Health Care Information System Software Agreement

Medical Information Technology, Inc.


Health Care Information System Software Agreement


AGREEMENT made this 31st of March, 2006 by and between MEDICAL INFORMATION TECHNOLOGY, INC., a corporation duly organized and existing under the laws of the Commonwealth of Massachusetts and having its principal place of business at MEDITECH Circle, Westwood, Massachusetts 02090 (hereinafter called MEDITECH) and PHC Inc. d/b/a! Pioneer Behavioral Health, a corporation duly organized and existing under the laws of the Commonwealth of Massachusetts and having its principal place of business at 200 Lake Street, Peabody, MA 01960 (hereinafter called Customer).


WHEREAS MEDITECH has developed and continues to enhance a version of computer software designed to operate in a "client-server" environment, which version, together with any physical embodiment thereof and related documentation (incorporated in this Agreement as Exhibits II through V), are together hereinafter called LICENSED SOFTWARE, and WHEREAS Customer desires to obtain from MEDITECH the right to use such LICENSED SOFTWARE in its operations at the facility(ies) listed in Article II, .


NOW THEREFORE, the parties hereto hereby agree as follows:


ARTICLE I - GENERAL TERMS & CONDITIONS


A. RESPONSIBILITIES AND WARRANTlES OF MEDITECH


1. MEDITECH agrees to deliver, implement and service the LICENSED
SOFTWARE all as more fully described in this Agreement. Subject to the
terms and conditions hereof and upon payment in full to MEDITECH of
the license and implementation fees for each line item of LICENSED
SOFTWARE listed in Article II, MEDITECH hereby grants to Customer a
non-exclusive, perpetual license to use each such line item. MEDITECH
warrants that the LICENSED SOFTWARE shall have capabilities equal to
the capabilities described in Exhibits II through V and will operate
in substantial conformity with such descriptions when delivered to
Customer and installed on Customer's MEDITECH-approved computer
network (the major components of which are recited on Exhibit I
hereof).


2. MEDITECH warrants to Customer that it is the developer and sole owner
of the LICENSED SOFTWARE. In the event of any suit or claim against
Customer by any third party for damages and/or injunctive relief
contesting ownership of the LICENSED SOFTWARE by MEDITECH and/or
Customer's rights under this Agreement, MEDITECH agrees at its own
expense to defend Customer against such suit or claim and to hold
Customer harmless from the expenses of such defense and from any
court-awarded judgments resulting from such suit or claim, provided
that Customer furnishes written notice to MEDITECH of the commencement
of such suit or the presentation of such claim within fifteen (15)
days of notice thereof to Customer. Further, if, because of such suit
or claim, the LICENSED SOFTWARE is held to constitute an infringement
of any United States copyright or patent and use of the LICENSED
SOFTWARE by Customer is thereby enjoined, MEDITECH shall, at its own
expense, either procure for Customer the right to continue using the
LICENSED SOFTWARE or replace the same with a non-infringing product,
substantially conforming to that described herein, or modify the same
so that it shall be non-infringing, provided that the service
described in Article IV has not been terminated.


3. MEDITECH acknowledges that certain material which will come into its
possession or knowledge in connection with this Agreement includes
confidential or proprietary information of Customer or Customer's
patients (hereinafter called" Protected Information"), disclosure of
which to third parties may be damaging to Customer. MEDITECH agrees to
hold all Protected Information in confidence, to use it only in
connection with performance under this Agreement and to disclose it
only to those of its employees that require access thereto for such
performance or as may otherwise be required by law. In addition,
MEDITECH shall use appropriate safeguards to prevent other use or
disclosure of Protected Information and shall promptly report to
Customer any other use or disclosure of Protected Information of which
it becomes aware. MEDITECH shall ensure that any agents of MEDITECH,
including but not limited to subcontractors, to whom it provides
Protected Information agree to the same restrictions and conditions as
apply to MEDITECH with respect to such Protected Information. Upon the
written request of the United States Department of Health and Human
Services, MEDITECH shall make its internal practices, books and
records relating to the use and disclosure of Protected Information
provided to MEDITECH by Customer available to the Secretary of Health
and Human Services (or his or her designee or duly authorized
representative), at MEDITECH' s Massachusetts facility and at times
convenient for MEDITECH, to the extent required for determining
compliance with Federal privacy and security regulations. Upon
Customer's written request MEDITECH shall return to Customer (when
reasonably possible) or destroy any Protected Information.


