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EXHIBIT 10.9.1
  

 
Integrated Healthcare Holdings Inc. - 1048628
Contract No. 1-15XA0R
June 30, 2011

     
 
Contract Supplement
 
Contract Supplement to Master Information System Agreement No. C0810294, dated
March 31, 2008.
 
THIS CONTRACT SUPPLEMENT, including all Exhibits, Schedules, and Attachments
hereto and incorporated herein (this “Contract Supplement”) amends the agreement
identified above including all Exhibits, Schedules, and Attachments thereto, and
as amended (the “Agreement”), and is made effective as of this 1st day of July,
2011 (the “CS Effective Date”). Unless otherwise expressly set forth in this
Contract Supplement, the terms and conditions set forth in this Contract
Supplement apply only to the Facilities, Software, and/or Services listed
herein. To the extent that this Contract Supplement conflicts with the
Agreement, the terms and conditions of this Contract Supplement shall control.
Where not in conflict, all applicable terms and conditions set forth in the
Agreement are incorporated herein.
     

 
EXHIBITS
A
Facilities, Fees Summary, Payment Schedule and Administration
A-1
Software & Software Maintenance Fee Schedule
A-2
Additional Terms
A-3
Statement of Load and Leave Delivery of Software
B-1
Implementation Services and Education Services Fee Schedule
B-2
Implementation Services Terms
B-3
Reserved
B-4
Subscription Services Fee Schedule
B-4-1
Benchmarks Collaborative Terms
C-1
Equipment and Technology Services Fee Schedule
C-2
Equipment Configuration
C-3
Equipment and Technology Services Terms
C-3-1
Systemcare Additional Terms

  
The pricing in this Contract Supplement and McKesson’s corresponding offer to
Customer expires unless McKesson receives this Contract Supplement signed by
Customer on or before July 1, 2011.
 
McKesson will include Customer’s purchase order (“PO”) number on Customer
invoices if provided by Customer on or before the CS Effective Date. If this
Contract Supplement includes an amount equal to or greater than $10,000, a copy
of Customer's purchase order(s) must be attached. Failure to provide McKesson
with a PO number or copy does not suspend or negate any Customer duty, including
payment, under this Contract Supplement. Pre-printed terms and conditions on or
attached to Customer's PO shall be of no force or effect.
 
By signing this Contract Supplement, Customer acknowledges and agrees that (a)
McKesson has made no warranty or commitment with regard to any functionality not
Generally Available as of the CS Effective Date, whether or not included as part
of Software Maintenance Services, for any of the Software licensed in this
Contract Supplement and (b) Customer has not relied on the availability of any
future version of the purchased Product or any other future Product in executing
this Contract Supplement.
 
In the event the parties fail to execute the Contract Supplement No. 1-U90NM
with or before this Contract Supplement, then this Contract Supplement will be
deemed void.
   
 
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Integrated Healthcare Holdings Inc. - 1048628
Contract No. 1-15XA0R
June 30, 2011

  
  
Each signatory hereto represents and warrants that it is duly authorized to
sign, execute, and deliver this Contract Supplement on behalf of the party it
represents.
      

INTEGRATED HEALTHCARE HOLDINGS, INC. MCKESSON TECHNOLOGIES INC.     By: /s/
Kenneth K. Westbrook                                     By: /s/ Ted
Arneson                                                       Name: Kenneth K.
Westbrook                                     Name: Ted
Arneson                                                        Title:
CEO                                                                        
Title: Enterprise Sales Executive                                   Date:
7/1/11                                                                     
Date:
7/1/11                                                                     
Customer PO No: _________________________  

 
 
 
                                               
FOR MCKESSON INTERNAL USE ONLY
 
  Submit fully executed contract and copy of purchase order to:
  McKesson
  Attn:           Contract Operations
  5995 Windward Parkway
  Mailstop: ATHQ-0111
  Alpharetta, GA 30005
  Fax: 404.338.5161
  Email: Contract.Operations@McKesson.com

     
 
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Integrated Healthcare Holdings Inc. - 1048628
Contract No. 1-15XA0R
June 30, 2011

    
 
EXHIBIT A
 
FACILITIES, FEES SUMMARY, PAYMENT SCHEDULE AND ADMINISTRATION
  
FACILITIES:

     
Customer No.
Data Center Facility
Full Address
1048628
Integrated Healthcare Holdings Inc
1301 North Tustin Avenue
Santa Ana, CA 92705

    

     
Customer No.
Facility
Full Address
1010114
Chapman Medical Center a/k/a Chapman Medical Center, Inc.
2601 East Chapman Avenue
Orange, CA 92869
1029738
Coastal Communities Hospital a/k/a Coastal Communities Hospital, Inc.
2701 South Bristol
Santa Ana, CA 92704
1010478
Western Medical Center Santa Ana a/k/a WMC-SA, Inc.
1001 North Tustin Avenue
Santa Ana, CA 92705
1009285
Western Medical Center Anaheim a/k/a WMC-A, Inc.
1025 South Anaheim Boulevard
Anaheim, CA 92805
(NOTE: It is not necessary to list offices of physicians or other caregivers
with privileges at a Facility.)

