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EXHIBIT 10.3
[NOTE: CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO INDICATE THAT
CONFIDENTIALITY HAS BEEN REQUESTED FOR THIS CONFIDENTIAL INFORMATION. THE
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.]
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PRINCETON VIDEO IMAGE, INC.
SYSTEM LICENSE AGREEMENT
DATA AND EXECUTION PAGE
This Agreement is between the parties on behalf of which this Agreement
has been executed below:
PVI hereby grants a license to Licensee, subject to all the terms and
conditions set forth in this Agreement and the Schedules attached, in the
Territory and for the Licensed Event(s) described below:
Territory: Republic of South Africa
Licensed Event(s): any commercial application (or use) consistent with Section
2.4, viable and/or feasible at present or during the term of this agreement,
through or with, the use of L-VIS(TM) System, whether such use is television
advertising (including all sorts of modifications or post productions,
commercials, infomercials, etc.) or any application in sports, intended for its
use or distribution in the Territory . For a major, internationally televised
broadcast originating outside of the Territory, Licensee is granted a right of
first refusal to work with PVI or another Third Party Licensee of PVI on such
event to provide advertising for distribution in the Territory, on terms to be
negotiated between the Licensee and PVI or another Third Party Licensee of PVI.
Term of License Grant: The Initial Term of the license is 5 years from the
Commencement Date. The Term shall be extended automatically for an additional
five year period at the end of the fifth year of the license term and at the end
of every fifth year thereafter (assuming the original license term is extended)
(i) if, during each Term, the Licensee has not been in default of any term or
provision of this Agreement or any other agreement with PVI and (ii) if Licensee
has generated, on an aggregate basis, during the then just concluded five year
period, the then applicable Minimum Revenue Split. It is also a requirement of
any renewal of this Agreement that Licensee and PVI agree to set the Minimum
Revenue Split for each extension period of this Agreement at least 60 days prior
to the end of the initial term and any subsequent extension periods.
Commencement Date: the date of execution of this Agreement.
Expiration Date: 5 years from the Commencement Date, unless extended
as above.
Minimum Revenue Split: For the one year period commencing on the Commencement
Date, the Minimum Revenue Split shall be [CONFIDENTIAL TREATMENT REQUESTED] in
the aggregate and shall be non-refundable. For the five year period commencing
on the Commencement Date, the Minimum Revenue Split shall [CONFIDENTIAL
TREATMENT REQUESTED] in the aggregate. For purposes hereof, Minimum Revenue
Split shall mean the sum of Quarterly Revenue Splits agreed to be paid by
Licensee to PVI over the applicable period.
Territory Fee: [CONFIDENTIAL TREATMENT REQUESTED] payable upon delivery and
successful completion of Initial Testing of the initial Unit ("Initial Territory
Fee"). "Initial Testing" shall mean the delivery of the Unit to the Licensee and
the first successful insertion of a graphic image into a videotape
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playback of a live sports broadcast for which the Unit's software was designed.
In addition, commencing one year after the Commencement Date and on the first
day of each month thereafter throughout the term of this Agreement, an
additional Territory Fee equal to [CONFIDENTIAL TREATMENT REQUESTED] per month
shall be payable by Licensee to PVI.
Equipment Fee: [CONFIDENTIAL TREATMENT REQUESTED], Initial Unit
No Additional Units to be leased on Commencement Date.
Estimated Delivery Date for the Initial Unit:
Revenue Split Fraction: [CONFIDENTIAL TREATMENT REQUESTED]
By having its duly authorized officer sign below, each party agrees to
the terms of this Agreement and to all the terms and conditions contained in the
attached schedules. No changes or deletions to this Agreement or any attached
schedule will be effective unless approved in writing by PVI and Licensee.
PVI:
LICENSEE:
Princeton Video Image, Inc. Sasani Limited
00 Xxxxxxxx Xxxx 0 Xxxxxxxxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000 X.X.X. Xxxxxxxxx Xxxxx Xxxx 0
0000 Xxxxxxxxxxxx, Xxxxx Xxxxxx
Telephone: (000) 000-0000 Telephone: (00 00) 000 0000
Fax: (000) 000-0000 Fax: (00 00) 000 0000
By: /s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx Xxxxxxx
------------------------------- --------------------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Franco Baroca
Title: Vice President, Finance Title: MD - ESPN Legends and Sasani
Chief Financial Officer Sports
Date: December 18, 1998 Date: January 19, 1999
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PRINCETON VIDEO IMAGE, INC.
SYSTEM LICENSE AGREEMENT
SCHEDULE A
TERMS AND CONDITIONS
1. DEFINITIONS.
In addition to the terms defined on the Data and Execution Page and
elsewhere in this Agreement, the following terms shall have the following
meanings:
1.1_ "Additional Units" has the meaning assigned to it in Section 2.8.
1.2_ "Advertiser" means any person for or on behalf of which an
insertion of an Electronic Image is made by Licensee for consideration.
1.3_ "Documentation" means all operator and user manuals, training
materials, guides, specifications and other materials created or owned by PVI
and provided to Licensee for use with the L-VIS(TM) System.
1.4_ "Editing Agent" means any person that is responsible for actual
manipulation of the L-VIS(TM) System in order to make insertions of Electronic
Images.
1.5_ "Electronic Image" means an image that is electronically inserted
into telecasts through use of the L-VIS(TM) System.
1.6_ "Equipment" means the computer hardware and other equipment
included in the L-VIS(TM) System, all as set forth on Schedule B, annexed
hereto.
1.7_ "Equipment Fee" means the cost for each Unit. Licensee
acknowledges that PVI's Equipment Fee as of the date of this Agreement are the
amounts set forth in Exhibit C. Licensee acknowledges that PVI may revise the
Equipment Fee for Additional Units every year during the term of this Agreement.
The Equipment Fee will not increase more than 10% for a like Unit during the
year.
1.8_ "General Improvements" means all revisions, operational
enhancements, updates, upgrades and other modifications to the software included
in the L-VIS(TM) System from time to time, and the Equipment embodying same,
that PVI may make or have made, from time to time, and that PVI shall make
available to its licensees without charge (other than charges for the
Equipment).
