Document:

f10k2010a1ex10ii_muscato.htm

 

Exhibit 10.2

 

 

This exhibit has been redacted to exclude information the Registrant believes is confidential in nature.  The redacted portions have been markes with an "*,"  The redacted matieral has been omitted pursuant to a request for confidential treatment and the redacted matieral has been filed seperately with the Securities and Exchange Commission.

 

ASSIGNMENT AND ASSUMPTION OF 

SOFTWARE LICENSE AGREEMENT

 

This Assignment and Assumption of Software License Agreement (the "Assignment") is made as of the 16th day of June, 2007, by and between:

 

Muscato Corporation ("Licensor"), Crossroads Acquisition Corp., successor-in-interest by merger to United Wisconsin Services, Inc. ("Crossroads"), and National Government Services, Inc. ("NGS").

 

WHEREAS, Crossroads obtained from Licensor a software license on April 28, 2000, for the use of certain Licensor software ("the Software") and maintenance and support services described in Attachment A (collectively, "the License"); and

 

WHEREAS, Crossroads intends to assign to NGS its rights and obligations under the License; and

 

WHEREAS, Crossroads is not permitted to assign its rights and obligations to the License without the prior written consent of Licensor, and

 

WHEREAS, Licensor has agreed to grant its consent to a one time assignment.

 

NOW, TIIEREFORE, in consideration of Licensor granting its consent to the assignment, the parties hereby agree as follows:

 

	
A.  

	
ASSIGNMENT OF THE LICENSE BY CROSSROADS TO NGS

 

1. Crossroads hereby transfers, conveys, and assigns all of its rights to the License to NGS. Licensor consents to the assignment of the License by Crossroads to NGS, subject to the performance of all of the obligations of Crossroads contained in the License.

 

	
B.  

	
ASSUMPTION OF THE OBLIGATIONS UNDER THE LICENSE OF CROSSROADS BY NGS

 

1. NGS agrees to assume the obligations of Crossroads under the Muscato Corporation Hardware, Software License and Services Agreement executed on April 28th, 2000 (the "Agreement"), and NGS agrees to be bound to the same extent that Crossroads was bound, as Licensor, by the Agreement.

 

	
C.  

	
ASSIGNMENT

 

1. NGS may not assign its rights under the Agreement without the prior written consent and approval of Licensor. Any purported assignment by NGS without the prior written consent and approval of Licensor will he null and void and will be a breach of the License and this Assignment.

 

 

  

  

  

 

	
D.  

	
RELEASE OF CROSSROADS

 

1.           Licensor releases Crossroads of all of its obligations under the Agreement, save for all provisions in the Agreement that specifically survive termination.

 

	
E.  

	
RELEASE OF LICENSOR

 

I. Crossroads releases Licensor of all of its obligations under the Agreement, save for all provisions in the Agreement that specifically survive termination.

 

	
F.  

	
CHOICE OF LAW

 

I. This Assignment shall be governed in all respects by the laws of the State of Florida. The parties hereto agree to submit to the personal and exclusive jurisdiction of the federal and state courts of the State of Florida with respect to any dispute arising out of this Assignment.

 

	
G.  

	
ENTIRE AGREEMENT

 

1. THIS ASSIGNMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERSEDES ALL PROPOSALS, ORAL AND 'WRITTEN, BETWEEN THE PARTIES ON THIS SUBJECT.

 

IN WITNESS HEREOF the parties hereto have duly executed this Assignment by the hands of their proper signing officers duly authorized on behalf of the parties as of the day and year first above written.

 

 

	
MUSCATO CORPORATION

	 	CROSSROADS ACQUISITION CORP., SUCCESSOR-IN-INTEREST BY MERGER TO UNITED WISCONSIN SERVICES, INC.
	 	 	 
	/s/  Leslie Purdy	 	/s/  Karen E. Geiger
	
Authorized Signature

	 	
Authorized Signature

	 	 	 
	
Printed Name:  Leslie Purdy

	 	
Printed Name:  Karen E. Geiger

	 	 	 
	Title:  SVP Technical Services	 	Title:  Assistant Secretary

 

 

 

 

	
NATIONAL GOVERNMENT SERVICES, INC.

	 
	 
	/s/  Michael McCarren
	 
	Printed Name: Michael McCarren
	 
	Title: President

 

 

 

  

  

  

 

ATTACHMENT A

 

 

MUSCATO CORPORATION

 

HARDWARE, SOFTWARE LICENSE and

 

SERVICES AGREEMENT

 

Muscato License Agreement No.  ____________     

UWSI Document paul/tech/ Muscato_HSLSA_Final

 

This Agreement Is entered into this day of      , 2000 between Muscato Corporation, a Florida corporation withits principal place of business at 225 S. Westmont° Drive, Altamonte Springs, Florida, 32714, hereinafter referred to as Muscato, and United Wisconsin Services, Inc., a Wisconsin corporation, with Its principal place of business at 401 West Michigan Avenue, Milwaukee, Wisconsin, 53203, on its own behalf and for and on behalf of its affiliates now existing or hereafter formed or acquired, hereinafter referred to as UWSI.

 

WHEREAS, UWSI Intends to convert all of UWSI's and certain affiliates' current mainframe-based EMC/EDI claims and ERAs remittance systems to a speedier end more efficient system, facets of which include: a) Increasing throughput transmitting speed, Including obtaining top speed data exchange from external submitters; I)) efficiently handling rising volumes; c) enabling acceptance of encrypted files; d) adding web capability; and ei positioning UWSI and its affiliates to easily and efficiently meet the requirements of the current and pending H1PAA legislation (collectively, "UWSI's Needs");

 

WHEREAS, UWSI desires to engage a qualified and expert vendor to fulfill UWSI's Needs;

 

WHEREAS, Muscato has conducted a review and analysis of UWSI's Needs and represents to UWS1 Muscato can fulfill such needs with various hardware, software, and related operating procedures and business methods In an economical and commercially feasible manner us more particularly described In Exhibit A (the "Muscato Solution");

 

WHEREAS, UWSI, on the basis of the conclusions and recommendations of Muscato and In reliance upon the expertise of Muscato in analyzing Muscato's capability to fulfill UWSI's Needs, desires to contract with Muscato to obtain the Muscato Solution; and

 

WHEREAS, Muscato desires to contract with UWSI to provide it and its affiliates with the Muscato Solution.

