Exhibit 10.24

 

DEVELOPMENT AGREEMENT

 

THIS DEVELOPMENT AGREEMENT (“Agreement”) is made effective this 8th day of
January, 2009 (the “Effective Date”), by and between Toshiba Medical Systems
Corporation, a Japanese corporation, having its place of business at 1385
Shimoishigami, Otawara-Shi, Tochigi 324-8550, Japan (“Toshiba”) and Vital
Images, Inc., a Minnesota corporation having its principal place of business at
5850 Opus Parkway, Suite 300, Minnetonka, Minnesota 55343 USA (“Vital Images”).

 

RECITALS

 

A.        Vital Images is in the business of developing and licensing
proprietary medical visualization application software products.

 

B.         Toshiba is in the business of developing and marketing proprietary
medical visualization scanners and related hardware and software products.

 

C.         Toshiba  and Vital Images desire to collaborate to develop and
commercialize  visualization application software.

 

NOW THEREFORE, in consideration of the terms, covenants, premises and conditions
contained herein and for other good and valuable consideration, the parties
hereto agree as follows:

 

1.  Definitions

 

A.          “AFFILIATE” OF A PERSON MEANS ANOTHER PERSON THAT DIRECTLY OR
INDIRECTLY CONTROLS, IS CONTROLLED BY OR IS UNDER COMMON CONTROL WITH THE FIRST
PERSON AND, FOR THIS PURPOSE, THE TERM “CONTROL” (AND THE TERMS “CONTROLLING”,
“CONTROLLED BY” AND “UNDER COMMON CONTROL”) 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.

 

B.          “AGREED ROYALTIES” MEANS THE STREAM OF RUNNING ROYALTY PAYMENTS
PAYABLE BY VITAL IMAGES TO TOSHIBA IN CONSIDERATION OF THE GRANT OF THE
NON-EXCLUSIVE LICENSE, AS DETERMINED IN ACCORDANCE WITH THE FOLLOWING
PROVISIONS. PROMPTLY AFTER THE DETERMINATION OF THE FAIR MARKET VALUE OF THE
OPTION RIGHTS, TOSHIBA AND VITAL IMAGES SHALL NEGOTIATE IN GOOD FAITH, USING THE
MOST RECENT INFORMATION AVAILABLE WHICH IS CAPABLE OF VERIFICATION (INCLUDING
THE FAIR MARKET VALUE OF THE OPTION RIGHTS), WITH A VIEW TO DETERMINING THE
AGREED ROYALTIES, INCLUDING THE AMOUNT, FREQUENCY AND DURATION OF THE PAYMENTS. 
IF TOSHIBA AND VITAL IMAGES ARE UNABLE TO AGREE ON THE AGREED ROYALTIES WITHIN
THIRTY (30) DAYS OF THE DETERMINATION OF THE FAIR MARKET VALUE OF THE OPTION
RIGHTS, THEN THE PARTIES SHALL SUBMIT TO MEDIATION AND, IF NECESSARY,
ARBITRATION IN ACCORDANCE WITH THE PRINCIPLES AND PROCEDURES SET FORTH IN THE
DEFINITION OF

 

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“FAIR MARKET VALUE OF THE OPTION RIGHTS”, WHICH SHALL APPLY TO THE DETERMINATION
OF THE AGREED ROYALTIES, MUTATIS MUTANDIS, PROVIDED THAT THE RELEVANT TIME
PERIODS THEREIN SHALL COMMENCE AS AT THE END OF THE 30-DAY PERIOD REFERRED TO
ABOVE.   IN THE EVENT THE FAIR MARKET VALUE OF THE OPTION RIGHTS HAS BEEN
DETERMINED THROUGH MEDIATION OR ARBITRATION, THE PARTIES AGREE TO APPOINT,
SUBJECT TO THEIR AVAILABILITY, THE SAME MEDIATORS AND ARBITRATORS TO DETERMINE
THE AGREED ROYALTIES AS WERE APPOINTED TO DETERMINE THE FAIR MARKET VALUE OF THE
OPTION  RIGHTS.

 

C.          “ALGORITHM” MEANS THE MATHEMATICAL EQUATION UNDERLYING THE PROCESS
OF IDENTIFYING STRUCTURES AND CALCULATING VALUES THAT GUIDES THE DEVELOPMENT OF
A SOFTWARE APPLICATION, WHETHER OR NOT PATENTABLE.

 

D.          “CHANGE IN CONTROL” SHALL MEAN (I) ANY MERGER, STATUTORY SHARE
EXCHANGE OR CONSOLIDATION OF A PARTY WITH OR INTO ANY THIRD PARTY, THAT ENTITLES
THE SHAREHOLDERS OF THE THIRD PARTY TO RECEIVE AT LEAST ONE (1) SEAT ON THE
BOARD OF DIRECTORS AND AT LEAST THIRTY-THREE AND ONE-THIRD PERCENT (33-1/3%) OF
THE OUTSTANDING CAPITAL STOCK OF THE POST-MERGER COMPANY (PROVIDED, HOWEVER,
THAT ANY ACQUISITION MERGER, STATUTORY SHARE EXCHANGE OR CONSOLIDATION OF A
PARTY WITH OR INTO * * *, * * *, AND * * * OR ANY OF THEIR AFFILIATES  THAT
ENTITLES ANY SUCH COMPANY OF AT LEAST THIRTY-THREE AND ONE-THIRD PERCENT
(33-1/3%) OF THE OUTSTANDING CAPITAL STOCK OF VITAL IMAGES SHALL BE A CHANGE IN
CONTROL, WHETHER OR NOT SUCH ENTITY ALSO RECEIVES A SEAT ON THE BOARD OF
DIRECTORS OF VITAL IMAGES; (II) ANY THIRD PARTY BECOMING THE HOLDER OF A
MAJORITY OF THE CAPITAL STOCK OF A PARTY ENTITLED TO VOTE GENERALLY FOR THE
ELECTION OF DIRECTORS; OR (III) THE SALE, LEASE, ASSIGNMENT, TRANSFER OR OTHER
CONVEYANCE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF A PARTY IN ANY
TRANSACTION OR SERIES OF TRANSACTIONS BY SUCH PARTY.  IN CASE OF “CHANGE IN
CONTROL” OF EITHER PARTY, THAT PARTY SHALL ASSURE THAT THE ACQUIRING EQUITY
SHALL AGREE TO HONOR AND FULLFILL THE OBLIGATION OF THE PARTY AS CONTAINED IN
THIS AGREEMENT.

 

E.          “CONFIDENTIAL INFORMATION” MEANS, IN RELATION TO ANY PARTY, ANY
CONFIDENTIAL OR PROPRIETARY INFORMATION OF SUCH PARTY, WHETHER IN WRITTEN,
GRAPHIC, ELECTRONIC, ORAL OR PHYSICAL FORM, INCLUDING WITHOUT LIMITATION,
(I) ALL INTELLECTUAL PROPERTY OF SUCH PARTY (INCLUDING WITHOUT LIMITATION ITS
BACKGROUND RIGHTS, FOREGROUND RIGHTS AND JOINTLY-OWNED FOREGROUND RIGHTS),
(II) ANY PRODUCT DEVELOPMENT PLAN, (III) THE TERMS OF THIS AGREEMENT, AND
(IV) THE PARTIES’ DISCUSSIONS IN CONNECTION WITH ANY OF THE FOREGOING.  THE TERM
“CONFIDENTIAL INFORMATION” SHALL NOT INCLUDE ANY INFORMATION WHICH (1) IS OR
BECOMES GENERALLY AVAILABLE TO THE PUBLIC OR THE INDUSTRY OTHER THAN AS A RESULT
OF A BREACH OF THIS AGREEMENT BY THE RECIPIENT PARTY; (2) BECOMES AVAILABLE TO
THE RECIPIENT PARTY ON A NON-CONFIDENTIAL BASIS FROM A THIRD PARTY WHICH, TO THE
KNOWLEDGE OF THE RECIPIENT PARTY (AFTER REASONABLE INQUIRY), IS NOT BOUND BY ANY
OBLIGATION OF CONFIDENTIALITY TO THE DISCLOSING PARTY IN RESPECT OF SUCH
INFORMATION; (3) THE RECIPIENT PARTY CAN ESTABLISH BY ITS WRITTEN RECORDS WAS
ALREADY IN ITS POSSESSION ON A NON-CONFIDENTIAL BASIS PRIOR TO DISCLOSURE BY OR
ON BEHALF OF THE DISCLOSING PARTY; (4) THE RECIPIENT PARTY CAN ESTABLISH BY ITS
WRITTEN RECORDS WAS

 

* * * Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission.

 

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INDEPENDENTLY DEVELOPED BY THE RECIPIENT PARTY WITHOUT THE USE OF ANY
CONFIDENTIAL INFORMATION OF THE DISCLOSING PARTY; OR (5) IS THE SUBJECT OF A
WRITTEN CONSENT TO DISCLOSE BY THE DISCLOSING PARTY OR OTHERWISE IS EXPRESSLY
ACKNOWLEDGED OR AGREED IN WRITING BY THE DISCLOSING PARTY TO NOT BE OR NO LONGER
BE CONFIDENTIAL OR PROPRIETARY INFORMATION.

 

F.           “DOCUMENTATION” MEANS USER DOCUMENTATION CREATED BY VITAL IMAGES
FOR USE WITH THE PROJECT SOFTWARE.

 

G.          “FAIR MARKET VALUE OF THE OPTION RIGHTS” MEANS THE FAIR MARKET VALUE
OF THE OPTION RIGHTS AS AT THE DATE OF OCCURRENCE OF A CHANGE IN CONTROL (BUT
IMMEDIATELY PRIOR, AND WITHOUT GIVING ANY EFFECT, TO SUCH CHANGE IN CONTROL), AS
DETERMINED IN ACCORDANCE WITH THE FOLLOWING PROVISIONS.  TOSHIBA AND VITAL
IMAGES SHALL NEGOTIATE IN GOOD FAITH, USING THE MOST RECENT INFORMATION
AVAILABLE WHICH IS CAPABLE OF VERIFICATION, WITH A VIEW TO DETERMINING THE FAIR
MARKET VALUE OF THE OPTION RIGHTS.  IF TOSHIBA AND VITAL IMAGES ARE UNABLE TO
AGREE ON THE FAIR MARKET VALUE OF THE OPTION RIGHTS WITHIN THIRTY (30) DAYS OF
THE OCCURRENCE OF A CHANGE IN CONTROL OR A MUTUALLY-AGREED UPON LONGER PERIOD OF
TIME (THE “NEGOTIATION PERIOD”), TOSHIBA AND VITAL IMAGES SHALL ATTEMPT TO
ESTABLISH THE FAIR MARKET VALUE OF THE OPTION RIGHTS BY SUBMITTING, WITHIN TEN
(10) DAYS FOLLOWING THE EXPIRATION OF THE NEGOTIATION PERIOD, TO NON-BINDING
MEDIATION IN ACCORDANCE WITH THE MODEL PROCEDURES FOR THE MEDIATION OF BUSINESS
DISPUTES PROMULGATED BY THE CENTER FOR PUBLIC RESOURCES (“CPR”) THEN IN EFFECT,
EXCEPT WHERE THOSE PROCEDURES CONFLICT WITH THE TERMS AND CONDITIONS OF THIS
DEFINITION, IN WHICH CASE THIS DEFINITION SHALL CONTROL.  THE MEDIATION SHALL BE
CONDUCTED IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK AND SHALL BE
ATTENDED BY SENIOR EXECUTIVES OF TOSHIBA AND VITAL IMAGES WITH AUTHORITY TO MAKE
BINDING DECISIONS WITH RESPECT TO THE FAIR MARKET VALUE OF THE OPTION RIGHTS. 
THE MEDIATOR SHALL BE EXPERIENCED IN MEDIATING INTELLECTUAL PROPERTY RIGHT
DISPUTES AND APPOINTED FROM THE LIST OF NEUTRALS MAINTAINED BY CPR.  FOLLOWING
THEIR SUBMISSION TO NON-BINDING MEDIATION, TOSHIBA AND VITAL IMAGES SHALL
PROMPTLY CONFER IN AN EFFORT TO SELECT A MEDIATOR BY MUTUAL AGREEMENT.  IN THE
ABSENCE OF SUCH AN AGREEMENT, THE MEDIATOR SHALL BE SELECTED FROM A LIST
GENERATED BY CPR WITH EACH OF TOSHIBA AND VITAL IMAGES HAVING THE RIGHT TO
EXERCISE CHALLENGES FOR CAUSE AND TWO (2) PEREMPTORY CHALLENGES WITHIN FIVE
(5) DAYS AFTER RECEIVING THE CPR LIST.  THE MEDIATOR SHALL CONFER WITH TOSHIBA
AND VITAL IMAGES TO DESIGN PROCEDURES TO CONCLUDE THE MEDIATION WITHIN NO MORE
THAN TWENTY (20) DAYS AFTER INITIATION.  NO STATEMENTS OR OFFERS (WRITTEN,
ELECTRONIC, VERBAL OR OTHERWISE) MADE BY TOSHIBA AND VITAL IMAGES DURING THE
MEDIATION MAY BE USED BY THE OTHER IN ANY SUBSEQUENT ARBITRATION OR LITIGATION
(OTHER THAN IN RESPECT OF ANY FRAUD).  IF TOSHIBA AND VITAL IMAGES ARE UNABLE TO
DETERMINE THE FAIR MARKET VALUE OF THE OPTION RIGHTS THROUGH MEDIATION, TOSHIBA
AND VITAL IMAGES SHALL, WITHIN TEN (10) DAYS FOLLOWING THE EXPIRATION OF THE
MEDIATION PERIOD SET FORTH ABOVE, SUBMIT THE ISSUE OF DETERMINATION OF THE FAIR
MARKET VALUE OF THE OPTION RIGHTS TO BINDING ARBITRATION PURSUANT TO THE
RULES OF THE AMERICAN ARBITRATION ASSOCIATION FOR COMMERCIAL ARBITRATION THEN IN
EFFECT, EXCEPT WHERE THOSE RULES 

