Form Of Software License Agreement

EXHIBIT 10.11


[LOGO] SOFTWARE LICENSE AGREEMENT


This Software License Agreement ("Agreement") is made effective as of , 1999 ("Effective Date") between:


Quadrant International, Inc. ("QI") and ("Licensee")


As of the Effective Date, QI and the Licensee agree as follows:


1. DEFINITIONS. For the purposes of this Agreement, (a) "QI Software" means QI's software DVD player, as more fully defined in Schedule A, and subsequent versions thereof. (b) "License Fee" means the amount of amounts referred to in Section 4 and set out in Schedule A and payable by Licensee to QI under the terms of this Agreement. (c) "Territory" means the geographic area set out in Schedule A.


2. LICENSE. Subject to the terms and conditions of this Agreement, QI grants to Licensee within the Territory the personal, non-exclusive, non-transferable limited license and right, for the term of this Agreement, to reproduce the QI Software and the right to sublicense and distribute to end users who purchase or have purchased computer systems from Licensee copies of the QI Software, pursuant to the End User License Agreement, or a substantially similar form, as set out in Schedule B, to be used in conjunction with Licensee's products. Nothing herein gives Licensee the right to distribute, or to authorize any other entity to distribute, the QI Software as a stand-alone product.


3. TERM. Unless sooner terminated pursuant to Section 15 below, this Agreement shall be effective for a period of one (1) year beginning on the Effective Date, and shall continue thereafter from year to year until either party notifies the other party in writing at least ninety (90) days prior to an anniversary of the Effective Date of its intention not to renew as of such anniversary date.


4. LICENSE FEES - QI SOFTWARE. A License Fee for each and every copy of QI Software is payable on a "Per Copy" basis as provided in the attached Schedule A. Licensee agrees to pay the applicable License Fee to QI when due. Licensee further acknowledges and agrees that all payments pursuant to this Agreement will be made by Licensee in U.S. dollars. The Per Copy payment method requires Licensee to pay a License Fee on a monthly basis to QI for each and every copy of the QI Software reproduced by Licensee, or provided to Licensee by QI, during a month and which is sold, shipped, or otherwise distributed by Licensee. Within fifteen (15) days following the end of each month, Licensee will provide QI with a report detailing the numbers of copies reproduced or received by Licensee and payment for the copies specified on the report. QI represents and Licensee acknowledges that DOLBY license fees shall be in addition to the Licensee Fees and shall be in the amount set out on Schedule A. QI further represents and Licensee acknowledges that any license fees assessed during the term of this agreement by DVD Forum, MPEG LA, CSS or other third parties shall be in addition to the Licensee Fees as set forth in Schedule A.


5. PAYMENT TERMS. All License Fees and other amounts payable under this Agreement shall be paid by Licensee to QI promptly when due and without any set- off or deduction. Any late payments by Licensee shall be subject to added interest at a rate of 1 1/2 percent per month that such payments are late.


6. AUDIT. During the term of this Agreement, Licensee agrees to keep all usual and proper records and books of account an all usual and proper entries relating to each and every copy of the QI Software sold, shipped or otherwise distributed to a customer. In order to verify statements issued by Licensee and Licensee's compliance with the terms of this Agreement, QI shall have the right to: (i) audit the financial records of Licensee so as to verify the applicable license fee; and (ii) inspect Licensee's facilities and procedures. The cost of this audit shall be the responsibility of QI unless the audit shows an amount owing to QI of at least five percent (5%) in addition to the amount paid by Licensee, in which event Licensee shall be responsible for the costs of such audit. In no event shall audits be more frequently than semi-annually unless the immediately preceding audit disclosed a discrepancy.


7. TAXES. All fees and all other charges specified in this Agreement are exclusive of all applicable goods and services taxes, provincial sales taxes and any other taxes, including sales or use taxes (collectively called the "Purchase Taxes"). Licensee shall pay all Purchase Taxes (other than taxes on QI's net income), howsoever designated or levied, as a result of the transactions contemplated by this Agreement.


