SELECT SERIES LICENSE AGREEMENT
WITH PRELUDE EXHIBIT
This Agreement, entered into on
December 29, 2006, is between INFORMATION DATA MANAGEMENT, INC.
(“IDM”), an Illinois corporation with executive offices
in Rosemont, Illinois, and HemaCare Corporation
(“Customer”), a corporation with executive offices in
Van Nuys, California, under which IDM is licensing its proprietary
software to Customer on a non-exclusive basis for Customer’s
own use, in accordance with the following terms and
conditions:
1.
Definitions . As used in this
Agreement, the following definitions shall apply:
1.1.
“Agreement” shall mean
this agreement, including all schedules hereto and all
modifications and addenda duly executed by both parties.
1.2.
“Software” shall mean
(i) The products and their component parts, in object code form, as
described in Schedule A; (ii) Updates and Upgrades supplied by IDM
under this Agreement; and (iii) permitted copies
thereof.
1.3
“Updates” shall mean
error corrections and maintenance releases to the
Software.
1.4
“Upgrades” shall mean
Software enhancements that accomplish incidental, structural,
functional and performance improvements (such as software to
incorporate new FDA recommended blood screening tests) for which
IDM does not impose a separate charge, are reasonably necessary for
the Customer’s operations, generally offered, and not
considered a New System. In the event that due to a change in
Customer’s operations or blood screening procedures, it
becomes necessary for IDM to incur a large, unanticipated expense
for a Software enhancement, Customer may request and the parties
shall negotiate in good faith as to whether an additional charge is
appropriate and what that charge should be.
1.5
“Documentation” shall
mean (i) the written materials supplied by IDM relating to the
Software or its operation or application, as described in Schedule
A; (ii) any enhancements thereto furnished by IDM; and (iii)
permitted copies thereof.
1.6
“Source Code” shall mean
the human readable form of the Software, including all comments and
procedural code such as job control language.
1.7.
“Third Party Software”
shall mean all operating systems and utilities owned by third
parties and used in connection with the Software, as described in
Schedule B.
1.8.
“Hardware” shall mean
the supported hardware configuration specified in Schedule
B.
1.9
“Authorized Location(s)”
shall mean the site(s) of the original installation of the Software
specified in Schedule C, which may be updated via written notice to
IDM if the site(s) is relocated.
1.10
“Successful Draw” shall
mean each venipuncture that results in a blood product,
specifically excluding QNS products and bilateral voided
sticks.
1.11
“New System” shall mean
new software, incorporating significant new technologies,
processes and methodologies and for which IDM imposes a separate
licensing fee.
2.
Ownership of
Software . IDM retains full ownership rights to the
Software, all object code, source code, and all related
Confidential Information (defined in paragraph 12), trade secrets,
trademarks, service marks, patents, and copyrights, and Customer
acknowledges that it obtains no ownership rights to the Software
under the terms of this Agreement.
3.
License to Use
Software . IDM hereby grants to Customer a personal,
non-exclusive, non-transferable license to use of the Software for
purposes of processing information belonging to Customer and
relating to Customer’s internal business. The Software
may be installed and used only by employees of or consultants on
site, or other location as permitted by Customer. No third party
personnel are permitted to use the Software. This license shall
include the right to use the Documentation supplied by IDM, and
shall include the right to receive Updates and Upgrades of the
Software as such are released in the ordinary course of IDM’s
business. The Interlude Symphony product is considered
an Upgrade for Customer with training subject to Section 8 of this
contract. Use of this License is restricted to Customer
remaining within the 50,001 to 100,000 per year successful draw
rate. Annually, Customer must certify in writing, the number
of Successful Draws for the previous twelve (12) month
period.
4.
Reproduction and
Modification . IDM will supply Customer with one copy of the
Software. Customer may reproduce the Software as required for
archival and disaster recovery purposes. All copies of the Software
shall contain all of IDM’s copyright and any other
restrictive and proprietary notices in form and content as they
appear on the Software provided hereunder to Customer.