 

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CONFLICT WITH THE TERMS AND CONDITIONS OF THIS DEFINITION, IN WHICH CASE THIS
DEFINITION SHALL CONTROL.  CONCURRENTLY WITH ITS SUBMISSION TO ARBITRATION, EACH
OF TOSHIBA AND VITAL IMAGES SHALL (I) SELECT AN ARBITRATOR (EACH A “VALUING
ARBITRATOR”) WHO IS UNAFFILIATED WITH SUCH PARTY AND EXPERIENCED IN ARBITRATING
INTELLECTUAL PROPERTY DISPUTES AND (II) NOTIFY THE OTHER IN WRITING OF THE
IDENTITY OF THE ARBITRATOR SO SELECTED.  IN THE EVENT THAT TOSHIBA OR VITAL
IMAGES SHALL FAIL TO TIMELY SELECT ITS VALUING ARBITRATOR, SUCH VALUING
ARBITRATOR SHALL BE SELECTED BY THE OFFICE OF THE AMERICAN ARBITRATION
ASSOCIATION (OR ANY SUCCESSOR THERETO) LOCATED IN THE BOROUGH OF MANHATTAN IN
NEW YORK, NEW YORK.  THE VALUING ARBITRATORS SHALL, WITHIN TWENTY (20) DAYS
FOLLOWING THEIR SELECTION, SELECT A THIRD ARBITRATOR (THE “DECIDING ARBITRATOR”
AND COLLECTIVELY WITH THE VALUING ARBITRATORS, THE “ARBITRATORS”).  IF THE
VALUING ARBITRATORS ARE UNABLE TO AGREE ON THE DECIDING ARBITRATOR, WITHIN SUCH
TWENTY (20)-DAY PERIOD, THEN THE DECIDING ARBITRATOR SHALL BE SELECTED BY THE
OFFICE OF THE AMERICAN ARBITRATION ASSOCIATION (OR ANY SUCCESSOR THERETO)
LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK.  EACH OF TOSHIBA AND
VITAL IMAGES SHALL PAY THE FEES AND EXPENSES OF THE VALUING ARBITRATOR SELECTED
BY IT.  THE FEES AND EXPENSES OF THE DECIDING ARBITRATOR SHALL BE BORNE EQUALLY
BY TOSHIBA AND VITAL IMAGES.  THE ARBITRATION HEARING SHALL BE CONDUCTED IN THE
BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK AND CONCLUDE NO LATER THAN SIXTY (60)
DAYS AFTER THE DATE ON WHICH THE DECIDING ARBITRATOR IS SELECTED.  THE
ARBITRATORS SHALL SET A DATE FOR THE ARBITRATION HEARING; MAKE DETERMINATIONS
BASED SOLELY ON THE DOCUMENTS AND OTHER EVIDENCE PRESENTED AT THE ARBITRATION
HEARING; COMMIT TO THE RENDERING OF A DETERMINATION OF THE FAIR MARKET VALUE OF
THE OPTION RIGHTS WITHIN TWENTY (20) DAYS AFTER THE CONCLUSION OF THE
ARBITRATION HEARING (THE DATE ON WHICH SUCH ARBITRATION HEARING CONCLUDES BEING
HEREINAFTER REFERRED TO AS THE “CONCLUSION DATE”) AND PROVIDE DISCOVERY
ACCORDING TO THE TIME LIMITS SPECIFIED HEREIN, GIVING RECOGNITION TO THE
UNDERSTANDING OF TOSHIBA AND VITAL IMAGES THAT THEY CONTEMPLATE REASONABLE
DISCOVERY, INCLUDING DOCUMENT DEMANDS AND DEPOSITIONS, BUT THAT SUCH DISCOVERY
BE LIMITED SO THAT THE TIME LIMITS SPECIFIED HEREIN MAY BE MET WITHOUT UNDUE
DIFFICULTY.  IN NO EVENT SHALL THE ARBITRATORS ALLOW EITHER TOSHIBA OR VITAL
IMAGES TO OBTAIN MORE THAN A TOTAL OF THIRTY (30) HOURS OF DEPOSITION TESTIMONY
FROM ALL WITNESSES, INCLUDING BOTH FACT AND EXPERT WITNESSES.  IN THE EVENT
MULTIPLE HEARING DAYS ARE REQUIRED, THEY SHALL BE SCHEDULED CONSECUTIVELY TO THE
GREATEST EXTENT POSSIBLE.  THE ARBITRATORS SHALL, WITHIN TWENTY (20) DAYS AFTER
THE CONCLUSION DATE, RENDER A WRITTEN OPINION (THE “VALUATION OPINION”) TO EACH
OF TOSHIBA AND VITAL IMAGES SETTING FORTH IN REASONABLE DETAIL THE FAIR MARKET
VALUE OF THE OPTION RIGHTS AND THE CRITERIA UPON WHICH SUCH VALUE IS BASED.  THE
FAIR MARKET VALUE OF THE OPTION RIGHTS ESTABLISHED SHALL BE FINAL AND BINDING ON
TOSHIBA AND VITAL IMAGES.  NEITHER TOSHIBA NOR VITAL IMAGES MAY APPLY TO ANY
COURT TO VACATE, MODIFY OR APPEAL THE FAIR MARKET VALUE OF THE OPTION RIGHTS AS
ESTABLISHED PURSUANT TO THIS DEFINITION, BUT MAY APPLY TO AN APPROPRIATE COURT
SOLELY FOR THE PURPOSE, IF NECESSARY, OF ENFORCING THE RECOGNITION OF THE FAIR
MARKET VALUE OF THE OPTION RIGHTS AS ESTABLISHED PURSUANT TO THIS DEFINITION. 
NOTWITHSTANDING THE FOREGOING, TOSHIBA OR VITAL IMAGES MAY SEEK TO VACATE OR
MODIFY THE FAIR

 

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MARKET VALUE OF THE OPTION RIGHTS AS ESTABLISHED PURSUANT TO THIS DEFINITION
SOLELY ON THE GROUNDS OF FRAUD OR MISCALCULATION OF FIGURES.

 

H.          “FOREGROUND RIGHTS” MEANS ANY PATENTS, ALGORITHMS OR OTHER
INTELLECTUAL PROPERTY AUTHORED, CONCEIVED AND/OR REDUCED TO PRACTICE BY TOSHIBA
AND/OR VITAL IMAGES EMPLOYEES OR AGENTS DURING THE TERM PURSUANT TO THIS
AGREEMENT OR ANY PRODUCT DEVELOPMENT PLAN.

 

I.           “INTELLECTUAL PROPERTY” MEANS ALL FORMS OF INTELLECTUAL PROPERTY IN
ANY JURISDICTION AND UNDER ANY LAW, WHETHER NOW OR HEREAFTER EXISTING, INCLUDING
(A) PATENTS; (B) ALGORITHMS; (C) TRADE SECRETS AND OTHER CONFIDENTIAL OR
NON-PUBLIC BUSINESS INFORMATION, INCLUDING, IDEAS, FORMULAS, COMPOSITIONS,
INVENTOR’S NOTES, DISCOVERIES, IMPROVEMENTS, CONCEPTS, KNOW-HOW, MANUFACTURING
AND DEVELOPMENT INFORMATION, DATA RESULTING OR DERIVED FROM RESEARCH ACTIVITIES,
INVENTIONS, INVENTION DISCLOSURES, UNPATENTED BLUE PRINTS, DRAWINGS,
SPECIFICATIONS DESIGNS, PLANS, PROPOSALS AND TECHNICAL DATA, BUSINESS AND
MARKETING PLANS, MARKET SURVEYS, MARKET KNOW-HOW AND CUSTOMER LISTS AND RELATED
INFORMATION; (D) COPYRIGHTS, WHETHER OR NOT REGISTERED, AND ANY NON-REGISTERED
COPYRIGHT TO ANY WRITINGS AND OTHER COPYRIGHTABLE WORKS OF AUTHORSHIP, INCLUDING
SOURCE CODE, OBJECT CODE, DOCUMENTATION (WHETHER OR NOT RELEASED), AND
DATABASES; (E) INTEGRATED CIRCUIT TOPOGRAPHIES AND MASK WORKS; (F) FEATURES OF
SHAPE, CONFIGURATION, PATTERN OR ORNAMENT; AND (G) REGISTRATIONS OF, AND
APPLICATIONS TO REGISTER, ANY OF THE FOREGOING WITH ANY GOVERNMENTAL ENTITY AND
ANY RENEWALS OR EXTENSIONS THEREOF AND ALL OTHER RIGHTS TO ANY OF THE FOREGOING,
BUT EXCLUDING TRADEMARKS AND RELATED RIGHTS.

 

J.           “JOINTLY-OWNED FOREGROUND RIGHTS” MEANS ANY FOREGROUND RIGHTS
(INCLUDING ANY IMPROVEMENTS, MODIFICATIONS OR DERIVATIVE WORKS THERETO)
AUTHORED, CONCEIVED AND/OR REDUCED TO PRACTICE JOINTLY BY BOTH TOSHIBA AND VITAL
IMAGES EMPLOYEES OR AGENTS IN THE PERFORMANCE OF A PRODUCT DEVELOPMENT PLAN.
NOTWITHSTANDING THE FOREGOING, ANY SOURCE CODE WRITTEN BY, ON BEHALF OF OR WITH
THE PARTICIPATION OF VITAL IMAGES, ITS EMPLOYEES OR AGENTS IS NOT A PART OF
JOINTLY-OWNED FOREGROUND RIGHTS, REGARDLESS WHETHER SUCH SOURCE CODE IS PART OF
PROJECT SOFTWARE AND EVEN IF TOSHIBA EMPLOYEES OR AGENTS PARTICIPATE IN THE
CREATION OF SUCH SOURCE CODE. FOR PURPOSES OF CLARITY, THE FACT THAT THE
DEVELOPMENT OF FOREGROUND RIGHTS BY VITAL IMAGES EMPLOYEES OR AGENTS MAY BE
FUNDED IN WHOLE OR IN PART BY TOSHIBA DOES NOT MAKE SUCH FOREGROUND RIGHTS
JOINTLY-OWNED FOREGROUND RIGHTS UNLESS TOSHIBA EMPLOYEES OR AGENTS ALSO
AUTHORED, CONCEIVED AND/OR REDUCED TO PRACTICE SUCH FOREGROUND RIGHTS.

 

K.          “PARTY” MEANS EACH OF TOSHIBA AND VITAL IMAGES, AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS.

 

L.           “PATENTS” MEANS INVENTIONS, DISCOVERIES, PATENT APPLICATIONS,
PATENTS (INCLUDING LETTERS PATENT, INDUSTRIAL DESIGNS, AND INVENTOR’S
CERTIFICATES), DESIGN REGISTRATIONS, INVENTION DISCLOSURES, AND APPLICATIONS TO
REGISTER INDUSTRIAL DESIGNS, AND ANY AND ALL RIGHTS TO ANY OF THE FOREGOING
ANYWHERE IN THE WORLD,

 

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INCLUDING ANY PROVISIONALS, SUBSTITUTIONS, EXTENSIONS, SUPPLEMENTARY PATENT
CERTIFICATES, REISSUES, RE-EXAMS, RENEWALS, DIVISIONS, CONTINUATIONS,
CONTINUATIONS IN PART, CONTINUED PROSECUTION APPLICATIONS, AND OTHER SIMILAR
FILINGS OR NOTICES PROVIDED FOR UNDER THE LAWS OF THE UNITED STATES OR OF ANY
OTHER COUNTRY.

