1
EXHIBIT 10.20
We have omitted certain portions of this document and filed them separately
with the Commission. These portions are marked with an asterisk (*).
SOFTWARE LICENSING AND DISTRIBUTION AGREEMENT
This Software Licensing and Distribution Agreement ("Agreement") is
made by and between HealthStream, Inc., a Tennessee corporation having its
principal place of business at 000 00xx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxx 00000 ("HealthStream") and Pointshare having its principal place of
business at 0000 000xx Xxx. XX, Xxxxx 000, Xxxxxxxx, XX 00000 ("Distributor").
BACKGROUND
WHEREAS, Distributor delivers Internet healthcare services targeted at
the healthcare community and consumers among others;
WHEREAS, HealthStream has developed and marketed and continues to
develop and market a computer-based education system known as the Training
Navigator(TM) ("T.NAV(R)") that delivers and monitors World Wide Web based
content;
WHEREAS, Distributor and HealthStream wish to enter into a cooperative
effort to 1) deploy HealthStream branded educational offerings utilizing
T.NAV(R) technology and Distributor's distribution channels; 2) market the goods
and services incorporated therein; and 3) sell course sponsorships;
WHEREAS, Distributor wishes to acquire a license and HealthStream has
agreed to grant a license to Distributor for the utilization of T.NAV(R)
iCommerce with Distributor's Internet healthcare services;
WHEREAS, Distributor and HealthStream wish to provide appropriate
consideration for those efforts that each party has agreed to undertake;
WHEREAS, Distributor and HealthStream each acknowledge the sufficiency
and adequacy of the value, concessions, and recitations set forth herein;
NOW THEREFORE, Distributor and HealthStream agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the terms below shall have the following
meanings:
1.1. "Distributor" means Pointshare and any affiliated entity of
Distributor.
1.2. "Course" means healthcare related Internet based curricula designed to
be delivered by T.NAV(R).
1.3. "Effective Date" means July 12, 1999, the date on which both parties to
this Agreement have executed same.
1.4. "Sponsorship Revenue" means payments by third party organizations to
provide courses free to Pointshare users.
1.5. "HealthStream Courses" means interactive courses that are the
proprietary property of HealthStream including training and education
content, including, but not limited to, OSHA and JCAHO mandated
training, continuing medical education, and office training.
1.6. "Internet" means the international network of computers and computer
networks accessible by the public at large of which the World Wide Web
is a subset.
1.7. "Intranet" means an internal network protected from unauthorized users
by a firewall and accessible only by individuals within the
organization serving the network.
1.8. "HealthStream" means HealthStream, Inc. and any Subsidiary of
HealthStream, Inc.
1.9. "Net Revenue" means gross revenue derived by Distributor or
HealthStream from Transactions Fees less discounts, rebates, and/or
refunds.
Distributor and HealthStream Media
Page 1 of 9
2
1.10. "Subsidiary" means a company in which, on a class-by-class basis, more
than fifty percent (50%) of the stock entitled to vote for the election
of directors is owned or controlled by another company, but only so
long as such ownership or control exists.
1.11. "Third Party Content" means interactive content that is the proprietary
property of a third party to this Agreement.
1.12. "T.NAV(R)" is a branded trademark of HealthStream and is a computer
based training product that delivers and monitors World Wide Web based
Content.
1.13. "T.NAV(R) iCommerce" means HealthStream's proprietary computer based
training product that is a derivative product of T.NAV(R) with
additional features added by HealthStream in its sole discretion and
designated by HealthStream in its sole discretion as "T.NAV(R)v.x.x.c."
1.14. "Transaction Fees" means fees received by HealthStream for healthcare
related training courses delivered over the Internet via the T.NAV(R)
on Distributor's World Wide Web Site.
ARTICLE 2
STRATEGIC RIGHTS GRANTS
2.1 During the term of this Agreement, Distributor shall:
2.1.1 Include on the home page of Distributor's World Wide Web site
a logo of the HealthStream trademark and a hyperlink to the
HealthStream section of Distributor's World Wide Web site; and
2.1.2 Promote the HealthStream service as a part of industry trade
shows and exhibitions in which Distributor participates and as
a part of Distributor's public advertising strategy.
Distributor will provide HealthStream with a specific
promotion plan within ninety (90) days of the Effective Date
that will include a minimum of one (1) event per quarter.
2.2 During the term of this Agreement, HealthStream shall:
2.2.1 Include on the partners page of its World Wide Web site a logo
of the Distributor trademark and a hyperlink to the
Distributor's World Wide Web site; and
2.2.2 Provide standard Personalization for Distributor, as defined
in Exhibit A; and
2.2.3 Enable Distributor to participate in co-marketing campaigns,
at HealthStream's discretion.
