EXHIBIT 10.2
FORM OF
INTELLECTUAL PROPERTY AGREEMENT
-------------------------------
This Agreement is dated as of , 1996, between Media 100 Inc.
-------------
(f/k/a Data Translation, Inc.), a Delaware corporation ("Parent"), and Data
Translation, Inc. (f/k/a Data Translation II, Inc.), a Delaware corporation
("Sub").
WHEREAS, Parent and Sub have entered into a Distribution Agreement dated as of
, 1996 (the "Distribution Agreement"), pursuant to which Parent is
-------------
assigning and transferring to Sub certain businesses and assets associated with
Parent's data acquisition and imaging, commercial products and networking
distribution businesses (the "Contributed Businesses") in exchange for the
assumption by Sub of certain liabilities and obligations associated with such
businesses and the issuance by Sub to Parent of shares of Sub common stock on
such terms and conditions as are contained therein; and
WHEREAS, on , 1996 the Board of Directors of Parent declared a dividend
--------
of all outstanding shares of Sub to the holders of record of the outstanding
common stock of Parent, such dividend to be made on , 1996 (the
-----------
"Distribution Date"); and
WHEREAS, in connection with the transactions contemplated by the Distribution
Agreement, Parent and Sub desire that certain of Parent's intellectual property
rights relating to the Contributed Businesses be assigned and transferred to
Sub, and that Parent and Sub each grant licenses to the other covering the use
of their respective intellectual property rights, all as more particularly set
forth herein;
NOW, THEREFORE, in consideration of the foregoing and the other agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1 Assignment of Intellectual Property Rights.
------------------------------------------
Section 1.1 Patents and Patent Applications. Subject to the terms and
-------------------------------
conditions of this Agreement, Parent does hereby assign and transfer to Sub its
entire right, title and interest in and to the patents and patent applications
listed on Schedule A hereto, including without limitation, income, royalties,
----------
damages, claims and payments now and hereafter due and/or payable in respect
thereto and rights to xxx and collect damages for past, present and future
infringements thereof. Parent shall promptly execute assignments contemplated
by the foregoing sentence and requested by Sub, and shall provide the same to
Sub for filing by Sub, as Sub deems appropriate.
Section 1.2 Trademarks. Subject to the terms and conditions of this Agreement,
----------
Parent does hereby assign and transfer to Sub its entire right, title and
interest in and to the trademarks (and corresponding registrations and
applications for registration) listed on Schedule B hereto, including without
----------
limitation, income, royalties, damages, claims and payments now or hereafter due
and/or payable with respect thereto and rights to xxx and collect damages for
past, present and future infringements thereof, together with the goodwill of
the businesses symbolized by such trademarks, and that portion of the on-going
and existing business to which the marks pertain, as required by 15 U.S.C. 1060.
Parent shall promptly execute assignments contemplated by the foregoing sentence
and requested by Sub, and shall provide the same to Sub for filing by Sub, as
Sub deems appropriate.
Section 1.3 Other Assignments. Subject to the terms and conditions of this
-----------------
Agreement, Parent does hereby assign and transfer to Sub its entire right, title
and interest in and to all trade secrets, know-how, proprietary information and
other similar intellectual property relating primarily to the Contributed
Businesses, including without limitation, income, royalties, damages, claims and
payments now and hereafter due and/or payable in respect thereto and rights to
xxx and collect damages for past, present and future infringements thereof.
Parent shall be under no obligation to provide Sub with any documentation with
respect to any of the intellectual property referred to in this Section 1.3 not
already in existence as of the Distribution Date. The intellectual property
being
assigned and transferred pursuant to Sections 1.1, 1.2 and 1.3 of this Agreement
is hereinafter referred to collectively as the "Assigned Intellectual Property."
