Exhibit 10.22
ACIS TECHNOLOGY LICENSE AGREEMENT
THIS LICENSE AGREEMENT, including the Exhibits ("Agreement"), effective
as of September 27, 2001 ("Effective Date"), is hereby made by and between ACIS,
Inc., a Texas corporation, having principal offices at 0000 XX Xxxx 000, Xxxxx
000, Xxx Xxxxxxx, Xxxxx 00000 ("ACIS"), and VSI Enterprises, Inc. a Delaware
corporation, having a principal offices at 0000 Xxxxxx Xxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxx 00000 ("VSI").
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS. All capitalized terms used herein shall have the meanings
set forth below.
1.1 ACIS Kernel means the Xxxxxx-event-kernel(TM) and any
implementation thereof (including single or multiple stack and polling or
non-polling), in source and object code forms, as well as any Derivatives
thereof created by or for ACIS during the term of this Agreement.
1.2 ACIS/MS Superkernel means an implementation of the ACIS Kernel
based on top of an underlying Microsoft Platform that provides threads and
synchronization primitives.
1.3 ACIS Tools means the tools, class libraries, utilities and
other programs developed or acquired by ACIS relating to the ACIS Kernel
(including the W++ preprocessor), as well as any Derivatives thereof created by
or for ACIS during the term of this Agreement.
1.4 ACIS Technology means the ACIS Kernel, ACIS Tools, associated
programmer and/or user documentation, and all related Intellectual Property
Rights.
1.5 CycleFree(TM) Development means use of ACIS Tools for the
construction of programs with a cycle-free invocation structure.
1.6 Derivatives means any revision, modification, translation,
abridgement, adaptation, subset, or improvement of or to the ACIS Technology,
but not any application or other program developed using CycleFree(TM)
Development.
1.7 Intellectual Property Rights means all worldwide (a) patents,
patent applications and patent rights (including without limitation U.S. Patent
No. 6,035,321 (the "321 Patent") and all foreign counterparts thereto); (b)
rights associated with works of authorship, including copyrights, copyrights
applications, copyrights restrictions, mask work rights, mask work applications
and mask work registrations; (c) rights relating to the protection of trade
secrets and confidential information; (d) rights analogous to those set forth
herein and any other proprietary
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rights relating to intangible property; (e) any "moral" or equivalent rights
(including, without limitation, rights of attribution, integrity, disclosure,
and withdrawal); and (f) divisions, continuations, renewals, reissues and
extensions of the foregoing (as applicable) now existing or hereafter filed,
issued, or acquired.
1.8 VSI Products means all computer programs developed or marketed
by VSI, including applications, control systems, utilities, or otherwise,
incorporating in whole or part an ACIS/MS Superkernel.
1.9 Microsoft Platform means Windows 2000, Windows XP, Windows CE,
Windows NT, Windows Me, all predecessor or successor versions thereof, and any
other operating system, embedded operating system or development platform
developed or marketed by Microsoft Corporation prior to or during the term of
this Agreement.
2. DELIVERY
2.1 ACIS Technology. ACIS will ensure that VSI has been or is
promptly provided with source and object code copies of each ACIS/MS Superkernel
and all relevant ACIS Tools, as well as electronic and hardcopy copies of
associated documentation.
2.2 Updates. ACIS will keep VSI informed of all newly-developed
ACIS Technology relevant to its license. ACIS shall make such update
information, programs and material available to VSI as soon as practicable, but
in no event later than the date ACIS releases such items to any of its other
licensees, and at no additional charge unless otherwise expressly provided in
this Agreement. Except for the foregoing, ACIS has no obligation to provide
support or maintenance to VSI with respect to the ACIS Technology.
3. GRANT OF LICENSE; INTELLECTUAL PROPERTY OWNERSHIP
3.1 License Grant. ACIS hereby grants to VSI a nonexclusive,
worldwide, irrevocable, perpetual license to: (a) use, copy, import, modify,
enhance, and create Derivatives of the ACIS Technology; (b) engage in
CycleFree(TM) Development using an ACIS/MS Superkernel; and (c) make, have made,
copy, distribute and sell VSI Products solely for use with and running on top of
a Microsoft Platform.
3.2 Sublicenses. The foregoing license includes the right of VSI
to sublicense such license rights to VSI resellers, OEMs and end user customers
in connection with the use and/or distribution of VSI Products; provided,
however, VSI may not sublicense to third parties the right to engage in
CycleFree(TM) Development.
