Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 10.71
DISTRIBUTION AND DEVELOPMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of
November 15, 2000 (the "Effective Date") by and between STENTOR, INC., a
Delaware corporation ("Stentor") and IDX SYSTEMS CORPORATION, a Vermont
corporation ("IDX").
W I T N E S S E T H
WHEREAS, Stentor is in the business of developing and marketing
products and services to automate the viewing and archiving of medical images;
and
WHEREAS, IDX, through its Radiology and Imaging Systems Division, has
developed products and services to automate the management of radiology
practices and departments; and
WHEREAS, IDX and Stentor desire to develop integration between their
current products and services and certain future products and services to be
developed by Stentor and IDX to create a comprehensive, state-of-the-art medical
image management system, initially applicable to radiology practices, but
possibly extended to cardiology, pathology, opthamology, orthopedics, emergency
departments and other similar practices that could make use of the system;
NOW, THEREFORE, in consideration of these premises, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. DEFINITIONS
Capitalized terms used in this Agreement, unless otherwise defined in
this Agreement, shall have the meanings ascribed to them on Schedule 1 attached
hereto.
2. TERM AND TERMINATION
2.1 Term. This Agreement shall be in effect for an initial term of
five (5) years (the "Initial Term") and shall automatically renew
for additional, successive two (2) year terms unless earlier
terminated by either of IDX or Stentor by giving written notice
of such party's election not to renew this Agreement not later
than one (1) year prior to the expiration of the Initial Term or
six (6) months prior to the expiration of any then current
successive term.
2.2 Termination. Notwithstanding the provisions of Section 2.1, this
Agreement may be terminated:
2.2.1 by Stentor if IDX shall have defaulted under or breached
any material term of this Agreement and shall not have
cured such breach within one hundred twenty (120) days
after receiving written notice from Stentor specifying
the nature of such default or breach; or
2.2.2 by IDX if Stentor shall have defaulted under or breached
any material term of this Agreement and shall not have
cured such breach within one hundred twenty (120) days
after receiving written notice from IDX specifying the
nature of such default or breach; or
2.2.3 by either party upon receipt of a notice from the other
party that such other party requires a composition or
other similar arrangement with creditors, files for
bankruptcy or is declared bankrupt.
2.3 Termination of Restrictions.
2.3.1 Stentor may elect to terminate Section 6.1.1, as its sole
and exclusive remedy in lieu of any damages under this
Agreement, if:
2.3.1.1 a Material Adverse Change occurs with respect
to IDX; or
2.3.1.2 IDX fails, for any two (2) consecutive calendar
years, to meet the minimum sales goals of sales
of the ▇▇▇▇ System to IDXrad Customers or
LastWord Customers set forth in Exhibit C and
as may be agreed to and set forth in the
Marketing Plan.
2.3.2 If IDX fails after March 31, 2002, to meet the mutually
agreed to goals of sales of the ▇▇▇▇ System to IDXrad
Customers for a calendar quarter as set forth in the
Marketing Plan and does not cure such failure by the end
of the next calendar quarter by licensing a ▇▇▇▇ System
to that number of IDXrad Customers equal to the sum of
the number of IDXrad Customers by which IDX missed the
goal plus the goal for the subsequent calendar quarter,
then Stentor may elect to terminate Section 6.1.1(ii), as
its sole and exclusive remedy in lieu of any damages
under this Agreement
2.3.3 If any of [**] is acquired, becomes Controlled by,
obtains Control of, or becomes under common Control with
a Person that is or becomes authorized to be a
distributor of the ▇▇▇▇ System by Stentor as permitted
under this Agreement, and such company demonstrates its
intention to permanently cease doing business under or
market its products under a name or ▇▇▇▇ similar to
"[**]", as applicable, then Stentor may terminate Section
6.1.1(ii) only with respect to [**], as applicable.
2.3.4 IDX may elect to terminate Section 6.1.2, as its sole and
exclusive remedy in lieu of any damages under this
Agreement, if:
2.3.4.1 a Material Adverse Change occurs with respect
to Stentor; or
2.3.4.2 IDX fails, for any two (2) consecutive calendar
years, to meet the minimum sales goals of sales
of the ▇▇▇▇ System to IDXrad Customers or
LastWord Customers set forth in the Exhibit C
and as may be agreed to and set forth in the
Marketing Plan.
November 15, 2000
2
2.4 Change of Control. If Stentor shall sell all or substantially all
of its assets or IDX shall sell all or substantially all of the
assets of its Radiology Information Systems Division business,
then upon the election of the other party, the party selling its
assets shall be obligated to assign this Agreement to the
successor to its assets and to cause such successor to assume its
performance under this Agreement. Regardless of whether this
Agreement is assigned, the party not selling its assets may elect
to terminate the Agreement upon not less than eighteen (18)
months prior written notice.
2.5 Effect of Termination; Survival. In the event that this Agreement
is validly terminated as provided herein, then each of the
parties shall be relieved of their duties and obligations arising
under this Agreement after the date of such termination, except
for their respective obligations to provide support services to
existing customers under Section 8.1, and such termination shall
be without liability to the terminating party; provided, however,
that the obligations of the parties set forth in Sections 8.1,
9.1, 9.2, 10.1 - 10.21 hereof shall survive any such termination
and shall be enforceable hereunder; provided, further, however,
that nothing in this Section 2.5 shall relieve Stentor or IDX of
any liability for a breach of this Agreement. Furthermore,
termination of this Agreement shall not affect i) any license or
subscription rights granted by either party prior to such
termination or ii) a party's right to continue providing services
pursuant to customer agreements entered into prior to such
termination, provided, however, that each party shall continue to
make payments pursuant to Section 7.
2.6 Intellectual Property. All rights and licenses granted under or
pursuant to this Agreement are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the United States
Bankruptcy Code (the "Code"), licenses to rights to "intellectual
property" as defined in the Code. A party receiving such rights
under this Agreement shall retain and may fully exercise all of
its rights and elections under the Code. The parties further
agree that, in the event of the commencement of a bankruptcy
proceeding by or against a party under the Code, the other party
shall be entitled to retain all of its rights under this
Agreement.
3. OPERATIONAL MANAGEMENT
Stentor and IDX shall each appoint an executive with the title of vice
president or higher to oversee performance under this Agreement. These two
executives shall meet not less frequently than once each calendar quarter during
the Initial Term (and more frequently as needed) and shall produce not later
than five (5) business days after the end of each such calendar quarter a
written report to the boards of directors of IDX and Stentor setting forth in
detail:
3.1 the accomplishments of Stentor and IDX during the preceding
calendar quarter in performing this Agreement;
3.2 plans for managing the relationship between IDX and Stentor
during the next calendar quarter;
November 15, 2000
3
3.3 any items of dispute or disagreement between IDX and Stentor;
3.4 plans for resolving any dispute or disagreement between IDX and
Stentor;
3.5 any changes proposed to be made to the Marketing Plan or
Development Plan; and
3.6 such other items as may be deemed appropriate by such executives.
4. PRODUCT DEVELOPMENT
4.1 Product Development.
4.1.1 Development of the ▇▇▇▇ System. It is the goal of this
Agreement that the parties shall use their commercially
reasonable efforts to develop a comprehensive,
state-of-the-art medical image management system for
radiology practices and departments with functionality
and features substantially equivalent or superior to any
competitive medical image management system available
during the term of this Agreement. To accomplish that
goal, Stentor and IDX shall carry out their obligations
to develop the ▇▇▇▇ System pursuant to the Development
Plan. A party's material failure to deliver a minimum
development requirement (as set forth on Exhibit A) by a
milestone set forth in the Development Plan shall
constitute a material breach of this Agreement.
4.1.2 Joint Testing. The parties shall cooperate to jointly
test any software used in connection with the ▇▇▇▇ System
to ensure the functionality of such software prior to
distribution thereof to any customer.
4.1.3 Development Plan. Within thirty (30) days of the
Effective Date, IDX and Stentor shall mutually develop
the Development Plan, which shall contain minimum
development requirements described on the Development
Plan Outline, attached hereto as Exhibit A. IDX and
Stentor shall update the Development Plan every calendar
quarter during the term of this Agreement unless earlier
updated as necessary to maintain the commercial
reasonableness thereof. The Development Plan, as updated
from time to time, shall describe activities and
responsibilities for one-year periods initially
commencing on the Effective Date. Not later than three
(3) months prior to the expiration of the initial
one-year term of the Development Plan, and thereafter not
later than three (3) months prior to the expiration of
each successive one-year period, the parties shall
commence work on a revised Development Plan for the
following one-year period. The Development Plan, as
updated from time to time, including updating of the
minimum development requirements, shall be executed by
the parties and shall become subject to this Agreement.
Should the parties have failed to agree upon and execute
a revised or updated Development Plan at the time of the
expiration of the then current
November 15, 2000
4
Development Plan, the parties shall continue to perform
under the terms of the then current Development Plan
until such time as the parties shall agree upon a revised
Development Plan. Notwithstanding anything contained
herein or in any Development Plan to the contrary, at all
times during the Term, Stentor shall continue to fund the
development and support of the iSite Viewer, iDiagnostic
Viewer and iVault products as provided in the Development
Plan as initially adopted, and IDX shall continue to
develop and support Imaging Suite, ConnectR, and the
Imaging Suite Lite Version as provided in the Development
Plan as initially adopted.
4.1.4 Early Releases and Testing. IDX and Stentor shall deliver
to each other for testing, development and integration
purposes only, copies of the earliest test releases of
all development deliverables provided for in the
Development Plan prior to delivery thereof to any other
customers or Distribution Partners.
4.1.5 Demonstration Products. Each party shall develop
demonstration versions of its products for use in selling
its products to the other party's customers and
prospects.
4.1.6 Resolution of Programming Errors. Stentor shall be
responsible for correcting all programming errors in
Stentor Products, and IDX shall be responsible for
correcting all programming errors in IDX Products. The
Development Plan shall designate Stentor and IDX
personnel to coordinate the resolution of any programming
errors. To accomplish this goal, Stentor and IDX agree to
resolve programming errors as follows:
Category 1 Programming Error: A Category 1 Programming
Error is an error that causes the software to fail to
operate. If a category 1 programming error occurs in the
▇▇▇▇ System software, IDX and Stentor agree to conduct a
conference call in an effort to resolve the error as soon
as possible but no later than one business day.
