Exhibit 10.19
-------------
between
Synthonics Technologies, Inc.
and
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ Computer CORPORATION
This Agreement is effective January 22, 1999 ("Effective Date") between ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇ Computer Corporation, a Utah corporation, including its
majority-owned subsidiaries, with its principal place of business at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("E&S") and Synthonics Technologies, Inc. a
Utah corporation, with its principal place of business at ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
#▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Company").
RECITAL
Company has developed technology and software programs for the purpose of
rapidly constructing photo-textured 3D models from digital images. This
Agreement allows for Company's software programs to be integrated or bundled
with E&S software and/or hardware products and marketed and sold worldwide
through E&S sales distribution channels. E&S will market these products to
potential customers and pay certain compensation to Company for sublicenses
granted under the terms and conditions of this Agreement. E&S will not market
and sell stand-alone versions of Company's software programs.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS. The following definitions shall apply to this Agreement:
(a) "Software Programs" means the object code form of Company software
products which are listed in Exhibit A, including user documentation
and translators, libraries and user interfaces which allow Software
Programs to be integrated and/or compatible with E&S software and/or
hardware products. The term "Software Programs" also includes all
releases, revisions, enhancements and updates to Software Programs
during the term of this Agreement.
(b) "Customer" means an end-user who has been offered or acquires Software
Programs under the terms of an E&S license agreement.
(c) "Support Customer" means a Customer who purchases E&S support service
for E&S software and/or hardware products, which include integrated or
bundled Software Programs, under the terms of an E&S support
agreement.
2. TERM OF AGREEMENT. This Agreement takes effect on the Effective Date and
expires 2 years after that date ("Initial Term"). This Agreement will then
be automatically renewed for 3 years. After the Initial Term, the Agreement
may be terminated by either party giving 12 months prior written
notification.
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3. Confidentiality. To assist in their performance under this Agreement the
parties may exchange certain information which the disclosing party deems
confidential. All confidential information disclosed under this Agreement
will be disclosed and treated in accordance with the Confidential
Information Exchange Agreement (CIEA) attached as Exhibit B. The CIEA shall
remain in force during the term of this Agreement and for a period of five
years following expiration or termination of this Agreement.
4. SOFTWARE PROGRAM DEVELOPMENT. The parties shall perform their respective
responsibilities to develop, deliver and maintain Software Programs when
and as described in Exhibits C and G.
5. GRANT OF LICENSES.
5.1 Software Programs. Company grants E&S a nontransferable, worldwide,
irrevocable license to use, reproduce and sublicense Software Programs
and to integrate or bundle Software Programs with E&S products, for
the following purposes:
(a) to sublicense Software Programs which have been integrated or
bundled into E&S products to Customers pursuant to the terms of
this Agreement;
(b) for use by E&S, including its employees, consultants and
contractors, for the following purposes:
(i) E&S internal use;
(ii) quality assurance tests, demonstrations and benchmarks for
potential sales; and (iii) providing support to Customers;
(c) to temporarily sublicense Software Programs to prospective
Customers, for evaluation purposes under E&S standard loan
processes, which may include the use of a shrink-wrap license;
and
(d) to sublicense Software Programs to colleges and universities.
5.2 Exclusivity. The licenses granted in Subsection 5.1 shall be
nonexclusive, except for the Exclusivity Provisions specified in
Exhibit F.
5.3 License Survival. The licenses granted in Subsection 5.1 shall survive
and continue through any bankruptcy proceeding involving Company,
subject to E&S obligations pursuant to Section 8. Termination or
expiration of this Agreement shall have no effect on the licenses then
existing between E&S and its sublicensees.
Company and E&S 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 that, for purposes of applying Section 365(n), this
Agreement is an "executory contract," all rights and licenses granted
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to E&S under or pursuant to this Agreement are, and shall otherwise be
deemed to be, licenses to rights of "intellectual property," Company
is a "licensor of a right to intellectual property," as those terms
are defined and used in the Code, and that the "Escrow Agreement"
attached as Exhibit E and executed by Company in connection herewith
constitutes "agreements supplementary" to this Agreement and E&S'
license of Software Programs, as that term is used in the Code. If
Company is under any proceeding under the United States Bankruptcy
Code (the "Code") and the trustee in bankruptcy of Company, or
Company, as a debtor in possession, rightfully elects to reject this
Agreement or the Escrow Agreement, E&S may, pursuant to 11 U.S.C.
Sections 365(n)(1) and (2), retain any and all of E&S' rights
hereunder and thereunder, to the maximum extent permitted by law,
subject to the payments specified herein and the conditions specified
therein.
5.4 Use of Trademarks, Tradenames. E&S shall have the right to use
Company's name and trademarks in connection with the distribution of
Software Programs. E&S may, at its option, use or apply its own name
and trademarks in connection with the products covered by this
Agreement. E&S will prominently display Company's name in Software
Programs which are integrated or bundled into E&S products.
5.5 E&S Software. E&S grants Company a non-exclusive, nontransferable
royalty-free license to use E&S software provided to Company pursuant
to the terms and conditions of Exhibit D, exclusively for performing
Company's responsibilities as described in the Agreement.
6. Title and Ownership. Title to all E&S software (including content) and
hardware, all patents and copyrights, and all copies thereof, excluding
Software Programs, and all specifications, designs, programs, utilities and
trademarks provided by E&S under this Agreement shall remain with E&S. E&S
shall also have title to all derivative software and hardware developed by
E&S personnel or agents, whether or not this development occurs in
collaboration with Company. Title to all Software Programs, all patents and
copyrights, and all copies thereof, excluding any E&S software and hardware
or derivative works, and all specifications, designs, programs, utilities
and trademarks provided by Company under this Agreement shall remain with
Company.
7. ESCROW OF SOURCE CODE. Concurrently with the execution of this Agreement,
the parties shall execute the Escrow Agreement attached as Exhibit E. Prior
to or concurrently with the delivery of any Software Programs under this
Agreement, Company shall transfer to the escrow agent under the Escrow
Agreement the source code and materials described in the Escrow Agreement.
Materials placed into escrow will be released to E&S on the terms and
conditions set forth in the Escrow Agreement.
8. FEES AND PAYMENT.
8.1 Royalty Fees. As described in Exhibit A, E&S shall pay fees to Company
for Software Programs sublicensed to Customers and for support
provided to Support Customers. Payments are payable quarterly,
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beginning with the quarter in which the first shipment for revenue
occurs, within 30 days following the end of each calendar quarter. E&S
shall provide a statement showing the number of sublicenses of the
Software Programs during the calendar quarter for which a fee is owed,
and a calculation of the fees due. Company shall have the right to
audit the accounting and sales books and records of E&S relevant to
this Agreement to ensure compliance with the terms of this Agreement.
Any such audit shall be conducted by a representative of a nationally
recognized independent certified public accounting firm whose fee is
paid by Company, other than on a contingent fee basis, and who signs a
non-disclosure agreement reasonably acceptable to E&S. E&S shall be
entitled to 30 days prior written notice to schedule an audit on a
mutually convenient date and such audit shall not be held more than
once per calendar year.
