This Confidential License Agreement (hereafter the “Agreement”) is made between NeoMedia Technologies Inc., a Delaware corporation (“NeoMedia”), on the one hand, and eBay Inc. (“eBay”), a Delaware corporation, on the other hand.
WHEREAS, NeoMedia is the sole owner of certain patents covering bar code technology and other patents covering search technology;
WHEREAS, Y.A. Global Investments L.P. (“Y.A. Global”) is a secured creditor of NeoMedia and holds security interests in substantially all of NeoMedia’s property including NeoMedia patents;
WHEREAS, Y.A. Global has consented to NeoMedia entering into this Agreement pursuant to a Non-Disturbance Agreement of even date herewith in the form attached hereto as Exhibit “B”;
WHEREAS, NeuStar Inc. (“NeuStar”) had an exclusive right to grant certain sublicenses under the “Amended and Restated License Agreement” between NeuStar and NeoMedia dated January 22, 2010;
WHEREAS, NeoMedia seeks to license its patents covering barcode technology and search technology to eBay;
WHEREAS, eBay desires to obtain freedom to operate in the bar code and, possibly, the search technology areas;
WHEREAS the Parties have negotiated in good faith, entered into a binding Term Sheet dated June 22, 2010 and now desire to enter into this Agreement; and
THEREFORE, with due consideration hereby acknowledged, NEOMEDIA and eBay agree as follows:
For the purposes of this Agreement, the following words and phrases shall have the following meanings:
1. “AFFILIATE” shall mean any present or future subsidiary, parent, sister company, or other corporation, firm, business or entity that controls, is controlled by, or is under common control of, that PARTY or any of its subsidiaries, as of or after the EFFECTIVE DATE. The term “control” as used in this Agreement, means the possession, directly or indirectly, solely or jointly, of the power to direct or cause the direction of management, actions or policies of a legally recognizable entity, whether through the ownership of voting shares, by contract, or otherwise. The rights conferred by this Agreement on EBAY shall automatically and immediately extend to any entity that is not an AFFILIATE of or a part of EBAY as of the EFFECTIVE DATE and subsequently becomes an AFFILIATE or a part of EBAY (e.g., a future AFFILIATE or acquired business), and shall extend to or continue to be retained by any entity that is an AFFILIATE or a part of EBAY as of the EFFECTIVE DATE and subsequently loses its status as an AFFILIATE or part of EBAY (e.g., a former AFFILIATE or divested business). If the loss of status as an AFFILIATE is the result of an acquisition by a third party or parties (through a purchase of shares, business combination, merger or otherwise by a third party), then the rights hereunder shall extend only to the former AFFILIATE and its activities as such activities existed at the time of divestment and reasonable modification thereto, not to the third party acquirer’s preexisting activities or activities that are new and unrelated to such pre-divestiture activities.
2. “BARCODE TECHNOLOGY” shall mean any technology associated with a machine-readable symbol (e.g., barcode, alpha-numeric character strings, linear code, graphic, wired or wireless electronic signal, or other similar representation or figure) and any use thereof, including but not limited, encoding the symbol, decoding the symbol or accessing information based on the symbol and includes U.S. Patent Nos. 7,383,209; 6,993,573;6,865,608; 6,542,933; 6,434,561; 6,199,048; 6,108,656; 5,978,773; 7,430,588, and 5,933,829 and related patents and applications worldwide. It does not include patents identified as “SEARCH TECHNOLOGY.”
3. “COVERED PRODUCT” shall mean any past, present or future application, product, apparatus, component, machine, system, module, manufacture, software, design, composition of matter, service, process, method or technology made, used, sold, offered for sale, advertised, provided, imported, exported, offered, distributed, supplied, designed, tested, or developed by, on, for, to, through, or on behalf of, EBAY that, in the absence of a license granted pursuant to this Agreement, would allegedly infringe, either directly or indirectly, in whole or in part, any of the PATENT RIGHTS.
