1
EXHIBIT 10.18
We have omitted certain portions of this document and filed them separately with
the Commission. These portions are marked with an asterisk (*).
CONTINUING EDUCATION SERVICES AGREEMENT
BETWEEN HEALTHSTREAM & HEALTHGATE DATA CORP.
This Continuing Education Services Agreement ("Agreement") is entered
into by and between HealthStream, Inc., a Tennessee corporation having its
principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("HealthStream") and HealthGate Data Corp., a Delaware
corporation having its principal place of business at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("HealthGate").
WHEREAS, HealthStream is a provider of computer and Web-based
education and training services organizations and individuals within the
healthcare industry;
WHEREAS, HealthStream is a provider of healthcare and education
courseware and courseware management tools delivered via the Internet,
corporate intranets and networks;
WHEREAS, HealthStream has developed and marketed and continues to
develop and market a computer-based education system known as the Training
Navigator(R) ("T.NAV(R)") that delivers and monitors World Wide Web based
content;
WHEREAS, HealthGate enables hospitals and health systems to provide
their users with access to healthcare content for professionals, patients, and
consumers under its CHOICE(TM) brand name for their Web sites On the Internet
and on their corporate intranets;
WHEREAS, HealthGate and HealthStream wish to enter into a cooperative
effort to provide HealthStream branded, hosted and managed educational
offerings via HealthGate's distribution channels; market said educational
offerings, and sell the ad space inventory available within said educational
offerings;
WHEREAS, HealthGate and HealthStream wish to provide appropriate
consideration for those efforts that each party has agreed to undertake;
WHEREAS, HealthGate and HealthStream each acknowledge the sufficiency
and adequacy of the value, concessions, and recitations set forth herein;
NOW THEREFORE, HealthGate and HealthStream agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the terms below shall have the following
meanings:
1.1. "ACCME" means the Accreditation Council for Continuing Medical
Education.
1.2. "Ad Inventory" means the advertising space on any of the pages in the
Joint Site.
1.3. "Available Ad Inventory" means any Ad Inventory unsold from the
monthly available at the beginning of the month.
1.4. "CEU Courses" means those educational courses that have been reviewed
for continuing education units by an institution recognized by an
accredited professional organization. Those individuals completing the
courses may receive credit toward continuing education requirements.
1.5. "CHOICE(TM)" means HealthGate's suite of products that provide
healthcare content to hospitals and health systems for use on their
Web sites and intranets. CHOICE(TM) is a trademark of HealthGate.
1.6. "CME Courses" means those educational courses that have been reviewed
for continuing medical education by an ACCME accredited institution.
Those individuals completing the courses may receive credit toward
continuing education requirements.
1.7. "Course" means healthcare related Internet based curricula designed to
be delivered by T.NAV(R) through HealthStream Sites.
Page 1 of 11
2
1.8. "Effective Date" means September 15, 1999, the date on which both
parties to this Agreement have executed same.
1.9. "HealthGate" means HealthGate Data Corp. and any affiliated entity of
HealthGate. HealthGate is said to be a HealthStream Site Partner via
the execution of this Agreement.
1.10. "HealthGate Courses" means Courses that are licensed to HealthGate or
are the proprietary property of HealthGate including training and
education content including, but not limited to OSHA and JCAHO
mandated training, continuing medical education, and office training.
1.11. "HealthGate Sites" means the various branded Internet sites licensing
products and services from HealthGate, including its CHOICE(TM)
product.
1.12. "HealthStream" means HealthStream, Inc. and any Subsidiary of
HealthStream, Inc.
1.13. "HealthStream Courses" means Courses that are licensed to HealthStream
or are the proprietary property of HealthStream including training and
education content including, but not limited to OSHA and JCAHO
mandated training, continuing medical education, and office training.
1.14. "HealthStream Server Facility" means those facilities either
maintained by HealthStream, whether by subcontract with HealthStream
Service Associates or via independent means, where HealthStream Sites
are hosted and connected to the World Wide Web and other private
networks. A HealthStream Server Facility will be comprised of
software, server computers and connectivity hardware required to
deliver HealthStream Sites.
1.15. "HealthStream Service Associates" means those companies that assist
HealthStream in delivering HealthStream Services. HealthStream Service
Associates include, but are not limited to, customer support
companies, credit card collections companies and Internet service
provider companies.
