Intellectual Property License Agreement - Internet Pictures Corp. and Homestore Virtual Tours Inc.
INTELLECTUAL PROPERTY LICENSE AGREEMENT
This Intellectual Property License Agreement (this "Agreement") is by
and between Internet Pictures Corporation ("iPIX") having a place of business at
1009 Commerce Park Drive, Oak Ridge, Tennessee 37830, and Homestore Virtual
Tours, Inc. ("HVT") having a place of business at 30700 Russell Ranch Road,
Westlake Village, CA 91362. iPIX and HVT shall each be referred to as a "Party"
herein, and collectively, as the "Parties."
WHEREAS, iPIX is the owner of or otherwise has the right to grant
licenses with respect to certain Intellectual Property (as defined below);
WHEREAS, HVT is interested in acquiring a license to the Intellectual
Property in connection with Virtual Tours (as defined below) only for use in the
Residential Real Estate Market (as defined below); and
WHEREAS, iPIX is willing to convey such license to HVT.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements hereinafter set forth, the Parties agree as follows:
1. INTRODUCTION
iPIX and HVT have contemporaneously entered into a Preferred Escrow Agreement, a
Product Development Agreement, and a Processing, Hosting and Distribution
Agreement ("PH&D Agreement"). The terms in this Agreement shall control in the
event of any conflict between such terms and the terms of the Preferred Escrow
Agreement, Product Development Agreement, or PH&D Agreement.
2. DEFINITIONS
2.1. Affiliate: Any corporation or other business entity that either
directly or indirectly controls a Party to this License Agreement, is
controlled by such Party, or is under common control of such Party. As
used herein, the term "control" means possession of the power to direct
or cause the direction of the management and policies of a corporation
or other entity, whether through the ownership of voting securities, by
contract, or otherwise.
2.2. Deposit Materials: Source code, object code, psuedo code, including
procedures for compiling object code from source code, and formal
documentation for Licensed Technology. Formal documentation may include
comments within source code, engineering requirement specifications,
functional specifications, work flow diagrams, user manuals, release
notes, or statements of work which are in existence and in current form
as of the date of submission into escrow.
2.3. Double Payment Default: During any given 12 month period, in which HVT
is twice delinquent in payments due under Article 7 (Royalties), and on
the first
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delinquent payment iPIX has provided 60 days written notice of such
delinquency, and on the second delinquent payment, iPIX has provided 60
days written notice and follow-up telephone calls to HVT's general
counsel and its chief financial officer, HVT shall be deemed in "Double
Payment Default" if the second payment is not made payment with 15 days
of such telephone calls or such 60 days, whichever is later;
2.4. Excluded Technology: Any iPIX technology not satisfying the definition
of Licensed Technology, Virtual Tour Technology or Other Viewing
Technology, including without limitation:
(a) except as required to Process or view Virtual Tours or view
Residential Real Estate properties, technologies for
transporting (e.g., sending, receiving), transforming (e.g.,
resizing, converting file formats, watermarking, cropping,
manipulating), and deploying (e.g., sending, storing, serving)
media objects (e.g., images, xml, audio);
(b) server network and infrastructure, other than proprietary
technology needed to view Virtual Tours or Residential Real
Estate properties in respect of Licensed Technology;
(c) hosting and distribution technologies (other than such
technologies for viewing or interacting with a Virtual Tour);
(d) monitoring and reporting technologies;
(e) technology related to flat still or video images (other than
such images or technologies for Capturing, Processing or
viewing a Virtual Tour); and
(f) surveillance systems or teleconference systems.
2.5. Exterior Virtual Tour: A Full Service Virtual Tour that includes only a
single image of the exterior of a Residential Real Estate property.
2.6. Full Service Virtual Tour: A product that includes the services via an
authorized channel consisting of Capturing, Processing, Hosting and
Distribution (each as defined in the PH&D Agreement) a Virtual Tour.
2.7. Foreign: Countries other than the United States and its possessions.
2.8. Improvements: All future versions, revisions, corrections, bug fixes,
refinements, and enhancements including new platform, operating system
or browser support, future versions, revisions, corrections, bug fixes,
refinements, and enhancements that add to the image capture, creation,
processing and viewing experience of Virtual Tour Technology or Other
Viewing Technology (as the case may be), or new products or services
satisfying the respective technology definition of Virtual Tour
Technology or Other Viewing Technology (as the case may be), whether
acquired, developed, created, licensed (with right to sublicense) or
otherwise controlled or available for licensing.
2.9 Intellectual Property: Patents, trade secrets, copyrights, moral
rights, or know-how that relate to Virtual Tours or Licensed
Technology.
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2.10. Key: A digital code that enables an end-user to create a single image
for a Virtual Tour.
2.11. Licensed Technology shall mean the Virtual Tour Technology, and shall
also mean Improvements and Other Viewing Technology as provided in
Section 3.5 (Future Licenses). In no event shall Licensed Technology
include Excluded Technology.
2.12. Patents: All current and future United States and Foreign patents and
patent applications owned by iPIX or its Affiliates, or with respect to
which iPIX or its Affiliates have the right to grant licenses, that
relate to the Licensed Technology. From iPIX's and its Affiliates'
current patent portfolio, Patents shall only include the U.S. patents
and patent applications listed in Schedule 2.7(A) and the Foreign
patents and patent applications listed in Schedule 2.7(B), however,
Patents do not include the patents and applications listed in Schedule
2.7(C) unless subject to Section 3.5(c).
2.13. Productize: Actively marketing, distributing and selling a bona fide
product or service in commerce to customers in the Residential Real
Estate Market. Productization occurs upon the launch of such products
or services.
2.14. Other Viewing Technologies: Software, source code, object code, pseudo
code, including technology, algorithms, and other processes, tools, and
utilities that could be used to view a Residential Real Estate
property, other than Virtual Tour Technology. In no event shall Other
Viewing Technology include Excluded Technology.
