EXHIBIT 10.12
LICENSE AGREEMENT
THIS LICENSE AGREEMENT dated as of December 20, 1994 (the "Effective
Date"), is entered into between SRI INTERNATIONAL, a California nonprofit public
benefit corporation ("SRI"), having a place of business located at 000
Xxxxxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000-0000, and Corona Corporation, a
California corporation ("CORONA"), having a place of business located at 000
Xxxxxxxxxx Xxxxxx, Xxxxxxxx 000, Xxxxx Xxxx, Xxxxxxxxxx 00000-0000.
WITNESSETH:
WHEREAS, SRI owns or has rights in certain patent rights, copyrights, and
know-how relating to Speech Recognition Technology (as later defined herein).
WHEREAS, CORONA desires to obtain a license under SRI's rights in such
patent rights, copyrights, and know-how, on the terms and subject to the
conditions of the Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. DEFINITIONS
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For purposes of the Agreement, the terms defined in this article shall have
the respective meanings set forth below:
1.1 "Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by, or is under common control
with, such Person. A Person shall be regarded as in control of another Person if
it owns, or directly or indirectly controls, at least fifty percent (50%) of the
voting stock or other ownership interest of the other Person, or if it directly
or indirectly possesses the power to direct or cause the direction of the
management and policies of the other Person by any means whatsoever.
1.2 "CORONA Improvements" means those improvements and/or new developments
in Speech Recognition Technology (including improvements to the SRI Software) in
which CORONA has an ownership or licensable interest (with the right to
sublicense without payment of royalties) and have been or are developed,
authored, conceived, or reduced to practice as of the Effective Date or during
the Exclusive Period. CORONA Improvements shall include inventions, trade
secrets, know-how, CORONA Know-How, discoveries, algorithms, and software (in
both source code and object code). CORONA Improvements shall not include such
improvements and/or new developments developed, authored, conceived, or reduced
to practice by or for CORONA after the Exclusive Period.
1.3 "CORONA Know-How" means (i) information which is not generally known
by the public; and (ii) non-confidential information relating to Speech
Recognition Technology in which CORONA has an ownership or licensable interest
(with the right to sublicense without payment of royalties) as of the Effective
Date or developed or acquired during the Exclusive Period. Such information
includes but is not limited to technical data, trade secrets, algorithms,
formulae, procedures, protocols, rules of thumb, techniques and results of
experimentation and testing, including information contained in any invention
disclosures and/or patent applications which are CORONA Improvements.
Corona License Agreement, December 20, 1994
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
1
1.4 "CORONA Proprietary Rights" means any intellectual property rights
(including copyright(s), patent rights, CORONA Know-How and/or trade secrets) in
the CORONA Improvements in which CORONA has an ownership or licensable interest
(with the right to sublicense without payment of royalties).
1.5 "Cumulative Revenues" means the total of all revenues for the period
specified as recorded in the financial statements of CORONA in accordance with
standard accounting procedures.
1.6 "Exclusive Fields" means Speech Recognition Technology, provided,
however, that Nonexclusive Fields are specifically excluded from the definition
of Exclusive Fields.
1.7 "Exclusive Period" means the period commencing with the Effective
Date and ending on the earlier of December 20, 1999 or a trigger event whereby
CORONA's exclusivity is terminated as described in Paragraphs 5.1, 7.1 and/or
7.2.
1.8 "Existing SRI Software" means SRI Software existing on the Effective
Date in which SRI has an ownership or licensable interest (with the right to
sublicense without the payment of royalties).
1.9 "Existing SRT" means Speech Recognition Technology existing on the
Effective Date in which SRI has an ownership or licensable interest (with the
right to sublicense without the payment of royalties).
1.10 "Nonexclusive Fields" means
(a) Education/training including the use of Speech Recognition
Technology for educational purposes and, in the case of language education,
the use of Speech Recognition Technology for educational and entertainment
purposes.
(b) Language translation including the use of Speech Recognition
Technology in spoken language translation systems from any language to any
language;
(c) Language and/or dialect identification except for telephony
applications; and
(d) Topic spotting when used in conjunction with Speech Recognition
Technology in the context of person-to-person conversation except for
telephony applications.
1.11 "Person" means an individual, corporation, partnership, trust,
business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.
1.12 "Speech Recognition Technology" means information and know-how,
whether or not patentable, related to the perception by a machine of human
speech, the conversion of such speech to text, and/or the establishment of the
meaning of speech so as to enable the machine to respond to the intentions of
the speaker by template-based methods. Speech Recognition Technology shall
include but not be limited to all forms of:
Corona License Agreement, December 20, 1994
2
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
[***]
1.13 "SRI Software" means the following computer programs and data sets,
in which SRI has an ownership or licensable interest (with the right to
sublicense without the payment of royalties), as further identified in Appendix
A:
[***]
1.14 "SRI Improvements" means those improvements and/or new developments
in Speech Recognition Technology (including improvements to the SRI Software) in
which SRI has an ownership or licensable interest (with the right to sublicense
without the payment of royalties) and which are developed, authored, conceived,
or reduced to practice during the Exclusive Period. SRI Improvements shall
include inventions, trade secrets, know-how, discoveries, algorithms, and
software (in both source code and object code). SRI Improvements shall not
include (a) such improvements and/or new developments
Corona License Agreement, December 20, 1994
3
developed, authored or invented by or for SRI after the Exclusive Period; and/or
(b) contract deliverables as provided in Paragraph 3.4(d).