Category 2 Programming Error: A Category 2 Programming
Error is an error that substantially affects the proper
operation of the main functions of the ▇▇▇▇ System
software but does not cause the software to fail to
operate. If a Category 2 Programming Error occurs, IDX
and Stentor agree to conduct a conference call in an
effort to resolve the error as soon as possible but no
later than one week.
Category 3 Programming Error: A Category 3 Programming
Error causes the software to function incorrectly under a
particular set of circumstances, although the error does
not substantially affect the proper operation of the main
functions of the ▇▇▇▇ System. If a Category 3 Programming
error occurs, the party responsible for the programming
November 15, 2000
5
error agrees to eliminate the programming error in the
next software update of the ▇▇▇▇ System.
5. LICENSES AND OWNERSHIP
5.1 Ownership; In General. Except for the rights expressly granted
herein to Stentor, IDX reserves and retains all right, title and
interest (including without limitation patents, trade secrets and
copyrights) in the IDX Products, and all customizations,
additions, modifications, changes, enhancements, improvements,
and derivative works thereof made by IDX or on behalf of IDX, and
all rights therein and copies thereof. Except for the rights
expressly granted herein to IDX, Stentor reserves and retains all
right, title and interest (including without limitation patents,
trade secrets and copyrights) in the Stentor Products, and all
customizations, additions, modifications, changes, enhancements,
improvements, and derivative works thereof made by Stentor, or on
behalf of Stentor, and all rights therein and copies thereof
5.2 Ownership to works created under the Development Plan. Any
Intellectual Property developed by Stentor and any derivative
works of Stentor Products, whether developed by Stentor, IDX or a
contractor of either party, pursuant to the Development Plan
shall be owned by Stentor. Any Intellectual Property developed by
IDX and any derivative works of IDX Products, whether developed
by Stentor, IDX or a contractor of either party, pursuant to the
Development Plan shall be owned by IDX. Any Intellectual Property
jointly developed by IDX and Stentor pursuant to the Development
Plan shall be jointly owned by IDX and Stentor and each of IDX
and Stentor shall be free to use such Intellectual Property
without interference from the other party and without any
obligation to pay any royalties or account for any profits,
except as otherwise provided for in this Agreement.
Notwithstanding the foregoing, the parties shall jointly own any
and all patent rights to any work created pursuant to the
Development Plan that combines at least one component of the IDX
Products and one component of the Stentor Products and shall
cooperate in the filing of any application(s) related to such
rights, including, without limitation, the choice of counsel to
prosecute such application(s). Nothing in this Agreement shall
require either party to create any Intellectual Property not a
part of the ▇▇▇▇ System. If either party creates any Intellectual
Property that is not a part of the ▇▇▇▇ System, but may be used
in connection with the ▇▇▇▇ System without the material
assistance of the other party, the creating party shall own any
and all patent rights to the combination of such Intellectual
Property and the ▇▇▇▇ System, and such patent rights shall not be
licensed to the other party under this Agreement except by
written amendment hereto executed by both parties; provided that
each party hereby agrees that if it offers to license the right
to resell or sublicense any such Intellectual Property and the
patent rights, if any, thereto, to any Person, it shall offer to
license the right to resell or sublicense such Intellectual
Property and patent rights, if any, to the other party on the
most favorable terms offered to any other Person.
November 15, 2000
6
5.3 IDX Products.
5.3.1 IDX hereby grants to Stentor a non-exclusive,
non-transferable (except as provided in Sections 2.4 and
10.14) term license to market and sublicense, and in
connection therewith to sell, offer for sale, copy, use,
distribute, perform, display, modify, make derivative
works of and Merge, the IDX Products, in whole or in
part, only as they may be Merged into the ▇▇▇▇ System,
and only to Persons that are not Stentor License
Exclusion Customers. Stentor License Exclusion Customers
include all IDXrad Customers and LastWord Customers
except: (i) any IDXrad Customer or LastWord Customer that
is a Pre-existing Stentor Customer; (ii) any IDXrad
Customer or LastWord Customer that does not use IDXrad or
LastWord as their primary radiology information system or
primary clinical information system, respectively; and
(iii) any IDXrad Customer or LastWord Customer that
becomes a Stentor Customer prior to becoming an IDXrad
Customer or LastWord Customer. Notwithstanding the
limited scope of this license, Stentor may communicate
with, and demonstrate, perform and display the ▇▇▇▇
System to, Stentor License Exclusion Customers to make
them aware of the availability of the ▇▇▇▇ System from
IDX and to provide information to Stentor License
Exclusion Customers regarding the ▇▇▇▇ System. Stentor
License Exclusion Customers that exist as of the
Effective Date are listed on the initial Stentor License
Exclusion Customer List, attached hereto as Exhibit B.
IDX shall provide an updated Stentor License Exclusion
Customer List to Stentor within fifteen (15) days of the
end of each calendar quarter. If the parties determine
that any customers not listed on the initial Stentor
License Exclusion Customer List meet the definition of a
Stentor License Exclusion Customer, then any such
customers shall be added to the Stentor License Exclusion
Customer List, or if the parties determine that any
customers listed on the initial Stentor License Exclusion
Customer List do not meet the definition of a Stentor
License Exclusion Customer, then any such customers shall
be removed from the Stentor License Exclusion List.
5.3.2 IDX also hereby grants to Stentor a non-exclusive,
non-transferable (except as provided in Sections 2.4 and
10.14) term license to sublicense one or more
Distribution Partners to market and sublicense, and in
connection therewith to sell, offer for sale, copy, use,
distribute, perform, and display, the IDX Products, in
whole or in part, only as they may be Merged into the
▇▇▇▇ System, to any Person, including Stentor License
Exclusion Customers.
5.4 Stentor Products. Stentor hereby grants to IDX a non-exclusive,
non-transferable (except as provided in Sections 2.4 and 10.14)
term license to market and sublicense (including through one or
more Distribution Partners acceptable to Stentor), and in
connection therewith to sell, offer for sale, copy, use,
distribute,
November 15, 2000
7
perform, display, modify, make derivative works of and Merge, the
Stentor Products, in whole or in part, only as they may be Merged
into the ▇▇▇▇ System. From the Effective Date until December 31,
2001, Stentor's license granted to IDX in Section 5.4 only
extends to IDXrad Customers and LastWord Customers. IDXrad
Customers and LastWord Customers that exist as of the Effective
Date are listed on the initial IDXrad and LastWord Customer List,
attached hereto as Exhibit B. Any Person that becomes an IDXrad
Customer or LastWord Customer during the Term shall be added to
the IDXrad and LastWord Customer List. After December 31, 2001,
Stentor's license granted to IDX in Section 5.4 extends to any
Person. IDX shall provide an updated IDXrad and LastWord Customer
List to Stentor within fifteen (15) days of the end of each
calendar quarter. If the parties determine that any customers
listed on the initial IDXrad and LastWord Customer List fail to
meet the definition of an IDXrad Customer or LastWord Customer,
then such customers shall be removed from the IDXrad and LastWord
Customer List, or if any customers not listed on the initial
IDXrad and LastWord Customer List do meet the definition of an
IDXrad Customer or LastWord Customer, then such customers shall
be added to the IDXrad and LastWord Customer List.
5.5 Territory. This Agreement and the licenses granted hereunder
shall apply to the parties only in the [**] (the "Territory");
provided that, notwithstanding any restriction to the contrary in
this Agreement, Stentor may enter into an Agreement with another
Person to Provide a medical imaging management system for
radiology practices and departments (that is not the ▇▇▇▇ System)
in the [**] if (i) it is necessary for Stentor to do so in order
for Stentor to enter into an agreement encompassing other [**]
countries that are not at that time included in the Territory and
(ii) Stentor offers IDX the same terms offered any other Person
in the [**] if such terms are more favorable than the terms
offered hereunder. Neither party may distribute or sell the ▇▇▇▇
System in any country not included in the Territory without the
written consent of the other, which shall not be unreasonably
withheld. If a party desires to extend the Territory to another
country, it shall give the other party written notice of its
request to do so. The party requested to extend the Territory to
another country shall have one month from the date of its receipt
of such written notice to elect to extend its performance and six
months from such election to implement any development or
business requirements necessary to extend its performance under
this Agreement to such country. If a party withholds its consent,
then the other party may enter into an agreement with any other
Person with respect to the development and distribution and sale
of a system similar to the ▇▇▇▇ System in such country; provided
that this Agreement shall remain in full force and effect in the
Territory.
5.6 Expansion of Licenses.
5.6.1 If Stentor notifies IDX that a Stentor License Exclusion
Customer is interested in licensing a ▇▇▇▇ System, but
not from IDX, then a representative of Stentor's senior
management who is at least a Vice
November 15, 2000
8
President and a representative of IDX's senior management
who is at least a Vice President shall jointly contact
that Stentor License Exclusion Customer in regard to
licensing a ▇▇▇▇ System. If the Stentor License Exclusion
Customer does not express an interest in licensing a ▇▇▇▇
System from IDX within thirty (30) days of such joint
contact, as determined by a subsequent joint contact by
the Stentor and IDX representatives, then such customer
shall not be considered an Stentor License Exclusion
Customer for purposes of the limitation on the license
granted to Stentor in Section 5.3.1 of this Agreement.
5.6.2 If at the end of any calendar year the number of IDXrad
Customers that became IDXrad Customers in that year that
have also licensed a ▇▇▇▇ System is less than [**]
percent ([**] %) of the total number of IDXrad Customers
that became IDXrad Customers in that year, then the new
IDXrad Customers that have not also licensed a ▇▇▇▇
System shall not be considered Stentor License Exclusion
Customers for purposes of the limitation on the license
granted to Stentor in Section 5.3.1 of this Agreement.
