LICENSE AGREEMENT
THIS AGREEMENT, effective the 30th day of September 1998, ("Effective Date"), is
between "Image Analysis Corporation, a Florida corporation, located at 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxx Xxxx Xxxxxxx, ("IAC"), and the University of South Florida
Research Foundation, Inc., a corporation not for profit under Chapter 617
Florida Statues, and a direct support organization of the University of South
Florida ("USF") pursuant to section 240.299 Florida Statutes, having an address
at XXX Xxx 00000, Xxxxx, XX 00000-0000 ("USFRF").
Introduction
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WHEREAS, IAC will be actively involved in the merchandising of medical image
analysis software for colorizing and enhancing the quality of magnetic resonance
imaging ("MRI") images.
WHEREAS, USF developed the following technology:
MRI colorization technology - Dr. Xxxxx Xxxxx, Inventor: US Patents #5,332,968
and #5,410,250; Mexican Patent #183483; EPC Patent #637387; Pending Japanese
serial #5-418,631, Pending PCT #US93/03600; and Pending Canadian Serial
#2,133,988.
WHEREAS, USFRF is the exclusive licensor of USF Technology and is willing to
grant IAC an exclusive license to use USF Technology and other USF research
results derived pursuant to this Agreement, on the terms and conditions therein;
and
WHEREAS, USFRF believes it is in the public interest to grant IAC the license
set forth below.
NOW THEREFORE, in consideration of the premises and mutual covenants set forth
herein, and intending to be legally bound, the parties agree as follows:
I. Definitions
A. "USF Patent Rights" shall mean the USF Patent Applications listed
above and any successor application, domestic or foreign resulting
therefrom and any US or foreign patents issuing therefrom.
B. "USF Technology" shall mean a method for colorizing and displaying
MRIs as described above and developed by Dr. Xxxxx Xxxxx, and shall
include USF Patent Rights and know-how related directly thereto.
C. "Licensed Product" shall mean any product, system and/or process in
which USF Technology is used.
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D. To "Commercially Exploit" or "Commercial Exploitation", shall mean to
make or use a Licensed Product for commercial purposes or to provide
the licensed Product to a customer, in exchange for valuable
consideration.
E. "Revenue" shall mean consideration due or paid to IAC and its
sublicensees for Commercial Exploitation.
F. "Territory" shall mean Worldwide.
II. Grant
Subject to USFRF's retained rights and covenants set forth in Section VIII
Below, IAC is granted the exclusive right and license to Commercially
Exploit Licensed Products in the Territory.
III. Best Efforts
IAC shall use its best efforts to develop and Commercially Exploit Licensed
Products in the Territory.
IV. License Fees and Running Royalties
IAC agrees to pay license fees, and running royalties (all payable to
USFRF) as follows:
A. For the USF Technology, an initial license fee of Two Hundred Thirty
Thousand (230,000) Common Shares of IAC to be delivered within thirty
(30) days after full execution of this License.
B. Running royalties equal to:
Five percent (5%) of Revenue.
C. IAC shall pay to USF the following minimum royalty payments:
For the USF Technology; Zero dollars ($0) for the first twenty four
(24) months; Five thousand dollars ($5,000.00) at the end of year
three (3); Six thousand dollars ($6,000.00) at the end of year four
(4); Seventy- two hundred dollars ($7,200.00) at the end of year five
(5); Eight thousand six hundred forty dollars ($8,640.00) at the end
of year six (6); And ten thousand three hundred sixty eight dollars
($10,368.00) at the end of year seven (7); and the same sum for each
successive year thereafter during the term of this Agreement.
V. Patent Prosecution
The filing, prosecution and maintenance of all USF Patent Rights shall be
at the sole discretion of USF, provided that at IAC's request and sole
expense, USFRF will arrange for USF to seek, obtain and maintain the USF
Patent Rights and requested other protection, in the territory, to the
extent that USF is lawfully entitled to do so, all of which shall be
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incorporated in USF Patent Rights. Should IAC elect not to seek, obtain or
maintain a part of USF Patent Rights, all rights to such part shall revert
to USFRF, and IAC shall have no further interest therein.
