EXHIBIT 10.13
SOFTWARE SALE, LICENSE AND DEVELOPMENT AGREEMENT
This is a Software Sale, License and Development Agreement ("Agreement") dated
as of January 20, 1999, (the "Effective Date") by and between Empower Health
Corporation ("EHC"), a Texas corporation having a place of business at 0000
Xxxxxxxx Xxxx Xxxxx, Xxxxxx, Xxxxx 00000 and HealthMagic, Inc. ("HMI"), a
Delaware corporation having a principal place of business at 0000 Xxxxx Xxxxxx,
Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (individually a "party" and collectively, the
"parties").
In consideration of the obligations stated in this Agreement, and other
good and valuable consideration received by each of the parties, the parties
agree as follows:
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PART I. PURPOSE AND SCOPE OF AGREEMENT; DEFINITIONS
1. Purpose and Scope of Agreement
A. HMI is a corporation engaged in developing, marketing and providing
innovative Internet-enabled health information technology systems and
applications including, without limitation, the Lifelong Health Record or "LHR"
(as further defined below). EHC is a corporation engaged in the business of
developing, marketing and maintaining an integrated suite of Internet enabled
consumer oriented software applications and services including, but not limited
to, Xx. Xxxx'x Personal Medical Record System or "PMR" (as further defined
below), Xx. Xxxx'x Community and advertising and promotional services on the
Internet at the web site xxxx://xxx.xxxxxx.xxx (the "EHC Web Site"). The
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parties have entered into this Agreement under which: (i) EHC will sell Xx.
Xxxx'x Personal Medical Record System to HMI; (ii) HMI will further develop its
existing Web-Based LHR and develop a Client-Based LHR using PMR as a starting
point; (iii) HMI will grant EHC the right to "frame" or "embed" the Web-Based
LHR into the EHC Web Site; (iv) HMI will grant EHC the right to use certain
software tools; and (v) HMI will grant EHC the right to use and distribute LHR
in association with EHC Web Site.
The execution, delivery and effectiveness of this Agreement are contingent
upon the simultaneous execution and delivery of: (i) that certain Investment
Agreement by and among Adventist Health System Sunbelt Healthcare Corporation
("Adventist"), EHC and HMI dated January 20, 1999; and (ii) that certain Master
Community Partner Program Agreement by and between Adventist and EHC dated
January 20, 1999.
2. Definitions
Capitalized terms used in this Agreement shall have the meanings given
below or in the context in which the term is used, as the case may be.
A. "Affiliate" shall mean, with respect to a party to this Agreement, any
entity that directly or indirectly controls, or is under common control with, or
is controlled by, such party. As used above, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") means
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
B. "Acquired Assets" shall mean the Acquired Product, the Acquired
Documentation and the Acquired Intellectual Property Rights in such Acquired
Assets.
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C. "Acquired Documentation" shall mean any and all documentation relating to
or associated with the Acquired Product that EHC owns, to the best of EHC's
knowledge, on the Effective Date.
D. "Acquired Intellectual Property Rights" shall mean all of the following as
they relate to the Acquired Assets:
(1) All right, title and interest, under the laws of any country, in
patents and applications for patents and any other government-issued indicia of
invention ownership;
(2) All right, title and interest in all trade secret rights arising under
the laws of any country;
(3) All rights of copyright and all other literary property and author
rights (including moral rights) whether or not copyrightable, under the laws of
any country, and all right, title and interest in all copyright registrations or
applications for copyright registration;
(4) All right, title and interest in all technical data (excluding data of
EHC end users), whether or not protectable by patent, copyright or trade secret
laws; and
(5) All right, title and interest in all causes of action arising under
the patent, copyright, trade secret or other laws of any jurisdiction, which
causes of action have not been asserted as of the Effective Date.
E. "Acquired Product" shall mean Xx Xxxx'x Personal Medical Record System
("PMR") (including all present and predecessor versions thereof and all works in
progress relating to its correction, enhancement or modification), including
both source code and object code versions and all supplements, enhancements and
modifications thereto created by EHC or otherwise, and all audio and/or visual
elements. In addition, Acquired Product includes the framework used for the
development of PMR, whether stand-alone or web based. HMI hereby acknowledges
that the PMR has not been completed and is not a fully functional software
program.
F. "Certifying Authority" shall mean HMI or such other trusted third-party
central administrator: (i) willing to verify the identities of those to whom it
issues certificates and their association with a given key; (ii) that have a
trustworthy public key (that is either publicized or provided with a certificate
from a higher level Certifying Authority attesting to the validity of its public
key); (iii) whose subject identification requirements (e.g., driver's license,
notarized form, fingerprints) engender a high level of confidence to the
certified name-key binding; and (iv) that are capable of issuing Digital
Certificates (including, without limitation, signing the Digital Certificate) to
authenticate the binding between the subject (end user's) name and the subject's
public key.
G. "Client-Based Lifelong Health Record" or "Client-Based LHR" shall mean
HMI's proprietary client-based version of LHR made up of: (i) proprietary
interactive web-browser compatible pages, or other programs, which are installed
and executed locally on an end user's computer and contain functionality
enabling end users to retrieve, document, track and populate their own personal
health information; and (ii) a local "Repository" that is installed and executed
locally on the end user's computer and stores that end user's health data and
such other information as mutually agreed upon by the parties within ninety (90)
days of the Effective Date (or failing mutual agreement through the binding
arbitration procedure described in Part VII.11.D). The Client-Based LHR
includes any Updates, Releases, new Versions, modifications or derivative works
of the Client-Based LHR produced by HMI or on HMI's behalf.
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H. "Digital Certificate" shall mean a digital certificate as defined by the
International Telecommunications Union ("ITU-T") X.509 standard, version 3. As
a general matter, a Digital Certificate: (i) is a document attesting to the
binding of a public key to an individual or other entity; (ii) enables the
verification of a claim that a specific public key does in fact belong to a
specific individual; and (iii) contains information including version, serial
number, signature algorithm ID, issuer name (i.e., the Certifying Authority that
issued the Digital Certificate), validity period, subject (user) name, subject
public-key information, issuer unique identifier, subject unique identifier,
extensions and the signature of the Certifying Authority that issued the Digital
Certificate on the foregoing. Digital Certificates are stored on the subject's
(end user's) computer.
I. "Xx. Xxxx'x Personal Medical Record" or "PMR" shall mean EHC's proprietary
desktop application which includes, but is not limited to the Electronic Medical
Record module.
J. "End Users" shall mean any hospitals, insurance companies or other entities
(including their consumers) and individuals visiting the EHC Web Site.
K. "End-User Data" shall mean the information provided by end users or on
behalf of end users, with their authorization, in the process of using LHR.
Ownership of End-User Data shall in no way be altered by this Agreement.
L. "Health Talk Tool" shall mean HMI's proprietary underlying infrastructure
that supports the construction of secure health applications that enable the
sharing of sensitive information on the public Internet and World Wide Web. Key
features enable a trusted identity for every person accessing sensitive
information, the specification of security policies independent of the
application, the optional generation of the applications that enforce the
security policies, and the decentralized assignment of roles to employees of
providers and health plans. Software deliverables include: (i) the Visual
HealthTalk Studio that enables the entry of meta-data; (ii) the generator
itself; (iii) a tool for building implementations; (iv) Test Suite 98; (v) an
Administration Console; (vi) Charter Editor; and (vii) a Batch Enroller. The
Health Talk Tool includes any and all Updates, Releases, new Versions,
modifications or derivative works of the Health Talk Tool produced by HMI or on
HMI's behalf.
M. "Health Vectors" shall mean, for any particular LHR end user, collections
of health-related data that profiles such end user in his or her role as a
health care consumer which data is generated through the use of the Health
Vector software embedded in the LHR. Different kinds of Health Vectors include,
but are not limited to: (i) health and illness data (e.g., health status,
symptoms, important diagnoses, most recent encounters, medications, recent
treatments); (ii) interests and needs data (i.e., information used and requested
by the consumer); (iii) demographic data (e.g., name, mailing address, gender,
age, race); (iv) registration data (e.g., plan identification, member
identification and enrollment information); and (v) transaction data (i.e., a
summary of the transactions encountered within the service by the end user).
N. "Health Vectors Tool" shall mean HMI's proprietary software development
tool which enables the tailoring of user/computer interactions based on the
user's profile. As of the Effective Date the profile includes age, gender and
health interests but the Health Vectors Tool is architected to profile many
different dimensions each called a vector. Based on the specific health profile
that is comprised of various health data, screens are assembled that contain
articles, Weblinks and Preventive Guidelines tailored to the individual for
various sections of a Web service. Software deliverables include: (i) Content
Attribute Studio; (ii) Active X DLL that represents the application; (iii)
Health Vector Publisher; and (iv) the associated data base schema. The Health
Vectors Tool includes any and all Updates,
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Releases, new Versions, modifications or derivative works of the Health Vectors
Tool produced by HMI or on HMI's behalf.
O. "Health Tool Application" shall mean any application created using the
Health Talk Tool or the Health Vectors Tool.
P. "Lifelong Health Record" or "LHR" shall mean the Web-Based LHR, EHC LHR (as
defined in Part IV.3.B) and the Client-Based LHR.
Q. "Personal Medical Record" shall have the meaning provided in Exhibit D to
this Agreement.
R. "Release Number" shall mean the second decimal place in the number assigned
to any software by the supplier of such software (e.g., the Release Number of
XYZ 6.1.23 would be 1). A new "Release" means a software upgrade that adds new
features, corrects bugs or defects and in which the Release Number is
incremented while the Version Number remains unchanged (e.g., XYZ 6.2.0 would be
a new Release as compared to XYZ 6.1.23).
S. "Update Number" shall mean the third decimal place in the number assigned
to any software by the supplier of such software (e.g. the Update Number of XYZ
6.2.23 would be 23). A new "Update" means a software upgrade that provides bug
fixes or other minor corrections in which the Version Number and Release Number
remain unchanged and, if the number assigned to the software by the supplier,
the Update Number is incremented (e.g. XYZ 6.1.24 would be a New Update as
compared to XYZ 6.2.23).
T. "Version Number" shall mean the first decimal place in the number assigned
to any software by the supplier of such software (e.g., the Version number of
XYZ 6.2.23 would be 6). A new "Version" means a major software upgrade that
adds substantial new features or other significant changes in which the Version
Number is incremented (e.g., XYZ 7.0.0 would be a new Version as compared to XYZ
6.2.23).
U. "Web-Based Lifelong Health Record" or "Web-Based LHR" shall mean: (i) HMI
proprietary interactive Internet-enabled pages which reside on HMI servers, that
are accessible from HMI licensed web sites containing links to such pages
through a digital certification process ("LHR Enabled Sites") (the EHC Web Site
will be an example of such a web site), and contain functionality enabling end
users to retrieve, document, track and populate their own personal health
information in a secure fashion from any LHR Enabled Site; and (ii) HMI's
proprietary database or "Repository", housed on HMI's servers, that stores each
end user's Health Vectors. The Web-Based LHR includes any and all Updates,
Releases, new Versions, modifications or derivative works of the Web-Based LHR
produced by HMI or on HMI's behalf. Supported Versions (as defined in Part
IV.3.C(3)) of Web-Based LHR shall reside on servers specifically designated to
HMI at a Third-Party Secured Site (as defined in Part IV.2.B).
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PART II. SALE OF ACQUIRED ASSETS
1. Sale, Assignment and Transfer of Acquired Assets to HMI
A. EHC hereby irrevocably sells, assigns and transfers to HMI all of EHC's
right, title and interest in and to the Acquired Assets. This exclusive grant
of rights shall include, but is not limited to, the rights to (i) offer, market,
publish, reproduce, distribute, transmit, adapt, maintain, prepare derivative
works, sell, license or otherwise make use of the Acquired Assets (including,
without limitation, all subsequent
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editions, revisions, supplements to, and versions of the Acquired Assets,
regardless of length, nature or state of development) throughout the world in
any form or medium and in any language, and (ii) to license or otherwise
transfer to others the rights commensurate herewith in connection with the
Acquired Assets.
B. As of the Effective Date, HMI shall have the right to obtain and hold in
its own name any intellectual property rights in and to the Acquired Assets and
all copies and derivative works made therefrom (which shall include, but not be
limited to, the right to file patent, copyright and trademark applications in
the U.S. and throughout the world for the Acquired Assets in the name of HMI).
EHC hereby agrees that HMI may act as attorney-in-fact to execute any documents
that HMI deems necessary to record this grant with the U.S. Patent and Trademark
Office, the U.S. Copyright Office or elsewhere. EHC agrees that it will execute
any documents or take any other actions as may reasonably be necessary, or as
HMI may reasonably request, to establish, confirm and defend HMI's ownership of,
and intellectual property rights in and to, the Acquired Assets and all copies
and derivative works made therefrom. The cost of recording and registering
ownership rights in the Acquired Assets shall be borne solely by HMI.
