1
EXHIBIT 10.2(i)
MASTER SOFTWARE LICENSE
This Master Software License (the "Agreement") is made and entered
into as of the 29th day of June, 1992 (the "Effective Date"), by and between
Health Care microsystems, Inc. (the "Licensor"), a California corporation having
its principal place of business at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000, and Healthtrust, Inc. The Hospital Company (the "Licensee"), a
Delaware corporation having its principal place of business at 0000 Xxxxxxx
Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
WHEREAS, Licensor desires to license to Licensee certain Software
(defined below) and Documentation (defined below);
WHEREAS, Licensee desires to acquire from Licensor a perpetual,
non-exclusive, paid-up, royalty-free, worldwide license for the Software and the
Documentation and to sublicense the Software and the Documentation to health
care providers owned or operated by or affiliated with Licensee; and
WHEREAS, Licensee desires to have Licensor perform software support
and maintenance services in connection with the Software and the Documentation
and Licensor desires to perform such services pursuant to the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the mutual premises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Definitions
1.1 "Affiliated User" is defined to include any hospital, clinic or
other health care provider that Licensee operates or in which Licensee holds a
50% or greater equity interest.
2
1.2 "Documentation" is defined to include any user manuals, training
materials, specifications and other material related to the Software.
1.3 "Software" is defined as the software furnished by Licensor to
Licensee, including any related interfaces and any custom software, as more
fully described in Schedule A annexed hereto, which is incorporated herein by
reference.
2. Software License
2.1 Licensor hereby grants to Licensee, subject to the terms and
conditions hereinafter set forth, a perpetual, non-exclusive, royalty-free,
worldwide license to use the Software, and to sublicense use of the Software to
Affiliated Users in accordance with the terms and conditions of license
agreements in the form attached hereto as Exhibit 1 (the "User License
Agreements"), solely for the data processing needs of Licensee and Affiliated
Users, including without limitation Licensee's operation of a central data
center. The license granted hereunder includes without limitation the right to
reproduce or copy all or any portion of the Software in machine-readable or
printed form as determined by Licensee to be reasonably required for its own
internal data processing needs and archival and backup purposes, and to copy and
distribute run units of the Software for use by Affiliated Users that sublicense
the Software under User License Agreements. Except as provided in this Section
2.1 and in Section 15, the license granted hereunder shall be nontransferable.
Subject to Section 18, the license granted hereunder shall be terminable in the
event that Licensee fails to make any payment when due of the license fees in
accordance with Schedule A.
2.2 Licensee acknowledges that portions of the Software licensed
under this Agreement are owned by Micro Data Base Systems, Inc. ("MDBS"),
Programmed Intelligence, Inc. ("PI"), or Information Resources, Inc. ("IRI").
Licensee further acknowledges that the MDBS, PI and IRI portions of the Software
may not be used by Licensee as stand-alone software products, but only as
component parts of the Software.
2
3
2.3 The license for the Software and the Documentation granted
hereunder and the terms and conditions of this Agreement shall cover all custom
software and related documentation developed on a time-and-materials or flat-fee
basis by Licensor at Licensee's request.
3. Documentation License
Licensor hereby grants to Licensee a perpetual, non-exclusive,
royalty-free, worldwide license to use the Documentation in conjunction with
Licensee's use of the Software and to sublicense use of the Documentation to
Affiliated Users in conjunction with Affiliated Users' use of the Software.
Licensor will be the primary source for the Documentation, but, as a
convenience, Licensor further grants Licensee the right to reproduce and
distribute copies of the Documentation for its own use and for use by Affiliated
Users. In the event Licensee exercises the right to reproduce and distribute
copies of the Documentation or any portion thereof, such copies shall include
Licensor's copyright notices; provided, however, that this provision shall not
apply to de minimus copying for the personal convenience of employees of
Licensee or Affiliated Users. The Documentation shall be furnished to Licensee
in printed form, and shall consist of all user manuals, training materials and
specifications for the Software. Subject to Section 18, the license granted
hereunder shall be terminable in the event that Licensee fails to make any
payment when due of the license fees in accordance with Schedule A.
4. License Fee, Taxes and Expenses; Delivery
4.1 As consideration for the perpetual license to use and to
sublicense use of the Software and the Documentation granted to Licensee herein,
Licensee shall pay to Licensor a one-time license fee in the amount and payable
in accordance with the payment schedule set forth in Schedule A.
4.2 Licensee shall pay all sales, use and personal property taxes
assessed in connection with this Agreement and each Affiliated User shall be
responsible for any sales, use and
3
4
personal property taxes assessed in connection with its User License Agreement;
provided, however, that Licensor shall pay all taxes based on Licensor's
business operations (including without limitation employment taxes and taxes
levied on Licensor's income).
4.3 Licensee shall reimburse Licensor at Licensor's cost for its
reasonable and necessary direct out-of-pocket expenses incurred in connection
with Licensor's performance hereunder, including without limitation
long-distance toll charges, overnight courier charges and postage. If Licensor
travels to Licensee's site in connection with Licensor's performance under this
Agreement and such travel is approved in advance by an authorized representative
of Licensee, Licensee shall reimburse Licensor for Licensor's reasonable and
necessary expenses at cost. Licensee shall be invoiced monthly in arrears for
all such expenses and payments shall be due within 30 days of Licensee's receipt
of such invoices; provided, however, that Licensee shall have no obligation to
reimburse Licensor for any such expenses not invoiced within 180 days of the
date incurred by Licensor.
4.4 Licensor shall pay all freight, shipping and handling costs for
delivery of the Software and the Documentation and shall bear all risk of loss,
including any insurance costs; provided, however, Licensee shall reimburse
Licensor for freight, shipping and handling costs in accordance with the terms
of Section 4.3 upon delivery and acceptance of the Software and Documentation.
5. Affiliated User License and Fees
5.1 Licensor agrees that Licensee may sublicense the Software and
the Documentation for use by any Affiliated User that executes a User License
Agreement.
5.2 Licensee shall pay Licensor sublicense fees on behalf of each
Affiliated User that executes a User License Agreement for the Software and the
Documentation as determined in accordance with the price schedule set forth in
Schedule A.
4
5
5.3 The Software shall not be used to process the data of an
Affiliated User until a User License Agreement has been entered into with that
Affiliated User.
6. Source Code
6.1 Licensor has not provided Licensee with a copy of, and Licensee
acquires no rights of any kind with respect to, the Software source code except
as provided herein. In the event of Licensor's discontinuance of or failure in
material respects to provide support and maintenance services for the Software
pursuant to the terms and conditions of this Agreement or any other existing
agreement with Licensee, or Licensor has otherwise defaulted under this
Agreement or other agreement related to the Software, Licensor shall deliver to
Licensee a copy of the Software source code for the current version of the
Software and all internal documentation related thereto (including a list of and
information regarding how to license third-party software used to develop or
maintain the Licensed Software).
6.2 In the event Licensee determines that Licensor has failed in
material respects to provide support and maintenance services for the Software
or has otherwise defaulted as described in Section 6.1, Licensee shall provide
Licensor with written notice describing in reasonable detail the reasons for
Licensee's determination and an opportunity for 30 days after Licensor's receipt
of such notice for Licensor to cure the material failure or default as described
by Licensee. The pendency of a dispute regarding such a material failure or
default shall not entitle Licensee to receive a copy of the Software source code
and related documentation.
6.3 Subject to the foregoing, Licensor hereby grants Licensee a
license to use such source code and related documentation in order to maintain
and modify the Software licensed by Licensee and sublicensed by Affiliated
Users. Licensor hereby acknowledges Licensee's and Affiliated Users' right to
participate in a user's support group with other users of all or part of the
Software.
5
6
6.4 Upon delivery of the source code and related documentation to
Licensee, Licensor's support and maintenance obligations hereunder shall
terminate; provided, however, that delivery of the source code and related
documentation to Licensee shall not affect Licensee's obligation to pay Licensor
sublicense fees under Section 5.2. If the source code is delivered to Licensee
as a result of a notice by Licensee under Section 6.2, delivery of the source
code shall constitute Licensee's sole remedy for claims related to support and
maintenance services hereunder.
