Software License & Development Agreement

SOFTWARE SALE, LICENSE AND DEVELOPMENT AGREEMENT



This is a Software Sale, License and Development Agreement ("Agreement") dated as of January 20, 1999, (the "Effective Date") by and between Empower Health Corporation ("EHC"), a Texas corporation having a place of business at 8920 Business Pass Drive, Au stin, Texas 78759 and HealthMagic, Inc. ("HMI"), a Delaware corporation having a principal place of business at 1444 Wazee Street, Suite 210, Denver, Colorado 80202 (individually a "party" and collectively, the "parties").



In consideration of the obligations stated in this Agreement, and other good and valuable consideration received by each of the parties, the parties agree as follows: ________________________________________________________________________________



PART I. PURPOSE AND SCOPE OF AGREEMENT; DEFINITIONS



1. Purpose and Scope of Agreement



A. HMI is a corporation engaged in developing, marketing and providing innovative Internet-enabled health information technology systems and applications including, without limitation, the Lifelong Health Record or "LHR" (as further defined below). EHC is a corporation engaged in the business of developing, marketing and maintaining an integrated suite of Internet enabled consumer oriented software applications and services including, but not limit ed to, Dr. Koop's Personal Medical Record System or "PMR" (as further defined below), Dr. Koop's Community and advertising and promotional services on the Internet at the web site http://www.drkoop.com (the "EHC Web Site"). The

--- ------------------ parties have entered into this Agreement under which: (i) EHC will sell Dr. Koop's Personal Medical Record System to HMI; (ii) HMI will further develop its existing Web-Based LHR and develop a Client-Based LHR using PMR as a starting p o int; (iii) HMI will grant EHC the right to "frame" or "embed" the Web-Based LHR into the EHC Web Site; (iv) HMI will grant EHC the right to use certain software tools; and (v) HMI will grant EHC the right to use and distribute LHR in association with EHC Web Site.



The execution, delivery and effectiveness of this Agreement are contingent upon the simultaneous execution and delivery of: (i) that certain Investment Agreement by and among Adventist Health System Sunbelt Healthcare Corporation ("Adventis t"), EHC and HMI dated January 20, 1999; and (ii) that certain Master Community Partner Program Agreement by and between Adventist and EHC dated January 20, 1999.



2. Definitions



Capitalized terms used in this Agreement shall have the meanings given below or in the context in which the term is used, as the case may be.



A. "Affiliate" shall mean, with respect to a party to this Agreement, any entity that directly or indirectly controls, or is under common control with, or is controlled by, such pa rty. As used above, "control" (including, with its correlative meanings, "controlled by" and "under common control with") means possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through o wnership of securities or partnership or other ownership interests, by contract or otherwise).



B. "Acquired Assets" shall mean the Acquired Product, the Acquired Documentation and the Acquired Intellectual Property Rights in such Acquired Assets.



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C. "Acquired Documentation" shall mean any and all documentation relating to or associated with the Acquired Product that EHC owns, to the best of EHC's knowledge, on the Effective Date.



D. "Acquired Intellectual Property Rights" shall mean all of the following as they relate to the Acquired Assets:



(1) All right, title and interest, under the laws of any country, in patents and applications for patents and any other government-issued indicia of invention ownership;



(2) All right, title and interest in all trade secret rights arising under the laws of any country;



(3) All rights of copyright and all other literary property and author rights (including moral rights) wh ether or not copyrightable, under the laws of any country, and all right, title and interest in all copyright registrations or applications for copyright registration;



(4) All right, title and interest in all technical data (excluding data of EHC end users), whether or not protectable by patent, copyright or trade secret laws; and



(5) All right, title and interest in all causes of action arising under the patent, copyright, trade secret or other laws of any jurisdiction, which causes of action have not been asserted as of the Effective Date.



E. "Acquired Product" shall mean Dr Koop's Personal Medical Record System ("PMR") (including all present and predecessor versions thereof and all works in progress relating to its correction, enhancement or modification), including both source code and object code versions and all supplements, enhancements and modifications thereto created by EHC or otherwise, and all audio and/or visual elements. In addition, Acquired Product includes the framework used for the development of PMR, whether stand-alone or web based. HMI hereby acknowledges that the PMR has not been completed and is not a fully functional software program.



