QualityFIRST(R)
LICENSE AGREEMENT
This License Agreement (the "Agreement") is effective as of the 11th day of
July, 1996, by and between the Institute for Healthcare Quality, Inc. ("IHQ"), a
Minnesota corporation and a wholly-owned subsidiary of Health Risk Management,
Inc. ("HRM"), a Minnesota corporation having a place of business at ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Keystone Mercy Health Plan
("Licensee"), a Pennsylvania general partnership with its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, IHQ has developed a software program described in the attached
Exhibit A, which incorporates a guideline system useful in the healthcare
industry for utilization review, confirmation of diagnoses of certain illnesses
and diseases, therapeutic selection, resource selection and acute care
management; and
WHEREAS, Licensee desires to obtain a license to use such software program
and its accompanying user documentation pursuant to the terms and conditions of
this Agreement.
NOW THEREFORE, in consideration of the premises and the covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties agree as follows:
LICENSE AGREEMENT
Definitions
1.1 "Authorized User" shall mean any agent, employee or consultant of Licensee
who has received the training described in Schedule 2 of this Agreement,
including those trained by trainers.
1.2 "Documentation" shall mean any IHQ user manuals or written specifications
for the installation, operation or maintenance of the Software.
1.3 "Effective Date" shall mean the date first written above.
1.4 "Key Person" shall mean a person employed by Licensee, designated by
Licensee in Schedule 3 of this Agreement, and authorized by Licensee (i) to
receive, retain custody of, and to make backup copies of the Software and
updates for the Software; (ii) to procure any technical assistance from IHQ
needed in connection with the use of the Software; (iii) make arrangements for
any training services and consulting services to be provided by IHQ pursuant to
Schedule 3 of this Agreement, and (iv) to receive bulletins and announcements
concerning updates and supplements for the Software.
1.5 "Royalty Period" shall mean each calendar month during the term of this
Agreement.
1.6 "Software" shall mean the QualityFIRST(R) software program as described in
Exhibit A, and any modifications, enhancements, revisions, additions or updates
to this program.
1.7 "Terminated" or "Termination" shall mean the expiration, cancellation,
revocation or rescission of this Agreement.
License of Software
2.1 Grant. IHQ hereby grants to Licensee pursuant to the following terms and
conditions, and Licensee hereby accepts, a terminable, nonexclusive,
nontransferable right and license to use the Software solely in nonprinted,
machine readable form on the computers and at the locations identified on the
attached Exhibit B, as amended from time to time, and solely for the purposes
defined herein. The license granted pursuant to this section shall not entitle
Licensee to grant sublicenses for the Software.
2.2 Licensed Use. Licensee's right to use the Software shall be limited to the
stand alone and local area network computers at Licensee's own installation
sites identified in Exhibit B, as amended from time to time, provided such
computers are supported by a single file server per site. Licensee shall not,
without the prior approval of IHQ, install or use the Software on any additional
computers or file servers whether remote or on site, except as provided in
Schedule 1 of this Agreement. Licensee shall only permit Authorized Users and
Key Persons to have access to the Software.
2.3 Scope of Licensed Use. The parties agree that Licensee shall have the
limited right to use the Software in accordance with the terms of this Agreement
solely by Authorized Users for Licensee's own internal business purposes within
the United States, and that Licensee shall not, and shall not permit others to
(i) copy the Software or any information contained therein (the "Information")
except as provided in Section 6.3, (ii) use the Software in any public computer
based information system, (iii) allow any third party to use or have access to
the Software or any portion thereof, or (iv) create derivative works of the
Software. This Section shall not prohibit Licensee from making copies of the
Position Papers contained in the Software for distribution to its physicians
during the term of this Agreement.
2.4 Additional Uses Prohibited. Except as provided in Section 2, any other use
of the Software or Information contained in the Software is expressly
prohibited, including, by way of illustration and not by way of limitation,
using the Software in connection with a public computer-based information
system; disassembling, translating, decompiling, reverse engineering or creating
derivative works based on the Information contained in the Software; selling,
assigning, leasing, sublicensing or otherwise transferring the right to use the
Software or any portion of it; or permitting access to the Software by any
unauthorized party. Licensee agrees that its obligations under the terms of this
section shall survive the Termination of this Agreement.
2.5 Unauthorized Access to the Software. Licensee agrees to take reasonable
steps, by contract, instruction or otherwise, to ensure that anyone having
authorized access to the Software agrees to comply with the terms of this
Agreement.
2.6 Third Party License. CPT data as contained in the Software is licensed to
HRM and IHQ by a third party. Incorporation of the most current version of CPT
in the Software by IHQ is subject to continuation of such third party license.
