Certain
confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.
Exhibit 10.3
CONFIDENTIAL — SUBJECT TO FRE 408
SETTLEMENT AND PATENT CROSS-LICENSE AGREEMENT
THIS AGREEMENT (the “
Agreement ”) is made as of this 17th day of
August, 2007 (the “ Effective Date ”) by
and between NetRatings, Inc., a Delaware corporation, with offices
at 770 Broadway, New York, NY 10003 (“
NetRatings ”), on the one hand, and Visual
Sciences, Inc., formerly known as WebSideStory, Inc., a Delaware
corporation, with offices at 10182 Telesis Court, San Diego, CA
92121 (“ VSI/WSS ”), on the other hand
(NetRatings and VSI/WSS collectively, the “
Parties ”).
W
I T N E S S E T H:
WHEREAS , NetRatings and
VSI/WSS are presently engaged in two civil actions, one of which
being captioned NetRatings, Inc. v. WebSideStory, Inc .,
Civil Action No. 06-cv-878 (LTS) (AJP) (S.D.N.Y.)
(hereinafter, the “New York Action”) and the other of
which being captioned WebSideStory, Inc., v. NetRatings, Inc
., Civil Action No. 06-cv-0408 (WQH) (AJB) (S.D. Ca.)
(hereinafter, the “ California Action ,”
and collectively with the New York Action, the “
Current Actions ”);
WHEREAS , NetRatings and
Visual Sciences Technologies, LLC, formerly known as and successor
in interest to, Visual Sciences, LLC, a Delaware limited liability
company with offices at 13450 Sunrise Valley Road, Herndon, VA
20171 (“ VSTLLC ”) were engaged in
litigation in the United States District Court for the Eastern
District of Virginia, captioned NetRatings, Inc . v .
Visual Sciences, LLC , Civil Action No. 2:05-CV-349
(the “ Virginia Action ”);
WHEREAS , NetRatings and
Visual Sciences, LLC entered into a Settlement and Patent License
Agreement, dated October 25, 2005 and annexed hereto as
Attachment 1 (the “ Virginia Action Agreement
”), pursuant to which the Virginia Action was dismissed and
NetRatings granted to Visual Sciences, LLC a license to certain
NetRatings’ patents, as further described in the Virginia
Action Agreement;
WHEREAS , on February 1,
2006, VSI/WSS, acquired VSTLLC, through a merger of Visual
Sciences, LLC into VS Acquisition, LLC, as a result of which the
Virginia Action Agreement was assigned to VS Acquisition, LLC by
operation of law;
WHEREAS , VS Acquisition, LLC
subsequently changed its name to Visual Sciences, LLC, and
thereafter in May 2007 to Visual Sciences Technologies, LLC
and all references herein to VSTLLC include its predecessor
entities Visual Sciences, LLC and VS Acquisition, LLC;
WHEREAS , since
February 2006 and now, VSTLLC has been and continues to
operate as a wholly owned subsidiary of VSI/WSS;
WHEREAS , on May 9,
2007, VSI/WSS amended its Certificate of Incorporation to change
its corporate name from “WebSideStory, Inc.” to
“Visual Sciences, Inc.”;
WHEREAS , NetRatings and
VSI/WSS wish to resolve and settle the Current Actions and all
disputes that are the subject matter of the Current Actions;
WHEREAS , NetRatings is the
sole and exclusive owner or joint owner of certain patents and
patent applications, as further identified herein;
WHEREAS , VSI/WSS is the sole
and exclusive owner of certain patents and patent applications, as
further identified herein; and
WHEREAS , as part of the
settlement of the Current Actions, NetRatings and VSI/WSS wish to
grant to one another cross-licenses to certain of their respective
patents, as further identified herein, pursuant to the terms and
subject to the conditions of this Agreement.
NOW, THEREFORE , in
consideration of the mutual promises, agreements and covenants
herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged and
agreed, the Parties agree as follows:
1.
DEFINITIONS
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
“Affiliate” shall mean, with respect to a
“person” or “entity,” 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.” For
purposes of this definition, “control,” as used with
respect to any person or entity, shall mean the possession,
directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person or entity,
whether through the ownership of voting securities, by agreement or
otherwise. The terms “controlled by” and “under
common control with” shall have correlative meanings.
1.2 “Licensed NetRatings
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
NetRatings from time to time, or that are used, licensed, marketed,
offered for sale, distributed, exported, imported or sold by
NetRatings from time to time, directly or indirectly. Licensed
NetRatings Products commercially released as of the Effective Date
are listed on Schedule B hereto. Except to the extent
permitted by Section 15.3 , Licensed NetRatings
Products shall not include any product, technology or service
developed by and for an entity other than NetRatings and which are
sold by third parties.
1.3 “Licensed VSI/WSS
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
VSI/WSS from time to time, or that are used, licensed, marketed,
offered for sale, distributed, exported, imported or sold by
VSI/WSS from time to time, directly or indirectly, including,
without
2
limitation, Merged VSI/WSS Products (as defined in
Section 5.3(ii) of this Agreement). Licensed VSI/WSS
Products commercially released as of the Effective Date are listed
on Schedule A hereto. Except to the extent permitted by
Section 15.1 or Section 16.1 and except for Merged
VSI/WSS Products, Licensed VSI/WSS Products shall not include any
product, technology or service developed by and for an entity other
than VSI/WSS and which are sold by third parties, including,
without limitation, any product, technology or service developed
solely by and for VSTLLC.