-- 28 -- B. RESPONSIBILITIES OF CUSTOMER


1. Customer shall pay to MEDITECH the line item fee (license fee plus
implementation fee) for each line item of LICENSED SOFTWARE as
follows:


10% due upon execution of this Agreement
40% due upon software delivery
40% due 90 days following software delivery
10% due 180 days following software delivery


Each payment for each line item will be separately due and payable
without regard to other line items.


In the event a payment due MEDITECH under this Paragraph is delinquent
for a period of sixty (60) days from its due date, and MEDITECH so
notifies Customer in writing, and the delinquency is not cured within
thirty (30) days thereafter, then, upon MEDITECH' s written notice,
Customer will cease to use the LICENSED SOFTWARE until such time as
all payments then due are paid. Such cessation of use shall not
relieve Customer of any obligations under this Agreement, including
the obligation to make all payments specified herein.


2. During the period in which MEDITECH makes available the service
described in Article IV, Customer will pay to MEDITECH the monthly
service fees stated in Article II. These fees will commence upon the
attainment of Live Status for each line item of LICENSED SOFTWARE.
"Live Status" is defined for each line item as the date on which such
line item is used in Customer's daily operations utilizing real
patient/hospital data. Thirty-six (36) months after the date of this
Agreement these fees may be increased by MEDITECH at any time by
providing thirty (30) days written notice of such increase to
Customer. Any increases shall be limited to six percent (6%)
cumulative per year during the 24-month period following the initial
36-month period recited herein. Service fee invoices are issued on the
first of each month in which the service is to be made available, with
payment terms of net fifteen (15) days. If payment of any service fee
invoice is delinquent for a period of forty-five (45) days from its
due date, MEDITECH's obligations stated in Article IV may be suspended
until all delinquencies have been cured to the satisfaction of
MEDITECH.


3. Customer agrees to limit access to the LICENSED SOFTWARE to those of
its staff and employees who must have access thereto to properly use
the same in Customer's operations. Further, Customer agrees to notify
MEDITECH promptly and fully in writing of the circumstances concerning
any possession, use or study of the LICENSED SOFTWARE by any person,
corporation or other entity (other than Customer's staff and
employees) including, but not limited to, the name(s) and address(es)
of such person(s), corporation(s), or other entities. Customer agrees
that it will not, at any time, without written permission of MEDITECH,
copy, duplicate, or permit others to copy or duplicate the LICENSED
SOFTWARE, except to the extent required for the creation of backup
copies of the LICENSED SOFTWARE as described in Exhibits II through V.


4. Customer acknowledges that certain material which will come into its
possession or knowledge in connection with this Agreement includes
confidential or proprietary information of MEDITECH (including,
without limitation, the terms and conditions of this Agreement),
disclosure of which to third parties may be damaging to MEDITECH.
Customer agrees to hold all such material in confidence, to use it
only in connection with performance under this Agreement and to
release it only to those persons that require access thereto for such
performance or as may otherwise be required by law. In addition,
Customer shall use appropriate safeguards to prevent other use or


-- 29 --
disclosure of confidential or proprietary information of MEDITECH and
shall promptly report to MEDITECH any other use or disclosure of such
information of which it becomes aware.


5. If customer is a tax-exempt entity, then, upon execution of this
Agreement, Customer will provide to MEDITECH a copy of its current tax
exemption certificate for each applicable taxing authority which has
approved Customer's tax-exempt status. If Customer is not a tax-exempt
entity, Customer acknowledges that it (and not MEDITECH) shall be
responsible for the payment of any and all taxes (including, but not
limited to, sales, use, and excise taxes) imposed by the applicable
taxing authorities to which Customer is subject.


6. Not later than sixty (60) days prior to the earliest delivery date
listed in Article II, Customer will install and connect to its
computer network, at Customer's expense, a minimum of one BRI (ISDN)
line (or other MEDITECH-approved connectivity solution) as well as a
separate telephone line (equipped with an RAS modem for emergency use
only), in conformity with MEDITECH' s specifications, and will provide
MEDITECH with access thereto for the resolution of system problems in
accordance with the applicable sections of Article III and IV.
Customer shall maintain such ISDN service (or other MEDITECH-approved
connectivity solution) and provide MEDITECH with access thereto until
such time as the service described in Article IV is terminated for all
line items of LICENSED SOFTWARE.


C. RESTRICTIONS ON TRANSFER


The LICENSED SOFTWARE shall at all times remain the property of MEDITECH
and the license of use granted herein specifically excludes any ...