TECHNOLOGY LICENSE AND ADMINISTRATIVE SERVICES AGREEMENT

 

EXHIBIT 10.13

TECHNOLOGY LICENSE AND ADMINISTRATIVE SERVICES AGREEMENT

The terms of this Technology License and Administrative Services Agreement (this or the “Agreement” ) are agreed to by and between [organization], a [state] [professional association] ( “Group” ), and Hythiam, Inc., a Delaware corporation (“ Hythiam ”) (each, a “ Party ” and, collectively, the “Parties” ).

AGREEMENT TERMS

Hythiam provides through its proprietary treatment program  for treatment of substance abuse (“ Program ”), its Data Collection and Data Reporting (as defined in Section 4.2 ), its Administrative System (as defined in Section 4.4) and other associated Hythiam Intellectual Property (as defined in Section 7.5 ) and other Services (as defined in Section 4 ) a process for use by health care providers in screening, diagnosing and treating patients with or suspected of addiction to or dependence on alcohol or psycho-stimulants, including cocaine, crack cocaine and methamphetamine, and related conditions (collectively, the “Licensed Technology” ).  Group desires to be able to offer to patients presenting to Group’s medical offices located at:

(each a “ Facility ”), and third party payers services that include use of the Licensed Technology.

 

 

Group and Hythiam are and shall remain independent contractors throughout the Term.  Nothing in this Agreement shall be construed to constitute Group and Hythiam as partners, joint venturers, agents or anything other than independent contractors.

Subject to the terms and conditions of this Agreement, Hythiam hereby grants to Group, and Group hereby accepts, a limited non-transferable, restricted, non-exclusive, revocable, commercial license to operate and use the Licensed Technology identified generally in more detail on Schedule A at a Facility for the purposes set forth on Schedule A without the right to sublicense the foregoing rights (the “Hythiam License” ).  Group acknowledges that: (i) this Agreement does not transfer any interest in the ownership or title of any portion of the Licensed Technology; and (ii) Group does not own any portion of the Licensed Technology.

The Hythiam License shall terminate in total simultaneously with the expiration or earlier termination for any reason of this Agreement; provided that Group may complete any Episode of Treatment (as defined in Schedule A) that it has commenced with a patient as of the date of any termination.

Group may use all or any part of the Licensed Technology only for the purposes set forth in this Agreement and only at a Facility. Without limiting the generality of the foregoing, Group shall not, nor shall it permit any third party to: (a) copy, modify, market, reproduce, sell or distribute the Licensed Technology other than as actually necessary and then only in strict accordance with this Agreement for delivery of patient care services and billing third parties for reimbursement of those services; (b) make the Licensed Technology or Services available to any individual or entity other than Group Personnel or Group Physicians (as those terms are defined in Section 4.1 ) who are then Authorized Users (as defined in paragraph 3 of Schedule A ) and who have been informed by Group of, and are bound by, the terms and conditions of this Agreement; (c) modify or create derivative works based upon the Licensed Technology; (d) rent, lease, grant a security interest in, or otherwise transfer or attempt to transfer any rights in or to the Licensed Technology; or (e) remove, alter or deface any legends, restrictions, product identification, copyright, trademark or other proprietary notices from the Licensed Technology.

3.4.1           GROUP SHALL (A) KEEP THE LICENSED TECHNOLOGY FREE AND CLEAR OF ANY AND ALL CLAIMS, LIENS AND ENCUMBRANCES INCURRED OR CAUSED BY GROUP, (B) NOTIFY HYTHIAM PROMPTLY IF AND WHEN IT BECOMES AWARE OF ANY USE OR DISCLOSURE OF ALL OR PART OF THE LICENSED TECHNOLOGY NOT AUTHORIZED BY THIS AGREEMENT AND (C) BE RESPONSIBLE FOR ALL THE COST AND ALL LIABILITY OR RISK OF LOSS ASSOCIATED WITH THE USE BY GROUP OF THE LICENSED TECHNOLOGY AS CONTEMPLATED BY AND IN THIS AGREEMENT ARISING FROM THE ACTION OR FAILURE TO ACT OF GROUP.  THE RIGHTS SET FORTH IN THIS SECTION 3 REPRESENT GROUP’S ONLY RIGHTS WITH RESPECT TO THE USE OF ALL OR ANY PORTION OF THE LICENSED TECHNOLOGY.  ANY USE OF ALL OR ANY PORTION OF THE LICENSED TECHNOLOGY OUTSIDE THE SCOPE OF SUCH RIGHTS IS STRICTLY PROHIBITED.

