Exhibit 10.35

 

VITAL IMAGES, INC.

AND

TOSHIBA CORPORATION

 

MARKETING AND DISTRIBUTION AGREEMENT

 

THIS AGREEMENT is made as of January 21, 2002 by and between Vital Images, Inc.,
a Minnesota corporation having its principal place of business at 3300 Fernbrook
Lane N., Suite 200, Plymouth, Minnesota 55447 USA (“Vital Images”) and Toshiba
Corporation, Medical Systems Company, having its place of business at 1385,
Shimoishigami, Otawara-Shi, Tochigi 324-8550, Japan (“Toshiba”).

 

RECITALS

 

A.                                            Vital Images develops and licenses
proprietary medical visualization software products (defined below as the
“Products”) and desires to increase the marketing and distribution of the
Products.

 

B.                                             Toshiba possesses the necessary
expertise and marketing organization to promote, market, distribute and support
the Products.

 

C.                                             Vital Images desires to appoint
Toshiba, and Toshiba desires appointment, as a nonexclusive reseller of the
Products.

 

NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter set forth, the parties agree as follows:

 

ARTICLE 1:  DEFINITIONS

 

For purposes of this Agreement, the following words, terms and phrases shall
have the following meanings unless the context otherwise requires:

 

1.1                                 Confidential Information.  “Confidential
Information” shall mean all information designated by a party as confidential
and which is disclosed by Vital Images to Toshiba or its Dealer Associates, as
hereinafter specified, is disclosed by Toshiba or its Dealer Associates to Vital
Images, or is embodied in the Products, regardless of the form in which it is
disclosed, relating to markets, customers, products, patents, inventions,
procedures, methods, designs, strategies, plans, assets, liabilities, prices,
costs, revenues, profits, organization, employees, agents, resellers or business
in general, or, in the case of Vital Images, the algorithms, programs, user
interfaces and organization of the Products.

 

1.2                                 First Level Maintenance.  “First Level
Maintenance” shall mean electronic, telephone or in-person response to deal with
any problem or software bug in the Product which is provided by Vital Images,
Toshiba or the Dealer Associates, as hereinafter specified, to customers in the
Territory who have installed the Products that are under Vital Images’ standard
warranty or standard software maintenance program.  Such response shall attempt
(i) to identify the nature and extent of the customer’s problem, (ii) if
appropriate, to obtain a copy of magnetic media, hard copy printout or
electronic file forwarded over the internet containing the problem or software
bug to be forwarded promptly to Vital Images electronically or by facsimile, and
(iii) to advise the customer in the application of any recommended solution or
workaround to such problem or bug.

 

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1.3                                 Government Approval.  “Government Approval”
shall mean any approvals, licenses, registrations or authorizations of any
federal, state or local regulatory agency, department, bureau or other
government entity, foreign or domestic, necessary for use, marketing, sale or
distribution of the Products in a regulatory jurisdiction, including without
limitation the U.S. Food and Drug Administration (“FDA”).

 

1.4                                 Products.  “Products” shall mean only those
computer software products in object code form as described in Exhibit A and any
related user documentation as released from time to time by Vital Images,
including any later authorized releases or versions of such software or
documentation during the term of this Agreement.

 

1.5                                 Second Level Maintenance.  “Second Level
Maintenance” shall mean electronic, telephone or in-person response provided by
Vital Images to Toshiba or the Dealer Associates to deal with any problem or
software bug in the Products that cannot be handled by Toshiba or the Dealer
Associate alone under the First Level Maintenance for such customers in the
Territory who have installed the Products that are under Vital Images’ standard
warranty or standard software maintenance program.

 

1.6                                 Territory.  “Territory” shall mean the area
described in Exhibit B.

 

1.7                                 Vitreaâ 2.  “Vitreaâ 2” shall mean 2-D and
3-D medical visualization software marketed by Vital Images under the name
“Vitreaâ 2.”

 

ARTICLE 2:  APPOINTMENT

 

2.1                                 Scope.  Vital Images hereby appoints
Toshiba, and Toshiba hereby accepts such appointment, as Vital Images’
nonexclusive reseller of the Products during the term of this Agreement in the
Territory, subject to all the terms and conditions of this Agreement.

 

2.2                                 Dealer Associates.  Effective with the
signing of this Agreement, Toshiba hereby appoints and Vital Images consents to
the appointment of, the Toshiba subsidiaries and distributors listed in Exhibit
C as its agents to market and distribute the Products within the Territory
(collectively “Dealer Associates”). Provided, however, Toshiba shall remain
fully liable for the performance of such Dealer Associates and Toshiba hereby
indemnifies and holds Vital Images harmless from all damages, losses, costs or
expenses arising in any manner from any act or omission on the part of such
Dealer Associates.  Toshiba shall furnish Vital Images with a copy of any such
appointment agreement with any Dealer Associates.  Further, Toshiba hereby
agrees to use its best efforts to integrate Toshiba Medical Systems Co., Ltd in
Japan (“TMSJ”) as a Dealer Associate, and Toshiba and Vital Images hereby agree
to amend any related provisions of this Agreement, including Exhibits B, C, E, F
and G at such time that TMSJ becomes a Dealer Associate.

 

2.3                                 Use of Terms.  The terms “sale”, “purchase”,
“distribution”, “resale”, “reseller” and “Dealer” are used herein for
convenience only and refer to the sale of software licenses for the Products. 
Toshiba hereby acknowledges Vital Images retains all right, title and interest
in and to the copyrights and other intellectual property rights in the Products
and that such Products are to be distributed to Toshiba’s and Dealer Associate’s
customers in compliance with such acknowledgment.

 

ARTICLE 3:  GENERAL OBLIGATIONS OF TOSHIBA

 

3.1                                 Marketing.  Toshiba shall have the following
obligations with respect to the marketing and distribution of the Products:

 

(a)                                  To use its commercially reasonable best
efforts to further the promotion, marketing and distribution of the Products in
the Territory;

 

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(b)                                 Outside of the United States, to install
only authorized versions of the Products as supplied by Vital Images for
customers in the Territory;

 

(c)                                  To promptly respond to all inquiries or
complaints from customers; outside of the United States, to provide all
necessary and appropriate First Level Maintenance of the Products; and to
cooperate with Vital Images in the provision of the Second Level Maintenance;

 

(d)                                 To provide Vital Images with appropriate
details of all complaints and bugs found in the Products, whether such
complaints or bugs were discovered by Toshiba, any of its Dealer Associates or
customers thereof;

 

(e)                                  To reasonably investigate possible leads
with respect to potential customers in the Territory who are referred to Toshiba
by Vital Images;

 

(f)                                    To maintain an adequately trained and
staffed sales and technical support group for the marketing, distribution,
installation and support of the Products outside of the United States, and for
the marketing and distribution of the Products in the United States;

 

(g)                                 To provide appropriate sales staff for
training by Vital Images in the United States, and both sales and technical
support staff for training by Vital Images outside of the United States, at
mutually-agreeable locations;

 

(h)                                 To provide Vital Images with reports of its
activities and other information regarding the Products in the Territory in such
detail and with such frequency as is reasonably agreed between both parties;

 

(i)                                     To conduct its business in a
professional manner, which will reflect positively upon Vital Images and its
Products;

 

(j)                                     To provide Vital Images with customer
registration information as is reasonably requested by Vital Images;

 

(k)                                  To abide by all applicable laws and
regulations in the Territory, including, if applicable, the U.S. Export
Administration Regulations; and

 

(l)                                     To apprise all customers of the terms of
Section 2.3 of this Agreement regarding the ownership of intellectual property
embodied in the Products.

 

3.2                                 Toshiba Demonstration License.  Upon written
request of Toshiba and/or its Dealer Associates, Vital Images agrees to grant to
Toshiba and/or its Dealer Associates up to fifteen (15) one-year royalty free
software licenses, in total at any time, for the latest version of the Products
solely for their own customer demonstration and promotional uses, subject to the
Terms and Conditions for the Demonstration License attached hereto as Exhibit
D.  From time to time during such one-year period, Vital Images agrees to
provide Toshiba and/or its Dealer Associates with update or upgrade releases of
the Product, free of charge.  During or after one (1) year free use of the
Products, Toshiba and/or its Dealer Associates may or shall, respectively,
purchase and pay for the Products to be purchased pursuant to this Article 3.2
in accordance with Article 6 below, except that the purchase price shall be 40%
of the prices for the Products as set forth in the Product Price List, Exhibit E
hereto.  The Terms and Conditions for the Demonstration License shall be
superseded upon purchase of such Toshiba Demonstration Licenses and such
Demonstration Licenses shall then be subject to the terms and conditions of this
Agreement, including license and warranty.

