THIS (this "Agreement")
is effective as of the 27 day of March, 2006, by and between
MedWisdom Inc., a Delaware corporation
("MedWisdom"), and TotalMed Systems, Incorporated, a
Florida corporation (hereinafter "TotalMed").
RECITALS
WHEREAS, MedWisdom has developed its MD2005
medical practice management
computer software (customized to brand the
software "TotaIPM") and certain related
software (the "MedWisdom Software"), all of
which MedWisdom is willing to provide to
TotalMed on the terms and conditions set
forth herein; and
WHEREAS, MedWisdom has developed its
ChiroWisdom medical practice management
computer software designed for the chiropractic
market(customized to brand the software
"TotalChiroPM") and certain related software
(the "MedWisdom Software"), all of which
MedWisdom is willing to provide to TotalMed on the
terms and conditions set forth herein; and
WHEREAS, TotalMed intends to combine
such Software with other software programs to
create the "TotaIPM Software" and to market such
TotalPM Software to end-users.
NOW, THEREFORE, in consideration of the
premises hereof, and the mutual obligations
herein made and undertaken, the parties hereto
agree as follows:
Section 1.
DEFINITIONS.
For the purposes of this Agreement, the
definitions set forth in this Section shall
apply to the respective capitalized terms:
1.1. "End-User" means a prospective
customer of TotalMed to whom TotalMed offers
TotalMed Products for use in the regular course
of such customer's business and not for resale.
1.3. "End-User License Agreement" means
the form of agreement to be entered into between
TotalMed and each End-User, which grants the End-
User the right and license to use the MedWisdom
Software together with any additional software
programs provided by TotalMed, as part of an
TotalMed Product. Each End-User License
Agreement shall prohibit the End-User from any
copying of the MedWisdom Software, from any
transfer of any MedWisdom Software to any third
parties, and from any reverse-compiling, reverse-
assembly, or reverse-engineering of the MedWisdom
Software from the Object Code in which they are
distributed to End-Users.
1.4. "Enhancement(s)" means computer
program modifications or additions, other than
Maintenance Modifications, that may be integrated
with the MedWisdom Software or offered separately
by MedWisdom and that alter the functionality of
the MedWisdom Software
or add new functions thereto.
1.5. "Error" means a defect in the MedWisdom
Software that prevents it from
functioning in substantial conformity with the
published specifications pertaining thereto.
1.6. "Maintenance Modification(s)" means computer
software changes to be
integrated with the MedWisdom Software to correct any
Errors therein, but that do not alter the
functionality of the MedWisdom Software or add new
functions thereto.
1.7. "Marketing Territory" means the United States
of America.
1.8. "MedWisdom Software" has the meaning given
to it in the recitals to this
Agreement and shall include all
Maintenance Modifications and
Enhancements thereto. MedWisdom Software
shall include a version of the MD 2005
software that will permit TotalMed to
run such software on its computer
servers and offer it to End-Users as an
application service provider.
1.9. "Obiect Code" means computer
programs assembled or compiled in magnetic or
electronic binary form on software media, which
are readable and usable by machines, but not
generally readable by humans without
reverse-assembly, reverse-compiling, or
reverseengineering.
1.10. "TotalMed Products" means one or
more combinations of the MedWisdom
Software and computer software
independently developed or procured by
TotalMed, to be offered by TotalMed,
together with related services, to End-
Users.
Section 2.
TOTALMED CERTIFICATION.
TotalMed hereby certifies and agrees that, in
consideration of the benefits of this
Agreement, including the discounts granted to TotalMed
with respect to the MedWisdom
Software, TotalMed will add significant value to, and
enhance the functionality and/or capability
of, the MedWisdom Software by combining the
MedWisdom Software with other or computer
software programs to produce TotalMed
Products, and shall offer such TotalMed
Products and related services, including
(without limitation) training, installation
assistance, and other forms of customer
support. TotalMed further certifies and agrees
that it will market the MedWisdom Software
solely as part of TotalMed Products and that
TotalMed Products will be marketed by TotalMed
for its own account in the normal course of
its business solely to End-Users having no
affiliation or control relationship with
TotalMed. In the event that any of the
foregoing representations and undertakings prove untrue at any
time during the term of this Agreement,
MedWisdom shall have the right to terminate
this Agreement as to any or all further
shipments to TotalMed or as to any or all
further copying and distribution of MedWisdom
Software (including any derivative works
thereof) by TotalMed in the manner prescribed
in Section 16 hereof.