5.6.3 If, prior to December 31, 2001, IDX notifies Stentor that
a Person that is neither an IDXrad Customer or LastWord
Customer is interested in licensing a ▇▇▇▇ System, but
not from Stentor, then a representative of Stentor's
senior management who is at least a Vice President and a
representative of IDX's senior management who is at least
a Vice President shall jointly contact that prospect in
regard to licensing a ▇▇▇▇ System. If the prospect does
not express an interest in licensing a ▇▇▇▇ System from
Stentor within thirty (30) days of such joint contact, as
determined by a subsequent joint contact by the Stentor
and IDX representatives, then the license granted to IDX
pursuant to Section 5.4 shall extend to such prospect
6. MARKETING OF THE ▇▇▇▇ SYSTEM
6.1 Certain Restrictions on Marketing Rights.
6.1.1 Restrictions on Stentor. Stentor shall not (i) Provide to
any Person located in the Territory a medical imaging
management system for radiology practices or departments
other than the ▇▇▇▇ System; or (ii) authorize or license
[**], or the successor of any of them, to Provide the
▇▇▇▇ System or the Stentor Products in the Territory. If
in a particular instance, the use of ConnectR in the ▇▇▇▇
System as a means to provide data exchange between the
▇▇▇▇ System and a non-IDX system would be technologically
impractical, then Stentor may modify the ▇▇▇▇ System in
such instance to use a component other than ConnectR as a
means to provide such data exchange. The restriction set
forth in this Section 6.1.1(i) shall not apply to (a)
Stentor's sale or license of the
November 15, 2000
9
Stentor Component Technology to the extent that the
Stentor Component Technology is not used in a medical
imaging management system that includes substantially
similar functionality to the ▇▇▇▇ System or (b) Stentor's
sale or license to non-IDXrad Customers and non-LastWord
Customers of a version of iSite that contains only the
workflow, worklist and API functionality of the current
iSite version 1.1.1 offering (i.e. it shall contain no
third party vendor workflow or reconciliation built into
iSite), and that cannot be used by a third party to build
functionality competitive to the ▇▇▇▇ System other than
the functionality substantially similar to that contained
in the current iSite version 1.1.1.
6.1.2 Restrictions on IDX. IDX shall not (i) Provide to any
Person located in the Territory a medical imaging
management system for radiology practices or departments
other than the ▇▇▇▇ System, except that this restriction
shall not prohibit IDX from cooperating with any Person
that Provides products and services similar to the
Stentor Products for the purpose of deploying such
products and services to implement a medical imaging
management system, on a case-by-case basis to any IDXrad
Customer or LastWord Customer, including without
limitation by development of data exchange or interfaces,
if such IDXrad Customer or LastWord Customer requests IDX
to do so; (ii) Provide Imaging Suite to any Person in the
Territory except (A) IDXrad Customers or LastWord
Customers and (B) IDX Customers other than IDXrad
Customers and LastWord Customers to enable other IDX
products to distribute medical images, if only a subset
of the components of Imaging Suite is used and the subset
of components operates as a background service, such that
there is no display of the Imaging Suite brand to the
customer; or (iii) market the ▇▇▇▇ System except through
IDX's RISD sales organization or with the active
involvement of a member of IDX's RISD sales organization
in any creation of a sales quote, configuration, or sales
demonstration.
6.1.3 Imaging Suite Workflow Engine. The restrictions contained
in Section 6.1.2 shall not apply to the "workflow engine"
component of the Imaging Suite when used or licensed by
IDX separate from the other components of Imaging Suite
as Merged with any other IDX application and without the
display of the Imaging Suite brand.
6.2 Marketing Plan; Joint Marketing Duties.
6.2.1 Marketing Plan. Within thirty (30) days of the Effective
Date, IDX and Stentor shall mutually develop and, during
the Term, shall regularly update a marketing plan for
marketing the ▇▇▇▇ System in general (the "Marketing
Plan"). The Marketing Plan shall obligate IDX to make
commercially reasonable efforts to make presentations
about the ▇▇▇▇ System to appropriate representatives of
all of IDX's IDXrad Customers and LastWord Customers
before December 31, 2001, and shall describe
November 15, 2000
10
detailed activities and responsibilities (including
without limitation, with respect to implementation) and
sales forecasts over the initial two-year period of this
Agreement, but shall be updated not less frequently than
every three (3) months. Not less than three (3) months
prior to the expiration of the initial two-year period,
and thereafter three (3) months prior to the expiration
of each successive two-year period of the Initial Term,
the parties shall commence work on a revised Marketing
Plan for the following two-year sales forecast period.
The initial and each revised two-year Marketing Plan
shall be executed by the parties and shall be subject to
the terms of this Agreement. Should the parties have
failed to agree upon and execute a revised Marketing Plan
at the time of the expiration of the then current
Marketing Plan, the parties shall continue to perform
under the terms of the then current Marketing Plan until
such time as the parties shall agree upon a revised
Marketing Plan. When marketing the ▇▇▇▇ System to IDXrad
Customers and LastWord Customers, IDX shall be
responsible for hardware used during any pilot period
offered by IDX. The Marketing Plan shall include sales
goals for sales of the ▇▇▇▇ System to IDXrad Customers as
set forth on Exhibit C.
6.2.2 Joint Marketing Materials. At their joint expense, shared
equally, Stentor and IDX shall develop and produce
product marketing documentation and materials similar in
kind and quality to that currently provided by Stentor
and IDX to their respective sales prospects for the
purpose of promoting and marketing the ▇▇▇▇ System.
6.2.3 User Groups and Trade Shows. Stentor shall provide for
featured participation by IDX at Stentor's user group
meetings involving the Stentor Products, and IDX shall
provide for featured participation by Stentor at IDX's
user group meetings involving the IDXrad and LastWord
products. In accordance with the Marketing Plan, Stentor
and IDX shall publicize the alliance created hereby at
appropriate trade shows.
6.2.4 Non-revenue Arrangements. IDX and Stentor shall each
cooperate with the other on any non-revenue generating
implementations of the ▇▇▇▇ System for public relations
or research purposes, provided that neither party shall
be obligated to provide any implementation or support
services for a non-revenue generating implementation
initiated by the other party.
6.3 Use of Stentor Names and Marks. IDX may use the following names
and marks in all customer communications pertaining to the
marketing, support and distribution of the ▇▇▇▇ System and in
accordance with Stentor's reasonable branding standards in effect
from time to time: Stentor, iSite, iSyntax, and DTS. IDX shall
use the ▇▇▇▇ "Stentor" and applicable Stentor Product marks,
without alteration of the graphical representation of such marks
specified by Stentor, in connection with all sales of the ▇▇▇▇
System containing any Stentor Products in addition to any other
marks or tradenames that IDX chooses to use in connection
November 15, 2000
11
with the ▇▇▇▇ System. Stentor shall provide to IDX, for IDX's use
in accordance with this Section, additional proprietary
trademarks, as developed, for the Stentor Products.
6.4 Use of IDX Names and Marks. Stentor may use the following names
and marks in all customer communications pertaining to the
marketing, support and distribution of the ▇▇▇▇ System and in
accordance with IDX's reasonable branding standards in effect
from time to time: Imaging Suite and ConnectR. Stentor shall use
the ▇▇▇▇ "Imaging Suite", without alteration of the graphical
representation of such ▇▇▇▇ specified by IDX, in connection with
all sales of the ▇▇▇▇ System and Stentor Products containing the
Imaging Suite in addition to any other marks or tradenames that
Stentor chooses to use in connection with the ▇▇▇▇ System and
Stentor Products. IDX shall provide to Stentor, for Stentor's use
in accordance with this Section, additional proprietary
trademarks, as developed, for the IDX Products.
6.5 License Terms. Each party shall have the authority, to the extent
expressly provided in this Agreement, to market, sell, resell and
distribute the ▇▇▇▇ System pursuant to its own terms and
conditions so long as such terms and conditions contain
provisions as protective of the other party as those set out in
Exhibit D. Each party shall obligate its Distribution Partners to
license the ▇▇▇▇ System under terms that are protective as those
set forth in Exhibit D.
7. COMPENSATION
7.1 Compensation; Payment. IDX and Stentor shall be entitled to
compensation for their respective licensing to the other of their
respective rights and technology incorporated into the ▇▇▇▇
System as set forth in Exhibit E. The Royalties set forth in
Exhibit E only apply to the ▇▇▇▇ System. Stentor hereby warrants
that the compensation retained by or paid to any Person
authorized by Stentor to distribute the ▇▇▇▇ System shall not
exceed [**] % of Net Revenue for an existing customer of the
Person and [**] % of Net Revenue for other customers.
7.2 Payments. Any payment to be made by a party pursuant to this
Agreement shall be made no later than sixty (60) days after
payment is due from the customer on which the payment is based,
and shall be made by delivery of a check, payable to the order of
the party entitled to payment or by wire transfer of immediately
available funds to an account designated by such party.
7.3 Late Fees. Each party agrees to pay late fees equal to one and
one-half percent (1 1/2%) per month on all amounts due but not
paid within the time provided in Section 7.2.
7.4 Certification; Independent Auditor. Not later than the fifteenth
(15th) day after the end of each calendar quarter, each party
shall deliver to the other a statement setting forth the
customers to which the ▇▇▇▇ System was licensed in such quarter
and the calculation of the payments due for the previous quarter,
or if
November 15, 2000
12
none so stating, and signed by an executive officer of the party
furnishing the statement. Stentor and IDX agree to permit the
other party, annually at its own expense, to engage a mutually
acceptable independent auditor to confirm the accuracy of any
payments made under this Agreement. Stentor and IDX each agree to
maintain books and records of its sales required to conduct such
audit and to cooperate with the independent auditor in auditing
such books and records.
8. SERVICES
8.1 Customer Implementation and Support Services. Each of IDX and
Stentor shall implement the ▇▇▇▇ System for their respective
customers without the assistance of the other. Stentor and IDX
shall each provide to the other party reasonable assistance in
the distribution of hardware from those hardware manufacturers
with which they each have reseller or distributor relationships
so long as doing so does not violate the applicable reseller or
distributor agreement or applicable law. IDX shall provide the
first line of support for all customers to which IDX has sold the
▇▇▇▇ System, provided that Stentor shall provide the second line
of support for any issue requiring access to or modification of
the Source Code to any Stentor Product. Stentor shall provide the
first line of support for all customers to which Stentor has sold
the ▇▇▇▇ System, provided that IDX shall provide the second line
of support for any issue requiring access to or modification of
the Source Code to any IDX Product. Stentor and IDX shall each
comply with the other party's implementation requirements with
respect to the other party's products and each shall use
commercially reasonable efforts to provide support for its
products in accordance with its internal support procedures. IDX
and Stentor shall each provide the other sufficient training to
ensure proper implementation of each party's component portions
of the ▇▇▇▇ System.