1.15 "SRI Know-How" means (i) information which is not generally known by
the public; and (ii) non-confidential information relating to Speech Recognition
Technology in which SRI has an ownership or licensable interest as of the
Effective Date or developed or acquired during the Exclusive Period, whether or
not it is of a confidential nature. Such information includes but is not limited
to technical data, trade secrets, algorithms, formulae, procedures, protocols,
rules of thumb, techniques and results of experimentation and testing, including
information contained in any invention disclosures and/or patent applications
which are SRI Improvements.
1.16 "SRI Patent Rights" means:
(a) The pending United States patent application(s) and patents
listed in Appendix B and all corresponding foreign patent applications
heretofore or hereafter filed or having legal force in any jurisdiction
worldwide owned by or licensed to SRI;
(b) All patent applications that claim any Existing SRT and/or an
SRI Improvement heretofore or hereafter filed or having legal force in any
jurisdiction worldwide in which SRI has ownership or licensable interest
(with the right to sublicense without payment of royalties);
(c) All patents that have issued or in the future issue from the
patent applications described in clauses (a) and (b) above, including
utility, model and design patents and certificates of invention; and
(d) All divisionals, continuations, continuations-in-part,
reissues, renewals, extensions or additions to any such patent applications
and patents; all to the extent and only to the extent that SRI has the
right to grant licenses, immunities or other rights thereunder as of the
Effective Date or during the term of the Agreement.
1.17 "SRI Proprietary Rights" means any intellectual property rights
(including copyright(s), patent rights, know-how and/or trade secrets) in the
Existing SRT and in the SRI Improvements, including but not limited to SRI's
copyright in the SRI Software, SRI Patent Rights and SRI Know-How, in which SRI
has an ownership and/or licensable interest (with the right to sublicense
without payment of royalties).
2. REPRESENTATIONS AND WARRANTIES
---------------------------------
2.1 DISCLAIMER OF WARRANTIES BY SRI. NOTHING IN THE AGREEMENT SHALL BE
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CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY SRI THAT ANY PATENT WILL
ISSUE BASED UPON ANY PENDING PATENT APPLICATION INCLUDED IN THE SRI PATENT
RIGHTS, THAT ANY PATENT INCLUDED IN THE SRI PATENT RIGHTS WHICH ISSUES WILL BE
VALID, OR THAT THE USE OF ANY SRI PATENT RIGHTS, SRI COPYRIGHTS OR SRI KNOW-HOW
WILL NOT INFRINGE THE PATENT OR PROPRIETARY RIGHTS OF ANY OTHER PERSON. SRI
PROVIDES ANY EXISTING SRI SOFTWARE AND ANY SOFTWARE IN THE SRI IMPROVEMENTS
(INCLUDING SOURCE CODE AND OBJECT CODE FORMS) "AS IS." FURTHERMORE, SRI MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE SRI
PATENT RIGHTS, SRI
Corona License Agreement, December 20, 1994
4
COPYRIGHTS OR SRI KNOW-HOW, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF NON-
INFRINGEMENT OF THIRD PARTY RIGHTS OR ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
2.2 LIMITATION OF LIABILITY.
------------------------
(a) SRI: IN NO EVENT SHALL SRI BE LIABLE TO CORONA OR ANY THIRD PARTY FOR
---
ANY INDIRECT, INCIDENTAL, EXEMPLARY, SPECIAL OR CONSEQUENTIAL DAMAGES HOWEVER
CAUSED AND ON ANY THEORY OF LIABILITY, ARISING OUT OF OR RELATED TO THIS
AGREEMENT, INCLUDING BUT NOT LIMITED TO LOSS OF ANTICIPATED PROFITS, EVEN IF SRI
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL SRI BE
LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE PRODUCTS OR SERVICES. IN NO EVENT
SHALL SRI'S LIABILITY TO CORONA AND ANY THIRD PARTY EXCEED THE AMOUNT OF MONEY
RECEIVED BY SRI FROM CORONA UNDER THIS AGREEMENT.
(b) CORONA: THE FOLLOWING LIMITATION OF LIABILITY FOR CORONA SHALL ONLY
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APPLY TO SITUATIONS WHERE SRI HAS LICENSED CORONA IMPROVEMENTS TO THIRD PARTIES
AND CORONA DID NOT CONTRIBUTE TO THE RESULTING LIABILITY: IN SUCH CASES, CORONA
SHALL NOT BE LIABLE TO SRI OR ANY THIRD PARTY FOR ANY INDIRECT, INCIDENTAL,
EXEMPLARY, SPECIAL OR CONSEQUENTIAL DAMAGES HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY, INCLUDING BUT NOT LIMITED TO LOSS OF ANTICIPATED PROFITS, OR THE
COSTS OF PROCUREMENT OF SUBSTITUTE PRODUCTS OR SERVICES, EVEN IF CORONA HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
2.3 DISCLAIMER OF WARRANTIES BY CORONA. NOTHING IN THE AGREEMENT SHALL BE
----------------------------------
CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY CORONA THAT ANY PATENT
WILL ISSUE BASED UPON ANY PENDING PATENET APPLICATION INCLUDED IN THE CORONA
IMPROVEMENTS, THAT ANY PATENT INCLUDED IN THE CORONA IMPROVEMENTS WHICH ISSUES
WILL BE VALID, OR THAT THE USE OF ANY CORONA PATENT RIGHTS, CORONA COPYRIGHTS OR
CORONA KNOW-HOW WILL NOT INFRINGE THE PATENT OR PROPRIETARY RIGHTS OF ANY OTHER
PERSON. CORONA PROVIDES ANY SOFTWARE IN THE CORONA IMPROVEMENTS (INCLUDING
SOURCE CODE AND OBJECT CODE FORMS) "AS IS." FURTHERMORE, CORONA MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE CORONA
PATENT RIGHTS, CORONA COPYRIGHTS OR CORONA KNOW-HOW, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Each party hereby represents and warrants to the other party as follows:
2.4 Corporate Existence and Power. Such party (a) is a corporation duly
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organized, validly existing and in good standing under the laws of the state in
which it is incorporated; (b) has the corporate power and authority and the
legal right to own and operate its property and assets, to lease the property
and assets it operates under lease, and to carry on its business as it is now
being conducted and (c) is in compliance with all requirements of applicable
law, except to the extent that any noncompliance would not have
Corona License Agreement, December 20, 1994
5
a material adverse effect on the properties, business, financial or other
condition of it and would not materially adversely affect its ability to perform
its obligations under the Agreement.
