AGREEMENT TO ASSIGN PATENT APPLICATIONS AND ROYALTY
SHARING AGREEMENT
BETWEEN
MICROSOFT CORPORATION AND EXPEDIA, INC.
THIS AGREEMENT (this "Agreement") is entered into as of November 6,
2001 by and between MICROSOFT Corporation, a corporation organized under the
laws of the State of Washington ("Microsoft"), and EXPEDIA, Inc., a corporation
organized under the laws of the State of Washington ("Expedia").
Microsoft and Expedia are hereinafter referred to as the "Parties."
WHEREAS, the Parties have entered into a License Agreement dated as of
October 1, 1999 (the "License Agreement");
WHEREAS, the Parties have entered into an Agreement and Plan of
Recapitalization and Merger dated as of July 15, 2001 (the "APRM"); and
WHEREAS, as part of the consideration of the APRM, Microsoft desires to
assign, and Expedia desires to acquire, all right, title, and interest in and to
a number of patent applications that are owned by Microsoft.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, and for other good and valuable consideration receipt of which each
party hereby acknowledges, the parties hereby agree as follows:
1. DEFINITIONS
1.1 "AFFILIATE" shall mean any entity in which Microsoft or Expedia (as
the case may be), directly or indirectly, or through one or more intermediaries,
holds the beneficial ownership of more than fifty percent (50%) or the equity
securities or interests, and only so long as such ownership continues.
1.2 "ASSIGNED PATENT APPLICATIONS" shall mean the patent applications
listed in Exhibit 1, and all Intellectual Property Rights therein and thereto.
1.3 "ONLINE TRAVEL SERVICES" shall mean any online service for
reserving or purchasing travel services (e.g. airline tickets, lodging, rental
cars, cruises, and resort vacation packages) accessed with an interactive
electronic device (whether now known or hereafter developed) enabling the user
to view information and respond with additional information. The interactive
electronic device may be, by way of example and not limitation, a personal
computer, personal digital assistant, automated teller machine, screen
telephone, or Internet-enabled television.
1.4 "INTELLECTUAL PROPERTY RIGHTS" shall mean copyrights, patents
(including patent improvements), patent applications, trade secrets or other
intellectual property rights (but not trademarks, trade names or service marks)
under applicable law.
2. GRANT OF RIGHTS.
2.1 Microsoft agrees to assign all of Microsoft's right, title and
interest in the Assigned Patent Applications, subject to the conditions set
forth in Section 2.3 of this Agreement. In order to effect such ownership
transfer, contemporaneously with the execution of this Agreement, Microsoft has
executed that certain separate assignment document, to be recorded with the
United States Patent and Trademark Office. Microsoft shall reasonably cooperate
with Expedia in the filing and prosecution of the Assigned Patent Applications.
2.2 Microsoft promptly shall deliver to Expedia all documentation
pertaining to the Assigned Patent Applications, including copies of all
correspondence to or from examining authorities regarding such Assigned Patent
Applications, patents and prior art searches pertaining to such Assigned Patent
Applications, and all correspondence with any attorney involved in the
preparation and/or prosecution of the Assigned Patent Applications.
2.3 Upon execution of the assignment document, Expedia grants back to
Microsoft and its respective Affiliates a non-exclusive, non-transferable,
worldwide, irrevocable, perpetual, royalty-free, fully paid-up, license under
the Assigned Patent Applications to reproduce, make, have made, use, import,
offer for sale, and sell any products or services.
3. ROYALTY SHARING
3.1 Expedia shall pay Microsoft forty percent (40%) of any royalties
collected by Expedia in the licensing of any of the Assigned Patent Applications
or subsequently issued patents to licensees who do not provide Online Travel
Services. In the event that Expedia has to litigate to obtain, maintain or
collect such royalties, Expedia is entitled to deduct reasonable attorneys fees,
costs and expert witness fees from the total royalties collected.
3.2 Expedia agrees to make written reports to Microsoft quarterly
detailing the royalties collected pursuant to Section 3.1 above. Expedia's
obligation to produce this report commences in the first quarter in which such
royalties are collected. Expedia further agrees to maintain records showing
royalties collected to enable the royalties payable hereunder by Expedia to be
determined and to permit its books and records to be examined from time to time
to the extent necessary to verify the written reports provided.
