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EXHIBIT 10.6
MASTER AGREEMENT
BETWEEN
MPOWER SOLUTIONS, INC.
AND
METHODIST CARE, INC.
MPOWER MASTER AGREEMENT PAGE 1
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MASTER AGREEMENT
THIS MASTER AGREEMENT (the "Agreement"), effective February 4, 1999 (the
"Effective Date"), between MPOWER SOLUTIONS INC., a Delaware corporation with
its principal place of business located at 0000 X. Xxxxxxx'x Xxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxx, XX 00000 ("MPOWER") and Methodist Care, Inc., a Texas licensed
Health Maintenance Organization ("HMO") with its principal place of business
located at Xxx Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000 ("Customer") sets
forth the promises of the parties with respect to the products and services of
MPOWER which are described in this Agreement.
WHEREAS, MPOWER is in the business of providing automated managed health care
information software and services to businesses providing managed health care
and insurance services, and desires to provide such services and software to
Customer, subject to the terms hereof; and
WHEREAS, Customer is a Texas licensed HMO and desires to use the software and
services provided by MPOWER, subject to the terms hereof.
NOW THEREFORE, in consideration of the mutual promises made, the terms and
conditions hereunder described and other valuable consideration, the parties
agree as follows:
I. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
A. CPI
"CPI" shall mean the Consumer Price Index for All Urban Consumers, U.S.
City Average, for All Items (1982-1984=100), as published by the Bureau
of Labor Statistics of the U.S. Department of Labor. If the Bureau of
Labor Statistics ceases to publish or substantially changes the
content, calculation or format of the CPI, the parties will substitute
another comparable index published by a mutually agreeable source;
provided, however, that if the change is merely to redefine the base
period to some other period, the parties will continue to use the
affected index but will convert either the current or prior level of
such index to the same basis as the other by using an appropriate
conversion factor.
B. DOCUMENTATION
"Documentation" shall mean the standard operational instructions,
manuals and related material regarding MPOWER Products (as defined
below) which MPOWER will deliver to Customer as set out in the
Attachments to this Agreement.
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C. MPOWER(R) Product(s)
"MPOWER(R) Product(s)" shall mean those products which MPOWER will
deliver to Customer as set out in the Attachments to this Agreement.
D. Release
"Release" shall mean a set of computer programs and/or associated
Documentation regarding an MPOWER Product which MPOWER makes available
for use by its customers who are covered under warranty or a
maintenance agreement regarding such MPOWER Product. MPOWER reserves
the right to charge an additional license fee for any optional modules
which MPOWER reasonably determines contains significant additional
functionality. Such significant additional functionality shall mean (a)
new modules or subsystems that are not a mere enhancement nor extension
of existing functionality, which enhancements and extensions are
covered under maintenance agreements, or Go) different hardware,
operating system platforms or databases. The major modules and/or
functionality initially covered under this Agreement are listed in
Exhibit F to the applicable Attachment to this Agreement.
E. Site(s)
"Site(s)" shall mean the physical location(s) at which Customer
conducts its business.
F. Live Production Environment
A live production environment ("Live Production Environment") is
defined whereby MPOWER(R) is managing on-line the enrollment and
processing of subscribers or members, and, at a minimum, one line of
business,
G. Plan(s)
A "Plan" shall mean a health benefit plan which Customer or a Plan
Sponsor is offering.
H. Enrollee.
"Enrollee" shall mean an individual who is currently enrolled in a Plan
entitled to receive Covered Services or who has been enrolled in a Plan
at some time during the then-previous twelve (12) months, whether or
not such covered Enrollee has presented a valid claim to such Plan.
I. Covered Services
"Covered Services" shall mean those healthcare or related benefits that
an Enrollee is entitled to receive from a Participating Provider or
other Provider pursuant to the applicable Enrollee Group Benefits
Agreement.
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J. Participating Provider
"Participating Provider" means Provider that has entered into an
agreement with Customer or Customer's customer to provide Covered
Services to Enrollees.
K. Group Benefits Agreement
"Group Benefits Agreement" means the document distributed by Customer
to its Enrollees describing all Covered Services in a Plan.
L. Work Order
"Work Order" shall mean a document that is separately executed by both
parties, that (a) describes a scope of services that Customer wishes
MPOWER to perform for Customer, (b) authorizes and obligates MPOWER to
perform such services for Customer, and (c) obligates Customer to pay
for such services, all under the terms of that separate document, and
which document, when executed, is incorporated and made part of this
Agreement.
M. Derivative Work
"Derivative Work" shall mean any computer program, application,
interface or related documentation that is based on an MPOWER. Product,
or any component part thereof, that is used or intended to be used as a
commercial software product or as a competitive product to MPOWER.
N. Source Code
"Source Code" shall mean the commonly accepted source code of a
computer program describing in a formal language certain logic
functions, from which source code a computer program is compiled or
interpreted to perform certain functions in a computer.
O. Object Code
"Object Code" shall mean the commonly accepted object code of a
computer program, which is that version of the computer program logic
that has been translated from the Source Code into instructions that
can be run directly within a computer in a predefined operating system
environment.
P. Plan Sponsor
"Plan Sponsor" shall mean the health plan, organization or legal person
that offers a Plan either directly or through another organization or
legal entity to Enrollees.
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Q. Provider
"Provider" shall mean a medical services provider, clinic, laboratory
or other institution or facility that customarily provides Covered
Services or other medical, surgical, laboratory, radiology, therapies,
alternative medical services or any other commonly accepted services of
a medical or medically related nature, whether licensed or unlicensed,
to Enrollees of Customer or Customer's customers.
R. Claim Transaction
"Claim Transaction" shall mean a medical, surgical, laboratory,
radiology, therapy or other service claim or encounter, whether for a
Covered Service or any other service or product, submitted to Customer
by a Provider detailing services or products provided by such Provider
to an Enrollee.
S. Encounter File
"Encounter File" shall mean the codified output of one or more of the
aforementioned services performed by such Provider to an Enrollee,
resulting in claim transaction(s) to be processed.
T. "Life"("Lives")
"Life" ("Lives") shall mean an Enrollee or Member.
U. End User or Authorized User
"End User" or "Authorized User" shall mean all such authorized
individuals deemed by Customer to require access to the then current
release of MPOWER Product in Object Code form, based upon conformance
to the terms and conditions set forth in Paragraph II (Confidential and
Proprietary Information) of this Agreement.
V. Effective Date
"Effective Date" shall mean the date this Agreement is executed as
evidenced by the signature page included herein.
II. CONFIDENTIAL AND PROPRIETARY INFORMATION
MPOWER, on behalf of itself, its employees, agents, vendors,
successors, and assigns, agrees to keep in confidence all data relating
to Customer's business to which MPOWER
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may have access as a result of performing its obligations under this
Agreement and the terms of this Agreement.
MPOWER asserts and Customer acknowledges that all MPOWER Products,
structural definitions, the Documentation and the Releases, and a11
information, data, designs, system setups, benefit plans, provider
contracts, fee groups, ad hoc reports, letter formats, sample letter
content, business process workflow diagrams, and any other structural
templates and other similar information provided by MPOWER, developed
by or in conjunction with MPOWER, and used by MPOWER in assisting
Customer in the installation, implementation or on-going use of the
MPOWER Product, and methodologies related thereto ("Proprietary
Information") are the exclusive property of MPOWER or MPOWER's
suppliers and that the Proprietary Information is confidential, has
tangible value and includes trade secret information of MPOWER and/or
MPOWER's suppliers. MPOWER and/or MPOWER's suppliers shall retain all
fights to the Proprietary Information, including all copyright rights
therein, except to the extent to which MPOWER grants rights to Customer
to use the Proprietary Information pursuant to this Agreement. Customer
may not create Derivative Works based upon the Proprietary Information
in whole or in part. All improvements, enhancements and modifications
to the Proprietary Information shall be owned exclusively by MPOWER or
MPOWER's suppliers. Without MPOWER's prior written consent, Customer
shall not decompile, disassemble or reverse engineer any Proprietary
Information.
Customer agrees not to sell, lease, assign or otherwise transfer,
disclose or make available, in whole or in part, any portion of the
Proprietary Information or the terms of this Agreement and Customer
shall prevent disclosure of any part of the Proprietary Information or
the terms of this Agreement to any third party for any reason (except
for disclosure or access to Customer's employees, contracted entities,
external auditors, Federal or State agencies, or Customer's customers
which is necessary for Customer to be able to use the Proprietary
Information in accordance with this Agreement). Customer agrees to
notify those employees, contracted entities, external auditors, Federal
or State agencies or customers to whom Customer gives access to the
Proprietary Information of the restrictions contained in this Section
II and to ensure their compliance with such restrictions.
The duties and obligations which are included in this Section II shall
survive any termination of this Agreement and/or Customer's right and
license to use any MPOWER Product.
If Customer desires to disclose any Proprietary Information to any
third party or to permit any third party to have access to any
Proprietary Information, such third party must have a legitimate need
to have access to such Proprietary Information (consistent with the
purpose[s] for which such disclosure was made to Customer) and, prior
to any such disclosure or access, Customer and such third party must
enter into a nondisclosure agreement as attached herein. In no event
shall Customer disclose any Proprietary Information to any competitor
of MPOWER.
