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EXHIBIT 10.26
LICENSING AGREEMENT
THIS AGREEMENT made effective as of the 1st day of October, 1995, by and
between the NAHC PLUS, INC. ("NAHC"), a non-profit corporation organized and
existing under the laws of the District of Columbia, whose principal place of
business is located at 000 X Xxxxxx, X.X., Xxxxxxx Xxxx, Xxxxxxxxxx, X.X.
00000-0000 ("Licensor"), and CENTRAL HEALTH MANAGEMENT SERVICES, INC. a business
corporation organized under the laws of the State of Delaware, located at 0000
Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx, 00000 ("Licensee").
WHEREAS, the Licensor is the proprietor of the Trademark "NAHC", and the
Licensor intends to seek the registration of the xxxx "NAHC IS," those marks
contained on Exhibit A hereto, and any related variations thereof developed by
Licensor after the date hereof (the "Trademarks"), and
WHEREAS, it is the desire and intention of the parties that the License be
permitted to use the Trademarks worldwide (the "Territory"), and
WHEREAS, the Licensee acknowledges the national good will and recognition
that exists in the Trademarks of the Licensor and Licensee desires to use those
marks in marketing its computer software and related products, and
WHEREAS, the Licensor is the largest association of home care providers in
the United States and believes that it is in the best interest of its members to
endorse Licensee's computer software and related products.
NOW, THEREFORE, in consideration of the above and other valuable
consideration, the parties hereto hereby agree as follows:
1. License. The Licensor grants to the Licensee and Licensee's
subsidiaries the exclusive, personal and nontransferable right and license to
use the Trademarks in the Territory in connection with the rendering of
information technology outsourcing services and the sale, marketing, licensing
and other distribution of the Licensee's proprietary software and related
materials including all subsequent versions and modifications thereof
(hereinafter referred to as "Products"), as set forth and described in Exhibit
B. Licensee may only use the Trademarks in connection with the Products
described in Exhibit B. Licensor is allowed to use the Trademarks for itself and
its subsidiaries and their products and services.
2. Fee and Royalties. During the term of this Agreement, Licensee will
pay to Licensor a license fee and royalty ("Fee") for use of the Trademarks as
follows:
a. For the period January 1, 1996 to December 31, 1996, Licensee
shall pay Licensor a Fee equal to the greater of either: (i) [Confidential
information has been omitted and filed separately with the Securitites and
Exchange Commission.]; or (ii) [Confidential information has been omitted and
filed separately with the Securities and Exchange Commission.];) percent of
Licensee's Net Collected Revenue From Products for the aforesaid period, with
payment to be made in three equal quarterly installments of [Confidential
information has been omitted and filed separately with the Securities and
Exchangei Commission.] Dollars on March 31, 1996, June 31, 1996 and September
30, 1996 and a final quarterly installment for the balance due to be made on or
before January 31, 1997.
b. Commencing January 1, 1997 and for the remaining term of this
Agreement, Licensee shall pay to Licensor a Fee equal to [Confidential
information has been omitted and filed separately with the Securities and
Exchange Commission.] percent of Licensee's Net Collected Revenue From
Products. Payment of this Fee will be remitted by Licensee to Licensor on the
basis of a calendar quarter with payment due and payable to Licensor with
respect to a particular calendar quarter within thirty (30) days after the end
of such calendar quarter.
c. For purposes of this Agreement, "Licensee's Net Collected Revenue
From Products" shall only include the funds actually received by Licensee which
are derived from the Products, whether or not the Products bear one or more of
the Trademarks. In the event that Licensee's Net Collected Revenue from
Products is intertwined with other revenues from products and services in
addition to the Products under a comprehensive pricing arrangement ("CPA"),
then the amount of Licensee's Net Collected Revenue From Products for a
particular CPA shall be determined by applying the pricing formula for Products
utilized in a Contemporary Products Contract. A "Contemporary Products
Contract" is an arms length contract wherein Licensee provides the Products at
a separately stated price which was issued within thirty (30) days before or
after such CPA, provided that if more than one Contemporary Products Contract
is executed by Licensee within such sixty (60) day period, then the pricing for
the CPA shall be the mean average of the pricing on such Contemporary Products
Contracts. In the event no Contemporary Products Contracts are executed during
such sixty (60) day period, Licensee shall allocate a reasonable portion of
CPA revenues to the Products.
d. Commencing for the calendar year 1996, Licensee shall provide to
Licensor on a annual basis a certificate from an independent firm of certified
public accountants as to the accuracy of CHMS's calcualtion of the Fee for that
year within one hundred twenty (120) days of the end of such year.