2.7 No Other Rights Granted. It is mutually understood and agreed that Licensee
receives no licenses or rights, whatsoever, by implication or otherwise, under
any other patents, patent applications, trade secrets, copyrights, or other
property or rights owned or controlled by IHQ, except those specifically granted
to Licensee pursuant to the terms of this Agreement.
2.8 Fees. Fees for the license of rights granted to Licensee pursuant to this
Agreement shall be as set forth in Schedule 1 to this Agreement.
Records and Reports
3.1 Reports. For each Royalty Period, Licensee shall be responsible for
determining and providing written or electronic eligibility information to IHQ
on a monthly basis in a form mutually acceptable to both parties. IHQ may rely
in good faith on such eligibility information in calculating its Subscription
Fee pursuant to Schedule 1 of this Agreement. Following each Royalty Period,
Licensee shall provide to IHQ a written report setting forth the Subscription
Fee due for the Royalty Period. Licensee's written report shall be accompanied
by a check for all fees due pursuant to Schedule 1 and shall be forwarded to
IHQ, or its designee, HRM, by first class mail, postage prepaid, within thirty
(30) days after the end of each Royalty Period.
3.2 Inspection of Records. Licensee shall, from time to time, permit IHQ to
conduct inspections at its locations and installation sites identified in
Exhibit B, as amended from time to time, to verify Licensee's compliance with
this Agreement and to verify any fee due pursuant to this Agreement, provided,
however, (i) such inspection shall take place at Licensee's principal place of
business, during normal business hours and only to the extent necessary for IHQ
to verify the reports and payments made pursuant to Section 3.1, (ii) IHQ shall
give Licensee three (3) days written notice prior to any such inspection, and
(iii) IHQ shall bear all costs of any such inspection unless the inspection
reveals that any fees paid by Licensee have been understated by an amount equal
to or greater than five percent (5%) of the actual fees due, in which
circumstances, Licensee shall promptly pay to IHQ (i) all of IHQ's reasonable
costs of such inspection, and (ii) all fees past due including any interest that
has accrued as provided in Section 3.1.
3.3 Data Collection. Licensee shall, during the term of this Agreement, keep a
record of (i) diagnosis and clinical decisions, and (ii) resource needs and
variations, generated by its use of the Software. Licensee shall from time to
time at the request of IHQ forward a copy of such records to IHQ on diskette or
electronically as agreed to by both parties. Records so provided shall remain
strictly confidential between IHQ and Licensee and their affiliates provided
that IHQ may integrate the information in such records into its aggregate
reports so long as Licensee is not identified.
Delivery
4.1 Generally. On or before July 1, 1996, IHQ shall deliver to Licensee's Key
Person (or other designated agent at HRM's facility in Minneapolis, Minnesota)
one (1) copy of the Software for the KMHP dedicated care management unit at HRM
in Minneapolis, Minnesota, and one (1) copy of the Software for Licensee's site
located in Philadelphia, Pennsylvania. The Software shall be considered
delivered, and Licensee shall be deemed to have accepted the Software, upon
installation of the Software. Licensee shall have sole responsibility for the
installation of the Software.
Modifications and Updates to the
Software
5.1 Restrictions on Modifications. IHQ shall have the sole right to modify,
maintain, enhance or otherwise alter the Software. The parties agree that
Licensee shall not develop or create, or assist in the development or creation
of any modifications, enhancements or alterations to the Software.
5.2 Updates for the Software. IHQ anticipates that it will update the Software
at least once every calendar year. IHQ shall provide Licensee at no charge with
one (1) copy of the updated Software, including any user documentation thereof.
If requested, Licensee shall within thirty (30) days of receipt of the updated
Software, either return the original Software and all copies thereof to IHQ by
registered mail, return receipt requested or certify in writing that the
Software has been destroyed and cannot be returned. Unless certified as
destroyed, the failure to return the original Software as specified herein shall
render all warranties made by IHQ null and void, and shall entitle IHQ to
terminate this Agreement as provided in Section 9.3.
Software Ownership and Confidentiality
6.1 Ownership of Software. The parties agree that the Software, including all
source code and documentation for the Software is proprietary to IHQ or third
party licensors and is protected by patent applications and/or copyright and/or
trade secret interests of IHQ and third party licensors, that title to the
Software shall at all times remain with IHQ or third party licensors, and that
nothing in this Agreement shall be construed to release, transfer or assign any
such rights to Licensee as a result of this license, or to give Licensee any
ownership rights in the Software, or any modifications, enhancements or
alterations that IHQ may subsequently make to the Software, but rather, gives
Licensee the right to use the Software in accordance with the terms and
conditions of this Agreement.
