Document:

EXHIBIT 10.1

 

AMENDED AND RESTATED DEVELOPMENT, SUPPLY, MARKETING AND

DISTRIBUTION AGREEMENT

 

THIS AMENDED AND
RESTATED PRODUCT DEVELOPMENT, SUPPLY, MARKETING AND DISTRIBUTION AGREEMENT
(this “Agreement”) is made and entered into as of June 1, 2003, by and
between E-Z-EM, INC., a Delaware corporation (“EZEM”) and Vital Images, Inc., a
Minnesota corporation (“VTAL”).

 

RECITALS:

 

WHEREAS, the
parties entered into a Development, Supply, Marketing and Distribution
Agreement dated as of October 24, 2001 (the “Original Agreement”),
pursuant to which, inter alia, EZEM was appointed as VTAL’s exclusive
reseller of Appliances and EZEM received a royalty with respect to the sale by
VTAL of Options, all on the terms and conditions set forth in the Original
Agreement;

 

WHEREAS, the
parties have agreed that EZEM will no longer sell Appliances;

 

WHEREAS, the
parties have agreed to amend their agreement with respect to the sale by VTAL
of Options; and

 

WHEREAS, to effect
the foregoing and to effect such other changes as the parties have agreed upon,
the parties desire to amend and restate the Original Agreement as set forth
herein.

 

AGREEMENT:

 

NOW, THEREFORE, EZEM and VTAL agree as follows:

 

1.             ORIGINAL AGREEMENT.

 

This Agreement
amends and restates the Original Agreement in its entirety, provided however
that notwithstanding the foregoing, the Original Agreement shall remain in full
force and effect with respect to sales of Options by VTAL prior to June 1,
2003 and to sales of Appliances by EZEM.

 

2.             DEFINITIONS:

 

As used in this
Agreement, the following terms shall have the meanings indicated (whether used
in the singular or plural form), unless otherwise expressly provided:

 

2.1.          “Person”
shall mean an individual, a corporation, a partnership, an association, a joint
venture, limited liability company, government (or any agency or political
subdivision thereof), an unincorporated organization, a trust or other entity,
including, without limitation, an employee pension, profit sharing or other
benefit plan or trust.

 

1

 

2.2.          “Vitrea 2 Software”
means the current Vitrea® 2 software product of VTAL and any new versions
thereof made commercially available by VTAL (it being understood that VTAL
reserves the right to designate whether a software product constitutes a new
version of the Vitrea 2 software product or a new product).

 

2.3.          “Specification”
shall mean the specification for the virtual colonoscopy visualization and
analysis software modules of the Option; provided that such specification is
intended only as a general description of the parties’ expectations with
respect to the specification with respect to the Option, and shall be subject
to modification in accordance with Section 3.3 hereof.

 

2.4.          “Option” means
a virtual colonoscopy visualization and analysis software product consistent
with the Specification, whether licensed as an option for use in conjunction
with Vitrea
2 Software, incorporated into the Vitrea 2 Software as a standard feature,
licensed as a standalone product, licensed on an OEM basis or otherwise made
commercially available by VTAL, including any upgrades or new versions thereof
for which a separate fee is charged and which is not provided as a part of
maintenance and support.  For the avoidance of doubt, no Colon
Computer Aided Design (CAD) option is included in the term “Option” for
purposes hereof.

 

2.5.          “Appliance”
means a virtual colonoscopy visualization and analysis software product
substantially consistent with the Specification which (i) is designed to be
licensed and function on a standalone basis, that is, without need for a
separate license for Vitrea 2 Software and (ii) the principal
functionality of which is limited to CT virtual colonoscopy.

 

2.6.          “Affiliate”
means, with respect to a designated Person, any entity controlled by, in
control of, or under common control with such Person.  For the purposes of this definition, “control” means ownership or
control, direct or indirect, of more than fifty percent (50%) of the voting
capital or equity participation of an entity, or the possession otherwise,
directly or indirectly, of the power to direct the management or policies of
such Person.

 

2.7.          “Non-Affiliate”
means, with respect to a designated Person, a Person which is not such Person
or an Affiliate thereof.

 

2.8.          “Intellectual
Property” means all patents, patent applications and rights to file
patent applications throughout the world, including any substitutions,
extensions, reissues, renewals, divisions, continuations, or
continuations-in-part, and all copyrighted works, as well as any Confidential
Information, of a designated Person.

 

2.9.          “Claim”
means any claim, suit, action, demand or judgment, whether sounding in tort,
contract or otherwise (including, without limitation, claims based on theories
of warranty or strict liability).

 

 

2.10.        “Remedial
Action” means any recall, field corrective action or other
regulatory action with respect to any Option taken either by virtue of
applicable federal, state, foreign or other law or regulation or good business
judgment.

 

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

 

2.12.        “Act”
means the United States Food, Drug and Cosmetic Act, as amended, and the
regulations in force thereunder from time to time.

 

2.13.        “FDA”
means the Food and Drug Administration of the U.S. Department of Health and
Human Services.

 

2.14.        “Government
Approval” shall mean any approvals, licenses, registrations or
authorizations of any federal, state or local regulatory agency, department,
bureau or other government entity, foreign or domestic, necessary for use,
marketing, sale or distribution of the Option in a regulatory jurisdiction,
including without limitation the FDA.

 

2.15.        “Territory”
shall mean the entire world.

 

2.16.        “Center of
Excellence” shall mean a radiology group or department with
significant clinical expertise in the area of CT colonography with whom both
VTAL and EZEM wish to develop a close cooperative relationship to promote CT
colonography.

 

2.17.        “Option
Sales Price” means the gross sales prices of an Option sold by VTAL
or any VTAL Affiliate to a Non-Affiliate of VTAL, and not rejected under an
acceptance/rejection provision, net to the extent otherwise included in such
sales price of any transportation charges, insurance charges and sales, use,
excise or other taxes, duties or imposts paid or allowed and any other
governmental charges imposed upon the importation, use or sale of the Option;
provided that if the Option is sold bundled with another product, including as
an integral unsegregated part of Vitrea 2 Software, the gross sales price
of the Option shall be comprised of only the part of the price allocable to the
Option as reasonably determined in good faith by VTAL, which allocation, to the
extent possible, shall be based on the respective list prices of the component
parts of such bundled products on a stand-alone basis.  It is understood that the Option Sales Price
does not include charges for hardware, software other than the Option, services
(including installation, training and maintenance) or other fee or
charges.  While EZEM acknowledges that,
subject to the foregoing, VTAL has discretion in

 

 

pricing the Vitrea
2 Software and the Option, in the event VTAL discounts any of its software
products, including the Option, sold together from list price, such discount
shall for purposes of determining the Option Sales Prices be allocated ratably
over such software products based on their respective list prices.

 

2.18.        “Change in Control” means with respect to a
party hereto the occurrence of any of the following events with respect to such
party:

 

(a)           any “person” as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any
trustee or other fiduciary holding securities under any employee benefit plan
of the Company, or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes, including pursuant to a
tender or exchange offer for shares of Common Stock pursuant to which purchases
are made, the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of such party representing 50% or
more of the combined voting power of such party’s then outstanding securities;
or

 

(b)           during any thirty-six consecutive
calendar months, the individuals who constitute the board of directors of such
party on the first day of such period or any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by such board or nomination for election by such
party’s stockholders was approved or recommended by a vote of at least a
majority of the directors then still in office who either were directors on the
final day of such period, or whose appointment, election or nomination for
election was previously so approved or recommended, shall for any reason cease
to constitute at least a majority thereof; or

 

(c)           there is consummated a merger or
consolidation of such party or any direct or indirect subsidiary of such party
with any other corporation, other than a merger or consolidation which would
result in the voting securities of such party outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity or any parent thereof) more than 50% of the combined voting power of the
securities of such party or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, and in which no
“person” (as defined under subparagraph (a) above) acquires 50% or more of the
combined voting power of the securities of such party or such surviving entity
or parent thereof outstanding immediately after such merger or consolidation;
or

 

 

(d)           the stockholders of such party approve a
plan of complete liquidation or dissolution of such party not within Paragraph
14.2(a) hereof, or there is consummated an agreement for the sale or
disposition by such party of all or substantially all of such party’s assets,
other than a sale or disposition by such party of all or substantially all of
such party’s assets to an entity, more than 50% of the combined voting power of
the voting securities of which are owned by stockholders of such party in
substantially the same proportions as their ownership of such party immediately
prior to such sale.

