May 19, 1999
Mike Long
Chief Executive Officer
Healtheon Corporation
4600 Patrick Henry Drive
Santa Clara, CA 95054
Dear Mike:
This letter of agreement ("LOA") is entered into as of May 19, 1999
("Effective Date") and sets out the principal terms and objectives and
obligations of Healtheon Corporation ("Healtheon"), WebMD, Inc. ("WebMD") and
Microsoft Corporation ("Microsoft") with respect to the strategic relationship
which will exist between the parties in the event that Healtheon acquires WebMD
(with whom Microsoft has existing contractual and equity relationships),
pursuant to an Agreement and Plan of Reorganization under negotiation as of the
date of this LOA or otherwise ( the "H-W Transaction"). All of the terms set
forth in this LOA will need to be memorialized in a definitive written
agreement(s) (the "Agreement") satisfactory in form and substance to each
party. The legal obligations of each party with respect to the terms and
conditions set forth in this LOA will be solely as specified in this LOA. Each
party agrees to work together in good faith with the goal of concluding such
Agreement no later than May 30, 1999 or such other time as the parties mutually
agree. This LOA shall be legally binding until such time as the parties execute
the Agreement or such other time as the parties may mutually agree, provided
that if negotiations are terminated following the public announcement that the
H-W Transaction will not proceed, this LOA will have no legal effect.
1. DEFINITIONS.
1.1 "ASSIGNEE" means Healtheon, or in the case of a merger between
Healtheon and WebMD or some other process by which Healtheon is not the parent
company resulting from the H-W Transaction, that H-W Entity.
1.2 "HEALTHEON SITE" means the Healtheon Web site currently
located at the URL http://www.healtheon.com or any successor site(s) or
version(s) (e.g., localized for an international market, distributed to a
specific user group, etc.) thereof, including but not limited to the Healtheon
Consumer Site and the Healtheon Professionals Section.
1.3 "HEALTHEON CONSUMER SITE" shall mean that part of the
Healtheon Site currently located at the URL http://www.healtheon.com or any
successor site(s) or version(s) thereof which is directed at a consumer market.
1.4 "HEALTHEON PROFESSIONALS SECTION" shall mean that part of the
Healtheon Site currently located at the URL http://www.healtheon.com or any
successor site(s) or version(s) thereof that targets medical professional
market.
1.5 "H-W ENTITY" means the parent company resulting from the H-W
Transaction (which is expected to be Healtheon) in the event the H-W
Transaction results in a parent-subsidiary structure; otherwise, H-W Entity
means the surviving legal entity following the closing of the H-W Transaction,
or the acquiring party in the event that the H-W Transaction is structured as a
purchase of assets.
2. ASSIGNMENT OF DISTRIBUTION AND CROSS PROMOTION AGREEMENT. Healtheon,
Microsoft and WebMD agree that upon closing of the H-W Transaction and
completion of all necessary regulatory requirements (a) WebMD will
>PAGE> 2
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
assign to the Assignee, all of WebMD's rights and obligations under the
Distribution and Cross Promotion Agreement dated as of May 7, 1999 between
Microsoft, WebMD, WebTV and MSNBC ("WebMD Agreement"), (b) the Assignee will
accept such assignment and all such obligations thereunder, except as modified
under this LOA or as otherwise agreed by Microsoft, (c) the Assignee will be
fully and solely responsible for all obligations of WebMD under the WebMD
Agreement, and (d) all references in the WebMD Agreement to WebMD will mean
Assignee and all references in this LOA to Healtheon shall mean Assignee.
Microsoft agrees to approve and secure such other agreements as are necessary
to approve (as required to satisfy the requirements of Section 18.3 of the
WebMD Agreement) such assignment by WebMD. Each party agrees to execute such
documents as are necessary to give effect to the foregoing and such in a form
as mutually agreed between the parties.
3. MODIFICATIONS TO THE WEBMD AGREEMENT. Effective upon the closing of the
H-W Transaction, the parties hereby amend the WebMD Agreement as set forth
below. In the event of any inconsistency between the provisions of the WebMD
Agreement and this LOA, the provisions of this LOA shall control:
3.1 All obligations with respect to the WebMD Site, e.g., as set
forth in Sections 3.2 (Internet Access), 3.4 (Other Microsoft Properties), and
3.5 (MSN Module) of the WebMD Agreement, as such may be modified by this LOA,
will apply to both the WebMD Site and to the Healtheon Site and any successors
or parts thereof.
3.2 With respect to and without limiting anything contained in
Section 3.3 of the WebMD Agreement, in the event that Microsoft elects to
create a combined health care-related directory for the Health Channel (as
defined in the WebMD Agreement), Healtheon's health care-related directory
listings shall also be made available for inclusion in such directory.
3.3 Without limiting anything contained in the WebMD Agreement,
with respect to any rights Microsoft, MSNBC and/or WebTV has with respect to
the WebMD Consumer Site (as defined in the WebMD Agreement), Microsoft, MSNBC
and/or WebTV shall also have such rights with respect to the Healtheon Consumer
Site (e.g., the Health Channel (as defined in the WebMD Agreement) shall
include content, features, technology and the like from the Healtheon Consumer
Site) subject to any agreements Healtheon or WebMD has with third parties in
existence as of the Effective Date. Without limiting anything contained in the
WebMD Agreement, with respect to any rights Microsoft, MSNBC and/or WebTV has
with respect to the WebMD Medical Professionals Section (as defined in the
WebMD Agreement), Microsoft, MSNBC and/or WebTV shall also have such rights
with respect to the Healtheon Professionals Section to the extent that
Healtheon is able to provide such rights under its agreements with third
parties in existence as of the Effective Date. In all agreements executed with
third parties after the Effective Date, Healtheon shall exercise best efforts
to obtain the foregoing rights for Microsoft, except that, Healtheon's
obligation as set forth in this Section 3.3 shall not apply to content,
features and technology that it may create for a custom project so long as such
content, features and technology are not included on the Healtheon Site or
WebMD Site. In addition, Healtheon will provide significant online and offline
promotional opportunities surrounding the successful positioning and launch of
Healtheon's Community Directory Services ("CDS"). CDS is defined as a regional
directory and information service comprising physicians and healthcare
institutions that will include a vehicle for health care institutions and
providers to publish information about themselves to the local community,
affording them the opportunity to interact directly with consumers; it will
include the ability for MSN-generated consumers and professionals to link to
healthcare transactions on the Healtheon website, thereby creating a
transaction revenue stream for MSN. This ability to do a locally-directed
search which facilitates consumer to physician transactions and communications
will be unique to the CDS exclusively distributed on MSN; provided, however,
that Healtheon may offer the CDS on the Healtheon Site, but may not offer or
provide the CDS to any third party sites. Within the proposed CDS, Healtheon
will enable broader e-commerce capabilities to complement the core Healtheon
transaction sets. This includes linking the participating CDS firms with a
buying/selling environment for supplies, services and goods. Participation in
the broader CDS will be key to driving commerce within the Mall area of the MSN
Site and in Microsoft's discretion, within the Mall area of the Healtheon site,
which, in Microsoft's discretion, shall also be accessible and promoted from
the Health Channel or other Microsoft Internet properties.
3.4 TRANSACTION REVENUES. In addition to those amounts set out in
the WebMD Agreement, Healtheon will pay Microsoft a royalty in consideration of
Microsoft's distribution of the Health Channel and other Healtheon consumer and
business to business services. Such royalty shall be equal to 15% of Healtheon
"Net Transaction Revenues" for "Electronic Transactions" that originate on the
Health Channel or other Microsoft
2
>PAGE> 3
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
properties. "Electronic Transactions" means electronic transactions between
healthcare institutions (e.g. payers and providers) or between consumers and
healthcare institutions, and suppliers and healthcare institutions such as, but
not limited to, claims submissions, claims status inquiries and eligibility
inquiries. Electronic Transactions will include the EDI transaction set
currently processed by Healtheon and any additions to that transaction set that
Healtheon may make during the term of the WebMD Agreement. The parties will
prepare and agree upon a written schedule listing all Electronic Transactions
and update such schedule from time to time as new transactions become
available. "Net Transaction Revenues" means the gross fees paid to Healtheon
for such transactions less direct, variable expenses paid to third parties
incurred to process such transactions. Specific examples of these expenses
include:
a. Commercial EDI Claim: PMS vendor transmits claim
from provider office to Healtheon; Healtheon pays
PMS vendor $.10 for such claim; Healtheon routes
claim on to commercial insurance company; Insurance
company pays Healtheon $.35 for such transaction.
Healtheon has gross fees for such transaction of
$.35, direct variable expenses paid to third parties
of $.10, and Net Transaction Revenues" of $.25.
b. Medicare EDI Claim: PMS vendor transmits claim to
Healtheon; PMS vendor pays Healtheon $.30 to accept
such claim; Healtheon routes claim to clearinghouse;
Healtheon pays clearinghouse $.10 to accept such
claim. Healtheon has gross fees of $.30, direct
variable expenses of $.10, and Net Transaction
Revenues of $.20.
c. Laboratory Transaction: Provider office transmits
order for clinical lab test to Healtheon; Healtheon
transmits order to Clinical Lab; Clinical Lab
transmits result to Healtheon; Healtheon transmits
results to provider. Clinical Lab pays Healtheon
$.40. No third party fees are paid. Net Transaction
Revenues are $.40.
3.5 Healtheon shall exercise best efforts to meet the obligations
as specified in the Migration Plan to be developed pursuant to Section 11
below. In the event that Healtheon fails to meet its obligations under the
preceding sentence, Microsoft shall notify Healtheon of such failure and
Healtheon shall have a 90 day period in which to cure such failure. For
purposes of this Section 3.5, "cure" shall mean that Healtheon has demonstrated
substantial visible progress toward the goals as outlined in the Migration
Plan. If, at the end of such 90 day cure period, Healtheon has failed to cure
such failure, Microsoft shall have the right to immediately suspend its
obligation under Section 12.2(a) of the WebMD Agreement to pay the positive
difference between the applicable Year Guarantee (i.e. the First Year
Guarantee, Second Year Guarantee, etc.) and WebMD's portion of the Microsoft
Revenues until such time as Healtheon has cured such failure (the "Suspension
Period"). For each day of a Suspension Period, the applicable Year Guarantee
shall be reduced by 1/365th and such amount shall be forfeited by Healtheon.
The remedy provided for in this Section 3.5 is not meant to waive any other
rights or remedies available at law or equity.
3.6 In addition to and without limiting anything contained in
Section 2.5 of the WebMD Agreement, Healtheon agrees not to provide the CDS or
any part thereof to any third party, for distribution on the Internet, without
Microsoft's prior written consent. Further, in the event that Healtheon enters
into an agreement with any other third party to provide consumer health-related
content for distribution on the Internet, Healtheon agrees to provide Microsoft
with thirty (30) days prior written notice before the launch of such consumer
health-related content on the Internet, and Healtheon shall not offer such
third parties consumer health-related content that has not also been previously
or concurrently made available to Microsoft. Nothing in this Section 3.6 is
intended to prevent Healtheon from placing advertisements on the Top Ten Portal
Sites or other third party sites. Microsoft shall have the right to distribute
Healtheon's Community Directory Service, but shall not be obligated to include
it on any Other Microsoft Properties (as defined in Section 3.12 below).
3.7 BASIC MEMBERSHIP FEE. Section 1.25 of the WebMD Agreement is
amended to read as follows:
"BASE MEMBERSHIP FEE" shall mean the lesser of (i) $29.95 per month or
(ii) the lowest rate that WebMD offers WebMD Memberships to any other
third party (including without limitation to other third party
sponsors) during the Term of this Agreement (excluding third party
agreements for lower rates executed prior to the Effective Date).
3
>PAGE> 4
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
3.8 WEBMD ADVERTISING/SPONSORSHIP REVENUES. The parties agree that
WebMD Advertising/Sponsorship Revenues, WebMD Upsell Revenues, and WebMD
E-Commerce Revenues do not include the Base Membership Fees (or similar
membership fees, however they may be structured in the future; provided,
however, that the definition of such membership fees may not be the same or
substantially similar to the definitions of WebMD Upsell Revenue, WebMD
E-Commerce Revenue or WebMD Advertising Sponsorship Revenues as defined in the
WebMD Agreement) paid by End User Members, or paid by Microsoft, DuPont or
other underwriters of WebMD memberships.
3.9 HEALTH CHANNEL REQUIREMENTS. The parties agree to the
following points of clarification, which shall override any conflicting
provisions of the WebMD Agreement:
3.9.1 Healtheon may create custom web sites or portals for
its healthcare institution customers (for example, without limitation,
providers such as Baylor Healthcare or payers such as United
Healthcare), and Healtheon will not be required to provide to
Microsoft or notify Microsoft of the content or features of such
custom web sites. Healtheon will promote Microsoft technology to its
customers, including the use of Microsoft platforms for such custom
web sites. Healtheon will advise Microsoft on the extent of Healtheon
customer usage of Microsoft technology on an aggregate basis to the
best of Healtheon's knowledge. By way of example, Healtheon will
provide Microsoft with a list of names of those customers for whom
Healtheon builds such custom web sites or portals based on Microsoft
technology, including what percentage of all custom web sites and
portals built by Healtheon such customers represent, subject to any
confidentiality obligations of Healtheon.
