This excerpt taken from the AMCS 10-K filed Mar 16, 2007.
M. Commitments and Contingencies
The Company leases office and research facilities and other equipment under various agreements that expire in various years through 2008.
The table below shows the future minimum lease payments due under non-cancellable leases as of December 31, 2006:
Certain of the office leases provide for contingent payments based on building operating expenses. Rental expenses for years 2006, 2005 and 2004 under all lease agreements totaled $1.2 million, $1.2 million and $1.3 million, respectively.
In connection with the Companys employee savings plans, the Company has committed, for the 2007 plan year, to contribute to the plans. The matching contribution for 2007 is estimated to be approximately $0.5 million and will be made in cash.
In connection with the Asset Purchase Agreement, relating to the sale of the Medical Division, each party has indemnified the other with respect to specified liabilities and breaches of certain representations and warranties. Until January 2010, the Company cannot, except in certain limited situations, compete with the Medical Division, and the Company cannot induce a Medical Division customer or prospect to terminate its relationship with Cerner. In addition, until January 2010, the Company cannot directly or indirectly attempt to induce any former Medical Division employee to work for us, and the Company is prohibited from hiring certain specified former Medical Division employees.
As permitted under Delaware law, the Company has agreements under which it indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving at the Companys request in such capacity. The term of the indemnification period is for the officers or directors lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that limits its exposure and enables it to recover a portion of any future amounts paid. Given the insurance coverage in effect, the Company believes the estimated fair value of these indemnification agreements is minimal. The Company has no liabilities recorded for these agreements as of December 31, 2006.
The Company generally includes intellectual property indemnification provisions in its software license agreements. Pursuant to these provisions, the Company holds harmless and agrees to defend the indemnified party, generally its business partners and customers, in connection with certain patent, copyright, trademark and trade secret infringement claims by third parties with respect to the Companys products. The term of the indemnification
AMICAS, INC. and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
provisions varies and may be perpetual. In the event an infringement claim against the Company or an indemnified party is made, generally the Company, in its sole discretion, agrees to do one of the following: (i) procure for the indemnified party the right to continue use of the software, (ii) provide a modification to the software so that its use becomes noninfringing; (iii) replace the software with software which is substantially similar in functionality and performance; or (iv) refund all or the residual value of the software license fees paid by the indemnified party for the infringing software. The Company believes the estimated fair value of these intellectual property indemnification agreements is minimal. The Company has no liabilities recorded for these agreements as of December 31, 2006.
From time to time, in the normal course of business, the Company is involved with disputes and there are various claims made against the Company. There are no material proceedings to which the Company is a party, and management is unaware of any material contemplated actions against the Company.