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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 18, 1997
IMNET SYSTEMS, INC.
(Exact name of registrant as specified in charter)
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<S> <C> <C>
Delaware 0-26306 39-1730068
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
3015 Windward Plaza
Windward Fairways II
Alpharetta, Georgia 30202
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number including area code (770) 521-5600
Former address:
8601 Dunwoody Place
Atlanta, Georgia 30350
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 18, 1997, Registrant entered into an agreement with ISG
Technologies, Inc., a Canadian corporation ("ISG"), under which Registrant will
distribute certain of ISG's medical image visualization software products and
certain of ISG's medical surgical visualization products under a seven year
distribution agreement.
As consideration for the grant of license rights in the agreement,
Registrant will pay ISG $7.8 million (US), constituting both advance royalties
against the future sales of the ISG products and a payment for the right to
license certain of the ISG products without payment of any additional license
fees. The consideration given to acquire the license rights granted in the
agreement was determined as a result of arm's-length negotiations between
unrelated parties. The Registrant has made and will make payments due under
the Agreement out of its available working capitial.
The description of the agreement contained herein is qualified in its
entirety by reference to the Value-Added Reseller Agreement dated as of March
18, 1997 by and among Registrant and ISG attached hereto as Exhibit 10.37 and
incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements and Exhibits
Not applicable.
(b) Pro Forma Financial Information.
Not required pursuant to Article 11 of Rule S-X.
(c) Exhibits.
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EXHIBIT
NUMBER DESCRIPTION
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10.37* Value-Added Reseller Agreement dated as of March 18, 1997 among the
Registrant and ISG.
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* The Company has applied for confidential treatment of portions of this
Agreement. Accordingly, portions thereof have been omitted and filed
separately with the Securities and Exchange Commission.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IMNET SYSTEMS, INC.
Date: April 2, 1997 By: /s/ Raymond L. Brown
---------------------------------
Raymond L. Brown
Chief Financial Officer
(Principal Financial and
Accounting Officer)
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EXHIBIT INDEX
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EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
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10.37* Value-Added Reseller Agreement dated as of March 18, 1997
among the Registrant and ISG.
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* The Company has applied for confidential treatment of portions of this
Agreement. Accordingly, portions thereof have been omitted and filed
separately with the Securities and Exchange Commission.
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EXHIBIT 10.37
VALUE ADDED RESELLER AGREEMENT
BETWEEN
ISG TECHNOLOGIES INC.
AND
IMNET SYSTEMS, INC.
DATED AS OF THE 18TH DAY OF MARCH, 1997 AT 5:00 P.M.
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TABLE OF CONTENTS
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ARTICLE PAGE NO.
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1. DEFINITIONS.............................................................1
2. APPOINTMENT AND GRANT OF RIGHTS.........................................4
3. RESPONSIBILITIES OF IMNET...............................................5
4. RESPONSIBILITIES OF ISG.................................................5
5. WARRANTIES AND ACKNOWLEDGMENTS..........................................6
6. LEGAL RISK MANAGEMENT...................................................7
7. PROHIBITED USES.........................................................8
8. RELATIONSHIP OF THE PARTIES.............................................9
9. NEW PRODUCTS/UPDATES/MAINTENANCE........................................9
10. INTELLECTUAL PROPERTY RIGHTS AND PROTECTIONS...........................10
11. SOFTWARE ESCROW AGREEMENT..............................................11
12. NON-SOLICITATION OF EMPLOYEES..........................................12
13. TERM AND TERMINATION...................................................13
14. GENERAL................................................................14
15. DISPUTE RESOLUTION.....................................................15
16. SCHEDULES..............................................................16
SCHEDULE 1...........................................................17
ATTACHMENT 1.........................................................23
SCHEDULE 2...........................................................24
ATTACHMENT 1.........................................................27
SCHEDULE 3...........................................................29
ATTACHMENT 1.........................................................34
ATTACHMENT 2.........................................................36
SCHEDULE 4...........................................................44
EXHIBIT A............................................................52
EXHIBIT B............................................................53
EXHIBIT C............................................................56
EXHIBIT D............................................................57
EXHIBIT E............................................................58
EXHIBIT F............................................................59
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VALUE ADDED RESELLER AGREEMENT
DATED the ____________ day of _________, 1997
BETWEEN
ISG TECHNOLOGIES INC. ("ISG")
a corporation duly organized and existing under the laws
of the Province of Ontario, having offices at 6509
Airport Road, Mississauga, Ontario L4V 1S7
AND
IMNET SYSTEMS, INC. ("IMNET")
a corporation duly organized and existing under the laws
of the State of Delaware having offices at 3015
Windward Plaza, Windward Fairways II, Alpharetta,
Georgia, 30202
ISG is engaged in the development and commercialization of visual data
processing technology for medical imaging and other markets.
IMNET can add substantial value to ISG's technologies and successfully market
the resulting products.
ISG wishes to license specified software technologies to IMNET and to grant
IMNET the right, either directly or through defined distribution channels, to
resell licenses for those technologies as part of a value added solution to end
users on a world-wide basis.
ISG also wishes to grant to IMNET the right to resell certain of its[*], either
directly or through defined distribution channels, to end users in the
territory specified in the [*] Transaction Schedule attached hereto.
THE PARTIES, INTENDING TO BE LEGALLY BOUND, AGREE AS FOLLOWS:
1. DEFINITIONS
1.1. The following definitions will apply to this Agreement:
(a) "Additional Royalties" means the royalties payable to ISG by IMNET as
specified in Section 5 (c) of the Licensed Works Transaction Schedule.
(b) "Deposit Materials" means all of the components listed in Exhibit
B to the Software Escrow Agreement, attached hereto as Schedule 4,
which would enable an appropriately skilled technician to provide
Second Line Support, as defined herein.
(c) "End User Discounts" means, where applicable, either:
(i) an inducement offered to End Users to complete a sale
of the Licensed Works by discounting the List Price of the
Licensed Works; or
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(ii) the same discount percentage which IMNET, IMNET Listed
Business Partners or IMNET Distributors provide to End Users on
the sale of Solutions multiplied by the List Price of the
Licensed Works.
(d) "End User" means any person, firm or corporation which uses any
of the Products in accordance with the terms of this Agreement in the
normal course of its health care activities and not for further
distribution or resale.
(e) "First Line Support" means support provided by IMNET either
directly or through an IMNET Business Partner, or IMNET Distributor
for the Solutions licensed to End Users, including installation and
direct customer support of the Solutions with End-User education and
training, installation of "bug" fixes, and telephone "hotline" support
during regular business hours in the Territory, all as more
specifically defined in the Process Schedule.
(f) "IMNET" means, unless otherwise expressly stated, IMNET Systems,
Inc. and its current and future Affiliates. For greater certainty,
without limiting the generality of this definition, IMNET revenue
includes all revenues received by IMNET Affiliates.
(g) "IMNET Listed Business Partner" means only those arms-length
non-ISG Customers specifically listed in Exhibit C, provided that they
are, and continue to be, entities (i) with which IMNET has a valid,
ongoing supply agreement for resale to End Users; and (ii) which
purchase at least $USD100,000 worth of IMNET's Software Products (as
defined below) within each calendar year during the term of this
Agreement.
(h) "IMNET Channel Maintenance Revenue" means revenue received by an
IMNET Listed Business Partner or an IMNET Distributor for the
maintenance of the Products, less commissions or fees due to an IMNET
Listed Business Partner or IMNET Distributor.
(i) "IMNET Competitors" means those entities listed in Exhibit E.
(j) "IMNET Customer" means an IMNET Listed Business Partner, an IMNET
Distributor or an End User.
(k) "IMNET Direct Sales Revenue" means revenue from direct sales by
IMNET to End Users based on the List Price for the Licensed Works less
End User Discounts, but includes only those sales in which an IMNET
Listed Business Partner or an IMNET Distributor has not been involved.
(l) "IMNET Direct Maintenance Revenue" means revenue received
directly by IMNET for the maintenance of the Products, but does not
include maintenance revenue received by or through an IMNET Listed
Business Partner or an IMNET Distributor.
(m) "IMNET Channel Sales Revenue" means revenue from sales by (i) an
IMNET Listed Business Partner; (ii) an IMNET Distributor; or (iii)
IMNET on behalf of an IMNET Listed Business Partner or an IMNET
Distributor, based on the List Price for the Licensed Works, less End
User Discounts and less commissions or fees due to an IMNET Listed
Business Partner or an IMNET Distributor.
(n) "IMNET Distributor" means an entity which markets IMNET Products
and which is not IMNET or an IMNET Affiliate, an ISG Listed Customer,
an End User or an IMNET Listed Business Partner.
(o) "IMNET Gross Sales Revenue" includes both IMNET Direct Sales
Revenue and IMNET Channel Sales Revenue.
(p) "IMNET Gross Maintenance Revenue" includes both IMNET Direct
Maintenance Revenue and IMNET Channel Maintenance Revenue.
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(q) "IMNET Software Products" means IMNET's proprietary computer
programs described in Section 3 of the Licensed Works Transaction
Schedule, and such other products as may be added to the Schedule, as
agreed by the parties from time to time.
(r) "IMNET Affiliate" means an entity or corporation over which IMNET
holds not less than fifty percent (50%) of the issued and outstanding
shares in the capital of the entity or corporation.
(s) "ISG Listed Customer" means only those arms-length entities
specifically listed in Exhibit D provided that they are, and continue
to be, entities (i) that purchase or license technologies from ISG for
sublicensing to their customers under valid, ongoing supply
agreements; and (ii) which purchase at least $USD100,000 worth of ISG
technologies within each calendar year during the term of this
Agreement.
(t) "ISG Customer" means ISG Listed Customers and all other ISG
customers.
(u) "Licensed Works" means the ISG proprietary computer programs
described in Section 1 of the Licensed Works Transaction Schedule.
(v) "MedVision" means the IMNET proprietary software product which
performs the following functions:
(i) direct access to the complete data generated by medical
scanning devices, including nuclear, ultrasound, video, CT, MR,
and other medical images;
(ii) view and analyze nuclear, ultrasound, video, CT, MR,
and other medical images and patient data;
(iii) manipulate images, including window and level
functions, colour palettes, magnification and interpolation, and
cine animations;
(iv) support teleradiology through Store and Forward
package;
(v) print, copy, or export image files in standard format;
(w) "New Products" means any Update which is priced and charged
separately by ISG pursuant to Section 9.2 below.
(x) "Products" means the Licensed Works and, where applicable, the
Free-Hand Viewing Wand.
(y) "Process Schedule" means the schedule of technical, marketing,
administrative and accounting processes and procedures by which IMNET
and ISG's relationship will function under this Agreement, and which
is attached hereto as Schedule 3.
(z) "Second Line Support" means the technical and VRS R&D support to
be supplied by ISG to IMNET's First Line Support personnel, as more
specifically defined in the Process Schedule and Attachment 2.
(aa) "Solution" means a set of technologies which perform End User
functions and which combines (i) the Licensed Works running on ISG
approved hardware; and (ii) IMNET Software Products.
(bb) "Sub-license" means the right granted by IMNET pursuant to this
Agreement to any IMNET Customer to use or further sub-license the
Licensed Works within a Solution or where expressly allowed under this
Agreement, on a standalone basis.
(cc) "Licensed Works Transaction Schedule" means the schedule of
specific terms and conditions relating to licensing of the Licensed
Works by ISG to IMNET under the general terms and conditions of this
Agreement, which is attached hereto as Schedule 1 and which may be
revised by mutual agreement of the parties from time to time.
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(dd) "Updates" means Licensed Works error corrections and
enhancements.
(ee) [*] means the ISG proprietary computer hardware and software and
related parts described in Schedule 2, the [*] Transaction Schedule
and all software Updates thereto.
2. APPOINTMENT AND GRANT OF RIGHTS
2.1. Subject to all of the conditions set out below and the terms and
conditions set out in the Licensed Works Transaction Schedule, ISG hereby
appoints IMNET as an ISG value added reseller and grants to IMNET:
(a) a non-exclusive right to use the Licensed Works for development
purposes in order to incorporate the Licensed Works into the
Solutions; and
(b) a non-exclusive right, on the conditions specified in the
applicable Licensed Works Transaction Schedule, to purchase copies of
the Licensed Works under the terms specified in the Licensed Works
Transaction Schedule and to resell Sub-Licenses.
2.2 Subject to all of the conditions set out in the [*] Transaction Schedule,
ISG hereby appoints IMNET as an ISG value added reseller and grants to
IMNET a non-exclusive right to purchase from ISG and resell ISG's [*] and
its related parts to IMNET Customers.
2.3. Subject to Section 14.3 below, the rights granted to IMNET in Sections
2.1. and 2.2 above will be non-transferable except to the extent necessary
to enable IMNET to fulfill its obligations to IMNET Listed Business
Partners or IMNET Distributors under this Agreement. In addition, IMNET
hereby guarantees performance by any such Business Partner or Distributor
of all duties and obligations imposed herein upon IMNET.
2.4. No Sub-License may be granted pursuant to Paragraph 2.1(b) above unless
and until IMNET, its Distributors or its Business Partners, as applicable,
have incorporated into their own forms of license provisions protecting
ISG's interests to the following effect:
(a) provision restricting the End User's use of the Licensed Works to
its own internal business purposes;
(b) provision requiring the End User to take all reasonable
precautions to keep the Licensed Works and any related documentation
confidential;
(c) provision prohibiting the End User from reproducing (except for
backup copies), reverse engineering, translating or creating other
versions of the Licensed Works;
(d) provision acknowledging that the End User acquires only the right
to use the Licensed Works and does not acquire any rights of ownership
and that ownership of the copyright and all other intellectual
property rights in the Licensed Works remains exclusively with ISG;
and
(e) provision limiting ISG's liability to the End User to the same or
greater extent than the liability of IMNET to the End User is limited.
2.5. Notwithstanding the above and notwithstanding anything to the contrary
in this Agreement, ISG reserves the right, in its sole discretion, acting
reasonably, to withhold the rights to any IMNET Affiliate and,
consequently, the rights of use and distribution of the Products in any
site or country by an Affiliate unless and until, in ISG's sole
discretion:
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(a) IMNET expressly agrees in writing that ISG may claim and recover
from IMNET Systems, Inc. or its successors or assigns the same level
of damages as it would have been awarded, if that Affiliate had
actually signed this Agreement (such agreement being expressly made
here with respect to all IMNET Affiliates current as of the date of
this Agreement); or
(b) (i) The Affiliate executes an agreement with ISG in exactly the
same form as this Agreement; and
(ii) ISG is reasonably satisfied that its rights under such
agreement would be enforceable against that particular Affiliate
giving due regard to such matters as the jurisdiction within
which that Affiliate may be domiciled or carrying on business.
