Exhibit 10.25


 


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AMENDED AND RESTATED COLLABORATION AND SERVICES
AGREEMENT


 


THIS AMENDED
AND RESTATED COLLABORATION AND SERVICES AGREEMENT (“Agreement”) is effective as
of June 26, 2007 (the “Effective Date”) by and between Mednet Healthcare
Technologies, Inc., a New Jersey corporation (“Mednet”), with an address
at 275 Phillips Boulevard, Ewing, New Jersey 08618 and Transoma Medical, Inc.,
a Delaware corporation (“Transoma”), with an address at 4211 Lexington Avenue
North, Suite 2244, St. Paul, Minnesota 55126-6164, (hereinafter sometimes
individually or collectively referred to as a “Party” or the “Parties,”
respectively).


 


RECITALS


 


A.                                   Mednet has expertise in remote cardiac monitoring services.


 


B.                                     Transoma is engaged in the design, development and manufacture of
products to monitor and collect physiological data from animals and humans.


 


C.                                     The Parties entered into that certain Collaboration and Services
Agreement dated February 27, 2006 (the “Original Agreement”).


 


D.                                    The Parties desire to amend and restate the Original Agreement in
its entirety to provide for additional development and post-commercialization
services a provided herein.


 


NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual
representations, warranties, covenants and agreements contained herein, the
Parties hereto agree as follows:


 


ARTICLE 1


DEFINITIONS


 


1.1.                              Affiliates shall mean, with respect to
either Party, those entities controlled by, in control of, or under common
control with such person.  For the
purposes of this definition, “control” by ownership of securities means
ownership or control, direct or indirect, of more than fifty percent (50%) of
the voting capital or equity participation of an entity.


 


1.2.                              [******].


 


1.3.                              Black Box Component shall mean a
compiled software program that can only be accessed through an exposed
application programming interface (API). 
Each Black Box Component should be compatible with Microsoft Windows
2000, XP and Windows Vista operating systems and Microsoft Internet Explorer
Web Browser.


 


1.4.                              Black Box Component Deliverables shall
mean the deliverables required for the Black Box Components of the Complete
System, consisting of one or several binary program modules such as ActiveX
controls, Dynamic Link Libraries (DLL) and the Executable (EXE) files.  The development material include within the
Black Box Component


 

















 


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Deliverables should be limited to
application programming interface and deployment documentation.


 


1.5.                              CMS shall mean the Centers for
Medicaid and Medicare Services, a division of the U.S. Department of Health and
Human Services.


 


1.6.                              Commercialization Date shall mean the
date of the first sale of the Product in the United States following approval
of the Product by the FDA.


 


1.7.                              Commercialization Statement of Work
shall mean the description of activities for the period commencing on the
Commercialization Date and the obligations of each Party in the completion of
such activities, including but not limited to descriptions of deliverables,
timelines and respective responsibilities. 
The initial Commercialization Statement of Work is set forth in Exhibit B.


 


1.8.                              Complete System shall mean the
aggregate of a complete set of all of the software and all of the deliverables
developed pursuant to this Agreement (including any Statement of Work), and
which includes all of the software, Development Materials or Black Box
Component Deliverables (as applicable), user documentation and other ancillary
materials created as part of the deliverables under Exhibit A-1.  Both Parties understand that the Mednet Back
Office System based on the Cardiostation platform is not included in the “Complete
System.”


 


1.9.                              Confidential Information is defined in
Section 8.1.


 


1.10                           [******].


 


1.11.                        Development Documentation shall mean
all architectural diagrams, functional specifications, detailed design
specifications, and test cycle documentation relating to the software to be
used by a third-party programmer in possession of the source code with the
proper skill set and with the appropriate level of training to maintain,
support or enhance the Complete System.


 


1.12.                        Development Materials shall mean (a) the
source code for the software and any version of the Complete System, together
with all Development Documentation related or pertaining to the software and
the Complete System that is or comes to be in the possession of or under the
control of Mednet or any of its Affiliates; (b) a reasonably detailed
description of all material problems, workarounds and root cause analyses
related to the Complete System to the extent such information has been
documented in the Development Documentation or the user documentation; (c) a
reasonably detailed description of all third-party software (and all
significant enhancements, modifications or customizations thereto) used from
time to time in the operation and maintenance of the Complete System; and (d) a
reasonably detailed description of the hardware requirements and configurations
for the operation and maintenance of the Complete System as provided
hereunder.  Without limiting the
foregoing, insofar as the “development


 


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environment”
employed by Mednet or its Affiliates for the development, maintenance and
implementation of the Complete System includes any device, software or
documentation not commercially available to Transoma on commercially reasonable
terms through readily known sources other than Mednet, the Development
Materials shall include all such devices, software or documentation.  The foregoing reference to such “development
environment” is intended to apply to any programs, including compilers, “work-benches”
tools, and higher-level (or “proprietary”) languages, used by Mednet for the
development, maintenance, and implementation of the Complete System.


 


1.13.                        Development Period shall mean the
period of time commencing on the Effective Date and ending on the later of (a) the
Commercialization Date or (b) acceptance by Transoma of all deliverables
under the Addendum to Commercialization Statement of Work contained in Exhibit A-1,
attached hereto.


 


1.14.                        Development Statement of Work shall
mean the description of development activities during the Development Period
and the obligations of each Party in the completion of such activities,
including but not limited to development objectives, milestones, descriptions
of deliverables, timelines, and respective responsibilities.  The initial Development Statement of Work is
set forth in Exhibit A.


 


1.15.                        Disclosing Party is defined in Section 8.1.


 


1.16.                        ECG Editing Tools is defined in the
Addendum to the Development Statement of Work.


 


1.17                           FDA shall mean the U.S. Food and Drug
Administration.


 


1.18.                        Granting Party is defined in Section 4.3.


 


1.19.                        HIPAA is defined in Section 2.4(b).


 


1.20.                        Inventions shall mean processes,
machines, compositions of matter, improvements, inventions (whether or not
protectable under patent laws), works of authorship, information fixed in any
tangible medium of expression (whether or not protectable under copyright
laws), mask works, trademarks, trade names, trade dress, trade secrets,
know-how, ideas (whether or not protectable under trade secret laws), and all
other subject matter protectable under patent, copyright, moral right, mask
work, trademark, trade secret or other laws, and includes without limitation
all new or useful art, combinations, discoveries, formulae, manufacturing
techniques, technical developments, discoveries, artwork, software, methods,
algorithms, concepts, applications, circuits, devices, user interfaces, and
designs.


 


1.21.                        Joint Inventions shall mean any
invention, discovery or idea, whether or not patentable, conceived or developed
jointly by both Parties, their employees, agents or consultants in the course
of performing work under this Agreement.


 


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1.22.                        Mednet Inventions shall mean any
invention (excluding Joint Inventions), whether or not patentable, conceived or
developed by employees of MedNet, in the course of performing work under this
Agreement.


 


1.23.                        Product(s) shall mean Transoma’s
Sleuth line of implantable ECG Monitoring Systems including Sleuth and
subsequent derivative products.


 


1.24.                        Provider(s) shall mean the physician,
clinic or other healthcare provider involved with the implantation of the
Product into, and/or subsequent treatment of, a patient.


 


1.25.                        Receiving Party is defined in Section 8.1.


 


1.26.                        Requesting Party is defined in Section 4.3.


 


1.27.                        Statement of Work shall collectively
mean the Development Statement of Work and the Commercialization Statement of
Work, and any amendment or addenda thereto.


 


1.28.                        Term shall mean the term of this
Agreement, as described in Section 5.1.


 


1.29.                        Transoma Inventions shall mean any
invention (excluding Joint Inventions), whether or not patentable, conceived or
developed by employees or contractors of Transoma, in the course of performing
work under this Agreement (including any Statement of Work).  Except as provided in Section 4.2 below,
the Complete System, including the Development Materials, is deemed by the
Parties to be a Transoma Invention.


 


1.30.                        Transoma Physician Web Portal is
defined in the Addendum to the Development Statement of Work.


 


1.31.                        [******].


