Exhibit 10.32

 

TECHNOLOGY LICENSE AGREEMENT

BETWEEN POINTDX AND VITAL IMAGES

 

This Technology License Agreement (“Agreement”) is effective as of July 13,
2001.  The Agreement is made and between PointDX, Inc. a Delaware corporation
located in Winston-Salem, North Carolina (“PDx”), and Vital Images, Inc., a
Minnesota corporation located in Plymouth, Minnesota (“VTAL”).

 

1.             PURPOSE OF THIS AGREEMENT.  PDX IS EXCLUSIVE LICENSEE WITH THE
RIGHT TO SUBLICENSE CERTAIN PATENTS (AS DEFINED BELOW) IN THE FIELD OF VIRTUAL
ENDOSCOPY GENERALLY AND MORE SPECIFICALLY, IN THE FIELD OF THREE-DIMENSIONAL
(3D) VISUALIZATION OF HOLLOW VISCUS ORGANS.  PDX HAS THE RIGHT TO GRANT THE
RIGHTS LICENSED HEREIN UNDER THOSE PATENTS.  VTAL SEEKS TO OBTAIN THOSE
LICENSES.

 

2.             DEFINITIONS.

A.            “VITREA PRODUCT” REFERS TO ANY VOLUME RENDERING SOFTWARE WITH 3D
IMAGING CAPABILITY.  REFERENCES TO “VITREA PRODUCT” ARE UNDERSTOOD TO REFER TO
AND ENCOMPASS VTAL’S PAST VITREA® SOFTWARE PRODUCTS, CURRENT VITREA PRODUCTS,
AND ANY FUTURE MODIFIED, ENHANCED, IMPROVED OR SUCCESSOR VITREA PRODUCTS.

 

B.            “PATENTS” MEANS THE PATENTS AND APPLICATIONS THEREFOR LISTED IN
EXHIBIT A HERETO, ANY FOREIGN COUNTERPARTS THERETO, WHETHER NOW OR HEREAFTER
ISSUED, ANY DIVISIONS, CONTINUATIONS, AND CONTINUATIONS-IN-PART BASED ON ANY
THEREOF, ANY PATENTS WHICH MAY ISSUE THEREFROM, AND ANY REISSUES OR EXTENSIONS
ON ANY THEREOF.

 

C.            “CT’ MEANS COMPUTED TOMOGRAPHY.

 

D.            “CT ENDOSCOPY APPLICATION” MEANS A SOFTWARE APPLICATION, WHETHER
INTEGRATED INTO AND LICENSED AS A PART OF A VITREA PRODUCT, OR LICENSED AS AN
OPTION TO A VITREA PRODUCT, PERMITTING WHEN USED IN CONJUNCTION WITH A VITREA
PRODUCT CT VIRTUAL ENDOSCOPY.

 

E.             “REX-RELATED FEATURES” MEANS THE TECHNOLOGY AND INVENTIONS FOR
REPORTING DIGITAL RADIOLOGY IMAGES BY CORRELATING THE RADIOLOGIST’S FINDINGS
WITH THE IMAGE DATA, IT BEING AGREED, HOWEVER, THAT FUNCTIONS AND FEATURES
CONTAINED IN ANY OF VTAL’S PAST OR CURRENT VITREA PRODUCTS, AS WELL AS ANY
SUBSTANTIALLY SIMILAR  FUNCTIONS AND FEATURES CONTAINED IN ANY FUTURE VITREA
PRODUCT, SHALL NOT BE DEEMED A “REX-RELATED FEATURE”.

 

F.             “LESION DETECTION AND LYMPH NODE FEATURES” MEANS THE TECHNOLOGY
AND INVENTIONS DISCLOSED IN THE PATENTS FOR COMPUTER-ASSISTED LESION DETECTION
TECHNOLOGY OR FOR LYMPH NODE TARGETING.

 

G.            “VC APPLIANCE” MEANS ANY VITREA PRODUCT THE PRINCIPAL
FUNCTIONALITY OF WHICH IS LIMITED TO CT VIRTUAL COLONOSCOPY.

 

3.             GRANT OF RIGHTS.  PDx grants VTAL a perpetual, non-exclusive
license to make, have made, use and grant sublicenses or otherwise distribute
(itself or through one or more sub-distributors), but only to a person or entity
then holding or simultaneously receiving a license to a Vitrea Product, any
inventions, whether methods, apparatus or otherwise, disclosed in the Patents,
which license shall be retroactively effective with respect to a Patent from the
date of issue of such Patent. VTAL acknowledges and agrees that this license
does not cover any rights to Lesion Detection and Lymph Node features or to
REX-related features.  PDx and VTAL agree, however, that they will negotiate in
good faith in the future in an effort to reach agreement on a license on
substantially equivalent terms to those then outstanding if VTAL should request
access to any Lesion Detection and Lymph Node features or to REX-related
features.

