Exhibit 10.45
LICENSE AGREEMENT
AGREEMENT, made as of the 8th day of March, 1999, by and between ACTV,
INC., a Delaware corporation, having its corporate offices at 1270 Avenue of the
Americas, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 (collectively, "Licensor") and
ACTV ENTERTAINMENT, INC., a New York corporation, having its corporate offices
at 1270 Avenue of the Americas, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
("Licensee").
W I T N E S S E T H
WHEREAS, Licensor is the exclusive owner of the Patents listed on
Exhibit A hereto and various patents pending (the "Patents") and proprietary
technologies, programming methods, the ACTV Programming and Coding Language, and
other trade secrets and know-how, all relating to the inventions described in
Patents (the "Know-how"; the Patents and the Know-how collectively called the
"Intellectual Property"; and
WHEREAS, Licensor wishes to grant to Licensee and Licensee wishes to
obtain from Licensor an exclusive license in the Territory to use and exploit
the Intellectual Property.
NOW, THEREFORE, in consideration of one dollar ($1.00), the foregoing
premises and the mutual covenants herein contained, the parties agree as
follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Patent Improvements" shall mean any improvement, refinement,
enhancement or other modification of the Patents which are directly related to
the Patents.
(b) "Know-how Improvements" shall mean any improvement, refinement,
enhancement or other modification of the Know-how.
(c) "License" shall mean that exclusive license which the Licensor
hereby grants to the Licensee to use and exploit the Intellectual Property,
including Improvements, as set forth in Paragraph 6 hereof, subject to the terms
hereof.
(d) "Net Sales" shall mean subscriber and advertising revenues
received by Licensee and its affiliates and sublicensees, if any, less any
license fees payable to third party programming providers, less trade discounts
allowed, valid credits for claims or allowances, refunds, returns and recalls
and less taxes and other governmental charges levied on or measured by sales and
included in the billing price.
(e) "Territory" shall mean the United States of America and its
possessions, territories and associated commonwealths (including Puerto Rico,
the Virgin Island and Guam), including all United States military installations
located therein.
(f) "Control" and variants thereof shall mean the right to vote,
directly, or indirectly through Controlled entities, by ownership, proxy or
other contract, more than 50% of the outstanding voting securities, or voting
interest, of a corporation, or other business entity.
(g) "Sublicense" shall mean a grant of rights hereunder by License
to another entity to develop and exploit the Intellectual Property in defined
territories and markets consistent with the terms hereof. "Sublicense" shall not
include a grant to an end user or consumer of the Intellectual Property and
services provided by Licensee or a Sublicensee. "Sublicensee" shall mean any
entity receiving a Sublicense pursuant to the terms hereof.
2. Grant of Rights.
(a) Subject to the terms and conditions herein contained and for
good and valuable consideration, the receipt of which is hereby acknowledged,
Licensor hereby grants to Licensee, subject to the terms hereof, an exclusive,
perpetual License to use, distribute and sublicense the Intellectual Property
and Improvements throughout the Territory both for individualized television as
disclosed in the Patents and for all other applications contained in the
patents. Licensor hereby agrees promptly to disclose to Licensee the
Intellectual Property licensed hereby.
(b) All products, including, without limitation, television
programming, which are distributed, sold or utilized in any manner and which
incorporate in any manner all or any part of the Intellectual Property contained
within the License granted hereunder will bear the proper proprietary rights
notice, all as specified in writing by Licensor to Licensee, as shall be
sufficient, in Licensor's judgment, to protect its rights and interest in the
rights granted by Licensor to Licensee pursuant hereto. Licensee further agrees
to give proper notice of trademarks, patents and/or copyrights where applicable
in connection with the use by Licensee of any rights thereunder, as may be
specified from time-to-time by Licensor.
(c) Licensee agrees that during the term of this Agreement, it will
diligently and actively develop, promote, distribute and market the Intellectual
Property in the Territory.
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3. Consideration.
(a) In consideration for the License granted hereunder, Licensee
shall pay Licensor five (5) percent of all Net Sales by Licensee at any time
that Licensor does not Control Licensee.
(b) Royalty payments shall be made within thirty (30) days of the
end of each calendar quarterly period for sales invoiced by Licensee or each
sublicense, as the case may be, during such calendar quarterly period. Each
royalty payment shall be accompanied by a report setting forth in reasonable
detail the Net Sales during the calendar quarter and the calculation of
royalties based thereon. Licensor shall have the right once a year and with
reasonable notice to examine the books and records of Licensee. Such examination
shall take place at Licensee's principal place of business during normal
business hours.
4. Sublicense and Reservation of Rights.
(a) Licensee is permitted to assign or sublicense the rights
hereunder granted to any third party, provided such party agrees in writing to
abide by the terms and conditions of this Agreement to the extent applicable to
it.