3.9.2 In the event that Healtheon desires to offer to third
parties advertisements and sponsorships on the Health Channel, it
shall notify Microsoft of such desire and the parties shall meet to
discuss Healtheon's proposal in this regard. The parties shall agree
in advance in writing on a plan detailing agreed upon packages and
sales plans for such advertisements and sponsorships. Nothing in this
Section 3.9.2 is intended to impair or in any way diminish Microsoft's
rights under Section 6.1 of the WebMD Agreement.
3.10 INTERNATIONAL DISTRIBUTION. The parties agree that the
provisions of Section 2.3 of the WebMD Agreement apply only to markets outside
of the United States.
3.11 USER INFORMATION.
3.11.1 OWNERSHIP/USE. Microsoft and Assignee shall jointly
own any and all User Information collected by either party from Users
of the Health Channel and the party collecting such User Information
will use commercially reasonable efforts to obtain from such Users the
right to share such User Information with the other party, provided
that each such User shall in all cases be given the right to opt out
of any use (including sharing between the parties) of any of such
Users' Personal Information. Microsoft and Assignee shall jointly own
any and all User Information collected from (a) all Users of the WebMD
Consumer Site and Healtheon Consumer Site whose use of either such
site originated on the Health Channel or any MSN Site, (b) all End
User Members with Microsoft-sponsored WebMD Memberships, and (c)
relating to End User Members who receive WebMD Memberships through
Microsoft or Microsoft distribution partners, provided that they party
collecting such User Information will use commercially reasonable
efforts to obtain from such Users the right to share User Information
with the other party, provided further that (i) each such User shall
in all cases be given the right to opt out of any use (including the
sharing between the parties) of any of such Users' Personal
Information. The collecting party of any such User Information
described herein shall provide such User Information to the other
party on a monthly basis in such format as reasonably requested by
such other part. As between the parties, each party may use the User
Personal Information in its possession solely for the purpose of
fulfilling the product or service for which the information was
collected and otherwise as requested by a User concerning such User's
Personal Information, provided, however, that subject to any such User
request all User Information shall be treated in the same fashion as
Confidential Information pursuant to Section 10 below and
specifically, without limitation, shall not be provided to any third
party nor used on behalf of any third party, including but not limited
to, for promoting or advertising any third party, without the other
party's prior written consent. Notwithstanding the foregoing, each
party hereby approves the other party using and providing to
4
>PAGE> 5
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
third parties Aggregate Information to be used in research projects
and statistical reporting. Any other use of the User Information
during the Term shall be by mutual agreement of the parties. As
between the parties, upon termination of this Agreement, (x) each
party may retain the User Information in its possession and no party
shall restrict the other's use in any way and (y) the collecting party
shall provide to the other party all User Information pertaining to
the MSN Users of the WebMD Health Communities (as defined in Section
3.7 of the WebMD Agreement).
3.11.2 Notwithstanding anything contained in sub-Section
3.11.1 above, (i) neither party shall be required to provide User
Information to the other party if doing so would violate the End
User's instructions, applicable laws or regulations, (ii) Healtheon
will not be required to provide to, or to attempt to obtain User
consent to provide to, Microsoft, WebTV or MSNBC any information that
is subject to HIPAA or any other law or regulation pertaining to the
protection of medical records, and (iii) subject to subsection
3.11.2(i) and (ii), Healtheon shall use best efforts to provide
Microsoft with all User Information associated with non-medical record
Internet and Web site usage, CDS, health communities directory, and
use relating to any Microsoft provided services including but not
limited to, Other Microsoft Internet Services, Other Microsoft
Properties, MSN IA, Passport, and WebMD Health Communities.
3.11.3 Except where the parties jointly use the User
Information (and thus jointly obtain the user's permission and are
jointly responsible for such use), each party shall be responsible for
ensuring that its own use of the User Information (i) complies with
all User consent requirements, including but not limited to as
provided in Section 3.11.4 below, and (ii) complies with all
applicable laws and regulations, including concerning the security,
confidentiality, use or possession of User Information.
3.11.4 CONSENT. In addition to the foregoing, any
collection, disclosure or use of Personal Information by either party
shall be subject to the User's consent, and the business practices and
User privacy policies of the site from which it is collected (e.g.,
the Health Channel, an MSN Site, WebMD Consumer Site or Medical
Professionals Section). The business practices and policies of each
such site shall permit, as their default, the collecting party to
grant the other party the rights required by this Section 3.11, unless
the User specifically requests otherwise, and in all cases shall
comply with any applicable laws governing the collection,
dissemination and use thereof. "Consent" as used in this Agreement
shall mean the approval of an adult, and in the case of minor
children, the approval of the child's parent or legal guardian. WebMD
and Microsoft shall mutually agree on the Health Channel user
interface for the collection of Personal Information. Microsoft shall
determine the privacy policy for the Health Channel. Assignee shall
determine the privacy policy for the WebMD Site and Healtheon Site.
3.12 OTHER MICROSOFT PROPERTIES. Except as prevented by any
contracts between Healtheon and third parties existing as of the Effective
Date, Healtheon agrees that Microsoft and its affiliates shall be the sole
providers of consumer Internet information and services for the Healtheon Site
and WebMD Site (including specifically without limitation the Non-Health
Related Section and the Health Related Section), in all areas for which
Microsoft or its affiliates owns or controls such content, features or
services, etc. as of the Effective Date (the "Other Microsoft Properties"). As
of the Effective Date, the Other Microsoft Properties shall be deemed to
include travel (e.g., Microsoft Expedia), automotive (e.g., Carpoint), real
estate (e.g., Home Advisor), money, investing and finance (e.g., Money,
Investor), entertainment and directories (e.g. Sidewalk including but not
limited to MSN Yellow Pages), reference (e.g., Encarta), movies (e.g.,
Sidewalk), news (e.g., MSNBC), email (e.g., Hotmail), messenger, (e.g., MSN
Messenger Service), calendar (e.g., Microsoft Calendar), search (e.g., MSN Web
Search), chat (e.g., Microsoft Chat), personal web pages, and community
technology; provided that Healtheon may elect in its sole discretion not to
provide content, features or services for any area. For content, features or
services for areas not included in the Other Microsoft Properties ("New
Microsoft Properties"), if Microsoft or its affiliates make publicly available
such content, features or services before Healtheon, Healtheon agrees that,
where commercially reasonable, Microsoft and its affiliates shall be the sole
providers of such New Microsoft Properties for the Healtheon Site and WebMD
Site. For purposes of the immediately preceding sentence, "commercially
reasonable" shall mean those situations where Healtheon (1) has already made
substantial progress toward an alternate solution and (2) has previously made a
significant investment in or contractual commitment to that alternative
solution. For New Microsoft Properties that Microsoft or its affiliates make
publicly available after Healtheon makes publicly available substantially
similar content, features or services, Microsoft and its affiliates shall be
the sole providers of such new Microsoft Properties for the Healtheon Site and
WebMD Site only upon mutual agreement of the parties.
5
>PAGE> 6
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
The foregoing shall exclude, however, any Microsoft content, features, or
services that are predominantly health care related, unless mutually agreed
upon by the parties. Except as prevented by any contracts in existence as of
the Effective Date, in the event that Healtheon makes available to end users
any non-web-based email technology, whether through the distribution of work
stations or otherwise, Microsoft shall be the sole provider of such technology
for such distribution and shall provide such technology under standard terms
and conditions for such distribution; provided that such Microsoft technology
be Microsoft Outlook or such other Microsoft technology designated by
Microsoft. Without limitation, being the "sole provider" means that Healtheon
shall not place, distribute, advertise, market, link to, refer to or otherwise
include the content, features or services, etc. of any party other than
Microsoft.
3.13 MSN MODULE. The provisions of Section 3.5 of the WebMD
Agreement do not apply to the Medical Professionals Section of the WebMD Site
or Healtheon Site.
3.14 DISTRIBUTION OF MEDICAL PROFESSIONALS SECTION. Exhibit J-1 of
the WebMD Agreement is amended by deleting Healtheon and IBM from such Exhibit.
In the event that Healtheon determines that it will outsource its data center,
Healtheon agrees that Microsoft may nominate vendors to bid on such opportunity
and that Healtheon will provide such vendors a reasonable and equal opportunity
to bid. In addition, the last sentence of Section 11.2(c) of the WebMD
Agreement is hereby modified to read as follows:
In addition, in the event that the parties mutually agree to allow a
third party to host WebMD Offerings, WebMD hereby licenses to
Microsoft and/or such third party all such rights as are necessary to
permit Microsoft and such third parties to use, copy, execute,
display, perform, distribute, transmit, and/or broadcast the agreed
upon WebMD Offerings as necessary for Microsoft and/or such third
party(ies) to host such WebMD Offerings.
3.15 WEBMD ADDITIONAL PAYMENTS. In order to resolve an ambiguity in
the wording of Section 12.3 of the WebMD Agreement, the parties agree that the
amount on which the 25% commission is paid under Section 12.3 is capped at the
applicable yearly guarantee and the commission is thereby capped at 25% of the
applicable yearly guarantee.
3.16 PAYMENTS FOR MICROSOFT SPONSORSHIP COMMITMENT. Section 12.4(a)
(iv) of the WebMD Agreement is hereby amended to read as follows:
the amount of Distribution Payments due from WebMD to
Microsoft in accordance with Section 12.5 below.
3.17 WARRANTIES. (a) Subsection 14.1(ii) of the WebMD Agreement is
amended to read as follows:
except for those agreements identified in Exhibit F attached
hereto, it has not previously and will not grant any rights
to any third party that are inconsistent with the rights
granted to Microsoft, MSNBC and/or WebTV herein;
(b) Subsection 14.1(vii) is amended to read as follows: (vii)
the WebMD Content, to the best of WebMD's knowledge after
reasonable inquiry, is factually accurate and does not
contain any information, instruction or formula that might be
injurious to anyone's physical well-being, and that it does
not, and its use by Microsoft as permitted in this Agreement
will not, defame or disparage any third party.
Notwithstanding the foregoing, the parties acknowledge that
Healtheon's failure to review content provided by Healtheon
or WebMD for accuracy (including, but not limited to, medical
content) shall not constitute a breach of this Section
14.1(vii); provided, however, that nothing in this Section
14.1(vii) is intended to, nor shall it, in any way lessen or
otherwise impact Healtheon's warranty or indemnification
obligations set forth in Section 14.3 below.
3.18 CONTENT SPECIFICATIONS. It is understood that the provisions
of Exhibit A-1 of the WebMD Agreement do not apply to the Medical Professionals
Section of the WebMD Site or Healtheon Site.
6
>PAGE> 7
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
4. MICROSOFT ONLINE ID PROGRAM. Healtheon agrees to test, evaluate, and
use, take sign ups for and accept the IDs for Microsoft's proprietary
authentication service ("Microsoft Passport") on both the Health Channel (as
provided in the WebMD Agreement) and on the Healtheon Site and the WebMD Site,
and all of WebMD's existing profiling and authentication mechanisms will also
take sign ups for and accept the IDs for Passport. Healtheon shall use
Microsoft Passport in accordance with the terms of the then-current Microsoft
Online ID Evaluation Program Agreement attached hereto as Exhibit A and such
further standard terms and conditions that are offered from time to time in
addition to or as a replacement for those currently contained in such
agreement. The parties acknowledge and agree that Healtheon may accept other
authentication mechanisms on the Healtheon Site and WebMD Site. Healtheon
agrees, however, that Microsoft Passport will be the only authentication
mechanism distributed (i.e., take sign ups) on the Health Channel (as provided
in the WebMD Agreement) and on the Healtheon Consumer Site and WebMD Consumer
Site other than any Healtheon proprietary authentication mechanisms existing as
of the Effective Date or as mutually agreed between the parties. Healtheon's
obligations under this Section 4 shall extend to any localized WebMD Consumer
Site, to the extent that a localized version of Passport is available for the
relevant market. In the event that Healtheon reasonably believes that Microsoft
Passport does not meet its reasonable quality and service standards, or that it
fails to comply with identified legal requirements, Healtheon shall notify
Microsoft of the details of such concerns and Microsoft shall have ninety days
in which to resolve such concerns. In the event that Passport does not meet
such reasonable quality and service standards or Microsoft determines, in its
sole discretion, that it is not commercially reasonable to modify Passport in
such a manner as to resolve such concerns, then Healtheon shall be permitted to
distribute and accept other mechanisms for the purposes identified in
Healtheon's notice to Microsoft on the WebMD Site or the Healtheon Site.