Section 3.
MEDWISDOM'S RESPONSIBILITIES.
Subject to the terms and conditions of this
Agreement, MedWisdom shall:
2
3.1. Grant TotalMed the rights and licenses in the
MedWisdom Software as set forth
in Section 5 hereof;
3.2. Provide technical support for the MedWisdom
Software as set forth in Section 8
hereof;
3.3. Provide TotalMed's sales, helpdesk and
technical staff with training as set forth in
Section 8.1.1.
3.4. Warrant the MedWisdom Software as set forth
in Section 14 hereof;
3.5. Indemnify TotalMed as set forth in Section
15 hereof and
3.6. Offer to TotalMed Enhancements to the
MedWisdom Software sufficient to
satisfy applicable regulatory requirements.
3.7. Offer to TotalMed Enhancements to
the MedWisdom Software on terms no less
favorable than those offered to any other
similarly situated reseller.
Section 4.
TOTALMED'S RESPONSIBILITIES.
Subject to the terms and conditions of this
Agreement, TotalMed shall:
4.1. Combine the MedWisdom Software
with other computer software programs
independently developed or procured by
TotalMed to create TotalMed Products;
4.2. Market, sell, and deliver TotalMed Products
to End-Users in the Marketing
Territory;
4.3. Present the End-User License Agreement to
all prospective customers, obtain
duly executed copies of the End-User License
Agreement from each End-User prior to delivery
of the MedWisdom Software as part of any TotalMed
Products, and forward one copy of each
End-User License Agreement to MedWisdom promptly after
its signing;
4.4. Provide training regarding the TotalMed
Products (including the MedWisdom
Software) to End-Users;
4.5. Provide technical support for TotalMed Products
to End-Users as set forth in
Section 8 hereof;
4.6. Protect MedWisdom's proprietary rights in
the MedWisdom Software as set forth
in Section 6 hereof;
4.7. Grant MedWisdom security interests and
assist in their perfection as set forth in
Section 10 hereof; and
4.8. Provide reseller exemption certificates to
MedWisdom as set forth in Section 11
hereof.
3
Section 5.
LICENSES GRANTED.
5.1. MedWisdom hereby grants to TotalMed a
nonexclusive, nontransferable right and license
to copy and to distribute copies of MedWisdom
Software, in Object Code only, for use as part
of TotalMed Products, to End-Users who have
duly executed an End-User License
Agreement in the Marketing Territory during
the term of this Agreement. No modification or
preparation of derivative works of the
MedWisdom Software whatsoever is permitted.
5.2. MedWisdom further grants to TotalMed
a nonexclusive, nontransferable right and
license to use the MedWisdom Software, in Object
Code only, for marketing and demonstration
purposes and for the training of customers.
Section 6.
CONFIDENTIALITY OF INFORMATION; PROTECTION AND SECURITY.
6.1. TotalMed shall use all reasonable
efforts to protect and defend the proprietary
nature of the MedWisdom Software, including
Enhancements and any derivative works of the
MedWisdom Software. Except as expressly
provided otherwise in this Agreement,
TotalMed shall not copy, modify, transcribe,
store, translate, sell, lease, or otherwise
transfer or distribute any of the MedWisdom
Software, including Enhancements, in whole or
in part, without explicit prior authorization
in writing from MedWisdom.
6.2. All MedWisdom. Software incorporated
into TotalMed Products shall be marked with
such copyright, patent, or other notices,
proprietary legends, or restrictions as
MedWisdom may require.
Section7 EXPENSES.
It is expressly understood and agreed that
MedWisdom is under no obligation or
requirement to reimburse TotalMed for any expenses or
costs incurred by Totalled in the
performance of its responsibilities under this
Agreement. Any costs or expenses incurred by
TotalMed shall be at TotalMed's sole risk and
upon its independent business judgment that
such costs and expenses are appropriate.