2.6. Notwithstanding anything to the contrary in this Agreement, if an ISG
Customer becomes an IMNET Affiliate and good faith negotiations of a new
relationship amongst the Affiliate, IMNET and ISG, fail, ISG shall have
the right to decide whether it shall continue to supply that Affiliate
under the current terms of its supply agreement with that Affiliate or
as part of IMNET, as more broadly defined under this Agreement.
3. RESPONSIBILITIES OF IMNET
3.1. Without limiting IMNET's other obligations hereunder, IMNET, its Business
Partners, or Distributors, as applicable, will:
(a) Except as otherwise expressly stated elsewhere in this Agreement,
provide First Line Support for all Solutions.
(b) Only represent the performance of the Licensed Works as part of
the Solutions as set forth in the most current technical literature or
specifications provided to IMNET by ISG from time to time.
(c) Provide ISG with copies of any literature or manuals reproduced
by IMNET from those materials referred to in Paragraph 4.1 (a) below.
(d) Provide ISG with written reports in accordance with the
procedures set out in the Process Schedule.
(e) Purchase locally at its own expense, supply and install (or cause
to be installed), all necessary telecommunications facilities and
services for remote diagnosis and service of the Solutions.
(f) Obtain any governmental approvals of the Solutions in accordance
with the procedures set out in the Process Schedule.
(g) Record all Problem Severity Levels (as defined in the Process
Schedule) in accordance with the procedures set out in the Process
Schedule.
(h) Maintain accurate records of the number of Sub-licenses sold to
End Users, as well as the names and addresses of all such End Users,
in accordance with the reporting procedure set out in the Process
Schedule. ISG may audit IMNET's records in accordance with the audit
rights set out in the Process Schedule.
4. RESPONSIBILITIES OF ISG
4.1. Without limiting ISG's other obligations hereunder, ISG will:
(a) Provide IMNET, at no charge, with hard and soft copies of
technical, instructional. marketing and operational manuals for the
Products and IMNET may reproduce such materials, at IMNET's cost.
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(b) Notify IMNET if any Problem Severity Level 1 or Problem Severity
Level 2 (as defined in the Process Schedule) complaints or problems
are reported by End Users or ISG utilizing the Licensed Works.
(c) Provide training for the standard prices set out in Exhibit F and
provide Second Line Support, where End Users are currently paying for
support services under maintenance and support agreements, for the
amount payable by IMNET to ISG in accordance with the maintenance
revenue split specified in Section 9.7 below.
4.2. Whereas it is not a contractual obligation of ISG to provide First Line
Support, if IMNET asks and ISG agrees, ISG will provide First Line Support
at the standard prices set out in Exhibit F.
5. WARRANTIES AND ACKNOWLEDGMENTS
5.1. Each party represents and warrants to the other that:
(a) the entering into of this Agreement will not result in a breach
of or constitute a default under any of the terms and provisions of
any agreement, either written or oral, to which it is a party;
(b) it has the right and full corporate power to enter into this
Agreement;
(c) this Agreement is a legal, valid and binding obligation and is
enforceable against it in accordance with its terms; and
(d) it will discharge all of its duties and obligations hereunder in
a proper, efficient and business-like manner using persons with skills
and experience appropriate to their function.
5.2. To ISG's knowledge:
(a) The Licensed Works, when used in accordance with ISG approved
hardware and configurations, have all required approvals,
accreditation, and clearances for distribution and use within the
United States. ISG shall exercise its best efforts to maintain such
approvals, accreditation, and clearances and obtain any additional
ones which may be required from time to time to continue distribution
and use in the United States. ISG shall keep IMNET informed of the
status of all US and Canadian approvals, accreditation, and
clearances.
(b) The articles and the Products comprising each shipment, license
or other delivery made by ISG to, or on the order of, IMNET or any
IMNET Customer pursuant to this Agreement, as of the date of such
shipment, license or delivery are or will not be adulterated or
misbranded within the meaning of the Federal Food, Drug and Cosmetic
Act ("FDA"), and are or will not be an article which may not, under
the provisions of such Act, be introduced into interstate commerce.
(c) The articles and the Products comprising each shipment, license
or other delivery made by ISG to, or on the order of, IMNET or any
IMNET Customer pursuant to this Agreement, as of the date of this
Agreement, meet the then-current U.S. Food and Drug Administration
requirements when such requirements become applicable. By the
deadline of June 1, 1998 set by the FDA, such articles and Products
will meet the mandated requirements of the Medical Devices; Current
Food Manufacturing Practice (CGMP) Final Rule; Quality System
Regulation of the Food and Drug Administration.
5.3. ISG warrants that it owns all right, title and interest in the Products
or otherwise has the right to grant the rights granted by it to IMNET
hereunder, and that the grant of rights by ISG does not infringe upon the
rights of any third party arising from any omission by ISG.
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5.4. IMNET warrants that it will file the appropriate registrations with the
FDA for the distribution and licensing of the Licensed Works as part of
Solutions in the United States prior to marketing the Licensed Works in
the United States, and will file the appropriate FDA forms referencing
ISG's 510(k) clearance numbers for the Licensed Works. IMNET will provide
copies of the registration forms filed with the FDA to ISG.
5.5. IMNET warrants that it will file the appropriate registrations with the
FDA for the sale of the Free-Hand Viewing Wand in the United States prior
to marketing the Free-Hand Viewing Wand, and will file the appropriate FDA
forms referencing the Free-Hand Viewing Wand's approval number(s). IMNET
will provide copies of the registration forms filed with the FDA to ISG.
5.6. IMNET warrants that, to the best of its knowledge, as of the date of this
Agreement, except as expressly stated herein, none of its Business
Partners or Distributors are or have given notice of their intention to
market products which are competitive with any IMNET products, and IMNET
will notify ISG of any such occurrence in the future. ISG acknowledges
that IDX Systems Corporation markets IDXView and that Cerner Corp. markets
MRNet and that these technologies are competitive with the IMNET Software
Products.
5.7. Whereas ISG warrants, on a standalone basis, the performance of the
Licensed Works on approved hardware and configurations, ISG will not be
held responsible for any warranties or other claims made by IMNET with
respect to the performance of any of the Licensed Works within Solutions.
IMNET will indemnify and hold ISG harmless from any claim or action
whatsoever arising from such warranties or claims.
5.8. For the purposes of this Section 5.8, the definition of "Products" will
not include (i) Products that have been modified by IMNET without ISG's
consent; (ii) Products that have been modified by any third party; or
(iii) Products that are operated on equipment and/or with third party
operating systems that do not conform to ISG specifications. ISG warrants
that the Products will conform in all material respects to the applicable
ISG documentation in effect at the time of delivery for a period of ninety
(90) days from delivery to IMNET. During the warranty period, ISG's sole
responsibility and liability hereunder shall be to use reasonable efforts
to remedy any such reproducible non-conformance which is reported to ISG
in writing or by electronic mail according to the procedure described in
Schedule 3. ISG will advise IMNET as to when any such reported problem
can be fixed and released to IMNET. ISG does not warrant that the use of
the Products will be uninterrupted or error free. Except as set forth
above, the Products are licensed or sold "AS IS".
5.9. ISG warrants that it will co-operate, in all respects, with any
statutorily required audits which IMNET must make with respect its
suppliers' conformance to the requirements of the Medical Devices; Current
Good Manufacturing Practice (CGMP) Final Rule; Quality System Regulation
of the Food and Drug Administration; provided that IMNET provides ISG with
written notice as soon as possible prior to any such audit.
6. LEGAL RISK MANAGEMENT
6.1 The parties have agreed that the following allocations of risks and
liability are fair and reasonable under the terms of their relationship:
(a) THE OBLIGATIONS OF ISG EXPRESSLY STATED IN THIS AGREEMENT ARE IN
LIEU OF ALL OTHER WARRANTIES OR CONDITIONS EXPRESSED OR IMPLIED.
WITHOUT LIMITATION, TO THE FULLEST EXTENT ALLOWABLE BY LAW, THIS
EXCLUSION OF ALL OTHER WARRANTIES AND CONDITIONS EXTENDS TO IMPLIED
WARRANTIES OR CONDITIONS OF SATISFACTORY QUALITY, MERCHANTABILITY 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.
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(b) IMNET AGREES THAT THE LIABILITY OF ISG, UNDER ANY THEORY OF LAW
OR EQUITY, INCLUDING WITHOUT LIMITATION, FOR BREACH OF CONTRACT,
NEGLIGENCE OR OTHERWISE, ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT OR THE INTENDED FULFILLMENT OF ANY OF ISG'S OBLIGATIONS
UNDER THIS AGREEMENT, IS, SUBJECT TO SECTION 10.8 BELOW, LIMITED TO
THE AMOUNT REQUIRED TO REIMBURSE IMNET FOR DIRECT MONEY DAMAGES NOT TO
EXCEED THE AMOUNT OF "INSURANCE COVERAGE" AS SET OUT IN THE LICENSED
WORKS TRANSACTION SCHEDULE.
(c) NEITHER PARTY WILL HAVE ANY LIABILITY WHATSOEVER TO THE OTHER
PARTY FOR ANY SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, LOSS OF
PROFITS, ANTICIPATED REVENUE, SAVINGS OR GOODWILL, OR OTHER ECONOMIC
LOSS.
(d) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, ISG'S
LIABILITY TO IMNET UNDER THIS AGREEMENT FOR DEATH AND PERSONAL INJURY
CAUSED BY THE NEGLIGENCE OF ISG IS NOT TO BE LIMITED. ISG'S LIABILITY
FOR DIRECT DAMAGE TO IMNET'S PROPERTY WILL BE LIMITED TO THE AMOUNT OF
INSURANCE COVERAGE SET OUT IN THE LICENSED WORKS TRANSACTION SCHEDULE
AND ITS LIABILITY IN RESPECT OF ANY CLAIM TO THE EXTENT ARISING OUT OF
AN ACT OF WILLFUL MISCONDUCT, FRAUD, GROSS NEGLIGENCE OR RECKLESSNESS
OF ISG IS NOT TO BE EXCLUDED OR LIMITED.
7. PROHIBITED USES
7.1. The parties recognize that the primary defences against death or injury
during surgical, medical life support or other potentially hazardous
applications will continue to be the skill, knowledge and experience of
the users of the Products. The Products are not designed to substitute
for these defences. Use of the Products as such a substitute is strictly
prohibited.
7.2. The Licensed Works have only been designed, tested and approved for use
with the DICOM connections hardware and other configurations specified in
the DICOM Validation Status Reports produced by ISG as updated from time
to time. Use with any other connection is strictly prohibited.
7.3. IMNET covenants and agrees that it shall not use, market, distribute or
resell the Products for the prohibited uses in Sections 7.1 and 7.2 above.
IMNET further covenants and agrees that IMNET Customers will be provided,
either directly or indirectly as a contractual obligation between IMNET
and its Distributors or Listed Business Partners, with a prominent notice,
in the local language of the End Users, which expressly states the
prohibited uses as set forth in Sections 7.1 and 7.2 above.
7.4. (a) IMNET will indemnify and hold harmless ISG and its officers,
directors, shareholders, employees, agents and counsel and
their respective successors and assigns, from and against all
liabilities, losses, claims, demands, deficiencies, judgments, or
expenses of any kind or nature (including, without limitation, amounts
paid in settlement, court costs and reasonable fees and disbursements
of legal counsel (on a solicitor and his or her own client basis, if
in Canada) incurred in connection with any litigation, investigation,
claim or proceedings or any advice rendered in connection therewith)
or any damages of any kind or nature (including, without limitation,
direct, indirect, special or consequential damages) incurred by ISG
arising out of or by reason of any suit, cause of action, claim,
arbitration, investigation or settlement, consent decree or other
proceeding (referred to as an "Indemnity Proceeding" for the purposes
of this Section 7.4) which arise out of a breach of the covenants
contained in Section 7.3. This indemnification shall cover all costs
and expenses of ISG in
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connection with any deposition or compliance with any subpoena
(including any subpoena requesting production of documents).
(b) This indemnification shall apply to any Indemnity Proceeding
arising during the pendancy of any bankruptcy proceeding filed by or
against IMNET.
(c) ISG may conduct its own investigation in defence of, and may
formulate its own strategy with respect to, any Indemnity Proceeding
covered by this Section 7.4 and, as provided above, all costs and
expenses incurred by ISG shall be reimbursed by IMNET if it is
actually and finally determined, according to the dispute mechanism
set out hereunder that ISG is entitled to indemnification hereunder.
No action taken by legal counsel chosen by ISG in investigating or
defending any such Indemnity Proceeding shall vitiate or in any way
impair the obligations and duties of IMNET hereunder to indemnify and
hold ISG harmless; provided, however, that:
(i) if IMNET is required to indemnify ISG pursuant hereto;
and
(ii) IMNET has provided evidence reasonably satisfactory to
ISG that IMNET has the financial capacity to reimburse ISG for
any amount paid by ISG with respect to such Indemnity Proceeding,
ISG shall not settle or compromise any such Indemnity Proceeding
without the prior written consent of IMNET (which consent shall
not be unreasonably withheld or delayed).
(f) If and to the extent that the obligations of IMNET hereunder are
unenforceable for any reason, IMNET hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which
is permissible under the law.
8. RELATIONSHIP OF THE PARTIES
8.1. IMNET and ISG are independent contractors and separate legal entities.
No other legal relationship is intended or implied.
8.2. The parties will not be responsible for the acts of the other party or
its agent or employees and the parties will not assume or create any
obligation in the name of or on behalf of the other party.
9. NEW PRODUCTS/UPDATES/MAINTENANCE
9.1. In the event that ISG makes New Products generally available to ISG
Customers during the term of this Agreement, ISG and IMNET shall
negotiate in good faith for the inclusion of such New Products under the
terms of this Agreement, provided that such New Products will be
separately priced by ISG.
9.2. ISG will routinely provide to IMNET, at no charge during the term of this
Agreement, one copy of all Updates, except that New Products shall not be
included as Updates within this Section. ISG will consult with IMNET, as
early as possible, in the identification of New Products and the defining
of the prices for these New Products.
9.3. IMNET will provide Updates only to End Users which are currently paying
for support services under maintenance and support agreements.
9.4. ISG or IMNET will provide maintenance services for the [*] as specified
in the [*] Transaction Schedule.
9.5. If ISG discontinues delivery of any of the Licensed Works, ISG will give
IMNET [*] notice of such discontinuation, provided that such
discontinuance will in no way limit or terminate ISG's obligation to
provide Second Line Support with respect to Licensed Works copies which
IMNET has or may Sublicense pursuant to this Agreement and within the term
of this Agreement.