1.9_ "Initial Unit" means the L-VIS(TM) System that PVI is licensing to
Licensee effective upon the Commencement Date, pursuant to this Agreement.
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1.10_ "Licensed Event" means any and all applications described in the
Licensing Data and Execution Page.
1.11_ "L-VIS(TM) System" means the PVI product, including the
Equipment, the Software and the Documentation, which allows real-time electronic
insertion of Electronic Images into telecasts and, as may be possible in the
future, into any other applications.
1.12_ "Revenues" means all amounts paid by Third Parties, including
Advertisers and advertising agencies, to or for the benefit of Licensee or
Licensee's affiliates and received by the Licensee or its affiliates, related to
any use of the Units licensed to Licensee hereunder, including, without
limitation, advertising fees, premiums, user charges, revenue split, up-front
payments and training fees. If advertising related to the use of the Units
licensed to Licensee hereunder is sold in combination with other advertising
services, all revenue received by Licensee or its affiliates shall be deemed to
be Revenues unless PVI approves in writing, a specific allocation or formula
which may be applied in connection therewith.
1.13_ "Software" means the computer software, in object code form,
included in the L-VIS(TM) System as of the date of the shipment of a Unit, and
all General Improvements made subsequent to the date of this Agreement, if any.
1.14_ "Term" means the period commencing on the Commencement Date and
ending upon the Expiration Date.
1.15_ "Third Party" means any person or company who or which is not a
party nor affiliate of a party to this agreement.
1.16_ "Trademarks" means all trademarks or trade names that PVI uses,
from time to time, with respect to the L-VIS(TM) System.
1.17_ "Unit" means one complete L-VIS(TM) System. "Units" means the
Initial Unit and the Additional Units (as defined herein), if any, collectively.
2. LICENSE AND LEASE GRANTS
2.1_ Grant of L-VIS(TM) System License. Subject to the terms and
conditions set forth in this Agreement, PVI hereby grants to Licensee an
exclusive, non-transferable license to use the Software and Equipment, and any
technology or know-how that is owned or controlled by PVI and is necessary or
useful for the exploitation thereof, solely for combined use as an L-VIS(TM)
System and solely in connection with any application of Licensed Events within
the Territory during the Term.
2.2_ Reservation of Rights. All rights and licenses not expressly
granted in Section 2.1 hereof are expressly reserved by PVI.
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2.3_ Restrictions on Use. In addition to other restrictions and
limitations which may be imposed by the Agreement: Licensee shall not:
(1) (i) make or distribute to others copies of the Software or
the Documentation; (ii) modify, adapt, merge, translate, decode, reverse
engineer, decompile, disassemble or create derivative works based upon the
Software, the Documentation, the Equipment or any other part of the L-VIS(TM)
System; (iii) use the L-VIS(TM) System or any part thereof in the construction,
development, maintenance, running or execution of any application other than the
Software; or (iv) market the Software, the Equipment or the L-VIS(TM) System, or
any part thereof, other than expressly in connection with the insertion of
Electronic Images into telecasts of Licensed Events.
(2) Unless agreed to in advance in writing by PVI, Licensee
shall not: (i) sublicense, lease, sell, assign, rent or otherwise transfer to
others, or otherwise dispose of, the Software, the Documentation, the Equipment
or any other part of the L-VIS(TM) System (provided however, that this shall not
restrict the right of the Licensee to facilitate the use of the L-VIS(TM) System
to its customers or any Editing Agent within the scope set forth in Section
2.5(3) of this Agreement); (ii) use the L-VIS(TM) System for any purpose other
than in connection with Licensed Events within the Territory; or (iii) transfer,
assign, relicense or otherwise dispose of any of its rights under this Agreement
(except for "Permitted Assigns", defined as corporations or partnerships which
are affiliates, controlled by or which exercise control on, the Licensee.) No
transfer, assignment, relicense or other disposition of any rights hereunder to
any Permitted Assign shall be effective or recognized unless and until such
Permitted Assign agrees to be bound by all terms and provisions of this
Agreement as if it were the original Licensee hereunder.
2.4_ Compliance with PVI's Standards.
(1) Licensee acknowledges that any use of the L-VIS(TM) System
in violation of applicable law and commonly recognized community or industry
standards would cause severe and irreparable injury to PVI's reputation and
legitimate business interests and that, as a result, PVI must exercise control
over standards and guidelines for use of the L-VIS(TM) System. Therefore,
notwithstanding anything in this Agreement to the contrary, Licensee shall not,
and it shall not allow any Editing Agent or customer to, use the L-VIS(TM)
System in any manner inconsistent with applicable law and commonly recognized
community or industry standards, or in a manner that has not been approved by
the rights holders, sponsors, advertisers and broadcasters of such Licensed
Event.
(2) In furtherance of, and not in limitation of, Licensee's
obligations under Section 7.4, during the Term and for three years thereafter,
Licensee shall maintain, at its sole cost and expense, advertising injury
insurance (or its equivalent in the Territory) with such coverage and much
limits as are customarily maintained by television advertisers in the Territory.
Such insurance shall designate PVI as an additional insured. Upon request,
Licensee shall provide PVI with copies of all such policies and amendments
thereto.
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2.5_ Obligations of Licensee.
(1) Licensee will be solely responsible for selling Electronic
Images for all Licensed Events, and during the Term, Licensee shall use all
reasonable and diligent commercial efforts to do so and to maximize the economic
return therefrom.
(2) Licensee shall be responsible for negotiating, directly or
through third parties, any arrangements with rights holders needed to enable
Licensee to use the L-VIS(TM) System as contemplated in this Agreement,
including, without limitation, obtaining any and all required rights and
permissions ("Required Permissions").