Section 8.
TRAINING; TECHNICAL SUPPORT.
8.1. By MedWisdom:
8.1.1. MedWisdom shall provide initial
technical support and training to
TotalMed's sales, helpdesk and technical
personnel, with respect to the MedWisdom Software.
Such training shall not exceed 80 person-
hours by MedWisdom's personnel during the
threemonth period following the effective
date of this Agreement. If additional
training is needed in excess of such 80
person-hours, TotalMed will pay to MedWisdom
$75.00 per person'-hour such training. All
such training and support shall be performed
at TotalMed's El Paso, TX
facility unless another site is mutually agreed upon.
TotalMed shall pay all expenses of its
4
personnel, including travel, food, and lodging, incident to
such training. TotalMed shall
promptly reimburse MedWisdom for all
reasonable and documented expenses of its
personnel, including travel, food, and
lodging, incident to such training.
8.1.2. MedWisdom shall provide TotalMed with
commercially reasonable
technical support with respect to any technical issues with
respect to the MedWisdom Software.
8.1.3. MedWisdom will provide
End-Users with level 2 and level 3 helpdesk
support, as such terms are defined in
Exhibit A to this Agreement.
8.2. TotalMed shall provide End-Users with
"level 1 helpdesk support", as such term is
defined in Exhibit A to this Agreement, and
all other necessary maintenance, training, and
support. Such services shall include, without
limitation, the following:
8.2.1. Technical training regarding
installation and operation of the TotalMed
Products;
8.2.2. Consulting support at End-
User site(s) regarding proper utilization,
and optimization of use, of the TotalMed
Products; and
8.2.3. Telephone hotline support during
normal business hours; and
8.2.4. Distribution and application of
Maintenance Modifications and
Enhancements.
Section 9. TITLE.
Title to the MedWisdom Software,
including any Enhancements, shall at all times
remain and vest solely with MedWisdom. TotalMed
agrees that it will not claim or assert title
to any such materials or attempt to transfer
any title to End-Users or any third parties-
Section 10.
SECURITY INTEREST.
Since the MedWisdom software is being
installed on TotalMed servers, TotalMed hereby
grants MedWisdom, and MedWisdom hereby
reserves, a purchase money security interest in
and to all license rights in the MedWisdom
Software, including any Enhancements, delivered
to TotalMed under this Agreement from time to
time, as security for the payment and
performance by TotalMed of all its obligations
and liabilities to MedWisdom under this
Agreement.
TotalMed agrees to assist and cooperate fully
with MedWisdom in the perfection and
enforcement of such security interest.
Section 11.
RESELLER EXEMPTION CERTIFICATION.
TotalMed hereby certifies that it either
holds or will acquire prior to offering for
resale a valid Reseller Exemption Certificate
issued by each taxing jurisdiction or entity in
the Marketing
5
Territory where such certificate is required as a
condition for the avoidance of applicable sales or
use taxes, covering any software to be
licensed or sublicensed under this Agreement.
Prior to any shipment of TotalMed Products
under this Agreement, TotalMed will provide
MedWisdom with a copy of each such certificate,
thereby entitling TotalMed to be treated by
MedWisdom as exempt from collection of tax on
such TotalMed Products in each jurisdiction or
entity from which a certificate is obtained. TotalMed shall
promptly notify MedWisdom of any additions,
deletions, or changes to such certificates. TotalMed
shall indemnify and hold harmless
MedWisdom from and against any taxes, duties, tariffs, or
other assessments levied by or on
behalf of any taxing jurisdiction or entity that fails
to issue, or disputes the validity or coverage
of, any such exemption certificates.
Section 12.
MINIMUM PAYMENT LEVEL; INSURANCE.
12.1. TotalMed shall use all reasonable
efforts to attain a goal of $900 (after
application of available discounts) in minimum
monthly aggregate payments to MedWisdom
pursuant to
Section 13. MedWisdom shall be entitled, in its
discretion, to terminate this Agreement
pursuant to Section 16 hereof if TotalMed fails
to attain such goal for any [three] consecutive
months. The initial three consecutive month
minimum does not betzin until TotalMed training
and software implementation is complete.