 

The parties agree and acknowledge that all intellectual property of either PDx
or VTAL, existing as of the date of this Agreement,shall remain the sole
property of that party.  The only rights granted in or to any of PDx’s
intellectual property are those granted by this Agreement.

 

4.             PAYMENTS AND ROYALTIES.  IN CONSIDERATION FOR THE RIGHTS GRANTED
IN THIS AGREEMENT, VTAL SHALL PAY PDX THE FOLLOWING SUMS IN THE FOLLOWING
MANNER.

 

A.            THE ONE-TIME SUM OF $750,000, PAYABLE AS FOLLOWS:  $500,000 WILL
BE PAID ON THE BUSINESS DAY FOLLOWING THE DATE THAT PDX DELIVERS TO VTAL COPIES
OF THE FOLLOWING TWO AGREEMENTS:  (I) ORIGINAL SIGNED AND DATED AGREEMENT WITH
WAKE FOREST UNIVERSITY (“WFU”) PURSUANT TO WHICH (I) WFU GRANTS TO PDX THE
LICENSE WITH RIGHT TO SUBLICENSE CERTAIN OF THE PATENTS LISTED IN EXHIBIT A
(“THE LICENSE AGREEMENT”), WHICH LICENSE AGREEMENT SHALL BE IN ALL MATERIAL
RESPECTS IN THE SAME FORM AS THE UNDATED, UNSIGNED FORM OF AGREEMENT BETWEEN
SUCH PARTIES E-MAILED BY PDX’S COUNSEL TO VTAL’S COUNSEL ON AUGUST 13, 2001 AND
(II) AN AGREEMENT UNDER WHICH WFU AND PDX AGREE THAT PATENT RIGHTS AS DEFINED IN
THE LICENSE AGREEMENT INCLUDE ALL PATENTS, PATENT APPLICATIONS, ETC. LISTED IN
EXHIBIT A HERETO AND THAT SECTION 3 OF THE LICENSE AGREEMENT AUTHORIZES PDX TO
GRANT THIRD PARTIES THE RIGHT TO GRANT FURTHER SUBLICENSES.  THE BALANCE OF THE
$750,000 WILL BE DUE ON THE FIRST AND SECOND ANNIVERSARY DATES OF THE AGREEMENT
IN THE AMOUNT OF $125,000 AND $125,000, RESPECTIVELY, PLUS INTEREST ACCRUED FROM
THE DATE HEREOF THROUGH THE DATE OF PAYMENT AT 8% PER ANNUM.  VTAL MAY PREPAY IN
WHOLE OR IN PART SUCH BALANCE WITHOUT PREMIUM OR PENALTY.  IT IS AGREED AND
UNDERSTOOD THAT THE $500,000 PAYMENT AT THE SIGNING OF THE AGREEMENT WILL BE IN
COMPENSATION FOR , AMONG THE OTHER RIGHTS AND LICENSES SET FORTH HEREIN, VTAL’S
RIGHT, AFTER THE AGREEMENT IS SIGNED, TO RETROFIT ANY VITREA PRODUCTS NOW OR
HEREAFTER (BUT ON OR BEFORE AUGUST 31, 2001) INSTALLED WHICH DO NOT CONTAIN A CT
ENDOSCOPY APPLICATION DEVELOPED BY OR FOR VTAL AFTER THE DATE HEREOF WITH A
VERSION OF THE VITREA PRODUCTTHAT INCLUDES A CT ENDOSCOPY APPLICATION DEVELOPED
BY OR FOR VTAL AFTER THE DATE HEREOF WITHOUT THE OBLIGATION TO MAKE ANY PAYMENT
PURSUANT TO SECTION 4.B, BUT WITHOUT PREJUDICE TO THE PAYMENT OBLIGATION SET
FORTH IN SECTION 4.D.

 

B.            Subject to Section 4.A, for a period of (____) years, beginning
with the date of this Agreement, VTAL will pay PDx a royalty of $________ for
each grant of a license to a Vitrea Product by VTAL when and as a CT Endoscopy
Application developed by or for VTAL after the date hereof is also licensed by
VTAL for use with such Vitrea Product (recognizing that such CT Endoscopy
Application may, but is not required to be, integrated into such Vitrea
Product); provided that no royalty is due under this Section 4.B if a royalty is
paid under Section 4.C with respect to the same product.

 

C.            FOR A PERIOD OF (____) YEARS, BEGINNING WITH THE DATE OF THE
AGREEMENT, VTAL WILL PAY PDX A ROYALTY OF $_______ FOR EACH GRANT OF A LICENSE
BY VTAL TO A VC APPLIANCE.

