Document:

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                                                                   EXHIBIT 10.12

 CONFIDENTIAL TREATMENT REQUESTED, CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
                   BEEN SEPARATELY FILED WITH THE COMMISSION.

                  EMAGEON UV, INC. MASTER TERMS AND CONDITIONS
                              ENTERPRISE AGREEMENT

THIS EMAGEON ENTERPRISE AGREEMENT (the "Agreement") is made this 5th day of May,
2004 (the "Effective Date"), by and between EMAGEON UV, INC. ("Emageon"), whose
principal place of business is at 1200 Corporate Drive, Suite 400, Birmingham,
Alabama 35242, and ASCENSION HEALTH, ("Ascension Health") whose principal place
of business is at 4600 Edmundson Road, St. Louis MO. 63134. The parties have
structured this Agreement to permit Ascension Health and the Ascension
Affiliates, as defined in Section 1.1, to purchase Emageon's products and
services upon the terms and conditions contained herein. An Order Addendum will
be executed between Emageon and either Ascension Health or an Ascension
Affiliate to detail specifics regarding the products and services purchased.
Throughout this Agreement, the term "Customer" shall refer to any Ascension
Affiliate that is bound by the terms and conditions of this Agreement. Ascension
Health shall have no liability or obligations (financial or otherwise) under
this Agreement or on behalf of an Ascension Affiliate, unless otherwise
specifically set forth in this Agreement or if the Order Addendum is in the name
of Ascension Health.

1.       DEFINITIONS. As used in this Agreement and in addition to any other
         terms defined herein, the following defined terms will have the
         following meanings:

         1.1.     "Ascension Affiliate" means any entity in or with which
                  Ascension Health: (i) is its sole corporate member; (ii) owns
                  more than a 20% ownership interest; (iii) has voting control
                  of the membership interests or managing board; (iv) has an
                  agreement to manage the entity's operations; (v) has
                  officially deemed the entity to be an affiliate via
                  contractual arrangement or memorandum of understanding which
                  agreement or memorandum is not solely for the purpose of
                  providing access to the special corporate discounts; or (vi)
                  has a contract to provide data processing services which are
                  not solely for the purpose of providing access to the special
                  corporate discounts. In addition, Ascension Affiliate shall
                  include any entity which is part of a chain of entities all
                  related in a manner described in items (i) through (vi) above.

         1.2.     "Ascension Ministry" means a group of Ascension Affiliates
                  that have been designated by Customer as an Ascension
                  Ministry.

         1.3.     "Clinical Information System" means an enterprise or
                  departmental electronic health record or departmental
                  information system (e.g. Radiology Information System) which
                  would require the presentation of medical images.

         1.4.     "CPI" means annual percentage increase set forth in the United
                  States Department of Labor Consumer Price Index, all Urban
                  Consumers, U.S. city average, all items with an index base
                  period of (1982-1984= 100).

         1.5.     "DICOM" means Digital Imaging and Communications in Medicine
                  and is the industry standard for transferring radiological
                  images and other medical information between computers.
                  Patterned after the Open System Interconnection of the
                  International Standards Organization, DICOM enables digital
                  communication between diagnostic and therapeutic equipment and
                  systems from various manufacturers.

         1.6.     "Eligible User Population" means all Customer employees,
                  agents, independent contractors, and customers who Customer
                  authorizes to access the SYSTEM.

         1.7.     "Emageon Software" means all computer programming/formatting
                  code or operating instructions created and/or designed by
                  Emageon. Emageon Software includes, but is not limited to, any
                  files necessary to organize, manage, store, transfer,
                  visualize, and retrieve DICOM images or HL7 messages, and
                  similar functions and underlying technology or components,
                  such as image processors, image compression, interface
                  programs that link other programs, customized graphics
                  manipulation

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                  engines, and menu utilities, whether in database form or
                  dynamically driven, all as created and/or designed by Emageon
                  and as set forth in Attachment B of each Order Addendum.

         1.8.     "Facility" means a location utilizing the SYSTEM that is an
                  Ascension Affiliate and part of an Ascension Ministry.
                  Facilities shall be designated in each Order Addendum.

         1.9.     "First Productive Use" means the date when Emageon certifies
                  to Customer that the SYSTEM is fully capable of performing its
                  functions pursuant to its specifications.

         1.10.    "Hardware" means the hardware components necessary for the
                  operation of the SYSTEM as set forth in Attachment B of each
                  Order Addendum.

         1.11.    "Hardware Installation Acceptance" means, unless otherwise
                  provided herein or in the respective Order Addendum, the date
                  Emageon certifies completion of installation of the Hardware
                  in accordance with the mutually agreed upon written
                  installation schedule and plan. If Emageon is prevented from
                  installing the Hardware in accordance with the mutually agreed
                  upon written installation schedule due to Customer's inability
                  to take delivery, or begin installation of the Hardware, the
                  Hardware Installation Acceptance shall be fifteen (15) days
                  after the agreed upon written installation schedule.

         1.12.    "Implementation Services" means those activities associated
                  with the installation and integration of the SYSTEM and
                  described in the respective Installation Plan and as outlined
                  in Exhibit A hereto.

         1.13.    "Installation Acceptance" means the SYSTEM has been installed
                  and tested for a period of thirty (30) days from First
                  Productive Use and has been found to be functional and capable
                  of performing the functions that it is intended to perform
                  when operated by a knowledgeable operator under specified
                  operating conditions. Upon completion of the thirty (30) day
                  testing period, Installation Acceptance shall be effective. If
                  any nonconformity of the SYSTEM is discovered by the Customer
                  during the thirty (30) day test period, Customer shall notify
                  Emageon in writing immediately upon the discovery of such
                  nonconformity and Emageon shall make every effort to correct
                  such nonconformity within ten (10) days unless another period
                  of time is mutually agreed upon by both parties and evidenced
                  in writing signed by both parties. Should Emageon be prevented
                  from installing the SYSTEM in accordance with the mutually
                  agreed upon written Installation Plan due to delays caused
                  solely by the Customer then the SYSTEM shall be deemed
                  installed and accepted forty-five (45) days after the agreed
                  upon Installation Acceptance date as set forth in the
                  Installation Plan. Upon Installation Acceptance, Emageon shall
                  invoice the respective Customer for all fees associated with
                  the Installation Acceptance. Should Installation of the SYSTEM
                  be delayed solely due to the fault of the other party, the
                  delayed party may recover from the delaying party actual
                  expenses incurred as a direct result of such delay.

         1.14.    "Installation Plan" means the mutually agreed upon series of
                  milestones that must be accomplished and the target dates for
                  such milestones. A sample installation plan is set forth in
                  Exhibit F. A custom installation plan shall be developed for
                  each Customer Facility within two weeks, or as mutually agreed
                  upon, of the execution of an appropriate Order Addendum and
                  each such custom installation plan shall be incorporated into
                  the appropriate Order Addendum.

         1.15.    "Integrating the Healthcare Enterprise" (IHE) is a joint
                  initiative by the Radiological Society of North America (RSNA)
                  and the Healthcare Information and Management Systems Society
                  (HIMSS), focused on improving the way computer systems in
                  healthcare share information. IHE promotes coordinated use of
                  established communications standards such as DICOM and HL7 to
                  address specific clinical needs in support of efficient
                  patient care. A dynamic and evolving standard, IHE members
                  submit, negotiate and agree upon implementation profiles to be
                  used for transactions allowing medical images and patient data
                  to be shared across an enterprise.

         1.16.    "Intellectual Property Rights" means any and all rights
                  existing from time to time in any jurisdiction under patent
                  law, copyright law, moral rights law, trade-secret law,
                  semiconductor chip protection law, trademark law, unfair
                  competition law, or other similar rights.

         1.17.    "Material Breach" means that either party fails to carry out
                  its obligations as set forth in this Agreement. Examples of
                  Material Breach include, but are not limited to, the failure
                  of the SYSTEM to perform

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                  substantially in accordance with the documentation such that
                  the operations of the Customer are impacted OR the failure of
                  the Customer to make undisputed payments.

         1.18.    "Modality" means a medical acquisition device such as Magnetic
                  Resonance, Computed Tomography, Nuclear Medicine, Ultrasound
                  and the like used in clinical departments such as Radiology
                  and Cardiology.

         1.19.    "Order Addendum" means the document in substantially the form
                  of Exhibit I attached hereto that will be executed by Emageon
                  and a Customer for each order of Hardware, Software,
                  Implementation Services, and Professional Services.

         1.20.    "Professional Services" means those activities requested by
                  Customer that are beyond the scope of the Implementation
                  Services and Support Services as set forth in Exhibit B of
                  each Order Addendum. An example of Professional Services would
                  be migration of legacy data. Professional Services fees are
                  billed separately from the SYSTEM fees and shall be set forth
                  in a separate Statement of Work. Professional Services will be
                  provided to Customer at the Professional Services Rates.

         1.21.    "Professional Services Rates" means those rates for
                  professional services as set forth in Exhibit J hereto.

         1.22.    "Services" means use of and access to the SYSTEM.

         1.23.    "Software" means the combined Emageon Software and Third Party
                  Software.

         1.24.    "Study" means an imaging service or procedure request with a
                  DICOM Study Instance Unique Identifier, which may consist of
                  multiple series from multiple modalities.

         1.25.    "SYSTEM" means the Emageon Software, Third Party Software and
                  Hardware as generally set forth in Attachment B of each Order
                  Addendum.

         1.26.    "System Upgrades" means any improvement in the Software that
                  enhances or modifies the basic function of the Software or any
                  new software that Emageon markets as a replacement of or
                  upgrade to the Software.

         1.27.    "System Updates" means any improvement in the Software that
                  relates to operating performance but does not alter the basic
                  function of the Software.

         1.28.    "Third Party Software" means all computer software created by
                  a third party (whether supplied in this Agreement or licensed
                  during the term hereof) in which the intellectual property
                  rights are not owned by Emageon, including without limitation,
                  any computer software specified as such in Attachment B of
                  each Order Addendum.

         1.29.    "Total Accountability Services" means the highest level of
                  Emageon Service and Support options for software and hardware,
                  including but not limited to; extended service hours,
                  additional consulting and analysis services, system monitoring
                  capabilities, additional training services, integration
                  services, business and financial performance metrics and
                  reporting.

2.       EMAGEON OBLIGATIONS.

         2.1.     Emageon shall provide Customer with use of the SYSTEM, which
                  shall be installed by Emageon in accordance with Exhibit A and
                  Attachment E of each Order Addendum and supported through the
                  term of this Agreement in accordance with Exhibit B.

         2.2.     Emageon agrees to work in good faith with Customer and the
                  Customer's Clinical Information Systems vendors, including but
                  not limited to those Clinical Information System vendors
                  listed on Exhibit K, to interface the SYSTEM with the
                  Customer's Clinical Information Systems. The appropriate fees
                  for such interface shall be agreed upon by both parties and
                  shall be set forth in the respective Order Addendum. In no
                  case shall the fees exceed the Professional Services Rates.

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         2.3.     Within thirty (30) days of the execution of this Agreement,
                  Emageon shall name a relationship manager to be the primary
                  point of contact for all joint activities.

         2.4.     Emageon agrees to provide as part of the SYSTEM, at no
                  additional cost to Customer full-motion video functionality
                  for angiography and ultrasound for Radiology use by July 31,
                  2004. Also, Emageon agrees to provide as part of the SYSTEM,
                  at no additional cost to Customer, application programming
                  interface software which integrates the Ultravisual viewer
                  into Clinical Information Systems to permit launching of a
                  study from within such Clinical Information System by July 31,
                  2004. Note that there are separate Professional Services fees
                  for viewer launching integration with Clinical Information
                  Systems: $10,000 for viewer launching integration and $10,000
                  for HL7 Study Arrival / Deletion notification. Failure of
                  Emageon to achieve the results in a commercially acceptable
                  fashion within the timeframes set forth above, shall result in
                  Emageon paying Customer liquidated damages equal to
                  $25,000.00.

         2.5.     Emageon intends to provide basic * * * functionality by March
                  31, 2006 to be priced at mutually agreed to rates. As of the
                  date of this Agreement, Emageon supports * * * within the
                  Ultrastructure Software. However, should Emageon not provide
                  the * * * functionality as intended, there shall be no
                  recourse to Emageon or this Agreement.

         2.6.     Emageon agrees to work with Ascension to develop the proper
                  platform and network configuration to enable an infrastructure
                  that will allow multiple, geographically dispersed Facilities
                  to share efficiently in a single common archive. This solution
                  must allow for proper security and scalability to support a
                  multiple Facility implementation and comply with regulatory
                  constraints and common industry practices on medical record
                  access.

         2.7.     Emageon represents and warrants that it will continuously
                  provide support for and be actively engaged in research and
                  development with respect to the SYSTEM for a period that is
                  the lesser of: (i) the term of this Agreement and any
                  amendments thereto; or (ii) ten (10) years from the Effective
                  Date. The foregoing support shall be provided to Customer at
                  no additional charges to Customer except for fees set forth
                  herein.

         2.8.     While at the Customer locations, Emageon and Emageon
                  employees, agents and subcontractors ("Emageon Personnel")
                  shall (1) comply with reasonable requests, standard rules and
                  regulations of Customer regarding personal and professional
                  conduct (including the wearing of a particular uniform,
                  identification badge, or personal protective equipment and
                  adhering to health care facility regulations which in some
                  instances may include health screening and testing, and
                  general safety practices or procedures) generally applicable
                  to such locations and (2) otherwise conduct themselves in a
                  businesslike manner. In the event that Customer determines in
                  good faith that the continued assignment to the project of one
                  or more persons is not in the best interests of Customer (and
                  provided the basis for such determination is not prohibited by
                  law), Customer shall consult with Emageon to that effect. Upon
                  such consultation, Emageon shall have a reasonable period of
                  time in which to investigate the matters stated in such
                  notice, discuss its findings with Customer and resolve the
                  problems with such person. If, following such period, Customer
                  requests replacement of such person, Emageon shall replace
                  that person with another person of suitable ability and
                  qualifications. However, where Customer notifies Emageon that
                  Customer has determined that the nature of the concern is such
                  that such person should be removed immediately from Customer's
                  account, Emageon shall immediately remove such individual(s)
                  from Customer's account pending such investigation and
                  discussion. In any event, any request by Customer to remove an
                  individual from Customer's account shall not be deemed to
                  constitute or require a termination of such individual's
                  employment by Emageon and in no event shall Customer be deemed
                  an employer of any such person. Notwithstanding the foregoing,
                  in no event shall Emageon be required to remove a person from
                  the project under this Section if Emageon believes in good
                  faith that doing so might subject Emageon to legal liability
                  for so doing, provided that Emageon provides Customer with the
                  rationale for its belief.

3.       CUSTOMER OBLIGATIONS.

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         3.1.     Customer shall have full responsibility for preparing,
                  maintaining and supporting those Modalities not provided by
                  Emageon in Attachment B of each Order Addendum. This includes,
                  but is not limited to, preventative maintenance, quality
                  control, following clearly defined technique and acquisition
                  procedures, and generally maintaining the system such that it
                  operates to its manufacturer's most recent specifications.
                  Further, the Customer is responsible for insuring these
                  Modalities are prepared to begin transmitting, and can
                  appropriately deliver DICOM data to the SYSTEM in the format
                  provided for by Emageon. In the event Emageon needs to provide
                  additional DICOM integration services, for non-standard DICOM
                  integrations, additional Professional Service fees will apply.
                  Emageon may, in certain circumstances, provide for, as
                  identified in Attachment B of each Order Addendum, a DICOM
                  interface device to the legacy, non-DICOM Modality. In this
                  event, those DICOM interface devices will be maintained by
                  Emageon in accordance with Emageon's responsibilities
                  identified in Exhibit B. Professional Services charges will
                  apply for standard DICOM modality integrations occurring
                  outside the scope of this Agreement.

         3.2.     Customer shall have full responsibility for preparing,
                  maintaining and supporting its information systems such as its
                  hospital information system, radiology information system and
                  any interface devices used to consolidate the information
                  systems. Typical support costs for these information systems,
                  which are the responsibility of the Customer, include general
                  maintenance, adding extra connectivity points and upgrades and
                  updates to those information systems.

         3.3.     Customer shall have full responsibility for preparing,
                  maintaining and supporting the necessary infrastructure
                  required to operate the SYSTEM. This includes, but is not
                  limited to, facilities, both wide area and local area
                  networks, heating and cooling systems, and electrical and
                  other energy sources, including uninterruptible power systems
                  and electrical back-up devices.

         3.4.     Customer shall be responsible for preventing any virus
                  infections, security breaches, and other disabling events
                  ("Disabling Event") from damaging the SYSTEM. Consequently,
                  Customer shall use a reliable and commercially accepted virus
                  detection system on any software and hardware that interfaces
                  to the SYSTEM. Customer must also have in place antivirus and
                  information systems security policies and procedures. In the
                  event that the SYSTEM is subject to a Disabling Event,
                  Customer shall immediately notify Emageon and Emageon shall
                  work with Customer in order to bring the system back to
                  pre-Disabling Event status. All time, materials and expense
                  involved with Emageon's investigation, planning and execution
                  of a SYSTEM rebuilding plan shall be billed separately to
                  Customer at the Professional Services Rates. Additionally, any
                  SYSTEM down time attributable to a Disabling Event shall not
                  count against non-scheduled down time. Not withstanding the
                  foregoing, however, any Disabling Event resulting from an act
                  or omission committed in breach of Emageon's obligations as
                  set forth in this Agreement shall be remedied by Emageon at no
                  cost to Customer and any SYSTEM downtime attributable to such
                  a Disabling Event shall count against non-scheduled downtime.

         3.5.     Software Upgrades. Customer agrees that they will install all
                  Software Upgrades to the Emageon Software such that they are
                  never behind more than the version that was generally in
                  release * * *.

         3.6.     Within thirty (30) days of the execution of this Agreement,
                  Customer shall name a relationship manager to be the primary
                  point of contact for all joint activities.

4.       USE AND ACCESS TO THE SYSTEM.

         4.1.     Subject to the terms, conditions and limitations set forth in
                  this Agreement, Emageon grants Customer and the Eligible User
                  Population a non-transferable perpetual right to access and
                  use the Software ("Perpetual License"). The rights granted
                  hereunder include without limitation the right to reproduce or
                  copy all or any portion of the Documentation included with the
                  SYSTEM in machine-readable or printed form as determined by
                  Customer to be reasonably required for its own internal data
                  processing needs. Customer may make and use as many copies of
                  the Software as are reasonably appropriate only for archival,
                  backup and recovery purposes. In connection with Emageon
                  performing the Services, Emageon may develop modifications to
                  the Software and/or new software programs (collectively, the

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                  "Developed Software"). Emageon reserves all rights to the
                  Developed Software, including, but not limited to, all
                  Intellectual Property Rights therein. Emageon hereby grants to
                  Customer a non-exclusive, non-transferable right to use the
                  Developed Software solely for use with the SYSTEM and subject
                  to the rights set forth in this Section 4.

         4.2.     The right to use the SYSTEM granted hereunder and the terms
                  and conditions of this Agreement shall cover all custom
                  Software and related Documentation developed on a
                  time-and-materials or flat-fee basis by Emageon at Customer's
                  request.

         4.3.     Customer will not remove any proprietary notices of Emageon or
                  third parties found in or on the Software. The Emageon
                  Software in both object and source code form, and all rights
                  to the Emageon Software, including but not limited to the
                  Intellectual Property Rights therein, are and will remain the
                  exclusive property of Emageon. Customer will have no claim of
                  ownership to the Intellectual Property Rights in the Emageon
                  Software or any Third Party Software. Customer will have no
                  right to sublicense either the Emageon Software or the Third
                  Party Software or allow access to the SYSTEM to unauthorized
                  users. All data-source documents provided by Customer and all
                  output based upon those documents shall remain Customer's
                  property.

         4.4.     Customer and Emageon acknowledge and agree that the provisions
                  of this Agreement do not prohibit Customer from utilizing a
                  third party to manage and operate the SYSTEM on its behalf
                  ("Outsourcer"). Outsourcer shall have all the rights granted
                  to Customer herein solely for the purpose of providing
                  services to and making the SYSTEM available for Customer's
                  use.

5.       PAYMENTS.

         5.1.     Fees. Pricing as set forth in Attachment C of each Order
                  Addendum is calculated based upon information provided and
                  approved by Customer as set forth in the Site Survey attached
                  as Attachment A of each Order Addendum. Should Customer add
                  equipment, Emageon shall work with Customer in good faith to
                  determine whether any additional charges should apply to a
                  change in its equipment configuration from that set forth in
                  Attachments A and B of each Order Addendum.

         5.2.     Overage Fees. Customer agrees that should a Facility 1) bring
                  up a Modality type (* * *) that was not described in the
                  Facility's executed Order Addendum or, 2) open an additional
                  facility that is not on contiguous land to the Facility or, 3)
                  acquire, merge, provide or share services with other health
                  entities that are not a part of Facility as of the effective
                  date of their respective Order Addendum, thereby increasing
                  its study volumes above those set forth in Attachment C of the
                  respective Order Addendum, Emageon may charge an Overage Fee
                  equal to the study volume in excess of the projected study
                  volume multiplied by the actual price per study of the
                  Ultrastructure Software and Maintenance fees for that
                  Facility.

                  In the event that the study volumes increase by more than
                  twenty percent (20%) for any reason other than those as set
                  forth above in any year over the projected study volumes for
                  that year as set forth in Attachment C of the respective Order
                  Addendum, Emageon may charge an Overage Fee equal to the study
                  volume in excess of twenty percent (20%) of the projected
                  study volume multiplied by the actual price per study of the
                  Ultrastructure Software and Maintenance fees for that
                  Facility. Payment for such overages, if any, shall be
                  considered one-time annual fees due to Emageon within thirty
                  (30) days of completion of such usage audit. Overage
                  calculations and related fees for any given year are
                  independent of overage calculations and related fees for any
                  other year. Customer also acknowledges that it may be required
                  to purchase additional hardware in order to support such
                  overage.

         5.3.     Billing. Emageon will bill Customer for all fees and expense
                  reimbursements due under the terms of this Agreement as set
                  forth in Exhibit C and in Attachment C of each Order Addendum.
                  Unless otherwise specified in this Agreement or an Order
                  Addendum, Customer will pay the undisputed amount of such bill
                  within thirty (30) days after the date of such bill. For each
                  year of this Agreement, Emageon will bill Customer the annual
                  fee on a pro rata monthly basis. Within forty-five (45) days
                  of the end of each year of this Agreement, Emageon and
                  Customer will perform an audit of the prior

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                  year's actual billable amounts. Subject to Section 5.2 above,
                  any amounts due Emageon after the audit will be due thirty
                  (30) days after the date of the completion of the audit.

         5.4.     Late Fees. Emageon may assess Customer a late fee of 1% per
                  month (not to exceed the maximum allowed under state law) on
                  all undisputed balances not paid when due.

         5.5.     Disputes. Any fees subject to reasonable dispute by Customer,
                  provided that Customer has notified Emageon in writing of the
                  basis for the dispute within 30 days of date of disputed
                  invoice, will not be subject to monthly late fees or be used
                  as a basis for suspending the services. Should dispute not be
                  settled by members of the respective accounting departments
                  within 30 days of Emageon's receipt of notice of disputed
                  invoice, a face to face negotiation shall be conducted by
                  senior executive representatives of Emageon and Customer.
                  Should the executive representatives be unable to resolve such
                  dispute within fourteen (14) days, either party may then seek
                  all remedies available at law. Should either party institute
                  an appropriate suit, the non-prevailing party in such suit
                  shall be responsible for any and all associated costs,
                  including reasonable attorney's fees.

         5.6.     Professional Service Fees. The Professional Service Rates
                  shall apply for all services rendered by Emageon which are
                  outside the scope of this Agreement. Reasonable and customary
                  expenses incurred by Emageon while engaged in such work,
                  including without limitation, expenses incurred for travel,
                  including local transportation, lodging and meals in
                  accordance with Exhibit E, will be billed to Customer at
                  Emageon's actual cost. Best efforts will be made by Emageon so
                  that no Fees outside the scope of this Agreement are incurred
                  without the prior written approval of the Customer.

         5.7.     Renewal Term Fees. For each renewal term, the Annual Support
                  and Maintenance fees for the Ultrastructure and/ or DICOM
                  Cache Manager Software License Fees shall be calculated based
                  upon the average annual projected volume for such Renewal Term
                  as defined in Section 12.1. The fees for the annual Support
                  and Maintenance for both the Ultrastructure and/ or DICOM
                  Cache Manager Software as well as the Ultravisual Software
                  shall continue at the rates set forth in this Exhibit C plus
                  an adjustment to reflect the CPI for the twelve (12) months
                  immediately preceding the effective date of the Renewal Term
                  or five percent (5%), whichever is lesser. All other
                  appropriate service fees as set forth herein shall be billed
                  to Customer at the then-current rates in accordance with the
                  terms of Exhibit C.

         5.8.     Expenses. Customer will pay or reimburse Emageon for any
                  reasonable out-of-pocket expenses, including, without
                  limitation, travel and travel-related expenses, incurred by
                  Emageon in connection with the implementation and support of
                  the SYSTEM pursuant to Emageon's expense and travel policy
                  attached hereto as Exhibit E.

         5.9.     Taxes. Customer will pay all sales, use, transfer, privilege,
                  excise, charges, surcharges or other taxes, and all duties,
                  whether international, national, state or local, however
                  designated, which are levied or imposed by reason of the
                  transactions contemplated hereby (collectively, the "Taxes");
                  excluding, however, income taxes on profits which may be
                  levied against Emageon. Customer will pay the amount of any
                  Taxes applicable to the transactions contemplated hereby, or
                  in lieu thereof, Customer will provide Emageon with a tax
                  exemption certificate acceptable to the applicable taxing
                  authorities. Customer will indemnify and hold Emageon harmless
                  from and against any and all losses, damages, penalties, costs
                  and expenses, including legal and accounting fees, incurred or
                  suffered by Emageon which result from or arise out of any
                  liability or taxes arising from a failure to pay Taxes under
                  this Agreement.