C. As of the Effective Date, EHC shall deliver to HMI a complete set of all
complete and partial copies of the Acquired Assets in all forms (including,
without limitation, source code and object code for software components). The
source code for the Acquired Product delivered shall contain such code,
libraries and other source components so that, when compiled, linked and
otherwise manipulated to create the runtime/executable image for the Acquired
Product, creates a complete and fully operational run-time/executable version of
the Acquired Product. Notwithstanding the foregoing, EHC shall not be required
to deliver any third party software development tools and third party components
used in the creation of the Acquired Assets.
D. EHC reserves the right to request HMI to complete development of PMR in a
commercially reasonable manner, pursuant to a client opportunity. In the event
HMI elects to complete development of PMR pursuant to EHC's request, upon
completion of development of PMR, HMI shall license use of PMR to EHC under the
same terms as LHR under this Agreement (including, without limitation, the
revenue sharing provisions set forth in Part VI which shall apply to PMR in the
same manner as they apply to LHR). In the event HMI elects not to accept EHC's
request, then HMI shall grant a license in and to PMR to EHC under commercially
reasonable terms to complete PMR and use PMR, provided that such license shall
be subject to revocation in the event EHC does not proceed in a commercially
reasonable manner to meet the client opportunity.
2. Representations and Warranties by EHC
Except as otherwise disclosed in Exhibit C. EHC represents and warrants to
HMI, as of the Effective Date, as follows:
A. EHC is the sole and exclusive legal and equitable owner of and holds good,
clear and marketable right and title to the Acquired Product and Acquired
Documentation including, without limitation, all Acquired Intellectual Property
Rights in the Acquired Product and Acquired Documentation. The Acquired Assets
are not subject to a license (other than the licenses contained in this
Agreement) and are not subject to any lien, security interest, royalty
obligation or other interest or claim of any kind. EHC has the sole right to
bring actions for infringement of any Acquired Intellectual Property Rights in
the Acquired Product and Acquired Documentation. Except for this Agreement,
neither the Acquired Product, nor any Acquired Documentation are subject to any
escrow.
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B. EHC is a corporation duly organized and validly existing under the laws of
Texas and the execution of this Agreement by EHC and the transactions
contemplated by this Agreement have been authorized by all necessary corporate
action on the part of EHC and neither the execution of this Agreement by EHC,
nor the transactions contemplated by this Agreement, nor compliance by EHC with
any of its provisions, violates any judgment or order of any court, arbitrator,
or administrative agency applicable to EHC or any of its properties or assets.
C. To the best of EHC's knowledge, there are no pending or threatened disputes
or controversies with EHC's suppliers, customers, consultants, distributors and
others having business relations with EHC relating to the Acquired Assets, nor
any valid basis for a dispute.
D. To the best of EHC's knowledge, there are no suits, proceedings, or
investigations pending or threatened against EHC before any court, arbitrator or
agency based upon or challenging the ownership or use of the Acquired Assets,
including claims for breach of warranty or products liability. There is no
judgment or order entered against EHC which might have a material adverse effect
on the value of the Acquired Assets to HMI. No third party is asserting the
invalidity of this Agreement or seeking to prevent any of the transactions
contemplated by this Agreement.
E. Neither the execution by EHC of this Agreement, nor compliance by EHC with
its terms and conditions will (a) conflict with, or result in a breach or
violation of any provision in the documents under which EHC is incorporated, any
award of any arbitrator in a matter as to which EHC is a party, or any other
agreement or U.S. Government regulations relating to prohibitions on transfer or
export of technology to which EHC is subject, or (b) result in the creation of
any lien upon the Acquired Assets. EHC is not a party to, or otherwise subject
to any provision contained in any agreement which restricts or otherwise limits
the transfer of the Acquired Assets (including, but not limited to, any loan
agreement). EHC is not a party to any license (other than the licenses
contained in this Agreement), joint venture or similar affiliation involving the
Acquired Assets.
F. To the best of EHC's knowledge: (a) The Acquired Assets (including all
Acquired Intellectual Property Rights) and the marketing, reproduction or use of
the Acquired Assets do not infringe upon any patent, copyright, trademark, trade
secret or other proprietary right of any third party; (b) no proceedings have
been instituted, are pending or are threatened which challenge the rights of EHC
under or the validity of the Acquired Intellectual Property Rights; (c) none of
the Acquired Intellectual Property Rights is being infringed upon by others; and
(d) without regard to EHC's knowledge, none of the Acquired Intellectual
Property Rights is subject to any outstanding order or judgment. EHC has taken
all steps reasonably necessary to protect the Acquired Intellectual Property
Rights in the Acquired Assets, including, but not limited to, utilization of the
proper statutory form of copyright notice on all copies of the Acquired Product
and Acquired Documentation commercially distributed prior to the Effective Date.
The representations and warranties set forth in this Part II.2.F (a) shall
survive termination or expiration of this Agreement for injuries which arose
prior to termination or expiration.
G. (a) No source code included in the Acquired Product or Acquired
Documentation has been disclosed to any third party by EHC or any EHC
representative, agent or partner; and (b) any EHC employee, who has been
directly involved in the development of the Acquired Product and Acquired
Documentation has executed a confidentiality and nondisclosure agreement
covering the source code and other non-public information contained in the
Acquired Product and Acquired Documentation.
H. The set of materials provided to HMI by EHC pursuant to Part II.1.C
constitutes a complete set of all full and partial copies of the Acquired Assets
in all forms (including, without limitation, source
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code and object code for software components) that EHC owns, to the best of
EHC's knowledge, as of the Effective Date.
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PART III. LICENSE TO HMI PRODUCTS
1. License
A. Except as set forth in Part VI.1, HMI hereby grants EHC a ninety-nine (99)
year, nonexclusive, nontransferable, world-wide and fully paid-up right and
license commencing on the Effective Date: (i) to use, copy, as well as offer
and distribute to End Users under HMI's standard license, solely in conjunction
and integrated with EHC's software medical applications and services, the
Client-Based LHR (including the Client-Based EHC LHR and upon their initial
release); (ii) to use, copy and display in a manner "framed" by or "embedded"
within the EHC Web Site content, as well as offer and distribute to End Users
under HMI's standard license terms, solely in conjunction and integrated with
EHC's Web Site, the Web-Based LHR (including the Web-Based EHC LHR and upon
their initial release); and (iii) to use internally in its own business, copy,
(as well as use to develop, offer and distribute, under EHC's standard license,
Health Tool Applications), the Health Talk Tool and the Health Vectors Tool;
provided, however, EHC may not develop or contract for the creation of Health
Tool Applications that, in the reasonable discretion of HMI, compete with the
Health Talk Tool or the Health Vectors Tool. HMI hereby grants to EHC the same
licenses to the manuals related to LHR, solely for use with the LHR (the "LHR
Documentation"). This license includes any and all Updates, Releases and new
Versions of LHR, Health Talk Tool and Health Vector Tool that may be provided to
EHC from time to time.
B. HMI shall submit the standard licenses for EHC End Users referenced in Part
III.1.A (i) and (ii) to EHC for review and approval, which approval shall be not
unreasonably withheld or delayed. EHC shall submit its standard license
referenced in Part III.1.A (iii) to HMI for review and approval, which approval
shall be not unreasonably withheld or delayed.
C. EHC acknowledges and agrees that HMI represents that the LHR, Health Talk
Tool, Health Vectors Tool, and related materials ("HMI Materials") are owned by
and shall remain the sole property of, HMI, that the HMI Materials contain,
embody and are based on patented or patentable inventions, trade secrets,
copyrights and other intellectual property rights (collectively, "IP Rights")
owned or controlled by HMI and that HMI shall continue to be the sole owner of
all IP Rights in and to the HMI Materials, including, without limitation, any
derivative works of the HMI Materials produced by HMI or on HMI's behalf. EHC
agrees that it will provide all reasonable cooperation and assistance to HMI, at
HMI's expense, in taking any action necessary or appropriate to establish,
confirm and defend HMI's IP Rights, including, without limitation, the
preparation, filing and prosecution of patent, copyright and trademark
applications and the offering of testimony and other support in connection with
any legal proceedings brought by or against HMI relating to HMI's IP Rights.
D. EHC agrees not to modify, translate, reverse engineer, decompile,
disassemble or extract, as applicable, any ideas, algorithms or procedures from
the whole or any part of the HMI Materials for any reason and shall include this
restriction in all relevant agreements with third parties, (including but not
limited to license agreements and consulting agreements) relating to the HMI
Materials.
E. EHC agrees to reproduce and include HMI's copyright, trademark, and other
proprietary rights notices on any copies of the HMI Materials and the LHR
Documentation, including partial copies and copied materials in derivative
works.
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2. HMI Warranties and Remedies for Breach of Warranty
A. HMI represents and warrants to EHC, as of the Effective Date, as follows:
(1) HMI is a corporation duly organized and validly existing under the
laws of Delaware; and the execution of this Agreement by HMI, and the
transactions contemplated by this Agreement have been authorized by all
necessary corporate action on the part of HMI and neither the execution of this
Agreement by HMI, nor the transactions contemplated by this Agreement, nor
compliance by HMI with any of its provisions violates any judgment or order of
any court, arbitrator, or administrative agency applicable to HMI or any of its
properties or assets.
(2) To the best of HMI's knowledge, there are no pending or threatened
disputes or controversies with HMI's suppliers, customers, consultants,
distributors and others having business relations with HMI relating to the LHR,
Health Talk Tool and Health Vectors Tool, nor any valid basis for a dispute.
(3) To the best of HMI's knowledge, there are no suits, proceedings, or
investigations pending or threatened against HMI before any court, arbitrator or
agency based upon or challenging the ownership or use of the LHR, Health Talk
Tool and Health Vectors Tool, including claims for breach of warranty or
products liability. There is no judgment or order entered against HMI which
might have a material adverse effect on the value of the license rights granted
to EHC pursuant to this Agreement. No third party is asserting the invalidity of
this Agreement or seeking to prevent any of the transactions contemplated by
this Agreement.
(4) Neither the execution by HMI of this Agreement, nor compliance by HMI
with its terms and conditions will (a) conflict with, or result in a breach or
violation of any provision in the documents under which HMI is incorporated, any
award of any arbitrator in a matter as to which HMI is a party, or U.S.
Government regulations relating to prohibitions on transfer or export of
technology to which HMI is subject.
B. Subject to Part III.2.E below, HMI warrants that, during the thirty
(30) days immediately following the delivery of LHR (the "Warranty Period"):
(i) performance of LHR as delivered will not deviate materially from its
specifications as set forth in the LHR Documentation (the "LHR Specifications");
and (ii) any date sensitive software components (i.e., software components the
functionality of which includes processing, providing and/or receiving date
data) of LHR will be year 2000 compliant (i.e., will, when used in accordance
with associated documentation be capable of correctly processing, providing
and/or receiving date data from, into, within or between the twentieth and
twenty-first centuries). For purposes of Part III.2.A (ii) the Warranty Period
shall be from the initial delivery of LHR until December 31, 2000. If EHC
believes there has been a breach of this warranty and so notifies HMI in writing
within the Warranty Period, then HMI will promptly investigate the matter to
determine the nature of the suspected breach. If it is determined that there
has been a breach of this warranty, then HMI's sole obligation, and EHC's
exclusive remedy, will be for HMI to correct or modify LHR to make it perform as
warranted. With respect to the year 2000 warranty, HMI will additionally use
commercially reasonable efforts to reconstitute and/or repair any LHR-stored
data files damaged as a result a year 2000 compliance failure caused by LHR.
C. Subject to Part III.2.E below, HMI warrants that LHR shall not: (a)
constitute, or contain material that would constitute, libel, defamation or
slander; or (b) constitute, or contain material that would constitute, an
invasion of the rights to publicity of any third party or other similar right.
Except as
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set forth in Part VII.2.C, to the extent the breach of this Part III.2.C is due
to content not developed or owned by HMI, HMI's exclusive liability and EHC's
sole remedy for breach of this Part III.2.C shall be for HMI to remove any
content which is the subject of the warranty claim in a commercially reasonable
timely fashion.
D. Subject to Part III.2.E below, HMI warrants that the LHR, Health Talk Tool
and the Health Vectors Tool do not infringe any third party copyrights, patents
or trademark or misappropriate any trade secrets rights of a third party. If a
third party brings an action against EHC making allegations which, if true,
would constitute a breach of this warranty for which HMI is responsible, or if
HMI anticipates such an action, HMI shall have the option, at its expense, to:
(i) modify the infringing item(s) to be noninfringing without materially
changing the functionality of such item(s); or (ii) obtain for EHC a license to
continue using such item(s). This Part III.2.D and Part VII.2.C state HMI's
entire obligation to EHC and EHC's sole remedy with respect to any claim of
intellectual property infringement with respect to LHR, the Health Talk Tool and
the Health Vectors Tool.
E. HMI is not responsible for any claimed breaches of the foregoing warranties
set forth in Part III.2 caused by: (i) Acquired Assets furnished to HMI by EHC
pursuant to Part II.1.C of this Agreement, (ii) modifications made to the HMI
Materials by anyone other than HMI and its authorized personnel working at HMI's
direction; (iii) the combination, operation or use of the HMI Materials with any
third-party equipment or software or other items that HMI did not supply to EHC
(including, without limitation, any EHC provided or developed equipment or
software); or (iv) failure to use any new or corrected versions of HMI
Materials made available by HMI.