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3. Quality Use of the Trademarks.
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3. Quality Use of the Trademarks.
a. Licensee agrees that the nature and quality of the advertising,
promotion, labeling and other related, uses of the Trademarks by Licensee shall
conform to standards for use of the Trademarks set by and under the control of
Licensor. Licensor gives no warranties, express or implied, to Licensee or any
other party regarding the Products, updated versions thereof or documentation.
No advertising shall express any warranties, guarantees or fitness for
merchantability of any kind by Licensor of the Products. Licensee may advertise
that the Products are endorsed by Licensor.
b. At any time that one party becomes aware of a software problem or
defect, such party must provide the other party with a report ("Bug Report") of
any actual or potential defect ("Bug") in the software by notice or by other
reasonable means. Licensee will make reasonable efforts necessary changes or
modifications to correct such Bug at its own risk and cost, including making any
necessary modifications to the source code. If Licensee makes any correction
concerning such Bug, then Licensee will disclose to Licensor the fact of any
correction that it makes.
4. Inspection. The Licensee will permit duly authorized representatives of
the Licensor to inspect, on the premises of the Licensee, at all reasonable
times, the Products for the purpose of ascertaining or determining compliance
with Paragraphs 1 and 3 hereof and Licensor agrees to hold any Confidential
Information it may obtain in the strictest confidence in accordance with the
provisions of paragraph 12 hereof.
5. Use of Trademarks. Whenever the Licensee uses the Trademarks in
advertising or in any other manner in connection with the products which it
sells or distributes, the Licensee shall clearly indicate the Licensor's
ownership of the Trademarks. The Licensee shall provide the Licensor with
samples of all literature, packages, labels, labeling and advertising prepared
by or for the Licensee and intended to be used by Licensee which will bear the
Trademarks. When using the Trademarks under this Agreement, the Licensee
undertakes to comply with all laws pertaining to trademarks in force at any time
in the Territory, including but not limited to compliance with marketing
requirements. Licensee agrees to cooperate with Licensor in facilitating
Licensor's control of such nature and quality as explained above. Licensee
agrees to enforce all laws at its sole expense to protect the interests, rights,
and ownership of Licensor for infringement of Trademarks subject to Paragraph 6.
6. Infringement Proceedings.
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a. Should either Licensor or Licensee become aware of any alleged
infringement of any Trademark by any third party, that party shall promptly give
notice to the other party of the alleged infringement. Such notice shall state
the name and address of the alleged infringer as well as details of the alleged
infringement.
b. Licensor shall be entitled, at its expense and for its sole benefit, to
commence and pursue an action in its name to enjoin any perceived infringement
of the Trademarks. In the event that Licensor does not, within One Hundred and
Eighty (180) days of receiving notice of perceived infringement of a Trademark,
take steps to enjoin the alleged infringement, Licensee shall be entitled, at
its expense and for its sole benefit, to commence an action in its name, and, as
agent for Licensor, to name Licensor as a party plaintiff in the event that the
rules then in force require the naming of Licensor for purposes of such
infringement actions. Any recoveries from such an action commenced by Licensee
shall belong entirely to Licensee.
7. Extent of License. The rights granted to Licensee and its subsidiaries
in Paragraph 1 hereof shall not be transferable without the Licensor's prior
written consent. The rights granted to Licensee and its subsidiaries in
Paragraph 1 are exclusive to Licensee and its subsidiaries and during the term
of this Agreement Licensor will not license the Trademarks to any other person
nor endorse any other person for use in connection with any information
technology products or services.
8. Maintenance of Trademark. Subject to the provisions of paragraph 7
hereof, the Licensor will not permit any other person to use the Trademarks in
the Territory in connection with the Products or in connection with any services
or products that are similar to the Products or services sold by Licensee or its
subsidiaries.
9. Indemnity. The Licensor assumes no liability to the Licensee or to
third parties with respect to the performance characteristics of the Products
marketed or distributed under the Trademarks or to the use of the Trademarks in
the Territory, and the Licensee hereby indemnifies and holds harmless the
Licensor against all losses, damages and expenses including attorney's fees,
incurred as a result of or related to claims of third persons involving the
manufacture, sale or lease of the Products or use of the Trademarks. To the
extent Licensor or any of its subsidiaries undertakes to market or promote the
Products, Licensor shall only do so in coordination with Licensee and in the
event Licensor were to make any unilateral representations about the Products,
then Licensor hereby indemnifies and holds harmless the Licensee against any
losses, damages and expenses, including attorney's fees, incurred as a result of
or related to claims of third persons resulting from any unilateral
misrepresentations of the Products by Licensor.