2.15. Residential Real Estate Market: Residential Real Estate Market means
(i) the marketing of new and/or existing Residential Real Estate that
are for sale, lease or rent through display (electronic or otherwise)
on the Internet or otherwise, (ii) the sale of products and/or services
to residential real estate professionals such as agents, brokers and
lenders for display (electronic or otherwise) on the Internet or
otherwise, (iii) the display (electronic or otherwise) or offering for
sale on the Internet or otherwise of any products and/or services
relating to moving to or from any Residential Real Estate, (iv) the
display (electronic or otherwise) or offering for sale on the Internet
or otherwise of any products and/or services relating to renovation,
home improvement, repair or maintenance of any Residential Real Estate,
(v) the display (electronic or otherwise) or offering for sale on the
Internet or otherwise of any products and/or services relating to
financial matters relating to the ownership, lease or renting of any
Residential Real Estate, including making or obtaining loans or other
financing and tax matters, (vi) the display (electronic or otherwise)
or offering for sale on the Internet or otherwise of any products
and/or services relating to interior furnishing, decoration and design,
including planning, room and floorplan design, style, furniture,
fixtures and hiring of design professionals in respect of the
Residential Real Estate or (vii) the display (electronic or otherwise)
or offering for sale on the Internet or otherwise of any products
and/or services relating to outdoor living, lawn and gardening,
including growing basics and tips, plants, lawn and landscaping and
hiring of related professionals in respect of Residential Real Estate.
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2.16. Residential Real Estate: Non-mobile personal dwellings or units
(primary, secondary or otherwise), including new and used homes,
condominiums, townhomes, apartments, vacation homes, manufactured
homes, senior housing and timeshares, which timeshares are marketed for
sale only, and architecture, engineering and construction of the
foregoing (other than the architecture, engineering and construction of
buildings containing multiple-dwelling units), farms and ranches.
Residential Real Estate excludes (i) land without improvements, (ii)
commercial property for sale or lease, (iii) all other architecture,
engineering and construction, (iv) transportation, (v) travel and
hospitality (i.e., multi-unit vacation rentals, bed and breakfasts,
hotels and resorts, timeshares (rental only), and cruise ships) and
(vi) insurance. With respect to countries outside of the United States,
"Residential Real Estate" will not limit the intended scope of the
License solely as a result of foreign zoning and related laws that do
not distinguish between residential and commercial real properties in a
manner similar to that in the United States.
2.17. Self-Service Virtual Tour: Virtual Tour that is Captured and Processed
(each as defined in the PH&D Agreement) by the end-user.
2.18. United States: The United States of America and its possessions.
2.19. Virtual Tour: One or more interactive (user controlled or otherwise
controlled) and panoramic images (including panoramic images that are
larger or smaller than the user's viewing window area) to provide a
visual simulation of being present at or immersed in a Residential Real
Estate property, which enables the user to look at and spatially
navigate (if desired) in the image by without limitation panning,
tilting, zooming, rotating, or moving within the image or experience
through other senses such as sound, touch, smell, or taste.
2.20. Virtual Tour Technology: Software, source code and related documents,
object code, pseudo code, including technology, algorithms, and other
processes, tools, and utilities relating to capturing, creating and
viewing Virtual Tours, including but not limited to capturing,
processing, editing, sequencing, viewing, interacting with, displaying,
navigating, and correcting the perspective of Virtual Tours. In no
event shall Virtual Tour Technology include Excluded Technology.
3. GRANT
3.1. Licenses: iPIX grants to HVT the following Licenses:
(a) U.S. License: iPIX hereby grants to HVT an irrevocable, perpetual,
exclusive (including exclusive to iPIX and its Affiliates, except as
provided herein) license, including a limited right to sublicense (as
specified below), under iPIX's Intellectual Property to make, use,
offer for sale or sell products or services using the Licensed
Technology, including but not limited to the right to Process, Host and
Distribute (each as defined in the PH&D Agreement) Virtual Tours, only
in the United States Residential Real Estate Market (hereinafter the
"U.S. License"), subject to the limitations set forth in the Deposit
Material License. Accordingly, iPIX and its Affiliates shall not
directly or indirectly make, use, offer for sale or sell products or
services using the Licensed Technology in the United States
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Residential Real Estate Market, except as provided in Section 3.2
(Grant Back of Sublicense) and Section 3.8 (Cendant).
(b) Foreign License: iPIX hereby grants to HVT an irrevocable,
perpetual, non-exclusive license, including a limited right to
sublicense (as specified below), under iPIX's Intellectual
Property to make, use, offer for sale or sell products or
services using the Licensed Technology only in the Foreign
Residential Real Estate Market (hereinafter the "Foreign
License").
(c) Deposit Materials License: iPIX hereby grants to HVT an
irrevocable, perpetual license, including a limited right to
sublicense (as specified below), under iPIX's Intellectual
Property (i) to reproduce, modify, and create works derivative
of the Deposit Materials only for its internal use to develop,
back-up, or maintain the Licensed Technology or Process, Host
and Distribute (each as defined in the PH&D Agreement) Virtual
Tours, and (ii) to reproduce, perform, display, distribute and
sell to third parties the Deposit Materials (including any
modifications or derivatives thereof) only in object code,
pseudo code, or otherwise executable form (hereinafter the
"Deposit Materials License"). The Deposit Materials License is
subject to the rights, restrictions and obligations in the
U.S. License, the Foreign License, and the Preferred Escrow
Agreement.
3.2. Grant Back of Sublicense: HVT hereby grants back a non-exclusive,
paid-up license, including the right to sublicense, to iPIX to make,
use, offer for sale or sell products or services using the Licensed
Technology in the Residential Real Estate Market in the United States
only to the extent necessary to perform iPIX's obligations under this
Agreement, the PH&D Agreement, and the Product Development Agreement.