8. OWNERSHIP. The QI Software is licensed, not sold, to Licensee only under the terms of this Agreement. All right, title and interest in and to the QI Software shall at all times remain with QI and its licensors and suppliers, including any and all copyrights, patents, trade secrets, trademarks and other intellectual property and proprietary rights to the QI Software.


9. TRADEMARKS AND TRADENAMES. Licensee shall not remove, alter or obscure any QI trademark, logo or similar identifying mark on the QI Software. Licensee recognizes QI's ownership and title to the trademark "QI", all other trademarks and trade names of QI and the goodwill attaching thereto. If QI, in its sole discretion, determines that any of Licensee's advertising, promotional or other materials are inaccurate or misleading with respect to QI or the QI Software or are inaccurate or misleading with respect to, or otherwise misuse, QI trademarks or trade names, Licensee will, upon notice from QI, promptly change or correct such materials at its own expense.


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[LOGO] SOFTWARE LICENSE AGREEMENT


10. PRODUCT SUPPORT. QI shall be responsible for providing reasonable maintenance and support to Licensee for QI Software consistent with QI's then current customer and product support policies. Licensee agrees that Licensee is solely responsible for any and all support to be provided to end users for QI software.


11. RESTRICTIONS.


(a) QI represents and Licensee acknowledges that the QI Software contains proprietary and confidential information of QI and constitutes trade secrets of QI (collectively referred to as "Confidential Information") and are protected by copyright, patent, and or trade secret laws and international treaties. Licensee acknowledges the proprietary rights of QI in and to the QI Software and Licensee agrees not to decompile, reverse engineer or otherwise determine the operation of the products or permit any third party to do so.


(b) Licensee agrees to implement and support a mutually agreed upon Copy Protection mechanism as requested by QI.


(c) Licensee will not and will not authorize any other entity to copy, modify, disclose or transfer to any person all or any part of the QI Software, except as expressly authorized in section 2 of this Agreement.


(d) Licensee will not make the QI Software available for distribution on-line via the Internet or a bulletin board, or by any other electronic means.


(e) Licensee will not knowingly distribute to any customer who infringes QI's proprietary rights in the QI Software.


(f) Licensee represents and warrants that it is a licensee of Macrovision Corporation ("Macrovision") and is permitted under its license agreement with Macrovision to sell and distribute QI software including such functionality.


(g) Licensee represents and warrants that it is a licensee of CSS and is permitted under its license agreement with CSS to sell and distribute QI software including such functionality.


12. INDEMNIFICATION.


(a) QI agrees to defend Licensee against, and pay the amount of any adverse final judgment (or settlement to which QI consents) resulting from any third party claims alleging that the QI Software as licensed under this Agreement infringes any U.S. patent, copyright, or trade secret. QI's obligation under this section is conditioned on Licensee's agreement that if the QI Software, in QI's opinion, is likely to become the subject of such a claim, Licensee will permit QI, at QI's option and expense, to either procure for Licensee the right to continue marketing and using the allegedly infringing QI Software or replace or modify them so as to become non-infringing. If neither of the foregoing alternatives is available on terms which are reasonable in QI's sole judgement, QI may terminate the license under this Agreement and Licensee shall immediately cease shipping and or distributing copies of the QI Software.


(b) QI shall have no obligation with respect to any claim based upon: (i) Licensee's combination of the QI Software with any other product provided such claim would have been avoided without such combination; (ii) modifications or changes made by Licensee to the QI Software; (iii) use of other than the most current unaltered release of the QI Software; (iv) continued use of the QI Software after Licensee first receives notice or such claim or action; (v) use of the QI Software in a manner for which they were not designed or not according to their specifications; or (vi) a claim of infringement of any essential patents or intellectual property rights related to the MPEGII standard or any other industry standard relating to DVD.


(c) Licensee will, at its expense, defend QI against any claim that the QI Software infringe a patent or copyright of a third party which claim is not subject to indemnification by QI under the above paragraph. Additio ...