EXHIBIT 10 (oo)
GOLDEN HEALTH TELEMEDICINE CONTRACT
This Contract is entered between TriSun Medical Corporation--China, a
corporation formed ("TSM") by the China National Institute of Hospital
Administration for the purpose of obtaining advanced technology in health
care for the citizens of China, and TriSun/CTI Asia, Ltd, a Cyprus
corporation ("TriSun") formed as a strategic alliance partner for initiating
telemedicine capabilities in the PRC.
WHEREAS, the shareholders of TriSun accepted on October 6, 1994 the
joint responsibility for implementing the Golden Health Plan adopted by the
Ministry of Public Health through the National Institute of Hospital
Administration ("NIHA") to employ for the hospitals of China a system
enabling the hospitals to employ telemedicine networks, to intergrade the
hospital management computer systems, and to install thermal imaging
technology in the hospitals for advanced health care in China;
WHEREAS, the Ministry of Public Health adopted the business plan for
TriSun on October 22, 1994, and granted to TriSun the exclusive right to
place thermal imaging and telemedicine technologies in the hospitals in
China; and
WHEREAS, this Contract will achieve the directive of TriSun to place CTI
Systems in the top 500 medical facilities in China, followed by 5,500
additional hospital facilities and 200,000 clinics throughout the People's
Republic of China.
W I T N E S S E T H:
NOW, THEREFORE, in exchange for the premises set forth herein, and in
contemplation of the assistance of third-parties necessary to accomplish the
Golden Health Plan, the parties agree as follows:
1. PURPOSE. TriSun shall install in approximately 6,000 hospitals in
China a "CTI System" to offer advanced health care through thermal imaging
and telemedicine capabilities. The deployment of this program shall begin
with delivery to the top 300 medical facilities throughout China in the order
as listed on Exhibit A. The deliveries of the CTI Systems shall be
coordinated with the development of the NIHA planned telecommunications
superhighway to serve the hospitals and clinics. The installation of the
telecommunications superhighway will enable all hospitals and clinics, not
merely the top 300 facilities, to be networked with the CTI Systems for
telemedicine, thermal imaging analysis, and other imaging modes to deliver
the best health care to the citizens of China in accordance with the Golden
Health Plan. In addition to the identified 6,000 hospitals receiving the CTI
System, TriSun will install in approximately 200,000 outpatient clinics,
small hospitals, and village clinics a CTI Remote System capable of
networking any CTI System to read imaging results, make medical inquiries,
communicate with other hospitals regarding medical procedures, and receive
medical analysis for diagnostic assistance. Performance of the Golden Health
Plan contracts will establish a new health care standard in Asia.
2. CTI SYSTEMS. TriSun shall install in each hospital a Quantitative
Thermal Assessment Lab ("QTA Lab") to provide a controlled environment for
maintaining the latest computerized technology and conduct thermal assessment
of patients. The QTA Lab will contain one computer work station, laser
printer, and all computer equipment necessary for enabling the doctors and
technicians at the hospital to communicate through telemedicine. The
configuration of each QTA Lab will be approximately 16 feet x 20 feet and
will be linked to CTI thermal imaging equipment which will be installed by
TriSun. Two equilibration rooms are configured in the QTA Lab for achieving
thermal stability with patients. The CTI System includes the computerized
thermal imaging equipment. The CTI System will be capable of interconnection
and use with other imaging modalities, such as CAT Scan and X-Ray. The CTI
System will interact with the Health Card Reader/Writer and can access
records from remote locations. The CTI System shall include a scanner to
enable the hospital to convert medical files to the Health Cards. Each
hospital will select and provide space for the installation.
3. CTI REMOTE SYSTEMS. In approximately 200,000 clinics and small
hospitals, TriSun will install CTI Remote Systems which will include one
computer work station, laser printer, a Reader/Writer, and
1
telemedicine connectivity. Each CTI Remote System may receive imaging
results for patients examined at hospitals where a CTI System has been
installed with imaging equipment. CTI Remote Systems will enable the local
doctors to access system information for patient's using the Health Cards.
4. CTI SYSTEM ORDERS. TSM shall cause each hospital in accordance
with the Delivery Schedule (Exhibit B) to order CTI Systems. TSM shall also
cause clinics and small hospitals to order the CTI Remote Systems. The
parties also recognize that TSM, from time to time, may change the order of
priorities for delivery among the hospitals and clinics. Likewise, hospital
needs or unforeseen delays may result in a deviation from the Delivery
Schedule. TSM and TriSun will make every effort to maintain the Delivery
Schedule for planning by the hospitals. The parties will comply
substantially with the Delivery Schedule for the first 300 hospitals. Any
hospital or clinic may complete an Order Form for CTI Systems, attached as
Exhibit C, to request an earlier installation.
5. CTI SYSTEM PURCHASE. Each CTI System, installed, shall be
purchased from TriSun for $500,000 (U.S.). Each CTI Remote System will be
purchased for $80,000 (U.S.). No hospital or clinic will be permitted to
purchase computer equipment from another source and connect to the CTI System
for telemedicine. At the time of each order, the respective hospital may
expand the order by requesting additional work stations or other available
accessories or additional imaging equipment or connecting software, which
will cause an adjustment of the purchase price. TriSun shall advise TSM and
the hospital of the cost of any additional requested equipment and obtain
confirmation of the order through the issued letter of credit before
commencing preparation of the order.
