EXHIBIT 10.9
LICENSE AGREEMENT
THIS LICENSE AGREEMENT is entered into as of this 1st day of May, 1997
between RECOVERYNET INTERACTIVE, L.L.C. ("Licensor"), 000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, XX 00000, and MERIT BEHAVORIAL CARE
CORPORATION ("Licensee"), 0 Xxxxxxx Xxxxx, Xxxx Xxxxx, XX 00000.
RECITALS
A. Licensor has developed and will develop various behavioral health care
services and products to be distributed via satellite, computer website,
interactive television, private computer networks and such other means of
distribution as may be mutually agreed upon by Licensor and Licensee (all of
such services and products being hereinafter referred to as the "Licensed
Materials".
B. Licensor and Licensee each desire that the Licensed Materials be
available to Licensee's customers for their use.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS;
1. License: Licensor hereby grants to Licensee a non-exclusive license to
cause the Licensed Materials to be transmitted to Licensee's customers during
the Term and throughout the Territory by such means of distribution as are
specified below. Notwithstanding that the license herein granted is
non-exclusive, Licensor agrees it will not make available the Licensed Materials
to Licensee's competitors listed in Schedule 1 attached hereto and by this
reference made a part hereof; provided, however, that if an entity referred to
in Schedule 1 makes an equity investment in Licensor in an aggregate amount of
not less than two million dollars ($2,000,000) than such entity shall be deemed
deleted from Schedule 1. Licensee agrees to make the Licensed Materials
available to its customers which Licensee determines in its sole discretion are
appropriate for such Licensed Materials, in such form as made available by
Licensor, without alteration except as provided in Paragraph 6 hereof.
2. Term: The term of this License Agreement shall be five (5) years,
commencing on the date hereof ("Term"), provided that Licensor and Licensee may
hereafter agree in writing to end the Term on an earlier termination date.
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3. Territory: The Territory covered by this License Agreement shall be the
world ("Territory").
4. Distribution Media: Licensee may distribute the Licensed Materials to
its customers by means of satellite transmission, computer website, interactive
television, private computer networks, and such other means of distribution as
may be mutually agreed upon by Licensor and Licensee.
5. License Fee Payments and Statements:
a. Licensor and Licensee shall use best efforts to establish mutually
agreed pricing to Licensee's customers for the Licensed Materials. Licensee
shall pay Licensor an amount equal to the gross revenues received by Licensee
from its customers for the use of such Licensed Materials less an amount equal
to one hundred fifteen percent (115%) of Licensee's costs in connection with
such Licensed Materials (unless Licensor and Licensee agree in writing to
another payment method). Licensee's costs shall consist of so-called "conversion
costs" (those related to merchandising of the product and/or service, e.g.,
direct labor and variable overhead (e.g., add-on promotional costs, add-on
marketing costs, travel, office expenses, computer, support personnel and sales
commissions).
b. Payments shall be made and statements rendered by Licensee by the
tenth day of each month for sums received the preceding month. Statements shall
specify the sums received by Licensee and the deductions therefrom in such
detail as may be reasonably required by Licensor. Licensor shall have the right
to audit Licensee's books and records relating to the Licensed Materials at any
time during regular business hours on reasonable notice, but not more than once
per year. Licensor shall have no right to examine Licensee's books and records
not relating solely to the Licensed Materials unless the Licensed Materials are
included with any other product(s) or service(s) in a sale of such other
product(s) or service(s) with such Licensed Materials. If any audit(s) shall
disclose an underpayment to Licensor of ten percent (10%) or more for the period
audited, Licensee shall pay Licensor an amount equal to all costs incurred by
Licensor in connection with such audit(s).
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6. Editorial Control: Licensor shall determine the content of all Licensed
Materials presented to Licensee. However, Licensed Materials as made available
to Licensee's customers shall be subject to Licensee's approval. Licensee shall
consult with Licensor relating to the Licensed Materials and products and
services which may be or are developed by Licensor. Licensee shall provide
Licensor with its written policies and guidelines from time to time in effect.
If any segment(s) of the Licensed Materials are inconsistent with Licensee's
guidelines or policies which have been provided to Licensor then Licensee may
elect to eliminate such segment(s) from the Licensed Materials made available to
Licensee's customers.
7. Branding: All Licensed Materials shall contain Licensor's logo or such
other identifying materials as Licensor shall determine. If Licensee or its
customers shall so request and pay Licensor such sum as may be reasonably
required by Licensor to cover the cost thereof, Licensor shall add identifying
material requested by Licensee and/or its customers which is approved by
Licensor to the Licensed Materials.
8. Promotion: Where Licensee in its sole discretion determines that such
inclusion is appropriate, Licensee shall include the Licensed Materials in its
advertising, marketing and promotion of products and services relating to
behavioral health care offered to its customers. Where appropriate, in
Licensee's sole discretion, the Licensed Materials shall be included in
Licensee's price sheets and in contract proposals to its customers and
prospective customers.