 

In consideration of the mutual covenants which follow, Moscato and UWSI agree:

 

1.   TERMINOLOGY

 

1.1 Acceptance - The Muscato Solution, including the Licensed Product(s), shall be deemed accepted when, after installation on UWSI's Designated System(s) it conforms to and performs all functions and features as set forth in the PIER and has satisfactorily passed UWSI's acceptance as set forth in Section 2 paragraph 2.5 below but in no event shall be later than 210 days from complete installation. If UWSI has not accepted or rejected the Muscato Solution within such 210 day period, it will be deemed to have accepted the Muscato Solution.

 

  

  

  

 

1.2 Company shall mean UWSI's affiliates including subsidiaries and affiliate subsidiaries, whether now existing or hereafter formed or acquired, including but not limited to Blue Cross & Blue Shield United of Wisconsin and United Government Services, LICI

 

1.3 Designated System means the computer systems as identified by a serial or system number or other identification as may be used by the manufacturer, which are within the possession and control of UWSI or the Company and identified on Exhibit 8.

 

1.4 License Agreement or Agreement means this Hardware, Software License and Services Agreement including Exhibits A through F attached hereto.

 

1.5 Licensed Product(s) means those items as described in Exhibit A including all third-party software embedded within the Licensed Product(s) or included as part of the Moscato Solution and includes machine object code which allows the software to be used, user documentation, and any related materials which are furnished to UWS1 by Muscato for use in connection with the software.

 

1.6 PIER shall mean the latest approved version of the Product Integration Environment Review. The latest approved version of the PIER at the time of execution of this agreement is Version 2.1, prepared April 14, 2000 and attached hereto as Exhibit E.

 

1.7 Release means a Licensed Product(s) version which may be subsequently made available by Muscato to its customer that incorporates any enhancements, updates, or other changes made by Muscato to those Licensed Product(s) that result in a substantially enhanced functionality to the Licensed Product(s) since the previous Release.

 

1.8 Specifications shall moan the functional specifications as defined in the PIER.

 

1.9 Use means to cause a computer to execute any machine-readable portion of Licensed Product(s) or to make use of any Muscato documentation, release, or related materials in connection with the execution of any machine-readable portion of a Licensed Product(s).

 

2.   GRANT of LICENSE & RESTRICTIONS ON COPIES AND TRANSFER

 

2.1 For the consideration granted herein, Muscat() grants UWSI, pursuant to the terms and conditions of this Agreement, and UWSI hereby accepts a limited-transferable, non-exclusive license to use the Muscato Solution including but not limited to the Licensed Product(s) at UWSI or Company locations as determined by UWSI and on equipment as UWSI deems necessary for the operation of its business. Such license shall be a perpetual license as long as UWSI is not in default, subject to any applicable cure period, of any material provision of this agreement. Except as delineated in Section 2.7 below, Muscato shall be responsible for the licensing of all third-party software utilized as part or in conjunction with the Muscato Solution including but not limited to all costs associated therewith. The terms and conditions of such third-party software licenses shall be compatible with UWSI's intended use of the Muscato Solution throughout the term of this Agreement.

 

  

  

  

 

2.2 At no additional charge to UWSI, UWSI may make copies of the Licensed Product(s) for archival purposes or non-production related tasks only. Further, at no additional charge to UWSI, Muscatel hereby grants UWSI the right to reproduce, for internal business purposes only, a sufficient number of copies of the user documentation necessary to support the operation of the Licensed Product(s).

 

Muscato will provide all user documentation in both hardcopy and electronic formats. UWSI agrees that any such copy shall contain any proprietary or copyright notices appearing on the Software. UWSI shall identify in writing to Muscato the physical location(s) and Designated System(s) where the Licensed Product(s) is installed.Furthermore, Muscato shall have the right, at their expense, to audit UWSI to ensure compliance with this Agreement.

 

2.3 At no additional charge to UWSI, UWSI may maintain a separate version of the Licensed Product(s) for hotsite backup purposes, which shall be identified on Exhibit B, to only be used in an emergency situation. Such use shall be at no additional charge to UWSI. UWSI agrees that any such copies shall contain any proprietary or copyright notices appearing on the Software. Muscat() shall provide maintenance at no additional charge to UWSI for this version of the Licensed Product(s) under the terms and conditions of a separate maintenance program, as provided in Exhibit C.

 

2.4 UWSI shall identify in writing the current physical location and the Designated Systems where any copies of the Licensed Product(s) are installed. If such versions of the Licensed Product(s) are moved to another physical location and/or Designated System, UWSI shall notify Muscato of the new location and/or Designed System within thirty (30) days of such transfer. In no event shall Muscato charge  UWSIfor a move of the Licensed Product(s) to another location or Designated System.

 

2.5 Upon completion of installation of the Muscato Solution, or phases thereof as delineated in the attached exhibits, UWSI shall have a period of no less than thirty (30) days in which to conduct Acceptance testing as it deems necessary. Upon giving notice to Muscat() that the Muscato Solution or any phase thereof, has failed Acceptance testing, UWSI shall have the right to reject the Muscato Solution or any phase thereof, If Muscat() fails to make the necessary corrections and/or modifications within thirty (30) days of receipt of such notice. Upon receiving the applicable corrections and/or modifications, UWSI shall have thirty 130) days in which to test such corrections and/or modifications and either accept or reject that particular phase.