1.16. "HealthStream Services" means HealthStream branded, hosted and managed
healthcare educational offerings delivered via HealthStream Sites.
1.17. "HealthStream Sites" means those HealthStream managed and hosted
Internet sites that deliver educational and other content via the
T.NAV(R). HealthStream Sites may be available via the World Wide Web
or through a private Intranet.
1.18. "HealthStream Site Partners" means those entities managing
healthcare-related World Wide Web sites that partner with HealthStream
in delivering a HealthStream Site for the use of HealthStream Site
Partner clients.
1.19. "Internet" means the international network of computers and computer
networks accessible by the public at large of which the World Wide Web
is a subset.
1.20. "Intranet" means an internal network protected from unauthorized users
by a firewall and accessible only by individuals within the
organization serving the network.
1.21. "Joint Site" means one or more Internet sites available from
HealthGate Sites containing HealthStream Services. The Joint Sites are
also said to be a subset of HealthStream Sites. Joint Sites will
contain branding from both HealthStream and HealthGate.
1.22. "Linked Site" means the World Wide Web site operated by HealthStream
Site Partners that links to a HealthStream Site. HealthStream attempts
to provide each Linked Site with a distinct Personalization.
1.23. "Marketing Initiatives" means those significant HealthGate marketing
activities that prominently include mention and promotion of
HealthStream and the Joint Site services. Marketing Initiatives
include but are not limited to the following: trade shows and
exhibitions, seminars, direct mailing campaigns, third party
publication advertisement campaigns, online banner advertisement
campaigns. HealthGate and HealthStream will jointly determine the
scope, total cost and cost allocation of Marketing Initiatives funded
by both parties. Notwithstanding other considerations, HealthStream
financial participation in each Marketing Initiative will be
determined in part by the extent of Joint Site and HealthStream
promotion in said Marketing Initiative.
1.24. "Net Revenue" means gross revenue derived by HealthGate or
HealthStream from Transactions Fees and sales of Ad Inventory less any
discounts, refunds, rebates, or returns.
Page 2 of 11
3
1.25. "Personalization" means the unique graphic features of a HealthStream
Site, as distinguished from other HealthStream Sites. Personalization
is enabled via features of the T.NAV(R) that are designed to best
match each HealthStream Site's appearance to its corresponding Linked
Site. The scope and specification of T.NAV(R)'s Personalization
capability will change over time as T.NAV(R) is advanced to best meet
the needs of HealthStream Site Partners. Exhibit A outlines the scope
of T.NAV(R)'s present Personalization capabilities.
1.26. "Subsidiary" means a company in which, on a class-by-class basis, more
than fifty percent (50%) of the stock entitled to vote for the
election of directors is owned or controlled by another company, but
only so long as such ownership or control exists.
1.27. "Third Party Courses" means interactive content that is licensed to a
third party to this Agreement or is the proprietary property of a
third party to this Agreement
1.28. "T.NAV(R)" means HealthStream's computer based training product that
delivers and monitors World Wide Web based Content. T.NAV(R) is
available in multiple configurations, each containing common core
functionalitY with unique features applicable for a given
application's distribution and access requirements, e.g. Internet
eCommerce, Intranet, local area networks, etc. T.NAV(R) is a
registered trademark of HealthStream. T.NAV(R) is also branded as
Training Navigator(TM), a trademark of HealthStream.
1.29. "Transaction" means those purchases of HealthStream Courses,
HealthGate Courses, or Third Party Courses by customers of the Joint
Site.
1.30. "Transaction Fees" means fees received by HealthStream for
Transactions.
ARTICLE 2
RESPONSIBILITIES AND STRATEGIC RIGHTS GRANTS
2.1. During the term of this Agreement, HealthGate shall:
2.1.1. Include on the home page(s) of those HealthGate Sites through
which the HealthStream Courses are available a logo of the
HealthStream trademark and a hyperlink to the Joint Site.
2.1.2. Promote the Joint Site as a part of HealthGate's public
advertising strategy. HealthGate and HealthStream will
jointly develop a specific promotion plan within ninety (90)
days of the Effective Date that will include a minimum of one
(1) Marketing Initiative per month. HealthGate will include
the use of the HealthStream trademark logo on all HealthGate
marketing materials that reference the services provided by
the Joint Site. All such Marketing Initiatives will be
jointly approved by HealthStream and HealthGate.