6.2 Confidential Nature of the Software. Licensee acknowledges that the Software
and Information, including all source code and documentation for the Software,
is confidential to IHQ. Due to the confidential nature of the source code for
the Software, Licensee, including its employees, consultants and agents, shall
(i) limit access to the Software to its Authorized Users who require access to
the Software in order to use it as permitted under this Agreement; (ii) maintain
the Software in strict confidence by not making available or disclosing the
Software in whole or in part, to any third party without the prior written
permission of a Vice President of IHQ, except for any disclosure which may be
required by applicable law or court order (iii) not use the Software for any
purpose other than to perform a term or condition of this Agreement; and (iv)
take all reasonable precautions to maintain the confidentiality of the Software
and employ at least those precautions as Licensee employs to protect its own
confidential or proprietary information. Licensee agrees to treat as
confidential, to the full extent permitted by applicable law, and shall not, at
any time, directly or indirectly, use or disclose Confidential Information of
IHQ received by Licensee, or with respect to which Licensee is given access,
without the prior written consent of IHQ. As used in this Agreement,
"Confidential Information" is defined as: (i) all information, written or oral,
not generally known outside IHQ or proprietary to it, about its products and
services, product and service design, marketing, accounting, computer programs
and information gathering techniques and methods, and all accumulated data,
listings, or similar recorded matters used or useful in the business of health
care cost containment through group benefit design, utilization review, employee
rehabilitation, health care provider negotiations and medical claims management,
including, but not limited to, customer information files, business forms,
computer software, advertisements and marketing aids; and (ii) all information
disclosed to Licensee, or to which Licensee has access, from whatever source,
during the term of this Agreement, which Licensee knows or has reason to know is
Confidential Information. Notwithstanding the foregoing:
(01) nothing in this Agreement shall limit in any way:
(a) disclosure of information
required by a public
authority; or
(b) disclosure of information
that is necessary to prevent
imminent danger to the
public.
(02) information received from IHQ shall not be deemed Confidential
Information, and Licensee shall have no obligation with respect to such
information:
(a) which, as of the Effective
Date of this Agreement, is
part of the public domain;
(b) which subsequently be-
comes part of the public
domain through no fault of
Licensee;
(c) which Licensee can show was in Licensee's possession, as
evidenced by written records kept in the ordinary course of
business or by the proof of actual use at the time of
executing this Agreement, and which information had not been
wrongfully acquired, directly or indirectly, from IHQ; or
(d) which is subsequently disclosed to Licensee by a third party
not in violation of any right of, or obligation to, IHQ.
This Section shall survive the Termination of this Agreement.
6.3 Copies of Software. Licensee may make one (1) copy of the Software solely to
be used as a back-up copy and one (1) additional copy for installation on each
stand alone computer or file server designated in Exhibit B; provided, however,
that Licensee reproduces the Software in its entirety including all of the
titles, trademarks, copyright notices and other proprietary markings including
those of any third party licensor which appear on the Software. Licensee shall
not remove or obscure any such notices.
6.4 Reverse Engineering of Software. Licensee acknowledges that the object code
and source code for the Software, including all updates for the Software, which
are embodied on the magnetic storage media contain confidential and trade secret
material which is not readily susceptible to reverse compilation or reverse
assembly. Licensee or any of its employees, agents or consultants shall not
attempt to decompile or disassemble the object code of the Software in whole or
in part. Licensee further agrees that it will use its best efforts to prevent
decompilation and disassembly of the object code of the Software by any person
or entity by securing and protecting each copy of the Software or update, in a
manner consistent with the maintenance of Licensee's proprietary rights and by
taking appropriate action by instruction or agreement. Violation of any
provision in this section shall be the basis for the immediate Termination of
this Agreement.
6.5 Guideline System. During the term of this Agreement and continuing for six
(6) months after Termination, Licensee shall not use the Software, its
algorithms, position papers, user interfaces, reports or printouts as a basis or
model to create, directly or indirectly, its own guideline system useful in the
healthcare industry for utilization review, confirmation of diagnoses of certain
illnesses and diseases, therapeutic selection, resource selection or acute care
management nor shall Licensee approach any employee of IHQ for the purpose of
extending an offer of employment.