 

2.19.        “Required Station” means all hardware and
software which VTAL from time to time designates as being that upon which a
single copy of Vitrea2 software
and the Option, in each case with all updates to date, are to be installed for
use, that is, hardware and software of the same specification as is then being
sold by VTAL to its customers for use with a single copy of Vitrea2 software and the Option, in each
case with all updates to date, all of which hardware shall be in good operating
condition and repair.

 

In addition to the
foregoing, terms such as “sale” and “purchase” and variants and synonyms
thereof are used herein for convenience only and refer to transactions
involving the grant of a software license for an Option.

 

3.             DEVELOPMENT.

 

3.1.          Development
Program.  VTAL will use commercially
reasonable efforts to continue the development of the Option in accordance with
the Specifications.

 

3.2.          Government
Approvals.  VTAL shall, at its cost
and expense, be solely responsible for obtaining and maintaining, and shall use
commercially reasonable efforts to obtain and maintain Government Approvals
required for the fully authorized sale, distribution and use of the Option in
the USA, Canada and the countries of the European Union as constituted on the
date hereof.

 

3.3.          Upgrades.  The parties shall meet up to twice annually,
as reasonably requested by either party, to discuss the evolution of and
modifications and/or upgrades to the Option and the associated engineering and
development costs, however, the evolution of the Option and the modifications
and/or upgrades to be made to it will be determined by VTAL in its
discretion.  For purposes hereof modifications
and/or upgrades will be deemed to include patents and other technology,
including code, acquired from third parties and incorporated into or otherwise
reflected in the Option.  Set forth on
Exhibit 3.3 are VTAL’s anticipated upgrade plans for 2004 and 2005.

 

VTAL and EZEM shall share equally in the cost of all modifications and
upgrades to the Option, including the cost of any royalties or other payments
made with respect to patents and other technology, including code, acquired
from third parties after the date hereof and incorporated into or incurred in
relation to

 

 

the modification or upgrading of the Option;  provided  that in no event shall EZEM’s share of
costs incurred pursuant to this Section exceed Two Hundred Thousand
Dollars (US$200,000) in any twelve (12) month period unless it shall consent in
writing to the contrary.

 

Subject to the foregoing, VTAL shall be entitled to set off against any
royalty payable to EZEM under Section 8.1 hereof EZEM’s share of the cost
of such modifications and upgrades incurred during the calendar quarter with
respect to which such royalty payment is made, and to the extent the amount of
such royalty is less than such share of the costs, VTAL shall be entitled to
invoice EZEM for all or the balance of such costs following the end of such
calendar quarter, which invoice will be payable within thirty (30) days.  In the event the amounts payable to VTAL by
EZEM in respect of the cost of any such modifications or upgrades during any
twelve (12) month period exceeds the royalty payments payable to EZEM during
such twelve (12) month period, EZEM shall be entitled to terminate this
Agreement upon written notice given to VTAL within sixty (60) days of the close
of such twelve (12) month period as contemplated by Section 14.2 (g).

 

4.             GENERAL OBLIGATIONS OF EZEM

 

4.1.          Marketing.  EZEM shall have the following obligations
with respect to the marketing of the Option:

 

(a)           To use its commercially reasonable
efforts to further the promotion and marketing of the Option in the Territory
and to refer all leads with respect to potential customers for the Option in
the Territory to VTAL, provided that EZEM shall not have any minimum
expenditure requirement in connection therewith;

 

(b)           To provide VTAL with reasonable
assistance with respect to specific sales as reasonably requested by VTAL;

 

(c)           To provide VTAL with appropriate details
of all complaints and bugs found in the Option, whether such complaints or bugs
were discovered by EZEM or customers of EZEM;

 

(d)           To attend and participate, in its sole
discretion and where commercially reasonable, in key radiology and GI
tradeshows/meetings, fairs and exhibitions in the Territory where such
participation will promote the Option, provided that EZEM shall so attend and
participate at a minimum at the annual meetings of the Radiological Society of
North America (RSNA), the European Congress of Radiology (ECR) and the
International Symposium on Virtual Colonscopy. 
For these three tradeshows/meetings, 
the responsibilities of EZEM to provide hardware and software are as set
forth in Section 6.1 hereto.  For
all other tradeshows/meetings, fairs and exhibitions, where EZEM determines, in
its discretion, that it is necessary

 

 

and appropriate to
provide hardware and software to promote the Option, the responsibilities of
EZEM to provide hardware and software are as set forth in Section 6.1;

 

(e)           To provide VTAL with its target CT
injector customer list on a quarterly basis, which list shall be considered
Confidential Information subject to Section 12.1 hereof and shall be used
by VTAL only for the purpose of selling the Option; and

 

(f)            To conduct its business in a professional
manner, which will reflect positively upon VTAL and the Option.

 

4.2.          EZEM
Demonstration License.  EZEM shall
on and prior to June 30, 2004 maintain up to twelve (12) software licenses
for the Option, and thereafter shall maintain eighteen (18) such licenses, at
no cost to EZEM solely for its own customer demonstration and promotional uses
(including, without limitation, CME courses), subject to the provisions of the
Demonstration License Agreement attached hereto as Exhibit 4.2.  VTAL will provide additional software
licenses, at no cost, as reasonably requested by EZEM to support EZEM’s sales
and marketing efforts.

 

4.3.          Promotional
Materials and Packaging.

 

(a)           VTAL
shall be responsible for the development of data sheets, brochures and other
marketing materials for the Option, which materials shall be made available by
VTAL to EZEM.

 

(b)           The
packaging, manuals and labeling for the Option will each prominently state at
least once that the Option “was developed, manufactured and supplied by VTAL
and is co-marketed by VTAL and EZEM.”

 

(c)           In
the event EZEM desires to develop its own marketing and sales materials
relating to the Option it may do so (including materials concerning both the
Option and EZEM products), subject to review and approval of such materials by
VTAL, such approval not to be unreasonably withheld.  All such material shall in any event prominently display the logo
of VTAL at least once and attribution to it as the developer, manufacturer and
supplier of the Option, and to the extent such materials include any images or
screen shots generated through or simulating the output of the Option, they
shall include any text and VTAL attribution of the type displayed when using
the Option in production. In the event that EZEM submits marketing and sales
materials relating to the Option to VTAL, VTAL shall review such materials and
respond to EZEM within four (4) weeks following submission by EZEM.  In no event shall EZEM distribute any
promotional materials for or related to the Option that have not been
previously approved in writing by VTAL.

                

 

4.4.          Ownership.  EZEM hereby acknowledges VTAL retains all
right, title and interest in and to the copyrights and other intellectual
property protecting or embodied in the Option. 
EZEM shall not reverse engineer, decompile or disassemble the Option.

 

4.5.          Competing
Products.  During the term of this
Agreement, EZEM shall not manufacture, clinically test, sell, rent, market,
distribute, promote or solicit the sale of any software products which permit
virtual endoscopy.

 

4.6.          EZEM
Expenses.  EZEM assumes full
responsibility for all its own costs and expenses incurred in carrying out its
obligations under this Agreement, including but not limited to all rents,
salaries, commissions, advertising, demonstrations, travel and accommodations;
provided, however, VTAL will provide training (including refresher training and
training concerning improvements) to EZEM at no charge for a reasonable number
of EZEM’s sales and technical support staff, at VTAL’s facilities or at any
other mutually-agreeable location, in the function and application of the
Option; provided, however, EZEM shall pay the salaries and all transportation
and living expenses for its staff.

