SETTLEMENT AND
PATENT LICENSE AGREEMENT 1
THIS AGREEMENT
(the “ Agreement ”) is made as of this
28 th
day of February, 2006 (the “
Effective Date ”) by and between NetRatings,
Inc., a Delaware corporation, with offices at 120 West 45
th Street, New York, New York 10036 (“
NetRatings ”), and Omniture, Inc., a Delaware
corporation, with offices at 550 East Timpanogos Circle, Orem, Utah
84097 (“ Omniture ” or “
Licensee ”) (NetRatings and Licensee
collectively, the “ Parties
”).
WHEREAS ,
NetRatings is the sole and exclusive owner or joint owner of
certain patents and patent applications, as farther identified
herein;
WHEREAS ,
the Parties are presently engaged in litigation in the United
States District Court, District of Delaware, captioned
NetRatings, Inc. v. Omniture, Inc. , Civil Action
No. 05-313-GMS (the “ Action
”);
WHEREAS ,
the Parties wish to resolve and settle the Action and all disputes
that are the subject matter of the Action; and
WHEREAS ,
as part of the settlement of the Action, NetRatings wishes to grant
to Licensee, and Licensee wishes to receive, a license under the
aforementioned patents of NetRatings pursuant to the terms and
subject to the conditions of this Agreement.
NOW,
THEREFORE , in consideration of the mutual promises and
covenants herein contained, the Parties agree as
follows:
The capitalized
terms in this Agreement which are not defined in the text of the
Agreement shall have the meanings set forth in this
Section 1 . In addition, the existence or scope of any
defined term in this Agreement shall not constitute or be deemed to
be the belief on the part of NetRatings that the NetRatings Patents
or any claims therein are in any way limited in scope or to
application or enforcement in any particular field(s) of
use.
1.1
“ Change of Control Event ” means the
closing of a sale to or acquisition by a person or entity (“
Purchaser ”), whether by merger, consolidation,
reorganization or other similar transaction or series of related
transactions, of (i) all or substantially all of the assets of
the Licensee;
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Certain
provisions of this agreement marked with a [ * ] have been omitted
based upon a request for confidential treatment, and such
provisions have been filed separately with the Securities and
Exchange Commission pursuant to the application for confidential
treatment.
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or
(ii) fifty percent (50%) or more of the combined voting power
of Licensee’s then outstanding securities. For the avoidance
of doubt, a Change of Control Event shall not include a public or
private offering of Omniture securities, unless as a result of such
offering a person or entity acquires fifty percent (50%) or more of
the combined voting power of Omniture’s securities
outstanding immediately following such offering.
1.2
“ Licensee Customer ” shall mean any
person or entity who, with express authorization from Licensee or a
Licensee Provider, purchases, leases, licenses, subscribes to or
uses any Licensed Product only for such person’s or
entity’s own use internally or in monitoring or tracking the
use or access of computer resources delivered by such person or
entity over a network, and not for the purpose of providing the
Licensed Product or any service depending thereon to a third
party.
1.3
“ Licensee Provider ” shall mean any
person or entity who, with express authorization from and on behalf
of Licensee (including without limitation OEM’s, resellers
and distributors), manufactures or develops any Licensed Product
for Licensee, or offers for sale, sells, imports, exports, resells,
licenses, combines or distributes to Licensee Customers any
Licensed Product whether on a standalone basis or in combination
with its own products or services, including, but not limited to,
for the purpose of providing the Licensed Product or any service
depending thereon to a third party.
1.4
“ Licensed Products ” shall mean any
products, technology or services (whether in whole or in part, or
any portion thereof, and whether pursuant to sale, license,
subscription service or otherwise) that are manufactured, made or
developed by or for Omniture, or that are used, licensed, marketed,
offered for sale, distributed, exported, imported or sold by
Omniture, directly or indirectly, except as provided in
Section 2.2 . Licensed Products commercially released
as of the Effective Date are listed on Schedule B
hereto. Except to the extent permitted by
Section 15.1(ii) . Licensed Products shall not include
any product, technology or service developed by and for an entity
other than Omniture and which are sold by third parties.