Remedies
7.1 Irreparable Harm Caused by Breach. Licensee recognizes the confidential and
proprietary nature of the Software and, in such connection, acknowledges that a
breach by Licensee of any of its covenants, agreements or undertakings in this
Agreement will cause IHQ irreparable damage, which cannot be readily remedied in
damages in an action at law and may constitute an infringement of IHQ copyrights
entitling IHQ to equitable remedies, costs and reasonable attorneys' fees.
Warranties and Indemnification
8.1 Warranty by Licensee. Licensee warrants and represents to IHQ that it shall
use the Software in accordance with all applicable laws, rules and regulations
and that it will use the Software solely as a guidance or research tool in the
review of diagnosis, therapeutic selection, and resource utilization of patients
and not as a substitute for health care practice activities by an examining
physician or other authorized professional.
8.2 Warranty of Title. IHQ warrants that it has the right to license the
Software to Licensee and that IHQ shall, at its own expense, defend Licensee
against any claim and indemnify Licensee against and hold it harmless from any
damages, liabilities, costs and expenses (including reasonable attorneys' fees)
arising out of or related to any claim that the unmodified Software (except as
modified or updated by IHQ) infringes any U.S. patent or copyright; provided
that (i) Licensee notifies IHQ in writing within ten (10) days of notice of any
such claim made against it; (ii) IHQ shall have sole control of the settlement
or defense of any action against Licensee to which this indemnity relates; and
(iii) Licensee cooperates with IHQ in every reasonable way to facilitate such
defense.
8.3 Indemnification for Misuse of Software. Licensee shall, at its own expense,
defend IHQ against any claim and shall indemnify IHQ against and hold it
harmless from any damages, liabilities, costs and expenses (including attorneys'
fees) arising out of Licensee's or any of its agents' or employees' misuse of
the Software, provided that (i) IHQ promptly notifies Licensee in writing of any
such claim made against it, and (ii) IHQ cooperates with Licensee in every
reasonable way to facilitate such defense.
8.4 Warranty. IHQ warrants to Licensee that during the Initial Term and any
Renewal Term of this Agreement (i) the media on which the original Software and
the Documentation are recorded will be free from defects in material and
workmanship under normal use, and (ii) the Software will conform to the
specifications set forth in the Documentation. This warranty and any obligations
on the part of IHQ shall be null and void if defects result from Licensee's use
of the Software or the media on which the Software is recorded in a manner not
contemplated by this Agreement. In addition, any support provided to Licensee by
IHQ for defects resulting from Licensee's use of the Software other than as
contemplated in this Agreement will be billed to Licensee on a
time-and-materials basis, at the rates set forth in Schedule 3 hereto.
Licensee's exclusive remedy under this warranty pursuant to this section shall
be as follows:
a. IHQ will provide Licensee with access to a customer support
telephone line between the hours of 9:00 a.m. and 5:00 p.m., Central Time, on
business days and any other times that may be agreed upon. Licensee may use the
customer support line to report suspected defects to IHQ. Based upon Licensee's
verbal reports, IHQ will attempt to resolve Licensee's technical problems and
issues using the customer support telephone line.
b. In the event that IHQ is not able to resolve Licensee's suspected
defects using the customer support telephone line, Licensee shall provide prompt
written notification to IHQ, including all documentation necessary to identify
the suspected defect or cause.
c. If the technical problem or suspected defect is a non-critical one,
(i.e., it does not materially affect Licensee's use of the Software), IHQ will
use its best efforts to identify the suspected defect, provide Licensee with a
suitable replacement or a temporary work-around or other alternative in the
interim and correct the defect in the earliest possible update release.
d. If the problem or suspected defect is critical (i.e., it materially
affects Licensee's use of the Software as contemplated in this Agreement), IHQ
will, within five (5) business days after its receipt of Licensee's written
notification and documentation of the suspected defect, provide Licensee with a
plan designed to correct the suspected defect within the following thirty (30)
days. In the event IHQ is not able to correct a critical defect within thirty
(30) days of its receipt of written notification and documentation from
Licensee, Licensee shall be entitled to credit against future Subscription Fees
payable by Licensee under this Agreement, those Subscription Fees paid by it
during the period commencing on the thirtieth day following its written
notification to IHQ of the critical defect, to the date of the delivery of the
critical defect correction. Notwithstanding the preceding sentence, at any time
after thirty (30) days after IHQ's receipt of notification, if IHQ has failed to
deliver the critical defect correction, then Licensee shall also have the right
to terminate this Agreement in accordance with Section 9 hereof, and return to
IHQ the Software and Documentation, including all copies thereof.
If this Agreement is terminated by Licensee pursuant to Section 8.4(d) during
the Initial Term or any Renewal Term, IHQ shall pay to Licensee within a
reasonable time following the termination date, a refund of those Subscription
Fees paid by Licensee from the time of Licensee's written report of the critical
defect to the termination date.