F. HMI does not warrant that the HMI Materials will be error-free or that its
operation will be uninterrupted. The obligations set forth in this Part III.2.C
and Part III.2.D (and related other sections) shall survive termination or
expiration of this Agreement for injuries which arose prior to termination or
expiration.
3. Engaging Applications
A. EHC Engaging Applications.
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(1) EHC may create applications that are designed to engage the consumer
in the management of their health that utilize LHR, and that are separate from
LHR, but which interact with LHR, provide data or other input to LHR, or use
data or other output generated by LHR ("Engaging Applications"). HMI
acknowledges that the Engaging Applications created by EHC are owned by and
shall remain the sole property of EHC. If any material functionality or end-user
value of any particular EHC Engaging Application is derived from, related to or
enabled by LHR, EHC shall, subject to Part III.3.A (2) below, and in
consideration of the revenue sharing scheme set forth in Part VI.1.F, offer to
HMI a ninety-nine (99) year, nonexclusive, nontransferable, world-wide right and
license to copy, reproduce, modify, translate and distribute (including
sublicensing and marketing) copies of, and to prepare, have prepared, derivative
works of, and to perform, display and use such EHC Engaging Applications
(including source code, the "EHC Engaging Applications Source Code") for HMI's
internal use and in conjunction with LHR. This license includes any and all
Updates, Releases and new Versions of the Engaging Applications that may be
provided to LHR from time to time. EXCEPT FOR THE WARRANTY PROVIDED IN PART
III.3.C, EHC PROVIDES THE EHC ENGAGING APPLICATIONS SOLELY ON AN "AS-IS" BASIS.
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HealthMagic, Inc 9 Confidential and Proprietary
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(2) During each twelve (12) month period following the Effective Date, EHC
shall, with respect to any EHC Engaging Application the development of which is
completed during such twelve (12) month period, and at the time of such
completion, be entitled to designate to HMI (via a written notice) such EHC
Engaging Application as a "Protected Engaging Application" that EHC need not
offer to license to HMI as provided for in Part III.3.A (1) above; provided that
EHC has not already, during such twelve (12) month period, designated more than
one (1) other EHC Engaging Application as a Protected Engaging Application. EHC
shall deliver any such EHC Engaging Applications which are not Protected
Engaging Applications to HMI within six (6) months from its general release to
EHC customers.
(3) Should HMI create any Engaging Applications for general release to
HMI's customers ("HMI Engaging Applications"), (i) EHC acknowledges that the
Engaging Applications created by HMI are owned by and shall remain the sole
property of HMI; and (ii) if any material functionality or end-user value of any
particular HMI Engaging Application is derived from, related to or enabled by
LHR or if HMI creates a derivative work based an EHC Engaging Application
licensed to HMI under Part III.3.A, HMI shall, in consideration of the revenue
sharing scheme set forth in Part VI.1.F, offer to EHC a ninety-nine (99) year,
nonexclusive, nontransferable, world-wide right and license to use and copy, as
well as offer and distribute to End Users under HMI's standard license terms
(pursuant to Part III.1.B), such HMI Engaging Applications solely for EHC's
internal use and in conjunction with EHC's Web Site. In addition, EHC may
sublicense HMI Engaging Applications to third parties under commercially
reasonable terms; provided that such terms will be at least as protective of
HMI's intellectual property (and intellectual property and other proprietary
rights therein) as is the license to LHR granted to EHC in Part III.1 above.
Should HMI be permitted to sublicense any third-party Engaging Applications to
EHC, HMI may offer EHC the opportunity to purchase a sublicense to such third-
party Engaging Applications. HMI shall deliver any such HMI Engaging
Applications to EHC upon such HMI Engaging Applications general release to other
HMI customers.
B. The license grant set forth in Part III.3.A(3) includes any and all
Updates, Releases and new Versions of the HMI Engaging Applications that may be
provided to EHC from time to time. EXCEPT FOR THE WARRANTY PROVIDED IN PART
III.3.C, HMI PROVIDES THE HMI ENGAGING APPLICATIONS SOLELY ON AN "AS-IS" BASIS.
C. Each party warrants that its Engaging Applications licensed to the other
party do not infringe any third party copyrights, patents or trademarks or
misappropriate any trade secrets rights of a third party. If a third party
brings an action against the licensee party making allegations which, if true,
would constitute a breach of this warranty, or if the licensor party anticipates
such an action, the licensor party shall have the option, at its expense, to:
(i) modify the Engaging Application to be noninfringing; or (ii) obtain for the
licensee party a license to continue using the Engaging Application. This Part
III.3.C and Part VII.2.C (in the case of HMI) and Part VII.2.B (in the case of
EHC) state the licensor party's entire obligation to the licensee party and the
licensee party's sole remedy with respect to any claim of intellectual property
infringement for Engaging Applications. The obligation of each party set forth
in this Part III.3.C (and related other sections) shall survive termination or
expiration of this Agreement for injuries arising prior to termination or
expiration.
4. Source Code Escrow
A. HMI agrees that it will deliver (subject to the terms and conditions of
this Part III.4) within thirty (30) days after (i) the delivery of PMR to HMI,
one (1) copy of the source code, (if any) for PMR (the "PMR Source Code"); (ii)
the Effective Date, one (1) copy of the source code for each of such Tools (the
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HealthMagic, Inc 10 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
"Health Tools Source Code"); (iii) the initial release of the Web-Based LHR or
(with respect to Web-Based LHR) within 180 days of the Effective Date (whichever
is shorter), one (1) copy of the source code for the Web-Based LHR, including
the EHC version thereof; and (iv) the initial release of the Client-Based LHR,
one (1) copy of the source code for the Client-Based LHR, including the EHC
version thereof (the source code for Web-Based LHR and Client-Based LHR are
collectively referred to as the "LHR Source Code") to Data Securities
International, Inc. ("DSI"), 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, XX
00000. HMI and the EHC shall, promptly following the Effective Date, negotiate
and execute a three party Technology Escrow Agreement with DSI governing the
terms of the escrow arrangement and such Technology Escrow Agreement shall be
attached and incorporated as Exhibit F to this Agreement. The source code
delivered into escrow under this Part III.4.A means a copy of the code,
libraries and other source components so that, when compiled, linked and
otherwise manipulated to create the runtime/executable image for the delivered
software, creates a complete and fully operational run-time/executable version
of the delivered software.
B. The Technology Escrow Agreement shall provide the events under which EHC
may exercise its rights to obtain access to all or any part of the Health Tools
Source Code, the PMR Source Code and/or the LHR Source Code, however such
conditions shall be limited as follows:
(1) EHC may exercise its rights under the Technology Escrow Agreement and
obtain access to Web-Based LHR Source Code, including the EHC version thereof,
upon, subject to Part III.4.B(5) below: (i) failure on the part of HMI to
resolve material errors in Web-Based LHR in a commercially reasonable manner (as
determined by prevailing industry standards); (ii) material failure by HMI to
meet the Service Levels (exclusive of failures caused by the Third-Party Secured
Site over which HMI has no control,) on a continuing basis; (iii) a material
failure by HMI to comply with the End-User Data Standards; (iv) upon termination
of this Agreement for cause by EHC pursuant to Part VII.10.A based upon a breach
of Part III.2.B, Part III.4.A, Part III.4.C, Part IV.3.C(1) or (3), or Part
VII.6; (v) breach by HMI of the document which shall be developed pursuant to
Part VII.7.A; (vi) termination of this Agreement by EHC pursuant to Part
VII.10.B; or (vii) termination of this Agreement by HMI pursuant to Part VII.5.
(2) EHC may exercise its rights under the Technology Escrow Agreement and
obtain access to Client-Based LHR Source Code, including the EHC version
thereof, upon, subject to Part III.4.B(5) below: (i) failure on the part of HMI
to resolve material errors in Client-Based LHR in a commercially reasonable
manner (as determined by prevailing industry standards); (ii) upon termination
of this Agreement for cause by EHC pursuant to Part VII.10.A based upon a breach
of Part III.2.B, Part III.4.A, Part III.4.C, , or Part IV.3.C(1) or (3); (iii)
termination of this Agreement by EHC pursuant to Part VII.10.B; or (iv)
termination of this Agreement by HMI pursuant to Part VII.5.
(3) EHC may exercise its rights under the Technology Escrow Agreement and
obtain access to the PMR Source Code upon termination of this Agreement for
cause by EHC, subject to Part III.4.B(5) below, pursuant to Part VII.10.A,
pursuant to Part VII.10.B or termination of this Agreement by HMI pursuant to
Part VII.5.
(4) EHC may exercise its rights under the Technology Escrow Agreement and
obtain access to the Health Tools Source Code upon, subject to Part III.4.B(5)
below: (i) termination of this Agreement for cause by EHC pursuant to Part
VII.10.A based upon a breach of Part III.2.B, Part III.4.A, Part III.4.C, Part
IV.4.B, Part IV.4.C, Part IV.3.C(1) or (3), or Part VII.6; (iii) breach by HMI
of the document which shall be developed pursuant to Part VII.7.A; (iv)
termination of this Agreement by EHC pursuant to Part VII.10.B; or (v)
termination of this Agreement by HMI pursuant to Part VII.5.
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HealthMagic, Inc 11 Confidential and Proprietary
Software Sale, License
and Development Agreement Final, January 20, 1999
(5) EHC may not exercise its rights, for any reason, under this Part
III.4.B, except under Part III.4.B(3), with respect to a specific Source Code,
for a period of eighteen (18) months after the initial deposit of such Source
Code into escrow. After such eighteen (18) month period, EHC's exercise of its
rights under pursuant to items (1) through (4) of this Part III.4.B, and access
to the applicable Source Code, shall be subject to HMI first being provided
commercially reasonable time to resolve support issues, as defined by the
parties under Part IV.3.C(1), plus an additional thirty (30) day cure period in
which to resolve the condition triggering EHC's exercise of rights under this
Part III.4.B, during which the applicable Source Code will not be released from
escrow and at the end of which the applicable source code shall remain in escrow
if the condition has been resolved.
C. If and to the extent HMI makes available Updates, Releases or new Versions
of LHR, the Health Talk Tool or the Health Vectors Tool, HMI shall: (i) deposit
with DSI source code of such Updates or Releases on a semi-annual basis; and
(ii) deposit with DSI source code of such new Versions within ten (10) days of
the release of such new Versions, so the escrow account remains current. All
account renewal costs shall be borne by HMI, except that EHC will be responsible
for paying the annual beneficiary fee.
D. License to Source Code Upon Release.
-----------------------------------
(1) Upon EHC obtaining access to the Web-Based LHR Source Code pursuant to
Part III.4.B, HMI grants EHC a non-terminable, worldwide, non-exclusive, fully
paid-up right and license to use such LHR Source Code for any purposes relating
to maintaining, enhancing, preparing derivative works of and supporting Web-
Based LHR and finishing development of Web-Based LHR if initial release has not
yet been achieved. All right, title and interest in and to derivative works made
by EHC pursuant to this Part III.4 shall vest in EHC.
(2) Upon EHC obtaining access to the Client-Based LHR Source Code pursuant
to Part III.4.B, HMI grants EHC a non-terminable, worldwide, non-exclusive, full
paid up right and license to use such LHR Source Code for any purposes relating
to maintaining, enhancing, preparing derivative works of and supporting Client-
Based LHR and finishing development of Client-Based LHR if initial release has
not yet been achieved. All right, title and interest in and to derivative works
made by EHC pursuant to this Part III.4 shall vest in EHC.
(3) Upon EHC obtaining access to the PMR Source Code pursuant to Part
III.4.B, HMI grants EHC a non-terminable, worldwide, non-exclusive right, fully
paid up and license to use such PMR Source Code for any purposes relating to
maintaining, enhancing, preparing derivative works of and supporting PMR, and
finishing development of an initial release of PMR if not yet achieved. All
right, title and interest in and to derivative works made by EHC pursuant to
this Part III.4 shall vest in EHC.
(4) Upon EHC obtaining access to the Health Tools Source Code pursuant to
Part III.4.B, HMI grants EHC a non-terminable, worldwide, non-exclusive, fully
paid up right and license to use such PMR Source Code for the any purposes
relating to maintaining, enhancing, preparing derivative works of and supporting
the Health Talk Tool and the Health Vectors Tool. All right, title and interest
in and to derivative works made by EHC pursuant to this Part III.4 shall vest in
EHC.