         5.10.    Most Favored Customer. Emageon represents that, upon execution
                  of this Agreement, Emageon has granted no more favorable
                  pricing to a "Comparable Purchaser". A "Comparable Purchaser"
                  is a purchaser of products and/or services where the following
                  conditions apply: (i) the type of contract is similar to the
                  nature of the relevant Customer contract (e.g., Managed Use
                  Agreements will not be compared to Perpetual License
                  Agreements); and (ii) the respective study volumes and number
                  of Facilities, in the aggregate, are not greater than ten
                  percent (10%) of Customer's similar factors. Emageon and
                  Customer agree to conduct an annual assessment on pricing
                  terms with respect to future contracts, including those
                  between Emageon and Customer and those entered into with other
                  Comparable Purchasers, for the purpose of ensuring Customer is
                  receiving a "Most Favored Customer"
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                  pricing status with respect to Comparable Purchasers. This
                  evaluation shall be concluded by a certification from
                  Emageon's Chief Financial Officer of the findings of the
                  review and the review shall be subject to audit, by a mutually
                  agreed-to independent third party under a duty of
                  confidentiality to Emageon only to report compliance or
                  noncompliance to Customer at Customer's expense; provided,
                  however, that if as a result of such review it is determined
                  that Emageon has not honored the terms of this provision,
                  Emageon shall reimburse Customer for the costs of such audit.
                  Comparable Purchasers shall exclude * * *. This clause will
                  only apply to newly executed Order Addendums and will not be
                  applied retroactively to signed or existing revenue producing
                  contracts. Further, the obligation for Most Favored Customer
                  pricing shall cease upon the earlier of (a) June 30, 2006; (b)
                  the date Ascension Health or one of its Affiliates has been
                  found to have materially breached or defaulted in the
                  performance of any of its obligations under the Agreement; (c)
                  the termination of the Agreement; or (d) the termination of
                  the Exclusive Agreement clause (Section 15.3).

6. RECORDS.

         6.1.     Customer shall keep reasonably accurate records for a period
                  of one (1) year after the close of each calendar year during
                  the term of this Agreement sufficient to allow Emageon to
                  determine the amount of fees to be paid by Customer to
                  Emageon. Such records shall be open to inspection, upon five
                  (5) days prior notice to Customer, by Emageon or an
                  independent certified public accountant retained by Emageon at
                  its own expense; provided, however, that if as a result of
                  such audit it is determined that Customer has underpaid fees
                  by an amount greater than ten percent (10%), Customer shall
                  reimburse Emageon for the costs of such audit. Emageon
                  reserves the right to access Customer's SYSTEM in order to
                  audit the SYSTEM and verify the number of Studies stored.
                  Emageon will not adversely effect the clinical operations of
                  the SYSTEM whenever it gains access to the SYSTEM. The
                  scheduling of all such access shall be mutually agreed upon.

7.       PROPRIETARY INFORMATION.

         7.1.     Definitions. For purposes of this Agreement, (a) "Confidential
                  Information" means any data or information of a party that is
                  valuable to such party or its owner and is not generally known
                  by the public, other than Trade Secrets; (b) "Trade Secrets"
                  means any information of a party including, but not limited
                  to, technical or non-technical data, a formula, a pattern, a
                  compilation, a program, a device, a method, a technique, a
                  drawing, a process, financial data, financial plans, the
                  Software or any Third Party Software, product plans, or a list
                  of actual or potential customers or suppliers which (i)
                  derives economic value, actual or potential, from not being
                  generally known to, and not being readily ascertainable by
                  proper means by, other persons who obtain economic value from
                  its disclosure or use; and (ii) is the subject of efforts that
                  are reasonable under the circumstances to maintain its
                  secrecy; and (c) "Proprietary Information" means Confidential
                  Information and Trade Secrets.

         7.2.     Non-Disclosure. Each party acknowledges that during the term
                  of this Agreement, the other party may be providing certain of
                  its Proprietary Information to such party, including but not
                  limited to the SYSTEM, which will be maintained by Emageon,
                  and the DICOM images provided by Customer to Emageon. Each
                  party will take reasonable precautions necessary to safeguard
                  the confidentiality of the Proprietary Information of the
                  other party, including those taken by such party to protect
                  its own Proprietary Information. Without limiting the
                  foregoing, each party agrees that it shall not, without the
                  prior written consent of the other party, directly or
                  indirectly, copy, disclose, distribute, publish, reproduce,
                  decompile, reverse engineer, transfer or make use of the
                  Proprietary Information of the other party except in
                  connection with the rights granted under this Agreement. Nor
                  shall either party disclose the contents of this Agreement,
                  pricing in connection with this Agreement, or the content of
                  any Emageon proposal materials to any third parties except for
                  outside legal counsel and/or accountants; provided, however,
                  that should it become necessary to disclose said information
                  to a third party, the disclosing party shall notify the
                  non-disclosing party, in writing, in advance and the third
                  party shall execute the non-disclosing party's non-disclosure
                  agreement before the disclosing party discloses said
                  information. Emageon recognizes that relevant Proprietary
                  Information may be shared by and between Ascension Health and
                  Ascension Affiliates provided such individuals agree to be
                  bound by the terms of Non-Disclosure set forth in this
                  Section 7.

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         7.3.     Unauthorized Disclosure. If an unauthorized use or disclosure
                  occurs, such party will immediately notify the other party and
                  assist the other party in recovering its Proprietary
                  Information and preventing its subsequent unauthorized use or
                  dissemination. However, the restrictions of this Agreement on
                  use and disclosure of Proprietary Information shall not apply
                  to information that:

                  (a)      is in the possession or control of the non-disclosing
                           party at the time of its disclosure hereunder;

                  (b)      is, or becomes, publicly known through no wrongful
                           act of non-disclosing party;

                  (c)      is received by non-disclosing party from a third
                           party free to disclose it without obligation to the
                           disclosing party; or

                  (d)      is independently developed by non-disclosing party
                           without the use of any Proprietary Information.

         7.4.     Term of Non-Disclosure. The restrictions set forth in this
                  Section 7 shall continue (i) with respect to the Trade Secrets
                  for as long as such information continues to be a Trade Secret
                  under applicable law, and (ii) with respect to Confidential
                  Information, during the term of this Agreement and for a
                  period of five (5) years from the date of its expiration or
                  termination.

         7.5.     Use of Customer Proprietary Information. Customer grants to
                  Emageon the non-exclusive right to use Customer's Proprietary
                  Information (including any data) obtained under this Agreement
                  for Emageon's internal purposes in order to perform the
                  Services and as otherwise set forth in this Agreement. Nothing
                  in this paragraph shall limit Emageon's obligations under this
                  Section 7 in any way.

         7.6.     Use of Enhancements, Discoveries, Processes. All customized or
                  custom computer software programs developed by Emageon at
                  Customer's request, and all materials furnished by Emageon in
                  conjunction with such programs, shall be the exclusive
                  property of Emageon, but Ascension Health and Ascension
                  Affiliates shall receive a license to use, copy and modify
                  them without any additional or incremental charges for their
                  internal purposes.

         7.7.     Confidential Information shall not include any protected
                  health information. Such information shall only be governed by
                  the terms of Exhibit D, the Business Associate Agreement

8.       CUSTOMER INDEMNIFICATION.

         8.1.     In addition to the other obligations of indemnification stated
                  herein, Customer will indemnify and hold Emageon and its
                  affiliates, officers, directors, employees, agents and
                  representatives harmless from and against all damages, costs,
                  expenses, and liabilities, including without limitation,
                  reasonable attorneys' fees and expenses, from any third party
                  claim of any kind against Emageon arising, in whole or in
                  part, from (a) Customer's negligence or willful misconduct
                  arising under this Agreement and (b) Customer's use of the
                  data accessed through the SYSTEM.

9.       EMAGEON WARRANTIES AND INDEMNIFICATION.

         9.1.     Emageon grants Customer the limited, nontransferable warranty
                  that the Services will be (i) performed in a workman-like
                  manner in accordance with normally accepted industry
                  standards, and (ii) performed by qualified personnel. If
                  Emageon fails to satisfy the foregoing warranty, then Customer
                  will notify Emageon in writing of such failure as soon as
                  reasonably practicable but in no event later than * * *
                  after completion of the Services.

         9.2.     Emageon represents and warrants that it either owns or has the
                  right to grant the rights set forth herein, and that the
                  Emageon Software does not infringe any third party copyright,
                  patents, trade secrets, or other proprietary rights,
                  enforceable in the United States. Emageon's sole liability for
                  any breach of the foregoing representations will be to
                  indemnify, defend, and hold Customer and its Eligible User
                  Population harmless from and against any and all losses,
                  damages, penalties, costs and expenses, including legal and
                  accounting fees, and to pay any final judgment or settlement
                  of any claim incurred or suffered by Customer which results
                  from or arises out of any claim or liability that the Emageon
                  Software infringes any third party copyright, patent, or other
                  proprietary rights enforceable in the U.S. or misappropriates
                  any third party trade secret enforceable in the U.S.
                  (individually, an "Indemnified

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                  Claim" and collectively, the "Indemnified Claims"). The
                  Indemnification set forth in this Section is contingent upon
                  Customer promptly notifying Emageon of an Indemnified Claim,
                  Emageon having the sole authority to defend or settle the
                  Indemnified Claim, and receiving the reasonable assistance of
                  Customer in connection therewith at Emageon's expense.
                  Notwithstanding the foregoing, Emageon will have no
                  indemnification obligation hereunder with respect to any claim
                  based on (i) use of the Emageon Software except in accordance
                  with this Agreement and Emageon's written instructions, (ii)
                  the combination of the Emageon Software with any other
                  software or hardware, unless as directed or approved by
                  Emageon (iii) modifications of the Emageon Software not made
                  by Emageon, or (iv) Customer's failure to implement changes
                  recommended by Emageon, that do not materially alter the
                  functionality or degrade performance of the SYSTEM, if the
                  infringement would have been avoided in the absence of such
                  combination, modifications or failure to implement recommended
                  changes. If the Emageon Software is finally determined by a
                  court of competent jurisdiction to constitute an infringement
                  of any third party patent, copyright or other proprietary
                  right enforceable in the U.S. or a misappropriation of a third
                  party trade secret and Customer's use of the SYSTEM is
                  enjoined, Emageon will either (i) procure the right for
                  Customer to continue to use the SYSTEM as contemplated
                  hereunder, or (ii) replace or modify the SYSTEM with a version
                  thereof that is not infringing and that does not materially
                  alter the functionality or degrade the performance of the
                  System. If a court of competent jurisdiction determines that
                  none of these alternatives is reasonably available, Customer
                  agrees that Emageon may terminate Customer's and its
                  employees' access to the SYSTEM in accordance with the
                  conversion and termination provisions as set forth by such
                  court. In the event of such termination, Emageon agrees to
                  refund License fees based on * * * and all other fees pre-paid
                  by Customer and unearned by Emageon on the date of final
                  determination by a court of competent jurisdiction of such
                  infringement. This Section states the entire liability of
                  Emageon with respect to infringement or misappropriation of
                  any third party Intellectual Property Rights by the Emageon
                  Software and Emageon will have no additional liability with
                  respect to any alleged or proven infringement. Emageon will
                  pass to Customer all appropriate warranties and
                  indemnification provisions from third-party suppliers.

         9.3.     In addition to the other obligations of indemnification stated
                  herein, Emageon will indemnify and hold Customer and its
                  affiliates, officers, directors, employees, agents and
                  representatives harmless from and against all damages, costs,
                  expenses, and liabilities, including without limitation,
                  reasonable attorneys' fees and expenses, from any third party
                  claim of any kind against Customer arising, in whole or in
                  part, from (a) Emageon's negligence or willful misconduct
                  arising under this Agreement and (b) Emageon's use of the data
                  accessed through the SYSTEM.

         9.4.     Emageon shall provide, at no charge to Customer, Customer with
                  updates or new versions to make the Software comply with: (i)
                  all generally applicable federally mandated regulatory changes
                  and state mandated changes; (ii) changes to the DICOM
                  standards or substitute standards generally adopted or
                  employed by the health care industry; (iii) changes to the HL7
                  standards or substitute standards generally adopted or
                  employed in the health care industry; and (iv) the general
                  adoption in the healthcare industry of any standard relating
                  to the creation, storage, transmission, or viewing of health
                  care images or data supported by the SYSTEM.

         9.5.     Emageon represents and warrants that the Software will be the
                  latest available releases, and that future releases and
                  engineering changes to the Software will not degrade
                  performance or remove functionality. Emageon warrants that the
                  SYSTEM will meet or exceed its published specifications.

         9.6.     Emageon represents and warrants that the Software as delivered
                  to Customer neither contains nor shall contain any "Disabling
                  Code" or "Unauthorized Code." As used in this paragraph the
                  term "Disabling Code" means any code, routine, or procedure
                  that has the effect of terminating or disabling execution of
                  the Software. As used in this paragraph, the term
                  "Unauthorized Code" means any virus, Trojan horse, worm, or
                  other code, routine, or procedure that (i) permits
                  unauthorized access to data, software, or systems; or (ii)
                  disables, erases, or otherwise damages software, hardware, or
                  data.

         9.7.     Emageon warrants and represents that the occurrence in or use
                  by the SYSTEM of any dates, including, without limitation, any
                  date with a year specified as "99" or "00," regardless of
                  other meanings attached to these values, and any date before,
                  on, or after January 1, 2000 ("Millenial Dates") will not
                  adversely affect its performance with respect to
                  date-dependent data, computations,

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<PAGE>

                  output, or other functions (including, without limitation,
                  calculating, comparing, and sequencing) and that the SYSTEM
                  will create, store, process, and output information related to
                  or including Millenial Dates without errors or omissions and
                  at no additional cost to Customer. At Customer's request,
                  Emageon will provide sufficient evidence to demonstrate the
                  adequate testing of the SYSTEM to meet the foregoing
                  requirements.

         9.8.     Emageon agrees to work with each Facility to establish a
                  mutually agreeable performance expectation for the speed of
                  accessing and viewing the first image on the client
                  workstation monitor ("Response Time Service Level"). In each
                  Order Addendum, the Facility and Emageon shall mutually agree
                  to criteria for monitoring and measuring the Response Time
                  Service Level as is appropriate for such Facility's
                  implementation. The variables for this speed shall include but
                  are not limited to workstation capabilities and LAN
                  specifications set forth in the respective Order Addendum. In
                  the event that Customer workstation performance falls below
                  the performance expectation, in accordance with the Order
                  Addendum, Emageon will evaluate the cause of such diminished
                  performance and, at its cost, implement necessary modification
                  to allow Customer to achieve the mutually agreed upon
                  performance level. If Customer wishes to implement changes to
                  the Site Survey Specifications as set forth in the Order
                  Addendum, then Emageon shall provide new workstation and LAN
                  specifications to Customer and continue to honor the Response
                  Time Service Level.

                  9.8.1.   Unless otherwise specified in the Order Addendum, the
                           Diagnostic Viewstation shall display the first image
                           of a fully processed, locally available, unread study
                           request within * * *. Provided, however, the
                           recommended specifications listed in the table below
                           are in place.

<Table>
<Caption>
---------------------------------------------------------------------------------
LOCAL AREA NETWORK                        RECOMMENDED
---------------------------------------------------------------------------------
<S>                                       <C>
Within PACS Computer Room                 100BaseT Switched
                                          Two 1000BaseT multi-media fiber modules
                                          with SC connection for Archive
---------------------------------------------------------------------------------
Backbone between PACS Computer Room       1000BaseT
and Radiology Department
---------------------------------------------------------------------------------
Modalities and CR Devices                 10BaseT or 100BaseT Switched
---------------------------------------------------------------------------------
Diagnostic Viewstations                   1000BaseT Switched
---------------------------------------------------------------------------------
Non Diagnostic and Web Viewing            100BaseT Switched
---------------------------------------------------------------------------------
Secure remote LAN access                  VPN for remote diagnostic users
---------------------------------------------------------------------------------
</Table>

                  Note: Diagnostic performance criteria above assumes compliance
                  with the recommended specifications for Diagnostic
                  Viewstation.

10.      CUSTOMER WARRANTY. Customer represents and warrants that: (i) Customer
         is the owner, valid licensee, or authorized user of all data provided
         to the SYSTEM and/or Emageon under this Agreement from whatever source;
         and (ii) the use of Customer's data by Emageon as set forth in this
         Agreement will not infringe the Intellectual Property Rights of any
         third party or constitute a misappropriation of any third party trade
         secrets, or constitute a defamation, invasion of privacy, or violation
         of any right of publicity or other third party right. Customer will
         indemnify and hold Emageon harmless from and against any and all
         losses, damages, penalties, costs and expenses, including legal and
         accounting fees, incurred or suffered by Emageon which result from or
         arise out of any claim or liability arising as a result of a breach of
         this Section.

11.      DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY INDICATED IN THIS
         AGREEMENT, NEITHER PARTY MAKES ANY EXPRESS OR IMPLIED WARRANTIES,
         CONDITIONS OR REPRESENTATIONS TO THE OTHER PARTY WITH RESPECT TO THE
         EMAGEON SOFTWARE, THE THIRD PARTY SOFTWARE, THE SYSTEM, THE SERVICES
         PROVIDED HEREUNDER, THE DATA, OR OTHERWISE, WHETHER ORAL OR WRITTEN,
         EXPRESS, IMPLIED OR STATUTORY. WITHOUT LIMITING THE FOREGOING, ANY
         IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY, THE IMPLIED WARRANTY
         OR CONDITION OF FITNESS FOR A PARTICULAR PURPOSE, AND THE IMPLIED
         WARRANTY OF NONINFRINGEMENT ARE EXPRESSLY EXCLUDED AND DISCLAIMED.

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12.      TERM AND TERMINATION.

         12.1.    The term of this Agreement shall commence on the Effective
                  Date and continue in effect for a period which shall expire
                  with the expiration of the last effective Order Addendum
                  executed hereunder. Each Order Addendum shall have an initial
                  term of sixty (60) months ("Order Addendum Initial Term") and
                  shall automatically renew for additional ninety (90) day
                  successive terms or of a length as agreed upon in writing by
                  both parties (each a "Renewal Term"), unless either party
                  provides written notice to the other party at least ninety
                  (90) days prior to the end of the then-current term of its
                  intent not to renew the term of such Order Addendum.

         12.2.    In the event that either party hereto materially breaches or
                  defaults in the performance of any of its duties or
                  obligations under the Agreement and does not substantially
                  cure such breach or default within thirty (30) days after
                  being given written notice specifying the breach or default,
                  then the non-breaching/defaulting party may, by giving written
                  notice thereof to the breaching/defaulting party, terminate
                  this Agreement as of a date specified in such notice of
                  termination which in no event shall exceed one hundred and
                  eighty (180) days after the notice is given. In the event that
                  Emageon terminates this Agreement or an Order Addendum due to
                  a Customer's material breach or default, or Ascension
                  terminates this Agreement or a Customer terminates its Order
                  Addendum for any reason other than Emageon's material breach
                  or default, all remaining but unpaid fees relating to such
                  terminated Order Addendum shall accelerate and become due and
                  payable within thirty (30) days of termination. If the
                  Agreement is terminated as a result of Emageon's breach, any
                  fees paid by Customer for products and services at the
                  individual Facility impacted by such breach but unearned by
                  Emageon should be refunded retroactively to the date of
                  Emageon's breach. This shall also apply to unearned License
                  fees paid by Customer for use of the Software at the
                  individual Facility impacted by such breach based on * * *.

         12.3.    Upon expiration of this Agreement or in the event of
                  termination of this Agreement by Customer for cause, Emageon
                  shall provide Customer one (1) year, or as mutually agreed by
                  both parties (the "Conversion Period"), Software Support and
                  Maintenance and other applicable Total Accountability Services
                  for the purpose of converting to a new system. After such
                  time, Emageon shall no longer have any obligation to provide
                  such support. During the Conversion Period, Emageon's support
                  fees shall be billed at the rate charged during the term
                  immediately prior to the expiration or termination of this
                  Agreement. Should Customer have terminated this Agreement
                  without cause or Emageon terminates the agreement for cause,
                  the aforementioned fees during the conversion period will be
                  increased by fifteen (15%) percent.

         12.4.    Upon expiration or termination of this Agreement, Emageon will
                  provide, at no charge to Customer, Customer's data on the
                  media on which the data were stored during the term of this
                  Agreement. If other transfer of image archive data format is
                  desired, Emageon will provide documented software programs
                  that will migrate image files from the SYSTEM to removable
                  media. The data will be stored in DICOM Part 10 files,
                  according to the DICOM 3.0 standard, in uncompressed or
                  compressed format or the then current DICOM standard format or
                  replacement thereto. Any other data migration or conversion
                  requested by Customer will be performed under a separate
                  agreement and will involve additional charges. Emageon
                  services, including telephone support, associated with
                  Customer data migration will be charged at the Professional
                  Service Rates.

         12.5.    Termination of this Agreement by either party pursuant to the
                  provisions of this Section 12 shall terminate each party's
                  obligations under this Agreement except for the provisions of
                  Sections 1 and 5-12, all of which shall survive termination of
                  this Agreement.

13.      LIMITED LIABILITY.

         13.1.    BOTH PARTIES AGREE THAT THE OTHER PARTY AND ITS AFFILIATES,
                  OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, AGENTS,
                  LICENSORS, OR REPRESENTATIVES WILL NOT BE LIABLE FOR ANY
                  INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY OR CONSEQUENTIAL
                  DAMAGES, INCLUDING BUT NOT LIMITED TO, DAMAGES OR COSTS
                  INCURRED AS A RESULT OF LOSS OF TIME, LOSS OF SAVINGS, LOSS OF
                  DATA, LOSS OF PROFITS, OR LOSS OF GOODWILL, WHETHER
                  FORESEEABLE OR UNFORESEEABLE, THAT
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                  MAY ARISE OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
                  INCLUDING, BUT NOT LIMITED TO, DAMAGES OR COSTS RESULTING FROM
                  THE USE OR INABILITY TO USE THE SYSTEM OR SERVICES, EVEN IF
                  SUCH PARTY HAS BEEN NOTIFIED OF THE POSSIBILITY OR LIKELIHOOD
                  OF SUCH DAMAGES OR COSTS OCCURRING, AND WHETHER SUCH LIABILITY
                  IS BASED ON CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY,
                  PRODUCTS LIABILITY OR OTHERWISE.

         13.2.    IN NO EVENT WILL THE COLLECTIVE LIABILITY OF EMAGEON AND
                  EMAGEON'S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
                  SHAREHOLDERS, AGENTS, LICENSORS OR REPRESENTATIVES FOR ANY
                  DAMAGES INCURRED BY CUSTOMER EVER EXCEED THE FEES PAID BY
                  CUSTOMER TO EMAGEON UNDER THIS AGREEMENT DURING THE * * *
                  PRIOR TO THE TIME AT WHICH THE DAMAGES AROSE REGARDLESS OF THE
                  FORM OF ACTION, WHETHER BASED ON CONTRACT, TORT, NEGLIGENCE,
                  STRICT LIABILITY, PRODUCTS LIABILITY OR OTHERWISE EXCLUDING
                  SUCH ACTIONS ARISING FROM EMAGEON'S INDEMNIFICATION
                  OBLIGATIONS, GROSS NEGLIGENCE OR THE INTENTIONAL MISCONDUCT OF
                  EMAGEON, ITS EMPLOYEES OR AGENTS.

         13.3.    THE FOREGOING LIMITATION OF LIABILITY AND LIMITATION OF
                  REMEDIES CONTAINED IN SECTIONS 13.1 AND 13.2 SHALL BE
                  INAPPLICABLE TO DAMAGE RESULTING FROM THE NEGLIGENCE OR
                  INTENTIONAL MALFEASANCE OF EMAGEON, ITS DIRECTORS, OFFICERS,
                  EMPLOYEES, AGENTS, AND SUBCONTRACTORS.

14.      NOTICES.

         14.1.    Any notice, approval, request, authorization, direction or
                  other communication under this Agreement shall be given in
                  writing and shall be deemed to have been delivered and given
                  for all purposes (i) on the delivery date if delivered
                  personally to the party to whom the same is directed; (ii) one
                  business day after deposit with a commercial overnight
                  carrier, with written verification of receipt, or (iii) five
                  business days after the mailing date whether or not actually
                  received, if sent by U.S. certified mail, return receipt
                  requested postage and charges pre-paid or any other means of
                  rapid mail delivery for which the receipt is available, to the
                  address of the party set forth below:

                  CUSTOMER:                    EMAGEON:

                  Ascension Health             Emageon UV, Inc.
                  4600 Edmundson Road          1200 Corporate Drive, Suite 400
                  St. Louis MO. 63134          Birmingham, AL 35242
                  Attn: General Counsel        Attn: Chief Financial Officer

15.      MISCELLANEOUS.

         15.1.    Force Majeure. In the event that either party's performance
                  (other than the payment of fees) is delayed, prevented,
                  obstructed or inhibited because of any act of nature, fire,
                  casualty, delay or disruption in transportation, flood, war,
                  strike, lockout, epidemic, destruction or shut-down of
                  facilities, shortage or curtailment, riot, insurrection,
                  governmental acts or directives, any full or partial failure
                  of any communications or computer network or any cause beyond
                  such party's reasonable control, the party's performance will
                  be excused and the time for the performance will be extended
                  for the period of delay or inability to perform resulting from
                  such occurrence. The occurrence of such event will not
                  constitute grounds for a declaration of default by either
                  Party.

         15.2.    Publicity. Ascension Health reserves the right to review and
                  approve any press release and/ or marketing materials Emageon
                  plans to issue regarding the execution of this Agreement or
                  written materials identifying Customer as a customer of
                  Emageon unless included in a listing of ten (10) or more
                  customers.

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         15.3.    Technical Advisory Councils. Emageon intends to implement
                  Domain specific Technical Advisory Councils by * * *. Examples
                  of domains include Radiology, Cardiology, and multi-vendor
                  Archives. These councils will be comprised of customer
                  representatives from selected users of Emageon products.
                  Ascension Health will be granted one seat on each Domain
                  Council for products which it has expressed interest.

         15.4.    Assignment. Neither party shall assign or transfer this
                  Agreement or any of its rights or obligations hereunder
                  without the prior written consent of the other, which consent
                  shall not be unreasonably withheld. This Agreement shall inure
                  to the benefit of and bind the parties' successors and
                  permitted assigns.

