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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 10.5
INFORMATION SYSTEMS TECHNOLOGY LICENSE
This Agreement is made as of the 3rd day of May, 1996 (the "Effective
Date"), by and among Partners HealthCare System, Inc., a Massachusetts
not-for-profit corporation ("Partners"), Xxxxxxx and Women's Hospital, Inc., a
Massachusetts not-for-profit corporation. ("Xxxxxxx"; Partners and Brigham are
referred to herein collectively as the "Licensors" and individually as a
"Licensor"), and Integrated Healthcare Solutions, Inc., a Delaware corporation
("IHS" or "Licensee").
FACTUAL BACKGROUND
The following sets forth the factual background to this Agreement:
x. Xxxxxxx, which is controlled by Partners through Brigham's
parent corporation, The Xxxxxxx Medical Center, Inc., has developed or
has plans to develop certain clinical information systems technology,
referred to herein as the Licensed Technology, for use in Brigham's own
internal operations.
b. IHS desires to license from Licensors the Licensed
Technology for the purpose of further developing the Licensed
Technology, and then licensing the Licensed Technology, and selling
related services, to hospitals and other healthcare providers.
c. In consideration for Licensors entering into this Agreement
and licensing to IHS the Licensed Technology upon the terms and
conditions hereinafter set forth, IHS has agreed to issue to Partners
capital stock in IHS, and to make certain royalty payments to Partners,
all on the terms and conditions hereinafter set forth.
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AGREEMENT
Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
TERMS AND CONDITIONS
1. Definitions.
The following capitalized terms used in this Agreement shall have the
following meanings:
"Affiliate" of a party means any corporation, partnership, joint
venture, business trust, limited liability company or other legal entity which
is controlled by, controlling or under common control with such party, where
control means either (i) the power to direct the vote or disposition of at least
20% of the outstanding stock, partnership interests, membership interests or
other interests of such entity, (ii) the power to appoint a majority of the
Board or other governing body of such entity, or (iii) any contract or
arrangement for the provision of substantial management services to such entity.
The term also includes an Affiliate, under this definition, of any such entity.
Without limiting the foregoing, Affiliates of Licensors shall include the
General, Xxxx Xxxxxx and PCHI.
"Common Stock" means the Common Stock, $.01 par value, of IHS.
"Covered Infringement Persons" means such parties as are stipulated in
a separate side letter dated as of the date hereof among Licensors and Licensee.
"Xxxx Xxxxxx" means the Xxxx-Xxxxxx Cancer institute, Inc., a
Massachusetts not-for-profit corporation.
"Derivative Work" means (i) a work that is based on one or more
preexisting works, such as a revision, modification, translation, abridgment,
condensation or expansion, or any other form in which such preexisting works may
be recast, transformed, or adapted, and that, if prepared without authorization
of the owner of the copyright in such preexisting work, would constitute a
copyright infringement, and (ii) any enhancement, fix or upgrade to a
preexisting work.
"Developed Technology" shall have the meaning ascribed to that term in
the Partners' Affiliates Assistance Agreement.
"Employment Agreement" means that certain Employment Agreement between
IHS and Xxxxxx dated as of May 1, 1996.
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"Excluded Software" means all of the software modules and Software
Technology used in conjunction with the Licensed Technology that have been or
may hereafter be developed for either of the Licensors by a third party, and
which the Licensors do not have the right to license to IHS in accordance with
the terms of this License, and which include as of the date of this Agreement
the software referenced on Exhibit B attached hereto.
"Future IS Technology" means all of Licensor's right, title and
interest in and to the following software, including, without limitation, all
Object Code and Source Code related thereto, if any:
(i) all software modules and Software Technology
developed by or on behalf of Licensors (not including Licensee
Derivative Works) that fulfill any of the functions described on
Exhibit C attached hereto; and
(ii) all Derivative Works developed by or on behalf
of Licensors (not including Licensee Derivative Works) to such software
modules and Software Technology to IS Technology;
but only to the extent such software is developed by or on behalf of Licensors
prior to the later of (A) the date which is three (3) years from the Effective
Date, or (B) the date of IHS' initial public offering, but if such offering does
not occur prior to five (5) years from the Effective Date, the date which is
five (5) years from the Effective Date; and provided further that Future IS
Technology does not include any Excluded Software.
"General" means, collectively, The General Hospital Corporation, a
Massachusetts non-profit corporation, and The Massachusetts General Hospital, a
Massachusetts nonprofit corporation.
"IHN" means integrated health network technologies.
"IS" means information systems technologies.
"IS Technology" means all of Licensors' right, title and interest in
and to the IS software modules and Software Technology described on Exhibit A
attached hereto, including without limitation, Object Code and Source Code
related thereto, if any; provided, however, that IS Technology does not include
any Excluded Software.
"Indemnitees" has the meaning set forth in Section 12 of this
Agreement.
"License" has the meaning ascribed to that term in Section 2.A of this
Agreement.
"Licensed Technology" means the IS Technology, the Future IS Technology
and the Developed Technology.
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"Licensee Derivative Work" means a Derivative Work based upon Licensed
Technology prepared by or on behalf of Licensee.
"Licensors" mean Partners and Brigham, collectively.
"New Product" has the meaning set forth in Section 4.B of this
Agreement.
"Object Code" means programs assembled or compiled in magnetic or
electronic binary form on software media, which are readable and usable by
machines, but not generally readable by humans without reverse assembly, reverse
compiling, or reverse engineering.
"Partners 'Affiliates Assistance Agreement" means that certain
Partners' Affiliates Assistance Agreement, dated as the date hereof, by and
among IHS, Partners and its Affiliates pursuant to which IHS will provide
certain information systems services for Partners and its Affiliates, as
described therein.
"PCHI" means Partners Community Healthcare, Inc. a Massachusetts
corporation.
"Proprietary Information" shall consist of any information that is
designated as proprietary by a party hereto. Proprietary information may be
disclosed in any manner, whether orally, visually, or in tangible form
(including, without limitation, documents, devices, and computer readable
media). Tangible materials that disclose or embody Proprietary Information shall
be marked as "Proprietary," "Confidential," or the substantial equivalent
thereof, in order to be treated as Proprietary Information. Proprietary
Information that is disclosed orally or visually shall be identified by the
disclosing party thereof at the time of disclosure and reduced to a written
summary by the disclosing party who shall xxxx such summary as "Proprietary,"
"Confidential," or the substantial equivalent thereof and deliver it to the
receiving party by the end of the month following the month in which disclosure
occurs. The recipient of such information shall treat it as Proprietary
Information pending receipt of such summary. Notwithstanding and in addition to
the foregoing, all of the following information of Licensors or Licensee shall
be Proprietary Information: any and all trade secrets and confidential business
information regarding research and development activities; finances, business
strategy, business plans, marketing plans and strategies; pricing and costing
policies; prototypes, technical procedures and processes; technical
specifications, Source Code, software designs and architecture drawings to any
software licensed hereunder.
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of the date hereof, by and among Partners, Licensee, Xxxxxx,
xx affiliate of Xxxxxx and certain other parties named therein.
"Required Future IS Technology" means all of the Future IS Technology
that is denoted as required technology on Exhibit C attached hereto.
"Restricted Territory" means anywhere in Massachusetts east of US
Interstate 495.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
"Royalty Milestones" means aggregate royalty payments by Licensee
pursuant to Section 5 hereof, based upon actual sales and service revenues,
sufficient to meet the following aggregate payment milestones by the following
dates:
[*] anniversary of this Agreement $ [*]
[*] anniversary of this Agreement $ [*].
"Software Technology" with respect to any software modules means
systems and utilities software (including without limitation middleware) used in
or necessary the operation or running of such software modules and any and all
rules and algorithms embodied in any such software modules or systems and
utilities software.
"Source Code" means programs written in programming languages,
including all comments and procedural code, such as job control language
statements, in a form intelligible to trained programmers and capable of being
translated into Object Code for operation on computer equipment through assembly
or compiling, and accompanied by documentation (which may include flow charts,
schematics, statements of principles of operations, and architecture standards)
describing the data flows, data structures, and control logic of the software in
sufficient detail to enable a trained programmer through study of such
documentation to maintain and/or modify the software.