1.4 “NetRatings
Additional Patents” shall mean all United States and
foreign issued patents and United States and foreign pending patent
applications, other than the NetRatings Patents, owned or
controlled by NetRatings as of the Effective Date. For the
avoidance of doubt, NetRatings Additional Patents shall not include
any United States and foreign issued patents and United States and
foreign pending patent applications owned or controlled by Nielsen
Media Research, Inc., or other subsidiaries of The Nielsen Company
other than NetRatings. NetRatings will provide VSI/WSS, within
thirty (30) days of the Effective Date, a schedule of the
NetRatings Additional Patents. In addition, the NetRatings
Additional 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 patent
applications (other than the NetRatings Patents), as well as any
and all other present or future United States or foreign patents or
patent applications that claim priority to any of the above.
1.5 “NetRatings Change of
Control Event” shall mean the closing of a sale or
transfer to or acquisition by a person or entity other than an
entity that is a “Designated Affiliate” of NetRatings
(both at the time of the sale, transfer or acquisition and
immediately following the last transaction to occur in a series of
related transactions) (such person or entity, a
“NetRatings Purchaser” ), whether by
merger, asset purchase, consolidation, reorganization, or other
similar transaction or series of related transactions, of
(i) all or substantially all of the assets of NetRatings;
(ii) fifty percent (50%) or more of the combined voting power
of NetRatings then outstanding securities; or (iii) all or
substantially all of the Web Analytics assets of NetRatings. For
purposes of this Section 1.5 , a “
Designated Affiliate ” means an Affiliate of
NetRatings that is at least 85% owned, directly or indirectly, by
NetRatings, or that owns at least 85%, directly or indirectly, of
NetRatings, or of which the same ultimate parent entity owns,
directly or indirectly, at least 85% of each of NetRatings and such
Affiliate.
1.6 “NetRatings
Customer” shall mean any person or entity who, with
express authorization from NetRatings or a NetRatings Provider,
purchases, leases, licenses, subscribes to or uses any Licensed
NetRatings Product only for such person’s or entity’s
own use internally or in monitoring, tracking, or analyzing 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
NetRatings Product or any service depending thereon to a third
party.
1.7 “NetRatings
Patents” shall mean U.S. Patent Nos. 5,675,510;
6,115,680; 6,108,637; 5,796,952; 6,138,155; 6,643,696 and 6,763,386
and 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 patent
3
applications, as well as any and all other present or future United
States or foreign patents or patent applications that claim
priority to any of the above.
1.8 “NetRatings
Provider” shall mean any person or entity who, with
express authorization from and on behalf of NetRatings (including
without limitation OEMs, resellers, distributors and marketing
service providers (MSPs)), manufactures or develops any Licensed
NetRatings Product for NetRatings, uses any Licensed NetRatings
Product to provide services on behalf of NetRatings to NetRatings
Customers, or offers for sale, sells, imports, exports, resells,
licenses, combines or distributes to NetRatings Customers any
Licensed NetRatings 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 NetRatings
Product or any service depending thereon to a third party.
“NetRatings Provider” shall also include any person or
entity in another NetRatings Provider’s channels of
distribution with respect to a Licensed NetRatings Product,
provided that said person or entity has express authorization from,
and is acting on behalf of, NetRatings to participate in said
channels of distribution.
1.9
“Revenue” shall mean the gross
consolidated revenues of a person or entity from the manufacture,
development, design, sale, offer for sale, resale, import, export,
integration, hosting, leasing, licensing or distribution of
products, technology and/or services, less , sales, VAT,
excise, or similar taxes, returns, refunds, discounts, and
allowances actually shown on an applicable invoice. Except as noted
in the preceding sentence, no costs shall be deducted from Revenue.
Revenue of a person or entity shall be deemed to have occurred when
such revenue is recognized by such person or entity in accordance
with generally accepted accounting principles applied by such
person or entity from time to time.
1.10 “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 or VSI/WSS Patent expires, whichever is later,
unless earlier terminated in accordance with Section 10
.
1.11 “VSI/WSS Additional
Patents” shall mean all United States and foreign
issued patents and United States and foreign pending patent
applications, other than the VSI/WSS Patents, owned or controlled
by VSI/WSS as of the Effective Date. For the avoidance of doubt,
VSI/WSS Additional Patents shall not include any United States and
foreign issued patents and United States and foreign pending patent
applications owned or controlled by VSTLLC. VSI/WSS will provide
NetRatings, within thirty (30) days of the Effective Date, a
schedule of the VSI/WSS Additional Patents. In addition, the
VSI/WSS Additional 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 patent
applications (other than the VSI/WSS Patents), as well as any and
all other present or future United States or foreign patents or
patent applications that claim priority to any of the above.
1.12 “VSI/WSS Change of
Control Event” shall mean the closing of a sale or
transfer to or acquisition by a person or entity, other than an
entity that is a “Designated Affiliate” of VSI/WSS
(both at the time of the sale, transfer or acquisition and
immediately following the last transaction to occur in a series of
related transactions) (such person or entity, a
“VSI/WSS Purchaser” ), whether by merger,
asset purchase, consolidation, reorganization, or other
similar
4
transaction or series of related transactions, of (i) all or
substantially all of the assets of VSI/WSS; (ii) fifty percent
(50%) or more of the combined voting power of VSI/WSS’s then
outstanding securities; or (iii) all or substantially all of
the Web Analytics assets of VSI/WSS. For purposes of this
Section 1.12 , a “Designated
Affiliate” means an Affiliate of VSI/WSS that is at
least 85% owned, directly or indirectly, by VSI/WSS, or that owns
at least 85%, directly or indirectly, of VSI/WSS, or of which the
same ultimate parent entity owns, directly or indirectly, at least
85% of each of VSI/WSS and such Affiliate.
1.13 “VSI/WSS
Customer” shall mean any person or entity who, with
express authorization from VSI/WSS or a VSI/WSS Provider,
purchases, leases, licenses, subscribes to or uses any Licensed
VSI/WSS 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 VSI/WSS
Product or any service depending thereon to a third party.
