Software License Agreement

Exhibit 10.20


SOFTWARE LICENSE AGREEMENT


This Agreement is entered into on August 1, 1997 by and between Duke University, a North Carolina educational institution located in Durham, North Carolina ("Duke"), and Vital Images, Inc., a corporation with its principal place of business at 3100 West Lake Street, Minneapolis, Minnesota ("Licensee").


1. Definition of Terms.


a) Licensed Software. The term "Licensed Software" means software identified
as the DICOM Client Library as described in detail in Exhibit A, and any
subsequent Updates and Enhancements thereto furnished to Licensee by Duke
under this Agreement. "Licensed Software" does not include Source Code or
Server Software, as defined below, except as explicitly stated in this
agreement.


b) Source Code. The term "Source Code" means the source code to be delivered
by Duke pursuant to this Agreement which corresponds to the Licensed
Software, and will allow Licensee to produce the compiled version of the
Licensed Software.


c) Server Software. The term "Server Software" means software provided by
Duke whose primary function is to manage, store and transmit images under
DICOM standards on central servers, routers or archive systems, but shall
not include any software provided by Duke that is necessary for Licensee
to exercise its rights to use, market, distribute and sell Licensed
Software in accordance with this Agreement.


d) Field. The term "Field" shall mean the display of medical imaging data on
computer workstations, including but not limited to research, development,
marketing, sales, maintenance and support of software and hardware
products for the visualization of medical imaging data. Field shall not
include medical image management, storage or transmission on central
servers, routers or archive systems or products and systems whose primary
function is to provide such management, storage or transmission.


e) Licensed Products. The term "Licensed Products" shall mean products for
use in the Field, which incorporate the Licensed Software to which
Licensee has acquired commercial rights through this Agreement, developed
either through its own internal efforts, or from third parties, such as
but not limited to, through development agreements with other companies.


f) Documentation. The term "Documentation" means any support material
supplied by Duke with the Licensed Software or Source Code which describes
the operation or structure of the Licensed Software or Source Code, the
design, testing and other aspects of the Licensed Software or Source Code,
or tells how to install and use the Licensed Software or Source Code.


g) Updates. The term "Updates" means all bug fixes, changes, modifications,
and improvements to the Licensed Software which affect its operating
performance or efficiency, but which do not alter the basic functions
described in Exhibit A.


h) Enhancements. The term "Enhancements" means all changes and additions to
the Licensed Software which render it capable of performing additional
basic functions in the Field that were not provided by the Licensed
Software originally supplied under this Agreement.


2. License Grant. Duke grants to Licensee a fully paid-up, non-exclusive,
world-wide license to use, market, distribute and sell Licensed Software
incorporated into Licensed Products.


3. Limited Rights to Source Code. Duke grants to Licensee a limited, fully paid-
up, non-exclusive license to the Source Code upon which the Licensed Software
is based solely for Licensee's internal use in making Updates and
Enhancements to the Licensed Software. Licensee shall not have the right to
sell, license, disclose, or
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otherwise distribute the Source code to others, or to use the Source Code to
develop or design products outside the Field.


4. Limited Rights to Server Software. Duke grants to Licensee a limited, fully
paid-up, non-exclusive license to the Server Software solely for Licensee's
internal use in developing, evaluating and testing Licensed Software and
Source Code. Licensee shall not have the right to sell, license, disclose,
or otherwise distribute the Server Software to others, to use it as the
basis for new products, or to include the Server Software in Licensee's
products.


5. Royalty payment. Licensee agrees to pay Duke a single royalty payment of
seventy five thousand dollars ($75,000), which payment shall be due thirty
(30) days after delivery of Source Code to Licensee.


6. Sublicenses. The Licensee may not grant sublicenses to the Licensed
Software, except that Licensee may grant sublicenses to third parties in
connection with its normal business of developing, marketing, distributing,
supporting, and selling Licensed Products, including conducting such
activities through direct sales channels, indirect sales channels (dealers
and distributors), and OEM's. Licensee may not grant sublicenses of any type
to Source Code.


7. Right to Copy Licensed Software and Documentation. Licensee may make such
copies of the Licensed Software and Documentation as are necessary for its
sales, marketing and development purposes so long as such use does not
violate the Confidentiality provisions of this Agreement.


