TRANSITION AGREEMENT
This Transition Agreement (“Agreement”) is entered into as of November 15, 2023 (“Execution Date”), but effective as of the Effective Date (as defined in Section 2 (Condition Precedent to Parties’ Rights and Obligations)), by and between Thrasys, Inc., a California corporation with its principal place of business at 000 Xxxxxxxxx Xxxx Xxxx., Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, XXX (“Supplier”) and Local Initiative Health Authority for Los Angeles County, a local public entity operating and doing business as L.A. Care Health Plan with its principle place of business at 0000 Xxxx 0xx Xxxxxx, Xxx Xxxxxxx, XX 00000, XXX (“Customer”). Supplier and Customer are individually referred to as a “Party” and collectively referred to as the “Parties”.
RECITALS
WHEREAS, the Parties entered into that certain Master Services Agreement, dated June 18, 2019, and, as all appended to and made a part of the Master Services Agreement, Statement of Work No. 1, dated July 3, 2019 (as amended and restated by Xxxxxxx and Restated Statement of Work No. 1, dated July 28, 2020), Statement of Work No. 2, dated August 1, 2022, Statement of Work No. 3, dated May 5, 2023, and Statement of Work No. 5, dated July 1, 2023 (“Statement of Work No. 5”) (collectively, “Prior Agreements”).
WHEREAS, Supplier filed for Chapter 11 bankruptcy on October 20, 2023 and will cease as a going concern on December 31, 2023.
WHEREAS, in connection with Supplier’s bankruptcy, the Parties intend to undertake certain actions that are intended to provide Customer with ongoing use and access to SyntraNet (as defined below) for a specified transition period to give Customer time to enter into its own vendor agreements to support its ongoing use of SyntraNet (the “Business Continuity Plan”).
WHEREAS, in order to adjust to Supplier’s changed circumstances and execute the intentions of the Business Continuity Plan, the Parties desire to terminate the Prior Agreements and supersede Customer’s rights to SyntraNet granted under the Prior Agreements with the rights granted under this Agreement, grant Customer certain rights to the Source Code (as defined below) for SyntraNet, and have Supplier provide Transition Services (as defined below) in consideration for the payments by Customer to be made pursuant to this Agreement.
WHEREAS, in consideration of the aforementioned modifications and additions, Supplier and Customer mutually desire to release each other of all Claims (as defined below) against one another.
NOW THEREFORE, subject to the approval of the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), in consideration of the mutual promises and agreements set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and agreed by the Parties, the Parties agree as follows:
1.DEFINITIONS.
1.1 “Affiliate” means any entity, now or hereafter existing (so long as such entity does not have its own agreement with Supplier for use of SyntraNet) that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the subject entity. For purposes of this definition, “control” means direct or indirect possession of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract or otherwise. An entity shall be considered an “Affiliate” only so long as that entity meets the foregoing definition.
1.2 “Bankruptcy Court” has the meaning set forth in the Recitals.
1.3 “Business Continuity Plan” has the meaning set forth in the Recitals.
1.4 “Claims” has the meaning set forth in Section 5.2(a) (Mutual Release).
1.5 “Derivative Works” has the meaning set forth in Section 3.4 (Ownership of Modifications and Enhancements).
1.6 “Documentation” means the printed, paper, electronic or online user instructions and help files and other documentation made available by Supplier for use with SyntraNet, as may be updated from time to time by Supplier, including all of the foregoing that have been made available under the Prior Agreements or are described on Exhibit A.
1.7 “Hosted Services” has the meaning set forth in the Prior Agreements.
1.8 “Hosted Software” has the meaning set forth in the Prior Agreements.
1.9 “L.A. Care Materials” has the meaning set forth in the Prior Agreements.
1.10 “Object Code” means the machine-readable version of software code for SyntraNet that is the result of compiling the Source Code.
1.11 “Open Source Software” means all software that is available under the GNU Affero General Public License (AGPL), GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), Apache License, BSD licenses, or any other license that approved by the Open Source Initiative (xxx.xxxxxxxxxx.xxx).
1.12 “Outstanding Payments” has the meaning set forth in Section 5.1(c).
1.13 “Prior Agreements” has the meaning set forth in the Recitals.
1.14 “Source Code” means the human-readable version of software code of SyntraNet in the programming language in which SyntraNet was written, together with all related flow charts and technical documentation, including a description of the procedure for generating Object Code.
1.15 “SyntraNet” means the technology platform, applications, solutions, and capabilities, made available to Customer by Supplier under this Agreement and/or the Prior Agreements, including the Hosted Software and other parts of the Hosted Services under the Prior Agreements and all customizations, modifications, and configurations thereof.
1.16 “Taxes” means all taxes, levies, imposts, duties, fines or similar governmental assessments imposed by any jurisdiction, country or any subdivision or authority thereof including, but not limited to federal, state or local sales, use, property, excise, service, transaction, privilege, occupation, gross receipts or similar taxes, in any way connected with this Agreement or any instrument, order form or agreement required hereunder, and all interest, penalties or similar liabilities with respect thereto, except such taxes imposed on or measured by a Party’s net income. Notwithstanding the foregoing, Taxes shall not include payroll taxes attributable to the compensation paid to workers or employees and each Party shall be responsible for its own federal and state payroll tax collection, remittance, reporting and filing obligations.