 


ARTICLE 2


SERVICES AND REPORTING


 


2.1.                              Development Period.  During the Development Period, Mednet and
Transoma shall perform such activities and provide such deliverables as are set
forth in the Development Statement of Work, attached hereto as Exhibit A.


 


2.2.                              Post-Commercialization.  Effective as of the Commercialization Date,
Mednet and Transoma shall perform such services and provide such deliverables
as are set forth in the Commercialization Statement of Work (collectively with
the Development Statement of Work, the “Statement of Work”).


 


2.3.                              Exclusivity.  In consideration of the Parties’
contributions to the development of certain portions of the Complete System, during
the Term of this Agreement, [******].


 


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2.4.                              Mednet Obligations.


 


(a)                                  Mednet shall use commercially reasonable efforts to perform its
obligations in accordance with the Statement of Work.


 


(b)                                 Mednet shall comply with all applicable laws and regulations
regarding its performance under the Statement of Work including complying with
all current governmental regulatory requirements, and with all other federal,
state and local laws and regulations as are applicable to the Statement of Work
(including but not limited to the Health Insurance Portability and
Accountability Act of 1996 and the regulations promulgated thereunder (“HIPAA”)).  Mednet qualifies as a “covered entity” as
that term is defined in HIPAA, and, as such, is subject to, and complies with,
HIPAA.  Mednet shall use and disclose,
and protect the integrity, confidentiality and availability of, individually
identifiable health information Mednet creates, receives, maintains or
transmits under this Agreement in accordance with HIPAA and the privacy and
security policies and procedures required to be implemented under HIPAA, as
summarized in its notice of privacy practices, entitled “Privacy Policy of
Mednet Healthcare Technologies, Inc.,” a copy of which has been provided
to Transoma.


 


(c)                                  Mednet shall notify Transoma immediately upon any changes in Mednet’s
monitoring procedures, including but not limited to changes in report forms,
enrollment forms and Provider notification protocols.


 


(d)                                 Mednet shall notify Transoma immediately upon becoming aware of any
“reportable event” (as defined in 21 C.F.R. § 803.3) with respect to the
services provided under this Agreement.


 


2.5.                              Transoma Obligations.


 


(a)                                  Transoma shall use commercially reasonable efforts to perform its
obligations in accordance with the Statement of Work.


 


(b)                                 Transoma shall comply with all applicable laws and regulations
regarding its performance under the Statement of Work including complying with
all current governmental regulatory requirements, and with all other federal,
state and local laws and regulations as are applicable to the Statement of Work.


 


2.6.                              Joint Obligations of Transoma and Mednet.  All disputes regarding
changes in scope of the services or deliverables shall first result in a
meeting of representatives of both Transoma and Mednet. If resolution is not
achieved, then the matter(s) shall be jointly addressed by the President of
Mednet and the Chief Executive Officer of Transoma. No legal remedies shall be
pursued without exercising these two steps. 
Notwithstanding the above, in the event of a breach or threatened breach
of Section 2.3 (Exclusivity) or Articles 4 (Intellectual Property) or 8
(Confidential Information) of this Agreement by a


 


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Party,
both Parties hereby consent to the specific enforcement of this Agreement by
the other Party through an injunction or restraining order issued by an
appropriate court.


 


2.7.                              Report Format.  All written data provided to a Provider or
patient shall bear the approved logos of both Mednet and Transoma, and are
subject to Transoma’s prior written approval. 
Any changes to the appearance, format or otherwise to such written data
must be approved in writing by an authorized marketing representative of
Transoma.


 


2.8.                              Marketing Materials.  All marketing materials or other published
material directly relating to the services contemplated by this Agreement shall
bear the approved logos of both Mednet and Transoma, and are subject to the
prior written approval of both Transoma and Mednet.


 


2.9.                              Ownership of Data and Reports.  All raw data collected by the Products and
all data prepared for or submitted to Transoma by Mednet under this Agreement
shall be promptly provided to Transoma, shall belong exclusively to Transoma
and shall be deemed to be “Works Made For Hire.” To the extent such works are
not deemed to be “Works Made For Hire,” Mednet hereby assigns all proprietary
rights in such data to Transoma. Transoma shall have no obligation to Mednet
with respect to the use or disposition of such data.  Transoma hereby grants Mednet the right to
access such data, whether or not deemed to be “Works Made for Hire,” solely for
the purpose of performing Mednet’s obligations hereunder and such right to
access shall terminate upon expiration or termination of this Agreement
(subject to any obligation of Mednet to provide post-termination services to
Transoma pursuant to Section 5.3(e)). In no event shall Mednet have any
right to use, transfer, sell or dispose of such data except as specifically
contemplated hereunder (including but not limited to Sections 2.4(b) and
8.6 of this Agreement).


 


2.10                           Changes to Statement of Work.  From time to time during the Development
Period, Transoma may, upon consultation with Mednet, reasonably change the
requirements under the Statement of Work. 
Any change to the Statement of Work reasonably involving a material
change to cost, compensation or scheduling provisions shall be made pursuant to
Section 10.9 (Amendment) below.  All
other changes may be made by Transoma upon written notice to Mednet.


 


ARTICLE 3


FEES AND PAYMENTS


 


3.1.                              Mednet Fees.  Mednet shall be responsible for invoicing and
receiving payment from providers or third-party payors, as applicable, as
compensation for the signal processing services provided hereunder.  The Parties assume that Medicare coverage
will be available for services billed by Mednet.  Transoma shall not be involved in billing or
payment in any manner.  Should CMS issue
a national non-coverage decision for the services so that Medicare may not be
billed in any manner for such service, then the fees described in Attachment 1
to the Addendum to the Commercialization Statement of Work


 


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shall
apply.  In such case, Medicare shall not
be involved in any manner and shall not be billed.


 


3.2.                              Transoma Fees.  Transoma shall be responsible for invoicing
and receiving payment from providers or third-party payors, as applicable, as
compensation for the Transoma products provided hereunder.


 


3.3.                              Development and Data Hosting Fees.  Transoma shall pay Mednet the Development and
Data Hosting Fees set forth in Exhibit A-1 and Exhibit B-1,
respectively.


 


ARTICLE 4

INTELLECTUAL PROPERTY


 


The Parties contemplate that Inventions may be
developed or conceived by either Party alone or by the Parties jointly in
furtherance of the development set forth in this Agreement and agree with
respect to such inventions as follows:


 


4.1.                              Ownership of Inventions; Grant of License.


 


(a)                                  Mednet Inventions shall be the sole and exclusive property of
Mednet.  Subject to the terms and
conditions of this Agreement, Mednet hereby grants to Transoma (including its
employees and subcontractors in the course of performing activities
contemplated by this Agreement) a non-exclusive, world-wide, royalty-free
license to use Mednet Inventions in conjunction with the Complete System.  The license granted in the previous sentence
shall survive the termination of this Agreement for so long as Mednet provides
post-termination services to Transoma pursuant to Section 5.3(d) below.


 


(b)                                 Transoma Inventions shall be the sole and exclusive property of
Transoma.  Subject to the terms and
conditions of this Agreement, Transoma hereby grants to Mednet a non-exclusive,
world-wide, royalty-free license to use Transoma Inventions solely for the
purpose of fulfilling Mednet’s obligations under this Agreement.  The Parties agree that the Transoma Physician
Web Portal is a “Transoma Invention” for purposes of this Agreement.


 


4.2.                              Ownership of Joint Inventions.


 


(a)                                  Joint Inventions shall be owned jointly by the Parties and, except
as provided herein, neither Party has any obligation to the other with respect
to the use or disposition of such Joint Inventions.


 


(b)                                 The Parties agree that the ECG Editing Tools, the [******],
[******] and the [******] are “Joint Inventions” for purposes of this
Agreement.


 


4.3.                              Additional License to Practice Joint Inventions.  In addition to the licenses
granted under Section 4.1 above and to the extent a Party (the “Requesting
Party”) requires a license to


 


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practice
any Joint Invention because it incorporates Confidential Information of the
other Party (the “Granting Party”) or incorporates a Mednet Invention (with
respect to Mednet as the Granting Party) or a Transoma Invention (with respect
to Transoma as the Granting Party), and upon the Requesting Party’s request,
the Granting Party may consent to grant to the Requesting Party (which consent
shall not be unreasonably withheld) a non-exclusive, world-wide, irrevocable, perpetual,
royalty-free, fully transferable and assignable license (with the right to
grant sublicenses) to make, have made, use, offer to sell, sell and import such
Joint Invention.  Notwithstanding any
grant of license herein, Confidential Information owned by the Granting Party
shall remain subject to the provisions of Article 8 (Confidential
Information).