VI. Assignability
This Agreement may be assigned to any person or entity without USFRF's
advance notice, and thereafter may be assigned to any person or entity only
with advanced written approval from USFRF; provided that USFRF will not
unreasonably withhold giving such approval in a timely manner, and further
provided that any such assignee agrees to comply with all of the terms and
conditions hereunder.
VII. Sublicensing
IAC's rights and obligations under this Agreement may be sublicensed
without USFRF's advance written permission, provided IAC is in compliance
with all of its obligations under this Agreement.
USFRF will permit IAC to sublicense its rights to Commercially Exploit
Licensed Products, provided that IAC shall pay royalties to USFRF as if IAC
had itself provided the Commercial Exploitation carried out by its
sublicensees. All sublicensees shall agree to comply with all of the terms
and conditions of this Agreement. IAC shall provide USFRF with a copy of
each executed sublicense within fifteen (15) days of its execution.
VIII.USFRF Retained Rights and Covenants
USFRF retains for itself and for USF the right to do all things granted to
IAC under Section II, hereof and USFRF covenants that USFRF will not
license others to Commercially Exploit USF Technology licensed to IAC under
this Agreement, and will not itself so Commercially Exploit, unless
(A) authorized by this Agreement, or
(B) IAC becomes insolvent, or
(C) anyone files a lien against this Agreement, or
(D) IAC takes any action, or fails to take any action, the result of which
gives a third party the right to acquire a security interest in this
Agreement and/or USF Patent Rights, or
(E) IAC files for bankruptcy or a receiver is appointed, or
(F) IAC ceases to carry on its business, with the exception of merger,
reorganization, acquisition, or similar restructuring.
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(G) IAC materially breaches this Agreement in a manner which causes the
Agreement to terminate or gives USFRF the right to terminate under
Section XII.
IX. Product Liability/Insurance
IAC shall, at all times during the term of this Agreement and thereafter,
be solely responsible for, and defend, hold harmless and indemnify the
State of Florida, Board of Regents, USF, USFRF, their trustees, officers,
employees, agents and other representatives, against any claims and
expenses, including legal expenses and reasonable attorney's fees, arising
out of the death of or injury to any person or property based upon products
and/or services produced, provided or developed for, or by IAC, or
Commercially Exploited by IAC pursuant to its rights under this Agreement.
IAC shall obtain and carry in full force and effect product liability
insurance, in amounts customary in the relevant industry in which IAC
commercially exploits licensed products which shall protect USF, USFRF,
their trustees, the Board of Regents, officers, employees, and agents and
the State of Florida and other representatives in regard to the foregoing
events at such time as IAC begins to supply Licensed Products to the
marketplace.
X. Record Keeping
A. IAC shall keep full, true and accurate books of account containing all
particulars that may be necessary for the purpose of showing the
amounts payable to USFRF hereunder. Said books of account shall be
kept at IAC's principal place of business. Said books and the
supporting data shall be open at all reasonable times, with reasonable
advanced notice, for five (5) years following the end of the calendar
year to which they pertain, to the inspection of USFRF or its agents
for the purpose of verifying IAC's royalty statement or compliance in
other respects with this Agreement.
B. IAC within ninety (90) days after each six (6) month period beginning
with the Effective Date, shall deliver to USFRF true and accurate
reports, giving such particulars of the business conducted by IAC
during the preceding six (6) month period as shall be pertinent to
royalty accounting hereunder. These shall include at least the
following:
(i) the number of Licensed Products provided by IAC and its
sublicensees to customers, if any,
(ii) the Revenue derived by IAC and its sublicensees from Commercial
Exploitation, if any, and
(iii) the royalties due pursuant to Section IV.
With each such report submitted, IAC shall pay the royalties and any
other consideration due and payable under this Agreement. If no
royalties, fees or other consideration shall be due, IAC shall so
report.
