Intellectual Property License Agreement
between
Synthonics Technologies, Inc.
and
Acuscape, Inc.
Dated
02 June 2000
This Agreement is effective as of 02 June 2000 ("Effective Date") between
Acuscape, Inc., a Delaware Corporation, with its principal place of business at
1200 East Alosta Avenue, Suite 206, Glendora, California, USA, 91740,
(626)-963-3699 ("LICENSEE") and Synthonics Technologies, Inc. a Delaware
corporation, with its principal place of business at 31324 Via Colinas,
Suite106, Westlake Village, California, USA 91362, (818)-707-6000 ("COMPANY").
RECITALS
Whereas COMPANY, as licensor,
a. is the owner of intellectual property rights associated with certain
patented technologies dealing, in general, with the construction,
modification, transmission and display of digital 3D computer graphic
models, and
b. has the right to exclude others from making, using, offering for sale
or selling or importing the inventions contained in COMPANY's patents,
and no one else may do any of these things in the United States and
certain other geographical locations without COMPANY's permission, and
c. may grant licenses to others, such license agreements being in essence
nothing more than a promise by COMPANY not to sue the licensees for
infringing on intellectual properties owned by COMPANY, and
d. desires to license certain rights to use COMPANY's patented
intellectual properties to multiple third parties at reasonable
royalty rates and in a fashion that reduces the possibility of piracy
and unauthorized use of COMPANY's intellectual properties, and
Whereas LICENSEE
e. desires to obtain a license to use certain COMPANY intellectual
properties, related to
a. "phototexturing via photogrammetric techniques" and
b. "morphing of generic surface structures to match
photogrammetrically derived data sets",
on an exclusive basis, to develop and market new LICENSEE-developed
products and services, specifically for
i. Medical and
ii. Medical Forensics
iii. Veterinary Medical, and
iv. Veterinary Medical Forensics markets, and
Page 1 of 23
f. desires to utilize COMPANY intellectual property in a manner that
protects COMPANY from unauthorized, non-royalty-paying distribution of
LICENSEE-developed products and services that contain, rely on or are
derived from COMPANY's intellectual properties, and
Whereas COMPANY desires to provide assistance to LICENSEE for the development of
a. LICENSEE-developed source code,
b. LICENSEE-developed object code, and
c. Other LICENSEE-developed intellectual properties
in a manner that protects LICENSEE from unauthorized distribution of
LICENSEE intellectual properties and trade secrets to other entities, and
Whereas both COMPANY and LICENSEE acknowledge
a. each license issued by COMPANY is a contract and may include whatever
provisions the parties to the contract agree upon, including the
payment of royalties, and other considerations, and
b. that any "know-how", "training", "source code", "object code" and
other potentially valuable assets that may be associated with,
expressions of, or derived from COMPANY's intellectual property are
not a material part of this Agreement, except as specifically
identified herein, and
c. that COMPANY is, at the time of the Effective Date of this Agreement,
a shareholder in Acuscape, Inc., with expectations of Acuscape's
success in business that will, in turn, have benefit to COMPANY and
COMPANY's shareholders, and
Whereas both COMPANY and LICENSEE acknowledge
d. the existence of a previous license agreement between the parties,
identified as "License Agreement Between Synthonics Incorporated and
Medscape, LLC", dated "September 2, 1996", and
e. said previous license agreement was drafted prior to the issuance of
any patents to COMPANY, and prior to various company name changes and
company structural changes and
f. said previous license was restricted to specific object code that gave
utility and form to then un-patented COMPANY intellectual properties,
and
g. that both parties intend this Agreement to supersede and replace said
previous license agreement in full, and
h. that both parties agree that any obligations including but not limited
to royalties and fees that arose pursuant to the previous license
agreement are COMPLETELY EXCUSED,
NOW THEREFORE, COMPANY and LICENSEE enter into this Agreement ("Agreement") on
the following terms:
Page 2 of 23
AGREEMENT
i. DEFINITIONS. The following definitions shall apply to this Agreement:
a. "COMPANY Intellectual Property" means: (i) any and all patents
listed in EXHIBIT A, an attachment to and integral part of this
Agreement; (ii) all intellectual property that is directed to any
and all improvements made to the technology covered by the
patents listed in EXHIBIT A, as well as all reissues,
reexaminations and extensions thereof, and all priority rights
under all available International Agreements, Treaties and
Conventions for the protection of intellectual property in its
various forms in every participating country, and all
applications for patents (including related rights such as
utility-model registrations, inventor's certificates, and the
like) heretofore or hereafter filed for said improvements in any
foreign countries, and all patents (including all continuations,
divisions, extensions, renewals, substitutes, and reissues
thereof) granted for said improvements in any foreign countries;
and (iii) any and all copyrights related to the software listed
in EXHIBIT B, an attachment to and integral part of this
Agreement.
b. "Derivative Work(s)" means a work based upon one or more
preexisting works, such as any revision, modification,
translation, abridgment, condensation, expansion, collection,
compilation, elaborations, or other form in which an existing
work may be recast, transformed, ported or adapted and which is a
"derivative work" under U.S. copyright law.
c. "Effective Date" means the calendar date governing the initiation
of this Agreement as first entered above.
d. "End-user Customer" means any single end-user electronic device
belonging to or used by a direct or indirect customer of LICENSEE
who obtains LICENSEE Products for use on said single electronic
device.
e. "Independent third party(s)" means, for purposes of this
Agreement, an entity free from the influence, guidance, or
control of the LICENSEE and one for which there is no beneficial
ownership ties to LICENSEE or any officer(s) or director(s) of
LICENSEE to an extent that exceeds 10%, in aggregate, of said
independent third party's equity, financial or business
interests.
f. "Intellectual Property Rights" means all intellectual property
rights arising under statutory or common law, and whether or not
perfected, including, without limitation, to all information
contained in (i) patents listed in EXHIBIT A; (ii) all worldwide
rights to trade secrets and confidential information; (iii) as
all intellectual property that is directed to any and all
improvements made to the technology covered by the patents listed
in EXHIBIT A all reissues, reexaminations and extensions thereof,
and all priority rights under all available International
Agreements, Treaties and Conventions for the protection of
intellectual property in its various forms in every participating
country, and all applications for patents (including related
rights such as utility-model registrations, inventor's
certificates, and the like) heretofore or hereafter filed for
said improvements in any foreign countries, and all patents
(including all continuations, divisions, extensions, renewals,
substitutes, and reissues thereof) granted for said improvements
in any foreign countries; and any all copyrights related to the
software listed in EXHIBIT D.