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9.6. ISG will have no obligation to support any Licensed Works that do not
incorporate the most recent GMA Update release, or the one immediately
prior to that GMA release; provided that ISG will continue to supply
bug-fixes for Severity Level 1 and Severity Level 2 Problems on Licensed
Works containing earlier GMA releases for a period of no more than [*]
years from the release date and only where End Users are continuing to
use the earlier GMA releases as a consequence of the End User's refusal
to acquire a substantial amount of new hardware or technology as
necessitated by the new GMA releases.
9.7. During the term of this Agreement, the IMNET Gross Maintenance Revenues
will be shared [*]by IMNET and ISG. In the event of the expiry or
termination of this Agreement, except for ISG's breach of its support
obligations under Paragraph 4.1(c), ISG will provide all First and Second
Line Support required by IMNET Customers. ISG will be entitled to
one-hundred percent (100%) of all IMNET Gross Maintenance Revenues paid
by End Users for providing such service in accordance with the terms set
out in the Licensed Works Transaction Schedule.
10. INTELLECTUAL PROPERTY RIGHTS AND PROTECTIONS
10.1. IMNET is exclusively responsible for the management, and control of
copies of the Licensed Works. Except as permitted pursuant to Paragraph
2.1(b) above, IMNET may not transfer or disclose any copies to any third
party without the express permission of ISG.
10.2. In addition to copyright notices prescribed from time to time by
international convention, any copies of the Solutions made by IMNET
will bear the following printed or typewritten legend in both English
and the local language equivalents, prominently displayed in the user
documentation, on any computer diskettes, packages containing any
computer diskettes, and on the computer screen when the Licensed Works
start up:
"Portions copyright (C) 19 ___, ISG Technologies Inc.
All rights reserved and unauthorized use, reproduction,
or disclosure is prohibited."
IMNET will, to the extent possible under IMNET's pre-existing
contracts, display ISG's name/logo within the Solutions automatically
when the Licensed Works start up.
10.3. Ownership of the copyright and all other intellectual property rights in
the Products, including but not limited to translations, will remain in
the name of ISG or a third party, as indicated by ISG. ISG will inform
IMNET from time to time, by notice, of the name which is appropriate for
any copyright notice pursuant to Section 14.5 below.
10.4. Except as otherwise set out in the Licensed Works Transaction Schedule
or under a separate development agreement, which shall take precedence,
ownership of the copyright and all other intellectual property rights in
the Solutions, except for the Licensed Works, including but not limited
to translations, will remain in the name of IMNET.
10.5. ISG will enforce its rights against infringers of ISG's copyrights or
patents, to the extent reasonable under the circumstances, either on
its own volition or upon written demand and request to do so from IMNET.
If ISG institutes the proceedings to enforce rights against an alleged
infringer upon the written demand of IMNET, and such action results in a
decision adverse to ISG, then IMNET will reimburse ISG for the costs of
such action, including reasonable attorney's fees.
10.6. ISG will, at its own expense, defend any such action or claim and IMNET
will, at its own expense, assist in the defense, provided that, so long
as ISG can demonstrate sufficient financial resources, ISG will control
the defense and all negotiations related to the settlement of any such
claim and further provided that any settlement intended to bind IMNET
will not be final without IMNET's written consent, which will not be
unreasonably withheld.
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10.7. ISG shall indemnify, defend, and hold IMNET harmless from any claims,
demands, liabilities, losses, damages or judgments, including all
reasonable costs and expenses related thereto, directly resulting from
any claimed infringement or violation of any United States copyright or
patent, or trade secret with respect to the Products, but only if the
Products are used in accordance with the documentation and the
specifications provided by ISG, and IMNET is not in breach of this
Agreement. Following the final, non-appealable decision by a court of
competent jurisdiction that the Products infringe any such third party
copyright, patent, or trade secret, ISG shall in its sole discretion:
(a) Procure for IMNET the right to continue to use, distribute, and
sell the Products at no additional expense to IMNET; or
(b) Provide IMNET with a non-infringing version of the Products with
substantially similar functionality; or
(c) [*].
Prior to such final non-appealable decision, ISG, may at its discretion,
take one of the actions specified above.
10.8. Notwithstanding Paragraph 6.1(b) above, ISG's liability solely and
exclusively with respect to Paragraph 10.7(c) above is limited to the
amount required to reimburse IMNET for direct damages not to exceed the
total amount paid by IMNET to ISG at any time under the terms of this
Agreement; provided that in the event sales reach the Excess Sale Target
(as defined in sub-paragraph 5(c)(i) of the Licensed Works Transaction
Schedule) this Section 10.8 will be of no further force or effect.
10.9. Notwithstanding the above Sections and Paragraphs of this Article 10,
ISG is under an obligation to indemnify and hold IMNET harmless, and
take any other action under the above Sections and Paragraphs only if the
following conditions are satisfied:
(a) ISG is notified of the suit or claim by IMNET promptly enough to
defend itself adequately and has been furnished by IMNET with a copy
of each communication, notice, or other action relating to said
claims;
(b) ISG has the right to assume sole authority to conduct the trial
or settlement of such claim or any negotiation related thereto at
ISG's expense; and
(c) IMNET has provided information, assistance and other cooperation
as reasonably requested by ISG in connection with such claim or
suit.
10.10. Notwithstanding the above Sections and Paragraphs of this Article 10, if
the Products are determined by a court of competent jurisdiction to be
infringing only as a result of being a component of an infringing
Solution, and not because the Products are in and of themselves
infringing, (i) ISG will be under no obligation to indemnify and hold
IMNET harmless; and (ii) IMNET will reimburse ISG immediately for any
expenses incurred by ISG in defending any such action or claim in
accordance with Section 10.6 above.
10.11. Notwithstanding the foregoing, ISG will have no liability to IMNET with
respect to any claim of patent or copyright infringement to the extent
that the claim is based upon (i) the combination of the Products with
machines, systems or devices not approved by ISG; or (ii) the unapproved
modification by IMNET of the Products; or (iii) the use of the Products
not in accordance with the user documentation.
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11. SOFTWARE ESCROW AGREEMENT
11.1. ISG shall place the Deposit Materials it has the authority to so
deliver, with Fort Knox Escrow Services, Inc. (the "Escrow Agent").
The Escrow Agent shall be authorized to release the Deposit Materials to
IMNET if and when IMNET is deemed to have the right thereto as determined
below.
11.2. Provided that IMNET is not then in default under the terms of this
Agreement, the Escrow Agent shall provide to IMNET the Deposit
Materials upon notification by IMNET to the Escrow Agent, with a copy to
ISG, of the occurrence of any one (1) or more of the following events
(each one a "Release Condition"):
(a) The undisputed failure by ISG, following not less than ninety
(90) days written notice from IMNET, clearly indicating the
nature of default, to maintain the Licensed Works and such failure
constitutes a Problem Severity Level 1 or Problem Severity Level 2,
as defined in the Process Schedule; or if such failure is disputed,
the notice must be supplemented by an arbitrated decision as set out
in Article 15 below, or a court order resolving the dispute; or
(b) A case shall be commenced by or against ISG under the United
States Bankruptcy Act, or the Canadian Bankruptcy and
Insolvency Act, and such case is not discharged within ninety (90)
days from commencement.
11.3 Upon taking possession of the Deposit Materials due to an occurrence of a
Release Condition, IMNET agrees that such source code shall be subject
to the restriction on use, transfer, sales and reproduction placed on the
Licensed Works itself by this Agreement.
11.4 The Software Escrow Agreement, which is attached hereto as Schedule 4,
will commence on the date of signing this Agreement and expire upon the
termination of this Agreement. IMNET's Business Partners have the right
to extend this same escrow protection through IMNET.
11.5 IMNET shall use the Deposit Materials only for what would otherwise be
the obligations of ISG to provide Second Line Support of the Licensed
Works licensed or purchased from ISG by IMNET and sublicensed to IMNET's
Customers. It is expressly understood that this Software Escrow
Agreement pertains to the right to use the Deposit Materials and that no
rights to ownership of the Deposit Materials pass from ISG to IMNET. It
is also expressly understood that the Deposit Materials are confidential
and secret assets of ISG and the Deposit Materials will be secured by
IMNET and not reproduced or copied, or be made available to any other
party, except in accordance with the provisions of an agreement for
escrow between IMNET and any such third party. It is expressly
understood that the Deposit Materials will either be immediately returned
to ISG or destroyed once the default which gave IMNET access to the
Deposit Materials is removed. UNDER NO CIRCUMSTANCES IS THE SOURCE CODE
TO BE SOLD, TRANSFERRED OR COPIED BY IMNET, ITS DISTRIBUTORS OR ITS
BUSINESS PARTNERS
12. NON-SOLICITATION OF EMPLOYEES
12.1 Neither IMNET nor ISG shall solicit the service of, or hire software
developers, product managers, sales personnel or customer service
support personnel, who are involved in any manner whatsoever with the
Products, (the "Restricted Employee(s)") of the other party during the
term of this Agreement or for a period of one (1) year after the
expiration of the term of this Agreement without the other party's
consent. Nothing in this Section shall prevent either party from
offering employment to any Restricted Employee of the other party who
responds to a publicly made advertisement of employment, provided that
such advertisement is not an attempt to solicit, entice, or induce any
particular Restricted Employee of the other party to seek employment with
the advertising party or otherwise circumvent the advertising party's
obligations hereunder.
12.2. It is acknowledged between the parties that in view of the recruitment
difficulties, costs of training staff in the computer industry and the
highly sensitive nature of intellectual property rights of both parties,
the
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restriction set out in Section 12.1 above is reasonable and it is the
considered view of both parties that such restriction is not an
unreasonable restraint of trade of any affected employee, agent or
consultant.
12.3. The parties hereby acknowledge and expressly agree that any breach by
either of them under this Article 12 would cause each of them
irreparable harm for which damages would not be an adequate remedy.
Therefore, the parties hereby agree that in the event of any breach under
this Article 12 by either of them, either party shall have the right to
seek injunctive relief against continuing or further breach by the other,
without the necessity of proof of actual damages. This right to seek
injunctive relief without necessity of proof of damage shall be in
addition to any other right which either party may have under this
Agreement, or otherwise in law or in equity.
13. TERM AND TERMINATION
13.1 This Agreement will commence on the date first noted above, and will
remain in effect for the Term specified in the applicable Licensed
Works Transaction Schedule, or until explicitly terminated pursuant to
the provisions of this Agreement.
13.2. This Agreement will be terminated immediately, without further notice,
should either party hereto become insolvent; file a petition in
bankruptcy; file a petition seeking any re-organization, arrangement,
composition or similar relief, or take any action of similar intent under
any law regarding insolvency or relief for debtors; or make an assignment
for the benefit of creditors or similar undertaking; or if a receiver,
trustee, or similar officer is appointed for the business or property of
the party, but only in circumstances that have a material detrimental
affect on the other party. In such instance, all amounts owing and
outstanding under this Agreement will become due and payable immediately,
with interest thereon accruing at prime rate of interest of Citibank N.A.
as published daily in the Wall Street Journal, plus two per cent (2%),
computed on an annual basis compounded annually.
13.3. This Agreement may be terminated by ISG, effective upon delivery of
written notice of termination, if:
(a) IMNET defaults in any payment due to ISG, and such default has
continued unremedied for a period of thirty (30) days after
written notice of such default; or
(b) IMNET fails to perform or breaches any obligation, warranty,
duty, restrictive covenant, representation or responsibility
herein and such failure has continued unremedied for a period of
thirty (30) days after written notice of such failure.
In lieu of such termination and without prejudicing any of its rights
hereunder, ISG will have the right to modify IMNET's Territory and
IMNET's pricing/discounts, which modification will then become part of
this Agreement. IMNET has the right to reject such modification and agree
to ISG's termination of the Agreement.
13.4. In the event of termination of this Agreement by ISG, in whole or in
part, for any reason, ISG may pursue any remedy available to it at law or
in equity, and IMNET will:
(a) promptly cease all further activities to represent, quote, sell,
lease, or rent any Products;
(b) promptly return to ISG any and all Products, documentation or
data originally provided by ISG and which are the property of ISG;
and
(c) pay all undisputed outstanding invoices or amounts owing to ISG
which will become immediately due and payable on notice of
termination.
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13.5. This Agreement may be terminated by IMNET if ISG fails to perform or
breaches any obligation, warranty, duty, restrictive covenant,
representation or responsibility herein and such failure has continued
unremedied for a period of thirty (30) days after written notice of such
failure.
13.6 In lieu of such termination and without prejudicing any of its rights
hereunder, IMNET may continue this Agreement, either without requiring
additional assurances, or on receipt of appropriate written agreement of
assumption or continuation of ISG's obligations and liabilities hereunder
from any successor entity. In the event of termination of this Agreement
by IMNET, IMNET may pursue any remedy available to it at law or in
equity.
13.7. Neither party will be entitled to compensation upon termination of this
Agreement for their efforts in promoting or creating good will for the
other party, or for any of their trademarks.
14. GENERAL
14.1. This Agreement is to be governed by and construed in all respects in
accordance with the laws of the State of Georgia (but not the choice of
law), except for any interpretation that is needed of ISG or ISG's
licensors' patents, in which case patents are to be interpreted in
accordance with the laws of the country in which the patent was granted
or the patent application is pending. The parties hereby expressly waive
any right they may have to trial by jury and agree that any proceeding
shall be only to the court sitting without a jury.
14.2. The parties agree that any dispute not subject to the dispute resolution
process in Article 15 below, arising out of or related to this
Agreement shall be resolved by non-jury litigation filed in the U.S.
District Court for the Northern District of Georgia.
14.3. On giving written notice to the other, ISG or IMNET may assign all of
its rights and delegate all of its duties hereunder to a corporation
acquiring, or taking an interest in, at least that portion of its
business, patents and properties to which this Agreement relates, or to
any corporate successor by way of merger, consolidation, or
reorganization, provided that such assignee first delivers to the other
party a reasonable and adequate written statement that the assignee
assumes all of the assigning party's obligations in respect of this
Agreement and the assignor remains liable for any breach of its or the
assignee's obligations. Except as otherwise provided in this Agreement,
neither party will have the right to assign or transfer any of its
rights or to delegate any of its duties under this Agreement without the
prior written consent of the other party. Any attempted assignment or
transfer without such consent will be void and will, at the option of the
non-assigning party, automatically terminate all rights of the assigning
party under this Agreement.
14.4. This Agreement constitutes the entire agreement between the parties
pertaining to its subject matter. There are no warranties, conditions,
or representations (including any that may be implied by statute) and
there are no agreements in connection with the subject matter except as
specifically set forth or referred to in this Agreement. No reliance is
placed on any warranty, representation, opinion, advice or assertion of
fact made by any party or its directors, officers, employees or agents,
to any other party or its directors, officers, employees or agents,
except to the extent that the same has been reduced to writing and
included as a term of this Agreement. Accordingly, there will be no
liability, in tort, contract, or any other legal or equitable theory,
assessed in relation to any such warranty, representation, opinion advice
or assertion of fact, except to the extent aforesaid. This Section will
not operate to exclude any liability the exclusion of which would be
unreasonable.