3.3. End-User Sublicense: The Licenses of Section 3.1 shall include the
right of HVT to sublicense to bona fide distributors of HVT and to
end-users the right to use, sell or offer to sell end user products or
services using Licensed Technology, in object code form only, subject
to the limitations in such Licenses. All sublicenses for such products
or services shall include a prohibition on using or distributing such
products or services outside the Residential Real Estate Market. All
such sublicenses shall expressly name iPIX as a third party beneficiary
so that iPIX has standing to enforce sublicensee violations of the
prohibited use described above. HVT shall not be liable to iPIX for any
sublicensee breach as long as HVT has complied with the requirements of
this Section.
3.4. Technology Provider Sublicense: The Licenses of Section 3.1 shall also
include the right of HVT to sublicense to third-party service providers
(i.e., parties other than iPIX) the right to use, reproduce, modify,
create works derivative of, display and perform (collectively, "Use")
Licensed Technology solely for the benefit of HVT and its Affiliates
and under the direction of HVT, including the right to Process, Host
and Distribute (each as defined in the PH&D Agreement) Virtual Tours.
Any such sublicenses will include the restrictions of this Agreement
between HVT and iPIX, including the requirements of Article 5
(Confidentiality) and Article 6 (Heightened Duty of Confidentiality for
Source Code). HVT shall make commercially reasonable efforts in all
such sublicenses to expressly name iPIX as a third party beneficiary
and HVT shall make commercially reasonable
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efforts to enforce such sublicenses including indemnification
provisions therein relating to breaches of confidentiality or
prohibited use. Without limiting iPIX's remedies against third party's
violations, HVT shall be liable for third party breaches as and to the
extent set forth in Section 8.4.
3.5. Future Licenses: As long as (i) HVT has not elected to cease paying the
Minimum Annual Fee under Section 7.5; (ii) HVT is not in Double Payment
Default; (iii) HVT has not incurably and materially breached Articles 5
(Confidentiality) and 6 (Heightened Duty of Confidentiality for Source
Code), after 60 days written notice of such material breach has been
provided by iPIX to HVT; and (iv) cessation has not occurred under
Article 9 (Cessation); then the Licenses under Section 3.1 shall apply
as follows:
(a) Any Improvements to the Virtual Tour Technology made or
controlled by iPIX or its Affiliates ("iPIX Improvements")
shall be considered Licensed Technology under the Licenses.
iPIX shall deliver and otherwise make available to HVT all
such iPIX Improvements in order to allow HVT to obtain and
exercise the benefits of such iPIX Improvements.
(b) As long as the Deposit Materials have not been released from
escrow (except for a limited release under Section 3.18,
below), any Other Viewing Technology or Improvements thereto
made or controlled by iPIX or its Affiliates that HVT
Productizes shall be considered Licensed Technology under the
Licenses. In all cases, the Parties will negotiate in good
faith appropriate royalties for such Other Viewing Technology
following the guidelines set forth in Article 7 (Royalties),
below. If such appropriate royalties cannot be reached
amicably within 30 days, such royalties will be determined
through binding arbitration, provided, however, that during
such arbitration HVT may distribute products or services using
such Other Viewing Technology and will pay a interim royalty
to iPIX of *. Upon resolution of such arbitration, the Parties
will promptly pay any discrepancies between the arbitrated
royalty and the interim royalty. If iPIX is subject to a
corporate reorganization, consolidation, merger or sale of
substantially all assets in favor of an acquiring party, then
this subsection (b) (and no other provisions of this
Agreement) shall terminate upon 30 days notice, which shall be
a release event for the Deposit Materials relating to the
Other Viewing Technology.
(c) iPIX's or its Affiliates' Intellectual Property rights in the
Licensed Technology under subsections (a) and (b), above,
shall be subject to the Licenses in Sections 3.1 (a) and (b).
iPIX's or its Affiliates' Intellectual Property copyrights in
the Licensed Technology under sub-sections (a) and (b), above,
shall be subject to the License in Section 3.1 (c).
3.6. Non-iPIX Improvements: Any subsequent Improvements made or controlled
by or on behalf of HVT, its Affiliates, or authorized third parties
under this Agreement shall be owned by HVT or such Affiliates;
provided, that to the extent any such subsequent Improvements
incorporates pre-existing Licensed Technology owned by iPIX, such
pre-existing Licensed Technology shall be considered Licensed
Technology under the Licenses of Section 3.1.
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3.7. Ownership: Nothing in this Agreement shall operate to assign or
transfer ownership of the Intellectual Property, Improvements, or new
products or services owned by iPIX. All rights not expressly granted
herein are reserved by iPIX. *
3.8. [Intentionally left blank]
3.9. Inventory of Virtual Tours: iPIX hereby transfers and assigns its
rights in its inventory of existing Virtual Tours relating to the
United States Residential Real Estate Market to HVT. iPIX acknowledges
that it has no ownership claim to any subsequent Virtual Tours created
using the Virtual Tour Technology that is subject to the Licenses for
use in the Real Estate Market.
3.10. iPIX End-User Licenses: All sublicenses or licenses (collectively,
"licenses") of iPIX's end-user products and services using Licensed
Technology shall include a prohibition on using or distributing such
products or services in the United States Residential Real Estate
Market, except as provided in Section 3.8 (Cendant). All such licenses
shall expressly name HVT as a third party beneficiary so that HVT has
standing to enforce licensee violations of the prohibited use described
above. iPIX shall not be liable to HVT for any licensee breach as long
as iPIX has complied with the requirements of this Section.
Notwithstanding the foregoing, iPIX may distribute its existing
inventory of Self-Service Virtual Tour software having 10 or less
bundled Keys (but not more than 1000 keys to any one customer in a
single or related series of transactions) that have pre-printed license
agreement without such a prohibition for up to six months after the
effective date hereof, provided, further, that iPIX will use
commercially reasonable efforts to include such prohibitions in such
licenses or include a prominent notice that such software may not be
used in the United States Residential Real Estate Market. Within 15
days of the effective date, Keys purchased via iPIX's web site shall
include such prohibition. The provisions of this Section shall not be
deemed to limit in any way the other provisions of this Article 3.
