EX. 10.14
DEVELOPMENT & OEM LICENSING AGREEMENT
This DEVELOPMENT & OEM LICENSING AGREEMENT is entered into and made
effective as of the 24th day of November, 1997 by and between TTR Technologies
Ltd., a company formed under the laws of the State of Israel with an address at
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ("TTR") and ▇▇▇▇ ▇▇▇▇▇▇ & Associates
Inc., an Oklahoma corporation with its principal offices at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ("Developer") and Nimbus CD International,
Inc., a Delaware corporation with principle offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and its subsidiaries ("Licensee").
W I T N E S S E T H
WHEREAS, TTR is in the business of designing, developing, marketing and
distributing, inter-alia, optical media authenticity verification and software
protection products designed to prevent the unauthorized reproduction of
protected software applications and content and has developed proprietary
technology which prevents the faithful reproduction of optical media;
WHEREAS, Developer is in the business of designing, developing,
marketing and supplying mastering interface systems ("MIS" as defined below)
used to create CD and DVD optical disc glass masters;
WHEREAS, Developer is developing a MIS which integrates the DiscGuard
System (as defined below) for use on laser mastering machines (the "Enhanced
MIS") ;
WHEREAS, Licensee is in the business of replicating optical media;
WHEREAS, Licensee desires to integrate the Enhanced MIS into its laser
mastering machines in order to produce DiscGuard System enhanced glass masters
which are used to produce metal stampers which, in turn, produce CD-ROMs and
DVDs, all on the terms contained herein.
NOW, THEREFORE, in consideration of the terms and conditions hereafter set
forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms shall, unless the context otherwise
required, have the following meanings ascribed to them:
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1.1 "Customer" shall mean a software developer, title publisher or
electronic content provider.
1.2 "Confidential Information" means any (i) information or material
disclosed by one party hereto to the other in writing which the
disclosing party designates in writing as confidential at the
time of disclosure, (ii) information disclosed orally by one
party hereto to the other that is designated orally as
confidential at the time of disclosure and that is described and
designated as confidential in a written notice from the
disclosing party to the receiving party within thirty (30) days
after such disclosure, (iii) hardware and secret information
regarding the internals of the DiscGuard System, DiscGuard System
enhanced discs, MIS, Enhanced MIS and Licensee's Mastering
Machines, whether or not specifically designated as confidential,
and (iv) information regarding a Party's customers, whether or
not specifically designated as confidential. Notwithstanding the
foregoing, "Confidential Information" shall not include
information which: (i) becomes generally known other than through
the receiving party's breach of this Agreement or violation of a
disclosing party's rights under trade secrets or other law, (ii)
the receiving party independently develops without reference to
confidential information of the disclosing party or any third
party, or (iii) the receiving party acquires from a third party,
or develops based in part on information acquired from a third
party, without incurring any obligations of confidentiality.
1.3 "DCA Intellectual Property" means all United States and foreign
copyrights (including without limitation all renewals and
extensions thereof), registrations and applications for
registration of copyright, patents (including without limitation
continuations, continuations-in-part, reissues and extensions
thereof), applications for patent (including without limitation
divisions thereof), trade secrets and other intellectual property
rights, whether now existing or hereafter created, developed,
arising or otherwise coming into being, that relate to or cover
any of MIS (as defined below) or part thereof, including without
limitation any intellectual property rights that could be
violated, infringed or misappropriated by any copying,
manufacture, use, performance, distribution or other exploitation
of MIS or part thereof.
1.4 "DiscGuard System" is a TTR proprietary technology which prevents
the faithful reproduction of all types of optical media (CD-ROM,
CD-R, DVD-ROM, DVD-R etc.).
1.5 "DiscGuard Detecting Software" is software utilizing a distinct
identification code that enables an optical disc retrieval system
to determine whether a disc is a Fingerprinted Disc.
1.6 "DiscGuard Enabling Software" is software used in conjunction
with an Enhanced MIS and which enables the Enhanced MIS to
produce Fingerprinted Discs.
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1.7 "DiscGuard Workstation Software" is a graphical user interface
and software used to encrypt publisher applications to protect
them from running unless such applications are on a Fingerprinted
disc. This software also provides authorization capability so
that only a run authorized by TTR is allowed.
1.8 "Fingerprinted Disc" is a CD-ROM or DVD disc with a
non-reproducible digital fingerprint that can be detected during
retrieval to verify that the disc is authentic.
