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  1. 1. ZYGOTE MEDIA GROUP, INC. CUSTOMER LICENSE AGREEMENT STOCK IMAGERY This Customer License Agreement (this “License”) is a legal agreement between the person(s), corporation(s), business(es), limited liability company(ies) or other entity(ies) identified below (“Customer”) and Zygote Media Group, Inc., a Utah corporation (“Zygote”). 1.Contract Specifications. Customer: (exact legal name) Address: Contact Person: Stock Imagery: Permitted Uses: License Fee: 2.Certain Definitions. (a) “Contract Specifications” means the contract-specific information set forth in Section 1 of this Agreement. (b) “Derivative Work” means a new Stock Imagery (or animation or movement of a Stock Imagery) based upon or derived from a Licensed Module delivered to Customer hereunder and containing an original work of authorship created solely by Customer and independently from Zygote. (c) “Customer Derivative Work” means a new Stock Image (or animation of a Stock Image) that is an original work of authorship, created solely by Customer
  2. 2. independent of Zygote, copyrightable under U.S. copyright laws, and based upon or derived from a Stock Image delivered to Customer hereunder. (d) “Stock Image” or “Stock Imagery” means the two- or three-dimensional pictorial or graphical image described in the Contract Specifications. (e) “License” means the rights expressly granted to Customer pursuant to Section 3 of this Agreement. (f) “3D Model Library” means the collection of technical data owned or controlled by Zygote which is recorded in a form capable of being accessed and processed by a computer using graphical imaging software to create, display, manipulate and/or animate two- or three-dimensional pictorial or Stock Imagery. (g) “Permitted Uses” means the purposes or uses specified in the Contract Specifications, which may (but need not be) defined using the following terms: (1) “Educational Publishing” means publishing the Stock Imagery, in hard copy or electronic media, of text books of an educational nature for use in schools or other academic institutions or as a resource for professionals in the field. (2) “Sales and Marketing” means use and display of the Stock Imagery for informational purposes related to the marketing, sales or distribution of User’s commercial products or services. (3) “Teaching” means use and display of the Stock Imagery for educational purposes in schools or other academic institutions. (4) “Motion Pictures” use and display of the Stock Imagery in connection with the creation, development, editing or production of audiovisual works. 3.License. Subject to Section 4 below, Zygote shall, and hereby does, grant to Customer a non- exclusive, limited, non-transferable, non-assignable, worldwide, royalty-free right and license to (a) use, display, copy, reproduce, or publish exact copies of Stock Imagery solely for Permitted Uses and (b) create, use, display, copy, reproduce, or publish Customer Derivative Works solely for Permitted Uses. 4.Restrictions and Limitations. Notwithstanding anything to the contrary in this Agreement, Customer covenants and agrees as follows: (a) Except for the foregoing rights, Customer shall have no further rights or interests with respect to any other pictorial or graphical images owned or controlled by Zygote or any proprietary rights, trade secrets, copyrights or copyrightable subject matter, patents or patentable subject matter, or other intellectual property rights or interests of Zygote (including, but not limited to, any part of the 3D Model Library). The License does not include and Customer has no rights to access or use the 3D Model Library or any part thereof.