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C. On or before the ninetieth (90th) day following the close of IAC's
Fiscal year, IAC shall provide USFRF with IAC's financial Statements
for the preceding fiscal year including, at a minimum, a Balance sheet
and an Operating Statement.
D. The payments for royalties, fees or other consideration set forth in
this Agreement shall, if overdue, bear interest until payment at the
monthly rate of one percent (1%). The payment of such interest shall
not foreclose USF or USFRF from exercising any other rights either may
have as a consequence of the lateness of any payment.
E. IAC hereby agrees that it shall not sell, transfer, export or
re-export any Licensed Products or related information in any form, or
any direct products of such information, except in compliance with
all applicable laws, including the export laws of any U.S. government
agency and any regulations thereunder, and will not sell, transfer,
export or re-export any such Licensed Products or information to any
persons or any entities with regard to which there exist grounds to
suspect or believe that they are violating such laws. IAC shall be
solely responsible for obtaining all licenses, permits or
authorizations required from the U.S. and any other government for any
such export or re-export.
XI. Non Use of Names
IAC shall not use the names of the USF or USFRF, nor any adaptation of
either, in any advertising, promotional or sales literature without prior
written consent obtained from USF and/or USFRF in each case, except that
IAC may state that it is licensed under one or more of the patents and/or
applications comprising the USF Patent Rights.
XII. Term and Termination
A. Unless sooner terminated as provided herein, the royalty obligations
of this Agreement will expire with respect to a given Licensed Product
the longer of twenty (20) years from the Effective Date of this
Agreement or the expiration of the last to expire USF Patent Rights in
the Territory. Notwithstanding the foregoing, the parties hereto agree
that the royalty provisions of Paragraph IV.B. and IV.C., are not
solely dependent upon Patent Rights, and IAC's obligations to pay
royalties under paragraph IV.C. hereinabove shall continue unabated
regardless of any of the foregoing expirations.
B. In the event either party files for bankruptcy or a receiver is
appointed, this Agreement may immediately thereafter be terminated at
the option of the other party.
C. Should IAC fail to pay the royalties, fees and/or consideration due
and payable hereunder, USFRF shall have the right to terminate this
Agreement on forty-five (45) days written notice. Upon the expiration
of the forty-five (45) day period, if IAC shall not have paid all such
royalties and interest thereon, USFRF shall have the right to
terminate this Agreement. Upon any material breach or default of this
Agreement by IAC, other than those occurrences set out hereinabove
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which shall always take precedence in that order over any material
breach or default referred to in this Section, USFRF shall have the
right to terminate this Agreement and the rights, privileges and
license granted hereunder upon forty- five (45) days' written notice
to IAC. Such termination shall become effective unless IAC shall have
cured any such breach or default prior to the expiration of forty-five
(45) days from the date IAC receives notice of the breach or default.
D. Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that
matured prior to the effective date of such termination. IAC may,
however, after the effective date of such termination, complete
Commercial Exploitation for which IAC has received consideration at
the time of such termination and sell the same, provided that IAC
shall pay to USFRF the royalties or other consideration thereon as
required under the provisions of Section IV of this Agreement, and
shall submit the reports required under Section X.B.
E. Upon termination of this Agreement for any reason, all intellectual
property rights licensed hereunder, including without limitation, all
USF patent rights and all USF Technology shall revert to USF and
USFRF, and IAC shall have no further right to or continuing interest.
In addition, any sublicenses hereunder shall terminate, unless
accepted by USFRF.
F. IAC, its successors or assigns, shall have the option to terminate
this license agreement upon thirty (30) days written notice and in
that event. IAC shall cease using USF Technology and return same to
USF. In this event, it is understood that all future monetary
obligations under this Agreement shall be void and any monies paid to
date to USFRF shall be non-refundable to IAC, or its assigns.
XIII.Payments Notices and Other Communications
Any payment, notice or other communication made to any party pursuant to
this Agreement shall be sufficiently made or given on the date of mailing
if sent to such party by certified first class mail or air courier, postage
prepaid, addressed to it at its address below, or at such other address as
it shall have designated by written notice given to the other party.