 

M.         “PRODUCT DEVELOPMENT PLAN” MEANS A WRITTEN STATEMENT OF WORK WITH
RESPECT TO PARTICULAR PROJECT SOFTWARE THAT IS EXECUTED BY TOSHIBA AND VITAL
IMAGES IN SUBSTANTIALLY THE FORM OF EXHIBIT B ATTACHED HERETO.

 

N.          “PRODUCT DEVELOPMENT PLAN COMMENCEMENT DATE” MEANS, WITH RESPECT TO
EACH PRODUCT DEVELOPMENT PLAN, THE DATE WORK IS TO BEGIN ON SUCH PRODUCT
DEVELOPMENT PLAN (WHICH SHALL BE NOTED ON SUCH PRODUCT DEVELOPMENT PLAN).

 

O.          “PRODUCT ROADMAP” IS DEFINED IN SECTION 3.B.

 

P.          “PROJECT SOFTWARE” MEANS SOFTWARE OR CLINICAL APPLICATIONS DEVELOPED
PURSUANT TO THIS AGREEMENT, AS MORE FULLY DESCRIBED IN A PRODUCT DEVELOPMENT
PLAN.  PROJECT SOFTWARE MAY BE BASED ON, COVERED BY, INCORPORATE OR USE TOSHIBA
BACKGROUND RIGHTS, TOSHIBA FOREGROUND RIGHTS, VITAL IMAGES BACKGROUND RIGHTS,
VITAL IMAGES FOREGROUND RIGHTS, OR JOINTLY-OWNED FOREGROUND RIGHTS, AND SUCH
UNDERLYING RIGHTS ARE NOT WITHIN THE DEFINITION OF “PROJECT SOFTWARE”. EACH
PRODUCT DEVELOPMENT PLAN WILL SPECIFICALLY DESCRIBE THE PROJECT SOFTWARE TO BE
DEVELOPED PURSUANT TO SUCH PRODUCT DEVELOPMENT PLAN.

 

Q.          “RELEASE OF PROJECT SOFTWARE” MEANS ACHIEVEMENT OF VITAL IMAGES
MILESTONE 3 (M3), I.E., THE COMPLETION OF TESTING AND FULFILLMENT OF RELEASE
REQUIREMENTS OF PROJECT SOFTWARE, AS MORE FULLY DESCRIBED IN THE PRODUCT
DEVELOPMENT PLAN APPLICABLE TO SUCH PROJECT SOFTWARE.

 

R.           “RESELLER AGREEMENT” MEANS THE MARKETING AND DISTRIBUTION AGREEMENT
BETWEEN TOSHIBA AND VITAL IMAGES DATED AS OF NOVEMBER 21, 2008, AND EFFECTIVE AS
OF JANUARY 1, 2009, AS AMENDED, RESTATED, SUPPLEMENTED, EXTENDED, RENEWED OR
OTHERWISE MODIFIED FROM TIME TO TIME.

 

S.          “SILENT PERIOD” MEANS ANY PERIOD OF TIME DURING THE TERM DURING
WHICH NO PRODUCT DEVELOPMENT PLANS ARE ACTIVE.

 

T.           “SPECIFICATIONS” MEANS INSTRUCTIONS, DRAWINGS, TECHNICAL
SPECIFICATIONS AND ANY OTHER REQUIREMENTS FOR THE PROJECT SOFTWARE AGREED
BETWEEN TOSHIBA AND VITAL IMAGES.

 

U.          “THIRD PARTY TOOLS” MEANS PROGRAMMING, DEVELOPMENT, OR OTHER TOOLS
OF THIRD PARTIES THAT VITAL IMAGES DESIRES TO USE OR DOES USE OR INCORPORATES IN
THE PROJECT SOFTWARE OR DOCUMENTATION.

 

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V.          “TOSHIBA BACKGROUND RIGHTS” MEANS ANY INTELLECTUAL PROPERTY
AUTHORED, CONCEIVED AND/OR REDUCED TO PRACTICE BY TOSHIBA (I) PRIOR TO THE
EFFECTIVE DATE, (II) AFTER THE EXPIRATION OR TERMINATION OF THIS AGREEMENT OR
(III) DURING THE TERM BUT WHICH IS OUTSIDE THE SCOPE OF THE WORK CONTEMPLATED BY
ANY PRODUCT DEVELOPMENT PLAN.

 

W.         “TOSHIBA COMPETITOR” MEANS (I) EACH OF * * *, * * *, AND * * * AND
THEIR RESPECTIVE AFFILIATES AND (II) EACH OF THE MEDICAL VISUALIZATION
SUBSIDIARIES OR BUSINESSES OF THE ENTITIES IN SUBSECTION (I), IF AND WHEN SUCH
SUBSIDIARIES OR BUSINESS IS NO LONGER OWNED BY SUCH ENTITIES.

 

X.           “TOSHIBA FIELD OF USE” MEANS SOFTWARE RESIDING ON MODALITY SCANNER
HARDWARE AND ANY RELATED CONSOLES  THAT IS DEVELOPED, MANUFACTURED, PROMOTED,
MARKETED, SOLD AND/OR DISTRIBUTED BY OR ON BEHALF OF TOSHIBA.

 

Y.          “TOSHIBA FOREGROUND RIGHTS” MEANS ANY FOREGROUND RIGHTS AUTHORED,
CONCEIVED, AND/OR REDUCED TO PRACTICE SOLELY BY TOSHIBA’S EMPLOYEES OR AGENTS.

 

Z.           “VITAL IMAGES BACKGROUND RIGHTS” MEANS ANY INTELLECTUAL PROPERTY
AUTHORED, CONCEIVED AND/OR REDUCED TO PRACTICE BY VITAL IMAGES (I) PRIOR TO THE
EFFECTIVE DATE, (II) AFTER THE EXPIRATION OR TERMINATION OF THIS AGREEMENT OR
(III) DURING THE TERM BUT WHICH IS OUTSIDE THE SCOPE OF THE WORK CONTEMPLATED BY
ANY PRODUCT DEVELOPMENT PLAN.

 

AA.        “VITAL IMAGES FIELD OF USE” MEANS SOFTWARE FOR MEDICAL VISUALIZATION
THAT IS DEVELOPED, MANUFACTURED, PROMOTED, MARKETED, SOLD AND/OR DISTRIBUTED BY
OR ON BEHALF OF VITAL IMAGES.

 

BB.        “VITAL IMAGES FOREGROUND RIGHTS” MEANS ANY FOREGROUND RIGHTS
AUTHORED, CONCEIVED, AND/OR REDUCED TO PRACTICE SOLELY BY VITAL IMAGES’
EMPLOYEES OR AGENTS.  NOTWITHSTANDING THE FOREGOING, ANY SOURCE CODE WRITTEN BY,
ON BEHALF OF OR WITH THE PARTICIPATION OF VITAL IMAGES, ITS EMPLOYEES OR AGENTS
IS NOT A PART OF VITAL IMAGES FOREGROUND RIGHTS, REGARDLESS WHETHER SUCH SOURCE
CODE IS PART OF PROJECT SOFTWARE.

 

CC.        “WORK PRODUCT” MEANS ALL REPORTS, DESIGNS, DATA, TEST RESULTS,
DRAWINGS, MODELS, ALGORITHMS, INSTRUCTIONS, SPECIFICATIONS, NOTES, ANALYSIS,
MEMORANDA, DESIGNS, SOFTWARE, OBJECT CODE, SOURCE CODE, PLANS, RECORDS,
HARDWARE, MANUALS, DOCUMENTS, PROTOTYPES, TRADE SECRETS, INVENTIONS,
DISCOVERIES, WORKS OF AUTHORSHIP, DELIVERABLES AND OTHER MATERIALS AND WORK
PRODUCTS CREATED OR MADE BY OR ON BEHALF OF A PARTY PURSUANT TO THIS AGREEMENT.

 

2.             Development of Project Software.

 

A.          PRODUCT DEVELOPMENT PLANS.  FROM TIME TO TIME DURING THE TERM OF
THIS AGREEMENT, TOSHIBA AND VITAL IMAGES MAY ENTER INTO PRODUCT DEVELOPMENT

 

* * * Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission.

 

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PLANS WITH RESPECT TO PROJECT SOFTWARE.   UPON THE EXECUTION OF A PRODUCT
DEVELOPMENT PLAN, VITAL IMAGES SHALL BEGIN DEVELOPING THE PROJECT SOFTWARE
DESCRIBED IN SUCH PRODUCT DEVELOPMENT PLAN IN ACCORDANCE WITH THE SCHEDULE AND
OTHER TERMS SET FORTH IN SUCH PRODUCT DEVELOPMENT PLAN AND THE OTHER TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT.

 

B.          CHANGES TO PRODUCT DEVELOPMENT PLANS.  THE PARTIES MAY AMEND A
PRODUCT DEVELOPMENT PLAN AT ANY TIME BY MUTUAL WRITTEN AGREEMENT. ANY CHANGES OR
AMENDMENTS SHALL BE MADE IN ACCORDANCE WITH VITAL IMAGES’ CHANGE CONTROL
PROCESS.

 

C.          COOPERATION.  THE PERFORMANCE OF THE DEVELOPMENT CONTEMPLATED
HEREUNDER SHALL BE COORDINATED BY THE PROJECT MANAGERS (DEFINED IN SECTION 3). 
THE PARTIES AGREE THAT THE SUCCESSFUL COMPLETION OF ANY DEVELOPMENT ACTIVITIES
IS LARGELY DEPENDENT UPON THE COOPERATION AND THE REGULAR EXCHANGE OF
INFORMATION BETWEEN THE PARTIES.  THE PARTIES SHALL FACILITATE THE DEVELOPMENT
CONTEMPLATED HEREUNDER THROUGH THE REGULAR EXCHANGE OF INFORMATION.  EACH PARTY
SHALL INFORM THE OTHER WITHOUT UNDUE DELAY ABOUT ANY DELAYS IN THE PERFORMANCE
UNDER ANY ONGOING PRODUCT DEVELOPMENT PLAN OR THE ACHIEVEMENT OF ANY MILESTONES
UNDER ANY ONGOING PRODUCT DEVELOPMENT PLAN.

 

D.          RELEASE OF PROJECT SOFTWARE.  UPON RELEASE OF PROJECT SOFTWARE WITH
RESPECT TO ANY PROJECT SOFTWARE DESCRIBED IN A PRODUCT DEVELOPMENT PLAN (THE
DATE OF RELEASE OF PROJECT SOFTWARE, THE “RELEASE DATE”), SUCH PROJECT SOFTWARE
SHALL BECOME A “PRODUCT” (AS SUCH TERM IS DEFINED IN THE RESELLER AGREEMENT) AND
SHALL BE SUBJECT TO ALL TERMS AND CONDITIONS OF THE RESELLER AGREEMENT.  THE
PARTIES SHALL AGREE UPON PRICING FOR THE PROJECT SOFTWARE AND SHALL AMEND
EXHIBIT E TO THE RESELLER AGREEMENT TO REFLECT THE PRICING FOR THE PROJECT
SOFTWARE THAT THE PARTIES HAVE AGREED UPON.  THE PRODUCT DEVELOPMENT PLAN SHALL
TERMINATE ON THE RELEASE DATE OF THE RELATED PROJECT SOFTWARE.  FOR PURPOSES OF
CLARITY, OWNERSHIP OF PROJECT SOFTWARE, INCLUDING THE SOURCE CODE AND OBJECT
CODE, SHALL REMAIN WITH VITAL IMAGES (SUBJECT TO TOSHIBA’S RIGHTS IN ANY TOSHIBA
BACKGROUND RIGHTS, TOSHIBA FOREGROUND RIGHTS OR JOINTLY-OWNED FOREGROUND RIGHTS
INCORPORATED THEREIN) AND TOSHIBA SHALL HAVE NO RIGHTS TO REVERSE ENGINEER OR
DECOMPILE SUCH PROJECT SOFTWARE.

 

E.          TOSHIBA EXCLUSIVE RESELL PERIOD.  WITH RESPECT TO PROJECT SOFTWARE
THAT BECOMES A PRODUCT AS DESCRIBED ABOVE, NOTWITHSTANDING ANY PROVISIONS TO THE
CONTRARY IN ANY OTHER AGREEMENT BETWEEN THE PARTIES, TOSHIBA SHALL HAVE THE
EXCLUSIVE RIGHT TO RESELL SUCH PRODUCT IN ACCORDANCE WITH THE RESELLER
AGREEMENT, UNTIL THE DATE THAT IS ONE HUNDRED EIGHTY (180) DAYS AFTER THE
RELEASE DATE (THE “EXCLUSIVE PERIOD”).  VITAL IMAGES AGREES THAT IT WILL NOT
SELL, LICENSE, SUB-LICENSE OR OTHERWISE TRANSFER OR DISPOSE OF SUCH PRODUCT TO
ANY PERSON OTHER THAN TOSHIBA DURING THE APPLICABLE EXCLUSIVE PERIOD.