1.17 “Transition Fees” has the meaning set forth in Section 5.1(b) (Transition Fees).
1.18 “Transition Services” has the meaning set forth in Section 4.1 (Description).
1.19 “Transition Term” has the meaning set forth in Section 10.1 (Transition Term).
1.20 “Users” means Customer’s or its Affiliates’ employees, consultants, contractors, agents and third parties with whom Customer may transact business and (a) who are authorized by Customer or its Affiliates to access and use SyntraNet, and (b) where applicable, who have been supplied user identifications and passwords for such purpose by Customer (or by Supplier at Customer’s request).
2.CONDITION PRECEDENT TO PARTIES’ RIGHTS AND OBLIGATIONS. Both Parties’ respective rights and obligations hereunder shall only become effective on the date the Bankruptcy Court enters an order approving this Agreement (the “Approval Order” and, such date, the “Effective Date”) and shall
automatically become effective on the Effective Date. Both Parties shall make a good faith effort to obtain entry of the Approval Order as soon as is reasonably practicable.
3.RIGHTS AND RESTRICTIONS.
3.1 SyntraNet Rights. Subject to termination in accordance with Section 10.2, Supplier hereby grants to Customer and its Affiliates a non-exclusive, non-transferable, perpetual, royalty-free right and license to access and use (and permit Users to access and use) SyntraNet and Documentation for the purposes permitted for the Hosted Services under the Prior Agreements, subject to the restrictions in Section 3.3 (Restrictions).
3.2 Source Code and Object Code. Subject to termination in accordance with Section 10.2, Supplier hereby grants to Customer a non-exclusive, non-transferable, perpetual, royalty-free right and license to use, reproduce, create Derivative Works of, and modify the Documentation, Source Code and Object Code solely to support Customer’s and its Affiliates’ authorized use of SyntraNet, subject to the restrictions in Section 3.3 (Restrictions).
3.3 Restrictions. Customer shall not, directly or indirectly, and Customer shall not authorize any User or other third party to: (a) rent, lease, distribute, sell, resell, assign, or otherwise transfer its rights to use SyntraNet or the Source Code (but for clarity this does not limit Customer’s and its Affiliates’ rights to permit Users to access and use SyntraNet); (b) remove any proprietary notices from the Source Code, Object Code and Documentation; (c) use the SyntraNet for any purpose other than its intended purpose; or (d) introduce any Open Source Software into the SyntraNet in a manner that would require public disclosure of Source Code.
3.4 Ownership of Modifications and Enhancements. Customer shall own all right, title, and interest in and to any Derivative Works (as defined herein) constituting a separate and independent module of SyntraNet and which was developed by or commissioned from an independent contractor by Customer. “Derivative Works” shall mean modifications and enhancements that are based upon SyntraNet as licensed from Supplier, subject to Supplier’s ownership of SyntraNet.
3.5 Reservation of Rights. Except as expressly granted in this Agreement, there are no other licenses granted to Customer, express, implied or by way of estoppel. All rights not granted in this Agreement are reserved by Supplier.
3.6 Delivery. Promptly after the Effective Date, Supplier shall deliver to Customer (a) all L.A. Care Materials; and (b) all Documentation, Source Code, and Object Code, in each case in electronic form usable with and in SyntraNet, and in each case as may be further described in Exhibit A.
4.TRANSITION SERVICES.
4.1 Description. Supplier shall provide the services outlined in Exhibit A (“Transition Services”) to facilitate Customer’s and its Affiliates’ usage of SyntraNet and transition of SyntraNet operations to Customer, during the Transition Term (as defined in Section 10.1).
4.2 Acknowledgement. Customer understands that the Transition Services provided by Supplier under this Agreement are not sufficient for Customer to independently operate SyntraNet. Customer must contract with additional vendors to continue operating, using and making available SyntraNet for Customer’s use. Supplier has no liability for Customer’s ability or inability to procure services from any such vendors.
4.3 SOW 5. Notwithstanding termination of the Prior Agreements under Section 10.1 (Term of Transition Services), during the Transition Term (as defined in Section 10.1 (Term of Transition Services)), Supplier shall continue to perform its obligations under Statement of Work No. 5, and the terms and conditions of the Prior Agreements will survive and remain in effect with respect to Supplier’s performance during the Transition Term of Statement of Work No. 5.
5. FEES AND PAYMENT; MUTUAL RELEASE OF CLAIMS.
5.1 Fees.
(a) License Fee. In partial consideration of the rights granted in this Agreement with respect to SyntraNet, Customer shall pay Supplier one U.S. dollar ($1.00).
(b) Transition Fees. In consideration of the Transition Services that Supplier will provide under this Agreement during the Transition Term, Customer shall pay Supplier in accordance with Exhibit A (“Transition Fees”). Payment for the Transition Fees shall be due on the dates and according to the terms of Section 3.1 of Exhibit A.
