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EXHIBIT 10.19
COURSEWARE DEVELOPMENT AGREEMENT
This Courseware Development Agreement ("Agreement"), is entered into as
of January __, 2000 ("Effective Date") between e-Vitro, Inc., a Colorado
corporation, with its principal place of business at 000 Xxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxx, Xxxxxxxx 00000 ("Developer") and HealthStream, Inc., a Tennessee
corporation, with its principal place of business at 000 00xx Xxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000 ("HealthStream").
WHEREAS, HealthStream wishes to engage the services of Developer to
develop browser-based interactive training modules;
WHEREAS, HealthStream and Developer wish to provide appropriate
consideration for those efforts that each party has agreed to undertake;
WHEREAS, as part of the consideration for those efforts, Developer and
HealthStream have agreed to enter into a certain Warrant to Purchase Common
Stock of Developer of even date herewith (the "Warrant");
WHEREAS, HealthStream and Developer each acknowledge the sufficiency
and adequacy of the value, concessions, and recitations set forth herein;
NOW THEREFORE, HealthStream and Developer agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings assigned below:
A. "Content" shall mean the material and knowledge components to be
contributed by HealthStream and other entities as determined by HealthStream
("HealthStream's Content Partners") necessary for the development of the
modules. Content includes the procedural sequences, standard operating
procedures, photographs, videos, instruction manuals and screen images supplied
by HealthStream and HealthStream's Content Partners to Developer for
incorporation into the modules defined hereafter.
B. "Interactive Content" shall mean Developer's computer browser-based
adaptation and implementation of the Content for delivery through HealthStream's
Training Navigator(R) (or T.NAV(R)) System.
C. "Modules" shall mean Interactive Content that has been organized
into a clearly defined and limited course of study equaling no fewer than one
hundred twenty (120) browser-based screens. Modules may be comprised of
disparate Content subjects equaling no fewer than one hundred twenty (120)
browser-based screens. Subject to Developer's reservation of rights as specified
in Section 3.1 herein, Modules are the proprietary property of HealthStream.
SECTION 2. COURSEWARE DEVELOPMENT
2.1 Courseware Development.
A. Developer hereby agrees to develop Interactive Content into no
fewer than forty (40) Modules or a combination of browser
screens that would equal forty (40) Modules according to the
Quality Criterion outlined in Section 2.1.B below,
(collectively, the "Courseware").
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B. Developer agrees to develop all Courseware at a level of
quality and interactivity substantially equal to or greater
than those courses developed by HealthStream for the Cleveland
Clinic Foundation. Developer also agrees to develop the
Courseware so that it may function and work with
HealthStream's T.NAV System. Such criterion for the Courseware
shall be known as the "Quality Criterion." HealthStream shall
not be obligated to pay for any Courseware unless HealthStream
reasonably believes the Quality Criterion has been satisfied.
C. Developer agrees to develop Content into Courseware and
deliver completed Courseware to HealthStream no later than
sixty (60) days following receipt of the Content from
HealthStream.
D. Both parties will ensure that resources from both parties will
be allocated to accomplish the development of the Courseware
in a timely fashion. Developer shall provide HealthStream with
a weekly status update of the development of the Courseware.
E. The Modules will be developed in "Alpha" and "Beta" test
phases (each, a "Phase"). Upon completion of a Phase,
Developer shall provide notice to this effect to
HealthStream (the "Completion Notice"). Within ten (10) days
after the receipt of the Completion Notice by HealthStream;
Developer and HealthStream shall consult and cooperate with
each other to determine whether the subject Module
substantially conforms with the applicable Quality Criterion
at such Phase. In the event HealthStream determines in its
reasonable discretion that the Module does not substantially
conform with the applicable Quality Criterion, HealthStream
shall provide written notice to Developer within such ten
(10) day period containing a description of the failure to
conform (the "Defect Notice"). Within twenty (20) days after
its receipt of the Defect Notice, Developer shall make such
corrections or modifications as may be necessary for the
subject Module to substantially conform with the applicable
Quality Criterion. Within ten (10) days after the date the
corrections or modifications are made, HealthStream shall in
its reasonable discretion make a determination about whether
such corrected or modified Module substantially conforms
with the applicable Quality Criterion. In the event
HealthStream determines such corrected or modified Module
substantially conforms with the applicable Quality
Criterion, HealthStream shall provide written notice of
acceptance of the Module. In the event such corrected or
modified Module does not substantially conform with the
applicable Quality Criterion, the procedure for correction
and modification provided for in this Subsection shall be
repeated until such time as the Module substantially
conforms with the applicable Quality Criterion. In the event
HealthStream fails to deliver a Defect Notice to Developer
within the period specified in this Subsection, HealthStream
shall be deemed to have made acceptance of such Module.
