CONFIDENTIAL TREATMENT EXHIBIT 10.22
SOFTWARE LICENSING AND DEVELOPMENT AGREEMENT
This Software Licensing and Development Agreement is entered into as of May
30, 1997 (the "Effective Date") between AWARE, Inc. ("AWARE") and ACCESS
Radiology Corporation ("ACCESS").
Background
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1. ACCESS is in the business of providing integrated hardware and software
systems and services with respect to the transmission and interpretation of
medical images. AWARE develops and licenses proprietary computer software that
is useful for compression and web based viewing of digital images.
2. ACCESS and AWARE are currently parties to a Software Supply Agreement dated
as of November 8, 1995 (the "Old Agreement") under which ACCESS has licensed
certain software from AWARE.
3. ACCESS and AWARE wish to modify the terms of the Old Agreement with respect
to the software currently licensed to ACCESS, and to provide for the development
of new products as described below.
NOW, THEREFORE, the parties agree as follows:
I. LICENSING OF COMPRESSION SOFTWARE; PAYMENTS.
1.01. Grant of Compression License. Subject to the terms of this Agreement,
-----------------------------
AWARE grants to ACCESS the following rights, under any patent, copyright, trade
secret or other proprietary right of AWARE, whether presently held or hereafter
acquired, with respect to the proprietary image compression software identified
on Schedule I (the "Compression Software"). The rights granted to ACCESS shall
be exclusive to the extent set forth in Article II.
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(a) The right to use the Compression Software for ACCESS's internal
business purposes and for the support of ACCESS customers, and to use and
make available Compression Software, for integration solely with other
components of ACCESS products provided to ACCESS customers and solely for
Medical Use. ACCESS shall not resell toolkits or other applications
included in the Compression Software except to the extent integrated in
other ACCESS products with substantial ACCESS content.
(b) The right to grant sublicenses of the Compression Software for
Medical Use, solely as integrated with ACCESS products, to users of ACCESS
products. Sublicenses will be granted in compliance with the procedures set
forth in Section 5.01.
For purposes of the Agreement, "Medical Use" means the compression,
transmission, viewing or other processing of medical images.
1.02. Material Supplied for Compression Software. AWARE will make the
-------------------------------------------
following materials available to ACCESS.
(a) One copy of the latest object code or executable code for the
Compression Software, with all upgrades as they are released. If the copy
of the Compression Software initially provided is lost, damaged or
destroyed, AWARE will provide at cost a replacement copy of the Compression
Software, which may be a more recent release or version.
(a) One copy of documentation in English and documentation updates as
they are prepared and released which, when taken together, constitute
complete documentation of the Compression Software. Additional copies of
documentation may be purchased at AWARE's then-current purchase price.
1.03. License Fees; Payments. (a) ACCESS [*Redacted pursuant to a
Confidential Treatment Request dated September 10, 1999.]
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(b) [*Redacted pursuant to a Confidential Treatment Request dated September
10, 1999.
]
(c) Promptly after the end of each calendar quarter, ACCESS will deliver to
AWARE a statement setting forth, for such quarter, (i) the number of sublicenses
of Compression Software granted for compression of images, (ii) the utilization
of Old Agreement Licenses, (iii) the amount of the Prepayment applied against
license fees due and (iv) any balance of license fees due. [*Redacted pursuant
to a Confidential Treatment Request dated September 10, 1999.
] ACCESS will use its best efforts to provide such
statement and pay license fees due within 10 days of the end of each calendar
quarter. Each quarterly statement and payment of license fees shall be provided
no later than 30 days after the end of the relevant calendar quarter.
(d) ACCESS will keep complete books of account containing all particulars
that may be necessary to determine the amounts payable to AWARE hereunder. Such
books and supporting data shall be open for inspection for one year following
the calendar year to which they pertain, at reasonable times and upon reasonable
notice, by an independent auditor for purposes of verifying the statements
delivered pursuant to subsection (c) above. AWARE will not
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conduct more than one such inspection for books and supporting data relating to
any single calendar year. The results of any inspection shall be made available
to ACCESS. If the agreed results of an inspection show an underpayment or
overpayment, then ACCESS shall pay to AWARE the amount of any underpayment and
AWARE shall pay to ACCESS the amount of any overpayment. [*Redacted pursuant to
a Confidential Treatment Request dated September 10, 1999.
] AWARE shall otherwise bear the costs it incurs in performing any
inspection.
1.04. Support of Compression Software. (a) AWARE warrants to ACCESS that
--------------------------------
the Compression Software will perform substantially in accordance with the
specifications included in Schedule I. AWARE will use its best efforts to ensure
such performance and, if necessary, to supply ACCESS with a corrected version of
the Compression Software as soon as practical after AWARE is notified of any
non-conformity. AWARE will provide maintenance releases, scheduled and
reasonable improvements in functionality, bug fixes and work-arounds at no
charge. This warranty will not apply to copies of Compression Software lost or
damaged through no fault of AWARE. AWARE will provide technical training to a
limited number of technically qualified ACCESS personnel without charge. ACCESS
and AWARE shall mutually agree upon a reasonable schedule for training of ACCESS
personnel.