2.5 Authorization and Enforcement of Obligations. Such party (a) has the
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corporate power and authority and the legal right to enter into the Agreement
and to perform its obligations hereunder and (b) has taken all necessary
corporate action on its part to authorize the execution and delivery of the
Agreement and the performance of its obligations hereunder. The Agreement has
been duly executed and delivered on behalf of such party, and constitutes a
legal, valid, binding obligation, enforceable against such party in accordance
with its terms.
2.6 No Consents. All necessary consents, approvals and authorizations of
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all governmental authorities and other Persons required to be obtained by such
party in connection with the Agreement have been obtained.
2.7 No Conflict. The execution and delivery of the Agreement and the
-----------
performance of such party's obligations hereunder (a) do not conflict with or
violate any requirement of applicable laws or regulations, and (b) do not
conflict with, or constitute a default under, any contractual obligation of it.
3. LICENSE AND OPTION GRANT
---------------------------
3.1 Exclusive License Grant to CORONA.
---------------------------------
(a) SRI hereby grants and CORONA hereby accepts a royalty-free,
worldwide license in the Exclusive Fields under the SRI Proprietary Rights
to:
(i) With respect to software, reproduce, distribute, use,
make, modify, make derivatives of, and sublicense the Existing SRI
Software (in both source code and object code forms), and any software
in the SRI Improvements (in both source and object code forms), and
sublicense such rights through multiple levels of sublicensees;
(ii) With respect to inventions and know-how, reproduce,
distribute, use, make, modify, and sell products and services based on
the Existing SRT (not including the SRI Software) and/or the SRI
Improvements (not including any software in the SRI Improvements) and
sublicense such rights through multiple levels of sublicensees; and
(iii) Establish trademarks in connection with the Existing SRT
and/or the SRI Improvements, provided that they can not use the xxxx
"SRI" or any other SRI trademarks.
(b) Notwithstanding the license grant above, in any event that CORONA
discloses such SRI source code in the Exclusive Fields (other than
disclosure to CORONA employees and/or to any independent contractors
employed by CORONA without sublicense rights) CORONA shall promptly provide
written notification of such disclosure to SRI.
(c) These rights shall be exclusive during the Exclusive Period and
nonexclusive and perpetual (subject to Article 5 and Paragraphs 7.1, 7.3
and 7.4) after the termination of the Exclusive Period. If CORONA does not
exercise its
Corona License Agreement, December 20, 1994
6
right as stated in Paragraph 3.2 below, then such existing license rights
shall remain royalty-free after the end of the Exclusive Period.
3.2 Extension of Exclusivity. So as to extend the Exclusive Period, SRI
------------------------
grants CORONA the first right to negotiate a worldwide, exclusive license in the
Exclusive Fields under the SRI Proprietary Rights to the Existing SRT, Existing
SRI Software and the SRI Improvements. Such option shall expire on June 15,
1999. Both parties agree to make a good faith effort to negotiate a license
agreement under fair and reasonable terms which reflect the commercial potential
of the SRI Proprietary Rights at the time the right is exercised. If CORONA
fails to elect its right or if the parties fail to execute a license agreement
by June 15, 1999, then SRI shall be free to license the SRI Proprietary Rights
nonexclusively in all fields without restriction after the Exclusive Period.
3.3 Nonexclusive License Grant to CORONA. SRI hereby grants and CORONA
------------------------------------
hereby accepts a royalty-free, perpetual (subject to Article 5 and Paragraphs
7.1, 7.3 and 7.4) worldwide license in the Nonexclusive Fields under the SRI
Proprietary Rights to:
(a) Reproduce, distribute, use, make, modify, make derivatives of,
and sublicense the SRI Software (in both source code and object code forms)
and any software in the SRI Improvements (in both source and object code
forms) and sublicense such rights through multiple levels of sublicensees;
and
(b) Reproduce, distribute, use, make, modify, sell and sublicense
products and services based on the Existing SRT (not including the SRI
Software) and/or the SRI Improvements (not including any software in the
SRI Improvements) and sublicense such rights through multiple levels of
sublicensees.
Notwithstanding the license grant above, CORONA shall not disclose (other than
disclosure to CORONA employees and/or to any independent contractors employed by
CORONA without sublicense rights), license for use, or distribute in any manner,
any SRI source code in the Nonexclusive Fields, without the prior written
consent of SRI. Such permission shall not be unreasonably withheld.