8.2 Prepaid Royalty Fees. E&S will prepay royalties in the amount of
$40,000, as provided below, upon the successful delivery by Company
and the acceptance by E&S of Software Programs which meet E&S
requirements. These prepaid royalties will be applied as a credit
against royalty fee payments due to Company from E&S. No additional
royalty fee payments will be made to Company by E&S until this credit
has been eliminated. Fees will be paid as follows:
- $20,000 upon delivery and acceptance of Software Programs meeting
the Model Generation functionality outlined in the document
"Software Specification - Existing Building Modeler" on or before
2/28/99; and
- $20,000 upon delivery and acceptance of completed Software
Programs which are fully tested and ready for Beta testing and
which meet the Performance Goals outlined in the document
"Software Specification - Existing Building Modeler" on or before
4/30/99.
9. DISTRIBUTION AND MARKETING.
9.1 Distribution. E&S shall have the right to distribute Software Programs
worldwide through whatever sales distribution channels that E&S shall
deem appropriate, including telesales and independent sales
organizations and distributors. E&S makes no representations as to the
level of marketing and sales effort it will provide or the number or
volume of sales that will be made under this Agreement.
9.2 Pricing and Discounts. Company guarantees that the pricing and
discounts terms extended to E&S for Software Programs shall be at
least as favorable as Company's best distribution pricing and
discounts for all distribution channels used by Company, including
direct channels within Company, and indirect channels such as
representatives, distributors, joint marketing agents, and other OEM's
(collectively "Distribution Channel"). If Company extends prices or
discounts to any Distribution Channel more favorable than those
extended to E&S, E&S shall receive corresponding prices and discounts.
Such price decrease for E&S shall be effective as of the date on which
it is granted for any other Distribution Channel. Company agrees to
undergo at E&S request and expense an audit by an independent third
party to assure compliance with this section.
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9.3 Commissions. E&S will be responsible for any commissioning of its
sales representatives on the sales of Software Programs made to
Customers.
9.4 Competitors. Company shall not enter into any agreement to directly
provide or market Software Programs to any other company for the
purposes in the markets prohibited in Exhibit F during the Initial
Term of this Agreement. The "Exclusivity Provisions" of Exhibit F will
terminate immediately if the E&S Pixel Products Division begins to
market and sell products in which Company's Software Programs have
been replaced with alternative technology for rapidly constructing
photo-textured 3D models of existing structures from digital images.
9.5 Independent Development. Except as provided in this section, nothing
in this Agreement shall prohibit either party from independently
developing, marketing, distributing, and/or licensing similar products
or engaging a third party to develop, market, distribute, and/or
license such products or establishing a business relationship with any
third party with products similar to those of the other party.
10. REPRESENTATIONS AND WARRANTIES.
10.1 Rights and Title. Company represents and warrants that it has title to
Software Programs and the right to enter into and grant the licenses
described in this Agreement. Company represents that it has sufficient
facilities, resources and personnel to adequately perform its
obligations under this Agreement and is not precluded by any existing
agreement from entering into or performing under this Agreement.
Company warrants that Company distribution agreements shall not
preclude E&S in any way from distributing Software Programs worldwide
to the markets identified in Exhibit F.
10.2 Year 2000; Harmful Code. The Software Programs are Year 2000
Compliant. As used in the preceding sentence, "Year 2000 Compliant"
means that the Software Programs will function accurately and without
interruption before, during and after January 1, 2000, and will
accurately process date and time data (including, but not limited to,
calculating, comparing, sequencing, sorting and representing) from,
into and between the twentieth and twenty-first centuries, and the
years 1999 and 2000 and leap year calculations, to the extent that
other technology used in combination with the Software Programs
properly exchanges date and time data with such programs. The Software
Programs do not contain any virus or other code, including but not
limited to codes, commands or instructions that may be used without
authorization to access, alter, delete, damage or disable the Software
Programs or technology used in combination with the Software Programs.
10.3 Software Program Performance. Company represents and warrants that
Software Programs shall meet at a minimum the performance and
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functional specifications set forth in all applicable data sheets,
user and reference documentation and in all Software Program
specifications, including the requirements agreed between Company and
E&S as provided in Exhibit C. Company warrants to E&S that Software
Programs will substantially conform with such specifications for a
period of 90 days after installation at a Customer's site unless
modified or misused. Pursuant to Exhibit G, E&S shall report
non-conforming Software Programs to Company to enable Company to
address and correct the non-conformity. Where a non-conformity is
identified by a Customer which significantly affects performance in
accordance with such published specifications, and written
notification is provided to E&S within the 90 day warranty period,
Company will use its best efforts to provide, at no cost, appropriate
resolution by telephone to correct or avoid such non-conformity. If a
Customer returns a Software Program or withholds payment for the
Software Program for any reason, E&S may withhold the sublicense fee
payment until payment for the Software Program is received from the
Customer or shall receive credit from Company if payment has already
been made to Company.
11. SOFTWARE PROGRAM Support. Support for Software Programs shall be provided
by the parties pursuant to this section.
11.1 Technical Support. Company shall provide E&S with technical support
and telephone support to enable E&S to provide support to Support
Customers pursuant to the requirements in Exhibit G.
11.2 Diagnostic Software. Company shall provide E&S with available
diagnostic software, which is not otherwise commercially available,
for installation, troubleshooting and support of Software Programs at
no charge.
11.3 Intentionally Omitted.
11.4 Support Following Termination or Expiration. Upon termination or
expiration of this Agreement for any reason or if a third party
purchases or acquires an interest in Company, Company agrees that, for
a period of two years, Company or its successor in interest shall
continue to provide to E&S and Support Customers the same level of
support as described in this section at the price effective pursuant
to this Agreement on the date of expiration, termination or
consummation of the Sale or Acquisition, whichever applies. Failure of
Company or its successor in interest to provide such support services
shall be subject to E&S' rights under Section 7 and Exhibit E. If E&S
has obtained the source code and a fully paid license to Software
Programs by exercising its rights under Section 7 and Exhibit E, E&S
will assume total responsibility for support.
12. TRAINING AND SALES SUPPORT.
12.1 Training. Company will provide without charge training in the
operation and support of Software Programs to E&S personnel as
necessary to fulfil the terms and intent of this Agreement. E&S will
supply all necessary demonstration equipment for the training. The E&S
Liaison identified in Section 13 below will coordinate requests for
training. Each party shall be responsible for its travel expenses
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incurred in attending or providing training, provided that training
takes place at E&S headquarters in Salt Lake City. Company shall not
be required to provide more than forty teacher hours per quarter of
training.
12.2 Pre/Post-sales Support. Company will provide without charge reasonable
levels of pre-sales and post-sales support, including Customer visits,
joint sales calls, demonstrations and benchmark support, for Software
Programs to E&S and Customers during the term of this Agreement. E&S
shall pay out-of-pocket travel expenses for such support.
12.3 Product Bulletins. Company will provide without charge product
improvement, technical, service and other product-related bulletins
describing all improvements and anticipated changes in Software
Programs and in service techniques and procedures. All written
information shall be provided electronically in Microsoft Word format
or shipped at no charge to the Liaison identified in Section 13.