F. "Certifying Authority" shall mean HMI or such other trusted third-party central administrator: (i) willing to verify the identities of those to whom it issues certificates and their association with a given key; (ii) that have a trustworthy public key (that is either publicized or provided with a certificate from a higher level Cert i fying Authority attesting to the validity of its public key); (iii) whose subject identification requirements (e.g., driver's license, notarized form, fingerprints) engender a high level of confidence to the certified name-key binding; and (iv) that are c apable of issuing Digital Certificates (including, without limitation, signing the Digital Certificate) to authenticate the binding between the subject (end user's) name and the subject's public key.



G. "Client-Based Lifelong Health Record" or "Client-Ba sed LHR" shall mean HMI's proprietary client-based version of LHR made up of: (i) proprietary interactive web-browser compatible pages, or other programs, which are installed and executed locally on an end user's computer and contain functionality enabli n g end users to retrieve, document, track and populate their own personal health information; and (ii) a local "Repository" that is installed and executed locally on the end user's computer and stores that end user's health data and such other information a s mutually agreed upon by the parties within ninety (90) days of the Effective Date (or failing mutual agreement through the binding arbitration procedure described in Part VII.11.D). The Client-Based LHR includes any Updates, Releases, new Versions, mod ifications or derivative works of the Client-Based LHR produced by HMI or on HMI's behalf.



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H. "Digital Certificate" shall mean a digital certificate as defined by the International Telecommunications Union ("ITU-T") X.509 standard, version 3. As a general matter, a Digital Certificate: (i) is a document attesting to the binding of a public key to an individual or other entity; (ii) enables the verification of a claim that a specific public key does in fact belong to a specific individual ; and (iii) contains information including version, serial number, signature algorithm ID, issuer name (i.e., the Certifying Authority that issued the Digital Certificate), validity period, subject (user) name, subject public-key information, issuer unique identifier, subject unique identifier, extensions and the signature of the Certifying Authority that issued the Digital Certificate on the foregoing. Digital Certificates are stored on the subject's (end user's) computer.



I. "Dr. Koop's Personal Medical Record" or "PMR" shall mean EHC's proprietary desktop application which includes, but is not limited to the Electronic Medical Record module.



J. "End Users" shall mean any hospitals, insurance companies or other entities (including their consumers) and individuals visiting the EHC Web Site.



K. "End-User Data" shall mean the information provided by end users or on behalf of end users, with their authorization, in the process of using LHR. Ownership of End-User Data shall in no way be altered by this Agreement.



L. "Health Talk Tool" shall mean HMI's proprietary underlying infrastructure that supports the construction of secure health applications that enable the sharing of sensitive information on the public Internet and World Wide Web. Key feature s enable a trusted identity for every person accessing sensitive information, the specification of security policies independent of the application, the optional generation of the applications that enforce the security policies, and the decentralized assi g nment of roles to employees of providers and health plans. Software deliverables include: (i) the Visual HealthTalk Studio that enables the entry of meta-data; (ii) the generator itself; (iii) a tool for building implementations; (iv) Test Suite 98; (v) an Administration Console; (vi) Charter Editor; and (vii) a Batch Enroller. The Health Talk Tool includes any and all Updates, Releases, new Versions, modifications or derivative works of the Health Talk Tool produced by HMI or on HMI's behalf.



M. "Health Vectors" shall mean, for any particular LHR end user, collections of health-related data that profiles such end user in his or her role as a health care consumer which data is generated through the use of the Health Vector software embedded i n the LHR. Different kinds of Health Vectors include, but are not limited to: (i) health and illness data (e.g., health status, symptoms, important diagnoses, most recent encounters, medications, recent treatments); (ii) interests and needs data (i.e., i n formation used and requested by the consumer); (iii) demographic data (e.g., name, mailing address, gender, age, race); (iv) registration data (e.g., plan identification, member identification and enrollment information); and (v) transaction data (i.e., a summary of the transactions encountered within the service by the end user).



N. "Health Vectors Tool" shall mean HMI's proprietary software development tool which enables the tailoring of user/computer interactions based on the user's profile. As of th e Effective Date the profile includes age, gender and health interests but the Health Vectors Tool is architected to profile many different dimensions each called a vector. Based on the specific health profile that is comprised of various health data, sc r eens are assembled that contain articles, Weblinks and Preventive Guidelines tailored to the individual for various sections of a Web service. Software deliverables include: (i) Content Attribute Studio; (ii) Active X DLL that represents the application; (iii) Health Vector Publisher; and (iv) the associated data base schema. The Health Vectors Tool includes any and all Updates,



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Releases, new Versions, modifications or derivative works of the Health Vectors Tool produced by HMI or on HMI's behalf.



