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Master Software License Agreement

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EXHIBIT 10.2(i)


MASTER SOFTWARE LICENSE


This Master Software License (the "Agreement") is made and entered into as of the 29th day of June, 1992 (the "Effective Date"), by and between Health Care microsystems, Inc. (the "Licensor"), a California corporation having its principal place of business at 3655 Torrance Boulevard, Suite 350, Torrance, California 90503, and Healthtrust, Inc. The Hospital Company (the "Licensee"), a Delaware corporation having its principal place of business at 4525 Harding Road, Nashville, Tennessee 37205.


WHEREAS, Licensor desires to license to Licensee certain Software (defined below) and Documentation (defined below);


WHEREAS, Licensee desires to acquire from Licensor a perpetual, non-exclusive, paid-up, royalty-free, worldwide license for the Software and the Documentation and to sublicense the Software and the Documentation to health care providers owned or operated by or affiliated with Licensee; and


WHEREAS, Licensee desires to have Licensor perform software support and maintenance services in connection with the Software and the Documentation and Licensor desires to perform such services pursuant to the terms and conditions contained herein.


NOW, THEREFORE, in consideration of the mutual premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:


1. Definitions


1.1 "Affiliated User" is defined to include any hospital, clinic or other health care provider that Licensee operates or in which Licensee holds a 50% or greater equity interest. 2


1.2 "Documentation" is defined to include any user manuals, training materials, specifications and other material related to the Software.


1.3 "Software" is defined as the software furnished by Licensor to Licensee, including any related interfaces and any custom software, as more fully described in Schedule A annexed hereto, which is incorporated herein by reference.


2. Software License


2.1 Licensor hereby grants to Licensee, subject to the terms and conditions hereinafter set forth, a perpetual, non-exclusive, royalty-free, worldwide license to use the Software, and to sublicense use of the Software to Affiliated Users in accordance with the terms and conditions of license agreements in the form attached hereto as Exhibit 1 (the "User License Agreements"), solely for the data processing needs of Licensee and Affiliated Users, including without limitation Licensee's operation of a central data center. The license granted hereunder includes without limitation the right to reproduce or copy all or any portion of the Software in machine-readable or printed form as determined by Licensee to be reasonably required for its own internal data processing needs and archival and backup purposes, and to copy and distribute run units of the Software for use by Affiliated Users that sublicense the Software under User License Agreements. Except as provided in this Section 2.1 and in Section 15, the license granted hereunder shall be nontransferable. Subject to Section 18, the license granted hereunder shall be terminable in the event that Licensee fails to make any payment when due of the license fees in accordance with Schedule A.


2.2 Licensee acknowledges that portions of the Software licensed under this Agreement are owned by Micro Data Base Systems, Inc. ("MDBS"), Programmed Intelligence, Inc. ("PI"), or Information Resources, Inc. ("IRI"). Licensee further acknowledges that the MDBS, PI and IRI portions of the Software may not be used by Licensee as stand-alone software products, but only as component parts of the Software.


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2.3 The license for the Software and the Documentation granted hereunder and the terms and conditions of this Agreement shall cover all custom software and related documentation developed on a time-and-materials or flat-fee basis by Licensor at Licensee's request.


3. Documentation License


Licensor hereby grants to Licensee a perpetual, non-exclusive, royalty-free, worldwide license to use the Documentation in conjunction with Licensee's use of the Software and to sublicense use of the Documentation to Affiliated Users in conjunction with Affiliated Users' use of the Software. Licensor will be the primary source for the Documentation, but, as a convenience, Licensor further grants Licensee the right to reproduce and distribute copies of the Documentation for its own use and for use by Affiliated Users. In the event Licensee exercises the right to reproduce and distribute copies of the Documentation or any portion thereof, such copies shall include Licensor's copyright notices; provided, however, that this provision shall not apply to de minimus copying for the personal convenience of employees of Licensee or Affiliated Users. The Documentation shall be furnished to Licensee in printed form, and shall consist of all user manuals, training materials and specifications for the Software. Subject to Section 18, the license granted hereunder shall be terminable in the event that Licensee fails to make any payment when due of the license fees in accordance with Schedule A.