E. EHC acknowledges that the LHR Source Code, the PMR Source Code and the
Health Tools Source Code constitute highly sensitive HMI Confidential
Information. If EHC obtains access to the LHR Source Code, the PMR Source Code
or the Health Tools Source Code as provided herein, it agrees to treat such
Source Code as HMI Confidential Information pursuant to Part VII.6 and otherwise
with at
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HealthMagic, Inc 12 Confidential and Proprietary
Software Sale, License
and Development Agreement Final, January 20, 1999
least the same degree of care as it treats the source code to its own
proprietary programs, and further agrees that:
(1) Such Source Code will be used solely for EHC's internal purposes as
expressly permitted in Part III.4.D(1), and will not be made available to third
parties for any reason;
(2) Access to the such Source Code shall be strictly limited to employees
of EHC who have a need to access such Source Code and who have been advised of
the confidential proprietary nature of the such Source Code;
(3) In the event EHC's access to such Source Code occurs outside of a
termination of this Agreement by EHC pursuant to Part VII.10.A (for cause) or
pursuant to Part VII.10.B or by HMI pursuant to Part VII.5, HMI's ongoing
obligations under this Agreement with respect to such Source Code and the
products such Source Code underlies (i.e., LHR, PMR or Health Talk Tool and the
Health Vectors Tool, as applicable) shall cease. Without limiting the generality
of the foregoing, such obligations include: (i) in the case of LHR, those
contained in Part III.4, Part IV.1, Part IV.2.A, Part IV.2.B (if breach of Part
IV.2.B was the event upon which EHC exercised its right to obtain access to the
Web-Based LHR Source Code) and Part IV.3; and (ii) in the case of the Health
Talk Tool and the Health Vectors Tool, those contained in Part IV.4.
(4) In the event EHC's access to such Source Code occurs in the context of
a termination of this Agreement by EHC pursuant to Part VII.10.A (for cause) or
pursuant to Part VII.10.B or by HMI pursuant to Part VII.5, EHC shall continue
to be bound by the terms of Part III.1 of this Agreement with respect to any
copies of LHR, PMR and the Health Talk Tool and the Health Vectors Tool in EHC's
possession for as long as such products are in EHC's possession.
(5) The revenue sharing provisions set forth in Part VI.1 shall cease to
apply with respect to the products such Source Code underlies.
(6) The non-competition provisions set forth in Part V.2 shall cease to
apply with respect to the products such Source Code underlies.
________________________________________________________________________________
PART IV. DEVELOPMENT AND MAINTENANCE OF LHR
1. EHC Services
A. In conjunction with this Agreement, EHC shall provide to HMI a project
manager on a full time basis and an architect, Xx. Xxx Xxxxxxxx, on a half-time
basis (the "EHC Employees"). Such EHC Employees shall provide consulting,
software development and other professional services to HMI for the purposes of
assisting in developing, maintaining and enhancing the Acquired Product, the
Client-Based LHR and the Web-Based LHR consistent with the EHC Employees roles
as an architect and project manager (collectively, "Services").
B. The EHC Employees shall execute HMI standard consulting agreement, a copy
of which is attached hereto as Exhibit A (except that no payment shall be due to
EHC or the EHC Employees under such agreement) and the HMI standard
confidentiality agreement, a copy of which is attached hereto as Exhibit B.
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HealthMagic, Inc 13 Confidential and Proprietary
Software Sale, License
and Development Agreement Final, January 20, 1999
2. Completion of Web-Based LHR
A. Process. The currently existing Web-Based LHR will be further developed by
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HMI with the assistance of the EHC Employees. HMI shall assign the equivalent
of two full time employees (the "HMI EHC Resources") to assist in the
development of the EHC LHR, including EHC Features (as defined below); provided
that during the period before the initial release of the Web-Based LHR, the HMI
EHC Resources shall assist in the development of such initial release of the
Web-Based LHR. Furthermore, as agreed by the parties, during the period before
the initial release of the Web-Based LHR, EHC and HMI shall meet to review the
direction (technical and otherwise) of the Web-Based LHR. During the Term of
this Agreement, EHC shall have a reasonable opportunity to provide comment on
and approve, (such approval shall not be unreasonably withheld), the direction
of the Web-Based LHR, in a timely manner, during the course of such meetings and
during the development of the Web-Based LHR; however, HMI will retain final
control over all aspects of the Web-Based LHR.
B. Third Party Secured Site.
(1) Before the release of the initial Web-Based LHR to EHC, HMI and EHC
will mutually select a commercially reasonable third-party secured site provider
(the "Third-Party Secured Site"), and HMI shall enter into a commercially
reasonable agreement with such Third-Party Secured Site, at which to host LHR on
HMI servers (i.e., servers specifically designated for HMI). Within sixty (60)
days of LHR first being hosted at such Third-Party Secured Site, the parties
shall negotiate in good faith a set of commercially reasonable service levels
(e.g., availability of LHR on the host server) ("Service Levels") which shall be
incorporated into this Agreement in the form of Exhibit E attached to this
Agreement. HMI shall be responsible for all costs associated with the Third
Party Secured Site.
(2) Should a breach of this Agreement by HMI (including, without
limitation, a material failure to meet the Service Levels) occur that would not
have occurred but for: (i) the hosting of LHR at the Third-Party Secured Site;
or (ii) the associated services ancillary to the hosting of LHR at the Third-
Party Site (e.g., telecommunications to and from the Third-Party Secured Site),
then HMI shall have a reasonable period of time (not to exceed thirty (30) days)
in which to work with the Third-Party Secured Site to identify and resolve the
factors contributing to such breach. If such breach persists (or in HMI's
opinion is likely to persist) following such period, HMI's sole obligation to
EHC and EHC's exclusive remedy under this Agreement shall be for the parties to
promptly select another commercially reasonable Third-Party Secured Site, and
following HMI entering into a commercially reasonable agreement with such
alternative Third-Party Secure Site, relocate LHR to such alternate Site.
3. Future Developments and Maintenance of LHR
A. Future Development of LHR. HMI, at its sole discretion may provide
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Updates, Releases or new Versions of LHR. As agreed by the parties, EHC and HMI
shall meet to review the direction (technical and otherwise) of LHR. After the
initial release of LHR, EHC shall have a reasonable opportunity to provide
comment on and approve, (such approval shall not be unreasonably withheld), the
direction of such Updates, Releases or new Versions of EHC's version of LHR, in
a timely manner, when HMI seeks input during the development process; however,
HMI will retain final control over all aspects of LHR.
B. EHC LHR. After the initial release of Web-Based LHR EHC may request that
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certain EHC Features (as defined herein) be added to LHR to create a "Web-Based
EHC LHR" (the EHC versions of the Web-Based LHR and the Client-Based LHR are
collectively referred to as the "EHC LHR"). Upon the initial release of Web-
Based LHR, and at EHC's request, the EHC Employees and the HMR
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HealthMagic, Inc 14 Confidential and Proprietary
Software Sale, License
and Development Agreement Final, January 20, 1999
Resources shall be used to assist in the creation of the EHC LHR as well as
future Updates, Releases or new Versions of the EHC LHR. The EHC LHR and all EHC
Features shall be and remain the property of HMI. "EHC Features" means a
feature, data element or function not part of the then-current Version of LHR
(or the EHC LHR, as applicable): (i) which is an original concept suggested by
EHC; or (ii) which is a feature or function which HMI does not agree to
incorporate as a Suitable Priority as part of LHR pursuant to this Part IV.3.B.
EHC shall provide its requested features and functions for LHR during the normal
course of project planning for LHR. HMI shall in a reasonably timely manner
decide to reject or incorporate such suggested features and functions into the
next Version of LHR, or assign such features and functions a priority level for
incorporation into the a future Version of LHR. If a feature or function is of
a priority level which, in EHC's reasonable judgment, is too low for
incorporation into LHR, the feature and function will be not of "Suitable
Priority", for purposes of Part IV.3.B (ii). Notwithstanding the foregoing, HMI
shall not have the right to reject an EHC Feature which will be incorporated
into the EHC LHR, unless the EHC Feature, in HMI's reasonable discretion would
result in a breach of any of the warranties contained in Part III.2, and HMI may
also limit the programming resources used to develop an EHC Feature to the HMI
EHC Resources. If the parties cannot agree that an EHC Feature is an "original
concept" under of Part IV.3.B (i), then the parties shall resolve this issue
through the binding arbitration procedures described in Part VII.11.D.
(1) The parties shall use commercially reasonable efforts to maintain as
much compatibility as is practicable between LHR and the EHC LHR.
(2) For a period of six (6) months following such time as any EHC Feature
has been incorporated, but in no event longer than nine (9) months after the EHC
Feature has been made available for incorporation, into any new Update, Release
or Version of the EHC LHR ("EHC Exclusivity Period"), HMI shall not make
available to any of its other customers any new Update, Release or Version of
Client-Based LHR or Web Based LHR that contains such EHC Feature. By way of
clarification, this provision in no way restricts HMI from offering,
licensing/distributing or otherwise providing a Client-Based LHR or Web Based
LHR (or any new Updates, Releases or Versions thereof) to the extent that the
Client-Based LHR or Web Based LHR does not include any EHC Features that are
still within their EHC Exclusivity Period.
C. Support.
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(1) The parties shall mutually agree to support provisions, subject to
Part IV.3.C(3), relating to LHR that HMI will provide to EHC during the term of
this Agreement and commencing upon the initial release of the LHR, or failing
mutual agreement, the parties shall define such support provisions through the
binding arbitration procedure described in Part VII.11.D.
(2) HMI agrees that it will offer to EHC's end users, commercially
reasonable end user support for the EHC LHR, subject to Part IV.3.C(3), at a
commercially reasonable price. HMI shall offer the terms of such end user
support for EHC's approval, which approval shall not be unreasonably withheld or
delayed.
(3) At any given time during the term of this Agreement, HMI shall, with
respect to any particular Version of EHC LHR, provide support to EHC for such
Version if and to the extent less than nine (9) months have elapsed since the
time such Version was the current (i.e., most recent)Version of
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HealthMagic, Inc 15 Confidential and Proprietary
Software Sale, License
and Development Agreement Final, January 20, 1999
the EHC LHR (each such Version for which HMI will provide support to EHC are
hereinafter referred to as a "Supported Version").
4. Future Developments, Training and Technical Support for The Health Talk and
Health Vector Tools
A. HMI, at its sole discretion may provide Updates, Releases or new Versions
of the HealthTalk Tool and/or the Health Vector Tool.
B. HMI shall provide to EHC, at no cost to EHC, a total of three (3) days of
training on the HealthTalk Tool and the Health Vector Tool at HMI's facilities,
which may be used by EHC up to one (1) year after the Effective Date. HMI shall
provide additional training as reasonably requested by EHC; provided that EHC
will reimburse HMI for the direct costs incurred by HMI in providing such
training to EHC (along with any reasonable out-of-pocket expenses incurred by
HMI in providing such training to EHC).
C. HMI shall provide technical support to EHC for the current Versions of the
Health Talk Tool and the Health Vectors Tool (and for the prior Version of such
Tools for a commercially reasonable period of time following the release of the
current Version of such Tools). EHC will reimburse HMI for the direct costs
incurred by HMI in providing such technical support to EHC (along with any
reasonable out-of-pocket expenses incurred by HMI in providing such technical
support to EHC).
________________________________________________________________________________
PART V. MARKETING AND QUALITY CONTROL; NONCOMPETITION; TRADEMARKS
1. Marketing and General Quality Control
A. Marketing of LHR. EHC shall use commercially reasonable efforts to
----------------
advertise, promote and market the LHR to its end users and potential customers.
B. General Quality Control.
-----------------------
(1) It is anticipated that EHC will "frame" or "embed" LHR in the EHC Web
Site as a mechanism for accessing LHR. EHC warrants that any non-HMI content
displayed or appearing to the end user in a "frame" or other similar mechanism
including, without limitation, advertisements and the content accessed by
selecting such advertisements, in conjunction with EHC's use of LHR shall not:
(a) constitute, or contain material that would constitute, libel, defamation or
slander; (b) constitute, or contain material that would constitute, an invasion
of the rights to publicity of any third party; or (c) infringe upon the IP
Rights of any third party. Except as set forth in Part VII.2.B, EHC's exclusive
liability and HMI's sole remedy for breach of this Part V.1.B(1) shall be for
EHC to remove any content which is the subject of the warranty claim in a
commercially reasonable timely fashion.
(2) EHC shall not modify, edit, abbreviate, censor or limit LHR's content
transmitted to EHC for display on the EHC Web Site through the LHR user
interface, including HMR Marks in LHR, except for the specific "framing"
contemplated in this Agreement.
(3) Each party shall conduct its business in a fair and ethical manner,
reflecting favorably upon the other party's software and the reputation,
goodwill, image and the credibility of the other party.
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HealthMagic, Inc 16 Confidential and Proprietary
Software Sale, License
and Development Agreement Final, January 20, 1999
2. Non-Competition
A. HMI agrees not to use EHC Sourced End-User Data (as defined in Part
VII.7.A) to directly or indirectly solicit or assist in the solicitation of
EHC's End Users to leave EHC.
B. Within the United States and within any other country in which HMI does
business and/or in which LHR (or any portion thereof) is marketed and/or
licensed, EHC shall not, outside of this Agreement or any other agreement with
HMI: (i) develop itself, contract for the creation of on its behalf, or
represent that it has any product(s) or service(s) that duplicate to any
significant degree the functionality of a Personal Medical Record; (ii) support
or distribute any such product(s) or service(s); or (iii) enter into or maintain
contractual relationships with third parties under which a material portion of
the revenue EHC receives pursuant to such relationships derives from the sale or
license by such third parties of any such product(s) or service(s).