5. OTHER MICROSOFT INTERNET SERVICES. Except as prevented by any contracts
between Healtheon and third parties existing as of the Effective Date, upon
notice from Microsoft that any such service or technology is available for
distribution, Healtheon agrees, as soon as commercially feasible, to
prominently implement on the Healtheon Site, and prominently provide end users
with access from the Healtheon Site to, each Microsoft Internet service and
technology that is available on the MSN Site as of the Effective Date,
including, but not limited to services and technologies included within the
Other Microsoft Properties, a Microsoft business, e-commerce, communication
service and technology, which includes a common format and process for
exchanging products, business information, promotional information and other
business data over the Internet, and a Microsoft web hosting service and
technology, which includes software and tools that enable web site creation and
hosting, and all other Microsoft Internet services not otherwise specifically
addressed in other Sections of this Agreement that are available on the MSN
Site as of the Effective Date ("Other Microsoft Internet Services") pursuant to
Microsoft's standard user interface and distribution terms. For services or
technologies not included in the Other Microsoft Internet Services ("New
Microsoft Internet Services"), if Microsoft or its affiliates make publicly
available such services or technology before Healtheon, Healtheon agrees that,
where commercially reasonable, Microsoft and its affiliates shall be the sole
providers of such New Microsoft Internet Services for the Healtheon Site and
WebMD Site. For purposes of the immediately preceding sentence, "commercially
reasonable" shall mean those situations where Healtheon (1) has already made
substantial progress toward an alternate solution and (2) has previously made a
significant investment in or contractual commitment to that alternative
solution. For New Microsoft Internet Services that Microsoft or its affiliates
make publicly available after Healtheon makes publicly available substantially
similar services or technology, Microsoft and its affiliates shall be the sole
providers of such new Microsoft Internet Services for the Healtheon Site and
WebMD Site only upon mutual agreement of the parties. To such end, Microsoft
shall provide Healtheon with such materials, technology and support as it
routinely provides to other third parties distributing such technologies. In
the event that Healtheon offers Other Microsoft Internet Services or New
Microsoft Internet Services on the Healtheon Site in accordance with the
foregoing, Healtheon shall not promote any competing technology on the
Healtheon Site, other than during a commercially reasonable transition period
for discontinuing any such promotion. Healtheon's obligations under this
Section 5 are subject to Healtheon's contractual obligations existing as of the
Effective Date, and shall extend to any version of the Healtheon Site localized
for any international market and to any version(s) of the Healtheon Site, to
the extent that a localized version of any Other Microsoft Internet Service(s)
or New Microsoft Internet Service(s) is available for the relevant market.
Healtheon shall develop, maintain, and host that which is necessary and
reasonably requested by Microsoft to implement the services and technologies
specified in this Section 5. Upon mutual agreement, the parties shall work
together and with appropriate third parties to create appropriate industry
standards.
6. SECURE MESSAGING AND NOTIFICATION SERVICES. The parties agree that
within thirty days of the Effective Date, they will meet to discuss and
determine whether to create a mutually agreed plan pursuant to which they will
7
>PAGE> 8
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
pursue opportunities for Healtheon in the following areas: (i) offering of
Healtheon's secure messaging service to HotMail users; and (ii) joint
development and provision of notification services (e.g., schedule an
appointment, prescription refill reminders) to Health Channel users, including
integration of such services into other MSN properties such as personalization
services and Hotmail.
7. MICROSOFT ADCU OBJECTIVES.
7.1 PRESS RELEASE. Consistent with the technology and platform
commitments made in the WebMD Agreement, simultaneously with the announcement
of the H-W Transaction or at such other time as Microsoft and Healtheon
mutually agree, Microsoft and Healtheon will jointly develop a public press
release announcing Healtheon's long-term commitment to Microsoft's technology
and platform and articulating the benefits of building a healthcare portal and
transaction solution on Microsoft technology. In addition, Healtheon agrees to
issue additional subsequent press releases and public announcements pertaining
to successes or milestones of events utilizing Microsoft technology no less
frequently than once per quarter or as otherwise mutually agreed between the
parties, provided that such releases shall be at a time and in a form mutually
agreed between the parties.
7.2 ISV INTEGRATION. Understanding that Microsoft currently works
with over 460 healthcare independent software vendors ("ISVs"), Microsoft and
Healtheon agree to cooperate in good faith to develop a plan ("Plan 1") for
integrating existing ISV applications and systems for transaction processing
into the Healtheon solution for health care (including but not limited to use
of the Healtheon Site and Healtheon healthcare transaction solutions) (i.e., to
make compatible with the back end Healtheon technology). The Plan 1 will be
completed within thirty (30) days of the Effective Date and will incorporate
the following components:
7.2.1 A clear value proposition to ISVs that positions
Healtheon, to the extent reasonably possible consistent with Healtheon's
business plan, as a healthcare web portal providing content, community, and
services. In the event that Microsoft reasonably determines that Healtheon's
owning (whether through building or acquiring) any line of business application
designed to replace (rather than supplement or interface to) traditional
software applications falling within one or more of the Core Categories is
contrary to the parties' goals and intent with regard to the ISVs under the
WebMD Agreement and this Agreement, Microsoft shall notify Healtheon of such
determination. Microsoft shall notify Healtheon of such determination within 15
days after Healtheon notifies Microsoft of Healtheon's intent to build or
acquire any such line of business application. The parties shall have a 45-day
period following notice of such determination in which to work together to
reach consensus on whether the particular line of business application
materially conflicts with such goals and intent and how to resolve such
conflict. If Healtheon becomes the owner of a line of business application in a
Core Category as a result of a business acquisition, merger or other business
combination, the resolution of such conflict would include a reasonable
transition period of 180 days for Healtheon to harmonize such line of business
application with the objectives of this agreement or dispose of such
application; provided, however, that Microsoft shall have the right to notify
third parties of the resolution at any point following the 45th day of such 180
day period. The preceding sentence shall not impact Microsoft's termination
right set out below if the parties are unable to resolve the conflict within
the 45-day period. "Core Categories" is defined to mean (1) Hospital Based
Applications: patient accounting, medical records, enterprise resource
planning, pharmacy laboratory, radiology, and materials management; (2)
Physician Practice Management Applications: billing and scheduling; (3)
Electronic Medical Records (defined as the legal electronic clinical documents
used by clinicians within healthcare organizations); and (4) Managed Care/Payor
Claims Administration Solutions. In the event that by the end of such 45-day
period, the parties are unable to reach agreement on a resolution, Microsoft
shall have fifteen days immediately following the end of such 45-day period in
which to exercise its right to terminate this Agreement and the WebMD
Agreement. In the event that Microsoft exercises such termination right, the
parties shall cooperate in good faith for 120 days following the date on which
Microsoft exercises such right to wind down the parties' relationship,
including without limitation, working to notify customers, transferring end
users in the event of any kind of joint relationship, agreeing on joint
messaging and press releases.
7.2.2 A tiered approach to the market based on the ISVs
value to Healtheon and Microsoft moving forward.
7.2.3 A mutually agreed upon list of the top ISVs in the
acute, ambulatory, and payor segments and PMS vendors.
8
>PAGE> 9
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
7.2.4 The details of a road show where both Healtheon and
Microsoft meet with each of the agreed strategic ISVs to present the value
proposition and obtain ISV commitments.
7.2.5 A rapid integration methodology (outlined in the
Section 11 below (MCS and Technology Commitments)) that provides value to the
ISVs moving forward.
7.2.6 A detailed joint Microsoft and Healtheon proposal to
be presented to the ISVs regarding how to integrate the Healtheon solution for
healthcare (including but not limited to use of the Healtheon Site and
Healtheon healthcare transaction solutions) into the ISVs' line of business
applications and offering the ISVs a Microsoft software subscription model to
the extent that it exists that can be resold by the ISVs within their
respective client bases. Such detailed joint proposal shall at a minimum
include a description of the Healtheon Integration Platform ("HIP"). No later
than the completion of the work outlined in the Migration Plan described in
Section 11, HIP shall be based on the Microsoft Technology Platform and the
Microsoft Healthcare Interoperability Framework. The scope of HIP includes: (I)
Webtop integration framework for integrating third-party info-services
(addresses issues such as common login, context-sharing, personalization
etcetera); (II) secure messaging standard; (III) common document distribution
framework; (IV) common role-based security and authentication model; (V) data
exchange interface for back-end integrations with third-party systems such as
PMS, MCS, Payor, Membership, Lab, PBM and HRIS systems; (VI) standard mechanism
for interfacing with other EDI gateways; (VII) data standards for
administrative and clinical information; and (VIII) middleware-level
integration standard. Microsoft will work with Healtheon to include HIP as
relevant in Microsoft's other standards initiatives. Microsoft will promote
interfacing to Healtheon's Internet transaction services through the Microsoft
COM-based interfaces to be included in HIP, at such time as such interfaces are
completed to the parties' reasonable satisfaction, as a healthcare industry
standard means for ISVs to web enable their applications with Healtheon.
7.2.7 Participation by both parties in the development of
standard interface library(ies) for ISVs, legacy systems, etc. to support broad
industry positioning. To that end, Healtheon shall adopt, and Microsoft and
Healtheon will work together to promote and establish HIP and the Microsoft
Healthcare Interoperability Framework (as defined in the WebMD Agreement). The
Microsoft Healthcare Interoperability Framework is a multilevel standard
designed to provide interoperability between applications and systems across
desktops PCs, servers, networks, and legacy systems in the healthcare industry.
The Microsoft Healthcare Interoperability Framework includes the Active X for
Healthcare standard and BizTalk (which together include components of COM,
DCOM, COM+, and XML or other enhancements).
7.2.8 Participation by both parties in an ISV advisory
board or steering committee which will include representatives of the top
(measured in terms of physician distribution commitment) four ISVs that use and
promote the Healtheon Site.
Plan 1 will provide at a minimum for calls to be made to the ISVs listed in
Exhibit B. Microsoft will position the Healtheon solution for healthcare
(including but not limited to use of the Healtheon Site and Healtheon
healthcare transaction solutions) as a broad electronic health ("E-Health")
strategy that provides healthcare content, community, and services and will use
reasonable efforts to encourage its major ISV alliance partners to develop and
integrate key distributed applications based on Microsoft technologies that
would operate in conjunction with the functionality and content of the
Healtheon Site. Healtheon will do such things as are commercially reasonable to
permit existing ISVs to integrate their applications into the Healtheon
solution for health care (including but not limited to integration into the
Healtheon Site and Healtheon healthcare transaction solutions).
7.3 MICROSOFT PRODUCT LICENSING COMMITMENT. Healtheon will agree
to work with Microsoft in establishing a mutually agreed upon plan ("Plan 2")
with respect to potentially incorporating a Microsoft software subscription
model into its overall service offering. This Plan 2 shall include a definition
of the products involved (i.e. IE, MSN, Office, BackOffice), pricing
methodologies, as well as specific mechanics for deployment and periodic
reporting to ADCU of sales influenced by Healtheon. This Plan 2 will be
completed within thirty (30) days of the Effective Date. Plan 2 will include
new subscription model pricing, if available, for Healtheon customers and a
commission structure to incent Healtheon to distribute Microsoft software.
9
>PAGE> 10
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
7.4 LIMITATIONS. Subject to contracts in existence as of the
Effective Date, during the Term of this LOA and the Agreement, Healtheon shall
not, directly or indirectly, license, or agree to provide a Healtheon Offering
(as defined below) (i) to or in conjunction with any of the companies listed in
Exhibit C, or (ii) that contain branding or co-branding promoting or
highlighting the company(ies) listed in Exhibit C. Subject to contracts in
existence as of the Effective Date, during the Term of this LOA and the
Agreement, if Healtheon, directly or indirectly, licenses, or agrees to provide
a Healtheon Offering (i) to or in conjunction with any of the companies listed
in Exhibit C or (ii) that contain branding or co-branding promoting or
highlighting the company(ies) in Exhibit C, then Healtheon shall inform and
allow Microsoft to propose the incorporation of Microsoft's products and
services in such Healtheon Offering. Healtheon shall keep Microsoft reasonably
informed regarding all Healtheon Offerings planned or under development,
subject to confidentiality requirements and obligations to third parties. The
foregoing sentence does not apply to custom developments for Healtheon
customers. For the purposes of this Agreement, "Healtheon Offering" means any
co-branded or third party-branded Internet, intranet, broadcast or other
electronic offering of health-related content, features, services, or
technology that incorporates all or portions of the Healtheon Site. In
addition, in the event that the parties mutually agree to allow a third party
to host Healtheon Offerings, Healtheon hereby licenses to Microsoft and/or such
third party all such rights as are necessary to permit Microsoft and such third
parties to use, copy, execute, display, perform, distribute, transmit, and/or
broadcast the agreed upon Healtheon Offerings as necessary for Microsoft and/or
such third party(ies) to host such Healtheon Offerings.
8. BOARD REPRESENTATION. As part of its equity stake in Healtheon,
Microsoft will be entitled to nominate one member of the Healtheon Board of
Directors. At its next meeting of shareholders, Healtheon's board shall
recommend to its shareholders the election of a nominee designated by Microsoft
(the "Microsoft Designee") to the Healtheon Board of Directors. Further, upon
the expiration of the Microsoft Designee's term, or the resignation of the
Microsoft Designee from the Board of Directors, Healtheon's board shall
recommend the election of the Microsoft Designee (or any substitute identified
by Microsoft) at the next meeting of its shareholders following such expiration
or resignation. In addition, Microsoft will have the right to designate one
board observer..
9. HEALTHEON MANAGEMENT. The parties acknowledge and agree that it is
anticipated that Mike Long will the Chairman and Chief Operating Officer of the
H-W Entity, and that Jeff Arnold will be the Chief Executive Officer of the H-W
Entity.
10. OTHER RIGHTS. From time to time, in the event Healtheon receives a term
sheet, expression of interest or verbal offer from a third party for a business
combination (as defined in Rule 145 under the Securities Exchange Act of 1934,
that Healtheon does not within 48 hours reject) resulting in a 40% or greater
change in ownership of Healtheon, Healtheon shall promptly notify Microsoft of
the identity of the third party and the terms of the offer. Healtheon may not
enter a binding agreement with any party within 10 business days after the time
Microsoft is first given notice of the offer to acquire the company, unless the
delay would, in the written opinion of Healtheon's outside legal counsel,
result in the breach of the directors' fiduciary duties.