Section 1.4 Disclaimer of Warranties. NOTHING IN THIS AGREEMENT SHALL BE
------------------------
DEEMED TO BE A REPRESENTATION OR WARRANTY BY PARENT OF THE SCOPE, VALIDITY,
ENFORCEABILITY, VALUE OR FREEDOM FROM INFRINGEMENT OF THIRD PARTY INTELLECTUAL
PROPERTY RIGHTS OF ANY OF THE ASSIGNED INTELLECTUAL PROPERTY. PARENT SHALL HAVE
NO LIABILITY WHATSOEVER TO SUB OR ANY OTHER PERSON ON ACCOUNT OF ANY INJURY,
LOSS OR DAMAGE, OF ANY KIND OR NATURE, SUSTAINED BY, OR ANY DAMAGE ASSESSED OR
ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED UPON SUB OR ANY
OTHER PERSON, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM (a) THE
PRODUCTION, USE OR SALE OF ANY APPARATUS OR PRODUCT THROUGH THE USE OR PRACTICE
OF ANY OF THE ASSIGNED INTELLECTUAL PROPERTY, (b) THE OTHER USE OF ANY OF THE
ASSIGNED INTELLECTUAL PROPERTY OR (c) ANY ADVERTISING OR OTHER PROMOTIONAL
ACTIVITIES WITH RESPECT TO ANY OF THE FOREGOING.
Section 1.5 Infringement of Third Party Intellectual Property Rights. In no
--------------------------------------------------------
event shall Parent be required to assume the defense of or pay any costs of
settlement of any alleged unauthorized use or infringement of any third party
patent, trademark or other intellectual property rights arising out of or in
connection with or resulting from any use of the Assigned Intellectual Property
by the Contributed Businesses or by Sub, either before or after the Distribution
Date, and Sub shall hold Parent harmless from any damages, costs or liabilities
incurred by any of them arising from or in connection with any such alleged
unauthorized use or infringement; provided, however, that Parent shall
reasonably cooperate with Sub in the defense of any such alleged unauthorized
use or infringement and Sub shall reimburse Parent for all reasonable attorneys'
fees and other out-of-pocket expenses incurred by Parent in connection
therewith.
Section 1.6 Payment of Costs of Assignment. From and after the Distribution
------------------------------
Date, Sub assumes all responsibility for paying any costs, including but not
limited to legal fees and government fees, associated with the Assigned
Intellectual Property, excluding any costs associated with the filing of
assignments with the appropriate patent or trademark offices for any of the
Assigned Intellectual Property.
Section 2 Cross-Licenses.
--------------
Section 2.1 Grant of License by Parent. Subject to the terms and conditions of
--------------------------
this Agreement, Parent, as licensor, does hereby grant to Sub, as licensee, a
non-exclusive, perpetual, fully paid-up, royalty-free, world-wide license to
make, have made, import, export, use, sell or otherwise dispose of products or
services using or embodying (a) the patents, patent applications, trade secrets,
know-how, proprietary information and other similar intellectual property owned
by Parent as of the Distribution Date other than the Assigned Intellectual
Property, including, with respect to the patents and patent applications
included therein, any re-issues, continuations, continuations-in-part,
divisionals and patents of addition thereof and corresponding foreign patents,
and excluding any trademarks otherwise included therein, and (b) any patents
issuing from patent applications filed by Parent within two years of the
Distribution Date, and any re-issues, continuations, continuations-in-part,
divisionals and patents of addition thereof and corresponding foreign patents
(collectively, the "Parent Licensed Intellectual Property"). Parent shall be
under no obligation to provide Sub with any documentation with respect to the
any of the Parent Licensed Intellectual Property.