1.9 "Licensed Intellectual Property" means all Israel and foreign
copyrights (including, without limitation, all renewals and
extensions thereof), registrations and applications for
registration of copyright, patents (including, without
limitation, continuations, continuations-in-part, reissues and
extensions thereof), applications for patent (including, without
limitation, divisions thereof), trade secrets and other
intellectual property rights, whether now existing or hereafter
created, developed, arising or otherwise coming into being, that
relate to or cover any of DiscGuard System or part thereof,
including without limitation any intellectual property rights
that could be violated, infringed or misappropriated by any
copying, manufacture, use, performance, distribution or other
exploitation of DiscGuard System or part thereof.
1.10 "Mastering Interface System(s) ("MIS")" means a software
configuration which formats data and feeds the same to a laser
beam recorder (the "LBR") that is used solely in the pressed
optical media industry to produce a glass master (used to produce
metal stampers which, in turn, are used in replicating machines
to produce optical media); and where such MIS is proprietary to
the Developer or for which Developer has exclusive manufacturing
rights and sells or leases such MIS in the regular course of
business.
1.11 "Subsidiaries" means any company in which a party hereto holds
more than 50% of the voting equity.
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ARTICLE II
GRANT OF LICENSE; UNDERTAKING TO INTEGRATE DISCGUARD
2.1 Grant of TTR Development License. TTR hereby grants to Licensee a
non-exclusive, non-transferable license to merge, link, bundle or
otherwise integrate the DiscGuard Enabling Software into
Licensee's laser mastering machines ("Licensee Mastering
Machine(s)") which produce glass masters which are used to
produce metal stampers which, in turn, are used in replicating
machines to produce CD-ROMs and DVDs (hereafter sometimes
referred to as "disc(s)") in order to complete the Test Samples
described in Section 3.1.
2.2 Grant of Developer Development License. Developer hereby grants
to Licensee a non-exclusive, non-transferable license to
integrate into and use the Enhanced MIS with one Licensee
Mastering Machine in order to complete the Test Samples described
in Section 3.1
2.3 Grant of Exclusive Production License. Upon and subject to
completion of the First Run, as defined in Section 3.4, TTR
hereby grants to Licensee an exclusive, non-transferable,
worldwide license to;
i. merge, link, bundle or otherwise integrate the DiscGuard
Enabling Software into Licensee's Mastering Machines;
ii. duplicate the DiscGuard Enabling Software for purposes
related to integration; and
iii. use the DiscGuard Enabling Software to replicate
Fingerprinted Discs for Customers.
The license granted pursuant to this sub-section 2.3 (iii)
shall be exclusive for a period of six (6) months from the
date of its grant (the "Exclusive License period").
Notwithstanding the above, during the Exclusive License
Period, TTR and Developer shall each be authorized to
market, distribute and integrate directly and indirectly
the DiscGuard Enabling Software on third party laser
mastering machines and to produce Fingerprinted Discs so
long as no Fingerprinted Discs are sold thereon during the
Exclusive License Period. The license granted pursuant to
this Section 2.3 shall be called the "License".
2.4 Grant of Non-Exclusive Production License. Upon the end of the
Exclusive License Period, TTR hereby grants to Licensee a non-
exclusive, non-transferable, world-wide license to;
i. merge, link, bundle or otherwise integrate the DiscGuard
Enabling Software into Licensee's Mastering Machines;
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ii. duplicate the DiscGuard Enabling Software for purposes
related to integration; and
iii. use the DiscGuard Enabling Software to replicate
Fingerprinted Discs for Customers.
The parties acknowledge that the provisions of sections 2.1-2.4, inter
alia, apply separately to both CD-ROMs and DVDs.
2.5 Additional OEM Agreements; Restrictions. Nothing contained herein
grants, or shall be deemed or interpreted to grant to Licensee a
license or the right to distribute or exploit in any manner (i)
the DiscGuard System or Enhanced MIS (or any component thereof)
as a stand-alone product or (ii) the DiscGuard Detecting Software
or (iii) the DiscGuard Workstation Software. Additionally, this
Agreement shall not be construed to limit or restrict TTR (other
than as set out in Section 2.3 above) or Developer in any way
from (i) promoting, granting licenses to and installing the
DiscGuard System and other TTR products or the Enhanced MIS and
other Developer products at any location and at customer's
facilities, whether directly, indirectly, or through a
distributor, agent or subsidiary and (ii) granting resale,
distribution and OEM licenses relating to the DiscGuard System or
Enhanced MIS to third-parties.
2.6 Restricted Uses. Licensee is prohibited from changing,
developing, enhancing or otherwise modifying the DiscGuard System
or Enhanced MIS (or any component thereof) in any way whatsoever.
2.7 Compliance. Each Party will comply with all applicable laws and
regulations and ordinances including, but not limited to, the
regulations of the U.S. Government relating to the export of
commodities and technical data insofar as they relate to the
activities under this Agreement and the laws of the European
Economic Commission, to the extent such laws and regulations are
applicable.
