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EXHIBIT 10.17
We have omitted certain portions of this document and filed them separately with
the Commission. These portions are marked with an asterisk (*).
MARKETING SERVICES AGREEMENT
BETWEEN HEALTHSTREAM & HEALTHGATE DATA CORP.
This Software Licensing Agreement ("Agreement") is entered into 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 HealthGate Data Corp., a Delaware corporation having its
principal place of business at 00 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000 ("HealthGate").
WHEREAS, HealthStream is a provider of computer and Web-based
education and training services organizations and individuals within the
healthcare industry;
WHEREAS, HealthStream is a provider of healthcare and education
courseware and courseware management tools delivered via the Internet,
corporate intranets and networks;
WHEREAS, HealthGate enables hospitals and health systems to provide
their users with access to healthcare content for professionals, patients, and
consumers under its CHIOCE(TM) brand name for their Web sites on the Internet
and on their corporate intranets;
WHEREAS, HealthGate and HealthStream have entered into a cooperative
effort to provide HealthStream branded, hosted and managed educational
offerings via HealthGate's distribution channels; market said educational
offerings; and sell the ad space inventory available within said educational
offerings;
WHEREAS, HealthGate and HealthStream wish to provide appropriate
consideration for those efforts that each party has agreed to undertake;
WHEREAS, HealthGate and HealthStream each acknowledge the sufficiency
and adequacy of the value, concessions, and recitations set forth herein;
NOW THEREFORE, HealthGate and HealthStream agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the terms below shall have the following
meanings:
1.1. "CHOICE(TM)" means HealthGate's suite of products that provide
healthcare content to hospitals and health systems for use on their
Web sites and intranets. CHOICE(TM) is a trademark of HealthGate.
1.2. "Effective Date" means September 29, 1999, the date on which both
parties to this Agreement have executed same.
1.3. "HealthGate" means HealthGate Data Corp. and any affiliated entity of
HealthGate. HealthGate is said to be a HealthStream Site via the
execution of this Agreement.
1.4. "HealthGate Sites" means the various branded Internet sites licensing
products and services from HealthGate, including its CHOICE(TM)
product.
1.5. "HealthStream" means HealthStream, Inc. and any Subsidiary of
HealthStream, Inc.
1.6. "HealthStream Services" means HealthStream branded, hosted and managed
healthcare educational offerings delivered via HealthStream Sites.
1.7. "HealthStream Sites" means those HealthStream managed and hosted
Internet sites that deliver educational and other content via the
T.NAV(R). HealthStream Sites may be available via the World Wide Web
or through a private Intranet.
1.8. "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.
1.9. "Intranet" means an internal network protected from unauthorized users
by a firewall and
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accessible only by individuals within the organization serving the
network.
1.10. "Joint Site" means one or more Internet sites available from
HealthGate Sites containing HealthStream Services. The Joint Sites are
also said to be a subset of HealthStream Sites. Joint Sites will
contain branding from both HealthStream and HealthGate.
1.11. "Marketing Initiatives" means those significant HealthGate marketing
activities that prominently include mention and promotion of
HealthStream and the Joint Site services. Marketing Initiatives
include but are not limited to the following: trade shows and
exhibitions, seminars, direct mailing campaigns, third party
publication advertisement campaigns, online banner advertisement
campaigns. HealthGate and HealthStream will jointly determine the
scope, total cost and cost allocation of Marketing Initiatives funded
by both parties. Notwithstanding other considerations, HealthStream
financial participation in each Marketing Initiative will be
determined in part by the extent of Joint Site and HealthStream
promotion in said Marketing Initiative.
1.12. "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.
1.13. "T.NAV(R)" means HealthStream's computer based training product that
delivers and monitors World Wide Web based Content. T.NAV(R) is
available in multiple configurations, each containing common core
functionality with unique features applicable for a given
application's distribution and access requirements, e.g. Internet
eCommerce, Intranet, local area networks, etc. T.NAV(R) is a
registered trademark of HealthStream. T.NAV(R) is also branded as
Training Navigator(TM), a trademark of HealthStream.
ARTICLE 2
RESPONSIBILITIES AND STRATEGIC RIGHTS GRANTS
2.1. During the term of this Agreement, HealthGate shall:
2.1.1. Promote the Joint Site as a part of HealthGate's public
advertising strategy. HealthGate and HealthStream will
jointly develop a specific promotion plan within ninety (90)
days of the Effective Date that will include a minimum of one
(1) Marketing Initiative per month. HealthGate will include
the use of the HealthStream trademark logo on all HealthGate
marketing materials that reference the services provided by
the Joint Site. All such Marketing Initiatives will be
jointly approved by HealthStream and HealthGate.