 

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3.3                                 Customer Demonstration License.  Toshiba
and/or its Dealer Associates may purchase, under this Agreement, up to twenty
(20) additional software licenses, in total, for the Products solely for use at
mutually agreed-upon customer sites in the Territory for purposes of referrals
and business development.  Toshiba and/or its Dealer Associates shall pay for
such license in accordance with Article 6 below, except that the amount due
Vital Images for such license shall be 40% of the prices for the Products as set
forth in the Product Price List, Exhibit E hereto.

 

3.4                                 Promotional Materials.  Vital Images shall
furnish Toshiba with a reasonable quantity of Vital Images data sheets,
brochures and other marketing materials for the Products in the English language
for use by Toshiba and its Dealer Associates.

 

(a)                                  Upon request of Toshiba or its Dealer
Associates, Vital Images shall provide up to 4,000 copies to be used with
Toshiba’s CT systems, and 1,000 copies to be used with Toshiba’s X-ray systems,
of each of such promotional materials and any revision(s) thereof, at no
charge.  If Toshiba requests any particular promotional material in excess of
such applicable number of copies, then Toshiba may purchase the exceeding number
of copies thereof from Vital Images.

 

(b)                                 In lieu of providing such promotional
materials directly, Vital Images, at its discretion, may provide Toshiba with an
electronic media copy of same with a nonexclusive, nontransferable right and
license to use same, without modification of any kind, for the local
reproduction of such materials solely for purposes of Toshiba’s performance
under this Agreement.

 

(c)                                  If Toshiba or its Dealer Associates
believes that non-English language versions of such promotional materials or
non-English language advertising of the Products are necessary or desirable for
effective marketing of the Products in the Territory, Toshiba shall arrange and
pay for the preparation of such non-English language materials, which shall be
subject to the prior review and written approval of Vital Images.  If Toshiba or
its Dealer Associates believe that non-English language versions of user’s
manual of the Products are necessary and upon request of Toshiba or its Dealer
Associates, Vital Images shall provide such translated version to Toshiba or its
Dealer Associates which made such request, at no charge.  In all cases, Vital
Images shall be the sole and exclusive owner of the copyrights in any such
materials, regardless of language.

 

3.5                                 Reverse Engineering.  Toshiba shall not
reverse engineer, decompile or disassemble the Products and shall not knowingly
allow any other person to do so.

 

3.6                                 Toshiba Expenses.  Toshiba and its Dealer
Associates assume full responsibility for all its own costs and expenses
incurred in carrying out its obligations under this Agreement, including but not
limited to all rents, salaries, commissions, advertising, demonstrations, travel
and accommodations; provided, however, Vital Images will provide to Toshiba and
its Dealer Associates at no charge training for one hundred (100) of Toshiba’s
and the Dealer Associates’ sales and technical support staff, at Vital Images’
facilities or at any other mutually-agreeable location, in the function,
application, installation and the First Level Maintenance of the Products and in
the provision of assistance to Vital Images in the Second Level Maintenance,
provided, however, Toshiba or the Dealer Associates shall pay the salaries and
all transportation and living expenses for its staff.  In the event Toshiba or
the Dealer Associate requests Vital Images to send a Vital Images representative
to Toshiba’s or the Dealer Associate’s office for training, Toshiba or the
Dealer Associates shall pay the transportation and living expenses of such Vital
Images representative.

 

If Vital Images approves of any additional Dealer Associates appointed by
Toshiba, Vital Images and Toshiba shall make good faith arrangements for
provision of comparable materials, training, promotional

 

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materials (discussed in Article 3.4 above) and license(s) to the Products solely
for demonstration purposes (discussed above in Article 3.2) to such Dealer
Associate.

 

ARTICLE 4:  ORDERS FOR PRODUCTS

 

4.1                                 Purchase Orders.  Toshiba shall cause its
Dealer Associates, and itself shall use its best efforts to submit purchase
orders for the Products to Vital Images in writing (preferably by facsimile) at
least fifteen (15) days prior to the requested delivery date, which orders shall
include the following information:

 

(a)                                  An identification of the Products ordered
(with release number);

 

(b)                                 Quantity of copies;

 

(c)                                  Requested delivery dates;

 

(d)                                 Shipping instructions and shipping address;
and

 

(e)                                  If applicable, any relevant export control
information or documentation to enable Toshiba and Vital Images to comply with
applicable U.S. export control laws.

 

4.2                                 Acceptance of Orders.  All purchase orders
from Toshiba and the Dealer Associate are subject to acceptance in writing by
Vital Images, which acceptance shall not be unreasonably withheld and shall be
delivered by reply facsimile or by e-mail.  Failure to respond to each purchase
order by Vital Images within  five (5) business days from receipt of such
purchase order shall be deemed acceptance of such purchase order by Vital
Images.

 

4.3                                 Delivery Terms.  All deliveries of the
Products shall be from Vital Images’ facilities unless otherwise agreed in
writing between the parties.  Vital Images shall bear shipping charges for the
shipment of any Products to its destination specified in the purchase order. 
All risk of damage to or loss or delay of the Products shall pass to Toshiba or
the Dealer Associate upon their delivery to a common carrier.

 

4.4                                 Modification of Orders.  No accepted
purchase order may be modified or canceled later than thirty (30) days before
the scheduled delivery date, except upon the written agreement of both parties,
provided, however, any price decrease for the Products shall be implemented upon
the effective date of such decrease and, provided further, Vital Images may, at
no additional cost to Toshiba and the Dealer Associate, ship its latest
authorized version or release of a Product in response to any accepted purchase
order.  Toshiba’s and the Dealer Associate’s purchase orders or mutually-agreed
change orders shall be subject to all provisions of this Agreement, whether or
not the purchase order or change order so states, and any terms and conditions
of such purchase order or change order which conflict with the terms and
conditions of this Agreement shall be deemed excluded and of no legal effect as
between the parties.

 

4.5                                 Purchase Commitment.  Vital Images shall
ship to Toshiba and/or its Dealer Associates during the Term of this Agreement
such Products as are identified in and in accordance with the purchase orders
submitted by Toshiba and/or its Dealer Associates.  Notwithstanding the
foregoing, in the event Vital Images has not received purchase orders containing
such minimum amount of Vitreaâ 2 software as is specified in Exhibit F attached
hereto and incorporated herein (the “Commitment”) within fifteen (15) days prior
to the end of the applicable calendar quarter, Vital Images shall ship to
Toshiba America Medical Systems, Inc. (“TAMS”) for the U.S. Commitment, or
Toshiba Medical Systems Europe, B.V. (“TMSE”) for the non-U.S. Commitment,
depending on which Commitment was not satisfied subject to the terms in the
following paragraph, within three (3) days prior to the end of such calendar
quarter an amount of units of the Vitreaâ 2 software necessary for Toshiba to
meet the requirements of the Commitment and Toshiba shall cause TAMS and/or
TMSE,

 

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whichever received such Vitreaâ 2 software, to pay for same pursuant to the
payment terms specified in Article 6.

 

Quarterly  Vitreaâ 2 software purchases above the minimums set forth in the
Commitment may be applied to reduce or  satisfy the next two (2) quarterly
purchase commitments, and Toshiba may portion out such excess purchase amount
within such next two (2) quarterly purchase commitments in any manner it deems
appropriate.  Furthermore, for every two (2)  Vitreaâ 2 software purchase orders
received from Toshiba or a non-U.S. Dealer Associate (excluding TMSJ) above the
applicable quarterly Commitment,  the quarterly TAMS Commitment shall be reduced
by one (1) Vitreaâ 2 software unit.  Similarly, for every one (1)  Vitreaâ 2
software purchase order received from TAMS above the applicable quarterly
Commitment, the quarterly non-U.S. (excluding TMSJ) Commitment shall be reduced
by two (2) Vitreaâ 2 software units.