(c) Outstanding Payment Obligations under Prior Agreements. For the avoidance of doubt, the amounts set forth in this Section 5.1 and Table 3.1 of Exhibit A are the only amounts that are or will be payable by Customer or any of its Affiliates under this Agreement or under the Prior Agreements, and all other payment obligations are hereby waived on behalf of Supplier and its Affiliates. Notwithstanding Section 5.2 (Mutual Release), Customer remains obligated to pay Supplier under Statement of Work No. 5 for November 2023, December 2023, and January 2024, collectively totaling one million two hundred fifty thousand U.S. dollars ($1,250,000.00), in each case subject to Supplier’s continued performance in accordance with Statement of Work No. 5 and the Prior Agreements (such payments referred to as, “Outstanding Payments”). Such payments shall be made according to the terms of the Prior Agreements.
(d) Taxes. Customer shall pay all Taxes associated with the Transition Fees and the Outstanding Payments.
5.2 Mutual Release.
(a) With the exception of the Outstanding Payments, the Transition Fees, and the Parties respective obligations hereunder, and in consideration of the covenants, agreements, and undertakings of the Parties under this Agreement, upon the Effective Date, each Party, on behalf of itself and its respective present and former parents, subsidiaries, Affiliates, officers, directors, shareholders, managers, members, successors, and assigns (collectively, “Releasors”) hereby releases, waives, and forever discharges the other Party and its respective present and former, direct and indirect, parents, subsidiaries, Affiliates, employees, officers, directors, shareholders, managers, members, agents, representatives, permitted successors, and permitted assigns (collectively, “Releasees”) of and from any and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands, of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty, or equity (collectively, “Claims”), which any of such Releasors ever had, now have, or hereafter can, shall, or may have against any of such Releasees for, upon, or by reason of any matter, cause, or thing whatsoever from the beginning of time through the Effective Date, arising out of or relating to the Prior Agreements, except for any surviving obligations under the Prior Agreements and Claims relating to rights and obligations preserved by, created by, or otherwise arising out of this Agreement.
(b) California Civil Code Section 1542 Notice and Waiver. Each Releasor understands that it may later discover Claims or facts that may be different from, or in addition to, those that it or any other Releasor now knows or believes to exist regarding the subject matter of the release contained in this Section 5, and which, if known at the time of signing this Agreement, may have materially affected this Agreement and such Party’s decision to enter into it and grant the release contained in this Section 5. Nevertheless, the Releasors intend to fully, finally, and forever settle and release all Claims that now exist, may exist, or previously existed, as set out in the release contained in this Section 5, whether known or unknown, foreseen or unforeseen, or suspected or unsuspected, and the release given herein is and will remain in effect as a complete release, notwithstanding the discovery or existence of such additional or different facts. The Releasors hereby waive any right or Claim that might arise as a result of such different
or additional Claims or facts. The Releasors have been made aware of, and understand, the provisions of California Civil Code Section 1542 (“Section 1542”), which provides: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.” The Releasors expressly, knowingly, and intentionally waive any and all rights, benefits, and protections of Section 1542 and of any other state or federal statute or common law principle limiting the scope of a general release.
6. TRANSITION OF RELEVANT SUPPLIER EMPLOYEES. Supplier will use commercially reasonable efforts to identify its personnel who currently support SyntraNet for Customer. Customer may make offers of employment to these identified personnel and any other personnel who have been involved in provision of SyntraNet or related services for Customer on terms as Customer determines in its sole discretion, but Supplier makes no commitment to Customer that any personnel will accept any offers of employment. Customer has no remedy against Supplier if any such employee does not accept any offers of employment made by Customer. Notwithstanding the foregoing, to the extent permitted by applicable law and any obligations of confidentiality that Supplier owes to any such personnel, Supplier may provide Customer with reasonably requested information regarding salary and benefits for any such identified personnel. For avoidance of doubt, Supplier has no liability for any actions or inactions taken by any personnel in connection with interviewing with or becoming employed by Xxxxxxxx, whether or not Customer elects to hire them. Customer’s hiring of any personnel is at Customer’s own risk and Supplier makes no representations or warranties about the qualifications, experience or suitability of any personnel. Supplier, on behalf of itself and its Affiliates, hereby irrevocably waives any restrictions in agreements or policies in place with any such personnel that would limit or restrict their right or ability to work for Customer, including in connection with the Source Code or Object Code.
7. REPRESENTATIONS AND WARRANTIES; DISCLAIMER.
7.1 Mutual Representations and Warranties. Subject to the Bankruptcy Court’s entry of the Approval Order, each Party represents and warrants to the other Party that:
(a) It has the full right, power, and authority to enter into this Agreement, to grant the release contained herein and to perform its obligations hereunder and grant the licenses it grants hereunder, and in the case of Supplier it is the sole legal and beneficial owner of SyntraNet and the Documentation, Source Code, and Object Code and all rights therein.
(b) The execution of this Agreement by the individual whose signature is set out at the end of this Agreement on behalf of such Party, and the delivery of this Agreement by such Party, have been duly authorized by all necessary corporate action on the part of such Party.
(c) This Agreement has been executed and delivered by such Party and (assuming due authorization, execution, and delivery by the other Party hereto) constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, except as may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws and equitable principles related to or affecting creditors’ rights generally or the effect of general principles of equity.