Section 2.2 Grant of License by Sub. Subject to the terms and conditions of
-----------------------
this Agreement, Sub, as licensor, does hereby grant to Parent, as licensee, a
non-exclusive, perpetual, fully paid-up, royalty-free, world-wide license to
make, have made, import, export, use, sell or otherwise dispose of products or
services using or embodying (a) the Assigned Intellectual Property, including,
with respect to the patents and patent applications included therein, any re-
issues, continuations, continuations-in-part,
2
divisionals and patents of addition thereof and corresponding foreign patents,
and excluding the trademarks otherwise included therein, and (b) any patents
issuing from patent applications filed by Sub within two years of the
Distribution Date, and any re-issues, continuations, continuations-in-part,
divisionals and patents of addition thereof and corresponding foreign patents
(collectively, the "Sub Licensed Intellectual Property"). Sub shall be under no
obligation to provide Parent with any documentation with respect to the any of
the Sub Licensed Intellectual Property. References herein to the "Licensed
Intellectual Property" shall refer to the Parent Licensed Intellectual Property
in the context where Parent is the licensor and Sub is the licensee, and to the
Sub Intellectual Property in the context where Sub is the licensor and Parent is
the licensee.
Section 2.3 Disclaimer of Warranties. NOTHING IN THIS AGREEMENT SHALL BE
------------------------
DEEMED TO BE A REPRESENTATION OR WARRANTY BY EITHER PARENT OR SUB, AS LICENSOR,
OF THE SCOPE, VALIDITY, ENFORCEABILITY, VALUE OR FREEDOM FROM INFRINGEMENT OF
THIRD PARTY INTELLECTUAL PROPERTY RIGHTS OF ANY OF THE LICENSED INTELLECTUAL
PROPERTY. NEITHER PARENT OR SUB, AS LICENSOR, SHALL HAVE ANY LIABILITY
WHATSOEVER TO THE OTHER PARTY HERETO, AS LICENSEE, OR TO ANY OTHER PERSON ON
ACCOUNT OF ANY INJURY, LOSS OR DAMAGE, OF ANY KIND OR NATURE, SUSTAINED BY, OR
ANY DAMAGE ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR
IMPOSED UPON SUB OR PARENT, AS LICENSEE, OR ANY OTHER PERSON, ARISING OUT OF OR
IN CONNECTION WITH OR RESULTING FROM (a) THE PRODUCTION, USE OR SALE OF ANY
APPARATUS OR PRODUCT THROUGH THE USE OR PRACTICE OF ANY OF THE LICENSED
INTELLECTUAL PROPERTY, (b) THE OTHER USE OF ANY OF THE LICENSED INTELLECTUAL
PROPERTY OR (c) ANY ADVERTISING OR OTHER PROMOTIONAL ACTIVITIES WITH RESPECT TO
ANY OF THE FOREGOING.
Section 2.4 Infringement of Licensed Intellectual Property. In the event that
----------------------------------------------
the licensee or licensor hereunder of Licensed Intellectual Property learns that
any entity is or may be infringing in any way on any of the Licensed
Intellectual Property licensed to the licensee hereunder, or is engaged in
conduct which is liable to cause deception or confusion to the public, or is
diluting or infringing any right of the licensee or the licensor, the licensee
or licensor, as the case may be, shall notify the other party. The licensor
shall have the sole initial right to determine whether or not any action shall
be taken against such unauthorized use or infringement. The licensor shall
promptly notify the licensee of its determination and shall briefly describe the
action, if any, which it shall take. In the event that the licensor initiates
litigation against any entity, the licensor shall choose the attorneys, control
the litigation, pay the litigation expenses, and retain any settlement amount or
damages recovered as a result of any judgment in favor of the licensor. In the
event that the licensor takes no action to stop such alleged unauthorized use or
infringement within sixty (60) days following notice by the licensee or the
licensor, as the case may be (or such earlier date as the licensee reasonably
determines is necessary to avoid prejudicing the licensor's or the licensee's
ability to bring an action with respect to such alleged unauthorized use or
infringement), of such unauthorized use or infringement, then the licensee may
by written notice to the licensor request that the licensor bring an action with
respect to such alleged unauthorized use or infringement at the expense of the
licensee, in which event the licensor shall promptly commence such action, but
only if the licensee certifies to the licensor that in the licensee's good faith
judgment failure to take action against the unauthorized use or infringement in
question is likely to have a material adverse effect on the business of the
licensee. Any settlement amount or damages awarded in any such suit referenced
in the preceding sentence shall, after payment of expenses incurred by the
parties, be paid to the licensee. In any action taken pursuant to this Section
2.4, the licensee shall reasonably cooperate with the licensor in all respects,
to have the appropriate employees of the licensee assist in the preparation of
the suit and testify if requested by the licensor, and to make available any
records, papers, information, specimens and the like. Except as expressly
provided herein, all expenses incurred in connection with actions taken pursuant
to this Section 2.4 shall be borne independently by
3
each of the parties, with each party being liable solely for the fees and
expenses it incurs in connection with such action.