2.1.3. Have HealthStream's content development services made
available to HealthGate's clients on a commercially
reasonable best efforts basis, upon mutually agreeable terms.
A referral fee outlined in Section 4.3.1 shall be paid to
HealthGate by HealthStream for these services.
2.2. During the term of this Agreement, HealthStream shall:
2.2.1. Host and maintain the Joint Site on its World Wide Web
servers. The Joint Site will be a subset of HealthStream
Sites residing at a HealthStream Server Facility. The Joint
Site will be operational on or before one month following the
Effective Date.
2.2.2. Provide customer support and customer account collections
services for the Joint Site, either independently or via
HealthStream Service Associates.
2.2.3. Assign a partner manager to the HealthGate account who will
be responsible for maintaining communication with HealthGate
personnel regarding site functionality, marketing, and other
business issues.
2.2.4. Include on the home page of the Joint Site a logo of the
HealthGate trademark and a hyperlink to the HealthGate Sites.
2.2.5. Provide one (1) distinct Personalization for each HealthGate
Site. The scope of each
Page 3 of 11
4
personalization is defined in Exhibit A. Each distinct
Personalization will become a Joint Site.
2.2.6. Have a right of first refusal to provide development services
to Third Party Course providers with whom HealthGate
contracts to place content within the Joint Sites, upon
mutually agreeable terms.
2.2.7. Refrain from communicating via e-mail with individual members
of the Joint Sites without prior approval from HealthGate.
ARTICLE 3
LICENSE GRANTS
3.1. Subject to the agreement of the providers of the HealthGate Courses,
HealthGate grants HealthStream worldwide, non-exclusive Internet
rights as the host and marketing agent for HealthGate Courses during
the term of this agreement.
3.2. Subject to the payment of the consideration set forth in Article 4,
HealthStream grants HealthGate the right to sell Ad Inventory in the
Joint Site. HealthStream will have the first right to Available Ad
Inventory.
3.3. Both parties to this Agreement shall have equal rights to the
client-specific data associated with the Joint Site. Rights to said
data will be subject to privacy provisions guaranteed by HealthStream
to Joint Site customers.
3.4. Any and all rights not expressly granted by either of the parties to
the other are reserved by the respective party claiming reservation of
that right.
ARTICLE 4
PRICE AND PAYMENT
4.1. HealthGate and HealthStream will meet as necessary to review pricing,
discounting policy and the rationale behind any discounts granted from
the previous quarter for healthcare related training courses, ad space
inventory, and Intranet products and services. HealthStream has
discretion over Course and * pricing.
4.2. During the term of this Agreement, HealthGate shall pay to
HealthStream * of all Net Revenue derived from * sold and collected by
HealthGate.
4.3. During the term of this Agreement, HealthStream shall pay to
HealthGate:
4.3.1. A referral fee equal to * of the Net Revenue derived from
content development services described in Section 2.1.3;
4.3.2. * of all Net Revenue derived from Transaction Fees from
HealthStream Courses and Third Party Courses procured by
HealthStream;
4.3.3. * of all Net Revenue derived from Transaction Fees from
HealthGate Courses and Third Party Courses procured by
HealthGate;
4.3.4. * of all Net Revenue derived from Ad Inventory sold by
HealthStream.
4.4. HealthStream shall * to HealthGate * payments of * per *, payable in
* equal installments, for the purposes of sponsoring the HealthGate
Sites, during the term of this Agreement.
4.5. HealthGate and HealthStream agree to deliver monthly statements
detailing Joint Site Net Revenue collected by each party and all
payments due according to the percentages outlined in this Article 4
within forty-five (45) days after the end of each calendar month.
These monthly reports shall indicate the total number of Transactions
and Ad Inventory for which either party derives revenue, the details
of said reports are outlined in Exhibit B. Each party shall submit
monthly reports even if no royalties or other amounts are due for such
month. A monthly finance
Page 4 of 11
5
charge based on an annual rate of prime plus 2% will be assessed on
all amounts that are paid later than forty five (45) days after the
end of the last month.
ARTICLE 5
INDEMNIFICATION FOR INFRINGEMENT
5.1. HealthStream represents and warrants that to the best of its
knowledge:
5.1.1. T.NAV(R) does not infringe any copyright or patent
enforceable under the laws of any country.