6. PRICE ADJUSTMENTS. TriSun shall maintain records for the cost of
each component part of the CTI System, allocating appropriate direct
administrative expenses incurred for maintaining, warranting, and servicing
the component part but excluding project start up costs. If TriSun is able
to reduce in any month after 1995 the cost of any delivered component part of
the CTI System, TriSun shall reduce the price of the CTI System, or the CTI
Remote System, by the amount that the cost of such component part is below
the average cost of delivering such component part during 1995. Cost savings
are anticipated to result from relocating or initiating certain pertinent
manufacturing facilities to China and from purchasing substitute parts from
Asia. Results of such cost savings determined monthly will be reflected in
any subsequent hospital order in the following month. Likewise, the price
may be adjusted with component price increases after 1995 in the same manner.
7. DELIVERY DATES. TriSun shall deliver CTI Systems according to the
Delivery Schedule to the respective hospital and shall install the CTI
Systems fully operational, capable of communicating with other CTI Systems
and regional computer centers. TriSun also shall comply with any other
orders from clinics or small hospitals as provided in any written order from
TSM allowing for at least 5 months to deliver. If a hospital desires to
enhance its orders with additional work stations or accessories, or if a
hospital or clinic not listed on the Delivery Schedules makes an order, the
hospital or TSM should complete the Order Form for CTI System (Exhibit C).
8. METHOD OF PAYMENT. On behalf of TSM or the purchasing hospital,
the Bank of China or Bank of Communications or other financial institution
acceptable to TriSun ("Bank") shall issue, five months prior to the scheduled
delivery date, a letter of credit in favor of TriSun. The documentary letter
of credit will be in the amount of the per unit price of the CTI System, or
the CTI Remote System, due and payable in three installments after the xxxx
of lading delivery date for the system to a port in China ("Delivery").
Payments to TriSun from the letter of credit shall be due 30% within 5
banking days after Delivery, 20% within 60 calendar days after Delivery and
the remaining 50% on or before 180 calendar days after Delivery.
TriSun shall inform TSM and the Bank of any price adjustments before
issuance of the letter of credit by the Bank. The hospital shall timely
submit a letter of credit application, similar to Exhibit D. The letter of
credit shall be issued and delivered to the bank or assignee designated by
TriSun. The letter of credit may be assigned to the party financing TriSun's
operations by delivery of written notice from TriSun to the Bank. TriSun
shall pay the letter of credit fee, which shall be paid from the proceeds of
the letter of credit upon payment. Delivery of the letter of credit shall
effect the order. According to the Delivery Schedule, the first four CTI
Systems are to be delivered during December 1995. Therefore, Bank shall
deliver four letters of credit, referencing the identified hospitals, to
TriSun within the first five days of July 1995.
2
9. ACKNOWLEDGMENT. To evidence the general reasonableness of the Bank
references, TSM shall deliver as Exhibit E an acknowledgement by Bank of the
intended reliance upon the references and use of the documentary letter of
credit facility required under this Contract.
10. FUTURE FINANCING. TriSun and TSM will cooperate after execution of
this Contract to arrange financing, if desired by TSM and the respective
hospitals, for financing the payment for the CTI Systems through installments
over an extended period of time. TSM and TriSun anticipate that financing on
favorable terms may be available, after delivery and payment of some systems,
from sources such as the Economic Development Council in Canada, the World
Bank, the EXIM Bank, or other sources. Each respective hospital purchasing
the CTI System or CTI Remote System is obligated to pay Bank by the payment
due date unless financing is arranged. If financing arrangements are not
obtained by November 1, 1996, TSM has the right to instruct the Bank not to
deliver letters of credit according to the Delivery Schedule and this
Contract for any hospitals that TSM does not deem capable of making payment
timely or that are not connected by telecommunications. The parties
acknowledge that use of CTI Systems over time will result in substantial
medical care cost savings to China as a result of advanced and improved
diagnostic capabilities. The parties contemplate that the health care cost
reductions will assist over time in payment for the CTI Systems and thus will
seek financing to coordinate payment in subsequent years with the realization
of cost reduction benefits.
11. HOSPITAL OBLIGATION . Each purchasing hospital and TSM shall be
liable for payment to the Bank letter of credit issued for that hospital.
The hospital shall have space designated for the QTA Lab when delivered. The
space shall be connected with water, electricity, and outside air. The
hospital shall employ persons to operate the CTI Systems. And shall
coordinate with TriSun to train those employees concurrent with installation.
12. CTI SYSTEM TRAINING. TriSun shall prepare for TSM before September
1995 a brochure to introduce to the hospital administrators the benefits of
utilization of the CTI System. Upon installation of each CTI System, TriSun
shall train at least two technicians and one doctor at each hospital to
operate the CTI Systems. Assuming substantial compliance with the Delivery
Schedule, TriSun shall provide at no cost to the hospitals a training school
in each region to provide regularly scheduled classes for continuing
education to train instructors and operators. TriSun has an obligation to
maintain training programs through the year 2003.
