1
EXHIBIT 10.9
We have omitted certain portions of this document and filed them separately
with the commission. These portions are marked with an asterisk (*).
CONTINUING EDUCATION AGREEMENT
BETWEEN
HEALTH STREAM
AND
VANDERBILT UNIVERSITY
This Continuing Education Agreement ("Agreement") is entered into as of July 22,
1999 ("Effective Date") by and between HealthStream, Inc., a Tennessee
corporation with its principal place of business at 000 00xx Xxxxxx Xxxxx, Xxxxx
000, Xxxxxxxxx, XX 00000 ("HealthStream") and Vanderbilt University, a Tennessee
not-for-profit organization with its principal place of business at 201 Light
Hall, Vanderbilt University, Xxxxxxxxx, XX 00000, by and through its School of
Medicine and School of Nursing ("Vanderbilt").
WHEREAS, HealthStream is a provider of computer and Web-based education
and training services to hospitals and other healthcare organizations;
WHEREAS, HealthStream is a provider of Continuing Education Units for
healthcare professionals ("CEU") and Continuing Medical Education for physicians
("CME") courseware and courseware management tools delivered via the Internet,
corporate intranets and networks ("HealthStream Sites");
WHEREAS, HealthStream has an array of distribution partners for CEU and
CME courses and other online educational courseware;
WHEREAS, current HealthStream distribution partners include XXX.XXX and
Phycor, with other relationships pending;
WHEREAS, HealthStream has an online course library with several hundred
hours of potential CEU and existing CME courseware available for purchase
("HealthStream Courseware");
WHEREAS, Vanderbilt is recognized internationally as a provider of high
quality education programs;
WHEREAS, Vanderbilt provides CUE and CME courses in conventional
lecture format that might also be made available for access over the Web;
WHEREAS, Vanderbilt has the skills, clinical expertise and knowledge
required to create educational Web-based courses for the medical community; and
WHEREAS, HealthStream and Vanderbilt desire to enter into this
Agreement.
THEREFORE, HEALTHSTREAM AND VANDERBILT HEREBY AGREE AS FOLLOWS:
1 DEFINITIONS
1.1 "CEU Courses" - Those educational courses that have been reviewed for
continuing education units by an institution recognized by an
accredited professional organization.
Page 1 of 9
2
Those completing the courses may receive credit toward continuing
education requirements.
1.2 "CME Courses" - Those educational courses that have been reviewed for
continuing medical education by an Accreditation Council for Continuing
Medical Education ("ACCME") accredited institution. Those completing
the courses may receive credit toward continuing education
requirements.
1.3 "Net Revenue" - Gross revenue derived by HealthStream from sales of
Vanderbilt Courseware less discounts and credits to customers.
1.4 "T.NAV(R)" - A registered trademark of HealthStream and is a computer
based training product that delivers and monitors World Wide Web based
content.
1.5 "Collaborative Course" - Those courses developed into a Web-based
format course of study by HealthStream in collaboration with Vanderbilt
from source materials originating with Vanderbilt or third party
personnel.
1.6 "Vanderbilt Course" - Medical and nursing courseware and educational
materials provided by Vanderbilt to HealthStream that have been
converted to an HTML or other HealthStream recommended Web-based
Formats that are substantially ready and able to be deployed for the
purpose of providing Web-based CME or CEU courses through
HealthStream's T.NAV system on the Internet.
1.7 "Vanderbilt Courseware" - The combined body of Vanderbilt Courses and
Collaborative Courses submitted to HealthStream under this agreement.
1.8 "Vanderbilt Materials" - Medical and nursing courseware and educational
materials provided by Vanderbilt to HealthStream, that is substantially
not in a format that can be transmitted over the Internet for the
purpose of creating Web-based CME or CEU courses and that may be in
some or all of the following formats, including, but not limited to:
paper, film or Microsoft PowerPoint slides, text materials, Microsoft
Word or Corel Word Perfect-based, handouts, overheads and other
presentation materials.
1.9 "Third Party Materials" - Those non-Web-based format materials
delivered to HealthStream from various third party sources that form
the basis for a course of study.
1.10 "Vanderbilt Pervasive Materials" - Those Vanderbilt Materials whose
depiction in Collaborative Courses is substantially identical to their
depiction independent of the Collaborative Course.