 

5.             GENERAL OBLIGATIONS OF VTAL

 

5.1.          General
Obligations.  VTAL shall have the
following obligations with respect to performing its obligations hereunder:

 

(a)           To use its commercially reasonable
efforts to further the promotion and marketing of the Option in the Territory;

 

(b)           To be solely responsible for all aspects
of the sale, demonstration, pricing, manufacture, supply, installation,
training with respect to, technical support, maintenance and service of the Option;
except for the demonstration obligations of EZEM as contemplated hereby;

 

(c)           To use its commercially reasonable efforts to improve
the Option, including those improvements set forth on Schedule 5.1(c);

 

(d)           To abide by all applicable laws, rules and regulations
in the Territory, including without limitation those portions of the Act, as
amended, which apply to the manufacture, sale and distribution of medical
software and devices, current FDA Quality System Regulations and the U.S.
Foreign Corrupt Practices Act;

 

(e)           To provide or cause to be provided
adequate training and instruction to EZEM personnel in order to allow them to
properly promote and market the Option;

 

(f)            To provide EZEM with appropriate details
of all material complaints and bugs found in the Option, whether such
complaints or bugs were discovered by VTAL, customers of VTAL, EZEM or
customers of EZEM;

 

 

(g)           To provide EZEM on a quarterly basis with
a list of purchasers (including installation locations) of Vitrea 2 Software sold by it
(and if known, by its licensees), which list shall be considered Confidential
Information subject to Section 12.1 hereof and shall be used by EZEM only
for the purpose of providing its “VC tool kit” and other virtual colonoscopy
products to such purchasers;

 

(h)           To provide technical support for CME
sponsored courses;

 

(i)            To maintain an adequately trained and
staffed technical, engineering and manufacturing support group in order to
fulfill its obligations hereunder; and

 

(j)            To conduct its business in a professional
manner, which will reflect positively upon EZEM and the Option.

 

5.2.          VTAL
Expenses.  VTAL assumes full
responsibility for all its own costs and expenses incurred in carrying out its
obligations under this Agreement.

 

6.             ADDITIONAL AGREEMENTS BETWEEN VTAL AND
EZEM

 

6.1.          EZEM
is to maintain and provide on and prior to June 30, 2004 up to twelve (12)
Required Stations, and thereafter shall maintain and provide up to eighteen
(18) Required Stations, having resident thereon
Vitrea2 software and the Option provided by VTAL as contemplated by
Section 4.2 hereof, for use at all radiology and GI tradeshows/meetings,
fairs and exhibitions and all continuing medical education programs desiring to
utilize the Option, , together with all related applications support and
transport thereof to the site.  VTAL
shall (i) upgrade all EZEM licenses for its demonstration systems (including
without limitation those provided pursuant to Section 4.2) and CME systems
(including without limitation those provided pursuant to Section 7) at no
charge to EZEM, and shall continue to upgrade all such EZEM licenses at no
charge to EZEM as and when upgrades are available, and (ii) shall provide
set-up and training to users at such radiology and GI tradeshows/meetings, fairs
and exhibitions and all continuing medical education programs.

 

6.2.          VTAL
shall have the option of offering the EZEM “VC tool kit” as a starter pack for
VC procedures.  If VTAL exercises such
option, EZEM agrees to sell the “VC tool kit” to VTAL at its standard wholesale
price and on its standard terms and conditions.

 

6.3.          EZEM
and VTAL agree to meet (i) not less often than every six (6) months at a
location proposed alternatively by VTAL and EZEM and approved by the other
party, which approval may not be unreasonably withheld, to discuss development,
marketing and other support programs, and selling issues and (ii) not less
often than every two (2) years to review the strategic plan and any issues
relating to the implementation of this Agreement and the business relationship
contemplated

 

 

thereby, which
discussions shall in each case include a discussion of the pricing of the
Option.

 

7.             CENTERS OF EXCELLENCE

 

EZEM shall use
commercially reasonable efforts to enter into arrangements with at least five
institutions from among those identified in Exhibit 7. As well as such other
institutions, if any, as upon which the parties may agree in writing, to
establish and manage Centers of Excellence to validate and promote the use of
virtual colonoscopy and the use of the Option. 
VTAL shall cooperate and assist EZEM, at VTAL’s expense, in the
establishment of each Center of Excellence as EZEM shall reasonably request,
and VTAL shall further supply (without charge subject to the last sentence of
this Section) one Option per Center of Excellence (which may be an Appliance),
together with installation of such Option and maintenance thereof.  Except as specifically set forth above, EZEM
shall bear all cost associated with the establishment and support of each
Center of Excellence, including cost of training with respect to use of the
Option, which EZEM agrees to provide to each Center.  Any revenue derived from the sale of an Option to a Center for
Excellence shall be shared equally by the parties.

 

8.             ROYALTIES

 

8.1.          Royalties.  VTAL shall pay to EZEM an amount equal to
twenty-three percent (23%) of the Option Sales Price for each Option sold in
the Territory.  Such payment shall be
made within thirty (30) days of the close of the calendar quarter during which
such Option was shipped, as evidenced by an accompanying report showing
quarterly shipments of the Option and the Option Sales Price with respect
thereto (including the manner of calculation of the Option Sales Price if the
Option Sales Price is not broken out for the customer).

 

8.2.          Record-keeping;
Inspection and Audit.  VTAL agrees
to keep and maintain accurate records throughout the term of this Agreement of
all sales of the Option sufficient to permit calculation/confirmation of the
amounts payable under this Article 8, but shall only be required to
maintain such records for a period of five (5) years after the end of the
calendar quarter to which such records relate. 
EZEM shall have the right, from time to time, upon twenty (20) days
written notice to VTAL and at EZEM’s expense, to have an independent certified
public accountant reasonably acceptable to VTAL, audit the books or accounts
relating to calculation/confirmation of such amounts payable to the extent
necessary to verify the facts necessary to determine the accuracy thereof.  EZEM shall bear the cost of any such
accounting by it, unless the audit shows a discrepancy in EZEM’s favor of more
than 10%, in which case VTAL shall be responsible for all costs and expenses
related to the audit.  EZEM agrees to treat
VTAL’s books, accounts, and records as confidential at all times.

 

 

9.             ADVERSE REACTIONS; PRODUCT RECALLS

 

9.1.          Compliance.  VTAL shall comply with all applicable
regulatory requirements.  VTAL shall
comply with all health registration laws, regulations and orders of any
government entity within the Territory and with all other governmental
requirements relating to the manufacture and sale of the Option in each country
in the Territory. VTAL and EZEM shall each comply with all health registration laws,
regulations and orders of any government entity within the Territory and with
all other governmental requirements relating to the promotion and marketing of
the Option in each country in the Territory. 
EZEM shall submit all advertising claims to VTAL for written approval
prior to their first use by any party, such consent not to be unreasonably
withheld.  VTAL shall review such
advertising claims and respond to EZEM within four (4) weeks following
submission by EZEM.

 

9.2.          Adverse
Event Reporting.  Each party shall
advise the other party by telephone or facsimile, within twenty-four (24) hours
after it becomes aware of any adverse event from the use of any Option.  VTAL shall be responsible for contacting the
FDA or any other comparable regulatory agency elsewhere in the world as
required in the event of any adverse events regarding the Option.

 

9.3.          Corrective
Action.

 

(a)           Notice of Corrective Action. 
If VTAL believes that a corrective action with respect to the Option is
desirable or required by law, or if any governmental agency having jurisdiction
(including, without limitation, the FDA) shall request or order any corrective
action with respect to the Option, including any recall, customer notice,
restriction, change, corrective action or market action or any Option change,
VTAL shall promptly notify EZEM.  Any
and all corrective actions with respect to the Option shall be conducted at the
expense of VTAL.  This Section 9.3
shall not limit the obligations of either party under law regarding any corrective
action with respect to the Option required by law or properly mandated by
governmental authority.

 

(b)           Inspections. 
VTAL will notify EZEM within two (2) business days of the completion of
any inspection activity directed at the Option by any regulatory authority,
including without limitation the FDA, and shall promptly provide EZEM with the
results therefrom, including without limitation any FDA form 483 or warning
letters.

 

10.           INDEMNIFICATION; INSURANCE

 

10.1.        Indemnification.

 

(a)           VTAL shall defend, indemnify and hold
EZEM , its agents, employees and independent contractors harmless from and
against any and all claims, damages, loss and expenses including without
limitation, reasonable

 

 

attorney’s fees,
which may hereafter be asserted against or suffered by EZEM , its agents,
employees and independent contractors for injury or death, damage to property
or other third party claims to the extent such claims arise from the Option,
the Vitrea 2 Software, any VTAL
product incorporating the Option or the Vitrea
2 Software, or the fault or negligence of, VTAL its agents,
employees and independent contractors. 
Such indemnification obligation under this Section shall not be
limited in any way by any limitation on the amount or types of damages,
compensation or benefits, payable by VTAL under workers’ compensation acts,
disability benefit acts or other employee benefit acts or by the provisions of
any insurance.