 

Any purchases made by Toshiba and/or its Dealer Associates pursuant to Sections
3.2 and 3.3 of this Agreement shall not be credited against the Commitment.

 

In the event Vital Images sells a Vitreaâ 2 software license directly to a
customer and not through Toshiba or the Dealer Associate, Toshiba or Dealer
Associate shall receive credit for such sale in the event Toshiba or Dealer
Associate introduced Vitreaâ 2 to such customer during the marketing of Toshiba
or Dealer Associate’s products to such customer.  Toshiba or Dealer Associate
shall receive credit for introducing Vitreaâ 2  to a customer upon proof that:

 

(a)                                  Vital Images (or Vital Images’ dealer
associate) and Toshiba or the Dealer Associate made a joint visit to the
customer to demonstrate Vitreaâ 2;

 

(b)                                 A quote was provided to the customer
including components of Vitreaâ 2 and Toshiba or Dealer Associate’s products;
and

 

(c)                                  Such customer has not been previously
called upon by Vital Images (or Vital Images’ dealer associate) within sixty
(60) days prior to Toshiba or Dealer Associate’s quote.

 

4.6                                 Product Changes. Vital Images may do any of
the following upon sixty (60) days’ prior written notice to Toshiba:

 

(a)                                  Alter the specifications for any Product or
any new release thereof;

 

(b)                                 Except as set forth below, discontinue the
production of any Product;

 

(c)                                  Discontinue the development of any new
release of a Product, whether or not such new release has been announced
publicly; or

 

(d)                                 Commence the development and distribution of
new software products having features, which may make any Product wholly or
partially obsolete, whether or not Toshiba is granted any distribution rights in
respect of such new products.

 

Notwithstanding the foregoing, Vital Images must have available for Toshiba, a
successor software of Vitreaâ 2, and give at least six (6) months’ prior written
notice to Toshiba before discontinuing the production of Vitreaâ 2. Toshiba’s
minimum purchase commitments will end in the event Vital Images discontinues the
production of Vitreaâ 2.

 

4.7                                 Installation of Products.  Unless otherwise
agreed in writing by Vital Images, all deliveries of the Products shall be
directly to Toshiba or the Dealer Associates, and outside of the United States
Toshiba and the Dealer Associates shall then have the sole responsibility for
the installation and integration of such Products into a

 

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customer’s computer system in the Territory in accordance with the standards and
specifications established by Vital Images from time to time and provided to
Toshiba and the Dealer Associates hereunder.

 

4.8                                    Distribution Report.  Name, address,
telephone and facsimile numbers of customers who purchased the Product in each
calendar quarter shall be provided to Vital Images within thirty (30) days after
the end of such quarter.

 

ARTICLE 5:  SOFTWARE MAINTENANCE SERVICES

 

5.1                                 Software Maintenance Agreements.  For each
customer purchasing a license for the Products in the Territory, Toshiba and/or
the Dealer Associates shall use its reasonable best efforts to persuade such
customer to purchase annual software maintenance services under a software
maintenance program.  Such software maintenance services shall include updates
and upgrades  to the Vitreaâ 2 and other applicable Products that have been
purchased by the customer, free of charge to the customer.  It is agreed between
the parties that newly released options to Vitreaâ 2, except for those listed in
Exhibit E and purchased by the customer, shall be excluded from such updates and
upgrades, unless explicitly agreed between the parties.  Provided, however, even
after the Warranty Period (hereinafter defined in Section 8.1(a)), upon written
request from Toshiba or its Dealer Associates, for up to six (6) months after
the expiration date of the Warranty Period, Vital Images shall continue, without
charge, to support and shall upgrade or update such Product to its latest
version available within the Warranty Period, with downward compatibility. 
Further, for non-U.S. sales, after the expiration of such six-month post
warranty grace period, Toshiba and/or its Dealer Associates may purchase the
latest version of the Vitreaâ 2 for their customers at a price of $          ,
per each release.  Notwithstanding the foregoing, if the Product has not been
updated for no more than two (2) years after expiration of the Warranty Period,
such Product may be upgraded or updated to its latest version for $          .

 

5.2                                 First Level Maintenance Service.  In
accordance with its technical ability, and based upon its prior experience and
its training by Vital Images, Toshiba and/or the Dealer Associates shall use its
reasonable best efforts to provide the First Level Maintenance to customers
outside of the United States.  Vital Images shall provide First Level
Maintenance to customers in the United States.

 

5.3                                 Second Level Maintenance Service.  In
accordance with its technical ability and based upon its prior experience and
its training by Vital Images, Toshiba and/or the Dealer Associates shall use its
reasonable best efforts to assist Vital Images in providing the Second Level
Maintenance to Toshiba and/or Dealer Associates for the benefit of customers in
the Territory excluding the United States.

 

5.4                                 Customer Contact.  Except as set forth in
Section 5.2, Toshiba and/or the Dealers Associates shall have the primary
responsibility for direct contact with customers in the Territory in regard to
the function, application, installation or maintenance of the Products under the
First Level Maintenance and the Second Level Maintenance.

 

ARTICLE 6:  PRICES AND PAYMENTS

 

6.1                                 Prices.  Toshiba and the Dealer Associates
shall pay Vital Images in accordance with the prices for the Products or for
maintenance support services as specified in the Product Price List, Exhibit E
hereto.  All Product Price List prices are for shipment from Vital Images’
facilities to its destination.  Any special packing or handling shall be at the
sole expense of Toshiba.

 

6.2                                 Payment Terms.  For each order of the
Products or annual maintenance support services, Toshiba and/or its Dealer
Associates, who ordered such Products or annual maintenance support service,
shall pay in accordance with the Product Price List in U.S.  Dollars within
forty-five (45) days of the date of shipment,

 

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provided that the ordered item is delivered to the purchaser specified in the
purchase order prior to the payment due date.

 

6.3                                 Overdue Payments.  If and for so long as any
payment from Toshiba to Vital Images under this Agreement shall be overdue:

 

(a)                                  Interest at twelve percent (12%) per annum
or the highest rate permitted under applicable law, whichever is lower, shall
automatically become due on all balances outstanding; and

 

(b)                                 Vital Images reserves the right to withhold
or suspend shipment of the Products to Toshiba and/or the Dealer Associate if
there is an unsettled outstanding balance owed by Toshiba or the Dealer
Associate to Vital Images.

 

ARTICLE 7:  APPROVALS; ADVERSE REACTIONS; PRODUCT RECALLS

 

7.1                                 Government Approval.  Vital Images shall
make diligent efforts to prepare and file all applications required to obtain
all necessary Government Approval for each country in the Territory specified in
Exhibit G hereto, the Principal Countries, where such Government Approval has
not already been obtained.  For all other countries in the Territory, if any,
Vital Images shall diligently prepare and file all applications required to
obtain all necessary Government Approval for each such country as Vital Images,
in its sole discretion, deems necessary.  Vital Images shall keep Toshiba
apprised of its progress with respect to any such applications.  Toshiba shall
furnish Vital Images with such assistance and cooperation as may be reasonably
requested in connection with the securing of such Government Approval.

 

7.2                                 Compliance.  Vital Images  shall  comply
with all applicable regulatory requirements.  However, Toshiba shall provide all
information within its possession  to Vital Images necessary for Vital Images to
comply with its medical device reporting requirements to the FDA or any other
comparable regulatory body elsewhere in the world.  Vital Images shall comply
with all health registration laws, regulations and orders of any government
entity within the Territory and with all other governmental requirements
relating to the promotion, marketing and sale of the Products in each country in
the Territory.  Toshiba shall submit all advertising claims to Vital Images for
written approval prior to their first use by any party, such consent not to be
unreasonably withheld.

 

7.3                                 Adverse Event Reporting.  Toshiba shall
advise Vital Images, by telephone or facsimile, within twenty-four (24) hours
after it becomes aware of any adverse event (which is defined as personal injury
or death) from the use of any Product or malfunction of any Product.  Unless
otherwise required by applicable local laws, Toshiba shall advise Vital Images
of any such adverse event prior to any report or filing being made by Toshiba
with the FDA or any other comparable regulatory body elsewhere in the world.