         15.5.    Waiver. The failure of either party to insist upon the
                  performance of any provision herein or to exercise any right
                  or privilege granted to it hereunder, will not be construed as
                  a waiver of such provision or any provisions herein, and the
                  same will continue in full force. The various rights and
                  remedies given to or reserved by either party herein or
                  allowed by law, are cumulative, and no delay or omission to
                  exercise any of its rights will be construed as a waiver of
                  any default or acquiescence, nor will any waiver of any breach
                  or any provision be considered a condonement of any continuing
                  or subsequent breach of the same provision.

         15.6.    Governing Law. The Agreement and the Services will be governed
                  by and interpreted in accordance with the internal laws of the
                  state of Missouri, excluding its conflict of law rules.

         15.7.    Interpretation. This Agreement sets forth the entire agreement
                  between the parties relating to the subject matter hereof, and
                  supersedes any and all prior agreements of the parties with
                  respect to the subject matter hereof.

         15.8.    Modification and Execution. No change, amendment or
                  modification of any provision of this Agreement shall be valid
                  unless set forth in a written instrument signed by the duly
                  authorized representatives of both parties. This Agreement may
                  be executed in counterparts, each of which shall be deemed an
                  original and all which together shall constitute one and the
                  same document. To the extent there is any conflict between
                  terms contained in the main body of this Agreement and the
                  exhibits to this Agreement, the terms contained in the
                  exhibits to this Agreement shall control. If any provision of
                  this Agreement shall be held to be illegal, invalid or
                  unenforceable, such illegality, invalidity or unenforceability
                  shall apply only to such provision and shall not in any manner
                  affect or render illegal, invalid or unenforceable any other
                  provision of this Agreement, and that provision and this
                  Agreement generally shall be reformed, construed and enforced
                  so as to most nearly give lawful effect to the intent of the
                  parties as expressed in this Agreement.

         15.9.    Regulatory Compliance. Emageon shall comply with the
                  provisions of the Administrative Simplification section of the
                  Health Insurance Portability and Accountability Act of 1996,
                  Public Law 104-91 ("HIPAA"), and the applicable requirements
                  of any regulations promulgated thereunder including without
                  limitation the federal privacy regulations as contained in 45
                  CFR Parts 160 and 164 (the "Federal Privacy Regulations"), as
                  and when such laws and regulations apply to Emageon in the
                  capacity of Business Associate of Customer. Such provisions
                  are set forth in the Emageon, Inc. Business Associate
                  Agreement attached hereto as Exhibit D.

         15.10.   Access to Books and Records. To the extent that Section 952 of
                  the Omnibus Reconciliation Act of 1980 ("Act") and the
                  regulations promulgated thereunder are applicable to this
                  Agreement, Emageon and the organizations related to it, if
                  any, performing any of the duties pursuant to this Agreement
                  valued at ten thousand dollars ($10,000.00) or more in any
                  twelve (12)-month period shall, until four (4) years after the
                  furnishing of Services pursuant to this Agreement, comply with
                  requests by the Comptroller General, the Secretary of Health
                  and Human Services, and their duly authorized representatives
                  for access (in accordance with Section 952 of the Act) to any
                  contract or agreement between Emageon and Customer for
                  Services and to any contract or agreement between Emageon and
                  such related organizations, as well as the books, documents,
                  and records of Emageon and its related organizations, if any,
                  which are necessary to verify the cost of the Services
                  provided.

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<PAGE>

         15.11.   Excluded Provider. Emageon hereby represents, and warrants
                  that it is not an excluded provider under the
                  Medicare/Medicaid programs ("Excluded Provider"). Furthermore,
                  in the event that Emageon is ever deemed to be an Excluded
                  Provider, Customer may terminate any and all payment
                  obligations to Emageon without resulting in a breach of the
                  Agreement and may terminate the Agreement without liability or
                  payment to Emageon. Any licenses granted hereunder to the
                  SYSTEM shall automatically convert to perpetual, royalty-free
                  licenses to use, copy, and modify such property for Customer's
                  internal use upon termination of the Agreement pursuant to
                  this Section 15.11. Emageon reserves the right of Assignment
                  as set forth in Section 15.4 so that its products and related
                  services may be transferred to a provider that is not
                  classified as Excluded.

         15.12.   Source Code Escrow. Within thirty (30) days after the
                  effective date of this Agreement, Emageon shall enter into a
                  software escrow agreement with the software escrow agent of
                  its choosing under terms and conditions to be approved in
                  advance by Ascension. Ascension shall be listed as a
                  beneficiary under the software escrow agreement. Within thirty
                  (30) days after each delivery of Software to Ascension
                  hereunder, Emageon shall provide to the software escrow agent
                  the "Deposit Materials" consisting of the source code for the
                  version of the Emageon Software delivered to Customer (the
                  "Source Code"), and all documentation necessary for the use
                  thereof. Emageon shall maintain all such Deposit Materials
                  with the software escrow agent in its most current version and
                  will deliver any revised Deposit Materials to the source code
                  escrow agent not later than thirty (30) business days after
                  any upgrade, version release, or any other change is effected
                  by Emageon. Customer shall be entitled to receive the Deposit
                  Materials upon the occurrence of one or more of the following
                  Escrow Events: (i) all or any material part of the Source Code
                  is generally made available by Emageon, with or without
                  additional cost, to other users of the Source Code; (ii)
                  Emageon ceases, for any reason, to do business; (iii) Emageon
                  is in default under this Agreement in whole or in part because
                  of its failure to maintain, or otherwise comply with its
                  obligations with respect to, the Deposit Materials; (iv) the
                  sale of all or substantially all of the assets of Emageon; (v)
                  bankruptcy, receivership, insolvency, reorganization,
                  dissolution, liquidation, or similar proceedings are
                  instituted by or against Emageon or all or any substantial
                  part of its property under any Federal or State law; or (vi)
                  other events, if any, defined in the source code escrow
                  agreement which permit the release of the Deposit Materials.
                  Upon occurrence of one or more of the foregoing Escrow Events,
                  Customer shall receive a perpetual, fully paid-up,
                  non-exclusive license to use and improve the Deposit
                  Materials, including the Source Code and documentation
                  therefore.

         15.13.   * * *

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<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives and made effective as of the Effective
Date.

ACCEPTED AND AGREED TO:              ACCEPTED AND AGREED TO:

Emageon:                             Customer:
EMAGEON UV, INC.                     Ascension Health

By: /s/ W. Randall Pittman           By: /s/ Anthony R. Tersigni
    ----------------------               --------------------------------------

Name: W. Randall Pittman             Name: Anthony R. Tersigni
      --------------------                 ------------------------------------

Its: CFO                             Its: Chief Operating Officer & Interim CEO
     ---------------------                -------------------------------------

                            EMAGEON ENTERPRISE AGREEMENT 03.25.04 PAGE 16 OF 59

<PAGE>

EXHIBITS

A.       Emageon Archive and Distribution System Implementation Services
B.       Emageon Support and Services
C.       Term and Fees
C.1      Terms and Fees - Detail
D.       Business Associate Agreement
E.       Emageon, Inc. Corporate Travel Guidelines
F.       Project Acceptance Process
G.       Adoption Success Management Services
H.       Emageon PACS Administrator Services
I.       Order Addendum
J.       Professional Services Rates
K.       Clinical Information Systems Vendors

                            EMAGEON ENTERPRISE AGREEMENT 03.25.04 PAGE 17 OF 59

<PAGE>

                                    EXHIBIT A

                     EMAGEON ARCHIVE AND DISTRIBUTION SYSTEM
                             IMPLEMENTATION SERVICES

PROJECT MANAGEMENT

Joint Responsibilities

Emageon and Customer are jointly responsible for the management of the project
and for providing the necessary resources to the project. To be effective in
achieving these objectives, the project management team will establish:

<Table>
<S>                                                     <C>
o   An agreed-upon baseline for scope, budget and       o   An approach for formally accepting project
    schedule                                                deliverables

o   A process for monitoring progress                   o   A definition of what constitutes project
                                                            completion
o   A communication protocol
                                                        o   Roles and responsibilities (Customer and Emageon)
o   An approach for dealing with issues
                                                        o   An approach for tracking and mitigating risk
o   A change control procedure
                                                        o   Training tools provided
</Table>

The following table provides a high level overview of the major and minor
milestones that are typically accomplished during an implementation upon
execution of an Order Addendum.

<Table>
<Caption>
              PHASE                              MILESTONES
-------------------------------     ----------------------------------------------------
<S>                                 <C>
* * *                               * * *
-------------------------------     ----------------------------------------------------
Adoption Communication Planning     o   Communication and training plan - developed and
                                        initiated
-------------------------------     ----------------------------------------------------
* * *                               * * *
-------------------------------     ----------------------------------------------------
* * *                               * * *
-------------------------------     ----------------------------------------------------
</Table>

Emageon Responsibility

Emageon will coordinate and assume lead responsibility for the installation and
integration of the SYSTEM. Emageon will lead and work closely with Customer to
accomplish the listed activities below:

<Table>
<S>                                   <C>
---------------------------------     ---------------------------------------------------
* * *                                 * * *
---------------------------------     ---------------------------------------------------
Workflow And Operating Procedures     Documentation Of System Configuration.

                                      Development Of Backup Strategy.

                                      Documentation Of Administrator And User Procedures.
---------------------------------     ---------------------------------------------------
</Table>

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<PAGE>

<Table>
<S>                                   <C>
---------------------------------     ---------------------------------------------------
System Installation                   Coordination Of System Installation Activities.

                                      Connection Of Remote DICOM Devices.

                                      Installation Of System.
---------------------------------     ---------------------------------------------------
Functional Testing                    Functional Testing Of System Components.
---------------------------------     ---------------------------------------------------
Administrator and End User            Train Administrator(s) On Routine Operation,
Training                              Maintenance, And Support Of System.
---------------------------------     ---------------------------------------------------
* * *                                 * * *
---------------------------------     ---------------------------------------------------
</Table>

Emageon will be the primary point of contact (POC) for all vendors providing
Emageon-supplied components and services. Customer will be POC for vendors
providing Customer-supplied components and services.

Customer Responsibilities (Details in Table A-4 - Site Readiness Survey)

o        Provide Available Personnel and Facilities According To Mutually Agreed
         Upon Installation And Implementation Schedule

o        Provide Necessary Working / Office Space

o        Provide Access To Facilities

o        Provide Necessary Communications Support - Telephone, Internet Access,
         Etc

o        Insure Customer-Provided Facilities, Information Systems and Modalities
         are prepared, maintained and operational for integration into the
         SYSTEM

o        Review Project Products Within A Given Time Frame

o        Participate In Technical Meetings

o        Deliver Information or Products To The Project

o        Provide a Dedicated System Administrator Relieved of Duties Not Related
         To The Implementation of The Emageon Solution

Customer will make personnel and facilities available according to a mutually
agreed upon schedule. In the event that activities must be rescheduled or
extended due to Customer's non-compliance with the agreed upon schedule,
Customer will bear the cost of rescheduling according to the then-current
professional service rates as specified in Exhibit J.

INSTALLATION ACCEPTANCE

The SYSTEM shall be deemed installed and accepted in accordance with Section
1.13 of this Agreement.

TRAINING

As applicable to the SYSTEM, * * *. As applicable to the SYSTEM, Emageon will
provide training for System Administrators, Diagnosticians, Technologists,
Physicians and applicable clinical staff. Emageon will provide refresher
training, as Customer deems necessary, with major upgrades to the SYSTEM.

System Administrator Training

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The system administrator(s) will receive * * * training on system components and
procedures. This training will help ensure that the administrator(s) are able to
perform routine administration tasks and serve as a knowledgeable point of
contact for Emageon support analysts and technicians. In addition, Emageon will
provide coaching support during the transition to service.

Diagnostician Training

Each diagnostician will receive training * * * on the use of the digital imaging
viewing technology deployed in the facility as part of the SYSTEM.

Technologist

For the Technologist(s) and other end users in the facility, Emageon shall
employ * * *.

Physician & Clinical Staff Training

A * * * shall be employed for training physician and clinical staff on the use
of digital imaging viewing technology deployed in the facility as part of the
SYSTEM.

TRANSITION TO SERVICE

Emageon will provide trained personnel to assist with the Transition to Service
of the SYSTEM. The SYSTEM will be deemed to have Transitioned to Service when
the agreed to tasks are complete.

Customer will make personnel and facilities available according to a mutually
agreed upon schedule. In the event that activities must be rescheduled or
extended due to Customer's non-compliance with the agreed upon schedule,
Customer will bear the cost of rescheduling according to the then-current
professional service rates.

TRAVEL AND LIVING EXPENSES

Customer shall pay or reimburse Emageon for any out-of-pocket expenses,
including, without limitation, travel and travel-related expenses in accordance
with Sections 5.3, 5.4, 5.5 and 5.8 of this Agreement.

CHANGE ORDER PROCESS

In the event there is a need to modify the scope of this Agreement, a change
order process will be utilized. All change orders, which will be detailed in
writing and typically include SYSTEM and Service changes, will define the scope
of such changes which are outside this Agreement. The Emageon POC and Customer
POC will work jointly in creation of the change order. Emageon will not process
nor begin such work until written Customer approval is received. All payment
terms with respect to the change order requests will be defined in the change
order document.

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<PAGE>

                                    EXHIBIT B

                           EMAGEON SUPPORT AND SERVICE

Emageon Services and related customer responsibilities are detailed below by
function. Customer shall perform the duties as assigned below.

GENERAL

Customer has full responsibility for hardware, software, and services that are
outside the scope of this Agreement. Customer must operate the equipment on an
ongoing basis, with software that has been approved by Emageon. Customer shall
not install any software or hardware on the SYSTEM without receiving prior
Emageon approval. Customer shall bear all expenses associated with Emageon
service in the event a SYSTEM issue is attributed to Customer installing
non-conforming hardware or software.

Emageon shall not be responsible for support of the SYSTEM if Customer modifies
the SYSTEM without Emageon's authorization.

CUSTOMER RESPONSIBILITIES

Customer shall be responsible for day-to-day operations of the SYSTEM, including
the equipment, preventative maintenance, operating systems and software
applications, and shall continue to provide first line support for the SYSTEM,
as set forth in the Agreement. Customer shall provide the necessary personnel to
meet its obligations under this section, with at a minimum, a dedicated,
full-time SYSTEM Administrator with the skills and experiences necessary to
perform the functions outlined below:

SYSTEM Administration

<Table>
<S>                                                 <C>
o   Points of Contact To Emageon On SYSTEM          o   Perform Daily, Weekly, and Monthly Routine
    Related Issues                                      Maintenance Procedures as Required

o   Day to Day Operations of SYSTEM                 o   Perform Backup / Disaster Recovery Procedures,
                                                        Including Off-Site Storage
o   Monitor Image Workflow and Procedures
                                                    o   Perform File System Checks
o   Archiving / Routing / Pre-Fetching
                                                    o   Manage / Size / Tune Storage Parameters
o   Correcting Broken Studies
                                                    o   Run Performance Tools
o   Editing Patient Demographics
                                                    o   Manage System Utilities / Generate Reports
o   Monitoring HIS / RIS Interface
                                                    o   Monitor and Insure SYSTEM Security Procedures
o   Monitor / Track System Performance                  are Being Followed

o   Conduct Component / System Training             o   Maintain Site and Environment per Specifications

o   SYSTEM Troubleshooting / Attempt Repair         o   Coordinate New Modality Integration (Post
                                                        System Acceptance)
o   Assisting With Upgrades and Remote Repairs

o   Document Issues Identified by End Users
</Table>

Network Administration

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<PAGE>

o  Configure and Manage Network Settings

o  Monitor / Analyze / Tune Network Infrastructure

Preventative Maintenance

Customer will perform daily and monthly routine maintenance procedures and
maintain the associated logbook of training provided at the time of
installation. These procedures include verification of automated daily backups
of the database and hierarchical storage management file structure and removal
of backup/disaster recovery copies of tapes to remote sites.

Customer will provide a location for off-site, waterproof, and fireproof storage
of back-ups and disaster recovery copies of data, databases, protocols and user
preferences.

EMAGEON SYSTEM AVAILABILITY

Guaranteed Emageon SYSTEM Availability

1.       Emageon SYSTEM Availability is defined as the ability to archive,
         distribute and view medical image data and interface with other
         information systems. The Guaranteed Emageon System Availability will
         become effective after the Emageon SYSTEM has been accepted at each
         Facility as provided for in the Implementation Plan.

2.       Emageon SYSTEM Availability is measured * * *, commencing with the
         date of SYSTEM Acceptance and ending * * *.

3.       If the Emageon SYSTEM is unavailable for more than * * * then the
         affected Facility shall receive a credit * * *, to be applied to * * *,
         equal to * * *. If the Emageon SYSTEM is unavailable for more than
         * * *, then the affected Facility shall receive a credit * * *, to be
         applied to * * *, equal to * * *.

4.       If the Emageon SYSTEM is unavailable for more than * * * during a
         * * *, commencing from the SYSTEM Acceptance and measured thereafter
         * * *, then such Facility may terminate the Agreement as it applies to
         such Facility without penalty or additional charge ("Service Level
         Failure Termination"). Further, if the Emageon SYSTEM is unavailable
         for more than * * * during a * * *, commencing from the SYSTEM
         Acceptance and measured thereafter * * *, then such Facility may
         terminate the Agreement as it applies to such Facility without penalty
         or additional charge ("Service Level Failure Termination").

5.       The measurement for downtime will begin upon Customer providing notice
         to Emageon of the SYSTEM unavailability, as required in this Exhibit B,
         and will end upon the availability of the Emageon SYSTEM.

6.       Scheduled maintenance and upgrades will not count as Emageon Software
         downtime. Scheduled maintenance and upgrades will be scheduled at least
         one week in advance and not exceed * * *. The foregoing limitations and
         restrictions on scheduled maintenance and upgrades may be waived or
         extended by mutual written agreement of Customer and Emageon.

7.       Customer shall have full responsibility for Guaranteed Hardware
         Availability. Hardware downtime will not count against Emageon Software
         downtime unless such downtime was caused by the Emageon Software. Any
         Hardware down time events, which cause the Emageon Software to fail,
         will not count against non-scheduled Emageon Software downtime. In the
         event a Hardware downtime occurs, thereby causing the Emageon Software
         to fail, whether planned or not, all time, materials and expenses
         involved with Emageon's support of such down time event, shall be
         billed separately to Customer at Emageon's then current Professional
         Service fees.

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<PAGE>

8.       Remedies provided for in this Exhibit are acknowledged and agreed to
         serve as liquidated damages and not penalties.

Guaranteed Component Availability

         1.       Components are defined as equipment or software within the
                  SYSTEM that acquire, archive, distribute, and allow viewing of
                  medical image data (e.g. a DICOM Interface Box or a DICOM
                  Viewstation) and interface with other information systems. A
                  Component is unavailable if it cannot perform its design
                  function at rated capacity. The Guaranteed Component
                  Availability will become effective after the SYSTEM has been
                  accepted.

         2.       Component Availability is measured * * * assuming 365 days x
                  24 hours per day of operation each year.

         3.       Component downtime resulting in SYSTEM downtime will count
                  only toward the cumulative SYSTEM downtime.

         4.       If an Emageon Component is unavailable for * * *, then the
                  Facility shall receive a credit for such * * *, to be applied
                  to the subsequent * * * billings, equal to * * * of the * * *
                  Software Maintenance and Support Fee, for each unavailable
                  Component.

         5.       The measurement for Component downtime will begin upon
                  Emageon's receipt of notification, as required in this Exhibit
                  B, and will end upon the restoration of Component
                  Availability.

         6.       Scheduled maintenance and upgrades will not count as Component
                  downtime. These functions will be scheduled by mutual
                  agreement.

EMAGEON RESPONSIBILITY

Emageon will provide SYSTEM Updates to the SYSTEM during the term of this
Agreement. These updates will be scheduled in advance at a time agreed to be
mutually acceptable. Emageon will provide refresher training as Emageon deems
necessary for SYSTEM Updates.

Emageon will provide SYSTEM Upgrades. Such upgrades shall be designed and
delivered at Emageon's sole discretion. These upgrades will be scheduled in
advance at a time agreed to be mutually acceptable.

Emageon will act as primary point of contact for all third-party products
comprising the SYSTEM.

Computed Radiography Plates

CR Cassette Plates are consumable products. Emageon warrants that the CR
Cassette plates that are included in the original CR purchase will be free from
defects for a period of ninety days after Installation Acceptance.

EMAGEON SERVICE SUPPORT

The Customer Technical Points of Contact (as designated in the respective Order
Addendum), will be the primary contact for all Customer users to report problems
associated with the equipment. The Customer Technical Points of Contact shall
notify Emageon of the existence of the problem by telephone and the parties
shall mutually classify each problem with a severity level using the criteria
set forth below. All contact to Emageon should be through the Emageon Service
Support line at 1-866-Emageon, option 4. Upon entry of the service ticket and
classification of the severity level, Emageon shall communicate to the Technical
Points of

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<PAGE>

Contact the ticket entry and classification. To the extent the Technical Points
of Contact, in their reasonable opinion, disputes the severity level assigned,
such Technical Points of Contact may contact Emageon to reclassify the incident
to a different severity level. If an incident is reclassified, due to such
reasonable dispute, by the Technical Points of Contact the response time
expectation for such incident shall be the earlier of: (i) the designated
response time for the original severity level classification from the time and
date of the original incident ticket; or (ii) the designated response time for
the new severity level classification from the time and date of notice of
reclassification by the Technical Points of Contact.

Emageon standard service support is between the hours of 8 AM - 5 PM Central
time, Monday-Friday, excluding major holidays. Major Holidays include New Years
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the day after
Thanksgiving, Christmas Eve, Christmas Day and New Years Eve. Emergency
telephone support will be available after standard hours, on weekends and
holidays, seven days a week. Emergency response times will target * * * or less
from first call for Severity Level 4 - Critical Problems, and * * * or less from
first call for all other levels. * * *.

Emageon service engineers will provide remote support for the SYSTEM via
telephone and virtual private networks. The assigned service engineer will
provide timely and periodic feedback to Customer regarding the progress being
made in resolving the issue. As determined by Emageon, Emageon will provide
on-site support to resolve service issues. Once Emageon determines that on-site
support is required, Emageon will use its best efforts to place a qualified
individual on-site within * * *.

Upon notification, Emageon is responsible for any errors in the Emageon
Software. To the extent that an error is the result of third party Hardware or
Software, Emageon will use it's best efforts to resolve the issue. If the issue
is determined to be caused by the Customer, additional fees may apply at the
Professional Service Rates.

EMAGEON SUPPORT AND ESCALATION PROCEDURES

Support.

Upon receipt of notice from Customer, Emageon shall implement the
Support/Escalation Procedures described herein to ensure that appropriate
Emageon attention is given to Customer requests for support.

Severity Level 4 - Critical Problems.

The System or a significant component of the System is experiencing problems
which: (i) cause it to stop completely;(ii) materially degrade performance such
that Customer operations are in jeopardy;. Emageon shall provide telephone
response by a qualified technician within the Initial Response Time for Severity
Level 4 - Critical Problems as defined below. Within the Initial Response Time,
qualified personnel shall work to resolve the problem or condition. Emageon
personnel shall continue to work diligently until the problem is resolved.
Emageon shall demonstrate to Customer its good faith and diligent initiation and
prosecution of corrective measures. Emageon shall document the notification of
the problem, the severity level, the relevant circumstances and symptoms, and
the steps taken to diagnose the problem. Emageon shall take all necessary steps,
in its sole discretion, to resolve the problem promptly, and shall document such
corrective actions. If the problem condition is not resolved within the Target
Resolution Timeframe, Emageon shall dispatch expert on-site assistance to
Customer within * * *, as reasonably required. The response times applicable to
Severity Level 4 - Critical Problems is as follows:

Initial Response Time                  * * *
Target Resolution Timeframe            * * *

Severity Level 3 - Serious or High Impact Problems.

The System is experiencing problems that cause a serious or high impact to the
SYSTEM. These problems are never enough to limit the use of the entire System,
meaning workarounds exists (If the Technical Points of

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<PAGE>

Contact are not satisfied with the timeliness of a workaround, they may escalate
the incident to a Severity Level 4), but if the issue is not resolved within the
Targeted Resolution time, it would escalate to a Severity 4 - Critical Problem.
Emageon shall provide telephone response by a qualified technician within the
Initial Response Time for Severity Level 3 - Serious Problems as defined below.
Within the Initial Response Time, qualified personnel shall work to resolve the
problem or condition. Emageon personnel shall continue to work until the problem
is resolved. Emageon shall demonstrate to Customer its good faith and diligent
initiation and prosecution of corrective measures. Emageon shall document the
notification of the problem, the severity level, the relevant circumstances and
symptoms, and the steps taken to diagnose the problem. Emageon shall take all
necessary steps, in its sole discretion, to resolve the problem promptly, and
shall document such corrective actions. If the problem condition is not resolved
within the Target Resolution Timeframe, Emageon may, at its sole discretion,
dispatch expert on-site assistance to Customer. Mutually agreed upon temporary
fixes or workarounds, if available, will be implemented until a permanent
resolution is provided. The response times applicable to Severity Level 3 -
Serious Problems is as follows:

Initial Response Time                  * * *
Target Resolution Timeframe            * * *

Severity Level 2 - Impaired or Medium Impact Problems.

The System is experiencing problems that cause minor applications, functions or
features to fail to operate. The problem is severe enough to limit the
usefulness of the affected part of the System, but does not hamper the rest of
the System's usefulness. Emageon shall provide telephone response by a qualified
technician within the Initial Response Time for Severity Level 2 - Impaired or
Medium Impact Problems as defined below. Mutually agreed upon temporary fixes or
workarounds, if available, will be implemented until a permanent resolution is
provided. If the problem has not been fully resolved within the Target
Resolution Time Frame as defined below, the issue will escalated to Severity 3 -
Serious Problem. The response time applicable to Severity Level 2 - Medium
Impact Problems is as follows:

Initial Response Time                  * * *
Target Resolution Timeframe            * * *

Severity Level 1 - Minor or Low Impact Problems.