 
FEES SUMMARY:

         
Products and Services
Initial Term
One-Time
Fees
Recurring
Fees
Estimated /
T&M Fees
Software (Perpetual):
 
[***]  
[***]
 
Software (Term):
5 years
 
[***]
 
[***] Third Party Software:
5 years
 
[***]
 
Implementation Services:
 
[***]
 
[***]
Benchmarks Collaborative Subscription Services:
5 years
[***]
[***]
 
Equipment:
 
[***]  
   
Technology Services:
 
[***]  
   [***]
 
GRAND TOTALS:
 
$10,895,487
$1,730,602
$203,454

    
[***] Confidential Treatment has been requested for certain redacted provisions
of this exhibit. The redacted provisions are identified by asterisks and
enclosed by brackets. The confidential portions have been filed separately with
the Securities and Exchange Commission.
 
 
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Integrated Healthcare Holdings Inc. - 1048628
Contract No. 1-15XA0R
June 30, 2011

    
    
PAYMENT SCHEDULE:
  
Aggregate Payment Amount:
The total payment amount pursuant to Contract Supplement No. 1-15XA0R for
Software (Perpetual), Implementation Services (Fixed Fee), Quality Benchmarks
Collaborative Subscription Services (One-Time Fees), Equipment (Equipment and
Warranty Uplift) and Technology Services (Professional Services), and Contract
Supplement No. 1-U90NM for System Software (One-Time Fees), System
Implementation & Education Services (One-Time Fees), System Equipment (One-Time
Fees), Third Party Pass Through Equipment (One-Time Fees) and Professional
Services (Data Move & Domain Migration) (One-Time Fees) is $13,159,996 (the
“Aggregate Payment Amount”). The Aggregate Payment Amount shall be paid as
follows:
    
● [***] is due [***] after the CS Effective Date;
● [***] is due [***] after the CS Effective Date;
● [***] is due [***] after the CS Effective Date; and,
● [***] is due [***] after the CS Effective Date (each of the foregoing four
[***] payment milestones shall be referred to herein as a “Payment Milestone”).
   
The foregoing Aggregate Payment Amount will be applied in McKesson’s sole
discretion.Further, Customer acknowledges and agrees that Contract Supplement
No. 1-U90NM contains fees that are not included in the Aggregate Payment Amount
and such fees will be paid in accordance with the payment schedule set forth in
that Contract Supplement.
 
Payment Milestones:
 
(a)   At least [***] days prior to each Payment Milestone due date, Customer may
certify to McKesson in writing (the “Certification”) that [***] pursuant to The
Health Information Technology for Economic and Clinical Health Act (“HITECH
Act”) for making “meaningful use” of qualified electronic health records
technology that is certified under the Stage 1 certification standards as set
forth in the effective final rules of the HITECH Act published on July 28, 2010
(“Stage 1 Standards”) due to a [***] generally and not specific to the Customer.
If Customer provides McKesson the Certification in accordance with the prior
sentence and subject to Customer continuing to provide McKesson with written
re-certifications consistent with the Certification [***] McKesson agrees that
[***]. Notwithstanding the foregoing, McKesson will continue to invoice Customer
pursuant to the payment schedule detailed in this Contract Supplement.
 
(b)   Following [***] and contingent upon Customer continuing to provide
McKesson with written re-certifications consistent with the Certification every
[***] McKesson agrees that [***].
   
(c)   The foregoing subsections (a) and (b) shall no longer apply once the
[***]. Further, except as set forth in the foregoing subsections (a) and (b),
McKesson may pursue all remedies under this Contract Supplement or available by
law in connection with late payments or non-payments by Customer.
  
(d)   McKesson makes no commitment of any kind with respect to Customer’s
ability to (1) demonstrate “meaningful use” as such term may be defined pursuant
to the HITECH Act, or (2) receive Incentive Payments.

   
[***] Confidential Treatment has been requested for certain redacted provisions
of this exhibit. The redacted provisions are identified by asterisks and
enclosed by brackets. The confidential portions have been filed separately with
the Securities and Exchange Commission.
 
