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Exhibit 10.3
[NOTE: CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO INDICATE THAT
CONFIDENTIALITY HAS BEEN REQUESTED FOR THIS CONFIDENTIAL INFORMATION. THE
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]
PRINCETON VIDEO IMAGE, INC.
00 Xxxxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000
August 16, 1999
Sistemas De Publicidad Virtual X.X.
Xxxxxx Xxxxxxx, 0
00000 Xxxxxx
Xxxxx
Attn: Xxxxxxxx Xxxxx Soraluce
Re: L-VIS System License Agreement
Gentlemen:
This letter will memorialize the agreement of Princeton Video Image,
Inc. ("PVI") and your company (or an affiliate to be designated by you) ("you"
or "Licensee") with regard to the use of the product, including the computer
hardware, software and documentation, developed by PVI (the "L-VIS System") to
permit the real-time electronic insertion of electronic advertising into
television broadcasts. While the parties intend to enter into a more definitive
agreement ("System License Agreement") and will use all reasonable efforts to do
so, the terms and conditions of this letter, (subject to the standard terms and
conditions that are generally applicable to licensees of the L-VIS System, as
may be in effect from time to time, a copy of which will be attached to the
System License Agreement), will prevail and be binding upon each of the parties
until, if at all, the System License Agreement is executed by both parties.
The principal business terms of our agreement are as follows:
Territory You will have exclusive rights to exploit commercial
use of the L-VIS System for the Licensed Event(s)
defined below in the following countries: Spain and
Portugal.
Licensed Events Licensee events are television broadcasts which
originate
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and are intended for telecast solely within the
Territory. Events and programming which are telecast
both within and outside the Territory are not
included unless they are specifically licensed to
Licensee, under a separate agreement, by PVI or a
PVI event licensee. PVI reserves the right to grant
licenses in connection with use of the
L-VIS System by others for specific individual
events which are telecast internationally, including
within the Territory.
Term The license will commence as soon as the definitive
agreement is signed and equipment can be delivered.
The license will extend for 5 years.
Assuming you are not in default of your obligations,
you will have the right at the end of the initial
term to extend it for an additional 5 years.
Licensee You will have an exclusive, non-transferable license
Rights and to exploit commercially the L-VIS System for
Obligations Licensed Events in your Territory during the Term.
You will have editorial control over use of the
L-VIS System, subject to compliance with general
ethical standards and guidelines developed by PVI
for all licensees to promote public acceptance of
the technology.
You will agree to use diligent commercial efforts to
generate revenue from the sale of advertising making
use of the L-VIS System for Licensed Events. In this
regard you agree to commit significant resources to
market and sell use of the L-VIS System including
hiring appropriate sales, operations and marketing
personnel.
You will be responsible for negotiating for and
obtaining any arrangements with television stations
and broadcast rights-holders needed to allow you to
use the L-VIS System in connection with the telecast
of any event, including obtaining all rights and
permissions which may be needed.
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Training and Support PVI will train two members of your technical staff
and provide technical assistance as may be needed.
There will be no charge for training or telephone
technical assistance, except for travel related
costs. On site technical assistance will be subject
to PVI's reasonable standard charges for such
services.
From time to time, when you request, PVI will seek
to make PVI Europe-based personnel and L-VIS systems
available for your use for special projects,
provided such are reasonably available and such
assistance is then practicable. You must pay PVI's
then reasonable standard charges, and out-of-pocket
expenses, associated with such assistance.
Improvements PVI will provide you with any general technical
improvements it may develop to the L-VIS System from
time to time, with training. There will be no charge
for this except, where necessary, for additional or
replacement equipment.
If PVI develops a non-exclusive special custom
enhancement for the L-VIS System which it generally
licenses and charges for separately, it will offer
you the opportunity to purchase a license for the
enhancement.
Equipment At the initiation of the definitive agreement, one
complete L-VIS System unit will be provided.
Units shall be delivered F.O.B. PVI's U.S. facility
and Licensee shall bear all costs for freight,
delivery, and import taxes or duties, if any,
imposed by the country where delivery is made.
PVI will warrant that the Equipment will be provided
in working order. Licensee will be responsible for
maintaining the L-VIS System during the Term, and
will insure the equipment against loss, naming PVI
as loss payee.
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PVI will retain all ownership rights to any L-VIS
System unit provided, subject to the rights of use
granted to Licensee. Licensee will return all
equipment to PVI at the end of the Term.
License Fees In consideration for the rights and license grant,
Licensee will pay PVI running royalties as described
below, which will be reportable and payable
quarterly during the Term.
Royalties Licensee will pay PVI running royalties equal to
[CONFIDENTIAL TREATMENT REQUESTED] of Revenues
generated from exploitation of the L-VIS System. For
this purpose, "Revenues" will mean all money or
other consideration received by Licensee from use of
the L-VIS System, including from the sale of
advertising, whether as lump sum or up-front
payments, periodic payments, or otherwise; provided,
however, that Licensee must pay a minimum equal to
[CONFIDENTIAL TREATMENT REQUESTED] of fees actually
paid by advertisers for insertion of electronic
images in Licensed Events using the L-VIS System,
regardless of the form of arrangements Licensee may
choose to make with event rights holders,
advertisers, or others.
In cases where PVI has paid for video insertion
rights for the benefit of PVI and PVI licensees,
such as rights related to the international telecast
of an event, PVI may impose an additional or higher
royalty rate applicable to your Revenues associated
with such event, as a condition for the grant of a
license to you for such event.
In order to keep the license in effect, Licensee
also agrees to meet reasonable performance criteria
and revenue targets to be established by mutual
agreement of the parties from time to time over the
course of the Term.
After each 6 months of the Term, PVI and Licensee
will conduct a performance review of their
respective efforts in connection with the license
and agree upon reasonable future performance
criteria and revenue targets. Performance criteria
and revenue targets may be based upon PVI's
experience in other territories and special
circumstances for Licensee within the Territory. If
the
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parties cannot in good faith reach prompt agreement
on such matters for any 6 month period, they will
submit the matter to expedited non-binding mediation
with a neutral third party. The costs of such
mediation will be borne by Licensee. If after the
mediation the parties still cannot reach agreement,
either party may then terminate the license.
Security for Inasmuch as PVI has elected to offer you a license
Performance relationship because of the status and
creditworthiness of your business, if you elect to
have a subsidiary or new business entity serve as
Licensee, you or your existing parent company must
agree to guarantee performance and payments by such
designated affiliate.
If you agree with the terms and conditions set forth in this letter of
intent, please sign the enclosed copy of this letter where indicated below and
return it to me. The terms set forth above will expire on the thirtieth day
after your receipt of this letter if you have not signed and returned it to me
before then. Subject to the preceding sentence, this letter will become
effective on the date on which you sign this letter.
We look forward to a productive relationship.
Sincerely,
Princeton Video Image, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
Agreed to and accepted this
31st day of August, 1999
Sistemas De Publicidad Virtual, S.L.
By: /s/ Xxxxxxxx Pan De Soraluce
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Name: Xxxxxxxx Pan De Soraluce
Title: General Manager