(3) It is understood that Licensee may have arrangements with
one or more Editing Agents for the Licensed Events. Notwithstanding anything to
the contrary herein, the license rights granted by PVI to Licensee to use the
L-VIS(TM) System hereunder shall be extended to such customers and/or Editing
Agents solely for their use in connection with the Licensed Events, provided
that Licensee shall first receive from each customer and/or Editing Agent a
written, enforceable undertaking by such customer and/or Editing Agent to comply
with the provisions of Sections 2.4(1) and 5 hereof. Licensee shall directly
oversee the training of all customers and/or Editing Agents, and ensure that all
such Editing agents have completed such training and are competent to operate
the L-VIS(TM) system in a workmanlike manner and in accordance with the terms
and conditions of this Agreement.
(4) Except as otherwise set forth herein, Licensee will
maintain complete editorial control over the use of the L-VIS(TM) System in
connection with the Licensed Events, including the right to determine the
location, content and appearance of Electronic Images.
2.6_ Inspection Right. PVI shall have the right to inspect, at its own
expense, all sites where the L-VIS(TM) System is being used pursuant to this
Agreement for all reasonable purposes, including, without limitation, assuring
itself of Licensee's observance and compliance with the terms hereof.
2.7_ Incidental Telecasts Outside Territory. The parties acknowledge
that television telecasts cannot be made to conform exactly to geographic
boundaries. As a result, (i) Licensee's use, in good faith, of the L-VIS(TM)
System pursuant to the license granted in Section 2.1 above may result in the
telecast in geographic areas outside, but in close proximity to, the Territory
of Electronic Images inserted in connection with such use, and (ii) use, in good
faith, of the L-VIS(TM) System pursuant to licenses granted by PVI to others
("Third Party Licensees") in geographic areas outside the Territory may result
in the telecast in the Territory of Electronic Images inserted in connection
with such use. No such incidental telecast outside the Territory pursuant to
this license shall constitute a breach of any obligation of Licensee under this
Agreement, and Licensee shall not be required to make any payment to or
otherwise compensate PVI or any Third Party Licensee on account thereof.
Likewise, no such incidental telecast in the Territory pursuant to licenses
granted to Third Party Licensees shall constitute a breach of any obligation of
PVI under this Agreement, and Licensee shall not be entitled to any payment or
other compensation from PVI or any Third Party Licensee on account thereof.
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2.8_ Lease of Equipment; Additional Units.
(1) Subject to the terms and conditions set forth in this
Agreement, PVI hereby leases to Licensee the Equipment which embodies the
Initial Unit solely for use in conjunction with its use of the L-VIS(TM) System
and solely in connection with the telecast of Licensed Events within the
Territory during the Term. The Equipment that comprises the Initial Unit will be
described and identified by serial number on Schedule B annexed hereto.
(2) During the Term and so long as Licensee is not in default
under any of the terms or conditions of this Agreement, Licensee may request,
from time to time, that PVI license to Licensee additional Units, provided that
Licensee can demonstrate a commercially reasonable need for such additional
Units. Such request shall be made in writing, shall set forth the specific
manner in which Licensee intends to use such additional Units and shall specify
the number of, and the Delivery Location for, the additional Units that Licensee
seeks to lease. To the extent that, in PVI's sole discretion, Licensee has
demonstrated a commercially reasonable need for such additional Units, PVI shall
use all reasonable efforts to provide Licensee with the number of additional
Units that Licensee requests, provided that PVI's failure to provide any or all
such additional Units shall not constitute default under this Agreement.
Promptly after receiving such a request, PVI shall provide Licensee with written
notice of the number, if any, of additional Units that PVI will deliver (such
additional Units, the "Additional Units") and the estimated date of such
delivery. Delivery of Additional Units shall be made in accordance with Section
2.9. Additional Schedules B shall be executed by the parties, from time to time,
for all Additional Units delivered to Licensee pursuant to this Section 2.8(2).
(3) Within 30 days following the end of each year during the
term of this Agreement, PVI shall establish the Equipment Fee for all Additional
Units to be leased during the then current year period.
(4) At the end of each five year period during the term of
this Agreement, PVI shall refurbish the Initial Unit then leased to Licensee at
no charge to Licensee, provided that the Term is extended as described on the
Data and Execution Page.
2.9_ Delivery of Unit(s).
(1) PVI shall use all reasonable efforts to deliver the
Initial Unit by the Estimated Delivery Date. In connection with the delivery of
any Additional Units, PVI shall provide Licensee with delivery of such Units
within 90 days of their being paid for. PVI shall deliver the Initial Unit and
any Additional Unit(s) to Licensee at the Delivery Location designated therefore
on the applicable, delivery F.O.B. PVI's facility, Lawrenceville, New Jersey,
USA. Licensee shall be responsible for all freight expenses and import and
export duties and taxes assessed relating to such shipments and shall bear all
risk of loss or damage in connection with such shipments.
(2) Upon delivery of the Initial Unit or the Additional
Unit(s), as the case may be, to Licensee, Licensee shall assume all risks of
loss, theft, destruction of, and damage to the Unit(s) so delivered. Licensee
shall, at its expense, maintain All Risk Physical Damage insurance (or its
equivalent in each country in the Territory) on the Equipment with coverage
limits of at least 125% of the Equipment Fee per Unit, and the proceeds of such
coverage, in the event of loss or damage, shall be applied, at PVI's option, to
the repair or replacement of the Equipment affected. Licensee shall provide
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evidence of such insurance to PVI from time to time as PVI may request. PVI
shall be named as an additional insured under such insurance policy(ies).
Notwithstanding the preceding sentence, Licensee shall be responsible for any
loss or damage to the Equipment from any cause whatsoever not covered by such
insurance and shall indemnify and hold PVI harmless from any such losses or
damages.
2.10_ Training.
(1) Prior to the delivery of the Initial Unit and any Additional Units,
PVI shall provide up to 10 days of training in the use and operation of the
L-VIS(TM) System for up to three members, in the case of the Initial Unit, and
one member, in the case of each Additional Unit, of Licensee's technical staff.
All such training shall be designed to assure proper operation of the L-VIS(TM)
System by Licensee. Such training shall be at dates mutually agreed upon and
provided at PVI's offices in Lawrenceville, New Jersey (unless otherwise agreed
upon). PVI shall provide such training at no additional cost to Licensee, except
that Licensee shall be responsible for all travel, meal and lodging expenses of
any Licensee personnel who travel in connection with such training.