7. Hardware
Licensee is responsible for providing computer equipment and
operating system software (collectively, the "Hardware") that conforms with
Licensor's specifications as set forth in Schedule B annexed hereto, which is
incorporated herein by reference, as may be modified by mutual consent of the
parties from time to time. Licensee acknowledges that a parallel printer port
must be available for use in connection with security mechanisms that may be
provided by Licensor.
8. Licensor's Warranties
8.1 Ownership and Quiet Enjoyment. Licensor hereby warrants and
represents to Licensee and Affiliated Users that Licensor owns all right, title
and interest in and to the Software and the Documentation or otherwise has the
right to grant to Licensee the license to use and to sublicense same as set
forth in this Agreement without violating or infringing upon any rights of any
third party and without breach of any third-party license to Licensor, and there
is currently no actual or threatened suit by any third party based on an alleged
violation, infringement or breach by Licensor. Use of the Software and the
Documentation in accordance with this Agreement and any User License Agreement
shall not be disturbed or interfered with during the continuation of the license
granted hereunder except as provided in Section 10.2.
6
7
8.2 For any period during which Licensee maintains support and
maintenance of the Software through Licensor as set forth in Section 9, Licensor
further warrants and represents to Licensee and Affiliated Users as follows:
(a) Software Operation. The Software and each module or component
thereof shall operate on the Hardware and shall perform substantially in
accordance with the Documentation and pages 36-59 of Licensor's proposal dated
June 7, 1991, attached hereto as Exhibit 2; provided, however, if Licensee or an
Affiliated User makes an unauthorized modification to the Software, then this
warranty shall terminate with respect to such Licensee or Affiliated User.
(b) Performance Standards. Each of Licensor's employees, agents or
representatives assigned to perform services hereunder shall have the proper
skill, training and background so as to be able to perform in a competent and
professional manner and all work will be so performed in a manner compatible
with Licensee's or each Affiliated User's business operations at its premises.
8.3 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, LICENSOR DOES NOT
MAKE AND EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES WITH RESPECT TO THE SOFTWARE,
INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
9. Master Software Support and Maintenance
9.1 Licensor shall promptly notify Licensee of any defects or
malfunctions in the Software or the Documentation of which it learns from any
source. Licensor shall use its best efforts reasonable under the circumstances
to correct any material defects or malfunctions in the Software or the
Documentation and provide Licensee and Affiliated Users with corrected copies of
same in accordance with a schedule to be mutually agreed to by the parties.
Licensor's obligation hereunder shall not affect any other liability that it may
have to Licensee or Affiliated Users.
7
8
9.2 Licensor shall provide to Licensee and Affiliated Users copies
of the Software and the Documentation made generally available to its customers
and reflecting any enhancements to the Software and the Documentation made by
Licensor. Such enhancements shall include without limitation all modifications
to the Software that increase the speed, efficiency or ease of operation of the
Software, or add additional capabilities to or otherwise improve the functions
of the Software, but shall not include new products that bring substantial new
functionality to the Software.
9.3 Licensor shall use its best efforts reasonable under the
circumstances to cause the Software to operate as warranted in Section 8.2(a)
and shall provide one copy of any updated release of the Software, or part
thereof, to Licensee and Affiliated Users which Licensee and Affiliated Users
may copy in the appropriate quantity and substitute for a prior release. In
addition, Licensor shall provide published bulletins describing new releases,
maintenance releases, temporary problem resolutions and circumventions, support
level changes and other information with respect to the Software, which updated
releases Licensee and Affiliated Users may obtain at no additional cost, except
for Licensor's then applicable mailing and media charges plus any reasonable
costs as the parties may mutually agree related to installation of such
releases.
9.4 Licensor shall commit the resources of at least one full-time
employee to respond to any request by Licensee to correct any failure of the
Software to perform as warranted in Section 8.2(a), within a period of 48 hours
after Licensee provides reasonably detailed notice of such failure. Licensor
shall use its best efforts promptly to remedy any such failure of the Software,
either by providing a permanent fix or replacement to the Software or by
providing a temporary work around.
9.5 Subject to the provisions of Schedule A, Section V.2.a., whereby
Licensee may earlier terminate the services described in this Section 9,
Licensor shall provide the Software support and maintenance services described
in this Section 9 for the charges set forth in Section 9.6 below for a five-year
period commencing upon the Effective Date of this Agreement (the "Initial
Term"), and, upon expiration of the Initial Term, shall continue
8
9
to provide such services on a year-to-year basis unless, no less than six months
prior to the expiration of the Initial Term or 60 days prior to the expiration
of any one-year renewal term, either party gives the other party written notice
of the notifying party's desire to:
(a) renegotiate the terms and conditions of this Agreement related
to Licensor's Software support and maintenance services, provided that if an
agreement on new terms is not reached prior to the expiration of the applicable
term, Licensor's Software support and maintenance services shall be deemed
terminated in accordance with Section 9.5(b); or
(b) terminate Licensor's Software support and maintenance services,
provided, however, that if either party determines to terminate such services,
termination shall be subject to a two-year wind-down period (the "Wind-down
Period") commencing on the date the expiration of the Initial Term or the
renewal term is effective, which shall be subject to the following additional
terms and conditions:
(i) During the first year of the Wind-down Period, the terms
of this Agreement related to Software support and maintenance
services shall remain in effect and Licensee may elect on behalf of
Affiliated Users to discontinue Licensor's Software support and
maintenance services to up to five Affiliated Users;
(ii) During the second year of the Wind-down Period, the terms
of this Agreement related to Software support and maintenance
services shall remain in effect and Licensee may elect on behalf of
Affiliated Users to discontinue Licensor's Software support and
maintenance services to up to one-half the number of Affiliated
Users that are receiving such services as of the first day of the
second year of the Wind-down Period; and
(iii) Licensee shall have no obligation to pay for and Licensor
shall have no obligation to provide any Software support and
maintenance services after the expiration of the Wind-down Period.
9
10
9.6 During the term of Licensor's software support and maintenance
services, Licensee shall pay to Licensor an annual support and maintenance fee
in accordance with the terms set forth in Schedule A. At any time after the
expiration of the first year of the Initial Term, Licensor's software support
and maintenance fees shall be subject to annual increases, provided that
Licensor provides Licensee with written notice of any such increase at least 90
days prior to the expiration of each one-year period. Annual increases shall in
no event exceed the lesser of: (i) a percentage increase equal to two and
one-half percent (2 1/2%) plus the percentage increase in the Consumer Price
Index for Urban Consumers, All Cities Average, For all Items (1984-1986 = 100),
as published by the Bureau of Labor Statistics of the United States Department
of Labor during the most recent twelve-month period for which such figures are
available; or (ii) ten percent (10%).
9.7 If Licensor travels to Licensee's or an Affiliated User's site
and such travel is approved in advance by an authorized representative of
Licensee, Licensee shall reimburse Licensor for its reasonable and necessary
expenses at cost. Licensee shall be invoiced monthly in arrears for all such
expenses and payments shall be due within 30 days of Licensee's receipt of such
invoice; provided, however, that Licensee shall have no obligation to reimburse
Licensor for any such expenses not invoiced within 180 days of the date incurred
by Licensor.
9.8 (a) Licensee agrees that all enhancements to the Software
furnished by Licensor pursuant to this Agreement shall be installed within six
months of Licensee's receipt of any such enhancements, provided that if Licensor
is responsible for installation, Licensor shall cooperate with Licensee to
install the Software within such time period. As mutually agreed by the parties
at such time as enhancements are provided, either Licensee shall install the
enhancements or Licensee shall engage Licensor to install the enhancements at
its standard hourly rate for software installation services.