 

2.6 In the event UWSI rejects the Muscato Solution or any phase thereof the following shall occur:

 

a) if rejection occurs prior to acceptance of any phase of the Muscato Solution, Muscato shall refund to UWSI all fees and costs paid by UWSI under this Agreement including, but not limited to license fees, programming fees and associated costs except those associated with UWSI's purchase of hardware hereunder and

 

b) if rejection occurs after acceptance of the initial phase of the Muscato Solution, Muscato shall refund to UWSI all license fees, programming fees and associated costs associated with the applicable phase of the Muscato Solution.

 

2.7 Muscato shall be responsible for the licensing of 32 instances of use of Oracle data base software utilized as part or in conjunction with the Muscato Solution. Notwithstanding the provisions of Sections 2.1, 2.2, 2.3, this Section 2.7 and Section 3.3 of this Agreement, UWSI shall comply with and be subject to the terms and conditions of Oracle's license agreement. In the event UWSI requires use beyond the 32 instances accorded by this Agreement, it shall be responsible for the cost of licensing such additional instances from Oracle.

 

 

  

  

  

 

3.          CONFIDENTIALITY AND RIGHTS TO PROPERTY

 

3.1  Each party acknowledges that certain material and information which has or will come into the possession of each in connection with this Agreement, or the performance hereof, consists of confidential and proprietary data and information, of which the disclosure to or use by third parties could be damaging. Confidential and proprietary data and information includes, but is not limited to, information related to Licensed Product(s) supplied hereunder and all software as well as the research, development, trade secrets, or business affairs of the parties to this Agreement, their employees, customers, subsidiaries, affiliates, and agents. Both parties, therefore, agree to hold such data and information in the strictest confidence, and not to release any such data or information except to employees or contractors requiring such data or information in connection with the use of any Licensed Product(s). Each party hereto agrees upon request of the other party to require ell employees and contractors who directly have use or have access to configurations and proprietary data to sign a non-use and non-disclosure agreement to ensure that the obligations of non-use and non-disclosure of confidential and proprietary data and information under this Agreement will be satisfied.

 

3.2 Nothing herein shall limit either party's use or dissemination of information or data, (i) which has properly been made public by Muscato or UWSI, (ii) which is in the public domain, (iii) which was revealed by the party seeking the protections of this provision to others on a non-confidential basis, (iv) pursuant to the direction of any court, or (v) which by its content and nature would not reasonably be construed to be-confidential by either party unless one party specifically requests the other party in writing to protect the confidentiality of specific information.

 

3.3 UWSI and Muscato will hold each Licensed Product(s) and the confidential information and proprietary data in confidence at least to the same extent that it protects its own similar confidential information and will take all reasonable precautions consistent with generally accepted standards In the data processing industry to safeguard the confidentiality of each Licensed Product(s). With the exception of the rights granted to UWSI in Section 2 above, no portion of a Licensed Product(s) may be duplicated by UWSI except that UWSI may at no additional charge (i) copy and distribute updates to Designated System(s) and (ii) make copies of any machine object code portion of a Licensed Product(s) for its use as needed for normal security, backup, disaster, training and contingency purposes. Only one copy of the Licensed Product(s) will be run on the Designated System(s) at any one time. UWSI will properly reproduce on each such copy all notices of Muscato's patent, copyright, trademark or trade secret rights in such updates or such portion. UWSI will not reverse compile any Licensed Product(s) and any such attempt shall constitute a breach of this License Agreement and shall, in addition to all other legal remedies available, result in an immediate termination of said license.

 

3.4 If through Muscat() or UW5I's actions or failure to act, confidential or proprietary data or information is in the possession of a third party without the express written consent of the party to whom the information belongs, the appropriate parties shall, at its expense, proceed against, through negotiation or litigation, any third party who acquires confidential or proprietary data or information from Muscato or UWSI.  UWSIor Muscato shall utilize all necessary legal remedies to enjoin or otherwise prevent such third party from dispersing or disseminating said data or information to any other party, and shall further enjoin and prevent such third party from using confidential or proprietary data or information for its own purpose. If the party who caused the wrongful disclosure is unwilling or unable to proceed against any third party who has acquired such confidential or proprietary data or information the wronged party may proceed against such third party to protect its rights, data and information through negotiation or litigation and shall be reimbursed by the wrongfully releasing party for all reasonable costs or expenses. The party who caused the wrongful disclosure will indemnify the other party for any loss as a result of a third party acquiring confidential or proprietary data or information.

 

  

  

  

 

3.5 Muscato acknowledges that during the course of the performance of its obligations under this Agreement, it may come into the possession of personal health care information of UWSI's or the Company's subscribers ("Personal Health Care information"). All such Personal Health Care Information shall be treated as confidential information and shall be subject to the provisions of this Section 3. Notwithstanding the foregoing, Muscato shall also comply with all federal, state or other laws, rules, regulations governing the use and possession of the Personal Health Care Information including but not limited to the Health Insurance Portability and Accountability Act and the insurance statutes and regulations of the State of Wisconsin. Muscato will indemnify UWSI and the Company for any loss they incur as a result of Muscato's breach of this Paragraph 3.5.

 

3.6 The parties acknowledge that, in the event of breach of any of the forgoing provisions, the injured party will not have an adequate remedy in money or damages and shall therefore he entitled to obtain an injunction against such breach from any court of competent jurisdiction immediately upon request.The right to obtain injunctive relief shall not limit the right to seek further remedies and damages.

 

3.7 Muscato's and UWSI's obligations under this Section 3 will survive the termination of the License granted under this Agreement for five (5) years following the termination date.

 

4.         TITLE

 

4.1 Other than the right to use the Licensed Product(s) as set forth herein, all right, title and interest to all Licensed Product(s), including programs, source and object codes, tapes listing, updates, modifications and other programming documentation, prepared for or delivered to UWSI pursuant to this Agreement shall remain with Muscato.