 

8

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3.           Project Management.

 

  A.        EACH PARTY SHALL EACH DESIGNATE A “PROJECT MANAGER” FOR EACH PRODUCT
DEVELOPMENT PLAN IN EFFECT FROM TIME TO TIME WHO SHALL BE THE PRINCIPAL POINT OF
CONTACT FOR ALL MATTERS RELATING TO SUCH PRODUCT DEVELOPMENT PLAN.  THE PROJECT
MANAGER DESIGNATED BY A PARTY FOR A PRODUCT DEVELOPMENT PLAN MAY BE CHANGED BY
WRITTEN NOTICE TO THE OTHER PARTY.

 

  B.        TOSHIBA AND VITAL IMAGES AGREE TO DEVELOP A “PRODUCT ROADMAP” THAT
WILL DESCRIBE THE DEVELOPMENT ACTIVITIES THE PARTIES DESIRE TO UNDERTAKE UNDER
THIS AGREEMENT.  THE PRODUCT ROADMAP SHALL BE REVISED BY THE PARTIES EVERY SIX
MONTHS AND SHALL DESCRIBE THE PARTIES’ DEVELOPMENT AND RELEASE PLANS RELATING TO
THIS AGREEMENT FOR THE NEXT TWO YEARS (OR UNTIL THE END OF THE TERM OF THIS
AGREEMENT, IF THE REMAINING TERM OF THIS AGREEMENT IS LESS THAN TWO YEARS AT THE
TIME OF THE REVISION OF THE PRODUCT ROADMAP).

 

  C.        TOSHIBA AND VITAL IMAGES WILL MEET ON AN AS NEEDED BASIS, BUT AT
LEAST TWICE ANNUALLY, AT MUTUALLY AGREED TIMES AND PLACES TO:

 

(I)            REVIEW AND REVISE THE PRODUCT ROADMAP;

 

(II)           REVIEW THE PROGRESS OF EACH ONGOING PRODUCT DEVELOPMENT PLAN AND
DISCUSS NECESSARY CHANGES TO THE SCOPE, DEVELOPMENT SCHEDULE OR ACTIONS TO BE
TAKEN;

 

(III)          SYNCHRONIZE THE PARTIES’ PRODUCT DEVELOPMENT PLANS AND PROCESSES;
AND

 

(IV)         DISCUSS ANY OTHER MATTERS AS AGREED UPON BY THE PARTIES.

 

4.           Funding of Development Costs; Resources Devoted to Development.

 

  A.        VITAL IMAGES RESOURCES. VITAL IMAGES AGREES TO DEVOTE AT LEAST * * *
FULL-TIME PRODUCT DEVELOPMENT ENGINEERING PERSONNEL (INCLUDING PROJECT
MANAGEMENT, SCIENTIST/ALGORITHM DEVELOPMENT ENGINEERS, SOFTWARE/CLINICAL
DEVELOPMENT ENGINEERS, AND QUALITY/TEST ENGINEERS) DURING THE TERM OF THIS
AGREEMENT TO WORK EXCLUSIVELY ON ACTIVITIES DEFINED IN THE PRODUCT DEVELOPMENT
PLANS IN EFFECT FROM TIME TO TIME AND TO ACCELERATING CLINICAL APPLICATION
DEVELOPMENT AS DEFINED IN THE PRODUCT ROADMAP.  IN ADDITION, VITAL IMAGES WILL
ASSIGN WITHOUT LIMITATION THE NECESSARY SHARED RESOURCES TO SUPPORT THE
VALIDATION AND TESTING, ALPHA/BETA TESTING, CLINICAL EVALUATION SUPPORT, AND
PROGRAM AND RELEASE MANAGEMENT DEFINED IN THE PRODUCT DEVELOPMENT PLANS IN
EFFECT FROM TIME TO TIME.

 

  B.        TOSHIBA FUNDING/RESOURCES.  TOSHIBA SHALL PAY VITAL IMAGES FOR THE
EFFORTS EXPENDED IN EACH PRODUCT DEVELOPMENT PLAN IN EFFECT FROM TIME TO TIME AT
THE RATES SET FORTH ON EXHIBIT A (THE “TOSHIBA FUNDING”).  TOSHIBA AGREES THAT
SO LONG AS AT LEAST ONE PRODUCT DEVELOPMENT PLAN IS IN EFFECT, TOSHIBA FUNDING
WILL NOT BE LESS THAN AN AMOUNT SUFFICIENT TO PROVIDE FUNDING FOR THE * * *
FULL-TIME

 

* * * Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission.

 

9

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PRODUCT DEVELOPMENT ENGINEERING PERSONNEL REFERRED TO IN SECTION 4.A. TOSHIBA
WILL DEVOTE SUCH INTERNAL RESOURCES AND PERSONNEL AS ARE REASONABLY NECESSARY TO
FULFILL TOSHIBA’S OBLIGATIONS UNDER THIS AGREEMENT.  TOSHIBA SHALL BE
RESPONSIBLE FOR MANAGING AND FUNDING CLINICAL EVALUATION AND VALIDATION OF
PROJECT SOFTWARE AND SHALL ENABLE THE PARTICIPATION OF VITAL IMAGES’ PERSONNEL
IN SUCH PROCESS; PROVIDED, HOWEVER, THAT VITAL IMAGES MAY ALSO CONDUCT
INDEPENDENT CLINICAL EVALUATION AND VALIDATION.  CLINICAL EVALUATION AND
VALIDATION FOR PROJECT SOFTWARE SHALL BE DEFINED IN EACH PRODUCT DEVELOPMENT
PLAN IN EFFECT FROM TIME TO TIME.

  C.        SILENT PERIOD.  DURING ANY SILENT PERIOD BUT NOT TO EXCEED SIX
(6) MONTHS, TOSHIBA WILL CONTINUE TO PROVIDE FUNDING TO VITAL IMAGES, AT THE
RATES SET FORTH IN EXHIBIT A, FOR ANY VITAL IMAGES PERSONNEL WHO, DURING SUCH
SILENT PERIOD, ARE ASSIGNED TO AND ACTIVELY ENGAGED ON PROJECTS RELATED TO
ERRORS REPORTED IN ANY PROJECT SOFTWARE THAT HAS BEEN RELEASED PRIOR TO SUCH
SILENT PERIOD PURSUANT TO THIS AGREEMENT.  IN ADDITION, DURING ANY SILENT PERIOD
AND ALSO AFTER ANY EXPIRATION OF THE TERM (BUT NOT AFTER ANY TERMINATION OF THE
TERM UNDER SECTION 6(B), (C) OR (D)), TOSHIBA WILL PROVIDE FUNDING FOR * * *
FULL-TIME PRODUCT DEVELOPMENT ENGINEERING PERSONNEL FOR A PERIOD, NOT TO EXCEED
SIX (6) MONTHS DURING AND AFTER THE EXPIRATION OF THE TERM IN ORDER TO ASSIST
VITAL IMAGES TO COVER REALLOCATION AND/OR TERMINATION COSTS.

 

  D.        REPORTING AND AUDIT PROVISIONS.  VITAL IMAGES WILL IMPLEMENT A
PROJECT ACCOUNTING SYSTEM TO TRACK ITS SPENDING AND TIME WORKED, ON AN
EMPLOYEE-BY-EMPLOYEE BASIS, ON (I) EACH PRODUCT DEVELOPMENT PLAN IN EFFECT FROM
TIME TO TIME, OR (II) ANY OTHER WORK PERFORMED BY VITAL IMAGES PERSONNEL FOR
WHICH TOSHIBA IS REQUIRED TO PROVIDE ANY FUNDING UNDER THIS AGREEMENT.  VITAL
IMAGES WILL PROVIDE TO TOSHIBA A PERIODIC REPORT OF SUCH SPENDING AND TIME
WORKED IN A FORM AND FREQUENCY TO BE AGREED UPON BY THE PARTIES (THE “SPENDING
REPORTS”).  TOSHIBA SHALL HAVE THE RIGHT, AT ITS COST AND EXPENSE, TO AUDIT THE
SPENDING REPORTS FROM TIME TO TIME.  UPON REASONABLE PRIOR REQUEST BY TOSHIBA,
VITAL IMAGES WILL PERMIT TOSHIBA PERSONNEL AND TOSHIBA’S DESIGNATED OUTSIDE
ACCOUNTANT TO REVIEW THE SPENDING REPORTS AND ALL SUPPORTING OR RELATED BOOKS,
RECORDS, SYSTEMS, INVOICES, RECEIPTS AND OTHER DOCUMENTS OF VITAL IMAGES (ALL OF
WHICH SHALL BE TREATED AS CONFIDENTIAL INFORMATION OF VITAL IMAGES).  VITAL
IMAGES SHALL COOPERATE REASONABLY WITH TOSHIBA PERSONNEL AND ITS ACCOUNTANT IN
CONNECTION WITH ANY SUCH AUDIT.

 

5.           Original Works.

 

  A.        EXCEPT FOR THIRD-PARTY TOOLS, ALL VITAL IMAGES’ WORK PRODUCT SHALL
CONSTITUTE ORIGINAL WORKS UNDER ALL APPLICABLE COPYRIGHT LAWS.

 

  B.        VITAL IMAGES SHALL OBTAIN IN WRITING ALL RIGHTS, LICENSES, GRANTS,
CONSENTS, AND/OR PERMISSIONS NECESSARY TO USE OR INCORPORATE ANY THIRD PARTY
TOOLS.  VITAL IMAGES SHALL FURTHER ENSURE THAT NO FEES, PAYMENTS, ROYALTIES, OR
ANY ADDITIONAL

 

* * * Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission.

 

10

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CONSIDERATION OF ANY KIND WILL BE IMPOSED UPON TOSHIBA BY ANY THIRD PARTY WITH
RESPECT TO ANY SUCH THIRD PARTY TOOLS.

 

6.                                       Term and Termination.

 

  A.                                TERM OF AGREEMENT.  THE “TERM” OF THIS
AGREEMENT SHALL BEGIN ON THE EFFECTIVE DATE AND SHALL, UNLESS TERMINATED EARLIER
AS PROVIDED HEREIN, TERMINATE IMMEDIATELY ON DECEMBER 31, 2009, PROVIDED THAT
THE AGREEMENT SHALL RENEW IF, AT ANY TIME DURING THE TERM, A NEW PRODUCT
DEVELOPMENT PLAN IS AGREED TO THAT WILL EXTEND INTO THE NEXT CALENDAR YEAR, IN
WHICH CASE THIS AGREEMENT SHALL AUTOMATICALLY RENEW UNTIL SIX (6) MONTHS
FOLLOWING THE END OF ALL ACTIVE PRODUCT DEVELOPMENT PLANS (AND THE WORD “TERM”,
WHERE USED HEREIN, SHALL BE DEEMED TO INCLUDE SUCH EXTENDED PERIOD).  UPON
EXPIRATION OF THE TERM OR TERMINATION OF THIS AGREEMENT, NEITHER PARTY SHALL
HAVE ANY FURTHER OBLIGATION TO THE OTHER PARTY UNDER THIS AGREEMENT (INCLUDING,
FOR AVOIDANCE OF DOUBT, ANY OBLIGATION OF TOSHIBA TO PROVIDE ANY FURTHER FUNDING
TO VITAL IMAGES PURSUANT TO THE AGREEMENT OTHER THAN PAYMENT OF INVOICES FOR
EFFORTS EXPENDED BY VITAL IMAGES PRIOR TO THE EXPIRATION OF THE TERM OR
TERMINATION OF THIS AGREEMENT); PROVIDED, HOWEVER, THAT UPON SUCH EXPIRATION OR
TERMINATION (I) EACH PARTY SHALL RETURN TO THE OTHER PARTY ANY PROPERTY OF SUCH
OTHER PARTY IN ITS POSSESSION INCLUDING, BUT NOT LIMITED TO, THE OTHER PARTY’S
CONFIDENTIAL INFORMATION AND ANY TECHNICAL DOCUMENTS RELATED TO THE OTHER
PARTY’S BACKGROUND RIGHTS, (II) EACH PARTY SHALL RETAIN OWNERSHIP OF ITS
INTELLECTUAL PROPERTY (SUBJECT TO THE PROVISIONS OF SECTIONS 7, 8 AND 9 BELOW),
(III) THE PROVISIONS OF THE SECOND SENTENCE OF SECTION 4(C) SHALL SURVIVE
EXPIRATION OF THIS AGREEMENT IN ACCORDANCE WITH ITS TERMS,
(IV) SECTION 4(D) SHALL SURVIVE EXPIRATION OR TERMINATION AND CONTINUE IN FULL
FORCE AND EFFECT FOR A PERIOD OF SIX MONTHS, AND (V) THE PROVISIONS OF THIS
SECTION 6 AND SECTIONS 2(E), 7, 8(A), 8(B) (SUBJECT TO ANY DURATION PERIODS
PROVIDED THEREIN), 9, 10 AND 11 SHALL SURVIVE EXPIRATION OR TERMINATION AND
CONTINUE IN FULL FORCE AND EFFECT; PROVIDED THAT (I) SECTION 8(B) SHALL NOT
SURVIVE TERMINATION IN CASE THIS AGREEMENT IS TERMINATED BY TOSHIBA IN
ACCORDANCE WITH SECTION 6(B), (II) SECTION 8(A) SHALL NOT SURVIVE TERMINATION IN
CASE THIS AGREEMENT IS TERMINATED BY VITAL IMAGES IN ACCORDANCE WITH
SECTION 6(B), AND (III) SECTIONS 8(A) AND 8(B) SHALL NOT SURVIVE THE OCCURRENCE
OF A CHANGE IN CONTROL TO A TOSHIBA COMPETITOR IN CASE THIS AGREEMENT IS
TERMINATED BY TOSHIBA IN ACCORDANCE WITH SECTION 6(C) DUE TO THE OCCURRENCE OF
SUCH CHANGE IN CONTROL DURING THE TERM OF THIS AGREEMENT OR IN CASE TOSHIBA SO
REQUESTS TO VITAL IMAGES IN WRITING DUE TO THE OCCURRENCE OF SUCH CHANGE IN
CONTROL AFTER THE TERMINATION OR EXPIRATION OF THIS AGREEMENT, PROVIDED,
HOWEVER, THAT EACH PARTY MAY CONTINUE TO DEVELOP, MANUFACTURE, MARKET, AND
MAINTAIN ITS THEN CURRENT PRODUCTS WITHIN ITS FIELD OF USE AFTER INVALIDATION OF
SECTIONS 8(A) AND 8(B) HEREUNDER.