1.11 "Third Party Pervasive Materials" - Those Third Party Materials whose
depiction in Collaborative Courses is substantially identical to their
depiction independent of the Collaborative Course.
1.12 "HealthStream Packaging" - Those graphic, navigation and computer coded
elements added to Vanderbilt Materials and/or Third Party Materials to
comprise a Collaborative Course. HealthStream Packaging is not said to
include Vanderbilt Pervasive Materials or Third Party Pervasive
Materials, as these materials are organized and packaged for display
without substantial modification.
Page 2 of 9
3
1.13 "Vanderbilt Certification" - Certification of courses for CEU or CME
credit by Vanderbilt and branded as Vanderbilt certified courses under
the auspices of Vanderbilt's arrangements with the ACCME and other
professional educational quality assurance organizations.
2 TERMS AND CONDITIONS
2.1 Courseware Development. Vanderbilt shall, at its option, develop and
provide to HealthStream Vanderbilt Courses and/or Vanderbilt Materials,
which HealthStream will sell to a variety of medical professionals
(e.g., physicians, nurses, Allied Health professionals) for educational
credits via online usage at Web sites hosted and/ or managed by
HealthStream.
2.1.1. HealthStream will develop, at its option, the Vanderbilt
Materials into Web ready courses.
2.1.2 All Vanderbilt Courseware will be subject to Vanderbilt
editorial board approval prior to distribution by
HealthStream. Vanderbilt editorial board approval shall not be
unreasonably denied.
2.1.3 It is the intent of the parties to identify and develop at
least ten (10) courses in each year during the term of this
agreement.
2.1.4 HealthStream acknowledges that Vanderbilt anticipates
providing CEU and CME in novel ways that use information
technology to support various learning styles and distribution
of learning across the education-work continuum. This
Agreement is intended to apply making conventional CEU and CME
material available via the Web, not to those novel education
strategies and programs.
2.2 Compensation. HealthStream will pay to Vanderbilt the following
royalties:
2.2.1 Collaborative Courses. For Collaborative Courses, HealthStream
shall pay to Vanderbilt * of Net Revenue derived from the
sales of Collaborative Courses.
2.2.2 Vanderbilt Courses. For Vanderbilt Courses, HealthStream shall
pay to Vanderbilt * of Net Revenue derived from the sales of
Vanderbilt Courses. Nothing herein shall require Vanderbilt to
produce or deliver to HealthStream, medical courseware.
2.2.3 Payment Schedule. Royalty payments shall be made by
HealthStream to Vanderbilt thirty (30) days after the end of
the month of the initial course purchase.
2.3 Access to Courses by Vanderbilt Personnel. HealthStream will allow
Vanderbilt faculty, fellows, residents, students and staff access to
its Vanderbilt Courseware free of charge. All other HealthStream
courseware shall be available for purchase by Vanderbilt faculty,
fellows, residents and staff. HealthStream will compensate Vanderbilt
for courseware purchased by Vanderbilt faculty, fellows, residents,
students and/or staff by means of either one of the following methods,
at Vanderbilt's option: (i) pay Vanderbilt *
Page 3 of 9
4
* of all Net Revenue for HealthStream Courseware purchased by
Vanderbilt faculty, fellows, residents, and staff; or (ii) provide
Vanderbilt faculty, fellows, residents, and staff with a * discount on
the cost of HealthStream Courseware.
2.4 Reporting. HealthStream will provide Vanderbilt, at no cost to
Vanderbilt, with monthly reports of all Net Revenue generated from
Vanderbilt Courseware and all Net Revenue generated from HealthStream
Courseware purchased by Vanderbilt faculty, staff, fellows, students
and residents.
2.5 Vanderbilt Consulting. Vanderbilt faculty may elect to develop content
architecture for HealthStream for the development of online educational
courses. Should HealthStream elect to utilize this content
architecture, HealthStream will compensate Vanderbilt for such
Vanderbilt developed content architecture on a fee-for-service basis,
to be negotiated on a case-by-case basis. At its sole discretion,
HealthStream may elect not to utilize Vanderbilt developed content
architectures.
