Amicas, Inc. v. GMG Health Systems, LTD.

United States Court of Appeals
For the First Circuit

No. 11-1628

AMICAS, INC.,

Plaintiff, Appellee,

v.

GMG HEALTH SYSTEMS, LTD., d/b/a Gonzaba Medical Group,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Leo T. Sorokin, U.S. Magistrate Judge]

Before
Torruella, Circuit Judge,
Souter,* Associate Justice,
and Boudin, Circuit Judge.

James L. Messenger with whom Kevin G. Kenneally and
LeClairRyan, P.C. were on brief for appellant.
Lawrence S. Delaney with whom Joseph M. Downes III and Demeo
& Associates, P.C. were on brief for appellee.

April 10, 2012

*
The Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
 BOUDIN, Circuit Judge. This appeal concerns a contract

dispute between two companies: Gonzaba Medical Group ("GMG"), a

280-employee provider of medical services, and Amicas, Inc.

("Amicas"), a publicly-traded information technology ("IT") company

specializing in medical software. GMG contracted with Amicas in

2006 to develop and license two computer programs related to GMG's

radiology services: a picture archiving communications system

("PACS") and radiology information system ("RIS").

Broadly speaking, the purpose of the software was to

automate the collection and transfer of information necessary for

billing that GMG had previously been entering manually. The aim

was to avoid revenue loss due to incomplete capturing of billable

charges that had occurred through manual data entry. To this end,

the proposed software had to accept information from a patient

management system previously established by another company--

Sage--and send information to Sage's previously established billing

system.

The parties reached an agreement in October 2006 and

executed a contract, drawn up by Amicas, calling for GMG’s payment

of $1,009,548 over five years in exchange for a software license

for the RIS and PACS programs, specified hardware, and continuing

support services from Amicas. The agreement (whose relevant

provisions are set out in an appendix to this opinion) comprised a

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set of different documents signed on the same date, and contained

an integration clause.

The agreement warranted that for 90 days after the "go-

live date" the software would "substantially conform to

Documentation"--specified product manuals for the relevant software

and hardware--"when used by [GMG] in a manner that is consistent

with the Documentation.” But the warranty excluded any failure

resulting from databases of GMG or third parties and warned that

“[Amicas] does not warrant that the Software described herein will

meet [GMG’s] requirements.”

Amicas developed and installed the programs, which

involved working with Sage to design, test, and tweak the

"interfaces"--the programming necessary to move data from the Sage

patient management system into the Amicas RIS system and out to

Sage's billing system. It was controversy over the operation of

the latter connection, referred to by the parties as the "chargeout

interface," that ultimately led to this litigation.

GMG began using Amicas' software and hardware on March

13, 2007 (the "go-live date"), but the chargeout interface was not

ready due to GMG's indecision on a particular implementation detail

and delays on Sage’s end of the interface, so GMG continued

processing radiology charges manually in the interim. GMG started

using the chargeout interface in late July, and reported several

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problems to Amicas in the first few months--one a minor glitch that

was easily resolved.

More serious were transpositions of the name of the

physician who read the radiology films and the referring physician;

Amicas investigated the name switching issue and reported that the

problem stemmed from how Sage's software was processing and

interpreting Amicas’ batch file, not with what Amicas’ program was

producing. After some internal deliberations and more back and

forth with Amicas over a few weeks, GMG referred the issue to Sage.

The record does not reveal whether Sage resolved the

problem but it is clear that GMG continued to experience some

frustration with the system, and it ultimately stopped using the

chargeout interface altogether in "late 2007," opting instead for

its old method of manual processing. However, GMG does not claim

that it informed Amicas of that decision--or even that any problems

whatsoever with the chargeout interface persisted.

By November 2007, GMG was negotiating with Sage to

develop substitute software, and by February 2008 Sage was

proposing to demonstrate a replacement product. An e-mail from

Sage to GMG in March 2008 urged that "[o]ur experts feel that

almost 100 percent of [your errors] are due to . . . having

disparate systems and would be eliminated by using our RIS system."

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 As the negotiations with Sage progressed, GMG's principal

contact with Amicas, Elsa Vasquez,1 e-mailed Adam Helms (the Amicas

engineer responsible for setting up the chargeout interface) on

February 8, 2008--some five months after Vasquez's last

communication with Amicas about the chargeout interface--to ask

“where we are with this interface.” Helms, who was under the

impression it was successfully installed months earlier, expressed

surprise at the question and asked Vasquez for clarification.

