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EXHIBIT 10.03
JOINT DEVELOPMENT AND LICENSE AGREEMENT
This Joint Development and License Agreement ("Agreement"), is entered into
on July 23,1999 (the "Effective Date"), between Sage, Inc. ("Sage"), a Delaware
corporation with a principal place of business at 0000 Xxxxx Xxxxx Xxxxxx, #000,
Xxx Xxxx, Xxxxxxxxxx 00000, and Faroudja Laboratories, Inc. ("Faroudja"), a
California corporation with a principal place of business at 000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000 (hereinafter referred to collectively as the
"Parties" and individually as a "Party").
RECITALS
WHEREAS, Sage designs, develops, manufactures and markets application
specific integrated circuits ("ASIC") primarily for the flat panel display
market;
WHEREAS, Faroudja is recognized as a leader in developing video processing
and image enhancement technologies and designs, develops and manufactures
products, including integrated circuits, for video applications.
WHEREAS, Sage and Faroudja are interested in working together to combine
Faroudja video processing and image enhancement technologies and expertise with
Sage's ASIC design and fabrication and display controller technologies and
expertise, to provide reasonably priced, high-quality chip solutions for
manufacturers of flat panel displays and other display devices.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants, and other terms and conditions contained herein, Sage and Faroudja
agree as follows:
AGREEMENT
1. Definitions.
1.1 "Affiliate" means, with respect to a Party, an entity controlling,
controlled by, or under common control with, such Party, such control being
exercised through the ownership or control, directly or indirectly, of at least
a majority of the capital stock (or, in the case of a noncorporate entity,
equivalent interests) representing the right to vote for the election of
directors or another managing authority, as of the Effective Date or thereafter
during the term of this Agreement, but such entity shall be deemed to be an
Affiliate only so long as such ownership or control exists.
1.2 "Contractor" means a person or entity, other than a Party or an
employee of a Party, that is engaged by a Party to perform any work related to
the subject matter of this Agreement.
1.3 "Deliverable Items" means the specific package of information and
materials relating to the Licensed Technology (defined below) necessary for Sage
to implement the Licensed Technology in Sage ASICs as set forth in Exhibit B.
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1.4 "Enhancement" means any modification, variation, revision or
adaptation to the Licensed Technology (defined below) that improves its
performance or reduces the cost of materials or production.
1.5 "Gross Margin" means, with respect to a Licensed Chip (defined below),
the Net Revenues (defined below) for such Licensed Chip less the Standard Cost
(defined below) of such Licensed Chip.
1.6 "Improvement" means any design, development, enhancement, modification
or improvement (whether or not patentable) relating to or arising from the
Licensed Technology and conceived or developed by either Party during the Term
of this Agreement.
1.7 "Joint Chip" means the first Licensed Chip (defined below) developed
by Sage in cooperation with Faroudja for use in connection with a universal
display controller.
1.8 "Joint Invention" means an Improvement (i) categorized by the Parties
as a Joint Invention prior to the commencement of any development of such
Improvement, (ii) made jointly by employees or Contractors of Faroudja and Sage
during the term of this Agreement or (iii) made solely by the employees or
Contractors of Sage during the term of this Agreement.
1.9 "Licensed Chip" means an ASIC that incorporates all or a portion of
the Licensed Technology (defined below) and that incorporates content provided
by Sage constituting [*] of the circuitry (measured by core die area) of such
integrated circuit device.
1.10 "Licensed Know-How" means the video decoding, enhancement and
deinterlacing technologies which are owned by Faroudja, on and after the
Effective Date, and incorporated in the technology transfer described on Exhibit
B annexed hereto, and any other information related thereto disclosed to Sage by
Faroudja through technical training sessions and ongoing technical support
described on Exhibit B.
1.11 "Licensed Patents" means those United States patents and patent
applications of Faroudja listed on Exhibit A; all corresponding patents or
patent applications issued by, or filed in, any other country; and all
continuations, continuations in part, substitutions, divisions, extensions,
reissues, reexaminations or renewals thereof.
1.12 "Licensed Technology" means Licensed Patents, Licensed Know-How and
Updates (defined below).
1.13 "Net Revenues" means the gross revenues from Sage's sale or other
distribution of Licensed Chips, but not including (i) sales and use taxes,
excise taxes, customs duties and other similar taxes levied in respect to such
sale or other disposition, (ii) shipping, handling, service, insurance and other
charges for delivery of Licensed Chips, and (iii) the amount of any bad debts,
refunds, returns, discounts and credits. In no event shall any taxes on Sage's
income be considered in a calculation of Net Revenues.
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[*] Omitted pursuant to a confidential treatment request. The material has been
filed separately with the Securities and Exchange Commission.
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1.14 "Standard Cost" means, with respect to a Licensed Chip, Sage's current
net per-unit costs for the fabrication, packaging and testing of units of such
Licensed Chip, together with all product-related costs necessary to bring such
Licensed Chip to the point of sale, including but not limited to shipping,
handling, insurance and storage charges.
1.15 "Subsidiary" means, with respect to a Party, an entity as to which
such Party owns and controls a majority of the capital stock (or, in the case of
a noncorporate entity, equivalent interests) representing the right to vote for
the election of directors or another managing authority, but such entity shall
be deemed to be a Subsidiary only so long as such ownership and control exist.
1.16 "Trademarks" means Faroudja's logos and other trademarks set forth on
Exhibit C, as such marks vary in appearance and/or style from time to time.
1.17 "Updates" means technology updates to fix bugs and/or correct errors
to the Licensed Technology developed by Faroudja for its own use or in response
to a report of a bug or error from Sage pertaining to the Licensed Technology,
regardless of whether such updates are licensed to any third party.
2. Technology License Grant.
2.1 License. Subject to the terms and conditions of this Agreement,
Faroudja hereby grants to Sage, a non-exclusive (except as provided in Section
5), non-transferable (except as provided in Sections 2.3 and 18.3), worldwide,
royalty-bearing right and license under all of Faroudja's copyright, patent,
trade secret, mask work, know how and other intellectual property rights in the
Licensed Technology:
(i) to design and develop, and engage Contractors to design and
develop, modifications to and derivatives of the Licensed Technology for the
purpose of creating Licensed Chips;
(ii) to use and engage third-party contractors to use the Licensed
Technology, including such modifications and derivatives, in the design and
development of Licensed Chips; and
(iii) to manufacture, have manufactured, sell and otherwise distribute
Licensed Chips.
The license granted in this Section 2.1 will be deemed to include a
license to Sage under all Joint Inventions.
2.2 Trademark License. Faroudja hereby grants to Sage a non-exclusive,
non-transferable (except as provided in Sections 2.3 and 18.3), worldwide right
and license to use Trademarks in Sage's marketing, sale and distribution of
Licensed Chips, subject to the terms and conditions of Section 16.