Customer shall not reverse assemble or reverse compile the Software
in whole or in part, or permit or allow any other party to do
so. Modification, adaptation, or enhancement of the Software
for the benefit of Customer by a party other than IDM may interfere
with IDM’s ability to fulfill its support obligations
hereunder, as well as its proprietary rights in the Software, and
is not
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permitted without prior written
consent of IDM. Any such modification, adaptation,
enhancement or other derivative work shall be property of IDM and
Customer shall execute any and all documents necessary to assign
such to IDM.
5.
Hardware and Third-Party
Software . For the primary and disaster recovery system,
the Customer will purchase the Hardware and the Third-Party
Software identified in Schedule B and priced on Schedule E.
Payment will be due upon receipt of invoice. IDM will install
such Hardware and/or Third-Party Software. All costs relating
to the shipment of the Hardware and Third-Party Software, including
freight and insurance costs, shall be borne by Customer.
6.
Installation
.
As identified on Schedule C, IDM
will install the Software and Third-Party Software on the Hardware
at Authorized Location(s) designated by Customer, and will conduct
IDM’s standard test procedures on the Software to ensure that
installation is complete.
7.
Acceptance
.
The Software and Hardware will be
deemed accepted by Customer when the Software has been installed on
the Hardware and passed the customer’s installation
qualification and operation qualification procedures.
8.
Training
.
IDM will conduct Train the Trainer
classes to train up to 5 employees designated by Customer on the
proper operation of the Software, at a time and place to be agreed
upon by the parties. Travel, lodging & meal costs related
to training, whether incurred by IDM or Customer shall be approved
by Customer before any cost shall be incurred, however the costs
incurred will be the responsibility of the Customer. It is
Customer’s responsibility to ensure that employees using the
Software have been properly trained. When Upgrades to the Software
are released, IDM will offer additional training on Symphony
products to the Customer. Training classes on such Upgrades
to be held at IDM’s office. If such training classes
exceed two days, IDM is entitled to charge Customer no more than
$1,000 per day for each additional day of training. Training class,
travel, and lodging expenses are to be the responsibility of the
Customer.
9.
System Support
.
Customer Support is offered at
execution of this Agreement pursuant to the terms of the IDM
Support Agreement, attached as Schedule D.
10.
Data Protection
.
It is the customer’s
responsibility to perform daily backups of the data on the system
used by the Software so that the likelihood of data loss is
minimized. Customer shall be solely responsible for backup
software and hardware. Customer shall provide safe storage of
all backup tapes and/or disks. Customer shall be responsible
for keeping its computer system free of viruses.
11.
Fees and
Costs.
11.1
Customer agrees to purchase the
following:
See Schedule E.
11.2
The fees do not include any sales
tax and Customer shall be obligated to pay any such sales
tax.
11.3
The Software License and Maintenance
Fee includes any Upgrades and Updates to the Software, which shall
be provided to Customer per Schedule E. If IDM withdraws the
Software, without providing an equivalent or better solution at no
additional cost, with no additional implementation or migration
fees and with no increase in support fees or otherwise ceases to
offer support services, IDM will refund a prorated portion of the
software License and Maintenance fee using a rate of .86 per
donation based on 60,000 donations per year over the seven year
term of this agreement, unless an Article 17 release is
invoked.
11.4
If Customer does not implement
Updates and/or Upgrades within 270 days after delivery, IDM
reserves the right to increase support fees to reasonably reflect
the increased cost of supporting outdated Software. This
additional fee may not exceed $1,000 a month. Additional
services beyond those described in this Agreement will be billed at
IDM’s then-standard hourly rates. Customer agrees to
pay IDM’s reasonable costs and expenses, including travel
costs, associated with any services performed by IDM outside of
IDM’s corporate offices. Invoice terms are net 30 days,
and interest will be charged on overdue invoices at the rate of 12%
per annum.
12.
Confidential
Information . The terms and conditions of
the Confidentiality Agreement dated January 18, 2006 entered into
by the parties, are incorporated into the terms and conditions of
this Agreement..
