Exhibit 10.9
LICENSE AGREEMENT
THIS AGREEMENT is made effective this 18 day of December, 1995, by and between
PRINCETON VIDEO IMAGE, INC., a New Jersey corporation, hereinafter referred to
as "PVI," and THESEUS RESEARCH, INC., a Minnesota corporation, hereinafter
referred to as "RESEARCH."
RECITALS
WHEREAS, RESEARCH owns and controls certain patents, information and knowledge
relating to a new technology of warp algorithms, and has the right to license
all or any part of those rights to others in the United States of America and
elsewhere; and
WHEREAS, PVI desires to obtain a license to make, use and sell products
utilizing such patents, information and knowledge.
NOW, THEREFORE, in consideration of the representations above and the mutual
covenants and promises hereinafter set forth, the parties agree as follows:
ARTICLE I - DEFINITIONS
A. "Affiliate(s)" shall mean any present or future domestic or foreign
corporation which shall be, at the pertinent time, owned or controlled,
directly or indirectly by PVI, or which shall, at the pertinent time, own
or control, directly or indirectly, PVI.
B. "Commercial Sale(s)" shall mean any transfer to, or use by, any party
other than PVI or any Affiliate of PVI of Licensed Products for
consideration, including, but not limited to, by any combination, joint
venture, limited liability company, partnership or other entity, in which
PVI enjoys in any economic sense revenue which is derived from the sale or
use of Licensed Products.
C. "Licensed Product(s)" shall mean any product which embodies the Technology
in whole or in part and which is made by PVI or an Affiliate of PVI.
D. "Net Sales" shall mean the total amount collected by PVI, or its
Affiliates from Commercial Sales of Licensed Product(s) less (i) all
trade, quantity, and cash discounts actually allowed; (ii) all credits and
allowances actually granted on account of rejection, returns, billing
errors, or retroactive price reductions; (iii) demonstrable duties,
customs fees and charges and other landing costs; (iv) excise, sale and
use taxes, and equivalent taxes to the extent indicated on invoices; and
(v) freight, if the obligation of PVI, provided, however that in the event
that a Commercial Sale of License Products occurs by virtue of PVI or its
Affiliate acquiring an economic interest in any Combination, Joint Venture
of other Entity, then the total amount collected by PVI, for purposes of
calculating royalties, shall be equal to and shall not exceed the PVI
share of gross revenue collected by any such Combination, Joint Venture or
Other Entity.
E. "Technology" shall mean any knowledge, information, know-how, techniques
and procedures represented by U.S. Patent Nos. 4,667,190, 1,202,731,
4,835,532 and 5,161,013 and any corresponding foreign applications as well
as continuation and divisional applications of the same.
ARTICLE II - LICENSE GRANT AND COMMERCIAL EFFORT
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A. Subject to the terms and conditions set forth herein, RESEARCH hereby
grants to PVI, and PVI hereby accepts from RESEARCH, a non-exclusive
worldwide license, without right of sublicense, to make, use, modify and
sell Licensed Product(s), provided, however, that PVI may not sublicense
any of the Technology unless the Technology is incorporated in a Licensed
Product.
B. The non-exclusive license granted herein shall terminate upon the
termination of this Agreement in accordance with Article V.
C. PVI and its Affiliates shall alone have the obligation to ensure that any
Licensed Product they sell or which is sold by any Affiliate of PVI is not
defective.
ARTICLE III - ROYALTIES, REPORTS AND RECORDS
A. For the license granted hereunder PVI shall pay, or cause to be paid,
to RESEARCH a one time, nonrefundable, up-front advance licensing fee of
$50,000. The said amount of the up-front advance licensing fee shall
represent a credit against future running royalty obligations of PVI to
RESEARCH up to a maximum of $50,000. PVI shall pay the up-front advance
licensing fee to RESEARCH on the same day as this License Agreement is
executed.