14.5. Any notices provided for under this Agreement will be deemed received:
(i) when delivered in person; or
(ii) on the first business day following electronic transmission by
facsimile or similar means provided that written confirmation is
either received by facsimile or received within five (5) days; or
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(iii) five (5) days after being mailed by registered mail, postage
prepaid and addressed to the party to receive such notice at
the address first set out above, or to such different address as
either party may designate from time to time in writing to the
other pursuant to this Section.
14.6. The Confidentiality Agreement referenced in the Licensed Works
Transaction Schedule will apply to the subject matter of this Agreement
and is incorporated into this Agreement by this reference.
14.7. This Agreement may be executed in several counterparts. It is not
necessary that each of the parties named below sign all or any one of the
counterparts, but each party must sign at least one counterpart for this
Agreement to be effective.
14.8. The execution and delivery of this Agreement by either party hereto by
facsimile transmission will constitute valid execution and delivery of
this Agreement.
14.9. Neither party will disclose the details of this Agreement or make any
public announcement pertaining thereto unless and until such
announcements have been discussed, agreed and coordinated by the parties.
14.10. Articles 5, 6, 7, 10, 12 and this Section 14.8 will survive any
termination of this Agreement.
15. DISPUTE RESOLUTION
<TABLE>
<S> <C>
15.1. Informal Resolution.
All controversies or claims arising out of or relating to this
Agreement, or any breach thereof, shall be finally settled amicably, if
possible, by negotiation between the parties. If any such dispute is
not so settled within thirty (30) business days after it has arisen, any
party may, by the giving of written notice (referred to as "Notice" for
the purposes of this Article 15) making express reference to this
Article 15, cause the dispute to be referred to the attention of their
respective Chief Executive Officers (or their respective designees).
The Chief Executive Officers or their designees shall hold a meeting
within ten (10) business days following the giving of the Notice at a
place to be agreed upon by the parties.
15.2. Formal Resolution.
</TABLE>
(a) Arbitration.
In the event the Parties are unsuccessful in resolving any
controversy or claim arising out of or relating to this Agreement,
or the breach thereof, within twenty (20) business days after the
date of the Notice, the Parties agree to submit to arbitration in
Atlanta, Georgia, administered by the American Arbitration
Association under its then-current Commercial Arbitration Rules
before a single Arbitrator, who shall be experienced in the
software industry and appointed by the American Arbitration
Association. In any such arbitration, the parties agree that any
party may conduct discovery and depositions shall be permitted at
the discretion of the Arbitrator; provided that:
(i) the Chief Executive Officer of any party shall not be
deposed;
(ii) no party shall conduct more than three (3) depositions;
(iii) any deposition shall not exceed three (3) hours in length;
and
(iv) all depositions shall be taken in the city of the principal
office of the deposed.
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Furthermore, the parties agree that the Arbitrator shall
provide all parties concerned with a written decision. Except as
otherwise provided herein, each party to the arbitration is to pay
an equal part of all costs, including any deposits, associated with
the arbitration, except that each party shall be responsible for its
own attorneys' fees.
(b) Final and Binding Determination.
The Parties agree that any determinations of such Arbitrator
shall be final and binding upon the Parties to the arbitration,
provided that no punitive damages may be awarded, and judgment upon
the award rendered by the Arbitrator may be entered in any court
having jurisdiction, or application may be made to such court for a
judicial acceptance of the award or an order of enforcement, as the
case may be. The Arbitrator shall set forth with specificity the
grounds for the decision in the award in writing.
16. SCHEDULES
16.1. The following are the schedules/exhibits to this Agreement and are
deemed to be a part of this Agreement:
<TABLE>
<S> <C> <C>
Schedule 1 - Licensed Works Transaction Schedule
Attachment 1 - Licensed Works Submittal Form
Schedule 2 - [*] Transaction Schedule
Attachment 1 - [*] Purchase Order
Schedule 3 - Licensed Works Process Schedule
Attachment 1 - ISG Contact List
Attachment 2 - Second Line Support Terms
Schedule 4 - Software Escrow Agreement
Exhibit A - ISG Technologies Inc. Viewing and Reading Stations (VRS)
Release 2.1 Marketing Specifications Document and ISG Technologies Inc.
Viewing and Reading Stations on NT (VRS-NT) Release 1.0 Marketing
Specifications Document v1.1
Exhibit B - List of HIS/RIS Companies
Exhibit C - IMNET Listed Business Partners
Exhibit D - ISG Listed Customers
Exhibit E - IMNET Competitors
Exhibit F - ISG Training and Support Prices
</TABLE>
IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT BY THEIR HANDS AND
SEALS AS OF THE DATE FIRST NOTED ABOVE.
ISG TECHNOLOGIES INC. IMNET SYSTEMS, INC.
(seal) (seal)
- --------------------------------- ---------------------------------
Signature Signature
- --------------------------------- ---------------------------------
Name Name
- --------------------------------- ---------------------------------
Title Title
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SCHEDULE 1
LICENSED WORKS TRANSACTION SCHEDULE
1. LICENSED WORKS DESCRIPTION:
The ISG software products listed in the "ISG Technologies Inc. Viewing and
Reading Stations (VRS) Release 2.1 Marketing Specifications Document v5.0"
dated November 29, 1996 and the "ISG Technologies, Inc. Viewing and Reading
Stations on NT (VRS-NT) Release 1.0 Marketing Specifications Document v1.1"
dated November 29, 1996 (for VRS-200), (both attached as Exhibit A) and
subsequent releases, including Source Device and Printer Interfaces.
Note 1: The Licensed Works include:
(i) the executable object code of ISG's proprietary computer
programs listed above;
(ii) operating instructions and all other related instructional and
reference materials for all of the computer programs; and
(iii) all new, non-chargeable releases, versions and Updates thereof.
2. LICENSED WORKS LIST PRICE:
<TABLE>
<CAPTION>
PRODUCT LIST PRICE
------- ----------
<S> <C>
VRS 400 $USD[*]
VRS600 $USD[*]
VRS800DX $USD[*]
VRS800XS $USD[*]
</TABLE>
Note 1: All current product options are included in the above list prices.
3. IMNET'S SOFTWARE PRODUCTS:
(a) IMNET Image Engine(R) which performs the following functions:
(i) capturing and indexing of paper documents
(ii) indexing of digitized and film images
(iii) integration with host based applications
(iv) retrieval of electronic images
(v) displaying, printing or faxing images
(b) IMNET Workflow Engine(TM) which performs the following functions:
(i) capturing and redesigning of the existing flow of
information departmentally, enterprise-wide, and across
community networks
(ii) examine, define, and even-re-engineer tasks to govern
the assembly and flow of information in logical "document",
"folder", or "case" combinations
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(iii) automating the assembly of required information and
delivering it simultaneously to multiple points
(c) IMNET Electronic Patient Record Systems(TM) ("EPRS") which
performs the following functions:
(i) Chart creation and completion processes
(ii) Chart deficiency management
(iii) Physician electronic signatures and annotation
(iv) Patient record archive on magnetic disk, optical disk, and/or
microfilm
(v) Direct user access of electronic patient record
information
(vi) User security management
(vii) System audit trails
(viii) System administration
(d) IMNET EPRS/Web which performs the following functions:
(i) allows the user to access the IMNET EPRS database and
imagebase through the World Wide Web in a manner
consistent with the access features and functionality of the
IMNET Electronic Patient Record System product, while
maintaining appropriate security for the data accessed.
4. TERRITORY:
Worldwide
5. ROYALTY PAYMENTS TO ISG:
(a) Initial payment of $USD3.9 million structured as follows:
(i) $USD[*] upon signature of a separate Start-up Letter,
or upon signature of this Agreement whichever happens first,
[*]
(ii) $USD[*] on execution of this Agreement;
(iii) $USD[*] at[*]
(b) Advanced Royalty Payments of $USD3.9 million structured as
follows:
(i) $USD[*] upon the earlier of, or [*]; [*].
(c) IMNET may Sublicense the VRS-200-NT for unlimited distribution
to IMNET's Customers during the Term of this Agreement for no
additional per unit license fee.
(d) For the purposes of this Paragraph 5(c), Licensed Works will
include all New Products, but will exclude VRS 200 NT.
IMNET will pay ISG Additional Royalties as follows:
(i) For all sales made by (i) IMNET Listed Business
Partners as of the date of this Agreement; (ii) sales by
those IMNET Distributors, which are the HIS/RIS companies
listed in Exhibit B, to End Users in the U.S. and Canada; or
(iii) sales to End Users in the U.S. and Canada, by IMNET
directly without involvement of an IMNET Listed Business
Partner, or IMNET Distributor, a royalty ("Excess Sale
Royalty") based on the actual Licensed Works sales as
calculated at the List Price for the Licensed Works less any
End User Discounts paid by the End User beyond [*] cumulatively
during the term of this Agreement ("Excess Sale Target"). For
the purposes of accurately tracking these sales, IMNET will
provide ISG with Royalty Payment Reports as set out in Section
8.3 of the Licensed Works Process Schedule using the Licensed
Works Submittal Form which is attached hereto as Attachment 1.
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(ii) The Excess Sale Royalty rate shall equal [*] of the
IMNET Gross Sales Revenue for the sale of the Licensed Works.
(iii) For all other sales of the Licensed Works, a royalty
rate equal to [*] of the IMNET Gross Sales Revenue.
6. EPRS INTEGRATION:
A detailed VRS R&D schedule and a resourcing plan, including [*] software
developers, at ISG's expense, will start as soon as possible to work
through the EPRS integration. An outline of all critical dates and actual
specifications for each phase will be developed by [*] and will be mutually
agreed to between the parties. ISG plans to have the [*] software
developers available to work on a full-time basis on the EPRS Integration
as of [*].
7. END-USER DISCOUNTS:
All End User Discounts (whether for maintenance or sale of the Licensed
Works) will be allocated such that the Licensed Works are not discounted
proportionately greater than the discount allocated to all IMNET Software
Products included in all sales based on the extended list prices (i.e.
price times quantity) of the Licensed Works included in the sale.
8. MARKETING RELATIONSHIPS:
(a) For [*] years from the date of this Agreement, ISG will not
sell any of the Licensed Works to the IMNET Competitors without
IMNET's consent, which shall not be unreasonably withheld or refused.
(b) For the term of this Agreement, ISG will not sell any of the
Licensed Works to an IMNET Listed Business Partner without IMNET's
consent, which shall not be unreasonably withheld or refused.
(c) ISG sales personnel and IMNET sales personnel will market the
Licensed Works cooperatively to potential IMNET Customers specified in
Exhibit B. IMNET will invite an ISG sales representative to assist
IMNET in its sales calls to the HIS/RIS Companies specified in Exhibit
B. The ISG sales representative will be incentivized on a comparable
basis for sales made by IMNET as for sales by ISG of the Licensed
Works to such companies. The respective sales persons shall ascertain
whether the sales effort should continue as a joint effort, or whether
a separate sales effort by either party is appropriate. In the event
of a disagreement between the respective sales persons, the parties
agree to communicate such disagreement to the senior sales executive
for each organization. In the event the parties cannot agree whether
a joint sales effort remains appropriate, either party may notify the
other that it intends to proceed selling separately to such customer.
The senior sales executives of the parties shall communicate with
each other and shall meet on a regular basis to review sales prospects
and forecasts for the Licensed Works.
(d) In selling to the HIS/RIS Companies, listed in Exhibit B, ISG and
IMNET will share information, so as to enhance IMNET's and ISG's
business and sales opportunities. Sharing of information will also
include updating each other's customer lists on a regular basis and
following such procedures as set out in the Process Schedule or may be
more fully defined in Marketing Plans to be developed by the parties
from time to time.
(e) IMNET may sell all of its Solution components to ISG Listed
Customers, except for the Licensed Works components. However, in so
doing, it may not quote any prices relating to the Licensed Works to
such ISG Listed Customers. Further, IMNET will not license or sell
the Licensed Works to its Business Partners and Distributors for the
purposes of Sublicensing or reselling to other resellers including ISG
Listed Customers. Pricing of the Licensed Works will be at ISG's
discretion and all
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<PAGE> 22
revenues from the sale of the Licensed Works to ISG Listed Customers
will belong to ISG exclusively.
(f) IMNET will not, directly or indirectly, develop or acquire any
technologies that are competitive with any of the Licensed Works.
IMNET will only market competitive technologies where (i) it is doing
so in support of an IMNET Distributor which is selling that
competitive technology as part of an integrated solution of that
Distributor; or (ii) the technology is MedVision which IMNET may
market within the restrictions set out below.
(g) IMNET will not, directly or indirectly, receive any revenue from
an IMNET Customer, current or future, for sales by that IMNET Customer
of that IMNET Customer's proprietary or third party technologies which
are competitive with the Licensed Works.
(h) ISG will not, directly or indirectly, receive any revenue from an
ISG Customer, current or future, for sales by that ISG Customer of
that ISG Customer's proprietary or third party technologies which are
competitive with IMNET Software Products.
(i) IMNET shall not resell, distribute or license the Licensed Works
on a standalone basis at any time to any party who is not an IMNET
Customer without ISG's consent, which shall not be unreasonably
withheld or refused. All such sales of the Licensed Works must be
undertaken only as part of a sale of IMNET's Software Products. IMNET
shall be free to resell the Licensed Works on a standalone basis to
current end users using IMNET Software Products.
(j) Both parties acknowledge that IMNET currently owns and markets
MedVision in competition to the Licensed Works. To further the
business objectives of this Agreement, the parties agree as follows:
(i) After execution of this Agreement,.[*]
(ii) ISG will ensure that the Licensed Works have the
following functionality currently offered by IMNET's MedVision
Product:
- [*]; and
- [*]
In addition, ISG will ensure that the workstation incorporates
the following functionality:
- [*]
- [*]
- [*]; and
- [*]
As soon as practicable, the parties, acting reasonably, will
agree on appropriate testing procedures to test the above
functionality (the "Tests").
Upon completing the incorporation of the above functionality,
ISG will provide IMNET with written notice. Upon receiving such
notice, IMNET will have [*] business days to perform the Tests.
If IMNET has not provided to ISG written details of material
deficiencies in the added functionality based on the Tests within
the [*] business days, the functionality will be deemed to have
been accepted, otherwise the functionality will be accepted when
the parties reasonably agree that the identified material
deficiencies have been resolved (the "Acceptance").
(iii) [*]
[*]
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(iv) IMNET agrees to only sell MedVision to [*] until the earlier of
(i)[*]; or (ii). [*]
(v) ISG agrees, as soon as practicable, to [*]
(vi) IMNET may sell the rights to MedVision to an arms-length third
party; however, IMNET's compensation thereafter shall not be
based upon on-going royalty revenue, or the like, accruing
after[*], unless ISG consents to the contrary.