Page 3 of 23
g. "Market(s)" means the field-of-use, territorial, and other
specifications that define the extent, boundaries and limitations
associated with the use of COMPANY intellectual property by
LICENSEE.
h. "Field of Use" means any and all of the Medical, Medical Forensic
and Veterinary Medical markets.
i. "Medical" is a field-of-use specification that defines certain
aspects of the LICENSEE's Market under this agreement.
Specifically, "medical" means all things directly associated with
human health care, related diagnostics, treatment plans and
remedies to heal and otherwise treat the human body.
j. "Medical Forensics" is a field-of-use specification that defines
certain aspects of the LICENSEE's Market under this agreement.
Specifically, "medical forensics" means all things directly
associated with the application of scientific knowledge of human
anatomy or Medical (as defined herein) elements of a legal nature
for purposes that are suitable to courts of judicature or legal
debate in public forums.
k. "Veterinary Medical" is a field-of-use specification that defines
certain aspects of the LICENSEE's Market under this agreement.
Specifically, " veterinary medical" means all things directly
associated with animal health care, related diagnostics,
treatment plans and remedies to heal and otherwise treat animals,
especially domestic animals, that would normally receive
treatment from practicing Veterinarians.
l. "Veterinary Medical Forensics" is a field-of-use specification
that defines certain aspects of the LICENSEE's Market under this
agreement. Specifically, "veterinary medical forensics" means all
things directly associated with the application of scientific
knowledge of animal anatomy or Veterinary Medical (as defined
herein) elements of a legal nature for purposes that are suitable
to courts of judicature or legal debate in public forums.
m. "Nested isolation" means any concept whereby the LICENSEE
isolates, or attempts to isolate, COMPANY Intellectual Property
into one or more Products, while other products, that do not
contain, or are not Derivative Works of, COMPANY Intellectual
Property, derive benefit or function from the Product. Thus the
COMPANY's Intellectual Property is essentially isolated, while
other products access the output or utility from Product via a
nested programming or nested data access structure.
n. "Perpetual" means continuous in time from the Effective Date
until a time that is coincident with the expiration date of the
last patent expiration date for all patents listed in EXHIBIT A.
Page 4 of 23
o. "Product(s)" means any of LICENSEE's existing products or
services and LICENSEE's future products or services, which may
incorporate, implement, integrate, use, derive benefit from, or
embody, in whole or in part, COMPANY Intellectual Property, or
Derivative Works based upon, derived from, or using COMPANY
Intellectual Property.
p. "Timely", unless specifically defined otherwise, means with
thirty (30) days of an event or action, such as the distribution
of a new product or notice provided by one party to the other
party.
q. "Improvements" mean each and every modification of existing
Technology or new Technology and/or Product developed by COMPANY
or LICENSEE within the Field of Use that provides an improved
Product or an enhanced or higher degree of efficiency or
decreased cost in producing a Product.
r. "US Patent" means the grant of an intellectual property right to
the inventor, issued by the United States Patent and Trademark
Office.
s. "Technology" all intellectual property rights relating to the
field of use.
t. "Patent Rights" all of the COMPANY's patents covered by this
agreement.
j. GRANT OF LICENSE TO INTELLECTUAL PROPERTY RIGHT. COMPANY hereby grants to
LICENSEE, and LICENSEE hereby accepts from COMPANY a
a. Assignable, as provided for herein,
b. Perpetual, as defined herein,
c. Worldwide, where such rights can be granted by COMPANY,
d. Irrevocable, exclusive (subject to minimum royalty payment, breach and
other terms described herein),
license to use COMPANY patented technologies as embodied and expressed in
those patents listed in EXHIBIT A, an attachment to and integral part of
this Agreement, and a
e. Assignable, as provided for herein
f. Perpetual, as defined herein,
g. Worldwide, where such rights can be granted by COMPANY,
h. Irrevocable, exclusive (subject to minimum royalty payment, breach and
other terms described herein),
license to use COMPANY-supplied object code associated with software
programs listed in EXHIBIT D, an attachment to and integral part of this
Agreement, for the purposes of developing new, LICENSEE-developed Products
and for enhancing existing LICENSEE-developed Products, and
i. Assignable, as provided for herein,
j. Perpetual, as defined herein,
k. Worldwide, where such rights can be granted by COMPANY,
l. Irrevocable, exclusive (subject to minimum royalty payment, breach and
other terms described herein),
license to use COMPANY-supplied source code, in combination with all of the
above, for the purpose of addressing only and specifically the following
field-of-use applications and markets
Page 5 of 23
i. Medical, and
ii. Medical Forensics,
iii. Veterinary Medical, and
iv. Veterinary Medical Forensics
subject to all terms and conditions contained herein.
k. TERM, Termination, and Remedies.
a. Term. This Agreement takes effect as of the Effective Date. This
Agreement is Perpetual and irrevocable unless terminated at an earlier
date by mechanisms described in
i. Termination for lack of royalty payment, Subsection 3.2,
ii. Termination by COMPANY, Subsection 3.3,
iii. Termination by LICENSEE, Subsection 3.4.
b. Termination for lack of royalty payment. While this Agreement is in
effect, LICENSEE will be obligated to make royalty payments to COMPANY
as described herein. LICENSEE agrees that if, at any time during the
term of this Agreement, LICENSEE fails to comply with royalty payment
provisions, then COMPANY shall have the right to terminate this
Agreement.
c. Termination by COMPANY. LICENSEE agrees that if, at any time during
the term of this Agreement, LICENSEE breaches a material provision of
this Agreement and LICENSEE fails to cure such breach within a period
of thirty (30) days after the date that COMPANY provides LICENSEE with
written notice thereof, then COMPANY shall have the right to terminate
this Agreement, terminate the license rights granted in Section 2,
GRANT OF LICENSE , and LICENSEE shall be obligated to cease the sale,
sublicensing and/or distribution of all LICENSEE Products or
LICENSEE-derived Products subject to this Agreement.