"Stockholders Agreement" means that certain Stockholders Agreement,
dated as of the date hereof, by and among Partners, Licensee, Xxxxxx, certain
affiliates of Xxxxxx and certain other parties named therein.
"Technical Services Agreement" means that certain Technical Services
Agreement, by and among the parties hereto, dated as of the date hereof.
"Xxxxxx" means Xxxxxx X. Xxxxxx, the principal stockholder of IHS as of
the date of this Agreement.
2. General Terms.
a. License Grant. Subject to the terms and conditions of this
Agreement (including without limitation Section 2.C and Section 7), Licensors
hereby grant to IHS, and IHS accepts, a worldwide, exclusive, irrevocable,
license to use, exploit and otherwise commercialize (the "License") the Licensed
Technology, including without limitation the following rights: (i) to prepare
Licensee Derivative Works, (ii) to directly or indirectly develop, manufacture,
market, distribute, demonstrate, maintain and support products based in whole or
in part on the Licensed Technology, (iii) to make copies of the Licensed
Technology, and (iv) to sublicense the Licensed Technology. Notwithstanding
anything contained herein to the contrary, the License does not grant, or
purport to grant, to IHS any rights in and to the Excluded Software.
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b. Certain Restrictions. In addition to the other terms and
conditions of this Agreement, and notwithstanding anything herein to the
contrary, the License shall be subject to the following restrictions:
(i) Licensee shall not sell, license, assign or
otherwise transfer any Licensed Technology licensed hereunder
to any party located in, or otherwise for use in, the
Restricted Territory without the prior written consent of
Partners.
(ii) Licensee shall not sell, sublicense, assign or
transfer Licensed Technology to any party who has the right in
turn to sell, sublicense, assign or transfer such Licensed
Technology, unless such party shall agree in writing to the
territorial restriction set forth in the foregoing Section
2.B.(i).
(iii) Licensors shall continue to have the
unrestricted irrevocable right to use the Licensed Technology
in their internal operations and the internal operations of
any and all of their Affiliates for any and all purposes, and
shall be entitled to grant internal use Object Code licenses
in and to the Licensed Technology to (x) any
physician-controlled entity that provides professional
services to PCHI pursuant to a professional services agreement
or affiliation agreement, and (y) any person or entity
(whether or not an Affiliate) that is connected to, or has the
right to connect to or otherwise access, any network using or
running the Licensed Technology that is operated or maintained
by either of the Licensors or any of their Affiliates, but
only if such person or entity is connecting to or accessing
such network for the primary purpose of (A) sharing
information in the database of either of the Licensors or any
of their Affiliates, (B) sharing information useful in or
necessary to the care, treatment or insuring of patients or
prospective patients (including without limitation so-called
"covered lives") that are common to both such person or entity
and either of the Licensors or any of their Affiliates, and/or
(C) providing systems management services to physician groups
or other healthcare providers associated with either of the
Licensors or any of their Affiliates.
c. Conversion to Non-Exclusive License. In the event that IHS
does not pay royalties (based upon actual revenues) hereunder sufficient to meet
either of the Royalty Milestones, or IHS or Xxxxxx does not otherwise pay an
amount sufficient to meet such Royalty Milestones, then subject to the next
sentence hereof Partners may at its election and upon thirty (30) days prior
written notice convert the License to a non-exclusive license, in which event
Licensors shall have completely unrestricted rights to the Licensed Technology
for all purposes (including without limitation the right to use any and all
means to exploit and commercialize the Licensed Technology), subject only to
Section 19 hereof and Licensee's non-exclusive rights hereunder. If Partners
exercises such conversion right hereunder, it shall, as a condition to such
exercise, simultaneously transfer to IHS 370,609 shares of Common Stock,
adjusted for stock dividends, stock splits, combinations and the like, of IHS
owned by it, or its Affiliates, by
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delivering to IHS prior to the effective date of the conversion of the License
to a non-exclusive License stock certificates representing such shares, duly
endorsed for transfer to IHS.
d. New Technologies. Each Licensor hereby agrees that if it
develops, or has developed for it, additional IS modules and IHN modules
(collectively, "New Modules") that are not included in the Licensed Technology,
but that may be used in conjunction therewith, it will not license or offer to
license such New Modules to any party before offering IHS an exclusive license
to such New Modules for such consideration and on such other terms and
conditions as such Licensor may deem appropriate.
Such Licensor shall make such offer to Licensee in writing pursuant to
a notice (the "Offer Notice") which sets forth the terms of such proposed
license in reasonable detail. If Licensee desires to license such New Modules,
it shall notify such Licensor in writing of such desire within fourteen (14)
days of receipt of the Offer Notice. Licensor and Licensee shall then negotiate
in good faith with respect to entering into a definitive license agreement with
respect to such New Modules.
In the event that IHS and such Licensor, after such good faith
negotiation, are unable to negotiate a mutually acceptable license to such New
Modules within 120 days after the date of the Offer Notice, such Licensor may
offer to license the New Modules to a third party, but on terms and conditions
not more favorable than those offered to IHS in the Offer Notice.
Notwithstanding the foregoing, in the event that any third party has developed
any of the New Modules for a Licensor, and such Licensor does not have the
unrestricted right, title and interest in and to such New Modules, the
provisions of this Section 2.D shall not apply to the extent that they would
conflict with any such third party rights in and to the New Modules.
e. No Transfer of Title. The rights and licenses herein
granted by Licensors to Licensee do not transfer to Licensee any title in and to
the Licensed Technology (including, without limitation, title to any and all
applicable patents, copyrights, trademarks and trade secrets), and all right,
title and interest therein, except for such licenses otherwise explicitly
granted pursuant to this Agreement, are retained by Licensors or third parties
that have provided Licensed Technology to Licensors, as the case may be.
Licensee shall include on copies of Licensed Technology such copyright, patent,
trademark or other proprietary notices as may be required by third parties who
have provided Licensed Technology, and as otherwise may be necessary to protect
both Licensors' and IHS' rights therein.
f. Licensors' Third Party Negotiations. If and when Licensors
are entering into any contracts or arrangements for the development of any New
Modules or technology which would be Future IS Technology (but for the fact that
it would constitute Excluded Software), Licensors shall also request that they
be entitled to license to IHS the rights to such technology or New Modules, as
the case may be, as are provided for in this Agreement. If such third party
requires payment of any additional amounts in order to permit Licensors to grant
such rights to IHS, Licensors shall notify IHS of such requirement, and IHS may
at its election,
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exercised promptly after receiving such notice, elect to pay such amounts, in
which event Licensors or IHS shall negotiate in good faith with such third party
to obtain such rights for IHS.
g. IHS' Third Party Licenses. IHS agrees that each and every
license or other agreement pursuant to which IHS transfers, assigns, provides or
licenses Licensed Technology to any third party shall include a provision
pursuant to which such third party shall (i) covenant not to xxx or institute
any action or otherwise make a claim against Licensors or their Affiliates on
account of or related to IHS' provision of products or services, with sole
recourse being against IHS, and (ii) agree that Licensors and their Affiliates
shall be entitled to rely upon such covenant as intended beneficiaries.
Licensors and their Affiliates need not be mentioned by name in any such
provision as long as they are included in a class description, such as
"hospitals and their affiliates that have licensed software to IHS", or other
similar description in such provision.
h. Title Transfer. If at the time Licensee is contemplating an
initial public offering Licensee's Board of Directors reasonably determines that
transfer to Licensee of title in and to the Licensed Technology will have a
material beneficial effect on the valuation of the company at the time of the
initial public offering, then Licensors and Licensee shall use commercially
reasonable efforts to negotiate and agree upon mutually acceptable terms to
transfer to Licensee title to or other ownership interest in the Licensed
Technology for nominal consideration. In any event, even if such transfer is
agreed to, Licensors and their Affiliates shall be entitled to retain or be
granted such rights in and to the Licensed Technology (other than title) as they
have under the terms of this Agreement.