 


ARTICLE 5


TERM AND TERMINATION


 


5.1.                              Term of Agreement. This Agreement
shall commence on the Effective Date and remain in effect until the third anniversary
of the Commercialization Date; thereafter, this Agreement shall automatically
renew for successive terms of one (1) year each (unless earlier terminated
pursuant to Section 5.2 below).


 


5.2.                              Termination.  Subject to Section 5.3(b) below,
this Agreement or any Statement of Work may be terminated in accordance with
the following provisions.


 


(a)                                  Either Party may elect to not renew this Agreement by giving notice
in writing to the other Party six (6) months prior to the end of the
then-current term.


 


(b)                                 Either Party may terminate this Agreement or any Statement of Work
at any time by giving notice in writing to the other Party, which notice shall
be effective upon dispatch, should the other Party file a petition of any type
as to its bankruptcy, become the subject of any involuntary proceeding in
bankruptcy not dismissed within thirty (30) days, be declared bankrupt, become
insolvent, make an assignment for the benefit of creditors, go into liquidation
or receivership, or otherwise lose legal control of its business.


 


(c)                                  Either Party may terminate this Agreement or any Statement of Work
upon written notice to the other Party of a material breach of this Agreement
(including any Statement of Work) by the other Party, which termination shall
take effect without further action if such breach remains uncured within thirty
(30) days following such notice.


 


(d)                                 Transoma may terminate this Agreement immediately upon written
notice to Mednet of Mednet’s breach of the warranty described in Section 7.1
(Data Integrity) below.


 


(e)                                  Transoma may terminate this Agreement upon one month’s prior
written notice to Mednet of Mednet’s recurrent failure to fulfill its
obligations under this


 


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Agreement. 
In the event Transoma terminates this Agreement pursuant to this Section 5.2(e),
Mednet shall continue to be bound by the terms of this Agreement for five (5) months
following such termination.  “Recurrent
failure” means the occurrence of any of the following events on three (3) or
more consecutive occasions or on two (2) or more occasions in a rolling
three-month period:


 


(i)                                     A delay of greater than five (5) days in Provider reporting;


 


(ii)                                  Failure to provide Transoma on a quarterly basis documentation of
full compliance training of Mednet’s data review operators;


 


(iii)                               [******];


 


(iv)                              Failure to forward any Transoma equipment [******];


 


(v)                                 [******]; or


 


(vi)                              [******].


 


(f)                                    The Parties may mutually terminate this Agreement or any Statement
of Work at any time as evidenced in a writing signed by both Parties.


 


(g)                                 Transoma may terminate this Agreement and any Statement of Work
upon ninety (90) days’ written notice to Mednet for any reason, with or without
cause, not contemplated by Section 5.2 (a) – (f).


 


5.3.                              Rights and Obligations on Expiration or Termination.  In the event of expiration
or termination of this Agreement for any reason in accordance with the terms of
this Agreement, the Parties shall have the following rights and obligations and
as otherwise provided in this Agreement:


 


(a)                                  Upon expiration or termination of this Agreement for any reason,


 


(i)                                     Each Party shall sign such documents and perform such acts as
reasonably needed to perfect ownership in Joint Inventions, patent applications
and patents owned by the other Party as reasonably requested by such other
Party and at such other Party’s expense.


 


(ii)                                  Each Party shall review Joint Inventions still subject to
disposition as of the expiration or termination of this Agreement and shall
enter into good-faith negotiations together to determine a course of action
regarding such Joint Inventions consistent with the terms herein.


 


(b)                                 The definitions contained in this Agreement and Transoma’s and
Mednet’s rights and obligations pursuant to Sections 5.3 (Rights and
Obligations on Expiration or Termination), 10.2 (Non-Solicitation) and 10.3
(Disputes) and Articles 4


 


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(Intellectual Property), 6
(Indemnification), and 8 (Confidential Information) shall survive the
expiration or termination of this Agreement together with and any other
provision hereof or of any schedule or exhibit hereto which, by its terms,
is intended to survive such expiration or termination.


 


(c)                                  Upon expiration or termination, Mednet retains no license to, shall
cease to use, and shall return or destroy all materials and software provided
to Mednet by Transoma, including, but not limited to, software for analysis [******].


 


(d)                                 In the event Transoma non-renews or terminates this Agreement as a
result of the acquisition of either Party by a third party, Mednet shall
continue to enroll patients under the Commercialization Statement of Work at
Transoma’s request for up to one year following the effective date of such expiration
or termination (the “Stop Date”).  Mednet
shall provide monitoring for all patients enrolled as of the Stop Date for the
life of their respective implanted devices.


 


ARTICLE 6


INDEMNIFICATION AND
INSURANCE


 


6.1.                              Indemnification.


 


(a)                                  Indemnification by Mednet.  Mednet shall indemnify, hold harmless, defend
and protect Transoma and its Affiliates, successors, assigns, employees,
representatives and agents from and against any and all claims, causes of
action, costs, expenses, losses, damages and liabilities (including, without
limitation, reasonable attorneys’ fees, except as provided in Section 6.2
(Third Party Claims) below) arising out of or resulting from any personal
injury, illness or death related to or associated with Mednet’s acts or
omissions in the analysis, interpretation and reporting of ECG signals.


 


(b)                                 Indemnification by Transoma.  Transoma shall indemnify, hold harmless,
defend and protect Mednet and its Affiliates, successors, assigns, employees,
representatives and agents, from and against any and all claims, causes of
action, costs, expenses, losses, damages and liabilities (including, without
limitation, reasonable attorneys’ fees, except as provided in Section 6.2
(Third Party Claims) below) arising out of or resulting from any personal
injury, illness or death related to or associated with the implantation or
malfunction of any Product, except to the extent of any obligation imposed on
Mednet under Section 6.1(a).


 


6.2.                              Third Party Claims.  If a claim by a third party is made against
an indemnified Party and if the indemnified Party intends to seek indemnity
with respect thereto under this Article 6, the indemnified Party shall
promptly notify the indemnifying Party of such claim; provided, however, that
the failure to give timely notice shall not affect the rights of the
indemnified Party so long as such failure to give timely notice does not
adversely affect the indemnifying Party’s ability to defend such claim against
a third party.  The


 


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indemnifying
Party shall be entitled to assume the defense thereof, with counsel selected by
the indemnifying Party and reasonably satisfactory to the indemnified
Party.  The indemnifying Party shall have
control of the defense of any such action, including any appeals and
negotiations for the settlement or compromise thereof and shall have full
authority to enter into a binding settlement or compromise; provided, that the
indemnifying Party shall not enter into any settlement or compromise without
the indemnified Party’s consent, which consent shall not be unreasonably
withheld, and in any event shall not be withheld if (i) such settlement
includes an unconditional written release by the claimant or plaintiff of the
indemnified Party and (ii) the full and sole relief provided is monetary
damages that are paid in full by the indemnifying Party.  If the indemnifying Party assumes the defense
of such claim, the indemnifying Party shall not be responsible for any legal or
other expenses subsequently incurred by the indemnified Party in connection
with the defense thereof.  The
indemnified Party may participate, at its own cost and expense, in the defense
of any such claim; provided, however, that such defense shall be controlled by
the indemnifying Party.


 


6.3.                              Cooperation as to Indemnified Liability.  Each Party shall cooperate
fully with the other Party with respect to access to books, records, or other
documentation within such Party’s control, if deemed reasonably necessary or
appropriate by any Party in the defense of any claim that may give rise to
indemnification hereunder.