C. Within the United States and any within any other country in which EHC does
business and/or in which the EHC Web Site is marketed and/or licensed, HMI shall
not, outside of this Agreement or any other agreement with EHC: (i) develop
itself, contract for the development of on its behalf, or represent that it has
a Portal Web Site that substantially duplicates the functionality and content of
the EHC Web Site (a "Competitive Portal Web Site"); or (ii) develop and
distribute to third parties an LHR-variant enhanced with content to the extent
that, standing alone, such LHR-variant, when put up on a Web site, is a
Competitive Portal Web Site. A "Portal Web Site" means a machine on the Internet
that is running a Web server to respond to requests from remote Web browsers
which contains both content owned or licensed by the web site owner and acts as
a significant gateway to other web sites. For the avoidance of doubt, HMI may
create, contract for the development of on its behalf, and represent that it has
a web site, so long as that web site does not exceed the limitations of this
Part V.2.C.
D. If the EHC Web Site ceases to be a Market Competitive Product, HMI may
terminate this Agreement, in which case the provisions of this Part V.2 shall
not survive termination of this Agreement. If LHR ceases to be a Market
Competitive Product, EHC may terminate this Agreement, in which case the
provisions of this Part V.2 shall not survive termination of this Agreement.
"Market Competitive Product" shall, in each of the foregoing instances, be
defined by mutual agreement of the parties, or failing mutual agreement through
the binding arbitration procedure described in Part VII.11.D. In the event that
the LHR becomes a noncompetitive product pursuant to this Part V.2.D, material
breach of Part IV.3.B(2) by HMI, or material breach of Part V.2.A or Part V.2.C
by HMI, EHC may provide prompt written notice to HMI. Upon written notice, and
subject to the cure period provided in Part VII.10.A, the non-compete provisions
in this Part V.2 shall terminate and EHC shall have a twelve (12) month
transition period commencing immediately on receipt of such notice by HMI. At
the end of such twelve month transition period, this Agreement shall terminate
in its entirety.
E. For a period of nine (9) months after EHC introduces HMI to any EHC
customer or EHC notifies HMI that a customer is a potential EHC customer, HMI
shall not directly or indirectly solicit or attempt to solicit such EHC
customer. What constitutes a "customer (or potential customer) of EHC" shall be
defined by mutual agreement of the parties, or failing mutual agreement through
the binding arbitration procedure described in Part VII.11.D.
F. Each party acknowledges and agrees that the restrictive covenants placed on
such party in this Part V.2 are reasonable and necessary to protect the
legitimate interests of the other party and that any violation of such
restrictive covenants will result in irreparable injury to the other party.
Each party hereby irrevocably waives any right to challenge or otherwise attempt
to invalidate any of the restrictive
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HealthMagic, Inc 17 Confidential and Proprietary
Software Sale, License
and Development Agreement Final, January 20, 1999
covenants that such party is subject to, or any part(s) thereof. Each party
agrees that, in the event it violates any of the restrictive covenants to which
it is subject, the other party shall be entitled to preliminary and permanent
injunctive relief as well as an equitable accounting of all earnings, profits
and other benefits arising from such violation, which rights shall be cumulative
and in addition to any other rights or remedies to which such other party may be
entitled at law or in equity. If it is determined that any of the restrictive
covenants set forth in this Part V.2, or any part(s) thereof, are illegal or
unenforceable, it is the parties' intent that the scope of the covenant be
reduced to conform to the requirements of law.
For so long as EHC remains a licensee of LHR and/or PMR in any form, and except
as expressly set forth in this Agreement, both parties' obligation under this
Part V.2 shall survive the termination of this Agreement for any reason.
3. HMI Trademarks
A. Trademark License Grant.
-----------------------
(1) HMI is the owner of the "Health Magic" trade name, "Health Talk" xxxx,
U.S. Trademark Application Number 75/323223, the "Compass Man Design", U.S.
Trademark Application Number 75/459701, as well as the rights to marks
associated with the LHR developed by HMI specifically for use with LHR as LHR is
presented on a customer's web site, whether a word, graphic, animated or sound
xxxx (the "HMI Marks"). During the Term of this Agreement, HMI grants to EHC a
non-exclusive license to use the HMI Marks in conjunction and integrated with
EHC's software medical applications and services (the "Licensed Activities").
EHC will use the HMI Marks solely in connection with the Licensed Activities.
HMI does not grant EHC the right to use the HMI Marks in connection with any
products, services and/or business other than the Licensed Activities.
(2) EHC will always use the HMI Marks on and in connection with the Licensed
Activities in a style or size of print distinguishing it from accompanying
wording or text. EHC will display the symbol "TM" to the right and slightly
above the last letter of the HMI Marks identified by HMI as requiring a "TM"
when displayed on promotional and other materials used in advertising and
rendering the Licensed Activities.
(3) Except as contemplated by this Agreement, the license to use the HMI
Marks granted by Part V.3.A(1) of this Agreement may not be assigned or
otherwise transferred by EHC. HMI does not grant, and nothing in this Agreement
will be construed as granting, EHC the right to license, sublicense or authorize
others to use the HMI Marks.
B. Quality Control.
---------------
(1) EHC's use of the HMI Marks and the nature and quality of the Licensed
Activities promoted and marketed by EHC under the HMI Marks will at all times
comply with HMI's written standards and specifications as provided to EHC. EHC
will permit HMI to reasonably inspect any materials used by EHC in the promotion
and marketing of the Licensed Activities under the HMI Marks and all other
records relating to the quality of such activities.
(2) EHC will provide HMI with "proofs" or draft "web pages" of all
materials used in the identification and or promotion of the Licensed Activities
under the HMI Marks for approval by HMI prior to their use which approval shall
not be unreasonably withheld or delayed. Materials used in the
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HealthMagic, Inc 18 Confidential and Proprietary
Software Sale, License
and Development Agreement Final, January 20, 1999
identification and/or promotion of the Licensed Activities will include, but are
not limited to, business cards, stationery, letterhead, web pages and
promotional materials.
(3) If HMI notifies EHC in writing that the Licensed Activities and/or any
materials used by EHC in the promotion and marketing of the Licensed Activities
do not meet the quality standards of HMI as reasonably determined by HMI, EHC
will cease use the HMI Marks in any manner or in connection the Licensed
Activities and materials in question. If, within sixty (60) days after receiving
the above written notification from HMI, EHC cures or otherwise corrects to
HMI's reasonable satisfaction the failure to meet the quality standards of HMI,
EHC will be entitled to resume its use of the HMI Marks in connection with the
promotion and marketing of the Licensed Activities.
C. Trademark Ownership.
-------------------
(1) EHC acknowledges that, as between HMI and EHC, that HMI's rights in
the HMI Marks are valid, that each is the exclusive property of HMI, and can
lawfully be used only with the express license or consent of HMI. Specifically,
as between HMI and EHC, EHC acknowledges HMI's common law rights in the HMI
Marks. EHC will not at anytime do, or cause to be done any act or thing
contesting or in any way impairing or intending to impair the validity of and/or
HMI's rights, title and interest in and to the HMI Marks.
(2) EHC will not in any manner represent that it owns the HMI Marks. EHC
will not register or apply to register the HMI Marks either alone or in
combination with any other word(s) and/or design(s), in any country, state or
jurisdiction.
(3) EHC acknowledges that its use of the HMI Marks will not create any
rights, title, or interest in or to said xxxx in EHC's favor, but that all use
of the HMI Marks by EHC will inure to the benefit of HMI.
________________________________________________________________________________
PART VI. FINANCIAL STRUCTURE
1. Revenue Sharing
Revenues shall be shared in accordance with the allocations described
below, or as mutually agreed to by the parties from time to time. As used
herein, "Revenue" shall mean gross revenue less reasonable amounts paid for
commissions reasonable in light of industry standards and consistent with
industry standards for third-party commissions (EHC's current internal sales
commission is ten percent (10%)), and other reasonable direct costs.
A. Advertising. Any advertising Revenue generated by the EHC Web Site's use
-----------
of the LHR pages, including without limitation, advertisements framing LHR, or
"pop-up" advertising, shall be shared between EHC and HMI with 30% of such
Revenues allocated to EHC and 70% of such Revenues to HMI. Such advertising can
be sold either by HMI and shared with EHC or it can be part of EHC's advertising
inventory and shared with HMI.
B. Sponsorship. Any Revenues generated through sponsorship related to LHR or
-----------
LHR pages shall be shared between EHC and HMI with 30% of such Revenues
allocated to EHC and 70% of such Revenues to HMI.
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HealthMagic, Inc 19 Confidential and Proprietary
Software Sale, License
and Development Agreement Final, January 20, 1999
C. Electronic Data Interchange (EDI). Any Revenues generated through EDI
---------------------------------
agreements reasonably related to LHR shall be shared between EHC and HMI with
30% of such Revenues allocated to EHC and 70% of such revenues to HMI. The
Revenue split for EDI shall be equitably adjusted to the extent that HMI
maintains and administers less than all of the additional programs, services and
support required to connect to the EDI exchange partner. As used herein, "EDI"
shall mean any arrangements which causes data to be transmitted in or out of LHR
repository to a third party (other than a consumer) without the use of the
consumer-oriented LHR front-end application.
D. Clinical Research Organizations (CRO). Any Revenues generated through CRO
-------------------------------------
Transaction reasonably related to LHR shall be shared between EHC and HMI with
30% of such Revenues allocated to EHC and 70% of such Revenues to HMI. As used
herein, a "CRO Transaction" shall occur where any individual selects a study
(research) offer on the EHC Web Site where the study offer was directed to the
individual based on information found in the individual's LHR record.
E. Electronic Commerce (EC). The parties agree to negotiate in good faith the
------------------------
sharing of revenues generated through EC opportunities reasonably related to LHR
as such opportunities arise.
F. Engaging Applications. Any revenues generated by either party through an
---------------------
HMI or EHC Engaging Application shall be shared between EHC and HMI with 70% of
such revenues allocated to the party who developed the Engaging Application and
30% of such revenues to the other party; provided, however, that HMI shall not
be required to share revenue pursuant to this Part VI.1.F for HMI Engaging
Applications if HMI was responsible for generating such revenue; provided that
the HMI Engaging Application is not a derivative work of an EHC Engaging
Application. If and to the extent revenues generated by an EHC Engaging
Application are subject to sharing pursuant to this Part VI.1.F and any other
revenue sharing provisions in this Part VI.1, such revenues shall be shared
pursuant to such other revenue sharing provisions, with the sharing of any
revenues generated by such EHC Engaging Application which are not subject to
such other revenue sharing provisions being determined by this Part VI.1.F.
G. Health Tool Applications. EHC shall, with respect to any Health Tool
------------------------
Application created by EHC which is not reasonably related to LHR and which is
not "framed" by or "embedded" within any EHC web site content, pay to HMI a
portion of the revenue received by EHC pursuant to any transaction of which the
licensing of such Health Tool Application to a third party is a part, in a
manner and to an extent that equitably reflects the relative value of each
party's contribution to the transaction (with HMI's contribution being the
extent to which the Health Vectors Tool and/or the Health Talk Tool enabled the
development of such Health Tool Application). In light of the foregoing, such
portion shall be as mutually agreed upon by the parties.
H. LHR Data "Pool" Sharing. HMI may respond to requests from an advertiser or
-----------------------
a supplier of health related goods and services for information to provide
market research or data analysis of a statistical or demographic nature
(specifically to spot trends and make observations about end users whose data is
contained in LHR) to the extent HMI receives compensation for such services.
Provisions regarding the sharing between the parties of revenues generated by
such activities shall be as mutually agreed upon by the parties; provided that
any revenue sharing scheme shall take into account the quantity and quality of
the End-User Data originating from the EHC Web Site used in responding to the
request.
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HealthMagic, Inc 20 Confidential and Proprietary
Software Sale, License
and Development Agreement Final, January 20, 1999
2. Audits
Each party shall maintain sufficient records to track the revenues
generated under Part VI.1. Either party shall have the right to audit, on a
reasonable basis, the other party's records and agreements to confirm the
accuracy of the revenues reported by such party and compliance with the other
terms and conditions of this Agreement. Such audits shall be at the requesting
party's expense, unless the audit reflects a discrepancy of 8% percent or more
in favor of the other party , in which case, the audited party shall reimburse
the other party for the costs of the audit. In the event of a underpayment,
the audited party, within a reasonable period of time, shall pay the discrepancy
together with interest at a rate of the lesser of (i) one-and-one-half percent
(1 1/2%) per month from the date the discrepancy occurred; or (ii) the maximum
amount allowed by applicable law. In the event of an overpayment, the auditing
party shall, within a reasonable period of time, refund the amount over paid.