O. "Health Tool Application" shall mean any application created using the Health Talk Tool or the Health Vectors Tool.



P. "Lifelong Health Record" or "LHR" shall mean the Web-Based LHR, EHC LHR (as defined in Part IV.3.B) and the Client-Based LHR.



Q. "Personal Medical Record" shall have the meaning provided in Exhibit D to this Agreement.



R. "Release Number" shall mean the second decimal place in the number assigned to any software by the supplier of such software (e.g., the Release Numb er of XYZ 6.1.23 would be 1). A new "Release" means a software upgrade that adds new features, corrects bugs or defects and in which the Release Number is incremented while the Version Number remains unchanged (e.g., XYZ 6.2.0 would be a new Release as c ompared to XYZ 6.1.23).



S. "Update Number" shall mean the third decimal place in the number assigned to any software by the supplier of such software (e.g. the Update Number of XYZ 6.2.23 would be 23). A new "Update" means a software upgrade that provid es bug fixes or other minor corrections in which the Version Number and Release Number remain unchanged and, if the number assigned to the software by the supplier, the Update Number is incremented (e.g. XYZ 6.1.24 would be a New Update as compared to XYZ 6.2.23).



T. "Version Number" shall mean the first decimal place in the number assigned to any software by the supplier of such software (e.g., the Version number of XYZ 6.2.23 would be 6). A new "Version" means a major software upgrade that adds substa ntial new features or other significant changes in which the Version Number is incremented (e.g., XYZ 7.0.0 would be a new Version as compared to XYZ 6.2.23).



U. "Web-Based Lifelong Health Record" or "Web-Based LHR" shall mean: (i) HMI proprietary inte ractive Internet-enabled pages which reside on HMI servers, that are accessible from HMI licensed web sites containing links to such pages through a digital certification process ("LHR Enabled Sites") (the EHC Web Site will be an example of such a web sit e ), and contain functionality enabling end users to retrieve, document, track and populate their own personal health information in a secure fashion from any LHR Enabled Site; and (ii) HMI's proprietary database or "Repository", housed on HMI's servers, th a t stores each end user's Health Vectors. The Web-Based LHR includes any and all Updates, Releases, new Versions, modifications or derivative works of the Web-Based LHR produced by HMI or on HMI's behalf. Supported Versions (as defined in Part IV.3.C(3)) of Web-Based LHR shall reside on servers specifically designated to HMI at a Third-Party Secured Site (as defined in Part IV.2.B).



________________________________________________________________________________ PART II. SALE OF ACQUIRED ASSETS



1. Sale, Assignment and Transfer of Acquired Assets to HMI



A. EHC hereby irrevocably sells, assigns and transfers to HMI all of EHC's right, title and interest in and to the Acquired Assets. This exclusive grant of rights shall include, but is not limited to , the rights to (i) offer, market, publish, reproduce, distribute, transmit, adapt, maintain, prepare derivative works, sell, license or otherwise make use of the Acquired Assets (including, without limitation, all subsequent



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editions, revisions, supplements to, and versions of the Acquired Assets, regardless of length, nature or state of development) throughout the world in any form or medium and in any language, and (ii) to license or otherwise transfer to othe rs the rights commensurate herewith in connection with the Acquired Assets.



B. As of the Effective Date, HMI shall have the right to obtain and hold in its own name any intellectual property rights in and to the Acquired Assets and all copies and deriva tive works made therefrom (which shall include, but not be limited to, the right to file patent, copyright and trademark applications in the U.S. and throughout the world for the Acquired Assets in the name of HMI). EHC hereby agrees that HMI may act as a t torney-in-fact to execute any documents that HMI deems necessary to record this grant with the U.S. Patent and Trademark Office, the U.S. Copyright Office or elsewhere. EHC agrees that it will execute any documents or take any other actions as may reason a bly be necessary, or as HMI may reasonably request, to establish, confirm and defend HMI's ownership of, and intellectual property rights in and to, the Acquired Assets and all copies and derivative works made therefrom. The cost of recording and registe ring ownership rights in the Acquired Assets shall be borne solely by HMI.