ARTICLE 3
LICENSE GRANTS
3.1 Subject to the payment of the consideration set forth in Article 4,
HealthStream grants the Distributor non-exclusive worldwide license
rights for T.NAV(R) iCommerce to deliver healthcare related training
courses over the Internet.
3.2. Any and all rights not expressly granted by either of the parties to
the other are reserved by the respective party claiming reservation of
that right.
ARTICLE 4
PRICE AND PAYMENT
4.1. During the term of this Agreement, HealthStream shall pay to
Distributor:
Distributor and HealthStream Media
Page 2 of 9
3
4.1.1 * of all Net Revenue derived from
Transaction Fees;
4.1.2. * of all Net Revenue derived from
Sponsorship Revenue sold by Distributor.
4.1.3. * of all Net Revenue derived from
Sponsorship Revenue sold by HealthStream.
4.2 Distributor and HealthStream agree to deliver monthly sales statements
that detail Net Revenue and payment according to the percentages
outlined in this Article 4 to each other within forty five (45) days
after the end of each calendar month. These monthly reports shall
indicate the total number of Transactions and Sponsorships for which
either party derives revenue. Each party shall submit monthly reports
even if no royalties or other amounts are due for such month. A monthly
finance charge based on an annual rate of prime plus 2% will be
assessed on all amounts that are paid later than forty five (45) days
after the end of the last month.
4.3. In the event that Distributor hosts T.NAV(R) on its own server,
Distributor shall be responsible for any costs associated with the
licensing of third party applications such as database licenses which
are required for the proper functioning of T.NAV(R) Commerce, hosting
and Internet access services necessary for distribution including, but
not limited to, the hardware infrastructure to meet additional demand.
HealthStream, however, shall be responsible for all taxes based upon
its personal property ownership and gross or net income.
4.4. Distributor and HealthStream will meet as necessary to review pricing,
discounting policy and the rationale behind any discounts granted for
Courses and Intranet products and services.
ARTICLE 5
INDEMNIFICATION FOR INFRINGEMENT
5.1. HealthStream represents and warrants that to the best of its knowledge:
5.1.1. T.NAV(R) iCommerce does not infringe any copyright or patent
enforceable under the laws of any country; and
5.1.2. T.NAV(R) iCommerce does not violate the trade secret rights of
any third party; and
5.2. HealthStream agrees to indemnify, hold harmless, and defend Distributor
from any and all damages, costs, and expenses, including reasonable
attorneys' fees, incurred in connection with a claim which constitutes
a breach of the warranties set forth in Section 5.1 and where judgment
has been rendered (hereinafter claims under Subsections 5.1.1 and 5.1.2
shall collectively be referred to as "Infringement Judgments");
provided, HealthStream is notified promptly in writing of an
Infringement Judgment and has sole control over its defense or
settlement, and Distributor provides reasonable assistance in the
defense of the same.
5.3. HealthStream shall have no liability for any Infringement Judgment
based on Distributor's:
5.3.1. use or distribution of T.NAV(R) iCommerce after HealthStream's
written notice that Distributor should cease use or
distribution of T.NAV(R) iCommerce due to an Infringement
Judgment, or
5.3.2. combination of T.NAV(R) iCommerce with a non-HealthStream
program or data if such Infringement Judgment would have been
avoided by the exclusive use of T.NAV(R) iCommerce.
5.4. For all Infringement Judgments arising under Section 5.3, Distributor
agrees to indemnify and defend HealthStream from and against all
damages, costs, and expenses, including reasonable attorneys' fees. In
the event HealthStream notifies Distributor that it should cease
distribution of T.NAV(R) iCommerce due to an Infringement Judgment,
Distributor may terminate this Agreement.
Distributor and HealthStream Media
Page 3 of 9
4
ARTICLE 6
INTELLECTUAL PROPERTY PROVISIONS
6.1. Both parties will cause to appear on all marketing or promotional
materials concerning the healthcare related training courses, the other
party's copyright, trademark, or patent notices.
6.2. The parties agree that ownership for any invention conceived or
developed during the course of this Agreement shall vest in accordance
with the patent rules governing inventorship.
6.3. To the extent that source code is written by either party title shall
vest in the party who has written such code.
6.4. Each party is responsible for protecting, documenting, and maintaining
its own intellectual property. Except as expressly set forth herein,
this Agreement does not grant either party any proprietary rights of
any type in the other party's materials, services or Content.