 

11

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  B.                TERMINATION FOR CAUSE.

 

(I)                                     MATERIAL BREACH.  EITHER PARTY SHALL
HAVE THE RIGHT TO TERMINATE THIS AGREEMENT AND ANY OR ALL ONGOING PRODUCT
DEVELOPMENT PLANS UPON IMMEDIATE WRITTEN NOTICE IF THE OTHER PARTY IS IN
MATERIAL BREACH OR DEFAULT OF ANY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS,
OR OTHER OBLIGATIONS SET FORTH IN THIS AGREEMENT OR ANY PRODUCT DEVELOPMENT PLAN
AND SUCH PARTY FAILS TO CURE SUCH BREACH OR DEFAULT WITHIN THIRTY (30) CALENDAR
DAYS FOLLOWING RECEIPT OF WRITTEN NOTICE OF SUCH BREACH.

 

(II)                                  INSOLVENCY.  EITHER PARTY MAY, AT ITS SOLE
OPTION, IMMEDIATELY TERMINATE THIS AGREEMENT AND ANY OR ALL ONGOING PRODUCT
DEVELOPMENT PLANS UPON WRITTEN NOTICE, BUT WITHOUT PRIOR ADVANCE NOTICE, TO THE
OTHER PARTY IN THE EVENT THAT (A) THE OTHER PARTY IS OR BECOMES INSOLVENT OR IS
DECLARED BANKRUPT BY A COURT OF COMPETENT JURISDICTION; (B) A VOLUNTARY PETITION
OF BANKRUPTCY IS FILED IN ANY COURT OF COMPETENT JURISDICTION BY SUCH OTHER
PARTY; (C) AN INVOLUNTARY PETITION FOR BANKRUPTCY IS FILED IN ANY COURT OF
COMPETENT JURISDICTION AGAINST SUCH OTHER PARTY; (D) A RECEIVER OR TRUSTEE IS
APPOINTED FOR SUCH OTHER PARTY; OR (E) THIS AGREEMENT IS ASSIGNED BY SUCH OTHER
PARTY FOR THE BENEFIT OF CREDITORS.  FOR PURPOSES OF THIS AGREEMENT, A PARTY
SHALL BE DEEMED TO BE “INSOLVENT” WHEN SUCH PARTY HAS CEASED TO PAY ITS DEBTS IN
THE ORDINARY COURSE OF BUSINESS, CANNOT PAY ITS DEBTS AS THEY BECOME DUE, OR IS
INSOLVENT WITHIN THE MEANING OF THE FEDERAL BANKRUPTCY LAW.

 

  C.                 TERMINATION UPON CHANGE IN CONTROL.  VITAL IMAGES SHALL
GIVE TOSHIBA NOTICE OF THE OCCURRENCE OF A CHANGE IN CONTROL NO LATER THAN TWO
(2) BUSINESS DAYS AFTER THE OCCURRENCE OF SUCH CHANGE IN CONTROL.  NEITHER THE
FAILURE NOR DELAY BY VITAL IMAGES IN GIVING SUCH NOTICE SHALL AFFECT ANY OF
TOSHIBA’S RIGHTS UNDER THIS AGREEMENT.  TOSHIBA MAY TERMINATE THIS AGREEMENT AND
ANY OR ALL ONGOING PRODUCT DEVELOPMENT PLANS UPON THIRTY (30) DAYS WRITTEN
NOTICE TO VITAL IMAGES IN THE EVENT OF A CHANGE IN CONTROL; PROVIDED, HOWEVER,
THAT SUCH NOTICE MUST BE GIVEN TO VITAL IMAGES WITHIN THIRTY (30) DAYS OF THE
DATE VITAL IMAGES GIVES NOTICE OF THE OCCURRENCE OF A CHANGE IN CONTROL.

 

  D.                TERMINATION WITHOUT CAUSE.  EITHER PARTY SHALL HAVE THE
RIGHT TO TERMINATE THIS AGREEMENT UPON SIX (6) MONTH ADVANCE WRITTEN NOTICE,
PROVIDED THAT IF AT THE END OF SUCH 6-MONTH NOTICE PERIOD THERE IS ONE OR MORE
ONGOING PRODUCT DEVELOPMENT PLANS, THE NOTICE PERIOD WILL BE EXTENDED
AUTOMATICALLY UNTIL THE RELEASE DATE OF SUCH ONGOING PRODUCT DEVELOPMENT PLAN
(OR THE LAST RELEASE DATE, IF THERE WAS MORE THAN ONE SUCH ONGOING PRODUCT
DEVELOPMENT PLAN) AND UPON SUCH RELEASE DATE THIS AGREEMENT WILL THEN TERMINATE.

 

12

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7.                                       Ownership of Intellectual Property. 
Ownership of Intellectual Property shall be as follows:

 

  A.                                VITAL IMAGES SHALL NOT ACQUIRE ANY OWNERSHIP
INTEREST IN ANY TOSHIBA BACKGROUND RIGHTS OR TOSHIBA FOREGROUND RIGHTS AS A
RESULT OF ENTERING INTO OR PERFORMING THIS AGREEMENT OR ANY PRODUCT DEVELOPMENT
PLAN.  TOSHIBA SHALL NOT ACQUIRE ANY OWNERSHIP INTEREST IN ANY VITAL IMAGES
BACKGROUND RIGHTS, VITAL IMAGES FOREGROUND RIGHTS OR PROJECT SOFTWARE AS A
RESULT OF ENTERING INTO OR PERFORMING THIS AGREEMENT OR ANY PRODUCT DEVELOPMENT
PLAN.  EACH PARTY SHALL OWN ALL INTELLECTUAL PROPERTY IN ANY IMPROVEMENTS,
MODIFICATIONS, OR DERIVATIVE WORKS THAT ARE AUTHORED, CONCEIVED, AND/OR REDUCED
TO PRACTICE SOLELY BY SUCH PARTY’S EMPLOYEES OR AGENTS AND BASED UPON THE OTHER
PARTY’S BACKGROUND RIGHTS OR FOREGROUND RIGHTS (SUBJECT TO THE OTHER PARTY’S
OWNERSHIP OF THE ORIGINAL UNDERLYING RIGHTS).

 

  B.                               IF AND TO THE EXTENT ANY JOINTLY-OWNED
FOREGROUND RIGHTS ARE CREATED:

 

(I)                                     EACH OF TOSHIBA AND VITAL IMAGES SHALL
HAVE AN UNDIVIDED OWNERSHIP INTEREST IN THE JOINTLY-OWNED FOREGROUND RIGHTS, AND
SUCH OWNERSHIP INTEREST SHALL SURVIVE TERMINATION OF THIS AGREEMENT AND THE
RESELLER AGREEMENT, AND NEITHER PARTY SHALL OWE THE OTHER ANY ROYALTY, LICENSE
FEE OR OTHER SUM FOR SUCH OWNERSHIP RIGHTS.

 

(II)                                  THE PARTIES MAY ELECT TO JOINTLY FILE FOR
PATENT OR OTHER INTELLECTUAL PROPERTY PROTECTION WITH RESPECT TO JOINTLY-OWNED
FOREGROUND RIGHTS, AND SHALL SHARE THE COST OF SUCH FILING EQUALLY.  IF EITHER
PARTY CHOOSES NOT TO SEEK SUCH PROTECTION, THE OTHER PARTY MAY PROCEED AT ITS
OWN EXPENSE; PROVIDED THAT THE NON-FILING PARTY SHALL PROVIDE REASONABLE
ASSISTANCE IN CONNECTION WITH THE PREPARATION AND PROSECUTION OF SUCH PATENT
APPLICATION.

 

(III)                               TOSHIBA GRANTS TO VITAL IMAGES A WORLDWIDE,
EXCLUSIVE (EVEN AS AGAINST TOSHIBA), ROYALTY-FREE LICENSE, WITH RESPECT TO THE
JOINTLY-OWNED FOREGROUND RIGHTS, TO PRACTICE THE METHODS OF ANY PATENTS INCLUDED
THEREIN, TO MAKE, USE, OFFER TO SELL, SELL AND IMPORT PRODUCTS COVERED THEREBY,
AND TO DISTRIBUTE, PERFORM, DISPLAY, USE, MODIFY, IMPROVE AND MAKE DERIVATIVES
WORKS BASED UPON SUCH RIGHTS, IN EACH CASE, WITHIN THE VITAL IMAGES FIELD OF
USE. VITAL IMAGES GRANTS TO TOSHIBA A WORLDWIDE, EXCLUSIVE (EVEN AGAINST VITAL
IMAGES), ROYALTY-FREE LICENSE, WITH RESPECT TO THE JOINTLY-OWNED FOREGROUND
RIGHTS, TO PRACTICE THE METHODS OF ANY PATENTS INCLUDED THEREIN, TO MAKE, USE,
OFFER TO SELL, SELL AND IMPORT PRODUCTS COVERED THEREBY, AND TO DISTRIBUTE,
PERFORM, DISPLAY, USE, MODIFY, IMPROVE AND MAKE DERIVATIVES WORKS BASED UPON
SUCH RIGHTS, IN EACH CASE, WITHIN THE TOSHIBA FIELD OF USE.

 

13

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8.                                       Mutual License Grants.

 

  A.                                              VITAL IMAGES GRANT TO
TOSHIBA.  VITAL IMAGES HEREBY GRANTS AND AGREES TO GRANT TO TOSHIBA:

 

(I)                                     FOR THE TERM, A WORLDWIDE, NON-EXCLUSIVE
AND ROYALTY-FREE LICENSE TO THE VITAL IMAGES BACKGROUND RIGHTS SOLELY FOR THE
PURPOSE OF PERFORMING UNDER ANY PRODUCT DEVELOPMENT PLAN; AND

 

(II)                                  A WORLDWIDE, NON-EXCLUSIVE AND
ROYALTY-FREE LICENSE TO THE VITAL IMAGES FOREGROUND RIGHTS SOLELY IN THE TOSHIBA
FIELD OF USE.

 

  B.                                             TOSHIBA GRANT TO VITAL IMAGES. 
TOSHIBA HEREBY GRANTS AND AGREES TO GRANT TO VITAL IMAGES:

 

(I)                                     FOR THE TERM, A WORLDWIDE, NON-EXCLUSIVE
AND ROYALTY-FREE LICENSE TO THE TOSHIBA BACKGROUND RIGHTS SOLELY FOR THE PURPOSE
OF PERFORMING UNDER ANY PRODUCT DEVELOPMENT PLAN; AND

 

(II)                                  A WORLDWIDE, NON-EXCLUSIVE AND
ROYALTY-FREE LICENSE TO THE TOSHIBA FOREGROUND RIGHTS SOLELY IN THE VITAL IMAGES
FIELD OF USE.