2.6 Vanderbilt Staff Restrictions. Under no circumstances shall Vanderbilt
faculty, fellows, residents, students and/or staff author conventional
CEU and CME courseware with HealthStream personnel or any of
HealthStream's subsidiaries, outside of this Agreement. HealthStream
will not be prohibited from contracting with those Vanderbilt
affiliates who are not closely aligned with Vanderbilt.
2.7 Advertising and Sponsorship Revenues. From time to time, HealthStream
may generate revenue through the sale of advertising on HealthStream
Sites.
2.7.1 Vanderbilt Contracted Advertisements and Sponsorships.
HealthStream shall compensate Vanderbilt * of all Net Revenue
generated from advertisements sold and contracted by
Vanderbilt for Vanderbilt Courseware on HealthStream Sites.
Vanderbilt contracted advertising and sponsorship sales will
conform to parameters established by HealthStream.
2.7.2 HealthStream Contracted Advertisements and Sponsorships.
HealthStream shall compensate Vanderbilt * of all Net Revenue
generated from advertisements sold and contracted by
HealthStream for Vanderbilt Courseware.
2.7.3 Vanderbilt Review. Vanderbilt shall have the right to review
and refuse all such advertising associated with Vanderbilt
Courseware that is placed on HealthStream Sites.
2.8 Third Party Content. At HealthStream's option, Vanderbilt may review
and make recommendations to online content originating from other
sources and Vanderbilt may elect to review said content for accuracy,
provide recommendations for changes, and provide Vanderbilt
Certification. HealthStream will compensate Vanderbilt for these
reviews on a fee-for-service basis negotiated on a case-by-case basis.
2.9 Payment. Royalty payments made by checks shall be made payable to
Vanderbilt University and sent to Xx. Xxxxxxx Xxxx, Assistant Director,
Financial Management, X.X. Xxx 00000, Xxxxxxxxx, XX. 00000-0000. All
reports required under this Agreement shall be sent to: Xx. Xxxxxxx
Xxxx, Assistant Director, Financial Management, XX-0000X Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxx, XX.00000-0000.
Page 4 of 9
5
2.10 Distribution Partner Approval. HealthStream will remove Vanderbilt
Courseware from a HealthStream Site upon notification by Vanderbilt.
Objection to a HealthStream Site by Vanderbilt will be limited to those
objections based on a reasonable determination that said distribution
partner is unsuitable to carry the Vanderbilt brand.
3 LICENSE
3.1 In consideration for the above, Vanderbilt grants HealthStream
worldwide, exclusive Internet rights as the host and marketing agent
for Collaborative Courses developed with HealthStream during the term
of this agreement. Vanderbilt grants HealthStream worldwide,
non-exclusive Internet rights as the host and marketing agent for
Vanderbilt Courses during the term of this agreement.
3.2 Course Ownership and Copyright. Vanderbilt shall retain all ownership
and copyright interest for all Vanderbilt Courses. HealthStream and
Vanderbilt shall have equal ownership and copyright interest for all
Collaborative Courses. Ownership and copyright interest in Vanderbilt
Materials components of Collaborative Courses shall rest exclusively
with Vanderbilt. All copyrights assigned herein shall survive the term
of this agreement.
4 OTHER CONDITIONS
4.1 Term and Termination.
4.1.1 The term of this Agreement shall be four (4) years and shall
commence on July 22, 1999 and terminate on July 21, 2003.
This Agreement may be extended for additional one year terms
by mutual written assent signed by the parties hereto.
4.1.2 If, for any reason, either party fails to satisfactorily
fulfill in a timely or proper manner its obligations under
this Agreement or breaches any of the promises, terms or
conditions of this Agreement, and having been given reasonable
notice of and opportunity to cure any such default and not
having taken satisfactory corrective action within the time
specified by the non-breaching party, the non-breaching party
shall have the right to terminate this Agreement by giving
written notice to the breaching party of such termination at
least fourteen (14) calendar days before the effective date of
such termination. Further, either party to this Agreement
shall have the right to terminate this Agreement without cause
by giving written notice to the other party of such
termination at least thirty (30) calendar days before the
effective date of such termination. For termination of any
type, any other provision to the contrary notwithstanding, the
breaching party shall not be relieved of liability to the
non-breaching party for damages sustained because of any
breach of this Agreement. Fees due under Section 2 and
copyright and intellectual property provisions of Section 3
survive termination.