11. MCS AND TECHNOLOGY COMMITMENTS.
11.1 MICROSOFT TECHNOLOGY PLATFORM. Section 1.11 of the WebMD
Agreement is amended to read as follows:
"MICROSOFT TECHNOLOGY PLATFORM" shall mean those Microsoft
technologies commonly referred to as: Microsoft Windows, Microsoft
Office, Microsoft BackOffice and any of its components, Microsoft
Commerce Server, Microsoft Visual Studio and COM, including any
updates and upgrades thereto released during the term.
11.2 ADOPTION AND USE OF MICROSOFT TECHNOLOGY PLATFORM. Healtheon
agrees to make the Microsoft Technology Platform Healtheon's primary platform
for the development of all new services, defined as those Healtheon services
not in existence or under development as of the Effective Date. However, there
will be well-defined quality of service checkpoints in the development timeline
to address any issues with respect to the ability of the Microsoft Technology
Platform to meet commercial readiness standards for quality, functionality and
reliability.
10
>PAGE> 11
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
11.3 MIGRATION OF EXISTING SERVICES. Healtheon will migrate its
existing services to the Microsoft Technology Platform in carefully planned
phases. As part of the MCS engagement referenced in Section 11.4 below,
Healtheon and Microsoft will mutually agree on a phased migration plan which
will be based on, without limitation, the following: quality, functionality and
reliability of the applicable Microsoft technology; the business ramifications
to Healtheon and its customers of the migration; and the degree and
manageability of the risks involved (the "Migration Plan"). Healtheon and
Microsoft will develop and agree on a detailed Migration Plan no later than 90
days immediately following the Effective Date. The Migration Plan will include,
at a minimum, the Healtheon services selected as candidates for migration, an
anticipated migration schedule, Healtheon's anticipated internal use needs for
Microsoft software products, and the estimated costs of migrating the selected
services. The parties expect initially to migrate one service at a time and
anticipate that migration of all selected services could require up to three
years, but in any event, all migration of services shall be completed no later
than three years from the Effective Date. The Migration Plan will include
regular quality of service checkpoints to ensure that the applicable technology
meets the agreed upon requirements for quality, functionality and reliability.
The primary components of the Migration Plan will be jointly reviewed and
revised as necessary at meetings between the parties held no less often than
quarterly. Healtheon shall make best efforts to meet the requirements of the
Migration Plan, including without limitation, the anticipated schedule and cost
estimate.
11.4 MCS ENGAGEMENT. No later than thirty days immediately
following the Effective Date, Healtheon agrees to execute the Microsoft Master
Services Agreement ("MSA") attached hereto as Exhibit D, pursuant to which it
will engage all Microsoft Consulting Services ("MCS") and Microsoft Premier
Support Services as provided for under this Agreement. Healtheon agrees to
engage MCS to undertake development of the Migration Plan identified in Section
11.3 above, as further set forth in the MSA and MCS work order ("Work Order")
attached hereto as Exhibit D. Any and all MCS services to be engaged by
Healtheon pursuant to this Agreement and/or the WebMD Agreement shall be set
forth in a Work Order pursuant to the MSA, which Work Order shall be mutually
agreed upon and executed by the parties prior to the commencement of any such
MCS services.
11.5 COST OF MIGRATION. Microsoft will provide financial assistance
for Healtheon's migration to Microsoft technology as follows:
11.5.1 MICROSOFT SOFTWARE FOR INTERNAL USE. Microsoft will
support Healtheon's adoption of the Microsoft Technology Platform for
internal use by providing, at no cost to Healtheon, certain Microsoft
software licenses as set forth in Exhibit G attached hereto and any
other Microsoft software licenses reasonably required and agreed
between the parties. Such software shall be used solely for internal
development purposes and internal use and not for use in Healtheon's
production environment or operations. Microsoft's obligation to
provide such software licenses is expressly subject to and conditioned
on Healtheon's purchase of maintenance for such software licenses
during the Term, as follows. No later than 90 days immediately
following the Effective Date, Healtheon will execute a Microsoft
Enterprise Select Agreement or Microsoft Select Agreement (the
"Enterprise Agreement") pursuant to which it will acquire the software
licenses and maintenance as provided in this Section 11.5.1. Healtheon
acknowledges and agrees that for any initial licenses that Microsoft
provides during the first year of the term of this Agreement,
Healtheon shall purchase maintenance as provided in the Enterprise
Agreement for a minimum period of three years. In the event that, at
Healtheon's request, Microsoft agrees to provide additional software
licenses at no initial cost to Healtheon during the second or third
year of the term, Healtheon shall purchase maintenance under the
Enterprise Agreement for such additional licenses for a minimum of two
years from the date on which Microsoft grants any such license.
Additional licenses granted in year three of the term will, subject to
the purchase of the relevant maintenance by Healtheon pursuant to the
Enterprise Agreement, be enrolled under either (i) the Enterprise
Agreement as extended into a fourth year or (ii) a new mutually agreed
Select or Open License Agreement, providing in either case for
maintenance for such licenses for a minimum of two years from the date
on which Microsoft grants any such license.
11.5.2 COSTS OF EXISTING HEALTHEON SOFTWARE. To the extent
that prior to the Effective Date Healtheon has made an investment in
software products that it will no longer be able to utilize as a
result of the requirements and obligations of this Agreement (the
"Obsolete Software"), Microsoft agrees to provide Healtheon with
Microsoft software products sufficient to replace such Obsolete
Software. In addition, to the extent that after the Effective Date and
before the completion of the migration at the end of the third
11
>PAGE> 12
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
year of the term, Healtheon is required to acquire additional
non-Microsoft software products to support its non-migrated services
(the "Additional Obsolete Software"), Microsoft shall provide
Healtheon with replacement Microsoft software products as such
products become obsolete; provided, however, that Healtheon notifies
Microsoft of any such Additional Obsolete Software. Microsoft's
payment obligation under this Section 11.5.2 shall be subject to
mutual agreement by the parties of relevant costs intended to be
covered under this section and receipt by Microsoft from Healtheon of
appropriate documentation substantiating such costs.
11.5.3 HARDWARE AND TRAINING. Subject to all applicable
legal restrictions, Microsoft shall exercise best efforts to work with
Healtheon to provide it with access to the favorable discounts
available from hardware suppliers with whom Microsoft has ongoing
business relationships. Microsoft shall exercise best efforts to
assist Healtheon in establishing relationships with Microsoft
Certified Technical Education Centers ("CTECs") to assist Healtheon in
obtaining favorable discounts for training services related to
Microsoft software products.
11.5.4 MCS CONSULTANT EXPENSE. The parties agree that the
dollar limit of Two Million Five Hundred Dollars (US$2,500,000) as
provided in Section 4.4 of the WebMD Agreement shall be increased to
Five Million Dollars (US$5,000,000). All other terms and conditions of
Section 4.4 shall remain the same.
11.5.5 OTHER FUNDING. Microsoft will make funding available
to Healtheon during the first three years of the term in an amount not
to exceed Fifteen Million Dollars (US$15,000,000). If it is mutually
agreed that additional funding is required, Microsoft will make up to
an additional Five Million Dollars (US$5,000,000) available during
such period. The parties currently anticipate that part of such amount
shall be available to Healtheon in each of the first two years of the
term. Beginning on the third anniversary of the Effective Date,
Healtheon will begin to make royalty payments to Microsoft based on a
to-be-agreed upon revenue stream, that will enable Microsoft to
recover the amounts made available to Healtheon under this Section
11.5.5, plus a mutually agreed upon rate of return, no later than the
fifth anniversary of the Effective Date. Microsoft's obligation to
provide any funding under this Section 11.5.5 is expressly subject to
and conditioned upon the parties reaching mutual agreement on the
terms and conditions of a funding plan within sixty days immediately
following the Effective Date. Failure to agree on the terms of funding
as provided for in this Section 11.5.5 shall not in any way impact or
alleviate Healtheon's other obligations under this LOA. Other key
terms of the funding plan shall include:
- If Microsoft terminates the WebMD Agreement and/or this LOA
due to a breach by Healtheon, Healtheon will, within 30 days
of the date of termination, provide the aggregate amount of
the funding back to Microsoft plus a mutually agreed upon
rate of return.
- The funding relationship shall not be assigned without
Microsoft's prior written consent. In the event the
relationship is assigned without Microsoft's consent,
Healtheon will, within 30 days of the date of assignment,
provide the aggregate amount of the funding back to Microsoft
plus a mutually agreed upon rate of return.
- The parties will identify an alternate revenue stream which
can be used to accelerate royalty payments in the event that
it appears, at the end of the third or fourth year of the
term, that Microsoft will not recover the funding plus the
agreed upon rate of return by the end of the fifth year of
the term.
- Microsoft agrees to work with Healtheon to provide the most
favorable accounting treatment. Healtheon's obligations
covered under this Section 11 are not conditional on this
Section 11.5.5 to the extent that Microsoft and Healtheon
cannot agree on the funding terms as principally outlined
above in this Section 11.5.5.
11.6 MICROSOFT PREMIER SUPPORT. No later than thirty days
immediately following the Effective Date, Healtheon shall purchase Microsoft
Premier Support Services for Developers, Level B, pursuant to the terms of the
12
>PAGE> 13
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
MSA at standard rates for such services. Healtheon shall maintain such Premier
support services at least at the level specified in this Section 11.6 for a
minimum period of three years.
11.7 To the extent that any of the provisions of this Section 11
are inconsistent or conflict with the provisions of Section 4 of the WebMD
Agreement, the parties agree that the terms of this Section 11 shall control.
12. GENERAL TERMS AND CONDITIONS
12.1 PROPRIETARY RIGHTS. Each party agrees that except as expressly
licensed to another party, each party shall retain all right, title, and
interest in any and all materials it delivers to any other party for use under
this LOA or the Agreement and no other party shall alter, modify, copy, edit,
format, translate, create derivative works of or otherwise use any materials,
content, feature or technology, etc. without express written approval. If any
parties agree to jointly develop any content, materials, services, technology,
features or otherwise, ownership of such development shall be specifically
detailed in an appropriate agreement prior to the start of any development.
12.2 CONFIDENTIALITY. Each party acknowledges and agree that the
terms and conditions of the Microsoft Corporation Non-Disclosure Agreement
dated as of even date herewith ("NDA"), attached hereto as Exhibit E, is
incorporated into this Agreement and that all of the terms of this LOA and of
the Agreement (including but not limited to its existence) and all discussions
and negotiations related thereto are considered Confidential Information as
defined in the NDA. In the event that any of the incorporated terms of the NDA
are inconsistent with or conflict with this Agreement, then the terms of this
Agreement shall control.
12.3 TRADEMARKS. Any use of a party's names, brands or logo(s)
shall be pursuant to appropriate agreements and guidelines regarding such use.
12.4 DISTRIBUTION OF CONTENT AND MSN INTERNET TECHNOLOGIES.
Healtheon's distribution of any Microsoft, WebTV or MSNBC content and the MSN
Internet Technologies shall be pursuant to appropriate agreements and
guidelines regarding such distribution.
12.5 PRODUCTS OR SERVICES DELIVERED UNDER THE TERMS OF THIS
AGREEMENT SHALL BE SUBJECT TO THE TERMS OF THE LIMITED WARRANTY STATEMENT, IF
ANY, SPECIFIED BY THE DELIVERING PARTY FOR THE SPECIFIC PRODUCT OR SERVICE.
CERTAIN SOFTWARE PRODUCTS MAY BE PROVIDED TO THE OTHER PARTY "AS IS" WITHOUT
WARRANTY OR CONDITION OF ANY KIND, IF SO DESIGNATED BY THE LICENSOR. FOR SUCH
PRODUCTS, THE ENTIRE RISK AS TO THE RESULTS AND PERFORMANCE OF SUCH SOFTWARE IS
ASSUMED BY THE RECEIVING PARTY AND ITS CUSTOMERS AND SUBLICENSEES, IF ANY. THE
WARRANTIES SET FORTH IN SECTIONS IN THIS SECTION 12.6 OR ELSEWHERE IN THIS LOA
OR THE AGREEMENT ARE THE ONLY WARRANTIES MADE BY THE PARTIES. EACH PARTY
DISCLAIMS ANY AND ALL OTHER WARRANTIES OR REPRESENTATION EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY,
TITLE, AND FITNESS FOR A PARTICULAR PURPOSE. NO PARTY WARRANTS THAT ACCESS TO
OR USE OF THE SITES OR CHANNELS WILL BE UNINTERRUPTED OR ERROR-FREE, OR THAT
ANY SOFTWARE OR SERVICES WILL MEET ANY PARTICULAR CRITERIA OF PERFORMANCE OR
QUALITY.
12.6 LIMITATION OF LIABILITIES. NO PARTY SHALL BE LIABLE TO THE
OTHER FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES,
ARISING OUT OF OR RELATED TO THIS AGREEMENT INCLUDING, WITHOUT LIMITATION,
DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS
INFORMATION, AND THE LIKE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. THIS SECTION SHALL NOT APPLY TO ANY PARTY'S (A)
ABILITY TO OBTAIN INJUNCTIVE OR OTHER EQUITABLE RELIEF; (B) OBLIGATIONS UNDER
SECTION 10 OR THE NDA; AND (C) INDEMNIFICATION OBLIGATIONS UNDER SECTION 14.