4. License Fee, Taxes and Expenses; Delivery


4.1 As consideration for the perpetual license to use and to sublicense use of the Software and the Documentation granted to Licensee herein, Licensee shall pay to Licensor a one-time license fee in the amount and payable in accordance with the payment schedule set forth in Schedule A.


4.2 Licensee shall pay all sales, use and personal property taxes assessed in connection with this Agreement and each Affiliated User shall be responsible for any sales, use and


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personal property taxes assessed in connection with its User License Agreement; provided, however, that Licensor shall pay all taxes based on Licensor's business operations (including without limitation employment taxes and taxes levied on Licensor's income).


4.3 Licensee shall reimburse Licensor at Licensor's cost for its reasonable and necessary direct out-of-pocket expenses incurred in connection with Licensor's performance hereunder, including without limitation long-distance toll charges, overnight courier charges and postage. If Licensor travels to Licensee's site in connection with Licensor's performance under this Agreement and such travel is approved in advance by an authorized representative of Licensee, Licensee shall reimburse Licensor for Licensor's reasonable and necessary expenses at cost. Licensee shall be invoiced monthly in arrears for all such expenses and payments shall be due within 30 days of Licensee's receipt of such invoices; provided, however, that Licensee shall have no obligation to reimburse Licensor for any such expenses not invoiced within 180 days of the date incurred by Licensor.


4.4 Licensor shall pay all freight, shipping and handling costs for delivery of the Software and the Documentation and shall bear all risk of loss, including any insurance costs; provided, however, Licensee shall reimburse Licensor for freight, shipping and handling costs in accordance with the terms of Section 4.3 upon delivery and acceptance of the Software and Documentation.


5. Affiliated User License and Fees


5.1 Licensor agrees that Licensee may sublicense the Software and the Documentation for use by any Affiliated User that executes a User License Agreement.


5.2 Licensee shall pay Licensor sublicense fees on behalf of each Affiliated User that executes a User License Agreement for the Software and the Documentation as determined in accordance with the price schedule set forth in Schedule A.


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5.3 The Software shall not be used to process the data of an Affiliated User until a User License Agreement has been entered into with that Affiliated User.


6. Source Code


6.1 Licensor has not provided Licensee with a copy of, and Licensee acquires no rights of any kind with respect to, the Software source code except as provided herein. In the event of Licensor's discontinuance of or failure in material respects to provide support and maintenance services for the Software pursuant to the terms and conditions of this Agreement or any other existing agreement with Licensee, or Licensor has otherwise defaulted under this Agreement or other agreement related to the Software, Licensor shall deliver to Licensee a copy of the Software source code for the current version of the Software and all internal documentation related thereto (including a list of and information regarding how to license third-party software used to develop or maintain the Licensed Software).


6.2 In the event Licensee determines that Licensor has failed in material respects to provide support and maintenance services for the Software or has otherwise defaulted as described in Section 6.1, Licensee shall provide Licensor with written notice describing in reasonable detail the reasons for Licensee's determination and an opportunity for 30 days after Licensor's receipt of such notice for Licensor to cure the material failure or default as described by Licensee. The pendency of a dispute regarding such a material failure or default shall not entitle Licensee to receive a copy of the Software source code and related documentation.


6.3 Subject to the foregoing, Licensor hereby grants Licensee a license to use such source code and related documentation in order to maintain and modify the Software licensed by Licensee and sublicensed by Affiliated Users. Licensor hereby acknowledges Licensee's and Affiliated Users' right to participate in a user's support group with other users of all or part of the Software.


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6.4 Upon delivery of the source code and related documentation to Licensee, Licensor's support and maintenance obligations hereunder shall terminate; provided, however, that delivery of the source code and related documentation to Licensee shall not affect Licensee's obligation to pay Licensor sublicense fees under Section 5.2. If the source code is delivered to Licensee as a result of a notice by Licensee under Section 6.2, delivery of the source code shall constitute Licensee's sole remedy for claims related to support and maintenance services hereunder.


7. Hardware


Licensee is responsible for providing computer equipment and operating system software (collectively, the "Hardware") that conforms with Licensor's specifications as set forth in Schedule B annexed hereto, which is incorporated herein by reference, as may be modified by mutual consent of the parties from time to time. Licensee acknowledges that a parallel printer port must be available for use in connection with security mechanisms that may be provided by Licensor.