12.2. TotalMed shall procure and maintain
liability insurance, including product
liability insurance, in the amount of at least
$3,000,000, naming MedWisdom as a co-payee upon
loss. Evidence of such insurance shall be
furnished to MedWisdom prior to the effective
date of this Agreement.
Section 13. PAYMENT.
13.1. On the effective date of this Agreement,
TotalMed shall pay to MedWisdom
$30,000.00 of immediately available funds. In
addition, TotalMed shall pay to MedWisdom an
additional $20,000.00 of immediately available
funds not more than 30 days following
TotalMed's receipt from End-Users of aggregate
license fees, ongoing maintenance fees and
other fees payable under the End-User License
Agreement in respect of the MedWisdom Product in
the amount of $200,000. Such payments shall be
in addition to the payments required to be made
by TotalMed to MedWisdom pursuant to Section
13.2.
13.2. TotalMed shall collect from End-Users and pay
over to MedWisdom not more
than 30 days following TotalMed's receipt of
such funds, 60% of the ASP Subscription fees
and License Fees (if applicable) payable under
the End-User License Agreement in respect of
the MedWisdom Product and other fees payable
under the End-User License Agreement in respect
of the MedWisdom Product. Unless otherwise
agreed in writing by TotalMed and MedWisdom,
the MedWisdom Product shall be priced pursuant
to Exhibit B. Each such payment shall be
accompanied by a written report that details which
End-User License Agreements such payments relate
to, the portion of other fees received by
TotalMed and the amount of such fees included
in such payment by TotalMed to MedWisdom.
MedWisdom shall have the right to inspect, or
have inspected, during regular business hours
and in a commercially reasonable manner, the
accounts
6
and records of TotalMed that do, or could potentially,
impact the calculation of the payments
required under this Agreement.
Section 14.
LIMITED WARRANTY.
14.1. MedWisdom's warrants, solely for
the benefit of TotalMed, that the MedWisdom
Software will operate in substantial
conformity with any published specifications
pertaining
thereto during the term of this Agreement.
14.2. The exclusive remedy of TotalMed
and of any End-User against MedWisdom for
breach of any of the limited warranty set
forth in Section 14.1 shall be to seek repair
or replacement of the affected MedWisdom
Software, and, if such repair or replacement
is not effected after reasonable notice and
opportunity for remedial action by MedWisdom,
to obtain repayment of any sales price or
royalty fee paid to MedWisdom for the
MedWisdom Software.
14.3. EXCEPT AS SET FORTH IN THIS SECTION
14, MEDWISDOM DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTIES AS TO THE
SUITABILITY OR MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE OF ANY PRODUCTS OR PROGRAMS
FURNISHED HEREUNDER OR FOR ANY TOTALMED
PRODUCTS PREPARED BY TOTALMED. IN NO EVENT
SHALL MEDWISDOM BE LIABLE FOR ANY LOST OR
ANTICIPATED PROFITS, OR ANY INCIDENTAL,
EXEMPLARY, SPECIAL, OR
CONSEQUENTIAL DAMAGES, REGARDLESS OF WHETHER
MEDWISDOM WAS ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.
Section 15.
INDEMNIFICATION.
15.1. By MedWisdom:
15.1.1. MedWisdom hereby
indemnifies and holds harmless TotalMed from
and against any claims, actions, or demands
alleging that the MedWisdom Software
infringes any patent, trademark, copyright,
or other intellectual property right of any
third party. TotalMed shall permit MedWisdom
to replace or modify any affected MedWisdom
Software to avoid infringement, or to procure the right for TotalMed
to continue use and remarketing of such items. If
neither of such alternatives is reasonably
possible, the infringing items shall be
returned to MedWisdom and MedWisdom's sole
liability shall be to refund amounts paid therefor by
TotalMed. MedWisdom shall have no obligation
hereunder for or with respect to claims,
actions, or demands alleging infringement that
arise by reason of combination of noninfringing
items with any items not supplied by MedWisdom.
15.1.2. MedWisdom further
indemnifies and holds harmless TotalMed from
and against any claims, actions, or demands
arising out of a breach by MedWisdom of the
limited warranty set forth in Section 14.1.
