<PAGE>
As filed with the Securities and Exchange Commission on October 12, 1999
Registration No. 333-85481
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 5
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
eMed Technologies Corporation
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C>
Delaware 7374 04-3155965
(State or Other (Primary Standard Industrial (I.R.S. Employer
Jurisdiction Classification Code Number) Identification No.)
of Incorporation or
Organization)
</TABLE>
25 Hartwell Avenue, Lexington, MA 02421, (781) 862-0000
(Address, including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
----------------
Scott S. Sheldon, Chief Executive Officer
25 Hartwell Avenue, Lexington, MA 02421, (781) 862-0000
(Name, Address, including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
----------------
Copies To:
<TABLE>
<S> <C>
Joel F. Freedman, esq. Paul Model, esq. David J. Goldschmidt,
Ropes & Gray 477 Madison Avenue esq.
One International Place New York, New York 10022 Skadden, Arps, Slate,
Boston, Massachusetts (212) 751-8438 Meagher & Flom LLP
02110-2624 919 Third Avenue
(617) 951-7000 New York, New York 10022
(212) 735-3000
</TABLE>
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Part I of the Registration Statement has been intentionally omitted because this
Amendment No. 5 does not effect any changes to the Prospectus. The sole purpose
of this Amendment No. 5 is to refile Exhibits 10.21, 10.22, 10.23, 10.25, and
10.27.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than the
underwriting discounts and commissions. All amounts shown are estimates, except
the Securities and Exchange Commission registration fee and the National
Association of Securities Dealers, Inc. filing fee.
<TABLE>
<CAPTION>
Item Amount
---- --------
<S> <C>
Securities and Exchange Commission Registration Fee................ $ 15,985
National Association of Securities Dealers Filing Fee.............. 6,250
Nasdaq National Market Listing Fee................................. 60,000
Blue Sky Fees and Expenses......................................... 10,000
Transfer Agent and Registrar Fees.................................. 3,500
Accounting Fees and Expenses....................................... 350,000
Legal Fees and Expenses............................................ 350,000
Printing Expenses.................................................. 90,000
Miscellaneous...................................................... 14,265
--------
Total............................................................ $900,000
========
</TABLE>
- --------
* To be filed by amendment
Item 14. Indemnification of Directors and Officers
The Registrant's Amended and Restated Certificate of Incorporation provides
that the Registrant's Directors shall not be liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except to the extent that the exculpation from liabilities is not permitted
under the Delaware General Corporation Law as in effect at the time such
liability is determined. The Amended and Restated By-Laws provide that the
Registrant shall indemnify its directors to the full extent permitted by the
laws of the State of Delaware. Each of the Registrant's Directors has entered
into an agreement with the Registrant whereby the Registrant has agreed to
indemnify such Director to the full extent permitted by the laws of the State
of Delaware.
Item 15. Recent Sales of Unregistered Securities
The following information is furnished with regard to all Securities sold by
the Registrant within the past three years which were not registered under the
Securities Act.
(a) From August 1, 1996 to September 17, 1999, the Registrant issued a
total of 148,247 shares of common stock for an aggregate consideration of
$177,898 pursuant to the exercise of stock options and warrants by
employees, directors, consultants and their affiliates.
(b) In June 1997, the Registrant sold $1,500,000 in principal amount of
convertible subordinated notes for aggregate proceeds of $1,500,000. These
notes were issued to Delphi Ventures III, L.P., Seaflower Health and
Technology Fund, LLC and other private investors. These notes were
automatically convertible, upon the Registrant's sale of new equity
securities for gross proceeds of at least $1,500,000, into securities
having the same price and terms as the new equity securities. Purchasers of
the notes also received warrants to purchase an additional amount of the
new equity securities having an aggregate purchase price of 30% of the
amount of the purchaser's note, at the same price that such new equity
securities were issued to other investors. The notes had a maturity date of
October 31, 1997 and bore
II-1
<PAGE>
interest at the rate of 6% per annum. Accrued interest converted on the
same terms as the principal amount of the notes. In September 1997, these
notes were automatically converted into 1,384,460 shares of Series J
preferred stock at a conversion price of $1.10 per share of Series J
preferred stock. The warrants issued with the notes became warrants to
purchase 409,091 shares of Series J preferred stock at an exercise price of
$1.10 per share. The Series J preferred stock will be converted into
3,221,179 shares of common stock and the Series J warrants will become
warrants to purchase 170,449 shares of common stock upon the closing of
this offering.
(c) In September through December of 1997, the Registrant sold an
aggregate of 6,346,449 shares of Series J preferred stock (excluding the
shares issued upon the conversion of the notes described above) for
aggregate proceeds of $6,981,094. These shares were issued to Bedrock
Capital Partners, Pacific Venture Group, L.P., Bessemer Venture Partners IV
L.P., and other private investors.
(d) In July 1998, various investors entered into commitments with the
Registrant to purchase shares of Series K preferred stock for an aggregate
price of $2,500,000 if the Registrant notified them of its election to sell
the shares. The investors who made these commitments also received warrants
to purchase in the aggregate 201,388 shares of common stock at an exercise
price of $.02 per share as consideration for their commitments.
In January 1999, the Registrant elected to draw upon the initial
investors' commitments to purchase Series K preferred stock and sold
additional shares of Series K preferred stock together with warrants to
purchase additional shares of our common stock at an exercise price of $.02
per share to other investors. In the aggregate (including the securities
discussed in the preceding paragraph), the Registrant issued 2,500,000
shares of Series K preferred stock together with warrants to purchase
281,916 shares of common stock for proceeds of $3,500,000. These shares and
warrants were issued to Bedrock Capital Partners, Pacific Venture Group,
L.P., Delphi Ventures III, L.P., Seaflower Bioventure Fund II, LLC,
Bessemer Venture Partners IV L.P., and other private investors.
In May 1999, the Registrant sold 1,642,856 additional shares of Series K
preferred stock and warrants to purchase an additional 185,270 shares of
common stock for aggregate proceeds of $2,300,000. These shares and
warrants were issued to Zero Stage Capital VI, L.P. and other private
investors.
All of the above securities were issued in reliance upon the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as
amended, and Rule 506 of the Securities and Exchange Commission promulgated
thereunder, as transactions by an issuer not involving a public offering.
Item 16. Exhibits and Financial Statement Schedules
The following is a list of exhibits filed as a part of this registration
statement.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1 Form of underwriting agreement.
2 Acquisition Agreement dated as of November 23, 1998 by and between
Raytheon E-Systems, Inc. and the Registrant.
3.1 Form of Amended and Restated Certificate of Incorporation.**
3.2 Form of Amended and Restated By-Laws.**
4.1 Specimen Certificate for Common Stock.
5 Opinion of Ropes & Gray.**
10.1 eMed 1994 Stock Plan.**
10.2 Securities Purchase Agreement dated as of September 30, 1997 between
the Registrant and each of the investors named therein.**
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
10.3 Investors Rights Agreement dated as of September 30, 1997 among the
Registrant and each of the holders of the Company's Series J Preferred
Stock parties thereto.**
10.4 Amendment No. 1 dated as of November 13, 1997 to the Investors Rights
Agreement.**
10.5 Securities Purchase Agreement dated as of July 28, 1998 between the
Registrant and each of the investors named therein.**
10.6 Amendment to Securities Purchase Agreement dated as of January 14,
1999.**
10.7 Securities Purchase Agreement dated as of January 20, 1999 between the
Registrant and each of the investors named therein.**
10.8 Amendment to the Securities Purchase Agreement dated as of May 7,
1999.**
10.9 Registration Rights Agreement dated as of July 28, 1998 between the
Registrant and the parties named therein.**
10.11 Commercial Lease as of September 26, 1997 by and between Hartwell
Group LLC and the Registrant.**
10.12 Amendment 1 to Commercial Lease dated as of November 28, 1997.**
10.13 Employment Agreement dated as of March 31, 1999 by and between Scott
S. Sheldon and the Registrant.**
10.14 Employment Agreement dated as of April 30, 1999 by and between Howard
Pinsky and the Registrant.**
10.15 Form of Director Indemnity Agreement.**
10.16 Form of Director Work Product Agreement.**
10.17 Form of Director Confidentiality Agreement.**
10.18 Form of Common Stock Warrant.**
10.19 Form of Series K Common Stock Warrant.**
10.20 Form of Series J Preferred Warrant.**
10.21 Web Software Licensing and Development Agreement dated as of September
10, 1999 between the Registrant and AWARE, Inc.+
10.22 Software Licensing and Development Agreement dated as of May 30, 1997
between the Registrant and AWARE, Inc.+
10.23 Amended and Restated Reseller Agreement dated as of May 30, 1997
between the Registrant and ISG Technologies, Inc.+
10.24 Amendment No. 1 to Amended and Restated Reseller Agreement dated as of
April 30, 1998 between the Registrant and ISG Technologies, Inc.+**
10.25 Letter Agreement dated as of December 29, 1998 between the Registrant
and ISG Technologies, Inc.+
10.26 Access Radiology Corporation Confidentiality Agreement dated as of
March 31, 1995 between the Registrant and ISG Technologies, Inc.**
10.27 OEM Development Software Agreement dated as of November 9, 1995
between the Registrant and Mitra Imaging Incorporated.+
10.28 Amendment to OEM Development Software Agreement dated as of May 20,
1995 between the Registrant and Mitra Imaging Incorporated.+**
10.29 Amendment to OEM Development Software Agreement dated as of April 28,
1999 between the Registrant and Mitra Imaging Incorporated.+**
23.1 Consent of Ropes & Gray (Exhibit 5).**
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
24 Power of Attorney (included on page II-5).**
27.1 Financial Data Schedule.**
</TABLE>
- --------
**Previously Filed
+Portions have been omitted pursuant to a request for confidential treatment
dated October 12, 1999
II-3
<PAGE>
(b) Financial Statement Schedules
Schedule II--Valuation and Qualifying Accounts.
<TABLE>
<CAPTION>
Balance at Balance at
beginning of Charged to end of
Description period Operations Deductions period
- ----------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
Year ended December 31, 1996
Reserves and allowances
deducted from
asset accounts...............
Allowance for doubtful
accounts.................... $ -- 25,000 -- $ 25,000
Year ended December 31, 1997
Reserves and allowances
deducted from
asset accounts ..............
Allowances for doubtful
accounts ................... $25,000 10,000 -- $ 35,000
Year ended December 31, 1998
Reserves and allowances
dededucted from
asset accounts ..............
Allowances for doubtful
accounts ................... $35,000 460,000 (7,927)(1) $487,073
</TABLE>
- --------
(1) Uncollectible accounts written off.
All other schedules are omitted because they are not applicable or the
required information is shown in the other Financial Statements or Notes
thereto.
Item 17. Undertakings
(a) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under "Item 14--Indemnification
of Directors and Officers" above, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes to provide to the
underwriter at the closing specified in the purchase agreements, certificates
in such denominations and registered in such names as required by the
underwriters to permit prompt delivery to each purchaser.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lexington, MA on this
8th day of October 1999.
eMed Technologies Corporation
/s/ Scott S. Sheldon
By: _________________________________
Scott S. Sheldon
Chief Executive Officer and
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott S. Sheldon President, Chief Executive October 8, 1999
______________________________________ Officer and Director
Scott S. Sheldon
/s/ Gary A. Lortie Chief Financial Officer October 8, 1999
______________________________________
Gary A. Lortie
* Director October 8, 1999
______________________________________
James J. Bochnowski
* Director October 8, 1999
______________________________________
Thomas B. Neff
* Director October 8, 1999
______________________________________
Thomas O. Pyle
* Director October 8, 1999
______________________________________
Michael Schmertzler
* Director October 8, 1999
______________________________________
</TABLE> Donald E. Strange
By: /s/ Gary A. Lortie
-----------------------------
Attorney in fact
II-5
<PAGE>
CONFIDENTIAL TREATMENT EXHIBIT 10.21
WEB SOFTWARE LICENSING AND DEVELOPMENT AGREEMENT
This Web Software Licensing and Development Agreement is entered into as of
September 10, 1999 (the "Effective Date") between AWARE, Inc. ("AWARE") and eMed
Technologies Corporation ("EMED"), formerly known as ACCESS Radiology
Corporation.
Background
----------
1. EMED is in the business of providing integrated hardware and software
systems and services with respect to the transmission and interpretation of
medical images.
AWARE develops and licenses proprietary computer software that is useful for
compression and web-based viewing of digital images.
2. AWARE and EMED are parties to a Software Licensing and Development
Agreement dated May 30, 1997 (the "1997 Agreement"). The 1997 Agreement provides
for the licensing of various software by AWARE to EMED on the terms set forth
therein. Among other things, the 1997 Agreement contemplated the development,
licensing and marketing of certain new software, referred to in the 1997
Agreement as the "Joint Product". The 1997 Agreement sets forth procedures under
which the Joint Product would be developed and licensed, royalties would be
negotiated, and ownership of intellectual property would be determined.
3. The development efforts contemplated with respect to the Joint Product by
the 1997 Agreement have now resulted in the initial commercial release of a
software application for the web-based viewing and distribution of medical
images and related information. This release having occurred, AWARE and EMED now
wish to provide for definitive terms upon which this new software will be
licensed and marketed, and upon which further development work relating to the
new software will proceed.
NOW, THEREFORE, the parties agrees as follows:
CONFIDENTIAL TREATMENT
1
<PAGE>
I. MODIFICATION OF THE 1997 AGREEMENT.
1.01. Termination of Joint Product Provisions. Article III of the 1997
---------------------------------------
Agreement, which provides for various matters relating to the "Joint Product" as
defined therein, shall terminate upon the execution of this Agreement. In
addition, references to the Joint Product in Articles IV, V and VI of the 1997
Agreement shall have no further force or effect upon the execution of this
Agreement. The rights and obligations of AWARE and EMED with respect to the Web
Product and the related Licensed Software (as defined in Section 2.01 of this
Agreement), and with respect to the Joint Product (as defined Article III of
this Agreement)shall be governed exclusively by this Agreement, and not by the
1997 Agreement. The rights and obligations of AWARE and EMED with respect to the
"Compression Software" (as defined in the 1997 Agreement) shall be governed
exclusively by the 1997 Agreement, and not by this Agreement.
1.02 Survival of the 1997 Agreement. The 1997 Agreement shall survive the
-------------------------------
execution of this Agreement and shall continue to govern the rights and
obligations of the parties with respect to the "Compression Software" (as
defined in the 1997 Agreement), except to the extent expressly modified by this
Agreement. The references to "Schedule I" in Sections 1.01, 1.03(b), 1.04(a),
and 2.02(b) of the 1997 Agreement are amended to refer to "the documentation
separately supplied by AWARE".
II. LICENSING OF SOFTWARE; PAYMENTS.
2.01 Grant of License. Subject to the terms of this Agreement, AWARE grants to
-----------------
EMED the following rights, under any patent, copyright, trade secret or other
proprietary right (other than any trademark) of AWARE, whether presently held or
hereafter acquired, with respect to (i) the proprietary web-based image viewing
and distribution software identified on Schedule I and any upgrades or
modifications thereof (the "Web Product") and (ii) any other web-based image
viewing or distribution software developed by AWARE pursuant to this Agreement
(such software and the Web Product being referred to collectively as the
"Licensed Software"):
CONFIDENTIAL TREATMENT
2
<PAGE>
(a) The right to use the Licensed Software for internal purposes and
in support of users of EMED products for Medical Use, and to use and make
available the Licensed Software as part of EMED's product line and for
integration with other components of EMED products.
(b) The right to grant sublicenses of the Licensed Software for
Medical Use to users of EMED products and to original equipment
manufacturers or other parties which utilize toolkits to create derivative
products for Medical Use which are in turn licensed to end users.
Sublicenses of software will be granted in compliance with the procedures
set forth in Section 6.01.
(c) The right to modify the Licensed Software to create new releases
and new products for Medical Use, and to grant sublicenses of software as
modified for Medical Use to users and to original equipment manufacturers
or other parties which utilize toolkits to create derivative products for
Medical Use which will in turn be licensed to end users. Sublicenses of
software will be granted in compliance with the procedures set forth in
Section 6.01.
For purposes of the Agreement, "Medical Use" means the compression,
transmission, viewing or other processing of medical images. The rights granted
to EMED shall be exclusive to the extent set forth in Article III.
2.02. License Fees. (a) License fees payable to AWARE with respect to the Web
------------
Product will be determined based upon the terms on which the Web Product is made
available to customers. EMED expects to offer the Web Product to customers under
a plan in which the customer's initial payment upon installation of the Web
Product would be [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] Licenses granted under
such a plan are referred to as "Subscription Sales". Customers are also expected
to be offered the [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] License fees payable
with respect to Subscription Sales will be calculated as provided in subsection
(b) below, and license fees payable with respect to all other sales of licenses
of
CONFIDENTIAL TREATMENT
3
<PAGE>
the Web Product will be calculated as provided in subsection (c) below.
(b) With respect to each Subscription Sale of the Web Product, EMED will pay
to AWARE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.] of Net Client License Revenue (as
defined in subsection (d) below) attributable to licenses of the client portion
of the Web Product. These fees are in addition to, and not in lieu of, the
license fees payable for compression software under the 1997 Agreement.
(c) With respect to sales of the Web Product other than Subscription Sales,
EMED will pay to AWARE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] of Net Software License
Revenue.
(d) Net Client License Revenue means amounts paid to EMED in Subscription
Sales for [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] (excluding taxes, shipping, insurance,
the interest portion of payments under rental or leasing arrangements, actual
customer returns, customs duties, and any charges for services).
(e) Net Software License Revenue means amounts paid to EMED by customers for
[*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] (excluding taxes, shipping, insurance, the
interest portion of payments under rental or leasing arrangements, actual
customer returns, customs duties, and any charges for services), [*THE
CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
] "High End Storage and Network Hardware" is defined in
Schedule II.
CONFIDENTIAL TREATMENT
4
<PAGE>
(f) No royalties shall be payable under this Section 2.02 for beta testing
installations, or demonstration or loaner units. The duration of beta testing
will be limited to a period of time no longer than that which is determined by
EMED to be reasonably necessary for satisfaction of the requirements for
commercial marketing of the product or release being tested. Loaner units will
be provided for a period of time no longer than that which is reasonably
necessary for the customer to assess the functionality and desirability of the
product or release being loaned. EMED will not make the Web Product available
without charge except for (i) beta testing installations, demonstration or
loaner units and (ii) copies of client software provided to radiologists in
connection with Subscription Sales, and EMED will not make the Web Product
available without charge to assist in selling other products or in generating
revenues from other sources.
2.03. Payments. (a) Promptly after the end of each calendar quarter, EMED will
--------
deliver to AWARE a statement setting forth, for such quarter, the number of
copies of server software included in Subscription Sales, Net Client License
Revenue, and Net Software License Revenue. Each quarterly statement shall be
accompanied by payment of license fees due. EMED will use its best efforts to
provide such statement and pay license fees due within 30 days of the end of
each calendar quarter. Each quarterly statement and payment of license fees
shall be provided no later than 60 days after the end of the relevant calendar
quarter.
(b) EMED will keep complete books of account containing all particulars that
may be necessary to determine the amounts payable to AWARE hereunder. Such books
and supporting data shall be open for inspection for one year following the
calendar year to which they pertain, at reasonable times and upon reasonable
notice, by an independent auditor for purposes of verifying the statements
delivered pursuant to subsection (a) above. AWARE will not conduct more than one
such inspection for books and supporting data relating to any single calendar
year. The results of any inspection shall be made available to EMED. If the
agreed results of an inspection show an underpayment or overpayment, then EMED
shall pay to AWARE the amount of any underpayment and AWARE shall pay to EMED
the amount of any overpayment. If the agreed results of such inspection show
that EMED has underpaid AWARE by [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] then EMED shall
pay to AWARE the reasonable and
CONFIDENTIAL TREATMENT
5
<PAGE>
documented out of pocket costs of conducting such inspection, and allow
inspection of the books and supporting data for the prior two years. AWARE shall
otherwise bear the costs it incurs in performing any inspection.
2.04. Other Products. With respect to Licensed Software that may be developed
--------------
in the future, the parties will negotiate in good faith to determine definitive
terms. It is the intention of the parties that license fees shall be consistent
with the rate of [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of Net Software License
Revenue as described in this Agreement.
III. MARKETING FOR NON-MEDICAL USE.
3.01 AWARE shall have the exclusive right to market software and other
components included in the Web Product and any other software developed pursuant
to this Agreement (the "Joint Product"), under any patent, copyright, trade
secret or other proprietary right of EMED (other than any trademark), whether
presently held or hereafter acquired, for all uses other than Medical Use. AWARE
shall have the following rights with respect to the Joint Product, which EMED
hereby grants to AWARE.
(a) The right to use the Joint Product for internal purposes and in
support of users of AWARE products, and to use and make available the Joint
Product as part of AWARE's product line and for integration with other
components of AWARE products, in all cases for uses other than Medical Use.
Medical Use includes grants of licenses to indemnity insurance companies,
and AWARE will not grant any such licenses.
(b) The right to make and have made, use and have used, and sell,
lease or otherwise transfer the Joint Product, and to grant sublicenses of
the software and other intellectual property included in the Joint Product
to users of AWARE products in which such software is included, in all cases
for uses other than Medical Use. Users to whom sublicenses are granted may
include original equipment manufacturers
CONFIDENTIAL TREATMENT
6
<PAGE>
or other parties which utilize toolkits to create derivative products for
any use other than for Medical Use, which will in turn be licensed to end
users. Sublicenses of software will be granted in compliance with the
procedures set forth in Section 7.01.
(c) The right to modify the Joint Product and the software included
in it to create new releases and new products, to make and have made, use
and have used, and sell, lease or otherwise transfer products including
modifications, and to grant sublicenses of software as modified to users of
AWARE products in which such software is included, in all cases for uses
other than Medical Use. Users to whom sublicenses are granted may include
original equipment manufacturers or other parties which utilize toolkits to
create derivative products for any use other than for Medical Use, which
will in turn be licensed to end users. Sublicenses of software will be
granted in compliance with the procedures set forth in Section 7.01.
