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EXHIBIT 10.27
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
BETWEEN HEALTHSTREAM & SCRIPPS CLINIC
This Joint Marketing and Licensing Agreement ("Agreement") is entered
as of November 22, 1999 ("Effective Date") 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") Scripps Clinic,
having its principal place of business 00000 Xxxxx Xxxxxx Xxxxx Xxxx, XxXxxxx,
Xxxxxxxxxx 00000, ("Licensor").
BACKGROUND
WHEREAS, Licensor is a large multi-specialty medical clinic which has
developed and continues to develop Continuing Medical Education ("CME") content
for Physicians;
WHEREAS, Licensor conducts an annual Dermatology conference, the next
of which is titled Melanoma 2000: 10th Annual Cutaneous Malignancy Update
("Melanoma 2000 Conference") and will take place in January of 2000;
WHEREAS, HealthStream has developed and marketed and continues to
develop and market a computer-based education system known as the Training
Navigator ("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(R) 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 Scripps' Melanoma
2000 Conference, by HealthStream's T.NAV(R);
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. "ACCME" means the Accreditation Council for Continuing Medical
Education.
1.2. "CME Courses" means those educational courses that have been reviewed
for continuing education units by an ACCME accredited professional
organization. Those individuals completing the courses may receive
credit toward continuing education requirements.
1.3. "Course" means healthcare related Internet based curricula designed to
be delivered by T.NAV(R) through HealthStream Sites.
1.4. "Educational Activity" means a single module of the Education Product,
specifically, a self-contained lesson consisting of Licensor Content,
learning objectives, a posttest, and an evaluation. Each individual
Educational Activity, when properly completed is eligible for CME
credit.
1.5 "Educational Product" means the adaptation of the Licensor Content into
Educational Activities contained in the Melanoma 2000 Conference,
including but not limited to conversion to a format appropriate for
delivery over the World Wide Web, definition of education objective, a
post test
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and an evaluation form for each segment in accordance with CFCE
policies and the ACCME Essentials and Guidelines for Accreditation of
Sponsors of Continuing Medical Education and Standards for Commercial
Support and Enduring Materials attached as Exhibit B hereto.
1.6 "HealthStream" means HealthStream, Inc. and any Subsidiary of
HealthStream, Inc.
1.7 "HealthStream Sites" means those HealthStream managed and hosted
Internet sites that deliver educational and other content via the
T.NAV(R). HealthStream Sites may be available via the World Wide Web or
through a private Intranet.
1.8 "Internet" means the international network of computers and computer
networks accessible by the public at large of which the World Wide Web
is a subset.
1.9 "Intranet" means an internal network protected from unauthorized users
by a firewall and accessible only by individuals within the
organization serving the network.
1.10 "Launch Date" means the date on which the Educational Product becomes
available to the public on the Internet, not to exceed ninety (90) days
beyond January 20, 2000, the Melanoma 2000 Conference date.
1.11 "Licensor Content" means the information contained in Scripps' Melanoma
2000 Conference including, but not limited to text and images that are
the proprietary property of Licensor that consist of CME in the modules
listed in Exhibit A or in modules that Licensor develops during the
Term as defined in Article 9 herein.
1.12 "Net Revenue" means gross revenue derived by HealthStream from
Transactions Fees less discounts, refunds, and payments to distribution
partners.
1.13 "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.
1.14 "T.NAV(R)" means HealthStream's computer based training product that
delivers and monitors World Wide Web based Content. T.NAV(R) is
available in multiple configurations, each containing common core
functionality with unique features applicable for a given application's
distribution and access requirements, e.g. Internet eCommerce,
Intranet, local area networks, etc. T.NAV(R) is a registered trademark
of HealthStream. T.NAV(R) is also branded as Training Navigator(R), a
trademark of HealthStream.
1.15 "Transactions" means those purchases of Educational Activities by
customers on HealthStream Sites.
1.16 "Transaction Fees" means fees received by HealthStream for
Transactions.
ARTICLE 2
LICENSE GRANTS
2.1 Subject to the payment of the consideration set forth in Article 3,
Licensor grants to HealthStream worldwide license to deliver the
Educational Product on the World Wide Web.
2.2 Upon notice from Licensor that an Educational Activity 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 CME credit, HealthStream shall cease to represent that the
Educational Activity being so delivered is CME accredited. During the
term of this agreement, Licensor shall restructure the Licensor
Educational Activity for CME accreditation at its own expense or shall
provide an equivalent number of CME hours of content at no expense to
HealthStream. After this Agreement terminates, HealthStream may, at its
option and expense,
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seek to have Licensor update the Educational Activity. HealthStream may
also seek permission from Licensor to continue to broadcast the
Educational Activity without CME credit.
2.3 Licensor shall retain the ownership to all Educational Content,
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 HealthStream shall retain the copyright to the Educational Activities
it produces under this agreement.
2.5 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 as defined in Article 9 herein, HealthStream shall pay
to Licensor * of all Net Revenue derived from Transaction Fees.
3.2 HealthStream agrees to deliver quarterly 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 quarter. 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 fund the costs to develop the Educational Product.
4.3 HealthStream will submit to Licensor a draft version of each
Educational Activity 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.
4.4 HealthStream agrees to make all changes requested by Licensor in a
timely manner.
4.5 HealthStream will incorporate into each Educational Activity:
4.5.1 an accreditation statement to be provided by Licensor;
4.5.2 objectives to be created and provided by Licensor;
4.5.3 faculty disclosure information about actual or potential
conflicts of interest to be provided by Licensor;
4.5.4 Educational Activity evaluation to be provided by Licensor;
and
4.5.5 a post test to be provided by Licensor.