12.4 Sales Leads. Company sales staff will contact the appropriate E&S
regional sales personnel with any sales leads they may identify that
E&S could supply.
13. LIAISONS AND REVIEW.
13.1 Liaisons. Each party shall cooperate and provide such assistance to
the other, including the execution of such additional documents,
instruments, agreements and certificates and taking such other
actions, as may be reasonably requested and necessary to fulfill the
purposes described in this Agreement. Each party designates the
following representative as its liaison to coordinate the performance
of its responsibilities and exchange information. Either party may
designate a replacement liaison by giving the other party notice
pursuant to Section 17.2.
Company: E&S:
F. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
31324 Via Colinas #106 Pixel Products Division
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇ Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
13.2 Quarterly Review Meetings. Unless otherwise agreed, the parties shall
have quarterly meetings to review all aspects of this Agreement and
the overall performance of the parties. Such quarterly meetings shall
be held alternately at E&S' headquarters and at Company's
headquarters.
14. PATENT, COPYRIGHT AND TRADE SECRET INDEMNIFICATION.
14.1 Non-infringement. Company warrants that Software Programs, including
without limitation each component, and the use and licensing of
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Software Programs will not infringe upon or violate any patent,
copyright or trade secret of any third party.
14.2 Indemnification. Company will defend, at its expense, and will
indemnify and hold harmless E&S against any loss, cost, expense or
liability arising out of any claim by a third party against E&S or
Customers asserting or involving a patent, copyright, trade secret or
proprietary right violation involving any Software Programs acquired
by or licensed to E&S under this Agreement, whether or not such
Software Programs have been transferred or sublicensed to third
parties, and whether or not such claim is successful, provided: (a)
Company is notified by E&S in writing within a reasonable time after
E&S' receipt of written notice of such claim, action or allegation of
infringement; (b) Company is provided all material information
reasonably available to E&S and reasonable assistance to settle or
defend the action; and (c) Company is granted control of the defense
or settlement of the action subject to E&S' reasonable approval.
14.3 Infringement Claim. If an injunction or order is obtained against E&S'
or Customers' use or sublicense of Software Programs or if Company
determines that Software Programs are likely to become the subject of
a claim of infringement or violation of a patent, copyright, trade
secret or other proprietary right of a third party, Company will, at
its option and expense: (a) procure for E&S the right to continue
using and sublicensing Software Programs and for Customers the right
to continue using Software Programs; or (b) replace or modify the same
so that it becomes noninfringing provided such modification or
replacement does not adversely affect the specifications for or the
use or operation of Software Programs by E&S or Customers. If neither
(a) nor (b) is reasonably available, Company shall accept the return
of Software Programs and all other Company-supplied products with
which the infringing product is integrated, refund the fees paid by
E&S to Company as described in Exhibit A, and secure a release of E&S
and Customers from any further liability.
14.4 No Liability. Company shall have no liability under this section if
the alleged infringement is based upon: (a) the combination of
Software Programs with any product not furnished by Company to E&S to
the extent such combination causes the infringement; (b) the
modification of Software Programs other than by Company to the extent
such modification causes the infringement; (c) compliance with E&S'
specifications, designs or instructions; or (d) the use of other than
a current, unaltered release of Software Programs if the current
release has been made available to E&S, to the extent the prior
release causes the infringement.
15. INTENTIONALLY OMITTED.
16. TERMINATION.
16.1 Termination for Breach. Either party may terminate this Agreement
without liability upon 30 days written notice to the other party if
the other party is in material breach of its obligations under this
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Agreement and has failed to cure such breach prior to the expiration
of such 30-day period. Material breach of a party's obligations
includes, but is not limited to, the failure of one party to pay the
other party per the terms of this Agreement, and Company's failure to
deliver conforming Software Programs in accordance with Exhibit C or
the software specification document contemplated under Exhibit C.
16.2 Notice of Breach, Cure. In the event of a breach of the obligations of
a party under this Agreement, the nonbreaching party shall provide
written notice to the breaching party setting forth, in sufficient
detail, a description of the breach and the applicable cure period. If
the breach is either party's breach of the confidentiality provisions,
the notice of breach shall provide for a cure period of not less than
five days. For all other types of breach, including without
limitation, the failure to pay any amounts due in a timely manner, the
notice of breach shall provide for a cure period of not less than 30
days.
16.3 Termination after the Initial Term. After the Initial Term, the
Agreement may be terminated by either party giving 12 months prior
notification.
16.4 Termination upon Sale or Acquisition of Company. If Company is sold or
acquired by a company which E&S deems to be a competitor, E&S may
elect to terminate this Agreement. E&S may also purchase a fully-paid,
perpetual, irrevocable license to Software Products and their Source
Code, as specified in Exhibit E.
17. GENERAL PROVISIONS.
17.1 Entire Agreement; Exhibits. This document and its Exhibits 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
regarding Software Programs and services are superseded by this
Agreement. This Agreement may not be modified except by written
document signed by an authorized representative of each party. In the
event that any part of this Agreement is found to be unenforceable,
the remainder shall continue in effect, to the extent consistent with
the intent of the parties as of the Effective Date. The following
documents are attached as Exhibits to and made a part of this
Agreement:
Exhibit A Software Programs and Fees
Exhibit B Confidential Information Exchange Agreement
Exhibit C Software Program Development and Delivery
Exhibit D Temporary Software License Agreement
Exhibit E Escrow Agreement
Exhibit F Exclusivity Provisions
Exhibit G Software Support Responsibilities
17.2 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 mailing if mailed at a U.S. Post Office, first class
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mail, postage prepaid, addressed or delivered as follows or at such
other address that either party provides by advance written notice to
the other party.
If to Company: If to E&S:
Attn: President Attn: General Manager
Synthonics Technologies, Inc. E&S Pixel Products Division
31324 Via Colinas #106 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇ Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
17.3 Informal Dispute Resolution. If any dispute arises from or relates to
this Agreement, authorized representatives of Company and E&S shall
meet no later than ten working days after 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.
17.4 Publicity. 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. Neither party shall issue any news release
or announcement concerning this Agreement without the prior written
consent of the other party, which will not be unreasonably withheld.
Failure by a party to respond to a request for approval of a press
release or other public statement within ten business days after
receipt of the proposed release and written request by such party's
public relations department will constitute consent.
17.5 Non-agency. Neither E&S nor Company are agents of the other party.
This Agreement does not establish a joint venture, partnership or
agency relationship. E&S 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.
17.6 Non-assignment. This Agreement is not assignable by either party
without the prior written consent of the other, except, with respect
to Company, to a successor to all or substantially all of the business
by reason of merger, sale of assets or other form of acquisition which
shall be subject to E&S' rights under Section 16.4, and with respect
to E&S, to a successor to all or substantially all of the business or
assets of E&S or the Pixel Products Division by reason of merger, sale
of assets or other form of acquisition, merger or consolidation. This
Agreement shall inure to the benefit of and shall be binding upon the
respective successors and assigns, if any, of the parties.