3.11. iPIX Source Code Sublicenses: In the event iPIX sublicenses or licenses
(collective "license") its source code relating to the Licensed
Technology to a third party (other than under Section 3.2 (Grant Back
of Sub-License)), such licenses shall include a prohibition on using or
distributing such source code or resulting products or services for use
in the United States Residential Real Estate Market, except as provided
in Section 3.8 (Cendant). iPIX shall make commercially reasonable
efforts in all such sublicenses to expressly name HVT as a third party
beneficiary and iPIX shall make commercially reasonable efforts to
enforce such licenses including indemnification provisions therein
relating to breaches of confidentiality or prohibited use. Without
limiting HVT's remedies against third party's violations, iPIX shall be
liable for third party breaches as and to the extent set forth in
Section 8.4.
3.12. Excluded Foreign Parties: Notwithstanding anything to the contrary in
the Foreign License, iPIX shall not directly sell, license, make
available or otherwise provide Licensed Technology for use in the
Residential Real Estate Market to a single third parties in the
respective regions of Latin America, Europe, and Asia, which third
parties to be mutually agreed upon within 7 days of the date hereof.
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3.13. Escrow: iPIX shall place into escrow, under the Preferred Escrow
Agreement, all Licensed Technology for the Residential Real Estate
Market in existence as of the date hereof. iPIX shall deposit into
escrow all Licensed Technology under Section 3.5 within 21 days of the
release or Productization thereof by of for benefit of HVT.
3.14. No Intrusive Features: Except at HVT's request, iPIX shall not create
in the Licensed Technology or impose during the provision of services
to HVT or build into iPIX's technology any features that require
registration by the user or any other features that intrude upon the
user experience and are not necessary to the functionality of the
Licensed Technology or the end-user products derived therefrom,
regardless of the method or channel of distribution (e.g., including
through distributors). iPIX agrees that it may not charge any amounts
to HVT's customers, suppliers or distributors in respect of their use
of end-user products using the Licensed Technology. The foregoing
provisions of this Section shall not mean that iPIX is prohibited from
utilizing functionality required to be competitive and consistent with
the then current industry standards.
3.15. Third Party Technology: Nothing in this Agreement shall limit or
restrict HVT's or its Affiliates' right to use, acquire, license or
otherwise utilize or exploit any technology or intellectual property of
any other party or any other party for services.
3.16. Productization: To the extent any Licensed Technology will be
Productized for the Residential Real Estate Market, the Parties shall
negotiate in good faith a Statement of Work under the Product
Development Agreement. If the Parties are unable to agree to a
Statement of Work within 30 days, then HVT may make such Productization
itself or use third party service providers subject to the terms of
this Agreement. In such event, iPIX shall deliver to HVT the relevant
source code within 10 days of HVT's written request.
3.17. Limited Escrow Releases:
(a) Specific Customizations: In the event that HVT desires to
utilize technology providers other than iPIX for specific
customizations and modifications to Licensed Technology in
escrow under the Preferred Escrow Agreement, for which the
Parties have not agreed to a Statement of Work under the
Product Development Agreement after 30 days of good faith
negotiations, then HVT may make such specific customizations
and modifications itself or use third party service providers
subject to this Agreement. In such event, iPIX shall deliver
to HVT the relevant source code within 10 days of HVT's
written request. If iPIX fails to deliver such source code,
then HVT shall have the limited right to withdraw such source
code from escrow, and shall return all copies of such released
source code back into escrow and HVT may retain a copy of the
customizations and modifications.
(b) Non-iPIX Processing: In the event that HVT elects to use
Non-iPIX Services to Process Virtual Tours (as provided in the
PH&D Agreement), HVT shall have the limited right to withdraw
such necessary Deposit Materials for the service provider to
Process Virtual Tours. Prior to such release, HVT shall
provide at least 15 days prior notice specifying which
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Deposit Materials it seeks to withdraw from escrow. Promptly
upon cessation of the needed access to such Deposit Materials
to perform the Processing services, such Deposit Materials
shall be returned to escrow.
3.18. Product Development Meetings: As long as the provisions of Section 3.5
are applicable to Licensed Technology, the Parties shall meet and
confer in good faith during the first 30 days from the effective date
and on a regular basis thereafter (at least once per calendar quarter)
to determine which Licensed Technology is available for licensing or
Productization hereunder, and iPIX shall provide reasonable access to
its employees and relevant information in such meetings so that HVT can
make such determinations in an informed manner.
3.19. Hosting and Distribution of Keys: iPIX shall continue to Host and
Distribute (each as defined in the PH&D Agreement) Self-Service Virtual
Tours sold or distributed by HVT consistent with its present practice,
and may discontinue such Hosting and Distribution with 6 months written
notice; provided, that upon such discontinuation, the Key Royalty under
Section 7.3 shall be discontinued.
3.20. Delivery. iPIX shall deliver to HVT from time to time all materials
reasonably necessary for HVT to exercise its rights hereunder. Such
materials shall include form end-user agreements, copies of end-user
software for duplication, instruction manuals for end-user products and
the like.
4. MAINTENANCE AND ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS
4.1. Maintenance: iPIX shall use commercially reasonable efforts to maintain
issued patents and prosecute patent applications licensed under this
Agreement, which shall be done at iPIX's discretion and expense. For
all patent applications licensed under this Agreement, iPIX shall
provide HVT copies of all written correspondence to and from the Patent
and Trademark Office and shall reasonably consider any comments
relating thereto from HVT. In the event iPIX elects in good faith to
cease paying maintenance fees on an issued patent licensed under this
Agreement because iPIX no longer desires to maintain such patent, then
iPIX shall provide notice to HVT 30 days prior to abandonment, and HVT
shall have the option to continue paying maintenance fees for such
patents on behalf of iPIX, and the Parties shall negotiate in good
faith terms for an assignment of such patent, however, such assignment
shall not be mandatory. In no event shall iPIX assign any licensed
patent (except as part of a corporate reorganization, consolidation,
merger or sale of substantially all related assets used in the Virtual
Tour business) to any other party without first offering to HVT first a
right of first negotiation, as well as a right of first refusal in
respect of any other offers received by iPIX for such patents. Any such
assignment shall be subject to the Licenses hereunder.