(d) It (i) knows of no Claims against the other Party relating to or arising out of the Agreement that are not covered by the release contained in Section 5.2 (Mutual Release) and (ii) has neither assigned nor transferred any of the Claims released herein to any person or entity and no person or entity has subrogated to or has any interest or rights in any Claims.
7.2 No Reliance. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN THE PRIOR AGREEMENTS AND IN THIS SECTION 7 OF THIS AGREEMENT, (A) NEITHER PARTY HERETO NOR ANY PERSON ON SUCH PARTY’S BEHALF HAS MADE OR MAKES ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WHATSOEVER, EITHER ORAL OR WRITTEN, WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE
OF PERFORMANCE, USAGE OF TRADE, OR OTHERWISE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED, AND (B) EACH PARTY HERETO ACKNOWLEDGES THAT, IN ENTERING INTO THIS RELEASE AGREEMENT, IT HAS NOT RELIED UPON ANY REPRESENTATION OR WARRANTY MADE BY THE OTHER PARTY, OR ANY OTHER PERSON ON SUCH OTHER PARTY’S BEHALF, EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 7.
7.3 Disclaimer of Warranties. EXCEPT AS SPECIFIED THIS SECTION 7, SYNTRANET, SOURCE CODE, OBJECT CODE AND DOCUMENTATION ARE PROVIDED ON AN “AS IS” BASIS. CUSTOMER’S USE OF SYNTRANET, SOURCE CODE, OBJECT CODE AND DOCUMENTATION IS AT ITS OWN RISK. SUPPLIER DOES NOT MAKE, AND HEREBY DISCLAIMS, ANY AND ALL OTHER EXPRESS, STATUTORY AND IMPLIED REPRESENTATIONS AND WARRANTIES, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT AND TITLE, QUALITY, SUITABILITY, OPERABILITY, CONDITION, SYSTEM INTEGRATION, NON-INTERFERENCE, WORKMANSHIP, TRUTH, ACCURACY (OF DATA OR ANY OTHER INFORMATION OR CONTENT), ABSENCE OF DEFECTS, WHETHER LATENT OR PATENT, AND ANY WARRANTIES ARISING FROM A COURSE OF DEALING, USAGE, OR TRADE PRACTICE. ANY SOFTWARE PROVIDED BY SUPPLIER PURSUANT TO THIS AGREEMENT IS LICENSED AND NOT SOLD.
NO AGENT OF SUPPLIER IS AUTHORIZED TO ALTER OR EXPAND THE WARRANTIES OF SUPPLIER AS SET FORTH HEREIN. SUPPLIER DOES NOT WARRANT THAT: (A) THE USE OF SYNTRANET, SOURCE CODE, OBJECT CODE OR DOCUMENTATION WILL BE SECURE, TIMELY, UNINTERRUPTED OR ERROR-FREE OR OPERATE IN COMBINATION WITH ANY OTHER HARDWARE, SOFTWARE, SYSTEM OR DATA; (B) SYNTRANET, SOURCE CODE, OBJECT CODE AND DOCUMENTATION WILL MEET CUSTOMER’S REQUIREMENTS OR EXPECTATIONS; OR (C) SYNTRANET, SOURCE CODE, OBJECT CODE AND DOCUMENTATION WILL BE ERROR-FREE OR THAT ERRORS OR DEFECTS WILL BE CORRECTED.
8. CONFIDENTIALITY.
8.1 Confidential Information. “Confidential Information” means any and all non-public technical and non-technical information disclosed by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) in any form or medium, whether oral, written, graphical or electronic, pursuant to this Agreement, that is marked confidential and proprietary, or that the Disclosing Party identifies as confidential and proprietary, or that by the nature of the circumstances surrounding the disclosure or receipt ought to be treated as confidential and proprietary information, including but not limited to: (a) techniques, sketches, drawings, models, inventions (whether or not patented or patentable), know-how, processes, apparatus, formulae, equipment, algorithms, software programs, software source documents, APIs, and other creative works (whether or not copyrighted or copyrightable); (b) information concerning research, experimental work, development, design details and specifications, engineering, financial information, procurement requirements, purchasing, manufacturing, customer lists, business forecasts, sales and merchandising and marketing plans and information; and (c) proprietary or confidential information of any third party who may disclose such information to Disclosing Party or Receiving Party in the course of Disclosing Party’s business. Confidential Information of Supplier shall include SyntraNet and the Documentation. Confidential Information also includes all summaries and abstracts of Confidential Information.