(b) As between ACCESS and AWARE, ACCESS shall be solely responsible for
installation of Compression Software at end user sites, integration of
Compression Software into devices sold or otherwise provided by ACCESS, and
support of ACCESS customers. The warranty and support obligations of AWARE under
subsection (a) above shall be limited to support and service provided directly
to ACCESS as contemplated by subsection (a).
II. EXCLUSIVITY
2.01 Exclusivity Commitments. (a) The rights of ACCESS to use and
------------------------
sublicense software developed, owned or licensed by AWARE for Medical Use shall
be exclusive to the extent
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set forth herein. From the Effective Date until the termination of exclusivity
as provided herein, AWARE will not (except as expressly permitted by this
Agreement) supply for Medical Use or permit any person to use for Medical Use
(i) the Compression Software or any modification or improvement of the
Compression Software, (ii) any other software developed, owned or licensed by
AWARE that implements lossy compression of images, or (iii) any other software
developed, owned or licensed by AWARE that provides functionality similar to the
Joint Product contemplated by Article III. AWARE will take reasonable steps to
assure compliance with this exclusivity commitment by third parties to whom
AWARE provides software. Notwithstanding anything contained in this Agreement,
AWARE may provide its ADSL, SDSL, HFC and any other general data communication
product (not including lossy compression) to third parties for Medical Use or
any other purpose.
(b) [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
]
2.02. Exceptions. (a) Licenses of Compression Software for Medical Use
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which have been previously granted and for which all license fees have been
invoiced as of the date of this Agreement shall continue in effect
notwithstanding Section 2.01.
(b) [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
]
AWARE shall not permit any customer to modify the Excepted Release (or any other
version of the Compression Software) for Medical Use and shall not make the
source code of the
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Excepted Release (or any other version of the Compression Software) available to
any third party.
(c) AWARE may provide support for Compression Software that is permitted
to be licensed for Medical Use to the limited extent set forth in this
subsection (c). This support may be provided only to customers to whom licensing
of Compression Software for Medical Use is permitted by this Section 2.02. AWARE
may provide corrections of reported defects in the operation of the Excepted
Release with any versions of Netscape Navigator, Microsoft Internet Explorer,
MAC OS System 7, Windows 95 and Windows NT that are current as of the date of
this Agreement or are released within 18 months after the date of this
Agreement. AWARE will not modify the Excepted Release for the purpose of
enabling it to operate with any version of such browsers or operating systems
released later than 18 months after the date of this Agreement. As used in this
subsection (c), "defect" means a condition that causes run time errors or
incorrect results. ACCESS and AWARE may mutually agree to permit a greater level
of support for certain customers on a case by case basis, taking into account
the willingness of the customer involved to purchase products of the development
efforts contemplated by the Agreement, the level of resources required, and the
nature and business activities of the customer requesting support. Except as
expressly agreed in advance by ACCESS, AWARE will not make upgrades of the
Excepted Release available for Medical Use to anyone other than ACCESS and its
sublicensees.
2.03. Transition. Promptly after the date of this Agreement, AWARE will
-----------
publicly announce that it has entered into an exclusive relationship with ACCESS
and that ACCESS and AWARE are making a transition to the products contemplated
by the development provisions of this Agreement. This announcement will be
subject to review by ACCESS before its release.
III. DEVELOPMENT AND MARKETING OF NEW PRODUCTS
3.01. Development Project. (a) Promptly upon execution of this Agreement,
--------------------
AWARE and ACCESS will commence the joint development of a client/server product
that provides for wide-spread distribution and web based viewing of compressed
medical images, having substantially the functionality
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described in Schedule II. Each of AWARE and ACCESS will use their best efforts
to fulfill their respective development responsibilities set forth in Schedule
II on the timetable set forth in Schedule II. Best efforts will include (without
limitation) maintaining staffing available for the development project
consistent with the responsibilities and timetable set forth in Schedule II. It
is understood that Schedule II is a planning document that is subject to change
as development work proceeds. AWARE and ACCESS will cooperate and consult in the
development effort and share information as necessary and appropriate for timely
completion of the development project. ACCESS will have final authority and
responsibility for decisions concerning design, specifications and development
of the Joint Product. The products, toolkits, concepts, inventions and
applications arising out of the development work conducted by ACCESS and AWARE
under this Agreement, including all software developed or contributed by either
party, are collectively referred to as the "Joint Product". Each party will bear
expenses it incurs in development of the Joint Product.
(b) AWARE and ACCESS shall each have access to the source code of
software under development or included in the Joint Product. The fact that
either AWARE or ACCESS has provided access to source code shall in no way affect
proprietary rights to source code or software, and all source code shall
continue to be owned by the party that owned it prior to disclosure. All source
code is "Confidential Information" as that term is used in Section 5.06 and
shall be subject to the restrictions set forth in Section 5.06. ACCESS will
maintain source code revision control procedures with which both AWARE and
ACCESS will comply. These procedures will be designed to achieve, among other
things, compliance with "Good Manufacturing Practices" as defined by the U.S.