B. For the license granted hereunder, PVI shall pay, or cause to be paid, to
RESEARCH a running royalty equal to two (2%) percent of Net Sales
generated by PVI or its Affiliates multiplied by a percentage which is
commensurate with the percentage which the functionality of the Technology
bears to the functionality of the entire Licensed Product. With respect to
video insertion systems, it is agreed that the appropriate percentage is
ten (10% percent, and that therefore the running royalty to be paid to
RESEARCH is two-tenths of one percent (.2%). With respect to Licensed
Products other than video insertion systems, the parties will subsequently
negotiate a fair functionality percentage. The two (2%) percent running
royalty shall be paid until such time as RESEARCH has received an
aggregate of $500,000 in running royalties, at which time the running
royalty percentage shall be decreased to one (1%) percent until such time
as RESEARCH has received a second $500,000 in running royalties, at which
time the running royalty percentage shall be decreased to one-half of one
percent (.5%) until this Agreement shall terminate. PVI shall be
responsible to RESEARCH for the payment of running royalties due with
respect to Net Sales by Affiliates of PVI as though they were Net Sales of
PVI.
C. Royalties shall be payable only once with respect to Net Sales regardless
of the number of patents included in Technology which are incorporated in
a Licensed Product.
D. Royalty payments as hereinabove required to be made by PVI or its
Affiliates to RESEARCH shall be made in United States dollars within sixty
(60) days following each calendar quarter. Any currency translations that
are necessary to calculate payments shall be made at the exchange rate
used by PVI for financial accounting purposes in accordance with generally
accepted accounting principles. Each such payment shall include the
royalties which shall have accrued during the calendar quarter immediately
preceding and shall be accompanied by a report setting forth the Net Sales
of Licensed Product(s) sold during that quarter. Royalty checks shall be
made payable to RESEARCH and mailed to the address specified in Article
IX. In the event that foreign moneys are not capable of export to the
United States, PVI shall cause the same to be deposited in a bank in such
foreign country in an account which shall be established by RESEARCH.
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X. XXX shall keep and maintain, and shall cause its Affiliates to keep and
maintain for three (3) years records evidencing Net Sales of Licensed
Product(s) that are subject to royalty payments hereunder in order that
RESEARCH may have the right to audit the same. RESEARCH shall pay the cost
of any such audit unless such audit reveals an error prejudicing RESEARCH
by more than ten (10%) percent, in which event the cost of the audit shall
be paid by PVI. Audits shall be conducted during normal business hours by
RESEARCH's then independent accounting firm, and PVI agrees to cooperate,
and to cause its Affiliates to cooperate, fully in such audit. Such
records shall be open to inspection at reasonable times by a certified
public accountant chosen by RESEARCH and acceptable to PVI.
ARTICLE IV - INFRINGEMENT
A. RESEARCH intends to protect the Technology against infringers or otherwise
act to eliminate infringement, when, in RESEARCH'S sole judgment, such
action may be reasonably necessary, proper and justified. In the event
that PVI believes there is infringement of any Technology which is to
PVI'S substantial detriment, PVI shall provide RESEARCH with notification
and reasonable evidence of such infringement.
B. In the event that an alleged infringer of the Technology is identified by
PVI and RESEARCH does not institute an action for infringement against the
alleged infringer within sixty (60) days after receipt of a reasoned
opinion from counsel to initiate enforcement efforts against the alleged
infringer, then PVI shall have the right to bring such action in its name
and at its expense.
C. In the event that RESEARCH, PVI, or an Affiliate of PVI, is sued by a
third party charging patent infringement with respect to the use of
Technology in the manufacture, use or sale of a Licensed Products, the
party sued shall promptly notify the other party. RESEARCH may at its sole
option defend and, if it decides to do so, shall bear the full cost of the
defense of, any patent infringement suit or other suit or action intended
to prevent or curtail the sale of Licensed Products on account of the
inclusion of Technology. If RESEARCH fails to defend any such infringement
action, then PVI at its sole option may elect to defend the same at its
sole cost.
D. If PVI or any of its Affiliates is required to pay a royalty to any person
other than RESEARCH as a result of a final judgment or settlement in an
action described in Article IV, paragraph D above, in order to make, use
and or sell a Licensed Product, the royalty payable to RESEARCH shall be
reduced by the amount of the judgment royalty.