The System is experiencing problems that cause minor irritations but do not
inhibit the usefulness of the System or Products. Emageon shall evaluate and
prioritize the problem. Severity Level 1 -Low problems will be resolved as
mutually determined by both parties.

Conditions.

Conditions that apply to the problem resolution process are:

(a)      All response times will be achieved at a rate of no less than * * * of
         the time, as measured over no less than * * * period.

(b)      Software products which are not produced by Emageon, but are components
         of the System, will be handled in the same manner. However, time to
         resolve a problem may vary depending upon the response by that third
         party vendor. Under no circumstances will Emageon be responsible for
         penalties or liabilities as a result of third party software failure.

(c)      Customer may not revise any Initial Response Time or Target Resolution
         Timeframes; however, if the problem results in the interruption of
         Customer's business operations, Emageon will dispatch expert on-site
         assistance to Customer at Customer's request, provided this is the most
         expedient means to resolve the problem as determined by mutual
         agreement of both Customer and Emageon.

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<PAGE>

Emageon may revise the process and procedures by which it records, responds to
and resolves issues for Customer, provided such revisions provide general
improvements to either the speed or efficiency with which problems are
corrected.

ROUTINE MAINTENANCE

Emageon will perform remote SYSTEM verification tests on a regular basis to
monitor Hardware and Software performance and capacity.

SUPPORT AND SERVICE RATES OUTSIDE THE SCOPE OF THIS AGREEMENT

All service and support rates for services at Customer's request, and that are
outside the scope of this Agreement, will be billed at the Professional Services
Rates. In all cases, travel and lodging are billed separately.

                            EMAGEON ENTERPRISE AGREEMENT 03.25.04 PAGE 26 OF 59

<PAGE>

                                    EXHIBIT C

                                  TERM AND FEES

            SOFTWARE, SUPPORT & MAINTENANCE AND PROFESSIONAL SERVICES

Ascension Health commits to execute site-specific Order Addendums covering the
committed minimum software, support and maintenance and professional services
fees indicated below no later than the following time periods shown below based
on the pricing and terms included in this Exhibit C (the periodic commitments
shown below are cumulative spending thresholds to be achieved by the indicated
dates taking into account spending by Customer during the entire term of the
Agreement prior to such date). In the event that Customer does not execute
Order Addendums such that the committed total fee for a particular date as
outlined below is not reached, Customer shall pay to Emageon, in accordance
with Section 5 of this Agreement, the difference between the actual dollar
amounts as set forth for Ultrastructure software fees, Ultravisual software
fees, and Implementation, modality integration and ASM fees in Table 1C which
amounts shall be held by Emageon as credits to be applied to future Customer
Order Addendums.

                      Table 1C: Ascension Commitment Table
<Table>
<S>                                                                <C>
* * *                                                                  6/30/06
-------------  -----------  -----------  -----------  -----------  -----------
Total                                                              $25,066,000
-------------  -----------  -----------  -----------  -----------  -----------
</Table>

The pricing set forth in this Agreement is based upon a target of * * * average
annual study volume being achieved by June 30, 2006.

Sixty (60) days prior to the commitment dates listed above (see Table 1C);
Emageon will provide to Customer documentation that compares the total of the
Order Addendums that have been executed at that time to the commitment listed in
Table 1C. Customer may use the aforementioned sixty (60) day period to cure the
committed amounts described in Table 1C.

The study volume and fee commitments listed in Table 1C above are in part based
on the deployment of the Emageon SYSTEM in * * *. Terms and fees associated with
added or substituted Facilities will be computed based on the terms and fees
included in Exhibit C.1.

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 27                       Confidential

<PAGE>

Customer agrees to make payments to Emageon as described below upon execution of
each Order Addendum by the ministries.

EMAGEON SOFTWARE (ULTRASTRUCTURE AND ULTRAVISUAL):

* * *

EMAGEON SOFTWARE SUPPORT AND MAINTENANCE:

* * *

EMAGEON PROFESSIONAL SERVICES:

* * *

THIRD PARTY HARDWARE:

If the Customer acquires Hardware from Emageon, Customer shall pay Emageon for
the Hardware as follows:

o        * * * of the Hardware fees shall be invoiced on the date the Hardware
         is delivered, and the invoice shall be due and payable within ten (10)
         business days.

o        * * * of the Hardware fees shall be invoiced upon acceptance of the
         Hardware by the Licensee, and the invoice shall be due and payable
         within ten (10) business days.

o        In the event of a partial Hardware shipment and upon mutual agreement
         by the parties, Licensor may invoice Licensee on that partial shipment.
         Provided, however, that the amount of this partial invoice shall be
         exclusively for the items contained in that partial shipment.

o        At the time Hardware is ordered by Emageon, Emageon shall provide
         Ascension Health Treasury with a detailed listing of ordered Hardware.
         Emageon shall provide Ascension Health Treasury with copies of all
         Hardware invoices for each Facility and Emageon shall also provide, as
         an attachment to the invoice, the details of what has been delivered to
         the Facility.

o        All Hardware, which is unpackaged, shall be considered "used hardware"
         and shall not be returned unless such Hardware has failed Hardware
         Installation Acceptance.

THIRD PARTY VENDED SERVICES:

o        Shall be due monthly beginning at Installation Acceptance

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 28                       Confidential

<PAGE>

                                   EXHIBIT C.1

                             TERM AND FEES - DETAILS

SPECIAL PRICING

The following Special Pricing shall apply to all Ascension Health Ministries
contracting under the Ascension and Emageon Enterprise Agreement.

           EMAGEON ULTRASTRUCTURE (ARCHIVE AND DISTRIBUTION) SOFTWARE

Ultrastructure Software is currently priced on a "per study" and total volume
basis. The projected volumes as set forth in Attachment C of the individual
Facility supplement are used to calculate the Archive and Distribution Software
Fees for each Facility. The Ascension price reflects a per tier discount that
ranges from 27% - 64% of the Standard Price.

         TABLE 1: ULTRASTRUCTURE - LICENSE FEE PRICING CALCULATION TABLE

<Table>
<Caption>
AVERAGE ANNUAL STUDY VOLUME     STANDARD PRICE      ASCENSION PRICE
---------------------------     --------------      ---------------
<S>                             <C>                 <C>
     10,000-14,999                  $3.95                 * * *
---------------------------     --------------      ---------------
     15,000-19,999                  $3.16                 * * *
---------------------------     --------------      ---------------
     20,000-24,999                  $2.80                 * * *
---------------------------     --------------      ---------------
     25,000-32,499                  $2.75                 * * *
---------------------------     --------------      ---------------
     32,500-39,999                  $2.54                 * * *
---------------------------     --------------      ---------------
     40,000-47,499                  $2.31                 * * *
---------------------------     --------------      ---------------
     47,500-54,999                  $2.10                 * * *
---------------------------     --------------      ---------------
     55,000-64,999                  $2.00                 * * *
---------------------------     --------------      ---------------
     65,000-74,999                  $1.94                 * * *
---------------------------     --------------      ---------------
     75,000-89,999                  $1.81                 * * *
---------------------------     --------------      ---------------
     90,000-104,999                 $1.70                 * * *
---------------------------     --------------      ---------------
    105,000-174,999                 $1.57                 * * *
---------------------------     --------------      ---------------
    175,000-264,999                 $1.25                 * * *
---------------------------     --------------      ---------------
    265,000-374,999                 $0.98                 * * *
---------------------------     --------------      ---------------
    375,000-504,999                 $0.88                 * * *
---------------------------     --------------      ---------------
        505,000+                    $0.76                 * * *
---------------------------     --------------      ---------------
</Table>

            * * * ANNUAL MAINTENANCE FEES*

* To commence on the first anniversary of the date of Installation Acceptance.

ULTRASTRUCTURE SOFTWARE INCLUDES THE FOLLOWING:

     1.   Emageon Enterprise DICOM Storage & Archive Manager Software

     2.   Emageon Enterprise Integration Software (price included with HL7 &
          MWL)

     3.   Emageon Intelligent Content Distribution Manager

     4.   Emageon High-Availability (HA) Software

     5.   Modality Worklist Manager

     6.   HL7 Reliable Delivery Manager (Reliable Store and Forward)

     7.   JPEG 2000 DICOM Transfer Syntax Support

     8.   Primary Image Server Software (runs on Emageon Linux Servers)

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 29                       Confidential

<PAGE>

TO CALCULATE THE UPFRONT PERPETUAL LICENSE FEE FOR THIS PURCHASE:

STEP 1: Divide total study volume over five years by 5 to get an average annual
study volume (Example: 1,000,000 total studies over 5 years / 5 years = 200,000
average studies per year)

STEP 2: Using the average annual study volume locate the appropriate tier in
Table 1 (Example: * * *)

STEP 3: Multiply the tier rate in Table 1 by the total number of studies over 5
years to give you the total Emageon Ultrastructure perpetual software license
cost (Example: * * *)

TO CALCULATE THE ANNUAL SUPPORT AND MAINTENANCE FEE FOR THIS PERPETUAL LICENSE:

The Annual Support and Maintenance fee shall be calculated by multiplying the
perpetual license fee by * * *. After the first year of Annual Support and
Maintenance Fees, the Annual Support and Maintenance fees may be increased to
reflect the annual percentage increase in the CPI.

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 30                       Confidential

<PAGE>

                 EMAGEON ENTERPRISE DICOM CACHE MANAGER SOFTWARE

Emageon Enterprise DICOM Cache Manager Software is currently priced on a "per
study" and total volume basis. The projected volumes as set forth in Attachment
C of the Order Addendum are used to calculate the Archive and Distribution
Software Fees for each Facility. The Ascension price reflects a per tier
discount that ranges from 36% - 64% of the Standard Price.

      TABLE 1A: ULTRASTRUCTURE - DICOM CACHE MANAGER - LICENSE FEE PRICING
                               CALCULATION TABLE

<Table>
<Caption>

AVERAGE ANNUAL STUDY VOLUME     STANDARD PRICE     ASCENSION PRICE
---------------------------     --------------     ---------------
<S>                             <C>                <C>
       10,000-14,999                 $1.97             * * *
---------------------------     --------------     ---------------
       15,000-19,999                 $1.58             * * *
---------------------------     --------------     ---------------
       20,000-24,999                 $1.40             * * *
---------------------------     --------------     ---------------
       25,000-32,499                 $1.38             * * *
---------------------------     --------------     ---------------
       32,500-39,999                 $1.27             * * *
---------------------------     --------------     ---------------
       40,000-47,499                 $1.15             * * *
---------------------------     --------------     ---------------
       47,500-54,999                 $1.05             * * *
---------------------------     --------------     ---------------
       55,000-64,999                 $1.00             * * *
---------------------------     --------------     ---------------
       65,000-74,999                 $0.97             * * *
---------------------------     --------------     ---------------
       75,000-89,999                 $0.91             * * *
---------------------------     --------------     ---------------
      90,000-104,999                 $0.85             * * *
---------------------------     --------------     ---------------
      105,000-174,999                $0.78             * * *
---------------------------     --------------     ---------------
      175,000-264,999                $0.63             * * *
---------------------------     --------------     ---------------
      265,000-374,999                $0.51             * * *
---------------------------     --------------     ---------------
      375,000-504,999                $0.44             * * *
---------------------------     --------------     ---------------
          505,000+                   $0.38             * * *
---------------------------     --------------     ---------------
</Table>

* * * ANNUAL MAINTENANCE FEES*

* To commence on the first anniversary of the date of Installation Acceptance.

Emageon Enterprise DICOM Cache Manager Software supports all features of the
Emageon Enterprise DICOM Archive Manager Software and includes the following:

1.       Serves as a local access point for a remote archive

                  May extend access from imaging center to hospital

                  May extend access from hospital to data center

2.       Addresses distributed archiving environments

                  Provides the benefits of a centralized archiving solution

                  Provides performance of a local, dedicated archive

                  Provides local access in the event of WAN failure

                  Caches recently acquired / retrieved information locally

                  Reduces WAN bandwidth requirements / telecom costs

3.       Proxy Service

                  Provides transparent access to remote information

                  Provides a full view and access to the enterprise archive
                  subsystem

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 31                       Confidential

<PAGE>

                  Includes access to Legacy archives on the network

4.       Deletor Strategy Services

                  Least Recently Used (LRU)

                  Least Recently Written (LRW)

                  No Deletion Strategy

                  Study Deletion Veto Strategy

                  High/Low Water Mark thresholds

5.       Extends capabilities of the Enterprise DICOM Archive Manager Software

6.       Transparent access to all data (location transparency)

                          EMAGEON ULTRAVISUAL SOFTWARE

Advanced Visualization tools are currently priced on a "concurrent user" basis.
The Emageon Advanced Visualization Software perpetual license fees for
Diagnostic and Clinical Workstation software at each Facility shall be
calculated by multiplying the number of concurrent users for the respective type
of workstation as set forth in Attachment B of the individual Order Addendum by
the appropriate Emageon Advanced Visualization Software fee set forth below. The
Emageon Advanced Visualization Software perpetual license fees as set forth
below reflect a 20% discount from list price. If a Facility wishes to add
concurrent users after the initial term has begun, the associated fees must be
paid up-front.

<Table>
<S>                                                                         <C>
1.       EMAGEON ADVANCED DIAGNOSTIC WORKSTATION SOFTWARE                   $  * * *

2.       EMAGEON ADVANCED CLINICAL WORKSTATION SOFTWARE                     $  * * *

3.       EMAGEON ADVANCED WEB CONTROLLER AND SOFTWARE (unlimited users)     $  * * *
</Table>

                   ULTRAVISUAL ANNUAL SERVICE AND SUPPORT FEE

Annual Service and Support fee is * * * of the Discounted License Fee for the
Ultravisual Software. The Annual Service and Support fee shall commence on the
first anniversary of the date of Installation Acceptance.

                  INSTALLATION AND ADOPTION SUCCESS MANAGEMENT

Implementation and Adoption Success service fees are currently priced as a one
time charge. These fees are set forth below in Table 1B of this Exhibit C.
Additionally, in no case, during the Term of this Agreement, shall the
Implementation and Adoption Success Management fees exceed those as set forth
below except that such pricing shall be adjusted to reflect the annual
percentage increase set forth in the CPI for the 12 months immediately preceding
the effective date of the increase and shall be added to such fees beginning in
Year 2 of this Agreement.

Computed Radiography (CR) implementation will require additional charges.

1.       TECHNICAL IMPLEMENTATION FOR ARCHIVE AND DISTRIBUTION INFRASTRUCTURE

         (Price per Archive Storage Manager as set forth in Attachment B of the
         individual site supplement)

2.       TECHNICAL IMPLEMENTATION FOR CACHE ARCHIVE AND DISTRIBUTION UNIT

         (Price per Facility Image Cache as set forth in Attachment B of the
         individual site supplement)

3.       TECHNICAL IMPLEMENTATION FOR PRIMARY IMAGE SERVER SOFTWARE

         (Price per facility)

4.       STANDARD ASCENSION ADOPTION SUCCESS MANAGEMENT IMPLEMENTATION

         (Price per facility and duties of both parties as set forth in
         Exhibit G)

5.       MODALITY INTEGRATION FEE

         (Price per modality)

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 32                       Confidential

<PAGE>

                        TOTAL ACCOUNTABILITY SERVICE FEE

Emageon shall provide Total Accountability Services as defined in Section 1.29
of this Agreement. These fees are set forth below in Table 1B of this Exhibit C.
Additionally, in no case, during the Term of this Agreement, shall the Total
Accountability Service fees exceed those as set forth below except that such
pricing shall be adjusted to reflect the annual percentage increase set forth in
the CPI for the twelve months immediately preceding the effective date of the
increase and shall be added to such fees beginning in Year 2 of this Agreement.

1.       EMAGEON TOTAL ACCOUNTABILITY SERVICE

         (Price per facility per year)

                             PACS ADMINISTRATOR FEE

Emageon shall provide, at Customer's option, PACS Administrator(s) to provide
the services as set forth in Exhibit H. The PACS Administrator Fees are set
forth below in Table 1B of this Exhibit C. The fees for the PACS Administrator
may be adjusted by mutual agreement to reflect the prevailing market rate for
such services.

1.       ON-SITE PACS ADMINISTRATOR ANNUAL CHARGE

         (Price per PACS Administrator)

If Customer chooses to provide their own PACS Administrator, then Customer
agrees to send their PACS Administrator through Emageon's PACS Administrator
training and certification process. Customer shall be responsible for their
travel related expenses.

<Table>
<S>                                                                    <C>
1.       CUSTOMER PACS ADMINISTRATOR TRAINING CHARGE - YEAR 1            $20,000

         (Price per PACS Administrator Trainee)

2.       CUSTOMER PACS ADMINISTRATOR TRAINING CHARGE - YEAR 2-5          $ 4,500

         (Price per PACS Administrator Trainee per year)
</Table>

Emageon Enterprise Agreement       Page 33                       Confidential

<PAGE>

                          EMAGEON PROFESSIONAL SERVICES

Emageon Professional Services are currently priced on a "per study tier" and
unit basis. The projected volumes as set forth in Attachment C of the individual
Order Addendum are used to calculate the appropriate per study tier and the
applicable Professional Services Fees for each Facility. The prices listed below
reflect discounts that ranges from 57% - 90% of the Standard Price.

EXPLANATION OF PRICES LISTED IN TABLE 1B:

ARCHIVE IMPLEMENTATION FEE (Price per Archive Storage Manager as set forth in
Attachment B of the individual Order Addendum)

CACHE IMPLEMENTATION FEE (Price per Facility Image Cache as set forth in
Attachment B of the individual Order Addendum)

IMAGE SERVER IMPLEMENTATION FEE (Price per facility)

ADOPTION SUCCESS MANAGEMENT FEE (Price per facility and duties of both parties
as set forth in Exhibit G)

MODALITY INTEGRATION FEE (Price per modality)

TOTAL ACCOUNTABILITY FEE (Price per facility per year)

PACS ADMINISTRATION FEE (Price per PACS Administrator per year)

        TABLE 1B - ASCENSION PROFESSIONAL SERVICES - PER TIER PRICE TABLE

* * *

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 34                       Confidential

<PAGE>

                    THIRD PARTY HARDWARE AND VENDED SERVICES

Emageon resells hardware (i.e., servers, storage, computed radiography devices,
DICOM conversion boxes) and Vended Services and Third Party Software to support
Emageon Software. Emageon will price all Hardware and Vended Services to
Ascension Ministries at a * * * markup to Emageon's cost. Customer may acquire
IBM and other hardware from a third party; provided, however, that the hardware
purchased must be in accordance with Emageon specifications for warranty and
service purposes. Furthermore, Customer agrees to grant Emageon a right to bid
on purchases of PACS Hardware and Vended Service to be purchased by Committed
Facilities as defined herein on or before * * *. For purposes of this paragraph,
Committed Facilities means any Facilities that are: (i) part of the following
Ascension Ministries: * * *; and (ii) any Facility that is listed in an executed
Order Addendum.

                                 FUTURE PRODUCTS

The contents of the Emageon Software as defined above, represent the full
functionality of the Emageon Software being sold to Customer under this
Agreement. Notwithstanding, System Upgrades and Updates as defined in this
Agreement, and covered under the Software Support and Maintenance fees, the
parties agree that any future, new product offerings are not covered under this
Agreement and will be sold separately and then negotiated rates.

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 35                       Confidential

<PAGE>

                                    EXHIBIT D

                          BUSINESS ASSOCIATE AGREEMENT

This Business Associate Agreement ("BAA") is entered into as of May 5, 2004 in
connection with the Managed Use Agreement (the "Agreement") by and between
Emageon UV, Inc. ("Business Associate") and Ascension Health and its Ascension
Affiliates ("Covered Entity").

WHEREAS, the Agreement requires Business Associate to have access to and/or to
collect or create Protected Health Information ("PHI") in order to carry out
Business Associate's functions on behalf of Covered Entity.

WHEREAS, Covered Entity and Business Associate intend to protect the privacy and
provide for the security of PHI disclosed, collected or created by Business
Associate in connection with the Agreement in compliance with the Health
Insurance Portability and Accountability Act of 1996, Public Law 104-91
("HIPAA") and the regulations promulgated thereunder, including, without
limitation, the regulations codified at 45 CFR Parts 160 and 164 (the "Privacy
Rule"), 45 CFR Parts 160, 162 and 164 ("Security Rule"), and other applicable
laws.

NOW THEREFORE, in consideration of the mutual promises contained herein and the
exchange of PHI pursuant to this Business Associate Agreement, the parties agree
as follows:

1.       DEFINITIONS

1.1      GENERAL RULE. Capitalized terms not otherwise defined in this BAA shall
         have the same meaning as those terms in the Privacy Rule and Security
         Rule.

1.2      HIPAA means the Health Insurance Portability & Accountability Act of
         1996, P.L. 104-91.

1.3      HIPAA REGULATIONS means the regulations promulgated under HIPAA by the
         U.S. Department of Health and Human Services, including the Privacy
         Rule and Security Rule.

1.4      PRIVACY RULE means the Standards for Privacy of Individually
         Identifiable Health Information, codified at 45 CFR parts 160 and 164,
         Subparts A and E, as currently in effect.

1.5      PROTECTED INFORMATION means Protected Health Information ("PHI")
         provided by Covered Entity to Business Associate, or created or
         received by Business Associate on Covered Entity's behalf.

1.6      SECURITY RULE means the Security Standards for the Protection of
         Electronic Protected Health Information, codified at 45 CFR Parts 160,
         162 and 164, as currently in effect.

2.       BUSINESS ASSOCIATE OBLIGATIONS

2.1 Use and Disclosure of Protected Health Information. Business Associate will:
(a) use and disclose all PHI only as permitted or required to perform its
obligations under the Agreement, including this BAA, or as required by law; and
(b) will not use or further disclose any PHI in a manner that would violate
HIPAA, if such use or further disclosure was made by Covered Entity.

2.2 Disclosures to Agents and Subcontractors. Business Associate shall ensure
that any agent or subcontractor to whom it provides PHI agrees in writing to the
same terms set forth herein regarding the Use and Disclosure of PHI, including,
but not limited to, implementation of safeguards, notice of prohibited Use or
Disclosure, mitigation of harmful effects, responses to requests for access and
amendment, and a term permitting immediate termination of the agent's or
subcontractor's agreement with Business Associate for improper Use or Disclosure
of Protected Information. Business Associate shall terminate its agreement with
any agent or subcontractor to whom it provides PHI if such agent or
subcontractor fails to abide by any material term of such agreement.

2.3 Permitted Uses of Protected Health Information. Business Associate may use
PHI only as follows: (a) for the proper management and administration of
Business Associate; (b) to provide the Services described in or required by

Emageon Enterprise Agreement       Page 36                       Confidential

<PAGE>

the Agreement and any additional or other services described in any addendum or
modification to the Agreement agreed to by Business Associate and Covered
Entity; (c) to carry out legal responsibilities of Business Associate; or (d) to
report violations of law to appropriate Federal and State authorities consistent
with 45 C.F.R. Section 164.502(j)(l).

2.4 Permitted Disclosures of Protected Health Information. Business Associate
may disclose PHI only as follows: (a) to authorized persons designated by
Covered Entity in writing; (b) to the patient that is the subject of the
information pursuant to procedures determined by Covered Entity and in
accordance with applicable law; (c) to a physician or other health care
professional authorized by Covered Entity in writing to access the information;
(d) to other persons as expressly requested in writing by Covered Entity and in
accordance with applicable law; (e) to persons under Business Associate's direct
control as necessary to satisfy Business Associate's obligations under the
Agreement; (f) to other agents and subcontractors of Business Associate only as
necessary to satisfy Business Associate's obligations under this Agreement and
only, if and to the extent, those agents and subcontractors agree to the same
restrictions and conditions on the use and disclosure of PHI that apply to
Business Associate through this BAA; (g) as required by law; and (h) for
Business Associate's proper management and administration or to carry out its
legal obligations if: (1) the disclosure is required by law or (2) Business
Associate obtains reasonable assurances from the person to whom the information
is disclosed that it will be held confidentially and used or further disclosed
only as required by law or for the purpose for which it was disclosed to
Business Associate and the person notifies Business Associate of any instances
of which it is aware in which the confidentiality of the information has been
breached.

2.5 Disclosures Required by Law. If a disclosure of PHI is required by law,
including pursuant to a request from a state or federal government agency or
pursuant to a subpoena or a court order in a judicial proceeding, Business
Associate shall promptly notify Covered Entity of such request, and Covered
Entity shall __________.

2.6 Safeguards; Mitigation. Business Associate shall use appropriate safeguards
to prevent the use or disclosure of PHI other than as permitted or required by
the Agreement and this BAA or as permitted or required by law. Business
Associate agrees to mitigate, to the extent practicable, any harmful effect that
is known to Business Associate of use or disclosure of PHI by Business Associate
in violation of the requirements of this BAA.

2.7 Reports of Unauthorized Use or Disclosure. Business Associate shall report
in writing, within forty-eight (48) hours, to Covered Entity any use or
disclosure of PHI not provided for by this BAA of which it becomes aware.

2.8 Availability of PHI. Business Associate will make all PHI available to
Covered Entity and otherwise cooperate with Covered Entity to the extent
necessary for Covered Entity to comply with its obligations under 45 C.F.R.
Sections 164.524-528, including providing patients access to medical records, an
opportunity to amend incorrect information and an accounting of disclosures of
PHI. Business Associate further agrees to make its internal practices, books and
records, including policies and procedures and Confidential Information,
relating to the use and disclosure of PHI available to the Secretary of Health
and Human Services in a time and manner designated by the Secretary of Health
and Human Services, if necessary, for the purpose of determining Covered
Entity's compliance with HIPAA.

2.9 Electronic Protected Health Information. To the extent that Business
Associate creates, receives, maintains or transmits Electronic Protected Health
Information on behalf of Covered Entity on or after April 21, 2005, Business
Associate agrees to:

A.       Implement Administrative, Physical and Technical Safeguards that
         reasonably and appropriately protect the confidentiality, integrity and
         availability of the Electronic Protected Health Information;

B.       Ensure that any agent, including a subcontractor, to whom it provides
         Electronic Protected Health Information agrees to implement reasonable
         and appropriate safeguards to protect it; and

C.       Report to Covered Entity any Security Incident of which Business
         Associate becomes aware.

2.10 Limitations and Restrictions. To the extent that Covered Entity notifies
Business Associate of any limitations in its notice of privacy practices under
Section 3.2(A) herein; any changes in or revocations of permission under Section
3.2(B) herein; or any restrictions under Section 3.2(C) herein; Business
Associate shall comply with such limitations, revocations or restrictions, as
applicable.