C. As of the Effective Date, EHC shall deliver to HMI a complete set of all complete and partial copies of the Acquired Assets in all forms (including, without limitation, source code and object code for software components). The source code for the Acquired Product delivered shall contain such code, libraries and other source components so that, when compiled, linked and otherwise manipulated to create the runtime/executable ima g e for the Acquired Product, creates a complete and fully operational run-time/executable version of the Acquired Product. Notwithstanding the foregoing, EHC shall not be required to deliver any third party software development tools and third party compo nents used in the creation of the Acquired Assets.



D. EHC reserves the right to request HMI to complete development of PMR in a commercially reasonable manner, pursuant to a client opportunity. In the event HMI elects to complete development of PMR purs uant to EHC's request, upon completion of development of PMR, HMI shall license use of PMR to EHC under the same terms as LHR under this Agreement (including, without limitation, the revenue sharing provisions set forth in Part VI which shall apply to PMR in the same manner as they apply to LHR). In the event HMI elects not to accept EHC's request, then HMI shall grant a license in and to PMR to EHC under commercially reasonable terms to complete PMR and use PMR, provided that such license shall be subjec t to revocation in the event EHC does not proceed in a commercially reasonable manner to meet the client opportunity.



2. Representations and Warranties by EHC



Except as otherwise disclosed in Exhibit C. EHC represents and warrants to HMI, as of the Effective Date, as follows:



A. EHC is the sole and exclusive legal and equitable owner of and holds good, clear and marketable right and title to the Acquired Product and Acquired Documentation including, without limitation, all Acquired Intellectual Property Rights in the Acquired Product and Acquired Documentation. The Acquired Assets are not subject to a license (other than the licenses contained in this Agreement) and are not subject to any lien, security interest, royalty obligation or other int e rest or claim of any kind. EHC has the sole right to bring actions for infringement of any Acquired Intellectual Property Rights in the Acquired Product and Acquired Documentation. Except for this Agreement, neither the Acquired Product, nor any Acquire d Documentation are subject to any escrow.



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B. EHC is a corporation duly organized and validly existing under the laws of Texas and the execution of this Agreement by EHC and the transactions contemplated by this Agreement have been authori zed by all necessary corporate action on the part of EHC and neither the execution of this Agreement by EHC, nor the transactions contemplated by this Agreement, nor compliance by EHC with any of its provisions, violates any judgment or order of any court , arbitrator, or administrative agency applicable to EHC or any of its properties or assets.



C. To the best of EHC's knowledge, there are no pending or threatened disputes or controversies with EHC's suppliers, customers, consultants, distributors and ot hers having business relations with EHC relating to the Acquired Assets, nor any valid basis for a dispute.



D. To the best of EHC's knowledge, there are no suits, proceedings, or investigations pending or threatened against EHC before any court, arbitra tor or agency based upon or challenging the ownership or use of the Acquired Assets, including claims for breach of warranty or products liability. There is no judgment or order entered against EHC which might have a material adverse effect on the value of the Acquired Assets to HMI. No third party is asserting the invalidity of this Agreement or seeking to prevent any of the transactions contemplated by this Agreement.



E. Neither the execution by EHC of this Agreement, nor compliance by EHC with its t erms and conditions will (a) conflict with, or result in a breach or violation of any provision in the documents under which EHC is incorporated, any award of any arbitrator in a matter as to which EHC is a party, or any other agreement or U.S. Government regulations relating to prohibitions on transfer or export of technology to which EHC is subject, or (b) result in the creation of any lien upon the Acquired Assets. EHC is not a party to, or otherwise subject to any provision contained in any agreement w hich restricts or otherwise limits the transfer of the Acquired Assets (including, but not limited to, any loan agreement). EHC is not a party to any license (other than the licenses contained in this Agreement), joint venture or similar affiliation invo lving the Acquired Assets.



