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EXHIBIT 10.6
OEM PURCHASE AGREEMENT
between
Merge Technologies Inc
and
Philips Medical Systems Nederland B.V
CONTENTS
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I. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
II. Quantities and Pricing . . . . . . . . . . . . . . . . . . . . . . . 4
III. Planning and Ordering Procedure . . . . . . . . . . . . . . . . . . 5
IV. Development Phase/Type Approval Testing/Release for Delivery . . . . 5
V. Product Documentation . . . . . . . . . . . . . . . . . . . . . . . . 6
VI. Delivery, Inspection and Payment . . . . . . . . . . . . . . . . . . 7
VII. Warranty on Hardware . . . . . . . . . . . . . . . . . . . . . . . . 9
VIII. Software and Warranty on Software . . . . . . . . . . . . . . . . . 10
IX. Government Approvals, Compliance with Law, GMP/Quality Control
Audits and Recalls . . . . . . . . . . . . . . . . . . . . . . . . . 10
X. Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . 12
XI. Confidentiality and Use of Data . . . . . . . . . . . . . . . . . . 13
XII. Service Support and Spare Parts . . . . . . . . . . . . . . . . . . 14
XIII. Access to and Use of OEM Data . . . . . . . . . . . . . . . . . . . 14
XIV. Indemnity and Limitation of Liability . . . . . . . . . . . . . . . 15
XV. Term and Termination . . . . . . . . . . . . . . . . . . . . . . . . 15
XVI. Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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XXX XXXXXXXX AGREEMENT
between
Merge Technologies Inc
and
Philips Medical Systems Nederland B.V.
This AGREEMENT is entered into this 24th day of September, 1994 (hereinafter
"Agreement") by and between Merge Technologies Inc., a corporation organized
and existing under the laws of the State of Wisconsin with its principal place
of business at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxxxx, XX 00000, XXX (hereinafter
"OEM"), and Philips Medical Systems Nederland B.V., a corporation organized and
existing under the laws of the Kingdom of the Netherlands, with a place of
business at Xxxxxxxxx 0-0, 0000 XX Xxxx, xxx Xxxxxxxxxxx (hereinafter "PMSN".)
WHEREAS OEM manufactures and sells interface equipment and software packages
enabling the interconnection of various diagnostic and therapy systems of
various medical equipment providers; and
WHEREAS PMSN is in the business of manufacturing, selling and servicing a broad
range of medical imaging and therapy systems including workstations and desires
to incorporate equipment manufactured by OEM into these systems to effect the
desired interconnection through its workstations.
FOR AND IN CONSIDERATION of the premises and mutual covenants set forth herein,
and for other good and valuable consideration, the receipt to which is hereby
acknowledged, the parties hereby agree as follows:
I. Definitions
A. "Affiliate Company(ies)": Means any company, corporation, partnership or
other legal entity, present or future, which is controlled by one of the
parties. Philips
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Electronics N. V. and any company controlled by it shall also be
deemed to be affiliate companies of PMSN. For this purpose,
"control" means direct or indirect beneficial ownership of more than
50% of the voting stock or of more than 50% interest in the income
of such corporation or entity.
B. "Product(s)": Means all OEM's hardware and software products as
listed in Attachment A and having the specifications and
characteristics set forth in Attachments B, attached hereto, or
otherwise as amended by written agreement of the parties. Products
include Software as defined hereinafter.
C. "Spare Part(s)": Means spare or replacement parts for the Product
including, but not limited to those spare or replacement parts
listed in Attachment H, attached hereto.
D. "Term": Means the time period set forth in Section XV below and any
extensions thereof.
E. "Agreement": Means this document, the Attachments thereto and any
written amendment to this document which is executed by the parties
as provided below.
F. "Type Approval Testing": Means the procedure described in
paragraphs IV A and B below.
G. "Purchase Order(s)": Means PMSN's standard purchase order form,
issued to OEM to specify delivery point, delivery schedule and
Product configuration and commit PMSN to purchase of a given unit of
Product.
H. "Epidemic Failure": Means the repeat of a certain type of failure
of Product or Parts such that a pattern is recognized, present in at
least three (3) of ten (10) sequentially delivered Products.
J. "Manuals": Means all technical documentation considered necessary
by PMSN for the purpose of installing, servicing and repairing
Products. This documentation includes, but is not limited to,
installation, operator, and maintenance manuals.
K. "Software": Means all operational computer programs, including
firmware, necessary for operation of the Product. In case the
Product concerned is Software only,
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special arrangements may be made and will be part of the specification as
attached hereto in Attachment X.
X. "DICOM": Means the interface protocol version 3.0, or higher, as defined
by the working group 3 of ACR-NEMA.
II. Quantities and Pricing
A. OEM agrees to sell and PMSN agrees to purchase, subject to successful
completion of Type Approval Testing as set forth below and at the condition
specified in Attachment H, Products as listed in Attachment A which
conforms to the Specifications in Attachment B, at prices to be determined
in accordance with the Prices and Planned Yearly Numbers as specified in
Attachment C.
All prices set forth in this Agreement are in United States dollars.
B. Purchase Orders issued by PMSN before successful completion of Type
Approval Testing as provided in paragraph IV B below shall be contingent
upon OEM's meeting the milestones required for PMSN approval of Product as
described in paragraphs IV A and B below.
C. Open
D. The pricing as listed in Attachment C shall apply to all Purchase Orders
tendered to OEM during the Term of this Agreement.
E. If new Product prices are to be negotiated, negotiations shall commence at
least three (3) months before the new price is to become effective.
F. When price negotiations referred to in paragraph II E above extend beyond
the price-validity period as specified in Attachment C, the prices valid
for the previous period will continue to remain in effect until such time
as the parties have reached mutual agreement on the new prices.
G. If no agreement can be reached on new prices after serious negotiations,
PMSN has the right to terminate this Agreement giving OEM a thirty (30)
days prior written notice. In the event of such termination, PMSN
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shall complete its Purchase Orders as placed before the date of said
termination.
H. Price increases shall not be applicable to unfilled purchase orders
which have been accepted by OEM. [**] In the event OEM would [**].
J. PMSN may have any of the PMSN Affiliate Companies such as Xxxxxx
Company, Port Chester, NY, USA, execute logistic procedures, such as,
without limitation, placing Purchase Orders, payments of invoices,
transport arrangements, shipping instructions and handling of return
shipments for repair or replacement on behalf of PMSN.
III. Planning and Ordering Procedure
On a monthly basis PMSN will provide OEM with [**] during said
twelve months, if so requested by OEM. Such forecasts including the
quantities and delivery Schedules therein shall not bind either party
except as to those orders listed in the forecast for which PMSN has
issued unconditional Purchase Orders, such Purchase Orders confirmed by
OEM within ten (10) days after receipt of same, and not having been
cancelled or terminated as provided in this Agreement. The terms of
this Agreement shall govern over any contrary, different or
additional terms (other than as to Product configuration, delivery
schedule and delivery condition) in PMSN's Purchase Order or in any
other standard form documentation submitted by either party. Delivery
time for Products so forecasted shall be [**], delivery time
of Products over and above the forecasted numbers will be [**].
IV. Development Phase/Type Approval Testing/Release for Delivery
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A. Before the start of commercial deliveries under this Agreement and in
accordance with the agreed milestones, including, but not limited to, those
specified in Attachment J, OEM shall execute Type Approval Tests in order
to ascertain that the Product conforms to the applicable Specifications,
including the agreed quality standards and governmental approvals and
certifications. OEM shall provide PMSN with the supporting evidence
thereof, it being understood that Products already accepted and approved
prior to the execution date of this Agreement shall not pass any further
Type Approval Tests.
B. Upon completion of the tests as per paragraph IV A above and if PMSN is
satisfied with the results of these tests, PMSN shall provide OEM with a
written release statement ("Release for Delivery Certificate") to authorize
the start of deliveries under any open Purchase Order(s). PMSN shall have
no obligation to purchase a Product, Spare Part or any other items under
this Agreement unless Type Approval Testing is completed successfully, even
if written Purchase Orders for Products and related Spare Parts are placed
with OEM before Type Approval Testing is complete.