3.02. AWARE shall pay royalties to EMED for licenses granted under this
Article III in amounts to be agreed between EMED and AWARE, and at intervals and
under procedures substantially the same as those set forth for payments by EMED
in Section 2.03. The royalties payable to EMED shall be a percentage (the
"Royalty Percentage") of amounts paid to AWARE for license of the Joint Product.
The Royalty Percentage shall be a percentage of not less than [*The confidential
portion has been omitted and filed separately with the Securities and Exchange
Commission.] which shall reflect the contribution of EMED during the term of
this Agreement to aspects of the Joint Product developed for uses other than
Medical Use. The Royalty Percentage will be determined based upon the principle
that the Royalty Percentage will be fixed at [*The confidential portion has been
omitted and filed separately with the Securities and Exchange Commission.] if
EMED contributes little or nothing to during the term of this Agreement to
aspects of the Joint Product developed for uses other than Medical Use, and will
approach [*The confidential portion has been omitted and filed separately with
the Securities and Exchange Commission.] if EMED contributes significantly to
such aspects. The exact percentage will depend on the mutual agreement of the
parties as to the significance of EMED's contribution. Promptly upon completion
of the functional product descriptions and design specifications
CONFIDENTIAL TREATMENT
7
<PAGE>
for the Joint Product, AWARE and EMED will negotiate in good faith to reach
agreement on the Royalty Percentage. As it is not contemplated that EMED will
contribute development efforts to aspects of the Joint Product other than
Medical Use, if no agreement is reached within [*The confidential portion has
been omitted and filed separately with the Securities and Exchange Commission.]
days, the Royalty Percentage shall be fixed at [*The confidential portion has
been omitted and filed separately with the Securities and Exchange Commission.]
Except as agreed in writing with EMED, AWARE will not make the Joint Product
available without charge.
IV. EXCLUSIVITY
4.01 Exclusivity Commitments. (a) EMED shall have the exclusive right to use
-----------------------
and sublicense software developed or owned by AWARE for Medical Use to the
extent set forth herein. From the date of this Agreement until the termination
of exclusivity as provided in Section 6.01, AWARE will not (except as expressly
permitted by this Agreement) supply for Medical Use or permit any person to use
for Medical Use (i) the Web Software or any modification or improvement of the
Web Software or (ii) any other dynamic HTML or plug-in product that is
developed, owned or licensed by AWARE. AWARE will take reasonable steps to
assure compliance with this exclusivity commitment by third parties to whom
AWARE provides software. Notwithstanding anything contained in this Agreement,
AWARE may provide its ADSL, SDSL, HFC and any other general data communication
product to third parties for Medical Use or any other purpose.
(b) From the date of this Agreement until the termination of exclusivity as
provided in Section 6.01, AWARE will be the exclusive supplier to EMED of web-
based image viewing and distribution software for use in EMED products. EMED
will not independently develop any such software and will not include any such
software (other than that developed by or in cooperation with AWARE under this
Agreement) in the Web Product or any product that is competitive with the Web
Product. The parties understand and agree that home, diagnostic and intensive
care unit viewers are complementary to the Web Product and are therefore not
within the scope of the foregoing restrictions.
CONFIDENTIAL TREATMENT
8
<PAGE>
4.02. Exceptions. (a) Licenses of software for Medical Use which have been
----------
previously granted and for which all license fees have been invoiced as of the
date of this Agreement shall continue in effect notwithstanding Section 4.01.
However, AWARE will not provide upgrades or new releases for any software
subject to such licenses except as expressly permitted in this Section 4.02.
(b) Notwithstanding Section 2.01, AWARE may continue to perform its
contractual obligations to a party previously identified to EMED by AWARE
through July 30, 2000.
(c) Notwithstanding section 2.01, AWARE may until December 30, 1999 grant to a
second party previously identified to EMED by AWARE, licenses for Medical Use of
compression libraries and plugins, and may permit such party to include copies
of such software in equipment made available to end users. During the period
from the effectiveness of this agreement until December 30, 1999 AWARE shall
not improve in any material way the functionality of the software licensed to
this party.
4.03. Transition. Promptly after the date of this Agreement, AWARE will
----------
publicly announce that it has enlarged its exclusive relationship with EMED and
that EMED and AWARE are making a commitment to the Web Product. This
announcement will be subject to review by EMED before its release. EMED may
disclose the relationship between AWARE and EMED contemplated by this Agreement
in technical and product oriented marketing materials without review by AWARE.
EMED may disclose this Agreement and the relationship contemplated hereby in
filings with securities regulators to the extent set forth in Section 7.06. All
other public announcements by EMED that refer to AWARE will be subject to review
by AWARE prior to their release.
V. DUTIES OF EMED AND AWARE
5.01. Duties of EMED. EMED will use its best efforts to maximize the market
--------------
and sales volume for the Web Product. EMED will dedicate full-time engineering
management, and make substantial and continued resources available for sales,
marketing, support, installation and training for the Web Product. EMED will
continue to make modifications to its core image server (Compression Server)
products to accommodate greater functionality, performance,
CONFIDENTIAL TREATMENT
9
<PAGE>
and reliability of the complete product offering. EMED will also either develop
or source other products that improve the functionality and marketability of
EMED's web and client/server products as appropriate in the judgment of EMED.
5.02. Duties of AWARE. AWARE will continue to provide primary engineering
---------------
application development for EMED's web-based image viewing and distribution
software for use in EMED products including the client software and dynamic HTML
generation applications included in the Web Product. AWARE's responsibilities
will specifically include bug fixes, work-arounds and other software support as
needed to cause the Licensed Software to perform in accordance with its
specifications. AWARE will also make available, upon request by EMED, additional
applications, additional features on existing applications, and changes to core
technology as specified by EMED. AWARE will dedicate to these activities a
minimum of [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.] qualified full-time software engineers
who are knowledgeable in compression and web technology, a part time test
engineer, and additional engineering management resources as required.
5.03. Meetings. Management of AWARE and EMED will meet on a monthly basis to
---------
review technical and market progress towards meeting goals and objectives.
VI. TERM
6.01. Term; Effect of Expiration. (a) The initial term of this Agreement shall
--------------------------
extend until December 31, 2005. The term of this Agreement may be renewed by
mutual agreement of the parties.
(b) If the term of this Agreement shall expire (and this Agreement shall not
have been terminated for breach pursuant to Section 6.02), the licenses granted
in Section 2.01 and Section 3.01 shall remain in effect for five years from the
date of expiration; provided that such licenses shall be modified so that they
are no longer exclusive.
(c) AWARE and EMED agree that the royalties and license fees payable under
this Agreement shall be modified effective upon modification of the licenses
granted
CONFIDENTIAL TREATMENT
10
<PAGE>
hereunder pursuant to subsection (b) above. AWARE and EMED further agree
that the appropriate amount of such modified royalties and license fees cannot
be determined as of the date of this Agreement. AWARE and EMED shall negotiate
in good faith for at least three months after effectiveness of license
modification pursuant to subsection (b) to reach agreement on modified license
fees and royalties. If, at any time after the end of such three month period,
either party shall determine in its judgment that negotiations are unlikely to
result in an acceptable outcome, such party may initiate arbitration to
determine modified fees and royalties pursuant to the procedures specified in
Section 8.01.
6.02. Termination for Breach. (a) If EMED shall materially breach its
-----------------------
obligations under this Agreement, and such material breach shall be continuing
for at least 60 days after delivery of a notice by AWARE describing such breach,
then AWARE may by a separate notice terminate this Agreement for breach under
this Section 6.02(a).
(b) If AWARE shall materially breach its obligations under this Agreement, and
such material breach shall be continuing for at least 60 days after delivery of
a notice by EMED describing such breach, then EMED may by a separate notice
terminate this Agreement for breach under this Section 6.02(b).
(c) With respect to the obligations of AWARE and EMED under Sections 5.01 and
5.02, "material breach" means willful failure of a party to allocate the
resources required by the Section 5.01 or 5.02 (as the case may be) to the
performance of such party's responsibilities.
(d) Termination for breach under this Section 6.02 shall not be an exclusive
remedy, but shall be in addition to any other remedies that either party may
have.
6.03. Effect of Termination for Breach. (a) If AWARE shall terminate this
---------------------------------
Agreement for breach pursuant to Section 6.02, then the license granted to EMED
pursuant to Section 2.01 shall immediately terminate and EMED shall cease using
or marketing the Licensed Software and the Web Product; provided that EMED shall
fulfill any maintenance obligations existing as of the effective date of such
termination. Upon the effectiveness of such a termination,
CONFIDENTIAL TREATMENT
11
<PAGE>
the exclusivity obligations of AWARE pursuant to Article III shall terminate.
(b) If EMED shall terminate this Agreement for breach pursuant to Section
6.02, then the license granted to EMED pursuant to Section 2.01 and the
exclusivity provisions binding upon AWARE pursuant to Article IV shall remain in
effect, and the exclusivity obligations of EMED pursuant to Article IV shall
terminate. In such event, AWARE shall continue to provide bug fixes, work-
arounds and other software support as needed to cause the Licensed Software to
perform in accordance with its specifications. Also in such event, EMED shall
retain source code delivered under Section 7.03, AWARE shall deliver to EMED any
additional source code of the Licensed Software not previously delivered under
Section 7.03, and EMED shall continue to have the right to modify the Licensed
Software. For so long as the license granted under Section 2.01 continues in
effect pursuant to this subsection (b), EMED shall pay license fees as provided
in Section 2.02. Upon the effectiveness of any termination by EMED for breach
under Section 6.02(b), the license granted to AWARE under Article III shall
terminate.
6.04. Additional Surviving Terms. All payment obligations accrued prior to
--------------------------
any termination or expiration of this Agreement shall survive such termination
or expiration. All sublicenses granted to any end user in accordance with this
Agreement prior to any termination or expiration of this Agreement shall survive
such termination or expiration. If EMED holds a continuing license under this
Agreement, EMED shall also continue to have the rights set forth in Section 7.03
with respect to such license. The provisions of Sections 6.05, 7.02, 7.05, 7.06,
8.01, 8.02, 8.03 and 8.12 shall survive any termination or expiration of this
Agreement.
6.05. Intellectual Property. AWARE and EMED shall negotiate in good faith
----------------------
for at least three months after effectiveness of expiration or termination of
this Agreement to reach agreement on specific definition of the intellectual
property owned by each party in accordance with the principles set forth in
Section 7.02. If, at any time after the end of such three month period, either
party shall determine in its judgment that negotiations are unlikely to result
in an acceptable outcome, such party may initiate arbitration to determine
ownership of intellectual
CONFIDENTIAL TREATMENT
12
<PAGE>
property pursuant to the procedures specified in Section 8.01.
VII. INTELLECTUAL PROPERTY
7.01. Software Licensing Procedures. (a) The procedures set forth in this
------------------------------
Section 67.01 shall govern the granting of sublicenses of software under this
Agreement.
(b) Each of AWARE and EMED shall assign a unique number to each copy made
by it of Licensed Software or any other software provided to it by the other
party, whether for internal use or for sublicense to a user. Each of AWARE and
EMED shall keep full, clear and accurate records of all copies that it makes of
any such software and the identity and location of each third party to whom any
such software is provided. Each of EMED and AWARE may examine records of the
other party not more than once in any calendar quarter, during normal business
hours and upon reasonable notice.
(c) Sublicenses of software granted under this Agreement shall include the
following provisions. Such terms may be set forth in a reasonably prominent
printed or electronic document that accompanies the software being sublicensed
and states that by use of such software, the user agrees to the terms set forth
in the document. Sublicenses may be granted directly, or by a reseller or other
intermediary. The provisions required by this subsection (c) are:
(i) a provision restricting the sublicensee's use of the licensed
software to its own business and professional purposes, provided that any
sublicensee of a toolkit may use it to create new applications to be
licensed to end users as part of the sublicensee's product;
(ii) a provision requiring the sublicensee to take all reasonable
precautions to keep the licensed software and any related documentation
confidential;
(iii) a provision prohibiting the sublicensee from reproducing
(except for backup copies), reverse engineering, translating or creating
other versions of the licensed software, provided that any sublicensee of a
toolkit may use it to create new applications to
CONFIDENTIAL TREATMENT
13
<PAGE>
be licensed to end users as part of the sublicensee's product;
(iv) a provision acknowledging that ownership of the licensed
software remains exclusively with the grantor of the license or its
suppliers;
(v) a provision limiting the other party's liability to the
sublicensee to at least the same extent that the liability of the grantor
to the sublicensee is limited, and disclaiming warranties on behalf of the
other party at least to the extent disclaimed on behalf of the grantor; and
(vi) a provision stating that AWARE or EMED (as the case may be) is
an intended third party beneficiary of the foregoing to the extent any
materials or information delivered to the sublicensee originated with or
are derived from materials or information supplied by AWARE or EMED (as the
case may be), and shall have the right to enforce and shall be entitled to
the benefit of any of the foregoing provisions as they relate to such
materials or information.
Each party will use reasonable efforts to enforce license agreements executed by
its customers. In no event shall source code be released to any sublicensee.
(d) Notwithstanding this Section 7.01 or any other provision of this
Agreement, software may be licensed to the Government of the United States of
America, or an agency or instrumentality thereof, under an agreement containing
software licensing terms generally used by the United States Government (or the
agency or instrumentality to which the software is licensed) for procurement of
commercial software.
7.02. Ownership. (a) As between EMED and AWARE, AWARE owns any software
---------
developed solely by AWARE or by any employee, consultant or other person acting
on AWARE's behalf (other than EMED) under this Agreement, including any
inventions, concepts, specifications, know-how and ideas embodied in such
software, together with all proprietary rights therein ("AWARE Intellectual
Property"). As between EMED and AWARE, EMED owns and shall continue to own those
concepts, specifications, know-how, and ideas
CONFIDENTIAL TREATMENT
14
<PAGE>
embodied in the design and functionality of the Web Product and conceived solely
by EMED, and as applied in the Web Product for Medical Use, and any software
developed solely by EMED or by any employee, consultant or other person acting
on EMED's behalf (other than AWARE) under this Agreement, including any
inventions, concepts, specifications, know-how and ideas embodied in any of the
foregoing, together with all proprietary rights therein ("EMED Intellectual
Property"). As between EMED and AWARE, the parties shall jointly own any
software or other intellectual property jointly developed by the parties under
this Agreement and not allocated between them above, including any inventions,
concepts, specifications, know-how and ideas embodied therein, together with all
proprietary rights therein ("Joint Intellectual Property"). Whether or not any
intellectual property is jointly developed shall be determined in accordance
with United States patent or copyright law as applicable; provided that in no
event shall either party have an obligation to account to the other except as
specifically provided in this Agreement.
(b) AWARE shall have the right to file and prosecute patent or copyright
applications on AWARE Intellectual Property and EMED shall have the right to
file and prosecute patent or copyright applications on EMED Intellectual
Property. The parties will cooperate in the filing and prosecution of patent or
copyright applications on Joint Intellectual Property, provided that neither
party shall file any such patent or copyright application without the prior
written consent of the other. Each party will cooperate with the other party in
the filing and prosecution by the other party of any patent or copyright
application that complies with this subsection (b), including by executing and
delivering or causing its officers and employees to execute and deliver (all at
the expense of the filing party) any documentation reasonably necessary or
appropriate for the filing and prosecution of such an application and the
vesting of rights as provided in this Agreement.
(c) The exclusivity obligations of the parties under Article IV shall not in
any way be affected by the ownership of AWARE Intellectual Property, EMED
Intellectual Property, or Joint Intellectual Property as provided in this
Section 7.02, or by the filing of any patent or copyright application or the
grant or issuance of any
CONFIDENTIAL TREATMENT
15
<PAGE>
patent or copyright. Neither party shall market, sell, license or distribute any
Joint Intellectual Property except to the extent that such Joint Intellectual
Property is covered by a license granted to such party hereunder.
7.03 Source Code. Copies of source code of all Licensed Software will be made
-----------
available to EMED by AWARE upon completion of each release or patch in which
such source code is included. The fact that AWARE has provided access to source
code shall in no way affect proprietary rights to source code or software, and
all source code shall continue to be owned by the party that owned it prior to
disclosure. All source code is "Confidential Information" as that term is used
in Section 7.06 and shall be subject to the restrictions set forth in Section
7.06. EMED will maintain source code revision control procedures with which both
AWARE and EMED will comply. These procedures will be designed to achieve, among
other things, compliance with "Good Manufacturing Practices" as defined by the
U.S. Food and Drug Administration and documentation of the ownership of source
code disclosed by either party. Provision of source code to EMED shall not
affect AWARE's obligations to provide engineering resources and support under
Section 5.01. Should AWARE wish to utilize its license rights pursuant to
Section 3.01, AWARE will notify EMED of such intentions and copies of source
code of Joint Products will be made available to AWARE by EMED upon completion
of each release or patch in which such source code is included. The fact that
EMED has provided access to source code shall in no way affect proprietary
rights to source code or software, and all source code shall continue to be
owned by the party that owned it prior to disclosure. All source code is
"Confidential Information" as that term is used in Section 7.06 and shall be
subject to the restrictions set forth in Section 7.06.
7.04. Representations. (a) AWARE represents to EMED that AWARE has full
---------------
authority to enter into this Agreement and grant the licenses and rights set
forth herein.
(b) EMED represents to AWARE that EMED has full authority to enter into this
Agreement and grant the licenses and rights set forth herein.
7.05. Indemnities. (a) AWARE will, at its expense, defend against, hold EMED
-----------
harmless from, and pay any final judgment against EMED or any customer of EMED
arising out
CONFIDENTIAL TREATMENT
16
<PAGE>
of (x) any claim that the Licensed Software infringed a copyright,
a patent or a trade secret of a third party, unless in the case of third party
patent claims, (i) AWARE can show that the patent claimed to have been infringed
was not known to Aware at the time of delivery to EMED of the infringing portion
of Licensed Software or (ii) such patent was infringed in order to comply with
an EMED design or specification or (iii)such patent would not be infringed by
the use of Licensed Software alone and not in combination with any EMED
software; or (y) out of marketing by AWARE of AWARE products (including any
product liability claim unless such product liability claim is caused by
designs, specifications or software provided by EMED); provided that (i) EMED
notifies AWARE in writing of such claim or action, and (ii) AWARE has sole
control of the defense and settlement of such claim or action. In defending
against such claim or action to the extent it relates to software provided by
AWARE, AWARE may, at its option, agree to any settlement in which AWARE shall
either (1) procure for EMED and all customers of EMED the right to continue
using the software at issue; or (2) modify or replace such software so that it
no longer infringes, to the extent that the exercise of such option does not
result in a material adverse change in the operational characteristics of such
software, and equivalent functions and performance provided by AWARE remain
following implementation of such option. If AWARE concludes in its judgment
that none of the foregoing options is reasonable, AWARE may remove the software
at issue and any other component supplied by AWARE rendered unusable as a result
of such removal and pay to EMED damages arising therefrom, including damages
incurred by reason of EMED's inability to perform its obligations under
sublicenses; provided that AWARE's liability for damages arising from such
inability shall be [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
(b) EMED will, at its expense, defend against, hold AWARE harmless from, and
pay any final judgment against AWARE or any customer of AWARE arising out of (x)
any claim that any software licensed to AWARE by EMED hereunder infringed a
copyright, a patent or a trade secret of a third party, unless in the case of
third party patent claims, (i) EMED can show that the patent claimed to have
been infringed was not known to EMED at the time of delivery to AWARE of the
infringing software or (ii) such patent was infringed in order to comply with an
AWARE
CONFIDENTIAL TREATMENT
17
<PAGE>
design or specification or (iii) such patent would not be infringed by the use
of the software licensed by EMED alone and not in combination with any AWARE
software; or (y) out of marketing by EMED of EMED products (including any
product liability claim unless such product liability claim is caused by
designs, specifications or software provided by AWARE) provided that (i) AWARE
notifies EMED in writing of such claim or action, and (ii) EMED has sole control
of the defense and settlement of such claim or action. In defending against such
claim or action to the extent it relates to software provided by EMED, EMED may,
at its option, agree to any settlement in which EMED shall either (1) procure
for AWARE and all customers of AWARE the right to continue using the software at
issue; or (2) modify or replace such software so that it no longer infringes, to
the extent that the exercise of such option does not result in a material
adverse change in the operational characteristics of such software, and
equivalent functions and performance provided by EMED remain following
implementation of such option. If EMED concludes in its judgment that none of
the foregoing options is reasonable, EMED may remove the software at issue and
any other component supplied by EMED rendered unusable as a result of such
removal and pay to AWARE damages arising therefrom, including damages incurred
by reason of AWARE's inability to perform its obligations under sublicenses;
provided that EMED's liability for damages arising from such inability shall be
[*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.]
(c) If EMED shall determine in its judgment that the concepts, specifications,
know-how, and ideas embodied in the design and functionality of the Licensed
Software infringe or conflict with a patent or copyright not known to EMED on
the date of this Agreement, then EMED shall notify AWARE and the parties will
discuss in good faith whether the Licensed Software can be modified or other
steps may be taken to avoid such infringement. If EMED determines in its
judgment that no such modification or other steps can be reasonably implemented,
EMED may by notice terminate the obligations of AWARE and EMED under this
Agreement with respect to the affected portion of the Licensed Software, and the
indemnity of EMED in subsection (b) above shall apply only to those claims
relating to the affected portion of the Licensed Software of which AWARE or
CONFIDENTIAL TREATMENT
18
<PAGE>
EMED had notice prior to the date of the first notice regarding infringement
delivered by EMED.
