1
EXHIBIT 10.31
DEVELOPMENT AND LICENSE AGREEMENT
This Development and License Agreement is made and entered into as of
July 3, 1996 (the "Effective Date") between INSTANT VIDEO TECHNOLOGIES, INC., a
Delaware corporation (hereinafter "IVT") and VYVX, INC., a Delaware corporation
(hereinafter "Vyvx"), with reference to the following facts:
A. IVT is engaged in the design, development, and licensing of
interactive network technologies including certain software related to the
faster-than-real-time transmission of audio and video programming;
B. Vyvx is a developer and provider of network services to various
companies throughout the United States and is currently developing an Archive
Architecture System on which it intends to carry video, audio and multimedia
content material (the "Vyvx Network");
C. Vyvx desires to engage IVT's services to develop, with Vyvx's
cooperation, interactive network technology products and/or applications, upon
the terms and conditions set forth below, it being the intention of the parties
that IVT develop, and license to Vyvx at least five (5) technology products
and/or applications during the period from July 1, 1996 to July 1, 1997,
referred to in the product development schedule ("Product Development
Schedule"), attached hereto as Exhibit A.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEVELOPMENT SERVICES
1.1 Services
Pursuant to the terms and conditions set forth in this Agreement, IVT
agrees to use its commercially reasonable best efforts to develop interactive
network technology products and/or applications for Vyvx, as shall be selected
by Vyvx and agreed to by IVT pursuant to said Product Development Schedule, and
in accordance with such specifications as shall be mutually agreed to by Vyvx
and IVT (the "Licensed Products"). In addition to the terms and conditions set
forth herein, the development of each Licensed Product shall be subject to the
terms and conditions as set forth in a Technology Development Project Term
Sheet in a form attached hereto as Exhibit B ("Project Term Sheet"). It is
contemplated by the parties that a Memorandum of Understanding (a "Memorandum
of Understanding") shall be executed by the parties for each Licensed Product,
and that said document shall be similar to that certain Memorandum of
Understanding, dated January 29, 1996 relating the Burstware Viewer(TM), a copy
of which is attached hereto for reference.
1
2
1.2 COOPERATION BY VYVX
The development of the Licensed Products shall be the responsibility of
IVT with the cooperation and assistance of Vyvx. Said assistance shall be
provided by Vyvx at no cost to IVT, and shall include, but not be limited to
providing IVT with technical information owned or possessed by Vyvx which is
reasonably required for such development, and technical information and
specifications related to the Vyvx network. If said technical information
provided by Vyvx is deemed confidential then it shall be protected pursuant to
that certain non disclosure agreement executed by the parties, dated July 2,
1996.
1.3 SCHEDULE
IVT will use commercially reasonable best efforts to accomplish the
development of the Licensed Products in the order, and commencing upon, the
dates as set forth in the Project Development Schedule. The parties shall have
the ability to change the order of, and/or substitute proposed Licensed
Products upon mutual agreement.
1.4 CONSIDERATION
Vyvx shall pay to IVT license fee(s) and additional consideration as
may be required and mutually agreed to by the parties as for each Licensed
Product. It being the intent and understanding of the parties that the license
fee for the initial twelve (12) month period following final deliverable of
each Licensed Product shall be in an amount of not less than $250,000.
Both parties shall use good faith best efforts to agree upon the terms
and conditions for any and all Licensed Products to be developed pursuant to
this Agreement. A Memorandum of Understanding relating to each Licensed Product
shall be executed by the parties no later than those dates date set forth on
the Project Development Schedule, and Vyvx shall pay to IVT upon each said
date, a non-refundable fee in the amount of $35,000, irrespective of whether
the parties are able to agree upon said terms and conditions by said date(s).
For example, a $35,000 payment shall be made by Vyvx to IVT on July 12, 1996.
In the event that the parties agree to the terms and conditions for the first
Licensed Product by July 12, 1996, or upon a date after July 12, 1996 as
mutually agreed to by the parties, said $35,000 payment shall be applied to the
license fee to be paid for said Licensed Product. In the event that the parties
are unable to agree upon said terms and conditions by July 12, 1996, and are
unable to agreed upon a date other than July 12, 1996, then the $35,000 payment
shall be paid by Vyvx to IVT without application.