1.14 “VSI/WSS
Patents” shall mean U.S. Patent Nos. 6,393,479 and
6,766,370 and any foreign counterparts, and United States or
foreign patents issuing as a divisional, continuation,
continuation-in-part, reissue, reexamination, renewal or extension
of the foregoing patents and patent applications, as well as any
and all other present or future United States or foreign patents or
patent applications that claim priority to the above.
1.15 “ VSI/WSS
Provider ” shall mean any person or entity who, with
express authorization from and on behalf of VSI/WSS (including
without limitation OEMs, resellers, distributors and marketing
service providers (MSPs)), manufactures or develops any Licensed
VSI/WSS Product for VSI/WSS, uses any Licensed VSI/WSS Product to
provide services on behalf of VSI/WSS to VSI/WSS Customers, or
offers for sale, sells, imports, exports, resells, licenses,
combines or distributes to VSI/WSS Customers any Licensed VSI/WSS
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 VSI/WSS Product or any service
depending thereon to a third party. “VSI/WSS Provider”
shall also include any person or entity in another VSI/WSS
Provider’s channels of distribution with respect to a
Licensed VSI/WSS Product, provided that said person or entity has
express authorization from, and is acting on behalf of, VSI/WSS to
participate in said channels of distribution.
1.16 “Web
Analytics” shall mean [ * ].
2.
PATENT CROSS-LICENSE
2.1 Grant of License to
VSI/WSS . Subject to Section 2.3 , NetRatings
hereby grants to VSI/WSS, 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,
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confidential treatment under 24b-2 of the Exchange Act of 1934 and
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5
license,
lease, sell, offer for sale, market, distribute, export and import
the Licensed VSI/WSS Products (the “ VSI/WSS
License ”).
2.2 Grant of License to
NetRatings . VSI/WSS hereby grants to NetRatings, 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 15.3) ,
world-wide license under the VSI/WSS 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 NetRatings
Products (the “ NetRatings License
”).
2.3 Exclusions to VSI/WSS
License . Notwithstanding anything in this Agreement to the
contrary, VSI/WSS expressly acknowledges and agrees that the
VSI/WSS License granted under this Agreement does not permit
VSI/WSS (or therefore any VSI/WSS Customers or VSI/WSS Providers)
the right to:
(i) [
* ]; or
(ii) [ * ];
or
(iii) [ *
].
2.4 Reservation of
Rights.
(i) Any
and all rights not expressly granted to VSI/WSS in this Agreement
with respect to the NetRatings Patents, including, without
limitation, the rights reserved under Section 2.3 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.
(ii) Any
and all rights not expressly granted to NetRatings in this
Agreement with respect to the VSI/WSS Patents, including, without
limitation, the right to enforce the VSI/WSS Patents against third
parties and collect royalties and/or damages in connection
therewith, are hereby reserved and retained exclusively by
VSI/WSS.
2.5 Sublicense Rights
(i)
Sublicense Rights of VSI/WSS . As part of its rights under
the VSI/WSS License, and only to the extent of such rights, VSI/WSS
may grant to (1) VSI/WSS Customers a limited, non-exclusive,
non-transferable, written sublicense under the VSI/WSS License
solely for the purpose of allowing such entities to purchase or use
the Licensed VSI/WSS Products and (2) VSI/WSS Providers a
limited, non-exclusive, non-transferable, written sublicense under
the VSI/WSS License solely for the purpose of allowing such
entities to manufacture or develop any Licensed VSI/WSS Product for
VSI/WSS, or offer for sale, sell, import, export, resell,
license,
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confidential treatment under 24b-2 of the Exchange Act of 1934 and
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Commission. |
6
combine
or distribute to VSI/WSS Customers any Licensed VSI/WSS 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 VSI/WSS Product or any service depending
thereon to a third party. Such sublicenses shall in no event apply
to products, services or technology of a VSI/WSS Customer or
VSI/WSS Provider which, without the Licensed VSI/WSS Product,
infringes any independent claim of any NetRatings Patents. Other
than as expressly provided by this Section 2.5(i) , no other
sublicenses of any kind may be granted by VSI/WSS under this
Agreement, and any such sublicenses shall be null and void. Any
sublicenses granted under this Section 2.5(i) are only valid
and in effect when and if the VSI/WSS License is valid and in
effect.
(ii)
Sublicense Rights of NetRatings . As part of its rights
under the NetRatings License, and only to the extent of such
rights, NetRatings may grant to (1) NetRatings Customers a
limited, non-exclusive, non-transferable, written sublicense under
the NetRatings License solely for the purpose of allowing such
entities to purchase or use the Licensed NetRatings Products and
(2) NetRatings Providers a limited, non-exclusive,
non-transferable, written sublicense under the NetRatings License
solely for the purpose of allowing such entities to manufacture or
develop any Licensed NetRatings Product for NetRatings, or offer
for sale, sell, import, export, resell, license, combine or
distribute to NetRatings Customers any Licensed NetRatings 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 NetRatings Product or any service
depending thereon to a third party. Such sublicenses shall in no
event apply to products, services or technology of a NetRatings
Customer or NetRatings Provider which, which without the Licensed
NetRatings Product, infringes any independent claim of any VSI/WSS
Patents. Other than as expressly provided by this
Section 2.5(ii) , no other sublicenses of any kind may
be granted by NetRatings under this Agreement, and any such
sublicenses shall be null and void. Any sublicenses granted under
this Section 2.5(ii) are only valid and in effect when
and if the NetRatings License is valid and in effect.