3. Opportunities for Revenue Sharing
In instances where EHC derives revenue from any product or services it
markets, offers or provides in which there is a component made up entirely or in
part of products or services (or a group of products or services) for which
revenue sharing applies under this Part VI.1, if a group of such products and
services are priced together, or if one or more of the products and services are
given to an End User free of charge (or at a significant discount) as part of a
deal where the End User buys some products or services and gets some products or
services for free (or at a significant discount), then the portion of the
revenue received by EHC that is allocated to the revenue sharing product or
service will be determined by looking at EHC's separate suggested retail prices
of all products and services that are "bundled" together, and determining what
proportion the suggested retail price of each revenue sharing product or service
bear to the total suggested retail prices of all the products or services
bundled together; and then that proportion of the total amount received would be
allocated to such revenue sharing product or service.
4. Revenue Sharing Procedures
The procedures for the reporting, invoicing and payment of revenues shall
be mutually agreed to by the parties under commercially reasonable terms and
conditions.
5. Most Favored Nation Status
If and to the extent HMI enters into a revenue sharing scheme with a third
party that is better than any of the revenue sharing schemes set forth in Part
VI.1, HMI agrees to adjust the revenue splits in this Agreement to match the
other agreement. By way of clarification, if HMI enters into a revenue sharing
scheme analogous to a scheme in this Agreement, whereby the other customer
receives forty percent (40%) of such revenues, and the other conditions of this
provision are met, EHC's share of advertising revenues for the analogous scheme
would be adjusted to forty percent (40%). However, if the revenue sharing
scheme with such third party is structured in conjunction with up-front cash or
cash equivalent consideration, then the adjustment to the revenue scheme in this
Agreement will be equitably scaled back to take into account the value of such
consideration. Without limiting the generality of the foregoing, the benefit of
the most favored nations status accounted to EHC in this Part VI.5 shall be
shifted by an additional ten percent (10%) to the advantage of EHC (thus, in the
example above, the forty percent (40%) would become forty four percent (44%).
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HealthMagic, Inc. 21 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
6. All Initial Revenues to HMI
Until HMI has received a cumulative amount of One Million Two Hundred and
Fifty Thousand Dollars ($1,250,000) (the "Initial Revenue Amount") in Revenues
from the revenue sharing opportunities under Part VI.1, HMI shall receive all
Revenues from such opportunities, rather than the sharing formulas provided in
Part VI.1. For the avoidance of doubt, each of the formulas provided in Part
VI.1 are deemed to provide that HMI receives one hundred percent (100%) of the
Revenues and EHC receives zero percent (0%) of the Revenues until HMI has
received the Initial Revenue Amount. Once the Initial Revenue Amount has been
achieved, the revenue sharing provisions will apply as stated in Part VI.1.
7. Binding Arbitration for Resolution of Revenue Sharing Disputes
Should the informal dispute resolution procedure fail to resolve a dispute
between the parties with regard to the provisions of this Part VI, including
without limitation the amount and character of such revenue sharing, such
dispute shall be resolved by binding arbitration as described in Part VII.11.D.
8. Cost of Performance
Except as otherwise set forth herein, neither party shall be obligated to
pay any taxes of the other or any other expenses which the other party may be
liable for based upon or in connection with the transactions contemplated by
this Agreement.
9. Survival of Revenue Sharing
A. For so long as EHC remains a licensee of LHR and/or PMR in any form, and
except as expressly set forth in this Agreement, both parties' obligations
under this Part VI shall survive the termination of this Agreement for any
reason.
________________________________________________________________________________
PART VII. COMMON TERMS AND CONDITIONS
1. Warranty Disclaimer
A. THE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT BY EACH PARTY ARE IN
LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
AND ANY IMPLIED WARRANTIES ARISING FROM STATUTE, COURSE OF DEALING, COURSE OF
PERFORMANCE OR USAGE OF TRADE.
2. General Indemnification
A. If, as a result of HMI's negligence or intentional tortious conduct, EHC or
EHC's employees suffer personal injury or damage to tangible property, HMI will
reimburse EHC for that portion of any claims EHC actually pays for which HMI is
legally liable. If, as a result of EHC's negligence or intentional tortious
conduct, HMI or HMI's employees suffer personal injury or damage to tangible
property, EHC will reimburse HMI for that portion of any claims HMI actually
pays for which EHC is legally liable.
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HealthMagic, Inc. 22 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
B. EHC agrees that, in the event a third party brings an action against HMI
based upon a: (i) claimed breach of any of the representations and warranties
being provided by EHC in Part II.2 of this Agreement; (ii) breach of its
obligations pursuant to Part V.1.B of this Agreement; (iii) breach of its
security and other obligations with respect to End User Data pursuant to Part
VII.7; (iv) breach of its confidentiality obligations pursuant to Part VII.6 of
this Agreement or (v) breach of the warranties being provided by EHC in Part
III.3.C or Part V.1.B (to the extent that content developed and owned by EHC is
responsible for the breach of Part V.1.B) of this Agreement, EHC will indemnify,
hold harmless, and defend HMI from and against any and all damages, costs,
losses, claims, causes of action and lawsuits and expenses, including reasonable
attorneys' fees. Notwithstanding the foregoing, EHC's obligation under item
(iii) and (iv) of this Part VII.2.B shall be limited proceeds from the insurance
required to be carried by EHC pursuant to Part VII.9.C and up to One Million
Dollars ($1,000,000) for such item(s) if the insurance does not cover the claim.
C. HMI agrees that, in the event a third party brings an action against EHC
based upon a: (i) claimed breach of any of the representations and warranties
being provided by HMI in Part III.2.A of this Agreement; (ii) claim that the
execution by HMI of this Agreement or compliance by HMI with its terms and
conditions conflicts with or causes a breach or violation of any other
agreement; (iii) an error or omission in LHR; (iv) breach of its security and
other obligations with respect to End User Data pursuant to Part VII.7; (v)
breach of its confidentiality obligations pursuant to Part VII.6 of this
Agreement; or (vi) breach of the warranties being provided by HMI in Part
III.2.C, (to the extent that content developed and owned by HMI is responsible
for the breach of Part III.2.C), Part III.2.D or Part III.3.C of this Agreement,
HMI will indemnify, hold harmless, and defend EHC from and against any and all
damages, costs, losses, claims, causes of action and lawsuits and expenses,
including reasonable attorneys' fees. Notwithstanding the foregoing, HMI's
obligation under items (iii), (iv) and (v) of this Part VII.2.C shall be limited
proceeds from the insurance required to be carried by HMI pursuant to Part
VII.9.C and up to One Million Dollars ($1,000,000) for such item(s) if the
insurance does not cover the claim.
3. Indemnification Procedures
A. Notice. Promptly after receipt by any entity entitled to indemnification
-------
under this Agreement of notice of the commencement or threatened commencement of
any civil, criminal, administrative, or investigative action or proceeding
involving a claim in respect of which the indemnitee will seek indemnification
pursuant to the appropriate provision of this Agreement, the indemnitee shall
promptly notify the indemnitor of such claim in writing. No failure to so
notify an indemnitor shall relieve it of its obligations under this Agreement
except to the extent that it can demonstrate damages attributable to such
failure. Within fifteen (15) days following receipt of written notice from the
indemnitee relating to any claim, but no later than ten (10) days before the
date on which any response to a complaint or summons is due, the indemnitor
shall notify the indemnitee in writing if the indemnitor elects to assume
control of the defense and settlement of that claim (a "Notice of Election").
The indemnitor shall reimburse the indemnitee for all costs and expenses
incurred by the indemnitee in responding to such action or proceeding during the
period between when the indemnitee has notified the indemnitor of the claim in
writing and when the indemnitor delivers a Notice of Election in response or the
expiration of the required notice period for the Notice of Election to be
delivered, whichever comes first.
B. Procedure Following Notice of Election. If the indemnitor delivers a
--------------------------------------
Notice of Election relating to any claim within the required notice period, the
indemnitor shall be entitled to have sole control over the defense and
settlement of such claim; provided that (i) the indemnitee shall be entitled to
participate in the defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim, and (ii) the indemnitor shall
obtain the prior written approval of the indemnitee before entering
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HealthMagic, Inc. 23 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
into any settlement of such claim or ceasing to defend against such claim. After
the indemnitor has delivered a Notice of Election and has assumed its
obligations under this Part VII.3 relating to any claim in accordance with the
preceding paragraph, the indemnitor shall not be liable to the indemnitee for
any legal expenses incurred by the indemnitee in connection with the defense of
that claim. In addition, the indemnitor shall not be required to indemnify the
indemnitee for any amount paid or payable by the indemnitee in the settlement of
any claim for which the indemnitor has delivered a timely Notice of Election if
such amount was agreed to without the written consent of the indemnitor.
C. Procedure Where No Notice of Election Is Delivered. If the indemnitor does
--------------------------------------------------
not deliver a Notice of Election relating to any claim within the required
notice period, the indemnitee shall have the right to defend the claim in such
manner as it may deem appropriate, at the cost and expense of the indemnitor.
The indemnitor shall promptly reimburse the indemnitee for all such costs and
expenses.
4. Limitation of Liability
To the maximum extent permitted by applicable law, each party's entire
liability and the other party's exclusive remedy for damages from any event or
claim arising under or relating to this Agreement, for any cause whatsoever, and
regardless of the form of action, whether in contract or in tort or any other
theory of liability (including, without limitation, breach of warranty and
negligence), will be limited as follows:
A. Each party will be liable for direct damages only, in an amount not to
exceed, in the aggregate for all claims, the greater of: (a) cumulative revenue
share paid to HMI under Part VI.1 in the three (3) month period immediately
proceeding the event giving rise to such liability, or (b) One Million Dollars
($1,000,000.00).
B. In no event will either party be liable for any lost profits, loss of
business, loss of use, lost savings or other consequential, special, incidental,
indirect, exemplary or punitive damages, even if advised of the possibility of
such damages.
C. The foregoing limitations shall not apply to: (i) claims that are the
subject of indemnification pursuant to Part VII.2; or (ii) claims arising out of
the breach of Part V.2, Part VI.1 (but only to the extent of unpaid revenues
plus accrued interest), or Part VII.6.
D. Each party shall have a duty to mitigate damages for which the other party
is responsible.
E. The remedies expressly stated in this Agreement are the sole and exclusive
remedies of either party. The limitations of liability set forth in this Part
VII.4 will survive the failure of any limited or exclusive remedy set forth in
this Agreement and the expiration or termination of this Agreement.
5. Force Majeure
Neither party will be deemed in default of this Agreement to the extent
that performance of its obligations, or attempts to cure any breach, are delayed
or prevented by reason of any act of God, cause outside of the party's
reasonable control or other force majeure; provided that, such party promptly
gives to the other party written notice of the condition and undertakes
commercially reasonable efforts to circumvent the cause of the delay or minimize
the extent of the delay. In any such event, the time for performance or cure
will be extended for a period equal to the duration of the delay, not to exceed
four (4) weeks. If the notifying party does not resume performance of such
obligations or cure such breach
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HealthMagic, Inc. 24 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
before the end of such four (4) week period, the other party will be entitled to
terminate the Agreement immediately without any obligation or liability to the
delayed party for doing so.
6. Nondisclosure
A. Each party acknowledges that it may be furnished with or may otherwise
receive or have access to non-public information which relates to past, present
or future research, development, improvements, inventions, processes, software,
techniques, designs or other technical data, contact lists or other compilations
for marketing or development, or regarding administrative, management, financial
or marketing activities of HMI, EHC or other third parties which have provided
information to HMI or EHC. "Confidential Information" is all information (i)
identified in written, graphic electronic or oral format by the Disclosing Party
as confidential, trade secret or proprietary information, or (ii) or by its
nature or the circumstances surrounding its disclosure should reasonably be
regarded as Confidential Information. "Disclosing Party" is the party
disclosing Confidential Information. "Receiving Party" is the party receiving
Confidential Information. Without limiting the generality of the foregoing,
Confidential Information shall be deemed to include End-User Data and data about
end users contained in Health Vectors, and the terms and conditions of this
Agreement.
B. All Confidential Information furnished or otherwise disclosed to either
party in the course of performing this Agreement shall remain the property of
and be deemed proprietary and confidential to the Disclosing Party (with the
exception of End-User Data which shall be deemed, for the purposes of protecting
the confidentiality of such End-User Data under this Agreement, to be
confidential to the Disclosing Party). Without limiting the foregoing, the
Receiving Party agrees: (a) to the extent permitted by applicable law, to hold
such Confidential Information in strict confidence and in trust for the
Disclosing Party; (b) to use the same degree of care in protecting the
Confidential Information for which it protects its own such confidential
information of like nature, but in no instance with less than reasonable care
to protect such Confidential Information against unauthorized use or disclosure;
and (c) to restrict disclosure of such Confidential Information to its employees
who (i) are directly participating in the performance of this Agreement; (ii)
have a need to know such Confidential Information; and (iii) have, upon the
request of the Disclosing Party as a prerequisite to the release of Confidential
Information, executed an employee nondisclosure agreement in a form mutually
acceptable to the Disclosing Party and the Receiving Party.