3.4 Reservation of Certain Rights. Notwithstanding the foregoing, the
-----------------------------
licenses granted in the Agreement are subject to SRI's retention of the
following rights:
(a) The non-exclusive right of SRI to use the SRI Proprietary Rights
to solicit and execute research contracts from the U.S. Government in
Speech Recognition Technology and in connection therewith, to execute
government-use licenses, regardless of field of use or level of
classification;
(b) Rights to the Japanese Toolkit to the extent granted under an
agreement as amended between SRI and Nippon Data, a subsidiary of Nippon
Telephone and Telegraph dated October 31, 1991.
(c) The non-exclusive right of SRI to use the SRI Proprietary Rights
to solicit and execute commercial research and development contracts in
Speech Recognition Technology, including those research projects which
qualify for government matching funds (e.g. Small Business Technology
Transfer (STTR), Advanced Technology Program (ATP), Technology Reinvestment
Project (TRP)), provided that during the Exclusive Period:
Corona License Agreement, December 20, 1994
7
(i) SRI shall obtain CORONA's consent if such contracts provide
for deliverables or require licenses in the Exclusive Fields; and
(ii) If SRI solicits and executes research or development
contracts or enters into work for hire arrangements pertaining to Speech
Recognition Technology, SRI shall secure an ownership or licensable
interest to any Speech Recognition Technology developed under such
arrangements so that such technology improvements are within the scope of
this Agreement and CORONA receives rights and access to such technology as
SRI Improvements.
(d) The right to grant to any commercial client which executes a
research and development contract with SRI an exclusive license under such
contract for deliverables which consist of a specific software application
for that commercial client for use in the Nonexclusive Fields.
3.5 License Grant to SRI. CORONA hereby grants and SRI hereby accepts a
--------------------
royalty-free, perpetual (subject to Paragraphs 7.1 and 7.5), non-exclusive,
worldwide license in the Nonexclusive Fields under the CORONA Proprietary
Rights, to:
(a) Reproduce, distribute, use, make, modify, make derivatives of,
and sublicense any software in the CORONA Improvements (in object code form
only) and sublicense such rights through multiple levels of sublicensees;
(b) Reproduce, distribute, use, make, modify, sell, and sublicense
products and services based on the CORONA Improvements (not including any
software in the CORONA Improvements) and sublicense such rights through
multiple levels of sublicensees;
(c) Reproduce, use, make, modify and make derivatives of the source
code in the CORONA Improvements for SRI's own internal research purposes.
(d) Sublicense any CORONA Improvements in source code form:
(i) Only to the U.S. government in connection with research and
development contracts executed with SRI. Consistent with the rights of
a not-for-profit research corporation under the FARS, DFARS, the
Xxxxxxxxxx-Xxxxxx Act and the Xxxx-Xxxx Act, SRI shall use reasonable
effort to control and restrict the distribution of CORONA Improvements
to government contractors. Any such sublicense shall be subject to the
confidentiality restrictions described in Section 8; and
(ii) To commercial clients for use in the Nonexclusive Fields
only with the prior written approval of CORONA. Such approval shall
not be unreasonably withheld.
3.6 Technical Assistance.
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3.6.1 During the term of the Agreement, upon reasonable notice and
during normal business hours, both parties shall provide the other such
technical assistance regarding the Speech Recognition Technology as the
other party reasonably requests to conduct its activities contemplated by
the Agreement.
3.6.2 Each party shall reimburse the other for its standard research
or consulting costs for any such technical assistance, determined in
accordance with its
Corona License Agreement, December 20, 1994
8
own normal business practice applied on a consistent basis at a billing
rate no less favorable than the best terms offered to their other
commercial research clients. Upon request, each party shall provide the
other with estimates of the anticipated costs of any requested technical
assistance prior to undertaking such technical assistance.
3.6.3 During the term of the Agreement, CORONA shall give SRI first
consideration with regards to third parties to provide any subcontract
research or development services to CORONA regarding the research and
development of potential and actual products and/or services based on
Speech Recognition Technology.
3.7 Government Rights. This Agreement is subject to all of the terms and
-----------------
conditions of Xxxxx 00 Xxxxxx Xxxxxx Code Sections 200 through 204, including an
obligation that products resulting from this license which are sold or produced
in the United States be "manufactured substantially in the United States," and
CORONA agrees to take all reasonable action necessary on its part as licensee to
enable SRI to satisfy its obligation thereunder, relating to the Existing SRI
Software, the Existing SRT, and the SRI Improvements.
4. COMPENSATION
---------------
Recognizing that the rights and licenses conveyed herein by each party to
the other constitute due compensation to each party, both parties agree to waive
all license issue fees, minimum royalties, and running royalties (but for those
fees and royalties which may be negotiated upon exercise of the option granted
CORONA in Paragraph 3.2).
5. DILIGENCE OBLIGATIONS
------------------------
CORONA shall be considered viable for purposes of the SRI Exclusive License
if, starting as of the Effective Date and:
(a) As of December 31, 1996, CORONA
(i) has raised no less than Two Million Dollars ($2,000,000) of
capital in addition to any capital provided by SRI; or
(ii) has Cumulative Revenues in an amount no less than One
Million Dollars ($1,000,000);
(b) And, as of December 31, 1997, CORONA has Cumulative Revenues in
an amount no less than Four Million Dollars ($4,000,000); and
(c) As of December 31, 1998, CORONA has Cumulative Revenues in an
amount no less than Eight Million Dollars ($8,000,000); and
(d) As of December 31, 1999, CORONA has Cumulative Revenues in an
amount no less than Thirteen Million Dollars ($13,000,000).