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Notwithstanding the above, Customer and MPOWER. acknowledge that the
MPOWER Product structural definitions of any system setups, benefit
plans, provider contracts, fee groups, ad hoc reports, letter formats,
sample letter content, workflow diagrams of Customer business
processes, and any other structural templates, that have been provided,
developed, reviewed or verified in whole or in part by or with the
support of MPOWER, its employees or agents, do not constitute
Proprietary Information of Customer within the meaning of this Section
II; provided, however, that specific provider and benefit contract
rates, benefit plans, workflow diagrams of Customer business processes,
the names, demographic information, contractual relationships, and
medical information of any group, member, provider or other entity with
a contractual relationship with Customer shall be considered
Proprietary Information of Customer or of such other entity contracted
with Customer, unless such information is available through public
sources or through publicly available filings with any insurance or
health care regulatory agency or with any industry accreditation or
reporting body.
Further notwithstanding the above, Customer and MPOWER acknowledge that
Customer may create and distribute reports and data from its licensed
use of the MPOWER Products in the normal course of its business to its
customers, to health care providers, Enrollees, employers or Plan
Sponsors, government agencies and others with a legitimate purpose in
the conduct of the Customer's business and the data processed by the
licensed MPOWER Products, and that such reports and distributed data do
not constitute Derivative Works, unless they are used to create
commercial software products for reuse and / or license to other
parties.
Customer "Confidential Information" shall mean this Agreement and any
information of the Customer that is disclosed in any form or manner,
whatsoever by Customer to MPOWER. MPOWER's licensed products, pricing
and written documentation. Except for member/enrollee information,
Confidential Information does not include any particular information
which the recipient of such information can demonstrate: (a) was, at
the time of disclosure to it, in the public domain; (b) after
disclosure to it, is published or otherwise becomes part of the public
domain through no fault of the recipient; (c) was received after
disclosure to it from a third party who had lawful right to disclose
such information to it. ALL CUSTOMER EMPLOYEE AND MEMBER/ENROLLEE
INFORMATION, INCLUDING MEDICAL AND BILLING INFORMATION, IS CONFIDENTIAL
INFORMATION, AND THE FOREGOING EXCLUSIONS SHALL NOT APPLY TO SUCH
INFORMATION.
Notwithstanding anything herein to the contrary, in the event Customer
requests MPOWER to develop a module that is separate from MPOWER's
application and provided that such development is agreed to in advance
in writing with MPOWER as a designated "Proprietary Methodist Care
Module" and Customer funds substantially all of the development costs
for the module, MPOWER will develop such a mutually agreed to module
for Customer. If MPOWER desires to market to or utilize this
"Proprietary MethodistCare Module" for any other Customer(s), MPOWER
will pay Customer on an annual basis 10% of all revenues
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associated with the Proprietary MethodistCare Module. These payments
will be made until Customer has recouped 100% of its associated
development costs.
III. COPYING
Customer, for each licensed instance of the MPOWER Product being used
in a Live Production Environment, may make one (I) copy of each MPOWER
Product in machine-readable form in a test region for the purpose of
testing new releases or fixes and also one (1) copy of each MPOWER
Product in machine-readable form for backup purposes only. Customer
agrees that upon copying any MPOWER Product, Customer shall place a
label on the outside of each copy medium showing the program name,
version number and any/all copyright and proprietary notices in the
same form as contained on the original copy.
In addition, Customer may make automated backup copies of its
production and testing regions for operational backup purposes without
applying the above labels, provided that such operational backup copies
are maintained with the acceptable industry standard security measures
and not made available to outside parties except for the case of
disaster recovery purposes, in which case the disaster recovery agent
will be bound to all the confidentiality and Proprietary Information
restrictions to which Customer is bound hereunder, and further that no
such disaster recovery agent may be a competitor of MPOWER.
IV. SOURCE CODE ESCROW
At the request of Customer, MPOWER and Customer will enter into an
agreement with MPOWER's escrow agent ("Custodian") for the depositing
of the MPOWER Products' Source Code ("Source Code Copy"). [The current
Custodian is NORWEST Bank.] MPOWER shall notify Customer at least ten
(10) business days prior to a change in the entity identified as the
Custodian. Subject to Customer's payment of all fees due under this
Agreement in accordance with the applicable payment terms and
Customer's payment of all fees related to Custodian's administration of
said escrow (the current rate as of the date of this Agreement being
One Thousand Five Hundred ($1,500.00) Dollars per annum), the Source
Code Copy so deposited will be maintained during the period Customer
shall use and purchase, and MPOWER shall provide, software, are
maintenance services for the particular MPOWER Product. The Source Code
Copy will be updated by MPOWER within thirty (30) days after each new
Release of the particular MPOWER Product.
The parties agree that the Source Code Copy shall be held by the
Custodian for delivery to Customer under the conditions that this
Agreement is terminated as a result of a material breach of the terms
of this Agreement by MPOWER, MPOWER files for bankruptcy under Chapter
7, or its business is not continued by virtue of a merger,
consolidation, the sale of
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all or substantially all of its assets, or through some other
transaction by another corporation or entity, and the Custodian of the
Source Code has received from Customer or from MPOWER, or from a court
of competent jurisdiction: (i) written notification of any such event
or condition; (ii) demand that a copy of the Source Code Copy be mailed
to Customer; (iii) written undertaking from Customer, which shall be
legally binding, that the copy of the Source Code Copy to be supplied
to Customer will be licensed to Customer as a Perpetual Source Code
License for internal Customer use only; and (iv) specific instructions
from Customer for the delivery of a copy of the Source Code Copy, with
a copy of such instructions to MPOWER. Customer has the right to use
the MPOWER Perpetual Source Code License indefinitely and to modify
Source Code to meet future business needs. Customer will pay the costs
and expenses of the Custodian in carrying out the requirements of this
Section IV.
Source Code Escrow Agreement. Upon receipt of all applicable fees from
Customer associated with said escrow, MPOWER acknowledges that it shall
deliver to Norwest Bank, an escrow agent (the "Escrow Agent") the
Source Code for MPOWER Release. During the term of the license for the
MPOWER Release granted in this Agreement, MPOWER shall deliver to the
Escrow Agent all modifications of the said Source Code so as to ensure
that the Source Code in possession of the Escrow Agent represents at
all times the most current version of MPOWER Release being operated by
Customer.
In addition, if Customer uses the MPOWER Product Source Code, it will
only be for the purposes for which the Object Code is licensed under
this Agreement and not for re-license, reverse engineering or to create
a derivative product. The Confidential and Proprietary Information
provisions of Section II apply also to the Source Code.
V. TERM AND TERMINATION
This Agreement is valid for an initial period of five (5) years from
the Effective Date. After the initial period this Agreement will renew
annually for one (1) year terms unless Customer provides ninety (90)
days prior notice of its intent not to renew.
Should Customer fail to pay may sum due and payable under this
Agreement, MPOWER shall notify Customer in writing of such failure to
pay. Customer shall then have thirty (30) days from the delivery of
MPOWER's written notice to pay such amount(s). The foregoing sentence
in no way relieves Customer from its obligation to pay any and all late
charges which may become due as set forth in Section VI below. If
payment is not made within such thirty (30) days, MPOWER shall have the
immediate right to discontinue any and all services under this
Agreement. Furthermore, if payment is not made within sixty (60) days
from the delivery of MPOWER's written notice, MPOWER shall have the
immediate right to terminate this Agreement.
Should either party commit a material breach of its obligations under
this Agreement, other than failing to pay money, the non-breaching
party may notify the breaching party in
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writing, setting out the breach, and the breaching party shall have
thirty (30) days to remedy such breach. If the breaching party fails to
remedy the breach during this thirty (30) day period, or, with respect
to those breaches which cannot reasonably be remedied within thirty
(30) days, if the breaching party fails to proceed promptly after being
given such notice to commence remedying the breach and thereafter to
proceed to remedy the same, the other party shall have the right to
terminate this Agreement, provided such party gives the breaching party
thirty (30) days' prior written notice to that effect. Notwithstanding
the foregoing, either party shall have the fight to immediately
terminate this Agreement upon any breach by the other of its
obligations under Section II above.
Termination of this Agreement shall be without prejudice to all accrued
rights and remedies either party may have and shall not affect any
continuing rights and obligations of the parties under this Agreement.
Upon the termination of this Agreement and/or any Attachment to this
Agreement, Customer shall return to MPOWER all Proprietary Information
regarding the MPOWER Product whose license is being terminated, within
sixty (60) days after such termination and MPOWER shall return to
Customer any proprietary information obtained in the performance of
this Agreement within sixty (60) days after such termination.