Over the next few months, GMG reported problems it

perceived with the interface, and Amicas worked with Sage to

follow-up on GMG's concerns. Helms ultimately concluded that the

problems were attributable to “GMG’s failure to maintain consistent

sets of data,” and were worsened by user errors and failure to

report the issues earlier. Amicas finished its work on the

reported issues by May 2008, but in June 2008--around the same time

that negotiations with Sage for replacement software neared

completion--GMG put off all efforts to test the chargeout

interface.

On June 30, 2008 (10 days after Sage forwarded GMG a

contract for replacement software), GMG sent Amicas a termination

notice, citing “fail[ure] to conform to the Documentation and

1
Vasquez--the full-time GMG employee with the "responsibility
to ensure that the software and hardware solution[s] for the GMG
practice function[ed] effectively"--held the title of "Imaging
Services Coordinator/Radiology Manager." She had no IT background
or training.

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[failure to] deliver[] a functional product.” Amicas and GMG

personnel met on July 9, 2008, to discuss GMG's letter, but by then

GMG had decided to substitute Sage and had directed Sage not to

cooperate further with Amicas on seeking solutions to whatever

interface problems remained. Amicas then brought the present suit

against GMG in federal district court.

Amicas' complaint alleged breach of contract, together

with other claims not at issue on appeal, and GMG counterclaimed

(e.g., for breach, negligent misrepresentation, and violation of

Chapter 93A, Mass. Gen. Laws ch. 93A, § 11 (2011)). Following

discovery, both parties moved for summary judgment; the district

court found for Amicas on its breach claim, rejected GMG's

counterclaims, and ordered the parties to bring any remaining

issues to the court's attention within 20 days.2

Amicas had sought $778,889 in damages (plus costs and

fees) in the complaint and in its motion for summary judgment, and

GMG proceeded to contest the $778,889 figure. The court then

ordered further briefing on attorneys' fees, costs, and prejudgment

interest, which GMG used in part to renew its attacks on the

damages request. The court agreed with Amicas that the requested

$778,889 damages had already been established as part of the

summary judgment ruling, but treated GMG's arguments as a Rule

2
Both parties consented to proceed before a magistrate judge,
28 U.S.C. § 636(c); Fed. R. Civ. P. 73, who for purposes of this
decision we describe simply as the court.

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60(b) motion for reconsideration and ordered Amicas to respond on

the merits.

After Amicas responded, the court denied Rule 60(b)

relief, adding that "[i]n any event, GMG's arguments [were] without

merit" because GMG's interpretation of the contract was incorrect.

The court reaffirmed its award of $778,889 in damages and added

$324,805 in attorneys’ fees (and uncontested amounts in costs and

prejudgment interest). On GMG's appeal, our review is de novo,

drawing inferences in the light most favorable to the nonmoving

party. Kuperman v. Wrenn, 645 F.3d 69, 73 (1st Cir. 2011).

GMG contests both its liability and the awards of damages

and attorneys' fees, and we start with the issue of liability.

GMG's position, in a nutshell, is that Amicas never established

that it had itself performed its obligations under the contract and

that, assuming in the alternative that Amicas made out even an

arguable showing that it had done so, the question posed factual

questions requiring a full jury trial.

In principle, a party suing for breach of contract under

Massachusetts law--which governs the contract in the case--must

establish (1) the existence of the contract, (2) the plaintiff's

willingness to perform or performance, and (3) breach by the

defendant; if damages are sought causation and the amount of

damages must also be proved. E.g., Singarella v. City of Boston,

173 N.E.2d 290, 291 (Mass. 1961). With respect to the second

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element, Amicas says that the defendant bears the burden of showing

the plaintiff's non-performance as a defense.3

As a practical matter, it is usually easy for a plaintiff

to assert, and offer a competent witness to say, that it performed

its obligations or stood ready to perform them; and, to create an

issue, in practice the defendant has to identify the respect or

respects in which it claims that the plaintiff's performance fell

short. We will assume for present purposes that if a material

issue of fact were posed by the evidence as to the plaintiff's

performance, the burden of proof at trial would be the plaintiff's.

The burden of proof issue does not matter here because at

the summary judgment stage Amicas did tender adequate proof that it

had performed and GMG--although claiming a specific alleged flaw in

Amicas' performance--failed to offer any competing competent

evidence to counter that of Amicas, and so failed to generate a

material issue preventing summary judgment. We start with Amicas'

showing of what (with all the risks of using a much misunderstood

phrase of many shadings) we will call a "prima facie" case--meaning

here only that it was enough to prevail on summary judgment unless

seriously countered with admissible evidence.