 

  C.                                                TO THE EXTENT ANY
INTELLECTUAL PROPERTY IS BASED UPON, INCORPORATES, OR REQUIRES INTELLECTUAL
PROPERTY OWNED (EITHER JOINTLY OR IN WHOLE) OR CONTROLLED BY A THIRD PARTY AND
MUST BE USED IN CONNECTION WITH A PRODUCT DEVELOPMENT PLAN, THE PARTY PROVIDING
SUCH INTELLECTUAL PROPERTY TO THE OTHER PARTY SHALL OBTAIN ANY SUCH NECESSARY
LICENSES OR CONSENTS FROM SUCH THIRD PARTY.  IF SUCH INTELLECTUAL PROPERTY IS
USED JOINTLY BY THE PARTIES, THE PARTIES SHALL NEGOTIATE IN GOOD FAITH WITH SUCH
THIRD PARTY TO OBTAIN ANY SUCH NECESSARY LICENSES OR CONSENTS FROM SUCH THIRD
PARTY.  THE PARTIES ACKNOWLEDGE THAT THE PROJECT DEVELOPMENT PLAN MAY NOT BE
COMPLETED UNTIL ANY NECESSARY THIRD PARTY LICENSES OR CONSENTS ARE OBTAINED.

 

  D.                                               REPRESENTATIONS AND
WARRANTIES WITH RESPECT TO INTELLECTUAL PROPERTY.  EACH PARTY REPRESENTS AND
WARRANTS TO THE OTHER THAT IT HAS THE LEGAL POWER TO EXTEND THE RIGHTS GRANTED
TO THE OTHER WITH RESPECT TO SUCH PARTY’S INTELLECTUAL PROPERTY AND THAT IT HAS
NOT MADE AND WILL NOT MAKE ANY COMMITMENTS TO OTHERS INCONSISTENT WITH OR IN
DEROGATION OF SUCH RIGHTS. EACH PARTY REPRESENTS AND WARRANTS TO THE OTHER THAT
NO FEES, PAYMENTS, ROYALTIES, OR ANY ADDITIONAL CONSIDERATION OF ANY KIND WILL
BE IMPOSED UPON THE OTHER BY ANY THIRD PARTY WITH RESPECT TO ANY OF SUCH PARTY’S
INTELLECTUAL PROPERTY.

 

  E.                                                NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, EXCEPT AS FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN SECTION 8(D), THE PARTIES DO NOT MAKE ANY REPRESENTATION OR
WARRANTY OF ANY KIND (WHETHER EXPRESS, IMPLIED OR OTHERWISE) WITH RESPECT TO ANY
INTELLECTUAL PROPERTY LICENSED HEREUNDER, INCLUDING ITS VALIDITY,
ENFORCEABILITY, VALUE, RELIABILITY, SUITABILITY, FITNESS FOR USE OR PURPOSE, OR
NON-INFRINGEMENT OF THIRD PARTY RIGHTS.  IN NO EVENT SHALL EITHER PARTY’S
LIABILITY

 

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HEREUNDER EXCEED THE AMOUNTS PAID BY TOSHIBA TO VITAL IMAGES OTHER THAN
LIABILITY DERIVED FROM INFRINGEMENT OF THIRD PARTY RIGHTS.

 

9.                                       Option Upon Change in Control to a
Toshiba Competitor.

 

  A.                                UPON THE OCCURRENCE OF A CHANGE IN CONTROL
TO A TOSHIBA COMPETITOR, TOSHIBA SHALL HAVE THE OPTION, IN ITS SOLE DISCRETION,
TO PURCHASE VITAL IMAGES’ INTEREST IN THE JOINTLY-OWNED FOREGROUND RIGHTS (THE
“OPTION RIGHTS”) AND, IF TOSHIBA EXERCISES SUCH OPTION (I) OWNERSHIP OF THE
OPTION RIGHTS SHALL VEST SOLELY IN TOSHIBA AND THE LICENSES IN
SECTION 7(B)(III) SHALL TERMINATE UPON CONSUMMATION OF SUCH PURCHASE, AND
(II) TOSHIBA MAY (BUT SHALL NOT BE OBLIGATED TO)  GRANT (SUBJECT TO THE CONSENT
OF VITAL IMAGES, OR ITS SUCCESSORS, IN ITS DISCRETION) A WORLDWIDE,
NON-EXCLUSIVE LICENSE TO VITAL IMAGES IN THE OPTION RIGHTS TO PRACTICE THE
METHODS OF ANY PATENTS INCLUDED THEREIN, TO MAKE, USE, OFFER TO SELL, SELL AND
IMPORT PRODUCTS COVERED THEREBY, AND TO DISTRIBUTE, PERFORM, DISPLAY, USE,
MODIFY, IMPROVE AND MAKE DERIVATIVE WORKS BASED UPON SUCH RIGHTS, IN EACH CASE,
SOLELY WITHIN THE VITAL IMAGES FIELD OF USE, IN CONSIDERATION OF WHICH LICENSE
(WHICH SHALL CONTAIN THE FOREGOING TERMS AND OTHER REASONABLE TERMS AND
CONDITIONS WHICH ARE AGREED IN GOOD FAITH BY THE PARTIES) TOSHIBA SHALL BE
ENTITLED TO THE AGREED ROYALTIES (THE “NON-EXCLUSIVE LICENSE”).  THE TERMS OF
THE NON-EXCLUSIVE LICENSE MAY CONTAIN, AMONG OTHER THINGS, THE REQUIREMENT THAT
VITAL IMAGES IMPLEMENT REASONABLE POLICIES AND PROCEDURES TO PROTECT TOSHIBA’S
CONFIDENTIAL INFORMATION.  THE PURCHASE PRICE FOR THE OPTION RIGHTS (THE
“PURCHASE PRICE”) SHALL BE EQUAL TO THE FAIR MARKET VALUE OF THE OPTION RIGHTS. 
WITHIN THIRTY (30) DAYS AFTER THE DETERMINATION OF THE PURCHASE PRICE, TOSHIBA
SHALL ELECT WHETHER TO EXERCISE THE OPTION TO PURCHASE THE OPTION RIGHTS AND
WHETHER TO GRANT THE NON-EXCLUSIVE LICENSE, BY GIVING VITAL IMAGES WRITTEN
NOTICE OF ITS INTENT TO DO SO (THE “OPTION NOTICE”).

 

  B.                               AS SOON AS PRACTICABLE AFTER THE DELIVERY OF
THE OPTION NOTICE BUT NO LATER THAN SIXTY (60) DAYS THEREAFTER, (I) VITAL IMAGES
SHALL SELL AND TRANSFER THE OPTION RIGHTS TO TOSHIBA, FREE AND CLEAR OF ANY
LIENS OR OTHER ENCUMBRANCES (OTHER THAN THE NON-EXCLUSIVE LICENSE), AND TOSHIBA
SHALL PAY THE PURCHASE PRICE TO VITAL IMAGES IN IMMEDIATELY AVAILABLE US
DOLLAR-DENOMINATED FUNDS, AND (II) IF TOSHIBA AND VITAL IMAGES HAVE ELECTED TO
DO SO, TOSHIBA SHALL GRANT THE NON-EXCLUSIVE LICENSE TO VITAL IMAGES, SUBJECT TO
THE TERMS OF SECTION 9(A)(II), PROVIDED THAT THE TIME PERIOD TO CONSUMMATE THE
FOREGOING TRANSACTIONS MAY BE EXTENDED FOR SUCH PERIOD OF TIME AS IS REQUIRED TO
OBTAIN ANY NECESSARY REGULATORY APPROVALS IN CONNECTION THEREWITH (WITHOUT
PREJUDICE TO THE PARTIES’ OBLIGATIONS UNDER SECTION 9(C) BELOW).

 

  C.                                EACH PARTY HERETO SHALL, AND SHALL CAUSE ITS
AFFILIATES TO, USE ITS REASONABLE COMMERCIAL EFFORTS TO TAKE ALL ACTION
NECESSARY OR APPROPRIATE TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS
SECTION 9, INCLUDING ACKNOWLEDGING, EXECUTING AND/OR DELIVERING, IN A TIMELY
MANNER AND IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE OTHER PARTY, ANY
INSTRUMENTS OF TRANSFER AND ALL OTHER DOCUMENTS, INSTRUMENTS OR ASSURANCES AS
MAY REASONABLY BE REQUESTED BY

 

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THE OTHER PARTY AND MAKING ANY FILINGS WITH ANY GOVERNMENTAL AUTHORITY
NECESSARY, APPROPRIATE OR REASONABLY REQUESTED BY THE OTHER PARTY TO ENABLE SUCH
OTHER PARTY TO SATISFY ITS OBLIGATIONS OR TO OBTAIN THE BENEFITS OF THE
TRANSACTIONS CONTEMPLATED BY THIS SECTION 9.

 

10.                                 Confidentiality and Use.  A Party shall not
disclose to any person or issue any press release or otherwise publish any
Confidential Information of the other Party by any means or in any form other
than any disclosure expressly permitted by this Agreement.  A Party shall not
use any Confidential Information of the other Party for any purpose, including
taking measures that would avoid creating a premature bar to a US or foreign
patent application or any other use detrimental to the other Party, other than
any use that is expressly permitted by this Agreement or any use that is
necessary for the recipient Party to perform its obligations under this
Agreement.  Each Party shall employ the same reasonable safeguards in receiving,
storing, transmitting, and using proprietary confidential information that
prudent organizations normally exercise with respect to their own property of
significant value.  A Party may disclose Confidential Information to (a) its
Affiliates and its and their respective directors, officers, employees and
professional advisers (“Representatives”) solely on a need to know basis in
connection with the purposes of this Agreement or the Reseller Agreement,
provided that each such Representative agrees to be bound by the terms of this
Section or (b) the other Party or such other Party’s Representatives.  A Party
shall be liable for any breach of this Section by any of its Representatives. 
If a Party or any of its Representatives is required by law or regulation or
otherwise becomes legally compelled (by deposition, interrogatory, request for
information or documents, subpoena, civil investigative demand, governmental
agency action or similar process) to disclose any Confidential Information of
the other Party to a person not otherwise permitted to receive such Confidential
Information, then, any disclosure pursuant thereto shall not breach this
Agreement if it complies with the provisions in the next two sentences. To the
extent legally permissible, such Party and/or such of its Representatives, as
the case may be, shall provide such other Party with prompt written notice of
such legal requirement or compulsion and shall cooperate with such other Party
in seeking a protective order or other appropriate remedy.  If such protective
order or other remedy is not obtained or reasonably obtainable, or if such other
Party waives compliance with the provisions hereof, then the legally compelled
Party or Representative, as the case may be, (i) may disclose to the person
compelling disclosure only that portion of such Confidential Information that
such Party or Representative is advised by opinion of its legal counsel is
legally required to be disclosed and (ii) shall exercise its reasonable
commercial efforts to ensure that such Confidential Information so disclosed
will be accorded confidential treatment.  A Party may disclose Confidential
Information it determines is necessary or appropriate to disclose in any legal
proceeding to enforce its rights against the other Party or defend any claim by
the other Party arising under this Agreement; provided such Party exercises its
reasonable commercial efforts to ensure that such Confidential Information so
disclosed will be accorded confidential treatment. Upon the occurrence of a
Change in Control, without limiting Vital Images’ other obligations herein,
Toshiba shall have the right to request that Vital Images implement, and upon
such request Vital Images shall implement promptly, such additional reasonable
policies and procedures designed to protect Toshiba’s Confidential Information
and any technical information related to

 

16

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Toshiba Foreground Rights and Toshiba Background Rights from disclosure to a
Toshiba Competitor or its Representatives in a manner reasonably satisfactory to
Toshiba.