8.5 Liability Limitation. The Software and help screens incorporated therein
consist of a series of research-based works prepared and distributed by IHQ for
the health care professionals who use the Software. The Software is based on
clinical experience and a review of the relevant scientific literature
reflecting the state of knowledge current at the time of publication. The
Software defines the diagnostic and treatment principles upon which each
guideline is based, but should not be considered inclusive of all relevant and
proper methods of diagnosis and treatment interventions or all possible
indications, outcomes, contraindications, and adverse effects for the listed
diagnostic procedures and treatment interventions. Nor should the Software be
considered to be exclusive of other methods of care reasonably directed at
obtaining the appropriate results. Adherence to the information contained in the
Software and help screens is strictly voluntary. The ultimate judgement
regarding the appropriateness of any specific diagnostic procedure or treatment
intervention must be made by the physician in light of the individual
circumstances presented by the patient.
In no event shall IHQ or third party licensor be liable for any indirect,
incidental, consequential or special damages of any kind (including damages for
lost profits, loss of business, loss of data or use of data, personal injury or
the like) resulting from any diagnosis, therapeutic selection, or resource
selection, regardless of whether such diagnosis or selection was a result of an
error in the Software or on the help screens, from a breach of warranty or any
other type of claim arising from the use or inability to use the Software or
help screens, including without limitation, liability arising out of contract,
negligence, and strict liability in tort or warranty, even if IHQ and/or third
party licensors have been advised of the possibility of such damages. Third
party licensors disclaim any and all liability to Licensee including liability
for the sequence, accuracy or completeness of information provided in the
Software.
8.6 Warranty Limitation. IHQ and third party licensor do not warrant that the
Software will meet Licensee's requirements or that its operation will be
uninterrupted or without error. Licensee acknowledges that the Software has not
been developed according to Licensee's specifications or is otherwise
custom-made. The remedies stated in this Section constitute Licensee's sole and
exclusive remedies with respect to the warranties made hereunder. Except as
expressly set forth in this Section, THE SOFTWARE IS PROVIDED "AS IS" WITHOUT
WARRANTY OF ANY KIND OTHER THAN AS STATED ABOVE. IHQ AND THIRD PARTY LICENSOR
MAKE NO EXPRESS OR IMPLIED WARRANTIES RELATING TO THE SOFTWARE OR ITS USE OR
FUNCTIONALITY, AND SPECIFICALLY DISCLAIM ALL WARRANTIES, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANT-
ABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
Licensee understands and agrees that the limitation of IHQ's liability stated
above represents a deliberate allocation of risk that effects the price of the
program. Without this exculpation of liability the License Fee charged by IHQ
would necessarily be much greater. By the use of this Software, Licensee
expressly accepts the above disclaimer of liability.
Term and Termination
9.1 Term. Unless terminated earlier as provided in this Agreement, this
Agreement shall commence as of the date the Software is delivered to Licensee
and shall continue in force through December 31, 2001 (the "Initial Term").
Thereafter, this Agreement will be automatically renewed for successive twelve
(12) month terms (a "Renewal Term") unless terminated as provided below.
9.2 Termination Without Cause. Either party may terminate this Agreement at the
end of the Initial Term or any Renewal Term hereof by giving written notice of
intent to terminate to the other party at least one hundred twenty (120) days
prior to the end of the Initial Term or any Renewal Term.
9.3 Termination for Breach. If at any time during the term of this Agreement
either party fails to perform any material covenant, condition, duty, obligation
or limitation herein, provided the breaching party shall not have remedied (or
taken reasonable steps to remedy) its failure within thirty (30) days after
receipt of written notice of such failure, the non-breaching party shall have
the right, in addition to any other rights it may have, to terminate this
Agreement.
9.4 Termination for Insolvency. This Agreement shall be terminated automatically
in any one or more of the following circumstances: (i) in the event that either
party is insolvent or is placed in the hands of a receiver, or otherwise enters
into a composition agreement with any of its creditors or makes any unauthorized
assignment for the benefit of creditors; or (ii) in the event that any of the
assets of either party are seized or attached, in conjunction with any action
against it by any third party, and such attachment materially affects the
ability of that party to perform this Agreement.
9.5 Effect of Termination. Upon Termination of this Agreement for any reason,
Licensee shall immediately cease all use of the Software and deliver all copies
of the Software and accompanying Documentation to IHQ by certified mail, return
receipt requested. Licensee shall have no right of any kind with respect to the
Software after the date of Termination. In the event that Licensee fails to
comply with this provision, IHQ shall have the right, at any time, to take
immediate possession of the Software and all copies wherever located, without
demand or notice.
