Form F.4
OEM SOFTWARE LICENSE AGREEMENT
(Allows Licensee to Incorporate Licensor’s Software Products Into Licensee’s Products for Resale)
This agreement (“Agreement”) is entered into as of ______, 20__ (“Effective Date”) by and between ______(“Company”) a Delaware corporation with offices located at
______and ______("Licensee"), a ______corporation with offices located at ______.
Whereas, Company desires to grant to Licensee, and Licensee desires to receive from Company, a license to integrate Company's proprietary software into Licensee's products and to distribute such Company Software as integrated into Licensee's products, all in accordance with the terms of this Agreement.
IN CONSIDERATION of the foregoing terms, conditions, monies, and the mutual covenants, the parties agree as follows:
1. DEFINITIONS. For the purposes of this Agreement the following terms shall have the meanings set forth below:
1.1 "Company Software" means the machine-readable, compiled, object code form of Company's proprietary software (including Third Party Software that Company has been granted a license to use) and associated Documentation. The specific Company Software covered by this Agreement is set forth on Exhibit A, attached hereto and made a part hereof. Provided that Licensee is not in material breach of this Agreement and is current in its payment of License Annual Renewal Fees, the Company Software covered by this Agreement shall also include the object code form of any subsequent releases or successor products of the Company Software set forth on Exhibit A, and any modifications (including bug fixes, error corrections, enhancements and updates) to which Licensee may be entitled pursuant to the terms in Exhibit A.
1.2 "Development Software" means the tools and other portions of the Company Software that are used to model content and/or integrate the Run-Time Software into the Licensee Application. Development Software shall be used for training, content modeling, and/or integration into a Licensee Application, but does not include production access to the Run-time Software.
1.3 “Company Content” means healthcare terminology data that are acquired, created, integrated, and distributed to Licensee by Company. Such content includes concepts, terms, hierarchies, properties, relationships, and metadata associated with individual terminological sources. Company Content will include data that are publicly available, sold by organizations other than Licensee and Company, and proprietary to Company. Company Content will include updates, revision, corrections, and new releases as elsewhere described in this Agreement.
1.4 "Run-Time Software" means the portion of the Company Software integrated into the Licensee Application to execute the documented functionality of the Run-Time Software and is specifically licensed for integration into the Licensee Application and Sublicensed by Licensee.
1.5 "Licensee Application" means an application software product created by Licensee through the integration of Run-Time Software with application software programs proprietary to Licensee. All Licensee Applications as set forth in this Agreement are subject to the restrictions on development, use and distribution set forth in this Agreement.
1.6 “Documentation” means the documents setting forth the features and functionality of the Company Software and Company Content and which describe the procedures for installing, operating and performing support functions on the Company Software and Company Content.
1.7 “Third Party Software” means the software products found on Exhibit D.
2. GRANT OF RIGHTS:
2.1 License. Subject to the provisions of this Agreement, during the term of this Agreement Company grants to Licensee an annual, nonexclusive, nontransferable license to the Company Software and Company Content set forth and subject to the limitations in this Agreement and all Exhibits. The license granted hereunder is granted solely to the Licensee set forth in this Agreement, and not, by implication or otherwise, to any parent, subsidiary or affiliate of such person or entity.
2.1.1 Development Software Licenses. Licensee agrees to use the Development Software Licenses: (i) only in accordance with the applicable Documentation provided by Company; (ii) only for the internal business purposes of Licensee; (iii) only with the number of concurrent licenses and domains set forth in Exhibit A; and (iv) subject to the terms of this Agreement. Licensee may make backup copies as described in Section 4.3 below of each Development Software License only for archival or disaster recovery purposes. Under no circumstances may the Licensee sublicense or distribute the Development Software Licenses.