 


6.4.                              Insurance.  On or before the Commercialization Date, the
Parties shall determine mutually agreeable minimum limits of insurance coverage
to be maintained by each Party commencing on the Commercialization Date and
continuing through the term of this Agreement.  
Such limits shall be set forth in a writing signed by both Parties,
which shall constitute an addendum to this Agreement.  Each Party shall thereafter, upon request of
the other Party, at its own expense, furnish the requesting Party a certificate
of insurance evidencing that it such insurance in effect as of the
Commercialization date and each year thereafter.


 


ARTICLE 7


WARRANTY AND AUDIT


 


7.1.                              Data Integrity.  Mednet hereby warrants to Transoma that as of
the date hereof and throughout the term of this Agreement, all data provided to
Transoma, to Providers and to patients shall be accurate and complete to at
least the [******] level.


 


7.2.                              Audit Rights.


 


(a)                                  Mednet shall, on a quarterly basis, complete an audit of randomly
selected samples of raw and analyzed data for the purpose of determining compliance
with the warranty in Section 7.1 (Data Integrity) and accuracy of Mednet’s
determination of patient condition. 
Audits shall be performed by personnel of Mednet who were not involved
in the initial analysis and review of such data.  Mednet shall provide the results of these
audits to Transoma.


 


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(b)                                 Transoma shall be entitled, at Transoma’s option and sole expense,
to provide for an independent audit of the nature described in Section 7.2(a).  Any such audit shall be performed on at least
twenty (20) days’ prior written notice to Mednet and during normal business
hours.


 


(c)                                  In the case of any identified discrepancy, Transoma and Mednet
shall jointly identify and implement appropriate corrective action.  Subsequent audits shall verify the
effectiveness of any such action taken.


 


(d)                                 Any audit findings required to be reported to the FDA or other
regulatory body shall be provided promptly by Mednet in accordance with
applicable laws and regulations.


 


ARTICLE 8


CONFIDENTIAL
INFORMATION


 


8.1.                              Nondisclosure Agreement.  The Nondisclosure Agreement between the
Parties effective as of November 4, 2004 is superseded in its entirety by
this Article 8 and shall have no further force or effect.


 


8.2.                              Confidentiality.  “Disclosing Party” means the Party disclosing
information to the other Party, and “Receiving Party” means the Party receiving
such information.  “Confidential
Information” means information that is not generally known and that is
proprietary to the Disclosing Party, or that the Disclosing Party is obligated
to treat as proprietary.  Specifically,
Confidential Information shall include but not be limited to the Disclosing
Party’s customer or prospect lists, marketing and selling tactics or strategies
planned or employed by the Disclosing Party, sales figures, market projections,
product designs, materials used in products and manufacturing processes,
software and algorithms.  The Receiving
Party’s duties shall apply only to Confidential Information that is: (i) disclosed
by the Disclosing Party in writing and is marked to indicate it is confidential
at the time of disclosure; or that is (ii) disclosed by the Disclosing
Party in any other manner (including oral disclosure) and is indicated to be
confidential at the time of disclosure and that the Disclosing Party identifies
to the Receiving Party in a written memorandum summarizing the disclosure
within thirty (30) days of disclosure; or (iii) disclosed in the form of
tangible products or materials transmitted to the Receiving Party with a
written memorandum summarizing the disclosure within thirty (30) days of
disclosure.


 


8.3.                              Use and Disclosure of Confidential Information.  Except as specifically
authorized by an authorized officer of the Disclosing Party, during the term of
this Agreement and continuing for so long as such Confidential Information does
not become publicly available through no fault of the Receiving Party, the
Receiving Party shall not use or disclose Confidential Information to any
person who is not an employee of the Receiving Party.  Upon expiration or termination of this
Agreement, the Receiving Party shall promptly deliver to the Disclosing Party
all records and any compositions, articles, devices, apparatus and other items
that disclose, describe or embody Confidential


 


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Information
or any Invention belonging to, or otherwise assigned to, the Disclosing Party
hereunder, including all copies, reproductions and specimens of the
Confidential Information in the Receiving Party’s possession, regardless of who
prepared them, and shall promptly deliver any other property of the Disclosing
Party in the Receiving Party’s possession, whether or not Confidential
Information.  Alternatively, if any of
the foregoing is impractical, the Receiving Party shall provide to the
Disclosing Party a sworn statement verifying the permanent deletion of
Confidential Information (e.g.,
data, software, etc.).


 


8.4.                              Exceptions.  This Agreement imposes no obligation upon the
Receiving Party with respect to Confidential Information that: (i) was in
the Receiving Party’s possession before receipt from the Disclosing Party (as
evidenced by the Receiving Party’s written records); (ii) is or becomes
available to the public through no fault of the Receiving Party; (iii) is
received in good faith by the Receiving Party from a third party or source who
had the right to provide it and is not subject to an obligation of
confidentiality owed to the third party or source (as evidenced by the
Receiving Party’s written records); or (iv) is independently developed by
the Receiving Party without reference to Confidential Information received
hereunder (as evidenced by the Receiving Party’s written records).


 


8.5.                              Degree of Care.  The Receiving Party shall protect
Confidential Information by using the same degree of care, but no less than a
reasonable degree of care, to prevent the unauthorized disclosure of
Confidential Information, as the Receiving Party uses to protect its own
confidential information of a like nature.


 


8.6.                              Required Disclosure.  In the event that the Receiving Party is
required by judicial or administrative process to disclose Confidential
Information, the Receiving Party shall promptly notify the Disclosing Party and
allow the Disclosing Party a reasonable time to oppose such process.  If required under force of law, the Receiving
Party must use best efforts to maintain the confidentiality of the Confidential
Information by providing such Confidential Information under seal, protective
order or under equivalent procedure.


 


8.7.                              Restrictions on Use of Transoma Confidential Information.  In addition to the other
provisions of this Article 8, no Confidential Information supplied by
Transoma to Mednet that pertains to [******] shall be used with or applied to
any data other than that supplied by Transoma or through the Product, without
the prior written consent of Transoma. 
Further, Mednet shall not disassemble, decompile or reverse engineer any
Confidential Information supplied by Transoma.


 


ARTICLE 9


DISPUTE RESOLUTION


 


9.1.                              Subject to Section 6.4 above and Sections 9.2 through 9.5
below, any dispute, controversy or claim (collectively referred to in this section as
“Dispute”) arising out of this Agreement, the creation of this Agreement or any
alleged breach of this Agreement shall be subject to the following process:


 


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(a)                                  Negotiation.  A Party may invoke the negotiation process by
written notice given to the other Party. 
Any such notice shall provide reasonable detail of the Dispute.  Within ten (10) days after receipt of
such notice, the matter shall be submitted for resolution through negotiations
between the following designees of each Party:


 


For Transoma:                      


 


For Mednet:                          


 


Such
designees shall negotiate in good faith to resolve the matter within fifteen
(15) calendar days (unless the Parties mutually agree to extend the
negotiations).  The negotiations shall be
considered to have failed if, after at least two (2) joint meetings, the
designee of a Party determines that no reasonable resolution can be reached and
provides written notice to the other Party of a request for mediation.


 


(b)                                 Mediation.  Any Disputes that cannot be resolved by the
negotiation provisions in paragraph (a) above shall proceed to
mediation.  Such mediation shall be
conducted by one (1) mediator who shall be selected jointly by the Parties
within ten (10) calendar days after notice of the request for
mediation.  If the Parties cannot agree
on a mediator, each Party shall select a mediator within five (5) calendar
days after the Parties’ failure to agree upon a mediator.  The two mediators so selected shall appoint a
single mediator who alone shall conduct the mediation.  The mediation shall be non-binding and shall
commence within five (5) calendar days after the selection of the
mediator.  A Party shall attend the
mediation through one or more persons who have the authority to settle the
Dispute for the respective Party.  The
mediation shall continue until the earlier of (a) thirty (30) calendar
days after selection of the mediator, or (b) the date the Dispute is
settled or the mediator declares that the Parties are at an impasse and not all
Disputes can be resolved.  The expenses
of the mediation shall be shared equally by the Parties.  All mediation pursuant to this Agreement
shall occur in Minneapolis, Minnesota.