3. COVERED ENTITY OBLIGATIONS

Emageon Enterprise Agreement       Page 37                       Confidential

<PAGE>

3.1 Requests. Subject to uses and disclosures permitted under this BAA, Covered
Entity shall not request Business Associate to use or disclose PHI in any manner
that would not be permissible under HIPAA if done by Covered Entity.

3.2 Required Notices.

A.       Covered Entity shall notify Business Associate of, and specifically
         identify, any limitations in its notice of privacy practices in
         accordance with 45 C.F.R. Section 164.520, to the extent that such
         limitations impose restrictions beyond those generally applicable under
         HIPAA and may affect Business Associate's use or disclosure of PHI.

B.       Covered Entity shall notify Business Associate of any changes in, or
         revocation of, permission by an Individual to use or disclose PHI, to
         the extent that such changes may affect Business Associate's use or
         disclosure of PHI.

C.       Covered Entity shall notify Business Associate of any restriction to
         the use or disclosure of PHI that Covered Entity has agreed to in
         accordance with 45 C.F.R. Section 164.522, to the extent that such
         restriction may affect Business Associate's use or disclosure of PHI.

4. TERM AND TERMINATION

4.1 Term. This BAA shall commence as of the Effective Date and shall continue in
effect so long as the Underlying Agreement is in effect. Upon termination of the
Underlying Agreement for any reason, this BAA shall automatically terminate,
without action of the parties. Notwithstanding the first sentence of this
Section 4.1, if either party determines that this BAA is no longer required,
then either party may terminate this BAA upon written notice to the other, and
the Underlying Agreement shall thereafter continue in full force and effect.

4.2 Termination for Cause. If Covered Entity determines that Business Associate,
or any of its agents or subcontractors, has breached any material provision of
this BAA, Covered Entity may terminate the Agreement if Business Associate fails
to cure a default or breach of a material term of this BAA within fourteen (14)
days after or, at Covered Entity's sole discretion, it receives written notice
of such default or breach from Covered Entity. If neither termination nor cure
is feasible, Covered Entity may report the violation, if any, to the Secretary
of Health and Human Services.

4.3 Effect of Termination. Except as provided herein, upon termination of the
Agreement or of this BAA for any reason (and if Business Associate and Covered
Entity do not enter into any comparable successor agreement or BAA), Business
Associate shall return or destroy all PHI, including Confidential Information
that is in the possession of subcontractors or agents of Business Associate, and
Business Associate shall retain no copies of the PHI. In the event that
returning or destroying the PHI is infeasible, Business Associate shall provide
to Covered Entity notification of the conditions that make return or destruction
infeasible and shall extend the protections of this BAA to such PHI and limit
further uses and disclosures of such PHI to those purposes that make the return
or destruction infeasible, for so long as Business Associate maintains such
Confidential Information.

5. MISCELLANEOUS

5.1 No Third Party Beneficiary. The provisions and covenants set forth in this
BAA are expressly entered into only by and between Business Associate and
Covered Entity and are intended only for their benefit. Neither Business
Associate nor Covered Entity intends to create or establish any third party
beneficiary status or right (or the equivalent thereof) in any other third
party, and no such third party shall have any right to enforce or enjoy any
benefit created or established by the provisions and covenants in this BAA.

5.2 Regulatory References. A reference in this BAA to a section in the Code of
Federal Regulations means the section as in effect or as amended, and for which
compliance is required.

5.3 Governing Law. This BAA shall be construed in accordance with the laws of
the State of Missouri.

5.4 Amendment. The Parties agree to take such action as is necessary to amend
this BAA from time to time as is necessary for Covered Entity to comply with the
requirements of HIPAA.

5.5 Interpretation. Any ambiguity in this BAA shall be resolved in favor of a
meaning that furthers the obligations to protect the privacy of the PHI in
accordance with the Privacy Rule or Security Rule, as applicable.

Emageon Enterprise Agreement       Page 38                       Confidential

<PAGE>

5.6 Counterparts. This BAA and any exhibits hereto may be executed in one or
more counterparts; each counterpart shall be deemed an original.

5.7 Notices. All notices required or permitted to be given under this BAA shall
be in writing and shall be sufficient in all respects if delivered personally,
by nationally recognized overnight delivery service, or by registered or
certified mail, postage prepaid, addressed as follows:

<Table>
<S>                                          <C>
If to Emageon:   Emageon, Inc.               If to Covered Entity:   Ascension Health
                 1200 Corporate Drive                                4600 Edmundson Road
                 uite 400                                            St. Louis MO. 63134
                 Birmingham, AL  35242                               ATTN:
                 ATTN: CFO
</Table>

Notice shall be deemed to have been delivered and given for all purposes (i) on
the delivery date if delivered personally to the party to whom the same is
directed; (ii) one business day after deposit with a commercial overnight
carrier, with written verification of receipt, or (iii) five business days after
the mailing date whether or not actually received, if sent by U.S. certified
mail.

IN WITNESS WHEREOF, the parties hereto have duly executed this Business
Associate Agreement as of the date set forth below.

Business Associate                       Covered Entity
Emageon UV, Inc.                         Ascension Health

By: /s/ W. Randall Pittman               By: /s/ Sherry Browne
    ----------------------                   ----------------------------------

Name: W. Randall Pittman                 Name: Sherry Browne
      --------------------                     --------------------------------

Title: CFO                               Title: SVP & Chief Information Officer
       -------------------                      -------------------------------

Date: 5/6/04                             Date: May 5, 2004
      --------------------                     --------------------------------

Emageon Enterprise Agreement       Page 39                       Confidential

<PAGE>

                                    EXHIBIT E
                                EMAGEON UV, INC.
                           CORPORATE TRAVEL GUIDELINES

                                  INTRODUCTION

Emageon employees may be required to travel on official Company business from
time to time. Emageon will reimburse employees, within prescribed limitations,
for all necessary and actual travel expenses incurred while traveling on Company
business.

The Corporate Travel Guidelines, presented here, should facilitate the timely
reimbursement of employees for allowable travel expenses incurred during travel
on Company business. The guidelines address most common travel situations, but
they are not intended as a substitute for knowledge of existing Company policy
or IRS regulations.

Travel expenses may also be allowed as part of an employee relocation and
employee recruitment.

                               TRAVEL EXPENSE FORM

The Travel Expense Form is available as a general template for electronic entry
and presentation of travel and related expenses. The Form is designed to provide
the minimum information required to support expenditures incurred by employees.
The report accomplishes several objectives.

o        First, it provides employees responsible for approving these expenses
         with the necessary details to perform the task.

o        Second, it provides Finance personnel with the information necessary to
         account for these expenses consistent with Company policies and IRS
         regulations.

o        Third, it enables Finance to reconcile amounts reported by employees as
         Company-paid items with invoices received from vendors for such
         services.

                    TRAVEL EXPENSE PROCESSING & REIMBURSEMENT

Each employee is required to promptly submit expense reports that are complete,
timely and with appropriate receipts and documentation attached. Approval by the
employee's Department Head serves several purposes:

o        First, it confirms that the purpose of the trip is to conduct company
         business.

o        Second, the charges are reasonable and appropriate under the
         circumstances and consistent with Company policies.

o        Third, the required documentation and receipts are attached.

With few exceptions, Finance will arrange for travel and related expenses to be
reimbursed within a week of submission of an approved expense report.

AIR TRAVEL

There are certain guidelines that apply to Air Travel.

         1.       The least expensive routing should always be sought. Book your
                  travel as far in advance as possible to qualify for more
                  economical prices.

         2.       Southwest Airlines is the preferred airline for travel to and
                  from Birmingham and other cities serviced by Southwest.

         3.       Coach class will be used for all flights, except in those
                  instances where the customer has contractually agreed to
                  reimburse the company for an upgrade to higher class.

         4.       Employees are not authorized to use personal frequent flyer
                  miles and charge the Company for the corresponding value.

         5.       The company does not provide memberships in airline travel
                  clubs at company expense.

         6.       The only acceptable receipt for airline travel fares is the
                  Passenger Receipt. Itineraries, boarding passes, credit card
                  receipts, etc. are not acceptable for reimbursement.

         7.       Employees are encouraged to use e-ticket services offered by
                  most airlines. These airlines email or provide printed
                  receipts and itineraries.

         8.       In the event the Passenger Receipt is misplaced, a copy is
                  available through the travel agency of record.

Emageon Enterprise Agreement       Page 40                       Confidential

<PAGE>

USE OF RENTAL & PERSONAL VEHICLES

It may be necessary for an employee(s) to utilize a vehicle rented from a
commercial agency such as Hertz or National or their personal vehicle while on
Company business. Employees will be reimbursed for the use of their privately
owned vehicle at the IRS recommended mileage rate. Reimbursement for the use of
rental vehicles will be made in full as long as the vehicle was used exclusively
for Company business.

There are certain guidelines that apply to the use of Leased or Privately Owned
Vehicles.

         1.       Vehicles should be sized appropriately for the intended
                  purpose. Moderate size autos are encouraged.

         2.       When at all possible, fill up auto rentals with gas before
                  returning to the rental agency.

         3.       If you pay for auto rental charges by other than credit card,
                  you are subjecting yourself and the Company to liability for
                  injury to yourself, passengers in your vehicle or any other
                  vehicle(s) involved, pedestrians, and the physical damage to
                  other vehicles and property.

         4.       The use of a credit card when renting a vehicle achieves two
                  purposes. You have the added insurance coverage the credit
                  card company offers a specified insurance coverage in the
                  event of an accident this allows you to decline the optional
                  insurance offered by the rental agency.

If an accident occurs involving a privately owned or rental vehicle being used
for Company business, the following actions should be taken:

         1.       The vehicle operator or some other reliable person should
                  immediately report the accident to local, county or state
                  police.

         2.       At the accident scene, statements should not be made to anyone
                  except law enforcement officers. It will be necessary to
                  discuss the accident with insurance company representatives.

         3.       If possible, obtain pertinent information of other parties
                  involved in the accident such as name, address, telephone
                  number(s), driver's license number, and insurance information
                  of other parties involved in the accident.

         4.       In case of an accident in which there are serious injuries or
                  death, immediately notify your Manager/Department Head of the
                  accident. If the employee is unable to do so, then the first
                  employee having knowledge of the accident should make the
                  notification. This information should be reported to the CEO,
                  the CFO and the InHouse Counsel as soon as possible.

         5.       A complete report of the accident should be provided to the
                  InHouse Counsel within 24 hours of the accident if possible.

Employees operating a leased or privately owned vehicle are responsible for
operating the vehicle in a safe and prudent manner and in accordance with all
applicable federal, state, and local traffic laws. Fines assessed for traffic
citations or other violations of applicable traffic laws are the responsibility
of the employee and are not reimbursable.

HOTEL ACCOMMODATIONS

Employees will be reimbursed for actual accommodation expense incurred,
including the state/local taxes applied thereto. The official receipt from the
establishment must be submitted with the Travel Expense Report Form.

         1.       Travelers are expected to arrange the lowest-cost reasonable
                  accommodations, such as the Hampton Inn.

         2.       Charges for room rental and associated taxes should be
                  categorized by day. Other charges included on the hotel bill
                  for meals, telephone, fax and other services should be
                  reported on the applicable day and in the appropriate line on
                  the Travel Expense Report Form.

         3.       Laundry costs are reimbursable on trips longer than 4 nights.

         4.       Hotel/motel pay movies are not reimbursable.

ENTERTAINMENT

The company recognizes that a certain amount of customer entertainment is a
reasonable and customary business expense.

         1.       Caution must be exercised when employees of federal, state and
                  local government regulatory bodies or agencies are present
                  when entertainment expenditures are involved as applicable
                  federal and state laws severely limit the amounts that can be
                  expended in such situations.

Emageon Enterprise Agreement       Page 41                       Confidential

<PAGE>

         2.       When it is proposed that the company pay for travel and
                  related expenses by non-employees, approval of the CEO and
                  President is required in advance.

         3.       All entertainment expense in excess of $25 must be supported
                  by a receipt. In addition, the individuals present, the nature
                  of the entertainment and an explanation provided in the
                  appropriate space on the expense report.

TRAVELER'S MEALS/BUSINESS MEALS

         1.       Employee meals are normally reimbursable only when away from
                  home on overnight travel.

         2.       Meals should be reported as breakfast, lunch or dinner on the
                  day incurred.

         3.       In general, lunch is the responsibility of the employee except
                  when traveling, or for a special occasion organized by the
                  company. In particular, luncheon expenses for meals involving
                  only employees who are in frequent contact with one another,
                  should be the responsibility of the individuals and not the
                  Company.

         4.       Receipts are required for any individual meal in excess of
                  $25; a credit card charge slip or cash register receipt are
                  acceptable but the names of the participants and the business
                  nature of the occasion must be indicated in the appropriate
                  space on the expense report.

         5.       Traveler's and business meals are subject to tax deductibility
                  limitation while Company meeting expense is a fully deductible
                  business expense. Therefore, it is important that your
                  expenditures are properly classified among these three
                  categories. The following are definitions of each of the three
                  expenses.

                  a.       Employee's Meals - Cost incurred by an employee for
                           his/her meals while traveling on Company business.

                  b.       Business Meals - Report the cost of food or beverages
                           for one or more participants (employees and
                           non-employees) and the nature of the business
                           discussion that ensued. The cost of the employee(s)'
                           meal should be included with the other participants
                           and reported as Business Meal/Entertainment. The
                           reporting requirements for such situations are the
                           same as for entertainment.

                  c.       Company Meeting - Normally the cost of meeting rooms,
                           instruction materials and supplies, meals and
                           refreshments that are incidental to a Company meeting
                           will be handled by a Company representative who will
                           make arrangements for their payment. The Company
                           representative responsible for the arrangement is
                           required to submit an expense report identifying the
                           participants and the business purpose of the meeting.
                           Individual employees are required to submit expense
                           reports only if employee(s) incur travel expenses
                           other than those provided as part of the proceedings.
                           Normally, a Company meeting will only involve Company
                           personnel, however when non-company personnel are
                           present, their expenses should be reported
                           separately.

TAXIS, TOLLS AND PARKING

         1.       The IRS (and the Company) requires receipts for taxi, airport
                  limo, bus, toll and parking charges.

POSTAGE, OFFICE SUPPLIES AND OTHER MISCELLANEOUS EXPENSES

         1.       The Expense Report form provides for travelers to report
                  office supplies and other miscellaneous expenses.

         2.       This feature is primarily intended for Sales Representatives
                  and other employees who reside outside of Birmingham and do
                  not have access to office supplies available at Emageon
                  office.

                              EXPENSE DOCUMENTATION

         1.       To comply with Internal Revenue Service documentation
                  requirements, receipts are required for all expenditures. In
                  the event a receipt is misplaced, a detailed note should be
                  included with your expense report.

Emageon Enterprise Agreement       Page 42                       Confidential

<PAGE>

                                    EXHIBIT F

                           PROJECT ACCEPTANCE PROCESS

    THIS IS A SAMPLE INSTALLATION ACCEPTANCE PROCESS (NOT ALL COMPONENTS OF
    THIS SAMPLE PLAN WILL BE APPLICABLE TO EVERY CUSTOMER. THIS DOCUMENT IS
                          INTENDED AS A SAMPLE ONLY.)

         The acceptance process is divided into three phases:

Hardware Installation Acceptance

Installation Acceptance

Transition to Service

HARDWARE INSTALLATION ACCEPTANCE

                  The Order Addendum shall provide the specific detail for each
                  Customer. Unless otherwise provided herein or in the Order
                  Addendum, the Hardware shall be deemed accepted by Customer
                  when Emageon certifies completion of installation of the
                  Hardware. Should Emageon be prevented from installing the
                  Hardware in accordance with the mutually agreed upon written
                  installation schedule due to Customer's inability to take
                  delivery, or begin installation of the Hardware, then the
                  Hardware shall be deemed installed and accepted fifteen (15)
                  days after the agreed upon written installation schedule.
                  Customer agrees to pay all fees associated with the Hardware
                  acceptance to Emageon at that time. Should Installation of the
                  Hardware be delayed solely due to the fault of the other
                  party, the delayed party may recover from the delaying party
                  actual expenses incurred as a direct result of such delay.."

                  Emageon will perform and document the results of the Hardware
                  Installation Acceptance in accordance with the attached sample
                  below or as defined in this Agreement, if different from the
                  example. The Customer point of contact will observe the
                  analyses and sign-off on each task upon successful completion.
                  In addition to any other testing or checklist required to
                  confirm that the System conforms to the System Specifications,
                  the parties shall confirm the presence of the functionality
                  described and evidenced with a checkmark below, and such
                  functionality shall be included within the definition of
                  "System Specifications":

* * *

SYSTEM INSTALLATION ACCEPTANCE

                  The Order Addendum shall provide the specific details for each
                  customer. However, the following provides an excerpt from the
                  Order Addendum related to System Installation Acceptance.

                  Emageon will perform and document the results of the System
                  Installation Acceptance in accordance with the attached sample
                  below or as defined in this Agreement, if different from the
                  example. The Customer point of contact will observe the
                  analyses and sign-off on each task upon successful completion.

* * *

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 43                       Confidential

<PAGE>

TRANSITION TO SERVICE

                  The final phase of the project is to transfer responsibility
                  for the Customer from Emageon Adoption Success Management (as
                  described in Exhibit G) to the Emageon Service Group. Since
                  the Emageon model demands that we earn our money every month,
                  the transition to Service is different in several ways. One
                  example is the Emageon Service Group utilizes a Continuous
                  Improvement Model. As part of the model, the implemented
                  system will be perpetually improved and upgraded to meet the
                  requirements as defined in the Customer contract.

                  During the implementation, every attempt is made to complete
                  open items related to system configuration, system
                  performance, training, etc. However, since open items will
                  usually exist, our model is designed for the Service the Group
                  to assume responsibility and manage open items, while
                  continually monitoring and improving the system.

                  The transition to Service begins during the ASM Integration
                  and Training phase. During this phase the Emageon Service team
                  will:

Conduct on site visits and perform equipment and workflow audits.

Become familiar with site layout and facilities

Meet the customer team

Monitor progress of project

Assist with Customer training

Validate remote monitoring and access capability

Verify site document is complete

                  As a part of the transition, ASM is responsible for completing
                  and transferring documented information related to the system
                  configuration, test results, and day-to-day operational
                  procedures as defined in the table below.

* * *

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 44                       Confidential

<PAGE>

                                    EXHIBIT G

                      ADOPTION SUCCESS MANAGEMENT SERVICES

Adoption Success Management (ASM) services, Emageon and related CUSTOMER
responsibilities are detailed below. Emageon and CUSTOMER agree to perform the
duties assigned to each of them, respectively, as set forth below.

OVERVIEW

ASM services are an Emageon developed, refined and tested methodology for
deploying Enterprise Image Management Systems (EIMS). ASM services may be
offered in conjunction with Emageon Implementation Services or may be an
"overlay" process to a 3rd party's implementation process. The service is
designed to be dynamic and configurable to an individual Facility's needs. The
ASM methodology utilizes skills in project management, change management,
clinical workflow and training with a focus on the applied principles of adult
learning.

The purpose of ASM services is to minimize the time required for an organization
to adopt an EIMS, maximize the effective value of an EIMS, and to mitigate the
organizational disruptions that may occur during a major information technology
implementation.

Emageon and CUSTOMER are jointly responsible for the success of the ASM project,
and for providing the necessary resources for the project.
***

Emageon Enterprise Agreement       Page 45                       Confidential

-------
***CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
<PAGE>

CUSTOMER RESPONSIBILITIES

CUSTOMER shall:

o        Be Responsible for The Adoption of the EIMS

o        Provide Access To Necessary Personnel And Facilities Critical In The
         Facilitation Of The ASM Project

o        Provide Necessary Communications Support - Telephone, Internet Access,
         Etc

o        Insure CUSTOMER Provided Facilities, Information Systems And Modalities
         Are Prepared, Maintained And Operational For Integration Into The EIMS

o        Participate In ASM Meetings

o        Participate, at its own cost, in Development of Materials, Including
         But Not Limited To Marketing Materials, Training Guides, Communication
         Tools and Similarly Related Materials for Deployment and Adoption of
         The EIMS.

Emageon Enterprise Agreement       Page 46                       Confidential

<PAGE>

o        Provide A Dedicated ASM Project Coordinator To Support And Facilitate
         The ASM Project

o        Shall Bear and Pay All Costs Associated With The Production of
         Materials, Including But Not Limited To Marketing Materials, Training
         Guides, Communication Tools and Similarly Related Materials for
         Deployment and Adoption of The EIMS.

CUSTOMER Shall Make Personnel And Facilities Available According To A Mutually
Agreed Upon Schedule.

Emageon Enterprise Agreement       Page 47                       Confidential

<PAGE>

                                    EXHIBIT H
                       EMAGEON PACS ADMINISTRATOR SERVICES

Emageon PACS ADMINISTRATOR Services and related responsibilities are detailed
below by function.

GENERAL

Where specified in an Order Addendum, Emageon will provide a PACS Administrator
(PA) for the duration of the Agreement to perform the duties as defined below.
The PACS Administrator will report to Emageon, but have day to day operational
reporting to a designated Customer manager.

Assumptions and General Understandings between the Parties:

o        Standard hours for PA(s) are from 8 am to 5 pm CST. After hours support
         will be handled through pager communications.

o        Workload for PA shall remain consistent with normal, industry accepted
         workloads for a trained and reasonably skilled individual performing
         these functions. Ratios to be used for determining acceptable workload
         shall include number of radiologists, number of studies performed
         annually, number of diagnostic reading stations, after hours reading
         requirements and system accessibility requirements.

o        PA shall be mutually selected by both parties.

Customer Obligations

         1.       Customer shall provide an adequate working space in or near
                  the facilities requiring PA services from the PA.

         2.       Customer shall provide the equipment necessary for the PA to
                  perform the necessary functions of the PA position. This
                  equipment includes, at a minimum, the following:

                  a)       Telephone

                  b)       Computer with access to the facility networks and
                           Internet and all necessary applications to perform
                           the functions of PA

                  c)       Pager for after hours on-call communications

                  d)       Other tools and diagnostic equipment necessary for
                           the troubleshooting and repair of imaging equipment.
                           Any third party tools that modality vendors may
                           require for troubleshooting their products are the
                           responsibility of the Customer.

         3.       Customer shall provide, during the entire term of the
                  Agreement, a suitable "on-call" employee capable of performing
                  the majority of the PA's routine tasks. This on-call employee
                  will be responsible for managing the day to day operational
                  duties during all hours when the PA is not scheduled,
                  including, but not limited to, additional work shifts,
                  vacation time, sick time, and scheduled Emageon Company
                  holidays.

         4.       Customer shall assign a manager for the purpose of assigning
                  day to day operational duties to the PA.

Emageon Obligations

         1.       Emageon shall provide the recruiting, hiring and training of
                  all PA resources required for performing the PA functions.

         2.       Emageon will provide a computer for access to Emageon
                  documents and all other materials necessary for the
                  performance of the PA functions.

         3.       Emageon will nominate a Supervisor for the PA for overall
                  management, training and disciplinary actions.

         4.       Emageon will be solely responsible for PA's compensation and
                  benefits. Emageon will utilize all tools necessary for the
                  troubleshooting and repair of its contracted components.

Selection of PACS Administrator

The minimum requirements for the qualifications of the PA are outlined herein.
Emageon will identify qualified candidates and conduct formal interviews. Upon
completion of the interview process, Emageon will provide no less than two
qualified PA applicants for Customer review. Customer will select the preferred
candidate, and Emageon will extend a formal offer for hire of this individual.
In the event the preferred candidate cannot be hired for any reason, Emageon
will extend a formal offer for hire to the second candidate. The PA will be
scheduled to begin employment within thirty (30) days prior to or immediately
following the scheduled commencement of the implementation process.

PACS Administrator Review Process

Emageon Enterprise Agreement       Page 48                       Confidential

<PAGE>

The PA will be reviewed for performance on a quarterly basis by the designated
Customer manager and will be reviewed once annually by both Customer and Emageon
for performance. All Designated Customer manager reviews will be sent to the
Emageon Human Resources Specialist within thirty (30) days of the end of the
evaluation period. Criteria for the performance review shall be mutually agreed
upon by Customer and Emageon. Any disciplinary action shall be at the sole
discretion of Emageon.

Disciplinary Action

If at any time, the designated Customer manager feels that the PA has engaged in
any violation of Emageon or Customer policy which warrants disciplinary action,
the designated Customer manager must notify the Emageon Human Resources
Specialist within three (3) business days of the actual violation or of becoming
aware of the violation by way of written correspondence outlining the details of
the violation. Any disciplinary action shall be at the sole discretion of
Emageon.

Termination of PACS Administrator

The PA may be terminated by Emageon for any reason by which Customer may
terminate any employee of the Customer, or for any reason by which Emageon may
terminate any Emageon employee, including failure to perform in accordance with
agreed criteria. A copy of Customer's employment terms and conditions must be
provided to Emageon upon execution of this Agreement.

Replacement of PACS Administrator

In the event of voluntary or involuntary termination of PA, Emageon shall
provide, within five (5) business days, a temporary replacement for the PA.
Emageon will provide, within 60 days, a permanent replacement for the terminated
PA, and will provide the required education and training necessary for the
replacement PA to perform the duties as identified below.

Grievance Policy

In the event the PA has an employment-related issue or conflict that cannot be
resolved through 1) discussions with the designated Customer manager and 2)
discussions with the appropriate Emageon manager, the Grievance Policy as set
forth in the Emageon, Inc. Employee Manual shall be followed.

Travel Policy

All travel, lodging and related expenses of the PA incurred on business
transacted at the request of the Customer will be submitted to Customer for
reimbursement according to the Customer's travel reimbursement policy. If
Customer does not have a published travel reimbursement policy, then the Emageon
policy shall prevail.