The foregoing indemnity shall not apply to
claims, demands, or actions arising alterations
or additions to the MedWisdom Software made by or
on behalf of TotalMed or any End-User.
7
15.2. TotalMed hereby indemnifies and
holds harmless MedWisdom from and against
any and all claims, actions, or demands
arising with respect to any TotalMed Products, with the
sole exception of those matters for which
MedWisdom bears responsibility under Section
15.1 hereof.
15.3. The foregoing indemnities are
conditioned on prompt written notice of any
claim, action, or demand for which indemnity
is claimed; complete control of the defense and
settlement thereof by the indemnifying party; and
cooperation of the other party in such defense.
Section 16.
TERMINATION.
16.1. MedWisdom may terminate this
Agreement if TotalMed at any time fails to
comply with the certification required
under Section 2 hereof.
16.2. MedWisdom may terminate this
Agreement for failure of TotalMed to attain the
minimum monthly purchase goals set forth in
Section 12 hereof for any [three] consecutive
months.
16.3. Should either party commit a
material breach of its obligations
hereunder, or should any of the
representations of either party in this
Agreement prove to be untrue in any material
respect, the other party may, at its option,
terminate this Agreement, by providing 30
days' written notice of termination, which
notice shall identify and describe the basis
for such termination. If, prior to
expiration of such period, the defaulting
party cures such default,
termination shall not take place.
16.4. Either party hereto may, at its option and
without notice, terminate this
Agreement, effective immediately, should the
other party hereto (a) make a general
assignment for the benefit of creditors; (b)
institute proceedings to be adjudicated a
voluntary bankrupt, or consent to the filing of
a petition of bankruptcy against it; (c) be
adjudicated by a court of
competent jurisdiction as being bankrupt or
insolvent; (d) seek reorganization under any
bankruptcy act, or consent to the filing of a
petition seeking such reorganization; or (e)
have a decree entered against it by a court of
competent jurisdiction appointing a receiver,
liquidator, trustee, or assignee in bankruptcy
or in insolvency covering all or substantially
all of such party's property or providing for
the liquidation of such party's property or
business affairs.
16.5. Termination of this Agreement shall not
relieve either party of the obligations
incurred hereunder pursuant to Sections 6, 10,
11 and 13-18 hereof, which Sections shall
survive such termination.
16.6. On termination of this Agreement, TotalMed
shall, at MedWisdom's option,
(a) return to MedWisdom all MedWisdom Software
delivered to TotalMed, including all copies
thereof, and (b) dispose of any remaining
TotalMed Products that includes the MedWisdom
Software.
Section 17.
LIMITATION OF REPRESENTATIONS AND USE OF NAME BY
TOTALMED.
8
17.1. TotalMed shall make no representations
concerning MedWisdom, the
MedWisdom Software, including any Maintenance
Modifications or Enhancements, except as
set forth in the printed documentation approved
by MedWisdom. TotalMed shall not reproduce,
reference, distribute, or utilize any trade
name or trademark of MedWisdom, except solely
for
purposes of identifying MedWisdom's products
and programs, without the prior written
approval of MedWisdom.
17.2. TotalMed shall submit to MedWisdom
for approval, prior to use, distribution, or
disclosure, any advertising, promotion, or
publicity in which the trade name or
trademarks of the MedWisdom are used, or which
is otherwise undertaken pursuant to this
Agreement.
MedWisdom shall have the right to require, at
its discretion, the correction or deletion of
any misleading, false, or objectionable
material from any such advertising, promotion,
or publicity.
Section 18.
INDEPENDENT CONTRACTOR STATUS.
TotalMed is an independent contractor
under this Agreement, and nothing herein shall
be construed to create a partnership, joint
venture, or agency relationship between the
parties hereto with the sole exception that
TotalMed acts as a licensing agent of MedWisdom
with respect to MedWisdom Software as provided
herein. TotalMed shall have no authority to
enter into agreements of any kind on behalf of MedWisdom
and shall have no power or authority to bind or
obligate MedWisdom in any manner to any third
party.
Section 19.
COMPLIANCE WITH LAW.
TotalMed shall comply with all
applicable laws and regulations of
governmental bodies or agencies in its
performance under this Agreement.