1.5 OWNERSHIP OF LICENSED PRODUCTS
It is understood by and between the parties that both parties own
certain intellectual property rights to certain intellectual properties,
patents and/or inventions that it may utilize in the development of Licensed
Products. To the extent that said intellectual properties, patents and/or
inventions owned by one party are so utilized by the other party, the owning
party shall retain all right, title and interest therein. However, any entirely
new intellectual properties, patents and/or inventions which are developed
pursuant to this Agreement shall be jointly owned by IVT and Vyvx and any
license granted to third parties for use of said new
2
3
intellectual properties, patents and/or inventions or sale of any interest
therein must be approved by both parties. Notwithstanding the foregoing and
anything contained herein to the contrary, Vyvx's use of the Licensed Products
shall be limited as set forth in Section 2 below.
2. LICENSE TO AND RESTRICTIONS ON USE BY VYVX
2.1 LICENSE
(a) Subject to, and in accordance with, the terms of this Agreement IVT
grants to Vyvx, and Vyvx accepts from IVT, a personal, nontransferable license
to use the Licensed Products and any related documentation provided by IVT (the
"Documentation") in connection with all operating environments on any and all
communications channels over which the Vyvx Network is a component. With
respect to Licensed Products consisting of software, IVT shall provide a copy
of all source code relating to such Licensed Products to Vyvx, which source
code shall be utilized only in connection with all operating environments on
any and all communications channels over which the Vyvx Network is a
component. Unless otherwise set forth in the relevant Project Term Sheet and/or
the relevant Memorandum of Understanding, the license granted hereunder shall
be nonexclusive and shall be for the 12-month period commencing upon the
delivery of the Licensed Product in question conforming to the specifications
set forth in the related Project Term Sheet and/or Memorandum of Understanding.
The parties agree to negotiate in good faith terms for exclusive licenses and
terms for licenses in excess of 12 months. The Memorandum of Understanding with
respect to each licensed product shall contain the specific terms and conditions
pursuant to which Vyvx customers using the Vyvx Network will be entitled to use
the Licensed Products.
(b) Vyvx will not use or permit the Licensed Products to be used in any
manner, directly or indirectly, which would enable any person or entity other
than Vyvx to use the Licensed Products, without IVT's prior written consent.
Vyvx shall not be entitled to license the Licensed Products to any other party
or to otherwise commercially exploit the Licensed Products without IVT's prior
written consent.
(c) Vyvx shall not be entitled to alter, modify, revise or enhance the
Licensed Products, whether directly or indirectly, without IVT's written
consent, which consent may be withheld in IVT's sole discretion.
2.2 REPRODUCTION OF LICENSED PRODUCTS AND DOCUMENTATION
(a) Vyvx shall not reproduce, in whole or in part, any Licensed
Products or Documentation which have been provided by IVT under this Agreement,
except for archive or emergency restart purposes or to replace a worn or
otherwise unusable copy.
(b) Vyvx shall not remove or destroy any proprietary markings or
legends placed upon or contained within the Licensed Products, Documentation or
any related materials, and all copies thereof shall contain such proprietary
markings or legends.
3
4
3. LIMITED WARRANTY
IVT WARRANTS THAT THE LICENSED PRODUCTS WILL MEET THE SPECIFICATIONS SET FORTH
IN THE RELATED PROJECT DEVELOPMENT DESCRIPTIONS. EXCEPT FOR THE FOREGOING
WARRANTY, IVT WILL PROVIDE THE LICENSED PRODUCTS "AS IS", WITHOUT ANY
WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED, TO THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION. IVT
SPECIFICALLY MAKES NO REPRESENTATIONS REGARDING THE LICENSED PRODUCTS'
SUITABILITY FOR VYVX'S REQUIREMENTS, CAPACITY, INTERCONNECTIVITY, EXPANDABILITY
OR PERFORMANCE OR WITH RESPECT TO WHETHER THE LICENSE PRODUCTS INFRINGE ANY
INTELLECTUAL PROPERTY RIGHTS OR ANY THIRD PARTY.