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In the event that either party becomes aware of a claim for which the other
party must indemnify it, the party to be indemnified will promptly notify the
other party in writing of the claim and will allow the other party to assume
sole and full control of the defense and settlement of the claim. The party to
be indemnified shall provide the other party with reasonable assistance and/or
information necessary to defend and/or settle the claims. The indemnified
party's counsel shall have the right to participate in the defense and
settlement of the claim, at such party's own expense.
10. Term.
a. This Agreement shall commence only upon the first to occur of (i)
January 1, 1996 or (ii) Licensor obtaining directors' and officers' liability
insurance in a form acceptable to the Board of Directors of Licensor; provided
that Licensor will proceed with diligence to submit an application or
applications for such insurance coverage and take all reasonably necessary steps
to obtain such coverage.
b. Except as otherwise provided herein, the Agreement shall remain in full
force and effect for perpetuity.
c. If the Licensee makes any assignment of assets or business for the
benefit of creditors, or if a trustee or receiver is appointed to administer or
conduct its business or affairs, or it is adjudged in any legal proceeding to be
either a voluntary or involuntary bankrupt, then all the rights granted herein
shall forthwith cease and terminate without prior notice or legal action by the
Licensor.
d. If the Licensor should be or become financially unable to meet its
obligations as they come due or if the Licensor is or becomes insolvent or makes
any assignment of assets or business for the benefit of creditors, or if a
trustee or receiver is appointed to administer or conduct its business or
affairs, or it is adjudged in any legal proceeding to be either a voluntary or
involuntary bankrupt, then all the rights granted herein shall forthwith cease
and terminate without prior notice or legal action by the Licensee.
e. Should either party fail to comply with any material provision of this
Agreement, the other party may terminate this Agreement upon 30 days' advance
written notice to the noncomplying party, provided that the noncomplying party
has not corrected such default during the notice period.
f. If either party is convicted of criminal fraud and abuse under the
Medicare laws or otherwise excluded from participation in the Medicare program
or other federal program for funding home health care benefits as a result of
Licensee's intentional acts, then the other party has a right to terminate this
Agreement upon written notice to such party.
g. In the event Licensee fails to pay Licensor certain threshold Fees for
each of the third, fourth, and fifth year of this Agreement, then Licensor has
the right to terminate this Agreement in any year that such threshold Fees are
not to be paid by Licensee to Licensor. The threshold Fees for calendar year
ending December 31, 1998 is [Confidential information has been omitted and filed
separately with the Securities and Exchange Commission]; for calendar year
ending December 31, 1999 is [Confidential information has been omitted and
filed separately with the Securities and Exchange Commission.]; and for
calendar year ending December 31, 2000 is [Confidential information has been
omitted and filed separately with the Securities and Exchange Commission.]
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h. Upon termination of this Agreement, (i) Licensee will cease using the
Trademarks, except that Licensee may distribute any finished goods inventory of
Products which bear the Trademarks that are on hand on the date of termination
of this Agreement; (ii) Fees will continue to be earned by Licensor only on such
aforesaid finished goods inventory of the Product on hand on the date of
termination of this Agreement; and (iii) Licensee shall promptly remit any
accrued but unpaid Fees to Licensor; and no other Fees will be earned by
Licensor after the date of termination of this Agreement.
11. Ownership of Trademark. The Licensee acknowledges the Licensor's
exclusive right, title, and interest in and to the currently existing Trademarks
and will not at any time do or cause to be done any act or thing contesting or
in any way impairing or tending to impair any part of such right, title and
interest. In connection with the use of the currently existing Trademarks, the
Licensee shall not in any manner represent that it has any ownership in the
currently existing Trademarks or registration thereof, and the Licensee
acknowledges that use of the currently existing Trademarks by the Licensee
shall inure to the benefit of the Licensor. Upon termination of the Agreement
in any manner provided herein and subject to the limited rights set forth in
paragraph 10 hereof, the Licensee will cease and desist from all use of the
currently existing Trademarks in any way and Licensee will, to the satisfaction
of Licensor, destroy all printed material containing the currently existing
Trademarks and remove all references to the currently existing Trademarks from
its Products. Licensee shall at no time adopt or use, without the Licensor's
proper written consent, any word or xxxx which is likely to be similar to or
confusing with the currently existing Trademarks.
12. Confidential Information. Licensor acknowledges that it will obtain
and/or have access to various confidential information concerning the business
and affairs of Licensee as a result of entering this Agreement with Licensee.
