EXHIBIT 10.2
LICENSE AND SOFTWARE DEVELOPMENT AGREEMENT
THIS LICENSE AND SOFTWARE DEVELOPMENT AGREEMENT (the "Agreement"), made
and entered into as of the 10th day of October, 1997, by and between
HEALTHWATCH, INC., a Minnesota Corporation (the "Company") and MERAD
CORPORATION, a Georgia corporation ("Licensor").
WITNESSETH:
WHEREAS, Licensor owns all right, title and interest in and to certain
computer architecture concepts, algorithms and processes for the building of
Computer Systems, which computer architecture, concepts, algorithms and
processes is presently known as MERAD ("MERAD");
WHEREAS, the Company wishes to retain Licensor for purposes of
utilizing MERAD to develop certain healthcare software for the Company, such
software to have the capabilities and specifications as more fully described on
Exhibit A attached hereto and incorporated herein by reference (the "Software");
NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein and of other good and valuable
consideration, the receipt, adequacy and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Development of Enhancements. Licensor hereby agrees to undertake the
development of the Software for the benefit of the Company. Licensor shall
immediately commence the development of the Software, and shall apply such
resources and efforts as is reasonably necessary to complete such task in
compliance with the terms and provisions and timetable included in the
deliverable schedule attached as Exhibit B and incorporated herein by reference
(the "Deliverable Schedule"). Any changes in the Software or the Deliverable
Schedule shall be agreed to in writing between the Company and Licensor in order
for such changes to become effective against either party.
2. Ownership of Software. In consideration of Company's retention of
Licensor hereunder, Licensor hereby assigns to the Company all rights, including
copyrights and patent rights, that may be created in the Software, or any
documentation or ancillary documents, data bases, and other forms of media
developed by Licensor with respect to the Software. Licensor understands and
acknowledges that the Software and all of such ancillary works and documentation
shall be deemed "works made for hire" as that term is defined by the applicable
laws of the United States regarding copyrights and patents. Licensor
acknowledges that the Company shall have complete, absolute and exclusive
ownership of the Software and the ancillary works and documentation, free and
clear of the rights of any third person or entity, except for the rights of
third xxxxx vendors whose software is properly embodied into the
Software and is subject to a transferable license from such third xxxxx vendors,
but only to the extent such third xxxxx vendor's software is contemplated by the
parties to be embodied into the Software. Licensor agrees to execute any
additional documentation as may be requested by the Company affirming that the
Software and the ancillary works and documentation is in fact works for hire and
belong exclusively to the Company limited only to the extent set forth above.
Licensor specifically agrees that it shall not at any time contest the Company's
proprietary rights in or title to the Software, works or documentation developed
for the Company hereunder.
3. Compensation. Commencing January 1, 1998, the Company shall pay
Licensor a development fee of $15,000.00 per month for 24 months to develop the
Software for the Company plus the following fee based on the gross proceeds
derived by the Company from the use of the Software: (i) 5% of the first
$5,000,000 of such revenues; (ii) 2.5% of any such revenues in excess of
$5,000,000 but less than $10,000,001; and 1% of any such revenues in excess of
$10,000,000 (the "Development Fee"). The Development Fee shall be payable
bi-weekly, or such other time frame that the parties may agree, but only to the
extent any work product of Licensor is deemed acceptable to the Company, and is
in substantial compliance with the specifications for the Software, as the same
may be amended (the "Specifications"). If the Specifications are amended, the
Development Fee shall be revised as may be mutually agreed upon between the
parties and documented in writing.
4. Use of Subcontractors. Licensor shall be entitled to use its
employees and third party subcontractors to work on the Software and related
works and documentation. All such employees and third pasties shall execute,
prior to providing any such services with respect to the development of the
Software and related works and documentation, an agreement in form reasonably
satisfactory to the Company which obligates such third parties to maintain in
confidence the confidential information of the Company that may be provided to
them or comes into their possession, and provides for an assignment to Licensor
of all rights of such third parties in the Software, works and documentation, so
that such rights may be transferred to the Company as required by Licensor in
this Agreement.