4.2. Enforcement: iPIX shall use commercially reasonable efforts to enforce
its Intellectual Property licensed under this Agreement. In the event
of any infringement or threatened infringement of such Intellectual
Property by a third party, iPIX shall have 30 days after notice from
HVT (or such shorter period of time to the extent necessary to not
prejudice HVT's rights) to commence legal
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action against the infringing or potentially infringing party. If iPIX
does not take such action in such time, HVT shall have the right to
pursue such action, and iPIX shall render commercially reasonable
assistance in connection with such action. The filing Party shall be
entitled to keep any amounts that are recovered in such action subject
to reimbursing the other Party for all reasonable out-of-pocket
expenses incurred in rendering assistance in connection with such
action. In the event either Party files a lawsuit against a third party
under the Licensed Intellectual Property, the filing Party shall keep
the other Party informed of material events for dialogue and comment.
In any event, the filing Party shall provide advance notice of such
lawsuit and shall provide copies of all pleadings.
4.3. Defense: iPIX and HVT shall use commercially reasonable efforts to
defend against any lawsuit that accuses the Licensed Technology of
infringing the intellectual property rights of a third party, subject
to Section 8.2(b) (Indemnification). In the event either Party is
served such a lawsuit, such Party shall promptly notify the other Party
of such lawsuit and provide copies of all pleadings, and shall use
commercially reasonable efforts to keep the other Party informed of
material events for dialogue and comment.
4.4. Joinder: As HVT and iPIX both have an interest relating to the
Intellectual Property and the Licensed Technology, the disposition of a
lawsuit under Sections 4.2 or 4.3 in the absence of one Party may as a
practical matter impair or impede the absent Party's ability to protect
that interest or leave the absent Party subject to a substantial risk
of incurring double, multiple, or otherwise inconsistent obligations.
If the absent Party seeks joinder in a lawsuit under Sections 4.2 or
4.3, the other Party shall not oppose such joinder and shall, at the
absent Party's request, provide commercially reasonable assistance to
achieve such joinder.
4.5. Settlements: Neither Party shall settle any claims or disputes under
this Article with a third party in respect of any Licensed Technology
or licensed Intellectual Property without the other Party's prior
written approval, which approval shall not be unreasonably withheld or
delayed.
4.6. Marking: HVT agrees that for each article sold to an end-user covered
by an iPIX Patent, it will use commercially reasonable efforts to affix
thereon the word "patent" or the abbreviation "pat.", together with the
number of the patent, or when, from the character of the article, this
can not be done, by fixing to it, or to the package wherein one or more
of them is contained, a label containing a like notice.
5. CONFIDENTIAL INFORMATION
5.1. Trade Secrets: Nothing herein shall prevent iPIX from using, licensing,
publishing or otherwise dealing with its own Trade Secret information
to the extent such trade secret information relates to markets other
than the Residential Real Estate Market within the United States.
5.2. Confidential Information: In the course of carrying out this Agreement,
the PH&D Agreement, the Product Development Agreement, or the Preferred
Escrow
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Agreement, one Party (the "Receiving Party") may be exposed to certain
proprietary technologies, processes, software, trade secrets and/or
know-how ("Confidential Information") of the other Party (the
"Disclosing Party"). Confidential Information shall also include the
terms, conditions and provisions of this Agreement but shall not
include any information which:
(a) Was publicly known or made generally available in the public
domain prior to the time of exposure;
(b) Becomes publicly known or made generally available to the
public through no fault of the Receiving Party;
(c) Is in the possession of the Receiving Party, without
confidentiality restrictions, at the time of exposure as shown
by competent evidence prior to the time of exposure; or
(d) Is independently developed by the Receiving Party.
5.3. Limited Use: The Receiving Party agrees not to use any Confidential
Information for any purpose except in accordance with this Agreement.
The Receiving Party agrees not to disclose any Confidential Information
to third parties or to employees of the Receiving Party, except to
authorized third parties under this Agreement and those employees for
whom it is appropriate to disclose and permit the use of such
Confidential Information for purposes of this Agreement. The Receiving
Party shall not reverse engineer, disassemble, or decompile any the
Disclosing Party's software or technology, except as contemplated in
this Agreement.
5.4. Maintenance of Confidentiality: The Receiving Party shall take all
commercially reasonable measures to protect the secrecy of and avoid
unauthorized disclosure and unauthorized use of the Confidential
Information. Without limiting the foregoing, the Receiving Party shall
take at least those measures that it takes to protect its own most
highly confidential information. The Receiving Party shall reproduce
any proprietary rights notices on any approved copies of Confidential
Information in the same manner in which such notices were set forth in
or on the original.
5.5. Third Parties: To the extent permitted in this Agreement, Receiving
Party may disclose Confidential Information to any permitted third
parties only if prior to such disclosure, the third party executes a
Non-Disclosure Agreement substantively in the form attached as Schedule
5.5. Without limiting the Disclosing Party's remedies against third
party's violations, the Receiving Party shall be liable for third party
breaches as and to the extent set forth in Section 8.4.
6. HEIGHTENED DUTY OF CONFIDENTIALITY FOR SOURCE CODE
6.1. Source Code: As any source code under this Agreement, including any
derivatives, modifications or additions, ("Source Code") include many
of the crown jewels (i.e. key assets) of iPIX's technology and contain
extremely valuable and sensitive intellectual property of iPIX, HVT
shall have a heightened duty to maintain the confidentiality of the
Source Code. In addition to the other
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obligations under Section 5 (Confidentiality), HVT shall take the
following steps to assure that the Source Code remains confidential:
(a) HVT shall limit access to the Source Code and shall require
its third party service providers to limit access to the
Source Code only to those persons permitted access under this
License Agreement ("Authorized Third Parties") and who are
appropriate or necessary for HVT to exercise its rights
hereunder. HVT shall require that each third party business or
entity having access to any of the Source Code shall first
complete and execute a Non-Disclosure Agreement Confidential
substantially in the form attached hereto as Schedule 6.1,
which HVT shall promptly deliver to iPIX via Express Mail.