2.6 Markings and Samples .
VSI/WSS and NetRatings shall each fully comply with the patent
marking provisions of the United States or other applicable patent
laws. In furtherance of the foregoing, VSI/WSS and NetRatings will
clearly label their respective Licensed VSI/WSS Products and
Licensed NetRatings Products with, in the case of Licensed VSI/WSS
Products, identifying numbers of any issued NetRatings Patents,
specifying that the Licensed VSI/WSS Products are licensed under
such NetRatings Patents, and in the case of Licensed NetRatings
Products, identifying numbers of any issued VSI/WSS Patents,
specifying that the Licensed NetRatings Products are licensed under
such VSI/WSS Patents. As may be requested from time to time, but in
no event more than once each calendar year of the Term, VSI/WSS and
NetRatings shall submit to each other five (5) samples of each
of their respective Licensed VSI/WSS Products and Licensed
NetRatings 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.
The marking of any Licensed VSI/WSS Product or Licensed NetRatings
Product pursuant to this Agreement shall not be deemed to
constitute an admission by VSI/WSS or NetRatings that their
respective Licensed VSI/WSS Products and Licensed NetRatings
Products are covered by either the NetRatings Patents or the
VSI/WSS Patents, as the case may be.
7
3.
PAYMENT OF ROYALTIES
3.1 Royalty Fees for VSI/WSS
License .
(i)
Initial Royalty . As partial consideration for the
settlement of the New York and California Actions and the VSI/WSS
License granted under this Agreement, and regardless of whether any
additional payments are paid under Section 3.1 of this
Agreement, VSI/WSS shall pay nine-million U.S. dollars ($9,000,000)
to NetRatings (the “ Initial Royalty ”)
as follows: (1) within five (5) business days from the
date on which VSI/WSS executes this Agreement and receives a copy
of this Agreement that has been fully executed by a duly authorized
representative of NetRatings, VSI/WSS shall pay two-million U.S.
dollars ($2,000,000) to NetRatings; and (2) commencing on
March 31, 2008, and continuing thereafter on the last day of
each calendar quarter through and including June 30, 2011,
VSI/WSS shall pay five-hundred thousand U.S. dollars ($500,000) to
NetRatings, for a total of seven-million U.S. dollars ($7,000,000)
in quarterly payments. Notwithstanding the foregoing, in the event
of a VSI/WSS Change of Control Event the final four quarterly
payments provided for under Section 3.1(i)(2) ,
totaling two-million U.S. dollars ($2,000,000), will be accelerated
and will become immediately due and payable by VSI/WSS to
NetRatings as of the effective date of the VSI/WSS Change of
Control Event (the “ Accelerated Initial
Royalty ”). VSI/WSS shall pay the Accelerated Initial
Royalty within fifteen (15) business days of the VSI/WSS
Change of Control Event and shall continue making the quarterly
payments provided under Section 3.1(i)(2) until a total
of seven-million U.S. dollars ($7,000,000) in such quarterly
payments (including the Accelerated Initial Royalty) has been paid
by VSI/WSS to NetRatings.
(ii)
Additional Royalty . As further consideration for the
VSI/WSS License granted under this Agreement, and in addition to
the other payments required pursuant to Section 3.1 of this
Agreement, VSI/WSS will pay to NetRatings an additional royalty, in
the aggregate amount of two-million two-hundred fifty-thousand U.S.
dollars ($2,250,000) (the “ Additional Royalty
”), which Additional Royalty shall be required to be paid
within fifteen (15) business days of the occurrence of a
VSI/WSS Change of Control Event, provided that such
Additional Royalty will only be payable in connection with the
first VSI/WSS Change of Control Event to occur following the
Effective Date.
(iii)
VSI/WSS Acquisition Royalties . As further consideration for
the VSI/WSS License granted under this Agreement, and in addition
to the other payments required pursuant to Section 3.1
of this Agreement, in the event that, during the Term, VSI/WSS (or
a wholly owned subsidiary formed in connection with such
acquisition transaction) acquires, whether by merger, asset
purchase, consolidation, reorganization, or other similar
transaction or series of transactions, (a) all or
substantially all the technology, customers, or other assets of an
entity, (b) fifty percent (50%) or more of the combined voting
power of an entity’s then outstanding securities or
(c) all or substantially all of the Web Analytics assets of an
entity (in any case, the entity or assets so acquired being
referred to herein as the “ VSI/WSS Acquired
Entity ” and the transaction by which the entity or
assets are so acquired being referred to herein as the “
VSI/WSS Acquisition ”), then, if VSI/WSS elects
to have any of such VSI/WSS Acquired Entity’s products,
services or technology considered Licensed VSI/WSS Products
pursuant to Section 16.1 of this Agreement as of and
from the date of any such transaction, then within thirty
(30) business days following the closing date of any such
transaction VSI/WSS will: (1) if the
8
acquisition is of a VSI/WSS Acquired Entity listed in
Schedule C to this Agreement, pay NetRatings an
additional royalty of [ * ] percent [ * ] of the Revenues of such
VSI/WSS Acquired Entity generated from Web Analytics products,
services and technologies and recognized by such VSI/WSS Acquired
Entity within the four most recently completed calendar quarters
preceding the closing of such acquisition; or (2) if the
acquisition is of a VSI/WSS Acquired Entity not listed in
Schedule C , pay an additional royalty of [ * ] percent
[ * ] of the Revenues of such VSI/WSS Acquired Entity generated
from Web Analytics products, services and technologies and
recognized by such VSI/WSS Acquired Entity within the four most
recently completed calendar quarters preceding the closing of such
acquisition (either of the foregoing royalties referred to as a
“ VSI/WSS Acquisition Royalty ”). Upon
payment of a VSI/WSS Acquisition Royalty by VSI/WSS (or if no
VSI/WSS Acquisition Royalty need be paid by VSI/WSS as a result of
the provisions of Section 3.1(iv) ), NetRatings shall
immediately provide a release (consistent with
Section 7.1 ) of VSI/WSS and the VSI/WSS Acquired
Entity for all actions, claims, demands, causes of action, charges,
judgments, damages and attorneys fees from the beginning of time up
to and including the date of any such transaction relating to the
VSI/WSS Acquired Entity’s products, services, or technology;
provided, however , that if the VSI/WSS Acquired Entity is
an entity listed on Schedule C to this Agreement or is
a party to litigation with NetRatings based on a claim of
infringing any NetRatings Patent as of the date of the announcement
of a transaction (any such entity, a “Designated
Acquired Entity” ), then, unless no Acquisition
Release Royalty need be paid by VSI/WSS as a result of the
provisions of Section 3.1(iv) , the Acquisition Release
Royalty set forth in Section 3.1(v) would be required
to be paid to NetRatings in addition to the VSI/WSS Acquisition
Royalty in order for VSI/WSS and such Designated Acquired Entity to
receive any such release.
