EXHIBIT 10.1
XXXXX INFORMATION SERVICES, INC.
DELTA HEALTHCARE CONSULTING GROUP, INC.
AGREEMENT REGARDING INTELLICHART
This Agreement Regarding IntelliChart (the "Agreement") is made and entered
into by and between Xxxxx Information Services, Inc., a Utah corporation having
its principal place of business at 53 West, 9000 South, Sandy Utah ("Xxxxx"),
and Delta Healthcare Consulting Group, Inc., a Utah corporation having its
principal place of business at 00 Xxxx, 0000 Xxxxx, Xxxxx, Xxxx ("Xxxxx"),
effective as of May 23, 2003 (the "Effective Date").
Recitals
A. On the Effective Date, Xxxxx is selling to Delta assets relating to
the consulting business previously conducted by Xxxxx (the "Consulting
Business"), pursuant to the terms of an Agreement for Sale and Purchase of
Assets dated as of May 23, 2003 (the "Asset Sale Agreement").
X. Xxxxx has developed a software program called IntelliChart for use in
the Consulting Business, intended to assist clients of such Consulting Business
in making staffing decisions based on patient care needs, by providing patient
tracking and classification information (the "Licensed Program").
C. In connection with the sale of assets of the Consulting Business to
Delta, Xxxxx and Delta desire that Xxxxx xxxxx and license to Delta certain
rights with respect to the Licensed Program, as set forth below, with terms
designed to permit Delta to make reasonable use of the Licensed Program in
connection with the operation of the Consulting Business after the Effective
Date, but providing reasonable protections to Xxxxx and its successors and
assigns, with respect to other businesses and operations conducted by them, and
other software programs developed and acquired by Xxxxx or its successors, which
are utilized in such businesses and operations, and contain some of the same
codes and features as the Licensed Program.
Agreement
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Grant of License. Subject to all of the terms, conditions and
limitations of this Agreement, Xxxxx hereby grants to Delta, and Delta accepts
from Xxxxx, an exclusive (to the extent provided herein), worldwide, fully paid-
up right and license (the "License") to reproduce, use, modify, market and
distribute the Licensed Program for Permitted Applications (as defined below),
in the form existing on the Effective Date, together with modifications made
thereto by Xxxxx as referenced in Section 10 below, and all modifications or
improvements thereto or derivations thereof made by Delta during the term of
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this Agreement. The License is intended to allow Delta, during the term of this
Agreement, and subject to the conditions and limitations set forth herein, to
use the Licensed Program in the Consulting Business and make it available to the
customers of the Consulting Business.
2. Preparation of Separate Compilation; Xxxxx Obligations for Hospital.
In order to separate, to the extent possible, the code required for the Licensed
Program from the code relating to features of Xxxxx'x EDNet product which are
not utilized by the Licensed Program, Xxxxx has undertaken to separately and
incrementally compile the code relating to the units, forms and features of the
Licensed Program, and will present to Delta a disk with a copy of the source
code required to compile the Licensed Program's applications, but without code
or features not required for operation of the Licensed Program. This code will
be the only code to which Delta will have access. Xxxxx will promptly take
action to swap out the previous version of the Licensed Program Product
currently installed with the Hospital (as defined in the Asset Sale Agreement),
in exchange for this new, separately compiled version, and assume any costs
associated with such transition. Xxxxx will also fulfill its contractual
obligation to place source code in escrow for the Hospital, in accordance with
the contract entered into between Xxxxx and Hospital.
3. Ownership of Licensed Program; Use of Marks; Existing Codes. Xxxxx
shall at all times retain ownership to the Licensed Program, including
modifications and enhancements thereto made by Xxxxx. Delta shall own all
modifications and enhancements to the Licensed Program made by Delta. During
the term of this Agreement, Delta shall not be entitled to use any of Xxxxx'x
trademarks in the conduct of the Consulting Business or the use or distribution
of the Licensed Program, except as Xxxxx may specifically agree in writing from
time to time. Xxxxx and its successors in interest will own all intellectual
property rights with respect to the existing source and object codes of the
Licensed Program as of the Effective Date, as included in the separately
compiled product as referenced above (the "Existing Codes"). Delta will have
access to the Existing Codes, in order to be able to customize the features of
the Licensed Program for use in Permitted Applications, but for no other
purposes.
4. Obligation to Secure Third Party Licenses. The parties hereto
understand and acknowledge that with the separate compilation of the Licensed
Program as provided above, Delta will be required to obtain its own licenses
with respect to use of third party software utilized as components within the
Licensed Program, and Delta agrees to acquire all required licenses, so that use
of the Licensed Program as contemplated herein does not violate the rights of
any such third party licensors.
5. Permitted Applications. The License only grants to Delta the right to
use the Licensed Program in the conduct of the Consulting Business, and to
license customers of the Consulting Business to use the Licensed Program and any
modifications thereto or derivations thereof only for one or more of the
Permitted Applications as described below. For purposes of this Agreement, the
term "Permitted Applications" shall mean the provision of patient classification
and determination of workload requirements by patient type, to hospitals, other
health care facilities, and any of the departments thereof. The License grants
to Delta the right to use, market and license the Licensed Program or any of the
Existing Code or any derivations thereof for any Permitted Applications, subject
to the terms and conditions of this Agreement.