 

4.2 Transfers. Except as provided for under Section 14 of this Agreement, UWSI shall not sell, license, publish, display, distribute or otherwise transfer to a third party the Licensed Product(s) or any copy thereof, in whole or in part, without Muscato's prior written consent, which shall not be unreasonably withheld or delayed.

 

5.         LIMITED WARRANTY AND DISCLAIMER OF LIABILITY

 

5.1 Warranty. Muscato warrants to UWSI that, for a period of one hundred and eighty (180) days from acceptance as defined in paragraph 1.1, Muscato Solution or any phase thereof including but not limited to the Licensed Product(s) will:

 

  

  

  

 

	
  a)  

	
perform in all material respects in accordance with Muscato's specifications and documentation for the then current version thereof;

	
  b)  

	
be free of defects in material and workmanship;

	
  c) 

	
possess the functions and features contemplated by and fully operate and perform and be in good working order in accordance with PIER, Project specifications, any user manuals, documentation, and all of Muscato's advertising materials; and

	
  d)  

	
be free of any critical programming errors.

 

During this time Muscato agrees to correct any programming error or defect found in the Muscato Solution and make such modifications, additions, and adjustments as may be necessary at no extra cost to the UWSI so that the Muscato Solution performs in accordance with the warranties herein. All such errors or defects shall be timely fixed or corrected In accordance with standards enumerated (Category 1, Category 2, etc.) in the service level escalation procedure detailed in the Maintenance Program (Exhibit C).

 

5.2 Muscato further warrants that for the term of this Agreement:

 

	
  a)  

	
neither maintenance performed by Muscato nor future Muscato modifications will degrade the Muscato Solution and

	
  b)  

	
the Licensed Product(s) will contain no viruses, illicit code, time bombs, lock-out devices, keys or other similar devices.

 

In the event of a breach of the warranties in this Paragraph 5.2, Muscato shall, within twenty-four (24) hours of receipt of written notice by UWSI, replace the non­conforming copy of the Licensed Product(s) with a copy conforming with the warranties herein. UWSI shall be entitled to obtain an injunction against such breach from any court of competent jurisdiction immediately upon request. The right to obtain injunctive relief shall not limit the right of UWSI to seek further remedies and damages.

 

5.3 Exclusions of Implied Warranties. OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT, MUSCATO MAKES AND UWSI RECEIVES NO FURTHER WARRANTY, EXPRESSED OR IMPLIED, AND THERE ARE EXPRESSLY EXCLUDED ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. MUSCATO SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT FOR CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE ABOVE STATED LIMITED WARRANTY IS IN LIEU OF ALL LIABILITIES OR OBLIGATIONS OF MUSCATO FOR DAMAGES ARISING OUT OF OR INCONNECTION WITH THE DELIVERY, USE OR PERFORMANCE OF THE LICENSED PRODUCT(S).

 

5.4 Limitation of Liability. In no event will either party be liable for special, Indirect, incidental or consequential damages including but not limited to those resulting from loss of use, data or profits arising out of or in connection with this Agreement or the use of or performance of the Licensed Product(s). This exclusion will apply regardless of the number or form of action brought . Either party's total aggregate liability for any damages to the other for any cause whatsoever, regardless of form or action, whether in contract or tort, shall be limited to the total of all fees and costs paid to Muscato by UWSI pursuant to this Agreement. The limitations contained in this Section 5.4 shall not apply to any claims under Sections 3 and 7 of this Agreement.

 

  

  

  

 

6.   UWSI'S RESPONSIBILITIES

 

6.1 UWSI will not modify, or permit any person other than Muscato to modify, any portion of the source code of any Licensed Product(s) without prior written approval from Muscato.

 

6.2 UWSI will identify, document. and report each problem with a Licensed Product(s) necessitating maintenance service, and will supply Muscato with all documentation and assistance necessary to demonstrate and diagnose the problem and will implement each patch, bypass, update or other solution to such problem provided by Muscato. If UWSI requests support and the malfunction is not Muscato product related, or does not result from Muscato's acts or omissions, Muscato shall he reimbursed on a time and material basis with a labor rate of $150.00 per hour.  Muscato agrees that there shall be no labor rate increase for a period of 24 months from the date of execution of this Agreement. Thereafter, any increase in the labor rates set forth in this Agreement, not exceed five percent (5%) of the previous year's fee.

 

6.3 UWSI will assure the proper use, management and supervision of the Licensed Product(s) and of any reasonable application programs, audit controls, operating methods and office procedures necessary for the intended use. UWSI agrees to maintain complete and current records of configuration and location of all of the Software issues under this license. From time to time, but in no event to more than once per year, and upon providing UWSI with five (5) days written notice, Muscato may request a copy of these records reasonably necessary to verify that the Software is being properly protected and accounted for.

 

6.4 Subsequent to UWSI's acceptance of the full implementation of the Muscato Solution and subject to UWSI's written approval, UWSI agrees to reimburse Muscato for reasonable out of pocket expenses incurred in performance of its duties hereunder, including but not limited to, airfares, hotels, meals and ground transportation while installing, training, developing or providing other services to UWSI when such services are required by the UWSL All such expenses shall be reimbursed in accordance with and at the same rates as UWSI's expense reimbursement policy for its employees.

 

6.5 Fees do not include any taxes, levies, deductions or similar governmental

 

charges, however designated, which may be imposed by any jurisdiction. UWSI will pay all such taxes, levies, deductions, or similar government charges relating to the Muscato Solution or Muscato's services herein or provide Muscato with a certification of exemption from such taxes, levies, deductions, or similar governmental charges, acceptable to the appropriate authority. UWSI will not be responsible for any taxes based on Muscato's net income nor franchise or privilege taxes nor governmental license fees assessed against Muscato. Muscato shall also be responsible for all payroll taxes, withholding, assessments, contributions, retirement and other commitments made to or for the benefit of employees of Muscato. UWSI shall indemnify Muscato with respect to any claim against or liability of Muscato in connection with the foregoing including interest, penalties and fines relating thereto, where such interest, penalties and fines are directly due and payable as a result of an act or failure to act on the part of the UWSI. Muscato shall indemnify UWSI with respect to any claim against or liability of UWSI in connection with the foregoing including Interest, penalties and fines relating thereto, where such interest, penalties and fines are directly due and payable as a result of an act or failure to act on the part of Muscato.