 

D.            FOR ALL LICENSES OF A VITREA PRODUCT IN EXCESS OF ______ THAT VTAL
SELLS BETWEEN DECEMBER 1, 2000 AND AUGUST 31, 2001 AND WITH RESPECT TO WHICH NO
ROYALTY IS DUE UNDER SECTIONS 4.B OR 4.C HEREOF , VTAL WILL PAY PDX THE SUM OF
$______.

 

E.             NOTWITHSTANDING ANY OTHER TERM HEREOF, NO ROYALTY SHALL BE DUE
UNDER SECTION 4.B, 4.C OR 4.D WITH RESPECT TO ANY LICENSE GRANT FOR WHICH VTAL
RECEIVES NO MONETARY CONSIDERATION, SUCH AS LICENSE GRANTS FOR DEMONSTRATION AND
MARKETING PURPOSES.

 

F.             UNLESS OTHERWISE AGREED TO IN WRITING BY THE PARTIES, ALL ROYALTY
PAYMENTS CALLED FOR IN THIS AGREEMENT SHALL BE PAID WITHIN SIXTY (60) DAYS OF
THE END OF THE QUARTER IN WHICH VTAL RECOGNIZES IN ACCORDANCE WITH GENERALLY
ACCEPTED AUDITING PRINCIPLES (GAAP) THE REVENUE FROM THE SALE OF THE SUBJECT
LICENSE TO A THIRD PARTY.

 

5.             ACCOUNTING AND AUDIT RIGHTS.  VTAL AGREES TO KEEP COMPLETE, TRUE,
AND ACCURATE BOOKS, ACCOUNTS, AND RECORDS FOR THE PURPOSE OF SHOWING THE
ROYALTIES DUE AND OWING TO PDX.  A FIRM OF CERTIFIED PUBLIC ACCOUNTANTS
DESIGNATED BY PDX AND APPROVED BY VTAL, WHICH APPROVAL MAY NOT BE UNREASONABLY
WITHHELD, SHALL HAVE THE RIGHT TO AUDIT THOSE BOOKS, ACCOUNTS, AND RECORDS UPON
REASONABLE ADVANCE WRITTEN NOTICE AND SO AS TO NOT UNREASONABLY INTERFERE WITH
THE ON-GOING OPERATIONS OF VTAL NOT MORE THAN ONCE ANNUALLY.  PDX SHALL BEAR THE
COST OF ANY SUCH ACCOUNTING, UNLESS THE ACCOUNTING SHOWS A DISCREPANCY IN PDX’S
FAVOR OF MORE THAN 10%, IN WHICH CASE VTAL SHALL BE RESPONSIBLE FOR ALL COSTS
AND EXPENSES RELATED TO THE AUDIT.  PDX AGREES TO TREAT VTAL’S BOOKS, ACCOUNTS,
AND RECORDS AS CONFIDENTIAL AT ALL TIMES.

 

6.             SOFTWARE DEVELOPMENT.  VTAL SHALL BEAR THE COSTS OF ALL SOFTWARE
DEVELOPMENT FOR THE BENEFIT OF THE FUTURE VITREA PRODUCT AND OTHER FUTURE
SOFTWARE PRODUCTS OF VTAL.  PDX WILL PROVIDE REASONABLE TECHNICAL SUPPORT VIA
TELEPHONE, E-MAIL, OR ON-SITE MEETINGS TO BE HELD IN WINSTON-SALEM, NORTH
CAROLINA FOR A MAXIMUM PERIOD OF TWELVE MONTHS (UP TO 2 HOURS PER DAY AND A
CUMULATIVE TOTAL OF 180 MAN-HOURS) FROM THE DATE OF THIS AGREEMENT.  THE
TECHNICAL SUPPORT WILL BE SUFFICIENT TO ALLOW VTAL TO INCORPORATE CT ENDOSCOPY
AND VC APPLIANCE IMPROVEMENTS, BUT IN NO CASE WILL EXCEED THE 180 HOURS
MAXIMUM.  THE COST OF ALL TRAVEL, AND THE COST OF ANY MEETINGS HELD OUTSIDE OF
WINSTON-SALEM, NORTH CAROLINA WILL BE BORNE BY VTAL.  VTAL WILL HAVE LIMITED
ACCESS AS REASONABLY REQUESTED BY IT TO THE SOFTWARE CODE DEVELOPED BY PDX IN
RELATION TO THE SUBJECT MATTER OF THE PATENTS, AND ONLY AS NECESSARY TO ALLOW
VTAL TO DEVELOP THE NECESSARY SOFTWARE CODE, INCLUDING INCORPORATION THEREIN OF
PDX SOFTWARE CODE, FOR THE CT ENDOSCOPY APPLICATION AND THE VC APPLIANCE AND FOR
SUBMISSION TO THE U.S. FOOD AND DRUG ADMINISTRATION (FDA) FOR MARKETING
CLEARANCE.