Bankruptcy
10.1 Agreement to Assume or Reject. In the event a voluntary or involuntary
petition in bankruptcy is filed by or against Licensee, Licensee agrees to
either assume or reject this Agreement within sixty (60) days of the date the
petition was filed.
10.2 Assumption of Agreement. If it assumes this Agreement, Licensee agrees to
cure, or provide adequate assurance that it will promptly cure, any default
under the Agreement; compensate, or provide adequate assurance that it will
promptly compensate, IHQ for any actual pecuniary loss to IHQ resulting from
Licensee's default; and provide adequate assurance of its future performance
under the Agreement.
10.3 Rejection of Agreement. If Licensee fails to assume this Agreement, or
rejects the same, within sixty (60) days of the filing date, then the parties
agree that this Agreement is terminated without further actions or proceedings.
Licensee then agrees it is obligated to surrender, and shall surrender,
immediate possession of the Software and accompanying Documentation, and all
copies thereof wherever located to IHQ without demand or notice. If Licensee
fails to voluntarily return the Software and all copies thereof, then Licensee
agrees and consents that IHQ is entitled to an order from a court of competent
jurisdiction lifting the automatic stay and entitling it to exercise its state
law remedies to immediately recover the Software and accompanying Documentation,
and all copies thereof, wherever located.
10.4 Enforceability. The covenants and agreements set forth in this Section 10
are deemed by the parties to follow the Software and shall be enforceable
against Licensee's successor, trustee or debtor in possession. This Section 10
shall be enforceable pursuant to the provisions of 11 U.S.C., Section 365.
General
11.1 Notice. Any notice or other communication required or allowed to be given
under this Agreement shall be deemed delivered when in writing and personally
delivered or sent by registered or certified U.S. mail, postage prepaid, return
receipt requested, and addressed to the appropriate party at the following
addresses:
KMHP:
Chief Financial Officer
Keystone Mercy Health Plan
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IHQ:
Chief Financial Officer
Institute for Healthcare Quality, Inc.
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Addresses may be changed by written notice given pursuant to this Section;
however, any such notice shall not be effective, if mailed, until three (3) days
after depositing in the mail or when actually received, whichever occurs first.
11.2 Entire Agreement. This Agreement, including the attached Schedule 1 and
Exhibits A and B, constitutes the entire understanding and agreement between the
parties and supersedes any prior written or oral understandings or agreements
relating to its subject matter. This Agreement may not be modified or amended
except by a writing signed by both parties.
This Agreement is contemplated by the parties to be executed and performed in
conjunction with, and as part of, a managed care services agreement (the "MCS
Agreement") between Licensee and HRM intended to be negotiated and executed by
the parties hereto. In the event either party make a good faith determination
that it will not be able to reach agreement with the other and finalize the MCS
Agreement, then such party may terminate this Agreement upon sixty (60) days
prior written notice. In the event the MCS Agreement is executed and delivered
by the parties thereto, the provisions of the MCS Agreement will supersede
Sections 9.1 and 9.2 and paragraphs 1, 2 and 3 of Schedule 1 and paragraphs 1
and 2 of Schedule 3 hereof. In the event any inconsistency between the MCS
Agreement and this Agreement, the MCS Agreement shall govern.
11.3 Assignment. The rights and obligations of the parties hereunder shall not
be assigned without the prior written consent of the other party; provided,
however, that IHQ may assign this Agreement to a parent, wholly-owned subsidiary
or other affiliated company or purchaser of all or substantially all of the
assets or capital stock of IHQ without the written consent of Licensee. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
11.4 Headings. The headings of the various sections of this Agreement are for
convenience purposes only and shall not control or affect the meaning or
construction of any provision of this Agreement.
11.5 Severability. If any provision of this Agreement is held invalid or
unenforceable by a court of competent jurisdiction, such provision shall be
considered stricken from the Agreement and the remainder of the Agreement shall
continue in full force and effect.
11.6 Relationship of Parties. Nothing contained in this Agreement shall be
construed to make either party the agent for the other for any purpose, and
neither party hereto shall have any right whatsoever to incur any liabilities or
obligations on behalf of or binding upon the other party. This Agreement is not
intended, and shall not be construed, to create a joint-venture, a partnership,
an agency or a franchise between the parties.
11.7 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota applicable to contracts made
and performed therein.