Except for transfers of title in and to the Licensed Technology to
Affiliates of Licensors, in which case such Affiliates shall agree to be bound
by the terms and conditions of this Agreement, Licensors shall not agree to
transfer title in and to any of the Licensed Technology to any third party
without giving Licensee a right of refusal on such transfer in accordance with
the following provisions of this paragraph. Licensors shall give Licensee prompt
written notice of the terms and conditions of any proposed transfer to a third
party pursuant to a bona fide written offer prior to the consummation thereof,
and Licensee shall have thirty (30) days from the date of such notice to notify
Licensors in writing of its intention to acquire title to the Licensed
Technology on the same, or no less favorable, terms and conditions as are set
forth in the third party offer. If Licensee so desires to acquire title and so
notifies Licensors, Licensors shall negotiate with Licensee in good faith during
such 120-day period in order to effect such transfer; provided that if agreement
is not reached by the end of such period, Licensors shall be free to transfer
title upon the terms and conditions offered by the third party offeror. Even if
Licensee elects not to exercise such right, Licensee shall not transfer title to
any of the Licensed Technology unless the transferee agrees in writing to be
bound by all the terms and conditions of this Agreement applicable to Licensors.
3. Software Transfer. Licensors shall as soon as practicable deliver to
IHS one copy of the Object Code and Source Code and any and all available and
currently used installation and operation documentation to the IS Technology,
and shall promptly when reasonably
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available after completion of any module or enhancement comprising Future IS
Technology, deliver one copy of the Object Code and Source Code and any and all
other available installation and operation documentation thereto. Licensors
shall provide at IHS' request and expense such additional copies of Object Code,
Source Code and installation and operation documentation to Licensed Technology
as IHS may reasonably require. For the period ending eighteen (18) months from
the Effective Date, Licensors shall provide up to thirty (30) person days of
support services as Licensee may reasonably require in order to assist Licensee
in installing Future IS Technology.
4. IHS Obligations and Cross-License Provisions.
a. IHS Business. Among other services provided by IHS, IHS
will engage in the business of sublicensing the Licensed Technology and Licensee
Derivative Works to hospitals and other healthcare providers, and providing
support, maintenance, installation and consulting services to such providers in
connection therewith. It is anticipated that, in connection with such business,
IHS may improve the Licensed Technology and create Licensee Derivative Works.
b. Cross-License to Licensee Derivative Works. Subject to the
terms and conditions of this Agreement (including without limitation Section 7),
IHS hereby grants to Licensors and their Affiliates a royalty-free, irrevocable,
internal use license (including without limitation the right to make Derivative
Works and unlimited copies) to any and all Licensee Derivative Works (including
without limitation all Source Code and Object Code thereto) which do not
constitute New Products, as defined in Section 4.C. below. Without limitation,
such license to Licensee Derivative Works shall also include all such rights as
are retained with respect to Licensed Technology as set forth in Section
2.B(iii) hereof. Copies of the Object Code and Source Code, and other available
documentation as may be necessary or advisable to install and operate such
Licensee Derivative Works, shall be provided to Licensors promptly when
reasonably available. Licensors shall not alter, remove, or obscure any of
Licensee's or any other party's copyright, patent, trademark or proprietary
notices from any Licensee Derivative Works supplied by Licensee to Licensor(s)
hereunder.
IHS shall provide free of charge through the period ending eighteen
(18) months from the Effective Date up to thirty (30) person days of such
support services as Licensors may reasonably request in order to assist
Licensors and their Affiliates in installing such Licensee Derivative Works and
integrating them with Licensors' systems. Thereafter, Licensee will provide such
support services on terms and conditions no less favorable than are offered to
Licensee's most favored customers. Notwithstanding anything contained here to
the contrary, in the event that any third party has developed any Licensee
Derivative Work for IHS, and IHS does not have the unrestricted right, title and
interest in and to such Licensee Derivative Work, the provisions of this Section
4.B shall not apply to the extent that they would conflict with any such third
party rights.
If and when Licensee enters into any contracts or arrangements with a
third party for the development of any Licensee Derivative Works, Licensee shall
also request that it be entitled to
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
license to Licensors an their Affiliates the rights to Licensee Derivative
Works as are provided for in this Agreement. If such third party requires
payment of any additional amounts in order to permit Licensee to grant such
rights to Licensors and their Affiliates, Licensee shall notify Partners of such
requirement, and Partners may at its election, exercised promptly after
receiving such notice, elect to pay such amounts, in which event Licensee or
Licensors shall negotiate in good faith with such third party to obtain such
rights for Licensors and their Affiliates.
c. License to Future IHS Technology. IHS shall offer to
Licensors and their Affiliates a license to all New Products as defined below
and all IS and IHN modules developed by IHS on terms and conditions no less
favorable than they are licensed or offered for license to IHS' most favored
customers. Such license shall be offered as soon as is reasonably practicable
upon commercial availability of such New Products. At Licensors request,
Licensee shall maintain, and furnish to Licensors copies of, records reasonably
demonstrating the time necessary to develop any New Product which Licensors
propose to license hereunder.
A "New Product" shall include (i) all new software applications
developed by IHS which are not derived from Licensed Technology, (ii) all major
architectural changes to the Licensed Technology, including without limitation
changes in the application operating system or development environment, provided
that such changes require at least one person year of technical effort to
effect, and (iii) after the second anniversary of the Effective Date, all
changes to any module or application included in the Licensed Technology that
require at least one person year of technical effort to effect per module or
application.
d. No Transfer of Title. The rights and licenses herein
granted by Licensee to Licensors do not transfer to the Licensors any title in
and to such portions of Licensee Derivative Works as are prepared by or on
behalf of Licensee, including, without limitation, title to any and all
applicable patents, copyrights, trademarks and trade secrets, and all right,
title and interest therein, except for such licenses as are granted pursuant to
this Agreement, are retained by Licensee or third parties that have provided
portions of Licensee Derivative Works to Licensee, as the case may be.
5. Royalty Provisions.
a. Royalty Amount. IHS will pay to Partners a royalty equal to
[*] of the accrued gross revenues of IHS (and any Affiliate of IHS), calculated
in accordance with GAAP, from sales, leases and licenses of Licensed Technology,
and any and all Licensee Derivative Works, or any products that include or are
in whole or part based thereon, and from any support, maintenance, installation,
consulting or other service revenues related to such sales, leases or licenses,
except installation revenues from the first two IHS installations (collectively,
"Royalty Revenues"). Any such support, maintenance, installation, consulting, or
other services shall be provided by Licensee at its sole discretion.
b. Quarterly Calculations. IHS shall, within forty-five (45)
days after the end of each calendar quarter beginning with the first quarter in
which IHS has Royalty Revenues,
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
compute royalties due to Partners for the calendar quarter most recently ended
and shall furnish to Partners a royalty statement based on Licensee's Royalty
Revenues for such quarter and shall pay to Partners with that statement all
royalties due after adjustment for sales commissions to third parties, sales
allowances, bad debts, rebates and returns.
c. Independent Examination. Partners may, at Partners' own
cost and expense not more than once in any calendar year, cause an independent
certified public accountant acceptable to Partners and Licensee to examine
Licensee's books and records for the purpose of verifying the accuracy of
statements sent to Partners pursuant to this Section 5. Such examination shall
be made on at least ten (10) business days notice and during Licensee's usual
business hours at the place Licensee keeps the books and records to be examined.
d. Adjustments Based on Examination. If, as a consequence of
an examination, any payments are due to Partners, such payments shall be
credited to the Partners' royalty account and promptly paid to Partners. In the
event such examination reveals an overpayment to Partners, the amount of such
overpayment will be a credit against any royalties thereafter due to Partners or
will be, at Licensee's request, promptly refunded to Licensee. If the
examination contemplated by this Section 5 shall reveal an underpayment of more
than [*] of royalties due to Partners for the period under audit, then, in
addition to any additional royalties that are due to Partners, Licensee shall
reimburse Partners for its reasonable audit expenses, unless the underpayment
does not exceed an amount equal to $[*].
e. Termination of Royalty Obligations. IHS' obligations to pay
royalties hereunder shall terminate upon the earliest to occur of the following
events:
(i) IHS completes an initial public offering of its
Common Stock at a per share price of at least $10.00 per share
(such per share purchase price, the "Minimum Share Value");
(ii) IHS Common Stock is publicly traded either on a
national exchange, on NASDAQ or in the over-the-counter
markets, and the average trading price of the Common Stock for
any thirty (30) consecutive day period is at least the Minimum
Share Value;
(iii) IHS completes a private financing, or otherwise
obtain for Licensor a bona fide third party offer, in which
Partners is given the opportunity to sell all of its Common
Stock at the Minimum Share Value; or
(iv) IHS has completed an initial public offering
that does not meet the requirements of the foregoing clause
(i) and IHS has met all the Royalty Milestones;
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provided, however, any such termination shall not relieve IHS of its obligation
to pay accrued and unpaid royalties as of the date of such termination.
f. Reduction of Royalty Payments. Any and all royalty payments
due hereunder shall be reduced by the amount of fees (but not cost
reimbursement) paid by IHS under the Technical Services Agreement Such reduction
shall be applied to the next royalties, if any, due hereunder.