C. Once a Product is released for delivery by PMSN, OEM shall not make any
changes or modifications in the Product concerning the interface between
Philips' modalities and the Product, neither in hardware nor in software
without prior written consent of PMSN. This requirement however does not
preclude OEM from using equivalent components and parts that do not affect
form, fit, or function of the Product or interchangeability of Spare Parts
or compliance with the Specifications, including certification. OEM shall
supply to PMSN updated Spare Part lists at six month intervals to indicate
at what serial number the updated Spare Parts are applicable.
D. OEM shall advise PMSN in advance of any and all changes or modifications to
a Product or similar items in OEM's product line and afford PMSN the
opportunity to have these changes or modifications incorporated in Products
without additional charge to PMSN.
V. Product Documentation
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A. OEM, at its own expense, shall furnish to PMSN such engineering
drawings, handbooks, operator and service manuals (in OEM's standard
format) and other technical data as PMSN shall reasonably request
with respect to Products purchased hereunder and other items used as
Service or Spare Parts for Product sold to PMSN. PMSN shall have the
right to duplicate and distribute to customers all such documents
regardless of whether or not they are included in the grant of
rights in paragraph X B below. Documentation which PMSN is not
required to distribute to its customers may be designated by OEM as
confidential and shall be held in confidence by PMSN as provided in
Section XI below. The Manuals supplied by OEM shall be reviewed and
approved by PMSN and, at a minimum, incorporate the information set
forth in the PMSN standards which would apply to this documentation
if it were prepared by PMSN. PMSN shall assist OEM in producing the
said Manuals and documentation and shall bear its own costs and
expenses, but not those of OEM, with respect to such assistance.
B. All said Manuals and documentation shall be updated and kept current
by OEM during the lifetime of the Product and include an implemented
changes and modifications pertaining to the Product. Corrections
shall be furnished to PMSN without additional charges.
VI. Delivery, Inspection and Payment
A. All shipments by OEM shall be in compliance with their respective
Specifications, except as provided in Section IV D above.
B. One copy of the operator and service Manual shall be included with
each item of Product which is shipped by OEM to PMSN or directly to
PMSN's customers, except that two copies of these Manuals shall be
included in shipments of Product to the United States Veterans
Administration, Department of Defense or other customers of PMSN
which are agencies of the United States Government.
C. Unless otherwise specified, any goods to be delivered hereunder
shall be boxed, crated, carted and stored without charge and shall
be packed and packaged (a) to insure safe arrival at their ultimate
destination, (b) to secure the lowest transportation costs; and (c)
to comply
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with requirements of common carriers. PMSN's order numbers and symbols must
be plainly marked on invoices, packages, Xxxx of Lading and shipping orders.
Shipping memos and packing lists must accompany goods. Bills of Lading or
Shipping Receipts shall accompany each invoice. PMSN's count or weight shall
be final and conclusive on shipments not accompanied by packing lists. Goods
must be routed in accordance with PMSN's instructions. All shipments must
contain a packing list and the box or crate containing the packing list must
be clearly identified.
D. Time is and shall remain the essence of deliveries under this Agreement,
therefore it is expressly agreed that all deliveries shall be made as
confirmed by OEM and no act of PMSN, including without limitation,
acceptance of late deliveries shall constitute a waiver of this provision.
PMSN shall also have the right to refuse or return at OEM's risk and expense
shipments made in excess of the quantities specified in the applicable
Purchase Order or in advance of confirmed delivery schedule. OEM shall
notify PMSN immediately of any actual or potential labor disputes or other
cause which is delaying or threatens to delay the timely performance of
Purchase Orders.
E. Delivery of Products shall be Ex-Works OEM's plant at Milwaukee. "Ex-Works"
as this term is defined in the 1990 Incoterms, issued by the International
Chamber of Commerce, Paris, France. Title and risk of loss or damage to the
Products or Spare Parts shall pass from OEM to PMSN at the said delivery
condition Ex-Works.
F. PMSN shall have the right to reject all or any of the Product or Spare
Part(s) which are proved not to meet their Specifications, provided that
such claim shall be submitted to OEM with the supporting evidence within
thirty (30) days after the arrival date at the installation site.
G. In case of such rejection, OEM and PMSN shall decide in joint consultation
whether PMSN will:
(i) replace defective Spare Parts or units or
(ii) that OEM will replace at no charge to PMSN the pertaining Product(s).
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In case of replacement of defective Spare Parts or units, such defective
items shall be returned to OEM for full credit.
H. All Products or parts thereof to be supplied by OEM to PMSN
pursuant to this Agreement shall be checked and tested by OEM in
accordance with the Acceptance Procedures specified in Attachment D, to
be in compliance with the Specifications. OEM shall keep record of the
test results at least ten (10) years after delivery of each single
Product or parts thereof and on request provide PMSN with copies. These
Acceptance Procedures will be agreed upon between the parties hereto as
well as the specimen of a Test- Certificate that should be signed by
OEM's responsible quality officer and shall accompany each Product as
evidence that the Product complies with the applicable Specifications. A
copy of the associated Test Certificate shall be shipped with each
Product unit. Each unit of Product shall meet the requirements of the
Type Approval Testing, even though such testing may not be repeated for
each such unit.
J. It is explicitly understood by OEM that PMSN is not obligated to
execute any incoming inspection or other inspection concerning
compliance with the Specifications of Products delivered hereunder by
OEM and OEM shall be fully responsible for and hold PMSN and the PMSN
Affiliate Companies harmless from claims for damages resulting from any
non-compliance as well as from non acceptance of Products as per
paragraph VI F above.
K. OEM shall be paid the prices stipulated herein, less deductions,
if any, as herein provided, after delivery, inspection and acceptance by
PMSN of the Product or Part(s) at PMSN's plant or other place designated
in the Purchase Order and the submission of proper invoices or vouchers,
except that PMSN shall have the right to defer payment on advance
deliveries until the time such payment would have been due if the
deliveries had been made as scheduled. Unless otherwise specified,
payment will be made on partial deliveries inspected and accepted by
PMSN when the amount due on such deliveries so warrants. PMSN shall pay
all invoices within forty five (45) days from date of receipt.
VII. Warranty on Hardware
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A. OEM warrants to PMSN that all hardware of Products delivered under
this Agreement will meet the Specifications which are attached to this
Agreement and made a part hereof as Attachment B, will conform to the
list of government and industry standards attached hereto as Attachment
F and will be free from defects due to faulty design or materials, or
improper workmanship, for [**] from the date the installation
is complete at PMSN's customer's site or [**] of invoice date,
whichever is earlier. This warranty of OEM shall be under the terms of
OEM's Warranty which is attached hereto and made a part hereof as
Attachment E. Replacement Products provided under the terms of
Attachment E shall be shipped to PMSN within three (3) business days of
receipt of OEM of the Product being replaced.
B. Notwithstanding that PMSN may have worked with OEM in the
Preparation of the specification (including the Specifications attached
as Attachment B) for Products, it is understood that PMSN is relying on
the technical expertise of OEM with respect to the adequacy of the
Specifications and with respect to the proper manufacture of the Product
including those aspects of its manufacture which are addressed above.
VIII. Software and Warranty on Software
A. OEM warrants that the Software, when used within the scope of
application license set forth herein, will conform to the Specifications
during [**] after the first delivery thereof. During this
Warranty period OEM agrees to keep its Software current with all new
versions of Software produced by PMSN or other specified medical
equipment providers which would cause that particular Product to be non
operational or only partially operational. OEM agrees to provide within
one (1) month after acceptance by PMSN and free of charge to the
end-user and to PMSN any new Software version needed for only
in-warranty Product.
B. During the out-of-warranty period OEM agrees to keep its
Software current with all new versions of Software produced by PMSN or
other medical equipment providers which would cause a particular Product
to be non operational or only partially operational. New Software
versions for out of Warranty Products shall be available
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on a to be agreed upon basis to PMSN whenever released by OEM.
IX. Government Approvals, Compliance with Law, GMP/Quality Control
Audits and Recalls
A. OEM agrees that the design of the Products and Spare Parts thereof
shall comply with the requirements as the parties may agree upon and as
further specified in Attachment B, which includes also the DICOM
Conformance Declaration. Any obligation for verification testing of
said requirements shall be the responsibility of OEM. Should it be
determined that the Products or Spare parts thereof are not in
compliance with the applicable agreed requirements then OEM shall make
the necessary changes at its own expense.