2.1.2 Run-Time Software Licenses. Licensee agrees to use the Run-Time Software Licenses: (i) as integrated into the Licensee Applications named in Exhibit A; (ii) to copy, market and Sublicense the Run-Time Software as a component of Licensee Applications named within the Territory set forth in Exhibit A and the Distribution as described in section 2.2 below; (iii) to copy and install the Run-Time Software on named specific computer systems for demonstration and/or training purposes; and (iv) subject to the terms of this Agreement. Licensee may not, under any circumstances, distribute or allow access to the Run-Time Software as a standalone product. Licensee represents and warrants to and for the benefit of Company that each Licensee Application contains a significant enhancement of features and/or functionality to the Company Software embedded therein, and that each Licensee Application is substantially different from any Company Software and does not compete with the Company Software. Licensee shall not integrate the Company Software with any products other than the Licensee Applications identified in Exhibit A without first obtaining Company's prior written consent. Licensee reserves the right to license its software applications without the integration of Company Software.
2.2 Distribution. Company grants to Licensee the right to market and sublicense the Run-Time Software to the following:
2.2.1 End-Users. Company grants to Licensee the right to market and sublicense the Run-Time Software to end-users of Licensee Applications within the Territory as defined in Exhibit A.
2.3 Marketing. Licensee shall use reasonable efforts to market the Run-Time Software as integrated into the Licensee Applications, and Licensee shall limit its claims and representations concerning the Company Software features in the Run-Time Software to those made by Company in its published literature, and Licensee shall not make any claims or representations in excess of such claims by Company.
2.4 Sublicensing. Any distribution of the Run-Time Software as integrated within Licensee applications shall be accomplished under a license agreement ("Sublicense") between the Licensee and the entity to which the distribution is made ("Sublicensee"). Each Sublicense shall be signed by the Sublicensee and include the specific terms stated on Exhibit C.
2.5 Source Code Escrow. At Licensee's option and written request to Company, Company and Licensee shall enter into a source code escrow agreement ("Escrow Agreement") with an independent third party escrow agent ("Escrow Agent") in the business of providing escrow services, which agreement shall provide as follows:
2.5.1 Deposit. The Escrow Agreement shall provide that Company shall deposit the source code for the Company Software and any updates provided to Licensee hereunder with the Escrow Agent and that it will maintain Licensee's status as a beneficiary during the term of this Agreement.
2.5.2 Release. The Escrow Agreement shall provide that the Escrow Agent shall release Company's source code to Licensee if any one of the following circumstances remains uncorrected for more than 30 days: (i) Entry of a bankruptcy order for relief under Chapter 7 of Title 11 of the United States Code; (ii) Company's general assignment for the benefit of creditors.
2.5.3 License. The Escrow Agreement shall provide that, upon the release of source code pursuant to Section 2.5.2, Company shall grant to Licensee a worldwide, nonexclusive, non-transferable license to use, reproduce and modify the released source code, solely for the purpose of supporting and maintaining the Company Software.
2.5.4 Escrow Fees. Licensee shall pay all fees and expenses for such escrow arrangement, including set-up fees and annual maintenance fees.
3. FEES.
3.1 Fees. In consideration for the rights granted in this Agreement, Licensee agrees to pay Company the fees described in Exhibit A. All fees quoted and payments made herein shall be in U.S. Dollars. This Agreement and all fees paid under this Agreement shall be held confidential under the terms of this Agreement and subject to conformance with legal obligations of Licensee. Company may increase the fees once per twelve (12) month period upon providing prior written notice to Licensee at least ninety (90) days prior to the expiration of the then current annual renewal. Any fee increase by Company shall be no more than an average of ten percent (10%) over any rolling two (2) year period. For Run-Time Licenses sold to Sublicensees, such fee increase shall be effective upon the next annual renewal period for each Sublicensee.
3.2 Reporting.
3.2.1 No later than thirty (30) days after the close of each calendar quarter, Licensee shall provide Company with a report containing the number of new Sublicenses distributed, Sublicenses renewed, or Sublicenses discontinued for each Company Run-Time Software License during the quarter which shall include, at a minimum, Sublicensee name and location, contact information, number of licenses, type of licenses or other such metric as specified in Exhibit A, date Company Software or Company Content was first made available to Sublicensee, as well as a copy of each Sublicense Agreement as shown in Exhibit C.