8.2 Non-Disclosure. Each Party acknowledges that in the course of the performance of this Agreement, it may obtain the Confidential Information of the other Party. The Receiving Party shall, at all times, both during the term of this Agreement and thereafter, keep in confidence and trust all of the Disclosing Party’s Confidential Information received by it. The Receiving Party shall not use the Confidential Information of the Disclosing Party other than as necessary to fulfill the Receiving Party’s obligations or to exercise the Receiving Party’s rights under this Agreement. Each Party agrees to secure and protect the other Party’s Confidential Information with the same degree of care and in a manner consistent with the maintenance of such Party’s own Confidential Information (but in no event less than reasonable care), and to take appropriate action by instruction or agreement with its employees, Affiliates or other agents who are permitted access to the other Party’s Confidential Information to satisfy its
obligations under this Section. The Receiving Party shall not disclose Confidential Information of the Disclosing Party to any person or entity other than its and its Affiliates’ officers, employees, contractors, and agents (and in the case of Customer, Users) who need access to such Confidential Information in order to effect the intent of this Agreement and who are subject to confidentiality obligations at least as stringent as the obligations set forth in this Agreement.
8.3 Strict Confidentiality with Respect to Source Code. Customer agrees that the Source Code licensed herein is the property of and a trade secret of Supplier and is furnished hereunder on a strictly confidential basis. Customer agrees not to reveal the Source Code to any person or entity except as on a need-to-know basis, nor shall Customer reveal to any other person or entity directly or through its employees any information relating to the Source Code, the programming therein, or the algorithms thereof except as on a need-to-know basis. Customer shall treat the Source Code with at least the same degree of care and confidentiality as Customer treats its own trade secrets but in any event no less than the requirements of this Section 8, as well as industry standard reasonable care for similar trade secrets. Customer agrees that it is fully responsible, in accordance with applicable law, for the actions of each of its employees and agents with respect to the Source Code while they are employed by Customer. Customer may disclose the Source Code to its and its Affiliates’ officers, employees, consultants, contractors, and agents, but shall not disclose the Source Code to any of them unless they are subject to confidentiality obligations at least as stringent as the obligations set forth in this Agreement. Customer’s breach of this Section 8.3 shall constitute a material breach. Notwithstanding anything to the contrary, Customer is not responsible for acts or omissions of individuals who were employed by Supplier or any of its Affiliates before becoming employees of Customer, with respect to Source Code in the possession of such individuals prior to their becoming employed by Customer.
8.4 Exceptions to Confidential Information. The obligations set forth in Section 8.2 (Non-Disclosure) and Section 8.3 (Strict Confidentiality with Respect to Source Code) shall not apply to the extent that Confidential Information (including Source Code) includes information which: (a) was known by the Receiving Party prior to receipt from the Disclosing Party either itself or through receipt directly or indirectly from a source other than one having an obligation of confidentiality to the Disclosing Party; (b) was developed by the Receiving Party without use of the Disclosing Party’s Confidential Information; (c) becomes publicly known or otherwise ceases to be secret or confidential, except as a result of a breach of this Agreement or any obligation of confidentiality by the Receiving Party; or (d) is a public record, not exempt from disclosure pursuant to the California Public Records Act, Government Code Section 6250 et seq., applicable provisions of California Welfare and Institutions Code or other State or Federal laws, regardless of whether such information is marked as confidential or proprietary. Nothing in this Agreement shall prevent the Receiving Party from disclosing Confidential Information to the extent the Receiving Party is legally compelled to do so by any governmental investigative or judicial agency pursuant to proceedings over which such agency has jurisdiction; provided, however, that prior to any such disclosure, the Receiving Party shall (x) assert the confidential nature of the Confidential Information to the agency; (y) to the extent permitted, immediately notify the Disclosing Party in writing of the agency’s order or request to disclose; and (z) cooperate reasonably with the Disclosing Party in protecting against any such disclosure and in obtaining a protective order narrowing the scope of the compelled disclosure and protecting its confidentiality. Notwithstanding anything to the contrary, Customer may disclose Confidential Information (including Source Code) to third-party commercial suppliers and vendors (e.g., Microsoft) for purposes of those suppliers’ and vendors’ products and services provided to Customer and its Affiliates, subject to those suppliers’ and vendors’ standard terms and conditions. Notwithstanding anything in this Agreement to the contrary, the Parties understand that this Agreement will be filed as a public document with the Bankruptcy Court.
8.5 Injunctive Relief. The Parties agree that any unauthorized disclosure of Confidential Information or the Source Code may cause immediate and irreparable injury to the Disclosing Party and that, in the event of such breach, the Disclosing Party will be entitled, in addition to any other available remedies, to seek immediate injunctive and other equitable relief, without bond and without the necessity of showing actual monetary damages.
9. LIMITATION OF LIABILITY.
9.1 No Consequential Damages. NEITHER CUSTOMER NOR SUPPLIER NOR ITS LICENSORS OR SUPPLIERS SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, OR ANY DAMAGES FOR LOST DATA, BUSINESS INTERRUPTION, LOST PROFITS, LOST REVENUE OR LOST BUSINESS, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF CUSTOMER, SUPPLIER OR ITS LICENSORS OR SUPPLIERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, INCLUDING WITHOUT LIMITATION, ANY SUCH DAMAGES ARISING OUT OF THE LICENSING, PROVISION OR USE OF THE SERVICES, TRANSITION SERVICES OR THE RESULTS THEREOF. SUPPLIER WILL NOT BE LIABLE FOR THE COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES. SUPPLIER WILL NOT BE LIABLE FOR THE COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES.