8.2 Service Quality. All support services provided by either party
shall be performed in a good and workmanlike manner and
consistent with standards generally applicable in the healthcare
clinical information systems industry and consistent with the
reasonable and customary support standards maintained in the
healthcare clinical information systems industry.
8.3 Uptime Performance Guarantee.
8.3.1 Stentor Uptime Performance Guarantee. After March 31,
2001, if Stentor elects to offer an "uptime performance
guarantee" and a defect in an IDX Product is the sole
cause of "unscheduled downtime" (as defined in the
Stentor Uptime Performance Guarantee attached hereto as
Exhibit F), then IDX shall use its commercially
reasonable efforts to cure such defect. IDX's obligation
to use its commercially reasonable efforts to cure such
defect shall be Stentor's sole and exclusive remedy, in
lieu of any damages that might be caused by breach of
this Agreement arising from or related to unscheduled
downtime caused by a defect in an IDX Product.
November 15, 2000
13
8.3.2 IDX Uptime Performance Guarantee. If IDX elects to offer
an "uptime performance guarantee" substantially
equivalent to the Stentor Uptime Performance Guarantee,
and a defect in a Stentor Product is the sole cause of
"unscheduled downtime" (as defined in the IDX uptime
performance guarantee), then Stentor shall use its
commercially reasonable efforts to cure such defect.
Stentor's obligation to use its commercially reasonable
efforts to cure such defect shall be Stentor's sole and
exclusive remedy, in lieu of any damages that might be
caused by breach of this Agreement arising from or
related to unscheduled downtime caused by a defect in an
Stentor Product.
8.4 Reference Sites. IDX agrees to introduce Stentor to Stentor
License Exclusion Customers reasonably acceptable to both IDX and
Stentor so that Stentor may request that such customers act as
reference sites for the ▇▇▇▇ System for potential Stentor ▇▇▇▇
System prospects.
9. WARRANTIES
THE PARTIES MAKE THE FOLLOWING REPRESENTATIONS AND WARRANTIES, ALL OF
WHICH SHALL BE FOR AND COMPLETE AS OF THE EFFECTIVE DATE AND THE DATE OF ANY AND
ALL DELIVERIES HEREIN. EXCEPT FOR THE EXPLICIT WARRANTIES MADE IN THIS
AGREEMENT, THERE ARE NO WARRANTIES MADE BY EITHER PARTY IN CONNECTION WITH THE
SUBJECT MATTER OF THIS AGREEMENT AND EACH PARTY SPECIFICALLY DISCLAIMS ANY
IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND TITLE.
9.1 IDX Warranties.
9.1.1 Encumbrances. The IDX Products shall be free and clear of
all liens, restrictions, claims, charges, security
interests, or other encumbrances of any nature whatsoever
which might affect or adversely impact on Stentor's use
of the IDX Products as permitted under this Agreement.
9.1.2 Ownership; Right to License. IDX owns or otherwise has
adequate rights to make the grants of the licenses to the
IDX Products to Stentor hereunder and possesses all
rights and interests in the IDX Products necessary to
enter into this Agreement; provided that Stentor
acknowledges that licenses to certain products of
Microsoft, Oracle and Amzi used with the IDX Products
must be obtained directly by Stentor or customers to
which Stentor sells the ▇▇▇▇ System.
9.1.3 No Infringement. IDX Products and all components thereof
do not infringe upon the intellectual property rights,
including without limitation the patent, copyright,
trademark or trade secret rights, of any third parties.
November 15, 2000
14
The sole and exclusive remedy for breach of this warranty
shall be as set forth in Section 10.6.
9.1.4 Functional Performance. The IDX Products shall perform
substantially as described in their documentation.
9.1.5 Anti-Virus Testing. IDX represents and warrants that the
IDX Products will be tested prior to shipping for known
computer viruses in accordance with commercially
reasonable industry standards, including the use of
industry standard anti-virus detection software, and IDX
represents and warrants that the IDX Products shall be
free of viruses.
9.2 Stentor Warranties.
9.2.1 Encumbrances. The Stentor Products shall be free and
clear of all liens, restrictions, claims, charges,
security interests, or other encumbrances of any nature
whatsoever which might affect or adversely impact on
IDX's use of the Stentor Products as permitted under this
Agreement.
9.2.2 Ownership; Right to License. Stentor owns or otherwise
has adequate rights to make the grants of the licenses to
the Stentor Products to IDX hereunder and possesses all
rights and interests in the Stentor Products necessary to
enter into this Agreement.
9.2.3 No Infringement. Stentor Products and all components
thereof do not infringe upon the intellectual property
rights, including without limitation the patent,
copyright, trademark or trade secret rights, of any third
parties. The sole and exclusive remedy for breach of this
warranty shall be as set forth in Section 10.6.
9.2.4 Functional Performance. The Stentor Products shall
perform substantially as described in their
documentation.
9.2.5 Anti-Virus Testing. Stentor represents and warrants that
the Stentor Products will be tested prior to shipping for
known computer viruses in accordance with commercially
reasonable industry standards, including the use of
industry standard anti-virus detection software, and
Stentor represents and warrants that the Stentor Products
shall be free of viruses.
10. MISCELLANEOUS
10.1 Confidentiality.
10.1.1 Confidential Information. Each of IDX and Stentor will
receive or learn from, information, both orally and in
writing, concerning the business of Stentor or IDX,
respectively, including, without limitation, financial,
technical and marketing information, data, and
information related to the
November 15, 2000
15
development of technology and services relating to
business plans, customers, and markets, which information
is deemed, in the case of Stentor, proprietary to Stentor
and, in the case of IDX, proprietary to IDX. Both parties
hereby agree, as set forth below, to protect such
information, whether furnished before, on or after the
date of this Agreement, as it protects its own similar
confidential information, but never less than by
commercially reasonable efforts, and not to disclose such
information to anyone except as otherwise provided for in
this Agreement. Such information, in whole or in part,
together with analyses, compilations, programs, reports,
proposals, studies or any other documentation prepared by
the parties, as the case may be, which contain or
otherwise reflect or make reference to such information,
is hereinafter referred to as "Confidential Information".
Each party hereby agrees that the Confidential
Information will be used solely for the purpose of this
Agreement and not for any other purpose. Each party
further agrees that any Confidential Information
pertaining to the other party is the sole and exclusive
property of such other party, and that the receiving
party shall not have any right, title, or interest in or
to such Confidential Information except as expressly
provided in this Agreement. Each party further agrees to
protect and not to disclose to anyone (except as provided
in this Agreement) for any reason Confidential
Information pertaining to the other party; provided,
however, that: (a) such Confidential Information may be
disclosed to the receiving party's respective officers,
directors, employees, agents, or representatives
(collectively, "Representatives") on a "need to know"
basis for the purpose of this Agreement on the condition
that (i) each of such Representatives will be informed by
the receiving party of the confidential nature of such
Confidential Information and will agree to be bound by
the terms of this Agreement and not to disclose the
Confidential Information to any other person and (ii)
each party agrees to accept full responsibility for any
breach of this Section 10.1.1 by its respective
Representatives; and (b) Confidential Information
pertaining to the other party may be disclosed upon the
prior written consent of the other party. Each party
hereby agrees, upon the request of the other party, to
promptly deliver to the other party at the other party's
cost the Confidential Information pertaining to such
other party, without retaining any copies thereof.
Specifically and without limitation, each party agrees to
notify the other party promptly in writing upon any
officer or director learning of any unauthorized
disclosure or use of the Confidential Information.
10.1.2 Non-Confidential Information. The term" Confidential
Information" shall not include any information: (i) which
at the time of disclosure or thereafter is generally
available to or known by the public (other than as a
result of a disclosure directly or indirectly by the
receiving party); (ii) is independently developed by the
receiving party, without reference to or use of, the
Confidential Information of the other party; (iii) was
known by
November 15, 2000
16
the receiving party as of the time of disclosure without
a breach of confidentiality; (iv) is lawfully learned
from a third party not under obligation to the disclosing
party; or (v) is required to be disclosed pursuant to a
subpoena, court order or other legal process, whereupon
the receiving party shall provide prompt written notice
to the other party prior to such disclosure.
10.2 No-Solicitation. During the first year of the term of this
Agreement, neither party, nor any Affiliate within its Control,
shall solicit to hire any individual who had been in the employ
of the other party or any of the other party's Affiliates until
such time as one (1) year has passed since such individual was in
the employ of the other party.
10.3 Regulatory Matters. Each party shall adopt, implement, and
maintain appropriate and compliant policies, procedures, and
practices necessary to comply with laws and regulations
(including without limitation the Health Insurance Portability
and Accountability Act of 1996 ("HIPAA") and the Federal Food,
Drug and Cosmetic Act (the "FDA Act")) applicable to it in its
business and applicable to it as a business partner of a customer
of the other to whom products or services are provided under this
Agreement. The parties agree to amend this Agreement to contain
any provisions necessary to be included as a result of such
business partner status. Each party agrees to timely develop and
include in its respective products covered by this Agreement the
functionality required to support the minimum necessary standards
applicable users of its products as required by HIPAA.
10.4 No Consequential Damages. In no event shall either party or any
Affiliate of either party be liable hereunder for any
consequential, special, incidental, punitive or indirect damages
(including without limitation loss of profit, revenue, business
opportunity or business advantage), whether based upon a claim or
action of tort, contract, warranty, negligence, strict liability,
breach of statutory duty, or any other legal theory or cause of
action, even if advised of the possibility of such damages.
10.5 Limitation of Liability. Neither party shall be liable to the
other for damages or costs under this Agreement in excess of
payments received from the other under this Agreement; provided
that this limitation shall not apply to either party's
indemnification obligation pursuant to Section 10.6(iii), and
further provided that the limitation of liability applicable to
either party's indemnification obligation pursuant to Section
10.6(i) shall be an aggregate of Ten Million Dollars
($10,000,000) and each party shall carry liability insurance
against all risks sufficient to cover such indemnification
obligation. Each party must provide certificates of such
insurance coverage upon request of the other and shall not change
or alter such coverage without notice to the other party.