2.3 Sublicense Rights. Sage shall not have the right to sublicense any of
the rights or licenses granted to Sage under this Agreement, except that Sage
may grant sublicenses to Sage Subsidiaries that agree in writing that they are
subject to the terms and conditions of this Agreement and that Faroudja has all
rights of action against the Subsidiaries that it would have against Sage.
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2.4 Disclosure. Sage shall not disclose Faroudja Confidential Information
to its Subsidiaries or Contractors except in connection with the design,
manufacture or provision of products or services relating to the manufacture or
provision of Licensed Chips for Sage and/or its Subsidiaries. Disclosure shall
be limited to such portions of the Licensed Technology as are necessary to the
provision of such products or services. Any such disclosure shall be pursuant to
written confidentiality agreements that contain provisions at least as
restrictive as those which apply to Sage under this Agreement, providing for the
limited and secure use and storage of the Licensed Technology. Faroudja shall
not disclose Sage Confidential Information to its Subsidiaries or Contractors
except in connection with the provision of products or services relating to the
sale and distribution of Licensed Chips for Faroudja and/or its Subsidiaries.
Disclosure shall be limited to such portions of Sage Confidential Information as
are necessary to the provision of such products or services. Any such disclosure
shall be pursuant to written confidentiality agreements that contain provisions
at least as restrictive as those which apply to Faroudja under this Agreement.
3. Faroudja's Delivery and Technical Support Obligations.
3.1 Deliverable Items. Faroudja shall deliver to Sage the Deliverable
Items set forth in Exhibit B relating to each element of the Licensed Technology
in the manner and at the times set forth therein and, pursuant to Exhibit B,
according to the delivery schedule established by mutual agreement of the
Parties and attached to this Agreement. Upon receipt of such Deliverable Items,
if Sage determines that the Deliverable Items are insufficient for Sage to
implement the Licensed Technology in Licensed Chips, the Parties shall confer in
good faith and Faroudja shall promptly provide Sage with any information and
materials that the Parties deem necessary for Sage to implement the Licensed
Technology in Licensed Chips. Faroudja's failure to complete delivery of the
Deliverable Items will constitute a material breach by Faroudja of this
Agreement.
3.2 Updates. Faroudja shall deliver Updates to Sage at no charge, not
later than seven (7) days after the availability thereof.
3.3 Enhancements. If Faroudja licenses or otherwise makes available
Enhancements to any third party, other than an Affiliate of Faroudja or as a
result of a change of control as permitted by Section 18.3, for inclusion in
integrated circuits, Sage shall be entitled to obtain delivery of and a license
to such Enhancements on terms and conditions at least as favorable to Sage as
the terms and conditions offered by Faroudja to such third party; provided,
however, Faroudja shall, within seven (7) days after Faroudja enters into such
license with such third party, notify Sage in writing of the availability and
content of such license and, if it intends to accept such license, Sage must
inform Faroudja of its intent to accept such license within sixty (60) days from
the receipt of notification from Faroudja of the availability thereof.
3.4 Technical Support. During the term of this Agreement, Faroudja will
provide Sage with the technical support and training regarding the Licensed
Technology and Deliverable Items described on Exhibit B.
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4. Payments.
4.1 Fees.
(i) License Fee. In consideration of Faroudja's agreement to pay to Sage
the sum of five hundred thousand dollars ($500,000), Faroudja's agreement to
provide Sage with the Deliverable Items, Faroudja's license to Sage of the
Licensed Technology, Faroudja's agreement regarding transfer of the Licensed
Technology in Section 5.2, and the other terms and conditions of this Agreement,
on the Effective Date Sage shall pay Faroudja one million one hundred
twenty-five thousand (1,125,000) shares of Sage common stock as a license fee
(the "License Fee") pursuant to the transactions contemplated by that certain
Stock Purchase Agreement, Voting Agreement and Investors' Rights Agreement,
dated as of the date hereof and incorporated in their entirety herein by
reference. Faroudja shall not sell or otherwise alienate the License Fee until
the earlier to occur of (i) the end of the Exclusivity Period (as defined in
Section 5.2) and (ii) the availability of first samples of the Joint Chip.
(ii) Payment by Faroudja. Faroudja shall pay to Sage the sum of five
hundred thousand dollars ($500,000) on the Effective Date.
4.2 Royalties. For each unit of a Licensed Chip sold by Sage, Sage will
pay to Faroudja a royalty ("Royalty") equal to a percentage of Net Revenues on
such unit, as follows:
Units of Licensed Chips Sold Royalty
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1 unit to [*] units [*]% of Net Revenue
[*] to [*] units [*]% of Net Revenue
[*] to [*] units [*]% of Net Revenue
Over [*] units [*]% of Net Revenue
All Royalties due Faroudja shall accrue upon the sale by Sage or a licensed
Sage Subsidiary of such Licensed Chips. Notwithstanding the foregoing, neither
Sage nor its licensed Subsidiaries shall pay Royalties on units of the Licensed
Chip that (i) are sold to Faroudja or its Subsidiaries, or (ii) are used for
internal purposes to facilitate the production and marketing of the Licensed
Chip, including but not limited to such purposes as testing, demonstrating,
end-user evaluation and sampling.
4.3 Discretion in Pricing. Sage and its licensed Subsidiaries shall be
free to determine their own list price for the Licensed Chips (and any discount
applied thereto) and no representative of Faroudja has any authority to dictate
Sage's or its licensed Subsidiaries' price for, or in any way inhibit Sage's or
its licensed Subsidiaries' pricing discretion with respect to, the Licensed
Chips.
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[*] Omitted pursuant to a confidential treatment request. The material has been
filed separately with the Securities and Exchange Commission.
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4.4 Minimum Per Unit Royalty Payment. Sage and its licensed Subsidiaries
will pay to Faroudja at least a minimum Royalty payment of $[*] per unit of
Licensed Chip sold.
4.5 Royalty Payments for Combinations. Sage and its licensed Subsidiaries
may, at their discretion, incorporate the Licensed Chip in a board (a
"Combination"), and may offer such Combination at a single price.
Notwithstanding Section 4.2, Royalty payments for each sale of a Combination
shall be calculated based on the amount charged by Sage or its licensed
Subsidiaries for Sage's or its licensed Subsidiaries' sale of the Licensed Chip
component of such Combination, and shall not be calculated based on the amount
charged for the sale of the Licensed Chip component of a Combination shall be
deemed to be the [*]; provided, however, the [*] and the amount charged for any
Licensed Chips that are sold in excess [*] will be calculated based on the [*].
For the purpose of this Section 4.5, [*] means the value at which the Licensed
Chip [*] by Sage, or its Subsidiaries, as the case may be, [*], in similar
quantities. In no event shall the per-unit Royalty for Licensed Chips sold as
part of Combinations be less than $[*].