11.8 Force Majeure. Any failure of either party to perform the obligations
hereunder shall not constitute default under this Agreement, nor give rise to
any claim for damage if and to the extent such delay or failure is caused by
occurrences beyond the control of the party affected, including, but not limited
to, acts of God, acts of war, public disorders, sabotage, floods, riots,
strikes, or other causes which, by the exercise of reasonable diligence, the
affected party is unable to prevent, mitigate or remove.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth above.
INSTITUTE FOR HEALTHCARE
QUALITY, INC.
By:
Title:
Print Name:
KEYSTONE MERCY HEALTH PLAN
By:
Title:
Print Name:
SCHEDULE 1
1. License Fees. Upon delivery of the Software to Licensee's dedicated care
management units at HRM in Minneapolis, Minnesota and Philadelphia,
Pennsylvania, pursuant to the Managed Care Service Agreement between
Licensee and HRM, Licensee shall pay to IHQ a one-time License Fee of
Seventy-five Thousand Dollars ($75,000) ("License Fee"). This License Fee
covers the single file server and/or computers ("Workstations") located at
the two (2) locations described in Exhibit B.
If Licensee desires to use the Software on additional file servers or at
additional locations, Licensee must inform IHQ in writing of this intent
and pay IHQ an additional one-time License Fee upgrade of Two Thousand
Dollars ($2,000) for each additional file server or location.
2. Subscription Fees. Commencing on August 1, 1996, a monthly QualityFIRST(R)
Subscription Fee, to be paid on the first day of each month, will be
charged for all licensed file server sites. This monthly Subscription Fee
will be the greater of the following:
(01) Thirty Three Thousand Seven Hundred Fifty Dollars ($33,750) per month;
OR
(02) The total number of Members, multiplied by $.27 per Member per month
("PMPM").
For purposes of this Agreement, "Member" shall be defined as any person
enrolled as a subscriber or dependent in Licensee's health care plan
designated by Licensee to be served utilizing the Software. This Agreement
anticipates that Licensee will, initially, estimate the number of Members
for the purpose of determining Subscription Fees due hereunder, and
following the initial estimate, a reconciliation of the number of Members
shall be prepared within ninety (90) days following each Royalty Period.
3. Subscription Fee Increases. IHQ guarantees that the Subscription Fees set
forth above will remain in effect during the Initial Term of this
Agreement. After the Initial Term of this Agreement, based on experience
and market conditions, IHQ may raise its Subscription Fee upon one hundred
eighty (180) days written notice to Licensee prior to each anniversary
date. Any price increase will not be effective if such notice is received
less than one hundred eighty (180) days prior to that date.
4. Taxes. Licensee shall be responsible for all sales tax due hereunder and
IHQ shall be responsible for all taxes imposed on IHQ's income. All other
state, local and federal taxes applicable to any of the services provided
pursuant to the Agreement, whether imposed now or later by the applicable
taxing authorities, shall be paid by the party responsible under such law
for such payment.
5. Billing Contact. Licensee designates its Chief Financial Officer to be its
billing contact for receiving invoices and handling billing related
questions. This contact can be reached at the following address and
telephone number:
Keystone Mercy Health Plan
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SCHEDULE 2
TRAINING FEES BELOW ARE APPLICABLE ONLY FOR ADDITIONAL TRAINING REQUESTED BY
LICENSEE AFTER BOTH (1) LICENSEE'S RECEIPT OF THE SOFTWARE FOR USE BY LICENSEE'S
STAFF AT ITS PENNSYLVANIA FACILITIES AND (2) THE TRANSITION DATE SPECIFIED IN
THE MCS AGREEMENT.
1. Overview. IHQ is committed to providing training to support the successful
integration of QualityFIRST(R)into a care management program. IHQ is
available to provide implementation planning at the customer site to assist
with implementation strategy development. This includes an assessment of
the Licensee's implementation and training needs. On the basis of this
assessment, IHQ will recommend an individualized implementation schedule to
the Licensee. Although additional consulting services may be provided, in
all cases the Licensee is required to participate in the User Training
Program described below.
2. User Training Program. IHQ will provide a User Training Program for
Licensee's care managers and physician consultants at Licensee's place of
business. The training program provided by IHQ pursuant to this paragraph
will cover care management process, guideline application, specialist
referral procedures, system usage documentation requirements, and reports
management. Licensee agrees to provide adequate training facilities and a
separate Workstation for each attendee. A working knowledge of Microsoft(R)
Windows(TM) is a prerequisite for this program.
