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EXHIBIT 10.28
We have omitted certain portions of this document and filed them separately
with the Commission. These portions are marked with an asterisk (*).
JOINT MARKETING AND LICENSING AGREEMENT
This Joint Marketing and Licensing Agreement ("Agreement") is made by
and between HealthStream, Inc., a Tennessee corporation having its principal
place of business at 000 00xx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx
00000 ("HealthStream") and KnowledgeLinc, Inc. having its principal place of
business at 0000 Xxxx 00xx Xxxxxx, Xxxx, Xxxxxxxxxxxx 00000-0000 ("Licensor").
BACKGROUND
WHEREAS, Licensor has developed and continues to develop a product
known as KnowledgeLinc Content, Educational Courses providing continuing
education credits to healthcare professionals;
WHEREAS, HealthStream has developed and marketed and continues to
develop and market a computer-based education system known as the Training
Navigator(TM) ("T.NAV(R)") that delivers and monitors World Wide Web based
content;
WHEREAS, Licensor and HealthStream wish to enter into a cooperative
effort to deploy Licensor's educational offerings utilizing HealthStream's T.NAV
technology on the World Wide Web;
WHEREAS, HealthStream wishes to acquire a license and Licensor has
agreed to grant a license to HealthStream for the delivery of the Continuing
Education product, whether now existing or developed by Licensor during the term
of this Agreement, by HealthStream's T.NAV;
WHEREAS, Licensor and HealthStream wish to provide appropriate
consideration for those efforts that each party has agreed to undertake;
WHEREAS, Licensor and HealthStream each acknowledge the sufficiency and
adequacy of the value, concessions, and recitations set forth herein;
NOW THEREFORE, Licensor and HealthStream agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the terms below shall have the following
meanings:
1.1. "Educational Product" means a self-contained lesson consisting of
Licensor Courses, learning objectives, a posttest, and an evaluation.
Each individual Course, when properly completed is eligible for CE
credit.
1.2. "Effective Date" means September 13, 1999, the date on which both
parties to this Agreement have executed same.
1.3. "HealthStream" means HealthStream, Inc. and any Subsidiary of
HealthStream, Inc.
1.4. "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.
1.5. "KnowledgeLinc Courses" means Licensor Courses that are the proprietary
property of Licensor.
1.6. "Licensing Fee" means a non-refundable advance on royalties paid by
HealthStream to Licensor.
1.7. "Licensor" means KnowledgeLinc, Inc. and any affiliated entity of
Licensor.
1.8. "Licensor Courses" means the information contained in healthcare
library of KnowledgeLinc Content and its incorporated modules
including, but not limited to text and images that are the proprietary
property of Licensor in the modules listed in Exhibit A. Licensor
Courses includes both KnowledgeLinc Courses and Third Party Courses.
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1.9. "Net Revenue" means gross revenue derived by HealthStream from
Transactions Fees less any discounts, refunds, or rebates to customers
and any payments to distribution partners.
1.10. "Subsidiary" means a company in which, on a class-by-class basis, more
than fifty percent (50%) of the stock entitled to vote for the election
of directors is owned or controlled by another company, but only so
long as such ownership or control exists.
1.11. "T.NAV(R)" is a branded trademark of HealthStream and is a computer
based training product that delivers and monitors World Wide Web based
Content.
1.12. "T.NAV(R) Commerce" means HealthStream's proprietary computer based
training product that is a derivative product of T.NAV(R) with
additional features added by HealthStream in its sole discretion and
designated by HealthStream in its sole discretion as "T.NAV(R)v.x.x.c."
1.13. "Third Party Courses" means Licensor Courses that are the proprietary
property of a third party to this agreement, including but not limited
to professional trade associations from which Licensor has licensed.
1.14. "Transaction Fees" means fees received by HealthStream for healthcare
related training courses based on Licensor Courses delivered over the
Internet via the T.NAV(R).
ARTICLE 2
LICENSE GRANTS
2.1 Subject to the payment of the consideration set forth in Article 3,
Licensor grants to HealthStream a non-exclusive worldwide license to
deliver the Educational Product on the World Wide Web.
2.2 Upon notice from Licensor that Educational Product is no longer
appropriate for use because, for example, it contains erroneous or
outdated information, or in other ways is no longer appropriate for the
awarding of CE credit, HealthStream shall cease to represent that the
Educational Product being so delivered is CE accredited. During the
term of this agreement, Licensor shall restructure the Educational
Product for CE accreditation at its own expense or shall provide an
equivalent number of CE hours of content at no expense to HealthStream.