7.06. Confidentiality. As used in this Agreement, "Confidential
---------------
Information" means (i) all confidential information, proprietary software, trade
secrets, know-how, and all other intellectual property that is subject to the
licenses granted in this Agreement and in which proprietary rights would be
adversely affected by disclosure and (ii) all other confidential or proprietary
information (including without limitation financial information and business
information such as customer lists) that is or has been disclosed by AWARE to
EMED or by EMED to AWARE. AWARE and EMED agree that they will not, and will not
permit their respective officers, employees, agents and representatives to,
without first obtaining the written consent of the other party, use, sell or
disclose any Confidential Information, except as expressly contemplated hereby
and except that Confidential Information may be disclosed by the party that owns
it unless such disclosure would adversely affect the proprietary nature of
Confidential Information subject to any of the licenses granted hereunder.
Either party may disclose Confidential Information to potential customers, and
to other third parties to the extent necessary to permit any such third party to
assist in manufacture or integration of the Web Product, provided that any such
potential customer or third party to whom Confidential Information is disclosed
shall execute a confidentiality agreement no less restrictive than this Section
7.06. "Confidential Information" does not include (i) information that is or
becomes (other than by disclosure in violation of this Agreement) generally
available to the public, (ii) information that the receiving party can show was
known to the receiving party prior to its disclosure by the other party, or
(iii) information required to be disclosed by law or regulation or by judicial
process or administrative order, provided that prompt notice and an opportunity
to seek a protective order is given to the other party prior to disclosure.
AWARE and EMED agree that this Agreement and the Schedules hereto are
Confidential Information subject to this Section 7.06. AWARE consents to the
disclosure of the relationship contemplated by this Agreement in filings by EMED
with the U.S. Securities and Exchange Commission and state securities
authorities, and the filing of this Agreement and the 1997 Agreement as related
exhibits; provided that EMED shall diligently seek confidential treatment of all
CONFIDENTIAL TREATMENT
19
<PAGE>
pricing information and shall promptly deliver a copy of all such filings to
AWARE.
VIII. GENERAL.
8.01. Arbitration. Any controversy or claim arising out of or relating to this
-----------
Agreement, or the breach thereof, shall be settled by arbitration administered
by the American Arbitration Association in Boston, Massachusetts under its
Commercial Arbitration Rules, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
Arbitration as specified in this Section 8.01 shall be the sole and exclusive
procedure for the resolution of disputes between the parties arising out of or
relating to this Agreement or the breach thereof; provided, however, that a
party, without prejudice to such procedure, may file a complaint to seek a
preliminary injunction or other provisional judicial relief, if in its judgment
such action is necessary to avoid irreparable damage or preserve the status quo.
Despite such action the parties will continue to participate in good faith in
the procedures specified in this Section 8.01. AWARE and EMED agree that any
breach of Sections 4.01, 4.02, 7.01 or 7.06 would cause irreparable harm and
that the aggrieved party shall be entitled to equitable relief in the nature of
an injunction for any such breach, without posting of a bond or other surety.
8.02. Limitation of Warranties. THE OBLIGATIONS OF AWARE AND EMED EXPRESSLY
-------------------------
STATED IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES OR CONDITIONS
EXPRESS OR IMPLIED. TO THE EXTENT ALLOWABLE TO BY LAW, THIS EXCLUSION OF ALL
OTHER WARRANTIES AND CONDITIONS EXTENDS TO IMPLIED WARRANTIES OR CONDITIONS OF
MERCHANTABLE QUALITY AND FITNESS FOR A PARTICULAR PURPOSE, OR AGAINST
INFRINGEMENT AND THOSE ARISING BY STATUTE OR OTHERWISE IN LAW, OR FROM A COURSE
OF DEALING OR USAGE OF TRADE.
8.03. Limitation of Liability. EMED AND AWARE AGREE THAT, EXCEPT AS EXPRESSLY
------------------------
STATED OTHERWISE IN SECTION 7.05. THE LIABILITY OF EITHER OF THEM TO THE OTHER,
IF ANY, UNDER ANY THEORY OF LAW OR EQUITY, ARISING OUT OF, OR IN ANY WAY RELATED
TO THIS AGREEMENT OR THE FULFILLMENT OF ANY OF THE OBLIGATIONS OF EITHER OF THEM
UNDER THIS AGREEMENT, IS LIMITED TO MONEY DAMAGES NOT TO EXCEED THE TOTAL AMOUNT
PAID OR PAYABLE BY EMED TO AWARE UNDER THIS AGREEMENT.
CONFIDENTIAL TREATMENT
20
<PAGE>
8.04. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the Commonwealth of Massachusetts.
8.05. Assignment. (a) Subject to EMED's right to grant sublicenses
----------
hereunder, EMED may not assign this Agreement or any rights hereunder without
the prior written consent of AWARE, except that, without such consent and upon
notice to AWARE, (i) EMED may assign all of its rights hereunder to a
corporation or other legal entity that acquires substantially all of EMED's
assets or where EMED is consolidated or merged, but then only upon the express
assumption by such transferee or its successor of the obligations set forth in
this Agreement and (ii) EMED may grant security interests in the rights of EMED
under this Agreement to secure the obligations of EMED to a bank or other
financial institution which has extended credit to EMED.
(b) AWARE may not assign this Agreement or any rights hereunder without
the prior written consent of EMED, except that, without such consent and upon
notice to EMED, (i) AWARE may assign all of its rights hereunder to a
corporation or other legal entity that acquires substantially all of AWARE's
assets or where AWARE is consolidated or merged, but then only upon the express
assumption by such transferee or its successor of the obligations set forth in
this Agreement and (ii) AWARE may grant security interests in the rights of
AWARE under this Agreement to secure the obligations of AWARE to a bank or other
financial institution which has extended credit to AWARE.
(c) This Agreement is binding upon, and inures to the benefit of, the
successors and permitted assigns of the parties.
8.06. Effect of Waiver. The waiver or failure of either party to exercise
----------------
in any respect any right provided for in this Agreement shall not be deemed
a waiver of any further or future right hereunder.
CONFIDENTIAL TREATMENT
21
<PAGE>
8.07. Headings. The headings used in this Agreement are for convenience of
--------
reference only and are not to be used in interpreting the provisions of this
Agreement.
8.08. Complete Agreement. This Agreement is the exclusive statement of the
------------------
understanding between the parties with respect to its subject matter. It
supersedes all prior agreements, negotiations, representations and proposals,
written or oral, relating to the subject matter hereof. No provisions of this
Agreement may be changed or modified except by an agreement in writing signed by
the party to be bound. No provision of any purchase order or other instrument
issued by EMED or any invoice or other form issued by AWARE that is inconsistent
with the provisions of this Agreement shall be binding or affect this Agreement
unless signed by both parties.
8.09. Severability. If any provision of this Agreement is invalid or
------------
unenforceable in any particular case, such case shall not invalidate or render
unenforceable any other part of this Agreement. This Agreement shall be
construed as not containing the particular provision or provisions held to be
invalid or unenforceable to the extent of the particular case, and the rights
and obligations of the parties hereto shall be construed and enforced
accordingly.
8.10. Effectiveness of Agreement; Counterparts. This Agreement is effective
----------------------------------------
when executed by both parties. This Agreement may be executed in counterparts,
each of which shall constitute one and the same instrument.
8.11. Notices. All notices provided for in this Agreement shall be in writing
-------
or facsimile, addressed to the appropriate party at the respective address set
forth below or to such other then-current address as is specified by notice, as
follows:
to AWARE:
AWARE, Inc.
40 Middlesex Turnpike
Bedford, MA 01730
Facsimile: (617) 276-4001
Attention: Edmund Reiter
CONFIDENTIAL TREATMENT
22
<PAGE>
to EMED:
EMED Technologies Corporation
25 Hartwell Avenue
Lexington, MA 02421
Facsimile: (781) 861-6360
Attention: Howard Pinsky
Notices sent by certified mail, return receipt requested to the address
specified pursuant to this Section 7.11 shall be effective three business days
after deposit in the U.S. Mail with postage prepaid. Notice delivered by any
other means shall be effective upon receipt.
7.12. No Agency. AWARE and EMED are independent contractors and separate legal
---------
entities and shall in no way be interpreted as partners, joint venturers,
agents, employees or legal representatives of each other for any purposes.
Neither party shall be responsible for or bound by any act of the other party or
the other party's agents, employees or any persons in any capacity in its
service.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
first date set forth above.
EMED TECHNOLOGIES
CORPORATION AWARE, INC.
By: /s/Howard Pinsky By: /s/ Edmund C. Reiter
----------------- --------------------
Name: Howard Pinsky Name: Edmund C. Reiter
Title: Chief Technology Title: Senior Vice President
Officer
CONFIDENTIAL TREATMENT
23
<PAGE>
Schedule 1
Description of Technology
The Web Product accepts medical images, reports, and other information from
various sources, and makes them available for distribution over the web to thin
web clients. Reports are collected and linked with the original studies
(images). The Web Product includes the application defined by EMED, and user
interfaces, features, and web server technology developed by EMED which handles
the image, text, voice and administrative input required for systems operation.
The Web Product further includes HTML generation, web plug-in, compression, and
end-user application software, using core components developed and owned by
AWARE, Inc. In addition, the product consists of user and technical
documentation which have been provided by both parties.
CONFIDENTIAL TREATMENT
24
<PAGE>
CONFIDENTIAL TREATMENT EXHIBIT 10.22
SOFTWARE LICENSING AND DEVELOPMENT AGREEMENT
This Software Licensing and Development Agreement is entered into as of May
30, 1997 (the "Effective Date") between AWARE, Inc. ("AWARE") and ACCESS
Radiology Corporation ("ACCESS").
Background
----------
1. ACCESS is in the business of providing integrated hardware and software
systems and services with respect to the transmission and interpretation of
medical images. AWARE develops and licenses proprietary computer software that
is useful for compression and web based viewing of digital images.
2. ACCESS and AWARE are currently parties to a Software Supply Agreement
dated as of November 8, 1995 (the "Old Agreement") under which ACCESS has
licensed certain software from AWARE.
3. ACCESS and AWARE wish to modify the terms of the Old Agreement with
respect to the software currently licensed to ACCESS, and to provide for the
development of new products as described below.
NOW, THEREFORE, the parties agree as follows:
I. LICENSING OF COMPRESSION SOFTWARE; PAYMENTS.
1.01. Grant of Compression License. Subject to the terms of this Agreement,
----------------------------
AWARE grants to ACCESS the following rights, under any patent, copyright, trade
secret or other proprietary right of AWARE, whether presently held or hereafter
acquired, with respect to the proprietary image compression software identified
on Schedule I (the "Compression Software"). The rights granted to ACCESS shall
be exclusive to the extent set forth in Article II.
(a) The right to use the Compression Software for ACCESS's internal
business purposes and for the support of ACCESS customers, and to use and
make available Compression Software, for integration solely with other
components of ACCESS products provided to ACCESS customers and solely for
CONFIDENTIAL TREATMENT
-1-
<PAGE>
Medical Use. ACCESS shall not resell toolkits or other applications
included in the Compression Software except to the extent integrated in
other ACCESS products with substantial ACCESS content.
(b) The right to grant sublicenses of the Compression Software for
Medical Use, solely as integrated with ACCESS products, to users of ACCESS
products. Sublicenses will be granted in compliance with the procedures set
forth in Section 5.01.
For purposes of the Agreement, "Medical Use" means the compression,
transmission, viewing or other processing of medical images.
1.02. Material Supplied for Compression Software. AWARE will make the
------------------------------------------
following materials available to ACCESS.
(a) One copy of the latest object code or executable code for the
Compression Software, with all upgrades as they are released. If the copy
of the Compression Software initially provided is lost, damaged or
destroyed, AWARE will provide at cost a replacement copy of the Compression
Software, which may be a more recent release or version.
(a) One copy of documentation in English and documentation updates as
they are prepared and released which, when taken together, constitute
complete documentation of the Compression Software. Additional copies of
documentation may be purchased at AWARE's then-current purchase price.
1.03. License Fees; Payments. (a) ACCESS shall prepay to AWARE a
----------------------
nonrefundable fee of [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] on account of the
license and other rights granted to ACCESS hereunder (the "Prepayment"). The
Prepayment shall be due on August 30, 1997. The Prepayment shall bear interest
at the rate of 1% per month from August 30, 1997 if not paid on or before that
date.
(b) [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.] of the Prepayment shall be applied to
pay a [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.] AWARE acknowledges that ACCESS has
[*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
CONFIDENTIAL TREATMENT
-2-
<PAGE>
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] as of the date of
this Agreement (the "Old Agreement Licenses"). [*THE CONFIDENTIAL PORTION
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.] of the Prepayment to license fees at the rate provided in this
subsection, [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] This pricing will
apply to the Compression Software product identified in Schedule I, and not
to the "Joint Product" developed pursuant to Article III.
(c) Promptly after the end of each calendar quarter, ACCESS will deliver to
AWARE a statement setting forth, for such quarter, (i) the number of sublicenses
of Compression Software granted for compression of images, (ii) the utilization
of Old Agreement Licenses, (iii) the amount of the Prepayment applied against
license fees due and (iv) any balance of license fees due. After [*THE
CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.] of the Prepayment and the [*THE CONFIDENTIAL PORTION
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.] each quarterly statement shall be accompanied by payment of license
fees due. ACCESS will use its best efforts to provide such statement and pay
license fees due within 10 days of the end of each calendar quarter. Each
quarterly statement and payment of license fees shall be provided no later than
30 days after the end of the relevant calendar quarter.
(d) ACCESS will keep complete books of account containing all
particulars that may be necessary to determine the amounts payable to AWARE
hereunder. Such books and supporting data shall be open for inspection for one
year following the calendar year to which they pertain, at reasonable times and
upon reasonable notice, by an independent auditor for purposes of verifying the
statements delivered pursuant to subsection (c) above. AWARE will not conduct
more than one such inspection for books and supporting data relating to any
single calendar year. The results of any inspection shall be made available to
ACCESS. If the agreed results of an inspection show an underpayment or
overpayment, then ACCESS shall pay to AWARE the amount of any underpayment and
AWARE shall pay to ACCESS the amount of any overpayment. If the agreed results
of such inspection show that ACCESS has underpaid AWARE by [*THE CONFIDENTIAL
PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.] or more, then ACCESS shall pay to AWARE the reasonable and
documented out of pocket costs of conducting such inspection, and allow
inspection of the books and supporting data
CONFIDENTIAL TREATMENT
-3-
<PAGE>
for the prior two years. AWARE shall otherwise bear the costs it incurs in
performing any inspection.
1.04. Support of Compression Software. (a) AWARE warrants to ACCESS that
-------------------------------
the Compression Software will perform substantially in accordance with the
specifications included in Schedule I. AWARE will use its best efforts to ensure
such performance and, if necessary, to supply ACCESS with a corrected version of
the Compression Software as soon as practical after AWARE is notified of any
non-conformity. AWARE will provide maintenance releases, scheduled and
reasonable improvements in functionality, bug fixes and work-arounds at no
charge. This warranty will not apply to copies of Compression Software lost or
damaged through no fault of AWARE. AWARE will provide technical training to a
limited number of technically qualified ACCESS personnel without charge. ACCESS
and AWARE shall mutually agree upon a reasonable schedule for training of ACCESS
personnel.
(b) As between ACCESS and AWARE, ACCESS shall be solely responsible for
installation of Compression Software at end user sites, integration of
Compression Software into devices sold or otherwise provided by ACCESS, and
support of ACCESS customers. The warranty and support obligations of AWARE under
subsection (a) above shall be limited to support and service provided directly
to ACCESS as contemplated by subsection (a).
II. EXCLUSIVITY
2.01 Exclusivity Commitments. (a) The rights of ACCESS to use and
-----------------------
sublicense software developed, owned or licensed by AWARE for Medical Use shall
be exclusive to the extent set forth herein. From the Effective Date until the
termination of exclusivity as provided herein, AWARE will not (except as
expressly permitted by this Agreement) supply for Medical Use or permit any
person to use for Medical Use (i) the Compression Software or any modification
or improvement of the Compression Software, (ii) any other software developed,
owned or licensed by AWARE that implements lossy compression of images, or (iii)
any other software developed, owned or licensed by AWARE that provides
functionality similar to the Joint Product contemplated by Article III. AWARE
will take reasonable steps to assure compliance with this exclusivity commitment
by third parties to whom AWARE provides software. Notwithstanding anything
contained in this Agreement, AWARE may provide its ADSL, SDSL, HFC and any other
general data communication product (not including lossy compression) to third
parties for Medical Use or any other purpose.
CONFIDENTIAL TREATMENT
-4-
<PAGE>
(b) From the Effective Date until the termination of exclusivity as
provided herein, AWARE will be the exclusive supplier to ACCESS of compression
and web based viewing software for use in ACCESS's current product line
(together with upgrades and new versions thereof) and the Joint Product
contemplated by Article III, and ACCESS will not purchase or license from any
other party compression software or web based viewing software for ACCESS's
current product line (together with upgrades and new versions thereof) or the
Joint Product contemplated by Article III.
2.02. Exceptions. (a) Licenses of Compression Software for Medical Use
----------
which have been previously granted and for which all license fees have been
invoiced as of the date of this Agreement shall continue in effect
notwithstanding Section 2.01.
(b) Notwithstanding Section 2.01, AWARE may grant licenses for Medical Use
of the current release of the Compression Software as described in Schedule I,
and may permit such customers to include copies of the Excepted Release in
equipment made available to end users.
AWARE shall not permit any customer to modify the Excepted Release (or any other
version of the Compression Software) for Medical Use and shall not make the
source code of the Excepted Release (or any other version of the Compression
Software) available to any third party.
(c) AWARE may provide support for Compression Software that is permitted to
be licensed for Medical Use to the limited extent set forth in this subsection
(c). This support may be provided only to customers to whom licensing of
Compression Software for Medical Use is permitted by this Section 2.02. AWARE
may provide corrections of reported defects in the operation of the Excepted
Release with any versions of Netscape Navigator, Microsoft Internet Explorer,
MAC OS System 7, Windows 95 and Windows NT that are current as of the date of
this Agreement or are released within 18 months after the date of this
Agreement. AWARE will not modify the Excepted Release for the purpose of
enabling it to operate with any version of such browsers or operating systems
released later than 18 months after the date of this Agreement. As used in this
subsection (c), "defect" means a condition that causes run time errors or
incorrect results. ACCESS and AWARE may mutually agree to permit a greater level
of support for certain customers on a case by case basis, taking into account
the willingness of the customer involved to purchase products of the development
efforts contemplated by the Agreement, the level of resources required, and the
nature and business activities of the customer requesting support. Except as
expressly agreed in advance by ACCESS, AWARE will not make upgrades of the
Excepted
CONFIDENTIAL TREATMENT
-5-
<PAGE>
Release available for Medical Use to anyone other than ACCESS and its
sublicensees.
2.03. Transition. Promptly after the date of this Agreement, AWARE will
----------
publicly announce that it has entered into an exclusive relationship with ACCESS
and that ACCESS and AWARE are making a transition to the products contemplated
by the development provisions of this Agreement. This announcement will be
subject to review by ACCESS before its release.
III. DEVELOPMENT AND MARKETING OF NEW PRODUCTS
3.01. Development Project. (a) Promptly upon execution of this Agreement,
-------------------
AWARE and ACCESS will commence the joint development of a client/server product
that provides for wide-spread distribution and web based viewing of compressed
medical images, having substantially the functionality described in Schedule II.
Each of AWARE and ACCESS will use their best efforts to fulfill their respective
development responsibilities set forth in Schedule II on the timetable set forth
in Schedule II. Best efforts will include (without limitation) maintaining
staffing available for the development project consistent with the
responsibilities and timetable set forth in Schedule II. It is understood that
Schedule II is a planning document that is subject to change as development work
proceeds. AWARE and ACCESS will cooperate and consult in the development effort
and share information as necessary and appropriate for timely completion of the
development project. ACCESS will have final authority and responsibility for
decisions concerning design, specifications and development of the Joint
Product. The products, toolkits, concepts, inventions and applications arising
out of the development work conducted by ACCESS and AWARE under this Agreement,
including all software developed or contributed by either party, are
collectively referred to as the "Joint Product". Each party will bear expenses
it incurs in development of the Joint Product.
(b) AWARE and ACCESS shall each have access to the source code of software
under development or included in the Joint Product. The fact that either AWARE
or ACCESS has provided access to source code shall in no way affect proprietary
rights to source code or software, and all source code shall continue to be
owned by the party that owned it prior to disclosure. All source code is
"Confidential Information" as that term is used in Section 5.06 and shall be
subject to the restrictions set forth in Section 5.06. ACCESS will maintain
source code revision control procedures with which both AWARE and ACCESS will
comply. These procedures will be designed to achieve, among other things,
CONFIDENTIAL TREATMENT
-6-
<PAGE>
compliance with "Good Manufacturing Practices" as defined by the U.S. Food and
Drug Administration and documentation of the ownership of source code disclosed
by either party.
3.02. Marketing; Licenses. ACCESS shall have following rights with respect
-------------------
to the Joint Product under any patent, copyright, trade secret or other
proprietary right of AWARE, whether presently held or hereafter acquired, which
AWARE hereby grants to ACCESS. The rights granted to ACCESS shall be exclusive
to the extent set forth in Article II.
(a) The right to use the Joint Product for internal purposes and in
support of users of ACCESS products for Medical Use, and to use and make
available the Joint Product as part of ACCESS's product line and for
integration with other components of ACCESS products.
(b) The right to make and have made, use and have used, and sell,
lease or otherwise transfer the Joint Product, and to grant sublicenses of
the software and other intellectual property included in the Joint Product,
to users of ACCESS products for Medical Use in which such software is
included. Users to whom sublicenses are granted may include original
equipment manufacturers or other parties which utilize toolkits to create
derivative products for Medical Use which will in turn be licensed to end
users. Sublicenses of software will be granted in compliance with the
procedures set forth in Section 5.01.
(c) The right to modify the Joint Product and the software included
in it to create new releases and new products for Medical Use, to make and
have made, use and have used, and sell, lease or otherwise transfer
products including modifications for Medical Use, and to grant sublicenses
of software as modified to users of ACCESS products in which such software
is included, in all cases for Medical Use. Users to whom sublicenses are
granted may include original equipment manufacturers or other parties which
utilize toolkits to create derivative products for Medical Use which will
in turn be licensed to end users. Sublicenses of software will be granted
in compliance with the procedures set forth in Section 5.01.