B. OEM shall comply with the requirements of the United States Food
and Drug Administration for good manufacturing practices ("GMP"),
establishment registration, device listing, Premarket Notification,
Medical Device Reporting (21 CFR Part 803), reporting under Radiation
Control for Health & Safety Act and labelling as they apply to the
manufacture and/or importation of Product by OEM. Authorized
representatives of the respective safety standards organizations
(including Underwriters Laboratories, ETL Testing Laboratories, Canadian
Standards Association, British Standards Institute, German Standards
Xxxx) and governmental agencies (including the FDA) shall be allowed
access to OEM's facilities or those of its subcontractors or vendors,
for the purpose of inspection during normal working hours pursuant to
applicable laws, regulations and the reasonable requirements of PMSN.
C. OEM agrees, to the extent necessary to comply with CDRH rules and
regulations pertaining to GMP and with the international ISO 9001
standard. Therefore, upon request and at least two (2) weeks advance
written notice to OEM, independent auditors may (i) inspect the storage
and quality of parts of Products in OEM facilities, and (ii) audit the
quality control procedures and methods applied by OEM in its facilities
in the development and manufacturing and assembling of Products in
accordance with GMP and ISO 9001.
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D. In the event any of the above requirements, safety in regulations and/or
standards might change, OEM shall, at its costs, make all the necessary
modifications in and to the Products and/or Spare Parts which have not
yet been accepted by the end-user.
E. OEM shall within fifteen (15) days after receipt of same respond to any
question and provide all necessary information to PMSN or one of its
Affiliated Companies Regulatory Department's arising out of a recall or
corrective action program or related program.
F. In the event that an Epidemic Failure of a Product or any Spare Part or
component thereof is found or that any recall program of Products, Spare
Part(s) or component(s) may be required, PMSN shall promptly notify OEM
thereof in writing. OEM and PMSN shall then promptly and jointly conduct
an investigation to determine the cause of such Epidemic Failure or
recall program. If and to the extent it is determined by PMSN, acting
reasonably and in good faith, as a result of such joint investigation,
that the cause of such Epidemic Failure or recall program is
attributable to any defect in (a) Product(s), Spare Part(s) or
component(s) thereof, OEM shall at its expense provide sufficient
Product(s), Spare Part(s) or component(s) to replace all such defective
Product(s), Spare Part(s) or component(s) in PMSN's inventory and also
those which have been delivered by PMSN to its customers. OEM shall
bear all reasonable costs and expenses (including shipping charges) for
replacing such Product(s), Spare Part(s) or components previously
shipped by OEM.
X. Intellectual Property
A. OEM covenants and guarantees that all Products and Spare Parts furnished
hereunder which are not of PMSN's design (and the normal use and sale
thereof), including, without limitation, the manufacture, use and sale
of products and systems/incorporating such Product and Spare Parts, are
free of infringement of any valid United States or foreign patent,
copyright, trade secret, maskwork right or trademark, and that OEM,
will, at its own expense, defend and hold PMSN harmless from any claims
or suits alleging such infringement by PMSN, its successors, assigns,
customers or any persons selling or using such goods or any product
manufactured by PMSN which may be
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claimed to involve any such alleged infringement. The purchase of the
Products shall confer on PMSN from OEM a worldwide, royalty-free,
non-exclusive license to use such Products and Spare Parts. Such license
also includes the right of PMSN and PMSN's Affiliates Companies to
sublicense others to use, reproduce, and to distribute copies for
back-up purposes, both externally and internally, of the Software and of
the related documentation, written material and/or derivative works of
the Software.
For Software only Products, special arrangements will be made and set
forth in Attachment B hereto when coming into force
B. PMSN shall have sole option as to the use of the following trademarks:
(a) the wordmark "PHILIPS" and Philips Shield Emblem and (b) such other
trademark(s) as, may be designated by PMSN ("Trademarks.") OEM
acknowledges all rights of PMSN in and to the Trademarks and further
agrees that the manufacture and supply of Products, Spare Parts and
packing, if any, bearing the Trademarks shall not be construed as a
grant of any rights in such Trademarks or as the use of such Trademarks
by or for the benefit of OEM.
C. OEM grants to PMSN and PMSN Affiliate Companies a personal, nonexclusive
right to sublicense the Software to customers provided that PMSN obtains
agreement from each such customer, before or at the time of furnishing
the Software, that, that only a personal, nontransferable right to use
the Software is granted to such customer; that no title to the Software
is transferred to such customer, that such customer will not copy the
Software except as necessary to use such Software on a single CPU;
that such customer will not transfer the Software, except as
authorized by the entity furnishing the Software; that such customer
will not in any form export, reexport, resell, ship or divert or cause
to be exported, reexported, resold, shipped or diverted, directly or
indirectly, the Software or a direct product thereof to any country for
which the United States Government or any agency thereof at the time or
export or reexport requires an export license or other governmental
approval without first obtaining such license or approval; and that such
customer will not reverse compile or disassemble the Software.
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XI. Confidentiality and Use of Data
Any specifications, parts of software, drawings, samples, designs and
other information labelled as confidential furnished by either party to
the other shall be maintained in confidence by the receiving party, and
shall not be reproduced, disclosed, duplicated, or used, except to the
extent required for performance under this Agreement, and with all
reasonable precautions to prevent any unauthorized reproduction or
disclosure, without the prior written consent of the disclosing party.
Upon completion of the parties obligations under this Agreement including
any legal and contractual obligations incurred by PMSN to its customers
and other third parties by reason of this Agreement, the receiving party
shall promptly return to the disclosing party, all specifications,
drawings, samples and other data, furnished by the disclosing party in
connection with this Agreement (together with all copies or reprints not
required to maintain existing installations) then in the receiving party's
possession or control, and the receiving party shall thereafter make no
further use, either directly or indirectly, of any such specifications,
drawings, samples, data or any information derived therefrom without the
disclosing party's written consent.
XII. Service Support and Spare Parts
A. OEM agrees to comply with all terms and conditions as set forth in the
Attachment G of this Agreement.
B. A list of Spare Parts, containing an information as required in the
Attachment G Section 7.1, is included hereto as Attachment H.
XIII. Access to and Use of OEM Data
PMSN will incorporate the Products into systems which are sold by PMSN to
its customers and in many cases be responsible for maintenance and repair
of the Products on a continuing basis as part of PMSN's systems. Moreover,
interconnection with systems of other medical equipment providers will
also be effected under this Agreement. Reference is made to the fact that
the Products and Spare Parts will be unique to OEM and cannot be replaced
by
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other components in systems sold by PMSN without considerable expense,
delay and irreparable damage to PMSN's on-going business, for which no
adequate monetary remedy exists. If for any reason, OEM should fail to
comply with production and delivery requirements hereunder or
discontinue manufacture of the Products or Spare Parts, without PMSN
being in material breach of its own obligations hereunder, OEM shall
provide to PMSN sufficient documentation concerning the Products and
Spare Parts, including but not limited to Specifications, drawings,
lists of parts and sub-vendors, and Software in source and object code
to the extent necessary to permit sustaining of Products, manufacture or
procurement of replacement product or parts from another source. In such
event, OEM agrees to grant and does hereby grant PMSN a perpetual,
non-exclusive, royalty-free license to use such data to sustain
Products, manufacture or have manufactured a replacement product
provided, however, that OEM is entitled to disclose such data if
received from a third party under a Non-Disclosure or the like
Agreement. If the latter is the case, OEM shall do its utmost to
convince the concerning third party that disclosure of confidential data
has to be arranged between the third party and PMSN in order to have the
installed based maintained appropriately.
XIV. Indemnity and Limitation of Liability
A. OEM agrees to protect, indemnify, and hold PMSN harmless against any
claim, loss, damage or expense, including attorney's fees which may
result from OEM's breach of excess or implied warranties including
claims of injury to persons (including death) or damage to property
which may result in any way from any act or omission of OEM of its
agents, employees or subcontractors or from a defect in the Product or
Spare Parts or the design, manufacture, sale operation, handling by OEM
or use, thereof.
B. Except as regards the indemnity by OEM set forth above, infringement of
intellectual property rights and PMSN's rights under Section XIII above,
neither party shall be liable to the other for special, indirect or
consequential damages (including but not limited to loss of business
goodwill, revenue or profits) by reason of any act or omission or
arising out of or in connection with this Agreement. The foregoing is a
separate,
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essential term of this Agreement and shall be effective upon the
failure of any remedy, exclusive or not.