4. “EBAY” shall mean eBay Inc., PayPal, Inc. and their predecessors, successors and AFFILIATES.
5. “EBAY THIRD PARTIES” shall mean EBAY’s customers, buyers, sellers, users, developers, manufacturers, promoters, advertisers, resellers, and/or distributors, and any developer, supplier, vendor or manufacturer that supplies or incorporates components, steps, features or portions of the COVERED PRODUCTS.
6. “EFFECTIVE DATE” shall mean the last date on which this Agreement has been fully executed by all PARTIES.
7. “INITIAL LICENSE FEE” shall have the meaning set forth in Exhibit A attached hereto.
8. “INITIAL TERM” shall mean the period from the EFFECTIVE DATE to December 31, 2015.
9. “INITIAL TERM (SEARCH TECHNOLOGY)” shall mean the period from the date of the exercise of the option to license the SEARCH TECHNOLOGY portfolio to December 31, 2015.)
10. “NEOMEDIA” shall mean: (a) NeoMedia Technologies Inc. and its predecessors, successors and AFFILIATES, and (b) all entities controlled by NeoMedia Technologies Inc., and their predecessors, successors and AFFILIATES.
11. “PARTY” or “PARTIES” shall mean NEOMEDIA and/or EBAY.
12. “PATENT RIGHTS” shall mean any patent or patent application worldwide, presently existing, acquired or created in the future owned or controlled by NEOMEDIA that relate to BARCODE TECHNOLOGY (and SEARCH TECHNOLOGY, only if EBAY exercises an option to license the SEARCH TECHNOLOGY portfolio) including but not limited to: (a) all parents, continuations, continuations-in-part, divisionals, reissues, and re-examinations of the forgoing patents or patent applications; (b) all patent applications or patents claiming priority to any of the foregoing patents or claiming priority to any application that led to any of foregoing patents; and (c) all foreign counterparts to any of the foregoing. The current list of worldwide patents and patent applications in the BARCODE TECHNOLOGY portfolio comprising PATENT RIGHTS is attached as Appendix A. The current list of worldwide patents and patent applications in the SEARCH TECHNOLOGY portfolio comprising PATENT RIGHTS is attached as Appendix B.
13. “SEARCH TECHNOLOGY” shall mean any technology associated with the use of a machine-readable symbol to access information and provide, among other things, geographic, directional or proximity type of data and includes U.S. Patent Nos. 6,766,363; 6,675,165; 6,651,053; and 6,430,554, and related patents and applications worldwide.
14. NEOMEDIA hereby grants to EBAY, effective immediately, for the INITIAL TERM, an irrevocable, nonexclusive, worldwide license, under the PATENT RIGHTS to use, make, have made, sell, offer to sell, modify, import, export, and otherwise offer, dispose of, distribute, display, advertise and/or promote any COVERED PRODUCT directly or indirectly through any channel, including through multiple tiers of distribution. The license grant herein also extends to EBAY THIRD PARTIES solely in their role as EBAY THIRD PARTIES. For the sake of clarity, the license granted herein does not extend to EBAY THIRD PARTIES except when they are performing in their role as an EBAY customer, buyer, seller, user, developer, manufacturer, promoter, advertiser, reseller, and/or distributor or as an EBAY developer, supplier, vendor or manufacturer that supplies or incorporates components, steps, features or portions of the COVERED PRODUCTS. The license is not otherwise sub-licensable.
15. At the time that NeuStar’s exclusive right to grant licenses to third parties with respect to 2D barcode Registry and Clearinghouse, under the “Amended and Restated License Agreement” dated January 22, 2010, has expired or reverted to a non-exclusive license right, then all such license rights shall automatically and immediately vest with EBAY and EBAY THIRD PARTIES on a non-exclusive and non-sublicenseable license basis consistent with, and retroactive to the effective date of, the license, release and covenant not to sue rights set forth in this Agreement. Nothing contained in this Paragraph is intended to, nor shall be construed to, expand EBAY’s rights with respect to the PATENT RIGHTS as otherwise set forth herein.