C. The Receiving Party further agrees that, with regard to Confidential
Information which it has received or itself generated, it will not disclose or
allow to be disclosed any such Confidential Information to any third party,
including, without limitation, any subsidiary, Affiliate, joint venture, any
other contractual, cooperative, or affiliated entity of the such third party, or
any independent entity without the express prior written consent of the
Disclosing Party, which consent the Disclosing Party may give or withhold in its
sole discretion unless disclosure of such Confidential Information is required
by applicable law. If a Disclosing Party consents to the disclosure of such
Confidential Information to any such third party, such disclosure shall not be
made until Receiving Party, the Disclosing Party and the third party have
entered into a non-disclosure agreement in a form acceptable to the Disclosing
Party.
D. The Receiving Party shall not reproduce, disclose or use Confidential
Information, except for the sole purpose of performing its obligations under
this Agreement or in accordance with applicable law. Without limiting the
generality of the preceding sentence, the Receiving Party may not use
Confidential Information which it has received, collected or itself generated
for purposes other than performing its obligations under this Agreement without
the prior written consent of the Disclosing Party.
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HealthMagic, Inc. 25 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
E. The limitations on reproduction, disclosure, or use of Confidential
Information shall not apply to, and neither party shall be liable for,
reproduction, disclosure, or use of any particular Confidential Information of
the other that:
(1) was developed independently by the Receiving Party prior to the
receipt of any Confidential Information under this Agreement, as evidenced by
written documents prepared or received by such party prior to the receipt of any
Confidential Information under this Agreement;
(2) was received without any obligation of confidentiality from a third
party that was rightfully in possession of such information and had the right to
disclose it to the Receiving Party without an obligation of confidentiality;
(3) has been published or otherwise disclosed to others by the Disclosing
Party without restrictions, or has come within the public knowledge or become
generally known to the public without breach of this Agreement;
(4) is a derivative of End-User Data (or data about end users contained in
Health Vectors) that is of a statistical/demographic nature and provided in an
anonymous form, as an aggregate of the similar information of multiple end users
that does not individually identify specific end users (e.g., the number of LHR
end users who are males between the ages of 25 and 40 reporting a particular
condition); or
(5) is legally required to be disclosed pursuant to a judicial order
(provided that, prior to such disclosure, the party ordered to make such a
disclosure promptly informs the other of the order).
The party seeking the protection of any of items (1) through (5) above shall
bear the burden of proof with respect to any such exception. Immediately upon
receipt by the Receiving Party of any request to release, disclose or use
Confidential Information, where such release, disclosure or use is required by
applicable law and is otherwise in contravention to the terms and conditions of
this Agreement, Receiving Party shall provide Disclosing Party written notice of
such request. Such notice shall be calculated to be sufficiently descriptive
and in advance of any such release, disclosure or use so as to allow Disclosing
Party the opportunity to raise any appropriate objections. Disclosing Party
shall be solely responsible for raising such objections and shall bear all
costs, including legal costs, associated with such objections. Confidential
Information may be disclosed on a need to know basis to the accountants and
attorneys of the Receiving Party without the consent of the Disclosing Party.
F. Should the Receiving Party receive information with uncertain status, the
Receiving Party agrees to treat such information as Confidential Information
until it receives written verification from the Disclosing Party that such
information is not Confidential Information.
G. Neither the execution of this Agreement, nor the furnishing of any
Confidential Information by the Disclosing Party or the Receiving Party shall be
construed as granting to either party expressly, by implication, by estoppel or
otherwise, any license under any trademark, copyright, invention or other
proprietary right now or hereafter owned or controlled by the party furnishing
such information.
H. Except as otherwise set forth in this Agreement, upon termination or
expiration of this Agreement for any reason, the Receiving Party shall, at the
Disclosing Party's option, either return or destroy all Confidential
Information, and shall destroy all analyses, compilations, forecasts, studies
and other documents based upon or derived from such Confidential Information,
and in each case shall retain
________________________________________________________________________________
HealthMagic, Inc. 26 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
no copies and shall cause an officer of the Receiving Party to certify in
writing that it has complied fully with its obligations under this Part VII.6.H.
I. With regard to Confidential Information which either party has received or
itself generated, in the event either party becomes aware of any release,
disclosure or use of such Confidential Information which has not been authorized
by this Agreement, it will promptly, at its sole expense, (i) notify the
Disclosing Party in writing; (ii) take such actions as may be necessary or
reasonably requested by the Disclosing Party to minimize such unauthorized
release, distribution or use and any damage to the Disclosing Party resulting
therefrom; and (iii) to the extent permitted by applicable law, cooperate in all
reasonable respects with the Disclosing Party to minimize any such release,
distribution, use and damage. The Receiving Party shall be considered to have
cured its breach of this Part VII.6 provided that: (i) the Receiving Party has
taken commercially reasonable efforts to modify its nondisclosure procedures and
educate its personnel to reduce the likelihood of similar breaches of this Part
VII.6; and (ii) the Receiving Party has made commercially reasonable efforts to
limit further disclosures by the person(s) or entity(ies) to whom unauthorized
disclosure was made.
J. The provisions of this Part VII.6 shall survive the termination or
expiration of this Agreement for any reason for a period of five (5) years;
provided, however, that such provision shall continue to apply: (i) to End-User
Data; (ii) to the LHR Source Code, PMR Source Code, EHC Engaging Applications
Source Code and Health Tools Source Code; and (iii) as necessary to comply with
any applicable laws, regulations, ordinances and codes.
7. Rights in Data; Security
A. Within ninety (90) days of the Effective Date, the parties shall in good
faith commence negotiations to mutually agree upon a set of standards to govern:
(i) the location of particular elements or types of End-User Data, as between
LHR and the EHC Web Site; (ii) the presentation of derivatives of End-User Data
to third parties; (iii) physical and logical security measures to safeguard
against the unauthorized alteration of access to, or destruction or loss of, End
User Data; (iv) use of End-User Data that is specific to a particular end user
but provided in a "blinded" fashion that does not reveal identifying data about
such end user) and (v) other security policies related to HMI's and EHC's uses
of End User Data (items (i) through (iv) collectively, the "End-User Data
Standards"). Such Standards will be based on, or take into account standards or
guidelines promulgated by: (i) federal or applicable state or local
governmental organizations; and (ii) industry recognized groups/organizations.
If the parties are unable to agree upon the End-User Data Standards within a
reasonable time frame, the parties shall mutually agree on one expert to resolve
(in a binding manner) the differences between the parties preventing such
agreement. If the parties cannot agree on an expert, the expert shall be
nominated by the arbitration panel identified in Part VII.11.D.
B. Once established and agreed upon, each party shall be bound by and comply
with such End-User Data Standards.
C. Notwithstanding Part VII.7.A and Part VII.7.B above, HMI shall have: (i)
the right to provide market research or data analysis on the whole of LHR (i.e.,
on all End User Data contained in LHR including, without limitation, the EHC
Sourced End-User Data aggregated with end user data from other LHR customers) to
third parties as specified in Part VI.1.H; and (ii) ongoing access to EHC
Sourced End-User Data as necessary to perform its obligations under this
Agreement including, without limitation, the ongoing maintenance, support and
enhancement of LHR (or the EHC LHR as the case may be).
________________________________________________________________________________
HealthMagic, Inc. 27 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
8. Digital Security
To restrict access to LHR to authorized end users whose identity has been
verified, and to secure transmission of information over the Internet between
such end users and HMI, when using LHR, access to, and use of, LHR is protected
by a Digital Certificate based public-key encryption process. Accordingly,
prior to using LHR, end users shall be required to present a Digital Certificate
to HMI from an HMI approved Certifying Authority. Upon end user request, HMI
will serve as the Certifying Authority and issue an HMI Digital Certificate to
the end user. If the end user elects to obtain the Digital Certificate from an
HMI approved Certifying Authority (as opposed to HMI), the end user will be
responsible for any costs associated with acquiring such Digital Certificate.
9. Insurance
Each party will have and maintain in force the following insurance
coverages:
A. Comprehensive or Commercial General Liability Insurance, including
Products, Completed Operations Liability and Personal Injury, Blanket
Contractual Liability and Broad Form Property Damage Liability coverage for
damages to any property with a minimum limit of $1,000,000 per occurrence and
$5,000,000 in the aggregate.
B. Employee Dishonesty and Computer Fraud coverage for loss arising out of or
in connection with any fraudulent or dishonest acts committed by the employees
or agents of the insured party, acting alone or in collusion with others,
including the property and funds of others in their care, custody or control, in
a minimum amount of $5,000,000.
C. Errors and Omissions Liability Insurance covering the liability for
financial loss due to error, omission, negligence of employees and machine
malfunction in an amount of at least $5,000,000.
D. Software Errors and Omissions Liability Insurance covering the liability
for financial loss due to software errors and omissions in an amount of at least
$5,000,000.
Each party shall cause its insurers to issue certificates of insurance
evidencing that the coverages and policy endorsements required under this
Agreement are maintained in force and that not less than thirty (30) days
written notice shall be given to the other party prior to any modification,
cancellation or non-renewal of the policies.
10. Termination
A. If either party believes that the other party has failed in any material
respect to perform its obligations under this Agreement, then that party may
provide written notice to the breaching party describing the alleged failure in
reasonable detail. If the breaching party does not, within thirty (30) calendar
days after receiving such written notice, either (i) cure the material failure
or (ii) if the breach is not one that can reasonably be cured within thirty (30)
calendar days, develop a plan to cure the failure and diligently proceed
according to the plan until the material failure has been cured, then the non-
breaching party may terminate this Agreement for cause by providing written
notice to the non-breaching party. Termination of this Agreement will be in
addition to, and not in lieu of, other remedies available to the terminating
party under this Agreement.
B. Either party may terminate this Agreement by giving the other party prior
written notice and designating a date upon which such termination shall be
effective if the notifying party makes a general
________________________________________________________________________________
HealthMagic, Inc. 28 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
assignment for the benefit of creditors, files a voluntary petition of
bankruptcy, suffers or permits the appointment of a receiver for its business or
assets, becomes subject to any proceeding under any bankruptcy or insolvency
law, whether domestic or foreign, that is not dismissed within one hundred and
twenty (120) days, or has wound up or liquidated, voluntarily or otherwise.
C. Within thirty (30) days after the expiration or termination of this
Agreement for any reason: (i) EHC shall cease all use of and, at HMI's
election, return to HMI or destroy the original and all copies (including
partial copies) of all software, documentation, all HMI Confidential
Information, and any other products or materials licensed or otherwise provided
to EHC under this Agreement (including, without limitation, LHR, the Acquired
Assets, PMR, the Health Talk Tool and the Health Vectors Tool and HMI or third-
party Engaging Applications) for which EHC does not possess a valid license that
expressly by its terms survives the expiration or termination of this Agreement
("HMI Items"); (ii) all rights granted to EHC in and to such HMI items shall
terminate; (iii) HMI shall cease all use of and, at EHC's election, return to
EHC or destroy all EHC Engaging Applications licensed or otherwise provided to
HMI pursuant to this Agreement, as well as return to EHC or destroy the original
and all copies (including partial copies) of all EHC Confidential Information
and any other products or materials licensed or otherwise provided to HMI under
this Agreement; and (iv) all rights granted to HMI in and to such products shall
terminate. Each party shall certify in writing to the other party that it has
fully performed its obligations under this paragraph.
11. Law and Disputes
A. This Agreement will be governed by the laws of the State of Delaware,
without regard to any provision of Delaware law that would require or permit the
application of the substantive law of any other jurisdiction.
B. Informal Dispute Resolution.
---------------------------
(1) Prior to the initiation of formal dispute resolution procedures, the
parties shall first attempt to resolve their dispute informally, as follows:
a) Upon the written request of a party, each party shall appoint a
designated representative whose task it will be to meet for the purpose of
endeavoring to resolve such dispute.
b) The designated representatives shall meet as often as the parties
reasonably deem necessary in order to gather and furnish to the other all
information with respect to the matter in issue which the parties believe to be
appropriate and germane in connection with its resolution. The representatives
shall discuss the problem and attempt to resolve the dispute without the
necessity of any formal proceeding.
c) During the course of discussion, all reasonable requests made by
one party to another for nonprivileged information, reasonably related to this
Agreement, shall be honored in order that each of the parties may be fully
advised of the other's position.
d) The specific format for the discussions shall be left to the
discretion of the designated representatives.
(2) Formal proceedings for the resolution of a dispute may not be
commenced until the earlier of:
________________________________________________________________________________
HealthMagic, Inc. 29 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
a) the designated representatives concluding in good faith that
amicable resolution through continued negotiation of the matter does not appear
likely; or
b) thirty (30) days after the initial written request to appoint a
designated representative pursuant to Paragraph (a) above (this period shall be
deemed to run notwithstanding any claim that the process described in this Part
VII.11.B was not followed or completed).
(3) Part VII.11.B shall not be construed to prevent a party from
instituting, and a party is authorized to institute, formal proceedings earlier
to avoid the expiration of any applicable limitations period, or to preserve a
superior position with respect to other creditors.