VI. INVOICES AND CHARGES
Unless a specific payment date is set out in an Attachment to this
Agreement, Customer agrees to remit all payments under this Agreement
so that MPOWER shall receive such payments no later than thirty (30)
days from the date of receipt of MPOWER's invoice. Customer also agrees
that MPOWER shall have the right to charge interest of one and one-half
percent (1.5%) of the outstanding balance per month, or the highest
amount allowed by law, whichever is less, on any and all late payments,
and Customer agrees to pay such charges. All prices mentioned in this
Agreement are in U.S. Dollars. The parties agree that the prices set
out in this Agreement do not include any sales, use or gross receipts
taxes, any duties, any similar assessments, or any other tax imposed on
any party by virtue of this Agreement, all of which, excluding only
taxes based on MPOWER's income, shall be the sole liability of, and
shall be paid solely by, Customer.
VII. FORCE MAJEURE
Neither party shall be liable to the other for failing to fulfill any
obligation under this Agreement if such failure is caused by an event
which is beyond such party's reasonable control and which is not caused
by such party's fault or negligence, including without limitation, acts
of God, acts of war, rites, strikes, lightning, floods, epidemics,
civil unrest, power shortages, equipment failure, delays in
transportation, or either party's inability to
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obtain necessary labor, material or components due to causes beyond
such party's reasonable control.
VIII. CUSTOMER RESPONSIBILITIES
A. Customer Responsibilities
Customer acknowledges that MPOWER(R) reflects certain interdependent
relationships, such as exist among the data variables, logic rules and
system functions of MPOWER(R). Customer further acknowledges that it is
required and has a .responsibility to understand such data variables,
logic rules and system functions, and their interdependent
relationships, and to define for its own purposes such data variables,
logic rules and system functions to MPOWER(R) in such a way that
MPOW'ER(R) will provide the functionality desired by Customer. Customer
acknowledges that it has or will hire and will maintain on its staff
personnel who are able to understand and define such data variables,
logic rules, system functions and interdependent relationships.
Customer further acknowledges that, even though MPOWER may assist
Customer personnel in performing these tasks, the responsibility for
the effective definition and maintenance of these data variables, logic
rules and system functions resides with Customer and not with MPOWER,
unless Customer specifically requests MPOWER to perform these tasks at
agreed upon rates specified in a Work Order.
B. Customer Data
Customer shall be responsible for inputting and ensuring the accuracy,
validity and completeness of all data variables, logic rules, system
functions and Customer data, including but not limited to group,
subscriber, member, provider, utilization, encounter, claims,
capitation, fund accounting, billing, collection, broker, benefits,
product contract, provider contract, provider fees, standard business
measures, and other similar or related data. Customer shall also be
responsible for inputting and ensuring, the accuracy, validity and
completeness of all user-defined report definitions, all report and
batch production job specifications and priority scheduling criteria.
Customer shall also be responsible for initiating, monitoring,
operating, printing and ensuring the accuracy, validity, and
completeness of all print outputs and file downloads, such as but not
limited to all reports, premium bills, checks, and the like,
determining how many and on what print stock such outputs are to be
printed or into which files or programs on Customer-controlled
computers such files are to be downloaded and manipulated, at
Customer's own initiative, responsibility and risk. Customer hereby
acknowledges 'responsibility for generally
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controlling all aspects related to the production, distribution and
control of such outputs. Customer further acknowledges that,
notwithstanding the responsibility of MPOWER to have used due care and
diligence in the design, programming, documentation and operation of
the System, the accuracy of Customer's data base within MPOWER(R) and
the accuracy of the several outputs of the MPOWER(R), including but not
limited to, outputs that control the billing, receipt or expenditure of
monies, will be dependent on the accuracy and use of the data
variables, logic rules, system functions and Customer data input into
MPOWER(R) by Customer and verified by Customer.
C. Other Customer Obligations
In addition to its other obligations hereunder, Customer will on a
timely basis:
1. Communicate on a timely basis any significant changes in
general business operations or priorities, within 90 days from
such a change, which relate to MPOWER support of Customer.
Customer recognizes that changes in such priorities may result
in additional fees hereunder for additional staff, as
incremental support, or reordering of other priorities to
provide MPOWER services within the current fee structure.
2. Cooperate with MPOWER by, among other things, making
available, as reasonably requested by MPOWER, management
decisions, information, approvals, and acceptances in order
that MPOWER may properly accomplish its obligations and
responsibilities hereunder.
3. Carefully inspect and review all MPOWER generated reports and
other output and notify MPOWER of any incorrect reports or
output.
4. Personalize, maintain, reproduce and' distribute (solely for
Customer's internal use) procedure manuals and documentation
used by Customer personnel in connection with the M. POWER
services hereunder.
5. Train applicable Customer personnel to properly prepare input
for and to effectively utilize output from the systems
operated by MPOWER hereunder.
6. Pay all costs of acquisition, installation, use and
maintenance of equipment at Customer's site, as required for
the performance of MPOWER services.
7. Such other responsibilities as set forth herein.
Customer agrees that to the extent its failure to meet its obligations
set forth in this Section VIII affects the ability of M_POWER to
perform MPOWER's obligations under this Agreement, M_POWER shall be
relieved of such obligations and Customer shall not exert against
MPOWER any claims or liabilities arising out of such failure by
Customer.
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D. Reprocessing or Reconstructing of Data
During any period of use of MPOWER(R), to the extent that any Customer
data must be corrected, recreated, restored or reprocessed due to the
fault or negligence of Customer, its employees or agents, or by a
breach by Customer of any of its obligations hereunder, MPOWER will do
so, and in such event Customer shall pay MPOWER at the service fee
rates outlined in an applicable Work Order and reimburse MPOWER for any
reasonable direct costs incurred by M_POWER in correcting, recreating,
restoring or reprocessing such data or in providing assistance
therewith.
IX. LIMITATION OF LIABILITY
PARTIES AGREE THAT THEY SHALL HAVE NO LIABILITY TO THE OTHER FOR
INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, OR FOR LOSS OF USE OR OTHER COMMERCIAL
LOSS (INCLUDING, BUT NOT LIMITED TO, LOSS OF REVENUES AND/OR PROFITS),
HOWEVER OCCASIONED AND WHATEVER THE FORM OF ACTION, FOR ACTUAL OR
IMPUTED NEGLIGENCE, BREACH OF CONTRACT, BREACH OF WARRANTY OR
OTHERWISE.
FURTHERMORE, PARTIES AGREE THAT IN NO EVENT SHALL TIKE OTHER BE LIABLE
FOR DIRECT DAMAGES IN EXCESS OF:
A. ALL LICENSE AND MAINTENANCE FEES CUSTOMER SHALL HAVE
PAID MPOWER FOR THE PARTICULAR MPOWER PRODUCT WHICH IS
THE SUBJECT OF CLAIM.
The parties agree that no action, regardless of form, which may arise
out of the transactions under this Agreement may be brought by either
party more than one (1) year after the cause of action is known, or
ought reasonably to have been known, to the party bringing the action.
X. INFRINGEMENT
MPOWER agrees to defend, indemnify and hold Customer harmless against
any and all claims that any MPOWER Product infringes a U.S. Letter
Patent, copyright, trade secret or the proprietary rights of others,
provided that MPOWER shall have received timely written notice of any
such claim and that MPOWER shall have sole control of the defense of
such claim and all negotiations for the settlement or compromise of
such claim.
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As of the date first written above, MPOWER warrants that it is not
aware of any infringement, and has not been notified by any third party
that it may be infringing, any U. S. Letter Patent, copyright, trade
secret or the proprietary rights of others.
If use of an MPOWER Product by Customer is enjoined, or becomes, or, in
MPOWER's sole opinion, is likely to become, the subject of a claim of
infringement, MPOWER will, at its option and expense, either:
1. procure for Customer the right to continue using the MPOWER
Product in question; or
2. replace or modify the same so that it is functionally equivalent
[i.e. the MPOWER Product will achieve the same or similar
business logic result] (or contains more functionality) and is
non-infringing.
Notwithstanding the foregoing, if MPOWER determines that neither of the
alternatives set forth above is reasonably available, MPOWER will
refund to Customer any un-amortized portion of the infringing MPOWER
Product's license fee which has then been paid by Customer.
Amortization shall be based upon a seven (7)-year life of the
infringing MPOWER Product, beginning on the date the infringing MPOWER
Product was licensed by Customer from MPOWER. Should such refund occur,
Customer agrees to return the infringing MPOWER Product to MPOWER.
Should any refund described above occur, the license for the infringing
MPOWER Product shall be terminated and MPOWER, its affiliates,
subsidiaries, assigns and successor corporations shall be released from
any and all liability arising from any and all claims, losses,
liabilities, damages, costs or deficiencies which are then-existing or
which may arise in the future with regard to such infringing MPOWER
Product(s) for which MPOWER has refunded fees pursuant to this Section
X.
Notwithstanding anything contained herein to the contrary, MPOWER shall
have no liability for any loss, cost, claim or expense caused by:
1. alteration of any MPOWER Product provided hereunder by any party
other than MPOWER;
2. any loss, expense or liability resulting from any infringement
which is a consequence of MPOWER's compliance with designs or
code submitted to MPOWER by Customer;
3. the use of any MPOWER Product in combination with products not
licensed to customer by MPOWER;
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4. continuation of the allegedly infringing activity by Customer
after Customer is notified in writing thereof and after the
conclusion of a reasonable grace period afforded Customer in the
notice to migrate from the infringing activity to an alternate
solution; or
5. Customer's use of an MPOWER Product other than in compliance with
the terms and conditions of this Agreement.