5. Use of Trademarks, Copyrighted Material and Patents. Licensor
acknowledges that the Software, including the Software Documentation (as
hereinafter defined), and the name HEALTHWATCH (hereinafter the "Xxxx"), may be
protected under the laws of the United States by one or more registered or
unregistered trademarks and/or copyrights in favor of the Company. Licensor
further acknowledges that the Software may be subject to one or more patent
applications filed by the Company with the United States Patent and Trademark
Office (the "Patents"). The Company agrees that Licensor shall have the right to
use the Xxxx, the Software and the Software Documentation in connection with the
performance of Licensor's duties hereunder for so long as this Agreement is in
force and effect. Licensor acknowledges that all rights in and to the Xxxx, the
Software, the Patents and the Software Documentation are and shall remain the
sole and exclusive property of the Company and that Licensor shall have no
ownership rights or other rights in the Xxxx, the Software, the Patents or the
Software Documentation other than the right to use the same on the conditions
stated in this Agreement. The Xxxx, or any xxxx confusingly similar to the same,
shall not be used by Licensor in conjunction with any other use or product,
other than as expressly permitted herein or with the
prior written consent of the Company. Licensor specifically agrees that it shall
not at any time, contest the Company's proprietary rights in or title to the
Xxxx, the Software, the Patents or the Software Documentation. For purposes of
this Agreement, "Software Documentation" shall refer to such materials, in
either written, audio, video or machine readable form, created by or for the
Company which are intended to describe the use or characteristics of the
Software.
6. Representations and Warranties of Licensor.
(a) Licensor represents and warrants that it has the power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder, and acknowledges that it has the sole and exclusive responsibility
for the supervision, management and control of the use of the Software by it,
its employees and subcontractors. Licensor further represents that the Software
will be an original work created for the Company and will perform in accordance
with the specifications therefore, and that no party other than the Company will
have any rights in the Software and related works and documentation, except for
the rights of third party vendors whose software is properly embodied into the
Software and is subject to a transferable license from such third party vendor,
but only to the extent such third party vendor's software is contemplated by the
parties to be embodied into the Software. OTHER THAN THESE EXPRESS WARRANTIES,
LICENSOR MAKES NO OTHER EXPRESS OR IMPLIED WARRANTIES OF ANY KIND WHATSOEVER TO
THE COMPANY, INCLUDING ANY AND ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR OR INTENDED PURPOSE. LICENSOR EXPRESSLY DISCLAIMS ANY WARRANTY THAT
THE SOFTWARE WILL MEET ANY PARTICULAR REQUIREMENT OR BUSINESS NEED OF THE
COMPANY OTHER THAN BEING IN SUBSTANTIAL COMPLIANCE WITH THE SPECIFICATIONS
THEREFOR.
(b) EXCEPT As EXPRESSLY STATED ABOVE, IN NO EVENT SHALL, LICENSOR BE
LIABLE TO THE COMPANY FOR ANY LOST PROFITS, LOST SAVINGS OR OTHER INCIDENTAL OR
CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, DAMAGES ARISING FROM OR AS
A RESULT OF THE USE OR THE INABILITY TO USE THE SOFTWARE FOR ANY REASON
WHATSOEVER, OR THE LOSS OF DATA OR OTHER PROPRIETARY INFORMATION OF THE COMPANY
OR DAMAGE TO ANY OF THE COMPANY'S SOFTWARE, HARDWARE OR ANY OTHER PERIPHERAL
COMPUTER EQUIPMENT.
7. Termination and Duties Upon Termination.
(a) Notwithstanding any provision in this Agreement to the contrary,
this Agreement may be terminated by the Company upon the breach of any provision
of this Agreement by Licensor, which breach continues after Licensor receives
written notice from the Company of such claim of breach and the failure and
refusal of Licensor to immediately correct or refrain from the activity
constituting the breach.