8. Licensor's Warranties


8.1 Ownership and Quiet Enjoyment. Licensor hereby warrants and represents to Licensee and Affiliated Users that Licensor owns all right, title and interest in and to the Software and the Documentation or otherwise has the right to grant to Licensee the license to use and to sublicense same as set forth in this Agreement without violating or infringing upon any rights of any third party and without breach of any third-party license to Licensor, and there is currently no actual or threatened suit by any third party based on an alleged violation, infringement or breach by Licensor. Use of the Software and the Documentation in accordance with this Agreement and any User License Agreement shall not be disturbed or interfered with during the continuation of the license granted hereunder except as provided in Section 10.2.


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8.2 For any period during which Licensee maintains support and maintenance of the Software through Licensor as set forth in Section 9, Licensor further warrants and represents to Licensee and Affiliated Users as follows:


(a) Software Operation. The Software and each module or component thereof shall operate on the Hardware and shall perform substantially in accordance with the Documentation and pages 36-59 of Licensor's proposal dated June 7, 1991, attached hereto as Exhibit 2; provided, however, if Licensee or an Affiliated User makes an unauthorized modification to the Software, then this warranty shall terminate with respect to such Licensee or Affiliated User.


(b) Performance Standards. Each of Licensor's employees, agents or representatives assigned to perform services hereunder shall have the proper skill, training and background so as to be able to perform in a competent and professional manner and all work will be so performed in a manner compatible with Licensee's or each Affiliated User's business operations at its premises.


8.3 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, LICENSOR DOES NOT MAKE AND EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES WITH RESPECT TO THE SOFTWARE, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.


9. Master Software Support and Maintenance


9.1 Licensor shall promptly notify Licensee of any defects or malfunctions in the Software or the Documentation of which it learns from any source. Licensor shall use its best efforts reasonable under the circumstances to correct any material defects or malfunctions in the Software or the Documentation and provide Licensee and Affiliated Users with corrected copies of same in accordance with a schedule to be mutually agreed to by the parties. Licensor's obligation hereunder shall not affect any other liability that it may have to Licensee or Affiliated Users.


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9.2 Licensor shall provide to Licensee and Affiliated Users copies of the Software and the Documentation made generally available to its customers and reflecting any enhancements to the Software and the Documentation made by Licensor. Such enhancements shall include without limitation all modifications to the Software that increase the speed, efficiency or ease of operation of the Software, or add additional capabilities to or otherwise improve the functions of the Software, but shall not include new products that bring substantial new functionality to the Software.


9.3 Licensor shall use its best efforts reasonable under the circumstances to cause the Software to operate as warranted in Section 8.2(a) and shall provide one copy of any updated release of the Software, or part thereof, to Licensee and Affiliated Users which Licensee and Affiliated Users may copy in the appropriate quantity and substitute for a prior release. In addition, Licensor shall provide published bulletins describing new releases, maintenance releases, temporary problem resolutions and circumventions, support level changes and other information with respect to the Software, which updated releases Licensee and Affiliated Users may obtain at no additional cost, except for Licensor's then applicable mailing and media charges plus any reasonable costs as the parties may mutually agree related to installation of such releases.


9.4 Licensor shall commit the resources of at least one full-time employee to respond to any request by Licensee to correct any failure of the Software to perform as warranted in Section 8.2(a), within a period of 48 hours after Licensee provides reasonably detailed notice of such failure. Licensor shall use its best efforts promptly to remedy any such failure of the Software, either by providing a permanent fix or replacement to the Software or by providing a temporary work around.