  3. 3. (b) Except as expressly permitted under the License, Customer shall not sell, transfer, assign, lease, loan, rent, license, sublicense or distribute the Stock Imagery or any part of the 3D Model Library in any manner whatsoever. (c) Customer shall retain all of Zygote’s copyright and other proprietary notices and legends on the Stock Imagery. (d) Customer shall not export, ship, transmit or re-export the Stock Imagery in violation of any applicable law or regulation including, without limitation, the Export Administration Act of 1979 or the Export Administration Regulations issued by the United States Department of Commerce. 5.Permitted Uses; Prohibited Uses of Certain Products. (a) If the Contract Specifications are not competed as to “Permitted Uses” (in other words, if the “Permitted Uses” section is left blank), “Permitted Uses” shall mean the specific purposes or uses disclosed by Customer to Zygote in connection with the negotiation and execution of this License, but in no event shall Permitted Uses (i) exceed the scope of Customer’s business operations as conducted on the date of this License or (ii) violate the restrictions or limitations set forth in Section 4 above. (b) If Zygote’s website or promotional materials, any electronic or written notices delivered with the Stock Imagery or the Contract Specifications contain a statement substantially to the effect that “this product is not licensed for educational publications for anatomy/physiology or pathology (internal medicine) nursing students in Europe,” then Permitted Uses shall exclude, and Customer shall be prohibited from, using, displaying, copying, reproducing, or performing any Stock Imagery in any European textbook or other educational publication teaching anatomy/physiology or pathology (internal medicine) for nursing students in Europe. 6.License Fee. In exchange for, and as an express condition precedent to the grant of the License under this Agreement, Customer shall pay to Company the License Fee specified in the Contract Specifications, plus applicable federal, state, local or other governmental taxes or charges of any kind arising from or relating to the transactions contemplated hereby including, by way of illustration but not limitation, excise, sales, use or value-added taxes, customs or import duties, or other taxes, tariffs or duties, but excluding taxes on the income of Zygote. Customer shall be responsible for and shall pay all such taxes in a timely manner, and in any event no later than thirty (30) days following Customer's receipt of an invoice therefor from Zygote. All amounts shall be due and payable in lawful currency of the United States. Payments are deemed made by Customer when received by Zygote. Interest shall accrue on any unpaid balances due to Zygote at a rate of 1.5% per month (or the maximum legal interest rate allowed by applicable law, if less) from and after the due date. 7.Ownership. Notwithstanding anything to the contrary in this Agreement, Zygote and Customer covenant and agree as follows: (a) Zygote shall not be obligated to deliver, (i) the Stock Imagery in any format other the encrypted or unencrypted standard data format(s) selected by Zygote (provided that such data may be accessed and read by graphical imaging software supported Zygote
  4. 4. as listed in Zygote’s website or promotional materials), or (ii) the 3D Model Library in any format whatsoever. (b) Zygote is, and shall be, the sole and exclusive owner of all rights, title, ownership, proprietary rights and other interests (including but not limited to related patent rights, copyrights, trade secrets, know-how and other intellectual property rights) in and to each and all of the Stock Imagery and the 3D Model Library (other than Customer Derivative Works). Zygote hereby reserves and retains all such rights and interests, and Customer unconditionally, irrevocably and absolutely stipulates and agrees that Zygote is the sole owner of all such rights, title, ownership, proprietary rights and other interests in and to the Stock Imagery and 3D Model Library (other than Customer Derivative Works). (c) Customer is, and shall be, the sole and exclusive owner of all rights, title, ownership, proprietary rights and other interests (including but not limited to related patent rights, copyrights, trade secrets, know-how and other intellectual property rights) in and to any Customer Derivative Works. 8.Graphical Imaging Software. With respect to any graphical imaging software application program used or intended to be used by Customer in connection with the 3D Model Library, Customer has selected, acquired and licensed the graphical imaging software independently and without aid, assistance, representation or warranty from Zygote, and Customer’s license and rights to use such graphical imaging software are derived solely from and are subject to the terms and conditions of use specified by the third party owner, developer or manufacturer thereof. 9.Customer Covenants. Customer shall: (a) safeguard the Stock Imagery with at least the highest degree of care taken to protect Customer’s own confidential or proprietary information; and (b) use at least reasonable means to preserve, and not take any action inconsistent with or detrimental to, Zygote’s ownership and proprietary rights in and to the Stock Imagery. (a) Limited Governmental Rights. If Customer is the U.S. government, any agency or instrumentality thereof, or any contractor under a contract with the U.S. government or any agency or instrumentality thereof, the following notices shall apply, unless otherwise agreed by Zygote in writing: The Stock Imagery has been created and developed at private expense. If is submitted to the Government under this License, such Stock Imagery are submitted with “limited rights” under this Agreement. Stock Imagery is protected by copyright and other intellectual property laws and treaties. Zygote owns the title, copyright and other intellectual property rights in the Stock Imagery. Zygote Stock Imagery is licensed, not sold, and is © 2005 Zygote Media Group, Inc. Unpublished – rights reserved under the copyright laws of the United States. 10.Limited Warranty. (a) The Stock Imagery data may be accessed and read by graphical imaging software supported by Zygote as listed in Zygote’s website or promotional materials. (b) Except as expressly set forth in Section 11(a), the Stock Imagery are provided “AS IS” and Zygote makes no further representation, warranty or guaranty of any kind or nature regarding the accuracy, completeness, correctness, reliability or fitness for a