XV. Term and Termination
A. This Agreement shall become effective on the date first above written
and shall for an initial term continue until July 31, 1996. Thereafter,
this Agreement shall automatically be renewed for successive period(s)
of one (1) year unless terminated with three (3) months written notice.
B. Upon expiration or termination of this Agreement, all Purchase Orders
placed under this Agreement shall remain in effect on the terms set
forth herein, notwithstanding such expiration or termination. The
non-breaching party may terminate an individual Purchase Order as to
which a material, uncured breach by the other party has occurred. In the
event of termination of this Agreement by either party because of a
material, uncured breach of this Agreement, the non-breaching party may
at its sole option terminate without obligation all Purchase Orders
placed under the terms of this Agreement.
C. The following shall be a material breach thereof: The insolvency, the
filing of a voluntary petition in bankruptcy, the filing of an
involuntary petition to have the party declared bankrupt provided it is
not vacated within 30 days thereafter, the appointment of a receiver or
trustee for either party provided such appointment is not vacated within
30 days thereafter, the execution of an assignment for the benefit of
creditors by either party, or the merger or reorganization of OEM or of
a sale of a substantial portion of OEM's assets provided that such
merger, reorganization or sale shall materially adversely affect OEM's
ability to perform the terms of this Agreement.
D. Termination or expiration of the term of this Agreement shall not
relieve either party of any rights and obligations then accrued under
Sections VII (inclusive of warranty) through XIV which by their nature
or expressly by the terms of this Agreement extend beyond the date of
termination, expiration or cancellation.
XVI. Other Provisions
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A. The validity, interpretation and performance of this Agreement and of
purchases made hereunder shall be governed by the laws of the State of New
York, without regard to the principles of choice of law.
B. Any notice or other communication required or permitted hereunder shall be
in writing and shall be deemed to have been given if placed in the United
States or the Netherlands, as the case may be, mail registered or
certified, postage prepaid, or if personally delivered, addressed as
follows:
If to OEM: Merge Technologies Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, XX 00000
U.S.A.
Attn.: Vice President Sales & Service
If to PMSN: Philips Medical Systems Nederland B.V.
Veenpluis 4-6
5684 PC Best,
The Netherlands
Att. General Counsel
Building QM
C. No failure by either party to insist upon strict compliance by the other
party with any of the terms, provisions or conditions of this Agreement in
any instance shall be construed as a waiver or relinquishment by either
party of the other party's rights to insist upon strict compliance in the
future.
D. If any of the provisions of this Agreement are held to be void or
unenforceable by or as a result of determination of judicial authority
having competent jurisdiction, the decision of which is binding upon the
parties, the parties agree that such determination shall not result in the
unenforceability of the remaining portions of this Agreement. The parties
further agree to replace such void or unenforceable provisions with
provisions which will achieve to the extent possible, the economic,
business and other purposes of the void or unenforceable provisions.
E. This Agreement, the Attachments and any documents incorporated herein by
reference shall be the entire agreement between OEM and PMSN with respect
to its subject matter. This Agreement will supersede all prior
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discussions, negotiations and agreements between OEM and PMSN on the
subject matter set forth herein. This Agreement shall be amended only by
a writing signed by an officer of the party to be bound by such writing.
F. OEM hereby warrants to PMSN that Products and Spare Parts including
their packing materials, neither contain nor are manufactured with any
substances as specified in Attachment K which will be subject to update
from time to time by PMSN.
G. This Agreement sets forth the entire agreement between the parties
hereto with respect to the subject matter hereof and all oral and
written representations, warranties, agreements, and/or other
inducements relating to this Agreement and it subject matter prior to
the effective date have been included herein, or have been fully
performed and discharged, or, omitted, unless otherwise agreed upon and
confirmed in writing by both parties signed on or after the effective
date of this Agreement.
H. Neither PMSN's general conditions of purchase nor OEM's general
conditions of sale are applicable to this Agreement or to any Purchase
Order and order confirmations for products or Spare Parts in whole or in
part.
I. Either party's failure to insist in any instance upon strict performance
by the other party of any terms and covenants herein shall not be
construed as a permanent waiver of such terms or covenants, or as a
waiver of any other of the terms and covenants contained herein.
J. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective successors and permitted assigns. This
Agreement may not be assigned, transferred or hypothecated in whole or
in part by either party except by prior written consent of the other
party. However, no consent is required to an assignment or transfer in
whole or in part by PMSN to any of the PMSN Associated Companies. PMSN
shall notify OEM of such assignment or transfer in writing.
K. OEM shall not without PMSN's prior written consent use Philips' name or
trademark as such and/or use name in connection with any advertisement
or sale literature nor advertise that it is a supplier of PMSN or
Philips and/or
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jure), natural phenomena, such as earthquakes and floods, fires, riots,
wars, shipwrecks, freight embargoes, lockouts or other causes, whether
similar or dissimilar to those enumerated above, unforeseeable and beyond
the reasonable control of the parties and which prevent the total or
partial carrying out of any obligation under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in a manner legally binding upon them effective this 24th day of
September, 1994.
OEM Philips Medical Systems
Nederland X.X.
X.X. xxx Xxxxx
By: X.X. Xxxxxxxxx By: X.X. xxx Xxxxx
-------------------------- --------------------------
Title: President Title: Director
----------------------- -----------------------
Date: X.X. Xxxxxxxxx Date: 28/9/94
------------------------ ------------------------
24-9-94
20
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LIST OF ATTACHMENTS
Attachment A Product List and Product Characteristics
Attachment B Product Specifications
Attachment C Prices and Planned Yearly Numbers
Attachment D Acceptance Procedure
Attachment E OEM's Warranty
Attachment F List of Mandatory Standards
Attachment G Service Arrangements
Attachment H Spare Parts List
Attachment J Type Approval Procedure
Attachment K List with Prohibited/Restricted Substances
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FIRST AMENDMENT AGREEMENT
This Agreement is effective as of the date of last signature between
MERGE TECHNOLOGIES INC. of Milwaukee, Wisconsin, U.S.A. (hereinafter referred
to as "Merge")
and
PHILIPS MEDICAL SYSTEMS NEDERLAND B.V. of Best, the Netherlands (hereinafter
referred to as "PMSN")
WHEREAS, PMSN and Merge entered into an OEM Purchase Agreement dated September
24, 1994, for the supply of interface equipment and related software packages
by Merge to PMSN; and
WHEREAS, parties have agreed to license Merge to use the PMSN proprietary and
confidential Validation Set (as defined in Annex 1) in accordance with the
terms and conditions of this Agreement, however, for the sole purpose of
testing interfaces.
NOW THEREFORE, the parties have agreed as follows:
Article 1
Scope of Agreement
Subject to the terms and conditions hereinafter set forth, PMSN hereby grants
to Merge, to the extent PMSN has a free right to do so, a non-exclusive,
non-transferable and indivisible license, without the right to sublicense, to
use, for its own products only, PMSN's Test suite software-package, as
specified in Annex 1 hereto (hereinafter called "the Validation Set").
Article 2
Making available of the Validation Set
(1) PMSN shall make available the Validation Set, in object-code, to Merge. It
is hereby confirmed that Merge shall only use the Validation Set for the
authorised testing of its own products and products of third parties.
(2) Merge shall use the Validation Set properly and solely in accordance with
instructions given by related manuals or otherwise given by PMSN. The
Validation Set may only be used by experienced engineers of Merge.
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(3) Merge shall not copy or otherwise reproduce the Validation Set or any
information relating thereto provided by PMSN. Merge hereby fully
acknowledges PMSN's property rights (including its copyrights) in the
Validation Set.
(4) It is understood that PMSN does not undertake any obligation with regard to
service and maintenance of the Validation Set and/or related information.
However, PMSN is willing to take Merge's maintenance requirements into
account while definite PMSNs own maintenance program. In the event these do
not fit, parties shall discuss the matter in order to define reasonable
other opportunities to fulfil Merge's requirements.
Article 3
Liability
PMSN shall not be liable for any damages or losses other than those for which he
has expressly assumed liability in this Agreement, in particular PMSN shall not
be responsible for bodily injury or damage to property or other damages or
losses sustained by third parties or Merge, which may arise in consequence of
the use of Validation Set. PMSN's liability shall in no event be considered to
extend to indirect or consequential damages of any nature whatsoever including
loss of profit and/or revenue. Merge shall hold PMSN harmless against and
indemnify PMSN for all costs, damages and interests which might arise directly
or indirectly from any claim of third parties in this respect.