(b) Licensee agrees to provide Licensor with sufficient support and
test time on Licensee's or an Affiliated User's computer system to duplicate a
reported problem, certify that the problem is with the Software, and certify
that the
10
11
problem has been corrected, and to otherwise reasonably cooperate with Licensor
in connection with Licensor's support and maintenance services.
(c) As long as Licensor is providing support and maintenance
services to Licensee, Licensee shall install and maintain a 1200 or 2400 baud
modem and associated dial-up telephone line. Licensee shall pay for
installation, maintenance and use of such equipment and associated telephone
line-use charges. Licensor, at its option, shall use this modem and telephone
line in connection with error correction, installation of enhancements and
assistance to Licensee in connection with its use of the Software. Such access
by Licensor shall be subject to prior approval by Licensee in each instance. As
long as Licensor is providing support and maintenance services to Licensee,
Licensee shall also install and maintain a tape backup system that conforms to
the specifications set forth in Schedule B to be used for regular tape backups
by Licensee and transfer of data and Software updates between Licensee and
Licensor.
(d) Except as authorized by Section 6, Licensee shall not modify or
attempt to modify the Software without the prior written consent of Licensor.
(e) Licensee agrees that any copies of the Software or the
Documentation that it makes pursuant to this Agreement shall bear all copyright,
trademark and other proprietary notices included therein by Licensor and, except
as expressly authorized herein, Licensee shall not distribute same to any third
party without Licensor's prior written consent.
9.9 The Software support and maintenance fees, stated in Schedule A,
Section V., are subject to mutually acceptable adjustment to be negotiated by
the parties in the event:
(a) Licensee assumes support obligations for the Affiliated Users
but in so doing fails to: (i) provide a level of staffing for the assumed
obligations consistent with the level of staffing previously provided by
Licensor or (ii) staff its Affiliated User support function with persons trained
by Licensor or otherwise determined by Licensor to be qualified and Licensor's
11
12
cost in providing the Software support described in this Section 9, as measured
by the average number of calls made by the Licensee and Affiliated Users to
Licensor's corporate support center for such support versus the volume of calls
to such center prior to Licensee's assumption of support obligations for the
Affiliated Users, does not increase significantly due to Licensee's assumption
of such obligations; or,
(b) the parties mutually agree to add more application software
programs or interfaces to the Software described in Schedule A.
10. Limitations of Liability
10.1 Except as provided in Section 16, Licensor shall have no
liability for consequential, exemplary, indirect, special or incidental damages,
whether based on contract, tort or any other legal theory, arising out of or
related to this Agreement or the transactions contemplated herein, nor shall
Licensor be liable for any loss of data or lost profits of Licensee, or for any
amount in excess of the license fees paid to Licensor by Licensee under this
Agreement, even if Licensor is apprised of the likelihood of such damages
occurring.
10.2 Subject to Licensor's obligations under Section 16.2, in the
event that the use of the Software or any portion thereof is held by a court of
competent jurisdiction to infringe or constitute the wrongful use of any third
party's proprietary rights and Licensee's right to use the Software is enjoined,
or if Licensor in the reasonable exercise of its discretion instructs Licensee
to cease using the Software in order to mitigate potential damages arising from
a third party's claim that use of the Software infringes on its rights, Licensee
shall cease using the Software. In either event (other than by reason of a
temporary restraining order not exceeding 30 days), Licensor shall (i) replace
the Software with equally suitable non-infringing software, (ii) modify the
Software so that its use by Licensee as permitted hereunder ceases to be
infringing or wrongful, (iii) procure for Licensee the right to continue using
the Software as permitted hereunder, or (iv) after reasonable efforts under
clauses (i), (ii) and (iii) of this sentence, refund to Licensee a
12
13
pro rata portion of the license fee as follows: (I) within one year of the
Effective Date, 100%; (II) for the second one-year period following the
Effective Date, 80%; (III) for the third one-year period following the Effective
Date, 60%; (IV) for the fourth one-year period following the Effective Date,
40%; or (V) during the period running from the fourth anniversary through the
tenth anniversary of the Effective Date, if Licensee continues to receive
Software support and maintenance services from Licensor pursuant to Section 9,
20%.
10.3 Other than as expressly contained in Sections 16.2 and 10.2,
Licensor shall have no liability whatsoever to indemnify Licensee for any loss
or damage arising out of or related to any allegation or determination that
Licensee's use of the Software as permitted hereunder infringes or constitutes
wrongful use of any proprietary right.
11. Title to Software and Documentation
The Software and the Documentation provided hereunder and all copies
thereof are proprietary to Licensor and title thereto remains in Licensor (or in
third parties who have licensed any part of the Software to Licensor). Other
than the rights in and to the Software and the Documentation granted to Licensee
hereunder, Licensee acquires no rights in the Software or the Documentation,
including patents, copyrights, trademarks, and trade secrets, if any, embodied
therein. Licensee acknowledges that Licensor claims that the Software contains
valuable proprietary information and trade secrets developed or acquired by
Licensor. Licensee agrees to secure and protect the Software and the
Documentation and copies thereof in a manner consistent with the maintenance of
Licensor's rights therein and to take reasonable action by instruction or
agreement with its employees or independent contractors who are permitted access
to the Software and the Documentation to satisfy its obligations hereunder.
13
14
12. Confidentiality
12.1 "Confidential Information" is defined to include the identity
of patients, the content of any medical records, financial and tax information,
information regarding Medicare and Medicaid claims submission and
reimbursements, the object and source codes for the Software, the Documentation,
and such other information so designated in writing prior to disclosure by the
party claiming that the information to be disclosed is confidential or
proprietary business information.
12.2 The party receiving the Confidential Information (the
"Receiving Party") from the party who owns or holds in confidence such
Confidential Information (the "Owning Party") may use the Confidential
Information solely for the purpose of performing its obligations or enforcing
its rights under this Agreement.
12.3 The Receiving Party shall not disclose the Confidential
Information except to those persons having a need to know for purposes
authorized in Section 12.2. Each party shall take appropriate action, by
instruction to or agreement with its employees, agents and subcontractors, to
maintain the confidentiality of the Confidential Information. Except as provided
in Section 12.4 below, Licensee shall not disclose the Documentation or the
Software to any independent contractor or subcontractor engaged primarily in the
business of developing health care applications software or to any of the
companies identified as competitors of Licensor on Schedule C annexed hereto
(which schedule may be modified from time to time by mutual consent of the
parties, which consent shall not be unreasonably withheld) without the prior
consent of Licensor, which consent shall not be unreasonably withheld. Licensee
may disclose any Confidential Information on an as-needed basis to its
non-employee fiduciaries, including without limitation Licensee's or Affiliated
Users' attorneys, accountants, auditors, controlling persons, officers,
directors or trustees, without Licensor's prior consent. The Receiving Party
shall promptly notify the Owning Party in the event that the Receiving Party
learns of an unauthorized release of Confidential Information.
14
15
12.4 The Receiving Party shall have no obligation with respect to:
(a) Confidential Information made available to the general public
without restriction by the Owning Party or by an authorized third party;
(b) Confidential Information known to the Receiving Party
independently of disclosures by the Owning Party under this Agreement;
(c) Confidential Information independently developed by the
Receiving Party; or
(d) Confidential Information that the Receiving Party may be
required to disclose pursuant to subpoena or other lawful process; provided,
however, that the Receiving Party notifies the Owning Party in a timely manner
to allow the Owning Party to appear and protect its interests.
12.5 Upon the termination or expiration of the license, each party
shall (i) immediately cease to use the other party's Confidential Information,
(ii) return to the other party such Confidential Information and all copies
thereof within ten (10) days of the termination, unless otherwise provided in
this Agreement, and (iii) upon request, certify in writing to the other party
that it has complied with its obligations set forth in this Section 12, unless
otherwise provided in this Agreement.
12.6 The parties acknowledge that monetary remedies may be
inadequate to protect rights in Confidential Information and that, in addition
to legal remedies otherwise available, injunctive relief is an appropriate
judicial remedy to protect such rights.