(iv) For
purposes of Section 3.1(iii) , the
“Revenues” of the products, services, or technology for
any such VSI/WSS Acquired Entity (and any Designated Acquired
Entity) shall be counted as defined in Section 1.9 of
this Agreement, but shall be limited to Revenues generated from Web
Analytics products, services or technologies. Notwithstanding the
foregoing and Section 3.1(v) below, VSI/WSS need not
pay the VSI/WSS Acquisition Royalties nor the Acquisition Release
Royalties for any transaction (and VSI/WSS and the VSI/WSS Acquired
Entity (including any Designated Acquired Entity) shall be deemed
licensed and released pursuant to Sections 3.1(iii) and
3.1(v) as though such royalties had been paid), if and only if
(1) VSI/WSS has paid (regardless of the type of consideration)
less than [ * ] for such VSI/WSS Acquired Entity (including any
Designated Acquired Entity) or the assets or securities thereof in
a single transaction or in any series of related transactions,
(2) the VSI/WSS Acquired Entity (including any Designated
Acquired Entity) already has a license from NetRatings under the
NetRatings Patents which covers the acquired technology, customers
or other assets of the VSI/WSS Acquired Entity (including any
Designed Acquired Entity); provided, however , that any
payments due to NetRatings under a license agreement between
NetRatings and the VSI/WSS Acquired Entity (including any
Designated Acquired Entity) will still be due and payable in
accordance with the terms of such license agreement, or
(3) VSI/WSS’s royalty payment obligations have
terminated prior to the closing date of such transaction pursuant
to
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has been filed separately with the Securities and Exchange
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Section 3.2 . For the avoidance of doubt, an
acquisition by VSI/WSS under Section 3.1(iii) cannot also be
deemed a VSI/WSS Change of Control Event.
(v)
Acquisition Release Royalties for Designated Acquired
Entities . In the event that, during the Term, VSI/WSS
acquires, whether by merger, asset purchase, consolidation,
reorganization, or other similar transaction or series of related
transactions, (a) all or substantially all of the technology,
customers, or other assets of a Designated Acquired Entity,
(b) fifty percent (50%) or more of the combined voting power
of a Designated Acquired Entity’s then outstanding
securities, or (c) all or substantially all of the Web
Analytics products, services or technology of a Designated Acquired
Entity, then, at VSI/WSS’s election, in exchange for a
release (consistent with Section 7.1 ) of VSI/WSS and
the Designated Acquired Entity by NetRatings for all actions,
claims, demands, causes of action, charges, judgments, damages and
attorneys fees relating to such Designated Acquired Entity’s
products, services, or technology from the beginning of time up to
and including the date of any such transaction, within thirty
(30) business days following the closing date of any such
transaction, VSI/WSS will pay NetRatings an additional royalty of [
* ] of
the Revenues of such Designated Acquired Entity recognized by such
Designated Acquired Entity within the four most recently completed
calendar quarters preceding the closing of such acquisition for all
Web Analytics products, services, or technology sold, leased,
licensed or otherwise distributed by such Designated Acquired
Entity during such period (the foregoing royalties referred to as
an “Acquisition Release Royalty” ). Upon
payment of an Acquisition Release Royalty by VSI/WSS (or if no
Acquisition Release Royalty need be paid by VSI/WSS as a result of
the provisions of Section 3.1(iv) ), NetRatings shall
immediately provide such release to VSI/WSS and such Designated
Acquired Entity.
3.2 Termination of VSI/WSS Royalty
Obligations . In the event that, and only in the event that,
every claim of every one of the NetRatings Patents is determined to
be invalid or unenforceable by a final, unappealable 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 Royalty
(including any Accelerated Initial Royalty), Additional Royalty,
VSI/WSS Acquisition Royalty or Acquisition Release Royalty payments
will be due. The termination of the payments pursuant to this
Section 3.2 shall not entitle VSI/WSS to a refund of
any payments previously made.
3.3 No Contest . VSI/WSS
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 VSI/WSS may contest or assist in contesting
the validity and enforceability of any NetRatings Patent asserted
against VSI/WSS or any Affiliate of VSI/WSS unless such Affiliate
was a party to litigation with NetRatings with respect to the
NetRatings Patents (or any license agreement related thereto) at
the time of becoming an Affiliate of VSI/WSS. VSI/WSS further
agrees that the termination of any of the
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has been filed separately with the Securities and Exchange
Commission. |
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royalty
payments pursuant to Section 3.2 above shall not be
effective in the event of a breach of VSI/WSS’s agreement not
to so contest or assist in contesting the validity or
enforceability of any of the NetRatings Patents. NetRatings agrees
not to contest the validity or enforceability of any of the VSI/WSS
Patents or in any way assist any other entity in contesting the
validity or enforceability of any of the VSI/WSS Patents, except
that NetRatings may contest or assist in contesting the validity
and enforceability of any VSI/WSS Patent asserted against
NetRatings or any Affiliate of NetRatings unless such Affiliate was
a party to litigation with VSI/WSS with respect to the VSI/WSS
Patents (or any license agreement related thereto) at the time of
becoming an Affiliate of NetRatings.