November 15, 2000
17
10.6 Indemnification. Each party (an "Indemnifying Party") will
indemnify the other party, its officers, employees, and agents
(each an "Indemnified Party" and, collectively, the "Indemnified
Parties") against, and hold each Indemnified Party harmless from,
all claims, suits, judgments, losses, damages, fines or costs
(including reasonable legal fees and expenses) ("Losses")
resulting from any claim, suit, or demand by any third party
("Third Party Claim") for injuries to or deaths of persons or
loss of or damage to property arising out of: (i) the
Indemnifying Party's products or services as marketed by the
Indemnified Parties, unless the Indemnified Parties shall have
acted outside the scope of their rights under this Agreement;
(ii) the Indemnifying Party's performance or willful misconduct
of the Indemnifying Party, its employees, officers, or agents in
connection with the Indemnifying Party's performance, of this
Agreement, except to the extent caused by the negligence of any
Indemnified Party, and (iii) that the Indemnifying Party's
products, or any component thereof, whether used alone or in
combination with any other item as intended, designed, suggested
or induced by the Indemnifying Party or its agents, infringes or
violates any patents, copyrights, trademarks, trade secrets,
licenses, or other proprietary rights of any third party.
10.6.1 The Indemnifying Party's obligations under this Section
10.6 will survive the termination of this Agreement.
10.6.2 Each Indemnified Party shall give an Indemnifying Party
prompt written notice of any Third Party Claim of which
such Indemnified Party has knowledge concerning any
Losses as to which such Indemnified Party may request
indemnification hereunder. If the Indemnifying Party
acknowledges in writing its obligation to indemnify the
Indemnified Party hereunder against any Losses that may
result from such Third Party Claim, then the Indemnifying
Party shall be entitled to assume and control the defense
of such Third Party Claim at its expense and through
counsel of its choice if it gives notice of its intention
to do so to the Indemnified Party within five (5) days of
the receipt of such notice from the Indemnified Party;
provided, however, that if there exists or is reasonably
likely to exist a conflict of interest that would make it
inappropriate in the judgment of the Indemnified Party,
in its sole and absolute discretion, for the same counsel
to represent both the Indemnified Party and the
Indemnifying Party, then the Indemnified Party shall be
entitled to retain its own counsel, at the expense of the
Indemnifying Party. In the event the Indemnifying Party
exercises the right to undertake any such defense against
any such Third Party Claim as provided above, the
Indemnified Party shall cooperate with the Indemnifying
Party in such defense and make available to the
Indemnifying Party, at the Indemnifying Party's expense,
all witnesses, pertinent records, materials and
information in the Indemnified Party's possession or
under the Indemnified Party's control relating thereto as
is reasonably required by the Indemnifying Party.
Similarly, in the event the Indemnified Party is,
directly or indirectly,
November 15, 2000
18
conducting the defense against any such Third Party
Claim, the Indemnifying Party shall cooperate with the
Indemnified Party in such defense and make available to
the Indemnified Party, at the Indemnified Party's
expense, all such witnesses, records, materials and
information in the Indemnifying Party's possession or
under the Indemnifying Party's control relating thereto
as is reasonably required by the Indemnified Party. No
such Third Party Claim may be settled by the Indemnifying
Party without the prior written consent of the
Indemnified Party.
10.6.3 In no event shall the Indemnifying Party be liable to an
Indemnified Party for any indirect, incidental, special,
punitive, exemplary or consequential damages arising out
of or otherwise relating to this Agreement, even if the
Indemnifying Party has been advised of the possibility or
likelihood of such damages.
10.6.4 The Indemnifying Party's obligations to indemnify as set
forth in Section 10.6(iii) shall not apply to any claim
to the extent that it arises from (i) any modifications,
changes, additions, or enhancements to the Indemnifying
Party's products that have not been made directly by the
Indemnifying Party or have not been made at its express
direction or under its direct oversight, control or
supervision, (ii) any such modifications made by the
Indemnifying Party at the request or to the specification
of the Indemnified Party, the Indemnified Party's
Customers, or any of their agents.
10.7 Expenses. Except as otherwise specified in this Agreement, all
costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants,
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such
costs and expenses.
10.8 Further Assurances and Documents. IDX and Stentor shall take all
actions and do all things, including without limitation the
execution and delivery of instruments and documents, necessary to
effectuate the purposes and intent of this Agreement.
10.9 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given
or made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by courier service, by telecopy
or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this Section
10.9):
November 15, 2000
19
(a) if to Stentor:
Stentor, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Oran Muduroglu
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to IDX:
IDX Systems Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: General Counsel at the same
address
10.10 Public Announcements. Except as required by law, governmental
regulation or by the requirements of any securities exchange on
which the securities of a party hereto are listed, no party to
this Agreement shall make, or cause to be made, any press
release or public announcement, not including routine
advertisements subsequent to an initial joint announcement, in
respect of this Agreement or the transactions contemplated
hereby or otherwise communicate with any news media without the
prior written consent of the other party, consent which shall
not be unreasonably withheld, and the parties shall cooperate as
to the timing and contents of any such press release or public
announcement.
10.11 Headings. The descriptive headings contained in this Agreement
are for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
10.12 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any law,
governmental regulation or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the
greatest extent possible.
November 15, 2000
20
10.13 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject
matter hereof and supersede all prior agreements and
undertakings, both written and oral, with respect to the subject
matter hereof.
10.14 Assignment. This Agreement shall be binding upon the parties and
their respective successors, representatives and permitted
assigns and their Affiliates Controlled by them, respectively.
Except as provided in Section 2.4, neither party may assign this
Agreement without the prior written consent of the other party,
except that either party hereto may assign its rights hereunder
to an Affiliate of such party and IDX may assign this Agreement
to any Person that acquires all or substantially all of the
assets of IDX's Radiology Information Systems Division and IDX
shall be relieved of any obligation or liability hereunder. If
IDX shall sell or transfer any of its assets, other than the
assets of IDX's Radiology Information Systems Division, to a
Person that is not an Affiliate of IDX, then such Person shall
not have any obligations or liabilities under this Agreement and
the assets transferred shall not be encumbered by or subject to
this Agreement in any way.
10.15 No Third Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and
their permitted assigns and successors and nothing herein,
express or implied, is intended to or shall confer upon any
other person or entity, any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this
Agreement.
10.16 Amendment. This Agreement may not be amended or modified except
by an instrument in writing signed by, or on behalf of, each of
the parties.
10.17 Governing Law. This Agreement shall be governed by the laws of
the State of California without regard to its conflict of laws
provisions.
10.18 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be
an original but all of which taken together shall constitute one
and the same agreement.
10.19 Dispute Resolution If a dispute, controversy, or claim arising
out of or related to this Agreement or with the relationship of
the parties arises, then the parties shall attempt to resolve
the dispute by means of the procedure set forth in this Section.
The party believing itself aggrieved (the "Requesting Party")
will call for progressive management involvement in the
negotiation of the dispute by notice to the other party. Such a
notice will be without prejudice to the Requesting Party's right
to any other remedy permitted by this Agreement. The parties
will use their best efforts to arrange personal meetings or
telephone conferences as needed, at mutually convenient times
and places, between negotiators for the parties at the following
successive management levels, each of which will have a period
of allotted time as specified below in which to attempt to
resolve the dispute:
November 15, 2000
21
Level Stentor IDX Allotted Time
-------------- ----------------- -------------------------------- ----------------
First Stentor Vice Vice President of Development 10 Business Days
President for RISD
Second CEO General Manager of RISD 10 Business Days
Third CEO President 30 Days
The allotted time for the first-level negotiators will begin on
the effective date of the Requesting Party's notice. If a
resolution is not achieved by negotiators at any given
management level at the end of their allotted time, then the
allotted time for the negotiators at the next management level,
if any, will begin immediately. If a resolution is not achieved
by negotiators at the final management level within their
allotted time, then the parties' CEO's shall engage in a
mediation session using one or more third-party mediators
mutually acceptable to the parties within thirty (30) days. The
dispute resolution requirements set forth in this Section 10.19
shall not apply to claims arising out of or related to: (a) any
infringement or misappropriation of Stentor's or IDX's
Intellectual Property, and (b) any violation of the
confidentiality obligations set forth in Section 10.1.
10.20 Waiver of Jury Trial. Each of the parties hereto irrevocably and
unconditionally waives trial by jury in any legal action or
proceeding relating to this Agreement or the transactions
contemplated hereby and for any counterclaim therein.
10.21 No Joint Venturer Status. None of the provisions of this
Agreement is intended to create, nor shall any provision in this
Agreement be deemed or construed to create, any relationship
between Stentor and IDX other than that of independent entities
contracting with each other under this Agreement solely for the
purpose of effecting the provisions of this Agreement. Neither
of the parties, nor any of their employees, shall be construed
to be the partner, joint venturer, agent, employer or
representative of the other
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized signatories thereunto duly
authorized as of the day and year first above written.
IDX SYSTEMS CORPORATION STENTOR, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. By: /s/ Oran Muduroglu
----------------------------------- -------------------------------
[Signature of Authorized Agent] [Signature of Authorized Agent]
Print Name and Title: Print Name and Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Vice President Oran Muduroglu, President & CEO
November 15, 2000
22
SCHEDULE 1
TO
DEVELOPMENT AND DISTRIBUTION AGREEMENT
DEFINITIONS
"Affiliate" means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such specified Person.
"Change of Control" means any event, transaction or occurrence, with the
exception of an initial public offering, as a result of which either of IDX or
Stentor (i) shall cease to own or control, directly or indirectly through any of
its respective Affiliates, a majority of the voting rights associated with
ownership of its respective voting stock or (ii) shall cease to have the
ability, directly or indirectly, through one or more of its Affiliates, to elect
a majority of its respective board of directors.
"ConnectR" means the product currently marketed by IDX under the trademark
"ConnectR."
"Control" including the terms "Controlling," "Controlled by," and "under common
Control with," means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise, with the
exception of an initial public offering.
"Development Plan" means the Development Plan to be created pursuant to the
Development and Distribution Agreement.
"iDiagnostic Viewer" means the product to be developed under the Development
Plan and currently referred to as iDiagnostic Viewer.
"Distribution Partner" means any Person that has the right to market,
cooperatively market, distribute, resell, sublicense, license, sell or otherwise
provide a party's products or services, including by way of example and not in
limitation, any reseller, distributor, licensee, customer, contractor, service
provider, co-marketer, outsourcing vendor, or other information technology
company.
