CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 10.54
[WEBMD LOGO]
December 31, 1998
VIA FACSIMILE TO: (000) 000-0000
--------------------------------
Xx. Xxxxxx X. Xxxxxxxx
President
HBO & Company of Georgia
000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
This letter states the terms of our agreement through which HBO & Company
of Georgia and WebMD, Inc. will market *** subscriptions to WebMD.
HBOC agrees to sponsor three-year WebMD subscriptions for *** physicians
who will be selected by HBOC, originating *** of the subscriptions on January 1,
1999, *** on April 1, 1999, and *** each on July 1, 1999 and October 1, 1999.
HBOC will pay WebMD the subscription sponsorship fee of $29.95 per subscriber
per month in arrears on a monthly basis, with the first payment due on January
31, 1999. The commissions specified in the Strategic Distribution Alliance
Agreement between the parties dated October 23, 1998 will be paid to HBOC on
those subscriptions. HBOC may cancel any subscription it sponsors hereunder
within 30 days after the first anniversary of such subscription, by providing
written notice of cancellation to WebMD, in which case the subscription will
terminate as of the first anniversary date. Similarly, WebMD may cancel the
obligation to pay an annual maintenance fee which would be due otherwise under
the Contract Supplement to the License Agreement between the parties, both dated
December 31, 1998.
___________
*** Omitted pursuant to a request for confidential treatment and filed
separately with the Commission.
If these terms are satisfactory, please sign in the space provided below
and return a copy to us via facsimile at (000) 000-0000. We look forward in
1999 to mutual success in our partnership with HBO & Company.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
cc: Mr. X. Xxxxxx Xxxxxxxx
Xx. Xxx X. Xxxxxxxxxx
Mr. X. Xxxxxxx Xxxxxx
On behalf of HBO & Company of Georgia, the undersigned consents to the agreement
described above.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxx
President
Dated: 12/31/98
---------------------------
Contract No. C9801611
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement"), dated the 31 day of December, 1998,
by and between HBO & Company of Georgia ("HBOC") with offices at 000 Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000 and Web MD ("Customer") with offices at 000
Xxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxx 00000. For all Software licensed under this
License Agreement, the applicable Contract Supplement ("CS") or Attachment shall
specify: (i) the Software, (ii) the Equipment, (iii) the Services, (iv) the
Fees, (v) the number of active User ID's; (vi) the Facility(ies); and (vii) such
other mutually agreed upon information, if any.
1. LICENSE.
1.1. HBOC hereby grants to Customer a perpetual, non-exclusive, non-
transferable license to use the object code version of the Software on the
Equipment located at Customer's Facility (i) solely for the benefit of persons
and entities located at Customer's Facility and (ii) if applicable, by the
number of Active User ID's, regardless of location, provided that such access
and use of the Software is relevant to the business relationship with Customer,
and in a manner consistent with Customer's own internal business purposes. In
this Agreement (a) "Documentation" means user guides, and operating manuals,
whether in print or machine readable media, in effect as of the date of
shipment, (b) "Facility" means the health facilities owned or operated by or
associated with Customer that are listed on the CS or Attachment, (c) "Active
User ID" means a unique identifier, issued by Customer, for each authorized user
to access software and includes physicians and other caregivers who have
privileges at a Facility, and (d) "Software" means such computer programs listed
on a CS or an Attachment.
1.2. The Software may be transferred temporarily to a backup computer if the
Equipment is inoperative. Customer may make and use the additional copies of
Software and Documentation as reasonably necessary to use the Software and for
testing, disaster recovery, back-up, or archival purposes. Customer shall not
rent, lease or provide remote computer services or distribute the Software, or
permit the use of the Software by an outsource or facility management service to
any third party, without the prior written consent of HBOC. The Software or
Documentation may not be copied or used other than as permitted by this
Agreement.
1.3. As soon as practicable after signing the applicable CS or Attachment, HBOC
shall deliver the Software and one copy of Documentation to the designated site.