12.7 Licensor shall not use Confidential Information received from
Licensee or Affiliated Users for the purpose of developing information or
statistical compilations for use by third parties or for any other commercial
exploitation.
12.8 Each party agrees to provide reasonable assistance and
cooperation upon the reasonable request of the
15
16
other party in connection with any litigation against third parties to protect
the requesting party's Confidential Information, provided that the party seeking
such assistance and cooperation shall reimburse the other party for its
reasonable out-of-pocket expenses.
13. Publicity
Neither party shall refer to the existence of this Agreement or
disclose its terms or use the name of the other party in any press release,
advertising or materials distributed to prospective customers, without the prior
written consent of the other party. Licensor shall not represent, directly or
indirectly, that any product or service of Licensor has been approved or
endorsed by Licensee or any Affiliated User. Notwithstanding the foregoing,
Licensor shall have the right to identify as clients Licensee and Affiliated
Users that have executed User License Agreements on Licensor's list of clients,
such list to be used by Licensor solely on a one-for-one basis with individual
prospects for marketing purposes but not to be used in any mass marketing or
general advertising materials or media.
14. Books and Records
14.1 If required by applicable law, the parties agree that until the
expiration of four (4) years after the furnishing of services under this
Agreement, Licensor will make available to the Secretary of the United States
Department of Health and Human Services (the "Secretary") and the United States
Comptroller General, and their duly authorized representatives, this Agreement,
each User License Agreement executed hereunder and all books, documents and
records necessary to certify the nature and extent of the costs of the goods and
services provided under this Agreement and the User License Agreements. No
attorney-client, accountant-client or other legal privilege shall be deemed to
have been waived by the parties by virtue of this provision.
14.2 Licensee shall have the right, at its expense, during normal
business hours and with reasonable advance notice,
16
17
to review and photocopy Licensor's books and records that pertain directly to
the accounts of the Licensee and the Affiliated Users, the fees payable to
Licensor under this Agreement and the User License Agreements, or the goods and
services provided by Licensor hereunder or under the User License Agreements.
14.3 If Licensor carries out the duties of this Agreement or any
User License Agreement through a subcontract worth $10,000 or more over a
twelve-month period with a related organization, the subcontract will also
contain a clause substantially identical to Sections 14.1 and 14.2 to permit
access by Licensee, the Secretary, the United States Comptroller General and
their representatives to the related organization's books and records.
14.4 Licensee's rights under this Section 14 shall survive for a
period of four (4) years after termination or expiration of this Agreement.
15. Assignment
Neither Licensee nor Licensor shall assign or transfer this
Agreement or any of its rights or obligations hereunder without the prior
written consent of the other, which consent shall not be unreasonably withheld;
provided, however, that (i) either party may assign its rights or obligations
hereunder to a subsidiary in which the assigning party holds a 50% or greater
equity interest without the consent of the other party and (ii) either party may
assign its rights and obligations hereunder in connection with any transaction
involving the sale of all or substantially all of its assets without the consent
of the other party. This Agreement shall inure to the benefit of and bind
successors and permitted assigns of Licensor and Licensee. In no event shall
consent to assignment be conditioned upon the payment of any fee.
16. Indemnity
16.1 Each party shall indemnify and hold harmless the other party
and its affiliates, directors, officers, employees and
17
18
agents (collectively, the "indemnitee") against any and all losses, liabilities,
judgments, awards and costs (including legal fees and expenses) arising out of
or related to any third-party claim for personal injury or property damage
(other than intellectual property infringement claims), including any damages
finally awarded attributable to such claim and any reasonable expense incurred
by indemnitee in assisting indemnitor in defending against such claim, that
arises out of any action or inaction by the indemnitor or its employees or
agents; provided, however, that indemnitee gives indemnitor: (i) written notice
within a reasonable time after indemnitee is served with legal process in an
action asserting such claims, provided that the failure or delay to notify
indemnitor shall not relieve indemnitor from any liability that it may have to
indemnitee hereunder so long as the failure or delay shall not have prejudiced
the defense of such claim; (ii) reasonable assistance in defending the claim;
and (iii) sole authority to defend or settle such claim. In the event indemnitor
elects not to defend any such claim, indemnitee shall have the option but not
the duty to reasonably settle or defend the claim at its cost and indemnitor
shall indemnify indemnitee for such settlement or any damages finally awarded
against indemnitee attributable to such claim, reasonable costs and expenses
(including attorneys' fees), and interest on such recoverable funds advanced.
16.2 Licensor agrees to indemnify and hold harmless Licensee and its
affiliates, directors, officers, employees and agents (collectively,
"indemnitee") against any and all losses, liabilities, judgments, awards and
costs (including legal fees and expenses) arising out of or related to any
third-party claim that Licensee's use or possession of the Software or the
Documentation or the license granted hereunder infringes or violates the
copyright, patent, trade secret or other proprietary rights of any third party,
including any damages finally awarded attributable to such claim and any
reasonable expense incurred by indemnitee in assisting Licensor in defending
against such claim; provided, however, that indemnitee gives Licensor: (i)
written notice within a reasonable time after indemnitee is served with legal
process in an action asserting such claims, provided that the failure or delay
to notify Licensor shall not relieve Licensor from any liability that it may
have to indemnitee hereunder so long as the failure or delay shall not have
prejudiced the defense of such
18
19
claim; (ii) reasonable assistance in defending the claim; and (iii) sole
authority to defend or settle such claim. In the event Licensor elects not to
defend any such claim, indemnitee shall have the option, but not the duty, to
reasonably settle or defend the claim at its cost and Licensor shall indemnify
indemnitee for such settlement or any damages finally awarded against indemnitee
attributable to such claim, reasonable costs and expenses (including attorneys'
fees) and interest on such recoverable funds advanced. Notwithstanding the
foregoing, Licensor's obligations to indemnify Licensee under this Section 16.2
shall not extend to claims arising more than five years after discontinuation of
Software support and maintenance services under Section 9. The indemnity
provided by this Section 16.2 extends only to damages and costs awarded against
Licensee (or payable by Licensee pursuant to a settlement agreement) and costs
and expenses associated with the defense of such third-party claims; any
assertion by Licensee that it is damaged by virtue of any inability to use the
Software as a result of a third party claim shall be governed by Section 10.2
hereof, which provides the sole and exclusive remedies therefor.
17. Work Environment
When Licensor's employees are physically assigned to work on the
premises of Licensee's corporate headquarters site, Licensee shall provide to
Licensor's employees a reasonable work environment, including reasonable office
space, furniture, supplies and equipment, within or in proximity to the
buildings housing Licensee's corporate headquarters, to enable Licensor to
perform its obligations under this Agreement and any work order executed
hereunder.
19
20
18. Termination and Survival
18.1 The license granted hereunder is perpetual and may not be
terminated by Licensor except upon Licensee's failure to cure a material breach
of this Agreement, including nonpayment of any Software license fee when due,
within 60 days of receipt of Licensor's written notice describing the nature of
the alleged material breach. In the event of a termination of the license,
Licensee shall within 60 days, at Licensee's option, either deliver to Licensor
or destroy the Software and the Documentation in Licensee's possession. Within
60 days following termination, Licensee shall certify in writing to Licensor
that all copies of the Software and the Documentation in Licensee's possession
have been returned or destroyed.
18.2 Subject to Section 18.4, the sublicense granted to each
Affiliated User is perpetual and may not be terminated by Licensor except upon
that Affiliated User's failure to cure a material breach of its User License
Agreement within 60 days of receipt of Licensor's written notice describing the
nature of the alleged material breach. In the event of a termination of an
Affiliated User's sublicense, that Affiliated User shall within 10 days, at
Affiliated User's option, either deliver to Licensor or destroy the Software and
the Documentation in such Affiliated User's possession. Within 10 days following
termination such Affiliated User shall certify in writing to Licensor that all
copies of the Software and the Documentation in such Affiliated User's
possession have been returned or destroyed.