6.5. Both parties acknowledge that, except as otherwise provided herein,
each party owns and retains all right, title and interest in and to its
own Content provided to the other party.
6.6. HealthStream acknowledges that Distributor owns and retains all right,
title and interest in and to Distributor's World Wide Web site and all
Distributor's products, services and derivatives thereof arising from
the performance of this Agreement.
6.7. Distributor acknowledges that, except for the license granted to
Distributor in Section 3.1 herein, HealthStream owns and retains all
right, title and interest in and to T.NAV(R) iCommerce, the T.NAV(R)
iCommerce source code, and the T.NAV(R) iCommerce object code.
ARTICLE 7
PROHIBITION AGAINST ASSIGNMENT AND SUBLICENSE
This Agreement, and any rights or obligations hereunder, shall not be assigned
or sublicensed (except as permitted in this Article 7) by either party.
Notwithstanding the foregoing, this Agreement may be assigned to a successor in
interest to all of a party's assets or substantially all of a party's assets and
shall inure to the benefit of and be binding upon successors or purchasers of
substantially all of either party's assets.
ARTICLE 8
TERM OF AGREEMENT
Provided this Agreement has been properly executed by an officer of Distributor
and by an officer of HealthStream, the term of this Agreement ("Term") shall run
from the Effective Date until one (1) year after the Effective Date, and
thereafter be automatically extended for additional one (1) year periods unless
either party provides thirty (30) days written notice to the non-terminating
party.
ARTICLE 9
DEFAULT AND TERMINATION
9.1. The non-defaulting party may terminate this Agreement in its entirety
if any of the following events of default occur:
9.1.1. if the defaulting party materially fails to perform or comply
with this Agreement or any provision hereof;
9.1.2. if the defaulting party fails to strictly comply with the
provisions of Article 12, or makes an assignment in violation
of Article 7;
Distributor and HealthStream Media
Page 4 of 9
5
9.1.3. if a party becomes insolvent or admits in writing its
inability to pay its debts as they mature, or makes an
assignment for the benefit of creditors;
9.1.4. if a petition under any foreign, state, or United States
bankruptcy act, receivership statute, or the like, as they now
exist, or as they may be amended, is filed by a party; or
9.1.5. if such a petition is filed by any third party, or an
application for a receiver of a party is made by anyone and
such petition or application is not resolved favorably or
discharged to such party within ninety (90) days.
9.2. Termination due to a breach of Articles 7 or 12 shall be effective upon
notice. In all other cases termination shall be effective sixty (60)
days after notice of termination to the defaulting party if the
defaults have not been cured within such sixty (60) day period. The
rights and remedies of the parties provided herein shall not be
exclusive and are in addition to any other rights and remedies provided
by law or this Agreement.
ARTICLE 10
OBLIGATIONS UPON TERMINATION
10.1. From and after termination or expiration of this Agreement, Distributor
shall not employ T.NAV(R) iCommerce or portion thereof which is owned
by HealthStream, as part or portion of any product that Distributor may
use, sell, assign, lease, license, or transfer to third parties. Both
parties shall cease and desist from all use of the other party's
name(s) and associated trademark(s) and, upon request, deliver to the
other party or its authorized representatives or destroy all material
upon which those name(s) and the associated trademarks appear.
10.2. Articles 5, 6, 10, 11, 12, 13, 14, Section 15.1, and Article 16 shall
survive termination or expiration of this Agreement.
ARTICLE 11
WARRANTIES, LIMITATION OF LIABILITY AND REMEDIES
HealthStream represents and warrants that T.NAV(R) shall operate and perform
according to specifications attached hereto as Exhibit A. EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES. ANY AND
ALL OTHER IMPLIED WARRANTIES OF ANY KIND WHATSOEVER, INCLUDING THOSE FOR
MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY EXCLUDED.
NEITHER PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL (INCLUDING WITHOUT
LIMITATION LOST PROFITS, UNLIQUIDATED INVENTORY, ETC.), INCIDENTAL, INDIRECT,
ECONOMIC, OR PUNITIVE DAMAGES EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
ARTICLE 12
NONDISCLOSURE AGREEMENT
12.1. HealthStream expressly undertakes to retain in confidence all
information and know-how transmitted to HealthStream by Distributor
that Distributor has identified as being proprietary and/or
confidential or that, by the nature of the circumstances surrounding
the disclosure, ought in good faith to be treated as proprietary and/or
confidential, and will make no use of such information and know-how
except under the terms and during the existence of this Agreement.