In the case of USF:
Director of Patents & Licensing
0000 Xxxx Xxxxxx Xxxxxx XXX 000
Xxxxx, Xxxxxxx 00000-0000
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In the case of USF:
USF Research Foundation, Inc.
USF Xxx 00000
Xxxxx, Xxxxxxx 00000-0000
In the case of USF:
ImageAnaylis Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxx 00000
XIV. Infringement
IAC understands that USFRF makes no representations, and provides no
assurances that Commercial Exploitation under this Agreement does not and
will not in the future, infringe or otherwise violate the rights of others.
XV. Miscellaneous Provisions
A. Each party represents and warrants that it has the authority to enter
Into this Agreement and that the execution, delivery and performance
of this Agreement does not conflict with any agreement, or
understanding, either written or oral, to which it is a party or to
which it is otherwise bound.
B. This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the State of Florida, U.S.A.
C. The parties hereto acknowledge that this Agreement sets forth the
Entire agreement and understanding of the parties, hereto as to the
subject matter hereof, and shall not be subject to any change or
modification except by the execution of a written instrument
subscribed to by the parties hereto.
D. If any term, covenant or condition of this Agreement or the
Application thereof to any party or circumstance shall, to any extent
be held to be invalid or unenforceable,
(i) the remainder of this Agreement, or the application of such term,
covenant or condition to the parties or circumstances other than
those as to which it is held invalid or unenforceable, shall not
be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent
permitted by law; and
(ii) the parties hereto covenant and agree to renegotiate any such
term, covenant or application thereof in good faith in order to
provide a reasonably acceptable alternative to the term, covenant
or condition of this Agreement or the application thereof that is
invalid or unenforceable, it being the intent of the parties that
the basic purposes of this Agreement are to be effectuated.
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E. In the event any provision of this Agreement is inconsistent with USF
Rules and Policy in effect as of March 1, 1998, USF Rules and Policy
shall control.
F. IAC agrees to use in connection with Licensed Products used and/or
provided in the United States all applicable United States Patent
numbers and/or copyright notices requested by USFRF. All Licensed
Products used and/or provided in other countries shall be marked in
such a manner as to conform with the patent, copyright and other laws
and practice of the country.
G. The failure of any party to assert a right hereunder or to insist upon
compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent
failure to perform any such term or condition by the other party.
H. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, USF AND
USFRF MAKE NO REPRESENTATION AND EXTEND NO WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT,
AND VALIDITY OF USF PATENT RIGHTS.
I. It is understood and agreed that USF is a third party beneficiary of
this Agreement.
J. This Agreement shall not be effective until such time that USFRF has
received the initial license fee of Two Hundred and Thirty Thousand
(230,000) Shares of IAC. If these shares are not received within
thirty (30) days from the execution of this Agreement, then this
Agreement shall become null and void and the parties shall be released
from its terms and obligations.
K. This Agreement, together with any amendments hereto, shall inure to
the benefits of IAC, its successors and/or assigns.
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals and duly
executed this Agreement the day and year set forth below.
UNIVERSITY OF SOUTH FLORIDA
RESEARCH FOUNDATION, INC.
/s/ XXXXXX X. XXXXXXX /s/ XXXXXXX X. XXXXXXX
BY:------------------------------ WITNESS:-------------------------------
Name
President
Title----------------------------
10/9/98
Date----------------------------- APPROVED AS TO
FORM AND LEGALITY
/s/ XXXXX X. XXXXXXXXX
-----------------------
XXXXX X. XXXXXXXXX
IMAGE ANALYSIS CORPORATION ATTORNEY USF
/s/ XXXXXXXX X. XXXXX /s/ XXXXXXX X. XXXXXXX
BY:------------------------------ WITNESS:------------------------------
Name Xxxxxxxx X. Xxxxx
President / IAC
Title----------------------------
10/12/98
Date-----------------------------
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