3. User Training Program Fee. The User Training Program will consist of a
training session for up to five care managers and a one (1) day follow-up
training session, which will occur within ninety (90) days after the
initial training session. The fee for this User Training Program is Six
Thousand Dollars ($6,000) (the "User Training Program Fee"); provided,
however that Licensee shall pay all reasonable travel and other associated
expenses incurred by IHQ in conducting such training.
In the event the Licensee desires to have more than (5) care managers
attend future IHQ training courses, Licensee shall pay IHQ an additional
Training Fee of One Thousand Dollars ($1,000) per attendee.
4. Train-the-Trainer Program. In the event that Licensee desires to have its
employees train other employees or consultants of Licensee, IHQ will
provide an optional Train-the-Trainer Program for the sum of Twelve
Thousand Dollars ($12,000) (the "Train-the-Trainer Program Fee"); provided,
however that Licensee shall pay all reasonable travel and other associated
expenses incurred by IHQ in conducting such training. This
Train-the-Trainer Program will consist of:
o Session 1 will consist of a sixteen (16) hour User Training course
that may include up to seven (7) attendees. (Two (2) designated
trainers and five (5) Authorized Users). The User Training course will
be followed by an eight (8) hour briefing session specifically for the
designated trainers; this session will focus on training techniques,
training preparation, use of case scenarios and role playing.
o Session 2 will be a User Training course scheduled by Licensee no
later than 3-4 weeks following Session 1. This session includes a
team-teaching approach in which Licensee's new trainers assist the IHQ
trainer in the training preparation and delivery of training. The
optimal trainer/trainee ratio is two (2) trainers to five (5) new
Authorized User trainers.
o Session 3 will be a User Training course scheduled by Licensee no
later than six to eight weeks following Session 2. Licensee's new
trainers will be responsible for conducting Session 3, including
training preparation (logistics and agenda) and presentation of the
rationale for selecting QualityFIRST(R) guidelines for Licensee's
environment and how the guidelines will be used. The role of the IHQ
trainer at Session 3 will be to observe and assist in the delivery of
training.
Following Session 3, additional training sessions may be scheduled
based on Licensee's needs and IHQ trainer evaluation. Any subsequent
training sessions will be provided upon the terms and conditions,
including fees, as set forth in Schedule 3 of this Agreement.
5. Physician Training Program. If Licensee so desires, IHQ will provide an
optional half-day Physician Training Program for up to five (5) physician
managers for the sum of Two Thousand Dollars ($2,000); provided, however,
that Licensee shall pay all reasonable travel and other associated expenses
incurred by IHQ in conducting such training.
6. Fees and expenses due pursuant to this schedule shall be invoiced by IHQ
and shall be due within thirty (30) days from the date of such invoice.
SCHEDULE 3
TECHNICAL/CUSTOMER SUPPORT AND CONSULTING SERVICES.
1. Technical/Customer Support Following Licensee's Receipt of the Software for
Use by Licensee's Staff at its Facilities in Pennslyvania. In order to
assist Licensee in the effective use of the Software, IHQ shall during the
initial term of this Agreement, at the request of Licensee, provide
Licensee with up to forty (40) hours of telephone technical/customer
support for questions related to use of the Software and to assist with the
implementation plan and definition of the care management process. All
requests for technical/customer support services must be made by Licensee's
Key Person or Key Person Alternate. In addition, Licensee's Key Person
shall inform IHQ when there is a configuration change in the number of
Workstations using the Software. This requires that the Key Person maintain
Exhibit B and communicate changes thereon to IHQ as they occur. For the
purposes of this Agreement, Licensee designates _______________________ to
be its Key Person and _______________________ to be its Key Person
Alternate. Licensee's Key Person can be reached at the following telephone
number during regular business hours ( ) . Licensee may change the identity
of its Key Person or Key Person Alternate provided it notifies IHQ in
writing of such a change within fifteen (15) days thereafter.
2. Consulting Services. In addition to the technical/customer support services
provided as described above, IHQ is available to provide Licensee with
consultation services upon the oral or written request of Licensee. During
the Initial Term of this Agreement, Licensee shall pay a consulting fee to
IHQ for consulting services provided by IHQ at the following hourly rates:
Vice President Level $250 per hour
Physician Consultant Level $175 per hour
Director Level $150 per hour
Programming Consultant Level $ 75 per hour
provided, however, that Licensee shall reimburse IHQ for all travel and
other associated expenses incurred by IHQ in rendering such consulting
services. Fees due pursuant to this paragraph shall be invoiced by IHQ and
shall be due within thirty (30) days from the date of such invoice.
EXHIBIT B
Identification of Computers and Location
Site Computer Description Date of Installation
Health Risk KMHP Dedicated Care
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