9.5 Subject to the provisions of Schedule A, Section V.2.a., whereby Licensee may earlier terminate the services described in this Section 9, Licensor shall provide the Software support and maintenance services described in this Section 9 for the charges set forth in Section 9.6 below for a five-year period commencing upon the Effective Date of this Agreement (the "Initial Term"), and, upon expiration of the Initial Term, shall continue


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to provide such services on a year-to-year basis unless, no less than six months prior to the expiration of the Initial Term or 60 days prior to the expiration of any one-year renewal term, either party gives the other party written notice of the notifying party's desire to:


(a) renegotiate the terms and conditions of this Agreement related to Licensor's Software support and maintenance services, provided that if an agreement on new terms is not reached prior to the expiration of the applicable term, Licensor's Software support and maintenance services shall be deemed terminated in accordance with Section 9.5(b); or


(b) terminate Licensor's Software support and maintenance services, provided, however, that if either party determines to terminate such services, termination shall be subject to a two-year wind-down period (the "Wind-down Period") commencing on the date the expiration of the Initial Term or the renewal term is effective, which shall be subject to the following additional terms and conditions:


(i) During the first year of the Wind-down Period, the terms
of this Agreement related to Software support and maintenance
services shall remain in effect and Licensee may elect on behalf of
Affiliated Users to discontinue Licensor's Software support and
maintenance services to up to five Affiliated Users;


(ii) During the second year of the Wind-down Period, the terms
of this Agreement related to Software support and maintenance
services shall remain in effect and Licensee may elect on behalf of
Affiliated Users to discontinue Licensor's Software support and
maintenance services to up to one-half the number of Affiliated
Users that are receiving such services as of the first day of the
second year of the Wind-down Period; and


(iii) Licensee shall have no obligation to pay for and Licensor
shall have no obligation to provide any Software support and
maintenance services after the expiration of the Wind-down Period.


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9.6 During the term of Licensor's software support and maintenance services, Licensee shall pay to Licensor an annual support and maintenance fee in accordance with the terms set forth in Schedule A. At any time after the expiration of the first year of the Initial Term, Licensor's software support and maintenance fees shall be subject to annual increases, provided that Licensor provides Licensee with written notice of any such increase at least 90 days prior to the expiration of each one-year period. Annual increases shall in no event exceed the lesser of: (i) a percentage increase equal to two and one-half percent (2 1/2%) plus the percentage increase in the Consumer Price Index for Urban Consumers, All Cities Average, For all Items (1984-1986 = 100), as published by the Bureau of Labor Statistics of the United States Department of Labor during the most recent twelve-month period for which such figures are available; or (ii) ten percent (10%).


9.7 If Licensor travels to Licensee's or an Affiliated User's site and such travel is approved in advance by an authorized representative of Licensee, Licensee shall reimburse Licensor for its reasonable and necessary expenses at cost. Licensee shall be invoiced monthly in arrears for all such expenses and payments shall be due within 30 days of Licensee's receipt of such invoice; provided, however, that Licensee shall have no obligation to reimburse Licensor for any such expenses not invoiced within 180 days of the date incurred by Licensor.


9.8 (a) Licensee agrees that all enhancements to the Software furnished by Licensor pursuant to this Agreement shall be installed within six months of Licensee's receipt of any such enhancements, provided that if Licensor is responsible for installation, Licensor shall cooperate with Licensee to install the Software within such time period. As mutually agreed by the parties at such time as enhancements are provided, either Licensee shall install the enhancements or Licensee shall engage Licensor to install the enhancements at its standard hourly rate for software installation services.


(b) Licensee agrees to provide Licensor with sufficient support and test time on Licensee's or an Affiliated User's computer system to duplicate a reported problem, certify that the problem is with the Software, and certify that the


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problem has been corrected, and to otherwise reasonably cooperate with Licensor in connection with Licensor's support and maintenance services.


(c) As long as Licensor is providing support and maintenance services to Licensee, Licensee shall install and maintain a 1200 or 2400 baud modem and associated dial-up telephone line. Licensee shall pay for installation, maintenance and use of such equipment and associated telephone line-use charges. Licensor, at its option, shall use this modem and telephone line in connection with error correction, installation of enhancements and assistance to Licensee in connection with its use of the Software. Such access by Licensor shall be subject to prior approval by Licensee in each instance. As long as Licensor is providing support and maintenance services to Licensee, Licensee shall also install and maintain a tape backup system that conforms to the specifications set forth in Schedule B to be used for regular tape backups by Licensee and transfer of data and Software updates between Licensee and Licensor.


(d) Except as authorized by Section 6, Licensee shall not modify or attempt to modify the Software without the prior written consent of Licensor.


(e) Licensee agrees that any copies of the Software or the Documentation that it makes pursuant to this Agreement shall bear all copyright, trademark and other proprietary notices included therein by Licensor and, except as expressly authorized herein, Licensee shall not distribute same to any third party without Licensor's prior written consent.