"Dynamic Transfer Syntax" or "DTS" means the product currently marketed by
Stentor under the marks Dynamic Transfer Syntax or DTS.
"IDX" means IDX Systems Corporation, IDX Information Systems Corporation, IDX
Investment Corporation, and their present and future Affiliates.
"IDX Customer" means any customer of IDX that is licensed to use any product
sold by IDX and any and all entities that have access to such product through
such customer, including without limitation IDXrad Customers and LastWord
Customers.
"IDX Drivers" means the IDX modality drivers for downloading demographics and
exam information to the imaging scanners in accordance with DICOM Modality
Worklist standard, and the uploading of study specific information from the
imaging scanner to the Imaging Suite in accordance with the DICOM Perform
Procedure Step standard.
"IDX Products" means the products currently marketed as Imaging Suite and
ConnectR, the IDX Drivers, and any derivative works or future versions thereof.
"IDXrad" means the products currently marketed by IDX under the ▇▇▇▇ IDXrad and
future versions thereof containing substantially similar functions.
"IDXrad Customer" means (i) any customer of IDX that is licensed to use IDXrad
and (ii) any and all entities that have access to IDXrad databases through such
customer.
"Imaging Suite" means the product currently marketed by IDX under the ▇▇▇▇
Imaging Suite.
"Imaging Suite Lite Version" means a version of Imaging Suite for installation
by Stentor at a non-IDXrad or LastWord site that does not require the
installation and configuration of the IDXrad system, but that can be operated in
concert with a pre-existing non-IDX radiology information system or healthcare
information system.
"iSite" means the product currently marketed by Stentor under the ▇▇▇▇ iSite.
"iSyntax Server" means the product currently marketed by Stentor under the ▇▇▇▇
iSyntax Server.
"iVault" means the product to be developed under the Development Plan and
currenty referred to as the iVault.
"Intellectual Property" means, without limitation, know-how, trade secrets,
inventions (whether or not patentable), ideas, materials, discoveries,
techniques, plans, designs, formulas, processes, invention disclosures,
technology, data or information, software and documentation therefor, hardware,
source code (including all programmers' notes), procedures, methods, works and
other documentation and information and the right to ▇▇▇ and recover damages for
past, present and future infringement of such intellectual property.
"LastWord" means the product currently marketed by IDX under the trademark
LastWord and future versions thereof containing substantially similar functions.
"LastWord Customer" means (i) any customer of IDX that is licensed to use
LastWord and (ii) any and all entities that have access to LastWord databases
through such customer.
"Material Adverse Change" means any material adverse change in the business,
properties, results of operations, condition (financial or otherwise) of an
applicable Person (other than changes that are the result of economic factors
affecting the economy as a whole or changes that are the result of factors
generally affecting the specific industry or markets in which a party competes).
2
"Merge" means the process of merging all or a portion of existing software or
documentation into other software or documentation or adding to existing
software or documentation, including without limitation by application program
interfaces, so that the resulting software or documentation contains
functionality that is substantially more or different from that of the existing
software or documentation.
"▇▇▇▇ System" means the medical imaging management system consisting of the
combination of both Imaging Suite and ConnectR and at least one of the Stentor
Products, as described in the Development Plan and on the diagram attached to
the Agreement as Exhibit G. The ▇▇▇▇ System shall not include any products,
features or functionality not described in either the Development Plan or the
diagram attached as Exhibit G.
"Person" means any individual, partnership, firm, corporation, association,
trust, limited liability company, limited liability partnership, unincorporated
organization or other entity, as well as any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of
1934, as amended.
"Pre-existing Stentor Customer" means any Stentor Customer that existed as of
the Effective Date of this Agreement.
"Provide" means to market, sell, license, cooperatively market, or otherwise
distribute, including through one or more Distribution Partners.
"Regulatory Requirements" means all federal and state laws and regulatory
requirements applicable to the use by IDX, IDX Customers, Stentor, and Stentor
Customers of the ▇▇▇▇ System from time to time during the term of the
Development and Distribution Agreement, including without limitation those
applicable to billing and claims submittal, managed care, data transmission,
security and privacy, and program requirements generally applicable to
healthcare organizations, such as those involving accreditation.
"Stentor Component Technology" means Stentor's proprietary technology to
distribute data and images, including enhancements and improvements thereto,
including, but not limited to, technology used in iSyntax to distribute
image(s), or portions thereof, by transforming the image(s) into a flexible
hierarchical representation and by distributing, to a client, only the transform
data necessary to reconstruct the portion(s) of the image(s) desired at the
client.
"Stentor Customer" means any customer of Stentor that is licensed to use any
product sold by Stentor and any and all entities that have access to such
product through such customer, but shall not include any customer that is in an
evaluation period and not obligated to pay fees to Stentor for the Stentor
Product.
"Stentor License Exclusion Customer" means all IDXrad Customers and LastWord
Customers except: (i) any IDXrad Customer or LastWord Customer that is a
Pre-existing Stentor Customer; (ii) any IDXrad Customer or LastWord Customer
that does not use IDXrad or LastWord as their primary radiology information
system or primary clinical information system, respectively; (iii) any IDXrad
Customer or LastWord Customer that becomes a Stentor Customer prior to becoming
an IDXrad Customer or LastWord Customer; or (iv) any IDXrad Customer or
3
LastWord Customer that ceases to remain a Stentor License Exclusion Customer
pursuant to Section 5.6.
"Stentor Products" means the products marketed by Stentor and currently known as
the iDiagnostic Viewer, DTS, iSite Viewer, iSyntax Server, iVault, any future
versions thereof, and any derivative works or future versions thereof.
4
EXHIBIT A
MINIMUM DEVELOPMENT REQUIREMENTS
[**]
November 15, 2000
EXHIBIT B
IDX CONFIDENTIAL AND PROPRIETARY
IDXrad and LastWord Customer List
IDX HOUSE ACCOUNTS LISTING STATE
IDXrad Customers
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LASTWORD CUSTOMERS
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IDX SYSTEMS CORPORATION CONFIDENTIAL 11/21/00
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EXHIBIT C
Minimum Sales Goals
The Marketing Plan shall include the following minimum sales goals:
Sale of the ▇▇▇▇ System, or any component thereof, by either party to IDXrad
Customers or LastWord Customers as follows:
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These sales goals assume that Stentor has developed iSite Version 2.0 as
described in the Development Plan and that it is available for general release
no later than March 31, 2001. The timing of these sales goals shall be delayed
by one month for each month or portion of a month that the general release of
iSite Version 2.0 is delayed beyond March 31, 2001.
November 15, 2000
EXHIBIT D
REQUIRED END USER AGREEMENT PROVISIONS
End user agreements shall contain provisions as protective of the parties as the
following provisions:
1. IN NO EVENT SHALL [IDX's/Stentor's] SUPPLIERS AND LICENSORS BE LIABLE FOR
ANY DAMAGES OF ANY KIND OR NATURE, INCLUDING DIRECT, INDIRECT, INCIDENTAL,
SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL, ARISING OUT OF THE USE OF ANY
SOFTWARE SUPPLIED BY COMPANY, ITS SUPPLIERS OR LICENSORS. THE LICENSEE
UNDERSTANDS AND AGREES THAT THE SOFTWARE PROVIDED BY [IDX/Stentor] TO LICENSEE
CONTAINS SOFTWARE THAT IS THE COPYRIGHTED PRODUCT AND A TRADE SECRET OF
[IDX/Stentor] OR ITS SUPPLIERS AND LICENSORS, AND THAT LICENSEE WILL NOT USE ANY
SUCH SOFTWARE IN VIOLATION OF THE RESTRICTIONS CONTAINED IN THIS AGREEMENT AND
WILL NOT DISCLOSE THE SOFTWARE TO ANYONE OTHER THAN ITS EMPLOYEES OR AGENTS AS
REASONABLY NECESSARY FOR THE PURPOSE OF THIS AGREEMENT AND ON THE CONDITION THAT
IT ACCEPTS FULL RESPONSIBILITY FOR ANY BREACH HEREOF BY ANY SUCH INDIVIDUAL. THE
FOREGOING AGREEMENTS ARE FOR THE EXPRESS BENEFIT OF [IDX/Stentor], ITS SUPPLIERS
AND LICENSORS, AND MAY BE ENFORCED BY [IDX/Stentor], AND ITS SUPPLIERS AND
LICENSORS.
2. QUALIFIED MODALITY
[IDX/STENTOR] shall provide Customer a list of medical imaging equipment or
modalities ("Qualified Modalities") for Customer's use with the ▇▇▇▇ System
Software/Services. Customer shall contact [IDX/Stentor] immediately if any
additional modalities are added or a modification to an existing Qualified
Modality occurs. A modification to a Qualified Modality includes any type of
change, enhancement or upgrade to that modality, including software upgrades or
revisions. Customer accepts full responsibility for any failure or any other
adverse consequences that may occur if Customer uses ▇▇▇▇ System Software with
any modality other than a Qualified Modality.
3. SERVICE EQUIPMENT
Service Equipment: shall mean all equipment supplied to or used by Customer in
conjunction with the ▇▇▇▇ System Software/Services.
Access To Service Equipment: Customer shall provide remote network access to the
Service Equipment and ▇▇▇▇ System Software, including providing to [IDX/Stentor]
the necessary security information to access the Service Equipment over a
network. In addition, Customer shall provide to [IDX/Stentor] personnel physical
access to all Service Equipment and ▇▇▇▇ System Software subsequent to receipt
of reasonable notice by [IDX/Stentor].
E-Mail Services: The Customer shall allow outgoing e-mail from Service Equipment
either through the customers SMTP e-mail services or shall allow service
equipment to access the [IDX/Stentor] SMTP e-mail service.
November 15, 2000
No Modification to Service Equipment: Customer agrees not to modify, in any way,
or tamper with the Service Equipment and any software operating on the Service
Equipment. Customer may access Service Equipment during installation, in
accordance with specific instructions from [IDX/Stentor] personnel. In addition,
Customer may access Service Equipment for system administration of ▇▇▇▇ System
Software to assign user identifications and grant user passwords. Customer
agrees not to load any additional software on Service Equipment.