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ARTICLE III
DEVELOPMENT OF DISCGUARD ENHANCED MASTERING MACHINE
3.1 General. This section sets forth the detailed agreement for the
setting up of work procedures and under which the Enhanced MIS
and DiscGuard Enabling Software will be integrated into a
Licensee Mastering Machine for the purposes of producing a
DiscGuard System enhanced glass master and a test run of twenty
(20) DiscGuard System protected CD-ROMs and a test run of twenty
(20) DiscGuard System protected DVDs (the "Test Sample(s)"). It
is expected that the above integration will proceed with all due
diligence and that the milestone dates set forth in Exhibit A
will be met. The CD-ROM Test Sample and the DVD Test Sample are
expected to be completed at different dates as set out in the
Exhibits attached hereto. Each of TTR , Developer and Licensee
recognizes that the completion of this project within the time
schedule set forth herein is fundamental to this Agreement and
contemplates the continuing cooperation and good will of each
party and the assignment to the project of competent personnel
from each side.
3.2 Development Tasks. Licensee, Developer and TTR shall perform
their respective development tasks specified in Exhibit A in
accordance with the development schedule specified therein and
the design specifications specified in Exhibit B (the
"Development").
3.3 Acceptance Testing. Upon completion of each of the Tests Samples
as herein provided, TTR shall review and conduct testing of the
discs to determine, in its sole discretion, whether such CD-ROM
Test Sample or DVD Test Sample is acceptable and shall notify
Developer and Licensee of such approval ("Acceptable"). In the
event that following such tests TTR determines that either of the
Test Samples is not Acceptable, all parties will undertake to
make process adjustments and will undertake continuing test runs
and TTR agrees to pay 50% of Licensee's costs.
3.4 Samples. Within 14 days after the CD-ROM or DVD Test Sample is
found Acceptable, Licensee shall, at its expense, provide TTR
with 1,000 Fingerprinted discs (CD-ROM or DVD as the case may
be), packaged in Jewel boxes with booklets (2 pages maximum) and
inlays and overwrapped ("First Run"). TTR shall provide Licensee
with artwork to be used in the above packaging, booklets and
inlays. TTR shall bear the cost of shipping these 1,000 discs.
3.5 Termination of Development License. In the event that TTR does
not find a Test Sample Acceptable as provided in Section 3.3 or
for whatever reason a Test Sample is not completed by January 31,
1998, then TTR may, at its option
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and upon written notice to Licensee and Developer, terminate
forthwith this Agreement with respect to the media of such Test
Sample (CD-ROM or DVD as the case may be).
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ARTICLE IV
UNDERTAKINGS OF PARTIES
4.1 Undertakings of TTR. (i) Promptly upon the execution of this
Agreement, and for the duration of the Development, TTR shall
provide Licensee with DiscGuard Enabling Software and other
materials to the extent necessary for its integration into a
Licensee Mastering Machine.
In the event that the License is entered into pursuant to
Sections 2.3 and 2.4, for the duration of the License, TTR shall
provide to Licensee, within five (5) Business Days' of its
availability for commercial distribution, DiscGuard Enabling
Software upgrades or improvements, if any.
4.2 For the duration of the Exclusive License Period, TTR shall refer
all potential Customers interested in the DiscGuard System to the
Licensee.
4.3 Undertakings of Licensee. The Licensee undertakes to perform each
of the following:
i. Integration of the Product. For the duration of the
Exclusive License Period, Licensee will integrate the
DiscGuard Enabling Software and Enhanced MIS, as provided
for hereunder;
ii. Non-Compete. *** [Omitted material; Confidential Treatment
Requested]
iii. Sublicense. Every agreement entered into by Licensee with
a Customer shall be no less protective of TTR's rights
than as provided for in this Agreement. Licensee shall
notify its Customers and provide documentation, with each
Fingerprinted Disc order, about the DiscGuard System,
stating that the DiscGuard System shall only be used with
DiscGuard Detecting Software and DiscGuard Workstation
Software which must be licensed from TTR under a separate
agreement.
iv. Networking. Within thirty (30) days after the end of each
Calendar Quarter, Licensee shall provide TTR with a
written statement setting forth, in reasonable detail, in
respect of the previous three month period, with prior
approval of Licensee's customers (for which Licensee shall
use reasonable commercial efforts to obtain), names and
addresses of all Customers for that period. Such
information will be treated as Confidential Information.
v. Purchase of Enhanced MIS. Within forty five (45) days of
expiration of the Exclusive License Period, Licensee shall
return to the Developer the Enhanced MIS and any
improvements and documentation concerning the same, unless
Licensee shall have purchased the Enhanced MIS from the
Developer for a purchase price agreed to by TTR, Licensee
and Developer.