 

 

Hythiam will deliver to Group the Licensed Technology as set forth on Schedule A .  Only Group’s physician employees or contractors ( “Group Physicians” ) and its non-physician employees (collectively, “Group Personnel” ) who at the time are Authorized Users shall have access to or use the Licensed Technology, and only in accordance with this Agreement.  In addition, at all times during the Term: (a) all Group Physicians shall be admitted to active medical staff privileges without significant limitation by a hospital whose service area overlaps that of Group; (b) at least one Group Physician shall be currently certified in addiction medicine by the American Society of Addiction Medicine or the American Academy of Addiction Psychiatry or recognized (in the reasonable judgment of Hythiam) as an expert in addiction medicine by his or her peers, and such physician shall assume an active supervisory role in the delivery of treatments utilizing the Licensed Technology, and (c) Group shall identify an overnight custody for patients during treatment through a relationship with a hospital or residential treatment center of recognized quality and reputation (in the reasonable judgment of Hythiam) for patients requiring in-patient medical care during treatment; provided, that Group shall choose when to admit or not admit patients and maintain complete control over its clinical judgment.

Hythiam has developed proprietary business processes that it uses to process and report data generated from the use of the Licensed Technology ( “Data Reports” ).  As part of the Services, Hythiam may, subject to its obligation to fully comply with the terms of Schedule C setting forth its obligations with regard to Protected Health Information (“ PHI ”) as a business associate, as those terms are defined under the Health Insurance Portability and Accountability Act of 1986, as amended and its implementing rules and regulations (collectively, “ HIPAA ”), collect encounter, treatment and outcomes data on behalf of Group, including follow-up patient surveys, in which event it will provide, or arrange for the provision of, Data Reports to Group for treatment performed by or on behalf of Group using the Licensed Technology, all as set forth in more detail on Schedule A ( “Data Collection and Reporting” ).

Hythiam will perform marketing services to promote use of the Licensed Technology as set forth in more detail below.  Hythiam has and will continue to maintain a consumer website, public relations initiatives, advocacy development, a publication strategy, a national call center and brand development and promotion activities.  As to the activities of Group involving the Licensed Technology, Group shall assist with marketing efforts. Group shall at no additional cost to Hythiam and in compliance with Laws (as defined in Section 15.12 ) and Group’s professional judgment, refer to the PROMETA® Treatment Program in its institutional advertising and other promotional programs, including classified telephone directory and other print advertising, Group’s website and presentations to referring physicians, and ensure that any such references enjoy equal billing with Group’s other substance abuse care and treatment services. Group shall be responsible for the cost of production and distribution of marketing materials using the Hythiam templates.  Any references to the Prometa™ Treatment Program or use of other Hythiam marks that is different from that provided specifically to Group in Hythiam marketing materials or templates shall be approved in advance in writing by Hythiam.  Notwithstanding the foregoing, Group shall be solely responsible for compliance of its marketing and promotional activities with Laws.

Group has reviewed Hythiam’s Practice Management Program, a comprehensive proprietary medical office practice management guide available to Hythiam’s licensees and their respective office staffs (“ Administrative System ”), which sets forth the tools, processes, and suggested forms and procedures for aligning Group’s practice goals with its patient treatment goals.  Group has determined

 

 

that it desires to implement the Administrative System and finds it consistent with its practice goals and philosophy.  Hythiam shall provide the Administrative Systrem to Group for Group’s implementation and use pursuant to this Agreement,   Hythiam will provide Group’s administrative staff with training and education on how to implement and utilize the Administrative System.