4.6 Most Favored Royalty Rate. If Faroudja licenses or otherwise makes
available the Licensed Technology to any third party on royalty terms that are
more favorable to such third party than the Royalty terms in Section 4.2, Sage
and its licensed Subsidiaries shall be entitled to rely on the same royalty
terms offered by Faroudja to such third party. Faroudja shall promptly notify
Sage in writing of any royalty terms that Faroudja offers to any third party
that are more favorable to such third party than the Royalty terms in Section
4.2. If Sage chooses to substitute the royalty terms in this Agreement for the
royalty terms offered to a third party, it shall notify Faroudja of its decision
within sixty (60) days upon receipt of notification from Faroudja of the
availability thereof. The operation of this Section 4.6 shall not require the
recalculation or refund of any payments previously made to Faroudja by Sage.
4.7 Payments; Royalty Reports. Royalties shall be payable within
forty-five (45) days after the end of each fiscal quarter, based on Net Revenues
during the preceding calendar quarter. With respect to Net Revenues generated in
a currency other than U.S. dollars, for purposes of calculating Net Revenues,
Sage will convert the selling currency to U.S. dollars based on the average
exchange rate for each month of such fiscal quarter for such currency set forth
in the final edition of The Wall Street Journal (version distributed in Northern
California). All payments required to be made under this Agreement shall be made
in U.S. dollars and be made payable to the order of "Faroudja Laboratories,
Inc." Payment may be made by check, direct deposit to Faroudja's bank or wire
transfer.
4.8 Royalty Reports. Concurrently with each Royalty payment, Sage shall
provide Faroudja with a written Royalty report specifying: (i) the gross number
of units of the Licensed Chip sold by Sage and its Subsidiaries, by type of
Licensed Chip, during the reporting period, (ii) Net Revenues by type of
Licensed Chip, (iii) the Royalty rate applied, and (iv) the total Royalties
determined to be due in the reporting period. The report will be accompanied by
a good faith, non-binding projection of the Royalties that Sage forecasts will
be payable to Faroudja with respect to the next calendar quarter.
4.9 Verification. Not more than once per year, following fifteen (15)
days' notice and at mutually acceptable times during Sage's regular business
hours, Sage will make available for audit by an independent public accountant,
at Sage's offices, such books and records as may reasonably be required to
verify Sage's compliance with this Agreement; provided, however,
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[*] Omitted pursuant to a confidential treatment request. The material has been
filed separately with the Securities and Exchange Commission.
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such independent public accountant shall agree in writing to bound by
confidentiality obligations substantially similar to those that are binding on
Faroudja under this Agreement. Faroudja agrees to pay the cost of such audits
unless the amounts paid to Faroudja are found to be less than ninety-five
percent (95%) of the amounts due to Faroudja for the audited period, in which
event Sage shall reimburse Faroudja for the cost of such audit. Audits shall not
unreasonably interfere with Sage's business activities.
4.10 Maintenance of Records. Sage shall maintain, on a rolling thirty-six
(36) month basis, while this Agreement is in effect and for a period of at least
three (3) years thereafter, such accurate books and records as shall be
necessary to confirm Sage's compliance with this Agreement. Such records shall
include, without limitation, information necessary to compute payments due to
Faroudja hereunder.
4.11 Late Payment. If Sage fails to pay any payment due under this
Agreement on or before the due date thereof, then the delinquent amount shall be
subject to a late charge equal to one and one-half percent (1.5%) per month from
the due date until paid. If this late charge exceeds the maximum rate allowed by
law, then the late charge shall accrue at the maximum allowable rate.
4.12 Disputed Payments. Acceptance by Faroudja of any payments under this
Agreement shall not prevent Faroudja, at a later date, from disputing the amount
owed or from demanding more information from Sage regarding payments finally
due, and such acceptance of any payment by Faroudja shall not constitute a
waiver of any breach of any term or provision of this Agreement by Sage if any
breach shall have occurred.
4.13 Taxes. In addition to any other payments due under this Agreement,
Sage shall pay, and hereby agrees to indemnify and hold Faroudja harmless from,
any sales, use, excise, import or export, value-added or similar tax or duty not
based on Faroudja's income, including any penalties and interest, as well as any
costs associated with the collection or withholding thereof, and all government
fees, license fees and customs and similar fees levied on the delivery of any
services or the Licensed Technology to Sage (collectively, "Taxes"). All
payments due under this Agreement shall be made without any deduction or
withholding for any Taxes, unless such deduction or withholding is required by
any applicable law of any relevant government authority then in effect. If Sage
is required to deduct or withhold any Taxes other than in connection with any
failure by Faroudja to make payment of any Taxes, Sage will promptly notify
Faroudja of the requirement, pay the required amount to the relevant
governmental authority, provide Faroudja with an official receipt or certified
copy or other documentation acceptable to Faroudja evidencing the payment, and
gross-up the payments subject to any such deduction or withholding, and pay to
Faroudja, in addition to the payment to which Faroudja is otherwise entitled
under this Agreement, such additional amount as is necessary to insure that the
net amount actually received by Faroudja after any such deduction or withholding
equals the full amount Faroudja would have received had no such deduction or
withholding been imposed. In the event that Faroudja receives any allowable or
actual financial benefit from any Taxes so paid by Sage such that, together with
the grossed-up payment amount paid by Sage, Faroudja receives, or is entitled to
receive, more than the full amount Faroudja would have received had no such
deduction or withholding been imposed, then Faroudja shall promptly refund to
Sage any such excess, or at Sage's option, apply such excess to future
Royalties.
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5. Exclusivity.
5.1 During the term of this Agreement, Sage shall not develop, for use in
products licensed, sold or distributed by Sage to third parties or for use in
products licensed, sold or distributed through a private label, any board-level
video processor product that incorporates a Licensed Chip and is intended to be
used as a standalone video processor similar to the following Faroudja [*]
products: [*]
5.2 Faroudja will not license the Licensed Know-How or engage in a
transfer of the Licensed Technology similar to that described in Exhibit B to
[*] until the earliest of the following dates: (i) fifteen (15) months after the
Effective Date; (ii) eight (8) months after the delivery of the last of the
Deliverable Items if Sage has not taped out the Joint Chip prior to such date;
or (iii) ten (10) months after the delivery of the last of the Deliverable Items
if Sage has not produced first samples of the Joint Chip prior to such date (the
"Exclusivity Period").
6. Joint Chip.
6.1 Joint Chip. Sage will use commercially reasonable efforts to commit
the resources necessary to develop the Joint Chip as the first Licensed Chip at
the earliest possible date.