(b) All rights not specifically granted to Licensee hereunder are
reserved to Licensor.
5. Confidentiality. Licensee shall maintain in strict confidence and
shall not at any time whether before or after the termination of this agreement
(a) utilize for any purpose other than as permitted under this License, or
cause, enable, assist or permit anyone else to utilize, any of the Intellectual
Property or Improvements; (b) disclose to anyone any such Intellectual Property,
Improvements and/or related information (the "Confidential Information") which
is not generally available to the public unless, (i) through no act of Licensee
contrary to the obligations imposed hereby, such Confidential Information
becomes known to the public prior to the date of Licensee's disclosure, (ii)
such Confidential Information is approved for public release by Licensor, (iii)
such Confidential Information is rightfully received by Licensee from a third
party without restrictions and without breach of Licensee's obligations
hereunder, (iv) such Confidential Information is independently developed by
Licensee without breach of this Agreement, (v) such Confidential Information is
required to be disclosed by judicial or governmental proceeding subject to a
protective order or (vi) such disclosure is necessary or appropriate to the
exploitation of the License granted hereby and only then after such person or
entity to whom disclosure is to be made executes a confidentiality agreement
acceptable to Licensor. Notwithstanding the foregoing, Licensee may disclose
such Confidential Information to its employees who need to know such information
in order for Licensee to use and exploit the Intellectual Property pursuant to
the terms of this Agreement if it has taken reasonable steps to impose the
aforesaid covenants of confidentiality on said employees and to ensure that said
employees will not violate said covenants, including, but not
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limited to, causing said employees to enter into written agreements in which
said covenants of confidentiality are effectively imposed upon them. Licensee
will copy Licensor's Confidential Information only to the extent reasonably
necessary to enable Licensee to exercise its rights under the License. In making
any such copies, Licensee agrees to produce faithfully all notices respecting
copyright, trade secrets, and other proprietary rights. Nothing contained herein
shall prevent Licensee from disclosing in general terms the nature of its
relationship with Licensor.
6. Improvements. Any Improvements upon the Intellectual Property made,
conceived, invented or wholly acquired by Licensor during the term of this
Agreement, shall be included hereunder, and Licensee shall have the right to
such Improvements (limited, however, by the specific terms hereof) without
payment other than the royalties provided for herein. Licensee agrees that if
during the term of this Agreement it should make, conceive, invent or acquire
any improvements to the Intellectual Property, or any component or portion
thereof, it will grant, and hereby does grant, to Licensor a royalty-free,
exclusive, paid up, perpetual license to use such improvements, on a world-wide
basis. Each party agrees to disclose promptly to the other party all
improvements so made, conceived, invented or acquired during the term of this
Agreement which are based, in whole or in part, on any of the Intellectual
Property or Improvements.
7. Representations. Licensor represents and warrants that: (i) it has
the right and authority to enter into this Agreement; (ii) to the best of its
knowledge, it is the sole owner or licensee of all Intellectual Property and
Improvements licensed hereunder and the use thereof will not violate any law or
infringe upon or violate any rights of any person, firm or corporation; (iii) it
is not a party to any other existing agreement which would prevent it from
entering into or performing its obligations under the terms of this Agreement
and (iv) to the best of its knowledge, the Patents have been validly issued,
have not been challenged and no adverse claim has been asserted.
8. Litigation. Licensee shall have the sole responsibility at its sole
cost and expense for protecting the rights granted and to be granted herein
against any third party infringement. Licensee agrees promptly and diligently to
seek to protect all rights granted and to be granted herein from and against any
infringement by third parties.
9. Insurance.
(a) During the term of this Agreement, Licensee will maintain, at
its own expense, in full force and effect, with a responsible insurance carrier,
reasonably acceptable to Licensor, such product liability insurance as is
customary for a business of the type, nature and size of Licensee.
(b) Licensee shall, from time to time upon reasonable request by the
other party, promptly furnish or cause to be furnished to Licensor, a
certificate evidencing the insurance required hereby.
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10. Termination.
(a) In the event that the Licensee materially defaults or breaches
any provision of this Agreement, Licensor reserves the right to terminate this
Agreement upon written notice to Licensee; provided, however, that if Licensee,
within 30 days of such written notice, cures such default or breach, this
Agreement shall continue in full force and effect as if such default or breach
had not occurred; and provided, further, should Licensee dispute any such
alleged breach of this Agreement and such dispute is either submitted to
arbitration in due course pursuant to Paragraph 18 hereof or being resolved by
the parties hereto, then there shall be no default hereunder during the period
in which the parties are in arbitration or diligently, and in good faith,
attempting to resolve such dispute; provided, that after the parties reach an
agreement or an arbitrator makes its decision, Licensee shall comply therewith
within 15 days thereof.