5.1.2. T.NAV(R) does not violate the trade secret rights of any
third party.
5.2. HealthStream agrees to indemnify, hold harmless, and defend HealthGate
from any and all damages, costs, and expenses, including reasonable
attorneys' fees, incurred in connection with a claim which constitutes
a breach of the warranties set forth in Section 5.1 and where judgment
has been rendered (hereinafter claims under Subsections 5.1.1 and
5.1.2 shall collectively be referred to as "Infringement Judgments");
provided, HealthStream is notified promptly in writing of an
Infringement Judgment and has sole control over its defense or
settlement, and HealthGate provides reasonable assistance in the
defense of the same.
5.3. HealthStream warrants that to the best of its knowledge its
performance of this Agreement will not violate or infringe upon the
rights of third parties, including but not limited to property,
contractual, employment, trade secret, proprietary information and
non-disclosure rights, or any United States trademark, copyright or
patent right. HealthStream will, at its own expense, defend any suit
or proceeding brought against HealthGate based on a claim that the
HealthStream Courses infringe upon any copyright, patent, trademark,
trade secret, or other intellectual property right, provided that
HealthStream is notified promptly in writing and given full and
complete authority, information and assistance for the defense of such
suit or proceeding. HealthStream may, at its option and expense,
either obtain the right to continue usage of affected HealthStream
Courses free of any claim of infringement, modify such HealthStream
Courses so that affected HealthStream Courses is not subject to a
claim of infringement, or remove the affected HealthStream Courses
from the Joint Site.
5.4. HealthGate represents and warrants that to the best of its knowledge:
5.4.1. CHOICE(TM) does not infringe any copyright or patent
enforceable under the laws of any country.
5.4.2. CHOICE(TM) does not violate the trade secret rights of any
third party.
5.5. HealthGate agrees to indemnify, hold harmless, and defend HealthStream
from any and all damages, costs, and expenses, including reasonable
attorneys' fees, incurred in connection with a claim which constitutes
a breach of the warranties set forth in Section 3.3 and where judgment
has been rendered (hereinafter claims under Subsections 3.3.1 and
3.3.2 shall collectively be referred to as "Infringement Judgments");
provided, HealthGate is notified promptly in writing of an
Infringement Judgment and has sole control over its defense or
settlement, and HealthStream provides reasonable assistance in the
defense of the same.
5.6. HealthGate warrants that to the best of its knowledge its performance
of this agreement will not violate or infringe upon the rights of
third parties, including but not limited to property, contractual,
employment, trade secret, proprietary information and non-disclosure
rights, or any United States trademark, copyright or patent right.
HealthGate will, at its own expense, defend any suit or proceeding
brought against HealthStream based on a claim that the HealthGate
Courses infringe upon any copyright, patent, trademark, trade secret,
or other intellectual property right, provided that HealthGate is
notified promptly in writing and given full and complete authority,
information and assistance for the defense of such suit or proceeding.
HealthGate may, at its option and expense, either obtain the right to
continue usage of affected HealthGate Courses free of any claim of
infringement, modify such HealthGate Courses so that affected
HealthGate Courses is not subject to a claim of infringement, or
remove the affected HealthGate Courses from the Joint Site.
Page 5 of 11
6
ARTICLE 6
INTELLECTUAL PROPERTY PROVISIONS
6.1. Both parties will cause to appear on all marketing or promotional
materials concerning the Joint Site, the other party's copyright,
trademark, or patent notices.
6.2. The parties agree that ownership for any invention conceived or
developed during the course of this Agreement shall vest in accordance
with the patent rules governing inventorship.
6.3. Each party is responsible for protecting, documenting, and maintaining
its own intellectual property. Except as expressly set forth herein,
this Agreement does not grant either party any proprietary rights of
any type in the other party's materials, services, software code or
Content.
6.4. Both parties acknowledge that, except as otherwise provided herein,
each party owns and retains all right, title and interest in and to
its own Courses provided each party for use on the Joint Site.
6.5. HealthStream acknowledges that HealthGate owns and retains all right,
title and interest in and to the HealthGate Sites and all HealthGate's
products, services and derivatives thereof arising from the
performance of this Agreement.