6.2 Marketing of Joint Chip. Sage shall use commercially reasonable
efforts to market the Joint Chip. Subject to the foregoing, Sage shall have sole
discretion in determining when and how to market the Joint Chip.
7. Faroudja's Rights To Purchase Licensed Chips.
7.1 Prices to Faroudja. Faroudja shall be entitled to purchase (a)
Licensed Chips for testing, demonstrating, end-user evaluation and sampling as
soon as reasonably practicable after they are available to Sage for those
purposes, and (b) production units of Licensed Chips from Sage at the earliest
time that Sage makes a Licensed Chip available to its customers, both of which
will be available to Faroudja for purchase from Sage at the following prices:
(i) for Licensed Chips to be used in liquid crystal display monitors, at
[*] at which such Licensed Chips are offered or sold by Sage to any third party
for similar quantities, less a percentage equal to the percentage Royalty which
would be due on such Licensed Chips pursuant to Section 4.2, above if they were
sold to a third party other than Faroudja;
(ii) for Licensed Chips to be used in projection applications and for
Licensed Chips to be used in the headset applications of Colorado MicroDisplay
and Sony, at a price that is [*] less than [*] at which such Licensed Chips are
offered or sold by Sage to any third party for similar quantities;
(iii) for Licensed Chips to be used in other applications, at a price that
is [*] less than [*] at which such Licensed Chips are offered or sold by Sage to
any third party for similar quantities.
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[*] Omitted pursuant to a confidential treatment request. The material has been
filed separately with the Securities and Exchange Commission.
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7.2 Minimum Price. In no event will Sage be required to sell Licensed
Chips to Faroudja at a price that provides Sage with less than [*] Gross Margin.
If application of the pricing provisions of Section 7.1 to any proposed Licensed
Chip purchase by Faroudja would provide Sage with less than [*] Gross Margin,
the price to Faroudja of such Licensed Chips will be increased to a level which
will provide Sage with [*] Gross Margin.
7.3 Allocation of Licensed Chips. Within fifteen (15) days of the end of
each calendar quarter, Faroudja will provide to Sage a good faith, non-binding
projection of the quantities of Licensed Chips that Faroudja forecasts it will
purchase with respect to the next calendar quarter. If demand for the Licensed
Chips necessitates allocation, Licensed Chips will be allocated equitably among
Faroudja and other customers in proportion to quantities ordered.
7.4 Additional Sage Support. If Faroudja purchases Licensed Chips from
Sage,
(i) Sage will provide to Faroudja, at no charge to Faroudja, the same
firmware or software necessary to fully utilize such Licensed Chips as Sage
provides to other customers purchasing the same Licensed Chips, and Sage will
grant to Faroudja the same standard license (with the right to grant sublicenses
if such rights are granted to other customers) to use such firmware or software
as Sage provides to other customers purchasing the same Licensed Chips as
necessary to fully utilize such Licensed Chips;
(ii) if any license rights to Sage firmware or software are granted by
Sage to purchasers of Licensed Chips from Sage, Faroudja's license rights to
Sage firmware or software under Section 7.4(i) will include the right to grant
sublicenses to Faroudja customers to the extent necessary for Faroudja to grant
the same rights to purchasers of Licensed Chips from Faroudja as Sage grants to
purchasers of Licensed Chips from Sage;
(iii) Sage will provide Faroudja with a reasonable amount of technical
support regarding the firmware or software provided with such Licensed Chips;
(iv) Sage will disclose the firmware or software provided with such
Licensed Chips to Faroudja in the same form (source code or object code) and
under the same standard terms and conditions as Sage discloses such firmware or
software to other customers purchasing the same Licensed Chips; and
(v) Sage will customize any software provided by Sage with such Licensed
Chips, at Faroudja's reasonable request, on terms to be negotiated by the
Parties in good faith. If Sage is unwilling or unable to provide such
customization services on a timely basis and under commercially reasonable terms
and conditions, Sage will provide to Faroudja source code reasonably necessary
for Faroudja to make or have made the necessary modifications for Faroudja's or
Faroudja's customers' use with Licensed Chips purchased from Sage.
7.5 Discontinued Products. Sage shall notify Faroudja of its intention to
discontinue the production of any Licensed Chips at least ninety (90) days prior
to the date of the last scheduled production run. Faroudja shall have the right,
exercisable during the thirty (30)
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[*] Omitted pursuant to a confidential treatment request. The material has been
filed separately with the Securities and Exchange Commission.
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day period following such notice, to submit a final purchase order for the
Licensed Chips being discontinued.
8. Ownership of Intellectual Property Rights
8.1 Agreements with Employees. Each of the Parties hereto represents to
the other Party that it has, or will have, prior to commencement of the
activities called for under this Agreement, valid and sufficient arrangements
and agreements with its respective employees and Contractors, such that the
ownership of any and all inventions that can be deemed Joint Inventions made by
an employee or Contractor vests in the Party hereto employing said employee or
Contractor, subject to the provisions of the applicable law governing ownership
of such inventions.
8.2 Licensed Technology. Faroudja shall retain all ownership, right, title
and interest in and to the Licensed Technology and proprietary rights related
thereto. No license is granted to Sage under any such rights other than the
license granted in this Agreement.
8.3 Faroudja Inventions and Improvements. Faroudja shall own all
ownership, right, title and interest in and to inventions made exclusively by
Faroudja employees or Contractors during the term of this Agreement. The license
granted in Section 2.1 will be deemed to include a license to Sage under Joint
Inventions. No other license is granted to Sage under any such rights other than
the license granted in this Agreement.
8.4 Sage Inventions and Improvements. Sage shall own all ownership, right,
title and interest in and to inventions made exclusively by Sage employees or
Contractors during the term of this Agreement, except to the extent that such
inventions are Joint Inventions.
8.5 Joint Inventions. Joint Inventions shall be jointly owned by Faroudja
and Sage, with each holding an undivided fifty percent (50%) ownership interest
in such Joint Invention. With respect to such Joint Inventions, (i) the Parties
shall agree on a case-by-case basis which Party will file United States and
foreign patent applications and other filings, recordation or registrations, if
any, (ii) the Parties shall share equally the reasonable cost of all mutually
agreed upon patent applications and other filings, recordation or registrations,
and (iii) each Party shall enjoy all rights of ownership of such Joint
Inventions, including the right to license and otherwise freely exploit such
Joint Inventions, without a right or duty of accounting; provided, however, with
respect to Joint Inventions created solely by Sage or its employees or
Contractors, during the term of this Agreement Faroudja will not license such
Joint Inventions to [*].