2.2. Courseware Development Fee. Upon execution of this Agreement,
HealthStream shall pay to Developer Ninety Five Thousand and No/100ths Dollars
(US$95,000). Upon delivery to HealthStream of a completed Module and upon
HealthStream's reasonable determination that the Module satisfies the Quality
Criterion, HealthStream shall pay to Developer Ten Thousand and No/100ths
Dollars (US$10,000.00) per completed Module. HealthStream is responsible for any
and all taxes, other than income, applicable to or in connection with the
services rendered by Developer.
2.3. Expenses. Upon the submission of invoices by Developer,
HealthStream shall reimburse Developer for reasonable travel, room, and board
expenses incurred by Developer in connection with its performance of the
services provided for in this Agreement.
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SECTION 3. INTELLECTUAL PROPERTY OWNERSHIP.
3.1. HealthStream's Retained Rights. The Courseware is a "work made for
hire," and Developer's work on the Courseware has been specially ordered by
HealthStream and will be developed under HealthStream's direction and control.
Developer's work on the Courseware is derivative of HealthStream's previous work
and merely a contribution to HealthStream's collective work. HealthStream is the
sole author of the Courseware, its contents, and any work embodying or derived
from any portion of the Courseware. HealthStream is also the owner of the
Courseware and all intellectual property rights related to the Courseware, and
to the extent that the Courseware is not properly characterized as "work made
for hire," or to the extent that Developer has rendered any Courseware design
services on behalf of HealthStream prior to the date of this Agreement, then
Developer will irrevocably grant, assign, and otherwise transfer, and hereby
does irrevocably grant, assign, and transfer, exclusively and in perpetuity to
HealthStream, its successors and its assigns, all intellectual property rights
and other rights of Developer in the Courseware whatsoever, now existing or
hereafter discovered, in all media and forms of expression. The provisions of
this Section shall not have application to any methods, processes, technology,
approaches, know-how, development tools, or third-party software (with respect
to which Developer is unable to make a transfer) which are used in connection
with, or incorporated in, the Courseware, and all of the foregoing, together
with any proprietary rights associated with any of the foregoing, shall be
exclusively owned by the Developer.
3.2. Reproduction, Derivation, Performance and Display Rights.
Developer grants, assigns and otherwise transfers exclusively and in perpetuity
to HealthStream, its successors and its assigns, any right Developer may have to
reproduce, make derivative works, publicly perform or publicly display the
Courseware, and the right to license or sublicense the Courseware, or any
portion thereof; provided, however, subject to section 4.2 herein, HealthStream
acknowledges and agrees that Developer may without restriction develop,
distribute, and use computer software and courseware that is similar to the
Courseware and has the same intended functionality as the Courseware, regardless
of whether such computer software or courseware is competitive with the
Courseware or provided to competitors of HealthStream.
SECTION 4. CONFIDENTIAL AND PROPRIETARY INFORMATION.
4.1. Confidentiality. HealthStream and Developer acknowledge that they
have been and will be in a confidential relationship with each other, and that
they have each gained and will gain knowledge that comprises valuable trade
secrets and other confidential information of the other party (collectively, the
"Confidential Information"), which is the exclusive property of the other party,
including, without limitation, customer data, sales and marketing data and
strategies, technical information, and data concerning financial and educational
institutions. Each party agrees that it will not disclose any of the other
party's Confidential Information, nor will either party take any action that
might reasonably be expected to lead to such disclosure, both during the term of
this Agreement and thereafter. Each party agrees that it will not use any of the
other party's Confidential Information, nor will either party take any action
that might reasonably be expected to lead to such use, both during the term of
this Agreement and thereafter, except for the purposes of this Agreement.