Group shall be responsible for, and Hythiam shall, on behalf of Group, pay for, Continuing Care for Group’s patients treated using the Licensed Technology, in each case, as set forth in more detail in paragraph 6 of Schedule A ( “Continuing Care Services” ).

As part of the Services, Hythiam will provide education and training to Group Personnel and Group Physicians who are or are in process of becoming Authorized Users as reasonably necessary concerning the implementation and use of the Licensed Technology ( “Education Services” ).  These Education Services shall be informational only and will not reduce or limit in any way Group’s responsibility for clinical services provided using the Licensed Technology as set forth in Section 6.2 and elsewhere in this Agreement.  The costs of any travel or lodging incurred by Group Personnel or Group Physicians to attend education or training seminars shall be paid by Group.  In addition, Hythiam reserves the right (a) to seek reimbursement from Group for any change fees and similar costs incurred by it in the event that a training session is rescheduled at Group’s request and (b) to charge Group at the rate of $______ per day plus reasonable expenses in the event that more than two training sessions are required or requested by Group in any period of 12 consecutive months during the Term.

Hythiam will provide the Licensed Technology as set forth in Section 4.1 , the Data Collection and Reporting as set forth in Section 4.2, the Marketing Services as set forth in Section 4.3 , the Appointment Services as set forth in Section 4.4 , Continuing Care Services as set forth in Section 4.5 , and the Education Services as set forth in Section 4.6 (collectively, “Services” ) in a competent and timely manner and in compliance with Laws.

Group acknowledges and agrees that in order to provide the Data Collection and Reporting and the Educational Services, Hythiam authorized personnel will require access to patient treatment sessions.  Group agrees to allow and facilitate this access, including the use of Group’s reasonable efforts to obtain any and all necessary patient authorizations or consents.  Group shall require all Group Personnel to cooperate with the Hythiam Authorized Personnel with respect to the delivery of Services.

Group agrees that it will provide treatment using the Licensed Technology to patients in a non-discriminatory manner, available on a regular work week basis, which may, in the discretion of Group and dependent on patient demand, include some weekend coverage, in a setting which is at least comparable to that in which it generally provides similar patient care services, and with the provision of ancillary ( e.g., laboratory, radiology, blood banking) and support ( e.g., housekeeping, pharmacy, dietary, security) services as reasonably necessary and in accordance with standards of timeliness and quality consistent with its provision of other patient care services.

In addition, Group shall provide, subject to availability, appropriate office space on-site for Hythiam personnel who are involved in providing Services upon advance notice of Hythiam personnel’s desire to use such office space while providing Services.

 

 

Group agrees to provide or arrange for the provision of billing and collection services for treatment provided by Group using the Licensed Technology and to provide those services in a non-discriminatory manner with the timeliness and quality of those services consistent with Group’s billing and collection provided for its other patient care services.

Group shall appoint a Group representative who will be reasonably available to, and coordinate and consult with, the Hythiam Authorized Representative to facilitate the provision of the Services.

5.1.1           During the Term of this Agreement, Group shall timely remit the License and Service Fees and Continuing Care Fees as set forth in paragraph 7 of Schedule A, according to the terms set forth in Section 5.2 of this Agreement.  During the Term, the Fees may be modified only by mutual agreement of the Parties, except that Hythiam may at its discretion lower any Fee (and thereafter raise it to no more than the original amount) effective 30 days after receipt by Group of notice from Hythiam to such effect .  Any and all services requested by Group and provided by Hythiam other than those set forth in Section 4 shall be subject to additional fees to be agreed upon in writing by the Parties.