3.2.2 At the start of each renewal year, Licensee shall provide Company with a written report containing the total number of Licensee’s Members. A “Member” means a person or persons who fall within one of the following categories: (i) is covered under an insurance policy or service agreement issued by the Licensee; (ii) has access to the Licensee’s provider network for covered services under their medical plan; (iii) has medical claims that are administered by the Licensee; or (iv) is covered under an insurance policy that is (a) marketed by the Licensee, and (b) for which the Licensee assumes reinsurance of at least fifty percent (50%). As of the Effective Date of the Agreement, and for the first contract year, the total number of Licensee’s Members is ______.
3.3 Separate Fees. The fees listed herein do not include licenses required for usage of content licensed, supplied or distributed by third parties.
3.4 Taxes. Licensee shall be responsible for all sales taxes, use taxes, and any other similar taxes imposed by any federal, state or local governmental entity on the transactions contemplated by this Agreement, excluding taxes based upon Company's net income. When Company has the legal obligation to pay or collect such taxes, the appropriate amount shall be invoiced to and paid by Licensee unless Licensee provides Company with a valid tax exemption certificate authorized by the appropriate taxing authority.
3.5 Audit. Licensee shall maintain complete and accurate accounting and records to support and document license fees payable in connection with this Agreement. Such records shall be retained for a period of three (3) years after the license fees that relate to such records have accrued. Licensee shall, with reasonable notice and upon written notice from Company, provide access during regular business hours at Licensee's facilities to such records to an independent auditor chosen by Company for the purpose of audit at the sole expense of Company. If any such audit discloses a shortfall in payment to Company of more than ten percent (10%) per quarter, Licensee agrees to reimburse Company for the expenses of such audit. Licensee agrees to cure any shortfall within thirty (30) days and pay Company interest on the shortfall from the date that the shortfall was actually due to the date the shortfall is paid at a rate of two percent (2%) above prime. If during the term of this Agreement, Company discovers another payment shortfall of more than ten percent (10%), then Company may terminate this Agreement. Such audits shall be conducted no more frequently than once a year unless Company determines that Licensee is in material noncompliance with the terms hereof, in which case audits may be conducted quarterly until Licensee has been determined to be in compliance for four (4) consecutive quarters.
4. MAINTENANCE AND SUPPORT
4.1 Company Obligations. Company support includes support, Documentation, and updates pursuant to Exhibit B. Company agrees to use reasonable efforts to correct any reproducible error in the Company Software and Company Content with a level of effort commensurate with the severity of the error. Company shall be obligated to support the most current version of the Company Software and Company Content and the version immediately prior to the most current version for a period of 6 months after the release of the most current version. Maintenance and Support coverage of Company Software and Company Content is contingent upon payment of the License Fees set forth in Exhibit A. Maintenance and Support coverage and contact information is provided in Exhibit B. Maintenance and Support assistance services that are not specifically addressed in this Agreement may be provided by mutual agreement at Company’s then current Professional Services rates.
4.2 Company Scope. Company shall provide Maintenance and Support services directly to Licensee. Company will not provide Maintenance and Support to Licensee's Sublicensees. Company is responsible for the following elements of Maintenance and Support: (i) research of problems in Company Software and Company Content reported by Licensee; (ii) error corrections, emergency bypasses, and bug fixes to Company Software and Company Content as developed by Company based on problems which Company is able to replicate and diagnose as defects; (iii) technical assistance in diagnosing Company Software and Company Content configuration or malfunction issues caused by Company Software and Company Content; and, (iv) technical guidance in how to install Company Software and Company Content updates. Installation and configuration of Company Software and Company Content updates and/or new version releases is not included in Maintenance and Support coverage. Such assistance may be available as a Professional Service.
4.3 Licensee Obligations. Licensee agrees to install all corrections of substantial defects, minor bug fixes, and updates, including any enhancements for the Company Software or Company Content in accordance with the instructions and in the order of receipt from Company. Licensee agrees not to modify, enhance, or otherwise alter the Company Software or Company Content, unless and to the extent specifically authorized in the product Documentation or with the prior written consent of Company. Upon detection of any error in the Company Software or Company Content, Licensee, as requested by Company, agrees to provide Company with access to and the assistance of Licensee support staff, examples illustrating the error, output or error logs, and any other data that Company may reasonably request in order to reproduce operating conditions similar to those present when the error occurred. Licensee agrees to make regular backup copies of the Company Software, Company Content and related data supporting their use by Licensee.