6. Stock Issuance. In consideration for Licensors entering into, and as
a condition to the execution and delivery of, this Agreement and the Technical
Services Agreement, (i) IHS shall simultaneously with the execution hereof issue
to Partners 988,291 shares of Common Stock, which issuance shall be indefeasible
except as otherwise explicitly set forth in this Agreement, (ii) IHS and Xxxxxx,
among others, are entering into the Stockholders Agreement and the Registration
Rights Agreement, (iii) IHS and Xxxxxx are entering into the Employment
Agreement, and (iii) IHS is entering into the Partners' Affiliates Assistance
Agreement.
7. Termination Provisions.
a. Without limiting any and all other rights and remedies
Licensors may have at law or equity on account of a breach, Licensors may
terminate this Agreement if:
(i) Xxxxxx voluntarily leaves the employment of IHS
(as opposed to termination by reason of death, disability, or
cause) during the initial three (3) year term of the
Employment Agreement; or
(ii) IHS breaches any material term of this Agreement
or the Technical Services Agreement and such breach is not
cured within forty-five (45) days after Partners give IHS
written notice of such breach.
b. Without limiting any and all other rights and remedies IHS
may have at law or equity on account of a breach, IHS may terminate this
Agreement if a Licensor breaches any material term of this Agreement or the
Technical Services Agreement, and such breach is not cured within forty-five
(45) days after IHS gives such Licensor written notice of such breach.
c. IHS may, as its exclusive right and remedy, terminate this
Agreement if portability of the Licensed Technology is not demonstrated by
December 31, 1997 and IHS gives Partners written notice of termination by March
30, 1998. Portability shall be demonstrated if any of the asterisked items on
Exhibit A attached hereto and all the Required Future IS Technology are
installed and operational in any additional site or sites other than the
Xxxxxxx. IHS shall use diligent efforts to achieve such installations by such
date. Licensors shall have no obligation or liability of any kind to IHS on
account of any failure to demonstrate portability.
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d. Certain Rights Upon Termination:
(i) Sections 1, 2.E., 4.D., 5, 7, 8, 10, 12, 13 and
15 through 30 shall survive any termination of this Agreement
pursuant to Sections 7.A, 7.B or 7.C. Except as provided for
otherwise in this Section 7.D., upon termination of this
Agreement all copies of Source Code to software furnished or
licensed hereunder and provided by the other party shall be
returned to the providing party or destroyed, and all Object
Code to such software shall be similarly returned or
destroyed.
(ii) if this Agreement is terminated by Licensors
pursuant to Section 7.A. hereof, Sections 2.A.-B., 2.G.,
4.A.-B., 9, 11 and 14 shall also survive termination of this
Agreement, provided, however that (A) the License shall become
non-exclusive, in which event Licensors shall have completely
unrestricted rights to the Licensed Technology for all
purposes (including without limitation the right to use any
and all means to exploit and commercialize the Licensed
Technology) subject only to Section 19 hereof and Licensee's
non-exclusive rights hereunder, (B) Licensed Technology shall
only be deemed to include the Licensed Technology as it exists
on the date of termination, and shall not include any further
Future IS Technology, and (C) Licensee Derivative Works shall
only be deemed to include Licensee Derivative Works as they
exist on the date of termination (not including any future
modifications, enhancements, or new versions thereof).
(iii) If this Agreement is terminated by IHS pursuant
to Section 7.B. hereof; Sections 2.A.-B., 2.G., 4.A.-B., 9, 11
and 14 shall also survive termination of this Agreement,
provided, however that (A) the License shall become
non-exclusive, in which event Licensors shall have completely
unrestricted rights to the Licensed Technology for all
purposes (including without limitation the right to use any
and all means to exploit and commercialize the Licensed
Technology) subject only to Section 19 hereof and Licensee's
non-exclusive rights hereunder, (B) Licensed Technology shall
only be deemed to include the Licensed Technology as it exists
on the date of termination and shall not include any further
Future IS Technology, and (C) Licensee Derivative Works shall
only be deemed to include Licensee Derivative Works as they
exist on the date of termination (not including any future
modifications, enhancements, or new versions thereof).
(iv) If this Agreement is terminated by IHS pursuant
to Section 7.C. hereof, IHS shall have the right to require
Partners, within thirty (30) days after such termination, to
contribute to IHS all of the Common Stock of IHS issued to
Partners pursuant to Section 6 of this Agreement Section 4.B.
shall also survive such termination of this Agreement pursuant
to Section 7.C, provided, however, that Licensee
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Derivative Works shall only be deemed to include Licensee
Derivative Works as they exist on the date of termination (not
including any future modifications, enhancements, or new
versions thereof). In addition, any third party licenses to
use Object Code to the Licensed Technology granted by Licensee
prior to the date of termination to any third party shall
survive termination of this Agreement pursuant to Section 7.C,
and IHS shall have the right to support and maintain such
Object Code and shall continue to have a license to Source
Code delivered prior to such date only for the limited purpose
of such support and maintenance.
8. Non-Solicitation. For a period of three years after the Effective
Date, neither Licensors nor IHS will solicit or hire any employee of the other,
or of an Affiliate of the other, that is engaged in the development, operation,
marketing or sale of hospital or clinical information services, or integrated
health networks, without the prior written consent of the other. Licensors agree
that they will not sell, license, or market any software product or services
competitive with any product incorporating Licensed Technology or the services
provided by IHS relating to such product; provided, that this shall not be
deemed to restrict Licensors rights provided in Section 2.B.(iii) and Section
4.B hereof.
9. Use of Partners' Name. IHS will have the right to use the Partners
and its Affiliates names in reference materials and/or announcements regarding
the products and services to be offered by IHS. Any such use in written or
printed materials will be subject to the approval of a designated Partners
representative (which approval shall not be unreasonably withheld) in order,
among other reasons, to be consistent with and not impair Partners' or Brigham's
reputation or non-profit status.
10. Rights to Technology.
a. Third Party Software. Attached as Exhibit D to this
Agreement is a list of all contracts pursuant to which software material to and
included in the IS Technology has been developed for or licensed to the
Licensors by third parties other than employees ("Third Party Software
Agreements"). True and correct copies of such Third Party Software Agreements
have been delivered to IHS. To the best knowledge of Licensors (as defined
below) Licensors (i) continue to have the right to use the software covered by
such Third Party Software Agreements and (ii) except for Excluded Software, are
not restricted in their ability to license the software included therein to IHS
pursuant to the terms of this Agreement.
b. Ownership of Software. To the best knowledge of Licensors,
substantially all software included in the operations of the IS Technology,
other than the software furnished pursuant to the Third Party Software
Agreements, has been developed by employees of Licensors within the scope of
their employment, are owned by Licensors as a "work-for-hire" under applicable
provisions of US copyright law, and do not infringe any US patent, copyright,
trade secret or other U.S. proprietary right of any third party.
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c. No Liens and Encumbrances. Licensors have not granted to
any third party any liens and encumbrances in and to the Licensed Technology
which would deprive Licensee of its rights hereunder, and have not granted to
any third party any licenses in and to the Licensed Technology which would
conflict with the terms and conditions of this Agreement.
d. Due Authorization. Each of the Licensors, jointly and
severally, on the one hand, and Licensee, on the other hand, represents,
warrants, and covenants to and with the other that it is duly authorized to
enter into and be bound by this Agreement, and is not and will not become a
party to or be bound by any other agreement, contract, commitment, or subject to
any charter, bylaw or other corporate restriction that prohibits or otherwise
restricts its ability to fulfill its obligations hereunder.
e. Best Knowledge Definition. "Best knowledge" as used in this
Section 10 shall mean the knowledge of Partners and Xxxxxxx based only on their
consultation with staff members now on staff and involved with the development
of the IS Technology or the performance of the Licensors' obligations under
Third Party Software Agreements, as the case may be.