After this Agreement terminates, HealthStream may, at its option and
expense, seek to have Licensor update the Educational Product.
HealthStream may also seek permission from Licensor to continue to
broadcast the Educational Product without CE credit.
2.3 Licensor shall retain the ownership to all Educational Product,
including but not limited to, text, images, and audio that have been
copyrighted by Licensor under permissions and releases granted by the
authors.
2.4 Any and all rights not expressly granted by either of the parties to
the other are reserved by the respective party claiming reservation of
that right.
ARTICLE 3
PRICE AND PAYMENT
3.1. During the term of this Agreement, HealthStream shall pay to Licensor:
3.1.1. An * advance on royalties for each credit hour of Licensor
Courses it licenses under this agreement, to be paid in three
installments: one third (1/3) upon execution of the Agreement,
one third (1/3) upon launch of the KnowledgeLinc courses, and
one third (1/3) thirty (30) days after the launch. The total
advance for current KnowledgeLinc courses is * provided
HealthStream licenses all two hundred and fifty nine (259)
hours which KnowledgeLinc has published on the Internet.
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3.1.2. A royalty of * of all Net Revenue derived from Transaction
Fees on Third-Party Courses; and
3.1.3. A royalty of * of all Net Revenue derived
from Transaction Fees on KnowledgeLinc Courses.
3.2. HealthStream agrees to deliver monthly sales statements that detail Net
Revenue and payment according to the percentages outlined in this
Article 3 to Licensor within thirty (30) days after the end of each
calendar quarter. These quarterly reports shall indicate the total
number of Transactions for which Licensor derives revenue. HealthStream
shall submit quarterly reports even if no royalties or other amounts
are due for such month. A monthly finance charge based on an annual
rate of prime plus 2% will be assessed on all amounts that are paid
later than thirty (30) days after the end of the last quarter.
ARTICLE 4
HEALTHSTREAM RESPONSIBILITIES TO LICENSOR
4.1 HealthStream will designate a project manager with sufficient
experience and training to resolve issues related to the production,
review and credentialling issues required by this project.
4.2 HealthStream will submit to Licensor a draft paper based version of
each Educational Product it has converted to the Web for review and
approval by Licensor. Licensor will have twenty (20) working days to
conduct its reviews. Any approvals shall not be unreasonably withheld
by Licensor.
4.3 HealthStream agrees to make all changes requested by Licensor in a
timely manner.
4.4 HealthStream will incorporate into each Educational Product:
4.4.1 identifying logo or brand identifying KnowledgeLinc as the
content provider;
4.4.2 an accreditation statement to be provided by Licensor;
4.4.3 objectives to be created and provided by Licensor;
4.4.4 faculty disclosure information about actual or potential
conflicts of interest to be provided by Licensor;
4.4.5 Educational Product evaluation to be provided by Licensor; and
4.4.6 a post test to be provided by Licensor.
4.5 HealthStream shall be responsible for issuing to qualified
professionals a document recognizing the attainment of CE credit,
except as required by the professional associations from whom Licensor
derives Licensor Courses. HealthStream shall develop a system to bar
issuance of such documentation unless the participating professional
has answered seventy-five percent (75%) of the post test questions
correctly. In the event any of these professional associations bars
issuance of such documentation from HealthStream, Licensor and
HealthStream shall devise a process by which HealthStream will
communicate with the professional association so that it may provide
written documentation from its offices to HealthStream users.
4.6 HealthStream shall maintain a database of all users of the Educational
Product and shall provide the following information quarterly to
Licensor:
4.6.1 number of users of each Educational Product;
4.6.2 demographic information;
4.6.3 names of professionals who were issued letters of CE
accreditation for each Educational Product; and
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4.6.4 results of evaluations.
4.7 HealthStream shall submit for Licensor approval the format and content
of advertising, if any, so that Licensor can assure the requirements of
accrediting body guidelines are met. Licensor will have ten (10)
working days to review and approve the format and content of such
advertising.
ARTICLE 5
LICENSOR RESPONSIBILITIES TO HEALTHSTREAM
5.1 Licensor will designate a project manager with sufficient experience
and training to resolve issues related to the production, review and
credentialling issues required by this project.
5.2 Licensor agrees to accredit each Educational Product produced under
this Agreement if, to the extent within its power and in its sole
judgment, Licensor policies and the accrediting body guidelines have
been complied with in all material aspects.
5.3 Licensor agrees to provide initial accreditation for each Educational
Product for two (2) years, with one (1) year extensions possible as
long as, in Licensor's judgment, the material is still current. At its
sole discretion, in accordance with its responsibilities to the
accrediting body guidelines, Licensor may determine at any time that
one or more Educational Product is no longer appropriate for CE
accreditation. In the event the Licensor finds one or more Educational
Product no longer appropriate for CE accreditation, HealthStream agrees
to withdraw the Educational Product, in accordance with Article 2.2.