Article 4
Price and Payment
(1) Within thirty (30) days as from the date of last signature of this
Agreement, Merge will pay to PMSN an amount of [**] as license-fee for
1996.
(2) In the beginning of October 1996, Parties will discuss the terms of any
extension of this Agreement, including the license-fee for 1997.
Article 5
Improvements
Merge will provide PMSN with suggestions and information, such as
non-confidential test-results, to the extent relating to the quality and
performance of PMSN's Validation Set in order to enable PMSN to improve the
Validation Set and other products. Merge hereby grants PMSN and its affiliates
an unrestricted royalty-free license to use and implement the suggestions and
information, regardless whether it has been protected by Merge, e.g. through
patents.
RM2-96/15 WHS OAC
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Initial Merge Initial PMSN
[**] Confidential Treatment
23
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It is understood that Merge itself will not change, adapt or otherwise modify
the Validation Set.
On the request of PMSN, Merge shall reasonably assist PMSN free of charge with
solving a problem relating to the Validation Set.
Article 6
Confidentiality
Any confidential information, if labelled as confidential, furnished by either
party to the other in connection with this Agreement, shall be treated as
confidential in accordance with the terms as set forth in the OEM Purchase
Agreement dated September 24, 1994.
Article 7
Term and Termination
(1) This Agreement shall enter into force on the date of last signature and
shall remain effective till December 31, 1996. This Agreement shall be
extended subject to and in accordance with the full agreement as to be
reached between PMSN and Merge prior to any such extension.
(2) In the event of a breach of the terms and conditions of this Agreement
by either party, the other party shall have the right to terminate this
Agreement forthwith by notice in writing, if such breach or failure is
not remedied within thirty (30) days after written notice describing
such breach has been given by the other party.
(3) If a party enters into a proceeding relating to dissolution, files a
voluntary petition in bankruptcy, seeks any court or governmental
protection from creditors or makes any assignment for creditors, or
should an order be entered pursuant to any law relating to bankruptcy or
insolvency appointing a receiver or trustee of if the ownership, control
or management of Merge changes, the other party may give written notice
terminating this Agreement and this Agreement shall be terminated in
accordance with the notice.
Article 8
Miscellaneous
(1) In case PMSN stops it activities with the Validation Set and PMSN
decides, at its sole discretion, to sell and/or license the Validation
Set, PMSN shall first offer the Validation Set for sale or by license to
Merge on terms to be mutually agreed upon.
(2) The terms and conditions contained in this Agreement and the Annexes
thereto constitute the entire Agreement between the parties hereto in
respect of the subject matter thereof and shall supersede any and all
prior communications, representations, agreements and/or understandings,
either oral or written, between the parties hereto in respect thereof.
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(3) No agreement or understanding varying or extending the terms and conditions
contained in this Agreement and its Annexes shall be binding upon either
party hereto unless made in writing and signed by duly authorised
representatives of the parties hereto.
IN WITNESS WHEREOF, this Agreement has been signed by both parties in duplicate
in a manner duly binding upon them.
MERGE TECHNOLOGIES INC. PHILIPS MEDICAL SYSTEMS
NEDERLAND B.V.
/s/ Oulio Xxxxxxxxxxx
Name: /s/ Xxxxxxx X. Xxxxxxxx Name: X.X. Xxxxxxxxxxx
-------------------------------- -----------------------------------
Title: V.P. Sales & Marketing Title: Director
------------------------------- ----------------------------------
Date: 4 June 1996 Date: 96 06 04
-------------------------------- -----------------------------------
25
LIST OF ATTACHMENTS
-------------------
Attachment A(1) Product List and Product Characteristics
Attachment B(1) Product Specifications
Attachment C(1) Prices and Planned Yearly Numbers
Attachment D(1) Acceptance Procedure
Attachment E(1) OEM's Warranty
Attachment F List of Mandatory Standards
Attachment G Service Arrangements
Attachment H Spare Parts List
Attachment J Type Approval Procedure
Attachment K(1) List with Prohibited/Restricted Substances
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26
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ATTACHMENT F
LIST OF MANDATORY STANDARDS
Listed below are the mandatory standards that each OEM Product unit must
comply with.
ELECTROMAGNETIC COMPATIBILITY
Radiated/Conducted/Magnetic Emissions
VDE/CISPR Level A requirements of
Philips Standard UXN-13850 section 4.2
Radiated/Conducted/Magnetic Immunity
per requirements of Philips EMC Standard UXN-13850 section 4.3
SAFETY REQUIREMENTS
Underwriters Laboratory (UL)
UL-1950: Standards for Safety of Information and Processing
Equipment
Canadian Standards Association (CSA)
CSA C22.2 No. 0: Definitions and General Requirements
CSA C22.2 No. 1: Safety of Data Processing Equipment
International Electrotechnical Commission (IEC)
EC-950: Safety of Information Technology Equipment
REGULATORY REQUIREMENTS
Food and Druq Administration (FDA)
Code of Federal Regulations (CFR) Title 21 Parts 800 - 1299
Other Requirements
Rules for creating Operating Manuals
per Philips Standard UXW-13122 (Marketing Instructions For use)
ENVIRONMENTAL Requirements
Temperature: 10 to 40 deg C
Relative Humidity: 20% to 90%
Condensation: No
Air Pressure: 50 to 110 kpa (lkpa = 00 xxxxxxxx)
Xxxxxxxxx: g value = lg or less (when unit is on)
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= 2g or less (when unit is off)
. . frequency = 10Hz to 150Hz
. . amplitude = 0 to 0.15 mm (1/2 sine pulse)
Shock . . : g value = Sg or less (when unit is on)
. . = 10g or less (when unit is off)
. . pulse duration = 6msec to 10 msec
Storage Requirements
Temperature: -25 to +70 deg C
Relative Humidity: 5% to 95%
Condensation: No
Air Pressure: 50 to 110 kpa
Vibration: g value = 10g or less
. . frequency = 10Hz to 150Hz
. . amplitude = 0 to 0.75 mm ( 1/2 sine pulse)
Shock (in shipping package) : g value = 25g or less pulse duration = 6msec to
10 msec Testing to verify that the Product unit can meet these environmental
requirements will be based on the following EC standards:
IEC-68- 1 . Basic Environmental Testing Procedure
EC-68-2- 1/Ab Cold For Storage Test
EC-68-2-1/Ad Operational Temperature Test
EC-68-2-2/Bd Operational Temperature Test
EC-68-2-2/Bb Dry Heat For Storage Test
EC-68-2-3/Ca Steady State Damp Heat Test
EC-68-2-30/Db Cyclic Damp Heat Test
EC-68-2-6/Fc Vibration Test
EC-68-2-29/Eb Bump Test
ELECTRICAL REQUIREMENT
The Product unit shall be classified as operating to a type
"S1" mains power source.
Type "S 1 " is defined as a normal AC mains power source
(either single or three phase).
This is the branch circuit of the Hospital, including the
supply for cord connected
equipment. Refer to Philips Standard UXN-13701 (Mains Supply
Equipment
Requirements) for additional information.
Voltage . : 0 00xxx x/-00%
. . 000xxx +/- 10%
Frequency : 50Hz / 60Hz +/- 1%
Immunity : per Philips Standard UXN-13701 section 4.2
Emission : per Philips Standard UXN-13701 section 4.3
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ATTACHMENT G
Service Arrangements
INTRODUCTION
This Attachment sets service requirements for certain products ("Products") as
defined in the OEM Purchase Agreement ("Agreement") between Merge Technologies
Inc. ("OEM") and Philips Medical Systems Nederland B.V. ("PMSN") and is
incorporated by reference in that Agreement and made a part thereof, however
nothing in this Attachment overrides the Agreement to which it is attached.
1. Responsibilities
Unless agreed to otherwise PMSN shall be responsible for installing,
servicing and repairing Products. In order to enable PMSN to properly
fulfil its obligations towards its customers, OEM shall furnish to
PMSN before delivery of each new type of Product, free of charge, two
sets of technical, installation, operation and maintenance manuals,
("Service Manuals").
2. System Delivery
With each Product, OEM shall deliver a checklist regarding all parts
which comprise the delivery package, viz .:
- Packing list
- Configuration record
- Test results/Certificates
- Software (including application and test software),
- Documentation as further specified below.