4. LIMITATION OF LIABILITY
IN NO EVENT SHALL IVT OR VYVX BE LIABLE FOR ANY DAMAGES (INCLUDING ANY SPECIAL,
INDIRECT, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES) ARISING OUT OF,
PURSUANT TO OR IN CONNECTION WITH THIS AGREEMENT OR THE USE OR INABILITY TO USE
THE LICENSED PRODUCTS, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFIT OR OTHER
MONETARY LOSS, LOSS OR INTERRUPTION OF DATA OR COMPUTER TIME, ALTERATION OR
ERRONEOUS TRANSMISSION OF DATA, UNAUTHORIZED ACCESS TO OR USE OF DATA PROCESSED
OR TRANSMITTED BY, TO, OR THROUGH THE LICENSED PRODUCTS, OR PROGRAM ERRORS,
EVEN IF IVT IS ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES. IN
ADDITION, IVT'S LIABILITY WITH RESPECT TO ANY LICENSED PRODUCT, SHALL IN NO
EVENT EXCEED THE AMOUNT OF CONSIDERATION ACTUALLY RECEIVED BY IVT WITH RESPECT
TO THE DEVELOPMENT AND LICENSE OF SUCH LICENSED PRODUCT AND IVT'S AGGREGATE
LIABILITY SHALL IN NO EVENT EXCEED THE AGGREGATE AMOUNT OF CONSIDERATION
RECEIVED HEREUNDER.
4.1 INDEMNIFICATION
Each party hereby indemnifies and holds the other party (the
"Indemnified Party") harmless from any claims, losses, damages, costs and
expenses (including reasonable attorneys fees) for personal injury, property
damage or any other liability to the extent arising from (i) the negligence or
willful misconduct of the party providing the indemnification (the
"Indemnifying Party") or its employees.
5. TERMINATION
5.1 EVENTS OF TERMINATION
Either party has the right to terminate this agreement upon thirty (30)
days written notice. In the event that the Agreement is terminated by Vyvx,
then Vyvx shall be obligated to compensate IVT for all work performed up to and
including the effective date of said termination.
4
5
5.2 MAINTENANCE OF CONFIDENTIALITY
Notwithstanding any termination of this Agreement, Vyvx shall continue
to be obligated to protect the confidentiality of the Licensed Products and
other IVT confidential information as set forth in the confidentiality
agreement, the even date herewith, entered into between the parties, attached
hereto and incorporated herein.
6. GENERAL PROVISIONS
6.1 OTHER PROGRAMS
Subject to the provisions of Section 1.5 hereinabove, Vyvx understands
and agrees that IVT may market new or different computer programs which use
part of the function of the Licensed Products. Nothing contained in this
Agreement gives Vyvx any rights with respect to such new or different computer
programs.
6.2 GOVERNING LAW; ATTORNEYS FEES
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, (except that body of laws controlling
conflicts of law). The parties agree that any litigation regarding this
Agreement shall be filed in and heard by the state or federal courts with
jurisdiction to hear such disputes in San Francisco county, California or the
State of Oklahoma, and the parties hereby submit to the personal jurisdiction
of such courts. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorney's fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.
6.3 PUBLIC PRONOUNCEMENTS
The parties shall jointly develop a press release announcing this
Agreement. Except as otherwise provided by law, all press releases and public
pronouncements concerning this Agreement shall be subject to the review and
approval of both parties.
6.4 OTHER PROVISIONS
(a) Neither party shall assign or otherwise transfer the Agreement or
any interest herein without the prior express written consent of other party
unless that party shall be a parent of a party or a subsidiary of The Xxxxxxxx
Companies, Inc. Any such purported assignment or transfer without the prior
express written consent shall be null and void. This Agreement shall be binding
upon the parties hereto, their successors and permitted assigns.
5
6
(b) The parties agree that this Agreement, together with any addenda or
exhibits attached hereto, constitutes the entire agreement of the parties with
respect to the subject matter hereof, supersede all prior agreements or
understanding, whether written or oral and may be amended from time to time in
writing by mutual agreement of the parties. No party shall be bound by any
change, alteration, amendment, modification or attempted waiver of any of the
provisions hereof unless in writing and signed by an authorized officer of the
party against whom it is sought to be enforced.