4. PROPRIATARY RIGHTS AND CONFIDENTIALITY
Ownership: Customer acknowledges and agrees that Stentor-IDX owns the sole and
exclusive worldwide right, title and interest in and to the ▇▇▇▇ System
Software/Services, and ▇▇▇▇ Documentation as well as all worldwide intellectual
property rights therein and all copies thereof, in whole and in part, subject
only to Customer's limited licensed rights to receive and use such ▇▇▇▇ System
Software/Services, and ▇▇▇▇ Documentation as permitted by this Agreement.
Duty of Confidentiality: To protect [IDX/Stentor] Proprietary Information,
Customer agrees that Customer will not decompile, reverse engineer, disassemble
or otherwise reduce the ▇▇▇▇ System Software/Services to a human perceivable
form or permit any other party to do so. Customer may not modify, adapt,
translate, rent, lease, sell, sublicense, loan, resell for profit, distribute,
time-share [except as either IDX or Stentor specifically allows customer to
allow access to third parties] or create any derivative works based upon, the
▇▇▇▇ System Software/Services, and otherwise any and all information, regardless
of form, that is confidential, proprietary and/or a trade secret of
[IDX/Stentor] ("[IDX/Stentor] Proprietary Information") or any portion thereof
or permit any other party to do so.
Customer shall limit disclosure of [IDX/Stentor] Proprietary Information to its
employees who have a need to know the information in connection with the receipt
of the ▇▇▇▇ System Software/Services. Customer may permit members of its medical
community to observe operation of the ▇▇▇▇ System Software/Services on a limited
basis if they have a need to do so. In no event and under no circumstances shall
Customer reproduce, in any form, ▇▇▇▇ System Software and Documentation. In
addition, Customer shall not reproduce computer screen displays generated by the
iSite(TM) client software. Customer shall not disclose [IDX/Stentor] Proprietary
Information to other parties (except members of its medical community as
described above) or use [IDX/Stentor] Proprietary Information for purposes other
than use of the ▇▇▇▇ System Software/Services, except that it may disclose or
use:
a) any information that [IDX/Stentor] expressly authorizes it, in
writing, to disclose;
b) any information that is, through no breach of this or any other
agreement with [IDX/Stentor], in the public domain; and any
information that it is required by law to disclose.
Customer agrees to take appropriate action to bind all employees and consultants
regarding their obligations under this Agreement with respect to use, copying,
modification, confidentiality, protection and security of the [IDX/Stentor]
Proprietary Information. Customer agrees that any use or attempted use of
[IDX/Stentor] Proprietary Information in violation of the restrictions of this
Agreement is a material breach of the Agreement which will cause irreparable
harm to [IDX/Stentor], entitling [IDX/Stentor] to injunctive relief in addition
to all legal remedies. The
November 15, 2000
duty of confidentiality set forth in this Section shall survive three (3) years
subsequent to termination the agreement.
5. WARRANTY DISCLAIMER:
EXCEPT FOR THE FOREGOING EXPRESS WARRANTIES (IF ANY), [IDX/STENTOR] MAKES NO
WARRANTIES, EITHER EXPRESS OR IMPLIED, UNDER THIS AGREEMENT AND HEREBY DISCLAIMS
ALL IMPLIED WARRANTIES, INCLUDING ANY WARRANTIES REGARDING MERCHANTABILITY,
FITNESS FOR PURPOSE OR CORRESPONDENCE WITH DESCRIPTION. THERE IS NO WARRANTY
THAT THE [IDX/STENTOR] PROPRIETARY SOFTWARE IS FREE FROM PROGRAMMING ERRORS.
[IDX/Stentor] shall have no liability and responsibility under the [express
warranties] if:
a) The ▇▇▇▇ Licensed Software/Service has been altered or damaged by
accident, neglect, misuse or other abuse;
b) Customer has failed to provide an operating environment (e.g., air
temperature, electrical surge protection, etc.) for the computer
equipment operating the ▇▇▇▇ System that complies with general
industry standards for the safe operation of computer equipment;
c) Customer has loaded unauthorized software onto the computer equipment
operating the ▇▇▇▇ System;
d) The ▇▇▇▇ Licensed Software/Service is operating in conjunction with a
modality that is not a Qualified Modality;
e) The ▇▇▇▇ Licensed Software/Service is not the latest update released
to Customer; or
f) The Customer has failed to notify [IDX/Stentor] in writing, during the
License Term, of any defect Customer contends is a breach of warranty.
6. LIMITED LIABILITY:
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY LOST PROFITS, LOSS
OF BUSINESS OR FOR INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL, PUNITIVE OR
SPECIAL DAMAGES SUFFERED BY CUSTOMER, IT'S CUSTOMERS, EMPLOYESS AND PATIENTS OR
OTHERS ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE ▇▇▇▇ SYSTEM SOFTWARE /
SERVICES, DOCUMENTATION OR ANY OTHER STENTOR PRODUCTS OR SERVICES, FOR ALL
CAUSES OF ACTION OF ANY KIND (INCLUDING BUT NOT LIMITED TO TORT, CONTRACT,
NEGLIGENCE, STRICT PRODUCT LIABILITY AND BREACH OF WARRANTY) EVEN IF SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. STENTOR'S LIABILITY WILL IN
NO EVENT EXCEED THE TOTAL DOLLARS PAID BY CUSTOMER FOR ▇▇▇▇ SYSTEM
SOFTWARE/SERVICES.
November 15, 2000
CONFIDENTIAL Page 1
EXHIBIT E
To Distribution and Development Agreement by and between Stentor,
Inc. and IDX Systems Corporation
COMPENSATION TERMS
1. Stentor shall pay Royalties to IDX on sale of ▇▇▇▇ Systems by Stentor or a
Stentor Distribution Partner, as follows:
A. If Stentor Provides a ▇▇▇▇ System to any End User, Stentor shall pay
IDX an amount equal to [**] % of the greater of (i) [**] for such ▇▇▇▇
System and (ii) [**]; provided that if after the Effective Date but
prior to December 31, 2001, IDX Provides IDXrad or LastWord to the
same customer after Stentor Provides a ▇▇▇▇ System to that customer,
Stentor shall pay IDX an amount equal to [**] % of the greater of (i)
[**] for such ▇▇▇▇ System or (ii) [**] to such customer.
B. If a Stentor Distribution Partner Provides a ▇▇▇▇ System to an IDXrad
Customer or a LastWord Customer that is a Stentor License Exclusion
Customer, Stentor shall pay IDX an amount equal to [**] % of the
greater of (i) [**] for such ▇▇▇▇ System or (ii) [**].
C. If a Stentor Distribution Partner Provides a ▇▇▇▇ System to any person
who (i) is not an IDXrad Customer or a LastWord or (ii) an IDXrad or
LastWord Customer that is not a Stentor License Exclusion Customer,
Stentor shall pay IDX an amount equal to [**] % of the greater of (i)
[**] for such ▇▇▇▇ System, or (ii) [**].
2. IDX shall pay Royalties to Stentor on sale of ▇▇▇▇ Systems by IDX or an IDX
Distribution Partner, as follows:
A. If IDX Provides a ▇▇▇▇ System to an IDXrad Customer or LastWord
Customer, IDX shall pay Stentor an amount equal to [**] % of the
greater of (i) [**] for such ▇▇▇▇ System or (ii) [**].
B. If IDX or an IDX Distribution Partner Provides a ▇▇▇▇ System to
any person who is not an IDXrad Customer or LastWord Customer,
IDX shall pay Stentor an amount equal to [**] % of the greater of
(i) [**] for such ▇▇▇▇ System or (ii) [**].
3. Stentor in its discretion shall determine its own List Price for a ▇▇▇▇
System not later than December 31 of each Calendar year during the term of
this Agreement. This Stentor List Price will be used to calculate the [**]
as set forth below. The sole effect of the Stentor List Price on IDX will
be to make this royalty calculation. IDX retains complete discretion over
prices relating to the ▇▇▇▇ System licensed by IDX.
4. For the purposes of this Exhibit E the defined terms set forth below shall
apply. In the case of any conflict or inconsistency between the defined
terms in this Exhibit and those defined in the Agreement, those set forth
in this Exhibit shall govern and control with respect to this Exhibit, and
those set forth in the Agreement shall govern and control with respect to
the Agreement.
The following table is provided for convenience in applying the above payment
obligations and is intended to be duplicative. If there is any conflict
between the above rules and this table, the above rules shall govern and
control.
END USER SOLD BY ROYALTY PAID TO ROYALTY
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IDXrad Customer or LastWord Customer IDX Stentor [**] % of the greater of [**] OR [**]
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IDXrad Customer or LastWord Customer that is Stentor IDX [**] % of the greater of [**] OR [**]
a Stentor License Exclusion Customer Distribution Partner
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Any End User (but see the last row in this Stentor IDX [**] % of the greater of [**] OR [**]
table if such customer subsequently becomes
an IDXrad
CONFIDENTIAL Page 2
Customer or LastWord Customer between the
Effective Date and December 31, 2001)
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Not an IDXrad Customer or LastWord Customer IDX Stentor [**] % of the greater of [**] OR [**]
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Not an IDXrad Customer or LastWord Customer Stentor IDX [**] % of the greater of [**] OR [**]
or an IDXrad Customer or LastWord Customer Distribution Partner
that is not a Stentor License Exclusion
Customer
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Pre-existing Stentor Customer who becomes an IDX Stentor [**] % of the greater of [**] OR [**]
IDXrad Customer or LastWord Customer and
subsequently or concurrently buys all or
part of a ▇▇▇▇ System
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Stentor Customer who becomes an IDXrad Stentor IDX [**]% of the greater of [**]or [**]paid
Customer or LastWord Customer after the for all ▇▇▇▇ System components
Effective Date but prior to December 31, 2001 (regardless of their date of sale) and
payments aremade from the date the
customer becomes an IDX Customer
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5. Stentor shall pay a royalty to IDX for each IDX Driver licensed to an End
User by either Stentor or a Stentor Distribution Partner equal to the
greater of (i) [**]% of [**] or (ii) $[**] for each imaging device to which
such IDX Driver(s) is connected. IDX in its discretion shall set the [**]
not later than December 31 of each Calendar year during the term of this
Agreement provided that the [**] shall not be increased by more than the
annual increase in the Consumer Price Index, all items, all urban
consumers, U.S. city average for such year + [**]%.