2. SOFTWARE MAINTENANCE.
2.1. Software Maintenance shall include, for the two (2) most current releases
of the Software corrections of Software or Documentation due to defects in the
Software or Documentation, as applicable, and improvements to existing
functionality provided by HBOC after the Software Delivery Date but not
otherwise separately priced or marketed by HBOC. HBOC and Customer shall comply
with HBOC's written Software Maintenance procedures as contained in the HBOC
Support Manual incorporated herein by reference, as may be
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reasonably modified from time to time. In addition, HBOC shall provide the
services set forth on a CS or an Attachment with respect to the particular
Software licensed, if any. The license granted to Customer under Section 1 shall
extend to each update, correction, and enhancement release received from HBOC.
2.2. HBOC shall provide, and Customer shall pay for, Software Maintenance for a
period of five (5) years (the "Term"), beginning one (1) year from execution of
the applicable CS or Attachment. Software Maintenance Fees are set forth on the
CS or Attachment and shall be payable on January 1 of each year. The first
annual Software Maintenance Fee shall be due one (1) year from the execution of
the applicable CS or Attachment, and be prorated on a daily basis using a 365-
day year. HBOC may, effective as of the date the first full annual Software
Maintenance Fee is due, increase the Annual Software Maintenance Fee for any
Software once a year by up to *** percent (***%). Upon expiration of the Term,
Software Maintenance shall automatically renew for successive one (1) year
periods unless discontinued under the provisions set forth below. Annual
Software Maintenance Fees during any renewal term shall be subject to an
increase for any Software once a year by the percentage increase in the CPI.
HBOC may (i) suspend Software Maintenance for nonpayment of any sums owed to
HBOC which are undisputed and ninety (90) days or more past due and (ii)
subsequent to the expiration of the Term, discontinue Software Maintenance as to
any Software by written notice given to Customer not less than six (6) months
prior to the date the next annual Software Maintenance Fee would otherwise be
due. Subsequent to expiration of the Term, Customer may discontinue Software
Maintenance as to any Software by notice given to HBOC not later than sixty (60)
days prior to the date the next annual Software Maintenance Fee would otherwise
be due.
2.3. Customer may have source code for Generally Available HBOC-owned Software
escrowed at an impartial third party for their security at Customer's expense.
In the event HBOC ceases to maintain the Software(s) for any reason whatsoever,
Customer shall have a right to obtain access to a copy of such source code;
provided Customer is on Software Maintenance to enable Customer to operate said
Software solely in accordance with the terms of this Agreement.
3. CONFIDENTIALITY; PROPRIETARY RIGHTS.
3.1. Customer and HBOC acknowledge that both parties will become familiar with
proprietary or trade secret information of the other concerning the other's
business affairs, property, methods of operation, processing system or other
information, including Customer's patient and financial data ("Confidential
Information"). Customer and HBOC hereby agree to maintain the confidentiality
of this Agreement and of such information using at least the degree of care and
security as each uses to maintain the confidentiality of its own Confidential
Information. Customer and HBOC acknowledge that their disclosure of any of the
other's Confidential Information without the other's prior written consent,
which consent shall not be unreasonably withheld, may give rise to continuing
irreparable injury to the non-disclosing party, that, therefore, will be
inadequately compensable in damages at law. Accordingly, the non-disclosing
party shall be entitled to obtain immediate injunctive relief against the breach
or
______________________
*** Omitted pursuant to a request for confidential treatment and filed
separately with the Commission.
2
threatened breach by the disclosing party of any of the foregoing undertakings,
in addition to any other legal remedies which may be available, and the
disclosing party hereby consents to the obtaining of such injunctive relief.
3.2. All Software and Documentation, and any modifications or copies thereof,
are proprietary and protected by copyright and/or trade secret law and no
ownership rights are transferred by this Agreement. All proprietary notices
incorporated in, marked on, or affixed to a Software or other Confidential
Information by HBOC or its suppliers shall be duplicated by Customer on all
copies of all or any part of the Software and shall not be altered, removed or
obliterated. Customer shall not reverse reengineer, reverse assemble or reverse
compile any Software or part thereof. All changes, modifications or
improvements made or developed with regard to the Software by HBOC shall remain
the property of HBOC.