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17.7 Headings and Provisions. The headings of the sections of this
Agreement are for reference only and do not control the interpretation
of any term or condition of this Agreement. 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 subsequent consent,
waiver or excuse. 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.
17.8 Controlling Law. This Agreement and all transactions under it shall be
governed by the laws, excluding choice of law rules, of the State of
Utah.
17.9 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.
17.10Survival of Provisions. The following sections shall survive
termination of this Agreement for any reason: 3, 5.3, 6, 10, 14, and
17.
17.11Counterparts. 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 E&S
By: /S/ F. ▇▇▇▇▇▇▇ ▇▇▇▇ By: /S/ ▇▇▇▇▇▇ ▇. Aral
---------------------------------- ------------------------------
(Authorized Representative) (Authorized Representative)
Name: F. ▇▇▇▇▇▇▇ ▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. Aral
---------------------------------- ------------------------------
(Print or Type) (Print or Type)
Title: President and CEO Title: General Manager
Pixel Productions Division
Date: 1/27/99 Date: Janaury 27, 1999
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EXHIBIT A
SOFTWARE PROGRAMS AND FEES
During the term of this Agreement, E&S shall pay a fee to Company on each copy
of Software Programs that is sublicensed pursuant to the terms below.
1. Software Programs covered in this agreement.
Synthonics Optical Architect
2. PROGRAM FEES. E&S will pay royalties to Company for licenses sold during
each quarter of E&S model generation software which includes Software
Programs. The amount paid to Company for each such E&S model generation
original software license will be equal to the following percentages of the
end-user sales price or international distributor buy price:
Cumulative original licenses sold % of sales price
---------------------------------- -----------------------
1-250 8%
251-500 7%
501-1000 6%
1001+ 5%
No fee shall be payable for demonstration or evaluation licenses.
3. SUPPORT FEES. E&S will pay support fees to Company each quarter for E&S
model generation software which includes Software Programs. The amount paid
to Company for each E&S model generation software license will be equal to
5% of the software support fees collected by E&S.
4. UPGRADE FEES. If upgrades are sold to E&S model generation software which
includes Software Programs, the amount paid to Company will be equal to the
same percentage as is currently being paid for original licenses of the
end-user sales price or international distributor buy price. Upgrade sales
are not counted as part of the cumulative original licenses described in
Section 2 above.
5. EDUCATIONAL GIFTS. E&S may sublicense Software Programs to colleges and
universities without a payment due to Company, if E&S does not receive
payment for these licenses. Sales by E&S to colleges and universities will
be covered by the provisions of this Exhibit A. Educational gifts and
discounted sales are not counted as part of the cumulative original
licenses described in Section 2 above.
6. ADDITIONAL USE BY E&S. E&S will pay royalties to Company for all licenses
of Software Programs used internally by E&S to generate models for other
E&S businesses and customers. The price will be equal to the average
royalty amount E&S pays to Company for other licenses sold during that
quarter. E&S may include Software Programs in its simulation and mission
Page 12
planning products and pay the same percentages of end-user sales price or
international distributor price specified in Section 2 of this Exhibit A.
Company will also not unreasonably withhold the right for E&S to include
Software Programs in other E&S product offerings for other markets. The
terms and pricing for this usage will be separately negotiated.
Page 13
EXHIBIT B
CONFIDENTIAL INFORMATION EXCHANGE AGREEMENT
The parties agree as follows:
1. Purpose. To assist in their performance pursuant to Section 3 of the
underlying Agreement, Company and E&S enter into this agreement 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 E&S: ▇▇▇▇▇▇ ▇▇▇
Located at: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
For Company: F. ▇▇▇▇▇▇▇ ▇▇▇▇
Located at: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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 E&S 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 14
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, E&S may allow Company access to E&S' business or engineering
computer networks. Such access may be given on site at E&S 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 E&S 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.
Page 15
12. Entire Agreement/Amendment/Modification of CIEA. This CIEA 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 E&S Legal
Department, (b) set forth in writing and (c) signed by an authorized
representative of each party.
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.
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 three years thereafter.
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 Utah, exclusive of the conflict of laws provisions.
18. Residuals. Notwithstanding any other provisions of this Agreement, both
parties shall be free to use for any purpose the residuals resulting from
access to or work with the confidential information provided by the other
party. The term "residuals" means information in non-tangible form which
may be retained in the unaided memories of the personnel who have had
access to confidential information, including ideas, concepts, know-how or
techniques contained therein. Neither party shall have any obligation to
limit or restrict the assignment of such persons or to pay royalties for
any work resulting from the use of residuals. However, the foregoing shall
not be deemed to grant any license under a party's copyrights or patents.
Page 16
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.
1. 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.")
E&S' confidential information:
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
Company's confidential information:
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
2. This Transmittal Form covers the above described confidential information
to be received, disclosed or exchanged on or after the Disclosure Date.
3. The parties agree that unless the blank set forth below is filled in, the
period of confidentiality for the above described confidential information
shall be three years from the date of receipt by the receiving party.
The terms of the CIEA notwithstanding, the period of confidentiality for
the above described confidential information shall be ___ months/years.
(Not less than two years or more than five years.)
4. All other terms and conditions of the CIEA remain the same.
COMPANY E&S
Address ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
By: By:
(Designated Liaison) (Designated Liaison)
(Name) (Name)
(Date) (Date)
Page 17
EXHIBIT C
SOFTWARE PROGRAM DEVELOPMENT AND DELIVERY
1. SOFTWARE PROGRAM DEVELOPMENT.
1.1 Delivery and Acceptance. Company and E&S shall mutually review and
agree upon the requirements in the document "Software Specification -
Existing Building Modeler", dated January 6, 1999 for the initial
delivery of Software Programs. Company shall develop and deliver
alpha, beta and final (releasable) versions of the Software Programs
in accordance with the schedule provided in the Agreement, the
Software Specification documents or as otherwise agreed. The parties
may by mutual agreement modify the requirements and schedule for the
Software Programs. E&S will accept incremental delivery of Software
Programs by Company to E&S when the requirements for each delivery
have been met to the satisfaction of E&S.
1.2 Quality Assurance. Company and E&S shall mutually review and agree
upon the standard quality assurance procedures, as specified in the
document "Quality Assurance Specification - Existing Building
Modeler", dated January 6, 1999, that will be employed by Company.
Such procedures shall be satisfactorily completed prior to shipment by
Company of each release of any Software Program to E&S or Customers.
Company shall provide E&S with results evidencing quality assurance to
E&S' satisfaction. These procedures shall be subject to modification
as required from time to time to address any failures not identified
by the current procedure. E&S shall have the right to participate in
the Company quality assurance process and provide input for increasing
product quality. E&S shall require Company to provide beta versions of
new releases for quality assurance and compatibility testing. E&S may
inform Company of problems in Software Programs and Company shall
correct such problems pursuant to Section 11 of the Agreement and
Exhibit G.
1.3 Release Schedules. Company shall support each current release and the
prior release of all Software Programs. Software Programs shall be
updated for each E&S software release. Company shall use its best
efforts to synchronize with E&S' release cycles and milestones.