12.7 INSURANCE. Healtheon shall procure and during the Term
maintain such insurance in a form and with insurers reasonably acceptable to
Microsoft, as is required by Microsoft, which shall in no event be less than
that required of WebMD under the WebMD Agreement.
13
>PAGE> 14
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
12.8 INDEPENDENT CONTRACTORS. The parties are independent
contractors with respect to each other, and nothing in this LOA or the
Agreement shall be construed as creating an employer-employee relationship, a
partnership, agency relationship or a joint venture between the parties.
12.9 GOVERNING LAW. This LOA and the Agreement shall be governed by
the laws of the State of New York as though entered into by New York residents
and to be performed entirely within the State of New York. The parties consent
to exclusive jurisdiction and venue in the state and federal courts sitting in
New York. In any action or suit to enforce any right or remedy under this
Agreement or to interpret any provision of this Agreement, the prevailing party
shall be entitled to recover its costs, including reasonable attorneys' fees.
12.10 ASSIGNMENT. No party may transfer, assign or sublicense this
LOA or the Agreement, or any rights and/or obligations hereunder, whether by
contract or by operation of law, except with the express written consent of the
other parties, and any attempted transfer, assignment or sublicense by a party
in violation of this Section shall be void and shall constitute a material
default and breach of this Agreement.
12.11 CONSTRUCTION. In the event that any provision of this LOA or
the Agreement conflict with governing law or if any provision is held to be
null, void or otherwise ineffective or invalid by a court of competent
jurisdiction, (i) such provision shall be deemed to be restated to reflect as
nearly as possible the original intentions of the Parties in accordance with
applicable law, and (ii) the remaining terms, provisions, covenants and
restrictions of this LOA or the Agreement shall remain in full force and
effect. This LOA or the Agreement has been negotiated by the parties and their
respective counsel and will be interpreted fairly in accordance with its terms
and without any strict construction in favor of or against any party.
12.12 NOTICES. All notices and requests in connection with this
Agreement shall be given in writing and shall be deemed given as of the day
they are received either by messenger, delivery service, or in the United
States of America mail, postage prepaid, certified or registered, return
receipt requested, and addressed as follows:
>TABLE>
>S> >C>
To Microsoft: To Healtheon:
Microsoft Corporation Healtheon Corporation
One Microsoft Way 4600 Patrick Henry Drive
Redmond, WA 98052-6399 Santa Clara, CA 95054
Phone: 425.882.8080 Phone: 408.876.5000
Fax: 425.936.7329 Fax: 408.876.5010
Attention: Attention: Chief Executive Officer
Copy to: Law & Corporate Affairs, US Legal Copy to: General Counsel
Fax: 425.936.7409 Fax: 408.876.5450
>/TABLE>
or to such other address as a party may designate pursuant to this notice
provision.
12.13 ENTIRE AGREEMENT. This LOA and the Agreement shall not be
effective until signed by both parties. This LOA constitutes the entire
agreement between the parties with respect to the subject matter hereof,
supersedes all prior and contemporaneous agreements or communications and shall
not be superceded except by execution of the Agreement. This LOA shall not be
modified except by a written agreement dated subsequent to the date of this LOA
and signed on behalf of by each party by their respective duly authorized
representatives. No waiver of any breach of any provision of this LOA shall
constitute a waiver of any prior, concurrent or subsequent breach of the same
or any other provisions hereof, and no waiver shall be effective unless made in
writing and signed by an authorized representative of the waiving party.
14
>PAGE> 15
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
If the foregoing is acceptable to you, please execute it where
indicated below.
Very truly yours,
/s/ Laura Jennings
Laura Jennings
Vice President
Microsoft Corporation
ACKNOWLEDGED AND AGREED
HEALTHEON CORPORATION.
By /s/ Jack Dennison
Name (Print) Jack Dennison
Title Vice President
Date 6/10/99
WEBMD, INC.
By /s/ W. Michael Heekin
Name (Print) W. Michael Heekin
Title Executive V.P.
Date 5/28/99
15
>PAGE> 16
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Exhibit A
MS ONLINE ID EVALUATION PROGRAM AGREEMENT
This evaluation agreement ("Agreement") is made by and between MICROSOFT
CORPORATION, One Microsoft Way, Redmond, WA 98052 ("Microsoft") and HEALTHEON,
CORPORATION, 4600 Patrick Henry Drive Santa Clara, CA 95054 ("Company") as of
the later of the two signature dates (the "Effective Date").
WHEREAS, Microsoft desires that Company test, utilize and evaluate the
software associated with Microsoft's proprietary authentication service
currently known as Microsoft Online ID and the associated SDK (the "Product");
and
"WHEREAS, Company desires to test, utilize and evaluate the Product in
anticipation of participating in the full Microsoft Online ID program when, and
if, such program is generally released to the market.
NOW THEREFORE, the parties agree as follows:
1. EVALUATION LICENSE
(a) Company shall implement the Product and all upgrades, fixes
and versions provided by Microsoft within a test version the Healtheon
("Company Site"), such implementation shall be in compliance with the standard
SDK provided with the Product. Upon Microsoft's direction, Company shall
implement the Product on the version of Company's Site that is available to the
general public. In connection with such implementation, Microsoft grants to
Company a limited, non-exclusive, nontransferable, royalty-free license to use
the Product on Company's CPUs and any accompanying printed materials
("Documentation"), for the purpose of developing the Company Site to ensure
compatibility with the Product and testing and evaluating the Product and
associated applications created by Company that are required to be integrated
with the Product. All other rights are reserved to Microsoft. Company shall not
use the Product for any purpose other than as set forth in this Agreement.
Company shall not rent, lease, sell, sublicense, assign, or otherwise transfer
the Product or the Documentation. Company may not reverse engineer, decompile,
or disassemble the Product, except to the extent that the foregoing restriction
is expressly prohibited by local law. Microsoft and its suppliers shall retain
title and all ownership rights to the Product.
(b) Company agrees to provide reasonable feedback to Microsoft,
including but not limited to usability, bug reports and test results, with
respect to the testing of the Product, within fifteen (15) days of Company's
receipt of the product and each upgrade and fix. Company-will use reasonable
efforts to review and comment on all Documentation supplied. All bug reports,
test results and other feedback made by Company shall be the property of
Microsoft and may be used by Microsoft for any purpose it sees fit. Due to the
nature of the development work, Microsoft is not certain as to when errors or
discrepancies in the Product may be corrected; however Microsoft will provide
Company with all bug fixes and upgrades as such items become available and
Company agrees to implement said fixes and upgrades within ten (10) days of
receipt.
2. PRIVACY POLICY
Company acknowledges that the privacy of end-users' personal information is a
core component of the Microsoft Online ID program. Company represents that it
is either currently or will become, prior to the implementation of the Product
on the version of Company's Site that is available to the general public, a
participant in an industry recognized independent privacy program, such as the
TRUSTe Program or the BBBOnline Privacy Seal Program, which: (a) requires an
approved privacy policy to be posted within the Company Site in a manner that
is readily accessible to the end-users; (b) requires Company to obtain explicit
consent to any usage of their personal information for any purpose other than
described in Company's privacy policy; (c) provides for a dispute resolution
method with adequate enforcement mechanisms; (d) reviews, monitors and enforces
the standards set by the program, and (e) requires Company to comply with
additional privacy standards which may become recognized by the industry from
time to time. All versions of Company Site utilizing the Product shall comply
with the standards set by such independent privacy program.
16
>PAGE> 17
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
3. MICROSOFT SERVICES
(a) Microsoft shall provide a mechanism and user interface (the
"Sign Up Mechanism") which will allow end-users to participate in the Microsoft
Online ID program and obtain appropriate user names and passwords upon
accessing Company Site.
(b) Microsoft shall provide authentication services for end-users
entering the Company site who have a Microsoft Online ID. If such end-user has
not yet obtained a Microsoft Online ID the end-user will be directed to the
Sign Up Mechanism described in Section 3(a).
(c) During the authentication process, Microsoft shall provide
Company with the core profile information contained within the Microsoft Online
ID database as determined by Microsoft in its sole discretion (the "Core
Profile").
4. INFORMATION USAGE
(a) Company may use the information in the Core Profile in
perpetuity for any purpose provided that Company complies with the requirements
set forth in Sections 2 and 7.
(b) Microsoft shall provide Company with a list of the
information contained within the Core Profile and if Company receives updated
or additional Core Profile information from an end-user then Company agrees to
provide end-users with the option of updating this information in the central
Microsoft Online ID Core Profile. The Product will provide a standard Microsoft
Online ID update mechanism to facilitate updates to the Microsoft Online ID
Core Profile.
5. DESIGN AND USER INTERFACE
(a) Prior to the implementation of the Product on the version of
the Company Site which is available to the general public, Microsoft may
request compliance with certain additional design and user interface guidelines
("Microsoft Online ID UI Guidelines") not included within the SDK, including
but not limited to Microsoft Online ID logo placement, text copy, links, and
input boxes (e.g. for sign in). Within ten (10) days of Company's receipt of
the Microsoft Online ID UI Guidelines, Company shall implement the specified
user interface and comply with the specifications set forth in such guidelines.
(b) Microsoft will include Company's logo within the Sign Up
Mechanism, in connection with such use Company hereby grants Microsoft a
non-exclusive, royalty free, worldwide limited right to use and display
Company's name and logo. Microsoft will provide logo specifications to the
Company and the Company agrees to provide the requested logos to Microsoft on a
timely basis.
6. PRODUCT MAINTENANCE AND SUPPORT
Microsoft shall use commercially reasonable efforts to provide technical
support for the Product. Microsoft agrees to designate one primary contact
person that will be responsible for coordinating all technical support inquires
and responses and Company agrees to designate one primary contact person that
will be responsible for sending inquiries to and receiving responses from the
designated Microsoft person.
7. TERM OF AGREEMENT
(a) The term of this Agreement shall commence on the Effective
Date and shall continue for an initial period of six (6) months provided that
the term shall automatically renew for additional one (1) month periods unless
terminated as otherwise provided for in this Agreement, amended or superceded
by further agreement. Either party may terminate this Agreement at any time,
with or without cause, upon sixty (60) days prior written notice; provided that
neither party may terminate this Agreement under this sentence prior to the
termination of the MSN Channel and Cross Promotion Agreement ("Channel
Agreement") entered into of even date herewith.
17
>PAGE> 18
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
(b) In addition to any other rights and/or remedies that either
party may have under the circumstances, all of which are expressly reserved,
either party may terminate this Agreement immediately upon written notice at
any time if the other party is in material breach of any material warranty,
representation, term, condition or covenant of this Agreement and fails to cure
that breach within five (5) days after written notice thereof, provided that if
Company is the terminating party, such material breach must also be a material
breach of the LOA or the Agreement (as defined in the LOA to which this
document is attached), as applicable and Company must also simultaneously
terminate such LOA or Agreement, as applicable.
(c) Upon the termination of this Agreement, Company shall:
(i) promptly cease using the Product and return to Microsoft, or
certify destruction of, all full or partial copies of the Product,
Documentation and related materials provided by Microsoft;
(ii) notify end-users that the Company site is no longer utilizing
the Microsoft Online ID authentication service; and
(iii) discontinue the use of all Core Profile information; provided
that Company may continue to use the Core Profile information if Company
continues to comply with the terms of Section 2.
(d) In the event of termination or expiration of this Agreement
for any reason each and every clause which by its nature is intended to survive
the termination of this Agreement including, without limitation, Sections 7
through 12 shall survive termination. Neither party shall be liable to the
other for damages of any sort resulting solely from terminating this Agreement
in accordance with its terms.
8. CONFIDENTIALITY
(a) The Product, including its existence and features, are
proprietary and confidential information to Microsoft and its suppliers.
Company agrees not to disclose or provide the Product, Documentation, or any
information relating to the Product (including the existence of the Product,
features, or the results of use or testing) to any third party (except as
otherwise necessary to operate Company's Web site). If Microsoft and Company
have entered into a Microsoft Non-Disclosure Agreement, Microsoft and Company
agree that the terms of such agreement shall be deemed incorporated herein, and
further, that all terms and conditions of this Agreement shall be deemed
Confidential Information as defined therein. If Microsoft and Company have not
entered into a Microsoft Non-Disclosure Agreement, then Company agrees that at
all times during the term of this Agreement, and for five (5) years thereafter,
Company will hold in strictest confidence, and will not use or disclose to any
third party, any confidential information of Microsoft. The term "confidential
information of Microsoft" shall mean all non-public information that Microsoft
designates as being confidential, or which, under the circumstances of
disclosure ought to be treated as confidential. "Confidential information of
Microsoft" includes, without limitation, the terms and conditions of this
Agreement, information relating to released or unreleased Microsoft software or
hardware products, marketing or promotion of any Microsoft product, business
policies or practices of Microsoft, customers or suppliers of Microsoft, or
information received from others that Microsoft is obligated to treat as
confidential. If Company has any questions as to what comprises such
confidential information, Company agrees to consult with Microsoft.
"Confidential information of Microsoft" shall not include information that was
known to Company prior to Microsoft's disclosure to Company, or information
that becomes publicly available through no fault of Company.