Section 2.5 Infringement of Third Party Intellectual Property Rights. In no
--------------------------------------------------------
event shall the licensor hereunder be required to assume the defense of or pay
any costs of settlement of any alleged unauthorized use or infringement of any
third party patent or other intellectual property rights arising out of or in
connection with or resulting from any use of the Licensed Intellectual Property
by the licensee hereunder, and the licensee shall hold the licensor harmless
from any damages, costs or liabilities incurred by the licensor arising from or
in connection with any such alleged unauthorized use or infringement; provided,
however, that the licensor shall reasonably cooperate with the licensee in the
defense of any such alleged unauthorized use or infringement and the licensee
shall reimburse the licensor for all reasonable attorneys' fees and other out-
of-pocket expenses incurred by the licensor in connection therewith.
Notwithstanding the foregoing, nothing contained in this Agreement shall be
deemed to limit Parent's indemnification obligations, as set forth in the
Distribution Agreement, with respect to the litigation entitled Avid Technology,
----------------
Inc. v. Data Translation, Inc., Civil Action No. 95-11193 JLT, pending in the
------------------------------
United States District Court for the District of Massachusetts.
Section 2.6 Prosecution of Licensed Patent Applications and Maintenance of
--------------------------------------------------------------
Issued Patents. It is understood and agreed between the parties hereto that
--------------
nothing contained in this Agreement creates any obligation on Parent or Sub, in
each case as licensor hereunder, to further prosecute before the U.S. Patent and
Trademark Office or before any foreign patent office any patent application
included in the Licensed Intellectual Property, or to file a corresponding
patent application in any foreign country based on any such U.S. patent
application, or to pay any maintenance fee which is due or which may become due
in respect of any patent or patent application included in the Licensed
Intellectual Property. In the event that the licensor decides to cease
prosecution of any patent application or to cease paying maintenance fees on any
issued patent, the licensor shall notify the licensee hereunder in writing at
least sixty (60) days prior to taking any such action, and, in the event that
the licensee desires that the licensor continue the prosecution of any such
patent application or that the licensor pay such maintenance fee and the
licensee reimburses the licensor for all costs thereafter incurred, the licensor
shall continue the prosecution of such patent application or pay the maintenance
fee for such issued patent. In the event that the licensor later earns any
royalty income from any such patent for which the licensee incurred any such
costs, the licensor shall pay to the licensee an amount equal to the lesser of
(a) the amount of such royalty income and (b) the amount of such costs incurred
by the licensee with respect to such patent.
Section 2.7 Transferability. The license granted to Sub or Parent pursuant to
---------------
Section 2.1 or 2.2 hereof, respectively, shall not be sublicensed, sold or
otherwise transferable by the licensee in whole or in part other than in
connection with (a) the distribution and sale by the licensee of its products
and services in the ordinary course of business or (b) a sale or transfer, on a
going concern basis, by the licensee of its entire business, through merger or
sale of stock or substantially all of the assets related thereto; provided that
any sale or transfer permitted by clause (b) above shall be subject to the
provisions of Section 2.8 hereof; and provided, further, that no such transfer
shall be effective unless the transferee shall have agreed in writing to be
bound by the terms and provisions of this Agreement applicable to the
transferor.