C. Immediate Injunctive Relief.
---------------------------
The parties agree that the only circumstance in which disputes between them
shall not be subject to the provisions of Part VII.11.B is where a party makes a
good faith determination that a breach of the terms of this Agreement by the
other party is such that a temporary restraining order or other injunctive
relief is the only appropriate and adequate remedy. If a party files a pleading
with a court seeking immediate injunctive relief and this pleading is challenged
by the other party and the injunctive relief sought is not awarded in
substantial part, the party filing the pleading seeking immediate injunctive
relieve shall pay all of the costs and attorneys' fees of the party successfully
challenging the pleading.
D. Binding Arbitration.
--------------------
(1) Subject to Part VII.11.B above, and only where a particular part of
this Agreement calls for arbitration between the parties, such question or
dispute arising out of or relating to this Agreement will be determined by
binding arbitration in the location of the principal place of a business of the
party who does not make the initial claim for arbitration, under the American
Arbitration Association ("AAA") Commercial Arbitration Rules with Expedited
Procedures in effect on the date hereof, as modified by this Agreement.
(2) There will be one arbitrator selected by the parties within ten (10)
days of the arbitration demand or if not, by the AAA from its Large, Complex
Case Panel (or have similar professional credentials), who shall be an attorney
with at least fifteen (15) years commercial law experience. Any issues about
whether a claim is covered by this Agreement will be determined by the
arbitrator.
(3) As may be shown to be necessary to ensure a fair hearing: the
arbitrator may authorize limited discovery; and may enter pre-hearing orders
regarding, without limitation, scheduling, document exchange, witness disclosure
and issues to be heard. The arbitrator will not be bound by the rules of
evidence or of civil procedure, but may consider such writings and oral
presentations as reasonable people would use in the conduct of their day-to-day
affairs, and may require the parties to submit some or all of their case by
written declaration or such other manner of presentation as the arbitrator may
determine to be appropriate. The parties intend to limit live testimony and
cross-examination to the extent necessary to ensure a fair hearing on material
issues.
(4) The parties agree that the arbitrator will be directed to use best
efforts to: (i) hold a private hearing within sixty (60) days after the initial
demand for arbitration; (ii) conclude the hearing within three (3) days; and
(iii) provide his or her written decision not later than fourteen (14) days
after the hearing. In making the decision and award, the arbitrator shall apply
the applicable substantive law. Absent fraud, collusion or willful misconduct by
the arbitrator, the arbitrator's award will be final, and judgment may be
entered in any court having jurisdiction thereof. The arbitrator will award
attorneys' fees and costs to the prevailing party but will have no authority to
award any damages that are excluded
________________________________________________________________________________
HealthMagic, Inc. 30 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
by the terms and conditions of this Agreement. Either party will have the right
to apply at any time to a judicial authority for appropriate injunctive or other
interim or provisional relief, and will not by doing so be deemed to have
breached its agreement to arbitrate or to have affected the powers reserved to
the arbitrator.
(5) Neither party nor the arbitrator may disclose the existence, content
or results of an arbitration without the prior written consent of both parties.
E. Both HMI and EHC agree to comply fully with all relevant export laws and
regulations of the United States to ensure that no information or technical data
provided pursuant to this Agreement is exported or re-exported directly or
indirectly in violation of law.
F. No proceeding, regardless of form, arising out of or related to this
Agreement may be brought by either party more than two (2) years after the
accrual of the cause of action, except that (i) proceedings related to violation
of a party's proprietary rights or any duty to protect Confidential Information
may be brought at any time within the applicable statute of limitations, and
(ii) proceedings for non-payment may be brought up to two (2) years after the
date the last payment was due.
12. General
A. Any notice or other communication required or permitted to be made or given
by either party pursuant to this Agreement will be in writing, and will be
deemed to have been duly given: (i) five (5) business days after the date of
mailing if sent by registered or certified U.S. mail, postage prepaid, with
return receipt requested; (ii) when transmitted if sent by facsimile, provided a
confirmation of transmission is produced by the sending machine and a copy of
such facsimile is promptly sent by another means specified in this section; or
(iii) when delivered if delivered personally or sent by express courier service.
All notices will be sent to the other party at its address as set forth below or
at such other address as such party will have specified in a notice given in
accordance with this section:
-------------------------------------------------------------------------------------
In the case of EHC: With a copy to:
-------------------------------------------------------------------------------------
Empower Health Corporation, Inc. Xxxxxx & Xxxxxxx
0000 Xxxxxxxx Xxxx Xxxxx 000 Xxxxxxxxxxxx Xxx.
Xxxxxx, XX 00000 Xxxxx Xxxx, Xx 00000
Attn: Chief Financial Attn: Xxxxxxx Xxxxxxxx
Fax: Fax: 000 000-0000
-------------------------------------------------------------------------------------
In the case of HMI: With a copy to:
-------------------------------------------------------------------------------------
HealthMagic, Inc. Shaw, Pittman, Xxxxx & Xxxxxxxxxx
0000 Xxxxx Xxxxxx, Xxxxx 000 0000 Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000 XxXxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxx Attn: Xxxxxx Xxxxxxx, Esq.
Fax: 000 000 0000 Fax: 000-000-0000
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
B. Each party will act in good faith in its performance of this Agreement and
will not unreasonably delay or withhold the giving of any consent, decision or
approval that is either requested by the other party or is reasonably required
by the other party in order to perform its responsibilities in accordance with
this Agreement.
________________________________________________________________________________
HealthMagic, Inc. 31 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
C. Assignment/Change in Control.
-----------------------------
(1) Neither party may assign, delegate or otherwise transfer any right or
obligation set forth in this Agreement without the other party's prior written
consent, except (subject to Part VII.12.C(2)) that a party may assign any right
or obligation set forth in this Agreement to an Affiliate or to a successor
entity in the event of a merger, consolidation or sale of such party's business
or all or substantially all of such party's stock or assets, provided the
assignee agrees in writing to assume all of the assignor's obligations and
liabilities under this Agreement, and provided further that the substitution of
the rights of the assignee for the rights of the assignor does not materially
increase the scope of, in the case of EHC, EHC's use of HMI Materials and HMI or
third party Engaging Applications, or in the case of HMI, HMI's use of EHC
Engaging Applications, or materially increase the burden or risk imposed on the
other party by this Agreement. Any purported assignment in violation of the
preceding sentence will be void and of no effect. This Agreement will be binding
upon the parties' respective successors and permitted assigns.
(2) Immediately upon Control of HMI passing to an individual entity (or a
group of entities in the aggregate each of) whose main business is the
manufacture and/or sale of pharmaceuticals, tobacco products or insurance or to
a Direct Competitor of EHC, or Control of EHC passing to an entity who is a
Direct Competitor of HMI: (i) the non-compete provisions set forth in Part V.2
of this Agreement shall no longer be binding on either party and shall for all
purposes be deemed to be null and void; and (ii) the party who has not had a
change in control may at any time thereafter terminate this Agreement for
convenience subject to a three (3) month transition period commencing
immediately upon receipt by the non-terminating party of notice of termination.
At the end of such transition period: (i) EHC shall cease all use of and, at
HMI's election, return to HMI or destroy all HMI products licensed or otherwise
provided to EHC pursuant to this Agreement (including, without limitation, LHR,
the Acquired Assets, PMR, the Health Talk Tool and the Health Vectors Tool and
HMI or third party Engaging Applications, including source code); (ii) all
rights granted to EHC in and to such products shall terminate; (iii) HMI shall
cease all use of and, at EHC's election, return to EHC or destroy all EHC
Engaging Applications, including source code, licensed or otherwise provided to
HMI pursuant to this Agreement; and (iv) all rights granted to HMI in and to
such products shall terminate. For the purposes of this Agreement, "Control"
shall mean the legal, beneficial, or equitable ownership, directly or
indirectly, of more than fifty percent (50%) of a class of the capital stock of
HMI ordinarily having voting rights. "Direct Competitor of EHC" and "Direct
Competitor of HMI" shall be defined by mutual agreement of the parties, or
failing mutual agreement through the binding arbitration procedure described in
Part VII.11.D.
D. Except as otherwise permitted by the terms of this Agreement, all media
releases, public announcements, and public disclosures by either party relating
to this Agreement or the subject matter of this Agreement, including promotional
or marketing material, but not including announcements intended solely for
internal distribution or disclosures to the extent required to meet legal or
regulatory requirements beyond the reasonable control of the disclosing party,
shall be coordinated with and approved by other party prior to release.
Notwithstanding the preceding sentence, HMI may identify Empower as a client and
generally state the nature of HMI's relationship with EHC provided that HMI
shall first obtain the written consent of EHC, which consent shall not be
unreasonably withheld or delayed.
E. There are no intended third party beneficiaries of any provision of this
Agreement.
________________________________________________________________________________
HealthMagic, Inc. 32 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
F. EHC and HMI are and will remain independent contractors with respect to all
performance rendered pursuant to this Agreement. Neither EHC nor any employee or
agent of EHC will be considered an employee or agent of HMI for any purpose.
Neither HMI nor any employee or agent of HMI will be considered an employee or
agent of EHC for any purpose. Neither party, nor its employees, will have any
authority to bind or make commitments on behalf of the other party for any
purpose, nor will it or they hold itself or themselves out as having such
authority. Each party will be solely responsible for supervising, providing
daily direction and control, paying the salaries (including withholding of
income taxes and social security), worker's compensation, disability benefits
and the like of its personnel.
G. The provisions of this Agreement will be deemed severable, and the
unenforceability of any one or more provisions will not affect the
enforceability of any other provisions. In addition, if any provision of this
Agreement, for any reason, is declared to be unenforceable, the parties will
substitute an enforceable provision that, to the maximum extent possible in
accordance with applicable law, preserves the original intentions and economic
positions of the parties.
H. No failure or delay by either party in exercising any right, power or
remedy will operate as a waiver of such right, power or remedy, and no waiver
will be effective unless it is in writing and signed by the waiving party. If
either party waives any right, power or remedy, such waiver will not waive any
successive or other right, power or remedy the party may have under this
Agreement.
I. Any provisions of this Agreement that by their sense and context
contemplate continued performance or observance by one or both parties following
the expiration or termination for any reason of this Agreement will survive any
such expiration or termination.
J. Headings used in this Agreement are for convenience of reference only, and
will not be used to interpret or construe this Agreement.
K. The Exhibits referred to in and attached to this Agreement are made a part
of it as if fully included in the text.
L. This Agreement constitutes the entire agreement between the parties, and
supersedes all other prior or contemporaneous communications between the parties
(whether written or oral) relating to the subject matter of this Agreement.
This Agreement may be modified or amended solely in a writing signed by both
parties.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which shall constitute one and the same
instrument.
________________________________________________________________________________
HealthMagic, Inc. 33 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
________________________________________________________________________________
By signing below, each party acknowledges that it has read this Software Sale,
License and Development Agreement, understands it and, intending to be legally
bound by this Agreement, has caused its authorized representative to execute
this Agreement as of the date first written above.
HealthMagic, Inc. (HMI) Empower Health Corporation (EHC)
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxx Xxxxxxx
----------------------------- ------------------------------
Name: Xxxxxx Xxxxx Name: Xxxxxx Xxxxxxx
--------------------------- ----------------------------
Title: Chairman & President Title: CEO
-------------------------- ---------------------------
________________________________________________________________________________
HealthMagic, Inc. 34 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
Exhibit A
Terms and Conditions for EHC Services
Please see the attached HMI consulting services agreement.
________________________________________________________________________________
HealthMagic, Inc. A-1 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
Exhibit B
Confidentiality Agreement
Please see the attached HMI Confidentiality Agreement
________________________________________________________________________________
HealthMagic, Inc. B-1 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
Exhibit C
Warranty Disclosures by EHC
2.A The following licenses can not be verified:
Pull-down calendar control
All Icons and graphic backgrounds
The following third party software toolkits are included in the PMR:
Stingray Software
Objective Grid
Objective Toolkit
Objective Chart
2.G Third parties involved in the development:
Superior Consultant
Microsoft Corporation
________________________________________________________________________________
HealthMagic, Inc. C-1 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
Exhibit D
Definition of "Personal Medical Record"
"Personal Medical Record" means a repository of health information throughout
the life of the consumer or individual which includes all of the following:
(1) The medical records maintained by providers, health plans,
laboratories, nursing homes, home care enterprises, etc, as well as summaries of
such information;
(2) A place for the consumer to deposit health status information (so that
the information can be compared over time);
(3) A mechanism whereby providers, health plans and employers can monitor
compliance; and
(4) A Universal Patient Index Service containing demographic and
transactional information, as well as various identifiers about the individual.
________________________________________________________________________________
HealthMagic, Inc. D-1 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
Exhibit E
Service Level Agreement
This Exhibit E to be completed by the parties within sixty (60) days of LHR
first being hosted at the Third-Party Secured Site.
________________________________________________________________________________
HealthMagic, Inc. E-1 Confidential and Proprietary
Software Sale, License and
Development Agreement Final, January 20, 1999
Exhibit F
Technology Escrow Agreement