 

  

  

  

 

7.   PATENT AND COPYRIGHT

 

7.1 Muscat° warrants to UWSI that (al Muscato owns or is duly licensed to use and sublicense the Muscat() Solution including but not limited to all Licensed Product(s), the related documentation, and any portion thereof, (b) Muscato has the full power and authority to grant UWSI all rights herein conferred, and (c) the Muscato Solution including but not limited to the Licensed Product(s), the related documentation, and any portion thereof does not infringe or violate any patent, copyright, or other property right of any third party. Muscato at Its own expense will defend any action brought against UW51 and indemnify UWSI to the extent that the action is based on a claim that the Muscat() Solution including but not limited to any Licensed Product(s), the related documentation and any portion thereof, used within the scope of this Agreement infringes any patents, copyrights, license or other property right, provided that Muscat() is notified in writing within fifteen (15) business days of receipt of such claim and given authority, information, and assistance for the defense of same.  Muscato shall have the right to control the defense of all such claims, lawsuits and other proceedings. In no event shall UWSI settle any such claim, lawsuit or proceeding without Muscato's prior written approval. If, as a result of any claim of infringement against any patent, copyright, license or other property right, Muscato or UWSI is enjoined from using the Muscato Solution including but not limited to Licensed Product(s), or if Muscato believes that the Muscato Solution is likely to become the subject of a claim of infringement, Muscato, in addition to its obligations to defend and indemnify UWSI, at its option and expense may procure the right for UWSI to continue to use the Muscato Solution including but not limited to Licensed Product(s), or replace or modify the Muscato Solution including but not limited to Licensed Product(s) so as to make it non-infringing. if neither of these two options is reasonably practicable, Muscato and UW51 may terminate this Agreement on one month's written notice and Muscato shall refund to UWSI the unamortlzed portion of the license fees hereunder (based on an eight (8) year straight line depreciation, such depreciation to commence on the date of acceptance of the Muscat() Solution under this Agreement). The foregoing states the entire liability of Muscato with respect to infringement of any copyrights, patents, license and other property rights by the Muscato Solution including but not limited to the Licensed Product(s), or any portion thereof.

 

7.2 Muscato agrees that without prior written consent of UWSI, Muscat] will not use the service marks, trademarks, or trade or corporate names of UWSI or the Company within any Muscato-related advertising, marketing materials, publicity release or sales presentation.

 

8.   ORDERS, SHIPMENT, INSTALLATION AND PAYMENT

 

8.1 Products will be ordered, shipped and paid for as set forth in Exhibit A.

 

8.2 All reasonable shipping, handling, packaging, or courier costs associated with the shipment of the Licensed Product(s) will be paid by UWSI if approved in advance in writing by UW51 and will be set forth separately on a Muscato invoice to UWSI. The method of Licensed Products) shipment will be specified in writing by UWSI and agreed to by Muscato.

 

8.3 Muscato will install the Licensed Product(s) in the UWSI environment as detailed in Exhibit B.

 

 

  

  

  

 

8.4 All solution change requests or additional support services requested by UWSI shall be handled as delineated in Section 1.5.1 of Exhibit A to this Agreement.

 

9.          MAINTENANCE PROGRAM

 

9.1 Scope of Maintenance. Upon expiration of the warranty period or on the first business day thereafter, UW51 shall begin to pay the maintenance fee as set forth in the Maintenance Agreement, attached hereto as Exhibit C (the "Maintenance Agreement"). Except as provided for in this Agreement, payment of the maintenance fees is a continuing requirement of this agreement and entitles UWSI to continue to use the Licensed Product(s) and receive maintenance as described below and as further described in the Maintenance Agreement. As a requirement of this Agreement, and set forth in Exhibit C. Muscats will provide UWSI with maintenance, as further delineated in the Maintenance Agreement, for each Licensed Froduct(s). Maintenance required as a result of unilateral configuration or specification changes made by UWSI or its representatives will be paid for by UWSI at the rates specified in the Maintenance Agreement. UNLESS MUSCATO HAS BREACHED ITS MAINTENANCE OBLIGATIONS UNDER THIS AGREEMENT , FAILURE TO PAY THE MAINTENANCE FEE SHALL RESULT IN TERMINATION OF THIS AGREEMENT, SUBJECT TO ANY APPLICABLE CURE PERIOD, AND THE LICENSE GRANTED HEREUNDER.

 

9.2  The Maintenance fee which UWSI shell pay Muscato shell be calculated in accordance with the Fee Schedule set forth in Exhibit C hereto. Muscatel agrees that there shall be no maintenance fee increase for a period of 24 months from the date maintenance fees first begin to accrue. Any increase in the annual maintenance fee amounts set forth in Exhibit C for any year thereafter shall not exceed ■■■■■■■■■ of the previous year's fee.

 

10.         DEFAULT AND TERMINATION

 

10.1in the event either party defaults in • any material obligation of this Agreement, the non-breaching party shall give written notice of such default, and if the party in defaulthas not cured the default within sixty 160) days of the notice, the non-breaching party shall have the right to terminate this Agreement.

 

10.2 Immediate Termination. Upon the occurrence of any act which constitutes a breach of Section 3, 4.2, 7, and 9 of this Agreement, the non-breaching party shall have the right to terminate this Agreement and all licenses immediately without demand or notice. Exercise of the right to terminate this Agreement shall not limit the right of the non-breaching party to seek further remedies and damages.