(k) As specified in Section 5.5 of the Agreement, ISG acknowledges
that IDX Systems Corporation markets IDXView and that Cerner Corp.
markets MRNet and that these technologies are competitive with the
IMNET Software Products.
(l) ISG will consult with IMNET on a regular basis regarding future
Updates and product direction for the Licensed Works, including
development timetables for specific functionality or enhancements, and
will use reasonable business efforts to meet such timetables. For
greater certainty, nothing in the foregoing shall be interpreted to
limit, in any manner whatsoever, ISG's sole discretion with respect to
future Updates and product direction for the Licensed Works.
9. SALES DEDICATED PERSONNEL:
During term of this Agreement, ISG will provide IMNET with one full-time
dedicated account manager who will work exclusively on the IMNET account to
be hired as soon as possible. In addition, ISG will hire a technical sales
support employee who will work on behalf of IMNET, and with IMNET as a
first priority.
10. VRS R&D SOFTWARE DEVELOPER:
ISG will hire, as soon as possible, one dedicated VRS R&D Software
Developer, for the benefit of IMNET, during the term of this Agreement, at
ISG's expense. IMNET may recruit and retain, at IMNET's expense, two
dedicated software developers to work at ISG, under appropriate
confidentiality agreements and certification requirements, to assist with
development and support of the Licensed Works. IMNET agrees that if it
wishes ISG to retain additional dedicated VRS R&D Software Developer, ISG
will provide such specialists, at IMNET's expense, at ISG's standard rate
of $[*] per annum, subject to inflation factors based on the consumer price
index, all items, for Toronto, Canada, published by Statistics Canada from
year to year.
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11. ADDITIONAL SUPPORT:
IMNET may purchase additional VRS R&D development services as required at a
rate of [*] per hour, subject to inflation factors based on the consumer
price index, all items, for Toronto, Canada, published by Statistics Canada
from year to year.
12. PAYMENT TERMS:
For all Additional Royalties and royalties from IMNET Gross Maintenance
Revenues, IMNET agrees to pay ISG within thirty (30) days of receipt of its
payment from an IMNET Customer, but in any event no later than [*] from the
date of shipment of the Licensed Works or the commencement of the Licensed
Works maintenance period. For other amounts owed to ISG by IMNET for
services such as training and technical support, payments will be made
within thirty (30) days of receipt of invoice from ISG. Method of payment
is set out in the Process Schedule.
13. TERM OF THE AGREEMENT:
Seven (7) years commencing from the date of execution of this Agreement.
14. INSURANCE TYPE AND COVERAGE:
(a) Standard: Data Processors, Computer Services and Software Errors
or Omission Insurance, $1,000,000 CDN each claim limit.
15. DETAILS OF THE CONFIDENTIALITY AGREEMENT:
(A) DATE: January 17, 1997
(B) PARTIES: ISG and IMNET
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ATTACHMENT 1
LICENSED WORKS SUBMITTAL FORM
IMNET Licensed Works Submittal Form: XXXXXX
Licensed Works:
<TABLE>
<S> <C>
Type: []
Quantity: []
Price per license: [$]
Total price: [$]
Maintenance Agreements [$]
- ----------------------
</TABLE>
COMMERCIAL TERMS OF SUBMITTAL FORM:
1. Each time IMNET, an IMNET Business Partner or an IMNET Distributor fills
out a shipment order from an IMNET Customer, IMNET will submit to ISG a
Submittal Form which may be issued by telefax. Each Submittal Form will
reference this Agreement, will state the quantity and type of the Licensed
Works ordered and their requested delivery date or dates. The terms and
conditions of all orders will be in accordance with this Agreement and
will not be modified by any terms of IMNET 's submittal forms or other
forms, which will have no legal effect.
2. Prices do not include sales tax or similar taxes. IMNET will pay such
taxes either directly or when invoiced by ISG, or will supply appropriate
tax exemption certificates in a form satisfactory to ISG, as applicable.
3. IMNET will 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
Licensed Works in the Territory or other destination designated by IMNET.
4. IMNET will be free to determine its own resale prices to End Users. Any
list prices published or provided by ISG are suggestions only.
5. If any of the terms of this Agreement is in conflict with any standard
printed term and/or condition of quotations, orders, acknowledgments,
invoices or similar documents, the terms of this Agreement will prevail.
6. Interest of 10% per annum, or part thereof, shall be due and payable on
all overdue accounts.
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SCHEDULE 2
[*]TRANSACTION SCHEDULE
1. [*] DESCRIPTION:
[*]
[*] system components:
- [*]
- [*]
- [*]
- [*]
- [*]
2. GRANT OF RIGHTS:
2.1. No resale of the [*] or [*] may be made pursuant to this Section unless
and until IMNET, its Distributors or its Business Partners have
incorporated into their own forms of license provisions protecting ISG's
interests to the following effect:
(a) provision requiring the End User to take all reasonable
precautions to keep any trade secrets with respect to the [*] and [*]
confidential;
(b) provision acknowledging that ownership of the copyright and all
other intellectual property rights in the [*] and [*] remains
exclusively with ISG; and
(c) provision limiting ISG's liability to the End User to the same or
greater extent than the liability of IMNET to the End User is limited.
3. RESPONSIBILITIES OF ISG:
3.1. Without limiting ISG's other obligations hereunder, ISG will:
(a) Keep IMNET informed in advance of changes in specifications and
deliveries with respect to the [*] and [*].
(b) Provide installation and training as set out in Section 9 below.
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4. [*] TRANSFER PRICE:
[*]
Includes: - [*] components listed in Section 1 above
Note 1: Effective [*], IMNET shall pay ISG's then regular transfer
price and will only receive a volume discounted price if IMNET
undertakes to commit to binding sales volumes.
Note 2: There will be no discount applied to the [*] price given above for
any reason.
Note 3: All prices quoted are exclusive of[*].
5. ITEMS INCLUDED IN [*] TRANSFER PRICE:
Transfer Price Includes:
- [*] components listed in Section 1 above
- 6 month warranty including First Line Support and parts
warranty (excludes travel etc.)
- Initial Installation
- End User Training for 2 people
- Technical Specifications
- Consultation on Contract Negotiation
- Customer Quotation Template
- Technical Sales Support
Note 1: Subsequent to the 6 month warranty period:
(i) ISG or an agent designated by ISG may offer First Line
Support to End Users and ISG will retain [*] of the Gross
Maintenance Revenue; or
(ii) provided that IMNET has personnel who possess the necessary
degree of training and qualifications as determined by ISG,
IMNET may offer First Line Support to End Users and the
Gross Maintenance Revenue will be divided between ISG and
IMNET on a basis to be negotiated between them.
6. TERRITORY:
The United States of America, including all its territories, and Canada,
including all its provinces and territories. IMNET may resell the [*]
outside of this territory provided that either ISG or IMNET is able to
provide First Line Support on the terms and conditions set out in Note 1 of
Section 5 above. Further, ISG will use its best efforts to provide First
Line Support outside of the territory.
7. PURCHASE ORDERS:
IMNET agrees to submit orders for the [*] on the form of [*] Purchase Order
attached hereto. All Purchase Orders must incorporate this Agreement by
reference.
8. DEMONSTRATION COPY:
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ISG will provide IMNET with a demonstration copy of the [*] for[*]. This
price includes the components and initial installation. This price excludes
the 6 month warranty for First Line Support, parts and instruments as well
as training. The warranty will be charged at a time and material basis.
Alternatively, ISG will provide IMNET with a demonstration copy of the [*]
for[*], which price includes components, initial installation, 6 months
warranty for First Line Support and parts (but not training and
instruments).
9. TRAINING:
Training will be offered to IMNET personnel for the first 6 months of the
contract at [*] of the standard rates set out in Exhibit F. Training
includes the following:
- Technical Courses
- Sales and Marketing
- Demonstration Training
Note: All courses include marketing material.
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ATTACHMENT 1
[*] PURCHASE ORDER
[TO BE CONFORMED TO MAIN AGREEMENT AND THE PROCESS SCHEDULE WHEN FINALIZED]
IMNET Purchase order: XXXXXX
<TABLE>
<S> <C>
Type of Hardware Purchased: ISG's [*]
Quantity: []
Price per product: []
Total price: [$]
Type of Parts: []
Quantity: []
Price per Part: [$]
Total price: [$]
TOTAL OF PURCHASE ORDER: [$]
</TABLE>
COMMERCIAL TERMS OF PURCHASE ORDER:
1. If ISG discontinues manufacturing[*], ISG will give IMNET [*] notice of
such discontinuation. Within [*] after such notice, IMNET may place a
final, non-cancelable purchase order for the discontinued[*].
2. Each order for the [*] will be submitted on IMNET 's standard purchase
order form or letterhead. Each order will reference this Agreement, will
state the quantity and type of the [*] or related parts ordered and their
requested delivery date or dates. The terms and conditions of all orders
will be in accordance with this Agreement and will not be modified by any
terms of IMNET 's purchase order or other forms, which will have no legal
effect. ISG's acceptance of each such order will take place only upon
delivery of written notification to IMNET.
3. Orders may also be issued by telefax. Such orders must be confirmed by
issue of IMNET 's standard written purchase order and delivery to ISG
within [*] from the date of the corresponding telecommunication, otherwise
ISG may cancel the order.
4. ISG may cancel any orders placed by IMNET, or refuse or delay shipment
thereof, if IMNET:
(a) fails to make payment as provided for in this Agreement or under
the terms of payment set forth in an invoice or otherwise agreed to by
ISG and IMNET; or
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(b) otherwise fails to comply with the terms and conditions of this
Agreement.
5. ISG will, at IMNET's request, make partial shipments on account of
IMNET's orders for the [*] or [*] with the same payment terms as set out
in Section 9 below. Subsequent delays in shipment or delivery of any
installment will not relieve IMNET of its obligation to accept delivery of
the remaining portions of the orders.
6. ISG will use reasonable efforts to meet IMNET's requested delivery
date(s) for the [*] or [*]. Should orders for the [*] or [*] exceed ISG's
available inventory, ISG will allocate its available inventory and make
deliveries on a basis that ISG deems equitable, in its sole discretion.
In any event, ISG will not be liable for any damages, direct,
consequential, special or otherwise to IMNET or to any other person for
failure to deliver or for any delay or error in delivery of the [*] or
related parts for any reason whatsoever.
7. Delivery will be "Ex-works" ISG's plant upon transfer to either a common
carrier or to IMNET or its agents or employees, and IMNET will be deemed
to have accepted [*] or [*] and will assume all risk of loss or damage to
the [*] or [*] upon such delivery. IMNET will be responsible for all
costs of shipping, transportation, freight, insurance, taxes and similar
items. Absent shipping instructions, ISG will select methods and routes
of shipment but will not assume any liability in connection with shipment
nor constitute any carrier as its agent.
8. Prices do not include sales tax or similar taxes. IMNET will pay such
taxes either directly or when invoiced by ISG, or will supply appropriate
tax exemption certificates in a form satisfactory to ISG, as applicable.
9. Prior to shipment of ordered [*] or [*], ISG will invoice IMNET for the
full IMNET price of the [*] or [*] shipped. Such amount will be due and
payable on invoicing in accordance with the Process Schedule.
10. IMNET will 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 [*] or
[*] in the Territory or other destination designated by IMNET.
11. IMNET will be free to determine its own resale prices to End Users. Any
list prices published or provided by ISG are suggestions only.
12. If any of the terms of this Agreement is in conflict with any standard
printed term and/or condition of quotations, orders, acknowledgments,
invoices or similar documents, the terms of this Agreement will prevail.
13. Interest of 10% per annum, or part thereof, shall be due and payable on
all overdue accounts.
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SCHEDULE 3
LICENSED WORKS PROCESS SCHEDULE
1. CONTACT LIST
For ISG:
See Attachment 1
For IMNET:
Executive - [*]
Sales - [*]
Technical - [*]
2. ORDER PROCESSING
For the purposes of accurately matching ISG's part numbers with
IMNET's part numbers, the parties will complete order worksheets in
a mutually agreed format subsequent to signing the Agreement.
3. FINAL INTEGRATION AND TEST PROCEDURES
In advance of each new Licensed Works release, ISG will provide
IMNET a preliminary copy of the Licensed Works in object form. ISG
will also provide IMNET with a written installation procedure to be
used by IMNET to install the new release in its QC/Test environment.
IMNET will then proceed to test the integration with its Software
Products in accordance with IMNET's standard Quality Assurance
procedures. All problems will be reported to ISG's Support Services
Group using a standard reporting procedure to be developed by the
parties. Upon resolution of any problems to IMNET's satisfaction,
IMNET will notify ISG of the acceptance for shipment of the new
release. ISG will provide a master "gold" copy of the Licensed
Works, in executable form, which will be used by IMNET for its
product integration and delivery.
IMNET will be responsible for integration of the Licensed Works
within its Software Products for delivery to IMNET Customers.
IMNET will be responsible for the maintenance of delivery records in
accordance with applicable FDA regulations regarding the
distribution of regulated medical devices.
4. TRAINING
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------
6 people maximum Mandatory each year
TECHNICAL TRAINING FOR VRS PRODUCTS per class. of the Agreement.
- ---------------------------------------------------------------------------------
6 people maximum
APPLICATIONS TRAINING FOR VRS PRODUCTS per class. Mandatory.
- ---------------------------------------------------------------------------------
SALES AND MARKETING TRAINING FOR VRS
PRODUCTS - Optional.
- ---------------------------------------------------------------------------------
</TABLE>
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Training for IMNET service representatives is MANDATORY EACH YEAR OF THE
AGREEMENT to allow IMNET to provide qualified support to End Users. (On
going additional training is also available). Both Technical and
Applications Training Courses are offered to suitably qualified IMNET
personnel. All courses are held at ISG training facilities in Mississauga,
Canada and are limited to a minimum of three (3) and maximum of six (6)
attendees. Courses must be booked at least forty-five (45) days in
advance.
Training Courses are two (2) days in duration and all equipment is
supplied by ISG (1 system per 2 attendees). IMNET will, at its own
expense, bear all costs for its representatives to attend such training
courses, including but not limited to travel and living expenses.