5.1.2           Group shall also pay to Hythiam a one-time Administrative Service Fee of $_______. Payments of $_______ will be made by check or wire transfer to Hythiam in the amount if $_______ on or before the Effective Date, as a condition precedent to this Agreement becoming of force and effect, and $_______ on or before ___ days after the completion of clinical training of Group by Hythiam for use of the Licensed Technology. This fee shall cover the start-up costs incurred by Hythiam for site initiation, preparation of standard operating procedures, facility manuals, training and education of site personnel in the use of the Licensed Technology, including travel expenses and miscellaneous other start-up costs unique to this Agreement.  Any failure by Group to make the second $_______ payment in a timely manner shall automatically and immediately suspend Group’s right to use the Licensed Technology and shall be deemed a default of a material obligation of this Agreement by Group pursuant to Section 10.2.3 and 10.3 (i).

Group will deliver to Hythiam within three business days following the end of every calendar month during the Term, (i) a report identifying the number and type ( e.g., alcohol) of patients treated using the Licensed Technology during the monthly period covered by the report, the total fees charged to such patients, and the amounts collected to date with respect to those patients; and (ii) a check payable to Hythiam in the amount of the Fees (computed as provided in this Section 5.2 and Schedule A) . Within ten days after month end Hythiam will invoice Group for any unpaid License and Service Fees and Continuing Care Fees that are due under this Agreement and Group will pay any undisputed invoices within ten days after receipt by Group.  Hythiam shall have the right to charge and collect a late fee on any amounts that are delinquent in accordance with the terms of this Agreement. Notwithstanding any other provision of this Agreement and subject to the terms of the Continuing Care Services set forth in Schedule A , Hythiam in no event or circumstance is or shall be responsible for any costs of, or related to, patient care provided by Group, or extended or unanticipated care required for patients treated using the Licensed Technology.

 

 

To facilitate payment and compliance with the terms of this Agreement, the Parties will meet as needed upon ten days’ written notice (which, for purposes of this Section 5.3 , may take the form of email) by either party, for purposes of reconciling payments and fees.  In preparation for this meeting, each Party will provide reasonable access to its books and records regarding any and all detail reasonably necessary to reconcile payments and ensure that Hythiam receives the Fees in compliance with this Agreement.  In addition, Group will investigate and resolve promptly and thoroughly any evidence that all or any part of the Licensed Technology is being used in cases that are not reported for purposes of this Section 5 .  Any such unreported uses of the Licensed Technology shall be included by Group in the next monthly report contemplated by Section 5.2 .

Group and Hythiam each will use best efforts to identify opportunities to include reimbursement for treatment utilizing the Licensed Technology in, and will use commercially reasonable efforts to negotiate amendments to, Group’s existing payer contracts (and to identify prospects and negotiate all future payer contracts) to arrange for inclusion of coverage for treatment utilizing the Licensed Technology, including contracts with HMOs, PPOs, other managed care companies, insurers, employers, unions, employee assistance programs or vendors, behavioral health programs or vendors or other third-party payers.

Group agrees that its use of the Licensed Technology will be in strict accordance with the procedures provided by Hythiam and will comply with Laws and third party payer requirements.  Hythiam reserves the right, upon five (5) business days notice and during normal business hours and in strict compliance with HIPAA and Laws, to inspect (or retain a third party to inspect) the patient medical records of individuals who have undergone treatment utilizing the Licensed Technology to test Group’s compliance with the foregoing restrictions on use.  In addition, Hythiam reserves the right, upon five (5) business days notice and during normal business hours, to inspect (or retain a third party to inspect) financial and administrative records, including appointment books, purchase requisitions and other administrative records, supply orders, and patient correspondence, to ensure contract compliance and accuracy in reporting.