3.03. Royalties. (a) In consideration of AWARE's contributions to the Joint
---------
Product, ACCESS will pay royalties to AWARE as determined pursuant to this
Section 3.03. Royalties payable to AWARE will be calculated as a percentage (the
"Royalty Percentage") of Net Software License Revenue. "Net Software License
Revenue" means amounts paid to ACCESS by customers for the Joint Product
(excluding taxes, shipping, insurance, the
CONFIDENTIAL TREATMENT
-7-
<PAGE>
interest portion of payments under rental or leasing arrangements, actual
customer returns, customs duties, and any charges for services), reduced by (x)
costs of software that is obtained from third parties (other than AWARE) in bona
fide arms length negotiations and that ACCESS has determined in its judgment is
reasonably appropriate for inclusion in the Joint Product, (y) [*THE
CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.] of the costs of High End Storage and Network Hardware
and (z) [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.] of the costs of all other hardware.
"High End Storage and Network Hardware" is defined in Schedule II.
(b) The Royalty Percentage shall be a percentage of not less than [*THE
CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.] nor more than [*THE CONFIDENTIAL PORTION HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] which
shall reflect the contribution of AWARE to the development of the Joint Product,
and in particular the server software. Promptly upon completion of the
functional product descriptions and design specifications for the Joint Product,
AWARE and ACCESS will negotiate in good faith to reach agreement on the Royalty
Percentage.
(c) Promptly after the end of each calendar quarter after commencement of
marketing of the Joint Product, ACCESS will deliver to AWARE a statement setting
forth in reasonable detail the calculation of Net Software License Revenue and
royalties due. Each quarterly statement shall be accompanied by payment of
license fees due. ACCESS will use its best efforts to provide such statement
within 10 days of the end of each calendar quarter. Each quarterly statement and
payment of license fees shall be provided no later than 30 days after the end of
the relevant calendar quarter.
(d) ACCESS will pay to AWARE, in addition to the royalties described in
subsection (a) above, a [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] of Net Software License
Revenue [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.] ACCESS will cooperate with AWARE in
marketing efforts and keep AWARE informed of market developments in general and
ACCESS marketing programs in particular.
(e) No royalties shall be payable under this Section 3.03 for beta
testing installations, demonstration or loaner units. The duration of beta
testing will be limited to a period of time
CONFIDENTIAL TREATMENT
-8-
<PAGE>
no longer than that which is determined by ACCESS to be reasonably necessary for
satisfaction of the requirements for commercial marketing of the product or
release being tested. Loaner units will be provided for a period of time no
longer than that which is reasonably necessary for the customer to assess the
functionality and desirability of the product or release being loaned. ACCESS
will not make the Joint Product available without charge except for the purposes
described in the preceding sentence and will not make the Joint Product
available without charge to assist in selling other products or in generating
revenues from other sources. ACCESS and AWARE will negotiate a reduced royalty
rate for users who migrate to the Joint Product after having previously
purchased ACCESS products including the Compression Software.
3.04. Support. AWARE will have responsibilities for support of software
-------
developed by AWARE and included in the Joint Product that are substantially
similar to AWARE's responsibilities for support of Compression Software pursuant
to Section 1.04. AWARE and ACCESS intend that ACCESS will pay support fees to
AWARE that represent a percentage equal to the Royalty Percentage of the
aggregate maintenance revenues received by ACCESS with respect to the Joint
Product. AWARE and ACCESS will negotiate in good faith to reach agreement on
calculation of support fees payable to AWARE at the same time that they
negotiate the Royalty Percentage.
3.05. Marketing for Non-Medical Use. AWARE shall have the right to market
-----------------------------
software and other components included in the Joint Product under any patent,
copyright, trade secret or other proprietary right of ACCESS, whether presently
held or hereafter acquired, for all uses other than medical uses. AWARE shall
have the following rights with respect to the Joint Product, which ACCESS hereby
grants to AWARE.
(a) The right to use the Joint Product for internal purposes and in
support of users of AWARE products, and to use and make available the Joint
Product as part of AWARE's product line and for integration with other
components of AWARE products, in all cases for uses other than Medical
Uses. ACCESS agrees that "Medical Uses" for purposes of this Section 3.05
does not include use by indemnity insurance companies and that AWARE may
grant licenses to such companies; provided that no such license may permit
the use of the Joint Product by a business unit of any such company that
competes directly with ACCESS.
CONFIDENTIAL TREATMENT
-9-
<PAGE>
(b) The right to make and have made, use and have used, and sell,
lease or otherwise transfer the Joint Product, and to grant sublicenses of
the software and other intellectual property included in the Joint Product
to users of AWARE products in which such software is included, in all cases
for uses other than Medical Uses. Users to whom sublicenses are granted may
include original equipment manufacturers or other parties which utilize
toolkits to create derivative products for any use other than Medical Uses
which will in turn be licensed to end users. Sublicenses of software will
be granted in compliance with the procedures set forth in Section 5.01.
(c) The right to modify the Joint Product and the software included in
it to create new releases and new products, to make and have made, use and
have used, and sell, lease or otherwise transfer products including
modifications, and to grant sublicenses of software as modified to users of
AWARE products in which such software is included, in all cases for uses
other than Medical Uses. Users to whom sublicenses are granted may include
original equipment manufacturers or other parties which utilize toolkits to
create derivative products for any use other than Medical Uses which will
in turn be licensed to end users. Sublicenses of software will be granted
in compliance with the procedures set forth in Section 5.01.
AWARE shall pay royalties to ACCESS for licenses granted under this Section 3.05
in amounts to be agreed between ACCESS and AWARE. Except as agreed in writing
with ACCESS, AWARE will not make the Joint Product available without
charge.
IV. TERM OF RIGHTS AND OBLIGATIONS
4.01. Term of Exclusivity. (a) The exclusivity provisions of Article II and
-------------------
the other obligations of the parties under this Agreement shall remain in effect
unless and until terminated in accordance with this Article IV.
(b) Subject to subsection (d) below, the exclusivity obligations of AWARE
and ACCESS will terminate on December 31, 1998 if AWARE has not received, on or
before that date, aggregate payments from ACCESS of at least [*THE CONFIDENTIAL
PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.] At least [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] of such amount must
CONFIDENTIAL TREATMENT
-10-
<PAGE>
consist of royalties and fees for the Joint Product, license fees for
Compression Software, or software maintenance revenues. The Prepayment will not
be counted towards this [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] minimum.
(c) Subject to subsection (d) below, the exclusivity obligations of AWARE
and ACCESS will terminate on December 31 of any year after 1998 if AWARE has not
received aggregate payments from ACCESS of at least [*THE CONFIDENTIAL PORTION
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.] during the year ended on that date. This entire amount must consist
of royalties and fees for the Joint Product, license fees for Compression
Software in excess of the portion of the Prepayment applied thereto, or software
maintenance revenues.
(d) The dates set forth in subsections (b) and (c) above shall be extended
for a number of months (not exceeding twelve months) equal to the number of
whole months elapsed between December 31, 1997 and the date of a commercial
release of version 1.0 of the Joint Product that has been produced in compliance
with "good manufacturing practices" as defined by the U.S. Food and Drug
Administration (the "FDA"), and has received clearance for commercial marketing
for medical use from the FDA. This extension shall be effective if and only if
ACCESS shall have pursued clearance by the FDA and performance of ACCESS's
development responsibilities diligently and in good faith.
4.02. Effect of Termination of Exclusivity or Expiration of Initial Term.
------------------------------------------------------------------
(a) If the exclusivity obligations of AWARE and ACCESS shall terminate pursuant
to Section 4.01, AWARE and ACCESS will discuss in good faith whether an
extension of exclusivity or other modifications to this Agreement may be
appropriate. Unless otherwise agreed in writing, upon termination of exclusivity
pursuant to Section 4.01, the licenses granted in Sections 1.01, 3.02 and 3.05
shall remain in effect until five years from the date of termination of
exclusivity, except that (i) the licenses granted to ACCESS shall be modified so
that they shall no longer be exclusive, and (ii) the license granted to AWARE
shall be modified so that it shall no longer be limited to non-Medical Uses. If
development of the Joint Product has not been completed at the time of
termination of exclusivity pursuant to Section 4.01, then rights under such
licenses shall apply to such portions of the Joint Product as shall be in
existence on the
CONFIDENTIAL TREATMENT
-11-
<PAGE>
date of termination (including any applications that are incomplete).
(b) AWARE and ACCESS agree that the royalties and license fees payable
under this Agreement shall be modified effective upon modification of the
licenses granted hereunder pursuant to subsection (a) above. AWARE and ACCESS
further agree that the appropriate amount of such modified royalties and license
fees cannot be determined as of the date of this Agreement. AWARE and ACCESS
shall negotiate in good faith for at least three months after effectiveness of
license modifications pursuant to subsection (a) to reach agreement on modified
license fees and royalties. If, at any time after the end of such three month
period, either party shall determine in its judgment that negotiations are
unlikely to result in an acceptable outcome, such party may initiate arbitration
to determine modified fees and royalties pursuant to the procedures specified in
Section 6.02.
4.03. Termination for Breach. (a) If ACCESS shall materially breach its
----------------------
obligations under this Agreement, and such material breach shall be continuing
for at least 60 days after delivery of a notice by AWARE describing such breach,
then AWARE may by a separate notice terminate this Agreement for breach under
this Section 4.03(a).
(b) If AWARE shall materially breach its obligations under this Agreement,
and such material breach shall be continuing for at least 60 days after delivery
of a notice by ACCESS describing such breach, then ACCESS may by a separate
notice terminate this Agreement for breach under this Section 4.03(b).
(c) With respect to the obligations of AWARE and ACCESS to participate in
development of the Joint Product pursuant to Section 3.01(a), "material breach"
means willful failure of a party to devote best efforts to the development
project or to allocate sufficient resources to perform such party's
responsibilities.
(d) Termination for breach under this Section 4.03 shall not be an
exclusive remedy, but shall be in addition to any other remedies that either
party may have.
4.04. Effect of Termination for Breach. (a) If AWARE shall terminate this
--------------------------------
agreement for breach pursuant to Section 4.03, then (i) the licenses granted to
ACCESS pursuant to Sections 1.01 and 3.02 shall immediately terminate and ACCESS
shall cease using or marketing the Compression Software and the Joint Product
and (ii) the license granted to AWARE pursuant to Section 3.05 shall remain in
effect.
CONFIDENTIAL TREATMENT
-12-
<PAGE>
(b) If ACCESS shall terminate this agreement for breach pursuant to Section
4.04, then (i) the license granted to AWARE pursuant to Section 3.05 shall
immediately terminate, and AWARE shall cease using or marketing the Joint
Product (ii) the licenses granted to ACCESS pursuant to Sections 1.01 and 3.02
shall remain in effect and (iii) the exclusivity obligations of ACCESS under
Article II shall immediately terminate.
(c) If development of the Joint Product has not been completed at the
time of termination for breach pursuant to Section 4.03, then rights under
continuing licenses shall apply to such portions of the Joint Product as shall
be in existence on the date of termination (including any applications that are
incomplete).
(d) For so long as the license granted under Section 1.01 continues in
effect, ACCESS shall pay royalties as provided in Section 1.03. To the extent
that licenses of the Joint Product under Sections 3.02 and 3.05 remain in
effect, royalties payable with respect to the Joint Product will be determined
by agreement between the parties or, failing such agreement, by arbitration
under Section 6.02.
4.06. Additional Surviving Terms. All payment obligations accrued
--------------------------
prior to any termination shall survive such termination. All sublicenses granted
to any end user by either party in accordance with this Agreement prior to any
termination of this Agreement shall survive such termination. Either party which
holds a continuing license under this Agreement shall also continue to have the
rights set forth in Sections 1.02, 1.04. 3.01(b) and 3.04 with respect to such
license. The provisions of Sections 5.02, 5.03, 5.06, 6.02, 6.04, 6.05 and 6.14
shall survive any termination of this Agreement.
V. INTELLECTUAL PROPERTY
5.01. Software Licensing Procedures. (a) The procedures set forth in
-----------------------------
this Section 5.01 shall govern the granting of sublicenses of software to users
under this Agreement. In this Section 5.01, the party granting a sublicense to a
user is referred to as the "Licensor".
(b) Each of AWARE and ACCESS shall assign a unique number to each copy made
by it of software comprising the Joint Product or any other software developed
or provided by the other party, whether for internal use or for sublicense to a
user. Each of AWARE and ACCESS shall keep full, clear and accurate records of
CONFIDENTIAL TREATMENT
-13-
<PAGE>
all copies that it makes of any such software and the identity and location of
each third party user to whom any such software is provided. Each of ACCESS and
AWARE may examine records of the other party not more than once in any calendar
quarter, during normal business hours and upon reasonable notice.
(c) Upon granting a sublicense of software comprising the Joint Product or
any other software developed or provided by the other party, the Licensor shall
require that the user execute an agreement including the software licensing
terms set forth below. Such agreement may be between the user and the Licensor,
or between the user and a reseller or other intermediary authorized by the
Licensor.
(i) a provision restricting the sublicensee's use of the licensed
software to its own business and professional purposes, provided that any
sublicensee of a toolkit may use it to create new applications to be
licensed to end users as part of the sublicensee's product;
(ii) a provision requiring the sublicensee to take all reasonable
precautions to keep the licensed software and any related documentation
confidential;
(iii) a provision prohibiting the sublicensee from reproducing
(except for backup copies), reverse engineering, translating or creating
other versions of the licensed software, provided that any sublicensee of a
toolkit may use it to create new applications to be licensed to end users
as part of the sublicensee's product;
(iv) a provision acknowledging that ownership of the licensed
software remains exclusively with the Licensor or its suppliers; and
(v) a provision limiting the other party's liability to the
sublicensee to at least the same extent that the liability of the Licensor
to the sublicensee is limited, and disclaiming warranties on behalf of the
other party at least to the extent disclaimed on behalf of the Licensor.
Each party will use reasonable efforts to enforce license agreements executed by
its customers. AWARE agrees that any license of Compression Software granted by
ACCESS prior to the Effective Date need not be altered if it complied with the
requirements of the Old Agreement.
(d) Notwithstanding this Section 5.01 or any other provision of this
Agreement, software may be licensed to the Government of the United States of
America, or an agency or instrumentality
CONFIDENTIAL TREATMENT
-14-
<PAGE>
thereof, under an agreement containing software licensing terms generally used
by the United States Government (or the agency or instrumentality to which the
software is licensed) for procurement of commercial software.
5.02. Ownership. (a) As between ACCESS and AWARE, AWARE owns and shall
---------
continue to own the Compression Software (including without limitation AWARE's
AccuRad product) and any other software developed solely by AWARE or by any
employee, consultant or other person acting on AWARE's behalf under this
Agreement, including any inventions, concepts, specifications, know-how and
ideas embodied in such software, together with all proprietary rights therein
("AWARE Intellectual Property"). As between ACCESS and AWARE, ACCESS owns and
shall continue to own the concepts, specifications, know-how, and ideas embodied
in the design and functionality of the Joint Product, and as applied in the
Joint Product for Medical Use, and any software developed solely by ACCESS or
by any employee, consultant or other person acting on ACCESS's behalf under this
Agreement, including any inventions, concepts, specifications, know-how and
ideas embodied in any of the foregoing, together with all proprietary rights
therein ("ACCESS Intellectual Property"). As between ACCESS and AWARE, the
parties shall jointly own any software or other intellectual property jointly
developed by the parties under this Agreement and not allocated between them
above, including any inventions, concepts, specifications, know-how and ideas
embodied therein, together with all proprietary rights therein ("Joint
Intellectual Property"). Whether or not any intellectual property is jointly
developed shall be determined in accordance with the United States patent laws.
(b) AWARE shall have the right to file and prosecute patent or copyright
applications on AWARE Intellectual Property and ACCESS shall have the right to
file and prosecute patent or copyright applications on ACCESS Intellectual
Property. The parties will cooperate in the filing and prosecution of patent or
copyright applications on Joint Intellectual Property, provided that neither
party shall file any such patent or copyright application without the prior
written consent of the other. Each party will cooperate with the other party in
the filing and prosecution by the other party of any patent or copyright
application that complies with this subsection (b), including by executing and
delivering or causing its officers and employees to execute and deliver (all at
the expense of the filing party) any documentation reasonably necessary or
appropriate for the filing and prosecution of such an application and the
vesting of rights as provided in this Agreement.
(c) The exclusivity obligations of the parties under Article II shall not
in any way be affected by the ownership of AWARE
CONFIDENTIAL TREATMENT
-15-
<PAGE>
Intellectual Property, ACCESS Intellectual Property, or Joint Intellectual
Property as provided in this Section 5.02, or by the filing of any patent or
copyright application or the grant or issuance of any patent or copyright.
Neither party shall market, sell, license or distribute any Joint Intellectual
Property except to the extent that such Joint Intellectual Property is covered
by a license granted to such party hereunder.
5.03. Trademarks. (a) The terms specified in Schedule 5.03 to this
----------
Agreement are trademarks or tradenames owned by AWARE and may not be used
without specific written permission. Nothing herein shall confer upon ACCESS any
proprietary interest in the trademarks or tradenames, except the right to use
the same in accordance with the terms hereof. All use of such marks or names,
and the goodwill associated therewith, shall inure to the benefit of AWARE.
ACCESS agrees not to, at any time during the term of this Agreement or
thereafter, directly or indirectly (i) dispute or contest the validity or
enforceability of AWARE's trademarks or tradenames, or (ii) take any action that
would dilute the value of the goodwill attaching to the trademarks or
tradenames.
(b) ACCESS shall exclusively own the trademarks or trade names under which
the Joint Product is sold for Medical Use or otherwise provided by ACCESS, and
may file and prosecute trademark applications on such trademarks and tradenames.
AWARE agrees not to, at any time during the term of this Agreement or
thereafter, directly or indirectly dispute or contest the validity or
enforceability of such trademarks or tradenames.
5.04. Representations. (a) AWARE represents to ACCESS that:
----------------
(i) AWARE has full authority to enter into this Agreement and grant
the licenses and rights set forth herein.
(ii) To the best of AWARE's knowledge, the documentation and code of
the Compression Software have not been published under circumstances which
have caused loss of proprietary rights therein, and to the best of AWARE's
knowledge, the documentation and code of the Compression Software do not
infringe upon any patent, copyright or other proprietary right of any third
party.
(iii) AWARE is not aware of any claim of infringement of any patent,
copyright or other proprietary right having been made or pending against
AWARE relative to the documentation or code of the Compression Software.
(b) ACCESS represents to AWARE that:
CONFIDENTIAL TREATMENT
-16-
<PAGE>
(i) ACCESS has full authority to enter into this Agreement and
grant the licenses and rights set forth herein.
(ii) To the best of ACCESS's knowledge, the specifications and
functionality of the Joint Product, as set forth in Schedule II, do not
infringe upon any patent, copyright or other proprietary right of any third
party.
5.05. Indemnities. (a) AWARE will, at its expense, defend against, hold
-----------
ACCESS harmless from, and pay any final judgment against ACCESS or any customer
of ACCESS arising (x) out of any claim that AWARE Intellectual Property
infringed a copyright, a patent or a trade secret or (y) out of marketing by
AWARE of AWARE products (including any product liability claim unless such
product liability claim is caused by designs, specifications or software
provided by ACCESS); provided that (i) ACCESS notifies AWARE in writing of such
claim or action, and (ii) AWARE has sole control of the defense and settlement
of such claim or action. In defending against such claim or action to the extent
it relates to software provided by AWARE, AWARE may, at its option, agree to any
settlement in which AWARE shall either (1) procure for ACCESS and all customers
of ACCESS the right to continue using the software at issue; or (2) modify or
replace such software so that it no longer infringes, to the extent that the
exercise of such option does not result in a material adverse change in the
operational characteristics of such software, and equivalent functions and
performance provided by AWARE remain following implementation of such option. If
AWARE concludes in its judgment that none of the foregoing options is
reasonable, AWARE may remove the software at issue and any other component
supplied by AWARE rendered unusable as a result of such removal and pay to
ACCESS damages arising therefrom, including damages incurred by reason of
ACCESS's inability to perform its obligations under sublicenses; provided that
AWARE's liability for damages arising from such inability shall be [*THE
CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.]
(b) ACCESS will, at its expense, defend against, hold ACCESS harmless from,
and pay any final judgment against AWARE or any customer of AWARE arising out of
(x) any claim that ACCESS Intellectual Property infringed a copyright, a patent
or a trade secret or (y) out of marketing by ACCESS of ACCESS products
(including any product liability claim unless such product liability claim is
caused by designs, specifications or software provided by AWARE) provided that
(i) AWARE notifies ACCESS in writing of such claim or action, and (ii) ACCESS
has sole control of the defense and settlement of such claim or action. In
CONFIDENTIAL TREATMENT
-17-
<PAGE>
defending against such claim or action to the extent it relates to software
provided by ACCESS, ACCESS may, at its option, agree to any settlement in which
ACCESS shall either (1) procure for AWARE and all customers of AWARE the right
to continue using the software at issue; or (2) modify or replace such software
so that it no longer infringes, to the extent that the exercise of such option
does not result in a material adverse change in the operational characteristics
of such software, and equivalent functions and performance provided by ACCESS
remain following implementation of such option. If ACCESS concludes in its
judgment that none of the foregoing options is reasonable, ACCESS may remove the
software at issue and any other component supplied by ACCESS rendered unusable
as a result of such removal and pay to AWARE damages arising therefrom,
including damages incurred by reason of AWARE's inability to perform its
obligations under sublicenses; provided that ACCESS's liability for damages
arising from such inability shall be [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
(c) If ACCESS shall determine in its judgment that the concepts,
specifications, know-how, and ideas embodied in the design and functionality of
the Joint Product infringe or conflict with a patent, copyright, trade secret or
other proprietary right not known to ACCESS on the date of this Agreement, then
ACCESS shall notify AWARE and the parties will discuss in good faith whether the
Joint Product can be modified or other steps may be taken to avoid such
infringement. If ACCESS determines in its judgment that no such modification or
other steps can be reasonably implemented, ACCESS may by notice terminate the
obligations of AWARE and ACCESS under this Agreement with respect to the Joint
Product, and the indemnity of ACCESS in subsection (b) above shall apply only to
those claims relating to the Joint Product of which AWARE or ACCESS had notice
prior to the date of the first notice regarding infringement delivered by
ACCESS.