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4.4 Undertaking of Developer. Promptly upon the execution of this
Agreement, Developer shall provide Licensee with the Enhanced MIS
and other materials to the extent necessary for the integration
into a Licensee Mastering Machine. For the duration of the
Development and Exclusive License Period, Developer shall provide
to Licensee, within five (5) Business Days' of its availability
for commercial distribution, upgrades or improvements, if any, to
the Enhanced MIS.
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ARTICLE V
LICENSE FEES
5.1 Royalties. In consideration of the rights granted to Licensee
pursuant to Section 2.3 and 2.4, Licensee shall, within
thirty (30) days after the end of each calender quarter, pay
TTR fifty (50%) percent of the premium charged and received by
Licensee for each Fingerprinted disc sold by or on behalf of
Licensee, and in any event not less than $0.075 shall be paid
to TTR per such disc (the "Royalties"). *** [Omitted material;
Confidential treatment requested] Confidential Material omitted
and separately filed with the Securities and Exchange Commission
5.2 Mastering Charge. With respect to each DiscGuard System protected
title sold or distributed by or on behalf of Licensee, Licensee
shall charge Customer a premium mastering charge. Within thirty
(30) days after the end of each calendar quarter, Licensee shall
pay TTR $1,000 from each such mastering premium charge received.
Such charge shall be collected on a per title and on a per
production site basis and not per glass master used in producing
such title.
5.3 Royalty and Mastering Charge Review. *** Confidential material
omitted and separately filed with the Securities and Exchange
Commission
5.4 Reports. Within thirty (30) days after the end of each calendar
quarter, Licensee shall submit to TTR a report detailing its
calculation of any amounts owing to TTR pursuant to this Article
5 for such quarter, broken down as reasonably requested by TTR to
the extent required to ensure the accuracy of payments hereunder.
5.5 Audit. TTR may request an audit of Licensee's books and records
by a nationally recognized independent public accounting firm not
more than twice in any one (1) year period upon ten (10) days
prior written notice to Licensee to confirm Licensee's compliance
with its obligations under this Article 5. Any such audit shall
be performed at Licensee's offices during its regular business
hours in a manner intended not to interfere with its operations.
Licensee shall assist and cooperate with the auditors to any
reasonable extent necessary to allow them to perform their
functions. If any audit reveals an underpayment, Licensee shall
immediately pay such underpayment; if any audit reveals a net
underpayment of more than five percent (5%), Licensee shall pay
the costs of the audit and TTR may conduct a follow up audit at
any time upon ten (10) days prior written notice, and Licensee
shall pay interest on such underpayment at the prime rate then
most recently published by the largest bank in New York (in terms
of assets) plus one (1) point; and if any audit reveals an
underpayment of more than ten percent (10%), TTR may terminate
this Agreement upon thirty (30) days prior written notice to
Licensee unless such underpayment was inadvertent, in which event
Licensee shall promptly use its best efforts to correct its
procedures to avoid such underpayments in the future, and TTR may
in any event terminate this Agreement upon thirty (30) days
notice if any subsequent audit reveals a net underpayment of more
than ten percent (10%).
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ARTICLE VI
PROPRIETARY RIGHTS
6.1 Title to Products. Licensee and Developer acknowledge that all of
the Licensed Intellectual Property is the sole property of TTR,
and Licensee and Developer shall not obtain any interest of any
kind in the DiscGuard System by or through this Agreement except
as contemplated herein. Any modifications, enhancements or
improvements relating to the DiscGuard System (whether or not
resulting from the implementation of this Agreement) which are
discovered, invented or first reduced to practice by the Licensee
or Developer shall be the sole and exclusive property of TTR,
subject to a license, on the terms set forth herein, in favor of
Licensee. Licensee and Developer acknowledge that this
declaration is vital to TTR and without it TTR would not enter
into this Agreement. All DiscGuard System protected media sold by
Licensee and all related documentation shall bear TTR's patent
notice in a form mutually agreed by the Parties.
6.2 Title. Licensee and TTR acknowledge that all of the DCA
Intellectual Property is the sole property of Developer, and
Licensee shall not obtain any interest of any kind in the MIS by
or through this Agreement except as contemplated herein. Any
modifications, enhancements or improvements relating to the MIS
(whether or not resulting from the implementation of this
Agreement) which are discovered, invented or first reduced to
practice by the Licensee or TTR shall be the sole and exclusive
property of Developer, subject to a license, on the terms set
forth herein, in favor of Licensee. Licensee acknowledges that
this declaration is vital to Developer and without it Developer
would not enter into this Agreement.