3.3 Restrictions. Except as expressly granted herein, ACIS grants
no other license to VSI, express or implied, with respect to the ACIS
Technology. VSI will include an end user license with each copy of VSI Products
distributed to a customer containing terms setting forth the license
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restrictions and limitations set forth in this Section 3. In addition, VSI will
not permit any third party (i) to directly access the kernel functions provided
by the ACIS/MS Superkernel, or (ii) to use the ACIS Tools, VSI Derivatives of
such tools, or any other tools developed by VSI, to engage in CycleFree(TM)
Development.
3.4 Intellectual Property Ownership. ACIS shall own all rights,
title, and interest in and to the ACIS Technology and any Derivatives. To the
extent VSI develops any Derivative of the ACIS Kernel (including any improvement
to the 321 Patent), VSI agrees that ACIS shall own said Intellectual Property
Rights, and VSI will not seek, nor attempt to enforce against ACIS, any rights
with respect to such Derivative. Subject to ACIS's underlying rights in the ACIS
Technology and Derivatives, VSI shall own all rights, title and interest in all
programs developed by VSI hereunder using CycleFree(TM) Development, and all VSI
Products.
3.5 Additional Fields. In the event ACIS grants a license to any
third party to use the ACIS Technology with non-Microsoft Platforms, ACIS agrees
to make available such additional license rights to VSI on terms no less
favorable than those granted to such third party.
4. FEES; PAYMENT
4.1 Royalties and License Fees. Subject to the terms and
conditions of this Agreement, VSI shall pay ACIS the royalties and/or the
license fees in the amount and on the terms and conditions as specified in
Exhibit A. Royalties and license fees shall be due and payable to ACIS quarterly
after the sale or license of any VSI Product on which a royalty or license fee
is due.
4.2 Taxes. The amounts paid pursuant to this Agreement are
inclusive of any taxes, duties or other government-imposed fees, which shall be
the sole responsibility of the party against which such taxes may be levied.
4.4 Free Use for Non-Revenue Purposes. VSI shall be entitled to
use and copy the ACIS Technology free of charge for non-revenue business
purposes, including but not limited to VSI's internal use and distribution of
VSI Products to distributors or customers for demonstration or evaluation
purposes, provided that ACIS is paid a royalty or license fee on one copy of VSI
Product for each copy for which a royalty or license fee is not due.
4.5 Favored Pricing. ACIS represents and warrants to VSI that the
license fees or royalties offered to VSI under this Agreement are no less
favorable than those offered by ACIS to any other party. In the event ACIS
offers more favorable license fees or royalties to any other party, ACIS will
promptly notify VSI of such event and offer such more favorable license fees or
royalties to VSI commencing upon the date such more favorable license fees or
royalties were offered to the other party. ACIS will provide VSI with any
information necessary to evidence compliance with this paragraph. At VSI's
request, ACIS shall provide to VSI an officer's certificate certifying its
compliance with this paragraph.
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4.6 Audit Rights. VSI shall maintain, for a period of two (2)
years after the end of the year to which they pertain, complete records of the
VSI Products manufactured and distributed by VSI in order to calculate and
confirm VSI's royalty obligations hereunder. Upon reasonable prior notice, ACIS
will have the right, exercisable not more than once every six (6) months, to
appoint an independent accounting firm or other agent reasonably acceptable to
VSI, at ACIS's expense, to examine such financial books, records and accounts
during VSI's normal business hours to verify the royalties due by VSI to ACIS
herein, subject to execution of VSI's standard confidentiality agreement by the
accounting firm or agent. In the event such audit discloses an underpayment or
overpayment of royalties due hereunder, the appropriate party will promptly
remit the amounts due to the other party. In the event that payment due to ACIS
as a result of the audit exceeds the greater of $5,000 or five percent (5%) of
the royalties and license fees paid by VSI prior to the audit, VSI shall pay for
the cost of the audit.