 

(b)           EZEM shall defend, indemnify and hold
VTAL, its agents, employees and independent contractors harmless from and
against any and all claims, damages, loss and expenses including without
limitation, reasonable attorney’s fees, which may hereafter be asserted against
or suffered by VTAL, its agents, employees and independent contractors for
injury or death, damage to property or other third party claims to the extent
such claims arise from EZEM’s “VC tool kit” to the extent such kit is marketed
and sold by VTAL pursuant to Section 6.2, or the fault or negligence of,
EZEM, its agents, employees and independent contractors.  Such indemnification obligation under this
Section shall not be limited in any way by any limitation on the amount or
types of damages, compensation or benefits, payable by EZEM under workers’
compensation acts, disability benefit acts or other employee benefit acts or by
the provisions of any insurance.

 

(c)           VTAL and EZEM agree to give each other
prompt written notice (including the fullest information reasonably obtainable
at the time) of any indemnifiable claims, demand, loss, damage, liability or
expense of which it obtains knowledge. 
The indemnifying party shall have the right to select counsel for and
control defense of the claim (which counsel shall be reasonably accepted to all
such parties).  Each party agrees to
cooperate fully in the defense of any claim, demand, loss, damage, liability,
or expense.  Neither party shall have
the right to settle any claim, demand, loss, damage, liability, or expense for
which it is indemnifying any party hereunder without the written consent of the
other party, which consent shall not be unreasonably withheld or delayed.

 

10.2.        Third
Party Infringement Indemnity.  VTAL
hereby agrees to indemnify, defend and hold EZEM harmless from any third party
suit, claim or other legal action, including any and all claims, damages, loss
and expenses arising therefrom, including without limitation, reasonable
attorney’s fees, (“Legal Action”) that alleges the Option infringes any United
States patent, copyright, or trade secret, including specifically any patents
held by PointDx Inc.  VTAL shall be
given written notice of any Legal Action within fifteen (15) days of EZEM’s
first

 

 

knowledge
thereof and VTAL shall provide EZEM written notice of any Legal Action within
fifteen (15) days of VTAL’s first knowledge thereof.  VTAL shall have sole and exclusive control of the defense of any
Legal Action, including the choice and direction of any legal counsel, and EZEM
may not settle or compromise any Legal Action without the written consent of
VTAL.  If an Option is found to infringe
any such third party intellectual property right in such a Legal Action, it
shall so notify EZEM in writing, which will thereupon cease and be excused from
further marketing efforts with respect to the Option hereunder, pending resolution
in accordance with the following: at VTAL’ sole discretion and expense, VTAL
may (i) obtain a license from such third party for the benefit of EZEM; (ii)
replace or modify the Option so that it is no longer infringing; or (iii) if
neither of the foregoing is commercially feasible, either party may terminate
this Agreement.  VTAL’s obligation to a
customer with respect to infringement shall be controlled exclusively by its
agreement with such end user.

 

10.3.        Insurance.  During the term of this Agreement and for a
period of three (3) years thereafter, each party shall carry adequate insurance
to cover its obligations hereunder, provided, however that in no event shall
any product liability insurance coverage be less than five million dollars
($5,000,000) per occurrence.  Upon
request, either party shall provide the other party with a certificate of
insurance evidencing the insurance coverage required by this Section 10.3.

 

11.           LIMITATION OF REMEDIES

 

11.1.        CONSEQUENTIAL
DAMAGES.  IN NO EVENT SHALL EITHER
PARTY’S LIABILITY OF ANY KIND INCLUDE ANY SPECIAL, INDIRECT, PUNITIVE,
INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE, EVEN IF THE OTHER PARTY SHALL HAVE
BEEN ADVISED OF THE POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGE.

 

11.2.        Damages
Limitation.  SUBJECT TO ITS
INDEMNIFICATION OBLIGATIONS UNDER SECTION 10.1, VTAL’s cumulative
liability for damages to EZEM for any cause whatsoever, and regardless of the
form of action, whether in contract or in tort including negligence, shall be
limited to FOUR HUNDRED THOUSAND U.S. Dollars ($400,000).

 

12.           CONFIDENTIALITY

 

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

 

 

period of five
(5) years from the date of its disclosure or two years following the
termination of this Agreement, which ever is later; provided that such
obligation shall continue indefinitely as to the Option; provided that it is
otherwise considered Confidential Information under Section 12.2.

 

12.2.        Exclusions.  The following shall not be considered
Confidential Information for purposes of this Article 12.

 

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

 

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

 

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

 

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

 

13.           TRADEMARKS

 

13.1.        The
Option shall be marketed, distributed and sold under the InnerViewGI trademark.  Subject to Section 14.3(b), EZEM hereby
grants to VTAL an exclusive, perpetual, transferable and royalty-free license
to use the InnerViewGI trademark
in connection with the manufacture, distribution, sale, use, promotion,
advertising, maintenance and upgrading of virtual colonoscopy visualization and
analysis software products.  The InnerviewGI trademark shall be used by
VTAL only in accordance with EZEM’s reasonable standards, specifications and
instructions.  EZEM may inspect and
monitor the activities of VTAL to ensure that such use of the InnerviewGI trademark is in accordance
with such standards, specifications and instructions.

 

13.2.        VTAL
hereby grants to EZEM a nonexclusive, nontransferable and royalty-free license
to use such VTAL trademarks as VTAL may elect to use from time to time with
respect to the Option, as well as the InnerviewGI
trademark, solely in connection with the promotion and marketing of the Option
in accordance herewith during the term of this Agreement.  VTAL’s trademarks shall be used by EZEM only
in accordance with VTAL’s reasonable standards, specifications and
instructions, but in no event beyond the term of this Agreement.  VTAL may inspect and monitor the activities
of EZEM to ensure that such use of VTAL’s trademarks is in accordance with such
standards, specifications and instructions.

 

13.3.        Except
as set forth in Sections 13.1 and 13.2, neither party is granted any right,
title or interest in any patents, copyrights, trademarks or other intellectual
property of the other, and neither party shall use any of the other party’s

 

 

trademarks as
part of its corporate or trade name or authorize any third party to do so.

 

13.4.        Registration.
 Each Licensing Party shall use
commercially reasonable efforts to register trademarks licensed to the other in
accordance with Sections 13.1 and 13.2. 
Each Licensing Party shall be the sole party to initiate any such
registration and shall bear all the expenses thereof.

 

13.5.        Markings.  Neither party shall remove or alter any
trade names, trademarks, copyright notices, serial numbers, labels, tags or
other identifying marks, symbols or legends of the other affixed to any Option,
documentation, containers or packages.

 

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

 

13.7.        Termination
of Use.  Neither party shall adopt,
use or register any words, phrases or symbols which are identical to or
confusingly similar to any of trademarks of the other party.  Subject to Section 13.1 (i) upon termination
of this Agreement, each Licensed Party shall immediately cease any use of the
trademarks of the Licensing Party in any manner and (ii) each Licensed Party
hereby empowers the Licensing Party and shall assist the Licensing Party, if
requested, to cancel, revoke or withdraw any governmental registration or
authorization permitting the Licensed Party to use the Licensing Party’s
trademarks in the Territory.

 

13.8.        No
Other Rights.  Except as set forth
in Paragraphs 4.3(d) and (e), neither party is granted any right, title or
interest in any patents, copyrights, trademarks or other intellectual property
of the other, and neither party shall use any of the other party’s trademarks
as part of its corporate or trade name or authorize any third party to do so.

 

14.           TERM AND TERMINATION

 

14.1.        Term.  This Agreement shall take effect as of the
date on page 1 above and, subject to Section 14.2, shall terminate on
October 23, 2011 (the “Term”).  On
such date, this Agreement if then in effect shall be deemed automatically
terminated unless VTAL and EZEM shall agree in writing to extend this
Agreement.

 

 

14.2.        Termination.  Notwithstanding the provisions of
Section 14.1 above, this Agreement may be terminated earlier upon written
notice as follows:

 

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

 

(b)           By a party if a Change of Control occurs
with respect to the other party upon ten (10) days of receipt of written notice
thereof from the first party;

 

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

 

(d)           By a party if the other party is affected
by an event of Force Majeure for more than six (6) months.

 

(e)           By a party as contemplated by
Section 10.2.

 

(f)            By the mutual written consent of both
parties.

 

(g)           By EZEM as contemplated by
Section 3.3.