11. Prosecution and Maintenance of Patent Rights; Copyright
Registration.
a. Patent Prosecution by Licensors. Licensors shall have the
right, but not the obligation, either on their own initiative or at the request
of IHS, to apply for US or foreign patent protection for any part of the
Licensed Technology as Licensors so choose. In the event Licensors so decide to
seek patent protection for any such part of the Licensed Technology in any
jurisdiction, Licensors shall be responsible for the preparation, filing,
prosecution and maintenance of all patent applications related to such part of
the Licensed Technology in such jurisdiction. IHS shall, at Licensors' expense,
take all action as may be reasonably necessary or appropriate and as may be
reasonably requested by Licensors in order to assist Licensors in such
activities, provided, however, that if and to the extent any of such activities
are undertaken at the request of IHS, IHS shall bear its own costs and expenses
and shall reimburse Licensors for all of their reasonable costs and expenses,
including without limitation reasonable attorneys' fees and filing fees,
incurred in connection with such activities.
b. Patent Prosecution by IHS. In the event that,
(i) Licensors decline to prepare, file, prosecute
or maintain a patent application in any jurisdiction as
requested by IHS, or
(ii) Licensors fail to take any action to diligently
prepare, file, prosecute or maintain any patent application,
and such failure (x) could be reasonably anticipated to
jeopardize or prejudice the rights or interests of, or
otherwise be injurious to, Licensors or IHS, and (y) has not
been cured or remedied within forty-five (45) days after IHS
has given Licensors notice of such failure,
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IHS may, and is hereby granted the power-of-attorney to, take in the name of
either of the Licensors, and at IHS' costs and expense, any and all such actions
as IHS may deem necessary or appropriate to take any such actions not taken by
Licensors.
c. Information Sharing and Cooperation. Both parties shall
keep the other informed as to the status of any patent application that it is
pursuing, shall provide the other with copies of all written communications
pertaining to the filing, prosecution or maintenance of each patent application,
and shall give the other reasonable opportunity to comment on, and have reviewed
by the other's own counsel and at the other's own expense, any patent
applications or other filings made in connection with an application or granted
patent.
d. Copyright Registration. At IHS' election and direction,
Licensors shall take all actions reasonably requested by IHS in order to
register the copyrights to any copyrightable works included in the Licensed
Technology in any jurisdiction reasonably requested by IHS. Any such
registration shall be at IHS' expense. In the event Licensors fail to take any
action as may be reasonably requested by IHS, IHS may, and is hereby granted the
power-of-attorney to, take in the name of the Licensors such actions as
Licensors have failed to take.
12. Licensee Indemnification.
a. Licensee Indemnification. Licensee shall indemnify, defend
and hold harmless each of the Licensors, their Affiliates and their respective
trustees, officers, medical and professional staff; employees, and agents and
their respective successors, heirs and assigns (the "Indemnitees"), against any
liability, damage, loss or expense (including reasonable attorneys' fees and
expenses of litigation) incurred by or imposed upon the Indemnitees, or any one
of them, in connection with any claim, suit, action or demand made or brought by
any third party (including, but not limited to, those based on any theory of
product liability whether brought in the form of tort, warranty, or strict
liability) to the extent it arises out of or in connection with (i) any use,
sale, license, transfer, assignment or other disposition by Licensee (including
without limitation any license granted to Licensors and their Affiliates
pursuant to Section 4), or by any party acting on behalf of or under
authorization from Licensee, of Licensed Technology or Licensee Derivative
Works, or (ii) consulting, support, maintenance or other services provided by
Licensee in connection with or related to the Licensed Technology or Licensee
Derivative Works; provided further that for a period of twenty-four (24) months
from the date IHS first reaches agreement for the use by a third party, or for
the sale, license, transfer, or other disposition of any Licensed Technology or
Licensee Derivative Works (the "Defect Period"), Licensee shall have no
indemnification obligation under this Section 12.A. with respect to any Hidden
Xxxxxxx Defect, as defined in Section 12.B. below. Without limitation, the
foregoing indemnification obligations shall apply to any patent, trade secret,
copyright or other proprietary right infringement claim, suit, action or demand,
except to the extent based upon (i) any unmodified portion of the Licensed
Technology itself, (ii) the combined use of Licensed Technology or Licensee
Derivative Works with any other software, apparatus or technology not provided
by or on behalf of Licensee, (iii) modifications to Licensed Technology or
Licensee
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Derivative Works not made by or on behalf of Licensee, or (iv) use of the
Licensed Technology or Licensee Derivative Works not in accordance with the
intended use specified by Licensee.
b. Limitation of Indemnification. Licensee's indemnification
obligations under Section 12.A above shall not apply to any liability, damage,
loss or expense to the extent it is attributable to (i) the negligent
activities, reckless misconduct or intentional misconduct of the Indemnitees, or
(ii) the breach by Licensors of any of their representations, warranties or
obligations hereunder. For the duration of the Defect Period, "negligent
activities" shall be deemed to include any failure of Licensors to correct or
have corrected any defect or flaw in Licensed Technology, other than programming
defects or flaws or other defects or flaws caused by Licensee in Developed
Technology, developed by or on behalf of and owned by Licensors and delivered to
Licensee, if such defect or flaw (i) has not been detected or is not capable of
being detected by Licensee after a commercially reasonable review and analysis
of the Licensed Technology, (ii) exists in the Licensed Technology as used at
the Xxxxxxx and could cause at the Xxxxxxx the same or similar type of damage or
injury for which a third party is making or bringing a claim, suit, action or
demand against Licensors, and (iii) does not exist, or gives rise to a failure
or other problem for which a third party is bringing or may bring a claim, suit,
action or demand, because of (A) Licensee's modification or a third party's
modification (other than modifications by or on behalf of and owned by
Licensors) of the Licensed Technology, (B) use of the Licensed Technology in
combination with any other technology or software not provided by Licensors as
part of the Licensed Technology or (C) for a purpose different than the intended
purpose for which such Licensed Technology is developed or used at the Xxxxxxx
(any such defect or flaw, a "Hidden Xxxxxxx Defect").
c. Attorneys; Control of Defense. Licensee may control the
defense of any claims, suits, actions or demands brought or filed against any
Indemnitee with respect to the subject of indemnity contained in this Section 12
provided that it uses counsel reasonably acceptable to Licensors. Licensee shall
pay all costs of defense in connection with any and all such claims, suits,
actions or demands, whether or not rightfully brought Licensors (or another
Indemnitee) shall provide Licensee with prompt written notification of any
claim, suit, action or demand for which indemnification is sought hereunder, and
may also participate with counsel of their own choosing and at their own cost
and expense to assist in the defense of any such claim, suit, action or demand.
Licensee may not agree to a consent judgment or other voluntary final
disposition of any such claim, suit, action or demand without the consent of
Licensors, which shall not be unreasonably withheld.
13. Insurance.
a. Commercial General Liability Insurance. Beginning at the
time as any product, process or service that includes or is based in whole or
part upon the Licensed Technology, including without limitation any Licensee
Derivative Works, is being commercially used (for or by a customer other than
Partners or any of its Affiliates), sold, licensed, transferred, assigned or
otherwise disposed of by Licensee or by a sublicensee, Affiliate or agent of
Licensee, Licensee shall, at its sole cost and expense, procure commercial
general liability insurance in
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amounts not less than $2,000,000 per incident and $2,000,000 annual aggregate
and naming the Indemnitees as additional insureds, and continue to maintain such
insurance as long as commercially available at market rates. Such commercial
general liability insurance shall provide (i) product liability coverage and
(ii) contractual liability coverage for Licensee's indemnification obligations
under Section 12 of this Agreement. If Licensee elects to self-insure all or
part of the limits described above (including deductibles or retentions which
are in excess of $250,000 annual aggregate) such self-insurance program must be
acceptable to Partners and the Risk Management Foundation of the Harvard Medical
Institutions, Inc. The minimum amount of insurance coverage required under this
Section 13 shall not be construed to create a limit of Licensee's liability with
respect to its indemnification under Section 12 of this Agreement.
b. Evidence of Insurance. Licensee shall provide Partners with
written evidence of such insurance upon request of Partners. Licensee shall
provide Partners with written notice at east fifteen (15) days prior to the
cancellation, non-renewal or material change in such insurance; if replacement
insurance is commercially available at market rates providing comparable
coverage and Licensee does not obtain such issuance within forty-five (45) days
after Licensee has knowledge of such cancellation, non-renewal or material
change, but no later than thirty (30) days after the effective date of such
cancellation, non-renewal or material change, Partners shall have the right to
terminate this Agreement effective at the end of such period without notice of
any additional waiting periods.
c. Duration of Insurance. Licensee shall maintain such
commercial general liability insurance during (i) the period any such product,
process or service that includes or is based in whole or in part upon the
Licensed Technology, including without limitation any Licensee Derivative Works,
is being commercially used (for or by a customer of IHS other than Partners or
any of its Affiliates), sold, licensed, transferred, assigned or otherwise
disposed of by Licensee or by a sublicensee, Affiliate or agent of Licensee and
(ii) a reasonable period after the period referred to in C.(i) above which in no
event shall be less than fifteen (15) years.