 

10.3 Effect of Termination. Except as otherwise provided for in this Agreement, upon termination of this Agreement, the license granted under this Agreement to use the Licensed Product(s) is immediately revoked. Within five (5) days after the termination of this Agreement for whatever reason, UWSI shall return to Muscatel all copies of the Licensed Product(s), updates and user manuals in UWSI's possession, including all copies of the Licensed Productisi updates and user manuals. In the alternative, upon request of Muscato, UWSI shall destroy all such copies of the Licensed Productfsl, updates and user manuals and certify in writing that they have been destroyed.  TERMINATION SHALL NOT RELIEVE THE LAWS AND AUTHORIZED USERS OF THEIR OBLIGATIONS REGARDING THE CONFIDENTIALITY OF THE LICENSED PRODUCT(S) AND UPDATES. Upon termination of this Agreement, Museato shall also return to UWSI any confidential or proprietary information belonging to UWSI and discontinue use of the UWSI/Company Trade Names if such use hail been rented under Section 7.2 of this Agreement. TERMINATION SHALL NOT RELIEVE MUSCATO OF ITS OBLIGATIONS REGARDING THE PERSONAL HEALTH CARE INFORMATION AND THE CONFIDENTIALITY OF UWSI'S CONFIDENTIAL AND PROPRIETARY INFORMATION.

 

  

  

  

 

10.4 Payments not Excused. Without limiting the provisions contained in Subsections 10.1, 10.2 and 10.3 of this Section, in the event of termination as a result of the UWSI's breach of the obligations under this Agreement, UWSI shall continue to be obligated for any payments due as of the date of termination. Termination of the license shall be In addition to and not in lieu of any equitable remedies available to Muscato.

 

10.5 Payments Excused/Refund of License Fee. Without limiting the provisions contained in Subsections 10.1, 10.2 and 10.3 of this Section, in the event of termination as a result of the Muscato's breach of its obligations under this Agreement, UWSI shall be excused from all of its payment obligations under this Agreement and, in the event UWSI has accepted the Muscat° Solution and paid the license fees and other associated costs enumerated in this Agreement, Muscat° shall further refund to UWSI one ninety-sixth (1/96) of all fees paid hereunder [excepting those associated with the hardware components of the Muscato Solution) for each month remaining in the eight (El) year period beginning on the data of acceptance and ending eight 03) years thereafter. Termination of this Agreement shall be in addition to and not in lieu of such other rights and remedies UWSI may have under the law.

 

11.   NOTICES

 

Any notices- required to be given hereunder will be given in writing and sent to the address of the appropriate party indicated on the first page of this Agreement or such other address as such party may have designated by prior written notice to the other party. All notices to Muscato will be addressed to the Attention:

 

Business or Contractual Notification

 

	
Brian R. Newton

Chief Operating Officer

 

 

Technical Notification

Barbara Hornbuckie 

VP Technical Services

	
Muscato Corporation

225 S. Westmont° Drive, Suite23000 

Altamonte Springs, FL 32714

 

Muscato Corporation

225 S. Westmonte Drive, Suite 3000 

Altamonte Springs, FL 32714

 

All notices to UWSI will be addressed to the Attention:

 

Business or Contractual Notification

 

	
Paul T. Van Den Heuvel 

Legal Department

 

Technical Notification

Charles H. Schuele 

Chief Information Officer

	

United Wisconsin Services, Inc. 

401 West Michigan Street, C-10 

Milwaukee, Wisconsin 53203

 

United Wisconsin Services, Inc. 

401 West Michigan Street, C-10 

Milwaukee, Wisconsin 53203

 

 

  

  

  

 

12.          EXCUSED NONPERFORMANCE

 

12.1 Neither party shall be responsible for delays resulting from acts beyond the reasonable control of such party. Such acts shall include acts of God, strikes, lockouts, riots, acts of war, epidemics,fire, communication line failures, power failures, earthquakes, other disasters or other events of the same kind.

 

13.         EXPORT CONTROL LIABILITY

 

13.1 This Agreement is made subject to any present or future laws, regulations, orders or other restrictions of the United States of America, or any political subdivision thereof, on the export from the United States of Licensed Productisi, or of information about Licensed Products}. UW51 (i} will comply with all such laws, regulations, orders and other restrictions to the extent that they are applicable to UWSI and Oil will not, directly or indirectly, export any such Licensed Product(s) or information to any country.

 

14.           ASSIGNMENT

 

14.1 UWSI may assign this Agreement, Including the license secured pursuant to this Agreement, to an entity that fells within the definition of "Company* or to any entity into which UWSI is merged or reorganized pursuant to any plan of merger or reorganization. UWSI shall provide Muscato with written notice of such assignment in a prompt and timely manner. UWSI shall not assign this Agreement or the licenses secured hereunder, in whole or in part, to any other entity without prior written permission from Muscato. Any such attempt to assign this Agreement or the rights, duties or obligations which arise under this Agreement, without such permission shall be void. Such approval by Muscato shell not be unreasonably withheld. In the event UWSI seeks to assign this Agreement to a third party UWSI contracts with to operate its data processing facilities ("Outsourcer-1, Muscato shall not object to such assignment unless it can conclusively show that the Outsourcor is a substantially-direct competitor cf Muscato. There shall be no charge to UWSI whatsoever for any assignment made under this Agreement. Divested affiliates shall be allowed to use the Licensed Product(s) at no additional charge for up to one (1) year following the effective date of the divestiture. Subsequent to said one (1) year timeframe, such divested affiliate must contract with Muscato to retain the right to continue to license and use the Licensed Product(s).