Food and Drug Administration and documentation of the ownership of source code
disclosed by either party.
3.02. Marketing; Licenses. ACCESS shall have following rights with respect
--------------------
to the Joint Product under any patent, copyright, trade secret or other
proprietary right of AWARE, whether presently held or hereafter acquired, which
AWARE hereby grants to ACCESS. The rights granted to ACCESS shall be exclusive
to the extent set forth in Article II.
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(a) The right to use the Joint Product for internal purposes and
in support of users of ACCESS products for Medical Use, and to use and make
available the Joint Product as part of ACCESS's product line and for
integration with other components of ACCESS products.
(b) The right to make and have made, use and have used, and
sell, lease or otherwise transfer the Joint Product, and to grant
sublicenses of the software and other intellectual property included in the
Joint Product, to users of ACCESS products for Medical Use in which such
software is included. Users to whom sublicenses are granted may include
original equipment manufacturers or other parties which utilize toolkits to
create derivative products for Medical Use which will in turn be licensed
to end users. Sublicenses of software will be granted in compliance with
the procedures set forth in Section 5.01.
(c) The right to modify the Joint Product and the software
included in it to create new releases and new products for Medical Use, to
make and have made, use and have used, and sell, lease or otherwise
transfer products including modifications for Medical Use, and to grant
sublicenses of software as modified to users of ACCESS products in which
such software is included, in all cases for Medical Use. Users to whom
sublicenses are granted may include original equipment manufacturers or
other parties which utilize toolkits to create derivative products for
Medical Use which will in turn be licensed to end users. Sublicenses of
software will be granted in compliance with the procedures set forth in
Section 5.01.
3.03. Royalties. (a) In consideration of AWARE's contributions to the Joint
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Product, ACCESS will pay royalties to AWARE as determined pursuant to this
Section 3.03. [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
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]
(b) [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
] Promptly upon
completion of the functional product descriptions and design specifications for
the Joint Product, AWARE and ACCESS will negotiate in good faith to reach
agreement on the [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.]
(c) Promptly after the end of each calendar quarter after commencement of
marketing of the Joint Product, ACCESS will deliver to AWARE a statement setting
forth in reasonable detail the calculation of [*Redacted pursuant to a
Confidential Treatment Request dated September 10, 1999.] and royalties due.
Each quarterly statement shall be accompanied by payment of license fees due.
ACCESS will use its best efforts to provide such statement within 10 days of the
end of each calendar quarter. Each quarterly statement and payment of license
fees shall be provided no later than 30 days after the end of the relevant
calendar quarter.
(d) [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
] ACCESS will cooperate with AWARE in marketing efforts and keep
AWARE informed of market developments in general and ACCESS marketing programs
in particular.
(e) [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
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] ACCESS
will not make the Joint Product available without charge except for the purposes
described in the preceding sentence and will not make the Joint Product
available without charge to assist in selling other products or in generating
revenues from other sources. ACCESS and AWARE will negotiate a reduced royalty
rate for users who migrate to the Joint Product after having previously
purchased ACCESS products including the Compression Software.
3.04. Support. AWARE will have responsibilities for support of software
--------
developed by AWARE and included in the Joint Product that are substantially
similar to AWARE's responsibilities for support of Compression Software pursuant
to Section 1.04. [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
] AWARE and ACCESS will negotiate in good faith to reach agreement on
calculation of support fees payable to AWARE at the same time that they
negotiate [ *Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.]
3.05. Marketing for Non-Medical Use. AWARE shall have the right to market
------------------------------
software and other components included in the Joint Product under any patent,
copyright, trade secret or other proprietary right of ACCESS, whether presently
held or hereafter acquired, for all uses other than medical uses. AWARE shall
have the following rights with respect to the Joint Product, which ACCESS hereby
grants to AWARE.
(a) The right to use the Joint Product for internal purposes and
in support of users of AWARE products, and to use and make available the
Joint Product as part of AWARE's product line and for integration with
other components of AWARE products, in all cases for uses other than
Medical Uses. ACCESS agrees that "Medical Uses" for purposes of this
Section
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3.05 [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
]
(b) The right to make and have made, use and have used, and
sell, lease or otherwise transfer the Joint Product, and to grant
sublicenses of the software and other intellectual property included in the
Joint Product to users of AWARE products in which such software is
included, in all cases for uses other than Medical Uses. Users to whom
sublicenses are granted may include original equipment manufacturers or
other parties which utilize toolkits to create derivative products for any
use other than Medical Uses which will in turn be licensed to end users.
Sublicenses of software will be granted in compliance with the procedures
set forth in Section 5.01.