Only Group Personnel or Group Physicians who have received education and training on the use of the Licensed Technology may use the Licensed Technology, and Group will ensure (and provide Hythiam with evidence satisfactory to Hythiam) that all Group Personnel or Group Physicians who use any or all of the Licensed Technology on its behalf are bound by the applicable terms of this Agreement and will have and maintain, all training, licenses, approvals, certification, equipment and information necessary for them to safely and properly use the Licensed Technology. Group will report promptly to Hythiam any knowledge it acquires that the Licensed Technology is being used in a manner not in strict accordance with this Section 6.1 , or otherwise with this Agreement.  Notwithstanding the foregoing, this Section 6.1 is not intended to restrict or limit in any way each Group Physician’s responsibility to exercise his or her clinical judgment in treating patients, but instead to protect Hythiam’s interest in and to its Licensed Technology and the integrity of that Licensed Technology.

The Licensed Technology is provided by Hythiam to Group and, by extension, Group Personnel and Group Physicians as additional points of information and not, in whole or in part, as medical advice, diagnosis or treatment recommendations.  The Parties acknowledge and agree that Hythiam in performing its obligations under this Agreement is providing access to technology and technology

 

 

services only and will not be delivering patient care and will not be sponsoring or performing human subjects research.  Group, as between the Parties, and Group Physicians, as appropriate consistent with Laws, control and are fully responsible for any and all patient care, Continuing Care or research activity delivered by Group, Group Personnel or Group Physicians using the Licensed Technology.  Group Personnel and Group Physicians shall at all times exercise their independent professional judgment when treating patients, providing Continuing Care, referring to other providers or performing research using the Licensed Technology.

Group shall notify Hythiam of Group’s charges for provision of care using the Licensed Technology as determined by Group pursuant to Section 8 of Schedule A .  Group agrees that its intent is to provide clinical services utilizing the Licensed Technology at commercially reasonable market rates.  Accordingly, if and when Group revises its charges for clinical care utilizing the Licensed Technology, Group will provide advance notice to Hythiam and will consider in good faith any recommendations provided by Hythiam with respect to the relationship of those charges to market rates.  Notwithstanding the foregoing, Group is solely responsible for setting its charges for clinical services or research activities performed using the Licensed Technology or Services and for the compliance of those charges with applicable Laws.

In billing any charges to patients or third-party payers that include clinical services or research activities performed using the Licensed Technology or Services, Group shall comply with the provisions of 18 U.S.C. Section 1347, with Medicare/Medicaid and other Federal Health Care Program billing requirements, and with the False Claims Act, 31 U.S.C. Section 3729, et seq. , and any and all other applicable Laws.

Hythiam acknowledges and agrees that, as between the Parties, all patient medical records shall be the property of Group.  Group agrees that Hythiam shall have access at all times to all patient records for patients provided care using the Licensed Technology ; provided that this access shall be in compliance with all Laws, including HIPAA.  In addition, Group shall provide to Hythiam for prompt downloading and/or processing in an agreed upon format all patient data collected or maintained by Group, Group Personnel or Group Physicians with respect to each individual provided care using all or part of the Licensed Technology ( “Subject Data” ).  The Business Associate/Data Use Agreement attached to this Agreement as Schedule C shall govern the use and disclosure by Hythiam of the Subject Data.

Group shall be solely responsible for obtaining any and all necessary patient consents or authorizations, and any and all approvals or licenses from regulatory bodies or other authorities, that are required by Laws or Group policy for Hythiam’s delivery of the Services, Group’s use of the Licensed Technology, and the provision of the Subject Data to Hythiam, all in accordance with this Agreement, including any authorizations or consents necessary for disclosure of data to Hythiam by Continuing Care providers.  Without limiting Group’ obligations in the foregoing sentence, Group shall provide Hythiam advance written notice if it determines it needs any regulatory approvals or licenses for its use of Licensed Technology.