2.1 Service Documentation
Service Manuals shall substantially be in accordance with PMSN's
guidelines for Service Documentation and in conformity with applicable
governmental and/or international regulations as specified in the
Agreement and the other Attachments to it.
If the Agreement does not provide otherwise, OEM shall be solely
responsible for the cost and expense of preparing and producing the
Service Manuals, except that PMSN shall, upon request, assist OEM in
producing the said Service Manuals and shall bear its own costs with
respect to such assistance.
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The Service Manuals shall contain at a minimum the following
sections:
- Introduction and Technical Data
- Pre-installation Data and Site Planning Information
- Installation
- Setting-to-work .
- Acceptance: Specification checks and data applicable
for field service Corrective Maintenance
- Diagnostic procedures for fault identification
- Adjustment procedures o Instructions for (dis)assembly
- Instructions for removal and replacement
- Procedures after repair or replacement
- Simplified drawings to facilitate fault finding
- Theory of operation and explanations
- Diagrams and drawings
- Repair procedures
- Spare Parts list including PMSN's 12 digit code
numbers
- Specification of required tools (if any), to be
classified for:
1. Pre-installation
2. Installation, setting to work and acceptance
3. Maintenance
No later than sixty (60) days prior to the first shipment of a new
Product, OEM shall forward a draft Service Manual for PMSN's attention to:
Philips Medical Systems Nederland B.V.
XX Xxx 00.000
0000 XX Xxxx,
Xxx Xxxxxxxxxxx
Att: Purchase Group XCB, Building QJ,
so as to enable PMSN to review the Service Manuals before regular
shipments will take place.
The Service Manuals shall be kept updated during the lifetime of the
Product and include all implemented changes and modifications pertaining
to the Product. Corrections shall be furnished to PMSN without additional
charges.
The test and diagnostic software, if any, used by field service
personnel shall be made available by OEM on a
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media suitable for the Product and shall be supplied with each Product.
With each Product OEM shall supply, without additional charge to PMSN, one
set of fully updated Service Manuals, for both hardware and Software. An
additional set of Service Manuals shall be shipped with orders which are
identified as being for the United States Veterans Administration or other
United States Government agencies, also without additional charge to PMSN.
Additional copies of the documentation will be available at USD 1,500 per
copy.
2.2 Preventive (Planned) Maintenance Section Preventive Maintenance is
defined as the pre-planned actions performed to keep the Product in a
specified operating condition by means of systematic inspection,
detection and prevention of initial failures.
The preventive maintenance manual shall contain at least:
1. Schedule(s)
2. Instructions
3. List of Spare Parts to be replaced
4. List of Consumables
5. Specifications of required tools and lubricants
The Preventive Maintenance manual shall be forwarded separately for PMSN'
attention to the address in Section 2.1 above.
2.3 Language
All Service Manuals will be available in the English language. Operator
manuals must be made available in other languages, if legally required, on
terms and conditions to be agreed upon between the parties on a case
(language) by case basis.
3. Support
OEM agrees to make every effort to respond to PMSN's requests for
technical support as quickly as possible. If a request for support is
caused by a failure of OEM to perform under the terms of the
Agreement (e.g. because of incomplete shipments, shipment of the wrong
components, erroneous documentation or instructions), then OEM shall bear
all direct costs involved to solve the problem.
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4. Maintenance
4.1 Repair Policy Repair will be done where practicable by replacing field
exchangeable units. Exchangeable units are, e.g.:
- Printed Circuit Boards
- Keyboards
- Power Supplies
- Motors
- Disc Drives
- Cable Assy's
- etc.
4.2 Reliability
OEM shall make available free of charge, all such relevant data regarding
reliability of the Products, such as, but not limited to, MTBF and MTTR
figures, problem reports at system and part level, field failures at
system and part level, etc. PMSN shall forward to OEM, all information
concerning the performance and behaviour of OEM's Products in use with
systems distributed by PMSN.
5. Field Change Order ("FCO"), Problem Reporting ("PO") and Service Information
("SI") Program
OEM shall maintain a field change order, problem reporting and service
information program in accordance with good industry practice. The
following procedures are intended as minimum requirements for the program
which OEM has in place and for interfacing this program with PMSN's
procedures.
Changes which affect Form, Fit, Function, or Certification of the Product,
or Spare Parts stock may only be implemented after consultation between
OEM and PMSN and mutual agreement.
5.1 Form of FCO
Field modifications, if any, will be made available to PMSN in the form of
modification kits. These kits will contain:
- Implementation instructions, including a list of
applicable Products and serial numbers
- Material and Spare Parts
- Special tools (if any)
- Service Documentation updates
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5.2 Categories and Implementation of FCO's Three (3)
categories will be distinguished:
1. Action for Safety MANDATORY
2. Action for Performance MANDATORY
3. Service Tip
Classification into any of these categories shall be based upon
consultation and mutual agreement.
OEM shall, in any event, be responsible for all costs and expenses
associated with implementing an Action for Safety at any time during the
useful life of each unit of Product
The terms and conditions on which OEM will implement an Action for
Performance (also after the expiration of the warranty on each unit of
Product) or Service Tip on request of PMSN, not due to failures of
the Product, will be borne by OEM for materials only, unless Products are
returned to OEM in which case all costs will be borne by OEM, except
forwarding cost which will be for the account of PMSN.
OEM shall, moreover, be responsible for material cost and expense related
with any Action for Performance which may be the subject of a corrective
action, recall or otherwise be the subject of an order, notice or other
finding by the United States Food and Drug Administration or other
regulatory agency. In case of factory repair, PMSN shall absorb the
related forwarding charges.
Implementation of an Action for Safety or an Action for Performance shall
include, without limitations, providing to PMSN and to all affected
installations, any necessary Software releases and additional or
replacement hardware.
5.3 Field Problem Reporting
PMSN will make all reasonable efforts to report to OEM problems with the
Product (including its hardware, firmware and Software) and may use one of
its own internal forms form for this purpose. In order to shorten response
times from OEM, PMSN may report urgent problems by telephone or telefax.
OEM agrees to confirm receipt of telephone reports in writing if PMSN does
not do so. This problem reporting system is directed at service and
maintenance problems and shall be in addition to any reporting system
which OEM and PMSN are required) law
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to implement. Three categories of Problems are defined, viz .:
I. VERY URGENT PROBLEMS
- Disables the use of the Product or causes unacceptable operation of
an application Program.
II. URGENT PROBLEMS
- Disables the use of the Product under certain conditions.
- Disables the use of certain function(s) of the Product.
III. ROUTINE PROBLEMS
- Problems other than VERY URGENT or URGENT.
As soon as possible, but ultimately within two (2) working days after a
Problem has been reported, OEM shall confirm its receipt and start
reproducing and analyzing the Problem. In its confirmation OEM shall
indicate the manner and time frame in which OEM expects to have a
preliminary and/or definite solution available, but always within the
time frames as defined hereinafter
OEM shall provide solutions to Problems at the latest within the
following time frames:
Preliminary Definite
VERY URGENT one (1) week six (6) weeks
URGENT two (2) weeks sixteen (16) weeks
ROUTINE not applicable sixteen (16) weeks
5.4 Service Information
OEM shall include PMSN in the distribution list for technical information
bulletins distributed by OEM to its own service organization and keep the
Service Manuals up to date, particularly in respect of changes of
Spare Parts and replacements. Field Change Orders will include revision
pages for the Service Manuals.
OEM shall supply new documents at least thirty (30) days before the
first delivery of changed Products to PMSN.
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6. Configuration
6.1 Identification/Labellinq of Spare Parts
PMSN shall inform OEM about PMSN's coding and identification method with
regard to Spare Parts. From all Spare Parts, assemblies and sub-assemblies
of interest to PMSN, the Spare Part and packing will be clearly coded and
marked in accordance with PMSN's specifications.
Shipping documents and invoices will bear the corresponding PMSN 12
digit Spare Parts number for each Part. For this purpose, PMSN shall
designate a block of 12 digit code numbers for Spare Parts supplied by OEM
which OEM shall then cross-reference to parts on its own listings and
update as additional Spare Parts are designated by OEM for later versions
of the Product or additional products of OEM which are purchased by PMSN.