ARTICLE V - TERM AND TERMINATION
A. The term of this Agreement shall end with the expiration of the last of
the patents included in the Technology.
B. RESEARCH shall have the right to terminate this Agreement after sixty (60)
days written notice by certified mail to PVI under the following
circumstances:
1. if royalties due RESEARCH are unpaid;
2. if there is a material breach or default of this Agreement by PVI;
If PVI does not cure the above specified conditions within sixty (60) days
of receipt of notice of termination, such termination shall become
effective.
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C. PVI may terminate the license granted hereunder at any time upon sixty
(60) days notice by certified mail to RESEARCH.
D. Upon termination of this Agreement for any reason, including the end of
the term as specified above, nothing herein shall be construed to release
either party from any obligation which matured prior to the effective date
of termination. PVI and its Affiliates may after the effective date of
such termination sell all Licensed Product(s) in stock and complete
construction of all Licensed Product(s) in the process of manufacture at
the time of termination and sell the same, provided that PVI pay to
RESEARCH royalties on such Licensed Product(s) as specified in this
Agreement.
ARTICLE VI - CONFIDENTIAL INFORMATION
A. Anything in this Agreement to the contrary notwithstanding, any and all
knowledge, know-how, practices, process, or other information (hereinafter
referred to as "Confidential Information") disclosed or submitted in
writing or in other tangible form which is designated as Confidential
Information to either party by the other shall be received and maintained
by the receiving party in strict confidence and shall not be disclosed to
any third party. Furthermore, neither party shall use said Confidential
Information for any purpose other than those purposes specified in this
Agreement. The parties may disclose Confidential Information to employees
requiring access thereto for the purposes of this Agreement provided,
however, that prior to making any such disclosures each such employee
shall be apprised of the duty and obligation to maintain Confidential
Information in confidence and not to use such information for any purpose
other than in accordance with the terms and conditions of this Agreement.
Neither party will be held financially liable for any inadvertent
disclosure, but each will agree to use its reasonable efforts not to
disclose any agreed to Confidential Information.
B. Nothing contained herein will in any way restrict or impair either party's
right to use, disclose, or otherwise deal with any Confidential
Information which at the time of its receipt:
1. is generally available in the public domain, or thereafter becomes
available to the public through no act of the receiving party; or
2. was independently known prior to receipt thereof, or made available
to such receiving party as a matter of lawful right by a third
party.
C. The above obligations for Confidential Information shall be in effect for
a period of three (3) years after the termination of this Agreement.
D. Anything herein to the contrary notwithstanding, each party may make
disclosures of Confidential Information as may be required by any Federal,
State or Municipal authority having jurisdiction over the party. The
parties agree that they will use their best efforts to persuade the
appropriate authority that because of the nature of the Confidential
Information that the Confidential Information not be disclosed.
ARTICLE VII - INDEMNIFICATION AND INSURANCE
A. Except where such damages or losses are a direct result of the Technology,
PVI agrees to indemnify RESEARCH and hold RESEARCH harmless against all
liabilities, demands, damages, expenses, or losses arising (i) from the
manufacture, use, or sale of a Licensed Product by PVI or an Affiliate of
PVI, or of any Combination, Joint Venture of Other
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Business entity in which PVI has an economic interest; or: (ii) from the
use of such licensed product by any third party, including any
Combination, Joint Venture or Other Business Entity in which PVI has an
economic interest; provided, however, that nothing contained herein shall
render PVI or its Affiliates liable for any indemnification of RESEARCH
with respect to any claim of patent infringement involving the Technology
brought by any third party.
B. The provisions of this Article shall survive termination of this
Agreement.
ARTICLE VIII - RESOLUTION OF DISPUTES AND ARBITRATION
A. Both PVI and RESEARCH wish to avoid disputes relating to or arising out of
this Agreement. In the event of any dispute or perceived problem, each
pledges itself to give notice to the other party and to seek an amicable
resolution without regard to arbitration.