1.4 Compatibility. Company shall retain the right to develop, improve and
maintain Software Programs; provided, however, that Company shall not
make changes in the appearance or functionality of Software Programs
which result in incompatibility of Software Programs with E&S software
or loss of functionality used by E&S and E&S customers. Company and
E&S acknowledge that maintaining full software compatibility between
Software Programs and E&S software is important to the ability of E&S
to satisfy Customers and to meet its obligations under this Agreement.
Company shall ensure the compatibility of Software Programs with E&S
software and Company shall cooperate to ensure the continuing support
and control of such compatibility.
Page 18
1.5 Source Code Tree. If Company intends to maintain more than one source
code tree for all Software Programs for all Distribution Channels,
Company shall maintain and support the source code tree for E&S at a
level equal to or greater than any other source code tree maintained
or supported by Company. Company shall inform E&S of product plans in
a timely manner.
1.6 Competitiveness. Company will use its best efforts to ensure that
Software Programs remain competitive in the marketplace.
1.7 Enhancements. Company will work with E&S to understand and prioritize
enhancement requests made by E&S and E&S customers. Company will use
its best efforts to make enhancements to Software Programs which are
mutually agreed to be high priority on a timely basis.
2. OPERATING SYSTEM. Software Programs shall initially run under Microsoft
Windows NT 4.0, Service Pack 3.0. Company shall insure Software Programs
run on all new releases of the Windows NT operating systems within three
months after the release becomes available.
3. DELIVERY.
3.1 Release Updates. Company will use its best efforts to delivery to E&S
code release updates as follows:
(a) the beta, pre-production, versions of Software Programs no later
than four weeks before the scheduled beta release by E&S of
products which include integrated or bundled Software Programs;
(b) the production release of Software Programs no later than four
weeks before the production release by E&S of products, which
include integrated or bundled Software Programs; and
(c) access to advance information and to all significant product
improvements in the Software Programs no later than other sales
channels and OEM's of Company.
3.2 Compliance. Company's failure to comply with Section 3.1 of this
Exhibit shall be deemed a nonmaterial breach of this Agreement and E&S
may withhold any payment due until Company has complied.
3.3 Master Copies. Within 5 days after the Effective Date, Company shall
deliver reproducible master copies of all Software Programs including
software in object code form and documentation in the form identified
below to E&S. Software Programs shall be shipped F.O.B. Company
facilities to E&S' designated facility. E&S shall be responsible for
all freight, duty, export or import licensing and insurance charges.
3.4 Copies of Documentation. Company shall provide to E&S at no charge two
copies of any existing documentation including user's manuals and
training manuals in laser-printed form and one copy of each manual in
Page 19
machine-readable format for each type of Software Program for
reproduction. As Software Programs are modified and the documentation
is updated Company shall provide E&S with updates to documentation in
laser-printed form and in machine-readable format for reproduction.
Page 20
EXHIBIT D
TEMPORARY SOFTWARE LICENSE AGREEMENT
This Temporary Software License Agreement is designated Exhibit D to the
dated January 22, 1999 (Underlying Agreement)
between E&S Corporation, with its principal place of business at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (E&S) and Company, with its principal place of
business at ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (Company).
E&S and Company agree as follows:
1. TEMPORARY LICENSE. E&S will temporarily license to Company certain software
and documentation which is described in Attachment A (Software). E&S grants
to Company, for the term specified in Attachment A, a nontransferable,
nonexclusive license to use Software only on the equipment listed in
Attachment A, in machine-readable form only, solely for the purposes
described in the Underlying Agreement. Company agrees that all Software is
the sole property of E&S or its licensors. Company shall not mortgage,
pledge or encumber Software in any way.
2. COPIES AND LOCATION. Company may not make copies, in whole or in part, of
any Software or other material temporarily licensed by E&S. Company shall
keep Software at the ship-to address described in Attachment A. Company
shall not move Software without the prior written consent of E&S.
3. PROTECTION AND SECURITY OF SOFTWARE. Software is trade secret or
confidential information of E&S. Company:
(a) shall not make Software available in any form or disclose or permit
disclosure of Software, including any portion thereof, or the methods
or concepts utilized therein, to anyone except employees of Company
whose job performance requires such access;
(b) shall take appropriate action to protect the confidentiality of
Software and to ensure that any person permitted access to Software
does not provide or disclose it to others;
(c) shall not reverse-assemble, reverse-compile, or otherwise
reverse-engineer Software, in whole or in part;
(d) shall not remove or obscure any notice or legend included in Software
or affixed to Software's medium or medium container; and
(e) shall, before recycling, discarding or disposing of any media
containing Software or any portion thereof, erase or otherwise destroy
such Software.
The provisions of this Section 3 shall survive the expiration or
termination of this agreement.
Page 21
4. EXPIRATION OR TERMINATION OF AGREEMENT. This Agreement shall expire or
terminate on the date specified in Attachment A. Company shall promptly
destroy or return Software to E&S and furnish to E&S a certificate signed
by an officer of Company stating that Software has been destroyed or
returned to E&S.
5. DISCLAIMER OF WARRANTY. SOFTWARE IS PROVIDED "AS IS" AND WITHOUT WARRANTY.
EXCEPT AS PROVIDED IN THE UNDERLYING AGREEMENT, E&S SHALL HAVE NO
OBLIGATION TO SUPPORT OR OTHERWISE MAINTAIN SOFTWARE. E&S MAKES NO
WARRANTIES, EXPRESS OR IMPLIED WITH RESPECT TO SOFTWARE INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
6. LIMITATION OF LIABILITY. E&S SHALL NOT BE LIABLE FOR ANY PROPERTY DAMAGE,
PERSONAL INJURY, LOSS OF PROFITS, INTERRUPTION OF BUSINESS, OR FOR ANY
OTHER SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES, HOWEVER CAUSED, WHETHER
FOR BREACH OF WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT
LIABILITY OR OTHERWISE.
Page 22
Attachment A
to the
TEMPORARY SOFTWARE LICENSE AGREEMENT
Term: ________ to ________
Qty Part Number Description Platform Host ID#
-------------------------------------------------------------------------------
COMPANY E&S
By: By:
------------------------------------- -----------------------------
(Authorized Representative) (Authorized Representative)
Name: Name:
(Print or Type) (Print or Type)
Title: Title:
Date: Date:
Page 23
EXHIBIT E
ESCROW AGREEMENT
Effective January 22, 1999, this Escrow Agreement is entered into by E&S, with
its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
(E&S) and Company, with its principal place of business at ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
#▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (Company), and U.S. Bank National Association
(Escrow Agent) whose address is ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇.
RECITALS
Company has agreed to provide E&S with software programs in object code form,
and related documentation (Software Programs) pursuant to the certain dated January 22, 1999 between E&S and Company (Underlying
Agreement). Except as otherwise indicated, all capitalized terms in this
Agreement have the same meaning as defined in the Underlying Agreement. Pursuant
to the terms of the Underlying Agreement, Company has also agreed to provide
support services for Software Programs (Support Services). E&S relies upon the
continuing availability of Software Programs and Support Services to E&S in
performing its obligations under the Underlying Agreement.