(b) In the event of termination of this Agreement for any reason,
Licensor agrees to immediately discontinue and refrain from any further use of
the Software, the Software Documentation or the Xxxx and shall immediately
deliver to the Company the original and any
copies of the Software and the Software Documentation that it may have in its
possession or under its control, or arrange for the delivery of any copies not
under its control within ten (10) days after the termination of the Agreement.
(c) Notwithstanding the termination of this Agreement, for any reason,
the restrictions provided for in Paragraph 8 below, governing confidentiality,
shall survive this Agreement and shall continue to be binding upon Licensor as
provided therein. Nothing herein shall be construed as limiting any remedy that
the Company may have against Licensor, at law or in equity, as a result of
Licensor's breach of any part of this Agreement.
8. Confidentiality. Licensor acknowledges that the Software and the
Software Documentation are proprietary and confidential to the Company and may
constitute trade secrets and know-how of the Company. Licensor further
acknowledges that it may receive confidential information relating to the
business and affairs of the Company that are not generally known to the public.
Licensor shall not use or disclose any information received from the Company
under this Agreement relating to the Company's business or products, or that it
learns from its use of the Software for any purpose other than the use intended
and authorized by this Agreement. Licensor agrees that such disclosure to or use
by any party other than employees or subcontractors of Licensor to whom
disclosure must be made in order for Licensor to perform its obligations
hereunder, or threatened disclosure or use, will be a material breach of this
Agreement and the Company shall be entitled to injunctive or other equitable
relief to prevent unauthorized use or disclosure. The foregoing restrictions on
disclosure of information shall apply so long as the information has not
properly come into the public domain through such disclosure by the Company or
otherwise. Licensor further agrees that Licensor shall not itself, or permit
others to copy, disclose, recreate or modify the Software without the prior
written permission of the Company.
9. Miscellaneous.
(a) Relationship of the Parties. At all times hereunder, with respect
to this Agreement, Licensor shall be considered an independent contractor and
the relationship of the Company to Licensor shall be that of vendor and vendee,
and shall not be construed to constitute the relationship between the Company
and Licensor as that of partners, joint venturers, principal and agent or
employer and employee.
(b) No Transfer or Assignment of License. This Agreement and the rights
and obligations granted and assumed herein may not be transferred or assigned by
either party by sale, merger, acquisition or otherwise, without the prior
written consent of the other party, which consent shall not be unreasonably
withheld.
(c) Binding Effect Subject to subparagraph (b) hereinabove, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns and legal representatives.
(d) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior negotiations,
representations or agreements, whether written or oral. Any modification of this
Agreement shall be in writing, executed with the same formality as this
Agreement and signed by a duly authorized representative of each of the parties
hereto.
(e) Severability. Should any part or provision of this Agreement be
held unenforceable or in conflict with the laws of any jurisdiction, then such
part or provision shall be completely severable from this Agreement and the
validity of the remaining parts or provisions shall not be affected by such
holding.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia, and the parties agree that the
appropriate courts in the State of Georgia shall be the proper venue for the
resolution of any disputes arising hereunder.
(g) Notices. All notices required or permitted to be given hereunder
shall be in writing and deemed duly given and delivered or sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
If to the Company:
HEALTHWATCH, INC.
0000 Xxxxx Xxx
Xxxxx, Xxxxxxxxxx 00000
Attn: President
If to Licensor:
MERAD Corporation
0000 Xxxxxxxxx Xxxx, XX
Xxxxx 0000, Xxxxx Towers
Xxxxxxx, XX 00000
Attn: President
(h) Waiver of Default. The waiver of any default or breach under this
Agreement by either party shall not constitute a waiver of any rights for any
subsequent default or breach.
(i) Section Headings. The section headings in this Agreement are for
reference purposes only and shall not affect the interpretation of this
Agreement,
(j) Time is of the Essence. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
HEALTHWATCH, INC.
By:
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Xxxxxx X. Xxxxx, President
MERAD CORPORATION
By:
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Xxxx X. Xxxxxxxx, President