(b) At all times, HVT shall maintain or require its third party
service providers to maintain a record of any and all copies
of Source Code, including without limitation (i) uniquely
identifying each computer or computer readable medium that
contains any such copies, (ii) the location thereof, (iii)
which aspects of the Source Code have been copied thereon, and
(iv) the names of the persons who have access to the Source
Code. HVT shall deliver or require such third party to deliver
a reasonably comprehensive and accurate copy of the report to
iPIX on a quarterly basis.
(c) All permitted copies shall remain only on the physical
business premises of HVT or an authorized third party and no
person shall be permitted to remove any copy. HVT shall
reproduce all proprietary rights notices on any permitted
copies of the Source Code in the same manner in which such
notices were set forth in or on the original.
(d) If HVT seeks for a third party to have access to the Source
Code pursuant to the License Agreement, HVT shall first
provide 14 days prior notice to iPIX identifying the third
party and specifying why HVT seeks to disclose the Source Code
to such third party.
(e) Without limiting the iPIX's remedies against third party's
violations, HVT shall be liable for third party breaches as
and to the extent set forth in Section 8.4.
6.2. Exceptions: At any given time, Section 6.1 shall not apply with respect
to a single third party provider for Processing Virtual Tours and a
single third party provider for developing Licensed Technology (e.g.
Productization), provided that HVT has used commercially reasonable
efforts to cause such third parties to undertake a heightened duty of
confidentiality set forth in Section 6.1.
7. ROYALTIES AND PAYMENTS
HVT shall pay Service Royalties, Software Royalties, Key Royalties, and Other
Royalties, unless iPIX has materially breached this Agreement after 60 days
written notice by HVT specifying such breach, in which case such royalties may
be offset to the extent HVT was damaged by such breach.
7.1. Service Royalties: Except as provided herein, HVT shall pay to iPIX
"Service Royalties," which shall include the following components:
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(a) *
7.2. Software Royalties: *
7.3. Key Royalties: *
7.4. Other Royalties: In the event HVT distributes products or services
utilizing Licensed Technology which products or services are not
contemplated under Service Royalties, Software Royalties or Key
Royalties ("Other Products and Services"), then the Parties will
negotiate in good faith appropriate royalties for such Other Products
and Services using the royalties in this Article 7 as guidelines
("Other Royalties"). If Other Royalties cannot be amicably reached,
such Other Royalties will be determined through binding arbitration;
provided, however, that during such arbitration HVT may distribute such
Other Products and Services and will pay a interim royalty to iPIX in
an amount equal to *
7.5. Minimum Annual Fee: Except as provided herein, with the exception of *
the 2001 calendar year for which there shall be no minimum annual fee,
HVT shall pay to iPIX a "Minimum Annual Fee" of which shall be measured
on an annual basis and any deficiency paid within 30 days of the last
day of each calendar year. With 30 days prior notice HVT may elect to
terminate the obligation to pay the Minimum Annual Fee, but such
election will not terminate the payment obligations in respect of
Service Royalties, Software Royalties, Key Royalties and Other
Royalties. From and after the date on which the obligation to pay the
Minimum Annual Fee terminates, then * In measuring the Minimum Annual
Fee, all amounts paid under the following shall be included:
(1) Service Royalties (Section 7.1);
(2) Software Royalties (Section 7.2);
(3) Key Royalties (Section 7.3);
(4) Other Royalties (Section 7.4); and
(5) Gross Up in Service Fees (as described in the PH&D Agreement).
7.6. Exempted Royalties: *
7.7. Customer Billing: Billings for products or services subject to
royalties under this Article shall be due net 30 days from delivery of
such products or services.
7.8. Payments: Service Royalties, Software Royalties, Key Royalties, and
Other Royalties shall be paid to iPIX on a calendar quarterly basis in
arrears. All payments shall be made in U.S. currency.
(a) Reports: For all Service Royalties, Software Royalties, Key
Royalties, and Other Royalties in a given quarter, HVT shall
prepare a report specifying the amounts due and how such
amounts were calculated. Reports and corresponding payments
for such amount due shall be due no later than one month after
the quarter.
(b) Delinquent Payments: Any delinquent payment by HVT or iPIX
under this Agreement shall bear interest from the due date
until paid at a rate of 10% per annum.
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7.9. Auditing: HVT shall maintain accurate records and books of records with
respect to the data upon which Service Royalties, Software Royalties,
Key Royalties and Other Royalties are calculated. No more than once per
calendar year, iPIX may hire a disinterested third party auditor that
is a nationally recognized certified public accounting firm that has
not had a business relationship with either Party in the 2 years prior
to the audit to perform a reasonable inspection and auditing of the
books and records of HVT relating to amounts due under Article 7 to
verify compliance with Article 7 of this Agreement. HVT agrees to
cooperate in such inspections and audits. All such audits shall be
during normal business hours and on dates mutually agreed. Any payment
discrepancy resulting from an audit shall be promptly paid. Each Party
shall bear its own costs and expenses.
7.10. Set-Off: HVT shall have the right to set-off against and deduct from
Service Royalties, Software Royalties, Key Royalties or other
Royalties, and any all amounts owed by iPIX to HVT in respect of (i)
the amounts paid by HVT relating to commissions as described in Section
4.6 of the Acquisition Agreement ("Commissions") and (ii) any co-op or
rebate payments made to brokers in respect of the Tour Backlog under
the relevant agreements ("Co-op Payments"). HVT shall have the right to
make the payments for Commissions and Co-op Payments, and if HVT does
make such payments, it shall give written notice of reimbursement to
iPIX (which written notice shall include the amount of any Commission
and Co-op Payments made and the basis of calculation therefor) and if
iPIX does not reimburse HVT within 5 business days of such notice, HVT
may exercise the set-off right described above.