8. Delivery.Licensee acknowledges that it has already received the Licensed
Software, Server Software and Documentation in an acceptable form. The
Source Code shall be delivered to Licensee within ____ days of the date of
this Agreement.


9. Term. The licenses granted to Vital Images herein, and the other rights and
obligations of the parties under this Agreement, shall commence on date of
this Agreement, and shall continue indefinitely unless terminated under the
provisions of Article 24 of this Agreement.


10. Due Diligence. The Licensee shall use commercially reasonable efforts to
bring products to market which incorporate the Licensed Software, and to
pursue required government approvals. During the term of this Agreement,
Licensee will maintain an active program of developing, marketing,
maintaining, selling, licensing or servicing Licensed Products. If during
the term of this Agreement, Licensee shall cease to actively support,
maintain, market, or sell Licensed Products, then the Licensee will be
considered to have breached this Agreement, and such breach shall be grounds
for termination as provided in Article 24 of this Agreement.


11. Taxes. Licensee shall pay all taxes (local, state and federal), including
all sales and use taxes, which may now or hereafter be imposed upon this
license, or the possession or use of the Licensed Software; provided,
however, that Duke shall be responsible for any income tax liability
incurred by Duke for royalties or other income received by Duke under this
Agreement.


12. Ownershipof Software. Duke represents that it is the sole and exclusive
owner of the Licensed Software, Server Software, Source Code, and the
Documentation. Licensee acknowledges that it has no rights in the Licensed
Software, Server Software, Source Code or Documentation except those
expressly granted by this Agreement, and that the Licensed Software, Server
Software, Source Code and Documentation shall not be used in any way not
specifically allowed by this Agreement. Duke acknowledges that any Upgrades
and Enhancements made by Licensee are the property of Licensee, and that
Duke's rights to such Upgrades or Enhancements are limited to those rights
granted in Article 15 of this Agreement. Licensee acknowledges that any
Upgrades and Enhancements made by Duke are the property of Duke, and that
Licensee's rights to such Upgrades or Enhancements are limited to those
rights granted in Articles 13 and 14 of this Agreement.


13. Software Updates and Enhancements. If Duke releases any Updates or
Enhancements to the Licensed Software during the first year of this License,
then those Updates or Enhancements, and associated revised Source Code, will
be furnished to Licensee at no additional cost. Thereafter, Duke will
continue to furnish any Updates or Enhancements released for a reasonable
fee to be negotiated in good faith. Duke's obligation to provide Updates and
Enhancements shall be subject to any restrictions placed upon Duke by its
obligations to others.


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14. Requests for Updates and Enhancements. Licensee may from time to time, and
at its option, find it desirable to ask Duke to develop Updates or
Enhancements to the Licensed Software. Upon receiving such request, Duke
will provide Licensee with timelines and a budget for doing the work. If
Licensee accepts Duke's proposal, then Duke will proceed to develop,
evaluate and document the necessary modifications to the Licensed Software,
and Licensee will reimburse Duke for all direct and indirect costs incurred
in the performance of that research. Updates or Enhancements developed by
Duke with Licensee's funding will be incorporated into this Agreement
without additional fee from Licensee, unless otherwise agreed by the
parties, and Duke will provide the Licensee with the Source code associated
with such Updates or Enhancements.


15. Licensee Updates and Enhancements. Licensee shall have the right to modify
the Licensed Software and Source Code in order to make Updates or
Enhancements for use in Licensed Products. Licensee shall provide Duke with
copies of all such Updates and Enhancements to the Licensed Software
including associated revised Source Code. Duke is hereby granted a paid-up,
royalty free, non-exclusive license to use Licensee Updates and to
incorporate them into software for its own internal purposes or in software
which it may license to others. Duke is hereby granted a paid-up, royalty
free, non-exclusive license to use Licensee Enhancements for its own
internal purposes and to incorporate them into software for such internal
purposes only. Duke may not provide Licensee Enhancements to third parties
without the written consent of Licensee which may include compensation to
Licensee. Licensee's obligation to provide Updates and Enhancements to Duke
shall be subject to any restrictions placed upon Licensee by its obligations
to others. Updates and Enhancements provided by Licensee to Duke will be
provided to Duke without any representations or warranties as to the
performance or safety of ...