3
Although Amicas cites several First Circuit cases that omit
the second element in describing the essentials of a contract
claim, see Michelson v. Digital Fin. Servs., 167 F.3d 715, 720 (1st
Cir. 1999); Coll v. PB Diagnostic Sys., Inc., 50 F.3d 1115, 1122
(1st Cir. 1995), it should be borne in mind that often performance
by the plaintiff is undisputed.

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 Here, Amicas amply satisfied the burden of showing that

it had performed its end of the bargain through the affidavit of

its implementation engineer (Helms), who stated that the

"[c]hargeout interface[] worked as planned," that Amicas resolved

all of the perceived problems reported by GMG, and that those

issues were not errors caused by Amicas' system. There was no

dispute that GMG did not carry out its obligations, for it had

cancelled the contract--although it was free to argue that it had

cause for doing so.

GMG could have countered by creating a factual issue as

to whether Amicas had fulfilled its obligations. It might have

offered a competent affiant to say that Amicas' program had not met

significant technical specifications of the contract for the

software or hardware, or that in some other respect Amicas had not

met specific obligations under the contract. If such a proffer of

admissible evidence had been made, it could have foreclosed summary

judgment and created a material issue of fact to be sorted through

by a factfinder at trial.

Instead, GMG relied primarily on Elsa Vasquez's

deposition testimony and affidavits asserting in general terms that

Amicas "fail[ed] to implement a functional chargeout interface" and

failed to solve problems with the interface identified by GMG. As

the district court pointed out, Vasquez had no IT training or

background, never read the specifications for the software, was

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unfamiliar with basic, key concepts underlying its operation and

could not elaborate on her statements or identify any specific

failure of the chargeout interface.

Conclusory allegations regarding technical issues offered

by a witness demonstrably lacking technical background and

understanding do not create a jury issue.4 GMG points to a May 20,

2007, internal e-mail from Amicas sales representative Kurt Hammond

stating in part: "The Charge Out interface is not functioning,

never has, so from the customer's perspective is not complete."

But the context of the e-mail--correspondence in which Amicas

personnel discussed whether any work related to GMG was

outstanding--makes clear that Hammond was simply relaying the

substance of GMG's position, not agreeing with it.

GMG says that Helms' evidence is insufficient because

"the Documentation"--the specified product manuals for the relevant

software and hardware--was never itself entered into evidence. But

GMG was free in the district court to seek any information about

specifications it did not have; and even now it does not make a

specific and colorable claim that the contents of the documentation

show that Amicas failed to provide conforming software or hardware.

GMG was entitled to fish for flaws in Amicas' promised performance,

but it makes no showing that it found any.

4
See DeNovellis v. Shalala, 124 F.3d 298, 305-06 (1st Cir.
1997); see also Biotec Biologische Naturverpackungen GmbH & Co. KG
v. Biocorp, Inc., 249 F.3d 1341, 1353 (Fed. Cir. 2001).

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 Turning to a legal argument, GMG argues that regardless

of who was responsible for the problems with the chargeout

interface, Amicas breached a separate promise--made during

precontract negotiations--to deliver a product that "seamlessly"

interfaced with Sage. However, the agreement contains an

integration clause declaring that the writing supersedes any prior

agreements, so the parol evidence rule renders any earlier-stage

agreement unenforceable. E.g., Winchester Gables, Inc. v. Host

Marriott Corp., 875 N.E.2d 527, 533 (Mass. App. Ct. 2007).

GMG says that the integration clause is unenforceable

because it was in a pre-printed form that was signed without

negotiation of its terms by GMG, and GMG was not represented by

counsel in the negotiations. GMG--a company with 280 employees,

multiple offices, and annual revenues in excess of $20 million--is

hardly an ill-equipped or outmatched party, and the integration

clause binds it as much as it does Amicas. E.g., USM Corp. v.

Arthur D. Little Sys., Inc., 546 N.E.2d 888, 894 (Mass. App. Ct.

1989).

GMG then says that prior discussion of seamless operation

is relevant to interpretation of ambiguities in the agreement. But

far from being ambiguous, the contract provisions earlier quoted

make it explicit that Amicas merely promised to deliver materials

that conform to specifications, and that “[Amicas] does not warrant

that the Software described herein will meet [GMG’s] requirements."