2.1.2. * marketing expenditures of * per * specifically promoting the
Joint Site's products and services. In addition, HealthGate
will * payments to HealthStream of * per * to underwrite the
delivery of continuing education credits to healthcare
professionals, which credits will be provided at no cost to
those healthcare professionals, during the term of this
Agreement.
2.2. During the term of this Agreement, HealthStream shall:
2.2.1. Assign a partner manager to the HealthGate account who will
be responsible for maintaining communication with HealthGate
personnel regarding site functionality, marketing, and other
business issues.
2.2.2. Financially participate in at least one Marketing Initiative
per quarter.
ARTICLE 4
INTELLECTUAL PROPERTY PROVISIONS
4.1. Both parties will cause to appear on all marketing or promotional
materials concerning the Joint Site, the other party's copyright,
trademark, or patent notices.
4.2. The parties agree that ownership for any invention conceived or
developed during the course of
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this Agreement shall vest in accordance with the patent rules
governing inventorship.
4.3. 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, software code or
content.
ARTICLE 5
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 5) 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 6
TERM OF AGREEMENT
Provided this Agreement has been properly executed by an officer of HealthGate
and by an officer of HealthStream, the term of this Agreement ("Term") shall
run from the Effective Date until two (2) years 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 7
DEFAULT AND TERMINATION
7.1. The non-defaulting party may terminate this Agreement in its entirety
if any of the following events of default occur:
7.1.1. If the defaulting party materially fails to perform or comply
with this Agreement or any provision hereof;
7.1.2. If the defaulting party makes an assignment in violation of
Article 5;
7.1.3. 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;
7.1.4. 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
7.1.5. 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.
7.2. Termination due to a breach of Articles 5 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 8
OBLIGATIONS UPON TERMINATION
8.1. From and after termination or expiration of this Agreement, both
parties shall discontinue the operation of the Joint Site, 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.
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8.2. Articles 3, 4, 8, 9, 10, 11, Section 13.1, and Article 14 shall
survive termination or expiration of this Agreement.
ARTICLE 9
WARRANTIES, LIMITATION OF LIABILITY AND REMEDIES
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 10
AUDITS
10.1. 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 Marketing Initiatives consistent with
generally accepted accounting principles.
10.2. HealthStream may cause an audit to be made of the applicable
HealthGate records that pertain to this Agreement for the sole purpose
of verifying Marketing Initiative reports issued by HealthGate 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 HealthGate's offices and in such a manner as not to interfere
with HealthGate'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, HealthGate 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.
10.3. HealthGate may cause an audit to be made of the applicable
HealthStream records and facilities for the sole purpose of verifying
any Marketing Initiative reports issued by HealthStream to HealthGate,
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 HealthGate (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 to interfere with
HealthStream's normal business activities. Any such audit shall be
paid for by HealthGate 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 HealthGate 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.
10.4. 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.
10.5. In the event that either party makes any claim with respect to an
audit, upon the audited party's
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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 11
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:
HEALTHGATE: HealthGate Data Corp.
Attn: Xxxx Xxxxxx
President
00 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
HEALTHSTREAM: HealthStream, Inc.
Attn: Xxxxxx X. Xxxxx
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 12
MEDIA
Each party agrees it will not use the other party's name, marks, or logos in
any advertising, promotional material, press release, publication, public
announcement, or through other media, written or oral, whether to the press, to
holders of publicly owned stock without the prior written consent of the other
party. Such consent shall not be unreasonably withheld or delayed. Accurate
statements made by either party as to the basic terms of this Agreement are
said to have the consent of the other party
ARTICLE 13
CONTROLLING LAW
13.1. This Agreement shall be construed and controlled by the laws of the
State of Tennessee.
13.2. 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).
ARTICLE 14
ATTORNEYS' FEES
If either HealthStream or HealthGate 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.
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ARTICLE 15
GENERAL
15.1. 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 HealthGate 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.
15.2. 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).
15.3. 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.
15.4. 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 1.2 above. All signed copies of this Agreement shall
be deemed originals.
/s/ Xxxxxx X. Xxxxx, Xx.
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HealthStream, Inc.
Xxxxxx X. Xxxxx, Xx.
Chief Executive Officer
/s/ Xxxx X. Xxxxxx
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HealthGate Data Corp.
Xxxx X. Xxxxxx
Chief Financial Officer