d. Termination by LICENSEE. LICENSEE may terminate this Agreement at any
time, except when in a condition of breach by LICENSEE, by:
i. Ceasing the sale, sublicensing and/or distribution of all
LICENSEE Products subject to this Agreement, providing timely
written notice to COMPANY, and allowing COMPANY to conduct a
closing audit of LICENSEE's books and records, as deemed
appropriate by COMPANY.
ii. Demonstrating to the satisfaction of COMPANY that no LICENSEE
Products contain, are derived from, or rely on COMPANY
Intellectual Property as expressed herein, in accordance with
"Burden of Proof" requirements of Subsection 8.11, Burden on
LICENSEE, of this Agreement.
iii. Purchasing a fully-paid, perpetual, irrevocable license to use
COMPANY's Intellectual Property Rights, as described herein, for
the larger of
Page 6 of 23
e. $10,000,000, or
f. five times the largest, audited, annual royalty payment made
by LICENSEE to COMPANY during the five years prior to the
election to prepay royalties made by LICENSEE.
g. Remedy for Royalty Payment on Default by LICENSEE. LICENSEE agrees
that if, at any time during the Term of this Agreement, LICENSEE uses
any COMPANY intellectual properties in products, the revenues from
which are excluded from royalty payments to COMPANY, and the dollar
amount of royalty payments not properly reported to COMPANY exceeds
10% of the reported royalty payments made by LICENSEE, then LICENSEE
shall be immediately obligated to pay COMPANY the amount of four (4)
times the error in royalties normally due, in damages for each Product
in which the COMPANY's Intellectual Property has been under-reported.
This penalty payment is to be made in addition to all back royalty
payments that should have been paid on offending Products.
h. Breach by Either Party. Except as expressly stated in
l. Subsection 3.5, Remedy for Royalty Payment on Default by
LICENSEE, and in
m. Subsection 3.3, Termination by COMPANY,
the parties agree that in the event that either party breach any
material term of this Agreement, the non-breaching party shall
deliver notice thereof to the breaching party and the breaching
party shall have thirty (30) days from receiving such notice to
cure such breach. If the breach continues after such 30-day
period, this License Agreement shall terminate, thus halting the
sale, sublicensing and/or distribution of all LICENSEE Products or
LICENSEE-derived Products subject to this Agreement.
n. Confidentiality. To assist in their performance under this Agreement,
the parties may exchange certain information that the disclosing party
deems confidential. All confidential information disclosed under this
Agreement will be disclosed in ATTACHMENT 1 to EXHIBIT B and treated
in accordance with the CONFIDENTIAL INFORMATION EXCHANGE AGREEMENT
(CIEA) attached as EXHIBIT B of this Agreement. The CIEA shall remain
in force during the term of this Agreement and for a period of five
(5) years following termination of this Agreement.
o. License Survival. The license granted in Section 2, GRANT OF LICENSE
to Intellectual Property Rights, , shall survive any transfer of
ownership of the COMPANY and shall be subject to provisions in
Subsection 5.1, COMPANY Bankruptcy, and Subsection 5.2, LICENSEE
Bankruptcy, herein, as appropriate, through any bankruptcy proceeding
involving COMPANY or LICENSEE, subject to legal obligations imposed by
an appropriate bankruptcy Trustee.
a. COMPANY Bankruptcy. COMPANY and LICENSEE agree that in the event
a proceeding is commenced by or against COMPANY under the United
States Bankruptcy Code (the "Code"), Section 365(n) of the Code
will be applicable to this Agreement, and LICENSEE may, pursuant
to 11 U.S.C. Sections 365(n)(1) and (2), retain any and all of
LICENSEE's rights hereunder and thereunder, to the maximum extent
permitted by law, subject to the payments specified herein and
the conditions specified therein.
Page 7 of 23
b. LICENSEE Bankruptcy. COMPANY and LICENSEE agree that in the event
a proceeding is commenced by or against LICENSEE under the United
States Bankruptcy Code (the "Code"), Section 365(n) of the Code
will be applicable to this Agreement, and LICENSEE may, pursuant
to 11 U.S.C. Sections 365(n)(1) and (2), retain any and all of
LICENSEE's rights hereunder and thereunder, to the maximum extent
permitted by law, subject to the continuation of payments
specified herein and the conditions specified therein. However,
if for any reason, the continuation of royalty payments due
COMPANY are either (a) not made (b) delayed or (c) reduced,
without the express written consent of COMPANY, the License
Rights granted herein are terminated, and LICENSEE will
immediately cease to develop or distribute products affected by
the grant of license as conveyed herein.
p. Use of Patent Markings.
a. LICENSEE is required to prominently display the statement "under
license from Synthonics Technologies, Inc." and reference all
applicable COMPANY patents with the word "Patent" and the list of
Patent Numbers of any and all applicable patents covered by this
Agreement, in connection with the distribution of Products
developed by LICENSEE and covered by COMPANY's Patent Rights, in
such a manner that it protects COMPANY's claim of ownership of
intellectual property rights. Failure to mark, as described, is a
material breach of this Agreement.
b. LICENSEE may, at its option, use or apply its own name and
trademarks in connection with the Products covered by this
Agreement.
q. Title and Ownership.
a. LICENSEE Title and Ownership. Title to all LICENSEE Products
(including content) and hardware, all LICENSEE patents and
copyrights, and all copies thereof, and all specifications,
designs, programs, utilities and trademarks, if any, provided by
LICENSEE under this Agreement shall remain with LICENSEE.
b. COMPANY Title and Ownership. Title to all patents and copyrights,
and all copies thereof, and all specifications, designs,
programs, utilities and trademarks provided by COMPANY under this
Agreement shall remain with COMPANY.
r. IMPROVEMENTS
a. COMPANY agrees that all Improvements in Technology developed by
COMPANY during the term of this Agreement relating to the Field
of Use, shall be made available to LICENSEE subject to the terms
of this Agreement. COMPANY shall promptly notify LICENSEE of all
such Improvements as they become available in communicable form.
Page 8 of 23
b. COMPANY agrees that all Improvements developed by LICENSEE during
the term of this Agreement shall be owned by the LICENSEE.