 


(c)                                  Arbitration.  Any Dispute which is not resolved by
mediation under paragraph (b) above shall proceed to binding
arbitration.  Such arbitration shall be
conducted in accordance with Minnesota Statutes, Chapter 572 and, to the extent
inconsistent with Minnesota law, the Rules for the Resolution of
Commercial Disputes of the American Arbitration Association (“AAA”).  The arbitration shall be conducted by one (1) arbitrator.  If the Parties cannot agree on an arbitrator,
each Party shall select an arbitrator within five (5) calendar days after
the Parties’ failure to agree upon an arbitrator.  The two arbitrators so selected shall appoint
a single arbitrator who alone shall conduct the arbitration.  Each Party shall be responsible for payment
for its own attorneys or other advisors and for its appointed arbitrator.  The expenses and fees of the sole arbitrator
and of the arbitration proceeding shall be shared equally by each of the
Parties.  To the extent permitted by law,
the Parties agree that grounds for vacating, modifying or correcting an award
of the


 


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arbitrator
shall include a manifestly incorrect determination of material fact by the
arbitrator if such determination would have resulted in a materially different
outcome in the arbitration, or a failure of the arbitrator to correctly apply
applicable law, in addition to those stated in Minnesota Statutes, Sections
572.19 and 572.20.  Any award in
arbitration may grant specific performance or other equitable remedy if the
arbitrator so determines.  The Parties
agree that any such award shall not include or allow extracontractual or
punitive damages.  All arbitration
pursuant to this Agreement shall occur in Minneapolis, Minnesota, unless
otherwise agreed to by the Parties.


 


9.2                                 Any Dispute relating to a Party’s termination of this Agreement
under Article 5 shall immediately proceed to arbitration pursuant to Section 9.1(c).


 


9.3                                 “Dispute” shall not include (a) a cross-claim or counterclaim
by one Party against the other Party, or (b) any claim for indemnification
pursuant to Article 6.


 


ARTICLE 10


MISCELLANEOUS


 


10.1.                        Relationship.  This Agreement does not make either Party the
employee, agent or legal representative of the other for any purpose
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.  In fulfilling its obligations pursuant to
this Agreement each Party shall be acting as an independent contractor.


 


10.2.                        Non-Solicitation.  During the term of this Agreement and for a
period of twelve (12) months thereafter, each Party shall not, directly or
indirectly, as an agent, consultant, or in any other capacity, participate in
any way whatsoever in inducing or attempting to induce any employee of the
other Party to terminate employment with such other Party.


 


10.3.                        Disputes.  Subject to Section 2.6 (Joint
Obligations of Transoma and Mednet), any dispute, controversy or claim arising
out of or relating to this Agreement, or the breach, expiration, termination or
invalidity thereof, shall be finally settled by arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association
in effect on the date of this Agreement by a single arbitrator who shall be
appointed in accordance with such rules. 
The place of arbitration shall be Minneapolis, Minnesota.


 


10.4.                        Governing Law.  This Agreement shall be governed by, and
interpreted and construed in accordance with the laws of the State of
Minnesota.


 


10.5.                        Successors and Assigns.  This Agreement is binding on and inures to
the benefit of each Party’s successors and assigns.


 


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10.6.                        Assignment.  Neither Party may assign or otherwise
transfer its rights and obligations under this Agreement, without the other
Party’s prior written consent, except that either Party may assign or transfer
this Agreement in connection with a merger, consolidation, assignment, sale or
other disposition of substantially all of its assets or business without the
other Party’s prior written consent; provided, that the assigning or
transferring Party shall provide the other Party at least thirty (30) days’
prior written notice of any such transaction or any change in ownership of 50%
or more of such Party’s outstanding stock.


 


10.7.                        Notices.  Notice permitted or required to be given
under this Agreement shall be deemed sufficient if given in writing by
facsimile, commercial air delivery service or by registered or certified air
mail, postage prepaid, return receipt requested, addressed to the respective
addresses of the Parties set forth below or at such other address as the
respective Parties may designate by like notice from time to time.  Notices so given shall be effective upon the
earlier of:  (a) receipt by the
Party to which notice is given (which, in the instance of a facsimile, shall be
deemed to have occurred at the time that the machine transmitting the facsimile
verifies a successful transmission of the facsimile); (b) on the fourth
business day following the date such notice was deposited in the mail; or (c) on
the second business day following the date such notice was delivered to a
recognized commercial overnight delivery service.  Notices shall be given as follows:


 


	
  If to Mednet:

  	
  Mednet Healthcare Technologies, Inc.

  
	
   

  	
  275 Phillips Boulevard

  
	
   

  	
  Ewing, New Jersey 08618

  
	
   

  	
  Attn: Brian Pike

  
	
   

  	
  Fax: (800) 606-5511

  
	
   

  	
   

  
	
  If to Transoma:

  	
  Transoma Medical, Inc.

  
	
   

  	
  4211 Lexington Avenue North, Suite 2244

  
	
   

  	
  St. Paul, Minnesota 55126-6164

  
	
   

  	
  Attn: Brian Brockway

  
	
   

  	
  Fax: (651) 481-7444

  



 


10.8.                        Entire Agreement.  This Agreement, including any Statement of
Work and other exhibits attached hereto and incorporated as an integral part of
this Agreement, supersedes all previous and contemporaneous oral negotiations,
commitments, writing and understanding between the Parties concerning the
matters in this Agreement, including without limitation, any policy or
personnel manuals of Transoma.  In the
event of a conflict between any Statement of Work and this Agreement, the
Agreement should control, except to the extent such Statement of Work expressly
amends this Agreement.


 


10.9.                        Amendment.  This Agreement shall not be deemed or
construed to be modified, amended, rescinded, canceled or waived, in whole or
in part, other than by written amendment signed by the Parties hereto, except
as expressly provided in this Agreement.


 


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10.10.                  Severability.  In the event that any of the terms of this Agreement
are in conflict with any rule of law or statutory provision or otherwise
unenforceable under the laws or regulations of any government or subdivision
thereof, such terms shall be deemed stricken from this Agreement, but such
invalidity or unenforceability shall not invalidate any of the other terms of
this Agreement and this Agreement shall continue in force, unless the
invalidity or unenforceability of any such provisions of this Agreement
substantially violates, comprises an integral part of or is otherwise
inseparable from the remainder of this Agreement.


 


10.11.                  Counterparts.  This Agreement may be executed in two or more
counterparts, and each such counterpart shall be deemed an original hereof.


 


10.12.                  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.


 


10.13.                  Publications.  Mednet shall have no right to publish the
results of the work under this Agreement other than as contemplated herein
without prior written consent of Transoma, which consent shall not be
unreasonably withheld.


 


10.14                     Amendment and Restatement of Original Agreement.  The Original Agreement is
hereby amended and restated in its entirety, as of the date of this Agreement,
and shall be superseded from and after the date of this Agreement by the terms
and provisions hereof.


 


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IN WITNESS
WHEREOF, the Parties have caused this Agreement to be executed on the date
first above written.


 


 


	
  TRANSOMA MEDICAL, INC.

  	
   

  	
  MEDNET HEALTHCARE

  TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Brian
  P. Brockway

  	
   

  	
  By:

  	
  /s/ Frank
  Movizzo

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
  Brian P. Brockway

  	
   

  	
  Printed Name:

  	
  Frank Movizzo

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  President and CEO

  	
   

  	
  Its:

  	
  CEO

  	
   

  
									



 


[Signature Page to Amended and Restated
Collaboration and Services Agreement]


 


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EXHIBIT A


 


DEVELOPMENT STATEMENT OF WORK


 


This
Development Statement of Work Relates directly to the Collaboration and
Services Agreement dated February 27, 2006, as amended and restated June 26,
2007.


 


SCOPE


 


Mednet shall work with Transoma to develop and/or
modify Mednet’s internal systems to support the processing of ECG signals
transmitted from the Buddy implantable ECG device.


 


DEVELOPMENT POINTS OF CONTACT


 


Transoma and
Mednet shall each identify and mutually agree upon designated individuals as
primary points of contact.


 


NATURE OF WORK


 


The following
outline generally lists development activities that have been agreed upon by
Mednet and Transoma:


 


•                  Mednet and Transoma shall each perform such due diligence as
reasonably necessary to confirm the services contemplated by this Agreement do
not infringe on the intellectual property rights of any third party.