3.4 Method of Payment . Unless
otherwise specified in writing by NetRatings, all payments to be
made by VSI/WSS under this Agreement shall be made by wire transfer
of funds to the account of NetRatings as set forth in
Exhibit C hereto.
3.5 Interest on Late Payments
. Late payments shall incur interest from the date which is one
week following the date such payments were originally due 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).
3.6 Royalty Statements .
Within thirty (30) business days of any VSI/WSS Acquisition as
to which payment is being made under Section 3.1(iii)
of this Agreement, VSI/WSS shall provide NetRatings with a written
statement of the Revenues of the VSI/WSS Acquired Entity recognized
by such VSI/WSS Acquired Entity within the four most recently
completed calendar quarters preceding the closing of the
acquisition. Such royalty statements shall be certified as accurate
by a duly authorized officer of VSI/WSS. The receipt or acceptance
by NetRatings of any royalty statement or payment shall not prevent
NetRatings from subsequently challenging the validity or accuracy
of such statement or payment.
4.
RECORD INSPECTION AND AUDIT
NetRatings’ Right To
Inspect and Audit . Within ninety (90) days of the
effective date of an acquisition under Section 3.1(iii)
, NetRatings shall have the right, upon reasonable notice to
VSI/WSS, up to one (1) time with respect to any acquisition
and to be conducted within three (3) months from the date of
receipt of notice regarding such acquisition, to audit
VSI/WSS’s books and records relevant to the Revenues of any
VSI/WSS Acquired Entity for which VSI/WSS Acquisition Royalties may
be due pursuant to Section 3.1(iii) . Any audit
described herein will be performed by an independent accounting
firm that is mutually agreed upon by NetRatings and VSI/WSS,
provided that such accounting firm agrees in writing to maintain
the confidentiality of such books and records. The cost of the
independent accounting firm retained to conduct any audit as
described herein shall be borne by NetRatings, unless a deficiency
of ten percent (10%) or more is found during the audit, in which
case said cost of the independent accounting firm for said audit
shall be borne by VSI/WSS.
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5.
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties
of the Parties . Each party represents and warrants to the
other that it has the right and power to enter into this Agreement.
NetRatings represents and warrants that it and/or its wholly owned
subsidiaries are the sole owner or joint owner of all right, title,
and interest in and to the NetRatings Patents, and that NetRatings
has the power to grant the VSI/WSS License granted herein. VSI/WSS
represents and warrants that it and/or its wholly owned
subsidiaries are the sole owner of all right, title, and interest
in and to the VSI/WSS Patents, and that VSI/WSS has the power to
grant the NetRatings License granted herein. Each party
acknowledges that the representations and warranties made by the
other party herein constitute a material part of the consideration
inducing each party to enter into this Agreement.
5.2 Representations and Warranties
of VSI/WSS .
(i) VSI/WSS
acknowledges that the Licensed VSI/WSS Products commercially
released as of the Effective Date are as identified in
Schedule A attached hereto and that the Licensed
VSI/WSS Products (including those identified in
Schedule A ) are and will be subject to the terms and
conditions of this Agreement and not to the terms and conditions of
the Virginia Action Agreement.
(ii) VSI/WSS
acknowledges that any VSI/WSS products, technology or services that
are manufactured, made or developed by or for VSI/WSS after the
Effective Date that utilize, incorporate, or obtain technology from
any products, technology or services that are subject to the
Virginia Action Agreement ( “Merged VSI/WSS
Products” ), are and will be subject to the terms and
conditions of this Agreement and not to the terms and conditions of
the Virginia Action Agreement.
5.3 Limitations on Warranties
. Nothing in this Agreement shall be construed as:
(i) representing the scope of any claims of the NetRatings
Patents or the VSI/WSS Patents; or (ii) representing that the
sale or use of products or services encompassed by one or more of
the claims set forth in the NetRatings Patents or the VSI/WSS
Patents will be free of infringement of any third party’s
intellectual property rights.
5.4 DISCLAIMER OF WARRANTIES .
EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS SECTION
5 , EACH PARTY HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT.
6.
LIMITATIONS OF LIABILITY
EXCEPT WITH RESPECT TO CLAIMS RELATED
TO EACH PARTY’S NON-DISCLOSURE OBLIGATIONS UNDER SECTION
11 , IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING
ANY LOST PROFITS, EXEMPLARY OR SPECIAL DAMAGES, HOWEVER CAUSED AND
BASED ON ANY THEORY OF LIABILITY, ARISING OUT OF THIS AGREEMENT. IN
ALL EVENTS, EACH PARTY’S
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TOTAL
LIABILITY IN THE AGGREGATE UNDER THIS AGREEMENT (EXCEPT WITH
RESPECT TO VSI/WSS’S ROYALTY OBLIGATIONS AND WITH RESPECT TO
CLAIMS RELATED TO EACH PARTY’S NON-DISCLOSURE OBLIGATIONS
UNDER SECTION 11 ) IS LIMITED TO AND SHALL NOT EXCEED
FIVE HUNDRED THOUSAND U.S. DOLLARS ($500,000), PLUS ANY REASONABLE
ATTORNEYS’ FEES AND INTEREST WHICH MAY BE DUE UNDER THIS
AGREEMENT OR UNDER LAW. FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS
SECTION 6 SHALL BE CONSTRUED TO LIMIT THE LIABILITY OF
VSI/WSS RESULTING FROM THE MANUFACTURE, SALE OR USE OF ANY PRODUCTS
OR SERVICES BY VSI/WSS OUTSIDE OF THE SCOPE OF THE VSI/WSS LICENSE
GRANTED HEREUNDER.