HealthStream shall not disclose, disseminate or distribute any such
confidential information or know how to any third party without
Distributor's prior written consent. HealthStream agrees to use the
same degree of care to protect Distributor confidential information as
HealthStream takes to protect its own confidential information of like
importance. However, HealthStream shall have no obligation to maintain
the confidentiality of information that:
Distributor and HealthStream Media
Page 5 of 9
6
12.1.1. it received rightfully from another party prior to its receipt
from Distributor;
12.1.2. Distributor has disclosed to a third party without any
obligation to maintain such information in confidence; or
12.1.3. has been or is independently developed by HealthStream.
12.2. Further, HealthStream may disclose confidential information as required
by governmental or judicial order, provided HealthStream gives
Distributor prompt notice of such order and complies with any
confidentiality or protective order (or equivalent) imposed on such
disclosure. HealthStream shall treat the terms and conditions of this
Agreement as confidential; however, HealthStream may disclose such
information in confidence to its immediate legal and financial
consultants as required in the ordinary course of HealthStream's
business. HealthStream's obligation under this Article 12 shall extend
to the earlier of such time as the information protected hereby is in
the public domain through no fault of HealthStream or five (5) years
following termination or expiration of this Agreement. HealthStream
shall not disclose any information on Distributor's unannounced
products to HealthStream's employees or any third party.
12.3. Distributor shall have the same obligations in Sections 12.1 and 12.2
above with respect to HealthStream's information and know-how. In
addition, Distributor shall treat all T.NAV(R) iCommerce materials
(including source code) as confidential information and shall not
disclose, disseminate, or distribute such materials to any third party
without HealthStream's prior written permission.
12.4. Both parties shall prepare a mutually acceptable press release, if any,
to announce this Agreement.
ARTICLE 13
AUDITS
13.1. During the term of this Agreement, the parties hereto agree to keep all
usual and proper records and books of account and all usual and proper
entries relating to each T.NAV(R) iCommerce licensed consistent with
generally accepted accounting principles.
13.2. HealthStream may cause an audit to be made of the applicable
Distributor records that pertain to this Agreement for the sole purpose
of verifying royalty reports issued by Distributor to HealthStream and
prompt adjustment shall be made to compensate for any errors or
omissions disclosed by such audit. Any such audit shall be conducted by
an independent certified public accountant of national stature (e.g.,
Deloitte) selected by HealthStream (other than on a contingent fee
basis) and shall be conducted during regular business hours at
Distributor's offices and in such a manner as not to interfere with
Distributor's normal business activities. Any such audit shall occur no
more than once per calendar year and within six (6) months of the end
of the calendar year. HealthStream shall pay for any such audit unless
Material discrepancies are disclosed. "Material" shall mean the lesser
of Five Thousand Dollars (US$5,000.00) or five percent (5%) of the
amount that should have been reported. If Material discrepancies are
disclosed, Distributor agrees to pay HealthStream the costs associated
with the audit not to exceed Five Thousand Dollars (US$5,000.00). The
auditor shall only disclose the correct data and amounts as called for
on the royalty reports.
13.3. Distributor may cause an audit to be made of the applicable
HealthStream records and facilities for the sole purpose of verifying
any reports issued by HealthStream to Distributor, and prompt
adjustment shall be made to compensate for any errors or omissions
disclosed by such audit. Any such audit shall be conducted by an
independent certified public accountant of national stature (e.g.,
Deloitte) selected by Distributor (other than on a contingent fee
basis) and shall be conducted during regular business hours at
HealthStream's offices and in such a manner as not
Distributor and HealthStream Media
Page 6 of 9
7
to interfere with HealthStream's normal business activities. Any such
audit shall be paid for by Distributor unless Material discrepancies
are disclosed. 'Material" shall mean the lesser of Five Thousand
Dollars (US$5,000.00) or five percent (5%) of the amount that should
have been reported. If Material discrepancies are disclosed,
HealthStream agrees to pay Distributor for the costs associated with
the audit not to exceed Five Thousand Dollars (US$5,000.00). In no
event shall audits be made more frequently than annually unless the
immediately preceding audit disclosed a Material discrepancy. The
auditor shall only disclose the correct data and amounts as called for
on the royalty reports.
13.4. Any statement shall affect neither the right to examine and audit nor
the right to receive an adjustment to the contrary, appearing on checks
or otherwise, unless expressly agreed to in writing by the party having
such right.
13.5. In the event that either party makes any claim with respect to an
audit, upon the audited party's written request the party who has
requested such audit will make available to the audited party the
records and reports pertaining to such audit prepared by the
independent auditor who performed such audit.