In the event that CORONA fails to meet the viability criteria stated above and
fails to correct such condition within one hundred and twenty (120) days after
receiving written notice thereof from SRI, SRI shall have the right to terminate
SRI's exclusive license to CORONA in the Exclusive Fields as conveyed in
Paragraph 3.1, terminate CORONA's
Corona License Agreement, December 20, 1994
9
right to extend its exclusivity as conveyed in Paragraph 3.2, and convert
CORONA's license to a royalty-bearing nonexclusive license on a reasonable
industry standard basis. If, after ninety (90) days from SRI's written notice of
termination of exclusivity, the parties have failed to agree on a royalty, the
royalty dispute shall be submitted to binding arbitration as provided in
Paragraph 16.2
6. FINANCIAL REPORTS
--------------------
Within ninety (90) days following the end of each calendar year during the
term of the Agreement, CORONA shall prepare and deliver to SRI a copy of
CORONA's year-end written financial statements prepared for review by the CORONA
board of directors.
7. TERMINATION
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7.1 Termination by CORONA. CORONA may terminate this Agreement by giving
---------------------
SRI notice in writing (by registered or certified mail, return receipt). The
Agreement shall terminate thirty (30) days after SRI's receipt of such notice.
7.2 Bankruptcy. In the event that:
-----------
(a) CORONA voluntarily commences any action or seeks any relief
regarding its liquidation, reorganization, dissolution or similar act or
under any bankruptcy, insolvency or similar law; or
(b) If a proceeding is commenced or an order, judgment or decree is
entered seeking the liquidation, reorganization, dissolution or similar act
or any other relief under any bankruptcy, insolvency or similar law against
CORONA, without its consent, which continues undismissed or unstayed for a
period of sixty (60) days;
then SRI may terminate the exclusivity granted to CORONA by SRI in Paragraph 3.1
and convert the rights and license granted by SRI to CORONA to a royalty-bearing
nonexclusive license with right to sublicense. Surviving are all other terms of
this Agreement, including:
(i) CORONA's obligation to pay any research fees and/or patent
reimbursements outstanding as of the date of termination of exclusivity;
and
(ii) SRI's ability to terminate this Agreement as provided in
Paragraph 7.3.
7.3 Termination by SRI for Cause. SRI may terminate this Agreement upon
-----------------------------
the occurrence of one of the events set forth below if CORONA fails to cure such
breach (or if such breach cannot be cured within such period, fails to commence
good faith efforts to cure the breach) within forty-five (45) days of notice of
such default by SRI:
(a) If CORONA is in material breach of its obligations under this
Agreement;
(b) If CORONA provides false reports under Section 6 in an
intentional or grossly negligent manner; or
(c) If the bankruptcy proceedings described in Paragraph 7.2 continue
undismissed or unstayed for a period of more than one (1) calendar year
after filing.
Corona License Agreement, December 20, 1994
10
7.4 Effect of Termination under 7.1 and/or 7.3. Surviving the
-------------------------------------------
termination(s) described in Paragraphs 7.1 and/or 7.3 are:
(a) Any obligation accruing prior to such expiration or termination
including the reimbursement of patent expenses;
(b) Any cause of action or claim of CORONA or SRI, accrued or to
accrue, because of any breach or default by the other party;
(c) SRI's license to the CORONA Improvements, as stated in Paragraph
3.5. Such license shall remain irrevocable;
(d) Any sublicense(s) with third party(ies) executed by CORONA prior
to the date of termination provided that such third party(ies) shall pay
all further royalties required in such sublicenses (if any) directly to
SRI; and
(e) The provisions of Paragraphs 2.1, 2.2, 2.3 and Articles 8, 15,
16.
If CORONA establishes or has established a trademark(s) in connection with
the SRI Proprietary Rights, all right, title, interest and ownership of such
trademark(s) shall be assigned to SRI upon termination of this Agreement.
7.5 Termination by CORONA for Cause. If SRI is in material breach of its
--------------------------------
obligations under this Agreement and fails to cure such breach (or if such
breach cannot be cured within such period, fails to commence good faith efforts
to cure the breach) within forty-five (45) days of notice of such default by
CORONA, CORONA may terminate its license grant to SRI under Paragraph 3.5.
Surviving termination by CORONA are:
(a) Any cause of action or claim of CORONA or SRI, accrued or to
accrue, because of any breach or default by the other party;
(b) Any sublicense(s) with third party(ies) executed by SRI prior to
the date of termination provided that such third party(ies) shall pay all
further royalties required in such sublicenses (if any) directly to CORONA;
and
(c) All other terms and conditions of this Agreement but for
Paragraph 3.5.
Corona License Agreement, December 20, 1994
11
8. PROPRIETARY INFORMATION AND SECRECY
--------------------------------------
8.1 Each party agrees that all information, whether oral, written or in
other recorded form, that is, in the case of tangible items, conspicuously
labeled as "Confidential" or "Proprietary" or, in the case of an oral
disclosure, so identified at the time of such disclosure, and that is received
from the other party pursuant to this Agreement (the "Information"),
(i) Shall be kept confidential by the receiving party by using at
least the same physical and other security measures used for its own
confidential information, but not less than reasonable care and
(ii) Both parties shall use commercially reasonable methods to
protect their own and each others' Information including requiring that the
receiving party and its subcontractors and sublicensees be obligated in
writing to use the same degree of care to hold such Information
confidential as they normally use to preserve and safeguard their own
confidential information, but not less than reasonable care.