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Against this explicit language, to insist on seamless performance

would not be to explain ambiguity but to contradict the agreement.

This brings us to GMG's attack on the award of damages.

The lower court treated its own summary judgment decision as having

resolved the issue of damages, relegating GMG to a Rule 60(b)

motion; while the court denied the latter as a Rule 60(b) motion--a

denial ordinarily reviewed only for abuse of discretion--the court

said that GMG's objections to the award also failed on the merits.

Amicas argues that GMG essentially forfeited any damages arguments,

but that somewhat overstates the case.

It is true that the payment terms were in the agreement

before the district court and that Amicas explained in its summary

judgment papers that it was seeking $778,889 plus interest, costs,

expenses and attorneys’ fees (as provided by the agreement in the

event of a breach). Amicas included a table showing the fee

amounts for each year of the contract's five-year term. In

opposition, GMG offered only two opaque statements in its response

to Amicas' statements of material facts and said nothing in its

memorandum.5

5
The statements were:

-[T]he basis for specific GMG payments is not shown or
explained or itemized by Amicas as between license fees,
equipment purchases, extra study charges, or
reimbursements for Amicas meals and travel. If Amicas
contends that all of the $230,659 is payments to be
applied solely to the non-specified five year "schedule,"
that is disputed because it is not shown.

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 Yet the lower court did not mention damages in its

summary judgement decision, an issue often reserved for further

proceedings, and in its Rule 60(b) ruling it addressed the new

arguments on the merits. We choose to treat GMG as having

preserved for ordinary--here de novo--review both its sketchy

damages objections made in opposing summary judgment and the

somewhat more developed version offered in its Rule 60(b) motion.

But GMG's real problem is that even now it fails to attack the

damage award on its potentially vulnerable points.

The agreement as originally drafted provided for a one-

year term with presumptively renewing annual support service terms;

but an addendum, included when the agreement was signed, converted

this to a five-year term with a schedule for annual payments: these

started at just under $200,000 for the first year rising to

somewhat over $200,000 for the last. Amicas sought the sum of

these payments ($1,009,548), less what had been paid ($230,659);

and the net figure ($778,889) is what the district court awarded.

In response to this damage claim, GMG could have argued--

at least in the alternative--that even if it breached the contract,

it owed Amicas whatever had been promised but less performance

costs that Amicas saved due to the early termination. GMG could

-[N]o competent evidence shows that GMG payments were
solely to be applied against the $1,009,548 total.
"Contract price" is not defined not even in the Amicas
boilerplate. The boilerplate does not explain the yearly
numbers."

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also have argued that future payments should be discounted to

present value. It has made neither argument. Instead, GMG has

argued throughout and exclusively that it owes only about $23,000

constituting the unpaid balance of the payments scheduled as due as

of the date of termination, which was about sixteen months into the

five-year period.

The basis for this contention is a section of the

agreement providing that

[u]pon termination [for any reason other than
a material breach by Amicas] . . . [GMG] will
pay AMICAS for all services performed by
AMICAS up to the date of such termination and
all other amounts [GMG] owed to AMICAS as of
the date of such termination including, but
not limited to, the unpaid portion of the
Software Support Fee for the balance of the
Term or Renewal Term.

According to GMG, this language together with the addendum's

schedule of payments shows that the stream of payments comprised a

continuing use fee; and it argues that termination, curtailing use,

also eliminated responsibility for any amount not already due under

the schedule "as of the date of such termination."

But there are serious problems with this reading both on

a technical level and because of the logic of the original

structure and the addendum. On a technical level, payment of

"services performed" could be read to cover the development of the

software and purchase of associated hardware--all of which were

accomplished at the very outset. Indeed, under the pre-addendum

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payment schedule, payment of these items--as distinct from

continuing support costs--had to be made within 60 days after

delivery of the new system.

And, although the addendum spread out all of the costs

over a five-year period, all five years' worth of payments

necessarily included very substantial costs for software

development and purchased hardware incurred by Amicas at the very

outset--effectively sunk costs. No evidence to which we are

pointed identifies just how much of each payment was for costs

incurred at the outset and how much was for continuing support; but

a horseback estimate offered by one lawyer at argument suggested

that the continuing support was the lesser portion of the payments.