(c) The right to modify the Joint Product and the software
included in it to create new releases and new products, to make and have
made, use and have used, and sell, lease or otherwise transfer products
including modifications, and to grant sublicenses of software as modified
to users of AWARE products in which such software is included, in all cases
for uses other than Medical Uses. Users to whom sublicenses are granted may
include original equipment manufacturers or other parties which utilize
toolkits to create derivative products for any use other than Medical Uses
which will in turn be licensed to end users. Sublicenses of software will
be granted in compliance with the procedures set forth in Section 5.01.
[*Redacted pursuant to a Confidential Treatment Request dated September 10,
1999.
] Except as agreed in writing with ACCESS, AWARE will not make the
Joint Product available without charge.
IV. TERM OF RIGHTS AND OBLIGATIONS
4.01. Term of Exclusivity. (a) The exclusivity provisions of Article II and
--------------------
the other obligations of the
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parties under this Agreement shall remain in effect unless and until terminated
in accordance with this Article IV.
(b) [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
]
(c) [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
]
(d) [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
]
4.02. Effect of Termination of Exclusivity or Expiration of Initial Term.
-------------------------------------------------------------------
(a) If the exclusivity obligations of AWARE and ACCESS shall terminate pursuant
to Section 4.01, AWARE and ACCESS will discuss in good faith whether an
extension of exclusivity or other modifications to this Agreement may be
appropriate. [*Redacted pursuant to a Confidential Treatment Request dated
September 10, 1999.
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] If development of the Joint Product has not been completed at
the time of termination of exclusivity pursuant to Section 4.01, then rights
under such licenses shall apply to such portions of the Joint Product as shall
be in existence on the date of termination (including any applications that are
incomplete).
(b) AWARE and ACCESS agree that the royalties and license fees payable
under this Agreement shall be modified effective upon modification of the
licenses granted hereunder pursuant to subsection (a) above. AWARE and ACCESS
further agree that the appropriate amount of such modified royalties and license
fees cannot be determined as of the date of this Agreement. [*Redacted pursuant
to a Confidential Treatment Request dated September 10, 1999.
] If, at
any time after the end of such three month period, either party shall determine
in its judgment that negotiations are unlikely to result in an acceptable
outcome, such party may initiate arbitration to determine modified fees and
royalties pursuant to the procedures specified in Section 6.02.
4.03. Termination for Breach. (a) If ACCESS shall materially breach its
-----------------------
obligations under this Agreement, and such material breach shall be continuing
for at least 60 days after delivery of a notice by AWARE describing such breach,
then AWARE may by a separate notice terminate this Agreement for breach under
this Section 4.03(a).
(b) If AWARE shall materially breach its obligations under this Agreement,
and such material breach shall be continuing for at least 60 days after delivery
of a notice by ACCESS describing such breach, then ACCESS may by a separate
notice terminate this Agreement for breach under this Section 4.03(b).
(c) With respect to the obligations of AWARE and ACCESS to participate in
development of the Joint Product pursuant to Section 3.01(a), "material breach"
means willful failure of a party to devote best efforts to the development
project or to allocate sufficient resources to perform such party's
responsibilities.
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(d) Termination for breach under this Section 4.03 shall not be an
exclusive remedy, but shall be in addition to any other remedies that either
party may have.
4.04. Effect of Termination for Breach. (a) If AWARE shall terminate this
---------------------------------
agreement for breach pursuant to Section 4.03, then (i) the licenses granted to
ACCESS pursuant to Sections 1.01 and 3.02 shall immediately terminate and ACCESS
shall cease using or marketing the Compression Software and the Joint Product
and (ii) the license granted to AWARE pursuant to Section 3.05 shall remain in
effect.
(b) If ACCESS shall terminate this agreement for breach pursuant to
Section 4.04, then (i) the license granted to AWARE pursuant to Section 3.05
shall immediately terminate, and AWARE shall cease using or marketing the Joint
Product (ii) the licenses granted to ACCESS pursuant to Sections 1.01 and 3.02
shall remain in effect and (iii) the exclusivity obligations of ACCESS under
Article II shall immediately terminate.
(c) If development of the Joint Product has not been completed at the time
of termination for breach pursuant to Section 4.03, then rights under continuing
licenses shall apply to such portions of the Joint Product as shall be in
existence on the date of termination (including any applications that are
incomplete).
(d) For so long as the license granted under Section 1.01 continues in
effect, ACCESS shall pay royalties as provided in Section 1.03. To the extent
that licenses of the Joint Product under Sections 3.02 and 3.05 remain in
effect, royalties payable with respect to the Joint Product will be determined
by agreement between the parties or, failing such agreement, by arbitration
under Section 6.02.
4.06. Additional Surviving Terms. All payment obligations accrued prior to
--------------------------
any termination shall survive such termination. All sublicenses granted to any
end user by either party in accordance with this Agreement prior to any
termination of this Agreement shall survive such termination. Either party which
holds a continuing license under this Agreement shall also continue to have the
rights set forth in Sections 1.02, 1.04. 3.01(b) and 3.04 with respect to such
license. The provisions of Sections 5.02,
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5.03, 5.06, 6.02, 6.04, 6.05 and 6.14 shall survive any termination of this
Agreement.