Notwithstanding the foregoing, MPOWER shall not be obligated to defend,
indemnify or hold Customer harmless from and against any claim, suit
proceeding or allegation asserted by a parent, subsidiary or affiliate
of Customer.
The foregoing remedy set forth in this Section X represents the
exclusive remedy of Customer and MPOWER's sole liability with regard to
any claim that an MPOWER Product infringes the rights of others.
XI. RESOLUTION OF DISPUTES
If any dispute shall arise between the parties under this Agreement,
the parties shall make every effort to amicably resolve the dispute
pursuant to this Section XI. The following procedures shall be adhered
to in order to expeditiously resolve any disputes arising during the
term of this Agreement.
The party invoking the procedures of this Section XI shall provide
written notice to the other party and within five (5) business days
following the other party's receipt of such notice, the parties'
implementation team leaders shall attempt to resolve such dispute. If
the parties' team leaders do not resolve such dispute within seven (7)
business days following the date of the non-invoking party's receipt of
notice hereunder, either party hereto shall have the fight to refer
such dispute for "Executive Review" as provided below.
"Executive Review" shall refer to the dispute resolution process which
shall be conducted as follows: within fifteen (15) days of any party's
request for Executive Review, each such party shall have designated an
executive-level employee of such party and such designated executive
shall have met, either in person or via telephone, with the other
party's executive-level designee to attempt to resolve such dispute. If
said executive- level designees are unable to resolve the dispute
within ten (10) business days of their first telephone or in-person
meeting pursuant to this paragraph, either party may request that the
dispute be referred to a second level of Executive Review. Within ten
(10) days of any party's request for such second level of Executive
Review, the Chief Executive Officers of both parties hereto shall meet,
in person or via telephone, to attempt to settle such dispute.
Notwithstanding anything in this Agreement to the contrary, should
either party feel the dispute cannot be amicably resolved after having
negotiated in good faith to
MPOWER MASTER AGREEMENT PAGE 15
16
resolve such dispute pursuant to the foregoing provisions of this
Section XI, such party shall have the right to terminate such
negotiations. Nothing in this Section XI shall require either party to
engage in negotiations to resolve a dispute for a period of more than
forty-five (45) days.
XII. SUCCESSORS AND ASSIGNS
Assignment. Except as may be herein specifically provided to the
contrary, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective legal representatives,
successors, and assigns; provided, however, that no assignment of this
Agreement or the rights and obligations hereunder shall be valid
without the specific written consent of both parties hereto.
Notwithstanding anything herein to the contrary, both Customer and
MPOWER shall have the right to (i) assign this Agreement and the rights
and obligations hereunder to an entity that is controlled by, under
common control with, or that controls Customer or MPOWER, where Control
is defined as an entity which Customer has majority ownership of or is
majority shareholder in or that is formed as the result of an internal
restructuring of Customer and/or its affiliates. Any such assignment by
Customer or MPOWER shall be effective without the need for any action
on the part of any party ether than such assignment by Customer to be
effective.
XIII. OMNIBUS RECONCILIATION ACT COMPLIANCE
As applicable under the Omnibus Reconciliation Act of 1980, until the
expiration of four (4) years after the furnishing of services under
this Agreement, MPOWER shall, upon receipt of written request, and if
then required to make such information available under the
then-existing law, make available to the Secretary of the United States
Department of Health and Human Services ("Secretary"), the Comptroller
General, or any of their duly authorized representatives; this
Agreement, books, documents, and/or records of MPOWER that are
necessary to certify the nature and extent of products and services
delivered under tiffs Agreement and costs associated therewith.
Furthermore, if MPOWER carries out any of the duties of tiffs Agreement
through a subcontract with a value or cost of Ten Thousand Dollars
($10,000.00) or more over a twelve (12)-month period, such subcontract
will contain a clause to the effect that, until the expiration of four
(4) years after the furnishing of such services under such subcontract,
the subcontractor shall, upon receipt of written request and if then
required to make such information available under the then-existing
law, make available to the Secretary, Comptroller General, or any of
their duly authorized representatives, the subcontract, books,
documents, and/or records of such subcontractor that are necessary to
verify the nature and extent of such costs.
MPOWER MASTER AGREEMENT PAGE 16
17
XIV. RELATIONSHIP MANAGEMENT
MPOWER and Customer agree to discuss business and relationship
strategies affecting both parties, as is required to effectively manage
the relationship between the parties. MPOWER and Customer further agree
to have regularly scheduled communications to summarize current
activities, performance results, error corrections and work efforts, as
well as the future planned activities. During the term of this
Agreement, each party will provide a liaison who (i) will have overall
management responsibility for the performance by the party hereunder,
(ii) will have primary operational responsibility, and (iii) will serve
as the party's primary liaison with the other party with respect to
performance under this Agreement.
XV. MISCELLANEOUS
A. Invalidity. If any of the provisions, or portions thereof, of
this Agreement are deemed to be invalid under any applicable
statute or role of law, they are to that extent to be deemed
omitted, and the parties agree to negotiate in good faith to
bring such provisions, or portions thereof, into compliance.
B. Headings. The headings of Sections in this Agreement and in the
Attachments are included for convenience only and shall not be
considered by either party in construing the meaning of this
Agreement or any Attachment.
C. Notices. Any notice given under this Agreement shall be in
writing, sent by Certified .Mail, Return Receipt Requested or
overnight courier such as FedEx or equivalent, and shall be
deemed to be delivered upon receipt by the receiving party.
All notices remitted to MPOWER shall be remitted to the attention
of: Chief Executive Officer. All notices remitted to Customer
shall be remitted to the attention of'. Xxxxxxx Xxxxx, CFO.
D. Waiver. Neither party shall be deemed to have waived any term or
provision of this Agreement, nor consented to any breach of this
Agreement, unless such party shall waive such term or provision,
or shall consent to such breach, in writing. Any such written
waiver and/or consent must be signed by the party which is
waiving such term or provision or is consenting to a breach.
Either party's consenting to a waiver, or a breach, by the other,
whether express or implied, shall not constitute consent or
waiver of any other different or subsequent breach by the other.
E. Governing Law. This Agreement and all Attachments hereto shall be
governed by and construed according to the laws of the State of
Texas and venue shall lie exclusively in Xxxxxx County, Texas.
MPOWER MASTER AGREEMENT PAGE 17
18
F. Joint Venture. Nothing in this Agreement constitutes or shall be
construed to be an agreement for Customer and MPOWER to share
losses or, for any reason, to be a partner or joint-venturer with
one another.
G. Entire Agreement. This Master Agreement, Attachment 1 and the
Exhibits contain the entire agreement of the parties with respect
to the subject matter covered by this Agreement. All provisions
contained in the Master Agreement apply to Attachment I and the
Exhibits. No other Agreement, attachment, statement, or promise
made by either party, or an employee, officer, or agent of the
party, which is not contained in this Agreement shall be binding
or valid unless executed pursuant to Section XV(H) below.
H. Amendment. Any changes to this Agreement shall be in writing in
the form of an amendment mutually agreed upon and duly executed
by both parties.
I. Right To Purchase Source Code. MPOWER grants to Customer the
right to purchase the Source Code for MPOWER. Products at any
time in the future for set price of one million-two hundred
fifty thousand dollars ($1,250,000 U.S.).
(REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.)
* Confidential Treatment Requested
MPOWER MASTER AGREEMENT PAGE 18
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XVI. SIGNATURE PAGE
The parties have each read this Agreement and agree to be bound by all of its
provisions, and further agree that it constitutes the complete and exclusive
statement of the agreement between them with regard to the subject matter
referenced herein, and supersedes any and all prior agreements and
understandings between them pertaining to the subject matter of this Agreement
and takes precedence over the provisions of any purchase orders submitted to
MPOWER by Customer. This Agreement may be amended only in writing signed by
authorized representatives of both of the parties.
METHODIST CARE INC. MPOWER SOLUTIONS INC.
("METHODIST CARE") ("POWER")
/s/ M. XXXXX XXXXXXXXX /s/ XXXX X. XXXXXXX
---------------------------- --------------------------------
SIGNATURE SIGNATURE
M. XXXXX XXXXXXXXX XXXX X. XXXXXXX
---------------------------- --------------------------------
NAME PRINTED NAME PRINTED
President/CEO Senior Vice President
---------------------------- --------------------------------
TITLE TITLE
2/9/99 2/4/99
---------------------------- --------------------------------
DATE DATE
MPOWER MASTER AGREEMENT PAGE 19
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METHODISTCARE
THE METHODIST HEALTH CARE SYSTEM
THIRD-PARTY ACCESS, CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT
In consideration of access to MethodistCare and MPOWER information or computer
systems, I agree to the following:
Access: I agree that MethodistCare and MPOWER will determine the
appropriate level of access to MethodistCare and MPOWER computer
systems, applications and information. Access will be based on my
duties and responsibilities. If appropriate, I will be assigned a user
identification label and will be asked to select a confidential
password. It is my responsibility to safeguard this password and not
share it with anyone. I agree to change my password periodically or as
required by a specific computer system. As an authorized computer
system user, I accept full responsibility for all actions performed
using my password. If I suspect or detect someone using my password, it
is my responsibility to both immediately change the password and notify
the Director, MethodistCare Information Services.