 

15.          TRAINING

 

15.1 At UW5I's option and as UWSI may reasonably request from time to time, Muscato shall be responsible for providing UWSI with appropriate and sufficient training in the operation of the Licensed Product(s). Such training shalt be provided at a UW51 or Company place of business designated by UW51, using skilled, competent and qualified personnel to satisfactorily ensure the proper, safe and efficient use and operation of the Licensed Product(s). These personnel shall also be satisfactory to UWSI in the reasonable exercise of its discretion. UWSI shall be entitled to have any number of its users attend any training session. UWSI may also send up to six (5) individuals to a Muscato class offering. The times and locations of the training provided, as well as the cost thereof, shall be as mutually agreed upon, but shall be promptly provided by Muscato following UWSI's request therefor.

 

 

  

  

  

 

16.          WAIVER, AMENDMENT OR MODIFICATION TO AGREEMENT

 

16.1 The waiver, amendment or modification of any provision hereof will not be effective unless in writing and signed by the party against whom enforcement of such waiver, amendment or modification is sought. The terms of this Agreement may be amended or modified through an Addendum to the Agreement signed by Muscat() and UWSI.

 

17.         AGREEMENT INTERPRETATION

 

17.1 In the event an inconsistency exists between this Agreement and any Exhibit hereto, the Exhibit shall control. In the event of an inconsistency between the PIER (attached hereto as Exhibit E) and any other Exhibit, the PIER shalt control. Defined terms found in this Agreement or in any Exhibit apply throughout the complete Agreement.

 

18.         ENFORCEMENT OF TERMS

 

18.1 Should any provision of this Agreement be held to be illegal, invalid, or unenforceable for any reason, the remaining provision(s) shall remain in full force and effect as if the illegal, invalid, or unenforceable provision(s) were excised therefrom.

 

19.         ATTORNEY FEES AND COST

 

19.1 Should legal action be necessary to enforce any nbligation(s) set forth herein, the prevailing party shall be entitled to reasonable attorney fees and cost at the expense of the non-prevailing party.

 

20.         ESCROW OF SOURCE CODE

 

20.1 Muscato agrees to keep and maintain a current copy of the Licensed Product(s) Source Code In escrow at Iron Mountain, 3608 Shader Road, Orlando, Florida 32808. Muscato shall be authorized to change escrow agents upon written notice to the UWSI. Should the UWSI require their specific configuration of the Licensed Products) to be escrowed, a separate escrow agreement will be necessary which UW51 may request at any time. Cost associated with this additional effort is the responsibility of the UWSI and is Included in the Maintenance Program described in Exhibit C. The escrowed Source Code will be managed in accordance with the Terms and Conditions of the Source Code Escrow Agreement in Exhibit D.

 

21.         MEDICARE CONTRACTING RULES.

 

21.1 This Agreement shall incorporate in all respects the Medicare Addendum attached hereto as Exhibit F.

 

22.    ENTIRE AGREEMENT, GOVERNING LAW

 

22.1 This Agreement together with the attached Exhibits relating to any Licensed Product(s), constitutes the entire Agreement for the licensing and maintenance of such Liconsorl Product(s) There are no other Agreements or understandings, oral or written, relating to such licensing and maintenance by which the parties mend to be bound. This Agreement will be governed by and construed in accordance with the laws of the State of Wisconsin. 

 

23.        PARAGRAPH HEADINGS

 

23.1 The titles to the paragraphs of this Agreement are solely for the convenience of the parties and shall not be used to explain, modify, simplify, or aid in the interpretation of the provisions of this Agreement.

 

 

IN WITNESS WHEREOF, UWSI and Muscato Corporation have caused this Agreement to be executed by their duly authorized representatives as indicated below.

 

	"Muscato Corporation"	 	"United Wisconsin Services, Inc."
	Authorized Signature	 	Authorized Signature
	 	 	 
	/s/  	 	/s/  
	Name	 	Name
	
 

VP

	 	CFO
	Title	 	Title
	
 

4/28/00

	 	4/28/00
	Date	 	Datef10q1210ex10i_dongsheng.htm

 

Exhibit 10.1

 

 

Product Transfer and Cooperation Agreement

Party A:Dongsheng Pharmaceutical International Co., Ltd

Party B:Shanghai Wante Pharmaceutical Co., Ltd

In accordance with the friendly consultations between Party A and Party B,based on the principle of complementary advantages, mutual development, long-term synergies, and promotion and development, in terms of the co-operation of all intellectual property transfer of the micro-emulsion alprostadil product, by consensus, to enter into this written agreement thereafter.

1.  Main contents of the cooperation agreement:

In accordance with all intellectual property of the existing products of Party B (micro-emulsion alprostadil injection),(including the transfer of projects focus on new technology products which are chosen and determined by both parties or recommended by Party B), and depth of technical development cooperation and mutual support, etc.

In accordance with other technologies production and management of related drugs or agency products, making cooperation throughout the country or in domestic part of the regional market,and cooperative investments which are involved in domestic drug production enterprises and such aspects for mutual support and close coordination.

1. 1. Content of the Products technology Transfer:

The content of transfer of all intellectual property rights of micro-emulsion alprostadil injection (hereinafter referred to as “the product”), Party B will transfer all intellectual property rights of the product items to Party A.

 

1.2. The main rights and obligations of both parties:

1.2.1.The main rights and obligations of Party A:

a) Pay to Party B the product project transfer of all intellectual property rights in two phases, total cost: 10 million RMB, of which five million is in cash, the other five million RMB paid by corresponding value of the company equity of Party A. It is calculated by USD $1.50 per share, at the agreed exchange rate of RMB and U.S. at dollar 1USD: 6.6RMB for conversion, and the conversion part of the total number of shares is 505,000 shares in sum.

b) After this transfer and the signing of the cooperation agreement by both Party A and Party B,Party A should pay the initial margin of the technology transfer within 7 days after the signing, total amount 2,400,000RMB. Upon the completion of clinical products, and approval of production issued by the Chinese State Drug Administration,and after two sides signed the acceptance certificate. Party A should pay the second transfer margin to Party B, total amount 2,600,000 RMB and 505,000 shares.

c) Assist Party B to complete coordination of the approval process by State Drug Administration and Center for Evaluation of New Drug to ensure that the drugs can be successfully passed the technical assessment.