 

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

 

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

 

(b)           Indemnification rights and obligation
under Sections 10.1, 10.2 and 10.3 and the parties’ rights and obligations under
Article 8 (with respect only to sales of Options prior to termination) and
9 shall survive termination of this Agreement. 
VTAL’s rights under Section 13.1 shall also survive termination of
this Agreement unless such termination is by EZEM pursuant to Subparagraph
14.2(c); and

 

(c)           Each party shall return all items of
Confidential Information to the other and, if applicable, shall erase all
copies of Confidential Information from its computer systems and shall certify
in writing to the other party that it has done so.

 

14.4.        No
Compensation.  In the event of any
termination of this Agreement under Article 14.2(a), (b),(d),(e) or (g),
subject to Section 14.3(a), neither party shall owe any compensation to
the other party for lost profits, lost opportunities, goodwill or any
consequential, incidental or special damages as a result of or arising from
such termination.

 

 

15.           FORCE MAJEURE

 

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

 

15.2.        Notice.  Upon written notice to the other party, a
party affected by an event of Force Majeure shall be suspended without any
liability on its part from the performance of its obligations under this
Agreement, except for the obligation to pay any amounts due and owing
hereunder.  Such notice shall include a description
of the nature of the event of Force Majeure, and its cause and possible
consequences.  The party claiming Force
Majeure shall also promptly notify the other party of the termination of such
event.

 

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

 

16.           ARBITRATION

 

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

 

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

 

16.3.        Procedure
for Arbitration.  Except as provided
in Section 16.2 above, any dispute, claim or controversy arising out of or
in connection with this Agreement which has not been settled through
negotiation within a period of thirty (30) days after

 

 

the date on
which either party shall first have notified the other party in writing of the
existence of a dispute shall be settled by final and binding arbitration under
the then-applicable Commercial Arbitration Rules of the American Arbitration
Association (“AAA”).  Any such
arbitration shall be conducted by three (3) arbitrators appointed by mutual
agreement of the parties or, failing such agreement, in accordance with said
Rules.  At least one (1) arbitrator
shall be an experienced computer software professional, and at least one (1)
arbitrator shall be an experienced business attorney with a background in the
licensing and distribution of computer software.  Any such arbitration shall be conducted in Chicago, Illinois in the
English language.  An arbitral award may
be enforced in any court of competent jurisdiction.  Notwithstanding any contrary provision in the AAA Rules, the
following additional procedures and rules shall apply to any such arbitration:

 

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

 

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

 

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

 

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

 

17.           MISCELLANEOUS

 

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

 

17.2.        Assignment.  Neither this Agreement nor any right or
obligation arising hereunder may be assigned by any party hereto, in whole or
in part, without the prior written consent of each other party hereto, which
may be withheld in the absolute discretion of such other party, and any
attempted assignment in violation of the terms hereof will be null and void and
of no force or effect; provided, however, that no such consent shall be
required for assignment, in whole or in part, in connection with any merger or
sale of all or substantially all of the assets of the

 

 

assigning
party (including, in the case of VTAL, all of its right, title and interest,
including without limitation, intellectual property and proprietary rights, in
the Option), in either case made in good faith and on arms’ length terms and
conditions; provided, however that in the event that a party desires to assign
this Agreement through merger or sale of all or substantially all of its
assets, it shall obtain, prior to any assignment, a written assurance from the acquiring
or merging party, in form and substance satisfactory to the other party acting
reasonably, specifically assuring the other party that it will continue to
honor and assume all of the assigning party’s obligations under this Agreement.  Subject to the foregoing sentence, this
Agreement will be binding upon and inure to the benefit of the parties and
their respective successors and assigns. 
Furthermore, VTAL shall not assign any of its right, title or interest,
including without limitation, intellectual property or proprietary rights, in
the Option unless such assignment is made in good faith on arms’ length terms
and conditions and prior to any assignment, the assignee delivers to EZEM a
written assurance, in form and substance satisfactory to EZEM acting
reasonably, specifically assuring EZEM that it will continue to honor and
assume all VTAL’s obligations under this Agreement.

 

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

 

17.4.        Entire
Agreement.  This Agreement,
including the Exhibits hereto which are incorporated herein, constitutes the
entire agreement of the parties with respect to the subject matter hereof and
supersedes all proposals, oral or written, and all negotiations, conversations,
discussions, and previous distribution or value added reseller agreements
heretofore between the parties.  Each
party hereby acknowledges that it has not been induced to enter into this
Agreement by any representations or statements, oral or written, not expressly
contained herein.

 

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

 

17.6.        Section Headings.  The Section headings appearing in this
Agreement are inserted only as matter of convenience and in no way define,
limit, construe, or describe the scope or extent of such Section or in any
way affect such section.

 

17.7.        Publicity.  This Agreement is confidential, and no party
shall issue press releases or engage in other types of publicity of any nature
dealing with the commercial or

 

 

legal details
of this Agreement without the other party’s prior written approval, which approval
shall not be unreasonably withheld.  It
shall not be a breach of the foregoing obligation as to non-disclosure and
press releases to include in future press releases facts which are recited in
the joint press release described above or to make other disclosures as may be
necessary (a) as to the non-disclosure obligation only, in connection with the
preparation of a party’s tax returns or financial records; (b) in order to
satisfy the requirements of law, including the requirements of the Securities Exchange
Act of 1934; (c) in order to comply with the lawful orders or processes of
courts and other government agencies; or (d) in order to enforce or comply with
this Agreement.  If either party
receives any subpoena or other legal process that purports to require or compel
information that is protected under this Agreement, it shall give the other
party prompt written notice thereof.

 

17.8.        Governing
Law.  This Agreement shall be
governed by and interpreted under the laws of the State of Minnesota, U.S.A.,
excluding (i) its choice of law rules, and (ii) the United Nations Convention
on Contracts for the International Sale of Goods.

 

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

 

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

 

17.11.      Waiver.  No failure by either party to take any
action or assert any right hereunder shall be deemed to be a waiver of such
right in the event of the continuation or repetition of the circumstances
giving rise to such right.  Course of
conduct between the parties, whether or not contrary to the terms of this
Agreement, shall not be construed as a waiver of any term of this Agreement.

 

17.12.      Non-solicitation.

 

(a)           Neither VTAL nor its Affiliates shall be
permitted to retain, as an employee or a self-employed independent contractor,
during the term of this Agreement or within one year thereafter, any person who
was employed by EZEM or its Affiliates at anytime during the then preceding two
(2) year period.

 

(b)           Neither EZEM nor its Affiliates shall be
permitted to retain, as an employee or a self-employed independent contractor,
during the term of this Agreement or within one year thereafter, any person who
was

 

 

employed by VTAL
or its Affiliates at anytime during the then preceding two (2) year period.

 

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

 

	
  VITAL IMAGES, INC.

  	
   

  	
  E-Z-EM, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  

 

 

[Remainder of page
intentionally left blank]

 

EXHIBIT 3.3

 

2004 PLANNED UPGRADES

 

EXHIBIT 4.2

 

FORM OF DEMONSTRATION LICENSE

 

THIS SOFTWARE
LICENSE AGREEMENT (“License Agreement”) is made as of
                 ,
200  , by and between Vital Images, Inc., 3300 Fernbrook Lane N.,
Suite 200, Plymouth, Minnesota 55447 U.S.A. (“Vital Images”) and
                                          ,
having its principal place of business at
                                                   
(“Licensee”).

 

Recitals

 

A.            Vital Images develops and licenses
proprietary medical visualization software products (defined below as the
“Products”).

 

B.            Licensee desires to license and use the
Products for a specific period of time for the purposes of demonstration,
evaluation, testing or other short-term uses, and Vital Images so agrees,
subject to the terms and conditions of this License Agreement.

 

ARTICLE 1: DEFINITIONS

 

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

 

1.1           Confidential Information.  “Confidential Information” shall mean all
information disclosed by Vital Images to Licensee or embodied in the Products,
regardless of the form in which it is disclosed, which relates to markets,
customers, products, patents, inventions, procedures, methods, designs,
strategies, plans, assets, liabilities, prices, costs, revenues, profits,
organization, employees, agents, resellers or business in general of Vital
Images, or the algorithms, programs, user interfaces and organization of the
Products.