4.1 Technical Training:
The Technical Training Course is intended for IMNET service
representatives and is geared toward system installation and problem
diagnosis. Knowledge of NT and UNIX operating system is a pre-requisite
for the course. The Training Course covers the entire VRS product range on
the NT and UNIX platforms. The following topics are covered:
- Installation and de-installation of hardware components
- Operational procedures of hardware components
- Routine maintenance procedures
- Diagnosis of system faults
- Complete system software installation
- Application software trouble shooting
4.2. Clinical Applications Training:
The Clinical Applications Training Course is intended for IMNET
applications and/or sales representatives and focuses on the clinical
application of the system functionality. Knowledge of medical imaging is a
recommended pre-requisite for the course. The Training Course covers the
entire VRS range of Licensed Works. The following topics are covered:
- Import of image data
- Clinical application of system functionality
- System operation and data management
- Demonstration techniques
- Feature vs. Benefit overview
5. SUPPORT
<TABLE>
<S> <C>
- --------------------------------------------------------
SUPPORT PRODUCTS COMMENTS
- --------------------------------------------------------
ON SITE TECHNICAL SUPPORT based on availability
- --------------------------------------------------------
ON SITE SALES & MARKETING SUPPORT based on availability
- --------------------------------------------------------
</TABLE>
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5.1 Scope of Second Line Support:
ISG only provides Second Line Support for its Licensed Works and only to
the extent that they are run on hardware configurations which are tested
and supported by ISG for the VRS applications.
ISG does not provide Second Line Support for UNIX or Windows operating
systems or computer hardware and/or peripherals on which the ISG
applications are run.
5.2 Definition of First Line Support:
In the event of a problem, the End User will always contact IMNET with
problems, queries and/or help line requests. IMNET's qualified customer
service personnel will respond to calls and attempt to diagnose and repair
problems according to procedures defined in ISG's training courses and in
ISG documentation. IMNET agrees that it is IMNET's goal that at least
[*]percent ([*]%) of incoming calls will be handled by IMNET without the
involvement of ISG.
IMNET will provide a monthly problem report to ISG detailing the
Service Order Number, if possible, as well as the date, type of call and
subsequent activity/resolution of each support call.
5.3 Definition of Second Line Support:
For each instance of a potential problem with the Licensed Works, IMNET
will follow the procedure defined in Section 5.2 above for First Line
Support and only after following such procedure shall IMNET contact the
appropriate ISG support facility and log the problem using an ISG approved
form and according to the procedure agreed upon by the parties. 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:
- Provide technical or applications support via telephone to trained
IMNET service personnel.
- Provide in depth problem investigation and analysis via modem to
the End User's system. This support is provided only where direct high
speed modem access is available via a dedicated telephone line.
- Provide on-site consultation upon request from IMNET at current
ISG Standard Time and Materials rates subject to availability of
technical or applications support personnel.
- Where ISG is not requested by IMNET to provide such on-site
consultation, but ISG determines, in its sole discretion, to do so,
ISG will pay all related costs and expenses.
ISG will provide a monthly problem report to IMNET detailing the Service
Order Number, date, type of call and subsequent activity/resolution of each
support call.
- See Attachment 2 for the following:
- Support Hours
- Second Line Support
- full service, emergency, exclusions
- ISG's response levels
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6. COMPLAINT HANDLING
6.1. IMNET will maintain complaint files regarding the Licensed Works in
accordance with the requirement of the applicable FDA regulations, and
will notify ISG's customer service representative immediately upon
identification of Severity Level 1 and Severity Level 2 problems and will
notify ISG's director of quality and regulatory affairs immediately upon
IMNET's receipt of information that reasonably suggests that a Licensed
Work may have caused or contributed to a death or serious injury. As soon
as completed, IMNET will provide ISG with a copy of any FDA Form 3500A
(mandatory MedWatch form) to be filed with the FDA as required by
applicable regulation.
6.2. IMNET will, in accordance with the applicable Medical Device Reporting
regulations, provide such additional or supplemental information, and make
such reports to both the FDA and to ISG and provide such annual
certifications to the FDA as may be required by the FDA regarding IMNET's
distribution of the Licensed Works
7. WRITTEN REPORTS:
7.1. Whenever an order is received by IMNET, IMNET will notify ISG of:
- any signed agreement with the End User who intend to license the
Solutions. ISG understands that this is an initial order and is
subject to modification based upon the subsequent analysis that
results in the development of a functional specification and
acceptance test plan for the End User.
7.2. On a quarterly basis, IMNET will provide ISG the following reports
detailing the activity of the prior months:
- Gross Maintenance Revenue Reports, as set out in Section 8.2 below.
- Royalty Payment Reports, as set out in Section 8.3 below.
Notwithstanding the above, in the event that less than [*] of the Gross
Maintenance Revenue is paid to IMNET in the last [*] of any quarter, ISG
may require IMNET to provide to ISG the Gross Maintenance Revenue Reports
and the Royalty Payment Reports on a monthly basis.
7.3. On a quarterly basis, IMNET will provide ISG the following reports:
- a six (6) month rolling forecast of IMNET's anticipated order for the
Licensed Works
- the number of Sub-licenses sold to End Users during the quarter
as well as the names and addresses of all such End Users
7.4. On a quarterly basis, ISG will provide IMNET the following reports:
- an Account Activity Report which provides for an update of the
status of issues and the progress of resolutions.
- an updated DICOM Validation Status Report as referred to in
Section 7.2 of the Agreement.
8. REPORTING PROCEDURES
8.1. IMNET will identify ISG related sales and accounts receivable for the
purpose of accurate tracking and auditing.
8.2. Gross Maintenance Revenue Reports:
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As defined in Paragraph 1.1 (p) of the Agreement, Gross Maintenance
Revenue is derived from IMNET Channel Maintenance Revenue and IMNET
Direct Maintenance Revenue. In accordance with Section 9.6 of the
Agreement, maintenance revenue will be shared [*] by IMNET and ISG.
Subject to Section 7.2 above, on the 15th day of the first month in each
quarter, IMNET will send ISG a report detailing Gross Maintenance Revenue
collected by IMNET in the prior quarter. This report should also
reference sales made in previous quarters for which payment is still
outstanding. Payment terms are set out in Section 12 of the Licensed
Works Transaction Schedule. Reconciling items discovered by ISG are to be
adjusted in next month's billing. An example of the Gross Maintenance
Revenue Report is attached hereto as Example 1.
8.3. Royalty Payment Reports:
IMNET is responsible for submitting a Licensed Works Submittal Form, in
the form set out as Attachment 1 to the Licensed Works Transaction
Schedule, each time an order for an IMNET Customer is shipped. On the
15th day of each month, IMNET will send ISG a report summarizing the
Submittal Forms shipped in the prior month. This report should also
reference sales made in previous months for which ISG is owed payment,
but payment has not yet been received. Payment terms are set out in
Section 12 of the Licensed Works Transaction Schedule. Reconciling items
discovered by ISG will be adjusted in the next month's billing.
IMNET will provide ISG with two reports as follows:
(a) Reporting of $[*] (an example is attached hereto as Example 2):
This report sets out the tracking of sales amounting to $[*] which
sales are made in accordance with Paragraph 5(c)(i) of the Licensed
Works Transaction Schedule.
(b) Royalty Payment Report (an example is attached hereto as Example
3):
This report sets out the royalty payments due to ISG for sales
exceeding [*] which sales are made in accordance with Paragraph
5(c)(i) of the Licensed Works Transaction Schedule and for all other
sales not referenced in Paragraph 5(c)(i) of the Licensed Works
Transaction Schedule.
9. METHODS OF PAYMENT:
Payments must be made in US Dollars by wire transfer to ISG
Banking information: Bank of Montreal
First Canadian Place
Toronto, Ontario, Canada
[*]
[*]
Payments to ISG will not be deemed to have been made until the funds are
available to ISG in Mississauga Ontario, Canada. Alternatively, if IMNET
is prevented by government regulations from transferring funds to Canada,
ISG will have the right (in addition to its right to terminate this
Agreement for failure to receive payment as required herein) to require
IMNET 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.
10. AUDIT RIGHTS:
ISG may, upon notice to IMNET, audit IMNET's records relating to the
licensing of the Licensed Works, sales of the Products, or maintenance
revenues related to the Products for purposes of verifying compliance with
this Agreement, and IMNET agrees to cooperate with such audit. In the
event that a discrepancy is
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found of more than [*] percent ([*]%) in the total revenues due ISG in
ISG's favor, IMNET shall remit the difference and shall reimburse ISG for
its reasonable costs in performing such audit.
11. GOVERNMENTAL APPROVALS:
ISG will, on request, use its best efforts to assist IMNET in obtaining any
governmental approvals required to discharge IMNET's obligations under the
Agreement. In addition, IMNET will obtain any required qualifications for
Solutions as soon as practicable under the applicable governmental
requirements in the Territory. ISG agrees to cooperate and use its
reasonable efforts to assist IMNET in obtaining such qualification and to
institute such design changes as may be required for such qualification.
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ATTACHMENT 1
CONTACT LIST
<TABLE>
<CAPTION>
================================================================================
NAME TITLE / RESPONSIBILITIES PHONE / FAX EMAIL
================================================================================
<S> <C> <C> <C> <C>
Phone within NA [*]
Phone outside NA [*]
[*] Account Coordinator Fax [*] [*]
- --------------------------------------------------------------------------------
Product Development Phone within NA [*] [*]
[*] Manager Phone outside NA [*] [*]
- --------------------------------------------------------------------------------
Phone [*]
Customer Service Dispatch Fax [*]
[*] Europe Voicemail [*] [*]
- --------------------------------------------------------------------------------
Customer Service Dispatch Phone within NA [*]
[*] North America Phone outside NA Fax [*] [*]
- --------------------------------------------------------------------------------
Director, Sales, Mobile Phone [*]
[*] Viewing Stations Voicemail [*] [*]
- --------------------------------------------------------------------------------
Phone within NA [*]
Service Account Specialist Phone outside NA [*]
[*] Atlanta Fax [*] [*]
- --------------------------------------------------------------------------------
Phone [*]
Fax [*]
[*] Account Manager Phone (Toll Free) [*]
- --------------------------------------------------------------------------------
Phone within NA [*[
Phone outside NA [*]
[*] Director, Quality and Regulatory Fax [*] [*]
- --------------------------------------------------------------------------------
Phone within NA [*]
Phone outside NA [*]
[*] Director of Customer Service Fax [*] [*]
================================================================================
</TABLE>
Should your call arrive in the ISG voicemail system and you do not want
to leave a voicemail, you may press '0' to reach the ISG main switchboard, or
dial plus the extension # you wish to reach.
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ATTACHMENT 2
SECOND LINE SUPPORT TERMS
1. SECOND LINE SUPPORT HOURS
During the hours of 8:00 a.m. and 6:00 p.m., Eastern Time, Monday through
Friday, and excluding ISG holidays, ISG will provide "Full Service" Second-Line
support to IMNET, as defined below. All other times, ISG will provide
"Emergency Operational Services" Second-Line support to IMNET, as defined
below.
2. SECOND LINE SUPPORT
Second Line Support Services Include:
(a) FULL SERVICE SECOND LINE SUPPORT
(i) ISG HELP DESK - A manned customer assistance center to
provide telephone contact via a toll-free number and technical
Second-Line support information and response to problem calls
from IMNET during the hours set forth above. These services may
include:
a) Receipt and logging of IMNET requests for assistance;
b) Response from qualified IMNET service representatives to
help diagnose and fix customer problems forwarded to ISG by
IMNET;
(ii) PROGRAM TEMPORARY FIXES (PTF) - ISG will provide Program
Temporary Fixes to IMNET, defined as error corrections and "bug
fixes" to correct reproducible errors related to IMNET
Customer-specific functionality.
(iii) "UPDATES" - ISG will provide Updates, but not New Products as
defined in Paragraph 1.2(w) of the Agreement, in accordance with
this Agreement.
(b) EMERGENCY OPERATIONAL SERVICES SECOND LINE SUPPORT
Monitoring of the ISG Help Desk through remote means, and providing
technical support on a pager-activated basis. This service is intended to
provide assistance primarily for customer emergencies when a production
system or critical component is down or out of service due to a system
defect or failure, and does not include preventative maintenance services,
or routine application assistance by ISG programmers or systems engineers.
(c) SECOND LINE SUPPORT SERVICES EXPLICITLY EXCLUDE:
(i) Adding, removing, or maintaining accessories, attachments,
machines or other devices.
(ii) Labor and design services needed to install and/or customize
Licensed Works in person previously supplied to IMNET or an
IMNET Customer to any new release level. If requested to
perform such services in person by an IMNET Customer, such
services shall be considered outside the scope of this Agreement
and separately billable. However, if ISG is not requested to
perform such services in person but ISG, in its sole discretion,
chooses to do so, ISG will pay all related costs and expenses.
(iii) Network trouble-shooting services when Licensed Products are
installed in pre-existing networked environment.
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(iv) Routine system administration.
(v) Network operating system, third party database software
or operating system support, maintenance or upgrades.
(vi) Integration or installation of third party software or
hardware unless explicitly agreed to between ISG and IMNET.
(vii) Other levels of maintenance support, including the
designation of specific ISG personnel for a particular Customer,
and/or stationing of ISG personnel at an IMNET Customer's site
on an extended or permanent basis. ISG, at its option, may
provide such services; however, the terms of any such services,
and the fees associated with those services, shall be negotiated
on a case-by-case basis.
(viii) Answering calls from IMNET Distributors, IMNET Listed Business
Partners and End Users.
(d) In the event that ISG is required to perform Second Line Support
Services in person, and ISG deems necessary, and provides such
services for product malfunctions that upon subsequent investigation
are determined not be caused by the Licensed Works, ISG shall invoice
IMNET for such services at ISG's then-current rates. However, if ISG
is not required to perform Second Line Support Services in person, but
ISG, in its sole discretion, chooses to do so, ISG will pay all
related costs and expenses.
(e) ISG RESPONSE LEVELS - ISG response levels apply to base system,
unmodified code; support of code modified by IMNET with ISG's
permission is available on a time and material basis. It is ISG's
policy to respond to all services call within 1 business hour in order
to begin the process of resolving system issues. This process begins
with determining the severity level of the conditions which exist at
the IMNET Customer's site as reported by IMNET to ISG. Based on the
impact of the problem, the following guidelines apply to ISG's
troubleshooting activities.
i) PROBLEM SEVERITY LEVEL 1: A production system or critical
component is down or out of service due to a Licensed Work
defect or failure. ISG will work continuously to resolve the
issue or implement a workaround which returns the system to
a production status and moves the problem to the Problem
Severity Level 3 category. Immediate notification of the
situation is made to the Director of Customer Services. If the
critical condition continues for [*] business hours,
notification is made to the Vice President of Business
Operations and Director of Quality and Regulatory. A Problem
Severity Level 1 failure automatically triggers a shiphold
procedure at IMNET with respect to the Licensed Works.
ISG's goal, but not guarantee of any kind, for returning the
system to production status is within [*] of ISG's receipt
of notification of the failure. Once production status
resumes, the final, permanent solution may require additional
software corrections and shipments. If that is the case, it is
ISG's goal to provide the permanent solution within [*] of
ISG's receipt of notification of the failure.
IMNET and IMNET's Customer duties include making support
available (personnel systems, etc.) with total dedication
until the failure has been moved out of the Level 1 category.