4.2. Non-Competition. Developer agrees that, during the term of this
Agreement and for a period of one (1) year following termination or expiration
of this Agreement, Developer shall not design or develop, or render design or
development services to third parties with respect to any products having
subject matter that is so similar to the Modules or Courseware developed
pursuant to the terms of this Agreement that such product would directly compete
with the Modules or the Courseware. Because HealthStream's business is
accessible on the worldwide web, Developer agrees that this non-competition
provision will apply worldwide, and that this worldwide scope is reasonable.
4.3. Specific Performance. Developer acknowledges and agrees that the
performance of the obligations under this Section 4 is special, unique and
extraordinary in character. In addition to such other rights and remedies that
HealthStream may have at equity or law with respect to any breach by Developer
of any of the provisions of this Section 4, HealthStream shall have the right
and remedy to have such
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provisions specifically enforced by any court of competent jurisdiction or to
enjoin Developer from performing any act taken by Developer in violation of this
Section 4. Developer acknowledges and agrees that any such breach or threatened
breach will cause irreparable injury to HealthStream and its business and that
money damages will not provide an adequate remedy to HealthStream.
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SECTION 5. WARRANTIES AND REPRESENTATIONS
A. Developer warrants and represents that:
A. All of the services Developer performs under this Agreement
will be performed in a professional and workmanlike manner,
consistent with generally accepted industry standards, using
properly trained personnel.
B. Developer has all requisite power, authority and legal right
to execute, deliver and perform its obligations under this
Agreement and all of such actions have been duly and validly
authorized by all necessary proceedings on the part of
Developer.
C. No authorization, consent, approval, license, permit,
exemption or other action by, and no registration,
qualification, designation, declaration or filing with any
governmental authority is or will be necessary in connection
with the execution of this Agreement.
D. Developer will substantially comply with all applicable laws
and regulations in the performance of its obligations under
this Agreement
E. The execution and delivery of this Agreement by Developer
does not and will not: (a) materially violate any applicable
law; or (b) conflict with or result in a material breach of
or default under any agreement or instrument to which
Developer is a party or by which any of its properties is
bound.
F. There is no pending action, suit or threatened proceeding by
or before any governmental authority against Developer that
in any way affects Developer's ability to enter into this
Agreement or perform any of Developer's obligations
hereunder.
G. To the best of Developer's knowledge, and as applicable,
ability, Developer's work shall not (a) impair or infringe
on the intellectual property rights of any third party or
any rights of publicity or privacy; (b) violate any law,
including without limitation, the laws and regulations
governing export control, unfair competition,
antidiscrimination or false advertising; (c) be defamatory,
trade libelous, or unlawfully harassing; (d) be obscene,
child pornographic or indecent; (e) contain any viruses,
trojan horses, trap doors, easter eggs, worms, time bombs,
or other computer programming routines intended to damage,
interfere with, intercept, or expropriate any system, date
or business/personal information.
H. To the best of Developer's ability, The Courseware shall be
free of any bugs or programming devices that are designed to
disrupt or are capable of disrupting the use or
functionality of T.NAV.
I. The Courseware shall perform substantially as described
herein.
J. THE DEVELOPER EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED
WARRANTIES, INCLUDING WITHOUT LIMITATION, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, OR ACCURACY OF INFORMATIONAL CONTENT.
B. HealthStream warrants and represents that:
1. HealthStream has all requisite power, authority and legal
right to execute, deliver and perform its obligations under
this Agreement and all of such actions have
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been duly and validly authorized by all necessary
proceedings on the part of HealthStream.
2. The execution and delivery of this Agreement by HealthStream
does not and will not: (a) materially violate any applicable
law; or (b) conflict with or result in a material breach of
or default under any agreement or instrument to which
HealthStream is a party or by which any of its properties is
bound.
3. The Content shall not infringe any patents, copyrights,
trade secrets, or other proprietary rights of any third
parties, and HealthStream will have no reason to believe
that any such infringement or claims thereof could be made
by third parties.