4. WARRANTY.
4.1. HBOC warrants that (a) for a minimum of twelve (12) months from the
execution of a CS or an Attachment, and thereafter, as long as all Fees for that
Software have been paid in full when due, the Software (excluding any
programming changes made by Customer), when operating on the Equipment, will
perform in accordance with the Documentation provided to Customer as a part of
the Software; (b) as of delivery to Customer, the Software does not contain and
will not receive from any HBOC data transmission via modem or other HBOC medium
any virus, worm, trap door, back door, timer or clock that would erase data or
programming or otherwise cause the Software or Equipment to become inoperable or
incapable of being used in accordance with its Documentation, and (c) effective
September 30, 1998, the occurrence in or use by the Software of dates on or
after January 1, 2000 (the "Millenial Dates") will not adversely affect the
performance of the Software with respect to date-dependent data, computations,
output or other functions (including, without limitation, calculating, computing
or sequencing), and the Software will create, store and generate output data
related to or including the Millenial Dates without errors or omissions.
4.2. Customer's sole and exclusive remedy for breach of any of the foregoing
warranties shall be either repair or replacement of the defective materials.
4.3. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, HBOC MAKES NO OTHER
WARRANTY OF ANY KIND WHATEVER, EXPRESS OR IMPLIED, AND ALL IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED BY
HBOC AND EXCLUDED FROM THIS AGREEMENT.
5. INFRINGEMENT INDEMNITY.
HBOC agrees to indemnify, defend and hold harmless Customer from and against any
claim asserted or suit or proceeding brought against Customer alleging that any
Software infringes a patent, trademark, copyright or trade secret of a third
party, provided HBOC is given prompt written notice of, and full and complete
authority, information and assistance in the defense of, such claim, suit or
proceeding. HBOC shall not be responsible for the cost of any settlement of any
such claim, suit or proceeding made without the written consent of HBOC. In
addition, and at the option and expense of HBOC, HBOC may, at any time after any
such claim has
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been asserted, and shall, in the event any Software is held to constitute an
infringement, either procure for Customer the right to continue using that
Software, or replace or modify that Software so that it becomes non-infringing,
provided that such replacement or modified Software has the same functional
characteristics as the infringing Software, or, if the prior two remedies are
commercially impractical, refund to Customer all Fees paid by Customer to HBOC
for that Software and any other Software reasonably rendered ineffective as the
result of said infringement. Customer may engage its own counsel, at its own
expense, to advise Customer in connection with any such claim, suit or
proceeding. HBOC shall not be liable to Customer under the terms of this
paragraph or otherwise if any infringement or claim is based upon the use of any
Software in violation of this Agreement, or in combination with any software
other than programs licensed by HBOC to Customer for such use, or arises from a
Software customization performed by HBOC for Customer based upon Customer's
ideas, designs, or specifications. The foregoing provisions state the full
extent of HBOC's responsibility with respect to the indemnity set forth herein.
6. LIMITATION OF LIABILITY.
Except (i) as provided in Section 5 and (ii) in the event of death or personal
injury not as a result of a Software defect, HBOC's CUMULATIVE LIABILITY TO
CUSTOMER FOR ANY BREACH OF THIS AGREEMENT FOR ANY AND ALL CLAIMS, REGARDLESS OF
THE FORM OF ACTION, RELATING TO THE USE OF OR THE INABILITY TO USE THE DEFECTIVE
SOFTWARE SHALL NOT EXCEED THE TOTAL AMOUNT OF THE LICENSE FEE PAID BY CUSTOMER
TO HBOC FOR SAID SOFTWARE, AND ANY OTHER SOFTWARE REASONABLY RENDERED
INEFFECTIVE AS THE RESULT OF SAID DEFECT; PROVIDED, HOWEVER, THAT FOR A PERIOD
OF ONE (1) YEAR AFTER THE LIVE DATE, SAID AMOUNT SHALL BE THE TOTAL OF ALL FEES
PAID BY CUSTOMER TO HBOC UNDER THIS AGREEMENT. UNDER NO CIRCUMSTANCES SHALL
HBOC HAVE ANY LIABILITY TO CUSTOMER FOR ANY CONSEQUENTIAL, EXEMPLARY,
INCIDENTAL, INDIRECT OR SPECIAL DAMAGES OR COSTS, INCLUDING, BUT NOT LIMITED TO,
LOST PROFITS OR LOSS OF GOODWILL, RESULTING FROM ANY VIOLATION OF THIS AGREEMENT
EVEN IF HBOC HAS BEEN ADVISED, KNEW OR SHOULD HAVE KNOWN OF THE POSSIBILITY
THEREOF. Customer acknowledges that the foregoing limitations of liability and
remedies represent bargained for allocations of risk, and that HBOC's Fees,
charges and costs hereunder represent the allocations of such risk.