9.2 Limitation of Liability. NEITHER CUSTOMER NOR SUPPLIER NOR ITS LICENSORS OR SUPPLIERS SHALL BE LIABLE FOR CUMULATIVE, AGGREGATE DAMAGES GREATER THAN AN AMOUNT EQUAL TO THE TRANSITION FEES. FOR THE AVOIDANCE OF DOUBT, THE OUTSTANDING PAYMENTS ARE NOT TRANSITION FEES, AND THE OUTSTANDING PAYMENTS ARE NOT INCLUDED IN THIS LIMITATION OF LIABILITY CALCULATION.
9.3 Exceptions. THE EXCLUSIONS AND LIMITATIONS IN SECTIONS 9.1 (NO CONSEQUENTIAL DAMAGES) AND 9.2 (LIMITATION OF LIABILITY) SHALL NOT APPLY TO LIMIT DAMAGES ARISING OUT OF (i) EITHER PARTY’S INFRINGEMENT, VIOLATION OR MISAPPROPRIATION OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS, (ii) CUSTOMER’S BREACH OF SECTION 3.3 (RESTRICTIONS), (iii) EITHER PARTY’S BREACH OF SECTION 7.1 OR SECTION 8 (CONFIDENTIALITY), OR (iv) CUSTOMER’S OBLIGATIONS TO PAY OUTSTANDING AMOUNTS OR TRANSITION FEES HEREUNDER.
9.4 Essential Purpose. EACH PARTY ACKNOWLEDGES THAT THE TERMS IN THIS SECTION 9 (LIMITATION OF LIABILITY) SHALL APPLY TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW AND SHALL APPLY EVEN IF AN EXCLUSIVE OR LIMITED REMEDY STATED HEREIN FAILS OF ITS ESSENTIAL PURPOSE AND WITHOUT REGARD TO WHETHER SUCH CLAIM IS BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), INDEMNITY, PRODUCT LIABILITY OR OTHERWISE.
10. TERM.
10.1 Term of Transition Services. The Transition Services will commence pursuant to this Agreement effective upon the approval of the Bankruptcy Court and will continue until December 28, 2023 (“Transition Term”). Supplier shall have no obligation, whether under this Agreement or the Prior Agreements, to provide Customer with any services, including but not limited to any Transition Services or support and maintenance services, following expiration of the Transition Term. The Prior Agreements will terminate and be of no force or effect as of the Effective Date of this Agreement, except as to definitions that are incorporated herein by reference and the Outstanding Payments, except as otherwise provided in this Agreement, and except for provisions that are stated to survive termination, and each Party shall comply with such surviving provisions. For clarity, the licenses granted under this Agreement will continue after the Transition Term and will not terminate except as specified in Section 10.2.
10.2 Breach. Subject to Section 9 (Limitation of Liability), in the event of a material breach of Section 3.3 (Restrictions), 5.1 (Fees) or 8 (Confidentiality) this Agreement by Customer, if Supplier notifies Customer of that material breach and Customer fails to cure that material breach within thirty (30) days after receipt of that notice, then Supplier may terminate this Agreement upon written notice to Customer. Notwithstanding the foregoing, if Customer materially breaches its obligations under this Agreement to maintain the confidentiality of the Source Code and such breach is not objectively capable of cure, then Supplier may terminate this Agreement immediately upon written notice to Customer. In no event shall any termination by Supplier in accordance with this Section 10.2 relieve Customer of the obligation to pay any fees payable to Supplier under this Agreement.
10.3 Effects of Termination. Upon termination of this Agreement, (a) all fees and other amounts owed to Supplier shall be immediately due and payable by Customer; and (b) in the case of a termination
by Supplier in accordance with Section 10.2 due to Customer’s material breach, Customer’s rights under Section 3 (Rights and Restrictions) shall terminate and Customer shall return to Supplier, or at Supplier’s option, Customer shall destroy Customer’s copy of the Source Code and Object Code within twenty (20) days of the effective date of termination. Upon Supplier’s request following termination by Supplier in accordance with Section 10.2, Customer shall certify in writing to Supplier that it has complied with Section 10.3(b). Within twenty (20) days of the effective date of termination by Supplier in accordance with Section 10.2, each Receiving Party shall: (a) return to the Disclosing Party, or at the Disclosing Party’s option, the Receiving Party shall destroy, all items of Confidential Information then in the Receiving Party’s possession or control, including any copies, extracts or portions thereof, and (b) upon request shall certify in writing to Disclosing Party that it has complied with the foregoing.
10.4 Survival. This Section and Sections 1 (Definitions), 3.3 (Restrictions), 3.4 (Ownership of Modifications and Enhancements), 3.5 (Reservation of Rights), 5 (Fees; Mutual Release of Claims), 7 (Representations and Warranties; Disclaimer), 8 (Confidentiality), 9 (Limitation of Liability), 10.3 (Effects of Termination) and 11 (Miscellaneous) shall survive any termination or expiration of this Agreement. The licenses granted under this Agreement will not terminate or expire except as specified in Section 10.2.