1.5
“ Licensee’s Revenue ” shall mean
Licensee’s gross consolidated revenues from the manufacture,
development, design, sale, offer for sale, resale, import, export,
integration, hosting, leasing, licensing or distributing of
products, technology and/or services, including but not limited to
revenue received from all Licensee Customers and Licensee
Providers, less, sales, VAT, excise, or similar taxes, discounts
and allowances actually shown on an applicable invoice. No costs
shall be deducted from Licensee’s Revenue. Licensee’s
Revenue shall be deemed to have occurred when such revenue is
recognized by Licensee in accordance with generally accepted
accounting principles consistently applied.
1.6
“ NetRatings Patents ” shall mean all
United States and foreign issued patents and pending patent
applications owned or controlled by NetRatings as of the Effective
Date, including the patents and patent applications identified on
Schedule A attached hereto, which schedule NetRatings
agrees to supplement within thirty (30) days of the Effective
Date. In addition, the NetRatings Patents shall include any foreign
counterparts, and United States or foreign patents issuing as a
divisional, continuation, continuation-in-part, reissue,
reexamination, renewal or extension of any of the foregoing patents
and any pending patent applications, as well as any and
all
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other present
or future United States or foreign patents or patent applications
that claim priority to any of the above.
1.7
“ Omniture Patents ” shall mean all
United States and foreign issued patents, if any, and pending
patent applications owned or controlled by Omniture as of the
Effective Date, including the patents and patent applications
identified on Schedule C attached hereto, which
schedule Omniture agrees to supplement within thirty (30) days
of the Effective Date, and any United States or foreign patents
issuing as a divisional, continuation, continuation-in-part,
reissue, reexamination, renewal or extension of any of the
foregoing patents and patent applications.
1.8
“ Term ” shall mean the period commencing
as of the Effective Date and continuing to and including the date
on which the last remaining NetRatings Patent listed in
Schedule A (as will be supplemented by NetRatings
within thirty (30) days pursuant to Section 1.6 ,
or as may be supplemented by NetRatings thereafter upon a showing
that a patent or application was inadvertently omitted from
Schedule A ) expires, unless earlier terminated in
accordance with Section 10 .
1.9
“ Web Analytics ” shall mean [ *
].
2.1
Grant of License to Licensee . Subject to
Section 2.2 , NetRatings hereby grants to Licensee,
subject to the terms and conditions of this Agreement, a limited,
irrevocable (except as provided in Section 10 ),
non-exclusive, non-transferable (except as provided in
Section 15 ), royalty-bearing, world-wide license under
the NetRatings Patents during the Term to make (including the right
to practice methods, processes and procedures), have made, use,
license, lease, sell, offer for sale, market, distribute, export
and import the Licensed Products (the “ License
”).
2.2
Exclusions . Notwithstanding anything in this Agreement to
the contrary, Licensee expressly acknowledges and agrees that the
License granted under this Agreement does not permit the Licensee
(or therefore any Licensee Customers or Licensee Providers) the
right to:
(i) [
* ] For purposes of this Section 2.2(i) , an
“affiliate” of a “person or entity” means
any other person or entity that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under
common control with such “person or entity.”
2.3
Reservation of Rights . Any and all rights not expressly
granted to Licensee in this Agreement with respect to the
NetRatings Patents, including, without limitation, the rights
reserved under Section 2.2 to practice the NetRatings
Patents and the right to enforce the NetRatings Patents against
third parties and collect royalties and/or damages in connection
therewith, are hereby reserved and retained exclusively by
NetRatings.
2.4
Sublicense Rights . Licensee may grant to Licensee Customers
a limited, non-exclusive, non-transferable, written sublicense
under the License solely for the purpose of allowing such entities
to purchase or use the Licensed Products in accordance with
Section 1.2 . In
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addition,
Licensee may grant to Licensee Providers a limited, nonexclusive,
non-transferable, written sublicense under the License solely for
the purpose of allowing such entities to manufacture or develop any
Licensed Product for Licensee, or offer for sale, sell, import,
export, resell, license, combine or distribute to Licensee
Customers any Licensed Product whether on a standalone basis or in
combination with its own products or services, including, but not
limited to, for the purpose of providing the Licensed Product or
any service depending thereon to a third party. Such sublicenses
shall in no event apply to products, services or technology of a
Licensee Customer or Licensee Provider which, without the Licensed
Products, infringes any independent claim of any NetRatings
Patents. Other than as expressly provided by this
Section 2.4 , no other sublicenses of any kind may be
granted under this Agreement, and any such sublicenses shall be
null and void. Any sublicenses granted hereunder are only valid and
in effect when and if the License is valid and in
effect.
