AGREEMENT FOR USE OF GRAPHICS INTERCHANGE FORMAT(SM)
This Agreement is entered into as of the effective date set forth below
between CompuServe Incorporated, an Ohio corporation ("CompuServe"), and the
other undersigned party to this Agreement ("Developer").
Section 1. Grant of Rights.
1.1. Effective upon Developer's payment of the initial license fee
described in Section 2, CompuServe hereby grants to Developer a
worldwide: (a) license to use and exploit GIF(SM) to make, have made, use
sell Products solely within the Field of Use; and (b) sublicense to use and
exploit the Licensed Patent to make, have made, use and sell Products solely
within the Field of Use.
1.2. CompuServe will provide Developer with a single copy of the most
recent specification for GIF(SM) and any updates to such specification that
are released by CompuServe during the term of this Agreement. Once an
version of the GIF(SM) specification has been released by CompuServe,
Developer should incorporate the updates contained in the new specification
into its Products as part of Developer's ordinary release cycle.
1.3. Developer understands that CompuServe and Unysis Corporation are the
owners of all patents, copyrights, service marks and other intellectual
property embodied in the Licensed Technology. In connection with its use of
the Licensed Technology, Developer shall take all steps reasonably required
by CompuServe and/or Unysis Corporation to acknowledge and protect their
respective ownership interests in the patents, copyrights, service marks and
other intellectual property interests embodied in the Licensed Technology.
Developer further agrees not to take any action that would impair the
respective interests of CompuServe and/or Unysis Corporation in the Licensed
1.4. Developer may not use, copy, modify or distribute the GIF(SM)
specification, except as expressly permitted by CompuServe. Developer may
make three copies of the GIF(SM) specification for back-up purposes only,
provided CompuServe's service mark, copyright and other notices and legends
are included in such copy. Developer shall not alter or delete any of the
notices or legends contained in the GIFSM specification and any updates
thereto. Developer agrees to provide the following notice on Products or in
any Product documentation: "LZW compression and decompression methods are
licensed under Unysis Corporation's U.S. Patent 4,558,302 and equivalent
foreign patents. Additional technology embodied in GIF(SM) is licensed from
CompuServe Incorporated. Graphics Interchange Format and GIF are service
marks of CompuServe Incorporated."
1.5. Developer shall not grant any customer the right to use a Product
until such customer has been registered by Developer as a user of the
and customer's rights to use such Product are governed by an agreement with
Developer providing that (a) the customer's use of such Product will be
primarily for accessing the CompuServe Information Service and for
manipulating and viewing data received through the CompuServe Information
Service, and (b) the customer will not alter, enhance or redistribute any
1.6. This Agreement does not provide Developer with title to or ownership
of the Licensed Technology or any service mark of CompuServe, but only the
license granted herein. Developer may only grant its customers a limited
right to use Products.
Section 2. License Fees.
2.1. In payment for the licenses granted herein, Developer shall pay
CompuServe a one-time initial license fee of $ 1.00 which is due in full
the execution of this Agreement and a fee per Disposition equal to the
greater of (a) 1.5 percent of the selling price per Disposition or (b) $.15
per Disposition. Unless otherwise provided herein, all license fees and
other amounts payable hereunder by Developer shall be paid to CompuServe in
U.S. Dollars within ten (10) days after the end of each quarter. Quarterly
periods may be defined at CompuServe's discretion.
2.2. Developer is solely responsible for payment of any taxes resulting
from Developer's use of the Licensed Technology, except for taxes based on
the income of CompuServe or Unysis Corporation. Developer agrees to hold
CompuServe harmless from all claims and liability arising from Developer's
failure to report or pay such taxes. This paragraph shall survive any
termination of this Agreement.
Section 3. New Products.
Developer shall have the right to add additional Products solely within the
Field of Use by providing notice to CompuServe of the existence of each new
Product at the time such new Product is first offered to Developer's
Section 4. Reports.