7.          REGULATORY FILINGS.  PDxwill support VTAL’s FDA regulatory filings
necessary for distribution approval/release in the United States and clinical
validation work for the CT Endoscopy Application and the VC Appliance for a
period of one (1) year following the date of this Agreement (provided that PDx
will use commercially reasonably efforts to provide additional support following
such one (1) year period in the event such approval/release is not obtained in
such one (1) year period), by providing the data set forth below.

 

A.            PDX WILL PROVIDE ALL RELEVANT CLINICAL DATA FROM 100 VIRTUAL
COLONOSCOPY DIAGNOSTIC OR COMPARATIVE STUDIES (“THE DATA”), INCLUDING THE
INFORMED CONSENT DOCUMENTS FOR EACH STUDY TO SUPPORT AN FDA SUBMISSION FOR THE
COLON-RELATED CT ENDOSCOPY APPLICATION AND THE VC APPLIANCE, AND TO VALIDATE THE
ENDOSCOPY PROTOCOL AND VC APPLIANCE.  THE DATA WILL BE DELIVERED ON CDS
CONTAINING CT IMAGES, EXCEPT FOR THE INFORMED CONSENT DOCUMENTS AND MEDICAL
REPORTS, WHICH WILL BE DELIVERED ON PAPER.

 

B.            PDX WILL SEND 5 REPRESENTATIVE SETS OF CLINICAL DATA TO VTAL FOR
THE PURPOSE OF ALLOWING VTAL TO EVALUATE THE EFFICACY OF USING PDX’S DATA FOR AN
FDA SUBMISSION BY VTAL.  PDX WILL ALSO FURNISH COPIES OF THE NATIONAL SCIENCE
FOUNDATION (NSF) AND WAKE FOREST AGREEMENTS, OR OTHER REASONABLY EVIDENCE OF THE
GRANTING OF RIGHTS TO THE DATA TO PDX.  IF VTAL DETERMINES THAT THE PDX CLINICAL
DATA WILL BE SATISFACTORY IN SUPPORTING VTAL’S FDA SUBMISSION, PDX WILL PROVIDE
AN ADDITIONAL 95 COMPARABLY REPRESENTATIVE DATA SETS TO VTAL FOR USE IN VTAL’S
FDA SUBMISSION.  VTAL RESERVES THE RIGHT TO DECLINE THE PURCHASE AND USE OF THE
DATA, IF VTAL DEEMS IT INADEQUATE FOR FDA SUBMISSION.  IF VTAL DECLINES TO
PURCHASE AND USE THE DATA, PDX HAS NO OBLIGATION TO SUPPORT OR ASSIST WITH
VTAL’S FDA SUBMISSION FURTHER, AND VTAL AGREES TO PROMPTLY RETURN ALL DATA AND
DOCUMENTS RELATED TO THE FIVE TEST CASES.

 

C.            VTAL WILL PAY PDX $________ FOR THE DATA, WITH $______ DUE WITHIN
TEN (10) DAYS AFTER THE DATA HAVE BEEN DELIVERED TO VTAL, AND THE $______
BALANCE PAYABLE TO PDX UPON FDA CLEARANCE OF THE CT ENDOSCOPY APPLICATION OR VC
APPLIANCE, WHICHEVER IS ISSUED FIRST.  VTAL WILL NOT HAVE ANY RIGHTS TO SELL,
USE, OR DISTRIBUTE THE DATA OUTSIDE THAT USE NECESSARY TO SUPPORT THE FDA
REGULATORY FILINGS.

8.             MUTUAL REPRESENTATION AND WARRANTIES.

A.            PDX AND VTAL HEREBY EACH REPRESENT AND WARRANT TO THE OTHER AS
FOLLOWS.

1.                    THAT IT IS A LEGAL ENTITY DULY ORGANIZED AND VALIDLY
EXISTING UNDER THE LAWS OF THE JURISDICTION OF ITS ORGANIZATION, HAS ALL
REQUISITE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS, AND IS AUTHORIZED TO
ENTER INTO THIS AGREEMENT AND GRANT THE RIGHTS OR ACCEPT THE OBLIGATIONS HEREIN,
WHICH REPRESENTATION AND WARRANTY EXTENDS IN THE CASE OF PDX, A REPRESENTATION
AND WARRANTY THAT IT HAS THE LEGAL RIGHT AND POWER, WITHOUT ANY AUTHORIZATION
FROM ANY THIRD PARTY NOT ALREADY POSSESSED BY IT, TO GRANT THE LICENSES AND
RIGHTS TO SUBLICENSE SET FORTH IN SECTION 3 HEREOF AND HAS NOT MADE AND WILL NOT
MAKE ANY COMMITMENT TO OTHERS INCONSISTENT OR IN DEROGATION OF SUCH RIGHT.