For Purposes of this Agreement, Information includes SRI Software, Existing SRI
Software, Existing SRT, SRI Improvements, SRI Know-How, SRI Patent Rights, and
CORONA Know-How, and CORONA Improvements. Nothing herein contained shall be
construed as requiring the receiving party to keep confidential any Information
which:
(a) Has become available to the public through no fault of the
receiving party;
(b) Has been lawfully disclosed to the receiving party, without
restriction, by a third party who at the time of such disclosure was
lawfully in possession of the Information and was lawfully entitled to
divulge same;
(c) Is disclosed by the disclosing party to a third party without
imposing restrictions similar to those contained herein; or
(d) Is independently developed by the receiving party without any
use of Information.
It is understood and agreed that in each instance the receiving party shall have
the burden of proving that any of the above exceptions are applicable.
8.2 Nothing contained herein shall be construed so as to prevent CORONA
from using Information, including, without limitation, SRI Proprietary Rights,
to make, use or sell any product and/or service, or from disclosing information
necessary in the opinion of its counsel to comply with securities laws.
8.3 The obligation to keep Information confidential expressed in this
Article 8 shall survive the termination of this Agreement but shall expire in
respect of any Information five (5) years after receipt by the receiving party
of such Information.
9. IMPROVEMENTS AND OTHER RESEARCH
----------------------------------
9.1 Records. SRI and CORONA shall each maintain laboratory notebooks, in
-------
sufficient detail and in good scientific manner appropriate for copyright and
patent purposes, which shall reflect all work done and results achieved in the
performance of its
Corona License Agreement, December 20, 1994
12
research and development regarding the SRI Proprietary Rights and CORONA
Improvements.
9.2 Disclosure. During the Exclusive Period,
-----------
(a) Each party shall be obliged to promptly disclose their respective
improvements (SRI Improvements or CORONA Improvements, respectively), to
the other.
(b) SRI and CORONA research staff shall meet quarterly to
(i) Disclose any SRI Improvements and/or CORONA Improvements;
and
(ii) Review for patentability any material which is in
preparation for upcoming public disclosure, whether as technical
publications or oral presentations.
(c) Each party shall provide the other with copies of their technical
papers, prior to publication, at the same time as such papers are submitted
for their own internal management review.
(d) Each party shall promptly disclose to the other any potential
contractual relationships in the area of Speech Recognition Technology for
use in the Nonexclusive Fields.
10. PATENT PROSECUTION AND ABATEMENT OF INFRINGEMENT
----------------------------------------------------
10.1 Ownership of Inventions. The entire right and title in all inventions,
-----------------------
discoveries, processes, methods, compositions, formulae, techniques, information
and data, whether or not patentable, and any patent applications or patents
based thereon, relating to Speech Recognition Technology and conceived in the
performance of the parties' activities during the Agreement ("New Inventions"):
(a) By employees or others acting solely on behalf of SRI, shall be
owned solely by SRI ("SRI New Inventions");
(b) By employees or others acting solely on behalf of CORONA shall
be owned solely by CORONA ("CORONA New Inventions"); and
(c) By employees or others acting jointly on behalf of SRI and
CORONA, shall be owned jointly by SRI and CORONA (the "Joint New
Inventions").
During the Exclusive Period, each party promptly shall disclose to the other
party the making, conception or reduction to practice of New Inventions by
employees or others acting on behalf of such party. SRI and CORONA each hereby
represent that all employees and other Persons acting on its behalf in
performing obligations under the Agreement shall be obligated to assign to the
party on whose behalf they are working all New Inventions conceived by such
employees or other Persons.
10.2 Patent Rights Generally. Subject to the provisions of this article,
-----------------------
SRI shall be responsible for and shall control the preparation, filing,
prosecution, maintenance and enforcement of all patent applications and patents
regarding SRI New Inventions. CORONA shall be responsible for and shall control
the preparation, filing, prosecution,
Corona License Agreement, December 20, 1994
13
maintenance and enforcement of all patent applications and patents regarding
CORONA New Inventions. SRI and CORONA shall determine by mutual agreement the
party which shall be responsible for and shall control the preparation, filing,
prosecution, maintenance and enforcement of all patent applications and patents
regarding Joint New Inventions. The parties intend that they shall have rights
in the Joint New Inventions the same as in the SRI Proprietary Rights. SRI and
CORONA shall cooperate with the other party and shall execute all lawful papers
and instruments and make all rightful oaths and declarations as may be necessary
in the preparation, filing, prosecution, maintenance and enforcement of all
patent applications and patents as referred to in this section.
10.3 SRI Patent Rights.
------------------
10.3.1 Filing, Prosecution, and Maintenance. SRI shall seek to file
------------------------------------
and prosecute patent applications based on SRI Know-How and/or SRI Improvements
in the United States, Canada, Japan, the European Patent Office (designating the
United Kingdom, France, Germany, Italy and the Netherlands) and such other
countries as the parties mutually agree. SRI shall provide CORONA with copies of
each such patent application as filed, together with notice of its filing date
and serial number, and copies of all office actions and responses thereto. SRI
shall use its good faith efforts to amend any such patent applications to
include claims reasonably requested by CORONA.
10.3.2 Payment of Patent Costs.
-----------------------
(a) During the Exclusive Period,
(i) SRI shall bear all patent prosecution costs and attorneys
fees incurred by SRI in connection with the prosecution of the patent
applications listed in Appendix B;
(ii) CORONA shall pay for patent costs relating to CORONA
Improvements.