  5. 5. particular purpose of the Stock Imagery created or generated by Customer. Any description of the Stock Imagery contained on Zygote’s website, catalogues or promotional materials is for the sole purpose of identifying them, and any such description is not a part of the basis of the bargain and does not constitute a warranty that the item or product shall conform to that description. No affirmation of fact or promise made by Zygote, on its website, catalogues, promotional materials or otherwise, shall constitute a warranty that items or products will conform to the affirmation or promise. ZYGOTE MAKES NO FURTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER REGARDING THE STOCK IMAGERY, REGARDLESS OF WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, (i) ANY REPRESENTATION OR WARRANTY WITH RESPECT TO NON-INFRINGEMENT OF THE RIGHTS OF THIRD PARTIES, (ii) THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY OF THE FOREGOING, OR (iii) INTEROPERABILITY OF THE STOCK IMAGERY IN COMBINATION WITH OTHER DATA OR SOFTWARE SELECTED BY CUSTOMER. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY THE COMPANY, ITS AGENTS OR EMPLOYEES SHALL CREATE A WARRANTY. 11.No Updates, New Versions or New Releases. Notwithstanding anything to the contrary in this Agreement, except as expressly required by its limited warranty above, Zygote shall have no obligation to provide any upgrades, updates, modifications, additions, new versions or new releases of the Stock Imagery. 12.Limitation of Liability; Indemnification. In addition to any other limitations on Zygote's liability set forth herein, in no event shall Zygote or its managers, employees, agents or representatives be liable by reason of Zygote's breach or termination of this Agreement or for any Zygote acts or omissions in connection with this Agreement for any special, incidental or consequential damages of any kind, however caused, including, but not limited to, loss of profits or revenue, loss of data, work interruption, procurement of substitute goods or services, or any claims or demands against Customer by any other entity, whether such remedy is sought in contract, tort (including negligence), strict liability or otherwise, and even if Zygote is advised of or has knowledge of the possibility of such damages. In no event shall Zygote's liability for damages in any circumstances related to the execution, delivery or performance of this Agreement exceed the License Fee paid to Zygote by Customer. This Agreement shall neither create for nor give to any third party any claim or right of action against Zygote or Customer which would not otherwise arise without this Agreement. Customer shall indemnify, defend and hold Zygote and its managers, employees, agents and representatives harmless from and against any claims, demands, causes of action or liabilities asserted by any third party and arising from or related to (a) except to the extent covered by Zygote’s limited warranty set forth in Section 11 above, Customer’s use, display, copying, reproduction or publication of Stock Imagery (including derivative works thereof), (b) the conduct by Customer of its business or operations, or (c) any breach of any covenant or any representation or warranty made by Customer in this Agreement. 13.Termination. Without prejudice to any other rights, Zygote may terminate the License if Customer fails to comply with the terms and conditions of this License. In such event, Customer must destroy all copies of Stock Imagery and all of its component parts. Further, Customer agrees and acknowledges that substantial and irreparable injury will result from, and money damages would not be a sufficient remedy for, any breach of this Agreement by Customer or Customer’s agents and that in the event of any such breach of this Agreement, Zygote shall be
  6. 6. entitled to injunctive relief, as well as any other remedies available at law or in equity (all of which shall be cumulative and not exclusive), without (and Customer hereby waives) any requirement that Zygote prove actual damages, intentional, reckless or malicious conduct, or that Zygote post a bond or other security in connection therewith. 14.Miscellaneous. This contract is a final and complete expression of the terms and conditions between Customer and Zygote regarding the Stock Imagery and the License granted hereunder. No other terms or conditions, regardless of whether written or verbal and regardless of whether set forth in any proposals, negotiations, credit applications, purchase orders, invoices or similar documents or statements between Customer and Zygote are part of this contract. This contract may be modified only by a written instrument signed by Customer and the President of Zygote. This Agreement shall be governed and construed in accordance with the laws of the State of Utah, without regard for its conflicts of laws principles. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, venue shall be exclusively vested in the state or federal courts located in Salt Lake County, State of Utah. Customer hereby irrevocably and unconditionally submits to the personal jurisdiction of such court(s) and waives any objections (whether substantive or procedural) based upon lack of personal jurisdiction, improper or inconvenient venue or the like. Zygote and Customer irrevocably waive trial by jury in action or proceeding related to or arising from this Agreement, and the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 15.Addendums. The following Addendums shall be executed and delivered with, and made a part of, this Agreement: ZYGOTE MEDIA GROUP, INC. CUSTOMER By: By: Roger Clarke, President Print name: Date: Title: 860830.1