PACS ADMINISTRATOR FUNCTIONS

<Table>
<Caption>
PACS Administrator Functions     Description
----------------------------     --------------------------------------------------------------------------------
<S>                              <C>
Primary                          Coordination and communication throughout the project integration to all project
Communication                    players for Emageon and customer.
----------------------------     --------------------------------------------------------------------------------
System Installation              Management of RIS/ PACS implementation process including order review, project
                                 planning, resource scheduling and coordination, Facility specific system
                                 configuration design, equipment scheduling.
----------------------------     --------------------------------------------------------------------------------
Facilities Readiness             Assure that the customer site complies with Emageon specified power, heat,
and Preparation                  dimension, and network requirements. Monitor site to assure site readiness,
                                 scheduled delivery dates, and installation readiness.
----------------------------     --------------------------------------------------------------------------------
Daily Operations                 Manage day-to-day operation of PACS equipment including image workflow,
                                 archiving, routing, pre-fetching, correcting broken studies, editing patient
                                 demographics, HIS/RIS interface
-----------------------------------------------------------------------------------------------------------------
</Table>

Emageon Enterprise Agreement       Page 49                       Confidential
<PAGE>

<Table>
<Caption>
PACS Administrator Functions     Description
----------------------------     --------------------------------------------------------------------------------
<S>                              <C>
Support,                         Document and communicate specific issues identified by clinical users with
troubleshooting                  respect to Service issues, updates, progress and resolution. Escalate and be an
and issue resolution             advocate for customer support, issues and problems.
----------------------------     --------------------------------------------------------------------------------
Disaster Preparedness,           Initiate switchover to system and/or component backup procedures as necessary
Failure Correction               and report any system or component failures to Emageon.
and Recovery
                                 Perform daily, weekly, and monthly routine maintenance procedures as required.
                                 Perform backup/ disaster recovery procedures, including off-site storage of
                                 tapes as required.
----------------------------     --------------------------------------------------------------------------------
Training and Internal            Support application programmers and end-user groups and communicate any requests
PACS                             for moves, additions, and changes to the Emageon system.
Communications
                                 Monitor clinical workflow procedures and make recommendations for improvement.
                                 Conduct system/ component training.

                                 Serve as PACS liaison to hospital departments.
-----------------------------------------------------------------------------------------------------------------
</Table>

PACS ADMINISTRATOR MINIMUM REQUIREMENTS

Competencies, Knowledge, Skills, and Abilities

         1.       Demonstrated ability to work independently and guide Customer
                  through operational improvement process.

         2.       Knowledge of Radiology workflow.

         3.       Knowledge of Radiology Department and Hospital employees,
                  roles and responsibilities.

         4.       Strong process orientation, problem solving and
                  troubleshooting skills, and a firm commitment to quality

         5.       Must have the ability to understand, relate, and build
                  confidence in customer.

         6.       Experience in DICOM protocol, general computer network
                  technology, high performance computing systems and archival
                  storage systems.

         7.       Excellent verbal and written communication skills- ability to
                  interface and influence at multiple organizational levels.

Preferred Education and Experience

         1.       BS degree in technical discipline preferred.

         2.       5+ years in hospital information technology.

         3.       Licensed Radiology Technologist (R.T.) preferred.

         4.       Minimum 2 to 3 years project management experience working
                  with customers, vendors and leading cross-functional teams.

Emageon Enterprise Agreement       Page 50                       Confidential

<PAGE>

                                    EXHIBIT I

                                 ORDER ADDENDUM

                                EMAGEON UV, INC.
                                 ORDER ADDENDUM
                                       FOR

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

         This EMAGEON UV, INC., Order Addendum (the "ADDENDUM"), effective as of
_____________________ ("Effective Date") and entered into by and between Emageon
UV, Inc. ("Emageon"), whose principal place of business is at 1200 Corporate
Drive, Suite 400, Birmingham, Alabama 35242, ________________, whose principal
place of business is at __________________________________ ("ASCENSION
MINISTRY"), and Ascension Health, whose principal place of business is at 4600
Edmundson Road, St. Louis MO. 63134 ("ASCENSION HEALTH" OR "CUSTOMER") shall
supplement and amend, where indicated, the EMAGEON UV, INC., MASTER TERMS AND
CONDITIONS, ENTERPRISE AGREEMENT (the "MASTER AGREEMENT") entered into by and
between EMAGEON UV, INC. ("Emageon"), and aSCENSION HEALTH dated
___________________, 2004. By way of clarification, in the event of conflict
between the terms of the Master Agreement and this Addendum, this Addendum shall
be controlling.

1.       The Master Agreement consists of the Enterprise Software Pricing for
         the Facilities and Affiliates as well as a description of the
         Implementation Service and the Maintenance and Support Services to be
         provided by Emageon. Ascension Ministry hereby agrees to accept the
         products and services set forth in the Master Agreement and in the
         following Attachments, and Emageon agrees to furnish such products and
         services, upon the terms and conditions of the Master Agreement and
         this Supplement and its Attachments to the Facilities set forth in
         Attachment D.

         This Supplement includes the following attachments:

                  Attachment A:  Site Survey

                  Attachment B:  SYSTEM configuration

                  Attachment C:  Terms and Fees

                  Attachment D:  Facilities

                  Attachment E:  Technical Points of Contact

                  Attachment F:  Response Time Service Level Specifications

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by
their duly authorized representatives and made effective as of the Effective
Date.

ACCEPTED AND AGREED TO:                    ACCEPTED AND AGREED TO:

Emageon:                                                                 :
EMAGEON UV, INC.                           ------------------------------
                                           ------------------------------

By:                                        By:
   ----------------------------------          ------------------------------
Name:                                      Name:
      -------------------------------             ---------------------------
Its:                                       Its:
     --------------------------------           -----------------------------

                                           Ascension Health

                                           By:
                                               ------------------------------
                                           Name:
                                                 ----------------------------
                                           Its:
                                                -----------------------------

Emageon Enterprise Agreement       Page 51                       Confidential

<PAGE>

                                  ATTACHMENT A
                                   SITE SURVEY

Ascension Ministry agrees the attached Site Survey represents a list of all
image acquisition devices located at the Facilities and their respective volumes
and study sizes. Ascension Ministry agrees that such Site Survey represents all
image acquisition devices that shall be connected to the SYSTEM. Ascension
Ministry shall first notify Emageon prior to making any changes that would add
new image acquisition devices or change the acquisition parameters, which would
thereby increase volume and / or study sizes. Ascension Ministry acknowledges
that such changes could result in diminished SYSTEM performance or capacity
subject to adjustments as contemplated in Section 9.8 of the Master Agreement.
Additionally, such changes will likely result in additional charges to Ascension
Ministry including integration fees and additional hardware / storage costs
necessary to maintain SYSTEM performance.

* * *

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 52                       Confidential

<PAGE>

                                  ATTACHMENT B
                              SYSTEM CONFIGURATION

The following components constitute the SYSTEM whether supplied by Emageon or
Ascension Ministry. Any components not specified in the table below that are
subsequently required or desired shall be Ascension Ministry's responsibility.

Where Emageon supplies components, Emageon reserves the right to substitute
components that provide equal or better capacity, performance, and reliability.
Emageon shall first notify Ascension Ministry prior to any substitutions.

Where Ascension Ministry supplies components, the components must meet or exceed
Emageon listed specifications. Ascension Ministry-supplied components must be
approved by Emageon prior to installation to ensure compatibility with Emageon
Software and Hardware components. Ascension Ministry is required to maintain
compatibility with Emageon Software and Hardware components. Emageon may charge
Ascension Ministry a certification charge for non-approved hardware and software
components.

Any SYSTEM support issues that are attributable to Ascension Ministry supplied
components may result in additional service fees to Ascension Ministry.

SYSTEM unavailability attributable to Ascension Ministry-supported components
shall not constitute SYSTEM downtime.

* * *

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 53                       Confidential

<PAGE>

                                  ATTACHMENT C
                                 TERMS AND FEES

FACILITY - PRICING SCHEDULE AND TERMS [THE FOLLOWING TABLE IS TO BE COMPLETED
FOR EACH FACILITY]

     * * *

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 54                       Confidential

<PAGE>

                                  ATTACHMENT D
                                   FACILITIES

The following list represents the Facilities covered by this Order Addendum.

[INSERT LIST OF FACILITIES]

Emageon Enterprise Agreement       Page 55                       Confidential

<PAGE>

                                  ATTACHMENT E
                           TECHNICAL POINTS OF CONTACT

The following list represents the Technical Points of Contact for Ascension
Ministry. Ascension Ministry may amend this list upon notice to Emageon.

[INSERT LIST OF TECHNICAL POINTS OF CONTACT]

Emageon Enterprise Agreement       Page 56                       Confidential

<PAGE>

                                  ATTACHMENT F
                    RESPONSE TIME SERVICE LEVEL SPECIFICATION

The specific specifications for the Response Time Service Levels for the
Facilities represented by this Order Addendum are as follows:

[INSERT RESPONSE TIME PERIOD, DEMARCATION POINT FOR MEASUREMENT AND OTHER
RESTRICTIONS OR CONDITIONS FOR EACH FACILITY]

Emageon Enterprise Agreement       Page 57                       Confidential

<PAGE>

                                    EXHIBIT J
                           PROFESSIONAL SERVICES RATES

The Professional Services Rates listed below shall apply to those activities
requested by Customer that are beyond the scope of the Implementation Services
and Support Services as set forth in Exhibit B of each Order Addendum.
Professional Services fees are billed separately from the SYSTEM fees and shall
be set forth in a separate Statement of Work. Professional Services will be
provided to Customer at the Professional Services Rates.

PROFESSIONAL SERVICES HOURLY FEES

<Table>
<S>                                                      <C>
Service Representative (per hour)                        $ * * *
Application Specialist (per hour)                        $ * * *
Interface Programming (per hour)                         $ * * *
Systems Engineer (per hour)                              $ * * *
Integration HL7/DICOM Consulting (per hour)              $ * * *
Senior Application Consultant (per hour)                 $ * * *
Clinical Consultant (per hour)                           $ * * *
Senior Clinical Consultant (per hour)                    $ * * *
Migration Services (per TB)                              $ * * *
</Table>

* The above Professional Services Rates DO NOT include either Travel and Living
Costs.

----------
* * * CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

Emageon Enterprise Agreement       Page 58                       Confidential

<PAGE>

                                    EXHIBIT K
                      CLINICAL INFORMATION SYSTEMS VENDORS

o        Cerner

o        Eclipsys

o        EPIC

o        McKesson

o        Meditech

o        Siemens

Emageon Enterprise Agreement       Page 59                       ConfidentialEX-4.1 FORM OF 6% SENIOR UNSECURED CONVERTIBLE DEB

 

EXHIBIT 4.1

Exhibit A to the

Securities Purchase Agreement

THIS DEBENTURE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS DEBENTURE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE OR SOLD UNLESS A REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN
CONNECTION WITH SUCH OFFER OR SALE.

THIS DEBENTURE DOES NOT REQUIRE PHYSICAL SURRENDER HEREOF IN ORDER TO EFFECT A PARTIAL PAYMENT,
REDEMPTION OR CONVERSION HEREOF. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS DEBENTURE
MAY BE LESS THAN THE PRINCIPAL AMOUNT SHOWN BELOW.

VERSO TECHNOLOGIES, INC.

6% SENIOR UNSECURED CONVERTIBLE DEBENTURE

			
	New York, New York
	 	$___
	Issue Date: February 4, 2005	 	 

          FOR VALUE RECEIVED, VERSO TECHNOLOGIES, INC., a Minnesota corporation (the “Company”),
hereby promises to pay to the order of ___or its permitted successors or assigns
(the “Holder”) the sum of ___($___) in same day funds, on
February 3, 2009 (the “Maturity Date”) or such earlier date on which amounts due under this
Debenture are required or permitted to be repaid as provided herein. The Holder may convert amounts
of principal of this Debenture into shares (“Conversion Shares”) of the Company’s common
stock, par value $.01 per share (the “Common Stock”), on the terms and subject to the
conditions set forth herein.

          The Company has issued this Debenture pursuant to a Securities Purchase Agreement, dated as of
February 4, 2005 (the “Securities Purchase Agreement”). The debentures issued by the
Company pursuant to the Securities Purchase Agreement, including this Debenture, are collectively
referred to herein as the “Debentures”.

 

 

          The following terms shall apply to this Debenture:

1. DEFINITIONS.

               “Affiliate” means, as to any Person (the “subject Person”), any other Person
(a) that directly or indirectly through one or more intermediaries controls or is controlled by, or
is under direct or indirect common control with, the subject Person, (b) that directly or
indirectly beneficially owns or holds ten percent (10%) or more of any class of voting equity of
the subject Person, or (c) ten percent (10%) or more of the voting equity of which is directly or
indirectly beneficially owned or held by the subject Person. For the purposes of this definition,
“control” when used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership of voting
securities, through representation on such Person’s board of directors or other management
committee or group, by contract or otherwise.

               “Business Day” means any day other than a Saturday, a Sunday or a day on which the New
York Stock Exchange is closed or on which banks are authorized by law to close in New York, New
York.

               “Cap Amount” means 19.99% of the number of shares of Common Stock outstanding on the
Issue Date (subject to adjustment upon a stock split, stock dividend or similar event).

               “Change of Control” means the existence or occurrence of any of the following: (a) the
sale, conveyance or disposition of all or substantially all of the assets of the Company; (b) the
effectuation of a transaction or series of transactions in which more than fifty percent (50%) of
the voting power of the Company is disposed of; (c) the consolidation, merger or other business
combination of the Company with or into any other entity, immediately following which the prior
shareholders of the Company fail to own, directly or indirectly, at least fifty percent (50%) of
the surviving entity; (d) a transaction or series of transactions in which any Person or group
acquires more than fifty percent (50%) of the voting equity of the Company; and (e) the Continuing
Directors do not at any time constitute at least a majority of the Board of Directors of the
Company.

               “Continuing Director” means at any date a member of the Company’s Board of Directors
(i) who was a member of such board on the date of the Securities Purchase Agreement or (ii) who was
nominated or elected by at least a majority of the directors who were Continuing Directors at the
time of such nomination or election or whose election to the Company’s Board of Directors was
recommended or endorsed by at least a majority of the directors who were Continuing Directors at
the time of such nomination or election or such lesser number comprising a majority of a nominating
committee if authority for such nominations or elections has been delegated to a nominating
committee whose authority and composition have been approved by at least a majority of the
directors who were Continuing Directors at the time such committee was formed.

               “Conversion Price” means fifty cents ($.50), subject to adjustment as provided herein.

-2-

 

               “Debt” means as to any Person at any time: (a) all indebtedness, liabilities and
obligations of such Person for borrowed money; (b) all indebtedness, liabilities and obligations of
such Person to pay the deferred purchase price of Property or services (except trade accounts
payable, accrued compensation, accrued expenses, and unearned revenue and customer deposits of such
Person that, in any such case, arise in the ordinary course of business and are not more than
ninety (90) days past due, and accrued costs of the MCK acquisition and the liabilities of
discontinued operations); (c) all capital lease obligations of such Person; (d) all Debt of others
guaranteed by such Person; (e) all indebtedness, liabilities and obligations secured by a Lien
(other than a Permitted Lien) existing on Property owned by such Person, whether or not the
indebtedness, liabilities or obligations secured thereby have been assumed by such Person or are
non-recourse to such Person; (f) all reimbursement obligations of such Person (whether contingent
or otherwise) in respect of letters of credit, bankers’ acceptances, surety or other bonds and
similar instruments; and (g) all liabilities and obligations of such Person to redeem or retire
shares of capital stock of such Person (other than the Company’s obligation to redeem the
Securities under the circumstances specified therein). Debt shall not include any liability for (i)
federal, state, local or other taxes imposed by a Governmental Authority, (ii) endorsements of
negotiable instruments for deposit or collection or similar transactions in the ordinary course of
business or (iii) any indebtedness that has been fully and finally defeased in accordance with the
terms of the documents governing such indebtedness.

               “Default Interest Rate” means the lower of twelve (12%) and the maximum rate permitted
by applicable law or by the applicable rules or regulations of any governmental agency or of any
stock exchange or other self-regulatory organization having jurisdiction over the Company or the
trading of its securities.

               “Fed Funds Rate” means, as of a particular date, the rate most recently announced on
or prior to such date by the Federal Open Market Committee as the target for the federal funds
rate.

               “Forced Conversion Condition” means each of the following:

          (i) the Registration Statement has been declared effective, is not the subject
of any stop order, is available to the Holder, and covers the number of Registrable
Securities required by the Registration Rights Agreement; provided, however, that if
the Company is no longer required to maintain the effectiveness of the Registration
Statement under the Registration Rights Agreement, the events described in this
clause (i) shall no longer constitute a “Forced Conversion Condition”;

          (ii) the Common Stock is listed on the Nasdaq National Market, the Nasdaq
SmallCap Market or the New York Stock Exchange and trading in the Common Stock on
such market or exchange shall not have been suspended;

-3-

 

          (iii) an Event of Default (as defined below), or an event that with the passage
of time or giving of notice, or both, would constitute an Event of Default, has not
occurred and is continuing;

          (iv) the Market Price is greater than one dollar $1.00 (subject to proportional
adjustment for stock splits, stock dividends and similar events); and

          (v) Shareholder Approval has been obtained.

               “Governmental Authority” means any nation or government, any state, provincial or
political subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, including without limitation
any stock exchange, securities market or self-regulatory organization.

               “Issue Date” means the date on which this Debenture is issued pursuant to the
Securities Purchase Agreement.

               “Lien” and “Permitted Lien” shall have the respective meanings set forth in
the Securities Purchase Agreement.

               “Liquidation Event” means the (x) institution of any insolvency or bankruptcy
proceedings, or any receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to the Company, any Subsidiary of the Company or to its or their
creditors, as such, or to its or their assets, or (y) the dissolution or other winding up of the
Company or a Subsidiary of the Company, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy proceedings, or (z) any assignment for the benefit of creditors
or any marshalling of the material assets or material liabilities of the Company or any Subsidiary
of the Company; provided, however, that for purposes of this definition, the term “Subsidiary”
shall not include an entity that has no material assets or operations as of the Issue Date.

               “Major Transaction” means a merger, consolidation, business combination, tender offer,
exchange of shares, recapitalization, reorganization, redemption or other similar event, as a
result of which shares of Common Stock shall be changed into the same or a different number of
shares of the same or another class or classes of stock or securities or other assets of the
Company or another entity or the Company shall sell all or substantially all of its assets.

               “Market Price” means, as of a particular date, the average of daily VWAP for each of
the five (5) consecutive Trading Days occurring immediately prior to (but not including) such date.

               “Material Adverse Effect” means an effect that is material and adverse to (i) the
consolidated business, operations, properties, financial condition, prospects or results of
operations of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company
to perform its obligations under this Debenture or the other Transaction Documents (as defined
below).

-4-

 

               “Person” means any individual, corporation, trust, association, company, partnership,
joint venture, limited liability company, joint stock company, Governmental Authority or other
entity.

               “Principal Market” means the principal securities exchange or market on which the
Common Stock is listed or traded.

               “Registrable Securities” has the meaning set forth in the Registration Rights
Agreement.

               “Registration Rights Agreement” means the agreement between the Holder (and the other
Holders listed therein) and the Company pursuant to which the Company has agreed to register the
shares of Common Stock issuable under the Debentures and the Warrants.

               “Registration Statement” means the Registration Statement (as defined in the
Registration Rights Agreement) covering the resale of the Conversion Shares issuable under this
Debenture.

               “Scheduled Interest Payment Date” means each April 1, July 1, October 1 and January 1
following the Issue Date, with the first Scheduled Interest Payment Date occurring on April 1,
2005, provided, that if any such date is not a Business Day, then the Scheduled Interest Payment
Date shall be the Business Day immediately following such date.

               “Shareholder Approval” means (i) the affirmative vote of the holders of the number of
shares of outstanding Common Stock required under the Minnesota Business Corporation Code to
approve an amendment to the Company’s Articles of Incorporation to increase the number of
authorized shares of Common Stock at least 150% of the number of shares sufficient to permit the
exercise in full of the Series B Warrants (without regard to any restriction on such exercise) and
(ii) the affirmative vote of the holders of such number of votes cast at a meeting of shareholders
approving the issuance of Common Stock in excess of the Cap Amount as may be required under the
applicable listing requirements of the Principal Market.

               “Stock Payment Condition” means each of the following:

          (i) the Registration Statement has been declared effective, is not the subject
of any stop order, is available to the Holder, and covers the number of Registrable
Securities required by the Registration Rights Agreement; provided, however, that if
the Company is no longer required to maintain the effectiveness of the Registration
Statement under the Registration Rights Agreement, the events described in this
clause (i) shall no longer constitute a “Stock Payment Condition”;

          (ii) the Common Stock is listed on the Nasdaq National Market, the Nasdaq
SmallCap Market, the New York Stock Exchange or the

-5-

 

American Stock Exchange and trading in the Common Stock on such market or exchange
shall not have been suspended;

          (iii) an Event of Default (as defined below), or an event that with the passage
of time or giving of notice, or both, would constitute an Event of Default, has not
occurred and is continuing; and

          (iv) Shareholder Approval has been obtained.

               “Subsidiary” means, with respect to any Person, any corporation or other entity of
which at least a majority of the outstanding shares of stock or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of the board of directors (or Persons
performing similar functions) of such corporation or entity (regardless of whether or not at the
time, in the case of a corporation, stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries or by
such Person and one or more of its Subsidiaries.

               “Trading Day” means a Business Day on which shares of Common Stock is purchased and
sold on the Principal Market.

               “VWAP” on a Trading Day means the volume weighted average price of the Common Stock
for such Trading Day on the Principal Market as reported by Bloomberg Financial Markets or, if
Bloomberg Financial Markets is not then reporting such prices, by a comparable reporting service of
national reputation selected by the Holders and reasonably satisfactory to the Company. If VWAP
cannot be calculated for the Common Stock on such Trading Day on any of the foregoing bases, then
the Company shall submit such calculation to an independent investment banking firm of national
reputation reasonably acceptable to the Investors, and shall cause such investment banking firm to
perform such determination and notify the Company and the Investors of the results of determination
no later than two (2) Business Days from the time such calculation was submitted to it by the
Company. All such determinations shall be appropriately adjusted for any stock dividend, stock
split or other similar transaction during such period.

               “Warrants” means the warrants issued pursuant to the Securities Purchase Agreement.

          All definitions contained in this Debenture are equally applicable to the singular and plural
forms of the terms defined. The words “hereof”, “herein” and “hereunder” and words of similar
import referring to this Debenture refer to this Debenture as a whole and not to any particular
provision of this Debenture. Any capitalized term used but not defined herein has the meaning
specified in the Securities Purchase Agreement.

-6-

 

1A. SUBORDINATION.

     Notwithstanding any other provisions of this Debenture to the contrary, by its acceptance of
this Debenture, the Holder agrees as follows:

          (a) The principal of and interest on this Debenture (and all extensions and renewals thereof
and replacements therefor) and all premiums, fees, costs, expenses and all other sums now or
hereafter due in connection with the foregoing (collectively, the “Debenture Obligations”)
are subordinate in right of payment to the payment to Silicon Valley Bank (the “Senior
Lender”, which term shall include any other institutional lender which hereafter replaces the
Senior Lender as a lender to the Company), in full in cash, of all present and future indebtedness
for borrowed money of the Company to the Senior Lender and all interest thereon, and all
liabilities, guarantees and other obligations of the Company to the Senior Lender in connection
therewith, now existing or hereafter arising, including without limitation any interest accruing
after the commencement of any bankruptcy, arrangement, or reorganization proceeding with respect to
Company (but only to the extent that such interest is recoverable
from the Company or
allowed in any such proceeding), costs, expenses, penalties, indemnities, and reimbursement
obligations (collectively, the “Senior Debt”). Notwithstanding the foregoing, the Holder
may accept payment of the following amounts on the Debenture Obligations: (i) regularly scheduled
payments of principal as set forth herein on the date hereof, (ii) regularly scheduled payments of
interest as set forth herein on the date hereof and (iii) amounts to which Holder is entitled under
the Collateral Agreement as in effect on the date hereof (the payments under subclauses (i), (ii)
and (iii) above being collectively referred to herein as the “Permitted Payments”). Unless
and until all of the Senior Debt has been indefeasibly paid in full, in cash, and as long as this
Debenture is not in default, the Holder agrees not to do any of the following, directly or
indirectly: ask for or accept payment of all or any part of the Debenture Obligations (except for
the Permitted Payments as provided for above), in cash or other property or by set-off or in any
other manner, demand, sue for, accelerate the maturity of, or otherwise enforce any of the
Debenture Obligations, enforce any guaranty of any of the Debenture Obligations, take, hold or
claim any collateral or security for any of the Debenture Obligations (other than amounts held in
the Collateral Account), exercise any rights or remedies with respect to the Debenture Obligations,
judicially or non-judicially (including without limitation the commencement of any bankruptcy or
insolvency proceeding against the Company), or attempt to do any of the foregoing (collectively,
“Collection Action”); provided, however, that upon a default under this
Debenture, the Holder shall be entitled to take any Collection Action that it deems necessary or
appropriate in its sole discretion, but only after the Senior Lender has received at least ninety
(90) days’ prior written notice thereof from the Holder (except that such notice shall not be
required with respect to (x) a Collection Action relating to amounts held in the Collateral
Account, (y) any claim or filing that the Holder may have or be entitled to make in connection with
a bankruptcy or insolvency proceeding (subject to the terms of paragraph (b) below), or (z)
following the commencement of any suit or action by the Company against the Holder, and upon ten
(10) Business Days’ prior written notice to the Senior Lender, any compulsory or mandatory
counterclaim that may then be available to the Holder. All proceeds received by the Holder from
the exercise of any of its rights and remedies hereunder shall be remitted to the Senior Lender to
be applied to the Senior Debt, until the Senior Debt has been paid and performed in full;
provided, however, so long as no default or event of default has occurred under any
document,

-7-

 

instrument or agreement evidencing, securing or relating to the Senior Debt, all proceeds of
Permitted Payments may be retained by the Holder; provided, further, that any
amounts to which the Holder is entitled under the Collateral Agreement in effect on the date hereof
which the Holder receives may be retained by the Holder regardless of whether or not a default or
event of default has occurred with respect to the Senior Debt. Upon the payment and performance in
full of all of the Senior Debt, Holder shall be subrogated, without any further action by the
Holder or the Senior Lender, to all rights, privileges and claims of the Senior Lender with respect
to the Senior Debt against which any such remittances are applied, including, without limitation,
the rights of the Senior Lender as a secured party under any security agreement or arrangement with
the Company (collectively, “Subrogation”); provided, however, nothing in
this sentence shall impair or affect any of the Senior Lender’s rights under paragraph (c) below.
Notwithstanding anything herein to the contrary, nothing contained herein shall prevent the Holder
from converting this Debenture into Common Stock as provided herein.