5.06. Confidentiality. As used in this Agreement, "Confidential
---------------
Information" means (i) all confidential information, proprietary software, trade
secrets, know-how, and all other intellectual property that is subject to the
licenses granted in this Agreement and in which proprietary rights would be
adversely affected by disclosure and (ii) all other confidential or proprietary
information (including without limitation financial information and business
information such as customer lists) that is or has been disclosed by AWARE to
ACCESS or by ACCESS to AWARE. AWARE and ACCESS agree that they will not, and
will not permit their respective officers, employees, agents and representatives
to, without first obtaining the written consent of the other party, use, sell or
disclose any
CONFIDENTIAL TREATMENT
-18-
<PAGE>
Confidential Information, except as expressly contemplated hereby and except
that Confidential Information may be disclosed by the party that owns it unless
such disclosure would adversely affect the proprietary nature of Confidential
Information subject to any of the licenses granted hereunder. Either party may
disclose Confidential Information to potential customers, and to other third
parties to the extent necessary to permit any such third party to assist in
manufacture or integration of the Joint Product, provided that any such
potential customer or third party to whom Confidential Information is disclosed
shall execute a confidentiality agreement no less restrictive than this Section
5.06. "Confidential Information" does not include (i) information that is or
becomes (other than by disclosure in violation of this Agreement) generally
available to the public, (ii) information that the receiving party can show was
known to the receiving party prior to its disclosure by the other party, or
(iii) information required to be disclosed by law or regulation or by judicial
process or administrative order, provided that prompt notice and an opportunity
to seek a protective order is given to the other party prior to disclosure.
AWARE and ACCESS agree that this Agreement and the Schedules thereto are
Confidential Information subject to this Section 5.06.
VI. GENERAL.
6.01. Regulatory Matters. ACCESS shall make and prosecute all filings and
------------------
take such other actions as ACCESS shall consider appropriate to obtain clearance
for commercial marketing of the Joint Products from the FDA and such other
authorities as may be appropriate for marketing of the Joint Product. AWARE will
cooperate with ACCESS in providing information and assistance with respect to
such filings and other actions and may review and comment on filings made by
ACCESS. AWARE shall take such actions to comply with regulatory requirements
(including without limitation "good manufacturing practices" as defined by the
FDA, and standards and procedures specified in filings made with the FDA) as
ACCESS shall reasonably request, including without limitation use of identified
development, design and specification methodologies.
6.02. Arbitration. Any controversy or claim arising out of or relating to
-----------
this Agreement, or the breach thereof, shall be settled by arbitration
administered by the American Arbitration Association in Boston, Massachusetts
under its Commercial Arbitration Rules, and judgment on the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof.
Arbitration as specified in this Section 6.02 shall be the sole and exclusive
procedure for the resolution of disputes
CONFIDENTIAL TREATMENT
-19-
<PAGE>
between the parties arising out of or relating to this Agreement or the breach
thereof; provided, however, that a party, without prejudice to such procedure,
may file a complaint to seek a preliminary injunction or other provisional
judicial relief, if in its judgment such action is necessary to avoid
irreparable damage or preserve the status quo. Despite such action the parties
will continue to participate in good faith in the procedures specified in this
Section 6.02. AWARE and ACCESS agree that any breach of Sections 2.01, 2.02,
4.04, 5.01, 5.03 or 5.06 would cause irreparable harm and that the aggrieved
party shall be entitled to equitable relief in the nature of an injunction for
any such breach, without posting of a bond or other surety.
6.03. Public Announcements. AWARE and ACCESS will cooperate in all public
--------------------
disclosure concerning this agreement, and neither party shall make any such
disclosure without the approval of the other. Approval of disclosure required by
law or regulation shall not be unreasonably withheld; provided that it may be a
condition of such approval that the party making such disclosure seek
confidential treatment.
6.04. Limitation of Warranties. THE OBLIGATIONS OF AWARE AND ACCESS
------------------------
EXPRESSLY STATED IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES OR
CONDITIONS EXPRESS OR IMPLIED. TO THE EXTENT ALLOWABLE TO BY LAW, THIS EXCLUSION
OF ALL OTHER WARRANTIES AND CONDITIONS EXTENDS TO IMPLIED WARRANTIES OR
CONDITIONS OF MERCHANTABLE QUALITY AND FITNESS FOR A PARTICULAR PURPOSE, AND
THOSE ARISING BY STATUTE OR OTHERWISE IN LAW, OR FROM A COURSE OF DEALING OR
USAGE OF TRADE.
6.05. Limitation of Liability. ACCESS AND AWARE AGREE THAT, EXCEPT AS
-----------------------
EXPRESSLY STATED OTHERWISE IN THIS AGREEMENT, THE LIABILITY OF EITHER OF THEM TO
THE OTHER, IF ANY, UNDER ANY THEORY OF LAW OR EQUITY, ARISING OUT OF, OR IN ANY
WAY RELATED TO THIS AGREEMENT OR THE FULFILLMENT OF ANY OF THE OBLIGATIONS OF
EITHER OF THEM UNDER THIS AGREEMENT, IS LIMITED TO MONEY DAMAGES NOT TO EXCEED
THE TOTAL AMOUNT PAID OR PAYABLE BY ACCESS TO AWARE OR BY AWARE TO ACCESS (AS
THE CASE MAY BE) UNDER THIS AGREEMENT.
6.06. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the Commonwealth of Massachusetts.
6.07. Assignment. (a) Subject to ACCESS's right to grant sublicenses
----------
hereunder, ACCESS may not assign this Agreement or any rights hereunder without
the prior written consent of AWARE, except that, without such consent and upon
notice to AWARE, (i) ACCESS may assign all of its rights hereunder to a
corporation or other legal entity that acquires substantially all of ACCESS's
assets or where ACCESS is consolidated or merged, but then only
CONFIDENTIAL TREATMENT
-20-
<PAGE>
upon the express assumption by such transferee or its successor of the
obligations set forth in this Agreement and (ii) ACCESS may grant security
interests in the rights of ACCESS under this Agreement to secure the obligations
of ACCESS to a bank or other financial institution which has extended credit to
ACCESS.
(b) Subject to AWARE's right to grant sublicenses hereunder, AWARE may not
assign this Agreement or any rights hereunder without the prior written consent
of ACCESS, except that, without such consent and upon notice to ACCESS, (i)
AWARE may assign all of its rights hereunder to a corporation or other legal
entity that acquires substantially all of AWARE's assets or where AWARE is
consolidated or merged, but then only upon the express assumption by such
transferee or its successor of the obligations set forth in this Agreement and
(ii) AWARE may grant security interests in the rights of AWARE under this
Agreement to secure the obligations of AWARE to a bank or other financial
institution which has extended credit to AWARE.
(c) This Agreement is binding upon, and inures to the benefit of, the
successors and permitted assigns of the parties.
6.08. Effect of Waiver. The waiver or failure of either party to exercise
----------------
in any respect any right provided for in this Agreement shall not be deemed a
waiver of any further or future right hereunder.
6.09. Headings. The headings used in this Agreement are for convenience of
--------
reference only and are not to be used in interpreting the provisions of this
Agreement.
6.10. Complete Agreement. This Agreement is the exclusive statement of the
------------------
understanding between the parties with respect to its subject matter. It
supersedes all prior agreements, negotiations, representations and proposals,
written or oral, relating to the subject matter hereof, including without
limitation the Old Agreement. No provisions of this Agreement may be changed or
modified except by an agreement in writing signed by the party to be bound. No
provision of any purchase order or other instrument issued by ACCESS or any
invoice or other form issued by AWARE that is inconsistent with the provisions
of this Agreement shall be binding or affect this Agreement unless signed by
both parties.
6.11. Severability. If any provision of this Agreement is invalid or
------------
unenforceable in any particular case, such case shall not invalidate or render
unenforceable any other part of this Agreement. This Agreement shall be
construed as not containing the particular provision or provisions held to be
invalid or unenforceable to the extent of the particular case, and the
CONFIDENTIAL TREATMENT
-21-
<PAGE>
rights and obligations of the parties hereto shall be construed and enforced
accordingly.
6.12. Effectiveness of Agreement; Counterparts. This Agreement is effective
----------------------------------------
when executed by both parties. This Agreement may be executed in counterparts,
each of which shall constitute one and the same instrument.
6.13. Notices. All notices provided for in this Agreement shall be in
-------
writing or facsimile, addressed to the appropriate party at the respective
address set forth below or to such other then-current address as is specified by
notice, as follows:
(b) to AWARE:
Aware, Inc.
One Oak Park
Bedford, MA 01730
Facsimile: (617) 276-4001
Attention: Edmund Reiter
(c) to ACCESS:
ACCESS Radiology Corporation
313 Speen Street
Natick, MA 01760
Facsimile: (508) 647-9350
Attention: Howard Pinsky
CONFIDENTIAL TREATMENT
-22-
<PAGE>
Notices sent by certified mail, return receipt requested to the address
specified pursuant to this Section 6.13 shall be effective three business days
after deposit in the U.S. Mail with postage prepaid. Notice delivered by any
other means shall be effective upon receipt.
6.14. No Agency. AWARE and ACCESS are independent contractors and separate
---------
legal entities and shall in no way be interpreted as partners, joint venturers,
agents, employees or legal representatives of each other for any purposes.
Neither party shall be responsible for or bound by any act of the other party or
the other party's agents, employees or any persons in any capacity in its
service.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the first date set forth above.
ACCESS RADIOLOGY
CORPORATION AWARE, INC.
By: /s/ Howard Pinsky By: /s/ Edmund C. Reiter
----------------- --------------------
Name: Howard Pinsky Name: Edmund C. Reiter
Title: Vice President of Title: Senior Vice President
Technology
CONFIDENTIAL TREATMENT
-23-
<PAGE>
Schedule 1
1. Existing Accurad Product and Plugin Specifications
--------------------------------------------------
1.a AccuPress for Radiology Version 3.6 for Unix and DOS User's Guide and
Developer's Kit
1.b AWARE AccuRad Plugin User's Guide: Plugin revision history
1.c AWARE AccuRad Plugin User's Guide: Embed Options Reference
1.d AWARE AccuRad Plugin User's Guide: Using the Plugin
2. Agreed to Supported AWARE Customer List
---------------------------------------
[*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.]
CONFIDENTIAL TREATMENT
-24-
<PAGE>
SCHEDULE 2
Summary of Project "Butterfly"
Joint software development resulting in a client/server product that provides
for wide-spread distribution and web-based viewing and editing of compressed
medical images. The Product is intended to be marketable on a world-wide basis
to a broad OEM and direct user base assuming no prior and perhaps no potential
future ACCESS content. The product is intended to draw from the core
competencies from both organizations; wavelet (and other algorithms as
appropriate) compression and web image processing from AWARE, and general
medical market imaging knowledge and Compression Server development from ACCESS.
ACCESS and AWARE plan to derive revenues from software licenses from developed
products according to an agreed schedule to be determined.
BUTTERFLY PRODUCT CONCEPT
The Butterfly product concept is to provide wide-spread image distribution over
both LAN and WAN combining "Web" technology with compression technology. More
specifically, the concept is to develop:
. A browser based client application that provides sufficient capabilities to
allow effective review of both diagnostic and referral quality radiology,
pathology and other types of medical images. It should also provide
interactive multimedia capabilities to allow reporting, synchronous
consultation, and medical record review.
. A server that manages the collection, storage and distribution of
multimedia medical information including images, text, video and audio.
The server should also provide compression capabilities, configurable
workflow tools, and DICOM/HL7/http interfaces.
The Butterfly product focuses not only on image distribution but also on
improving workflow within the environment of use. As such, the product
architecture will embrace component technology e.g. COM, and provide "task
centric" operation at both the client and server.
CONFIDENTIAL TREATMENT
-25-
<PAGE>
ASSIGNMENT OF RESPONSIBILITIES AND WORK
Broad responsibilities will be assigned as follows:
<TABLE>
<CAPTION>
ACCESS ACTIVITIES AWARE ACTIVITIES
<S> <C>
- ---------------------------------------------------------------------------------------------------------
Product Definition Assist in Product Definition
- ---------------------------------------------------------------------------------------------------------
Primary Web Compression Server Application . Primary Client Software Development
Software Development . Sole Provider/Developer of Compression
Software Medical Library
. Primary Web Interface Level (CGI) Server
Software Development
. Secondary Server Application Software
Development
- ---------------------------------------------------------------------------------------------------------
Overall Project Management Internal Project Management
- ---------------------------------------------------------------------------------------------------------
Clinical Site Management
- ---------------------------------------------------------------------------------------------------------
Regulatory Affairs and Filings
- ---------------------------------------------------------------------------------------------------------
Good Manufacturing Practices Compliance with GMP Software Development
Requirements
- ---------------------------------------------------------------------------------------------------------
Medical Direct and OEM Channel Sales & Marketing Cross-License non-Medical Marketing
- ---------------------------------------------------------------------------------------------------------
Ongoing Server Application Software Support Ongoing Client, Server Component, and Compression
Software Support
- ---------------------------------------------------------------------------------------------------------
Installation & Customer Support
- ---------------------------------------------------------------------------------------------------------
Complaint Handling
- ---------------------------------------------------------------------------------------------------------
License & Revenue Accounting Periodic Examination
- ---------------------------------------------------------------------------------------------------------
</TABLE>
CONFIDENTIAL TREATMENT
-26-
<PAGE>
ANTICIPATED TIMETABLES & KEY EVENTS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
TASK RESPONSIBILITY DATE
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Complete Term Sheet ACCESS, AWARE 4/18/98
- ----------------------------------------------------------------------------------------------------------
Complete Contract ACCESS, AWARE 5/28/97
- ----------------------------------------------------------------------------------------------------------
Announce to Market ACCESS, AWARE TBD
- ----------------------------------------------------------------------------------------------------------
Complete Regulatory Review ACCESS 6/21/97
Complete Regulatory 510(k) Filings as Needed ACCESS
- ----------------------------------------------------------------------------------------------------------
Complete Functional Specification ACCESS
Review Functional Specification AWARE
Finalize Functional Specification ACCESS 6/30/97
- ----------------------------------------------------------------------------------------------------------
Complete Product and Software Delivery Plan ACCESS 7/7/97
- ----------------------------------------------------------------------------------------------------------
Sign up Clinical Beta Partners ACCESS 6/30/97
- ----------------------------------------------------------------------------------------------------------
Complete Server Application Design Specification ACCESS
Complete Server CGI Design Specification AWARE
Complete Client Design Specification AWARE
Complete Review of Design Specifications ACCESS & AWARE
Finalize Design Specification ACCESS 8/1/97
- ----------------------------------------------------------------------------------------------------------
Complete Operational Plan including: ACCESS 8/1/97
Strategy and Global market Positioning
Sales & Marketing
Packaging & Pricing
Sales Forecasts
P & L
- ----------------------------------------------------------------------------------------------------------
Complete Test Plans ACCESS & AWARE 8/1/97
- ----------------------------------------------------------------------------------------------------------
Complete Alpha Development & Testing ACCESS & AWARE 11/15/97
- ----------------------------------------------------------------------------------------------------------
Start Beta Testing ACCESS 11/15/97
- ----------------------------------------------------------------------------------------------------------
Receive FDA 510(k) Market Clearance FDA 12/1/97
- ----------------------------------------------------------------------------------------------------------
Implement Installation and Support Staff Ramp-up Plan ACCESS 1/1/98
- ----------------------------------------------------------------------------------------------------------
Product Sales and Marketing Launch ACCESS 12/1/97
- ----------------------------------------------------------------------------------------------------------
Complete First Phase Beta ACCESS 1/1/97
- ----------------------------------------------------------------------------------------------------------
Complete GMA Documentation and Notification of Validation & ACCESS 1/1/98
Testing to FDA
- ----------------------------------------------------------------------------------------------------------
Complete Customer Support Plan ACCESS 1/1/98
- ----------------------------------------------------------------------------------------------------------
Begin US Commercialization ACCESS 1/1/98
- ----------------------------------------------------------------------------------------------------------
Install West Coast and International End-User Partnership ACCESS 1/15/97
Accounts
- ----------------------------------------------------------------------------------------------------------
Support and Release Products Accordingly ACCESS & AWARE On-going
- ----------------------------------------------------------------------------------------------------------
</TABLE>
CONFIDENTIAL TREATMENT
-27-
<PAGE>
SCHEDULE 3: TRADEMARKS
FrameWave is a registered trademark belonging to ACCESS Radiology Corporation.
AccuPress for Radiology is a registered trademark belonging to AWARE, Inc.
CONFIDENTIAL TREATMENT
-28-
<PAGE>
CONFIDENTIAL TREATMENT EXHIBIT 10.23
AMENDED AND RESTATED RESELLER AGREEMENT
This Amended and Restated Reseller Agreement is made as of May 30,
1997, between ISG TECHNOLOGIES, INC., a corporation incorporated under the laws
of the Province of Ontario, Canada (hereinafter called "ISG"), and ACCESS
RADIOLOGY CORPORATION, a corporation incorporated in the State of Delaware
(hereinafter called "ACCESS").
B A C K G R O U N D :
1. ACCESS and ISG are parties to a Reseller Agreement dated May 17,
1996, as amended by a Supplemental Agreement dated as of September 30, 1996, (as
so amended, the "Old Reseller Agreement"), under which ACCESS and ISG have
agreed that ACCESS will resell certain medical devices (including software)
developed by ISG.
2. ACCESS and ISG wish to amend the Old Reseller Agreement in certain
respects.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth the parties agree that the Old Reseller Agreement shall be amended and
restated to read in its entirety as follows:
1. DEFINITIONS.
1.1 In this Agreement, each of the following terms has the meaning set
out below:
1.1.1 "Carryover Amount" has the meaning set forth in
Section 4.2.
1.1.2 "Committed Amount" has the meaning set forth in
Section 4.2.
1.1.3 "FDA" means the United States Food and Drug Administration.
CONFIDENTIAL TREATMENT
-1-
<PAGE>
1.1.4 "Food and Drug Act" means the United States Federal Food,
Drug and Cosmetic Act, 21 U.S.C. et seq., as amended from time to time.
------
1.1.5 "GMA Release" means, with respect to any VRS Application
or VRS Option, compliance with all of the conditions set forth below. The date
of GMA Release for any release of any VRS Application or VRS Option shall be the
first date on which the conditions set forth below are satisfied for such
release.
(i) The VRS Application or VRS Option, when installed on
ISG Devices, shall perform all of the functions described for such software
on Schedule I and shall perform reasonably free from bugs material to such
software's intended use.
(ii) ISG shall have certified such VRS Application or VRS
Option for installation on ISG Devices consisting of at least the types of
systems and related equipment required by Section 5.3 as of the date of GMA
Release.
(iii) ISG Devices on which the VRS Application or VRS
Option is installed shall all have been cleared for commercial marketing by
the FDA.
(iv) All ISG Devices including such VRS Application or VRS
Option that are to be resold as contemplated by this Agreement shall be in
compliance with all relevant filings made by ISG with the FDA and with "good
manufacturing practices" as defined in the Food and Drug Act and the
regulations or other measures promulgated by the FDA thereunder.
(v) ISG shall have notified ACCESS that GMA Release of the
VRS Application or VRS Option has occurred.
1.1.6 "ISG Devices" means medical imaging workstations
consisting of Licensed Works provided by ISG, installed by ACCESS in accordance
with instructions provided by ISG on computer hardware and video monitors in
configurations certified by ISG as contemplated by Section 5.3.
1.1.7 "Licensed Works" means all or any part of the VRS
Applications and the VRS Options.
CONFIDENTIAL TREATMENT
-2-
<PAGE>
1.1.8 "Qualifying Contractor Sale" means a sale of an ISG Device
or Devices made through a prime contractor or systems integrator to an end user
in which (i) [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.] and (ii) ISG Devices shall be a
part of a range of ACCESS products for sale under the arrangements between
ACCESS and the prime contractor, systems integrator or other intermediary.
1.1.9 "Support Period" means, with respect to any ISG Device, a
period of five years from the date of installation of such ISG Device.
1.1.11 "UNIX Termination Date" has the meaning set forth in
Section 5.3(ii).
1.1.10 "Utilization Amount" has the meaning set forth in
Section 4.2.
1.1.11 "VRS Applications" means each of the medical imaging
software applications developed by ISG having the capabilities and service
features described in Schedule I. The features of each VRS Application included
at the base unit price and the VRS Options available for each VRS Application at
additional cost are shown on Schedule I.
1.1.12 "VRS Options" means the options for the VRS Applications
having the capabilities and service features described in Schedule I.
1.1.13 "VRS NT Software" means the VRS Applications and the VRS
Options for use with the Windows NT operating system, as indicated on
Schedule I.
1.1.14 "VRS UNIX Software" means the VRS Applications and the
VRS Options for use with the Sun Solaris operating system, as indicated on
Schedule I.
CONFIDENTIAL TREATMENT
-3-
<PAGE>
2. GRANT OF RIGHTS.
2.1 Effective upon execution of this Agreement and subject to the
conditions set forth below, ISG hereby appoints ACCESS a non-exclusive reseller
of ISG Devices and grants to ACCESS the following non-exclusive rights:
2.1.1 The right to make ISG Devices available to customers,
whether on a monthly fee basis or through outright sales. Such sales may be made
through a prime contractor or systems integrator so long as (i) the end user
shall enter into an agreement containing licensing provisions complying with
Section 3, and (ii) such sales shall be Qualifying Contractor Sales.