4.1.3 The parties warrant they are duly licensed under the relevant
laws of their States and agree to abide by all applicable
state and/or federal laws and regulations governing the
licensure of its operations. The parties further agree to give
Page 5 of 9
6
prompt notice in writing to the other party in the event of
institution of proceedings for suspension or revocation of its
license, and to notify the other party in the event of any
suspension or revocation of its license within twenty-four
(24) hours of its occurrence. This Agreement will immediately
terminate upon the revocation or suspension of licensure of
either party. Further, either party, at its sole discretion,
may terminate this Agreement in the event the other party is
given official notice of the institution of proceedings to
suspend or revoke its licensure.
4.1.4 In the event that either party shall become insolvent or make
a general assignment for the benefit of creditors, then, at
the option of either party, this Agreement may be terminated
immediately by either party and be of no further force and
effect upon notice of such termination.
4.1.5 In the event that either party sells all or substantially all
of its assets, there is a sale of a majority ownership of
either party, or there occurs a material change in the
management or ownership of either party, this Agreement shall
terminate or continue at the mutual written consent of the
remaining parties.
4.2 Indemnification
4.2.1 HealthStream warrants that its performance of this agreement
will not violate or infringe upon the rights of third parties,
including but not limited to property, contractual,
employment, trade secret, proprietary information and
non-disclosure rights, or any United States trademark,
copyright or patent right. HealthStream will, at its own
expense, defend any suit or proceeding brought against
Vanderbilt based on a claim that the HealthStream Packaging
infringe upon any copyright, patent, trademark, trade secret,
or other intellectual property right, provided that
HealthStream is notified promptly in writing and given full
and complete authority, information and assistance for the
defense of such suit or proceeding. HealthStream may, at its
option and expense, either obtain for Vanderbilt the right to
continue using the Vanderbilt Courseware containing said
HealthStream Packaging free of any claim of infringement or
modify such HealthStream Packaging so that affected Vanderbilt
Courseware is not subject to a claim of infringement.
4.2.2 Vanderbilt warrants that its performance of this agreement
will not violate or infringe upon the rights of third parties,
including but not limited to property, contractual,
employment, trade secret, proprietary information and
non-disclosure rights, or any United States trademark,
copyright or patent right. Vanderbilt will, at its own
expense, defend any suit or proceeding brought against
HealthStream based on a claim that the Vanderbilt Materials
infringe upon any copyright, patent, trademark, trade secret,
or other intellectual property right, provided that Vanderbilt
is notified promptly in writing and given full and complete
authority, information and assistance for the defense of such
suit or proceeding. Vanderbilt may, at its option and expense,
either obtain for HealthStream
Page 6 of 9
7
the right to continue offering Vanderbilt Courseware
containing said Vanderbilt Materials free of any claim of
infringement or modify such Vanderbilt Materials so that
affected Vanderbilt Courseware is not subject to a claim of
infringement.
4.3 Insurance
4.3.1 Both parties shall maintain for the term of this Agreement
comprehensive general liability insurance, including broad
form contractual in a minimum amount of $1,000,000/$3,000,000.
The coverage shall bear an endorsement precluding cancellation
or reduction of coverage.
4.3.2 Both parties shall procure and maintain for the term of this
Agreement professional liability insurance, in a minimum
amount of $1,000,000/$3,000,000 in coverage for all of its
personnel who may participate in this Agreement. Such coverage
shall be for a minimum of five (5) years following expiration
or termination of this Agreement and shall provide for a
retroactive date no later than the inception date of this
Agreement.
4.3.3 Each party shall provide the other party with Certificates of
Insurance evidencing the above coverage. The coverage shall
bear an endorsement precluding cancellation or reduction of
coverage.
4.4 Notices. All notices or other communication provided for in this
Agreement shall be given to the parties addressed as follows:
HealthStream: Xx. Xxxx XxXxxxx
President
HealthStream, Inc.
000 00xx Xxx X, Xxxxx 000
Xxxxxxxxx, XX 00000
with a copy to: Xx. Xxxxxx Xxxxx
Vice President and General Counsel
HealthStream, Inc.