1.2.2. The main rights and obligations of Party B:

a) Party B should sign the production machining contract with Shanghai Fuda Pharmaceutical Co., Ltd; after the approval of production, Party B can transfer this production machining contract to Party A.

b) Party B is responsible for the review, proof, declaration of this project, the cost which is required will be borne by Party B.

c) Party B is responsible to provide a set of intellectual property information of the project (is subject to the agreed details in the annex).

 

 

  

  

  

 

2. Technical secret, information and the submission deadline, place and mode

Party B, after signing the cooperation agreement with Party A within one week, should offer Party A the full set of intellectual property information (technical application material data of production and declaration in written and per e-mail separately to Party A in a week.

3.The geographical scope and specific ways of using the intellectual Property

Party A: has the intellectual property right to use the product, assist Party B to conduct the declaration of Drugs until the production certificate is obtained and use such intellectual property to put that species into production and sales & marketing promotion.

Party B:It is the intellectual property licenser, on the condition that when Party A agrees, Party B has the right to further research and development, the further technological achievements of R&D should be owned by Party A. Party A will pay Party B a fee as a reward.

4. Acceptance criteria and method

This project assignment take the approval document of production issued by the Chinese State Drug Administration as the acceptance criteria, and the acceptance certificate signed by both parties. Party B shall ensure compliance with national standards of production quality, and has the responsibility to assist Shanghai Fuda Pharmaceutical Co., Ltd to ensure each batch of product meets the national standard.

5. Funds and its method of payment

5.1. the total value of transaction  RMB 10,000,000.

5.2. method of payment(divided into two phases)

The first phase: RMB 2,400,000,time of payment:within one week after the agreement is signed,the agreement is entered into force。

The second phase:2.6 million RMB (and in time the listed sale price of open market is not less than 1.5 U.S. dollars/share) and the equivalent of 5 million RMB of Party A Company’s (DNGH.OB) 50.5 million shares. Payment time: when the products is awarded with the approval document by the State Food and Drug Administration and as well as the acceptance certificate is signed within a week. (The above five million yuan cost of the Dongsheng Pharmaceutical International Co., Ltd. in China, a wholly-owned holding company, "Xin Tai Pharmaceutical Co., Ltd. of Sichuan Province" payments).

6. Breach or calculation of damages for the loss

Breach of contract,the party in breach shall bear the liability therefore in accordance with the relevant provisions of the PRC Contract Law.

6.1. Breach of Article V of this contract, Party A shall bear the following liabilities:

Besides the amount payable to Party B, Party A should pay a default penalty equal to 0.1% fee for every day in arrears. 30 days overdue, this contract will be automatically terminated, the contract payments will not be refunded by Party B.

Party A guarantees that the options of offshore holding company which are converted to shares to transfer to Party B are the securities outside the territory of China which are open and cashable and can be legally traded; meanwhile, Party A guarantees that at the time(second phase)the price of the conversion into shares according the provisions of the contract, the actual stocks which are transferred to Party B, the price of floatation of shares which are listed on open market, are not lower than the price of the calculated conversion into shares(that is on the occasion the price of floatation of the shares which are listed on the open market is not lower than $1.5 per share).If at that time the price of the floatation of the shares are still lower than $1.5 per share, Party B has the right to claim Party A to pay 5,000,000 RMB of settlement, Party A agrees that Party B has this option. If the second phase payments and stocks are not able to pay due to Party A’s reason, Party B may not return the agreement deposit.

 

  

  

  

 

6.2. Breach of Article I of this contract, Party B shall bear the following liability:

Failed to obtain the approval document due to technical reasons of Party  B bear the liability, all contract payments should be refunded by Party B. f the approval documents can’t be obtained before May 1st,2010 due to the reason of Party B, Party A has the right to claim to recover the amount and terminate the contract, terminate this agreement and pay fines.

6.3. In the event of force majeure risk, Party A and B will bear the investment which has been paid and the human cost separately.

7. Subsequent improvement of the technique providing and the Intellectual property sharing of the value-add part

For the purpose of this agreement, “Subsequent technical improvement” means during the term of this agreement either party or both parties make innovations and improvements for the know-how set forth in the agreement. The subsequent improved technological achievements will be owned by Party A.

All intellectual property rights that may create other value added (such as foreign investment and converted into shares) contained in this agreement, it is agreed by both parties of A and B that for the value added part, each party  will hold 50% shares.

8.  Method of agreement for the solution of dispute

In case there arise some disputes in the process of the implement of this contract, the litigants of the two parties reconcile or not can adopt an   arbitration or solve according to the judicial procedure.

In case there arise some disputes in the process of the implementation of this agreement, the litigants of the two parties reconcile or not can adopt an   arbitration or solve the dispute, both Party A and Party B are agreed to adopt an arbitration by Chinese International Economic and Trade Arbitration Committee in accordance with China International Economic and Trade Arbitration Commission Arbitration Rules.

9.  Interpretation of terms and phrases

None

10.  Other conventions

10.1. The modification of either company’s name should be with written notice and provide a document evidencing the change.

10.2. The agreement is made with 4 originals, each party shall have two sets of the original version. The annex of this Agreement is an indivisible part of this Agreement, which has the same legal effect as this agreement.

10.3. For issues not stipulated in this Contract, Party A and B may sign a supplement agreement after multiple negotiation.

 

	Party A:Dongsheng Pharmaceutical International Co., Ltd 	 	 	Party B:Shanghai Wante Pharmaceutical Technology Co., Ltd	 
	 	 	 	 	 
	
contact person:

	 	 	
contact person:

	 
	
 

	 	 	
 

	 
	
Tel:

	 	 	
Tel:

	 
	 	 	 	 	 
	Fax:	 	 	Fax:	 

 

 

  

  

  

 

 

Annex 1: The list of the intellectual property transfer

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