(b) Unless Company receives prior written authorization from MS,
Company may disclose the Product only to its employees or sub-contractors who
have a need to know in order to assist in Company's testing and evaluation of
the Product, provided that: (1) such employee's or sub-contractors use of the
Product takes place solely at the location where Company's CPUs reside; and (2)
Company has executed appropriate written agreements with such employees and
sub-contractors sufficient to enable it to comply with the terms of this
Agreement. Upon Microsoft's request, Company shall provide to Microsoft a list
of all employees and sub-contractors granted access to the Product hereunder.
18
>PAGE> 19
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
9. PRESS RELEASES/MARKETING PARTICIPATION.
(a) Microsoft will issue an initial press release relating to the
establishment of the Microsoft Online ID Evaluation Program, which will
describe the relationship between Microsoft and the third parties participating
in the program, including Company. Company may be provided with an opportunity
to provide a quote and/or information to be included in such initial press
release. Except as specified above, neither party will issue any press release
or make any public announcement(s) relating in any way whatsoever to this
Agreement or the relationship established by this Agreement without the express
prior written consent of the other party, which consent shall not be
unreasonably withheld, provided that Microsoft may make informational
references to the Microsoft Online ID Evaluation Program and Company's
participation in such program in other publicity and press releases without
obtaining Company's consent.
(b) Company agrees to participate in all marketing programs for
the Microsoft Online ID program as reasonably requested by Microsoft. Microsoft
shall be solely responsible for any and all costs associated with any marketing
program for the Microsoft Online ID program which may be incurred by Company
provided that such costs have been pre-approved in writing by Microsoft.
10. DISCLAIMER OF WARRANTY
THE PRODUCT IS DEEMED ACCEPTED BY COMPANY. THE PRODUCT IS PROVIDED "AS IS"
WITHOUT WARRANTY OF ANY KIND. MICROSOFT FURTHER DISCLAIMS ALL WARRANTIES,
INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. THE ENTIRE RISK ARISING
OUT OF THE USE OR PERFORMANCE OF THE PRODUCT AND DOCUMENTATION REMAINS WITH
COMPANY.
IN NO EVENT SHALL MICROSOFT OR ITS SUPPLIERS BE LIABLE FOR ANY CONSEQUENTIAL,
INCIDENTAL, DIRECT, INDIRECT, SPECIAL, PUNITIVE, OR OTHER DAMAGES WHATSOEVER
(INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS
INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR OTHER PECUNIARY LOSS) ARISING
OUT OF THE USE OF OR INABILITY TO USE THE PRODUCT OR DOCUMENTATION, EVEN IF
MICROSOFT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
The foregoing notwithstanding, Microsoft agrees to defend, at its expense, any
suit or proceeding brought against Company or its parent or subsidiaries for
violation of legally protected rights of any third parties, including but not
limited to, patent, copyright, trade secret, unfair competition or any and all
other claims arising out of the receipt, reliance upon or use by Company or its
parent or subsidiaries of the Product which such reliance on or use is in all
ways consistent with Microsoft's representations and instructions (if any).
Microsoft's agreement to defend and its obligation to indemnify Company and its
parent and subsidiaries extends to direct, indirect, punitive and any and all
other damages awarded in any such proceedings, as well as reasonable attorneys'
fees, provided that Company or its parent or subsidiaries shall (a) provide
reasonable information and assistance to Microsoft at Microsoft's expense in
defense of such claim, and (b) at Microsoft's request, will immediately stop
using and/or offering the Product in any way, including deleting references to
the Product from marketing, advertising and Company's Web sites(s).
11. EXPORT RESTRICTIONS
Company acknowledges that the Product is subject to the export control laws and
regulations of the U.S.A., and any amendments thereof. Company confirms that
with respect to the Product it will not export or re-export them, directly or
indirectly, either to (i) any countries that are subject to U.S.A. export
restrictions, (ii) any end user who Company knows or has reason to know will
utilize them in the design, development or production of nuclear, chemical or
biological weapons; or (iii) any end user who has been prohibited from
participating in the U.S.A. export transactions by any federal agency of the
U.S.A. government. Company further acknowledges that the Product may include
technical data subject to export and re-export restrictions imposed by U.S.A.
law.
19
>PAGE> 20
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
12. GENERAL
12.1 Independent Contractors. The parties are independent contractors
with respect to each other, and nothing in this Agreement shall be construed as
creating an employer-employee relationship, a partnership, agency relationship
or a joint venture between the parties.
12.2 Governing Law. This Agreement shall be governed by the laws of the
State of New York as though entered into by New York residents and to be
performed entirely within the State of New York. The parties consent to
exclusive jurisdiction and venue in the state and federal courts sitting in New
York. In any action or suit to enforce any right or remedy under this Agreement
or to interpret any provision of this Agreement, the prevailing party shall be
entitled to recover its costs, including reasonable attorneys' fees.
12.3 Assignment. This Agreement and any rights and/or obligations
hereunder may be assigned by Microsoft but may not be assigned by Company
without Microsoft's prior written approval. Any attempted assignment,
sublicense, transfer, encumbrance or other disposal without such consent shall
be void and shall constitute a material default and breach of this Agreement.
12.4 Construction. In the event that any provision of this Agreement
conflicts with governing law or if any provision is held to be null, void or
otherwise ineffective or invalid by a court of competent jurisdiction, (i) such
provision shall be deemed to be restated to reflect as nearly as possible the
original intentions of the Parties in accordance with applicable law, and (ii)
the remaining terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect. This Agreement has been negotiated by
the parties and their respective counsel and will be interpreted fairly in
accordance with its terms and without any strict construction in favor of or
against either party. The section headings used in this Agreement are intended
for convenience only and shall not be deemed to affect in any manner the
meaning or intent of this Agreement or any provision hereof.
12.5 Notices. All notices and requests in connection with this Agreement
shall be given in writing and shall be deemed given as of the day they are
received either by messenger, delivery service, or in the United States of
America mails, postage prepaid, certified or registered, return receipt
requested, and addressed as follows:
To Company: To Microsoft:
Healtheon Corporation Microsoft Corporation
4600 Patrick Henry Drive One Microsoft Way
Santa Clara, CA 95054 Redmond, WA 98052-6399
Attn: Product Manager - Web Essentials
Phone: Phone: 425-882-8080
Fax: Fax: 425-936-7329
Attention General Counsel Copy to:
Law & Corporate Affairs, US Legal
Fax (425) 936-7409
or to such other address as a party, may designate pursuant to this notice
provision.
12.6 Entire Agreement. This Agreement does not constitute an offer by
Microsoft and it shall not be effective until signed by both parties. This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior and contemporaneous
agreements or communications. This Agreement shall not be modified except by a
written agreement dated subsequent to the date of this Agreement and signed on
behalf of Company and Microsoft by their respective duly authorized
representatives. No waiver of any breach of any provision of this Agreement
shall constitute a waiver of any prior, concurrent or subsequent breach of the
same or any other provisions hereof, and no waiver shall be effective unless
made in writing and signed by an authorized representative of the waiving
party.
20
>PAGE> 21
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
The parties have caused this Agreement to be executed by their duly authorized
representatives as of the Effective Date.
MICROSOFT CORPORATION HEALTHEON CORPORATION
/s/ Laura Jennings /s/ Jack Dennison
------------------------------- --------------------------------
By By
Laura Jennings Jack Dennison
------------------------------- --------------------------------
Name(Print) Name (Print)
Vice President Vice President
------------------------------- --------------------------------
Title Title
6/29/99 6/29/99
------------------------------- --------------------------------
Date Date
21
>PAGE> 22
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
EXHIBIT B
*
22
>PAGE> 23
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
EXHIBIT C
*
23
>PAGE> 24
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
EXHIBIT D
MCS AGREEMENT AND WORK ORDER
MICROSOFT MASTER SERVICES AGREEMENT
This Microsoft Master Services Agreement ("Agreement") is made as of the
Effective Date indicated below by and between Microsoft Corporation, a
Washington corporation, and Healtheon Corporation, a ____________ corporation
("Company").
This Agreement sets forth the general terms and conditions under which
Microsoft Corporation, either on its own behalf or through one or more
divisions or, for services to be provided outside of the United States,
subsidiaries (collectively, "MS"), will provide consulting and support services
to Company and its Affiliates. MS agrees that any of Company's Affiliates shall
have the right (but not the obligation) to submit Work Orders and Services
Descriptions to MS under the terms and conditions of this Agreement. All
references to "Company" in this Agreement shall be deemed to include the
Affiliate placing the Work Order and/or Services Description. Such Work Orders
and Services Descriptions shall be subject to the terms and conditions of this
Agreement and as to such Work Orders and Services Descriptions, the Affiliate
becomes "Company" hereunder. "Affiliate" means any person, partnership, joint
venture, corporation or other form of enterprise, domestic or foreign,
including, but not limited to, subsidiaries, which directly or indirectly
Control, are Controlled by, or are under common Control with Company. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and operating policies of the entity in respect
of which the determination is being made, through the ownership of more than
fifty percent (50%) of its voting or equity securities, contract, voting trust
or otherwise.
1. CONSULTING SERVICES. MS, through its Microsoft Consulting Services
division ("MCS"), shall perform the consulting services for Company specified
in work orders (each a "Work Order") that may be entered into pursuant to this
Agreement from time to time ("Consulting Services"). Neither MS nor Company
shall be obligated to enter into any Work Order. The rights in programs and
data produced pursuant to the Consulting Services shall be specified in each
Work Order.
2. PREMIER SUPPORT SERVICES. MS, through its Enterprise Customer Unit
("ECU"), shall perform the support services for Company specified in Premier
Support Services Description(s) (each a "Services Description") that may be
entered into pursuant to this Agreement from time to time ("Premier Support
Services," together with the Consulting Services, the "Services"). Neither MS
nor Company shall be obligated to enter into any Services Description. The
provision of Premier Support Services shall be subject to the following
additional terms and conditions:
a. Changes in Premier Support Services. MS reserves the right to change
the products supported under a Services Description during the term of the
Services Description. MS may discontinue support for a product, provided that
Company will be given six (6) months notice of that discontinuance. As an
exception to the foregoing, should support for a product be discontinued by MS
because it has been sold to another company, MS will provide written notice of
the sale to Company and, at MS' option and in its sole discretion, either
arrange for the acquiring company to begin providing support for that product
immediately upon the date of notice, or provide continued support for that
product for ninety.(90) days from the date of notice. MS may add support for
new products during the term of a Services Description pursuant to the terms
and conditions of this Agreement.
b. Right of Refusal. If MS determines that an implementation of MS
products is not effectively supportable, MS may refuse to provide Company with
Premier Support Services for that implementation. If MS makes such a
determination, Company shall have thirty (30) days after MS's notice to modify
the implementation so as to make it effectively supportable. If the
implementation is not modified to be supportable within thirty (30) days, MS
will no longer be obligated to support that implementation.
c. Ownership and License. Company's use of any bug fixes, workarounds,
patches, beta fixes and beta builds (as applicable) or other software that MS
provides to Company in the course of the provision of Premier Support Services
(collectively, the "ECU Software") shall be in accordance with the terms of the
end user license agreement or other license agreement governing the MS product
for which the ECU Software is furnished. If not provided for a specific MS
product, Company's use shall be in accordance with the terms of the end user
license agreement packaged with such ECU Software, and/or any other terms
expressly set forth by MS in writing; provided that if such ECU Software is
not packaged with a license agreement then such ECU Software will be subject to
the following restrictions: (i) the ECU Software may not be reverse engineered,
decompiled or disassembled, except to the extent the foregoing restriction is
expressly forbidden by applicable law; (ii) the ECU Software may not be loaned,
sold, rented, leased, transferred or otherwise distributed to another user;
(iii) MS may terminate Company's use of the ECU Software if Company fails to
comply with the terms and conditions of these restrictions; (iv) THE ECU
SOFTWARE IS PROVIDED "AS-IS", WITHOUT WARRANTY OF ANY KIND; and (v) the ECU
Software and any documentation accompanying it are provided with RESTRICTED
RIGHTS. Use, duplication, or disclosure by the U.S. Government is subject to
restrictions as set forth in subparagraph (c)(1)(ii) of the Rights in Technical
Data and Computer Software clause at DFARS 252-227-7013 or subparagraphs (c)(1)
and (2) of the Commercial Computer Software-Restricted Rights at 48 CFR
52.227-19,
24
>PAGE> 25
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
as applicable. Manufacturer is Microsoft Corporation/One Microsoft Way/Redmond,
WA. 98052-6399. All rights not expressly granted are reserved.
d. Licensed Product. MS will provide Premier Support Services only for
products published by Microsoft Corporation, validly licensed and unaltered.
3. FEES. Company shall pay MS the fees identified on each Work Order and/or
Services Description for Services rendered, and the reasonable out-of-pocket
travel and living expenses incurred during the performance of the Services.
Payment shall be made to MS within thirty (30) days of the date of MS's
invoice. MS shall not change its fees during the term of a Work Order or a
Services Description, unless otherwise agreed by MS and Company, but may adjust
fees prior to entering any new Work Order or Services Description. MS's fees do
not include any taxes, duties, tariffs or other governmental charges or
expenses imposed in connection with this Agreement (including, without
limitation, any value added taxes), and such taxes shall be billed to and paid
by Company. MS shall be responsible for all taxes based upon its personal
property ownership and net income. A finance charge of one and one-half percent
(1.5%) per month or the highest amount allowed by law, whichever is less, will
be assessed on all payments that are past due. Any amount outstanding for more
than sixty (60) days after the date of invoice shall constitute a material
breach on the part of Company.