(2) In addition, for not more than 30 days following each delivery of a
Unit, PVI shall make one of its representatives available to Licensee at a
single location to provide technical assistance in connection with the
installation and operation of such Unit. PVI shall provide such assistance at no
additional cost to Licensee, except that Licensee shall be responsible for all
expenses incurred by the PVI representative for travel, meals and lodging in
connection with providing such assistance.
2.11_ Support.
(1) Licensee, at its sole expense, shall maintain the Unit(s) in good
operating condition. PVI shall make its technical personnel available during
PVI's normal business hours for telephone consultations with Licensee's
technical staff at no charge. In the event that on-site technical support is
required by Licensee during the Term (other than the training contemplated by
Section 2.10 above), PVI shall provide such support at PVI's then current
charges for such services, and Licensee shall reimburse PVI for all expenses of
PVI's personnel for travel, meals and lodging incurred in connection with
providing such services.
(2) At Licensee's request, PVI shall use reasonable efforts to make its
technical personnel available to Licensee, at no charge to Licensee, during
non-business hours for emergency telephone consultations during any telecast of
a Licensed Event.
2.12_ Ownership.
(1) Licensee acknowledges and agrees that PVI owns the L-VIS(TM)
System, including all of the Software, Equipment and Documentation, and all
copies thereof, all updates and modifications thereto (whether made by or on
behalf of PVI or Licensee) and all right, title and interest in and to all
patents, patent rights, copyrights, Trademarks, service marks, trade secrets and
confidential or proprietary information relating thereto. Licensee acknowledges
that, by virtue of this Agreement, Licensee does not have, and will not obtain,
any right, title or other proprietary interest in or to any of the foregoing.
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(2) During the Term, if PVI supplies Licensee with labels, plates or
other markings stating that the Equipment is owned by PVI, Licensee shall affix
and keep the same affixed in a prominent place on the Equipment. Licensee shall,
at Licensee's sole cost and expense, execute and file all statements or
instruments and take all other reasonable actions required or permitted under
applicable law in the Territory (or requested by PVI) to provide public notice
of, and protect PVI's interest in, the Equipment, including, without limitation,
against the rights or claims of landlords and others. In furtherance of the
foregoing, Licensee hereby grants PVI the right to execute and file such
statements or instruments and take such other related actions, all in Licensee's
name. Licensee shall, at all times keep the Equipment free from any legal
process or encumbrance whatsoever, including, without limitation, liens,
attachments, levies and executions, and shall give PVI immediate written notice
thereof and shall indemnify PVI from any loss caused thereby.
(3) The Equipment is, and at all times be and remain, personal property
notwithstanding that the Equipment or any part thereof may now be, or hereafter
become, in any manner affixed or attached to real property or any improvements
thereon.
(4) PVI agrees that it shall not voluntarily create or allow or allow
to be created a lien or encumbrance on the Equipment unless such lienholder is
advised of the lease of the Equipment pursuant to this Agreement, and such lien
against the Equipment is subject and subordinate to the lease of the Equipment
to Licensee.
2.13_ Improvements.
(1) PVI shall list, on its secure Internet website, all General
Improvements from time to time developed with respect to the Equipment.
Thereafter, from time to time as soon as commercially available and as requested
by Licensee, PVI shall promptly deliver to Licensee, and provide one member of
Licensee's technical staff with necessary training concerning, any General
Improvements that exist during the Term. Licensee acknowledges and agrees that
PVI shall not be obligated to create any General Improvements. PVI shall provide
General Improvements to Licensee without charge, except that Licensee shall
reimburse PVI for its actual cost of the Equipment embodying such General
Improvements, if any, and for the cost of shipment of such Equipment prior to
PVI's shipment thereof. Licensee shall be responsible for any taxes or fees, if
any, associated with the import of the Equipment into the Territory.
(2) The parties shall execute and annex additional Schedule B's, if
necessary, to reflect any Equipment delivered to Licensee pursuant to this
Section 2.13.
2.14_ Grant of Trademark License.
(1) Subject to the terms and conditions set forth in this Agreement,
PVI hereby grants to Licensee an exclusive, non-transferable license to use the
Trademarks in the Territory connection with Licensee's exploitation of the
L-VIS(TM) System under the license granted hereby.
(2) Licensee shall use the Trademarks only in such form and manner as
shall be approved from time to time in writing by PVI, including, without
limitation, the identification of PVI as the owner of such Trademarks.
Notwithstanding the foregoing, Licensee shall not use the Trademarks in any
manner that may jeopardize the significance, distinctiveness or validity
thereof. All of Licensee's
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uses of the Trademark shall inure to the benefit of PVI. Licensee shall not use
the Trademarks in combination with any other trademark, trade name or logo of
its own or of any third party to create a composite trademark or logo, without
the prior written consent of PVI. If Licensee becomes aware of any infringement
of the rights of PVI in the Trademarks in the Territory, Licensee will promptly
notify PVI in writing and may (but shall not be so obligated) join and assist
PVI, at PVI's sole cost and expense if such assistance is required, in taking
steps as PVI may reasonably request for the protection of PVI's Trademark
rights.
(3) PVI makes no warranty with regard to the validity of the
Trademarks or the registration thereof.
3. TERRITORY FEE; REVENUE SPLIT; PAYMENTS
3.1_ Territory Fee. In partial consideration of the licenses and rights
granted by PVI to Licensee hereunder, Licensee shall pay PVI the Initial
Territory Fee indicated on the execution of this Agreement and at other times
specifically set forth on the Data and Execution Page of this Agreement. Payment
of the Territory Fee shall be non-refundable.
3.2_ Equipment Fee. Licensee shall pay PVI a one-time Equipment Fee
with respect to Units licensed to Licensee. The Equipment Fee for the initial
Units is indicated on the Data and Execution Page of this Agreement and is
payable upon signing of this agreement. Licensee shall pay PVI the Equipment Fee
with respect to each Additional Unit to be delivered if any, within 30 days
after receipt of invoice. Payments of Equipment Fees shall be non-refundable.