13.
Warranties and
Disclaimer .
13.1
Limited Warranty.
IDM warrants that
for a period of two hundred seventy (270) days from the date of
First Productive Use, (First Productive Use is defined as the
initial use of the Software to access the database information to
register donors/patients, process blood products or track test
results and/or financial data in the production environment.)
(Warranty Period)
(i)
the Software will perform in
substantial accordance with the IDM’s RFI Response dated
February 6, 2006;
(ii)
the media conveying the Software,
e.g., flashdrives and CD Roms if any, will be free from defects in
materials and workmanship under normal use,
(iii)
the Software received by the
Customer will operate on properly installed and functioning
hardware with third party software, all as identified and
configured as set forth in Schedule B, which IDM represents
is hardware that is in place in at least one other IDM customer
with a similar number of successful draws at the time this
agreement is executed;
(iv)
Third party software currently
required for the proper operation of the Software has been
identified in Schedule B.
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If subsequent Updates or Upgrades of
the Software require additional hardware or software to maintain
reasonable performance, IDM’s release notes will alert the
Customer with reasonable notice.
System and Software
Performance. The
recommended hardware and software requirements set forth in
Schedules A & B shall be sufficient to run and operate the
Software at performance levels that are reasonable given the
Customer’s size and the draw rate of not more than 100,000
per year.
13.2
If existing or future applicable
regulations require an Update of the Software, IDM shall use its
best reasonable commercial efforts to provide a copy of such an
Update to Customer as promptly as possible without any additional
cost to Customer. Pursuant to the FDA’s Medical Device
Reporting Policy, 21C.F.R. Part 803, IDM will notify Customer
immediately in the event of a reported product-related death,
serious injury, or serious illness. IDM agrees to notify
Customer immediately of any communication received from or provided
to the U.S. Food and Drug Administration or other regulatory
authority relating to any actual or potential regulatory action,
warning letter, or violation of law concerning any Product
furnished to Customer under this Agreement. If existing or
future applicable regulations or regulatory guidelines require an
Update of the Software, IDM shall promptly notify Customer of such
fact and will issue such Update in a timely manner.
13.3
THERE ARE NO OTHER EXPRESS OR
IMPLIED WARRANTIES (INCLUDING WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE OR USE) REGARDING THE
SOFTWARE, MAGNETIC MEDIA, DOCUMENTATION, SOFTWARE COPIES,
THIRD-PARTY SOFTWARE, OR HARDWARE, EXCEPT FOR ANY IMPLIED
WARRANTIES WHICH CANNOT BE DISCLAIMED UNDER APPLICABLE LAW. ANY
SUCH IMPLIED WARRANTIES ARE LIMITED IN DURATION TO NINETY (90) DAYS
FROM INSTALLATION OF THE SOFTWARE. IDM DOES NOT WARRANT
THAT THE OPERATION OF THE SOFTWARE WILL BE COMPLETELY UNINTERRUPTED
OR COMPLETELY ERROR-FREE.
Remedies for Breach of
Warranty . If during
the Warranty Period the Software does not conform to the warranty,
Customer’s exclusive remedy and IDM’s sole liability
shall be that IDM shall, at its option, use commercially reasonable
efforts to correct the Software, replace such Software free of
charge or, if neither of the foregoing is commercially practicable,
terminate this Agreement and refund to Customer the License portion
of the fee paid with respect to the applicable Software. The
warranty set forth above is made to and for the benefit of Customer
only. No action for any breach of warranties under this
Agreement may be commenced more than two years following the
breach of the applicable warranty. The warranty will apply
only if:
(a) the Software
has been properly installed and used at all times and in accordance
with the IDM’s specifications;
(b) no
modification, alteration or addition has been made to the Software
by persons other than IDM or IDM’s authorized
representative;
(c) Customer has
not requested modifications, alterations or additions to the
Software; and
(d) the Software
has not been
(i) subject to accident, unusual
physical, electrical or electromagnetic stress, neglect, misuse,
failure of electric power, air conditioning or humidity control,
or
(ii) operated with other media not
meeting or not maintained in accordance with the
manufacturer’s specifications.