This Escrow Agreement provides assurance to E&S of the ability to access source
code for Software Programs (Source Code) upon the occurrence of the events
described in this Escrow Agreement.
AGREEMENT
E&S, Company and Escrow Agent agree as follows:
1. DEPOSIT OF SOURCE CODE.
1.1 Date of Deposit. Prior to or concurrently with the delivery of the
initial copy of any Software Programs to be provided under the
Underlying Agreement, Company shall deposit and Escrow Agent shall
accept, for storage purposes only, the buildable Source Code of each
Software Program. Deposit shall be made at ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
1.2 Source Code, Updates and Enhancements. Source Code shall include
copies of all current source code lines, comment lines, write ups,
flow charts, structure diagrams, and debugging tools along with any
other related materials necessary to allow a reasonably skilled E&S
programmer to maintain, build and update the object code versions of
Software Programs without the help of any other person or reference to
any other material. Source Code and all updates shall consist of, at a
minimum, the following:
(a) one copy of each Software Program in a language and form readable
and understandable by a human and encoded on a magnetic medium
capable of generating a copy on printed paper;
Page 24
(b) one copy of all related documentation including, without
limitation, programmer's guides and manuals;
(c) a description of the commercially available programs that
generate Software Programs from the respective Source Code
images;
(d) one copy of each script that generates a successful build of
Software Programs from the respective Source Code images;
(e) any other programs not commercially available that are required
to generate Software Programs from the respective Source Code
images;
(f) for each Software Program, a copy of a transcript of a successful
object code build from the Source Code; and
(g) proprietary licensing software or buildable software without
licensing protection.
1.3 List of Source Code. A list of Source Code currently on deposit with
Escrow Agent will be attached as Attachment 1 to this Escrow Agreement
upon deposit of the Source Code. This list will be supplemented and
updated by Company and Company shall provide E&S and Escrow Agent with
copies of new lists with each future deposit of Source Code. For each
deposit, Escrow Agent will issue receipts to Company and E&S.
1.4 Updates. During the term of this Escrow Agreement, Company shall keep
the Source Code in escrow current by depositing the Source Code of any
release or update or revision of a Software Program that is provided
or to be provided under the Underlying Agreement prior to the delivery
of the initial copy of any such release, update or revision. Such
periodic deposits shall contain each and every bug fix, update,
correction, program option, enhancement or revision of the Software
Programs provided or to be provided under the Underlying Agreement.
With each periodic deposit an officer of Company shall certify in a
notarized written document, subject to the penalty of perjury, that
the Source Code deposited conforms to the requirements of this Escrow
Agreement.
1.5 Verification. At the site of the deposit and at its own cost, E&S may
appoint a mutually agreeable third party to inspect, test and review,
but not copy, the original and every subsequent deposit of the Source
Code in escrow at the time of the deposit and at other reasonable
times to verify that the deposited materials are the basis for the
Software Programs.
2. TITLE TO MEDIA AND SOURCE CODE. Subject to the terms of this Escrow
Agreement, title to the media upon which the Source Code is written or
stored is and shall be irrevocably vested in E&S when Source Code is
deposited with and retained by the Escrow Agent. Notwithstanding the
foregoing, Company will retain ownership of all intellectual property
contained on the media, including all copyright, trade secret, patent or
other intellectual property rights subsisting in such Source Code.
Page 25
3. RELEASE OF SOURCE CODE TO E&S. The copy of the Source Code on deposit in
escrow pursuant to this Escrow Agreement shall be released to E&S only in
accordance with the terms of this Escrow Agreement.
3.1 Automatic Release Events.
(a) Bankruptcy. If Company is under any proceeding under the United
States Bankruptcy Code (the "Code") and the trustee in bankruptcy
of Company, or Company, as a debtor in possession, rightfully
elects to reject the Underlying Agreement or this Escrow
Agreement, E&S shall so notify the Escrow Agent in writing,
providing evidence of the filing and such rejection, and Escrow
Agent shall promptly release the Source Code to E&S.
(b) Sale or Acquisition of Company by a competitor to E&S. If E&S
elects to terminate the Underlying Agreement pursuant to Section
16.4 of the Underlying Agreement, E&S shall have the option to
purchase a fully-paid, perpetual, irrevocable license to the
Source Code for continued use as defined in this Agreement. The
amount paid by E&S to Company for this license will not exceed
the greater of three times the royalties paid by E&S to Company
in the past 12 months or $2,500,000. If E&S elects to exercise
this option, E&S shall notify the Escrow Agent in writing and,
upon receipt of such notice, the Escrow Agent shall promptly
release the Source Code to E&S.
3.2 Failure to Meet Obligations. If E&S concludes in good faith that
Company or Company's successor in interest has failed or is
substantially unable to provide Software Programs or support services
as required by the Underlying Agreement for any reason, including
insolvency of Company as defined in Article 1-201(23) of the Uniform
Commercial Code, E&S shall so notify Company in writing (Deficiency
Notice), specifying in reasonable detail the basis for E&S' good faith
conclusion that Company has failed to or is unable to provide Software
Programs or support services. E&S shall serve a copy of the Deficiency
Notice simultaneously upon the Escrow Agent.
(a) For a period of 30 days after service of the Deficiency Notice
(Cure Period), Company shall have the right to cure the alleged
deficiencies and shall correspond with and deal directly with E&S
as directed in the Deficiency Notice.
(b) If, at the end of the Cure Period, E&S believes in good faith
that the alleged deficiency with respect to the Software Programs
or support services has not been cured, E&S shall notify Company
and the Escrow Agent in writing, specifying in reasonable detail
the deficiency and make a formal demand that the Escrow Agent
release the Source Code to E&S (Demand Notice). Upon receipt of
the Demand Notice, the Escrow Agent shall promptly release the
Source Code to E&S.
3.3 Improper Request for Release. If Company disagrees with the Demand
Notice or believes that any request by E&S for release of Source Code
Page 26
pursuant to this section is improper, Company shall have the right to
pursue any remedy available to it at law, subject to Section 5;
provided, however, that Company shall not have the right to prevent
Escrow Agent's release of the Source Code to E&S as provided by this
section.
4. IRREPARABLE HARM. Company and E&S acknowledge and agree that E&S will
suffer irreparable harm in the event release of the Source Code to E&S is
wrongfully delayed by Company, and that E&S may obtain injunctive relief to
prevent Company from taking any action that may delay the release
unjustifiably. Exercise of any remedy provided Company in this Escrow
Agreement shall not be considered an unjustifiable objection to release of
Source Code.
5. DISPUTES. In the event of any dispute involving the release of the Source
Code under Section 3.2, authorized representatives of Company and E&S shall
meet pursuant to Section 17.3 of the Underlying Agreement.