LICENSEE shall promptly notify COMPANY of all such Improvements
as they become available in communicable form.
s. Payment and Auditing Requirements.
a. Applicable Product Count. A license royalty payment shall be due
COMPANY for the revenues associated with each Product delivered
to each End-user Customer of LICENSEE.
b. Royalties. LICENSEE shall make royalty payments to COMPANY in the
amount of 3% of all revenues received by LICENSEE from delivery
to End-user Customer of LICENSEE Products or services that
incorporate, rely on or are derived from COMPANY intellectual
properties, regardless of the number of levels or branches in the
distribution channel to End-user Customer employed by LICENSEE.
Wholesale revenue terms are not permitted under this Agreement
unless such wholesale royalty schedules are approved by COMPANY
in writing to avoid Nested isolation breach problems. Legitimate
wholesale pricing schedules to Independent third party(s) will
not be unreasonably rejected by COMPANY. Payments are payable
quarterly, beginning with the quarter in which the first shipment
for revenue occurs, within 30 days following the end of each
calendar quarter.
c. Minimum Royalty Payments Required. LICENSEE shall be obligated to
make minimum annual royalty payments to COMPANY as listed in
EXHIBIT C, Schedule of Minimum Royalty Payments, an attachment to
and an integral part of this Agreement. If LICENSEE fails to meet
the requirements of the minimum royalty payment schedule, as
listed in EXHIBIT C, then COMPANY has the right to cancel the
exclusive nature of the rights granted herein by giving LICENSEE
thirty (30) days written notice, and COMPANY is thereafter free
to enter into any number of other licensing agreements for the
same or similar purposes as granted to LICENSEE hereunder. If
LICENSEE loses the exclusive nature of rights granted herein,
COMPANY and LICENSEE shall be bound by all other provisions of
this Agreement while operating on a non-exclusive license basis.
d. Nested isolation of Products is not allowed. Any attempt by
LICENSEE to avoid or reduce royalty payments via a mechanism of
Nested isolation or any similar scheme that has the same or
similar effect on royalty payments, may be considered, by
COMPANY, a material breach of this Agreement. LICENSEE has an
obligation to disclose all possible Nested isolation
circumstances and enter into a supplemental agreement that either
alters this Agreement or waives the obligation to make royalty
payments as appropriately agreed to in writing by both parties.
Both parties, on a case-by-case basis, shall address all such
possible cases of Nested isolation . The burden of prove (see
Burden on LICENSEE) for disproving cases of suspected Nested
isolation is a burden hereby accepted by LICENSEE.
Page 9 of 23
e. LICENSEE Reporting of Revenues to COMPANY. LICENSEE shall provide
a statement showing the number of End-user Customers of all
Products subject to royalty payments during the calendar quarter
for which a fee is owed, and a calculation of the fees due.
Reporting to COMPANY is mandatory after the first applicable
revenues are generated by LICENSEE. After initiation, reporting
is to be continued for the duration of the Agreement, even for
periods in which there were no applicable revenues or royalty
fees due to COMPANY.
f. Independent Audit Requirement. COMPANY shall have the right to
have independent auditors audit the accounting sales books, and
records of LICENSEE relevant to this Agreement on a quarterly
basis to ensure compliance with the terms of this Agreement. A
representative of a COMPANY-specified, SEC-qualified, independent
certified public accounting firm whose fee is paid by COMPANY
shall conduct audits. LICENSEE shall be entitled to 30 days prior
written notice to schedule an audit on a mutually convenient
date. LICENSEE may, at LICENSEE's expense, engage a
representative of an independent certified public accounting firm
to be present at the time of the audit. If the audit reveals a
condition of under-reporting of royalties to COMPANY that exceeds
5% of the total reported and paid by LICENSEE, the LICENSEE shall
pay all audit fees and any legal fees incurred by COMPANY in
establishing proof of the under-reporting discrepancy.
g. Confidentiality of Audit Information. COMPANY, LICENSEE, all
participating independent accounting firms and representative of
said accounting firms shall keep all audited information
confidential, subject only to disclosure requirements imposed by
rules and regulations of the SEC and other legal authorities.
COMPANY will ensure that all such participating independent
accounting firms and their representatives hired by the COMPANY
agree to keep the audited information confidential. LICENSEE will
ensure that all such participating independent accounting firms
and their representatives hired by the LICENSEE agree to keep the
audited information confidential.
h. Prepaid Royalty Fees. LICENSEE will prepay royalties in the
amount of Fifty Thousand Dollars ($50,000) in United States
currency immediately upon the successful execution of this
Agreement. LICENSEE will prepay additional royalties of Fifty
Thousand Dollars ($50,000) in United States currency on December
31, 2000, unless LICENSEE's on hand balance on December 30, 2000,
is less than One Hundred and Fifty Thousand Dollars ($150,000) in
United States Currency. In such case, the additional prepayment
of royalties will be waived. These prepaid royalties will be
applied as a credit against royalty payments due to COMPANY from
LICENSEE. LICENSEE will make no additional royalty payments to
COMPANY until this credit has been eliminated. These initial
prepayments of royalty fees are non-refundable, even if LICENSEE
never develops Products subject to royalty fees under this
Agreement.
i. Continuous Payments Required. Royalty payments made to COMPANY by
LICENSEE, per the terms and conditions contained herein, shall be
continuous and without break for the term of the Agreement.
Page 10 of 23
j. Termination or Diminishment of Royalty Payments by LICENSEE.
LICENSEE shall be obligated to report and make appropriate
royalty payments on all LICENSEE revenues from all Products,
until this Agreement expires or is terminated per the mechanisms
specified in Section 3, TERM, Termination, and Remedies, herein.
k. Burden on LICENSEE. It is assumed that all Products developed by
LICENSEE after the Effective Date of this Agreement are subject
to royalty payments to the COMPANY under the terms contained
herein. The burden of providing accurate information to COMPANY,
so COMPANY may maintain an accurate list of applicable Products
and exceptions, is on the LICENSEE. Failure of LICENSEE to
provide accurate and timely information to COMPANY may be
considered by COMPANY to be a material breach of this Agreement.
t. Product DISTRIBUTION AND MARKETING.
a. LICENSEE Product Distribution. In order to diminish the
likelihood of piracy of COMPANY's Intellectual Property Rights,
LICENSEE shall use reasonable, currently recognized anti-piracy
techniques to distribute all Products. LICENSEE shall have the
right to distribute Products through whatever sales distribution
channels that LICENSEE shall deem appropriate, including but not
limited to telesales, Internet sales and independent sales
organizations and distributors, so long as all channels utilized
by LICENSEE or LICENSEE affiliates are subject to independent
auditor tracking for purposes of calculating appropriate royalty
payments.