Adequate documentation must be submitted with the problem
(e.g., database information, set of circumstances leading to
the problem as applicable).
ii) PROBLEM SEVERITY LEVEL 2: A production system is affected due
to a system defect or failure. Impact is a significant
reduction in user productivity. In these cases, ISG's goal,
but not obligation, is to resolve the issue or reduce the
impact to Level 3 within [*]of ISG's receipt of notification of
the failure. If permanent solution of the problem requires
software correction or
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shipment, it is ISG's goal to provide the permanent solution in
the currently open maintenance version of the application
affected. Maintenance versions are produced on a quarterly
schedule.
IMNET and IMNET's Customer duties include making support
available (personnel, systems, etc.) during normal business
hours, until a resolution or processing alternative is
identified. Adequate documentation must be submitted with the
problem (e.g., database information, set of circumstances leading
to the problem as applicable).
iii) PROBLEM SEVERITY LEVEL 3: A system is affected due to a
system defect or failure. Impact to productivity is relatively
small or an effective workaround is in place on a temporary
basis. ISG's goal is to provide any necessary software
corrections in the next maintenance version.
IMNET and IMNET's Customer duties include making support
available (personnel, systems, etc.) during normal business
hours, until a resolution or processing alternative is
identified. Adequate documentation must be submitted with the
problem (e.g., database information, set of circumstances leading
to the problem as applicable).
iv) PROBLEM SEVERITY LEVEL 4: A system is affected; however, the
complaint or problem is minor and can easily be circumvented by
the End User, ISG's goal is to provide any necessary software
corrections in the next open maintenance version.
IMNET and IMNET's Customer duties include making support
available (personnel, systems, etc.) during normal business
hours, until a resolution or processing alternative is
identified. Adequate documentation must be submitted with the
problem (e.g., database information, set of circumstances leading
to the problem as applicable).
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EXAMPLE 1
IMNET MAINTENANCE REVENUE REPORT
Reported: February 15, 1997 All amounts in $USD
For Sales Made in Period January 1997
(including sales made in previous months for which payment is now due ISG)
<TABLE>
<CAPTION>
=======================================================================================
SELLER END END USER PRODUCT BEGIN $ SOLD
(IMNET OR USER LOCATION DELIVERY DATE OF @ END
BUSINESS NAME DATE MNTCE USER
# INVOICE # PARTNER) LIST PRICE
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 52368X IMNET HOSP X BALTIMORE 01/15/97 01/31/97 [*]
- ---------------------------------------------------------------------------------------
2 45876Y CERNER HOSP Y CHICAGO 01/01/97 01/15/97 [*]
- ---------------------------------------------------------------------------------------
3 35287T IMNET HOSP A MARYLAND 12/15/96 12/15/96 [*]
- ---------------------------------------------------------------------------------------
TOTAL [*]
=======================================================================================
<CAPTION>
=============================================================================================================================
# INVOICE # MNTCE GROSS LESS LESS MNTCE MNTCE PAYABLE TO CARRY FORWARD NEXT
% OF $ MNTCE END BUSINESS $ $ OWED ISG THIS MONTH
SOLD @ $ AMT USER PARTNER RECEIVED BY TO ISG MONTH (INC.
END DISCOUNT SHARE IMNET CARRYOVER
USER FROM
LIST PREVIOUS
MONTH)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 52368X [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------------------
2 45876Y [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------------------
3 35287T [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*] [*] [*]
=============================================================================================================================
</TABLE>
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EXAMPLE 2, IMNET REPORTING OF $ [*]
Reported: February 15, 1997
For Sales Made in Period January 1997
Seller Type: 1. IMNET Business Partners
2. IMNET Distributors (HIS/RIS companies listed on Exhibit B on
the contract) in US and Canada
3. IMNET Direct Sales in US and Canada
Cumulative Balance Carry forward: $[*]
<TABLE>
<CAPTION>
====================================================================================================================================
# SELLER INVOICE # SELLER END END PRODUCT LICENSED LICENSED TOTAL END NET AMOUNT BILLED
TYPE NAME) USER USER DELIVERY WORKS TYPE WORKS AMOUNT USER
NAME LOCATION DATE QUANTITY BILLED @ DISCOUNT
END USER
PRICE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 3 52368X IMNET HOSP X BALTIMORE 01/15/97 VRS400 [*] [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
2 2 45876Y CERNER HOSP Y CHICAGO 01/01/97 VRS600 [*] [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
3 4 35287T IMNET HOSP A MARYLAN 12/15/96 VRS800DX [*] [*] [*] [*]
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL [*] [*] [*] [*]
====================================================================================================================================
</TABLE>
CUMULATIVE BALANCE AS END OF JANUARY 31, 1997 $[*]
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EXAMPLE 3, IMNET ROYALTY PAYMENT REPORT
Reported: February 15, 1997 All amounts in $USD
For Sales Made in Period January 1997
(including sales made in previous months for which payment is now due ISG)
For all sales: (i) once report detailing [*] is exceeded
(ii) for all other types of sales
<TABLE>
<CAPTION>
=================================================================================================================================
# INVOICE # SELLER END END USER PRODUCT LICENSED LICENSED TOTAL END BUSINESS NET
(IMNET OR USER LOCATION DELIVERY WORKS WORKS AMOUNT USER PARTNER AMOUNT
BUSINESS NAME DATE TYPE QUANTITY BILLED DISCOUNT DISCOUNT RECEIVABLE
PARTNER) @ END
USER
PRICE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 52368X IMNET GE BALTIMORE 01/15/97 VRS400 20 [*] [*] [*] [*]
- ---------------------------------------------------------------------------------------------------------------------------------
2 45876Y CERNER HOSP Y CHICAGO 01/01/97 VRS600 50 [*] [*] [*] [*]
- ---------------------------------------------------------------------------------------------------------------------------------
3 35287T IMNET HOSP A MARYLAND 12/15/96 VRS800DX 10 [*] [*] [*] [*]
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL 80 [*] [*] [*] [*]
=================================================================================================================================
<CAPTION>
===========================================================================
# INVOICE # SELLER AMOUNT PAYABLE TO CARRY FORWARD NEXT
(IMNET OR OWED TO ISG THIS MONTH
BUSINESS ISG MONTH (INC.
PARTNER) CARRYOVER
FROM PREVIOUS
MONTH)
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 52368X IMNET [*] [*] [*]
- ---------------------------------------------------------------------------
2 45876Y CERNER [*] [*] [*]
- ---------------------------------------------------------------------------
3 35287T IMNET [*] [*] [*]
- ---------------------------------------------------------------------------
TOTAL [*] [*] [*]
===========================================================================
</TABLE>
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SCHEDULE 4
SOFTWARE ESCROW AGREEMENT
DATED the ____________ day of ____________ , 1997
BETWEEN:
ISG TECHNOLOGIES INC. ("ISG")
a corporation duly organized and existing under the laws of the
Province of Ontario, having its registered office at 6509 Airport
Road, Mississauga, Ontario L4V 1S7
- AND -
IMNET SYSTEMS, INC. ("IMNET")
a corporation duly organized and existing under the laws of the
State of Delaware having offices at 3015 Windward Plaza, Windward
Fairways II, Alpharetta, Georgia, 30202
- AND -
FORT KNOX ESCROW SERVICES, INC. ("FORT KNOX")
a body politic and corporate, having its head office at 3539 A
Church Street, Clarkston, Georgia, U.S.A. 30021-1717
WHEREAS ISG and IMNET have entered into a value added reseller agreement
("Value Added Reseller Agreement"), whereby ISG licensed specified software
technologies to IMNET and granted IMNET the right, either directly or through
defined distribution channels, to resell licenses for those technologies as
part of a value added solution to end users on a world-wide basis.
AND WHEREAS in order to fulfill its obligations under the Value Added Reseller
Agreement, ISG intends to deliver to Fort Knox all of the components listed in
Appendix B to this Agreement, which would enable an appropriately skilled
technician to provide Second Line Support, as that term is defined under the
Value Added Reseller Agreement (the "Deposit Materials").
AND WHEREAS ISG desires Fort Knox to hold the Deposit Materials, and, upon
certain events, deliver the Deposit Materials (a copy thereof) to IMNET, in
accordance with the terms hereof.
NOW THEREFORE, in consideration of the foregoing, of the mutual promises
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Delivery by ISG. ISG shall be solely responsible for delivering to Fort
Knox the Deposit Materials as soon as practicable. Fort Knox shall hold the
Deposit Materials in accordance with the terms hereof. Fort Knox shall have no
obligations to verify the completeness or accuracy of the Deposit Materials.
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2. Duplication; Updates
(a) Fort Knox may duplicate the Deposit Materials by any means in
order to comply with the terms and provisions of this Agreement, provided
that IMNET shall bear the expense of duplication. Alternatively, Fort
Knox, by notice to ISG, may require ISG to reasonably promptly duplicate
the Deposit Materials.
(b) ISG shall deposit with Fort Knox any modifications, updates, new
releases or documentation related to the Deposit Materials by delivering
to Fort Knox an updated version of the Deposit Materials ("Additional
Deposit") as soon as practicable after the modifications, updates, new
releases and documentation have been developed by ISG. Fort Knox shall
have no obligation to verify the accuracy or completeness of any
Additional Deposit or to verify that any Additional Deposit is in fact a
copy of the Deposit Materials or any modification, update, or new release
thereof.
3. Notification of Deposits. Simultaneous with delivery to Fort Knox of the
Deposit Materials or any Additional Deposit, as the case may be, ISG shall
deliver to Fort Knox and to IMNET a written statement specifically identifying
all items deposited and stating that the Deposit Materials or any Additional
Deposit, as the case may be, so deposited have been inspected by ISG and are
complete and accurate.
4. Delivery by Fort Knox.
4.1 Delivery by Fort Knox to IMNET Fort Knox shall deliver the Deposit
Materials, or a copy thereof, to IMNET only in the event that:
(a) ISG notifies Fort Knox to effect such delivery to IMNET at a
specific address, the notification being accompanied by a check payable
to Fort Knox in the amount of one hundred ($100.00) USD; or
(b) Fort Knox receives from IMNET:
(i) written notification that a Release Condition (as
that term is defined in the Value Added Reseller Agreement
between ISG and IMNET) has occurred;
(ii) evidence satisfactory to Fort Knox that IMNET has
previously notified ISG of such Release Condition;
(iii) a written demand that the Deposit Materials be
released and delivered to IMNET;
(iv) a written undertaking from IMNET that the Deposit
Materials being supplied to IMNET will be used only as
permitted under the terms of the Value Added Reseller
Agreement;
(v) specific instructions from IMNET for this
delivery; and
(vi) a cheque payable to Fort Knox in the amount of
one hundred ($100.00)USD.
(c) If the provisions of paragraph 4.1(a) are satisfied, Fort Knox
shall, within five (5) business days after receipt of the notification
and cheque specified in paragraph 4.1(a), deliver the Deposit Materials
in accordance with the applicable instructions.
(d) If the provisions of paragraph 4.1(b) are met, Fort Knox shall,
within five (5) business days after receipt of all the documents
specified in paragraph 4.1(b), send by certified mail to ISG a
photostatic copy of all such documents. ISG shall have thirty (30) days
from the date on which ISG receives such documents ("Objection Period")
to notify Fort Knox of its objection ("Objection Notice") to the release
of
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the Deposit Materials to IMNET and to request that the issue of IMNET's
entitlement to a copy of the Deposit Materials be submitted to
arbitration in accordance with the following provisions:
(i) If ISG shall send an Objection Notice to Fort Knox during
the Objection Period, the matter shall be submitted to, and
settled by arbitration by, a panel of three (3) arbitrators
chosen by the Atlanta Regional Office of the American
Arbitration Association in accordance with the rules of the
American Arbitration Association. The arbitrators shall apply
Georgia law. At least one (1) arbitrator shall be reasonably
familiar with the computer software industry. The decision of
the arbitrators shall be binding and conclusive on all parties
involved, and judgment upon their decision may be entered in a
court of competent jurisdiction. All costs of the arbitration
incurred by Fort Knox, including reasonable attorneys' fees
and costs, shall be paid by the party which does not prevail
in the arbitration; provided, however, if the arbitration is
settled prior to a decision by the arbitrators, ISG and IMNET
shall each pay 50% of all such costs.
(ii) ISG may, at any time prior to the commencement of
arbitration proceedings, notify Fort Knox that ISG has
withdrawn the Objection Notice. Upon receipt of any such
notice from ISG, Fort Knox shall reasonably promptly deliver
the Deposit Materials to IMNET in accordance with the
instructions specified in paragraph 4.1(b)(v).
(e) If, at the end of the Objection Period, Fort Knox has not received
an Objection Notice from ISG, then Fort Knox shall reasonably promptly
deliver the Deposit Materials to IMNET in accordance with the
instructions specified in paragraph 4.1(b)(v).
4.2 Delivery by Fort Knox to ISG. Fort Knox shall release and deliver the
Deposit Materials to ISG upon termination of this Agreement in accordance with
paragraph 7(a) hereof.
5. Indemnity. ISG and IMNET shall, jointly and severally, indemnify and hold
harmless Fort Knox and each of its directors, officers, agents, employees and
stockholders ("Fort Knox Indemnitees") absolutely and forever, from and against
any and all claims, actions, damages, suits, liabilities, obligations, costs,
fees, charges, and any other expenses whatsoever, including reasonable
attorneys' fees and costs, that may be asserted against any Fort Knox
Indemnitee in connection with this Agreement or the performance of Fort Knox or
any Fort Knox Indemnitee hereunder.
6. Disputes and Interpleader.
(a) In the event of any dispute between any of Fort Knox, ISG and/or
IMNET relating to delivery of the Deposit Materials by Fort Knox or to
any other matter arising out of this Agreement, Fort Knox may submit the
matter to any court of competent jurisdiction in an interpleader or
similar action. Any and all costs incurred by Fort Knox in connection
therewith, including reasonable attorneys' fees and costs, shall be borne
50% by each of ISG and IMNET.
(b) Fort Knox shall perform any acts ordered by any court of competent
jurisdiction, without any liability or obligation to any party hereunder
by reason of such act.
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7. Term and Renewal.
(a) The initial term of this Agreement shall be seven (7) years,
commencing on the date hereof (the "Initial Term"). This Agreement shall
be automatically extended for an additional term of one year ("Additional
Term") at the end of the Initial Term and at the end of each Additional
Term hereunder unless, on or before ninety (90) days prior to the end of
the Initial Term or an Additional Term, as the case may be, any party
notifies the other parties that it wishes to terminate the Agreement at
the end of such term. At such time of termination, all fees due under
this Agreement to Fort Knox must be paid prior to termination
(b) In the event of termination of this Agreement in accordance with
paragraph 7(a) hereof, IMNET shall pay all fees due Fort Knox and shall
promptly notify ISG that this Agreement has been terminated and that Fort
Knox shall return to ISG all copies of the Deposit Materials then in its
possession.