6. LICENSE OF SOURCE CODE. If the Source Code is delivered out of escrow to
E&S pursuant to Section 3, E&S shall be licensed by Company, and Company
does so grant E&S a fully-paid, perpetual, irrevocable license to the
Source Code with a right to sublicense Software Programs to third parties,
subject to the conditions of this Escrow Agreement and the Underlying
Agreement and only to pursue business in the initial target market defined
in Exhibit F, without payment of any further license fees from E&S to
Company. The license entitles E&S to grant sublicenses of Software Programs
to third parties and to use, copy, modify, maintain and update the Source
Code in all such respects as may be necessary for E&S to maintain and
update Software Programs.
7. TECHNOLOGY TRANSFER. If the Source Code is delivered out of escrow to E&S
pursuant to Section 3, Company will facilitate the transfer of technology
to E&S by providing no-cost access to engineers who are thoroughly
knowledgeable with the Source Code for a period of up to 2 months. If
Company is in Bankruptcy, E&S will pay the actual costs for Company
engineers to transfer the technology.
8. CONFIDENTIALITY AND USE OF SOURCE CODE. Upon release of the Source Code to
E&S pursuant to this Escrow Agreement, E&S shall preserve the Source Code
in confidence in accordance with the same degree of care practiced by it to
safeguard its proprietary source code against unauthorized use and
disclosure, and shall use the Source Code only as authorized under this
Escrow Agreement and the Underlying Agreement. These obligations do not
apply to the Source Code to the extent that such materials:
(a) are rightfully received by E&S from a third party who has a right to
disclose such materials;
(b) are independently developed by E&S without use of the Source Code;
(c) are or become publicly available through no wrongful act of E&S;
(d) are already known by E&S prior to the date of release of the Source
Code to E&S;
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(e) are disclosed to a third party by Company without restrictions on use
or disclosure, or
(f) are approved for release in writing by an authorized representative of
Company.
This section shall survive the termination of this Escrow Agreement for a
period of five years.
9. ESCROW AGENT FEES AND RESPONSIBILITIES.
9.1 Fees. E&S shall pay to Escrow Agent, in advance, fees at the standard
rate prescribed from time to time by Escrow Agent for performance of
services under this Escrow Agreement.
9.2 No Duty to Inquire. Escrow Agent shall not be required to inquire into
the truth of any statements or representations contained in any
notices, certificates or other documents required or otherwise
provided hereunder, and shall be entitled to assume that the
signatures on such documents are genuine, that the persons signing on
behalf of any party thereto are duly authorized to execute the same,
and that all actions necessary to render any such documents binding on
the party purportedly executing the same have been duly undertaken.
9.3 Right to Require Additional Documents. Without in any way limiting the
other terms of this Amendment, Escrow Agent may in its discretion
require from Company or E&S additional documents which it deems to be
necessary or desirable in the course of performing its obligations
under this Escrow Agreement.
9.4 No Liability. Both Company and E&S release Escrow Agent from and
against any and all liability to them for losses, damages, and
expenses, including attorneys' fee, that may be incurred by them on
account of Escrow Agent's compliance in good faith with the terms of
this Escrow Agreement.
10. NOTICES. Notices, demands and other communications under this Escrow
Agreement shall be in writing, and shall be delivered by registered or
certified mail, return receipt requested, to the intended recipient at the
address set forth below, or to such other address as such recipient shall
have designated by notice to the sending party. Notices shall be deemed to
have been given and received when signed for on the return receipt.
If to Company: If to E&S:
Attn: President General Manager
Company Synthonics Technologies, Inc. E&S Pixel Products Division
31324 Via Colinas #106 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇)▇▇▇-▇▇▇▇ FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Page 28
If to Escrow Agent:
Attn: Escrow Officer - ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
11. TERMINATION. On the effective termination date of the Underlying Agreement,
this Escrow Agreement will also be terminated. Otherwise this Escrow
Agreement may not be terminated or modified except in writing signed by
Escrow Agent, Company and E&S. Upon termination of this Escrow Agreement
Escrow Agent shall return Source Code to Company and title to the actual
copies of Source Code deposited shall revert to Company upon delivery. The
foregoing shall not apply to rejection of the Underlying Agreement in a
bankruptcy proceeding as contemplated in Section 3.1(a) hereof, nor shall
it affect rights acquired by E&S pursuant to Section 6 hereof prior to such
termination.
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement by their duly
authorized representatives as of the date or dates set forth below.
COMPANY E&S
By: /S/ F. ▇▇▇▇▇▇▇ ▇▇▇▇ By: ▇▇▇▇▇▇ ▇. Aral
----------------------------------- ----------------------------------
(Authorized Representative) (Authorized Representative)
Name: F. ▇▇▇▇▇▇▇ ▇▇▇▇ Name: F. ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------- ----------------------------------
(Print or Type) (Print or Type)
Title: President & CEO Title: General Manager of
Pixel Productions Division
Date: 1/27/99 Date: Janaury 27, 1999
U.S. BANK NATIONAL ASSOCIATION
By: /S/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
(Authorized Representative)
Name: ▇▇▇ Galdraith
-----------------------------------
(Print or Type)
Title: Vice President
Date: 1/27/99
Page 29
ATTACHMENT 1
LIST OF SOURCE CODE DEPOSITED
Page 30
EXHIBIT F
EXCLUSIVITY PROVISIONS
Company will not embed or bundle its Software Programs to any other company for
the purpose of 3D Visualization in the initial target market of E&S until after
12/31/2000, so long as cumulative E&S license royalty payments to Company equal
or exceed the following:
Date Cumulative Licenses
-------------- ------------------------
12/31/1999 150
3/31/2000 300
6/30/2000 500
9/30/2000 1000
The initial target market of E&S is defined as planners, developers,
architects, and engineering firms performing these functions. 3D
Visualization is defined as photo-realistic, interactive investigation and
presentation of the visual impacts of proposed and planned changes in urban
and suburban environments. Reverse engineering and measurement extraction
applications are not included in the definition of 3D visualization.
If any of the above royalty payment milestones are not achieved by E&S,
Company will be free to market their 3D model creation technology directly
to other companies that supply to the initial target market.
Company will not disclose to other company that E&S is pursuing the initial
target market with a 3D Visualization product, until product is announced
by E&S, without the prior consent from E&S. Company will maintain the
confidentiality of E&S product plans.
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EXHIBIT G
SOFTWARE SUPPORT Responsibilities
Technical support for Support Customers using Software Programs will be provided
by E&S and Company as described below.
1. DEFINITIONS. The following definitions shall apply to this Exhibit.
1.1 "Backup Support" means the party responsible for all Error
Corrections, New Versions and product enhancements. The Backup Support
party is responsible for providing software and documentation New
Version masters to the other party for that party's distribution to
its Support Customers.
1.2 "Documentation Updates" means Error Corrections, updates, and changes
to documentation which keep it current with the Software Programs and
specifications. Company will provide core documentation and
Documentation Updates to E&S. E&S may customize documentation to meet
E&S requirements.
1.3 "Error Correction" means the development of a Workaround, Fix or New
Version of Software Programs which brings the product back into
specification or allows the Software Programs to be reasonably
convenient to use within the Support Customer's environment.