Developer shall keep adequate records to accurately determine the payments
due under this Agreement. Each payment hereunder shall be made and
accompanied by a report in such manner and form as requested by CompuServe
setting forth the number of Dispositions of each Product occurring hereunder
and any other information reasonably necessary to calculate payments due
hereunder. Developer shall not enter into any arrangement under which
of Products will be prepared or the Licensed Technology used, unless
Developer has taken steps to ensure that it can account for and pay the
royalties required hereunder.
Section 5. Audits.
CompuServe shall have the right, no more than once during any calendar year,
to have an independent certified public accountant inspect the relevant
records of Developer on seven business days notice and during regular
business hours to verify the reports and payments required to be made
hereunder. Should an underpayment in excess of 10 percent be discovered,
Developer shall pay the cost of the audit. In any event, Developer shall
promptly pay any underpayment together with interest at the annual rate of
Section 6. Assignment.
This Agreement and the licenses granted herein may not be assigned by
Developer without the prior written consent of CompuServe.
Section 7. License Term.
The initial term of this Agreement shall commence on the effective date of
this Agreement and shall expire at midnight (EST) on the first anniversary
such date. This Agreement shall automatically renew for additional
consecutive one year periods, unless either party delivers a written notice
of termination to the other party not later than 30 days before the
expiration of the then current term.
Section 8. Termination for Cause.
This Agreement may be terminated by CompuServe: (a) upon 30 days prior
written notice, if Developer is in breach of any of its material obligations
hereunder and the breach is not remedied within such 30 day period; or (b)
upon reasonable written notice, if the Licensed Patent expires or is found
invalid or unenforceable in any proceeding before the U.S. Patent and
Trademark Office or in a U.S. court of law, after all appropriate appeals
have been finally decided. Promptly following any termination of this
Agreement, Developer shall (i) return all copies of the GIF(SM)
and any confidential information of CompuServe then in its possession or
control to CompuServe, (ii) stop using the Licensed Technology, and (iii)
stop distributing Products.
Section 9. Notices.
All notices or other communications required or permitted under this
shall be in writing and shall be delivered by personal delivery, registered
mail return receipt requested, a "Next Day Air" delivery service or by
customary electronic means, addressed as indicated on the signature page of
Section 10. Miscellaneous.
10.1. CompuServe represents that it has executed an agreement with Unysis
Corporation dated June 21, 1994, pursuant to which Unisys Corporation (a)
granted to CompuServe a license to sublicense the technology covered by the
Licensed Patent to make, have made, use and sell Products in the Field of
Use, provided such Products are identified to Unysis Corporation as required
by such agreement, and (b) agreed as follows: "Unysis hereby releases any
all claims of any nature based upon any use of the technology of the
Patent by Licensee in the Products, internal use in offering the CompuServe
Information Service, or use by its licensees in derivatives of the Products,
which have occurred to date and during the period of implementation of this
Agreement, provided that Licensee shall exercise commercially diligent
efforts to implement this Agreement as soon as reasonably practicable and in
no case later than six (6) months after the date this Agreement is executed
10.2. EXCEPT AS SET FORTH IN THIS AGREEMENT, COMPUSERVE DISCLAIMS ANY AND
ALL EXPRESS AND IMPLIED PROMISES, REPRESENTATIONS AND WARRANTIES WITH RESPECT
TO THE LICENSED TECHNOLOGY, INCLUDING ITS CONFORMITY TO ANY REPRESENTATION
DESCRIPTION, THE EXISTENCE OF ANY LATENT OR PATENT DEFECTS, OR ITS
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. This paragraph shall
survive any termination of this Agreement.
10.3. The cumulative liability of CompuServe for all claims arising out of
or relating to this Agreement shall not exceed the total amount of all
license fees paid to CompuServe hereunder. In no event shall CompuServe be
liable for any lost profits or incidental, special, exemplary or
damages for any claims arising out of or relating to this Agreement. This
paragraph shall survive any termination of this Agreement.