4.6 HealthStream shall be responsible for issuing to qualified physicians a
document recognizing the attainment of CME credit. HealthStream shall
develop a system to bar issuance of such documentation unless the
participating physician has answered eighty percent (80%) of the post
test questions correctly.
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4.7 HealthStream shall maintain a database of all users of the Educational
Activity and shall provide the following information quarterly to
Licensor:
4.7.1 number of users of each Educational Activity;
4.7.2 demographic information;
4.7.3 names of physicians who were issued letters of CME
accreditation for each Educational Activity; and
4.7.4 results of evaluations.
4.8 HealthStream shall submit for Licensor approval the format and content
of advertising, if any, so that Licensor can assure the requirements of
ACCME Standards For Commercial Support are met. Licensor will have ten
(10) working days to review and approve the format and content of such
advertising.
4.9 HealthStream shall submit for Licensor approval all promotional
activities related to this project. Licensor will have ten (10) working
days to review and approve such promotional activities.
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 Activity produced under
this Agreement if, in its sole judgment, Licensor policies and the
ACCME's Essentials and Guidelines for Accreditation of Sponsors Of
Continuing Medical Education And Standards For Commercial Support and
Enduring Materials substantially in the form as in Exhibit B hereto
have been complied with in all material aspects.
5.3 Licensor agrees to provide initial accreditation for each Educational
Activity 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 ACCME's
Essentials and Guidelines for Accreditation of Sponsors Of Continuing
Medical Education And Standards For Commercial Support and Enduring
Materials as set forth in Exhibit B hereto, Licensor may determine at
any time that one or more Educational Activity is no longer appropriate
for CME accreditation. In the event the Center for Continuing Education
finds one or more Educational Activities of this Educational Product no
longer appropriate for CME accreditation, HealthStream agrees to
withdraw the Educational Activities, in accordance with Article 2.2.
5.4 For each Educational Activity, 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:
6.1.1. Licensor Content does not infringe any copyright or patent
enforceable under the laws of any country;
6.1.2. Licensor Content does not violate the trade secret rights of
any third party; and
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6.1.3. Licensor Content 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 Content after Licensor's
written notice that HealthStream should cease use or
distribution of Licensor Content due to a claim, or
6.3.2. combination of Licensor Content with a non-Licensor program or
data if such claim would have been avoided by the exclusive
use of Licensor Content.
6.4. For all claims arising under Section 6.3, HealthStream agrees to
indemnify and defend Licensor 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
Content 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 Content, 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 Content 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(R) Commerce, the T.NAV(R) Commerce
source code, the T.NAV(R) Commerce object code, any derivatives of
T.NAV(R) Commerce and the interface templates designed by HealthStream
used to present and deliver the Licensor Content.
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 6) 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
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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 shall run from the
Launch Date until three (3) years after the Launch Date ("Term"), and thereafter
be automatically extended for additional one (1) year periods unless either
party provides thirty (30) days written notice to the non-terminating party.
ARTICLE 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 11, or makes an assignment in violation
of Article 6;
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 Content 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, and Sections 16.2 through 16.6 shall
survive termination or expiration of this Agreement.
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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.),
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 12 shall extend to the earlier of such
time as the information protected hereby is in the public domain
through no fault of HealthStream or five (5) years following
termination or expiration of this Agreement. HealthStream shall not
disclose any information on Licensor's unannounced products to
HealthStream's employees or any third party.
13.3. Licensor shall have the same obligations in Sections 11.1 and 11.2
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.
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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 Content 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 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 HealthStream (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: Scripps Clinic
Xxxxx Xxxxxxx, MD
Vice President of Academic Affairs
Drop GEN2
Department of Academic Affairs
00000 Xxxxx Xxxxxx Xxxxx Xx.
XxXxxxx, Xxxxxxxxxx 00000
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
GENERAL
16.1. This Agreement does not constitute an offer by HealthStream and it
shall not be effective until signed by both parties. Upon execution by
both parties, this Agreement shall constitute the entire agreement
between the parties with respect to the subject matter hereof and
replaces and supplants all prior and contemporaneous communications. It
shall not be modified except by a written agreement signed on behalf of
Partner 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.
16.2. If either HealthStream or Partner 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.
16.3. This Agreement, and the rights of the parties hereto, shall be governed
by and construed in accordance with the laws of the State of Tennessee,
without regard to such state's conflict of laws provisions.
16.4. Neither this Agreement, nor any terms and conditions contained herein,
shall be construed as creating a partnership, joint venture or agency
relationship or as granting a franchise as defined in 16 CFR Section
436.2(a). The price and payment described in Article 4 of this
Agreement shall be construed as a royalty fee for the rights granted in
Article 3 of this Agreement, and not as a franchise fee.
16.5. 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).
16.6. 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.
16.7. 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.
16.8. This Agreement may be executed in one or more counterparts, each of
which will be deemed an original but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date. All signed copies of this Agreement shall be deemed originals.
/s/ X. Xxxxxxx /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------------- --------------------------
Scripps Clinic HealthStream, Inc.
Xxxxx Xxxxxxx, MD Xxxxxx X. Xxxxx, Xx.
Director of Academic Affairs Chief Executive Officer
/s/ RCC
--------------------------------------
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EXHIBIT A
EXISTING LICENSOR CONTENT
Melanoma 2000: 10th Annual Cutaneous Malignancy Update
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EXHIBIT B
THE ACCME'S ESSENTIALS AND GUIDELINES
FOR ACCREDITATION OF SPONSORS OF CONTINUING MEDICAL EDUCATION
AND STANDARDS FOR COMMERCIAL SUPPORT AND ENDURING MATERIALS
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