 

7.4                                 Corrective Action.

 

(a)          Notice of Corrective Action.  If Vital Images believes that a
corrective action with respect to the Products is desirable or required by law,
or if any governmental agency having jurisdiction (including, without
limitation, the FDA) shall request or order any corrective action with respect
to the Products, including any recall, customer notice, restriction, change,
corrective action or market action or any Product change, Vital Images shall
promptly notify Toshiba and the Dealer Associates.  Any and all corrective
actions shall be conducted at the expense of Vital Images, except costs
associated with notifying customers of such corrective action.  Toshiba and/or
the Dealer Associates shall maintain complete and accurate records, for such
periods as may be required by applicable law, of all Products they sold.  The
parties shall cooperate fully with each other in effecting any corrective action
with respect to the Products pursuant to this

 

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Section 7.4, including communication with any customers and Toshiba shall cause
its Dealer Associates, and itself shall comply with all reasonable directions of
Vital Images’ regarding such corrective action.  This Section 7.4 shall not
limit the obligations of either party under law regarding any corrective action
with respect to the Products required by law or properly mandated by
governmental authority.

 

(b)         Refund.  If any Products are required to be returned to Vital Images
pursuant to this Article 7.4 and no replacement is provided therefor by Vital
Images, Vital Images shall refund to Toshiba’s or the Dealer Associate’s
customers any unearned license fees paid to Toshiba or the Dealers Associates
(the amount of the license fee each such customer paid for the products, less a
reasonable value for use determined by prorating the license fee paid on a
thirty-six (36) month straight-line amortization method). Vital Images shall
indemnify Toshiba or the Dealer Associate from any actions made by Toshiba or
the Dealer Associate’s customers claiming reimbursement of license fees, whether
or not in excess of the amount specified in this paragraph.

 

ARTICLE 8:  WARRANTIES AND REPRESENTATIONS; INDEMNIFICATION

 

8.1                                 Product Warranties to Customers.  Vital
Images hereby authorizes Toshiba and the Dealer Associates to pass through to
its customers Vital Images’ standard software warranties as set forth below.

 

(a)                                  Limited Warranty.  Vital  Images warrants
to Toshiba and the Dealer Associates for twelve (12) months from installation or
sixteen (16) months from the delivery date, whichever expires first (the
“Warranty Period”), that the Products, when properly installed and operated,
will substantially perform the functions described in the functional
specifications for the Products, as contained in the applicable written
documentation for the Products, and that such Product shall be upgraded or
updated to its latest version with the assurance of downward compatibility. 
Vital Images shall have no obligation under this provision if (a) the Products
have not been properly installed, used or maintained, whether in accordance with
Vital Images’ then-applicable operating manuals; or (b) the Products have been
modified in any manner or are used or combined with other computer software
programs, hardware or data not supplied by Vital Images and without the prior
written consent of Vital Images; or (c) the Products have been distributed to a
customer with any warranties or representations, oral or written, made by
Toshiba or any third party beyond those expressly set forth herein.

 

(b)                                 Exclusive Remedy.  Vital Images’ entire
liability for any warranty claim made by Toshiba or the Dealer Associates under
Section 8.1(a) above during the Warranty Period, and Toshiba’s and its Dealer
Associates’ exclusive remedy for any such claim, shall be for Vital Images, at
its option, to either (i) replace any defective media which prevents the
Products from satisfying the limited warranty described in Section 8.1(a); (ii)
attempt to correct any material and reproducible errors reported by Toshiba or
the Dealer Associate; or (iii) terminate this  Agreement and refund the fees
paid by the customers of Toshiba and the Dealer Associates for the Products. 
Vital Images does not warrant that the operation of the Products will be
uninterrupted or error-free, that all errors in the Products will be corrected,
that the Products will satisfy customer’s requirements or that the Products will
operate in the combinations which such customer may select for use.

 

(c)                                  Warranty Extension.  Replacement or
correction of all or any part of the Products does not extend the Warranty
Period, which shall begin on the delivery date.  Vital Images and its third
party licensors expressly disclaim any commitment to provide maintenance or
support of the Products beyond the Warranty Period, in the absence of entering
into a

 

9

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separate software maintenance arrangement with Vital Images and except to the
extent stated in Section 5.1 for the 6-month post warranty grace period. 
Furthermore, the Products are derived from and include software from third party
licensors, who make no warranty, express or implied, regarding the Products, who
disclaim any and all liability for the Products and who will not undertake to
provide any information or support regarding the Products.

 

(d)                                 Maintenance Obligations.  As part of its
First Level Maintenance obligations, Toshiba shall and it shall cause its Dealer
Associates to promptly inform Vital Images of any claims made by their customers
in the Territory under such software warranties.  All such warranty claims shall
be made promptly in writing and shall state the nature and details of the claim,
the date the cause of the claim was first observed and the serial number of the
Products concerned, if any.  Further, all such warranty claims must be received
by Vital Images no later than fifteen (15) days after the expiration of the
Warranty Period for such customer.

 

8.2                                 Warranty to Toshiba.  Vital Images hereby
represents and warrants to Toshiba:

 

(a)                                  Vital Images owns or has the lawful right
from others to grant the rights to market and distribute the Products as set
forth in this Agreement;

 

(b)                                 Vital Images has entered into an agreement
with PointDx, Inc. and has procured any necessary license from PointDx, Inc. to
fulfill its obligations under this Agreement.  Vital Images has no knowledge of
any claim of infringement by the Products of any third party intellectual
property rights, such as patents, copyrights, trade secrets or trademarks; and

 

(c)                                  Vital Images has taken all appropriate
corporate action to authorize execution and performance of this Agreement.

 

8.3                                 Limited Warranty.  THE WARRANTIES SET FORTH
IN ARTICLES 8.1 AND 8.2 ABOVE ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, WHICH ARE HEREBY DISCLAIMED AND EXCLUDED BY VITAL IMAGES, INCLUDING
WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.

 

8.4                 Indemnification of Toshiba.  Vital Images hereby agrees to
indemnify, defend and hold Toshiba harmless from any third party suit, claim or
other legal action (“Legal Action”) (i) that alleges any injuries or death and
damages to property solely by use of the Products, but only to the extent caused
or contributed to by Vital Images, and/or (ii) that alleges the Products, or any
of them, infringe any patent, copyright, or trade secret, including any
reasonable costs or legal fees thereby incurred by Toshiba and/or the Dealer
Associates.  Vital Images shall be given written notice of any Legal Action
within thirty (30) days of Toshiba’s first knowledge thereof, provided, that,
the failure of Toshiba to notify Vital Images of any such matter within the
thirty (30) day period shall not release Vital Images, in whole or in part, from
its obligations under this Section 8.4, except to the extent Toshiba’s failure
to so notify Vital Images materially prejudices Vital Images’ ability to defend
against such Legal Action.  Vital Images shall have sole and exclusive control
of the defense of any Legal Action, including the choice and direction of any
legal counsel.  Toshiba may not settle or compromise any Legal Action without
the written consent of Vital Images.  If a Product is found to infringe any such
third party intellectual property right in such a Legal Action, at Vital Images’
sole discretion and expense, Vital Images may (i) obtain a license from such
third party for the benefit of Toshiba and its customers; or (ii) replace or
modify the Product so that it is no longer infringing; or (iii) if neither of
the foregoing is commercially feasible, terminate this Agreement and refund to
Toshiba or the Dealer Associate all amounts previously paid by Toshiba or the
Dealer Associate for the Software and the Products, if applicable law requires
such refund.

 

10

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8.5                                 Indemnification of Vital Images.  Toshiba
hereby agrees to indemnify, defend and hold Vital Images harmless from any and
all claims, demands, losses and liabilities, including any reasonable costs or
legal fees thereby incurred by Vital Images, resulting from Toshiba’s acts or
omissions, including, without limitation, misrepresentations regarding the
Products, any violation of applicable laws or regulations relating to the
marketing and distribution of the Products, any breach of any covenant or term
in this Agreement, any failure by Toshiba to provide the required support or
training to end users or to properly install the Products; and any
misappropriation by a Toshiba or the Dealer Associate customer of any Vital
Images intellectual property.