Such confidential information includes, but is not limited to information
concerning Licensee's information technology business, strategic plans regarding
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technology and research, existing methodologies of operating information
technology systems and manipulation of data and financial matters related
thereto ("Confidential Information"). Licensor agrees: (a) to hold the
Confidential Information in strict confidence; (b) not to use the Confidential
Information for any purpose other than as is specifically set forth in this
Agreement; (c) not to disclose any of the Confidential Information to any third
party or any of a party's employees, agents or representatives other than those
who need to know and/or have access to such Confidential Information in
connection with the performance of their duties on behalf of Licensor; and (d)
to return to Licensee or destroy or delete, at Licensee's election, all or the
relevant portions of any of the documents and other materials embodying
Confidential Information (including all copies thereof) in Licensor's
possession upon termination of this Agreement. The foregoing restrictions shall
not, however, apply to information which: (a) is generally known to and
available for use within the trade or by the public at the time of disclosure
to Licensor; (b) becomes generally known to and available for use within the
trade or by the public other than as a result of a breach of the Licensor's
duty of confidentiality hereunder; (c) was in the possession or knowledge of
the Licensor free of confidentiality restrictions prior to the time of
disclosure to the Licensor by the Licensee, or becomes available to the
Licensor from a third party who or which is not bound by confidentiality,
restrictions; (d) is required to be disclosed by law or pursuant to a court
order, subject to prompt prior written notice by the Licensor to the Licensee
of such potential disclosure and the Licensee's right to prevent or otherwise
limit such disclosure with the bounds of the law or court order; or (e) is
authorized to be used and/or disclosed to third parties by the originating
party in writing, subject to execution of a confidentiality agreement
acceptable to the originating party by the third party. Each party further
agrees to comply with any and all laws and regulations and procedures relating
to all information which is disclosed to the Licensor or to which the Licensor
has access, and to comply with the Licensee's applicable reasonable security
and confidentiality policies and procedures relative to Licensee's facilities,
communications and information. The provisions of this paragraph 12 shall
survive termination of this Agreement.
13. Minimum Data Set. The parties intend to cooperate in the joint
development, marketing and operation of and access to a national data base for
the home health industry.
14. Notices. Any notices required or permitted to be given under this
Agreement shall be deemed sufficiently given if mailed by registered mail,
postage prepaid, addressed to the party to be notified at its address shown at
the beginning of this Agreement, or at such other address as may be furnished in
writing to the notifying party.
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15. Entire Agreement. Except as may be expressly provided otherwise
herein, this Agreement constitutes the entire agreement between the parties
concerning the subject matter thereof. No prior or contemporaneous
representations, inducements, promises, or agreement, oral or otherwise, between
the parties with reference thereto will be of any force of effect. Future
modifications must be in writing between the parties.
16. Authority And Other General Warranties. Each party warrants to the
other that:
(a) the warranting party is not a party to any agreement calling for
the payment to, or receipt from, any third party by the warranting party of
any commission, gratuity, "kickback," or other similar thing or amount in
violation of the Medicare or Medicaid anti-kickback provisions of 42 U.S.C.
1320 (a. et seq. and b. et seq.);
(b) the warranting party is not presently the subject of a voluntary
or involuntary petition in bankruptcy, does not presently contemplate
filing any such voluntary petition, and is not aware of any intention on
the part of any other person to file such an involuntary petition against
it;
(c) the warranting party is not presently the subject of, nor the
proponent of, any claim that the warranting party would know would have an
immediate and materially adverse effect on the ability of the other party
to meet such other party's financial obligations as they become due in the
ordinary course of such other party's operations; and
(d) the person(s) executing this Agreement on behalf of the warranting
party has actual authority to bind such warranting party to this Agreement.
17. Independent Parties. The parties are independent contractors. No
partnership or joint venture is intended to be created by this Agreement, nor
any principal-agent or employer-employee relationship.
18. Effect of Partial Invalidity. If any one or more of the provisions of
this Agreement should be ruled wholly or partly invalid or unenforceable by a
court or other government body of competent jurisdiction, then the validity and
enforceability of all provisions of this Agreement not ruled to be invalid or
unenforceable will be unaffected.
19. No Waiver. The failure of either party at any time to require
performance by the other party of any provision of this Agreement shall
in no way affect the right of such party to require performance of that
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provision. Any waiver by either party of any reach of any provision of this
Agreement shall not be construed as a waiver of any continuing or succeeding
breach of such provision, a waiver of the provision itself or a waiver of any
right under this Agreement.