8.6 Registration. Except as expressly set forth herein, Sage shall not
seek or obtain any registration of any of the Licensed Technology in any name
other than that of Faroudja or participate directly or indirectly in such
registration anywhere in the world without Faroudja's prior written consent. If
Sage has obtained or obtains in the future, in any country, any registered,
filed, recorded or other right, title or interest in any of the Licensed
Technology, or in any other intellectual property right of Faroudja, Sage has so
acted or will act as an agent and for the benefit of Faroudja for the limited
purpose of obtaining such registrations and assigning the same to Faroudja. Sage
shall execute any and all instruments deemed by Faroudja, or its
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[*] Omitted pursuant to a confidential treatment request. The material has been
filed separately with the Securities and Exchange Commission.
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respective attorneys or representatives, to be necessary to transfer such right,
title or interest to Faroudja.
8.7 Power of Attorney. During the term of this Agreement and for a period
of two (2) years thereafter, each Party agrees to execute such documents, render
such assistance and take such other actions as the other Party may reasonably
request, to assist the requesting Party to apply for, register, perfect, confirm
and protect the requesting Party's rights in the Licensed Technology, inventions
and Improvements in accordance with the ownership rights set forth in this
Agreement. Each Party will assist the other in obtaining and enforcing patents
and other protection with respect to the Licensed Technology, inventions and
Improvements in accordance with the ownership rights set forth in this Agreement
in any and all countries during and after the term of this Agreement. Neither
Party shall incur any expense with respect to any such assistance provided to
the other Party. If a requesting Party is unable to secure the other Party's
signature to any lawful and necessary document that accurately reflects the
ownership rights established under this Agreement, where such document is
required to apply for, execute, perfect, enforce or protect any patent or other
rights with respect to any Licensed Technology, invention or Improvement that is
the subject of this Agreement, then the non-requesting Party hereby designates
and appoints the requesting Party as its agent and attorney in fact to act for
and on behalf of and instead of the non-requesting Party to execute any such
documents and to take any such action in the name of the non-requesting Party.
9. Faroudja's Representations and Warranties.
9.1 Faroudja represents and warrants to Sage as follows:
(a) Title. Faroudja owns all right and title to the Licensed Patents
or otherwise has the right and authority to grant licenses of the Licensed
Patents to Sage.
(b) No Misappropriation. The Licensed Technology does not constitute
or contain any trade secrets of anyone other than Faroudja or one from whom
Faroudja has received rights to use and disclose such trade secrets under
license to Sage.
(c) No Trademark Infringement. The Trademarks do not infringe the
trademark rights of any person or entity.
(d) No Copyright Infringement. The Licensed Technology does not
infringe any copyright rights, including but not limited to the mask work
rights, of any person or entity.
(e) Non-Infringement of Known Patents. Faroudja has not received and
is not aware of any notice or allegation nor is it aware of any facts that would
suggest that the Licensed Technology infringes any valid patents or other
intellectual property rights owned by any person.
(f) Notices of Infringement. Faroudja has not received and is not
aware of any notice or allegation that any of the Licensed Technology infringes
any third-party intellectual property rights.
12
9.2 Disclaimer of Warranty. In addition to the disclaimer of warranties
contained in Section 13.3 hereof, Faroudja specifically disclaims any warranty
that the Licensed Technology is error-free, complete or sufficient for the
manufacture and sale of the Licensed Chips.
10. Mutual Representations and Warranties.
Each Party hereby represents and warrants to the other Party as follows:
10.1 Corporate Existence and Power. Such Party (i) is a corporation duly
organized, validly existing and in good standing under the laws of the state in
which it is incorporated, (ii) has the corporate power and authority and the
legal right to own and operate its property and assets and to carry on its
business as it is now being conducted, and (iii) is in compliance with all
requirements of applicable law, except to the extent that any noncompliance
would not have a material adverse effect on its properties, business, financial
or other condition and would not materially adversely affect its ability to
perform its obligations under this Agreement.
10.2 Authorization and Enforcement of Obligations. Such Party (i) has the
corporate power and authority and the legal right to enter into this Agreement
and to perform its obligations hereunder, and (ii) has taken all necessary
corporate action on its part to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder. This 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.
10.3 No Conflict. The execution and delivery of this Agreement and the
performance of such Party's obligations hereunder (i) do not conflict with or
violate any requirement of applicable law or regulation, and (ii) do not
conflict with, or constitute a default under, any of its contractual
obligations.
10.4 No Warranties to Other Party's Customers. To the extent that either
Party makes any warranty to its customers with respect to the Licensed Chips,
such warranty shall be made solely for such Party's account and shall not bind
the other Party.
11. Faroudja's Indemnity.
11.1 Faroudja shall defend and hold harmless Sage against any legal action
to the extent based on a third-party claim that (i) Faroudja does not have the
right to grant the license granted by Faroudja to Sage under this Agreement,
(ii) the Licensed Technology, a modification or addition to the Licensed
Technology made by or for Faroudja or a Deliverable Item infringes a copyright,
trade secret, mask work, patent or other intellectual property rights of the
third party; or (iii) the Trademarks infringe the trademark rights of the third
party. Sage agrees to provide Faroudja with prompt notice of the claim, provided
that failure to provide such notice does not relieve Faroudja of the obligations
imposed by this section unless the failure to provide notice materially
prejudices Faroudja's rights. Sage further agrees to provide all reasonable
cooperation to Faroudja in defending a claim and agrees that Faroudja shall
control the defense and any settlement of the claim, provided, that any
settlement shall not impose any liability on Sage. Faroudja's obligations under
this Section 11.1 will not apply to (a) any use or combination of the Licensed
Technology or Deliverable Items by Sage with any software, hardware, component
or other technology not supplied by Faroudja, (b) any modifications or additions
to
13
the Licensed Technology made by or for Sage (unless such modifications or
additions were made at Faroudja's request or instruction); (c) Faroudja's
compliance with Sage's instructions, drawings, designs or functional
specifications, or (d) any alteration or modification of the Licensed Technology
other than an alteration or modification made by Faroudja or a Faroudja
Contractor or agent.
11.2 If there is a claim relating to the Licensed Technology or a
Deliverable Item covered by Section 11.1, Faroudja may, at its option and
expense, (i) procure for Sage the past and future rights granted to Sage
hereunder with respect to the allegedly infringing portion of the Licensed
Technology or Deliverable Item; (ii) replace or modify the allegedly infringing
portion to make such portion non-infringing, provided that the replacement or
modified portion provides substantially the same functionality as the replaced
or original portion; or (iii) terminate this Agreement and reimburse Sage for
the total amount of the License Fee and Royalties paid hereunder.
11.3 THIS SECTION 11 STATES FAROUDJA'S ENTIRE OBLIGATION AND LIABILITY TO
SAGE WITH RESPECT TO ANY CLAIM REGARDING ACTUAL OR ALLEGED INFRINGEMENT OR
MISAPPROPRIATION OF THE INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY.