000 00xx Xxx X, Xxxxx 000
Xxxxxxxxx, XX 00000
Vanderbilt: Xx. Xxxxxxx Xxx
Director of Finance and Administration
School of Medicine
Vanderbilt University
XXX-0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
with a copy to: Contracts Administration
Medical Center Office
Vanderbilt University
000 Xxxxxx Xxxxx
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Page 7 of 9
8
4.5 Media. Each party agrees it will not use the other party's name, marks,
or logos in any advertising, promotional material, press release,
publication, public announcement, or through other media, written or
oral, whether to the press, to holders of publicly owned stock without
the prior written consent of the other party. Such consent shall not be
unreasonably withheld or delayed. Accurate statements made by either
party as to the basic terms of this Agreement are said to have the
consent of the other party.
4.6 Assignment and Binding Effect. Neither party shall assign, subcontract,
or transfer any of its rights or obligations under this Agreement to a
third party without the prior written consent of the other party. If an
assignment, subcontract, or transfer of rights does occur in accordance
with this Agreement, this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors or
assigns.
4.7 Independent Contractor. Each party shall be considered to be an
independent contractor and shall not be construed to be an agent or
representative of the other party, and therefore, shall have no
liability for the acts or omissions of the other party. In addition,
neither party, nor any of its employees, agents, or subcontractors,
shall be deemed to be employees or agents of the other party.
Therefore, neither party nor any of its employees, agents or
subcontractors, shall be entitled to salary, workers compensation, or
employee benefits of the other party by virtue of this Agreement.
4.8 Written Amendments and Waiver. This Agreement cannot be amended,
modified, supplemented or rescinded except in writing signed by the
parties hereto.
4.9 Governing Law and Jurisdiction. This Agreement shall be governed in all
respects by, and be construed in accordance with, the laws of the State
of Tennessee. Each party hereby consents to the jurisdiction of all
state and federal courts situated in Davidson County, Tennessee, agrees
that venue for any such action shall lie exclusively in such courts,
and agrees that such courts shall be the exclusive forum for any legal
actions brought in connection with this Agreement or the relationships
among the parties hereto.
4.10 Year 2000 Compliance. HealthStream certifies that it has a
comprehensive plan designed to achieve Year 2000 Compliance of its
systems ("Compliance Plan"). To the extent the Compliance Plan provides
or anticipates that any systems of HealthStream will not be made Year
2000 Compliant, such non-compliance will have no material adverse
effect upon the timely provision of the services. For purposes of this
section, "Year 2000 Compliance" and "Year 2000 Compliant" shall mean
that HealthStream systems, when used in accordance with its associated
documentation, will be capable of accurately processing, providing
and/or receiving electronic data that contain date representation from,
into, and between the years 1999 and 2000 and leap year calculations.
To the best of HealthStream's knowledge at the time of signing this
Agreement, there shall be no material adverse effect upon its timely
provision of services under this Agreement which is attributable to its
failure to achieve Year 2000 Compliance for all of its systems.
4.11 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter herein
and supersedes any other agreements, restrictions, representations, or
warranties, if any, between the parties hereto with regard to the
subject matter herein.
Page 8 of 9
9
restrictions, representations, or warranties, if any, between the
parties hereto with regard to the subject matter herein.
4.12 Severability. 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. If this Agreement as it relates to any product(s) licensed
hereunder shall be held by a court of competent jurisdiction to be
invalid, illegal, or unenforceable or if this Agreement is terminated
as to particular product(s), this Agreement shall remain in full force
and effect as to the remaining product(s).
4.13 No Waiver. 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.
4.14 Headings. The Article headings used in this Agreement and the attached
Exhibits are is intended for convenience only and shall not be deemed
to supersede or modify any provisions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives and thereby become effective on the
date specified above.
FOR HEALTHSTREAM
/s/ Xxxx XxXxxxx 7/22/99
--------------------------------------------- -------------------
Xxxx XxXxxxx, President Date
HealthStream, Inc.
FOR VANDERBILT UNIVERSITY
/s/ Xxxxxxx X. Xxx 7/19/99
--------------------------------------------- -------------------
Xxxxxxx X. Xxx Date
Director of Finance & Administration
/s/ Xxxxxx X. Xxxx 7/19/99
--------------------------------------------- -------------------
Xxxxxx X. Xxxx Date
Executive Vice President for Clinical Affairs
Page 9 of 9