3.3 Expedia shall pay all royalties owed on a quarterly basis to
Microsoft for a period of ten (10) years from the Effective Date of the
Agreement at which time Microsoft's ownership interest in any subsequent
royalties shall terminate. The quarterly royalty payments shall be submitted
with the written report provided for in this Section 3.2.
4. WARRANTIES AND LIMITATION OF LIABILITY
4.1 WARRANTIES.
4.1.1 Microsoft represents and warrants that: (a) it is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Washington and has full power and authority to enter into
this Agreement and perform its obligations hereunder; (b) immediately prior to
the execution of this Agreement (and subject to such licenses as have been
disclosed to Expedia in writing), Microsoft owns all right, title and interest
in and to the Assigned Patent Applications; and (c) it has the legal right to
grant all the rights it purports to grant and to convey all the rights it
purports to convey pursuant to Section 2.1 above.
4.1.2 Expedia represents and warrants that: (a) it is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Washington and has full power and authority to enter into
this Agreement and perform its obligations hereunder, and (b) provided the
grants, conveyances and assignments made under Section 2.1 above are effective,
it has the legal right to grant all the rights it purports to grant pursuant to
Section 2.3 above.
4.1.3 EXCEPT AS PROVIDED IN THIS SECTION 4.1, EACH PARTY
DISCLAIMS ALL WARRANTIES, EITHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT
NOT LIMITED TO ANY (IF ANY) IMPLIED WARRANTIES OF MERCHANTABILITY, OF FITNESS
FOR A PARTICULAR PURPOSE, AND OF LACK OF NEGLIGENCE OR LACK OF WORKMANLIKE
CONDUCT OR EFFORT. ALL PATENT APPLICATIONS ASSIGNED UNDER THIS AGREEMENT ARE
PROVIDED AS IS WITH ALL FAULTS, AND NO WARRANTIES OR PROMISES ARE MADE THAT THE
SAME WILL WORK OR WORK FOR ANY PARTICULAR PURPOSE. EXCEPT AS PROVIDED IN THIS
SECTION 4.1, THERE IS NO WARRANTY OF TITLE, AUTHORITY OR NON-INFRINGEMENT IN ANY
SUCH PATENT APPLICATIONS.
4.2 LIMITATION OF LIABILITY. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES WHATSOEVER ARISING OUT OF OR IN ANY WAY
RELATED TO THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES. THE IMMEDIATELY PRECEDING SENTENCE SHALL HAVE NO APPLICABILITY
TO ANY LEGAL CAUSE OF ACTION ARISING FROM ANY PARTY'S ACTIVITIES OUTSIDE THE
SCOPE OF THIS AGREEMENT.
5. GENERAL
5.1 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties with respect to the subject matter hereof, and to the extent that
this agreement is inconsistent with any prior agreement(s) between the Parties,
the terms of this agreement
are to control. Nothing in this Agreement shall be deemed to alter the survival
provisions of Section 7.4 of the License Agreement.
5.2 AMENDMENT. This Agreement shall not be amended or otherwise
modified except by a written agreement dated subsequent to the date of this
Agreement and signed on behalf of Microsoft and Expedia by their respective duly
authorized representatives.
5.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington.
5.4 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
5.5 NO WAIVER. No waiver of any breach of any provision of this
Agreement shall constitute a waiver of any prior, concurrent or subsequent
breach of the same or any other provisions hereof, and no waiver shall be
effective unless made in writing and signed by an authorized representative of
the waiving party.
5.6 SAVINGS CLAUSE. If any provision of this Agreement shall be held by
a court of competent jurisdiction to be illegal, invalid or unenforceable, the
remaining provisions shall remain in full force and effect.
5.7 FURTHER ASSURANCES. Each party agrees to take such further
action and execute, deliver and/or file such documents or instruments as are
necessary to carry out the terms and purposes of this Agreement.
5.8 SECTION HEADINGS. The section headings used in this Agreement
are intended for convenience only and shall not be deemed to supersede or modify
any provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the Effective Date.
MICROSOFT CORPORATION EXPEDIA, INC.
By /s/ Richard Emerson By /s/ Mark S. Britton
------------------------------------ -------------------------------
its authorized representative its authorized representative
Agreement to Assign Patent Applications and Royalty Sharing Agreement - Microsoft Corp. and Expedia Inc.
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