12. Sage's Indemnity.
12.1 Sage shall defend and hold harmless Faroudja against any legal action
to the extent based on a third-party claim that any modification or addition to
the Licensed Technology made by or for Sage or any Licensed Chip purchased by
Faroudja from Sage (except to the extent Faroudja is required to indemnify Sage
pursuant to Section 11.1), infringes a copyright, trade secret, mask work,
patent or other intellectual property rights of the third party. Faroudja agrees
to provide Sage with prompt notice of the claim, provided that failure to
provide such notice does not relieve Sage of the obligations imposed by this
section unless the failure to provide notice materially prejudices Sage's
rights. Faroudja further agrees to provide all reasonable cooperation to Sage in
defending a claim and agrees that Sage shall control the defense and any
settlement of the claim, provided, that any settlement shall not impose any
liability on Faroudja. Sage's obligations under this Section 12.1 will not apply
(i) to any claim for which Faroudja is obligated to indemnify Sage pursuant to
Section 11; (ii) to any modifications or additions to the Licensed Technology
made for Faroudja; (iii) to Sage's compliance with Faroudja's instructions,
drawings, designs or functional specifications; (iv) to any use or combination
of the modifications or additions to Licensed Technology with any software,
hardware, component or other technology not supplied by Sage.
14
12.2 If there is a claim relating to Licensed Chips covered by Section
12.1, Sage may, at its option and expense, (i) procure for Faroudja the right to
use the Licensed Chips with respect to the allegedly infringing portion of the
Licensed Chips; (ii) replace or modify the allegedly infringing portion to make
such portion non-infringing, provided that the replacement or modified portion
provides substantially the same functionality as the replaced or original
portion; or (iii) cease developing, manufacturing, selling or distributing
Licensed Chips, including the Joint Chip.
12.3 THIS SECTION 12 STATES SAGE'S ENTIRE OBLIGATION AND LIABILITY TO
FAROUDJA WITH RESPECT TO ANY CLAIM REGARDING ALLEGED INFRINGEMENT OR
MISAPPROPRIATION OF THE INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY.
13. Limitation of Liability.
13.1. Neither Party shall be liable to the other Party for any incidental,
consequential, special or punitive damages arising out of or relating to this
Agreement, whether liability is based on breach of contract, breach of warranty
(express, implied or otherwise), indemnity or otherwise, and whether asserted in
contract, tort (including negligence and strict product liability) or otherwise,
and irrespective of whether such Party has been advised of the possibility of
any such damages. In no event shall either Party's aggregate liability in
connection with this Agreement exceed $100,000.
13.2 NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES (EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE), OTHER THAN AS EXPRESSLY SET FORTH IN SECTIONS
9 AND 10, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT OF
THIRD-PARTY RIGHTS, OR THEIR EQUIVALENTS UNDER THE LAWS OF ANY JURISDICTION.
EACH PARTY DISCLAIMS, AND IRREVOCABLY WAIVES, THE BENEFIT OF ANY REPRESENTATIONS
AND WARRANTIES NOT EXPRESSLY SET FORTH IN SECTIONS 9 AND 10, RESPECTIVELY.
14. Term; Termination.
14.1 Term. This Agreement, and the rights and licenses granted by Faroudja
to Sage pursuant to this Agreement shall commence on the Effective Date and
continue in perpetuity, unless earlier terminated as provided in this Section
14.
14.2 Termination for Breach. If either Party materially breaches any
material provision of this Agreement, then the other Party may elect to
terminate this Agreement if the defaulting Party fails to cure the breach within
thirty (30) days of receipt of written notice describing such breach.
14.3 Termination for Convenience. Sage shall have the right to terminate
this Agreement for convenience after completion of the fifth year of the term of
this Agreement upon sixty (60) days notice to Faroudja; provided, however,
Faroudja shall have the right, exercisable
--------
[*] Omitted pursuant to a confidential treatment request. The material has been
filed separately with the Securities and Exchange Commission.
15
during the thirty (30) day period following such notice, to submit a final
purchase order for Licensed Chips.
14.4 Insolvency. Either Party shall have the right to suspend its
performance under this Agreement by written notice to the other Party, if such
other Party shall: (1) become insolvent or bankrupt or cease to do business, be
unable or admit in writing its inability to pay all debts as they mature or make
a general assignment for the benefit of or enter into any composition or
arrangement with creditors; (2) authorize, apply for, or consent to the
appointment of a receiver or trustee, or liquidate all or a substantial part of
its assets or have proceedings seeking such appointment commenced against it
which are not terminated within sixty (60) days of such commencement; or (3)
file a voluntary petition under any bankruptcy or insolvency law, or file a
voluntary petition under the reorganization or arrangement provisions of the
United States Bankruptcy Act or any similar laws of any jurisdiction or have
proceedings under such laws instituted against it which are not terminated
within thirty (30) days of such commencement. Such suspension of performance
shall remain in effect until such other Party (a) assumes this Agreement and
provides adequate assurances of its future performance under this Agreement, or
(b) rejects this Agreement.
14.5 Additional Bankruptcy Provisions. If Faroudja ceases to conduct
business through liquidation or forced dissolution, voluntary or involuntary
liquidation or reorganization under the United States Bankruptcy Code or
otherwise ceases to do business, or rejects this Agreement under Section 365 of
the Bankruptcy Code, the provision of 11 U.S.C. ss. 101(56) and 365(n) shall
apply and Sage may elect to (i) treat this Agreement as immediately terminated,
or (ii) retain Sage's rights under this Agreement. All rights and licenses
granted to Sage pursuant to this Agreement are, and shall be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to
"intellectual property" as defined under Section 101 of the U.S. Bankruptcy
Code. In a bankruptcy or insolvency proceeding involving Faroudja, the Parties
agree that Sage, as licensee of such rights, shall retain and fully exercise all
of its rights and elections under the U.S. Bankruptcy Code, and the provisions
thereof shall apply notwithstanding conflict of law principles. If, in a
bankruptcy or insolvency proceeding involving Faroudja, the provisions of the
U.S. Bankruptcy Code referenced above are determined not to apply, Sage shall
nevertheless be entitled to no less than the protection offered by the
provisions of the U.S. Bankruptcy Code with respect to its entitlement to and
rights to the use and possession of all intellectual property to which Sage has
been granted rights under this Agreement notwithstanding the bankruptcy or
insolvency of Faroudja.