          (b) The Holder agrees that upon any distribution of the assets or readjustment of the
indebtedness of the Company whether by reason of liquidation, composition, bankruptcy,
receivership, assignment for the benefit of creditors or any other action or proceeding involving
the readjustment of all or any of the Debenture Obligations, or the application of the assets of
the Company to the payment or liquidation thereof, the Senior Lender shall be entitled to receive
payment in full in cash of all of the Senior Debt prior to the payment of all or any part of the
Debenture Obligations, and in order to enable the Senior Lender to enforce its rights hereunder in
any such action or proceeding, the Senior Lender is hereby irrevocably authorized and empowered in
its sole discretion (but without any obligation on its part) to make and present for and on behalf
of the Holder such proofs of claim against the Company on account of the Debenture Obligations (but
only if the Holder does not do so at least 10 days prior to the expiration of the time to file such
proofs of claim in such proceeding) as the Senior Lender may deem expedient or proper and, if the
Senior Lender has received written confirmation from the Holder that the Holder does not intend to
vote or if the Senior Lender has not received such confirmation from the Holder at least ten (10)
days prior to any deadline for voting such proofs of claim, to vote such proofs of claim in any
such proceeding and to receive and collect any and all dividends or other payments or disbursements
made thereon in whatever form the same may be paid or issued, to apply same on account of the
Senior Debt until the Senior Debt is paid in full and to remit any balance to the Holder. The
Holder further agrees to execute and deliver to the Senior Lender such assignments or other
instruments as reasonably may be required by the Senior Lender in order to enable the Senior Lender
to enforce any and all such claims and to collect any and all dividends or other payments or
disbursements which may be made at any time on account of all and any of the Debenture Obligations.
Any amounts received by the Holder contrary to the provisions of this Section shall be held in
trust by the Holder for the benefit of the Senior Lender and shall forthwith be paid over to the
Senior Lender to be applied to the Senior Debt in such order as the Senior Lender in its sole
discretion shall determine, without limiting any other right of the Senior Lender hereunder or
otherwise and without otherwise affecting the liability of the Holder. Upon the payment and
performance in full of all of the Senior Debt, the Holder shall be entitled to Subrogation with
respect to any amounts received, collected or paid to the Senior Lender under this paragraph (b).

-8-

 

          (c) The Holder agrees that, in addition to any other rights that the Senior Lender may have at
law or in equity, the Senior Lender may at any time, and from time to time, without the Holder’s
consent and without notice to the Holder, renew, extend or increase any of the Senior Debt or that
of any other person at any time directly or indirectly liable for the payment of any Senior Debt,
accept partial payments of the Senior Debt, settle, release (by operation of law or otherwise),
compound, compromise, collect or liquidate any of the Senior Debt, make loans or advances to the
Company secured in whole or in part by collateral or unsecured or refrain from making any loans or
advances to the Company, change, waive, alter or vary the interest charge on, or any other terms or
provisions of the Senior Debt or any present or future instrument, document or agreement between
the Senior Lender and the Company, release, exchange, fail to perfect, delay the perfection of,
fail to resort to, or realize upon any collateral (other than amounts held in the Collateral
Account), and take any other action or omit to take any other action with respect to the Senior
Debt or any such collateral as the Senior Lender deems necessary or advisable in the Senior
Lender’s sole discretion.

          (d) In the event of any financing of the Company by the Senior Lender during a bankruptcy or
reorganization of Company, the Holder agrees that the term “Senior Debt” shall include without
limitation all indebtedness, liabilities and obligations incurred in any such proceeding, and the
Holder agrees to take such actions and execute such documents in such proceedings as may be
reasonably necessary in order to effectuate the foregoing.

          (e) The Holder agrees not to contest (i) the validity, perfection, priority or enforceability
of the Senior Debt or the Senior Lender’s security interest in any collateral (other than amounts
held in the Collateral Account) or (ii) whether any interest accruing after the commencement of any
bankruptcy or reorganization proceeding with respect to the Company is recoverable from the Company
or allowable or provable in any such proceeding. The Senior Lender agrees not to contest the
enforceability of the Collateral Agreement or the Holder’s exclusive rights (subject to the express
terms of the Collateral Agreement) to any amounts held in the Collateral Account.

          (f) If, after payment of the Senior Debt, any payment made on the Senior Debt shall for any
reason be set aside, the provisions of this Section 1A shall thereupon in all respects
become effective with respect to such reinstated Senior Debt, without the necessity of any further
act or agreement between the Senior Lender and the Holder.

          (g) In the event of any litigation between the Senior Lender and the Holder based upon or
arising out of the provisions this Section 1A, the prevailing party shall be entitled to
recover all of its reasonable costs and expenses (including without limitation reasonable attorneys
fees) from the non-prevailing party.

          (h) The Senior Lender is a third-party beneficiary of the provisions of this Section 1A and
none of the provisions of this Section 1A may be changed without the prior written consent
of the Senior Lender.

-9-

 

2. INTEREST AND PRINCIPAL PAYMENTS.

          (a) Interest Accrual. This Debenture shall bear interest on the unpaid principal
amount hereof (“Interest”) at an annual rate equal to six (6.0%), computed on the basis of
a 360-day year and calculated using the actual number of days elapsed since the Issue Date or the
date on which Interest was most recently paid, as the case may be, and if not timely paid as
provided herein, compounded quarterly on each Scheduled Interest Payment Date. The Company shall
make payments of accrued and unpaid Interest (each, an “Interest Payment”) in cash (i) on
each Scheduled Interest Payment Date, (ii) on the Maturity Date and (iii) on any date on which the
entire principal amount of this Debenture is paid in full (whether through conversion or otherwise)
(each of (i), (ii) and (iii) being referred to herein as an “Interest Payment Date”).

          (b) Adjustment to Interest Rate. If, on the date that is the one-year anniversary of
the Issue Date, the Fed Funds Rate is equal to or greater than 3.25%, then the rate of Interest
payable hereunder shall, effective as of such date and at all times thereafter, automatically
increase to an annual rate of six and three-quarters percent (6.75%).

          (c) Quarterly Principal Payments. Beginning on the eighteen (18) month anniversary
of the Issue Date, the Company shall make quarterly payments of principal (each, a “Principal
Payment”), as follows: (A) during the period beginning on such eighteen month anniversary and
ending on the last day of the third year following the Issue Date, the Company shall pay to the
Holder each quarter an amount equal to 1/4 of the original principal amount of this Debenture
times .25, and (B) during the fourth year following the Issue Date, the Company shall pay
to the Holder each quarter an amount equal to 1/4 of the original principal amount of this
Debenture times .50, until the outstanding principal balance of this Debenture has been
paid in full. The Company shall make Principal Payments on the first Business Day of each calendar
quarter commencing with the partial quarter beginning on August 1, 2006 (with the Principal Payment
payable on such date to be in an amount equal to two-third (2/3) of the amount calculated pursuant
to clause (c)(A) above) and thereafter on each October 1, January 1, April 1 and July 1 or, if any
such date is not a Business Day, on the next succeeding Business Day (each such Business Day, a
“Principal Payment Date”). Conversions of principal effected during a calendar quarter
shall not affect the amount of any Principal Payment otherwise payable hereunder.

          (d) Payments in Common Stock. The Company shall make Interest Payments and Principal
Payments in cash by wire transfer of immediately available funds; provided, however, that, subject
to the satisfaction of all of the Stock Payment Conditions as specified in paragraph (e)
below, the Company may elect to pay all or a portion of the Interest due on a Scheduled Interest
Payment Date or principal due on a Principal Payment Date, as the case may be, in shares of Common
Stock (the “Stock Option”). Interest or principal payments that are due in cash and not
paid within five (5) Business Days of the due date therefor shall bear interest until paid at the
Default Interest Rate.

          (e) Conditions to Interest Payment in Common Stock. The Company shall be entitled to
exercise the Stock Option with respect to a Scheduled Interest Payment Date or Principal Payment
Date only if, on such date and on each of the twenty (20) Trading Days immediately preceding such
date, (i) all of the Stock Payment Conditions are satisfied in full and (ii) the number

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of shares of Common Stock authorized and reserved for issuance pursuant to the Debentures and the
Series A Warrants (and, following Shareholder Approval, the Series B Warrants) is equal to or
greater than (A) the number of shares of Common Stock issuable upon the conversion or exercise of
the Debentures and the Series A Warrants (and, following Shareholder Approval, the Series B
Warrants), without giving effect to any restrictions on such conversion or exercise, plus
(B) the number of shares of Common Stock issuable on such Scheduled Interest Payment Date or
Principal Payment Date. In the event that any condition specified in (i) or (ii) above is not
satisfied as of the applicable Scheduled Interest Payment Date or Principal Payment Date, as the
case may be, and each such Trading Day, the Company shall not be permitted to exercise the Stock
Option and must pay all amounts due on such Scheduled Interest Payment Date or Principal Payment
Date, as the case may be, in cash by wire transfer of immediately available funds.

          (f) Stock Option Notice. In order to exercise the Stock Option with respect to a
Scheduled Interest Payment Date or Principal Payment Date, the Company must deliver, on or before
the tenth (10th) Trading Day immediately prior to such date, written notice to the
Holder stating that the Company wishes to exercise such option and the amount of Interest or
principal to be paid in shares of Common Stock (a “Stock Option Notice”). A Stock Option
Notice, once delivered by the Company, shall be irrevocable (although still subject to the
conditions specified in paragraph (e) above). In the event that the Company does not deliver a
Stock Option Notice on or before such tenth Trading Day, the Company will be deemed to have elected
to pay the amount then due in cash.

          (g) Delivery of Shares. On or before the third (3rd) Business Day
following a Scheduled Interest Payment Date or Principal Payment Date with respect to which the
Company has validly exercised the Stock Option (each a “Stock Option Delivery Date”), the
Company must deliver to the Holder a number of shares of Common Stock equal to (A) the amount of
Interest or Principal due on such date divided by (B) ninety-five percent (95%) of the
Market Price in effect on such date. The Company must deliver such shares of Common Stock to the
Holder in accordance with the provisions of paragraph 3(d) below, with the Stock Option
Delivery Date being deemed the Delivery Date, and in the event of the Company’s failure to effect
such delivery on the applicable Delivery Date therefor (determined in accordance with paragraph
3(d)), the Holder shall have the remedies specified in paragraph 3(e) below.

3. CONVERSION.

          (a) Right to Convert. Subject to the conditions and limitations specifically provided
herein or in the Securities Purchase Agreement, the Holder shall have the right to convert, at any
time and from time to time after the Issue Date, (i) all or any part of the outstanding and unpaid
principal amount of this Debenture and (ii) at the same time that it converts such principal, at
the Holder’s option in its sole discretion, all or any part of accrued and unpaid Interest hereon,
into such number of fully paid and non-assessable Conversion Shares as is determined in accordance
with the terms hereof (a “Conversion”). In the event that the Holder elects to convert all
or any Interest accrued hereon, the amount of Interest otherwise due and payable hereunder shall be
reduced by the amount so converted.

          (b) Conversion Notice. In order to convert principal of (and, if the Holder so
elects, Interest accrued on) this Debenture, the Holder shall send by facsimile transmission, at

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any time prior to 5:00 p.m., eastern time, on the Business Day on which the Holder wishes to
effect such Conversion (the “Conversion Date”), a properly completed notice of conversion
to the Company, in the form set forth on Annex I hereto, stating the amount of principal
(and accrued Interest, if applicable) to be converted and a calculation of the number of shares of
Common Stock issuable upon such Conversion (a “Conversion Notice”). The Conversion Notice
shall also state the name or names (with address) in which the shares of Common Stock that are
issuable on such conversion shall be issued. The Holder shall not be required to physically
surrender this Debenture to the Company in order to effect a Conversion. The Company shall
maintain a record showing, at any given time, the unpaid principal amount of this Debenture and the
date of each Conversion or other payment of principal hereof. The Holder shall amend Annex
II hereto upon any such Conversion or payment of principal to reflect the unpaid principal
amount hereof. In the case of a dispute as to the number of Conversion Shares issuable upon a
Conversion (including without limitation as a result of adjustments to the Conversion Price made in
accordance with Section 4 below), the Company shall promptly issue to the Holder the number
of Conversion Shares that are not disputed and shall submit the disputed calculations to its
independent accountants within two (2) Business Days of receipt of the Holder’s Conversion Notice.
The Company shall use its best efforts to cause such accountants to calculate the Conversion Price
as provided herein and to notify the Company and the Holder of the results in writing no later than
two (2) Business Days following the day on which such accountant received the disputed calculations
(the “Dispute Procedure”). Such accountant’s calculation shall be deemed conclusive absent
manifest error. The fees of any such accountant shall be borne by the party whose calculations are
most at variance with those of such accountant.

          (c) Number of Conversion Shares; Conversion Price. The number of Conversion Shares to
be delivered by the Company pursuant to a Conversion shall be equal to the principal amount of
(and, if the Holder so elects, Interest accrued on) this Debenture being converted divided
by the Conversion Price.

          (d) Delivery of Common Stock Upon Conversion. Upon receipt of a Conversion Notice,
the Company shall, no later than the close of business on the third (3rd) Business Day following
the Conversion Date set forth in such Conversion Notice (the “Delivery Date”), issue and
deliver or cause to be delivered to the Holder the number of Conversion Shares determined pursuant
to paragraph 3(c) above, provided, however, that any Conversion Shares that are the subject
of a Dispute Procedure shall be delivered no later than the close of business on the third (3rd)
Business Day following the determination made pursuant thereto. The Company shall effect delivery
of Conversion Shares to the Holder, as long as the Company’s designated transfer agent or
co-transfer agent in the United States for the Common Stock (the “Transfer Agent”)
participates in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer
program (“FAST”) and no restrictive legend is required pursuant to the terms of this
Debenture or the Securities Purchase Agreement, by crediting the account of the Holder or its
nominee at DTC (as specified in the applicable Conversion Notice) with the number of Conversion
Shares required to be delivered, no later than the close of business on such Delivery Date. In the
event that the Transfer Agent is not a participant in FAST or if the Holder so specifies in a
Conversion Notice or otherwise in writing on or before the Conversion Date, the Company shall
effect delivery of Conversion Shares by delivering to the Holder or its nominee physical
certificates representing such Conversion Shares, no later than the close of business on such
Delivery Date. If

-12-

 

any Conversion would create a fractional Conversion Share, such fractional Conversion Share
shall be disregarded and the number of Conversion Shares issuable upon such Conversion, in the
aggregate, shall be the nearest whole number of Conversion Shares. Conversion Shares delivered to
the Holder shall not contain any restrictive legend unless such legend is required pursuant to the
terms of the Securities Purchase Agreement.

          (e) Failure to Deliver Conversion Shares.

               (i) In the event that the Company fails for any reason to deliver to the Holder the number of
Conversion Shares specified in a Conversion Notice (without any restrictive legend to the extent
permitted by the terms of the Securities Purchase Agreement) on or before the second (2d) Business
Day following the Delivery Date therefor (a “Conversion Default”), (A) the Company shall
forfeit its right to require a Forced Conversion (as defined in Section 5 below) of the
Debentures thereafter, and (B) the Holder shall have the right to receive from the Company an
amount equal to (x) (N/365) multiplied by (y) the principal amount of this Debenture
represented by the Conversion Shares which remain the subject of such Conversion Default
multiplied by (z) the Default Interest Rate, where “N” equals the number of days elapsed
between the original Delivery Date of such Conversion Shares and the date on which such Conversion
Default has been cured. In the event that shares of Common Stock are purchased by or on behalf of
the Holder in order to make delivery on a sale effected in anticipation of receiving Conversion
Shares upon a Conversion, the Holder shall have the right to receive from the Company, in addition
to the foregoing amounts, (I) the aggregate amount paid by or on behalf of the Holder for such
shares of Common Stock minus (II) the aggregate amount of net proceeds, if any, received by
the Holder from the sale of the Conversion Shares issued by the Company pursuant to such
Conversion. Amounts payable under this paragraph (e)(i) shall be paid to the Holder in
immediately available funds on or before the fifth (5th) Business Day following written notice from
the Holder to the Company specifying the amount owed to it by the Company pursuant to this
paragraph (e)(i).

               (ii) In addition to its rights under paragraph (e)(i) above, the Holder shall have the
right to pursue all other remedies available to it at law or in equity (including, without
limitation, a decree of specific performance and/or injunctive relief).

          (f) Limitations on Right to Convert. In no event shall the Holder be permitted to
convert principal of or Interest on this Debenture if, upon such conversion, either:

               (i) (x) the number of Conversion Shares to be issued pursuant to such Conversion plus
(y) the number of shares of Common Stock beneficially owned by the Holder (other than Common Stock
which may be deemed beneficially owned except for being subject to a limitation on conversion or
exercise analogous to the limitation contained in this paragraph (f)(i)) would exceed 4.99%
of the number of shares of Common Stock then issued and outstanding, it being the intent of the
Company and the Holder that the Holder not be deemed at any time to have the power to vote or
dispose of greater than 4.99% of the number of shares of Common Stock issued and outstanding at any
time. Nothing contained herein shall be deemed to restrict the right of the Holder to convert such
excess principal amount at such time as such Conversion will not violate the provisions of this
paragraph (f)(i). As used herein, beneficial ownership shall be determined in accordance
with Section 13(d) of the Securities Exchange Act of

-13-

 

1934, as amended (the “Exchange Act”), and the rules thereunder. To the extent that
the limitation contained in this paragraph (f)(i) applies (and without limiting any rights
the Company may otherwise have), the Company may rely on the Holder’s determination of whether this
Debenture is convertible pursuant to the terms hereof, the Company shall have no obligation
whatsoever to verify or confirm the accuracy of such determination, and the submission of a
Conversion Notice by the Holder shall be deemed to be the Holder’s representation that this
Debenture is convertible pursuant to the terms hereof. The Company shall have no liability to any
person if the Holder’s determination of whether this Debenture is convertible pursuant to the terms
hereof is incorrect. The holders of Common Stock are to be deemed third-party beneficiaries of the
limitation imposed hereby and, accordingly, this paragraph may not be amended without the consent
of the holders of a majority of the shares of Common Stock then outstanding; provided, however,
that the Holder shall have the right, upon sixty (60) days’ prior written notice to the Company, to
waive the provisions of this paragraph (f)(i) in the event that either a Change of Control
or Liquidation Event is announced or occurs, without obtaining such consent; or

               (ii) the number of Conversion Shares that the Holder would receive upon such conversion, when
added to the number of Conversion Shares and Warrant Shares previously received by the Holder
pursuant to this Debenture and such Holder’s Warrants, would exceed the product of (A) the Cap
Amount multiplied by (B) a fraction, the numerator of which is the number of Conversion
Shares originally issuable under this Debenture and the denominator of which is the aggregate
number of Conversion Shares originally issuable under all of the Debentures (such product, the
“Allocation Amount”), provided, that this paragraph (ii) shall not apply if
Shareholder Approval has been obtained. In the event that any Investor to which this Debenture was
originally issued shall sell or otherwise transfer any part of this Debenture, the remaining
Conversion Shares constituting such transferring Investor’s Allocation Amount shall be allocated
between the transferring Investor and the transferee in proportion to amount of this Debenture
being transferred. In the event that, at any time, the aggregate number of Conversion Shares
issued and issuable under this Debenture exceeds eighty percent (80%) of the Holder’s Allocation
Amount, the Company shall, upon the written request of the Holder, hold as promptly as reasonably
practicable (but in no event later than the sixtieth (60) day following such request) a special
meeting of its shareholders for the purpose of obtaining, and use its best efforts to obtain,
Shareholder Approval. In the event that the shareholders do not approve such transactions at such
meeting, the Company shall continue to use its best efforts to seek such approval as soon as
practicable after such meeting, but no less frequently than annually thereafter.

4. ADJUSTMENTS TO CONVERSION PRICE.

          (a) Stock Splits, Stock Interests, Etc. If, at any time on or after the Issue Date,
the number of outstanding shares of Common Stock is increased by a stock split, stock dividend,
combination, reclassification or other similar event, the Conversion Price shall be proportionately
reduced, or if the number of outstanding shares of Common Stock is decreased by a reverse stock
split, combination, reclassification or other similar event, the Conversion Price shall be
proportionately increased. In such event, the Company shall notify the Company’s transfer agent of
such change on or before the effective date thereof.

          (b) Major Transactions. If, at any time after the Issue Date, any Major Transaction
shall occur, then the Holder shall thereafter have the right to receive upon

-14-

 

Conversion, in lieu of the shares of Common Stock otherwise issuable, such shares of stock,
securities and/or other property as would have been issued or payable upon such Major Transaction
with respect to or in exchange for the number of shares of Common Stock which would have been
issuable upon Conversion had such Major Transaction not taken place (without giving effect to any
limitations on such Conversion contained in this Debenture or the Securities Purchase Agreement).
The Company shall not effect any Major Transaction unless (i) the Holder has received written
notice of such transaction at least thirty (30) days prior thereto (which period shall be increased
to sixty one (61) days if, at such time, without giving effect to the limitation on conversion
contained in paragraph 3(f)(i) hereof, the Holder would, upon conversion, beneficially own
more than 4.9% of the Common Stock then outstanding, and the Holder has notified the Company in
writing of such circumstance) but in no event later than fifteen (15) days prior to the record date
for the determination of shareholders entitled to vote with respect thereto; provided, however,
that the Company shall publicly disclose the material terms of any such Major Transaction on or
before the date on which it delivers notice of a Major Transaction to the Holder, and (ii) the
resulting successor or acquiring entity (if not the Company) assumes by written instrument (in form
and substance reasonable satisfactory to the Holder) the obligations of the Company under this
Debenture (including, without limitation, the obligation to make payments of Interest accrued but
unpaid through the date of such consolidation, merger or sale and accruing thereafter). The above
provisions shall apply regardless of whether or not there would have been a sufficient number of
shares of Common Stock authorized and available for issuance upon conversion of this Debenture as
of the date of such transaction, and shall similarly apply to successive Major Transactions.

          (c) Distributions. If, at any time after the Issue Date, the Company declares or
makes any distribution of cash or any other assets (or rights to acquire such assets) to holders of
Common Stock, including without limitation any dividend or distribution to the Company’s
shareholders in shares (or rights to acquire shares) of capital stock of a Subsidiary) (a
“Distribution”), the Company shall deliver written notice of such Distribution (a
“Distribution Notice”) to the Holder at least fifteen (15) days prior to the earlier to
occur of (i) the record date for determining shareholders entitled to such Distribution (the
“Record Date”) and (ii) the date on which such Distribution is made (the “Distribution
Date”)(the earlier of such dates being referred to as the “Determination Date”). In
the Distribution Notice to the Holder, the Company shall indicate whether the Company has elected
(A) to deliver to the Holder, at the same time that it makes such Distribution to its shareholders,
the same amount and type of assets (including, without limitation, cash) being distributed as
though the Holder were, on the Determination Date, a holder of a number of shares of Common Stock
into which this Debenture is convertible as of such Determination Date (such number of shares to be
determined without giving effect to any limitations on such conversion) or (B) to reduce the
Conversion Price applicable to such Conversion by reducing the Conversion Price in effect on the
Business Day immediately preceding the Record Date by an amount equal to the fair market value of
the assets to be distributed divided by the number of shares of Common Stock as to which
such Distribution is to be made, such fair market value to be reasonably determined in good faith
by the independent members of the Company’s Board of Directors. If the Company does not notify the
Holder of its election pursuant to the preceding sentence on or before the fifteenth day
immediately prior to the Determination Date, the Company shall be deemed to have elected clause (A)
of the preceding sentence.

-15-

 

          (d) Convertible Securities; Purchase Rights. If, at any time after the Issue Date,
the Company issues any securities or other instruments which are convertible into or exercisable or
exchangeable for Common Stock (“Convertible Securities”) or options, warrants or other
rights to purchase or subscribe for Common Stock or Convertible Securities (“Purchase
Rights”) to the record holders of the Common Stock, whether or not such Convertible Securities
or Purchase Rights are immediately convertible, exercisable or exchangeable, then the Company shall
deliver to the Holder, at the same time that it issues such Convertible Securities or Purchase
Rights to its shareholders, the same amount of Convertible Securities or Purchase Rights and on the
same terms as though the Holder were, on the record date, a holder of a number of shares of Common
Stock into which this Debenture is convertible as of such record date (such number of shares to be
determined without giving effect to any limitations on such conversion).

          (e) Dilutive Issuances.

               (i) Adjustment Upon Dilutive Issuance. If, at any time after the Issue Date,
the Company issues or sells, or in accordance with subparagraph (ii) of this
paragraph (e) is deemed to have issued or sold, any shares of Common Stock for no
consideration or for a consideration per share less than the Conversion Price on the date of
such issuance or sale (or deemed issuance or sale) (a “Dilutive Issuance”), then the
Conversion Price shall be adjusted so as to equal an amount determined by multiplying such
Conversion Price by the following fraction:

     N0 + N1

     N0 + N2

          where:

	 	 	 	 	 
	

	 	N0 =
	 	the number of shares of Common Stock outstanding
immediately prior to the issuance, sale or deemed issuance or sale of
such additional shares of Common Stock in such Dilutive Issuance
(without taking into account any shares of Common Stock issuable upon
conversion, exchange or exercise of any Convertible Securities or
Purchase Rights, including the Debentures and Warrants);
	 
	

	 	N1 =
	 	the number of shares of Common Stock which the aggregate
consideration, if any, received or receivable by the Company for the
total number of such additional shares of Common Stock so issued, sold
or deemed issued or sold in such Dilutive Issuance (which, in the case
of a deemed issuance or sale, shall be calculated in accordance with
subparagraph (ii) below) would purchase at the Conversion Price
in effect immediately prior to such Dilutive Issuance; and
	 
	

	 	N2 =
	 	the number of such additional shares of Common Stock so
issued, sold or deemed issued or sold in such Dilutive Issuance.