6.3 Trade Secrets. Licensee and Developer acknowledge that the
DiscGuard System contains trade secrets which are the sole
property of TTR and which are confidential and are not in the
public domain, the unauthorized use or disclosure of which may
cause irreparable harm to TTR.
6.4 Trade Names, Trademarks and Service Marks. Licensee and Developer
acknowledge that the trade names, trademarks and service marks
used by TTR in relation to its DiscGuard System, are the
exclusive property of TTR. Licensee agrees that it shall not hold
itself out as having acquired any proprietary right to any trade
name, trademark, or service ▇▇▇▇ of TTR by virtue of its use
thereof or anything herein, except as specifically set forth in
this Agreement, and any such right shall immediately cease upon
the termination or cancellation of this Agreement. Licensee shall
be permitted to use exclusively the name DiscGuard in any
advertising or promotional material during the Exclusive License
Period and non-exclusively thereafter.
The authorization contained herein to use and authorize the use of any
trademarks or tradenames shall cease by the ninetieth (90th) day after
Licensee has received written
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notice from TTR to the effect that such tradenames or trademark
has been superseded or replaced by a new tradename or trademark.
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ARTICLE VII
REPRESENTATIONS & WARRANTIES
7.1 TTR's Representations and Warranties. TTR hereby represents and
warrants to Licensee that:
i. TTR is a private company duly formed and validly existing
under the laws of the State of Israel;
ii. TTR has the necessary corporate power and authority to
enter into this Agreement and to perform hereunder, and
TTR's execution, delivery and performance of this
Agreement has been duly authorized by all necessary
corporate actions;
iii. Neither the execution or delivery of this Agreement nor
the performance by TTR hereunder will violate any
provision of TTR's charter documents or articles any
agreement by which it is currently bound;
iv. TTR owns and has all of the rights to the Licensed
Intellectual Property incorporated into the DiscGuard
System which are necessary for TTR to grant the Licenses
and perform all of its obligations under this Agreement;
v. TTR is wholly owned by TTR Inc., a Delaware corporation.
vi. TTR represents and warrants that the digital fingerprint
contained in a Fingerprinted Disc that is produced under
License, in accordance with the specifications of
Developer and TTR,
(a) will not be reproducible by conventional CD
mastering machines or conventional CD recording
systems; and
(b) will not materially hinder the playback function in
units of CD-ROM drives listed on Schedule 7.4
hereof, subject to the terms provided therein.
This warranty shall be null and void if Licensee is in default
under this Agreement or if the non-conformance is due to:
(a) unauthorized modification of the DiscGuard System; or
(b) misuse, errors or negligence of Licensee, its employees or
agents in operating the Enhanced MIS or the DiscGuard System or
any related technology used in conjunction herewith to produce
the Fingerprinted Discs; or
(c ) replication of Fingerprinted Discs not in accordance with
the specifications of the Developer and TTR; or
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(d) non-compliance of the units of the CD-ROM drives used with
the criteria set out in Schedule 7.4 hereof.
In the event of a breach of this warranty TTR shall, at its
option, (i) cure the error or defect, (ii) replace such
Fingerprinted Disc or (iii) remit to Licensee in respect any fee
received by TTR in respect of such Fingerprinted Disc. TTR shall
not be obligated to cure any defect, replace any Fingerprinted
Disc or pay any amount unless Licensee notifies TTR of the
existence and nature of such defect upon discovery.
7.2 Licensee's Representations and Warranties. Licensee hereby
represents and warrants to TTR that:
i. Licensee is a public company duly formed and validly
existing under the laws of the State of Delaware;
ii. Licensee has the necessary corporate power and authority
to enter into this Agreement and to perform hereunder, and
Licensee's execution, delivery and performance of this
Agreement has been duly authorized by all necessary
corporate actions; and
iii. Neither the execution or delivery of this Agreement nor
the performance by Licensee hereunder will violate any
provision of Licensee's charter documents or articles or
any agreement by which it is currently bound.
7.3 Developer's Representations and Warranties. Developer hereby
represents and warrants to TTR and Licensee that:
i. Developer is a private company duly formed and validly
existing under the laws of the State of Oklahoma;
ii. Developer has the necessary corporate power and authority
to enter into this Agreement and to perform hereunder, and
Developer's execution, delivery and performance of this
Agreement has been duly authorized by all necessary
corporate actions;
iii. Neither the execution or delivery of this Agreement nor
the performance by Developer hereunder will violate any
provision of Developer's charter documents or articles or
any agreement by which it is currently bound;
iv. Developer owns and has all of the rights to the
intellectual property incorporated into the MIS which are
necessary for Developer to grant the license and perform
all of its obligations under this Agreement; and
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v. The Enhanced MIS is compatible with the Licensee's laser
mastering system and, when used in accordance with
procedures established for the First Run, allows
consistent mastering of DiscGuard glass masters.