8. WARRANTIES AND INDEMNIFICATION
8.1. Warranties:
(a) iPIX warrants that it or its Affiliates are the exclusive
owners of the Patents, and that the Patents are valid as of
the effective date. iPIX warrants that the Patents listed in
Schedule 2.7(A) and (B) constitute all of the Patents owned by
iPIX as of the date hereof. iPIX warrants that it or its
Affiliates own, will own, or will otherwise have the right to
grant the Licenses to the Licensed Technology.
(b) iPIX warrants that iPIX has the right to grant the Licenses
and rights in this Agreement, and that it has not granted to
any third party a license that conflicts with such Licenses
and rights, including any prior licenses granted to Motorola,
Inc. and Resort Condominiums, Inc.
(c) Except as specified in paragraph (d) of Schedule 8.1, iPIX
warrants that it has not received any threat, demand or notice
of claim from any person or entity asserting that IPIX's use
of any of the Licensed Technology constitutes any
infringement, interference, violation, misappropriation,
breach or wrongful use of the intellectual property rights of
any other person or entity and iPIX is not party to any
proceeding or outstanding decree, order, judgment, agreement
or stipulation restricting in any manner the use, transfer, or
licensing by iPIX of any Licensed Technology, or which may
affect the validity, use or enforceability of the Licensed
Technology.
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(d) iPIX warrants that its goods, products and services provided
under this Agreement or related agreements will not infringe
the intellectual property rights of any third party, and will
indemnify HVT from any such infringement as provided in
Section 8.2(b).
(e) iPIX represents and warrants that (i) the Licensed Technology
includes all technology necessary or appropriate for
capturing, creating and viewing Virtual Tours and (ii) its
proprietary Hosting and Distribution (each as defined in the
PH&D Agreement) technologies are not necessary to Host or
Distribute the Virtual Tours and that other non-proprietary
technologies could be commercially obtained to Host and
Distribute such Virtual Tours.
(f) iPIX represents and warrants that there is no Other Viewing
Technology that iPIX is currently developing or has plans to
develop, that is an advancement over the Virtual Tour
Technology (i.e. not satisfying the definition of Virtual Tour
Technology).
(g) iPIX warrants that the Licensed Technology delivered to HVT or
into escrow under this Agreement or the Preferred Escrow
Agreement shall be in compliance with applicable law and shall
be prepared in a good and workman-like manner and free from
harmful or deleterious viruses or programming routines.
8.2. Indemnification:
(a) In the event that either Party breaches any representation,
warranty, covenant or agreement in this Agreement, the
breaching Party agrees to indemnify the other Party, its
affiliates, together with their respective directors,
officers, employees, managers, agents, permitted licensees and
sublicensees and advisors ("Indemnified Parties"), and hold
them harmless from, against and with respect to any and all
direct and actual losses arising out of such breach of any
representation, warranty, covenant or agreement.
(b) In the event that any goods, products and services provided
under this Agreement or related agreements to HVT by iPIX or
its Affiliates are accused of infringing the intellectual
property rights in a claim or cause of action by a third party
and HVT provides notice that it seeks iPIX's indemnification,
iPIX shall have the option of indemnifying HVT and its
Indemnified Parties in respect of such claim or cause of
action as follows: (i) iPIX shall secure licenses to such
intellectual property rights; or (ii) iPIX shall defend
against such claim or cause of action. If iPIX opts to defend,
iPIX shall pay for and control the legal defense to such claim
or cause of action subject to HVT's approval which shall not
be unreasonably withheld or delayed, including without
limitation attorney selection, strategy, discovery, trial,
appeal, and settlement, and HVT shall, at iPIX's cost and
expense (with respect to reasonable out of pocket costs and
expenses incurred by HVT), provide all commercially reasonable
assistance requested by iPIX. If iPIX fails to assume the
defense of the lawsuit or action within fifteen (15) calendar
days after receipt of the claim notice, HVT will (upon
delivering notice to that effect to iPIX) have the right to
undertake, at iPIX's cost and expense, the defense, compromise
or settlement of the lawsuit or action on behalf of and for
the account and
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risk of iPIX, and iPIX shall, at iPIX's cost and expense,
provide all commercially reasonable assistance requested by
HVT; provided, however, that the claim or action will not be
compromised or settled without the written consent of iPIX,
which consent will not be unreasonably withheld, conditioned
or delayed. If HVT assumes the defense of the claim or action,
then HVT will keep iPIX reasonably informed as to the progress
of any such defense, compromise or settlement. In the event of
an award of damages against HVT or its Indemnified Parties is
payable that may result from any such claim or cause of
action, iPIX shall pay and be liable for all such damages,
except for any portion of such damages that the court has
found was caused by modifications to or combinations of
Licensed Technology with any other technology or services by
HVT or its Indemnified Parties (unless expressly consented to
by iPIX in writing).
(c) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN
NO EVENT SHALL EITHER PARTY, ITS AFFILIATES, OR ITS
REPRESENTATIVES BE LIABLE TO THE OTHER PARTY FOR SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT
LIMITATION, DAMAGES FOR LOSS OF PROFITS, BUSINESS
INTERRUPTION, LOSS OF INFORMATION OR OTHER PECUNIARY LOSS),
EVEN IN THE EVENT THE BREACHING PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
**
8.3. Indemnification Procedures:
(a) Any claim for recovery pursuant to Article 8 will be made
promptly after discovery of the circumstances underlying such
claim in a written statement signed by the Party seeking
indemnification, which will specify in reasonable detail the
information relating to such claim possessed by the Party
seeking indemnification. The failure of the Indemnified Party
to give timely notice hereunder for any purpose will not
affect rights to indemnification hereunder, except to the
extent such failure materially and adversely prejudices the
Indemnifying Party. No lawsuit or action will be compromised
or settled without the written consent of the Indemnifying
Party, which consent will not be unreasonably withheld,
conditioned or delayed.