 

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

 

ARTICLE 2: LICENSE GRANT AND USE

 

2.1           License Grant.  Subject to the terms of this License
Agreement, Vital Images hereby grants to Licensee a nonexclusive,
non-transferable license (“License”) to use the Products only on one (1)
computer of the type described in Exhibit B attached hereto (“Designated
Equipment”), and only at the site described in Exhibit B (“Designated
Site”).  Licensee must purchase a License
for any other computer at a Designated Site on which it desires to install and
use the Products.  Licensee’s use of the
Products shall be limited solely to demonstration, evaluation, testing or
otherwise as described on Exhibit B. 
Licensee hereby agrees that the Products under this License shall not be
used for any business activities of the Licensee without the prior written
consent of Vital Images, such consent to be at the sole discretion of Vital
Images.

 

2.2           Restrictions on Use.  Licensee agrees not to engage in, cause or
permit the reverse engineering, disassembly, recompilation, modification or any
similar manipulation of the Products, nor may Licensee loan, lease, distribute,
assign or otherwise transfer the Products or copies thereof, in whole or in
part, to any third party.  Licensee may
not install, use or access the Products at or from any location other than a
Designated Site, or on any type of computer other than the Designated
Equipment, without the prior written approval of Vital Images.

 

2.3           Copying.  Licensee shall not copy the Products, except
that Licensee may make and maintain one (1) copy

 

 

of the Products for back-up and archival purposes, provided such copy
includes all Vital Images copyright, proprietary rights and other notices
included on or in the Products.

 

2.4           Ownership.  All right, title and interest in the Products
shall at all times remain the property of Vital Images and its licensors,
subject to the Licenses granted to Licensee under this License Agreement.  Licensee understands and agrees that it takes
title only to the media on which the Products are provided to it, but that the
Products shall remain the property of, and proprietary to, Vital Images.

 

ARTICLE 3: TERM AND TERMINATION

 

3.1           Term. 
The term of this License Agreement shall be as described on Exhibit B,
such term not to exceed twelve (12) months.

 

3.2           Termination.  Either party may terminate this License
Agreement at any time by giving written notice to the other party.

 

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

 

3.4           Effect of Termination of License
Agreement.  Upon termination of this
License Agreement, all Licenses to the Products granted hereunder shall
immediately terminate, and Licensee shall return to Vital Images all
Confidential Information.  Articles 2.4,
5, 6, 7, 8 and 9 shall survive any termination of this License Agreement.

 

ARTICLE 4: ADVERSE REACTIONS; PRODUCT
RECALLS

 

4.1           Adverse Event Reporting.  In the event that Vital Images has granted
Licensee the right to use the Products under this License Agreement in its
business activities, Licensee shall advise Vital Images, by telephone or
facsimile, within twenty-four (24) hours after it becomes aware of any adverse
event from the use of any Product or malfunction of any Product.  Unless otherwise required by applicable local
laws, Licensee shall advise Vital Images of any such adverse event prior to any
report or filing being made with the U.S. Food and Drug Administration (“FDA”)
or any other comparable regulatory body elsewhere in the world.

 

4.2           Product Recall; Corrective Action.  If Vital Images believes that a corrective
action with respect to the Products is desirable or required by law, or if any
governmental agency having jurisdiction (including without limitation, the FDA)
shall request or order any corrective action with respect to the Products,
including any recall, customer notice, restriction, change, corrective action
or market action or any Product change, Vital Images or its reseller shall
promptly notify Licensee.  Licensee shall
comply with all reasonable directions regarding such corrective action,
including the return of the Products to Vital Images or a reseller at Vital
Images’ expense.

 

ARTICLE 5: WARRANTIES; INDEMNIFICATION

 

5.1           No Warranty.  Vital Images makes no warranty to Licensee
that the Products, when properly installed and operated, will substantially
perform the functions described in the functional specifications for the
Products, as contained in the applicable written documentation for the
Products.  All Products are provided to
Licensee “AS IS.”

 

 

5.2           Exclusive Remedy.  Vital Images’ entire liability, and
Licensee’s exclusive remedy, for any claim made by Licensee under
Article 5.1 above shall be for Vital Images to terminate this License
Agreement.  Vital Images does not warrant
that the operation of the Products will be uninterrupted or error-free, that
all errors in the Products will be corrected, that the Products will satisfy
Licensee’s requirements or that the Products will operate in the combinations
which Licensee may select for use.

 

5.3           Warranty Disclaimer.  THE WARRANTY SET FORTH IN ARTICLE 5.1
ABOVE IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
WHICH ARE HEREBY DISCLAIMED AND EXCLUDED BY VITAL IMAGES, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OR USE, AND ALL OBLIGATIONS OR LIABILITIES ON THE PART OF
VITAL IMAGES FOR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE USE,
MAINTENANCE OR PERFORMANCE OF THE LICENSED SOFTWARE.  Furthermore, the Products are derived from
and include software from third party licensors, who make no warranty, express
or implied, regarding the Products, who disclaim any and all liability for the
Products and who will not undertake to provide any information or support
regarding the Products.

 

5.4           Infringement Indemnity.  Vital Images hereby agrees to indemnify,
defend and hold Licensee harmless from any third from any third party suit,
claim or other legal action (“Legal Action”) that alleges the Licensed Software
infringes any United States patent, copyright, or trade secret, including any
award of damages and costs made against Licensee by a final judgment of a court
of last resort based upon a Legal Action, provided that:  (a) Licensee gives written notice of any
Legal Action to Vital Images within fifteen (15) days of Licensee’s first
knowledge thereof; (b) Vital Images has sole and exclusive control of the
defense of any Legal Action, including the choice and direction of any legal
counsel, and all related settlement negotiations; and (c) Licensee provides
Vital Images (at Vital Images’ expense for reasonable out-of-pocket expenses)
with assistance, information and authority to perform the above.

 

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

 

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

 

This Article 5.4 states Licensee’s exclusive remedy, and Vital
Images’ and its licensors’ entire liability, for any infringement claim related
to the Products or their use.

 

ARTICLE 6: LIMITATION OF REMEDIES

 

6.1           Delay.  VITAL IMAGES SHALL NOT BE LIABLE FOR ANY LOSS
OR DAMAGE CAUSED BY DELAY IN FURNISHING PRODUCTS OR SERVICES OR ANY OTHER
PERFORMANCE UNDER THIS LICENSE AGREEMENT.

 

6.2           Sole Remedies.  THE SOLE AND EXCLUSIVE REMEDIES FOR BREACH OF
ANY AND ALL WARRANTIES AND THE SOLE REMEDIES FOR VITAL IMAGES’ LIABILITY OF ANY
KIND (INCLUDING LIABILITY FOR NEGLIGENCE OR PRODUCT LIABILITY) WITH RESPECT TO
THE PRODUCTS AND SERVICES COVERED BY THIS LICENSE AGREEMENT AND ALL OTHER
PERFORMANCE BY VITAL IMAGES UNDER THIS LICENSE AGREEMENT SHALL BE LIMITED TO
THE REMEDIES PROVIDED IN ARTICLE 5 OF THIS LICENSE AGREEMENT.

 

6.3           Damages Limitation.  VITAL IMAGES SHALL HAVE NO LIABILITY OF ANY
KIND FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE,
EVEN IF VITAL IMAGES SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
POTENTIAL LOSS OR

 

 

DAMAGE, INCLUDING ANY LIABILITY FOR DAMAGES ARISING OUT OF OR RESULTING
FROM THE USE, MAINTENANCE OR PERFORMANCE OF THE PRODUCTS, INCLUDING, WITHOUT
LIMITATION, THE LOSS OR CORRUPTION OF LICENSEE’S OR ANY THIRD PARTY DATA.  IN NO EVENT SHALL VITAL IMAGES BE LIABLE FOR
ANY DAMAGES IN EXCESS OF THE AGGREGATE AMOUNTS ACTUALLY PAID BY LICENSEE TO
VITAL IMAGES UNDER THIS LICENSE AGREEMENT.

 

ARTICLE 7: CONFIDENTIALITY

 

7.1           Confidential Information.  All Confidential Information shall be deemed
confidential and proprietary to Vital Images, and are the sole and exclusive
property of Vital Images.  Licensee may
use the Confidential Information during the term of this License Agreement only
as permitted hereunder or as necessary in order to use the Products in
accordance with the License(s) granted hereunder.  Licensee shall not disclose or provide any
Confidential Information to any third party and shall take reasonable measures
to prevent any unauthorized disclosure by Licensee’s employees, agents,
contractors or consultants during the term hereof including appropriate
individual nondisclosure agreements.