Hythiam shall assist Group in the preparation of, and Group shall consult Hythiam far enough in advance to allow for Hythiam’s substantive input concerning, all reports, statements, declarations, and the

 

 

like required to be made to governmental entities or third-party payers (including cost, payment and reimbursement requests and reports) with respect to patient care provided by Group or Group Physicians using the Licensed Technology.  Group shall cooperate in making any such submissions, which will not be prepared according to any policies or methodologies that discriminate against care provided using the Licensed Technology, and shall file the same.  Notwithstanding the foregoing, Group shall notify Hythiam prior to submission of any reimbursement requests to governmental payers for care using the Licensed Technology.  This Section 6.7 does not limit Group’ sole responsibility for the content of these submissions for reimbursement, nor does it create any responsibility on the part of Hythiam for that content, but instead is intended only as protection against Group’ discretionary discrimination against care provided using the Licensed Technology.

Group and Hythiam agree to reasonably cooperate with each other in any mandated or required external audits of Group’s or Hythiam’s operations by governmental entities and other unrelated third parties.  Such cooperation shall include notifying the other Party within one week of receipt of any such audit notice and making available to the other Party reasonably relevant books and records.

Group shall be responsible for obtaining and maintaining all material permits, licenses and authorizations under, and shall comply in all material respects with, all environmental laws and regulations with respect to Group’s property.  As between the Parties, Group will be the generator of all hazardous materials (including but not limited to chemical and radioactive substances and waste) used at any treatment locations as may be authorized hereunder and shall handle all hazardous materials, if any, in compliance with all legal requirements and Group’s policies and procedures.

Hythiam shall be solely responsible for compensating all personnel employed by Hythiam.  Group shall have no liability for the payment of wages, fees, payroll taxes, employee benefits and other expenses of Hythiam staff, except or unless as provided in this Agreement.

Group shall be solely responsible for compensating all Group Personnel and Group Physicians.  Hythiam shall have no liability for the payment of wages, fees, payroll taxes and other expenses of such staff, except or unless as provided in this Agreement.

All rights and licenses of any kind in the Licensed Technology and Services not expressly granted in this Agreement are reserved exclusively to Hythiam.  There shall be no licenses by implication to Group, any Group Personnel, or any Group Physician under this Agreement, and Group agrees not to attack or contest, in any way or in any forum, the validity, enforceability, or Hythiam’s ownership of, or rights in, the Licensed Technology and Services, to the maximum extent permitted by Law.

Except as expressly provided for in this Agreement, Hythiam and Group shall each retain all Intellectual Property that they owned prior to the Effective Date, and this Agreement shall not be interpreted or construed to grant a Party any rights, title, interest or license in the other Party’s preexisting Intellectual Property.

 

 

To the best knowledge of Hythiam, Hythiam’s predecessors in interest developed the Licensed Technology independently, and use of the Licensed Technology by Group in compliance with the terms hereof will not infringe upon the proprietary rights of any third party.