7.
RELEASES
7.1 Release of VSI/WSS .
NetRatings and its subsidiaries, officers, directors and employees
hereby irrevocably release and discharge VSI/WSS and its
subsidiaries, officers, directors, stockholders and employees from
any actions, demands, claims, causes of action, charges, judgments,
damages and attorneys fees, including all claims asserted in the
Current Actions, or in connection with the NetRatings Patents,
whether known or unknown, suspected or unsuspected, in law or in
equity, arising from or in connection with the manufacture
(including practicing methods, processes and procedures), use,
lease, license, sale, offer for sale, marketing, distribution,
exportation or importation of the Licensed VSI/WSS Products from
the beginning of time up to and including the Effective Date of
this Agreement. Nothing in this Section 7.1 is intended
by NetRatings to release VSI/WSS from any of its obligations under
this Agreement or from any liability of VSI/WSS or any other person
for actions occurring after the Effective Date. For the avoidance
of doubt, nothing in this Section 7.1 is intended to
release VSTLLC from any of its obligations under the Virginia
Action Agreement, whether for actions occurring before or after the
Effective Date of this Agreement.
7.2 Release of NetRatings .
VSI/WSS and its subsidiaries, officers, directors, and employees
hereby irrevocably release and discharge NetRatings and its
subsidiaries, officers, directors, stockholders and employees from
any actions, demands, claims, causes of action, charges, judgments,
damages and attorneys fees, including all claims asserted in the
Current Actions, or in connection with the VSI/WSS Patents, whether
known or unknown, suspected or unsuspected, in law or in equity,
arising from or in connection with the manufacture (including
practicing methods, processes and procedures), use, lease, license,
sale, offer for sale, marketing, distribution, exportation or
importation of the NetRatings Licensed Products from the beginning
of time up to and including the Effective Date of this Agreement.
Nothing in this Section 7.2 is intended by VSI/WSS to
release NetRatings from any of its obligations under this Agreement
or from any liability of NetRatings or any other person for actions
occurring after the Effective Date. For the avoidance of doubt,
nothing in this Section 7.2 is intended to release
NetRatings from any of its obligations under the Virginia Action
Agreement, whether for actions occurring before or after the
Effective Date of this Agreement.
8.
COVENANTS NOT TO SUE
8.1 NetRatings Covenant .
Subject to Section 8.3 , NetRatings hereby covenants
and agrees that it will not bring suit for infringement of the
NetRatings Additional Patents against
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VSI/WSS.
The provisions of this paragraph shall constitute a waiver, release
and/or discharge from any infringement occurring or any damages for
patent infringement accruing either prior to or after the Effective
Date with respect to the NetRatings Additional Patents. NetRatings
agrees that it shall not grant to any other party, by patent
assignment or otherwise, the right to enforce any of the NetRatings
Additional Patents against VSI/WSS or against any permitted
transferee of this Covenant, and that any transfer of the
NetRatings Additional Patents to another party, by patent
assignment or otherwise, shall be made subject to the covenant,
waiver, release and/or discharge set forth in this
Section 8.1 .
8.2 VSI/WSS Covenant . Subject
to Section 8.4 , VSI/WSS hereby covenants and agrees
that it will not bring suit for infringement of the VSI/WSS
Additional Patents against NetRatings. The provisions of this
paragraph shall constitute a waiver, release and/or discharge from
any infringement occurring or any damages for patent infringement
accruing either prior to or after the Effective Date with respect
to the VSI/WSS Additional Patents. VSI/WSS agrees that it shall not
grant to any other party, by patent assignment or otherwise, the
right to enforce any of the VSI/WSS Additional Patents against
NetRatings or against any permitted transferee of this Covenant,
and that any transfer of the VSI/WSS Additional Patents to another
party, by patent assignment or otherwise, shall be made subject to
the covenant, waiver, release and/or discharge set forth in this
Section 8.2 .
8.3 Transfer of Covenants Upon
VSI/WSS Change of Control . If a VSI/WSS Change of Control
Event occurs, and VSI/WSS elects to assign this Agreement to a
VSI/WSS Purchaser, then the covenant granted to VSI/WSS pursuant to
Section 8.1 shall be transferred to the VSI/WSS
Purchaser, but such covenant shall only extend thereafter to
VSI/WSS’s products, services, and technology commercially
released as of the date of such VSI/WSS Change of Control Event and
any and all VSI/WSS Original and Future Versions (as defined in
Section 15.1(i) of this Agreement) of such products,
services and technology. The covenant granted to NetRatings in
Section 8.2 shall remain in full force and effect following
a VSI/WSS Change of Control Event.
8.4 Transfer of Covenants Upon
NetRatings Change of Control . If a NetRatings Change of
Control Event occurs, and NetRatings elects to assign this
Agreement to the NetRatings Purchaser, then the covenant granted to
NetRatings pursuant to Section 8.2 shall be transferred
to the NetRatings Purchaser, but such covenant shall only extend
thereafter to NetRatings’ products, services, and technology
commercially released as of the date of such NetRatings Change of
Control Event and any and all NetRatings Original and Future
Versions (as defined in Section 15.3 of this Agreement)
of such products, services and technology. The covenant granted to
VSI/WSS in Section 8.1 shall remain in full force and
effect following a NetRatings Change of Control Event.
9.