SECTION 6. TERM AND TERMINATION.
6.1. Term. This Agreement shall be effective as of the date hereof and
shall continue, unless sooner terminated as provided herein, for twelve (12)
months.
6.2. Termination. This Agreement may be terminated upon the occurrence
of one or more of the following events:
A. HealthStream may terminate this Agreement without cause upon
sixty (60) days prior written notice to Developer. Upon receipt
of such notice, Developer shall inform HealthStream of the extent
to which performance has been completed through such date or
receipt of notice, and collect and deliver to HealthStream all
work product and any Courseware then existing in a manner
prescribed by HealthStream. Developer shall be paid for all work
performed through the date of receipt of notice of such
termination;
B. Either party may terminate this Agreement if the other party
seeks protection under the bankruptcy laws (other than as a
creditor) or any assignment is made for the benefit of creditors
or a trustee is appointed for all or any portion of such party's
assets;
C. Either party may terminate this Agreement if the other party is
in default of any material provision of this Agreement and such
default is not cured within thirty (30) days after receipt of
written notice of default by such other party.
6.3 Post-Termination Rights.
A. Upon termination of this Agreement, each party shall immediately
deliver to the other party all copies of the other party's
Confidential Information in such party's possession or control;
and Developer shall immediately deliver to HealthStream (a) all
Courseware, including any Modules, Content, and Interactive
Content; and (b) any other information or item related to this
Agreement in Developer's possession or control.
B. If this Agreement is terminated for any reason, subject to
Developer's reservation of rights as specified in Section 3.1
herein, Developer will and hereby does grant to HealthStream all
right, title, and interest, including all United States and
international copyrights and all other intellectual property
rights in the Courseware.
SECTION 7. INDEMNITIES AND INSURANCE.
Developer agrees to:
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A. Indemnify and hold harmless HealthStream from any liability
resulting from the actions of any officer, director, employee or
agent of Developer in the performance of this Agreement,
including any and all losses, claims penalties, expenses,
actions, suits, obligations, damages, liabilities, and liens (and
all costs and expenses, including reasonable attorney's fees
incurred in connection therewith), that HealthStream sustains or
incurs or may sustain or incur in connection with Developer's
performance hereunder, or as a consequence of any default by
Developer in the performance or observance of any covenant or
condition contained in this Agreement, including without
limitation, the breach of any representation or warranty, the
failure of Developer to substantially comply with any of
HealthStream's specifications for its Courseware, or the failure
to substantially comply with any applicable requirements of law
(the "Claims"). Developer agrees that upon written notice by
HealthStream of the assertion of any Claims, Developer shall, at
HealthStream's option, either assume full responsibility for, or
reimburse HealthStream for the reasonable costs and expenses of,
the defense thereof.
B. Obtain and maintain during the term of this Agreement all
insurance coverage reasonably necessary to guard against all
risks of loss that may arise out of, or relating to, this
Agreement, including business interruption insurance.
HealthStream agrees to:
A. Indemnify and hold harmless Developer from and against any and
all claims that the Content or any portion thereof, infringes
upon any patent, copyright, trade secret, or other proprietary
rights.
B. Indemnify and hold harmless Developer from and against any and
all claims or liability arising out of or related to the use,
results of the use or the application of Courseware specifically
relating to Content provided by HealthStream.
SECTION 8. MISCELLANEOUS.
8.1 Further Actions. Developer agrees to take any future actions that
HealthStream may reasonably deem necessary or advisable to implement the terms
of this Agreement.
8.2. No Implied Waivers. No action or course of dealing on the part of
either party, their officers, employees, consultants, or agents, nor any failure
or delay by either party with respect to exercising any right, power or
privilege of such party under this Agreement shall operate as a waiver thereof,
except to the extent expressly provided therein.
8.3. Attorneys' Fees, Costs and Expenses. Each party agrees to pay all
reasonable costs and expenses, including, without limitation, attorney's fees
and compensation for time spent by the other party's employees, that either
party may incur in enforcing the terms of this Agreement against the other
party, in protecting such party's rights hereunder, or in amending, waiving or
modifying any of the terms hereunder.