-16-

 

                    Notwithstanding the foregoing, no adjustment shall be made pursuant hereto if such
adjustment would result in an increase in the Conversion Price.

               (ii) Effect On Conversion Price Of Certain Events. For purposes of determining the
adjusted Conversion Price under subparagraph (i) of this paragraph (e), the
following will be applicable:

                    (A) Issuance Of Purchase Rights. If the Company issues or sells any Purchase
Rights, whether or not immediately exercisable, and the price per share for which Common
Stock is issuable upon the exercise of such Purchase Rights (and the price of any conversion
of Convertible Securities, if applicable) is less than the Conversion Price in effect on the
date of issuance or sale of such Purchase Rights, then the maximum total number of shares of
Common Stock issuable upon the exercise of all such Purchase Rights (assuming full
conversion, exercise or exchange of Convertible Securities, if applicable) shall, as of the
date of the issuance or sale of such Purchase Rights, be deemed to be outstanding and to
have been issued and sold by the Company for such price per share. For purposes of the
preceding sentence, the “price per share for which Common Stock is issuable upon the
exercise of such Purchase Rights” shall be determined by dividing (x) the total amount, if
any, received or receivable by the Company as consideration for the issuance or sale of all
such Purchase Rights, plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of all such Purchase Rights, plus, in the
case of Convertible Securities issuable upon the exercise of such Purchase Rights, the
minimum aggregate amount of additional consideration payable upon the conversion, exercise
or exchange thereof (determined in accordance with the calculation method set forth in
subparagraph (ii)(B) below) at the time such Convertible Securities first become
convertible, exercisable or exchangeable, by (y) the maximum total number of shares of
Common Stock issuable upon the exercise of all such Purchase Rights (assuming full
conversion, exercise or exchange of Convertible Securities, if applicable). No further
adjustment to the Conversion Price shall be made upon the actual issuance of such Common
Stock upon the exercise of such Purchase Rights or upon the conversion, exercise or exchange
of Convertible Securities issuable upon exercise of such Purchase Rights. To the extent that
 shares of Common Stock or Convertible Securities are not delivered pursuant to such Purchase
Rights, upon the expiration or termination of such Purchase Rights, the Conversion Price
shall be readjusted to the Conversion Price that would then be in effect had the adjustments
made upon the issuance of such Purchase Rights been made on the basis of delivery of only
the number of shares of Common Stock actually delivered.

                    (B) Issuance Of Convertible Securities. If the Company issues or sells any
Convertible Securities, whether or not immediately convertible, exercisable or exchangeable,
and the price per share for which Common Stock is issuable upon such conversion, exercise or
exchange is less than the Conversion Price in effect on the date of issuance or sale of such
Convertible Securities, then the maximum total number of shares of Common Stock issuable
upon the conversion, exercise or exchange of all such Convertible Securities shall, as of
the date of the issuance or sale of such Convertible Securities, be deemed to be outstanding
and to have been issued and sold by the Company for such price per share. If the Convertible
Securities so issued or sold do not

-17-

 

 have a fluctuating conversion or exercise price or exchange ratio, then for the
purposes of the immediately preceding sentence, the “price per share for which Common Stock
is issuable upon such conversion, exercise or exchange” shall be determined by dividing (A)
the total amount, if any, received or receivable by the Company as consideration for the
issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the conversion, exercise or
exchange thereof (determined in accordance with the calculation method set forth in this
subparagraph (ii)(B)) at the time such Convertible Securities first become
convertible, exercisable or exchangeable, by (B) the maximum total number of shares of
Common Stock issuable upon the exercise, conversion or exchange of all such Convertible
Securities. If the Convertible Securities so issued or sold have a fluctuating conversion or
exercise price or exchange ratio (a “Variable Rate Convertible Security”); provided,
however, that if the conversion or exercise price or exchange ratio of a Convertible
Security may fluctuate solely as a result of provisions designed to protect against
dilution, such Convertible Security shall not be deemed to be a Variable Rate Convertible
Security, then for purposes of the first sentence of this subparagraph (b), the
“price per share for which Common Stock is issuable upon such conversion, exercise or
exchange” shall be deemed to be the lowest price per share which would be applicable
(assuming all holding period and other conditions to any discounts contained in such
Variable Rate Convertible Security have been satisfied) if the conversion price of such
Variable Rate Convertible Security on the date of issuance or sale thereof were seventy-five
percent (75%) of the actual conversion price on such date (the “Assumed Variable Market
Price”), and, further, if the conversion price of such Variable Rate Convertible
Security at any time or times thereafter is less than or equal to the Assumed Variable
Market Price last used for making any adjustment under this paragraph (e) with
respect to any Variable Rate Convertible Security, the Conversion Price in effect at such
time shall be readjusted to equal the Conversion Price which would have resulted if the
Assumed Variable Market Price at the time of issuance of the Variable Rate Convertible
Security had been seventy-five percent (75%) of the actual conversion price of such Variable
Rate Convertible Security existing at the time of the adjustment required by this sentence.
No further adjustment to the Conversion Price shall be made upon the actual issuance of such
Common Stock upon conversion, exercise or exchange of such Convertible Securities. To the
extent that shares of Common Stock are not delivered pursuant to conversion of such
Convertible Securities, upon the expiration or termination of the right to convert such
Convertible Securities into Common Stock, the Conversion Price shall be readjusted to the
Conversion Price that would then be in effect had the adjustments made upon the issuance of
such Convertible Securities been made on the basis of delivery of only the number of shares
of Common Stock actually delivered.

                    (C) Change In Option Price Or Conversion Rate. If there is a change at any
time in (x) the amount of additional consideration payable to the Company upon the exercise
of any Purchase Rights; (y) the amount of additional consideration, if any, payable to the
Company upon the conversion, exercise or exchange of any Convertible Securities; or (z) the
rate at which any Convertible Securities are convertible into or exercisable or exchangeable
for Common Stock (in each such case, other than under or by reason of provisions designed to
protect against dilution), the Conversion Price in effect at the time of such change shall
be readjusted to the Conversion Price which would

-18-

 

have been in effect at such time had such Purchase Rights or Convertible Securities
still outstanding provided for such changed additional consideration or changed conversion,
exercise or exchange rate, as the case may be, at the time initially issued or sold.

                    (D) Calculation Of Consideration Received. If any Common Stock, Purchase
Rights or Convertible Securities are issued or sold for cash, the consideration received
therefor will be the amount received by the Company therefor. In case any Common Stock,
Purchase Rights or Convertible Securities are issued or sold for a consideration part or all
of which shall be other than cash, including in the case of a strategic or similar
arrangement in which the other entity will provide services to the Company, purchase
services from the Company or otherwise provide intangible consideration to the Company, the
amount of the consideration other than cash received by the Company (including the net
present value of the consideration expected by the Company for the provided or purchased
services) shall be the fair market value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration received by
the Company will be the average of the last sale prices thereof on the principal market for
such securities during the period of ten Trading Days immediately preceding the date of
receipt. In case any Common Stock, Purchase Rights or Convertible Securities are issued in
connection with any merger or consolidation in which the Company is the surviving
corporation, the amount of consideration therefor will be deemed to be the fair market value
of such portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Purchase Rights or Convertible Securities, as the case
may be. Notwithstanding anything else herein to the contrary, if Common Stock, Purchase
Rights or Convertible Securities are issued or sold in conjunction with each other as part
of a single transaction or in a series of related transactions, the Holder may elect to
determine the amount of consideration deemed to be received by the Company therefor by
deducting the fair value of any type of securities (the “Disregarded Securities”)
issued or sold in such transaction or series of transactions. If the holder makes an
election pursuant to the immediately preceding sentence, no adjustment to the Conversion
Price shall be made pursuant to this paragraph (e) for the issuance of the
Disregarded Securities or upon any conversion, exercise or exchange thereof. The independent
members of the Company’s Board of Directors shall calculate reasonably and in good faith,
using standard commercial valuation methods appropriate for valuing such assets, the fair
market value of any consideration other than cash or securities.

                    (E) Issuances Pursuant To Existing Securities. If the Company issues (or
becomes obligated to issue) shares of Common Stock pursuant to any antidilution or similar
adjustments (other than as a result of stock splits, stock dividends and the like) contained
in any Convertible Securities or Purchase Rights outstanding as of the date hereof but not
specifically disclosed in a schedule to the Securities Purchase Agreement, then all shares
of Common Stock so issued shall be deemed to have been issued for no consideration. If the
Company issues (or becomes obligated to issue) shares of Common Stock pursuant to any
antidilution or similar adjustments contained in any Convertible Securities or Purchase
Rights specifically disclosed in a schedule to the Securities Purchase Agreement as a result
of the issuance of the Debentures or Warrants and the number of shares that the Company
issues (or is obligated to issue) as a result of such

-19-

 

initial issuance exceeds the amount specified in such schedule, such excess shares
shall be deemed to have been issued for no consideration.

          (iii) Exceptions To Adjustment Of Conversion Price. Notwithstanding the foregoing, no
adjustment to the Conversion Price shall be made pursuant to this paragraph (e) upon the
issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I)
securities purchased under the Securities Purchase Agreement; (II) securities issued upon
conversion or exercise of the Debentures or the Warrants; (III) shares of Common Stock issuable or
issued to (x) employees, consultants or directors from time to time upon the exercise of options,
in such case granted or to be granted in the discretion of the Board of Directors pursuant to one
or more stock option plans or restricted stock plans in effect as of the Issue Date or adopted
after the Issue Date by the independent members of the Board of Directors with substantially the
same terms as such plans in effect as of the Issue Date, or (y) vendors pursuant to warrants to
purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such
issuances are approved by the Board of Directors; (IV) the equity component of a commercial lending
transaction with a federally-insured financial institution that is approved by the independent
members of the Board of Directors, provided that the fair market value of such equity component,
including warrants, options or other rights to purchase capital stock and other interests
convertible into capital stock of the Company, does not exceed ten percent (10%) of the amount
borrowed; (V) shares of Common Stock issued in connection with any stock split, stock dividend or
recapitalization of the Company; (VI) shares of Common Stock issued in connection with the
acquisition by the Company of any corporation or other entity occurring after the Effective Date,
provided that, if in connection with such acquisition, the Company will issue a number of shares
equal to or greater than 20% of the number of shares of Common Stock issued and outstanding
immediately prior to the consummation of such acquisition, the Company shall obtain a fairness
opinion with respect to such acquisition from an investment bank of national recognition; (VII)
shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights
outstanding on the date hereof (and not amended, changed or restated after the date hereof) and
disclosed in a schedule to the Securities Purchase Agreement; and (VIII) shares issued to Persons
with whom the Company is entering into a joint venture, strategic alliance or other commercial
relationship in connection with the operation of the Company’s business and not in connection with
a transaction the purpose of which is to raise equity capital.

          (iv) Notice Of Adjustments. Upon the occurrence of each adjustment or readjustment of
the Conversion Price pursuant to this paragraph (e) resulting in a change in the Conversion
Price by more than one percent (1%), or any change in the number or type of stock, securities
and/or other property issuable upon Conversion of this Debenture, the Company, at its expense,
shall promptly compute such adjustment, readjustment or change and prepare and furnish to the
Holder a certificate setting forth such adjustment, readjustment or change and showing in detail
the facts upon which such adjustment, readjustment or change is based. The Company shall, upon the
written request at any time of the Holder, furnish to the Holder a like certificate setting forth
(i) such adjustment, readjustment or change, (ii) the Conversion Price at the time in effect and
(iii) the number of shares of Common Stock and the amount, if any, of other securities or property
which at the time would be received upon Conversion of this Debenture.

-20-

 

5. FORCED CONVERSION.

          (a) Forced Conversion. The Company shall have the right in the event that all of the
Forced Conversion Conditions are satisfied on each of twenty (20) Trading Days during a period of
thirty (30) consecutive Trading Days commencing after the Effective Date (a “Forced Conversion
Period”) and on the Forced Conversion Date, to require Conversion of this Debenture (a
“Forced Conversion”). In the event of a Forced Conversion, the Company and the Holder
shall follow the procedures for Conversion set forth in Section 3 above, with the Forced
Conversion Date (as defined below) deemed to be the Conversion Date for purposes of Section
3, except that the Holder shall not be required to send a Conversion Notice as contemplated by
paragraph (b) of Section 3.

          (b) Forced Conversion Notice; Number of Conversion Shares. In order to effect a Forced
Conversion hereunder, the Company must deliver to the Holder written notice thereof (a “Forced
Conversion Notice”) on or before 5:00 p.m. (eastern time) on the Business Day immediately
following the last Trading Day of the Forced Conversion Period (such Business Day, the “Forced
Conversion Date”) and, at the same time that it delivers such notice, the Company shall send a
copy of such notice by email as long as the Holder has provided an email address to the Company. A
Forced Conversion Notice shall specify the aggregate principal amount of the Debentures that the
Company elects to submit to a Forced Conversion; provided, however, that to the extent that the
aggregate number of Conversion Shares issuable pursuant to such Forced Conversion would exceed (i)
the aggregate trading volume for the Common Stock on the Principal Market during the twenty (20)
Trading Days immediately prior to the Forced Conversion Date and/or (ii) any limitation on
Conversion contained herein or in the Securities Purchase Agreement (in either such case, the
“Maximum Forced Conversion Amount”), then only such portion of the Debentures shall be
converted on such Forced Conversion Date as would not result in the Maximum Forced Conversion
Amount being exceeded. The principal amount of the Debentures subject to a Forced Conversion shall
be allocated among the holders of the Debentures on a pro rata basis. Notwithstanding the delivery
by the Company of a Forced Conversion Notice, nothing contained herein shall be deemed to limit in
any way (x) the right of the Holder to convert all or any part of this Debenture prior to the
Forced Conversion Date or (y) the availability of any and all remedies that are provided to the
Holder hereunder, including without limitation in the event that the Company fails to deliver
Conversion Shares upon a Forced Conversion as required by the terms of Section 3 hereof,
provided, that, in the event of such failure, the Forced Conversion shall be terminated with
respect to the Holder upon the delivery of written notice thereof by the Holder to the Company, and
the Company shall forfeit its right to require a Forced Conversion of this Debenture or any other
Debentures thereafter. On the Forced Conversion Date, an amount of principal of this Debenture
equal to (A) the Holder’s pro rata share of the aggregate principal amount specified in the Forced
Conversion Notice minus (B) the amount of principal of this Debenture converted by the Holder
during the twenty-two (22) Trading Days immediately preceding the Forced Conversion Date will be
converted into Conversion Shares. In the event of multiple Forced Conversions, at least sixty (60)
days must elapse between Forced Conversion Dates.

          (c) Upon any Forced Conversion, the Company shall pay to the Holder on the Forced Conversion
Date (i) accrued and unpaid interest through the Forced Conversion Date on

-21-

 

the principal amount of the Debenture so converted and (ii) in the event of a Forced Conversion
Date occurring prior to the second anniversary of the Issue Date, an amount equal to the Interest
that, but for such Forced Conversion, would have accrued on this Debenture (or portion thereof so
converted) over the two (2) years following such Issue Date. Such Interest shall be paid in cash
or, at the election of the Company (subject to the satisfaction of the Stock Payment Conditions and
otherwise on the terms and conditions set forth in Section 2 for the payment of Interest in
Common Stock, with the Forced Conversion Date being substituted for the Scheduled Interest Payment
Date), in shares of Common Stock.

6. EVENTS OF DEFAULT; MANDATORY REDEMPTION.

          (a) Mandatory Redemption. In the event that an Event of Default (as defined below)
occurs, the Holder shall have the right, upon written notice to the Company (a “Mandatory
Redemption Notice”), to have all or any portion of the unpaid principal amount of this
Debenture, plus all accrued and unpaid Interest thereon, redeemed by the Company (a “Mandatory
Redemption”) at the Mandatory Redemption Price (as defined below) in same day funds. The
Mandatory Redemption Notice shall specify the effective date of such Mandatory Redemption (the
“Mandatory Redemption Date”), which date must be at least five (5) Business Days following
the Business Day on which the Mandatory Redemption Notice is delivered to the Company, and the
amount of principal and Interest to be redeemed. In order to effect a Mandatory Redemption
hereunder, the Holder must deliver a Mandatory Redemption Notice no later than the close of
business on the Business Day immediately following the first Business Day on which an Event of
Default is no longer continuing; provided, however, that with respect to an Event of Default that
is a Change of Control, the Holder must deliver a Mandatory Redemption Notice no later than the
close of business on the third (3rd) Business Day following the date on which the Change
of Control is effected.

          (b) Mandatory Redemption Price. For purposes hereof, “Mandatory Redemption
Price” shall mean (i) the unpaid principal hereof multiplied by the Mandatory
Redemption Percentage plus (ii) all accrued and unpaid Interest hereon. For purposes hereof,
“Mandatory Redemption Percentage” means (x) where the Event of Default (as defined below)
constitutes a Change of Control, one hundred and twenty percent (120%) during the first year
following the Issue Date, one hundred and fifteen percent (115%) during the second year following
the Issue Date and one hundred and ten percent (110%) at all times following the second
(2nd) anniversary of the Issue Date, and (y) for all other Events of Default, one
hundred and one percent (101%).

          (c) Payment of Mandatory Redemption Price.

               (i) The Company shall pay the Mandatory Redemption Price to the Holder within five (5)
Business Days of the Mandatory Redemption Date. In the event that the Company redeems the entire
remaining unpaid principal amount of this Debenture, and pays to the Holder all Interest accrued
thereon and all other amounts due in connection therewith, the Holder shall return this Debenture
to the Company for cancellation.

               (ii) If the Company fails to pay the Mandatory Redemption Price to the Holder within five (5)
Business Days of the Mandatory Redemption Date, the Holder shall be

-22-

 

entitled to interest thereon at the Default Interest Rate from the Mandatory Redemption Date
until the date on which Mandatory Redemption Price has been paid in full.

          (d) Events of Default. Each of the following events shall be deemed an “Event of
Default”:

               (i) a Liquidation Event or a Change of Control occurs or is publicly announced;

               (ii) the Company breaches or provides notice of its intent to breach, in a material respect,
any covenant or other material term or condition of this Debenture (including without limitation
any payment obligation hereunder), the Securities Purchase Agreement, Registration Rights Agreement
or any other Transaction Document, including but not limited to the Company’s failure to deliver
Conversion Shares and Warrant Shares on or before the required delivery date therefor, and such
breach continues for a period of five (5) Business Days following written notice thereof from the
Holder;

               (iii) any breach by the Company of any representation or warranty made by the Company in this
Debenture, the Securities Purchase Agreement, the Registration Rights Agreement or any other
Transaction Document which breach has had, or could reasonably be expected to have, a material
adverse effect on (x) the consolidated business, operations, properties, financial condition,
prospects or results of operations of the Company and its Subsidiaries taken as a whole, (y) the
ability of the Company to perform its obligations under this Debenture or the other Transaction
Documents (as defined below) or (z) the ability of a Holder to exercise its rights under this
Debenture;

               (iv) a default occurs or is declared and is not cured within any applicable grace period, or
any amounts are accelerated, under or with respect to any instrument that evidences Debt of the
Company or any of its Subsidiaries in a principal amount exceeding $250,000;

               (v) the Company’s Common Stock ceases to be registered under the Exchange Act or to be listed
on the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange or the
American Stock Exchange; and

               (vi) a Governmental Authority renders a final judgment (whether pursuant to an adjudication,
arbitration, regulatory proceeding or otherwise) against the Company in an amount exceeding
$250,000, and the Company fails to pay such amount when it becomes due.

-23-

 

7. PREPAYMENT.

          The Company shall not be entitled to prepay principal of this Debenture without the prior
written consent of the Holder, which consent may be withheld for any reason (or for no reason)
within the sole discretion of the Holder.

8. MISCELLANEOUS.

          (a) Failure to Exercise Rights not Waiver. No failure or delay on the part of the
Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof. All rights and remedies of the Holder hereunder are
cumulative and not exclusive of any rights or remedies otherwise available.

          (b) Notices. Any notice, demand or request required or permitted to be given by the
Company or the Holder pursuant to the terms of this Debenture shall be in writing and shall be
deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such
delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to
be made on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to
an overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail
(certified or registered mail, return receipt requested, postage prepaid), addressed as follows:

	 	 	 
	

	 	If to the Company:
	 
	 	 
	

	 	Verso Technologies, Inc.
	

	 	400 Galleria Parkway, Suite 300
	

	 	Atlanta, GA 30339
	

	 	Attn: Chief Financial Officer
	

	 	Tel: (678) 589-3500
	

	 	Fax: (678) 589-3780
	 
	 	 
	

	 	with a copy (which shall not constitute notice) to:
	 
	 	 
	

	 	Rogers & Hardin LLP
	

	 	2700 International Tower
	

	 	229 Peachtree Street NE
	

	 	Atlanta, GA 30303
	

	 	Attn: Robert C. Hussle, Esq.
	

	 	Tel: (404) 522-4700
	

	 	Fax: (404) 525-2224

and if to the Holder, at such address as the Holder shall have furnished the Company in writing.

          (c) Amendments; Waivers. No amendment, modification or other change to this Debenture
may be made unless such amendment, modification or change is (A) set forth in writing and is signed
by the Company and the Holder and (B) agreed to in writing by the holders

-24-

 

of at least a majority of the unpaid principal amount of the Debentures, it being understood
that, notwithstanding anything to the contrary contained in any Debenture, upon the satisfaction of
the conditions described in (A) and (B) above, each Debenture (including any Debenture held by the
Holder who did not execute the agreement specified in (B) above) shall be deemed to incorporate any
amendment, modification or change effected thereby as of the effective date thereof.
Notwithstanding the foregoing, no Debenture shall be amended, modified or otherwise changed without
the written consent of the Holder thereof if such amendment, modification or change (i) does not
apply to all Holders in the same fashion or (ii) adversely affects such Holder’s rights under such
Debenture with respect to the payment of Principal or Interest, such Holder’s Conversion rights,
any Event of Default or the Mandatory Redemption of such Debenture upon any such Event of Default.
No provision of this Debenture may be waived other than in a writing signed by the holder hereof.

          (d) Transfer of Debenture. The Holder may sell, transfer or otherwise dispose of all
or any part of this Debenture (including without limitation pursuant to a pledge) to any person or
entity as long as such sale, transfer or disposition is the subject of an effective registration
statement under the Securities Act of 1933, as amended, and applicable state securities laws, or is
exempt from registration thereunder, and is otherwise made in accordance with the applicable
provisions of the Securities Purchase Agreement. From and after the date of any such sale,
transfer or disposition, the transferee hereof shall be deemed to be the holder of a Debenture in
the principal amount acquired by such transferee, and the Company shall, as promptly as
practicable, issue and deliver to such transferee a new debenture identical in all respects to this
Debenture, in the name of such transferee. The Company shall be entitled to treat the original
Holder as the holder of this entire Debenture unless and until it receives written notice of the
sale, transfer or disposition hereof.

          (e) Lost or Stolen Debenture. Upon receipt by the Company of evidence of the loss,
theft, destruction or mutilation of this Debenture, and (in the case of loss, theft or destruction)
of indemnity or security reasonably satisfactory to the Company, and upon surrender and
cancellation of the Debenture, if mutilated, the Company shall execute and deliver to the Holder a
new Debenture identical in all respects to this Debenture.

          (f) Governing Law. This Debenture shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be performed entirely
within the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City and County of New York for the adjudication of
any dispute hereunder or in connection herewith or with any transaction contemplated hereby and
hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy thereof to such party
at the address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law.

-25-

 

          (g) Successors and Assigns. The terms and conditions of this Debenture shall inure to
the benefit of and be binding upon the respective successors (whether by merger or otherwise) and
permitted assigns of the Company and the Holder. The Company may not assign its rights or
obligations under this Debenture except as specifically required or permitted pursuant to the terms
hereof.

          (h) Usury. At no time shall the Company be required to pay interest under this
Debenture at a rate that is in excess of the maximum interest rate permitted by applicable law. If
the Company is at any time required to pay interest hereunder at a rate in excess of such maximum
rate, such rate shall be deemed reduced to such maximum rate and all prior interest payments in
excess of such maximum rate shall be applied against the principal balance of this Debenture.

[Signature Page to Follow]

-26-

 

IN WITNESS WHEREOF, the Company has caused this Debenture to be signed in its name by its duly
authorized officer on the date first above written.

VERSO TECHNOLOGIES, INC.

	 	 	 
	By:
	 	 
	

	 	

	

	 	Name:
	

	 	Title:

-27-

 

ANNEX I

NOTICE OF CONVERSION

The undersigned hereby elects to convert principal of the 6% Senior Unsecured Convertible Debenture
(the “Debenture”) issued by VERSO TECHNOLOGIES, INC. (the “Corporation”) into shares of
common stock (“Common Stock”) of the Company according to the terms and conditions of the
Debenture. Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Debenture.

	 	 	 
	

	 	Date of Conversion: 

	 
	 	 
	

	 	Principal Amount of

Debenture to be Converted: 

	 
	 	 
	

	 	Amount of Interest

to be Converted: 

	 
	 	 
	

	 	Number of Shares of

Common Stock to be Issued: 

	 	 	 	 	 
	

	 	Name of Holder:
	 	

	

	 	Address:
	 	

	

	 	Signature:
	 	

	

	 	 	 	Name:
	

	 	 	 	Title:

Holder Requests Delivery to be made: (check one)

	 	 	 
	o

	 	By Delivery of Physical Certificates to the Above Address
	o

	 	Through Depository Trust Corporation
	

	 	(Account_________ )

 

 

ANNEX II

Schedule of

Decreases

of Principal Amount

	 	 	 	 	 
	Principal	 	Amount of	 	 
	Balance	 	Decrease	 	Date
	 	 	 	 	 
	$[ ],000,000

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