b. Nested isolation of COMPANY Intellectual Property is specifically
forbidden and any such act constitutes a material breach of this
Agreement.
c. Marketing. LICENSEE makes no representations as to the level of
marketing and sales effort it will provide or the number or
volume of sales of LICENSEE Products that will be made under this
Agreement.
u. Independent Development. Except as provided herein, nothing in this
Agreement shall prohibit either party from establishing a business
relationship with any other third party. LICENSEE is free to
incorporate competitive technologies from other third party sources.
v. INTELLECTUAL PROPERTY PROTECTION
a. COMPANY agrees to diligently seek to provide and maintain patent
protection for patents covered by this Agreement in the United
States at COMPANY's expense, and COMPANY shall own any patents
which issue. COMPANY may at his own option apply for patent
protection elsewhere in the world. In the event LICENSEE requests
COMPANY to obtain patent protection in any other country in the
world and COMPANY declines to do so, LICENSEE shall then have the
right to advance the cost of and to apply for patent protection
in such country. LICENSEE may deduct the cost of seeking and
obtaining such patent protection, including attorneys' and
agents' fees, from future royalties payable for sales made in
that country. COMPANY shall own any such applications and patents
obtained in that country.
Page 11 of 23
b. Each party will be entitled to file patent applications on its
own Improvements at its own expense. In the event a party intends
not to file a patent application on an Improvement that in the
opinion of the other party's patent counsel has a reasonable
probability of being patentable, it will notify the other party
of this intent. Such other party will then have a right to file a
patent application on any such Improvement at its own expense and
receive an assignment of all right, title and interest in such
patent application and any patents issuing thereon based on the
improvement. The party making the Improvement will cooperate in
filing and prosecuting any such patent application.
c. COMPANY agrees to keep LICENSEE advised of the filing,
prosecution status, issuance and maintenance of COMPANY Patent
Rights. Each of the parties will keep the other party informed of
the status and general progress of patent applications and
patents issuing thereon with respect to any Improvements
d. In the event COMPANY elects not to provide or maintain patent
protection for any patent covered by this Agreement, COMPANY
shall give notice of such election to LICENSEE and LICENSEE may
thereafter seek to obtain and maintain such patent protection at
its own expense. COMPANY shall assign any such patent rights to
LICENSEE.
w. INFRINGEMENT OF COMPANY RIGHTS
a. The parties agree to promptly notify each other of any possible
infringement by a third party of COMPANY Patent Rights of which
they become aware. The parties further agree that LICENSEE will
have the right, but not the obligation, to take action against
any third party that may be infringing said COMPANY Patent Rights
at its own expense and can settle in any way which does not
adversely affect COMPANY's right to royalties under COMPANY
Patent Rights. COMPANY agrees to be named a party in any Civil
Action filed to enforce COMPANY Patent Rights
b. If LICENSEE fails to take action against said third party within
six months of notification of the infringement, COMPANY shall
have the right to enforce COMPANY Patent Rights against said
third party, at its own expense ; provided however, no royalty
shall be owed by LICENSEE under Section 9 of this Agreement from
the time of LICENSEE's notice to COMPANY of LICENSEE's decision
not to enforce COMPANY Patent Rights against said infringer until
such time as an action is initiated against the infringer by
COMPANY.
c. The enforcing party hereunder shall retain any awards received as
a result of any action against said infringer and any proposed
settlement of any infringement must be approved by LICENSEE.
However, LICENSEE shall be reimbursed from such reward for lost
revenues due to the infringment.
Page 12 of 23
d. If any claim of any patent in COMPANY Patent Rights is held
invalid by judgment of a court of competent jurisdiction,
LICENSEE's obligation under this Agreement to make royalty
payments to COMPANY pursuant to that claim shall thereupon be
suspended until said judgment has been reversed or vacated as to
that claim, and upon such reversal or vacation, the obligation of
LICENSEE and its sublicensees to pay royalties pursuant to any
such claim or claims shall be reinstated effective as of the date
of suspension. It is understood, however, that nothing in this
subsection shall relieve LICENSEE or its sublicensees of the
obligation to keep books of account and make quarterly reports as
provided in Paragraphs 8.5 and 8.6 hereof.
x. REPRESENTATIONS AND WARRANTIES.
a. Rights and Title. COMPANY represents and warrants that it has
title to Intellectual Property disclosed in applicable U.S. and
foreign Patents listed in Exhibit A, and the right to enter into
and grant the licenses described in this Agreement. COMPANY
represents that it is not precluded by any existing agreement
from entering into or performing under this Agreement.
y. GENERAL PROVISIONS
a. Entire Agreement; Exhibits. This document, including its Exhibits
and attachments, contain the entire Agreement between the parties
relating to the subject matter contained in this Agreement. All
prior or contemporaneous agreements, representations or
warranties, written or oral, between the parties, specifically
the "License Agreement Between Synthonics Incorporated and
Medscape, LLC", dated "September 2, 1996", are superseded by this
Agreement. This Agreement may not be modified except by written
document signed by an authorized representative of each party.
The following documents are attached as Exhibits to and made a
part of this Agreement:
EXHIBIT A List of Applicable Patents
EXHIBIT B Confidential Information Exchange Agreement
Exhibit B, ATTACHMENT 1 Confidential Information Transmittal Form
EXHIBIT C Schedule of Minimum Royalty Payments Required
EXHIBIT D List of Licensed Software
a. Notice. All notices required or authorized under this Agreement
shall be given in writing and shall refer to this Agreement by
the Effective Date. All notices shall be effective upon delivery
if delivered in person or upon signed receipt if delivered via a
delivery service (such as Federal Express or registered mail via
the US Postal Service) to the addresses as follow or at such
other address that either party provides by advance written
notice to the other party.
Page 13 of 23
If to COMPANY: If to LICENSEE:
Attn: President Attn: President
Synthonics Technologies, Inc. Acuscape, Inc.