 

7.2           Exclusions.  The following information shall not be
considered Confidential Information under this Article 7:

 

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

 

(b)           Information which was independently
developed by Licensee without the use or reliance on Vital Images’ Confidential
Information;

 

(c)           Information which was provided to Licensee
by a third party under no duty of confidentiality to Vital Images; or

 

(d)           Information which is required to be
disclosed by Licensee under law, provided, however, Licensee gives prompt
notice thereof to Vital Images prior to such disclosure.

 

7.3           Cooperation.  At Vital Images’ request, Licensee shall
cooperate fully with Vital Images in any and all legal actions taken by Vital
Images to protect its rights in the Products and in the Confidential
Information.  Vital Images shall bear all
costs and expenses reasonably incurred by Licensee in the course of cooperating
with Vital Images in such legal action.

 

ARTICLE 8: ARBITRATION

 

8.1           Dispute Resolution.  Except as provided in Article 8.2 below,
Vital Images and Licensee shall each use its best efforts to resolve any
dispute between them promptly and without resort to any legal process if
feasible within thirty (30) days of receipt of a written notice by one party to
the other party of the existence of such dispute.  The foregoing requirement in this
Article 8.1 shall be without prejudice to either party’s right, if
applicable, to terminate this License Agreement under Article 3.1 above.

 

8.2           Litigation Rights Reserved.  If any dispute arises with regard to
Licensee’s unauthorized use of the Products or unauthorized use or infringement
of Confidential Information, Vital Images may seek any available remedy at law
or in equity from a court of competent jurisdiction.

 

8.3           Procedure for Arbitration.  Except as provided in Article 8.2 above,
any dispute, claim or controversy arising out of or in connection with this
License Agreement which has not been settled through negotiation within a
period of thirty (30) days after the date on which either party shall first
have notified the other party in writing of the existence of a dispute shall be
settled by final and binding arbitration under the then-applicable Commercial
Arbitration Rules or, if Licensee’s principal place of business is outside the
United States, the International Arbitration Rules of the American Arbitration
Association (“AAA”).  Any such

 

 

arbitration shall be conducted by three (3) arbitrators appointed by
mutual agreement of the parties or, failing such agreement, in accordance with
said Rules.  At least one (1) arbitrator
shall be an experienced computer software professional, and at least one (1)
arbitrator shall be an experienced business attorney with a background in the
licensing and distribution of computer software.  Any such arbitration shall be conducted in
Minneapolis, Minnesota, U.S.A. in the English language.  An arbitral award may be enforced in any
court of competent jurisdiction. 
Notwithstanding any contrary provision in the AAA Rules, the following
additional procedures and rules shall apply to any such arbitration:

 

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

 

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

 

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

 

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

 

ARTICLE 9: MISCELLANEOUS

 

9.1           Assignment.  Licensee shall not have the right to assign
or otherwise transfer its rights or obligations under this License Agreement
except with the prior written consent of Vital Images, which consent shall be
at the sole discretion of Vital Images. 
This License Agreement shall be binding on the parties hereto and their
respective successors and permitted assigns. 
Any prohibited assignment shall be null and void.

 

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

 

9.3           Exports and U.S. Government Rights.  Licensee hereby acknowledges that it will not
export or reexport any of the Products or technical data (which includes, among
other things, any technical information relating to the Products, written or
otherwise), or any product incorporating any Products or technical data.  The Products are provided with Restricted
Rights.  Use, duplication or disclosure
by the U.S. government is subject to restrictions as set forth in (a) this
License Agreement pursuant to DFARs 227.7202-3(a); (b) subparagraph (c)(1)(i)
of the Rights in Technical Data and Computer Software clause at DFARs
252.227-7013; or (c) the Commercial Computer Software Restricted Rights clause
at FAR 52.227-19 subdivision (c)(1) and (2), as applicable.  Contractor/manufacturer is Vital Images,
Inc., 3100 West Lake Street, Suite 100, Minneapolis, Minnesota 55416 U.S.A.

 

9.4           Entire Agreement.  This License Agreement, including the
Exhibits attached hereto which are incorporated herein, constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements by and between Licensee and Vital Images as
well as all proposals, oral or written, and all prior negotiations,
conversations and discussions between the parties related hereto.

 

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

 

 

9.6           Governing Law.  This License Agreement shall be governed by
and interpreted under the laws of the State of Minnesota, U.S.A., excluding (a)
its choice of law rules, and (b) the United Nations Convention on the
International Sale of Goods.

 

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

 

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

 

IN WITNESS WHEREOF, the parties have executed this License Agreement by
their duly authorized representatives.

 

	
  VITAL IMAGES, INC.

  	
   

  	
  LICENSEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
  Title

  	
   

  	
   

  
										

 

EXHIBIT 7

 

POTENTIAL CENTERS OF EXCELLENCE

 

Confidential treatment requested for
information on this Exhibit.Exhibit 10.1

 

CONFIDENTIAL
TREATMENT

EPIX Medical,
Inc. has requested that the marked portions of this document be accorded
confidential

treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.

 

 

FIRST AMENDMENT TO LOAN AGREEMENT

 

 

Dated as of June 1, 2004

 

 

By and Between

 

 

EPIX MEDICAL, INC.

 

AND

 

SCHERING AKTIENGESELLSCHAFT

 

 

FIRST AMENDMENT TO LOAN AGREEMENT

 

This FIRST AMENDMENT TO LOAN AGREEMENT dated as of June 1, 2004 by
and between EPIX MEDICAL, INC. (“Epix”) and SCHERING AKTIENGESELLSCHAFT, Berlin
Germany (“Schering”).

 

Recitals

 

Epix and Schering are parties to a certain Loan Agreement dated as of
May 26, 2003 (as now or hereafter amended, modified or supplemented from time
to time, the ‘Loan Agreement”).  In
connection with a certain proposed senior subordinated note offering by Epix,
Epix has requested certain amendments to the Loan Agreement, and Schering is
willing to agree thereto, but only on the terms and conditions set forth
herein. All capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Loan Agreement.

 

NOW, THEREFORE, Epix and Schering hereby amend the Loan Agreement as
follows:

 

Section 1.                                            Section 2.2(c)
of the Loan Agreement is hereby deleted in its entirety and the following new
Section 2.2(c) substituted therefor:

 

Section 2.2(c).  Epix shall be limited to submitting requests
for Loans pursuant to Sections 2.2(a) and (b) and to making repayments of Loans
pursuant to Section 2.4 hereof an aggregate number of [****(**)] times per
annum. Each Loan made by Schering hereunder shall remain outstanding for no
less than [****(**)] days after the date of advance hereunder. Each request for
Loans made by Epix hereunder shall include the anticipated repayment date. Epix
shall provide notice to Schering of any modification to such anticipated
repayment date no less than [****(**)] business days prior to the anticipated
repayment date originally specified by Epix. 
Schering shall, subject to the other provisions of this Agreement, make
the Loan requested by Epix within five (5) Business Days (defined as any day,
other than a Saturday or Sunday, on which federally chartered banks in the
United States and Germany are open for business) after the receipt by Schering
of a request for funds meeting the requirements of this Agreement. Upon
disbursements to Epix by Schering of any funds under this Agreement, Schering
may, at its election, present the Note to Epix for notation on Schedule A
attached hereto of any additional principal amount outstanding as a consequence
of the Loan by Schering.

 

Section 2.                                            Article 2
(The Loans; Payment of Principal and Interest; Related Matters) of the Loan
Agreement is hereby amended by adding the following new Section at the end
thereof:

 

Section 2.8                                      Administrative
Fee.                                        In
consideration of Schering’s agreement to make the Loans described herein, Epix
agrees to pay Schering an

 

 

annual administrative fee. Such fee shall be in the amount of (a)
[*******(***)] for calendar year 2004, and (b) [*******(***)] for each
remaining calendar year of the Loan beginning with calendar year 2005. Such
annual fee shall be deemed earned on the date hereof (as to the fee for
calendar year 2004), and shall be deemed earned on first day of each calendar
year (as to the fee for each remaining calendar year of the Loan beginning with
calendar year 2005). The annual fee shall be payable quarterly in equal
installments of [*******(***)] commencing July 1, 2004.