18.3 Expiration or termination of Licensor's support and maintenance
obligations shall not constitute a termination of the license granted hereunder
or of the respective rights and obligations of the parties created by this
Agreement.
18.4 Termination of the license to use and to sublicense use of the
Software granted to Licensee pursuant to Section 18.1 shall not automatically
cause the termination or otherwise interfere with validly existing sublicenses
previously granted by Licensee to Affiliated Users as authorized herein;
provided, however, that in the event the license granted to Licensee hereunder
is terminated pursuant to Section 18.1, the sublicenses may be terminated by
Licensor.
20
21
18.5 Any provision of this Agreement related to confidentiality,
publicity and indemnification or which by its terms provides for survival shall
survive the termination of this Agreement.
19. Notices
All notices required or permitted under this Agreement shall be in
writing and sent to the other party at the address specified below or to such
other address as either party may substitute from time to time by written notice
to the other and
shall be deemed validly given upon receipt of such notice given by certified
mail, postage prepaid, or personal or courier delivery to:
Healthtrust, Inc. - Health Care microsystems,
The Hospital Company Inc.
0000 Xxxxxxx Xxxx Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000 0000 Xxxxxxxx Xxxxxxxxx
Attention: Director of Xxxxxxxx, Xxxxxxxxxx 00000
Information Services Attention: Xxxxxx X. Xxxxxxx
with a copy to: with a copy to:
Healthtrust, Inc. - Health Care microsystems,
The Hospital Company Inc.
0000 Xxxxxxx Xxxx Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000 0000 Xxxxxxxx Xxxxxxxxx
Attention: Xxxxxx X. Xxxxxxxx, Xxxxxxxxxx 00000
Xxxxxxx, Esq. Attention: Xxxxxx X. Xxxxxxxxx
20. Governing Law
This Agreement shall be governed by and construed in all respects in
accordance with the substantive laws of the State of Tennessee.
21
22
21. Severability
All agreements, clauses and covenants contained herein are
severable, and in the event any of them shall be held to be unconstitutional,
invalid, illegal, or unenforceable, the remainder of this Agreement shall be
interpreted as if such unconstitutional, invalid, illegal or unenforceable
agreements, clauses or covenants were not contained herein. IT IS EXPRESSLY
UNDERSTOOD AND AGREED THAT EACH AND EVERY PROVISION OF THIS AGREEMENT THAT
PROVIDES FOR A LIMITATION OF LIABILITY, DISCLAIMER OF WARRANTIES OR EXCLUSION OF
DAMAGES IS INTENDED BY THE PARTIES TO BE SEVERABLE AND INDEPENDENT OF ANY OTHER
PROVISION AND TO BE ENFORCED AS SUCH. FURTHER, IT IS EXPRESSLY UNDERSTOOD AND
AGREED THAT IN THE EVENT THAT ANY REMEDY HEREUNDER IS DETERMINED TO HAVE FAILED
OF ITS ESSENTIAL PURPOSE, ALL LIMITATIONS OF LIABILITY AND EXCLUSIONS OF DAMAGES
SET FORTH HEREIN SHALL REMAIN IN EFFECT.
22. Waiver; Modification
The failure by either party to exercise any right provided hereunder
shall not be deemed a waiver of such right. This Agreement may be amended,
modified or supplemented only by a writing signed by the parties to this
Agreement. Such amendments, modifications or supplements shall be deemed as much
a part of this Agreement as if so incorporated herein.
23. Integration
The parties hereto acknowledge that they have read this Agreement in
its entirety and understand and agree to be bound by all of its terms and
conditions, and further agree that this Agreement, any User License Agreement
executed hereunder and any exhibits or schedules hereto or thereto constitute a
complete and exclusive statement of the understanding between the parties with
respect to the subject matter hereof which supersede any and all other
communications between the parties, whether written or oral. Any prior
agreements, promises, negotiations or representations related to the subject
matter hereof not expressly set forth in this Agreement, any User License
Agreement executed hereunder or any exhibits or schedules hereto or thereto are
of no force and effect.
22
23
24. Independent Contractor
Licensor, in performance of this Agreement, is acting as an
independent contractor and shall have the exclusive control of the manner and
means of performing the work contracted for hereunder. Personnel supplied by
Licensor hereunder, whether or not located on Licensee's premises, are not
Licensee's employees or agents and shall not hold themselves out as such, and
Licensor assumes full responsibility for their acts and for compliance with any
applicable employment and tax laws with respect to such employees. Nothing
contained in this Agreement shall be construed to create a joint venture or
partnership between the parties.
25. Force Majeure
Neither party hereto shall be liable for any failure or delay in
performance of its obligations hereunder by reason of any event or circumstance
beyond its reasonable control, including without limitation acts of God, war,
riot, strike, labor disturbance, fire, explosion, flood, or shortage or failure
of suppliers.
26. Export Control Regulations
Licensee shall be responsible for complying with all export
regulations required to provide the Software to any Affiliated User located
outside of the United States.
27. Hiring of Employees
During the term of this Agreement and for one (1) year thereafter,
neither Licensor nor Licensee will, without the prior written consent of other
party, which may be withheld in that party's sole discretion, offer employment
to, employ or subcontract
23
24
work to any person employed then or within the preceding twelve (12) months by
the other party. This provision shall also be binding upon affiliates of both
parties.
28. Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same document. In making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart executed by
the party against whom enforcement of this Agreement is sought.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their authorized representatives as of the date first set forth
above.
LICENSEE: LICENSOR:
By: By:
------------------------------ -------------------------------
Xxxxxx X. Xxxxx, III, Xxxxxx X. Xxxxxxx,
Senior Vice-President Chief Operating Officer
24
25
Schedule A
Software and Fees
I. Licensed Software
The Software is described on Attachments 1 and 2 to this Schedule A.
II. Corporate License Fee
The fees payable to Licensor by Licensee for the license granted to
Licensee to use the Software and the Documentation and to sublicense the use of
the Software and the Documentation to Affiliated Users shall be as follows:
1. $350,000 due and payable on execution of the Master
Software License and Professional Services Agreement by Licensor and
Licensee; and
2. $600,000 due and payable within ten (10) days following
acceptance of the Product Management program in the first three
pilot hospitals as further described in Work Order 001 executed
hereunder; and
3. In the event Licensee elects to (i) sublicense the use of
the Software and the Documentation to more than 15 Affiliated Users
or (ii) sublicense programs
A-1
26
comprising the Software other than the Product Management, Payment
Verification, Budgeting and Desktop Delivery System programs, then,
upon the first exercise of either election, a single payment of
$150,000 to be due and payable with payment of the applicable
sublicense fee.
III. Affiliated User Sublicense Fees
(a) The sublicense fees to be paid to Licensor by Licensee for or on
behalf of Affiliated Users per program actually sublicensed are set forth on
Schedule A, Attachment 1; provided, however, the sublicense fees payable to
Licensor for up to 90 sublicenses are subject to the caps described in Section
IV below. Sublicense fees are due and payable as follows:
1. For the first three sublicenses of a particular licensed
program comprising the Software:
A. 75% of the sublicense fees for each licensed program
within thirty (30) days following installation of such
licensed program; and
B. 25% of the sublicense fees for each licensed program
within thirty (30) days following acceptance of such
licensed program.
2. After the first three sublicenses of a particular licensed
program, 100% within thirty (30) days following grant of the
applicable sublicense.