(b) In the event of any adjudication of bankruptcy which is not
vacated within 30 days, appointment of a receiver by a court of competent
jurisdiction who is not removed within 30 days, assignment for the benefit of
creditors or levy of execution directly involving Licensee, this Agreement shall
thereupon forthwith terminate and no longer be of any further force and effect.
(c) In the event of termination of this Agreement for any reason
whatsoever:
(i) Licensee shall deliver to Licensor all books, notes,
drawings, writings and other documents, in the possession of
Licensee or the Permitted Parties relating to the Intellectual
Property and any Improvements licensed to it under Paragraph
2(a) hereof (except that in connection with any Improvements
made by Licensee it may retain copies of all such items
delivered to Licensor and may continue to use any such
Improvements made by it), together with all copies of any
Confidential Information.
(ii) All rights granted by Licensor to Licensee shall
forthwith revert to Licensor.
(iii) Licensor (in the event this Agreement is terminated by
reason of Licensee's default hereunder) shall continue to be
entitled to use or exploit any exclusive royalty-free license
to new developments of Licensee granted pursuant to Paragraph
6 hereof.
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(d) In the event of termination of this Agreement, Licensee shall
assign to Licensor, at the request of Licensor, all of its right, title and
interest in and to any contracts or agreements relating, directly or indirectly
to the Intellectual Property.
11. Notices. All notices to be given or payments made hereunder shall
be in writing and sent by hand, federal express or by registered or certified
mail, postage prepaid, addressed to the respective parties at the addresses set
forth above. All notices shall be effective upon receipt. Copies of all notices
to Licensor or Licensee shall be sent to Xxxxxxx, Xxxxxx & Xxxxxxxxx, LLP, 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Xxx X. Xxxxxxxxx, Esq.
12. New York Law. This Agreement and all matters or issues collateral
thereto shall be governed by and construed and enforced in accordance with the
laws of the State of New York applicable to contacts made and performed entirely
therein.
13. Entire Understanding. This Agreement contains the entire
understanding of the parties hereto relating to the subject matter herein
contained, and supersedes any and all prior agreements or understandings
relating to the subject matter hereof. Without limiting the generality of the
foregoing, this License Agreement amends, restates in its entirety and
supercedes that License Agreement dated March 14, 1997 by and between Licensor
and Licensee. This Agreement may not be changed except by a writing signed by
the party sought to be charged therewith.
14. No Waiver. No waiver by either party, whether express or implied,
of any provisions of this Agreement or of any breach or default by either party,
shall constitute a continuing waiver or a waiver of any other provision of this
Agreement, and no such waiver by either party shall prevent such party from
enforcing any and all provisions of this Agreement or from acting upon the same
or any subsequent breach or default of the other party. No waiver of any
provision hereunder shall be effective unless it is in writing signed by the
against whom enforcement thereof is sought.
15. Separability. The provisions set forth in this Agreement shall be
considered to be separable and independent of each other. In the event that any
provision of this Agreement shall be determined in any jurisdiction to be
unenforceable, such determination shall not be deemed to affect the
enforceability of any other remaining provision and the parties agree that any
court making such a determination is hereby requested and empowered to modify
such provision and to substitute for such enforceable provision such limitation
or provision of a maximum scope as the court then deems reasonable and
judicially enforceable and the parties agree that such substitute provision
shall be as enforceable in said jurisdiction as if set forth initially in this
Agreement. Any such substitute provision shall be applicable only in the
jurisdiction in which the original provision was determined to be unenforceable.
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16. Relationship of the Parties. Nothing contained herein shall be
construed to place the parties in the relationship of partners or joint
venturers and neither party shall have the power to bind or obligate the other.
17. Survival. Unless otherwise provided, the obligations of the parties
hereto shall survive the termination of the term of this Agreement.
18. Arbitration. All claims, demands, disputes, controversies,
differences or misunderstandings between or among the parties hereto or any
other persons bound hereby arising out of or by virtue of this Agreement, shall
be submitted to and determined by arbitration in the City of New York. If the
parties to a dispute arising out of this Agreement are unable to agree on an
arbitrator within 10 days after any party shall have given written notice to the
other that it desires to submit any issue to arbitration, then the American
Arbitration Association shall be designated by any party to appoint an
arbitrator and to arbitrate the matter under its rules. The award of the
arbitrator shall be made in writing, shall be within the scope of this
Agreement, shall not change any of its terms or conditions, shall be binding and
conclusive on all parties, and shall include a finding for the payment of the
costs of the arbitration proceeding (including reasonable attorneys' fees). It
is further agreed that judgment of a court having jurisdiction may be entered
upon the award of the arbitrator.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
ACTV, INC.
By:
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Xxxxxxx X. Xxxxxxx,
Chairman and Chief Executive Officer
ACTV ENTERTAINMENT, INC.
By:
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Xxxxx Xxxxx, President