2.             THAT IT HAS NO KNOWLEDGE OF ANY ACTION, SUIT, OR PROCEEDING,
WHETHER PENDING OR THREATENED, WHICH MAY HAVE AN ADVERSE EFFECT UPON THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

3.             BY ENTERING INTO THIS AGREEMENT, IT WILL NOT RESULT IN A BREACH
OF OR CONSTITUTE A DEFAULT UNDER, ANY OTHER EXISTING AGREEMENTS, CONTRACT OR
OTHER DOCUMENT TO WHICH IT IS A PARTY.

 

9.             CHANGE OF CONTROL OF VTAL.  IF ANOTHER ENTITY OR COMPANY ACQUIRES
50% OR MORE OF VTAL DURING ANY TIME WHEN THIS AGREEMENT IS IN EFFECT, VTAL WILL
HAVE THE RIGHT TO ASSIGN THE AGREEMENT SO LONG AS THE ACQUIRING COMPANY AGREES
TO ASSUME THE ROYALTY PAYMENT STRUCTURE OF THE AGREEMENT.  UPON THE EFFECTIVE
DATE OF ANY CHANGE IN CONTROL, HOWEVER, THE MINIMUM ROYALTY PAYMENT REQUIRED
UNDER PARAGRAPH 4 (B) OF THIS AGREEMENT SHALL BE INCREASED BY $           ,
UNLESS THE ACQUIRING COMPANY IS ALREADY LICENSED UNDER ANY OF THE PATENTS.

 

10.           TERM AND TERMINATION.  THE LICENSE GRANTED UNDER THIS AGREEMENT IS
PERPETUAL.  THE OBLIGATION TO PAY ROYALTIES UNDER THIS AGREEMENT SHALL TERMINATE
ON THE 10TH ANNIVERSARY OF THIS AGREEMENT, UNLESS THE PATENTS ARE FOUND INVALID
OR UNENFORCEABLE IN A FINAL, NON-APPEALABLE JUDGMENT ENTERED IN A COURT OF THE
UNITED STATES.

 

A.            VTAL AGREES THAT IT WILL NOT COOPERATE WITH, ASSIST IN, OR
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF ANY OF THE PATENTS TO THE EXTENT
LICENSED HEREUNDER SO LONG AS THIS AGREEMENT REMAINS IN EFFECT.  IT SHALL NOT BE
A BREACH OF THE FOREGOING OBLIGATION TO SATISFY THE REQUIREMENTS OF LAW,
INCLUDING ACTIONS TAKEN TO COMPLY WITH THE LAWFUL ORDERS OR PROCESSES OF COURTS
AND OTHER GOVERNMENT AGENCIES.  IF VTAL RECEIVES ANY SUBPOENA OR OTHER LEGAL
PROCESS THAT PURPORTS TO REQUIRE OR COMPEL SUCH COOPERATION, ASSISTANCE, OR
CHALLENGE, VTAL SHALL GIVE PDX PROMPT WRITTEN NOTICE THEREOF.  DURING THE TERM
OF THIS AGREEMENT OR SO LONG AS VTAL IS PAYING ROYALTIES UNDER THIS AGREEMENT,
PDX AGREES TO VIGOROUSLY ENFORCE ITS RIGHT UNDER THE PATENTS.

B.            VTAL reserves the right to terminate this Agreement at any time
and cease paying royalties hereunder, upon written notice to PDx.  In the event
of such termination, PDx has the right to enforce the Patents against VTAL in
any proceeding.

 

C.                   SHOULD VTAL FAIL TO FULFILL IN ANY MATERIAL RESPECT ANY OF
ITS OBLIGATIONS UNDER THIS AGREEMENT, WHICH FAILURE SHALL REMAIN UNCURED FOR 30
DAYS FOLLOWING WRITTEN NOTICE THEREOF FROM PDX TO VTAL, PDX SHALL BE ENTITLED TO
TERMINATE THIS AGREEMENT UPON WRITTEN NOTICE TO VTAL.

11.           SURVIVAL.  THE FOLLOWING OBLIGATIONS SURVIVE THE TERMINATION OF
THIS AGREEMENT.

A.            VTAL’S OBLIGATION UNDER PARAGRAPH 5 OF THIS AGREEMENT TO MAINTAIN
TRUE, CORRECT, AND ACCURATE REPORTS COVERING THE TIME PERIOD UP TO THE DATE OF
TERMINATION, SO THAT PDX CAN, AS REQUESTED, AUDIT THOSE REPORTS;

 

B.            PDX’ S RIGHT TO RECEIVE PAYMENTS, FEES, AND ROYALTIES ACCRUED OR
ACCRUABLE FOR PAYMENT PRIOR TO SUCH TERMINATION;

 

C.            ANY CAUSE OF ACTION OR CLAIM OF EITHER PARTY, ACCRUED OR TO
ACCRUE, FOR BREACH OF ANY OF THE TERMS OF THIS AGREEMENT;