9.9 The Software support and maintenance fees, stated in Schedule A, Section V., are subject to mutually acceptable adjustment to be negotiated by the parties in the event:


(a) Licensee assumes support obligations for the Affiliated Users but in so doing fails to: (i) provide a level of staffing for the assumed obligations consistent with the level of staffing previously provided by Licensor or (ii) staff its Affiliated User support function with persons trained by Licensor or otherwise determined by Licensor to be qualified and Licensor's


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cost in providing the Software support described in this Section 9, as measured by the average number of calls made by the Licensee and Affiliated Users to Licensor's corporate support center for such support versus the volume of calls to such center prior to Licensee's assumption of support obligations for the Affiliated Users, does not increase significantly due to Licensee's assumption of such obligations; or,


(b) the parties mutually agree to add more application software programs or interfaces to the Software described in Schedule A.


10. Limitations of Liability


10.1 Except as provided in Section 16, Licensor shall have no liability for consequential, exemplary, indirect, special or incidental damages, whether based on contract, tort or any other legal theory, arising out of or related to this Agreement or the transactions contemplated herein, nor shall Licensor be liable for any loss of data or lost profits of Licensee, or for any amount in excess of the license fees paid to Licensor by Licensee under this Agreement, even if Licensor is apprised of the likelihood of such damages occurring.


10.2 Subject to Licensor's obligations under Section 16.2, in the event that the use of the Software or any portion thereof is held by a court of competent jurisdiction to infringe or constitute the wrongful use of any third party's proprietary rights and Licensee's right to use the Software is enjoined, or if Licensor in the reasonable exercise of its discretion instructs Licensee to cease using the Software in order to mitigate potential damages arising from a third party's claim that use of the Software infringes on its rights, Licensee shall cease using the Software. In either event (other than by reason of a temporary restraining order not exceeding 30 days), Licensor shall (i) replace the Software with equally suitable non-infringing software, (ii) modify the Software so that its use by Licensee as permitted hereunder ceases to be infringing or wrongful, (iii) procure for Licensee the right to continue using the Software as permitted hereunder, or (iv) after reasonable efforts under clauses (i), (ii) and (iii) of this sentence, refund to Licensee a


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pro rata portion of the license fee as follows: (I) within one year of the Effective Date, 100%; (II) for the second one-year period following the Effective Date, 80%; (III) for the third one-year period following the Effective Date, 60%; (IV) for the fourth one-year period following the Effective Date, 40%; or (V) during the period running from the fourth anniversary through the tenth anniversary of the Effective Date, if Licensee continues to receive Software support and maintenance services from Licensor pursuant to Section 9, 20%.


10.3 Other than as expressly contained in Sections 16.2 and 10.2, Licensor shall have no liability whatsoever to indemnify Licensee for any loss or damage arising out of or related to any allegation or determination that Licensee's use of the Software as permitted hereunder infringes or constitutes wrongful use of any proprietary right.


11. Title to Software and Documentation


The Software and the Documentation provided hereunder and all copies thereof are proprietary to Licensor and title thereto remains in Licensor (or in third parties who have licensed any part of the Software to Licensor). Other than the rights in and to the Software and the Documentation granted to Licensee hereunder, Licensee acquires no rights in the Software or the Documentation, including patents, copyrights, trademarks, and trade secrets, if any, embodied therein. Licensee acknowledges that Licensor claims that the Software contains valuable proprietary information and trade secrets developed or acquired by Licensor. Licensee agrees to secure and protect the Software and the Documentation and copies thereof in a manner consistent with the maintenance of Licensor's rights therein and to take reasonable action by instruction or agreement with its employees or independent contractors who are permitted access to the Software and the Documentation to satisfy its obligations hereunder.


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12. Confidentiality


12.1 "Confidential Information" is defined to include the identity of patients, the content of any medical records, financial and tax information, information regarding Medicare and Medicaid claims submission and reimbursements, the object and source codes for the Software, the Documentation, and such other information so designated in writing prior to disclosure by the party claiming that the information to be disclosed is confidential or proprietary business information.


12.2 The party receiving th
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