14.
Limitation of
Liabilities .
14.1
IN NO EVENT WILL EITHER PARTY BE
LIABLE FOR ANY LOST PROFITS, LOST DATA, OR OTHER CONSEQUENTIAL,
INCIDENTAL, SPECIAL, OR INDIRECT DAMAGES ARISING OUT OF OR RELATED
TO THIS AGREEMENT, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES OR LOSSES.
14.2
EXCEPT FOR THE DUTY TO INDEMNIFY
AGAINST THIRD PARTY CLAIMS, WILFUL MISCONDUCT AND FRAUD,
IDM’S LIABILITY TO CUSTOMER FOR ANY AND ALL CLAIMS IN ANY WAY
RELATED TO THE SOFTWARE OR THIS AGREEMENT SHALL NOT EXCEED THE
LICENSE FEE PAID BY THE CUSTOMER
14.3
IN THE CASE OF INDEMNIFICATION FOR
BREACH OF WARRANTY OR NEGLIGENCE, AS DESCRIBED IN PARAGRAPH 16,
IDM’S LIABILITY, INCLUDING BUT NOT LIMITED TO ALL DAMAGES,
COSTS FEES AND EXPENSES, SHALL BE LIMITED TO $3,000,000. IDM
AGREES TO MAINTAIN INSURANCE WITH A MINIMUM OF $3,000,000 IN
AGGREGATE LIABILITY INSURANCE AND SHALL ADD CUSTOMER AS AN
ADDITIONAL INSURED ON SAID INSURANCE POLICY AT THE REQUEST OF
CUSTOMER.
15.
Indemnification
.
15.1
IDM may defend at customers option,
indemnify and hold harmless Customer, its employees, agents,
officers, and directors from and against any claims, liability,
damages, losses, fees and expenses, arising from a claim that the
Software, when used as authorized and in accordance with the
Documentation, infringes upon any third party’s patent,
copyright or trade secret rights. IDM will also defend,
indemnify and hold harmless Customer, its employees, agents,
officers, and directors from and against any liability, damages,
losses, fees and expenses to the extent, and in such proportion,
that such liability, damages, attorney fees, losses, fees and
expenses are caused by or arise from IDM’s negligence or
breach of agreement and are not caused by or do not arise from
Customer’s negligence or violation of its obligations under
this Agreement. Customer will defend, indemnify and hold harmless
IDM, its employees, agents, officers, and directors from and
against liability, damages, losses, fees and expenses to the
extent, and in such proportion, that such liability, damages,
losses, attorney fees, fees and
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expenses are caused by or arise from
Customer’s negligence or breach of its obligations under this
Agreement and are not caused by or do not arise from IDM’s
negligence or breach of agreement.