Section 2.8 Termination. The license granted to Sub or Parent, as licensee,
-----------
under Section 2.1 or 2.2 hereof, respectively, will terminate automatically,
without notice, with respect to any patents issuing from patent applications
filed after August 31, 1996 and included in the Licensed Intellectual Property
(unless such application claims the benefit of the filing date of an application
filed on or before August 31, 1996 under 35 U.S.C. 120 or 121), in the event
that there is a change in control of the licensee or the licensee's business;
provided, however, that such patents may continue to be used or embodied in
products which have been shipped commercially, or with respect to which the
licensee is substantially near completion of development prior to first
commercial shipment, on or prior to the date the license would otherwise
terminate as provided above. The license granted to Sub or Parent, as licensee,
under Section 2.1 or 2.2 hereof will terminate
4
automatically, without notice, with respect to all the Licensed Intellectual
Property licensed thereby (a) upon the institution by or against the licensee of
insolvency, receivership or bankruptcy proceedings, or any other proceedings for
the settlement of the licensee's debts, (b) upon the licensee's making an
assignment for the benefit of creditors, or (c) upon the licensee's dissolution.
In the event that any license granted to Sub or Parent is terminated pursuant to
this Section 2.8, the applicable licensee shall promptly return any
documentation reflecting or embodying the Licensed Intellectual Property with
respect to which such termination applies. Each of Sub and Parent, as licensee,
shall notify the licensor immediately upon becoming aware of any change in
ownership or control of the licensee which could result in a termination of the
applicable license.
Section 3 Non-Disclosure Agreements.
-------------------------
Parent and Sub shall cause their respective employees, promptly after the
Distribution Date, to enter into and execute non-disclosure agreements, in form
and substance reasonably satisfactory to the other company, governing the use by
such employees of confidential information relating to the other company,
including without limitation confidential information relating to the Assigned
Intellectual Property and the Licensed Intellectual Property, and shall take all
reasonable steps necessary to enforce each such non-disclosure agreement after
its execution.
Section 4 MISCELLANEOUS.
-------------
Section 4.1 Confidentiality. The provisions of the Distribution Agreement
---------------
relating to confidentiality shall apply with respect to any information obtained
or learned by either party from the other party in connection with the
assignments and licenses contemplated hereby. This Section shall survive the
termination of this Agreement.
Section 4.2 Dispute Resolution. All disputes, controversies or claims between
------------------
Parent and Sub arising out of or relating to this Agreement, including without
limitation the breach, interpretation or validity of any term or condition
hereof, shall be resolved in accordance with the provisions of the Distribution
Agreement relating to dispute resolution.
Section 4.3 Amendment and Waiver. No amendment of any provision of this
--------------------
Agreement shall in any event be effective unless the same shall be in writing
and signed by the parties hereto. Any failure of any party to comply with any
obligation, agreement or condition hereunder may only be waived in writing by
the other party but such waiver shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. No failure by any party to
take any action against any breach of this Agreement or default by the other
party shall constitute a waiver of such party's right to enforce any provisions
hereof or to take any such action.
Section 4.4 Notices. Any notice to any party hereto given pursuant to this
-------
Agreement shall be in writing and shall be given by the means, and to the
addresses, set forth in the "Notices" section of the Distribution Agreement.
Section 4.5 Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of, and be binding upon and enforceable against the respective successors and
assigns of the parties hereto, provided that, except as expressly provided in
Section 2.7 hereof, this Agreement may not be assigned by either party without
the prior written consent of the other party, and any attempt to assign any
rights or obligations hereunder without such consent shall be void.
Section 4.6 Entire Agreement; Parties in Interest. This Agreement (including
-------------------------------------
the Schedules hereto and the provisions of the Distribution Agreement
incorporated herein by reference) comprises the entire agreement between the
parties hereto as to the subject matter hereof and supersedes all prior
agreements and understandings between them relating thereto and is not intended
to confer upon any person other than the parties hereto (including their
successors and permitted assigns) any rights or remedies hereunder.