5. PROMOTION AND PROTECTION OF CYCLEFREE TECHNOLOGY
5.1 Publicity and Promotion. ACIS will provide VSI rights to use
such information and documents reasonably necessary to allow VSI to assist ACIS
in promoting the ACIS Technology, including providing appropriate references in
press releases and establishing appropriate links on VSI's web site. VSI will
xxxx VSI Products as appropriate to reference ACIS's CycleFreeTM trademark and
its U.S. Patent Number 6,035,321
5.2 Protection and Enforcement. VSI will notify ACIS of any
activities or threatened activities of any third party of which VSI becomes
aware that infringe or will infringe any Intellectual Property Rights in the
ACIS Technology, and VSI will cooperate with and generally assist ACIS, at
ACIS's expense, in taking such action as may be necessary or desirable against
any such infringement. ACIS may, but shall not be required to, institute an
action against the infringer at ACIS's sole cost and expense. If ACIS elects not
to commence an action against an infringer, VSI may, but shall not be required
to, institute such an action at VSI's sole cost and expense on ACIS's behalf,
and ACIS will cooperate fully in any such action. Any recoveries obtained by
either ACIS or VSI as a result of instituting an action against such an
infringer shall be first applied to reimburse the out-of-pocket costs and
expenses to the party responsible for initiating such action, and the balance of
such recoveries shall be shared equally by ACIS and VSI.
6. PROPRIETARY NOTICES
6.1 Trademarks. During the term of this Agreement, ACIS hereby
grants to VSI a nonexclusive, worldwide license to use ACIS's trademarks, trade
names, and logos (the "ACIS Trademarks"), as updated by ACIS and agreed to in
writing by VSI from time to time, in connection with the sale and license of VSI
Products as provided in this Agreement. If any of the ACIS Trademarks are to
used in conjunction with VSI's or another party's trademarks, then the ACIS
Trademarks shall be presented legibly, but nevertheless separated from the
other, so that each appears to be a trademark in its own right, distinct from
the other xxxx.
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6.2 Notices. VSI will not remove any proprietary or confidential
legends, markings or copyright or other notices that ACIS has placed upon or
within the ACIS Technology and will reproduce such markings on any copies made
by VSI in accordance with this Agreement. Without limiting the foregoing, VSI
agrees to include in all VSI Products incorporating ACIS Technology subject to
the 321 Patent and/or any other ACIS patent, a patent notice in such form as
specified by the United States Patent and Trademark Office.
7. REPRESENTATIONS AND WARRANTIES
7.1 Representations and Warranties of ACIS. ACIS hereby represents
and warrants to VSI as follows:
(a) All materials and services provided by ACIS hereunder
including, without limitation, the ACIS Technology, are either owned or properly
licensed by ACIS and the use thereof by VSI, its contractors or customers do not
and will not infringe any proprietary rights of any third party. As of the date
of this Agreement, ACIS represents that it has not received any notice or claim
from a third party alleging that any of ACIS Technology infringes any
Intellectual Property Rights of such third party.
(b) ACIS has the full power to enter into this Agreement,
to carry out its obligations under this Agreement and to grant the rights and
licenses granted to VSI in this Agreement.
7.2 VSI Warranty. VSI represents and warrants that it has the full
power to enter into this Agreement, to carry out its obligations under this
Agreement.
8. INDEMNIFICATION
8.1 Infringement. ACIS shall defend, indemnify and hold harmless
VSI and its officers, directors, employees, shareholders, customers, agents,
successors and assigns from and against any and all loss, damage, settlement or
expense (including legal expenses), as incurred, resulting from or arising out
of (i) any breach of ACIS's warranties under this Agreement; or (ii) any claim
which alleges that any ACIS Technology provided to VSI hereunder, or the
exercise of VSI's license rights as provided under this Agreement, infringes
upon, misappropriates or violates any patents, copyrights, trademarks or trade
secret rights or other proprietary rights of any third party. VSI will provide
ACIS with prompt written notice of the claim and permit ACIS to control the
defense, settlement, adjustment or compromise of any such claim. VSI may employ
counsel at its own expense to assist it with respect to any such claim;
provided, however, that if such counsel is necessary because of a conflict of
interest of either ACIS or its counsel or because ACIS does not assume control,
ACIS will bear the expense of such counsel. VSI shall have no authority to
settle any claim on behalf of ACIS.
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8.2 ACIS's Efforts. If the exercise of VSI's license rights is
enjoined or becomes the subject of a claim of infringement, ACIS shall use all
reasonable efforts to obtain such licenses, or make such replacements or
modifications, as are necessary to VSI's continued exercise of its rights
hereunder without infringement. If ACIS is unable to achieve either of the
foregoing within thirty (30) days (or such longer period as determined by VSI in
good faith) after the holding of infringement or the entry of the injunction, as
applicable, the license fees or royalties payable under this Agreement shall be
reduced by the amount of any costs, royalties or fees incurred by VSI in
restoring the ability to exercise its license rights. The foregoing states VSI's
sole remedy with respect to such infringement or injunction.