5.4 For each Educational Product, Licensor shall provide a title,
objectives, post test, and an evaluation form in a timely fashion.
ARTICLE 6
WARRANTIES AND INDEMNITIES
6.1. Licensor represents and warrants that to the best of its knowledge:
6.1.1. Licensor Courses does not infringe any copyright or patent
enforceable under the laws of any country;
6.1.2. Licensor Courses does not violate the trade secret rights of
any third party; and
6.1.3. Licensor Courses represents the then existing reasonable
standards of care.
6.2. Each party agrees to indemnify, hold harmless, and defend the other
from any and all damages, costs, and expenses, including reasonable
attorneys' fees, incurred in connection with a claim which constitutes
a breach of the warranties set forth in Section 6.1 provided, the
charged party is notified promptly in writing of a claim and has sole
control over its defense or settlement, and the party not charged
provides reasonable assistance in the defense of the same.
6.3. Licensor shall have no liability for any claim based on HealthStream's:
6.3.1. use or distribution of Licensor Courses after Licensor's
written notice that HealthStream should cease use or
distribution of Licensor Courses due to a claim, or
6.3.2. combination of Licensor Courses with a non-Licensor program or
data if such claim would have been avoided by the exclusive
use of Licensor Courses.
6.4. For all claims arising under Section 6.3, HealthStream agrees to
indemnify and defend Licensor
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from and against all damages, costs, and expenses, including reasonable
attorneys' fees. In the event Licensor notifies HealthStream that it
should cease distribution of Licensor Courses due to a claim,
HealthStream may terminate this Agreement.
ARTICLE 7
INTELLECTUAL PROPERTY PROVISIONS
7.1. HealthStream will cause to appear on all marketing or promotional
materials concerning the Licensor Courses, Licensor's copyright,
trademark, or patent notices.
7.2. The parties agree that ownership for any invention conceived or
developed during the course of this Agreement shall vest in accordance
with the patent rules governing inventorship.
7.3. To the extent that source code is written by either party title shall
vest in the party who has written such code.
7.4. Each party is responsible for protecting, documenting, and maintaining
its own intellectual property. Except as expressly set forth herein,
this Agreement does not grant either party any proprietary rights of
any type in the other party's materials, services or Content.
7.5. Both parties acknowledge that, except as otherwise provided herein,
each party owns and retains all right, title and interest in and to its
own Content provided to the other party.
7.6. HealthStream acknowledges that Licensor owns and retains all right,
title and interest in and to Licensor Courses and all Licensor's
products and services arising from the performance of this Agreement.
7.7. Licensor acknowledges that HealthStream owns and retains all right,
title and interest in and to T.NAV Commerce, the T.NAV Commerce source
code, the T.NAV Commerce object code, any derivatives of T.NAV Commerce
and the interface templates designed by HealthStream used to present
and deliver the Licensor Courses.
ARTICLE 8
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 8 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 9
TERM OF AGREEMENT
Provided this Agreement has been properly executed by an officer of Licensor and
by an officer of HealthStream, the term of this Agreement ("Term") shall run
from the Effective Date until two (2) year(s) 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.
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ARTICLE 10
DEFAULT AND TERMINATION
10.1. The non-defaulting party may terminate this Agreement in its entirety
if any of the following events of default occur:
10.1.1. if the defaulting party materially fails to perform or comply
with this Agreement or any provision hereof;
10.1.2. if the defaulting party fails to strictly comply with the
provisions of Article 13, or makes an assignment in violation
of Article 8;
10.1.3. 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;
10.1.4. 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
10.1.5. 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.
10.2. Termination due to a breach of Articles 8 or 13 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 11
OBLIGATIONS UPON TERMINATION
11.1. From and after termination or expiration of this Agreement,
HealthStream shall not employ Licensor Courses or portions thereof
which is owned by Licensor, as part or portion of any product that
HealthStream may use, sell, assign, lease, license, or transfer to
third parties. Both parties shall cease and desist from all use of the
other party's name(s) and associated trademark(s) and, upon request,
deliver to the other party or its authorized representatives or destroy
all material upon which those name(s) and the associated trademarks
appear.
11.2. Articles 6, 7, 11, 12, 13, 14, 15, Section 16.1, and Article 17 shall
survive termination or expiration of this Agreement.