16. If NEOMEDIA acquires ownership or exclusive rights to U.S. Patent No. 6,101,534 and any related patents or applications, then such rights shall automatically and immediately vest with EBAY and EBAY THIRD PARTIES on a non-exclusive and non-sublicenseable license basis consistent with the license, release and covenant not to sue rights set forth herein for the SEARCH TECHNOLOGY portfolio. NEOMEDIA has no obligation to make any attempt to acquire any such patents or applications.
17. During the INITIAL TERM of this Agreement and any renewal terms, NEOMEDIA hereby covenants not to sue EBAY, or EBAY THIRD PARTIES that are acting solely in their role as EBAY THIRD PARTIES, for infringement of any PATENT RIGHTS. The covenant set forth in this paragraph shall run with the PATENT RIGHTS and bind any successor holder(s) of any of the PATENT RIGHTS and any assignees of NEOMEDIA.
18. During the INITIAL TERM of this Agreement and any renewal terms, NEOMEDIA hereby covenants that it will not sue, or promote, sponsor, induce or encourage or voluntarily cooperate in a lawsuit that is based on the PATENT RIGHTS against EBAY (except for and only to recover any payments that EBAY has failed to make on the amounts due under this Agreement) or EBAY THIRD PARTIES that are acting solely in their role as EBAY THIRD PARTIES. NEOMEDIA specifically covenants that it will not join, cooperate or support any lawsuit brought by NeuStar or Y.A. Global against EBAY or EBAY THIRD PARTIES that is based on the PATENT RIGHTS, unless such joinder, cooperation or support is required by law (including applicable securities law), regulation, subpoena, validly served discovery requests issued in connection with pending litigation, or judicial order or process. Such required joinder, cooperation or support, if any, shall be limited to, and provided only to the extent that, it is required by law. This covenant shall terminate immediately if EBAY breaches the covenant set forth in Paragraph 19, below. Further, nothing contained herein in intended to be, nor shall be construed as, a restriction on or waiver of NEOMEDIA’s right to bring a claim, proceeding or lawsuit with respect to the PATENT RIGHTS against any party not covered by the license granted hereunder or to bring an action to enforce this Agreement in accordance with Paragraphs 32 and 33.
19. During the Initial Term of this Agreement, and any renewal terms, EBAY hereby covenants not to sue, or promote, sponsor, induce or encourage or voluntarily cooperate in any lawsuit or administrative proceeding against NEOMEDIA that challenges the validity or enforceability of the PATENT RIGHTS or NEOMEDIA’s rights to own or license the PATENT RIGHTS. EBAY specifically covenants that it will not join, cooperate or support any lawsuit brought against NEOMEDIA that is based on the PATENT RIGHTS, unless such joinder, cooperation or support is required by law (including applicable securities law), regulation, subpoena, validly served discovery requests issued in connection with pending litigation, or judicial order or process. Such required joinder, cooperation or support, if any, shall be limited to, and provided only to the extent that, it is required by law. This covenant shall terminate immediately if NEOMEDIA breaches the covenant set forth in Paragraphs 17 or 18, above. Further, nothing contained herein in intended to be, nor shall be construed as, a restriction on or waiver of EBAY’s right to bring an action to enforce this Agreement in accordance with Paragraphs 32 and 33.
20. During the INITIAL TERM of this Agreement and any renewal terms, NEOMEDIA hereby covenants that it will fully defend and indemnify EBAY and EBAY THIRD PARTIES against any third party (including NeuStar and Y.A. Global) claims, proceedings or lawsuits relating to or arising from the PATENT RIGHTS. This indemnification obligation does not extend to any claim that EBAY or EBAY THIRD PARTIES infringe a third party patent. This indemnification obligation is limited in monetary amount to the higher of [REDACTED], (or [REDACTED] if EBAY exercises its option to license
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