2.1.2 The right to include copies of the Licensed Works in ISG
Devices made available by ACCESS to customers and to sublicense Licensed Works
included in such devices in the regular course of business.
2.1.3 The right to use copies of the Licensed Works without
charge for internal purposes of ACCESS, which shall be limited to demonstration
and technical support of customers only.
2.2 ACCESS shall not have any right to distribute the source code of
any of the Licensed Works.
3. CUSTOMER LICENSE AGREEMENTS.
3.1 No customer shall receive any Licensed Works unless such customer
shall have signed an agreement (with ACCESS or with a prime contractor or
systems integrator) containing software licensing provisions complying with
Section 3.2 below.
3.2 Each customer agreement shall set out the name of the customer
and the identity and location of the ISG Devices on which the customer is
licensed to use a copy of the Licensed Works. Such a customer agreement shall
comply with this Section 3.2 if it contains:
(i) in the case of any user, substantially the provisions set
forth in Schedule II (it being understood that ISG need not be
identified by name), or
CONFIDENTIAL TREATMENT
-4-
<PAGE>
(ii) in a case where the end user is the Government of the
United States of America or an agency or instrumentality
thereof, substantially the provisions set forth in Schedule IIA,
or such other licensing terms as such Government, agency or
instrumentality shall then generally prescribe for the procurement
of commercial software.
3.3 ACCESS shall use reasonable efforts to enforce all the licensing
provisions of customer agreements.
4. PAYMENTS.
4.1 ACCESS agrees to pay to ISG the following license fees:
4.1.1 A license fee as set forth in Table 1 of Schedule I for
each copy of the GMA Release version of any VRS Application installed on an ISG
Device made available by ACCESS to a customer in accordance with this Agreement,
except as provided in Section 4.1.2 below.
4.1.2 [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
4.1.3 A license fee as set forth in Table 1 of Schedule I for
each copy of the GMA Release version of each VRS Option installed on an ISG
Device made available by ACCESS to a customer in accordance with this Agreement.
4.1.4 All prices specified in this Section 4.1 are subject to
adjustment as provided in Section 4.2 below.
4.2 ACCESS and ISG agree to the following purchase commitments and
pricing options:
4.2.1. ACCESS agrees, subject to the termination options set forth
below, to pay the Committed Amounts of license fees for each quarter shown in
Schedule I. ACCESS will issue a purchase order at the beginning of each quarter
for the Committed Amount for that quarter. The Committed Amounts shall be
invoiced and paid on the dates set forth in Schedule I. During each quarter,
ACCESS and ISG will record the installation of each copy of the Licensed Works
for which license fees are payable, using
CONFIDENTIAL TREATMENT
-5-
<PAGE>
the procedures described in Section 4.4. After the end of each quarter, ISG will
deliver to ACCESS a statement setting forth the calculation of the Utilization
Amount, the Committed Amount and the Carryover Amount for the quarter. ACCESS
will pay to ISG within 45 days of receipt of such statement the amount, if any,
by which (i) the Utilization Amount for the quarter minus the Carryover Amount
-----
for the quarter exceeds (ii) the Committed Amount for the quarter.
4.2.2. The following terms used in Section 4.2.1 have the
following meanings:
"Committed Amount" means, for any quarter, the amount so
designated for such quarter in Schedule I.
"Utilization Amount" means, for any quarter, the amount of
license fees that would be payable for all copies of Licensed Works installed
during the quarter, calculated in accordance with Section 4.1 and reflecting any
increase or decrease pursuant to Section 4.2.3.
"Carryover Amount" means, for any quarter, the amount (if any) by
which (i) the sum of the Committed Amounts for all preceding quarters exceeds
(ii) the sum of the Utilization Amounts for all preceding quarters. The
Carryover Amount shall be retroactively adjusted to reflect any retroactive
price adjustments required by Section 4.2.3.
4.2.3. The obligation of ACCESS to pay Committed Amounts shall be
subject to compliance by ISG with its obligations hereunder and shall terminate
upon any termination of this Agreement. ACCESS shall have the following options
to change its obligations to pay the Committed Amounts and the pricing of
Licensed Works.
Option 1. ACCESS may cancel its obligations to pay the Committed
--------
Amounts for the quarter ended June 30, 1998 and all subsequent quarters upon
notice to ISG delivered on or before June 29, 1997. The obligations of ACCESS to
pay the Committed Amounts for the quarter ending on March 31, 1998 and all prior
quarters will be unaffected by exercise of this option. Upon exercise of this
option, the license fees for Licensed Works will be changed from those shown in
Table 1 of Schedule I to those shown in Table 2 of Schedule I, and Utilization
Amounts and the Carryover Amount shall be calculated on this basis. This change
will apply retroactively to all copies of Licensed Works installed after the
effective date of this Amended and Restated
CONFIDENTIAL TREATMENT
-6-
<PAGE>
Reseller Agreement and ACCESS will pay, upon invoice by ISG following exercise
of this Option 1, the amount (if any) by which (i) the payments that would have
been made under Section 4.2.1 for prior quarters based upon Table 2 of Schedule
I exceed (ii) the amounts actually paid by ACCESS during such prior quarters.
Option 2. ACCESS may cancel its obligations to pay the Committed
--------
Amounts for the quarter ended June 30, 1999 and all subsequent quarters upon
notice to ISG delivered on or before September 15, 1998. The obligations of
ACCESS to pay the Committed Amounts for the quarter ending on March 31, 1999 and
all prior quarters will be unaffected by exercise of this option. Upon exercise
of this option, the license fees for copies of Licensed Works installed after
March 31, 1998 will be changed from those shown in Table 1 of Schedule I to
those shown in Table 2 of Schedule I, and Utilization Amounts and the Carryover
Amount shall be calculated on this basis. This change will not be retroactive.
If neither Option 1 nor Option 2 is exercised, the license fee
for the VRS NT 200 (v1.1) application will be reduced to zero for all copies
installed after September 15, 1998. If ACCESS shall deliver to ISG an
irrevocable waiver of ACCESS's rights to exercise Option 1 and Option 2 (which
may be delivered after Option 1 has expired), the license fee for the VRS NT 200
(v1.1) application will be reduced to zero for all copies installed after the
date of the waiver. ACCESS may at any time elect to reduce the license fee for
the VRS NT 200 (v1.1) application to zero by notice to ISG accompanied by
payment of a reduction fee of [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] Such a reduction
will be effective for all copies of the VRS NT 200 (v1.1) application installed
after the date of notice and payment.
4.3 After termination of the obligations of ACCESS to pay Committed
Amounts ACCESS shall nonetheless have the rights to resell ISG Devices and
license the Licensed Works as set forth herein for the remaining term of this
Agreement. After any termination of the Committed Amount obligations, license
fees for the Licensed Works shall be calculated in accordance with Sections 4.1
and 4.2.3 and shall be paid monthly upon invoice by ISG for Licensed Works
installed during each month. Any Carryover Amount remaining after termination of
the Committed Amount obligations shall be applied on a first dollar basis to
reduce license fees otherwise payable.
CONFIDENTIAL TREATMENT
-7-
<PAGE>
4.4 Within 15 business days of the end of each month, ACCESS will
deliver to ISG a written statement setting forth a list of all ISG Devices
shipped or installed during the month, the Licensed Works included in such ISG
Devices, the name and address of the end user site for each device, a contact
name and telephone number for each end user, and the host ID of each system on
which Licensed Works are installed. These statements will be the basis for
quarterly statements of utilization required by Section 4.2.1 and the monthly
invoices required by Section 4.3. Terms and conditions for all ISG Devices
ordered hereunder shall be in accordance with this Agreement and shall not be
modified by any terms of ACCESS's purchase order or other forms or ISG's
invoice, bill of lading, installation certificate or other forms. Payment of all
invoices shall be due 45 days from receipt of invoice. Amounts overdue beyond
this limit will bear interest at the rate of 1% per month.
4.5 ACCESS shall maintain complete and accurate records of each ISG
Device sold and each copy of Licensed Works installed hereunder, including
without limitation all records required for compliance with FDA regulations. ISG
may, not more often than twice in any period of twelve consecutive months,
conduct a review of the records of ACCESS relating to ISG Devices and Licensed
Works, at reasonable times and upon reasonable notice. ISG shall bear its own
costs incurred for any such audit unless the audit results in a determination of
a discrepancy of more than 10% between license fees payable as originally
reported by ACCESS and license fees actually payable for Licensed Works
installed by ACCESS for the period covered by the audit, in which case ACCESS
shall pay the reasonable out of pocket costs of the audit. All information made
available by ACCESS under Section 4.4 or this section 4.5 shall be treated as
confidential in accordance with Section 6.2 and shall not be used for any
purpose other than determination of the amounts payable under this Agreement.
4.6 Prices do not include sales tax or similar taxes. ACCESS shall
pay such taxes either directly or when invoiced by ISG, or shall supply
appropriate tax exemption certificates in a form satisfactory to ISG.
4.7 Payments to ISG shall not be deemed to have been made until the
funds are available to ISG in Mississauga, Ontario, Canada. Alternatively, if
ACCESS is prevented by government regulations from transferring funds to
Canada, ISG shall have the right to require ACCESS to deposit the blocked funds
or an equivalent amount denominated in another currency due to ISG in a bank and
country designated by ISG and for ISG's account.
CONFIDENTIAL TREATMENT
-8-
<PAGE>
4.8 ACCESS shall be responsible, at its own expense, for obtaining
all necessary import permits and for the payment of any and all taxes and duties
imposed on the delivery, importation, sale or license of the ISG Devices and
Licensed Works in locations designated by ACCESS; except that ISG shall be
responsible for complying with all regulations or other measures promulgated by
the FDA under the Food and Drug Act which are required to be complied with for
the importation of ISG Devices into the United States.
4.9 If any copy of Licensed Works installed on an ISG Device is lost
or is so damaged as to be unusable prior to delivery of such ISG Device to the
customer, ISG will permit installation of a replacement copy of such lost or
damaged Licensed Works without payment of an additional license fee.
5. SUPPORT.
5.1 ISG will supply the following materials to ACCESS:
5.1.1 Five copies of the latest object code or executable code
for the GMA Release version of each item included in the Licensed Works, with
updates as provided in Section 5.2.3. Each copy of Licensed Works will enable
ACCESS to install and integrate such Licensed Works on ISG Devices, and will
enable users to use such ISG Devices for an unlimited time, without requiring
any activation or other action by ISG. If a copy of the Licensed Works initially
provided is lost, damaged or destroyed, ISG will provide at cost a replacement
copy, which may be a more recent release or version.
5.1.2 Either (i) for each ISG Device for which a license fee is
recorded, one copy of documentation in English and documentation updates as they
are prepared and released which, when taken together, constitute complete
documentation for the ISG Devices complying with the requirements of the Food
and Drug Act and the regulations and other measures promulgated by the FDA
thereunder or (ii) all materials necessary to permit ACCESS to produce
documentation as set forth in clause (i), which will include soft copy of text
and updates as well as art work for covers, backs and spines of user manuals.
CONFIDENTIAL TREATMENT
-9-
<PAGE>
5.1.3 Five copies of all installation scripts and procedures
necessary or appropriate for installation of the GMA Release version of each
item of Licensed Software on ISG Devices.
5.1.4 Five copies of any modifications to the Licensed Works
(with revisions to the documentation to reflect such modifications) which are
provided to other customers of ISG without charge and are not proprietary to
such customers.
5.2 ISG will provide the following support:
5.2.1 ISG will make support as provided in this Section 5.2
available for each ISG Device for the duration of the Support Period for such
device, subject to payment of support fees as provided herein. ISG will at all
times support the current release of each of the Licensed Works and the
immediately preceding Major Release of each of the Licensed Works. ISG will
support each Major Release of VRS UNIX Software for at least 12 months from the
date of GMA Release, regardless of the number of additional releases during such
period. After June 30, 1998, ISG will support each Major Release of VRS NT
Software for at least 12 months from the date of GMA Release, regardless of the
number of additional releases during such period. A "Major Release" is a release
of a Licensed Work which has undergone full GMA Release procedures and is
identified by the first two numerals in a version number (that is, "x.y").
5.2.2 ACCESS will provide first line support to its customers.
In the event of a problem, ACCESS's end customer will contact ACCESS with
problems, queries and/or help line requests. Trained ACCESS customer service
personnel will respond to calls and attempt to diagnose and repair problems
according to procedures defined in ISG's training courses and documentation.
ACCESS will contact ISG only after having done so without resolving the problem,
with such contact being made as defined for the relevant geographical territory
and the problem being logged in accordance with an agreed procedure. ISG will
then provide second line support. ISG will issue a Customer Service Order Number
and one or more of the following courses of action will be taken as deemed
appropriate by ISG technical support staff:
i) Technical or applications support via telephone to trained
ACCESS service personnel.
ii) In depth problem investigation and analysis via modem to end
customer system. This support is provided only where direct high speed modem
access is available via a dedicated telephone line.
CONFIDENTIAL TREATMENT
-10-
<PAGE>
iii) A monthly problem report will be provided to ACCESS
detailing the Customer Service Order Number, date and type of call and
resolution of each support call.
iv) On site consultation is available upon request at then
applicable ISG standard time and materials rates and is subject to availability
of technical or applications support personnel.
v) Five master copies of software updates will be provided from
time to time to ACCESS, as provided in Section 5.2.3 below.
5.2.3 In providing maintenance support, ISG shall:
i) Respond to and verify any alleged errors in the
documentation or code upon notification by ACCESS; and
ii) Provide resolution of defects as detailed below:
1. Safety - Deficiency affects patient safety or FDA
reportable defects.
2. Critical - Deficiency causes the VRS application to fail
catastrophically.
3. Urgent - Deficiency causes the VRS application to give
erroneous, distorted or severely deficient function from which users
must be isolated.
4. Serious to Minor - Deficiency similar to level 3 above,
but for which a work-around can be implemented allowing the user to
achieve the desired accuracy or function, with minor inconvenience, or
deficiency causes minor inconvenience, but is a definite deficiency
against specification.
5. Improvements - ACCESS requests new functionality not
covered by specification.
For priority levels 1, 2 and 3, ISG will immediately take corrective action and
provide a validated bug fix, in the form of an update, within a reasonably
expeditious time frame.
CONFIDENTIAL TREATMENT
-11-
<PAGE>
For priority level 4, ISG will take corrective action and provide a validated
bug fix, in the form of an update, without charge, within a reasonable time
frame.
For priority level 5, ISG will determine in its good faith judgment whether the
requested functionality is appropriate for inclusion in the next general release
to customers. If ISG so determines, ISG will provide an update to ACCESS
without charge. If ISG does not so determine, ISG will provide the requested
modification at ISG's standard charges.
5.2.4 ACCESS will pay support fees of [*THE CONFIDENTIAL
PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.] to be invoiced on June 30, 1997 and [*THE CONFIDENTIAL PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
to be invoiced on June 30, 1998. ACCESS and ISG will, not less than annually,
review the foregoing support fees and the records of both parties relating to
service provided to customers, and will discuss in good faith whether any change
in such fees is appropriate in light of the time and effort actually expended by
ISG on support under this Agreement. Prior to March 31, 1999, ACCESS and ISG
will negotiate pricing for support to be provided by ISG after that date. ISG
will in any event make support available after that date to the extent provided
in this Agreement at ISG's then applicable time and materials charges.
5.3 ISG hereby certifies the compatibility only of the hardware and
systems configurations listed in Schedule I for inclusion in ISG Devices on
which Licensed Works are installed. ISG will cause the Licensed Works to be
compatible with, and will certify to ACCESS that ISG Devices may include:
(i) At all times during the term of this Agreement prior to the
UNIX Termination Date, the release of the Sun Solaris operating system
immediately prior to the then most current release.
(ii) At all times during the term of this Agreement on or after
the UNIX Termination Date, the most current release of the Sun Solaris
operating system as of the UNIX Termination Date; provided that if support
of a newer release of the Sun Solaris operating system is
CONFIDENTIAL TREATMENT
-12-
<PAGE>
necessary to correct a defect of Level 3 or higher (as defined in Section
5.2.3(ii)), ISG will provide the necessary support. The "UNIX Termination
Date" means a date of which ACCESS is notified at least twelve months in
advance, on which ISG shall cease to make VRS UNIX Software available to
customers.
(iii) At all times during the term of this Agreement, the
release of the Windows NT operating system immediately prior to the then
most current release.
ISG Devices including any of the systems and components set forth
above, and Licensed Works installed thereon, shall be covered by all support
obligations, representations, warranties and agreements of ISG contained herein.
5.4 While it is acknowledged that the ISG Devices may be used in
certain surgical, medical life support or other applications of a similar degree
of potential hazard, ACCESS acknowledges that ISG Devices are not designed or
intended to substitute for or override the training, experience and knowledge of
end users.
1. ADDITIONAL COVENANTS.
6.1 ACCESS shall include in all copies of Licensed Works made by
ACCESS any copyright or similar notice as furnished by ISG to ACCESS.
6.2 Each party hereto covenants that it shall keep confidential any
confidential information relating to the other party's business, finances,
marketing and technology to which it obtains access (including without
limitation the Licensed Works and the pricing and other terms of this Agreement)
and that it shall take all reasonable precautions to protect such confidential
information of the other party or any part thereof from any use, disclosure or
copying except as expressly authorized by this Agreement. The obligations of
the parties under this Section 6.2 are in addition to, and not in substitution
of, their respective obligations under the Confidentiality Agreement dated as of
March 31, 1995 between ACCESS and ISG.
6.3 The parties agree as follows with respect to proprietary rights:
CONFIDENTIAL TREATMENT
-13-
<PAGE>
6.3.1 ACCESS acknowledges that, except as set forth in Section
6.3.2 below, the Licensed Works and all related information and documentation
are the property of ISG and/or third parties from whom ISG has acquired certain
rights under license.
6.3.2 ISG acknowledges that ACCESS has provided and will
provide to ISG certain software applications, know-how and trade secrets
relating to wavelet compression and decompression of images, which are included
in Licensed Works made available to ACCESS under this Agreement. ISG agrees that
it will treat the particular specifications ACCESS has provided regarding
compression and decompression as proprietary information of ACCESS. This applies
to the specifications and concepts including the following:
1. Non-standard DICOM transport mechanisms for image transmission
2. Controls over the number of images in a study
3. The use of progressive decompression
4. Modifications to the DICOM header elements reflecting changes in
certain data such as image matrix size and compression status
5. Error and exception handling
6. PPP server transmission methodologies
ISG agrees that it will not provide other customers for its workstation products
with the above information and know-how (or devices or applications including
them). Nothing in this paragraph will be construed so as to restrict ISG from
developing and/or marketing a solution similar to any or all of the ACCESS
solutions specified in items 1 to 6 above, provided that ISG has received the
specifications and/or know-how for such similar solutions from a third party
without solicitation or assistance from ISG and without any knowledge on ISG's
part that such third party is in violation of any confidentiality obligation or
proprietary right.
6.4 ACCESS at all times will comply with all provisions of the Food
and Drug Act and the regulations and other measures promulgated by the FDA
thereunder which are applicable to ACCESS as a distributor of ISG Devices as
contemplated by this Agreement.
CONFIDENTIAL TREATMENT
-14-
<PAGE>
6.5 ISG represents that the ISG Devices, when configured and marketed
as contemplated by this Agreement and assuming compliance by ACCESS with its
covenant set forth in Section 6.4, will at all times comply with all applicable
provisions of the Food and Drug Act, the regulations and other measures
promulgated by the FDA thereunder, and all filings made by ISG thereunder, and
will have all necessary FDA clearances or approvals for commercial marketing in
the United States of America. ISG will at all times comply with all provisions
of the Food and Drug Act, the regulations and other measures promulgated by the
FDA thereunder, and all filings made by ISG thereunder, which are applicable to
ISG as the manufacturer of ISG Devices distributed as contemplated by this
Agreement.
6.6 The parties agree to the following indemnity provisions:
6.6.1 ACCESS shall indemnify and save harmless ISG from and
against any and all liabilities, damages, costs or expenses (including
attorney's fees as incurred) resulting from any negligence or misconduct of
ACCESS in marketing or installing ISG Devices or failure to comply with ACCESS's
obligations set forth in Section 6.4.
6.6.2 ISG shall indemnify and save harmless ACCESS from and
against any and all liabilities, damages, costs or expenses (including
attorney's fees as incurred) resulting from any negligence or misconduct of ISG
in manufacturing ISG Devices, any defect in ISG Devices installed and configured
as instructed by ISG, or any inaccuracy or failure of compliance with ISG's
representations and obligations set forth in Section 6.5.
6.6.3 Any party seeking indemnification hereunder shall promptly
inform the indemnifying party in writing upon becoming aware of any claim for
which indemnity may be sought. Such notice shall include a statement of the
facts and circumstances relevant to such claim. Following such notice, the
indemnifying party may participate in the defense. Neither party shall settle
or compromise any claim for which indemnity is sought hereunder without the
prior written consent of the indemnifying party.
CONFIDENTIAL TREATMENT
-15-
<PAGE>
6.7 At least two qualified ACCESS employees will attend two days of
service training at ISG's facility annually. ACCESS will pay a charge of $3,000
per person per year for such training. Attendance by ACCESS personnel for whom
the training charge has been paid in any year at additional new training courses
during that year will be free of charge.
6.8 ISG agrees to the following development obligations.
6.8.1 ISG will release for resale by ACCESS hereunder either a
software patch for VRS UNIX 2.1 or a release of VRS UNIX 2.2 , which will in
either case include additional functionality as set forth in Schedule I. This
patch or release will be released in a beta test version by June 30, 1997 and a
GMA Release version by October 31, 1997.
6.8.2 ISG will release for resale by ACCESS hereunder a GMA
Release version of the VRS NT-200 Release 1.1 application, having the
functionality specified in Schedule I, by May 30, 1997.
6.8.3 ISG will release for resale by ACCESS hereunder a GMA
Release version of the VRS NT Software having the decompression functionality
specified in Schedule I by June 30, 1997.