14.6 Effect of Termination. Upon termination of this Agreement, all rights
and licenses granted hereunder will terminate, and each Party will be released
from all obligations and liabilities to the other occurring or arising after the
date of such termination. Upon termination by Sage pursuant to Section 14.2, (a)
Sage will receive a non-exclusive, perpetual right and license to: (i) design
and develop, and engage third-party contractors to design and develop,
modifications to and derivatives of the Licensed Technology, (ii) use and engage
third-party contractors to use the Licensed Technology, including such
modifications and derivatives, in the design and development of Licensed Chips,
and (iii) manufacture, have manufactured, sell and otherwise distribute such
Licensed Chips; provided, however, such right and license is contingent on Sage
continuing to pay to Faroudja a Royalty at rates that are equal to fifty percent
(50%) of the Royalty rates set forth in Sections 4.2 and 4.5 of this Agreement
and fifty percent
16
(50%) of the minimum Royalty payment set forth in Section 4.4. Notwithstanding
anything to the contrary in this Section 14.6 and provided Sage complies with
its payment obligations pursuant to Sections 4.2 and 4.4, Sage may dispose of
any Licensed Chips that it has manufactured prior to termination of the
Agreement for a period of one hundred twenty (120) days after the effective date
of such termination and shall have the right to fulfill any obligations to
deliver Licensed Chips pursuant to binding orders entered into before the
termination of the Agreement.
14.7 Survival. Notwithstanding anything in Section 14.6 to the contrary,
the Parties' rights and obligations under Sections 4 (to the extent payment
obligations have accrued prior to termination or continue to accrue in
accordance with Section 14.6), 8.2, 8.3 (first sentence only), 8.4, 8.5, 11, 12,
13, 14, 15, 16.1, 16.4 and 18 shall survive termination of this Agreement.
15. Confidentiality.
The exchange of confidential information between the Parties pursuant to
this Agreement shall be governed by the terms of the Mutual Confidential
Disclosure Agreement signed between the Parties on April 27, 1999 (the
"Confidentiality Agreement"). The Confidentiality Agreement is hereby amended as
follows:
(i) Section 1 of the Confidentiality Agreement will be replaced with the
following:
"Purpose. The parties have entered into a Joint Development and
License Agreement (the "License Agreement") and Stock Purchase
Agreement, Voting Agreement and Investor Rights Agreement, both dated
as of the date hereof, relating to advanced video technologies and
the purchase of certain securities, under which each party may
disclose Confidential Information (as hereinafter defined) to the
other for the purposes set forth in such agreements."
(ii) Section 9 of the Confidentiality Agreement will be replaced with the
following:
"Term. This Agreement shall become effective as of the date written
above. This Agreement shall remain in effect as long as the License
Agreement or Stock Agreement remains in effect, whichever is longer.
The provisions of this Agreement shall apply to all Confidential
Information disclosed under this Agreement prior to termination and,
notwithstanding termination, shall survive for a period of three (3)
years from the date of each disclosure."
(iii) The following sentence shall be added at the end of Section 10 of the
Confidentiality Agreement:
"In the event of any conflict between the provisions of this
Confidentiality Agreement and the License Agreement and/or the Stock Agreement,
the License Agreement shall control."
16. Trademarks and Proprietary Notices.
16.1. Use of Faroudja Name and Trademarks. Sage acknowledges that Faroudja
has made a substantial investment in developing and maintaining an image and
reputation for high
17
quality design, prestige and performance and that the Licensed Technology is
associated with products of consistently high quality and performance. The
Faroudja name and Trademarks may be used by Sage on Licensed Chips only with the
prior written notice, opportunity to review and consent of Faroudja.
16.2. Samples of Licensed Chips. Sage agrees that in order to use
Trademarks on Licensed Chips, the performance of Licensed Chips must adhere to
Faroudja standards of quality and performance. Faroudja will have the right to
test and evaluate all Licensed Chips with respect to which Sage seeks to use a
Trademark to confirm that the performance of such products is consistent with
the Faroudja image and reputation. The parties acknowledge their mutual interest
in the broad use of Trademarks. Faroudja will not unreasonably withhold its
consent to the use of such marks on Licensed Chips that adhere to Faroudja
quality and performance standards. To facilitate this process, (a) Sage will
provide to Faroudja samples of the Licensed Chips that will be sold under
Faroudja's Trademarks (which samples of the Licensed Chips shall be provided as
early in the design process as reasonably possible) together with a board and
firmware or software necessary for testing; and (b) Faroudja will evaluate
Licensed Chips within ten (10) business days of receipt of the samples or any
additional period of time as the Parties mutually agree upon (the "Review
Period"). If Faroudja notifies in writing Sage within the Review Period that the
sample Licensed Chip does not meet commercially reasonable standards of quality
and set forth the reasons for Faroudja's objections in reasonable detail, the
Parties shall confer in good faith to identify the changes that Sage must make
to the subject chip and, in the absence of agreement, Sage shall make
commercially reasonable efforts to remedy any of Faroudja's commercially
reasonable objections before making such chip generally available to the public.
If Faroudja fails to notify Sage in writing of its objections to a chip within
the Review Period, or if Faroudja does not approve the use of Trademarks with a
Licensed Chip, Sage shall have the right to make such Licensed Chips generally
available under Sage's trademarks or a private label, in Sage's sole discretion.
16.3. Samples of Marketing Material. Sage will provide to Faroudja samples
of any advertisement, brochure or other publicly distributed material that it
intends to use in connection with Licensed Chips and which contains a Faroudja
name or bears a Faroudja Trademark. Faroudja will notify Sage in writing within
seven (7) business days of receipt of such samples of any objections it has to
the usage of the Faroudja name or Trademark, and set forth the reasons for
Faroudja's objections in reasonable detail. Sage shall remedy the identified
objections and will provide revised samples to Faroudja. Faroudja will notify
Sage in writing within three (3) business days of receipt of such revised
samples of any objections it has to the usage of the Faroudja name or Trademark,
seting forth the reasons for Faroudja's objections in reasonable detail, and
Sage shall make commercially reasonable efforts to remedy the identified
objections. Faroudja will not unreasonably withhold its approval of any samples
provided pursuant to this Section 16.3.
16.4. Proprietary Rights Notices; Obligation to Use Appropriate Markings.
Sage shall use commercially reasonable efforts to affix the Trademark to each
Licensed Chip approved by Faroudja. Further, Sage agrees to use the appropriate
trademark, product descriptor and trademark symbol (either "TM" or circled "R"),
and clearly indicate Faroudja's ownership of its trademark(s) whenever any of
the Trademarks is first mentioned in any advertisement, brochure or
documentation. Sage shall use commercially reasonable efforts to affix to the
18
documentation associated with each Licensed Chip approved by Faroudja the
patent, copyright, or other proprietary notices reasonably specified by
Faroudja. Sage will determine the size and placement of such notices given the
overall size and design and other markings on such Sage documentation.
17. Confidentiality of Agreement; Public Announcement.
17.1 Confidentiality of Agreement. The Parties agree that the terms and
conditions of this Agreement shall be deemed to be Confidential Information
under the Parties' Confidentiality Agreement and neither Party shall advertise,
issue any press release or otherwise publish the fact that the Parties have
entered into this Agreement without the prior written consent of the other
Party, except as may be required by law.