 

ARTICLE 9:  LIMITATION OF REMEDIES

 

9.1                                 Delay.  The delivery date for each order
placed by Toshiba or the Dealer Associate will be indicated on Toshiba or the
Dealer Associate’s purchase order.  If Vital Images fails to deliver the
Products within sixty (60) days of the deadline(s) indicated in such purchase
orders, Toshiba or the Dealer Associate shall have the right to cancel such
order and purchase equivalent products from an alternative source.  Vital Images
shall pay Toshiba or the Dealer Associate for the difference between the price
of the alternative product and the price for the Products under the cancelled
purchase order(s), not later than twenty (20) days following receipt of Toshiba
or the Dealer Associate’s invoice

 

9.2                                 Sole Remedies.  THE SOLE AND EXCLUSIVE
REMEDIES FOR BREACH OF ANY AND ALL WARRANTIESAND THE SOLE REMEDIES FOR VITAL
IMAGES’ LIABILITY OF ANY KIND (INCLUDING LIABILITY FOR NEGLIGENCE OR PRODUCTS
LIABILITY) WITH RESPECT TO THE PRODUCTS AND THEIR USE, THE SERVICES COVERED BY
THIS AGREEMENT, AND ALL OTHER PERFORMANCE BY VITAL IMAGES UNDER THIS AGREEMENT
SHALL BE LIMITED TO THE REMEDIES PROVIDED IN THIS AGREEMENT.

 

9.3                                 Consequential Damages.  VITAL IMAGES AND
TOSHIBA OR THE DEALER ASSOCIATE SHALL HAVE NO LIABILITY OF ANY KIND FOR ANY
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE, EVEN IF VITAL
IMAGES OR TOSHIBA OR THE DEALER ASSOCIATE SHALL HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGE BY TOSHIBA OR THE DEALER ASSOCIATE
OR VITAL IMAGES.  IN NO EVENT SHALL VITAL IMAGES BE LIABLE FOR ANY DAMAGES IN
EXCESS OF THE AGGREGATE AMOUNTS ACTUALLY PAID BY TOSHIBA OR DEALER ASSOCIATE TO
VITAL IMAGES UNDER THIS AGREEMENT, EXCEPT FOR ACTIONS FOR PERSONAL INJURY OR
DEATH, PROPERTY DAMAGE, INTELLECTUAL PROPERTY INFRINGEMENT, ACTIONS ARISING
UNDER FDA OR APPLICABLE LOCAL REGULATIONS IN THE TERRITORY, OR AS OTHERWISE
PROVIDED UNDER THIS AGREEMENT OR BY LAW.

 

ARTICLE 10:  CONFIDENTIALITY

 

10.1                           Confidential Information; Term.  All Confidential
Information shall be deemed confidential and proprietary to the party disclosing
such information hereunder.  Each party may use the Confidential Information of
the other party during the term of this Agreement only as permitted or required
for the receiving party’s performance hereunder.  The receiving party shall not
disclose or provide any Confidential Information to any third party and shall
take reasonable measures to prevent any unauthorized disclosure by its
employees, agents, contractors or consultants during the term hereof including
appropriate individual nondisclosure agreements.  The foregoing duty shall apply
to any Confidential Information for a period of five (5) years from the date of
its disclosure.

 

10.2                           Exclusions.  The following shall not be
considered Confidential Information for purposes of this Article 10:

 

11

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(a)                                  Information which is or becomes in the
public domain through no fault or act of the receiving party;

 

(b)                                 Information which was independently
developed by the receiving party without the use of or reliance on the
disclosing party’s Confidential Information;

 

(c)                                  Information which was provided to the
receiving party by a third party under no duty of confidentiality to the
disclosing party; or

 

(d)                                 Information which is required to be
disclosed by law, provided, however, prompt prior notice thereof shall be given
to the party whose Confidential Information is involved.

 

ARTICLE 11:  TRADEMARKS

 

11.1                           Use of Trademarks.  Vital Images hereby grants to
Toshiba and the Dealer Associates, and Toshiba and the Dealer Associates hereby
accepts from Vital Images, a nonexclusive, nontransferable and royalty-free
license to use the Vital Images trademarks specified in the List of Trademarks,
Exhibit H hereto, as such list may be modified from time to time, solely in
connection with the distribution, promotion, advertising and maintenance of the
Products.  Toshiba shall cause its Dealer Associates, and itself shall not use
any other marks or trade names in connection with the marketing and distribution
of the Products.  All such Vital Images trademarks shall be used by Toshiba
and/or the Dealer Associates in accordance with Vital Images’ standards,
specifications and instructions, but in no event beyond the term of this
Agreement.  Vital Images may inspect and monitor the activities of Toshiba
and/or the Dealer Associates to ensure that such use of the Vital Images
trademarks is in accordance with such standards, specifications and
instructions.  Toshiba and the Dealer Associates are not granted any right,
title or interest in such trademarks other than the foregoing limited license,
and Toshiba shall cause its Dealer Associates, and itself shall not use any
Vital Image trademarks as part of Toshiba’s or the Dealer Associate’s corporate
or trade name or permit any third party to do so.

 

11.2                           Registration.  Vital Images shall use its best
efforts to register the Vital Images trademarks specified in the List of
Trademarks, Exhibit H hereto, as such list may be modified during the term of
this Agreement, within the Territory when and if Vital Images determines, in its
sole discretion, that registration is necessary or useful to the successful
distribution of the Products.  Vital Images shall be the sole party to initiate
any such registration and shall bear all the expenses thereof.

 

11.3                           Markings.  Toshibas shall cause its Dealer
Associates, and itself shall not remove or alter any Vital Images trade names,
trademarks, copyright notices, serial numbers, labels, tags or other identifying
marks, symbols or legends affixed to any Products, documentation, containers or
packages.

 

11.4                           Infringement.  Toshiba shall cause its Dealer
Associates, and itself shall promptly notify Vital Images in writing of any
unauthorized use of Vital Images’ trademarks or similar marks which may
constitute an infringement or passing off of Vital Images’ trademarks.  Vital
Images reserves the right in its sole discretion to institute any proceedings
against such third party infringers, and Toshiba shall refrain from doing so. 
Toshiba shall cooperate fully with Vital Images in any legal action taken by
Vital Images against such third parties, provided that Vital Images shall pay
all expenses of such action.  All damages, which may be awarded or agreed upon
in settlement of any legal action, shall accrue to Vital Images.

 

11.5                           Termination of Use.  Toshiba shall not adopt, use
or register any words, phrases or symbols which are identical to or confusingly
similar to any of Vital Images’ trademarks.  Upon termination of this Agreement,
Toshiba shall immediately cease any use of the Vital Images trademarks in any
manner.  In addition, Toshiba hereby empowers Vital Images and shall assist
Vital Images, if requested, to cancel, revoke or withdraw any

 

12

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governmental registration or authorization permitting Toshiba to use Vital
Images trademarks in the Territory.

 

ARTICLE 12:  TAXES AND DUTIES

 

12.1                           Taxes in the Territory.  Toshiba and/or its
Dealer Associates shall be responsible for and shall pay all taxes (except Vital
Images’ income taxes), duties, import deposits, assessments and other
governmental charges, however designated, which are now or hereafter imposed by
any governmental authority or agency that are based on (a) the payment of any
amount by Toshiba or the Dealer Associates to Vital Images pursuant to this
Agreement for the Products or the use thereof, or (b) the import of the Products
into the Territory if such transaction is international in nature.

 

12.2                           Net Payments.  All payments to be made by Toshiba
and its Dealer Associates to Vital Images pursuant to this Agreement represent
net amounts Vital Images is entitled to receive and shall not be subject to any
deductions for any reason whatsoever except as allowed in this Agreement or by
law.  In the event any of said charges become subject to withholding taxes,
duties, import deposits, assessments or other governmental charges, however
designated, except Vital Images’ income taxes, said payments from Toshiba or its
Dealer Associates shall be increased to such an extent as to allow Vital Images
to receive the net amounts due under this Agreement.

 

ARTICLE 13:  IMPORT AND EXPORT OF PRODUCTS

 

13.1                           Import Documentation.  If applicable, Toshiba
shall be responsible for obtaining all licenses and permits required to import
the Products into the Territory in accordance with applicable laws or
regulations in the Territory.