7. GENERAL.
7.1. Neither this Agreement nor any license hereunder may be assigned by
Xxxxxxxx (whether by operation of law or otherwise) without HBOC's prior written
consent.
7.2. HBOC may from time to time perform an audit to determine compliance with
the terms of this Agreement upon reasonable notice. If the number of copies or
users is found to be greater than that contracted for on any CS or Attachment,
HBOC may charge Customer the applicable current list prices therefor. If the
resulting adjustments to the license fees owing by Customer are greater than 5%
of the license fees previously paid by Customer to HBOC, HBOC may also charge
Customer the reasonable expenses associated with such audit.
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7.3. All fees shall be paid within thirty (30) days after the invoice date.
Customer shall pay all applicable shipping charges and sales, use, personal
property or similar taxes, other than HBOC's income and corporate franchise
taxes. Customer shall reimburse HBOC for all reasonable travel and living
expense incurred by HBOC in rendering services. Customer shall reimburse HBOC
for all reasonable costs incurred (including reasonable attorneys' fees) in
collecting past due amounts owed by Customer.
7.4. On termination of any license granted pursuant to this Agreement, Customer
shall cease using the Software and Documentation and Customer shall certify to
HBOC in writing that all copies (in any form or media) of the Software and
Documentation, whether or not modified or incorporated into new materials, have
been destroyed or returned to HBOC. Termination of this Agreement or any license
shall not relieve Customer's obligation to pay all fees incurred prior to such
termination and shall not limit either party from pursuing any other remedies
available to it. Each party's obligations under Section 3 hereof shall survive
termination of any license or this Agreement.
7.5. Third party Software ("Business Partner Software") sublicensed or
distributed by HBOC to Customer, if any, is identified on the applicable CS or
Attachment. To the extent that the terms or conditions under which HBOC
sublicenses or distributes any such software to Customer differ from the terms
and conditions otherwise stated in this Agreement, said differences are stated
on such CS or Attachment or in shrinkwrap agreements provided with such software
and such differences shall control. In the event that HBOC can reasonably
demonstrate the need to replace or substitute any Business Partner Software, the
parties agree to negotiate in good faith as to the terms and conditions for
Customer to obtain reasonably comparable software or to retain the Business
Partner Software initially licensed.
7.6. This Agreement is subject to any governmental laws, orders or other
restrictions on the export of Software and related information and Documentation
that may be imposed by governmental authorities. Customer shall comply with any
governmental laws, orders or other restrictions on the export and re-export of
Software (including technical data and any related information and
Documentation) which may be imposed from time to time by the governments of the
United States and any country to which any Software is shipped.
7.7. If either party materially breaches any of its obligations hereunder and
fails to remedy such breach within forty-five (45) days of written notice of
such breach, the other party may terminate any license or this Agreement. All
notices relating to termination or default under this Agreement shall be in
writing and delivered by overnight delivery service or certified mail return
receipt requested, to the address of such party specified above (addressed in
the case of HBOC to the attention of the General Counsel) or specified by such
party in accordance with this Section.
7.8. HBOC and Customer agree to make available upon the written request of the
Secretary of Health and Human Services or the Comptroller General, or their
representatives, this Agreement and such books, documents and records as may be
necessary to verify the nature and extent of the costs of the services rendered
hereunder to the full extent required by the Health Care Financing
Administration implementing Section 352 of the Omnibus
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Reconciliation Act of 1980, modified at 42 U.S.C. Section 1396x(v)(1)(l), or by
any other applicable federal or state authority.