(b) At the time of delivery of notice of a claim of a loss
hereunder the Party against whom such claim is made will
respond to the claiming Party within fifteen (15) days
following receipt of such notice. If there is no dispute of
such claim, the indemnifying Party will promptly make payment
to the other Party. Upon receipt of a disputed claim, the
Party will deliver, in good faith, to the claiming Party a
written statement responding to the claim and presenting the
basis of reasonable dispute of the terms thereof. The Parties
will attempt in good faith to agree upon the rights of the
respective Parties with respect to each of such claims. If the
Parties cannot agree upon a settlement of any claim within
thirty (30) days thereafter, the Parties will submit such
dispute to arbitration. The provisions of this subsection (b)
shall not apply to claim or cause of action
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that is described in Section 8.2(b) which Section 8.2(b) shall
govern in respect of such claims or causes of action.
8.4. Liability for Third Party Actions:*
9. CESSATION
9.1. Cessation: In the event that iPIX elects to cease offering and
supporting products and services under this Agreement, iPIX shall
provide HVT at least 6 months advance written notice, and upon such
cessation, HVT shall no longer be obligated to make payments under
Article 7 (Royalties), and the PH&D Agreement and Product Development
Agreement shall terminate. iPIX's written notice shall be a release
event under the Preferred Escrow Agreement.
9.2. Deemed Cessation: iPIX shall make ongoing commercially reasonable
efforts to create Improvements such that the Licensed Technology
supports the most widely used browsers and operating systems in the
United States. As long as the provisions of Section 3.5 (Future
Licenses) are in effect, iPIX will be deemed to have ceased offering
and supporting products and services under Section 9.1 if iPIX's
Virtual Tour Technology is not compatible with the set of pervasively
used viewing technologies used by at least 51% of the users of the
personal computers or other popular viewing devices in the United
States Residential Real Estate Market. HVT must provide notice to iPIX
specifying such non-compliance, where such notice shall include
competent supporting evidence and documentation. iPIX shall have 90
days to remedy any such non-compliance; provided, that if iPIX has not
remedies such non-compliance within such 90 day period but has provided
written evidence reasonably satisfactory to HVT that iPIX has made
substantial and reasonable progress in such compliance and provides
reasonable assurances that iPIX will be able to fully comply within an
additional 30 day period, iPIX shall have an additional 30 days to so
comply.
10. MISCELLANEOUS
10.1. Term: This Agreement shall commence upon mutual execution by the
Parties of this Agreement and shall remain in effect in perpetuity
unless mutually terminated.
10.2. Non-Transferable: Except as expressly provided herein, this Agreement
may not be assigned by either Party, except as part of a corporate
reorganization, consolidation, merger or sale of substantially all
related assets used in the Virtual Tour business (for the purposes of
this Section in respect of iPIX, Virtual Tour shall not be limited to
Residential Real Estate) or all stock of the assigning Party, and the
assigning Party shall provide notice of such assignment to the other
Party. This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of the Parties.
10.3. Governing Laws: This Agreement shall be construed under and governed by
the laws of the State of California.
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10.4. Binding Arbitration: Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled
through binding arbitration in Los Angeles County before three
arbitrators and administered by the American Arbitration Association in
accordance with its Commercial Arbitration Rules, including the
Emergency Interim Relief Procedures, and judgment on the award rendered
by the arbitrators may be entered in any court having jurisdiction
thereof. Either Party may elect to have any arbitration scheduled and
resolved on expedited basis and such expedited arbitration shall not be
opposed by the other Party. The arbitrators may, in their discretion,
award costs and fees, including attorneys fees, under the standards of
Rule 11 of the Federal Rules of Civil Procedure or similar rules of the
American Arbitration Association, if any. ALL JUDICIAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT THE PARTIES
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS
AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. The Parties hereby agree that service of all process in any
such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to the Parties at its address
provided in Section 10.5, such service being hereby acknowledged by to
be sufficient for personal jurisdiction in any action against the
Parties in any such court and to be otherwise effective and binding
service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the
right of the Parties to bring proceedings against the other in the
courts of any other jurisdiction.
10.5. Notices: All notices under this License Agreement must be in writing to
the other Party's General Counsel through (i) personal service, or (ii)
via certified mail, return receipt requested, addressed to the Party's
corporate headquarters. Notice shall be effective upon personal service
or delivery of the certified mail, as the case may be.
10.6. Force Majeure: A Party shall not be liable for any delay or failure to
perform its obligations in this Agreement if such delay or failure to
perform is due to any cause or condition reasonably beyond that Party's
control, including, but not limited to, acts of God, war, government
intervention, riot, embargoes, acts of civil or military authorities,
earthquakes, fire, flood, accident, strikes, inability to secure
transportation, facilities, fuel, energy, labor or materials.
10.7. Unenforceability: It is intended that this Agreement shall not violate
any applicable law. If, at any time or for any reason, any provision
becomes unenforceable or invalid, such provisions shall be amended to
bring them into legal compliance and to preserve to the maximum extent
possible the intent of the Parties and the remaining provisions shall
remain unaffected and continue
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with the same effect as if such unenforceable or invalid provision had
not have been inserted herein.
10.8. No Waiver: Failure of either Party to exercise its rights under this
Agreement shall not be construed as a waiver of that Party's rights,
including without limitation the right to seek remedies arising from
past, present or future breach by the other Party.
10.9. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
10.10. Headings: The headings and captions in this Agreement are for
convenience purposes only, and shall not be used to construe the terms
of this Agreement.
10.11. Entire Agreement: This Agreement and its Schedules contain the entire
understanding between the Parties with respect to the matters contained
herein. This Agreement supercedes all prior agreements between the
Parties, whether oral or written, express or implied, as to the matters
contained herein. No waiver, consent, modification, amendment or change
of the terms of this Agreement shall be binding unless in writing and
signed by the Parties.
10.12. *
As duly authorized representatives of the Parties and after consultation with
their respective legal counsel, the undersigned declare that they understand and
agree to be bound by the Agreement as an enforceable contract.
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INTERNET PICTURES CORPORATION HOMESTORE VIRTUAL TOURS, INC.
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Signature Signature
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Name Name
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Title Title
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Date Date
S-1