V. INTELLECTUAL PROPERTY
5.01. Software Licensing Procedures. (a) The procedures set forth in this
------------------------------
Section 5.01 shall govern the granting of sublicenses of software to users under
this Agreement. In this Section 5.01, the party granting a sublicense to a user
is referred to as the "Licensor".
(b) Each of AWARE and ACCESS shall assign a unique number to each copy
made by it of software comprising the Joint Product or any other software
developed or provided by the other party, whether for internal use or for
sublicense to a user. Each of AWARE and ACCESS shall keep full, clear and
accurate records of all copies that it makes of any such software and the
identity and location of each third party user to whom any such software is
provided. Each of ACCESS and AWARE may examine records of the other party not
more than once in any calendar quarter, during normal business hours and upon
reasonable notice.
(c) Upon granting a sublicense of software comprising the Joint Product or
any other software developed or provided by the other party, the Licensor shall
require that the user execute an agreement including the software licensing
terms set forth below. Such agreement may be between the user and the Licensor,
or between the user and a reseller or other intermediary authorized by the
Licensor.
(i) a provision restricting the sublicensee's use of the licensed
software to its own business and professional purposes, provided that any
sublicensee of a toolkit may use it to create new applications to be
licensed to end users as part of the sublicensee's product;
(ii) a provision requiring the sublicensee to take all reasonable
precautions to keep the licensed software and any related documentation
confidential;
(iii) a provision prohibiting the sublicensee from reproducing
(except for backup copies), reverse engineering, translating or creating
other versions of
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the licensed software, provided that any sublicensee of a toolkit may use
it to create new applications to be licensed to end users as part of the
sublicensee's product;
(iv) a provision acknowledging that ownership of the licensed
software remains exclusively with the Licensor or its suppliers; and
(v) a provision limiting the other party's liability to the
sublicensee to at least the same extent that the liability of the Licensor
to the sublicensee is limited, and disclaiming warranties on behalf of the
other party at least to the extent disclaimed on behalf of the Licensor.
Each party will use reasonable efforts to enforce license agreements executed by
its customers. AWARE agrees that any license of Compression Software granted by
ACCESS prior to the Effective Date need not be altered if it complied with the
requirements of the Old Agreement.
(d) Notwithstanding this Section 5.01 or any other provision of this
Agreement, software may be licensed to the Government of the United States of
America, or an agency or instrumentality thereof, under an agreement containing
software licensing terms generally used by the United States Government (or the
agency or instrumentality to which the software is licensed) for procurement of
commercial software.
5.02. Ownership. (a) As between ACCESS and AWARE, AWARE owns and shall
----------
continue to own the Compression Software (including without limitation AWARE's
AccuRad product) and any other software developed solely by AWARE or by any
employee, consultant or other person acting on AWARE's behalf under this
Agreement, including any inventions, concepts, specifications, know-how and
ideas embodied in such software, together with all proprietary rights therein
("AWARE Intellectual Property"). As between ACCESS and AWARE, ACCESS owns and
shall continue to own the concepts, specifications, know-how, and ideas embodied
in the design and functionality of the Joint Product, and as applied in the
Joint Product for Medical Use, and any software developed solely by ACCESS or
by any employee, consultant or other person acting on ACCESS's behalf under this
Agreement, including any inventions, concepts,
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specifications, know-how and ideas embodied in any of the foregoing, together
with all proprietary rights therein ("ACCESS Intellectual Property"). As between
ACCESS and AWARE, the parties shall jointly own any software or other
intellectual property jointly developed by the parties under this Agreement and
not allocated between them above, including any inventions, concepts,
specifications, know-how and ideas embodied therein, together with all
proprietary rights therein ("Joint Intellectual Property"). Whether or not any
intellectual property is jointly developed shall be determined in accordance
with the United States patent laws.
(b) AWARE shall have the right to file and prosecute patent or copyright
applications on AWARE Intellectual Property and ACCESS shall have the right to
file and prosecute patent or copyright applications on ACCESS Intellectual
Property. The parties will cooperate in the filing and prosecution of patent or
copyright applications on Joint Intellectual Property, provided that neither
party shall file any such patent or copyright application without the prior
written consent of the other. Each party will cooperate with the other party in
the filing and prosecution by the other party of any patent or copyright
application that complies with this subsection (b), including by executing and
delivering or causing its officers and employees to execute and deliver (all at
the expense of the filing party) any documentation reasonably necessary or
appropriate for the filing and prosecution of such an application and the
vesting of rights as provided in this Agreement.
(c) The exclusivity obligations of the parties under Article II shall not
in any way be affected by the ownership of AWARE Intellectual Property, ACCESS
Intellectual Property, or Joint Intellectual Property as provided in this
Section 5.02, or by the filing of any patent or copyright application or the
grant or issuance of any patent or copyright. Neither party shall market, sell,
license or distribute any Joint Intellectual Property except to the extent that
such Joint Intellectual Property is covered by a license granted to such party
hereunder.