 

13.2                           Export Regulations.  If applicable, Toshiba shall
supply Vital Images on a timely basis with all necessary information and
documentation requested by Vital Images for export of the Products in accordance
with U.S. export control laws or regulations.  Vital Images shall be responsible
for compliance with all applicable U.S. Export Administration Regulations for
all Products shipped by it to Toshiba or the Dealer Associates.  If applicable,
Toshiba hereby assures Vital Images that:

 

(a)                                  Toshiba shall cause its Dealer Associates,
and itself shall not re-export, directly or indirectly, the Products or the
direct product of the Products to any destination forbidden under the
then-applicable U.S. Export Administration Regulations;

 

(b)                                 Toshiba’s commitment in paragraph (a) above
shall apply in all cases unless the U.S. Export Administration Regulations
expressly permit such re-export or the U.S. Commerce Department’s Office of
Export Licensing has granted such authorization in writing; and

 

(c)                                  Toshiba’s commitment in paragraph (a) above
shall survive termination of this Agreement.

 

ARTICLE 14:  TERM AND TERMINATION

 

14.1                           Term.  This Agreement shall take effect
retroactively as of September 1, 2001 and shall have an initial term through
September 30, 2002 (the “Term”).  At the end of the Term, this Agreement shall
automatically terminate unless prior to the date of termination, this Agreement
is extended pursuant to the mutual written agreement of Toshiba and Vital
Images.

 

14.2                           Termination.  Notwithstanding the provisions of
Section 14.1 above, this Agreement may be terminated earlier by either party
upon written notice to the other party:

 

13

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(a)                                  If the other party files a petition of any
type as to its bankruptcy, is declared bankrupt, becomes insolvent, makes an
assignment for the benefit of creditors, goes into liquidation or receivership
or otherwise loses legal control of its business voluntarily;

 

(b)                                 If the other party is in material breach of
this Agreement and has failed to cure such breach within thirty (30) days of
receipt of written notice thereof from the first party;

 

(c)                                  If an event of Force Majeure continues for
more than six (6) months.

 

(d)                                 If Vital Images so elects due to a Legal
Action, as specified in Article 8.4 above; or

 

(e)                                  Upon mutual agreement by both parties.

 

14.3                           Rights and Obligations on Termination.  In the
event of termination of this Agreement for any reason, the parties shall have
the following rights and obligations:

 

(a)                                  Neither party shall be released from the
obligation to make payment of all amounts then or thereafter due and payable;

 

(b)                                 The rights of any customer of Toshiba or the
Dealer Associates who holds a valid license for the Products prior to the
effective date of such termination shall not be affected;

 

(c)                                  Toshiba’s indemnification obligation under
Article 2.2, and the parties’ obligations under Articles 7, 8, 9, 10, 11, 12,
13, 16 and 17 shall survive any termination of this Agreement;

 

(d)                                 Unless the parties otherwise agree in
writing, Toshiba shall cause its Dealer Associates and itself shall return all
copies of the Products and any other items of Confidential Information to Vital
Images and, if applicable, shall erase all copies of the Products from its
computer systems and shall certify in writing to Vital Images that it has done
so; and

 

(e)                                  Unless the parties otherwise agree in
writing, Vital Images shall return all Confidential Information of Toshiba or
the Dealer Associate and any copy thereof to Toshiba or the Dealer Associate.

 

14.4                           No Compensation.  In the event of any termination
of this Agreement under Section 14.2, subject to Section 14.3(a), neither party
shall owe any compensation to the other party for lost profits, lost
opportunities, goodwill or any other loss or damage as a result of or arising
from such termination.

 

ARTICLE 15:  FORCE MAJEURE

 

15.1                           Definition.  “Force Majeure” shall mean any event
or condition beyond the reasonable control of either party which prevents, in
whole or in material part, the performance by one of the parties of its
obligations hereunder or which renders the performance of such obligations so
difficult or costly as to make such performance commercially unreasonable. 
Without limiting the foregoing, the following shall constitute events or
conditions of Force Majeure:  acts of State or governmental action, riots,
disturbance, war, strikes, lockouts, slowdowns, prolonged shortage of energy or
other supplies, epidemics, fire, flood, hurricane, typhoon, earthquake,
lightning and explosion, or any refusal or failure of any governmental authority
to grant any export license legally required.

 

15.2                           Notice.  Upon written notice to the other party,
a party affected by an event of Force Majeure shall be suspended without any
liability on its part from the performance of its obligations under this
Agreement,

 

14

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except for the obligation to pay any amounts due and owing hereunder.  Such
notice shall include a description of the nature of the event of Force Majeure,
and its cause and possible consequences.  The party claiming Force Majeure shall
also promptly notify the other party of the termination of such event.

 

15.3                           Suspension of Performance.  During the period
that the performance by one of the parties of its obligations under this
Agreement has been suspended by reason of an event of Force Majeure, the other
party may likewise suspend the performance of all or part of its obligations
hereunder to the extent that such suspension is commercially reasonable.

 

ARTICLE 16:  ARBITRATION

 

16.1                           Dispute Resolution.  Except as provided in
Section 16.2 below, Vital Images and Toshiba shall each use its best efforts to
resolve any dispute between them promptly and amicably and without resort to any
legal process if feasible within thirty (30) days of receipt of a written notice
by one party to the other party of the existence of such dispute.  Except as
provided in Section 16.2 below, no further action may be taken under this
Article 16 unless and until executive officers of Vital Images and Toshiba have
met in good faith to discuss and settle such dispute.  The foregoing requirement
in this Article 16.1 shall be without prejudice to either party’s right, if
applicable, to terminate this Agreement under Article 14.2 above.

 

16.2                           Litigation Rights Reserved.  If any dispute
arises with regard to the unauthorized use or infringement of the Confidential
Information by any party hereto, the party whose Confidential Information is
being infringed may seek any available remedy at law or in equity from a court
of competent jurisdiction.

 

16.3                           Procedure for Arbitration.  Except as provided in
Section 16.2 above, any dispute, claim or controversy arising out of or in
connection with this Agreement which has not been settled through negotiation
within a period of thirty (30) days after the date on which either party shall
first have notified the other party in writing of the existence of a dispute
shall be settled by final and binding arbitration under the then-applicable
Commercial Arbitration Rules or, if Toshiba’s principal place of business is
outside the United States, the International Arbitration Rules of the American
Arbitration Association (“AAA”).  Any such arbitration shall be conducted by
three (3) arbitrators appointed by mutual agreement of the parties or, failing
such agreement, in accordance with said Rules.  At least one (1) arbitrator
shall be an experienced computer software professional, and at least one (1)
arbitrator shall be an experienced business attorney with a background in the
licensing and distribution of computer software.  Any such arbitration initiated
by Vital Images shall be conducted in Orange County, California, U.S.A., and any
such arbitration initiated by Toshiba or Dealer Associate shall be conducted in
Minneapolis, Minnesota, U.S.A., any such arbitration to be conducted in the
English language.  An arbitral award may be enforced in any court of competent
jurisdiction.  Notwithstanding any contrary provision in the AAA Rules, the
following additional procedures and rules shall apply to any such arbitration:

 

(a)                               Each party shall have the right to request
from the arbitrators, and the arbitrators shall order upon good cause shown,
reasonable and limited pre-hearing discovery, including (i) exchange of witness
lists, (ii) depositions under oath of named witnesses at a mutually convenient
location, (iii) written interrogatories and (iv) document requests.

 

(b)                                 Upon conclusion of the pre-hearing
discovery, the arbitrators shall promptly hold a hearing upon the evidence to be
adduced by the parties and shall promptly render a written opinion and award.

 

(c)                                  The arbitrators may not award or assess
punitive damages against either party.

 

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(d)                                 Each party shall bear its own costs and
expenses of the arbitration and one-half (1/2) of the fees and costs of the
arbitrators, subject to the power of the arbitrators, in their sole discretion,
to award all such reasonable costs, expenses and fees to the prevailing party.

 

ARTICLE 17:  MISCELLANEOUS

 

17.1                           Relationship.  This Agreement does not make
either party the employee, agent or legal representative of the other for any
purposes whatsoever.  Neither party is granted any right or authority to assume
or to create any obligation or responsibility, express or implied, on behalf of
or in the name of the other party.  Each party is acting as an independent
contractor.

 

17.2                           Assignment.  Toshiba shall not assign or
otherwise transfer its rights and obligations under this Agreement except with
the prior written consent of Vital Images, which consent will not be
unreasonably withheld.  This Agreement shall be binding upon, inure to the
benefit of and be assignable by Vital Images to the successors and assigns of
the business interest of Vital Images including, without limitation, any
successor to or assignees of the assets or stock of Vital Images as a result of
any sale, merger or any other corporate reorganization or transaction.  Any
prohibited assignment shall be null and void.