5
Section 4.7 Severability. If any term or provision of this Agreement or the
------------
application thereof to any person or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Agreement or the application of such
terms or provisions to persons or circumstances other than those as to which it
is invalid or unenforceable shall not be affected thereby and each term and
provision of this Agreement shall be valid and enforced to the fullest extent
permitted by law.
Section 4.8 Captions. Captions and headings are supplied herein for
--------
convenience only and shall not be deemed a part of this Agreement for any
purpose.
Section 4.9 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the internal substantive laws of the Commonwealth of
Massachusetts, without giving effect to the principles of conflicts of laws
thereof.
Section 4.10 Counterparts. This Agreement may be executed in several
------------
counterparts, and all counterparts so executed shall constitute one agreement,
binding upon the parties hereto, notwithstanding that the parties are not
signatory to the same counterpart.
IN WITNESS WHEREOF, Parent and Sub have caused this Agreement to be duly
executed by their authorized representatives as an agreement under seal, all as
of the day and year first written above.
MEDIA 100 INC.
By:
------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
DATA TRANSLATION, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Chairman and Chief Executive Officer
6
SCHEDULE A
TO
INTELLECTUAL PROPERTY AGREEMENT
BETWEEN
MEDIA 100 INC. AND DATA TRANSLATION, INC.
ASSIGNED PATENTS AND PATENT APPLICATIONS
----------------------------------------
Title of Application Serial No. Patent No.
(Inventor and Country) Status Filing Date Issue Date
----------------------------------------------------------------------------
Color Video Processing Circuitry Issued 07/172,017 4,916,531
(Genz - U.S.) 03/23/88 04/10/90
Circuitry for Conditioning Analog Issued 07/618,722 5,111,203
Signals and Converting to Digital Form 11/27/90 05/05/92
(Xxxxxxx - U.S.)
Xxxxxxx - Canada Pending 2050093
08/28/91
System for Locating Failure Signals Issued 07/603,791 5,185,883
by Comparing Input Data, etc. 10/26/90 02/09/93
(Xxxxx - U.S.)
Data Acquisition Apparatus Issued 06/242,840 4,380,764
(Xxxxxxx - U.S.) 03/12/81 04/19/83
Continuous Data Transfer System Issued 06/470,402 4,599,689
(Xxxxxx - U.S.) 02/28/83 07/08/86
Interrupt Driven Multi-Buffer DMA Issued 06/868,257 4,703,449
Circuit for Enabling Continuous 05/28/86 10/27/87
Sequential Data Transfers
(Xxxxxx - U.S.)
Oscillator and Voltage-to-Frequency Issued 07/724,528 5,168,247
Converter Employing the Same 06/28/91
(Xxxx - U.S.)
Storing a Digitized Stream of Issued 08/111,390 5,406,311
Interlaced Video Image Data in a 08/25/93 04/11/95
Memory in Non-Interlaced Form
(Xxxxxxxxx - U.S.)
Reprogrammable PCMCIA Card Pending 08/397,390
(Xxxxxxxxx - U.S.) 03/02/95
Computer Based Video System Pending 08/666,960
(Xxxxx - U.S.) 06/20/96
7
SCHEDULE B
TO
INTELLECTUAL PROPERTY AGREEMENT
BETWEEN
MEDIA 100 INC. AND DATA TRANSLATION, INC.
ASSIGNED TRADEMARKS
-------------------
Xxxx Jurisdiction Serial Number
------------------------------------------------------------
Broadway United States 75/006,321
Broadway European Union 00000
Xxxxxxxx Xxxxx 0-000
Xxxxxxxxxxxx Xxxxxx Xxxxxx 73/753,301
Data Translation United States 73/358,372
Data Translation Canada 498,887
Data Translation France 643,945
Data Translation Japan 95114/1982
Data Translation & Design United States 74/059,156
DT-Connect United States 74/180,184
DT-Open Layers United States 74/229,369
Global Lab United States 74/008,545
Global Lab & Design United States 74/118,765
Vision-EZ United States 74/403,329
8