20. Binding on Successors. This Agreement will be binding upon and inure
to the benefit of the parties and their successors and assigns permitted by this
Agreement.
21. Section Headings. The article headings contained in this Agreement are
for reference purposes only and shall not in any way control the meaning or
interpretation of this Agreement.
22. Dispute Resolutions. Any material dispute between the parties arising
under this Agreement which is not resolved by good faith negotiation will be
submitted by either party to binding arbitration in Atlanta, Georgia in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award may be entered in any court with
jurisdiction thereof. The costs of arbitration will be borne by the parties in
proportions decided by the arbitrator(s).
Prior to initiating arbitration, any dispute between the parties either
with respect to the interpretation of any provision of this Agreement or with
respect to the performance by the parties shall, upon the written request of
either party, designate a representative whose task it will be to negotiate in
good faith and to resolve such dispute. If the designated representatives cannot
resolve such dispute within ten (10) calendar days, then the dispute shall be
escalated to the President of Licensor and the Chief Executive Officer of
Licensee, for their review and resolution. Such officers shall have ten (10)
calendar days, or other mutually agreed upon time, to resolve such dispute prior
to arbitration proceedings being initiated by either party.
23. Representation of Counsel; Mutual Negotiations. Each Party has had the
opportunity to be represented by counsel of its choice in negotiating with
Agreement. This Agreement shall therefore be deemed to have been negotiated and
prepared at the joint request, direction, and construction of the parties, at
arms-length, with the advice and participation of counsel, and will be
interpreted in accordance with its terms without favor to any party.
Each person signing below represents that he or she has read this Agreement
in its entirety (including any and all Schedules and Exhibits); understands its
terms; is duly authorized to execute this Agreement on behalf of the party
indicated below by his or her name; and agrees on behalf of such party that such
party will be bound by those terms.
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24. Interpretation of Agreement. It is agreed that this Agreement will be
interpreted according to the laws of the District of Columbia.
IN WITNESS WHEREOF, this Agreement has been executed on the dates specified
below each party's signature, to be effective as of the day and year first above
written.
NAHC PLUS, INC.
("Licensor")
By /s/ XXXX XXXXXX
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Name: Xxxx Xxxxxx, President
Date: October 13, 1995
Corporate Seal
Attest:
By:
----------------------------------
Secretary
CENTRAL HEALTH MANAGEMENT SERVICES,
INC. ("Licensee")
By /s/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx, President/CEO
Date: 10/6/95
Corporate Seal
Attest:
By:
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Secretary
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EXHIBIT "A" TO
LICENSING AGREEMENT BETWEEN
NAHC PLUS, INC.
AND
CENTRAL HEALTH MANAGEMENT SERVICES, INC.
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Pursuant to the preamble of the Licensing Agreement the following are
the "Trademarks" which are licensed to Licensee by Licensor:
Int. CL.: 42
Prior U.S. Cl.: 100 Reg. No. 1,722,790
United States Patent and Trademark Office Registered Oct. 6, 1992
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SERVICE XXXX
PRINCIPAL REGISTER
NAHC
NATIONAL ASSOCIATION FOR HOME CARE ERS AND BENEFICIARIES OF HOME CARE
(D.C. Corporation) SERVICES, IN CLASS 42 (U.S. CL. 100).
000 X XXXXXX, X.X. FIRST USE 10-0-1982; IN COMMERCE
XXXXXXXXXX, XX 00000 10-0-1982.
FOR: ASSOCIATION SERVICES: NAMELY, SER. NO. 74-221,797, FILED 11-15-1991.
PROMOTING THE INTERESTS OF PROVID-
XXXXX XXXXXXX, EXAMINING ATTORNEY
Initial /
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EXHIBIT "B" TO
LICENSING AGREEMENT BETWEEN
NAHC PLUS, INC.
CENTRAL HEALTH MANAGEMENT SERVICES, INC.
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Pursuant to Paragraph 1 of the Licensing Agreement, the following are
the "Products" in connection with the Trademarks which can be utilized:
1. All information technology systems and software or portions thereof
utilized by Licensee in connection with providing outsourcing
services to Licensee's clients and the sale, licensing or other
distribution of Licensee's proprietary software and related
materials to Licensee's clients.
2. Additionally, Products shall include all upgrade(s) and
modifications of existing Licensee software whether used for
outsourcing services or in connection with the sale, licensing or
other distribution of Licensee's software.
"Products" shall not include any ancillary services provided by
Licensee in connection with installation, maintenance or development of systems
or other services rendered on a consulting basis.
Initial /
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