DEFINED TERMS
Exhibit E to Distribution and Development Agreement by
and between Stentor, Inc. and IDX Systems Corporation
"Agreement" means the Development and Distribution Agreement between IDX and
Stentor of which this Exhibit E is a part.
"Authorized Licensor" means a Party or a Distribution Partner of a Party
authorized pursuant to the Agreement.
"Control"(including similar terms such as "Controlling," "Controlled by") shall
have the meaning set forth in Rule 12b-2 promulgated under the Securities
and Exchange Act of 1934.
"Distribution Partner" means a person authorized by a Party to distribute the
▇▇▇▇ System pursuant to the Agreement.
"End User" means a person to whom an Authorized Licensor Provides a ▇▇▇▇ System.
"Gross Revenue" means [**] charged by an Authorized Licensor to an End User for
[**]. "Revenue" does not include [**] charged by an Authorized Licensor to
an End User for [**]. "IDXrad Customer" means (i) any customer of IDX that
is licensed to use IDXrad and (ii) any and all entities that have access to
IDXrad databases through such customer.
"LastWord Customer" means (i) any customer of IDX that is licensed to use
LastWord and (ii) any and all entities that have access to LastWord
databases through such customer.
"IDX Driver" shall have the meaning set forth in the Agreement.
CONFIDENTIAL Page 3
"Maintaining" means error correction, updates, and new versions of the ▇▇▇▇
System and its components.
"▇▇▇▇ System" means a system consisting of the ▇▇▇▇ System (as defined in the
Agreement), plus all other component items Provided by an Authorized
Licensor in connection therewith, such as equipment, software, and services
obtained from a Third Party.
"Minimum Royalty Base" in connection with [**] such ▇▇▇▇ System [**].
"Net Revenue" [**].
"Party" means IDX Systems Corporation or Stentor Incorporated.
"Pre-existing Stentor Customer" means any Stentor Customer that existed as of
the Effective Date of this Agreement.
"Provide" (and similar terms such as "Providing") shall have the meaning set
forth in the Agreement.
"Royalty" means the fee to be paid to a Party by a Party when such Party
Provides a ▇▇▇▇ System under the Agreement.
"Stentor Customer" means any customer of Stentor that is licensed to use any
product sold by Stentor and any and all entities that have access to such
product through such customer, but shall not include any customer that is
in an evaluation period and not obligated to pay fees to Stentor for the
Stentor Product
"Stentor License Exclusion Customer" means all IDXrad Customers and LastWord
Customers except (i) any IDXrad Customer or LastWord Customer that is a
Pre-existing Stentor Customer; (ii) any IDXrad Customer or LastWord
Customer that does not use IDXrad or LastWord as their primary radiology
information system or primary clinical information system, respectively;
(iii) any IDXrad Customer or LastWord Customer that becomes a Stentor
Customer prior to becoming an IDXrad Customer or LastWord Customer; or (iv)
any IDXrad Customer or LastWord Customer that ceases to remain a Stentor
License Exclusion Customer pursuant to Section 5.6.
"Stentor List Price" means the price that Stentor lists for retail sale of a
▇▇▇▇ System as set pursuant to this Exhibit E.
"Third Party", when referred to in the context of a discussion of a particular
Authorized Licensor, means any person not Controlled by, Controlling, or
under common Control with such Authorized Licensor, as the context
requires.
"Third Party Costs" means all of the actual costs of any good or services of a
▇▇▇▇ System Provided by an Authorized Licensor, if such costs are payable
to a Third Party, but does not include royalties paid to IDX or Stentor.
EXHIBIT F
STENTOR UPTIME PERFORMANCE, GUARANTEE
As an Application Service Provider (ASP), Stentor, Inc. provides image
distribution on a per-use basis. The ASP model insulates the institution from
hardware and software obsolescence and enables Stentor to guarantee [**]% uptime
performance for iSite.
In the event that Stentor is unable to meet our [**]% uptime performance
guarantee per month, we will discount that month's fee as follows:
UPTIME PERFORMANCE DISCOUNT
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1) Every [**]% deviation will provide a [**]% discount for that month's
fee
2) Uptime performance less than [**]% will provide [**]
System Uptime Terms and Definitions
. STENTOR guarantees it's authorized and licensed users of iSite server
that the product is [**]% available per month as defined in the
following terms and conditions.
. All time is measured in an increment of one-hour units. Fractions are
truncated.
. One month is defined as a calendar month. For example, April has 30
days but May has 31 days, therefore, actual required time for this
guarantee will be variable.
. Customer supplied equipment refers to any devices that STENTOR did not
supply directly to customers (network cables, fibers, hubs, hospital
network, telephone lines etc.)
Stentor Uptime Performance Guarantee-Confidential - 9/18/2000
November 15, 2000
. Stentor customer support representatives are anyone who is authorized
to respond to customer outage situations (e.g., This can include third
party agents who are authorized to perform the response tasks).
. [**]% Uptime means the Stentor iSite system is functionally accessible
by all authorized users for [**]% of the time when an access is
requested by the devices that are connected to the server.
Availability is measured at the standard point of demarcation (SPOD),
and outside of the scheduled and external downtime periods as defined
in this document.
. Customer's Designated Contact is a contact person at the customer site
that shall judge STENTOR's uptime claims.
. The Standard Point of Demarcation (SPOD) is defined at the network
connection interface installed at the iSite server computer hardware.
For example if 100 Base T network hardware is being used, the Ethernet
contact pins on the Ethernet card installed on the iSite server shall
be "our" uptime responsibility. The pins on the connector and beyond
are customer's uptime domains. This is the demarcation point that QA
procedure uses.
. Downtime shall be categorized into three modes: Unscheduled Downtime,
Scheduled Downtime, and External Downtime.
. Unscheduled downtime shall begin upon notification of Stentor by an
authorized customer representative that the iSite server could not be
accessed beyond the SPOD. This instance of unscheduled downtime shall
be predicated on the fact that there was no advance notification by
STENTOR in the 24-hour period prior to the outage. The cause of outage
must be originated within the STENTOR supplied equipment and software.
The unscheduled downtime shall commence upon the first response by a
STENTOR customer service representative to the notification from the
authorized customer representative regarding the down system issue and
a trouble ticket has been logged
. Scheduled downtime shall be defined as the period that iSite servers
are inaccessible due to scheduled system maintenance. Scheduled
downtime shall be scheduled at STENTOR's discretion with notification
to the customer's designated contact. Typical scheduled downtime
includes preventative maintenance and system upgrades. Automatic and
scheduled re-boot and restart shall be categorized under the scheduled
down time so long as the frequency and time of occurrence has been
communicated to the customer's designated contact. The scheduled
downtime shall begin when access to the iSite server is completely
impaired, and does not include the duration of notification period.
. External downtime shall be defined as when iSite servers are
inaccessible due to events that are not in STENTOR's control. These
events shall include, but are not limited to, events due to natural
causes such as prolonged power failures, electrical surges due to
lightening, flood, fire, and manual shutdowns at the sole discretion
of the customer without prior notification to Stentor, Inc. Note,
however, that any failure in the iSite server computer that STENTOR
supplies is subject to Unscheduled Downtime measurement.
. STENTOR shall express uptime and downtime metrics based on a
percentage number based on hourly increments through one calendar
month.
. All downtime ends when a STENTOR customer support representative has
confirmed and recorded the resumption time of the availability and/or
received one heartbeat report
Stentor Uptime Performance Guarantee - Confidential - 9/18/2000
November 15, 2000
back from the server, provided there are not external problems beyond
the SPOD which prevent the heartbeat report from reaching STENTOR.
. Uptime metrics shall be measured in "total round-trip" manner. A
system is considered "up" if an image can be "pushed" to the iSite
server and the same image can be accessible within 30 minutes of the
initial "push". If there is criteria is not met than the system shall
be considered down.
. Uptime percentage (measured in hours) = (Unscheduled Downtime
hours)/(Number of hours in a given month) * 100.
Informational: Aggregate Uptime Table
ANNUAL ... AND IN ONE CALENDAR MONTH, WE
UPTIME APPROXIMATE DURATION THAT CAN BE CAN AFFORD TO GO DOWN APPROXIMATELY
RATE DOWN PER ASTRONOMICAL YEAR. THIS LONG.
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ASSUMPTIONS
The following assumptions are being made:
. There is a way to continuously measure and monitor the uptime in a
round-trip manner. The proposal for this is included in my
"Heart-Beat" monitor definitions.
. We assume that hardware is sufficiently reliable and do not perform
hardware specific tests other than setting up an acceptable selection
criteria. The computer hardware we have chosen has a minimum MTBF
value of 45,000 hours or greater (approximately 5 years). The system
MTBF for the purpose of uptime guarantee shall be based on the minimum
MTBF component installed on the entire system. For example, if an
Ethernet card has a MTBF of 20,000 hours but the rest of the systems
have a MTBF of 100,000 hours then the entire system is deem to fail
within 20,000 hours, and we shall reject a choice of such hardware.
Under these selection criteria, this author assumes that more than
99.99% of the hardware in the field shall operate continuously.
. If a recoverable failure occurs on a redundant component, this event
shall not be considered a downtime. For example, if a one of the
RAID-5 volume goes down, but the system is available, then that is not
considered as a system failure so long as we are meeting the Uptime
criteria, and we can recover from this condition during the Scheduled
downtime. Likewise, if we supply a cluster of redundant servers and
one of the server goes down, that is not considered as a downtime so
long as the user can access the active server transparently.
Setentor Uptime Performance Guarantee - Confidential - 9/18/2000
November 15, 2000
. All iSite Server hardware is supplied to the customer as part of the
Stentor Service Agreement. The supplied hardware is covered under
Stentor's Service Agreement with [**].
. Only Stentor approved software may be resident on the iSite
Server. The presence of non Stentor approved software residing on
the iSite Server will invalidate the [**]% uptime guarantee.
. If the customer is supplying their own hardware for the iSite
Server, that hardware must be purchased to Stentor's
specification, only Stentor approved software applications may
reside on said server, and the customer must provide a [**]
service agreement equivalent to Stentor's service agreement with
[**].
Setentor Uptime Performance Guarantee - Confidential - 9/18/2000
November 15, 2000
EXHIBIT G
COMPONENTS OF THE IDX/STENTOR INTEGRATED PRODUCT OFFERING
[**]
IDX Confidential 11/21/00
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