3.3_ Revenue Split. As additional consideration of the licenses and
rights granted by PVI to Licensee hereunder, Licensee shall pay to PVI a revenue
split equal to the product of (i) the Revenues multiplied by (ii) the Revenue
Split Fraction as indicated on the Data and Execution Page of this Agreement
(the result of such multiplication is defined as the "Revenue Split").
3.4_ Payments. All Revenue Split payments due hereunder shall be paid
by Licensee quarterly, within 30 days following the end of each quarter in
question. Each such payment shall be accompanied by a statement showing, for the
subject quarter, the number of sales of Electronic Images, the amount of
Revenues generated by such sales and the amount of Revenue Split due on such
Revenues. Revenue Split payments not paid when due shall bear simple interest at
the rate of one percent (1%) per month until paid. All monthly Territory Fees
due hereunder shall be paid by Licensee within 15 days after the start of the
month in which they become due. Without the prior written consent of PVI,
Licensee shall not accept or solicit any non-monetary consideration in
connection with the use of the L-VIS(TM) System other than as would be reflected
in Revenues, except for commercially reasonable use for demonstrations to
potential Advertisers.
3.5_ Mode of Payment. Licensee shall make all payments to PVI required
under this Agreement to an account maintained by PVI at Xxxxx Xxxxxx & Company,
Incorporated, or as otherwise directed by PVI from time to time. All payments
shall be in United States Dollars. For each payment
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period and each currency, the payments due shall be calculated at the rate of
exchange published in The Wall Street Journal, Eastern U.S. Edition, for the
last business day of such payment period.
3.6_ Records Retention. During the Term and for two additional years
after each business year, Licensee shall keep complete and accurate records
pertaining to Revenues to permit PVI to confirm the accuracy of all Revenue
Split calculations hereunder.
3.7_ Audit Request. During the Term and for two additional years after
each business year, at the request of PVI, Licensee shall permit PVI or a
reputable independent certified public accountant appointed by PVI to examine
such records as may be necessary to support the correctness of any payment due
or made to PVI by Licensee hereunder. Results of such examination shall be made
available to Licensee.
3.8_ Cost of Audit. PVI shall bear the full cost of any audit
contemplated by Section 3.7 above, unless such audit discloses that payments
made hereunder by Licensee to PVI for the audit period in question were more
than 10% less than the amount of payments that should have been made. In such
case, Licensee shall bear the full cost of such audit.
3.9_ Taxes. If Licensee, in accordance with the laws of any country
included within the Territory, is required to withhold any tax with respect to
payments made or to be made by Licensee to PVI hereunder, such tax amount shall
be deducted from the Revenue Split or other payment to be made by Licensee to
PVI hereunder, and Licensee shall promptly notify and furnish PVI with copies of
any tax certificate or other documentation evidencing such withholding. Licensee
and PVI agree to cooperate with the other in claiming exemptions from deductions
or withholdings under any agreement or treaty from time to time in effect.
Licensee shall however, as a cost of business, pay or reimburse PVI for all
sales, use, value added, excise, personal property or similar taxes which may be
levied or imposed by any taxing authority in the Territory on the L-VIS(TM)
System.
4. LIMITED WARRANTY; INTELLECTUAL PROPERTY; DISCLAIMERS; EXCLUSIONS.
4.1_ Limited Warranty.
(1) PVI represents and warrants that it has all necessary
Trademarks, patent rights, copyrights and trade secrets, or has the right to
grant licenses therefor, which comprise the L-VIS(TM) System, and which are
necessary to grant the licenses for the L-VIS(TM) System as provided in this
Agreement.
(2) PVI warrants that the Units will, during the Term, be free
from defects and operate substantially in accordance with the Documentation,
when operated as a unit with the intended software on the intended hardware and
operating system environment. PVI does not warrant, however, the operation of
the Units shall be uninterrupted or error free. This warranty shall not apply if
errors or problems result from Licensee's negligence or improper use of the
Units. Licensee shall notify PVI promptly in writing of any claim for any such
failure to conform. If any Unit, or any part thereof, fails to perform in
accordance with this warranty, Licensee's exclusive remedy, and PVI's sole
obligation under
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this warranty, shall be limited to the correction or replacement, as soon as
reasonably practicable, of such Unit or part thereof, which PVI determines to be
the cause of an error.
4.2_ Limitation of Warranty. THE LIMITED WARRANTY PROVIDED IN SECTION
4.1 HEREOF IS THE ONLY WARRANTY WITH RESPECT TO THE L-VIS(TM) SYSTEM AND THE
UNITS. PVI DOES NOT MAKE, AND LICENSEE DOES NOT RECEIVE, ANY OTHER WARRANTY,
EXPRESS OR IMPLIED, AND ALL OTHER WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE WITH RESPECT TO THE L-VIS(TM) SYSTEM OR ANY PORTION
THEREOF, THE UNITS, THE DOCUMENTATION, OR ANY SERVICES FURNISHED UNDER THIS
LICENSE AGREEMENT ARE EXPRESSLY EXCLUDED.
4.3_ Intellectual Property; Indemnification.
(1) With respect to any claims of infringement in the
Territory with respect to a patent or trade secret which embodies the L-VIS(TM)
System or any portion thereof, PVI shall have the first right, but not the duty,
to institute infringement actions against third parties. If PVI does not
institute an infringement proceeding against an offending third party, Licensee
shall have the right, but not the duty, to institute such an action, for the
account and at the expense of PVI, provided that PVI shall have the right to
assume control of any infringement proceeding instituted by Licensee by
reimbursing Licensee for all of the costs and expenses incurred by Licensee in
connection therewith.
(2) PVI shall defend, at its expense, any action brought
against Licensee to the extent that such action is based on a claim that the use
by Licensee of the L-VIS(TM) System, within the scope of this Agreement,
infringes any patent, or copyright in the Territory, other than claims arising
from Licensee's failure to obtain any Required Permissions.