(iii) SRI shall disclose to CORONA appropriate invention
disclosures concerning SRI New Inventions and SRI Improvements. CORONA
shall have thirty days to notify SRI if CORONA wishes to pursue and
pay for all related patent expenses and fees pertaining to such SRI
New Inventions and SRI Improvements. If CORONA (a) elects not to
pursue and pay for such patent expenses and fees or (b) fails to
notify SRI of its intent within the required 30 day period, SRI, in
its sole discretion, may elect whether or not to pursue and pay for
such patent prosecution and CORONA shall have no license to SRI patent
rights, exclusive or nonexclusive, under this Agreement for such SRI
New Inventions and SRI Improvements for which SRI elects to apply for
a patent and for which patents are eventually issued, provided however
that SRI shall provide CORONA with a right of first negotiation for a
separate license to such intellectual property on commercially
reasonable terms, and provided however, that royalties due from CORONA
to SRI under such license will be payable upon issuance of a patent to
SRI retroactively for any use by CORONA of such SRI New Inventions and
SRI Improvements prior to the issuance of a patent. Such right of
first negotiation shall expire if a license agreement is not
consummated within ninety days following notification by SRI to CORONA
of SRI's offer to negotiate a license or option.
Corona License Agreement, December 20, 1994
14
(b) After the Exclusive Period, CORONA shall reimburse a pro-
rated portion of the SRI patent expenses and fees incurred after the
Exclusive Period. Such SRI Patent costs shall be shared equally by all
nonexclusive licensees in direct proportion to the number of patents
licensed by each party. For example if SRI has licensed five patents
to CORONA and SRI has licensed three of those five to one other
company, CORONA shall reimburse SRI patent expenses and fees for the
two patents which have not been otherwise licensed in their entirety
and reimburse one half of the Patent Costs for the remaining three
patents. CORONA shall reimburse SRI within Thirty (30) days of
invoicing unless CORONA believes the fees are incorrect, in which case
CORONA shall have a right to audit SRI's records to determine the
correct fees and the payment period shall be extended another Thirty
(30) days. If CORONA declines to reimburse SRI for its pro-rated
portion of any particular patent costs and attorneys fees after the
Exclusive period, deemed owed and due, SRI may terminate the license
granted to CORONA for such patent application and/or patent and remove
such patent applications and/or patents from the definition of SRI
Proprietary Rights.
10.3.3 Suspected Infringement. Each party shall notify the other
-----------------------
party of any suspected infringement of the subject proprietary rights by a third
party. SRI and CORONA shall meet at a mutually agreeable time and place to
decide how to proceed. If SRI fails to bring suit based on the SRI Patent Rights
within forty-five (45) days of CORONA's request, CORONA may bring suit and, if
necessary, join SRI. The party bringing suit shall retain 75% of the proceeds or
damages awarded after deduction of the payment of costs (including attorney's
fees).
11. NOTICE
----------
All notices, requests, consents and other communications required or
permitted to be given hereunder, shall be in writing and shall be deemed to have
been duly given if delivered personally or sent by prepaid telex, telefax or
telegram, or mailed first-class, postage prepaid by registered or certified mail
(notices sent by telex or telefax, or telegram, shall be deemed to have been
given on the date sent; those mailed shall be deemed to have been given five (5)
days after mailing), as follows, or to such other address as any party shall
designate by notice in writing to the other in accordance herewith:
If to SRI, for
technical matters: SRI International
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention:___________________________
If to SRI, for
all other matters: SRI International
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Contract Administration
If to CORONA, for
technical matters: Corona Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention:______________________________
Corona License Agreement, December 20, 1994
15
If to CORONA, for
all other matters: Corona Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: ________________________
12. APPLICABLE LAW
------------------
The Agreement shall be governed by and construed in accordance with the
laws of the State of California, without regard to the conflicts of law
principles thereof, and shall not be governed by the United Nations Convention
on Contracts for the International Sale of Goods.
13. ASSIGNMENT
--------------
This Agreement shall not be assignable by either party hereto, whether
voluntarily, by operation of law, or otherwise, without first having obtained in
writing the consent of the other party, and any such purported assignment,
without the written consent of the other party, shall be null and void.
14. ENTIRE AGREEMENT
--------------------
The Agreement embodies the entire understanding between the parties and
supersedes any prior understanding and agreements between and among them
respecting the subject matter hereof. There are no representations, agreements,
arrangements or understandings, oral or written, between the parties hereto
relating to the subject matter of the Agreement which are not fully expressed
herein. Any modification of this Agreement shall be in writing and shall be
signed by a duly authorized representative of each party.
15. INDEMNIFICATION
-------------------
15.1 Indemnification. CORONA shall indemnify, defend and hold harmless
---------------
SRI, its directors, officers, employees and agents from all losses, liabilities,
damages and expenses (including reasonable attorneys' fees and costs) that they
may suffer as a result of any claims, demands, actions or other proceedings made
or instituted by any third Party or Affiliate against any of them and arising
out of or relating to (a) any negligence, recklessness or intentional act or
omission by or on behalf of CORONA in the performance of its activities
contemplated by the Agreement, or (b) any personal injury to or death of any
person or damage to any property in connection with any act or omission (without
regard to culpable conduct) by or on behalf of CORONA in the performance of its
activities contemplated by the Agreement.