 

Section 3.                                            Article 5
(Affirmative Covenants) of the Loan Agreement is hereby amended by adding the
following new Sections at the end thereof:

 

5.9                                 Repurchase of
Convertible Notes.  In the event of the
redemption or repurchase for cash at any time of the Convertible Notes in whole
or in part, (whether pursuant to Section 3.13, Article XI or
Article XIII of the Indenture or otherwise) other than a redemption for
cash by Epix, at Epix’s option, of Convertible Notes in a cumulative principal
amount of less than [*******], Epix shall simultaneously with or prior to the
consummation of such redemption or repurchase, repay in full the then
outstanding principal balance of the Loans made by Schering, together with
interest accrued and unpaid, and any other charges due under this Agreement and
all obligations of Schering to make Loans to Epix shall terminate.

 

5.10                           Convertible Notes.  Immediately notify Schering of the
occurrence or existence of any of the following: (i) An Event of Default shall
occur under the Indenture or Convertible Notes, or (ii) any Holder or the
Trustee (as defined in the Indenture) shall send notice of the exercise of the
right to require repurchase or redemption of any of the Convertible Notes,
whether pursuant to an Event of Default, a Designated Event or otherwise.

 

Section 4.                                            Section 6.5
of the Loan Agreement is hereby deleted In its entirety and the following new
Section 6.5 substituted therefor:

 

Section 6.5.                                   Other
Liabilities.  Incur, create, assume or
permit to exist any indebtedness or other Liability on account of borrowed
money except (a) Obligations to Schering, (b) loans from third parties in
order to repay the outstanding principal under the Loans and interest thereof,
provided that such third party loan amount (including principal and interest)
shall not exceed the outstanding principal and interest under the Loans, (c)
accounts payable less than ninety (90) days and accrued expenses of Epix
incurred in the ordinary course of business, (d) certain Convertible Senior
Notes due 2024 in the aggregate principal amount of $75,000,000 issued by the
Company to third parties pursuant to a certain draft Indenture dated May 27,
2004 (the “Indenture”), plus such additional Notes as may be issued upon
exercise of the over-allotment option as may be agreed to by Epix in accordance
with the Indenture, but in no event shall the over-

 

2

 

allotment be greater than $25,000,000 (collectively, the “Convertible
Notes”), which notes shall be subordinated in right of payment to the Loans now
or hereafter made by Schering hereunder, and (e) Liabilities that do not
exceed, individually or in the aggregate, Ten Million Dollars ($10,000,000). As
a condition to the effectiveness of exception clause (d) above: (i) the
Convertible Notes shall be substantially identical in form and substance as the
draft sample of a Convertible Note (draft dated June 1, 2004) attached
hereto as Exhibit 6.5-A, and (ii) the Indenture shall be substantially
identical in form and substance as the draft Indenture (draft dated
June 1, 2004) attached hereto as Exhibit 6.5-B; provided, however, as to each, the final forms of
Convertible Notes and the Indenture may vary from the exhibits attached hereto
with respect to any portion thereof which in Schering’s reasonable discretion
would not (i) have an adverse affect on the benefits and rights of Schering
under the subordinated structure of the Convertible Notes and Indenture to the
Loans, or (ii) otherwise adversely affect the rights of Schering under the Loan
Agreement or the priority or perfection of any liens of Schering thereunder.

 

Section 5.                                            Article 6
(Negative Covenants) of the Loan Agreement is hereby amended further by adding
the following new Sections at the end thereof:

 

6.12                           Indenture and Convertible
Notes.  (a) Amend, supplement, restate
or otherwise modify either the Indenture or the Convertible Notes from the
forms attached hereto as Exhibits 6.5-A and 6.5-B, respectively, with respect
to any portion thereof which in Schering’s reasonable discretion would (i) have
an adverse affect on the benefits and rights of Schering under the subordinated
structure of the Convertible Notes and Indenture to the Loans, or (ii)
otherwise adversely affect the rights of Schering under the Loan Agreement or
the priority or perfection of any liens of Schering thereunder, or (b) prepay
any of the Convertible Notes other than as referred to herein.

 

Section 6.                                            Section 7.2
(Failure to Perform or Observe Covenants) of the Loan Agreement is hereby
amended as follows:

 

(a)                                  By inserting the
following parenthetical phrase following the words “ninety (90) days” in line 8
of Section 7.2: “(except if at any time during such 90-day period the
Trustee or any Holder (each as defined in the Indenture) shall accelerate any
or all of the sums due under the Convertible Notes, in which case the 90-day
cure period shall immediately terminate without notice by Schering)”, and

 

(b)                                 By inserting the
number [*******], after the number [*******] in line 10 of Section 7.2.

 

3

 

Section 7.                                            Section 7.7
(Default on Other Debt) of the Loan Agreement is hereby amended by deleting the
first word of Section 7.7, “Any”, and replacing the deleted word with the
phrase “Except as set forth in Sections 7.13 and 7.14 herein, any”.

 

Section 8.                                            Article 7
(Events of Default) of the Loan Agreement is hereby amended by adding the
following new Sections at the end thereof:

 

7.13                           Subordination.  Epix shall fail to (i) comply with the
subordination provisions set forth in the Loan Agreement and in the Indenture
or (ii) repay the Loans simultaneously with or prior to any repayment of the
Notes except as provided in Section 5.9, in either of which events.

 

7.14                           Convertible Notes.  Any of the following shall occur: (i) An
Event of Default shall occur under the Indenture or Convertible Notes, or (ii)
any Noteholder shall send notice of the exercise of its right to require
redemption or other repurchase of any of the Convertible Notes pursuant to a
Designated Event.

 

Section 9                                               Article 8
(Remedies) of the Loan Agreement is hereby amended by adding the following new
Section:

 

8.8                                 Convertible Notes and
Indenture. Notwithstanding the discretion vested in Schering in
Section 8.2 herein, upon any of the Events of Default set forth in
Section 7.13 and 7.14: (a) all obligations of Schering to make any Loans
after the occurrence such an Event of Default shall terminate, and (b) the
principal and interest of the Loans and all other Obligations shall become and
be immediately due and payable, without presentment, demand, protest, or
further notice of any kind or nature whatsoever, all of which are to the
maximum extent permitted by applicable law hereby expressly waived by Epix
provided, however, that upon an Event of Default or acceleration by Schering of
the Loans as a result of the notice given by the Noteholders as set forth in
Section 7.14(ii), Schering shall not be permitted to exercise its rights
for a period of [*******(***)] days following receipt of such notice. The
foregoing remedies are in addition to all other rights or remedies that Schering
may have hereunder or under law.

 

Section 10.                                      Confidential
Offering Circular.   Epix acknowledges
that Schering shall not have had opportunity to review the Confidential
Offering Circular being prepared and issued by Epix with respect to the convertible
Notes and the Indenture before its distribution. Epix agrees that all
statements with respect to the Loan Agreement and the subordination rights and
obligations herein and in the Indenture and Convertible Notes shall be set
forth fully and fairly in the Confidential Offering Circular. Epix agrees that
Schering shall have no liability whatsoever with respect to the Confidential
Offering Circular, the Indenture or the Convertible Notes. Epix agrees that the
rights and obligations under Article 9 of the Loan Agreement shall apply
to the Confidential Offering Circular, the Indenture and the Convertible Notes.
Epix agrees to promptly file this Amendment as required by applicable
securities laws.

 

4

 

Section 11.                                      Confirmation.   Epix hereby certifies to Schering that (a)
except as amended hereby, the Loan Agreement and the other Loan Documents
remain in full force and effect, enforceable in accordance with their
respective terms, (b) as of June 1, 2004, the outstanding Loan balance
consists of Zero Dollars ($0.00) of principal plus accrued interest; (c) Epix
has no claims against Schering relating to the Loan Agreement, this Amendment
or the Collaboration Agreement, and (d) Epix has no defenses, counterclaims or offsets
to the repayment of the Obligations.

 

Section 12.                                      Miscellaneous.   This First Amendment to Loan Agreement
shall be governed by and construed and enforced under the laws of The State of
New York and may be signed in counterparts with the same effect as if the
signatures hereto and thereto were upon the same instrument.

 

[Remainder of page intentionally left blank]

 

5

 

IN WITNESS WHEREOF, the undersigned have set their hands and seals or
caused these presents to be executed by their proper officers and sealed with
their seal the day and year first above written.

 

	
  WITNESS:

  	
   

  	
  EPIX MEDICAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  SCHERING AKTIENGESELLSCHAFT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Frank Alburg

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Finance Department

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  `

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Yvonne Winkler von Mohrenfels

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Legal Department

  

 

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]