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6. Prohibited Applications and Markets. The License does not grant to
Delta, and Delta will not have, any right to use the Licensed Program or any of
the Existing Code or any derivations thereof for, and Delta agrees that it will
not undertake in any way to sell, lease, license, publish or distribute the
Licensed Program or any portions thereof for, and will not undertake in any way
to sell, lease, license, publish or distribute the Licensed Program or any
portions thereof for use in (and will not permit others to take any such action
for any such use in), any information system technologies, programs or
applications that provide any of the following functionality (the "Prohibited
Applications"):
Individual patient demographic identification, except as currently in
use in the IntelliChart program
Patient order entry and workload assignment (other than workload
identification and measurement)
Documentation of patient encounters (other than identification of
numbers of patients by class level, including turnover rates and
related information as currently provided in the Licensed Program)
Charge capture as a result of patient encounters (provided that this
restriction shall not preclude interfaces with hospital charging
systems)
Outcome measurement based on patient encounter documentation
Triage, tracking, prescription writing, discharge
for use in any of the following markets (the "Prohibited Markets"):
Respiratory care
Physical therapy
Occupational therapy
Speech therapy
Recreational therapy
Emergency department
Urgent care facilities
Inpatient / outpatient surgery
General and intensive care nursing in hospitals
Labor and delivery (perinatal) departments in hospitals.
7. End-User Sublicenses; Support to End Users. Delta shall be entitled
to distribute and grant rights to use of the Licensed Program, as it may be
modified from time to time, only to customers of Delta's Consulting Business.
All end users of the Licensed Program must execute an end user license
agreement, and all such agreements shall be in a form reasonably approved by
Xxxxx, consistent with the terms of this Agreement. Except as otherwise
specifically provided in Section 5.1 of the Asset Sale Agreement, Delta must
provide all support for all end users of the Licensed Program and any warranties
with respect to the Licensed Program will come only from Delta.
8. Payments. The License is granted to Delta in partial consideration
for the payments and other consideration provided by Delta to Xxxxx pursuant to
the Asset Sale Agreement. Delta shall have no further payment obligations to
Xxxxx or its successors or assigns with respect to the authorized use of the
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Licensed Program, except as specifically provided herein. Delta shall be free
to charge its clients with respect to use or licensing of the Licensed Program
as Delta may determine to be appropriate, with no royalties being paid to Xxxxx
or its successors.
9. No Warranties. Xxxxx makes no representations or warranties regarding
the performance or utility of the Licensed Program. Xxxxx shall be solely
responsible for the use of the Licensed Program in the Consulting Business, and
for any claims from its customers regarding the Licensed Program, its use or
utility.
10. Actions to Achieve Acceptance in Initial Installation. Xxxxx shall be
entitled to take all actions it determines to be appropriate to modify the
Licensed Program to meet the requirements of the Texas Children's Hospital
("Hospital"), as contemplated by Section 5.1 of the Asset Sale Agreement, and
Delta shall have access to, and the right to use pursuant to the License, all
such modifications to the Licensed Program.
11. Term.
(a) Term. The term of this Agreement and the License granted
hereunder shall commence on the Effective Date and shall continue thereafter,
unless earlier terminated as provided in this Section 11 or elsewhere in this
Agreement.
(b) Termination for Default. Either party may, at its option,
terminate this Agreement and the License granted hereunder if the other party
defaults in the performance of a material obligation hereunder and if such
default has not been corrected within thirty days after receipt of notice
describing such default.
(c) Termination for Other Causes. If either party (i) becomes
involved in any voluntary or involuntary bankruptcy or other insolvency
proceedings, or (ii) ceases to be actively engaged in business, the other party
may, at its option, elect to terminate this Agreement upon written notice to
such party.
12. Covenants of Delta.
(a) Responsibility for Customer Support; Copyright Notices. Delta
shall be responsible for providing all support and maintenance services for all
clients of the Consulting Business, and all users of the Licensed Program,
including the Hospital after the Hospital accepts the installation of the
Licensed Program. Delta will provide all required copyright notices on all
copies of the Licensed Program and related literature, including any copyright
notices reasonably requested by Xxxxx or its successor in interest.
(b) Confidential Treatment. Delta acknowledges that the use of any
information, technology or other items confidential or proprietary to Xxxxx
other than as specifically authorized by this Agreement are prohibited, and
would cause irreparable injury to Xxxxx. Delta agrees to maintain the
confidentiality of all confidential and proprietary information received from
Xxxxx, and not to use or disclose any such information except as specifically
authorized in writing by Xxxxx. The obligations set forth in this paragraph
shall survive the termination of this Agreement.
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(c) Covenant Not to Compete.
(1) Covenant. As a condition and inducement to Xxxxx'x
execution of, and performance of its obligations under, this Agreement and the
Asset Sale Agreement, and for the consideration provided for herein and therein,
Delta hereby agrees that it will not, except as otherwise specifically agreed
from time to time by Xxxxx in writing, directly or indirectly compete, alone or
in association with others, with the business of Xxxxx or any acquirer of the
EDNet and ARCNet businesses (collectively the "Protected Party"), for the period
commencing from the Effective Date of this Agreement and continuing during the
period ending eighteen months after the Effective Date (the "Restrictive
Period").