17.2 Initial Release. Notwithstanding the foregoing, within seven (7) days
of the Effective Date, Sage and Faroudja will issue a joint press release, the
terms and details of which both Parties shall agree upon.
17.3 Future Releases. After the press release announcing the signing of
this Agreement is issued, each Party may include the information included in
such press release in subsequent press releases and other publications without
the other Party's prior written consent, provided that such Party includes
proper attribution of the other Party's name.
18. Miscellaneous Provisions.
18.1 Notices. All notices required hereunder shall be in writing and shall
be sent by U.S. mail (first class) or nationally-recognized courier service
(e.g., DHL, Federal Express), with all postage or delivery charges prepaid, or
may be sent via facsimile, subject to confirmation via U.S. mail or
nationally-recognized courier service, and shall be addressed to the Parties at
their addresses set forth below or to such other address(es) as may be furnished
by written notice in the manner set forth herein. Notices shall be deemed to
have been served when delivered or, if delivery is not performed as a result of
the addressee's fault, when tendered.
Notices to Faroudja: Notices to Sage:
Faroudja Laboratories, Inc. Sage, Inc.
000 Xxxxxxx Xxxxxx 0000 Xxxxx Xxxxx Xxxxxx, #000
Xxxxxxxxx, Xxxxxxxxxx 00000 Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer Attn: Company Secretary
Facsimile No.: 408.735.8571 Facsimile No.: 408.383.5310
With a copy to: With a copy to:
Faroudja Laboratories, Inc. Xxxx X. Xxxxxxxx, III
000 Xxxxxxx Xxxxxx Xxxxxxxx & Xxxxxxxx, XXX
Xxxxxxxxx, Xxxxxxxxxx 00000 000 Xxxxxx Xxxxxx
Attn: General Counsel Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: 000.000.0000 Facsimile No.: 415.268.7522
19
18.2 Relationship. The relationship between the parties shall be that of
independent contractors. This Agreement shall not be construed as creating an
agency, partnership, joint venture or any other form of legal association
between the Parties other than as expressly set forth herein. Neither Party
shall have any right or authority to assume or create any obligation of any kind
or to make any representation or warranty on behalf of the other Party, whether
express or implied, or to bind the other Party in any respect whatsoever, except
as expressly set forth in this Agreement.
18.3 Limitation on Assignment. Neither Party shall be entitled to assign,
transfer or otherwise convey this Agreement or any of its rights hereunder to
any third party unless the written consent of the other Party shall first have
been obtained. Any attempted or purported assignment, sublicense, transfer,
conveyance or delegation without such prior consent (where required hereunder)
having been obtained shall be void and a breach of this Agreement.
Notwithstanding the foregoing, either Party can assign this Agreement in the
event of a transfer of all or substantially all of such Party's assets or the
merger or consolidation of such Party. Subject to the foregoing, this Agreement
shall bind and inure to the benefit of the Parties and their respective
successors and permitted assigns.
18.4 Non-Solicitation. Neither Party shall, during the first two (2) years
of this Agreement, either directly or indirectly, on its own behalf or in the
service of or on behalf of others, divert, solicit or hire away, or attempt to
divert, solicit or hire away, any person employed by the other Party, except
with the prior written consent of the other Party.
18.5 Force Majeure. Except for the obligation to pay money, neither Party
shall be deemed to be in breach or default of this Agreement as the result of
any delay or nonperformance which is caused by flood, fire, storm, earthquake,
or other Act of God, war acts of the public enemy, riot, civil disturbance,
strike, lockout or labor dispute.
18.6 Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, U.S.A., without reference
to conflicts of law principles except to the extent that United States federal
law preempts California law, in which case United States federal law (including,
without limitation, copyright, patent and federal trademark law) shall apply,
without reference to conflicts of law principles.
18.7 Attorneys' Fee. If either Party commences any action or proceeding
against the other Party to enforce this Agreement or any of its rights
hereunder, the prevailing Party in such action or proceeding shall be entitled
to recover from the other Party the reasonable attorneys' fees and all related
costs and expenses incurred by such prevailing Party in connection with such
action or proceeding and in connection with enforcing any judgment or order
thereby obtained.
18.8 No Waiver. No failure or delay by either Party in exercising any
right, power or remedy under this Agreement shall operate as a waiver of any
such right, power or remedy. No waiver of any provision of this Agreement shall
be effective unless in writing and signed by the Party against whom such waiver
is sought to be enforced.
20
18.9 Amendments in Writing. No amendment to or modification of this
Agreement shall be binding unless in writing and signed by a duly authorized
representative of each of the Parties.
18.10 Severability. In the event that any provision of this Agreement (or
any portion hereof) is determined by a court of competent jurisdiction to be
illegal, invalid or otherwise unenforceable (an "Invalid Provision"), the
Parties shall substitute, by mutual consent, a valid and enforceable provision
for such Invalid Provision, which valid and enforceable provision in its effect
is sufficiently similar to the Invalid Provision that it can be reasonably
assumed that the Parties would have entered into this Agreement with such
alternate provision. If such provision cannot be agreed upon, the invalidity of
one or several provisions of this Agreement shall not affect the validity of
this Agreement as a whole, unless an Invalid Provision is of such essential
importance to this Agreement that it can be reasonably assumed that the Parties
would not have entered into this Agreement without the Invalid Provision.
18.11 No Third Party Beneficiaries. No provisions of this Agreement,
whether express or implied, are intended or shall be construed to confer upon or
give to any person or entity other than the specific Parties and their
Subsidiaries, as applicable, any rights, remedies or other benefits under or by
reason of this Agreement.
18.12 Headings for Convenience. The section headings used in this Agreement
are intended primarily for reference and shall not by themselves determine the
construction or interpretation of this Agreement or any portion hereof.
18.13 Entire Agreement. This Agreement, including all exhibits hereto,
constitutes the entire agreement and understanding of the Parties with respect
to the subject matter hereof, and, except for the Confidentiality Agreement,
supersedes all prior and contemporaneous correspondence, negotiations,
agreements and understandings between the Parties, and any representations and
warranties, both oral and written.
18.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and when taken together
shall constitute one and the same instrument.
In witness whereof, the duly authorized representatives of the Parties have
executed this Agreement as of the day and year first above written.
SAGE, INC. FAROUDJA LABORATORIES, INC.
By: /s/ XXXXXXXXXXXXX X. XXXXX By: /s/ XXXXX X. XXXXXXX
----------------------------------- ------------------------------------
Name: Xxxxxxxxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
--------------------------------- ----------------------------------
Title: President and CEO Title: CEO
-------------------------------- ---------------------------------