ARTICLE 14
NOTICES AND REQUESTS
All notices, authorizations, and requests in connection with this Agreement
shall be deemed given on the day they are deposited in the U.S. mails, postage
prepaid, certified or registered, return receipt requested, or sent by air
express courier, charges prepaid; and addressed as follows:
DISTRIBUTOR: Pointshare
Attn: Xxxxxxx X. Xxxxxxxxx
President & CEO
0000 000xx Xxx. XX
Xxxxx 000
Xxxxxxxx, XX 00000
HEALTHSTREAM: HealthStream, Inc.
Attn: Xxxxxx X. Xxxxx, Xx.
General Counsel
000 00xx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
or to such other address as the party to receive the notice or request so
designates by written notice to the other.
ARTICLE 15
CONTROLLING LAW
15.1. This Agreement shall be construed and controlled by the laws of the
State of Tennessee.
15.2. Neither this Agreement, nor any terms and conditions contained herein,
shall be construed as creating a partnership, joint venture or agency
relationship or as granting a franchise as defined in 16 CFR Section
436.2(a). The price and payment described in Article 4 of this
Agreement shall
Distributor and HealthStream Media
Page 7 of 9
8
be construed as a royalty fee for the rights granted in Article 3 of
this Agreement, and not as a franchise fee.
ARTICLE 16
ATTORNEYS' FEES
If either HealthStream or Distributor employs attorneys to enforce any rights
arising out of or relating to this Agreement, the prevailing party in any
proceeding shall be entitled to recover its reasonable attorneys' fees, costs
and other expenses.
ARTICLE 17
GENERAL
17.1. This Agreement does not constitute an offer by HealthStream and it
shall not be effective until signed by both parties. Upon execution by
both parties, this Agreement shall constitute the entire agreement
between the parties with respect to the subject matter hereof and
replaces and supplants all prior and contemporaneous communications. It
shall not be modified except by a written agreement signed on behalf of
Distributor and HealthStream by their respective duly authorized
representatives. Unless agreed to in a separate writing signed by both
parties, any statement appearing as a restrictive endorsement on a
check or other document which purports to modify a right, obligation or
liability of either party shall be of no force and effect.
17.2. If any provision of this Agreement shall be held by a court of
competent jurisdiction to be illegal, invalid, or unenforceable, the
remaining provisions shall remain in full force and effect. If this
Agreement as it relates to any product(s) licensed hereunder shall be
held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable or if this Agreement is terminated as to particular
product(s), this Agreement shall remain in full force and effect as to
the remaining product(s).
17.3. No waiver of any breach of any provision of this Agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of
the same or any other provisions hereof, and no waiver shall be
effective unless made in writing and signed by an authorized
representative of the waiving party.
17.4. The Article headings used in this Agreement and the attached Exhibits
are intended for convenience only and shall not be deemed to supersede
or modify any provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth in Section 1.5 above. All signed copies of this Agreement shall
be deemed originals.
Pointshare HealthStream, Inc.
By: /s/ Xxx Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------- ---------------------------------
Name: Xxx Xxxxxxxxx
------------------------- Title: Chief Executive
Title: President & CEO ------------------------------
-------------------------
Distributor and HealthStream Media
Page 8 of 9
9
EXHIBIT A
PERSONALIZATION ITEMS
HealthStream's online education Web site and T.NAV iCommerce systems can be
personalized to reflect Distributor's brand image. The following items are
standard elements of that Personalization:
1. Left navigation bar light color
2. Left navigation bar dark color
3. The color that is the background of the main logo in the upper left
4. The color for the ad banner section
5. The light color for the catalog listing
6. The dark color for the catalog listing
7. The light color for the Your Menu listing
8. The dark for the Your Menu listing
9. The logo to display in the upper left
10. The name to display in the site (i.e. "Xxxxxxxxxxxx@xxx.xxx")
11. The phone number of technical support
12. The email for tech support
13. The address for tech support
14. The first custom link to display
15. The second custom link to display
16. The third custom link to display
17. The fourth custom link to display
18. The fifth custom link to display
19. The people support link to display
20. Code to pre-populate the discount field
21. Text to display on page for custom link 1
22. Text to display for custom link 2
23. Text to display for custom link 3
24. Text to display for custom link 4
25. Text to display for custom link 5
26. Text to display for the people support link
27. Default background color
28. The path and file to call when doing an auto-logoff
29. The background color for the title bar
Distributor and HealthStream Media
Page 9 of 9