 

D.            ALL SUBLICENSES GRANTED PRIOR TO THE DATE OF TERMINATION OF BY
VTAL TO A CT ENDOSCOPY APPLICATION AND/OR A VC APPLIANCE; AND

 

E.             ANY OTHER RIGHT OR OBLIGATION OF EITHER PARTY UNDER ANY OTHER
SECTION OF THIS AGREEMENT.

 

12.           NON-DISCLOSURE.  EACH PARTY REPRESENTS AND WARRANTS THAT NEITHER
IT NOR ITS DIRECTORS, OFFICERS, AGENTS AND ATTORNEYS HAVE PUBLICIZED OR
DISCLOSED TO ANYONE, AND IT AGREES NOT TO (AND AGREES NOT TO PERMIT ITS
DIRECTORS, OFFICERS, AGENTS AND ATTORNEYS TO) PUBLICIZE OR DISCLOSE (EXCEPT
PURSUANT TO A SIGNED CONFIDENTIALITY AGREEMENT) TO ANYONE: (I) THE TERMS AND
CONDITIONS OF THIS AGREEMENT, (II) THE SUBSTANCE OF OR CIRCUMSTANCES SURROUNDING
THE NEGOTIATION OF THIS AGREEMENT, OR (III) THE AMOUNTS OR RANGE OF AMOUNTS
AGREED TO BE PAID BY VTAL PURSUANT TO THIS AGREEMENT.  THE PARTIES AGREE THAT
PROMPTLY FOLLOWING THE DATE HEREOF THEY SHALL MAKE A JOINT PRESS RELEASE IN THE
FORM OF EXHIBIT B HERETO, AND THEREAFTER SHALL MAKE NO FURTHER PRESS RELEASES
REGARDING THIS AGREEMENT WITHOUT THE CONSENT OF THE OTHER, WHICH CONSENT WILL
NOT BE UNREASONABLY WITHHELD.  IT SHALL NOT BE A BREACH OF THE FOREGOING
OBLIGATION AS TO NON-DISCLOSURE AND PRESS RELEASES TO MAKE DISCLOSURES
CONSISTENT IN CONTENT AND SCOPE WITH THE INITIAL PRESS RELEASE OR AS MAY BE
NECESSARY (A) AS TO THE NON-DISCLOSURE OBLIGATION ONLY, IN CONNECTION WITH THE
PREPARATION OF A PARTY’S TAX RETURNS OR FINANCIAL RECORDS; (B) IN ORDER TO
SATISFY THE REQUIREMENTS OF LAW; (C) IN ORDER TO COMPLY WITH THE LAWFUL ORDERS
OR PROCESSES OF COURTS AND OTHER GOVERNMENT AGENCIES; OR (D) IN ORDER TO ENFORCE
OR COMPLY WITH THIS AGREEMENT.  IF EITHER PARTY RECEIVES ANY SUBPOENA OR OTHER
LEGAL PROCESS THAT PURPORTS TO REQUIRE OR COMPEL INFORMATION THAT IS PROTECTED
UNDER THIS AGREEMENT, IT SHALL GIVE THE OTHER PARTY PROMPT WRITTEN NOTICE
THEREOF.

 

13.           MISCELLANEOUS.

A.            VTAL SHALL HAVE THE RIGHT TO GRANT SUBLICENSES WITH RESPECT TO ANY
OF THE RIGHTS GRANTED HEREUNDER.

 

B.            NO WAIVER OR MODIFICATION OF ANY OF THE TERMS OF THIS AGREEMENT
SHALL BE VALID UNLESS IN WRITING.  NO WAIVER BY EITHER PARTY OF A BREACH OR
DEFAULT OF THIS AGREEMENT SHALL BE DEEMED A WAIVER OF ANY FUTURE BREACH OR
DEFAULT.

 

C.            WHENEVER NOTICE IS REQUIRED TO BE GIVEN UNDER THIS AGREEMENT, A
WRITING SIGNED BY THE PARTY SERVING SUCH NOTICE AND MAILED BY CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO THE OTHER PARTY, SHALL BE DEEMED GOOD AND
SUFFICIENT NOTICE.  SUCH NOTICES SHALL BE ADDRESSED TO THE PARTIES AT THE LAST
KNOWN ADDRESSES, BUT EITHER PARTY MAY CHANGE SUCH ADDRESS BY GIVING THE OTHER
PARTY NOTICE THEREOF IN THE MANNER HEREIN SET FORTH.

 

D.            THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NORTH CAROLINA.  ANY DISPUTES REGARDING THIS AGREEMENT SHALL BE
RESOLVED BY AN ACTION FILED IN THE COURTS OF THE STATE OF NORTH CAROLINA.