 

11.                                 Miscellaneous.

 

  A.                                INDEMNIFICATION OF TOSHIBA.  SUBJECT TO
ARTICLE 8(E), VITAL IMAGES HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD TOSHIBA
AND ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
AND REPRESENTATIVES (COLLECTIVELY, THE “TOSHIBA INDEMNIFIED PARTIES” AND,
INDIVIDUALLY, A “TOSHIBA INDEMNIFIED PARTY”) HARMLESS FROM AND AGAINST ANY AND
ALL DAMAGES, LIABILITIES, LOSSES, CLAIMS, JUDGMENTS, FINES, PENALTIES, COSTS AND
EXPENSES, INCLUDING REASONABLE ATTORNEYS FEES (“LOSSES”) SUSTAINED OR SUFFERED
BY ANY SUCH TOSHIBA INDEMNIFIED PARTY AS A RESULT OF ANY BREACH OF ANY
REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT MADE BY VITAL IMAGES IN THIS
AGREEMENT.  VITAL IMAGES SHALL BE GIVEN WRITTEN NOTICE OF ANY THIRD PARTY SUIT,
CLAIM OR OTHER LEGAL ACTION FOR WHICH VITAL IMAGES MAY HAVE INDEMNIFICATION
LIABILITY HEREUNDER (“VITAL IMAGES 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 11(A), EXCEPT TO THE EXTENT TOSHIBA’S FAILURE TO SO NOTIFY VITAL IMAGES
MATERIALLY PREJUDICES VITAL IMAGES’ ABILITY TO OR MATERIALLY INCREASES VITAL
IMAGES’ COSTS TO DEFEND AGAINST SUCH VITAL IMAGES LEGAL ACTION.  VITAL IMAGES
SHALL HAVE SOLE AND EXCLUSIVE CONTROL OF THE DEFENSE OF ANY VITAL IMAGES LEGAL
ACTION, INCLUDING THE CHOICE AND DIRECTION OF ANY LEGAL COUNSEL.  TOSHIBA MAY
NOT SETTLE OR COMPROMISE ANY VITAL IMAGES LEGAL ACTION WITHOUT THE WRITTEN
CONSENT OF VITAL IMAGES UNLESS SUCH SETTLEMENT OR COMPROMISE CONTAINS AN
UNCONDITIONAL RELEASE OF VITAL IMAGES FROM ANY INDEMNIFICATION LIABILITY
HEREUNDER.  TOSHIBA SHALL PROVIDE ALL REASONABLY REQUESTED ASSISTANCE TO VITAL
IMAGES, AT VITAL IMAGES’ EXPENSE.

 

  B.                               INDEMNIFICATION OF VITAL IMAGES.  SUBJECT TO
ARTICLE 8(E), TOSHIBA HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD VITAL IMAGES
AND ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
AND REPRESENTATIVES (COLLECTIVELY, THE “VITAL IMAGES INDEMNIFIED PARTIES” AND,
INDIVIDUALLY, A “VITAL IMAGES INDEMNIFIED PARTY”) HARMLESS FROM AND AGAINST ANY
AND ALL LOSSES SUSTAINED OR SUFFERED BY ANY SUCH VITAL IMAGES INDEMNIFIED PARTY
AS A RESULT OF ANY BREACH OF ANY REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT
MADE BY TOSHIBA IN THIS AGREEMENT.  TOSHIBA SHALL BE GIVEN WRITTEN NOTICE OF ANY
THIRD PARTY SUIT, CLAIM OR OTHER LEGAL ACTION FOR WHICH TOSHIBA MAY HAVE
INDEMNIFICATION LIABILITY HEREUNDER (“TOSHIBA LEGAL ACTION”) WITHIN THIRTY (30)
DAYS OF VITAL IMAGES’ FIRST KNOWLEDGE THEREOF, PROVIDED, THAT, THE FAILURE OF
VITAL IMAGES TO NOTIFY TOSHIBA OF ANY SUCH MATTER WITHIN THE THIRTY (30) DAY
PERIOD SHALL NOT RELEASE TOSHIBA, IN WHOLE OR IN PART, FROM ITS OBLIGATIONS
UNDER THIS SECTION 11(B), EXCEPT TO THE EXTENT VITAL IMAGES’ FAILURE TO SO
NOTIFY TOSHIBA MATERIALLY PREJUDICES TOSHIBA’S ABILITY TO OR MATERIALLY
INCREASES TOSHIBA’S COSTS TO DEFEND AGAINST SUCH TOSHIBA LEGAL ACTION.  TOSHIBA
SHALL HAVE SOLE AND EXCLUSIVE CONTROL OF THE DEFENSE OF ANY TOSHIBA LEGAL
ACTION,

 

17

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INCLUDING THE CHOICE AND DIRECTION OF ANY LEGAL COUNSEL.  VITAL IMAGES MAY NOT
SETTLE OR COMPROMISE ANY TOSHIBA LEGAL ACTION WITHOUT THE WRITTEN CONSENT OF
TOSHIBA UNLESS SUCH SETTLEMENT OR COMPROMISE CONTAINS AN UNCONDITIONAL RELEASE
OF TOSHIBA FROM ANY INDEMNIFICATION LIABILITY HEREUNDER.  VITAL IMAGES SHALL
PROVIDE ALL REASONABLY REQUESTED ASSISTANCE TO TOSHIBA, AT TOSHIBA’S EXPENSE.

 

  C.                                NO IMPLIED WAIVERS, RIGHTS CUMULATIVE.  NO
FAILURE OR DELAY ON THE PART OF EITHER PARTY IN EXERCISING ANY RIGHT, POWER,
REMEDY OR PRIVILEGE UNDER THIS AGREEMENT OR PROVIDED BY STATUTE OR AT LAW OR IN
EQUITY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, THE RIGHT OR POWER TO
TERMINATE THIS AGREEMENT, SHALL IMPAIR, PREJUDICE OR CONSTITUTE A WAIVER OF ANY
SUCH RIGHT, POWER, REMEDY OR PRIVILEGE OR BE CONSTRUED AS A WAIVER OF ANY BREACH
OF THIS AGREEMENT OR AS AN ACQUIESCENCE THEREIN, NOR SHALL ANY SINGLE OR PARTIAL
EXERCISE OF ANY SUCH RIGHT, POWER REMEDY OR PRIVILEGE PRECLUDE ANY OTHER OR
FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER RIGHT, POWER, REMEDY OR
PRIVILEGE.

 

  D.                               RELATIONSHIP OF THE PARTIES.  NOTHING
CONTAINED IN THIS AGREEMENT IS INTENDED OR IS TO BE CONSTRUED TO MAKE THE
PARTIES PARTNERS, PRINCIPAL-AGENT, OR JOINT VENTURERS.  EXCEPT AS EXPRESSLY
PROVIDED HEREIN, NEITHER PARTY HERETO SHALL HAVE ANY EXPRESS OR IMPLIED RIGHT OR
AUTHORITY TO ASSUME OR CREATE ANY OBLIGATIONS ON BEHALF OF OR IN THE NAME OF THE
OTHER PARTY OR TO BIND THE OTHER PARTY TO ANY CONTRACT, AGREEMENT OR UNDERTAKING
WITH ANY THIRD PARTY.  EACH PARTY IS AN INDEPENDENT CONTRACTOR TO THE OTHER
PARTY.  EACH PARTY SHALL BE RESPONSIBLE FOR ITS OWN TAXES.

 

  E.                                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.

 

  F.                                  SUCCESSORS AND ASSIGNS; BINDING EFFECT. 
THE TERMS AND PROVISIONS OF THIS AGREEMENT SHALL INURE TO THE BENEFIT OF, AND BE
BINDING UPON EACH PARTY AND THEIR RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS. 
THE TERMS OF THIS AGREEMENT ARE INTENDED SOLELY FOR THE BENEFIT OF THE PARTIES
HERETO AND, EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 11(F), ARE NOT INTENDED
TO CONFER UPON ANY THIRD PARTY THE STATUS OF A THIRD PARTY BENEFICIARY.  THE
TOSHIBA INDEMNIFIED PARTIES AND THE VITAL IMAGES INDEMNIFIED PARTIES ARE THIRD
PARTY BENEFICIARIES OF THE PROVISIONS OF SECTION 11(A) AND SECTION 11(B),
RESPECTIVELY.  TOSHIBA AND VITAL IMAGES MAY AMEND, RESTATE, SUPPLEMENT, EXTEND,
RENEW OR OTHERWISE MODIFY, OR CANCEL OR TERMINATE, ALL OR ANY PART OF THIS
AGREEMENT AND EITHER OF THEM MAY WAIVE ANY PROVISION OF THIS AGREEMENT, WITHOUT
THE CONSENT OF ANY THIRD PARTY.

 

18

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  G.                               ASSIGNMENT.  VITAL IMAGES MAY ASSIGN ALL (BUT
NOT LESS THAN ALL) OF ITS RIGHTS, INTERESTS AND OBLIGATIONS HEREUNDER TO A THIRD
PARTY IN CONNECTION WITH A CHANGE IN CONTROL; PROVIDED THAT SUCH ASSIGNMENT
SHALL NOT AFFECT TOSHIBA’S RIGHTS TO TERMINATE THIS AGREEMENT PURSUANT TO
SECTION 6(C). NOR SHALL SUCH ASSIGNMENT AFFECT TOSHIBA’S RIGHTS UNDER
SECTION 9.  EXCEPT AS PROVIDED IN THE FOREGOING SENTENCE, NEITHER PARTY MAY
ASSIGN OR OTHERWISE TRANSFER ANY OF ITS RESPECTIVE RIGHTS AND INTERESTS, NOR
DELEGATE ANY OF ITS OBLIGATIONS, HEREUNDER, WITHOUT THE PRIOR WRITTEN CONSENT OF
THE OTHER PARTY IN ITS SOLE DISCRETION, PROVIDED THAT SUCH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD IF THE PROPOSED ASSIGNMENT IS AN AFFILIATE OF THE
ASSIGNING PARTY.  EACH PARTY MAY SUBLICENSE ITS LICENSED RIGHTS HEREUNDER TO ITS
VENDORS, SUPPLIERS AND DEVELOPMENT PARTNERS IN CONNECTION WITH SUCH PARTY’S
AUTHORIZED ACTIVITIES IN ITS FIELD OF USE, SOLELY FOR USE IN ACCORDANCE WITH THE
PURPOSE OF THIS AGREEMENT BUT NOT FOR ANY UNRELATED USE BY ANY SUCH PARTY,
SUBJECT HOWEVER, IN THE CASE OF VITAL IMAGES, TO THE PROVISIONS OF
SECTION 2(E).  FOR CLARITY, NOTHING IN THIS AGREEMENT SHALL PREVENT VITAL IMAGES
(SUBJECT TO THE PROVISIONS OF SECTION 2(E)) FROM SELLING PROJECT SOFTWARE AND/OR
ITS OTHER PRODUCTS FOR WHICH THE INTELLECTUAL PROPERTY LICENSED TO VITAL IMAGES
HEREUNDER IS USED TO ITS DISTRIBUTORS, RESELLERS, CUSTOMERS AND END USERS, AND
FROM LICENSING END USERS TO USE SUCH PROJECT SOFTWARE AND/OR ITS OTHER PRODUCTS
FOR WHICH THE INTELLECTUAL PROPERTY LICENSED TO VITAL IMAGES HEREUNDER IS USED,
NOR SHALL ANYTHING IN THIS AGREEMENT PREVENT TOSHIBA (SUBJECT TO THE PROVISIONS
OF THE RESELLER AGREEMENT) FROM SELLING PROJECT SOFTWARE AND/OR ITS OTHER
PRODUCTS FOR WHICH THE INTELLECTUAL PROPERTY LICENSED TO TOSHIBA HEREUNDER IS
USED TO ITS DISTRIBUTORS, RESELLERS, CUSTOMERS AND END USERS, AND FROM LICENSING
END USERS TO USE SUCH PROJECT SOFTWARE AND/OR ITS OTHER PRODUCTS FOR WHICH THE
INTELLECTUAL PROPERTY LICENSED TO TOSHIBA HEREUNDER IS USED.  ALSO FOR CLARITY,
IN THE EVENT OF AN ASSIGNMENT, THE LICENSES IN SECTION 8 SHALL NOT INCLUDE ANY
INTELLECTUAL PROPERTY OF THE ACQUIRER OF ANY PARTY HERETO.

 

  H.                               AMENDMENTS.  NO AMENDMENT, MODIFICATION,
WAIVER, TERMINATION OR DISCHARGE OF ANY PROVISION OF THIS AGREEMENT, NOR CONSENT
BY EITHER PARTY TO ANY DEPARTURE THEREFROM, SHALL IN ANY EVENT BE EFFECTIVE
UNLESS THE SAME SHALL BE IN WRITING SPECIFICALLY IDENTIFYING THIS AGREEMENT AND
THE PROVISION INTENDED TO BE AMENDED, MODIFIED, WAIVED, TERMINATED OR DISCHARGED
AND SIGNED BY THE PARTIES, AND EACH AMENDMENT, MODIFICATION, WAIVER, TERMINATION
OR DISCHARGE SHALL BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCE AND FOR THE
SPECIFIC PURPOSE FOR WHICH GIVEN.  NO PROVISION OF THIS AGREEMENT SHALL BE
VARIED, CONTRADICTED OR EXPLAINED BY ANY OTHER AGREEMENT, COURSE OF DEALING OR
PERFORMANCE OR ANY OTHER MATTER NOT SET FORTH IN AN AGREEMENT IN WRITING AND
SIGNED BY THE PARTIES.

 

  I.                                   ARBITRATION AND GOVERNING LAW.  THIS
AGREEMENT SHALL BE SUBJECT TO THE DISPUTE RESOLUTIONS SET FORTH IN ARTICLE 17 OF
THE RESELLER AGREEMENT AND THE CHOICE OF LAW PROVISIONS SET FORTH IN
SECTION 18.7 OF THE RESELLER AGREEMENT.

