Exhibit 10.11
TECHNOLOGY TRANSFER AND ROYALTY AGREEMENT
This Technology Transfer and Royalty Agreement (this "Agreement") is
entered into by and between Macrovision Corporation, a California corporation
("Macrovision") and Command Audio Corporation, a California corporation ("CAC")
effective as of July 31, 1996.
A. Macrovision desires to waive and release certain rights of reversion
it has pursuant to a certain Assignment of Inventions dated as of November 17,
1995, and to transfer to CAC all rights in certain technology.
B. In consideration for the foregoing, CAC is willing to pay Macrovision
certain royalties, all as set forth more fully herein.
NOW THEREFORE, the parties agree as follows:
1. CERTAIN DEFINITIONS.
(a) "Assignment" means that certain Assignment of Inventions dated as of
November 17, 1995.
(b) "Gross Revenues" means one hundred percent (100%) of all amounts
accrued by CAC, its subsidiaries and its affiliates, as revenues, under
generally accepted accounting principles consistently applied, from all sources
whatsoever worldwide, including without limitation revenues from sales of
property, whether real, personal, tangible or intangible, from sales of
services, and from leases and licenses of property rights of every kind, but
shall not include any amounts received for sales, use or other transaction
taxes, duties or shipping costs.
(c) "Reversion Rights" means those rights of reversion provided to
Macrovision in the Assignment.
(d) "Royalty Term" means the forty-eight (48) consecutive calendar
quarters, commencing with the first calendar quarter after the date of this
Agreement in which CAC has operating revenues from commercial subscriptions,
advertising sales and/or consumer product royalties or, at the election of
Macrovision, any calendar quarter prior thereto.
(e) "Technology" means all technology developed by Macrovision during the
period beginning on the date of the Assignment and ending on the date hereof,
which relates directly to the inventions assigned by Macrovision pursuant to the
Assignment.
2. RELEASE, WAIVER AND TRANSFER. In consideration of the payment of
royalties by CAC as set forth in Section 3 below, Macrovision hereby releases
and waives the Reversion Rights, and transfers to CAC all of its rights in and
to the Technology.
3. PAYMENT OF ROYALTIES. In consideration of the release, waiver and transfer
made by Macrovision pursuant to the provision of Section 2 above, CAC hereby
agrees to pay to Macrovision royalties equal to two percent (2%) of CAC's Gross
Revenues for each calendar quarter in the Royalty Term. CAC shall make the
payments due to Macrovision hereunder with respect to Gross Revenues for each of
the first four (4) calendar quarters in the Royalty Term not later than seven
hundred fifty (750) days after the end of such calendar quarter. CAC shall make
the payments due to Macrovision hereunder with respect to Gross Revenues for
each of the second four (4) calendar quarters in the Royalty Term (i.e., the
fifth through eighth calendar quarters in the Royalty Term) not later than three
hundred eighty-five (385) days after the end of such calendar quarter. CAC
shall make the payment due to Macrovision hereunder with respect to Gross
Revenue for each calendar quarter in the Royalty Term thereafter not later than
twenty (20) days after the end of such calendar quarter. Each quarterly payment
shall be accompanied by a report stating the amount of Gross Revenue received by
CAC during the quarter.
4. AUDITED FINANCIALS, RECORDKEEPING AND INSPECTION. CAC hereby agrees to
provide to Macrovision unaudited financial statements for each calendar quarter
in the Royalty Term within thirty (30) days following the end of such calendar
quarter. CAC hereby agrees to provide to Macrovision financial statements
audited by a "Big Six" accounting firm for each calendar year including any
calendar quarter in the Royalty Term within ninety (90) days following the end
of such calendar year. If the Gross Revenues reported on such audited financial
statements differs from the cumulative amounts shown on the quarterly reports
for such calendar year, CAC shall make an adjustment payment to Macrovision if
the amounts shown on the quarterly reports were too low, or Macrovision shall
make an adjustment payment to CAC if the amounts shown on the quarterly reports
were too high, within twenty (20) days following delivery of the applicable
audited financial statement. CAC shall keep at its usual place or places of
business complete records of its Gross Revenues for each calendar quarter, for a
period of not less than three (3) years following the end of such calendar
quarter, and to regularly make entries in such records at its earliest business
convenience for the purpose of showing the amounts payable to Macrovision
hereunder. On not less than ten (10) days written notice, Macrovision shall
have the right, not more than once during any twelve (12) month period at
mutually agreed upon times during normal business hours at Macrovision's
expense, to examine any and all of CAC's records reflecting Gross Revenues for
the sole purpose of verifying the accuracy of CAC's reports of Gross Revenues
and the performance of CAC's obligations to make payments hereunder. In the
event that any such examination by Macrovision discloses an error in the
determination of any amounts due hereunder that is confirmed by CAC's
independent auditors, CAC shall make an adjustment payment to Macrovision if the
amount previously paid was too low, or Macrovision shall make an adjustment
payment to CAC if the amount previously paid was too high, within twenty (20)
days following such independent auditor's confirmation of the error. In the
event that any such examination by Macrovision discloses an error in the
determination of any amounts due hereunder, that is confirmed by CAC's
independent auditors, such that amount previously paid to Macrovision was too
low, Macrovision thereafter shall be entitled to examine CAC's books and records
on a quarterly basis.