 

E.                   THIS AGREEMENT CONTAINS THE ENTIRE UNDERSTANDING OF THE
PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF.  THERE ARE NO
REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, OR UNDERTAKING OTHER THAN
THOSE HEREINABOVE CONTAINED.  THIS AGREEMENT CANNOT BE MODIFIED EXCEPT BY A
SEPARATE WRITTEN AGREEMENT SIGNED BY BOTH PARTIES (OR THEIR REPRESENTATIVES) TO
THIS AGREEMENT

 

 

 

/s/  Albert Emola

 

Albert Emola

 

President

 

Vital Images, Inc.

 

 

 

/s/  David J. Vining, M.D.

 

David J. Vining, M.D.

 

Chief Executive Officer

 

PointDX, Inc.

 

EXHIBIT A

 

1.             UNITED STATES PATENT NO. 5,782,762, ISSUED ON JULY 21, 1998, FROM
PATENT APPLICATION SERIAL NO. 08/331,352, FILED ON OCTOBER 27, 1994.

 

2.             PCT PATENT APPLICATION SERIAL NO. PCT/US95/14022, FILED ON
OCTOBER 27, 1995 (BASED ON UNITED STATES PATENT APPLICATION SERIAL NO.
08/331,352).

 

•       Australian Patent Application No. 41380/96, with an International Filing
Date of October 27, 1995.

 

•       European Patent Application No. 95939644.1, with an International Filing
Date of October 27, 1995.

 

•       Japanese Patent Application No. 8-514803, with an International Filing
Date of October 27, 1995.

 

•       Canadian Patent Application No. 2,202,401, with an International Filing
Date of October 27, 1995.

 

•       United States Patent No. 6,083,162, issued on July 4, 2000, from
National Phase Patent Application Serial No. 08/817,901, filed on April 28,
1997.

 

3.             UNITED STATES PATENT APPLICATION SERIAL NO. 08/734,427, FILED ON
OCTOBER 16, 1996 (CONTINUATION OF UNITED STATES PATENT APPLICATION SERIAL NO.
08/331,352). PATENT INTERFERENCE NO. 104,366, SETTLED, JUDGMENT ENTERED AGAINST
COIN.

 

4.             UNITED STATES PATENT NO. 5,920,319, ISSUED ON JULY 6, 1999, FROM
UNITED STATES PATENT APPLICATION SERIAL NO. 08/805,584, FILED ON FEBRUARY 25,
1997 (CONTINUATION-IN-PART OF UNITED STATES PATENT APPLICATION SERIAL NO.
08/331,352).

 

5.             PCT PATENT APPLICATION SERIAL NO. PCT/US98/03427, FILED ON
FEBRUARY 23, 1998 (BASED ON UNITED STATES PATENT APPLICATION SERIAL NO.
08/805,584).

 

•       Australian Patent Application No. 61804/98 with an International Filing
Date of February 23, 1998.

 

•       European Patent Application No. 98906631.1 with an International Filing
Date of February 23, 1998.

 

•       Japanese Patent Application No. 8-536,928 with an International Filing
Date of February 23, 1998.

 

•       Canadian Patent Application with an International Filing Date of
February 23, 1998.

 

6.             UNITED STATES PATENT APPLICATION SERIAL NO. 09/299,061, FILED ON
APRIL 23, 1999 (CONTINUATION OF 08/805,584)

 

7.             UNITED STATES PROVISIONAL PATENT APPLICATION SERIAL NO.
60/109,966, FILED NOVEMBER 25, 1998, FOR VIRTUAL ENDOSCOPY WITH IMPROVED IMAGE
SEGMENTATION AND LESION DETECTION.

 

8.             PCT PATENT APPLICATION SERIAL NO. PCT/US99/28030 BASED ON
PROVISIONAL UNITED STATES PATENT APPLICATION SERIAL NO. 60/109,966, FILED
NOVEMBER 24, 1999.

 

9.             UNITED STATES PATENT APPLICATION SERIAL NO. 09/594,383, FILED ON
JUNE 15,2000 (CONTINUATION OF UNITED STATES PATENT APPLICATION SERIAL NO.
08/817,901).

 

EXHIBIT B

 

FOR IMMEDIATE RELEASE

 

VITAL IMAGES SIGNS TECHNOLOGY LICENSE AGREEMENT WITH POINTDX

TECHNOLOGY SUPPORTS VITAL IMAGES’ CT COLONOGRAPHY APPLICATION

FOR EARLY DETECTION OF COLON CANCER

 

Minneapolis, July XX, 2001 – Vital Images, Inc. (Nasdaq SmallCap: VTAL), a
medical imaging software company, has signed an agreement with PointDx, Inc. to
license from PointDx patents related to virtual endoscopy, a technique that uses
software to generate images of the inside of hollow organs, such as the colon
and vascular structures, from computed axial tomography (CAT) scan data.  Access
to this technology will allow Vital Images to enhance its CT colonography
technology in Vitrea® 2, its flagship software product.  Further, as the company
moves forward, the technology licensed in the patent portfolio will support
Vital Images’ expansion into additional markets with new applications.  Under
the terms of the agreement, PointDx will also provide technical support and
access to clinical data to Vital Images.