F. To the best of EHC's knowledge: (a) The Acquired Assets (including all Acquired Intellectual Property Rights) and the marketing, reproduction or use of the Acquired Assets do not infringe upon any patent, copyright, tradema rk, trade secret or other proprietary right of any third party; (b) no proceedings have been instituted, are pending or are threatened which challenge the rights of EHC under or the validity of the Acquired Intellectual Property Rights; (c) none of the Ac q uired Intellectual Property Rights is being infringed upon by others; and (d) without regard to EHC's knowledge, none of the Acquired Intellectual Property Rights is subject to any outstanding order or judgment. EHC has taken all steps reasonably necessa r y to protect the Acquired Intellectual Property Rights in the Acquired Assets, including, but not limited to, utilization of the proper statutory form of copyright notice on all copies of the Acquired Product and Acquired Documentation commercially distri buted prior to the Effective Date. The representations and warranties set forth in this Part II.2.F (a) shall survive termination or expiration of this Agreement for injuries which arose prior to termination or expiration.



G. (a) No source code included in the Acquired Product or Acquired Documentation has been disclosed to any third party by EHC or any EHC representative, agent or partner; and (b) any EHC employee, who has been directly involved in the development of the Acquired Product and Acquired Do cumentation has executed a confidentiality and nondisclosure agreement covering the source code and other non-public information contained in the Acquired Product and Acquired Documentation.



H. The set of materials provided to HMI by EHC pursuant to Part II.1.C constitutes a complete set of all full and partial copies of the Acquired Assets in all forms (including, without limitation, source



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code and object code for software components) that EHC owns, to the best of EHC's knowledge, as of the Effective Date.





________________________________________________________________________________ PART III. LICENSE TO HMI PRODUCTS



1. License



A. Except as set forth in Part VI.1, HMI hereby grants EHC a ninety-nine (99) year, nonexclusive, nontransferable, world-wide and fully paid-up right and license commencing on the Effective Date: (i) to use, copy, as well as offer and distribute to End Users under HMI's standard license, so l ely in conjunction and integrated with EHC's software medical applications and services, the Client-Based LHR (including the Client-Based EHC LHR and upon their initial release); (ii) to use, copy and display in a manner "framed" by or "embedded" within t h e EHC Web Site content, as well as offer and distribute to End Users under HMI's standard license terms, solely in conjunction and integrated with EHC's Web Site, the Web-Based LHR (including the Web-Based EHC LHR and upon their initial release); and (ii i ) to use internally in its own business, copy, (as well as use to develop, offer and distribute, under EHC's standard license, Health Tool Applications), the Health Talk Tool and the Health Vectors Tool; provided, however, EHC may not develop or contract f or the creation of Health Tool Applications that, in the reasonable discretion of HMI, compete with the Health Talk Tool or the Health Vectors Tool. HMI hereby grants to EHC the same licenses to the manuals related to LHR, solely for use with the LHR (t he "LHR Documentation"). This license includes any and all Updates, Releases and new Versions of LHR, Health Talk Tool and Health Vector Tool that may be provided to EHC from time to time.



B. HMI shall submit the standard licenses for EHC End Users refe renced in Part III.1.A (i) and (ii) to EHC for review and approval, which approval shall be not unreasonably withheld or delayed. EHC shall submit its standard license referenced in Part III.1.A (iii) to HMI for review and approval, which approval shall be not unreasonably withheld or delayed.



C. EHC acknowledges and agrees that HMI represents that the LHR, Health Talk Tool, Health Vectors Tool, and related materials ("HMI Materials") are owned by and shall remain the sole property of, HMI, that the HMI Materials contain, embody and are based on patented or patentable inventions, trade secrets, copyrights and other intellectual property rights (collectively, "IP Rights") owned or controlled by HMI and that HMI shall continue to be the sole owner of all I P Rights in and to the HMI Materials, including, without limitation, any derivative works of the HMI Materials produced by HMI or on HMI's behalf. EHC agrees that it will provide all reasonable cooperation and assistance to HMI, at HMI's expense, in taki n g any action necessary or appropriate to establish, confirm and defend HMI's IP Rights, including, without limitation, the preparation, filing and prosecution of patent, copyright and trademark applications and the offering of testimony and other support in connection with any legal proceedings brought by or against HMI relating to HMI's IP Rights.



D. EHC agrees not to modify, translate, reverse engineer, decompile, disassemble or extract, as applicable, any ideas, algorithms or procedures from the whole or any part of the HMI Materials for any reason and shall include this restriction in all relevant agreements with third parties, (including but not limited to license agreements and consulting agreements) relating to the HMI Materials.



E. EHC agrees to reproduce and include HMI's copyright, trademark, and other proprietary rights notices on any copies of the HMI Materials and the LHR Documentation, including partial copies and copied materials in derivative works.



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