B. All disputes arising out of or relating to this Agreement (including any
questions of fraud or questions concerning the validity or enforceability
of this Agreement or any of the rights herein conveyed) shall be settled
by arbitration to be held in Minneapolis, Minnesota. Such arbitration
shall be held in English in accordance with the then-existing Commercial
Rules of the American Arbitration Association and the demand for
arbitration shall be filed with the office of the American Arbitration
Association closest to Minneapolis, Minnesota, U.S.A., and immediate
notice of the filing shall be given to the other party. Each party shall
select an arbitrator from its own management team within thirty (30) days
of the notice of filing of any demand for arbitration and each shall be
responsible for the compensation of its own arbitrator. The two
arbitrators shall confer and select by mutual agreement (and at the joint
expense of the parties) a neutral third arbitrator within sixty (60) days
of the notice of filing of any demand for arbitration. If the parties fail
to appoint their own arbitrator or if the party-appointed arbitrators are
unable to agree upon the neutral arbitrator, the vacancies in the
arbitration panel shall be appointed by and according to the rules of the
American Arbitration Association. After appointment, the neutral
arbitrator shall not consult with either party or the other arbitrators in
advance of the arbitration hearing. The arbitration shall be speedily
concluded with the hearing to take place and the awards to be made as soon
as possible, preferably within sixty (60) days following the appointment
of the neutral arbitrator. Judgment upon the award of all or a majority of
the arbitrators shall be binding upon the parties hereto and may be
entered in any court having jurisdiction. Specific performance and
injunctive relief may be ordered by the award. As the sole exception to
arbitration, each party shall have the right to obtain injunctive relief,
only, from any federal court sitting in the State of Minnesota so as to
preserve the party's rights for resolution in any pending or imminent
arbitration proceedings but no such injunction shall prohibit or postpone
such arbitration proceedings and the injunctions may be modified or
vacated as a result of the arbitration award. Each party shall be
responsible for its own costs and attorneys fees.
C. This Article VIII shall survive any termination of this Agreement or the
rights herein conveyed.
ARTICLE IX - MISCELLANEOUS PROVISIONS
A. The rights and licenses granted by RESEARCH in this agreement are personal
to PVI and may not be assigned, sublicensed or otherwise transferred
without the written consent of RESEARCH. Any attempted assignment or
transfer without such consent shall be void.
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B. PVI hereby assures RESEARCH that PVI will comply with all United States
export controls as set forth in the Export Administration Regulations, 15
C.F.R. section 770 et seq.
C. This Agreement shall be governed by the laws of the State of Minnesota.
D. For purposes of mailings of notices, payments, or other communications,
the addresses of the parties are given below.
In the case of RESEARCH:
Theseus Research, Inc.
Attention: Chief Executive Officer
0000 X.X. Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
In the case of PVI:
Princeton Video Image, Inc.
Attention: President
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
E. No term or provision of this Agreement shall be waived and no breach
excused, unless such waiver or consent shall be in writing and signed by
the party claimed to have waived or consented. No waiver of a breach shall
be deemed to be a waiver of a different or subsequent breach.
F. This Agreement may not be modified, changed or terminated orally. No
change, modification, addition or amendment shall be valid unless in
writing and signed by the parties hereto.
G. This Agreement constitutes and contains the entire Agreement of the
panties respecting the subject matter hereof and supersedes any and all
prior negotiations, correspondence, understanding, and agreements, whether
written or oral, between the parties respecting the subject matter hereof.
H. The provisions of this Agreement shall be deemed severable. Therefore, if
any part of this Agreement is rendered void, invalid or unenforceable,
such rendering shall not affect the validity and enforceability of the
remainder of this Agreement unless the part or parts which are void,
invalid or unenforceable as aforesaid shall substantially impair the value
of the whole Agreement to either party.
IN WITNESS WHEREOF, RESEARCH and PVI have caused this Agreement to be executed
by their duly authorized officers on the dates indicated.
THESEUS RESEARCH, INC. PRINCETON VIDEO IMAGE, INC.
By /s/ Xxxx X. Xxxx By /s/ Xxxxx X. Xxxxxxxx
------------------------------ ------------------------------
Its Chief Executive Officer Its President
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