15.2 Indemnification Procedure. A party (the "Indemnitee") that intends to
-------------------------
claim indemnification under this article shall promptly notify CORONA of any
loss, liability, damage or expense, or any claim, demand, action or other
proceeding with respect to which the Indemnitee intends to claim such
indemnification. CORONA's indemnity obligations under this article shall not
apply to amounts paid in any settlement if effected without the consent of
CORONA, which consent shall not be unreasonably withheld or delayed. CORONA
shall not settle or consent to an adverse judgment in any such claim, demand,
action or other proceeding that adversely affects the rights or interests of any
Indemnitee or imposes additional obligations on such Indemnitee, without the
prior express written consent of such Indemnitee. The Indemnitee, its employees
and agents, shall
Corona License Agreement, December 20, 1994
16
cooperate fully with CORONA and its legal representatives in the investigation
of any action, claim or liability covered by this indemnification.
16. ARBITRATION
---------------
16.1 If a dispute arises out of or relates to this Agreement, or its
breach, and the parties have not been successful in resolving such dispute
through negotiation, the parties agree first to endeavor to settle the dispute
through mediation by submitting the dispute to a sole mediator selected by the
parties, or at any time at the option of a party, to mediation by the American
Arbitration Association ("AAA"), 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000. Each party shall bear its own expenses and an equal share of
the expenses of the mediator and the fees of the AAA. The parties, their
representatives, other participants and the mediator shall hold the existence,
content and result of mediation in confidence.
16.2 If after ninety (90) days from the first written notice of dispute,
the parties fail to resolve the dispute by written agreement or mediation,
either party may submit the dispute to final and binding arbitration
administered by the AAA, pursuant to the Commercial Arbitration Rules at the
time of submission. California Arbitration Law shall govern except in the event
that a stay is sought pursuant to the California Code of Civil Procedure Section
1281.2(c), in which event the parties agree that the issue shall be resolved
under the United States Arbitration Act. The arbitration shall be held in San
Francisco, California. Unless the parties have agreed upon the selection of an
Arbitrator before then, the AAA shall appoint the Arbitrator as soon as
practical, but in any event within thirty (30) days after the submission to AAA
for binding arbitration. The Arbitrator's award shall be final and binding
determination of the dispute and shall be fully enforceable as an arbitration
award by the California courts in accordance with the California Arbitration
Law. The prevailing party shall be entitled to recover its reasonable attorney's
fees and expenses, including arbitration administration fees, incurred in
connection with such proceeding. The parties, their representatives, other
participants and the mediator shall hold the existence, content and result of
arbitration in confidence.
16.3 Nothing in this Section shall be construed to preclude any party from
seeking injunctive relief in order to protect its rights pending mediation or
arbitration. A request by a party to a court for such injunctive relief shall
not be deemed a waiver of the obligation to mediate or arbitrate.
17. MISCELLANEOUS
-----------------
17.1 U.S. Export Laws and Regulations. Each party hereby acknowledges that
--------------------------------
the rights and obligations of the Agreement are subject to the laws and
regulations of the United States relating to the export of products and
technical information. Without limitation, each party shall comply with all such
laws and regulations.
17.2 No Other Rights. The Agreement shall not be construed to grant any
---------------
license or other rights to CORONA in any patent rights, know-how or other
technology of SRI, except as expressly provided in the Agreement.
17.3 Waivers and Amendments. No change, modification, extension,
----------------------
termination or waiver of the Agreement, or any of the provisions herein
contained, shall be valid unless made in writing and signed by duly authorized
representatives of the parties hereto.
17.4 Severability. Any of the provisions of the Agreement which are
------------
determined to be invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability in such
jurisdiction, without rendering invalid or
Corona License Agreement, December 20, 1994
17
unenforceable the remaining provisions hereof and without affecting the validity
or enforceability of any of the terms of the Agreement in any other
jurisdiction.
17.5 Waiver. The waiver by either party hereto of any right hereunder or
------
the failure to perform or of a breach by the other party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.
17.6 Taxes.: All sales, use, and other transfer taxes, arising out of this
-------
Agreement and the consummation of the transactions contemplated herein shall be
paid for by Corona.
IN WITNESS WHEREOF, the parties have executed the Agreement as of the date
first set forth above.
SRI INTERNATIONAL
By: /s/ Signature Illegible
Dated: 12/20/94
--------
Title: President and CEO
-----------------
CORONA CORPORATION
By: /s/ Signature Illegible
Dated: 12/20/94
--------
Title: PRESIDENT
---------
Corona License Agreement, December 20, 1994
18
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
[***]
Corona License Agreement, December 20, 1994
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
XX. XXXXXXX X. XXXXXXX
President and Chief Executive Officer
December 21, 1994
Xx. Xxxxxx Xxxxx
President
Corona Corporation
Building 110
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
LETTER AGREEMENT
Dear Xx. Xxxxx:
As we have discussed, a definition in the license agreement between SRI
International and Corona Corporation dated December 20, 1994 (the "Agreement")
requires further clarification. Please signify your agreement to the following
clarification, on behalf of Corona Corporation by signing and dating both copies
of this Letter Agreement.
The term "Speech Recognition Technology", as used in paragraph 1.12 of the
Agreement, shall specifically exclude
[***]
Sincerely,
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
AGREED AND ACCEPTED:
By /s/ Signature Illegible
Date 12/21/94
--------
SRI INTERNATIONAL
000 Xxxxxxxxxx Xxx. Xxxxx Xxxx, XX 00000-0000 (000) 000-0000 Facsimile: (415)
859-2624