31324 Via Colinas #106 1200 East Alosta Avenue
Westlake Village, CA 91362 Suite 206
Glendora, California 91740
Phone: (818)-707-6000 Phone: (626)-963-3699
Fax: (818)-707-6016 Fax: (626)-963-6199
a. Informal Dispute Resolution. If any dispute arises from or
relates to this Agreement, authorized representatives of Company
and LICENSEE shall meet no later than ten (10) working days after
written receipt of notice by either party of request for dispute
resolution and shall enter into good faith negotiations aimed at
resolving the dispute. If the representatives are unable to
resolve the dispute in a mutually satisfactory manner within the
next five working days, the dispute shall be escalated to top
management level and each party shall designate a top management
executive to meet in an attempt to resolve the dispute for a
period of 30 days prior to either party's instituting legal
proceedings.
b. Publicity and Disclosure. The specific provisions of this
Agreement are confidential and may not be disclosed to any third
party without the prior written consent of the other party to
this Agreement. However, either party may issue any news release
or announcement concerning this Agreement without the prior
written consent of the other party. Additionally, either party
may disclose any and all provisions of this Agreement in order to
satisfy SEC (Security and Exchange Commission) filing
requirements or any other legally required disclosures.
c. Non-agency. Neither LICENSEE nor COMPANY is to be construed as an
agent of the other party. This Agreement does not establish a
joint venture, partnership or agency relationship. LICENSEE and
COMPANY do not have any right or authority to create any
obligation, representation or responsibility, express or implied
on behalf of the other party in any manner whatsoever except as
specifically set forth in this Agreement.
d. Assignment. This Agreement and any rights granted hereunder shall
not be assigned by LICENSEE to any person, firm, corporation or
other entity without the prior written consent of COMPANY, and
such consent shall not be unreasonably withheld.
e. Sublicense. LICENSEE shall have a right to sublicense the rights
licensed under this Agreement subject to the terms and conditions
of this Agreement to any third party approved by the COMPANY, and
such approval shall not be unreasonably withheld.
f. Waiver not to be construed as waiver of subsequent defaults. No
provision of this Agreement shall be considered waived and no
breach excused by either party unless made in writing. No
consent, waiver, or excuse by either party, express or implied,
shall constitute a consent, waiver or excuse for subsequent
events. No waiver, consent or breach excused for one instance or
event shall be deemed to be a continuing waiver breach or excuse
for more than the initial instance or event.
Page 14 of 23
g. Provisions. If any provision of this Agreement is held invalid,
illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired.
h. Controlling Law. This Agreement and all transactions under it
shall be governed by the laws of the State of California,
irrespective of the fact that a party hereto may not be a
resident of or maintain a place of business in that State.
i. Legal Expenses. In the event either party takes legal action to
enforce any of the terms of this Agreement, the prevailing party
shall be entitled to reimbursement for its expenses, including
court costs and reasonable attorneys' fees at trial, on appeal or
in connection with any petition for review.
j. Survival of Provisions. The following sections shall survive
termination of this Agreement for any reason:
Section 1, DEFINITIONS
The remedies from Section 3, TERM, Termination, and Remedies
Section 4, Confidentiality
Section 6, Use of Patent Markings,
Section 7, Title and Ownership,
Subsection 9.7, Confidentiality of Audit Information,
Section 11, Independent Development, Subsection 15.4, Publicity
and Disclosure, EXHIBIT B, CONFIDENTIAL INFORMATION EXCHANGE
AGREEMENT
k. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
constitute but one and the same instrument.
COMPANY LICENSEE
By: ___________________________ By: ___________________________
(Authorized Representative) (Authorized Representative)
Name: ___________________________ Name: __________________________
(Print or Type) (Print or Type)
Title: ___________________________ Title: _________________________
Date: ___________________________ Date: __________________________
Page 15 of 23
EXHIBIT A
LIST OF APPLICABLE PATENTS
US Patent#, Title/Description
- -----------------------------
6,037,971 -- Methods and apparatus for the creation and transmission of
3-dimensional images 2 claims. Three-dimensional color images are produced
by combining the red image plane from a left color camera and the blue and
green image planes from a right color camera. Techniques for compensating
for over or underexposure in a particular image plane are deployed as well
as techniques for minimizing subjective disturbance when viewing relatively
pure color regions of a 3-dimensional image and for transmission of
3-dimensional color television images to users. Filed: February 19, 1998.
Issued: March 14, 2000.
5,969,722 -- Methods and apparatus for creation of three-dimensional wire frames
and for three-dimensional stereo morphing 4 Claims. A 3-dimensional wire
frame representation is derived from a real 3-dimensional objects, where
the surface of the object is generally featureless, by projecting a
non-uniform pattern of randomly colored spots onto the 3-dimensional object
and capturing images of the object by two cameras located at different
positions. A wire frame representation of the object is then reconstructed
from corresponding colored spots on the images captured by the two cameras.
Wire frame representations are rapidly created using generic wire frames
which are prototypical of a class of objects and which are modifiable to
correspond to a specific instance of the class. A set of generic wire
frames are bundled as a tool kit with software for editing wire frames. A
method of morphing from a source 3-dimensional stereo rendered wire frame
to a target rendered wire frame is also disclosed and the apparent camera
viewpoint can change during morphing. Filed: October 6, 1997. Issued:
October 19, 1999.
5,793,372 -- Methods and apparatus for rapidly rendering photo-realistic
surfaces on 3-dimensional wire frames automatically using user defined
points 10 Claims. Automatic photographic color rendering of the surfaces of
wire frame representation of 3-dimensional objects is described. Bit mapped
information of surface areas is captured as part of image processing in the
creation of wire frames into the computer. When a wire frame is transformed
to a different orientation, the rendering surfaces are automatically
transformed and the wire frame can be rendered in the new orientation with
photographic quality. Filed: October 21, 1994. Issued: August 11, 1998.
5,742,330 -- Methods and apparatus for the creation and transmission of
3-dimensional images 2 Claims. Three-dimensional color images are produced
by combining the red image plane from a left color camera and the blue and
green image planes from a right color camera. Techniques for compensating
for over or underexposure in a particular image plane are deployed as well
as techniques for minimizing subjective disturbance when viewing relatively
pure color regions of a 3-dimensional image and for transmission of
3-dimensional color television images to users. Filed: October 04, 1996.
Issued: April 21, 1998.