 

  J.                                   SEVERABILITY.  IF ANY PROVISION HEREOF
SHOULD BE HELD INVALID, ILLEGAL OR UNENFORCEABLE IN ANY RESPECT IN ANY
JURISDICTION, THEN, TO THE FULLEST EXTENT PERMITTED BY LAW, (A) ALL OTHER
PROVISIONS HEREOF SHALL REMAIN IN FULL FORCE AND

 

19

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EFFECT IN SUCH JURISDICTION AND SHALL BE LIBERALLY CONSTRUED IN ORDER TO CARRY
OUT THE INTENTIONS OF THE PARTIES HERETO AS NEARLY AS MAY BE POSSIBLE AND
(B) SUCH INVALIDITY, ILLEGALITY OR UNENFORCEABILITY SHALL NOT AFFECT THE
VALIDITY, LEGALITY OR ENFORCEABILITY OF SUCH PROVISION IN ANY OTHER
JURISDICTION.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY
WAIVES ANY PROVISION OF LAW THAT WOULD RENDER ANY PROVISION HEREOF PROHIBITED OR
UNENFORCEABLE IN ANY RESPECT.

 

  K.                                ENTIRE AGREEMENT.  THIS AGREEMENT, TOGETHER
WITH THE APPLICABLE PROVISIONS OF ANY AGREEMENTS OR OTHER DOCUMENTS EXPRESSLY
REFERENCED HEREIN, CONSTITUTES, ON AND AS OF THE EFFECTIVE DATE, THE ENTIRE
AGREEMENT OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND ALL
PRIOR OR CONTEMPORANEOUS UNDERSTANDINGS OR AGREEMENTS, WHETHER WRITTEN OR ORAL,
BETWEEN THE PARTIES WITH RESPECT TO SUCH SUBJECT MATTER ARE HEREBY SUPERSEDED IN
THEIR ENTIRETY.  TOSHIBA AND VITAL IMAGES HEREBY ACKNOWLEDGE THAT NEITHER PARTY
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY ANY REPRESENTATIONS OR
STATEMENTS, ORAL OR WRITTEN, NOT EXPRESSLY CONTAINED HEREIN.  THIS AGREEMENT
SHALL NOT BE DEEMED TO AMEND OR MODIFY ANY PROVISIONS IN THE RESELLER AGREEMENT.

 

  L.                                   SECTION HEADINGS.  THE SECTION HEADINGS
IN THIS AGREEMENT ARE FOR CONVENIENCE ONLY AND IN NO WAY DEFINE, LIMIT, EXTEND
OR INTERPRET THE SCOPE OF THIS AGREEMENT OR OF ANY PARTICULAR SECTION HEREOF.

 

  M.                             CONSTRUCTION.  THIS AGREEMENT HAS BEEN REVIEWED
AND APPROVED BY EACH OF THE PARTIES.  IN THE EVENT THAT IT SHOULD BE DETERMINED
THAT ANY PROVISION OF THIS AGREEMENT IS UNCERTAIN OR AMBIGUOUS, THE LANGUAGE IN
ALL PARTS OF THIS AGREEMENT SHALL BE IN ALL CASES CONSTRUED AS A WHOLE ACCORDING
TO ITS FAIR MEANING AND NOT STRICTLY CONSTRUED FOR NOR AGAINST ANY PARTY AND
WITHOUT REGARD TO WHICH PARTY MAY HAVE DRAFTED THE LANGUAGE.

 

  N.                               COMPLIANCE WITH LAWS.  EACH PARTY AGREES TO
COMPLY WITH THE JAPANESE FOREIGN EXCHANGE AND FOREIGN TRADE LAWS, THE U.S.
EXPORT ADMINISTRATION REGULATIONS AND ANY OTHER APPLICABLE EXPORT LAWS AND
REGULATIONS, AND NEITHER PARTY SHALL, DIRECTLY OR INDIRECTLY, EXPORT OR
RE-EXPORT ANY TECHNICAL INFORMATION OR DATA, INCLUDING PRODUCTS OR THE
DERIVATIVES OF PRODUCTS, TO ANY DESTINATION OR COUNTRY RESTRICTED OR PROHIBITED
BY SUCH LAWS AND/OR REGULATIONS, UNLESS PROPERLY AUTHORIZED BY THE APPROPRIATE
GOVERNMENTAL AUTHORITIES.

 

  O.                               COUNTERPART ORIGINALS.  THIS AGREEMENT MAY BE
SIGNED IN COUNTERPARTS, AND EACH COUNTERPART SHALL BE DEEMED TO BE AN ORIGINAL.

 

  P.                               BANKRUPTCY.  THE PARTIES INTEND AND AGREE
THAT THE LICENSES HEREIN SHALL BE CONSIDERED LICENSES TO “INTELLECTUAL PROPERTY”
PURSUANT TO SECTION 101 OF THE U.S. BANKRUPTCY CODE, AND THAT IN THE EVENT A
PARTY HEREUNDER ENTERS INTO BANKRUPTCY, THE OTHER PARTY SHALL BE ENTITLED TO
EXERCISE ITS RIGHTS UNDER SECTION 365(N) OF THE U.S. BANKRUPTCY CODE TO THE
FULLEST EXTENT PERMITTED THEREIN.

 

20

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[Development Agreement Signature Page]

 

IN WITNESS WHEREOF, Toshiba and Vital Images have caused this Agreement to be
executed by their duly authorized representatives.

 

Vital Images, Inc.

 

Toshiba Medical Systems Corporation

 

 

 

 

 

 

By:

/s/Michael H. Carrel

 

By:

/s/Yasuo Nobuta

Name and Title: Michael H. Carrel, President

 

Name & Title: Yasuo Nobuta, General

and CEO

 

Manager of CT Systems

 

21

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EXHIBIT A

 

Toshiba Funding

 

Toshiba Funding shall be provided at the rate of * * * per man-year (* * * per
man-month) for the period commencing on the Effective Date and termination on
December 31, 2009 (as may be extended in accordance with Section 6(a)).  If the
Parties agree to re new the term of this Agreement for an additional year, the
Parties will adjust the man-year rate for the following year to ensure that
funding takes into account inflation and employment market conditions; provided,
however, that such rate may increase no more than * * * (* * *) each year.

 

Unless otherwise stated in a Product Development Plan, the Parties will agree
upon the total Toshiba Funding required for each Product Development Plan and
Toshiba will pay the amount of such agreed Toshiba Funding with respect to each
Product Development Plan as follows:

 

* * *% Within * * *

* * *% Within * * *

* * *% Within * * *

[Vital Images issues invoice to Toshiba each time]

 

If the scope of any project changes from the originally-agreed upon Product
Development Plan and additional Vital Images resources are required, the Parties
will negotiate in good faith to agree on (i) an amendment to such Product
Development Plan to reflect such project changes and (ii) an amendment to this
Exhibit A to reflect the amount and timing of payment for such additional
resources.  Neither Party shall have any obligation under this Agreement in
respect of the project change or additional resources unless and until such
amendments are agreed and executed by the Parties.  Unutilized resources during
the Silent Period will be billed monthly and payable net 30 days from the
invoice date.

 

* * * Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission.

 

22

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EXHIBIT B

PRODUCT DEVELOPMENT PLAN
VITAL IMAGES, INC. & TOSHIBA MEDICAL SYSTEMS CORPORATION

 

* * *

 

(* * *)

Document Control History

 

Rev

 

Date

 

Author(s)

 

Description of Change

 

ECO No.

A

 

* * *

 

* * *

 

Initial Release

 

 

 

* * * Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission.

 

23

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1.0  PROJECT PURPOSE

 

The purpose of this project is to deliver * * *and enhance the features * *
*application on the * * *software platform * * *. This would incorporate
feedback from Toshiba’s * * *process and directly from * * *, and improve the
quality of * * *.  The project would comprise * * * in * * *for the * * *, a * *
* by * * * and * * * by * * * for the * * *.

 

2.0  GOALS AND OBJECTIVES

 

The following chart contains the goals and objectives for this project.

 

Goals

Release * * * by * * *

Provide * * *Software by * * *

Release * * * by * * *

 

3.0  PROJECT OVERVIEW & KEY FEATURE DEFINITION

 

The scope of the * * *will include the software development and testing of the
features described below.  The detailed feature specifications will be described
in the Product Definition Statement (PDS) and will be delivered and iterated
upon during the Requirements Phase.

 

* * *

 

* * *

 

·                  * * * to * * *results (* * *) — also * * *as * * *software
update

·                  Combination of * * * into * * *

·                  Display * * * in * * *view

·                  Shortcut for creating * * * with * * *

·                  * * *for * * *

·                  * * * in * * *protocol

·                  Apply * * *during * * *

·                  Show the * * *of the * * *so it can be * * *to the * * * in *
* *in * * *and on * * *

 

Other Quality and Performance Enhancements

 

·                  * * *improvements for * * *

·                  * * * tools (ability to * * *at any time, * * *)

 

* * * Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission.

 

24

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* * *

 

* * *Phase I

 

·                  Ability to * * *and/or * * * (support * * *)

·                  * * * with * * *tools

·                  * * *of * * * (* * *)

·                  * * *layouts for * * *using * * *, along with * * *

·                  * * *on * * *

·                  * * *, including * * *

·                  * * *

 

* * *

 

* * *Phase II

 

·                  * * *and * * *in * * *

·                  * * *

·                  * * *based on feedback from users

 

* * *

 

·                  * * *view of * * *

·                  General * * *enhancements

 

4.0  PROJECT ORGANIZATION

 

Project Management

Both Toshiba and Vital Images have assigned a Project Manager to coordinate all
aspects of the project.  The project teams will communicate as appropriate via
Video or Telephone conference on a weekly basis.  Listed below are the 2 project
managers assigned to this project.

 

Roles

 

Company

 

Team Member

Project Manager

 

Vital Images

 

* * *

Project Manager

 

Toshiba

 

* * *

 

 

Product Development Team & Responsibilities

A key component of the development activities requires gaining feedback from key
Clinical collaborators.  Below is a table that describes the primary Vital
Images interface to these clinical collaborators.  It is essential that the
Vital and Toshiba interfaces keep in regular contact.

 

Site

 

Collaboration Activity

 

Vital Contact

 

Toshiba Contact

 

Collaborator Contact

* * *

 

* * *

 

* * *

 

* * *

 

* * *

 

Other members of the project development team including their
roles/responsibilities are:

 

* * * Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission.

 

25

--------------------------------------------------------------------------------

 

Roles

 

Company

 

Team Member

* * *

 

Vital Images

 

* * *

* * *

 

Vital Images

 

* * *

* * *

 

Vital Images

 

* * *

* * *

 

Vital Images

 

* * *

* * *

 

Vital Images

 

* * *

* * *

 

Vital Images

 

* * *

* * *

 

Vital Images

 

* * *

 

Toshiba will assign the following resources to the * * *project.

1 * * *

1 * * *

1 * * *

 

5.0  PROJECT PLAN & SCHEDULE

 

BELOW IS AN OVERVIEW OF THE SCHEDULE AND THE KEY MILESTONES AND DELIVERABLES FOR
THE * * * PROJECT:

 

Events

 

Estimated Date

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

 

BELOW IS AN OVERVIEW OF THE SCHEDULE AND THE KEY MILESTONES AND DELIVERABLES FOR
THE * * *PROJECT:

 

Events

 

Estimated Date

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

 

* * * Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission.

 

26

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* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

* * *

 

* * *

 

6.0  EVOLUTION/ITERATION OF PRODUCT DEVELOPMENT PLAN

At least once per month, the items described in this Product Development Plan
will be reviewed by the Project Managers and will be updated appropriately.  Any
significant changes will be communicated to both parties and this document will
be revised.  In revisions will follow Vital Images Change Control Process and
will require signature by both parties.

 

7.0  TOSHIBA * * *

Based on the above milestones, the * * *from Toshiba for this Product
Development Plan is agreed upon * * *of which * * * for development activities
completed in 2008 (* * *man months) and * * *for development activities in 2009
(* * *man months).  These amounts are based on * * *for the duration of the
project.

 

The * * *period of the * * *in this Product Development Plan is when the * * *of
the * * *.

 

8.0  Miscellaneous

 

Notwithstanding any provisions of this Agreement, either party shall not
disclose any Confidential Information to the other party in connection with the
Product Development Plan set forth in this Exhibit B. In the event that the
disclosure to the other party of one party’s Confidential Information is
indispensable for performing the Product Development Plan, the disclosing party
shall provide, on non-confidential basis, the summary of such Confidential
Information and obtain the written consent of the receiving party prior to the
disclosure of such Confidential Information to the receiving party.

 

* * * Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission.

 

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