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ARTICLE VIII
WARRANTIES, LIABILITY & INDEMNIFICATION
8.1 Warranties. IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR
PURPOSE, SATISFACTION AND MERCHANTABILITY SHALL NOT APPLY TO
DISCGUARD SYSTEMS, ENHANCED MIS, MIS OR LICENSEE'S MASTERING
MACHINES.
8.2 Limitation on Liability. IN NO EVENT SHALL ANY PARTY BE LIABLE IN
RESPECT OF OR ARISING OUT OF THE PERFORMANCE AND/OR BREACH OF ITS
OBLIGATIONS HEREUNDER FOR ANY INDIRECT, INCIDENTAL OR SPECIAL OR
CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS, REVENUE, DATA
OR USE, INCURRED BY THE OTHER PARTY WHETHER IN AN ACTION IN
CONTRACT OR TORT, EVEN IF THAT PARTY OR ANY OTHER PERSON HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
8.3 Indemnity. Each party shall indemnify and hold the other parties
and their subsidiaries and their customers harmless from all
loss, damage and/or expenses (including attorney's fees) arising
out of any claims by third parties that the use of other party's
products furnished hereunder infringes any third party patent,
trademark, copyright or other proprietary interest. The
indemnified parties shall promptly notify the indemnifying Party
in writing of such claim and permits the indemnifying party to
control the defense or settlement thereof. The indemnifying party
shall vigorously defend against any such claim. The indemnifying
party may, at its sole option and expense (i) procure for the
Licensee the right to continue using the infringing product (ii)
modify the infringing product so that it is non-infringing (iii)
procure a replacement product that has substantially the same
functionality, or if none of the above options is reasonably
available (iv) terminate this Agreement and all sublicenses
granted hereunder.
8.4 No Unauthorized Use or Disclosure. Each party shall: (i) hold in
confidence, and not disclose or reveal to any person or entity,
any Confidential Information of the other party without the clear
and express prior written consent of a duly authorized
representative of such other party, except that a party receiving
Confidential Information from the other party may reveal such
information solely to its employees or contractors or consultants
who require such disclosure to allow such receiving party to
perform its obligations or exercise its rights under this
Agreement and who agree in writing to refrain from making any
unauthorized use or disclosure thereof; and (ii) not use any
Confidential Information of the other party for any purpose at
any time, other than for the purpose(s) of performing its
obligations or exercising its rights under this Agreement. Each
party shall protect the Confidential Information of the other
party using at least the same degree of
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care it uses to protect its own proprietary and confidential
information and materials of like importance, but in no event
less care than a reasonably prudent business person would take in
a like or similar situation. Each party shall return any
Confidential Information of the other upon written request,
except to the extent that doing so would undermine or interfere
with the exercise by the receiving party of its rights under this
Agreement.
8.5 Disclosure of Confidential Information Pursuant To Subpoena. If a
party to this Agreement is served with a subpoena which seeks to
compel the production of Confidential Information of the other
party to this Agreement, the party upon whom such subpoena is
served shall immediately give written notice of such subpoena to
the other party to this Agreement, unless such party is
prohibited by law from providing such notice. The parties to this
Agreement shall then cooperate with one another for the purpose
of obtaining such relief as will protect the Confidential
Information. Should a motion be timely filed and served and the
party upon whom such subpoena is served is notified in writing
thereof before the date upon which such production is requested,
the party upon whom such subpoena is served shall not comply with
such subpoena until after such time as the court rules on the
subject motion. Should such order be obtained, the party upon
whom such subpoena is served shall comply with the order. Should
no such motion be filed before the scheduled production date, the
party upon whom such subpoena is served may comply with such
subpoena.
8.6 Terms of Agreement. Each party shall treat the terms of this
Agreement as confidential and shall not disclose such terms,
except that disclosure of such terms shall be permitted (i) as
provided in Section 8.5 with respect to Confidential Information,
(ii) to accountants, attorneys and other professionals providing
services to the disclosing party to the extent that such
professionals are notified of the confidential nature of such
terms.
8.7 Employment of Other Party's Employees. Each party agrees that
during the continuance of this Agreement and for a period of six
months after its termination, in whole or in part, it will not
hire or otherwise contract the services of, whether directly or
indirectly (i) an employee of the other party (ii) a former
employee of the other party whose employment with the other party
ended less than six months prior to the date of such hiring, or
(iii) any corporation or entity in which such employee or former
employee is an officer, director or shareholder holding 25% of
the equity or is employed providing service to that corporation
or entity, provided, however, that this provision shall not apply
if the employer or former employer of such individual consents in
writing to such hiring.