Section 20.
NO ASSIGNMENT.
TotalMed represents that it is acting on
its own behalf and is not acting as an agent
for or on behalf of any third party, and
further agrees that it may not assign its
rights or obligations under this Agreement
without the prior written consent of MedWisdom.
Section 21.
NOTICES.
All notices and other communications required or
permitted to be given under this
Agreement shall be in writing and shall be
considered effective when deposited in the
U.S. mail as registered mail, return receipt
requested, postage prepaid, and addressed to
the party at the address set forth on the
signature page hereto, unless by such notice a
different address shall have been designated
in writing.
9
Section 22.
GOVERNING LAW.
All questions concerning the validity,
operation, interpretation, and construction of
this Agreement will be governed by and
determined in accordance with the laws of the
State of New York with reference to the conflict
of law provisions thereof.
Section 23.
NO WAIVER.
Neither party shall by mere lapse of time without
giving notice or taking other action
hereunder be deemed to have waived any breach by the
other party of any of the provisions of
this Agreement. Furthermore, the waiver by
either party of a particular breach of this
Agreement by the other party shall not be
construed as, or constitute, a continuing
waiver of such breach, or of other breaches of
the same or other provisions of this Agreement.
Section 24.
FORCE MAJEURE.
Neither party shall be in default if
failure to perform any obligation hereunder
is caused solely by supervening conditions
beyond that party's control, including acts of God, civil
commotions, strikes, labor disputes, and
governmental demands or requirements.
Section 25.
SEVERABILITY.
If any provision of this Agreement shall
be held illegal, unenforceable, or in conflict
with any law of a federal, state, or local
government having jurisdiction over this Agreement, the
validity of the remaining portions or
provisions hereof shall not be affected thereby.
Section 26.
NO CONFLICT OF INTEREST.
TotalMed represents and warrants that it has full
power and authority to undertake the
obligations set forth in this Agreement and
that it has not entered into any other
agreements, nor will it enter into any other
agreements, that would render it incapable of
satisfactorily performing its obligations
hereunder, or place it in a position of
conflict of interest, or be inconsistent or in
conflict with its obligations hereunder.
Section 27.
SCOPE OF AGREEMENT.
Each of the parties hereto acknowledges that it
has read this Agreement, understands it,
and agrees to be bound by its terms. The parties further
agree that this Agreement is the complete
and exclusive state of agreement and
supersedes all proposals (oral or written),
understandings, representations, conditions,
warranties, covenants, and all other
communications between the parties relating
thereto. This Agreement may be amended only
by a writing that refers to this Agreement
and is signed by both parties.
10
[SIGNATURE PAGE FOLLOWS]
II
IN WITNESS WHEREOF, the parties have
caused this Agreement to be duly executed by
their authorized representatives as set forth
below:
MEDWISDOM INC.
By:
Xxxx Xxxxxxxxx, Chief Executive Officer
Address: 0000 Xxxxxxx Xx
Xxxx Xxxxxx, XX 00000
By:
Name
Title
Address:
BFLO Doc. N 1541734.2
[SIGNATURE PAGE TO OEM RESELLER AGREEMENT]
Exhibit A
HELPDESK SUPPORT
Definitions:
Xxxxx 0- Xxxx xx skilled to enable a first-call
resolution of 85% or greater. These calls are
high level in nature relating to functionality of the
practice management system, printing issues,
and/or database data maintenance issues.
Level 2 - Typically, these are complex
billing related questions relating to
insurance claim rejection, discovery of
specific data entry error, correction of error,
and resubmission of corrected claim. Ideally,
this position is a certified health care claim
coder.
Level 3 - These are questions on practice
management system functionality where the
system is not functioning as intended or where
specific enhancements are requested. These
questions will come from the Level 2 Help Desk
representative and will be documented and
researched as to whether they are to be
included in an enhancement list to be
implemented in a future release of the
software or whether it is a "Hot-Fix" that
needs to be implemented immediately. A Hot-Fix
is defined as an issue that is preventing a
customer from getting paid by an insurance
company.
Exhibit B
This pricing may change from time to
time when mutually agreed to by
MedWisdom & TotalMed.