(2) Definition. The phrase "directly or indirectly compete"
shall mean: engaged in owning, managing, operating, controlling or participating
in the ownership, management, operation or control of, or being connected with
or having any interest in, as an owner, director, officer, employee, agent,
advisor, consultant, sole proprietor or otherwise in any business engaged in
providing any products or services for Prohibited Applications within any of the
Prohibited Markets, in any State of the United States, or in any country or
other jurisdiction in which a Protected Party is then conducting its business.
(3) Acknowledgment Reasonableness of Covenants. Delta
specifically acknowledges and agrees that (i) the nature of the limitations upon
the activities of Delta as provided herein, together with the duration and scope
of such restrictions, are reasonable limitations on their activities, (ii) the
restrictions are required to preserve, promote and protect the business,
accounts, commercial relationships, proprietary information and goodwill of the
Protected Party, and its successors and assigns, and impose no greater restraint
than is reasonably necessary to secure such protection, and (iii) any breach or
threatened breach by Delta of the covenants set forth above would cause
irreparable harm to the Protected Party for which damages at law would be an
inadequate remedy. Delta hereby agrees that in any such instance, and without
proof of actual damage, the Protected Party shall be entitled to specific
performance of the covenants set forth in this Section 12(c) and to seek
injunctive or other equitable relief, in addition to any other remedy to which
such parties may be entitled. Delta hereby waives any requirement of the
Protected Party to post a bond as a condition for any injunctive relief, and the
Protected Party is entitled to damages in such amount as it may prove.
(4) Severability. If any of the provisions of this Section
12(c) is held to be unenforceable, the remaining provisions shall nevertheless
remain enforceable, and the court making such determination shall modify, among
other things, the scope, duration or geographic area of this covenant to
preserve the enforceability hereof to the maximum extent then permitted by law.
The enforceability of this covenant is subject to the injunctive and other
equitable powers of a court of competent jurisdiction.
13. Covenants of Xxxxx.
(a) Limitations on Other Licenses. During the Restrictive Period,
and while Delta is in compliance with its obligations hereunder, Xxxxx shall not
license to any other party any right to utilize the Licensed Program for any of
the Permitted Applications. This restriction will not be construed to limit
Xxxxx'x right to (i) transfer or license any rights with respect to the EDNet or
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ARCNet programs, or (ii) grant or license rights to utilize any software program
for any Prohibited Application in any Prohibited Market.
(b) Grant of Right to IntelliChart Name. Xxxxx grants and conveys to
Delta all rights and interests that Xxxxx may have with respect to the
IntelliChart name, and Xxxxx agrees to execute such additional documentation as
Delta may reasonably request to document such transfer of rights and interests.
(c) Maintenance of Initial Installation. Xxxxx agrees to maintain
the IntelliChart software at the Hospital site until such time as the Hospital
accepts the Licensed Program, consistent with, and to the extent contemplated
by, Xxxxx'x obligations relating thereto as set forth in the Asset Sale
Agreement. In connection therewith, Xxxxx agrees to take the actions reasonably
necessary to correct current deficiencies in the Licensed Program, including
completion of contracted reports, as required to obtain acceptance by the
Hospital, as provided by, in accordance, and to the extent required by, the
provisions of, the Asset Sale Agreement.
14. General Provisions.
(a) Notices All notices to be given under this Agreement shall be in
writing and shall be deemed given (i) five business days following sending by
registered or certified mail, postage prepaid, (ii) when sent if sent by
facsimile; provided, however, that the facsimile is promptly confirmed by
telephone confirmation thereof, (iii) when delivered, if delivered personally to
the intended recipient, and (iv) one business day following sending by overnight
delivery via a national courier service, and in each case, addressed to a party
at the address for such party appearing on the first page of this Agreement, or
such other address or facsimile number as the person to whom notice is given may
have previously furnished to the other in writing in the manner set forth above.
(b) Governing Law. This Agreement shall be governed by and construed
in accordance with the Laws of the State of Utah, without giving effect to the
choice of law principles thereof.
(c) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings with respect to the
subject matter hereof.
(d) Assignment. Delta shall not assign this Agreement or any rights
hereunder without the prior written consent of Xxxxx. Subject to this
restriction, this Agreement shall benefit and bind the successors and assigns of
the parties, and it is expressly acknowledged that Xxxxx may assign any or all
of its rights and obligations hereunder to any acquirer of Xxxxx'x interest in
its EDNet and ARCNet products.
(e) Attorneys' Fees. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs, and disbursements in addition
to any other relief to which such party may be entitled.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the date first above written.
XXXXX:
XXXXX INFORMATION SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxx
Title: President
DELTA:
DELTA HEALTHCARE CONSULTING GROUP, INC.
By: /s/ Xxxxx Xxxxxxxx
----------------------
Name: Xxxxx Xxxxxxxx
Title: President
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