8.3 Exceptions. ACIS shall have no obligation under paragraphs 8.1
and 8.2 to the extent any claim of infringement or misappropriation results from
use of the ACIS Technology in combination with any other unique products not
intended by ACIS, or from any alteration or modification of the License
Technology not provided or authorized by ACIS, if the infringement would not
have occurred but for such combination, alteration or modification.
9. CONFIDENTIALITY
9.1 Obligation. "Confidential Information" means information which
if disclosed (i) in tangible form, is clearly marked as confidential or
proprietary, or (ii) in intangible form (such as orally or visually), the
disclosing party identifies as confidential or proprietary at the time of
disclosure and provides a written summary of such information within thirty (30)
days of disclosure. Except as provided in this Agreement, no party may use,
copy, distribute or disclose Confidential Information it receives from another
party under this Agreement, without the prior written authorization of the
disclosing party. Each party must hold in confidence Confidential Information
received from another party and must protect the confidentiality thereof with
the same degree of care that it exercises with respect to its own information of
like importance, but in no event less than reasonable care, for the term of this
Agreement (but in no event more than three (3) years from the date of receipt of
the Confidential Information). No party shall be liable for any inadvertent or
unauthorized disclosure of Confidential Information, provided that such party
exercises at least the standard of care set forth above to prevent disclosure
and takes reasonable steps to mitigate any damage and prevent further
disclosure.
9.2 Exceptions. Section 9.1 does not apply to any portion of the
Confidential Information which a receiving party can demonstrate:
a. is now, or hereafter becomes, through no act or failure to act
on the part of receiving party, generally known in the
computer industry;
b. was possessed by the receiving party without an obligation of
confidentiality at the time of receiving such Confidential
Information;
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c. is rightfully obtained by the receiving party without
restriction on disclosure; or
d. is independently developed by receiving party without any use
of the Confidential Information.
9.3 Publicity. No party will disclose the terms and conditions of
this Agreement to any third party without first obtaining the written consent of
the other parties, except as may be required to implement and enforce the terms
of this Agreement, or as may be required by legal procedure or by law, or as may
be required by an existing or potential investor, acquiring company, bank or
other financial institution, under appropriate non-disclosure terms.
9.4 Non-Solicitation. During the term of this Agreement, ACIS will
not solicit for employment any employee of VSI involved in the development,
marketing or distribution of VSI Products.
10. TERM AND TERMINATION
10.1 This Agreement shall be effective from the Effective Date, and
shall remain in force unless and until terminated by mutual agreement or
otherwise as provided herein.
10.2 Termination for Cause. Either ACIS or VSI may terminate this
Agreement effective upon written notice to the other if the other party violates
any covenant, agreement, representation or warranty contained herein in any
material respect or defaults or fails to perform any of its obligations or
agreements hereunder in any material respect, which violation, default or
failure is not cured within thirty (30) days after notice thereof from the
non-defaulting party stating its intention to terminate this Agreement by reason
thereof.
10.3 Termination for Bankruptcy. ACIS may terminate this Agreement
effective upon written notice to VSI if VSI files a voluntary bankruptcy
petition, or its creditors file an involuntary petition that is not dismissed
within sixty (60) days, or VSI is adjudged bankrupt or insolvent, or a receiver
or trustee is appointed for all or substantially all of the assets of VSI.
10.4 Survival. Sections 3.3, 3.4, 4, 6, 8, 9, and 11 shall survive
any termination of this Agreement. Sections 3.1, 3.2 and 3.5 shall survive a
termination of this Agreement except for a section 10.3 termination.
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11. MISCELLANEOUS
11.1 Force Majeure. Neither party shall be liable to the other for
delays or failures in performance resulting from causes beyond the reasonable
control of that party, including, but not limited to, acts of God, labor
disputes or disturbances, material shortages or rationing, riots, acts of war,
governmental regulations, communication or utility failures, or casualties.
11.2 Import and Export. The parties agree to comply with all
applicable export laws and regulations of the United States. ACIS shall provide
all information under its control necessary or useful for VSI to obtain any
export or import licenses required for VSI to ship or receive ACIS Technology.