Purposes: I agree MethodistCare and MPOWER computer workstations,
premises and property are to be used only for MethodistCare and MPOWER
authorized purposes. Performing any unauthorized or inappropriate
functions constitutes a serious security violation. I understand that
periodic random audits may be conducted to detect violations. The
Director of MethodistCare Information Services or Chief Financial
Officer will be responsible for dealing with all security violations.
Data Protection: I will take all necessary steps to protect
MethodistCare and MPOWER data and information from destruction,
inappropriate alteration or unauthorized access. This includes any
confidential MethodistCare and MPOWER or Methodist Health Care System
data and information. I agree that I am required to log off a
MethodistCare and MPOWER computer workstation any time I leave the work
area.
Third Party Software: I agree not to copy or use MethodistCare and
MPOWER licensed software in violation of any vendor license agreements
or state/federal laws. Further, I agree not to remove any licensed
software from or lead any unapproved software on MethodistCare and
MPOWER computers or systems.
Confidentiality: I agree that all medical, financial and personal
information pertaining to membeRS, patients, physicians, providers,
employer groups and employees is Confidential. I further agree that all
financial, operational, proprietary or developmental information
pertaining to MethodistCare and MPOWER, the Methodist Health Care
System or third-party contractors is also Confidential. I agree not to
release, use. recreate, distribute, discuss, destroy, alter, or derive
benefit from any Confidential information without proper legal
authorization. The MethodistCare Chief Financial Officer or designee
will be responsible for chroming this provision.
Indemnification: I agree that I will indemnify and hold harmless
MethodistCare and MPOWER Methodist Health Care System and any related
entities from and against all liability, demands, claims, damages,
suits or judgments, including attorney's fees, costs and expenses
incident thereto, for injury or damage to any person
* Confidential Treatment Requested
MPOWER MASTER AGREEMENT PAGE 20
21
or property, or loss caused by my negligent or intentional acts or
omissions, including but not limited to, release of confidential
information.
Non-Disclosure: I agree not to sell, lease, assign, use or otherwise
transfer, disclose or make available In any manner or form any
MethodistCare and MPOWER Confidential information without proper legal
authorization. I further agree to immediately return any MethodistCare
and MPOWER information including confidential or proprietary
information upon (1) request or (2) completion or termination of my
services.
I have read, understand and as evidenced by my signature below agree to be bound
by the terms of this agreement. I further understand that the terms of this
agreement survive the termination of any relationship I have with MethodistCare
and MPOWER.
---------------------------- --------------------------------
Signature/Date Witness/Date
MPOWER. MASTER AGREEMENT PAGE 21
22
ATTACHMENT 1
I. DEFINITIONS
Except as set forth in this Section I of this Attachment, all
capitalized terms used in this Attachment shall have the same meaning
as set forth in the Master Agreement.
A. Master Agreement
"Master Agreement" shall mean the agreement to which this Attachment 1
is attached.
B. Agreement
"Agreement" shall mean the Master Agreement and all Addenda, Exhibits
and Attachments thereto.
C. MPOWER(R)
"MOWER(R)" shall mean the software product marketed by MPOWER which is
being licensed by Customer under this Attachment and the Master
Agreement. The modules that are included in MPOWER(R) as of the date of
this Attachment are listed in Exhibit F hereto.
II. GRANT OF LICENSE
In consideration of Customer's paying the Initial License Fee (as
hereinafter defined) and, when due, the Maintenance Fee, in accordance
with Section VIII of this Attachment, MPOWER grants Customer a
fully-paid, non-exclusive, perpetual, royalty free and annually
self-renewing license to operate a single, Object Code instance version
of MPOWER(R) on a RS/6000 HA50 platform for a Live Production
Environment for [*] lives ("Initial License).
This license allows authorized users to engage in the following
activities with respect to any MPOWER Release and Documentation:
(a) to use the MPOWER Release concurrently on authorized
computers;
(b) interface MPOWER Release with other programs used or
maintained by Customer;
(c) to make a reasonable number of back-up copies of MPOWER
Release on magnetic or optical media;
* Confidential Treatment Requested
MPOWER MASTER AGREEMENT PAGE 22
23
(d) to copy and use MPOWER Release on a substitute computer or
computers if the authorized computers become inoperable;
(e) to use MPOWER Release at Customer's third party disaster site
on a computer other than the authorized computers (including
semi-annual testing at such site);
(f) to use MPOWER Release as otherwise provided in this Agreement;
(g) to relocate the authorized computers to any Controlled
Customer facility; and
(h) to make a reasonable number of copies of the documentation
related to the MPOWER Release.
All of such rights are collectively referred to as the "License
Rights."
Customer may extend the license for such single, Object Code instance
of MPOWER(R) ("License Extension(s)") for [*] lives by paying MPOWER
the fees for additional lives defined in Section VIII below, and
abiding by the terms therein stipulated, and by providing the number of
such additional lives to MPOWER prior to Customer's first use of
MPOWER(R) on behalf of such additional lives.
Customer may copy MPOWER(R) and/or the Documentation as allowed under
Section III of the Master Agreement. Furthermore, Customer may copy the
Documentation in order to supply a copy of the Documentation to each
end user of MPOWER(R) at each Site. Customer agrees that any and all
copies of MPOWER(R) and/or the Documentation made by Customer shall
include any/all copyright and proprietary notices in the same form as
contained on the original copy. Except as allowed in Section III of the
Master Agreement and this paragraph, Customer may not otherwise make
copies of MPOWER(R) or the Documentation or any part thereof without
the prior written consent of MPOWER. Customer agrees there shall be no
other use of MPOWER(R) or the Documentation without the prior written
consent of MPOWER except as allowed in Section II of the Master
Agreement.
In order to ensure that MPOWER(R) is being used in conformity with the
license being granted under this Attachment, MPOWER shall have the
right to conduct audits (either on-site or remotely, at MPOWER's
option) of Customer's use of MPOWER(R) at periodic intervals. MPOWER
agrees that any such on-site audit shall be scheduled in advance and at
a time so as not to unduly interfere with Customer's business
operations. Customer agrees that any audit revealing unauthorized use
of MPOWER(R) will result in Customer's being liable for the payment of
additional fees to MPOWER equal to MPOWER's fees as stated in Section
VIII A of this Attachment.
* Confidential Treatment Requested
MPOWER MASTER AGREEMENT PAGE 23
24
Network and other Use. MPOWER acknowledges that the MPOWER Release will
be operated in conjunction with, and as a component of the Customers
network. As such, the MPOWER Release will be electronically linked to
the software and equipment, with which it may interact, including
interchanging data. The License Rights are deemed to include a license
to use the MPOWER Release in conjunction with the Customer's network.
Authorized Users may access the MPOWER Release through Customer's
network, and that such access and use via Customer's network does not
violate the License Rights.
III DELIVERY AND MEDIA
Promptly after the full execution of this Attachment, MPOWER will
deliver to Customer:
A. one (l) copy of the then-current Release of MPOWER(R) in Object Code
form; and
B. one (1) set of the the-current version of the Documentation in
electronic form.
IV. WARRANTY
A. System Warranties
Non-Infringement Warranty. MPOWER represents and warrants that as of
the Effective Date the MPOWER Release's performance under this
Agreement does not, and will continue not to, infringe, or constitute
an infringement or misappropriation of, the intellectual property
rights of any third party.
Performance Warranty. MPOWER represents and warrants that MPOWER
Release does, and shall continue to, meet or exceed the Functional
Specifications, Technical Specifications and Performance Standards set
forth in MPOWER's RFP responses, sales brochures and marketing
materials which are incorporated herein and made a part of this
Agreement. (the "Performance Warranty"). If MPOWER Release fails to
meet any aspect of the Performance Warranty (irrespective of the
severity of such failure) for any three consecutive months during the
warranty period, then Customer shall have the right to terminate this
Agreement pursuant. If MPOWER Release does not meet any aspect of the
Performance Warranty after the expiration of the warranty period but
while the Support and Maintenance Agreement is in effect, then MPOWER
shall take whatever corrective actions as may be necessary (or as
Customer may request) to have MPOWER Release meet the Performance
Warranty, at Customer's sole cost and expense.
PASS-THROUGH OF THIRD PARTY WARRANTIES. To the extent MPOWER may do so
under
MPOWER MASTER AGREEMENT PAGE 24
25
agreement with Third Party software manufacturers or suppliers, M_POWER
passes through to Customer all warranties for Third Party software. To
the extent MPOWER may not pass such warranties through, MPOWER hereby
makes to Customer the same Third Party software warranties as
manufacturers or suppliers make to MPOWER.
AS DOCUMENTED WARRANT,. During the warranty period, MPOWER warrants
that MPOWER Release will operate in accordance with the Documentation,
including Third Party software documentation (the "As Documented
Warranty"). Upon receipt of notice from Customer of a breach of the
As-Documented Warranty, MPOWER will correct the breach, in accordance
with the corrective-maintenance provisions of the Support and
Maintenance Agreement.