Page 16 of 23
5,742,291 -- Method and apparatus for creation of three-dimensional wire frames
8 Claims. Methods and apparatus are disclosed for the rapid creation of
wire frame representations of 3-dimensional objects using generic wire
frames which are prototypical of a class of objects and which are
modifiable to correspond to a specific instance of the class. A set of
generic wire frames are bundled as a tool kit with software for editing
wire frames. A method of morphing from a source 3-dimensional stereo
rendered wire frame to a target rendered wire frame is also disclosed and
the apparent camera viewpoint can change during morphing. Filed: May 09,
1995. Issued: April 21, 1998.
5,699,444 -- Methods and apparatus for using image data to determine camera
location and orientation 19 Claims. Methods and apparatus for accurately
surveying and determining the physical location of objects in a scene are
disclosed which use image data captured by one or more cameras and three
points from the scene which may either be measured after the images are
captured or may be included in the calibrated target placed in the scene at
the time of image capture. Objects are located with respect to a three
dimensional coordinate system defined with reference to the three points.
The methods and apparatus permit rapid set up and capture of precise
location data using simple apparatus and simple image processing. The
precise location and orientation of the camera utilized to capture each
scene is determined from image data, from the three point locations and
from optical parameters of the camera. Filed: March 31, 1995. Issued:
December 16, 1997.
5,661,518 -- Methods and apparatus for the creation and transmission of
3-dimensional images 1 Claim. Three-dimensional color images are produced
by combining the red image plane from a left color camera and the blue and
green image planes from a right color camera. Techniques for compensating
for over or underexposure in a particular image plane are deployed as well
as techniques for minimizing subjective disturbance when viewing relatively
pure color regions of a 3-dimensional image and for transmission of
3-dimensional color television images to users. TDM and MPEG 2 transmission
techniques for stereo image transmission are disclosed. Left and right
images are caused to be epipolar to reduce adverse user reaction to
extended viewing of stereo images. A three dimensional perspective view may
be connected to a stereo view in accordance with the invention. Filed: June
07, 1995. Issued: April 26, 1997.
Page 17 of 23
EXHIBIT B
Confidential Information Exchange Agreement
The parties agree as follows:
1. Purpose. To assist in their performance pursuant to the Intellectual
Property License AGREEMENT between COMPANY and LICENSEE dated 02 June 2000,
to which this Exhibit is an attachment and integral part of said Agreement,
COMPANY and LICENSEE enter into this CONFIDENTIAL INFORMATION EXCHANGE
AGREEMENT (CIEA) to establish a confidential relationship and to exchange
confidential information which shall be protected by the receiving party
from a disclosure or use that is not authorized by the disclosing party.
2. Designated Liaisons. The parties' designated liaisons for coordinating the
receipt, disclosure or exchange of confidential information are:
For LICENSEE: President Located at: Acuscape, Inc.,1200 East Alosta
Avenue, Suite 206, Glendora, California 91740
For COMPANY: President Located at: 31324 Via Colinas, #106, Westlake
Village, CA 91362
3. Confidential Information Transmittal Forms. The confidential information
being disclosed under this CIEA shall be described in Transmittal Forms or
otherwise marked as described in this CIEA. The initial Transmittal Form
shall be signed by authorized representatives of both parties and attached
to this CIEA as Attachment 1. Subsequent disclosures of confidential
information under this CIEA for the purpose identified above may be
described in additional Transmittal Forms which shall be signed by the
Designated Liaisons for LICENSEE and COMPANY. Transmittal Forms may also be
used for written confirmation of confidential information initially
disclosed in intangible form, as further described in Paragraph 4.
4. Marking of Confidential Information. Confidential information which is
disclosed in written or other tangible form shall be marked by the
disclosing party as "Confidential" or by any other appropriate legend.
Information that is to be confidential information under this CIEA and
which is disclosed in oral, visual or other intangible form (including
electronic transfers), shall be identified as confidential at the time of
disclosure and confirmed in writing (by use of a Transmittal Form or other
writing) by the disclosing party to the receiving party within 30 days of
disclosure. Such written confirmation may be transmitted to the receiving
party via mail or facsimile. The receiving party shall maintain all notices
and legends included on information identified as confidential as received
from the disclosing party.
5. Use and Protection of Confidential Information. In all cases, the
confidential information disclosed shall remain the sole property of the
disclosing party. The receiving party shall not use confidential
information for any purpose other than the purpose for which disclosed. The
receiving party shall disclose confidential information to its employees on
a need-to-know basis only. Each party represents that it protects its own
confidential information from unauthorized use or disclosure. Each party
shall protect confidential information received under this CIEA with the
same degree of care, but no less than a reasonable degree of care, which it
regularly employs to protect its own confidential information from
unauthorized use or disclosure.
Page 18 of 23
6. Exceptions to Obligations of Confidentiality. The obligations of
confidentiality imposed by this CIEA shall not apply to any information
which: (a) is rightfully received by the receiving party from a third party
without accompanying markings or disclosure restrictions; (b) is
independently developed by the receiving party without use of the
confidential information; (c) is or becomes publicly available through no
wrongful act of the receiving party; (d) is already known by the receiving
party without an obligation of confidentiality; (e) is disclosed without
identification and appropriate markings as further described in Paragraph
4; or (f) is approved for release in writing by an authorized
representative of the disclosing party.
7. Disclosure of Confidential Information Pursuant to Judicial Order. Nothing
in this CIEA shall restrict the right of a receiving party to disclose
confidential information to the extent required by judicial order. A
receiving party which is subject to a judicial order shall notify the
disclosing party of such order in sufficient time to permit the disclosing
party to respond to such order. All confidential markings shall be
maintained on any confidential information which is disclosed pursuant to
judicial order.
8. Independent Development. Each party understands that the other party may
have already developed, or received from third parties, information or
material similar to that received under this CIEA, or in the future may be
internally developing, or receiving from third parties, information or
material similar to that received under this CIEA. Provided that
confidential information is not used in violation of this CIEA, nothing in
this CIEA shall be construed as a representation or inference that either
party has not or will not develop information, material, technology or
products, for itself or for others, that is similar to information,
material, or technology disclosed under this CIEA or that competes with
products of the other party.