10.4. Nothing in this Agreement shall be construed as: (a) requiring the
maintenance of the Licensed Technology; (b) a warranty as to the validity or
scope of the Licensed Technology; (c) a warranty or representation that any
Product will be free from infringement of patents, copyrights, trademarks or
other similar intellectual property interests of third parties; (d) an
agreement to bring or prosecute actions against third party infringers of
Licensed Technology; (e) conferring any license or right under any patent
other than the Licensed Patent; or (f) conferring any right to use the
Licensed Technology outside the Field of Use.
10.5. This Agreement contains the complete and final agreement between the
parties, and supersedes all previous understandings related to the subject
matter hereof whether oral or written. This Agreement may only be modified
by a written agreement signed by duly authorized representatives of the
10.6. The validity and interpretation of this Agreement shall be governed
by Ohio law, without regard to conflict of laws principles. The parties
further consent to the exclusive jurisdiction of the state and federal
located in the City of Columbus, Ohio. Process may be served on either
by U.S. Mail, postage prepaid, certified or registered, return receipt
requested, and addressed as indicated on the signature page of this
This paragraph shall survive any termination of this Agreement.
10.7. Developer shall not disclose to anyone for any reason the terms of
this Agreement or any information provided to Developer by CompuServe that
marked as being confidential information of CompuServe, except with
CompuServe's prior written consent. Developer shall protect the
confidentiality of such information with at least the same degree of care it
employs to protect its own similar confidential information. Developer may
use such confidential information of CompuServe solely for purposes of
exercising its rights under this Agreement, and shall make no other use of
such information. This paragraph shall survive any termination of this
10.8. Developer acknowledges and agrees that Unisys Corporation is an
intended third party beneficiary of each and every provision of this
Agreement, other than Section 2 hereof, and may enforce any rights it may
have under such provisions to the fullest extent permitted by law as if it
were a party to this Agreement. This paragraph shall survive any
of this Agreement.
10.9. Developer shall indemnify and hold CompuServe, and its officers,
directors, agents, employees and affiliates, harmless against any damage,
loss, claim, action, liability, cost or expense suffered by or brought
any of the foregoing indemnified parties arising out of or relating to any
breach or violation of this Agreement by Developer or its customers or any
conduct of Developer or its customers relating to their use of the Licensed
Technology. This paragraph shall survive any termination of this Agreement.
Section 11. Definitions. As used herein:
11.1. "Disposition" means the sale, lease or license or any other grant of
rights to a Product or any new Product as may be added pursuant to Section 3
of this Agreement.
11.2. "Field of Use" means software provided by CompuServe or Developer and
used by subscribers to the CompuServe Information Service to access the
CompuServe Information Service or use information obtained over the
CompuServe Information Service which utilizes the technology of the Licensed
11.3. "GIF(SM)" means CompuServe's copyright and other intellectual property
embodied in the Graphics Interchange Format(SM) as described in the most
recent release of the specification for the Graphics Interchange Format(SM),
as the same may be updated from time to time during the term of this
but (for purposes of this Agreement) does not include the technology covered
by the Licensed Patent or CompuServe's service marks for the Graphics
Interchange Format or GIF.
11.4. "Licensed Patent" means U.S. Patent 4,558,302 registered in the name
of Unisys Corporation relating to digital data compression and
and all foreign counterparts.
11.5. "Licensed Technology" means, collectively, GIF(SM) and the Licensed
11.6. "Products" means software that is developed or distributed under this
Agreement which is designed for and used primarily for accessing the
CompuServe Information Service and for manipulating and viewing data
through the CompuServe Information Service, and any new Products as may be
added pursuant to Section 3 of this Agreement.
CompuServe Incorporated Developer
Name: Kent D. Stuckey Name:____________________________________
Title: Secretary Title:___________________________________
Address: 5000 Arlington Centre Blvd. Address:_________________
Columbus, Ohio 43220 ____________________________________
Phone: (614) 457-8600 Phone:___________________________________
Fax: (614) 457-9665 Fax:_____________________________________
Effective Date: __________________________________