Group acknowledges and agrees that, as between Hythiam and Group, all right, title and interest in and to the Licensed Technology shall be solely and exclusively owned by Hythiam.  If Group creates, conceives, develops, invents or reduces to practice any inventions (whether or not patentable), documented records of invention or patent disclosures, derivative works, continuations, continuations-in-part, enhancements, trade secrets, know-how, show-how, discoveries, improvements, innovations, ideas, industrial models, processes, methods, formulae, compositions, findings, research and development information, data, databases, content, electronic data files, training manuals, user guides, manufacturing, engineering and technical drawings, manufacturing and production processes and techniques, software and computer programs (in object code and source code), business information and plans, technical knowledge and information, maintenance information, mask works, integrated circuit topographies, confidential information, and all other items with similar characteristics, arising out of or related to the Licensed Technology (collectively, the “Licensee Modifications” ), Group agrees to assign, and hereby irrevocably assigns, all of Group’ right, title and interest in and to the Licensee Modifications to Hythiam, including any Intellectual Property rights; provided, however, that Group shall not during the Term be charged any additional fees for its use of such Licensee Modifications to the extent that such Modifications become part of the PROMETA ^® Treatment Program whose use by Group as part of the Licensed Technology is subject to this Agreement.  Group agrees to take or cause to be taken such further actions, to execute, deliver and file or cause to be executed, delivered and filed such further instruments, documents and agreements, and will obtain such consents or waivers, as may be necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this agreement at Hythiam’s cost.  Group further agrees to ensure that all Group Personnel and/or Group Physicians who are involved in any way with the Licensee Modifications agree (i) to assign and do assign all of their right, title and interest in the Licensee Modifications, including, without limitation, all Intellectual Property related thereto, to Group (who in turn shall assign and hereby assigns the same to Hythiam as set forth in this Section 7.3 ) and/or to assign all such rights directly to Hythiam; and (ii) to waive all moral rights and agree to never assert any moral rights in the Licensee Modifications.  Group agrees that for purposes of this Agreement the term “moral rights” means any rights of paternity or integrity, including any right to claim authorship of a copyrightable work, to object to a modification of such copyrightable work, and any similar right existing under the judicial or statutory law of any country in the world or under any treaty, regardless of whether or not such right is denominated or generally referred to as a “moral right.”  Group hereby waives and agrees never to assert any moral rights that Group may have in any Licensee Modifications, and Group hereby further agrees to obtain waivers from Group Personnel and/or Group Physicians to any moral rights that they may have in any Licensee Modifications.  Hythiam shall be solely entitled to and shall be solely responsible for, at its sole expense, filing, having filed, prosecuting, having prosecuted, maintaining and having maintained all patents and patent applications, as applicable, relating to the Licensee Modifications.  Notwithstanding the foregoing, Group shall be solely responsible at its sole expense, for compliance with any and all Laws, regulations, policies, procedures and guidelines relating to Group’s use of the Licensed Technology.  The Parties acknowledge and agree that upon creation and assignment to Hythiam, the Licensee Modifications shall automatically without further action by either Party become part of the Licensed Technology.  Group will promptly disclose and deliver to Hythiam all Licensee Modifications.

Each Party recognizes that the name, logo and trademarks of the other Party represent valuable assets of such entity and that substantial recognition and goodwill are associated with such assets.  Each Party hereby agrees that neither it nor any of its affiliates shall use the name, logo or any other trademarks of the other Party without the prior written consent of the other party, which will not be unreasonably withheld or delayed.  No Party will acquire any right, interest or license in any trademark or service mark of the other Party by virtue of this Agreement.  Where possible, Group will approve the use

 

 

of its name in documents for broad dissemination such that Hythiam, once securing approval for use in a brochure or other document, will not need to secure approval for each use of the brochure or document; provided, however, that after termination of this Agreement: (a) the Parties shall reasonably promptly cease referring to the other Party in their respective marketing materials; and (b) neither Party shall comment for publication on the circumstances of termination except as required for compliance with Laws, including but not limited to the U.S. securities laws.

For purposes of this Agreement, “ Intellectual Property ” shall mean all intellectual property and proprietary rights worldwide (whether or not registered or registrable, patented or patentable) including patents (including U.S. Patent Nos. 6,103,734 and 7,186711 B2 and any and all other patent applications or filings), copyrights, trademark rights, trade secret rights, know-how, show-how, discoveries, improvements, moral rights, semiconductor chip rights, and rights in ideas, inventions, innovations, Confidential Information, industrial models, processes, methods, formulae, compositions, findings, research and development information, databases, industrial designs, content, electronic data files, training manuals, user guides, drawings, techniques, software, computer programs (in object code and source code), business information, business plans, technical knowledge, technical information, maintenance information, brochures, labels, mask works, integrated circuit topographies, and all other items with similar characteristics, along with all other similar rights and all applications, registrations, divisionals, continuations, continuations-in-part, re-examinations, extensions, reissues and foreign counterparts and documented records of invention or patent disclosures or the like in and to any and all of the foregoing.  Intellectual Property shall not include the Subject Data, but will include (i) any de-identified information or database created using the Subject Data, (ii) the underlying formats and designs of any reports or other materials containing all or any part of the Subject Data, and (iii) other information or other materials created, derived, developed, improved or otherwise obtained by or on behalf of a Party directly or indirectly using the Subject Data.