(b) Notwithstanding paragraph (a) above, if Licensee acquires or is
acquired by any entity, person or group that holds a 50% or greater equity
interest in 20 or more hospitals, clinics or healthcare providers (such
healthcare providers shall be deemed to be Affiliated Users but are hereinafter
referred to as the "Designated Providers" for the purpose of computing
sublicense
A-2
27
fees), Licensee may sublicense use of the Software and the Documentation to such
Designated Provider by executing a User License Agreement in the form of Exhibit
1; provided, however, that the license fees payable in accordance with Section
3.1 of the User License Agreement and Schedule A, Attachment 1 to this Agreement
may be adjusted at Licensor's request (i) first, by applying the formula rate of
increase set forth in Section 9.6 of this Agreement to the license fees set
forth in Schedule A, Attachment 1 for the period commencing on the Effective
Date through the effective date of such acquisition to establish the minimum
license fee per Software program (the "Base Fees"), and (ii) second, by Licensor
and Licensee, who shall negotiate in good faith to arrive at the license fees to
be charged; provided, however such sublicense fees shall not be greater than an
amount equal to twice the Base Fees. In the event any User License Agreements
are executed by Designated Providers, Schedule A to this Agreement shall be
amended to include a new Attachment 3 setting forth the agreed-upon license fees
applicable to such Designated Providers.
A-3
28
IV. License/Sublicense Fee Cap
Notwithstanding Sections II and III above, the total fees payable by
Licensee for its license and up to 90 sublicenses shall not exceed $4,000,000;
provided, however, that in the event Licensee (i) notifies Licensor in writing
on or before September 1, 1993 of Licensee's election to pay a lump sum for all
such fees equal to the difference between the total license and sublicense fees
paid by Licensee to date and (a) $3,200,000 if Licensee elects to continue to
use as a corporate multi-facility application and to sublicense use of the
Desktop Delivery System program to Affiliated Users or (b) $3,000,000 if
Licensee elects to surrender its right to use as a corporate multi-facility
application and to further sublicense use of the Desktop Delivery System
program, and (ii) remits payment to Licensor for such fees within thirty (30)
days of such notice, then the total fees payable by Licensee for its license and
up to 90 sublicenses shall not exceed $3,200,000 inclusive of the right to
continue using as a corporate multi-facility application and sublicensing use of
the Desktop Delivery System program or $3,000,000 with surrender of the right to
use as a corporate multi-facility application and to further sublicense use of
the Desktop Delivery System program; provided, however, the fee caps set forth
in this Section IV apply for the first ninety (90) sublicenses granted by
Licensee and the license fees per program comprising the Software as set forth
in Attachment 1 to this Schedule A shall apply beginning with the ninety-first
(91st) sublicense granted by License. The fee caps provided in this Section IV
shall not apply to sublicenses issued to Designated Providers.
V. Software Support and Maintenance Fees
1. Subject to the caps provided in this Section, software support
and maintenance fees for Licensee, Affiliated Users and Designated Providers
shall be based on a percentage of the sum of: (a) total corporate license fees
(described in Section II, but excluding any lump sum payment described in
Section IV) paid by Licensee to Licensor for the license to use the Software and
the Documentation and to sublicense such use pursuant to Section II above, plus
(b) the aggregate sublicense fees as determined pursuant
A-4
29
to the price schedule attached to this Schedule A for such Software programs
sublicensed and actually installed. Such percentage to be calculated on a
sliding scale as follows:
Percentage of
Amount of License/Sublicense Fees Paid License Fees
-------------------------------------- ------------
Up to $750,000 20%
$750,001 to $1,500,000 15%
Over $1,500,000 (up to applicable cap
of $3,200,000 or $4,000,000) 10%
2. a. Notwithstanding the foregoing, Software support and
maintenance fees for the first year of this Agreement, commencing on the
Effective Date, shall be $240,000 and shall be due and payable (i) $140,000 upon
execution of this Agreement and (ii) $100,000 on September 1, 1992. If the
Product Management program is not accepted by Licensee pursuant to Work Order
No. 001, Licensor shall refund $90,000 to Licensee and Licensor shall negotiate
with each Pilot Hospital (as defined in Work Order No. 001) for Software support
and maintenance services to commence one year after the Effective Date.
b. For all years of this Agreement subsequent to the first
year, the total fees payable by Licensee for annual Software support and
maintenance for its license and 90 sublicenses shall be calculated using the
formula set forth in paragraph 1 of this Section V, but in no event shall such
annual fees exceed $512,500 irrespective of the Software programs sublicensed
and actually installed; provided, however, that in the event Licensee elects to
limit its total license fees to either $3,200,000 or $3,000,000 (as described in
Section IV for its license and 90 sublicenses, then the total fees payable by
Licensee for annual Software support and maintenance for its license and 90
sublicenses shall in no event exceed $432,500 irrespective of the Software
programs sublicensed and actually installed. These fees shall be due and payable
within thirty (30) days after each anniversary date of the Effective Date of
this Agreement.
A-5
30
c. In the event Licensee enters into more than 90 sublicenses,
the fee caps contained in Section V.2.b shall be increased by an amount equal to
10% of the sublicense fees due and payable to Licensor within thirty (30) days
after the grant of such additional sublicenses.
d. After the first year's payment of annual Software support
and maintenance fees, such fees will be calculated as of and due and payable
after each anniversary date of the Effective Date of the Master Software License
and Professional Services Agreement; provided, however, Software support and
maintenance fees payable in connection with any programs sublicensed after an
anniversary date of the Effective Date shall be prorated over the period
commencing on the date of grant of the sublicense for such programs and ending
on the next succeeding anniversary date.
A-6
31
VI. Pass-through Fees
A. MDBS/IQ (per computer) MDBS/PI $750
MDBS/IQ (per file server MDBS/PI $1,500
used as a database
server in any network)
B. Express/EIS II (per end user) IRI $400
C. Distributed Budgeting MDBS/IQ $1,500
(per site)
Pass-through fees shall be due and payable within thirty (30) days following
grant of the applicable sublicense. Total pass-through fees payable by Licensee
for Express/EIS II shall be capped and shall not exceed $40,000. Each $400
payment shall be credited against this $40,000 cap.
A-7
32
Schedule A
Attachment 1
Affiliated User Price Schedule
License
Ownership Fee
--------- -------
A. TEAMWORK(TM) Programs
Product Management HCm $16,250
Payment Verification HCm 8,750
Budgeting and
Budgeting Interface HCm 8,000
Labor Planning and Control
and Labor Planning and
Control Interface HCm 4,675
Distributed Budgeting HCm 2,500
Capital Budgeting (CapTrac) HCm 3,000
Standard Costing and
Standard Costing Interface HCm 11,875
Labor Productivity HCm 18,750
Rate Setting (RTrac) HCm 2,000
B. Desktop Delivery System HCm 25,000
- Departmental Analysis
- Patient Care Management
(which includes Physician
Analysis, Product Analysis
and Payor Analysis)
- Key Indicators
A-8
33
Schedule A
Attachment 2
TEAMWORK(TM) MODULES
TEAMWORK(TM) Product Management is a comprehensive product line management
system which turns case mix into a true decision support system. It contains
sophisticated forecasting and modeling features to support payor contract
evaluation and modeling, clinical treatment profile development, user-defined
product, outlier, and acuity classifications, and detailed reporting by payor,
physician, product, etc. Intelligent Query Ad-hoc Reporting, included within the
TEAMWORK(TM) Product Management module, provides complete ad-hoc query and
custom reporting capabilities to the entire TEAMWORK(TM) product line. Its
menu-driven design facilitates the development of user-defined reports and
on-line data base queries. Output can be displayed on the screen, printed,
written to a file, or transferred directly into LOTUS worksheet format.
TEAMWORK(TM) Payment Verification is an integrated module of the TEAMWORKTM
Product Management application designed to track and monitor detailed contract
information and to produce "Explanations of Reimbursement" detailing the net
amount due the hospital from the payor with the payment due date, as well as a
step-by-step explanation of the reimbursement calculation.
TEAMWORK(TM) Desktop Delivery System is a unique new management tool which
instantly delivers strategic and operational information to your desktop. By
integrating data from multiple systems and different vendors, the system
provides a standard and efficient way to share information throughout your
organization. This powerful system uses the latest technology combined with an
easy to use graphical interface to turn your information into knowledge
throughout your entire staff. There are three "modules" included with this
system:
- Departmental Analysis
A-9
34
- Patient Care Management (which includes Physician Analysis, Product
Analysis and Payor Analysis)
- Key Indicators
TEAMWORK(TM) Budgeting is a sophisticated yet easy to use tool which facilitates
the development of the hospital's entire operating budget. It contains features
for statistical forecasting from historical data, fixed, flexible or product
based budget development, automated budget worksheets, financial modeling and
comprehensive performance and productivity reports.