2.5
Markings and Samples . Licensee shall fully comply with the
patent marking provisions of the United States or other applicable
patent laws. In furtherance of the foregoing, Licensee will clearly
label the Licensed Products with identifying numbers of any issued
NetRatings Patents, specifying that the Licensed Products are
licensed under such NetRatings Patents. As may be requested from
time to time, but in no event more than once each calendar year of
the Term, Licensee shall submit to NetRatings five (5) samples
of each of the Licensed Products or such other evidence, including
screen captures, as will be reasonably sufficient to show that the
marking requirements of this Section 2.6 are being
fulfilled. Neither the marking of any Licensed Product pursuant to
this Agreement or this Section 2 shall be deemed to
constitute an admission by Licensee that the Licensed Products are
covered by the NetRatings Patents.
(i)
Initial Royalty . As partial consideration for the
settlement of the Action and the License granted under this
Agreement, and regardless of whether any additional payments are
paid under Section 3.1 of this Agreement, Licensee
shall pay ten-million U.S. dollars ($10,000,000) to NetRatings (the
“ Initial Royalty ”) as follows:
(1) within three (3) business days from the date on which
Licensee executes this Agreement and receives an original of this
Agreement, including all Exhibits (including the stipulations
required under Section 9 ), that has been fully
executed by a duly authorized representative of NetRatings,
Licensee shall pay one-million five-hundred thousand U.S. dollars
($1,500,000) to NetRatings; (2) no later than June 15,
2006, Licensee shall pay one-million five-hundred thousand U.S.
dollars ($1,500,000) to NetRatings; (3) no later than
September 15, 2006, Licensee shall pay one-million
five-hundred thousand U.S. dollars ($1,500,000) to NetRatings;
(4) on or before December 15,2006, Licensee shall pay
one-million five-hundred thousand U.S. dollars ($1,500,000) to
NetRatings; (5) on or before March 15, 2007, Licensee
shall pay one-million U.S. dollars ($1,000,000) to NetRatings;
(6) on or before June 15, 2007, Licensee shall pay
one-million U.S. dollars ($1,000,000) to NetRatings; (7) on or
before September 15, 2007, Licensee shall pay one-million U.S.
dollars ($1,000,000) to NetRatings; and (8) on or before
December 15, 2007, Licensee shall pay one-million U.S. dollars
($1,000,000) to NetRatings.
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(ii)
Additional Royalty . As further consideration for the
License granted under this Agreement, and in addition to the other
payments required pursuant to Section 3.1 of this
Agreement, Licensee will pay NetRatings an additional royalty, in
the aggregate not to exceed four-million U.S. dollars ($4,000,000)
(the “ Additional Royalty ”), which
Additional Royalty shall be required to be paid only if and when:
(1) Licensee completes an initial public offering of its
securities, in which case Licensee shall pay NetRatings
four-million U.S. dollars ($4,000,000) (minus any other payments
previously made under this Section 3.1(ii) ) within
five (5) business days of the closing of the initial public
offering; (2) a Change of Control Event occurs, in which case
Licensee shall pay NetRatings four-million U.S. dollars
($4,000,000) (minus any other payments previously made under this
Section 3.1(ii) ) within five (5) business days of
such Change of Control Event; and (3) for calendar year 2008,
and each calendar year thereafter, Licensee’s Revenue equals
or exceeds sixty-million U.S. Dollars ($60,000,000), in which case
Licensee shall pay NetRatings two-million U.S. dollars ($2,000,000)
on or before January 30 of the calendar year immediately
following the calendar year in which Licensee’s Revenue
equaled or exceeded sixty-million U.S. dollars ($60,000,000), up to
a total of four-million U.S. dollars ($4,000,000) (minus any other
payments previously made under this Section 3.1(ii)
).
(iii)
Licensee Provider Royalties . As further consideration for
the License granted under this Agreement, and in addition to the
other payments required pursuant to Section 3.1 of this
Agreement, in the event Licensee’s revenue for any given
calendar year during the Term from any single Licensee Provider
listed in Schedule F to this agreement (including
affiliates and subsidiaries of such Licensee Provider as of the
Effective Date) equals or exceeds [ * ], then, on or before
January 30 of the calendar year immediately following such
given calendar year, Licensee shall pay an amount equal to [ * ]
(the “ Licensee Provider Royalty ”).