6.2 Registration
If the Product is purchased by PMSN in several different forms or is
modified on a continuing basis by OEM, OEM shall deliver a Configuration
Record with each Product indicating:
- Product name:
- Type/code and serial number of PCBs, including HW, FW and SW level (if
any).
- Identification of assemblies and sub-assemblies contained in the
Product Spare Part numbers and serial number.
The same procedure shall apply for delivery of Field Change Order kits.
Moreover, OEM shall with each FCO kit, provide PMSN with the resulting
Configuration Registration list for such a modified Product, assembly or
subassembly thereof.
7. Spare Parts
OEM undertakes that it will assure that Spare Parts are available Spare
Parts for the Products during a period of 10 (ten) years after the last
delivery of a type of Product by OEM under this Agreement. OEM will also
assure availability of Spare Parts prior to the first dispatch of each new
type of Product.
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OEM may, at its discretion, substitute functionally equivalent Spare Parts,
subject to informing PMSN previously in writing and making available at a
50% discount rate, a mutually agreed number of such equivalent Spare Parts
for PMSN to test, and provided that PMSN approves these Spare Parts in
writing. Stocks of Spare Parts built up by PMSN that become obsolete
because of Field Change Orders, initiated or caused by OEM, shall be
returned at OEM'S expense and OEM shall credit PMSN the actual purchase
value.
7.1 Spare Parts List
OEM shall provide PMSN with a list of Spare Parts in the Product as built,
containing the following information:
- Spare Part number and conversion to PMSN 12 NC
- Description of the Spare Part
- Price of the Spare Part
- Exchange price
- Guaranteed delivery time per Spare Part or group of Spare Parts
- OEM's name and address
- Repair time and price, if applicable
- Indication of any export restrictions (e.g. for Software) which may
apply under United States law.
OEM shall provide PMSN with recommendations for the stocking of Spare Parts
required to support and maintain the Products. OEM shall yearly update
these recommendations during the lifetime of the Product based upon
historical usage and changes of the Spare Parts.
OEM will timely provide information to PMSN so as to allow it to place the
initial purchase order for Spare Parts prior to the first Product delivery,
so as to enable PMSN to perform its service obligation from the moment that
the first customer installation takes place.
Delivery of such parts shall be made concurrently with the first delivery
of Products, or such other date as agreed to by the parties.
OEM will recommend and allow PMSN to initiate an end-of-life order after
the agreed period of Spare Parts availability has expired.
To facilitate Spare Parts distribution and shipping if they are subject to
export restrictions, OEM agrees to include PMSN on OEM's distribution
license.
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7.2.1 Priority 1 Orders
Spare Parts to be delivered under 'Priority 1 order' (breakdown and
out-of-stock situations within PMSN) shall be delivered by OEM, on an
Ex-works Milwaukee basis, within a period of 24 hours after notification,
by courier service to a PMSN ship-to address. OEM shall make appropriate
shipping arrangements, but shall be reimbursed for reasonable freight
costs by PMSN. OEM shall immediately inform PMSN of the relevant shipping
information and expected time of arrival. Extra handling charges for
priority 1 orders may not exceed a price of USD 200.
7.2.2 Priority 2 Orders
Spare Parts to be delivered under 'Priority 2 orders' (replenishment
orders) may be placed by PMSN during the term of this Agreement. These
will have a lead time of one week, unless agreed to otherwise by the
parties.
7.3 Excess Spare Parts
Excess Spare Parts may be returned by PMSN to OEM for full credit
provided such return shipment is approved by OEM. Excess Spare Parts are
defined as those parts that are in excess of a one-year supply based upon
historical usage over the last six months.
7.4 Repair Services
Spare Parts which are identified as repairable, may be returned by PMSN to
OEM for warranty and non-warranty repair, and will be repaired to the
highest configuration level within 6 (six) calendar weeks or be replaced
within 1 (one) week. OEM will provide repair services for a period of at
least 10 (ten) years after delivery of the last Product. No moulds or
other manufacturing equipment should be disposed of by OEM without the
prior permission of PMSN. ~
Repairs shall not affect form, fit, function or certification of the Spare
Part(s).
OEM is responsible for risk of loss and for arranging transportation and
insurance for shipment of Product and Spare Parts to and from OEM for
warranty repairs.
To the extent practicable, for any Product or Spare Parts which it is
cost-effective for PMSN to have repaired.
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non-warranty repairs shall be performed by OEM on a fixed price basis.
Transportation charges and shipping to and from OEM for non-warranty
repairs are the responsibility of PMSN.
If PMSN elects to repair exchangeable Spare Parts in its own workshops,
then the OEM shall transfer to PMSN, all relevant information covering:
- Trouble shooting
- Component specifications (names and addresses of vendors included)
- Adjustment procedures
- Tools and repair aids (specifications and prices)
Hard Disc Assemblies (HDA):
If HDAs are returned for repair and still contain data, they shall not be
read by the OEM. When the HDA is reused, it shall be erased by OEM before
re-shipping.
7.5 Warranty on Spare Parts
The duration of the warranty period for Spare Parts is [**] to commence
on the date of delivery or date of invoice, whichever is earlier.
7.6 Storage Conditions and Handling Procedures
OEM will provide PMSN with storage conditions, such as temperature,
humidity, shelf life and air pressure, in the event that limitations of
this nature apply to certain Spare Parts.
7.7 Packinq
Each Spare Part will be packed in such a way, that it can be stored without
repacking (if necessary, electrostatic discharge-packing is to be used).
Spare Parts will be pre-packed in standard order quantities on request of
PMSN.
7.8 Prices
Prices of Spare Parts for any new Product of OEM shall be agreed upon
between the parties when that new Product is added to the scope of this
Agreement.
Repair Prices of Spare Parts for the Product shall be agreed upon between
the parties, but shall not, in any event, exceed [**] of the original
purchase price.
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[**]
Price changes, if any, will occur once per calendar year. Negotiations
regarding price changes shall be initiated by OEM no later than two months
before the proposed pricing changes are scheduled to take effect.
The price of all Spare Parts necessary to complete one unit of a given type
of Product, shall not exceed the original list price of that Product by
more than [**].
7.9 Modifications to Spare Parts (because of FCO's)
For modifications to Spare Parts, or at the introduction of new options or
Products, OEM shall use its best efforts to supply new Spare Parts and
price lists at least thirty days before the first delivery takes place.
7.10 Second Sourcing
OEM shall provide PMSN with manufacturer's name and part number(s) for
generic Spare Parts, to enable PMSN, if so desired, to purchase directly
these generic Spare Parts (e.g. switches, power supplies, etc.) from their
respective vendors.
It is, however, understood that OEM will remain responsible, in case
certain Spare Parts are no longer available from such vendors. OEM shall
then take all action necessary to find substitutes for such nonavailable
Spare Parts, as soon as possible, and perform at its own expense, any
engineering work connected with such a substitution.
8. Training
OEM shall provide two (2) days instruction in formal training classes for a
maximum of fifty (50) participants (to be divided over several classes)
free of charge. This training will be done concurrently with the initial
shipment of each Product, and shall be in sufficient detail to provide PMSN
personnel with all information and background necessary to allow them to
conduct training for other PMSN technical personnel. Additional training,
if required, shall be available from OEM as set out in the Agreement or its
Attachments at a price not to exceed USD [**] per instructor day of
training.
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PMSN may select the location for the instructor training classes to be
given. Both parties will bear their own expenses for travel and lodging.
OEM will assist PMSN with all documents and other training aids necessary
for successful secondary training classes held by PMSN.
During instructor training classes, a complete set of Service Manuals will
be made available by OEM to the participants. If important improvements are
made to Products or new contract items are added, OEM shall provide
training and documentation for them on the same conditions as stated above.
9. Software Support and Maintenance
With regard to support and maintenance of Software, the following
additional terms and conditions have been agreed:
9.1 General
OEM shall provide support, preventive and corrective Maintenance of
Software. For this purpose OEM undertakes to keep available a well
equipped, organized and staffed software maintenance and support department
with capable, trained and experienced personnel that has adequate know-how
regarding the various versions of the Software.
9.2 Definitions
The following definitions shall apply in addition to the definitions in
this Agreement:
"Compatibility" shall mean that a new Release or a new Level can replace
the former Release(s) or Level(s) of the Software without degrading the
functionality and/or affecting the interfacing of the Product or Software.
"Release(s)" shall mean a specified set of functions. A new Release of the
Software will be made as a result of changed functional specifications and
will also contain the solutions to Problems of previous Levels. A Release
may comprise a number of Versions.