6.6. HealthGate acknowledges that, subject to the license granted to
HealthGate in Section 3.1 herein, HealthStream owns and retains all
right, title and interest in and to T.NAV(R) and HealthStream Sites.
ARTICLE 7
PROHIBITION AGAINST ASSIGNMENT AND SUBLICENSE
This Agreement, and any rights or obligations hereunder, shall not be assigned
or sublicensed (except as permitted in this Article 7) by either party.
Notwithstanding the foregoing, this Agreement may be assigned to a successor in
interest to all of a party's assets or substantially all of a party's assets
and shall inure to the benefit of and be binding upon successors or purchasers
of substantially all of either party's assets.
ARTICLE 8
TERM OF AGREEMENT
Provided this Agreement has been properly executed by an officer of HealthGate
and by an officer of HealthStream, the term of this Agreement ("Term") shall
run from the Effective Date until two (2) years after the Effective Date, and
thereafter be automatically extended for additional one (1) year periods unless
either party provides thirty (30) days written notice to the non-terminating
party.
ARTICLE 9
DEFAULT AND TERMINATION
9.1. The non-defaulting party may terminate this Agreement in its entirety
if any of the following events of default occur:
9.1.1. If the defaulting party materially fails to perform or comply
with this Agreement or any provision hereof;
9.1.2. If the defaulting party fails to strictly comply with the
provisions of Article 12, or makes an assignment in violation
of Article 7;
9.1.3. If a party becomes insolvent or admits in writing its
inability to pay its debts as they mature, or makes an
assignment for the benefit of creditors;
9.1.4. If a petition under any foreign, state, or United States
bankruptcy act, receivership statute, or the like, as they
now exist, or as they may be amended, is filed by a party; or
9.1.5. If such a petition is filed by any third party, or an
application for a receiver of a party is
Page 6 of 11
7
made by anyone and such petition or application is not
resolved favorably or discharged to such party within ninety
(90) days.
9.2. Termination due to a breach of Articles 7 or 12 shall be effective
upon notice. In all other cases termination shall be effective sixty
(60) days after notice of termination to the defaulting party if the
defaults have not been cured within such sixty (60) day period. The
rights and remedies of the parties provided herein shall not be
exclusive and are in addition to any other rights and remedies
provided by law or this Agreement.
ARTICLE 10
OBLIGATIONS UPON TERMINATION
10.1. From and after termination or expiration of this Agreement, both
parties shall discontinue the operation of the Joint Site, cease and
desist from all use of the other party's name(s) and associated
trademark(s), and, upon request, deliver to the other party or its
authorized representatives or destroy all material upon which those
name(s) and the associated trademarks appear.
10.2. Articles 5, 6, 10, 11, 12, 13, 14, Section 16.1, and Article 17 shall
survive termination or expiration of this Agreement.
ARTICLE 11
WARRANTIES, LIMITATION OF LIABILITY AND REMEDIES
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER
WARRANTIES. ANY AND ALL OTHER IMPLIED WARRANTIES OF ANY KIND WHATSOEVER,
INCLUDING THOSE FOR MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE,
ARE EXPRESSLY EXCLUDED. NEITHER PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL
(INCLUDING WITHOUT LIMITATION LOST PROFITS, UNLIQUIDATED INVENTORY, ETC.),
INCIDENTAL, INDIRECT, ECONOMIC, OR PUNITIVE DAMAGES EVEN IF THE OTHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
ARTICLE 12
NONDISCLOSURE AGREEMENT
12.1. HealthStream expressly undertakes to retain in confidence all
information and know-how transmitted to HealthStream by HealthGate
that HealthGate has identified as being proprietary and/or
confidential or that, by the nature of the circumstances surrounding
the disclosure, ought in good faith to be treated as proprietary
and/or confidential, and will make no use of such information and
know-how except under the terms and during the existence of this
Agreement. HealthStream shall not disclose, disseminate or distribute
any such confidential information or know how to any third party
without HealthGate's prior written consent. HealthStream agrees to use
the same degree of care to protect HealthGate confidential information
as HealthStream takes to protect its own confidential information of
like importance. However, HealthStream shall have no obligation to
maintain the confidentiality of information that:
12.1.1. Is received rightfully from another party prior to its
receipt from HealthGate;