 


•                  Mednet and Transoma shall each provide experts who shall
collaborate on reimbursement strategy.


 


•                  Mednet and Transoma shall jointly develop the format of the co-branded
reports to be provided to Providers and patients, subject to final approval by
an authorized representative of each Party.


 


•                  Mednet’s and Transoma’s development teams shall collaborate with
each other in a timely manner.


 


•                  Mednet and Transoma shall develop and provide mutual sign-off of
key system interface documents.


 


•                  Mednet shall support test-level access to server data for
pre-commercialization product development.


 


•                  Mednet shall provide Transoma copies of the Mednet System Test Plan
and Test Report.


 


Detailed
schedules shall be developed and shall list activities at about one-week
granularity and identify deliverables and when they shall be delivered.


 


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EXPENSES


 


Except as
specifically provided for under the Agreement, each Party shall be responsible
for its own expenses during the Development Period.


 


REPORTING


 


On at least a
bi-weekly basis, Mednet and Transoma representatives shall communicate
regarding the status of development activities.


 


DEVELOPMENT PERIOD DELIVERABLES


 


Creation and
refinement of the deliverables list shall result from detailed schedule development
by, and discussions between, Mednet and Transoma personnel.  The Parties agree to work together to define
additional commercialization phase deliverables of performance during the
Development Period.


 


The process
of sharing patient registration and equipment tracking codes shall be defined
during the Development Period.


 


Mednet’s work shall be
controlled using Mednet’s own quality system.


 


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EXHIBIT A-1


 


ADDENDUM
TO DEVELOPMENT STATEMENT OF WORK


 


This Addendum
to Development Statement of Work relates directly to the Amended and Restated
Collaboration and Services Agreement dated June 26, 2007.  To the extent any conflict exists between Exhibit A
and this Exhibit A-1, this Exhibit A-1 shall control.


 


STATEMENT
OF DEVELOPMENT WORK


 


Mednet shall develop a web presence with rhythm strip review of data
collected from Products that incorporates arrhythmia identification, integrated
presentation and data handling.  This
system shall conform to the business processes, work flows and web presence
required by Transoma and shall conform to commonly accepted standards for
medical data security and traceability as of the Commercialization Date.


 


•                  The look and feel of the Complete System will be specified by
Transoma, collaboratively developed by Transoma and Mednet and will be
implemented by Mednet.


 


•                  Mednet shall apply for and obtain whatever certifications and/or
approvals as are necessary (as collaboratively determined by Transoma and
Mednet) to ensure that the Complete System is ready for use in the United
States and internationally by no later than August 1, 2007.


 


DEVELOPMENT
POINTS OF CONTACT


 


Transoma and Mednet shall each identify and mutually agree upon
designated individuals as primary points of contact for management of
day-to-day collaboration activities.


 


The points of contact shall have authority to:


 


•                  Delegate point of contact authority for any or all of the project
responsibilities.


 


•                  Have project level decision making authority within each
organization.


 


NATURE
OF WORK


 


•                  Through a collaborative effort of Mednet and Transoma, details
shall be defined for:


 


•                  Web presence.


 


•                  Work flows.


 


•                  Business processes.


 


•                  Mednet shall be responsible for creating, managing and maintaining
any and all contractual relationships with subcontractors and consultants.


 


•                  Mednet work shall be controlled under the Mednet Quality System.


 


•                  Mednet shall accommodate Transoma’s review of Mednet’s quality
system and provide evidence of corrective actions if required by Transoma.


 


•                  Report formats and information presentation screens shall be
defined by Transoma in collaboration with Mednet and in accordance with the
Collaboration Agreement.


 


•                  Mednet and Transoma development teams shall collaborate and
communicate acknowledgments in a timely manner.


 


•                  Mednet shall develop a mutually agreeable sign-off process for key
interface documents.


 


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•                  Mednet shall support test-level access to server data for
pre-commercialization product development.


 


•                  Design reviews will be held at a mutually agreed upon location.


 


DEVELOPMENT
EXPENSES


 


Except as
specifically provided for under the Collaboration Agreement, each Party shall
be responsible for its own expenses during the Development Period.


 


PROGRESS
REPORTING


 


On at least a bi-weekly basis, Mednet and Transoma project points of
contact shall communicate regarding the status of development activities.


 


DEVELOPMENT
PERIOD DELIVERABLES


 


With respect to each deliverable (including any update or upgrade
thereof), Mednet shall certify in writing to Transoma that a particular item,
subject to Transoma’s acceptance testing, has been delivered to Transoma and is
ready for acceptance testing.


 


Minimum Mednet deliverables:


 


The Complete
System (including but not limited to all software and, unless otherwise stated
below, Development Materials ) consisting of the following applications:


 


•                  [******].  This deliverable
is considered a Black Box Component and will include Black Box Component
Deliverables and not Development Materials.


 


•                  Transoma Physician Web Portal –
developed, installed and operational as reflected in Attachment 1 to
this Statement of Work.


 


•                  ECG Editing Tools - integrated with
the Transoma Physician Web Portal for physician data editing of posted patient
ECGs.  Tools include [******].  This deliverable is considered a Black Box
Component and will include Black Box Component Deliverables and not Development
Materials.


 


•                  [******].  This deliverable
is considered a Black Box Component and will include Black Box Component
Deliverables and not Development Materials.


 


•                  [******].


 


Additional
deliverables as determined by the Parties after the effective date of this
Addendum.


 


TERM
AND TERMINATION


 


Commercialization of pieces of the development work may occur prior to
completion of all development work. 
Unless earlier terminated pursuant to Section 5.2 of the
Collaboration Agreement, this Statement of Work shall continue until the
completion of the Development Period.


 


SPECIFICATIONS


 


Additional project specifications may be developed during the
Development Period.


 


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DEVELOPMENT
FEES


 


Upon execution of the Amended and Restated Collaboration and Services Agreement,
Transoma shall pay Mednet a development fee of [******].


 


MILESTONE
SCHEDULE AND PAYMENTS


 


Transoma shall pay Mednet the following development fees upon
demonstration to Transoma’s satisfaction of completion of the following key
milestones, pursuant to the completion criteria described below.


 


[******]


 


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ATTACHMENT
1 TO


DEVELOPMENT
STATEMENT OF WORK


 


TRANSOMA
PHYSICIAN WEB PORTAL VIEWS


 


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EXHIBIT B


 


COMMERCIALIZATION STATEMENT OF WORK


 


This
Commercialization Statement of Work Relates directly to the Collaboration and
Services Agreement dated February 27, 2006, as amended and restated June 26,
2007 and is effective as of the Commercialization Date.


 


SCOPE


 


Mednet shall
perform ECG signal processing transmitted from the Buddy implantable ECG
device, store, analyze and certify the resulting data and provide reports to
Providers and Transoma in such forms as are mutually agreed upon by Transoma
and Mednet.


 


DEVELOPMENT POINTS OF CONTACT


 


Transoma and
Mednet shall each identify and mutually agree upon designated individuals as
primary points of contact.


 


NATURE OF WORK


 


The following
outline generally lists activities that have been agreed upon by Mednet and
Transoma:


 


•                  [******].


 


•                  [******].


 


•                  All manual data analysis shall be completed by a trained data
review operator (as evidenced by Mednet’s written documentation provided to
Transoma on a quarterly basis) and certified by a Mednet staff physician, in
accordance with Mednet’s systems.


 


•                  Transoma shall provide to Mednet on a consignment basis a supply of
replacement components for the Product. 
Upon request by Transoma or a Provider, Mednet shall make a reasonable
effort to deliver the requested component(s) to the Provider within five (5) days
(inclusive of shipping).  Mednet shall be
responsible for shipping costs.


 


•                  Mednet shall return to Transoma, within twenty-one (21) days of
receipt, any Transoma equipment returned to Mednet by a Provider or patient.


 


•                  Mednet shall provide and maintain a 24/7 Provider and patient
customer care service for post-implant procedure matters.  Such service shall provide a toll free
call-in number with at most a two-tier referral process.


 


•                  Transoma shall provide 24/7 call center support to Providers for
matters relating to the Product implant procedure.