"Version(s)" shall mean a distinction between various Software programs
which fulfil essentially the same class of functions, but which are
different for alternative hardware choices and/or slightly different
Software configurations and/or differences in performance and/or for
commercial reasons.
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"Level(s)" shall mean improved Software having the same functional
specifications as before, but originating from changed (corrected) source
code.
9.3 Maintenance Fee
After the applicable free-of-charge Software warranty period(s),
maintenance and support specified in this Attachment shall be available
from OEM at a reasonable all-inclusive maintenance fee. This fee will be
subject to mutual agreement between the parties hereto. unless otherwise
agreed to, such all-inclusive maintenance fee shall include all actions and
activities (including forwarding costs) associated with maintenance and
support of the Software and copies of reports, solutions and Levels by OEM.
9.4 Support
While maintaining Compatibility OEM shall actively:
- search the Software for errors and offer corrections therefor
- investigate, produce and offer enhancements to the Software which
improves and optimizes the user friendliness of the Software
- provide on request advice with regard to the capabilities of the
Software in order to fully exploit its potential.
9.5 Preventive Maintenance
While maintaining Compatibility OEM shall, if PMSN has purchased
Maintenance, provide Preventive Maintenance by:
- Issuing from time to time, in such a sequence as shall be agreed upon,
generally available new Releases (updates and upgrades) of the
Software. These Releases shall be made available to PMSN at the same
time as OEM issues the same, or parts thereof, for its own use. PMSN
may obtain as many copies of each new Release as it may decide, but
not exceeding the number of Products delivered to PMSN at that time.
- Providing information regarding the contents, installation and user
aspects of such new Releases in sufficient detail to enable a smooth
installation and use by the user.
Each new Release shall consist of at least:
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- All Corrective Maintenance definite solutions previously made
available to PMSN pursuant to section 9.6 hereafter.
- All definite solutions for Problems in the Software previously made
available in similar software packages to other customers of OEM.
- Such other corrections and enhancements of the Software is OEM makes
generally available to others.
9.6 Corrective Maintenance
While maintaining Compatibility and without prejudice to the procedures of
article 5.3. of this Attachment, OEM shall provide Corrective Maintenance
by:
- delivering as soon as possible solutions for VERY URGENT and URGENT
PROBLEMS in the form of preliminary solutions (temporary fixes only,
no corrections to the Software) and definite solutions (corrections to
the Software) if necessary in an unscheduled Level of the Software.
- delivering solutions for ROUTINE PROBLEMS in the form of definite
solutions as part of the next Level of the Software.
If OEM cannot provide a definite solution without violating the
Compatibility of the Software, then OEM shall timely inform PMSN in
writing, together with a comprehensive explanation of the reasons and
consequences. OEM shall refrain from any activity to implement such a
definite solution unless PMSN has accepted the consequences in writing.
Both preliminary and definite solutions will be made available to PMSN as
soon as possible after OEM has produced and tested these solutions.
Definite solutions will always be included in the next available Level of
any Release. The solutions shall be documented and made available to PMSN
by fastest means of Communication and/or transportation.
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10. Duration
Unless explicitly stated to the contrary in the Agreement itself, the
arrangements set forth in this Attachment shall be in effect as of the date
of this Agreement and continue until ten (10) years after delivery of the
last unit of Product by OEM to PMSN under this Agreement.
OEM Philips Medical Systems
Nederland and B.V.
/s/ X.X. xxx Xxxxx
By: [SIG] By: X.X. xxx Xxxxx
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Title: President Title: Director
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Date: 24-9-94 Date: 28/9/94
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ATTACHMENT H (to be provided by OEM)
Spare Parts List
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ATTACHMENT J
PRODUCT APPROVAL PROCEDURE
This Attachment is a procedure for Products' classification with regard to
testing and marketing those Products. This procedure applies only to
Products which are either not medical devices (as defined in section 201
(h) of the United States Food Drug and Cosmetic Act) and not otherwise
subject to regulation by the United States Food and Drug Administration or
similar agencies, or, if a Product is a medical device, all legal
requirements for distributing that Product have been met by OEM. OEM
agrees to provide PMSN with Products on the terms and conditions below.
A. OEM agrees to provide PMSN with a list of Products indicating for
each a Class category as specified below:
Class I: The Product has been installed in the field connecting the
specified input modality with the Philips PACS. The operation of
the Product has been tested and approved by PMSN as set forth in
paragraph C below.
Class II: The Product has not been installed in the field connecting
the specified input modality with the Philips PACS. OEM confirms
that the Product has been installed in the field connecting the
specified input modality with some output modality other than
Philips PACS. The operation of the Product has been tested and
approved by PMSN as specified in paragraph D below.
Class III: the Product has not been installed in the field
connecting the specified input modality with the Philips PACS. OEM
confirms that the Product has been installed in the field connecting
the specified input modality with some output modality other than
Philips PACS. The operation of the Product has not been tested and
approved by PMSN.
Class IV: all others
B. OEM agrees to sell and PMSN agrees to purchase all Class I Products
under the terms of this Agreement without further testing.
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C. When requested by PMSN, OEM agrees to make available to PMSN one Class II
unit for Beta Test at the following conditions:
- OEM will ship the Product to PMSN without invoice;
- OEM will invoice after receiving a written acceptance of the Product
from PMSN, or after 60 days from shipping date if no problems, in
writing, are reported by PMSN;
- when a problem related to the Product is reported in writing by PMSN
to OEM, the 60 days period will restart from the date of PMSN's
written communication to OEM;
- if necessary a preliminary acceptance test will be performed by PMSN
before shipping the equipment to the Beta site;
- PMSN will pay OEM's standard fee for installation and customer
training costs at the Beta site;
- PMSN and OEM have to provide at no additional cost the necessary
technical support needed to solve any problem during the test period.
This support may include visiting the Site;
- after 2 weeks of routine operation without major problems caused by
any part of the system (including the Modality and Philips PACS), the
test will be considered completed. However the final acceptance of the
Product will not take place until PMSN has indicated its approval in
writing;
- if the Product is not approved by the customer and is returned to PMSN
within the 60 days period, for any reason and without further
conditions, same Product will be returned to OEM, the related invoice
will be cancelled and any payment otherwise due OEM will be withheld
by PMSN;
- if problems related to the Product still persist after 5 weeks from
the installation of the equipment, PMSN may decide to remove the
Product from the site and refuse to upgrade the Product to Class 1. In
this case the Product will be returned to OEM, the related invoice
will be cancelled and any payment otherwise due OEM will be withheld
by PMSN.
D. When requested by OEM, PMSN agrees to evaluate one Class III unit for
upgrading to Class II on the following conditions:
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- the unit has been tested by OEM and conforms to the agreed procedure
for Type Approval Testing. OEM shall provide PMSN with the supporting
evidence thereof;
- OEM will make available one complete unit (hereinafter referred to as
"Product Prototype") plus all necessary accessories to PMSN without
charge for engineering evaluation and system testing;
- the test will be performed using a Modality Simulator and the Product
Prototype. In the Modality Simulator a defined (clinically relevant)
set of images will be downloaded. An appropriate software provided by
OEM will allow the simulator to send all images to the DMIA. It shall
be possible for PMSN to determine the set of images needed for a
particular modality;
- it shall be possible for PMSN to perform the test in a place of its
own choice, hereinafter referred to as the "Test Facility", including,
but not limited to, PMSN's and OEM's facilities;
- when required by PMSN OEM will make available at the test facility,
and at no charge, all necessary equipment and software including, but
not limited to, the Modality Simulator with all necessary
accessories, the Modality Simulator software, the appropriate set of
images on an appropriate media, the Product prototype, and the
associated Merge Interface Software;
- OEM will also provide all necessary product documentation
(installation and user manuals). These manuals must be produced by
OEM;
- the set of images has to be collected by OEM at an Hospital site using
an appropriate procedure and storage media (to be defined by OEM);
- a specific software tool (to be developed by OEM) will be used to
protect Hospital and Patient confidentiality;
- a Modality Simulator only will be supplied when the need thereto is
mutually determined by the parties and subject to the expected numbers
to be produced.
E. At the end of a particular test, and after receiving a written
communication from PMSN, OEM shall then proceed to upgrade the
particular Product Class as specified in the related communication.
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