11. MISCELLANEOUS.
11.1 Notices. All notices which a Party may be required or may wish to give may be given by addressing them to the other Party at the addresses set forth below (or at such other addresses as may be designated by written notices given in the manner designated herein) by (a) personal delivery, (b) sending such notices by commercial overnight courier with written verification of actual receipt, (c) by email, effective (A) when the sender receives an automated message from the recipient confirming delivery or (B) one hour after the time sent (as recorded on the device from which the sender sent the email) unless the sender receives an automated message that the email has not been delivered, whichever happens first, but if the delivery or receipt is on a day which is not a business day or is after 5:00 pm (addressee’s time) it is deemed to be received at 9:00 am on the following business day, or (d) sending them by registered or certified mail. If so mailed or otherwise delivered, such notices shall be deemed and presumed to have been given on the earlier of the date of actual receipt or three (3) days after mailing or authorized form of delivery. All communications and notices to be made or given pursuant to this Agreement shall be in the English language.
11.2 Governing Law, Dispute Resolution. This Agreement and the rights and obligations of the Parties to and under this Agreement shall be governed by and construed under the laws of the United States (including federal bankruptcy law, to the extent applicable) and the State of California as applied to agreements entered into and to be performed in such State without giving effect to conflicts of laws rules or principles. Any Claims and disputes arising out of or relating to this Agreement shall be brought in the Bankruptcy Court, and each of the Parties irrevocably submits to the exclusive jurisdiction of each such court in any such Claims and disputes, waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all Claims and disputes shall be heard and determined only in any such court, and agrees not to bring any Claims or disputes arising out of or relating to this Agreement in any other court. Each Party acknowledges and agrees that this Section 11.2 constitutes a voluntary and bargained-for agreement between the Parties.
11.3 Waiver. No term or provision of this Agreement shall be considered waived by either Party, and no breach excused by either Party, unless such waiver or consent is in writing signed on behalf of the Party against whom the waiver is asserted. No consent by either Party to, or waiver of, a breach by either Party, whether express or implied, shall constitute consent to, waiver of, or excuse of any other, different, or subsequent breach by either Party.
11.4 No Third-Party Beneficiaries. No person or entity other than Customer and its Affiliates and Supplier (and their respective successors and permitted assignees) shall be deemed an intended beneficiary hereunder or have any right to enforce any obligation of this Agreement.
11.5 Severability. If any provision of this Agreement is held invalid or unenforceable for any reason, the remainder of the provision shall be amended to achieve as closely as possible the economic effect of the original term and all other provisions shall continue in full force and effect.
11.6 Assignment. Neither Party may assign its rights or (except as otherwise permitted hereunder) delegate its obligations under this Agreement to any third party, whether voluntarily or by operation of law or otherwise (including in connection with any merger or acquisition involving such Party), without the prior written consent of the other Party, such consent not to be unreasonably withheld. This prohibition includes, but is not limited to, any assumption and assignment of this Agreement under Section 365 of the Bankruptcy Code and any sale of any of Supplier’s rights or interests in this Agreement (including any amounts paid or payable hereunder or the right to receive such amounts) under Section 363 of the Bankruptcy Code. Any purported assignment or transfer in violation of this section shall be void. Subject to the foregoing restrictions, this Agreement will bind and benefit the Parties and their successors and permitted assigns. If Supplier assigns or transfers any of SyntraNet, the Documentation, the Object Code, or the Source Code or any rights therein, Supplier shall ensure that the receiving party takes each of the foregoing subject to the licenses granted in this Agreement.
11.7 Relationship of the Parties. Supplier is an independent contractor to Customer. There is no relationship of agency, partnership, joint venture, employment, or franchise between the Parties. Neither Party has the authority to bind the other or to incur any obligation on its behalf.
11.8 Attorneys’ Fees. In any action to enforce this Agreement, the prevailing Party shall be awarded all court costs and reasonable attorneys’ fees incurred, including such costs and attorneys’ fees incurred in enforcing and collecting any judgment.
11.9 Force Majeure. Except for Customer’s payment obligations, neither Party shall be liable for any failure or delay in performance under this Agreement due to fire, explosion, earthquake, storm, flood or other weather; unavailability of necessary utilities or raw materials; Internet service provider failures or delays, or denial of service attacks; war, civil unrest, acts of terror, insurrection, riot, acts of God or the public enemy; epidemic or pandemic; strikes or other labor problems; any law, act, order, proclamation, decree, regulation, ordinance, or instructions of government or other public authorities, or judgment or decree of a court of competent jurisdiction (not arising out of breach by such Party of this Agreement); or any other event beyond the reasonable control of the Party whose performance is to be excused.
11.10 Execution in Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures provided by facsimile transmission, electronic transmission, such as Docusign, or in Adobe™ Portable Document Format (.pdf) sent by electronic mail shall be deemed to be original signatures.
11.11 Equal Representation by Counsel. Customer represents and acknowledges that it has been represented by legal counsel of its choosing in connection with this Agreement and further agrees that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, Xxxxxxxx agrees that no presumption will apply against Supplier no matter that Supplier drafted such terms and provisions in the first instance.
11.12 Bankruptcy Provisions.
(a) Postpetition Agreement. For the avoidance of doubt, the Parties agree and acknowledge that this Agreement is a postpetition agreement that is not subject to assumption or rejection in Supplier’s bankruptcy case. Any liabilities Supplier may incur under this Agreement shall be treated as administrative priority claims under the United States Bankruptcy Code (the “Bankruptcy Code”).