9. Usage Data: Licensor and Licensee shall each make available to the
other, to the extent their respective technical capabilities permit, data
relating to use of the Licensed Materials; provided, however, that the identity
and E-mail addresses of end-users need not be disclosed to Licensor.
10. Representations and Warranties: Except for Licensor's representation
and warranty that the Licensed Materials do not infringe on any copyright of any
third party and Licensee's representations and warranties that it will not add
any material to the Licensed Materials without Licensor's written consent and
that such added materials will not infringe on any copyright of any third party,
neither Licensor nor Licensee makes any representation or warranty, express or
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implied, to the other of any kind or nature whatsoever. Licensor and Licensee
each agree to indemnify and hold the other and their respective officers,
directors, employees, shareholders and representatives harmless from and against
any and all claims, liabilities, damage, cost and expense (including reasonable
attorneys' fees and costs) arising by reason of the breach of any warranty or
representation made by such party hereunder.
11. Breach: If a Licensor or Licensee shall commit a breach or any term or
provision of this License Agreement the other party shall provide the breaching
party with written notice thereof specifying the details of such breach. If a
material breach of this License Agreement is not cured within thirty (30) days
after the breaching party's receipt of such notice, the other party may
terminate this License Agreement at any time thereafter prior to the curing of
such material breach; provided, however, that Licensor may terminate this
License Agreement on account of Licensee's failure to pay any undisputed portion
of the license fee which continues for more than five (5) business days after
Licensor shall have notified Licensee in writing of such failure to pay. In
order to effect the termination right referred to in this Paragraph 11, such
written notification shall expressly reference this Paragraph 11 and that the
failure to pay an undisputed portion of the license fee will result in a
termination right in favor of Licensor.
12. Limitation of Liability: Neither party shall be liable to the other for
any consequential, incidental, special or indirect damages suffered by the other
relating to this License Agreement, it being the parties understanding that
liability shall exist only for actual damages.
13. General Provisions:
a. Governing Law. This Agreement and any disputes arising under, in
connection with, or relating to this Agreement will be governed by the laws of
the State of California, applicable to agreements entered into and to be fully
performed in California.
b. Compliance with Laws. Subject to the express provisions of this
paragraph, each party agrees to comply with applicable law in connection with
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the development and publication of the Licensed Materials, including without
limitation laws concerning obscenity, defamation, infringement, rights of
privacy, harassment and export controls.
c. Assignment. Neither party may assign this License Agreement or any
rights or obligations hereunder to any third party, without the other party's
prior written consent; provided, however, that either party may assign its
rights and obligations hereunder to a third party without the other party's
consent in connection with: (i) any merger or acquisition by such party, (ii)
such party's sale of all or a substantial portion of its assets, or (iii) the
assignment of such rights and obligations to a majority-owned subsidiary of such
party. In the event of such assignment, such party shall be relieved of its
obligations hereunder only to the extent such obligations are performed by the
assignee. Any assignment without consent attempted by either party
notwithstanding the foregoing prohibition will be deemed to be material breach
of this License Agreement.
d. Relationship of Parties. Neither this License Agreement nor the
parties' business relationship established hereunder will be construed as a
partnership, joint venture or agency relationship or as granting a franchise.
The parties warrant to one another that they have consulted legal counsel in
reviewing and/or negotiating this License Agreement and have concluded that no
business plan or franchise fee is conveyed or provided for in this Agreement or
otherwise by the relationship established by this Agreement or by its
performance.
e. Waiver. No waiver of any breach of any provision of this License
Agreement will be considered to be a waiver of any prior, concurrent or later
breach of the same provisions or difference provisions, and will not be
effective unless made in writing and signed by an officer of the waiving party.
f. Amendments. This License Agreement may only be amended by a written
agreement signed by officers of both parties.
g. Notices. Any notice which either party desires or is required to
give the other pursuant to this License Agreement shall be given by United
States mail, postage prepaid, by overnight delivery (such as Federal Express),
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or by facsimile transmission or personal delivery, and shall be deemed effective
when mailed, transmitted (provided the sender receive a confirmation of
receipt), or personally delivered.
h. Entire Agreement. This License Agreement constitutes the entire
understanding of Licensor and Licensee with respect to its subject matter and
supersedes all prior agreements between them and shall be effective when
executed by the parties; provided, however, that if the transaction contemplated
by the February 18, 1997 letter of intent (or a similar transaction) among
Licensor, Licensee, Tele-Communications, Inc. and Recoverynet Television is
consummated then the parties will in good faith renegotiate the terms and
provisions of this License Agreement.
IN WITNESS WHEREOF, the parties have executed this License Agreement as of
the above date.
"Licensor" "Licensee"
RECOVERYNET INTERACTIVE, LLC MERIT BEHAVIORAL CARE CORPORATION
By /s/ By /s/
-------------------------- --------------------------------
Its CEO Its EVP
----------------------- -----------------------------
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SCHEDULE 1
1. Value Behavioral Health, Inc.
2. United Behavioral Health (UBH)
3. Foundation Health PsychCare Services, Inc.
4. Green Spring Health Services, Inc.
5. Human Affairs International, Inc.
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