TEAMWORK(TM) Labor Planning and Control is used to plan and control the
hospital's labor expenses, using detailed information by employee to develop the
budget and monitor performance. It contains features for flexible budget
development using standards by job code and performance reports by pay period
and by month.
TEAMWORK(TM) Standard Costing is used to develop procedure-level standard costs.
It supports 80/20 selection of the procedures for which a detailed xxxx of
materials will be developed, and will calculate a standard cost for all
procedures. It contains comprehensive overhead allocation calculations and
standards verification reports.
CapTrac(TM) Capital Budgeting is a comprehensive capital planning and tracking
system for health care facilities which can function independently, or in
conjunction with established TEAMWORK(TM) applications, in a single or
multi-user environment. The system includes capital budgeting and performance
tracking.
TEAMWORK(TM) Labor Productivity Management is a comprehensive productivity
management system that assists all management team members to track productivity
by employee and department, allowing for the most efficient use of labor
resources while maintaining high standards for patient care.
RTrac(TM) Rate Optimization System helps the hospital to maximize their net
revenues by properly assessing the impact of rate changes by procedure.
A-10
35
Distributed Budgeting works in conjunction with the TEAMWORK(TM) Budgeting
system to provide department heads with a tool to facilitate budget development.
Distributed Budgeting is an automated system used to review historical data,
enter budget requests, and print detail and summary reports to evaluate the
budget as it is being developed. The completed budget is then submitted to the
budget department in an automated manner via diskette.
A-11
36
SCHEDULE B
The Hardware
Licensor acknowledges that the Software will operate on a 386 or faster
IBM, Compaq or Gateway personal computer system, using the DOS Operating System
Version 4.0 or 5.0 or Novell Netware 386 Version 3.11A or subsequent versions,
together with Licensor's security sentinel and Tecmar QT or Datavault tape
backup system.
Licensor shall provide its security sentinel as an accessory item to be
billed separately to Licensee at a cost of $75.
B-1
37
SCHEDULE C
HCm Competitor List
American Express Information Systems
Dilts, Kappeler, Durham & Company
Dun & Bradstreet Software
Ernst & Young (excluding the Audit Group)
Gerber Alley
Global Software, Inc.
HBO and Company
Hospital Cost Consultants
IBAX
Innovative Software Solutions, Inc.
Maximus, Inc.
Medicus Systems Corporation
Meditech
Phamis, Incorporated
Shared Medical Systems, Inc.
Sun Health Systems
Transition Systems, Inc.
C-1
38
EXHIBIT 1
FORM USER LICENSE AGREEMENT
-----------------------------------------
This USER LICENSE AGREEMENT (the "Agreement") is made and entered into as
of the ____ day of ________________, 199_, by and between Healthtrust, Inc. The
Hospital Company ("Sublicensor") and ________________________________, a
____________ corporation, whose principal place of business is in
__________________________ ("Affiliated User").
WHEREAS, Sublicensor has licensed from Health Care microsystems, Inc., a
California corporation ("Licensor") the Software (defined below), and certain
documentation related to the Software (the "Documentation"), and has been
authorized to sublicense the Software and the Documentation in accordance with
the terms and conditions of the Master Software License (the "Master
Agreement"), and Sublicensor desires to sublicense the Software and the
Documentation to Affiliated User; and
WHEREAS, Affiliated User is a hospital, clinic or other health care
provider that Sublicensor operates or in which Sublicensor holds a 50% or
greater equity interest and desires to acquire from Sublicensor a perpetual,
non-exclusive, paid-up, royalty-free, worldwide license for the Software and the
Documentation of Licensor; and
WHEREAS, Affiliated User desires to obtain software support and
maintenance services for the Software and the Documentation pursuant to the
terms and conditions contained in the Master Agreement.
NOW THEREFORE, in consideration of the premises, the mutual obligations
contained herein and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties covenant and agree as
follows:
SECTION I - DEFINITIONS
39
1.1 "Documentation" is defined to include any user manuals, training
materials, specifications and other material related to the Software.
1.2 "Software" is defined as the software, furnished by Licensor to
Affiliated User, including any related interfaces, as more fully described in
Schedule AA, which is incorporated herein by reference.
SECTION II - LICENSE
2.1 Upon full payment of the Software license fee to Licensor by
Sublicensor on behalf of Affiliated User for the Software listed in Schedule AA,
Sublicensor hereby grants to Affiliated User a fully-paid, perpetual,
non-exclusive, royalty-free license to use the Software and the Documentation at
Affiliated User's premises or at Sublicensor's offices solely for the data
processing needs of Affiliated User, subject to the terms and conditions set
forth in the Master Agreement. The license granted hereunder includes without
limitation the right to reproduce or copy all or any portion of the Software in
machine-readable or printed form as determined by Affiliated User to be
reasonably required for its own internal data processing needs and archival and
backup purposes, the right to share data with Sublicensor and other Affiliated
Users that have executed User License Agreements and the right to reproduce
copies of the Documentation for its own use.
2.2 Affiliated User acknowledges that portions of the Software licensed
under this Agreement are owned by Micro Data Base Systems, Inc. ("MDBS"),
Programmed Intelligence, Inc. ("PI"), or Information Resources, Inc. ("IRI").
Affiliated User further acknowledges that the MDBS, PI and IRI portions of the
Software may not be used by Affiliated User as stand-alone software products,
but only as component parts of the Software. Affiliate User agrees to execute
separate agreements with each of MDBS, PI and IRI in the forms attached as
Schedule CC.
2
40
SECTION III - LICENSE FEE, TAXES AND EXPENSES
3.1 As consideration for the perpetual license to use the Software and the
Documentation granted to Affiliated User herein, Affiliated User agrees to pay
to Sublicensor a one-time license fee in the amount and payable in accordance
with the payment schedule set forth in Schedule A to the Master Agreement.
3.2 Affiliated User shall pay all sales, use and personal property taxes
assessed in connection with this Agreement; provided, however, that Licensor and
Sublicensor shall pay all taxes based on Licensor and Sublicensor's business
operations (including without limitation employment taxes and taxes levied on
their respective income).
3.3 Affiliated User shall reimburse Sublicensor for the reasonable and
necessary out-of-pocket expenses incurred by Licensor or Sublicensor and paid by
Sublicensor on behalf of Affiliated User in connection with this Agreement,
including any hardware and security device(s) described in Schedule BB.
SECTION IV - SOFTWARE SUPPORT AND MAINTENANCE
Software support and maintenance services shall be provided by Licensor to
Affiliated User in accordance with the terms and conditions of the Master
Agreement pursuant to the fee schedule adopted by Sublicensor from time to time.
SECTION V - ADDITIONAL TERMS
The provisions of the Master Agreement relative to Licensor's Warranties,
Limitations of Liability, Title to Software and Documentation, Confidentiality,
Publicity, Books and Records, Indemnity and Termination and Survival and
Severability are hereby incorporated by reference and adopted herein.
3
41
SECTION VI - MISCELLANEOUS
6.1 Affiliated User may, without the consent of Licensor, assign this
Agreement and its rights and obligations hereunder to (i) an entity that
Licensee operates or in which Licensee holds a 50% or greater interest that
succeeds to the business of Affiliated User or (ii) a third party that is not
affiliated with Affiliated User or Sublicensor and that purchases all or
substantially all of the assets of or ownership interest in Affiliated User,
provided that such third-party assignee's continued use of the Software and the
Documentation shall be conditioned upon the execution of a license agreement
with Licensor and such assignee shall take the Software and the Documentation
subject to Licensor's then current rates for Software support and maintenance.