(3) PVI shall indemnify Licensee from and against any costs,
damages or fees incurred and finally awarded against Licensee in any action
under this Section 4.3 which are attributable to claims that the use of the
L-VIS(TM) System, within the scope of this Agreement, infringes any patent or
copyright in the Territory, other than claims arising from Licensee's failure to
obtain any Required Permissions. Licensee shall notify PVI promptly in writing
of any such claim, and shall provide all available information, assistance and
authority to enable PVI to defend, compromise or settle such claim.
(4) Except as otherwise provided for in this Section 4.3, the
costs and expenses of any action under this Section 4.3 (including reasonable
fees of attorneys and other professionals) shall be borne by the party
instituting and maintaining, or defending, such action, as the case may be. If,
however, the parties elect to cooperate in instituting and maintaining or
defending such action, such costs and expenses shall be borne by the parties in
such proportions as they may agree in writing. Each party shall execute all
necessary and proper documents and take such actions as shall be appropriate to
allow the other party to institute and maintain, or defend, such action,
provided such other party has the right to do so under this Section 4.3. Any
award paid by third parties as a result of any such action (whether by way of
settlement or otherwise) shall be paid to the party who instituted and
maintained, or defended, such action, as the case may be. If, however, both
parties did so, then such award shall be allocated between the parties in
proportion to their respective contributions to the costs and expenses incurred
in such action, or as they may have otherwise agreed.
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(5) In the event that the L-VIS(TM) System, or any part
thereof, becomes, or in PVI's opinion is likely to become, the subject of a
claim of infringement, PVI may: (i) procure for Licensee, at no cost to
Licensee, the right to continue to use the L-VIS(TM) System, (ii) replace or
modify the L-VIS(TM) System, at no cost to Licensee, to make the L-VIS(TM)
System non-infringing, provided that the same functions are performed by the
replaced or modified system, or (iii) if the right to continue to use cannot be
reasonably procured or the L-VIS(TM) System cannot be reasonably replaced or
modified, terminate this Agreement.
(6) THIS SECTION 4.3 STATES THE ENTIRE LIABILITY OF PVI WITH
RESPECT TO INFRINGEMENT OF PATENTS, TRADE SECRETS OR COPYRIGHTS BY THE L-VIS(TM)
SYSTEM OR ANY PORTION THEREOF, AND PVI SHALL HAVE NO ADDITIONAL LIABILITY WITH
RESPECT TO ANY ALLEGED OR PROVEN INFRINGEMENT.
4.4_ Exclusion and Disclaimer of Damages. IN ANY EVENT, PVI SHALL NOT
HAVE ANY LIABILITY FOR INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR
EXEMPLARY DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS OF ANTICIPATED REVENUE OR
OTHER DAMAGES ARISING FROM THE LOSS OF USE OF THE L-VIS(TM) SYSTEM, EVEN IF IT
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. PVI'S TOTAL LIABILITY FOR
DAMAGES UNDER THIS AGREEMENT SHALL NOT IN ANY EVENT EXCEED THE TOTAL AMOUNT OF
PAYMENTS RECEIVED BY PVI FROM LICENSEE UNDER THIS AGREEMENT, EXCEPT THAT THE
FOREGOING SHALL NOT LIMIT PVI'S OBLIGATION TO PAY DOWN ALL COSTS INCURRED TO
DEFEND LICENSEE AS PROVIDED IN SECTION 4.3.
5. CONFIDENTIAL AND PROPRIETARY INFORMATION.
5.1_ Confidential and Proprietary Information.
(1) Licensee acknowledges and agrees that the L-VIS(TM) System
constitutes a valuable asset of PVI and that the information contained in the
L-VIS(TM) System, and any other information that PVI has disclosed or discloses
to Licensee prior to the date hereof or during the Term, as the case may be,
which PVI indicated or indicates at the time of disclosure is confidential, is
confidential and proprietary information of PVI (all such information
collectively, the "Information"). Licensee agrees that during the Term and for a
period of five years thereafter, it will not, without PVI's prior written
consent, directly or indirectly (i) reveal, report, publish, disclose or
transfer any Information to any Third Party or (ii) use any Information for any
purpose or for the benefit of any Third Party, except as expressly authorized in
this Agreement. Licensee shall make reasonable efforts to notify and inform its
agents, representatives and employees who have access to the L-VIS(TM) System or
any Information of Licensee's limitations, duties and obligations regarding
nondisclosure and use of the Information. Licensee shall not, and shall not
permit any agent, representative or employee to, remove any proprietary or other
legends or restrictive notices contained in or included in any Information.
(2) The obligations imposed upon Licensee under Section 5.1(1)
above shall not apply with respect to Information that has already been made
public without breach of any obligation of the Licensee, or is made available
generally by PVI to third parties without obligation of confidentiality or is
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independently obtained by Licensee from a Third Party without breach of the
confidentiality obligation to PVI. If information is required to be disclosed in
compliance with applicable laws or regulations or order by a court or other
regulatory body having competent jurisdiction, and if Licensee is required to
make any such disclosure of Information it will give reasonable advance notice
of such disclosure requirement to PVI and will use its best efforts to secure
confidential treatment of the Information required to be disclosed.
5.2_ Specific Performance. Licensee acknowledges that monetary damages
alone would not adequately compensate PVI in the event of a breach by Licensee
of Sections 2.3 or 5 hereof, and that, in additional to all other remedies
available to PVI at law or in equity, PVI shall be entitled to seek injunctive
relief for the enforcement of its rights and to an seek an accounting of profits
made during the period of any such breach.
6. TERMINATION.
6.1_ Expiration. Unless the Term is extended pursuant to Section 6.2
hereof, this Agreement shall terminate upon the Expiration Date set forth on the
Data and Execution Page of the Agreement, or sooner in accordance with Section
6.3 hereof.