4. CONFIDENTIALITY.
a. Confidential Information. Except as otherwise specified herein, MS
and Company each expressly undertake to retain in confidence all information
transmitted to it by the other party pursuant to this Agreement that the
disclosing party identifies as being proprietary and/or confidential or that,
by the nature of the circumstances surrounding the disclosure, ought in good
faith to be treated as proprietary and/or confidential ("Confidential
Information"), and will make no use of such Confidential Information except
under the terms and during the existence of this Agreement. Information
disclosed by MS, in any form, regarding pre-release products, access numbers
and passwords provided to Company by MS, shall be MS Confidential Information.
MS and Company shall treat the terms and conditions of this Agreement as
confidential; however, either party may disclose such information in confidence
to its immediate legal and financial consultants as required in the ordinary
course of that party's business. The receiving party's obligation hereunder
shall extend for five (5) years following the disclosure of the Confidential
Information. Company shall cause its Affiliates to retain MS Confidential
Information in accordance with the terms of this Section 4.
b. Exclusions. Confidential Information shall not include any
information that: (i) is at the time of disclosure or subsequently becomes
publicly available without the receiving party's breach of any obligations owed
the disclosing party; (ii) became known to the receiving party prior to the
disclosing party's disclosure of such information to the receiving party; (iii)
became known to the receiving party from a source other than the disclosing
party other than by the breach of an obligation of confidentiality owed to the
disclosing party; or (iv) is independently developed by the receiving party.
c. Independent Development; Residuals. The terms of confidentiality
under this Agreement shall not be construed to limit MS's or Company's right to
independently develop or acquire products without use of the other party's
Confidential Information. Further, MS or Company shall be free to use for any
purpose the residuals resulting from access to or work with such Confidential
Information, provided that such party shall maintain the confidentiality of the
Confidential Information as provided herein. The term "residuals" means
technical information related to computer software technology in non-tangible
form, which may be retained by persons who have had access to the Confidential
Information, including ideas, concepts, know-how or techniques contained
therein. Neither MS nor Company shall have any obligation to limit or restrict
the assignment of such persons or to pay royalties for any work resulting from
the use of residuals. However, the foregoing shall not be deemed to grant to
either MS or Company a license under the other party's copyrights or patents.
d. Company Information. Company grants to MS the right to use technical
information relating to Microsoft software products, either standing alone or
as such software products may be combined with or interact with other software
and hardware products, for problem resolution, internal troubleshooting,
product functionality enhancements and fixes, and Knowledge Base articles. MS
will not identify Company or publish any of Company's Confidential Information
in any Knowledge Base article.
5. LIMITED WARRANTIES.
a. Consulting Services. MS warrants that the Consulting Services will
be performed using generally accepted industry standards and practices.
b. Premier Support Services. MS warrants that the Premier Support
Services shall be substantially as described in this Agreement and the
applicable Services Description, and that MS will use commercially reasonable
efforts in addressing all support problems.
25
>PAGE> 26
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
6. LIMITATION OF WARRANTIES. THE LIMITED WARRANTIES SET FORTH ABOVE ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES AND CONDITIONS, EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE WITH RESPECT TO THE SERVICES OR PRODUCTS
PROVIDED UNDER THIS AGREEMENT, THE PERFORMANCE OF MATERIALS OR PROCESSES
DEVELOPED OR PROVIDED UNDER THIS AGREEMENT, OR AS TO THE RESULTS WHICH MAY BE
OBTAINED THEREFROM, AND ALL IMPLIED WARRANTIES AND CONDITIONS OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT.
MS SHALL NOT BE LIABLE FOR ANY SERVICES OR PRODUCTS PROVIDED BY THIRD PARTY
VENDORS, DEVELOPERS OR CONSULTANTS IDENTIFIED OR REFERRED TO COMPANY BY MS
UNLESS SUCH THIRD PARTY SERVICES ARE PROVIDED UNDER WRITTEN AGREEMENT WITH MS.
7. LIMITATION OF LIABILITY.
a. Limitation. MS' total liability under this Agreement shall be
limited to the total amount actually paid by Company to MS under the applicable
Work Order or Services Description.
b. Exclusion of Certain Damages. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, IN NO EVENT SHALL MS, MS SUBSIDIARIES OR THEIR RESPECTIVE
SUPPLIERS BE LIABLE TO COMPANY FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT,
SPECIAL, OR PUNITIVE DAMAGES (INCLUDING, BUT NOT LIMITED TO. LOST PROFITS,
BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION OR OTHER PECUNIARY LOSS)
REGARDLESS OF WHETHER SUCH LIABILITY IS BASED ON BREACH OF CONTRACT, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY, BREACH OF WARRANTIES, FAILURE OF
ESSENTIAL PURPOSE OR OTHERWISE AND EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
8. TERM AND TERMINATION.
a. Term. This Agreement shall remain in effect until terminated by
either MS or Company as provided herein. The term of any Work Order or Services
Description shall be as provided therein Termination of this Agreement shall
terminate all outstanding Work Orders and Services Descriptions between MS and
Company.
b. Termination. Company may terminate this Agreement any Work Order or
Services Description without cause by giving MS thirty (30) days written
notice. Either MS or Company may terminate this Agreement or any Work Order or
Services Description if the other party is in material breach or default of any
obligation hereunder, which breach or default is not currently within thirty
(30) days notice of such breach. Company shall pay all fees to MS for Services
performed and expenses incurred which have accrued through the date of
termination.
c. Survival. Sections 2(c), 3, 4, 5, 6, 7, 8(b), 8(c), 9, and 11 of
this Agreement and any provisions specified as surviving in a Work Order or
Services Description shall survive any termination of this Agreement and
termination or expiration of any Work Order or Services Description.
9. NOTICES. All notices, authorizations, and requests in connection with this
Agreement shall be deemed given on the day they are (i) deposited in the mails,
postage prepaid, certified or registered, return receipt requested; or (ii)
sent by air express courier (e.g., DHL, Federal Express or Airborne), charges
prepaid, return receipt requested; and addressed as follows:
To Company: To Microsoft:
Healtheon Corporation Microsoft Corporation
----------------------------------
4600 Patrick Henry Drive One Microsoft Way
----------------------------------
Santa Clara, CA 95054 Redmond, WA 98052-6399
----------------------------------
Attention: Jack Dennison Attention: David Lubinski
----------------------- ----------------------------
Phone: 408-876-5140 Phone: 972-716-2629
----------------------- ----------------------------
Fax: 408-876-5450 Fax: 972-233-7280
----------------------- ----------------------------
cc: Law and Corporate Affairs
One Microsoft Way
Redmond, WA 98052-6399
10. INSURANCE. At all times when MS will be performing Services on Company's
premises pursuant to this Agreement. MS will procure and maintain the following
insurance coverage:
26
>PAGE> 27
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
a. Commercial General Liability covering bodily injury and property
damage liability with a limit of not less than $1,000,000 each occurrence;
b. Workers' Compensation (or maintenance of a legally permitted and
governmentally-approved program of self-insurance) covering MS employees
pursuant to applicable state workers' compensation laws for work-related
injuries suffered by employees of MS;
c. Employer's Liability with limits of not less than $1,000,000 each
accident; and
d. Software Errors and Omissions Liability covering damages arising out
of negligent acts, errors, or omissions committed by MS or its employees in the
performance of this Agreement, with a limit of liability of not less than
S2,000,000 each claim.
MS will provide Company with certificates of insurance evidencing this
coverage on request.
11. MISCELLANEOUS.
a. No Assignment. This Agreement and any rights or obligations
hereunder shall not be assigned by contract or by operation of law without the
prior written agreement of the other party. MS may use subcontractors to
deliver the Services, provided that MS shall remain liable to Company, in
accordance with this Agreement, for all Services provided to Company. The
Services are provided solely for the benefit of Company and its Affiliates, as
applicable. Unless specifically permitted by NIS in writing, the Services and
the software and materials provided thereunder may not be transferred or sold
by Company to any non-Affiliate third party.
b. Applicable Law. This Agreement shall be governed by the laws of the
State of Washington, and Company. further consents to the exclusive
jurisdiction by the state and federal courts sitting in the State of
Washington. Any action of any kind by any party against another party arising
as a result of this Agreement must be commenced within two (2) years from the
date the right, claim, demand, or cause of action shall first accrue.
c. Entire Agreement. This Agreement and the Services Descriptions and
Work Orders constitute the entire agreement between MS and Company, and merge
all prior and contemporaneous communications, with respect to the Services
provided hereunder. The terms on any purchase order or other form submitted by
Company shall not apply to this Agreement or any of the Services. This
Agreement can be modified only by written agreement signed by both MS and
Company. In the event of a conflict between this Agreement and any Services
Description or Work Order, the terms of this Agreement shall control.
d. Compliance with Laws. MS and Company shall comply with all
applicable laws and regulations with respect to this Agreement. Company
acknowledges that the Services and the related software and other materials are
subject to United States export control laws and regulations, and Company
confirms that it will not export or re-export them, directly or indirectly,
either to (i) any countries that are subject to U.S. export restrictions
(currently including, but not necessarily limited to, Cuba, Iran, Iraq, Libya,
North Korea, Syria and Sudan), or to any national of any such country, wherever
located, who intends to transmit or transport the Services or related software
and other materials back to such country; or (ii) any end-user whom Company
knows or has reason to know will utilize them in the design, development or
production of nuclear, chemical or biological weapons, or (iii) any end-user
who has been prohibited from participating in U.S. export transactions by any
federal agency of the U.S. Government.
e. Severability/Waiver. If a court holds any provision of this
Agreement to be illegal, invalid or unenforceable, the remaining provisions
shall remain in full force and effect. No waiver of any breach of this
Agreement shall be a waiver of any other breach, and no waiver shall be
effective unless made in writing and signed by an authorized representative of
the waiving party.
f. Independent Contractor. MS shall act at all times as an independent
contractor, and shall be responsible for any and all social security,
unemployment, workers' compensation and other withholding taxes for any and all
of its employees.
g. Cost or Pricing Data. MS will not, under any circumstances, be
obligated to perform Services that would require the submission of cost or
pricing data (as defined by U.S. Government regulations) or be obligated to
provide such data.
h. Force Majeure. Except for Company's obligation to pay for services
already performed by MS, if either party is prevented from complying, either
totally or in part, with any of the terms or provisions of this Agreement by
reason of fire, flood, storm, strike, lockout or other labor trouble, riot,
war, rebellion, accident or other acts of God, then upon written notice to the
other party, the requirements of this Agreement, or the affected provisions
hereof to the extent affected, shall be suspended during the period of such
disability. During such period, the party not prevented from complying as
aforesaid may seek to have its needs (which would otherwise be met hereunder)
not by or through others without liability hereunder. The party
27
>PAGE> 28
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
prevented from complying shall make all reasonable efforts to remove such
disability within thirty (30) days of giving such notice.
i. English Language Governs. The parties have requested that this
Agreement be drawn up in English; les parties ont exiges que cette entente soit
redigee en anglais.
IN WITNESS WHEREOF, the parties have agreed to the terms and conditions of this
Agreement as of the Effective Date indicated below.
MICROSOFT CORPORATION Corporate Name of Company
By: /s/ Kennon S. Grose By: /s/ Jack Dennison
----------------------------- -----------------------------------
Kennon S. Grose Jack Dennison
--------------------------------- ---------------------------------------
Name (Print) Name (Print)
General Manager Vice President
--------------------------------- ---------------------------------------
Title Title
5/20/99 June 25, 1999
--------------------------------- ---------------------------------------
Effective Date Date
28
>PAGE> 29
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
MICROSOFF CONSULTING SERVICES
MASTER SERVICE AGREEMENT
WORK ORDER NO. 001 - (MCS HEALTH CARE PRACTICE)
MICROSOFT CONSULTING SERVICES
MASTER SERVICE AGREEMENT
WORK ORDER NO. 001 - (MCS HEALTH CARE PRACTICE)
This Work Order is made pursuant to the Microsoft Master Consulting Services
Agreement (the "Agreement") effective on May 20, 1999, by and between Healtheon
Corporation ("Customer") and Microsoft Corporation ("Microsoft") and is
incorporated therein by reference. Capitalized terms not otherwise defined have
the meanings provided in the Agreement.
1. SERVICES. MCS shall perform the services identified below for Customer.
Dates provided herein are estimates only. Services shall not include
development of, and Microsoft shall not deliver, any software, computer program
or code under this Work Order.
MCS shall assist with the architectural review phase of the current Healtheon
technical platform in order to develop the vision and scope of the Microsoft
Technology Platform Migration Work Order to be executed by the parties and
the implementation of the Microsoft technology, including the Microsoft
Technology Platform Migration Work Order.
Customer shall ensure both under this work order and under the Microsoft
Technology Platform Migration Work Order: 1) that adequate Customer technical
resources are assigned to the migration effort; 2) that a core Customer
technical team is adequately training on NT and Internet Information Server; 3)
that a Customer operations team is available to assume responsibility for the
operations and management of the production site; 4) that Customer assigns a
key manager to act as the MCS contact for the project; 5) that Customer
provides MCS with access to the source code and design documentation to the
existing site and applications; 6) that Customer provides for all hardware and
software necessary to support the production environment; and 7) that Customer
will have acquired sufficient Microsoft Premier Support Services for technical
product support.