8.8 Noncompetition. **** Confidential material omitted and filed
separately with the Securities and Exchange Commission.
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ARTICLE IX
DEFAULT & TERMINATION
9.1 Effectiveness; Term of Agreement. This Agreement shall become
effective upon signature by each of the parties hereto and,
unless terminated as herein provided, shall continue in full
force and effect for five (5) years thereafter; PROVIDED, THAT,
this Agreement shall be automatically renewable for additional
one (1) year periods upon expiry subject to the mutual written
agreement of the parties.
9.2 Right to Terminate.
i. TTR shall be entitled to terminate this Agreement in the
event that TTR shall determine the Development of a Test
Sample is not Acceptable in accordance with the provisions
of Section 3.3 hereof.
ii. Any party may terminate this Agreement upon any other
party's breach of a material term, covenant or undertaking
in this Agreement if, within thirty (30) days following
the delivery of a written notice to the defaulting party
setting forth in reasonable detail the basis of such
default and the remedial action required to be taken to
rectify such default, the defaulting party has not
rectified such default to the reasonable satisfaction of
the non-defaulting party.
iii. A party hereto may, at its option, terminate this
Agreement should any other party hereto:
a) Admit in writing its inability to pay its debts
generally as they become due.
b) Make a general assignment for the benefit of
creditors.
c) Institute proceedings to be adjudicated a voluntary
bankrupt, or consent to the filing of a petition of
bankruptcy against it.
d) Be adjudicated by a court of competent jurisdiction
as being bankrupt or insolvent.
e) Seek reorganization under any bankruptcy act, or
consent to the filing of a petition seeking such
reorganization; or
f) Have a decree entered against it by a court of
competent jurisdiction appointing a receiver,
liquidator, trustee, or assignee in bankruptcy or
in insolvency covering all or substantially all of
such party's property or providing for the
liquidation of such party's property or business
affairs.
9.3 Phase Out. Notwithstanding anything to the contrary contained
herein, for a period not exceeding ninety (90) days following the
effective termination (for whatever reason) of this Agreement,
Licensee shall be permitted to continue to manufacture discs
under the License in order to complete accepted orders and to
18
distribute its existing inventory of Fingerprinted discs, subject
to (and in accordance with) the terms and conditions contained in
this Agreement.
9.4 Effect of Termination or Expiration. Upon the termination of this
Agreement for any reason whatsoever:
i. except as set forth in Section 9.3, the rights of Licensee
to continue distributing Fingerprinted discs shall cease;
ii. Licensee may give its customers a list of licensed
replicators;
iii. the rights of all Parties to continue the Development
shall cease
iv. Licensee shall promptly return to TTR, erase and/or
destroy all copies of the DiscGuard Enabling Software and
documentation and all information and literature relating
thereto which shall have been provided to Licensee or
reproduced by Licensee. Upon such return, erasure and/or
destruction, Licensee shall confirm in writing to TTR that
it has complied with its obligations under this section;
v. Licensee's obligation to pay the Royalties shall cease,
without prejudice to any obligation which has accrued and
become due to the termination of this Agreement as herein
provided;
vi. Licensee shall promptly return to Developer the Enhanced
MIS and documentation and all information and literature
relating thereto which shall have been provided to
Licensee or reproduced by Licensee. Upon such return
Licensee shall confirm in writing to Developer that it has
complied with its obligations under this section; and
vii. Each party shall promptly return to the disclosing party,
and/or erase or destroy all copies of any Confidential
Information in the possession of such party or its
Subsidiaries. Upon such return, erasure and/or
destruction, such party shall confirm in writing to the
disclosing party that it has complied with its obligations
under this section.
9.5 Survival. Articles 5, 6, 8, 9 and 10 of this Agreement shall
survive the termination and/or expiration of this Agreement for
any reason whatsoever.
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ARTICLE X
MISCELLANEOUS
10.1 Relationship. The relationship between TTR, Licensee and
Developer is that of independent contractors and parties to
certain licenses in accordance with this Agreement. Neither party
is in any way the agent or attorney in fact of the other, nor
shall any party or any of its respective agents or employees have
any power or authority to assume any obligation of any kind,
implied or expressed, on behalf of any other or to bind others to
any contract, commitment or agreement whatsoever, or to make any
representation on the others' behalf. This Agreement shall not be
construed as constituting either party as the partner or joint
venture of the others, nor to create any form of legal
association which would impose liability upon one party for the
acts or failures to act of the others.
10.2 Force Majeure. No party shall be liable for reasonable delays in
the performance of its obligations under this Agreement which
result from causes beyond its reasonable control, including
without limitation acts of God, strikes, war, riot, civil
disorder, embargo, acts of civil and military authorities, fire,
earthquake, flood or inability to obtain labor or materials.