PHYSICAL MEDIA WARRANTY. MPOWER warrants that MPOWER Release is and
will be free from physical defects in each media that contains MPOWER
Release (the "Physical media Warranty"); provided, however, (i) the
Physical Media Warranty does not apply to defects discovered more than
90 days after the date of installation of MPOWER Release by MPOWER; and
(ii) Customer's sole remedy for breach of the Physical Media Warranty,
to the exclusion of all other remedies, shall be replacement by MPOWER
of any copy of MPOWER Release that does not comply with this warranty.
B. YEAR 2000 WARRANTY.
The MPOWER Release software shall be Millennium Compliant. As used in
this Agreement, "Millennium Compliant" shall mean the ability of MPOWER
Release software to perform the following functions: a) consistently
handle date information before, during, and after January 1, 2000,
including but not limited to accepting date input, providing data
output, and accurately performing calculations in dates or portions of
dates, and b) function accurately in accordance with Customer's
requirements, without interruption before and after January 1, 2000,
without any change in operations associated with the advent of the new
century. In the event that Customer becomes aware that MPOWER(R) will
not or does not process data containing any dates before, during, or
after January 1, 2000, correctly, Customer shall immediately notify
MPOWER of that fact and MPOWER agrees to correct or replace MPOWER(R)
to eliminate such processing problem in accordance with MPOWER's
standard policies, which are available upon request.
Further, MPOWER agrees to provide on-site Year 2000 compliance testing
during the implementation phase and pursuant to Customer's
specifications and requirements.
The foregoing is Customer's sole and exclusive remedy for breach of
warranty. The warranty set forth above is made to and for Customer's
benefit only. The warranty will apply only if no modification,
alteration or addition has been made to MPOWER(R) by persons other than
MPOWER or MPOWER's authorized representative.
MPOWER MASTER AGREEMENT PAGE 25
26
In no event will MPOWER be liable for any loss of profits, loss of use,
business interruption, loss of data, cover of cover, or indirect,
special, incidental, or consequential damages of any kind in connection
with or arising out of the furnishing, performance or use of MPOWER(R),
whether alleged as a breach of contract or tortious conduct, including
negligence, even if MPOWER has been advised of the possibility of such
damages. MPOWER's liability under this limited warranty for damages
will not, in any event, exceed the fees paid by Customer to MPOWER for
MPOWER(R).
C. SERVICE WARRANTIES.
MPOWER represents and warrants that it will perform the services
required under this Agreement in a professional manner with the utmost
due diligence and good faith. In addition, MPOWER represents and
warrants that it will initiate work on urgent issues within 1 hour of
Customer's call for assistance, at any time. Generally, "urgent issues"
involve substantial program failure or issues whose resolution is
critical to Customer's data processing, clinical or business
operations.
Disclaimer of all Other Warranties and Representations. THE EXPRESS
WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS AGREEMENT ARE IN LIEU
OF, AND CUSTOMER ACKNOWLEDGES THAT MPOWER DISCLAIMS, ANY AND ALL OTHER
WARRANTIES, CONDITIONS, OR REPRESENTATIONS (EXPRESS OF IMPLIED, ORAL
OR WRITTEN), WITH RESPECT TO THE SYSTEM OR ANY COMPONENT THEREOF,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
D. NON-INFRINGEMENT INDEMNITY.
Covenant to Defend and Indemnify. As a covenant separate from the
representation and warranty of non-infringement contained in Section
entitled Non-Infringement Warranty, MPOWER will defend, hold harmless
and indemnify Customer from any and all Claims brought against Customer
by any third party arising from or related to Customer's use of MPOWER
Release or MPOWER's Services subject to Section VIII, Customer
Responsibilities provision as established herein and to Limitations of
Liability as established in Section IX of the Master Agreement.
MPOWER MASTER AGREEMENT PAGE 26
27
CONDITIONS FOR MPOWER'S DEFENSE. If a third party asserts an
infringement claim: (i) Customer shall promptly advise MPOWER of the
existence of the claim within 30 days of receipt of a written statement
of the claim against Customer (whether or not litigation or any such
action has occurred); (ii) MPOWER shall have the sole right to control
the defense and/or settlement of all such claims, in litigation or
otherwise; provided, however, that (A) any settlement does not
adversely affect Customer's ability to exercise the License Rights or
obligates Customer in any way to the third party without Customer's
prior written consent; and (B) MPOWER can demonstrate, upon Customer's
request, MPOWER's financial ability to defend and indemnify Customer.
Customer shall have the right, at Customers expense, to engage separate
legal counsel to monitor and advise Customer regarding such defense.
Any delay in notifying MPOWER of a claim as set forth in this Section
shall not relieve MPOWER of its indemnity obligations hereunder, unless
such delay materially prejudices MPOWER.
MPOWER'S RIGHT TO CURE. If MPOWER Release is found to infringe any
third party intellectual property right, at MPOWER's sole discretion
and expense, MPOWER may:
(1) obtain a license from such third party for Customer's benefit; or
(2) replace or modify the MPOWER so that it is no longer infringing.
INFRINGEMENT INJUNCTIONS OBTAINED BY THIRD PARTIES. If a third party
infringement claim is sustained in a final judgment from which no
further appeal is taken or possible, and which enjoins Customer from
continued use of MPOWER Release or portions thereof, then MPOWER shall,
at its sole expense: (i) procure for Customer (at MPOWER's expense) the
right to continue to use MPOWER Release pursuant to this Agreement,
including all License Rights; or (ii) replace or modify M_POWER Release
to make it non-infringing.
CUSTOMER'S OPTION TO TERMINATE. If Customer is ordered by a court to
cease use of MPOWER Release or of specific functions(s) of MPOWER
Release, or if MPOWER's replacement or modification of MPOWER Release
is not acceptable to Customer, then Customer will have the option to
terminate this Agreement pursuant without opportunity to cure.
V. SOFTWARE MAINTENANCE SERVICES
In consideration of payment of the annual Maintenance Fee(s) set forth
in Section VIII B of this Attachment, Customer agrees to purchase, and
MPOWER agrees to provide Customer on an annually renewable basis with
software maintenance services for MPOWER(R) as follows (provided
Customer allows MPOWER, at MPOWER's request, dial-up access to
MPOWER(R)):
MPOWER MASTER AGREEMENT PAGE 27
28
A. any and all Releases regarding MPOWER(R) issued by MPOWER;
B. any and all updates to the Documentation issued by MPOWER; and
C. remote diagnostic support (including dial-up capabilities)
regarding MPOWER(R)to include error analysis and, where
possible, correction services, twenty-four (24) hours per day,
seven (7) days per week. Any on-site assistance which Customer
may request and which is provided by MPOWER, which, in
MPOWER's reasonable opinion, is not necessary to determine the
nature and resolution of any problems Customer may have with
MPOWER(R)shall be provided by MPOWER at its then-current
rates. If Customer notifies MPOWER that it suspects a material
error in the program logic of MPOWER(R)or in the
Documentation, MPOWER shall make all reasonable efforts to
confirm the existence of the error and correct it. If the
parties mutually determine that no such error exists, Customer
agrees to pay MPOWER for its services at MPOWER's hourly rates
then in effect and to reimburse MPOWER for any and all
reasonable travel and living expenses incurred by MPOWER in
rendering such services. MPOWER will use its Severity
Designations in effect from time to time to provide remote
diagnostic support. The current Severity Designations and
attendant response times are given in Exhibit G to this
Attachment.
Notwithstanding the foregoing, should Customer be utilizing any Release
of MPOWER(R) other than the then-most-recent Release, or the Release
prior to the then-most-current Release, provided such Release has been
available for Customer's use for a period of twelve (12) months or
longer, MPOWER reserves the right, at its sole option, to terminate its
obligations to provide maintenance services under this Section V at any
time upon giving thirty (30) days' prior written notice to Customer. If
such a condition exists, MPOWER and Customer agree to negotiate in good
faith to define reasonable terms, conditions and fees for MPOWER to
provide Customer with maintenance services for such then non-current
Release.
MPOWER's providing Customer with maintenance services as described in
this Section V shall automatically continue, on an annual basis, unless
either party shall give written notice to the other that it desires not
to renew such maintenance services. The parties agree that such written
notice shall be remitted for receipt by the other no less than ninety
(90) days prior to the end of the then-current annual maintenance
period.
VI. IMPLEMENTATION AND CONVERSION SERVICES
MPOWER MASTER AGREEMENT PAGE 28
29
MPOWER agrees to provide implementation services ("Implementation
Services") to assist Customer in implementing MPOWER(R) at the Site(s).
These implementation services shall comprise: 1) analysis of the
Site's(s') business requirements; 2) assistance in the user set up
definitions and build; 3) testing of MPOWER(R) including Year 2000
compliance testing requested by Customer; 4) pre/post activation
support for end users; 5) up to eighty (80) hours of initial training
services and 6) project management. MPOWER shall charge Customer as set
out in Section VIII.C below for all such Implementation Services
requested by Customer.