15.2 If any third party makes a claim covered by
this Section against an indemnitee with respect to which such
indemnitee intends to seek indemnification under this Section, such
indemnitee shall give notice of such claim to the indemnifying
party, including a brief description of the amount and basis for
the claim, if known. Upon receiving such notice, the
indemnifying party shall be obligated to defend such indemnitee
against such claim, and shall be entitled to assume control of the
defense of the claim with counsel chosen by the indemnifying party,
reasonably satisfactory to the indemnitee. Indemnitee shall
cooperate fully with, and assist, the indemnifying party in its
defense against such claim in all reasonable respects. The
indemnifying party shall keep the indemnitee fully apprised at all
times as to the status of the defense. Notwithstanding the
foregoing, the indemnitee shall have the right to employ its own
separate counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such indemnitee. The
indemnifying party may not settle a claim under this Section
without the consent of the indemnitee, which consent shall not be
unreasonably withheld, except that the indemnifying party may
settle without the consent of the indemnified party if (a) the
settlement entails no finding or admission of any violation of the
rights of any third party by the indemnified party; (b) the
settlement has no effect on any other claims that may be made by
the indemnified party, and (c) no injunctive or other
equitable relief is entered against the indemnified party (other
than the cessation of use of the Software), and the settlement is
otherwise for money damages for which the indemnified party is
fully indemnified. Notwithstanding the foregoing, the
indemnitee shall retain, assume, or reassume sole control over all
expenses relating to every aspect of the defense that it believes
is not the subject of the indemnification provided for in this
Section. Until both (a) the indemnitee receives notice from
indemnifying party that it will defend, and (b) the indemnifying
party assumes such defense, the indemnitee may, at any time after
ten business days from the date notice of claim is given to the
indemnifying party by the indemnitee, resist or otherwise defend
the claim or, after consultation with and consent of the
indemnifying party, settle or otherwise compromise or pay the
claim. The indemnifying party shall pay all costs of
indemnitee arising out of or relating to that defense and any such
settlement, compromise, or payment. The indemnitee shall keep
the indemnifying party fully apprised at all times as to the status
of the defense. Following indemnification as provided in this
Section, the indemnifying party shall be subrogated to all rights
of the indemnitee with respect to the matters for which
indemnification has been made. The indemnitee shall undertake
to repay any advanced funds to the extent that it is ultimately
determined that the indemnitee is not entitled to such
indemnification.
16.
Term and
Termination . This Agreement shall commence as of the date by
which both parties have signed this Agreement, and shall terminate
on March 31, 2014. Either party shall have the right to terminate
this Agreement in the event that: (i) the other party becomes
insolvent or bankrupt, or files a voluntary petition under the
Bankruptcy Code, or admits in writing its inability to pay its
debts as they mature, or makes an assignment for the benefit of
creditors, or ceases to be a going concern ; or (ii) the other
party becomes subject to bankruptcy, reorganization, insolvency,
receivership or trusteeship proceedings in any federal or state
court, in which proceedings are not dismissed within ninety days
after filing. In addition, either party shall have the right
to terminate the Agreement in the event that the other party
commits a material breach of its obligations under this Agreement
and such breach continues for a period of thirty (30) days after
written notice of such breach has been given. Upon termination, the
license granted to Customer hereunder shall terminate and all
copies of all Software and Documentation are to be returned or
caused to be returned by Customer to IDM at the address indicated
in this Agreement, and Customer shall certify in writing that all
copies of the Software and Documentation have been returned.
Paragraphs 1, 2, 12, 13.3, 15, 16 and 19-28 shall survive the
termination of the Agreement.
17.
Software Escrow
.
The parties agree that within
thirty (30) days after selection of a mutually acceptable
commercial software escrow company and execution by the parties of
the selected escrow agent’s escrow deposit and maintenance
agreements, IDM will deposit and thereafter maintain with the
escrow agent copies of the Source Code for the most current
release, and the previous release, of the Software. So long
as Customer is receiving support services, IDM will deposit a copy
of the Source Code for each Upgrade or Update delivered to Customer
no later than thirty (30) days after delivery of the Upgrade or
Update to Customer for use in its production environment.
Escrow Agent shall return to IDM the Source Code for the oldest
release of the Software if and when more than two full releases of
the Source Code have been deposited.
The escrow agent shall deliver all
copies of the Source Code for the Software to Customer (upon
compliance with the release procedures set forth in the escrow
agreement) in the following circumstances:
a.)
IDM fails or refuses to provide
maintenance and support services to Customer for the Software in
breach of its obligations under the provisions of this agreement
relating to support services (which breach has continued for a
period of fifteen (15) days following written notice thereof by
Customer to IDM, provided however if more than fifteen (15) days
are reasonably required to remedy such material breach, then IDM
shall have an additional period of time to remedy such breach
provided IDM immediately implements a workaround ;
b.)
IDM discontinues support or
maintenance for the Software without providing an alternative
during the term of the agreement; or
c.)
IDM dissolves or ceases to conduct
business in the ordinary course or becomes insolvent, files or
becomes bankrupt, makes an assignment for the benefit of creditors,
has a trustee or receiv