12.1.2. HealthGate has disclosed to a third party without any
obligation to maintain such information in confidence; or
12.1.3. Has been or is independently developed by HealthStream.
12.2. Further, HealthStream may disclose confidential information as
required by governmental or judicial order, provided HealthStream
gives HealthGate prompt notice of such order and complies with any
confidentiality or protective order (or equivalent) imposed on such
disclosure. HealthStream shall treat the terms and conditions of this
Agreement as confidential; however, HealthStream may disclose such
information in confidence to its immediate legal and financial
consultants as required in the ordinary course of HealthStream's
business. HealthStream's obligation under this Article 12 shall extend
to the earlier of such time as the information protected
Page 7 of 11
8
hereby is in the public domain through no fault of HealthStream or
five (5) years following termination or expiration of this Agreement.
HealthStream shall not disclose any information on HealthGate's
unannounced products to HealthStream's employees or any third party.
12.3. HealthGate shall have the same obligations in Sections 12.1 and 12.2
above with respect to HealthStream's information and know-how. In
addition, HealthGate shall treat all T.NAV(R) materials (including
source code if obtained) as confidential information and shall not
disclose, disseminate, or distribute such materials to any third party
without HealthStream's prior written permission.
12.4. Both parties shall prepare a mutually acceptable press release, if
any, to announce this Agreement.
ARTICLE 13
AUDITS
13.1. During the term of this Agreement, the parties hereto agree to keep
all usual and proper records and books of account and all usual and
proper entries relating to Transactions and sales of Ad Inventory
consistent with generally accepted accounting principles.
13.2. HealthStream may cause an audit to be made of the applicable
HealthGate records that pertain to this Agreement for the sole purpose
of verifying royalty reports issued by HealthGate to HealthStream and
prompt adjustment shall be made to compensate for any errors or
omissions disclosed by such audit. Any such audit shall be conducted
by an independent certified public accountant of national stature
(e.g., Deloitte) selected by HealthStream (other than on a contingent
fee basis) and shall be conducted during regular business hours at
HealthGate's offices and in such a manner as not to interfere with
HealthGate's normal business activities. Any such audit shall occur no
more than once per calendar year and within six (6) months of the end
of the calendar year. HealthStream shall pay for any such audit unless
Material discrepancies are disclosed. "Material" shall mean the lesser
of Five Thousand Dollars (US$5,000.00) or five percent (5%) of the
amount that should have been reported. If Material discrepancies are
disclosed, HealthGate agrees to pay HealthStream the costs associated
with the audit not to exceed Five Thousand Dollars (US$5,000.00). The
auditor shall only disclose the correct data and amounts as called for
on the royalty reports.
13.3. HealthGate may cause an audit to be made of the applicable
HealthStream records and facilities for the sole purpose of verifying
any reports issued by HealthStream to HealthGate, and prompt
adjustment shall be made to compensate for any errors or omissions
disclosed by such audit. Any such audit shall be conducted by an
independent certified public accountant of national stature (e.g.,
Deloitte) selected by HealthGate (other than on a contingent fee
basis) and shall be conducted during regular business hours at
HealthStream's offices and in such a manner as not to interfere with
HealthStream's normal business activities. Any such audit shall be
paid for by HealthGate unless Material discrepancies are disclosed.
"Material" shall mean the lesser of Five Thousand Dollars
(US$5,000.00) or five percent (5%) of the amount that should have been
reported. If Material discrepancies are disclosed, HealthStream agrees
to pay HealthGate for the costs associated with the audit not to
exceed Five Thousand Dollars (US$5,000.00). In no event shall audits
be made more frequently than annually unless the immediately preceding
audit disclosed a Material discrepancy. The auditor shall only
disclose the correct data and amounts as called for on the royalty
reports.
13.4. Any statement shall affect neither the right to examine and audit nor
the right to receive an adjustment to the contrary, appearing on
checks or otherwise, unless expressly agreed to in writing by the
party having such right.
13.5. In the event that either party makes any claim with respect to an
audit, upon the audited party's written request the party who has
requested such audit will make available to the audited party the
records and reports pertaining to such audit prepared by the
independent auditor who performed such audit.