14. Enforcement of Proprietary Rights.
a. Notification. Licensors and Licensee shall each give prompt
written notice to the other of any actual or suspected unauthorized use or
disclosure of the Licensed Technology by a third party, or any other action
which either party believes may infringe any copyright, patent, trade secret or
other proprietary right of Licensors or IHS in and to the Licensed Technology,
and shall provide each other with information available to it concerning such
unauthorized use or disclosure or infringement and cooperate fully in the
investigation of such activity.
b. Licensee Actions. Licensee shall have the right, but shall
not be obligated, to prosecute at its own expense any such unauthorized use or
disclosure or infringement, and, in furtherance of such rights, Licensors hereby
agree that Licensee may use Licensors names for such purposes or join Licensors
as party plaintiff in any such suit,' without expense to Licensors. The full
cost of any such prosecution commenced by Licensee shall be borne by Licensee
and
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Licensee shall indemnify Licensors against any order for payment that may be
made against Licensors in such proceedings. No settlement, compromise, consent
judgment or other voluntary final disposition of any action may be entered into
without the consent of Licensors, which shall not unreasonably be withheld Any
recovery of damages for past infringement derived from such action shall be used
to reimburse first Licensee and then Licensors for all expenses and legal fees
connected with such action. Any recovery of damages then remaining shall belong
to Licensee.
c. Licensors Actions. If within ninety (90) days after having
been notified of any alleged unauthorized use, disclosure or infringement of
Licensed Technology, Licensee shall not have brought an infringement action, or
at any time thereafter Licensee shall not be diligently prosecuting such
infringement action, or if Licensee at any time shall notify Licensors of its
intention not to bring suit or continue prosecuting an action against any
alleged infringer, then in those events Licensors shall have the right to
initiate or pursue such actions at Licensors' expense and to use Licensee's name
for such purposes or join Licensee as a party plaintiff in any such suit,
without expense to Licensee. No settlement, compromise, consent to judgment or
other voluntary final disposition of the suit may be entered without the consent
of Licensee, which consent shall not be unreasonably withheld Licensors shall
indemnify Licensee against any order for payment that may be made against
Licensee in such proceeding. Any recovery of damages for past infringement
derived from such action shall first be used to reimburse first Licensors and
then Licensee for all expenses and legal fees connected with such action. Any
recovery of damages then remaining shall belong to Licensors.
d. Rights Dependent upon Exclusive Licenses. Licensee's right
to initiate action in the first instance under Section 14.B. hereof shall remain
in effect for as long as Licensee retains its exclusive License hereunder. In
the event Licensee's License becomes non-exclusive under this Agreement,
Licensee's right to initiate actions in the first instance for infringements
shall cease; provided, however, that if within six (6) months after having been
notified of any alleged unauthorized use, disclosure, or infringement of
Licensed Technology, Licensors shall not have brought an infringement action, or
at any time thereafter shall not be diligently prosecuting such infringement
action, or if Licensors at any time shall notify Licensee of its intention not
to bring suit or continue prosecuting an action against any alleged infringer,
then in those events Licensee shall have the right to initiate and pursue such
action at Licensee's expense and to use Licensors' name for such purposes or
join Licensors as party plaintiffs in any such suit, without expense to
Licensors. The full cost of any such prosecution commenced by Licensee shall be
borne by Licensee and License shall indemnify Licensors against any order for
payment that may be made against Licensors in such proceeding. No settlement,
consent judgment or other voluntary final disposition of any action may be
entered into without the consent of Licensors, which shall not be unreasonably
withheld. Any recovery of damages for past infringement derived from such action
shall be used to reimburse first Licensee and then Licensors for all expenses
and legal fees connected with such action. Any recovery of damages then
remaining shall belong to Licensee.
e. Separate Counsel. In the event that either party shall
undertake the enforcement of Licensed Technology by litigation, the other party
may retain counsel at its
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expense (but subject to reimbursement out of recovery of damages pursuant to
Section 14.B, 14.C, or 14.D as the case may be) to represent it in such suit.
15. Disclaimer of Warranties. LICENSORS MAKE NO REPRESENTATIONS AND
WARRANTIES REGARDING THE LICENSED TECHNOLOGY OTHER THAN AS EXPLICITLY SET FORTH
IN THIS AGREEMENT, AND DISCLAIM ALL IMPLIED WARRANTIES OF ANY KIND WITH REGARD
TO THE LICENSED TECHNOLOGY INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
LICENSEE MAKES NO REPRESENTATIONS AND WARRANTIES REGARDING LICENSEE
DERIVATIVE WORKS OTHER THAN AS EXPLICITLY SET FORTH IN THIS AGREEMENT, AND
DISCLAIMS ALL IMPLIED WARRANTIES OF ANY KIND WITH REGARD TO LICENSEE DERIVATIVE
WORKS INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
16. Infringement by Licensee of Third Party Technology.
a. Defense Obligation. In the event a claim, action, suit or
demand is brought or made against Licensee that use of the Licensed Technology
infringes any US patent right, copyright, trade secret or other US proprietary
right of such third party, Licensors shall, if so requested in writing by
Licensee, both assume the costs of defense of such claim, action, suit or demand
and control the conduct of such defense using counsel of their choosing,
provided that Licensee gives Licensors prompt notice of the bringing or making
of any such claim, action, suit or demand, and provides such reasonable;
instance as Licensors may request in the conduct of such, defense. License may
at its own cost and expense assist in such defense using counsel of its own
choosing, and may at any time assume full control of the conduct of its own
defense after which time it shall assume all costs and expenses and pay all
Damages (as defined below) and amounts payable pursuant to any settlement,
compromise, consent to judgment or voluntary disposition incurred in connection
therewith notwithstanding anything in this Section 16 to the contrary. If
Licensee elects at any time to defend itself in or against such claim, action,
suit or demand, Licensors may at their own expense assist in such defense using
counsel of their own choosing.
b. Liability for Damages, Etc. Licensors shall pay any and all
damages, penalties, fines, charges, opposing counsel fees, royalties or other
payments ("Damages") which Licensee may be required to pay by a court of law in
the event Licensors do not succeed in the defense of any such infringement
claim, action, suit or demand (i) if Licensors have at the time of execution of
this Agreement violated their representations set forth in Section 10 with
respect to such claim, action, suit or demand, or (ii) if such infringement
claim, action, suit or demand is brought or made by any employee of Licensors as
of the Effective Date or retained thereafter or by any of the Covered
Infringement Persons.
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Licensors shall pay twenty percent (20%) of Damages, and Licensee shall
pay the balance of eighty percent (80%) of Damages, which Licensee may be
required to pay by a court of law in the event Licensors do not succeed in the
defense of any infringement claim, action, suit or demand which it controls that
is brought or made by any former employee of Licensors no longer employed or
retained on the Effective Date or any former or current consultant to Licensors
(other than the Covered Infringement Persons), including without limitation by
any party to the Third Party Software Agreements.