11.3 Relationship of Parties. ACIS and VSI are independent
contractors under this Agreement and no other relationship is intended,
including a partnership, franchise, joint venture, agency, employer/employee,
fiduciary, master/servant relationship, or other special relationship. Neither
party shall act in a manner that expresses or implies a relationship other than
that of independent contractor, nor bind the other party.
11.4 No Third Party Beneficiaries. Unless otherwise expressly
provided, no provisions of this Agreement are intended or shall be construed to
confer upon or give to any person or entity other than VSI and ACIS any rights,
remedies or other benefits under or by reason of this Agreement.
11.5 Attorneys' Fees. In addition to any other relief awarded, the
prevailing party in any action arising out of this Agreement shall be entitled
to its reasonable attorneys' fees and costs.
11.6 Notices. Any notice required or permitted to be given under
this Agreement shall be in writing and shall be personally delivered or sent by
a reputable overnight mail service (e.g., Federal Express), or by facsimile
confirmed by first class mail (registered or certified). Notices will be deemed
effective the next day if sent by overnight mail, or the same day if sent by
facsimile and confirmed as set forth above.
11.7 Assignment. Neither VSI nor ACIS may assign its rights or
delegate its obligations hereunder, either in whole or in part, whether by
operation of law or otherwise, without the prior written consent of the other,
except to a majority-owned subsidiary or a purchaser of all or substantially all
the stock or assets of the assigning party (other than a purchaser of such
party's assets out of bankruptcy). Notwithstanding the foregoing, VSI may not
assign its rights or delegate its obligations under this Agreement to Microsoft
Corporation or an entity controlled by Microsoft Corporation. The rights and
liabilities of the parties under this Agreement will bind and inure to the
benefit of the parties' respective successors and permitted assigns.
11.8 Waiver and Modification. Failure by any party to enforce any
provision of this Agreement will not be deemed a waiver of future enforcement of
that or any other provision. Any
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waiver, amendment or other modification of any provision of this Agreement will
be effective only if in writing and signed by the parties.
11.9 Severability. If for any reason a court of competent
jurisdiction finds any provision of this Agreement to be unenforceable, that
provision of the Agreement will be enforced to the maximum extent permissible so
as to effect the intent of the parties, and the remainder of this Agreement will
continue in full force and effect.
11.10 Controlling Law. This Agreement and any action related thereto
shall be governed, controlled, interpreted and defined by and under the laws of
the State of Texas, without regard to the conflicts of laws provisions thereof.
11.11 Entire Agreement. This Agreement, including all exhibits which
are incorporated herein by reference, constitutes the entire agreement among the
parties with respect to the subject matter hereof, and supersedes and replaces
all prior and contemporaneous understandings or agreements, written or oral,
regarding such subject matter, including without limitation the ACIS-VSI License
Agreement dated as of September 9, 1999.
11.12 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original and together which shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
persons duly authorized as of the date and year first above written.
VSI ENTERPRISES, INC. ACIS, INC.
By: By:
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Name: Name:
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Title: Title:
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Date: Date:
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EXHIBIT A
ROYALTIES AND FEES
For each VSI Product copy reproduced and distributed for revenue by or
under the sublicense rights of VSI, VSI shall pay a per copy royalty based on
VSI's Gross Revenues from the distribution of VSI Products according to the
following table. "Gross Revenues" shall mean VSI's accrued revenue for the
period determined in accordance with GAAP from the distribution, licensing and
sale of VSI Products hereunder, less deductions for refunds and returns.
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GROSS REVENUE PER UNIT % OF GROSS REVENUE
$.01 to $100 6% but not less than $2/unit
$100.01 to $1,000 4%
Above $1,000 2%
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For example, if Net Revenues on a unit are $1,500, the royalty due on
such unit would be ($100)(0.06) + ($900)(0.04) + ($500)(0.02) = $52
All royalties will be paid quarterly, pursuant to VSI's fiscal year,
within sixty (60) days following the end of the quarter. VSI will provide ACIS a
report showing the quantity of VSI Product copies shipped in the previous
quarter and the associated Gross Revenue. VSI shall be entitled to credit for
returns, which will be offset against or deducted from royalties due to ACIS or
will be refunded to VSI within thirty (30) days of request.
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