5.03. Trademarks. (a) The terms specified in Schedule 5.03 to this
Agreement are trademarks or tradenames owned by AWARE and may not be used
without specific written permission. Nothing herein shall confer upon ACCESS any
proprietary interest in the trademarks or tradenames, except
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the right to use the same in accordance with the terms hereof. All use of such
marks or names, and the goodwill associated therewith, shall inure to the
benefit of AWARE. ACCESS agrees not to, at any time during the term of this
Agreement or thereafter, directly or indirectly (i) dispute or contest the
validity or enforceability of AWARE's trademarks or tradenames, or (ii) take any
action that would dilute the value of the goodwill attaching to the trademarks
or tradenames.
(b) ACCESS shall exclusively own the trademarks or trade names under which
the Joint Product is sold for Medical Use or otherwise provided by ACCESS, and
may file and prosecute trademark applications on such trademarks and tradenames.
AWARE agrees not to, at any time during the term of this Agreement or
thereafter, directly or indirectly dispute or contest the validity or
enforceability of such trademarks or tradenames.
5.04. Representations. (a) AWARE represents to ACCESS that:
----------------
(i) AWARE has full authority to enter into this Agreement and
grant the licenses and rights set forth herein.
(ii) To the best of AWARE's knowledge, the documentation and
code of the Compression Software have not been published under
circumstances which have caused loss of proprietary rights therein, and to
the best of AWARE's knowledge, the documentation and code of the
Compression Software do not infringe upon any patent, copyright or other
proprietary right of any third party.
(iii) AWARE is not aware of any claim of infringement of any
patent, copyright or other proprietary right having been made or pending
against AWARE relative to the documentation or code of the Compression
Software.
(b) ACCESS represents to AWARE that:
(i) ACCESS has full authority to enter into this Agreement and
grant the licenses and rights set forth herein.
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(ii) To the best of ACCESS's knowledge, the specifications and
functionality of the Joint Product, as set forth in Schedule II, do not
infringe upon any patent, copyright or other proprietary right of any third
party.
5.05. Indemnities. (a) AWARE will, at its expense, defend against, hold
-----------
ACCESS harmless from, and pay any final judgment against ACCESS or any customer
of ACCESS arising (x) out of any claim that AWARE Intellectual Property
infringed a copyright, a patent or a trade secret or (y) out of marketing by
AWARE of AWARE products (including any product liability claim unless such
product liability claim is caused by designs, specifications or software
provided by ACCESS); provided that (i) ACCESS notifies AWARE in writing of such
claim or action, and (ii) AWARE has sole control of the defense and settlement
of such claim or action. In defending against such claim or action to the extent
it relates to software provided by AWARE, AWARE may, at its option, agree to any
settlement in which AWARE shall either (1) procure for ACCESS and all customers
of ACCESS the right to continue using the software at issue; or (2) modify or
replace such software so that it no longer infringes, to the extent that the
exercise of such option does not result in a material adverse change in the
operational characteristics of such software, and equivalent functions and
performance provided by AWARE remain following implementation of such option. If
AWARE concludes in its judgment that none of the foregoing options is
reasonable, AWARE may remove the software at issue and any other component
supplied by AWARE rendered unusable as a result of such removal and pay to
ACCESS damages arising therefrom, including damages incurred by reason of
ACCESS's inability to perform its obligations under sublicenses; [*Redacted
pursuant to a Confidential Treatment Request dated September 10, 1999.
]
(b) ACCESS will, at its expense, defend against, hold ACCESS harmless
from, and pay any final judgment against AWARE or any customer of AWARE arising
out of (x) any claim that ACCESS Intellectual Property infringed a copyright, a
patent or a trade secret or (y) out of marketing by ACCESS of ACCESS products
(including any product liability claim unless such product liability claim is
caused by designs, specifications or software provided by AWARE) provided that
(i) AWARE notifies ACCESS in writing of such claim or
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19
action, and (ii) ACCESS has sole control of the defense and settlement of such
claim or action. In defending against such claim or action to the extent it
relates to software provided by ACCESS, ACCESS may, at its option, agree to any
settlement in which ACCESS shall either (1) procure for AWARE and all customers
of AWARE the right to continue using the software at issue; or (2) modify or
replace such software so that it no longer infringes, to the extent that the
exercise of such option does not result in a material adverse change in the
operational characteristics of such software, and equivalent functions and
performance provided by ACCESS remain following implementation of such option.
If ACCESS concludes in its judgment that none of the foregoing options is
reasonable, ACCESS may remove the software at issue and any other component
supplied by ACCESS rendered unusable as a result of such removal and pay to
AWARE damages arising therefrom, including damages incurred by reason of AWARE's
inability to perform its obligations under sublicenses; [*Redacted pursuant to a
Confidential Treatment Request dated September 10, 1999.