MPOWER agrees to provide conversion services ("Conversion Services") to
Customer to convert its current data files from its existing software
system to the MPOWER(R) database. MPOWER shall charge Customer as set
out in Section VIII.C below for all such Conversion Services requested
by Customer.
MPOWER reserves the fight to subcontract any Implementation Services
responsibilities it may accept under this Agreement. Customer shall
have the fight to approve MPOWER's subcontractors, which approval shall
not be unreasonably withheld. If Customer objects to certain
subcontractors for a stated good cause, MPOWER and Customer agree to
seek a mutually agreeable resolution to Customer's objection.
VII. TRAINING SERVICES
MPOWER will provide up to eighty (80) hours of initial trainer services
training within the scope of payment of initial Implementation Fees, as
indicated in Section VIII.C of this Attachment. Initial training will
focus on Customer's education of functionality contained within key
subsystems of MPOWER(R) and will be inclusive of the following:
o Mapping of business rules to benefit plan templates;
o Establishment of workflow procedures and user-defined
variables;
o Use of standard and ad-hoc reporting systems; and
o Methods for maintenance of key information being stored in the
system.
MPOWER will provide Customer under an appropriate Work Order, at
MPOWER's then-current fees, with additional training sessions regarding
MPOWER(R) to a reasonable number of Customer's personnel. All such
training, including initial End User training, shall be conducted at
location(s) elected by Customer at time(s) which are mutually
acceptable to both parties. Current fees for additional training
sessions are provided in Section VIII.F.
MPOWER MASTER AGREEMENT PAGE 29
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VIII. FEES
A. MPOWER(R) License Fees.
1. Fee for the Initial License.
Customer agrees to pay MPOWER a license fee ("Initial License
Fee") equal to two hundred five thousand Dollars $205,000 for
the master license granted in Section II of this Attachment
for 75,000 lives ("Initial License"). Customer agrees this
entire Initial License Fee is due to MPOWER on the full
execution of this Attachment and payable according to the
schedule shown in Exhibit C hereto.
2. Fees for License Extensions.
Customer may, during the term of this Agreement, provided
Customer is current with all Maintenance Fees, exercise an
incremental license or incremental licenses for additional
life volume growth by paying to MPOWER an additional license
fee ("License Extension Fee") as shown on Exhibit C hereto for
each such License Extension.
The Initial License Fee and the License Extension Fee(s) may
be referred to as the License Fee(s).
The License Extension Fees will be billed and paid in
accordance with the terms and conditions outlined in this
Agreement.
B. Annual Maintenance Fees.
Customer agrees to pay to MPOWER for the software maintenance
services described above a software maintenance fee
("Maintenance Fee") equal to [*] percent ([*]%) of the
aggregate of the Initial License Fee and all License Fee
Extensions paid or payable by Customer to MPOWER.
The annual Maintenance Fee is due and payable as follows: the
first annual Maintenance Fee shall be due and payable upon the
earlier to occur of Final Acceptance or when Customer first
begins to use MPOWER(R) in a Live Production Environment.
* Confidential Treatment Requested
MPOWER MASTER AGREEMENT PAGE 30
31
Each subsequent annual Maintenance Fee shall be billed and due
annually, based on the anniversary date of the first annual
Maintenance Fee due date. MPOWER will invoice Customer on an
annual basis for the maintenance fee. Customer agrees to pay
such invoices within thirty (30) days after Customer's receipt
of the invoice.
Maintenance Fees Payment Schedule is outlined in Exhibit D to
this Attachment.
C. Implementation Fees.
As outlined in Sections VI and VII above, MPOWER will provide
set-up, implementation, interface development and installation
services based upon the implementation requirement task list
and related hours outlined in Exhibit I hereto.
The Implementation Fee of $600,000 (six hundred thousand
dollars) will provide to Customer five-thousand five-hundred
and fifty five hours (5,555) of MPOWER professional staff
services for the services noted above and will be payable as
outlined in the schedule provided in Exhibit E. Such hours
will be accounted for and tracked via weekly time reporting to
Customer.
D. Travel and out of pocket expenses.
The fees set out above do not include travel and other
out-of-pocket expenses which may be incurred by MPOWER in the
course of delivering the products and services described in
this Attachment. MPOWER shall use all its reasonable efforts
to keep these travel and other out-of-pocket expenses to a
minimum. MPOWER will invoice Customer for MPOWER's travel and
out of pocket expenses on a monthly basis, as they are
incurred, and Customer agrees to pay such invoices within
thirty (30) days after receipt of the invoice.
E. Other Services
Customer may request and MPOWER may perform other services
("Other Services") for Customer, which services shall be
described in a Work Order, which shall be considered an
addendum to this Agreement and covered under the terms of this
Agreement, unless stated otherwise in the applicable Work
Order. The List Service Fee rate in effect through calendar
year 1999 is [*] ($[*]) Dollars per hour.
F. Additional Training Sessions
* Confidential Treatment Requested
MPOWER MASTER AGREEMENT PAGE 31
32
Customer may request and MPOWER may perform additional
training sessions beyond the scope of the aforementioned
initial End User training, as described in Section VII of this
Attachment. Additional training services shall be described in
a Work Order, which shall be considered an addendum to this
Agreement and covered under the terms of this Agreement,
unless stated otherwise in the applicable Work Order. The rate
in effect for additional training services through calendar
year 1999 is $[1000.00] per day Customer may include as many
of its personnel in such sessions as may reasonably be
accommodated within a classroom environment
IX. THIRD PARTY PRODUCTS
Customer has the option to utilize Third Party Products with MPOWER(R)
as outlined in Exhibit B.
X. ACCEPTANCE
As soon as practicable after completion of preliminary testing,
Customer shall begin using MPOWER(R) in a simulated processing
environment using Customer's data. MPOWER(R) shall be deemed fully
accepted ("Final Acceptance") upon the conclusion of any consecutive
five (5) day period in which the MPOWER(R) functions in simulated
processing mode based on a test plan which has been jointly agreed to
by MPOWER and Customer. Customer shall execute a Certificate of
Acceptance (Exhibit A), which shall be attached hereto and made a part
of this Agreement. The date shown on the Certificate of Acceptance will
be the beginning date of any warranty or maintenance periods provided
for in this Agreement or any Exhibit hereto. Notwithstanding the above,
MPOWER(R) shall be deemed fully accepted upon the earlier to occur of
the date of the Certificate of Acceptance or the placement of MPOWER(R)
in a Live Production Environment.
XI. ADDITIONAL TERMS AND CONDITIONS
In addition to the terms and conditions of this Attachment, the parties
agree that all the terms and conditions of the Master Agreement shall
also apply to Customer's use of MPOWER(R). Should any terms or
conditions of this Attachment and the Master Agreement conflict, the
terms and conditions of this Attachment shall take precedence. Should
any terms or conditions of an applicable Work Order and this Attachment
or the Master Agreement conflict, the terms and conditions of the
applicable Work Order shall take precedence.
MPOWER MASTER AGREEMENT PAGE 32
33
Signature Page
The parties have each read this Attachment and agree to be bound by all of its
provisions. The parties further agree that this Attachment (including its
Exhibits) and the Master Agreement constitute the complete and exclusive
statement of the agreement between the parties regarding MPOWER(R) and
supersedes any and all prior agreements and understandings between them
pertaining to MPOWER(R) and takes precedence over the provisions of any purchase
orders submitted to MPOWER by Customer. This Attachment may be amended only in
writing signed by both parties.
CUSTOMER MPOWER SOLUTIONS INC.
By: /s/ M. XXXXX XXXXXXXXX /s/ XXXX X. XXXXXXX
---------------------------------- -----------------------------------
Signature of Authorized Signatory Signature of Authorized Signatory
M. XXXXX XXXXXXXXX XXXX X. XXXXXXX
---------------------------------- -----------------------------------
Name Printed Name Printed
President/CEO Senior Vice President
---------------------------------- -----------------------------------
Title TItle
2/9/99 2/4/99
---------------------------------- -----------------------------------
Date Date
MPOWER MASTER AGREEMENT PAGE 33
34
EXHIBIT A
FINAL ACCEPTANCE CERTIFICATE
Customer hereby acknowledges and MPOWER Solutions, Inc. hereby accepts that
MPOWEP(R) has been accepted by Customer per the date noted below. This will be
the basis for the beginning of any warranty or maintenance periods provided for
in this Agreement or any Exhibit hereto.
Date of Final Acceptance______________
Accepted by Customer: Accepted by MPOWER:
CUSTOMER MPOWER SOLUTIONS INC.
By:___________________________ By:________________________
Name (Printed):_______________ Name (Printed):____________
Title:________________________ Title:_____________________
Date:_________________________ Date:______________________
MPOWER MASTER AGREEMENT PAGE 34
35
EXHIBIT B
NOT CURRENTLY APPLICABLE.
MPOWER MASTER AGREEMENT PAGE 35
36
EXHIBIT C
MPOWER(R) License Fee Payment Schedule for the License Fees. Refer to
Section VIII A of the Attachment for MPOWER license terms and conditions.