 

“CT colonography is part of Vital Images’ major growth strategy into the disease
screening market,” said Albert Emola, Vital Images’ president and chief
executive officer.  “We have been on the forefront of CT colonography by seeking
out and incorporating the most innovative technologies.  We expect this
technological partnership to reinforce our market-leading position and to
strengthen our intellectual property portfolio.  More broadly, the licensed
patent portfolio covers both domestic and international markets and strengthens
our longer-term strategic position across a broad spectrum of potential new
applications.

 

“Vital Images is very pleased with its relationship with PointDx and we expect
some of this technology to be included in new product offerings scheduled for
release later this year.”

 

“We are excited about working with Vital Images. This dynamic company has the
ability to rapidly implement emerging technologies, such as that offered by
PointDx,” said Dr. David Vining, president and chief executive officer of
PointDx.

 

Dr. Vining, credited as the father of virtual colonoscopy, has developed, along
with his team, many of the fundamental concepts used in virtual endoscopy
today.  Much of the work supporting the patents was performed at the Wake Forest
University School of Medicine in Winston-Salem, N.C., where Dr. Vining holds a
position as an associate professor of Diagnostic Radiology.

 

Virtual colonoscopy, or CT colonography, is a visualization application that
uses two- and three-dimensional images of the colon to allow a physician to look
for polyps and tumors in the colon in a less invasive manner than traditional
colonoscopy.  According to many physicians, the use of CT colonography will lead
to a substantial increase in the number of patients that will be screened for
colon cancer.  Currently, patient compliance with screening guidelines is low
due to the discomfort, risk, expense and embarrassment associated with
conventional colonoscopy.  CT colonography has the potential to improve patient
compliance and save lives by detecting tumors at an early stage.

 

Colon cancer is the third most common cancer in the United States, with an
estimated 130,000 new cases and 48,000 deaths in 2000.  If detected early, the
survival rate is 90 percent or greater; in later stages, it is one of the
deadliest forms of cancer.

 

About PointDx, Inc.

 

PointDx, Inc., founded in 1999, is a medical software and information technology
(IT) company that produces integrated image analysis and structured reporting
(SR) software for the field of diagnostic radiology. “Although PointDx
originated in the virtual endoscopy arena, our company is now focused on
bridging the gap between advanced 3D medical visualization and the electronic
medical record. The company’s vision is to become a worldwide structured
reporting standard with its innovative technology.  PointDx’s flagship product,
REXä, uses a patent-pending workflow scheme to rapidly construct and distribute
Web-based, multimedia radiology reports that will reduce costs, accelerate
turnaround time and improve reporting accuracy compared to conventional methods.
Since the company's technology addresses a large, unmet need with a worldwide
market, PointDx anticipates that REXä will revolutionize radiology’s
quality-of-service for healthcare providers, hospitals, and patients. More
information about PointDx and REXä can be found at the company’s web site
(www.pointdx.com).

 

About Vital Images, Inc.

 

VITAL IMAGES IS A LEADING PROVIDER OF 3D IMAGING SOFTWARE FOR USE IN DISEASE
SCREENING APPLICATIONS, CLINICAL DIAGNOSIS AND THERAPY PLANNING. THE COMPANY'S
TECHNOLOGY UTILIZES HIGH-SPEED VOLUME VISUALIZATION AND ANALYSIS, AS WELL AS
NETWORK COMMUNICATIONS BASED ON DICOM AND INTERNET PROTOCOLS. VITAL IMAGES COST
EFFECTIVELY BRINGS 3D VISUALIZATION AND ANALYSIS INTO THE DAY-TO-DAY PRACTICE OF
MEDICINE. PRESS RELEASES, EXAMPLES OF 3D MEDICAL IMAGING AND OTHER CORPORATE
INFORMATION ARE AVAILABLE ON VITAL IMAGES’ WEB SITE AT WWW.VITALIMAGES.COM.

 

Except for the historical information contained herein, the matters discussed in
this news release are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties which could cause results to differ materially from those
projected, including dependence on market growth, the timely availability and
acceptance of new products, the impact of competitive products and pricing,
dependence on major customers, fluctuations in quarterly results, third-party
reimbursement, the availability of capital and other risks detailed from time to
time in the company's SEC reports, including the company's most recent report on
Form 10-K for the year ended December 31, 2000 and most recent Form 10-Q for the
quarter ended March 31, 2001.

 

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Vitrea® is a registered trademark of Vital Images Inc.