]
(c) If ACCESS shall determine in its judgment that the concepts,
specifications, know-how, and ideas embodied in the design and functionality of
the Joint Product infringe or conflict with a patent, copyright, trade secret or
other proprietary right not known to ACCESS on the date of this Agreement, then
ACCESS shall notify AWARE and the parties will discuss in good faith whether the
Joint Product can be modified or other steps may be taken to avoid such
infringement. If ACCESS determines in its judgment that no such modification or
other steps can be reasonably implemented, ACCESS may by notice terminate the
obligations of AWARE and ACCESS under this Agreement with respect to the Joint
Product, and the indemnity of ACCESS in subsection (b) above shall apply only to
those claims relating to the Joint Product of which AWARE or ACCESS had notice
prior to the date of the first notice regarding infringement delivered by
ACCESS.
5.06. Confidentiality. As used in this Agreement, "Confidential
----------------
Information" means (i) all confidential information, proprietary software, trade
secrets, know-how, and all other intellectual property that is subject to the
licenses granted in this Agreement and in which proprietary rights would be
adversely affected by disclosure and (ii)
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20
all other confidential or proprietary information (including without limitation
financial information and business information such as customer lists) that is
or has been disclosed by AWARE to ACCESS or by ACCESS to AWARE. AWARE and ACCESS
agree that they will not, and will not permit their respective officers,
employees, agents and representatives to, without first obtaining the written
consent of the other party, use, sell or disclose any Confidential Information,
except as expressly contemplated hereby and except that Confidential Information
may be disclosed by the party that owns it unless such disclosure would
adversely affect the proprietary nature of Confidential Information subject to
any of the licenses granted hereunder. Either party may disclose Confidential
Information to potential customers, and to other third parties to the extent
necessary to permit any such third party to assist in manufacture or integration
of the Joint Product, provided that any such potential customer or third party
to whom Confidential Information is disclosed shall execute a confidentiality
agreement no less restrictive than this Section 5.06. "Confidential Information"
does not include (i) information that is or becomes (other than by disclosure in
violation of this Agreement) generally available to the public, (ii) information
that the receiving party can show was known to the receiving party prior to its
disclosure by the other party, or (iii) information required to be disclosed by
law or regulation or by judicial process or administrative order, provided that
prompt notice and an opportunity to seek a protective order is given to the
other party prior to disclosure. AWARE and ACCESS agree that this Agreement and
the Schedules thereto are Confidential Information subject to this Section 5.06.
VI. GENERAL.
6.01. Regulatory Matters. ACCESS shall make and prosecute all filings and
-------------------
take such other actions as ACCESS shall consider appropriate to obtain clearance
for commercial marketing of the Joint Products from the FDA and such other
authorities as may be appropriate for marketing of the Joint Product. AWARE will
cooperate with ACCESS in providing information and assistance with respect to
such filings and other actions and may review and comment on filings made by
ACCESS. AWARE shall take such actions to comply with regulatory requirements
(including without
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21
limitation "good manufacturing practices" as defined by the FDA, and standards
and procedures specified in filings made with the FDA) as ACCESS shall
reasonably request, including without limitation use of identified development,
design and specification methodologies.
6.02. Arbitration. Any controversy or claim arising out of or relating to
------------
this Agreement, or the breach thereof, shall be settled by arbitration
administered by the American Arbitration Association in Boston, Massachusetts
under its Commercial Arbitration Rules, and judgment on the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof.
Arbitration as specified in this Section 6.02 shall be the sole and exclusive
procedure for the resolution of disputes between the parties arising out of or
relating to this Agreement or the breach thereof; provided, however, that a
party, without prejudice to such procedure, may file a complaint to seek a
preliminary injunction or other provisional judicial relief, if in its judgment
such action is necessary to avoid irreparable damage or preserve the status quo.
Despite such action the parties will continue to participate in good faith in
the procedures specified in this Section 6.02. AWARE and ACCESS agree that any
breach of Sections 2.01, 2.02, 4.04, 5.01, 5.03 or 5.06 would cause irreparable
harm and that the aggrieved party shall be entitled to equitable relief in the
nature of an injunction for any such breach, without posting of a bond or other
surety.
6.03. Public Announcements. AWARE and ACCESS will cooperate in all public
---------------------
disclosure concerning this agreement, and neither party shall make any such
disclosure without the approval of the other. Approval of disclosure required by
law or regulation shall not be unreasonably withheld; provided that it may be a
condition of such approval that the party making such disclosure seek
confidential treatment.
6.04. Limitation of Warranties. THE OBLIGATIONS OF AWARE AND ACCESS
-------------------------
EXPRESSLY STATED IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES OR
CONDITIONS EXPRESS OR IMPLIED. TO THE EXTENT ALLOWABLE TO BY LAW, THIS EXCLUSION
OF ALL OTHER WARRANTIES AND CONDITIONS EXTENDS TO IMPLIED WARRANTIES OR
CONDITIONS OF MERCHANTABLE QUALITY AND FITNESS FOR A PARTICULAR PURPOSE, AND
THOSE ARISING BY STATUTE OR OTHERWISE IN LAW, OR FROM A COURSE OF DEALING OR
USAGE OF TRADE.