The parties agree that the estimated time to complete the architectural review
contemplated hereunder is 320 hours. The product of the architectural review
shall be at a minimum the Migration Plan and the Microsoft Technology Platform
Migration Work Order.
2. RATES. The hourly rates shown below shall be applicable to this Work
Order. Any total fee stated herein is an estimate only. The total estimated
fee for this project is $67,200, based on the estimated 320 hours of service
in the 90 day time period, plus travel and expenses. Project expense will be
charged to Customer in addition to project fees.
>TABLE>
>S> >C>
STAFF LEVEL RATE/HOUR
---------------------------------------------
>S> >C>
Enterprise Program Manager $210.00
-------------------------------------------
Senior Consultant - Infrastructure $210.00
-------------------------------------------
Consultant - Infrastructure $180.00
-------------------------------------------
Senior Consultant - Development $210.00
-------------------------------------------
Consultant - Development $180.00
-------------------------------------------
Principal Consultant $250.00
-------------------------------------------
Managing Consultant $250-00
-------------------------------------------
>/TABLE>
Microsoft shall determine in its sole discretion what personnel is required to
complete the work contemplated by this Work Order and may use third parties, as
determined by MCS in its sole discretion, to complete any work.
29
>PAGE> 30
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Microsoft shall invoice Customer monthly for services performed and expenses
incurred during the previous period. Microsoft invoices for payment should be
directed to Customer's representative for payment at the address shown below
(Customer to provide).
Contact: David Lubinski
Mailstop (if any):
Address: 5080 Spectrum Drive, Suite 900E
Telephone: (972) 716-2629
City: Addison
Fax: (972) 233-7280
State: TX Zip: 75001
Email: davidlu@microsoft.com
Purchase Order No. (if any):
3. COMMENCEMENT DATE. Services under this Work Order will begin on the date
that is within 45 days of the Effective Date of the Promotion Agreement. The
Expiration Date of this Work Order is upon completion of the work contemplated
in this Work Order, which in no event shall exceed 90 days from the Effective
Date.
4. OWNERSHIP AND LICENSE. The copyright in that specific set of tangible
written materials developed by Microsoft at the specific direction of Customer
and provided to Customer in the course of performance under this Work Order
("Materials") shall be owned by Customer, and Microsoft hereby assigns all
right, title and interest in such copyright to Customer. Customer agrees to use
Materials only for Customer's internal business purposes and not for resale or
distribution outside of Customer. Notwithstanding the above, the parties agree
that Microsoft reserves the right to use for any purpose subsets or modules of
the Materials which by themselves provide generic technical information not
unique to Customer's business. Customer may sublicense the rights granted
hereunder to its affiliates (i.e., any entity controlling, controlled by, or
under common control with, Customer). All rights not expressly granted, are
reserved.
THEREFORE, the parties have executed this Work Order in duplicate originals.
MICROSOFT CORPORATION Corporate Name of Company
By: /s/ David Lubinski By: /s/ Jack Dennison
----------------------------- -----------------------------------
Signature Signature
David Lubinksi Jack Dennison
-------------------------------------------------------------------------------
Name (Print) Name (Print)
Practice Manager Vice President
--------------------------------- ---------------------------------------
Title Title
May 20, 1999 June 25, 1999
--------------------------------- ---------------------------------------
Effective Date Date
30
>PAGE> 31
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
EXHIBIT E
MICROSOFT CORPORATION NON-DISCLOSURE AGREEMENT
(STANDARD RECIPROCAL)
THIS AGREEMENT (the "Agreement") is made between MICROSOFT CORPORATION,
a Washington corporation, and Healtheon Corporation ("COMPANY") and entered into
this 19th day of May, 1999.
In consideration of the mutual promises and covenants contained in this
Agreement, the mutual disclosure of confidential information to each other, the
parties hereto agree as follows:
1. Confidential Information and Confidential Materials
(a) "Confidential Information" means nonpublic information that
Disclosing Party designates as being confidential or which, under the
circumstances surrounding disclosure ought to be treated as confidential.
"Confidential Information" includes, without limitation, information relating to
released or unreleased Disclosing Party software or hardware products, the
marketing or promotion of any Disclosing Party product, Disclosing Party's
business policies or practices, and information received from others that
Disclosing Party is obligated to treat as confidential. Confidential Information
disclosed to Receiving Party by any Disclosing Party Subsidiary and/or agents is
covered by this Agreement.
(b) Confidential Information shall not include any information
that: (i) is or subsequently becomes publicly available without Receiving
Party's breach of any obligation owed Disclosing Party; (ii) became known to
Receiving Party prior to Disclosing Party's disclosure of such information to
Receiving Party; (iii) became known to Receiving Party from a source other than
Disclosing Party other than by the breach of an obligation of confidentiality
owed to Disclosing Party; or (iv) is independently developed by Receiving Party.
(c) "Confidential Materials" shall mean all tangible materials
containing Confidential Information, including without limitation written or
printed documents and computer disks or tapes, whether machine or user readable.
2. Restrictions
(a) Receiving Party shall not disclose any Confidential Information to
third parties for five (5) years following the date of its disclosure by
Disclosing Party to Receiving Party, except to Receiving Party's consultants as
provided below. However, Receiving Party may disclose Confidential Information
in accordance with judicial or other governmental order, provided Receiving
Party shall give Disclosing Party reasonable notice prior to such disclosure and
shall comply with any applicable protective order or equivalent.
(b) Receiving Party shall take reasonable security precautions, at
least as great as the precautions it takes to protect its own confidential
information, to keep confidential the Confidential Information. Receiving Party
may disclose Confidential Information or Confidential Material only to Receiving
Party's employees or consultants on a need-to-know basis. Receiving Party will
have executed or shall execute appropriate written agreements with its employees
and consultants sufficient to enable it to comply with all the provisions of
this Agreement.
(c) Confidential Information and Confidential Materials may be
disclosed, reproduced, summarized or distributed only in pursuance of Receiving
Party's business relationship with Disclosing Party, and only as otherwise
provided hereunder. Receiving Party agrees to segregate all such Confidential
Materials from the confidential materials of others in order to prevent
commingling.
(d) Receiving Party may not reverse engineer, decompile or disassemble
any software disclosed to Receiving Party.
3. Rights and Remedies
(a) Receiving Party shall notify Disclosing Party immediately upon
discovery of any unauthorized use or disclosure of Confidential Information
and/or Confidential Materials, or any other breach of this Agreement by
Receiving Party, and will
31
>PAGE> 32
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
cooperate with Disclosing Party in every reasonable way to help Disclosing Party
regain possession of the Confidential Information and/or Confidential Materials
and prevent its further unauthorized use.
(b) Receiving Party shall return all originals, copies,
reproductions and summaries of Confidential Information or Confidential
Materials at Disclosing Party's request, or at Disclosing Party's option,
certify destruction of the same.
(c) Receiving Party acknowledges that monetary damages may not be
a sufficient remedy for unauthorized disclosure of Confidential Information and
that Disclosing Party shall be entitled, without waiving any other rights or
remedies, to such injunctive or equitable relief as may be deemed proper by a
court of competent jurisdiction.
(d) Disclosing Party may visit Receiving Party's premises, with
reasonable prior notice and during normal business hours, to review Receiving
Party's compliance with the terms of this Agreement.
4. Miscellaneous
(a) All Confidential Information and Confidential Materials are
and shall remain the property of Disclosing Party. By disclosing information to
Receiving Party, Disclosing Party does not grant any express or implied right to
Receiving Party to or under Disclosing Party patents, copyrights, trademarks, or
trade secret information.
(b) If either party provides pre-release software as Confidential
Information or Confidential Materials under this Agreement, such pre-release
software is provided "as is" without warranty of any kind. Receiving Party
agrees that neither Disclosing Party nor its suppliers shall be liable for any
damages whatsoever relating to Receiving Party's use of such pre-release
software.
(c) Any software and documentation provided under this Agreement
is provided with RESTRICTED RIGHTS. Use, duplication, or disclosure by the
Government is subject to restrictions as set forth in subparagraph (c)(1)(ii) of
The Rights in Technical Data and Computer Software clause at DFARS 252.227-7013
or subparagraphs (c)(1) and (2) of the Commercial Computer Software --
Restricted Rights at 48 CFR 52.227-19, as applicable. Manufacturer is Microsoft
Corporation/One Microsoft Way/Redmond, WA 98052-6399.
(d) Both parties agree that they do not intend nor will they,
directly or indirectly, export or re-export (i) any Confidential Information or
Confidential Materials, or (ii) any product (or any part thereof), process or
service that is the direct product of the Confidential Information or Materials
to (A) any country that is subject to U.S. export restrictions (currently
including, but not necessarily limited to, Iran, Iraq, Syria, Cuba, North Korea,
Libya, and Sudan), or to any national of any such country, wherever located, who
intends to transmit or transport the products back to such country; (B) to any
end-user who either party knows or has reason to know will utilize them in the
design, development or production of nuclear, chemical or biological weapons; or
(C) to any end-user who has been prohibited from participating in U.S. export
transactions by any federal agency of the U.S. government.
(e) The terms of confidentiality under this Agreement shall not be
construed to limit either party's right to independently develop or acquire
products without use of the other party's Confidential Information. Further,
either party shall be free to use for any purpose the residuals resulting from
access to or work with such Confidential Information, provided that such party
shall maintain the confidentiality of the Confidential Information as provided
herein. The term "residuals" means information in nontangible form, which may be
retained by persons who have had access to the Confidential Information,
including ideas, concepts, know-how or techniques contained therein. Neither
party shall have any obligation to limit or restrict the assignment of such
persons or to pay royalties for any work resulting from the use of residuals.
However, the foregoing shall not be deemed to grant to either party a license
under the other party's copyrights or patents.
(f) This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof. It shall not be modified
except by a written agreement dated subsequent to the date of this Agreement and
signed by both parties. None of the provisions of this Agreement shall be deemed
to have been waived by any act or acquiescence on the part of Disclosing Party,
its agents, or employees, but only by an instrument in writing signed by an
authorized officer of Disclosing Party. No waiver of any provision of this
Agreement shall constitute a waiver of any other provision(s) or of the same
provision on another occasion.
32
>PAGE> 33
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
(g) If either party employs attorneys to enforce any rights
arising out of or relating to this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees. This Agreement shall be
construed and controlled by the laws of the State of Washington, and both
parties further consent to jurisdiction by the state and federal courts sitting
in the State of Washington. Process may be served on either party by U.S. Mail,
postage prepaid, certified or registered, return receipt requested, or by such
other method as is authorized by the Washington Long Arm Statute.
(h) Subject to the limitations set forth in this Agreement, this
Agreement will inure to the benefit of and be binding upon the parties, their
successors and assigns.
(i) If any provision of this Agreement shall be held by a court of
competent jurisdiction to be illegal, invalid or unenforceable, the remaining
provisions shall remain in full force and effect.
(j) All obligations created by this Agreement shall survive
change or termination of the parties' business relationship.
5. Suggestions and Feedback
Either party may from time to time provide suggestions, comments or other
feedback to the other party with respect to Confidential Information provided
originally by the other party (hereinafter "Feedback"). Both parties agree that
all Feedback is and shall be entirely voluntary and shall not, absent separate
agreement, create any confidentiality obligation for the Receiving Party.
However, the Receiving Party shall not disclose the source of any feedback
without the providing party's consent. Feedback shall be clearly designated as
such and, except as otherwise provided herein, each party shall be free to
disclose and use such Feedback as it sees fit, entirely without obligation of
any kind to the other party. The foregoing shall not, however, affect either
party's obligations hereunder with respect to Confidential Information of the
other party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
COMPANY: Healtheon Corporation MICROSOFT CORPORATION
--------------------------
Address: 4600 Patrick Henry Drive By: /s/ Laura Jennings
-------------------------- -----------------------------
Santa Clara, CA 95054
--------------------------
By: /s/ Jack Dennison Name: Laura Jennings
-------------------------- -----------------------------
Name: Jack Dennison Title: Vice President
-------------------------- --------------------------
Title: Vice President Date: 6/22/99
-------------------------- ---------------------------
Date: June 25, 1999 MS Contact:
-------------------------- ---------------------
33
>PAGE> 34
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Exhibit F
List of Healtheon Third Party Agreements
34
>PAGE> 35
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Exhibit G
Estimated Healtheon Internal Use Software License Grant
>TABLE>
>CAPTION>
Initial License Estimated Initial License
Microsoft Product Name: Quantity: Retail Price: Estimated Value:
-----------------------------------------------------------------------------------------------------
>S> >C> >C> >C>
BackOffice Server # of $2,499 $
development
servers
BackOffice Client Access # of $4,179 $
Licenses (20 Clients Pak) developers & testers est.
500
Windows NT Workstation # of $ 319 $
developers & testers est.
500
Windows 9x # of $ 209 $
employees
excluding
developers
Office 97 Developer's Edition # of $ 799 $
developers
>500
Microsoft Visual Studio Est. 500 $1,499 $
Enterprise Edition
Microsoft Site Server # of $3,920 $
Enterprise development
servers
Office 2000 # of $
employees
MS Project Est. 50 $
Total $
Letter of Agreement - Healtheon Corp., WebMD Inc. and Microsoft Corp.
Was this helpful?