6.8.4 If ISG does not release any of the applications set forth
above by the date specified, payment of all Committed Amounts falling due after
the specified release date will be deferred until release occurs. During any
period of deferral, ACCESS will pay license fees as provided in Section 4.3.
Upon resumption of payment of Committed Amounts, payments made during the
deferral period will be credited on a first dollar basis against Committed
Amounts payable.
7. WARRANTIES.
7.1 ISG warrants and agrees that:
7.1.1 ISG has the full authority to grant the license and rights
set forth in this Agreement.
7.1.2 To the best of ISG's knowledge, the documentation and
code of the Licensed Works have not been published under circumstances which
have caused loss of copyright therein, and to the best of the ISG's knowledge
the documentation and code of the Licensed Works do not infringe upon any
copyright or other proprietary right of any third party.
CONFIDENTIAL TREATMENT
-16-
<PAGE>
7.1.3 ISG is not aware of any claim of infringement of any
copyright or other proprietary right having been made or pending against ISG
relative to the documentation or code of the Licensed Works.
7.1.4 ISG will, at its expense, defend against, hold ACCESS
harmless from, and pay any final judgment against ACCESS or any ACCESS customer
arising out of any claim that the use of any Licensed Work as contemplated by
this Agreement infringed a copyright, a patent or a trade secret provided that
(i) ACCESS notifies ISG in writing of such claim or action, and (ii) ISG has
sole control of the defense and settlement of such claim or action. In defending
against such claim or action, ISG may, at its option, agree to any settlement in
which ISG shall either (1) procure for ACCESS and all ACCESS customers the right
to continue using the Licensed Works; or (2) modify or replace the Licensed
Works so that they no longer infringe, to the extent that the exercise of such
option does not result in a material adverse change in the operational
characteristics of the Licensed Works, and equivalent functions and performance
provided by ISG remain following implementation of such option. If ISG concludes
in its judgment that none of the foregoing options is reasonable, ISG may remove
the Licensed Works and any other components supplied by ISG rendered unusable as
a result of such removal and repay to ACCESS all amounts paid with respect to
the infringing products by ACCESS to ISG under this Agreement. Any such payment
shall be in addition to, and shall not diminish, ISG's obligation to defend and
indemnify against claims for infringement. Each party shall promptly notify the
other in the event that it becomes aware of a claim covered by this Section 7.1.
7.2 The ISG Devices, when properly installed and configured, will meet
all applicable standards of the American College of Radiology for diagnostic
images and are appropriate for diagnostic radiological examinations, and ISG has
no knowledge of existing problems which would cause the ISG Devices to fail to
comply with the foregoing warranty.
8. TERM AND TERMINATION.
8.1 This agreement shall have an initial term ending on March 31,
2000, subject to earlier termination as provided below.
8.2 If there shall be any material breach of this Agreement by ACCESS
which shall not be cured within 30 days of ISG giving written notice thereof to
ACCESS, then at any time thereafter that such breach shall be continuing ISG may
terminate this Agreement by delivery of a separate written termination notice to
ACCESS.
CONFIDENTIAL TREATMENT
-17-
<PAGE>
8.3 If there shall be any material breach of this Agreement by ISG
which shall not be cured within 30 days of ACCESS giving notice thereof to ISG,
then at any time thereafter that such breach shall be continuing ACCESS may
terminate this Agreement by delivery of a separate written termination notice to
ISG.
8.4 If either party to this Agreement shall wind up or discontinue its
business, shall make an assignment for the benefit of creditors, shall have a
receiver appointed for its assets, shall commence bankruptcy or insolvency
proceedings, or shall have bankruptcy or insolvency proceedings commenced
against it which shall not be dismissed or stayed within 60 days, the other
party may terminate this Agreement upon notice to the affected party.
8.5 If this Agreement shall be terminated under Section 8.2, Section
8.3 or Section 8.4, then:
8.5.1 ACCESS's right to resell ISG Devices and to furnish
Licensed Works to customers and to use and make copies of the Licensed Works
shall immediately terminate;
8.5.2 ISG's support obligations hereunder shall immediately
terminate;
8.5.3 ACCESS shall pay, within ten (10) days, all amounts which
have accrued to ISG;
8.5.4 ACCESS shall immediately deliver the master copy of the
Licensed Works and all other copies in the possession of ACCESS to ISG at
ACCESS's expense; and
8.5.5 ACCESS shall provide a list of names and addresses of
customers who have entered into sublicenses with ACCESS since the date of this
Agreement.
8.6 Notwithstanding any termination or expiration of this Agreement,
any sublicense granted to an ACCESS customer prior to such termination or
expiration shall survive such termination or expiration, and Sections 6.2, 6.3,
6.6 and 7.1 shall survive any such termination or expiration. The rights of
ACCESS under Section 9.10 and the Escrow Agreement referred to therein shall
survive any termination of this Agreement by
CONFIDENTIAL TREATMENT
-18-
<PAGE>
ACCESS. The obligations of ISG to provide support set forth in Section 5.2 and
the obligations of ISG under Section 9.10 shall survive expiration of the term
of this Agreement for the remainder of the Support Period for any ISG Device,
subject to continued payment of support fees by ACCESS.
8.7 The remedies set forth in Sections 8.1 through 8.5 shall not be
exclusive, but shall be in addition to any other remedies available to either
party at law or in equity.
9. GENERAL.
9.1.1 ACCESS and ISG are independent contractors and separate legal
entities and shall in no way be interpreted as partners, joint-venturers,
agents, employees or legal representatives of each other for any purpose.
ACCESS shall solicit orders for ISG Devices only as an independent contractor.
The parties shall not be responsible for or bound by any act of the other party
or such other party's agents, employees or any person in any capacity in its
service.
9.2 Assignment:
9.2.1 Subject to ACCESS's right to grant sublicenses hereunder,
ACCESS may not assign this Agreement or any rights hereunder without the prior
written consent of ISG except that, without such consent and upon notice to ISG,
ACCESS may assign all of its rights hereunder to a corporation or other legal
entity that acquires substantially all of ACCESS's assets or where ACCESS is
consolidated or merged but then only upon the express assumption by such
transferee or its successor of the obligations set forth in this Agreement.
9.2.2 ISG may not assign this Agreement or any rights hereunder
without the prior written consent of ACCESS, except that, without such consent
and upon notice to ACCESS, ISG may assign all of its rights hereunder to a
corporation or other legal entity that acquires substantially all of ISG's
assets or where ISG is consolidated or merged, but then only upon the express
assumption by such transferee or its successor of the obligations set forth in
this Agreement.
9.2.3 This Agreement is binding upon, and inures to the benefit
of, the successors and permitted assigns of the parties.
CONFIDENTIAL TREATMENT
-19-
<PAGE>
9.3 The waiver or failure of either party to exercise in any respect
any right provided for in this Agreement shall not be deemed a waiver of any
further or future right hereunder.
9.4 The headings used in this Agreement are for convenience of
reference only and are not to be used in interpreting the provisions of this
Agreement.
9.5 If any provision of this Agreement is invalid or unenforceable in
any particular case, such case shall not invalidate or render unenforceable any
other part of this Agreement. The Agreement shall simply be construed as not
containing the particular provision or provisions held to be invalid or
unenforceable to the extent of the particular case, and the rights and
obligations of the parties hereto shall be construed accordingly.
9.6 This Agreement is effective when executed by both parties. This
Agreement may be executed in counterparts, each of which shall constitute one
and the same instrument.
9.7 This Agreement and the Confidentiality Agreement dated March 31,
1995 constitute the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties
pertaining to such subject matter.
9.8 Unless otherwise indicated, all dollar amounts referred to in this
Agreement are in U.S. funds.
9.9 This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
9.10 ISG shall place a copy of the source code for the Licensed Works
(the "Escrow Materials") it has the authority to so deliver, in escrow with Fort
Knox Escrow Services, Inc. (the "Escrow Agent") under an Escrow Agreement in the
form of Schedule IV. The Escrow Agent shall be authorized to release the Escrow
Materials to ACCESS if and when ACCESS is deemed to have the right thereto as
determined below.
9.10.1 Provided that ACCESS is not then in material default under
the terms of this Agreement, the Escrow Agent shall provide to ACCESS the Escrow
Materials upon notification by ACCESS to the Escrow Agent, with a copy to ISG,
CONFIDENTIAL TREATMENT
-20-
<PAGE>
of the occurrence of any of the following events (each a "Release Condition"):
(a) The undisputed failure by ISG, following not less than 90
days written notice from ACCESS, clearly indicating the
nature of the default, to maintain the Licensed Works and
such failure results in the occurrence or continuance of a
defect classified as Level 1 Safety, Level 2 Critical or
Level 3 Urgent under Section 5.2.3 above, or if such
failure is disputed, the notice must be supplemented by a
court order resolving the dispute; or
(b) Proceedings shall be commenced by or against ISG under the
United States Bankruptcy Code or the Canadian Bankruptcy
and Insolvency Act and (in the case of a proceeding
commenced against ISG) shall not be dismissed or discharged
within 90 days of commencement.
9.10.2 Upon taking possession of the Escrow Materials due to the
occurrence of a Release Condition, ACCESS agrees that such source code shall be
subject to restrictions on use, transfer, sales and reproduction placed on the
Licensed Works themselves by this Agreement.
9.10.3 The Escrow Agreement will continue in full force and
effect, except that this Agreement shall govern any inconsistencies between this
Agreement and the Software Escrow Agreement.
9.10.4 ACCESS shall use the Escrow Materials only for what would
otherwise be obligations of ISG to provide support of the Licensed Works. It is
expressly understood that the Software Escrow Agreement pertains to the right to
use the Escrow Materials and that no rights to ownership of the Escrow Materials
pass from ISG to ACCESS. It is also expressly understood that the Escrow
Materials are confidential and secret assets of ISG and the Escrow Materials
will be held by ACCESS and not reproduced or copied, or made available to any
third party, except in accordance with this Agreement. It is expressly
understood that the Escrow Materials will be either returned to ISG or destroyed
once the default giving rise to a Release Condition is cured and adequate
assurances of ISG's future performance are given to ACCESS. UNDER NO
CIRCUMSTANCES IS THE SOURCE CODE TO BE SOLD, TRANSFERRED OR COPIED BY ACCESS OR
ITS DISTRIBUTORS. This
CONFIDENTIAL TREATMENT
-21-
<PAGE>
Agreement shall be deemed to be a "License Agreement" referred to in the Escrow
Agreement and Section 365(n) of the United States Bankruptcy Code.
9.11 EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT (INCLUDING WITHOUT
LIMITATION ARTICLE 5), ISG MAKES NO WARRANTIES OF ANY KIND WITH RESPECT TO THE
ISG DEVICES, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. Except as otherwise set forth in this
Agreement, in no event shall ISG be liable to ACCESS for any indirect, special,
incidental or consequential damages of any nature or kind whatsoever or for any
damages (whether caused directly or indirectly) related to loss of profits, loss
of revenue, loss of data or other economic loss in connection with, or arising
out of, the use or supply or non-supply of the ISG Devices. Except as otherwise
set forth in this Agreement (including without limitation Articles 6 and 7), the
liability of ISG to ACCESS under this Agreement or resulting from this Agreement
under any theory of law or equity is limited to money damages not to exceed the
total amount paid by ACCESS to ISG hereunder.
9.12 Notices:
All notices provided for in this Agreement shall be in writing or facsimile,
addressed to the appropriate party at its respective address set forth below or
to such other then-current address as is specified by notice, as follows:
(a) to ISG: ISG Technologies, Inc.
6509 Airport Road
Mississauga, Ontario
CANADA L4V 1S7
Facsimile: (905) 672-0360
Attention: VP Finance
(b) to ACCESS: ACCESS Radiology Corporation
313 Speen Street
Natick, MA 01760
Facsimile: (508) 647-9350
Attention: Howard Pinsky
Notices shall be deemed to be received upon actual delivery, upon confirmation
of receipt of a facsimile, or five days after mailing with first class postage
prepaid.
CONFIDENTIAL TREATMENT
-22-
<PAGE>
9.13. This Amended and Restated Reseller Agreement shall become
effective when executed by ISG and ACCESS. All references to "this Agreement",
"herein", "hereby" and similar references shall refer to this Amended and
Restated Reseller Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the first date set forth above.
ACCESS RADIOLOGY CORPORATION ISG TECHNOLOGIES, INC.
By: /s/ David Lang /s/ Peter Bak
---------------------------- ----------------------------
By:
---------------------------- ----------------------------
Name: David Lang Name: Peter Bak
---------------------------- ----------------------------
Title: Vice President of Title: Vice President of
Business Operations Product Development
CONFIDENTIAL TREATMENT
-23-
<PAGE>
SCHEDULE I
----------
LICENSED WORKS DESCRIPTION AND PRICING
--------------------------------------
PRICING TABLE 1
<TABLE>
<CAPTION>
==========================================================================================================
PRODUCT FEATURE VRS-NT-200 VRS-NT-600 VRS-NT-ICU VRS-NT-DX VRS-NT-XS VRS-UNIX DX VRS-UNIX XS
(V1.1)
==========================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
BASE PRICING
==========================================================================================================
[*] [*] [*] [*] [*] [*] [*] [*]
==========================================================================================================
OPTIONS PRICING
==========================================================================================================
[*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
==========================================================================================================
</TABLE>
* THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT
-24-
<PAGE>
PRICING TABLE 2
<TABLE>
<CAPTION>
==========================================================================================================
PRODUCT FEATURE VRS-NT-200 VRS-NT-600 VRS-NT-ICU VRS-NT-DX VRS-NT-XS VRS-UNIX DX VRS-UNIX XS
(V1.1)
==========================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
BASE PRICING
==========================================================================================================
[*] [*] [*] [*] [*] [*] [*] [*]
==========================================================================================================
OPTIONS PRICING
==========================================================================================================
[*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
==========================================================================================================
</TABLE>
* THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Base Unit Feature Content:
- --------------------------
The features included in the Base Unit for each Product are detailed in the
attached Marketing Specifications Documents as follows:
VRS-NT 200 Product -
1. Viewing and Reading Stations on NT (VRS-NT)
Release 1.0
Marketing Specifications Document v1.1
November 29, 1997
2. VRS-NT 200 Release 1.1
ACCESS Radiology Corporation Additional Features to VRS-
NT 200 Release 1.0
VRS-NT 600, ICU, DX and XS Products -
1. Document 1997-00295
Rev. 12.0-approved
31 March 1997
VRS-UNIX Products -
1. Viewing and Reading Stations (VRS) Release 2.1
Marketing Specifications Document v5.0
November 29, 1997
CONFIDENTIAL TREATMENT
-25-
<PAGE>
2. VRS UNIX Release 2.1 Patch / Release 2.2
ACCESS Radiology Corporation Additional Features to VRS
UNIX Release 2.1
Exceptions to the detailed features are as follows:
- "Advanced Viewing Protocols" is an option for the VRS-NT DX and
VRS-UNIX DX.
- "Scout View and Image Cross Reference" is an option for VRS-NT 600,
VRS-NT DX and VRS-UNIX DX.
- "Multi-planar Reformat" is an option for VRS-NT XS and VRS-UNIX XS.
- "Maximum Intensity Projection" is an option for VRS-NT XS.
- "DICOM 3.0 Export" is an option for VRS-NT 600 and VRS-NT ICU.
Options Pricing Legend:
- -----------------------
X = Cannot be purchased as an option
$xx = Price of option in US$
. = Option included in base unit
CONFIDENTIAL TREATMENT
-26-
<PAGE>
COMMITMENT TABLE
================================================================================
QUARTER AMOUNT INVOICE DATE PAID DATE
(ON OR BEFORE) (ON OR BEFORE)
================================================================================
Q1 [*] - -
- --------------------------------------------------------------------------------
Q2 [*] June 30/th/ 1997 August 14/th/ 1997
- --------------------------------------------------------------------------------
Q3 [*] September 30/th/ 1997 November 14/th/ 1997
- --------------------------------------------------------------------------------
Q4 [*] December 31/st/ 1997 February 14/th/ 1998
- --------------------------------------------------------------------------------
Q5 [*] March 31/st/ 1998 May 15/th/ 1998
- --------------------------------------------------------------------------------
Q6 [*] June 30/th/ 1998 August 14/th/ 1998
- --------------------------------------------------------------------------------
Q7 [*] September 30/th/ 1998 November 14/th/ 1998
- --------------------------------------------------------------------------------
Q8 [*] December 31/st/ 1998 February 14/th/ 1999
- --------------------------------------------------------------------------------
Q9 [*] March 31/st/ 1999 May 15/th/ 1999
- --------------------------------------------------------------------------------
Q10 [*] June 30/th/ 1999 August 14/th/ 1999
- --------------------------------------------------------------------------------
Q11 [*] September 30/th/ 1999 November 14/th/ 1999
- --------------------------------------------------------------------------------
Q12 [*] December 31/st/ 1999 February 14/th/ 2000
- --------------------------------------------------------------------------------
Q13 [*] March 31/st/ 2000 May 15/th/ 2000
================================================================================
* THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT
-27-
<PAGE>
VRS UNIX RELEASE 2.1 PATCH / RELEASE 2.2
ACCESS RADIOLOGY CORPORATION ADDITIONAL FEATURES TO VRS UNIX
RELEASE 2.1
The following additional features to VRS UNIX Release 2.1 will be provided to
ACCESS Radiology Corporation in the form of either a patch to VRS UNIX Release
2.1 or a new version VRS UNIX Release 2.2.
================================================================================
FEATURE DESCRIPTION
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
- --------------------------------------------------------------------------------
CONFIDENTIAL TREATMENT
-28-
<PAGE>
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
================================================================================
CONFIDENTIAL TREATMENT
-29-
<PAGE>
VRS-NT 200 RELEASE 1.1
ACCESS RADIOLOGY CORPORATION ADDITIONAL FEATURES TO VRS-NT 200
RELEASE 1.0
The following features, in addition to those already provided in VRS-NT 200
Release 1.0, will be provided to ACCESS Radiology Corporation in VRS-NT 200
Release 1.1.
================================================================================
FEATURE DESCRIPTION
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
- --------------------------------------------------------------------------------
CONFIDENTIAL TREATMENT
-30-
<PAGE>
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
================================================================================
CONFIDENTIAL TREATMENT
-31-
<PAGE>
VRS-NT SOFTWARE
ACCESS RADIOLOGY CORPORATION ADDITIONAL FEATURES TO VRS-NT SOFTWARE
The following features, in addition to those stated in VRS NT marketing
Specifications Document Revision 12, #1997-00295, will be provided to ACCESS
Radiology Corporation.
================================================================================
FEATURE DESCRIPTION
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
- --------------------------------------------------------------------------------
[*THE [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
CONFIDENTIAL AND FILED SEPARATELY WITH THE SECURITIES AND
PORTION HAS EXCHANGE COMMISSION.]
BEEN OMITTED
AND FILED
SEPARATELY
WITH THE
SECURITIES
AND EXCHANGE
COMMISSION.]
================================================================================
CONFIDENTIAL TREATMENT
-32-
<PAGE>
SCHEDULE II
-----------
STANDARD FORM SUBLICENSING PROVISIONS
-------------------------------------
Each customer agreement shall provide:
1. That the customer is granted a non-exclusive, nontransferable
license to operate, at the location specified in the customer agreement and for
its own business and professional purposes only, a copy or copies of the object
code form of the software.
2. That title, ownership rights, intellectual property rights and all
other rights associated with the software and applicable under law shall remain
vested in ISG.
3. That the obligations (if any) of ISG are limited to those
expressly stated in the sublicense, are in lieu of all other warranties or
conditions expressed or implied, including without limitation warranties of
merchantability or fitness for a particular use, or those arising by statute or
otherwise in law, or from a course of dealing or usage of trade.
4. That the liability of ISG under any theory of law or equity is
limited to money damages not to exceed the total amount paid by the customer for
ISG Devices.
5. That ISG shall have no liability to the customer with respect to
any claim of patent or copyright infringement to the extent that such claim is
based upon (i) the combination of licensed software with machines, systems or
devices other than those included in the ISG Devices sold to the customer, (ii)
modification of the licensed software by the customer, or (iii) use of the
licensed software not in accordance with its specifications.
6. That the customer shall:
(a) maintain the software in confidence, utilizing at least the
same degree of care used by the customer to protect its own
confidential information;
(b) not transfer the software to any other party, except in
connection with a sale of the ISG Device in which it is
installed;
CONFIDENTIAL TREATMENT
-33-
<PAGE>
(c) not attempt to produce any work derived from the software
or modify the software in any manner whatsoever;
(d) not attempt to decode, decipher, decompile, decompose,
disassemble, reverse engineer or otherwise render the
software to a human-perceivable form; and
(e) not attempt to defeat the mechanisms which control the
number of copies of the software which are allowed to
operate simultaneously during any particular time period.
7. That the customer acknowledges that, although the software may be
used in certain surgical, medical life support or other applications of a
similar degree of potential hazard, the software is not designed or intended to
substitute for or override the training, experience and knowledge of end users.
8. That the customer acknowledges that ISG Devices are resold to the
customer by agreement of ISG, and that the customer is agreeing to the foregoing
provisions in consideration of ISG making the ISG Devices available under such
agreement.
CONFIDENTIAL TREATMENT
-34-
<PAGE>
CONFIDENTIALTREATMENT EXHIBIT 10.25
[ISG LOGO]
December 29, 1998
Mr. Howard Pinsky
Vice President of Technology
Access Radiology Corporation
25 Hartwell Avenue
Lexington, MA 02173
Dear Howard:
This letter outlines the general terms and conditions around which ISG will
agree to provide the VRS 300 Workstation software to Access Radiology at a
reduced cost. This letter, upon your signature, will constitute an amendment to
the Reseller Agreement dated May 30, 1997. All other terms and conditions of
the Reseller Agreement shall continue to apply.