DISMISSAL OF THE CURRENT ACTIONS
Promptly upon execution of this
Agreement by the Parties and in any event within five (5) business
days thereof, the Parties shall cause their respective legal
counsel to execute a Stipulation of Dismissal With Prejudice under
Rule 41 of the Federal Rules of Civil Procedure for each of
the New York Action and the California Action, dismissing each such
Action with
14
prejudice. Each of NetRatings and VSI/WSS will bear its own
litigation costs and fees. The Stipulations of Dismissal will be in
the form attached hereto as Exhibits A and B .
10.
TERMINATION
If any Party breaches any material
term or condition of this Agreement and fails to cure such breach
within sixty (60) days after receiving written notice of the
breach (the “Cure Period” ), the
non-breaching Party may terminate this Agreement on written notice
at any time following the end of the Cure Period. VSI/WSS’s
failure to timely make a payment required under
Section 3.1(i) or 3.1(ii) of this Agreement shall
constitute a material breach by VSI/WSS of the Agreement, except
that VSI/WSS shall have thirty (30) days to cure such breach
following receipt of written notice thereof from NetRatings.
VSI/WSS’s failure to timely make a payment required under
Sections 3.1(iii) or 3.1(v) of this Agreement shall
constitute a material breach by VSI/WSS of the Agreement, except
that VSI/WSS shall have sixty (60) days to cure such breach
following receipt of written notice thereof from NetRatings. If
VSI/WSS commits a material breach of the VSI/WSS License granted in
Section 2.1 or fails to make any payment required in
Section 3.1 of this Agreement and fails to cure such breach
within the applicable cure period, or if VSI/WSS fails to cure a
material breach of Section 2.3 within the Cure Period,
then the VSI/WSS License will be terminated and the following
payments set forth in Section 3.1 will be accelerated
and deemed immediately due and payable as of the date of such
termination: (1) the Initial Royalty; (2) the Additional
Royalty; and (3) the VSI/WSS Acquisition Royalties, but only
to the extent that the triggering conditions set forth in
Section 3.1(iii) have occurred prior to said
breach.
11.
CONFIDENTIALITY
11.1 Definition of Confidential
Information . “Confidential
Information” shall mean any confidential technical
data, trade secret, know-how or other confidential information
disclosed by any Party hereunder in writing, orally, or by drawing
or other form and which shall be marked by the disclosing party as
“Confidential” or “Proprietary.” If such
information is disclosed orally, or through demonstration, in order
to be deemed Confidential Information, it must be specifically
designated as being of a confidential nature at the time of
disclosure and reduced in writing and delivered to the receiving
party within thirty (30) calendar days of such
disclosure.
11.2 Exceptions To
Confidentiality . Notwithstanding the foregoing, Confidential
Information shall not include information which: (i) is known
to the receiving party at the time of disclosure or becomes known
to the receiving party without breach of this Agreement or
violation of a court order; (ii) is or becomes publicly known
through no wrongful act of the receiving party or any subsidiary of
the receiving party; (iii) is rightfully received from a third
party without restriction on disclosure; (iv) is independently
developed by the receiving party or any of its subsidiaries without
use of the Confidential Information of the disclosing party; or
(v) is approved for release upon a prior written consent of
the disclosing party.
11.3 Confidentiality
Obligations . The receiving party agrees that it will not
disclose any Confidential Information to any third party and will
not use Confidential Information of the disclosing party for any
purpose other than for the performance of the rights and
obligations
15
hereunder during the Term of this Agreement and for a period of [
* ]
thereafter, without the prior written consent of the disclosing
party. The receiving party further agrees that Confidential
Information shall remain the sole property of the disclosing party
and that it will take all reasonable precautions to prevent any
unauthorized disclosure of Confidential Information by its
employees and other representatives. No license shall be granted by
the disclosing party to the receiving party with respect to
Confidential Information disclosed hereunder unless otherwise
expressly provided herein.
11.4 Return of Confidential
Information . Upon the request of the disclosing party, the
receiving party will promptly return all Confidential Information
furnished hereunder and all copies thereof.
11.5 Disclosure . Neither
party shall disclose this Agreement or any of the terms hereof to
any third party without the prior written consent of the other
party. This Agreement and its terms shall be held in strict
confidence by each party and shall constitute Confidential
Information. [ * ] Further, based upon consultation with inside or
outside legal counsel, either party may disclose information
concerning this Agreement as required by the rules, orders,
regulations, discovery requirements, subpoenas or directives of a
court, government or governmental agency (including without
limitation the SEC). In the event either party determines that this
Agreement, or portions thereof, is required to be filed with the
SEC, it will seek confidential treatment of the Agreement or such
portions thereof as and to the extent permitted by the rules,
regulations and published guidance of the SEC. Notwithstanding
anything to the contrary, the Parties may publicly disclose
(including to customers or users of the Licensed VSI/WSS Products
or the Licensed NetRatings Products, and to VSI/WSS Providers or
NetRatings Providers) that the Actions have been settled and that
use of the Licensed VSI/WSS Products and the NetRatings Products,
in accordance with the terms of this Agreement, is a licensed use.
On or shortly after the Effective Date, VSI/WSS and NetRatings may
each issue a single respective press release concerning the
Agreement, which press releases will be approved of by the parties
prior to release of same, which approval shall not be unreasonably
withheld. The press release of VSI/WSS will be substantially in the
form shown in Exhibit D attached hereto, which
NetRatings acknowledges has been approved. Except as otherwise
required by applicable law, no other public announcements or press
releases may be made by either party concerning the Agreement
without the prior approval of the other party, which approval shall
not be unreasonably withheld.
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This information has been omitted pursuant to a request for
confidential treatment under 24b-2 of the Exchange Act of 1934 and
has been filed separately with the Securities and Exchange
Commission. |
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12.
NOTICES
Any notice required to be given under
this Agreement shall be in writing and delivered personally to the
other Party at the above-stated address or mailed by certified,
registere
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