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SETTLEMENT AND PATENT CROSS-LICENSE AGREEMENT

Settlement Agreement

SETTLEMENT AND PATENT CROSS-LICENSE AGREEMENT | Document Parties: VISUAL SCIENCES, INC. | NetRatings and Visual Sciences, LLC | NetRatings, Inc | WebSideStory, Inc You are currently viewing:
This Settlement Agreement involves

VISUAL SCIENCES, INC. | NetRatings and Visual Sciences, LLC | NetRatings, Inc | WebSideStory, Inc

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Title: SETTLEMENT AND PATENT CROSS-LICENSE AGREEMENT
Governing Law: New York     Date: 11/8/2007
Industry: Software and Programming     Sector: Technology

SETTLEMENT AND PATENT CROSS-LICENSE AGREEMENT, Parties: visual sciences  inc. , netratings and visual sciences  llc , netratings  inc , websidestory  inc
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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

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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

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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

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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,
 
*   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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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,
 
*   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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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.

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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

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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
 
*   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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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
 
*   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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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

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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

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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.
 
*   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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