8. Fees. ISG and IMNET shall pay to Fort Knox the applicable fees in
accordance with Appendix A as compensation for Fort Knox's services under this
Agreement. The first years fees are due upon receipt of the signed contract or
Deposit Materials, whichever comes first and shall be paid in U.S. Dollars.
(a) Payment. Fort Knox shall issue an invoice to IMNET following
execution of this Agreement ("Initial Invoice"), on the commencement of
any Additional Term hereunder, and in connection with the performance of
any additional services hereunder. Payment is due upon receipt of
invoice, irrespective of when the Deposit Materials are received. All
fees and charges are exclusive of, and IMNET is responsible for the
payment of, all sales, use and like taxes. Fort Knox shall have no
obligations under this Agreement until the Initial Invoice has been paid
in full by IMNET.
(b) Nonpayment. In the event of non-payment of any fees or charges
invoiced by Fort Knox, Fort Knox shall give notice of non-payment of any
fee due and payable hereunder to IMNET and, in such an event, IMNET shall
have the right to pay the unpaid fee within ten (10) days after receipt
of notice from Fort Knox. If IMNET fails to pay in full all fees due
during such ten (10) day period, Fort Knox shall give notice of
non-payment of any fee due and payable hereunder to ISG and, in such
event, ISG shall have the right to pay the unpaid fee within ten (10)
days of receipt of such notice from Fort Knox. Upon payment of the
unpaid fee by either ISG or IMNET, as the case may be, this Agreement
shall continue in full force and effect until the end of the applicable
term. Failure to pay the unpaid fee under this paragraph 8(b) by both
ISG and IMNET shall result in termination of this Agreement.
9. Ownership of Deposit Materials. The parties recognize and acknowledge
that ownership of the Deposit Materials shall remain with ISG at all
times.
10. Available Verification Services. Upon receipt of a written request from
IMNET, Fort Knox and IMNET may enter into a separate agreement pursuant to
which Fort Knox will agree, upon certain terms and conditions, to inspect the
Deposit Materials for the purpose of verifying its relevance, completeness,
currency, accuracy and functionality ("Technical Verification Agreement").
Upon written request from ISG, Fort Knox will issue to ISG a copy of any
written technical verification report rendered in connection with such
engagement. If Fort Knox and IMNET enter into such Technical Verification
Agreement, ISG shall reasonably cooperate with Fort Knox by providing its
facilities, computer systems, and technical and support personnel for technical
verification whenever reasonably necessary. If requested by IMNET, ISG shall
permit one employee of IMNET to be present at ISG's facility during any such
verification of the Deposit Materials.
11. Bankruptcy. ISG and IMNET acknowledge that this Agreement is an
"agreement supplementary to" the License Agreement as provided in Section 365
(n) of Title 11, United States Code (the "Bankruptcy Code"). ISG
acknowledges that if ISG as a debtor in possession or a trustee in Bankruptcy
in a case under the Bankruptcy Code rejects the License Agreement or this
Agreement, IMNET may elect to retain its rights under the License Agreement and
this Agreement as provided in Section 365(n) of the Bankruptcy Code. Upon
written request of IMNET to ISG
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or the Bankruptcy Trustee, ISG or such Bankruptcy Trustee shall not interfere
with the rights of IMNET as provided in the License Agreement and this
Agreement, including the right to obtain the Deposit Material from Fort Knox.
12. Miscellaneous.
(a) Remedies. Except for intentional misrepresentation, gross
negligence or intentional misconduct, Fort Knox shall not be liable to
ISG or to IMNET for any act, or failure to act, by Fort Knox in
connection with this Agreement. Any liability of Fort Knox regardless
of the cause shall be limited to the fees exchanged under this Agreement.
Fort Knox will not be liable for special, indirect, incidental or
consequential damages hereunder.
(b) Natural Degeneration: Updated Version. In addition, the parties
acknowledge that as a result of the passage of time alone, the Deposit
Materials are susceptible to loss of quality ("Natural Degeneration").
It is further acknowledged that Fort Knox shall have no liability or
responsibility to any person or entity for any Natural Degeneration. For
the purpose of reducing the risk of Natural Degeneration, ISG shall
deliver to Fort Knox a new copy of the Deposit Materials at least once
every three years.
(c) Permitted Reliance and Abstention. Fort Knox may rely and shall be
fully protected in acting or refraining from acting upon any notice or
other document believed by Fort Knox in good faith to be genuine and to
have been signed or presented by the proper person or entity. Fort Knox
shall have no duties or responsibilities except those expressly set forth
herein.
(d) Independent Contractor. Fort Knox is an independent contractor, and
is not an employee or agent of either ISG or IMNET
(e) Amendments. This Agreement shall not be modified or amended except
by another agreement in writing executed by the parties hereto.
(f) Entire Agreement. This Agreement, including all appendices hereto,
supersedes all prior discussions, understandings and agreements between
the parties with respect to the matters contained herein, and constitutes
the entire agreement between the parties with respect to the matters
contemplated herein. All appendices attached hereto are by this
reference made a part of this Agreement and are incorporated herein.
(g) Counterparts: Governing Law. This Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and
the same Agreement. This Agreement shall be construed and enforced in
accordance with the laws of the State of Georgia.
(h) Confidentiality. Fort Knox will hold and release the Deposit
Materials only in accordance with the terms and conditions hereof, and
will maintain the confidentiality of the Deposit Materials.
(i) Notices. All notices, requests, demands or other communications
required or permitted to be given or made under this Agreement shall be
in writing and shall be delivered by hand or by commercial overnight
delivery service which provides for evidence of receipt, or mailed by
certified mail, return receipt requested, postage prepaid. If delivered
personally or by commercial overnight delivery service, the date on which
the notice, request, instruction or document is delivered shall be the
date on which delivery is deemed to be made, and if delivered by mail,
the date on which such notice, request, instruction or document is
received shall be the date on which delivery is deemed to be made. Any
party may change its address for the purpose of this Agreement by notice
in writing to the other parties as provided herein.
(j) Survival. Paragraphs 5, 6, 8, 9 and 11 shall survive termination of
this Agreement.
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(k) No Waiver. No failure on the part of any party hereto to exercise,
and no delay in exercising any right, power or single or partial exercise
of any right, power or remedy by any party will preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy. No express waiver or assent by any party hereto to any breach of
or default in any term or condition of this Agreement shall constitute a
waiver of or an assent to any succeeding breach of or default in the same
or any other term or condition hereof.
IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers,
have executed this Agreement as of the date first noted above.
ISG TECHNOLOGIES INC.:
-----------------------------------
Signature
-----------------------------------
Name
-----------------------------------
Title
IMNET:
-----------------------------------
Signature
-----------------------------------
Name
-----------------------------------
Title
FORT KNOX ESCROW SERVICES, INC.
-----------------------------------
Signature
-----------------------------------
Name
-----------------------------------
Title
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APPENDIX A
FEE SCHEDULE
Fees to be paid by IMNET shall be as follows:
<TABLE>
<S> <C>
Initialization fee (one time only) $[*]
Annual maintenance/storage fee
- includes two Deposit Materials updates $[*]
- includes one cubic foot of storage space
Additional Updates $[*]
(above two per year)
Additional Storage Space $[*]
Payable by IMNET or ISG:
Due Upon IMNET's or ISG's
Request for Release of Deposit Materials $[*]
$[*]
</TABLE>
The fees are due upon receipt of the signed contract or Deposit Materials,
whichever comes first and shall be paid in U.S. Dollars. Thereafter, fees
shall be subject to their current pricing, provided that such prices shall not
increase by more than 10% per year.
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APPENDIX B
DETAILED DESCRIPTION OF DEPOSIT MATERIALS
1. The components of ISG's software products listed in the Transaction
Schedule to the Value Added Reseller Agreement as described in its related
documentation; and
2. The following components of the Imaging Application Platform ("IAP"):
[*]
All of the above includes the following:
1. all source codes (i.e. human-readable, programmer useable code);
2. all specifications and technical (design and architecture)
documentation including maintenance tools (test programs and test
specifications);
3. description of the system/program generation; and
4. description and locations of programs not owned by ISG but required
for use and/or support.
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EXHIBIT A
ISG TECHNOLOGIES INC. VIEWING AND READING STATIONS (VRS) RELEASE 2.1
MARKETING SPECIFICATIONS DOCUMENT V5.0
AND
ISG TECHNOLOGIES INC. VIEWING AND READING STATIONS ON NT (VRS-NT) RELEASE 1.0
MARKETING SPECIFICATIONS DOCUMENT V1.1
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EXHIBIT B
LIST OF HIS/RIS COMPANIES
1. Shared Medical Systems
2. Medaphis Corp.
3. SAIC
4. PCS Health Systems, Inc.
5. Lanier Healthcare
6. Meditech
7. Medic Computer
8. Alltel Information Services
9. CSC HealthCare Systems
10. National Data Corp.
11. The Compucare Co., Affinity Division
12. CyCare Systems
13. Sunquest Information Systems
14. Dun & Bradstreet Software
15. GTE Data Services
16. Protocol Systems
17. BRC Health Care
18. HCIA Inc.
19. Physician Computer Network, Inc.
20. Health Data Sciences
21. Keane, Inc.
22. Medicus Systems
23. Enterprise Systems, Inc.
24. Key Communications Service, Inc.
25. GMIS, Inc.
26. AMISYS Managed Care Systems
27. Resource Information Mgmt. Systems, Inc.
28. Kronos, Inc.
29. PeopleSoft, Inc.
30. Transition Systems, Inc.
31. Planar System
32. SunGard Healthcare Information Systems
33. Reynolds and Reynolds Healthcare Systems
34. Erisco
35. VitalCom, Inc.
36. Citation Computer Systems, Inc.
37. American Healthware Systems Inc.
38. Delta Health Systems
39. HCm Inc.
40. Systems Plus, Inc.
41. Management Systems Associates
42. CPSI
43. HPR, Inc.
44. Finsery Healthcare Systems
45. Continental Healthcare Inc.
46. The SSI Group
47. US Servis, Inc.
48. Vector Rresearch, Inc.
49. Lawson Software
50. Management Software, Inc.
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51. CMHC Systems
52. Health Care Data Systems
53. Dynamic Healthcare Technologies, Inc.
54. InfoMed
55. Dairyland Computer & Consulting
56. OACIS Healthcare Systems, Inc.
57. ADAC HealthCare Information Systems
58. American Management Systems
59. Software Technologies Corp.
60. MediQual Systems, Inc.
61. The Potomac Group
62. Quality Systems, Inc.
63. 3M Health Information Systems
64. Soft Computer Consultants
65. Ross Systems, Inc.
66. USAble Systems
67. Care Computer Systems
68. FileNet Corp.
69. Hospital Computer Systems
70. Wismer Martin
71. Codman Research Group, Inc.
72. Century Analysis, Inc.
73. Fred Rothenberg & Associates
74. Collaborative Medical Systems
75. Healthdyne Information Enterprises
76. MedPlus, Inc.
77. Intecom
78. First Coast Systems
79. Kurzwell Applied Intelligence
80. Creative Socio Medics Corp.
81. MECON
82. MSI Solutions Group, Inc.
83. Health Systems Design Corp.
84. SDK
85. Home Care Information Systems
86. O'PIN Systems, Inc.
87. Integrated Medical Networks
88. NLFC, Inc.
89. Computer-RX
90. HealthVISION Corp.
91. Creative Computer Applications
92. Information Network Corp.
93. Biovation
94. RADMANN, Inc.
95. Informedics/Western Star
96. Owen Healthcare
97. Datamedic
98. GE Technology Management Services
99. Andersen Consulting
100. Ernst & Young
101. First Consulting
102. Superior Consulting
103. Cap Geminit
104. Daou Systems
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105. CompuLab Healthcare Systems Corp.
106. Computer Processing Unlimited
107. Consort Technologies, Inc.
108. Dalcon Technologies, Inc.
109. Health Data Services, Inc.
110. Integrated Health Systems, Inc.
111. Shebele/N.T.S., Inc.
112. Swearington Software
113. TwinNet Systems
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EXHIBIT C
IMNET LISTED BUSINESS PARTNERS
1. Advisoft
2. Bell & Howell, Ltd.
3. Cerner
4. Datacom Imaging Systems, Inc.
5. HBO & Company
6. IDX Systems Corporation
7. Integrated Medical Systems, Inc.
8. MINT, b.v.
9. OrNda Healthcorp
10. PHAMIS, Inc.
11. SG2
12. Softnet Systems, Inc.
13. Software AG - Germany (SAG Systemhaus GmbH)
14. Software AG of North America
15. Software AG Nordic A/S
16. Software AG of Far East, Inc.
17. Software AG, UK, Ltd.
18. Systems Programming (Pty) Ltd.
19. [*]
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EXHIBIT D
ISG LISTED CUSTOMERS
1. [*]
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EXHIBIT E
IMNET COMPETITORS
[*]
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EXHIBIT F
CURRENT ISG TRAINING AND SUPPORT PRICES AS AT MARCH 1, 1997
<TABLE>
<S> <C> <C>
1. Telephone Support - normal business hours $[*]*
- Applications for Technical (min 2 hrs)
Note: This fee is for requests beyond the scope of the services provided
under Second Line Support.
2. Telephone Support - after hours $[*]
3. Image Services - normal business hours [*]
- minimum 2 hours
4. On Site labour - normal business hours $[*]
- Applications or Technical (min 2 hrs) or
- Travel & lodging at cost incurred $[*]
5. On Site Labour - after hours $[*]
- Applications or Technical
- Travel & lodging at cost incurred
6. Travel/Waiting time $[*]
- maximum $[*]per call in N.A.
- maximum $[*]per call outside N.A.
7. Applications or Technical Training Courses $[*]
- 2 - days
- travel & lodging excluded
- Held at ISG headquarters
- On site training can be arranged at an additional cost
8. Sales/Marketing
- training course (1 day course) $[*]per person
</TABLE>
Note: All ISG Training and Support Prices above are subject to adjustment by
ISG from time to time.
MAINTENANCE AND SUPPORT TERMS:
- - ISG's normal business hours are 08:00 to 18:00 EST, Monday through Friday
excluding legal and statutory holidays.
- - The ISG 24 hour, toll free Customer Hotline is 1-800-668-7990. Callers
outside North America may call 1-905-672-2100, and ask for Customer
Service.
- - Full Training Course outlines are available from ISG Customer Service.
- - All prices are quoted in US currency.
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- - Travel and lodging invoiced at cost where applicable.
- - ISG will provide IMNET training for the initial six (6) months of this
Agreement at a rate of [*]of ISG's standard rates for such training.
Thereafter, all such training will be provided at ISG's standard rates set
out above.
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