7.9. This Agreement shall be governed by and construed in accordance with the
laws in the state in which the Customer is located, exclusive of its rules
governing choice of law and conflict of laws.
7.10. Any action of any kind arising out of or in any way connected with this
Agreement must be commenced within one year of the date upon which the cause of
action accrued (or, if one year is shorter than the minimum period allowed by
law, then the minimum period allowed by law).
7.11. This Agreement, together with the exhibits and addenda hereto, and CSs or
Attachments issued hereunder, constitutes the entire agreement of the parties
and supersedes all previous and contemporaneous communications, representations,
understandings or agreements related to the subject matter hereof. This
Agreement may be modified only in a writing signed by both parties. Customer
may issue a purchase order in lieu of a CS or an Attachment if confirmed by a
HBOC invoice or other HBOC confirming document. Purchase orders shall be
binding upon HBOC only with respect to terms required to be set forth on a CS or
an Attachment. Pre-printed terms and conditions on or attached to any such
purchase order shall be of no force or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date set forth above.
CUSTOMER: HBO & Company of Georgia
By: /s/ X. Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------ -------------------------------
Name Printed: X. Xxxxxxx Xxxxxx Name Printed:
-------------------- ------------------------------
Title: Executive Vice President Title:____________________________
---------------------------
Date: 12/31/98 Date:_____________________________
----------------------------
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HBOC CONTRACT SUPPLEMENT CS# P9801571
CUST# _________
Ship To: Bill To:
Web MD Web MD
400 Lenox Building 000 Xxxxx Xxxxxxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Telephone:____________________
Facsimile:____________________
Contract Supplement to HBOC Agreement #___C9801611____ dated ___12/31/98________
THIS CONTRACT SUPPLEMENT, including all Exhibits, Schedules, and Attachments
hereto and incorporated herein (this "Contract Supplement") amends HBO & Company
Information System Agreement identified above including all Exhibits, Schedules,
and Attachments thereto, and as amended (the "Agreement"). To the extent that
the terms, conditions and definitions set forth in this Contract Supplement
differ or conflict with the terms and conditions set forth in the Agreement,
such differences are stated below and on the attachment(s) hereto and shall
control. Where not different or in conflict with the terms, conditions and
definitions of this Contract Supplement, all applicable terms, conditions, and
definitions set forth in the Agreement are incorporated within this Contract
Supplement as if set forth herein.
SOFTWARE: Software INSTALL/ ANNUAL
ESTIMATED SOFTWARE INSTALLATION DATE: TBD LICENSE EDUCATION MAINTENANCE
FEE FEES
Connect 2000 Lisc. Upgrades *** users $*** 0 $***
TOTAL $*** 0 $***
Payment Terms: Software:
100% due 90 days after delivery
Maintenance starts 12 month from execution of agreement.
Customer Signature: /s/ Xxxxxxx X. Xxxxxx HBOC Signature:____________________________________
-------------------------
Printed Name: /s/ Xxxxxxx X. Xxxxxx Printed Name:______________________________________
------------------------------
Title/Position: CEO Title/Position:____________________________________
-----------------------------
Customer PO#:_______________________________ Date:______________________________________________
Date:_______________________________________
Accepted on Behalf of HBO &
Company of Georgia at Atlanta, Georgia
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------------
Title: President
--------------------------------------------
THANK YOU FOR YOUR BUSINESS
______________________
*** Omitted pursuant to a request for confidential treatment and filed
separately with the Commission.
7
HBOC Information Systems Agreement WebMD
PROPRIETARY AND CONFIDENTIAL TO HBO & COMPANY PB-911985
HBO & COMPANY
AGREEMENT
WITH
WebMD
-----
SOFTWARE TRANSFER AGREEMENT
---------------------------
The Software (as that term is defined in the Agreement between HBO &
Company and the undersigned Customer dated 12/31, 1998 is hereby received by
customer on 12/31, 1998, effected by delivery to Web MD, Atlanta, GA.
DATED this 31 day of December, 1998.
HBO & Company WebMD
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ X. Xxxxxxx Xxxxxx
------------------------------ ------------------------------
Title: President Title: Executive Vice President
-------------------------- ---------------------------
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