9. Network Access. To facilitate certain purposes for which this CIEA may be
signed, LICENSEE may allow COMPANY access to LICENSEE's business or
engineering computer networks. Such access may be given on site at LICENSEE
or remotely via computer modem. To the extent such access is given to
COMPANY, COMPANY agrees to protect such access, and all information,
whether marked confidential or not, obtained via such access, in accordance
with all terms of this CIEA. COMPANY agrees to limit such network access to
those employees of COMPANY with a need-to-know. If COMPANY obtains network
access through the use of COMPANY owned equipment, COMPANY shall physically
and electronically secure such equipment to prevent unauthorized use.
COMPANY acknowledges that LICENSEE will monitor COMPANY's network access
and may terminate such access at any time.
10. Copying/Return/Destruction of Confidential Information. Copies of
confidential information are limited to those reasonably necessary in
connection with the use contemplated for such information. All confidential
information and copies shall remain the property of the disclosing party
and shall be destroyed or returned upon the request of the disclosing
party.
11. Waiver/Non-Exclusive Remedies. The failure of either party to enforce any
right under this CIEA shall not be deemed a waiver of any right. The rights
and remedies of the parties under this CIEA are not exclusive and are in
addition to any other rights and remedies provided in law or in equity. The
invalidity in whole or in part of any term of this CIEA shall not affect
the validity of any other term.
12. Entire Agreement/Amendment/Modification of CIEA. This CIEA and the
Intellectual Property License AGREEMENT between COMPANY and LICENSEE dated
25 May 2000 to which this CIEA is attached, constitutes the entire
Agreement between the parties with respect to the subject matter of this
CIEA. No amendment or modification of this CIEA shall be valid or binding
on the parties unless (a) approved in advance by the LICENSEE, (b) set
forth in writing and (c) signed by an authorized representative of each
party. This CIEA shall remain in force during the term of this Agreement
and for a period of five years following termination of this Agreement.
Page 19 of 23
13. Termination. This CIEA shall continue in effect until terminated by either
party upon 30 days prior written notice. The period of confidentiality
described in Paragraph 15 below shall survive such termination for a period
of five (5) years after termination.
14. No Licenses. Neither this CIEA nor any disclosure of confidential
information under this CIEA grants the receiving party any license under
any patent, copyright or trade secret.
15. Period of Confidentiality. Unless a different period of confidentiality is
specified in a Transmittal Form, the period for which the receiving party
shall be obligated to protect the confidentiality of information disclosed
under this CIEA shall commence on the date the information is received by
the receiving party and end five (5) years following termination of this
Agreement.
16. Successors and Assigns/Nonassignment. This CIEA shall be binding upon each
party's successors and assigns. Neither party may assign this CIEA to any
third party without the prior written consent of an authorized
representative of the other party.
17. Controlling Law. This CIEA shall be construed in accordance with the laws
of the State of California, exclusive of the conflict of laws provisions.
Page 20 of 23
ATTACHMENT 1
Confidential Information Transmittal Form
Disclosure Date:
CIEA No.:
The parties identified below agree that the following confidential information
shall be received, disclosed or exchanged in accordance with the terms of the
Confidential Information Exchange Agreement (CIEA) identified above.
Describe confidential information disclosed. (Be specific. Include subject or
product, any document title, drawing/document number, date, revision number,
etc.) (Use additional sheets, if necessary.) (If a party is not disclosing
information, indicate "none.")
LICENSEE's confidential information:
COMPANY's confidential information:
This Transmittal Form covers the above-described confidential information to be
received, disclosed or exchanged on or after the Disclosure Date.
All other terms and conditions of the CIEA remain the same.
COMPANY LICENSEE
Synthonics Technologies, Inc. Acuscape, Inc.
31324 Via Colinas #106 1200 East Alosta Avenue
Westlake Village, CA 91362 Suite 206
Glendora, California 91740
By: ___________________________
(Designated Liaison) By: ________________________
Name: ___________________________ (Designated Liaison)
(Print or Type) Name: ___________________________
Title: ___________________________ (Print or Type)
Title: __________________________
Date: _______________________
Date: ___________________________
Page 21 of 23
EXHIBIT C
Schedule of Minimum Royalty Payments Required
LICENSEE is obligated to make minimum annual royalty payments to COMPANY or be
subject to losing the exclusive nature of the licensed rights granted in this
Agreement.
Calendar Year ending 31 Minimum Royalty Payment Due COMPANY
December of the year
listed below
2000 See Subsection 9.8: Prepaid Royalty Fees
2001 $200,000
2002 $500,000
2003 $1,500,000
All subsequent years $2,000,000
Page 22 of 23
EXHIBIT D
LIST OF LICENSED SOFTWARE
Name Description
- ---- -----------
Wireframe Express,
Version 4.0
A COMPANY software product for constructing 3D models using
photogrammetric means and containing the following software executable
files:
a. WFE40AB.EXE (the main executable program);
b. Wmerge.dll (a dynamic link library that merges
wireframe components);
c. WVRX.dll (a dynamic link library that creates VRX
user-interactive files);
d. WL.dll and WF30QL.dll (dynamic link libraries that
creates "QuickLook" photorendered images);
e. and various support libraries including Ddeml.dll,
Cmdialog.vbx, gauge.vbx, ikcoll6.dll, ikdsp16.vbx,
ikeng16.dll, Lead51n.dll, Muscle.vbx, Spin.vbx,
Spread20.vbx, Vbrun300.dll and Ver.dll.
VRX04.EXE -- A real-time, user-interactive rendering viewer that is based on the
Argonaut Brender game engine. This viewer can display wireframe models,
surface models and phototextured models in standard 3D perspective views as
well as stereoscopic 3D that convey depth perception when viewed through
red-blue glasses.
Assign3.dll -- A software module that has yet to be incorporated in commercial
products, but has the following operating characteristics: a utility for
assigning a "generic wireframe model" to a photograph by means of assigning
three known 3-dimensional locations on the generic model to three
2-dimensional perspective projection image points of that same object.
Assign4.dll -- A software module that has yet to be incorporated in commercial
products, but has the following operating characteristics: a utility for
fitting (by assignment and scaling) a "generic wireframe model" to a
photograph by means of assigning four known 3-dimensional locations on the
generic model to four 2-dimensional perspective projection image points of
a similar object, thus creating a patient-specific wireframe model.
Page 23 of 23