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Integrated Healthcare Holdings Inc. - 1048628
Contract No. 1-15XA0R
June 30, 2011

       

     
Software Maintenance Services:
 
The first annual Software Maintenance Services fee is due [***] months after the
CS Effective Date. Subsequent annual Software Maintenance Services fees will be
due [***] in advance.
Software (Term):
  For Term Software: Unless other payment terms for specific Term Software are
stated in this Contract Supplement, the first annual fee is due, in advance, on
the CS Effective Date. Subsequent annual fees are due, in advance, on each
anniversary of the CS Effective Date.
[***] Third Party Software:
  For Horizon Performance Manager: The first annual fee is due, in advance,
onthe earlier of (a) [***] after CS Effective Date or (b) the delivery of the
[***] Third Party Software license key (“[***] Payment Date”).Subsequent annual
fees are due, in advance, on each anniversary of the [***] Payment Date.
Implementation Services:
  Time & Materials: 100% is due monthly as incurred, billed in arrears. 
Quality Benchmarks Collaborative
Subscription Services:
  Annual Fees: For the first year, 100% is due the earlier of [***] from
CSEffective Date or the Live Date. Setup fees, if any, are due in advance on the
CS Effective Date. For subsequent years, 100% is due in advance each year on the
CS Effective Date anniversary.
Equipment:
  Shipping and Handling: Shipping and handling charges will be listed separately
on the invoice for the corresponding Equipment and are due upon Equipment
Delivery. Shipping and handling charges are not included in the amounts listed
on Exhibit C-1.
Technology Services:
  SystemCare Services (Recurring Fees): First year fees are due on the
SystemCare Start Date as defined in Exhibit C-3; remaining annual installments
are due on each anniversary of the SystemCare Start Date.

 
 
[***] Confidential Treatment has been requested for certain redacted provisions
of this exhibit. The redacted provisions are identified by asterisks and
enclosed by brackets. The confidential portions have been filed separately with
the Securities and Exchange Commission.
  
 
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Integrated Healthcare Holdings Inc. - 1048628
Contract No. 1-15XA0R
June 30, 2011

       
   
The transaction covered by this Contract Supplement may involve a discount,
rebate or other price reduction on the items covered by this Contract
Supplement. Customer may have an obligation to report such price reduction or
the net cost in its cost reports or in another appropriate manner in order to
meet the requirements of applicable federal and state anti-kickback laws,
including 42 U.S.C. Sec. 1320a­7b(b)(3)(A) and the regulations found at 42
C.F.R. Sec. 1001.952(g) and (h). Customer will be responsible for reporting,
disclosing, and maintaining appropriate records with respect to such price
reduction or net cost and making those records available under Medicare,
Medicaid, or other applicable government health care programs.
 
Unless Customer provides McKesson prior to the CS Effective Date satisfactory
evidence of exemption (including evidence of renewal if applicable) from
applicable sales, use, value-added, or other similar taxes or duties, McKesson
will invoice Customer for all such taxes applicable to the transactions under
this Contract Supplement.
 
GENERAL COMMENTS:
 
SECTION 1: INVOICING TERMS
 
1.1    Customer will pay all fees and other charges in U.S. dollars within 35
days after invoice date. Invoices may be issued by McKesson Technologies Inc. or
any of the McKesson Affiliates.
 
SECTION 2:
  
2.1    In the event Customer fails to pay the Aggregate Payment Amount in
accordance with the payment schedule detailed in this Contract Supplement,
McKesson (i) reserves the right to cease implementation of the Software until
such time as outstanding payments are rendered, and (ii) reserves the right to
require advance payments as a condition before restarting and/or continuing the
implementation of the Software.
  
SECTION 3:
  
3.1    Customer acknowledges and agrees that McKesson will not order any
Equipment purchased pursuant to this Contract Supplement prior to receipt of the
[***] of the Aggregate Payment Amount from Customer.
     
 
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Integrated Healthcare Holdings Inc. - 1048628
Contract No. 1-15XA0R
June 30, 2011

       
  
ADMINISTRATION:

   
Sold To:
Ship To (SOFTWARE):
Integrated Healthcare Holdings Inc.
[***]
1301 North Tustin Avenue
[***]
Santa Ana, CA 92705
Carlsbad, CA 92009
Attention:
Attention: 1053302
Telephone:
Telephone: (760) 845-7612
Facsimile:
Facsimile:
   
Bill To:
Ship To (HARDWARE):
Integrated Healthcare Holdings Inc.
Integrated Healthcare Holdings Inc.
1301 North Tustin Avenue
1301 North Tustin Avenue
Santa Ana, CA 92705
Santa Ana, CA 92705
Attention: Nova Stewart
Attention: Nova Stewart
Telephone: (714) 953-2370
Telephone: (714) 953-2370
Facsimile:
Facsimile:
   
Paid By:
 
Integrated Healthcare Holdings Inc.
 
1301 North Tustin Avenue
 
Santa Ana, CA 92705
 
Attention:
 
Telephone:
 
Facsimile:
 

[***] Confidential Treatment has been requested for certain redacted provisions
of this exhibit. The redacted provisions are identified by asterisks and
enclosed by brackets. The confidential portions have been filed separately with
the Securities and Exchange Commission.
 
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