effect under its terms as
herein amended. Whereas the Parties desire to amend the Agreement in certain
respects as set forth below; now, therefore, in consideration of the obligations
set forth below and for other good and valuable consideration, the receipt and
sufficiency of which each Party hereby acknowledges, the Parties hereby agree to
amend the terms of the Agreement as follows:
1. Exhibit A to the Agreement is hereby deleted in its entirety and replaced
by the new version of Exhibit A attached to this Amendment.
IN WITNESS WHEREOF, the Parties have executed this Agreement to be
executed by their duly authorized representatives.
athenahealth, Inc., WORLDMED SHARED SERVICES, INC.
a Delaware corporation d/b/a PSS WORLD MEDICAL SHARED
SERVICES, INC.,
By: /s/ ▇▇▇▇ ▇▇▇▇▇ a Florida corporation
----------------------------
Printed: ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------
Its: CFO Printed: ▇▇▇▇ ▇▇▇▇▇
Its: EUP/CMO
----------------------------
6-22-07
1
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
EXHIBIT A
COMMISSIONS
1. Commission Rates. If Athena enters an Initial Sale by countersigning a PSS
Order for provision of Revenue Cycle Services and/or Clinical Cycle Services
with a PSS Lead within eighteen months after the PSS Lead first becomes a PSS
Lead, then Athena will pay a commission to PSS at the rates set forth below:
Commission Rates:
|-------------------------|-------------------------|---------------------|
| | Initial | Subsequent |
| | Commission Payment | Commission Payments |
|-------------------------|-------------------------|---------------------|
| PSS Commission Payment | *% (based on *% of each | |
| | PSS Order's Estimated | |
| | Contract Value) | *% |
|-------------------------|-------------------------|---------------------|
2. Accrual of Commissions. The commissions shall accrue as follows with respect
to each PSS Order and shall be payable pursuant to Section 7 of the Agreement:
a. Initial Commission Payment:
- In the month following the date on which Athena countersigns a PSS
Order for provision of Services to an PSS/Athena Customer, Athena
will pay *% of *% of the Year 1 Estimated Contract Value for such
PSS Order as calculated in the applicable Athenahealth Services
Agreement. 15 months after the Go-Live Date, Athena will compare the
Year 1 Estimated Contract Value to the actual Revenue received
during the 12 month period preceding such 15 month anniversary of
the Go-Live Date. If the actual Revenue during such period was lower
than the *% of the Year 1 Estimated Contract Value, then Athena
shall reduce the next commission payment due to PSS by such
difference multiplied by *%. If the actual Revenue during such
period was higher than *% of the Year 1 Estimated Contract Value,
then Athena shall increase the next commission payment due to PSS by
such difference multiplied by *%.
b. Subsequent Commission Payments:
- Beginning on the PSS Order's "Go-Live Date" as such term is defined
in the applicable Athenahealth Services Agreement subsequent
commission payments, will be paid on a monthly basis and will be
*% of the actual monthly Revenue to Athena.
For purposes of this Exhibit, (i) "Revenue" shall mean net collections
that have been irrevocably paid by a PSS/Athena Customer to Athena in cash
in consideration for the provision of Services, and (ii) "Year 1" means
the 12 month period beginning on a PSS/Athena Customer's Go-Live Date.
2
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
3. "Deal Assist" Commissions shall be equal to *% of *% of the Year 1
Estimated Contract Value of any executed contract for Athena's services that is
not a PSS Order but with respect to which PSS has rendered assistance as
described in Section 11.2 hereof. Such amount shall be paid in the month
following the Go Live Date of such Order. 15 months after the Go-Live Date of
such PSS/Athena Customer, Athena will compare the Year 1 Estimated Contract
Value to the actual Revenue received during the 12 month period preceding such
15 month anniversary of the Go-Live Date. If the actual Revenue during such
period was lower than *% of the Year 1 Estimated Contract Value, then Athena
shall reduce the next overall commission payment (including commission payments
made under Sections 2 and 3 of this Exhibit) due to PSS by such difference
multiplied by *%. If the actual Revenue during such period was higher than *%
of the Year 1 Estimated Contract Value, then Athena shall increase the next
overall commission payment due to PSS by such difference multiplied by *%.
4. Credit. If a PSS/Athena Customer's Athenahealth Services Agreement is
terminated prior to the applicable "Go-Live Date", then Athena will credit the
amount of any Initial Commission Payment made to PSS with respect to such
PSS/Athena Customer against the next payable commissions accrued hereunder,
until the amount of the initial commission for such PSS Order payment is offset
in full.
3