(c) Nothing contained in the Agreement shall be construed as creating a
joint venture, partnership, limited partnership, agency and/or employment
relationship between or among the parties hereto and the parties acknowledge
that no other facts or relationship exist that would create any such
relationship between them. IVT is and will be treated as an independent
contractor.
(d) Unless otherwise provided herein, any notice required or permitted
under this Agreement must be given in writing and shall be deemed to have been
effectively given upon personal delivery to the party to be notified, by
confirmed facsimile or upon deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified at the address indicated for such party below or at such other address
as such party may designate by 10 days advance written notice to all other
parties given in conformity with this Section.
(e) In the event that any provision of this Agreement shall be deemed
to be illegal or otherwise unenforceable, such provision shall be severed and
the balance of the Agreement shall continue in full force and effect.
(f) This Agreement may be originally executed in one or more
counterparts, each of which shall be deemed an original.
(g) All rights and remedies of Sections 1.5, 3, 4, 5 and 6, and
any other provision which by its terms is intended to survive, shall survive any
termination of this Agreement.
6
7
IN WITNESS WHEREOF, the undersigned have executed this Development and
License Agreement as of the day and year first above written.
INSTANT VIDEO TECHNOLOGIES, INC. VYVX, INC.
a Delaware corporation a Delaware corporation
By: /s/ XXXX X. XXXXXXXX By: /s/ XXX XXXXXXX
----------------------------- ----------------------------------
Name: Xxxx X. Xxxxxxxx Name: Xxx Xxxxxxx
--------------------------- --------------------------------
Title: President/CEO Title: Director Advanced Technologies
-------------------------- -------------------------------
Address: Address:
000 Xxxxxxx Xxxxxx, Xxxxx 000 Xxxxx Union Depot, 000 X. 0xx Xx.
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 Xxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000 Facsimile: 000-000-0000
with a copy to:
Vyvx General Counsel
4100 Bank of Xxxxxxxx Xxxxx
0 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
7
8
EXHIBIT A
PRODUCT DEVELOPMENT SCHEDULE
LICENSE PRODUCTS AGREEMENT DATE
1. Augmentation package for the Burstware July 12, 1996
Viewer(TM) consisting of play and write to disk
and additional video output devices such as
AVI, MPEG2.
2. Augmentation package for the Bursware August 15, 1996
Viewer(TM) consisting of "low rate" video output
devices such as ISDN 128K.
3. Augmentation package for the Bursware November 15, 1996
Viewer(TM) consisting of "off-set" repositioning
to start any clip, at any point, at any time, and to
include a "common" control panel
incorporating full VCR functionality for the
Burstware Viewer(TM), a streamer, and the
Netscape Browser.
4. Augmentation package for the Bursware February 1, 1997
Viewer(TM) that enables the Bursware Viewer(TM)
to be utilized without a Real Magic Video
Board.
5. Technology that enables a Burstware(TM) enabled May 1, 1997
server to talk to a streamer (server-to-server
Burstware(TM) functionality)
OPTIONAL LICENSE PRODUCTS
6. A technology application for the Vyvx Network
based upon IVT's Burstware NFS(TM).
7. An technology application for the Vyvx
Network based upon IVT's Burstware
Sockets(TM).
8
9
EXHIBIT B
TECHNOLOGY DEVELOPMENT PROJECT
TERM SHEET
1. PRODUCT NAME AND DESCRIPTION:
2. PROPOSED DELIVERABLES AND DELIVERY SCHEDULE:
3. DEVELOPMENT AND INITIAL LICENSE FEE PAYMENT AMOUNTS AND SCHEDULE:
4. ADDITIONAL LICENSE TERMS (IF ANY):
5. ADDITIONAL TERMS (IF ANY):
INSTANT VIDEO TECHNOLOGIES, INC. VYVX, INC.
a Delaware corporation a Delaware corporation
By: By:
---------------------------- ------------------------------
Name: Name:
-------------------------- ----------------------------
Title: Title:
------------------------- ---------------------------
Dated: , 1996 Dated: , 1996
------------------- ---------------------
9