During the Term, Licensee shall make such annual Licensee Provider
Royalty payments, if any, up to a total of [ * ] in the aggregate,
at which time no additional Licensee Provider Royalties will become
due. For purposes of this Section 3.1(iii) ,
Licensee’s revenue attributable to any single Licensee
Provider shall be determined in the same manner as Licensee’s
Revenues are determined for Licensee as defined in
Section 1.5 of this Agreement.
(iv)
Licensee Acquisition Royalties . As further consideration
for the License granted under this Agreement, and in addition to
the other payments required pursuant to Section 3.1 of this
Agreement, and subject to Section 3.2 below, in the
event that, during the Term, Licensee acquires, whether by merger,
consolidation, reorganization or other similar transaction or
series of transactions, all or substantially all the technology,
customers, or other assets of an entity or fifty percent (50%) or
more of the combined voting power of an entity’s then
outstanding securities (in either case, the entity being referred
to herein as the “ Acquired Entity ”), then,
within thirty (30) business days following the closing date of
any such transaction, Licensee will either pay NetRatings
(1) an additional royalty of [ * ], or (2) an additional
royalty of [ * ] (either of the foregoing royalties referred to as
a “ Licensee Acquisition Royalty ”). For
purposes of this Section 3.1(iv) , the [ * ].
Notwithstanding the foregoing, Licensee shall not be obligated to
pay the Licensee Acquisition Royalties for any transaction if and
only if (1) Licensee has paid (regardless of the type of
consideration) less than [ * ] for such Acquired Entity or the
assets or securities thereof in a single transaction or in any
series of transactions, or (2) the Acquired Entity already has
a license from NetRatings under the NetRatings Patents which covers
the acquired technology, customers or other
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assets of the
Acquired Entity or (3) Licensee’s royalty payment
obligations have terminated prior to the closing date of such
transaction pursuant to Section 3.2 .
3.2
Termination of Royalty Obligations . In the event that, and
only in the event that, every claim of every one of
NetRatings’ U.S. Patent Nos. 5,675,510; 5,796,952; 6,115,680;
6,108,637; 6,138,155; 6,643,696; 6,763,386 and any additional
NetRatings Patent asserted against at least one accused infringer
in any litigation action currently pending or started within six
(6) months of the Effective Date, is determined to be invalid or
unenforceable by a final, unappealed decision of a court having
competent jurisdiction and authority to issue such a holding or by
the Federal Circuit Court of Appeals, whichever is earlier, then
the payment obligations set forth in Section 3.1 shall
be terminated as of the date of such decision, and from that date
forward, no further Initial or Additional Royalty payments will be
due. The termination of the payments pursuant to this
Section 3.2 shall not entitle Licensee to a refund of
any payments previously made. Licensee agrees not to contest the
validity or enforceability of any of the NetRatings Patents or in
any way assist any other entity in contesting the validity or
enforceability of any of the NetRatings Patents, except that
Licensee may contest the validity or enforceability of any
NetRatings Patent which NetRatings asserts against Licensee in an
action. Licensee further agrees that the termination of any of the
royalty payments pursuant to this Section 3.2 shall not
be effective in the event of a breach of Licensee’s agreement
not to so contest or assist in contesting the validity or
enforceability of any of the NetRatings Patents.
3.3
Method of Payment . Unless otherwise specified in writing by
NetRatings, all payments to be made by Licensee under this
Agreement shall be made by wire transfer of funds to the account of
NetRatings as set forth in Exhibit B hereto.
3.4
Interest on Late Payments . Late payments shall incur at the
prime interest rate, as reported by the Wall Street Journal, plus
one percent (1%) per month from the date such payments were
originally due hereunder or the highest rate allowable under
applicable law (whichever is less).
3.5
Royalty Statements . Unless or until Licensee’s
obligation to pay the Additional Royalty and Licensee Provider
Royalty is fully satisfied or has terminated, then, on or before
January 30 th of
each calendar year, Licensee shall provide NetRatings with written
statements of Licensee’s Revenue in the form annexed hereto
as Schedule D . Within thirty (30) business days
of any acquisition by Licensee pursuant to
Section 3.1(iv) . Licensee shall provide NetRatings
with a written statement of the applicable [ * ]. Such royalty
statements shall be certified as accurate by a duly authorized
officer of Licensee. The receipt or acceptance by NetRatings of any
royalty statement or payment shall not prevent NetRatings
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