Licensors shall have no liability for Damages in any other infringerent
claim, action, suit or demand.
c. Settlement or Compromise. Licensors sail not agree to
settle, compromise, consent to judgment or otherwise voluntarily dispose of any
such claim, action, suit or demand for which Licensors are controlling the
defense without Licensee's consent which shall not be unreasonably withheld,
except if Licensors elect to pay the entire amount of any such settlement,
compromise, consent or voluntary disposition not consented to by Licensee;
provided, however, in any such claim, action, suit or proceeding for which
Licensors have no liability for Damages as provided in Section 16.B. above,
Licensee may withhold its consent for any reason. Amounts payable by Licensors
in any such settlement, compromise, consent to judgment or other voluntary
disposition of a claim, action, suit or demand shall be payable in the same
proportions as Damages would be payable by Licensors pursuant to the foregoing
Section 16.B with respect to such claim, action, suit or demand, except if
pursuant to the first sentence of this Section 16.C Licensors' elect to pay the
entire amount of any settlement, compromise, consent or voluntary disposition
which it would not otherwise be required to pay hereunder.
d. Exclusion From Liability. Notwithstanding anything herein
to the contrary, Licensors obligation to pay costs of defense, Damages or
amounts payable upon settlement, compromise, consent to judgment or other
voluntary disposition shall not apply to any claim, action, suit or demand to
the extent based upon (i) the combined use of Licensed Technology with any
software, apparatus or other technology not provided by or on behalf of
Licensors, (ii) modifications to the Licensed Technology (other than
modifications made by or on behalf of Licensors), (iii) use of the Licensed
Technology not in accordance with its intended use specified by Licensors, or
(iv) any unmodified portion of the Developed Technology itself.
17. Certain Obligations of Licensors Related to Infringement.
Notwithstanding anything to the contrary in Section 16 hereof, Licensors shall
be liable for the costs and expenses of making non-infringing any Licensed
Technology that has been developed by them or their employees (as opposed to
developed by a third party even if the rights therein have been assigned to
either of the Licensors) and is held to infringe any US patent right, copyright,
trade secret or other US proprietary right of any third party, if such
non-infringement can after reasonable commercial efforts be accomplished by
Licensors by working-around or otherwise redoing that part of the Licensed
Technology which is infringing; provided, however, the foregoing shall impose no
obligation upon the Licensors to pay any license, royalty or other fees to any
third parties in order to obtain rights to any infringed rights or technology
except as otherwise
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provided in Section 16. Licensee shall give Licensors prompt notice of any
claim, action, suit or demand against Licensee that asserts that any Licensed
Technology infringes any US patent right, copyright, trade secret or other US
proprietary right of any third party.
In the event any infringement claim, action, suit or demand made or
brought against Licensee is based upon Licensed Technology that has been
licensed to Licensors pursuant to any of the Third Party Software Agreements,
Licensors shall permit and grant appropriate authority to Licensee to assert on
behalf of and in the name of Licensors any and all claims and actions, including
rights of indemnification or other claims, that Licensors may have against the
third party software provider or developer on account of such infringement by
Licensee, but only to the extent Licensee has not been indemnified by Licensors
with respect to such infringement claim, action, suit or demand; provided, that
the foregoing shall not derogate from Licensors own right to bring any such
claim or action in the event of any actual or threatened infringement claim
against Licensors.
18. Limitation of Liability. WITHOUT LIMITING THE OBLIGATIONS OF THE
PARTIES OTHERWISE SET FORTH IN SECTIONS 12, 16 AND 17 HEREOF, NEITHER PARTY
HEREUNDER SHALL BE LIABLE TO THE OTHER OR ANY THIRD PARTY FOR ANY SPECIAL,
INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE
FOREGOING LIMITATIONS OF LIABILITY SHALL APPLY REGARDLESS OF THE SUCCESS OR
EFFECTIVENESS OF OTHER REMEDIES AND REGARDLESS OF THE CAUSE OF ACTION UNDER
WHICH SUCH DAMAGES ARE SOUGHT.
19. Confidentiality Obligations. Each of the Licensors and Licensee
(the "Restricted Party") agrees that it shall hold in confidence and not
disclose to any third party any and all Proprietary Information of the other
(the "Disclosing Party",), except as authorized by this Agreement. Without
limiting the foregoing, the Restricted Party shall take at least the same
physical, contractual and other security measures to protect such Proprietary
Information as it does with respect to its own confidential technical
information. These obligations shall not apply to any information generally
available to the public, independently developed by the Restricted Party without
reliance on the Disclosing Party's information, disclosed by a third party not
under or in breach of an obligation of confidentiality to the Disclosing Party,
or approved in writing for release by the Disclosing Party without restriction.
Notwithstanding the foregoing, Licensee may disclose the Source Code to the
Licensed Technology to any party to whom it is sublicensing the Licensed
Technology, provided that it obtains the prior written agreement of such party
to maintain the Source Code in confidence and to observe at least the same
confidentiality obligations as apply to a Restricted Party hereunder. Licensee
may also disclose Proprietary Information to financial institutions and
regulatory officials to the extent required in connection with a public offering
or other securities offering or as otherwise required by law, provided that such
financial institutions shall agree to maintain the Proprietary Information in
confidence and observe at least the same confidentiality obligations as apply to
a Restricted Party hereunder, and
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that disclosures to regulatory officials shall be made in a manner designed to
maintain confidentiality to the extent possible under applicable regulatory
policies.
20. Taxes. Licensee shall be responsible for all sales or use taxes and
state or local property or excise taxes associated with the licensing,
possession, or use of the Licensed Technology.
21. Late Charges. If any fee or cost is not paid within thirty (30)
days after it is due, Licensors may, at their option, charge interest at a rate
of one and one-half percent (1 1/2%) per month (eighteen percent (18%) per
annum) or, if less, the highest rate allowed by applicable law) from the date
such fee or charge first became due.
22. Notices. All notices or other communications required to be given
hereunder shall be in writing and delivered either personally, including by
expedited courier service, or by US mail, certified, return receipt requested,
postage prepaid, and addressed as follows:
If to Licensors, to:
Partners HealthCare System
Prudential Tower, Suite 1150
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Office of General Counsel
and Chief Information Officer of Partners
With a copy to:
Xxxxxx X. Xxxxx, Esq.
Goulston & Storrs
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
If to Licensee, to:
Integrated Healthcare Solutions, Inc.
000 X. Xxxxx Xxxx.
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, President
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With a copy to:
Xxxxxxxx Xxxxxxxxxx, Esq.
Xxxxx, Xxxxxxx & Xxxxxxxxx
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
or as otherwise requested by the receiving party. Notices delivered personally
shall be effective upon delivery and notices delivered by mail shall be
effective upon their receipt by the party to whom they are addressed.
23. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the Commonwealth of Massachusetts,
without regard to conflicts of laws principles.
24. Headings. All captions and headings included in this Agreement are
for convenience only and shall not alter or bear upon the meaning of any
provision contained herein.
25. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
26. Relationship of the Parties. Nothing herein shall be deemed to
constitute either party hereto as the agent or representative of the other
party, or both parties as joint ventures or partners for any purpose.
27. Severability. In the event that one or more provisions of this
Agreement shall be invalid, illegal, or unenforceable in any respect under any
applicable statue or rule of law, then such provisions shall be considered
inoperable to the extent of such invalidity, illegality, or unenforceability,
and the remainder of this Agreement shall continue in full force and effect. The
parties hereto agree to replace any such invalid, illegal, or enforceable
provisions with a new provision which has the most nearly similar permissible
economic or other effect.
28. Entire Agreement. This Agreement, together with the Partners'
Affiliates Assistance Agreement, the Stockholders Agreement, the Registration
Rights Agreement, the Technical Services Agreement, and the Employment
Agreement, contain the full understanding of the parties and supersedes all
prior understandings with respect to the subject matter hereof.
29. Modifications and Waivers. This Agreement may not be modified
except by a writing signed by authorized representatives of the Licensors and
Licensee parties. A waiver by either party of its rights hereunder shall not be
binding unless contained in a writing signed by an authorized representative of
the party waiving its rights. The nonenforcement or waiver of any provision on
one (1) occasion shall not constitute a waiver of such provision on any other
occasions unless expressly so agreed in writing. It is agreed that no use of
trade or other regular
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practice or method of dealing between the parties hereto shall be used to
modify, interpret, supplement, or alter in any manner the terms of this
Agreement.