The term extension and payment schedule make sense as a

financing device to stretch out the payments instead of requiring

immediate payment within 60 days of Amicas' software development

and hardware costs. But the termination clause, if read as GMG

urges, would allow GMG to cancel the agreement early in the five-

year period, despite delivery of a compliant system by Amicas, and

thereby shift from GMG to Amicas the entire burden of sunk costs

not yet recovered by Amicas. Judged by the test of common sense,6

6
Liberty Mut. Ins. Co. v. Nippon Sanso K.K., 331 F.3d 153, 159
(1st Cir. 2003) (common sense reading of contractual provisions);
Rhode Island Charities Trust v. Engelhard Corp., 267 F.3d 3, 7 (1st
Cir. 2001) (same).

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this hardly looks like a burden that Amicas would have been willing

to assume.

The reading would also render meaningless for practical

purposes the warranty provisions already quoted; these make clear

that, so long as Amicas delivered a system conforming to the

specifications, the risk of dissatisfaction was borne by GMG.

Courts do not favor a reading that undermines explicit provisions

elsewhere in a contract. E.g., J.A. Sullivan Corp. v.

Commonwealth, 494 N.E.2d 374, 378 (Mass. 1986). Nor has GMG at any

point proffered any extrinsic evidence suggesting that the parties

aimed at the reading GMG has urged.

The parties here extended the term and payment schedule

but then failed to adjust with any care the existing termination

clause premised on a different term and payment schedule. In this

situation, the practice is to impute to the parties a solution that

best carries out the logic and purpose of their agreement. LPP

Mortg., Ltd. v. Sugarman, 565 F.3d 28, 34 (1st Cir. 2009). On this

basis, GMG could have sought to limit its liability to expectation

damages--the promised stream of payments, less Amicas' avoided

costs, with the net amount discounted to present value.7

GMG chose not to make such arguments either in the

district court or to us. Plain error reversals are very rare in

7
E.g., Monadnock Display Fireworks, Inc. v. Town of Andover,
445 N.E.2d 1053, 1056 (Mass. 1983); 3 Farnsworth, Farnsworth on
Contracts § 12.9 (3d ed. 2004).

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civil cases, Tuli v. Brigham & Women's Hosp., 656 F.3d 33, 45-46

(1st Cir. 2011), and GMG has not even argued for one here. Nor,

based on any evidence supplied by GMG, could we ourselves calculate

a reduction based on avoidable costs. GMG's all-or-nothing

argument was a gamble, possibly one based on deliberate

calculation, but it has not paid off.

As for GMG's attack on the award of attorneys' fees, as

provided in the agreement, it is undeveloped and in any event based

on the proposition that it owes only about $23,000 based on its

(flawed) reading of the termination clause. GMG's attempt to

revive its dismissed counterclaims for negligent misrepresentation

and violation of chapter 93A rest on Amicas' supposed promise of a

seamless interchange with Sage, and have already been answered.

Affirmed.

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 APPENDIX

Excepts from Software License, Hardware, Services and Support

Agreement:

1.1. Agreement. . . . This Agreement and any
exhibits, schedules and attachments attached
hereto constitute the entire agreement between
the parties and supersedes all prior or
contemporaneous agreements, representations
and proposals, written or oral, including the
terms of any prior, contemporaneous, or
subsequent [purchase orders] (except as set
forth above) relating hereto, except for
Customer's obligations to pay support or other
fees under existing contract(s), if any,
between the parties.

1.2. Definitions. . . . Documentation means
the product manuals accompanying or associated
with the Software and, if applicable, the
Hardware delivered or available to Customer.
However, Documentation (a) may describe (i)
some functionality that is specified for
configurations that Customer does not have and
(ii) modules or products not included, and
therefore are not applicable, (b) may contain
certain sections that, from time to time, may
be out of date in a manner that will not have
a material effect on Customer or the value of
the Software to Customer, and (c) may not be
applicable as to each Update, however the
Documentation will be updated by AMICAS for
major Updates.

3.1. Fees and Payments. Customer will pay to
AMICAS the fees, amounts and expenses due
AMICAS as specified herein. Customer is
obligated to pay the Software Support Fee for
the entire Term. Customer acknowledges that
in the event AMICAS allows the Customer to pay
said fees on a periodic basis such arrangement
is done as an accommodation to Customer only.

3.2. Failure to Pay or Comply. Failure to
. . . . pay the license fees for the Software
in accordance with this Agreement will result

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in termination of Customer's Software license,
termination of this Agreement and will
obligate Customer to return any and all
Software and Documentation to AMICAS.

3.3. Payment Terms. Payment terms are set
forth in Schedule A. All payments . . . must
be paid within thirty (30) days of receipt of
the invoice.