ARTICLE 12
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.),
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INCIDENTAL, INDIRECT, ECONOMIC, OR PUNITIVE DAMAGES EVEN IF THE OTHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
ARTICLE 13
NONDISCLOSURE AGREEMENT
13.1. HealthStream expressly undertakes to retain in confidence all
information and know-how transmitted to HealthStream by Licensor that
Licensor has identified as being proprietary and/or confidential or
that, by the nature of the circumstances surrounding the disclosure,
ought in good faith to be treated as proprietary and/or confidential,
and will make no use of such information and know-how except under the
terms and during the existence of this Agreement. HealthStream shall
not disclose, disseminate or distribute any such confidential
information or know how to any third party without Licensor's prior
written consent. HealthStream agrees to use the same degree of care to
protect Licensor confidential information as HealthStream takes to
protect its own confidential information of like importance. However,
HealthStream shall have no obligation to maintain the confidentiality
of information that:
13.1.1. it received rightfully from another party prior to its receipt
from Licensor;
13.1.2. Licensor has disclosed to a third party without any obligation
to maintain such information in confidence; or
13.1.3. has been or is independently developed by HealthStream.
13.2. Further, HealthStream may disclose confidential information as required
by governmental or judicial order, provided HealthStream gives Licensor
prompt notice of such order and complies with any confidentiality or
protective order (or equivalent) imposed on such disclosure.
HealthStream shall treat the terms and conditions of this Agreement as
confidential; however, HealthStream may disclose such information in
confidence to its immediate legal and financial consultants as required
in the ordinary course of HealthStream's business. HealthStream's
obligation under this Article 13 shall extend to the earlier of such
time as the information protected hereby is in the public domain
through no fault of HealthStream or five (5) years following
termination or expiration of this Agreement. HealthStream shall not
disclose any information on Licensor's unannounced products to
HealthStream's employees or any third party.
13.3. Licensor shall have the same obligations in Sections 13.1 and 13.2
above with respect to HealthStream's information and know-how.
13.4. Both parties shall prepare a mutually acceptable press release, if any,
to announce this Agreement.
ARTICLE 14
AUDITS
14.1. 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 Licensor Courses licensed consistent with generally
accepted accounting principles.
14.2. Licensor may cause an audit to be made of the applicable HealthStream
records that pertain to this Agreement for the sole purpose of
verifying royalty reports issued by HealthStream to
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Licensor 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 Licensor (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 occur no more than once per calendar year and within six
(6) months of the end of the calendar year. Licensor 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, HealthStream agrees to pay Licensor 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.
14.3. 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.
14.4. In the event that either party makes any claim with respect to an
audit, upon the audited party's written request the party who has
requested such audit will make available to the audited party the
records and reports pertaining to such audit prepared by the
independent auditor who performed such audit.
ARTICLE 15
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:
LICENSOR: KnowledgeLinc, Inc.
Xxxxxx Xxxxxxxx
0000 Xxxx 00xx Xxxxxx
Xxxx, Xxxxxxxxxxxx 00000-0000
HEALTHSTREAM: HealthStream, Inc.
Xxxxxx X. Xxxxx, Xx.
General Counsel
000 00xx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
or to such other address as the party to receive the notice or request so
designates by written notice to the other.
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ARTICLE 16
CONTROLLING LAW
16.1. This Agreement shall be construed and controlled by the laws of the
State of Tennessee.
16.2. Neither this Agreement, nor any terms and conditions contained herein,
shall be construed as creating a partnership, joint venture or agency
relationship or as granting a franchise as defined in 16 CFR Section
436.2(a). The price and payment described in Article 3 of this
Agreement shall be construed as a royalty fee for the rights granted in
Article 2 of this Agreement, and not as a franchise fee.
ARTICLE 17
ATTORNEYS' FEES
If either HealthStream or Licensor employs attorneys to enforce any rights
arising out of or relating to this Agreement, the prevailing party in any
proceeding shall be entitled to recover its reasonable attorneys' fees, costs
and other expenses.
ARTICLE 18
GENERAL
18.1. 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. It shall not be
modified except by a written agreement signed on behalf of Licensor 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.
18.2. 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).
18.3. 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.
18.4. The Article headings used in this Agreement and the attached Exhibits
are intended for convenience only and shall not be deemed to supersede
or modify any provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth in Section 1.5 above. All signed copies of this Agreement shall
be deemed originals.
/s/ Xxxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxx, Xx.
------------------------------- ---------------------------
KnowledgeLinc, Inc. HealthStream, Inc.
Xxx Xxxxxxxx Xxxxxx Xxxxx
President Chief Executive Officer
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EXHIBIT A
LICENSOR COURSES
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