PAYMENT TRIGGERING EVENT EXPECTED PERCENTAGE AMOUNT
TIMEFRAME DUE DUE
Contract Execution [ * ] [ * ] [ * ]
Customer Installation [ * ] [ * ] [ * ]
Completion of Acceptance Test / Go [ * ] [ * ] [ * ]
Live Date
Optional License Extension Based on a [ * ] Per
Quarterly Review Schedule
and Audit of
Customer's current
Life Count as of
the date Audit is
performed by
MPOWER
LICENSE EXTENSION FEE(S):
o Increments of life volume above [ * ] initial lives:
[ * ] lives-[ * ] lives (increments of [ * ]) $[ * ] (each [ * ] lives)
[ * ] lives-[ * ] lives (increments of [ * ]) $[ * ] (each [ * ] lives)
* Confidential Treatment Requested
MPOWER MASTER AGREEMENT PAGE 36
37
EXHIBIT D
MPOWER Annual Maintenance Fee Payment Schedule.
MPOWER billing and Customer paying of Annual Maintenance Fees is outlined in
Section VIII B of the Attachment. Refer to Section VIII B for on-going and
MPOWER Annual Maintenance Fee terms and conditions. The Annual Maintenance Fee
is calculated by multiplying [*] by the current License Fee or if adjusting the
amount based on Quarterly Audits, will be calculated by prorating any current
year amount of Maintenance Fee Customer has paid to MPOWER as of the date of the
Audit by MPOWER and subtracting that amount from [*] of the newly adjusted
License Fee for the current quarter post-audit life count totals. The
Maintenance Fee is due the first year on the date Final Acceptance and "Go Live"
occurs. The Annual Maintenance Fee may be adjusted by MPOWER based on the
Quarterly Audits of Life Count as described in Exhibit C.
PAYMENT ESTIMATED PERCENTAGE DUE ESTIMATED
TRIGGERING EVENT TIMEFRAME -------------- AMOUNT DUE
----------------- --------- ----------
Final Acceptance [*] [*] of First Year Annual [*]
or commencement Maintenance Fee
of Live Production
Environment and
"Go Live Date"
("Acceptance")
First and Annually [*] of Annual Maintenance [*] of Total
Subsequent Thereafter Fee License Fee
Anniversaries of
Acceptance
* Confidential Treatment Requested
MPOWER MASTER AGREEMENT PAGE 37
38
EXHIBIT E
MPOWER Initial Implementation Fee Payment Schedule
MPOWER billing and Customer payment of Implementation Fees are outlined in
Section VIII C of the Attachment. Refer to Section VIII C. for Terms and
Conditions.
PAYMENT ESTIMATED PERCENTAGE DUE ESTIMATED
TRIGGERING EVENT TIMEFRAME -------------- AMOUNT DUE
----------------- --------- ----------
Commencement of [*] [*] [*]
Setup Activities for
Initial
Implementation
Services
Customer [*] [*] [*]
Installation
Completion of [*] [*] [*]
Acceptance Test and
Go Live Date
* Confidential Treatment Requested
MPOWER MASTER AGREEMENT PAGE 38
39
EXHIBIT F
MODULES INCLUDED IN MPOWER(R)
All modules are included by MPOWER and comprise MPOWER(R) as of the
date of this Attachment:
o Set-ups
o Group Enrollment & Contracting
o Premium Billing & Accounts Receivable
o Member / Subscriber Enrollment
o Provider Contracting
o Capitation
o Claims Adjudication for UB92 / HCFA 1500 Claims'
o Certifications / Authorizations
o Customer Service
o Letter Generation
o Medicare Risk
o Medicaid Processing
o Ad Hoc Reporting
MPOWER MASTER AGREEMENT PAGE 39
40
EXHIBIT G
Severity Definitions and Resolution Process
o SEVERITY 1.
The problem causes complete loss of service in the production and
staging environment and work cannot reasonably continue. The problem or
defect has one or more of the following characteristics:
[ ] Data corruption. Physical or logical data is unavailable or
incorrect. Examples: Block format corruption, invalid indices,
corruption of meta-data, incorrect results.
[ ] Critical functionality is not available.
[ ] System hangs. The process hangs indefinitely or there is severe
performance degradation, causing unreasonable waits for resources
or response, as if the system is hanging.
[ ] The entire MPOWER application crashes repeatedly.
[ ] Database process or background processes fall and continue to
fail after restart attempts.
[ ] Potential for above occurrences is defined imminent.
RESOLUTION OF SEVERITY 1: Until the issue is resolved MPOWER Solutions
will work on Severity 1 around the clock (7x24). As a result of the
severity, the customer must provide MPOWER with a point of contact
during the 7x24 period. The customer's point of contact will assist the
MPOWER customer support and development staff in gathering data,
testing fixes in the customer's testing region, and applying fixes to
the customer production environment.
o SEVERITY 2:
Problem or product defect causes a severe impact on the customer's
business regardless of customer environment. No workaround is
available, however operations can continue in a restricted fashion. The
problem or defect has one or more of the following characteristics:
[ ] Business Impact Examples: The customer can handle current volume,
but will not be able to handle quarter close; At close, customer
finds totals wrong, but close is not for a few weeks.
[ ] Internal software error, causing the application to fall to run
to completion, or return wrong results, or software error
severely degrades performance.
[ ] Some important functionality is unavailable, yet the system can
continue to operate in a restricted fashion.
[ ] Potential for above occurrences is defined imminent.
MPOWER MASTER AGREEMENT PAGE 40
41
RESOLUTION OF SEVERITY 2: MPOWER Solutions will work on Severity 2 bug
based on customer assigned priority. Severity 2 fixes will be added in
the next scheduled maintenance or patch release.
o SEVERITY 3.
Problem or product defect causes minimal impact on the Customer's
business. The impact of the problem or defect is minor or an
inconvenience, such as a manual bypass to restore product
functionality. The problem or defect has one or more of the following
characteristics:
[ ] A software error for which there is an acceptable workaround.
[ ] Software error minimally degrades performance.
[ ] Software error or incorrect behavior has minor impact the
operation of the system.
RESOLUTION OF SEVERITY 3: Fixes for severity 3 bugs will be added to
the priority list for the next major scheduled release of the product.
The order of priority for resolving severity 3 issues will be assigned
jointly by the Customer and MPOWER.
o SEVERITY 4.
The problem or product defect causes NO impact on the Customer's
business. The problem or defect is a minor error, incorrect behavior,
or a documentation error that in no way impedes the operation of a
system.
RESOLUTION OF SEVERITY 4: Fixes for severity 4 bugs will be added to
the priority list for the next major scheduled release of the product.
The order of priority for resolving severity 4 issues will be assigned
jointly by the Customer and MPOWER.
MPOWER MASTER AGREEMENT PAGE 41
42
EXHIBIT H
NOT CURRENTLY APPLICABLE.
MPOWER MASTER AGREEMENT PAGE 42
43
EXHIBIT I
Customer Functional Requirements
SEE METHODIST CARE IMPLEMENTATION ATTACHMENT.
MethodistCare Implementation Attachment will identify hours and
associated costs related to development of "Proprietary MethodistCare
Modules" for recovery as set forth in Section II of the Master
Agreement.
[INIT]
MPOWER PLASTER AGREEMENT PAGE 43
44
AMENDMENT NO. 1 TO
MASTER AGREEMENT
This Amendment No. 1 (the "Amendment") to the parties' February 4, 1999
Master Agreement is 'entered into as of the date of the later signature below by
and between Xxxxx.xxx, a Delaware corporation with its principal office at 0000
X. Xxxxxxx'x Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000 ("Xxxxx.xxx")
and Methodist Care, Inc., a Texas licensed health maintenance organization, with
its principal office at Xxx Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000
("Customer").
WHEREAS, on February 4, 1999 Xxxxx.xxx (formerly "Mpower Solutions
Inc.") and Customer entered into a Master Agreement (the "Master Agreement");
and
WHEREAS, the parties desire to amend the Master Agreement as set forth
herein.
NOW, THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, the parties agree that the Master Agreement is
amended to include the following:
1. For the duration of the Master Agreement and for a period of one
year after the service are completed, Client agrees not to employ or solicit the
employment of any Xxxxx.xxx personnel who performed services under the Master
Agreement. Customer agrees to pay Xxxxx.xxx an amount equal to the annual
compensation of such personnel for the one-year period immediately preceding any
hiring or solicitation of any such Xxxxx.xxx personnel. This payment by Customer
constitutes the parties' estimates of that portion of Xxxxx.xxx's damages for
which Customer should be responsible for such activity, and is not a penalty.
The parties agree that this estimate is reasonable under the circumstances
existing as of the date of this Agreement, including, without limitation, the
difficulty of computing such damages exactly.
2. Except as expressly provided in this Amendment, the Master Agreement
shall remain unmodified and in full force and effect. In the event of any
inconsistency or conflict, the provisions of this Amendment shall control and
govern over the provisions of the Master Agreement.
METHODIST CARE, INC. XXXXX.XXX
By: By: /s/ XXXXXX XXXXXXX
--------------------------------- ---------------------------------
Print Name: Print Name: XXXXXX XXXXXXX
------------------------- -------------------------
Title: Title: PRESIDENT & CEO
------------------------------ ------------------------------
Date: Date: 8/27/99
------------------------------- -------------------------------