This Agreement shall inure to the benefit of and bind successors and permitted
assigns of Licensor, Sublicensor and Affiliated User.
6.2 This Agreement shall be governed by and construed in all respects in
accordance with the substantive laws of the State of Tennessee.
6.3 All remedies available to either party for one or more breaches by the
other party are and shall be deemed cumulative and may be exercised separately
or concurrently without waiver of any other remedies. The failure of either
party to act on a breach of this Agreement by the other shall not be deemed a
waiver of such breach or a waiver of future breaches, unless such waiver shall
be in writing and signed by the party against whom enforcement is sought.
4
42
6.4 All notices required or permitted under this Agreement shall be in
writing and shall be sent to the other party at the address specified above or
to such other address as either party may substitute from time to time by
written notice to the other and shall be deemed validly given upon receipt of
such notice given by certified mail, postage prepaid, or personal or courier
delivery to:
If to Sublicensor:
Healthtrust, Inc. - The Hospital Company
P. O. Xxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Director of Information Services,
with a copy to:
Healthtrust, Inc. - The Hospital Company
P. O. Xxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to Affiliated User:
_____________________________
_____________________________
_____________________________
_____________________________
6.5 This Agreement and the Master Agreement, and any schedules and
exhibits attached hereto and thereto, constitute the entire agreement of the
parties hereto with respect to the subject matter hereof and supersede all prior
representations, proposals, discussions, and communications, whether oral or in
writing. This Agreement may be modified only in writing and shall be enforceable
in accordance with its terms when signed by the parties sought to be bound.
6.6 Affiliated User acknowledges that Licensor reserves the right to
enforce the terms and conditions of this Agreement, including without limitation
the right to terminate the license
5
43
granted hereunder for breach by the Affiliated User of the terms hereof.
6.7 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together constitute one and
the same document. In making proof of this Agreement, it shall not be necessary
to produce or account for more than one such counterpart executed by the party
against whom enforcement by this Agreement is sought.
6
44
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives, as of the date first above written.
Healthtrust, Inc. - The Hospital -------------------------------
Company [Hospital's name]
By: By:
------------------------------- -------------------------------
Title: Title:
---------------------------- ----------------------------
7
45
SCHEDULE AA
Schedule of Licensed Programs
Licensed
TEAMWORK(TM) Programs Ownership Programs
--------------------- --------- --------
Product Management, including HCm [ ]
MDBS/IQ (per computer) MDBS/PI [ ]
or
MDBS/IQ (per network) MDBS/PI [ ]
Payment Verification, including HCm [ ]
MDBS/IQ (per computer) MDBS/PI [ ]
or
MDBS/IQ (per network) MDBS/PI [ ]
Budgeting and
Budgeting Interface, including HCm [ ]
MDBS/IQ (per computer) MDBS/PI [ ]
or
MDBS/IQ (per network) MDBS/PI [ ]
Labor Planning and Control
and Labor Planning and
Control Interface, including HCm [ ]
MDBS/IQ (per computer) MDBS/PI [ ]
or
MDBS/IQ (per network) MDBS/PI [ ]
Distributed Budgeting, including HCm [ ]
Distributed Budgeting MDBS/IQ
and
MDBS/IQ (per computer) MDBS/PI [ ]
or
MDBS/IQ (per network) MDBS/PI [ ]
Capital Budgeting (CapTrac) HCm [ ]
AA-1
46
SCHEDULE AA (continued)
Standard Costing and
Standard Costing Interface, HCm [ ]
including
MDBS/IQ (per computer) MDBS/PI [ ]
or
MDBS/IQ (per network) MDBS/PI [ ]
Labor Productivity, including HCm [ ]
MDBS/IQ (per computer) MDBS/PI [ ]
or
MDBS/IQ (per network) MDBS/PI [ ]
Rate Setting (RTrac) HCm [ ]
Desktop Delivery System, HCm [ ]
including
Express/EIS II (per end user) IRI
AA-2
47
SCHEDULE BB
The Hardware
Affiliated User shall use the Software on a 386 or faster IBM, Compaq or
Gateway personal computer system, using the DOS Operating System Version 4.0 or
5.0 or Novell Netware 386 Version 3.11A or subsequent versions, together with
Licensor's security sentinel and Tecmar QT or Datavault tape backup system.
BB-1
48
SCHEDULE CC
USER ACKNOWLEDGEMENT OF SOFTWARE LICENSE -- MDBS
User's Name:
Address:
1) User has entered into a license for certain software supplied by Health
Care microsystems, Inc. ("HCm"). Such software includes programs supplied
to HCm by Micro Data Base Systems, Inc. ("MDBS"), X.X. Xxx 000, Xxxxxxxxx,
Xxxxxxx 00000, X.X.X.
2) User disclaims any ownership rights and other intellectual property rights
in such software, and any accompanying copyrights therein, and
acknowledges that its right to use such software is defined in its
license.
3) User's license does not authorize the use of the MDBS portion of the
Software as a stand-alone software product, but only as part of the
Software.
4) User may make the minimum necessary number of copies reasonably needed for
use, backup and archival purposes only and may use, copy or modify the
Software only in accordance with its license.
5) User has covenanted, through its license, that it will not delete any
identifying marks or copyright notices in or on the Software.
6) This document is not intended to serve as an addendum, supplement or
modification to or of User's license. In the event of any conflict between
this document and User's license, the license shall control.
USER:
By:
--------------------------------
CC-1
49
Name:
-------------------------------
Title:
------------------------------
Date:
-------------------------------
CC-2
50
SCHEDULE CC (continued)
USER ACKNOWLEDGEMENT OF SOFTWARE
LICENSE -- INTELLIGENT QUERY
User's Name:
Address:
1) User has entered into a license for certain software supplied by Health
Care microsystems, Inc. ("HCm"). Such software includes programs supplied
to HCm by Programming Intelligence, Inc. ("PI"), 0000 Xxxxxxx Xxxx,
Xxxxxxx, Xxxxxxx 00000.
2) User disclaims any ownership rights and other intellectual property rights
in such software, and any accompanying copyrights therein, and
acknowledges that its right to use such software is defined in its
license.
3) User's license does not authorize the use of the PI portion of the
Software as a stand-alone software product, but only as part of the
Software.
4) User may make the minimum necessary number of copies reasonably needed for
use, backup and archival purposes only and may use, copy or modify the
Software only in accordance with its license.
5) User has covenanted, through its license, that it will not delete any
identifying marks or copyright notices in or on the Software.
6) This document is not intended to serve as an addendum, supplement or
modification to or of User's license. In the event of any conflict between
this document and User's license, the license shall control.
CC-3
51
USER:
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
Date:
-------------------------------
CC-4
52
SCHEDULE CC (continued)
USER ACKNOWLEDGEMENT OF SOFTWARE
LICENSE -- INFORMATION RESOURCES, INC.
User's Name:
Address:
1) User has entered into a license for certain software supplied by Health
Care microsystems, Inc. ("HCm"). Such software includes programs supplied
by Information Resources, Inc. ("IRI").
2) User disclaims any ownership rights and other intellectual property rights
in such software, and any accompanying copyrights therein, and
acknowledges that its right to use such software is defined in its
license.
3) User's license does not authorize the use of the IRI portion of the
Software as a stand-alone software product, but only as part of the
Software.
4) User may make the minimum necessary number of copies reasonably needed for
use, backup and archival purposes only and may use, copy or modify the
Software only in accordance with its license.
5) User has covenanted, through its license, that it will not delete any
identifying marks or copyright notices in or on the Software.
6) This document is not intended to serve as an addendum, supplement or
modification to or of User's license. In the event of any conflict between
this document and User's license, the license shall control.
USER:
CC-5
53
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
Date:
-------------------------------
CC-6
54
EXHIBIT 2
LICENSOR'S PROPOSAL
DATED JUNE 7, 1991
Pages 36-59 of the Licensor's Proposal dated June 7, 1991, attached
hereto, are incorporated by reference herein.