6.2_ Extension. If this Agreement has not previously been terminated by
PVI pursuant to Section 6.3 hereof, Licensee, if it desires to extend the term
set forth in the Data and Execution Page, and provided that all Revenue Splits,
other payments and fees due and owing to PVI from Licensee hereunder have been
paid in full, shall provide written notice of same to PVI at least 180 days in
advance of the current Expiration Date. PVI and Licensee shall then agree on the
Minimum Revenue Split at least 60 days prior to the end of the Term. Following
the giving of such notice and the agreement on the Minimum revenue Split, the
then current Term shall automatically be extended for the period in duration set
forth in the Data and Execution Page and the then current Expiration Date shall
automatically be adjusted accordingly. In no event, however, shall any extension
notice given by Licensee hereunder be effective or valid if, at the time of the
giving of such notice and at the end of the then current Expiration Date,
Licensee is in default of any material obligation under this Agreement.
6.3_ Breach. Either party shall have the right to terminate this
Agreement if the other party is in default of any material obligation hereunder
and such default either is incapable of being cured or, if it can be cured, has
not been cured by the defaulting party within 30 days after receipt of notice of
such default (or, if such default cannot be cured within such 30-day period, if
the party in default does not commence and diligently continue actions to cure
such default during such 30-day period). Either party may regard the other party
as being in default under this Agreement if the other party becomes insolvent,
makes a general assignment for the benefit of creditors, suffers or permits the
appointment of a receiver for its business or assets, or becomes subject to any
proceeding under any bankruptcy or insolvency law, whether domestic or foreign,
or has wound up or otherwise liquidated.
6.4_ Effect of Termination. Upon the expiration or termination of this
Agreement for any reason, Licensee shall immediately discontinue use of the
L-VIS(TM) System and shall return all of the
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Units and all Documentation to PVI at a location designated by PVI, F.O.B.
Destination, freight prepaid, within five days after such expiration or
termination. Licensee shall assume all risks of loss or damages until delivery
at such location. Thereafter, Licensee shall retain no rights in or to the
L-VIS(TM) System or the Documentation. In the event of termination of this
Agreement for breach by any party, such termination shall be in addition to, and
not in lieu of, any other remedies, at law or in equity, available to the
non-defaulting party which are not inconsistent with the terms set forth in this
Agreement.
6.5_ Surviving Rights and Obligations. The parties' rights and
obligations regarding insurance (Sections 2.4(2) and 2.9(2)), ownership (Section
2.12), trademarks (Section 2.14), revenue split payments and records (Sections
3.2 through Sections 3.9), limitations on remedies (Section 4), confidentiality
and proprietary information (Section 5), termination (Section 6) and other
miscellaneous rights (Section 7) shall survive the termination or expiration of
this Agreement, shall be without prejudice to any rights which shall have
accrued to the benefit of either party prior to the termination or expiration of
this Agreement, and shall not relieve either party from the obligations which do
expressly survive termination or expiration of this Agreement.
7. MISCELLANEOUS.
7.1_ Relationship. This Agreement shall not be construed as creating a
partnership, joint venture, or employment relationship between the parties, and
nothing contained herein shall be construed as causing either party to be the
employee, agent or representative of the other. Neither party shall make any
warranties or representations, or incur any obligations whatsoever, on behalf of
or in the name of the other party.
7.2_ Representations and Warranties. Each party hereby represents and
warrants to the other as follows: (a) such party has the power to execute,
deliver and perform this Agreement in accordance with its terms; (b) such
party's execution, delivery, and performance of this Agreement, and the
consummation of the transactions contemplated herein, have been duly authorized
by all requisite corporate action on the part of such party and do not and will
not violate any provision of law or other agreement to which such party is
subject; (c) all governmental approvals required in connection with the
execution of this Agreement and the consummation of the transactions
contemplated hereby have been obtained; and (d) this Agreement, when executed on
behalf of such party, shall constitute the valid and legally binding obligation
of such party, enforceable in accordance with its terms.
7.3_ Non-Assignment. Except as set forth in Section 2.3, par (2),
Licensee may not grant, assign, sublicense or otherwise convey this Agreement or
any of its rights and obligations hereunder, in whole or in part, to any Third
Party. Any purported assignment, transfer, sublicense or other conveyance shall
be void.
7.4_ Indemnification by Licensee. In additional to the specific
remedies stated in this Agreement, Licensee shall indemnify and hold PVI
harmless from and against any demands, claims, damages or liabilities resulting
from or arising out of Licensee's breach of any of its obligations hereunder.
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7.5_ Force Majeure. Neither party shall be liable to the other for loss
or damages or shall have any right to terminate this Agreement for any default
or delay attributable to any act of force majeure, if the party affected shall
give prompt notice of any such cause to the other party. Notwithstanding the
foregoing, nothing in this Section 7.5 shall excuse or suspend the obligation to
make any payment due hereunder in the manner and at the time provided prior to
the act of force majeure in question.
7.6_ Notices. All notices and communications required or permitted
under this Agreement shall be in writing and delivered by any method providing
for proof of delivery. Any notice shall be deemed to have been given on the date
of receipt. Notices shall be delivered to a party at the address for such party
as set forth on the Licensing Data and Execution Page (or at such other address
for a party as shall be specified by like notice, provided that notices of a
change of address shall be effective only upon receipt thereof).
7.7_ Waiver. No provision of this Agreement shall be waived by any act,
omission or knowledge of a party or its agents or employees except by an
instrument in writing expressly waiving such provision and signed by the waiving
party. The waiver by either party of the breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach thereof.
7.8_ Severability. The provisions of this Agreement are severable and
if any one or more of these provisions is held to be invalid or unenforceable,
in whole or in part, the remaining provisions and any partially enforceable
provision shall be and remain binding and enforceable.
7.9_ Further Actions. Each party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
7.10_ Alternative Dispute Resolution. Any dispute arising out of or
relating to any provisions of this Agreement shall be finally settled by
arbitration to be held in New York, New York, under the auspices and then
current Rules of Conciliation and Arbitration of the International Chamber of
Commerce. Such arbitration shall be conducted by three arbitrators appointed
according to said rules. Each party shall select one arbitrator, and these two
arbitrators shall select the third arbitrator. All arbitrators shall speak
English, and all documents and other evidence, as well as pleadings and
arguments, shall be in English. Judgment upon any award rendered may be entered
in any court having jurisdiction, or application may be made to such court for a
judicial acceptance of the award and an order of enforcement, as the case may
be.