(b) Right to Retain Licenses. For avoidance of doubt, all rights and licenses granted under or pursuant to this Agreement and the Prior Agreements are, for purposes of Section 365(n) of the Bankruptcy Code, and any equivalent provision under any other applicable law, licenses of rights to “intellectual property” as defined under Section 101 of the Bankruptcy Code (or any such other applicable law) and the obligations set out in this Agreement are “supplemental to” such licenses. Supplier acknowledges that if, in any subsequent bankruptcy case, Supplier or any of its Affiliates, as a debtor in possession, or a trustee in bankruptcy in a case under the Bankruptcy Code (the “Bankruptcy Trustee”) rejects this Agreement, (i) Customer may elect to retain its rights under this Agreement and as provided in Section 365(n) of the Bankruptcy Code and (ii) the mere failure by Customer to assert the retention of its
rights under Section 365(n) of the Bankruptcy Code is not a termination of this Agreement without an affirmative act by Customer. Upon the written request of Customer to Supplier or the Bankruptcy Trustee, Supplier and its Affiliates, or such Bankruptcy Trustee, shall not interfere with the rights of Customer as provided in this Agreement.
11.13 Construction. The section headings in this Agreement are for convenience of reference only, will not be deemed to be a part of this Agreement, and will not be referred to in connection with the construction or interpretation of this Agreement. As used in this Agreement, the words “include” and “including” and variations thereof will not be deemed to be terms of limitation, but rather will be deemed to be followed by the words “without limitation.” The word “or” is not exclusive. Except as otherwise expressly indicated, all references in this Agreement to “Sections” are intended to refer to Sections of this Agreement.
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IN WITNESS WHEREOF, the Parties have signed this Agreement as of the Execution Date hereof.
“Supplier” “Customer”
Thrasys, Inc. Local Initiative Health Authority for Los
Angeles County, d/b/a L.A. Care Health Plan
By: /s/ Xxxxxx X.X. Xxxx By: /s/ Xxxx Xxxxxxx
Title: CEO Title: CEO
Exhibit A: Services and Fees
This Exhibit A defines the scope and fees for the Transition Services to be provided during the Transition Term to enable the Customer to operate, maintain, and enhance SyntraNet during the Transition Term and thereafter.
1.TERM OF TRANSITION SERVICES.
1.1 Supplier shall perform Transition Services for the Transition Term.
2.SCOPE OF TRANSITION SERVICES.
1.2 Transition Services. Supplier shall:
(a) Migrate SyntraNet to a Customer-owned instance of Microsoft Azure, provided that Customer has secured such Customer-owned instance with an adequate period of time prior to the end of the Transition Term in order for Supplier to migrate SyntraNet from Supplier’s instance of Microsoft Azure to Customer’s instance of Microsoft Azure;
(b) Migrate all Customer data (including all L.A. Care Materials) to Customer-owned instance of Azure including the Postgres database to support all environments, production, staging, QA, and development; deliver relevant data dictionaries depicting the data model to Customer; ensure data replication process is intact and operational;
(c) Setup a development environment (including CI/CD code) that allows the Customer to develop enhancements and deploy them to the various environments (development, quality assurance, staging, and production);
(d) Provide relevant Documentation of SyntraNet architecture and operations, including disaster recovery procedures; and
(e) Upon conclusion of migration provide evidence that all Customer PHI was removed from all Supplier databases and storage devices.
2.2 Necessary Services Outside of Scope of these Transition Services. Customer understands that, in addition to the Transition Services provided in 2.1 of this Exhibit A, Customer will need to procure certain services from other third-party vendors in order to use SyntraNet on and after December 28, 2023. Supplier shall supply a list of these other necessary third-party vendors to Customer, but Supplier shall not be liable for Customer’s inability to use SyntraNet if such inability is due to Customer’s failure to obtain the necessary services from these third-party vendors, despite Supplier’s provision of the aforementioned list.
2.3 Certain Documentation. Any and all Documentation, work product, notes, technical information, and other materials related to SyntraNet that are provided by or in the possession of Supplier personnel who become employed or engaged by Customer are included in the Documentation licensed under this Agreement.
3.FEES AND PAYMENTS
3.1 Subject to the terms of Section 5.1(b) of the Agreement, Customer shall pay Supplier a total of one million nine hundred fifty thousand U.S. dollars ($1,950,000) for the Transition Services, paid in three separate installment amounts, to be invoiced by Supplier on the dates outlined in Table 3.1 (Transition Services Payment Schedule). For all dates, Customer shall pay each installment amount within seven (7) days of receipt of Supplier’s invoice.
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| Table 3.1: Transition Services Payment Schedule | |||||
| Installment amount | Invoice Date (the later of the following) | ||||
| $ 1,365,000.00 | December 1, 2023, or the Effective Date | ||||
| $ 292,500.00 | December 15, 2023, or the Effective Date | ||||
| $ 292,500.00 | December 18, 2023, or the Effective Date | ||||