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6.05. Limitation of Liability. ACCESS AND AWARE AGREE THAT, EXCEPT AS
------------------------
EXPRESSLY STATED OTHERWISE IN THIS AGREEMENT, THE LIABILITY OF EITHER OF THEM TO
THE OTHER, IF ANY, UNDER ANY THEORY OF LAW OR EQUITY, ARISING OUT OF, OR IN ANY
WAY RELATED TO THIS AGREEMENT OR THE FULFILLMENT OF ANY OF THE OBLIGATIONS OF
EITHER OF THEM UNDER THIS AGREEMENT, IS LIMITED TO MONEY DAMAGES NOT TO EXCEED
THE TOTAL AMOUNT PAID OR PAYABLE BY ACCESS TO AWARE OR BY AWARE TO ACCESS (AS
THE CASE MAY BE) UNDER THIS AGREEMENT.
6.06. Governing Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the Commonwealth of Massachusetts.
6.07. Assignment. (a) Subject to ACCESS's right to grant sublicenses
-----------
hereunder, ACCESS may not assign this Agreement or any rights hereunder without
the prior written consent of AWARE, except that, without such consent and upon
notice to AWARE, (i) ACCESS may assign all of its rights hereunder to a
corporation or other legal entity that acquires substantially all of ACCESS's
assets or where ACCESS is consolidated or merged, but then only upon the express
assumption by such transferee or its successor of the obligations set forth in
this Agreement and (ii) ACCESS may grant security interests in the rights of
ACCESS under this Agreement to secure the obligations of ACCESS to a bank or
other financial institution which has extended credit to ACCESS.
(b) Subject to AWARE's right to grant sublicenses hereunder, AWARE may not
assign this Agreement or any rights hereunder without the prior written consent
of ACCESS, except that, without such consent and upon notice to ACCESS, (i)
AWARE may assign all of its rights hereunder to a corporation or other legal
entity that acquires substantially all of AWARE's assets or where AWARE is
consolidated or merged, but then only upon the express assumption by such
transferee or its successor of the obligations set forth in this Agreement and
(ii) AWARE may grant security interests in the rights of AWARE under this
Agreement to secure the obligations of AWARE to a bank or other financial
institution which has extended credit to AWARE.
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23
(c) This Agreement is binding upon, and inures to the benefit of, the
successors and permitted assigns of the parties.
6.08. Effect of Waiver. The waiver or failure of either party to exercise
----------------
in any respect any right provided for in this Agreement shall not be deemed a
waiver of any further or future right hereunder.
6.09. Headings. The headings used in this Agreement are for convenience of
---------
reference only and are not to be used in interpreting the provisions of this
Agreement.
6.10. Complete Agreement. This Agreement is the exclusive statement of the
-------------------
understanding between the parties with respect to its subject matter. It
supersedes all prior agreements, negotiations, representations and proposals,
written or oral, relating to the subject matter hereof, including without
limitation the Old Agreement. No provisions of this Agreement may be changed or
modified except by an agreement in writing signed by the party to be bound. No
provision of any purchase order or other instrument issued by ACCESS or any
invoice or other form issued by AWARE that is inconsistent with the provisions
of this Agreement shall be binding or affect this Agreement unless signed by
both parties.
6.11. Severability. If any provision of this Agreement is invalid or
-------------
unenforceable in any particular case, such case shall not invalidate or render
unenforceable any other part of this Agreement. This Agreement shall be
construed as not containing the particular provision or provisions held to be
invalid or unenforceable to the extent of the particular case, and the rights
and obligations of the parties hereto shall be construed and enforced
accordingly.
6.12. Effectiveness of Agreement; Counterparts. This Agreement is
-----------------------------------------
effective when executed by both parties. This Agreement may be executed in
counterparts, each of which shall constitute one and the same instrument.
6.13. Notices. All notices provided for in this Agreement shall be in
--------
writing or facsimile, addressed to the appropriate party at the respective
address set forth below or to such other then-current address as is specified by
notice, as follows:
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(b) to AWARE:
Aware, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
(c) to ACCESS:
ACCESS Radiology Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Notices sent by certified mail, return receipt requested to the address
specified pursuant to this Section 6.13 shall be effective three business days
after deposit in the U.S. Mail with postage prepaid. Notice delivered by any
other means shall be effective upon receipt.
6.14. No Agency. AWARE and ACCESS are independent contractors and separate
----------
legal entities and shall in no way be interpreted as partners, joint venturers,
agents, employees or legal representatives of each other for any purposes.
Neither party shall be responsible for or bound by any act of the other party or
the other party's agents, employees or any persons in any capacity in its
service.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the first date set forth above.
ACCESS RADIOLOGY
CORPORATION AWARE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------- -----------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Title: Vice President of
Technology
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