 


•                  Transoma shall provide implant data to Mednet for patient
enrollment purposes.


 


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•                  Mednet shall support test-level access to server data for
post-commercialization product improvements.


 


•                  Mednet shall track association of patients with Providers.


 


•                  Mednet shall support at-home equipment installation using printed
materials as well as telephone support.


 


•                  Mednet shall confirm system operation and follow-up with patients
that are not on the system within an agreed-upon amount of time.


 


•                  Mednet shall ensure that each patient is properly registered and
shall confirm the accuracy of critical information.


 


•                  Mednet shall maintain individual means to alert Providers about
individual compliance deviations.


 


•                  Mednet shall communicate collected and processed patient data to Providers
on an ongoing basis for the duration of reimbursement availability or device
implant, whichever is shorter.


 


•                  Mednet shall track equipment associated with each patient and track
each patient’s equipment history.


 


•                  Mednet shall archive collected data for the duration set forth
under the applicable CMS guidelines for data retention or, if no such
guidelines are applicable, for at least seven (7) years.


 


•                  Mednet shall maintain validated, high-availability data
communication and connectivity capabilities for receiving patient data.  Data connection specifics and subsequent
changes shall be communicated to Transoma.


 


•                  Mednet shall ensure suitable disaster management plans are
continuously in place and coordinated with Transoma performance expectations.


 


EXPENSES


 


Except as
specifically provided for under the Agreement, each Party shall be responsible
for its own expenses incurred under this Commercialization Statement of Work.


 


REPORTING


 


On at least a
quarterly basis, Mednet and Transoma representatives shall communicate
regarding the status of activities under this Commercialization Statement of
Work.


 


COMMERCIALIZATION PHASE DELIVERABLES


 


The following
outline is an example list of deliverables that Transoma requires of
Mednet.  Refinement of the deliverables
list shall result from detailed discussions between and schedule development
by Mednet and Transoma personnel.


 


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•                  On a quarterly basis and at Transoma’s reasonable request for cause
(in any case not more frequently than on a monthly basis), copies of all raw
and analyzed patient data obtained by Mednet using Transoma-developed
technology.  Such patient data shall be “de-identified”,
as defined in HIPAA and shall not include any of the following identifiers of
the patient or of the patient’s relatives, employers or household members:


 


•                  Names;


 


•                  All geographic subdivisions smaller than a State, including street
address, city, county, precinct, zip code, and their equivalent geocodes,
except for the initial three digits of a zip code if, according to the current
publicly available data from the Bureau of the Census:


 


•                  The geographic unit formed by combining all zip codes with the same
three initial digits contains more than 20,000 people; and


 


•                  The initial three digits of a zip code for all such geographic
units containing 20,000 or fewer people is changed to 000.


 


•                  All elements of dates (except year) for dates directly related to
an individual, including birth date, admission date, discharge date, date of
death; and all ages over 89 and all elements of dates (including year)
indicative of such age, except that such ages and elements may be aggregated into
a single category of age 90 or older;


 


•                  Telephone numbers;


 


•                  Fax numbers;


 


•                  Electronic mail addresses;


 


•                  Social security numbers;


 


•                  Medical record numbers;


 


•                  Health plan beneficiary numbers;


 


•                  Account numbers;


 


•                  Certificate/license numbers;


 


•                  Vehicle identifiers and serial numbers, including license plate
numbers;


 


•                  Device identifiers and serial numbers;


 


•                  Web Universal Resource Locators (URLs);


 


•                  Internet Protocol (IP) address numbers;


 


•                  Biometric identifiers, including finger and voice prints;


 


•                  Full face photographic images and any comparable images;


 


•                  Any other unique identifying number, characteristic, or code; and


 


•                  Mednet does not have actual knowledge that the information could be
used alone or in combination with other information to identify an individual
who is a subject of the information.


 


•                  On a quarterly basis, the results of a quarterly audit for data
interpretation accuracy.


 


•                  On a quarterly basis, Transoma shall provide to Mednet a forecast
for service demand and any other information mutually agreed upon by Transoma
and Mednet.


 


•                  Any additional deliverables as agreed upon pursuant to the
Development Statement of Work.


 


B-3

















 


CONFIDENTIAL MATERIAL HAS
BEEN


OMITTED AND FILED
SEPARATELY WITH THE


SECURITIES AND EXCHANGE
COMMISSION,


ASTERISKS DENOTE SUCH
OMISSIONS


 


EXHIBIT B-1


 


ADDENDUM
TO COMMERCIALIZATION STATEMENT OF WORK


 


This Addendum to Commercialization Statement of Work relates directly
to the Amended and Restated Collaboration and Services Agreement dated June 26,
2007.  To the extent any conflict exists
between Exhibit B and this Exhibit B-1, this Exhibit B-1 shall
control.


 


SERVICES


 


•                  Customer Service:  Mednet shall staff and handle all forwarded
calls on weekdays after business hours, weekends and U.S. holidays for
patients, hospital staff and other medical personnel (other than implanting
physicians with urgent procedure-related calls). Business hours are from Monday
through Friday, 8:00 AM until 5:00 PM Central time. U.S. holidays are
considered to be New Year’s Day, Memorial Day, Independence Day (and two days
prior or post), Labor Day, Thanksgiving, the day after Thanksgiving, Christmas
Eve and Christmas Day.


 


•                  Technical Support:  Mednet shall provide all first-line technical
support on a 24/7 basis.  Technical
support shall be available in English and Spanish.


 


•                  Data Analysis:  [******].


 


•                  System Maintenance:  Mednet shall be responsible for
patient/device data setup and maintenance of patient/device data on the web.


 


•                  Web Hosting:  Hosting services shall be provided for
Transoma through Mednet who will contract with appropriate domestic or
international providers as appropriate. 
International data hosting services, requirements, arrangements and
costs shall be collaborated upon by Transoma and Mednet.  Hosting services shall provide:


 


•                  24/7 maintenance staff


 


•                  Toll-free dial-in numbers for use with activators


 


•                  Modem banks to receive incoming activator data transmissions


 


•                  Periodic data back-up services


 


•                  Country appropriate data handling procedures for patient data
security


 


•                  Mednet shall enroll Transoma patients onto Mednet’s system in
accordance with the requirements set forth in Attachment 1 to this Addendum.


 


•                  Mednet shall provide monitoring services and all other services
described above for every Transoma patient enrolled onto Mednet’s system in
accordance with the requirements set forth in Attachment 1 to this Addendum.


 


FEES
AND PAYMENT


 


•                  Mednet shall be solely responsible for obtaining reimbursement for
services provided to patients monitored with a Product.


 


•                  Mednet shall provide Transoma on a quarterly basis tracking
information about insurers that are not paying for services provided to
patients monitored with a Product.


 


•                  Transoma shall reimburse Mednet for Mednet’s actual telecom costs
incurred for patients implanted with devices of the current generation of
Product.


 


•                  During the first three years following the Commercialization Date,
Transoma shall pay Mednet for data hosting services as set forth in Attachment
1 to this Addendum:


 

















 


CONFIDENTIAL MATERIAL HAS
BEEN


OMITTED AND FILED
SEPARATELY WITH THE


SECURITIES AND EXCHANGE
COMMISSION,


ASTERISKS DENOTE SUCH
OMISSIONS


 


•                  Raw data access fee, hosting services, and first line patient
technical support: [******]  per patient


 


•                  A minimum of [******] in data hosting fees (representing [******] enrolled
patients at [******] per patient) shall be payable by Transoma.  In the event that fewer than [******] patients
are enrolled onto the Mednet system over the Term of the Collaboration
Agreement, Transoma shall pay to Mednet the difference between [******] and the
total data hosting fees paid during the Term.


 


•                  Mednet shall invoice Transoma on a monthly basis for new patients
connected to the Mednet system in a calendar month.  Transoma shall pay [******] days net.


 


•                  [******].


 


•                  [******].