8.4. Limitation on Damages. Neither party shall have liability to the
other party or any other person or organization for, and each party expressly
waives, all remedies and damages relating to indirect, incidental, and
consequential or special damages of any description, whether arising out of
warranty or other contract, negligence or other tort, or otherwise, including
without limitation, recession, difference in value damages, capital losses,
foreseeable business losses, loss of profits, and reliance damages. Under no
circumstances shall the Developer's liability under this Agreement for any cause
exceed the amount paid by HealthStream to the Developer; and under no
circumstances shall HealthStream's liability under this Agreement for any cause
exceed an amount equal to One Hundred
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Thousand and No/100ths Dollars (US$100,000), plus Ten Thousand and No/100ths
Dollars (US$10,000) multiplied by the number of Modules delivered by the
Developer to HealthStream.
8.5. Notices. All notices shall be deemed received three days after
they are sent by certified mail, return receipt requested, or when actually
received by hand-delivery or overnight courier. All notices shall be sent to:
To HealthStream: Xxxxxx Xxxxx, Esq.
General Counsel/Vice President of Finance
HealthStream, Inc.
000 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
To Developer: Xxxx X. Xxxxxxxxx
Chief Executive Officer
E-Vitro, Inc.
000 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
8.6. Headings. Captions and headings to sections are included
solely for convenience and are not intended to affect the interpretation of any
provision of this Agreement.
8.7. Force Majeure. In the event an act of the government, war
conditions, fire, flood, or other act of God prevents either party from
performing in accordance with the provisions of this Agreement, such
nonperformance shall be excused and shall not be considered a breach or default
for so long as the said conditions prevail.
8.8. Independent Contractors. Each party to this Agreement is an
independent contractor and this Agreement shall not be construed as creating a
joint venture, partnership, agency or employment relationship between the
parties hereto nor shall either party have the right, power or authority to
create any obligation or duty, express or implied, on behalf of the other.
Developer shall be fully responsible for paying all income taxes, penalties and
interest, in addition to workers compensation and Social Security wages of any
personnel under the employ of Developer, if any, and the filing of all necessary
documents, forms and returns pertinent to all of the foregoing.
8.9. Preferred Vendor Status. Developer may represent that HealthStream
is a preferred vendor of Developer in any of its marketing materials; provided,
however that upon prior written notice by HealthStream of its desire to
terminate such preferred vendor status, Developer agrees to (1) cease and desist
including any such representation or reference to HealthStream in its marketing
materials; and (2) cease and desist using or distributing any marketing
materials that may contain such representation or reference to HealthStream.
8.10. Assignment. This Agreement shall be binding upon and inure to the
benefit of HealthStream and Developer and their respective successors and
assigns; provided, however, HealthStream has retained Developer for Developer's
unique development capabilities and Developer shall not delegate any of its
duties under this Agreement to any other person or entity without the prior
written consent of HealthStream, which consent shall not be unreasonably
withheld.
8.11. Governing Law. This Agreement shall be governed by the laws of
the State of Tennessee without regard to its choice of law provisions.
8.12. Severability. The invalidity or unenforceability of any of the
provisions of this Agreement shall not affect the validity of the rest of this
Agreement. Each provision of this Agreement shall be
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enforceable to the fullest extent permitted by law. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by limiting
such provision it would become valid and enforceable, then such provision shall
be deemed to be written, construed, and enforced as so limited.
8.13. Entire Agreement. This Agreement is the entire agreement between
the parties related to the matters herein and replaces and supersedes all other
agreements, proposals, and understandings, oral or written. This Agreement may
be amended only in writing and must be signed by appropriate officers of the
parties hereto.
8.14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, and intending to be legally bound hereby, each
party hereto warrants and represents that this Agreement has been duly
authorized by all necessary corporate action and that this agreement has been
duly executed by and constitutes a valid and binding agreement of that party.
All signed copies of this Agreement shall be deemed originals.
HealthStream, Inc.
By:
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Title:
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Date:
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e-Vitro, Inc.
By:
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Title:
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Date:
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