Page 8 of 11
9
ARTICLE 14
NOTICES AND REQUESTS
All notices, authorizations, and requests in connection with this Agreement
shall be deemed given on the day they are deposited in the U.S. mails, postage
prepaid, certified or registered, return receipt requested, or sent by air
express courier, charges prepaid; and addressed as follows:
HealthGate: HealthGate, Inc.
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Vice President
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
HEALTHSTREAM: HealthStream, Inc.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other address as the party to receive the notice or request so
designates by written notice to the other.
ARTICLE 15
MEDIA
Each party agrees it will not use the other party's name, marks, or logos in
any advertising, promotional material, press release, publication, public
announcement, or through other media, written or oral, whether to the press, to
holders of publicly owned stock without the prior written consent of the other
party. Such consent shall not be unreasonably withheld or delayed. Accurate
statements made by either party as to the basic terms of this Agreement are
said to have the consent of the other party.
ARTICLE 16
CONTROLLING LAW
16.1 This Agreement shall be construed and controlled by the laws of the
State of Tennessee.
16.2 Neither this Agreement, nor any terms and conditions contained herein,
shall be construed as creating a partnership, joint venture or agency
relationship or as granting a franchise as defined in 16 CFR Section
436.2(a). The price and payment described in Article 4 of this
Agreement shall be construed as a royalty fee for the rights granted
in Article 3 of this Agreement, and not as a franchise fee.
ARTICLE 17
ATTORNEYS' FEES
If either HealthStream or HealthGate employs attorneys to enforce any rights
arising out of or relating to this Agreement, the prevailing party in any
proceeding shall be entitled to recover its reasonable attorneys' fees, costs
and other expenses.
ARTICLE 18
GENERAL
18.1 This Agreement does not constitute an offer by HealthStream and it
shall not be effective until
Page 9 of 11
10
signed by both parties. Upon execution by both parties, this Agreement
shall constitute the entire agreement between the parties with respect
to the subject matter hereof and replaces and supplants all prior and
contemporaneous communications. It shall not be modified except by a
written agreement signed on behalf of HealthGate and HealthStream by
their respective duly authorized representatives. Unless agreed to in
a separate writing signed by both parties, any statement appearing as
a restrictive endorsement on a check or other document which purports
to modify a right, obligation or liability of either party shall be of
no force and effect.
18.2 If any provision of this Agreement shall be held by a court of
competent jurisdiction to be illegal, invalid, or unenforceable, the
remaining provisions shall remain in full force and effect. If this
Agreement as it relates to any product(s) licensed hereunder shall be
held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable or if this Agreement is terminated as to particular
product(s), this Agreement shall remain in full force and effect as to
the remaining product(s).
18.3 No waiver of any breach of any provision of this Agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of
the same or any other provisions hereof, and no waiver shall be
effective unless made in writing and signed by an authorized
representative of the waiving party.
18.4 The Article headings used in this Agreement and the attached Exhibits
are intended for convenience only and shall not be deemed to supersede
or modify any provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth in Section 1.8 above. All signed copies of this Agreement shall
be deemed originals.
/s/ ▇▇▇▇▇▇ ▇. First, Jr.
------------------------------
HealthStream, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Chief Executive Officer
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
HealthGate Data Corp.
▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Financial Officer
Page 10 of 11
11
EXHIBIT
PERSONALIZATION ITEMS
HealthStream's online education Web site and T.NAV iCommerce systems
can be personalized to reflect Distributor's brand image. The
following items are standard elements of that Personalization:
1. Left navigation bar light color
2. Left navigation bar dark color
3. The color that is the background of the main logo in the upper left
4. The color for the ad banner section
5. The light color for the catalog listing
6. The dark color for the catalog listing
7. The light color for the Your Menu listing
8. The dark for the Your Menu listing
9. The logo to display in the upper left
10. The name to display in the site (i.e. "▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇")
11. The phone number of technical support
12. The email for tech support
13. The address for tech support
14. The first custom link to display
15. The second custom link to display
16. The third custom link to display
17. The fourth custom link to display
18. The fifth custom link to display
19. The people support link to display
20. Code to pre-populate the discount field
21. Text to display on page for custom link 1
22. Text to display for custom link 2
23. Text to display for custom link 3
24. Text to display for custom link 4
25. Text to display for custom link 5
26. Text to display for the people support link
27. Default background color
28. The path and file to call when doing an auto-logoff
29. The background color for the title bar
Page 11 of 11