13. INSTALLATION AND WARRANTY. TriSun is obligated to assemble,
deliver, and install the CTI System. TriSun is obligated to pay
manufacturing costs and to pay all costs related to insurance and freight
required to deliver the CTI System to the respective hospital. After
installation, TriSun will test the systems to determine that it is
operational. TriSun shall also be responsible for responding to service
inquiries. TriSun provides a two year warranty on all parts for the CTI
System. The respective hospital shall pay TriSun for any service calls or
operational assistance which is not caused by parts failure. TriSun has an
obligation to repair the CTI Systems at cost (meaning actual labor and parts
replacement cost) for five years, dependant on receipt of prompt payment to
TriSun.
14. CONDITIONS. TriSun will demonstrate that each
installation is operational. TSM and TriSun recognize that the first CTI
System installations will be in hospitals best equipped with
telecommunications technology. The thermal imaging unit will be fully
functional in the hospital with each CTI System. Ultimately, the
telemedicine network contemplated by the Golden Health Plan will require
adequate telecommunications access by the hospital for utilization of the
telemedicine capabilities, of the CTI Systems and CTI Remote Systems. TSM
relies upon JiTong Communications Co. to implement the superhighway.
15. THERMAL IMAGING LICENSE. TriSun delivers a license to each
hospital for use of the thermal imaging equipment and a warranty obligation
from its manufacturer. TriSun shall provide the thermal imaging transparency
and print paper required for analysis of thermal imaging treatment. Each
hospital shall charge its patients for each imaging treatment. TSM shall
cause the hospitals to pay TriSun the Yuan equivalent of $5.00 (U.S.) for
each imaging picture printed. TriSun shall receive no payment for use of the
imaging equipment other than this U.S. $5.00 charge for each print or
transparency. This payment shall be a continuing license fee. TriSun shall
not charge for any prints made during initial training exercises conducted by
TriSun with the hospitals. The hospital shall not be required to pay for the
initial transparencies and print paper provided by TriSun upon installation
of the CTI Systems, but the hospitals shall pay $5.00 per page upon delivery
for all future supplies. TriSun shall not charge for any paper which
3
does not produce proper pictures as a result of fault of the equipment. The
hospital shall retain any paper which fails to make a proper print and return
the paper to TriSun for credit. The hospitals may not purchase paper from
any other source for use of the thermal imaging equipment.
16. DUTIES AND TAXES. TSM or the purchasing hospital shall be
responsible for payment of any duties or taxes charged by PRC or any state or
municipality or other country for delivery and installation of the CTI
Systems. If PRC Customs requires payment of duties upon delivery to port, or
if the shipping country imposes a tariff or duty, the respective hospital or
TSM shall pay such duty or TriSun may add the duty to the next letter of
credit to be issued. If the duty or tariff is known before the order, the
payment procedures may be modified to require the Bank to include the amount
of the duties in the letter of credit, which shall be paid by the purchasing
hospital.
17. ARBITRATION. Any dispute between the parties or any hospital or
the Bank pertaining to this Contract shall be resolved by binding arbitration
in accordance with the UNCITRAL Arbitration Rules administered by the
International Centers for Arbitration ("ICA"). ICA shall be the appointing
and administrative authority. The supplemental procedural rules of the ICA
and laws of Cyprus shall apply. In the event of a dispute, any party may
notify ICA. Each party shall select an arbitrator to resolve the dispute.
ICA shall appoint an independent third arbitrator who shall be familiar with
customs in China and who shall be acceptable to both arbitrators.
18. REGIONAL COMPUTER ARCHIVES. TriSun shall provide several regional
storage computer centers to archive the results of CTI Systems examinations.
Each CTI System and CTI Remote System will be able to access and retrieve
information from the computer storage centers. The centralized computer
centers will receive digitized thermal imaging treatment results, not only
for the purpose of storing patient records, but also for the purpose of
building a data base used for patient diagnostic conclusions. The central
computer centers can assimilate actual health conditions with the thermal and
other imaging modalities to construct a system for developing accurate
physiological and anatomical diagnostic assistance to doctors. Each CTI
System will be networked to access this information for improved diagnosis.
TriSun will build the first diagnostic center after the first ten CTI Systems
are purchased. The first regional computer center should serve at least 500
hospitals and regional clinics. The diagnostic capabilities and computer
centers will complete the directive of the Golden Health Plan for placing the
CTI Systems for developing telemedicine and diagnostic capabilities for
improvement of health care in China.
Signed effective this 24th day of April, 1995.
TRISUN MEDICAL CORPORATION--CHINA
By: /s/ Pei DongHong
--------------------------------
Dr. Pei Donghong, President
Legal Representative
TRISUN/CTI ASIA, LTD.
By: /s/ Xxx Xxxx
--------------------------------
Dr. Xxx Xxxx (Xxx Xxxx), Chairman
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxx, President
4