 

17.3                           Notices.  Notices permitted or required to be
given hereunder shall be deemed sufficient if given by registered or certified
mail, postage prepaid, return receipt requested, by private courier service, or
by facsimile addressed to the respective addresses of the parties as first
written above or at such other addresses as the respective parties may designate
by like notice from time to time.  Notices so given shall be effective upon (i)
receipt by the party to which notice is given, or (ii) on the fifth (5th) day
following domestic mailing or the tenth (10th) day following international
mailing, as may be the case, whichever occurs first.

 

17.4                           Entire Agreement.  This Agreement, including the
Exhibits hereto which are incorporated herein, constitutes the entire agreement
of the parties with respect to the subject matter hereof and supersedes all
proposals, oral or written, and all negotiations, conversations, discussions,
and previous distribution or value added reseller agreements heretofore between
the parties.  Toshiba hereby acknowledges that it has not been induced to enter
into this Agreement by any representations or statements, oral or written, not
expressly contained herein.  Specifically, that certain Vital Image, Inc. and
Toshiba America Medical Systems, Inc. Reseller Agreement dated September 11,
2000 (effective July 1, 2000) is hereby superseded in whole by this Agreement.

 

17.5                           Amendment.  This Agreement may not be modified,
amended, rescinded, canceled or waived, in whole or in part, except by written
amendment signed by both parties hereto.

 

17.6                           Publicity.  This Agreement is confidential, and
no party shall issue press releases or engage in other types of publicity of any
nature dealing with the commercial or legal details of this Agreement without
the other party’s prior written approval, which approval shall not be
unreasonably withheld.  However, approval of such disclosure shall be deemed to
be given to the extent such disclosure is required to comply with governmental
rules, regulations or other governmental requirements.  In such event, the
publishing party shall furnish a copy of such disclosure to the other party.

 

17.7                           Governing Law.  This Agreement shall be governed
by and interpreted under the laws of the state within which the action is filed
as specified in Section 16.3 above, excluding its choice of law rules.

 

17.8                           Severability.  If any provision of this Agreement
is found unenforceable under any of the laws or regulations applicable thereto,
such provision terms shall be deemed stricken from this Agreement, but such
invalidity or unenforceability shall not invalidate any of the other provisions
of this Agreement.

 

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17.9                           Counterparts.  This Agreement may be executed in
two or more counterparts in the English language and each such counterpart shall
be deemed an original hereof.  In case of any conflict between the English
version and any translated version of this Agreement, the English version shall
govern.

 

17.10                     Waiver.  No failure by either party to take any action
or assert any right hereunder shall be deemed to be a waiver of such right in
the event of the continuation or repetition of the circumstances giving rise to
such right.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized

representatives below.

 

VITAL IMAGES, INC.

 

Toshiba Medical Systems

 

 

 

By

/s/ Albert Emola

 

 

By

/s/ Kenichi Komatsu

 

 

 

 

Name

Albert Emola

 

 

Name

Kenichi Komatsu

 

 

 

 

Title

President & CEO

 

 

Title

Chief Technology Executive

 

 

 

LIST OF EXHIBITS

 

A             Products

B             Territory

C             List of Dealer Associates

D             Terms and Conditions for the Demonstration License

E              Product Price List

F              Product Commitments

G             Principal Countries

H             List of Vital Images Trademarks

 

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VITAL IMAGES, INC. AND TOSHIBA CORPORATION

MARKETING AND DISTRIBUTION AGREEMENT

 

EXHIBIT A

PRODUCTS

 

Vitrea â 2

 

VScoreÔ

 

VScore with EKG GateÔ

 

VScore with AutoGateÔ

 

3D Angiography Option

 

CT Colonography Option

 

Automated Vessel Measurements Option

 

CT Perfusion Option

 

18

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VITAL IMAGES, INC. AND TOSHIBA CORPORATION

MARKETING AND DISTRIBUTION AGREEMENT

 

EXHIBIT B

TERRITORY

 

Worldwide, except for Japan and those countries barred by the

 

Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury

 

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VITAL IMAGES, INC. AND TOSHIBA CORPORATION

MARKETING AND DISTRIBUTION AGREEMENT

 

EXHIBIT C

LIST OF DEALER ASSOCIATES

 

Company Name

 

MAIN COUNTRY

 

Address

 

 

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VITAL IMAGES, INC. AND TOSHIBA CORPORATION

MARKETING AND DISTRIBUTION AGREEMENT

 

EXHIBIT D

TERMS AND CONDITIONS FOR THE DEMONSTRATION LICENSE

 

ARTICLE 1:  LICENSE GRANT AND USE FOR DEMONSTRATION LICENSE

 

1.1                                 License Grant.  Subject to the terms of this
Exhibit D, Vital Images hereby grants to Toshiba and its Dealer Associates
(“Licensees”) a nonexclusive, non-transferable, royalty free license
(“Demonstration License”) to use the Products limited solely to promotion,
demonstration, evaluation and testing.  Except as provided herein, Licensees
hereby agree that the Products under this License shall not be used for any
business activities of the Licensees without the prior written consent of Vital
Images, such consent to be at the sole discretion of Vital Images.

 

1.2                                 Restrictions on Use.  Licensees agree not to
engage in, cause or permit the reverse engineering, disassembly, recompilation,
modification or any similar manipulation of the Products, nor may Licensees
loan, lease, distribute, assign or otherwise transfer the Products or copies
thereof, in whole or in part, to any third party.

 

1.3                                 Copying.  Licensees shall not copy the
Products, except that each Licensee may make and maintain one (1) copy of the
Products for back-up and archival purposes, provided such copy includes all
Vital Images copyright, proprietary rights and other notices included on or in
the Products.

 

1.4                                 Ownership.  All right, title and interest in
the Products shall at all times remain the property of Vital Images and its
licensors, subject to the Demonstration Licenses granted to Licensees under this
Exhibit D.  Licensees understand and agree that it takes title only to the media
on which the Products are provided to it, but that the Products shall remain the
property of, and proprietary to, Vital Images.

 

ARTICLE 2:  TERM AND TERMINATION

 

2.1                                 Term.  The term of each Demonstration
License shall be one (1) year from delivery thereof.

 

2.2                                 Termination.  Each Licensee may terminate
the Demonstration License at any time by giving written notice to Vital Images.

 

2.3                                 Termination of a Demonstration License. 
Upon any termination of a Demonstration License, Licensee shall

(a) immediately cease all use of the Products licensed pursuant to such
Demonstration License, and (b) certify in writing to Vital Images within thirty
(30) days after such termination that Licensee has either destroyed, permanently
erased or returned to Vital Images the Products and all copies thereof licensed
pursuant to such Demonstration License.

 

2.4                                 Effect of Termination of Demonstration
License.  Upon termination of the Demonstration License,  such License to the
Products granted under this Exhibit D shall immediately terminate.  Articles
1.4, 3, 4 and 5 of this Exhibit D shall survive such termination of the
Demonstration License, if the Product(s) licensed pursuant to such Demonstration
License is not purchased. Otherwise, as provided in Section 3.2 of the main body
of that certain Marketing and Distribution Agreement between Toshiba Corporation
and Vital Images, Inc. dated January      , 2002 (the “Agreement’), the terms
and conditions under this Exhibit D shall be superseded upon purchase of the
Products and shall be totally subject to the terms and conditions provided in
the main body of the Agreement.

 

21

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ARTICLE 3:  WARRANTIES; INDEMNIFICATION

 

3.1                                 No Warranty.  Vital Images makes no warranty
to Licensees that the Products licensed under the Demonstration License, even
when properly installed and operated, will substantially perform the functions
described in the functional specifications for the Products, as contained in the
applicable written documentation for the Products.  All Products licensed under
the Demonstration License are provided to Licensees “AS IS.” Provided however,
during the term of each Demonstration License, Vital Images shall provide
Licensees with any update or upgrade releases to the Vitrea® 2 or other
applicable Products licensed thereunder, as soon as they become available.  It
is agreed between the parties that newly released options to Vitrea® 2, except
for those listed in Exhibit E to the Agreement and licensed under the applicable
Demonstration License, shall be excluded from such updates and upgrades unless
explicitly agreed between the parties.