4.1. Term. This Agreement will commence on
the Effective Date. Support will commence the
first day of the month after the Delivery Date
and end on the first day of the calendar month
containing the one year anniversary of the
Delivery Date ("Term").

4.3. Effect of Termination. Upon termination
for any reason, other than an AMICAS Breach
(defined as a material breach by AMICAS as
determined by final arbitration or a court of
competent jurisdiction), Customer will pay
AMICAS for all services performed by AMICAS up
to the date of such termination and all other
amounts Customer owed to AMICAS as of the date
of such termination including, but not limited
to, the unpaid portion of the Software Support
fee for the balance of the Term or Renewal
Term.

9.1. Warranties. Provided Customer complies
with the terms of this Agreement, AMICAS
warrants that, during the ninety-day period
following the Go Live Date, the AMICAS
Software will substantially conform to the
Documentation when used by the Customer in a
manner that is consistent with the
Documentation. AMICAS does not warrant that
the Software described herein will meet
Customer's requirements. . . . This software
warranty will not apply and AMICAS will be
neither obligated nor responsible to repair,
replace, or grant a refund with respect to any
AMICAS software that does not conform to its
Documentation as a result, in whole or in
part, of one or more of the events indicated
in Section 12.4 (Limitations & Exclusions).

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 9.2. Warranty Limitations. OTHER THAN AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER
AMICAS NOR ANY THIRD PARTY SOFTWARE OR
HARDWARE PROVIDER MAKES ANY EXPRESS OR IMPLIED
WARRANTIES TO CUSTOMER, WITH RESPECT TO THE
SOFTWARE, THE DOCUMENTATION, THE HARDWARE, OR
ANY SERVICES PROVIDED HEREUNDER OR OTHERWISE
REGARDING THIS AGREEMENT. WITHOUT LIMITING
THE FOREGOING, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, INFRINGEMENT AND FITNESS FOR
A PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED
AND DISCLAIMED.

12.4. Limitations & Exclusions. AMICAS will
not be responsible for providing Software
Support Service relating to the following:
. . . (c) problems caused by Customer's data,
network, operational or other environmental
factors not within the direct control of
AMICAS; (d) third party databases (except for
any database that is suppled by AMICAS as part
of the AMICAS Software); . . . .

Excerpts from Product List, Fees and Payment Terms: SCHEDULE A:

Payment Terms: Customer shall pay AMICAS the
applicable license, Hardware costs, Services
and Support Fees in accordance with the
following schedule: 1) For the AMICAS Office
Solutions product (which includes certain
AMICAS Software, services, and third party
hardware): (a) 30% is due upon the Effective
Date; (b) 40% is due thirty (30) days after
the Delivery Date; and (c) 30% is due sixty
(60) days after the Delivery Date. . . . 3)
Support Fees[.] Upon each annual anniversary
of the Delivery Date, Customer shall pay the
applicable annual Software and Hardware
Support Fees.

Excerpts from General Addendum:

Modify the following License Fees payment
terms section of Product List, Fees and
Payment Terms: SCHEDULE A to add the
following: . . . Customer shall pay AMICAS the
applicable license, Hardware costs, Services
and Support Fees in accordance with the

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 following schedule: 1) Notwithstanding
anything in the Agreement to the contrary, for
those products and services that are based on
Per Captured Study pricing:

(a) All license fees, Support fees, hardware
costs, training and professional services fees
related to such products and services are part
of the Per Captures Study fee which is based
upon the number of Captured Studies all as set
forth in Schedule A. No additional payments
will be due from Customer for such products
and services.

(b) Section 4.1 of the Agreement is amended so
that the Term of the Agreement shall begin on
the Effective Date and end Five (5) years
after the Captured Study Start Date.

(c) The Per Captured Study fee set forth on
Schedule A shall be paid as follows: Payments
shall be made quarterly in arrears beginning
on the Captured Study Start Date, and the
Excess Study License Fee shall be determined
and paid on a monthly basis in arrears. The
Per Captured Study fee shall increase after
the first year as shown on the Schedule A.

Excerpts from Schedule A to the General Addendum:

Captured Studies: . . . Excess Captured Study
Fee $5.80 per Captured Study.

Year 1: 31,500 $182,700.00
Year 2: 33,075 $191,835.00
Year 3: 34,730 $201,434.00
Year 4: 36,465 $211,497.00
Year 5: 38,290 $222,082.00

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