5. NOVATION. If a first underwritten registration of the offering of the
common stock of Macrovision does not become effective on or before November 30,
1996, then effective
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December 1, 1996 this Agreement shall be extinguished, and all rights and
obligations created hereby shall terminate.
6. ATTORNEYS' FEES. In the event either party shall commence any action or
proceeding against the other party by reason of any breach or claimed breach in
the performance of any of the terms or conditions of this Agreement or to seek a
judicial declaration of rights under this Agreement, the prevailing party in
such action shall be entitled to recover reasonable attorneys' fees and costs
from the non-prevailing party.
7. CONTROLLING LAW. This Agreement is entered into and to be performed in
California, and it shall be interpreted and enforced under, and all questions
relating thereto shall be determined in accordance with the laws of the State of
California.
8. WAIVER. No waiver of any provision of this Agreement shall be deemed or
shall constitute a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
9. PARTIAL INVALIDITY. The illegality, invalidity or unenforceability of any
provision of this Agreement under the law of any jurisdiction shall not affect
its legality, validity or enforceability under the law of any other jurisdiction
nor the legality, validity or enforceability of any other provision.
10. ENTIRE AGREEMENT. This Agreement is intended by the parties as a final
expression of their agreement and as a complete and exclusive statement of the
terms of their agreement with respect to its subject matter. This Agreement may
not be contradicted by evidence of any prior or contemporaneous agreement, oral
or written, and this Agreement may not be explained or supplemented by evidence
of consistent additional terms. This Agreement supersedes, merges, and voids
all prior representations, statements, negotiations, understandings, proposed
agreements, and other agreements, written or oral, relating to its subject
matter.
11. AMENDMENTS. This Agreement may not be amended, modified or supplemented
except by a writing executed by both parties.
12. COUNTERPARTS. This Agreement may be signed in counterparts, each an
original but all one and the same instrument.
13. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of the
successors and assigns of Company and any successors and permitted assigns of
CAC, and shall be binding upon the successors and assigns of Company and of CAC.
14. FURTHER ASSURANCES. The parties hereto shall do and perform or cause to be
done and performed all such further acts and things and shall execute and
deliver all such other documents as any other party may reasonably request from
time to time in order to carry out the intent and purpose of this Agreement
contemplated hereby. Neither Macrovision nor CAC shall voluntarily
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undertake any course of action inconsistent with satisfaction of the
requirements applicable to them set forth in this Agreement and each shall
promptly do all such acts and take all such measures as may be appropriate to
enable them to perform as early as practicable the obligations herein required
to be performed by them.
15. NOTICES. Any notice or other communication required or permitted under
this Agreement shall be in writing and either personally delivered or deposited
in the first class United States mail, prepaid, certified or registered, return
receipt requested, addressed as follows:
(a) If to Macrovision:
Macrovision Corporation
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: President
with a copy to:
Wise & Xxxxxxx LLP
0000 Xxxxxx Xxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
(b) If to CAC:
Command Audio Corporation
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: President
Notice shall be deemed to have been given upon receipt. Either party may
change its address by giving written notice of such change to the other party in
the manner provided in this Section.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
COMMAND AUDIO CORPORATION MACROVISION CORPORATION
By: /s/ Xxxxxx X. Xxxxx By: /s/ W.A. Krepick
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Title: President Title: President
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FIRST AMENDMENT
TO
TECHNOLOGY TRANSFER AND ROYALTY AGREEMENT
This First Amendment to Technology Transfer and Royalty Agreement (this
"Amendment") is made as of November 29, 1996 by and between Macrovision
Corporation, a California corporation, and Command Audio Corporation, a
California corporation.
RECITALS
A. The parties entered into a Technology Transfer and Royalty
Agreement dated as of July 31, 1996 (the "Agreement").
B. The parties now wish to amend the Agreement as set forth herein.
The parties agree as follows:
1. DELETION OF SECTION 5 FROM THE AGREEMENT. Section 5 of the
Agreement is deleted in its entirety from the Agreement.
2. AGREEMENT CONTINUES IN EFFECT. The Agreement has not terminated,
and, except as expressly set forth herein, the provisions, terms and
conditions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment effective
as of the date first above written.
COMMAND AUDIO CORPORATION MACROVISION CORPORATION
By: /s/Xxxxxx X. Xxxxx By: /s/Xxxx X. Xxxx
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Title: Chairman & CEO Title: Chairman/CEO
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