Group shall not be liable to Hythiam or its affiliates or any of their respective officers, directors, employees or other agents for, and Hythiam shall indemnify, defend and hold harmless Group and its directors, officers, employees and agents (collectively, the “Group Indemnitees” ) from and against, any and all liabilities, losses, suits, claims, costs, expenses (including reasonable attorneys fees and disbursements), interest, penalties, fines, judgments and actual or direct damages of any kind whatsoever (collectively, “Losses” ) to the extent and proportion that such Losses relate to or arise from (i) negligent acts or omissions or willful misconduct of Hythiam or any of the Hythiam Indemnitees (as that term is defined in Section 8.2 ); or (ii) breach of this Agreement by Hythiam or any of the Hythiam Indemnitees.

Hythiam shall not be liable to Group or its affiliates or any of their respective officers, directors, employees or other agents for, and Group shall indemnify, defend and hold harmless Hythiam and its directors, officers, employees and agents (collectively, the “Hythiam Indemnitees” ) from and against any and all Losses to the extent and proportion that such Losses relate to or arise from (i) negligent acts or omissions or willful misconduct of Group or any of the Group Indemnitees; or (ii) breach of this Agreement by Group or any of the Group Indemnitees.

Each Party shall provide prompt written notice to the other Party upon learning of any occurrence or event that may result in an obligation of the other Party under this Section 8 ; provided that the omission by a Party to give notice of a claim as provided in this Section 8.3 shall not relieve the other Party of its obligations under this Section 8 except to the extent that (i) the omission results in a failure of actual

 

 

notice to the other Party and (ii) the other Party suffers damages as a result of the failure to give notice of the claim.  The other Party shall have the right to maintain control of the defense and all negotiations for settlement of any claims or demands under this Section 8 ; provided, however, the other Party shall not settle any claims or demands without the prior written consent of the Party giving notice (which shall not be unreasonably withheld).  The Party giving notice shall have the right to monitor and participate in any resolution or litigation of any such claim at its own expense, and, if requested, the Party giving notice shall provide to the other Party all reasonable documents and assistance relating to such claim.  Notwithstanding the foregoing, neither Party shall be required to take any action under this Section 8.3 (except for the initial giving of notice) that materially prejudices its rights.

Group shall secure and maintain, with a commercial insurance company approved to do business in the State of _________________ comprehensive general liability insurance with coverage limits of not less than $1,000,000 per occurrence and $3,000,000 per annual aggregate, and shall require each Group Physician to secure and maintain (to the extent not covered by Group’s insurance), professional liability insurance covering Group or such Group Physician, as the case may be, with coverage limits of not less than $1,000,000 per occurrence and $3,000,000 per annual aggregate:

Hythiam shall secure and maintain with a commercial insurance company approved to do business in the State of California Errors & Omissions insurance with coverage limits of not less than $1,000,000 per occurrence and $3,000,000 per annual aggregate and general liability insurance with coverage limits of not less than $1,000,000 per occurrence and $3,000,000 per annual aggregate.

Each Party shall provide to the other Party within ten days of its request certificates of insurance to document the insurance coverages provided by Section 8.4 or Section 8.5 , as applicable, and shall notify the other Party promptly of any material change in this coverage.

Group acknowledges and agrees that the Licensed Technology constitutes valuable trade secrets and confidential information of Hythiam.  Group agrees that it shall take, and shall ensure that Group Personnel and Group Physicians shall take, all reasonable steps to preserve and protect the confidentiality of such trade secrets and confidential information.  Such trade secrets and information shall be deemed “Confidential Information” of Hythiam.  In addition, the terms of this Agreement and all other proprietary business information that Group, Group Personnel or Group Physicians have received or receive from Hythiam or obtain as a result of use of the Confidential Information shall be deemed Confidential