[INTENTIONALLY LEFT BLANK]
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30. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
constitute one and the same instrument.
Partners HealthCare System, Inc.
By: /s/ Xxx X. Xxxxxx
------------------------------------
Xxx X. Xxxxxx
Xxxxxxx and Women's Hospital, Inc.
By: /s/ Xxx X. Xxxxxx
------------------------------------
Xxx X. Xxxxxx
Integrated Healthcare Solutions, Inc.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
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EXHIBIT A
IS TECHNOLOGY
(ASTERISKED ITEMS ARE THOSE ITEMS REQUIRED TO DEMONSTRATE PORTABILITY
IN ACCORDANCE WITH SECTION 7.C. OF THE AGREEMENT)
IS Technology includes the following software modules and applications:
*Clinical Laboratories
Alpha-Fetoprotein
Blood Bank
Chemistry
Lab Control
Hematology
Microbiology
Virology
Patient Laboratories
Echocardiogram
Exercise
Non-invasive Vascular
Electroencephalogram
Evoked Potentials
Cardiac Cath
Electrocardiogram
Xxxxxx
Bone Marrow Aspirate
Pulmonary Function
Electromyogram
Bone Density
Dialysis
Rehabilitation Services
Pathology Laboratories
Cardiac Surgery
Cytology Laboratory
Autopsy
Surgical Pathology
Pathology
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*Results Retrieval
Clinical Information (Results Retrieval)
Mini-ambulatory medical record (Rheumatology, Prenatal,
Internal
Medicine and Medical Specialties)
Operative notes
Discharge summaries
NICU Log
Physician Signout
Coverage List
Handbook
*Provider Clinical Order Entry
Labor and Delivery Record
Event Processor/Rule Engine
Physician Administrative Systems
Professional Staff Director
Physician Continuing Medical Education
Credentialing
Referring Physician
Utilization Review/Quality Assurance
Utilization Review
Continuing Care
Quality Assurance
Infection Precautions
*Patient Accounting
Accounts Receivable
Credit and Collection
Special Accounts
Charge and Audit
Administrative Research
Research Administration
Research Data
Grants and Contracts
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*Registration/Scheduling/Administration
Emergency Services
Outpatient Registration and Scheduling
Recovery Room
Patient Information
Inpatient Admissions
Surgery Scheduling
Pre-admission Test Center
Labor, Birth and Recovery
Bed Control
Discharge Planning
Employee Health Services
HCHP
Executive Reporting System
Operating Room Scheduling
Medical Records
Medical Records Research
Record Request
Medical Records Warehouse
Material/Asset Management
Fixed Asset Management
Inventory
Purchase Orders
Casecart
Nursing
Mailroom/Telephone Directory
Dietary
Pharmacy
Inpatient
Outpatient
Surmed Interface
Brookside and Southern Jamaica Plain Health Centers
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Personnel/Human Resources
General Accounting
Accounts Payable
Cash
Budget
General Ledger
Payroll
Employee Reimbursement System
Utilities
Electronic Mail
Utilities(Calculator, Bulletin Boards, etc.)
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EXHIBITS B
EXCLUDED SOFTWARE
E-Systems - SolutionsServer(TM) (Beta)
IDX - Decrad and practice management applications
Intersystems - M operating system; programming language
McLatchey - API to Netware Library, and all software the ownership of which is
specifically assumed by McLatchey pursuant to Section 1 of the Professional
Services Agreement between Xxxx XxXxxxxxx Associates and Xxxxxxx &
Women's Hospital, Inc., dated September 1, 1992.
Medicus - ICD9 coding
Medicus - Patient Acuity
Merck CD ROM reference materials
Microsoft - Client operating system; PC applications
MUMPS Collaborative - Co-Writer & Co-Med Toolkit (AP Application); all software
remaining the property of MUMPS Collaborative pursuant to Section 3.8 of the
Collaborative Medical Systems Computer System Agreement between
MUMPS Collaborative, Inc. and Brigham Medical Center, Inc., dated
August 7, 1989.
Novell - Network operating system
Paperchase - Literature searching
PDR CD ROM reference materials
Polylogics Consulting - MIIS to MUMPS Compatibility Library; the "Polylogics Run
Time Library" specifically referenced as the property of Polylogics pursuant to
Section 10 of the Agreement between Polylogics Consulting, Inc. and Xxxxxxx &
Women's Hospital, dated August 3, 1992, and Section 3 of the Addendum thereto.
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SAIC - Hyper M screen development
Scientific American CD ROM reference materials
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EXHIBIT C
FUTURE IS TECHNOLOGY
DESCRIPTION OF FUNCTIONS
(REQUIRED FUTURE IS TECHNOLOGY IS DENOTED WITH AN ASTERISK)
Ambulatory Clinical Order Entry including links to retail pharmacies, reference
laboratories and free-standing diagnostic centers
Partners Workstation
Results review
In-box technology
History and Physical-Flowsheets
*Common Partners Ambulatory Record derived from BWH and MGH current records
Common Partners Inpatient Clinical System derived from BWH and MGH clinical
information systems
Clinical Referrals
*Partners Repository
Data structures/objects
Network connectivity
Access applications
Security structures
*Event engine
Synchronous improvements
Network version
Interventions
Continued inpatient additions
Integrated delivery system interventions
Workup assistance
*Protocol Support
World Wide Web Developments
Master Patient Index/Global Scheduling/Insurance EDI network connectivity
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EXHIBIT D
THIRD PARTY SOFTWARE AGREEMENTS
Xxxxxx, Xxxxxxx -
Professional Services Agreement dated November 1, 1991
Professional Services Agreement dated September 1, 1991
Centers for Clinical Computing ("CCC") -
Agreement for Services dated December 11, 1983 among the Xxxx Israel
Hospital
Association, Inc. ("BIH"), Xxxxxxx and Women's Hospital, Inc. ("BWH") and
Brigham and Xxxx Israel Medical Group Foundation, Inc. ("BBIMG")
Amendment dated October 1, 1984 to December 11, 1983 Agreement for
Services between BIH, BWH and BBIMG
Amendment to Agreement for Services (FY 1985) between BWH and the
Computer Medicine Laboratory ("CML") in the BBIMG
Agreement for Services dated May 19, 1986 with CCC
Outline for services and related changes (FY 1987) dated October 22, 1986
between BWH and CCC
Addendum dated October 1, 1987 (to Agreement dated May 19, 1986)
Data Innovations, Inc. -
Professional Services Agreement dated September 1, 1992
Professional Services Agreement dated June 23, 1992
Professional Services Agreement dated December 12, 1991
Xxxxx, Xxxxxxx - Professional Services Agreement dated November 1, 1989
Expertech - Professional Services Agreement dated November 15, 1995
Xxxxxxxx Group, The - Professional Services Agreement dated April 12, 1993
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Xxxxxxx, X. Xxxxxxx - Professional Services Agreement dated October 30, 1995
Xxx Xxxxxx Consulting - Professional Services Agreement dated July 27, 1989
XxXxxxxxx, Xxxx -
Professional Services Agreement dated September 1, 1992
Professional Services Agreement dated February 1, 1991
Professional Services Agreement dated October 17, 1990
Xxxxxx, Xxxxxxx - Professional Agreement dated February 17,1989
MUMPS Collaborative, Inc. -
Professional Services Agreement dated November 16, 1988
Xxxxxxxxxx, Xxxxxxx -
Professional Services Agreement dated March 2, 1992
Professional Services Agreement dated December 23, 1991
Xxxxxxx, Xxxxx - Professional Services Agreement dated November 6, 1995
Xxxxx, Xxxxxxxx X. and BioLogic Systems, Inc. -
Letter of Understanding with Xxxxx, and BioLogic Systems, Inc. dated
September 15, 1993
Professional Services Agreement with BioLogic Systems, Inc. dated
January 1, 1992
Letter Agreement with BioLogic dated April 20, 1991
Letter Agreement with Xx. Xxxxx dated March 15, 1989 and April 12, 1990
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Xxxx, Xxxxxxx X. -
Professional Services Agreement dated September 21, 1991
Professional Services Agreement dated August 1, 1991
Professional Services Agreement dated May 16, 1991
Professional Services Agreement dated February 25, 1991
Xxxxxx, Xxxxxxx - Professional Services Agreement dated February 27, 1989
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