 

3.2                                 Exclusive Remedy.  Vital Images’ entire
liability, and Licensees’ exclusive remedy, for any claim made by Licensees
under Article 3.1 above shall be for Licensee to terminate the Demonstration
License for such Product.  Vital Images does not warrant that the operation of
the Products will be uninterrupted or error-free, that all errors in the
Products will be corrected, that the Products will satisfy Licensee’s
requirements or that the Products will operate in the combinations which
Licensees may select for use.

 

3.3                                 Warranty Disclaimer.  THE WARRANTY SET FORTH
IN ARTICLE 3.1 ABOVE IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, WHICH ARE HEREBY DISCLAIMED AND EXCLUDED BY VITAL IMAGES, INCLUDING
WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OR USE, AND ALL OBLIGATIONS OR LIABILITIES ON THE PART
OF VITAL IMAGES FOR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE USE,
MAINTENANCE OR PERFORMANCE OF THE PRODUCTS.  Furthermore, the Products are
derived from and include software from third party licensors, who make no
warranty, express or implied, regarding the Products, who disclaim any and all
liability for the Products and who will not undertake to provide any information
or support regarding the Products.

 

3.4                                 Infringement Indemnity.  Vital Images hereby
agrees to indemnify, defend and hold Licensees harmless from any third party
suit, claim or other legal action (“Legal Action”) that alleges the Products
infringes any patent, copyright, or trade secret, including any award of damages
and costs made against Licensees by a final judgment of a court of last resort
based upon a Legal Action, provided that:  (a) Licensees give written notice of
any Legal Action to Vital Images within fifteen (15) days of Licensee’s first
knowledge thereof, provided that, the failure of Licensee to notify Vital Images
of any such matter within the fifteen (15) day period shall not release Vital
Images, in whole or in part, from its obligations under this Article 3.4, except
to the extent such Licensee’s failure to so notify Vital Images materially
prejudices Vital Images’ ability to defend against such Legal Action; (b) Vital
Images has sole and exclusive control of the defense of any Legal Action,
including the choice and direction of any legal counsel, and all related
settlement negotiations; and (c) Licensees provide Vital Images (at Vital
Images’ expense for reasonable out-of-pocket expenses) with assistance,
information and authority to perform the above.

 

Notwithstanding the foregoing, Vital Images and its licensors shall have no
liability for any Legal Action based on or arising out of:  (a) the failure by
Licensees to use a non-infringing version or release of the Products if made
available by Vital Images, (b) the combination, operation or use of the Products
with software, hardware or data not furnished or approved by Vital Images, if
such Legal Action would have been avoided by use of the Products without such
software, hardware or data, or (c) the use of any Products in a manner for which
it was neither designed nor contemplated.

 

22

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In the event that the Products are held or are believed by Vital Images to
infringe, Vital Images shall, at its option and expense, terminate the
Demonstration License to such Products.

 

This Article 3.4 states Licensees’ exclusive remedy, and Vital Images’ and its
licensors’ entire liability, for any infringement claim related to the Products
or their use.

 

ARTICLE 4:  LIMITATION OF REMEDIES

 

4.1                                 Delay.  VITAL IMAGES SHALL NOT BE LIABLE FOR
ANY LOSS OR DAMAGE CAUSED BY DELAY IN FURNISHING PRODUCTS OR ANY OTHER
PERFORMANCE UNDER THIS EXHIBIT D.

 

4.2                                 Sole Remedies.  THE SOLE AND EXCLUSIVE
REMEDIES FOR BREACH OF ANY AND ALL WARRANTIES AND THE SOLE REMEDIES FOR VITAL
IMAGES’ LIABILITY OF ANY KIND (INCLUDING LIABILITY FOR NEGLIGENCE OR PRODUCT
LIABILITY) WITH RESPECT TO THE PRODUCTS COVERED BY THIS EXHIBIT D AND ALL OTHER
PERFORMANCE BY VITAL IMAGES UNDER THIS EXHIBIT D SHALL BE LIMITED TO THE
REMEDIES PROVIDED IN ARTICLE 3 OF THIS EXHIBIT D.

 

4.3                                 Damages Limitation.  VITAL IMAGES SHALL HAVE
NO LIABILITY OF ANY KIND FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
LOSS OR DAMAGE, EVEN IF VITAL IMAGES SHALL HAVE BEEN ADVISED OF THE POSSIBILITY
OF SUCH POTENTIAL LOSS OR DAMAGE, INCLUDING ANY LIABILITY FOR DAMAGES ARISING
OUT OF OR RESULTING FROM THE USE, MAINTENANCE OR PERFORMANCE OF THE PRODUCTS,
INCLUDING, WITHOUT LIMITATION, THE LOSS OR CORRUPTION OF LICENSEES’ OR ANY THIRD
PARTY DATA.

 

ARTICLE 5:  RELATIONSHIP OF THIS EXHIBIT D AND THE MAIN BODY OF THE AGREEMENT

 

In all other respects, the main body of the Agreement shall prevail and shall
apply to the Demonstration Licenses granted under this Exhibit D as well. 
Specifically, and not in limitation of the foregoing, defined terms used in this
Exhibit D, if not defined herein, shall have the meaning given them in the
Agreement.

 

23

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VITAL IMAGES, INC. AND TOSHIBA CORPORATION

MARKETING AND DISTRIBUTION AGREEMENT

 

EXHIBIT E

PRODUCT PRICE LIST

 

 

 

Platform Configuration

 

Software License
Pricing

 

Annual Software
Maintenance Pricing

License

 

Required

 

U.S.

 

Non-U.S.

 

U.S.

 

Non-U.S.

Vitrea â 2

 

Windows Platform

 

 

 

 

 

 

 

 

VScoreÔ option

 

Windows Platform

 

 

 

 

 

 

 

 

VScore with EKG GateÔ option

 

Windows Platform

 

 

 

 

 

 

 

 

VScore with AutoGateÔ option

 

Windows Platform

 

 

 

 

 

 

 

 

3D Angiography Option

 

Windows Platform

 

 

 

 

 

 

 

 

CT Perfusion Option

 

Windows Platform

 

 

 

 

 

 

 

 

CT Colongraphy Option

 

Windows Platform

 

 

 

 

 

 

 

 

Automated Vessel Measurements Option

 

Windows Platform

 

 

 

 

 

 

 

 

 

24

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VITAL IMAGES, INC. AND TOSHIBA CORPORATION

MARKETING AND DISTRIBUTION AGREEMENT

 

EXHIBIT F

PRODUCT COMMITMENTS

 

Toshiba and/or its Dealer Associates shall purchase from Vital Images during the
twelve (12) month period ended September 30, 2002 the following Vitrea â 2
Software License minimums:

 

YEAR 1

 

 

 

Commitment

 

Cumulative Total

 

 

U.S.

 

Non-U.S.

 

U.S.

 

Non-U.S.

QUARTER 4
Oct. 1, 2001 - Dec. 31, 2001

 

 

 

 

 

 

 

 

 

YEAR 2

 

 

 

Commitment

 

Cumulative Total

 

 

U.S.

 

Non-U.S.

 

U.S.

 

Non-U.S.

QUARTER 1
Jan. 1, 2002 - Mar. 31, 2002

 

 

 

 

 

 

 

 

QUARTER 2
April 1, 2002 - June 30, 2002

 

 

 

 

 

 

 

 

QUARTER 3
July 1, 2002 - Sept. 31, 2002

 

 

 

 

 

 

 

 

 

Any purchases made by Toshiba and/or its Dealer Associates pursuant to Sections
3.2 and 3.3 of this Agreement shall not be credited against the Commitment.

 

25

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VITAL IMAGES, INC. AND TOSHIBA CORPORATION

MARKETING AND DISTRIBUTION AGREEMENT

 

EXHIBIT G

PRINCIPAL COUNTRIES

 

The European Union

U.S.A.

 

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VITAL IMAGES, INC. AND TOSHIBA CORPORATION

MARKETING AND DISTRIBUTION AGREEMENT

 

EXHIBIT H

LIST OF VITAL IMAGES TRADEMARKS

 

Vitrea â

 

VScoreÔ

 

VScore with EKG GateÔ

 

VScore with AutoGateÔ

 

27

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