 


	
   

  	
   

  	
  Sensitivity

  	
   

  	
  Positive Predictivity

  	
   

  
	
  Phase 1 Functionalities:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [******]

  	
   

  	
  [******]

  	
   

  	
  [******]

  	
   

  
	
  [******]

  	
   

  	
  [******]

  	
   

  	
  [******]

  	
   

  
	
  [******]

  	
   

  	
  [******]

  	
   

  	
  [******]

  	
   

  
	
  [******]

  	
   

  	
  [******]

  	
   

  	
  [******]

  	
   

  
	
  [******]

  	
   

  	
  [******]

  	
   

  	
  [******]

  	
   

  
	
  Phase 2 Additional Functionalities:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [******]

  	
   

  	
  [******]

  	
   

  	
  [******]

  	
   

  
	
  [******]

  	
   

  	
  [******]

  	
   

  	
  [******]

  	
   

  



 


•                  [******].


 


•                  Determination of Performance.  The performance levels set forth above shall
be tested solely by Mednet (using protocols developed solely by Mednet) using MIT-BIH,
AHA, NST (MIT-BIH) data sets, and the results of all such tests shall be
promptly provided to Transoma for its review.


 


•                  Performance Level Audits.  At Transoma’s option and expense, Transoma
shall be entitled to (a) periodically audit performance during
commercialization, which audit shall be comprised of either a partial or
complete review of data with associated analysis and shall be based on the
judgment of a trained reviewer; provided, however, that any such audits shall
be conducted during normal business hours and shall not unreasonably interfere
in Mednet’s business, and (b) participate (in an observer’s role) in any
audit by Mednet of any of Mednet’s suppliers or subcontractors.


 


•                  Performance Failure; Remedies.  Transoma shall provide written notice to
Mednet within 30 days following its determination that performance falls below
the levels set forth above, and that such failure is due to a [******] (such 30-day
period, the “Notice Period”).  If
the performance failure is not remedied within 90 days following the end of the
Notice Period, Transoma may, at its option, (a) terminate, without payment
or penalty of any kind, the Collaboration Agreement, the Amendment [******] and
any of its obligations in connection therewith, or (b) [******], but
without any obligation to make the associated [******] unless and until
Transoma determines that the performance failure has been remedied.  Any incremental development costs and
responsibilities associated with the redevelopment and reestablishment of the
performance levels set forth above shall be negotiated on a case-by-case
basis.  The remedies set forth in this section are
in addition to any other remedies set forth in the Collaboration Agreement.


 

















 


CONFIDENTIAL MATERIAL HAS
BEEN


OMITTED AND FILED
SEPARATELY WITH THE


SECURITIES AND EXCHANGE
COMMISSION,


ASTERISKS DENOTE SUCH
OMISSIONS


 


REPORT
AND PORTAL FORMATTING


 


•                  Mednet shall follow a style guide supplied by Transoma for
formatting reports and web portal views that are supplied to physicians to
allow limited report customization. 
Transoma may require Mednet to revise the style guide from time to time.  Mednet shall charge Transoma [******] per
hour for such revision work.


 


•                  Mednet shall provide several specific report templates that are
physician selectable.


 


•                  Providers may only be allowed to modify report content by one of
the following methods:


 


•                  Call the Mednet service center and discuss changes.  If Mednet agrees with changes a revised
report will be issued.


 


•                  Alternatively, physician changes can be made on-line with tracked
edit history.


 


SERVICE LEVELS


 


•                  Mednet guarantees the following:


 


[******]


 


In the event Mednet fails to fulfill the above
guaranteed service levels, Transoma may, without payment or penalty of any kind
and in its sole discretion, take one or more of the following actions:


 


•                  Terminate the Collaboration Agreement, the Amendment or any
Statement of Work; and


 


•                  Assess a per-instance fee of [******]  thereafter, such amount agreed upon by the
Parties as representing liquidated damages resulting from Mednet’s failure to
fulfill the guaranteed service levels.


 


SALES AND DISTRIBUTION


 


•                  Mednet shall make its CardioStation and eCardioStation products
available for sale to domestic and international Providers.


 


•                  At Transoma’s option, Transoma may agree to become a distributor of
the CardioStation and eCardioStation products, upon mutually agreeable terms
and consistent with the terms of the Amendment. 
In addition, Transoma shall have the option to brand the eCardioStation and
CardioStation specific to Transoma’s products.


 


•                  Transoma may use the Mednet sales force to co-market in Mednet
accounts under condition of oversight by the Mednet Vice President of Sales.


 


TERM AND TERMINATION


 


Unless earlier terminated pursuant to Section 5.2
of the Collaboration Agreement, this Statement of Work shall continue until the
Collaboration Agreement is terminated.


 

















 


CONFIDENTIAL MATERIAL HAS
BEEN


OMITTED AND FILED
SEPARATELY WITH THE


SECURITIES AND EXCHANGE
COMMISSION,


ASTERISKS DENOTE SUCH
OMISSIONS


 


ATTACHMENT
1 TO 

COMMERCIALIZATION STATEMENT OF WORK


 


DATA
HOSTING SERVICES FEES


 


Mednet Scenario Table - Confidential


June 8, 2007




	
  [******]/[******]

  	
  Scenario

  	
  Reimbursement
  Status

  Under Current Language

  	
  Cost,
  assuming that the patient is enrolled 

  (Unless
  otherwise indicated, fees are [******].) 

  
	
  [******]/[******]

  	
  [******] patients
  [******]

  	
  Guaranteed
  to be monitored by Mednet with full over read under all circumstances

  	
  $[******]
  hosting fee and first line technical support per patient enrolled.

  
	
  [******]/[******]

  	
  All
  patients [******], assuming [******]

  	
  Mednet is
  obligated to enroll these patients and provide full over read. 

  	
  $[******]
  hosting fee and first line technical support per patient enrolled. 

  
	
  [******]/[******]

  	
  All
  patients [******], assuming [******]

  	
  Mednet will
  enroll any patient requested by Transoma, provided that Transoma agrees to
  pay as indicated to the right 

  	
  $[******]
  hosting fee and first line patient technical support per patient enrolled,
  or; 

  $[******] per
  patient enrolled if [******], not to exceed $[******]

  
	
  [******]/[******]

  	
  All
  patients [******] assuming [******]

  	
  Mednet is
  obligated to enroll these patients and provide full over read, [******]. 

  	
  $[******]
  hosting fee and first line technical support per patient enrolled. 

  
	
  [******]/[******]

  	
  All
  patients [******], assuming [******]

  	
  Mednet will
  enroll any patient requested by Transoma, provided that Transoma agrees to
  pay as indicated to the right

  	
  $[******]
  hosting fee and first line technical support per patient enrolled and [******],
  or; 

  $[******] per
  patient enrolled if [******], not to exceed $[******]. 

  
	
  [******]/[******]

  	
  All
  patients [******], assuming [******]

  	
  Mednet is
  obligated to enroll these patients and [******]

  	
  $[******]
  hosting fee and first line technical support per patient enrolled 

  





 


 

















 


CONFIDENTIAL
MATERIAL HAS BEEN


OMITTED
AND FILED SEPARATELY WITH THE


SECURITIES
AND EXCHANGE COMMISSION,


ASTERISKS
DENOTE SUCH OMISSIONS


 


Mednet Scenario Table - Confidential


June 8, 2007




	
  [******]/[******]

  	
  All patients [******], assuming [******]

  	
  Mednet will enroll any patient requested by
  Transoma, provided that Transoma agrees to pay as indicated to the right.
  Mednet will [******]. If requested by Transoma, [******]

  	
  $[******] hosting fee and first line technical
  support per patient enrolled and [******], or; $[******]per patient enrolled
  if [******], not to exceed  $[******].

  
	
  [******]

  	
  Patients [******]

  	
  Mednet will enroll any patient requested by
  Transoma, provided that Transoma agrees to pay as indicated to

  the right

  	
  $[******] per patient if [******]  $[******]
  per patient if [******]

  
	
  [******]

  	
  Patients [******]

  	
  Mednet will enroll any patient requested by
  Transoma, provided that Transoma agrees to pay as indicated to

  the right

  	
  $[******] hosting fee and first line technical
  support per patient enrolled and [******]. [******].

  





 




The services and costs described above
with respect to [******]
are based on the following assumptions:




 




·      [******].




 




[******].