1) ACCESS will purchase [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] copies of the VRS 300
licensed work for a total cost of [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] A purchase
order must be received by December 31, 1998 for the full amount. ISG will
invoice ACCESS for the full amount, with payment terms of one quarter the total
amount due on the first day of each quarter of 1999 commencing January 1, 1999.
Access will make the VRS 300 software available as part of a larger product
offering. Access may, at ACCESS's option, during the calendar year of 1999
purchase and pay for additional copies of software for [*THE CONFIDENTIAL
PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.] per copy after the [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.] copies have been
purchased.
2) Access agrees to assist ISG with obtaining and implementing Aware's wavelet
compression, and ISG plans to make it available for use on all products and
components developed and owned by ISG, including but not limited to the IAP
Tool Kit. Specifically, ACCESS will release AWARE, Inc. of competitive
restrictions on AWARE products (that are the sole property of AWARE, Inc.)
to ISG, so that ISG can use the AWARE.DLL and AWARE plug-ins in their
products as defined above. Furthermore:
i) ISG may ask Access to provide advice to ISG in matters relating to
ISG's obtaining FDA market clearance; although ACCESS in no way
warrants any specific legal expertise in FDA regulatory matters. If
appropriate, ACCESS will allow ISG to take advantage of the Access's
FDA clearance of the Aware Compression/Decompression solution through
either
CONFIDENTIAL TREATMENT
<PAGE>
reference of substantial equivalence, or through re-packaging and re-
licensing of ACCESS software components.
ii) Access and ISG will work cooperatively in developing decompression
mechanisms that provide for optimal performance in receiving and
displaying compressed images.
iii) [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.]
3) Access also agrees to have the ISG name and logo included in conjunction
with the Access "Splash Screen," when the software is started. The
software copyrights will also make appropriate reference to ISG and contain
the ISG logo in the "About VR" window under the Help Menu. ISG requests
that a copy of the software be sent to ISG, so that ISG, can verify that
the correct information and logo are incorporated into the software before
it is shipped.
4) Access agrees to continue to promote the ISG workstation products in sales
to customers that have installed the VRS 300 and Access Servers.
5) ISG will provide Access with a method of accessing the ISG "Install Wizard"
to allow Access to modify the program to suit its specific installation
requirements. ISG acknowledges that ACCESS plans to provide VRS 300 (as a
part of an ACCESS solutions package) as software only, and plans to use the
Install Wizard to accomplish this. Further, ACCESS plans to run software on
operating systems certified by ISG, including Windows 95 and Windows NT.ISG
will work toward releasing the VRS 300 as quickly as possible under Windows
98.
6) The current implementation of the VR WIN suite of products does not support
different configuration for GDI and Diagnostic Quality (DICOM) printing. If
the print feature is enabled, both GDI (postscript) and DICOM printing are
available. For the purpose of this agreement:
a) Access Radiology may purchase as an option, on any VRS 300 license
covered by this agreement, the full print feature. Access must accept
legal responsibility for enforcing with their end users that the
software's additional print features, beyond postscript, are not
activated. If future ISG VR WIN releases separate the DICOM and the
postscript print features, the new version may be substituted for the
full version. The cost of this option is [*THE CONFIDENTIAL PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.] per license.
B) [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.]
CONFIDENTIAL TREATMENT
<PAGE>
7) ACCESS plans to add ACCESS developed application software to the ISG VRS
products to improve functionality as it relates to end-user workflow. To
accomplish this, ISG will support the VRS COM Interface Specification V3.0
for the VRS 300 product, as well as all other VRS Windows (non-UNIX) based
products, and will support the extensions and modifications of the
specification on future versions of the VRS product. In addition, ISG will
make reasonable efforts to modify the above interface Specification as
requirements and changes are specified by ACCESS. The VRS COM Interface (VR
Server/Broker) consist of a Development Tool Kit priced at [*THE
CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.] and run time licenses at [*THE
CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.] per license for the VRS 300 and [*THE
CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.] per license for all other VR WIN
models. The Development Tool Kit will be purchased as part of agreement and
the run time license can be purchased as an option at any time.
8) In addition, ACCESS plans to include additional applications (report
viewing and network diagnostics) available through the VRS 300 product.
Currently using the default configuration with the small toolbar there is
no way to access reports. This can be modified by changing the registry to
turn on the next size toolbar to get access to reports (this is because
changing to the next size toolbar brings up the study bar which is where
the report button is). This is not optimum. ISG will therefore add either a
report button to the toolbar and/or have report accessible from the menu
bars.
Please indicate your agreement to these general terms and conditions with your
signature below.
- --------------------------------------------------------------------------------
Agreed to this 31st day of December 1998.
ISG TECHNOLOGIES INC. ACCESS RADIOLOGY CORPORATION
By: /s/ Maxwell Rutherford By: /s/ Howard Pinsky
------------------------------ -------------------------------
Name: Maxwell Rutherford Name: Howard Pinsky
---------------------------- -----------------------------
Title: President & Chief Operating Title: Vice President of Technology
--------------------------- ----------------------------
Officer
CONFIDENTIAL TREATMENT
<PAGE>
CONFIDENTIAL TREATMENT EXHIBIT 10.27
OEM DEVELOPMENT SOFTWARE AGREEMENT
This agreement is made as of the 9th day of November, 1995, between MITRA
IMAGING INCORPORATED, a corporation incorporated under the laws of the Province
of Ontario, Canada (hereinafter called "Mitra"), and ACCESS RADIOLOGY
CORPORATION, a corporation incorporated in the State of Delaware (hereinafter
called "ACCESS").
B A C K G R O U N D
1. ACCESS desires to develop application-specific software using software
products marketed by Mitra and to distribute Mitra Software to third party end
users (hereinafter called "Customers"); and
2. Mitra has agreed to license ACCESS to do so,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth the parties hereto agree as follows:
1. Interpretation.
1.1 In this Agreement, each of the following terms has the meaning
set out below:
1.1.1 "DAP for Windows" means all or any portion of the
computer programs in object code format, described as
such in the user's manual entitled "Mitra Imaging
Incorporated DICOM Application Platform Revision 1.0"
dated April 29, 1995, and conforming to the
specifications set forth therein.
1.1.2 "DAP for UNIX" means all or any portion of the computer
programs in object code format, described as such in the
user's manual entitled "Mitra Imaging Incorporated DICOM
Application Platform Revision 1.0" dated April 29,
1995, and conforming to the specifications set forth
therein.
1.1.3 "FDA" means the United States Food and Drug
Administration.
1.1.4 "Food and Drug Art" means the United States Pure Food
and Drug Act, as amended from time to time.
CONFIDENTIAL TREATMENT
-1-
<PAGE>
1.1.5 "Lumiscan" means all or any portion of the computer
programs in object code format, described in the User's
Manual for Lumisys DICOM 3.0 Tookit Version 0-4.2 dated
August 3, 1995, and conforming to the specifications set
forth therein.
1.1.6 "Mitra Software" means all or any portion of DAP for
Windows, DAP for UNIX, Lumiscan and the server software.
1.1.7 "Server Software" means all or any portion of the
computer programs in object code format, listed on
Schedule A and conforming to the specifications set
forth therein.
1.2 Entire Agreement. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter
hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the
parties pertaining to such subject matter.
1.3 Currency. Unless otherwise indicated, all dollar amounts
referred to in this Agreement are in U.S. funds.
1.4 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of
Massachusetts.
2. Grant of Rights.
2.1 Effective upon execution of this Agreement, Mitra hereby
appoints ACCESS a non-exclusive reseller of Mitra Software
products and grants to ACCESS the following nonexclusive rights:
2.1.1 The right to use DAP for Windows and DAP for UNIX to
develop application-specific software and to sublicense
such software incorporated in such ACCESS-developed
software to ACCESS customers in the regular course of
business;
2.1.2 The right to include copies of the Lumiscan and Server
Software in software or devices made available by ACCESS
to its customers and to sublicense Lumiscan and Server
Software included in such software or devices to ACCESS
customers in the regular course of business; and
2.1.3 The right to use copies of the Mitra Software for
internal purposes of ACCESS, including software
development, demonstration,
CONFIDENTIAL TREATMENT
-2-
<PAGE>
support of ACCESS customers and processing of data in
the regular course of ACCESS's business.
3. Customer License Agreements.
3.1 ACCESS shall develop standard form customer sublicensing
provisions acceptable to Mitra for use with Mitra Software. No
customer shall receive any Mitra Software unless such customer
shall have signed an agreement containing the standard form
customer sublicensing provisions.
3.2 Each customer agreement shall set out the name and address of
the customer and the identity and location of the devices on
which the customer is licensed to use a copy of Mitra Software,
and shall include standard form customer sublicensing provisions
which provide:
3.2.1 that only a personal, non-transferable and non-exclusive
right to use each copy of Mitra Software solely for the
customer's business or professional purposes is granted
to the customer;
3.2.2 that no title to the Mitra Software is transferred to
the customer; and
3.2.3 that the customer shall not transfer, provide or
disclose Mitra Software to any other third party.
3.3 ACCESS shall assign a unique internal number to each sublicense
granted to a customer and shall place this number clearly in the
customer agreement.
3.4 ACCESS shall use reasonable efforts to all the licensing
provisions of customer agreements.
3.5 ACCESS shall demonstrate to Mitra that its software applications
that include Mitra Software have sufficient mechanisms for
tracking usage and preventing unauthorized copying. Without this
ACCESS is required to distribute a copy-protected version of the
Mitra Software administrated by Mitra at installation.
4. License Fees.
4.1 ACCESS agrees to pay to Mitra the following license fees:
CONFIDENTIAL TREATMENT
-3-
<PAGE>
4.1.1 A [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
for DAP for Windows and a [*THE CONFIDENTIAL PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.] for DAP for UNIX.
4.1.2 A [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
for each copy of Lumiscan which is sublicensed to an
ACCESS customer.
4.1.3 A [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
for each copy of any application incorporating DAP for
Windows which is sublicensed to an ACCESS customer;
provided that if any copy of such application software
replaces a copy of Lumiscan for which a license fee has
previously been paid pursuant to Section 4.1.2, then
ACCESS shall only be required to pay an upgrade fee of
[*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
with respect to such replacement copy.
4.1.4 A [*THE CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
for each copy of software incorporating DAP for UNIX
which is sublicensed to an ACCESS customer. Copies of
Server Software may in such application software at [*THE
CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
4.2 License and upgrade fees under Sections 4.1.2 through 4.1.4
shall be payable quarterly within 30 days of the end of each
calendar quarter for sublicenses granted to ACCESS Customers
during such quarter. Each payment of such license fees shall be
accompanied by a statement setting forth in reasonable detail
the calculation of the license fees payable. License fees do not
include any customs or import duties, or sales, use or similar
taxes, which shall be the responsibility of ACCESS.
4.3 ACCESS shall keep full, clear and accurate records of the number
of copies of Mitra Software furnished by it to customers or used
by it internally, and the identity and location of each customer
to whom Mitra Software is furnished by ACCESS.
4.4 Mitra shall have the right to make an examination and audit not
more than twice per calendar year, of all records kept pursuant
to Section 4.3.
5. Support.
5.1 Mitra will supply the following materials to ACCESS:
5.1.1 One copy of the latest object code or executable code
for each item of Mitra Software, with upgrades as
provided in Section 5.2. If a
CONFIDENTIAL TREATMENT
-4-
<PAGE>
copy of the Mitra Software initially provided is lost,
damaged or destroyed, Mitra will provide at cost a
replacement copy, which may be a more recent release or
version; and
5.1.2 One copy of documentation in English and documentation
updates as they are prepared and released which, when
taken together, constitute complete documentation of the
Mitra Software complying with Good Manufacturing
Practices as defined in the Food and Drug Act and the
rules, regulations and orders of the FDA thereunder.
5.2 For so long as ACCESS is current in the payment of support costs
as provided in Section 5.3, Mitra warrants to ACCESS that the
Mitra Software will perform in accordance with its
specifications. Mitra will use its best efforts to ensure if
with a such performance and, corrected version of the Mitra
Software as soon as practical after Mitra is notified of any
non-conformity. Mitra will provide generally available upgrades,
maintenance releases, bug fixes and work-arounds at no charge
(except as provided in Section 5.2). Mitra will support the
version of DAP for Windows used by ACCESS as of the date of this
Agreement only until ACCESS upgrades to the next available
version, which ACCESS will do as soon as practicable.
5.3 ACCESS will pay to Mitra aggregate annual support costs of [*THE
CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.] per year with respect
to Mitra Software. Support costs will be payable in advance on
the execution of this Agreement and each anniversary thereof
during the term of this Agreement.
5.4 Notwithstanding Section 5.2, if an upgrade of DAP for Windows
compatible with Windows 95 or Windows NT shall become available
and ACCESS shall request such an upgrade from Mitra, then upon
delivery of such an upgraded version, ACCESS shall pay to Mitra
a one time upgrade fee. This fee shall be equal to [*THE
CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.]
Following delivery of any such upgraded versions, the term "DAP
for Windows" as used in this Agreement shall be deemed to
include such upgraded version for all purposes, it being
understood that the obligations
CONFIDENTIAL TREATMENT
-5-
<PAGE>
of ACCESS and Mitra with respect to the previously existing
version of DAP for Windows shall also remain in full force and
effect.
6. Additional Covenants.
6.1 ACCESS shall include in all copies of Mitra Software made by
ACCESS any copyright notice as furnished by Mitra to ACCESS.
6.2 Each party hereto covenants that it shall keep confidential any
confidential information relating to the other party's business,
finances, marketing and technology, to which it obtains access
(including without limitation DAP for windows, DAP for UNIX and
the pricing and other terms of this Agreement) and that it shall
take all reasonable precautions to protect such confidential
information of the other party or any part thereof from any use,
disclosure or copying except as expressly authorized by this
Agreement.
6.3 ACCESS acknowledges that Mitra Software and all related
information and documentation are the property of Mitra and/or
third parties from whom Mitra has acquired certain rights under
license.
6.4 ACCESS shall indemnify and save harmless Mitra from and against
any and all liabilities, damages, costs or expenses awarded
against or incurred or suffered by Mitra arising out of any
action or proceeding commenced or maintained by any third party
in respect of any acts or omissions of ACCESS in marketing or
distributing the Mitra Software.
7. Warranties.
7.1 Mitra warrants and agrees that:
7.1.1 Mitra has the full authority to grant the license and
rights set forth in this Agreement.
7.1.2 To the best of Mitra's knowledge, the documentation and
code of the Mitra Software have not been published under
circumstances which have caused loss of copyright
therein, and to the best of Mitra's knowledge, the
documentation and code of the Mitra Software do not
infringe upon any copyright or other proprietary right
of any third party.
CONFIDENTIAL TREATMENT
-6-
<PAGE>
7.1.3 Mitra is not aware of any claim of infringement of any
copyright or other proprietary right having been made or
pending against Mitra relative to the documentation or
code of the Mitra Software.
7.1.4 Mitra will, at its expense, defend against, hold ACCESS
harmless from, and pay any final judgment against ACCESS
or any ACCESS customer arising out of any claim that any
Mitra Software infringed a copyright, a patent or a
trade secret provided that (i) ACCESS notifies Mitra in
writing of such claim or action, and (ii) Mitra has sole
control of the defense and settlement of such claim or
action. In defending against such claim or action, Mitra
may, at its option, agree to any settlement in which
Mitra shall either (1) procure for ACCESS and all ACCESS
customers the right to continue using the Mitra
Software; and (2) modify or replace the Mitra Software
so that it no longer infringes, to the extent that the
exercise of such option does not result in a material,
adverse change in the operational characteristics of the
Mitra Software, and equivalent functions and performance
provided by Mitra remain following implementation of
such option. If Mitra concludes in its judgment that
none of the foregoing options is reasonable, Mitra may
remove the Mitra Software and any other components
supplied by Mitra rendered unusable as a result of such
removal and pay to ACCESS all damages arising therefrom,
including damages incurred by reason of ACCESS's
inability to perform its obligations to ACCESS
customers, but without diminishing Mitra's obligations
under this Section 7.1.4. Each party shall promptly
notify the other in the event that it becomes aware of a
claim covered by this Section 7.1.
7.2 Mitra warrants and agrees that the Mitra Software, when properly
installed and configured, will meet all applicable standards of
the American College of Radiology for diagnostic images and is
appropriate for diagnostic radiological examinations, and Mitra
has no knowledge of existing problems which would cause the
Mitra Software to fail to comply with the foregoing warranty.
7.3 The express warranties set forth in Sections 5.21, 7.1 and 7.2
are the only warranties made by Mitra with respect to the Mitra
software and other services provided by Mitra. Mitra makes no
other warranties expressed or implied or arising by custom or
trade usage and specifically makes no warranty of
merchantability.
CONFIDENTIAL TREATMENT
-7-
<PAGE>
8. Term and Termination.
8.1 This agreement shall have an initial term of three years,
subject to earlier termination as provided below.
8.2 If there shall be any material breach of this Agreement by
ACCESS which shall not be cured within 30 days of Mitra giving
written notice thereof to ACCESS, then at any time that such
breach shall be continuing Mitra may terminate this Agreement by
delivery of a separate written termination notice to ACCESS.
8.3 If there shall be any material breach of this Agreement by Mitra
which shall not be cured within 30 days of ACCESS giving notice
thereof to Mitra, then at any time that such breach shall be
continuing ACCESS may terminate this Agreement by delivery of a
separate written termination notice to Mitra.
8.4 If this Agreement shall be terminated under Section 8.2 or
Section 8.3, then:
8.4.1 ACCESS's right to develop application specific software
using Mitra Software and to furnish Mitra Software to
customers and to make copies of the Mitra Software shall
immediately terminate;
8.4.2 Mitra's maintenance and support obligations hereunder
shall immediately terminate;
8.4.3 ACCESS shall pay, within ten (10) days, all amounts
which have accrued to Mitra;
8.4.4 ACCESS shall immediately deliver the master copy of
Mitra Software and all other copies to Mitra at ACCESS's
expense; and
8.4.5 ACCESS shall provide a list of names and addresses of
customers who have entered into sublicenses with ACCESS
since the date of this Agreement.
8.5 Notwithstanding any termination or expiration of this Agreement,
any sublicense granted to an ACCESS customer prior to such
termination or expiration shall survive such termination or
expiration, and Sections 6.2, 6.3 and 7.1 shall survive any such
termination or expiration.
CONFIDENTIAL TREATMENT
-8-
<PAGE>
8.6 The remedies set forth in Sections 8.1 through 8.5 shall not be
exclusive, but shall be in addition to any other remedies
available to either party at law or in equity.
9. General.
9.1 Mitra agrees for one year from the date of this Agreement not to
itself incorporate wavelet-based compression in its acquisition
software.
9.2 Assignment:
9.2.1 Subject to ACCESS's right to grant sublicenses
hereunder, ACCESS may not assign this Agreement or any
rights hereunder without the prior written consent of
Mitra, except that, without such consent and upon notice
to Mitra, Mitra may assign all of its rights hereunder
to a corporation or other legal entity that acquires
substantially all of ACCESS's assets or where ACCESS is
consolidated or merged but then only upon the express
assumption by such transferee or its successor of the
obligations set forth in this Agreement.
9.2.2 Mitra may not assign this Agreement or any rights
hereunder without the prior written consent of ACCESS,
except that, without such consent and upon notice to
ACCESS, Mitra may assign all of its rights hereunder to
a corporation or other legal entity that acquires
substantially all of Mitra's assets or where Mitra is
consolidated or merged, but then only upon the express
assumption by such transferee of its successor of the
obligations set forth in this Agreement.
9.2.3 This Agreement is binding upon, and inures to the
benefit of, the successors and permitted assigns of the
parties.
9.3 The waiver or failure of either party to exercise in any respect
any right provided for in this Agreement shall not be deemed a
waiver of any further or future right hereunder.
9.4 The headings used in this Agreement are for convenience of
reference only and are not to be used in interpreting the
provisions of this Agreement.
9.5 If any provision of this Agreement is invalid or unenforceable
in any particular case, such case shall not invalidate or render
unenforceable any
CONFIDENTIAL TREATMENT
-9-
<PAGE>
other part of this Agreement. The Agreement shall simply be
construed as not containing the particular provision or
provisions held to be invalid or unenforceable to the extent of
the particular case, and the rights and obligations of the
parties hereto shall be construed accordingly.
9.6 This Agreement is effective when executed by both parties. This
Agreement may be executed in counterparts, each of which shall
constitute one and the same instrument.
9.7 Notices:
All notices provided for in this Agreement shall be in writing
or facsimile, addressed to the appropriate party at the
respective address set forth below or to such other then-current
address as is specified by notice, as follows:
(a) to Mitra: Mitra Imaging Inc.
115 Randall Drive
Waterloo, Ontario N2V 1C5 CANADA
Facsimile: (519) 746-3745
Attention: Eric Peterson
(b) to ACCESS: ACCESS Radiology Corporation
Bay Colony Corporate Center
950 Winter Street Waltham, MA 02154
Facsimile: (617) 890-0110
Attention: Howard Pinsky
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the first date set forth above.
ACCESS RADIOLOGY CORPORATION MITRA IMAGING INCORPORATED
By: /s/ Howard Pinsky By: /s/ Eric Petersen
----------------------------- ----------------------------
Name: Howard Pinsky Name: Eric Petersen
Vice President of Technology President
----------------------------- ----------------------------
Title Title
CONFIDENTIAL TREATMENT
-10-
<PAGE>
SCHEDULE A
----------
The MITRA TTY interface is intended to provide end-user functionality to a set
of functions employing a VT style interface. The functionality includes:
. the capability to manually delete a stud
. the capability to set the autopurge functions, including the software
which executes the autopurge of patient studies
. the capability to protect a study from autopurge and delete
. the ability to set up DICOM Query/Retrieval Class nodes
. the ability to manually route a study to a DICOM node demographics
. the ability of the above sorted by date and name
. any additional functionality provided in the interface not listed
above
The interface is relevant to the UNIX implementation of the DAP database.
CONFIDENTIAL TREATMENT
-11-