10.3 Assignability; Binding Effect. Licensee and Developer may not
assign this Agreement without the prior written consent of TTR,
which consent shall not be unreasonably withheld or delayed,
except that, upon notice to the other party but without any
requirement to obtain consent, (i) Licensee and Developer may
assign this Agreement in connection with the sale or other
transfer of substantially all of its operating assets relating to
this Agreement, other than a sale to a direct competitor (or
affiliate of a direct competitor) of TTR.
Subject to the provisions of this Section, this Agreement shall
be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
10.4 Entire Agreement. This Agreement, including all recitals in the
preamble hereto and Exhibits attached hereto, sets forth the
entire agreement and understanding between the parties, contains
all the understandings, inducements, promises and representations
between the parties relating to the matters referred to herein,
and merges and supersedes all prior agreements, commitments,
arrangements, representations, writings and discussions between
them, whether written or oral.
This Agreement may not be modified or amended except by a written
supplement, duly executed by each of the parties.
10.5 Notices. Any notice, demand or communication which under the
terms of this Agreement or otherwise must or may be given or made
by TTR, Developer or Licensee shall be in writing and shall be
given or made by facsimile with
20
confirmation of receipt, certified or registered air mail, return
receipt requested, or any delivery services, requiring signature
of receipt, addressed to the respective parties as follows:
Licensee: Nimbus CD International, Inc.
POB 7427
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice President, Engineering
TTR: TTR Technologies Ltd.
POB 2295
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer
Or Fax: ▇▇▇▇-▇-▇▇▇-▇▇▇▇
Developer: ▇▇▇▇ ▇▇▇▇▇▇ & Associates
▇▇▇▇ ▇. ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer
Such notice, demand or other communications shall be deemed to have been
given on the date confirmed as the actual date of delivery by the
delivery service if sent by such service, and in the case of certified
or registered air mail - fifteen (15) business days following the date
on which it was deposited postage prepaid in the U.S. or Israeli mail
(or the date shown on the actual mail receipt if it is earlier).
The above addresses may be changed at any time by giving prior written
notice as provided above.
10.6 Severability. Each provision of this Agreement or part thereof
shall be severable. If, for any reason, any such provision or
part thereof is finally determined, by a court of agency having
valid jurisdiction, to be invalid and contrary to, or in conflict
with, any existing or future law or regulation, such
determination shall not impair the operation of or affect the
remaining provisions of this Agreement, and such remaining
provisions will continue to be given full force and effect and
shall continue to bind the parties.
10.7 Enforcement. The respective rights and remedies of each party are
cumulative, and no exercise or enforcement by either party of any
right or remedy hereunder shall preclude the exercise or
enforcement by such party of any other right or remedy hereunder,
or which such party is entitled by law to enforce. Each party may
waive any obligation of or restriction upon the other party under
this Agreement only in writing. No failure, refusal, neglect,
delay, waiver, forbearance or omission of either party to
exercise any right under this Agreement or to insist upon full
21
compliance by the other with its obligations hereunder shall
constitute a waiver or any provision of this Agreement.
10.8 Construction. The headings appearing at the beginning of each
section of this Agreement are for convenience only and shall not
in any way affect the meaning or interpretation of this
Agreement. The recitals shall be deemed to be part of this
Agreement. From time to time this Agreement and any of the
Exhibits hereto may be modified by the parties in accordance with
Section 10.5 of this Agreement. As so modified, such exhibits
shall be considered part of this Agreement.
10.9 Dispute Resolution; Governing Law. This Agreement shall be
construed and enforced in accordance with the internal laws of
the State of New York applicable to contracts wholly executed and
performed therein.
10.10 Press Releases. The parties shall issue a media release to the
public (in a form that has been approved in writing by all
parties) to announce the business relationship being created by
this Agreement
22
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
duly executed on its behalf as of the date first written above.
▇▇▇▇ ▇▇▇▇▇▇ AND ASSOCIATES, INC. TTR TECHNOLOGIES LTD.
By:__________________ By: ________________
Title: Title: President
NIMBUS CD INTERNATIONAL INC.
By: __________________
Title:
23
EXHIBIT "A"
DEVELOPMENT TASKS AND DEVELOPMENT SCHEDULE; MILESTONE DATES
******* Confidential material omitted and filed with the SEC.
24
EXHIBIT "B"
DESIGN SPECIFICATIONS
****** Confidential material omitted and filed separately with the SEC.
25
SCHEDULE 7.1
CD-ROM Drives
******* Confidential material omitted and filed separately with the SEC.
26