1.4 "First Line Support," means responding to the initial request for
support, determining the product being used, and as appropriate,
routing the issue to the Primary Support provider for resolution.
1.5 "Fix" means a change required in the Software Programs to make the
product perform in accordance with specifications or to correct a
Product Deficiency. A Fix may be provided by telephone, facsimile, or
software patch.
1.6 "New Version" means a new version of Software Programs or portions of
Software Programs and related documentation, which is distributed to
Support Customers and is intended to provide Fixes, Error Corrections,
new features, performance enhancements, and increased reliability,
performance, or capacity.
1.7 "Primary Support," means taking responsibility for the customer issue,
communicating regular status updates, using reasonable efforts to
determine the cause of the problem, or reproducing the problem, if
possible, and working directly with Support Customers on a Product
Report if required to resolve the problem. In addition, the Primary
Support provider will:
(a) explain product usage; or
(b) identify product problems and resolve or provide Workarounds or
Fixes; or
(c) ensure that the resolution of the Product Report or enhancement
request is satisfactory to the customer;
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(d) track and close all issues with Support Customers; and
(e) provide all New Versions to Support Customers.
1.8 "Product Deficiency" means a problem reported by Support Customers or
E&S where the behavior of the Software Programs is not as predicted by
the Software Programs functional specification or documentation, but
which significantly impact product usage. Product Deficiencies may
include bugs, non-compliance with standards, or problems which make
the software inconsistent or inconvenient to use, performance
significantly less than competitors, or capacity significantly less
than competitors.
1.9 "Product Report" means the form of documentation describing a request
for Error Correction.
1.10 "Support Services Sales" means selling support services to Support
Customers, including accepting a purchase order and paying support
fees to the other party as applicable.
1.11 "Workaround" means an alternative method to use Software Programs to
avoid Product Deficiencies. Workarounds provided to Support Customers
and E&S will include a description of the symptoms of the problem
fixed.
2. Support responsibility matrix. Support related activities for Software
Programs will be provided by the parties as follows:
Support Activity Party
Support Services Sales E&S
Error Correction Company
Documentation Updates Company
First Line Support E&S
Primary Support E&S
Backup Support Company
3. E&S' RESPONSIBILITIES. First Line and Primary Support for Support Customers
will be provided by E&S. E&S Support Engineers will attempt to diagnose all
incoming Product Reports, provide Fixes or Workarounds and refer problems
which require additional engineering of Software Programs to Company via
phone or email for resolution. E&S shall use reasonable efforts to ensure
that questions regarding training and use of Software Programs are not
directed to the Company technical support telephone line.
4. COMPANY'S RESPONSIBILITIES. Company shall provide Backup Support to E&S.
Such support shall include, without limitation, diagnostics,
troubleshooting, operation and service recommendations and answers to
general technical inquiries. The Company North American technical support
telephone number is (___) ___-______. The support line shall be available
between 8:00 am and 5:00 pm Pacific Time excluding weekends and holidays.
International technical support shall be available as agreed by the
parties. In addition:
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4.1 Notification of Product Deficiencies. Company shall acknowledge
receipt of notification of Product Deficiencies by E&S, within four
working hours of such notice. It may be necessary for E&S Support
Engineers to send problem descriptions, test cases, or problem files
to Company for final diagnosis and resolution. Company may request E&S
to submit a written Product Report documenting a Product Deficiency.
Company shall have the capability to receive files electronically via
email and FTP from E&S.
4.2 Test Cases. Any test case provided by E&S on behalf of a Support
Customer shall be disclosed to Company pursuant to the terms of the
CIEA attached as an exhibit to this Agreement.
4.3 Product Deficiency, Workarounds. Company shall report all known
Product Deficiencies and provide their Workarounds to E&S Customer
Support in written or electronic form as soon as such Workarounds are
available.
4.4 New Versions. Company shall provide New Versions of Software Programs
to E&S as soon as such versions are available. Each New Version of the
Software Programs shall be provided on mutually agreed to media and
shall include release notes, a listing of all Product Deficiencies and
Product Reports fixed, a listing of all open Product Deficiencies and
Product Reports, and a listing of all enhancements included in the New
Version.
4.5 Correction of Errors. Company will use best efforts to design, code
and implement programming changes and modifications to correct
reproducible errors in order to bring the software into conformance
with the specifications and performance standards.
4.6 Priority. The priority of an error will determine the response time
requirements. Company shall use its reasonable best efforts to correct
all bugs or Product Deficiencies in accordance with the resolution
times described below:
(a) Critical. Within two business days of notification by E&S and
receipt of file, Company will:
(i) provide a Workaround or Fix; or
(ii) if the Fix cannot be provided within two business days,
propose a date, subject to E&S' approval, when a Fix will be
provided; and in any event,
(iii)provide a Fix to the Support Customer within 30 calendar
days; and
(iv) fix the Product Deficiency in the next available New
Version.
(b) High. Within 14 calendar days of notification by E&S and receipt
of file, Company will:
(i) communicate the commitment to a Workaround or Fix
availability within 14 calendar days of notification, and
(ii) deliver the Fix in the next available New Version to the
Support Customer within 60 calendar days; or
Page 34
(iii)provide a Workaround or Fix within 60 calendar days and fix
the Product Deficiency in the next available New Version.
(c) Medium. Within four weeks of notification by E&S and receipt of
file, Company will:
(i) communicate the commitment to a Workaround or Fix and New
Version availability; and
(ii) deliver to such commitment.
(d) Low. Within six weeks of notification by E&S and receipt of file,
Company will:
(i) communicate the commitment to a Workaround or Fix and New
Version availability; and
(ii) deliver to such commitment.
4.7 Problem Priority. For purposes of this Exhibit, the priority level
which indicates the impact of the problem on the Support Customer is
defined below:
(a) Critical. The problem prevents use of Software Programs where use
of Software Programs is on Support Customer's critical path, no
Workaround exists for the problem, and use is mission critical to
the customer.
(b) High. The problem prevents use of Software Programs where use of
Software Programs will soon be on Support Customer's critical
path and no Workaround exists for the problem. If this problem is
not corrected in a timely fashion, it may become "critical".
(c) Medium. The problem impairs use of Software Programs where use of
Software Programs is on Support Customer's critical path, and a
Workaround exists; the Workaround process is tedious (impacts
productivity); or the problem prevents use of Software Programs
not on Support Customer's critical path, and no Workaround
exists. In either case, there is a significant impact on
productivity and the problem is seen by the Support Customer as a
major inconvenience. Or, a high volume of Support Customers is
affected. Or it is a chronic problem.
(d) Low. The problem impacts productivity and is seen by the Support
Customer as a minor inconvenience and an acceptable Workaround
exists for the problem. Other descriptors may include: nuisance;
easily worked around; annoyance; trivial; or the likelihood of
running into it elsewhere is very low and it is not a severe
problem.
4.8 Failure to Comply. If Company does not comply with this section 4
within a reasonable time, E&S shall give Company written notice of
such failure pursuant to this Agreement. In addition to its other
rights under this Agreement, E&S shall have the right to suspend
support payments to Company.
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