7.11_ Governing Law. The rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of the State of
New Jersey; provided, however, that any arbitration proceeding conducted
pursuant to Section 7.10 shall be governed by the Federal Arbitration Act, Xxxxx
0, Xxxxxx Xxxxxx Code. All suits and/or appeals permitted under this Agreement
shall be instituted and maintained only in a federal or state court located in
the State of New Jersey. The parties hereby
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irrevocably submit to the exclusive jurisdiction of any New Jersey state or
federal court sitting in the State of New Jersey for any action or proceeding
arising out of or related to this Agreement. The parties also hereby irrevocably
waive, to the fullest extent they may effectively do so, the defense of an
inconvenient forum to the maintenance of any such action or proceeding.
7.12_ Compliance with Law. Nothing in this Agreement shall be deemed to
permit Licensee to export, re-export or otherwise transfer any unit without
compliance with all applicable laws.
7.13_ Additional Terms and Conditions. All additional terms and
conditions agreed to by the parties hereto are set forth in Schedule D hereof.
7.14_ Amendment. No amendment or modification of this Agreement shall
be valid or effective unless made in writing and signed by the parties hereto.
7.15_ Descriptive Headings. The descriptive headings of this Agreement
are for convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.
7.16_ Counterparts. This Agreement and all of the attached Schedules
may be executed simultaneously in two counterparts, either one of which need not
contain the signature of more than one party but both such counterparts taken
together shall constitute one and the same instrument.
7.17_ Entire Agreement; English Original. This Agreement, including all
of the attached Schedules, as may be amended from time to time, constitutes the
entire agreement of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, understandings and
agreements, whether oral or written, between the parties respecting the subject
matter hereof. The English original of this Agreement shall prevail over any
translation hereof.
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PRINCETON VIDEO IMAGE, INC.
SYSTEM LICENSE AGREEMENT
SCHEDULE B
EQUIPMENT CERTIFICATE
FOR
INITIAL UNIT
ADDITIONAL UNIT
Delivery Location: ____________
Description:
One L-VIS(TM) System comprised of the following:
Component Serial No.
ACCEPTED AND AGREED TO ACCEPTED AND AGREED TO
AS OF ______________, 199_ AS OF ______________, 199_
PVI: LICENSEE:
By:__________________________ By:__________________________
Name:________________________ Name:________________________
Title:_______________________ Title:_______________________
Date:________________________ Date:________________________
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PRINCETON VIDEO
IMAGE, INC.
SYSTEM LICENSE AGREEMENT
SCHEDULE C
EQUIPMENT PRICING LISTING
DESCRIPTION PRICE
ACCEPTED AND AGREED TO ACCEPTED AND AGREED TO
AS OF ______________, 199_ AS OF ______________, 199_
PVI: LICENSEE:
By:__________________________ By:__________________________
Name:________________________ Name:________________________
Title:_______________________ Title:_______________________
Date:________________________ Date:________________________
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PRINCETON VIDEO
IMAGE, INC.
SYSTEM LICENSE AGREEMENT
SCHEDULE D
ADDITIONAL TERMS AND CONDITIONS
The following changes and modifications are made to the Terms and Conditions of
the System Licensing Agreement dated as of December 18, 1998 between the parties
hereto:
1. Section 1.12 Revenues is amended to exclude from the definition of
Revenues any value added tax paid to Licensee and any agency
commissions paid by Licensee to Third Parties at the prescribed market
rates.
Section 3.3 Revenue Split is amended by adding the following paragraph
to such section:
[CONFIDENTIAL TREATMENT REQUESTED]
ACCEPTED AND AGREED TO ACCEPTED AND AGREED TO
AS OF December 18, 1998 AS OF December 18, 1998
PVI: LICENSEE:
By: /s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx Xxxxxxx
------------------------------- ------------------------------
Name: Xxxxxxxx Xxxxxxx Name: Xxxxxx Xxxxxxx
----------------------------- ----------------------------
Title: VP Finance & CFO Title: MD
---------------------------- ---------------------------
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[PVI logo]
September 23, 1998
Sasani Limited
0 Xxxxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx Xxxx 0
0000
Xxxxx Xxxxxx
Attention: Xxxxxx Xxxxxxx
Dear Xxxxxx:
As agreed, this letter will serve as clarifying attachment to the PVI Affiliate
Contract. The following points have been agreed to.
1. As part of the contract, one L-VIS System will be supplied,
Additional units will be available to Sasani at prices equal
to those given to our most favored customers for like
configurations.
2. PVI will xxxxx Xxxxxx a n eight month option to contract for a
second territory which will be the remainder of the African
Continent. This will represent a separate contract with the
same fee structure and terms and conditions.
3. Except as discussed in the definition of Licensed Events, PVI
will not allow other PVI Affiliates to operate in such a way
that programming with insertions appears in the Territory
either directly or through third parties.
4. In the event the Affiliate develops business opportunities not
addressed specifically by our agreement, the Affiliate may
present the opportunities to PVI on a case by case basis for
consideration. Final approval is required by PVI.
5. In the event the South African Government or the individual
television stations band together so that there is an official
statutory or official regulatory ban against the insertion of
virtual signage, the Affiliate has the right to discontinue
the [CONFIDENTIAL TREATMENT REQUESTED] per month territory
payment until the situation can be rectified or for one year,
whichever comes first.
6. Affiliate may use the names PVI South Africa and PVI Africa.
7. PVI warrants the L-VIS System will be compatible with the year
2000 date change.
8. In the event of a technical problem with the L-VIS equipment
not able to be repaired in 21 days, the Affiliate may
discontinue the monthly territory fee until the system is
repaired.
Agreed & Accepted: Date: 30/9/98
---------------------------------
/s/ Xxxxx X. Xxxxx /s/ Xxxxxx Xxxxxxx
-------------------------------- --------------------------------------
Xxxxx X. Xxxxx Sasani Limited
President, PVI International on behalf of a subsidiary to be formed
and incorporated, to which the rights
and obligations of this agreement will
be assigned
/s/ Xxxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxxx X. Xxxxxxx
VP/CFO, PVI
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